Daily Real Estate brief from PNT
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Phoenix Mills, a leading retail mall developer and operator in India, has acquired 11 acres of land in Thane from Huhtamaki's Indian arm for Rs 429 crores. The acquisition, facilitated by Phoenix Mills' subsidiary Sparkle Two Mall Developers, is part of a strategic move for the development of a commercial project with office spaces in the Majiwada locality. Phoenix Mills has reported a 36% increase in net profit and a 34% growth in income from operations in the fiscal year 2023-24. The company is actively expanding retail destinations across major Indian cities and has a growing commercial office portfolio.
? A residential flat spanning 1,056 square feet sold on the 25th floor in Marathon Monte South in Byculla for INR 3.74cr
? A residential flat spanning 601 square feet on the 20th floor sold in Pearl Residency in Dharavi for INR 92 lacs
Peninsula Land Limited reported a 112 percent YoY growth in PAT for H1FY24, attributing it to a 57 percent reduction in debt as of September '23. The company's focus on efficient project execution and debt reduction has led to consistent growth, with over 850 apartments delivered in the current fiscal year. Vice Chairman Rajeev Piramal expresses gratitude to stakeholders and envisions robust future growth with over 90 percent debt reduction and a proven track record of delivering multiple projects across cities. The company remains confident in meeting its current liabilities through operational cash flows and planned initiatives.
The Supreme Court has granted interim bail for three months to Rakesh Wadhawan, the promoter of Housing Development Infrastructure Ltd (HDIL), in the Rs 4,300-crore Punjab and Maharashtra Cooperative (PMC) Bank scam case, citing medical reasons. The court considered Wadhawan's health condition and specified that he would be allowed to stay at his residence under police custody at his own expense. The bench delegated the determination of the required police presence and related expenses to the state government. Wadhawan faces charges related to an alleged Rs 200-crore loan fraud from Yes Bank and is under investigation for an alleged Rs 4,300 crore loan fraud at PMC Bank.
A total of 370 construction projects in the state of Maharashtra have been served with show-cause notices and fined a cumulative sum of Rs 33 lakh for their failure to display MahaRERA (Maharashtra Real Estate Regulatory Authority) registration numbers and QR codes. The regulatory measure, implemented in August, mandates the prominent display of QR codes on advertisements to provide potential buyers with essential project information. This move reinforces the commitment to enforcing compliance, curbing misleading advertising practices, and enhancing transparency in the real estate market. A total sum of Rs 22 lakhs have been recovered through such penalties so far.
The Delhi High Court has invalidated a demolition notice issued by the Delhi Development Authority (DDA) targeting "unauthorized" constructions near the Mehrauli Archaeological Park. The court directed the DDA to restart the process, emphasizing the importance of granting a fair hearing to the affected parties before taking further action on alleged encroachments. The court highlighted procedural lapses, stating that no intimation was issued to the petitioners before the demolition notice, and quashed the notice issued in December 2022. The ruling underscores the need for administrative actions to adhere to statutory procedures and principles of natural justice.
Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has taken strict action against promoters of real estate projects, penalizing over a thousand projects for failing to submit Quarterly Progress Reports (QPR) as required. Among these projects, promoters of 732 have neglected to provide any target and completion date details, while 356 projects have not updated their progress targets on the UPRERA portal. The penalties imposed by UPRERA amount to Rs 2 lakh per project for the former and Rs 1 lakh per project for the latter. These penalized projects encompass various categories, including residential, commercial, and plotted developments, and are predominantly situated in regions like Gautam Budh Nagar, Ghaziabad, Lucknow, Meerut, Varanasi, and Agra.
In Greater Noida, a newly formed nine-member committee, led by additional CEO Saumya Srivastava, aims to address and resolve disputes between builders and buyers. This committee, established to expedite conflict resolution, will focus on issues such as the issuance of No Objection Certificates (NOCs), the formation of Apartment Owners Associations (AOAs), and the transfer of interest-free maintenance security (IFMS) funds. The panel comprises officials from various GNIDA departments, including legal representation, and includes two members nominated by the Confederation of Real Estate Developers' Associations of India (CREDAI) to represent builders. This initiative seeks to streamline conflict resolution and improve communication between stakeholders
The City and Industrial Development Corporation (CIDCO) has extended the deadline for payments under the Mass Housing Scheme 2018-19 to January 10, 2024. This extension provides relief to applicants who have been struggling to meet the initial payment deadlines for their housing tenements. CIDCO's decision aims to assist citizens in securing their dream homes, acknowledging the financial challenges faced by many. The extension applies to defaulting applicants who received allotment letters between 2019 and 2022, requiring them to pay the remaining instalments along with any delayed payment charges by the new deadline to avoid cancellation of allotments.
The Karnataka government is deliberating the development of the Knowledge, Healthcare, Innovation, and Research (KHIR) City near Bengaluru, seeking a substantial Rs 40,000 crore investment. Aimed at fostering healthcare, innovation, and knowledge sectors, the project envisions creating 80,000 jobs across 2,000 acres. Phased development within a 60-kilometer radius of Bengaluru signifies a transformative urban expansion. Shri M. B. Patil, Minister for Large and Medium Industries, highlighted the diverse gathering's potential to create a hub of excellence. The initiative engages key figures from the government, research centres, private enterprises, medical institutions, academia, and Karnataka's Strategic Investment Committee.
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The Knight Frank-NAREDCO Real Estate Sentiment Index for Q3 2023 reports a decrease in the Current Sentiment Score from 63 to 59, attributed to Middle East conflicts and regional tensions. Despite concerns about a global economic slowdown, the overall sentiment remains optimistic (above 50). The Future Sentiment Index slightly increased to 65, driven by optimism about India's ongoing economic growth. The residential market outlook is strong, with confidence in higher sales and pricing. The office market also shows optimism in leasing, supply, and rental rates. The Developer Future Sentiment score increased to 66, while non-developers achieved their highest score in six quarters at 64.
Star Housing Finance Limited (Star HFL) announced a significant Rs 60 crore capital injection, pending shareholder approval, to accelerate growth and expansion. The company reported a 110% year-on-year increase in Assets Under Management, reaching Rs 319.43 crore. This fiscal strength, marked by a 49% hike in disbursements during H1 FY24, underlines its robust performance. The funds, raised through convertible warrants, will enhance market presence, diversify loan portfolios, and invest in technology. The appointment of Chinnathambi Ilango as a non-executive independent director further strengthens Star HFL's governance.
The Municipal Corporation of Delhi (MCD) has issued new guidelines to address low property tax returns. In cases where tax arrears exceed Rs 25 lakh, punitive actions, including prosecution under the Delhi Municipal Corporation (DMC) Act, will be taken against defaulters. Despite previous measures, such as attaching bank accounts and properties, proving insufficient, the MCD will now initiate prosecution under sections 152A and 467 of the DMC Act for tax amounts exceeding Rs 25 lakh. Assessing officers are mandated to file complaints and commence prosecution proceedings against individuals who have wilfully defaulted on payment or attempted to evade tax.
Knight Frank India has been designated as a Knowledge Partner for the sale of land parcels owned by the Central Warehousing Corporation (CWC), part of the Government of India's initiative. These parcels, located in 54 prime locations across India, cover an estimated total land area of approximately 572 acres. The CWC is monetizing and modernizing its warehouses as part of the National Monetisation plan, involving public-private partnerships under the Design Build Finance Operate and Transfer model. With a concession period of 45 years, the CWC has partnered with Knight Frank India to guide the monetization process and contribute to the nation's vision of reducing logistics costs.
Over the past three decades, Mumbai's Bandra-Kurla Complex (BKC) has undergone a remarkable transformation from an empty marshland into one of the city's most coveted commercial districts. BKC has evolved into a thriving hub for offices, retail, food, entertainment, and luxury living. Notable brands like Apple, Louis Vuitton, Gucci, and others have established their presence in BKC, contributing to its status as a prime location. The area has become more than a business district, offering amenities like restaurants, bars, multiplexes, high-end residential projects, cultural centres, hospitals, schools, and five-star hotels. BKC stands as a symbol of Mumbai's dynamic urban progress.
The Mumbai Metropolitan Region Development Authority (MMRDA) is collaborating with expert consultants to extend the Versova-Virar Sea Link to Palghar, aiming to alleviate Mumbai's traffic issues. With the assistance of consultants, a detailed project report and peer review are in the works, ensuring the project meets industry standards. Once completed, the extended route will link Nariman Point to Palghar, reducing congestion, fostering tourism, and bolstering the economy. By 2026, it's anticipated to handle 60,000 vehicles daily, marking a significant step towards a more accessible and prosperous Mumbai.
The BMC (Brihanmumbai Municipal Corporation) in South Mumbai has terminated its contract with Roadway Solutions India Infra Ltd (RSIIL) due to the contractor's 10-month delay in starting road work. RSIIL now faces a penalty of Rs 52 crores. The decision came after complaints from local officials and politicians about the lack of progress and mismanagement of the road project. This move signifies the BMC's commitment to holding contractors accountable for delays and ensuring the timely completion of infrastructure projects in the region.
Turkey, facing the aftermath of a devastating earthquake, imposed a 25% cap on property rent increases, spurring tensions. Landlords, aiming to sidestep the cap, resorted to illegal means, resulting in 47,000 eviction cases and 100,000 instances of unauthorized rent hikes in the first half of 2023—double the figures from the same period in 2022. Turkey's housing market, ranked as the least affordable globally, has witnessed a surge in rental rates, up by an average of 121% in the past year, leading to violent conflicts and raising concerns about housing affordability and social stability.
In the third quarter of 2023, the Asia-Pacific commercial real estate market investment activity declined by 53.4% year-on-year due to high-interest rates, causing negative risk premiums in some markets. Canada attracted the largest share of outbound investments from the Asia-Pacific region for the first time, surpassing the United States. Canada secured 42% of APAC outbound investments, with the United Kingdom at 26% and Germany at 10%. This shift was accompanied by an eighteen fold increase in deal volumes from APAC to Canada, primarily driven by investments in data centres.
The prefabricated housing market is experiencing a rebound in the U.S. as Americans, priced out of traditional real estate options, turn to more affordable alternatives. Census Bureau data reveals a consistent increase in manufactured home shipments for five consecutive months until August. Elevated mortgage interest rates and soaring home prices have made traditional homeownership challenging for many, leading to increased interest in prefabricated homes. Despite past stigma, these factory-built homes offer cost advantages, with the average price of a prefabricated home, according to May data, at $129,900—about 40% more economical than new or existing site-built homes, even when factoring in land costs.
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