Development Watch – Week #3 January ’23
Greater adoption of pre-fabricated materials in construction
There is greater emphasis on ensuring most construction related materials for road transport and highways are prefabricated. Except for those used in foundations for bridges. Pre-fabricated materials also generate lesser pollution, ensuring optimal use of other raw materials. Government efforts on de-carbonizing include alternative flex fuels, green highways, electric vehicles, airports powered by renewable energy and hydrogen cell technology. Central government has also allocated Rs. 2,000 Crores to encourage state governments to scrap old official vehicles. Vehicles more than 15 years which will be scrapped will provide tax concessions to individual owners.
Redevelopment projects on the rise in Mumbai
Developers like Mahindra Lifespaces are working on two adjacent housing societies in Santa Cruz suburb of Mumbai. Upon completion of due diligence, the developer and both the societies will execute definitive documents. The redevelopment project is projected to have a revenue of up to Rs. 500 Crores. These projects provide an avenue for new real estate development in fully built-out neighborhoods in Mumbai. Mumbai has little scope for new greenfield development since vacant land parcels are absent. As of date, MLDL has completed more than 10.77 million sq ft of residential space in Mumbai and 32.14 million sq ft in India
The government is also looking to expedite redevelopment of 11 dilapidated chawls in Mumbai. These are located on the 14-acres land owned by National Textile Mills. Ministry of textiles has also requested for converting 5 non-cessed chawls to cessed properties to allow timely maintenance by MHADA.
India’s tallest residential project in Mumbai to be revived
Shapoorji Pallonji Real Estate and investment firm PAG are to work together on reviving The Minerva, the tallest residential structure in India. It is a super-luxury residential project, located in South Mumbai’s Mahalaxmi area. SPRE will be looking after the branding, sales and , marketing of the project, while financing will be done by Indiabulls Housing Finance and Asia-Pacific focused firm PAG. Lokhandwala Kataria Constructions, the existing developer, will execute the project. The Minerva would have a saleable area of 1.2 million sq ft. It has 91 storeys and is 300 metres tall. It has a total of 372 apartments and has recevied Occupation Certificate (OC) from the civic authority up to the 51st habitable floor. Rehabilitation portion of the project is also approaching completion. Launched back in 2010, it was delayed due to lack of permission from authorities.
HNIs and UHNIs upbeat on real estate sector
More than 75% of HNIs and UHNIs are expecting real estate sector to perform well even during inflation. They expect real estate to do well over the next 2-3 years and are opting for it as a hedge against inflation. High rise apartments, farm houses and holiday homes are preferred by affluent investors. Commercial real estate with rent yield are also in demand. For HNIs, properties in the range of Rs. 4-10 Crores are in demand, while for UHNIs, luxury homes with more than Rs. 10 Crores.
Google to set up a 3.81 lakh sq ft data center in Navi Mumbai
Google has made an agreement to develop a data center spread over 3.81 lakh sq ft in Navi Mumbai through a long term lease of over 28 years. Amazon and Microsoft have already started setting up their hyperscale data centers in India. The government has also proposed new data centre policy aimed at simplifying rules in India. It will help provide necessary infrastructure and clearances in a time-bound manner. Data localization norms are also on the rise. Google’s affiliated company Raiden Infotech India will be paying a 10 year lease rental of $140 million or Rs. 1,144 Crores, based on prevailing exchange rates. There would be an annual rent escalation of 1.75%. Recently, Google Cloud also picked up a 10-year 4.64 lakh sq ft lease at Adani Data Center in Noida. The Mumbai data center lease has been inked with Amanthin Info Parks and MIDC (Maharashtra Industrial Development Corporation. Indian data center industry would have a capacity of 1,318 MW by end of 2024, requiring 7.8 million sq ft of real estate space.
Raising Rs. 8,000 Crores through privatization of airports
Civil Aviation Ministry is seeking to generate Rs. 20,000 Crores through monetization of assets. A list of 12 airports has been prepared for privatization. This includes Raipur, Jaipur, Vijayawada, Kolkata and Indore. This itself would help generate more than Rs. 8,000 Crores. India has 146 operational airports, and is aiming to have 200 operational airports in the coming years. India is looking at a strong v-shaped recovery in the aviation sector. It is now among top 50 countries with best aviation safety in latest ICAO rankings. It has risen to rank 48 from 102.
UAE’s COP-28 leadership team announced
UAE has appointed Sultan Ahmed Al Jaber as president of the COP28. It will be held at Expo City Dubai in November-December 2023. Mr. Al Jaber is the Minister of Industry and Advanced Technology in UAE. He has served as Special Envoy for Climate Change for two terms. He will develop the COP28 agenda, in partnership with UNFCCCs Executive Secretary and the Egyptian COP27 President.
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