Berlin: CREDAI, the apex body of real estate sector released two joint reports with leading IPCs, JLL and Cushman & Wakefield at the CREDAI NATCON 2018, its 18th annual international convention held from 02nd – 04th August, 2018 in Berlin, Germany. The two reports unveiled at CREDAI NATCON 2018 were a testimony to the unprecedented growth displayed by the real estate industry in India. The CREDAI-JLL report pointed at significant increase in sales velocity, recording a rise of 25% y-o-y with sales at over 64,000 units while another report unveiled at NATCON by CREDAI – Cushman & Wakefield displayed heightened PE investment of INR 10,080 crores in Q2, 2018.
NATCON 2018 saw over 1000 member developers and experts from the real estate sector, senior professionals from the financial world and ancillary industries participate in the three-day long convention aimed at facilitating best practices and learnings, stressing on the importance of real estate as one of the building blocks of a nation’s economy. The participants included key capital market players from India and around the world, leading companies and Government officials. CREDAI also put forth robust demands for incentivizing developers to participate in affordable housing to continue the growth momentum. Some of the demands were enabling tax benefits to projects registered prior to 1st June, 2016, reducing land area utilization to 50%, a 12% GST with ITC and 2/3rd land rebate in metro cities, Development Rights (DR) in Joint Development Agreement (JDA), redevelopment agreements and Transfer of Development Rights (TDR) exempt; Housing loan interest deduction against ‘Rental Income’ for self-occupied property increased to Rs. 5,00,000 for realising the Government of India’s vision of “Housing For All”.
According to CREDAI-JLL Report, the demands aimed at providing further impetus to the growth of the real estate sector amidst the positive trends on investments and residential housing. The growth witnessed in H1 2018 can be attributed to two large factors, firstly returning buyers’ confidence on account of implementation of RERA in most states and stable capital values that have started to show an upward bias. The general consensus amongst the buyers has been that the markets have bottomed out and capital values are now expected to move northward. These two factors, have pushed many fence sitters and new home buyers to take the purchase decision. This is despite the fact that the RBI has increase its REPO rate in the third monetary policy making borrowing for home loans dearer.
Residential –Sales, H1 2018 (CREDAI-JLL data)
|H1 2017||H1 2018||% change Y-o-Y|
Mumbai saw the highest sales volume totaling to over 13,600 units in H1 2018. Bangalore followed closely with 13,300 units and recorded a marginal increase of 2% in sales y-o-y. Pune, which also saw a minor increase of 2%, in sales volume recorded at approximately 10,000 units. Both these markets saw steady trends closely mirroring the market activities from H1 2017.
Delhi – NCR saw a rise of 26% y-o-y in sales owing to rise in new launches and returning confidence in the market. The market saw sales of over 10,000 units. Kolkata topped the percentage chart for y-o-y growth in sales to record a rise of 280% (albeit on lower volume) in the first half of 2018. Hyderabad too recorded significant y-o-y activities with sales volume rising by over 180% in H1 2018. Both Kolkata and Hyderabad markets had seen very limited buying activities last year, thus making the sales volumes of H1 2018 stand out significantly.
The CREDAI – Cushman & Wakefield report displayed office sector recording inflows of INR 4295 crores (USD 0.6 bn), which is a 39% increase from the corresponding quarter last year. This segment constituted almost half of the investments committed by foreign investors, retail segment constituted 26% and industrial segment had a 10% share in investments by foreign investors. Office sector took the lead in investment activity making up for 42% of leasing activity during Q2, 2018, while, the average deal size increased by 21% YoY at INR 560 cr during Q2 2018, Mumbai attracted highest PE investment at INR 2800 cr followed by Chennai and Delhi NCR.
Another joint report unveiled by CREDAI – CBRE at NATCON 2018 indicates an influx of 500+ mn. sq. ft. of new office, retail, warehousing and residential supply in India’s real estate by 2021, owing to positive reforms and strong investments. In the office segment, leasing activity in the first half of 2018 has already crossed 20 mn. sq. ft with Bangalore, Delhi NCR, Hyderabad and Mumbai accounting for more than 80% of leasing activity. While the industrial and logistics segment witnessed a take-up of almost 10 million sq.ft. of space in H1 2018, which was equivalent to the entire annual take-up of the year 2015.
The notable speakers at the annual convention in some of the other panels included Ms. Renu Sud Karnad, MD, HDFC Ltd., Mr. Khushru Jijina, MD, Piramal Capital & Housing Finance Ltd., Mr. Anuj Puri, Chairman, Anarock Property, Mr. Hafeez Contractor, Renowned Architect, Mr. Rajiv Sabharwal, MD & CEO, Tata Capital and Ms Manisha Natarajan, Group Editor, Real Estate & Urban Development, Network 18.
Speaking on the occasion Mr. Jaxay Shah, President – CREDAI National said, “World’s fourth largest economy – Germany is a great example of how old and new coexist, which has also contributed to its housing boom. And, we feel that Indian Real Estate is nurturing the same potential with growth breaking barriers every day with rising sales and PE investments – making India an even more powerful economy. CREDAI NATCON 2018 is an effort in this direction to learn and relearn the global best practices to optimize this opportunity the industry presents. The rise in market confidence needs more Government support with relaxation in certain norms and we will continue to work with the relevant authorities to drive its growth.”
Mr. Getamber Anand, Chairman – CREDAI National added, “Whether it’s creating an inclusive environment for women, young developers, skill workers and homebuyers, we are breaking stereotypes every day. The CREDAI – JLL report’s findings that sales have risen 25% y-o-y, makes it evident that we have succeeded in nurturing an ecosystem of growth in Indian real estate. The CREDAI – Cushman & Wakefield and CREDAI – CBRE reports indicate unparalleled growth in the sector in the times to come. With this year’s theme ‘Break the Stereotypes’ at NATCON 2018, we shall continue to enable a thriving ecosystem, and celebrate the power to benefit all the stakeholders including millions of homebuyers and homeowners.”
Mr. Satish Magar, President Elect – CREDAI National said, “CREDAI has set benchmarks and showcased strong commitment in paving the way for the growth of Real Estate sector in implementing the policy changes towards Indian realty’s growth. The effort has helped in the revival of the sector and laid a strong foundation for the future. NATCON is another step demonstrating our efforts to transform the sector and bring their issues to the forefront.”
Ramesh Nair, CEO & Country Head, JLL India said, “The significant turnaround witnessed in the first half of 2018 was a much awaited boost to the residential sector, according to the CREDAI – JLL report. End user confidence in market has strengthened on account of timely completion, implementation and adherence to RERA laws, good governance leading to accountability and transparency in the system. NATCON 2018 comes at an opportune time and aims at deliberating on the dependence of the brand equity of developers on these factors, with insightful sessions planned through the event.”
Anshul Jain, Country Head and Managing Director – Cushman & Wakefield India said, “Investments across multiple segments in Indian real estate continue to scale new heights. The office sector continues to see record breaking investments come in due to sustained demand from Indian corporates according to the CREDAI – Cushman & Wakefield report unveiled at CREDAI NATCON 2018. The theme of NATCON, “Break the Stereotype” truly captures the essence of the upswing in the investment momentum observed in Indian real estate. Berlin and India, real estate and opportunity, it is these themes that serve as the bedrock of this ground-breaking conference, and it was a pleasure to be a part of it.”
Speaking at the occasion, Anshuman Magazine, Chairman, India and South East Asia, CBRE said, “The CREDAI-CBRE report unveiled at NATCON 2018 highlighted that the real estate industry has started to experience a bullish trend and we expect that all areas of the industry – office, retail, warehouse and residential – will contribute towards its growth over the next couple of years. CREDAI’s NATCON sets the tone for this ecosystem’s growth for 2018 which could very well be the turnaround year for the industry in India.”