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CIDCO nets over Rs 525 crore through auction of 11 plots in Navi Mumbai’s Kharghar

News source : The Economic Times | Written By Kailash Babar

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CIDCO has recently decided to adopt certain provisions of the recently introduced Unified Development Control Promotion Regulations (UDCPR) for rapid and efficient development of the Navi Mumbai Airport Influence Notified Area (NAINA).

The Maharashtra government’s town planning authority, the City and Industrial Development Corporation (CIDCO) has received bids worth Rs 525 crore for the auction of land parcels totaling 7.4 acre in Kharghar locality of Navi Mumbai.

The bids for all 11 plots are nearly 2 to 4 times higher than the reserve price set by the authority. All land parcels are located in sector 11 of Kharghar and will be open for both commercial and residential development.

One of the plots has received the highest bid of Rs 2.11 lakh sq meter, which will be counted amongst the most expensive land transactions in Navi Mumbai. The base price for the plots ranged from Rs 55,000 to Rs 68,000 per sq meter.

While the auction has witnessed participation of several real estate developers operating in Mumbai and Thane property market, Navi Mumbai-based developers have outbid them to acquire these land parcels.

Realty developers including Uma Infratech, ECASO Ventures, Nucleus, Infinity Infra, Future Icon Builders LLP have emerged as the highest bidders for the plots.

These plots auctioned through electronic process can be developed with base floor space index or the ratio of permissible development on the said land parcel, of 1.5 times.

“The demand for housing has bounced back and the response to the CIDCO auction makes it evident that the infrastructure development including metro and an airport will push the attractiveness of the zone further. The proposed international corporate park development is also prompting more participation from developers,” said Rajesh Prajapati, founder president, CREDAI-MCHI Raigad.

Over the last few years, Navi Mumbai has gained smooth connectivity due to its suburban railways, highways and network of internal roads. The city, known to be the satellite city of the country’s financial capital Mumbai, will soon have global connectivity with the development of Navi Mumbai International Airport.

Kharghar is one of the developed nodes of Navi Mumbai and it houses a number of educational institutions. Apart from the upcoming Metro Rail, the node has a golf course and is in close proximity to the upcoming international airport in Navi Mumbai.

The government is also planning to develop a business district spread over 308 acres on the line of Bandra-Kurla Complex (BKC).

CIDCO has recently decided to adopt certain provisions of the recently introduced Unified Development Control Promotion Regulations (UDCPR) for rapid and efficient development of the Navi Mumbai Airport Influence Notified Area (NAINA).

To prevent haphazard development around the Navi Mumbai International Airport, CIDCO has proposed the development of NAINA on 371 sq km of land from the Thane and Raigad districts. This development aims to develop a sustainable city with residential, commercial, educational, and all other basic civic facilities.

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CREDAI-MCHI

Real Estate | Why is India’s affordable housing segment shrinking?

News Source: Money Control
E JAYASHREE KURUP

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As prices move up, inventories drop, and active home buyer numbers show only a marginal drop, the Indian housing industry finds itself at a crossroads

Urban India has housed itself very well in the past three years. After an almost seven-year hiatus, housing demand picked up, hitting unprecedented levels during the pandemic. Major reports issued after the first half-year analysis in 2022 showed more launches, higher sales, and increasing levels of ownership among end-users.

However, home buyers in India, like the country’s economy, have been divided into two distinct sections. After the pandemic, those employed in the upper strata of the workforce, especially in IT, BFSI, and formal industries, have performed well and with three years of limited or no spending, have used the corpus they accumulated to buy homes to live in. The lowest-ever level of home loan interest rates also ensured that borrowers were able to get more finance to buy bigger homes.

 

The Rs 1 crore and above homes witnessed a growth of about 25 percent, according to a Knight Frank report. The Gera Pune Residential Realty report pegged sales in Pune city at ​​105,625 homes, a 25 percent growth year-on-year. The Anarock report recorded brisk sales in the January-June period with the second quarter recording lower sales than the January-March quarter.

Interestingly though, the Gera report pointed out the stark difference in sales patterns in 2019 vs 2022. Budget homes costing less than Rs 4,236/sq. ft. accounted for a mere 28 percent in 2022, compared with 57 percent in 2019. The share in new launches of affordable homes has correspondingly dropped from 42.2 percent in June 2019 to 21 percent in June 2022. Meanwhile, the share of super-premium luxury housing of about Rs 8,000/sq. ft. and above, rose from 0.6 percent of the total stock in 2019 to 2.2 percent of the total stock in June 2022. Today, it accounts for 20 percent of new stock released.

So, what has resulted in this change? The housing industry, like the automobile industry, is shifting towards to the premium segment at the cost of the budget category. Last week, Maruti Suzuki announced its intent to focus on premium SUV segments, and downplay or even consider moving out of the value and budget cars. The consumer base displaced from the workforce during the shutdowns have now re-entered as part of the gig economy. They have the earning power to stay in the city but not enough to purchase an asset where the payments are large and long-term. In many cases, access to credit is also a challenge as security of tenure is not assured.

This affordable housing segment was also the most sensitive to rise in interest rates. As the Reserve Bank of India (RBI) raised repo rates to contain inflation, home loan interest rates have risen too, and are likely to rise further. This effectively means that the amount of loan that can be accessed by a borrower falls and, in many cases, becomes less than what is required to buy a house in the affordable category.

The Magicbricks Propindex for June 2022 noted, “The average rates of ready-to-move (RTM) properties saw an upward movement by 2.3% QoQ & 6.4% YoY”. While the mid and premium segments can still afford to absorb that, the lower income categories, already squeezed by inflation at home, may opt out of buying for the medium term. This may lead to a robust demand for rental housing in the affordable segment.

The real estate industry needs safeguards. The pace and strength of home buying over the past three years was triggered by the fear of moving around during the pandemic as well as the pent-up demand of the past seven years. The advent of the Real Estate Regulatory Authority (RERA) six years ago pushed the industry to use collected money to complete projects, and maintain escrow accounts. This led to increased consumer confidence. The evidence on the ground that showed stalled projects moving towards completion also added to the consumer confidence levels.

Buying completed inventory at a time when consumers wanted to own houses rather than leasing it, was relatively risk-free. The risk of the wait period, and delay, was practically eliminated.

However, every report today points to much lower inventory overhangs of just 7-9 months left. Will consumers continue to buy under-construction properties at the same pace, even with RERA in place? Will developers ensure financial closure of projects before launch so that they have enough money to execute, even if sales volumes are low? Will the volume of luxury properties being built continue to be picked up at the same pace?

The industry is at a crossroads. It has resorted to launching smaller phases of projects, and is focussed on execution and delivery. Buying trends are far from stable, and may continue to change. But an agile and restrained industry should be able to meet this demand.

E Jayashree Kurup, Director, Real Estate & Cities, Wordmeister Editorial Services, writes on real estate and housing. Views are personal and do not represent the stand of this publication.

 

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CREDAI-MCHI

Investments in real estate reach $2.6 bn in H1 2022; office sector leads with 48% share: Colliers India

News Source: Business Today Desk
Updated Jul 11, 2022, 1:28 PM IST

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As per the Colliers India report, office sector led on the investment inflows front on the back of large technology companies continuing to lap up office spaces. Moreover, as per the report, investors too are taking a long view of the sector.

Institutional investments in the real estate market went up to $2.6 billion during January-June 2022, an on-year rise of 14 per cent from H1 2021. Investment inflows were led by office sector which accounted for a whopping 48 per cent, according to a recent report by the professional services and investment management company Colliers India.

Office sector led on the investment inflows front on the back of large technology companies continuing to lap up office spaces. Moreover, as per the report, investors too are taking a long view of the sector and binding assets into REITs.

For H1 2022, the retail sector followed up with a 19 per cent share of investment inflows on account of expansion of fashion and F&B brands, completed malls becoming investment avenues, and pickup in footfalls in malls. Investments into the alternate assets went up 53 per cent on-year to $370 million in the same period as investors looked to diversify their portfolios as deals during the period included data centers, holiday homes and life sciences.

“Moreover, there is untapped potential in India’s alternate assets which investors are looking for from a diversification perspective. During H1 2022, inflows in alternate assets accounted for 14 per cent of total investments. The next few quarters will see some greenfield investments, especially in the office and industrial & logistics sector,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Industrial and logistics sector and residential sector, on the other hand, saw subdued inflows during the first half of 2022. Talking of on-year change in investment growth, the report further stated that investments in the office sector went up by 20 per cent while retail sector saw a whopping 537 per cent rise in investments year-on-year, the study pointed out.

“The first half of 2022 has witnessed euphoria of businesses bouncing back with increased office and industrial leasing, retail and travel spend, and continued buoyancy in the residential sector. However, the market is seeing some caution on account of geopolitical tensions and increased expected risk-adjusted returns,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services, Colliers India.

Talking of investment hubs, Delhi-NCR continues to lead the pack with highest inflows of 35 per cent, followed by Mumbai with 11 per cent share and Chennai with 10 per cent share. Multi-city deals continue to remain highly preferred among investors with 43 per cent investments during the first half of 2022.

Domestic players are also back with a bang as domestic investments into the real estate market comprise 38 per cent market share in H1 2022, a jump from 13 per cent in the same period last year. Domestic investors inclined towards mixed-use assets and retail sector, the Colliers India report noted.

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Maharashtra: Property registration revenue dips in November but continues to remain above average

News Source: The Free Press Journal Journalist: Varun Singh

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Photo: Shutterstock

Stamp duty is a major source of revenue for the state government. On average in this financial year, the state government’s treasury, received Rs 2,500 crore through registration of properties and other documents with the Department of Registration and Stamps.

In October the figures had crossed Rs 3,200 crore mark and hence, when in November the figure came down to Rs 2,700 crore there was a hullabaloo that the real estate market was negatively impacted.

However, inspector general of registration, Shravan Hardikar said, he doesn’t see a dip in November, instead November performed better than the average.”The average we have been seeing this year is Rs 2,500 crore per month. October did exceptionally well, and the revenue collected was Rs 3,200 crore, in November the revenue collected was Rs 2,700 crore, which is above the average collection we have seen,” he said.

He said November had almost 10 holidays, including Diwali. Hence during the 20 working days, the collection of Rs 2,700 crore is a huge revenue. Last year, November had witnessed a substantial rise in registration as the state government had offered a discount on stamp duty from September 2020 to March 2021.

This prompted the developers to pass on the benefit to the home buyers, who too, rushed to buy homes. However, this year there was no such offer, yet the registration figures have surpassed the pre-pandemic days on many occasions.

When asked about the dip in registration figures in November compared to October, former president of CREDAI-MCHI, Nayan Shah said, “It’s natural, it has to happen, things peak then there is a valley.” The sales were less in November compared to October, and experts believe, availability of limited ready housing units and under construction not getting much traction could be a reason behind the dip. Pankaj Kapoor, MD, Liases Foras, a real estate research firm said, “I think there was a dip in sales post Diwali.

Mainly the pent up demand mostly got consumed. Besides, now there is limited ready stock available in primary as well as in the secondary market. Under construction units are still not gathering traction.”

Hardikar claimed the registration figures aren’t going down and predicted that in December too, the state may get revenue up to Rs 3,000 crore from registration. “Till the evening of December 16, the revenue generated was Rs 1,700 crore, by the end of this month the figure can touch up to Rs 3,000 crore,” he said. While the government is hopeful that the revenue shall keep coming in, experts and developers have a different opinions.

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