21 - 04 - 2020

Guidelines for Restarting Construction Sites post LockDown ( By CREDAI

National)

CREDAI Bengal Daily News Update | 21.04.20

India real estate institutional investment down 58% in Jan-March

The decline was influenced by several events, including the COVID-19 outbreak and

several high-profile issues in the domestic banking and finance sectors in late 2019 and

early 2020.

Institutional investment into Indian real estate sector has declined 58% from a year ago to $712

million during the quarter ended March. Total investments in financial year 2019-20 witnessed

a decrease of 13% at $4.26 billion--the lowest for four years, showed a JLL India report.

The decline was influenced by several events, including the COVID-19 outbreak and several

high-profile issues in the domestic banking and finance sectors in late 2019 and early 2020.

“The impact of COVID -19 virus has been unthinkable in its scope. Investors are expected to

remain in a wait-and-watch mode, with caution and risk aversion is expected to drive the

dominant behavior of institutional real estate investors over next few quarters,” said Ramesh

Nair, CEO and Country Head, JLL India.

The impact of change in the investment climate was reflected in the asset allocation, as

investors parked more funds in more secure and stable office spaces. Investments in the office

sector rose to $2.9 billion during the year from $1.8 billion a year ago. The Mumbai

Metropolitan Region’s investments share grew to 43% of national investments in 2019-20 from

23% in 2018-19.

“Ongoing financial woes as well as an unprecedented global crisis of the pandemic have

unsettled the investment climate across the globe, including India. The currently situation is

extremely fluid and it is still too early to provide a detailed, quantitative assessment of the

COVID-19 impact on economic activity, industries and the real estate market,” said Samantak

Das, Executive Director and Head of Research, REIS, JLL India.

Das expects, office space followed by warehousing, could witness return of investments, while

residential sector to revive with government support and concessions.

Around $8.7 billion of platform funds were announced during 2017-2019, accounting for 60%

of the total funds since 2012. Warehousing sector attracted highest interest with 38% share of

funds announced as the sector witnessed transformation, post Good and Service Tax reform.

Office sector platform funds account for the second largest share of 29% as large investors

prefer direct acquisition of assets.

Newspaper/Online ET Realty (Online)

Date April 21, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/india-real-estate-

institutional-investment-down-58-in-jan-march/75260361

Out of USD 4.4 billion invested in office space during 2018 and 2019, investors have been

aggressively chasing returns as options of leased quality office spaces have reduced over the

years. Further, investors are entering into joint ventures, platform deals or forward sales with

more complexities to manage risks in under construction projects.

Sovereign wealth funds held $29 billion worth of assets under custody (AUC) in India as of

December 2019. Real estate accounted for 22% of the AUC, amounting to $6.6 billion. The

Union Budget had recently announced concessions for SWFs investing in infrastructure

including affordable housing and logistics, but recent declines in crude prices may impact their

surplus capital available for investments.

The IL&FS crisis brought a halt to real estate lending by non-banking finance companies

(NBFCs) and housing finance companies (HFCs) due to funding issues. A reduction in Non

Performing Asset levels and capital support from the government to the commercial banks has

led to gradual revival in lending to the real estate sector. Outstanding bank credit to real estate

developers grew by estimated Rs 26,200 crore between March 2019 and March 2020 registering

a growth of 13%. Ends

________________________________________________________________

Housing finance companies to see slower credit growth in FY21:

Report

Its vice president and sector head (financial sector ratings) Supreeta Nijjar said the Covid-

19 induced slowdown may impact the portfolio growth of HFCs in FY2021.

Housing finance companies are likely to see a slower credit growth of 9-12 per cent in the

current financial year as their disbursement may be impacted by the COVID-19 related

disruptions, says a report. The gross non-performing assets of mortgage financiers may also

increase to 1.8-2 per cent by March 2021, rating agency Icra said in a report.

Its vice president and sector head (financial sector ratings) Supreeta Nijjar said the Covid-19

induced slowdown may impact the portfolio growth of HFCs in FY2021.

"The estimated housing credit growth is likely to be 9-12 per cent in FY21 (lower than the last

three years' CAGR of 16 per cent). It is likely that people will defer their home purchases and

home improvement/extension decisions in the current fiscal, till they are able to achieve

stability in income levels/resumption of business activities," Nijjar said in a report.

Their credit growth is estimated to be slower in the first half of 2020-21 while the recovery in

the second half will be dependent on the overall economic turnaround, she said.

The loan growth of housing financiers in the last quarter of FY2019-20 is estimated to be at 11-

13 per cent as their fresh loans disbursement would have been impacted in March, she said.

"GNPAs in the housing segment is expected to increase to 1.8-2 per cent by March 2021 from

1.4 per cent as of December 2019 while slippages in the non-housing segment could be higher

with GNPAs increasing to 3-3.5 per cent in FY2021 from 2.1 per cent as on December 31,

2019," Nijjar said.

The liquidity of repossessed properties could get impacted, leading to delays in recoveries or

possibly higher losses on the sale of such properties, she said.

The rating agency said while the profitability indicators (RoE) are likely to remain range-bound

in FY20 between 13-15 per cent, a prolonged slowdown in growth and the Covid-19 related

impact on the asset quality could lead to an increase in the credit costs in FY2021.

"This could lead to a moderation in the profitability indicators for FY2021 by around 200-300

basis points," Nijjar said.

Newspaper/Online ET Realty (Online)

Date April 21, 2020

Link https://realty.economictimes.indiatimes.com/news/allied-industries/housing-

finance-companies-to-see-slower-credit-growth-in-fy21-report/75260077

The Rs 50,000 crore of additional TLTROs announced on April 17, 2020, and the additional Rs

10,000 crore of refinance facility to National Housing Bank (NHB) will support the immediate

liquidity requirements of HFCs to some extent, especially those operating in the affordable

housing space where collections are likely to be impacted more, the rating agency said. HV MR

________________________________________________________________

ED attaches over 120 immovable properties worth Rs 175 crore

It said a provisional order for attachment of the assets of Prakash Vanijya Private

Limited has been issued under the Prevention of Money Laundering Act (PMLA), its

director Mannoj Kumar Jain and others for allegedly cheating the Central Bank of India

of Rs 234 crore loan amount.

The Enforcement Directorate (ED) has attached 124 immovable properties worth more than Rs

175 crore of a West Bengal-based company in connection with a money laundering probe

linked to an alleged bank fraud case, the agency said on Monday.

It said a provisional order for attachment of the assets of Prakash Vanijya Private Limited has

been issued under the Prevention of Money Laundering Act (PMLA), its director Mannoj

Kumar Jain and others for allegedly cheating the Central Bank of India of Rs 234 crore loan

amount.

Of the 124 properties attached by the ED, 11 are in Chhattisgarh, 10 in West Bengal's

capital Kolkata and three in Jalpaiguri. The total value of the properties is Rs 175.29 crore, the

ED said in a statement.

The federal agency said it launched a PMLA probe against the company and its officials after

going through a CBI FIR and the properties were traced after "unfolding layered transactions".

Probe found, the ED said, that Letter of Credit (LC) facility was obtained by accused Mannoj

Kumar Jain and this was "misused" as LCs were issued without any underlying transactions by

using fictitious and shell companies and without any real business or trade.

"The LCs so opened were discounted by Jain through fictitious beneficiary companies and

funds were received back by him by round-tripping through his shell companies," it alleged.

"These released funds from bank were used for personal purpose and for settling other liabilities

through kite flying operations," it said.

The agency added that the accused, after availing credit facilities from bank, started acquiring

immovable properties.

"The purchase price of these properties were highly undervalued and balance amount were paid

in cash. These cash amounts were illegally generated out of defrauded amount from the banks,"

it said.

Newspaper/Online ET Realty (Online)

Date April 20, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/ed-attaches-over-120-

immovable-properties-worth-rs-175-crore/75259434

Some of these properties were then offered as "collateral securities" to bank for enhancing the

credit limit, it said.

Probe in the case is ongoing, the ED said.

________________________________________________________________

Realtors want one-year extension from Rajasthan Rera to complete

projects

The demand was sought after Rera in other states including Maharashtra , Karnataka

and Uttar Pradesh extended validity of registration of projects and realty developers

getting three months extension to complete their projects.

Realtors have requested Real Estate Regulatory Authority (Rera), Rajasthan, to grant them a

one-year extension to complete their under-constructed project as the industry has come to a

grinding halt due the lockdown. The Confederation of Real Estate Developers' Association of

India (CREDAI) has written to chief minister Ashok Gehlot and Rera requesting the same.

The demand was sought after Rera in other states including Maharashtra , Karnataka and Uttar

Pradesh extended validity of registration of projects and realty developers getting three months

extension to complete their projects.

CREDAI chairman Gopal Dasgupta said, “We have expressed our helplessness to complete

under-construction projects on time as remobilisation of resources will be time consuming. We

have also requested the government not to impose charges including lease money, layout

approval etc on developers and relaxation should be provided.”

Developers claim the extension was required as procurement of materials was affected during

the lockdown and construction came to a halt. “The government has recently announced that

projects, where labourers are available, can start construction. We welcome the decision.

However, work will be affected as supply of many materials will take time to resume,” said

Abhishek Sharma, a contractor.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date April 20, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/realtors-want-one-year-

extension-from-rajasthan-rera-to-complete-projects/75247560

Bengaluru civic body urges government to allow conversion of B

khata to A

According to BBMP officials, 5.3 lakh properties are registered under B khata. The Palike

hopes to mobilise over Rs 1,500 crore revenue by converting B khata properties to A

khata, which is equated to a certificate for legal compliance.

Bruhat Bengaluru Mahanagara Palike (BBMP) has sought the government’s nod for conversion

of B khata properties to A khata as part of its measures to increase revenue flow and ensure

uniformity in the property tax collection mechanism.

A proposal to this effect was mooted in the budget approved by the BBMP council on Monday.

Khata is a revenue document that records details about the property, including size, location and

built-up area, and makes the owner liable for payment of property tax.

After the civic agency expanded in 2007, many illegal constructions in newly added areas came

under its ambit and a separate register was maintained to collect tax from such properties, which

came to known as B khata register.

According to BBMP officials, 5.3 lakh properties are registered under B khata. The Palike

hopes to mobilise over Rs 1,500 crore revenue by converting B khata properties to A khata,

which is equated to a certificate for legal compliance.

Officials maintain the conversion will help B khata property owners, who are finding it difficult

Newspaper/Online ET Realty (Online)

Date April 21, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/bengaluru-civic-

body-urges-government-to-allow-conversion-of-b-khata-to-a/75263364

to establish building ownership, get bank loans and civic benefits.

However, a section of corporators and urban planners oppose the move, saying it’s nothing but

regularisation of illegal constructions in the city. “The issue is already in court and we should

not be touching this topic by giving it a different name,” said a BJP corporator. Opposition

leaders in the council too said the government should not go ahead with it until BBMP elections

are over.

However, Palike authorities maintained khata conversion will not cover properties with building

plan violations and those constructed on unauthorised layouts.

________________________________________________________________

Mangaluru civic body inches closer to rolling out online property

tax payment

“The focus with the pandemic going on is to go digital with our tax collection and MCC is

striving to get the same completed at the earliest,” he said.

The lockdown has come in handy for the Mangaluru City Corporation (MCC) to move forward

computerisation of property tax records. The extension of deadline to avail 5% property tax

rebate till May 31 is also expected to give the MCC time to push this project.

Admitting that the lockdown has given the revenue department to focus on this project even

with limited staff, Santosh Kumar, deputy commissioner (administration), MCC, also holding

the charge of DC (revenue), said the civic body is gearing up for both manual and online modes

of tax collection. “The focus with the pandemic going on is to go digital with our tax collection

and MCC is striving to get the same completed at the earliest,” he said.

Data entry work on past property tax paid is presently on. “We are using tax receipts to compile

the same… We have already pitched the digital payment idea with taxation, finance and appeals

standing committee and the mayor,” he said.

Kumar said the move will require post-facto approval of the council in its maiden meeting. The

proposed digital move will also come with an online tax calculator, he said.

The civic body has also plans to conduct a property tax returns mela at the Town Hall.

Following social distancing norms, people at the mela may can pay their taxes manually or

online, as per their preference. In one such drive at the venue, MCC collected Rs 10 lakh by

way of trade license, Kumar said.

Asserting that a final picture will emerge once the lockdown ends on May 3, he said the MCC

collected 40% of property tax during 2019-20.

MCC has been toying with idea of introducing online payment of taxes since Sameer Shukla

became the first IAS officer to take charge as the MCC commissioner. The civic body has made

computerisation of its office operations a flagship programme under different mayors since

then.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date April 20, 2020

Link https://realty.economictimes.indiatimes.com/news/technology/mangaluru-civic-

body-inches-closer-to-rolling-out-online-property-tax-payment/75246990

Uttar Pradesh plans to make quarantine must for construction

workers

According to sources, the state government is planning to put in place a slew of measures

to arrest the spread of contagious virus before kick-starting economic activities from

Monday.

UP government is planning to adopt stringent measures, including making 14-day quarantine

mandatory for the workforce which will be engaged in construction-related activities, as it gears

up to revive the state economy hit by lockdown.

According to sources, the state government is planning to put in place a slew of measures to

arrest the spread of contagious virus before kick-starting economic activities from Monday.

“A large number of labourers are expected to reach cities and villages after April 20 when

economic and construction activities, including those related to industries and agriculture, will

be revived,” a senior government official said. A host of migrant workers got stuck at various

points after factories closed operations due to lockdown. Left without work, they were forced to

return to their homes.

Principal secretary, rural development, Manoj Kumar Singh told TOI, “Things will be clear

after April 20 when the department will be able to assess the actual strength of workforce.”

The department has already announced that job cards would be provided to migrants under

Centre’s flagship Mahatma Gandhi Rural Employment Guarantee Scheme for construction

works in rural areas.

“Most migrants have undergone a 14-day quarantine period ever since lockdown was

announced on March 25 but still we cannot take any chance. We will ensure that workers

deployed under MNREGS have undergone quarantine to prevent spread

of coronavirus infection. We will also ensure social distancing and use of masks by workers,”

he said. Activities related to mining and transportation of minerals will also start from April 20.

Secretary, mining, Roshan Jacob said the department would deploy minimum possible labourers

while relying more on machines for mining.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date April 21, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/uttar-pradesh-plans-to-

make-quarantine-must-for-construction-workers/75260161