27 September 2021

FLASH UPDATE
INDIA REAL ESTATE

Plots & storeys

India's weekly real estate news & numbers

HIGHLIGHTS

Realtors hopeful as HDFC too offers loans at 6.7 'Demand For Flexible Workspace Growing
per cent Rapidly': Rahul Sarin, Skootr FinSave

Blackstone CEO shares plans to invest US$40 bn More than 0.1mn PMAY houses built in one
in India during meeting with PM month in Madhya Pradesh

Affordable housing! Karnataka government Sunrays Infrastructure to develop 0.14msf

slashes 2% stamp duty on flats below INR 4.5mn commercial space in Faridabad

Godrej Properties sells Noida project flats worth Google to buy office space in New York for
INR 5.75bn on launch US$2.1 billion

Hines to expand realty biz in India,aim for Century Real Estate reaffirms leadership in
partnership with local builders plotted projects in rising North Bangalore

Retrofitting outdated office stock holds China Evergrande crisis: Real estate firm closer to
investment potential of INR 90bn potential default after missing interest deadline

Novvy launches ‘buy-to-let’ investment product Noida’s Sports City scheme: Fate of 32K housing
in Chennai’s Mahindra World City units hangs in balance

Tier-2 cities in India are the next big market for NRI end users to dominate home buying trend in
co-housing, says Housr CEO Deepak Anand Indian market

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India Real Estate 27 September 2021
We highlight this week’s top real estate news:
 Realtors hopeful as HDFC too offers loans at 6.7 per cent: India’s biggest mortgage
lender HDFC Ltd on Tuesday announced a festive offer in line with State Bank of
India, offering home loans at 6.70 per cent, regardless of the loan amount for
customers with a credit score of 800 and above. Last week, SBI offered a similar
credit score linked home loan rate of 6.70 per cent. This was followed by rate cuts
from Punjab National Bank and Bank of Baroda. With corporate credit growth
subdued, lenders are competing to increase their share in the high margin home
loan market. Besides, competition, the ample liquidity in the banking system has
brought down home loan interest rates to a historic 15-year low. Real estate
developers expect the lower rates to boost housing sales this festive season, as
homebuyers prefer to buy properties during the auspicious period, including
Navratri, Durga Puja, Dussehra and Diwali. HDFC's festival offer is applicable to all
new loan applications irrespective of the loan amount or employment category and
can be availed of between September 20 and October 31. "Before this special offer,
the rate for salaried customers for loan above INR 7.5mn and credit score of 800
and above was 7.15 per cent and for self-employed was 7.30," HDFC Ltd said.
(Source)

 Blackstone CEO shares plans to invest US$40 bn in India during meeting with PM: In
a meeting with Prime Minister Narendra Modi on Thursday, Chairman and CEO of
the Blackstone Group, Stephen Schwarzman spoke about how he is “very optimistic
about India’s potential” and further discussed the promising investment
opportunities in India. During the meeting, Schwarzman stated his intent to invest in
various sectors including real estate, education, fashion, packaging and housing
finance. According to the statement released by the External Affairs Ministry, the
American global investment firm emphasised working on the National Infrastructure
Pipeline and National Monetisation Pipeline projects in India. Further, Blackstone’s
CEO explicated its vision to make India a ‘commercial real estate hub’ in the world.
Blackstone, which had started its operations in India in 2006, has so far invested
USD 60 Billion. The key areas of the company’s investments in India include private
equity, real estate, education, fashion, packaging and housing finance. Notably,
Blackstone Real Estate Fund is the largest owner of commercial real estate in India.
(Source)

 Affordable housing! Karnataka government slashes 2% stamp duty on flats below

INR 4.5mn: A deduction of 2 per cent is done. Earlier the stamp duty was 5 per
cent, which has been reduced to 3 per cent now. This will be applicable to flats
priced between INR 3.5-4.5mn. (Source)

 JM View: We do not believe the cut will have a meaningful impact on listed
developers as the average ticket size for them tends to be higher (above INR 5mn).
Even in absolute terms, a 2% benefit on INR 4.5mn amounts to INR 90K in savings
which is not very high. Maharashtra stamp duty cut was more impactful as ticket
sizes were much higher and discount was given for a short period of time. As per
Propequity, 22% of units sold in CY20 / CY21 in Bangalore lie in INR 3-5mn
bracket.

 Godrej Properties sells Noida project flats worth INR 5.75bn on launch: Realty firm
Godrej Properties on Wednesday said it has sold residential properties worth INR
5.75bn in a single day at its luxury project in Noida. In a regulatory filing, the
Mumbai-based firm informed that the company has sold 340 homes with an area of
more than half a million square feet on the first day of launch of the second phase
of its 'Godrej Woods' project. The total sales bookings in this project in the past six
months have touched about INR 11.4bn. (Source)
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India Real Estate 27 September 2021
 Hines to expand realty biz in India,aim for partnership with local builders: Bullish on
demand for premium housing and office spaces, US-based realty firm Hines plans to
expand its India business and is targeting to form at least three local partnerships for
projects across major cities. Hines, a privately-owned global real estate investment
firm, entered India in 2006 and has so far invested over US$ 400 million equity for
development of projects across major cities. In an interview with PTI, Hines India MD
and Country Head Amit Diwan said the company is in an advance stage of talks
with a few local builders and landowners for acquiring new projects through
development management (DM) fee model or joint ventures. "We are witnessing a
good demand for premium spaces in both housing and office segments. One of the
fallouts of the COVID pandemic has been that people are moving towards quality
products," he said. The market share of quality and trusted developers are rising
while others are finding it difficult in marketing their products, Diwan highlighted.
"We are receiving numerous proposals from local developers and landowners for
partnership. We are evaluating all proposals for tie-ups. We are in advance stage of
talks for two residential projects in Gurugram and one in Noida," he said. Diwan
said the company is also evaluating proposals of acquiring projects in Bengaluru,
Mumbai and Pune. "We expect to close at least three deals, most likely in
residential, during this financial year," he said. (Source)

 Retrofitting outdated office stock holds investment potential of INR 90bn: Landlords
and developers are missing investment opportunities and have a scope to upgrade
around 100 mn sq ft* of office space. The retrofitting of these assets has INR 90bn
worth of unrealised value in the top six cities as per Colliers’ latest report,
Revitalizing outdated buildings: A requisite. As per the report, the upgradation of
buildings will make them more investible, which investors and developers can then
bundle into a REIT. Currently, investors are betting on under-construction buildings
due to a lack of readily investible asset. (Source)

 Novvy launches ‘buy-to-let’ investment product in Chennai’s Mahindra World City:

Proptech startup Novvy Technologies Ltd, a real estate buying and investing
platform, has launched a real estate investment product in the Mahindra World City
project in Chennai, to offer “buy-to-let" assets for buyers in India and Indians living
overseas. A block of 100 apartments within the Mahindra World City complex will
be fully managed by Novyy on behalf of the buyers, where the company will provide
asset management services to its buyers, including finding tenants, collecting rentals
and maintenance of the properties. Mahindra World City, at Chengalpattu,
Chennai, is developed by Mahindra Lifespace Developers Ltd. Domestic and NRI
investors can buy one-bedroom apartments at INR 2.04mn or 1.5-bedroom
apartments priced for INR 2.5mn. “We chose Mahindra World City as our first buy-
to-let product in India for its exciting price point and the rental market that the
region offers. There are over 65 corporates employing over 80,000 people in the
vicinity, and supply outpaces demand. We are confident that investors will never
have a dearth of tenants. In addition, rental yields in Indian metros are now capped
at 3%, whereas rental returns in such regions is much higher," said Ashish Saraff,
founder and CEO of Novyy Technologies. (Source)

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India Real Estate 27 September 2021
 Tier-2 cities in India are the next big market for co-housing, says Housr CEO Deepak
Anand: For us, the focus would be to enter tier-2 cities where both the student
population and working professionals are widely present. Such micro-markets for
Housr exist as part of large markets like specific sectors in Gurgaon, Noida, Pune.
We are essentially a working professional brand and also cater to post-graduate
students as the overlap between the two segments is quite high. However, at the
moment we do not do dedicated college student housing. We are looking to add
over ten tier 1 and 2 cities in India serving over 30,000 beds across over 50-75
Grade-A stand-alone properties in the next 18-24 months. After starting operations
in NCR, Housr has also forayed into Pune and is now expanding their operations in
Hyderabad, Chennai and Bengaluru with 35 locked-in properties at the moment.
Towards the end of 2021, the aim is to enter Ahmedabad and Indore that have a
large population of single working professionals and there is a definite product gap
in the market. (Source)

 'Demand For Flexible Workspace Growing Rapidly': Rahul Sarin, Skootr FinSave:
With robust occupier interest, the requirement towards the flexible space segment
continues to grow in 2021, as ‘core + flex’ approach is at the forefront for all office
stakeholders. As enterprises display an increased inclination towards agility/flexibility
to meet real estate requirements, the need for lease flexibility, fully furnished,
private/semi-private, serviced facilities with a focus on clientele will continue to rise.
With flexible workspace share growing in the overall real estate pie, markets like
Bangalore and Hyderabad continue to drive demand for IT sector; Delhi-NCR will see
a rise in corporate and backend offices. Along with these cities, Mumbai being the
hub for BFSI sector will see a growth for flex demand. (Source)

 More than 0.1mn PMAY houses built in one month in Madhya Pradesh: Under the
Pradhan Mantri Awas Yojana-Housing for All (Rural), the panchayat and rural
development department in Madhya Pradesh has constructed 0.1mn houses in the
past one month. Incidentally, the work has been done in the peak of the monsoon
season, which is not quite a favourable time for construction of houses. Generally,
the construction of a house takes 120 days, but due to the department’s swiftness,
the dream of houses for the poor is getting fulfilled in a short span of time. It is
noteworthy to mention that during the Covid-19 pandemic underprivileged people
were also constructed across the state, which was an achievement, stated the rural
development department on Thursday. (Source)

 Sunrays Infrastructure to develop 0.14msf commercial space in Faridabad: Sunrays

Infrastructure Pvt Ltd, will develop 0.14msf of commercial space in R Plaza 79 in
Sector-79, Faridabad, Haryana. The phase one of the project include 0.13msf of
commercial space and revenue potential of the project is INR 2bn. The company had
acquired the 2.7 acre land in 2011 and aims to complete the project within two
years. (Source)

 Google to buy office space in New York for US$2.1 billion: Google plans to buy an
office building in Manhattan for US$2.1 billion, as the Alphabet Inc-owned search
engine giant joins fellow technology companies in investing in prime real estate,
even as hybrid work models become common. The deal for St. John's Terminal site
in New York City, which Google currently leases, will complete in the first quarter of
next year, Chief Financial Officer Ruth Porat said in a blog post on Tuesday. The
space is expected to open by mid-2023. Tech giants, with billions of dollars in cash
reserves, have been taking advantage of lower office building prices across cities in
the United States. (Source)

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India Real Estate 27 September 2021
 Century Real Estate reaffirms leadership in plotted projects in rising North
Bangalore: Century Real Estate, a leading real estate developer and one of the
largest landowners in South India, today announced that over 75% of inventory, in
their plotted development project Century Seasons, has been sold in just a quarter.
The company’s other plotted development project, Century Greens, sold out entirely
within two quarters. The Bengaluru real estate market has witnessed tremendous
demand for investments in plots & housing despite the second wave and two-
month lockdown in May and June. (Source)

 China Evergrande crisis: Real estate firm closer to potential default after missing
interest deadline: China Evergrande inched closer on Friday to the potential default
that investors fear, missing a payment deadline in one of the clearest indications yet
that the developer whose debt struggles have spooked markets is in dire trouble.
The company owes US$305 billion, has run short of cash and investors are worried
a collapse could pose systemic risks to China’s financial system and reverberate
around the world. A deadline for paying US$83.5 million in bond interest passed
without remark from Evergrande and bondholders had not been paid nor heard
from the company, two people familiar with the situation told. The firm is now in
uncharted waters and enters a 30-day grace period. It will default if that passes
without payment. (Source)

 Noida’s Sports City scheme: Fate of 32K housing units hangs in balance: “The
solution to the Sports City projects is yet to be found and no timeframe could be
offered at the moment. The authority is communicating with the state government
in this regard,” said Sanjiv Mittal, chairman of the Noida authority. The Noida
authority had in January this year decided to ban the sale and purchase of plots and
flats on group housing land allotted under the scheme in 2011. It also put a ban on
issuance of commencement certificate to allow construction on new realty projects
in sectors 79, 150 and 151, where land was allotted under the scheme. The
authority took the decision after it realised that the most of the developers has
hardly developed any sports facilities and flouted rules. (Source)

 NRI end users to dominate home buying trend in Indian market: In a significant
trend post-Covid-19 pandemic, a much higher percentage of NRI respondents in the
latest CII-Anarock consumer sentiment survey are scouting for properties for self-
use. At least 53% of NRI respondents who will buy properties in India in the coming
months are expected to buy for end-use whereas 47% will do so for investment.
The pre-Covid-19 survey in H1 2019 saw a reverse trend, with the end-use to
investment ratio at 32:68. (Source)

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India Real Estate 27 September 2021

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Definition of ratings
Rating Meaning
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months. Total expected return includes dividend yields.
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in the range of 10% downside to 15% upside from the current market price for all other stocks, over the next twelve months.
Sell Price expected to move downwards by more than 10% from the current market price over the next twelve months.
* Large-cap stocks refer to securities with market capitalisation in excess of INR200bn. REIT refers to Real Estate Investment Trusts.

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India Real Estate 27 September 2021
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