Thursday, 31 July 2014

“Sikka” & “Cinepolis” signed LOI to have Multi Screen Cinema (Multiplex) in The Downtown Noida

After having signed a deal with “Intercontinental Hotel Group” (IHG) to have Five Star Hotel and “Savemax” to have a Hyper store in The Downtown, Noida. We proudly announce the signing of another LOI with Legendry world renowned International Brand “Cinepolis” .

Cinépolis is a Mexican chain of movie theaters. Its name means City of Cinema. Cinepolis India is a wholly-owned subsidiary of Cinepolis, the world's 4th largest movie theatre circuit operating in 11 countries having the biggest cineplex chain in Mexico with 205 theaters in 65 cities and they have become the largest chain in Latin America and the fourth largest in the world with over 230 theaters, more than 3,400 screens throughout Mexico, Guatemala, El Salvador, Costa Rica, Panama, Colombia, Brazil, Peru, India and the United States.

Movie exhibitor Cinepolis India has plans to take the number of screens in the country to 400 by 2017 from the present 84 in 13 cities, after the expansion, the seating capacity will go up to 88,000 from the current 17,600.

Sikka is a North India' leading premier Real Estate Developer, currently developing in excess of 7 million sq.ft. of prime real estate, with over 12 projects in Northern Part of the Country in different cities who has recently introduced the concept of branded office spaces, with offerings at every level, from world-class corporate offices to large-scale office campuses to signature boutique offices for growing businesses. Now Sikka has further extended its promise of luxury living by introducing a Luxury project at Dehradun, the capital of Uttrakhand.

Friday, 25 July 2014

Best Asset Classes in India – Real Estate and Equities

Investments made in the real estate and equities have given the highest returns of up to 20 per cent to investors in the last two decades, says a study.

According to a recent study by Cians Analytics on the returns from various asset classes in India during 1991–2013, real estate and equity market have given maximum returns to investors.

The study covers five types of asset classes -- equities (BSE Sensex), commodities (gold), bank fixed deposits (1–3 year maturities), government securities (10-year maturity), and real estate.

 It was aimed at finding out which asset class would have provided the highest return since the liberalization process commenced in 1991.

Looking at the overall returns, the study noted that "real estate appears to have outperformed all other asset classes during the 23-year period with an annualized rate of 20 per cent."

After real estate, equities have also performed strongly in India as the stock market gave a healthy annualized return of 15.5 per cent on a nominal basis during the past 23 years. However, adjusting for inflation, the real return is only 7.1 per cent per annum.

The study also explored gold, government securities and fixed deposits at banks, which were found to have posted comparatively lower returns of 10.9 per cent, 9.7 per cent and 8.8 per cent respectively for the 23-year period.

"Real estate was repeatedly the best performer during the 5-year sub-periods since 1991, with the highest return being 670 per cent during 2008–12 and the lowest 46 per cent during 1993–97," the study noted.

It said that the realty sector performance has been measured based on the average of the land rates (1991–2006) and circle rates (2007 onwards) set by the land and urban development authorities for residential property in Delhi.

These have been used as a proxy for real estate prices since reliable data is not available for the period since 1991. Furthermore, the rental yields have been sourced from various new reports for the respective periods, the study said.

Source: The Financial Express

Wednesday, 23 July 2014

Government provides incentives for real estate investment trusts(REIT) in Budget 2014

Finance Minister Arun Jaitley announced in the Union Budget on Thursday, that the government would provide necessary incentives to REIT's.  Also, to avoid double taxation, the REIT's would be given a tax pass-through status.
A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. Some REITs also engage in financing real estate. REITs can be publicly or privately held. REITs can be classified as equity, mortgage, or a hybrid.

In reacting to the budget, Vinay Khattar (Edelweiss Financial Services | Head-Research) says, 'Overall the budget is very positive. The structure of the government focus points has been made clear. REIT was very positive for real estate. Infrastructure focus of the government has also become very clear especially for the roads space.'
After the announcement, real estate giants like HDIL and DLF saw a rise of over 9% in their stock prices.
Pre-budget Expectation:
Regulations on REIT:  Once introduced, the Indian Real Estate Invetment Trusts (REIT) will help individual investors enjoy the benefits of owning an interest in the securitised real estate market. The greatest benefit will be that of fast and easy liquidation of investments in the real estate market unlike the traditional way of disposing of real estate. The government and Securities and Exchange Board of India through various notifications is in the process of making it easier to invest in real estate in India directly and indirectly through foreign direct investment, through listed real estate companies and mutual funds.

Wednesday, 9 July 2014

Budget 2014: Real estate looks for growth-oriented road map

From the perspective of the homebuyers, the tax benefit on housing loan interest for self occupied property has remained constant at 1.5 lakh since 2001. However, the real estate prices have increased rapidly leading to a quantum rise in the loan requirement for each home purchase.

The 16th of May 2014 was a landmark day in the history of India. With the nation electing the Modi government, there is a strong expectation of a revival of the economy that has been stagnant for some time now. We are seeking action, and the budget is the first litmus test. Now, all eyes and ears are on Arun Jaitley by bringing about a change for a true economical impact.

On the onset, the Indian market has done quite well in the last few months giving an indication that the economy will revive. Narendra Modi made his intentions clear in his first speech in the parliament as a Prime Minister. He laid emphasis on a pragmatic economy and addressed the right economic realities including a stable tax regime, infusing infrastructure growth in the rural and urban areas of the country and most importantly creating job opportunities. With our leader’s approach on the right track, one can surely expect Arun Jaitley to give us a progressive and a reform-oriented budget.

Due to the rapidly growing industry, SEBI has been aggressively pushing for an evolution and clarity in the real estate investment (REIT) trust. It is time that the government takes measures in ensuring that a real estate fund is created to keep the liquidity flowing in the construction business. A regulation or a policy should be created through which the developers can borrow at lower rates of interest. There will be two pronged benefit of these steps. While easy fund availability will reduce the construction cost for developers, the home buyers will also benefit through better real estate prices. This, in turn, will increase the demand of housing finance and lead to the growth of the retail finance industry due to a better flow of liquidity in the market. Moreover, government intervention would also reduce the corrupt practices in the sector, which would prove to be beneficial for future of the entire industry. This, in the end, will truly benefit the homebuyer.

From the perspective of the homebuyers, the tax benefit on housing loan interestfor self occupied property has remained constant at 1.5 lakh since 2001. However, the real estate prices have increased rapidly leading to a quantum rise in the loan requirement for each home purchase; in this scenario, the limit of Rs. 1.5 lacs needs to be reanalyzed. A significant increase in the exemption limit for self-occupied property, ideally to Rs. 3 lacs, will result in additional tax savings for the home buyer and will also help reenergize the realty sector.

 The country has started off in the right direction by electing a stable government. Now, we are waiting for action. With all eyes and ears on the Finance Minister, there is an expectation from the budget of showing a positive, growth-oriented road map. The real estate industry is keenly anticipating a forward-thinking budget, and at the end, the homebuyer is sure to benefit!


Sunday, 6 July 2014

Affordable Housing Policy in Real Estate is Need of the Hour

The recent rail fare hike announced by the government has shaken up the struggling real estate industry, as this will result in an increase in cost of raw material.

The BJP manifesto talks of home for all by 2022. It is $6 trillion requirement to service the housing deficit of 18.8 million housing shortage in India. Beauty is that real estate sector can easily generate interest of domestic as well as foreign funding agencies in various forms.
Globally the housing growth is barometer of health of economy. But in India discouraging housing is the theme of banking regulator. The attitude of ministers and senior officials is such that they don’t even call the housing industry association for regular consultation on budget or discussing health of economy. Affordable housing policy in real estate is the need of the hour for the Indian real estate and the new government has a pivotal role in its hand to uplift the sector.
Presently, interest rates charged by the banks to developers and home buyers are at an all-time peak and need to be brought down below 7 per cent.
There is a dire need for an industry status for the realty sector. Once industry status is granted, funding for the real estate projects will become easier and at lower interest rate.
Another long pending issue in the sector is Single Window Clearance. Now the approval process is very lengthy and takes around 1.5 years to 2 years for approval. Approval processes (single window clearance) to be simplified as the cost of delay in approval, adds further to customers spending by 25% to 40%.
The Floor Space Index (FSI) or FAR rules were made decades ago. Changes need to be made in the Development Control Rules and higher FSI needs to be allotted to stabilise real estate rates.
The budget document should support a proper REIT structure. If the long overdue in having a REIT structure is made it can generate almost one lakh crore worth equity replacing debt.
We suggest a special focus on rental housing to serve the needs of a huge section of the population that may not be in a position to immediately buy houses. For the economic growth of the country and the real estate sector government should encourage setting up of SEZs across country. SEZs, once touted as tax/duty free enclaves have lost their sheen due to withdrawal of Minimum Alternative Tax (MAT) and Dividend Distribution Tax exemption.
Investors in SEZs with a long term development vision are exploring avenues for exit or de-notification. Restoring DDT and MAT benefits could help in salvaging SEZs.
Currently there are multiple taxes being levied on home buyers. We request the government to remove service tax as it further puts burden on the home buyer. We suggest for reducing FDI eligibility limit to 20,000 sq meter and capitalisation limit to $1 million. Broader base of FDI investment will enhance foreign investment and will be able to retain the funds with larger per cent of success.
In all, the need is the due attention and respect for business of Real Estate Development which will bring the desired growth in economy and job market.
Source: The New Indian Express