Morgan Stanley (NYSE:MS) Real Estate Investment may put money in India

http://thepointdaily.com/morgan-stanley-nysems-real-estate-investment-may-put-money-in-india/126372/

 Morgan Stanley (NYSE:MS) Real Estate Investment may put money in India
Posted on February 12th

Morgan Stanley (NYSE:MS) Real Estate Investing, is thinking on the lines of investing in a project aimed at building 1.6 million square feet of office space in Bandra Kurla Complex, which is a locality in Mumbai, two unidentified sources familiar with the situation briefed.

The Mumbai based company, Wadhwa Group, initiated work on the project. The project is going to build two towers that will be devoted to offices and it is expected to be completed by the end of 2014.

The deal is believed to be in the early stages right now. It will be the first investment by MSREI in an office development project in India, according to an anonymous source. Previously, the company put $850 million in Indian real estate that mostly included housing projects. The amount of $100 million to $125 million was diverted to Mumbai-based Sheth Developers. This information is obtained from a report from Reuters, which was publicized during December 2011.

Currently, MSREI and the Wadhwa Group are not willing to offer any comment on the topic, while in the light of information gathered by research firm Venture Intelligence, a majority of private investors are not willing to put their money in the Real Estate industry of India. The investment level in the industry remained at $1.95 billion in 2012, declining from 2007’s $9.8 billion.

In the last trading session, Morgan Stanley (NYSE:MS) stock traded at the beginning with a price of $23.21 and throughout the trading session climbed to a high of $23.47 and later, when day-trade ended, the stock finally slipped -0.17% to $23.28.

MS current year earnings per share experienced a decline of -103.32%, while its current quarter performance remained +41.26%. MS has 1.98 billion outstanding shares, among them 1.55 billion shares have been floated in the market exchange. MS stock institutional ownership remained 60.23% while insider ownership was 0.20%.

The stock is ahead of its 52week low +91.59% and is lagging behind its 52 week high price -1.94%. The Company’s beta coefficient was 1.60. Beta factor measures the amount of market risk associated with market trade.

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Real estate sector seeks lower finance costs, faster clearances

http://m.timesofindia.com/city/pune/Real-estate-sector-seeks-lower-finance-costs-faster-clearances/articleshow/18425646.cms

Real estate sector seeks lower finance costs, faster clearances - The Times of India on Mobile

PUNE: The country's real estate players are hoping that the finance minister's budget provisions, to be announced on February 28, will bring down the costs of finance for the construction sector, which they insist will play a major role in offering lower rates for their product.

Also on the real estate developers' wishlist is a sustained structure of governance for the sector and introduction of methods to reduce the time taken to obtain the permissions and clearances for a project. A delay in the completion of a project, mainly due to delayed clearances, always leads to cost escalation and higher prices for consumers, they argue.

Lalit Kumar Jain, national president of the Confederation of Real Estate Developers' Associations of India (Credai), said the finance minister should allow tax exemption for inputs used in construction of small houses, of under 60 sq m carpet area. Special housing zones on the lines of Special Economic Zones could also be created, with tax exemptions for constructing 45 sq m houses for low income groups and 30 sq m houses for the economically weaker sections, Jain said.

He said, "Widespread tax incentives can be leveraged to make the real estate sector the new growth engine of the economy...It is high time that the government took a pragmatic and practical look at the real estate sector and took steps that help the industry in particular and the economy in general." Interest rates for housing loans should be cut to 7.5%, he added.

Credai suggested that a Real Estate Investment Trust be formed and called for special rental housing projects under the affordable segment, treating the expenditure as capital investment for long-term capital gains, exemption from income tax, service tax, value added tax and stamp duty for rental housing. Even the rental income from these projects must be exempt from income tax as there are substantial indirect benefits, the apex body has said.

Anuj Puri, chairman and country head for real estate advisory company Jones Lang LaSalle India, said considering that the budget is expected to be a populist one ahead of the 2014 polls, addressing the compromised GDP and skyrocketing inflation must be given the highest priority.

Puri said the budget needs to increase infrastructure spending in urban areas with a view to unlock the value of neglected and hidden land assets in suburban and peripheral districts. This will enable a more holistic growth for the real estate markets in our over-burdened metros and allow the demand for housing to spread over a larger canvas. The increased demand in peripheral locations where infrastructure has made the real estate markets more viable will also help bring down prices in the central areas, he said.

"The country's real estate industry contributes approximately 5% to the GDP. Moreover, the real estate sector has grown significantly over the past decade, with tangible transformation in quality and business standards. However, due to lack of regulations and effective policies, the sector is experiencing many challenges. The budget must consider the fact that the Indian real estate sector generates countless jobs across its various verticals. By granting it industry status, the government would enable the sector to access debt-lending at better interest rates and reduced collateral values," Puri said.

The government should come up with simple and effective polices that will ease real estate development approval procedures. Obtaining the 57-odd permissions to begin construction of a project can take up to two years. During this time, the cost of acquisition or even just holding the land for projects goes up. Lack of single-window clearance mechanisms causes project delays, which prove to be expensive to both developers and end users, Puri added.

The firm's managing director (Pune) Sanjay Bajaj said the budget should provide the real estate sector with elaborate provisions for external commercial borrowings for low-cost housing, tangible tax relief for individuals and greater investment in infrastructure. "An amplification of concessions for low-cost housing loans would have a significant bearing on the Pune real estate market. Unlike Mumbai, budget housing is still a very real concept in this city. Incentivising the development and purchase of affordable housing can make a big difference here," Bajaj said.

Urban planners say CM's nod will benefit Pune

PUNE: Activists and urban planners in the city have said chief minister Prithviraj Chavan's approval of the reservation of biodiversity parks (BDP), would help to preserve the city's environment.

On Saturday, Chavan approved the reservation as recommended by the Jain committee in 12 of the 23 merged villages in the Pune Municipal Corporation (http://timesofindia.indiatimes.com/topic/Pune-Municipal-Corporation)

(PMC). Former mayor and

Rajya Sabha (http://timesofindia.indiatimes.com/topic/Rajya-Sabha) member Vandana Chavan said decision was a "gift to the future generation". She said BDPs would help the city while dealing with long-term environmental issues. "Global issues such as climate change and pollution are showing their impact on environment. It has become more important for us to conserve natural resources in such conditions," she said.

"The approval for the BDP reservation has given me immense joy," urban planner Anita Benninger-Gokhale (http://timesofindia.indiatimes.com/topic/Anita-Benninger-Gokhale) , said. "It was a long wait, but finally a good decision has been made. It is a relief for the citizens of Pune," she said.

Benninger-Gokhale said citizens will now have to fight to save the water bodies and other natural resources in and around the city. Satish Khot (http://timesofindia.indiatimes.com/topic/Satish-Khot)of the Pune National Society for Clean Cities termed the decision a victory of the people. "We citizens have managed to save our hills by winning this drawn out battle," he said.

"The citizens convinced the authorities that the green cover our hills provide is crucial for the survival of Pune as we know it," he said. The PMC had proposed the reservation as part of the development plan (DP) which was sent to the state government for its approval. The 978.54 hectare reservation is spread over seven hills in the 12 villages. This includes 124.45 hectare of government land and 853.09 hectare of privately owned land.

The government had appointed a committee headed by KB Jain dean of the faculty of doctoral studies, Centre for Environmental Planning and Technology, Ahmedabad, to study the proposal.

The main recommendations of the committee were to make the BDP reservations permanent by giving the land owners transfer of development rights (TDR) in lieu of their land. Those who hand over their land in the first year would be given additional TDR. Around 74 hectare land with old constructions would be excluded from the reservation, the press release issued by the state government said.

Budget 2014 wishlist: What India's real estate industry wants

http://mdaily.bhaskar.com/article/top-stories/4444/t/320/MON-budget-2014-wishlist-what-indias-real-estate-industry-wants-4163781-NOR.html

Budget 2014 wishlist: What India's real estate industry wants

By Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India Current Status The GDP for the current financial year is not likely to cross the 5.7-5.9% mark - the predicted 8% in GDP growth is highly unrealistic. We expect the budget to come up with some immediate and effective announcements to remedy the situation. In recent quarters, the Government and the RBI have been unable to curb the inflation to a more comfortable level of between 5-6%. Considering that the upcoming budget is expected to a populist one, given the Union election ahead in 2014, addressing the compromised GDP and skyrocketing inflation must be given highest priority. (Also read: Delhi real estate: NH8, NH24 shine; DLF, Vesta launch new projects) The macro-economic concerns are having a cascading effect on Indian real estate. Here are the considerations that the sector needs from the upcoming budget as well as in terms of overall enablement: Reduce High Cost Of Borrowing: Presently, interest rates charged by the banks to developers and home buyers are at an all-time peak and need to be brought down. A reduction in the base rate (rate below which no banks can lend to the corporates or industries) is necessary to help banks lower their lending rates. (Also read: Pre-budget hopes: 'Raise savings limit under 80C to Rs 3 lakh') The Government should address these concerns in the budget, and this should be followed through by RBI in terms of easing the repo rates and relaxing other policy instruments such as the CRR, SLR, etc. to inject liquidity into the system. This is essential if the Indian economy's key sectors such as manufacturing and real estate are to grow. The regulatory and monetary authorities need to bring down the housing loan rates to provide affordable housing to more cities and towns. The scope of the interest rate subsidy for loans towards affordable housing should be amplified and broadened to include a wider price band of budget housing to benefit home buyers, especially in lower income groups. Make Provisions For Special Residential Zones: The Government could seriously consider enacting provisions for Special Residential Zones (SRZs) to incentivise the growth of housing stock at targeted locations. Increase Infrastructure Allocations: The budget needs to increase infrastructure spending in urban areas with a view to unlocking the value of neglected and hidden land assets in suburban and peripheral districts. This will enable more holistic growth for the real estate markets in our over-burdened metros and allow the demand for housing to spread over a larger canvas. The increased demand in peripheral locations in which infrastructure has made the real estate markets there more viable will also help bring down prices in the central areas. Provide Real Estate With Industry Status: The country’s real estate industry contributes approximately 5% to the GDP. Moreover, the real estate sector has grown significantly over the past decade, with tangible transformation in quality and business standards. However, due to lack of regulations and effective policies, the sector is experiencing many challenges on its growth path. The budget must consider the fact that the Indian real estate sector generates countless jobs across its various verticals. By granting it industry status, the Government would enable the sector to access debt lending at better interest rates and reduced collateral values.

Take Steps To Provide Better Clarity In Land Titles: This is another policy hurdle which needs to be tackled by the Government. Across the country, land needs the benefit of legally documented ownership assigned to the right persons or entities. The lack of clarity on land titles shakes the confidence of investors, and is a serious hindrance to overall growth. The budget should make specific allocations towards regularizing and digitalizing land records. Provide More Adequate Sources Of Finance: Since the sector is not under the umbrella of any specific regulatory authority, financing has been an issue over a number of years of credit slowdown. What is required at the current time is the liberalization of finance for the real estate sector. The budget should enable a broader scope for external commercial borrowings for real estate and provide a general relaxation of financing norms. Take Steps To Moderate Rising Input Costs: The input prices for construction have skyrocketed in recent years, rising by more than 50% in the last two years alone. In addition, builders are faced with the increased costs of external and internal development charges, licenses and charges for change of land use from various departments. These factors have been directly responsible for rising real estate prices. The budget should make provisions for subsidized construction materials for low-to-mid-income housing, and rationalized license fees and other government levies. Unblock The Approvals Pipeline: In this budget, the Government should come up with simple and effective polices that will ease real estate development approval procedures. Obtaining the 57-odd permissions to begin construction of a project can take as much as two years. During this time, the cost of acquisition or even just holding the land for projects rises. Single-window clearances are the need of the hour, since the absence of such mechanisms causes project delays which prove to be expensive to both developers and end users.

Take Steps To Improve Investor Interest: REITs should be implemented so that small investors will get a chance to invest in real estate assets. The enactment of legislation on REITs to provide exit opportunities to real estate investors would be a real step in the right direction. Enact the Real Estate Regulatory Bill: The Government should once and for all finalize and implement the proposed Real Estate Regulatory bill, which is needed to bring rationality back to the sector. This draft bill, which is pending since 2009, aims to create a regulatory authority for the realty sector, ensure sale of immovable properties in an efficient and transparent manner, and to protect consumer interest. One key proposal of this bill is to set up a regulatory authority in each state. The sector looks forward to intentions in this regard finally translating into action. Implement GST: The Government avowed plans to introduce GST sooner rather than later need to be implemented. This will go a long way in streamlining the economy and providing stimulus to GDP growth. (Image: Gangtok at night, Sikkim; Source: Getty Images) Arun Gupta