Delhi HC Takes Up Real Estate Dispute Case

NCR

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September 25, 2024

Delhi HC Takes Up Real Estate Dispute Case

The Delhi High Court has officially notified real estate firm Brilliant Etoile Private Limited regarding two petitions filed by former Indian cricketer Yuvraj Singh. Singh is seeking the appointment of an arbitrator to address grievances concerning alleged violations of his privacy rights related to the promotion of construction projects, as well as issues surrounding the delayed delivery of a residential unit in New Delhi. Justice C Hari Shankar has requested a response from the firm, with further hearings scheduled for August 5.

Represented by advocate Rizwan, Singh has articulated two primary grievances against Brilliant Etoile. The first pertains to a sale agreement executed between Singh, his mother, and the firm for an apartment in the upscale ‘Sky Mansion’ project, which was valued at over ₹14 crore. The second grievance involves a Memorandum of Understanding (MoU) that Singh entered into with the builder for the promotion and marketing of the real estate project. Singh contends that Brilliant Etoile breached the terms outlined in both the MoU and the sale agreement. Upon inspecting the apartment after receiving the possession letter, Singh expressed disappointment at finding that the unit failed to meet the promised standards of quality, specifications, and finishing. Allegations have surfaced that the builder compromised on material quality and downgraded essential fittings, furnishings, and lighting, leading to further dissatisfaction.

In light of these issues, Singh has sought the court’s intervention to facilitate arbitration, aiming for a fair resolution to what he deems significant contractual violations. The court’s notification to Brilliant Etoile marks a critical step in the legal process, as both parties will be expected to present their positions during the upcoming hearings. This case underscores the challenges faced by high-profile individuals in real estate transactions, particularly concerning the expectations of quality and service. As the legal proceedings unfold, the implications of the court’s decision could set a precedent for similar disputes in the real estate sector.

The ongoing situation highlights the importance of transparency and accountability in real estate transactions, especially for luxury properties. It also raises pertinent questions regarding consumer rights and the recourse available to individuals facing dissatisfaction with builders. As public interest in this case grows, it will be interesting to observe how the legal landscape responds to such grievances, particularly in terms of arbitration as a means to resolve disputes.

Sanofi India to Offload Powai HQ for ₹250 Crore

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September 25, 2024

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Sanofi India to Offload Powai HQ for ₹250 Crore

Sanofi India, the local subsidiary of the French pharmaceutical giant, has announced its decision to sell its 150,000 sq ft headquarters located in Powai, Mumbai. The property, which serves as the company’s country headquarters, is anticipated to fetch around ₹250 crore based on current market valuations, according to sources familiar with the transaction.

This move comes as Sanofi India has already secured a new office space in the Vikhroli suburb through a long-term lease. The new office will house the Sanofi Consumer Healthcare division and will provide additional space to accommodate the company’s growth and the relocation of other operations. A source close to the matter indicated that the decision to monetise the Powai asset has been under contemplation for nearly a year, and the Vikhroli lease aligns with this overarching strategy. Sanofi India acquired the custom-built office building in Powai from L&T Realty in 2013, subsequently shifting its headquarters there in 2015 from a smaller office in Aventis House, Andheri. The Powai office is situated within the L&T Business Park, which also hosts major companies such as JP Morgan and L&T Infotech.

In May 2023, Sanofi’s board approved the demerger of its consumer health business into a distinct legal entity. This strategic decision aims to provide the new entity with greater autonomy to pursue growth strategies independently. Shareholders endorsed the demerger in December, and it received clearance from the National Company Law Tribunal, Mumbai, in May 2024, paving the way for the establishment of Sanofi Consumer Healthcare Ltd, which will operate from the newly leased Vikhroli office, currently undergoing fit-out. The Indian office sector remains resilient, demonstrating strong demand despite global economic challenges. Recent reports indicate that the office market achieved record performance in the first half of the year, with gross leasing reaching 33.5 million sq ft—a remarkable 29% increase from the previous year and surpassing the prior first-half record of 30.71 million sq ft set in 2019.

Sanofi India’s strategic realignment and asset monetisation are part of its broader efforts to optimise operations and capitalise on emerging opportunities within a dynamic market landscape. By relocating to a more strategically positioned office in Vikhroli, Sanofi demonstrates its commitment to remaining agile and responsive, ensuring sustainable growth and operational efficiency.

Aadhar Housing Finance to Raise ₹6,000 Crore

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September 25, 2024

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Aadhar Housing Finance to Raise ₹6,000 Crore

Aadhar Housing Finance, a prominent player in India’s housing finance sector and backed by Blackstone, has announced its intent to raise up to ₹6,000 crore in fresh borrowings during the financial year 2025. This initiative aims to support the company’s strategic growth and enhance its market presence.

The funds will be sourced from various channels, including banks, non-convertible debentures (NCDs), and refinancing institutions. An official from the housing finance company indicated that last fiscal year, Aadhar secured ₹5,500 crore in borrowings, and for FY25, it aims to increase this to ₹6,000 crore, with approximately 20% of the new funds expected to come from NCDs. The cost of funds has shown stability, rising from 7.1% in FY23 to 8% in FY24. Recently, Aadhar Housing Finance raised ₹3,000 crore through an initial public offering (IPO), which included an offer for sale of ₹2,000 crore by the promoter, BCP Topco VII Pte Ltd, a subsidiary of Blackstone Group, alongside a fresh equity issuance valued at ₹1,000 crore. Of the ₹1,000 crore allocated for the primary issue, ₹750 crore is earmarked for business expansion and operational needs, while ₹250 crore will be directed towards corporate purposes.

The company plans to broaden its footprint across four to five additional states, focusing on smaller talukas and districts. Proceeds from the IPO will also be invested in enhancing technology and data science capabilities, a move aimed at improving operational efficiency and customer service. While Aadhar Housing Finance is not actively seeking new acquisitions at this moment, it remains open to acquiring high-quality portfolios. The Blackstone fund, which holds a significant stake in Aadhar, is not expected to divest any further in the near future; as of May 14, Blackstone owned a 76.48% stake in the company.

In the current fiscal year, Aadhar Housing Finance plans to open 75 new branches and hire 500 new employees. The company’s assets under management (AUM) are projected to grow by 20%-23% in FY25, building on an AUM of ₹21,100 crore at the end of FY24. Aadhar anticipates maintaining a gross non-performing asset (GNPA) ratio between 1.1% and 1.2% for FY25, bolstered by a portfolio largely comprising secured assets. This strategic borrowing initiative and expansion plan highlight Aadhar Housing Finance’s commitment to strengthening its market position while enhancing service delivery, ultimately contributing to a more robust financial ecosystem in the country.

ICRA Forecasts Bright Future for Warehousing Stock

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September 25, 2024

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ICRA Forecasts Bright Future for Warehousing Stock

ICRA, a prominent credit rating agency, has released a forecast predicting a substantial rise in industrial and warehouse logistics park (IWLP) supply in India, with an anticipated growth rate of 13-14% year-on-year (YoY) for FY2025. This growth is expected to elevate the total warehousing space to approximately 424 million square feet. The agency also expects absorption rates to increase significantly, projecting a rise to 47 million square feet in FY2025, up from 37 million square feet in FY2024, fuelled by strong consumption-driven demand.

Despite this optimistic outlook, vacancy rates across these key markets are expected to stabilise at around 10%, maintaining the same levels as FY2024. A key catalyst for this robust demand is the granting of ‘infrastructure’ status to the logistics and warehousing sector, combined with the rapid expansion of e-commerce, rising consumer demand, and governmental initiatives aimed at transforming India into a manufacturing powerhouse. An ICRA spokesperson stated, “In the last five years, Grade A warehouse stock in primary markets has exhibited a healthy compound annual growth rate (CAGR) of 21%, reaching 183 million square feet in FY2024. This figure is projected to grow by 19-20% YoY in FY2025, with an expected addition of 35 million square feet of Grade A warehousing.” Consequently, the proportion of Grade A stock within the overall warehousing supply is anticipated to increase to 51% by March 2025, compared to 49% at the end of the previous fiscal year.

The backing of global operators and investors such as CPPIB, GLP, Blackstone, and others is pivotal, as they currently support over 50-55% of India’s Grade A warehousing stock. The long-term growth outlook for these high-grade facilities is further bolstered by tenants’ growing preference for modern, efficient, and environmentally sustainable (ESG-compliant) logistics spaces. Demand for warehousing remains strong, particularly from third-party logistics (3PL) providers and manufacturing sectors, which collectively accounted for approximately 65% of the total leased area as of March 2024. E-commerce continues to be a significant player, contributing about 15% of the leased area. Among the eight primary markets, Mumbai and Delhi-NCR account for approximately 42% of the total warehousing stock as of March 2024, with healthy occupancy rates hovering around 90%. However, challenges persist, notably the steep rise in land prices. Competitive rental rates, influenced by both domestic and international players, alongside the emergence of new micro-markets, make land cost a critical factor in determining the profitability of warehousing projects.

Consequently, Tier-II and Tier-III cities are becoming increasingly attractive for new Grade A developments. Looking ahead to FY2025, ICRA anticipates that operators’ credit profiles will remain stable, bolstered by high occupancy levels and expected rental escalations that will enhance rental income. For ICRA’s sample set, occupancy rates are projected to remain robust at 93-95% in FY2024, with rental income and net operating income (NOI) expected to grow by 30-32% YoY each in FY2025. The agency also forecasts that gross debt will increase by 11-13% in FY2025 due to financing for under-construction capacities. However, leverage ratios are expected to improve, with the Debt/NOI ratio likely to drop to a comfortable range of 5.3-5.5x by March 2025, compared to 6.3x in March 2024. Coverage indicators, as measured by the debt service coverage ratio (DSCR), are anticipated to hold steady at 1.5-1.6 times in FY2025, up from 1.4 times in FY2024. This optimistic trajectory underscores the sector’s resilience and adaptability, positioning it favourably for sustainable growth in the coming years.

Dubai’s Super-Rich Drive Luxury Home Market Surge

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September 25, 2024

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Dubai's Super-Rich Drive Luxury Home Market Surge

Dubai’s prime residential market is witnessing an extraordinary shift as the demand from ultra-wealthy individuals intensifies, resulting in a severe supply shortage. According to recent analysis from Knight Frank, the inventory of luxury homes available in elite locations such as Emirates Hills, Jumeirah Bay Island, Jumeirah Islands, and The Palm Jumeirah has plummeted by an astonishing 47% in the past year, leaving just 2,851 properties on the market.

Experts attribute this phenomenon to the unrelenting allure of Dubai among the global super-rich. “The city’s appeal has overwhelmed the supply of luxury homes,” noted a property analyst. The report also indicated that $4.4 billion of private capital is being funnelled into Dubai’s residential market in 2024, reflecting a staggering 76% increase from the previous year. This influx highlights a robust appetite for ultra-luxury living, with developers struggling to meet the burgeoning demand. The performance of Dubai’s prime residential market has surged significantly. In the first half of 2024, average transacted prices in these affluent areas reached AED 3,706 per square foot, marking a 7% increase compared to the same period in 2023. The Palm Jumeirah has emerged as a leader, accounting for a remarkable 89.3% of the 853 home sales recorded in the first half of the year, showcasing its dominance in the luxury sector.

At the pinnacle of this market, Dubai has cemented its status as the foremost market for homes priced at $10 million and above. In 2023, the emirate recorded 431 sales in this category—an 80% increase over its nearest competitor, London. Notably, there have been an additional 190 sales exceeding $10 million in the first half of 2024. The continued growth of the $10 million-plus market is remarkable given the concurrent decline in luxury listings. The number of available homes in this price range has fallen by 65.5% over the past year, down to just 460 properties. This trend suggests a shift towards a “buy-to-hold” mentality among buyers, indicating that many high-net-worth individuals are purchasing these properties for personal use rather than speculative investment.

In the first half of 2024, the total value of homes sold at $10 million and above reached $3.2 billion, building upon the $7.7 billion recorded in 2023. The Palm Jumeirah led this sector with 21 deals worth $365 million, representing 26% of total sales by value. Emirates Hills and District One followed, contributing 10% and 7.8% of sales, respectively. The increasing sales of luxury homes, particularly in The Palm Jumeirah, emphasise a changing market landscape in Dubai. With sustainability becoming a crucial consideration, developers are expected to focus on eco-friendly building practices and energy-efficient designs to appeal to socially conscious buyers. This shift not only enhances property values but also aligns with global sustainability trends.

India’s Steel Consumption Outpacing China

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September 25, 2024

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India's Steel Consumption Outpacing China

India’s steel industry is poised for substantial growth in the coming 12-18 months, with demand expected to rise between 5-7%. This forecast, detailed in a recent report by Moody’s Ratings, positions India to outstrip China’s demand growth amid the latter’s anticipated economic slowdown, particularly influenced by a struggling property market.

Moody’s analysis indicates that India’s real GDP is projected to expand by 6.6% in the fiscal year ending March 2025, followed by a growth rate of 6.2% in the subsequent fiscal year. In stark contrast, China’s GDP growth is estimated at a mere 4% for both 2024 and 2025. This divergence underscores India’s burgeoning economic momentum, spurred by a combination of increased industrialisation, urbanisation, and government policies that favour infrastructure spending and domestic manufacturing. While India’s steel sector enjoys a robust outlook, challenges remain. China’s ongoing overcapacity and high production levels may lead to increased steel exports to India, which, alongside domestic capacity growth, could suppress regional steel prices. However, India’s concentrated steel industry structure offers a more disciplined pricing environment compared to China’s fragmented sector, allowing for greater stability.

A significant advantage for India is its vast iron ore reserves, which afford the country higher vertical integration and improved profit margins relative to Chinese producers. Yet, China maintains an edge in coking coal import costs due to its geographical proximity to suppliers in Mongolia and Russia. In contrast, India primarily relies on more expensive imports from Australia. Moody’s emphasised that India’s strong domestic demand for steel, combined with higher local selling prices and substantial self-sufficiency in iron ore, will support better steelmaking margins in the near future. Notably, India’s per capita steel consumption, currently standing at just 70-80 kilograms, remains considerably lower than China’s 660-670 kilograms, indicating ample room for growth. Government initiatives, such as the Pradhan Mantri Awas Yojana programme, continue to underpin steel consumption growth through significant infrastructure and housing project allocations. Conversely, China grapples with economic vulnerabilities stemming from a weak property sector, fiscal difficulties at various government levels, and geopolitical tensions.

Overall, Moody’s report highlights that despite challenges posed by Chinese overcapacity and import costs, India’s steel sector is strategically positioned for sustained growth. The emphasis on infrastructure development, urbanisation, and supportive government policies ensures that India’s steel demand will likely exceed that of China, reinforcing the country’s role in the global steel market.

Naredco Launches Uttarakhand Chapter to Boost Real Estate

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September 24, 2024

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Naredco Launches Uttarakhand Chapter to Boost Real Estate

The National Real Estate Development Council (Naredco) has inaugurated its Uttarakhand chapter, marking a significant step towards fostering real estate development in the region. This new chapter aims to promote best practices, foster innovation, and advocate for policy reforms to propel the state’s real estate industry to new heights.

The launch event, “Emergence of Naredco Uttarakhand,” was attended by prominent members of Naredco’s Governing Council from across India. Chief Guest Premchand Aggarwal, Minister of Housing and Urban Development, and Guest of Honour Ganesh Joshi, Minister of Agriculture, emphasized the immense potential for development in Uttarakhand, driven by the state’s rapid population growth and tourism sector. The government’s plans to develop 22 new townships and the focus on constructing environment-friendly townships align with the vision of creating sustainable and vibrant communities.

These initiatives aim to preserve Uttarakhand’s natural beauty while providing healthier living conditions and curbing youth migration. Dinesh Kapila, economic advisor to the Ministry of Housing and Urban Affairs, highlighted the unique geography of Uttarakhand, which offers diverse opportunities for real estate growth. He noted increasing demand across various segments, from serene mountain retreats to bustling urban centres. Improved infrastructure and connectivity are attracting both domestic and international investors.

Manoj Joshi, president of Naredco Uttarakhand Chapter, spoke about the organization’s commitment to engaging with government authorities and policymakers. The chapter will focus on research and analysis to provide valuable insights into the market, identify trends, and inform industry stakeholders. By facilitating networking opportunities and fostering partnerships, the chapter aims to drive collective growth and development. The launch of Naredco’s Uttarakhand chapter signifies a positive step towards unlocking the region’s real estate potential. With its focus on sustainable development, collaboration, and advocacy, the chapter is poised to play a crucial role in shaping the future of the real estate industry in Uttarakhand.

UltraTech Cement’s Expansion in India’s Development

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September 24, 2024

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UltraTech Cement’s Expansion in India's Development

UltraTech Cement is making waves in the Indian market through its strategic expansions and acquisitions, reaffirming its essential role in the country’s infrastructure narrative. While often overshadowed by larger headlines, the impact of UltraTech is profoundly felt in projects that build communities and stimulate economic growth.

Every bag of UltraTech cement represents more than just a product; it signifies a commitment to quality that underpins the foundations of critical infrastructure, from hospitals and educational institutions to residential complexes. These structures serve as the backbone of India’s socio-economic progress, creating environments where future generations can thrive. Educational facilities built with UltraTech cement cultivate the next wave of engineers, doctors, and entrepreneurs, highlighting the company’s vital contribution to shaping India’s future. The Indian cement sector is on the brink of significant growth, driven by supportive government initiatives and promising economic forecasts. Despite global economic headwinds, India is projected to be the fastest-growing major economy, with the International Monetary Fund estimating GDP growth of 5.9% in 2023 and 6.3% in 2024. This optimistic outlook is likely to fuel cement demand, which is expected to increase by 10% in FY 2023, particularly due to a surge in housing sector activities.

Government investments play a crucial role in stimulating cement demand. The Union Budget 2023-24 has earmarked substantial funds for infrastructure and housing projects, including $9.6 billion to tackle housing shortages and $1.8 billion for sanitation and clean drinking water initiatives. Moreover, the budget outlays for the National Highway Authority of India (NHAI) and the Ministry of Road Transport and Highways have seen increases of 25% and 14% respectively, compared to the previous year. With the cement industry poised for a third consecutive year of growth, projections indicate a rise of 7-9%, potentially reaching around 425 million tonnes. This growth trajectory is largely supported by demand in the affordable housing sector and significant infrastructure developments. Additional government measures, such as the Production-Linked Incentive schemes and the National Logistics Policy, are expected to bolster manufacturing output, enhancing the industry’s positive outlook.

UltraTech Cement’s journey began in 1983 as a division of Larsen & Toubro, initially known as L&T Cement. The company rebranded as UltraTech after L&T divested its cement business in 2000. Today, it stands as India’s largest producer of white and grey cement, as well as ready-mix concrete (RMC). Through various mergers and acquisitions, UltraTech has emerged as one of the world’s leading cement manufacturers, excluding China, with operations spanning India, Sri Lanka, Bahrain, and the UAE. Notably, it was the first Indian company and the second in Asia to issue dollar-denominated sustainability-linked bonds, reflecting its commitment to sustainable development.

India’s Home Automation Market Set to Boom

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September 24, 2024

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India's Home Automation Market Set to Boom

India’s home automation market is on the brink of an impressive transformation, as detailed in a recent report by Prudent Markets. The market, which was valued at approximately $1.79 billion in 2018, is projected to soar to an astonishing $13.57 billion by 2026. This remarkable leap corresponds to an extraordinary Compound Annual Growth Rate (CAGR) of 29.8% for the period spanning from 2019 to 2026. This growth reflects a broader shift towards modern living, where technology plays a crucial role in everyday life.

Central to this growth narrative are advancements in cutting-edge technologies, particularly the Internet of Things (IoT) and artificial intelligence (AI). These innovations have catalysed the rise of smart homes, allowing homeowners to remotely control appliances and devices through intuitive smartphone applications. The burgeoning emphasis on home security and safety has also propelled the market forward, with systems featuring smart locks, surveillance cameras, and smoke detectors becoming increasingly popular among consumers. As urban populations grow and lifestyles evolve, the demand for integrated, user-friendly home automation solutions is set to increase dramatically.

The robust expansion of the home automation market is further fuelled by a heightened focus on energy efficiency and security. With rising disposable incomes and supportive government initiatives promoting smart city development, consumers are increasingly looking for ways to enhance their living environments. However, challenges remain, including high installation costs and wireless connectivity issues, which can deter potential users. Despite these obstacles, leading market players are innovating and introducing new automation solutions to meet consumer demands, thus driving the sector towards a more sustainable future.

Residential Sales Surge in Bengaluru

Bangalore

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September 24, 2024

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Bengaluru has cemented its position as India’s leading residential real estate market, recording the highest sales in the last financial quarter. Driven by a thriving IT industry, ongoing infrastructure developments, and a favorable business environment, the city has witnessed a remarkable surge in demand for residential properties.

A report by JLL Research’s Real Estate Intelligence Service (REIS) highlighted a 45% increase in new launches in Bengaluru, totaling 16,537 units. This growth is attributed to sustained demand supported by the robust IT sector and infrastructure upgrades. National and regional developers are increasingly attracted to Bengaluru, ensuring a steady flow of new projects. Whitefield, a key area in Bengaluru, accounted for 47% of these new launches. The area’s dominance is fueled by its expanding office sector and the recent extension of the Namma Metro.

The corridor connecting Whitefield to Kempegowda International Airport through Budigere Cross has drawn several reputed developers, with many projects priced between Rs 1 crore and Rs 3 crore. Hosur Road and Bellary Road also saw substantial activity. Upper-mid segment apartments, priced between Rs 1 crore and Rs 3 crore, dominated the market, comprising 62% of the total sales. The first half of the year alone saw about 25% of sales from newly launched projects, indicating strong buyer confidence.

The report also noted a noticeable decline in unsold inventory, further emphasizing the market’s healthy absorption rates. This trend suggests a robust demand and positive sentiment among buyers. Additionally, Anarock data from April 2024 revealed a steep rise in rental housing demand across major cities, with Bengaluru leading in rental yields at 4.45% in Q1 2024. This significant increase from the pre-COVID-19 yield of 3.6% reflects a 24% growth. The return-to-office trend among IT companies has driven rental values upwards in key areas, solidifying Bengaluru’s position as a top investment destination.

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