Monthly Archives: March 2018

PE investments in Indian retail assets up 15% at $800 million in 2017: Report

On the supply side, close to 2 million sq. ft. of new supply entered the market during the second half of 2017 and majority of this was concentrated in Kolkata, Delhi National Capital Region (NCR), Chennai, Pune and Bangalore.


Retail assets in the country witnessed investments of over $800 million from private equity and wealth funds in 2017; a 15% increase over 2016. The steady capital inflow highlights the continued growth of the retail sector in India, showed a CBRE South Asia report.


On the supply side, close to 2 million sq. ft. of new supply entered the market during the second half of 2017 and majority of this was concentrated in Kolkata, Delhi National Capital Region (NCR), Chennai, Pune and Bangalore. While close to 3.4 million sq ft of supply entered the market, 15 new brands established their presence in the country during the year.


Between July and Dec 2017, demand for retail space remained strong, as international brands such as Tom Tailor, Miniso, Simon Carter, and Jo Malone opened their first outlets in the country. At the same time, other well-known brands including Starbucks, H&M, Mango, Westside, Pantaloons, and Hamleys continued to expand operations.


Madame Tussauds also made its debut in the country with its first museum opening in Connaught place, Delhi in October 2017. Swedish home furnishing brand IKEA opened an experience center, Hej Homes, in Hyderabad during the second half of 2017.


“The government’s continued focus towards making India a preferred investment destination is having a positive impact on the country’s economy as well as the retail landscape,” said Anshuman Magazine, Chairman, India & South East Asia, CBRE.


According to him, the recent announcement allowing 100% FDI in Single Brand Retail Trading under the automatic route is likely to further ease the entry of global retailers. Competitive rentals, availability of quality space, and with more brands coming in driven by a growing consumer base, the sector can expect significant growth in times to come.


A notable trend witnessed during the year was the adoption of omni-channel strategies by established players. Several e-commerce retailers such as Urban Ladder, Craftsvilla, Myntra, Jaypore, Pepperyfry and Nykaa opened their brick-and-mortar stores; whereas established retailers such as Zara launching their online portals.


“Thanks to increasing globalization, demand for international brands continues to influence the retail story in the country. Going forward, increasing investments coupled with availability of quality space in both tier 1 and tier 2 cities will propel the market,” said Vivek Kaul, Head, Retail Services, India for CBRE South Asia.


During the first half of 2018, CBRE expects quality supply to enter the market, led by the southern cities of Hyderabad and Bangalore. Both domestic and international retailers continue to lead the expansion across fashion and F&B categories. Despite a strong supply pipeline, demand for quality retail space will continue to exceed the supply in most leading markets.


Source: The Economic Times

Can an NRI purchase or own a property in India?

Under the RBI’s guidelines, a non-resident Indian (NRI) is allowed to purchase certain types of properties, while other forms of realty may require special permissions. Any non-resident Indian (NRI), who is interested in buying a property in India, should be aware of certain legal provisions pertaining to the purchase or owning of an immovable property in India under the Foreign Exchange Management Act (FEMA). NRIs and persons of Indian origin (PIOs) are treated at par, for the purpose of investment in real estate.

Types of properties, where NRIs or PIOs can invest


The Reserve Bank of India, through a circular, has given general permission to NRIs, to purchase any residential or commercial property in India. The investor need not seek any specific permission from the RBI, nor is he required to send any communication or intimation in this regard to the RBI. Under the existing general permissions, an NRI can purchase any number of residential or commercial properties. The income tax laws also allow an NRI to own as many residential or commercial property as s/he pleases.

In case the NRI is unable to come to India, the documents pertaining to the purchase can be executed by any person, who is given a valid power of attorney. Under the RBI’s general permission, an NRI cannot purchase any agricultural land or plantation property in India. Consequently, under the existing regulations, NRIs cannot purchase farmhouses in India. So, if an NRI wants to purchase a farmhouse or plantation, s/he will have to approach the RBI for a specific permission and the RBI will consider this on a case-to-case basis.


Joint ownership


An NRI can purchase the property, either as a single owner, or jointly, with any other NRI. However, a resident Indian or a person, who is otherwise not allowed to invest in a property in India, cannot become a joint holder in such property, irrespective of the second holder’s contribution towards the purchase.

Continuance of ownership of property, after becoming an NRI


What if a person who owns properties in India, subsequently, becomes an NRI? Such a person can continue to hold the property in his name in India. An NRI is also allowed to continue to own any agricultural land, plantation property, or farmhouse that he owned when he became an NRI, which he is otherwise not allowed to purchase, after becoming an NRI. They are also allowed to let out the property, irrespective of when it was acquired. The rent received from such property, can be remitted, after appropriate Indian taxes have been paid on such rent.

Likewise, any NRI is allowed to sell, or gift an immovable property to any person resident in India. S/he can also gift or transfer any property, other than agricultural property, farmhouse, or plantation property, to any NRI.


(The author is a taxation and home finance expert, with 35 years’ experience)




5 Financial aspects to consider before you decide to buy a home

Buying your First Home? It is evident that you will have several questions in mind as a first time home buyer. We have compiled 5 most important financial aspects to consider before you buy your new home.

Financial Planning

The first step towards a proper financial planning for your dream home would be to review your current financial obligations such as other loans, insurance amount etc. This will provide you the right picture of your true income. Your budget will be a factor of the EMI that you can pay off and what your monthly expenses are. Apart from this, you should also account for the hidden charges such as registration, stamp duty, maintenance etc, when finalizing your budget & loan amount.

Once you have decided the loan amount, move on to check how much would you be able to put as down payment. Typically, these range from 15 to 20% of the property value, and offer a confidence to the bank about your credibility. You can also choose to take a loan with zero down payment, but this will result in an increase in your monthly EMIs.

Improving Your Credit Score

This plays a critical role in your loan application. Once you have applied for the loan, the lender checks for your credit score, as this is a clear indication of the credit worthiness of the applicant. So it would be advised to check your score with any of the credit bureaus like CIBIL, TransUnion etc. before applying for a loan, and ensure that it is in the better range.

Choosing The Right Loan

It is important that you do your market research thoroughly, as it will help you select the most suited financing option. With a variety of options now available for loans, one always has the privilege of negotiating rightly with the bank, thus reducing your interest rate and save yourself a lot of money.

But before selecting the right loan, just keep few important parameters in mind: how much loan are you eligible for, what will be the interest rates, how can I get the loan processed with minimal fee, what should be by EMI, what other expenses do I have.

Additionally, you always have the option to choose between the floating interest rate and the fixed interest rate.


Selecting The Right Location & Builder

While choosing the location, keep softer aspects such as connectivity, safety, proximity to markets, schools, public transport in mind. You should also be aware of the future developments planning in that area.

Also, before finalizing a property, do a thorough background check of the builder, as to how many projects he has done, what has been the delivery record, quality of construction, rate of appreciation of previously developed projects etc.

Home Inspection & Legal Due Diligence

Do a thorough inspection of the property you are planning to buy to spot defects, if any. There are many professionals who would do this on your behalf and provide you a detailed report on the current defects as well as the potential damages, if any.

Additionally, there are a lot of legal documents that are required to be verified without which the sale of property is incomplete. Make sure that these are verified and signed. These include Sale agreement, registration, encumbrance certificate etc.

Source: Magicbricks