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What real estate gained in Union Budget 2021? – ET RealEstate

Here is what real estate gained in Union Budget 2021 presented by Finance Minister Nirmala Sitharaman on February 1.

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What real estate gained in Union Budget 2021?NEW DELHI: This government sees ‘Housing for All’ and affordable housing as priority areas, said Finance Minister Nirmala Sitharaman while presenting Union Budget 2021-22. Real estate sector had high expectation from the Budget 2021, especially post the Covid-19 pandemic.

Ministry of Housing and Urban Affairs has been granted Rs 54,581 crore in the Budget 2021.

Here is what real estate gained in Union Budget 2021:

Increase in safe harbor limit for primary sale of residential units

In order to incentivise home buyers and real estate developers, it is proposed to increase safe harbour limit from 10% to 20% for the specified primary sale of residential units

Affordable Housing

In the July 2019 Budget, the government provided an additional deduction of interest, amounting to Rs 1.5 lakh, for loan taken to purchase an affordable house.

FM proposed to extend the eligibility of this deduction by one more year, to March 31, 2022. The additional deduction of Rs 1.5 lakh shall therefore be available for loans taken up till March 31, 2022, for the purchase of an affordable house.

Further, to keep up the supply of affordable houses, FM proposed that affordable housing projects can avail a tax holiday for one more year – till March 31, 2022.

To promote supply of Affordable Rental Housing for migrant workers, Sitharaman proposed to allow tax exemption for notified Affordable Rental Housing Projects.

REITs

Debt Financing of InVITs and REITs by Foreign Portfolio Investors will be enabled by making suitable amendments in the relevant legislations. This will further ease access of finance to InVITS and REITs thus augmenting funds for infrastructure and real estate sectors.

In the previous Budget, the government had abolished the Dividend Distribution Tax (DDT) in order to incentivise investment. Dividend was made taxable in the hands of shareholders. Now, in order to provide ease of compliance, FM proposed to make dividend payment to REIT/ InvIT exempt from TDS.

Further, as the amount of dividend income cannot be estimated correctly by the shareholders for paying advance tax, FM proposed to provide that advance tax liability on dividend income shall arise only after the declaration/payment of dividend. Also, for Foreign Portfolio Investors, FM proposed to enable deduction of tax on dividend income at lower treaty rate.

Infrastructure

A total of 702 km of conventional metro is operational and another 1,016 km of metro and RRTS is under construction in 27 cities. Two new technologies i.e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost with same experience, convenience and safety in Tier-2 cities and peripheral areas of Tier-1 cities.

Centre will provide funding to:

  • Kochi Metro Railway Phase-II of 11.5 km at a cost of Rs 1,957.05 crore
  • Chennai Metro Railway Phase-II of 118.9 km at a cost of Rs 63,246 crore
  • Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a cost of Rs 14,788 crore
  • Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of Rs 5,976 crore and Rs 2,092 crore respectively

Infrastructure needs long term debt financing. A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, FM will introduce a Bill to set up a DFI. Sitharaman provided a sum of Rs 20,000 crore to capitalise this institution. The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years time.

Stressed Asset Resolution

The high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books. An Asset Reconstruction Company and Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds and other potential investors for eventual value realization.

To ensure faster resolution of cases, NCLT framework will be strengthened, e-Courts system shall be implemented and alternate methods of debt resolution and special framework for MSMEs shall be introduced.

LED Lights

Custom duty has been increased on inputs and parts of LED lights or fixtures including LED Lamps from 7.5% to 10% and on solar lanterns or solar lamps from 5% to 15%

Construction workers

To further extend our efforts towards the unorganised labour force migrant workers particularly, FM proposed to launch a portal that will collect relevant information on gig, building, and construction-workers among others. This will help formulate Health, Housing, Skill, Insurance, Credit, and food schemes for migrant workers.

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In order to incentivise home buyers and real estate developers, it is proposed to increase safe harbour limit from 10% to 20% for the specified primary sale of residential units

Source: https://realty.economictimes.indiatimes.com/news/industry/what-real-estate-gained-in-union-budget-2021/80628374

Real Estate

Pandemic prompts European life sciences real estate rush

By Carolyn Cohn LONDON (Reuters) – London’s Francis Crick Institute was already a magnet for investors in the capital’s so-called Knowledge Quarter, b…

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By Carolyn Cohn

LONDON (Reuters) – London’s Francis Crick Institute was already a magnet for investors in the capital’s so-called Knowledge Quarter, but the coronavirus pandemic has lifted interest in offices and laboratories dedicated to life sciences to a new level.

Investors have been drawn into European real estate dedicated to life sciences, which spans sectors such as biomedical devices and pharmaceuticals, by an ageing population and strong academic research in the region.

But the COVID-19 pandemic has fast-forwarded the script.

“Life sciences have never been more under the spotlight because of what we’ve all had to endure,” Peter Ferrari, chief executive of real estate investor AshbyCapital, told Reuters.

In January, together with Montrose Land, AshbyCapital bought an Edwardian building near the Crick bio-medical research centre in the heart of the Knowledge Quarter life sciences hub.

The building, which should be fitted out for rental to life science tenants in 2024, was AshbyCapital’s first investment in the sector and Ferrari hopes it will be a starting point for taking on “one or two more” similar projects.

Investors say there is demand in both urban centres and out-of-town science parks in Britain and other parts of Europe to accommodate an industry which tends to be recession-proof.

Real estate money is looking for new avenues as retail property and offices face the challenge of people increasingly shopping and working from home, analysts and investors say.

Commercial real estate investment volumes in Europe totalled 277 billion euros ($333 billion) in 2020, down 17% from a year earlier as a result of the coronavirus pandemic, real estate broker CBRE says.

Although less than 1% of European real estate investment is in life sciences, a recent report from the Urban Land Institute shows, strong government and venture capital investment in the sector is encouraging piggy-backing by real estate investors.

And real estate broker JLL estimates that up to 15 billion pounds ($21 billion) has been allocated to British life sciences real estate, of which less than 10% has been deployed to date.

Glenn Crocker, head of UK life sciences at JLL, said it had been approached by 20 real estate developers and investors to discuss life sciences in January, following 100 conversations in 2020, reflecting the strength of interest.

Not every area is suitable for a life sciences centre, as the infrastructure of nearby universities, major hospitals and good housing or cultural activities is also needed.

“I am a little bit sceptical about the sudden interest,” Zachary Gauge, European real estate analyst at UBS, told a recent news briefing, adding that the specialist nature of life science buildings meant they could be difficult to trade.

GOLDEN TRIANGLE

Although Britain’s so-called Golden Triangle of life sciences centres in London, Oxford and Cambridge leads the way in Europe, areas such as Bio Science Park in the Dutch city of Leiden, which is home to Johnson & Johnson vaccine producer Janssen, is one of several major European ones.

Private equity giant Blackstone’s real estate life sciences investment in Britain, which is made through its $20 billion enterprise value portfolio company BioMed Realty, includes several science park buildings in Cambridge.

“The pandemic put the industry and its researchers in the forefront … There is extraordinary demand for talent and space,” Bill Kane, BioMed’s president of East Coast and UK markets, told Reuters.

Meanwhile, British insurance and investment group Legal & General last year invested 200 million pounds in Oxford University’s Life and Mind Building.

“Life science is derisked at the moment by the fact there is huge interest in the sector,” said Eleanor Jukes, senior investment manager at L&G, adding that real estate valuations had risen due to the “huge weight of capital” looking to buy.

L&G recently sold five buildings in a Cambridge science park after a fierce bidding war for a total 97 million pounds, 59% above valuation levels.

In addition to U.S. investors and Canadian pension funds, Middle Eastern money is also showing interest, said Ghada Sousou, CEO of real estate recruitment firm Sousou Partners.

Real estate demand is outstripping supply. In Cambridge, there are lab requirements of more than 400,000 square feet, and supply of less than 100,000, Sue Foxley, research director at real estate consultancy Bidwells, said.

(Cambridge Office & Labs – https://fingfx.thomsonreuters.com/gfx/mkt/jbyprwmoqve/Cambridgeoffice.png)

BUILDING HAZARDS

But the sector is not for the faint-hearted.

Life science buildings range from traditional offices and laboratories to “dry labs” – research offices with extra technology needs.

The buildings may have special requirements such as extra power supplies, arrangements for the safe disposal of hazards and higher than average ceilings.

“There’s an extra cost in that,” said Carl Potter, a managing director at real estate consultants Avison Young.

“That cost has to be reflected in rents.”

Prime office rents in King’s Cross, inside the Knowledge Quarter, are 83 pounds per square foot per annum compared with the City of London at 81 pounds and the Canary Wharf district at 51.50 pounds, according to the ULI report.

Investors and developers have to kit out buildings without necessarily knowing who their future tenants will be, and if there will be one or several.

Richard Fagg, development director at VINCI UK Developments, said this raised the question “will value be secured?”, adding that “strong conviction is needed”.

Developers have to be flexible so that buildings can be altered relatively easily. Industry sources say bespoke buildings can be hard to market to new tenants.

“Every commercial developer is interested in life science,” said Steven Charlton, principal managing director of architects Perkins&Will, adding that the practicalities can be a deterrent.

But Gauge at UBS said there was a risk the enthusiasm for life sciences real estate could be short-lived: “I’m worried about having a kneejerk reaction to COVID.”

($1 = 0.7233 pounds)

($1 = 0.8317 euros)

(Reporting by Carolyn Cohn; Editing by Alexander Smith)

Source: https://wsau.com/2021/04/20/pandemic-prompts-european-life-sciences-real-estate-rush/

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Real estate: Two big Fremont buildings are grabbed by veteran investor

Kennedy Wilson, a real estate firm, has bought two large Fremont office buildings, one at 47200 Bayside Parkway and the other at 3500 W. Warren Ave.

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FREMONT — Two big buildings in Fremont have been scooped up by a veteran real estate firm from Beverly Hills in a deal that suggests investors still hunger for properties in Silicon Valley.

Kennedy Wilson has bought two large Fremont office buildings, one at 47200 Bayside Parkway and the other at 3500 W. Warren Ave., according to documents filed on April 2 with the Alameda County Recorder’s Office.

TA Realty sold the buildings, which are about 0.7 miles apart, the public records show.

An affiliate of Kennedy Wilson paid $32.3 million for the buildings, according to the Alameda County property records.

Brokers Steven Golubchik, Edmund Najera, Darren Hollak, and Jack Phipps of Newmark, a commercial real estate firm, arranged the purchase.

The transaction was an all-cash deal, the county documents show.

3500 W. Warren Ave., a 61,800-square-foot office and research building in Fremont. //

The just-purchased office buildings are of a type that could appeal to companies that seek to ensure their employees have plenty of access to elbow room amid ongoing concerns about the coronavirus.

“There is lasting strength in low-rise, low-density flexible commercial spaces, particularly as tenants seek out lower density layouts and single-entry offices in preparation for more comfortable working environments in a post-COVID world,” said Mary Ricks, president of Kennedy Wilson.

47200 Bayside Parkway in Fremont, an office and research building totaling 53,700 square feet. //

Intuity Medical, a life science medical device company, has its headquarters in the West Warren Avenue building, which totals 61,800 square feet. Mercury Systems, a defense and aerospace firm, leases the Bayside Parkway building, which totals 53,700 square feet.

The two buildings together total 115,500 square feet and were marketed as Fremont Research Center.

“Fremont Research Center presented an investor with the opportunity to acquire an asset with stable in-place cash flow,” Newmark broker Najera said.

TA Realty sold the buildings, which are about 0.7 miles apart, the public records show.

Source: https://www.eastbaytimes.com/2021/04/07/real-estate-two-big-fremont-building-grabbed-veteran-investor-tech/

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Plans for big office buildings in downtown Sunnyvale push ahead

Two big office buildings proposed for downtown Sunnyvale have pushed closer to reality following final city approval of the project.

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SUNNYVALE — Two big office buildings proposed for downtown Sunnyvale have pushed closer to reality following final city approval of the project.

The buildings would be a key component in the CityLine Sunnyvale mixed-use development of offices, shops, restaurants, and homes in downtown Sunnyvale.

The Sunnyvale Planning Commission has approved a complex of two office buildings that together would total 500,000 square feet — enough space to potentially accommodate 2,500 workers. Each office building would total 250,000 square feet.

The office development would sprout on the site of a shuttered Macy’s department store at 200 W. Washington Ave. in downtown Sunnyvale.

CityLine Sunnyvale is being developed through a joint venture consisting of Sares Regis Group of Northern California and Hunter Properties.

Whole Foods and an AMC DINE-IN Sunnyvale 12 movie theater complex are the two key anchors of the first phase of CityLine Sunnyvale.

In January, city officials approved an adjacent 12-story, mixed-use project at 200 S. Taaffe St. that will include 479 homes and 30,000 square feet of retail and restaurant space.

“Having these office buildings approved soon after our nearby mixed-use project will allow us to develop both of these blocks simultaneously and deliver them in a similar time frame,” said Josh Rupert, director of development with Hunter Storm.

The first phase of the CityLine mixed-use development includes 198 residences that the project’s joint venture has already completed.

The second phase of the project will redevelop four blocks as part of the venture’s effort to dramatically revamp and revive downtown Sunnyvale.

The office buildings are large enough to accommodate a single major user such as a big tech company.

  • Gensler

    Elevated view of a downtown Sunnyvale office complex at 200 W. Washington Ave. that is part of the CityLine Sunnyvale mixed-use development, concept.

  • Gensler

    Office complex at 200 W. Washington Ave. in downtown Sunnyvale that is part of the CityLine Sunnyvale mixed-use development, concept. Two big office buildings proposed for downtown Sunnyvale have pushed closer to reality following final city approval of the project.

  • Gensler

    Plaza area between two office buildings at 200 W. Washington Ave. in downtown Sunnyvale, part of the CityLine Sunnyvale mixed-use development, concept.

In January, Salon Republic opened in a ground-floor retail space totaling 19,000 square feet at 200 W. McKinley Ave.

In recent weeks, City National Bank leased a space at 301 W. McKinley.

“Our lease with City National Bank, executed during a global pandemic, is a testament to the attraction of downtown Sunnyvale and its promising future,” said Deke Hunter, a managing executive with Hunter Storm, which is the development unit of Hunter Properties.

The bank is due to open before the end of this year.

“We’re making great progress with our long-term vision for the transformation of downtown Sunnyvale and are loving to watch this neighborhood grow as more projects are delivered each year,” Rupert said.

The office development would sprout on the site of a shuttered Macy’s department store at 200 W. Washington Ave. in downtown Sunnyvale.

Source: https://www.mercurynews.com/2021/03/30/big-office-building-downtown-sunnyvale-develop-tech-real-estate/

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