national realty

VOLUME 4 | ISSUE 2 | SEPTEMBER - NOVEMBER 2018

V o i c e o f R e s u r g e n t I n d i a

National Realty72ND INDEPENDENCE ISSUE

HOUSING FOR ALL BY 2022NOW MORE TRANSPARENT

Rs. 150

INDIAN REAL ESTATE MOVES CLOSER TO BEING FULLY TRANSPARENT – JLL SURVEY

INDIA: FASTEST GROWING RETAIL DESTINATIONS IN THE WORLD

AFFORDABLE HOUSINGA DREAM TO BECOME REALITY

National Realty September - November 2018 3

National Realty 2018VOLUME 4, ISSUE 2, SEPTEMBER-NOVEMBER

TALK TO US : WE WOULD LOVE TO HEAR FROM YOU ! SEND US YOUR COMMENTS ON AN ARTICLE, AN IDEA FOR A NEW ONE OR EVEN AN ARTICLE AND STORY THAT YOU WOULD LIKE TO SEE PUBLISHED IN NATIONAL REALTY. EMAIL US AT : [email protected] AND [email protected]

COVER STORY

09 72ND INDEPENDENCE ISSUE HOUSING FOR ALL

BEFORE 2022 AffordableHousinghasnowbecome

themantrafortheentirespectrumofhousingsectorwithbothprivateand publicdevelopersgoingforAffordable andHighEndprojects.

PRESIDENT’S FOREWORD05 Dr. Niranjan Hiranandani On21September2017,Itookoveras

thenewlyelectedNationalPresident,NAREDCO.

CHAIRMAN’S ADDRESS7 Indiawithitsgrowingpopulationwhere

urbanizationishappeningatarapidpaceprovidesboth,achallengeandanopportunity.WeadmiretheGovernmenttoseethiswithapositiveperspective.

AFFORDABLE HOUSING: BECOMING A REALITY12 ANAREDCOHaryanaPresentation

madeatUnionHousingandUrbanAffairsMinistry’s3rdanniversaryofPMAY(U),AMRUT,SmartCitiesMissiononJuly27,2018atLucknow.

INDIAN REAL ESTATE MOVES CLOSER TO BEING FULLY TRANSPARENT: JLL SURVEY43 Privateequityinvestments intorealty

sectorisoneofthebest indicators oftheconfidenceoftheinvestorcommunityandtheconfidenceiscloselylinkedwiththetransparencyofthepropertymarketsandimprovementintransparency.

INDIA: FASTEST GROWING RETAIL DESTINATIONS IN THE WORLD45 India’sretailsectorisgoingthroughafresh

periodofgrowthwhichisbackedbystrongeconomicfundamentals.Retailsupplyinthenextthreeyears(2018–2020)isexpectedtobeat19.4millionsquarefeet(msf).

JLL SPARK ANNOUNCES US$100 MILLION GLOBAL VENTURE FUND50 Willinvestincompaniesthataimto

transformtherealestateindustrythroughtechnology;anticipatessignificantopportunitiesinAsiaPacific

STATE ISSUE14 NAREDCO SOUTH (HYDERABAD)

NAREDCO INSTITUTE OF REAL ESTATE MANAGEMENT (NIRM)33 TheNIRMbecametheknowledge

hubfordevelopers,realtors,realestateagents,saleandmarketingmanagersandexecutives,managersandexecutivesinprojectplanningandmanagement,channelpartners,housingandfinanceexecutives,andmanagersandexecutivesincorporatecommunication.

15 NAREDCO SOUTH (ANDHRA PRADESH)

16 NAREDCO SOUTH (KARNATAKA)

18 NAREDCO WEST (MAHARASHTRA)

20 NAREDCO EAST (ODISHA)

26 NAREDCO CENTRAL (RAJASTHAN)

27 NAREDCO CENTRAL (TELANGANA)

29 News Round UP

HOW RERA IS REVOLUTIONIZING INDIAN REAL ESTATE48 ThearrivaloftheRealEstateRegulatory

Act(RERA)inMarch2016broughtinaparadigmshiftinthesectorandmetamorphoseditintoamoremature,systematicandregulatedone.

4 National Realty September - November 2018

Buzz

What began as NAREDCO’s Global Investment Summit on June 01, 2018 at The Oberoi, Gurugram to usher Public Private Peoples Partnership by Hon’ble Minister of Housing and Urban Affairs Shri Hardeep Singh Puri, has snow balled into the transformation of Real Estate Industry into a massive engine of economic growth.

71 years of independent India makes a clean break with the past by moving into fast track of realizing Prime Minister’s Narenrda Modi’s Mission of providing Housing For All well before the target date of 2022 to kick start the Indian economy on the foundation of Housing and Real Estate Sector.

The changing Real Estate investment landscape on the count of regulatory reforms lite RERA & GST have restored people’s trust in developers and the marketing regiam the effective rates of tax ranging from 10% to 15% has now been pegged at 18%, with an abatement of one third being provided towards land value,thereby producing the effective tax rate to 12%of the entire value agreement under GST. However the location of property will decide the benefits of GST with the developers wanting to passé the benefits to anuser in order to increase boost marketing, its benefits outway the previous tax structure.

Similarly the opening up the affordable housing market due to rapid urbanization will bridge the gap between housing deficit and the supply of housing units across the country. The last but not the least is massive infrastructure thrust, to increase connectivity and rise of skilled force and trained realty for the great economic take-off.

The concept of ‘Affordable Housing For All’, not only provides four walls, but also all facilities like transport, employment, schooling and most importantly, means of living. Additionally, we need to take care that such housing is not in isolated pockets but within the integrated cities.

Col. (Veteran) Prithvi Nath Editor-in-Chief

TALK TO US! because we love to talk about you ! Send us your comments on an article, an idea for a new one or the story which you like to publish; email us at : [email protected] / [email protected]

Find Us Online!What’s happening with Naredco National Realty

EDITORIAL BOARD

Printer, Publisher & Editor-in-Chief Col. (Veteran) Prithvi Nath, VSM on behalf of NAREDCO

Deputy Editor Sushil Massey Sionee

Advertising & Circulation Yogesh Kumar & Asad MubinEmail [email protected]/ [email protected] No.: DELENG17455/29/1/2009-TCPublished from National Real Estate Development CouncilFirst Floor, 8 Community Center, East of Kailash, New Delhi110065 Tel: 011-26225795, 41608570, Fax: 26225796

Printer Naveen Printers, F-11/B, Okhla Phase- 1, New Delhi 110020

NAREDCO (North)Haryana officeNAREDCO Haryana 76G, 3rd Floor, Sector -18, Behind HIPA Building, Gurugram-122015, Haryana Tel: +9124-4055124

NAREDCO (South)Andhra Pradesh officeNAREDCO Andhra Pradesh Plot No. 723/A, Road No. 37, Near Srinidhi International School, Jubilee Hills, Hyderabad - 500033Tel: +9140-23541447Karnataka officeNAREDCO Karnataka, 2nd Floor, Old No. 1097 New No. 58, 18th B Main, 5th Block, Rajaji Nagar, Bengaluru – 560010, KarnatakaTelengana officeNAREDCO Telengana Plot No. 43-A, Journalist Colony, Road 76, Jubilee Hills, Hyderabad – 500033, Tel: +91 40-65572184

NAREDCO (Central)Jaipur officeNAREDCO Rajasthan 307, Pink Towers, Opp. Nehru Garden, Tonk Road, Jaipur- 302015, Tel: +91 141- 2741375, 510865

NAREDCO (West)Mumbai officeNAREDCO West Foundation, C/o Shah & Shah AssociatesC-Block, Wankhede Stadium, Near Sachin Tendulkar Stand, D-Road, Churchgate, Mumbai – 400020

NAREDCO (East)Odisha officeNAREDCO Odisha Plot No. 84, Satyabadi Enclave, Gayatri Vihar, Chadrasekharpur, Bhubaneshwar-751024 , Tel: +91 674- 2740103

EXECUTIVE COMMITTEE CHAIRMAN Shri Rajiv Talwar, CEO DLF Ltd.

VICE CHAIRMAN Shri Parveen Jain, CMD Tulip Infratech

PRESIDENT Shri Niranjan Hiranandani, CMD Hiranandani Group of Companies.

PRESIDENT ELECT Shri R Chalapathi Rao

VICE PRESIDENT NORTH Shri Anil Suri, CMD Suri Group & Shri. Gaurav Jain, CEO, Samyak Properties & Infrastructure

VICE PRESIDENT SOUTH Shri P Prem Kumar

VICE PRESIDENT CENTRAL Shri Ashok Patni

VICE PRESIDENT WEST Shri Rajan N Bandelkar, Director, Unnathi Estate (Raunak Group)

MEMBER FINANCE Shri Rajesh Arora, Managing Director, Arora & Associates Infradevelopers Pvt. Ltd.

APPOINTED MEMBER Brig. (Retd.) R. R. Singh, Director General, National Real Estate Development Council (NAREDCO)Exciting offer-SAVE Rs. 600/- on annual subscription (6 copies)

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DR. NIRANJANHIRANANDANIOn 21 September 2017, I took over as the newly elected National President, NAREDCO. For real estate, these are the most challenging of times - the best and the worst of times, the Government at all levels has launched a program in real estate reforms - RERA, GST and Bankruptcy, as also moves to kick start a Housing Revolution based on the Public Private Partnership (PPP) model.

Esteemed Readers,

Greetings from NAREDCO!

NAREDCO in its untiring efforts to serve the real estate sector through representations, meetings, events, media interactions, etc., on sector-specific issues and challenges, has been pro-actively involved with and has also positioned itself to partner with the Government of India, with the aim to infuse transparency and build trustworthiness with respect to all stakeholders of housing and real estate.

At a recently concluded Summit organized by the Haryana Chapter of NAREDCO in Gurugram, Hon’ble Minister of State for Housing and Urban Affairs, GoI, Shri Hardeep Singh Puri, who also is the Chief Patron of NAREDCO National, echoed the role of NAREDCO in promoting ethical business practices and the determination of the members to support the Government in achieving the Mission of Housing for All by 2022, set by the Hon’ble Prime Minister. Various recent reforms announced by the Government and the continued willingness to engage with industry stakeholders in order to eliminate unscrupulous business models has been the priority of this Government, to which NAREDCO has responded positively.

The rate at which urbanization is happening in the country, the urban population is expected to reach 800 million in next 30 to 35 years and would be equal in size to the rural population according to a recent survey. Therefore, it becomes imperative for the Housing Industry to accentuate and rise to the occasion in order to match the demand. Most of this demand shall be in the Affordable Housing segment and the middle income group. With forward and backward linkages, real estate


PRESIDENT’SFOREWORD

shall create more employment opportunities than any other sector, during this period. We are fortunate that the present Government has set high standards of execution of its policies and plans by bringing unprecedented reforms for real estate sector and also by promoting ease of doing business. With the Government’s introduction of RERA, positive approach in home buying is evident. Real Estate sector has evolved into a consumer friendly industry, in terms of transparency from the builders’ side to getting home loans from financial institutions. NAREDCO has been advocating for extending Industry Status to the entire real estate sector whether residential, commercial or retail, which shall provide much needed impetus and fillip for the existing slowdown that exists.

India has earned itself the status of the fastest developing country and the fact remains that it is rich in resources. In case the GDP keeps growing the way it is presently, by 2050 we can achieve the stature of being the 2nd or 3rd most powerful economy, globally.

Indigenization of various products under the Make in India policy of the Government has helped manufacturing and employment receive a boost. During all these positive developments, the role of real estate shall be significant; therefore, real estate sector is expected to remain the sector to receive maximum attention of the Government and to be considered as the foremost driver of Indian economy.

I wish the readers of this edition of National Realty, a very happy reading.

Dr. NIRANJAN HIRANANDANI President


CHAIRMAN’SADDRESS

My Dear Reader,

Greetings to One and All !

It gives me immense honour to once again write to you from the platform of National Realty, the official magazine of NAREDCO. Real estate sector, once believed to be the most promising investment that was known to mankind has experienced jolts over the past few years. Correction in prices resultant of administrative and taxation reforms by the Government that got implemented almost one after the other, affecting a rippling effect of slowdown, though, a much needed cleaning up exercise from those involved in unscrupulous activities was required, simultaneously, promising a brighter future for the reasonable players and other stake holders in the real estate habitat. Initial phase post introduction of the reforms looks feeble for business but in the longer run these reforms shall form the backbone of a robust economy.

India with its growing population where urbanization is happening at a rapid pace provides both, a challenge and an opportunity. We admire the Government to see this with a positive perspective. We are indeed fortunate that the present Government is forward looking, vigilant, having a foresight and possess the acumen to put in place the right policies for its unprecedented agenda for various sectors including real estate. Bread and butter for real estate developers is their desire and propensity for making houses. With refinement in the recent reforms, a conducive environment shall be created which would make it obvious for developers to construct, especially in Affordable Housing segment. Members of NAREDCO have resolved to exercise fair and best practices, follow transparency, promote skill upliftment and labour welfare, thereby putting their best effort to participate earnestly to Hon’ble Prime Minister’s vision of Housing for All by 2022.

Real Estate in India is not confined to India alone, rather the market has expanded globally as the NRI population has grown to a massive 30.8 million, according to a survey. In order to attract NRI investments, the returns should be lucrative and even the investors should be confident of the security of their investment as also about the end usage. Real estate sector is moving towards a positive direction with a strong support provided by various policies of the Government which have been able to install investor confidence.

Owing to the success of implementation of Government policies, real estate sector shall become more professionalized and structured. This shall help the sector to attract human resources and create employment. Introduction of smarter technologies and skill training shall bring the timelines down to a great extent, thereby, wastage shall reduce and costs can be controlled. I personally foresee a bright future for Real Estate in India, where emphasis on infrastructure development is tremendous, Smart Cities are in planning, Government vision is to provide Housing for All, etc. I wish all stakeholders in real estate success in their ventures and remain truthful towards their profession and job role.

Jai Hind !

Rajeev Talwar Chairman

Real estate sector is moving towards a positive direction with a strong support provided by various policies of the Government which have been able to install investor confidence


VICE CHAIRMAN’SADDRESS

Real estate sector is moving towards a positive direction with a strong support provided by various policies of the Government which have been able to install investor confidence

Dear All,

Warm Greetings, NAREDCO gets filled with pride and glory while reminiscing the achievements and the successful sustainable work done in consonance with the government for the growth and development of the Real Estate sector, Infrastructure, Construction Industry, Related Sectors & Industries, Economy of the Nation, and the Nation as a whole.

It gives me immense pleasure to outline some of the major impacts and happenings recently by the steps taken in the past few years by the Government after NAREDCO brought forth the various issues faced by the Real Estate sector.

The first and the foremost impact is of RERA after around sixteen months of its implementation and this impact is turning out to be quite positive. RERA has boosted faith in Real estate as it has addressed the concurrent problems and issues diligently faced by the buyers and various stakeholders. The major issue of problems being faced by the buyers on account of delay in projects for no fault of theirs has been taken into consideration and regulations have been laid to avoid delay in projects. RERA is buyers friendly and now buyers can not be taken for a ride on an unaccounted delay in projects. This has boosted the confidence of the buyers in Real estate and the sales are gradually picking up across the sector.

The positive impact of RERA reflects that now the Real Estate sector is getting more organized, structured, streamlined and running on the right track with increased transparency. RERA has laid down the things in the right perspective to regain the confidence and trust of the buyers in the Real estate and it has rekindled and inculcated the interest of the buyers for buying and investments in the Real estate.

The impact of Insolvency Act is also quite positive. Changes in Insolvency and Bankruptcy code (IBC) recommends that now the status assigned to home-buyers shall be of financial creditors which shall give them due representation in the Committee of Creditors (CoC) making them an integral part of the decision making process. Now the home-buyers being classified as financial creditors shall enable them for equitable participation in the insolvency resolution process. This shall provide great relief for those home-buyers who are facing hardships because of much delayed and incomplete Real estate projects as some Realty firms are facing insolvency proceedings.

NAREDCO (Haryana Chapter) held its 2nd convention ‘Global Investment Summit-2018’ on 1st June this year in Gurugram in which the Chief Guest was the Hon’ble Union Minister of Housing and Urban Affairs Shri hardeep Singh Puri and which was attended by all the top honchos from Real estate sector, related industries and the government sector to discuss the various investment opportunities in the Real estate sector on a global scale and other related issues. It was a grand success.

NAREDCO is organizing a national convention (Banking Conclave) in September 2018 to discuss various aspects of banking like investments, loans, finances etc in the Real estate sector and how to improve it. In this all the top stakeholders from banking institutions, Real estate sector, Government shall be invited to present their views and discuss the various issues.

Over all speaking whatever issues and challenges are being faced, are being addressed diligently and continued efforts are being made cohesively to solve them in the Real Estate sector. Let’s do our best in our respective fields for ‘The Rise of Global India’.

With Best Wishes & Regards,

Parveen Jain Vice-Chairman


NATIONALISSUE

Were 71 years of independence a mere continuation of British Raj to enrich the coffers of England? Not really, as New India had begun a reform process after a long freedom struggle. Yet corrupt practices had crept in the

Real Estate Sector, that continued till 2014.

Seventy Paisa, out of every Rupee of Gross Domestic Product (GDP), comes from the Housing and Construction Sector. As part of the then government policy, Urban land became a state monopoly on the introduction URBAN LAND CEILING REGULATION ACT (ULCRA) which led to unauthorized colonies across the countries with mushroom growth of fly- by- night practioners operating in a climate of distrust.

72nd years of Independence ushers a new era of development bringing corruption to an end with a clarion call by Prime Minister Narendra Modi for provide provision of “Housing for all by 2022”. National Real Estate Development Council (NAREDCO), under the aegis of Ministry of Housing and Urban Affairs, led by the dynamic union minister, Shri Hardeep Singh Puri, has undertaken the onerous task of achieving the target of providing a roof over the head of every Indian by 2019 through Affordable Housing.

Evidently this task could not be completed without a complete reform process-Regulation of Real Estate Act that implied a regulatory mechanism in all states and important metros across the country. The current scenario in housing has chairman RERA like HARERA in Haryana, MARERA in maharastra ans so on. White sweeping reforms have been introduced with home buyers regaining trust in the housing sector and ethical practices becoming the norm.

Affordable Housing has now become the mantra for the entire spectrum of housing sector with both private and public developers going for Affordable and High End projects.

What is affordable housing in India?According to the Ministry of Housing and Urban Poverty Alleviation, affordable housing is defined on the basis of property size, its price, and the buyer’s income. For instance, for the economically weaker section (EWS), an affordable house must measure between 300 and 500 sq. ft. and be priced below Rs 5 lakh, incurring no more than Rs. 4,000-5,000 as monthly EMIs. The income ratio in this case should be of 2:3. These numbers change for lower income group (LIG) and the mid-income groups (MIG).

The central bank’s definition, on the other hand, is based on the loans given by banks to people for building homes or buying apartments. It recently tweaked the incentivised affordable housing loan limits from Rs 28 lakh to Rs 35 lakh in metros and from Rs 20 lakh to Rs 25 lakh in non-metros, provided the overall cost of the home doesn’t exceed Rs 45 lakh and Rs 30 lakh respectively. This move was aimed to give a fillip to low-cost housing for the EWS and LIG groups.

Thus, the definition changes according to the context. Some builders even use the term ‘affordable luxury’, whose validity is again very context and location-based.

How much of the upcoming supply qualifies?As per ANAROCK data, as many as 22,120 new units were launched in the affordable category (< Rs 40 lakh) in Q2 2018 across the top 7 cities. Affordable housing units comprised a massive 46% of the total new supply in the same quarter. If we break these numbers down further, then nearly 6,530 units were launched in the price bracket < Rs 20 lakh, and the remaining between Rs 20 lakh to Rs 40 lakh.

The supply in the affordable housing segment (< Rs 40 lakh) saw an increase of 100% in Q2 2018 as against the previous quarter. In fact, the overall supply in Q2 2018 was dominated by the affordable segment, with

COVER STORY

72ND INDEPENDENCE ISSUE –HOUSING FOR ALL BEFORE 2022TEAM NR

‘After Roti and Kapda it is now Affordable “Housing for All” for 1.35 billion Indians’

– Editor-in-Chief


NATIONALISSUE

nearly 46% supply in this category which eventually boosted the overall supply growth.

However, around 2,37,000 units in the affordable segment (units priced less than Rs 40 lakh) were unsold as of Q2 2018 across the top 7 cities. This number pertains only to the unsold units of organized private developers, and does not include Government housing schemes. If those are included, the figures would go further northwards.

Here is a paradox. While there are ample options in the affordable category which can easily bridge the demand-supply gap, the numbers speak otherwise. Yes, more potential buyers are now eligible for bank loans - but due to rising NPAs (particularly in the real estate sector) banks are being extremely cautious in lending to both builders and buyers.

Affordable luxuryThe terms ‘premium affordable’ or ‘affordable luxury’ are coined by developers to leverage the ‘affordable’ buzzword in the Indian real estate sector. Such projects may boil down to normal mid-range housing with some extra amenities thrown in. A parallel that could be drawn is the air ticket category ‘premium economy’, which offers some extras but isn’t quite business or first class.

In a limited number of such projects, there is genuine added value for a slightly higher price. Others may be normal mid-range projects with a fancy name. However, by no stretch of imagination can one claim that the supply of ‘affordable luxury’ housing is in any way geared to help meet the Government’s ‘Housing for All by 2022’ target.

‘Honey, I shrunk the flat!’Let’s face it - only compact housing is really affordable.

Affordability in any category actually depends on the location, the builder’s brand value and property specifications, but size is obviously the primary criterion. Most metros are seeing the emergence of the ‘small is beautiful’ trend. Compact homes have become the new mantra for affordability in pricey cities and locations.

If we consider that even the lower-income groups need to be able to live in our cities, this makes sense - and this

supply can in many cases be aligned to the affordable housing category targeted by the Government.

In fact, the average size of properties is shrinking in most cities to suit the ‘affordable budget’ of most buyers. If we consider the yearly trends, average unit sizes in Bengaluru shrunk from 1,478 sq. ft. in 2017 to nearly 1,334 sq. ft. in 2018. Other cities followed suit with overall sizes of properties seeing a downward trend over the last three years. In fact, of we plot the ‘honey I shrunk the flat’ syndrome from 2013 onwards, it emerges that apartment sizes have reduced by anything between 15-27% in the top seven cities.

Again - a home for every Indian by 2022?Obviously, the Government’s spate of policy reforms and schemes over the last few quarters has resulted in an increased new supply and also demand for affordable housing. However, ‘housing for all’ does not necessarily mean ‘every Indian family owns a home’ - we are in any case nowhere near to such a target. This concept must evidently also include rental housing which those who cannot afford to buy can avail comfortably within their means.

If we look at it that way, we may be a lot closer to the Government’s target than it seems. If RERA spreads its wings as intended and has the expected nation-wide impact, a lot of inventory will hit the market over the next 2-3 years. Attracting end-users aside, the next necessary


step would be to entice investors who can buy and rent out this inventory back onto the market.

Boosting rental housingThis is quite a challenge, considering that the Indian real estate market currently favours end-users - and that too largely only for ready-to-move options - but is rather unattractive for investors. What is required is that the GST rates for affordable housing be significantly reduced, or that affordable housing is exempted from GST altogether. GST has resulted in reduced buyers’ interest in new launches and under-construction projects.

With minimal customer advances, the liquidity crunch has stalled construction of several projects. Despite having all the approvals in place and the developers will to complete these projects, lack of funds is acting as the main barrier.

Besides reduction of GST rates, the Government must intervene to allow bank funding to developers for land purchase. Allowing banks and HFCs to fund land purchase will help developers bring down

their costs significantly, which in turn can be passed on to the buyers. In the absence of a bank finance, developers resort to PE funding and other non-formal modes of funding to finance its land purchase which increases the cost of capital for them drastically.

Investors have historically sought to leverage the lower price points of under-construction properties and tend to focus on emerging growth areas - which are also affordable rental locations. On project completion, serious investors will put their holdings on the rental market until the desired price appreciation is achieved and selling the properties makes sense. Since it will take at least 3-4 more years for serious price appreciation in viable emerging areas to manifest, we would have a sizeable rental market.

Boosting rental housing demand and absorption can go a long way in meeting the ‘Housing for All by 2022’ target that the Government should consider seriously. Perhaps then, we could celebrate our independence day in 2022 with this dream fully realized. Hope spring eternal, as does human endeavour* source ANAROCK.


NATIONALISSUE

AFFORDABLE HOUSING

TEAM NR

A NAREDCO Haryana Presentation made at Union Housing and Urban Affairs Ministry’s 3rd anniversary of PMAY (U), AMRUT, Smart Cities Mission on July 27, 2018 at Lucknow.

19 MnCurrent Shortage of Urban Housing Units

48 MnUrban Housing

Units needed by 2022

96% of the this housing shortage is in the following Income Group:

Income Group

Income Unit Size (Carpet)

EWS INR 0 - 0.3 Mn / Annum

300 sq.ft.

Low INR 0.3- 0.6 Mn / Annum

300-600 sq.ft.

c. INR 1 - 3 MnHouses in the Range in Maximum Demand

< INR 3 MnRange with Least Supply

Affordable Housing is the only solution to meet this Demand & Fill the growing Gap

Current Unsold Inventory (AggregateforDelhi,Mumbai,Pune&Gurgaon)

21 Mn sq. ft.

73 Mn sq. ft.

INR < 3 Mn

INR – 7 Mn

INR > 7 Mn

Only 8% inventory across these 4 cities is available for units under INR 3 Mn

Growing Urban Housing Shortage in the Country

Substantial Demand for Affordable Housing

Across States

Big opportunity in the vision of Housing for all by 2022

1 crore annual population growth2 crore existing housing deficit70 per cent of new housing need until 2022 would be affordable housing30 per cent housing need concentrated in just 3 states1.7-2.0 lakh hectare land required to meet housing needUSD2 trillion investment required to meet housing need

Urban housing need by 2022>50 lakh 20-30 lakh

30-50 lakh 10-20 lakh

<10 lakh

BECOMING A REALITY


Pradhan Mantri Awas Yojana (PMAY)Housing for All by 2022

Some Measures Adopted by the Government to Promote

Affordable Housing Key Pointers

Affordable housing is an enabler to meet the vision of ‘Housing for all by 2022’

Flagship Program of the Indian Government to Develop & Wipe out Housing Deficit

Key Components of the Policy:

In-situ Slum Redevelopment

Extra FSI/FAR and TDR if required

GoI grant of INR 0.1 Mn / House

Credit Linked Subsidy

Upfront subsidy @ 6.5% for EWS and LIG for loans upto

INR 0.6 Mn

Partnership

Central Assistance of INR 0.15 Mn per

EWS house

Subsidy for Beneficiary

Central Assistance of INR 0.15 Mn per

beneficiary

Development of Model State Housing Policy

Every State in the Country will be adopting the Model State Housing Policy provided by the Central GovernmentHaryana, UP, Maharashtra,

Karnataka have already implemented their versions with rest of the states to follow

Interest Subsidy

Interest Subsidies for Home Loans Home Loans available in the

range of 3 - 6% p.a. at various income groupsHouseholds with incomes

upto INR 1.8 Mn per annum to receive a subsidy under the scheme

RBI Initiative: Higher Value of Loan

Reduced risk weights for housing loansRelaxed LTV requirements for

loans catering to affordable housingLoans up to 90% of LTV of

housing units available for end user

Tax Benefits for Developers

100% income tax exemptions for development of affordable housing projectsLower GST Rate of c. 8% for

affordable housing

Infrastructure Status given to affordable housing

Greater access to capital at lower interest ratesIndustry recognition will be

a big boost to affordable housing companies and will streamline the sector

Haryana Affordable Housing Policy v/s Prevailing Normal Housing Policy

Well defined and structured Policies help in capturing the inherent demand & ensuring timely completion making it an attractive value proposition for both the developer as well as the end-consumer

Unit Size Average unit size of c.1700 square foot on a saleable area basis (Carpet area + Loading)

Average unit size of c. 500 square foot on a carpet area basis

Sales Price Market governed selling price in the range of INR 5,000 – 15,000 per sft

INR 4,000 per sft on a Carpet Area basis (c. INR 2,800 per sft on a Saleable area basis)

Average Apartment Capital Value

Typically upwards of INR 7 Mn INR 1.3 Mn – INR 2.6 Mn

Other Charges • EDC & IDC Charges of c. 400 per sft • Parking + Club memberships are also applicable

• No IDC Charge• EDC Charge of c. INR 100 per sft

Payment Plan Governed by Market Dynamics Time Linked

Affordable housing in Gurgaon getting developed in the same micro markets as Normal Housing

Increased FAR & Density allows for small units sizes to be constructed in Urban Areas

More participation from private players will enhance the pace of investment & development

Certain suggestions to improve the viability of Haryana Affordable

Housing Projects – to attract higher private sector participation

1. Density for affordable housing in each sector to be enhanced from 15 acres to 30 acres or 25% of the Net planned area of the sector whichever is higher

Presently, luxury real estate projects have higher density than affordable housing projects

2. Single window clearance for affordable housing projects

Presently approval process is same for affordable housing and luxury projects

3. Time linked change in land use (CLU) process

Deemed approval from the government authority in case the approval is not granted within 60 days from the date of application

4. Building plans to achieve automatic approval in case of compliance with regulations

Certification from government approved Engineers to suffice compliance

5. Banks to fund acquisition of land for affordable housing

6

Largest Affordable Housing Players

More participation from private players will enhance the pace of investment & development

Developer ProjectsLaunched

First Project Launched Time Financial Partners

Tata Value Homes 14 Jan-08 8 Years +

Signature Global 10 Aug-14 4 Years

Provident by Purvankara 9 Feb-09 8 Years

Ashiana 6 2012 5 Year+

Jovville byShapoorji Pallonji 1 Jan-2016 1 Year +

VBHC 10 Jul-08 8 Years +

Largest Affordable Housing Players


NAREDCOSOUTH

NAREDCO HYDERABAD

Hyderabad’s residential demand has witnessed a significant increase due to rising employment opportunities and positive market outlook, which were just marginally affected by policy changes including DeMo, RERA and GST.

ANAROCK Property Consultants’ report ‘Hyderabad: The Bright Spot in Indian Real Estate’ analyzes the city’s major real estate trends and highlights that the city has emerged as one of the most sought-after residential destinations in the country. The city is experiencing a phenomenal spurt in residential real estate activity with appreciating capital values and increase in retail and office space absorption from 2014 to 2018. Policy support from local government to strengthen the socio-economic indicators has largely attracted investments post-2014.• Absorption in Hyderabad

increased by 21% in 2017 as against the previous year due to positive market sentiments coupled with growing IT work force mainly in the western zone. The absorption in Q1 2018 is at par with the new supply being pumped into the market.

THE BRIGHT SPOT IN INDIAN REAL ESTATEANUJ PURI, CHAIRMAN – ANAROCK PROPERTY CONSULTANTS

Hyderabad Unsold Inventory (Approx. Units)Q2 2016 35,560

Q2 2017 31,250

Q2 2018 27,600

9,0008,0007,0006,0005,0004,0003,0002,0001,000

–

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

– Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2015 2016 2017 2018

Supply Absorption Unsold Inventory

Supply-Absorption Trends

• The unsold inventory in the city has been declining gradually since 2017. In fact, the city scores far better than many other metros in terms of unsold stock pile-up situation.

• Approximately 74,000 units have been launched in Hyderabad in the last 5 years, of which nearly 71% (~52,000 units) came in the west zone.

The total unsold stock in Hyderabad in Q2 2016 stood at 35,560 units, which reduced by nearly 14% in the corresponding quarter in 2017. The unsold stock further reduced by 13% in Q2 2018 as against the same period in 2017. In a span of 2 years, the total unsold stock in Hyderabad reduced by nearly 29%.


NAREDCO ANDHRA PRADESH

DEVELOPMENT OF AMARAVATI

Amaravati, the People’s capital of Andhra Pradesh, is envisioned to be a city of world-class standards with a vision of increasing Andhra Pradesh’s prominence in the world. The Capital Region Development Authority (CRDA) is leaving no stone unturned to provide cutting-edge infrastructure, comfortable livelihood and immense prosperity for the People of Amaravati. The Land Pooling scheme adopted by Amaravati is the largest and the most successful of its kind in India, and is a manifestation of the people’s desire for a world-class capital.

Once developed, Amravati, which is looking at Rs 50,000 crore of investment only for basic infrastructure, will be one of the top five cities of the world.

“Farmers have voluntarily offered 32,637.48 acre of the targeted 38,581.15 acres for the new capital. The work is in full swing,” The PPP model, with funding primarily from private investors, will potentially turn a trip of more than an hour into a 5-min ride between Amaravati & Vijayawada.

A consortium of companies are working to develop Amravati, the new capital city of Andhra Pradesh, an official note, prepared in September, on India-Singapore relations. Drawing inspiration from Swachh Bharat, the state government has drawn an

innovative initiative to give a facelift to hygiene and cleanliness in villages.

A stated mission of making AP a model state and the government aims to achieve a developed state status by 2029.

Amaravati’s anticipated 3.5 million inhabitants would enjoy efficient public transport including a monorail and metro network, while trees would shroud half the city with a green zone akin to New York’s Central Park. Amaravati was envisioned as a metropolis free of the chaos, traffic and air pollution. “It’ll be an Indian city like no other”.

A small portion of Rs 2,000 crore in the entire project requirement of Rs 48,115 crore of Phase-I have been mobilised through bonds to support the financial requirement of Rs 10,000 crore within this financial year.”

The MoUs are the Concession and Development Agreement (CADA) and the Shareholder Agreement (SHA). SHA was signed by the Amaravati Development Corporation (ADC) and Singapore Amaravati Investment Holdings Ltd. (SAIH) and the CADA by the AP-Capital Region Development Authority, Amaravati Development Partners (ADC and Ascendas-Singbridge & Sembcorp Industries) and SAIH.

The Singapore government was not only helping in constructing the capital city but also in mobilising investments, adopting best practices in governance, skills and tourism development etc. as per the request made by the Andhra Pradesh government. The interim transitional government complex at Velagapudi was built to accommodate 500 employees in a record 192 days with Rs 512 crore investments.


NAREDCOSOUTH

GLOBAL SMART BUILDING SUMMITMANOJ LODHA, PRESIDENT

NAREDCO Karnataka was started under the Society’s Act 1960, Bengaluru Karnataka in 2014.

Currently many reputed real estate firms are enrolled with us. NAREDCO Karnataka is grown very faster in the spam of three years.

NAREDCO Founding member Mr Sriram Chitturi, Managing Director of Shanders Group, Current Office bearers team headed by Ms Shakuntala Iyer as Chairperson, Mr Manoj M of Yesh Developers as President, Mr C Chandrashekar, Vice President, Mr Sunil Gupta, Joint Secretary, Mr B N Niranjan Babu, Secretary and Mr Hemanthkumar, Treasurer are very active and taking NAREDCO

KARNATAKA towards next level.

NAREDCO Karnataka have organised educative events like RERA/ GST awareness programs, Conference, Events, Exhibitions.

NAREDCO Karnataka has conducted one RERA conference at KSBA, Bengaluru, Mr Kapil Mohan, IAS, RERA Principle Secretary was the chief guest.

NAREDCO Karnataka conducted events and conferences like Benami property Act awareness program, one day Workshop on GST Act, conference on Global Smart Building summit held at Hotel the Lalit Ashok, Bengaluru, supported as Industry Partner, one day event 9th Realty

NAREDCO KARNATAKA


Plus Conclave held at Bengaluru, one day conference on Global Real estate brand Awards in association with Exhibition Asia as Knowledge Partner.

NAREDCO Karnataka have also started city unit in Mysuru in the year 2016 and Mr N Divyesh, is the current Convener for Mysuru city unit. The Team has lots of active members in Mysuru and NAREDCO

Mysuru city is growing fast.

Having potential for 6 smart cities and 4 more District HQs with goof real estate potential, it is our vision to start chapters in at least 10 places other than Bengaluru.

We are also building stronger eco system with partnerships like govt organization, policy makers, change makers and beurcocracy.


NAREDCOWEST

NAREDCO MAHARASHTRA

REAL ESTATE INFRASTRUCTURE AND INVESTORS’ SUMMIT (REIIS 2018)

DEFINING THE WAY FORWARD FOR INDIAN REALTY INDUSTRYIndia as a nation is developing at a steady pace which makes it one of the fastest growing countries in the world across all aspects. Amongst all of the developments, real estate is one of the key sec-tors that has constantly evolved to cater to the ever-enhancing lifestyle across generations. With the real estate sector growing sky-high and the term housing evolving into quality housing, regulatory body like National Real Estate Development Council comes into picture with a motive to benefit all stakeholders of the industry.

Currently in its 4th edition, The Real Estate Infrastructure and In-vestors’ Summit 2018 by NARED-CO and APREA witnessed es-teemed presence of movers and shakers from the sphere of Indian Real Estate. Over the years, it has evolved into a coveted knowl-edge sharing platform where key industry players of real estate, banking and finance come to-gether to exchange expertise and insights which in turn helps in defining the way forward, derive international interests leading to investments, and understanding the ever-changing market.

This year’s focus of the summit

was to showcase various opportu-nities in Indian real estate & Infra-structure sector, on-going policies, emerging land of opportunities with the new ecosystem for the domestic & foreign investors alongside other developments in the real estate sector. India an emerging market has seen prodigious growth in terms of Foreign Direct Investment in the Real Estate and Infrastructure sector. The event witnessed partic-ipation from various International Institutions like Edelweiss, Piramal Capital, Housing Finance ltd, SBI, Nisus Finance Services Co. Ltd., DLF, Brookfield and Lodha.

With the presence of eminent personalities like Shri Anupam Mishra, Honorable Secretary, Ministry of Housing & Urban Affairs, Government of India, Ms. Amruta Fadnavis, Hon’ble Wife of Chief

Minister of Maharashtra, and Shri Hardeep Singh Puri, Hon’ble Minister of State (I/C) Housing and Urban Affairs. Other dignitaries present from the industry were Mr. Rashesh Shah, Chairman & CEO, Edelweiss Group, Amit Goenka, MD and CEO, Nisus Finance Services Co. Ltd, Ram Yadav, CEO, Edelweiss Real Estate Advisory Practice, Vipul Roongta, MD and CEO, HDFC Capital Advisors Ltd, Mr. Peter Verwer, CEO, Asia Pacific Real Estate Association and Dr. Niranjan Hiranandani, National President NAREDCO & Co-Founder and Managing Director, Hiranandani Group.

The industry veteran shared expert insights on key issues and concerns like affordable housing and its ad-vantages, NBFCs, HFCs, AIFs and alternate avenues of financing in In-dian Real Estate, market sentiments and how India is an opportune for investment in realty sector. The experts also shed light on a next big trend, student housing, senior living and a booming retail market for international brands in India.

‘’The NAREDCO/APREA summit introduced many international investors to the tremendous op-portunities offered by India’s real estate markets. ‘’It’s clear that


India is moving closer to the centre of investment radar screens. The announcement of the Blackstone/Embassy REIT filing was a major topic of conversation at the summit and has alerted global investors to the positive ongoing modernisation of India’s real estate marketplace.’’ Said Mr Peter Verwer, CEO, APREA.

With regards to the industry, NAREDCO (National Real Estate Development Council) signed a Memorandum of Understanding (MoU) with Ministry of Housing & Urban Affairs (MoHUA), Government of India, on 27thSeptember 2018 at Mumbai, Maharashtra to strengthen the skill trainings and employment opportunities in the construction sector for the urban poor under Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM).Dr. Niranjan Hiranandani, National President, NAREDCO commented on this wherein he stated that “The main objective of this MoU is to provide employment to the urban poor waiting to enter construction sector. Secondly, to up-skill the semi-skilled construction workers working on construction to a skilled category. NAREDCO will ensure the implementation of this initiative through training providers empanelled with Construction Sector Skilled Council (CSDCI)”.

Along with it, KPMG, one of the big four surveyors, presented an extensive research report along with NAREDCO and APREA which highlighted the growth aspects of Indian Real Estate. The report highlighted key facts & figures which forecasted a growth of Indian Real Estate sector.

• Real Estate sector is estimated to grow to USD650 billion by 2025 and surpass USD850 billion by 2028 which will be driven by emerging asset classes such as affordable housing and

co-working spaces• USD4 billion has been invested

by institutional investors in 2018 so far; average deal size crossed USD150 million mark, the highest in the last five years

• Institutional financing is becom-ing a prominent financing medi-um, particularly focusing on the commercial sector which attracts over 60 per cent of investments

A key highlight of the summit was the “change of guard’ wherein Neel Raheja (Group President and Director, K Raheja Corp Private Limited) handed over the baton to the newly elected President, NAREDO West Mr. Rajan Bandelkar (Director, Raunak Group)amid great pomp and grandeur. On the occa-

sion of being honoured, Mr Rajan Bandelkar said “I look forward to ensure that NAREDCO continues to be the leading institution of Indian Real Estate industry which develops and maintain standard-ized module that encourages efficiency and fair practice in the real estate sector, valued and accepted by all stakeholders. My focal emphasis will be on encouraging in training, develop-ment and providing an increas-ing number of skilled workers to the industry. I look forward to develop a respectable status and pride for Real Estate Developers community by introducing and encouraging the Fair Practices, NAREDCO Code of Ethics & RERA Compliances.”


NAREDCOSOUTH

NAREDCO ODISHA

AFFORDABLE HOUSING –A DREAM TO BECOME REALITYDR. PATANJALI TRIPATHY

INDIAN SCENARIO

AFFORDABLE HOUSING deserves priority attention of Policy Makers, and Planners keeping in view its enormity and magnitude. One study reveals that one fifth of the World’s Population lives in Slum. Repaid industrialisation and urbanisation brings in mass exodus of rural people to Urban areas in search of employment and livelihood opportunity. In absence of scientific, inclusive and visionary Urban Planning, the housing shortage scenario, coupled with the need for safe drinking water, sanitation, health and education gets aggravated contributing to pitiable living conditions of people in Urban areas including the metros.

Proactive initiatives have been taken at the Government level, Central as well as States to mitigate the housing problems. Enactment of the Real Estate (Regulation and Development) Act, 2016 is a historic legislation as this Act of the Parliament of India seeks to protect home-buyers as well as help boost investments in the real estate

industry. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal. The prestine objective of establishment of RERA is promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector. Many States in the Union of India have already passed Legislation in the respective States and established Real estate Regulatory Authority. State Housing Boards, Development Authorities, Regional Improvement Trusts have

been established with a view to formulating Long Term Shelter /housing development Plans and Projects. The Private Builders and Real Estate Developers have achieved significant strides in providing housing to people. But their contributions is confined to the metro, Semi Metro and few Urban areas addressing mostly to the housing needs of HIG / MIG category.

People belonging to Economically Weaker Section (EWS) and Lower Income Group (LIG) and Lower Middle Income Group (LMIG) have made significant contribution in the growth of any Urban Centre. But they are still vulnerable as far as housing is concerned. Investment for purchase of land and construction of houses by a Low or Middle Income House Hold is perhaps the single largest expenditure. They make investment of their entire life time saving for realising their dream of having their “Home Sweet Home”. With the unabated increase in cost of land and cost of construction, the miseries of LIG and EWS households gets multiplied. Their dream for a house of their own still remain miles away from reality.


clubbed as follow:

Category Loan Eligibility

EWS Rs. 3.00 lakh to Rs. 5.00 lakh

LIG Rs. 5.01 lakh to Rs. 8.00 lakh

LMIG Rs. 8.01 lakh to Rs. 10.00 lakh

MIG Rs. 10.00 lakh to Rs. 15.00 lakh

CHALLENGES

For successful implementation of Affordable Housing Scheme, it is imperative to address three challenges: (i) availability of land at concessional rates (ii) adoption of technology drastic reduction of the cost of construction and (iii) minimum profit margin.

I) Availability of land Availability of land is a major constraint. Rising cost of land, litigation and involvement of multiple middle-men and the Benchmark price fixed by the Government need to

Therefore, “Affordable Housing” deserves to get the Priority attention of Policy makers and Urban administration.

AFFORDABLE HOUSING RE-DEFINEDA comparative study of the cost of house vis-à-vis gross income of household presents a startling picture. In developed countries, housing cost normally does not exceed 30 % of a house hold’s gross income. In India, however, an average household spend around 40% to 50% of their gross income for construction / Purchase of a house. Besides, with scanty income and rising cost of construction of house they are over –burdened with debt services and trapped in the vicious circle. Over and above the cost of construction, there is stamp duty, holding tax, cost for approval of building Plan etc. The incidence of all these factors including the processing fees for housing loan, other hidden cost fall on the household. Besides, the borrowing capacity coupled with loan repaying capacity of a person constitute an important factor of Affordable Housing. As per the definition out lined by the Deepak

Parekh Committee, the monthly Income of EWS/LIG house hold ranges between Rs. 8000/- to Rs. 14,000/-. However, on the basis of the definition advanced by the Reserve Bank of India ( based in 2008 prices) which have been adopted by the Ministry of Housing and Urban Poverty Alleviation, Government of India , the monthly Income of EWS is confined to Rs. 5000/-, of LIG is between Rs. 5001/- to Rs. 10,000/-.

The Ministry of Housing and Urban Poverty Alleviation has declared Interest subsidy @ 5% under the Interest Subsidy Scheme for Housing the Urban Poor. Under this Scheme, the maximum loan amount is likely to be raised an additional limit of Rs. 1.00 lakh to Rs.5.00 lakh. The capability of making upfront payment toward borrower’s contribution is an important factor. In both EWS and LIG category of house hold, the maximum capacity is likely to be within 20% of total loan eligibility or purchase price of house. Linking the Interest Subsidy for Housing Urban Poor (ISHUP), the ceiling on loan eligibility and unit cost of house which is the essence Affordable Housing may be

Naredco Odisha organised a Seminar Regarding RERA & GST with PWC at Mayfair Convention, Bhubaneswar.50 developers attend with Planing Member of Bhubaneswar Development Authority and several Town planer of Development Authority attend the seminar.


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be addressed. The only viable alternative is identification of land in the outskirt of cities. Of course, it would have an implication on cost of development of infrastructure like, road, provision for drinking water, sanitation sewerage and drainage, power supply etc.

II)Adoption of Technology Adoption of technology for reduction of cost of construction can play a vital role in implementation of Affordable Housing. Optimum use of building materials, establishment of prefabricated roof, columns manufacturing centres and manufacture of these materials adopting economics of scales will lead to substantial reduction of cost of construction.

It is quite relevant to mention here that Private Builders and Developers are the now acquiring land at a concessional price and adopting new technology for low –cost housing after the Government have announced incentive for Affordable Housing. To commensurate with the initiative of the Government, the Reserve Bank of India has also announced cheaper loan to the developers and buyers specifically under this Affordable Housing segment. There is unlimited demand for houses under this segment. There is a large market for such homes. Yet there is supply constraints. The Ministry of Housing and Urban Poverty Alleviation, estimates an acute shortage of 16.36 million homes in India out of which around 96% is under Economically Weaker Section and LIG segment . The challenge for the Builders and Developers is to find land at a concessional price and make the project economically viable.

In most cases, such lands are available only at places away from cities. And these places do not have transport facilities, sanitation, supply of drinking water and sewerage. For development of these infrastructure, there is also a cost implication. Adoption of technology to manufacture building materials at project sites by scales and to speed up construction is still a constraint faced by leading Real Estate Developers..

The leading Real Estate Houses like Tata Housing, ATS Infrastructure, Bharatiya Group have taken initiatives to addressee to these challenges with a view to capitalising the huge market potentiality and bridge the demands supply mismatch. The Tata Housing has adopted a long term strategy to construct affordable Housing in a large scale in Bangaluru. It has even set up a pre-cast plant in Bengaluru where pre-cast roof, beams, columns are manufactured and assembled on site to get a complete housing unit reducing cost of construction . The time saved has a direct bearing on reduction of cost of the house. The Bharatiya Group is coming up with a massive affordable housing scheme of 10,000 low cost houses over an area of 50 acres near Chennai. It has an ambitious plan to provide 1 million house in other cities across country. The ATS Infrastructure, a Noida- based Real Estate Developer, has built 400 apartments with sale price @ Rs. 10.00 lakh in Bulandshahr in Uttar Pradesh. Strategies is volume game-low cost, low margin and high volume. It is coming up with similar projects in Muradabad and Kanpur. The Anantaraj Industries has built 23000 houses with one room, toilet and kitchen in the Industrial area in Rajstan with

a price stag @ Rs. 8.9 lakh per house. The single most critical factor in low cost house is prompt approval of the plan and project by the Development Regulators and Banks.

MINIMUM PROFIT MARGINKeeping minimum profit margin is quite a sensitive issue. The Development Authorities, State Housing Boards and private Developers do take up CSR (Corporate Social Responsibility) Activities. The Affordable Housing for EWS LIG and LMIG has a huge demand. There is glarring mismatch between demand and market supply in this segment. The volume of business in this segment has the potentiality to generate profit to the desired extent.

PRO-ACTIVE INITIATIVES OF THE RBIThe Reserve Bank of India has recently announced a series of


measures that encourage Banks to prioritise investment under Affordable Housing Sector.. It has broaden the scope of affordable housing in as much as both the small value loans and home loans to individuals up to Rs. 50.00 lakh (for houses of value upto Rs. 65.00 lakh in metros and loans up to Rs. 40.00 lakh ( home value of Rs.50.00 lakh) in other centres will be considered under affordable housing . Extending these loans will entitle the Banks to float infrastructures bonds upto seven years. Money raised under these bonds will not be subject to Reserve Requirements such as Cash Reserve Ratio (CCR) and Statutory Liquidity Reserve (SLR). Eligible bonds will also get exemption in calculation of priority Sector lending targets. These measures will definitely make home loan portfolio more attractive. These measures are sequels to the vision and Road map set by

the Hon’ble Finance Minister in his Budget allowing banks to float long term bond for lending to infrastructures.

The RBI reiterated that apart from what is technically defined as infrastructure, affordable housing is another segment of the economy which both requires long -term funding and is of critical importance. It has taken initiatives to ease the way for banks to raise long-term resources to finance their long-term loans to infrastructure as well as affordable housing . This will help promote both growth and stability, as well as improve the supply side.

These initiative and exemptions will mitigate the Asset-Liability Management (ALM) problems faced by banks in extending project loans to infrastructure and core industries sectors. “A collateral benefit in shape of

bond is expected to boost the development of the domestic corporate bond market and address to resources constraints.

BRIDGING THE GAPIt is imperative that all the stake holders need to address the issues of affordable housing and to formulate Action Plan to bridge the gap persisting in the demand and supply of affordable housing. The stake holders include the Government of India. State Governments, Bankers, Development Authorities, Corporate houses including Real Estate Developers and housing Cooperatives.

A ROLE OF GOVERNMENT OF INDIAIn the past couple of years, there has been renewed thrust on affordable housing. The Government of India has formulated and adopted the National Urban Housing and Habitat Policy, 2007 with a view to providing fiscal incentives and developing innovative financial instruments like mortgage used as securities, to augment flow of finance to the housing market and reform in Rent Control Act. It also seeks to assist the poor and EWS category of people to have access to subsidized housing on rental and ownership basis. It also envisages for setting up of a National Shelter Fund for providing subsidies to EWS and LIG housing. This Policy also aims at housing for Urban poor and has also the benefit of cost subsidisation and higher tax exemption/ concessions. The Jawarlala Nehru National Urban Renewal Mission (Jn NURM), provides for a scheme namely Basic Services for Urban Poor (BSUP). Now Jn NURM Cities are covered by Integrated


Housing and Slum Development Programme (IHSDP). The Rajiv Awas Yojna (RAY) envisages for sum-free cities. Under the Interest Subsidies Scheme for Housing the Urban Poor (ISHUP), the EWS get access to concessional housing loans. The Affordable Housing Scheme gets Income Tax Relate under Section 81/A. of the Act. The Union Budget for 2012-13 also provided for exemption from service tax in respect of mass housing upto an area of 60 Sq. mt. per unit. Besides formulation of policies, it is imperative that Government of India need to ensure effective coordination, monitoring and funding for effective implementation of these schemes within a timeline

ROLE OF THE STATE GOVERNMENTSSince housing is a State subject, state need to take a proactive role in addressing housing shortage and providing infrastructure for affordable housing. Many State Governments have adopted appropriate policy support including the Real Estate Regulation Authority to promote affordable housing like single-window clearances of housing projects, reservation, allocation and alienation of land for exclusive affordable housing, liberalization of Development and Regulation Act for EWS and LIG housing, additional FAR/ FSI exemption and concession in stamp duty etc.

The Government of Odisha has taken initiative by creating an enabling environment with appropriate policy support for implementation of affordable housing for EWS and LIG . Households keeping in line with

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various on-going schemes of the Government of India. The Scheme for Affordable Urban Housing in Odisha, 2012 was formulated in 2012 with an objective (i) to address shortage of EWS, LIG, LMIG and MIG housing in a time bound manner, (ii) prescribe unit cost and size of EWS and LIG housing (iii) to promote affordable housing through multiple cost reduction measures and (iv) to provide linkages with slum redevelopment and rehabilitation programmes. The scheme envisages four model (a) earmarking 60% of total built up area for EWS, LIG MIG housing developed by Odisha State Housing Board on Government land (b) Voluntary development on private land with reservation of 65% of built up area for EWS /LIG category and additional FAR for HIG and Commercial purpose (c) Private Developer on Government land with reservation of 50% of built up area for EWS /LIG and (d) Voluntary social housing Scheme with 50% of built up area for EWS /LIG category and over all price cap of Rs. 15.00 lakh. With a view to making the scheme more effective in delivering its objective the Government of Odisha has revised the provisioning of the scheme by virtue of a Notification published in Gazette dated 26th September, 2013.

ROLE OF REAL ESTATE DEVELOPERSThe Corporate Houses, and Real Estate Developers command a greater role in mitigating the plight of EWS,LIG and LMIG households for a dream house within their range of affordability. Like Tata Housing, ATS Infrastructures, Bhartiya Group and Anantaram Industries other developers should come forward in an aggressive way to capitalise the vast opportunity in this segment of affordable housing. High demand vis-a vis low supply syndrome, economic scale operation and

high volume the command the strengths and opportunity of this segment. The Real Estate Developers need to take the call and strive hard with appropriate marketing strategy to usher in a new era of affordable housing. They should harness the potentiality in all ‘B’ and ‘C’ category of cities and Urban Centres in providing affordable housing for EWS and LIG households. This would pave the path for sustainable solution to the problem of affordable housing.

ROLE OF BANKSThe Commercial Banks including Private Sectors Banks and housing financing institutions can play a vital role in addressing the issue of affordable housing . The initiatives of the Reserve Bank of India as declared recently would definitely help the Commercial Banks to give a renewed thrust on sanction of loan under affordable housing in an aggressive way. The


Bankers are now preparing for a pick up in home loans in the light of the increase in tax breaks from Rs. 1.5 lakhs to Rs. 2 lakhs. The infrastructure status to affordable housing projects would make it easier for developers to get finance. Banks also prefer home loans because housing are less risking as the lending is diversified and also provide them an opportunity to cross-sell other services to borrowers. The measures make home loans more attractive. The Interest Subsidy for Housing Urban Poor (ISHUP) will definitely help in leveraging loans for affordable housing to the individual buyers as well as developers. This would also boost the loan port-folio to a substantial extent.

ROLE OF HOUSING COOPERATIVESThe Housing Cooperatives comprising of the NCHFI, 25 State Apex Cooperative Housing

Societies and 35000 Primary Housing Cooperative Societies. Constitute the third biggest networks next to credit and milk Cooperatives having their presence in subdivisions and taluks. Housing Cooperative are friendly towards members belonging to EWS and LIG category and strive hard to mitigate their plight for a dream house. They command a niche market as they are committed to the concern of LIG & EWS category of members. About 75% of the houses constructed with the financial assistance of Apex Cooperative Housing Federations, are meant for EWS and LIG category households. In the states like Tamil Nadu, Meghalaya and Maharashtra the ratio of houses constructed for EWS/LIG category is 89%, 73% and 63% respectively. The housing cooperatives need to take up the challenge of Affordable Housing as this Sector commands a niche market and accomplish the

objectives. Housing cooperatives are not profit maximisation institutions. They have a commitment and concern for the basic housing needs for the poor, the EWS/LIG households. With its vast networks, infrastructure and resource base, housing Cooperative can present a meaningful solution to the problems of affordable housing. An Action Plan need to be formulated for a sustainable mode for affordable housing in every city. The NCHFIs and leading ACHFs may take the leadership in formulation of Action Plan, acquisition of land, mobilization of resources and implementation of programme. This would not only boost the credibility of housing Cooperative but also brings smiles of happiness in the millions of needy families belonging to EWS/LIG categories. The housing Cooperative must take the call.

CONCLUSIONIndia is the land of unity amidst diversity. Innovation is the hallmark of its Plans and Programmes formulated for bringing about socio-economic development. As housing is one of the basic needs, convergence of all stake-holders in mobilization of resources, implementation of Plan and programmes for affordable housing would go a long way in accomplishment of the objective- “Housing For All”. Let us strive to achieve the goal by synergy and by sincere endeavours and of all the stake–holders. The goal is achievable and must be achieved at any cost.

The author is presently serving as the Dy Registrar, Cooperative Societies (Credit) in the Directorate of Registrar, Cooperative Societies , Odisha. He worked as the Managing Director, Odisha Cooperative Housing Corporation.


NAREDCOCENTRAL

NAREDCO RAJASTHAN

CAPACITY DEVELOPMENT PROGRAMA two days workshop between 30-31 Aug-2018 on "Capacity Development Program on Cost Construction Practices including Emerging Technology For Housing" organiso by RAJREDCO in association of BMTPC is being organised at Hotel Indana Palace, Jodhpur in the gracious presence of Shri Durgesh Bissa, Commissioner Shri Arun Purohit, Secretary, Jodhpur Development Authority, Shri J S Monga, Jt. Sec, UDH, Shri Ashok Patni, VC, RAJREDCO, Anil Poonia, Dy. Comm. And Sukhram Chaudhary, CE.JDA. More than 100 delegates including CE/SE/XEN/AEN/JEN, Town Planners etc. Most successful event done by RAJREDCO.


NAREDCOSOUTH

NAREDCO TELANGANA

AP, TELANGANA AT THE HELMAP, Telangana ‘Top the Ease of Doing Business in Real Estate’ rankings, observes P Prem Kumar, president NAREDCO Telangana, delving into the key initiatives taken.

India’s southern state of AP has emerged as the leader followed by Telangana in the ease of doing business in the real estate sector rankings. In a joint ranking prepared by the World Bank and the central government’s Department of Industrial Policy and Promotion (DIPP), the two states have maintained their top ranking for the last two consecutive years making them most viable for investors to put in their money.

The third edition of the annual ranking of all states and UTs under the Business Reform Action Plan (BRAP) conducted by the industry department and the World Bank showed Telangana and Haryana in second and third spots, while Meghalaya stood last at 36th position.

The ranking is based on 372 action points or reforms

implement the full 100% of reforms. However, 17 states have scored above 90%.

Telangana government is focusing on strategic development initiatives to accelerate economic growth. Increased infrastructure investment, creation of high-skilled jobs and high levels of FDI are all characteristics that define Hyderabad. The city is one of the leading information technology hubs and houses over 1,400 companies including a few global leaders. The government’s Innovation Policy aims to build on positive response to T-Hub

to put the state on the global innovation map. New IT

parks on PPP basis, SMEs and start-ups,

gaming, animation, data analytics, data centres, Internet of Things and cyber security are some of the focus areas.

About 13% of state’s GSDP is contributed by

the real estate and construction

sector together. Development of

Pharma City will create opportunities for mid

to affordable segment housing development. Recent

undertaken to ease regulation and systems in construction permit, labour regulation, environmental registration, access to information, land availability, and single window system. It is aimed at triggering competition among states to attract investments and improve business climate.

According to the DIPP, the implementation of reforms would ease the business environment helps attract both domestic and foreign investors. This year, only two states – Jharkhand and Telengana – have been able to


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implementation of key policies like TS iPass, Shelter Fee, Impact Fee, e-STAMPS, 2BHK scheme, affordable housing, Data Centre Policy have helped in creating ease of doing business and given a major boost to real estate sector in the state.

On the other hand AP government is attracting a lot of FDI with huge investments in food processing from companies like Mondelēz International Inc., Pepsi, ITC and several MSMEs. Tirupati is now the hub for electronics and manufacturing. All investments are tracked real time and followed up efficiently. The state government is building infrastructure grids to make manufacturing and business easy. The infrastructure includes world-class ports, airport infrastructure, quality and reliable 24X7 power, abundance of land, 2 industrial corridors and road and rail connectivity, informed the state CM Chandra Babu Naidu during his recent visit to Singapore.

According to G Tirupati Rao, from NAREDCO AP says “The AP government is promoting IT and manufacturing sectors and this will no doubt boost real estate as well. AP’s ‘Designated Technology Park aka DTP Policy 2017-2020’ in Amravati, a first of its kind initiative in the country with incentives and rental guarantee to developers for providing office spaces to IT companies will solve the office space crunch besides boosting the state’s economy.” “The state’s IT policy has also enabled Vizag to emerge as a huge market for IT and ITES segments, thereby triggering the demand

for office and residential space. Reduction in the Non-Agriculture Land Act (NALA) tax from 9 percent to 3 percent besides simplification of conversion of land procedure has given a boost to realty and other sectors” adds P Nagesh from NAREDCO AP.

One of the key parameters of a country’s economic health can be assessed by its progress in real estate sector. In India, it

is the second-largest direct employment generator after agriculture. It also has a multiplier effect over 250 ancillary sectors. Assessing appropriately this tremendous potential of real estate sector the two states of AP and Telangana are harnessing their efforts to uphold the buoyancy of their economies.

(WithinputsfromNewsportalsandnewspapers)

Here’s the combined scorecard of the top five states in reform evidence and feedback:

Rank StateScore (in%)

1 Andhra Pradesh 98.42

2 Telangana 98.33

3 Haryana 98.07

4 Jharkhand 97.99

5 Gujarat 97.96


NEWS ROUND UPREAL ESTATE RIDES ON INDIAN ECONOMY

After a prolonged slowdown, the Indian real estate market is now showing signs of revival. This revival can be credited to the furtherance in the Economy of

the nation with the Sensex hitting an all-time high of 37,496.80 points. The Public-Private People's Partnership and Incentives from both supply and demand side have been a major element in the restoration of the realty sector. This includes, according infrastructural status to affordable housing, reduction in developer’s cost of borrowing for affordable projects and 100 percent deduction of tax on profits. From the point of view of buyers, the government has provided interest subsidy on loans for certain income brackets, interest rate rebate, a lower GST at 8 percent and a dedicated affordable housing fund under priority sector lending, providing ease of credit to home buyers. It has become easier to avail loans in the affordable segment according to its decisions.

With the projection of India becoming the world's third largest economy by 2030, the impetus for growth is high in the housing segment across tier 1 and 2 cities and major metros. The market is witnessing various changes, and developers and investors are also shifting their focus to various avenues including affordable housing. Many luxury developers like Sobha, Prestige, Mahindra Lifespaces, Piramal, and Group Satellites have also entered this space. The momentum of

growth in the real estate sector is expected to grow in the next few years with a substantial increase in investments.

Affordable housing over the last few years has become a very popular term in the market. Property dealers, developers, and consultants say that the market is now being completely driven by consumers. The affordable housing segment has become an important spoke in the wheel of the realty sector. In 2017, affordable homes accounted for almost half of the demand in the residential segment. The government’s push for the project has enabled more attention of the developers towards it.

The Ministry of Housing and Urban Affairs hasinvited innovative ideas from across the globe, in a bid to achieve its ‘Housing for All' target. The Global Housing Construction Technology Challenge is a sub-mission under the PMAY-U, to introduce innovative technologies for mass housing projects that are cheaper, faster and of better quality, with sustainable green materials. The four parameters for the challenge are time, cost, quality, and sustainability. Such projects are a reflection of how affordable homes are becoming the driver of Indian Realty. Gurugram alone, one of the largest real estate markets in the country, is expected to see a significant boost in the affordable housing sector as 74 new license approvals are pending with the Department of Town and Country Planning. These projects intend to construct around three lakh units on 380 acres of land in Gurugram. Based on the earlier cap, DTCP has issued affordable housing licenses over 300 acres, on which around 46,000 units are at different stages of completion. No wonder that the Hon’ble Minister of Housing and Urban Affair, Shri Hardeep Singh Puri, awarded Rupees 6.40 crores to Haryana for rejuvenation and urban transformation during UP Powering New India Summit in July 2018.

Developers believe that there is a demand for affordable housing and an increase in supply will attract buyers, reviving the real estate sector. The restoration of trust in real estate market after the long slowdown is an augury of the economic turnaround as the nation becomes a Global investment hub. Coupled with the massive infrastructural push creating commercial corridors across the country that will transform rural India to an urban destination for the entire world.


NEWS ROUND UPECONOMIC REFORMS AND AFTER

The Real Estate (Regulation and Development) Act came into effect on 1 July 2017 and since then it has been working strongly on a pan-India basis

to increase transparency and accountability in the system.As a simple cycle, RERA gets implemented under a strong and strict RERA authority, developers start playing by the rule and spirit and start falling in line, consumers start believing the promises made on the product, start feeling genuinely protected and start coming back to the market. Our research reinforces the industry belief of this act being a game-changer in realty plagued with the mistrust of the past few years. For instance, HRERA Gurugram has ordered a builder to return a homebuyer's money within 45 days. The decision was taken when a grievant sought redressal from the Gurugram bench where he was made to pay for a project which never existed and nothing related to the project was ever sought approval of. The bench with Dr. KK Khandelwal as the Chairman ordered the builder to return complete money along with interest within a period of 45 days orface criminal charges.In another case, HARERA ordered a builder to pay back the money of a homebuyerwho had booked a residential apartment. This decision was taken following the builder’s failure to deliver the apartment on time and then asking the homebuyer to buy a costlier apartment elsewhere. The decision was taken by a three-member body, headed by Mr. KK Khandelwal. A subsequent inquiry into the matter revealed that the builder had no permissions or approvals for the construction of the project. Thus, the matter will further be investigated and a report will be submitted on the basis of it.

Few states have seriously started implementing the clauses and spirit of RERA. Maharashtra is head and shoulders above others in the discipline and diligence of RERA implementation. The next 3-4 states have tried to take a leaf out of Maharashtra’s book and are catching up. Predicting from the other states following in the footsteps of Maharashtra RERA, Bengaluru

and Ahmedabad should see the revival of business soon. Leaving these few, it is sad to note that other states are still trying to get their act together. Mumbai and Pune now contribute to 51% of all sales of new homes across India, this number was around 39-40% till a year ago (Source- Financial Express). The beauty of the residential real estate product is that there is a genuine demand for homes to live in, and especially in a developing country like India where each year tens of millions of people are moving from lower to middle class. A sincere implementation of the act will result in the return of the best years of the Indian real estate sector.

21ST CENTURY- THE AGE OF HOUSING

The recent findings in Rakhigarhi, an ancient Harappan site located in Hisar, Haryana indicate that a highly evolved civilisation practicing town-planning,

sanitation, and brick-making existed in 5500-1900 BC, which was linked with Mohenjo-Daro, currently in Sindh, Pakistan covering an area of 2 million sq km.

Not just in the case of Indian Civilizations, the Earth has been allocated into subdivisions of geological time. It is used by geologists, palaeontologists, and other Earth scientists to describe the timing and relationships of events that have occurred during Earth's history. In one such path-breaking discovery, scientists have announced in July 2018 a new classification of Earth's age. It has been named the Meghalayan Age and it is said to have begun 4,200 years ago. The Meghalayan Agein fact, is the age that humans are currently living in. This last chapter is marked by specific chemical signatures in stalagmites and the strongest such feature was found in Mawmluh cave in Meghalaya, India and thus this newly discovered age is named after Meghalayan state itself. It is a major finding as it places India, not only on the world map but also in history of time.

This dating coincides with the Aryan concept


of time divided into four ages- Satyug-Gold, Treta-Silver, Dwapar-Brass, and Kalyug-Iron, with the universal pendulum completing one circle and swinging back to brass (Dwapar). This age denotes human alleviation to the ultimate species on Guru Purnima on 25th July 2018.

The above geographical and historical factors link planned housing to the Powering New India Summit at Lucknow, UP on 28th July 2018 presided over Hon’ble Prime Minister Narendra Modi referring to the present as Housing for All by2022, while Mr. Hardeep Singh Puri, Hon’ble Union Minister for Housing and Urban Affairs resolved to reach the target by 2019.

Chandigarh, the capital city, is shared by states of Punjab and Haryana. After the formation of Telangana and incorporation of the capital city Hyderabad in the state, Andhra Pradesh has gone for another capital city in Amravati. Though Haryana has a capital in Chandigarh, Gurugram is the face of the state earning 70% of

its revenue. The formation of another city larger than Chandigarh but smaller than Gurugram has galvanised the real estate sector.

The Haryana Government’s new project of a millennium city adjoining Gurugram under the Manesar Development Plan 2040 is proposed to be spread over 50,000 acres, which is larger than the area of Haryana’s capital, Chandigarh (11,400 acres). It is planned to be located south of NCR of Delhi with Gurugram-Manesar urban area on the north and Aravalli hills on the northeast, the National Highway 48 will define the western boundary of this new city.

The eastern and southern boundaries of the city are surrounded with agricultural areas,which will the boost the rural areas, as they will also be connected with the newly growing urban spaces.

The proposed city will be well connected to neighbouring urban centres via national and state highways, the Kundli-Manesar-Palwal (KMP)

After Chandigarh- Another Amravati


NEWS ROUND UP

Expressway and other major districts roads.The Haryana State Industrial and Infrastructure Development Corporation Ltd will finalise consultants for the new city soon, and later decide its name and other modalities, including land pooling etc. The consultants are also expected to suggest the road network plan, metro rail plan, required rail and road linkages and public transportation for the proposed city and assess the proposed social, economic and physical infrastructure.The new city, is being developed with the objective of making it a location which is socially inclusive, financially feasible, ecologically responsive, culturally stimulating, and economically relevant. The new city will help in further strengthening of the Gurugram-Manesar circuit, and will be well planned and developed in terms of a public-private partnership model.

Speaking to media, on 30th June 2018, Narhari Banger, additional managing director of Haryana State Industrial and Infrastructure Development Corporation assured that it is going to be a world-class city having all kinds of facilities from education to health. Narhari said that government will not acquire even a single inch of land for this

particular region and added that this city will be built upon PPP mode.

Rajesh Khullar, Principal Secretary to Chief Minister, said that the population of Gurugram has increased by almost 50 per cent and by 2021 there will be 100 per cent increase over the 2001 level. The increased population has put pressure on existing resources and infrastructure that can’t be stretched beyond a limit. The new city will be an alternative that will ease pressure on the millennium city by being its equal cousin.

Though many doubts are being raised around the project, ranging from environmental concerns like water depletion, vegetation loss etc. to planning and traffic congestion, the project shows a positive path towards speedygrowth and an expansionist vision.

Industry sources indicate the development of the new city will be on lines of Silicone Valley which will preserve the environment and create a city different from other crowded IT centres.

Source: The Tribune, 30 June 2018


NAREDCO INSTITUTE OF REAL ESTATE MANAGEMENT (NIRM)Takes offThe NAREDCO Haryana Institute of Real Estate Management (NIRM) was established in the year 2009, under the aegis of civil administrators- that being the Deputy Commissioner, HUDA Administrator, Police Commissioner, and the Municipal Commissioner. It was formed with the aim of licensing real estate agents as well as the marketing arm of developers. Over 500 individuals have been certifies under the NIRM program and approximately 1,400 are those who have received the licenses from the government.

In addition, the course was totally revised as per the latest industry norms, which included elements like, RERA, GST in real estate, legal framework, digital marketing solutions, taxation in real estate, Gurugram Arbitration Council, and RERA as also financial compliances.Candidates came from all over the country to get trained by the experts. All the sessions were based on practical knowledge where the doubts of the candidates were resolved as well. The NIRM became the knowledge hub for developers, realtors, real estate agents, sale and marketing managers and executives, managers and executives in project planning and management, channel partners, housing and finance executives, and managers and executives in corporate communication. It is for anybody and everybody interested in taking up real estate as a profession.

Shri K K Khandelwal, Chairman HRERA, personally interacted with the all the candidates and imparted knowledge regarding RERA in

detail. He emphasized the discretion of the authorityand explained details from the HARERA Act. He dealt effectively with the registration of projects under HARERA, especially under Sections 2, 3, and 4 of the Act. He also gave clarity upon the issues of complainants in relation to promoter related projects. He emphasized that the developer, regardless of being registered under RERA or not, will still come under the ambit of the act. He also said that one of the prime aims of the act is to protect the interests of

homebuyers and increase transparency and accountability in the housing sector. He urged that the houses being sold should comply with the norms of authorized building plans and should not deviate from the same, and lastly, all should register under the act. He concluded with an exhortation to all to register and comply as it is a new act which seeks clarifications that he would be happy to provide to all developers, real estate agents, and homebuyers.

Mr. K K Khadelwal, Chairman, HRERA Gurugram and Col. (Veteran) Prithvi Nath, VSM Patron and Director General, NAREDCO Haryana is closely working together for HRERA.

NAREDCOISSUE


NAREDCOHARYANA

The 2nd Convention of the Global Investment Summit created a pool of knowledge that prepared a roadmap

for Indian Realty. Important amongst these were ideas, suggestions, and outlooks on topics revolving around ethics, transparency, reforms like RERA, investments, and methodology for achieving the Prime Minister’s dream of ‘Housing of All’. This process was initiated by NAREDCO Haryana and was a natural corollary to enlarge the scope of investments and development from a state level to a global platform, in accordance with the rapid strides made by Haryana to become a global hub, with Gurugram racing to be the 1st Global City. This is in tandem with NAREDCO Haryana Brand Compass “10-year plan” launched by the Council on October 10, 2010, which will soon be completed on 10/10/2020.

The Summit began with a grand ceremonial welcome of, Mr. Hardeep Singh Puri, Hon’ble Union Minister for Housing and Urban Affairs, who entered the Grand Ball of The Oberoi, Gurugram to a spectacular applause. It was followed by the singing of the National Anthem by 23 boys and girls of the iconic St. PBN Public School of Gurugram.

Patron and Director General Col. Prithvi Nath, in his welcome address, recounted the role of statesman Shri Hardeep Singh Puri in giving a boost to Public Private Peoples Partnership in kick-starting economic reforms in the sector of real estate. This

meant that the stage had been for Global Investments in the entire nation-state on the foundation of real estate. Shri Rajeev Talwar, CEO DLF, and Chairman-NAREDCO Haryana applauded the role played by the Hon’ble Housing and Urban Affairs Minister in creating a climate for industrial progress in Haryana in general and in Gurugram in particular. He showed immense faith in the steps being taken and was confident of a positive and higher growth in the near future. Shri Pawan Jindal, RSS-Head Haryana, also invited the Union Ministry to make Gurugram a model for progress in order to achieve the national target of Housing for All by 2022. He emphasized the importance of elements like increasing population, pollution levels, and water availability while undertaking development projects.

Shri Hardeep Singh Puri in his address declared his and his Ministry’s commitment in achieving the Prime Minister Mission of Housing for All in 2019, way before the target year of 2022. He informed the distinguished audience regarding various

GLOBAL INVESTMENT SUMMIT


special features like the title of the home will in the name of the lady of the house to encourage empowerment.

The summit also witnessed the introduction of an innovative platform- Escrowffers. Mr. Ashwin Chawla, Chairman- Escrowffers, presented the neutral, online and convenient platform of escrow which is

powered by the ICICI Bank. Through this offering, the aim is to empower property buyers and sellers in the secondary and resale markets. users transact in a secure and worry-free manner.

The Global Investment Summit had five sessions which dealt with a wide range of themes with panelists from diverse sectors.

The first session of the summit was themed as- ‘Haryana Realty- Developing an inclusive and sustainable realty market.’Capt. Abhimanyu Singh, The finance minister, recalled the Invest Haryana Convention of 2017, as the most suitable platform for both government and industry and encouragedNAREDCO Haryana to consult with the government for ease of doing business.He looked forward to ambitious Public-Private Projects to achieve the vision of Prime Minister’s “Housing for All” with north India, especially Gurugram emerging as a high-quality destination and hub of the nation. “It’s time to take Gurugram to a global level and make it the ‘financial capital’ as also the social and cultural hub of the nation.” He said.

V Uma Shankar, CEO-GMDA, talked about the transformation of Gurugram from a village to a Millennium City. He mentioned that he received his first assignment from the Finance Minister Capt. Abhimanyu Singh to set up a paperless office. He made it possible by making all the offices paperless except for Court and Government documents. He mentioned that Gurugram has seen an infrastructure deficit built up over the years and the Government took initiatives to build institutional as well as financial structures.

He also spoke about the key elements in Infrastructure that are Connectivity, both, physical as well as digital. Digitally fiberizing the city with an optical fiber system across it, in this connection, he said that two LOI’s had been issued and two were in the process. “I met telecom Department, Govt. of India and they said they are going to popularize this system in other states of the country to enable all smart cities to create the basic infrastructure needed for optical fiber.” He also said, “By the next monsoon year, we are going to complete this fiberization which includes Manesar also.”

He also informed, “We are collaborating with NHAI to improve the bottlenecks in their functioning and take up the same on our own by dividing the city between


NAREDCOHARYANA

Old Gurugram and New Gurugram. Sohna Road, Sarhol (the entry of Delhi into Gurugam Border), Atul Kataria Chowk, Mahavir Chowk, HUDA City Centre are the five major areas of debottlenecking, two have been already awarded by NHAI and two by us. Two projects have been approved and the tenders for them are being issued shortly. Sarhol and HUDA City Center plans are ready and now getting approved.”

“Some developers are so far ahead that they need immediate solutions while some are still under process. In order to

expedite the process, there has to be better connectivity and coordination. I believe that the developer should use NAREDCO as the forum to collaborate with the government.

The aspect of funding through EDC/IDC is negative in Gurugram. The Government has spent more on Gurugram than it has collected from EDC. The problem has occurred from land acquisition. EDC problem has to be resolved otherwise GMDA will be a Non-Starter. A solution can be found through the enhancement of EDC in land acquisition and the government can provide other options. Let us meet half way by meeting the

expenses from Mangal Nagar Vikas Yojna (MNVY ) which is essential to meet the shortfall of EDC.”

Mr. Basant Bansal, Chairman M3M, said that the vision of Shri Narendra Modi and Execution of Shri Nitin Gadkari has speeded up the progress. He talked about the need for a Developer and how he is born and how from the past 4 to 5 years, perception for the developers has changed, everyone is projecting the developer image in a negative perception in media, courts, and government who refer developers as mafia, goons, thieves etc. As developers have completely transformed themselves, he said that dignity needs to be given to them. On the other hand, if Gurugram has to grow, it should be compared with Singapore, Hong Kong, Shanghai, and Dubai and then one will know where we stand in terms of progress, lifestyle, and productivity. He also mentioned the weak points of Gurugram which are Infrastructure and Low-cost housing and said that there have been no


Rajasthan Housing Board was formed in 1970 and since then they have made 2 lac 60 thousand houses, of which 2 lac 25 thousand have been delivered. He also said that Prime Minister and CM Rajasthan gave them a task to make 60,000 houses in F.Y. 2018-19 capability and speed, on time. So he requested all the developers to participate and help build housing in Rajasthan. He further said that they had enough amount to spend on housing (approx. 1000+ crore rupees) and a huge land bank and were even flexible to amend rules and regulations.

The second panel dealt with the theme of- ‘Achieving Housing for All by 2022.’ Mr. Ashok Patni, Vice Chairman- RAJREDCO, said that successful affordable housing sites in Rajasthan are 25 to 30 km away from the city of Jaipur and the LIG & MIG consumers felt that affordable housing was equivalent to Non-Affordable housing for them because they didn’t have hospitals, schools,

proactive decisions. 20, 50 or 100 years of master plans should be made by the Govt. of Haryana to make the city/state best for the upcoming generations and the target of 5 acres should be liberalized and replaced with Live, Work, Pay Culture like Bangalore and Hyderabad.

Daljit Singh, CMD, AIPL, talked about the responsibilities of Developers and the Government, he said that about 5 to 7 years back, investors have been scared to invest in North. He said, “It all starts with the developer’s integrity, trust, focus, and commitment. We should have more trust and more transparency in our deals so that no fund/investor can question us. We have come a long way. If we talk about the millennium city and GDP, these things are very nice but still so much is required. Sustainable development cannot happen in isolation, it has to be in tandem. We cannot achieve it without the government’s engagement, involvement, and approvals. The government should construct the

roads, if you need to borrow for that, you should. There should be responsibility and accountability of the government.”In TOD, out of 100 cases, only 15 have come forward. “While conversing with FM, Haryana, I said that once the building is ready the roads have to be broken for the metro work, for example, Golf Course Road, you will not able to have enough money in your kitty to build it again.”We are here to collaborate. The government should not feel that they are doing a favor to the developers and the same for the developers they should not feel that they are doing a favor to the customers.

Mr. Pradeep Jain, CMD Parsavnath, said that the issue of retrospective payment of TDS/IDC issue has to be resolved. It is the burning issue in the current period of time and the Finance Minister should talk to the Central Minister about this issue.

The session also included a presentation by MR. KK Mathur, Chief Engineer- Housing Board. He informed the audience that the


NAREDCOHARYANA

transport and other facilities near them. It took aroundtwo hoursto reach office and back from the office which extended their working time. He requested all the developers who were present at the summit to collaborate with them and make Rajasthan Affordable housing project successful with their support.”Mr. Chalapati Rao, President-Elect- NAREDCO,presented a very positive picture and said that under PMYA they have completed a total of 1 crore houses and their already sanctioned 47.5lac houses and they will touch the 50% mark very shortly. He also mentioned that overall they were when it came to Affordable Housing but to into real units, he agreed with Ashok Patni that there has to be connectivity of roads, transport, school etc.

As a part of the discussion,Rajiv Bairathi spoke on How Social Housing is Performing Today. He said, “Are we purposing only 1 crore constructed homes or are we providing users a good, better way of living. Supplier Chain is not able to deliver the product on time. Hence, there should be vast connectivity in affordable sections as well.” He agreed with Mr. Bansal that the government should change their policy related to 5 acres. Shrivallabh Goyal also agreed with Mr. Chalapati Rao’s and Mr. Ashok Patni’s statements and added that Government should work on connectivity as soon as possible so that Affordable Housing is available to the consumers, where the land cost is low and we can make jobs opportunities for the consumer i.e. Building of industry. Mr. Sorav Gupta added that theGovernment should make a scheme in Greater Noida for affordable Housing where it can acquire land and use it for industrial purpose. Lastly, Mr. KN Shukla, CMD Tashee Group, further discussed the component to preserve affordable housing and also said that the Government has announced, but the execution process is not up to the mark.

The third session commenced with Shri Neeraj Bansal, from KPMG India, as

the moderator and it dealt with the topic of Ease of doing business in the realty sector. The session was opened with the views of Mr. Sanjay Dutt (Tata Housing), regarding the impact on the ease of doing business with the coming in of various laws and changes like RERA and GST. He had positive views about these changes and

how they brought in a more systematic and disciplined way of working. He reinforced his faith in state governments and was confident that they will be able to overcome, all the challenges in near future. Mr. Niranjan Hiranandani, President NAREDCO, felt that RERA was more of a consumer-oriented scheme and it was


problematic for the builders, keeping in mind the downward trend of the economy which adds extra pressure on them. He mentioned that a scheme like RERA would prove to be beneficial in the future though, the current transformational phase is very challenging. While praising the key reform, he questioned the present

scenario of a shortage of cash flows in various viable projects.

The discussion then moved onto Mr. Ashok Tyagi, (DLF), who was somewhat skeptical of the reform process and shed light upon the projects which were not complete due to the shortage of inflow of money.

He also stated that the point by point implementation of such schemes could eliminate the small developers from the market. Mr. Anthony De Sa, Chairman of MP RERA, presented his views from the perspective of a regulator. He believed that RERA had bought in a very high level of fairness and impartiality. He also answered Mr. Tyagi’s concerns by bringing forward the main objective of the act that is to promote the realty sector. He emphasized on the point of bringing a more present-oriented approach to RERA rather than focusing on the past.

Mr. Niranjan Hiranandani again mentioned the need for clarity of the scheme and its purpose and how land short was increasingly becoming a factor leading to various challenges in implementation. He also mentioned that the quality of life in such houses needed to be taken into account for an overall and proper benefit of the scheme.

The discussion then shifted to the role of industries in such schemes and Mr. Kalpesh Mehta emphasized the importance of the unity of industries in coming together as one and solving various issues. He also raised concerns over the sharing of responsibility and signaled the government as one of the most important stakeholders in the process. He also mentioned the need of nudging rather than pushing by way of incentives and motivation for the beneficiaries of such policies rather than harsh methods and penalties in order to move towards a faster and secure growth. Mr. Antony De Safelt that government alone is not responsible for smooth operation of laws and that industry played an important role in its widespread implementation.

Mr. KK Khandelwal, Chairman HARERA- Gurugram, agreed with Mr. De Sa and emphasized the discretion of the authority. He took to the podium and picked up details from the HARERA Act. He dealt effectively with the registration of projects under HARERA, especially Sections 2, 3, and 4 of the act. He gave clarity upon


NAREDCOHARYANA

the issues of complainants in relation to promoter related projects. He also answered various doubts raised by the esteemed panelists. His mastery of the subject satisfied the panelists especially Mr. Antony De Sa.

Mr. Antony De Sa also agreed with Mr. Khandelwal’s explanations and provided various clarifications related to the technicalities of the act and further clarified about those who had the right to approach RERA. He also shed light upon the rulings of Bombay High Court’s judgments and the importance of agreements both prior to and after the enactment of RERA. Mr. Sunil Tyagi also presented his views regarding compensations which should be in accordance with the RERA act, only if signed after May 1, 2017. Mr. Antony De Sa responded by saying that Section 18 of the act needs to be seen in accordance with other provisions rather than its blind application or seeing it as an individual entity.

Mr. Khandelwal also emphasized that registration is just an entity of RERA and RERA itself includes various other components. Mr. Ashok Tyagi made an appeal to all regulators regarding the importance of builders and he also said that the application of the law had to be carried out in a balanced manner, justifying the ‘spirit’ of the act, and not favoring a particular side. Mr. Sanjay Dutt spoke strongly about preventing the industry from slipping into an anarchy and also mentioned that the sanctity of agreements needs full protection.

The panel then heard Mr. Vanket Rao, who raised concerns over unity and consensus. He also raised the need for clarity regarding rules and regulations. He said that the central government needs to ensure standardization in the implementation of these laws by various states. Mr. Rajan Bandelkar responded by pointing out to the term ‘development’, which has to be done in terms of the act. He also mentioned that RERA is

relatively new and therefore it is bound to face problems though it has a bright future. Mr. Antony De Sa also pointed out that both structural defects and defects in workmanship have been clubbed which may be problematic.

The next session dealt with the theme -Institutional Investor Investment Pulse and the esteemed moderator for this discussion was Mr. Amit Goenka (Nyses finance). Before the beginning of the formal discussion, Mr. Ravindra Agarwal, President-ACRI, announced the signing of a memorandum of understanding between the Association of Certified Realtors of India and Escrow in order to facilitate resale transactions.

Mr. Amit Goenka welcomed the distinguished panelists and the discussion began with the views of Mr. Avnish Sharma


(Partner, Khaitan, and Company). He mentioned the rules and regulations like FDI and non-resident to non- resident transfers and whether they were attracting foreign investors or not. He also shed light on the technicalities of the latest norms and regulations brought forward by RBI and how it is affecting investments and said that this can be an attempt to deepen and diversify markets. The discussion then shifted to Mr. Sanjoy Paul (The Chatterjee Group Real Estate), who shared his experience of over two decades with the audience. He showed a comparison between the past and present situations and how more awareness amongst investors has changed the scenario. He said the market is becoming more mature and asset-specific investment has become more selective. Mr. Yash Gupta ( YGRELLP) also said that the rise in investment was not as spectacular in the past because the focus was on particular themes whereas now the focus is shifting to assets which can completely change the settings. He also mentioned the current transformational shift to a manufacturing type of working in order to suit the consumers. Mr. Anuj Puri (Chairman-Anarock) spoke about the opportunities for developers and investors in the near future. In order to give an idea

about the future, he also referred to personal past anecdotes and showed how the mind-sets of investors were changing. According to him, elements like student and rental housing were fast growing in comparison to permanent housing. Mr. Arihant Kothari (Tishman Speyer) also presented his views on the theme and said that the ‘build to core’ opportunity was increasingly becoming a popular trend. He said that with the land costs coming down, the building construction has become better and this has proven to be very beneficial. He also mentioned that the future would see a bouquet of different investments with a variety of strategic plans with a diversity of timelines at hand. Mr. Amit then moved to Mr. Jyoti Gadia (Resurgent India), who raised various issues from an investor’s point of view, which are becoming a matter of concern. These issues included rental return, policies from the government in relation to infrastructure status and affordable housing, interest costs in relation to the total profit, and lastly allocation of customer advance. He ended with the various gateways that are available for funding in various projects. The audience members also questioned


the distinguished panel regarding their concerns and doubts in relation to the theme.

Mr. Yash Gupta offered his views on affordable housing and raised concerns around its costing. He said that diversification of risk and economies of scale have been important elements in various forms of investments. Mr. Anuj Puri also answered queries regarding the sustainability of affordable housing and had very positive views about it. He believed that affordable housing is a long-term project and was not the flavor of the season, mainly due to high consumer demands. He also said that in terms of consolidation, it would only be survival of the fittest. Mr. Sanjoy Paul also joined the discussion and said that affordable housing has become a more social affair. He said it could be made cost-effective only if things like construction costs were kept in mind and technology is used at a higher level. The discussion came to an end with a brief summarization of the theme by Mr. Goenka and the felicitation of the esteemed panelists.

Mr. Krishna Dhull (Honorary General Secretary- Haryana Council for Child Welfare) addressed the audience regarding Haryana Government’s numerous initiatives which deal with child welfare, ranging from playschools to

de-addiction centers. He spread awareness about the problems the youth is facing and a tumultuous future awaiting them. He urged the audience to move together and ensure the welfare of all.

The final panel discussion of the conference dealt with the theme- ‘Future of NCR- Key Economic Driver for the next 20 Years.’ Mr. Gaurav Jain ( Vice President NAREDCO and MD Samyak) moderated the discussion and introduced the distinguished panelists. He shed light upon the various new and fundamental development projects which were inaugurated in NCR in the most recent times. Mr. Ashok Wankhere (senior journalist) opened the discussion by sharing his experience as an observer. He discussed how the fundamental development of infrastructure has been helpful in the development of housing, thus, making them more valuable. He said that developers need to foresee and predict, how they could cash on various opportunities in the future. Shri Yashpal Yadav (Commissioner MCG) also added that with the tremendous support of the government, various projects had come into play. He said that NCR fulfilled both requirements of proper employment as well as the quality of life which would be extremely beneficial for its future. The discussion then shifted to Dr. Ashwin Johar (Chairman Foreign Investment and NRI Cell), who mentioned that scale

in terms of quantum and quality had been raised. He also spoke about connectivity and how it helped in the growth and development of various areas. Mr. Rajesh Arora (Arora and Associates) mentioned how the airport had become a focal point for Delhi-NCR. He also said that the introduction of various expressways had helped in decongestion of various areas and resulted in easy communication. Cheng Chiming (China Constructions) expressed his positive reviews of the incredible potential that NCR holds and said that these developments would help in economic development of the country. He also suggested that India can adopt certain policies from China for speedier growth. Mr. Shen ( Vice President- Casme Company) also joined the discussion and explained China’s development over the years. He said that technology played a very important role in the development and is the need of the hour. The panel also discussed environmental issues and ways to combat problems like pollution. The Chinese delegates expressed positivity over investments in India and were confident about a brighter and better future.

The Second Convention on Global Investment Summit united Indian realty through five sessions that have been summarized in the white paper that will become a roadmap for the industry on the path of revival.


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INDIAN REAL ESTATE MOVES CLOSER TO BEING FULLY TRANSPARENT: JLL SURVEY Ranks 35 in biennial

survey – moving up one place since 2016

India registers maximum improvement in transparency

Mumbai, June 28, 2018

India has moved up one place to take up 35th spot on JLL’s Global Real Estate Transparency Index (GRETI) 2018. INDIA has also shown

incredible improvement in the latest survey and has emerged as one of the Top Ten countries to registered maximum improvement in transparency in real estate over last two years. The country’s performance over last two cycles of JLL’s GRETI indicates that it has moved by five places since 2014.Compared to similar market sized

countries that are also part of the same “semi-transparent” group; India’s marked improvement is unmatched by its peers. Among BRICS Countries both China and South Africa remained on the same rank 33rd and 21st respectively as in 2016 assessment, Brazil slipped to 37th and Russiaremained confined to 38th rank.

Ramesh Nair, CEO and Country Head, JLL India said, "India’s remarkable improvement in the transparency scores across all markets has started to benefit the nation in the form of increased

volumes of international capital being deployed into the country. Improved market fundamentals, policy reforms and liberalisation of FDI into realty sector and retail and strengthening of information in public domain were main influencers, along with digitisation of property records and assigning “industry status” to affordable housing. Tools like “PropTech” and “BlockChain” are becoming integral part of realty sector and use of technology is only going to add transparency in to the sector.”

Private equity investments into realty sector is one of the best indicators of the confidence of the investor community and the confidence is closely linked with the transparency of the property markets and improvement in transparency. In India’s case, where the transparency index rank moved up by five places in last two editions of JLL-GRETI, rise in private equity over these years clearly reflects

Market2014 2016 2018

Rank Rank Rank

India (Tier I) 40 36 35

China (Tier I) 35 33 33

Sri Lanka 69 66


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the growing confidence and comfort of the world best and large PE Funds. PE Investment in Indian Realty has grown in every year from USD 2.2 billion in 2014 to USD 4.7 billion in 2015, to USD 6.9 billion in 2016 and it was USD 6.3 billion in 2017. This year too, we expect handsome investment activity that will continue to demonstrate the improving transparency of India property markets.

Ramesh Nair, further added, “The country's rankings is likely to improve further in GRETI 2020 mainly on the back of the comprehensive implementation of the Real Estate (Regulation and Development) Act in all states of India,

Real Estate Transparency in Asia Pacific, 2018

Transparency Tier Global Rank Market Score

High2 Australia 1.32

7 New Zealand 1.59

Transparent

12 Singapore 1.97

13 Hong Kong 1.97

14 Japan 1.98

26 Taiwan 2.32

30 Malaysia 2.57

31 South Korea 2.60

Semi

33 China 2.67

34 Thailand 2.69

35 India 2.71

42 Indonesia 2.87

48 Philippines 3.11

60 Macau 3.49

61 Vietnam 3.52

Low66 Sri Lanka 3.70

73 Myanmar 3.96

Source: JLL, Salle Investment Management

Singapore, Hong Kong and Japanon the verge of 'Highly Transparent'

South Korea moves into 'Transparent' tier on the back of improvements in market data

China on cusp of 'Transparent' tier

Thailand and India among most improved markets

Myanmar is the top global improver and moves up from 'Opaque'

introduction of insurance policies for Land Title Insurance, pseudo-ownership of properties weeded out through “Benami Transactions Act” and the sector aligning itself well with Goods and Service Tax (GST) regime.”

India’s task is cut out for entering the “Transparent Markets” defined by ranks up to 30 by executing the reforms well and fast by the time of our next assessment in year 2020. The index measures transparency by looking at factors including data availability its authenticity and accuracy; governance- of public agencies as well as stakeholders of the realty sector; transaction processes

and costs associated with those; and the regulatory and legal environment.

India is one of top ten countries showing maximum improvement in transparency score. In semi-transparent market that India belongs to and in transparent market that India aspires for, countries of The Netherlands, Thailand, UAE, Serbia have better improvement in scores than India, while Slovakia, and Thailand have same improvement in score like India. India needs to back itself and continue its journey towards creating a transparent, accountable and respectable realty sector that the best talent aspires to make careers in.


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INDIA:FASTEST GROWING RETAIL DESTINATIONS IN THE WORLDRAMESH NAIR


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For a market that is estimated to be one of the fastest growing retail destinations in the world, India has come a long way since 2011, when FDI in Retail opened up for the first time. In the past decade, the sector has

progressed towards being regarded as one of the top 5 retail destinations in the world

India’s retail sector is going through a fresh period of growth which is backed by strong economic fundamentals. Retail supply in the next three years (2018 – 2020) is expected to be at 19.4 million square feet (msf ). In the same period, demand will be approximately 15 msf. 2018 will see the highest supply since 2011.

The steady growth of supply will be accompanied by an equally stable growth in demand which is also expected to be at around 15 msf in the period of 2018 – 2020. Further, we expect a parallel rationalisation of existing mall spaces which will help the market avoid an oversupply situation.

The total newly completed malls in 2017 was recorded at 5.6 msf which is expected to see an increment of close to 40% y-o-y and rise to 7.8 msf by the end of 2018. The largest contribution to this will be coming from the two southern cities of Hyderabad (2.2 msf ) and Chennai (1.5 msf ) which will see a significant influx of mall supply. Delhi – NCR will be witnessing the highest supply of 2.3 msf of new mall space in 2018, albeit recording a decline of 28% y-o-y since 2017.

While retail mall space has now started to see a rise in the market, we did experience some rationalisation in supply last year with the withdrawal of nearly 5 msf of retail space as 28 malls shut-shop. Most of this stock consisted of poor grade malls in Delhi – NCR and Mumbai.

Delhi – NCR is expecting to see an addition of 2.3 msf of new

mall space in 2018. Most of these malls will be in the peripheral regions and would be catering to the growing catchments of NOIDA, Gurgaon and Greater Gurgaon.

While Delhi – NCR already has the highest inventory, the growth of retail sector points out to the further possibilities of growth. In the same space, Mumbai which has in the past few years seen a slowdown in retail development activities will continue to witness remain cautious. 2018 will see a decline of 13% y-o-y in new mall completions, further maintaining the status quo in the market.

Chennai will experience a surge in new completion mall spaces with over 1.5 msf of new malls being added. Chennai has seen extremely restrained development activities over the last few years, mostly due to strong preference by retailers for traditional high street locations.

Hyderabad is the other major market to see significant growth adding 2.2 msf of new mall supply in 2018. This comes at the back that the city has not seen any new supply in the last year and has had a history of sporadic additions from time to time.

Encouraged by the urbanisation, young population and rising proportion of nuclear families in urban locations, over 70% of consumption growth in the next 15 years is expected from population aged 15-59 years, with increased per capita consumption.

By 2018, the Indian retail sector is likely to grow at a CAGR of 13 per cent to reach USD 950 billion and increasing participation from foreign and private players, it is likely to boost creation of retail infrastructure. Despite the onslaught of new retail formats like e-commerce, we will continue to see a steady growth in brick and mortar stores as well as malls and mixed-use developments that cater mainly to retail formats.

National Realty June - August 2018 47

The RBIs decision to increase repo rates by 25 bps to 6.25% after 4 years speaks of a carefully deliberated decision in light of the recent inflationary pressure on the economy.

With inflation in April ’18 close to 4.25%, this decision comes as RBI looks to keep inflation under check in light of the US Fed reserve also announcing an expected hike. The decision was highly expected but will be very critical as the government enters into the election year.

The Monetary Policy Committee’s 3-day session seems to have taken into account the

RBI’S DECISION TO HIKE RATES MAY NOT HAVE SIGNIFICANT ON GROUND IMPACT ON HOUSING SALESRAMESH NAIR,CEO & COUNTRY HEAD, JLL INDIA

challenging global environment as well as the consumer inflation which is also well above the comfort levels for the central bank. The vote for a hike could also have been aided by the increased crude oil prices. Though the govt. has been passing on the hikes to date, a further hike may be very difficult to pass on which may have put additional pressure on the govt.

The hike may seem to dampen sentiments in the market but in terms of real estate may have little or no impact. As almost all home loans these days are on floating

rates, the rise and fall in home loan rates does not impact the performance of residential real estate sector much and tends to balance each other out over long term. As buying decisions are generally not taken based on fluctuations in home loan rates, there will be very little effect on the real estate market. Though for some home buyers looking towards making a very low ticket size purchase decision, there may be some tentativeness in the decision making, overall we will see minimal impact on the end-user in the housing sector.


HOW RERA IS REVOLUTIONIZING INDIAN REAL ESTATEThe 14 spokes of RERA's protective umbrella

ANUJ PURI, CHAIRMAN – ANAROCK PROPERTY CONSULTANTS

The Indian real estate industry, particularly the residential sector, was in the past correctly characterized as being

unregulated and unorganized with unreasonable project delays and poor quality of construction being definitive aspects.

The arrival of the Real Estate Regulatory Act (RERA) in March 2016 brought in a paradigm shift in the sector and metamorphosed it into a more mature, systematic and regulated one. RERA came into force on May 1, 2017, and is meant to be a homebuyer-friendly regime which will address their grievances and promote transparency, efficiency, financial discipline and accountability in the sector.

Indeed, buying a home is not only the most cherished dream for many Indians but also one of the biggest long-term financial commitment in the buyers’ lifetime. Considering this, there are 14 important guidelines incorporated in the RERA umbrella to prevent unscrupulous players from raining on consumers' home-buying plans:

1. Enforcing timely delivery of projects In case of project delays, buyers have the right to - (i) Seek withdrawal of booking (the developer is liable to refund the entire amount along with interest) (ii) Go ahead with the project (with the condition that developer will pay interest for every month of delay until the property is ready for possession). The maximum time for refunding the buyer's investment is within 45 days of it becoming due.

2. Facility to check RERA registration number All builders have to mandatorily register their projects under RERA with the respective state regulatory authority and obtain a registration number for every project. Without RERA registration, developers are not allowed to sell the project. The project details, construction progress, commencement/occupation and other certificates, sales details, etc. must be updated on the single-point information window i.e. RERA portal, at regular intervals.

3. Financial safety via an escrow account Homebuyers’ investments can be considered safe, as RERA obliges developers to deposit at least 70% of the buyers' money received for a particular project into an escrow account. This prevents the developers from 'rolling' these funds into other projects. The rolling of funds was a major reason for project delays in the past.

4. Ability to verify the builder's track record Buyers can now opt for properties only from reputed developers who are complying with RERA norms and have a good track record and financial stability, which can be verified by buyers.

5. Transparency in advertisement and marketing collaterals: Developers can now promote a project only after registering it with RERA. The unique RERA registration number has to be published with every advertisement/brochure, or in any kind of project promotion at all.

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6. Clarity on carpet area The hitherto conventional practice of developers charging homebuyers on the basis of the super built-up area no longer works. Under RERA, the quoted price has to be mandatorily based on the carpet area of the property. What you see is what you get (and buy).

7. Strict norms on building changes Around 2/3rd of the buyers’ consent in a particular project is necessary in case the developer intends to modify the building or layout plans/specifications/liabilities in the project.

8. Facility to check payment plans Homebuyers can do due diligence before opting for a particular payment plan, a variety of which developers now offer - flexi-payment, down-payment, possession and construction- linked plans.

9. Booking amount cannot exceed 10% Developers can only take 10% of the total property cost as a booking amount while

the sale agreement is drafted at later stages. RERA prohibits developers to accept more than this. If guilty of charging more than 10%, the developer potentially invites a penalty of imprisonment of up to 3 years.

10. Brokers must be registered under RERA, too As service providers to real estate consumers, property brokers are also liable for all deliverables committed by the developers they represent. Hence, they must register themselves with their respective state Regulatory Authorities.

11. At long last, a reliable redressal mechanism RERA provides a strong redressal mechanism to consumers by imposing a penalty on developers/brokers for any breach of obligation. Homebuyers can file complaints against developers/ brokers which will mandatorily be resolved in a span of 60 days from the date of the complaint.

12. Structural defects must be addressed In case of issues within the building

or apartment, such as inefficient plumbing, visible cracks, etc. in the initial five years after possession, developers are liable to rectify the defect in less than 30 days or else give compensation to the buyer.

13. Availability of land title documents These vitally important documents were, more often than not, inaccessible to buyers before RERA. Now, they can scrutinize documents related to a project's land title ownership on the RERA website.

14. Goodbye to soft/ pre-launches RERA has put a complete halt to soft launches, pre-launches and any other interpretations of selling something which doesn't exist as yet. As a result, speculators have now been pushed out and the market has turned extremely buyer-friendly.

While many states are still in the process of notifying their RERA rules, there has been continuous fretting about the dilution of the rules recently notified by many states. There are multiple changes made by different states in the RERA proposed initially by Central Government. Dilution in ongoing projects’ definitions has left a huge number of projects out of the RERA ambit and is understandably a major concern for existing buyers. To keep the spirit of RERA alive, the Government should try to keep RERA rules aligned and effective across all the states, while balancing the interests of both buyers and developers.

That said, wherever it is in force in letter and spirit, RERA is a boon to the homebuyers. While the progress of RERA implementation across states, barring a few, is going at a slower pace than predicted, it is definitely regaining the trust of homebuyers by consolidating the sector and plucking out unscrupulous real estate players.


JLL SPARK ANNOUNCES US$100 MILLION GLOBAL VENTURE FUNDWill invest in companies that aim to transform the real estate industry through technology; anticipates significant opportunities in Asia Pacific

MUMBAI – 6 June 2018

JLL Spark, a division of JLL (NYSE: JLL), announces today the creation of JLL Spark Global Venture Fund, which

plans to invest up to US$100 million in companies focused on leveraging technology to improve everything from real estate development and management to leasing and investing, while enhancing the experience of those who occupy it. The fund will help entrepreneurs and their companies by connecting them with JLL’s business lines and clients for insightful feedback and product distribution.

According to a recent report by JLL and Tech in Asia, proptech start-ups in Asia Pacific are outpacing their counterparts in Europe and the United States with 179 of them raising around US$4.8 billion in funding between 2013 and mid-2017 – over 60 per cent of the global total. It forecasts that funding for proptech start-ups in this region will reach US$4.5 billion a year by 2020.

“Asia Pacific is home to the world’s leading smart cities, many of which are powered by tech-enabled real estate tools. JLL is committed to cultivating next-generation proptech start-ups and promoting Asia Pacific as a hub of technology innovation for real estate, and JLL Spark Global Venture Fund is an extension of that goal,”says Mihir Shah, Co-CEO at JLL Spark.

“The fund gives us the unparalleled opportunity to partner with local and global entrepreneurs who can utilise the resources of JLL’s business lines to rapidly grow their companies while creating value for JLL’s clients.”

The new fund will focus on seed and Series A investments, as well as select later stage rounds. Typical investment size will range from a few hundred thousand to several million dollars. JLL Spark will direct its efforts to technology startups with products that can help JLL investor and occupier clients, or that can be used by JLL businesses to better deliver their services. The fund is also interested in companies that are inventing new technology-enabled

business models in traditional JLL service areas or those that will help expand its services to new client segments.

“Creating this US$100 million venture fund through JLL Spark allows us to continue to lead the real estate industry in bringing the best proptech ideas to reality. It complements and expands our substantial ongoing investments in innovative, cutting-edge digital solutions, which is a core part of our Beyond strategic vision and commitment to achieve ambitions for our clients,” says Christian Ulbrich, JLL’s Global CEO.

As part of its commitment to engaging with the tech and innovation ecosystem in Asia Pacific, JLL is today hosting ‘Proptech Unleashed’, the first-ever proptech forum at innovfest unbound Singapore, Southeast Asia’s largest innovation festival. Happening in conjunction with the Singapore Smart Nation Innovation Week, ‘Proptech Unleashed’ gathers industry thought leaders and rising entrepreneurs to explore the impact of smart cities and how corporates can successfully innovate.

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