PAG extends $100 million debt to Kalpataru's two realty projects

 18 August 2021

One of these projects is a mixed-use development with residential and commercial components in Thane, while the other project is residential development in Mulund suburb of Mumbai. Both the developments including the first phase of Thane project have a total 1.8 million sq ft saleable area.

Global alternative investment firm PAG has entered into an agreement to extend debt worth $100 million or over Rs 743 crore to two projects of realty developer Kalpataru, said persons with direct knowledge of the development.

One of these projects is a mixed-use development with residential and commercial components in Thane, while the other project is residential development in Mulund suburb of Mumbai. Both the developments including the first phase of Thane project have a total 1.8 million sq ft saleable area.

“Part of the funds to be received from PAG will be used for repayment of an existing loan and the balance amount will be utilised to support completion of both the projects,” said one of the persons mentioned above.

PAG, Kalpataru and transaction advisor Cushman & Wakefield declined to comment for the story.

In May, ASK Property Investment Advisors (ASK PIA), the real estate private equity arm of the ASK Group, invested Rs 200 crore in realty developer Kalpataru’s mid-income housing project in Baner locality of Pune.

PAG is a leading Asia-focused private investment manager, with strategies including private equity, private debt, real estate and hedge funds. In May, the private equity firm invested Rs 175 crore realty developer Century Real Estate’s residential project spread over 7 acres in north Bangalore.

Is Thane a goldmine for real estate investors

 17 August 2021

Ronak Madhavi, assistant VP, 360 Realtors, breaks some myths

Once a prolific suburb in the vicinity of Mumbai Metropolitan Region (MMR), Thane has the potential to become one of the most sought-after real estate markets in western India.

Over the years, Thane has witnessed visible but steady growth in real estate demand. Proximity to Mumbai, plenty of lush greenery & natural endowments, improved infrastructure has enabled Thane to evolve into a self-sustainable urban ecosystem. It has more open spaces compared to Mumbai, which makes it a natural favourite for households looking for a calm & serene lifestyle.

After the rise in Work from Home (WFH) culture, Thane’s real estate demand will be further on an upswing, growing by leaps and bounds. Thane region is dotted with large township projects, offering a host of property options in the affordable range of INR 50 lacs – 1.3 Crores. Most of the major developers in the MMR such as Lodha, Rustomjee, Godrej, and Shapoorji & Pallonji are coming up with mega projects in the region. As WFH is gaining popularity, many first-time homebuyers in Mumbai will now prefer Thane, as it can offer large living spaces at affordable rates.

Improved infrastructure
The Thane Municipal Corporation (TMC) has systematically invested in the city’s infrastructure development. Through the Thane-Panvel line, Central Harbour line, and the central railways, the suburb enjoys seamless connectivity with the Mumbai and Navi Mumbai region. TMC is further making investments to systematically reduce travel time between Thane and other key parts of MMR.

The Katai-Aeiroli freeway is expected to be operational soon, which will cohesively link Thane with the Navi Mumbai region. The metro will soon enter Thane, which will further give a facelift to the mass commute facilities in the region. Line 4 of the Mumbai Metro will link Thane with the Wadala region. Line 5 of the metro will connect Thane-Bhiwandi- Kalyan thereby rendering convenient commute facilities to the residents.Thane is also part of the 500-km-long bullet train corridor, which is expected to be operational by 2027. TMC has recently also announced the Thane-Borivali tunnel, which will reduce travel time between the two nodes in MMR to just ~ 15 minutes.

As work has begun in the Navi Mumbai international airport, Thane is now situated close to the major international airport. It will help the city make a mark on the domestic and international air routes.

A bustling commercial centre
Thane is also a bustling commercial and retail centre, which further consolidates its position as a housing stronghold. When compared to Navi Mumbai, it is a party to better retail facilities and social life. This is one of the reasons which has helped Thane’s property market to stay ahead of Navi Mumbai. Retail facilities, social amenities and commercial real estate is poised to grow further in the Thane region. Recently, Hiranandani group has invested INR 1000 crores to develop 2.6 million sq. ft of commercial space in the Thane region.

Upcycle in real estate demand
While many major markets in India will continue to grapple with dampened demand, upcycle will continue to unfold in the Thane region. The upturn in the market will be rooted in numerous factors including a thrust to infrastructure, availability of plenty of affordable property options, and overall higher standards of living. Besides first-time home buyers, Thane will also be a goldmine for the investor community. As new infrastructure development such as metro networks and roadways are taking shape in full steam, strategic investment in the Thane region can offer an elevated yield to discerning investors. As growth is rooted in fundamental factors rather than cyclic curves, the investment will be mostly risk-averse in the coming times. Given these characteristics, Thane is a property goldmine which one should not miss.

Mumbai: BMC to open on all days to help builders pay slashed premiums

 11 August 2021

Mumbai

The BMC, which is facing a cash crunch, will keep the offices of its Building Proposal (BP) and Development Plan (DP) departments open on all days till August 19 so that builders can pay premiums at discounted rates. The deadline to pay premiums at 50% discount ends on August 19.

BMC officials said that the Maharashtra Chamber of Housing Industry (MCHI) and Confederation of Real Estate Developers’ Associations of India (CREDAI) had put in a request with the BMC to keep its offices open on all days till August 19 so that builders could pay the premiums before the deadline.

“The state government has issued directions for giving relief to the industry, thereby reducing the percentage of premiums and also waived the development cess till 19.08.2021. During the last 16 months, there were crises due to the Covid-19 pandemic. There were restrictions and hence developers could not process the files. Now since the deadline is 19.08.2021, and now relaxation is given by the state government for movement, CREDAI-MCHI has requested to keep BP and DP offices open on all days till August 19,” the BMC’s note read.

The proposal to keep all BP and DP department offices open on all days was approved by Municipal Commissioner Iqbal Chahal. The state government had in January issued a GR slashing construction premiums paid by builders by 50% after the cabinet approved it.

MahaRERA grants six-month extension to builders to deliver projects

 09 August 2021

Mumbai

The Maharashtra Real Estate Regulatory Authority on August 6 allowed a six-month relief to builders to deliver projects by accepting their demand for invoking the 'force majeure' clause because of the second wave. This is the second time in the pandemic that the authority has granted such a relief for the builders in the state.

"All MahaRERA registered projects where completion date, revised completion date or extended completion date expires on or after April 15, 2021, the period of validity for registration of such projects shall be extended by six months," the Authority said in a notification.

The Authority added that it will accordingly issue project registration certificates with revised timelines for such projects at the earliest and also made it clear that the extension will not apply to projects that were to be completed before April 15.

The notification said the state government had on April 13 issued directions regarding restrictions on the movement of people because of the second wave of infections and added that this wave was more lethal.

The lockdowns led to construction activities coming to a standstill due to non-availability of labour and impact on the movement of building material, it said.

"A force majeure period of six months from April 15 to October 14 is being declared," the notification said.

The order has been issued in order to aid government efforts in controlling the damage caused due to COVID-19 and ensure that completion of projects does not get adversely affected, it added.

The time limits for projects, which became due anytime during the force majeure period, will automatically stand extended for a period till the expiry of the period, it said clarifying that the rights of the allottees will not get affected through the order.

The notification said promoter organisations had represented before the Authority requesting for this relief in the wake of the second wake crippling the industry.

"It is a move in the right direction and the real estate hopes for authorities other than MahaRERA to follow the same thought process and grant similar relief," developer Niranjan Hiranadani, National President of realty industry body Naredco, said.

Hiranandani Group invests Rs 1,000 crore to develop commercial space in Thane

 3 July 2021

While Quantum tower spread across 0.6 million sq ft is ready to be leased out, Centaurus tower spread across 2 million sq ft will be ready by December 2022.

NEW DELHI
Hiranandani Group has invested nearly Rs 1,000 crore to develop 2.6 million sq ft commercial real estate space in Hiranandani Estate township spanned across 350 acres on Ghodbunder Road, Thane, the company said in a media release.

While Quantum tower spread across 0.6 million sq ft is ready to be leased out, Centaurus tower spread across 2 million sq ft will be ready by December 2022.

The company claims that both the commercial towers will offer ‘walk to work’ lifestyle.

"The consequential benefit of office spaces moving closer to employee homes will lead to carbon neutrality, enhanced productivity and increased employee retainability: tuning in perfectly to the long-term sustainable business goals," said Niranjan Hiranandani, founder & MD, Hiranandani Group.

ADIA-backed Lake Shore in talks to acquire Viviana Mall

 01 July 2021

The proposed deal assumes significance as it indicates global investors’ unabated interest in Indian mall developments and confidence that retail consumption will rebound once the Covid-19 pandemic is over.

The Abu Dhabi Investment Authority-backed Lake Shore India Advisory is in talks with realty developer Ashwin Sheth Group and Singapore’s sovereign wealth fund GIC to acquire Viviana Mall in Thane for around Rs 2,000 crore, said persons with direct knowledge of the development.

The proposed transaction will be the largest ever single and operational retail property acquisition in the country.

“The discussions between all three entities have reached an advanced stage and the transaction is expected to be completed soon as the terms are being finalised now,” said one of the persons mentioned above.

The proposed deal assumes significance as it indicates global investors’ unabated interest in Indian mall developments and confidence that retail consumption will rebound once the Covid-19 pandemic is over.

Viviana Mall is spread on a 13-acre land parcel on Thane’s on Pokhran Road and has total lease area of 1.7 million sq ft. It houses one of the largest multiplexes with 14 screens including Imax experience.

GIC had picked up 49% stake in Viviana Mall from Sheth Group in early 2016.

ET’s email queries to GIC and Lake Shore remained unanswered until the time of going to press.

"Based on the speculation, the management at Viviana Mall strongly denies any such developments. We will proceed to updating all our stakeholders and media if any announcement has to be made,” said Viviana Mall’s spokesperson.

ET had reported earlier that the Institutional investors including Blackstone Group, Warburg Pincus, ADIA-backed Lake Shore and Canada Pension Plan Investment Board (CPPIB), through their joint platforms or Indian partners, had shown interest in picking up the property.

Given the increased residential development in and around Thane, the city has also emerged as a major hub for retail consumption, prompting the rise in interest among major retail property developers.

Private equity major Xander Group’s retail arm Virtuous Retail South Asia (VRSA) has acquired a nearly 20-acre prime land parcel in Thane from textile major Raymond for $100 million, or over Rs 710 crore. It is planning to invest an additional $240 million, or over Rs 1,700 crore, to develop the site, taking its total investment to over Rs 2,400 crore.

VRSA is planning to build a 3.7 million sq ft mixed-use city centre project anchored by a 2.4 million sq ft VR retail flagship development. The proposed 2.4-million-sq-ft VR flagship retail mall will offer retail, dining, lifestyle, and entertainment options.

Ashwin Sheth Group is looking to set up a strategic platform to develop and operate retail malls across the country.

In December, the developer entered into a joint venture with Nagpur-based Sethi Group to develop 1 million sq ft mall, Viviana Nagpur, in the city’s south western region near Pratap Nagar.

Recently, GIC also entered into a strategic partnership with The Phoenix Mills to set up a joint venture to develop, own and operate retail-led mixed-use developments in India.

In 2019, Lake Shore had bought a majority stake in a retail mall project in Hyderabad from the city-based Phoenix Group for around Rs 1,000 crore, inclusive of construction funding.

How is money refunded when a property deal is cancelled

Februay 2020

What are the financial and income tax consequences that follow, if a property deal is called off or cancelled? We examine

Property deals need not always culminate in the execution and registration of an agreement. Sometimes, the deal may not go through and may be abandoned halfway, after the payment of token money or even after some of the payments have been made. The deal may be cancelled by either the seller or the buyer, for any reason.

Credits : pexels.com

In case of deals for the purchase of any real estate, the buyer generally pays some amount as token money, when the other terms and conditions for the transfer of the property are agreed upon. The amount of token money may vary, from being merely a token to a substantial percentage of the value of the property.

If the seller backs off from his commitment to sell his property, there are no immediate financial implications, except that the buyer gets a right to file a suit for specific performance in the courts of law. However, this is generally not resorted to.

If the buyer backs out from the deal, the seller has the right to forfeit the token money paid. With respect to such forfeited token money, the buyer cannot claim any income tax benefit, as this is treated as a capital loss under the tax laws. However, the advance money/earnest money that is forfeited, becomes an income of the seller in the year in which the deal is called off. Such forfeited earnest money is taxed under the head ‘income from other sources’ and not under the head ‘capital gains’, even though the income is received with respect to a capital asset.

Before the amendment of the law in 2014, the amount of forfeited earnest money was required to be deducted from the cost of acquisition of the asset with respect to which it was received, in the year in which the asset, which is the subject matter of the deal, was sold.

​​Refund of stamp duty paid

Generally, for all property transactions, the buyer has to pay certain amount as stamp duty. This is either a fixed amount or a percentage of the property’s market value. You also have to pay registration charges, for registration of the agreement.

The stamp duty rates and registration charges payable, are determined by the respective state governments. So, the rules for refund of stamp duty that is paid for property transactions, would vary from state to state. You are required to pay the stamp duty before the execution of the document.

In Maharashtra, you are entitled to claim refund of the stamp duty, within six months from its payment, in certain situations. You can claim the refund of stamp duty paid on such instrument, if the same has not been executed. The government deducts 1% of the stamp duty, subject to a minimum of Rs 200 and a maximum of Rs 1,000 of the stamp duty paid.

In case of cancellation of a deal for the purchase of a property and for which the agreements have already been registered, the Maharashtra government allows a longer period of two years from the date of the agreement, for claiming the refund of the stamp duty, subject to certain conditions.

This refund is allowed, only if the developer fails to hand over possession of the property booked and this fact, as the reason for cancellation of the deal, is mentioned in the cancellation deed. The rules also provide that the cancellation agreement should be registered.

The buyer of the property can get a refund of 98% of the stamp duty, if an application is made for a refund of the stamp duty. With the refund application, you are required to attach the original agreement, as well as the original cancellation deed, with both the documents being registered. However, you will not get a refund of the registration charges.

Refund of GST (Goods and Services Tax)

When you book an under-construction property, as per the existing laws, the developer levies a GST on the agreement value, at a certain rate. This rate will depend on whether the property falls under the ‘affordable housing’ category or not and also on whether the developer is availing of the GST. For any reason, if you want to cancel the booking and thus, surrender your rights over the under-construction property, the builder may agree to refund the booking amount and instalments paid, or even agree to pay a higher amount to you, depending on the demand and supply dynamics at that time.

Although the developer may have collected GST from you, he may or may not agree to refund this amount, as he may have already deposited the amount to the credit of the government. The builder will not be entitled to claim any refund with respect to the GST, as he has already rendered services to you.

In case you enter into an agreement to transfer your rights in the under-construction property to a third party, with the developer being the confirming party, your sale price would be inclusive of the GST and you will not be able to separately recover or charge any GST on such transaction.

While computing the capital gains, the GST that is already paid by you, will form part of the cost of acquisition. The capital gains will be taxable as long-term, if your holding period has been three years, or else, the profits, if any realised, will be taxed as short-term capital gains.

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