CREDAI Bengal Daily News Update | 30.10.19
Finance Ministry seeks details of land parcel from CPSEs for asset
monetisation
The Department of Investment and Public Asset Management (DIPAM) has already
empanelled 11 consultancy firms for monetisating land and properties of CPSEs, PSUs
and other government organisations.
The finance ministry has written to all ministries asking them to seek details of land parcel
from CPSEs under their administrative control for monetisation, according to sources. The
exercise is part of the government's efforts to meet disinvestment target of Rs 1.05 lakh crore
for the current financial year.
The Department of Investment and Public Asset Management (DIPAM) has already empanelled
11 consultancy firms for monetisating land and properties of central public sector
enterprises (CPSEs), public sector undertakings (PSUs) and other government organisations.
The list of empanelled firms includes RITES Ltd, Bostan Consulting Group, Anarock Property
Consultants Pvt Ltd, Cushman & Wakefield and Feedback Infra Pvt Ltd.
DIPAM has asked all ministries and departments to get details from CPSEs under their
administrative control of those land parcel for monetisation which are free from any
encumbrances, litigation and encroachment, the sources said.
It also asked the ministries to seek board-approved monetisation plan of CPSEs for smooth sale.
According to the sources, the land parcel including that of enemy property and residential
quarters could be sold by bunching up together or separately on a case-to-case basis.
Over 6.50 crore shares in 996 companies of 20,323 shareholders are under the custody of
Custodian of Enemy Property for India (CEPI), under the home ministry. Of these 996
companies, 588 are functional or active companies -- 139 of these are listed, while 449
companies are unlisted.
The government has set a target of mobilising Rs 1.05 lakh crore from disinvestment proceeds
and achieving this has become more critical after it doled out Rs 1.45 lakh crore stimulus by
way of a cut in corporate tax.
Newspaper/Online ET Realty(online)
Date October 29, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/finance-ministry-
seeks-details-of-land-parcel-from-cpses-for-asset-monetisation/71807093
The proceeds from disinvestment will be critical for the government to stick to its target of
keeping fiscal deficit at 3.3 per cent of the gross domestic product in the current financial year.
Earlier this month, the Cabinet approved a new process of strategic disinvestment with a view
to expediting privatisation of select PSUs.
The Cabinet headed by Prime Minister Narendra Modi gave nod for sale of 53.29 per cent
government stake in Bharat Petroleum Corp Ltd and its 63.75 per cent stake in Shipping
Corporation of India, 30 per cent in Container Corporation of India, 100 per cent NEEPCO and
75 per cent in THDC.
Officials said strategic sale may involve two-stage bidding beginning with an expression of
interest or a preliminary intent showing bid, and a final financial bid. Pre-bid meetings with
likely bidders and roadshows to attract potential investors will form part of the process to
provide clarity on every aspect of the stake sale.
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Commercial real estate continues to attract private equity
investments
According to a research by ANAROCK Property Consultants, 'private equity (PE)
funds have pumped in nearly $3.8 billion between January to September period in
2019'
The demand in the office market is expected to grow strongly in the next few years
While real estate developers in the residential segment are finding it difficult to raise funds for
their projects from most banks and financial institutions given the low demand and associated
risk, the commercial segment is seeing an uptick. The real estate commercial segment that
includes offices space, warehousing and so on are finding plenty of investors and financers,
both in domestic as well as foreign market, who are looking for good opportunities for
investment in this segment.
According to a research by ANAROCK Property Consultants, “private equity (PE) funds have
pumped in nearly $3.8 billion between January to September period in 2019. Recording nearly
19% yearly gain, total inflows equalled over $3.2 billion in the corresponding period a year
ago."
As much as $3.6 billion was equity funding, comprising nearly 95% overall share, while the
remaining 5% came via structured debt. Out of the overall PE investment in the sector, foreign
PE funds continued to dominate the real estate investment scene. Top investors included
Blackstone, Hines, Ascendas, Brookefield and so on, stated the report.
Though PE investment increased in residential segment by about 40% from $210 million to
$295 million during the same period, it is still too little compared to the overall PE investment
of $3.8 billion in real estate sector.
“Improved transparency over the last few years, coupled with high rentals and Real Estate
Investment Trusts (REITs) coming in Indian market is what is attracting global PE firms to
invest in real estate sector in India," said Samantak Das, chief economist and head of research
and REIS, JLL India, a real estate consultancy firm.
The demand in the office market is expected to grow strongly in the next few years. With time,
this growth in commercial demand is likely to transfer into higher residential demand which
augurs well for the future of the real estate market in India, added Das.
Newspaper/Online Live Mint (online)
Date October 26, 2019
Link https://www.livemint.com/industry/infrastructure/commercial-real-estate-
continues-to-attract-private-equity-investments-11572079594320.html
Bengaluru: No pre-plan approval for houses constructed in less
than 2,400 sq ft land
Sources said that the BBMP will issue a notification on this soon. However, current
commissioner BH Anil Kumar has said that they will have one more round of discussions
before taking a final call.
If the house of your dreams is spread across lesser than 2,400 square feet, then you can expect
an exemption from seeking pre-approval for your building plan. The State Government has
approved a proposal from the Bruhat Bangalore Mahanagara Palike (BBMP) to exempt pre-
approval for building plan (only for G+2 houses constructed in a land measuring less than 2,400
square feet).
Sources said that the BBMP will issue a notification on this soon. However, current
commissioner BH Anil Kumar has said that they will have one more round of discussions
before taking a final call.
As of now, those planning to build houses have to get a pre-plan approval from the BBMP. The
plan that must be prepared by an architect has to be submitted to the BBMP’s zonal offices.
Upon submission, officials from BBMP take up a site inspection and then provide the approval
and the construction can begin only after that.
However, the current system has a lot of loopholes and there are allegations of huge bribery
involved in the building plan approval process. Rajesh S, a techie, said, “I wanted to construct a
house in a land measuring 1,200 square feet. However, it is not easy to get the plan sanctioned
even if everything is legally okay. It is known that bribe plays a big role in building plan
approval. The BBMP must fix that.”
As per the proposal, a plan created and approved by an architect should be uploaded on the
BBMP website. The BBMP officials would review the plan online and give it a go-ahead. The
house owner need not wait for the inspection and can begin construction. But, if any violation
or deviation is found at a later stage, the BBMP will penalise the house owner. Recently, Mayor
Goutham Kumar had said that the new move would help people for quick approval and also
avoid having to run to BBMP offices.
Welcoming the move, M Jagadish, an architect said, “It’s a good decision. The new rule will
benefit the common man. As of now, one must visit BBMP office several times to get their plan
approved and meet a number of officials. It takes at least a fortnight to get the plan approved.
The online system will be helpful to both the people and BBMP, as it will control misuse of the
law by both parties.”
Newspaper/Online ET Realty(online)
Date October 30, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/bengaluru-no-pre-
plan-approval-for-houses-constructed-in-less-than-2400-sq-ft-land/71812815
Commissioner Kumar, however, has said there will be a review before the plan gets a go-ahead.
“We fear it could lead to more violations. So before we adopt it, we need to take a proper view
at it and be cautious. We are already facing several violations,” he told Bangalore Mirror.
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PNB unlikely to subscribe to fresh equity expansion of its housing
subsidiary
It is learnt that the mortgage lender will opt for 'limited preference' route whereby a
maximum of five investors can participate. The company has hired Kotak Mahindra
Capital Co and JM Financial to manage the issue.
Punjab National Bank is unlikely to subscribe to the fresh equity expansion of its housing
subsidiary PNB Housing while Carlyle Group is keen to expand its investment, sources familiar
with the development told ET. The housing finance company is raising Rs 2000 crore equity
first time in four years.
State-run PNB holds 32.66% in the company while Carlyle holds 32.25% through a group
company, called Quality Investment Holdings.
General Atlantic with 9.87% interest in the housing finance lender may also subscribe to the
issue, sources said. A couple of new investors may usher in.
When contacted, PNB Housing managing director Sanjaya Gupta merely said that two of the
three large investors would invest. He did not share further details. PNB did not respond to
queries.
It is learnt that the mortgage lender will opt for 'limited preference' route whereby a maximum
of five investors can participate. The company has hired Kotak Mahindra Capital Co and JM
Financial to manage the issue which is expected by the end of this fiscal.
Responding to queries from ET, PNB Housing said that its board had discussed the equity
raising issue threadbare on October 24. “We discussed the options and further plan of action.
We will have a firm capital raise plan in the next two to three weeks and post that we plan to
start doing our roadshows,” the company said.
The lender’s capital to risk adjusted ratio (CRAR) improved to 15.67% at the end of September
from 13.98% six months back with tier I capital being at 12.69%. Although loan disbursement
slowed this year, the fresh equity will boost the company’s future growth plans.
Total loan disbursements for the quarter shrunk almost by a third to Rs 12,604 crore between
April and September compared with Rs 18,172.2 crore in the same period last year. The
company has cut down its corporate lending to 83% amid lesser opportunity while retail loan
disbursement remained more or less same.
Newspaper/Online ET Realty(online)
Date October 30, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/pnb-unlikely-
to-subscribe-to-fresh-equity-expansion-of-its-housing-subsidiary/71812670
Last week, the company board has also approved an enabling resolution to raise Rs 10000 crore
in bonds which would be done in the next six months.
It had raised $100 million (Rs 690 crore) from the International Finance Corporation in July
through external commercial borrowing route for providing small and medium ticket housing
loans.
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Government likely to order SFIO probe into DHFL financial
irregularities
The central government may order an SFIO probe on financial irregularities at DHFL.
The RoC has said after submitting its report on DHFL to MCA that There is good enough
reason to refer the matter of DHFL to SFIO.
The government is likely to order an SFIO probe on the financial irregularities at
troubled mortgage firm DHFL soon, an official said.
The Registrar of Companies, Mumbai office, has submitted its report on Dewan Housing
Finance Corporation (DHFL) to the Ministry of Corporate Affairs a couple of days ago, an
official said.
There is good enough reason to refer the matter of DHFL to Serious Fraud Investigation
Office (SFIO), the official said adding, the report indicates fund diversion and siphoning.
The matter will be referred to the agency in the next few days, the official added.
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Newspaper/Online ET Realty(online)
Date October 29, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/government-
likely-to-order-sfio-probe-into-dhfl-financial-irregularities/71803522
Can’t trace DHFL’s loans: Banks
Meanwhile, the government will soon order a probe by the Serious Fraud Investigation
Office (SFIO) after a report by the Registrar of Companies to the corporate affairs
ministry alleged diversion of funds by DHFL.
State-owned lenders to DHFL are understood to have informed the government that they cannot
ascertain recoverability or end-use of wholesale loans extended by the troubled housing
finance company. Given the lack of visibility on recoveries, they have indicated their inability
to move ahead with any resolution plan.
Meanwhile, the government will soon order a probe by the Serious Fraud Investigation Office
(SFIO) after a report by the Registrar of Companies to the corporate affairs ministry alleged
diversion of funds by DHFL. Agencies reported a government source stating that the company
will be referred to the SFIO in the next few days.
On September 27, DHFL had submitted a draft resolution plan wherein it sought conversion of
some of the debt to equity and elongating the repayment period for other debts. However, the
auditors had raised red flags over several loans and cast doubts over the ability of the firm to
sustain operations.
There have been other firms that have looked into the loans of DHFL at the behest of lenders.
These included KPMG, which conducted a forensic audit, and a couple of real estate firms that
sought to value the company’s securities. According to lenders, none of the reports have been
conclusive on the recoverability of loans. Lenders said that a resolution plan can be drawn only
when there is some visibility on future cash flows from these loans. They said that they have not
been successful in establishing a money trail of the loans.
The draft forensic audit report by KPMG had said that there were 28 entities with total loan
outstanding of Rs 12,451 crore, the repayments of which are not traceable. These include loans
advanced as bridge finance, loans against property, slum rehabilitation finance, and financing
through inter-corporate deposits.
The KPMG audit had indicated that DHFL had lent close to Rs 20,000 crore to companies that
had links to the promoters. Typically, in case of irregularities, lenders seek to bring about a
change in the management of the borrowing firm. If there is a clear sign of fraud, the loans are
reported to investigative agencies and banks must make full provisions for the loan in line
with RBI guidelines.
Some banks have made only partial provisions on their loans to DHFL. A fraud probe will force
them to set aside a larger amount from their third quarter earnings.
Newspaper/Online ET Realty(online)
Date October 30, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/cant-trace-
dhfls-loans-banks/71812656
The impending SFIO probe is the latest in the series of problems facing the housing finance
company. Earlier this month, the Enforcement Director started investigations into loans by the
company over its exposure to firms linked to Dawood Ibrahim aide Iqbal Mirchi.
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Prestige Estates Projects to focus on affordable housing
Realty firm Prestige Estates Projects plans to focus on mid-income and affordable housing
projects, the segment that has been driving demand for residential units in India.
Realty firm Prestige Estates Projects plans to focus on mid-income and affordable housing
projects, the segment that has been driving demand for residential units in India. The
Bengaluru-based company, which has ready stock worth over Rs 2,000 crore in the luxury
housing segment, will take up more luxury housing projects only selectively, said Irfan Razack,
managing director of Prestige Group, the parent company. Prestige had earlier tied up with
Vijay Mallya and Leela Hotels for one of the most expensive luxury homes projects in
Bengaluru.
Prestige is also looking to expand its presence in Hyderabad, NCR, Pune and Mumbai with
residential projects. It recently partnered with New Consolidated Construction Company
(NCCCL) and Ace Group to develop residential projects in Mumbai and Noida. “We have
utilised HDFC money to invest in three recent housing projects. Entry into new geographies
should add lots to our scale,” said Razack.
In 2018, the builder entered into a strategic partnership with HDFC Capital Advisors to set up a
dedicated residential platform to invest in the mid-income and affordable housing segment.
This platform has capital to the tune of Rs 2,500 crore, which is a combination of equity and
debt.
“The platform has been very beneficial for us,” said Razack.
The company is also looking to increase its hotel portfolio. It recently entered into a joint
venture with DB Realty to build the country’s largest hotel in Delhi.
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Newspaper/Online ET Realty(online)
Date October 29, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/prestige-estates-
projects-to-focus-on-affordable-housing/71801165
MahaRERA attaches unsold Nirmal Nagari flats to recover Rs 6
crore fine
The project was implemented by Nirmal Ujjwal Credit Cooperative Society, headed by
businessman Pramod Manmode.
In maybe the first such ruling at least in Vidarbha, Maha-RERA has issued orders for
attachment of unsold units of Nirmal Nagari Complex, off Umred Road, which has 540 odd
residential flats apart from commercial space. The attached property will be sold to realize the
fine levied on the society for various lapses.
The project was implemented by Nirmal Ujjwal Credit Cooperative Society, headed by
businessman Pramod Manmode.
The order comes after the society failed to pay6 crore fine levied on it for not registering the
project under Maharashtra Real Estate Regulatory Authority (Maha-RERA). Selling units
without registering the project is a violation of RERA laws.
Since the builder failed to pay the fine, orders have been issued to the district collector to attach
the property. Attempts to get response from Pramod Manmode failed. The property to be
attached includes the units in Nirmal Nagari that have not been booked or mortgaged to any
financial institution. If the property from the project falls short in recovering the fine amount,
the personal assets of the defaulters too can be seized.
The responsible persons include Manmode and five other officials of the society. The defaulters
will also have to disclose their property details and produce the property card. On failing to do
so, the person can be sent to three months of imprisonment, says the attachment order issued by
RERA.
The order also clarified that units or land that has been booked by a buyer or mortgaged to a
financial institution should not be touched, so the project can be completed.
The builders had flouted the very basic requirement of RERA, which calls for registering every
project before advertising or starting sales. The orders says that Nirmal Nagari project did not
fall in the exempted category, yet the builder did not get it registered under RERA.
Also, despite getting an opportunity, the builder did not disclose the cost of the project, which
was independently estimated by RERA to be at 300 crore.
Newspaper/Online ET Realty(online)
Date October 30, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/maharera-
attaches-unsold-nirmal-nagari-flats-to-recover-rs-6-crore-fine/71812793
Later, the builders’ counsel produced a document which showed that society’s claim for non-
eligibility for registration was rejected by the high court. Based on it the society had assured to
get the project registered within 60 days, however, it failed to do so.
It all began with a dispute between the residents and the builder over lack of basic facilities like
water supply, security and other amenities. Even as residents had moved in and a corpus of Rs8
crore was created by taking one time maintenance deposit, the amount was not transferred to the
house owners’ cooperative society.
Rather, the society itself was not formed by the builder. This led to a complaint by one of the
residents that the project itself was not registered under RERA.
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Newspaper/Online ET Realty(online)
Hub and Oak to invest Rs 4 crore to setup two co-working centres
in Delhi
Hub and Oak currently has four coworking centres comprising 300 seats in the national
capital.
Co-working start up Hub and Oak will soon open two new centres in the national capital
comprising 750 seats with an investment of about Rs 4 crore, a top company official said.
Founded by Srishti Dhir in 2017, Hub and Oak currently has four coworking centres comprising
300 seats in the national capital. These centres are at Defence Colony, Bhikaji Cama
Place, Nehru Place and Jasola.
"We are coming up with two new centres in Delhi by the end of this year. The locations have
already been finalised. These new centres will take our capacity to over 1,000 seats," Dhir said.
The company focuses on providing workspace solution to professionals such as lawyers and
chartered accountants, she added.
Hub and Oak provides seats in a price range of Rs 10,000 to Rs 12,000 per month.
Dhir said the company has invested about Rs 1.2 crore to set up these four operational centres
and will put in Rs 4 crore more on these two new co-working facilities.
Asked about revenue, she said the company's revenue is Rs 20 lakh per month currently and this
will reach Rs 60 lakh with opening of these new centres.
"We operated one centre in defence colony for over two years at 100 per cent occupancy before
we decided to expand and grow this business. Now, we want to expand and open centres across
India through blitz-scaling strategy," said Dhir, who is an alumni of London Business School.
Coworking segment has been performing well in India because of demand for quality flexible
office space from corporates and startups.
According to property consultant JLL India, office space taken up by co-working operators was
13 per cent of the overall net leasing of 32.7 million sq ft during the first nine months of 2019.
Date October 29, 2019
Link https://realty.economictimes.indiatimes.com/news/commercial/hub-and-oak-to-
invest-rs-4-crore-to-setup-two-co-working-centres-in-delhi/71805489
Newspaper/Online Financial Express (online)
Date October 30, 2019
Link https://www.financialexpress.com/industry/adani-group-partners-with-us-based-
digital-realty-for-data-centre-infra-in-india/1749162/
Adani Group partners with US-based Digital Realty for data centre
infra in India
A data centre is an infrastructure facility with networked computers and storage that
other businesses use to catalogue, process and distribute large amounts of data.
The Adani Group on Tuesday said it would partner with San Francisco-based Digital Realty to
foray into the data centre domain. Adani Enterprises and Digital Realty have signed a
memorandum of understanding (MoU), wherein the two companies will evaluate developing
and operating data centres, data centre parks and cultivating undersea cable provider
communities of interest across India.
A data centre is an infrastructure facility with networked computers and storage that other
businesses use to catalogue, process and distribute large amounts of data.
“Data centre infrastructure is critical to enable a Digital India and this partnership leverages
several of the capabilities developed by the Adani Group in power generation, transmission,
retail electricity distribution, access to waterfronts through the ports business, and real estate
management. Also, as one of the top five renewable energy companies in the world, our ability
to power our data centres with solar and wind energy is unique and addresses some of the
challenges of building and operating data centers,” said Gautam Adani, chairman, Adani Group.
The Adani Group is a $13-billion business conglomerate in India focused on coal mining, solar
modules manufacturing, real estate and edible oil production. Digital Realty provides data
centre services to companies across North America, Europe, Latin America, Asia and Australia.
The Adani Group has recently taken steps to grow its presence in the infrastructure sector, and
set up multiple companies to begin metro rail and airport construction and operation services. ___________________________________________________________________________________
Newspaper/Online ET Realty(online)
Date October 29, 2019
House prices in UK edge up slightly in October: Survey
House prices rose by 0.4% on the year, Nationwide said on Tuesday, the 11th month in a
row that annual price growth remained below 1%.
British house prices, which have almost flat-lined ahead of Brexit, grew a bit more quickly in
October, a survey from mortgage lender Nationwide showed.
House prices rose by 0.4% on the year, Nationwide said on Tuesday, the 11th month in a row
that annual price growth remained below 1%.
A Reuters poll of economists had pointed to another rise of 0.2%, which would have matched
September's eight-month low.
Nationwide's chief economist Robert Gardner said average prices rose by 800 pounds ($1,029)
over the last 12 months, a sharp slowing compared with the 12 months to October 2016, just
after the Brexit referendum, when prices jumped by 9,100 pounds.
Some measures of the housing market have shown prices falling recently in London and
neighbouring areas.
Nationwide said in October alone, British house prices rose by 0.2%, also slightly stronger than
forecasts of no change in the Reuters poll.
Gardner said Britain's strong labour market - the silver lining of the economy before Brexit -
and low borrowing costs were offsetting the drag from the uncertain economic outlook.
"The question is whether this pattern will continue," he said.
The European Union agreed on Monday to delay the Oct. 31 Brexit deadline by up to three
months and Prime Minister Boris Johnson said he would push on with his attempt to end
Britain's political paralysis with an election on Dec. 12.
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Link https://realty.economictimes.indiatimes.com/news/residential/house-prices-in-
uk-edge-up-slightly-in-october-survey/71807383
Newspaper/Online ET Realty(online)
Brazil's Cyrela Commercial Properties raises $190 million
Cyrela priced its offering of 40 million new shares at 19 reais per share, above its 18 reais
closing price on Monday in Sao Paulo stock exchange.
Brazilian commercial real estate company Cyrela Commercial Properties raised 760 million
reais ($190.4 million) in a share offering on Monday, the company said in a securities filing.
Cyrela priced its offering of 40 million new shares at 19 reais per share, above its 18 reais
closing price on Monday in Sao Paulo stock exchange.
The company will raise its capital to 1.6 billion reais with the proceeds of the offering. CCP, as
the company is known, is the fourth homebuilder to raise capital this year. During Brazil's
harshest recession in decades, homebuilders faced losses and did not access capital markets.
The offering signals renewed interest by investors in Brazilian real estate, as the country's
interest rates fall to their lowest level ever.
Tecnisa raised $118 million in a share offering last July. Helbor Empreendimentos SA and
Eztec Empreendimentos also sold shares this year.
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Date October 29, 2019
Link https://realty.economictimes.indiatimes.com/news/commercial/brazils-cyrela-
commercial-properties-raises-190-million/71805426