Daily Real Estate brief from PNT
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Maharashtra State Housing Federation advocates for comprehensive revisions to the 1970 Apartment Act
The Maharashtra State Housing Federation is championing amendments to the 1970 Apartment Ownership Act, aiming to expedite the redevelopment of older cooperative society apartments. A 15-member committee has already submitted recommendations to the state government, focusing on clearer definitions of common areas and empowering self-redevelopment. With 100,000 buildings under the Act and recent state cabinet approvals to tackle redevelopment obstructions, these changes could redefine urban housing in Maharashtra. The government's response is eagerly awaited.
Larsen & Toubro (L&T) is experiencing significant growth in its order book, reaching around Rs 4.12 trillion as of June, with West Asia contributing 25% of this total. This surge in orders is largely attributed to a construction boom in Saudi Arabia. L&T's hydrocarbon division has also conducted a major recruitment drive in India, highlighting the strategic importance of the West Asian market for the company. L&T's proactive approach includes localizing offices, staff, and forming strategic partnerships in the region. This expansion and strengthened foothold in West Asia showcase L&T's commitment to serving the dynamic construction market in the region.
Noida-based Nivas Promoters has amicably settled disputes with allottees of its residential project, One Leaf Troy, following orders from Uttar Pradesh RERA (UP-RERA). In collaboration with Renowned Buildtech, a mutual settlement resulted in the payment of Rs. 62.11 lakh to all allottees, facilitating the withdrawal of their complaints. This resolution comes after the construction and development work of One Leaf Troy, situated in Greater Noida West's Sector 10, faced prolonged delays. UP-RERA had previously issued orders to ensure unit possession within a specified timeframe or the return of deposited amounts with interest for the delay period.
Raheja Developers, a prominent real estate firm, plans to invest INR 2,000 crore in its various projects over the financial years 2024, 2025, and 2026. This substantial commitment aims to expedite construction processes and ensure the timely delivery of residential and commercial properties. Raheja Developers has a well-established track record of delivering around 30 million square feet of real estate across various segments. Currently, they have 20 million square feet in progress, with the majority of projects scheduled for possession between fiscal years 2024 and 2026. This investment reflects the company's commitment to delivering innovative spaces and fulfilling its legacy in the industry.
Ashiana Housing is set to redefine the real estate landscape in western India with an ambitious growth plan. This expansion includes residential and senior living projects such as Ashiana Malhar and Ashiana Amogh, located in Pune. Covering a total area of 23.26 acres, these projects represent a significant investment of approximately Rs 550 crore. Ashiana Housing's focus on delivering exceptional projects with a commitment to quality and innovation is driving its rapid expansion in the western region. With a presence in nine Indian cities and a track record of delivering millions of square feet, the company is gaining trust and recognition.
Private housing societies in Maharashtra now have the authority to forcibly evict members obstructing redevelopment. The state cabinet has approved an amendment to the Maharashtra Apartment Ownership Act, introducing Section 6B. This new provision mandates apartment owners to vacate their premises when the association of apartment owners passes a resolution for redevelopment under Section 6A. In cases of non-compliance, the planning authority can involve the police to enforce eviction. This move addresses ambiguities and resistance in redevelopment projects and mirrors provisions in the MHADA Act. Over 40% of buildings in Pune and substantial percentages in other cities fall under this act.
The Himachal Pradesh High Court has made a significant ruling regarding a tenant's right to re-enter a property under the Himachal Pradesh Urban Rent Control Act of 1987. The court emphasized that this right is not absolute and must be evaluated on a case-by-case basis, taking into account factors such as the purpose of reconstruction and the landlord's genuine requirements. The judgment highlighted scenarios where tenants may not have a valid claim for re-entry, such as when a property is converted for commercial use or when a landlord intends to use it exclusively for personal residential purposes. This ruling underscores the need for a nuanced and context-specific approach when adjudicating tenant re-entry rights.
The Uttar Pradesh government is considering a rehabilitation package for stalled real estate projects, following recommendations from an expert committee led by Amitabh Kant. The package includes a four-year "zero period" during which interest on land dues and penalties for default would be waived. This zero period covers specific phases due to COVID-19 disruptions and environmental considerations. The committee also suggests granting additional floor area ratios (FAR) to projects on payment of extra charges to bridge funding gaps. Developers collectively owe over Rs 47,000 crore to development authorities in the region. This move aims to revive the real estate sector in Uttar Pradesh.
The special PMLA court in Mumbai denied bail to HDIL promoters Rakesh and Sarang Wadhawan, who have been in jail since 2019 in connection with the Punjab and Maharashtra Co-operative (PMC) Bank case. The court emphasized their deep-rooted involvement in money laundering, citing the total proceeds of crime amounting to Rs 6,117.9 crore. Despite the promoters invoking Section 436-A of the Criminal Procedure Code, which allows bail for undertrials detained for over half of the prescribed sentence, the judge rejected the plea, noting their suppression of facts regarding the time spent on various legal proceedings.
The SVAMITVA scheme, introduced by the Ministry of Panchayati Raj in April 2021, aims to establish property ownership in rural areas by mapping land plots using drone technology and providing property owners with their 'Record of Rights.' Union Minister Kapil Moreshwar Patil announced a collaboration between the Survey of India and the Arunachal Pradesh government to implement the SVAMITVA scheme's objectives. The Survey of India will lead the effort to map and create a comprehensive spatial database of rural areas in Arunachal Pradesh. The initiative aims to provide property cards to residents of the state within the next five years, promoting clear land ownership in rural India. Patil also praised the successful rollout of the Pradhan Mantri Awas Yojana and recommended empowering women's self-help groups in agriculture ventures.
Arkade Developers, a prominent player in the real estate sector, has successfully acquired a prime industrial plot spanning approximately three acres in Bhandup West, Mumbai, from Copper Rollers for a total value of Rs. 103.88 crore. The company has also received a letter of intent for forthcoming redevelopment projects in the Mumbai Metropolitan Region. Arkade Developers is actively working on five ongoing projects covering approximately 1.8 million square feet and plans to launch two upcoming projects in Vile Parle East and Malad West. Additionally, the company has submitted a draft red herring prospectus (DRHP) to SEBI for an IPO to raise up to Rs. 430 crore, signalling its strategic efforts for growth and expansion in the real estate market.
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Capri Global Holdings has recently sold a significant stake in Indiabulls Housing Finance Ltd, as per data from the National Stock Exchange (NSE). The transaction involved the sale of 25 lakh shares, equivalent to a 0.53 percent ownership interest in the company. This move signals Capri Global Holdings' strategic realignment of its investment portfolio, with the value of the shares sold amounting to a substantial sum. The sale underscores the dynamic nature of the financial markets and the strategic decisions being made by prominent players in the industry.
In a significant shift in India's real estate market, sales of premium homes priced above Rs 1 crore have surpassed those in the affordable segment below Rs 50 lakh for the first time, according to Knight Frank's Q3 2023 report. The quarter saw a six-year high in sales with 82,612 units sold, a 12% increase compared to the same period last year. The mid-income range, priced between Rs 50 lakh and Rs 1 crore, dominated with 29,827 units sold, constituting 36% of the market share, while the high-end segment above Rs 1 crore experienced a 39% surge to reach 28,642 units. This shift is attributed to rising interest rates and prices impacting the affordable housing sector, prompting the need for interventions to boost demand and viability.
Raymond, the prominent textile and apparel company, is set to invest up to Rs. 301 crore in Ten X Realty (TXRL), its wholly-owned subsidiary. This investment includes Rs. 125 crore in redeemable preference shares and Rs. 176 crore via an Inter Corporate Deposit (ICD). TXRL is currently involved in redeveloping a housing society in Mumbai's Bandra locality under a joint development agreement. This strategic investment reflects Raymond's commitment to its real estate ventures.
The Ahmedabad real estate market is witnessing a resurgence in redevelopment deals following a significant increase in jantri rates. Over 30 redevelopment agreements have been finalized in the past three months, with approximately 500 housing societies in active negotiations with developers. What's intriguing is that even relatively young societies are exploring redevelopment options. However, developers are grappling with floor space index (FSI) limitations that make many projects economically unfeasible. Despite these challenges, the drive to rejuvenate older societies remains strong, with hope for more feasible solutions in Transit Oriented Zones (TOZs).
Reliance Retail, India's largest retailer, has secured significant investments from global partners, including the Qatar Investment Authority and KKR, among others. These investments have more than doubled the company's valuation and resulted in a 30% surge in profits. With an extensive expansion plan, Reliance aims to open 55 new stores and grow its retail footprint across India. These strategic partnerships and funding injections are part of Reliance's strategy to bolster its presence in the Indian market and strengthen its position as one of the top retailers globally. The company has also partnered with international brands such as Burberry, Pret a Manger, and Tiffany & Co to enhance its offerings in India.
Mumbai Metropolitan Region Development Authority (MMRDA) is forging ahead with plans to establish six expansive growth centres across Bhiwandi, Alibaug, Kalyan, and Thane, aiming to lure investment by capitalizing on proximity to major infrastructure projects. The Kharbav centre, near Bhiwandi, is poised to become a magnet for investors due to its strategic location along the Virar-Alibaug multi-modal project, Mumbai-Ahmedabad high-speed rail, and dedicated freight corridors. Meanwhile, the Poynad centre in Alibaug gains appeal from its proximity to the Mumbai Trans Harbour Link, Virar-Alibaug multimodal corridor, and the upcoming second international airport in Navi Mumbai.
The Urban Planning Department in Chandigarh has raised concerns regarding the draft conversion policy for changing land use in industrial areas. They recommend assessing the demand for such conversions through an audit or survey. Concerns include incomplete conversions from industrial to commercial use and issues raised in the Chandigarh Master Plan regarding the compatibility of new land uses with old ones, urban design, infrastructure, and traffic bottlenecks. The department suggests implementing the MSME Act as an alternative, eliminating the need for a new conversion policy. Other challenges include addressing building violations and property misuse resulting from unauthorized conversions, possibly through one-time regularization.
Hotel rates in Paris during the 2024 Olympics have surged, with prices far exceeding typical summer rates. Travelers heading to the French capital should expect to pay approximately $685 per night for a three-star hotel, compared to the usual $178 for a typical July stay. Four-star hotels have seen prices rise to around $953 during the Olympics, up from the usual $266. Luxury five-star hotels have experienced relatively smaller price increases, with rates reaching approximately $1,607 per night. The city is anticipating over 11 million visitors during the Olympics, leading to high demand for accommodations and resulting in elevated prices.
In the first three quarters of 2023, Al Barari in Dubai witnessed an astonishing 400% increase in property investments and a 35% rise in residential prices, outperforming other prestigious districts. This affluent enclave, known for its luxurious villas and upscale apartments, attracts more billionaires per square foot than many other sought-after areas, mainly from Europe. While esteemed areas like Palm Jumeirah and Emirates Hills saw lower growth rates, Al Barari solidified its status as Dubai's most coveted location for super-luxury and eco-friendly living. European investors, particularly from the UK and the Netherlands, dominate the high-calibre buyers in Al Barari's super-luxury real estate market.
Florida's real estate market has experienced significant growth during the COVID-19 pandemic, making it the second-highest valued real estate market in the United States. With a market worth of $3.85 trillion, Florida has surpassed New York ($3.69 trillion) and Texas ($3.39 trillion). California maintains its top position with a market value of $10.18 trillion. Florida's rise in the rankings is attributed to its population growth, with 655,000 new residents relocating to the state since the beginning of the pandemic. Housing prices have also seen substantial increases in several Florida cities, driven by increased demand and competition for existing inventory. Factors like no personal income tax, abundant sunshine, and beautiful beaches contribute to Florida's appeal.
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