Delhi-NCR key market for office leasing despite weak demand

The Grand Arch, located in Sector 58, Gurgaon

The Grand Arch, located in Sector 58, Gurgaon

Demand from multinationals to set up offices in the NCR region has pushed the average transacted rentals. This is despite a weak off-take in office leasing and fewer transactions.

American Express, Fiserv, Jacob’s, HCL, Micromax and Google were the top space occupiers accounting for approximately 75 per cent of office absorption in Delhi-NCR region for 2012-13.

The preference for this region is going up due to skilled manpower and developed infrastructure. Even micro-markets of Gurgoan and Noida have taken up almost 89 per cent of the total office space transacted.

According to a Knight and Frank research, at least 39 million sq ft of incremental office space entered the NCR market in the preceding five years making it the largest office market in term of stocks. The market showed a steady absorption levels in H1 FY2012-13 followed by a dip in H2 FY2012-13.

The city’s office market clocked absorption of approximately 5.8 million sq ft falling short by 25 per cent compared with FY2011-12. The IT/ITES sector which contributed about 42 per cent of the office demand had adversely impacted demand. This resulted in reduced office space in Q4 FY2012-13.

The report says that 1.07 million sq feet of office space was transacted in Q4 FY2012-13 showing a fall of 11 per cent compared with the same quarter a year ago.

Read more: Business Line

Economy

India, US discuss trade barriers, visa issues

Pushing for a bilateral investment treaty, the US today asked India to remove trade barriers to boost two-way economic ties, while India raised concerns over visa problems faced by its IT companies.

India also reassured the visiting US Secretary of State John Kerry that it would look into the issue of ‘trade barriers’ and said that both the sides would need to keep in mind each-other’s concerns to reach a ‘win-win situation’ on trade ties.

‘We have issues on trade barriers front and we have been reassured that the Indian government will look into it,’ Kerry said at his joint press conference with External Affairs Minister Salman Khurshid.

Kerry, who is here as part of a Strategic Dialogue process between India and the US, further said: ‘There are mutual concerns on both sides and we hope that there will be an increase in two-way trade’.

On its part, India raised the concerns over problems being faced by Indian IT companies with regard to changes in the US regulations for grant of professional visas.

Khurshid said: ‘We have brought to the Secretary’s notice (visa issue) and he has promised he will do whatever he can’.

Read more: Business Standard

Infrastructure

Infrastructure targets for 2013-14 to be finalised on June 28

“The Prime Minister will hold a meeting of key infrastructure Ministries on Friday. The meeting will be attended by Ministers of Railways, Road Transport & Highways, Shipping, Civil Aviation, Power and Coal,” a statement issued by the Prime Minister office said.

The purpose of this meeting will be to discuss the targets to be achieved by these infrastructure sectors for 2013-14 and finalise them. A similar process was followed last year.

The Planning Commission has done the preparatory work in finalising the targets for 2013-14. At the end of this meeting, the targets would be formally announced, the statement added.

It is understood that the targets set in the previous meeting will be reviewed, though the statement makes no specific mention of that.

Last year Montek Singh Ahluwalia, Planning Commission Deputy Chairman, had given a presentation. It was mentioned that the investment level during the 11th Plan (2007-2012) was much higher than anticipated in oil & gas pipelines, telecommunications and roads & bridges.

Read more: Business Line

Markets

Steel, cement cry for a boom in real estate development

The fortunes of some major commodities like steel, aluminium, copper and cement are closely linked to the performance of the real estate sector. The pace of development of commercial as well as residential properties is in turn linked to the behaviour of the economy over a long stretch and also market sentiment. Consulting firm PwC confirms this in a report on the construction sector, of which real estate is a part, next to infrastructure, investment-wise but miles ahead of industrial construction. The sector’s importance to the economy is underpinned by its nearly eight per cent share of gross domestic product. As things stand, a housing project will need 55 approvals from local self-government, as well as state and central government departments. Builders are, therefore, constrained to provide for up to 24 months to wrap up all the compliances.

Economic performance in the last two years could not have boded well for either the real estate sector or commodities used in construction. The portents for the economy are still not encouraging. The Organisation for Economic Cooperation and Development (OECD) has found reasons to scale down its Indian growth projection from 5.9 per cent to 5.3 per cent during calendar year 2013.

Read more: Business Standard

Banking

India eases overseas loan rules for low-cost builders

The Reserve Bank of India has made it easier for property developers to access foreign money in an effort to spur low-cost housing projects, such as slum rehabilitation.

The RBI has extended the limit of $1 billion that can be borrowed through the external commercial borrowing (ECB) scheme to the 2014-2015 financial year from this year.

It will also allow companies to hedge the entire borrowing, protect them from any sharp depreciation of the rupee against the dollar.

“The ECB availed of by developers and builders shall be swapped into rupees for the entire maturity on a fully hedged basis,” the RBI said in a notification on Monday.

The central bank also reduced the minimum experience companies have to have to undertake these projects to 3 years from 5 years.

The Reserve Bank also scrapped the minimum paid-up capital of 500 million rupees for property developers.

The Indian rupee slumped to an all-time low of 59.9850 to the dollar last week and foreign investors have been selling Indian debt, with many of them incurring losses due to their unhedged currency exposure.

Read more: Reuters

NRIs

Getting a PAN set to be tougher as govt plans more stringent verification

Getting a Permanent Account Number (PAN) is going to get a bit tougher, with the income-tax (I-T) department gearing up to make the verification process more stringent, after some cases of fraud came to its notice.

Ration cards and rent receipts might no longer be accepted as proofs of identity and address. The tax department might also ask for proof of date of birth for issuing a PAN card.

Instead of a rent receipt, a rent agreement along with proof of address of the owner would be accepted. Aadhaar number, gas connection documents, and a certificate issued by the employer in a prescribed format would be accepted as identity/address proof after changes to the income tax rules are made shortly.

The proposed move comes after the Economic Offences Wing found some foreign nationals, particularly from Afghanistan, were using fake PAN cards as proof of identity. In most of these cases, a fake certificate of identity and address signed by a Member of Parliament (MP) was issued.

Finance ministry officials said there were some gaps in the current process and the idea was to make the system foolproof and robust. A notification to this effect could be issued next week and the new rule would come into effect immediately after that. It will apply only to fresh applicants.

Read more: Business Standard

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