IDBI Federal Life acquires commercial space worth Rs. 111 crore in Lower Parel

In an out-and-out real estate deal, which is the largest so far this year, IDBI Federal Life Insurance Company has bought office space worth over Rs 111 crore at Marathon Futurex complex at Lower Parel in Mumbai, according to sources familiar with the development.

Marathon Realty is developing this eight lakh sq ft office building in three phases, of which two phases up to 26 floors have already been completed. IDBI Federal Life has acquired around 62,000 sq ft space spread over two floors -22nd and 23rd floors -of the 26-storey tower.

The deal works out to approximately Rs 18,000 per sq ft which is within the range of current property rates for outright transactions. Office property rates in Mumbai’s secondary business district of Lower Parel are in the range of Rs 18,000-20,000 per sq ft basis the profile and facilities offered in commercial complexes in the locality.

“The deal is complete and registered last week. This office space can accommodate a total of 450 employees,” said a source.  “We have acquired the property in line with its growth strategy and plan to start operating from the new office in a few months.”

The complex, with multi-level car park, also houses offices of Tata Group’s consulting firm Tata Strategic Management, HDFC, India subsidiary of Paris-based global cosmetics major L’Oreal, and the Consulate General of Israel. The commercial project has already completed two phases of planned development; and the third phase is expected to finish in the next two years, which will take the tower to 38th floor, making it one of the tallest commercial towers in India.

Image Credits : DNA

We all know that online shopping trend in India is getting viral and we Indians are not only buying TVs, Smartphone and Shoes online, but we all also doing some great things online such as; comparing and buying policies and home loans in online mode. After consumer shopped for worth Rs. 6 crore house on Snapdeal.com in the first half of the years, now Paisa Bazaar is grabbing the attention as this online destination for loans and credit cards has closed with record of Rs 5.68 crore home loan disbursal and till now its country’s largest online home loan disbursal.

However; the home loan disbursed by Housing Finance Development Corp for a 4 BHK flat in Mumbai, BKCRustomjee region. In our country its largest disbursal online till date as a Rs 5-crore disbursal for a mortgage loan made earlier. However; the total price of apartment was around Rs 9 crore. According to Naveen Kukreja, MD of Paisa Bazaar, “We are seeing a spike in high-ticket loan cases on our platform”.

About Paisa Bazaar:

The online portal, owned by Policy Bazaar has the backend support of investors such as; Temasek, Tiger Capital and Infoedge and they all has made disbursals of around Rs 250 crore in last one and half month, which is equal to Paytm’s Diwali sales from its e-tail business.

High-ticket cases currently constitute more than 15 percent on the overall home loan cases at the online portal of Paisa Bazaar. According to Kukreja, “Now we are realizing that high-net-worth individuals (HNIs) are becoming more valuable and comfortable while shopping online for loans. And in our conversations with them, they have communicated that we want to go deeper into the products and understand them first-hand. But at this point of time we are doing great with stage one, since they want  minimum intrusion while making their most important financial decisions, we expect more of them to turn online for all their personal finance needs”.

Apart from that the Rs 5 crore mortgage loan, which was closed on Paisa Bazaar at the first half in the years was also disbursed by HDFC to Murli Gnanavel, Chennai based individual against his commercial property in Coimbatore. According to Ajay Sachdewa, National head of Marketing at HDFC, “We are in the strategic tie-up with Paisa Bazaar and we are committed to help them while making online presence and leveraging the digital channel more effectively”.

ING Vysya bank merger with Kotak Mahindra bank

On January 3, 2015 all the employees and officers of ING Vysya Bank expressed their concerns over the issue of merger with concerns, as we all know that from April 1, 2015 ING Vysya Bank is going to merge with Kotak Mahindra Bank.

According to management of Kotak Mahindra Bank, “The employees of ING Vysya Bank would get the pension, but it will not be linked with dearness allowance”. Whereas; the management of ING Vysya Bank is happy on bi-partite negotiations through which the unions of ING Vysya Bank had entered regarding service conditions, but still the officials of Kotak Mahindra Bank are silent regarding commitment on the continuation of existing service and the different conditions on absorption into the new merged entity.

More the 4,000 officer and employees from ING Vysya Bank would be absorbed by Kotak Mahindra Bank in the rolls of the merged entity. As per the statement of Kotak Mahindra Bank management, “The employees of ING Vysya Bank would get the pension, but it will not be linked to dearness allowance”.

After this deal the Kotak Mahindra bank will become the fourth-largest private bank in India in terms of total business, whereas; the other three banks are ICICI Bank, HDFC Bank and Axis Bank in the order of ranks. The combined banking entity of ING Vysya Bank and Kotak Mahindra Bank will have a total network of 1,214 branches in all over the country.

If you say that one would be able to buy a property with mere 2 Lakhs a couple of years back or say even months back, no one would be able to believe. This money is enough for a stock broker to submerge a person in tips of investment or a bank to probably lay some foundation stones but later on it could take ages for one to actually get their hands on the property.

Real estate investment trusts (REIT):

SEBI has issued some final guidelines for real estate investment trust which will help any investor having 2 Lakhs to get a piece in the real estate market. So, there are no more reasons to become a laughing stock in various Realtor’s offices.

These are similar to mutual funds, the only difference being, the money collected from investors goes into property rather than stock market and various bonds. There has been lot of brain storming being done on this trust but the current union budget seems to have taken a major hurdle out in the form of taxation of the REITs.

Scopes of REITs:

 Past few months have seen a substantial decline in the real estate market and there were lot of concerned raised by the people in this industry, through the new guidelines, SEBI has been able to put all these issues at rest. So this has come as a boon for both investors and the real estate industry as it will increase the cash flow in the drought hit market. As per the Chairman of JLL India, Mr. Anuj Puri, a cash flow of nearly Rs 60000 to Rs 70,000 crores can be expected through conversion of half of the Grade A office to REITs.

Market Entry Barrier:

When it comes to investment in Metropolitan or Tier 1 cities, the minimum investment could be upto- Lakhs and as now due to SEBI’s guidelines it has been considerably brought down to Rs 2 Lakhs, inviting more number of real estate investors in the market. Now, the minimum investment could be expected to be lowered to even Rs 1 Lakhs in some of the secondary markets.  As per the CEO of HDFC bank, Mr. Mistry, this has given a ray of hope even to the middle class income individuals as they can now hope to invest in real estate.

The only problem seems to be that the real estate has no space of can take lot space in form of investment in the portfolios. There are certain income groups who say that this might have come at the right time but it can negatively impact the real estate market in the form of high property price. The main idea is to resolve the financial issues faced by the developers and the banks funding them.