Indian property developer Kamal Khetan is in an unusual position. For the first time since the 2008-2009 global financial crisis, he is being inundated with offers to acquire land in Mumbai from distressed sellers.
“We feel that this is the time to do acquisitions,” Mr Khetan, chairman and managing director of luxury residential property developer Sunteck Realty, says.
Landowners “are coming at a very reasonable price because it's now the buyer's market, not the seller's market”.
The cracks started to show in 2018, when a crisis in the non-banking financial sector sapped liquidity for property companies. This was followed by the onset of the Covid-19 pandemic and now India's devastating second wave of coronavirus infections, which have combined to create a favourable environment for developers with strong balance sheets to buy up swathes of land.
Landowners – who in recent years were reluctant to give up their prized assets to developers – are now willing to sell. However, there are only a handful of developers in a position to buy, which means they are driving hard bargains.
The situation is pronounced in Mumbai, where land has long been scarce in the overpopulated financial capital.
But it is a trend found across many major cities in India, including the national capital of Delhi and the tech hub of Bangalore, analysts say.
“Definitely, the land prices have seen some kind of a correction in the last 12 months,” Piyush Gupta, managing director of capital markets and investment services for India at global real estate services company Colliers, says. “This is not only linked to Covid stress, but it's linked to the overall stress in the real estate and the non-banking sector.”
The turmoil in the real estate sector linked to stress among non-banking financial companies, also known as shadow lenders, forced many developers to exit the market as funds dried up. For years, the sector had been highly fragmented with smaller players that had been taking advantage of easy funding from the non-banking sector.
“Now, there are very few players who are active and who have the capabilities to acquire – both financial capabilities and operating capabilities – and develop large projects,” Mr Gupta says.
Land prices in the current market declined by about 15 per cent, but landowners are finding innovative ways to do deals by tying up with developers on projects, Mr Gupta says.
“Very few companies have a strong balance sheet or that kind of a pocket in this market to go and acquire land in the current situation, where the second wave is really bad in India,” Mr Khetan says, adding that land is being discounted by 20 to 25 per cent.
Mr Khetan's company, Sunteck Realty, last year snapped up 8 million to 9 million square feet of land in joint development projects with landowners, which are structured so owners receive a share of revenues from property sales.
“We are confident this year will be similar or better than last year” in terms of land acquisition, Mr Khetan says, adding his company will consider purchasing land parcels outright, as well as joint projects.
About 150km away in the city of Pune, Rohit Gera, managing director of Gera Developments, is also benefiting from landowners prepared to part with their holdings.
However, it is not only landowners who are selling – developers are also seeking to offload land to raise cash to pay off debts, Mr Gera says.
“The last thing a developer wants to sell is land, but now they are willing to do so,” Mr Gera says. “Normally, we'd be competing with these developers in order to try and buy the land.”
The board of Gera Developments “last year approved our highest ever capital outlay towards land acquisition for this year and my next two-year plan”, Mr Gera adds.
The developer is expecting to purchase 45 acres (18.2 hectares) of land this year, up from 12 acres in 2020.
At present, there is a lot of uncertainty in the market and that is rubbing off on the land prices as well
There are several factors that have played a role in the trend and "developers were buying land pretty indiscriminately for quite some time”, Mr Gera says.
In 2106, the government demonetised 500 and 1,000 rupee notes to clamp down on black money flows, while its real estate regulation act, which came into effect in 2017, also drove fly-by-night players out of the market.
The non-banking financial crisis then led to a tightening of credit, triggering financial distress among a number of developers and prompting further consolidation in the market, Mr Gera says. This led to opportunities for developers with strong balance sheets in a market now hit by a resurgence of Covid-19 cases.
Securing funding is not proving to be a challenge for his company and other major developers that have a solid track record, Mr Gera says.
“We have access to both funding on the debt side as well as funding on the private equity side,” Mr Gera adds.
However, the downside of the current environment is that the second wave of Covid-19 infections is impacting homebuyer demand, developers say.
This comes after the sector saw a strong rebound towards the end of last year as the spread of the virus eased and optimism improved on the economic outlook.
“At present, there is a lot of uncertainty in the market and that is rubbing off on the land prices as well,” says Aditya Kushwaha, chief executive and director at Axis Ecorp, a developer that specialises in building holiday homes in India. “As a result, some businesses are looking to exit at a reasonable margin. This is a trend that is being seen across the country as people have become a little cautious owing to the second wave.”
“[But] given the current climate and how things are shaping, we have been scouting for bargain deals in and around holiday destinations in North India.”
There are some areas in major cities where land prices have risen, experts say.
“While there have been some pockets where the land prices have come down and businesses are looking to make the most of it by bagging these bargain offers, things are not the same all across,” says Vinit Dungarwal, director at AMs Project Consultants. “Land prices have increased in some pockets with development potential.”
Despite the fact that developers are picking up cheaper land parcels, this may not necessarily translate into lower prices for homebuyers.
India's residential property market has already corrected and developers say they do not see much scope for prices to come down further despite the favourable land deals they are doing. This is partly because their costs, including labour and raw materials, are rising.
Mr Khetan remains optimistic about the outlook for demand for homes in India. He is expecting to see a spike in purchases following the second wave, as the work from home trend and the pandemic have prompted many people to prioritise home ownership.
He is also noticing a pick-up in interest from non-resident Indians who are returning home or want to have a house close to their family.
As a developer, “the market has not been good” for the past decade or so, Mr Khetan says.
But changes in market dynamics have aligned to create an opportunity for Sunteck to capitalise on, and the company does not want to miss out.
“We want to take this opportunity and grow our company the way we did, in fact, during the Lehman [2008 global financial] crisis,” Mr Khetan says.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
SPEC%20SHEET%3A%20APPLE%20IPAD%20PRO%20(12.9%22%2C%202022)
%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2012.9-inch%20Liquid%20Retina%20XDR%2C%202%2C732%20x%202%2C048%2C%20264ppi%2C%20wide%20colour%2C%20True%20Tone%2C%20ProMotion%2C%201%2C600%20nits%20max%2C%20Apple%20Pencil%20hover%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EChip%3A%3C%2Fstrong%3E%20Apple%20M2%2C%208-core%20CPU%2C%2010-core%20GPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%20Storage%20%E2%80%93%20128GB%2F256GB%2F512GB%20%2F%201TB%2F2TB%3B%20RAM%20%E2%80%93%208GB%2F16GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPlatform%3A%3C%2Fstrong%3E%20iPadOS%2016%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMain%20camera%3A%3C%2Fstrong%3E%20Dual%2012MP%20wide%20(f%2F1.8)%20%2B%2010MP%20ultra-wide%20(f%2F2.4)%2C%202x%20optical%2F5x%20digital%2C%20Smart%20HDR%204%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20ProRes%204K%20%40%2030fps%2C%204K%20%40%2024%2F25%2F30%2F60fps%2C%20full%20HD%20%40%2025%2F30%2F60fps%2C%20slo-mo%20%40%20120%2F240fps%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFront%20camera%3A%3C%2Fstrong%3E%20TrueDepth%2012MP%20ultra-wide%20(f%2F2.4)%2C%202x%2C%20Smart%20HDR%204%2C%20Centre%20Stage%2C%20Portrait%2C%20Animoji%2C%20Memoji%3B%20full%20HD%20%40%2025%2F30%2F60fps%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%20Four-speaker%20stereo%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBiometrics%3A%3C%2Fstrong%3E%20Face%20ID%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20USB-C%2C%20smart%20connector%20(for%20folio%2Fkeyboard)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%20Up%20to%2010%20hours%20on%20Wi-Fi%3B%20up%20to%20nine%20hours%20on%20cellular%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFinish%3A%3C%2Fstrong%3E%20Silver%2C%20space%20grey%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20iPad%2C%20USB-C-to-USB-C%20cable%2C%2020-watt%20power%20adapter%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20WiFi%20%E2%80%93%20Dh4%2C599%20(128GB)%20%2F%20Dh4%2C999%20(256GB)%20%2F%20Dh5%2C799%20(512GB)%20%2F%20Dh7%2C399%20(1TB)%20%2F%20Dh8%2C999%20(2TB)%3B%20cellular%20%E2%80%93%20Dh5%2C199%20%2F%20Dh5%2C599%20%2F%20Dh6%2C399%20%2F%20Dh7%2C999%20%2F%20Dh9%2C599%3C%2Fp%3E%0A
BUNDESLIGA FIXTURES
Friday (UAE kick-off times)
Cologne v Hoffenheim (11.30pm)
Saturday
Hertha Berlin v RB Leipzig (6.30pm)
Schalke v Fortuna Dusseldof (6.30pm)
Mainz v Union Berlin (6.30pm)
Paderborn v Augsburg (6.30pm)
Bayern Munich v Borussia Dortmund (9.30pm)
Sunday
Borussia Monchengladbach v Werder Bremen (4.30pm)
Wolfsburg v Bayer Leverkusen (6.30pm)
SC Freiburg v Eintracht Frankfurt (9on)
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
The Baghdad Clock
Shahad Al Rawi, Oneworld
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
