Modi brand boost for realty | June 2019 | Pre-Launch Issue

P 24

POST POLL PROPERTY PATH

P 34

FACE TO FACE

ANSHUMAN MAGAZINE

Chairman & CEO, CBRE India, South East Asia, Middle East & South Africa

P 46

INTERNATIONAL

Global Markets Facing Bubble Risk

MODI BRAND BOOST FOR REALTY

Editor’s Letter

Publisher Raj Kumar CEO & Business Head Biswaroop Padhi Editor Vinod Behl EDITORIAL Assistant Editor Vishal Duggal Senior Reporter Sujeet Kumar Jha Vishnu Rageev R.

Towards Rejuvenated Realty

Content Research Nivriti Raj Mannu Kantt

The return of the progressive and reformoriented Narendra Modi-led NDA government has well established the key role played by real estate, housing and infrastructure in shaping the resounding win , with millions of beneficiaries voting for Modi.

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Particularly, the policy initiatives on the rural front have paid rich dividends to lessen the pain of poor amidst rural distress. It is not a small feat that between FY15 and FY19, about 1.55 crore rural houses were built under PMAY. To further improve the quality of life of rural masses, over 2.6 crore villages were electrified, 9.58 crore toilets were built and 2.8 lakh km of roads were constructed. It is another matter that the gains on the urban front have not been as impressive.

However, the biggest achievement of the government on real estate and housing front has been a series of landmark reforms like RERA, GST, Demonetization, Benami Property Act to regulate the sector to check speculative pricing and other malpractices with a view to make real estate affordable to masses. The policy initiatives like granting infra status to affordable housing, bringing down GST to 1 percent, credit linked home subsidy besides fiscal incentives have helped provide boost to low and medium income housing which is key to the success of ambitious 'Housing for All' mission.

But despite these positives, real estate and housing is today facing many challenges- biggest being the liquidity crisis and stalled projects in the backdrop of slowing economy. Though rent-yielding commercial real estate has revived in the recent years, with reforms related to FDI & REITs attracting global funding, residential real estate remains a worry. Though there are green shoots in the form of sales pick up especially in the affordable housing segment, the government needs to effectively address the problem of fixing economy and tackling liquidity crunch and take appropriate policy measures like promoting rental housing and faster approvals to push up housing supply . One important thing that works in favour of this government is its decisiveness and continuity of reforms which should see real estate emerging as a rejuvenated asset class over a period of time.

Vinod Behl

Vinod.behl@proptoq.com vinod.behl

v_behl

vinodbehl

34

FACE TO FACE Anshuman Magazine

Chairman & CEO, CBRE India, South East Asia, Middle East & Africa

24

POST POLL PROPERTY PATH

MODI BRAND BOOST FOR REALTY

INTERNATIONAL ROUND UP

talks about 25 years of company’s operations and prospects of real estate.

Great expectations about returns, grand capital infusion from foreigners and a liberal monetary policy are making property markets more vulnerable to bubble risk.

46

CONTENTS JUNE 2019

REGULATION

LAW

31 Road ahead for RERA

Gurugam RERA Chief Dr. K.K Khandelwal talks about the new real estate regulatory regime.

28

Talking Point

Industry Bigwigs set a roadmap for the sector in the days ahead

DESTINATION REPORT

38

50

Biased buyers agreements are Illegal

HSR Layout

Buyer agreement framed by developers which are discriminatory against buyers are illegal

56

Interior Trends

Designs for Vibrant & Productive workplace have undergone transformation

52

Realty Etc.

Kone India

leading the way for safety

HSR Layout has transformed into a major residentialcum-commercial hotspot of Bangalore

+

Plus

News Line, Pot Pourri, Product Line, News in Numbers and much more‌

POTPOURRI

HDFC Bank Joins $100 Billion M-Cap Club Private sector lender HDFC Bank has joined the $100 - billion market capitalization club. India now has three companies in the global top 100 list, with Reliance Industries Limited ranked 72 with market cap of $ 123 billion and Tata Consultancy ranked 86 with market cap of $ 108 billion.

Facebook logs on to realty With an eye on revenue, Facebook has expanded marketplace to facilitate selling of real estate. The move comes two years after FB announced its policy decision to foray into real estate.

News Maker Metro Phase 4 Stuck on Cost Sharing Dispute Private sector lender HDFC Bank has joined the $100 - billion market capitalization club. India now has three companies in the global top 100 list, with Reliance Industries Limited ranked 72 with market cap of $ 123 billion and Tata Consultancy ranked 86 with market cap of $108 billion.

6 | PropTOQ

Father of the Metro Rail in India, E Sreedharan is in the spotlight again with his appointment as top adviser to MRTS projects in J&K. Sreedharan, a retired IES officer has earned the sobriquet of ‘Metro Man’ for his leadership in building Delhi & Konkan Metro to change the face of public transport in India. As an adviser, Sreedharan will be handling two MRTS projects in J&K.

NEWS IN NUMBERS

INVESTMENT IN REALTY SECTOR

Thanks to investor-friendly regulatory reforms including RERA, GST, REITs, Indian Real Estate sector continues to maintain its momentum with highest ever quarterly Investment of ₹17,682 crore for the Jan-March Quarter of 2019 since 2008. This includes foreign investment of ₹11,338 crore.

Foreign investment in Indian Real Estate rose 81% to

₹11,338 crore

The investment rose by 7% from

₹16,528 crore

in the corresponding period last year.

crore

Housing segment secured 57% less investment during the January-March 2019 period at

₹3,697

crore

from ₹ 8,518 crore in the year-ago period.

₹7,925

in the first quarter of 2019, an over three-fold jump from the year-ago period at ₹ 1,200 crore.

- Cushman & Wakefield

in the first quarter of 2019 calendar year up from ₹ 6,260 crore in the year-ago period, the data showed.

Investment in Office Real Estate jumped to

Hospitality segment attracted

₹3,950

S

up from ₹ 6,100 crore during the period under review.

crore

Retail Real Estate attracted investment of

₹1,000

crore

up from ₹ 250 crore, and that of in mixed use projects to ₹ 350 crore up from ₹ 110 crore.

PropTOQ | 7

NEWS LINE

DLF TO INVEST ₹750 CRORE IN GURUGRAM Realty major DLF will invest around ₹ 750 crore for construction of a new commercial project in Gurugram as it seeks to encash rising demand of office and retail space from end users as well as institutional investors.

The company has decided to build a new commercial project with 2.5 million sq ft area in Gurugram. It will sell office and retail space in this commercial project, and not adopt lease model. DLF has completed and sold a 2.5 million sq ft commercial project ‘DLF Corporate Greens’ located at Southern Peripheral

Road in Sector 74A, Gurugram.

Adjacent to the Corporate Greens project, the company has more land parcels where it will build the new commercial property. The construction work would start in few months with an estimated cost of around Rs 750 crore.

capitalisation, mostly develops commercial projects on lease model to earn rental income.

However, some of its projects are on sale model as well. It has more than 30 million sq ft of leased commercial properties with a rental income of over Rs 3,000 crore.

DLF, the country’s largest realty firm in terms of market

PropTOQ | 9

NEWS LINE

EMBASSY GROUP TO EXPAND HOSPITALITY BUSINESS

Real estate major Embassy Group is on the look-out for stressed hotel assets to take it’s hospitality footprint outside Bengaluru where it operates around 700 hotel rooms, with another 1,100 under development in the city.

The Group recently listed India’s first Real Estate Investment Trust (REIT) comprising 33 million sq. ft of commercial space along with Blackstone.

Embassy Group, while continuing to build hotels on its own as part of its corporate parks outside Bengaluru, plans to acquire existing hotel assets to ramp up its portfolio. According to Sartaj Singh, President (Hospitality Business) at Embassy Group, the strategy includes establishing its presence in Mumbai, Pune, Hyderabad, Chennai, Goa and the National Capital Region (NCR) over the next three years, which will help it to take the number of hotel rooms to around 3,000 by 2025.

Indiabulls to exit real estate business Indiabulls has contacted joint venture partner Blackstone Group and other leading developers such as Godrej Properties to sell its stake in Indiabulls Real Estate (IBREL) If the group exits real estate business, there is increased likelihood of the merger of Indiabulls Housing Finance and Lakshmi Vilas Bank (LVB) getting approval of the Reserve Bank of India.

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Though the Group is mainly focused on building commercial office space, hotels constitute an integral part of its business parks. Significantly, three of its hotels are part of its REIT portfolio.

The company’s expansion strategy is based on recent upswing in the Indian hotel market riding on contracting supply, while demand continues to increase. This has prompted the company to take its hotel business beyond corporate parks in Bengaluru.

According to industry sources, Blackstone being a strategic partner, knows about all the assets of IBREL. That is why it is the natural choice of the Indiabulls group. No deal has been finalized yet, but the negotiation with Blackstone is believed to be in the last round.

The promoters’ stake in IBREL is 38.8%, which is worth Rs 1,838 crore. If the deal happens then the investors will have to bring an open offer for shareholders of IBREL. The promoters of the company have offered Blackstone to sell their entire stake in the company. Godrej Properties, along with two private equity funds, could try to buy promoters’ stake in IBREL. Immediately after announcement of LVB and Indiabulls Housing Finance’s

Currently, the group owns two hotels under the Le Meridien and Hilton brands, and plans to shortly open Four Season luxury hotels given the growing demand and improved sentiment in the hotels space. Though the group has so far funded its expansion mostly through its internal accruals, it has also been successful in attracting private equity investors.

merger proposal, Indiabulls Group Chairman Sameer Gehlot had indicated that the founders of the company are ready to leave promoter status in IBREL and also reduce their stake.

Currently, Indiabulls’ priority is to bring stability in its financial services business.

Moreover, the contribution of real estate business to the group’s earnings has been very small. Blackstone had made JV with IBREL, in which it had a 50% stake. Under this, Blackstone purchased half the stake in the One Indiabulls Centre, Sky Forrest and Indiabulls Finance Centre for Rs 2,500 crore. The deal was done at the enterprise value of Rs 9,500 crore in March 2018. These properties have 41.4 lakh sq ft space for lease and are expected to fetch annual annuity revenue of Rs 890 crore

by FY 2021-22.

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NEWS LINE

GODREJ OMKAR TIE UP FOR LUXURY HOUSING IN MUMBAI Godrej Properties Ltd has tied up with Omkar Realtors and Developers Ltd to develop a 4.25 acre prime sea-facing luxury residential property in Mumbai’s Bandra West area.

With a number of slum rehabilitation projects, Omkar is building its largest luxury project “1973” in Worli for the past five years. But it has faced considerable difficulty in selling the apartments due to the slowdown in the real estate sector, with the luxury segment bearing the brunt. Last year, the developer said that completed projects are selling better and it is now focused on building smaller homes.

Godrej Properties, on the other hand, has made the most of such opportunities that the market has thrown up as more and more developers are looking at partnering with stronger developers, with better financial bandwidth and reputation, to develop land assets and incomplete projects.

In the last couple of years, Godrej Properties has inked multiple deals across cities taking over projects from other developers. In its latest deal, in February, it partnered Pune-based Solitaire Group to develop six projects of the latter spread across 300 acres.

According to Pirojsha Godrej, Executive Chairman of Godrej Properties, these deals are in sync with the company’s strategy of building it’s presence across the country’s leading real estate markets. The company intends to deliver an outstanding project that becomes a Mumbai landmark.

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HIRANANDANI TO FOCUS ON WAREHOUSING & AFFORDABLE HOUSING After a successful stint in commercial and luxury residential development, Mumbai-based Hiranandani Communities, a real estate firm set up by builder Niranjan Hiranandani, is diversifying into affordable housing and industrial warehousing parks for its next stage of growth. The company is in discussions with a strategic partner to start work on its first warehousing park spread across 5 million sq. ft, on a 250-acre plot it owns in Pune.

According to Hiranandani, the plan is to create a new industrial warehousing business worth up to Rs 3,000 crore over the next two-three years. Besides Pune, it is also working on building industrial logistics and warehousing parks in Chennai and Nashik, where it owns around 200 acres and 77 acres, respectively. It is also scouting for land at other warehousing hubs such as Bhiwandi (near Mumbai), Kolkata, the National Capital Region (NCR) and a few locations in Bangladesh.

Hiranandani Communities is separately building another 2.5 million sq. ft of office space at Panvel in the outskirts of Mumbai. However, despite strong commercial development plans, the residential segment will continue to be the larger chunk of the company’s business, with the focus being on the affordable housing business, as compared to its earlier strategy to build large luxury apartments.

At present, the company is building around 2,300 compact homes in Thane, Panvel and Chennai, with prices starting from Rs 55 lakh. But with the GST Council’s latest decision, only homes priced up to Rs 45 lakh count as affordable homes, which is a challenge that the company needs to overcome.

NEWS LINE

Nitesh Estates to raise ₹ 1,300 crore for commercial office portfolio Nitesh Estates Ltd plans to raise about Rs 1,300 crore to build a commercial office portfolio even as it mulls exiting the residential business. The Bengaluru-based developer will raise Rs 800 crore as equity and partner a foreign investor primarily to build a commercial office platform.

According to Chairman and Managing Director Nitesh Shetty, the company has mandated Industrial and Commercial Bank of China (ICBC) for the same.

Nitesh Estates also plans to raise up to Rs 500 crore of mezzanine capital or structured debt for three to four residential projects, which will be eventually converted into offices.

Nitesh Estates has primarily been a premium residential developer, but given the slowdown in this segment and the several roadblocks faced by the sector, its focus is to finish underconstruction projects, pare debt and then, look at rent-generating assets.

The developer also plans to sell or exit a few land parcels, including those it owns as well as under joint development agreements to raise another Rs 400 crore. The bulk of the proceeds will be used to trim debt and the rest to complete ongoing projects and other exit formalities.

Piramal, Omkar tie up for Mumbai office project After forming a joint venture with Godrej Properties Ltd for a 4.25 acre, sea-facing property in Mumbai’s Bandra West, Omkar, primarily a slum re developer, has tied up with Piramal Group’s real estate arm Piramal Realty to develop a commercial office project.

The companies agreed to jointly develop a 2 million-sq. ft, office complex at Mumbai’s Andheri area. This is the second time Piramal Realty has tied up with Omkar, after entering into a development agreement for a 12-acre project in south Mumbai, last year.

The office project would be developed as part of a 63-acre mixed-use development comprising high-end and mid-income homes, office space and a shopping mall.

PropTOQ | 13

NEWS LINE

ATS TAKES UP STALLED REALTY PROJECTS Real estate developer, ATS group has decided to venture into the Project Management Consultancy space, in a bid to facilitate developers to complete stalled projects.

The company has decided to partner Logix group to complete three projects, namely, Logix Blossom Greens, Logix Blossom County and Logix Blossom Zest.

The aim is to complete the construction of three projects launched by the Logix Group and ensure delivery of over 4,500 apartments in a phased manner from the end of 2019.

According to Getamber Anand, Chairman and Managing Director, ATS Group, the PMC will endeavour to take up incomplete projects, where, with proper management and construction, due diligence and execution, delivery will be ensured in line with stipulated timelines. ATS enjoys a track record for on-time delivery and this will certainly revive confidence in customers who have booked their units in these projects.

Logix group has so far partially completed the construction of the three projects and delivered around 3,800 apartments.

Around 400 apartments are ready to movein, which would be up for delivery soon.

14 | PropTOQ

BROOKFIELD WINDS UP REALTY ADVISORY ARM IN INDIA Brookfield has shut down a small financial and real estate advisory office in India (BFIN) and retrenched about 15 executives.

However, many offices that BFIN has globally, will continue.

Brookfield had started its facility management services in India about three years ago. The real estate advisory arm used to report to the London office directly.However, Brookfield, one of the most aggressive investors in India, will continue to run its other businesses besides advisory.

Meanwhile, Brookfield has sold its integrated facilities management company to CCMP Capital Advisors for $1 billion last year. Chief Executive Officer, Gordon Hicks, and the management team will remain in place and work with CCMP to support the company’s next phase of growth.

NEWS LINE

$ 35 b office space eligible for REIT listing

Prestige Group to develop five more Forum Malls With nine operational malls across Bengaluru, Chennai, Hyderabad, Mangaluru, Mysuru and Udaipur, with over 5 million sq ft of gross leasable area and close to 2,000 stores, Prestige Group is building five more Forum malls.

According to JLL’s latest report titled ‘REITs - Heralding a new era in real estate investments’, $35 billion worth of office spaces in the country are eligible to be listed under the Real Estate Investment Trust (REIT), an investment tool that owns and operates rent-yielding real estate assets.

The successful listing of India’s first REIT floated by Embassy Office Parks heralds the institutionalization of real estate assets and indicates enhanced maturity and professionalism in the real estate market.

According to JLL India Chief Executive Officer and Country Head, Ramesh Nair, growing knowledge of REITs will ensure acceptability and gradual increase of interest from retail investors. Other asset classes like retail, warehousing and hospitality are also likely to offer REITable assets in the times to come. Indian commercial real estate market is estimated to provide 294 million sq ft of REITable space from the existing office stock. These REITable assets would be valued at $35 billion.

Investors have allocated nearly USD 17 billion in the form of direct investments as well as through entity-level investments from 2006 to 2019 in the office space.

The report found out that with 33 per cent share of REITable space, Bengaluru will provide the highest REITable assets totalling 97.8 million sq ft, worth $10.7 billion. Mumbai follows Bengaluru with 17% share of total REITable space at 49.7 million sq ft worth $8.6 billion.

Emergence of new office space occupiers, continued demand from IT/ITeS, global in-house centres along with the BFSI space are expected to keep office space demand robust over the next three years.

While the strong institutional flow of funds into real estate will continue to provide initial momentum towards REITs’ growth in the country, active participation of insurance and pension funds in future will help in long term growth of the market, the report adds.

These malls are coming up across Bengaluru, Chennai, Kochi and Kakkanad, covering approximately 8.1 million sq ft of retail space. By 2023, the company aims to have more than 25 malls, covering over 14 million sq ft and around 5,000 stores.

PropTOQ | 15

NEWS LINE

OYO BOOKS $200 MILLION FUNDING FROM AIRBNB

Airbnb Inc., the world’s largest home-sharing platform, has reportedly invested an undisclosed amount in India’s budget hotel startup, OYO (Oravel Stays Pvt. Ltd), as the US company seeks to bolster its hotel-booking business ahead of a planned IPO. Airbnb is said to have invested between $150 million and $200 million in OYO as part of the Indian startup’s Series E funding round.

The OYO-Airbnb deal is expected to allow OYO'S 10,000 villas and homes in India, Dubai and other markets to be listed on the Airbnb platform, expanding OYO'S international reach and strengthening Airbnb’s presence in Asia.

The home-renting company is adding hotels to its listings inventory as part of a strategy to attract travellers who find renting a home from a stranger risky.The investment also underscores a growing trend ofcompanies in the travel and hospitality segment exploring ways to leverage each other’s strengths.

Analysts say that Airbnb is increasingly becoming a broad-based travel company rather than just a home rental platform. This deal further reinforces that perception which would be good for the company ahead of its public offering.

Since it entered the country almost three years ago, India has become an important market for Airbnb. While the home-rental platform

16 | PropTOQ

has about 47,000 properties listed in India, globally Airbnb has almost 6 million listings across 81,000 cities in 191 countries.

“Emerging markets like India and China are some of Airbnb’s fastestgrowing, with our growth increasingly powered by tourism to and from these markets,” said Greg Greeley, President of Homes at Airbnb. OYO has also been aggressively expanding its global footprint over the past one year by entering markets such as China, the US, United Arab Emirates and the Philippines, among others. In India, OYO is present in more than 259 cities, with more than 8700 buildings and over 173,000 rooms. “Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes,” said Maninder Gulati, Global Chief Strategy officer at OYO Hotels & Homes.

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NEWS LINE

Gaur Group to focus on affordable housing Under these projects, the company will build one-bedroom and twobedroom flats of sizes ranging from 600 sq ft to 900 sq ft. Each project will have 4,000 apartments.

According to Manoj Gaur, Managing Director, Gaursons, in order to bring down the construction cost, the company is investing in latest, costeffective construction technology.

Gaurs Group plans to focus on providing its customers affordable housing options in the range of Rs 20-30 lakh in the current financial year. The realty major intends to cater to the housing needs of those who earn between ₹ 20,000 and ₹ 30,000 per month but for whom the markets of Noida and Greater Noida are out of reach.

The group will launch two to three such projects in Noida and Ghaziabad by the end of this financial year. Keeping in view the market trend of young couples looking to possess a house of their own, the projects will be designed to offer modern amenities.

The company is also exploring options in the commercial segment and plans to launch two malls this year. Gaur informed that this expansion has been fuelled by the company’s success in selling its inventory. This has helped it close two loans recently, increasing its borrowing limits considerably.

MBD GROUP TO ACQUIRE STRESSED HOTELS TO DRIVE EXPANSION 18 | PropTOQ

Hospitality firm MBD Group is in the process of aquiring some stressed hotels in Delhi, Mumbai and Goa to drive its expansion.

The company, which recently launched its budget hotel brand MBD Express on a complete lease mode, plans to sign 12 agreements under this division by the end of this financial year. The first two agreements are likely to happen in the Delhi-NCR region by the second quarter of the current financial year.

Typically, the cost of a room in most economy hotels is between Rs 4,000 and Rs 5,000, but with MBD Express, the group aims to keep the tariff around Rs 3,000. The group which entered into a joint venture

with German luxury hospitality firm Steigenberger some time back, plans to come up with 20 hotels in the next eight years under the MBD Steigenberger brand.

In the last 15 years, MBD Group has done investments in hotels which were completely owned but the JV model will help it expand its footprint.The group is also exploring opportunities in the luxury segment in tier 2 cities and plans to launch MBD Steigenberger in Nagpur and Jaipur by 2020.

NEWS LINE

GMR TO DEVELOP BUSINESS PARK IN HYDERABAD The project with a total commercial area of a million sq ft is expected to be completed in the next 2-3 years, depending on the demand.The business park will be developed by GMR Hyderabad Aerotropolis Ltd, a 100 per cent subsidiary of GMR Hyderabad International Airport Ltd, which conceptualized the Airport City to trigger an integrated ecosystem of commercial, retail, leisure and entertainment, aerospace logistics, and healthcare over a 1,500-acre campus.

An exclusive business park will be built at the GMR Airport City in Hyderabad with an investment of â‚š 350 crore.

divest stake to bring down debt and follow an asset light strategy.The focus will be on attracting IT, technology, new economy companies from across the world, with office and related infrastructure tuned to their needs.

Green technologies, new generation digital and quality infrastructure will form the framework for the development of the Business Park. A Retail Park, which will house malls and cinemas will be launched soon. It will be followed by an entertainment zone.

The GMR Group has been looking at opportunities to monetize its land bank,

PropTOQ | 19

NEWS LINE

BHUMIKA GROUP ENTERS REAL ESTATE WITH ₹300 CRORE PROJECT AT UDAIPUR

Logistics firm Bhumika Group has entered real estate market, with its maiden project at Udaipur. The total area in this project named, ‘Urban Square’ will be 18 lakh sq ft. “But, we are currently developing the first phase comprising over 10 lakh sq ft,” Bhumika Group Director and Chief Executive Officer Uddhav Poddar said.

The project cost for the first phase of the project is Rs 300 crore. The project is being financed with a mix of equity, sales advances, internal accruals and debt which has been secured from Aditya Birla Finance Ltd. The construction work has already started and the first phase will be delivered in the next three years.

In the first phase, the company is constructing a 5 star hotel with 200

keys and has roped in Holiday Inn for the management purpose.

Bhumika Group is also developing a shopping mall, high-street retail and office space and serviced apartments in the first phase. The company is giving retail space in shopping malls on lease, while office space, highstreet retail and service apartments are on sale model.The project is being designed by shopping mall specialist

architect from South Africa - Bentel Associates.

Bhumika Group is planning to develop more commercial projects in Rajasthan, Haryana and the National Capital Region. In its logistic business, the group handles transportation and warehousing for cement manufacturers.

NAREDCO PLANS SKILL TRAINING FOR CONSTRUCTION WORKERS National Real Estate Development Council (Naredco) has signed an MoU with Construction Skill Development Council of India (CSDCI) to promote certification of large unskilled workforce primarily in the organised sector.

20 | PropTOQ

This is being done as part of the Ministry of Skill Development and Entrepreneurship’s Pradhan Mantri Kaushal Vikas Yojana (PMKVY).“The foremost objective of this MoU is to incentivise industry players to associate themselves with the scheme and mandate the certification of their workforce across different areas of operation,” said Niranjan Hiranandani, National President, Naredco. A CSDCI affiliated training partner, India Vision Realty Infrastructure Pvt Ltd has

been appointed by Naredco to act as a facilitator to conduct assessment and certification.

In the first phase, a target of 25,000 candidates across various construction sites on a panIndia basis, for all roles has been allotted by CSDCI. Based on the outcome and speed of delivery in the first phase, Naredco will set another target of 25,000 construction workers after 80 per cent progress in the first phase.

NEWS LINE

PNBHFL reports 51% rise in net profit, to mop up $1billion PNB Housing Finance Limited ( PMBHFL) plans to raise up to USD 1 billion (around Rs 6,954 crore) from foreign markets, and additional Rs 10,000 crore by issuing bonds. This fund raising by way of commercial borrowings is expected in one or more tranches.

Meanwhile PNBHFL has reported a 51 per cent increase in consolidated net profit for the March quarter at Rs 380 crore from 252 crore in the year ago period. The net interest income for the quarter under review grew 13 per cent to Rs 609.7 crore against Rs 540.8 crore for the same period last year. For the entire fiscal 2018-19, PNBHFL’s net profit grew 42 per cent to Rs 1,191.5 crore against Rs 841.2 crore during the same period last year.

Net interest margin for the fourth quarter stood at 3.18 per cent, compared to 3.59 per cent in the same quarter last year.Gross non-performing assets stood at 0.48 per cent of the loan assets as on March 31, 2019, compared to 0.33 per cent as on March 31, 2018.Net NPA stood at 0.38 per cent of the loan assets as on March 31, 2019, against 0.23 per cent as on March 31, 2018.

Godrej Properties posts 270% Y-o-Y rise in Q4 FY19 Godrej Properties has reported a 270.53 per cent year-on-year rise in consolidated net profit at Rs 156.66 crore for the quarter ended March 31, 2019. It had posted a net profit of Rs 42.28 crore in the corresponding quarter last year.

Total income of the real estate player jumped 125.70 per cent YoY to Rs 1,203.21 crore in Q4 FY19 over Rs 533.09 crore in Q4 FY18.

Consolidated total expenses of the company rose to Rs 954.62 crore for the quarter under review against Rs 487.01 crore in the same period last year.

PropTOQ | 21

NEWS LINE

DDA extends its housing scheme deadline

The Delhi Development Authority (DDA) has extended its housing scheme deadline from May 12 till June 10 following poor response from prospective buyers.

This is the first time that the entire process was made online and all applications were processed through banks. After extending the scheme, the DDA has set up facility centres to assist people in filling applications online and other financial transactions.

The DDA received nearly 20,000 applications for 18,000 flats that were put on sale in March, whereas it had expected approximately 50,000 applications. According to senior DDA officials, banks, which are processing the housing applications this time, too had requested for an extension, as a lot of them could not sanction loans to people to apply for the scheme due to administrative reasons. This could be one reason why the land owning agency got such a low response.

Aveva eyes smart city, airport projects

Of the 18,000 flats offered by DDA, 16,900 are located in Narela and remaining in South Delhi’s Vasant Kunj. A majority of these flats 16,000 units - are in the Low Income

After the failure of two successive housing schemes in 2014 and 2017, the DDA had relaxed norms to ensure good response from the public. Now, people who own a DDA flat can also apply, but their flat size has to be up to 67 square metres.

The development authority has also scrapped the five-year lock in period, except for EWS category.

Looking to double its revenue from India operations, the UKbased engineering and industrial software solutions firm Aveva has doubled its office space to 1,20,000 sq ft here to strengthen its research and development capacities.

The facility will house a new Global Service Hub with a capacity of 400 people. It is planning to hire 200 people for its Hyderabad facility in the next 12-18 months.

The company, which has bagged a smart city project at Naya Raipur along with its consortium partners, is looking at opportunities in smart city and smart airport projects in the country. It is confident of bagging 4-5 more smart city projects soon.

According to James Kidd, Deputy

22 | PropTOQ

Group (LIG) and 450 flats in Vasant Kunj fall in the High Income Group (HIG) category.

Chief Executive Officer and Chief Financial Officer of Aveva, the company’s India business is contributing 5 per cent to its overall global revenues. This is growing at over 30 per cent annually. The company expects contributions from India to double over the next five years.

The firm invested over £200 million on building research and development capacities in the country in the last six years.

India is home to about onefifth of its global workforce of 4,600 employees. It houses 1,020 employees, including 693 in its Hyderabad facility.

COVER STORY

The return of Narendra Modi led NDA government is music to the ears of mandarins of real estate sector as the reform- oriented government is the best bet for the continuation and consolidation of reforms that have regulated realty and put it on a sustained and healthy growth path.

POST POLL PROPERTY PATH

MODI BRAND BOOST FOR REALTY - Vinod Behl

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COVER STORY If Modi 1.0 was about romancing with reforms, Modi 2.0 is all about not only continuing these reforms but taking these initiatives to their logical end in order to ensure that the benefits of reforms are actually translated on ground as masses have great expectations from him in his second term as Prime Minister. And Modi realizes it well the need to take reforms to next level. His resolve got reflected during polls , in his clear directive to bureaucracy to prepare near term (100 days) agenda for the new government. As a result of this, in the very first cabinet meeting, the government could announce some key policy decisions.

From day one in its first term, this government was committed to boost real estate as an engine of economy, was clearly visible in its first interim budget, regarded as a 'golden budget' in the history of real estate. It contributed considerably in improving the investment climate by liberalizing FDI norms in the construction sector. The introduction of REITs with tax incentives to unlock new source of funding for the capital intensive real estate sector was another landmark policy initiative. The twin measures of increasing home loan interest exemption limit by Rs 50,000 and raising income tax limit by Rs 50,000 was a major policy decision aimed at boosting disposable income of property buyers, in turn giving impetus to the real estate sector.

Over the last five years, Modi government consistently and commitedly followed the reform path to lift the sector facing slowdown for a long period. The historic reforms of Real Estate Regulation Act (RERA) and GST particularly gave a new direction to real estate to usher in an era of organised, fair, transparent and well regulated property transactions to safeguard the interests of property buyers.

These big and bold reforms together with demonetization and law against benami property, came as a surgical strike on rampant use of black money in real estate transactions that was responsible for speculative property deals, leading to artificial spurt in prices over the years. As a result of all these mega reforms and key policy initiatives of 'Housing for All' with focus on Affordable Housing , residential real estate turned affordable, bringing homes within the reach of masses.

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COVER STORY The initial period of reforms brought in pain due to disruption in the sector, already facing downturn. But now after the teething problems are over and the reforms have more or less settled, the positive impact is all visible in the form of real estate heading towards certain revival. The commercial real estate has already seen revival , with introduction of REITs giving it further momentum.

As a result of reform measures, regulatory regime and increasing transparency , global institutional investors like Blackstone, AscendasSingbridge etc. are now showing increasing interest in investing in commercial real estate. Singapore based investor & developer Ascendas - Singbridge that manages over 17 msf across its portfolio in India, has announced to double its office portfolio. PE funds are also partnering with Indian real estate companies for the purpose of investment.

Recently Warburg Pincus, a US based PE fund manager along with Indian real estate developer, Runwal announced its plan to invest $ 1 billion to construct malls in India.

On the residential real estate front too, there are green shoots of revival. The pick up in residential sales that were badly hit due to unaffordable prices and high transaction

26 | PropTOQ

costs, besides uncertainty over project completions, has now been possible due to more affordable prices, substantial interest subsidy of up to Rs 2.67 lakh under Pradhan Mantri Awas Yojana (PMAY), ,reduction in interest rates and drastic cut of 8% in GST rates, with GST on affordable homes coming to a mere 1% while on standard housing it now stands at 5%. The substantial

As a result of reform measures, global institutional investors are now showing increasing interest in investing in commercial real estate. interest subsidy of up to Rs 2.67 lakh under PMAY has contributed significantly to higher sales. HDFC, the country's largest mortgage lender has disbursed subsidy amounting to Rs 2300 crore, benefiting over over 1,04000 first time home buyers.

Latest reports by Global Property Consultants on sales, inventory and new launches clearly point to real estate gradually gaining strength.

Going by the report of Anarock Property Consultants, there has been a 12% increase in

home purchases in seven top cities across India, with majority of the sales happening in affordable segment. Home buyers who were earlier shying away, are now coming out to buy homes as these are now not only affordable in pricing with soft home loan interest rates, but also there is no development risk as plenty of inventory of ready-to- move homes is available in the market. What is significant is that home buyers are also coming forward to buy under construction homes as due to the implementation of RERA, they have gained confidence about the safety of their investment. Moreover, there is added incentive of a a very low (1%) GST on affordable housing.

That buyers' confidence and buying sentiment has gone up, is clearly reflected in the recent Knight Frank Sentiment Index Survey Q1 2019. The findings reveal that the index has gained five points.

The sales velocity momentum has further picked up in the first quarter of calendar year 2019 in the backdrop of two successive rate cuts and interim 2019-20 budget boost in the form of incentive to home buyers for investment in second home through withdrawal of tax and incentive to developers.

COVER STORY

Hardeep Singh Puri : Productive innings Minister of State (Independent Charge) for Housing and Urban Affairs

by way of removal of tax on unsold units. Industry reports suggest that Q1 2019 saw as many as 80000 units getting sold across India, with NCR, MMR, Bengaluru and Pune accounting for more than three fourth of sales.

Because of rise in sales, the high unsold home inventory has also seen a significant decline. With buying sentiment going up, developers have now also been taking to new launches which were earlier held up for long. Industry statistics point to cumulative drop of 16% in overall unsold housing inventory during the past two years. As a result of this, the residential inventory overhang in seven key cities , according to Anarock consultants, has come down to 30 months in Q1 2019, from 50 months in the corresponding period in 2017.

Due to this overall positive sentiment prevailing in the residential real estate, there are signs of improvement in prices, with real estate experts hoping for upward movement of prices by the next financial year.

The substantial interest subsidy of up to Rs 2.67 lakh under PMAY has contributed significantly to higher home sales.

HDFC, the country's largest mortgage lender has disbursed subsidy amounting to Rs 2300 crore, benefiting over over 1,04000 first time home buyers.

PropTOQ | 27

TALKING POINT

ROADMAP FOR REAL ESTATE Ananta Raghuvanshi

Anuj Puri, Chairman

Niranjan Hiranandani

International Director- India, Damac

Anarock Property Consultants

National President, NAREDCO

Capital protection has been a priority instead of planned risk taking for the last decade, as a lot of investments left a bad taste. Revival of confidence of buyer, builder and broker is possible only in a conducive environment with consistent political- legislative stability. A whole segment of young first time buyers need to be roped in . Housing has to be planned keeping the current lifestyle and budget in mind. Housekeeping services, geriatric care, micro homes, shared student dwelling etc are areas which can swing buyer preference. As the newly elected government stabilizes, stalwarts of Indian realty should be ready with killer products as the rust of stale vanilla products need to be cleaned up fast.

Over the past five years, the Modi government u s h e r e d into major regulatory reforms to give steady momentum to real estate.

Now with this reform - oriented government coming back to power for the second term, one can expect the real estate momentum to gain further traction, with the overall sentiment of buyers, builders and investors going bullish. Though challenges like liquidity crisis stare ahead, yet in a stable and wellregulated environment, and with strong government at the helm, one would see fruition of on-going regulatory reforms , in turn giving impetus to real estate.

With the return of strong and stable Modi government, we expect continuity of progressive policies initiated by it over the last five years and expect it to take strong corrective measures to fix economy. We look forward to pushing structural reforms and other policy initiatives to give desired boost to real estate business and elevate consumer sentiment. But then, the government needs to tackle the serious challenge of liquidity crisis.

Considering the tall targets of ‘Housing for All’, there is need to take pro- active steps to create surpluses through policy measures to promote rental housing and upskilling of workforce.

This will provide the much needed push to the sector.

Vivek Soin

Pradeep Aggarwal

Deepak Kapoor Director Gulshan Homz

Founding Director & Principal Westcourt

The road ahead for real estate looks promising, particularly with the return of Modi led NDA government that had ushered in several far reaching reforms like RERA, GST, Indian Bankruptcy Code and legislation against Benami Property.

The continuity of the government would see that the good work done in the past is carried forward by pushing the reform agenda. The FY 19 sale statistics show that real estate is gradually gaining strength. Further, in the coming months, one would see increased traction in sales, leading to its revival.

At present the biggest two issues impacting the real estate are low buyer conf idence resulting from stuck projects and extremely tight liquidity resulting from weak investment sentiment and NBFC crisis.

However, in view of stable mandate in the general elections and Modi government coming back to power, investment environment may become conducive and real estate which has been gasping for funds may well see some revival.

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Chairman, Assocham National Council on Real Estate, Housing & Urban Development The real estate sector going through difficult times, needed continuity of key reforms undertaken by the NDA government in its last term. Now with strong , stable government under Prime Minister Modi taking the reins of the country, we will see reform policies getting a further push. But then, the government needs to improve the liquidity position and ease of doing business with faster project approvals to speed up early revival of the sector.

COVER STORY

But then despite all these positives, there are some serious challenges which the real estate sector still faces.

The issue of large number of stalled housing projects is a serious problem that the government needs to tackle urgently.

But then despite all these positives, there are some serious challenges which the real estate sector still faces. The biggest challenge before the new government is to fix the economy which is in a slow lane.It needs some serious efforts to kick start private investment and boost public investment to revive economy.

Currently, the capital intensive real estate sector faces the serious challenge of liquidity crisis. And this is one major factor responsible for decline in home loan disbursal, thereby adversely impacting the flagship mission of 'Housing for All' in terms of meeting its targets. The issue of large number of stalled housing projects is a serious problem that the government needs to tackle urgently.

Though the government fully realizes the importance of infrastructure development and connectivity in boosting economy in general and real estate in particular, it has to find innovative ways of financing.

Especially so, as it is aiming to construct 60,000 km of national highways while doubling the length of these roads by 2022, doubling the functional airports to 202 in 5 years, covering 50 cities by metro network in 5 years and completing dedicated rail freight corridor project by 2022.

Besides financial constraints, real estate today faces the challenge of lack of adequate skilled workforce which is adversely affecting the supply of real estate. The government needs to take some drastic actions on this front, together with simplifying labour laws.

The immediate test for the government is the presentation of a full-fledged budget for 2019-20 in July.The big challenge will be to tackle direct tax collection shortage and anticipated short fall in indirect taxes and find ways to finance infrastructure needs and flagship real estate missions like 'Housing for All' and 'Smarts Cities Mission'.

Industry expects announcement of special window for NBFCs to tide over financial crisis and recapitalizing NPA - battered banks to restart bank funding to real estate sector.

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COVER STORY The new government also has its task cut-out to not just continue and consolidate reforms undertaken by it but also usher in some bold new reforms to put real estate on fast track.It is expected of the government to consolidate the gains of RERA and revamp GST with fewer and lower rate slabs with easy compliance.

Other long pending issues relate to easy funding at reasonable rates to real estate, especially price - sensitive affordable housing segment and easing project approvals that result in project delays and cost over run.

The government has already taken steps in this regard including easing of green nods, which is reflected in the significant improvement in Ease of Doing Business Index. That the government is committed to further improve its track record, is clear from its recent decision to exempt projects of 20,000-50,000 sq metre from green permission.

Further, in order to speed up the completion of projects, the government has on its agenda the liberalization of cumbersome Land Acquisition Act.

And considering the intent and the commitment of the BJP government under Modi, one hopes it will live up to its poll time slogan "Modi hai to mumkin hai" and going forward, real estate will overcome challenges to usher in "Achhe Din" 30 | PropTOQ

REGULATION

ROAD AHEAD FOR RERA Notwithstanding its slow and patchy implementation, the landmark Real Estate (Regulation & Development ) Act 2016 has made noteworthy progress after two years of its implementation, contributing to make Indian real estate well regulated, structured, streamlined and more organised, much to the benefit of all the stakeholders.

The Real Estate Regulation Act was enacted by the parliament in March 2016 but was implemented a year later in May 2017. Two years after its implementation, RERA has covered much ground.

It has been implemented in 22 states and 6 union territories.

West Bengal has not implemented the central act and has its own act. According to the latest statistics, by April 20, 2019, a total of 39855 projects were registered pan India though registrations in some states are still low. As many as 23 states have operational portals to get complaints registered.

But then the progress report tells that 8 states have so far not set up permanent authority. There is also not very encouraging movement on setting up of Appellate Authorities.

Many authorities are not deciding cases in mandatory time frame. Moreover, they are not effectively getting their orders of refund/penalty against errant builders implemented. There is hardly any progress on putting a system in place to safeguard the interests of home buyers

post delivery in terms of ensuring that apartment/ home is free from structural defects and is of good quality.

In terms of awareness, home buyers are not getting effective information about projects on RERA websites to take informed decision about investment in property. This is because not all websites are operational and secondly, there is no system in place to ensure that all the mandatory and correct information is loaded on the websites.

Butdespiteallthese def iciencies and fears surrounding dilution of few norms by some states, RERA has succeeded in ensuring that developers registered with it adhere to project compliances so that the interests of the home buyers are secured. This has started showing positive results with the confidence level of buyers going up in terms of investments in real estate. This is clearly evident from the rising sales of residential property. So much so that the buyers have now even overcome the fear of development risk to invest in under construction homes .

However, RERA has not been able to win the confidence of buyers in terms of finding a solution to the stalled/delayed housing projects. The Housing & Urban Affairs Ministry has also not been able to live up to its promise of finding a solution by bringing in Asset Reconstruction Companies.

Leading industry body, CREDAI had suggested to rope in resourceful and credible developers or investors as co- developers to complete the unfinished projects, while buyers associations had proposed to the government to create a Stress Fund to take up the construction of stalled projects.

But then RERA is still a work in progress and there is a definite scope of improvement in its implementation.

And it will evolve with time to attain optimum efficiency for better and more effective resolution of buyers' complaints, living up to its promise of transforming real estate.

- Vinod Behl PropTOQ | 31

REGULATION

K.K. Khandelwal Chairman, Gurugram RERA

COMMITTED TO RESTORE BUYERS' FAITH

The role of Gurugram Real Estate Regulation Authority assumes greater significance with a real challenge on hand in the backdrop of National Capital Region (comprising Gurugram and Noida) having large number of stalled projects and aggrieved buyers. But its dynamic Chairman, Dr K.K Khandelwal is determined to change the reputation of NCR as an unregulated speculative property market.

He is equally determined to create the image of Gurugram RERA as an effective regulatory body which is not found wanting in exercising its powers and taking appropriate action against errant developers involved in cheating home buyers.

Khandelwal says that RERA mandate is to protect the interests of home buyers in a market that had been plagued with many undesired practices and fly by night operators taking undue advantage of consumers.

RERA Act is fully equipped in that sense. He further says that the Authority is committed to restore buyers faith in real estate sector by securing their interests by way of promoting fairness and transparency in property transactions. The Authority has explicit powers to initiate action against any erring developer and it is living up to RERA's guiding philosophy of functioning

32 | PropTOQ

to ensure compliance of its orders/directions by real estate companies and promoters.

Khandelwal opines that RERA is in the interests of both buyers and developers.Registered developers who fully comply with RERA norms earn greater confidence of financial institutions for lending purposes.

Moreover, the trust of buyers in regulated developers will lead to rise in home sales, providing relief to capital-starved developers by improving their cash flows.

Gurugram RERA is not indiscriminately allowing refunds in case of delayed projects to ensure that the interests of large numbers of home buyers who have invested in the projects, are not jeopardized.

Instead, a balanced growth-friendly approach is adopted to ensure that projects get completed.

HRERA Gurugram, according to Khandelwal is evolving a mechanism under which real estate developers and industry bodies could be roped in to complete unfinished projects.

REGULATION

UP RERA TO ADOPT ABANDONED PROJECTS Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has resolved to adopt projects that have been abandoned by builders midway and whose completion date has expired. The regulatory body has estimated that there could be 100 such abandoned projects in the state’s NCR cities.

Following a meeting with officials of the Greater Noida Industrial Development Authority (GNIDA), the UP-Rera officials have announced about drawing a real estimate of the number of projects which have been left midway by builders and have exceeded their completion dates so as to draw a resolution.

“According to UP - RERA member Balwinder Kumar, there are about 100 such abandoned projects where the builders have deserted the projects midway and are untraceable. Many of

these projects have also expired their completion dates. UP- RERA, as per Balwinder Kumar, will now find a way to adopt such projects and resolve their fate. UP RERA hopes to soon start work on these projects .Moreover, UP-RERA has also appealed to all developers who have not come forward to get their projects registered with the real estate regulator to do so at the earliest, or face a fine to the tune of 10% of the project cost .

UP- RERA had so far not exercised this clause in NCR, though there is a

provision in the UP-Rera Act to impose a 10% fine for not registering a project.

But now, the Authority has decided to start sending notices to errant developers. By UP - RERA estimates, there could be 300 projects that have dodged UP-Rera registration and would now be sent notices . According to UP_ RERA statistics, there are 4850 NCR- related cases pending before the regulator and in order to expeditiously resolve these cases, the Authority has set up a third RERA bench.

Punjab RERA Cracks Down on Unapproved Plot Sales The Real Estate Regulatory Authority (RERA) of Punjab has penalised Chandigarh-based Gupta Builders & Promoters (P) Ltd for selling real estate inventories at two of its projects without having even the basic statutory approval such as Change in Land Use (CLU), forget about registering with the RERA. The full Bench of RERA has imposed a penalty of Rs 1.5 crore on the developer for its project ‘New Chandigarh Smart City’ in New Chandigarh, spread over 160 acres . It is a mixed used development, comprising of residential, commercial and hospitality developments. It also houses a school. This is highest-ever penalty imposed by the Authority against any developer in the state.

The second project, ‘Çity Central’, being developed by the same promoter at Kishanpur, near Dhakoli in Zirakpur, involves six acres of land and includes both residential and commercial space.

Around 40% of the inventory has been already sold. The real estate regulator

has imposed a penalty of Rs 75 lakh on the developer for this project.

“This is the first-of-its-kind case. All the previous cases which came before the Authority were mainly related to alleged selling of properties without mandatory registration of their projects with the Authority or not complying with the order. But despite the project being a huge one, it doesn’t have basic statutory approvals,” according to RERA-Punjab Chairperson Navreet Singh Kang .

For any real estate project, the CLU is the first requirement from where the entire development starts, and other steps such as approval of layout and building plans and grant of licence to develop

a colony follow in sequence. For this project, they did not have even this basic approval.

As part of its crack down on illegal sale of properties in Zirakpur and New Chandigarh, the Punjab Real Estate Regulatory Authority (RERA) has inspected various sites to detect violations of the provisions of the Act. Meanwhile, unhappy with the judgement, Anupam Gupta of Gupta Builders & Promoters plans to approach the Real estate Appellate Tribunal. The promoter has already launched 14 real estate projects in the Tricity and had followed the due process in all projects.

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FACE TO FACE

TIME AHEAD FOR INSTITUTIONS OWNED REAL ESTATE - Vinod Behl The global property consultancy- CBRE has completed 25 years of its operations in India.

Amid silver jubilee celebrations, the numero uno property advisory has chalked out an aggressive business plan for high growth, consolidating the existing business lines and tapping newer asset classes.

Anshuman Magazine,

Chairman & CEO, CBRE India, South East Asia, Middle East & South Africa talks about the company’s journey so far, future plans and prospects of real estate ahead after 5 years of reforms. Excerpts.

After 25 years of its India operations , how has been the performance of CBRE and its future growth strategy?

After this long journey in India, we find it a key market for our growth. This is clearly demonstrated by the numbers. At a time when real estate is still trying to regain earlier strength, CBRE has started the new year with excellent numbers, clocking 20% growth in the year 2018.

What is no less significant is that we have reaffirmed our leadership position across all business verticals.

Today as part of CBRE India footprint , we are managing more than 240 msf of real estate. We have arranged $ 241 billion capital for our clients. We have over 5000 consultancy

34 | PropTOQ

assignments and valued more than 82000 properties.

We have provided 600 msf of project management and have serviced over 420 clients and have 1500 sites under facility management .In 2018 itself, our Advisory & Transaction Services business has transacted more than 240 msf.

Going forward, we will be adopting a more aggressive business strategy. For the expansion of our business and to achieve higher growth targets, we will be hiring 3000 people this year.

Residential real estate is still recovering from the slowdown , why have you entered the housing brokerage business?

That’s why we have not entered into this segment as

developers - it is very tough business. But of late there has been pick up in residential real estate with lot of activity in affordable housing segment as developers are meeting the market demand by coming up with affordable products. We have entered into residential marketing business and want to expand this business line in a big way. We have built a large marketing team and would be leveraging on our digital outreach especially as we have a database of millions.

What will be your focus in residential real estate brokerage business?

Our focus will be on affordable premium segment. We have the ability to manage entire life cycle - acquiring land and building and marketing real estate. Today in a regulated

FACE TO FACE environment, the challenge is to deliver quality project in stipulated time with cost optimization. Our project management team takes care of all this. We will also be helping developers by way of raising money for them from banks and financial institutions.

What about leveraging new asset classes ?

The new emerging asset classes are very promising. There is lot of activity on logistics and warehousing front. We have already positioned an all- India team to focus on this fast growing segment. We are also focusing on newer area of Co Living.

We have a full- fledged team for this.

Senior living is another emerging asset class for which we have a full team in London. Our job is to get institutional money for investment into senior living. Education vertical in real estate is also coming up well.

Global funds are looking at India as a big market in education. They are already here buying into schools.

Similarly, health care is another promising asset class being eyed by foreign funds. Globally, it is a big practice. Going forward, we will see institutions owned real estate like hotels, hospitals and shopping malls.

In the wake of NBFC crisis, how do you see the real estate funding/ investment landscape emerging ?

Real estate was adversely impacted as NBFCs were having high exposure to developer funding .

But with reforms and other policy interventions, foreign institutional and PE investors have been showing greater interest in Indian real estate.

Some of them have joined hands with big and professional developers.

In view of this, situation is getting back to normal and good developers with excellent track record are not finding difficulty in sourcing funds.

What more return expectations of lenders have rationalized to be more realistic.

PropTOQ | 35

FACE TO FACE

The new emerging asset classes are very promising. There is lot of activity on logistics and warehousing front. We have already positioned an all- India team to focus on this fast growing segment.

Education vertical in real estate is also coming up well.

Global funds are looking at India as a big market in education.

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How do you assess the potential of REITs as new funding vehicle?

The successful listing of India’s first Blackstone- Embassy has raised investors confidence and opened doors for other such listings especially as global institutional investors like Blackstone, Brookfield etc have been owning income producing office assets in a big way. And it’s not just big developers, even small developers are assembling REITable office portfolio.

Lastly, how do you see the postpoll outlook for real estate sector ?

Over the last 5 years, Modi government may well be credited with several policy overhauls and structural reforms to lay strong foundation for the real estate sector to usher in transparent regulatory regime.

And now with the same progressive government coming back to power, there will be renewed push to reforms with newer policy interventions which will boost the growth prospects of the sector.

Otherwise also, CBRE report paints promising picture of real estate. About 200 msf of real estate space will be added under office, retail, residential and logistics verticals . We have seen healthy absorption of 47 msf across 9 major cities in 2018. And over the next one year, 40 msf of new office space will be added. On the residential front prices have corrected and sales are picking up as developers are coming up with affordable housing projects due to incentivised policies of the central government to promote lowcost housing. It is also a good sign that both institutional and retail investors are coming to terms with reasonable returns.

LAW

BIASED BUYER AGREEMENTS ARE ILLEGAL

Buyer agreements framed by real estate developers which are biased against home buyers are illegal . The differing rate of penalties for builders and buyers in such discriminating agreements are also in contravention of the law.

Biased or one- sided agreements enforced by the builder fall under unfair trade practices of the Consumer Protection Act and real estate developers simply can not have such biased agreements. This ruling of the Supreme Court has a far reaching implication in terms of providing a level playing field to the home buyers and safeguarding their interests.

A recent judgement by the two -judge bench of Justice U U Lalit and Justice Indu Malhotra of the Supreme Court upholding the judgement of the National Consumer Disputes Redressal Commission (NCDRC) asking the developer of a biased agreement to refund the entire cost of a flat to the buyer for inordinate delay in handing over possession of the property, has come as a saviour for all the home buyers reeling under onesided agreements . While affirming the NCDRC’s judgement, the twojudge bench termed the agreement that the builder had signed with the buyer as “wholly one-sided and unfair� as there were stark incongruities between the remedies available to both the parties.

There has been a common practice with the builders to put one- sided and discriminatory clauses in their agreements . And the aggrieve home buyers were made to knock at the doors of Real Estate Regulatory

38 | PropTOQ

Authority (RERA), National Company Law Tribunal (NCLT) and National Consumer Disputes Redressal Commission (NCRDC) to ensure that the equities between the builders and flat buyers are balanced. Builders have been playing unfair game by putting discriminatory and unfair clause in the Buyer Agreement that gave them the right to charge almost double the penalty amount from buyers in case they defaulted or delayed payments.

On the contrary, if builders delayed the project for whatever reasons, their penalty rates were nearly half. But the apex court judgement has ensured a level-playing ground for both buyers and builders.

The Supreme Court ruling is a big relief for the home buyers as they have been at the losing end of delayed or stalled projects. They were bearing the brunt of both the Equated Monthly Installment (EMI) to the banks as well as the rentals of the house they lived in.

It has been seen that the rates of interest per annum vary from builderto-builder or even project-wise. The interest rates have been usually around 15 per cent for a buyer who defaulted on installment payment to the builder.

The construction agreements have also been giving the builder the right to nullify the agreement in case the buyer crossed his due payment dates by certain number of days post builder

reminders for payments.On their part,developers conveniently fixed the penalty charges at almost half of what buyers have to pay.

The penalty charge to be paid by the builders has been invariably fixed at around eight per cent though it varied from project-to-project and from builder-to-builder as well.

It has been observed that erring builders have been even adopting legal tactics to ensure that they did not end up paying penalty amount to home buyers in case of project delays Not just that, even if the builder failed to deliver the possession of the apartment within the stipulated time period, the buyer would have to wait for a period of one year after the end of the grace period before serving a termination of agreement notice.

Even after the said termination notice, the builder would have another 90 days to refund the amount. The SC ruling has however termed all this in contravention of the Consumer Protection Act. The apex court ruling not only offers a curative relief to home buyers suffering due to biased Buyer Agreements but also provide preventive relief to them by sending a strong message to real estate developers to avoid project delays and adhere to stipulated deadlines.

POLICY

HIGHER FAR FOR GREATER NOIDA PROJECTS In a policy boost to the existing or planned residential and commercial projects falling within a half-kilometre radius of Aqua Line metro stations in Greater Noida , a provision for an additional Floor Area Ratio (FAR) of 0.5 has been made over and above the existing FAR of 3.5, enabling the developers to add more floors to the projects.

Significantly, this norm for additional FAR in Greater Noida follows Noida where it is already available The proposed move is likely to benefit all real estate projects near the metro stations by allowing developers to leverage excess space to build additional towers

The additional FAR leading to creation of dense developments around metro stations, will help boost both residential and commercial development.

However, there is a catch to this policy as the new plan of additional FAR around metro-stations would be subject to UP RERA approval depending on structural sanctity of the building. As per the policy guidelines, In case of residential real estate projects, where units are sold with approved plans and projects are registered with the regulatory authority, necessary permissions would be required from all approving.

CONTRACTORS ELIGIBLE FOR CONCESSIONAL GST ON AFFORDABLE HOMES Maharashtra’s Authority for Advance Rulings (AAR) has ruled that besides developers, contractors will also be eligible for the concessional GST rate on low- cost housing, This ruling comes in the backdrop of Puranik Construction Pvt Ltd, filing an application before the AAR over a proposed civil construction contract to be entered into with a developer, Puranik Builders Ltd, for the construction of a residential project at Nerul, Navi Mumbai.

The AAR had to decide on whether or not the contractor was eligible for concessional GST at the rate of 12 per cent (effective rate is 8 per cent after abatement of one-third for the land value).

The petitioner claim that as per GST notification, the

benefit of concessional duty is not restricted to developer, rather it is available to any person/entity supplying works contract services for low- cost homes, was accepted by tax authorities. However, it has been made clear that for the remaining commercial units, no concession should be given. .Moreover, the benefit of reduced rate would be available to the applicant only in the cases of supplies made after January 25, 2018 (date of issuance of concerned notification).Also, the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area up to 60 sq m. For commercial units and housing units above 60 sq m, the applicant would be required to pay GST at the normal applicable rate.

SEBI’S NEW SUBSCRIPTION NORMS FOR REITS In a recent policy decision, market regulator, SEBI has amended the minimum subscription requirement for Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs). The amendment reducing the minimum subscription requirement is aimed at providing flexibility to the issuers for fundraising and easing the access of these investment vehicles to investors.

SEBI has cut the minimum subscription requirement together with defining trading lots for REITs and InvITs. As per the new amendment, REITs are now required to offer their units in lots worth at least Rs 50,000 in initial and follow on public offers. The minimum value of a single lot has been pegged at Rs 1 lakh in the case of InvITs. Further, limits for aggregate consolidated borrowings and deferred payments, net of cash and cash equivalents, have been increased to seventy per cent of the value of the InvIT assets.

The amendments are aimed at providing flexibility to the issuers in terms of fundraising and increasing the access of these investment vehicles to investors. Besides, the trading lot has been defined in terms of the number of units. In addition to this, the leverage limit for InvITs has been increased to 70 per cent from the current 49 per cent, with a condition that those InvITs which raise their leverage beyond 49 per cent, will have to make additional financial disclosures along with specific details of available asset cover, debt-equity ratio, debt service coverage ratios, interest service coverage ratios and net worth.

The new policy amendment with regard to initial public offer and follow-on offer, makes it mandatory that the minimum subscription should not be less than Rs 1 lakh for InvITs and Rs 50,000 for REITs compared to current limit of Rs 2 lakh for REIT issue and Rs 10 lakh for InvIT issue. Further, the allotment to any investor shall be made in the multiples of a lot. It is to be ensured that for an initial listing, a trading lot should be of 100 units and during follow-on offer, each lot shall consist of such number of units in its trading lot as it had at the time of initial offer.

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FINANCIAL NEWS

HDFC BANK Q4 NET RISES 23% TO â‚š5885 CR

Private lender HDFC Bank has reported a 23 per cent jump in its net profit to Rs 5,885.12 crore for the quarter ended March 2019 on a healthy growth in its net interest income.The bank had registered a net profit of Rs 4,799.28 crore in the January-March quarter of 2017-18.Total income for the quarter ended March 31, 2019, stood at Rs 31,204.5 crore, up by 22.1 per cent from Rs 25,549.7 crore for the quarter ended on March 31, 2018, the bank said in a regulatory filing.

Net interest income grew by 22.8 per cent to Rs 13,089.5 crore in the last quarter of FY2018-19 from Rs 10,657.7 crore in the year-ago quarter driven by average asset growth of 19.8 per cent and a core net interest margin of 4.4 per cent.

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On asset front, bank’s gross non-performing assets (NPAs) were at 1.36 per cent of gross advances as on March 31, 2019, as against 1.30 per cent as on March 31, 2018. Coverage ratio as on March 31, 2019 was 71 per cent.Net non-performing

assets or bad loans were at 0.30 per cent of net advances against 0.40 per cent.

The bank board also approved raising up to Rs 50,000 crore through private placement of debt instruments in the next 12 months.

FINANCIAL NEWS

LICHFL posts 17% surge in net profit LIC Housing Finance (LICHFL) has reported a 17 per cent yearon-year (y-o-y) increase in net profit at Rs 694 crore in the fourth quarter March 31 2019, against Rs 594 crore in the yearago period. Net interest income (interest earned minus interest expended) was up 21 per cent at Rs 1,201 crore against Rs 989 crore in the year-ago period.

The company has successfully raised Rs15,000 crore through NCDs in FY19 amid liquidity stress which shows it can gain market share from its peers which are struggling with the fund crisis, said securities firm Narnolia.

Between FY17-19, higher-yielding and riskier non-core segments contributed 45 per cent of incremental AUMs. These non-core segments now form nearly 24 per cent of the book versus 16.4 per cent in FY17. LICHFL has consciously taken on more risk by favouring non-core (project and LAP) segments, as growth and margins in its core business (retail housing loans) compressed, said HDFC Securities.

DLF transfers Noida Mall to subsidiary for ₹ 2950 crore Real Estate major DLF has transferred its shopping mall in Noida to it’s subsidiary firm for Rs 2,950 crore, in order to pave the way for settling the dues of its joint venture company with Singapore’s sovereign wealth fund GIC. DLF owes Rs 8,700 crore to DLF Cyber City Developers Ltd (DCCDL), a joint venture company of DLF and GIC. It wants to settle these dues by September this year through transfer of rental assets and land parcels.

DLF has a 66.66 per cent stake in the joint venture firm, while GIC has a 33.34 per cent shareholding.

DLF has stated in a regulatory filing , that it has transferred its property, Mall of India, Noida, to one of its subsidiaries Paliwal Real Estate Ltd, in the ordinary course of business at an arm’s length consideration of Rs 2,950 crore, arrived on the basis of the valuation report of an independent valuer..

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FINANCIAL NEWS

ASK PROPERTY INVESTMENT ADVISORS INVESTS OVER ₹350CR IN PUNE Private equity firm ASK Property Investment Advisors has invested over ₹ 350 crore in a portfolio of residential and commercial projects of two Pune-based realty developers Paranjape Group and Naiknavare Group.

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The real estate private equity arm of the ASK Group invested Rs 275 crore in projects of Paranjape Group while Rs 75 crore was invested in Naiknavare Group’s projects.This is their third investment in Paranjape Group and second investment in Naiknavare Group “All these investments are in projects located in suburbs with proximity to job markets and access to social and physical infrastructure.

Our strategy is to recapitalize and deleverage projects of developers who are customer- centric with focus on product, quality and timely completion,” according to Amit Bhagat, MD & CEO, ASK Property Investment Advisors.

ASK made these investments through two of its funds--Real Estate Special Opportunities Fund and Real Estate Special Situations Fund. ASK Property Investment Advisors was set up by the ASK Group to manage and advise real estate dedicated funds.The fund raised its third domestic fund Real Estate Special Opportunities Fund of around Rs 1,400 crore in 2016 and had announced final close for its structured equity fund Real Estate Special Situations Fund of around Rs 898 crore in March 2018.

“Through our funds, we intend to provide our developer partners with

patient capital thereby enabling them in project completion, driving sales, generating better cash flows and increasing profitability,” said Sunil Rohokale, MD & CEO, ASK Group. “With these deals, we are reinforcing our philosophy of longterm partnership with experienced developers who have a strong track record of execution.”

Both Bhagat and Rohokale highlighted that Pune is witnessing a robust growth across various industries including information technology and IT-enabled services, auto and auto-ancillaries, manufacturing etc. All the factors including Pune’s proximity to Mumbai and other neighbouring satellite cities are leading to a high demand for affordable and midsegment housing and that has prompted ASK’s these investments.

Over the last three months, ASK Property Investment Advisors has invested around Rs 700 crore in real estate projects. In March, the company had announced concluding deals worth Rs 326 crore with QVC Reality Developers, Tridhaatu Reality and TVS Emerald part of TVS Group. These projects are located in Mumbai, Bengaluru, Chennai and National Capital Region (NCR). ASK Group manages assets of over Rs 48,400 crore as on March 31.

FINANCIAL NEWS

NHB nod to DHFL stake in Aadhar Housing Finance

Indiabulls Housing Finance Q4 net falls 7%

Embasy Office Parks to raise ₹ 3000 crore

According to Dewan Housing Finance Corporation Ltd (DHFL), the divestment of its stake in Aadhar Housing Finance Ltd is expected to be completed shortly following receipt of National Housing Bank’s prior approval.

Mortgage lender Indiabulls Housing Finance (IBH) has reported a 7% decline in consolidated net profit for the quarter ended March 31 to ₹1,006.15 crore from ₹1,082.23 crore during the same period of the previous year.

The home financier had disbursed over ₹7,300 crore of loans in the Jan-March period, twice of what it disbursed in Q3 FY19.

Embassy Office Parks, a joint venture between global investment firm Blackstone and realty firm Embassy Group, had raised ₹ 4,750 crore through REIT

In February, the special committee of DHFL’s board of directors had accorded approval to dis invest to BCP Topco VII Pte Ltd (acquirer), which is controlled by private equity funds managed by Blackstone, 23,01,090 (9.15 per cent) equity shares, the company’s entire shareholding held in Aadhar, according to stock exchange filing by DHFL. National Housing Bank has granted its prior approval for proposed acquisition of control of Aadhar, subject to conditions.

IBH closed March 2019 with cash and liquid investments of over Rs30,000 crore. On a year-on-year basis, the balance sheet contracted by 1.8% to Rs1.30 lakh crore as on March 31, while loan assets contracted by 1.4% to Rs1.2 lakh crore.

Embassy Office Parks, which recently launched India’s first Real Estate Investment Trust (REIT), has said it will raise Rs 3,000 crore through the allotment of secured nonconvertible debentures of Rs 10 lakh each on a private placement basis under tranche A.The debentures would be listed on the wholesale debt market (WDM) segment of the BSE. Embassy Office Parks did not mention where the amount would be utilised but sources had earlier said it would be used to expand commercial real estate business.The company had earlier announced that it has got an approval to raise Rs 3,650 crore in two tranches. It plans to raise another Rs 650 crore in tranche B.

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CORPORATE LADDER

JLL’S KEY APPOINTMENTS IN CHENNAI Siva Krishnan

Kanchana Krishnan

Siva Krishnan, an industry veteran with over 21 years of expertise in understanding business models and market dynamics across real estate assets and life cycles, has joined as Managing Director, JLL Chennai. Siva re-joined JLL in early 2018 and also heads the firm’s Residential Services, Developer Solutions and Strategic Consulting businesses. In his new role, he will drive all business lines in Chennai, and nurture go-to-market strategies to reinforce the firm’s capabilities. His innate understanding of India’s real estate space has propelled him to be a member of JLL’s India Leadership Council. He is also credited with founding and developing the B2C residential franchise for two of the largest IPCs in the country.

In his earlier roles, Siva was part of CBRE’s Country Leadership and was instrumental in building JLL’s residential arm.

Kanchana Krishnan has been appointed as Head – Markets and Retail, Chennai, to focus on further building successful JLL office leasing business. She will also Head Landlord Representation at the country level and spearhead the practice by coordinating with other Landlord Representative experts within the firm. A veteran in the Chennai real estate market, Kanchana is highly regarded in the fraternity and has a deep understanding of office, industrial, capital markets, land, project management and facility management. She brings to the firm 17 years of experience in real estate sector. In her previous assignment, she headed all businesses for Knight Frank in Chennai. She has also worked with DTZ (now Cushman & Wakefield), Equis India (UGL) and Chesterton Meghraj across various businesses.

MD, JLL Chennai

Head Markets & Retail JLL Chennai

New Leadership Team of CREDAI

Gupta, MD, Ashiana Housing, Narendra Kumar, Director, Kumar Builders, Boman Irani, CMD Keystone Realtors, R Nagaraj Reddy, Chairman, Zonasha Projects, Shekhar G Patel, MD, Ganesh Housing Corporation and Shanti Lal Kataria of Aditya Builders are the new Vice Presidents. Pankaj Goel, MD, Express Builders and Satish Magar Jaxay Shah Harsh Vardhan Anant Rajegwnka of Soyojit Patodia Infra have been respectively CREDAI- the apex body of private named as Secretary & Treasurer. real estate developers of India, Dr Najeeb Zackeria of Abad have announced the new team Builders, K Sriram of Enclave Infra, for the year 2019-20. Satish Magar Ramandeep Singh of Alliance ,MD, Magarpatta Township has Residency, Naveen Mehta of Shanti taken over the baton from Jaxay Realty, Chandrakant Rajput of Shah as the President. Meanwhile, Rameshwaram Group have been Jaxay Shah has been made the chosen as new Joint Secretaries. new Chairman of CREDAI. Harsh Bani Anand, Director, ATS Group is Vardhan Patodia CMD, Unimark National Convener, Women.

Group is the President Elect .Vishal

Anarock Announces New CEO, GCC As part of its international expansion plans, Anarock Consultants, after setting

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up its operations in Dubai, has forayed into Abu Dhabi.

Shajai Jacob, formerly Marketing Head of JLL, has been designated as the CEOGCC.

JLL Sri Lanka Head Jerry Kingsley has been given the dual role in JLL, heading Capital Markets in South India and leading operations in Sri Lanka.

With over 13 years association with the firm, Jerry has played multiple roles across business lines and asset classes. His multidisciplinary experience include almost all facets of the real estate brokerage business like Tenant Representation, Developer Representation, Industrial & Warehousing, Investment Sales, Land Divestments, Land Acquisitions, Joint Development Structuring, Capital Markets and Feasibility.

Jerry has also set up, expanded and streamlined business lines like Land, Capital Markets and Industrial from ground up into profitable teams with steady revenue growth and as market leaders in Chennai.

New Interim CMD of NBCC The government has tasked Shiv Das Meena, Additional Secretary Housing as the interim CMD of state run infrastructure major, NBCC. He replaces Anoop Kumar Mittal who demitted office after he was denied extension till his date of superannuation.

New CEO for Nitesh Estates As part of its plan to enter newer businesses and strengthen its leadership team, Nitesh Estates has roped in former Chief Operating Officer of Manipal Hospitals , Rakesh Singh as its new Chief Executive Officer.

Kamal Dhaluka, formerly with Godrej Properties & Adani Group has joined Nitesh Estates as Chief Financial Officer.

INTERNATIONAL ROUND UP

GLOBAL PROPERTY MARKETS FACING BUBBLE RISK Stained affordability of housing markets is often perceived as a sign of their success - that buyers and investors are willing to pay all it takes to own a piece of coveted real estate.

However, over-valued property is telling of the problems a real estate market faces in present.

It is also indicative of disasters in the making.

“High house prices are not a sign of city’s success, but a sign of failure to deliver the housing that it’s citizens need,” says German economist Oliver Hartwich, who is also the executive director of The New Zealand Initiative.

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INTERNATIONAL ROUND UP Worse still, great expectations about returns, grand capital infusion from foreigners and a liberal monetary policy are together seen giving birth to property markets that are more and more vulnerable to what is known as “bubble risk”.

The term bubble refers to a substantial and sustained mispricing of an asset, the existence of which cannot be proved unless it bursts, says the UBS Global Real Estate Bubble Index.

The index gauges the risk of a property bubble on the basis of decoupling of prices from local incomes and rents and imbalances in the real economy, such as excessive lending and construction activity. A rating over 1.5 at the index is reflective of a bubble risk while a rating between 0.5 and 1.5 is indicative of overvaluation.

In its 2018 edition, the index has listed six major housing markets that face this risk.

Hong Kong (China) Index score: 2.03

In this “chronically undersupplied” Asia market, property has become so wildly expensive over the years that ownership has become a distant dream even for those who earn twice the average national income. One requires 22 years of their income to afford a 650-squarefoot (sqft) flat here as against 12 years a decade back.

“Since 2008, prices have doubled (they continued to increase by an annual rate of almost 10 per cent since 2012) while rents have gone up by 15 per cent and incomes have remained unchanged in real terms,” says the survey.

While indicating that a mild price correction is a possibility, the index says pent-up investor demand and low interest rates would keep pumping up the demand for Hong Kong realty. Increased regulatory intervention could only make matters worse.

Munich (Germany) Index score: 1.99

When compared to Hong Kong, a skilled worker would take much less time, eight year to be exact, to afford a 650-sqft house near Munich city centre. However, housing affordability in Munich has been deteriorating consistently, with prices doubling in the last decade and still continuing on an explosive trajectory. Nominal rents jumped nine per cent last year, reflecting record low vacancies, shows the index. A correction is likely if interest rates pick up at a time when construction activity has increased, it says further.

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INTERNATIONAL ROUND UP Toronto (Canada) Index score: 1.95

Price dynamics have slowed considerably in this Canadian city starting the second half of 2017 after the government launched several measures that year, including higher taxes on foreign investors & vacant property and stricter rent control norms.

Consequently, it would require a skilled worker six years income to buy a property near the city centre, the lowest among cities that are stating at a bubble risk.

That notwithstanding, property prices are still 50 per cent higher than they were five years ago. For the correction course to continue, the Canadian Dollar must stay strong, curbing demand from foreign investors, the index shows.

Vancouver (Canada)

Index score: 1.92

Unlike Toronto, rates of property in this Canadian city increased in double digits causing major imbalance.

Rates of property in Vancouver have in fact doubled in the past 12 years.

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“As the government tries to contain speculation, the tax burden is rising for high-end property buyers and foreign purchasers,” says the survey.

While stating that the imbalances are mitigated somewhat by income growth and above-average rental growth of 5–7 per cent over the last four quarters, the index says that the already strained affordability will become an acute issue if mortgage rates rise further.

Amsterdam (The Netherlands) Index score: 1.65

Bubble risk soared in Amsterdam, where a skilled worker would now require 10 years of his income to afford a home. Prices have in fact soared 60 per cent higher than their 2013 level.

“The city’s housing price rise has more than doubled nationwide averages in the last five years. Given the highly strained affordability, a tightening of lending conditions might end the boom rather abruptly,” says the survey.

London (The UK)

Index score: 1.61

For the second time, London’s index score declined on strained affordability, political uncertainties and unfavourable tax environment and falling prices. Rates have fallen five per cent since mid-2017. However, the time one would need to afford a property in this old city, 15 years that is, is shorter only than of Honk Kong.

Housing continues to stay unaffordable for inflationstricken Londoners because government scheme to benefit first-time homebuyers seem not to be working effectively in the UK capital.

For investors from outside, this, however, is an opportunity.

“From the perspective of foreign investors, house prices in dollar terms have fallen by 10 per cent since 2015, and could constitute an attractive buying opportunity,” says the survey.

VOICES

Keki Mistry

Gautam Hari Singhania

M Ravi Kanth

Housing is more affordable than what it used to be especially with property prices remaining stagnant. We could see property prices inching up over a period of time with inflation , in places where there is no over supply.

As a latest entrant to real estate business, I am looking at volumes. I am committed to create affordable housing. I have no ego to go for either 500 sft or 2500 sft apartments.

As government’s key partner in financing urban housing and infra in 201819, Hudco has disbursed Rs 31008 crore, registering a growth of 87% over the previous year.

Vice Chairman, HDFC

CMD, Raymond

CMD Hudco

If the project is at a right location, the brand is right and units are affordable, that project sells well in the market.

India is a long - term investment and one of the biggest markets for IKEA. Our ambition is to provide affordable, good quality, valuefor- money and well designed home furnishings and become a truly inclusive brand.

Anand, Piramal

Peter Betzel

Founder & Non Executive Director, Piramal Enterprises

CEO, IKEA India

Sameer Gehlaut

Ashish Gaekwad

Parveen Kumar Gupta

I am willing to give up real estate business for financial services because my heart and passion lies only in financial services.

One of the key lessons from booming markets like India is to constantly innovate to offer the best possible technology at a competitive price point.

We are targeting 15% growth in the real estate portfolio against 12-14% overall growth in the retail book.

Chairman, Indiabulls Group

MD, Honeywell Automation

Managing Director, Retail & Digital Banking, SBI

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DESTINATION REPORT

BANGALORE HSR LAYOUT

A RESIDENTIAL HOTSPOT Long developed by the Bangalore Development Authority (BDA) , HSR Layout, strategically located between major IT hubs including Electronics City, Outer Ring Road and Sarjapur Road, has transformed into a major residentialcum-commercial hotspot of Bangalore, largely defined by sizable bungalows, small builder-floor apartments, wide roads, several small parks and well-established retail options.

BHK-TYPE AVERAGE RENTAL PRICES (INR) Source: ANAROCK Research

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1 BHK

2 BHK

3 BHK

₹15,000

₹18,000

₹25,000

DESTINATION REPORT HSR Layout’s proximity and easy connectivity with major IT hubs make HSR Layout a preferred residential destination for IT professionals working in nearby Infotech hubs. There is no dearth of rental options here which are more affordable than in HSR Layout’s neighbouring IT/ITeSdominated markets. Its well-developed social and physical infrastructure also make it a desirable residential option, both from a purchase and rental point of view. Properties here are spread over plot sizes between 600 sq. ft. to over 4,000 sq. ft, facilitating all segments of people to live here.

Residential Options HSR layout has varied property types since there are multiple sizes of plots available (starting from as small as 600 sq. ft. area).

Due to the variation in type and size of the properties, the residential rental prices also vary within the locality.

The average rentals for a 2BHK in HSR Layout range from INR 15,000 - 30,000/ month depending on size and type of property.

Most of the properties in HSR Layout are independent houses, and apartment complexes are still limited. Some owners of plots and independent houses have, in the past, converted these into builder floor apartments and rented them out. There is considerable rental demand, primarily for 2 BHK and 3 BHK flats.

With increasing number of start-ups in Bangalore, real estate traction in micro markets like HSR Layout is on a clear upward trajectory. In fact, this market has emerged as a prominent start-up hub of the city in recent times. This prompted steady growth in both residential and office space rentals.To reap good rental returns, many independent houses have been rented out to prominent retail brands and small-size commercial offices which has helped in maintaining steady rental growth.

Bangalore’s start-up revolution initially boosted the realty prospects of thethen affordable market of Koramangala.

However, over time, high demand for retail and commercial spaces made Koramangala one of the most expensive neighbourhood for new establishments.

HSR Layout has deftly caught the spill-over demand for both residential and office spaces from Koramangala, as both housing and office rentals are more affordable here.

Commercial Development Today, start-ups keen to stick close to centrallylocated Koramangala prefer to set up a shop in HSR Layout.

Since HSR Layout was developed by the BDA as a residential destination, it did not attract large office space developers. In fact, the growth of the commercial segment has been quite haphazard and unorganized. With residents vociferously protesting against the mushrooming of commercial space in the area, several office spaces had to shut down in recent years.

Today, the area hosts several boutique corporate offices and a handful of larger office spaces.

HSR Layout’s predominantly small-sized office spaces were not, by and large, created by prominent developers but rather by owners of large independent bungalows who converted these into office spaces – largely for start-ups.

In fact, e- commerce biggies like Paytm and Nobroker started operations from HSR Layout and moved out from here only after they went into accelerated expansion mode.The major companies currently occupying office spaces here include Udaan, MoveinSync, NIIT Technologies, NestAway, Tracxn Technologies, Cars24, simplilearn and Vedanta.

Retail Development

This micro market’s proximity to IT hubs like Electronic City and ORR as well as to Koramangala’s highly-developed shopping areas led to its own retail evolution. Today, 27th Main Road at HSR Layout has emerged as a prominent high street shopping destination.

The absence of a big mall within HSR is compensated by its high street retail along with multiple F&B options. Major retail establishments are Max Fashion, Nike, Adidas, Reliance Trends, People, Pai International Electronics, United Colors of Benetton, Cotton World, etc. F&B and healthcare establishments include Star Bazaar, MK Ahmed Retail, Health & Glow, Grand Super Market, Namdhari’s Fresh, etc.

Residential Growth Prospects

As per ANAROCK data, merely 3,700 new units were launched in the area between 2013 and 2016. There has essentially been no new supply added since 2017 till Q1 2019, apart from some small-sized apartments (with <10 units each) by local developers.

The current unsold stock in the area is approx.

700 units, while the residential prices for apartments range between INR 4,150 to 6,500 per sq. ft.

Due to paucity of large tracts of land within the core of HSR Layout, some builders are now broadening the horizon by launching projects towards the area’s periphery (referred to as HSR Extension).

- Prashant Thakur PropTOQ | 51

ALLIED SECTOR NEWS Construction equipment major JCB is gearing up to set up a new unit with an investment of 650 crore to cater to the emerging demand.

This sixth unit of JCB will come up in Vadodara, Gujarat, essentially to manufacture engineered components and sub -assemblies for JCBâ&#x20AC;&#x2122;s many overseas factories.

The new facility, complete with most modern laser cutting, welding and machining technology will have a capacity of processing 85,000 tonnes

JCB TO SET UPA â&#x201A;š650 CRORE PLANT IN VADODARA

of steel annually that will add to the existing capacity of JCB plants in Delhi, Pune and Jaipur, with a network of over five dozen dealers and 700

outlets across India, according to Vipin Sondhi, MD & CEO, JCB India.

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ALLIED SECTOR NEWS

Pepperfry - Bank Bazaar tie up for home renovation loans The furniture and home products marketplace,Pepperfry has joined hands with personal finance marketplace, Bank Bazaar to offer its customers personal loan facility to refurbish their homes. Those looking for loans to renovate their homes can avail these loans at Pepperfry’s Studio outlets across the country.

According to Mihir Kulkarni, Head – Studio Innovation, Pepperfry, this arrangement will provide multiple home upgradation loan options from leading banks in India to help people furnish and renovate their homes.

Aparna Mahesh, CMO, BankBazaar believes that through this partnership with Pepperfry, customers will be able to access the right , simple and easy financing option.

H&R Johnson to focus on mid- range products to drive growth On the back of policy push to housing, the prime sanitary ware player, H&R Johnson has left behind industry’s lukewarm growth in the past 2-3 years, is looking ahead to promising times , with good demand growth from smaller towns. Pinning hopes on growing income levels in the non- metro towns, the company is lining up a strategy to drive faster growth through mid- level range of sanitaryware products .

Underlining company’s strategy of tapping non- metro urban centres to beat the slowdown of last couple of years and achieve higher growth levels, H&R CEO - designate , Sarat Chandak, believes the market will revive towards the end of the year, particularly driven by strong demand from the nonmetro towns .The company that has a six percent share in the tiles and sanitaryware products market, pegged at roughly Rs 30000 crore, has put a strategy in place to attain a CAGR of about 25 percent over the next 2-3 years. Especially as it expects the industry growth rate to triple by the turn of the year with improvement in macro-economic factors.Keeping this in view, the company has chalked out plans to set up over two dozen exclusive display centres pan India by the end of the year.

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KURL- ON ACQUIRES SPRING AIR Leading mattresses maker Kurl-on, has acquired US company Spring Air that specialises in orthopedic bedding products.

According to Sudhakar Pai, Chairman & Managing Director of Kurl-on, the Rs 70 crore acquisition through share-swap deal, has been done in view of company’s expansion plans. With this acquisition, Spring Air and Englader brand of mattresses will now be under Kurl-on . The amalgamation of Spring Air with Kurl-on will add two more manufacturing facilities of Spring Air to already existing 10 facilities of Kurl-on spread across Karnataka, Odisha, Madhya Pradesh, Gujarat and Uttarakhand.

The acquisition of Spring Air which is in line with Kurl-on’s aggressive expansion strategy on both product portfolio and retail front, will build on Kurl-on’s presence in the premium bedding segment, besides enabling the company to tap the fast growing demand in the hospitality sector. As part of the deal,Spring Air’s product portfolio of niche, specialised bedding products in the premium and luxury category will now be distributed across Kurl-on’s over1,300 exclusive franchise outlets and over-7,000 multi-brand outlet across the country, in addition to its 93 Kurl-on Home Komfort stores.

Spring Air’s 400 high end retail stores will also carry on distributing these products.

Pai believes that this acquisition will help Kurl-on attain revenue share of Rs 2,000 crore in the mattresses industry currently pegged at Rs 10000 crore.

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INTERIOR TRENDS

DESIGNS FOR VIBRANT, HAPPY & PRODUCTIVE WORKPLACES Akshay Lakhanpal

Regional Managing Director, Space Matrix India Over the years, the workplace has undergone a transformative change, with tech- driven contemporary designing making way for a vibrant, warm, fun - filled and productive offices.

We outline key workplace design trends that are changing the face of modern day office.

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INTERIOR TRENDS Ageless Designs

Workplace Wellness

To make the work environment warm & homely, the trend of blending hospitality and residential elements into office design is still prevalent, with look and feel more relatable to larger employee base. And as the work profile demands that organizations hire across the skill and age spectrum, it is hence important to create ageless designs which appeal to larger audience. The office designs continue to feature homely nooks with each corner to be personalised, giving a joyous touch to the workplace, making users enjoy spending time in the office.

As work- life balance gains more significance, companies are moving away from purely functional spaces that give priority to productivity above everything else and are instead shifting focus to employees well being. With rising air pollution in cities, workplaces are designed with centralised air purification system for better control on the pollutant across the office. Light design plays an important role in not only employee wellness but also his productivity level.

With advancement in lighting technology, indoor office lighting can be tuned to have maximization of natural light in the work environment. This not only enables an employee to concentrate better but more importantly feel less tired at the end of the day. The modern workplace designs also take care of creating rejuvenation pockets supplemented by fitness activities and games to break away from work stress. This also creates a feeling of togetherness and collaboration, resulting in happy productive workplace with satisfied employees.

Tech Boost to User Experience Technology today plays a big role in workplace where tech savvy workforce easily adapts to new technologies. Thanks to tech- savvy offices, today, it is possible to give the power of control to every employee in the office to control oneâ&#x20AC;&#x2122;s environment in the office space, instead of creating a BMS room which is occupied by a technician. This enables an employee to change the lighting levels, remodel furniture, collapse walls to create a larger room, book a meeting room/workstation or change air conditioning temperature in the bay etc for their computer/phone itself, instead of calling the facility management team or raising a ticket. Thus everything from furniture to lighting to their copier are all inter-connected through IOT, holding a lot of promise at user level.

The workplace design can have an impact on employee retention. Properly design office can increase the engagement with the clients and enhance their experience of the brand.

Effective design can enhance the employee experience and engagement to create a more collaborative and problem solving culture. Incorporating brand ethos in the workplace design, can help enhance brand experience. Productivity of workplace can be enhanced by taking into consideration functional needs and team adjacency.

Office Design & Branding Office design and branding go a long way in creating brand awareness for the employees and the visitors alike. If the ethos of the firm are manifested into overall office design, they can yield some very strong tangible/emotional connects which would help build a brand as it is envisaged by the founders.

Design Aligned With Business Objectives Design thinking is gaining popularity in strategic decision making as it is possible to address some organisational business problems through office design.

PropTOQ | 57

IMPACT FEATURE

KONE INDIA LEADING THE WAY FOR SAFETY!

By Mr. Amit Gossain

MD KONE India & Chairman, CII Real Estate & Building Technology

Hi-rise buildings are becoming common in metro cities due to increase in population. From an Elevator Industry point of view, India is the second largest New Equipment Market after China. With growing number of Smart Cities, large number of buildings have both the Elevators and Escalators. Thus, KONE assures that the Elevators and Escalators which are installed, ought to be; incorporating all the safety norms. In today’s time, Elevators are no longer a luxury but have become an integral part of the buildings. With aging population, it has become inevitable.

Thus, the Elevator Industry is rampantly accelerating. Nevertheless, due to huge demand for the same, there are large numbers of Elevator companies in India, both in organised and unorganized sector.

India is a country where the sense of safety is not at its best, be it driving a car or walking on the streets or climbing stairs or getting off an Elevator / Escalator etc. So, in a way an individual is not that well-tuned when it comes to safety, whereas in most of the Western and Asian countries like USA, Singapore, people follow safety

guidelines very meticulously. Even though India has safety guidelines, but the citizens do not necessarily follow them.

KONE India ensures that the country should become a safer place altogether, not just in construction, real estate and elevator industry. It is essential to maintain safety, quality and efficiency in all our solutions.

KONE continuously works towards ensuring India becomes a safer country and people become more conscious about the safety parameters on various aspects. However, the entire process of implementing safety as a way of life takes time.

Many companies follow the global safety standards as well as the national safety standards and at the same time there are few who have still not taken safety norms seriously.

The reason behind this is the absence of the Lift Regulation Act in India.

Even after 8 decades, only about 10 States namely; Tamil Nadu, Kerala, Karnataka, Maharashtra, Gujarat, Haryana, Delhi, Himachal Pradesh, Assam and West Bengal have understood the importance and

enacted legislations covering both the installation and maintenance within their respective jurisdiction.

It is thus important for the Lift Regulation Act to be present in each state. Our customers look for reliable & safe solutions. With stronger R&D, engineering collaboration, and an expanded facility in India, we are serving the growing Indian market with even more innovative, safe, reliable, comfortable, and energyefficient ‘People Flow’ solutions. KONE follows absolutely high standards to ensure safety and has also approached the government for a unified country level lift act to have basic safety regulations in place.

Elevator and Escalator Association has approached the government to form one lift regulation act across india. This can be a standard act with minimal specifications, which must be followed to ensure safety amongst users of elevators & escalators.

KONE along with other world class companies in this field are very keen to have this implemented.

Safety vis-a-vis KONE At KONE, we have always believed in Safety First! It is one of the highest priority areas that’s embedded in our strategy. Our Elevators are designed to both maximize Passenger Safety and enable easy inspection of the equipment to ensure safe operations at all times. KONE aims to provide safety in general to everyone. We ensure that our safety policies are clearly communicated to the employees, sub-contractors to preclude deviations in any process. Risk Assessment and Regular Safety Audits are done at every stage. We want all our employees, users of our equipment and partners to return home safely every day.

As an ongoing practice, we inform

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our Team to be the ‘Ambassadors for Safety’ in India. When it comes to work, we have very stringent processes that are audited regularly to ensure that the safety norms are in place.

The monitoring systems are developed to make sure people follow the safety norms setup by the company. At KONE, we ensure we use Personal Protective Equipment’s (Helmet, Gloves, Eye Protection Glasses, Safety Harness etc.); Work Force must carry the Identity Card along with their Safety Passport, which are mandatory for the workers to use during the working hours.

This is done not only for the KONE staff but also for the sub-contractors working at the construction site. The

technicians are well trained at the KONE Training Centre. We also make sure that guidelines mentioned by the Government are followed strictly.

Though established builders are very particular about Safety, small scale builders are more conscious about the price. Hence they prefer equipments that are cheap, which does not have any inbuilt safety features or meet basic safety norms.

However, this trend is changing slowly as builders are starting to understand the importance of safety in vertical transportation equipment, which if not followed could be a safety hazard for the building users.

NEWS ETC.

INFRA PROJECTS COST OVER RUN TOPS 3.16 TRILLION

As many as 344 infrastructure projects, each worth â&#x201A;š150 crore or more, have shown cost over runs to the tune of over â&#x201A;š 3.16 trillion owing to delays and other reasons.

According to the latest report of December 2018 of the Ministry of Statistics & Programme Implementation, total original cost of implementation of the 1424 projects was Rs 18,17,469.76 crore and their anticipated completion cost is likely to be Rs 21,33,649.81 crore, which reflects overall cost overruns of Rs 3,16,180.05 crore (17.40% of original cost). Of these 1,424 projects, 344 reported cost overruns and 384 time escalation.

According to the report, the expenditure incurred on these projects till December 2018 was Rs 8,06,997.78 crore, which is 37.82 per cent of the anticipated cost of the projects.However, it said the number

of delayed projects decreases to 326 if the delay is calculated on the basis of latest schedule of completion.

For 686 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of 384 delayed projects, 113 projects have overall delay in the range of 1 to 12 months, 61 are delayed by 13 to 24 months, 101 reflect delay of 25 to 60 and 109 projects show 61 and more of delay. The time overrun in these 384 projects is 44.78 months.

months months average delayed

The brief reasons for time overruns, as reported by various project

implementing agencies, are delays in land acquisition, forest clearance and supply of equipment.Besides, there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others, the report said.

It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported.

PropTOQ | 59

NEWS ETC.

PNB Housing Credai deal to up skill construction workers In a bid to upgrade the skills of construction workers so that they meet global benchmarks, PNB Housing Finance (PNBHFL), has signed a Letter of Intent (LoI) with the Confederation of Real Estate Developers Association (CREDAI) CSR Foundation.

As part of this initiative, PNB Housing Finance and CREDAI CSR have collaborated with eight skill institutes to roll out the programme in select cities across 15 States to train 13,000 construction workers on-site and off-site in India. Andhra Pradesh, Bihar, Gujarat, Delhi, Jharkhand, Karnataka, Madhya Pradesh, and Uttar Pradesh are among the States to be covered under this initiative. “With this partnership, we believe that we will be able to make construction workers enhance their skills, earn better wages in times to come and, thereby, upgrade their lives and families,” said Sanjaya Gupta, Managing Director, PNB Housing Finance.

In its five-year partnership with CREDAI, PNBHFL has so far trained 27,500 candidates as part of this intervention. The company provides skill training in masonry, bar bending, shuttering, electrical work, painting, welding, fabrication, and plumbing.

Centre notifies taking over of NHB The government has issued a notification taking over the National Housing Bank (NHB) after buying entire stake for Rs 1,450 crore from the Reserve Bank of India (RBI).

With the exit of RBI, NHB, has become a fully government-owned entity. The Central Bank was holding 100 per cent stake in the NHB, the housing finance regulator. The move is part of ending the cross-holding in regulatory institutions and follows the recommendation of Narasimham-II committee report of October 2001 and the RBI’s own discussion paper on the same, titled ‘Harmonising the Role and Operations of Development Financial Institutions and Banks’.

The decision to establish NHB was announced in the Budget 1987-88. Following that, the National Housing Bank Bill, providing a legislative framework for the NHB, was passed by Parliament in the winter session of 1987 and it became an Act on December 23, 1987. The National Housing Policy of 1988 envisaged setting up of the NHB as the apex institution to promote the housing sector.

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PLAN TO LINK PHASE - 3 METRO WITH RRTS The Ghaziabad Development Authority (GDA), in its revised report, has sought that one of the stations on the metro route should be integrated with a station on the Regional Rapid Transit System (RRTS) corridor near Sahibabad.

Seamless connectivity in Delhi and the National Capital Region (NCR) will soon no longer be a dream.

If the plan by the GDA goes through, then the Delhi Metro Phase-3 may be linked to the upcoming Delhi-Ghaziabad-Meerut Rapid Rail Corridor. GDA has reportedly asked Delhi Metro Rail Corporation (DMRC) to prepare a revised Detailed Project Report (DPR) for Delhi Metro Phase III route between Noida Electronic City and the Mohan Nagar metro station. In the revised report, the GDA has sought that one of the stations on the metro route should be integrated with a station on the Regional Rapid Transit System (RRTS) corridor near Sahibabad.

Sahibabad will be one of the elevated stations on the inaugural corridor of the RRTS project, that is the Delhi-Ghaziabad-Meerut Rapid Rail Transit Corridor.

For the two networks to be integrated, the GDA has asked for them to be built closer to each other so that a sky walk can be created for the linking. The revised project report is expected to be submitted by June.

The idea of integrating the Vasundhara Sector 2 metro station, on the Phase -3 corridor with the proposed

RRTS station at Sahibabad was discussed and the GDA wishes to connect the two for the seamless access of both services.

This integration would also mean that both the nodal agencies, namely, the National Capital Region Transport Corporation (NCRTC), which is implementing the RRTS corridor, and the DMRC will have to make changes to their existing plans.

According to the present outline, the distance between the Sahibabad RRTS station and Vasundhara Sector 2 is around 1.6 km and it would not be possible to construct a sky walk of that length to connect the two stations. So, NCRTC and DMRC will have to shift their RRTS and metro stations, respectively, closer to each other so that the distance between the two comes down to about 300350 metres.

The RRTS network is a regional transit mass transporting system which will connect the nodes of the National Capital Region (NCR). The first corridor planned under this, which is the DelhiMeerut corridor will reduce travel time between the two cities to just one hour, once operational. The other two corridors are Delhi-Gurugram-Alwar and Delhi-Sonipat-Panipat corridors.

PRODUCT LINE

SUMMER TREAT FROM FENESTA This product variety has airtight sealing to prevent the conditioned cold air from escaping out and hot air from flowing in to reduce the airconditioning costs. It’s double sealed and has multipoint locking system to ensure that dust has no entry passage into your house.

Fenesta’s new range requires low maintenance as they are

termite & corrosion resistant and require no paint or polish.

In order to keep insects away from home while still allowing sufficient ventilation and sunlight inside, Fenesta offers option of insect meshes.

Bringing yet another refreshing edge to the exclusively designed products for summers, India’s leading windows and doors brand Fenesta has rolled out an exciting new range which requires negligible maintenance, prevents dust buildup and keeps insects out.

PropTOQ | 61

FINTECH

ESCROWFFRR

NURTURING AN ENVIRONMENT OF TRUST Escrowffrr’s transparent payment solution mitigates the risk of fraud in transactions by holding funds securely in a secure, online, neutral, KYC authenticated escrow account and releasing them only when the deal is successful.

By Ashwin Chawwla With the r a p i d penetration o f technology in business dealings, companies face challenges in dealing with unverified customers in a growing faceless and paperless market.

Imagine an individual or a business supplying goods and services or life’s big purchase transaction like real estate to a buyer, who refuses to complete the deal.

Pertinently, 66% of India’s court cases today relate to property matters.

Against the backdrop of this huge trust deficit, a third party trusted account can help individuals, SMEs and businesses engage into hassle-free dealings.

Trustmore Technologies, a portfolio company of Nexus Startup Hub (JV of US State Department & UT Austin), offers an instant digital escrow account to ‘enable trust’ between two parties undertaking a business transaction. Through our award winning and proprietary technology, we bring leading banks escrow services to the personal devices of users.

Revolutionising the payment process Trustmore’s unique and patent pending payments technology protects both buyer and seller in a payment as money is secured from the buyer and released to the seller only when both sides are happy.

While escrow setting up by banks is very tedious affair and requires minimum 20 days with a minimum fee of Rs 100,000Rs 200,000 per transaction, we offer an instant digital escrow account at a cost ranging between Rs. 999+GST and Rs 5000 + GST irrespective of the value of the deal. Our escrow service protects the advance by placing it in a Reserve Bank compliant escrow account where it is replenished by buyer if the deal goes successful. It amounts to zero NPA business. We protect both buyer and

62 | PropTOQ

seller in any transaction by verifying the identity of both sides. Funds are held securely in the Escrowffrr account and are only released when agreed between parties.

What makes Escrowffrr tick Escrowffrr platform aims to transform contingent based transactions process, by providing full transparency on funds to all parties involved and acting as the centralized account for all transaction funds, thus reducing costs overall and providing additional fraud protection.

During a real estate transaction, Escrowffrr validates all parties and keeps parties updated at each step of the transaction process, allowing the distribution of pre-agreed completion funds to parties like the seller, estate agent fees and solicitor fees in real time.

Expanding footprint The company is looking into applying similar technology solutions to other growing industries like M&A market, car sales and e-commerce marketplaces.

The payment solution is set to transform various other industries by bringing transparency and efficiency to the payment while also reducing the risk of fraud. We are in negotiations with various online portals that face the problem of stuck payments. We are also in discussions with various banks for Escrowffrr integration. Through these alliances, we plan to penetrate to their

distribution channels like DSA network, wealth customers, SME borrower network etc.

Scaling up We believe Escrowffrr’s trusted payments network will fill the void in the payments industry for life’s big purchases, or when dealing with someone you don’t know.

While digital wallets are great for low value, we secure larger payments between users verified by Escrowffrr, which addresses a huge gap in the market. As SMEs grow in India, so will escrow accounts penetration. After all, why would anyone not deal with new customers if the risk of money is zero? As we proudly say, Na Chinta, Na Darr – Only Escrowffrr!

Competitive Advantage Escrowffrr has built an extensive network of consumers and intermediaries, and Escrowffrr Trust Advisors (ETAs). The company's 360 certified and trained channel make it easier for their clients to complete transactions, driving further ETA adoption. This generates a virtuous cycle, more join as they see Escrowffrr accepted by more intermediaries.

The biggest advantage of Escrowffrr is that we have built a large network of users and intermediaries. We plan to get all 23 scheduled banks to sign with us thus, offering a choice to the consumer.

The user can be banking with any bank or making a payment to any bank. This freedom to transact instantaneously and digitally is unbeatable.

As customers now have to migrate from un-organized operators in the industry to licensed players working as per government regulation, it will provide Escrowffrr an opportunity to penetrate entry level market with a no-frill offerings.

The author is Founder & CEO, Trustmore Technologies (P) Limited, Gurugram.

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