Friday, February 26, 2021

Table of Contents for Ticker Tape





Ticker Tape - Construction

Mahindra Lifespaces and State Bank of India sign MoU to provide seamless experience to homebuyers

Mahindra Lifespaces, the real estate and infrastructure development arm of Mahindra Group, and State Bank of India (SBI), India’s largest home loan lender, recently signed a Memorandum of Understanding (MoU) to enable an improved and more seamless experience for homebuyers across India. As part of the agreement, which includes various co-promotional activities and outreach initiatives, customers and employees of SBI and Mahindra Lifespaces will be able to avail the benefits of faster home loan processing and approvals, and special discounts and schemes. Mahindra Lifespaces is continually innovating in its homes and offerings to improve the home buying experience. In line with the Company’s focus on environment-friendly, healthy living, all Mahindra Lifespaces homes are certified ‘green’; and incorporate waste management, and water and energy conservation measures.

 

 

Industrial, warehousing space leasing likely to grow by 83% in 2021: Savills India

Manufacturing, 3PL, e-commerce and Tier-II cities drove growth in 2020, a 113% increase in supply to 47.9 million sq ft is expected in 2021. Industrial and warehousing space absorption is expected to grow by 83 percent to 47.7 million sq ft in 2021, driven by a robust growth in e-commerce and manufacturing sectors as well as rising demand in emerging Tier I and II cities, global property consultancy firm Savills India has said. The 3PL, or the third-party logistics, and e-commerce sectors continued to drive warehousing demand, accounting for 60 percent of the total absorption in 2020 followed by the manufacturing sector at 24 percent.

“Growing demand for cold chain, pharmaceutical warehouses as well as growth in ecommerce and organised retail are likely to drive warehousing demand in 2021,” said Srinivas N, MD, Industrial & Logistics, Savills India.

In addition, strong macro-economic fundamentals and the government’s policy support in implementation would continue to fuel growth for the entire sub-asset class of industrial and logistics, he said.

The growing numbers of firms in 3PL and e-commerce sectors and the huge Indian consumption market have whipped up the investment prospects of India’s warehouse sector. In 2020, the industrial and warehousing market witnessed investments in excess of 1 billion dollars.

 

 

India’s growth as R&D hub to drive demand for commercial real estate

India is expected to become a hub of global Engineering Research & Development centres and contribute significantly to the digital strategies of global multinational corporations resulting in higher demand for commercial real estate and data centres. By financial year 2022, engineering R&D revenues are estimated to register a compound annual growth of around 8% with multinationals driving growth across products and services, according to property consultant Cushman & Wakefield. Going forward, Engineering R&D revenues are expected to surpass revenues from business process management (BPM) services, thereby consolidating the former’s position as the second-highest contributor to software revenues, after information technology.

Moreover, Indian technologies and applications such as artificial intelligence, cloud, predictive analytics smart devices, etc. As of financial year 2019, Engineering R&D centres accounted for around 20% of cumulative software revenues multinational corporations caught routed around half of Engineering R&D revenues. This is expected to have a favorable impact on the development of the RMD systems. In India, as well as, job creation over the medium to long term.

According to Cushman & Wakefield, several tier-II cities are showing potential for the establishment of Global Capability Centres (GCC). Most of these are state capitals and are able to attract fresh talent besides better connectivity, superior physical and social infrastructure, while these cities are also ranked higher on ease of living and doing business.

 

 

DLF, Hines JV starts construction of Gurgaon’s commercial project, to invest Rs.2,600 crore

The joint venture between Hines, the international real estate firm and DLF the largest publicly listed real estate developer in India, has started construction of office complex in Phase -V, Udyog Vihar, Gurugram. Spread across 11.76 acres, the project will be developed in phases, with Phase I being 2.55 mn sq ft. In August 2020, the project secured a construction loan of Rs.2,600 crore from HDFC Ltd for the development of Phase I.

The project is targeted to be completed in stages in 2023-24. This marquee project will set new benchmarks in areas of safety, wellness, sustainability, which is the core of our philosophy to provide the best in class sustainable workspace solutions to our esteemed clients. The project is designed by Pelli Clarke Pelli Architects, whom Hines has roped in for the first time in Delhi / NCR for this project. The project has already secured IGBC platinum pre-certification and is designed to achieve Well Certification and USGBC platinum certification for enhanced tenant comfort and wellbeing. Spread across 11.76 acre, the commercial land parcel was purchased through an auction by HSIIDC.

DLF has developed 153 real estate projects and developed an area of approximately 330 million square feet. The group has an annuity portfolio of over 32 msf (approx.). Hines has approximately $133.3 billion of assets under management, including $71 billion for which Hines provides fiduciary investment management services, and $62.3 billion for which Hines provides third-party property-level services. The firm has 165 developments currently underway around the world.

 

 

NCR leads with the maximum absorption

Among the major cities in India, NCR led with the highest absorption in 2020 at 25 percent followed by Pune at 15 percent. Mumbai and Chennai saw absorption at 13 percent each while Kolkata stood at 12 percent.

Tier-II cities such as Ludhiana, Lucknow, Coimbatore, Jaipur, Guwahati, Bhubaneswar, Nagpur and Patna witnessed around 3 mn sq ft in 2020. These cities are likely to gain momentum in 2021 with ecommerce and 3PL firms capitalising on consumption-driven growth and pushing the demand for warehousing space, the report said.

On the supply side, Savills India expects a 113 percent increase in supply to 47.9 million sq ft in 2021.

Despite construction activities getting affected due to the lockdown, the Top 8 cities of India witnessed a fresh supply of 22.4 mn sq ft in 20202. NCR accounted for 22 percent of the supply, Chennai 20 percent and Bengaluru 12 percent.

The overall industrial and warehousing space stock is expected to increase by 21 percent at 278 mn sq ft in 2021 compared to 230 mn sq ft in the previous year.

Warehousing vacancies have also decreased by 170 basis points from 10.2 percent in 2019 to 8.5 percent in 2020 and rental values remained stable in 2020 across the major cities.

“India is emerging as an alternate manufacturing investment destination. Foreign manufacturing companies are planning to shift their manufacturing base to India. This would lead to an increased demand for both ready high spec fitted out and custom-built industrial spaces across India particularly from growing sectors such as FMCG, energy, automobile, electronics, pharmaceutical, medical devices among others,” said Srinivas.

 

 

JSPL records highest ever Production & Sales in December 2020

JSPL Steel operations reported their highest ever monthly production volumes with 7.27 lakh tonnes during December 2020. JSPL’s integrated steel plant in Angul reported the highest ever monthly production to 4.16 lakh tonnes, JSPL’s Raigarh steel plant also reported the highest monthly production to 3.11 lakh tonnes. JSPL also reported the highest ever monthly sales of 7.11 lakh tonnes in December 2020.The Company posted a record standalone Steel production of 19.3 lakh tonnes in Q3FY21 compared to 16.1 lakh tonnes in Q3FY20. JSPL’s Standalone Steel sales also increased by 12% (Y-o-Y) to 18.8 lakh tonnes in Q3FY21 compared to 16.7 lakh tonnes in Q3FY20. JSPL’s Steel exports increased by 18% (Y-o-Y) to 3.87 lakh tonnes in Q3FY21 contributing 21% to the total sales volumes.

 

 

DDA’s new housing scheme 2021 launched, application deadline Feb 16

A new housing scheme of the Delhi Development Authority, with 1,355 flats on offer, was launched recently. The scheme is completely online through DDA’s newly developed AWAAS software, from processing of application to possession of flats. The scheme was virtually launched by DDA Vice Chairman Anurag Jain. Over 1,350 flats are on offer under the scheme for various categories of flats, at locations, such as Dwarka, Jasola, Manglapuri, Vasant Kunj and Rohini. Maximum number of flats have been offered in the MIG category, the official said. The scheme was approved recently during an online meeting of the Authority, the highest decision-making body of the DDA, chaired by Delhi Lt Governor and DDA Chairman Anil Baijal.

 

 

Mumbai property registrations spike continues, sets historic highs in December

A combination of all-time low housing loan rates, price discounts and, more importantly, a reduction in stamp duty has bolstered property registrations in Mumbai, the country’s commercial capital, to set a historic high in December. The unprecedented rush among homebuyers to register their transactions continued even on the last day of the year, pushing the total number of deals up 204% from a year earlier to 19,552 in December until 7pm on Thursday, showed data from the office of the Inspector General of Registration in Maharashtra.This is 330% higher than the pre-Covid-19 month of February and up 210% from November. Revenue collection from these registrations rose nearly 25% from December 2019 to about Rs.678 crore despite the reduction in stamp duty rates announced by the state government. Stamp duty revenue was Rs.288 crore in November. On December 18 that the performance in December had already broken all the monthly records in the first half itself. In fact, November’s performance was the highest in eight years.

In August, the Maharashtra government had announced a reduction in stamp duty on property registrations to 2% for transactions between September 1 and December 31, from 5% earlier.

The stamp duty will be 3% for agreements to be registered between January 1 and March end.

Following this announcement, real estate transactions in Mumbai, Pune and other urban pockets of the state witnessed a sharp jump. The registrar had to keep all 26 Mumbai offices open on all Saturdays to accommodate the higher number of deals. The government has also started to operate registration offices in two shifts. They were having only one shift since the start of the Covid-19 pandemic.

In Mumbai, all registration offices now commence operations at 7 AM and close at 9 PM, as against the earlier timing of 10 am to 5:30 pm. Apart from helping convert pent-up demand in the mid-income and affordable segment, the stamp duty reduction has been driving several large-ticket transactions as well in the city, and the trend is expected to continue.

 

 

Ahmedabad, Pune, Chennai most affordable housing markets of 2020: Knight Frank Survey

Knight Frank India, a leading international property consultancy released its Affordability Index survey, which cited Ahmedabad as the most affordable housing market in the country with an affordability ratio of 24% followed by Pune and Chennai at 26% each in 2020. Mumbai was the most expensive market, with an affordability ratio of 61%. Affordability Index 2020 of Knight Frank India, a leading international property consultancy, cited Ahmedabad as the most affordable housing market in the country with an affordability ratio of 24% followed by Pune and Chennai at 26% each in 2020.

Knight Frank’s proprietary Affordability Index, which tracks the EMI (Equated Monthly Installment) to income ratio for an average household, has shown meaningful improvement in affordability over the last decade. Even in the pandemic year of 2020, housing affordability has further improved. The decline in house prices and multi-decade low home loan interest rates have helped improve housing affordability in 2020. While Mumbai is the most expensive market, with an affordability ratio of (61%), other cities like Ahmedabad, Chennai and Pune are relatively more affordable. Even for Mumbai, the affordability ratio has improved from a high of 93% in 2010 to 61% in 2020. The Knight Frank Affordability index captures movement in key constituents like property prices, home loan interest rate and household income that determine the buyer’s ability to purchase a house. City-wide average affordability statistics cannot highlight disparities in housing costs within sub-markets or across the income spectrum. A ratio of over 50% makes it difficult to secure home loans from banks and housing finance companies making it unaffordable to purchase a house.

The affordability ratio across top eight cities has improved tremendously over this decade due to an increase in income level, lower interest rate and subsequently lower property prices. Government interventions around improved credit flow, lower interest rate, and cut in stamp duty rate in some markets have brought confidence among homebuyers in 2020. We believe a combination of best in decade affordability level and pick-up in the economy will serve as key catalysts for the country’s housing market next year.

 

 

ITC Hotels launches Welcomhotel in Shimla

Welcomhotel has launched its first property in Himachal Pradesh, Welcomhotel Shimla, parent hotel chain ITC Hotels said on Monday. Welcomhotel Shimla has 47 rooms and suites overlooking the Mashobra valley.

ITC Hotels said aligning with its ‘Responsible Luxury’ philosophy of conservation of resources, all the grey water at the property will be treated in-house and used for horticulture. Non-carcinogenic wooden materials have been used around the property and ‘intelligent controls’ have been built in the elevators to maximize movement efficiency. With domestic travel and wellness experiences regaining popularity, we believe it is the perfect time to launch our latest Welcomhotel outpost in “Devbhoomi” Himachal Pradesh. With stunning 360° mountain views and striking architectural & interior design, we aim to attract discerning leisure and business travellers with our heightened safety measures in place and the quintessential Welcomhotel hospitality at the forefront. The Welcomhotel brand will soon comprise a portfolio of 26 hotels with nine new properties getting added in the next 12 months. The new hotel in Shimla will have WelcomCafe Cedar, the all-day dining restaurant, 3186 sq.ft of indoor banquet spaces and a 3477 sq. ft outdoor venue called the “Sunset Garden”, surrounded by the Himalayan range. It will also house the ‘K by Kaya Kalp’ spa which will offer signature therapies, and rituals and personalized wellness experiences like Yoga and Zumba.

ITC Hotels currently owns and manages 18 hotels under the hotels in New Delhi, Mussoorie, Jodhpur, Khimsar, Chandigarh, and Aurangabad.

 

 

Shashijit Infraprojects Limited Awarded Contract for Construction of Industrial Building at Ankleshwar, Gujarat

Shashijit Infraprojects Limited has been awarded contract for construction of Industrial Building from Shree Sulphurics Private Limited, a well reputed company from Ahmedabad, Gujarat at their Ankleshwar unit, Gujarat. Tne approx. value of the project is 700-1000 lakhs. The project is likely to start by the first week of January, 2021. Mobilization of Machinery and man power is already in process.

 

 

DCCDL enters into an agreement to acquire Hines stake in One Horizon Centre for Rs.780 cr.

DLF Cyber City Developers Limited (“DCCDL”), the rental arm of DLF Group, has entered into a Securities Purchase Agreement with funds managed by Hines (“Hines”) for acquisition of their stake in Fairleaf Real Estate Private Limited “Fairleaf”, which owns and operates One Horizon Center.

One Horizon Centre is an iconic asset forming part of a larger mixed-use development located in one of the most sought-after location - DLF 5, Gurugram. The leasable area of the property is approximately 8,13,000 square feet offering high end Grade A office spaces along with complementary retail space.

The purchase consideration for this acquisition is approximately Rs.780 crore, subject to customary closing adjustments. The acquisition is subject to customary conditions to closure and is expected to be consummated in the next quarter. Sriram Khattar, MD-Rental Business, DLF commented, “We are delighted to acquire complete ownership of this marquee asset. This acquisition adds another trophy asset to our strong rental platform. We believe that this acquisition will be a highly value accretive for us and will add approximately Rs.150-160 crore of rental revenues annually. Post completion of this acquisition, the DCCDL platform will have approximately 34 msf of operational rental portfolio.” He added, “We are pleased to conclude this successful partnership with Hines and hope that our continued relationship will lead to development of more projects in the future by leveraging on our respective strengths.”

 

 

Dalmia embarks on Rs.360-cr expansion plan

Dalmia Cement (Bharat), a subsidiary of Dalmia Bharat, has announced a capacity addition of 2.3 million tonne at its Bengal Cement Works (BCW) unit in West Bengal at an investment of Rs 360 crore. This addition will increase BCW unit’s overall capacity to 4 million tonne per annum, making it the largest cement plant in West Bengal.

The company expects a 4-6% growth for the full year despite a negative first quarter. Lifting has started improving from Q2, with October witnessing a formidable growth. Though November was impacted due to the festive months, lifting has once again picked up in December. For the fiscal 2021, forecast is a demand growth between 7-9% and this is likely to happen due to the demand improving in both the trade and institutional channels. The cement sector divides its business into trade and institutional segments. With the state and Union government giving fresh impetus to infrastructure building and low-cost housing, the cement sector has been witnessing a demand growth from the institutional segment. The industry is not expecting significant price movement immediately. At present, cement price in the eastern market is at an average Rs.300 a bag, but it could vary from state to state and district to district depending on the logistics cost. Cement price in the northern markets is at an average Rs.340 a bag.

Recently, Credai had complained to the Competition Commission of India (CCI) about an abnormal increase of 40-50% in cement prices. The CCI had raided cement factories of ACC, UltraTech, Dalmia, Birla Cements and others. Dalmia Cement has deployed latest machinery and technology to produce 100% blended cement to reduce carbon footprint as part of its commitment to become carbon negative by 2040. Dalmia Bharat produces 26.5 MT from 13 units across nine states. It markets cement in the brand names of Dalmia Cement, Konark Cement and Dalmia DSP Cement.

 

 

Organo looks to invest Rs.900 crore in acquiring 1,800 acres of land across Hyderabad and Bengaluru

Eco-habitat developer Organo is looking to invest Rs.900 crore in acquiring 1,800 acres of land across Hyderabad and Bengaluru to develop townships. The Hyderabad-based company is betting on demand growth in self sustainable cities and people wanting to live away from cities after the Covid-19 pandemic.

The company is currently looking at projects across product types with an order book of Rs.3,000 crore and turnover of Rs.900 crore, targeting 3% of the total TAM for alternate real estate in India.

In Rurban (a mix of rural and urban) communities, there is very little speculation on land price and the majority of the cost goes into constructing building infrastructure and installing technologies for sustaining the community. The land price amounts to only 11% of the overall cost. Building Rurban communities is unlike typical real estate investments where the project value is majorly derived from the speculative nature of land price and developments that take place around the project. A Meraqui report ‘Emerging Residential Niche Products’ says that the target addressable market (TAM) for alternate real estate is expected to reach $4.3 billion by 2022.




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