June 24, 2021 - CREDAI Bengal Homes

June 24, 2021

CREDAI Bengal Daily News Update | 24.06.21

 Newspaper/Online Money Control ( online )
 Date             June 23, 2021
                      https://www.moneycontrol.com/news/business/real-estate/will-real-estate-
 Link                 developers-launch-housing-projects-after-the-second-wave-of-covid-19-
                      7073041.html

Will real estate developers launch housing projects after the second
                        wave of COVID-19?
Developers are carefully gauging the situation before starting new projects and if there is
a third wave, they will definitely tread with caution, say experts

With the second wave of COVID-19 abating, will real estate developers who adopted a cautious
approach and deferred launches since the outbreak have the confidence to announce new
projects in the second half of the year?

Real estate experts said builders may not have a choice because they have been sitting on land
accumulated over 15-20 years and land prices, depending on location, have been declining
instead of appreciating. They must start new projects to monetise their assets, the experts said.

Housing sales declined 60 percent during the second wave and launches dropped 53 percent in
April, according to a report by Edelweiss Research.

If the pandemic’s downward trajectory is sustained, the housing sector may make a good
recovery by the festive quarter of 2021. Rating company CRISIL says there will be a slowdown
in launches this financial year and expects developers to focus on the sale of ready or near-
complete properties, leading to a gradual reduction in inventory.

It said the second wave will impact residential sector demand in the first half of 2021-22, but a
healthy recovery is expected in the second half, much like in the previous financial year. Pre-
pandemic levels may be reached only after 2022-23.

Supply of new launches are likely to build up in the next three to six months, according to
Liases Foras, a real estate research company, which estimates that almost 90,000 units were
launched in every quarter in the pre-COVID-19 era.

“We saw close to 70,000 units launched between December 2020 to March 2021. The number
declined to almost 30,000 after the second wave,” said Pankaj Kapoor, founder of Liases Foras.
“We may see new launches touching 90,000 units as developers are not in a position to hold
land on account of running costs involved. In fact, they would be compelled to launch new
projects to monetise these land banks.”

Launches in the pipeline

According to data shared by Anarock Property Consultants, 62,130 houses were launched in the
top seven cities in Q1 of 2021 compared with 41,220 units in Q1 of 2020, a 51 percent increase.
The Mumbai Metropolitan Region (MMR), Hyderabad, Pune and Bengaluru together accounted
for 79 percent of the supply addition.

Also Read: Real estate sector demand to touch pre COVID-19 levels only after 2022-23: Crisil

While developers turned cautious about launching projects after the second wave, the scenario
in the April-June quarter of 2021 seems to be better than in the same period last year, when
merely 1,400 units were launched in the top seven cities.

“We anticipate new launches to be at least 40-45% lower than the previous quarter – Q1 2021.
In the January-to-March 2021 period, at least 62,130 new units were launched across the top
seven cities. On a yearly basis, we anticipate new launches to see a massive jump,” said Anuj
Puri, chairman of Anarock.

In 2020-21, MMR and Pune dominated the new launches with 65,000 units, equivalent to about
43% of the total new supply in the top seven cities. In the current quarter, launches are taking
place in Hyderabad and Bengaluru, data by Anarock indicated.

Quite a few real estate companies may go in for launches this year.

DLF plans to scale up launches, revamp its premium and mid-income housing offerings, and
continue to monetise its finished inventory across regions this year after registering a 24 percent
increase in new sales bookings to Rs 3,084 crore in 2020-21.

Upcoming projects cover the entire range – from low-rise developments including independent
floors and commercial units, to plotted developments and high-rises.

“It will cut across the whole spectrum from premium/luxury housing to value homes, across
Gurugram, Tricity and Chennai. Today, it is difficult to judge what the state of affairs would be
going forward,” said Aakash Ohri, senior executive director of DLF Home Developers Ltd.
“We are gearing up to launch each of these projects as per the intended timelines.”

Max Estates, the real estate development arm of Analjit Singh’s Max Group that operates in the
commercial spaces segment, said in a regulatory filing that it has decided to enter the residential
sector with a focus on mid-segment housing. It is prospecting well-priced and located clear
plots in the National Capital Region. Expansion plans in the residential sector will depend on
the initial experience from its first project, it said.

“The time is now right for us to foray into residential real estate to widen our footprint. With
trust in brand Max and access to institutional capital, we believe residential development can be
a high-return, value accretive complementary line of business,” said Sahil Vachani, MD & CEO
of Max Ventures & Industries Ltd., the parent company of Max Estates.

Mahindra Lifespace Developers Ltd. has a healthy pipeline of launches.

 “We have a robust pipeline of launches planned in FY22. We’ve concluded three land
transactions in the last five months – one each in Bengaluru, Kalyan (MMR) and Pune – all of
which we expect to bring to market in this financial year. Additionally, we plan to launch a

residential project at Mahindra World City, Chennai, in the third quarter of CY2021,”
Vimalendra Singh, chief sales officer at Mahindra Lifespace, told Moneycontrol.

The company is working towards phased launches in projects Luminare in Gurugram,
Happinest Tathawade in Pune and Alcove in Mumbai, all within this financial year, he said.

“While we are geared up in getting these projects ready for the launch, we will need to take into
account the market situation due to the pandemic,” Singh added.

Parinee Group will launch five residential projects spread across 3 lakh square feet, offering
three- and four-bedroomed apartments in the JVPD area of Mumbai, and a premium project in
Versova, said managing director Vipul Shah.

Sugee Group has a few launches planned.

“The market would gain confidence after the vaccination drive picks up. We are expecting
traction in housing sales in the second half of the year. There are two projects in the pipeline –
Marina Bay (luxury) in Worli and Akansha (semi-luxury) in Dadar West,” Nishant Deshmukh,
founder and MD of Sugee Group, told Moneycontrol.

Formats that are likely to dominate

The affordable and mid segment continue to dominate the new supply in most cities. In
Bengaluru, the mid segment launches supersede others. Developers are extremely cautious
about luxury projects, which are launched in limited number.

Builders may also look at increasing sizes of houses and apartments. In a major trend reversal,
‘bigger is better’ is once again the catchphrase in India’s housing market in the post COVID-19
pandemic era.

According to Anarock, the average apartment size in the top seven cities has risen by about 15
percent to 1,180 sq. ft. in Q1 of 2021 from 1,030 sq. ft. in Q1 of 2020. With the increasing need
for work and study from home, apartment sizes are increasing for the first time in four years.
Indian developers were quick to catch on that size matters again and this trend is likely to
continue.

Will the third wave derail plans for new launches?

Developers are overly cautious and carefully gauging the situation before launching projects. If
there is a third wave, they will definitely tread with caution, said Puri.

Will launches aggravate the problem of unsold inventory?

Real estate experts say new housing supply is largely based on demand – especially amid the
pandemic, when home ownership has become a top priority for many, including millennials.
Today, developers mostly launch projects after an in-depth analysis.

“This has helped them bridge the demand-supply gap and sell relatively faster, whereas many of
the previous unsold stock remains so because of the demand-supply mismatch. Therefore, we

are far better positioned than before. Also, we are seeing structural demand in residential real
estate, which is likely to stay on,” said Puri.

According to Kapoor of Liases Foras, unsold residential inventory may continue to hover
around 1.2 million units like last year.

“Whatever is getting sold is being replaced by new supply. In the December 2020-to-March
2021 quarter, as many as 70,000 units were sold and a similar number of units were launched.
With real estate inventory being at almost the same level, prices may come under pressure,”
Kapoor added.

____________________________________________________________________________________

Newspaper/Online Financial Express ( online )
 Date             June 23, 2021
 Link             https://www.financialexpress.com/money/reit-a-catalyst-re-shaping-the-
                      indian-real-estate-investment-sector/2276695/

            REIT: A catalyst re-shaping the Indian real estate
                           investment sector
REIT investments are proving to benefit investors in emerging markets like India in
comparison to developed markets.

Real estate investment trusts (REITs), which invest in public real estate, have long been a staple
of diversified portfolios. REITs have offered competitive risk-adjusted returns, attractive
income, and inflation protection over the long term in various market situations. However,
given the structural issues that are more acutely hurting sectors, including office space, regional
malls, and retail centres, there are a few that are questioning whether REITs are still a good
investment. We believe that the changing makeup of the REIT sector will help to maintain these
characteristics.

A stronger, more resilient REIT industry also emerged, led by management teams that learned
and put into practice many valuable lessons, not least around balance sheet strength and
structure. However, with the pandemic’s socio-economic impact, reviving homebuyer’s interest
in even selling the existing inventory was a challenge. In fact, this humanitarian crisis has urged
people to re-look their investment strategy so as to secure their future with far more financial
stability.

Morgan Housel’s book “The Psychology of Money” mentions a study on investment habits
conducted by well-known economists Ulrike Malmendier and Stefan Nagel of the National
Bureau of Economic Research, which found that people’s lifetime investment decisions are
heavily anchored to the experiences those investors had in their own generation—particularly
early adult life experiences. This, to some extent, explains how generations of investors have
always considered Real Estate to be a must-have asset in their investment portfolio. And
because one is encouraged to make this investment much earlier in their earning years, it is
often done by buying a home.

Traditional assets still have their charm. In fact, owning a property is probably the only
investment that most risk-averse investor could consider over equity markets that can promise
great returns in the long term minus the risks involved in stock markets. Interestingly, the
pandemic bought about a tectonic shift in how people look at real estate as an investment and
probably even made us less averse to high-risk investments that promise inflation-beating
growth rates.

Today, many dual-income families who have been investing in more than a single property to
increase their high yielding asset portfolio are now looking at equity markets, either through

MFs or stock trading, as a possible avenue to maximise their wealth. And for those who want to
explore the best of both, there are Real Estate Investment Trusts (REITs).

While India introduced REIT only in 2007, it has been a global investment focus for more than
50 years. Also, given the geopolitical situation and recent focus shift from China to India as a
preferred investment destination, India presents a ready-made ground for commercial and
manufacturing infrastructure development. With this insight, global investors are looking at
India for better yields, and many international funds are venturing into commercial real estate
investment in India.

The government has supported the Real Estate Investment Trust (REIT) investors in the country
through regulatory modifications that allow them to put in their money more efficiently and also
pitch in with their international experience in the management of REIT’s. The recent budget
announcement also allowed easier participation by foreign portfolio and institutional investors
in the Indian REITs by easing the statutory debt funding requirements.

The currently available REITs in India have already shown that they are suitable quality
investments for people looking for long-term financial benefits. They have a better safety
outlook against fraud as it’s managed by the Securities and Exchange Board of India (SEBI)
and disclose their capital portfolio every six months.

Data accessed from JLL’s ‘The India REIT Opportunity’ report of November 2020 shows that
the current REITs in India are a substantial investment opportunity. It also suggests that fund
managers also prefer REIT as opposed to Infrastructure Investment Trusts (InviTs) based on the
735 Cr investment seen in 2020. With investments coming into REITs from foreign and
domestic players, despite the ‘work from home’ culture setting in, growth in this sector will
prevail.

That REITs are heating up as a destination for investment can be proved by the fact that even
during the pandemic stricken year of 2020, the net absorption of real estate was quite high.
There are also strong indicators that show that the net absorption in 2021 will be over 30 million
square feet. This stems from India Inc’s ongoing efforts towards self-reliance in line with the
Government’s Aatmanirbhar Bharat agenda. This will undoubtedly fuel the real estate sector,
which will add to the international and domestic confidence in REIT.

As we look toward the new normal, REIT investments are proving to benefit investors in
emerging markets like India in comparison to developed markets. This will usher increased
investments both nationally and internationally, bringing world-class infrastructure and
management to our footsteps.

_____________________________________________________________________________

Newspaper/Online Yourstory ( online )
 Date             June 23, 2021
 Link
                      https://yourstory.com/2021/05/proptech-trends-gaining-prominence-2021/amp

               5 proptech trends gaining prominence in 2021
Real estate experts and key industry stakeholders are now started betting big on proptech
being a major enabler and future growth driver for the realty sector.

Ever since the global COVID-19 outbreak began, the real estate markets across various cities
and towns have felt the ‘pandemic burden’ and are facing unprecedented levels of challenges
and hardships. Though on the positive side, proptech has come to their aid massively in terms of
mitigating these problems.

For 2021 and beyond, real estate experts and key industry stakeholders are now betting big on
proptech being a major enabler and future growth driver for the realty sector. Be it at the local,
national or international levels, proptech can create a positive and sustainable impact
everywhere.

Hence, it becomes more important than ever to take note of the latest trends and developments
in prop-tech, shaping (or will shape in the near future) the future of the real estate and property
market.

Here are five emerging trends in the proptech domain gaining solid momentum.

Property search and transactions take the online route

While online/digital property search and property listings were popular even before COVID,
these have now emerged as ‘necessity’ or ‘must-do’ activities, in the absence of alternative
options.

Various industry reports suggest that online property search volumes and queries had increased
substantially across key real estate markets in India — especially when compared to pre-
COVID — during the last financial year, and this trend is expected to continue and grow
through the current fiscal year as well.

Even the global scenario seems to be the same — the online property market is booming
worldwide. On the other hand, the various types of property transactions, which were
previously done mostly through cheques or cash payments, are now also happening online via
UPI, payment gateway platforms, and apps, etc.

Property owners becoming ‘Aatmanirbhar’ using technology

Real estate/property owners and landlords in our country, who traditionally used to rely on
property agents, realtors or middlemen to sell or rent their properties, are now increasingly
becoming self-dependent in the post-pandemic times, with the increased adaptation and usage
of technology and digital and social media channels.

As the clarion call for ‘Aatmanirbhar Bharat’ gets stronger, we can see how the property owners
are nowadays shooting and posting pictures and videos of their properties online in a bid to gain
attention from tenants, buyers and property investors — all of whom are also actively looking
for best-fit properties online.
Virtual home tours — the ‘new norm’ to woo buyers

Since the COVID-induced mobility restrictions are not allowing in-person property visits, real
estate developers, agents, and residential property owners across the world are now increasingly
relying on virtual home tours to showcase their properties to prospective clients/customers and
aspiring homebuyers.

Most of these virtual home tours are usually facilitated using software or tech platforms that
bring in enhanced 3D experiences and 360-degree, in-depth property view by using VR, and
other similar technologies. In the post-pandemic era, the real estate sector is expected to
continue striking a balance between physical property visits and virtual visits, when it comes to
buying and selling of ready homes/apartments especially.

Esigning and online property agreements on the rise

Another notable proptech trend that has assumed significance is the increased use of esigning
and online property agreements.

With many real estate and property deals being closed on video calls nowadays (without face-
to-face meetings happening), electronic signatures and digital agreements are becoming
mainstream, along with the rise of a number of tech platforms or Cloud-based software that
allow people to digitally sign a real estate lease, rent or buying agreement, contract etc. as well
as share the documents with the persons concerned.

Among key benefits associated with esigning technology are that it enables a great deal of
flexibility for the real estate stakeholders/parties and allows them to go paperless, thus making it
an environment-friendly and sustainable solution in the long run.
Home automation and smart homes gain popularity

Lastly, home automation and smart homes — a concept that has been around for over a decade
— is now becoming heavily popular in the residential real estate markets across the world,
thanks to the advancements in technology adoption and the rise in millennial and Gen-Z
homebuyers.

An Internet-connected smart home is the one that enables the residents/uses to seamlessly
automate different activities and processes within the house, such as opening or closing of
doors, switching on the AC, turning the lights and fans on and off automatically or via a remote
control device, and so on.

The convenience, comfort, safety and efficiency of home automation are the key factors that are
attracting today’s buyers to invest in smart homes, and even large developers across the globe
are increasingly integrating smart home tech in their buildings and projects to match user
preferences and needs.

Even though still at a nascent stage in India, the smart homes market of our country has been
growing steadily in recent years, majorly driven by the huge rise in popularity of voice-
activated home automation devices such as Amazon Echo and Google Home!

_____________________________________________________________________________

Newspaper/Online ET Realty ( online )
 Date             June 23, 2021
                      https://realty.economictimes.indiatimes.com/news/industry/maharera-plans-
 Link
                      to-amend-rules-governing-home-sale-agreements/83779877

MahaRERA plans to amend rules governing home sale agreements
The regulator has formed a committee to consider recommendations on two key issues – model
agreements for commercial and residential apartments and plots, and drafts of allotment letters.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has decided to amend the
rules governing sale agreements between homebuyers and realty developers to reduce the scope
of                                                                                 litigation.

The regulator has formed a committee to consider recommendations on two key issues – model
agreements for commercial and residential apartments and plots, and drafts of allotment letters.

RERA rules bar promoters from accepting a sum of more than 10% of the cost of the apartment
without entering into a formal agreement for sale.

MahaRERA has observed through hearings of complaints that agreement disputes are rising and
modifications     to       agreements         for         sale       were           needed.

According to legal experts, the move is a step in the right direction to ensure fewer disputes.

“The authority is looking to amend the Draft Allotment and Agreement letters. Many
developers prepare additional booking forms and terms and conditions of allotment to impose
additional terms not provided in the Authority prescribed provisions. This will be curtailed
when new model drafts and instructions are issued,” said Prakkash Rohira, Advocate, Bombay
High                                                                                  Court.

According to him, most violations are usually committed by developers wherein large monies
are paid by purchasers and developers only issue allotment letters without registering the sale
agreements.

The authority, he suggests, needs to consider having developers make such declarations online,
and or rectify the same in a time-bound manner, to substantially reduce the section 13
violations.

The committee comprises representatives of the authority, homebuyers’ and consumers body,
realty            developers                 and               legal             advisors.

The timeline and scope of work of the committee will be set in consultation with MahaRERA.
The committee is expected to submit its report in 30 days.

MahaRERA member Vijay Satbir Singh is the chairman of this committee and Vasant Wani
MahaRERA’s administrative officer is the member secretary of this committee. It also counts
Mumbai Grahak Panchayat’s Archana Sabnis and legal consultant Nalini Sathe apart from
realty developers Boman Irani and Vimal Shah as members.

____________________________________________________________________________________

Newspaper/Online Money Control ( online )
 Date             June 23, 2021
                      https://www.moneycontrol.com/news/business/msme-body-aica-writes-to-pm-
 Link
                      seeks-intervention-as-price-of-raw-material-rises-7077111.html

MSME body AICA writes to PM, seeks intervention as price of raw
                      material rises
As a result of the consecutive lockdowns in 2020 and 2021, the MSME sector has been
facing a massive liquidity and supply crunch, shortage of labour and non-payment of
dues.

All India Council of Association of MSMEs (AICA), representing around 170 MSME
associations, has written to the prime minister urging the government to intervene after a
massive spike in key raw material prices hurt MSMEs.

In its letter, AICA has said that there is an erosion in the working capital of MSMEs due to a
huge rise in prices of raw materials like steel, iron ore, aluminum, copper, plastics, PVC,
paper and chemicals.

It further said that the open market is not accepting the resultant effect of the increase in the
price of raw materials. AICA further said that the raw materials are being blocked and stocked
in the supply chains.

"We understand this volatile situation is temporary in nature, however can cause permanent
damage to the MSME sector. In spite of drop in demand due to lockdown, prices are in
upswing, particularly steel, pig iron and other raw materials too," AICA said in a statement.

Between April 2020 and June 2021, the price of copper has surged 109 percent from Rs. 345 to
Rs 745 while the price of steel plates have jumped 82 percent from Rs 45 to Rs 82 during the
same period.

The industry body has suggested hedging of steel for the MSMEs in order to provide
protection against escalation for some period.

"Easy mechanism to hedge steel for all MSMEs, National Small Industries Corporation (NSIC)
should act as a consolidation agency. They should be in a position to consolidate and hedge
overall steel quantity in the market place. This kind of hedging should be possible for a period
of one year," it said.

AICA further suggested that the public sector enterprises must be instructed to accept
cancellation of orders from MSMEs without putting a penalty or blacklisting them as an event
of increase in the prices of steel is not within the control of the MSMEs.

The industry body also called out for the PSUs to publish steel prices on a quarterly basis and
urged that the price should be maintained for a minimum of 3 months at a stretch.

"PSUs like SAIL and Vizag steel should focus on MSMEs for supply of materials on priority
basis and all steel industries should allocate at least 40 percent of their production for Indian
MSMEs," AICA said in its suggestions.

As a result of the consecutive lockdowns in 2020 and 2021, the MSME sector has been facing a
massive liquidity and supply crunch, shortage of labour and non-payment of dues.

The MSME sector in India is said to be the second-largest employment creator after agriculture,
providing employment to an estimated 11 crore people. It contributes to 30 percent of the GDP
and accounts for 48 percent of the exports.

____________________________________________________________________________________

Newspaper/Online ET Realty ( online )
 Date             June 24, 2021
                      https://realty.economictimes.indiatimes.com/news/regulatory/mumbai-no-14-
 Link
                      hike-in-property-tax-rates-this-year/83799842

          Mumbai: No 14% hike in property tax rates this year
A motion to “record” the proposal to hike property tax was moved by Shiv Sena corporator
Vishakha Raut. Once a proposal is recorded, it usually goes into cold storage and is not revived.

The civic standing committee on Wednesday rejected the BMC’s proposal for an around 14%
hike in property tax rates in Mumbai. With stern opposition from the BJP and the Congress, the
Shiv Sena moved a motion to merely “record” the proposal and have it cleared by the standing
committee.

A motion to “record” the proposal to hike property tax was moved by Shiv Sena corporator
Vishakha Raut. Once a proposal is recorded, it usually goes into cold storage and is not revived.

The BMC wanted to hike the property tax rates by 14% by proposing to calculate based on new
ready reckoner (RR) rates.

Political observers say with BMC elections just six months away, the proposed hike had turned
into a political hot potato, especially for Shiv Sena which is the ruling party in the BMC and
part of the Maha Vikas Aghadi government led by chief minister Uddhav Thackeray.

With revision of taxes based on current RR rates, the BMC wanted to hike the tax for all
properties by around 14%. The current property tax rates are calculated on RR rates for 2015.
Now, though, the BMC wants to revise the calculation based on the current RR rates.

“The BMC reduced premiums for builders in the wake of the Covid-19 pandemic and the
lockdown and even hotels and restaurants were given a kindness package by means of a waiver
in property tax. But the BMC wanted to hike the property tax of the common man,” said BJP
corporator                                  Vinod                                   Mishra.

Congress corporator Ravi Raja who had first opposed the hike said the proposal must be
rejected permanently and not just merely till the BMC polls, scheduled in February 2022.

“The BMC must reduce the property tax for middle-class homes instead of hiking it. Many have
suffered a loss in income due to Covid-19-induced lockdowns and they must be given relief.
The BMC has given relief to contractors too but none to common citizens,” Raja said.

BMC officials said the revision in property tax rates took place in 2015. According to the
amendment made in Mumbai Municipal Corporation Act, the revision in property tax rates is

carried out once in five years and usually at the end of the five-year term. The fresh revision
was scheduled for 2020-25.

____________________________________________________________________________________

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