About 20,000 housing societies in Maharashtra can gain from cooperative bank funding

 June 14, 2022

The housing finance limit of 5% of the total asset is expected to boost self-development of societies in Pune, Mumbai, and Thane, Maharashtra Housing Federation vice-chairman Suhas Patwardhan said.

PUNE: Nearly 20,000 housing societies and apartments planning self-redevelopment in the state will benefit from the RBI’s decision to allow cooperative banks to grant finance for the commercial real estate-residential housing segment.

The housing finance limit of 5% of the total asset is expected to boost self-development of societies in Pune, Mumbai, and Thane, Maharashtra Housing Federation vice-chairman Suhas Patwardhan said.

“Real estate projects involving redevelopment are key areas in the property market, especially in growing cities.As per the RBI notification, all district cooperative banks and state cooperative bank will be able to grant loans to housing societies for self-redevelopment instead of them handing over the project to a developer for commercial real estate-residential housing according to the notice on June 8,” Patwardhan added.

The decision is expected to open more liquidity and financing avenues for real estate development. Federation members said that it will help housing societies implement the 2019 GR to promote self-redevelopment.

Bank manager Shrikant Karegaonkar said that the RBI monetary policy has doubled the limit of housing loan for cooperative banks. “It will help reduce the impact of inflation by pumping more funds into the housing sector and open opportunities to customers with the cooperative sector,” he said.

Members of housing societies said that while 5% of the total assets looks small compared to the demand, the limit may be extended and it was a good beginning.

Source: realty.economictimes.indiatimes.com

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Lease income from ‘residential’ property is exempt from GST

 June 8, 2022

MUMBAI: Rent or leave and license fees received by an owner of a residential flat, even if such flat has been let out to corporate entities for use by the latter’s employees, will not be subject to goods and services tax (GST). This was recently held by the Authority for Advance Rulings (AAR), Maharashtra.

In cities like Mumbai, residential flats are often let out, on a lease and license basis to business entities. In turn, the concerned company allots these flats to its key executives for their residential purposes. Letting out of residential flats is exempt from GST, but does the mere fact that it is let out to a corporate entity transform its character? This often becomes a contentious issue. Kasturi and Sons, which had proposed to let out some of its residential flats, located in a posh South Mumbai area, to Life Insurance Corporation of India (LIC) approached the AAR. It contended that the flats that are going to be let out are residential apartments and they are going to be used for residential purposes only. Merely because these flats will be taken by LIC does not change the end usage to ‘commercial’

The bench was composed of members Rajiv Magoo and R. R. Ramnani, who ruled that flats which are used for residential purposes, irrespective of whether they are let out to individuals or to commercial entities will be covered by the exemption notification dated June 28, 2017. In this case, as the nature of the end use was residential; Kasturi & Sons would not have to pay GST on the monthly leave and license fee received by it (This was proposed to be Rs. 145/sqft).

Indirect tax specialist and founder of a CA firm, Sunil Gabhawalla explains, “The exemption is available if the property being let out is a residential dwelling and is used for residential purposes. If the property is used for commercial purposes, the exemption is not available and the landlord or licensor would be required to register and pay GST at 18% if the annual rent crosses 20 lakhs.”

“The ruling correctly holds that the commercial nature of licensee (which is LIC) would not be relevant to decide the eligibility for the exemption but the actual use of the property - residential stay by employees of LIC is the determining factor,” adds Gabhawalla.The AAR bench in its order pointed out that the submissions made by the jurisdictional GST official defined all logic. He had submitted that: LIC is a commercial organization and hence the staff to whom the flat is let out can sit late in office and work more. LIC is a profit-making company. So, in order to increase profit, the facility of residential quarters is given to employees, which is a commercial use.

The jurisdictional officer had also submitted that the exemption notification would not apply, but he had failed to provide any reasoning for his opinion, observed the AAR bench.In its order, the AAR bench also referred to a similar advance ruling given by the West Bengal bench. “The GST applicability is not decided by the nature of the property, but by the purpose for which it is used,” emphasized the AAR bench and held that the exemption notification would apply.

Source: timesofindia.indiatimes.com

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Inflation overdone; Real estate to grow in near future: Report

 June 7, 2022

According to the ‘Bulls and Bears’, Indian valuation handbook, Indian real estate segment shows a good growth with largest ever launch in the pipeline by most real estate companies

Motilal Oswal Financial Services Limited’s (MOFSL), India valuation handbook ‘Bulls and Bears’, May 2022 edition stresses on the fact that the fear of inflation is overdone and the realty segment will see a good growth going forward.

According to the report, most Indian real estate companies have witnessed a 10%-15% rise in construction costs. Now even if the cost is around 25%-40% of the sales price, the overall impact on margins is restricted to 3%-4% only and the realty companies have been able to push a price hike of 5%-8% on portfolio level comfortably.

Strong pre-sales

Affordability, rising need of home ownership and sector consolidation etc. have paved the path for the Indian real estate sector to again see strong pre-sales momentum since the onset of Covid-19. The handbook mentions that with the largest ever launch in the pipeline by most Indian real estate companies, the Indian realty segment is expected to see a healthy demand in the near future.

Reduction in inventory overhang

Since 2013-14, though the housing demand has remained stagnant, the inventory levels have seen significant correction driven by consistent decline in new launches. As per MOFSL, unsold inventory has dipped notably to 4, 37, 000 units from the peak of 7, 70, 000 units in CY13 with the overhang now reducing to 23 months.

Impact of interest rate hike

According to the MOFSL report, while the impact of interest rate hike is expected to be minimal in spite of a similar hike which was made recently, it can have a negative impact as the rates start moving closer to 8%. In that case, most developers will have a 10%+ borrowing cost and this will in turn have an impact on their return profiles.

Realty sector valuation

The report highlights that the top 12 listed companies posted 43%/45% YoY growth in bookings in FY21/FY22. This should have ideally resulted in further re-rating of the stocks, but the rising cost pressure along with recent interest rate hikes have built in expectations of margin erosion and demand slowdown. Hence, post the recent correction, many stocks have now entered the value zone.

The sector valuation has corrected to below its long-term average P/E of 23.2x and is now trading at 21.2x on a one-year forward basis.

Source: housing.com

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What Makes Thane A Real Estate Destination Of Choice?

 

It's a simple equation: entry level price points in Thane real estate still have the potential to grow effectively. In some projects, future growth potential has not already been factored into present-day pricing. That's factor one.

The second is relatively easy exit options, as also simple renting and leasing opportunities. Thane's real estate is driven by end-users. So, an investor wanting to divest or exit finds it relatively easier as compared to other property hubs.

Based on the investor's risk appetite and quantum of investible surplus, Thane's real estate has a wide range of offerings which span across locations, type and segments of real estate, as also price - points.

The safe and secure aspect of these options is based on real estate developers who are members of CREDAI-MCHI Thane. This effectively provides the safety and security of dealing with members of a self-regulated association, which has a code of conduct, follows ethical practices -and follows all RERA norms.

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5 Things To Keep in Mind While Choosing Your Office Space

 Unlike buying a dream home, where your heart and soul are the front drivers, choosing an office space is more of a rational decision made with the brain. Your heart might willingly agree on shelling out a little more on that top-floor office space in a commercial tower which oversees the countryside. But you need to kick the emotions out and not let this be the reason why you choose that office space over a space that is located in the city’s prime business center and also fits your budget. If you also want to make a rational and logical choice about your office space, just keep these 5 things in mind.

LOCATION

The first question to ask while searching for an office space for sale in India is its location. Your office location sends out a number of signals for your business. When located in the prime and posh locality, a company is considered successful while in a developing locality means it is still in its growing phase. Moreover, there are a number of IT parks, business centers, commercial buildings, and other prime locations where your business can be located to show off its growth rate. Also, consider the connectivity for employees and ease of accessibility for clients while choosing the location for office space.

COMPATIBILITY WITH YOUR BUSINESS

There are different types of office spaces being constructed by the top builders and developers of commercial spaces in India. Depending on the type of business, you can choose whether an office space is suitable for you or not. A spacious and well-planned office is required for those who have large employee base, a small office would suffice for those whose majority of work is happening on the web, and a plush and well-designed office space is indispensable of those who have foreign clients and other delegates visiting their office space.

BUDGET SUITABILITY

While looking for office space in different areas, there are a number of offices that you might shortlist. But you need to consider whether it is within your budget or not. The price of the space when buying it should not affect any other thing in your budget. In case you are taking the office space on lease, it is important to see if the leasing amount fits your financial goals. Moreover, there are many other hidden costs that the builder/developer might ask afterward like maintenance cost, parking space cost, etc., check them beforehand. Know the office space price in the neighborhood to know if the price is in line with the rest of the properties.

COST OF RENOVATION

The cost of an office space does not stop at the purchase or lease. There are a number of other expenses that come along with office space. You need to inspect the entire office space and premise to know how much modification needs to be done so that it becomes in line you’re your work and business culture. While there are some furnished office spaces with air conditioners, lightings, and other electrical fittings, there are other spaces that need to be completely renovated. Check for the total expenses for modification before you say yes to any office space.

GROWTH POTENTIAL

The space available in the office is another important parameter that needs to be considered. You need to check if there is any scope for your business growth in the office. Will it be able to accommodate everyone if you decide to increase your employees or add new set-ups to scale your business to new heights? The office space should have room for your business growth.

Various factors like your location, size of the office, infrastructure, modifications, scope for growth etc., play a crucial role in your brand image not just in front of your clients and customers but also in front of your potential employees. So, just keep the five things discussed above in mind to ensure that you’ve made the right decision regarding your office space.

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Thane - A Real Estate Oasis Of Opportunity

 There was a me, not long ago when Thane was considered one of those far off places with lile to no sustainable infrastructure and development prospects in terms of real estate and entertainment.

There was a time, not long ago when Thane was considered one of those far off places with lile to no sustainable infrastructure and development prospects in terms of real estate and entertainment. However, in the last two decades, the landscape of Thane has changed. Today, Thane has transformed into an oasis of opportunity as well as a hub for sustainable growth and development prospects.Real estate in Thane has been flourishing well over the past decade.

Addionally CREDAI-MCHI Thane Unit has been acve, and this has only helped in its growth because of its extremely posive outlook towards the creaon of a progressive, organized, and robust real estate sector that is mutually beneficial for all its stakeholders. CREDAI’s aim is to not only increase the credibility of the real estate industry as a whole but also seeks to support and enrich the Government’s iniaves. With some of the largest developers stepping into the arena and working hand in hand with local developers, Thane is now one of the prime suburbs with some of the best projects real estate has to offer. From some of the fanciest malls to luxury housing projects complete with superior quality amenies offered by developers with a view to creang a beer lifestyle, the city of Thane is truly making great strides in real estate

From some of the fanciest malls to luxury housing projects complete with superior quality amenies offered by developers with a view to creang a beer lifestyle, the city of Thane is truly making great strides in real estate development – both residenal and commercial. CREDAI-MCHI Thane Unit is of the belief that through strategic local partnerships with the Thane Municipal Corporaon, the MMRDA, and MIDC Thane that are already doing considerable work towards building sustainable infrastructure, Thane is going to be a bourgeoning city with great potenal for growth in commerce as well as real estate development – both residenal and commercial.

CREDAI-MCHI Thane Unit is of the belief that through strategic local partnerships with the Thane Municipal Corporaon, the MMRDA, and MIDC Thane that are already doing considerable work towards building sustainable infrastructure, Thane is going to be a bourgeoning city with great potential for growth in commerce as well as real estate.

According to the experts, stakeholders or investors who had foresight and invested in Thane as close to a decade ago have enjoyed an estimated 300% growth in the last couple of years. With an increase in employment opportunies up to roughly 40% in the Mumbai Metropolitan Region (MMR), including Thane, there will be a subsequent increase in the demand for housing which in turn will only serve to ensure that real estate investments appreciate further.

Thane is a city that is ideal in terms of its locaon, connecvity to rest of Mumbai and transportaon infrastructure; it’s like a hub. There are various infrastructure projects and developments that are underway that will only increase Thane’s appeal in the near future. Some of the projects worth menoning are: • Metro Line 4 connecvity from Thane to Wadala • Proposed Metro Line 5 connecvity from Thane to Kalyan • Proposed Bullet Train Thane Staon (Mumbai - Ahmadabad) • Proposed Thane-Borivali Tunnel Road, GMLR Connecvity, Airoli - Dombivali Tunnel road via Thane, and other roadways developments.

In addion, Thane is also well connected to the various business districts such as Airoli Mindspace, Godrej IT Park Vikhroli, Powai Commercial District, GB Road (Hypercity), and Bhiwandi Industrial area. It is worth mentioning that Thane has excellent connecvity to major roads and highways, check nakas, railway and Metro staons. The city of Thane is blessed by nature with its picturesque beauty. In addion, its locaon, efficient public transportaon system and roadways make it an ideal choice for potenal homeowners and business people alike. The future prospects for Thane are certainly looking bright. What is needed to encourage this environment of growth is the foresight and mutual collaboraon of all stakeholders.

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Thane: A Success Story Co-Scripted By Real Estate Development

Thane has been the fastest growing urban conglomeraon in the Mumbai Metropolitan Region (MMR), and its real estate is poised for beer growth in days to come.

Thane has been the fastest growing urban conglomeraon in the Mumbai Metropolitan Region (MMR), and its real estate is poised for beer growth in days to come. The mul-faceted real estate development of Thane has been largely scripted by my fellow real estate developers, who are members of the CREDAIMCHI Thane. We are an associaon of real estate developers who work towards ensuring a structured approach to the development of Thane.

As the new President of CREDAI-MCHI Thane, I am grateful to my predecessor, IPP Shri Ajay Bhai Ashar for all the good work he has done during his tenure. I am also thankful to all our past Presidents, all of whom have blazed a path-breaking trail for CREDAI-MCHI Thane. With support from my Team and cooperaon from all members, we will work hard and take CREDAIMCHI Thane to greater heights.

Communicaon and leveraging of data to ensure proper business decisions are among the leading points which I hope to create as my legacy for CREDAI-MCHI Thane. PropStack Data has been subscribed to; we are geng informaon which cross-indexes data from the Stamp Office as also from the IGR, Maharashtra. This, when read along with trends which the data throws up, will help all of us plan for business in a structured and scienfic manner.

In Communicaon, our website is being revamped to take the message of CREDAI-MCHI Thane to all stakeholders. The logical next step is publicaon of a bi-monthly magazine, Realty Focus: Thane, which will create the much needed communicaon flow which in turn, will showcase and enhance real estate development in Thane. With limited numbers of print and mulple numbers of digital edions, this will be part of our outreach to our stakeholders.

Digital will be the driving force in our communicaon strategy, with social media coming in for special focus. WhatsApp, Facebook, Instagram, LinkedIn….we will leverage all of these to reach out to our mulple target audiences. There is so much more we can achieve, working together under the CREDAI-MCHI Thane banner, and the digital media will play a major role in this process.

We will also move to other investor hubs, where we will hold events and showcase Thane’s real estate as an investment opon. Pune, Nashik, Nagpur, Surat, Ahmedabad are among the desnaons we are looking at holding roadshows. Investors need to know why Thane real estate is the right opon, and we will take this message through our various outreaches.

There I so much to say, to share with you, dear readers, but I will stop here. The Realty Focus: Thane’s content has been curated to meet the requirements of a very diverse readership, and I look forward to your comments and reacon to the same.

In conclusion, let me share with you my thoughts on Thane: Among the fastest growing urban conglomeraons in India, Thane is a success story co-scripted by real estate development which incorporates global best pracces. An ideal investment opon, Thane is preferred by the discerning investor to create and grow wealth through the preferred asset class, real estate. The city has witnessed phenomenal growth across various economic parameters-be it high-end residenal accommodaon, highstreet retail, mulplexes, shopping malls, work spaces, office spaces, IT & ITeS spaces, logiscs spaces, entertainment spaces including auditoriums, art galleries, entertainment complexes, internaonal schools, supermarkets, healthcare services and such other developments which translate into one term: ‘real estate’.

Stunning architecture and structural stability come together in real estate development set amidst an environment which offers the verdant greenery of Yeoor Hills and the Sanjay Gandhi Naonal Park as also the azure Blue of Thane creek and the Ulhas River.

Thane has grown in sync with its infrastructure, which makes it ideal as a real estate hub poised for future growth. In this Festive season, I hope to see Thane’s real estate grow, and take firm steps towards becoming the central property hub in Mumbai and the Mumbai Metropolitan Region.

Jitendra Mehta is CMD, JVM SPACES
& President, CREDAI-MCHI Thane

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