Foreign investment fuels record-breaking growth in India's Real Estate sector in Q2 2024
India's real estate sector saw a record USD 3.1 billion in institutional investments in Q2 2024, a 96% increase from last year. Foreign investors led the surge, contributing 71% (USD 2.2 billion) of the total. The industrial and warehousing sector was the top performer with a USD 1.5 billion deal involving ADIA, KKR, and Reliance Retail. Despite a 56% yearly decline in commercial investments, the overall market remains positive. With India's economic growth forecast at 7.8% and ongoing infrastructure projects, experts predict continued investment growth in 2024, solidifying India's appeal as a stable investment destination....
Real estate sector set for growth with new government policies and budget reforms
Realty stocks have surged post-Lok Sabha elections, driven by new government housing policies. The upcoming 2024 budget, expected to reform GST and lower taxes, will boost consumption. Realty stocks are bullish due to pent-up demand and limited supply, with residential real estate absorption up 14% and realisations rising 10% in FY24. Steady interest rates and affordability support growth as listed players expand. Motilal Oswal reports a 35% increase in new launches and improved absorption rates. Experts see the sector as undervalued, with growth potential from infrastructure and tax reforms, prompting companies to explore new markets and IPOs....
New supply of affordable apartments declines by 21% in major Indian cities
India's residential real estate market is undergoing a significant shift, with a decline in the supply of affordable apartments and a surge in the launch of premium homes. According to a report by real estate consultant JLL India, the supply of affordable flats costing below INR 50 lakh fell by 21% in the April-June 2024 period across seven major cities - Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad, and Pune. Meanwhile, the launches of apartments priced between INR 3-5 crore more than doubled, and the supply of homes above INR 5 crore also jumped over two-fold. Developers are responding to the growing demand for high-value homes among their target clientele. The report also noted a 22% rise in apartment sales across these seven cities during the same period....
Noida Authority raises land allotment rates by 6% for FY 2024-25
The Noida Authority has approved a 6% increase in land allotment rates for residential and industrial plots, effective from the financial year 2024-25. This decision accompanies a budget approval of INR 7,700 crore for the upcoming year. The hike affects residential plots in categories A to E, with prices ranging from INR 1.25 lakh to INR 48,110 per square metre. Group housing and industrial plot rates have also risen by 6%, impacting developments across the region.Officials attribute the increase to inflation and anticipate generating substantial revenue to support ongoing development projects in Noida....
Radius Group MD denied bail in INR 3,700 crore money laundering case involving Yes Bank and DHFL
Sanjay Chhabria, Managing Director of Radius Group, was denied bail by the Bombay High Court in connection with an alleged INR 3,700 crore money laundering case involving Yes Bank and DHFL. Arrested by the Enforcement Directorate (ED), Chhabria denies wrongdoing. Meanwhile, Radius Group project delays leave homebuyers frustrated, unable to register their flats or move in as planned. These delays impact life savings and life plans, highlighting the need for transparency and accountability in real estate dealings. With ongoing legal uncertainties, staying informed and seeking support from homebuyer associations are crucial steps for affected individuals during this challenging period....
Goa's Luxury Real Estate Boom: A new hotspot for high-end homebuyers
Goa's luxury real estate market is experiencing a rise, driven by its idyllic beaches, improved infrastructure, and rising international tourism. Luxury homes, including villas and beachfront apartments, attract affluent buyers from major Indian cities and NRIs, with properties priced from USD 5-6 million. Investment appeal is strengthened by strong rental yields of 3-4% for luxury properties and up to 5-6% for short-term rentals. With ongoing infrastructure developments and anticipated price appreciation of up to 12% by 2024, Goa's investor-friendly policies and lifestyle appeal position it as a prime destination for high-end real estate investments....
The Rail Land Development Authority (RLDA) offers 3.5-acre Dharmavaram plot for INR 9.10 crore lease
The Rail Land Development Authority (RLDA) invites developers to transform a prime 3.5-acre plot near Dharmavaram Railway Station into a bustling commercial hub. With a reserve price of INR 9.10 crore and a proposed 45-year lease, the site offers a built-up potential of 26,770 square metres. Located on Station Road with direct access to NH-716 and nearby transport hubs, including airports in Bengaluru and Kadapa, the site promises excellent connectivity. This initiative aims to stimulate economic growth, attract investments, and enhance Dharmavaram's status as the "Silk City of Andhra Pradesh."...
Affordable housing launches drop as demand for high-end apartments grows in India
A recent JLL India report highlights a shift in new apartment construction towards higher-priced units in major cities. The April-June 2024 period saw a 5% rise in new apartment launches across Mumbai, Delhi NCR, Chennai, Kolkata, Bengaluru, Hyderabad, and Pune, totaling 159,455 units. However, affordable housing (under INR 50 lakh) dropped by 21%, with only 13,277 units launched. In contrast, premium and luxury segments saw significant growth, with units above INR 3 crore more than doubling to 19,202. Despite fewer affordable options, overall sales rose by 22%, driven by strong demand for new properties....
RKN enterprises divests stakes in Godrej Properties and Agrovet for INR 1,652 crore
RKN Enterprises, a part of Godrej Industries Group, sold its shares in Godrej Properties and Godrej Agrovet to family members for INR 1,652 crore as part of a family settlement announced in April. This sale included 41.46 lakh shares in Godrej Agrovet for INR 331.70 crore and 39.86 lakh shares in Godrej Properties for INR 1,320.90 crore. The buyers were family members Freyan Crishna Bieri, Jamshyd Naoroji Godrej, Navroze Jamshyd Godrej, Nyrika Holkar, and Smita Godrej Crishna. This follows the Godrej family's decision to split the conglomerate, with Adi and Nadir Godrej retaining Godrej Industries and Jamshyd Godrej controlling Godrej & Boyce....
Mumbai luxury housing market soars with INR 12,300 crore in sales in H1 2024
The Mumbai luxury housing market saw significant growth in the first half of 2024, with sales of homes priced at INR 10 crore or more increasing by 8% to reach INR 12,300 crore, surpassing last year's figures. India Sotheby's International Realty and CRE Matrix reported record-breaking sales, indicating strong market growth and confidence in Mumbai's real estate. The report also analysed and illustrated key trends and demographics in the market. Sales were particularly strong in both primary and secondary segments, with notable increases in unit sizes and buyer profiles, reflecting a robust market poised for continued expansion in 2024....
SEBI auctions properties to recover INR 67.70 crore for HBN Dairies investors
SEBI's upcoming auction of eight properties owned by HBN Dairies aims to recoup funds for investors who suffered losses in the company's illegal investment scheme. Promising high returns through cattle purchases and ghee sales, HBN Dairies failed to deliver, prompting SEBI's intervention. Properties on auction include a shopping mall with a multiplex, a hotel, and commercial shops spread across New Delhi, Punjab, Madhya Pradesh, Gujarat, and Maharashtra. The total reserve price is set at INR 67.70 crore, offering investors a potential pathway to partial recovery, albeit with caution about final sale prices meeting expectations and the distribution of proceeds among affected parties....
India's senior living market set for fivefold growth in real estate by 2030
India's growing senior population is creating a new wave of opportunity in the real estate sector-senior living. A recent report by Colliers predicts a fivefold growth in this market by 2030, fueled by a rise in demand for specialised housing for older adults. By 2050, India is expected to have the world's largest elderly population, with over 300 million senior citizens. Currently, there's a demand for over 320,000 senior living units, but only 20,000 units are available. This significant gap presents a lucrative opportunity for developers. Despite the growth, affordability remains a challenge, highlighting the need for budget-friendly solutions and government support....
Warehousing dominates Indian Real Estate investments in Q1 FY 24-25
India's real estate market saw a significant shift in investment focus during Q1 FY25, with warehousing attracting USD 1.5 billion, marking a 14% YoY growth. A major deal between Reliance Retail, ADIA, and KKR drove this rise, accounting for 71% of all PE deals. This contrasts with Q1 FY24, where office spaces dominated with USD 1.4 billion in investments. Multiple cities, including Hyderabad, Bengaluru, Pune, and MMR, saw investor activity totaling USD 436 million. The trend highlights the growing importance of logistics and e-commerce, reflecting an evolving market dynamic in Indian real estate....
Sanofi India to sell 150,000 sq ft Powai headquarters for INR 250 crore
Sanofi's Indian subsidiary is selling its 150,000 sq ft Powai headquarters, acquired in 2013 and occupied in 2015, for around INR 250 crore as part of its asset monetisation strategy. The company has leased a new office in Vikhroli for Sanofi Consumer Healthcare, recently demerged to operate independently. This move supports future growth and operational needs. Managing Director Rodolfo Hrosz emphasised Sanofi's commitment to India, highlighting plans to launch one or two new products annually. The Indian office market is booming, with a record 33.5 million sq ft leased in the first half of the year, reflecting strong demand and economic resilience....
TA Associates spearheads USD 400 million investment in Vastu Housing Finance
TA Associates led the acquisition of a significant minority stake in Vastu Housing Finance Corp, along with existing investors like the International Finance Corporation. The stake, purchased for approximately INR 23,340 crore (USD 400 million), values Vastu at INR 10,000 crore, with an additional USD 75 million in primary capital infusion. Founded in 2015, Vastu, backed by Multiples Alternate Asset Management and others, operates over 230 branches across 13 states. The partnership aims to accelerate Vastu's growth in affordable housing, small business loans, and vehicle finance, reinforcing its market position and expansion plans in India....
Gurugram Development Board to put forth a INR 2887 crore budget plan for FY25
At GMDA's board meeting, the board is scheduled to discuss projects including flyovers, Southern Peripheral Road (SPR) redevelopment, water treatment capacity expansion, electric buses, and 10,000 CCTV cameras. The board will present an INR 2,887 crore budget for FY 2024-25 and seek approval for INR 3,500 crore in projects from Chief Minister Nayab Singh Saini. Key proposals include the INR 634 crore redevelopment of Tau Devi Lal Stadium and the signal-free elevated corridor for SPR. GMDA also plans to procure 200 electric buses under the PM e-Sewa scheme and invest INR 1,400 crore to upgrade the city's water supply and drainage infrastructure....
SEBI proposes amendments to REITs and InvITs nomination rights, seeks public feedback
SEBI is inviting public comments on the proposed amendments to the REIT and InvIT rules. These amendments aim to clarify the unitholders' rights to nominate directors to the boards of investment managers or managers of REITs and InvITs. Currently, unitholders with the significant holdings can nominate the directors, but the amendments state that restrictions won't apply if the right is available under the SEBI (Debenture Trustees) regulations. This clarification addresses the market participants' requests. Public comments on the draft circulars are open until July 29. Amendments are proposed to the Master Circulars for InvITs and REITs dated May 15, 2024....
The Sleep Company targets INR 1,000 crore revenue by FY27 with major retail expansion
The Sleep Company, a comfort-tech firm known for chairs, mattresses, and recliner beds, aims to reach INR 1,000 crore in revenue by FY27. The company is significantly expanding its physical store network, planning to grow from 100 to 150 stores by March, covering more cities and increasing store density. Currently, 65% of its revenue comes from physical outlets. Co-founded in 2019 by Harshil and Priyanka Salot, the firm is boosting its advertising spend to INR 85 crore by FY25 to achieve this milestone, after clocking a revenue of INR 335 crore in FY24....
Rental prices drop in Bengaluru's IT hubs as supply increases and hybrid work continues
The rising rental market in Bengaluru is cooling, particularly in IT corridors. With nearly 8,850 units launched in Q1 2024 and a shift to hybrid work models, tech professionals are seeking affordable options on the outskirts. Rental prices in IT hubs like Whitefield and Sarjapur have dropped 15-20% year-on-year. Many are moving to the outskirts for more spacious, cost-effective homes. Improved metro connectivity and increased inventory have given renters more leverage. Landlords are reducing rents in prime areas to attract tenants, anticipating a significant market correction. This trend offers tech professionals the chance to secure better living spaces at lower prices....
India's IPO market soars as retail investors reap 57% average gains in 2024
The IPO market in India is expanding, and because of the remarkable returns, individual investors are becoming more interested. This year's listed shares have gained an average of 57%, far more than the global average. Eleven other companies are preparing to make offerings valued at USD 11 billion. In 36 IPOs, retail investors have placed bids totaling USD 10.6 billion for shares, much exceeding the quotas that were made available. Even with more regulations in place, individual purchasing is still strong. Important instances include the 230% post-IPO stock jump of Exicom Tele-Systems. The primary goal of investors is to make rapid gains, which indicates a trend away from more conventional investments like real estate and toward the stock market....
Global BFSI companies acquire over 1 million sq ft office space in Hyderabad H1 2024
Hyderabad is becoming a major hub for global BFSI (banking, financial services, and insurance) companies, with several significant acquisitions in the first half of 2024. Notable transactions include Cigna Healthcare securing approximately 900,000 sq ft and Metlife obtaining around 250,000 sq ft of office space. Companies like DTCC and Ameriprise have also established smaller spaces. SwissRe and Lloyds Bank expanded their existing footprints. The BFSI sector has become one of the top three office space occupiers in H1 2024, accounting for 30% of the share, driven by Hyderabad's strategic location and skilled talent pool....
Chennai property costs go up as Government adjusts guideline values
Chennai's real estate landscape sees a modest uptick as the Tamil Nadu government's revised guideline values, effective from July 1st, lead to a 10% rise in property acquisition costs. For example, Alandur Road now values at INR 6,100/sq ft, up from INR 5,500/sq ft. This adjustment, prompted by a court's 2023 ruling, aims to standardize stamp duty calculations across 2.19 lakh streets. Builders, while acknowledging the necessity of fair valuation, highlight implementation challenges in districts like Alandur and Pallavaram. Despite marginal cost impacts, broader market conditions are likely to drive future pricing trends in Chennai's real estate sector....
India's wealth boom spurs sevenfold increase in family offices to over 300
India's booming economy has led to a remarkable rise in family offices, from just 45 in 2018 to over 300 in 2024, reflecting a nearly seven-fold increase. These private firms manage the investments of wealthy families, diversifying beyond traditional sectors like real estate into stock markets, private equity, and venture capital. Family businesses contribute 60-70% to India's GDP, and as they expand, managing wealth becomes more complex. Despite challenges like the lack of a tailored ecosystem and succession planning issues, the trend signifies a tech-savvy, diversified approach to wealth management, ensuring continued economic contribution....
INH Mauritius plans to trade its 49% stake in JMFCS to JM Financial for INR 3,000 crore
In a significant shift for India's financial sector, Vikram Pandit, former CEO of Citigroup, is exiting the real estate financing business he co-founded. INH Mauritius, managed by Pandit, is selling its 49% stake in JM Financial Credit Solutions (JMFCS) to JM Financial for approximately INR 3,000 crore (USD 420 million). This acquisition raises JM Financial's ownership in JMFCS to 96%. The move reflects challenges in the real estate sector, with JMFCS' valuation lower than its reported net worth of INR 4,200 crore (USD 590 million). Additionally, JMFCS will acquire a 72% stake in an asset reconstruction company for INR 856 crore (USD 120 million), aiming to capitalise on distressed debt recovery opportunities....
Mall vacancy rates drop in Q2 2024 as retailers focus on main street leasing
A recently released report by Cushman & Wakefield emphasises India's strong preference for main-street retail leasing due to limited mall openings and high demand for top-tier retail spaces. In Q2 2024, high-street leases constituted 70% of total leases, with notable rent increases in Kolkata, Bangalore, Hyderabad, and Mumbai. Mall vacancy rates declined in major cities, with Grade A/A+ malls maintaining low vacancies. H1 2024 saw no new mall openings, but H2 is expecting 4.5 MSF of Grade-A malls. Nexus Select REIT saw 98% occupancy and plans to double its portfolio. Leasing activity surged in Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Kolkata, Pune, Chennai, and Ahmedabad....
Bengaluru's BBMP has collected INR 463.03 crore in property taxes through its One-Time-Settlement (OTS) scheme, with INR 624.88 crore still outstanding as the July 31 deadline nears. Launched on February 27, the scheme aimed to ease tax burdens by waiving 50% of penalties and interest but saw limited participation, with only 1.52 lakh out of 5.51 lakh defaulters settling dues. Despite issuing notices to 3.95 lakh property-owners, only 70,000 responded. BBMP Chief Commissioner Tushar Giri Nath urges eligible property-owners to utilize the scheme. Overall property tax-collection decreased to INR 1,758 crore this year....
West Bengal ends 2% stamp duty cut and 10% circle rate reduction
The West Bengal government has ended temporary tax breaks for the real estate industry, including a 2% reduction in stamp duty and a 10% decrease in the circle rate, which were introduced in October 2021 to aid pandemic recovery. These breaks, extended multiple times, expired on June 30th, 2024. The real estate industry, led by Sushil Mohta of CREDAI West Bengal and Merlin Group, expressed disappointment, highlighting that these breaks significantly boosted the sector and state revenue. Mohta urged the government to reconsider, suggesting further reductions in stamp duty and circle rate revisions. Despite concerns, the industry remains hopeful due to increasing urbanisation and rising disposable incomes....
Greater Noida Authority auctions 99,000 sq. metres of land for INR 500 crore
The Greater Noida Authority is auctioning five plots of land to raise at least INR 500 crore (approx. USD 61.7 million USD) and create around 8,000 new apartments. The online auction begins on July 2nd, with 99,000 square metres available across plots ranging from 3,999 to 30,470 square metres. Highlighting Greater Noida's green spaces, infrastructure, and NCR connections, the Authority aims to attract developers. Registration ends on July 23rd, with final document submissions due by July 29th. Successful bidders will gain immediate land possession, potentially transforming the city's housing landscape....
SEBI's new regulations open doors for small investors with SM REITs
The Securities and Exchange Board of India (SEBI) has introduced regulations for Small and Medium Real Estate Investment Trusts (SM REITs), offering small investors a new avenue into the real estate market. Unlike existing fractional ownership platforms, SM REITs will adhere to stricter rules, ensuring investments are made in completed, leased properties and providing clear cash flow management. With a minimum investment of INR 10 lakh, SM REITs make real estate more accessible, allowing investors to choose specific schemes and receive regular updates. This move promises to democratise real estate investment while maintaining transparency and security for investors....
Indian Real Estate witnesses surge in PE investments, USD 1.7 billion in H1 2024
Savills India reports a 42% year-on-year increase in PE investments, reaching USD 1.7 billion (INR 142 billion) in H1 2024. Commercial office assets dominated with 51% (USD 867 million) of the total, while residential investments surged to 47% (USD 803 million), reflecting growing investor confidence. Asian investors contributed 78% (USD 1.33 billion) of the Q2 2024 volume, mainly targeting office and residential properties in Bengaluru and Hyderabad. Arvind Nandan of Savills India attributes this growth to India's strong macroeconomic scenario, highlighting the positive impact on private equity investment activity across both sectors....
Motilal Oswal's first defence index fund in India raises INR 1,676 crore
The Motilal Oswal Nifty India Defence Index Fund, launched as the first passively managed fund focusing on Indian defence, had a successful start. During the New Fund Offer (NFO) period from June 13th to 27th, 2024, it raised a record-breaking INR 1,676 crore (about USD 20.6 million). Over 248,000 unique investors from various locations across India participated in the NFO. The fund tracks the Nifty India Defence Index, comprising 15 defence companies, reflecting strong growth rates. This initiative aligns with India's push for defence self-reliance and decreasing reliance on foreign imports. The fund's success signifies growing investor confidence in sector-specific funds within India's mutual fund industry....
Bengaluru sees 40% drop in flexible office leasing in H1 2024
According to Knight Frank India's latest report, flexible office space leasing in Bengaluru dropped by over 40% in the first half of 2024, falling from 2.9 million square feet in H1 2023 to 1.7 million square feet. However, flexible workspaces remain valuable for startups and companies needing adaptable office solutions. Nationally, co-working spaces accounted for 72% of flex space transactions. Despite the drop in flex leasing, Bengaluru's overall office space market grew by 21%, reaching 8.4 million square feet. This growth is driven by the establishment of Global Capability Centers (GCCs) and increased leasing by IT service companies....
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