The solution combines automation of mundane tasks with pre-emptive decision making, to increase overall business agility. With the S/4HANA Cloud, businesses will be notified of the latest innovations through quarterly updates, granting them access to the latest innovations in areas such as predictive analytics.

With conversational AI platforms being the next big paradigm shift in IT, SAP has integrated SAP CoPilot with the SAP S/4HANA Cloud. The solution is the first true voice-activated digital assistant for enterprises that enables users to to get their work done more quickly and efficiently, while increasing teamwork across business processes. Powered by machine learning and AI, SAP CoPilot is aware of business contexts, driving efficient collaboration, quickly recognising and connecting to business data and offers in-context chat.

“India is expected to be among the top cloud markets in the world by 2020, with $4.1bn market opportunity,” said Deb Deep Sengupta, President and Managing Director, SAP Indian Subcontinent. “By making our digital core all pervasive through cloud with SAP S/4HANA Public Cloud, our market leadership in ERP space is poised to be replicated in the cloud as well.”

“Around the world cloud first is the path forward, SAP S/4HANA Cloud will be swiftly taking Indian enterprises into the digital age,” said Melissa Di Donato, Chief Revenue Officer, SAP S/4HANA Cloud. “The intelligent cloud suite will support large and midsize Indian companies to further accelerate innovation. Our aim is to enable organisations to ‘Automate’ processes, gain ‘Assistance’ in focussing on mission-critical applications, and eventually ‘Act’ based on context-aware decisions.”

The SAP S/4HANA Cloud serves customers in various product-centric and service-centric industries to help them achieve instant value, cost savings and improved efficiencies across project management, manufacturing, sales order management, inventory and supply chain management, finance and procurement. help customers achieve instant value, cost savings and improved efficiencies. Over and above these functionalities SAP S/4HANA Cloud has been localised specific to India to support:

• Indian specific master data, such as GST Vendor Classification, Invoicing Party (required for calculation of taxes), field enablement to maintain GST Registration Number
• Tax and pricing procedures – including the ones introduced with GST taxes
• Journal Voucher- Tax adjustments for the GST incoming invoices
• Invoice generation for logistics scenarios, such as Procurement for Direct Materials and Services, Subcontracting, etc.

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Discussing the impact of GST on real estate sector, Kunal Wadhwa, Partner -Indirect Tax, PwC India said, “The impact on real estate sector has always been part of the limelight for any major reform. The implementation of the Goods and Services Tax is of no exception. While the change brings in more transparency and maturity to the sector, the requirements under the anti-profiteering law has been a contentious issue for this sector.”

Abhishek Goenka, Partner and Tax Leader – Real Estate, PwC India said, “The benefit to the end customer would be seen primarily in projects executed post implementation of GST, but the benefit may not be as significant as the Government’s expectation. The Government should engage with stakeholders to address their concerns. This would help the market gain the needed momentum as anything related to the sector significantly impacts the sentiments of the economy.”

 Ramesh Nair, CEO and Country Head, JLL India said, “Goods and Services Tax (GST) has been a matter of discussion for both the demand and supply side of the real estate community. While a transparent uniform taxation system is good, the exact nitty-gritties of ‘how’ to implement this needs to be addressed swiftly. The government has issued certain circulars to set clarity in this sector, however, the need of the hour is to set up discussion forums across locations and engage with tax authorities and developers at different levels. This alone can address the concerns of this sector which plays a significant role in impacting the overall sentiment of the economy.”

Ramesh further added “GST which represents unified and simplified taxation policies of the country, will add to India’s attractiveness as an investment destination in the long run. It will further help in ease of doing business and creating transparency in processes. The benefit for the real estate sector in the future will be significant on account of growth of business and commerce in the country.”

Highlights:

• Currently there is lack of clarity among developers on the exact implications of GST. Developers feel that the exact impact will be understood only after a thorough analysis of the implications on each input cost (in form of labour and raw material, namely steel, cement, bricks, etc.)
• Further, with regard to such raw material inputs — the challenge lies in estimating the cost of these commodities over the entire life cycle of the project. Since the purchase of these supplies is linked to construction progress it is difficult for developers to estimate upfront the costs and input tax credit received for the same.
• There is the complexity of being on the right side of the NAA (National Anti-profiteering Authority) by passing on the benefit of input tax credit to the customer, despite an increase in any other costs. There is no specific mechanism provided for offsetting any other increase in costs against the benefits of input tax credit.
• Tax treatment of ongoing projects which were earlier under the VAT and service tax regime and will now migrate to GST is complex. It is not just a simple change in an excel formula and involves a much deeper understanding of how input tax credit is to be calculated.

The report summarises that the end consumers may be technically entitled to some amount of relief though not significant, whereas the builders would be better off explaining the rationale of passing on or not passing on this benefit depending on their fact pattern.

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Unfortunately, last year’s festive season did not meet their expectations as buyers stayed away from the market – primarily due to execution delays, an uncertain economic scenario and unattractively high prices. Demonetization also played a key part in the depressed sentiment – not only in the resale market as was at first expected, but in primary sales as well.

Most aspiring home buyers deferred their purchase decisions, preferring to wait until RERA kicked in fully. Though most developers offered compelling discounts and schemes, buyers stuck to their cautious approach during the last festive season.

However, the 2017 festive season has started on an altogether different and far more positive note. While structural reforms by ways of RERA and GST have helped firm up buyer sentiment, developers too have progressively adjusted their business approach in the new era of transparency brought on by GST and RERA, and are geared up to cater to the pent-up demand for homes this year.

These reforms, coupled with various other progressive measures initiated by the Government, have certainly made a big difference for the realty market in this festive season:

1. RERA and GST address the core issue of transparency: The Government has passed slew of policies and reforms, most importantly the long-awaited Real Estate Regulation and Development (RERA) Act, Goods and Services Tax (GST) and the Benami Properties Act. The overall objectives of RERA are to improve transparency and accountability in the hitherto trust-starved realty sector, protect the interests of home buyers and ensure timely delivery of projects.

On its part, GST has replaced the multiple taxes levied by the Central and State Governments, and has effectively been subsumed of all indirect taxes. The improved mechanism of input tax credit (ITC) may well soften the overall impact of taxes on real estate.

2. Affordable housing leads the way: Housing for all by 2022, the flagship program of the NDA Government, was given a major boost when Union Budget 2017-18 accorded it infrastructure status. Infrastructure status will not only help developers to raise funds at a cheaper rate, but also encourage long-term funds from institutions such as insurers and pension funds to invest in this segment.

Taking a realistic view, the Government has extended the deadline for completion period of affordable housing projects to five years from the earlier three years. To boost demand, the Government has introduced attractive interest subsidies on home loans – up to 3% and 4% on home loans of Rs. 9 lakhs and Rs. 12 lakhs respectively – under the Pradhan Mantri Awas Yojna.

Since the affordable housing sector is the most incentivized segment for both developers and end users, developers are today significantly more inclined towards affordable housing projects. Many reputed developers are now launching projects in the affordable segment. In 1st half of 2017, more than 70% of new launches were of projects with units priced in the Rs. 50 lakh budget range, which is in sync with what most Indian home buyers are looking for.

3. Rebooted economic environment: With inflation under control and GDP expected to grow at more than 6%, the economy is in a much better shape this year than it was in the last festive season, which was heavily impacted by the unexpected announcement of demonetization. Buoyed by a stable economy and progressive policies, the realty sector attracted $1990 million in institutional investments during the first half of 2017. The residential sector accounted for 54% ($1075 million) of these investments. The renewed interest of institutional investors in this sector underscores the long-term prospects of the residential sector – a fact that industry observers as well as home buyers have duly taken note of, as well.

4. Ample availability of ready-to-move-in supply: Post RERA implementation, developers are in a hurry to finish their under-construction projects and to offload their unsold units instead of launching new projects. Also, ready-to-move apartments with occupation certificates (OCs) are kept out of the ambit of the RERA and GST, making it much easier for builders to market these products. As a result, buyers have a wide choice of ready-to-move-in options. There are currently about seventy thousand ready-to-move-in unsold apartments in tier 1 cities.

Also, the existence of ready supply is ensuring that new projects launched during this festive season are offered at very competitive rates. The attractive schemes and discounts which reach highest saturation during the festive period are, of course, added advantages for buyers.

5. Competitive home loan rates: Home loan interest rates are at their lowest in the last 10 years, and will remain in that territory owing to the generous liquidity prevalent in the market post demonetization. Also, as they compete for bigger shares of the home loan pie, many banks have been rolling out attractive offers like waived processing fees. This has put home buyers in a sweet spot of an ample range of projects to choose from and very attractive financing options at their disposal.

Summing of the festive demand boosters

• A far more transparent and accountable real estate industry
• A plethora of ready-to-move-in options
• Rationally priced under-construction projects covered by the RERA assurance
• Lucrative schemes from developers
• Competitive home loan rates

In short, this festive season will be different from the previous one. For developers, this festive season could very well set the ball rolling for the much-awaited revival for the beleaguered residential real estate.

Anuj Puri is Chairman at Anarock Property Consultants

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The Brazilian Ministry of Finance currently estimates that the average company spends 2,600 hours per annum calculating, reporting and paying taxes. Brazil’s aim is to reduce this to 600 hours. Brazil is regularly rated in business surveys as having one of the most complex indirect tax systems in the world.

The existing consumption taxes to be combined into the new VAT include:

• ICMS– the tax which applies to the movement of goods, transportation, communication services and other general supplies of goods. The current tax level is between 7% and 25%
• ISS– the municipal tax on the provision of services. The rate goes up to 5%
• IPI– the federal tax on manufactured goods. The rate can be up to 300%
• COFINS– the federal tax contribution to the Social Security Financing paid on company revenues. The rate can be up to 7.6% on monthly revenue depending on the activities of the company

Details of the new VAT regime, and implementation date, will be published by September 2017.

Richard Asquith, VP Global Indirect Tax at Avalara, says, “This will be a big win for local and multinational companies which have to invest a disproportionate amount in accounting staff and tax compliance.  However, there will be stiff political opposition to this reform from the major cities as Michel Temer’s government lacks the votes, but it could go for an initially consolidation the federal taxes, PIS and COFINS.”

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Recently, the Australian government announced that as of July 1^st 2017, Bitcoin will be considered real money and it will also be exempted from goods and services tax (GST). This suggests that the cryptocurrency could be about to go mainstream Down Under.

Expert economists such as the CEO of Coinbase Brian Armstrong have predicted that the currency will replace the US dollar by 2030. As for Blythe Masters, a former prodigy at JP Morgan, he stated: “We’re seeking to make [the current financial system] stronger, better, and safer, using blockchain technology.” It is huge news for fans of this new currency to hear that the Australian government is truly embracing innovation.

As more official bodies and governments show trust in this new currency, it is likely that consumers will feel more attracted to it. One misconception that is consistent with the general public is that if you hold Bitcoin you will just get rich in a couple of years. It is unlikely that this is going to happen. Bitcoin needs to be seen as a currency like any other. The key difference with Bitcoin and other currencies is that it is brand new. It is only normal that there is going to be ups and downs until more countries like Australia start embracing it as the currency of the future, and not an investment.

Alternatively, if you don’t want to deal with these fluctuations, the safest way that seems to be currently available to get involved in this new currency is if you trade bitcoin with CFDs online. CFDs, which are also known as contracts for difference, allow traders to bet on the value of Bitcoin rather than own the currency itself.

Right now, huge multinational companies all around the world such as Bloomberg, Dell and Subway are offering Bitcoin payments. Online companies such as Expedia and Cheapair.com are participating as they see how innovative it really is. So if you hold Bitcoin you can now travel all around Australia booking your favorite hotels and airlines. If you are a coffee enthusiast, coffee shops such as Imbiss25, Beaver Tail Social Club and The Little Mule, which are located in Melbourne, all accept Bitcoin as a form of payment.

As it stands, Bitcoin is not yet the “go to” currency in terms of exchanging money for goods and services. But it is getting there – after all it allows for faster and cheaper transactions and is evolving into something the world won’t be able to ignore for very long.

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While the office asset class saw lower investment in 1H2017 compared to 1H2016 due to a lower number of equity deals, there are big-ticket deals in the pipeline that are expected to fructify in 2H2017. Residential, on the other hand, has cornered more than half of the total investments in 1H2017 thanks to the growing confidence in this asset class as RERA and GST get implemented and demonetization as well as the Benami Property Act promise to make residential real estate a far more transparent than it was ever before.

New kid on the block

Warehousing that has started seeing big-ticket investments saw the biggest investment deal so far in the country’s logistics space, brokered by JLL. As part of the USD 500 mn pact, the Canada Pension Plan Investment Board (CPPIB) acquired a majority stake in IndoSpace, the warehousing and logistics real estate arm of Everstone Group. As part of this deal, CPPIB will acquire 13 industrial and logistics parks totalling 14 mn sft.

IndoSpace and CPPIB have also agreed to create a joint venture called IndoSpace Core that will focus on acquiring and developing logistics facilities in India. While CPPIB has invested over USD 3.07 bn from 2015 – mostly into real estate and infrastructure, Everstone is the largest India-focused private equity investor with over USD 3.3 billion of assets under management. It is pertinent to note here that even though CPPIB may be the biggest deal so far, investors from other nations, especially Asian ones like China, Japan, Korea, have shown a lot of interest in developing industrial projects.

Shobhit Agarwal is MD – Capital Markets and International Director, JLL India

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It also highlighted how longer approval process under RERA is likely to delay launches and have an impact on growth of construction and ancillary activities. It is also relevant to note that there may not be another rate cut during the remainder of the year as the RBI will continue to look at inflation headwinds. This stance of the MPC will also be important for global investors as the current stable interest rate regime in India will allow for better investor returns in India for global investors. This should keep investors reasonably attracted towards India.

There is already enough surplus liquidity in the system and the policy change may not result in a greater impact on real estate sentiment. However, it must be remembered that buyer sentiment has been impacted by a number of variables, including overall lack of affordability in the larger cities and the slowdown in IT/ITeS-driven employment. RERA has also induced a go-slow in fresh launches, which means that there will be less fresh supply on the market. Consequently, prices are unlikely to reduce further – and more than interest rates, it is property prices which affect buying decisions. Nevertheless, this monetary policy announcement sends out positive signals to global investors, who are already showing renewed interest in Indian residential real estate on account of the transparency reboot brought on by RERA and GST deployment.

Anuj Puri is Chairman at Anarock Property Consultants

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Interestingly, logistics in the Asia Pacific region is performing well in comparison to other global counterparts. According to the 2016 World Bank survey on trade logistics, top regional markets such as Singapore, Hong Kong and Japan feature near the top of a global league of 160 countries in terms of logistics performance, alongside markets in Europe and the United States.

Based on JLL estimates, the total amount of stock in seven largest logistics markets in the region currently totals more than 1.5 billion sqm (gross floor area), double the size of the 795 million sqm in the United States and significantly more than the 260 million sqm in Europe. It is more appropriate, however, to look at logistics stock at a local level, as regional economies are at vastly different stages of development.

As a share of population, each person in Australia and Singapore has 1-2 sqm of stock on average, as compared to average stock level per person in South Korea, Hong Kong, China and Europe (which is in the range of 0.4-0.7 sqm). It is important to note that while the Indian logistics stock per person is miniscule, it is set to grow as the ‘Make in India’ programme and the proposed 35 multi-modal logistics parks (MMLPs) are going to play a vital role in the times ahead.

The warehousing sector in India has already seen CAGR of 20% from 2014 to 2017, fuelled by economic revival, growth of its e-commerce and the third party logistics industries as well as implementation of GST. The existing stock has a potential to grow at an even faster rate going forward, at least until 2022. Investment in infrastructure is also expected to play a significant role, as large planned investments such as MMLPs, dedicated freight corridors (DFC), etc., in road, rails, ports and airways across emerging India will bolster trade – and, consequently, warehousing demand.

Subsequently, investors are now attracted by strong occupier demand for logistics properties, and the value proposition of interesting yields compared to other forms of traditional real estate. Direct real estate transaction volumes in Asia-Pacific’s industrial sector totalled USD 13.8 billion in 2016, based on data from Real Capital Analytics (RCA). The sector accounted for about 12% of the region’s total volumes between 2011 and 2016.

Although India and emerging South-East Asia accounted for less than 3% of volumes in these transactions, the potential for growth is phenomenal. This is already evident in some of the recent investment trends in H12017, which has accounted for nearly USD 2 billion in a phased manner in the coming years.

While on one hand, the three-step deal between Canada Pension Plan Investment Board (CPPIB) and IndoSpace accounts for an investment of USD 1.3 billion, on the other, Ascendas- Singbridge is also involved in a two-stage acquisition of six warehouses (totalling 0.83 millon sft) from Arshiya, a Mumbai based logistics and supply chain company for INR 534 crore.

Additionally, Ascendas-Singbridge has also set up a joint venture (JV) with industrial properties developer  FirstSpaceRealty christened as ‘Ascendas FirstSpace’ with an objective of invest and build around 15 million sq ft. of industrial and logistic space over the next five years. With so much happening in the sector, logistics real estate presents an attractive alternative for investors and enables them to enter or exit the Indian market in a much faster and efficient way.

Srinivas N is Managing Director – Industrial Services at JLL India

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Historically, India had a maze of indirect taxes levied on products (goods) and services by both the Union (federal) government and State governments. This had been the single biggest hurdle to India being one common unified market. Most of these taxes could not be set-off against one another resulting in a higher tax rate and a higher burden on the consumer and also making Indian companies uncompetitive.

Further, multiple taxes led to Indian businesses dealing with multiple tax authorities. Different taxes by different States had subjected transporters to long queues at check posts, leading to inordinate delay in movement of goods across the country, increased inefficiencies and costs and an increased tendency for corruption, non-compliance and revenue leakages for the exchequer.

This has changed. GST has replaced all the indirect taxes with one single tax. Tax paid on inputs will be eligible for set-off against the tax on sale, irrespective of them being products or services. This will improve administration and compliance, as it will now be very difficult for a business entity to be not part of the chain. In fact, GST will be a compelling reason for all to be part of the chain and be compliant, thereby curb tax evasion and render the unorganised or non-compliant players uncompetitive. This, in effect, will work to the advantage of the organised and compliant players, lower the effective tax rate for consumers and boost tax revenues or the government.

The National Council of Applied Economic Research expects GST to add 1-2% to India’s GDP growth while according to a paper by the US Fed, GST can boost India’s GDP growth by 4.2%. Frankly, the direction matters more than the precise forecast.

What GST is set to do is to lift India’s growth rate, lift domestic trade barriers, make it one common market, reduce controls, make Indian businesses more competitive, improve India’s ranking in terms of ease of doing business and make it a better investment destination. Higher tax revenues would increase the tax-to-GDP ratio, control fiscal deficit and increase financial resources for the government to allocate for welfare measures and for public investment in infrastructure.

In one stroke, GST is likely to make life very difficult for India’s parallel economy. In totality, this ‘good and simple tax’ is not just a step towards the formalisation and integration of the Indian economy but a big leap towards India’s transformation from a developing to a developed economy.

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