Passing of the long-pending Real Estate Regulatory Bill, which was being hotly debated and second-guessed for far too long, is an unequivocal victory for the Indian real estate sector. It is by far the most decisive step the sector has taken towards transparency and reaching the kind of standardized processes, procedures and accountability guidelines that the industry requires to progress.
The real estate industry welcomes the major reform that promises to bring in much-needed transparency and accountability to the rather opaque sector. It will create a much-needed consumer right protection umbrella for buyers of real estate, thereby increasing consumer confidence as well as creating lasting developer brands strong on quality and timely delivery of their projects. As there will be strict punishment for errant developers as well as fines for project delays and faster redressal of consumer complaints, the problem of unscrupulous elements in the industry will be addressed.
Norms on size of projects had been relaxed from 1,000 sq m to 500 sq m and further reduction in size can be brought under the purview of the regulator by state governments.
A single-window clearance is needed now, without which there may be cases where bonafide delays by developers may still result in an unfavourable penalty. The time taken to get many environmental, state level and municipal-level clearances have afflicted developers for long.
Without ensuring that the approval process is not delayed by civic agencies’ inaction or setting up a single-window system, the regulator may inadvertently add another layer to the longer processes already delaying projects. This law will reduce volatility seen in this sector and build the trust deficit between both stakeholders – builders and buyers.
RERA (Real Estate Regulatory Agency) will provide a positive impetus towards achieving the housing dream while ensuring a level-playing field for developers and buyers. With real estate having linkages to the largest number of industries, the bill is a verdict to end the age of information asymmetry, lack of accountability and unwarranted project delays and marks the beginning of rising transparency, liquidation of assets – and importantly, positive sentiment.
As an evidence of effectiveness, we present an analysis on how the retail real estate markets in different states are impacted because of the Bill
Retail transactions in Ahmedabad remained stagnated. Nonetheless demand for high streets retail spaces was seen during the month. Occupier categories such as fashion accessories and Quick Serving Restaurants were seen looking for retail space actively.
Leases strengthen in retail malls. Malleshwaram is emerging as a popular retail destination due to the presence of high end residential project
Major Transactions: Funky Monkeys, Anita Dogreand Global Desileased space at Yeshwantpur and Global Desiand Raymond leased space at Banaswadi.
The Ambattur Old Town bus terminus renovation project has been sanctioned. Market sentiments remain trepid. The popular Ramnee Mall terminated its operations in Chennai. Major Transactions: Levi’s at Alwarpet and Royal Enfield at Anna Nagar
Noida Authority has adopted green clause while giving out tender contracts. RERA Bill was passed in the Parliament. Retail is being characterised by the demand for premium, superior malls where active churn is visible. Major transactions were H&M and Hunkemollerin Ambience Gurgaon, Massimo Duttiin Select Citywalk and ASAL in DLF Emporio. New Completions include Logix City Centre in Noida
The State Finance Minister in his budget speech has said that the State government is determined to achieve a generating capacity of 23,912 MW of power in the next three years.Leasing activities in the malls are quite stable. Some selected malls are witnessing a marginal rental appreciation during the month.
Major transactions were Hamleys and Hagen-Dazs in Inorbit Mall, Raghavendra Rathore and Miller Salon in Banjara Hills
Seven IT parks in the state have been rolled out and three more will also be operational soon. They would create an extra 5.5 lakh sq. ft IT space. WBHIDCO (West Bengal Housing Infrastructure Development Corporation) is constructing a building for startups in New Town and it will be first of such kind in the state.
Leasing activities are tepid, major transactions include Kompanero in City Centre Mall, Salt Lake and Apple Service
The Maharashtra government has announced, that it will increase ready reckoner rates by 8-10 per cent April 1 onwards. The hike might go upto 25 per cent in the residential pockets in Mumbai. Retail in the city is still in a state of transition with high end malls which continue to attract best tenants. Churns and tenant profile is rising across good malls. Major transactions include Fat Fredy’s (F&B) leases in suburbs, AND apparel in suburbs and Fossil (apparel) in suburbs.
Pune Municipal Corporation has formed a committee to speed up infrastructure projects in the city. The committee will have representatives from other government organisations who will resolve the issues in the projects where more than two government organisations are involved. Leasing activity in the malls are quite stable. Some malls have seen marginal appreciation during the month. Major Transactions include: Central leased in Nitesh Hub and Max leased in Royal Heritage mall.