Emirates NBD’s move to offer trust account services is based on the latest law that was initiated in September last year. The main objective of forging the collaboration is to develop a healthy competition and increase investment into real estate.

In doing so, Emirates NBD has emerged as the first bank in the region to team up with RERA after the inception of the recent law on jointly owned properties came into being.

With the enforcement of this law, various developers, community management firms, stakeholders, investors, owners and insurers are expected to adopt measures that adhere to the prescribed guidelines.

Among the pioneering banks in the MENAT belt, Emirates NBD’s overall assets were valued at Dh675.6 billion ($184 billion).

And when the bank took over Denizbank, it increased its operations to 13 countries and it is providing services to more than 14 million customers.

Emirates NBD has a dominant presence in the UAE business domain that can be attributed to its robust involvement in Islamic banking operations, investment banking, private banking, asset management, global markets and treasury and brokerage activities.

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The total sales value of the overall area booked also improved to $2.4 bn in the financial year 2018 compared to $1.8 bn a year ago. This registered a growth of 35.1% for the period under consideration, according to ICRA.

Improving demand from homebuyers as well as a preference for an established real estate brand that has a proven track record of delivery has resulted in customers gravitating towards bigger players. Thanks to this, there is improvement in demand and steady new launches, said ICRA.

The operational health of the real estate sector has improved significantly during the financial year 2018 as compared to 2017, going by the key parameter changes of major listed realty players. As per an ICRA note, a key indicator in this regard is the quarter-to-sell (QTS), which acts as a reflection on the number of quarters required to sell the available inventory as well as a denominator of the real estate sector’s recovering operational health.

In FY 2018, QTS has improved to 10 quarters at the end of March 2018, from 14 quarters at the end of March 2017. This improvement is a reflection on the improving velocity of sales, according to the report.

“Notable pick-up in demand coupled with steady new launches has resulted in an improvement of QTS. In the post-RERA era, we expect the organised players to gain market share. Further, new sales outstripped new launches for the first time over the last four years ending FY 2018,” stated Manav Mahajan, assistant vice president, ICRA.

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Technology adoption
Adeptness in digital technology and upskilling to Digitech skills are definitely prime watchwords for selecting the right candidates. To be sure, technology is the change driver around which more and more real estate recruitment decisions will be taken.

This is because, whether an industry which tends to hang stubbornly on to the traditional ways of doing its business likes it or not, technology will replace – and in fact is already replacing – at least 75% of the traditional methods of sourcing real estate opportunities at both the buyers’ and sellers’ end. In this highly opportunistic market, operational speed is of greater essence than ever before, and the use of technology to achieve this speed is indispensable.

Nor is this increasing focus on technological skills limited to just consultancies – even developers have woken up to the fact that they cannot survive any longer without getting the ‘tech edge’, and prefer hiring young people who have these skills in their DNA, so to speak, rather than investing in upskilling their existing workforce.

Especially in the case of smaller developers, there is a very visible aversion to technology adoption among older employees who fail to understand what all the fuss is about. However, such developers face a much deeper problem. Their inherent lack of knowledge about modern technology-driven ways of doing real estate business makes hiring the right talent difficult. In many cases, they would have to change almost their entire staff – beginning with HR – to not only hire but also adequately utilize more tech-adept people.

In response to the deep-rooted technology handicap that such developers face, the agiler real estate consultancies and brokerages leveraged real estate technology long before, and are able to provide their clients with the benefits of this expertise. Being already tech-entrenched, they also know exactly which kind of talent to hire, and provide constant upskilling to ensure that they stay ahead of the constant and lightning-fast tech learning curve.

RERA (non) compliance
The second real estate hiring trend of note in 2018 is dictated by the recent policy changes which have defined how real estate business is done in India. While it has not managed to make a 360-degree sweep of them as yet, RERA is in the process of eliminating non-registered property brokers from the field.

Individual brokers working with a real estate consultancy are covered under the company’s RERA registration and do not need to register under RERA individually. However, this game-changing act has still had a distinct impact on the hiring activities of RERA-registered consultancies. Many smaller brokerages (and individual brokers) do not, for any of a number of reasons, see themselves as having much of a future in the post-RERA era.

The operatives which such agencies have had to let go, and individual brokers who have some degree of real estate experience but cannot hope to succeed on their own now, are currently scouting the job market for opportunities. The numbers here are considerable, and the result is that there is something of a glut of aspiring real estate agents applying with RERA-registered property consultancies.

However, because of the stringent rules that RERA requires property consultancies to comply with, less than 10% of this newly-available talent is actually recruitable by serious real estate firms.

Brokers who made a living bending the rules or ignoring them altogether are often too set in their ways to learn to play by the book. This makes them very risky hiring propositions, no matter what they profess – the saying ‘the road to hell is paved with good intentions’ comes easily to mind. RERA-registered property consultancies cannot afford to gamble on wild cards. The kind of talent they now look for is grass-roots honest and firmly believes in transparency, rather than just nodding vaguely in its direction.

The diversity imperative
Diversity is and will continue to be a very big factor directing the HR policies of real estate players who are in it for the long haul. This is not just about amplifying their appeal on the job and business market – it is about recognizing that a workforce with a good balance of men and women simply does better business. Indian real estate has historically been a pretty male-oriented arena, but this is changing fast.

Not only does broadening the hiring decisions open up at least 50% more qualified and appropriately tempered candidates; it also is the framework of a significantly more productive workforce. Also, women are really excellent at not only property brokering and consulting but also as researchers, team players and team motivators. In 2018, we are already seeing a lot more women being hired by the larger and organized real estate developers, property consultancies and home finance firms.

Overall, we are looking at a vastly transformed recruitment mindset in Indian real estate in 2018. All three of the above factors are relatively new to the Indian realty context, and 2018 is at best a year of slightly accelerated change rather than a year of fait accompli transformation. However, the changes we are seeing now in terms of how people are hired in the real estate sector are by nature permanent ones. And it is definitely high time for a major sea-change on this front.

Sukhdeep Aurora, Chief People Officer – ANAROCK Property Consultants

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1. Project details: Whether the project is new launch or is an ongoing one which has not received a completion certificate prior to RERA commencement, MahaRERA requires submission of all the project details. The exact boundaries of the plot, complete information on the number of wings or towers in the project, their exact configurations, the common amenities provided and the number of car parking spaces booked and available, as well as the details of the project’s infrastructure works, are available online.

Details of approved FSI and the recreational open areas in each project are also mentioned. The developer must also submit all the approvals he has received for the project, including the land title search report, building plan approval, proforma of the allotment letter, etc. It is easy to search for these details on the MahaRERA website.

2. Project performance: Details related to the performance of a particular residential project is also available on the MahaRERA website. In fact, developers have to update the sales achieved in a project on a quarterly basis. Tracking the sales happening in a project has, therefore, become a lot easier and transparent. Earlier, buyers were often unclear about the actual sales a developer had achieved and depended largely on information by the developer’s sales team which could not be easily verified. Analyzing the sales achieved can help a consumer understand the kind of traction a project is garnering on the market, and accordingly take a much better-informed purchase decision.
3. Developer’s details: MahaRERA makes disclosure of all information regarding the promoters of the project mandatory. This includes any pending or prior litigation against them, which is and should be a key concern for any consumer. Apart from this, the track record of the promoter is now disclosed – this includes his/her educational background, prior projects undertaken, financial details such as authenticated IT returns, audited balance sheets, etc. Such information was definitely not easy to obtain earlier, especially when it came to developers who are not listed entities.
4. Project completion timelines: The MahaRERA data also clearly indicates the original timeline that a developer has committed to for the completion of a project – as well as the revised completion date, if applicable. This helps consumers understand exactly when they can expect possession of their flat. In fact, the penalty for delays is so strong that developers now prefer to declare a fairly extended timeline for completion. In many cases, a true assessment of the timeline can be done by following the status of construction, which will also be updated on the MahaRERA site.
5. Information about real estate agents: Very often, aspiring property buyers were confused about which real estate agent to approach for their requirements. While some preferred local agents, others were more comfortable with brokers attached to big banks. A lot of this confusion has been put to rest with a mandatory registration of brokers authorized to sell flats in different projects. Buyers can look under each project head.
6. Micro-market analysis:Prior to zeroing in on a particular location, a consumer must always conduct a rough survey of the likely areas under consideration. This task has been simplified, as the MahaRERA website provides information on the area-wise performance of residential markets across the city. Current data disclose sales and upcoming supply for all the micro markets within Mumbai city, its suburbs and Thane. It also gives details of configuration-wise sales in each of these markets.

Ongoing Challenges 

Some challenges remain – for instance, MahaRERA still does not provide information on the pricing of apartments. Also, the bulk of the data available is given project wise, making it challenging to collate and interpret it for a micro-market analysis. Yet another difficulty is that the data on the escrow accounts required to be maintained is not available.

Nevertheless, there is no doubt that MahaRERA has now armed consumers with a granularity of details on residential markets which was not available to them previously. As the RERA concept evolves further, keeping in mind that it a is a process and not an event, the available information will become even more useful.

Ramesh Nair is CEO & Country Head at JLL India

The post A consumer’s guide to using MahaRERA Data appeared first on International Finance.

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

The post Residential realty poised for revival in Indian festive season 2017 appeared first on International Finance.

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

The post Indian residential continues to be the most favoured asset class for investors appeared first on International Finance.

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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