ICCPL PROPERTY NEWS

NEW GURGAON RIDING HIGH ON INFRASTRUCTURAL ADVANCEMENTS

         Catalysed by the availability of affordable homes, superior connectivity, great advancements in infrastructural developments and what all has been planned in terms of future growth prospects; New Gurgaon has off late emerged as a spirited residential and commercial hub in the National Capital Region. New Gurgaon has been immaculately planned and it’s two main clusters include Sectors 102 – 113 along the to be operational Dwarka Expressway and Sectors 76 – 95 & 95A. The region has seen keen interest from top developers such as DLF, Vatika, Ansal Housing, etc. and for that matter, even North India’s leading affordable housing developer Signature Global.

Commenting on how New Gurgaon is developing into a state of the art modern micro pocket, Avneesh Sood, Director, Eros Group says, “The two regions are emerging well into micro pockets and have been identified as budding strips for residential projects in Gurgaon, along the National Highway 8. The catchment area of these pockets extends from the sectors immediate after the Kherki Daula toll plaza and extending up to Manesar. Accessibility and good existing connectivity has also made this region more visible to the masses.”

New Gurgaon scores very high on connectivity front with direct access to NH 8, KMP Expressway and the Dwarka Expressway. With rail and air connectivity in close vicinity, it only adds more feathers to the cap and an ISBT has already been proposed close by to this micro pocket will only provide extra impetus to it’s growth quotient. Putting more weight on it, Pradeep Aggarwal, Co – Founder & Chairman, Signature Global says, “For the development of a region, infrastructure and connectivity go hand-in-hand and are of utmost significance. Without either one of them, the region can only witness growth at snail’s pace which in present time, won’t be considered suitable for development and returns. Projects like DMIC and Gurgaon Manesar Urban Complex give this region an edge over the others which is solely the reason why the workforce of Manesar and Gurgaon are eyeing the new developing sectors owing to the availability of affordably priced homes.”

In terms of other infrastructural developments, New Gurgaon has still a long way to go by the standards of what has been planned for this region. Social infrastructure is almost absent if one talks as of today but with considerably progress on physical infrastructure, social infrastructure will also catch up pace. However, from an investment point of view, New Gurgaon has all the attributes which makes it a preferred destination for better real estate returns. Explaining further on this, Rakesh Yadav, Chairman, Antriksh India Group says, “The pressure on the existing infrastructure is increasing day by day and newer areas need to be developed on priority. New Gurgaon is the outcome of one such decision but to help the cause further, these upcoming regions will have to well supported with socio – physical infrastructure enabling them to meet the standards of the millennium city. One of the key factors attracting buyers towards the area is its connectivity with Delhi on one side and Neemrana on the other via NH 8.”

There are already large township projects which have been planned in New Gurgaon and some are even delivered. The Delhi Mumbai Industrial Corridor (DMIC) has plans of developing multiple centres of excellence and is likely to provide further impetus to growth around this micro pocket. DMIC is bound to see huge investments in the form of FDI which will not only boost the overall economy of the country but also the clusters falling along it. Automobile and other subsidiary industries have already created a hub out of Manesar which is a promising sign. Commenting on how all these parameters including connectivity have acted as the backbone for the sector, Kushagr Ansal, Director, Ansal Housing concludes, “There are two ways of providing proper connectivity to a property, the first is choosing an area which is already well connected and the other would be to develop the property and then wait for the connectivity to improve. Sound infrastructure has always been substantial to meet the initial and continuous footfall in a region. In case of New Gurgaon, connectivity is in surplus but still lot of ground has to be covered in terms of social infrastructure and civic amenities because in the absence of these, you cannot have a complete property in true sense. And in the long run as infrastructure steps up in the region, realty prospects will greatly shape up.”

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ICCPL PROPERTY NEWS

INDIAN REAL ESTATE WELCOMES GST

          1st of July 2017; this date will go down in the history books of our country when the biggest tax reform got implemented with full force across the nation in all the industries and sectors. Real estate sector being one of the largest contributors towards the Indian GDP and employment generation, it’s reactions, objections and suggestions are always considered whenever any big policy implementation takes place in the country.

The much awaited Goods and Services Tax (GST) has been finally implemented inspite of all the bottlenecks and confusions looming, where even real estate sector has got its rate finalised. Real estate being a case of land, which is an asset, is neither regarded as a good nor service. As a result, a different solution has been provided to counterbalance the negative effects of tax on the valuation of property. After the final notification, the government has declared the GST rate for under-construction properties in real estate at 18 percent which will be applicable on two-thirds of the value of the property. The one-third or 33.33 percent discount on property value has been given against the land price. Since land is an asset and with court pronouncements, this has resulted in it being kept out of the GST regime.

Previously, a different formula for the calculation of service tax was carried where an abatement of 70 percent was allowed on the total value of the property to adjust against value of land and commodities utilised for the construction of a unit. Therefore, buyers earlier had to pay only 15 percent on the 30 percent of the property value. Thus, the net service tax for the real estate was 4.5 percent only. Whereas now, the GST rate for under-construction real estate has been decided at 18 percent; but the net tax incidence will remain at 12 percent (two-thirds of 18) of the selling price for a unit or property.

Apart from service tax, a property may go through several other central and state levies in the form of VAT, excise, CST, registration and stamp duty charges. These jointly contribute and brings the total indirect taxation to about 5-10 percent, varying with states. Stamp duty and registration charges are exclusive of this and further adds to the net cost for the buyer. But with GST, a 12 percent levy along with registration and stamp duty charges, property prices for under-construction units are expected to go up if the benefit from input tax credit is not passed on by the developers.

Now with the GST in place, it will bring about clarity, transparency and uniformity towards taxation in the country’s real estate sector. Also with the anti-profiteering clause added in the GST law, it will be mandatory to pass on the benefit of tax reduction arising out of the input tax credit to the final customer. The multiplication of taxes will now get curbed as credits of input taxes paid during each stage of production can be availed in the succeeding stages of value addition.

In a nut shell, GST for the realty sector is projected to be beneficial in the long run, if implemented in a proper manner. The only dampener can be if the benefit of the input tax credit is not passed on to the buyers. In the long term and for the overall economy in general, GST is expected to contribute 1-2 percent towards the Indian Gross Domestic Product (GDP).

Industry Reacts:

Avneesh Sood, Director, Eros Group

The biggest tax reform in the form of GST has finally arrived and is expected to pave way for a much transparent and uniform tax structure in the Indian realty sector. For the residential real estate front, this reform is sure to be a sentiment booster in the short run but challenges may come up for the developers due to the initial transition process into the new tax regime. And for the investors and stakeholders of this sector, much gain will be on offer in the long run.

Abhishek Bansal, Executive Director, Pacific Group

Elimination of various indirect taxes, lower transportation and logistic costs, benefit arising out of input tax credit and simplification of tax structure are the major highlights of GST which will allow a much needed breather for the unorganised nature of the realty sector. A simple and clear method of purchasing property under the GST regime will attract the homebuyers towards the sector which in the long run will add onto the demand for property.

Manoj Gaur, Vice President CREDAI-National & MD, Gaursons Group

The wait for a uniform tax structure in the country is finally over and real estate sector amongst others will benefit largely. A well-defined GST implemented for the country will bring about a relief for this sector and its customers. Commercial realty players will be hugely benefitted as all the lost Cenvat credit, which is in current regime a cost to commercial developer can be availed if GST is applied in a free flow manner that will also help in reducing costs. A much simplified single tax rate, reduced construction costs and better transparency in the sector will be much welcomed by the developers and its customers.

Pradeep Aggarwal, Co–founder and Chairman, Signature Global

With prices going up post the tax reform, government will have to find out ways of minimising the effect of this rise on the average Indian homebuyers. Banks will have to be pushed to further lower down on their lending rates, ensuring that the end payout remains the same in cases of property purchases. Keeping the affordable housing segment out of GST’s ambit is a good move but measures for the removal of stamp duty charges must be taken into consideration to further lower the burden off the mid-segment buyers.

Akshay Taneja, MD, TDI Infratech

Steel currently attracts taxes in the range 18-19% but post GST it will be fixed at a uniform rate of 18%. This goes on to show that the effect of GST on steel would be bare minimum but what everyone is looking at is the inputs of the steel industry like coal and iron ore which have been finalised under the GST slab of 5% might influence steel prices to come down and hence benefit the real estate sector in the long run.

Gaurav Gupta, General Secretary, CREDAI – RNE

Prices of properties are bound to go up post the implementation of GST as under-construction projects will attract taxes in the slab of 12% as against the previous 4.5% approx. With no other rebates from stamp duty and other verticals, home buyers are sure to face the brunt of this. The only respite would be from developers to judiciously pass on the benefits of input tax credits, if any applicable, to the buyers. 

Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz

A uniform tax structure in the real estate sector will enhance transparency and keep the tax evaders on check. With the anti-profiteering clause in the GST law, benefits received from the input tax credit will be helpful for the buyers which in turn will create a fresh demand for real estate. Impact of GST in sync with RERA will positively transform the Indian realty sector in the next 18-24 months. Finally, a single tax regime has always been a big hit amongst the foreign investors and thus, we expect the FDI inflow in real estate to double in the next couple of years as REITs and InvITs will also see its operations in India very soon.

Manoj Chaudhary, MD, Airwil Infra Ltd.

Earlier, the homebuyers of this sector were under the pressure of two forms of taxes; service tax and VAT on the purchase of residential units when booked prior to its completion. Before GST, there were numerous components of non-creditable tax costs such as CST, entry tax, customs duty, excise duty, etc. which were duly paid by the developer upon its procurement which were basically ingredients for the cost pricing of the units. With the GST now, a single tax structure will be followed which will remove the multiplication and duplication of indirect taxes that will promote transparency in dealings. We are expecting the demand numbers to grow by a steady 5-7 percent for the residential real estate and 10-15 percent for commercial segment over the course of next 3-5 years.

Dhiraj Jain, Director, Mahagun Group

Cement is as essential a component of the realty sector as any other and the current tax slab of 24-25% would be revised to 28% with the implementation of GST. This will directly influence the construction cost of a project ultimately pushing the prices of properties higher. On the flip side though, GST shall bring a multi-edged positive impact on the sector, bringing in more transparency, eradicating multiple taxation system and making the system more systematic and streamlined.

Piyush Sharma, Senior Vice President, Sikka Group

This is a historic moment for the entire nation where a completely fresh tax reform has been implemented in full force which is projected to boost the economy in the long run. As for the real estate sector, clarity over transacting and eradication of multiplicity of taxation will motivate buyers and bring an end to the cascading effect that inflated the prices earlier. With the availability of input tax credit, benefits will be passed onto the buyers which will gradually pick up the demand.

Vikas Bhasin, MD, Saya Group

GST will without a doubt be a game changer for the Indian real estate sector in the times to come. Ensuring a steady and stable tax regime along with transparency for the buyers, it will allow the sector to increase its contribution towards the economy and the GDP in the next few years. According to the net tax of 12 percent for the real estate sector, under-construction properties falling under the affordable or budget segment level might become cheaper, whereas the luxurious or premium category housing units are expected to see a price rise now.

Rakesh Yadav, Chairman, Antriksh India Group

With the cost of under-construction properties projected to go up due to the new tax rate under GST, the government must now work towards abolishing the stamp duty and registration charges and offer land parcels at much subsidised rates. This, if coupled with lowered rate of interest by banks for home loan will bring about a lot of cheer among the buyers in the sector and bring a sudden surge in demand. At the same time, GST will prove to be a major contributor towards offering more clarity over taxation for the buyers, which has not been a case till date.

Kushagr Ansal, Director, Ansal Housing

With the dawn of concepts like hustling in service tax coupled with reductions and various mandatory charges collected by developers earlier, highlights the importance of having a same tax base for which GST was the only answer. A single tax rate across the country will now promote fair practices which will further encourage transparency and less evasion in the sector that supports in future growth of demand for real estate. GST will definitely prove to be a game changer for the Indian economy and provide a stimulus to the foreign demand coming into India.

Rajesh Goyal, Vice President CREDAI-NCR & MD, RG Group

The wait for GST is finally over as the much discussed consistency in the tax structure will now be visible. Real estate sector will now be charged at a net tax rate of 12 percent which will be almost 3-5 percent more than the previous combined effect of service tax and VAT on the under-construction properties. But if the developers pass on the benefits of the input tax credit to the buyers, then the effect might get more or less neutralised. Buyers are expected to relish the real estate sector post GST as they will have complete clarity over the taxation.

ICCPL PROPERTY NEWS

DELHI BASED REALTY FIRM, SIKKA GROUP RAISES 230 CRORES

Noida: Real estate company Sikka Group has raised 230 Crores from a leading Indian bank for three of its housing projects Sikka Karnam and Sikka Kaamna in Sector 143 on Noida Expressway and Sikka Kimaantra in Sector 79 in Noida.

The amount raised would be utilised towards speeding up the construction of the mentioned projects, two of which along the Noida Expressway are already in the advance stages of completion. Where as Sikka Kimaantra is also in full swing and will be delivered post the delivery of Sikka Karnam & Sikka Kamna.

Sikka Karnam which is spread in 10 acres and Sikka Kaamna which is spread in 12.5 acres are set to start the delivery by the last quarter of this year and have approximately 1247 and 1710 units respectively and Sikka Kimaantra has approximately 364 dwelling units and is spread across 5 acres.

Speaking on accruals, Gurneet Singh Sikka, Director, Sikka Group said, “Our focus has always been to deliver on whatever we promise to our customers. On similar lines, we are also planning to raise funds for our other projects so that we can deliver them on time as well. The total saleable area which will be delivered through the accrual of these funds is close to 45 Lakh Sq. Ft. which will be the abode of over 3300 families. Partial disbursement of the funds has been done recently and the remaining instalments would soon follow.”

ICCPL PROPERTY NEWS

FNG EXPRESSWAY: THE GATEWAY TO NCR’s PERIPHERAL CONNECTIVITY


      Decongestion of Delhi has long been on the cards and ever since the idea of satellite cities was formulated, there have been talks of interlinking them from the outskirts making sure that vehicular traffic between them does not need to pass through the national capital. Eastern Peripheral Expressway was one such project, a part of which is termed as the FNG Expressway connecting Faridabad, Noida and Ghaziabad. The six lane expressway is touted to be around 56 Kms long and will connect NH 24(NH 9) with NH 2 engulfing Ghaziabad, Noida and Faridabad. 20 Kms stretch of the expressway falls under the Noida – Greater Noida region and is expected to be complete by this year end. Once complete in true senses, this expressway will not only unlock land parcels in the regions along it but also allow working classes to buy affordable houses on the outskirts of the city which will cumulatively change the urban landscape of the region.

Throwing light on the same, Rakesh Yadav, Chairman, Antriksh India Group says, “History has been a witness to how well-developed infrastructure and connectivity shapes up the real estate prospects of a region. There exist a direct relation between real estate in a region and the region’s development with respect to infrastructure and connectivity. You talk about India and other countries, everyone’s real estate performance bets upon decent infrastructure and connectivity in the region to make sure that target audience is grabbed for short term which can be carried till long term as well. Localities with better road connectivity always get picked first in case of buying or developing the property and hence one can say that the completion of this expressway will boost real estate to a great extent in the adjoining regions.”

The same goes on to exemplify for both commercial and residential real estate which is very well reflected in the words of Manoj Chaudhary, MD, Airwil Infra who says, “Connectivity and quality of roads reduces the travel time between places hence increasing the approachability between them. Connectivity improves the social meetings with friends and families with low fuel expenses, low travel time and low distance. Travelling to workplaces also gets improved as the amount of time taken for reaching workplaces is reduced. As the time taken to travel to workplaces is reduced; hence people can enjoy their life apart from the office and spend more time with friends and families thus enhancing their lifestyle. Also, once a commercial property sets up in a region, it banks high on external catchment and if the location is well connected with decent infrastructure, it becomes 50 percent easy for the commercial property to meet its supply.”

FNG Expressway is bound to outshine the existing status of Noida’s already famed real estate because of the seamless connectivity it will provide to its multiple sectors such as sectors 137, 142, 150, 168, etc. Describing this further, Dhiraj Jain, Director, Mahagun Group says, “For a real estate region to be successful, location, connectivity and infrastructure play the maximum role. The supreme positioning of this expressway is sure to enhance the unmatched connectivity of these regions and give buyers another reason to invest in these sectors. This will ensure that people employed not only in Noida or Greater Noida but also in Faridabad can look out for residential options in these sectors. Also, with a proposed SEZ in vicinity of this expressway, it will open employment opportunities for people from both ends of the expressway.”  

Concluding on the benefits of this patch on NCR’s realty market, Deepak Kapoor, President CREDAI-Western UP & Director, Gulshan Homz says, “This project once completed will be a true blessing in disguise not only for a daily commuter as it will smoothen the nightmarish traffic on the 56 kms stretch, but is also one Infrastructural development which will prove to be a true boon for Real Estate Developers. Along with the stretching metro connectivity, all farfetched areas of Delhi NCR will slowly become more and more accessible and bring them to the forefront for the general masses. There are further plans to connect all five prime regions of Noida, Ghaziabad, Faridabad, Greater Noida and Gurgaon through a network of planned expressways which will further enhance the connectivity of the entire NCR.”

ICCPL PROPERTY NEWS

NO CHANGE IN THE PRE-GST REVIEW BY RBI

          With the biggest tax reform in the country to be implemented from the first day of the next month, today’s bi-monthly monetary review came out with no surprises as India’s central bank governor Dr. Urjit Patel kept the key rates unchanged in it’s second policy review for the FY 2017-18. With the apex bank currently holding excess liquidity and the economy unable to tackle the growth slowdown, keeping the rates unchanged was a balanced and cautious move, also keeping in mind the implementation of the Goods and Services Tax (GST) from 1st of July.

   With today’s decision in the monetary review, Repo rate remains unchanged at 6.25 percent, Reverse Repo rate at 6 percent, Marginal Standing Facility (MSF) at 6.50 percent and Cash Reserve Ratio (CRR) at 4 percent respectively. Although, the Statutory Liquidity Ratio (SLR) has been brought down by 50 basis points to 20 percent from 20.5 percent previously, which will take effect from the fortnight beginning 24th June. In the post demonetised era, RERA implemented across the country with majority states still to follow suit and GST to come up next; residential demand and prices are expected to make an upward movement. Realty experts and stalwarts feel that this monetary review should have provided a rate cut as prices after RERA and GST are projected to go up.

Industry Reacts:

Avneesh Sood, Director, Eros Group

Looking at the market dynamics, we were projecting the RBI to maintain the status quo as it is currently holding high liquidity and a historic tax reform in the form of GST is in the pipeline. A balanced move today will allow the market to absorb the upcoming impacts from GST on various industries and sectors. The next policy review might allow the RBI to cut repo rate, the benefit of which might be passed on by the banks in the near future.

Manoj Chaudhary, MD, Airwil Infra Ltd.

We were anticipating a rate cut this time which would have pushed the banks to further reduce the lending rates. Any reduction in lending rate allows the sentiments to improve as the net cost on the buyer for the housing unit gets decreased. With RERA and GST to have a joint impact on the realty sector, a rate cut this time could have provided a much needed breather for the sector, its players and the buyers as well.

Dhiraj Jain, Director, Mahagun Group

Even though the RBI has not cut the repo rate today, still there is a lot of room for the banks to further reduce the lending rates. The previous repo rate reductions by the apex bank are yet to offer the complete results; that is held by the banks. A lending rate of 6-7 percent is ideal for our realty sector as we are moving towards strong policy changes at the national level which will leave long term effects on the realty sector and its allied industries.

Kushagr Ansal, Director, Ansal Housing

A rate cut of 25 bps could have helped ease the pressure off the market which has been balancing itself through the confusion still pertaining with RERA. With GST to become operational from July, prices for properties are expected to shoot up. During such scenarios, a slash in repo rate would have meant drop in home loan rates by banks, which ultimately reduces the burden off the buyers. With no change today, we expect the market to run uniformly with a static demand in the short run.

Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz

This decision of RBI to keep the rates unchanged will prove very substantial in the first quarter post GST is implemented. Before questioning the judgement of the apex bank on holding the rates, one must not forget that it has to keep sufficient cushion for the economy with the massive changes that will come about in the next few months in form of REITs, InvITs, GST, and SPVs.

ICCPL PROPERTY NEWS

Dushyant Sinha, Founder of ICCPL bags the award for Best PR Professional of the Year- 
New Delhi – In a glittering event held in the capital, Dushyant Sinha, the founder of ICCPL, a renowned PR & Digital Communications Company received the award for Best PR Professional of the Year.
The event was marked by the presence of Shri. J.P.Nadda, Union Minister for Health, Honourable Governor for Goa, Mrs. Mridula Sinha and many more imminent personalities from politics, health & real estate sector. The award ceremony was held at Hotel Lalit, New Delhi.
Integrated Centre for Consultancy Pvt Ltd (ICCPL) is a growing name in the fields of Public Relations and Digital Communications which has expertise in Real estate, Education, Health and Automobile sector. The company today is one of the front runners in its sector and is gradually moving towards becoming the biggest service provider in communications in Northern India. The company was founded by Dushyant Sinha way back in 2011 and today it has developed in group of companies and every group company managing its own set of clients. The company primarily caters to Public Relations & Digital needs for its clients.
Dushyant Sinha, the founder in last couple of years has won multiple awards in various categories of marketing and public relations. The young entrepreneur believes that such awards are good for motivation and credits his team for all the success and is looking forward for more such accolades in future.

ICCPL PROPERTY NEWS

KKR INVESTS 200 CRORES IN SIGNATURE GLOBAL’S AFFORDABLE HOUSING

Delhi: Leading financial investor KKR has committed to invest 200 Crore in the National Capital Region based affordable housing player Signature Global India Private Limited. The company has alongside launched two more affordable housing projects in Gurugram primarily ‘The Millenia’ in Sector – 37D and Solera 2, in Sector 107. The projects would also be coming up under the Haryana Affordable Housing Policy like their earlier projects. The company also plans to deliver the first phase of the project Solera, launched in 2015 under the same policy and awarded a 5 star rating from CARE Rating, by the early 2018. This will be the first delivery of any Haryana affordable housing policy project across Haryana . 

On this occasion, Pradeep Aggarwal, Co – founder & Chairman, Signature Global said, “It is very exciting and encouraging at the same time to partner with a leading financial investor like KKR and we wish to take forward this partnership in a long way. We are currently developing approx 7,400 affordable homes out of which we have already allotted 5005 units and 2400 would be allotted soon. We wish to develop over 1,00,000 affordable homes till 2022 . The current launch of over 1900 units is a step in the same direction and would come up at a total cost of 500 Crores.”

Apart from the recent accrual of 200 Crores, Signature Global had also raised 150 Crores from ICICI Prudential in May last year. To boost rural and urban housing , post demonetisation, the Prime Minister had announced interest subsidy of up to 3, 4 & 6.5 per cent on loans taken under the Pradhan Mantri Awaas Yojana. The amount raised through this recent funding would be used towards the development of its affordable housing projects.

Speaking further on the group’s expansion plans, Ravi Aggarwal, Co – founder & Managing Director, Signature Global Group said, “Signature Global has the vision of Har Parivar Ek Ghar and working with that vision, they wish to be one of the leading contributor towards the PM’s vision of Housing for All and that is the reason we would be soon expanding to other cities like Karnal, Ghaziabad and further to multiple cities in Uttar Pradesh and Maharashtra. Lalit Aggarwal , Co – founder &  Joint Managing director added we are also exploring opportunities for Joint Development Agreement across the country in affordable housing segment. Talks are already in the closing stages of a JDA in Mumbai for affordable housing. We are looking at launching another 20,000 affordable housing units by the end of this financial year wherein our focus will remain the same of providing quality housing for first time home buyers.”

KPMG India Private Limited and Yes Securities Ltd., a wholly owned subsidiary of YES Bank Ltd. acted as financial advisors to the transaction.