Indian cities’ realty ranks

MUMBAI: Implementation of the goods and services tax (GST) and the last year's note-ban have not only created liquidity issues for the real estate sector but also impacted investment and development prospects of the cities, thereby pulling down their rankings, a report has said.

As per a survey conducted jointly by the Urban Land Institute and consultancy PWC, the initial effects of demonetisation and GST reforms reflected in the investment and development prospects of the country's cities which have moved out from the premier positions of last year.

The report, titled 'Emerging trends in real estate-- Asia Pacific 2018', is based on the opinions of over 600 realty professionals including investors.

"Investments, specifically into affordable housing in the country, continues to be strategic in nature and offers massive scale of opportunity, a factor that makes it especially popular for funds deploying large capital," PWC India leader, real estate tax practices, Abhishek Goenka said.

While Mumbai ranks 12th in the list of preferred investment destination for 2018--massively down from the second rank last year, and it stands at the 8th slot in terms of development prospects.

Similarly, Bengaluru and New Delhi stand at 15th and 20th position respectively in the investment destination ranking against 1 and 13 respectively last year, while they are at the 16th and 18th positions respectively, on the development destination ranking.

The survey has found out that retail assets are now a popular play, with a number of platforms or portfolio deals either already completed or in the works.

The average appreciation in rentals has been anything between 8 and 10 per cent per annum, higher compared to office space, which is growing 5-7 per cent.

"Residential space continues to suffer, due to regulatory reforms that include note-ban, GST and increased regulation of real estate development practices," PWC India's tax and regulatory services partner Anish Sanghvi said.

He said high-end residential oversupply is another ongoing problem, causing most foreign investors to shy away from the sector altogether.

"Most international investors prefer commercial property in India, with cap rates averaging between 8.5 and 8.75 per cent. While the supply of affordable homes increased in last three quarters, investors remain cautious about affordable housing as an asset class," he said, adding land availability at affordable prices, singlewindow approvals and time overruns still continue to be a challenge.

"With most high-quality pre-existing assets already accounted for, international funds are turning increasingly to build-to-core projects, affordable housing and other opportunistic investments," PWC India partner for real estate tax practices Bhairav Dalal said. NEW DELHI: PNB Housing Finance has tied up with realty portal Magicbricks to e-auction re-possessed properties.

The first e-auction comprising 45 properties will be held on November 27, Magicbricks said in a statement.

The properties are spread across NCR (35), Bhiwadi (2), Mohali (2), Indore (1), Jagadhri (1), Ludhiana (1), Sonipat (1), Yamuna Nagar (1) and Zirakpur (1) and will be offered at a price lower than the prevailing market rates.

Magicbricks said it has partnered PNB Housing Finance Ltd "to e-auction its re-possessed properties on its online auction platform."

These properties will be available for quick possession.

Customers can log-on to auctions.magicbricks.com to register by November 24. With monthly traffic exceeding 12 million visits and with an active base of over 14 lakh+ property listings, Magicbricks provides platform for buyers and sellers of property. NEW DELHI: The government on Monday raised Rs 14,500 crore through the sale of blue-chip shares of PSUS via its newest exchange traded fund (ETF), Bharat-22, which received bids of about Rs 32,000 crore – a mutual fund record.

With this, the government has raised Rs 52,500 crore in the current fiscal through PSU disinvestment, including from listing of PSU insurance companies.

The government had launched the Bharat-22 ETF in August and had planned to raise Rs 8,000 crore, with an option to retain over-subscription. The first tranche of the new fund offer opened for retail investors on November 15 and closed on November 17.

"We have decided to retain Rs 14,500 crore of the total subscription that has come in for Bharat-22 ETF," Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said. The ETF saw bids of nearly Rs 32,000 crore coming in, with FIIS bidding for a third of the amount.

"This is the highest ever NFO collection in the history of mutual funds in India. The total issue was subscribed around 4 times," Gupta said.

The portion reserved for retail investors was subscribed 1.45 times; retirement funds – 1.50 times and NIIS and QIBS – 7 times. Anchor investors, for whom the share sale opened for subscription on November 14, subscribed 6.1 times of their portion amounting to Rs 12,000 crore.

LIC, Bank of India, SBI Pension Fund, EPFO and HDFC Ergo Insurance are among those who have put in bids.

ICICI Prudential Mutual Fund managed Bharat-22 ETF'S new fund offer (NFO) had an initial issue size of over Rs 8,000 crore.

"During the three days reserved for non-anchor investors, we witnessed an overwhelming response from all investors, particularly retail segment. In due course, the ETF will be listed," ICICI Prudential AMC MD and CEO Nimesh Shah said.

Bharat-22 ETF comprises shares of central public sector enterprises (CPSES), public sector banks (PSBS) as also government shares in blue chip private companies like Larsen & Toubro (L&T), Axis Bank and ITC. PSUS that are part of the new Bharat ETF 22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

The other CPSES on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks -- SBI, Indian Bank and Bank of Baroda -figure in the Bharat-22 index.

The shares of the government companies represent six core sectors of the economy - Finance, Industry, Energy, Utilities, Fast Moving Consumer Goods (FMCG) and Basic Materials, making the Index broad-based and diversified.

The government has set an ambitious target of raising Rs 72,500 crore for disinvestment in the current fiscal. Of this, Rs 46,500 crore is to be raised through minority stake sale in PSU and Rs 15,000 crore from strategic sale. Another Rs 11,000 crore is to come from listing of insurance companies.

With Rs 52,500 crore coming in from disinvestment so far this fiscal, the government has exceeded Rs 45,500 crore raised through PSU stake sale last fiscal.