2024 Sees Record Surge in Luxury Real Estate Prices

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December 20, 2024

2024 Sees Record Surge in Luxury Real Estate Prices

In 2024, India’s luxury real estate market is witnessing an unprecedented surge in prices, with demand for high-end properties hitting new peaks. The trend reflects the growing affluence of India’s elite, with significant shifts in purchasing behaviour and investment patterns. A recent report has highlighted the sharp rise in luxury property prices in major cities such as Mumbai, Delhi, Bengaluru, and Gurgaon, suggesting that India’s wealthier population is increasingly focused on high-end living spaces. The high demand for luxurious residential units, including penthouses, branded residences, and spacious villas, has led to a steady increase in property prices, with some locations seeing hikes of up to 15-20% annually.

This surge can be attributed to several key factors. First, India’s growing urbanisation and economic prosperity have contributed to a larger, more affluent class, with a higher disposable income. Wealthy individuals are now focusing on premium real estate as both a lifestyle choice and an investment opportunity. Additionally, the pandemic-induced shift towards larger, more spacious homes has prompted many to opt for high-end properties offering top-tier amenities, greater privacy, and enhanced security. As a result, developers have begun to target the luxury segment more aggressively, providing bespoke services, green spaces, and state-of-the-art facilities, further driving up demand.

From a sustainability perspective, developers are increasingly incorporating eco-friendly designs and green certifications into luxury projects. With rising awareness about environmental impact, there is a shift towards more energy-efficient homes and sustainable building materials. Luxury real estate developers are now focusing on LEED-certified buildings and integrating renewable energy solutions such as solar panels, rainwater harvesting systems, and energy-efficient HVAC systems. This trend aligns with global efforts to combat climate change and is a selling point for buyers keen on sustainability.

However, while the surge in luxury property prices is a sign of prosperity for many, it also raises concerns about affordability for the average Indian homebuyer. The disparity between the luxury segment and mid-tier housing markets has widened, posing a challenge for urban planners aiming to create inclusive cities. With the economy recovering and India’s wealthy population increasing, it is expected that the luxury market will continue to flourish. Still, it is essential that policy-makers ensure the growth of affordable housing alongside these premium developments to cater to the needs of the broader population.

Gurugram to Clear 10,000 Tonnes of C&D Waste Daily to Tackle Pollution

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December 20, 2024

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Gurugram to Clear 10,000 Tonnes of C&D Waste Daily to Tackle Pollution

Gurugram Municipal Corporation (MCG) has set an ambitious target to clear 10,000 tonnes of construction and demolition (C&D) waste daily. This initiative is part of the Solid Waste Environment Exigency Programme (SWEEP), which was discussed in a recent review meeting led by divisional commissioner RC Bidhan.

The focus of the meeting was to accelerate the collection of C&D waste from various locations across Gurugram. RC Bidhan emphasized the importance of organizing the process, ensuring that vehicles collecting the waste are properly registered and that their service rates are fixed. “The process of collecting C&D waste from different areas should be accelerated to ensure a cleaner city,” Bidhan remarked during the session. Gurugram, like many urban centers, has faced challenges with illegal dumping of construction debris and garbage, leading to unclean and unsightly public spaces. In response to this, MCG officials have stressed that dumping waste in public areas is a punishable offence. Authorities are actively taking measures to deter violators, which include seizing vehicles, filing FIRs against offenders, and imposing hefty fines.

On Thursday, Balpreet Singh, the additional commissioner of MCG, led an inspection in areas prone to illegal dumping. During his visit, Singh identified and caught five vehicles in the act of dumping waste or debris. Two rickshaws and a tractor-trolley were found near Sikanderpur metro pillar number 48. Immediate action was taken, and FIRs were filed against the responsible drivers and owners. The vehicles involved were also marked for seizure. This proactive approach by the MCG is aimed at not only cleaning up the city but also creating awareness among residents and workers involved in construction projects. By enforcing strict penalties and improving waste management systems, Gurugram hopes to become a cleaner, greener city for its residents. As the MCG continues to ramp up its efforts, residents are encouraged to report illegal dumping activities and cooperate with waste management initiatives. The city’s focus on handling C&D waste efficiently will play a crucial role in improving the overall environment and quality of life for its citizens.

Noida’s Real Estate Boom Creates Culinary Opportunities

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December 20, 2024

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Noida’s Real Estate Boom Creates Culinary Opportunities

Noida and Greater Noida are emerging as the new hotspots for the food and beverage (F&B) industry, driven by booming real estate developments and increasing corporate activity. With the Noida International Airport set to open in April 2025, alongside a spurt in residential and office space developments, these twin cities are attracting a new wave of restaurateurs. From local favourites to high-profile brands, the gastronomical scene in the region has seen a dramatic upturn, reflecting the growing demands of a burgeoning population.

The surge in restaurant openings across Noida is particularly evident in emerging sectors such as Sectors 75, 129, and Greater Noida West. Brands such as Desi Vibes, a homegrown success, have expanded their footprint in Noida, while newer entrants like Chica Loca by Bollywood actress Sunny Leone and Virat Kohli’s One8 Commune in Sector 94 are adding glamour to the scene. Industry experts cite the influx of homebuyers in newly constructed housing hubs and several corporates setting up offices along the Noida-Greater Noida Expressway as the key drivers of this growth.

Developers are also capitalising on this demand by offering attractive incentives to restaurant brands. As rental prices remain lower than Delhi and Gurugram, restaurateurs are seizing the opportunity to establish multiple outlets in prime locations, particularly in newly built commercial spaces. Additionally, developers are increasingly offering capital expenditure (capex) deals or ‘bouquet’ agreements, where restaurant brands can set up in several properties within a developer’s portfolio. These incentives make Noida an increasingly appealing prospect for restaurateurs looking to diversify and reach new customers.

While Noida’s restaurant scene thrives, sustainability is becoming an essential aspect of urban development. As the city grows, the importance of eco-friendly, sustainable infrastructure has come into sharper focus. New malls, office buildings, and residential complexes are incorporating green building practices, and restaurateurs are following suit by integrating sustainable practices in their operations. From energy-efficient kitchens to zero-waste policies, many of the new dining establishments in Noida are becoming part of the city’s broader environmental goals.

Sustainable development has also become a key consideration for developers when selecting commercial tenants. As Noida evolves into a dynamic business and residential hub, restaurant brands are not only seen as a reflection of the city’s lifestyle but also as catalysts for furthering the sustainability agenda. Through collaborations with developers offering eco-friendly spaces and incentives for green designs, the restaurant sector in Noida is contributing positively to the city’s urban planning and environmental footprint.

As Noida continues to expand, the combination of robust real estate growth, a diverse food culture, and sustainable urban planning positions the city as a prime destination for dining, leisure, and sustainable living. This culinary boom is not just a sign of economic growth but a reflection of how urban and social transformation is reshaping Noida’s identity, making it a thriving metropolitan hotspot in the heart of NCR.

Residential Real Estate Sector Witnesses 104% Surge in Private Equity Investments

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December 20, 2024

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Residential Real Estate Sector Witnesses 104% Surge in Private Equity Investments

In a remarkable demonstration of investor confidence, private equity (PE) investments in India’s residential real estate sector have surged by an astounding 104% in 2024. According to a recent report by KnightFrank India, total PE investments in the sector reached a robust $1.2 billion, contributing to a broader $4.2 billion inflow into Indian real estate. This impressive growth represents a 32% year-on-year (YoY) increase in overall PE investment, with the residential sector emerging as a key driver in this momentum.

The rise in PE investments in residential real estate is a direct response to the increasing demand from end-users, indicating a shift towards more stable, long-term investments in India’s housing market. The pandemic-induced disruption in the housing market appears to have been largely overcome, with investors now recognising the value and demand for residential properties in key urban centres. Mumbai, as India’s financial capital, continues to be the most favoured destination for these investments, underscoring the city’s role as a hub for both national and international investors.

Beyond residential, the report also highlights a significant shift in investor preferences towards the warehousing sector. This sector has seen a surge in private equity inflows, overtaking the office space sector, which had historically commanded the highest share of investments. The increasing reliance on e-commerce and the subsequent growth in logistics and warehousing facilities have made this sector an increasingly attractive investment proposition.

Sustainability Angle: Green Developments in Focus

The surge in PE investments not only highlights the resilience of the real estate market but also reflects the increasing importance of sustainability in urban development. As demand for residential properties rises, so does the call for eco-friendly construction, energy-efficient buildings, and smart urban planning. Developers and investors are now more than ever prioritising sustainable projects that address environmental concerns and enhance the quality of life for residents. Green buildings, renewable energy usage, and efficient waste management systems are becoming crucial components of new developments, particularly in metro cities like Mumbai, where urban sprawl continues to grow.

For investors, the long-term value proposition of sustainable, green buildings is becoming increasingly apparent. Properties that integrate sustainable practices are seen not only as more cost-effective in the long run due to energy savings but also as more desirable to environmentally-conscious consumers. As such, residential real estate’s growth is aligned with global sustainability trends, positioning it as a future-proof sector in India’s evolving economy.

This shift towards more responsible investing aligns with broader efforts by Indian cities to embrace sustainable urban growth, ensuring that the country’s real estate market can thrive in harmony with environmental preservation.

Noida Authority Seals 27 Flats of Skytech Matrott Over Unpaid Dues

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December 20, 2024

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Noida Authority Seals 27 Flats of Skytech Matrott Over Unpaid Dues

Noida Authority has taken decisive action against Skytech Construction Pvt Ltd for failing to clear outstanding dues of over ₹30 crore related to its group housing project, Skytech Matrott, located in Sector 76. Despite multiple notices and warnings, the developer failed to comply with payment obligations, prompting the Authority to seal 27 unsold flats in the project. This latest action follows an earlier move in September, when five flats were sealed for similar reasons.

The builder’s failure to pay the dues, which included payments for the plot and penalties, led to the sealing of the flats under the direction of the Authority’s CEO, Lokesh M. The developer had the option to resolve the issue through the state government’s rehabilitation policy, which allowed for settlement of dues with a 25% payment after deductions for the Covid-19 relief period from April 2020 to March 2022. However, Skytech failed to avail of this opportunity. Skytech was allotted a 20,900-square-metre plot in 2010 to develop the Skytech Matrott project, which includes over 700 apartments. However, the developer faced financial challenges and has been unable to clear the dues despite initial payments and multiple notices. The Authority had issued notices in May, July, and August of this year but saw no significant action from the builder.

The rehabilitation policy, introduced in December 2023, offered developers a chance to pay a reduced amount to settle their dues. Skytech paid only ₹1 crore but failed to follow through with the remaining payments. Consequently, Noida Authority had no choice but to seal the flats, which are currently unsold. This action highlights the increasing scrutiny of developers in Noida, where several projects are facing financial difficulties. Earlier in the year, the Authority also cancelled the allotment of a plot to Docile Buildtech Pvt Ltd in Sector 143 for non-payment of ₹130 crore in dues. Additionally, similar actions were taken against other builders such as Antriksh Golf View and Omaxe Buildhome Pvt Ltd, reinforcing the Authority’s commitment to ensuring compliance and accountability in the real estate sector. With the Authority continuing to crack down on non-compliant developers, the real estate landscape in Noida is under closer inspection, as both developers and buyers remain affected by delays and financial uncertainties in the market.

GST Notices Over Rs 3,500 Crore Tax Credit Claims Spark Confusion Among Developers

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December 20, 2024

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GST Notices Over Rs 3,500 Crore Tax Credit Claims Spark Confusion Among Developers

Several property developers have received show-cause notices from the Goods and Services Tax (GST) authorities, challenging their claims for input tax credit (ITC) worth approximately ₹3,500 crore. These notices are a direct result of a Supreme Court ruling in October 2024 regarding Safari Retreats, which granted commercial realty companies the right to claim ITC on construction costs for rental properties.

The GST authorities have raised concerns that the ITC claims made by real estate developers may not have been valid, leading to demands for refunds of the claimed credits. In some cases, authorities have blocked these claims altogether, citing discrepancies in the eligibility criteria. The situation has created confusion among industry players, with some developers asserting that tax officials are misinterpreting the ruling and using it to unjustly deny ITC. The Supreme Court’s ruling in the Safari Retreats case was pivotal, as it upheld the constitutionality of the provisions allowing ITC claims but emphasized that eligibility must be assessed on a case-by-case basis. The ruling introduced two key tests for determining eligibility: the property must be leased or sold before construction is complete, and it must qualify as “plant or machinery.”

GST authorities, however, have stated that these claims will be deemed eligible only when it is conclusively proven that the developers meet the essentiality and functionality tests laid out by the court. As a result, developers are facing a complex process to prove their entitlement to these credits. Many developers have already challenged the notices in court, arguing that tax officials are incorrectly interpreting the Supreme Court’s ruling and applying it only to the petitioners involved in the Safari Retreats case. Abhishek A Rastogi, a tax expert, emphasized that judicial precedents must be applied uniformly, and the interpretation of the ruling should not be restricted to a single case. The growing uncertainty surrounding ITC claims is putting developers in a difficult position, forcing them to navigate through complex legal and procedural challenges. With the real estate sector already facing numerous hurdles, this issue adds to the mounting concerns over compliance and tax liabilities.

As the legal battles continue, the broader industry is keenly watching how the GST authorities handle these claims and whether a clear, consistent approach will be established to resolve the confusion and ensure fair treatment for all developers.

Private Equity Investments in Indian Real Estate Rise 32% in 2024; Residential Sector Shines

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December 20, 2024

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Private Equity Investments in Indian Real Estate Rise 32% in 2024; Residential Sector Shines

Private equity (PE) investments in Indian real estate have experienced a remarkable surge in 2024, with total investments reaching $4.2 billion, marking a 32% year-on-year (YoY) growth. According to a recent report by KnightFrank India, the residential real estate sector has emerged as a major driver of this growth, witnessing a stunning 104% increase in PE investments, totaling $1.2 billion. This surge highlights the strong demand from end-users and growing investor confidence in India’s housing market.

Mumbai continues to dominate as the most favoured destination for PE investments, accounting for 50% of the total inflows in 2024. A significant portion of this investment is in the warehousing sector, which has seen a dramatic rise due to the booming e-commerce industry. In Mumbai, warehousing captured 74% of PE investments, amounting to $1.54 billion. The residential sector in Mumbai also witnessed strong investment, receiving $406 million. Other major cities, including Bengaluru and the National Capital Region (NCR), also saw substantial inflows. Bengaluru received $833 million in PE investments, with nearly half directed towards the residential sector. NCR attracted $202 million in residential investments, further showcasing the nationwide appeal of India’s real estate market. Additionally, cities like Pune, Chennai, and Hyderabad contributed to the growth of the residential sector.

Interestingly, 2024 marks a shift in investment trends, with more focus on under-construction projects compared to completed properties in previous years. This shift reflects the growing optimism surrounding India’s expanding middle class, urbanisation, and economic stability. Investors are now more willing to take risks on early-stage developments, anticipating long-term growth. While the residential sector has performed well, the warehousing sector remains the top performer overall. It attracted a remarkable $1.9 billion in PE investments, a 136% YoY increase, driven by the surge in demand for logistics and supply chain solutions. The UAE emerged as the largest investor, contributing 42% of total PE investments, followed by Indian investors at 32% and Singapore-based institutions, which invested around $633.7 million. This substantial growth in PE investments signals a positive outlook for India’s real estate sector, with strong potential for continued growth in both residential and warehousing segments.

AIRE Launches AI-Powered Software to Streamline Real Estate Feasibility Studies

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December 20, 2024

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AIRE Launches AI-Powered Software to Streamline Real Estate Feasibility Studies

AIRE, a leading PropTech innovator in the Middle East and Africa, has introduced an AI-powered software solution that will revolutionize the preparation of feasibility studies for real estate projects. This new technology enables AIRE’s team to deliver high-quality feasibility study reports for residential, hospitality, retail, and office developments in just five business days, a significant reduction from the traditional six-week process.

Feasibility studies are essential for real estate developers, investors, and professionals to assess a project’s viability. Historically, these studies have been time-consuming, delaying decision-making. With the launch of this software, AIRE has cut down the preparation time by nearly 90%, providing clients with a vital competitive advantage in the fast-paced real estate market.

“Our AI-powered solution is designed to help stakeholders make data-driven decisions faster, with higher accuracy, giving them an edge in this competitive industry,” said Simon Ardonceau, Founder and CEO of AIRE. “By merging cutting-edge technology with our industry expertise, we are reshaping how real estate projects are planned and executed.”

AIRE’s software leverages artificial intelligence to process large datasets, analyze market trends, and generate actionable insights specific to each project. Whether it’s for a residential complex, luxury hotel, retail hub, or office space, the platform provides detailed feasibility reports with unmatched speed and accuracy. This initiative showcases PropTech’s transformative potential in the real estate sector, enhancing operational efficiency and reducing project risks. AIRE’s innovation supports the creation of more sustainable, resilient, and innovative urban developments across the region. AIRE invites real estate professionals, developers, and investors to explore this cutting-edge technology, which offers an opportunity to make informed decisions quickly and efficiently.

Government Plans Zero-Collateral Housing Loans for Low and Middle-Income Groups

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December 20, 2024

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Government Plans Zero-Collateral Housing Loans for Low and Middle-Income Groups

The Indian government is set to introduce a zero-collateral housing loan scheme aimed at benefiting low- and middle-income groups. Under this new initiative, individuals can avail of housing loans of up to Rs 20 lakh with minimal documentation and no requirement for third-party guarantees. This initiative is designed to make home ownership more accessible, especially for those who lack sufficient collateral or documented income.

Currently, the Credit Risk Guarantee Fund Scheme for Low-Income Housing (CRGFTLIH) offers loan guarantees for loans up to Rs 8 lakh. However, the new scheme is expected to provide significant benefits by extending guarantees for loans up to Rs 20 lakh. The amendments being made to the scheme are focused on easing credit availability for potential homeowners with minimal supporting documents. The loan tenure is proposed to be as long as 30 years, making it easier for borrowers to manage repayments. This long-term loan plan is expected to help those from economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) who may struggle with shorter-term repayment schedules. The government’s discussions with the ministries of finance and housing & urban affairs, National Housing Bank, and commercial banks are centered on finalizing eligibility criteria, such as income limits, the equated monthly installment (EMI), and the net monthly income ratio. A key feature of this scheme is the guarantee provided for loans in default. Under the CRGFTLIH, up to 70% of the loan amount in default will be covered, minimizing risk for lenders. This initiative also aims to incorporate digital footprints—such as utility bill payments, salary credits, and other digital transactions—into the loan assessment process, enabling a more comprehensive evaluation of the borrower’s financial behavior.

This effort is expected to bring housing loans within reach for those who do not have traditional forms of income documentation, such as tax returns. By using digital financial transactions like electricity bills and municipal taxes, banks are being encouraged to develop new credit models for small and medium enterprises, and for individuals in similar situations. For the new housing loan scheme, EWS households with annual income up to Rs 3 lakh, LIG households earning Rs 3-6 lakh, and MIG households with incomes between Rs 6-9 lakh will be eligible to apply, offering a broader segment of the population the opportunity to own homes. This initiative is a significant step toward making home ownership more attainable for a large section of India’s population, especially in urban areas, where housing remains a major challenge.

Ventive Hospitality Raises Rs 719.55 Crore from Anchor Investors Ahead of IPO

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December 20, 2024

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Ventive Hospitality Raises Rs 719.55 Crore from Anchor Investors Ahead of IPO

Ventive Hospitality, backed by Blackstone, has successfully raised Rs 719.55 crore from 26 anchor investors ahead of its proposed Initial Public Offering (IPO). The company allotted a total of 1,11,90,513 equity shares at the upper end of the price band, which stands at Rs 643 per share, including a premium of Rs 643, with a face value of Re 1 per share. This marks a significant milestone as Ventive Hospitality prepares for its public market debut.

A major portion of the allocation—43.08%, or 48,21,122 equity shares—has been directed towards four domestic mutual funds, distributed across eight schemes. This allocation underlines the crucial role that mutual funds play in the initial investment stage of an IPO. Prominent investors backing the company include Government Pension Global Fund, Allspring Global Investment LLC, Tata Absolute Return Fund, Quant Mutual Fund, Aditya Birla India Fund, SBI General Insurance, SBI Life Insurance, Nuvama, JM Financial Mutual Fund, and 360 One Income Opportunities Fund. These key investors are seen as instrumental in supporting Ventive Hospitality’s growth as it looks to capitalize on public market investment. The total size of Ventive Hospitality’s proposed IPO includes a fresh issue of shares worth Rs 16,000 million. A substantial portion of the funds raised through the IPO will be allocated for the repayment and prepayment of borrowings, including accrued interest. This move is part of the company’s strategy to improve its financial position and to focus on expanding its operations and enhancing its long-term growth prospects.

The book-running process for the IPO is being managed by leading financial institutions, including JM Financial, Axis Capital, HSBC Securities and Capital Markets, ICICI Securities, IIFL Securities, Kotak Mahindra Capital Company, and SBI Capital Markets. These well-established entities are guiding the IPO process, reflecting the strength and credibility of the offering. As Ventive Hospitality moves towards its IPO, this successful raise from anchor investors provides a strong foundation for its public market entry. The backing from notable investors and the participation of major mutual funds highlight the confidence in the company’s potential within the hospitality sector. With the funds secured, Ventive Hospitality is poised to strengthen its financial position, positioning itself for sustained growth as it taps into new opportunities in the rapidly evolving hospitality market.

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