Real estate industry expects inflow of foreign capital in the sector to be more than 15 per cent after the government eased FDI norms, a survey by industry body FICCI said.
With the real estate industry facing a huge slowdown for the past 2-3 years, the government last month relaxed foreign direct investment (FDI) norms in construction sector by removing two major conditions related to minimum built up area as well as capital requirement.
“According to FICCI survey, industry is happy and satisfied with current FDI reforms in construction development sector and has shown high level of confidence and optimism towards future flow of foreign capital into realty sector,” the industry chamber said in a statement.
The survey amongst various stakeholders comprising developers, investors and consultants was conducted to assess the mood of real estate industry and their perception on relaxed FDI norms for the real estate sector.
“Respondents were optimistic and felt that FDI reform measures will certainly increase flow of FDI into realty sector in coming months.
According to DIPP, Indian real estate has attracted about $24.16 billion FDI in construction development sector during April 2000 to September 2015.
However, FDI in construction development sector has been declining over the past few years due to regulatory issues and slowdown in Indian real estate, FICCI said.
Majority of the respondents fell that the commercial and retail sector would receive maximum foreign capital followed by the residential sector.
Almost all respondents felt that the easing of exit norms would cheer foreign investor community and have a major impact on attractiveness of Indian real estate going forward.
To attract FDI in realty sector, the industry has suggested that states should put in place a more efficient approval process system of projects.
The states should ensure better governance through measures such as single window clearance, time bound clearances, quicker legal remedies for investors and faster resolution of consumer woes through regulations such as state real estate regulators, among others, it said.
Godrej Properties sells 300 apartments in a week
Mumbai-based real estate developer Godrej Properties announced that it has sold 300 apartments within one week at The Trees, its flagship project in Vikhroli, Mumbai. This represents more than 80 per cent of the 374 apartments it opened for sale in the first phase of this project. The value of apartments sold is in excess of Rs700 crore making this Godrej Properties’ most successful ever launch in terms of value of real estate sold. This is also one of the country’s most successful recent launches.
The Trees mixed-use development contains a commercial precinct spread across 9.4 acres, which houses Godrej One, the Godrej Group’s global headquarters. Commenting on the development Pirojsha Godrej, Managing Director & CEO, Godrej Properties, said, “We are thrilled with the customer response to the launch of The Trees in Vikhroli. We will do everything possible to ensure we deliver our customers an outstanding and innovative project.”
Housing.com to get $50 million from Japanese bank
Japan’s SoftBank is set to offer $50 million funding to housing.com. The Mumbai-based start-up, which is backed by SoftBank, Falcon Edge Capital and Nexus Venture Partners, has already raised $100 million.
According to a senior executive from Housing, SoftBank would be investing $50 million in the start-up in “December or latest by January”.
In August, Housing trimmed its verticals and laid off 160 people as part of its growth strategy. Another round of lay-offs was effected in November and the company was able to reduce its burn rate.
The start-up, founded in 2012, has also brought together its sales and marketing division to strengthen it and form “better synergy with monetisation and focus on core fundamentals”.
Of its five verticals — rent, buy, land, short stays and commercial — Housing has decided to focus only on the buy-sell segment.
Mumbai, B’luru to lead in Grade A office stock
Mumbai and Bengaluru are expected to lead the country in terms of total operational Grade-A office stock of 100 million sqft and about 93 million sqft, respectively, by the end of 2015, according to a study.
Strong demand from IT occupiers for relatively larger spaces is helping Bengaluru to build more, which will gradually narrow down the gap in operational stock of both these cities, the study said.
The study titled 'Housing for All: Catalyst for development & inclusive growth,' was conducted by The Associated Chambers of Commerce and Industry (ASSOCHAM) jointly with property advisory firm JLL.
Amid tier-II cities, Pune is expected to lead the market in constructing new office spaces thereby adding about 45 million sqft space, it said. According to the study, the total stock of Grade-A office space across top seven cities is likely to settle at 440 million sqft by end-2015.
Robust take-up of about 31 million sqft is projected for 2015 while a total of about 34 million sqft of office space is expected to become operational.
“Over the past few months, an improvement was seen in occupiers' sentiment in commercial real estate”, said D S Rawat, secretary general of ASSOCHAM while releasing the findings of the study.
“With a pro-business government at the Centre, the office sector is expected to see a lot more traction and various multi-national (MNC) occupiers and investors entering the country”, said Rawat.
During the second half of 2015, an improvement in business sentiment will likely result in greater confidence and implementation of expansion plans will result in an increase in net absorption, the study said. — Agencies