Real Estate In 3 Years

Dynamics of Real Estate Sector in past three years

We spoke to leading real estate developers about government monetary policies, investment opportunities and factors that will determine the dynamics of real estate market in 2017.

Realty sector in past three years

Mr. Harinder Dhillon, VP Sales, DLF says “The past three years have been one of stability in the realty market. This is very important for the mature market since prices must reflect reality and should not be at the mercy of speculations. 2017 is off to a very good start with the announcement of a string of proactive measures in the union budget. Enquiries have already gone up significantly in January itself and this month we are already witnessing increased transactions. However transactions are taking place only with reputed developers where round the clock construction activities are taking place on a regular scale and past track record of the developer is excellent. 

Pankaj Bansal, Director, M3M Group feels that development of India’s core infrastructure is closely linked to the real estate and construction sectors. “The real estate industry’s growth is linked to development in retail, hospitality and entertainment industries, economic services and information technology enabled services etc. With economic growth picking up, the demand for office space has witnessed substantial increase over the past couple of years. Demand for the real estate, in general remains strong except a temporary slowdown in last couple of months owing to remonetization of higher currency notes.”

Factors determining market performance in 2017

Dhillon express optimism regarding the performance of market in 2017. He says: “Overall I forsee a bright year for real estate in 2017. The current slowdown in property sales will be short-lived and things will start improving as government cracks the whip on benami property holders, banks reduce interest rates and the Real Estate Regulation and Development Act 2016 gets implemented by the states. The slew of initiatives underlined in the budget and the RERA implementation will see Indian real estate to be more transparent, credible and attractive with only organized players on the ground. In 2017, the primary sales market especially across larger cities will go up as real estate prices have already stabilized in these cities with minimum chance of further coming down. Buyers are going to have the best time in 2017. With surplus liquidity and lower cost of funds for the banks, lending rates by the commercial banks will come down which is good for the sector. Home buyers will find it easy to go in for housing loans. Consequently, demand for housing will go up. For office and commercial real estate sector too, 2017 holds a bright future. Going by the present trend, good connectivity, existing physical and social infrastructure in the area, availability of campus style offices will be determinants of the demand, rents and capital values. Overall Indian real estate sector will surely witness a healthy growth with growing demand in 2017 with organized, reputed and credible players on the ground.”

Bansal agrees with the view. He says: “There is large pent -up demand component as prospective homebuyers have been deferring their buying decision over last few years in anticipation of a price correction. In fact, we are already witnessing a pickup in demand, which may lead to increase in prices. With inflation under control, India is entering into a low interest regime as home loan interest rates have expectedly come down and are expected to decrease further. It will result in lowering of EMIs for homebuyers along with more people meeting the eligibility criteria. This coupled with rapid urbanization, robust economic growth and higher salaries would create a very large segment of new homebuyers resulting in enhanced demand for housing especially in the urban areas.”

According to him, the policy interventions introduced during the last year like RERA, amendments to Benami Transactions Act, REIT,GST are currently are expected to have considerable impact on the real estate sector. He says: “Most notably RERA is expected to bring greater transparency and accountability into the sector and would further enhance the confidence of homebuyers as well as institutional investors. Additionally, focus on infrastructure development, programs such as Housing for All,Smart Cities Initiative are expected to have a positive impact on the real estate sector.”

Developers are unanimous in the view that the regional factors will play a major role in shaping the real estate sector. Bansal says: “The Haryana government has taken many proactive steps for bringing investments in the state and accelerate the process of development. Process like Enterprise Promotion Policy, have created the right environment to encourage private investments in the State. The government also introduced slew of policy initiatives like TOD Policy, New Integrated licencing policy among others providing impetus to the real estate sector. Additionally the government has been focused on improving the infrastructure, which is critical for the growth of the real estate sector. The Government also organized the Haryana Investor Summit which witnessed record participation and substantial investment commitments from the private sector.

Realty scenario post RERA implementation

The developers have welcomed RERA which according to them would spell a turnaround for the real estate sector. Dhillon says: “The implementation of RERA will be a game-changer in the real estate sector. The Act will be a harbinger of transparency into the sector. It will be headed towards becoming competitive, value-offering, hassle- free and definitely consumer-based. All these present a very promising picture but execution is what will define the actual course of these changes.”

Bansal echoes a similar sentiment. “Formation of an independent regulatory authority would boost the confidence of homebuyers. RERA will also become a repository of all project information such as layout, approval status, contractor details, schedule of project, completion timelines etc. The information will then become available to consumers, in countries with an existing regulatory framework in real estate sector, the impact of foreign investments has been positive, as it allows the transparent and effective functioning of the sector. This is expected to benefit the Indian real estate sector as well once the state-level RERA are also in place and necessary processes have been laid out.”

Which sector did well in past couple of years

According to Dhillon, the Indian retail sector has witnessed robust growth over the last decade fuelled by rapid urbanization and changing lifestyles of Indian customers. “From less than 1 million sq ft of mall space in 2001, the Indian organized sector has increased manifold. However, the ups and downs of the Indian economy had always taken its toll with changes in absorption and vacancy over the years.”

Recent budget and government Incentives for NRIs

Bansal lauds the budget incentives. “The Union Budget of 2017-18 largely introduced positive policy directives for the real estate sector particularly affordable housing sector. The move to impart infrastructure status to this sector was a significant move in particular,” he says.

Dhillon feels that government incentives towards NRIs have given a fillip to the real estate sector. “We are witnessing increased interest from NRIs post demonetization. The confidence of NRIs on the real estate sector has gone up tremendously with the current regime’s focus on wiping out black money from the economy. The same segment had gone into a shell in near past, on account of delayed project deliveries. However, with RERA coming in, and emphasis on clean up across the sector, the focus of developers has shifted to delivering existing projects on time and as per committed specifications. This has significantly revived the trust of NRIs on the real estate sector, especially projects of reputed developers with an impeccable track record,” he concludes.

Elan Miracle 1

Elan announces launch of premium mixed use project Elan Miracle

Gurgaon: Leading real estate player Elan Group announced the launch of Elan Miracle, a premium mixed use development project in Gurugram.

Located in Sector 84, Dwarka Expressway, Elan Miracle is well connected to Central Peripheral Road, Southern Peripheral Road and ISBT, as well as enjoys metro connectivity from both sides.

The project covers an area of 7 acres with 1.5 million sq. ft of development area, and is a perfect blend of high street retail with double height shops, hypermarket, food court, superplex and luxury serviced apartments with one of the biggest Club houses in a commercial project.Designed by UHA London- Elan Miracle houses one of the tallest buildings in Gurugram.Shilpa Shetty With Elan Groups Managemt At The Launch Of Elan Miracle

Consisting of approximately 1000 units, the 550- crore project will also house the nation’s largest PVR cinemas. The superplex will boast of 18 screens featuring Premier, Gold Class, IMAX,4D, 5D AND 7D. Elan Group also aims at making a dedicated cricket theme floor in Elan Mircle and former captain of Indian cricket team, Mr. Mahendra Singh Dhoni is the first cricketer to be a part of it.

The project is priced at Rs 14,000 per sq ft for retail spaces whereas service apartments in the project are priced at Rs 9000 per sq ft.

On the occasion, Mr. Ravish Kapoor, Director, Elan Group, said: “We are excited to launch our premium project in Gurugram. We believe that Gurugram is one of the promising real estate markets of the country. The launch of Elan Miracle is in line with our strategy of establishing a strong footprint in large developing markets across the country. The project will offer a contemporary and luxurious lifestyle to the city.”

The construction of the project will begin in the fourth quarter of 2017 and will be completed by 2020.

Besides Elan Miracle, Elan Mercado in Sector 80, and Elan Town Centre in Sector 67, Sohna Road at Gurugram are other two projects by the developer.

Dream Home

Buy your dream home now

Gurgaon: The onset of demonetization appeared to hit the country hard. However, as the economy started to revive post demonetization, people realized the long-term benefits of the move. The demonetization had a considerable impact on the real estate affecting not only developers but also buyers who witnessed price stability in the sector. The real estate market of Gurgaon amply demonstrates how recent government initiatives have helped the sector to become more buyer-friendly.

FOSECA

Court Hauls up AN Buildwell Promoters

A.   Court upholds Customer Rightsupon Siphoning by ANB Promoters.

B.   Promoters and Ex-Directors to face SFIO Enquiry.

C.   Path cleared for Revival of Projects by Customer Associations.

 

It is getting clear with each hearing that the Hon’ble High Court of Delhi is looking into the interest of 1791 customers and creditors of the beleaguered AN BuildwellPvt. Ltd at a holistic level and is not hesitating to set a new direction that will help serve as a precedent towards solutions to the present Real Estate quagmire in the NCR.

A.Court upholds Customer Rights upon Siphoning by ANB Promoters.

  1. Legal representatives of Customer Associations (FOSECA and SWBA) led by Sr. Advocate Sandeep Sethi argued their application under Section 542 for appointment of SFIO.
  2. Adv. Sandeep Sethi took the Court through the various instances of siphoning to companies related to the Promoters and misappropriation from the imprest account by Investor Directors, that subsequently led to the acute cash position of the beleaguered AN Buildwell Pvt. Ltd.
  3. Customer Associations have consistently argued the deliberate nature of the liquidation of AN Buildwell Pvt. Ltd. vide winding up order dated 08.03.2016 in a conspiracy between the Promoters and the SphereInvest Group.
  4. The Bermuda based SphereInvest Group is the largest shareholder of AN BuildwellPvt Ltd, and has admitted its complicity in obtaining the liquidation order in its newsletter to its shareholders overseas.

B.Promoters and Ex-Directors to face SFIO Enquiry.

  1. Hon’ble Justice Mridul came down heavily on the Promoters and Investor Directors, and specific questions were put to Adv. VivekKohli, representing the Promoters:

      i. Whether the money was in fact advanced to Related Parties?

      ii. If so, did this money get utilized for the benefit of AN Buildwell or was it misappropriated?

  • If not utilized for the benefit of AN Buildwell, then was it returned?
  1. The Court took the view that if the money with interest was not returned then it is diversion, and then shouldn’t the Directors as per winding up order of 08.03.2016, constituting the ex-management of AN BuildwellPvt Ltd face SFIO and criminal prosecution?
  2. The ex-management of ANB, ie Mr. Surender Kumar Hooda, Mr. Sunil Gandhi, Mr. Michael Collins and Mr. VipenKapur have been given 3 weeks to file their reply.

C.Path cleared for Revival of Projects by Customer Associations.

  1. Hon’ble Justice Mridul took a view that companies cannot be reverted to wrongdoers who have harmed the interests of the company or siphoned money of the public at large in response to Adv. VivekKohli’s contention that an SFIO enquiry would derail the Promoter’s Scheme.
  2. Any attempt to derail proceedings by the Promoters by referring to the need for building plans etc. were quickly thwarted by Hon’ble Justice Mridul, who clearly stated ‘you do not need a map to a place you won’t have to go to’.
  3. The Court has also ordered the PL (Provisional Liquidator) to file replies on the amended Revival Schemes filed by Customer Associations as well as Promoters.
  4. The Revival Scheme filed by Customer Associations has the support of majority of customers and creditors and is self-sufficient through funds and resources mobilized by them, thereby paving the way for a historic precedent to set in the coming few days.

 The Delhi High Court vide its order dated 08.03.2016, ordered winding up of the company. The liquidation has been deliberately obtained by the company to escape its liability to fulfill obligation towards customers and also to cover up its acts of mismanagement. If the liquidation happens, it will adversely affect the interest of approximately 1800 customers and other creditors of the company.

Funds have been siphoned off from AN Buildwell by its promoters, Surinder Kumar Hooda (18.81 crores), Sunil Gandhi (18.6 crores) and a shareholder, Sphere Invest Group 4.63 crores), in various projects like Green Edge Infrastructure Pvt Ltd, Inspire InfratechPvt Ltd, NalandaRealtechPvt Ltd and CharmwoodRealtechPvt Ltd, etc.

AN Buildwell, which has its registered office at 504, 5th floor, BhikajiCamaBhawan, 11, BhikajiCama Place, New Delhi, promoted two projects namely, one IT Park named “Spire Edge” at CP-04, Sector-08, IMT Manesar and a residential project “Spire Woods” at Sector-103, Gurgaon. As of now there are 517 customers in Spire Woods and 1274 customers in Spire Edge.

Vacation Home

Trend of owning second or vacation homes on a rise

Gurgaon: Owning a second home had been traditionally preferred by elite as it was considered a status symbol. The concept of owning a second home has evolved out of city life becoming more chaotic and property developers coming up with holiday home projects in the vicinity of cities and rise in people with higher disposable incomes. “The second home market has evolved wherein apart from consideration of having a holiday getaway, today buyers are looking at earning steady income and decent returns. Majority of these buyers continue to be from upper- income segment and include NRIs, retired government officials and high net-worth individuals having large disposable incomes,” says Deep Kantawala, head, ICS Real Estate Partners and CFO, ICS Group.