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In seven cities, net leasing of office space to reach 90-95% of the pre-Covid level FY 23 Report

“Net leasing of commercial office space (Grade-A) will reach 90-95 percent of the pre-pandemic level next fiscal, up from an estimated 70-75 percent in the current one, with a return to office gathering steam and new hiring picking up strongly,” said a statement.

In seven cities, net leasing of office space to reach 90-95% of the pre-Covid level FY 23 Report

According to rating agency Crisil, on new hiring and retrieval of employees to workspace, during the next fiscal year, across seven major cities the net leasing of the office space will reach 90-95 percent of the pre-COVID-19 level. Net leasing refers to the consumption of new office spaceless areas vacated by renters.

“Net leasing of commercial office space (Grade-A) will reach 90-95 percent of the pre-pandemic level next fiscal, up from an estimated 70-75 percent in the current one, with a return to office gathering steam and new hiring picking up strongly,” it said in a statement.

The growth in net leasing and constant rental collections, which had not declined considerably, will confirm that the credit profiles of commercial real estate holders continue to remain stable, Crisil said.

The agency said, during the last fiscal year net leasing almost halved to 20 million square feet as consumption of new spaces was tepid and some renters even vacated office premises.

The statement said, “Leasing remained modest in the first half of this fiscal, too. With supply exceeding demand, market occupancy reduced to 85 percent in September 2021, from the pre-pandemic mark of around 89 percent in March 2020.

“That said, the leasing activity is expected to pick up from the fourth quarter of this fiscal and occupancy to improve to around 87 percent next fiscal, closing in on the pre-pandemic level.”

As of March 2021, the top-seven cities which include Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-NCR, and Pune — have an operational stock of around 625 million square feet.

Everything You Need to Know about Reverse Mortgage

Everything You Need to Know about Reverse Mortgage

A reverse mortgage is a type of loan that allows homeowners ages 62 and older, typically who’ve paid off their mortgage, to borrow part of their home’s equity as tax-free income. Unlike a regular mortgage in which the homeowner makes payments to the lender, with a reverse mortgage, the lender pays the homeowner.

Established in 2007 by the Union Government of India, this scheme was launched to help senior citizens against their medical bills and increased cost of livings.

The major feature of this scheme is that the homeowners can use the residential property to live until their death through the reverse mortgage.

Who can avail Reverse Mortgage?

The applicant age must be more than 62 years and the co-applicant i.e. the spouse must be above 60 years of age. Owners of a self-acquired, self-occupied residential house or flat, located in India. The titles should be clear, indicating the prospective borrower’s ownership of the property. Property should be free from any encumbrances. The life of the property should be of minimum 20 years. Property should be the permanent primary residence of the individuals.

How to apply for Reverse Mortgage?

  • After reading all the conditions, the applicant can apply for the reverse mortgage with the required documents.
  • The lender/bank will evaluate the value of the property taking into account various factors including the condition of the property, its demand in the market and the value of other properties at par with it.
  • Periodic payment of loan decided after taking into consideration price fluctuations and margin of the interest cost.
  • The mortgaged property gets reevaluated once every 5 years and borrowers may ask to increase the amount of loan, in case the value of the property inflates. Alternatively, a lump sum amount can also be procured from the lender.
  • The interest paid on the reverse mortgage could be floating or fixed depending upon the market norms.
  • Loan can be availed in monthly, quarterly or yearly installments. It can also be procured in a lump sum by the borrower.

Is tax applicable on Reverse mortgages?

The reverse mortgage is treated as a loan, not an income. Hence it is not liable for taxation. However, in the course of repayment of the mortgage loan; any capital gain arising attracts a capital gain tax.

How Settlement Works in Reverse Mortgage

The liability to repay the mortgage loan comes when the last surviving spouse dies. In that event, there are two ways to settle reverse mortgage either the heirs of the property may arrange to settle the loan amount along with accumulated interest to receive the ownership of such property, or the bank arranges to sell off the property to recover the loan amount. However, if the bank receives an amount greater than the loan amount together with accumulated interest then that extra part is provided to the legal heirs of the property. But if the property sold gets less than the loan amount, the remaining amount is recovered from the legal heirs of the property.

Reverse Mortgage will be invalid if borrower:

  1. Do not stay for a year in the property against which mortgage loan is acquired.
  2. Rent a small portion of the property.
  3. Add name in the property title.
  4. Fails to insure the house or fail to pay the property tax.
  5. Abandons or donates the property.
  6. Declared as bankrupt.

What happens when an applicant outlive the tenure?

If the borrower or his/her spouse outlives the period of tenure, the bank cannot get the property vacated to recover the loan. Bank will have to wait till the borrowers die to settle the loan amount. But after the completion of tenure, the bank stops the monthly installment payments to the borrower.

Although these rules and regulations for the reverse mortgage loan may seem stringent to some, they are designed with the borrower’s best interests in mind and are truly beneficial to you as a borrower. These regulations and rules are meant to encourage borrowers to use this great financial tool as part of an intelligent retirement planning strategy, which in turn solidifies the overall strength of the reverse mortgage loan product.

Bajaj Finserv Cuts Home Loan Interest Rates up to 6.70%

Bajaj Finserv Cuts Home Loan Interest Rates up to 6.70%

It is a common fact that Bajaj Finserve is one of the most diverse and dynamic financial companies in India. If you’re waiting to buy your first real estate, or if you want to take advantage of low-interest rates by transferring your mortgage balance, Bajaj Finserve is perfect for you to buy your dream home.

Getting a home loan from Bajaj Housing Finance is a quick and hassle-free process. Salaries and professionals can benefit from mortgage rates of only 6.70% * per year, with EMI as low as Rs. 645 / lakh*. In addition, you can choose a period of up to 30 years, which makes repayment affordable in the long run.

Simple mortgage standards, minimal documentation, and on-site services guarantee maximum convenience when you start your mortgage journey. It also provides fast processing and payment for smooth applications from start to finish.

If you have an existing mortgage, you can get the most out of our capabilities by sending your mortgage balance to us. With a balanced transfer service, you not only have the opportunity to take advantage of more competitive interest rates, but you also have the opportunity to take advantage of substantial additional loans with no end-use restrictions.

Bajaj Finserv not only offers special interest rates but also other benefits such as speedy disbursal, immediate approval, etc. so you can end your search.

Rent for retail space soars 11-17% in Delhi during July-September this year

“Rental inching back to pre-COVID levels as market activity strengthens,” said global property consultant Cushman and Wakefield (C&W) through its report ‘Marketbeat- Delhi- NCR, Retail Q3 2021’.

Rent for retail space soars 11-17% in Delhi during July-September this year

According to Cushman and Wakefield report, high-street retail shops are seeing an increase in rents as Indian capital improve its way through Covid. Markets like Khan Market, Connaught Place and South Extension have recorded an 11-17% increase in rents during July-September as compared to the previous year same quarter.

“Rental inching back to pre-COVID levels as market activity strengthens,” said global property consultant Cushman and Wakefield (C&W) through its report ‘Marketbeat- Delhi- NCR, Retail Q3 2021’.

During the September quarter, the Delhi-NCR region performed better in the retail section. Pointing out the performance, the consultant said, the early sign of economic improvement can be a major reason for the rise in retail leasing. Vibhor Jain, MD of North, Cushman & Wakefield said,”With rentals inching back to pre-COVID levels and accommodation on commercial terms narrowing, the only direction for retail in the coming months is upwards.”

The report further states that improved vaccination drive and decrease in Covid cases have also played a key role in improving the economy that gave rise to high consumer confidence.

The consultant found a 12.5 per cent increase in rentals of high street locations in Khan Market. The rental is up by Rs 1,350 per square foot during the July-September quarter compared to the previous year rental rates. In South Extension I & II, the rent is increased to 16.7 per cent in the same quarter this year. The market rent rate is up by Rs 700 per square foot.

Further, the famous Connaught Place recorded an increase of 11.1 per cent in rents which is Rs 1,000 per square foot. The increases in rent rates of these markets are the same in percentage which indicates the same rent growth across the capital.

“Landlords are demanding the pre-COVID rents after supporting retailers with rent waivers or staggered rentals to tide over the pandemic period. With the fears of third-wave subsiding to a great extent, landlords want to limit any further rent waivers, especially after the income loss borne by them during last five quarters,” C&W said.

The consultant further said as the businesses go back to normal and pandemics fade; the normal lease terms would be the same across the boards. In the report, “Retailers with a revenue-share arrangement with landlords have also begun to share a higher proportion of the revenue with increased consumer spending. However, some new transactions are being structured at staggered rentals on a case-to-case basis depending on the negotiations between retailers and landlords.”

Main street shops are widely in demand as they recorded new leases and store openings of around 0.13 million square feet combining markets including Khan Market, South Extension, Green Park, Defense Colony, and more. The report mentions the rising occupancy levels for main street shops as the business activity goes back to normal.

Besides these market locations, the shopping malls in Delhi have also recorded improvement as retailers open their new stores in recently developed commercial projects, totaling 0.43 million square feet. The report states, “There have been instances of store resizing with a few retailers demanding smaller stores. Fashion & Apparel (particularly athleisure) and Food & Beverages (F&B) were the prominent retail categories active in both main streets and malls,” the report said. Adidas, Nike, Skechers, Puma, and Reebok expanded their retail presence across multiple locations. “Khan Market, which saw an exodus of retailers during 2020, recorded new space take-up by F&B retailers during this quarter. Big Chill, Third Wave Café, Dighent Café were among new cafes that took space in Khan Market.”

The rise in retail leasing signals the upcoming festive season as this sector was affected the hardest during the pandemic. Malls are now seeing increase footfalls as high as 70-75 per cent of the pre-Covid level during weekends. The retail outlets are now beginning to see improvement, and it is expected to increase further as the capital prepares for the festive season.

North Delhi has added a mall supply of 0.33 million square feet increasing the overall inventory to 27.1 million square feet by the ending of Q3 this year. ”Robust leasing by several brands in the new development along with additional space take-up by retailers in the existing malls led to a 37-basis points reduction in city vacancy, which now stands at 16.58 per cent in the third quarter,” the report said.

The report was prepared by US-origin Cushman & Wakefield. It is the largest real estate services firm that has 53,000 employees in 400 offices across 60 countries. In the year 2019, the firm earned revenue up to USD 8.8 billion providing services of property, facilities, and project management, leasing, capital markets, valuation, and other services.

Published by– PTI

Struggling Chinese developer Evergrande makes bond payment: Report

Chinese giant Evergrande is struggling to reduce its 2 trillion yuan ($310 billion) debt as the company fails to pay its borrowings prompting fear that might start a financial crisis.

Struggling Chinese developer Evergrande makes bond payment

Evergrande, a failing Chinese developer is having a hard time paying its multi-billion dollar debt which has affected global financial markets has paid $83.5 million this Friday to make an overdue payment to foreign bondholders, a report by a government newspaper agency.

Chinese giant Evergrande is struggling to reduce its 2 trillion yuan ($310 billion) debt as the company fails to pay its borrowings prompting fear that might start a financial crisis. To reduce fear among investors Chinese officials are trying to comfort by saying debt problems can be controlled and saying the debt issue will not cause any effect on the financial industry.

The company wired the money on Friday to a Citigroup account in terms of bond payment which was due September 23, a report mentioned by Securities Times, citing unidentified sources.

Real estate giant fails to pay its debt to investors in late September in US dollar-denominated bonds issued abroad. On Wednesday, the company said they have a 30-day grace period to make payments before it declared itself in debt defaults.

The Chinese government has been pressing the companies to reduce their debt levels for the long term.

Some economists say the government can resolve the issue of high credit if the real estate giant fails to pay its debts to Chinese banks and bondholders but the government is trying to hide the issue and avoiding bailout as it continues to force other companies to reduce reliance on debt.

China’s economic growth is unexpectedly low to 4.9 as real estate construction comes to a halt in the last three months ending in September. Experts say China’s economic growth is likely to decelerate if the financial curbs stay in place.

Published by– Money Control

Online building permission system to be implemented from March next year across all cities

At present, online building permission system has been made operational in around 2,500 cities, said Housing Urban Affairs Secretary Durga Shankar Mishra.

Online building permission system to implemented from March

To implement ease of doing business in the real estate, the government is set to launch its online building permission system across all 2500 cities by March next year, said Housing and Affairs Secretary Durga Shankar Mishra on Thursday.

The announcement came when the secretary was present at a conference organized by CII and JLL India. He also mentioned government achievement for sanctioning 1.14 crores homes under the Pradhan Mantri Awas Yojana-Urban (PMAY-U).

He highlights India’s growth in ease of doing business in the construction category which led the country to rank 27th out of 190 nations from 181st position.

At present, the online building permission system has been made operational in around 2,500 cities,” he said, adding that this has resulted in a reduction in compliance cost and time.

“I am confident that by March next year, we will implement this system 100 per cent in all cities,” the secretary said.

He mentioned that the online system is fully implemented across 19 states and union territories, and will be soon operational across all 36 states and UTs.

Giving importance to PMAY-U Scheme, Mishra said the government has successfully given sanctions on 1.14 crore houses and out of those houses 89 lakh are already in development. Moreover, he said 52 lakh homes have already been completed under the scheme.

“We have committed Rs 1.85 lakh crore for this scheme and out of that Rs 1.13 lakh crore has been already provided,” he said.

The secretary said the remaining homes under the scheme will be completed in the next 2 years.

Highlighting the real estate reforms, he said Real Estate (Regulation and Development) Act, known as RERA is successfully implemented in all the Indian states except Nagaland. The act has helped boost the real estate economy and brought transparency to the system.

He mentioned that around 70,000 real estate projects and 55,000 property agents are registered under RERA, and the RERA authority has resolved around 75,000 cases across regions.

He said new initiatives like Model Tenancy Act and Affordable Rental Housing Complex (ARHC) will bring new opportunities to the real estate people.

Mentioning the ARHC which provides affordable housing to migrants, he said private players are excited about the scheme and the government has already processed many applications.

He said in the last seven years, the government has given financial support and implemented new reforms to the real estate sector.

He told builders to adopt new technology in project construction and sales. He said e-commerce in the real estate sector has huge potential. He complemented industry bodies CREDAI and NAREDCO for starting their online e-commerce portals.

He praised the future of the real estate sector by mentioning that it is bright with exceptional economic growth.

Although the real estate industry was affected due to the COVID-19 pandemic in March last year, the sector has bounced back sales and launches during the October-December quarter of 2020 and January-March period this year, he said.

The second wave again impacted the sector during the April-June quarter of this year but the revival has started in September, the secretary said.

Stating that the Indian economy is witnessing a “V-shaped recovery”, Mishra said the economic growth will aid fast revival in housing demand.

Published by– Press Trust of India

NBCC to work as a property consultant for project worth Rs 375 crore in Haryana, Delhi and Rajasthan

The total cost of the project is Rs 285 crore approx. subject to the revision as per Haryana Schedule Rates (HSR) 2021 plinth area rates, says NBCC filing

NBCC to work as a property consultant for project worth Rs 375 crore in Haryana, Delhi and Rajasthan

On Wednesday, government-owned NBCC (India) Ltd announced to work as a property management consultant in the development projects of Haryana, Delhi and Rajasthan worth Rs 375 crore.

The company in its regulatory filing said that they got the work order for the construction of Phase III of BPS Government Medical College, Khanpur Kalan in Sonipat. The company will engage as a Project Management Consultant (PMC).

The filing also mentioned, “The total cost of the project is Rs 285 crore approx. Subject to the revision as per Haryana Schedule Rates (HSR) 2021 plinth area rates.”

In a separate filing, NBCC said, “it has been awarded the work order for engagement as an independent engineer for operations, management, and development of Jaipur International Airport.”

The state-owned firms work as a PMC and provide independent engineer services for Rs 12.40 crore including all taxes except GST, it added.

Furthermore, the firm has also been awarded construction work and infrastructure development at the University of Delhi. The company is the PMC for this project for worth 77.91 crores.

According to the filing, NBCC will work as a PMC for the construction of building for Institution of Eminence, the new hostel cum transit accommodation of the institute worth Rs 41.60 crore and 32.50 crores respectively. The construction includes increasing hostel size up to 1800 square meters, including the installation of a split air conditioner, LAN and ventilation system for Rs 3.74 crore.

Published by-Zee Business

Hiranandani Group to target millennials with its new residential project

The young generation is looking to buy homes in their early years of life to combat the unprecedented crisis.

Hiranandani Group to target millennials with its new residential project

Mumbai based real estate developer Hiranandani Group is now offering studio apartments in its new township located in Thane targeting the millennials.

The company is offering affordable luxury apartments that are specially made for the ‘new-age millennial.’ Young adults have surprised the real estate sector with an influx of buyers. The generation is well-educated and technology-driven that believes in career progression in various sectors. The rise of Indian economic and rising job opportunity has increased the annual income of new-age individuals.

Furthermore, the young generation is looking to buy homes in their early years of life to combat the unprecedented crisis.

Highlighting the importance of millennials, Niranjan Hiranandani, MD of Hiranandani Group, “We sell holistic living in a township culture and not just an apartment. Hiranandani Homes encompasses values like work-life balance, community living, township conveniences, and sustainable ecosystem to enrich the quality of life and offers a value proposition to the homebuyers.”

“Today’s insta millennials desire a multifunctional, easy-upkeep, relaxed life with all comforts in proximity. This Ivy League generation post-Covid trauma is considering buying their first home, and Hiranandani Studios befits the taste and preferences. Open-living layouts, Flexi-modular furniture, home automation, motion sensory devices, voice commanding gadgets and wi-fi homes as a perfect mix of an upscale lifestyle”.

Published by– FE Bureau

Western corridor of Hyderabad sees exponential rise in real estate sector

The mid and the high-income budget segments witnessed the launch of a number of projects in July-September 2021.

Western corridor of Hyderabad sees exponential rise in real estate sector

Hyderabad: The western parts ranging from Kukatpally to Kondapur and Manikonda to Gachibowli have gained exponential growth in Hyderabad real estate. The demand in that particular region of the city remains strong even after most of the IT offices are closed for employees. The western suburbs such as Hitec City, Financial District, and their surrounding areas are dominating new property launches.

The report published by 99acres.com shows a 250 per cent increase in new launches in the first half of 2021 in the western corridor while overall new launches were muted in the July-September quarter of 2021. The report mentions high demand market share for 2BHK and 3BHK units measuring 1,100-1,300 sqft and 1,500-2,500 sqft respectively. Areas such as Kondapur, Gachibowli, Manikonda, and Madhapur are recording 35-50 per cent market share for 2BHK and 3BHK apartment units.

“The mid and the high-income budget segments witnessed the launch of a number of projects in July-September 2021. Healthy demand from potential buyers helped lift sales that initially witnessed a dip amid resurgence of Covid-19 cases in April 2021,” the report mentioned. Being in the centre of IT hubs, the western corridor is continued to dominate the market in terms of residential housing.

The property prices in the city are increasing after a long halt as the confidence in the market and the expectation of recovery takes place. The demand for budget homes has increased in the city especially houses ranging from 60lakh to 80lakh as the increase in land prices takes place.

Rental Housing

Though the capital market seems to be in recovery, the rental housing marketing is still performing badly as more than 55 per cent of companies delays their office re-opening schedules and emphasis their plans on work-from-home for up to 70% by December 2021. Although the full-fledged recovery of rental housing will take some time, the IT belt in the western corridor has remained popular among tenants.

Luxury Property Market

Buying luxury property has now become a trend of the city as it sees an increase in demand for villas and other premium spaces. It has recorded a rise in per square feet rates of villas, particularly new properties.

Areas such as Nanakramguda, Kokapet, Narsingi, and Kondapur in the western quadrant ruled the roost in terms of buyer enquiries, new launches, and residential sales. Latent demand for real estate facilitated the consumption of existing inventory, which was recorded at around 12,000 units in the first half of 2021, the report informed. The extended work-from-home and online schooling trends created the need for more space, and therefore, the demand for larger homes has gained momentum in Hyderabad.

Published by– Telangana Today

 

Housing prices to recover in the next 12-18 months, Motilal Oswal Study predicts

The study says mainly 20-25 will dominate the real estate space against the current 400-500 developers in the long run.

Housing prices to recover in the next 12-18 months, Motilal Oswal Study predicts

After a continuous decline for over six years, the property prices in India are starting to recover. While the market is still in its recovery stage the housing prices were at the bottom of the U-curve a few years ago.

Motilal Oswal analysis says developers will likely be careful of their inventory as the decrease in supply would mean an increase in the price. In the next four-five years, the price is expected to see a 1.3-1.4 times increase, or 4-5 per cent on a CAGR basis.

According to the study, the residential sector is finally seeing positive sentiment in relation to demand after long price depreciation in the property. It said the price momentum will likely to stay positive in the long run.

While property price remains low, it is expected to increase in the near term as demand gradually takeover supplies, said the study.

In the two months, the housing demand has seen a gradual increase and continues to grow from where it left before the second Covid wave. Besides, it has already absorbed a large chunk of completed and near-completed projects across the real estate market.

The report points to the consumers giving importance to property ownership as IT hiring continue to increase with salary revisions.

The demand-supply balance will ensure the recovery has more ground to control. Further, infrastructure development is leading to incremental habitable locations in urban centres, making sure that demand for housing is here to stay, it said.

Consolidation will benefit the large public and private organized players, said the report. Furthermore, it stated that strong developers have survived the market due to a sustainable cash crunch, but a large chunk of players exited the market.

The study predicts that in the next 6-12 months, supply will continue to be restricted by the large listed and private players. The expansion will only be done by these developers, while small developers will consolidate.

The study says 20-25 will dominate the real estate space against the current 400-500 developers in the long run.

Published by– Money Control

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