Stakeholders however welcomed the move to allow banks to invest in REITs and InvITs.
NEW DELHI: Real estate players remained unsurprised as Reserve Bank of India kept the repo rate unchanged at 6.25% on Thursday.
“The decision to keep the repo rate unchanged at 6.25% is on expected lines because of the liquidity scenario and inching up of inflation,” says Shishir Baijal, Chairman & Managing Director, Knight Frank India.
The real estate players however welcome the central bank’s move to allow banks to invest in Real Estate Investment Trusts (REITs) and infrastructure Investment Trusts (InvITs) within the 20% umbrella limit. They expect that the move will bring-in much needed liquidity in the commercial real estate segment.
“It will allow banks to invest in an important asset class thereby providing much needed boost to this segment. Owing to better liquidity, the cost of capital for developers in the commercial segment will come down in the future,” says Surendra Hiranandani, Chairman & MD, House of Hiranandani.
According to Sachin Sandhir, Global Managing Director – Emerging Business, RICS, India’s REIT potential is quite large but it has not yet taken off. Bank’s involvement will help the commercial real estate segment by bringing in much needed liquidity. It will set the momentum going for REITs.
There were however few developers who wished for a rate cut in order to give a fillip to the real estate market.
Pratik K. Mehta, MD, Unishire, Bangalore avers, “The status quo on repo rate will be a dampener for real estate. Input costs are rising and margins are shrinking for developers and affordability is being hit for end users who might have to pay higher prices for homes with the increase in raw material cost and unless borrowing costs don’t come down, there will be a challenge for buyers to make the investment. Already the real estate market is affected with the demonetisation effect and sales have slowed down to an all time low and added to the affordability and higher costs, will make it even more difficult for an end user to afford a home.”
Here is how other industry player reacted to the RBI’s move keep repo rate unchanged:
Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP
“It is an expected move taken by the RBI Governor to keep repo rate unchanged as the Reserve Bank of India had reduced the repo rate by 0.25% to 6.25%. In October to signal lower interest rates in the economy. Hence RBI have done their part, the banks on the other hand have not been generous enough to pass on the entire benefit of this reduction to end consumers. Since now the banks are flushed with cash and don’t have to worry about reviving their bottom lines, they should now be passing the benefits of the previous rate cuts to the end consumers. It will be indeed the single biggest factor in kick starting the economic activity in this stagnant phase. Hence we sincerely hope that both Finance Ministry as well as the RBI push all the banks to transfer the entire benefit to the end consumer for whose benefit it is meant; else these moves will severely stop short of benefiting the consumer.”
Manoj Gaur, President CREDAI-NCR & MD, Gaursons India
It is great to see that the Reserve Bank has been so persuasive towards reduced lending rates in the market, specially from the end of Financial Institutions. Increased Reverse Repo rate would mean RBI withdrawing money from the market at a higher rate, hence filling the hands of the banks further. However, it’s on the part of the financial institutions to convert these indirect benefits into something substantial for the end users and promote healthy business environment in the market.
Gaurav Gupta, General Secretary, CREDAI – RNE
A recalibrated MSF standing reduced at 6.5 percent would mean that the overnight borrowing of banks from RBI would come at a lower rate giving a freer hand to banks at lending. However, some direct rate cuts could have been also beneficial in the short term for the realty sector because with the recent data release by RBI which states that HPI has picked up in the last calendar year would have allowed the realty sector to ride on improved sentiments from all corners of the economy.
Vikas Bhasin, MD, Saya Group
Also with global growth indicators showing signs of stronger activity in most of the Advanced Economies and further indicators pointing to a modest improvement in the macroeconomic outlook of the country might have prompted the apex bank to keep a cautious approach towards any major changes in the key rates. However, it was very heartening to see that the RBI has been very accommodative towards reduced lending rates in the market and hence has passed on benefits indirectly to the government allowing them the necessary room to work upon.
Dhiraj Jain, Director, Mahagun Group
In case of a low interest rate environment surrounding the economy and cash available in abundance, the risk of inflation moving up exists. Hence, the RBI doesn’t reduce the rates until it has been fully convinced about the inflation control; as even the inflation had been on a rise for the fifth straight month till February but has taken a downward trend in March which would be kept under strict vigil the next policy review allowing them the necessary cushion to work further on the key rates. Till then, even the financial institutions should also devise ways to offer indirect benefits to borrowers.
Rajesh Goyal, Vice President CREDAI-Western U.P. & MD, RG Group
This is not a surprise move by the RBI as everyone was expecting a stagnant approach towards the key rates. The market has been gaining stability and post the union budget, further ease could have been thought off on the cards. Even though the RBI has not provided any rate cut this time, fresh home loan borrowers should not worry much as they may still witness lowered EMIs because amidst intensifying competition among the lenders, the banks might be forced to start cutting down the interest rates themselves.
Ashudeep Batra ED, Exotica Housing
RBI seems quite focused upon controlling the inflation in country but lowering repo rate could have been a better step for housing sale after assigning industry status to affordable. Again this is indication for banks to bring down interest rate based on earlier repo rate cuts. Home buyers have to wait for lower home loans and ready to move in project will be only option to avoid multiple expenses.
Pawan Jasuja Director FindMyProperty
Unchanged Repo Rate announcement decided to seize on to the repo rate at 6.25 per cent. Realty sector was expecting a additional rate cut at this stage which would have helped in improving market sentiments, This does not seems to bother home buyers much as property prices are under control and banks have already reduced their interest rates upto 8.35% and Govt. Subsidy under PMAY also this will not only help developers initiate more projects at favorable capital but also create wider offerings benefiting home buyers.
Suresh Garg, CMD Nirala World and Secretary CREDAI Western U.P
The sector was looking forward for RBI to reduce the repo-rate by at-least 25 basis points and this could be a big boost for home buyers. The government’s decision in the budget to give industry status to affordable housing has given a huge relief to the sector and reduction in interest rate would have been further icing in the cake in the beginning of the current fiscal. Currently RBI has maintained the status quo but we expect a reduction in next quarter.
Ashwin Sheth, CMD, Sheth Corp
“Although the rate was kept on hold citing risks to inflation from monsoon and GST, but a rate cut at this stage would have helped in lowering the home loan interest rates further after the Maharashtra Government hiking the ready reckoner rates by close to four per cent last week.
This could have made home buying a reality for most buyers who have been eagerly waiting for the rates to cut down. Since demonetisation, banks were flooded with excess liquidity due to a huge surge in deposits by cash holders. However the hike in the reverse repo rate would help to squeeze the excess liquidity and will help bring stability in property prices.”
Navin Makhija, Managing Director, The Wadhwa Group
“The RBI has once again shown uniformity by maintaining status quo with the key lending rate remaining unchanged at 6.25% in its first bi-monthly policy of the fiscal year 2017-18. We expected some reform in the policy. Nonetheless, we support this decision and will adopt a wait and watch approach for now. We hope the RBI takes measures to cut interest rates in the near future to complement the initiatives taken by the Government to ensure stabilisation of the real estate market.”
Rajeev Talwar, Chairman, NAREDCO & CEO, DLF
The first bi monthly Monetary Policy has given a big boost to the launch of REITs as a credible and long term investment alternative in India. The RBI’s decision to allow banks to invest in REITs within the overall umbrella of 20% of their net owned funds is a huge positive. This step now has the potential to usher-in large number of REITs’ listing in India by offering a safe asset class to invest in and also provide competition to foreign institutions. For banks it offers an additional important asset class for investing. For commercial real estate companies, once REITs pick up, it will bring liquidity, and free up capital that will help lower overall costs. We now look forward to detailed norms and guidelines for banks’ investment in REITs by May end.
Source: ET Realty
Commercial Real Estate Space Gets A Revamp From InstaOffice
With the advent of co-working solutions in India, one would think the trouble of finding an office space would be over. Even though functional workstations are in supply, the demand for high quality productive spaces at affordable rates is still not being met. InstaOffice steps in right here.
Vikas Lakhani, co-founder of InstaOffice said, “There were two kinds of players in the serviced office space – co-working and premium business centres. On one end of the spectrum, co-working spaces target early-stage companies with economical plans and on the other end, business centres offer the flexibility of a small office at nearly 40% premium over a traditional lease office”. He explained that they want to bridge the gap and provide a solution which would be long-term and economically viable.
The startup’s model rests on disrupting the existing value chain of commercial leasing. It will partner with landlords whereby they can earn high rental yields from their spaces. This way, even the customers will get a high degree of flexibility.
Lakhani added, “Your office needs would be very different depending on the nature, age and size of your business. Hence, we have created multiple offerings that allow us to address the office needs of a very diverse user-base”.
As a solution to the growing end-to-end office space requirements, Lakhani with co-founder Devendra Agarwal in 2016 founded InstaOffice which offers furnished office spaces, meeting rooms, virtual offices, conference rooms and business centres. They started with their business centre in Gurgaon. Today they have more than 0,000 sq ft of area under management, spread across 10 centres in three cities, namely Bangalore, Delhi and Gurgaon.
Lakhani also mentioned their interest in cities like Indore, Jaipur, Pune and Hyderabad over the next three to four quarters. The company has raised its capital from external investors like Globevestor. He said, “We have had just one round of investment so far and most of them have from industry experts or others who have had extensive experience investing in the Indian startup ecosystem”.
Lakhani believes entrepreneurship is a learning process where it is inevitable to make mistakes. “One needs to have the ability to work in an environment where one would not get a lot of handholding – where one basically learns by doing,” he concludes.
ANAROCK Property Consultants Acquires LJ Hooker’s Indian Operations – Redwoods
Strategic acquisition to boost ANAROCK’s capability in integrated real estate solutions, dedicated design center in Bangalore
Bangalore, August 30, 2017 – Consistent with its focus on becoming India’s leading residential real estate solutions company, ANAROCK Property Consultants Pvt. Ltd. has announced the acquisition of Redwoods, the Indian arm of LJ Hooker, based out of Bangalore. The acquisition was closed today, with ANAROCK absorbing all Redwoods employees.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “The acquisition of LJ Hooker’s Redwoods is in line to our overall business strategy and will help us augment our operations across key southern markets. It will give us unparalleled competitive advantage in offering customized real estate solutions. With its strong presence and unique multi-pronged approach, ANAROCK is decoding unmatched value for both B2B and B2C clients.”
ANAROCK Property Consultants is already redefining the residential real estate services sector in India by offering integrated solutions through a hybrid model of online and offline convergence. The company launched its operations under its flagship brand name of ANAROCK in June 2017 and is well on its way to cross INR 100 crores of revenues for 2017 calendar year. The firm has aggressive plans to achieve INR 250 crores of revenues in 2018.
With a growing team of over 750 professionals, ANAROCK aims to cross 1000 in employee strength by the end of 2017. The company currently operates in all key property markets across India – Mumbai, Chennai, Bangalore, Gurgaon, Noida, Hyderabad, Kolkata AND Pune, with an international presence in Dubai.
About ANAROCK Property Consultants Pvt. Ltd.:
ANAROCK Property Consultants Pvt. Ltd. is one of India’s leading real estate services company having diversified interest across real estate value chain. Anuj Puri, ANAROCK Group Chairman, is an acknowledged thought leader in the Indian real estate industry and numbers among the most established expert on India’s real estate opportunities, both in India and across the globe. With a career spanning over 27 years, Anuj Puri was the former Chairman & Country Head of international property consultancy JLL India.
The ANAROCK Group’s key strategic business units comprise of residential broking and advisory services to clients, investment services, debt, equity and mezzanine funding, and research and consulting. ANAROCK’s residential team consists of the industry’s finest residential real estate professionals who understand the ever-changing consumer needs and market trends.
With its vast experience and expertise in serving the most reputed developers, corporate houses, portfolio investors and individual investors makes ANAROCK India’s pre-eminent residential real estate services firm. The company’s investment arm has built a revolutionary business model of bulk-purchasing residential apartment inventory through a proprietary investment fund. For further information, please visit www.anarock.com
About LJ Hooker:
Established in 1928 by Sir Leslie Joseph Hooker, LJ Hooker has grown to become Australasia’s best-known real estate brand (Galaxy BrandTrack 2015). It is one of the largest residential and commercial sales and property management organizations in the industry with more than 8,000 sales professionals, property managers and support team members in 730 franchised offices.
LJ Hooker has an exciting and impressive heritage of innovation, perseverance and bold decision-making. The company’s strong people-focused culture was established and defined by its founding visionary: Leslie Joseph ‘LJ’ Hooker in 1928. A constant innovator, entrepreneur and devotee of best practices, he changed the way real estate business was conducted in Australia. Today, LJ Hooker is Australia’s best known real estate brand.
About Redwoods Projects Pvt. Ltd.
Established in 2006 with the philosophy of providing customized real estate solutions to clients, Redwoods has expertise in fund management, deal structuring, fund syndication, joint developments and unique transactions. With over 25 million sq.ft. of leasing experience across all major markets, Redwoods have nurtured long-standing relationships with all major developers across India.
Redwoods partnered with BNP Paribas Real Estate in 2008 to jointly provide real estate services in India. The company successfully exited the Joint Venture in 2010 after establishing a successful realty arm in BNP Paribas.
5 Real Estate Tech Startups in India You Can’t Ignore
The real estate sector is one of the biggest contributors to the country’s economy. It is no wonder that the sector is booming with newest technologies that are changing the age-old industry norms and raising industry standards. Here are five tech start ups that you need to take note of:
If you have ever faced a rental problem and most of us have, this is the thing that you need. NestAway is India’s home rental network for singles that offers rental solutions via latest technology and best design.
Founded in January 2015, NestAway is an app that lets you find, book, pay, move-in and out of a rental home anywhere in India. They basically manage both parties in a rental situation and turn unfurnished houses in to furnished homes and offer them at affordable prices on sharing basis. Deepak Dhar, one of NestAway’s four cofounders, says “It’s a new concept for owners and a solution for tenants. Plus we’re solving the youth housing crisis of upwardly mobile urban migrants in cities.” It began in Bengaluru and today is spread in 9 metro cities of India.
A Bangalore based real estate search portal, NoBroker eliminates broker and directly connects flat owners and tenants. Founded in 2014, NoBroker claims to work on the basis of technology that identifies and abolishes brokers. Started as a rental platform, they have now forayed into brokerage free buy/sell property as well. They verify each listing to make sure they are owners and no middlemen. They offer maximum information in the most accessible format, thus saving you time, money and energy to actually go physically hunting for house.
Find the biggest market for investors here; all the opportunities that you won’t find on general market. SmartOwner brings forward some of the carefully curated investment opportunities from the fastest growing cities in India. Projects are vetted by law firm after meticulous checks. It verifies all the listing to make sure the pricing and specifications are in line with the market trends. Thus it offers well calculated risk and returns. People benefit from the curated high-return opportunities.
Approach helps you to conveniently and accurately manage scientific data which enables you to grow your business strategically instead of hit and miss methods. Real estate is a growing sector and it needs such solutions where management can take accurate decision based on solid data. Approach lets you manage your inventory from any location. Cloud telephony lets you track all your campaigns and calls from anywhere. Automated SMS and Email Marketing allow you to connect with your audience and also offer in-depth analytics of click-rate and subscriber activity. You can now even calculate the returns on investment from all your media spending and campaigns.
Established in 2013, Grabhouse is a no broker website that helps people find flats, flat mates and tenants quickly and without much effort. It is the first venture that is a 100 percent broker free house renting platform. It is able to achieve this by using powerful technologies that allow stakeholders to enhance their business. Their target group lies between 18-28 years; they are mostly students or young professionals who are looking for decent places to stay while saving a buck. Even on-ground assistance is provided after lead generation for a nominal fee.
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