Piramal Fund invests in Lotus Greens’ Noida residential project

BY  Swet Sarika, VCCircle

Piramal’s realty investment unit plans to invest as much as $1 billion towards real estate this fiscal.

Piramal Fund Management, the real estate investment arm of Piramal Group, has invested in a residential project by north-based developer Lotus Greens, two people familiar with the development told VCCircle. The investment has been made in the form of structured debt.

VCCircle could not immediately ascertain the size of the investment but it could be in the same range as its other recent deals.

Piramal recently sealed a deal with Satya Group for a Gurgaon project, where it invested Rs 100 crore. In the first deal from its separate alliance with Canada Pension Plan Investment Board (CPPIB), it invested Rs 110 crore in a luxury residential project of Advance India Projects Ltd in Gurgaon.

The latest investment has been made in a project called Lotus Greens Arena located at sector 79, Noida. This luxury residential project is spread across 10 acres and offers 3 & 4 BHK apartments ranging from 1,495 sq. ft. to 2,395 sq. ft. The project forms a part of developer’s township Sports City.

“The deal was closed recently,” said a source quoted above.

Emails written to Khushru Jijina, managing director, Piramal Fund Management and P Sahel, vice chairman, Lotus Greens, did not elicit any response till the time of filing this story.

Lotus Greens is present across residential, commercial, hospitality, education and healthcare verticals. Founded by Nirmal Singh and led by its vice chairman P Sahel, the company has ongoing projects in Noida and Gurgaon.

As for Piramal, it plans to invest as much as $1 billion towards real estate this fiscal. In the last four months, it has invested Rs 2,000 crore on behalf of proprietary debt book and funds business. In a recent interaction with VCCircle, JIjina said he will be approving between Rs 600-800 crore of transactions every month through the rest of the year.

Training Program on Property Documentation on 18th July, 2014

Knowing the steps and documents required in a property transaction is today essential for both real estate professionals and potential home buyers and investors.

A real estate consultant can enhance his credibility and achieve customer satisfaction by knowing the steps and documents required in a property sales and purchase transaction thoroughly.

On the other hand taking basic precautions and safeguards by knowing the steps, process and documents required in purchasing a property reduces the likelihood of buyers ending up with a messy property deal.

However finding out the steps, process and documents required in a property transaction is a difficult job today, despite the huge growth of real estate in India.

It is therefore NIREM, the leader in real estate education and training in the country, offers a one-day training program on property documentation. Apart from this course, NIREM offers a range of real estate courses for both working real estate professionals as well as those who want to start their career in real estate.

The property documentation program aims to help participants identify the various documents required in property sale/purchase transaction, know how to establish marketability of title, understand the due diligence process, know the phases of real estate development, analyse the buyer-seller-broker relation in property sales process etc.

The training program on property documentation is suitable for Real Estate Developers, Property Consultants & Advisors, Real Estate Marketing Professionals, Housing Finance, Home Loan & Banking Professionals, Property Investors, Potential Home Buyers, Banking, Finance & Insurance Professionals.

The program is scheduled on 18^th July, 2014 at New Delhi. Seats are limited and registration is offered on first-come-first-served basis.

Interested participants may visit www.nirem.org, mail to Nirem.india@yahoo.com or call at +91.7827884220 to know more about the program.

Blackstone, others gear up to list REITs as India finalises rules

NEW DELHI – Blackstone Group(BX.N: Quote, Profile, Research) and its partner, Embassy Group, are laying the groundwork to cash in on their property holdings by setting up India’s first real estate investment trust (REIT) and listing it on one of the country’s stock exchanges.

The move comes as Prime Minister Narendra Modi’s government works to finalise rules as early as next month that will govern the trusts. The finance ministry is expected then to clarify tax rules for REITs in the budget, people with direct knowledge of the matter said.

The world’s biggest property investor and Embassy have a joint portfolio of more than 20 million square feet of offices in India, which is likely to help value their REIT at $2 billion, said Jitendra Virwani, chairman of Bangalore-based Embassy.

Listing REITs gives companies like Blackstone, The Xander Group, an emerging markets investor backed by the Rothschild family, and private equity firm Red Fort Capital, which counts Abu Dhabi Investment Authority among its investors, an attractive option to exit some of their investments.

“We are actually gearing up because we feel the pace the government is moving at is faster than what we would want, so it is better to be prepared much earlier than later,” said Virwani, who was set to meet Blackstone on Thursday to draw up a plan for the listing.

A spokeswoman of the tax department did not answer requests for comment. Blackstone did not respond to a request for comment.

The long-awaited move by India will be implemented by the country’s market regulator after the ministry clarifies tax rules to transfer assets into a separate vehicle before listing the trust, which had triggered worries over double taxation.

Implementing REITs will also be one early sign from Modi of how he wants to bolster the economy, which is suffering its longest spell of under-5-percent growth since the late 1980s.

India issued draft regulations for REITs in 2008, but was forced to shelve the plans after the global financial crisis dried up investor interest and an economic downturn dimmed the outlook for real estate investments.

If REITs are approved, India will follow China, where regulators in April approved the first property trust. The absence of REITs in China and India made Singapore and Hong Kong the preferred markets for listing property assets in the region.

REITs, listed entities that invest mainly in leased office and retail assets and distribute most of their income to shareholders as dividends, will give developers a new avenue to raise funds by allowing them to sell finished commercial buildings to investors and list them as a trust.

MORE LIQUIDITY

Between 2008 and 2013, private equity funds invested more than 452 billion rupees ($7.6 billion) in Indian real estate, of which more than a third was spent on office and retail assets, according to data from Cushman & Wakefield, an international property consultant.

“If there is more liquidity in the market, if people believe they have clearer exit possibilities, obviously it is helpful to any investor,” said Siddharth Yog, managing partner at Xander.

“If REIT laws came into being and a potential REIT listing in India was possible, it could be one of many potential exit strategies that could be explored,” said Yog, adding that REITs, however, will not dictate the company’s investment plan.

In 2012, Blackstone paid $200 million for a 50 percent stake in three office assets managed and owned by Embassy and mainly located in Bangalore. Earlier this year Blackstone and Embassy hived off their portfolio of assets into a separate vehicle, taking their first step towards listing a trust in India.

The portfolio, leased to tenants like Microsoft (MSFT.O: Quote, Profile, Research), IBM (IBM.N: Quote, Profile, Research) and Goldman Sachs (GS.N: Quote, Profile, Research), generates an annual rental income of 8 billion rupees and Virwani expects this to rise to 10 billion rupees by the time it lists a REIT.

“To have a brand like Blackstone along with us will help us market the REIT and get a better valuation.”

Source: Reuters, By Aditi Shah (Additional reporting by Rajesh Kumar Singh; Editing by Sumeet Chatterjee and Matt Driskill)

Training Program on ‘Contract Management’ Conducted by NIREM

A two-day management development program on ‘Contract Management’ was conducted by NIREM for Mahindra World City, Jaipur on 20-21 May, 2014. Managers from diverse functional areas such as contracts, legal, MEP, IT etc. participated actively in the program.

The program focused on tender processing, contract management & administration, Key Performance Indicators, Contract Reporting, Contract Closeout, Claims, Disputed & Settlement, Alternative Dispute Resolution etc. Participants actively participated in the program and were especially interested in topics like time and cost escalation and resulting claims and settlements. Another important topics that was actively debated was the tender process and management.

Since the faculty members were highly experienced and included former Additional Director General of CPWD and Director of a leading construction company, they could throw light on each aspects of contracts. Actual and real life examples of contract clauses, claims, disputed, settlements etc. were the highlight of the two days of the training.

Mahindra Word City (Jaipur) Limited, a 3000 acres SEZ, is a joint venture between Rajasthan State Industrial Development & Investment Corporation Limited (RIICO- A State Government Enterprise) and Mahindra Lifespace Developers Limited (a Mahindra Group Company). The Project has multi-sector SEZs and Domestic Tariff Area.

NIREM is the leader of real estate education in India. It offers classroom training, distance learning programs, workshops and in-house training for companies in real estate, housing finance and construction sectors.

NIREM focuses on conducting need based training program various topics related to real estate, housing finance and construction sector. In the series, NIREM is organizing a training program on ‘Property Documentation’ on 15^th July, 2014 at New Delhi. For further details, please contact at 07827884220 or Nirem.india@yahoo.com

SEBI demands tax concessions on real estate investment trusts

Seeks clarity on taxation of FIIs in infrastructure corporate bonds

Indivjal Dhasmana  |  New Delhi 

June 21, 2014 Last Updated at 12:18 IST

Ahead of the Budget, the Securities and Exchange Board of India (SEBI) has taken up with the government taxation issues for the proposed Real Estate Investment Trusts as well infrastructure  corporate bonds. 

"We have come out with a discussion paper on Real Estate Investment Trust and are hoping to get it implemented soon.  Our rules are ready, we have taken up with the government that these must be given a pass-through certificate status so far as tax status is concerned," SEBI chairman U K Sinha said at a summit organised by Skoch Consultancy Services. 

Sinha expressed the hope that the government will consider the demand favourably. 

"The moment there is a clarity on that, we will come out with our regulations," he said.

Sinha also  wanted a tax clarity on infrastructure corporate bonds for  foreign institutional investors (FIIs). 

"In the infrastructure sector, if a bond is issued and there is a FII, which is investing in that, what is the level of tax with that entity? If  it is vastly different from the withholding tax which is imposed on others, should there be different set of rules for FIIs and domestic institutional investors? These are the issues we are looking at," Sinha said. 

He  also  wanted the government to enact a  law  to replace  an ordinance which provides  SEBI the regulatory jurisdiction of  all  unregulated entities  that take  deposits of at  least  Rs  100  crore.  

"An ordinance is an ordinance. It has a limitd life. I am hopeful that the government will consider that this ordinance is converted into an act very soon," he  said.    

The SEBI chairman said there are still a large number of unregulated fund raising activities. These are coming under various names--chit funds or nidhi companies, housing schemes. 

"That menace has not still been fully controlled."

Sinha disclosed that  since the  ordinance  was promulgated, SEBI has taken action in more than 25 cases. "We have passed our orders, we have stopped them from raising money." Source: Business Standard