News On Real Estate

Real estate market sees a drop in foreign investments

NEW DELHI: Indian real estate market, despite its opportunities, has seen a sharp drop in foreign investments over the past two years, and in future, global investors may be more cautious investing in markets that lack international standards, says Sean Tompkins, global chief executive officer of UK-based Royal Institution of Chartered Surveyors (RICS), a professional qualification and standard setting body for land, property and construction sectors.

The country’s real estate sector saw close to $20 billion in investment between 2006 and 2009 but only about $2-3 billion of that has seen an exit yet, after over six years of investment. India, he says, hasn’t really delivered since 2005 on the promise that it held as an investment destination and today most of the capital finding its way into Indian real estate is really domestic capital.

Investors of all types are a bit wary and cautious because of the global slowdown, and it’s critical to create the right conditions to make an investor more comfortable for investment.

“There will be an expectation that standards would rise and I believe that those countries that are able to provide safe and high standard environment in real estate will benefit from significant investment flows,” says Tompkins.

For a number of private equity investors who invested between 2006 and 2009, returns have been subpar from what they had hoped and been promised. Many expect to lose money because many projects have not taken off and many others are stuck in litigation with their investee companies.

Tompkins says India needs to change its mindset and look at real estate and construction as a proper profession like it is in the West if it has to come up to global standards.

“The biggest challenge for investors is that, though they love the attractiveness of markets such as Brazil, Russia, India and China, the difficulty they have is that there isn’t a profession to give them the advice or the standards to give them comfort.”

For India to be a major world economy with some great winning cities, Tompkins says it’s necessary to train people in the real estate and construction professions.

There is no shortage of capital flow globally, but what’s dictating the flow of money is professionalism and international standards, which India needs to improve if it were to sustain its massive growth in urbanisation, to the tune of 40%.

For Tompkins, India’s biggest challenge is urbanisation.

Those countries that are creating successful winning cities — where people want to live in, work in and invest in — are thinking about everything.

“But the problem with most governments is that they think in silos, so you will have one bit thinking about housing, one about infrastructure, one about finance, but all those need to come together, which is the challenge in most major developing countries. How do you plan for that, cause if you don’t, you might end up with big cities that don’t work,” he says. “You need to get it right on paper and policy and government has a massive role to play here.”

Then there’s the massive demand-supply mismatch of skilled manpower in real estate and construction.

According to an RICS survey, close to 3-3.5 million professionals are required annually in India, while our universities and colleges are producing only a million of them.

“In all, there is 82-86% skill gaps in India, which is a huge deterrent to growth,” says Tompkins.

Source:http://www.indianrealtynews.com/category/real-estate-developers

Real Estate News

Union Cabinet clears amendments to aid construction workers

New Delhi: Giving more teeth to two laws dealing with welfare of construction workers, the Union Cabinet today approved amendments which among other things eases some restrictions for availing benefits.

The amendments to the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and Building and Other Construction Workers' Welfare Cess Act, 1996 was cleared by the Cabinet at its meeting chaired by Prime Minister Manmohan Singh.
The Building and Other Construction Workers Related Laws (Amendment) Bill, 2012 is expected to be introduced in the Winter Session of Parliament.
The amendments would also facilitate speedy implementation of these Acts by the Central and the state governments, an official statement said.
According to the proposed amendment, the prerequisite condition of engagement for 90 days to get registered for enjoying benefits is proposed to be done away with.
Besides, to extend benefits to the workers who are engaged in building and construction work after

attaining the age of 60 years, this upper age limit criteria is also proposed to be removed.

The amendments also seeks to empower state governments to file complaints for any contravention of provisions.
The amendments also prescribed a time limit of 30 days for cess collecting authorities to deposit cess to the state building and other construction workers welfare board which is utilised for welfare of the workers.
The amendments also seeks to empower the central government to specify the maximum cost of construction in place of the present limit of Rs 10 lakh.
At present, workers can derive benefits in establishment where the cost of construction is more than Rs 10 lakhs.
The decision of the government for amendments in the Acts follows the recommendation of a task force examining the provisions of the Building and Other Construction Workers Act.
A Tripartite Central Advisory Committee under the Act had accepted the recommendations.

Source:http://www.financialexpress.com/news/union-cabinet-clears-amendments-to-aid-construction-workers/1025288/2