Latest Real Estate News
New route to price rise
How will Metro Phase-III impact prices in the areas it links to? Vandana Ramnani does an analysis
Have you envied those living close to Metro stations? Did you bemoan your lot when friends got excited about the spiralling prices of their properties in areas getting linked to the Metro?
Well, despair not, for Phase III of the Metro project could bring a station close to your home if you are a resident of Vasant Vihar, South Extension, Punjabi Bagh (West), Shalimar Bagh, Jasola and even IP Extension.
Spanning 108 km, one line will run parallel to the Ring Road and connect east Delhi with south and west Delhi, and the other will run alongside the Outer Ring Road connecting Noida with south and west Delhi. The first corridor will run from Mukundpur to Yamuna Vihar, the second from Jankapuri West to Noida's Botanical Garden and the third from Central Secretariat to Kashmere Gate. The network includes the extension of the Gurgaon-Jahangirpuri line up to Badli and of the Noida-Dwarka line up to Najafgarh.
Analysing the market, one can foresee maximum appreciation in an area after the announcement of a corridor, with smaller price movements during construction and operation stages.
The Metro has continued to push up prices in areas it has reached. In established locations such as Vasant Vihar, Lajpat Nagar and Patparganj, where realty prices have already peaked, a conservative 5% to 15% increase seems likely.
When it comes to posh areas, Anil G Makhijani of Mak Realtors Pvt Ltd says, though residents of Vasant Vihar might not use public transport, there will always be indirect benefits for their staff and workers who travel to the area. The area will see an increase of 5% in capital values over and above the year-on-year increase of 10%.
Rentals, too, would appreciate by 25%. Vasant Enclave and DDA houses in Munirka area will also benefit, with rentals likely to appreciate by 50% and capital values by 25%.
Prices are also likely to go up in areas that were earlier located three to five kilometers away from the Metro route but are now getting new stations. Shalimar Bagh, (expected to be an interchange station in the third phase) is likely to see prices rise by 5% to 10% by May end, says Sunil K Arora of Meher Estates. Its nearest Metro link at present is the Netaji Subash Place station. The third phase is also going to be a very important link as it will practically cover 75% of the Ring Road and go a long way in taking the traffic load off the stretch.
However, areas that are relatively new and are still witnessing growth and development will see maximum appreciation. The Noida Authority has plans to extend the Metro to Greater Noida.
Metro construction will prompt several developers to put their projects on the fast track in the area. This will lead to at least 30% improvement in prices in the long term, says Arvind Singh, director, Lord Krishna Real Infra P Ltd.
Virgin areas are expected to benefit more than other areas. The mere announcement of an international airport near Mumbai led to a 15% price rise in one week in areas close by, adds Abhishek Kiran Gupta of Jones Lang LaSalle Meghraj.
Courtesy – HT Estates – Dt:- 16-04-2011
Draft master Plan finalised for Yamuna Expressway development
First phase will develop area up to Jevar in Gautam Budh Nagar; plan to be put up for approval next month
THE Yamuna Expressway Industrial Development Authority (YEIDA), responsible for charting the development of the region around the Yamuna Expressway that will connect Greater Noida with Agra, has finalised a draft phase-I masterplan for the project, paving the way for major expansion.
The region is emerging as a potential destination for real estate investments, with plans for residential, industrial, institutional and commercial areas, as well as green belts and parks, recreational greens, a proposed airport and an aviation hub. According to a senior YEIDA official, most of the land that falls under the Yamuna Authority has already been registered and acquired by investors. A large part of the revenue generated by registration comes from residential areas under the authority, the official added.
According to the master plan, the authority will develop the area up to Jevar in Gautam Budh Nagar in phase-I, which would include 584 sq km of Gautam Budh Nagar and Bulandshahr. The master plan will be put before the board of directors for approval in May. In phase II, the master plan will cover the area till Agra.
For residential sectors, the connecting roads will be 60-m wide, while in Greater Noida, the road's width will be 24 m. The roads connecting YEIDA sectors with Greater Noida and Noida will be 130 meter wide, officials said. "We have taken into consideration that roads within the residential sectors should not be less than 12 meters wide. In Greater Noida, the minimum width of the road is 9 meters," informed a senior official. To connect the sectors with adjoining regions such as Khurja of Bulandshahr and Palwal of Haryana, the authority has planned a 120-m wide road.
According to officials, approximately 334 villages of Gautam Budh Nagar, Bulandshahr, Aligarh, Mahamaya Nagar (Hatras), Mathura and Agra are notified under the YEIDA.
The Yamuna Expressway lies between vital traffic corridors such as National Highway-91, which connects Delhi with Kanpur. "The Yamuna Expressway will be the lifeline in the regions adjoining it. The area will be developed as mega-cities with modern amenities," stated the official.
The master plan for phase-I also plans to connect the region with other regions through other expressways like the Eastern Peripheral Expressway and the Ganga Expressway. A 130-m wide railroad corridor connecting it with Khurja in Bulandshahr and Palwal in Haryana has been planned. The master plan also proposes a new expressway connecting it with Khurja and Palwal.
An area of 10,000 hectare has been notified for proposed the airport and aviation hub. The plan also envisages 25 residential sectors for the region, all of which have been earmarked in the area near Greater Noida. "After Greater Noida gets filled, the population will migrate to the YEIDA's residential units. After development of Greater Noida, the next sought after region will be the Yamuna Expressway sectors," added Mohinder Singh, chairman of YEIDA.
The authority has allocated more than 20 sectors for commercial development. "Major commercial establishments have been planned in sector-14 A, 5, 12 D and 4 A. A Sports city has been planned in sector 25, whereas an inter-state bus terminus and a transport nagar have been planned in sector-23 C and 23 D," said the official.
Courtesy – The Indian Express – Dt:- 15-04-2011
|Cabinet Clears Metro Phase III
|EXPANSION Work to begin after GoM clearance
Delhi Metro's further expansion is just one step away. Delhi cabinet on Monday gave its approval to construct three new lines and extend the existing two lines in the capital.
“The proposal will now be sent to the empowered group of ministers. Once cleared in the GoM, Delhi Metro will be able to start construction on these sections,” a senior Delhi government official said.
The proposed expansion would span 108-kilometres and cost about Rs.30, 000 crore.
Delhi Metro Rail Corporation (DMRC) constructed three lines in Phase 1 spanning 65 kilometers and six corridors in phase 2 spanning 125 kilometers. With the addition of 108 km in phase 3, the total metro network in Delhi and NCR would go up to 300 kilometers.
Of the three new corridors, the Delhi Metro Rail Corporation will take up in phase 3, one will run parallel to the Ring Road and connect east Delhi with south Delhi and west Delhi and the other would run parallel to outer Ring Road connecting Noida with South Delhi and West Delhi.
Incidentally, the Yamuna Vihar-Mukundpur line would also be the longest metro corridor spanning 56 kilometers.
“With these two lines, we have tried to create two rings of metro in Delhi. We will now create grids and connect these metro lines with residential colonies with buses and paratransit like auto-rickshaws,“ said a senior transport department official.
The other three lines cleared by the Delhi Cabinet include a new line from Central Secretariat to Kashmere Gate that would run via Mandi House, ITO, Darya Ganj and Red Fort.
This new section will not only benefit a large number of people working in offices at Indraprastha Estate but will also help decongest the existing Kashmere Gate-Central Secretariat line, officials said.
The proposed phase 3 network also includes the extension of Gurgaon-Jehangirpuri line up to Badli in north Delhi and Noida-Dwarka line up to Najafgarh.
The Centre has allotted Rs. 1, 351 crore as budgetary support for it for Phase 3 in 2011-2012.
The Delhi Metro Rail Corporation is likely to get about 40% of the total cost of the project from a Japanese agency as soft loan.
Courtesy: Hindustan Times – Dt-12-04-2011
|Metro phase-III approved by Delhi Govt
Courtesy: Nav Bharat Times - 12th April, 2011
|AAI to develop city side in 10 airports
|Airports authority of India will take up commercial development on the city side at 10 airports of the country through public private partnership (PPP) model. “Airports Authority of India (AAI) is in the process of taking up commercial development in the city side through PPP at 10 airports, “the aviation ministry’s outcomes budget for 2011-12 said. These airports are: Ahemdabad, Kolkata, Jaipur, Lucknow, Amritsar, Indore, Vishakhapatnam, Hyderabad, Guwahati and Bhubaneswar. The city side development job will include setting up of hotels, food courts, car parking and so on. The maiden initiative by the AAI is likely to bring the dichotomy between the swanky modern airports and the shabby entrances to them to an end. “The city side development is being taken up by land lease mode for 30 years (extendable by another 30 years) with the approval of the competent authority, “the note said
Courtesy: Economic Times - 23rd march, 2011
|Property dealers stage protest, threaten to go on hunger strike today
|Faridabad: The rise in circles rates evoked sharp reaction in faridabad with property dealers and some political parties staging protests at the mini secretariat in sector- 12 on Tuesday.
The property dealers apprehend that massive hike (about two to five times from the previous rates) in circles rates will not only affect the demand but would also adversely affect the revenue generation for the state.
“We started the protest on Monday and it will continue till the government revokes circle rates announced a few days ago, “said Baljeet Singh, president, faridbad estates Agents Welfare Association (FEAWA).
“ In order to intensify our agitation, we have decided to go on a hunger strike from Wednesdy, “Singh added.
The Bhartiya Janata party (BJP) activists under the leadership of Haryana BJP chief Krishenpal Gujjar also held protest demonstration against the hike in circle rates. “We warn the state government to immediately revoke the circle rates otherwise BJP will be compelled to intensify agitation, “said Ajay Gaur, the party president for Faridabad.
Justify the hike, Faridabad district collector Praveen Kumar said, “Hiking circles rates is one of the ways of generating revenue for the state.” Kumar also added, “The hike is aimed at moving closer to market rates. However, we are open for discussion on the issue.”
The hike in circle rates have also adversely affected in the number of property registrations that are done every day. “On Monday, only a few registrations took place and about 30 to 45 registrations tok place Tuesday,” the official sources said.
Before the hike, around 150 to 200 property registrations were done every day at the tehsil office in Faridabad.
Courtesy: Economic Times - 23rd March, 2011
|DDA housing scheme results by mid- April
|New Delhi: The DDA is going to announce the names of successful applicants of its latest housing scheme by mid April. On November 25, Delhi Development its biggest housing scheme till date, offering 16,000.
The draw of lots for selecting the lucky applicants will take place sometime in mid- April.
Out of all the applicants those, who have been found eligible for the draw of lots number approximately 7.4 lakh.
The name and the other details of the eligible candidates will be put on the DDA website www.dda.org.in and the applicants can check if all the details are accurate.
The list will be put up tentatively between March 29 to April 4.
“If there are any wrong details in the list, the applicants can get it rectified”, said Neemo Dhar, spokesperson Delhi Development Authority.
“After the corrections are done, a new list will be again announced,” she said.
The scheme was kept open from November 25 to December 24 and DDA had said then that the draw will be held within four months after the last day of closure.
Keeping its promise, the authority expects to hold the draw in the second or third week of April.
The flats on offers are located in areas such as Vasant Kunj, Mukherjee Nagar, Motoa kahan, jasola, Dwarka, Rohini, Narela, Jaffarabad, Kundli and Gharoli.
There is a mix of one bedroom, two bedroom and three bedrooms houses and the prices range from `1.12 crore.re
Courtesy: Economic Times - 23rd March, 2011
|Transfer of property in society
|A housing society is a society set up provides its members with open plots to build houses, readymade houses or flats, or to provide its member with common amenities and services. Society means a co-operative society registered, or deemed to be registered, under the Society Registration Act. A member of a housing society is a person joining in an application for the registration of a co-operative society which is subsequently registered, or a person duly admitted to membership after registration, and includes a nominal, associate member is a member who jointly holds a share in the society with others, but whose name does not stand first I the share certificate.
A member waning to transfer his shares and interest in the capital or property of a society should give 15 days notice of his intensions to do so to the secretary of the society on the proposed form, along with the consent of the proposed transferee, also on the prescribed form. On receipt of the notice , the secretary of the society will place it before the meeting of the committee, held next after the receipt of the notice, pointing out to whether the member is prima facie eligible to transfer his shares and interest in the capital or property of the society.
In event of ineligibility of the member to transfer his shares and interest in the capital or property of the society, the committee will direct the secretary to inform the member accordingly within three days of the decision of the committee. If the committee is satisfied that the member is prima facie eligible to transfer his shares and interest in the capital or property of the society, the committee will direct the secretary to inform the member accordingly.
Procedure to be followed by the member
Submit an application for transfer of his shares and interest in the capital property of the society, on the prescribed form, along with the share certificate. Submit an application for membership of the proposed transferee on the prescribed form. Give valid reasons for the proposed transfer Discharge all the liabilities of the society pay the transfer fee Remit entrance fee payable by the proposed transferee. Pay the premium at a rate to be fixed by the general body. This will not apply to transfer of shares and interest of the transferor in the capital or property of a society to a member of his family, his nominee or to his legal representative. Submit a no objection certificate as required under any law. The managing committee or the general body will not refuse an application for admission to membership or transfer of shares and interest in the capital or property of a society except on the grounds of non- compliance of the provisions of the Act, the rules and byelaws of the society or any other law or order is issued by the government.
Courtesy: Economic Times - 25th March,2011
|SECURING NRIS PROPERTIES
The government must do more to safeguard the properties of NRIs in India and laws must be made stringent to deal with land-grabbers who usurp their assets, says VIVEK SHUKLA
Recently, there was shocking news in a leading daily which highlighted the plight of a Zambia based teacher whose house was grabbed by his sibling.
The case pertained to a Meerut-born teacher who was settled in Zambia for several years and had purchased a house in the name of his mother. A couple of month after he returned to Zambia, he got a message from a friend informing him that there was a flurry of activity in his new house. A new floor was apparently being constructed over his house, without his knowledge to boot. When the teacher inquired of his mother, she told him that his younger brother was building the second floor. And one can imagine the shock of the teacher
over this news. But he was helpless to take any remedial measures.
According to Arun Mohan, a noted lawyer specializing in the realty sector, succession and ownership matters: "It is advisable that they [NRIs] ask more than one friend or relative to take care of their property. If it is a house, a nameplate engraved on the wall would go a long way in protecting the property."
We all know that a person residing outside India can hold immovable property in India acquired by way of inheritance from a person resident in India. There are thousands of properties that NRIs inherit and which are not attended properly in India. It is really a problem area as a large number of NRIs complain during Pravasi Bharatiya Divas (PBD) sammelans that efforts should be made so that such properties are guarded from dubious people who go all out to grab them with the help of strongmen.
Top government officials routinely assure NRIs that their grievances would be addressed - and the whole matter is forgotten once the PBDs are over. According to Arun Mohan, "Shady people make a survey of properties which are lying unattended and on which taxes are not being paid. Such properties are more likely to be grabbed by unscrupulous people."
"It is not a matter that is only considered in respect of wealthy NRIs. There is a great need to make our laws more stringent so that nobody dare try to grab properties of anybody through forged documents or through other illegal means, "Devinder Gupta, head of Century 21 India says.
Santokh Chawla, a Dubai-based NRI with interests in amusement park business, says: "I can tell you from my own experience that while the government asks NRIs to invest in India in a big way,they do precious little to safeguard the properties of NRIs, who remain out of India for many years. I have seen that people encroach upon the land or properties of NRIs as they know nothing would happen to them. The cumbersome process of our law is such that it takes long to get justice even if you live in the country. If you live away from it, then only god can help your cause."
"I feel that if we make our laws stringent with respect to inheritance of properties, many more NRIs would invest in the realty sector. Many of them fear investing here as they always fear that somebody would grab their properties in their absence, "Alimuddin Rafi Ahmed says.
Legal experts say that if NRIs inherit property in India, they must take proper care of those properties. One has to go for proper legal documentation process. They must also pay the municipal and other taxes through cheques and photocopies of those should be kept in a safe place. Moreover, one should not give wide power of attorney with unlimited powers to friends or even relatives.If a power of attorney has to be given,it could be for a specific purpose of maintenance and protection of the property.It should not grant the power to sell, nor agree to sell.
However, Chandrasekhar Tiwari, an expert on NRI matters, said that it has become a habit of NRIs to criticize anything and everything related to their own country."They have to understand that if they do not look after their own property on a regular basis, who else would take care of that. As and when they come here they slam the Indian system as though it were a clockwork world where they currently reside."All said and done, there is a need to address the genuine concerns and issues of NRIs. After all, they are Indians and invest here.
Courtesy – Times property – Dt – 25-12-2010
|CONDITIONS FOR TRANSFER OF PROPERTY
ASHISH GUPTA explains what transfer of property means
The Transfer of Property Act 1882 contains specific provisions regarding what constitutes transfer and the conditions attached to it. According to the Act, transfer of property means,' an act by which a living person conveys property to one or more other living persons, or, himself and one or more other living persons'. The living person may include an individual, company or association, or body of individuals.
What transfer of property means.
Every person who is competent to contract is competent to transfer property. The transfer may be in whole or in part. He should be entitled to the transferable property, or authorized to dispose off a transferable property which is not his own. The right may be either absolute or conditional. The property may be movable or immovable, present or future. Such transfer can be made orally, unless a transfer in writing is specifically required under any law.
A transfer of property passes forthwith to the transferee, all the interest which the transferor is then capable of passing in the property, unless a different intention is expressed or implied. In case the property is transferred subject to the condition which absolutely restrains the transferee from parting with or disposing off his interest in the property, the condition is void. The only exception is in the case of a lease where the condition is for the benefit of the lessor or those claiming under him. Generally, only a person having interest in a property is authorized to transfer his interest in it and can pass on proper title to other person. Under the Transfer of Property Act, property of any kind may be transferred.
A person insisting on no transferability must prove the existence of some law or custom which restricts the right to transfer. The owner of a property may transfer it unless there is some legal restriction preventing the transfer.
However, in some cases there
may be transfer of property by
an unauthorized person who subsequently acquires interest in such property.
According to the Transfer of Property Act, in case a person either fraudulently or erroneously represents that he is authorized to transfer certain immovable property and does some acts to transfer such property for a consideration; such a transfer will continue to operate in future. It will operate on any interest which the transferor may acquire in the property. This will be at the option of the transferee. This can be done during the time during which the contract of transfer exists. According to this rule, the rights of a bona fide transferee, who has no notice of the earlier transfer or of the option, are protected. This rule embodies the rule of estoppels, that is, a person who makes a representation cannot later on go against it.
Rights of transferee
The rights of a transferee will not be adversely affected, provided, he acted in good faith, the property was acquired for consideration, and the transferee had acted without notice of the defect in title of the transferor.
These conditions must be satisfied:
There must be as representation by the transferor that he has authority to transfer the property. The representation should be either fraudulent or erroneous
The transferee must act on the representation in good faith
The transfer should be done for a consideration
The transferor should subsequently acquire some interest in that property which he had agreed to transfer
The transferee may have the option to acquire the interest which the transferor subsequently acquires. The exercise of option must be during the period of continuation of the contract and not afterwards
When all these conditions exist the transferee becomes entitled to the interest which is subsequently acquired by the transferor.
Courtesy – Times property – Dt- 25-12-2010
|DO NOT PARK HERE !
The rising numbers of vehicles in Chennai has made multi-level parking a popular way of dealing with parking pile-ups. But does the implementation of this facility come with strings attached JUDE SANNITH S reports
Chennai has had its share of space issues in the recent past. In addition to the undisputable fact that the city is growing in terms of industrial establishments, vehicular movement and the number of vehicles, a parameter that has always stayed constant is availability of space. The records of the Department of Transport indicate that 20.70 lakh new vehicles are added onto the city's roads every year.
This situation might just get worse, with the period between April and September 2010 seeing the number of vehicles rise by 1.5 lakh; in October 2010 alone, one million bikes were sold. These figures raise questions about parking requirements and the future availability of space."Multi-level car parking is certainly the way to go, "asserts M M Meyyappan, proprietor of a city-based construction company."With the number of establishments mushrooming in areas in and around the city, lack of parking space can only mean that we begin constructing multi-layered car parking facilities for our buildings, "he adds. But, things are easier said than done. For instance, Chennai Metropolitan Development Authority (CMDA) laws state that existing buildings are not allowed the luxury of multi-level car parking - something most supporters of multi-level parking facilities oppose.
The problem is not restricted to laws that concern multi-level parking. The city has been reluctant to accept the very idea of multi-level parking."There were several plans to bring about multi-level parking in at least ten areas in the city, two of these being Greenways Road and Parrys, "says T Raj kumar, vice-president, Unipolar Consultancy, a finance consultancy firm, "However, most government establishments were reluctant to accept this proposal."For its part, the CMDA, though, seems optimistic about multi-level parking and its implementation."The Government has initiated plans to set up multilevel parking slots at five locations in the sites owned by government departments," says Susan Mathew, vice-chairperson, CMDA, "The CMDA has prepared the DFR (Detailed Feasibility Report) /DPR (Detailed Project Report ) for all of these locations. It is now up to the land-owning agencies, which have been entrusted with the responsibility, to implement the proposals."
What seems to interest the CMDA more is meeting travel demand and increasing the fleet size of the Metropolitan Transport Corporation and extension of Mass Rapid Transit System lines."We would like to implement Travel Demand Management (TDM) measures," says Susan," Many developed cities like London, Singapore, and Hong Kong have managed to keep the unbridled growth of vehicles and their usage in check."
MULTI-LEVEL PARKING SYSTEMS MAKE THEIR WAY INTO THE CITY
Talking about the viability of multi-level car parks, G R K Reddy, chairman and managing director of a realty firm, says, "Multi-level car parks (or any other similar system) are only temporary measures. These cannot solve the problem.
What we need to consider are integrated solutions for the city; these will include a range of public transportation options, such as the Bus Rapid Transport System (BRTS) and designated cycling and pedestrian lanes.
Given the fact that families own more than a car, we cannot provide enough parking space within each project. The multi-level car park (which is being constructed in accordance with the Chennai Corporation's requirements at Wallace Garden, Nungambakkam) will provide at least 267 ECS (Equal Car Spaces),over a total built-up area of 76,044 sq ft. The project is expected to cost about Rs 33 crores."
AUTOMATED CAR PARKING SYSTEM IN A RESIDENTIAL APARTMENT COMPLEXES
Milind Shankar, vice-president (Technical) of a realty firm, explains the shift to automated multi-level car parking solutions, "Earlier (even a decade ago),it was quite sufficient if we provided a single car parking space to each apartment unit. Today however, we're looking at a minimum of two cars (in some high-end residential units that might even increase to three) per apartment. The most obvious issue we then have is a lack of parking space.
There is only so much space available around the building and there are only so many basement levels we can build. One solution could be to allow developers to extend basement levels beyond the building's footprint, as they do in Bangalore.
However, until the Chennai Metropolitan Development Authority (CMDA) permits it, we must either adjust or switch to multi-level car parks. A regular car park requires approximately 200-250 sq ft per car; a mechanical park needs only a maximum of 160 sq ft and you're going vertical, so in that same 160 sq ft you can park three or four cars. For Landmark Vertical, we will have 82 apartments and projected parking requirements for 72 cars. About 54 of those 72 spaces will be met by a four-storey (two basement, two above-ground) automated multilevel car park."
Courtesy – Times property – Dt – 25-12-2010
|INTEREST QUALIFIES FOR I-T DEDUCTION
ASHISH GUPTA outlines some conditions to be met to qualify for a deduction of up to Rs 1.5 lakhs a year on interest paid towards a home loan
Interest on borrowed capital is allowed as a deduction while computing income or loss under the head Income from House Property. The relevant provisions are contained under Section 24 of the Income Tax Act.
In the case of a self-occupied house, a normal deduction of Rs 30,000 is allowed towards interest on borrowed capital. However, a deduction on account of interest up to a maximum limit of Rs 1.5 lakhs is available in case the loan has been taken on or after April 1, 1999.
The loan must have been taken to construct or acquire a house. In addition,t he construction or acquisition of the residential unit with the loan should have been completed within three years from the end of the financial year in which capital has been borrowed. The higher deduction is not allowed towards interest on capital borrowed for repairs or renovation of an existing house.
In order to claim the higher deduction you should furnish a certificate from the bank to which the interest is payable. It should specify the amount of interest payable. The loan should be for the construction or acquisition of a house.
The essential conditions necessary to avail the higher deduction of Rs.1.5 lakhs are:
The amount must have been borrowed on or after April 1, 1999
The acquisition or construction of a house must have been completed within three years from the end of the financial year in which the amount was borrowed
There is no stipulation regarding the date of commencement of construction. Consequently, the construction of the house could have commenced before April 1, 1999, but, as long as its construction or acquisition is completed within three years from the end of the financial year when the capital was borrowed, the higher deduction will be available.
It should also be noted that there is no stipulation regarding the construction or acquisition of a residential unit being entirely financed by capital borrowed on or after April 1, 1999.A loan taken prior to April 1, 1999 will carry deduction of interest up to Rs 30,000 only. However, in any case, the total amount of deduction on interest on borrowed capital will not exceed Rs.1.5 lakhs in a year.
The interest is deductible in five equal installments commencing from the previous year in which the house has been acquired or constructed. The first instilment is deductible in the year in which the construction of the property is completed or it is acquired, and the balance four installments in the four subsequent years.
The interest is allowed as a deduction on accrual basis - on due basis, even if it has not actually been paid during the year. The essential condition is that the assesses should borrow the money, and the interest should be payable on the borrowed capital. The money can be borrowed for construction of property, acquisition of property, repair or reconstruction of property.
Courtesy – Times property – Dt – 25-12-2010
|MAKE THE MOST OF TAX SOPS
A prudent investor can save considerably on the income tax payable on returns from investments in real estate. V NAGARAJAN elaborates
An investment in real estate has several inherent advantages due to a combination of factors. While the government is struggling to bridge the demand-supply gap, it has to encourage both institutional and individual investments in real estate to boost the housing stock. There are millions of people who cannot afford homes and so the government has extended fiscal sops to encourage the supply of rental housing stock.
A prudent investor in real estate can save up to 100 percent of income tax payable in most cases - related to real estate buying and selling - if he resorts to proper tax planning.
One of the effective ways of reducing tax liability is through co ownership. It is possible to cut down the rate of income tax in respect of 'income from house property' if the property is bought by co-owners.
Assessment of co-owners
If two or more persons jointly own a property, the rental income received is not subject to tax as 'association of persons' but is clearly assessed to the different co-owners. A pre-requisite is that the co-owners' respective shares are clearly defined and ascertainable, in which case, it will be computed in accordance with the provisions of Sections 22 to 25 of the Income Tax Act.
A significant factor is that a co owner must bring in his separate funds to buy the property. In the event of substantial funds not being available for a property with a co-owner, he can take a loan. The rate of interest can be mutually agreed upon between the parties.
However, the maximum interest on a loan that is allowed as a deduction is Rs 1.5 lakhs, resulting in a tax saving of up to Rs 45,000 per individual.
How it works out
Just to cite an example, if a person gets a rental income of Rs 4.6 lakhs from a property, the rental income in excess of Rs 2.5 lakhs is subject to the highest slab of 30 percent income tax. If the same property had been bought by co-owners, each co-owner's obligation is reduced to Rs 2.3 lakhs, in which case, he would be required to pay income tax at 20 percent.
Similarly, if the investment is made with the intention of renting it out, it is better to buy in the names of family members whose incomes are low in order to minimize the tax liability.
Minor as co-owner
There are certain ground rules while buying property as co-owners. The percentage of ownership of each co-owner should be clearly defined in the purchase deed And each co owner must invest his share in the property. There is no limit to the number of co owners for a property.
In the case of joint purchase of property with a minor child, the law provides that the income, if any, arising to the minor as a result of rent from the joint property, will be clubbed with the income of the father or mother - whoever has the higher income.
As far as wealth tax is concerned; one residential house or a portion of a residential house is completely exempt without any upper limit. If the property is let out for a minimum period of 300 days in a calendar year, you can avoid the payment of wealth tax. In the case of co-owners, each of the co-owners will be in a position to avail wealth tax exemption in respect of the portion of the house owned by him.
Pro rata ownership
There are instances where some, while investing in immovable property, simply add their relatives' names in the conveyance deed as co owners without mention of investments on pro rata basis. The second person mentioned in the deed will not get any benefit by way of separate income tax assessment on rental income from the property or separate wealth tax exemption on the property.
It is therefore essential to ensure that purchase of any property is effected through contributions made by different purchasers on a pro rata basis of their ownership in the property.
Carry forward 'loss from property
A significant development is the provision to carry forward any loss incurred under the head 'income from house property'. If a loss cannot be set-off against any income of the same year under any other head, it can be carried forward for the next eight assessment years, to be set-off against any income from the house.
While selling a property, there will be 100 percent exemption on long-term capital gains if they are invested in the purchase of another residential property in advance within one year of the date of sale of the first property or within two years after the sale. If it is for construction, the net taxable long term capital gains should be invested within three years.
Similarly, long-term capital gains arising out of sale of shares, debentures, jewellery, urban land, units etc will get 100 percent tax exemption if invested in a residential property.
Courtesy – Times property – Dt – 25-12-10
|SHARE-EMI: RUMBLERS AHEAD !
Developers are enticing end users with options to pay their EMIs till possession of flats. But, the way ahead has a few turns, and twists! TANUSHREE ROY CHOWDHURY writes
Giant billboards staring down at you from the facades of multi storey high rises, full-page glossy ads in your daily newspapers the trend is surely catching up ZERO EMI till possession being offered by various builders to attract buyers.
The scheme, also called subvention, is an arrangement where the consumer does not have to pay the monthly installments for the loan once it is sanctioned. The builder is the one who pays the EMIs by giving the consumer post-dated cheques for a pre-defined period, which could be anywhere between one year to 30 months, till possession.
However, the developer pays only the interest part of your EMI while the principal portion is deducted from you. At present, there are a few projects by builders like Emaar MGF, Ramprastha Developers, Vatika and Ansals Housing, among others, which offer this scheme.
Mechanism behind Zero EMI schemes
A developer, at the time of starting his project, ties up with lenders (banks and financial institution) for sanction of housing loans for purchase of property in the project on the following terms:
Sanctioned loan to be released in construction-based installments determined by the demand raised by the developer.
There is repayment holiday for the principal repayment (moratorium) for this fixed period or till the possession whichever is earlier (as projected by the builder)
Interest on the loan outstanding, during the period of construction, to be serviced by the developer every month till the possession is handed over to the purchaser
Kinds of EMI schemes
1) Full EMI sharing where the builder pays the EMI for the specified period on your behalf.
2) Partial sharing, where the builder pays a portion of your EMI. Unlike in a normal home loan scheme, the monthly installments or EMIs (consisting of principal and interest components in a tapering format) are deducted from your account.
3) In a third kind of scheme, banks have started a subvention scheme for some projects where the EMIs are directly deducted from the builder. But such schemes are very few as on date.
Courtesy - Times property – Dt. – 25-12-10
|SPREADING RIPPLES THROUGH CONCRETE
Wave Infratech promises to bring to NCR the most sought-after self-sufficient city, along with commercial projects. RAVI KUMAR MANGALAM writes
The forthcoming Wave City is a 4,500 acre self-sufficient city located on NH 24,18km from New Delhi border and part of the NCR. The project is an intrinsic part of the Ghaziabad master plan, which has been rated in the Top 10 most dynamic and emerging cities of the world by a report.
Designed by renowned township planners, Bentel Associates International from South Africa, Wave City will redefine the benchmark of town-planning with the most futuristic amenities and conveniences exuding from the very make and architecture.
Residential, commercial and institutional areas are earmarked to ensure zero hindrance in movement and enhance convenience. The SRTP (Systematic Road Transport Plan) offers minimal travel time and highest proximity advantage between the vantage points of the city. A high-tech waste management and garbage-control system gives health and hygiene the prominent place it deserves in the making of any civilization, a director of the firm says.
Every project of Wave Infratech has the expertise of world-class architects and consultants. Be it Brennan Beer Gorman Architects and Brennan Beer Gorman Monk Interiors (BBG-BBGM ) from New York who have designed a marvel in Wave One or, now, Bentel Associates from South Africa.
The Wave Hub is an exclusive shopping hub for brands demanding a large floor space. Here, a single unit occupies 6,000 sq ft and the entire premises will be shared by 10-12 exclusive names in retail. Proximity to Wave One is also an advantage.
Wave Infratech is the real estate arm of the Rs 2,500 crore Wave Inc. Group, steered by Manpreet Chadha. The group has a variegated portfolio of commercial interests and is helmed by a young and energetic team of professionals driving the work ethos, bringing a fresh perspective to the current stereotypes in realty development. A keen understanding and study of successful real estate and infrastructural projects across the world forms the base of knowledge for the company’s ventures. Residential and commercial projects are not our only claim to fame, with Wave Infratech incorporating human experience to meet global standards. Wave Cinemas and the Centre stage Mall are examples of the thought that goes into every Wave Infratech undertaking, the director adds.
Wave Infratech vision may be gauged from the concept and planning of Wave One, set to be NCRs tallest creation, at Noidas Sector 18.Platinum,Gold and Silver slabs demarcate the exclusive zones that the offices enjoy. The topmost Platinum floors are bound to massage any aspiring tycoons self-esteem. Privacy and independence are the high points of the Gold offering while the Silver offices have been sold out, since it was too good a deal to miss, the director chuckles.
This is only the commercial aspect of Wave One; the retail promise is even more irresistible. Now, shoppers can drive into the mall, park on the 2nd and 3rd floors and strut into the stores. It is a marriage of the high street and the mall.
Courtesy – Times property – Dt- 25-12-2010
|ART OF WATERING INDOOR PLANTS
|Here are some handy hints to keep your indoor plants fresh and nourished all the time
Use water at room temperature
Touch the soil several times in the day to check the moisture of the soil
Signs of under-watering include, dry soil, wilting foliage, and brown edges along the leaves
Avoid watering too often because too much moisture can cause the roots to rot
If the plant is wilting from the stem out towards the leaves, it may be a sign that you are over-watering the plant
Other signs of over-watering include, lower leaves dropping, discoloration, the plant might stop growing, or wilting foliage. However, if the plant wilts along the outer tips of the leaves first, you may not be providing the plant with enough water.
If the soil seems to drain too quickly, place the pot in a sink filled partially with water and soap. If the problem persists, you should repot the plant.
Make a self-watering device. Saturate a wick and place one end of the wick in a dish of water. Insert the opposite end of the wick into the soil of the potted plant. There are also plastic wicks with water sources available which function in the same method.
Self-watering pots feature plastic compartments along the base which the plant roots are able to grow through and receive water from a reservoir beneath.
Take the pots outdoors to get some sunlight and rain, once a week.
Spray the leaves with water to give them the fresh green look
Repot your plots twice a year, with fresh manuire and soil, to help them grow better
The size of your pot should be in proportion to the type or variety of plant used in it. This will enable the roots to develop and the plant to grow well
Courtesy – Times Property -Dt- 18-12-2010
|BORROW THE RIGHT AMOUNT
Banks are wooing prospective borrowers with their teaser rates and special deals. New projects are cropping up around the city and developers are busy pushing their completed projects at good rates. The economy is buoyant and IT firms have started hiring again after a brief period of lull. The reality sector is all set to sail high once again.
Most homeowners are young, salaried employees of IT firms, professionals, entrepreneurs and self-employed businessmen. An investment in real estate is perceived lucrative and prudent. Gone are the days when homebuyers were in their 40s, mopping up all their savings to buy a property. Today, borrowers stretch their finances to indulge in a property.
A huge loan amount will result in greater outflow in the form of EMI from the borrower's pocket. Consider a loan amount of Rs.40 lakhs at a rate of 11 percent interest over tenure of 15 years. The EMI amount comes to Rs.45, 500.
If the loan amount were less, say Rs 25 lakhs for the same interest rate and tenure, the EMI will work out to be lesser. It will come to around Rs 28,500.The greater the home loan amount, greater will be the EMI outflow.
Avoid debt trap
When interest rates go up, borrowers who have taken a bigger loan often find it difficult to meet their EMI commitment. They may have to sacrifice lifestyle, luxuries, periodic investments and saving for exigencies.
Banks lend an amount that result in an EMI which is around 30 to 40 percent of the applicant's monthly take home. Anything above this thumb rule is considered tough for the borrower to repay.
Apart from home loans, most borrowers are also burdened with credit card debts, personal loans and other high interest debts. Unable to repay their debt, some borrowers take more loans. This drags them deeper into debt trap.
Count other expenditure
Borrow only that much you can easily repay without overstretching finances. Settle for a lesser loan amount, if your capacity is less. Take into account your earnings capacity, repayment potential, other financial commitments, cushion for interest rate hikes and emergency expenses before deciding on the loan amount.
Courtesy – Times Property -Dt- 18-12-2010
|GATEWAYS TO CREATE THAT FIRST IMPRESSION
Gates provide your home with a stately and elegant design aspect, says DEEPIKA TRIPATHI
First impression is the last one! This should be kept in mind when planning the entrances of your house. Well designed gates can beautifully compliment the architecture of a building and enhance its visual appeal. If well designed, they become a significant and integral part of that building. Therefore, the designing of gates requires much planning. It's not only the styling of the gate that matters but the function is also of paramount significance. The most important factor that goes simultaneously with the designing of gates is the security factor.
Gates have been consistently evolving to meet the ever changing security needs of people. They not only provide your house with a unique style but also decide upon its security level. There is a wide range of high quality materials that is available these days to be used for your gate that undoubtedly fits in to everybody's budget. Ashutosh Kumar, an Architect and Designer say, "Gates are generally in accordance with the security more than the beauty purpose. The height ranges from 5 ft to 8.5 ft, the latter being more preferred."
Vastu-Shastra usually advises installation of gates on west or east side since that leads to prosperity and happiness. The direction that should completely be avoided is south which is said to bring in difficulties and hazards. In most homes today, we see two kinds of gates- one is for the pedestrians and the other is the driveway gate to park the vehicles inside the house.
Both of these should be similar in design, proportionate to the size of the house. Steel, Aluminium, iron, wood are some materials that are used in making gate. If you like to give your house a classical touch, choose traditional style of iron bars having readymade designs of cast-iron inscribed on it. On the other hand, if you want your house to get a modern appearance, go for hollow pipes of aluminium or steel filled with wooden planks. Mostly, teakwood is used for this purpose. Ashutosh Kumar further says, "The designs made on these gates can be highlighted and made more attractive by the use of fiber sheets. Not only this, the name that you choose for your house can also be inscribed on the gate itself."This is a unique style and is undoubtedly eye catching.
This would certainly enhance the beauty of your gate. The most popular combination of colours used is of black, white, golden or silver. Bright coloured lights can be placed on the wall on which the gate is attached.
There can be various styles of gates. The current and the latest trend is that of sliding gate and folding gate. These are very much in demand. In a folding gate, small sheets of iron are attached by means of hinges so that they can be opened or folded as the situation demands. These are generally for people who need to park their vehicles inside their house with little space for parking. Even the sliding gates have become a vogue. It augments the decor of your house furthermore. There is also a new trend of wood polishing on the metals used in gates. It gives the impression of wood and makes your house look different and attractive.
Whichever gate you opt for, very complicated designs should be avoided because that will make their cleaning and maintenance difficult. This is because gates are prone to dust and water all through the day.
Gate can give your house a beautiful outer appearance. You do not need to put in much efforts but systematic planning is what is required here. Choose the best kind for your abode.
Courtesy – Times Property -Dt- 19-12-2010
Integrated urban hubs are the latest trend of urban development in the National Capital Region and Haryana, says C R RATHEE
The new trend of urban development in the National Capital Region (NCR) is to develop integrated urban hubs (IHB).The customers, according to Rajiv Rathee, founder president of Indian Chamber of Estate Consultants (ICEC),nowadays look for properties in areas where facilities like hospitals, intra-city transport, excellent connectivity with Delhi and other cities of the NCR, and the Metro line, are assured.
This sector has seen a healthy revival during the last few months, at least in Gurgaon, Faridabad, Ghaziabad, Noida, Kundli and Greater Noida.
A new development being witnessed in the urban development is that some corporate have started developing "company towns" - essentially an American concept of constructing houses for their executives and employees next door to the place of work, more or less in the same way as the residential universities construct on-campus complexes of various categories to house the teaching, non-teaching and administrative staff. These complexes have schools for the campus community, clubs, canteens, playing fields, parks, community centers, shopping arcades, fire stations, scavenging squads, etc. The overall management is taken care of by an estate officer.
But unlike "company towns" of America (which are in a way private colonies of the concerned corporate ),the university campuses are managed by the university In some universities, like JNU (New Delhi),elected representatives of the campus community are associated with the administration of the campus area.
However, in the United States, this concept has more or less been abandoned because the employees wish to stay away from the workplace. Also, sources say the employees of various categories want to live with like-minded families. Now the "company house" is a phenomenon in China.
In northern India, the first "integrated company township" came up at Modinagar in Uttar Pradesh - Modipuram (of Modi Group of industries).It was followed by Mohan Nagar (of Mohan Meakins),Jagatjit Nagar ( of Jagatjit distilleries of Punjab), Jiwannagar, Atlas Nagar, Birla Colony (all in Haryana),Copper Residential Complex (Khetri in Rajasthan),various privately developed colonies in the urban hubs in the NCR, Housing Board colonies, satellite /sister sub-cities on the periphery of metros (like Dwarka in Delhi).
The defence forces have their enclaves and the latest in this unique series are the Dairy Enclaves and Advocates Enclaves in Haryana.
Meanwhile, following a formal approval of the state government to Canon India (P) Ltd - a Japanese giant for developing an integrated and self-contained "Japanese township" at Madina village (15km from Rohtak), a new era of urban hubs has begun. According to sources, the feasibility study of this project would soon be conducted."It will be first time that Japanese entrepreneurs will enter the realty business in India," the source said, adding that Haryana has been chosen for the purpose because the state has the most investment friendly environment among all the other states in North India."Here, bureaucrats listen to the foreign investors and take care of their interests."
Meanwhile, the Haryana government has reportedly taken a policy decision to create land banks on the flanks of the industrial model towns (IMTs) at Manesar, Pataudi, Sohna, Faridabad, Rohtak and Kharkhoda (Sonipat); Growth Centres at Bawal and fruits and vegetable processing and export market complex at Kundli (Sonipat) to facilitate development of new industrial integrated townships, modeled on such hubs in Japan and Singapore for small and medium enterprises (SMEs).These townships will also have exclusive residential, commercial and recreational sectors. Depending on the response of SMEs to this innovative scheme, more such townships would be developed, says a senior official aide of the chief minister of Haryana.
According to a source in the industry, several requests have come seeking for such townships at Dharuhera, Jhajjar, Bahadurgarh, Karnal and Yamuna Nagar.
The Haryana State Industrial and Infrastructural Development Corporation (HSIIDC), the overarching agency for this project, will explore and promote the participation of the private corporate sector for the development of these industrial-cum-urban complexes. Some of these complexes will be exclusive hubs ,such as those meant to be auto-ancillaries, pharma parks, fruits and vegetable processing parks, etc Each township will have a dedicated water-cum-sewerage network and common effluent treatment plant. The special economic zones (SEZs) will also be converted into integrated industrial-cum urban townships.
Courtesy – Times Property -Dt- 18-12-2010
|Climate change is no longer a myth. We cannot really ignore the effects of global warming. That leaves us with only one choice-sustainability. DEEPA SATHIARAM explores the realm of green homes and its many benefits.
With climate change, energy, water efficiency and waste management becoming areas of national concern, sustainability and green can no longer be ignored by anyone or any sector really. Today, In most parts of the world and in India as well, sustainable developments are slowly replacing traditional construction and building practices in an effort to minimize negative impacts on the environment as much as possible. The commercial sector and corporate world have already started working their way to creating sustainable and energy efficient spaces. While this is a welcome move, unless the residential sector of our country embraces sustainability and green concepts, as a nation, very little progress can be made.
In India, today the housing sector is growing at an exponential pace and is also contributing significantly to the economy. While best construction practices are being employed by all stakeholders in the residential sector, sustainability concepts are only beginning to catch their attention.
Green homes can have tremendous benefits, both tangible and intangible. The immediate and most tangible benefit is in the reduction in water and operating energy costs right from day one, during the entire life cycle of the building. The energy savings could range from 20 - 30 % and water savings around 30 - 50%.Green Homes Ratings can also enhance marketability for the project. Intangible benefits of green homes include enhanced air quality, excellent day lighting, health and wellbeing of the occupants, safety benefits and conservation of scarce resources for the nation.
Green homes are really not new in an Indian context. If you look at traditional Indian designs and practices for homes, you will notice that we were extremely green in our approach and practices - we recycled almost everything, we used local materials in all our construction be it mud blocks or white wash which ensured that the carbon dioxide levels in the rooms were very low (lime is a good absorber of CO2).Similarly all our buildings were well lit and ventilated. If you look at traditional south Indian homes, the doors are aligned in a straight line from the home entrance till the back of the home to facilitate better cross ventilation. Similarly the "mutham" of our olden day architecture is nothing but an internal courtyard that brings in light into most parts of the house. Today of course with modernization and westernization, we have started getting influenced by the west in the way we build buildings and the entire green building movement today is a good way to bring back people to reality and make them look at various serious issues such as water conservation, energy conservation, site preservation, minimization of waste and providing better indoor environment for all the occupants.
Green home concepts today include various measures to reduce energy consumption such as better building envelope materials including glazing, walls and roof systems, lower lighting power densities through use of CFL,T5 and LED lights for many parts of the residential development including external, landscaping and common areas, solar hot water systems instead of traditional electric heaters, etc. Similarly most green residential developments are pursuing various water efficiency measures including installation of sewage treatment plants to treat and reuse treated water for landscaping and toilet flushing purposes, rain water harvesting, use of native and drought-tolerant landscaping species to reduce irrigation water consumption, low flow but high efficiency toilet fixtures, better irrigation practices such as drip irrigation, etc. In the materials front, various green materials are being used today including materials with high recycled content, materials that are rapidly renewable such as bamboo, low VOC (volatile organic compound) materials for better indoor air quality, etc. Waste management is also another focus area with many developments opting for organic waste management systems or composting systems, on-site recycling practices in an effort to promote green and sustainability among the occupants as well.
Chennai has been a leader in sustainable building designs and practices since the start of the green movement in India in early 2000.In Chennai we have one of the first Platinum-rated individual green homes in Madipakkam and there are several multi residential developments that are currently embracing sustainability designs and pursuing green homes certification as well. These developments include upcoming residential projects for Tata Housing, True Value Homes, Appaswamy Estates, Real Value Homes, Akshaya Homes, IVR Prime Realty among others that are pursuing green homes certification for many of their developments coming up in various parts of the city.
In conclusion greening residential spaces can also help considerably reduce the overall negative impact on the environment and reverse the practice of unsustainable construction activities while reducing operating costs, enhancing building marketability, increasing occupant satisfaction and all the while creating spaces that are healthier to live and work. For us in India, it is crucial that these important aspects of sustainability are addressed by the construction industry as we build the nation's infrastructure for the next century over the next couple of decades.
Courtesy – Times Property -Dt- 18-12-2010
|VALUATION REPORT HELPS BUYER ARRIVE AT RIGHT PRICE
ASHISH GUPTA outlines what a valuation report is and how it should be compiled
Valuation report indicates if the purchase price is reasonable and whether there are any major defects as identified by the valuer. A real estate appraisal helps establish a property's market value - the likely sales price it would bring if offered in an open and competitive real estate market. Valuations are also required for tax purposes and probate. Wealth tax is to be paid by property owners owning property above a certain value.
Valuation report for a property evaluates the property in question. The report helps a buyer as well as the seller in assessing the value of the property. Generally, it is prepared at the behest of the buyer to assess the true value of a property. This helps in negotiating the price to be paid.
The report is normally requested by a bank that funds the property purchase. If you are obtaining a mortgage loan, the bank will require a valuation by one of their panel surveyors. This is to ensure that if the mortgage is unpaid the outstanding amount is covered.
A lender will also require an appraisal when one offers property as a security for a loan. This is because he will want to make sure the property will sell for at least the amount of money he is lending.
|WHERE ARE THE AFFORDABLE HOUSES
|Rising prices and land availability may just turn out to be spoilers in the quest to provide affordable housing for all. JUDE SANNITH S takes stock of the situation
One of the major factors affecting affordable housing is land be it land availability, land-accessibility or cost of land the question of land always comes into the picture when plans for a housing-project are drawn up. That this land factor should play such a vital role when affordable housing projects are concerned only underlines the importance of planning and provision of substantial portions of land on which such housing projects may be developed. With land prices within the city ever on the rise, the CMDA (Chennai Metropolitan Development Authority) has had to make a few adjustments to help establish affordable housing in the city, "While preparing the Second Master Plan, we have taken into consideration the high land value and construction cost," says Susan Mathew, vice chairman of CMDA, adding, "The review of space standards were made and the plot size for residential construction has been brought down from 90 square meters to 80 square meters. For EWS (Economically Weaker Sections) it is retained as 20 square meters in Chennai city and 40 square meters in the rest of the Chennai Metropolitan Area (CMA)."
Cross-subsidization (the practice of charging higher prices from one group of consumers in order to subsidize lower prices for another group) is another strategy adopted by the CMDA to combat land prices and rising costs, as it advocates the Jawaharlal Nehru National Urban Renewal Mission's (JNNURM) strategy which stipulates a minimum of 20 to 25% of developed lands in housing projects for EWS and Lower Income Groups (LIG) with a system of cross-subsidization. This strategy has takers, as cross-subsidization is being looked upon as an effective method of making land and building material affordable to those belonging to LIG."Cost of land is a consideration, as much as the rising prices of building materials," says Durganand Balsavar, a city-based architect."However through exploring cross-subsidized housing, these adverse impacts can be mitigated considerably," he says.
While measures like reduction of plot size and cross-subsidization may be encouraging, there are those who believe that land availability is not the only decisive factor of affordable housing."Land prices just outside the city are as low as Rs 1,400 and Rs 1,800 per square foot it is infrastructure, at the end of the day, that plays the biggest role in affordable housing," says Shripal Munshi, an urban planner and partner with SV Architects, a city-based architecture company, "Facilities onsite, transport connectivity, sewage and basic amenities can determine whether the land in question is viable enough for the establishment of a housing project."
There are takers for Munshi's point of view, as architects feel infrastructure is undoubtedly the way forward."Investment in infrastructure is a basic and non-negotiable requirement for affordable housing," says Durganand, "New sources of renewable power generation, recycling waste water, investing in roads, public transport and social infrastructure like colleges, schools, hospitals and markets facilitates affordable housing."
According to the US Department of Housing and Urban Development (HUD), housing is affordable if it costs the occupant not more than 30% of his income for gross housing costs, including utilities.
Chennai is the 4th largest metropolitan city in India and the total population of Chennai Metropolitan Area (CMA) as per 2001 census is 70.41 lakhs. The total number of households as per 2001 census in CMA is 16.19 lakhs and the total number of housing units in CMA is 15.83 lakhs.
According to a study conducted by the CMDA in 1989-90, the number of households living on pavements was 9,491 at 405 clusters at an average of 23 households at a place.
As per 2001 Census, Chennai city had a slum population of 8.19 lakhs, which is approximately 19% of the city's population. The percentage of slum population to total population has reduced from 30% in 1971 to 19% in 2001.
The National Urban Housing and Habitat Policy, 2007 stipulates 10 to 20% of land in every housing project or 20-25 % of FAR reserved for EWS/LIG housing. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) launched by the government of India stipulates a minimum 20 to 25% of developed lands in housing projects for EWS/LIG housing with a system of cross-subsidization.
It is mandatory on the part of the developers to reserve at least 10% of the site area and provide houses for LIG with dwelling units not exceeding 45 square meters in cases of large-scale developments exceeding 1 hectare. This rule was brought in the SMP to encourage EWS and LIG housing developments.
The statistics on the number of Planning Permission Applications issued for residential layouts, since 1989 reveals that 44,673 residential plots have been approved of which 19,075 plots are for EWS.
Recently, development regulations have been amended by providing an additional FSI concession of 50% over and above the normally permissible FSI for those who construct units of 30 sq m and below. For those who construct dwelling units of 50 square meters and below, an additional FSI concession of 30 % over and above the normally permissible FSI is given.
Courtesy:- Times Property dt-11-12-2010
|TENANT CAN RECOVER COST OF PROPERTY MAINTENANCE
|ASHISH GUPTA explains how a tenant can deduct cost of repairs from rent in certain cases
Maintenance of property is important. A common point of dispute among many landlords and tenants is maintenance of a rented property. Usually, a lot depends on the mutual terms and conditions as agreed upon between the parties and laid down in the lease agreement. It is the responsibility of the landlord to ensure that the tenanted premises are habitable and safe. If need be, he should ensure that adequate repairs are undertaken.
In case a landlord is unable to do so or is unwilling to do so, his tenant may undertake these repairs. He needs to give proper notice to the landlord, specifically mentioning the nature of problem, the nature of inconvenience caused, safety hazards, and the necessary steps required to correct the problem. It should be mentioned that in case the landlord fails to undertake the repairs within a specified time, the tenant will have it done and will be eligible to recover the amount spent from the landlord - from the rent or otherwise.
However, it should be noted that this covers only repairs that are essential and urgent. It would not cover circumstances where the tenant wants some alterations or additions for his convenience. The essential test is the requirement to keep the premises safe, habitable and usable.
The Rent Control Acts of various States also provide some guidance to this effect. As per these Acts, a landlord has to keep the premises in good repair. Every landlord is bound to keep his premises in good and tenantable repairs. If a landlord neglects or fails to undertake any repairs which he is bound to within a reasonable time after notice in writing, the tenant may do so himself and deduct the expenses from the rent payable to the landlord. This is subject to the condition that any amount deducted or recoverable in any year will not exceed one twelfth of the rent payable by the tenant for that year.
In case repairs are to be undertaken, without which the property is not habitable or usable except with undue inconvenience, and the landlord neglects or fails to do so notice in writing, the tenant may apply to the rent controller under the Rent Act for permission to undertake the repairs himself. He should submit to the controller an estimate of the cost of such repairs too. The controller may give the landlord an opportunity of being heard. After considering the estimate of cost and making any inquires as he may consider necessary, the controller may by an order in writing permit the tenant to undertake the repairs. It will then be lawful for the tenant to undertake the repairs himself and deduct the cost. The costs can be recovered from the landlord. It cannot exceed the amount specified by the controller.
Courtesy:- Times Property dt-11-12-2010
|STILL OUT OF REACH
|The affordable housing market is evolving but it has its share of problems. Issues like land availability, pricing, finance and regulatory concerns have affected the supply of affordable houses. HARINI SRIRAM finds out more
According to NUHHP (National Urban Housing and Habitat Policy) 2007,an affordable house is defined as," a dwelling unit having super built-up area not less than 300 sq ft for EWS (Economically Weaker Sections ),500 sq ft for LIG (Lower Income Group) and between 600 and 1,200 sq ft for MIG (Middle Income Group) available to the end user at a price that permits home loans in monthly installments, which should not exceed 30%-40 % of a person's monthly income."However, affordable housing continues to be an elusive dream, especially for those in the EWS and LIG categories. Why there is a problem in terms of supply and implementation of affordable housing schemes
P Suresh, MD, Arun Excello, believes that the biggest impediment to construction of affordable housing projects is the non-availability of land. He says, "It is impossible to find land at appropriate locations at affordable prices. Where can you find land at a cost of less than Rs 1 crore per acre this is a big deterrent as land price accounts for more than 40% of the cost of the project."
It's not just availability of land that we are talking about here. As Kumar Gera, Chairman, CREDAI (The Confederation of Real Estate Developers Association of India) points out ,"Well-connected, accessible land with title and infrastructure needs to be provided on a regular basis. Only then can developers provide affordable housing in the real sense of the word."
In cities, in particular, land availability is a bigger problem. According to a report by McKinsey Global Institute (MGI),India's urban population will soar from 340 million in 2008 to 590 million in 2030.How will the housing demands of the population be met Sample this: 23% of India's urban population resides in eight cities. If the housing shortage (of 26.53 million housing units) is to be addressed effectively, at least three million housing units must be added to the cities, every year. Instead, only 0.3 million housing units are being added in the existing cities. Urban land expansion is, therefore, the need of the hour.
As per the estimations given in the Second Master Plan, of the total housing demand of 12.38 lakhs, the demand for EWS and LIG housing will touch 3.71 lakhs and 4.33 lakhs respectively by 2026.More than 90% of those affected by the shortage in housing are from the EWS and LIG categories, for whom an affordable house would fall in the range of 4 lakhs to 7.5 lakhs. Most developers however continue to cater to the niche market that serves about 5-10 % of the population. As P Suresh points out," Promoters are averse to handling more number of clients; in an affordable housing project, for instance, it's a volume game. You need to provide a large number of housing units, as opposed to a luxury project where you deal with very few clients and big spaces."
Coupled with this is the problem of financing affordable homes. To offset this problem and deliver financial assistance to the poor so as to enable them to purchase their own homes, the central Government has instituted the ISHUP (Interest Subsidy Scheme for Housing the Urban Poor) scheme all across the country.
"This scheme gives EWS households a subsidized loan for a period of 15-20 years for a maximum amount of Rs 1 lakh.LIG households can avail of a loan of up to Rs 1.6 lakh but the subsidy is not applicable for the remaining 60,000.The subsidy is 5%/annum on interest charged and is deducted from the loan quantum right in the beginning," says Dharmendra Pratap Yadav, Managing Director, TNHB.
Harsh Roongta, CEO, Apnapaisa.com, an online portal that specializes in price comparison of loans, insurances and investment options, believes that the affordable housing industry has led to the growth of a microfinance industry as well, that funds people who may not have the means to buy a house otherwise.
Groups like Mahindra, MAS, Micro Housing Finance Corporation Ltd offer loans at 12-14 % interest rates to those who do not have proofs of salary documentations. He says, "People in the EWS and LIG categories do not have income documentation and hence they face problems while applying for loans. So to them, availability of loans is of prime importance; the cost of the loan does not matter as much."
Kumar Gera believes that tax concessions and a micro level road map for affordable housing will help plan such projects. A public- private partnership (PPP) is a solution too. As Susan Mathew, vice chairwoman of CMDA (Chennai Metropolitan Development Authority) says, "It is the social responsibility of every developer to ensure that housing is provided to the EWS and LIG categories."
To facilitate this, the government has announced a few incentives and subsidies to developers who cater to this segment."In order to facilitate PPP in provision of housing for rehabilitation of slum dwellers, the government has announced a Transfer of Development Rights (TDR) of 30 sq m of floor area per slum dweller to the private builder who provides housing for the slum dwellers and the Development Regulations (DR) have been amended suitably," she adds. Also, additional FSI concessions of 50% over and above the normally permissible FSI for those who construct dwelling units of size 30 sq m and below are given. For those who construct dwelling units of size 50 sq m and below, an additional FSI concession of 30 % over and above the normally permissible FSI is given, she says.
These policies and incentives will go a long way in promoting affordable housing. However, unless the bigger issues of land availability, planning and pricing are addressed, the market will not be able to serve the needs of those who really need an affordable house.
Courtesy:- Times Property dt-11-12-2010
|KNOWLEDGE OF GREEN LAWS MUST
|As the environment ministry cracks the whip on high profile buildings, a citizen must acquaint himself with all the green norms and local bylaws before investing in a property. Lack of knowledge is no defense against penalty or demolition. NEHA LALCHANDANI reports
With environmental concerns having taken centre stage, a spate of major construction projects have recently been pulled up by the ministry of environment and forests (MoEF) on the ground of violation of norms. Adarsh and Lavasa have become household names and notices for their demolition or cease-construction are pending. Thus, rather than investing lakhs and crores of rupees in property that may face the risk of demolition in the future, It might serve one well to ensure that all environmental clearances have been obtained.
It is vital for end users looking to purchase or construct a home, villa or a sprawling farmhouse to acquaint themselves with these rules and regulations but, as of now, there is no information out on the table which will give them a clear picture of the various clearances that are required, and there is even little awareness that there are any such regulations at all.
Take Delhi, for example. How many are in the know that for any major construction project, the Delhi Urban Art Commission (DUAC) is to give the final go-ahead. Most people, even among the educated and the professional class, might not have even heard of DUAC and those who were mandated to apply for a clearance would often not bother. The city is dotted with several projects, including the Commonwealth Games Village, which came up without all the necessary clearances. For instance, the CWG village, built on what several claim is a flood plain, needed a no-objection certificate (NOC) from the Central Ground Water Authority a clearance that was not even applied for.
Naturally, for someone looking to invest in property, the issue of environmental clearances becomes critical and the question then is, how one to acquaint oneself about them. R P Singh, a Mumbai-based architect says: Normally, such clearances are required only for residential complexes or townships and not single unit homes. However, the situation would change from city to city. One would know if they are too near the sea, or in a mangrove area, or in the case of the national capital, whether they are in the Delhi Ridge.
Construction here is not permitted in any case. Architects are aware of constructional clauses and would be able to guide prospective owners about fire-safety clearances and height of buildings permitted in certain zones. In Mumbai and other coastal areas, the Coastal Regulation Zone has been marked out and constructions taking place within it, whatever they might be, need to apply for clearances, Singh adds.
Some of the acts under which permissions have to be sought include the Wildlife (Protection) Act,1972;Water (Prevention and Control of Pollution) Act of 1974;Air (Prevention and Control of Pollution ) Act of 1981;Forest (Conservation) Act,1980;Environment Protection Act 1986;EIA Notification of 1994 (since amended in 2006); Coastal Regulation Zone (CRZ),1991and Central Ground Water Authority (CGWA),1997.While these are major heads that can be applied to most projects, a clean chit would also be dependent on where the project is coming up as local laws vary widely.
Manoj Mishra of Yamuna Jiye Abhiyan quips, I would not like to get stuck with a property in Lavasa, referring to the now disputed Lake City project coming up near Pune. The environment ministry has now taken cognizance of the fact that it [Lavasa] does not have all green clearances but how would an ordinary investor know that. The tragedy is that there is no one agency delegated authority to clear building plans and advise on the environment clearances required. In Delhi, the Municipal Corporation of Delhi is supposed to pass plans but, that in itself is an exercise mired in controversy. There are also local level bodies from whom clearances might be required like the DUAC, Yamuna Standing Committee (YSC), Delhi Pollution Control Committee, he adds. Y C Khurana, a lawyer, says that it would not be a bad idea to ask builders for all clearance certificates before investing in a property. The most common practice these days is to market new property by showcasing its green aspects, its proximity to nature, etc. However, one needs to be most careful here. There have been many instances of constructions coming up in notified buffer zones, around tiger reserves or other eco-sensitive zones. Before investing, one must either approach local authorities, or lawyers and architects concerned to ensure that there have been no violations, he says.
Experts also add that seeking environmental clearances should not be a task confined only to the environmentally conscious, as the penalty of violation of these norms applies upon every citizen. The penalty of constructing without green clearances could be forbidding, including demolition of the building. The Right to Information Act has played a major role in this regard. Many of the illegalities that have come to light are because the government bodies concerned were forced to acknowledge that either clearances had not been applied for or not been granted. With MoEF now so active in cracking down on illegal constructions, what it needs to do is to create a proper archive of laws and clearances that one needs to keep in mind before either constructing a house or investing in a township or complex and put it up on its website, a Delhi based activist says.
Courtesy: - Times Property dt-11-12-2010
|GREAT LIVING AND QUALITY ASSURED
With its latest project, Bellevue, Central Park delivers not only homes but also on its promise of quality. RAVI KUMAR MANGALAM writes
This is a home which no one will want to leave. That’s the kind of response that Bellevue the Phase 1 condominium towers of Central Park II in Gurgaon has been generating among buyers. Vineet Nanda, vice-president of business development at Central Park, explains why: Bellevue is a rare example in India to have obtained six quality certificates from leading auditors and consultants (Grant Thornton, Jones Lang LaSalle-India, KCB Associates, Dema Consulting and Manu Jain).The certificates carry a seal of approval from the consultants on specifications relating to the construction quality and the structural integrity of Bellevue. Certificates are being handed over to each apartment owner at the time of possession. We are not just in the business of building apartments, we believe in building trust.
Bellevue, comprising over 400 exclusively-designed apartments in the range of 2,350 sq ft to 4,650 sq ft, offers all the main features that buyers usually seek a prestigious address, the vibrancy of city living, quiet green surroundings, good security coupled with modern range of amenities. These apartments overlook the swimming pool and the sprawling greenery on one side and the Aravali skyline on the other.
Nanda adds: The amenities offered by Bellevue include an amphitheatre, a basketball court, tennis and badminton courts, power backup, double-level basement parking, solar water-heating, fire safety systems, high speed communication networks and beautifully designed park and play areas for children. Another feature of the Bellevue project has been the use of state-of-the-art construction technology, known as Mivan shuttering. Mivan uses aluminum frameworks for the construction of tall buildings, to impart solid structural integrity and a high-degree of seismic resistivity. Launched in 2007 at a price of Rs 2,050 per sq ft, the condos now carry a re-sale value of Rs 6,000 per sq ft evidence of its great demand and endorsement by the upscale market segment, he says. The project has been designed by one of the worlds largest and well-regarded architectural firms HOK (formerly Hellmuth, Obata + Kassabaum).
Another advantage of Bellevue is connectivity. It is very close to the heart of the city centre, IFFCO Chowk, the Metro station and the international airport.Also,it is located within the vicinity of good schools like Pathways World School and GD Goenka World School and reputed hospitals like Medanta and Artemis.
Central Park is jointly promoted by Amarjit Bakshi and K S Bakshi It also has Ashmore PLC, a leading international PE fund based out of UK as a third partner with an equity participation in the company. Currently, Central Park has over 2 million sq ft of existing development and another 6 million sq ft are in an advanced stage of planning and execution across verticals like upscale residential development, hospitality and SEZs.
The company has the distinction of being a Zero Debt company and its market cap is valued at over Rs 5,750 crore by the PE fund, says a company director.
Courtesy:- Times Property dt-11-12-2010
|EVEN EXPATRIATES NESTING NEAR METRO STATIONS
Citizens of Delhi and the NCR seeking an accommodation near Metro stations is an old story. Today, even the expatriate community in Delhi is lining up to grab a vantage house, flat or villa near a Metro station, says VIVEK SHUKLA
Derek Amiss, an expatriate from the UK, was elated when the Metro reached Noida - and ever since he has been commuting on the Metro, even to Gurgaon, for official and personal work. An IT engineer by training, Amiss has even shelved plans to move to Noida from Green Park where he has been living for the past couple of years."After the Metro crossed the borders of the capital for Noida, it has given me a huge relief. Now, I often visit my office on the Metro - from Green Park to Rajeev Chowk and then to Noida. It is hassle-free and takes less than 45 minutes to reach my office from home and vice versa," Amiss chuckles.
As the Metro rail is moves at a steady pace to the various parts of the capital and the NCR, it has greatly eased the life of locals as well as the large expatriate community in the capital. Rental market watchers say that it is a matter of great surprise that even those with luxury cars are now shifting over to the Metro for their regular commute to office, markets, malls or social outings.
"I am really surprised! Over the past couple of weeks, I have come across several requests from expatriates seeking rental accommodation close to Metro stations. It is a clear sign that they prefer the Metro to facing the harrowing traffic jams on the capital's roads," says Kajol Makhijani of Mak Realtors.
A French lady, who does not want to be identified, says that as her kids study in a French school at Aurangzeb Road, they take the Metro from Gulmohar Park station daily and get down at Jor Bagh station. And from there, the school is at a shouting distance."Earlier, I used to drop them off at the school as, very often, their cab did not turn up. That was very irksome. Now, the Metro has solved our problem and my kids are also happy travelling on it," says the lady, a journalist by profession.
While the Metro is making life comfortable and better for people, it is also boosting the demand for properties close to Metro stations. The demand for rental accommodation as well as commercial properties close to Metro stations is increasing by the day. Rail and development go hand in hand and the Metro has clearly proved this old saying once again, says Sunil Jindal, CEO of SVP group, adding, "As the Metro moves beyond the capital, it is ringing in development at every place it touches. Infrastructure is improving and people seeking a roof over their head are also shifting there. Ghaziabad is an example. With the Metro touching Anand Vihar and slated to move into Vaishali and Vasundhara in Ghaziabad soon, the realty scene of the entire area has received a huge boost."
And talking about Faridabad, there are indications that once the Metro reaches here, it would give the rather sedate realty market of this once bustling town a new lease of life. Having reached Sarita Vihar, hopefully, its onward journey to Badarpur and Faridabad would commence soon.
Sanjay Khanna, director of Kailashnath Projects Pvt. Ltd, says there is no doubt that apart from giving a huge relief to lakhs of people who had to struggle to reach their respective destinations due to a poor publics transport system and a chaotic traffic,the Metro has also boosted the realty prospects of almost all the places it has touched and even to those place where it is planned to reach.
According to Madhav Joshi,a cartoonist working for News 24: "I was happy at Mayur Vihar till I came to know that the Metro was going to Vaishali in Ghaziabad.I was convinced that the news was correct and I booked a flat in Vaishali two years ago. I have recently shifted to my flat and I am really looking forward to travelling on the Metro in order to reach my Noida office."The Metro is slated to reach Vaishali within six to eight months.
Anil Sharma, CMD of Amrapali group, strongly believes that the Metro's ingress into various NCR cities likes Noida, Gurgaon and Ghaziabad would prove a game changer for all of them."We are observing that due to the Metro factor, the demand for flats of almost all the realty firms have gone up," says Anil Sharma.
While the Metro is on the move and there is still a great scope to improve its service, it has perhaps, unknowingly, helped the cause of even expatriates as well realty sector.
Courtesy:- Times Property dt-11-12-2010
|DE-STRESSING IN FARMHOUSES
|The tourism department of Haryana has initiated steps to promote farm tourism in the NCR, says C R RATHEE
The newfound craze of Delhi's neo-rich and the corporate to develop holiday or de-stressing resorts cheek by jowl to Delhi, Gurgaon and Manesar has caused a spurt in the prices of lands, particularly those located along NH 1,NH 2,NH 8 and NH 10 (Delhi-Mathura road, Delhi-Jaipur road, Delhi-Karnal road and Delhi-Rohtak road) and also in those along some link roads like Pataudi-Taoru-Palwal road, Gurgaon-Sohna road and Gurgaon-Sultanpur road.
According to the reports available with the real estate agents at Gurgaon and Faridabad, the land rates have crossed Rs 50 lakh to Rs 75 lakh per acre - all over-the-counter, and even at these rates, they say it is a sellers' market!
A senior officer of the Haryana Town & Country Planning Department (TCPD) said that during the last few months, no-objection certificates (NOC) have been issued to someone dozen parties to develop farmhouses-cum week end resorts in the Haryana part of the National Capital Region (NCR).He vouched that such NOCs are not granted for lands situated within 2km of the Kundli- Manesar-Palwal (KMP) multi-lane global corridor (under construction ) and for land pieces which are less than 2.5 acres in size. These farm houses or de-stressing resorts are, no doubt, eating into the green lungs of this prime region.
According to an executive of the Federation of Estate Consultants of NCR (Foenc) while earlier, the first choice of a VIPs and the affluent class of the national capital was the areas near Chhatarpur and the neo-rich had engulfed the prime fertile land on Faridabad-Sohna road and Sohna-Taoru road touching the KMP corridor, now Delhiites are sourcing land along other roads in the region.
The first VIP to have developed his rural retreat was former Prime Minister Chandra Shekhar, at Bhondsi, on the Gurgaon-Sohna road. But later, the neo-rich began acquiring big chunks of fertile agricultural land from Kundli to Karnal (via Sonipat and Panipat) to build farmhouses.
In a related development, the tourism department of Haryana has also initiated steps to promote 'farm tourism' n the NCR, conforming to the recently revised norms in this regard.
Sources in the Foenc say: "If you, your family and friends wish to inhale the fresh air of green fields, wish to watch a Harynavi villager milking the buffaloes and see the 'chaudharies' enjoying 'hooka' and you,your family and friends wish to spend a Sunday,away from the hum-drum of Delhi, drive to the rural parts of Faridabad, Palwal and Mewat districts."
It is now official that Haryana's tourism department has identified some 20 farms for the public-private partnership initiative. The farmhouse owners have committed to providing boarding and lodging facilities to tourists at reasonable rates.
The Nature & Nature Farm (near Tigaon) offers natural food, nature cure and natural surroundings. Surrounded by lush green foliage, a stay at this village with ethnic huts promises to give one a taste of the best in rustic and rural life.
Just half an hour away from Palwal is the sprawling farmhouse of Rajinder Bisla. It is considered a complete 'nature destination' for the Delhiites, to learn about the roots and traditions of 'Brij Bhoomi'. Further down, another one hour drive from Hodal on the Hodal-Hassanpur road fetches the Silver Scene Abode that offers an escape from the hectic urban life into the tranquil natural surroundings. It has raw earthy elegance and fully irrigated and vast fields.
The Progressive Farm in Faridabad opens a different world to tourist, as it abounds in flowers and chirping birds. At Sheilma Farms in Faridabad, a pool and swings for children make it an ideal place for a family picnic.
The YMCA Rural Centre on the outskirts of Hodal on NH 2 is equipped to impart technical skills of modern farming techniques and creates awareness to improve the health status of the community.
Courtesy:- Times Property dt-11-12-2010
|AUTO FIRMS & THE ZEN OF BUILDING MAINTENANCE
|For the first time, DDA will now maintain flats that are part of its latest housing scheme, for the next 30 years. Will private realty firms follow suit VIVEK SHUKLA writes
At the outset, just consider two situations. When you buy a car or a two-wheeler, the auto company gives you free service for a certain period and looks after the maintenance of your vehicle for donkey years. And just spare a thought for realtors. You buy residential or commercial property from realty firm for huge sums. And once the deal is sealed, realtors more often than not, feel they are not duty-bound to serve their clients. What a pity!
Surprisingly, for a change, the Delhi Development Authority (DDA) has decided to maintain the flats after their allotment. For the first time, DDA will now provide maintenance of the flats that are part of its latest housing scheme for the next 30 years.
DDA will maintain the usually neglected common areas like staircases and shafts of the flats that it will allot. A large number of the nearly 16,000 flats that are part of the new housing scheme will enjoy DDA's healing touch. The allottee, however, will have to pay a one-time lump sum amount for the maintenance.
While DDA realized its responsibility for the maintenance of the flats, will other builders too rise to the occasion and provide the much needed after-sale service to their clients.
In a very candid admission, Sanjay Khanna, director of Kailashnath Projects Pvt. Ltd, says that generally, it can be safely said that "realty firms hardly look after the affairs of buildings they build". Not surprisingly, due to this apathy, the buildings start decaying after some years.
Coming back to DDA, the cost of the houses in the new scheme will now include the cost of maintenance. Allottees of flats with lifts will have to pay 15% of the total amount as one-time maintenance and Allottees of flats in up to five storey buildings will pay 12%.DDA will now plaster the facade of apartment blocks, repair staircases, railings, balconies and floors and also take care of the common drainage lines.
Sunil Jindal, CEO of the NCR-based realty firm, SVP Group, says: "We have outsourced the maintenance to a team and they look after our projects and they address all the issues of our customers. You cannot survive in the market without taking care of the interests of your clients."He adds that they have deputed technically sound people who can ensure smooth operations of the infrastructure in the complex.
However, an expert of realty affairs says: "I have observed that as maintenance of apartments and commercial buildings is not a great business opportunity, most of the realty firms extend maintenance facility only during the first year or till such time that a resident association is formed, purely on a no-profit no-loss basis. The corpus collected is accounted for and the remaining funds handed back to the association for relevant maintenance activities."
It is no secret that residential and commercial buildings that look good and impressive are maintained by dedicated maintenance teams. Maintaining a building is not all about housekeeping and cursory maintenance. Far from being confined to plumbing and electrical work, maintenance of these complexes extends to include a host of items that require a fully functional office and maintenance staff on call round the clock.
Understandably, maintaining a complex not only includes housekeeping and round-the-clock emergency services, it also includes beautification and care of gardens and common areas, security, to name a few.
R K Sinha, CMD of SIS India Ltd, says that they had started an upkeep service for residential and commercial buildings and the response was very encouraging."Within a couple of months of starting our new business, we started getting a barrage of queries from both small and big cities, for managing buildings, "he says. According to this journalist-turned entrepreneur, the service is typically managed by a manager and office personnel complete with a wireless network to track field staff.
Anil Sharma, CMD of Amrapali Group, says: "While we extend the facility of lifetime maintenance, it is certainly not because it is an added business opportunity but merely to ensure the development is well taken care of."According to him, apartment maintenance is more of a bother than money earner. He, however, accepts the fact that this is one area which deserves attention from realty players.
Realty market watchers say that maintenance is the key to the upkeep of a residential complex. The going rate is around Rs 1 to Rs1.50 per sq ft for a normal residential complex with facilities like lifts, swimming pool and power backup. But complexes with a golf courses, etc, will have a higher rate, around Rs 3 per sq ft. All good things come at a price, so does maintenance of a nice residential complex. This is like owning a luxury car, which naturally has high maintenance cost and expensive spare parts. Similarly, maintenance cost of apartments with golf courses and other luxurious specifications is high.
This fact should however be made clear by developers to prospective buyers. Paying a high maintenance of Rs 2 psf, is not practical for a buyer of affordable home in the range of Rs 30 lakh to Rs 50 lakh, as he has to budget for the EMI and doesn't expect high monthly maintenance cost.
There is a clear-cut consensus among realty experts that any property, howsoever magnificently built, will deteriorate and lose its grandeur if it is not maintained with the requisite expertise.
A building managed by a reputed property manager helps enhance the company's image and gives it an edge in marketing its properties, especially under the present tight market conditions where people seek better value for money that they are investing.
Professional services and maintenance can always be achieved by hiring good vendors, Jindal feels. Talking about cooperative societies, marketing professional and social worker of East Delhi, Pavan Dhir says  that there is an attitude of indifference or lack of consensus on matters related to maintenance of the society, resulting in delays in decisions on building repairs, renovations and so on. A professional approach and outsourcing of property management helps carry out the jobs in time and also check deterioration of the structure.
It is learnt that there are a few international players in this business, like Knight Frank, Brooke Insignia, CB Richard Ellis and Sodexo. The few Indian companies that match these big names are IPM & SL, Radhakrishna Hospitality; etc Richard Ellis manages properties measuring over 10.8 million square feet in India. In Chennai, they manage 1.3 million square feet at Tidal Park, another 3.75 lakh square feet at Raheja Towers, and 68,000 square feet at ITC Centre.
Alimuddin Rafi Ahmed, CMD of ILD Group, says that unlike in the west, professional facilities management of buildings is a new concept in India."I sincerely feel that after developers construct and sell their products to customers, experts should be given the responsibility of managing the properties. They will always do a better job."
Sanjay Khanna is of the view that builders should give utmost priority to the affairs of the clients even after sealing the deal with them .It is better for them to create a dedicated department that only looks after the upkeep of the building of their clients, he says.
Courtesy: - Times Property - dt-11-12-2010
|Realty embracing corporatisation
|The real estate landscape is suddenly dotted with big corporate names like Tata, Godrej, Oberoi, among others. What makes this industry attractive to them and how are consumers reacting.
Big names have suddenly cropped up along the real estate landscape - be it Tatas (Tata Housing),Godrej (Godrej Properties),Oberoi Group (Oberoi Realty),Hero Honda Group (Arrow Infratech), Essel (Suncity),Jaypee (Jaypee Greens),Paras (Paras Buildtech) – nobody ,it seems, wants to be left behind in grabbing a share of the attractive real estate pie.
They all agree that the sector is disorganized, perhaps plagued with more issues than any other industry; but none seem deterred by the challenges. In fact, they seem ready to unleash the 'huge opportunity' that the realty sector can offer, given a combination of demand-supply mismatch in housing and a lack of quality real estate in all segments along with enchasing on their brand name and an existing customer base, which is brand loyal.
Take a look at Tata Housing. Their Raisina Residency was completely sold out and some investors confess that they did not even wait to see the layout plan. Ask any professional, and they say the name of a credible corporate house wins favour with them hands down vis-a vis a project by a private developer. Says Sumit Sethi, a Gurgaon based banker ,"There is a stamp of credibility if a good corporate name is associated with the project. To an investor like me, It gives an assurance about everything - right from project execution to quality of construction and timely delivery to clearances being in place. The fact is there is a lot of money involved in a real estate investment and it involves a huge risk, so the realty firm with a corporate brand makes it worth the while to take a calculated risk."
At the recently launched Godrej Frontier, the firm managed to sell over 200 apartments within two days of launch, even though it was not officially announced. Investors were not deterred by the fact that it is close to Manesar and is the group's first project in northern India.
So, do the corporate have an edge over other individual players in having better branding and marketability, understanding of consumer needs and preferences According to a Godrej spokesman, "The major advantage of being a corporate real estate developer is the brand name - the brand is instantly recognized even when the company undertakes projects in new markets. Most developers have a regional setup while a company follows customer-centric approach and even ropes in international architects and brings in newer designs. Typically, a company then ties up with reputed construction companies like L&T, thereby ensuring superior project quality and on-time delivery."
Godrej Properties started operations in 1990 and its first project was Godrej Eden woods in Thane. Subsequently, it developed projects at Worli sea face, Kalyan, Panvel, etc. Now, the company is doing large projects and has a presence in 11 cities across India. According to Milind Korde, managing director of Godrej Properties Ltd, "The company uses the joint venture (JV) model of development. This is an asset light model where a certain portion of the land cost is given as an advance to the landowner and the arrangement is either area sharing or revenue sharing or profit sharing."Even in the Godrej Frontier project in Sector 80 in Gurgaon, the Godrej Properties' joint venture partner for this project is M/s Frontier Home Developers Pvt. Ltd.
Their focus is on medium to high-end residential properties. Some of the key projects of Godrej Properties include Planet Godrej, Mahalaxmi, Mumbai (a premium high-rise residential project located in Mahalaxmi, Mumbai),Godrej Woodsman Estate (Bangalore) and Godrej Prakriti (Kolkata).Godrej Garden City is a 250-acre township planned in Ahmedabad. Besides, there is Godrej Avalon at Mangalore, a high-end residential project spread over 6 acres, which will have three 23-storey towers offering 3 and 4BHK luxurious apartments with panoramic view of the city, the surrounding valley, and the sea. The Godrej Group has several land assets across India and there will be arrangements as and when they get ready for development. Currently, the company has signed a JV for developing 35 acres in Vikhroli. This will be a mixed use development. One thing common to corporate developers is they are all seen taking the JV route. Many a time, there is an inherent advantage in tying up with a local developer who can consolidate land banks, get clearances and as a real estate broker says, "get the dirty work done". For a local developer, they derive mileage from their association with a big brand player. Essel Group's real estate division, Sun City, recently developed condominiums in Gurgaon in collaboration with a local player ABW.
The expectation of an investor or an end user is pretty high when a corporate name is associated with a real estate project. According to Brotin Banerjee, MD and CEO, Tata Housing Development Co Ltd, "As a corporate real estate developer of choice we work extremely hard to win over our consumers in delivering products with design excellence not only in aesthetics but also functionality. We have an approach that is customer-focused and customer-centered. Every residential or commercial premise is created o the basis of a thorough understanding of the stated and unstated consumer needs, which are obtained through a concentrated and focused consumer and market research. All our projects have been conceptualized and designed on the basis of a theme or concept, which is driven by consumer insights. We have an increased commitment to environmental stewardship and conservation that results in an optimal balance in terms of cost, environmental, societal, and human benefits while meeting the mission and function of the intended facility or infrastructure. All of Tata Housing's projects are green-building initiatives constructed and designed under the guidelines of the Indian Green Building Council (IGBC) and certified for Leadership in Energy and Environment Design (LEED) to positively contribute to the environment, like 'Xylem', Bangalore's first LEED Gold Rated Green Building; Aquila Heights, the first in India to be honoured with the AAA+ Certification by Construction Industry Development Council (CIDC) and Construction Quality Rating Agency (CQRA),which benchmarks construction quality levels."
Talking about the huge opportunity that the real estate sector offers, Brotin Banerjee says: "The opportunity presented by the Indian real estate industry is extremely large. There is immense potential in this sector due to the shortage of housing units, estimated at nearly 26.53 million and the contribution of this sector to India's GDP is 8%."However he voices concern that "the real estate sector is predominantly unorganized in nature. Most of the developers have scattered and fragmented local or regional presence. Further, the lack of a common regulatory authority increases the hurdles faced by developers and consumers."
Courtesy:- ET REALTY - dt-10-12-2010
|It’s time for a makeover
|Malls are going in for a complete makeover of the products and services they offer to arrest the declining footfalls, says ET Realty
Imagine for a moment that you are attending a marriage party or a big birthday bash inside a shopping mall. Did you ever hear of such a scenario earlier Perhaps, not! But, just wait for the time when you get an invitation for weddings, family get-togethers, birthdays, Xmas parties, or other such social dos in malls - maybe, you too would end up inviting people to attend your own private bash there someday! While this is a novelty, the trend is fast catching up across the metros.
While the capital will soon find a mall with a huge banquet hall inside, residents of other cities will not have to wait long to see the same kind of malls with banquet halls.
"It is good that realty firms are reinventing and redefining fast and giving space for banquet halls inside malls as well, "says Devinder Gupta, CMD of Century 21, adding,"We all know that except for a few malls all of them have been facing a severe crunch in footfalls. Hence, they have to make some additions so that people still visit them in a big way."
Talking about Delhi, it will soon see a mall with a big banquet hall, which will be able to host big parties with a capacity to accommodate up to 1,000-plus guests. Sanjay Khanna, director of Kailashnath Projects Pvt Ltd, says: "After a lot of consultations and market survey, we thought that if we give
space for banquet hall in our mall, it would be a first in India and it would create tremendous amount of curiosity among all the stakeholders on the realty sector."This firm is on the final leg of construction of a mall with banquet hall, Ivory Towers, in West Delhi.
Sudhir Mathur, strategic adviser of Kailashnath, says that their strategy started paying dividends even when their project was at a nascent stage, in the sense that many big-ticket players of banquet business have started making inquiries in order to book space there."They have finally zeroed on Tivoli Garden to start their business there as they are very formidable brand, "Mathur says.
PVR Ltd is about to start a new innings in the world of consumer entertainment - it certainly is no laggard when it comes to writing a new grammar for malls in India. It is likely that PVR will open the first of its 'Entertainment City' malls featuring an Olympic-size ice skating rink, a 24-28 lane bowling alley, food courts, micro brewery based 'Beer Island' and a medley of food kiosks next year.
PVR plans to introduce this format in other cities like Hyderabad,
Bangalore, Chandigarh, Pune as well as in all the major cities of the country. In a recent interview, Ajay Bijli, CMD of PVR, said they want their malls to be one-stop entertainment centers for consumers.
Realty experts say that as the footfall in malls have seen a steady decline in the recent past, it is very important that the whole business of malls be redefined."I thought that unless you keep on redefining yourself according to the times and needs of your clients, you have no chance to survive in the market, "says Sunil Jindal, CEO of SVP group.
It is clear that malls are putting in a huge effort in arresting the decline in footfalls. Both shopping malls and retailers are going all out to attract the maximum footfalls via exciting combinations of innovative marketing schemes and themes. Malls have increased their marketing spend on several novel themes for shoppers, accompanied by retailers offering bumper schemes across product categories with exciting price points and attractive festive packs. To own up, franchisee malls are facing fierce competition this time of the year! While DLF Promenade celebrated 'Festival of Happiness' till recently, Select City walk (Saket) organized Diwali Bazaar.DLF
Promenade held a 24-hour sale on October 30-31 with a "Free Women Pamper Zone "thrown in for good measure. Pushpa Bector, VP of DLF Promenade, says: "We bring for our women shoppers the opportunity to indulge themselves; those who shop for more than Rs 5,000 will get a free entry into The Pamper Zone at The Dome.Pamper Zone will have free services like Makeovers, Tattoo Zone, Hair Beading, Spa, among others."There is also a Jewellery Exhibition through which DLF Promenade brings to you a uniquely designed exhibition, Riwaaz 2010,where all the wedding related products and services are displayed at one place and people can buy products across categories like apparel, jewellery, accessories, cosmetics, according to their requirement, taste and needs. In a nutshell, it can safely be said that all the stakeholders of mall business are making efforts in their own way to make malls still relevant.
"I know that mall owners have hiked their marketing budgets and have announced big offers based on events, fun activities and incentive schemes so that they get a good number of people on a regular basis, "says Nuzhat Alim, marketing director of ILD group, which has a mall in Gurgaon.
Anyway, there is a strong possibility that with a lot of new and innovative efforts, malls attract lovers of shopping and also happy baratis.
Courtesy:- ET REALTY dt-10-12-2010
For elegant interiors
Fabric and colour of home interior should work together to create a feeling of elegance, warmth, peace and well-being.ET Realty finds out more
A home is an expression of who we are and how we want to live. It should reflect your personality and lifestyle. A home should be visually delightful and an inspiring combination of colour and design.
Home furnishing and fabrics contribute immensely in making your home a haven to return to each day. Fabric and colour should work together to create a feeling of elegance, warmth, peace and well being. Colour and design helps create a mood which befits the area for which it is used. By using bold and striking prints and contrasting colours, you can create drama. And muted ,subtle designs and colours can be used for a romantic ambience.
Some suggestions in decorating an interior space for example, a main living room, would be by combining colours like dove grey and deep aubergine purple, white, touches of glossy lacquered black furniture, a hint of chrome or silver through artefacts just to add a bit of shimmer and glitz. Decorative accessories like mirrors and other reflective surfaces, a murano glass chandelier in smoke grey, blown glass light fixtures and solid coloured rugs. Fabric used would be in rich solids or self jacquard with a striking print used sparingly wherever required.
All of this against a white flooring, since colours stand out best against a white backdrop.
A master bedroom would be designed using a more neutral palette of colours, for example, beiges and browns. Combine pale beige walls with a contrast back wall in deep chocolate or tobacco as a backdrop against a white upholstered bed sleek lined beige furniture in a solid colour with contrast chocolate cushions, a solid coloured rug on a white flooring, decorative pieces in white with a hint of gold or chrome rich in character and detail, not necessarily expensive. A floor lamp in west wood and acrylic with matching bed side lamps, lighting should be soft with a dimming facility.
Coffer lighting and overhead spot lights can be used to enhance decorative art objects or sculptures, a collage of family photos on a wall in coordinated frames, fresh white flowers in glass jars, candles, coffee table books, modern, abstract art on a wall .Accessories should be used to enhance the visual mix of colours bringing glamour to your home.
Children's bedroom would be designed using soft pastels, baby pinks, powder blue, lemon or mint green, white lacquered furniture or natural light wood. Pale coloured wall or decorative wallpaper in soft colours, a cozy upholstered chair or couch or leathered bean bag. Bunk beds with bedding in children's print. Colours to soothe your senses.
Courtesy:- ET REALTY dt-10-12-2010
|Designs that reflect lifestyle
While designing a house, planners have now become sensitive towards environment, besides taking into account the aesthetic concerns
Today's home plans are perpetually changing with style definitions, technology and materials constantly improving. The home plans on our drawing boards today are nothing like the places one may recall from childhood. Floor plans are changing to accommodate our new lifestyles and patterns of daily life. The flexibility in planning is the most sought after concept in today's residential planning. Wherein the home plans of yesteryear contained predefined areas for definitive activities, today's home plans demand large multipurpose areas. Formal dining, living and enclosed kitchens have given way to large multipurpose family areas. Sliding doors, movable partitions that allow flexibility in planning are being extensively used in today's residential designs.
Another aspect of residential planning that has changed tremendously in comparison to yesteryear is the 'accessible home design'. Gone are the days of spiral staircases, and sunken living rooms. Today's homes demand that the designs be comfortable for people of all ages and abilities. Wide hallways blend seamlessly with spaces to give an open feeling to the house. The walls and partitions are minimized to only very private functions here.
Abundant storage is a necessity in new homes that the onset of consumerism has brought in this decade. Spacious walk-in closets, dressing rooms, with plenty of easy to reach cabinets are incorporated in home plans and the simple wardrobe has reinvented itself with various types of organizer hardware available to maximize the storage facilities in home designs.
Even the parking spaces and garage sizes are changed to accommodate the popular SUVs and other large vehicles. Until a few years ago, cars parked outside one's house was a luxury to those who afforded bungalows, but today cars are taken up using the car lifts up to any floor the apartment is located on. Lifts that were once upon a time a relief for people to climb floors have transformed to private elevator concept wherein the lift opens into one's private living room.
Cathedral ceilings are passe but general high ceiling with abundant natural light is preferred. The building materials' technology has improved tremendously in the last decade and brought about many changes in residential building design. Factory-made building materials have come a long way and have enabled architects and builders to create bold new designs.
Developers are building homes similar to manufacturing refrigerators or motor cars, thanks to the availability of modern building materials from across the globe. One such projects in Lagos in Nigeria has adopted to international building formworks wherein a site encompassing 600 houses has achieved building one house in 15 days, thanks to the available technologies.
New designs allow use of glass and steel in residential spaces and the modular housing comes in all shapes and styles; from sleek straight lines to organic forms. The globalization demands contemporary look and feel to homes and these technologies enable an architect to achieve the same.
As much as the advent of new materials and technology have changed the facets of home designs ,it has also brought about increasing awareness of the effects these materials bring in with them. Home designers today have to be aware of the way our health is affected by use of chemicals used in paints, synthetic materials and composition of wood products. The most exciting and important trend in today's design is the increased sensitivity towards environment. Planners are taking a relook at ancient building techniques that used simple bio-degradable materials! A radical shift from the last decade where in anything new and modern was simply considered trend-setting without much weight age give to its green properties. Increasing interest in eco-friendly architecture is encouraging planners to add outdoor spaces to overall home designs. Gardens and green spaces are becoming a part of the floor plan where the sliding glass leads to patios and decks. Structurally, today's residential planning demands structures that multi storeyed luxury abodes are earthquake resistant and there is steady progress made in engineering of homes to be storm ready as well. The safety aspects are important in residential planning today.
Technology and smart homes are part and parcel of home planning with emphasis on security, energy efficiency with emphasis to time management. Access controls and CCTV cameras assure greater security at homes and controls for lighting and air-conditioning keep a check on energy bills. Integration of these is essential in today's home.
Courtesy: - ET REALTY dt-10-12-2010
|LIGHT UP RIGHT
|Good lighting can add new dimensions to flat spaces
Good lighting design can awaken the magic in spaces and change a mood or improve productivity. It can transform flat and unappealing spaces into an entirely new dimensional arena.
Good lighting technique involves knowledge of contrast ratios, luminance, illuminance, photometrics of lighting fixtures, depth, use of colour; task lighting requirements, correct lamp colour temperature, low voltage track or cable system, fiber optics, effective cove lighting systems, correct lighting for art, lighting control systems and much more.
Natural light is a fantastic asset of any home, but the quality of the light depends on the aspect of the room. A north facing room receives the harsh rays of the sun, as east facing room receives bright sunlight in the morning flowed by long shadows and no light later in the day. Using artificial lighting controls glare and maximises the available natural light in north and east facing rooms.
South facing rooms have warm light all day, although it changes throughout the day and year. The midday sun is usually so bright it flattens everything out. South-facing rooms are mainly chosen for the kitchen, main living areas and other rooms that have maximum utilization. West facing rooms receive the sunlight at the hottest part of the day, which can cause glare. In the late afternoon, the room is subject to long shadows and softer light. To maximize the use of natural light mirrors, curtains, glass windows and doors, panels or partitions are most often utilized.
Ambient or background lighting plays the part of daylight and is usually provided by a central pendant light, a hangover from the days of gas lamps. It can be the source of most lighting problems as it creates a bland, flat effect. However, if you supplement general lighting with some or all of the other types, you end up with a great, flexible scheme. Staples include ceiling mounted bowls, wall lights and standard lamps.
Accent lighting gives texture, focus and shape to general lighting, adding depth and shade, with shadows in some corners and pools of light in others. It’s formed by a mixture of halogen spotlight, down lighters, up lighters, tracks and table lamps. With the latter, opaque shades that direct light down and prevent it spilling out are used. Tracks are great for lighting different areas of a room.
Task lighting is what you need in order to do a specific job, whether it’s reading, working at a computer, cooking, drawing or sewing. It needs to be focused on the area of use. If light seeps out, then that area is likely to get glare from other surfaces, especially computer screens. Task lights come with tungsten, halogen or fluorescent bulbs.
Lighting is of the utmost importance for creating the right ambience. By experimenting with different types of lighting, the mood of a room can change from calm and romantic to energizing and vibrant. Create a bright, warm glow with a combination of subtle light source with an emphasis on accent lighting. Reflective surfaces such as mirrors can be used to bounce candlelight around the room and crystals, diamonds, mirror balls and reflective baubles are ideal for adding that extra festive sparkle. Depending on the occasion, use different coloured light and bulbs and adjust the flicker speed on lights for a party feel.
Make a large room with high ceilings appear cosier; by adding several types of small lamps, singularly or in clusters to create low pools of light. Also, consider shadows when arranging your lights and add pierced-lanterns or light shades to create unusual patterns on the walls and ceilings.
You can change the mood of a room by experimenting with different types of lighting. Create a bright, warm glow light sources with an emphasis on accent lighting.
Courtesy:- Times Property – Dt – 27-11-2010
|GREEN TECHNOLOGY IN HOME DESIGN
|Furniture and other household products are being manufactured in a way to make minimal impact on the environment.
The buzzword in these days of energy consciousness is green, and the fact is that all of us can do something towards the cause in our own little individual ways. Creative professionals point out that your creativity can have free rein even as you make choices that help protect the planet.
Increasingly, they observe, manufacturers are creating products that have minimal impact on the environment, whether because they’re made from organically grown cotton or because they’re made with renewable resources. They are, of course, talking about the international scenario, but if you think about it, in India, we have been using organically grown cotton for ages in our home décor.
To begin with, consider your living room, and how you can make it greener. There are three main considerations in looking at green design. One is where the stuff of the furniture comes from are slow growing trees used in creating it, or is it made of renewable resources, for example? Second, what is the impact on the environment of the item in question – for example, how much electricity does is use? And the third consideration is how healthy the item is for the people, and pets, using it?
While studying green design for living rooms, it was observed that the stuff that makes upholstered furniture flame retardant is not that good for human consumption. The flame-retardant polybrominated dipheny1 ethers, or PBDEs used in upholstered furniture, have come under scrutiny by hose concerned with toxins in the home. The European Union has already banned some of them. They also say that there is some upholstered furniture that is PBDE free. Look for furniture that is make with organic cotton, filled with organic cotton batting, and make with untreated woods, they advise. They also advise searching for living room furniture that isn’t upholstered at all; there are chaise lounges available, for instance, that are made out of cork. This is also a winning material because it is renewable, and impervious to rot and mold, which is important for anyone with allergies.
Just a little care could go a long way towards making your environment a better place. Next time, don’t just buy readymade furniture blindly; look for ways you can make your home green.
Opt for plants
Plants can make your space green in more than one sense of the term. You can keep the air in your home clean by using plants. Instead of opting for non-utilitarian décor items and furnishings, try a foliage plant. Consult an expert to ensure that you choose the right plants for your environment.
Some require more light than others, so make sure you know which the right on is. Select hearty plants that are easy to sustain and maintain. Make a effort to take care of your plant. Replacing a dead plant with a new one carries an environmental impact.
Use green products. Planters make out of recycled or renewable materials are perfect. So the next time, don’t settle for a needless knick-knack, when you can have a real live fragrant plant in your home instead.
Courtesy: - Times Property – Date – 27-11-2010
|VISION FOR A NEW INDIA!
|One needs to visualize the future in the next 20 years and then work backwards to create economically, socially and culturally sustainable models, says G R K Reddy, CMD of Chennai – based infra major Marg.
MARG, has interests in infrastructure development with presence in diverse sectors like ports, ship-repair yards, dredging, marine logistics, special economic zones (SEZs), airports, power and multi-level car parks, MARG’s real estate business constitutes commercial spaces like malls, serviced apartments, hotels and residential spaces including villas, row houses and affordable homes, Established in 1994, MARG is promoted by G R K Reddy, CMD, a first generation entrepreneur with over two decades of hands on experience in financial and infrastructure related businesses.
Reddy says, “One needs to visualize the future in the next 20 years and then work backwards to create economically socially and culturally sustainable models.”
MARG Swarnabhoomi, the company’s flagship project in urban and industrial infrastructure, is being developed as an inclusive and integrated ‘new paradigm’ city based on the principles of new urbanism, with unique offerings for business, living and learning. Based on the scenic East Coast Road (connecting Chennai to Puducherry) and designed by HOK, MARG Swarnabhoomi reflects Reddy’s drive to master plan the social fabric and his vision to design a new product for current and future generations.
Spread over 1,000 acres and housing two special economic zones multi-services and engineering MARG Swarnabhoomi is an aspirational habit6at that embodies the principles of “inclusive growth”. Reddy says” “The ever increasing urbanization in Tier 2 cities will lead to hygiene and pollution issues that can only be solved by upgrading existing infrastructure or building new cities. MARG Swarnabhoomi is only leading this trend.”
MARG also has a promising portfolio comprising MARG Karaikal port and another one at Mugalyar; urban residential clusters under the MARG Properties brand; MARG Junction Mall, Multi-level car parking and the Bijapur and Bellary airports. MARG also offers related services like dredging and logistics. From IT parks to residential constructions from seaports to airports, from integrated cities to value-enhanced homes, its expertise spans across the full infrastructure value chain.
Reddy sums up:”Our business of holistic regional development unlocks economic prosperity for all. We have embarked on an innovation led development that few have attempted. We are part of the canvas of a new and sustainable India and hence an intrinsic part of the growth story. ”
Courtesy:- Times Property – Date: 27-11-2010
|FORECLOUSERE RIGHT ENABLES MORTGAGEE TO RECOVER LOAN AMOUNT
|Ashish Gupta outlines some options available to a mortgagee under this law
The right of foreclosure is a right available to a mortgagee to recover his outstanding money. Mortgage is a transfer of interest in a property to secure payment of money advanced. A mortgagee provides some property as security to the mortgagee. The transaction is effected through a document called the mortgage deed.
The relevant provisions regarding foreclosure are contained under section 67 of The Transfer Property Act. The foreclosure right can be enforced on failure of the mortgagee has a right to obtain from a court a decree that the mortgagor should be absolutely debarred of this right to redeem the property, or a decree that the property be sold. A suit to obtain a decree that the mortgagor be absolutely property is called a suit for foreclosure.
This right of foreclosure can be exercised by a mortgagee only if these conditions have been met:
• The money has become due for payment
• There are no contrary conditions in the mortgage deed
• At any time after the mortgage money has become due to the mortgagee but before the mortgaged property
• At any time after them mortgage money has become due to him but before the mortgage money has been paid or deposited by the mortgagor
The remedy depends on the nature of the mortgage. in case of a simple mortgage, the right of foreclosure is not available. To remedy is either to proceed against the mortgagor personally or for sale of the mortgagee will be in possession of the property and will continue to be so until the debt is repaid in full. A person interested in a part of the mortgage money may institute a suit only to a corresponding part of the mortgaged property. However, this is subject to the condition that the mortgagees have severed their interests under the mortgage with consent of the mortgagor.
In case of anomalous mortgage, the remedy depends on the terms of the mortgage; the remedy depends on the terms of the mortgage. In the case of an English mortgage, the mortgagee may bring a suit for sale of the property. In case of conditional sale, the mortgage matures into sale on the failure of the payment of debt.
The mortgagee may foreclose depriving the right of redemption. In case of mortgage by deposit of titles deeds, the remedy is to sue for personal decree of for sale of the property. The right to institute a suit for foreclosure or sale is not available to a mortgagee for any work of maintenance in which the public is interested.
A mortgagee may hold two or more mortgages executed by the same mortgagor. In respect of each of such mortgages, he may have a right to obtain a decree of foreclosure. In case he sues to obtain such a decree on any one of the mortgage, he will be bound to sue on all the mortgages in respect of which the mortgage money has become due.
Courtesy:- Times Property – Date: 27-11-2010
|A BENCHMARK OF MODERN INDIA’S REALTY
|Amrapali, a much admired brand in the field of realty has earned the respect and appreciation of people because of completing and handing over projects as per schedule.
In nearly one decade and a half of its presence in the field of real estate, Amrapali Group has created more than 40 world-class complexes in residential, commercial, office and hospitality space. Today, this real estate major joys pan India presence having presence in over 20 cities. The group, under the visionary leadership of its CMS, Anil Sharma, has not only excelled in creating a trail of landmarks but has also diversified into fields like processed foods, hospitality and education. The group has made major inroads in the hotel industry by joining hands with intercontinental hotels group (IHG), a globally acclaimed brand in the hospitality sphere, to develop a chain of hotels in India.
The success story of this leading realty brand is driven by a sound vision. The core philosophy is to give shape, in the minutest detail, to the aspiration of today’s demanding gentry. So, the properties that the group builds are aesthetically and strength wise unmatched, but are surprisingly affordable. the malls that it builds are best n their class and a result of well planned strategy, taking care of all details for the success of the business establishments occupying the mall. With impeccable paraphernalia of the latest tools and technologies in addition to very dedicated professional workforce, the group has invariably succeeded to build and deliver projects n time. Sharma says, “ Amrapali is a much admired brand in the field of realty. We have earned the respect and appreciation of people because we complete and handover projects as per schedule. It goes without saying that every project built by Amrapali is world class and offers the best value for money.”
In the fast changing ambience of Greater Noida, the Group has come up with a revolutionary living concept known by the name of Amrapali Terrace Homes, the project offers high rise accommodation where each apartment has its own terrace garden a unique dimension to the apartment lifestyle. But the attraction of this feature-rich residential complex doesn’t end at that. It has a shopping arcade, that. It has a shopping arcade, multi-cuisine restaurant, spa and gym. A pleasant surprise for residents of the premium project is MS Dhoni sports Academy. This king of elite sports academy is something unheard of in such affordable residential complexes, but then that is how Amrapali Group works- offering customers more than their expectations.
The group has completed Amrapali Mall at Bareilly and has organized a grand opening has organized a grand opening for this very spacious mall on November 27, 2010. The star attractions of this excellently located mal are the wide central atrium, central air-conditioning, 3-screen multiplex, great ambience and capsule lift. The group is offering very attractive profit-based-lease-scheme to facilitate entry of even smaller entrepreneurs to boost their business by opening a sop in the most happening mall of the city. Many reputed brands have already occupied the space of their choice. Amrapali Clarks Inn, a reputed hotel, has already started operations. Set to impact the shopping and entertainment culture of the city n a big way, Amrapali Mall has been developed to become the commercial district of the city right from the word go.
Hospitality space n India presents great promise and potential, provided the infrastructure and services could be comparable with the best in the world. N association with IHG, Amrapali Group is setting up six world class Holiday inn Express Hotels with an initial investment of close to Rs 1000 crore. These top class inns are slated for the cities of Noida, Udaipur, Jaipur, Indore, Kochi and Patna. Beautifully incorporating ethnic and modern touch, these inns are poised to be a trendsetter in the hospitality domain. On the occasion of the formal association with the international hospitality brand Sharma pointed out, “India’s need for world class hotels consistent with rapid economic growth makes this an opportune time for us to expand our hospitality portfolio. HIG, with its well-recognized and profitable brands, offers us a strong foundation to deepen our focus in hotel development. We look forward to introducing the fast growing Holiday Inn Express brand that offers an ideal mix of convenience, comfort and value. ”
Amrapali practices perfection. Some of the other built in factors enjoying consistent presence in every project of the Group are abundance of luxury and life style features with green building and Vaastu concepts, styling designing, strength, build-up area and green ratio facilities and ambience. “We constantly better our benchmarks in order to keep pace with the changing needs of thousands of our satisfied customers,” Sharma sums up.
Courtesy: ET Realty – Dt – 26-11-2010
|DDA announces new scheme
AVAILABLE 1, 2, 3 BHK houses, priced between Rs. 9 lakh and Rs. 1.12 cr, up for grabs
Your wait to own an affordable house in Delhi could end soon, with the Delhi Development Authority launching its new housing scheme next Thursday. It is biggest housing scheme till date, the Delhi Development Authority (DDA) is offering 16,000 flats, priced to suit all budgets across the city.
Applicants will have to deposit Rs 15 lakh as registration amount, which will be refundable. The scheme will be launched on November 25 and applications will be accepted till December 24.
The draw will be held within four months from the last day of closure.
The flats are located in areas such Vasant Kunj, Mukherjee Nagar, Motia Khan, Jasola, Dwarka, Rohini, Narela, Jaffarabad, Kudli and Gharoli.
There is a mix of one bedroom, two bedroom and three bedroom houses and the prices are between Rs 9 lakh and Rs 1.12 crore.
The cost of construction of these flats ranges from Rs 1,536 to Rs 6,069 per square feet. The most expensive flats in the lot will the ones in Vasant Kunj.
These furnished flats have been made with higher specifications and will cost more than Rs 1 crore.
Information brochures for the housing scheme, along with application forms, will be available at select branches of state bank of India, IDBI bank, Axis Bank, HDFC bank, Central Bank of India, ICICI Bank and Union Bank of India, Brochure will also be uploaded on the DDA website on November 25 and applications can be submitted online too.
Singed by controversy due to forged documents being submitted by several applications in its last housing scheme in 2008, the DDA has introduced more stringent rules, this time around.
A new condition, that requires the allotment money to be from the bank account of to allottee, has been inserted.
The allottee will also have to submit a copy of the bank passbook and bank certificates at the time of possession.
This is also the first time that houses for the economically weaker sections of society have been included in a housing scheme. These flats include janta one room houses in areas like Narela, Trilokpuri and shivaji enclave.
These houses are priced between Rs 3 and 6 lakh the registration amount is Rs 50,000.
Any citizen of India, not younger than 18 year
Applicant should not own any residential flat or plot in full or in part on lease hold or free hold basis in Delhi either in his or her own name or in the name of spouse o r minor or dependent children
Both husband and wife can apply but only one will be allotted flat in case both are found successful
One person can submit only one application form
There is no income criteria
Applicant needs to have valid pan card and a bank account
Allotment money should be from allottee’s bank account
How and where to apply
Brochures are available at select branches of SBI, IDBI bank, Axis Bank, HDFC Bank, Central Bank of India, ICICI, and Union Bank of India
The cost of the form is Rs 105; details of brochure available on DDA website from November 25
Documents to be submitted include self-attested copy of PAN card, proof of residence and self-attested copy of bank account
The reservations will be such: SC:17%, ST:7.5% and one percent each for war widows, disabled and ex-servicemen
Courtesy - HT - Dt -20-11-10
|Flats for all economic categories
Form Vasant Kunj to Kundli, the DDA Flats Cover a Wide Price Range
Finally, Delhi Development Authority has announced what everyone has been waiting for. Its mega housing scheme will be open from November 25 to December 24 this year. Around 16,000 flats will be offered for the draw. These are located all have Delhi in colonies like Vasant Kunj, Mukherjee Nagar, motia khan, Jasola, Dwarka, Rohini, Narela, Jaffarabad, Kondli and Gharoli besides other colonies.
The cost of construction of these flats ranges from Rs 1536 to Rs 6069 per square feet. The flats located at Vasant Kunj, which have been built according to higher specifications, will attract a higher price. The cost for the new scheme flats includes lumpsum maintenance charges for exteriors and common portions.
In order to make the flats accessible to all sections or society, there is a mix of one bedroom, two bedroom and three bedroom houses, expandable units and Janta one room houses. It is for the first time that the one-room tenements located in Narela, Trilokpuri and shivaji enclave have been included in the scheme.
Any Indian citizen who has attained the age of 18 years can apply for the flat provided he or she does not own any residential flat or plot in full or in part, on leasehold or freehold basis, in the capital either in his or her own name or in the name of his/her wife/husband or in the name of minor or dependent children.
Both husband and wife can apply but only one will be allotted a flat n case both are successful in the draw. One person can submit only one application form. There are no income criteria. The applicant can apply only if he has a valid pan card and a bank account.
For the first time, it has been made mandatory that the entire allotment money should be from the bank account of the allottee and a certificate to this effect will have to be submitted at the time of possession.
The applicant will have to deposit a registration fee of Rs 1.5 lakh. But for the Janta one-room tenement category, the amount is Rs 50,000. The cost of the form is Rs 105 and it will be available at various designated branches of the banks. The form details which have been provided in the brochure will be uploaded on the website of DDA on November 25.
The reservations for scheduled castes will be 17%, scheduled tribes 7.5%, one per cent for war widow, one percent for the physically handicapped and one percent for ex-serviceman.
Drawing a lesson from last time when the draw came under a cloud, DDA says to ensure that the money is deposited by the allottee only, a copy of the pass book along with bank certificates will have to be given at the time of possession and it will also be sent to the income-tax department by DDA.
The draw will be held within a period of four months from the last date of closure of the scheme and, therefore, no interest will be paid for this period. Money will be refunded to unsuccessful applicants at the earliest, and in case the money is not refunded within four months time from the closure of the scheme, simple interest at the rate f 5% per annum will be paid. The refund as in the earlier scheme will be paid though the banks only.
Courtesy – Times of India – Dt. – 20-11-2010
|Land acquisition now made trouble-free
Courtesy – Times Property – Dt – 20-11-2010
Haryana will give financial incentives to those who abstain from initiating litigation over land acquisitions.
In a forward-looking move to reduce the number of litigations and to expedite land acquisition in the state, Haryana government introduced a no litigation incentive to those who abstain from initiating litigation over and above the government fixed rate. This revised policy is likely to give a leg up to planned development of cities and other urban areas in the state. The amended policy is also likely to placate angry farmers in the state who have been demanding a hike in compensation.
Experts feel this will also give a push to the development of residential as well as commercial space in cities like Gurgaon, Faridabad and Sonipat.
“The increased minimum floor rate(MFR) might also pave way for withdrawal of several cases pending in different courts-meaning, the government residential projects which are now facing problems would get major relief,” said a real estate consultant. As per the amended land acquisition policy, the MFR has been almost double and in some areas it has been increased further: in a clear-cut commitment to push rehabilitation of the affected families the government announced that landowners will be given government jobs. The change3s came into effect from September 7.
In his announcement, the state chief minister Bhupinder Singh Hooda said the highest of Gurgaon. Under the innovative concept of no litigation incentive, landowners will get Rs 72 lakh per acre of land falling under the Gurgaon municipal limit. Otherwise, the revised MFR for Gurgaon land owners would be Rs 40 lakh per acre against the prevailing rate of Rs 22 lakh per acre.
“This was long due for the farmers and we wanted to come out with a progressive land acquisition policy. This has been widely welcomed by farmers and landowners,” said the CM’s media adviser Shiv Bhatia. However, many experts are sceptical and question whether this policy won’t end up giving private players an advantage. “Landowners would prefer to sell their land to private players at a higher rate than letting the government acquire it at much lower price. They would end up taking the case to courts,” said a property consultant.
As per the revised rate, for land located within the notified limits of Faridabad and Panchkula municipality and areas falling outside the development plans of Gurgaon-Manesar Urban Complex, Sohna and Sonipat-Kundli urban complex, the MFR has been fixed at Rs 54 lakh per acre. This will include Rs 6 lakh as ‘no litigation incentive’. The areas which fall under the development plans of Bahadurgarh, Rothak, Rewari, Dharuhera,Bawal, and Panipat towns, the MFR is Rs 45 lakh per acre, including Rs 5 lakh as no litigation incentive.
The government has announced an increase in annuity amount payable over 33 year, as well as its incremental annual hike, along with an offer of bigger-size plots in case a residential property is acquired. The affected farmers would also be offered industrial and commercial plots keeping in view the location of the land and in case they are rendered landless after the acquisition.
The minister of state for agriculture and Gurgaon MLA Sukhbir Kataria, has said that as per the policy, in case a landowner whose land is acquired purchases alternative agricultural land within the state in tow years, he would be entitled to get exemption on stamp duty and registration charges.
“Moreover, 2@ of the land acquisition compensation amount will be set apart by government agencies like HUDA and HSIIDC for community development and infrastructure works in villages, which are affected by the land acquisition for industrial or residential development. Similarly, another 1% of it will be use on skill-development initiatives for the dependents of oustees and other landless people,” he adds.
|Industrial growth poised to leap forward
Bahadurgarh, one of the upcountry areas, rings bell now. Given easy connectivity form Delhi and cheaper land rate, as low Rs 14,000 per square yard, many industrialists have started their factories in this area. 100 more factories are slated to start their production by next year. Haryana government is showing positive attitude too; looking at the enthusiasm of private players it wants the place fast. Pallavee Dhaundiyal Panthry takes a look at the ongoing developments in the area
Bahadurgarh, which may confuse you with some tourist ‘garh’ or fort, has been much talked about as an upcoming industrial hub, these days. In fact, our last feature on Bahadurgarh did mention the essence of this place as an industrial terrain. The place is very approachable form Delhi, for it is less distant from the capital and has good road infrastructure now. The Delhi Metro route till Mundka has also benefited many people traveling to Bahadurgarh. Soon, Delhi Metro is slated to extent and pass through the heart of Bahadurgarh, which will change the facet of this place.
Earlier, the development of industrial belt or residential zone use to be the driving force behind creating road connectivity. But now, the roads development plans and connectivity is deciding the way future cities are emerging, or are likely to come up. Kundli-Manesar-=Palwal expressway, 135 km- long, coming up around Delhi, is one of the best examples here, which would prove to be a bonus to Bahadurgarh. KMP Expressway is set to prove the single major catalyst of both residential and commercial development in Haryana. Also known as Western peripheral Expressway (WPE), it is already under construction and will be completed soon. The corridor will see major industrial and residential development in the next few years. Already, major developers like TDI , Parsvnath Ansals, Omaxe have started coming up with mega residential and commercial projects close to the expressway to cater to future needs.
The alignment of the expressway takes off from National Highway-1 near Kundli, crosses NH-10 at West Bahadurgarh, crosses NH-8 near Manesar, and finally joins NH-2 near Palwal. It passes through Gurgaon, mewat, rohtak, jhajjar and Faridabad, which are the fastest growing urban centres in NCR.
To boost industrial development along the corridor, specialized industrial estates have been planned at strategic locations. They include footwear and leather-garments parks at Bahadurgarh, food park at Kundli in Sonipat, gems and jewellery park at Udyog Vihar in Gurgaon, and two apparel parks, one in Gurgaon and another at Barhi in Sonipat. Besides, we will bring major relief to the commuters on this highway.
Industrialists are quite happy with the ongoing progress in and around Bahadurgarh. Amit kapur, member, Bahadurgarh Chamber of commerce and industries and MD, Everest Blowers, said: “In terms of overall development of Bahadurgarh, it is progressing with good pace now. With progress in terms of Delhi Metro’s expansion plans, six lane Delhi-Bahadurgarh-Rohtak highways and KMP expressway, I can easily foresee a new Bahadurgarh in next five years.”
Apart from widening the existing national highway, two long bypasses are also in the process of construction at Bahadurgarh and Rohtak. The bypass of Bahadurgarh would be 13 km long and bypass of Rohtak would be of 25 km. “though these road projects are running behind scheduled time, yet, once they become operational, will prove a boon for Bahadurgarh’s and the state’s economy”, said NL Narang, general secretary, BCCI, and owner, Filcard Industries
Changing face of Bahadurgarh in next one year
Sector 16 of Bahadurgarh has been developed as a general-purpose industrial area, sector17 as a footwear park and sector 4B, which is spread over an area of 189 acres, is the newest expansion area of the estate. Gulshan kumar, DGM, HSIIDC, industrial estate, Bahadurgarh, District Jhajjar, gave a clear idea of current scenario these three sectors. In sector 17, out of 368, more than 200 plots are under construction and 10 units are carrying out production in full swing. Sector 16 has 241 plots in total, out of which 100 are in the construction mode and five units are in the production phase. Sector 4B, has 46 plots and only tow are in the process of construction so far.
According to kumar, Bahadurgarh will be a different place in just one year from now. He explained, “There are many serious as well clever players in Bahadurgarh. Serious ones are already in their production phases and some of them are I construction mode, while the clever ones are only sitting on their plots. We have, so far, resumed nine plots as owner of these plots were only awaiting prices of these plots to escalate so that they could have sold them further. Notably re-sale of such plots is completely unauthorized; it is not recognized by the government and has no value.”
He future added, ”We have given a notice to all to finish their construction work by July 2011. Out of 200 plot, which are under construction, we expect at least 100 to start production by next year. The functioning of 100 factories is assured to bring a good change in this area.”
Courtesy – ET – Dt -19-11-2010
Luxury now within your reach
TDI has opened bookings of Tuscan Heights Phase-II with 250 apartments following overwhelming response of Tuscan Heights Phase-I project at Kundli. Rajarshi Bhattacharjee reports
As the real estate sector in NCR is in full infrastructure limited has more than just pocket friendly price to offer with its strategically located project at Kundli. After an overwhelming response for Tuscan Heights Phase-I, TDI has introduced Tuscan Heights Phase-II where luxury meets affordability.
A part of sprawling 53-acre Tuscan city. Tuscan Heights Phase-II is located at TDI city at Kundli. Nestled right beside the NH1 in a clean-green ambience, it is 15 minutes signal free drive away from up market residential hubs of north and North West Delhi. For it s strategic location on the border of Delhi along NH1, Kundli is considered the gate way to prosperous states like Haryana, Punjab and Himachal Pradesh.
Uniqueness of the location and land rates has also made this fast developing city an ideal destination for investment. Apart from the third existing industrial zones nearby – HSIIDC, Kundli industrial Area (KIA) and Rai Industrial Area (RAI), the growing industrial and business zones here are likely to generate significant job opportunities, Tuscan Heights also boasts of having the upcoming 5000-acre Rajiv Ghandi Education City in its proximity that is likely to emerge as a global academic hub. Top universities from around the world and a number of their Indian counterparts have already expressed interest to be a part of the Rajiv Gandhi Education City at Kundli.
On the other hand, land rates at Kundli are presently one-tenth of what these are in up market residential areas of North Delhi viz Pitampura. Rohini etc. , which is an opportunity for both customers and investors. Appreciation of value is also estimated to be significantly high considering the planned development and investment prospects here. When TDI city was launched four year back, land rates Kundli was Rs 4,750 (approx Rs 5,000) per sw. yds at TDI City. Today it stands at close to Rs 25,000 per yads. Rate has per sq. yds. This Rs. 25,000 per yds. Rate has potential to further appreciate manifolds in near future.
In lines with the first phase, Tuscan Heights Phase – II is designed to offer the look and feel of Tuscany in Italy, which with its capital Florence is considered as the birthplace of Italian renaissance. A typical Tuscan village is synonymous with the landscape dotted with heritage architecture, pebbled pathways, ornamental street lamps and railings, fine cuisine, exquisite red wine, along with music, opera and much more.
Reliving the charm of Tuscany, this township too will have classical fountains, water bodies, cobbled pavements and a central plaza, which is a public square in an Italian town. The whole place will have arches as motifs and the developers promise world-class amenities with professional maintenance facilities, as designed by famed architects HO Partner, Hong Kong.
Kamal Taneja, managing director. TDI infrastructure limited says,”A part from being a business destination, Kundli has evolved to be a fantastic place to live at. Considering the strategic location and appreciation of value at Tuscan Heights or aim is to provide high quality and international flavor in architecture, integrated in a township with world class infrastructure and amenities. The USP of Tuscan Heights is luxury within your budge.”
The other social infrastructure adjacent to Tuscan Heights include TDI mall, Oxford Street, Kings street to name a few, for shopping and entertainment, state-of-the-art hospital and healthcare facilities, primary and high schools, a health club, temple, among others.
But to make it within the reach of all pockets, Tuscan Heights offering 2 BHK, 3 BHK and 3 BHK+ study are priced at Rs 2175 per sq. fts. If that is not all, TDI infrastructure Limited is also offering exciting schemes like assured gifts like televisions, air conditioners, food processors, holiday packages for couples to Thailand, Dubai Singapore with each booking till 15th December 2010.
Courtesy – ET Realty 19-11-2010
|War against the bubble
RBI’s new measures are likely to prevent a real estate bubble and help home buyers, says Vandana Ramnani
Sanjay Modi and Bhaskar Roy, Both IT professionals, have been looking for homes that suit their Rs. 40 lakh budget. They have scouted markets such as the Noida Expressway, Indirapuram, Vaishali and even Gurgaon, but have not been sure enough to zero in on a property of their choice. And right in the middle of their hunt, the Reserve Bank of India (RBI) unveiled its second quarter review of monetary policy last week, making norms for housing loans more stringent, aiming to curb excessive borrowing. It is estimated that property prices in most metros have already touched pre-slowdown levels. The average rise in property prices this year (from January 1 till today) is as high as 30% in some markets. So, how will the apex bank’s recent announcements impact Modi and Roy?
Cough up 20%
As per the new norms, buying a home will became expensive for those who are totally dependent on a bank loan. So, its time you saved up before going in for a home or a loan. Buyers can now avail only 80% of the value of the house from a bank and will have to arrange for the remaining 20% on their homes. So, if their budget is Rs. 40 lakh, the maximum loan they can be granted by the bank is Rs. 32lakh – much less than the almost 90% loan being sanctioned by some banks. This measure is intended to check overheating in the property market and the immediate reason seems to be the 10-90% scheme wherein the home buyer has to pay only 10% of the property value upfront as booking amount and 5% on possession. It is a preemptive measure to rein in inflation and prevent an asset bubble in real estate.
Economic growth and favourable macroeconomic factors have so far been sending the real estate sector into overdrive. In most cities, property prices have gone beyond the consumer’s reach and investor driven speculative activity has resumed. Says Sachin Sandhir, managing director and country head, RICS (Royal Institution of Chartered Surveyors), India,”These ‘short-sighted’ moves have proved detrimental in the past and have once again reared their ’ugly head’ and” could undoubtedly affect the overall health of the market. These ‘pre-emptive’ measures by the RBI are in anticipation of another property bubble being created as a result of increased domestic inflows in the real estate sector which have been driving property prices to new high in major markets over the last few months.”
The fact that banks will now provide only 80% of the loan is a good guideline as this will ensure that only serious home buyers with borrowing credibility make a real estate purchase by availing a home loan. This will reduce risk in the system and control an asset bubble. People may have to put in additional finances but in the loan run it will ensure health in the financial system and reduce speculation, points out Adhil, CEO and founder, BandBazaar.com
In its review of the monetary policy, the RBI has made its unease with the special rates or the teaser home loan rates scheme official. These loans are offered at a discount of the first few years to entice customers, after which the rates go up. To discourage teaser loans, the RBI has increased the provisioning for such loans from 0.4% to 2%. This means that for all outstanding teaser home loans, banks will now have to set aside as a cushion a onetime additional standard provision of 1.60% and in the future account for this additional standard provisioning norm if they decide to continue with the teaser rate scheme. Such schemes present a high risk to banks as borrowers are likely to default/find it difficult to service their loans in the loan term when the prevailing-normal rate of interest becomes applicable. The move by the RBI will now force banks to rethink their strategy with respect to such product, given the extra associated costs.
According to shetty of Bankbazar.com, if the buyer decides to go in for a house now, he could be in position to cash in on the teaser rate schemes till they exist. However, buyers should look beyond the low rate being offered for the first three years as they will be paying interest for the next 20 years (the average life of a home loan).”My advice is that for every loan, calculate the total cost. Second, take your expected EMI payment over the lifetime of the loan and add the processing cost to that. With that you will arrive at the total coat of the loan. As far as teaser rates are concerned, what matters is what you pay from the fourth year onwards up to the 20th year. Customers should go for a home now as rates are headed upwards, says Shetty.”
Loans above Rs. 75 lakh made expensive
The apex bank has also increased the risk weight on housing loans of Rs. 75 lakh. The rise in interest rates on large-ticket loans is expected to be higher given the increased risk weight in the segment. This could help moderate the demand for loans of above Rs. 75 lakh and control overheating in the property market. “The risk weight age for such loans has been increased since there tends to be more volatility in prices for higher value loans and there is a large speculative element. This well makes it more expensive for the buyer and hence it’s a good step, “points out Harsh Roongta, CEO of apnapaisa.ocm
The apex bank has also increased the risk weight on housing loans of Rs. 75 lakh. The rise in interest rates on large-ticket loans is expected to be higher given the increased risk weight in the segment. This could help moderate the demand for loans of above Rs. 75 lakh and control overheating in the property market. “The risk weight age for such loans has been increased since there tends to be more volatility in prices for higher value loans and there is a large speculative element. This well makes it more expensive for the buyer and hence it’s a good step, “points out Harsh Roongta, CEO of apnapaisa.ocm
It is also worth pointing out that last week the National Housing Bank, regulator for the housing finance companies, has issued guidelines on the issue of pre-payment charges to housing finance companies such as HDFC, LIC housing and Dewan housing. They have been asked not to charge loan prepayment charges if the payment is made out of the customer’s own source of funds.
The impact on home buyers
The RBI measures will largely work in favour of the homebuyer as they will go a long way in controlling the spiralling real estate prices. The buyer can look forward to a stable price regime going forward, point out realty experts.
The macroeconomic environment is changing and GDP growth is on expected lines, which means that the disposable incomes are bound to rise and jobs will continue to grow. The rbi recognizes the fact that prices have run up sharply in the last one year, not necessarily backed by fundamental and user demand. These proactive measures will ensure that there is stable and steady growth in property prices (not more than 5-10%). “Going forward,” the end user will have many housing options before him and price stability will ensure that he gets reasonably good value for his money because prices are not likely to rise any further. This is the right time to exercise your choice, “advises Priyankar Bhikshu of DTZ research India.
Even if interest rates were to move up slightly, demand may not be impacted as in case of residential property for self-use, the price of the property is a bigger determinant than interest rates.
“Interest rates would hardly dictate the timing of the buy. Advice to customers is that they may still get a good deal. It makes sense to buy now if the intention is to buy for self use. Delaying your decision will not make sense,” adds Roongta.
Courtesy HT estates Dtd :-13/11/2010
A buyer must thoroughly check all related documents before buying this asset
As prices of single unit houses climb prohibitively higher, more and more people are opting to buy builder flats, both in Delhi as well as in the surrounding NCR area. Builder flats are easily available, and according to real estate market watchers, this year their sales have gone up 20-25% compared to the same period last year, their prices have also risen 10-20% depending on the type of flat and area where it is situated.
It is essential that buyer’s property check the property papers before purchasing the flat so that they face no problems later. It is always advisable to buy a flat constructed by a reputable builder. Better still, by from a builder who has been in the construction business for a considerable period of time. The buyer checks the previous projects of the builder and the visit one or two to judge the quality of work. This also gives the buyer a chance to speak to others who have bought flats constructed by the builder and get feedback about their experience. However, good quality flats are made by lesser known builder as well.
Builder flats are available in various categories, including those which are ready to move in, or are under construction and others that have to be booked before the construction work has begun. Obviously, the best option is to buy flats that are ready since this gives you a chance to see what you are buying. Flats that are still under construction carry the risk of completion being delayed (though most reputed builder generally do not delay projects).
When booking a flat, buyer’s punctuality in delivering flats to avoid blocking of the booking amount. The easiest way to do so is by the builder’s earlier projects and his delivery history. Property papers that need to be checked include ownership papers. Check the entire chain of ownership of the plot right from the time the plot was allotted or purchased by the first owner, till the time it was bought by the builder. Many builders make an out-right purchase of the plot and the sale deed can be viewed.
Others might build flats in collaboration with either the owner of the plot or another party. In this case, the collaboration agreement should be checked to ensure the builder actually has the rights to sell the flat. Check the terms and conditions of the agreement. Says Anil Kumar, based on Malviya Nagar, who runs GMR Construction and has been in the business for over 12 years, property ownership papers should definitely be checked for ownership.
Also check that the building plans for the property have the requisite sanction from competent authorities and the flat conforms to those plans. Ideally, get a copy of the completion certificate issued by the local civic agency. Beware, however, that many builders do not bother to get a completion certificate.
Additionally, a copy of the forms relating to electrical conduiting, and sanitation lines should also be obtained.
Others papers that need to be checked include property tax papers. Electricity and water connection arrangement ought to be checked to make sure separate meters for each flat have been installed.
Gurgaon-based Captain Manpreet Singh Chawla of Amarveer, a realty company, says it is vital that buyers get the property papers checked by a lawyer or a reputed property agent who can verify the authenticity of the documents. The fee required to get this done is hardly anything compared to the lakhs or even crores of rupees one is spending on the builder flat. Do not accept the papers’ authenticity at face value. Check it meticulously.
Courtesy by : ht estates Dtd :-13/11/2010
|ULTRALUXURY GOLF ESTATE BECKONS
|M3M Group has formally launched its flagship project M3M Golf Estate in Gurgaon and the sale is by ‘invitation’ only. KRISHNA KUMAR MANGALAM reports
M3M Golf Estate, a project of the M3M Group, was launched on October 22 in one of the poshest parts of Gurgaon — Golf Course Extension Road, in Sector 65. This flagship project of the M3M Group also enjoys the advantage of connectivity and is close to the Indira Gandhi International Airport. Spread over 75 acres, M3M Golf Estate boasts of ultra luxury apartments built around a 9-hole reversible ‘in-city’ golf course designed by world famous architect, Graham Cooke.
Basant Bansal, chairman and managing director of M3M Group, planned the project round the concept of an exotic vacation resort, which can be snapped up by prospective end users looking for an ultra luxury living in the middle of an urban setting.
Boasting of state-of-the-art apartments, modern amenities and an aesthetically designed golf course, the project will feature luxurious outdoor and indoor living spaces, state-of-the-art kitchens replete with fittings and high-end fixtures, Wi-Fi in all buildings, roof-top jogging tracks and a world-class club house.
Basant Bansal says: “We have also started the internationally accepted style of the escrow-account system, which ensures proper funding and timely delivery of the project. We have engaged the best architects and interior decorators in the world for this project. The M3M Group will change the way the metro-centric Indians live.”
Golf Estate provides a luxury option for the ever growing community of expats, corporate honchos and HNIs in the region.
Bansal adds: “We are proud to announce the launch of M3M Golf Estate, India’s first 7-star residences, in Gurgaon on October 22. This is a one of its kind project in the region and provides an ultra luxury living option; we have received appreciation from across the world for Golf Estate. The project will redefine luxury, art and architecture.
The project has been designed keeping in mind the taste, the class and the requirements of our target audience.”
Bansal say: “The launch of M3M Golf Estate will add to the luxury quotient in the developing real estate market, especially in Delhi and the NCR region. We plan to add further projects across India in the coming months.”
The project has received awards internationally as the ‘Best Upcoming Golfing Lifestyle Residences in India’ in the US, the UK and Dubai.
The project has been designed by the renowned architects and design group, Arcop Group, from Montreal, Canada. The interiors of the Golf Estate buildings have been designed by Cecconi Simone Inc.
“The company has gained over 25 years of real estate expertise with diverse and complementary talents from a rich network comprising top-notch intermediaries, financial institutions, high net worth individuals and some of the most reputed developers in India. Our Golf Estate project is valued at over $1.5 billion. M3M Group has already embarked on other verticals in the commercial and retail space as well as the IT/SEZ areas,” Bansal adds.
Times Property – Dt- 13-11-2010
|Rein In Your Home Dreams
|RBI’s toughened stance on home loans will prevent your home aspirations from spiraling beyond control
Home hunters are in a spot. While real estate prices are not showing any signs of easing (in fact, they have started hardening again), the Reserve bank (RBI) has chosen to tighten a few norms for home loans, adding to borrowers’ woes. In its recent policy review, RBI has taken three steps that will adversely impact prospective homebuyers who are dependent on home loans. To begin with, the loan-to-value ratio has been lowered to 80% from 85%. This means that you can borrow only up to 80% of the value of the property that you plan to purchase. The remaining 20% has to be funded out of your own/family savings. Secondly, RBI has also increased the standard asset provisioning requirements to 2% for all the teaser rates offered by scheduled commercial banks.
Teaser loan rates typically offer loans at a fixed rate for the first three years and then move on to the floating rate. The fixed rate is as low as 8.9%, which is fairly insulated from the rate swings at least in the first three years. These loans were a boon to customers who typically finish their repayment within 5-7 years. RBI’s stance on this issue is; this practice raises concern as some borrowers may find it difficult to service the loans once the normal interest rate, which is higher than the rate applicable in the initial years, becomes effective. ”The central bank has also noted that at the time of initial loan appraisal, many banks do not take into account the repaying capacity of the borrower at the normal lending rates. This is the reason why the central bank has increased the risk weight for residential housing loans, of Rs.75 lakh and above, to 125%.
Impact Of Stricter Norms: Even as banks, developers and housing finance companies are in the process of digesting these measures, financial advisors have welcomed these steps, saying the customers will now have to take more prudent financial decisions. “Homebuyers often overshoot their budget aspiring for a bigger house. They bank on their future salary hikes and borrow up to even 80% of their take-home salary. In terms of financial planning, these measures are to be lauded. Also, every borrower should examine his repaying capacity rather than his loan eligibility,” says Pankaj Mathpal, a Mumbai- based certified financial planner.
The measure, which has a direct impact on homebuyers, is the low loan-to value ratio. Earlier, on a Rs.50 lakh or even more in certain cases. As per the new stipulation, you will have been eligible to borrow Rs. 42.5 lakh or even more in certain cases. As per the new stipulations, you will be eligible to apply only for a loan of Rs. 40 lakh. “Certain Southeast Asian Economies such as Thailand and Singapore started regulating loan-to-value ratios because of an asset bubble in the real estate market. The RBI is anticipating a similar situation here. There is no way a borrower can mitigate the impact of lover LTV. But this regulation has been introduced only in his/her interest,” says Harsh Roongta, CEO, Apnapaisa.com.
Amar pandit, certified financial planner, My Financial Advisor, add, “Clearly there is an asset bubble and the property market, especially in the metros, is overheated. Hence, RBI is justified in protecting home loan borrowers. It wants to avoid a scenario where over leveraged borrowers may be staring at lower security cover if the property prices start falling.”
Let us assume you have borrowed Rs.90 for a property valued at Rs100. While you are repaying the loan, if the property value dips to Rs80 at any point of time, banks can ask for additional collateral. This is because they should have lent only Rs 72 as per loan-to-value ratio. At this point of time, you have to provide additional collateral or pay the extra margin money. If you are not in a position to pay up the extra cash/collateral, the bank can categorise you as a defaulter. This is clearly mentioned in the home loan agreement.
Should You Wait ‘N’ Watch? : Things will not change from the regulators’ perspective. The lover loan-to-value ratio is here to stay. But certain pockets in metros such as Mumbai, Delhi and Bangalore can see a modest correction; hence a prospective homebuyer can wait to clinch a more affordable deal.”Certain builders, who are able to hold on to their flats to avoid selling at lower prices, will try to create an artificial supply shortage. Smaller builders will not be able to withdraw from the market on a sustained basis. These new regulations are not going to chance either. Hence, I would advice homebuyers to wait until some clarity emerges,” Pandit adds.
Save For Sown Payment Now: Buying a house cannot be an overnight exercise. If you are planning to postpone your home purchase, use this time to systematically cough up some funds for down payment. Maneesh Joshi, a Mumbai-based creative director, has been saving in three SIPs (systematic investment plans) worth Rs. 20,000 since 2006. He also deposits Rs 60,000 in mutual funds once in six months, which is dedicated for the purchase of the house. “The main objective of these SIPs is to buy a house. I am not looking at other goals rainy days. My profession is very volatile in nature. So I have to keep a contingency fund,” says Mr. Joshi. He has an in- principle approved home loan of Rs. 70 lakh. Still he hasn’t rushed into buying a property. He wants to cough up Rs. 15-20 lakh for the down payment.
Go For Joint Home Loans: It’s the best way to share the loan burden, especially in case of working couples. This trend is already picking up in metro such as Mumbai, Delhi or Bangalore due to spiraling of real estate prices. a joint housing loan comes with a number of advantages such as bigger loan amount, higher tax benefits and so on. To avail tax benefits, both the borrowers have to be co-owners. Co-borrowers, who are also co-owners, are eligible for tax rebate in the proportion of their share in the loan. It means, you have to consider the repayment capacity of each spouse while deciding the share of the loan. So, a couple can be equal owners but if their share of the loan is in the ratio of 60:40, the tax benefits will be shared in the proportion.”You have to get a break-up of share of the loan on a stamp paper at the beginning itself to avoid tax complication,” says Vaibhav Sankla, executive director, Adroit. The maximum tax deduction available for a single borrower is Rs 1.5 lakh. This deduction will apply to each borrow, taking the total possible deduction to Rs 3 lakh. But a word of caution here. Before you decide on shouldering such huge loans together, it is better you do some self-evaluation. “Don’t borrow up to the maximum limit as a percentage of your income. You should keep aside some contingency funds and investments which will come in handy in case of unforeseen emergencies such as job loss, forced sabbatical or even a family. Hence, single borrowers should not stretch their housing loan EMIs beyond 40% and double borrowers beyond 50% of their take home salary, “Suresh Sadagopan, a certified financial planner adds.
ET :- 11-11-2010
|AFFORDABLE HOMES MAKE FOR GOOD INVESTMENT
|A unique aspect of an affordable home project Is its relative price advantage in the near term-this works well both for end users as well as property investors.
The concept of affordable housing is a gift of the downturn. Like it is said. ‘Sweet are the uses of adversity.’ While at no time is an economic downturn useful or welcome, the 2008 recession gave those looking for homes in the Rs 20 to Rs 35 lakh segment something to cheer; The lack of activity in the midrange segment led many developers to venture into the affordable homes market. The result is a concept here to stay. Affordable homes typically combine the best of both worlds to the extent possible. The carpet area is relatively smaller but many of the other basic amenities are offered. This is possible due to the relatively lower land costs at locations these projects are developed in – invariably in the suburbs. Land forms a large chunk of an apartment’s cost and when this cost is low, the apartment can be sold for a much lower price tag. This is also the reason why an apartment in the core city areas is expensive even if the carpet area is lesser too. The largest buyer base for affordable homes is the salaried segment and the individual entrepreneurs running small business setups. As the number of nuclear families increases, the demand for affordable homes too goes up. Though a new phenomenon in the city this market segment has already indicated that it holds huge potential for developers as well as investors.
Location and connectivity,
A unique aspect of an affordable homes project is its relative price advantage in the near term. As connectivity improves thanks to the many road development projects or the Metro Rail, the neighbourhood will have more residential and commercial projects being developed. This in turn will lead to a market for social infrastructure. It will then not be long before the locality turns into a self sufficient neighbourhood and prices escalate with more demand for property. Then, the erstwhile affordable homes project will command a much higher price. Those who, in this context, buy an affordable home early, are holding a good investment too, that will earn them handsome capital gains in a matter of time.
Base for second home
The capital gains the home earns over time helps those looking for a bigger property in a matter of time. Liquidating or mortgaging it helps in making a down payment for the second home comfortably. In the current times, an affordable homes project serves as an efficient hedge against inflation.
For young couples relocating to the city for a job, or for those looking at setting up home after marriage, this is a viable temporary option – for those who plan for a larger accommodation later on this saves on rent while developing a corpus alongside. Also, given the tax advantage on home loans, it is an ideal option for an interim period before the combined earnings afford them a bigger home.
Affordable homes serve as good investment options for property investors who don’t have a large budget. It is easy to find a tenant as the rental will also be relatively lower. The capital appreciation, especially in emerging localities, will be sharp.
Property investors now have the option of investing in a mid-range home in the city and a budget home project on the outskirts, across long and medium term horizons.
Courtesy Times Property– 30-10-2010
|CREDIT APPRAISAL TO DETERMINE YOUR LOAN ELIGIBILITY
A credit appraisal is an important part of determining the eligibility for a home loan, and the quantum of the loan. A prospective borrower has to go through the various stages of the credit appraisal process of the bank. Each bank has its own criteria to satisfy itself on the credit worthiness of the borrower. The eligibility for the loan that a person can get depends on his credit worthiness, determined in terms of the norms and standards to the bank. Being a crucial step in the loan process, a borrower needs to be careful in planning his financing modes. The credit worthiness, basically, assures the repayment capacity of the borrower whether the borrower is capable of repaying the loan and dues on time.
Broadly, the information collected is on these aspects:
Incomes of the applicant and co-applicant Age of applicants qualifications family details nature of profession experience employer security of tenure tax history assets owned and their financing patterns additional sources of income past loan record, if any recurring liabilities investments other present and expected liabilities
The norms differ from bank to bank. Each has certain norms within which a prospective borrower needs to fit to be eligible of the loan. Based on these parameters, the maximum amount eligible is worked out.
A bank applies the installment-to-income ratio(IIR). This helps in finding the loan eligibility of the applicant. It is generally expressed as a percentage. This percentage denotes a portion of the monthly instalment on the home loan taken. Usually, the banks fix 33.33% to 40% as the ratio. It is assumed that in normal circumstances, a person can pay an installment up to 33.33% to 40% of his salary. For example; Assume the IIR is 33.33% and the gross income is Rs. 30,000 per month. According to the IIR ratio, the applicant is eligible for a loan where the installment does not exceed Rs 10,000 per month.
Fixed obligation to income ratio
Banks also calculated the eligibility based on the fixed obligation to income ratio (FOIR). Here, a bank takes into account the installments of all other loans already availed of by the applicant and still due, including the home loan applied for. This ratio includes all the fixed obligations that a borrower is supposed to meet regularly on a monthly basis.
The fixed obligations do not include statutory deductions from the salary such as Provident Fund, professional tax and deductions for investments such as insurance or a recurring deposit.
For example, assume the income is Rs.30, 000 per month, there is a car loan installment of Rs. 4,000 a TV loan installment of Rs 1,000 and the proposed housing loan installment is Rs 10,000.
Accordingly; the FOIR is 50 percent - -50 percent of the monthly income. The bank may have a standard of 40 percent of FOIR. So, the total installments the person can pay, as per the bank’s FOIR standard is Rs. 12,000 per month. As he is already paying Rs. 5,000 towards the car and TV loans, he has Rs 7,000 left and the loan eligibility is taken as Rs 7000 per month as the basis of housing loan repayment capacity of the customer. Thus, a backward calculation of the repayment capacity is made to find out the amount to be given as loan.
A bank also computers eligibility on the basis of a loan-to-cost ratio (LCR). This ratio is used to calculate the loan amount that an applicant is eligible for on the basis of the total cost of the property. This sets the upper limit or the maximum loan amount that a person is eligible for irrespective of the loan eligibility under other criteria. The maximum amount of loan eligible is pegged to the cost or value of the property.
While the loan eligibility as per the other parameters may be higher, the loan amount can’t exceed the cost or value of the property. The ratio varies between 70 to 90 percent of the registered value of the property. Loan eligibility is computed on the basis of these parameters that act as a guide to determine the loan amount. Generally, the lowest of these is taken as the loan amount that the applicant is eligible for.
Courtesy Times Propertys– 30-10-2010
|FACTORS AFFECTING HOME LOAN ELIGIBILITY
|Banks have their own parameters and criteria to evaluate a customer’s eligibility for a home loan
There are various factors affecting the eligibility for a home loan. Banks have their own parameters and criteria to determine the eligibility and quantum of housing loan. It helps borrower if they are aware of a few of such factors.
To begin with, it is the information on the application form. The information submitted in the application form by the individual is verified from various primary and secondary sources. In case of wrong information or inconsistencies, the loan application is liable to be rejected.
This is an important determinant. The loan eligibility as well as repayment capacity depends on the financial position of the borrower. The financial position of the borrower, his income level, net income, liabilities etc determine the amount of loan he is eligible for. One should have a minimum income level or fixed and certain source of income.
The credit history of the borrower also plays an important role. Usually, lenders maintain a database of borrows and verify the credit history to check for previous repayment defaults, even from other lenders.
The personal profile of an individual is also important. This includes factors like educational qualification, profession, number of dependent, assets owned, liabilities owed, savings history etc. a higher number of dependants or existing liabilities implies lower repayment capacity.
It determines the earning years left for the individual. In case the property is co owned. The co owner cannot be a minor. Also, the co owner cannot be above a certain age limit. The age limits are set to minimize ownership disputes. The age limit also affects the tenure of the home loan, and EMIs.
An applicant’s retirement age is also considered. For example, if the applicant is 45 years of age and is set to retire at 60 years, the maximum loan tenure available will be 15 years. Also, in case a bank has 75 year age limit for a co-applicant. If the applicant is 40 years old and the co-applicant is 60 years old, the home loan will be sanctioned for a maximum period of 15 years only.
Attributes of property Banks have specific norms with respect to the minimum area of a flat. This may be built-up area or carpet area. The age of the property is also important in case of purchase of an existing property. Banks conduct a legal and technical appraisal of the property to check whether the title is clear, if there are any ownership disputes, whether the property is free from encumbrances etc. In case there are any objections in this appraisal, the loan application is bound to be turned down.
Courtesy Tymes Property– 30-10-2010
|INVESTORS BACK IN REAL ESTATE
“Like gold, real estate tends to retain its intrinsic value. On the positive side, unlike gold, it is possible to earn a regular income on it. Depending upon various economic factors, a property owner can increase rent in times of high inflation. Also, real estate is always a good investment option because of the possibility of capital appreciation,” says Shobhit Agarwal, joint MD (capital markets), Jones Lang LaSalle Meghraj.
As inflation is high, the cost of construction is going up. However; in markets like Noida, Noida extension, Greater Noida, Faridabad and Kundli prices are not going up because of oversupply-like situation. But the margin of profit for the builders is getting squeezed. Therefore, consultants say the prices of these apartments will have to preciate, soon, to meet the increased cost. In a way, the prices of apartments have to keep pace with inflation.
As the economy is growing, several companies are expanding in the service and manufacturing sectors, which will directly lead to an increase in employment and the demand for house as well. However; the boom in real estate will depend on the implementation of the projects by developers. As developers are working on a very thin margin, there is an apprehension that there could be a problem in delivery of projects.
“The extent to which one can rely on the professionalism of a developer depends both on the developer’s existing credibility in the market and on the strength of enforcement agencies specific to each state,” Agarwal says, stressing the need for a regulator to bring in transparency in the sector.
“Generally speaking, larger developers are becoming a lot more transparent and professional in their business dealings. There is increased accountability in the organized sectors, brought on by greater awareness among buyers and also increased investments by international investors. However, players in the unorganized parts of the market – especially those who have a limited number of smaller projects to their name – are often not subject to the same accountability. Therefore, the safety of an individual real estate investor’s interests in property transaction continues to depend a lot on personal research and understanding of the real estate market, especially in local terms, prior to a purchase, ” Agarwal adds.
Courtesy Times Property– 30-10-2010
|PLAN YOUR BUDGET TO MAKE LOAN REPAYMENT EASY
|KAVITA SRIRAM explains how a budget that has efficient allocations helps you repay your home loan debt comfortably
Planning a household budget gains more importance when you have a large debt. People, who owe money to others and have other expenses and commitments, can create a budget plan is in place for saving and spending money. With almost 40 percent of monthly income diverted towards a home loan repayment, a budget helps balancing other financial commitments. A budget helps allocate future personal income towards expenses, debt repayment and savings.
Before crunching numbers in a elaborate worksheet, the first step is to determine your spending pattern. For determining the spending pattern, you must track your expenses over a few months using credit card receipts, bank statements and other bills. Do not forget to include small cash purchases.
Categorise the expenses as essential and non-essential. Essential expenses are those that are required for living and cannot be compromised with. Some such expenses are fixed each month like home loan repayment, rent and school fees. Transport, food bills, utility bill and vehicle maintenance are essential expenses that are variable expenses. Identify how much you spend on expenses like snacks, movies, eating out, gifts and parties that can be categorized as non-essential expenses for three months will give you an estimate to work on a comprehensive budget.
The next step is to calculate your monthly income taking into account all income sources including rentals and investments. Some people may be drawing pension or getting regular interest or dividend income too. Add all these numbers to arrive at total monthly income.
If you can calculate what portion of your income is spent towards every expense, it is easier to track your expenses. Apart from allocating to essential and non-essential expenses, set aside a portion of your income towards cash surplus or savings. This is the money you would like to set aside for your children’s future, retirement savings and emergencies.
Typical heads under which you budget include personal debts/credit card dues, home loan, food, transportation, clothing, utility, insurance, healthcare, savings and other miscellaneous expenses.
The percentage allocation under each of the headings will be different across families. Families living close to city centre may have to spend more on housing and food. Those families located in the outskirts may be spending more on transportation and less on home rent. The spending pattern differs across persons. Some may spend more on clothes and parties while others may like to splurge on food. Families with children and elders will have different spending priorities.
A budget worksheet must be flexible where you can insert any additional expense or income element. It helps you to identify opportunities of minimizing wasteful expenditure.
Managing home loan debt
Defaulting on home loan repayments can land a borrower in serious trouble. Further, it leaves a blot on the credit history that will adversely impact future borrowing capacity.
Credit card and personal loans are high interest debts that must be repaid with highest priority. Do not borrow to invest in stocks. If needed, defer other major expenses such as a vacation till the financial pressure eases out.
Assign priorities to your expenses and set aside money regularly to fulfill your major plans like an overseas vacation. Sticking to a meticulous budget plan will help you sail comfortably through a home loan tenure.
Courtesy Times Property– 30-10-2010
|TIME FOR NRIS TO BUY A HOUSE
WITH THE RESIDENTAL PROPERTY MARKETS RENTEL, THE TIME IS HUST RIGHT FOR NRIs TO STIRIKE A DEAL, SAYS V NAGARAJAN
After a rollercoaster ride, the residential property market has stabilised now and a number of developers are gearing up to launch new housing project. Developers are gaining confidence and pricing the products in a realistic manner. Realty funds are coming back to identify strategic partners for investments in residential project.
With the corporate gearing up to expand operations, commercial space getting absorbed at frequent intervals unlike earlier. For homebuyers, the time is just right to strike bargain deals.
For NRIs who have been waiting in the wings, the situation is just appropriate to enter the marker. Home loan rates are competitive and linked to base rates after the initial period of three years. There are banks who have waived processing and documentation charges.
As the market is becoming more competitive with the entry of a number of private housing finance companies, self employed people are in for a bonanza with flexible lending norms even though at a marginally higher lending rate.
Apartment prices are firming up in some areas. With the widening of the Whitefield Road and improved connectivity from ITPL, people are shifting towards the area. This has led to a marginal hike in property prices, according to market sources. Residential projects in the vicinity.
Yet another good development is the arrangement between developers and housing finance companies to waive pre-EMI interest charges on behalf of the buyer. As result, homebuyers need not pay interest to the lending institution till the occupation of the apartment. A significant factor is that housing costs are continuously rising with the increase in material and labour costs.
PROPERY MANAGEMENT SERVICES
Another significant development is the proliferation of property management service companies to service the retail clients in the real estate sector. This has been a long-felt need among NRIs have set up shop in Bangalore and are expanding to other cities as well.
There are inherent tax advantages for NRIs while investing in real estate. Besides income tax and wealth tax exemption for one self-occupied house, residential units if leased for minimum period of 300 days in a calendar year are exempt from wealth tax. The benefit of cost inflation index is available to a NRI for the purpose of computation of taxable long-term capital gains.
If a NRI is interested in selling a residential property, whether one or more, be will be eligible to get 100 percent exemption n respect of long term capital gains. The amount of long-term capital gains should be invested in the purchase of another residential property in advance within one year of the date of sale of the first house or within two years after the date of the sale.
If a NRI is interested in the construction of another residential property, the net taxable long term capital gains should be invested within three years in the construction of the new residential property.
If a NRI is not the owner of more than one residential property and has derived long term capital gains on the sale of any other asset like shares, debentures, commercial property, jewellery, urban land etc, he will get 100 percent tax exemption in respect of long term capital gains made on the sale of such capital assets provided he invests the proceeds in a residential property.
Moreover, repatriation of original investments made in foreign exchange is permitted up to two residential properties after a lock-in period of three years. This is apart from the rental repatriation and sale proceeds of inherited properties within the overall limit up to one million dollars every year.
Courtesy:-Times Property 02-10-2010
|Improving construction quality, enhanced market transparency, and availability of suitable options have made the Indian real estate market a definitive asset class to invest, say
ABHISEK KIRAN GUPTA and HIMADRI MAYANK
While stocks and bonds have held their positions as traditional investment, investors are increasingly looking towards the alternative investments – real estate, hedge funds, private equity and Exchange Traded Funds (ETFs) – to engineer an overall enhanced performance of their portfolios.
Improving construction quality, enhanced market transparency, and availability of suitable options have made the Indian real estate market a definitive asset class to invest, which provides a stable and predictable income yield along with a possibility of capital appreciation. While residential markets in India have already witnessed a rapid bounce, commercial markets have touched a cyclical low and are expected to recover to 4-6 quarters.
The market value of investment grade real estate in India under construction has increased from $69.4 billion at end-2006 to $101.3 billion by end June 2010, which equates to 8.2% f India’s nominal GDP FOR 2009.
The market value of commercial office and retail under construction has remained range-bound during 2006-2010, due to the effect of an increase in construction activity offset by a fall in capital values. However, the contribution of residential segment has amplified due to a confluence of increase in construction activity and rapid recovery of property prices.
A significant portion of this market value is required as costs of construction and development of these real estate assets. The costs have been assessed to be $48.5 billion over a period of 2-3 years.
The market value of commercial (office and retail) real estate under construction is $34.8 billion. Commercial office space under development contributes to 74% of the estimated market value being developed in the commercial sector.
As of 2Q 2010, Tier I cities of Mumbai, NCR-Delhi and Bangalore contribute to 70% of the market value of commercial office space under construction, while Tier 2 cities of Chennai, Pune, Hyderabad and Kolkata contribute to 21% of the pie. Other investment grade developments in Tier 3 cities contribute to a more 9% of the pan-India market value being developed in India today.
However, with infrastructural developments and lover real estate costs, the shared of Tier 3 cities is likely to grow In future. While the Tier I cities contribute to 62% of the commercial retail space under development,27% is supplied by the Tier 2 cities.
Residential sector has been the most resilient in the recent downturn, aided by the high demand for housing in India. While residential property prices slumped in 1H09, their raped recovery in 2H09 and 1H10 was accompanied by a slew of launches across India.
As of 2Q 2010, the market value of residential properties under construction is $66.5 billion, contribution 66% of the value of total real estate under construction in India.
While the premium segment comprises only 4% of the saleable area being developed, it contributes to 24% of market value. While NCR Delhi leads in terms of volume of residential properties being developed, Mumbai contributes a larger share to the market value.
Foreign Direct Investment (FDI) into housing and real estate in India increased steadily from $0.04 billion in 2005-06 to $2.18 billion In 2007-08. Since 2007-08, a total FDI of %7.82 billion has been put into housing and real estate in India. Considering an average construction period of three years for real estate properties, this equates to 7.7% of the market value of investment grade real estate under construction as of 2Q 2010.
Courtesy:-Times Property 02-10-2010
|GOLF-CENTRIC PROJECTS WIN ACCOLADES
|Jaypee Greens has established a formidable reputation, for creating golf-centric luxury residential townships in Noida and Greater Noida.
RAVI KUMAR MANGLAM profiles the realty firm
|Jaypee Greens is the real estate arm of the Jaypee Group, a wall diversified infrastructure and conglomerate, with an annual turnover of Rs 14,000 crore. This realty firm has been creating lifestyle experiences from building golf-centric premium residences to building mega townships and self sustained mega cities.
Among the major projects of Jaypee Greens are Jaypee Greens. Greater Noida. Jaypee Greens Wish Town,Noida. With the latest venture of Jaypee Greens being the Sports City over 25,00 acre and comprising the much awaited and India’s first Formula Once racing track (the first Indian Grand Prix slated to be completed in 2011).
Acknowledging its contribution towards construction of high quality luxury developments with world class amenities and infrastructure, Jaypee Greens has received several national and international awards and honours including:
Best Urban Development Project GIREM award at Goa on September 24, 2010. Global initiative for Restructuring Environment and Management (GIREM) leadership awards acknowledge individuals and corporate entities in Indian realty and infrastructural sector for leadership, innovation and international best practices and give away 13 annual GIREM awards, Jaypee Greens got this for “environmentally” practices in their large scale integrated townships.
Bloomberg Asia Pacific Property Awards ,2010: A prestigious international award for excellence by realty firms in all sectors of property and real estate a) Best Golf Course, India: Jaypee Greens, Greater Noida b) Best Apartment: Sea Court at Jaypee Greens, Greater Noida c) Best, Development India: Estate Homes at Jaypee Greens, Greater Noida d) Best Development, India: Kallisto Town Home, Jaypee Greens, Wish Town, Noida e) Best Mixed Use Development, India Jaypee Greens, Sports City.
Realty Plus Excellence Award: Best Upcoming Integrated Township award for Jaypee Greens, Noida. Realty Plus awards recognize the contribution of individuals, developers, among other, who play a key role in the growth of Indian real estate sector.
Overseas Living Luxury Lifestyle Award, UK: Best Lifestyle Development 2010, India to Jaypee Greens. These awards are given for excellence and innovation in the realty sector and allied services in the travel industry.
Rajiv Gandhi Excellence Award for Best Integrated Township of the Year Award. This award is to identity and honour professionals who marvels in real estate industry.
Rita V Dixit, director of Jaypee Group, says: “The Jaypee Group has created landmarks through its engineering power and construction industries.”
“Since its inception in 2000, Jaypee Greens has been creating lifestyle experience from building golf-centric premium residences to building mega townships. We have already established our name through landmark luxury real estate developments.”
“The customer base of our products and the awards we have received are a testimony to our quality and commitment to our customers. Now the endeavor and commitment is to create and develop sustainable and environmental friendly cities.”
Courtesy:- Times Property 02-10-2010
|FIXED-RATE LOAN BEST
Banks are revising their base rates upwards by up to half a percentage point from October 1, 2010 which will make loans costlier.
Base rate is the benchmark rate for a bank to fix the interest rates on loans. According to RBI guidelines, it has to be reviewed by banks every quarter. The latest revision of the rate will remain effective for October-December period.
But this is not likely to affect the home-loan rate of major banks. In order to make home-loan rate more attractive, most of the banks- state bank of India, Punjab National Bank, and HDFC Ltd, for the instance offer home loans at a fixed interest rate for the first three years. For example, SBI charge an interest rate of 8% on home loan for the first year and 9% in the second and third year. Similarly, PNB charges 8.5% for the first three years. HDFC Ltd also offers home loan at a fixed rate for the limited period.
The fixed rate for the initial period also provides a king of certainty about the interest burden on buyers for the initial period. The present rates of 8% and 8.5% offered by a number of banks are very attractive. In the last 10 years, the lowest rates at which banks offered home loan was around 7.5%, in 2004. But within a few months, the rates rose to 9%, which became 10% by 2007.
At present, a home loan at around 8.5% is less than even inflation. On top of that one will get tax concessions on the loan borrowed to buy a house. On calculation, the effective interest rates after adjusting for tax benefits that one pays on a home loan comes to at least two percentage points less than the rack rates. That means, if you are buying a house taking a home loan, you are paying even less than the opportunity cost of money.
Bankers feel that as inflation is high, the RBI will act to increase interest rates. But as you are borrowing at fixed rates for the first three years, at this point of time, your EMI will not increase you are insulated from any likely rate hike in the near future. One percentage point hike in the interest rate, from 8% to 9% on a 20 year loan of Rs.1 lakh, results in an increase in EMI by Rs 64 from Rs 836 to Rs 900. So, if you have taken a home loan of Rs 50 lakh, your EMI will increase by Rs 3,200 or Rs 38,400 per year.
Courtesy:- Times Property 02-10-2010
|Prices in the national capital are once again going through the roof prompting the middle-class people to explore options in the NCR
|It is generally believed that real-estate world sees lot of positive energy and activity every year, close to festive seasons. That is a time, even when the market is not flooded, a lot of serious prospective buyers throng developers for houses. These are the people who wait for this supposedly auspicious time to seal a deal.
Well, the festive season is once again upon us but there seems to be no sign of any positive mood in the market. The mod is rather dull and lukewarm. Buyers are very much there but very are waiting for a time when prices of houses of their choice come down to reasonable levels. The currents situation is very abnormal and this does not seem to be an opportune time to clinch a deal. The secondary realty market in the national capital is touching a new low as the rates of flats have increased without any rhyme or reason – up by 30-36% during the last 15-18 months. That has greatly dampened the spirit with serious buyers postponing their plans to buy a flat this festive season.
According to Samir Jasuja, MD of propequity,”If the location is good, then increase in rates is even steeper. I am sure that unless prices do not fall to reasonable levels, the market would not see a lot of positive energy.” Sources say that due to the astronomical rates of properties, serious buyers are abandoning Delhi like Rohini, Pashim Vihar and Vikas Puri, the increase in price were up to 25%. A realty expert said that market goes up once some property sold at a goof price. After that, the rate of that particular deal becomes the benchmark in that area. People forget that there are many factors that determine the price of a particular property. Hence, what is true for one property cannot be true for another one in the area. According to a Paschim Vihar based realty consultant, Suresh Bhalla. “There is hardly any deal which is reaching its logical conclusion as far as DDA or cooperative group housing flats are concerned. The current going rate for a MIG flat in Pashchim Vihar, Janak Puri and Vikas Puri is around Rs70 lakh.” The rate for an HIG flats is even higher. This is too much. With such rates, it is not easy to find buyers”.
And, if you move on East Delhi, the rates of both DDA and society flats are again crossing the threshold of the budgets of the middle-class segment. You can feel lucky if you manage to buy an MIG flat at less than Rs 65 lakh. There are some societies where flat even cost more than Rs 1 crore. Given the fact that the original cost of such flats cannot be more than Rs 18-20 lakh, the prices seem to have run amok.
However, amidst this not too happy a scenario, there is a gain for places like Ghaziabad, Noida, Faridabad and Gurgaon as many people are now looking for possible options there. J K Jain, MD of DesignArch e-homes, says that one has to be very practical when it comes to finalizing a property related deals. “Rather than waiting for a time when rates fall, one should buy the property at a second best possible place at the available rates.”
Echoing this, Sunil Jindal, CEO of SVP Group, is of the opinion that the NCR is thriving because the capital is now more or less out of bounds for working class and middle class people. It is now no secret that this is a reason for a large number of buyers flocking to places like Noida, Gurgaon, Ghaziabad, Faridabad, among others, looking for flats that match their budget.
Dejected as he failed to match the demand of a flat owner in Mayur Vihar, which he took a fancy to, a senior TV journalist Niren Majumdar said that he had a budget close to Rs 60 lakh – but even then he could not buy a flat in Delhi. “They (flat owners) are asking for the moon from people who look for flats in the capital. I do not think it would be possible for working class people to buy house here.”
So, are there no buyers for flats and floors in the national capital? This claim or perception is hotly contested by Sanjay Khanna, director of Kailash nath Projects Private Limited, who says: “This is not true at all as in Delhi floors worth Rs 4-5 crore are finding buyers. It is not at all true that buyers have shelved their plans owing to high rates of houses.”
Courtesy:-Times Property 02-10-2010
देश की पहली हाई स्पीड ट्रेन हरियाणा में
पानीपत, समालखा, गन्नौर व सोनीपत के रास्ते दिल्ली को हाई स्पीड रेलों के जरिये जोड़ने के लिए बनाये जा रहे हे हाई स्पीड कारीडोर के रास्ते को मंजूरी दे दी गयी है | प्रस्तावित रेल कारीडोर संभवतः २०० किलोमीटर प्रति घंटा की गति से चलने वाली भारत की पहली हाई स्पीड परियोजना होगी, जिसकी लम्बाई १०३.५ किलोमीटर होगी | हरियाणा के मुख्यमंत्री भूपेंद्र सिंह हुड्डा, ने यह जानकारी दी |
इस सम्बन्ध में एक प्रवक्ता ने बताया की दिल्ली इनटीग्रेतिद मल्टी मॉडल ट्रांजिट सिस्टम लिमिटेड के अधिकारियों व विशेषज्ञों की एक टीम ने मुख्यमंत्री व हरियाणा सरकार के अधिकारियों के समक्ष यह प्रस्तुति दी | राष्ट्रीय राजधानी क्षेत्र योजना बोर्ड ने सर्वेक्षद करवाने का काम डीआईऍमटीएस को सौंपा था | इस परियोजना से पानीपत, समलखा, गनौर, मुरथल, राइ व दिल्ली शहरों में रहने वाले लोगो के अलावा आसपास के इलाके भी लाभान्वित होंगे | डी आई एम् टी एस के इस प्रस्ताव में पानीपत, समलखा, गनौर, मुरथल, राइ कुंडली, नरेला मुबारकपुर चौक, बादली में स्टेशन बनाने का प्रस्ताव दिया गया है | इस हाई स्पीड कारीडोर पर चलने वाली प्रस्तावित नॉन-स्टॉप रेल से ४५ मिनट में और ठहराव के साथ अधिक से अधिक ६० मिनट में पानीपत से दिल्ली पहुंचा जा सकेगा | इस परियोजना से पूरे इलाके का चहुंमुखी विकास होगा और यात्रियों को यातायात का एक बेहतर विकल्प मिल पायेगा | इस उत्तम सेवा वाली परियोजना में रेल के डिब्बों में सुविधाजनक बैठने की व्यवस्था होगी |
सौजन्य : नवभारत टाइमस तारिख ३० सितेम्बर २०१०
|TEE OFF TO NOVEL HOUSING CONCEPTS
Golf Course extension holds promise what with ground-breaking housing concepts and good developments in the pipeline, says NAMRATA KOHLI
It is the road perpendicular to Golf Course road, which connects it to the Sohna road. As against Golf Course road where properties are ready to move in and hence very expensive, on Golf Course Extension road, the projects have just been launched and will take at least three-five years to come up. Therefore, the prices are relatively less and affordable at the rate of Rs 4,500-5,500/sq ft.
According to property broker Shekhar Midha from Valuez: "Golf Course Extension road is the only road in Gurgaon that has been planned with no villages and slums nearby. The road is very wide and straight with A-class builders. Most of the projects launched here will take four-five years for completion and another two-three years for conditions to become habitable like having all basic infrastructure of water, electricity, roads, security, etc. It is a good investment for those with a long-term investment perspective."
Golf Course Extension road was constructed in 2009. Most of the projects launched along this stretch in 2009 are expected to be up for possession by the end-2012. Some of these projects include Emaar MGF's Palm Drive, Palm Terraces, Palm Studios; IREO's Grand Arch, Uptown, Victory Valley - Pioneer Park; Emaar MGF's Emerald Estate, Emerald Floors, and Golf Estate by M3M. Most of these are budget luxury homes and are priced at Rs 4,500 per sq ft to Rs 5,500 per sq ft.
Ireo is 100% FDI project with investment by JP Morgan Chase, Goldman Sachs and other blue-chip companies. On a land bank of 800 acres on Golf Course Extension road, Ireo launched its first project "Grand Arch", which is apparently all sold out. Grand Arch's 2BHK of 1,375 sq ft and 3BHK of 2,163 sq ft was launched at a unit capital value of Rs 4,950/sq ft and has increased to Rs 6,850/sq ft. Uptown, which was launched in November 2009 at a unit capital value of Rs 3,800/sq ft has 3BHK of 1,600 sq ft and 4BHK of 2,000 sq ft and is now available at Rs 4,700/sq ft.Victory Valley has 51 storeyed hi-rises plus mid-rises as well as low-rises ranging from Rs 5,500-5900/sq ft. It was launched in May 2010 and will be ready by mid-2013. Ireo is marketing hi-rises as the tallest building in north India, from where on a clear day, one may be able to see Taj Mahal!
Emaar MGF has launched "Palm Terraces" project on this road. According to a company spokesperson from Emaar MGF: "After the success of 'Palm Drive' on Golf Course Extension road, we launched 'Palm Terraces - Select' within the 'The Palm Drive' community, situated on Golf Course Extension road, Sector 66, Gurgaon. Palm Terraces - Select, are ultra-luxury residences with mid-rise structures (G+9 to G+12) comprising four-bedroom apartments and five-bedroom duplex penthouses. The Palm Terraces features the highest design standards, quality amenities and high-end features."
Pioneer Urban has "Presidia" at Golf Course Extension road. Presidia has 3-, 4- and 5-bedroom apartments at the unit rate of Rs 5,500/sq ft. Pioneer Park Presidia has amenities like swimming pools, gymnasiums, indoor squash courts, indoor rooms for reading and relaxation, multimedia entertainment rooms and more. Each floor of Presidia has only two apartments with a provision of separate service entries for each apartment. There are hanging gardens and green patches on each tower.
Unitech's "Close North" and "Close South" are fully functional and have been occupied by end users. In the re-sale market, the apartments are available in the range of Rs 4,800-5,200/sq ft. Vatika City is also fully occupied and a three-bedroom apartment here is available for Rs 1.05 crore to Rs 1.10 crore.
In the retail segment on the Golf Course Extension road, Emaar MGF has launched the "Emerald Plaza" mall. Unitech has launched two office space projects - Unitech Business Park and Silvertone. The capital prices prevailing in the retail segment and office space are approximately Rs 9,000 and Rs 7,000 per sq ft respectively.
Overall, Golf Course Extension road has good developers, prices are still low and with a proposed Metro, the connectivity will also be good. But the investment
horizon should not be short term but long term, say 10 years.
Courtesy by : Times Property Dtd : August 21, 2010
|VERTICAL GROWTH ONLY WAY
The Haryana government is augmenting land resources for Gurgaon in the new master plan in an attempt to accommodate a projected spike in population by 2025.
Despite being a parched region, Gurgaon has taken the lead in residential development emerging as the best option for both end users and also for investors. Realizing this well, Haryana government recently moved a plan to increase the residential area per acre to accommodate more people over the next 10-12 years - and there are reasons to do that. A recent National Capital Region Planning Board study has shown that the capital city of Delhi managed to see a downward trend in the population growth, particularly on account of migration, only because of people now finding space in the NCR cities.
Because of its good track record of managing the law and order situation efficiently, Gurgaon has outscored its other competitors in around Delhi. Considering the trends of people still finding Gurgaon a better option, the district administration has proposed these positive changes. The proposals provided in the new draft Development Plan 2025 of Gurgaon-Manesar Urban Complex talk of preparing the city to cater to the needs of a projected population of 39.7 lakh. The earlier Master Plan for 2021 had projected to accommodate 37 lakh people.
However, the ground reality is quite different. Rough estimates suggest that Gurgaon and Manesar put together have already crossed the 30-lakh mark. There is every probability that the population in the region will touch the 60-lakh mark by 2025.
So, any amount of planning to increase residential area in the urban complex is a welcome step, though it might not be adequate to meet future requirements. As per the proposed revised plan, 37,314 hectares would come under the planned development instead of an earlier 37,069 hectares. It would include an area of 15,009 hectares for residential purposes against the earlier earmarked area 14,930 hectares for residential development.
This means around 1,500 acres of additional area will come under residential use. Sources said that this additional land would be used for development of three major residential complexes and scores of group housing societies.
For developing commercial, industrial, public utilities, special economic zone and defence land, the allocated area, however, will remain unchanged. As per the proposed plan, which is likely to be adopted and approved by the state government, 4,283 hectares of land would be earmarked for transport and communication facilities, while earlier it was 4,231 hectares for these services. A provision of 1,642 hectares of land would be made for public and semi-public use (institutional), which will slightly increase by 12 hectares. Earlier, 1,630 hectares were proposed for institutional areas. The area for open spaces has also been increased from 2,675 hectares to 2,828 hectares.
Taking into account the rapid population growth in Haryana, the state government had revised the population density for urban complexes across the state last year. The draft development plan of Gurgaon would be prepared as per new guidelines, calculating the population density at 120 persons per acre as compared to 100 persons per acre earlier.
The existing urban area is of 406 hectares while the rural areas occupy 428 hectares. The 2021 Development Plan comprised 41 controlled areas, sources said that but since the chief minister has ordered that all the sector roads in the forthcoming new residential sectors to be developed by HUDA be interconnected, more land will be required. So, six more controlled areas have been added in Gurgaon, which have already been notified.
Sources said that to accommodate more people, the city has to follow a vertical mode of development rather than the traditional plan of horizontal development. In the last decade, Gurgaon and Faridabad had become the most sought after residential destinations for those who were ready to shell out a little more to own a plot in the NCR.
Though, even now, the HUDA has plans to auction plots in the new sectors, sources said that almost all the sectors would see the development of multistorey group-housing societies. "The development and plan to accommodate more people should also be supported by infrastructure augmentation. Water and electricity supply has to be upgraded. Only
then can we can achieve sustainable development," said Bhawani Shankar Tripathy, a RWA activist.
HARYANA GOVERNMENT RECENTLY MOVED A PLAN TO INCREASE THE RESIDENTIAL AREA PER ACRE TO ACCOMMODATE MORE PEOPLE OVER THE NEXT 10-12 YEARS
ANY AMOUNT OF PLANNING TO INCREASE RESIDENTIAL AREA IS A WELCOME STEP, THOUGH IT MIGHT NOT BE ADEQUATE TO MEET FUTURE REQUIREMENT
Courtesy by : Times Property Dtd : August 21, 2010
|GURGAON REALTY TOPS CHARTS IN NCR
From prime posh locations of Delhi like Vasant Vihar to the prestigious Golf Course road in Gurgaon, prices of housing options across the years have witnessed significant escalations.
Micro markets like Vasant Vihar have always been preferred destination for those seeking a posh address, combined with the benefits of a central location. Many residents of this colony are drawn to its accessibility, peaceful ambience and proximity to schools, hospitals and commercial centres. The evolution of Gurgaon and Noida as prominent residential destinations was historically driven by the commercial development, which fed the residential sector in these micro markets. The proximity of these markets to Delhi, coupled with the rising real estate prices in Delhi, drove the residential demand in these markets to a point that, today, these markets boast of posh and prestigious residential options that are being preferred over even those in Delhi, eliciting comparisons with the best in the national capital.
The table above captures the price trends as they evolved since 2003 to the current period, which perhaps was significant for the low housing prices that prevailed across the markets.
Vasant Vihar continues to be preferred location for both high-end buyers and investors. Interestingly, independent floors priced at Rs 6,000 per sq ft in the year 2003 are commanding Rs 40,000 per sq ft today. Plots that were quoted at Rs 1,00,000 per sq yard in 2003 are now going for Rs 7,00,000 per sq yard. It is also important to note that these prices till 2006 had only risen marginally and have witnessed the maximum rise in the last four years. Thus, the prices have risen by seven times in the last seven years!
In contrast, Noida has doubled in apartment pricing since 2003. Noida is the only exception to the rule where the prices were higher in the year 2006 and have fallen marginally since then. The reasons that can be attributed to this negative movement in pricing are:
Low commercial development compared to Gurgaon
Perception of poor law and order
Significant distance from the Delhi airport
However, to give the market its due, overall, the residential market in Noida has doubled in appreciation for investors since 2003.
The most interesting market on display is Gurgaon, which has given the maximum returns to its investors today and continues to be a very promising destination. If we evaluate the trend in the market since 2003, we see that the ultra-luxury apartment pricing has gone up by 10 times. Plotted development has seen a rise in pricing by 12 times. Plots that were priced at Rs 11,000 per sq yard in 2003 are Rs 1,30,000 per sq yard today. Thus, Gurgaon as a market has given the maximum return on investment to its stakeholders.
Courtesy by : Times Property Dtd: August 21, 2010
|FAST TRACK BETWEEN DWARKA AND GURGAON
India is one of the fastest growing major economies of the world with a GDP growth of 6.7% in the fiscal year 2009 and an expected growth of 6.5% in the fiscal year 2010: RBI
The services sector has grown at a rapid pace in recent times. An important factor in the development of the services sector has been the strong growth of the IT and ITeS. Growth of IT and ITeS in the NCR region, especially in Gurgaon, has had positive effect not only in Gurgaon but its adjacent areas and Dwarka. Dwarka is mushrooming as the hub of commercial and entertainment activities and is amongst the most preferred locations to stay in the NCR region. And with the Gurgaon-Manesar Master Plan 2021, the region will witness further expansion of the Gurgaon city.
Therefore, automatically, a question that is being raised is on the civil infrastructure to support the traffic in and out of city. There are speculations around the viability of the NH 8 and Mehrauli-Gurgaon road in handling the traffic load; and whether the Metro line reduce the number of vehicles plying in and out of Gurgaon. Presently, the NH 8 serves as the aorta distributing the traffic approaching both in and out of the city.
However choking of this main circulating system is not uncommon, therefore the need for a parallel highway that links Dwarka and Gurgaon and frees NH 8 from its existing burden of commuters from Delhi.
The Dwarka Expressway or Northern Peripheral Expressway is an eight-lane, expressway being developed by the Haryana Urban Development Authority (HUDA) at a cost of Rs 120 crore. This expressway is a part of Gurgaon-Manesar Master Plan 2021 (Urban Complex Plan) and will connect Dwarka to the NH 8 and will have 30 metres of green belt on both sides. This will be achieved through the addition of green belt areas, an increase in the residential units and commercial spaces, and improvements in connectivity with Delhi.
Compared to 9,881 hectares in the earlier master plan, the new master plan is spread over 33,726 hectares and includes 58 new sectors in addition to the existing 57 sectors. The Gurgaon-Manesar Urban Complex Plan 2021 is unique in a way that it plans to reduce population density in the newly urbanized areas, as compared to existing urbanized districts.
The proposed Dwarka Expressway is an 18km stretch of 150m wide-road starting from Dwarka, which will connect Palam Vihar and the forthcoming big SEZs in Gurgaon to join the NH 8 near Kherki Dhaula. The road from Dwarka is expected to reduce the travel time from west Delhi by half. If one stays in Dwarka, he will no longer have to hit the congested NH 8 before the Delhi-Gurgaon border and the toll bridge. The new link would be parallel to the expressway till it merges ahead of the IFFCO Chowk. The proposed expressway will touch 16 new nearby residential colonies and would also touch a commercial corridor and link with Harsaru dry port. With the land acquisition nearing completion and awaiting hearing from the court on demolition of some houses in Palam Vihar, the project is all set to provide new connectivity between Gurgaon and Dwarka and international and domestic airport resulting in increased real estate activity in the area, from Sector 99 to 115 in Gurgaon.
A number of private builders have acquired licences from the Haryana state government to develop townships beside the expressway and to connect it to the proposed Southern Peripheral Expressway. The SEZs by Reliance and Haryana government would also be its major touching points. The upcoming sectors of Gurgaon, particularly residential Sectors 102 and 103, located in proximity to the proposed SEZ area as per the Gurgaon-Manesar Master Plan 2021 will be 'hot property' in the near future.
Among the major townships that are coming up around the region and in Sector 37 are the BPTP "Spacio - Park Serene". Spread over an area of 24 acre amidst a green environment, the residential housing project offers apartment starting at Rs 25.25 lakh. Commenting on the project and its vicinity to the proposed 18km long Dwarka Expressway, Amit Raj Jain, BPTP's marketing chief, said: "Gurgaon has emerged as the hub of a 'young corporate India' and there is a huge demand for residential apartments that suit their lifestyle requirements. 'Spacio - Park Serene' has been designed to focus on the lifestyle of young buyers, aspiring to own a house in the early stages of their career. The key differentiation here is that this emerging young buyer has a far greater sense of personal space and Spacio - Park Serene has been created in a manner that provides ample indoor space - be it study corner, the lounge area, the TV room and the balcony - appealing to their individual sensibilities."
The real estate sector in the NCR, and especially Gurgaon, has grown in importance with the liberalization of the Indian economy. The consequential increase in business opportunities and migration of people to Gurgaon has in turn, increased the demand for commercial and housing space, especially rental housing. Developments in the real estate sector influence, and are in turn affected by the developments in the retail, hospitality and entertainment industries (like hotels, resorts, cinema theatres), community services (like hospitals, schools) and IT and ITeS (like call centres). Rising demand from the technology sector, demographic shift (increasing disposable incomes and urbanization), suburban developmental models and favorable government policies have changed the face of India's real estate development sector. The growing disposable income of India's middleand upper-income classes, together with changes in lifestyle, has resulted in a
substantial change in the nature of consumer demands. Increasingly, consumers are seeking better housing and better amenities like schools, retail areas, health clubs and parks in new residential developments. Lower interest rates on financing from India's retail banks and housing finance companies, particularly for residential real estate, and favourable tax treatment of loans, have helped fuel the recent growth of the Indian real estate market.
The advantages of these sectors are immense if we were to compare to other sectors in Gurgaon, all the infrastructural issues like bad connectivity, shortage of power, lack of green areas and parks, low water levels, etc, are not present in this area. In fact, the lessons learnt from Gurgaon have woken up the government to go about this development in a very planned manner. Embassies are moving to this new location, owing to its excellent connectivity and proximity to the international airport too. Therefore, investment into real estate in these sectors is very lucrative and perhaps will give back returns manifold in comparison to any other sector in Gurgaon.
Courtesy by Times property Dtd : August 21, 2010
|BUY NOW, BUY FAR
It is better to buy a first house in any new upcoming area where it is available within your affordable range rather than postponing the decision to buy one in a choice location — if it is beyond your means
Buying a house is one of the most important decisions one takes in his life. It is not only about the finances but also about the selection of a suitable property, which is important to make you feel good about your decision — after all, you are going to live with it (the decision) for a long time, if not for the rest of your life (in the house).
But many a times, it has been found that the property you have selected to buy is beyond your means. And the property, you can afford, you feel, is not suitable for you. This make you put off the plan for some other time.
However, even after a few years, when your income has increased substantially, you find yourself in a similar dilemma. What is even more frustrating is that the property that was affordable a few years ago but was found not suitable at that time has appreciated substantially to become unaffordable now.
You may discover that connectivity and social and physical infrastructure of the area in which you were not interested to buy a house a few years back have improved beyond recognition. But, unfortunately, the prices of real estate in that area would also have almost trebled in the same period. What is intriguing is that prices of houses in the areas which were in the central part of the city have not appreciated that fast. But still, they remained beyond your reach.
For example a few years ago — in 2004 for instance — the price of a three-bedroom apartment in East Delhi localities like Mayur Vihar, Patparganj and Vasundhara Enclave was at around Rs 20 lakh. The price of a similar apartment in South Delhi at that time was around Rs 50 lakh. But today, the prices of apartments in East Delhi have gone up by six times and command nearly Rs 1.25 crore. At the same time, the appreciation in prices of apartments in South Delhi is not that steep. In fact, today, the prices are in the same range in both the localities. Now, what should a prospective ‘undecided’ buyer do?
Going by past evidence, it has been found that appreciation in the prices of recently developed real estate on the outskirts of a city is much faster than those in the central part. In the NCR also, property prices in Gurgaon, Noida, Indirapuram and Vaishali appreciated much faster in the last five years, than those in the central part. Now the prices in central parts of Noida and Gurgaon, which are closer to Delhi, have gone beyond the reach of the average middle class. In these areas, apartments are commanding prices of around Rs 6,000 per square feet. The sale price of a 3-bedroom apartment is over Rs 1 crore.
But, the good news for the average middle-class buyer is that a number of new projects have been announced in the affordable price range of Rs 15 lakh to Rs 40 lakh. A large number of apartments and independent houses are being developed in areas like Noida Extension (Greater Noida, Sector 1-4), Noida-Greater Noida Expressway, Greater Noida, Gurgaon Phase V, Sohna Road, Manesar, Daruhera, Faridabad-Nahar Paar area, Kundli and Sonipat, among others.
As the NCR has witnessed a spurt in infrastructure development, connectivity to these areas is likely to improve. It has been found that the local authorities are keen to bring in the Metro rail connectivity to these areas. There are reports that the authorities of Greater Noida, Ghaziabad, Meerut and Faridabad have been in discussion with the DMRC to take the Metro train service to their respective cities. Besides this, the NHAI is also working out a plan to widen existing national highways. This will be a great relief to most of the new developments, which are coming up on the outskirts of the NCR as this will reduce the travel time to the central part of the city.
Besides this, as many of developers are coming up with townships on large land parcels of over 100 acre, the provisions for social infrastructures like schools, hospitals, and local markets are also factored in. Not only this, most of the new development hubs which are underway on the outskirts of the NCR are also developing commercial properties like IT parks, hospitals, hotels and office space so that a large number of residents of the area could find employment there itself. Some areas like Kundli and Greater Noida have a number of educational institutions including engineering colleges, medical colleges and vocational centers coming up in their locality.
Many of these areas will change beyond recognition after a couple of years. Therefore, if you want to buy a house but are undecided, t ake a decision on the basis of the property's future projection. However, you must be very conservative while doing so. Don't take all the promises and projections at their face value. If an apartment is quoting at a price of Rs 3,000 per sq feet at a certain distance from the central part of a city, you can consider buying a house in a new upcoming hub at a similar distance at around Rs 2,000 per sq feet. After you get the possession in three-four years’ time from the date of your purchase, if you still want to buy a property in another area, you can sell this property with some capital gains. This, in fact, will help you in buying the new house. If it is your first house, you will not have to pay any tax as you are using the money to buy another house to live.
Therefore, it is better to buy a first house in any new upcoming area where it is available within your affordable range. As you can't shift to these houses immediately, you must make a provision for paying rent for three years. For this, you can also choose construction-linked payment. In this, your EMI will increase as the bank will release funds to developer on the basis of the completion of construction. This will save you from the payment of EMI and rents simultaneously to a great extent.
GOING BY PAST EVIDENCE, IT HAS BEEN FOUND THAT APPRECIATION IN THE PRICES OF RECENTLY DEVELOPED REAL ESTATE ON THE OUTSKIRTS OF A CITY IS MUCH FASTER THAN THOSE IN THE CENTRAL PART OF THE CITY
Courtesy by Times Property Dtd : August 21, 2010
|SVP Group and Ashiana Homes Come Together to Make Luxury Villas in Gaziabad
The two Delhi NCR based real estate developers SVP Group and Ashiana Homes have come together to introduce mega luxury housing project Villa Anandam on the Meerut Road, NH-58, Ghaziabad. The 198 villas will be constructed in 12 acres of land and are expected to be ready for possession by mid-2012. The total cost of this residential project will be Rs 150 crore.
Villa Anandam is well connected by rail and road as well as with other fully developed infrastructural facilities around it such as schools, hospitals and educational institutions. In the first phase, Villa Anandam will offer 125 independent luxurious four bedrooms duplex villas on 140 sq yard, 146 sq yard and 178 sq yard with a built-up area of 1,810 sq ft starting at Rs 75 lakh.
Vijay Jindal, chairman and managing director, SVP Group, said, “In the last couple of years, this location has witnessed unprecedented growth, emerging as one of most coveted destination. Villa Anandam goes much beyond quality construction, making a definitive statement in opulence and luxury.”
“Luxury residential market was never out of the scene. It was always around, the only hindrance was the people’s unwillingness to buy property because of economic reasons. But now things are getting back on track. Our this mega residential project is on NH-58, Ghaziabad ( NCR )” he added.
|Real Estate Revival Encouraging Developers to Revisit IPO’s
With the equity market holding up, some of the real estate companies are revisiting their share-offering plans, even at a price lower than what they had initially hoped for. Many of these companies already have Sebi’s approval to launch their initial public offerings (IPOs), but deferred their plans in the face of unfavourable market conditions. Companies that have the regulator’s approval with a validity until 2011 include Lodha Developers with an indicative IPO size of Rs 2,500 crore, AMR Constructions (Rs 145 crore),Delhi-based Ambiance (Rs 1,293 crore), Emaar MGF (Rs 3,850 crore), Oberoi Realty (Rs 1,002 crore), Kumar Urban Development (Rs 320 crore), Prestige Estates (Rs 971 crore), Neptune Developers (Rs 378 crore), and BPTP (Rs 1,500 crore).
“The secondary market is witnessing some euphoria, and sectors like telecom and real estate are being rerated,” said said a top official at a foreign investment bank involved in one of these deals. “Also, volatility has reduced, which is good for IPO-bound companies. We are likely to see some of the bigger real estate players come back to the market again,” he said, but also cautioned that only a few companies would be in a position to take advantage of this window of opportunity.
|Brigade Enterprises Seeks shareholders’ Approval to Raise Rs 750 crore of Additional Funding
Bangalore-based real estate company, Brigade Enterprises has sought shareholders’ approval to raise Rs 750 crore of additional funding. The money will be raised through various instruments such as global depository receipts (GDRs), American depository receipts (ADRs), foreign currency convertible bonds (FCCBs) or via placement with qualified institutional investors.
In a note to shareholders, ahead of the annual general meeting on July 23, the company said, “The money will be used to fund the construction cost of ongoing and new residential projects, acquisition of land, repayment of debts, augmentation of working capital, investment opportunities and for other general corporate purposes.” “We will take resolution of Rs 750 crore but will only raise around Rs 350-400 crore in the first tranche,” said R J Shama Sunder, general manager, finance, Brigade Enterprises.
The Banglore based realty firm, which primarily focuses on development of residential units in South India, is also seeking shareholder approval to list its stock on the London, Singapore, Luxembourg and New York Stock Exchanges. “We have an option of looking to raise money from the international market by listing the company on foreign stock exchanges,” said Sunder.
Shareholders will be called upon to approve the appointment of KR Srinivas Murthy as one of the directors of the company. Murthy is currently on the boards of CMC, National Stock Exchange of India and Himatsingka Seide.
|Reverse mortgage unlocks property’s potential
Ashish Gupta explains how this concept helps property owners get a regular income without having to surrender possession
Reverse mortgage is a financial product that enables senior citizens (60 years plus) to mortgage their real estate assets with a lender and convert part of the equity into tax-free regular income. This saves them from selling assets in their lifetime.
The Life Insurance Corporation (LIC) is planning to enter the reverse mortgage business. LIC's entry in this segment is significant as the life insurer has a huge base. According to the Insurance Regulatory Development Authority's (IRDA) annual report, LIC has a 29 percent share in the total new life insurance policies sold in 2008-09.
The National Housing Bank's (NHB) reverse mortgage loan-enabled annuity scheme has sanctioned 40 loans estimated at Rs 100 crores. The scheme, without the life-long payment benefit, was launched in 2007. According to the NHB, around 7,000 loans amounting to around Rs 1,400 crores have been sanctioned till March 31, 2010. It is expected that the modified scheme that provides life-long annuity to the buyer and his spouse will catch on with the entry of LIC in the segment.
With the existing scheme, LIC will provide payments in the form of annuity to policyholders. Once the assessed value of the house and the loan amount to be disbursed is decided on, LIC will start making payments till the policyholder survives. The bank will make full payment of the total loan amount to the LIC once the policy starts which the insurer can invest as per the company's investment guidelines.
In case of a reverse mortgage, the property owner surrenders the title of the property to a financial institution. The financial institution doesn't pay the entire amount to the owner upfront. On the contrary, it pays out a regular sum each month for the agreed time. The owner gets to stay in the property along with his spouse for their lifetime. Thus, the owner can ensure a regular cash flow in times of need and enjoy the benefit of staying in the property. After the owner's death, the property is transferred to the institution, and not to the heirs.
Reverse mortgage is a relatively new concept in India. The concept is quite popular in developed countries to generate cash flows.
The aim is to make immovable property more liquid and generate returns out of the asset while it is used by the owner. The amount paid out each month is for a specific period of time. The monthly payout depends on the value of the property, the term of the agreement and the rate of payment. The valuation of the property is to be done by professionals. The entire payout mechanism - calculation and computation - depends on the law of probability.
The financing institution has to bear the risk of the individual outliving the agreement. At the expiry of the agreement period, the monthly payments to the owner stops.
Reverse mortgage is of immense use in unlocking the otherwise illiquid asset. Till now, immovable property has been treated as one of the most illiquid assets. Reverse mortgage unlocks the liquidity potential of this asset. It helps the owner get good returns from his immovable property, without having to part with it. The owner can continue with the possession of the property during his lifetime.
Reverse mortgage unlocks property’s potential
A NOVEL CONCEPT
Reverse mortgage is a relatively new concept in India
It is a financial product that enables senior citizens to get tax-free regular income
The concept is meant to unlock the income potential of a property
A significant aspect of this concept is the owner retains possession through his lifetime
It makes property as an investment option work better, especially for risk-averse senior citizens
It is a popular income-generating product in the West
The monthly payout depends on the value of property
The financing institution bears the risk of the individual outliving the agreement
Courtesy by: Times Property Dtd: July 3, 2010
|Maintenance of rented property
The issue of maintenance of rented premises depends a lot on the terms and conditions agreed upon between the parties and laid down in the lease agreement. The Rent Control Acts of various States also provide some guidance on this. According to these Acts, the landlord has a duty to keep the premises in good condition.
Every landlord is bound to keep the premises in good and tenantable repairs. If the landlord neglects or fails to undertake any repairs which he is bound to undertake, within a reasonable time after notice in writing, the tenant may undertake the repairs himself and deduct the expenses on such repairs from the rent to recover them from the landlord. This is subject to the condition that the amount so deducted or recoverable in any year does not exceed one-twelfth of the rent payable by the tenant for that year.
It is the responsibility of the landlord to ensure that the tenanted premises are habitable and safe. If need be, he should ensure that adequate repairs are undertaken to ensure this. In case the landlord is unable to do so or is unwilling to do so, the tenant may undertake these repairs. He needs to give proper notice to the landlord about this, specifically mentioning the nature of problems, the nature of inconvenience caused, the nature of safety hazards, and the necessary steps required to correct the problem. Moreover, it should be specifically mentioned that in case the landlord fails to undertake the repairs within the specified time, the tenant will have them done and will be eligible to recover the amount spent from the landlord.
However, it should be noted that this would cover only repairs which are essential and urgent. It would not cover circumstances wherein the tenant wants some alterations or additions for his convenience. The essential test is if the repairs are needed to keep the premises safe, habitable and usable.
In case any repairs are to be undertaken, without which the premises are not habitable or usable except with undue inconvenience, and the landlord neglects or fails to undertake them after notice in writing, the tenant may apply to the controller under the Rent Acts for permission to undertake the repairs himself. He may submit to the controller an estimate of the costs of such repairs. If any repairs not covered by the amount are necessary in the opinion of the controller, and the tenant agrees to bear the excess cost himself, the controller may permit the tenant to undertake the repairs.
Courtesy by: Times Property Dtd: July 3, 2010
|Pension funds can help housing
Housing loan account for only about 7% of the country’s GDP. Housing finance regulator National Housing Bank’s executive director RV Verma says that pension funds can help channelize long-term funds for the housing sector. In a freewheeling interview with ET’s Dheeraj Tiwari, Mr Verma talks about NHB’S plants as a regulator as well as development financing institution. Excerpts:
Unlike the Reserve Bank Of India, you have not directed housing finance companies (HFCs) to come out with base rates. Why?
First, we need to see and analyse the impact of the base rate on the cost of funds for HFCs. Unlike banks, HFCs are a more heterogeneous group with wider variation in their cost and landing profile. They also have diverse source of funding and are more exposed to changes in the liquidity conditions in the market. So their cost of funds varies more. The impact of the ‘base rate’ approach vis-à-vis their housing loan portfolios, which are typically long term in nature, will also need to be closely examined from the asset-liability mismatch perspective before introducing a base rate regime.
What are you plans for the residential mortgage-backed securitization (RMBS) market?
Securitization is a very powerful instrument to augment funds for the housing sector. Home loan portfolios are good quality assets and these securitised portfolios will have high acceptability among the investors. National Housing Bank has to play an important role as an intermediary, market-maker and a credit enhancer. Pension and provident funds are natural investor in RMBS papers, which would help channel long-term funds for housing. NHB has done 14 issues of RMBS in the past and we will be scaling this up.
Are you looking at raising more capital? What has the bank’s financial performance been like?
Besides capital, we have raised funds through different sources that include term loans, issue of bonds, and public deposit scheme. We are also exploring other international borrowings including from the World Bank for low-income housing. During the current year 2009-10 ending on June 30, 2010, our funds mobilization is Rs 11,600 crore. On the assets side, we are likely to close with disbursements of about Rs 8,000 crore. We should be closing the current year with growth in loans and advances of about 18-20%. National Housing Bank’s profit after tax is likely to be about Rs 290 crore, an all time high, marking a 22% growth over last year. Our business model is that of a development finance institution operating on a high-volume and low-margin system.
Courtesy by: The Economic Times Dtd: June 23, 2010
|Lodha to invest Rs 2,000 cr for world's tallest homes
MUMBAI: Real estate firm Lodha Developers will invest Rs 2,000 crore to develop the world’s tallest residential tower in Mumbai to cash in on the continued surge in home prices in India’s commercial capital.
ET - 9 Jun 2010
“We will fund the project through internal accruals and pre-launch sales,” MD Abhishek Lodha told a press conference. “We are also looking at some private equity investments for the project.”
Although he declined to disclose details of the PE investments, sources said Lodha has initiated discussions with leading Singapore funds GIC and Temasek, and a property fund of mortgage giant HDFC to raise over Rs 1,000 crore.
Lodha Developers will start bookings by the end of this month and expects to complete the project by 2014. “We expect to roll out 300 residential apartments and notch sales of about Rs 5,000 crore from the project,” said Mr Lodha.
Once complete, the 117-storey tower will be close to half-a-km tall, dwarfing the present tallest residential tower, Queensland Number One, in Australia that has a height of 323 meter. Christened as World One, the tower will be higher than some of the iconic global landmarks including Sears Tower in Chicago, Jin Mao Building in Shanghai and The Empire State Building in New Work.
“It is not about the tallest tower, but we are looking at providing our customers a great experience to live in,” said Mr Lodha.
The tower will come up on the 17-acre plot of the defunct Shrinivas Mill in Lower Parel, central Mumbai, which the Lodhas bought nearly five-years ago. It will house three and four BHKs, lavish villas with private pools and some super-luxurious duplex flats.
It will have over 5 acres of landscape area, including an 80,000 square feet sports club at a height of 175 feet above ground. It will also have an observatory at a height of 1,000 ft. Flats will carry a minimum price tag of Rs 7.5 crore.
The company has hired the services of New York-based architects Pei Cobb Freed and Partners, which has completed nearly 200 architectural marvels across the globe, including Louvre Pyramid in Paris, Bank of China Tower in Hong Kong and John Hancock Tower in Boston.
“We can assure you that the building will have all the necessary safety measures in case of an emergency,” Jay Berman, partner at Pei Cobb and Freed told ET.
The company, which deferred its initial share sale last year, will launch an IPO once the market is stable, said Mr Lodha. Lodha can now ask for higher valuations due to its ownership on two iconic buildings, said owner of a real estate company who did not wish to be named.
Last month, the company bagged a 22.5-acre property in Mumbai after bidding Rs 4,050 crore in the country’s biggest land deal.
|Lodha plans 117-storey tallest housing tower in Mumbai
MUMBAI: Realty major, Lodha Developers, plans to build the world's tallest tower at a cost of Rs 2,000-crore in central Mumbai to be ready by 2014, a top company official said.
ET - 8 Jun 2010
Lodha Developers has tied-up with New York-based architectural firm, Pei Cobb Freed and Partners and structural engineering firm, LERA, for the project, christened as World One, to be built over 17-acres at Upper Worli.
"The project pegged at Rs 2,000-crore and to be built on a 17-acre site will have the world's tallest residential tower," Lodha Group's Managing Director, Abhisheck Lodha, told reporters here today.
"We have strived hard to ensure that this development not only gains from Mumbai's energy but also gives back high quality public spaces to the city," he said.
Through the partnership with global architects, designers and engineers, the company seeks to bring to Mumbai, a landmark, which would "exemplify the spirit of Mumbai--to always soar higher through hard work and passion," Lodha said.
The company, which plans to launch a $650 million initial public offering later this year, will start bookings by end of this month and expects to complete the project, called World One, by 2014, Abhisheck Lodha told reporters.
|Gurgaon to develop nine new sectors
New Delhi: The Haryana government has decided to develop six new residential sectors and three new commercial sectors in Gurgaon to meet the growing demand for housing and commercial space.
These sectors — 58 to 65 and 65 to 67 — will be developed over an area of 850.10 acres. A senior government official said that the state government has started acquiring land in eight villages around Gurgaon.
The villages are Medawas, Tigda, Behrampur, Ulvaas, Badhshahpur, Nangali Umarpur, Ghata and Kadarpur. ‘‘After the acquisition of the land, the new sectors would be developed,’’ he said. The 2021 development plan of Gurgaon-Manesar urban complex envisages doubling of the number of residential sectors in Gurgaon to accommodate more people.
‘‘We want to avoid a situation like Delhi, where residential flats and complexes are used for commercial purposes owing to lack of space,” said an HUDA official.
courtesy Times of India - Jun 1, 2010
|ORDER HC comes to rescue of general power of attorney holders
|Spelling relief to lakhs of people who bought flats in various apartments on gener- al power of attorney (GPA), the Delhi High Court on Tuesday directed the Delhi Government to immediately implement the provisions of Delhi Apartment Ownership Act, 1986 .
Sincere implementation of the provisions will effectively free GPA-holders, who bought their houses in resale, from the clutches of brokers, builders, promoters and land mafia and protect their rights.
These include formation of their own association, mem- bership at par with original allottees and voting rights and right to fix maintenance.
The order by a Bench of jus- tices A.K. Sikri and Ajit Bharihoke came on a PIL filed by lawyer O.S. Bajpai, who said vested interests, including bro- kers and land mafia, continued to retain hold on various apart- ment complexes because the government failed to implement , d the Act passed 20 years ago.
The court asked the govern- f ment to appoint competent - area-wise authorities within a l month for effective implemen- d tation of the Act.
Directing the competent - authorities to inform the own- t ers of the apartments about d their right to form owners' asso- d ciation in accordance with the - Act, the court said such an asso- d ciation shall take over the man- - agement and books of account e and other documents from the t builders and promoters
courtesy Hindustan Times - Jun 1, 2010
|India's biggest land deal in Mumbai
|A 25,000-sq-m plot in Wadala has attracted a sky-piercing bid of Rs 4,053 crore to the Mumbai Metropolitan Region Development Authority (MMRDA), the offer coming after a two-year slump in the realty market.
The winning bidder, Lodha Crown Buildmart Pvt Ltd, has quoted a price of Rs 81,818 per sq m of the permissible built-up area on the plot, which the MMRDA had earlier earmarked for an iconic tower.
If the deal goes through, it will be the country's highest land transaction ever. The Delhi-based BPTP had quoted Rs 5,006 crore for a 95-acre plot put up for sale by the Noida Authority, but the deal soon fell through.
With the payment model allowed for the Wadala plot -five years at 10 per cent compound interest is the total amount that the developer will shell out works out to a staggering Rs 5,700 crore.
The aggressive bid by Lodha group comes ahead of the launch of its initial public offering (IPO). The deal is unprecedented in terms not only of the price offered but also of floor space index (FSI) is a whopping 19.8 is .offered on the plot against the standard of 1.33.
"This is an iconic bid for us. The price offered works out to more than double the MMRDA's reserve price of Rs 40,000 per square metre," said MMRDA additional commissioner S V R Srinivas.
He added the aggressive bidding is justified in view of the expected boost to connectivity in the area. "Both the monorail and the Eastern freeway, which will make the area more accessible, will be commissioned next year. After that, Wadala will be a hot cake for real estate," said Srinivas.
Rolling back its plans to build a 101-storey iconic tower, the MMRDA decided a few months ago to sell the plot to private developers who could then build a tower. Granting further leeway, the MMRDA soon said the winning developer was free to build multiple smaller structures instead of a sole tall tower.
The FSI boost entitles the developer to a total built-up area of 5 million sq ft. Taking the super-built-up area into account, the final saleable component will go up to as high as 8 million sq ft, which will translate into an astronomical profit.
Lodha Group director Abhishek Lodha said the company plans to build a residential project on the plot. "We haven't yet drawn up plans as to whether the project will have a single tall tower or several structures but we plan to launch the project at Rs 13,000 per sq ft," said Lodha.
The existing residential rates at Wadala are around Rs 8,500 per sq ft, which could be hiked after the deal. Over the last few months, Ajmera Developers have increased their rates at the Bhakti Park project to Rs 13,000 a sq ft. Real estate sources, however, say they have been unable to sell flats at the increased rates
Courtesy yahoo news dtd:26/05/2010
|DLF to launch Mumbai’s largest luxury housing project soon
|DLF, the country’s largest real estate company, is planning to launch its Lower Parel high end housing project soon, said sources in the know.
Touted as Mumbai’s ‘largest luxury residential project’ is expected to have three towers with 1,000 apartments and one of the largest parking lots in the city. The apartments are likely to be in the Rs 5-10 crore range each, with the minimum size being 2,000 sq ft, property consultants said.
DLF has sounded out major property brokers and consultants. Though brokers say the company is likely to launch in the next one-and-a-half months, company executives maintain the launch is a few months away. “We are in no hurry. With markets improving, we hope to get good pricing for the project,” said Executive Director Rajeev Talwar.
According to consultants, the company is banking on higher floor space index (FSI), the amount of construction allowed on a plot of land) granted for parking lot and hand that over to the government for public use. So, you can build four square feet. Normally, developers get an FSI of 3.25, due to restrictions from the fire department police and so on. For those without a parking lot, the FSI is capped at 1.33.
Given an FSI of 3.25, the 17-acre project is expected to have total development of 4-5 million sq ft, including the parking lot (an acre equals 43,560 sq ft), consultants said.
Office boom on ex-mills land
The Worli-Lower Parel belt in central Mumbai, a former hub of textile mills, is witnessing modern office developments by realtors such as individuals.
DLF made news in 2005 when it bought a 17-acre Mumbai Textiles Mills land - lot from National Textiles Corporation (NTC) for Rs 702 crore. The company had then said it would build a ‘futuristic-retail-cum-entertainment complex’ on the plot.
Earlier this year, the company changed its plans to build a high-end mall project to a high-end premium residential project, as demand for retail space came down sharply. According to a consultant, the project plans were changed several times as the real estate markets went through ups and down during the past five years. At one point, the company was also planning to build an office-cum-hotel complex on the plot.
“Considering it is a large project, it has to be superior and offer better pricing, as it is three years away from completion,” said Sanjay Dutt, chief executive at Jones Lang LaSalle Meghraj, a property consultant.
According to Anand Narayanan, national director, residential agency, of Knight Frank India, central Mumbai is expected to see around 7,000 premium housing units in the Rs 4.5-crore bracket in the next eight-odd months. “None of them are coming at attractive prices and efficient sizes, even if land prices allow them to do so,” he said.
“There is a appetite in the sub-Rs 4 crore segment and supply in that segment is being absorbed. But, the market cannot absorb the kind of supply coming up in million-dollar homes (those above Rs 4.5 crore),” he adds.
Courtesy: BS Dtd 26th May 2010
|Property registration fee hiked after 45 years
|New Delhi: Delhi cabinet on Monday gave nod to a proposal to significantly increase the registration fee of property in the city. The revision comes after a gap of 45 years.
Officials said a rationalization was long overdue given the ridiculously low rates of filing of appeals and fee for registering wills, gift deeds etc. The revision is expected to increase revenue collection from Rs 1.5 crore per year to Rs 100 crore.
As per the new rates, fee for registering conveyance deed, sale deed, gift deed etc relating to immovable properties will be 1% of the stated value or the circle rate whichever is higher up to a fee of Rs 50,000. Where the value of the property is not mentioned, the fee will be Rs 1,000. Earlier the fees was just Rs 100 for both categories.
The fee has also been revised from Rs 100 to Rs 1,000 for registration of lease of an immovable property and from Rs 100 to Rs 500 for registration of wills. Miscellaneous registration of documents will now cost Rs 1,000 per document.
Officials said the rock-bottom rates had meant that despite the flurry of registration, government collection was very low. In 1007-08, 291469 documents were registered which generated a revenue of around Rs 1.48 crore. In 2008-09, Rs 1.40 crore was earned from registration of 284203 documents while in 2009-10 the earning from registration of 2,74,466 document was around Rs 1.31 crore.
The most dramatic revision has happened for fee relating to filing of various appeals. In this case, the fee has been revised to Rs 100 from Re 1 in some cases and Rs 10 in others. For inspection or search, the fee now stands at Rs 100 from the earlier Re 1.50. Copies of registered documents will now come at Rs 10 per page instead of the earlier 25-75p per page. Attending registrations at private residences in case of the infirm or in jail for the incarcerated will now be charged Rs 500 instead of Rs 10. In all other cases where a Rs 20 fee was charged, now Rs 200 will be charged.
Filing for translation will now cost Rs 50 instead of Rs 2. Authentication of a power of attorney for which fee was Rs 3 earlier, will now cost Rs 1,000. Rs 10 will be charged now instead of Rs 10 for deposit/withdrawal/opening of the will. Safe custody of documents after registration will cost Rs 50 per week instead of Re 1 per week.
Courtesy:- Times of india dtd:- 18-may-2010
|DLF to sell Aman Resorts
|DLF on Monday confirmed it had decided to sell its stake in ultra-luxury hotel group Aman Resorts as part of its planned exit from the hospitality business, but a sale would exclude Aman’s New Delhi property.
THEcountry’s top real estate company DLF confirmed on Monday it had decided to sell its stake in ultra-luxury hotel group Aman Resorts as part of its planned exit from the hospitality business, but a sale would exclude Aman’s New Delhi property.
DLF CFO Ashok Tyagi told analysts that that the company was looking at potential investors for Aman, which has 23 hotels across 12 countries patronised by the super-rich. This portfolio includes the Aman Lodhi, a 68-room hotel which was commissioned in 2009. DLF hopes the sale of its 97% stake in Aman will help it pay down debt, which now stands at Rs 14,821 crore following the consolidation of liabilities of DLF Asset Ltd.
DLF bought its 97% stake in Aman in 2007 for $400 million. It is hoping to raise Rs 2,000 crore from the sale, which is being managed by Goldman Sachs. Aman’s founder Adrian Zecha owns the remaining 3% stake. DLF did not say why it planned to retain the Aman Lodhi and what it would do with it after the sale, but its exclusion is unlikely to matter much to potential buyers, most of whom would be mainly attracted by its resort properties. The Aman Lodhi is the group’s first and only city property. DLF has also dropped its plan to sell the wind energy business. The group has plans to cut its debt by Rs 5,000 crore, more than half of which — Rs 2,700 crore – will be from the sale of non-core assets and refunds from various government authorities in the next 12-18 months.
Courtesy:- Economics time dtd:- 18-may-2010
DLF net surges 168% in Jan-March
Real estate major DLF reported a surge in profit for January- March 2010 period
at Rs 426 crore from Rs Rs 159 crore a year ago. Total income for the quarter
was also up by 58 per cent.
However, for the full year 2009-10, both income and net profit fell as compared
to the previous year -- 25 per cent and 61 per cent respectively.
Courtesy: HT Estate Dtd:-15-05-2010
| DDA is offering 8,000 flats for draw in
June while another 7,000 flats are in various stages of construction all over
| Shri Ram Shaw
With the days of
economic slowdown rapidly coming to an end, there's a housing bonanza in the
offing for the burgeoning population of the National Capital Region (NCR). The
Delhi Development Authority (DDA) is likely to announce a new megahousing
scheme, where approximately 8,000 flats will be up for a draw. The projects are
spread across the national capital in areas like Jasola, Narela, Vasant Kunj and
Dwarka, among others. Of the 15,000 houses currently under construction, nearly
8,000 will be ready by June.
The ministry of urban
development says that the DDA has to announce its next scheme soon to avoid
watch and ward costs and maintenance cots on the completed units. Watch and ward
costs entail hiring of security personnel to watch over completed units to
ensure that fittings and fixtures are not stolen. These costs could run up a
A senior DDA official said that a three month gap is usually preferred between
the announcement of the scheme and the allotment of the houses. Since the houses
will be ready for possession by June, the announcement is likely to be made
three months ahead. Official confirmed that another 7,000 units were at various
stages of completion. No formal date has been set for the announcement and the
finer details of the scheme are being worked out.
The last time the DDA
announced a housing scheme was in September 2008, and the draw for it was held
in December. Under that scheme, 5,238 houses were up for sale and the authority
received nearly six lakh applications. Officials expect the 2010 scheme to draw
upwards of 10 lakh applications. In December 2008, after the last draw, a
proposal was made by the DDA to the ministry of urban development, requesting a
clause be inserted into future schemes, wherein houses under the SC/ST category
will not be allowed to be resold for at least 15 years after the allotment. The
ministry is still sitting over the proposal.
Courtesy ET Realty dtd.14-05-2010
| Funding fundas in real estate
Developers opt to fund their construction projects through pre-launch and
pre-sale mechanisms, as by far, these are the cheapest sources of finance
Namrata Kohli Real estate finance is a
grey area. In reality, realty funding happens through pre launches. So, a
builder typically asks buyers to cough up, say, a third of the final cost of a
house even before the first piles are drilled into the ground. In effect, very
little of the builder's own capital is at risk. This has been the done thing -
an arrangement between builder and buyer, which has been successful owing to
scarcity of housing in the country.
Real estate development business requires constant acquisition of land for
future projects. According to Sharad Jhingan, COO (private equity fund) at Lanco
Infratech Limited, "Due to the short supply of land and lack of habitable
locations and urban infrastructure outside established locations, a developer
starts to sell even before finalizing the development plans. This is more a
reflection of supply-side constraints. A developer wants to grow as fast a
How do private equity funds view Indian property market? It seems PE funds are
both keen and wary of India. They are keen because of India's growth story, and
they are wary because it is difficult for them to operate in India. They want
ease of entry and exit and faster court processes in case of disputes - lack of
transparency and corruption further increases their wariness.
Ritesh Vohra, MD of Real Estate - Saffron Asset Advisors, feels that debt and
equity will always have a role to play in Indian real estate. He adds that while
equity is required for land purchase, debt would be required for financing
construction, especially in case of office or retail building, which have a
build and lease model. Ankur Gupta, of Ashiana Housing, agrees: "Both are
critical for real estate funding. Joint ventures with landowners are also part
of equity financing, which we have been doing regularly and find that the best
way to get equity financing. Debt in construction financing works to make sure
you are achieving your speed of construction." Ankur adds, "We do our funding
mostly through customer advances and internal accruals. Secondly, we look at
bank lending as they are the two cheapest form of project financing available."
Private equity funds are bullish in all metropolitan cities as well as developed
Tier II cities. The verticals for investment include retail, and specifically
affordable segments in residential projects, which spell opportunity for most of
these funds. Vohra's fund is focusing on the residential space - especially the
midmarket and affordable housing segment. In the long term, retail will also
emerge stronger and so would commercial segments.
He says that both these segments need to resolve a few issues to ensure their
long-term attractiveness - for retail it is about focusing on quality of
shopping center management and developing greater depth amongst the retailer
community. For commercial, it is largely about managing the present oversupply
situation in many micromarkets and gradually moving away from the over
dependence on IT. Industrial space and warehousing are some of the other
There are many PE funds, which have taken a long-term view on India and which
remain committed to investing here. Equally, there are some daunted by the
unstructured nature of the markets. Bank lending is a very important source of
funding which has emerged and is here to stay. Experts conclude that bank
lending will be an important source of funding for developers.
In theory, the funding of construction using advance money from buyers is
"fading out" owing to "competition and financial sophistication" and "foreign
investors are queuing up to bring in equity into our markets" Experts feel that
almost all sectors in India witness high leveraging. Real estate is no exception
Courtesy ET Realty dtd.14-05-2010
|Office to Home, Realty Touches Sky in Mumbai, Bangalore
|Suburban office bldg sells for Rs 407 crore
Mumbai: In what is touted as the largest commercial
transaction of 2010 in Mumbai suburbs, a brand new office building at Kalina has
been sold for Rs 407 crore. Market sources said the deal was signed sometime
last week. The buyer, Edelweiss Broking Ltd, is believed to have paid around Rs
20,000 per sq foot for over two lakh sq ft space in the 14-storey building,
Lotus Midtown, located outside the Bandra-Kurla Complex. The building has been
constructed by Anand Pandit of the Lotus Group. A real estate analyst said
demand for commercial properties was once again picking up. However, he said it
is mainly coming from Indian companies rather than multinationals as was the
case earlier. Last February, a four-storey commercial building at Worli was sold
for Rs 640 crore, one of the costliest of its kind in the country. The Wadia
Group sold its property to Axis Bank, which is planning to shift its
headquarters to the building. The building, Wadia Tower A, located on Bombay
Dyeing Mill compound on Pandurang Budhakar Road, has a saleable area of over 4
lakh square feet. It worked out to Rs 16,000 per sq. foot.
Mallya’s luxury flats to be priced at Rs 20 Cr
It’s official now. Liquor and aviation baron Vijay
Mallya is uncorking a Rs 1,500 crore-luxury residential play in the heart of
Bangalore on Vittal Mallya Road, along with Prestige Estates. This could well be
the most expensive residential project to be sold in Bangalore’s real estate
history, as the asking rate per sq ft is pegged at a whopping Rs 33,000. Mallya
plans to develop 75 apartments over 5- lakh sq. ft. Mallya is razing down his
ancestral home spread across approximately 4 acres of land and is situated
adjacent to the UB City to construct a 31 storey high -rise super luxury
residential building likely ot be called ‘Residences at UB City’. TOI though has
learnt that the project would have 75 super luxury apartments of 6,000 sq ft to
7,000 sq ft in size sporting price tags anywhere between Rs 15 crore and Rs 20
crore apiece. What is now known is that as part of the project, Mallya is
building a 70,000 sq ft to 80,000 sq ft penthouse for himself, which will be the
only home in Bangalore to have a bird’s eye view of Cubbon Park, MG Road,
Vidhana Soudha, and the entire central business of the city. Also, at 31 storeys
high, it could well be the only house in Bangalore that can boast of reaching to
the stars. Once upon a time, the land, on which UB City and Mallya’s house are
situated, comprised a brewery, belonging to the UB Group. TOI was the first to
break the story on July 11, 2008.
| HOUSING BONANZA - Can't afford a house in Delhi?
RelaxRoy Choudhury, chairman-cum-managing director, NBCC Ltd.
While draw of lots for the first phase, where 1,100 flats were up for grabs, was held in March, the lottery for the second phase for remaining 6,900 flats would be held later this year.
The Khekra township is com- ing up on 100 acres.
This would be the PSU's sec- ond housing project in the National Capital Region.
“The shortage of housing in urban areas was the reason we ventured into the sector. Our objective is to fill the huge demand-supply gap in the hous- ing sector by providing afford- able housing,“ said Choudhury.
Last year, NBCC had launched two housing schemes -- in the mid and low end cat- egory -- in Gurgaon, Haryana and Loni, Uttar Pradesh.
In Gurgaon, NBCC is coming up with 4,000 flats for employ- ees of central government and public sector units. The flats are priced between Rs 22 and Rs 45 lakh.
Similarly, in Loni 2,000 flats are being developed in the mid segment category. Fifty per cent of the flats will be reserved for government employees while the remaining 50 per cent will be open to the general public.
These flats are priced between Rs 7 and Rs 15 lakh.
NBCC launched its first hous- ing scheme in Delhi last year where 2,500 flats, priced betw- een Rs 25 lakh and Rs 60 lakh, are coming up near the Ghitorni metro station on Mehrauli Gurgaon road. The flats will be ready by 2012.
Courtesy:- Hindustan Times dt:- 14-April-2010
|HIGH RISE Property prices show double-digit jump in Jan-March
|Chinese property prices rose at the fastest pace in near- ly five years in March, accord- ing to official data released on Wednesday. This is likely to add to concerns of a bubble devel- oping in the real estate market.
Prices in major cities rose 11.7 per cent year-on-year in March, the National Bureau of Statistics said on its website, marking the biggest year-on-year rise for a single month since the survey was widened to 70 cities in July 2005.
That topped the 10.7 per cent increase in residential and com- mercial property prices record- ed in February and the 9.5 per cent jump in January.
Policymakers have pledged to step up efforts to rein in run- away prices amid growing com- plaints that apartment prices are out of reach for many people.
But homebuyers and prop- erty developers were not get- ting the message and more dras- tic measures like interest rate hikes were needed to calm mar- ket activity, said Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong. “Today's data affirms anec- dotal reports that activity and sentiment remains robust,“ said Jackson.
“To convince homebuyers that it is fully committed to curb- ing overheating and reducing bubble risks, Beijing will need to use all of its policy tools, and that most obviously includes higher interest rates.“
Analysts have forecast an interest rate hike as early as this month after massive bank lend- ing in 2009 triggered fears that the cash flood has fed a spend- ing spree by property specula- tors.
Prices of new homes rose by 15.9 per cent year-on-year in March, the statistics bureau said. Haikou, a city on the trop- ical southern island of Hainan, recorded the biggest price jump, up 64.8 per cent from a year ago.
Sanya, another city on Hainan, saw prices soar 57.5 per cent year-on-year.
Property sales in the first three months of the year surged 57.7 per cent to 797.7 billion yuan from the same period last year, it said.
Investment in real estate development rose 35.1 per cent to 659.4 billion yuan over that period.
Courtesy:- Hindustan Times dt:- 14-April-2010
|IFRS to impact real estate companies revenue accounts
|All real estate companies on NSE’s, BSE’s Sensex 30 will have to report financial returns according to the stringent revenue recognition norms laid down by the proposed International Financial Reporting Standard(IFRS).
In India, Developers are recognizing their revenue on agreement for sale of a flat is signed. They do this process at the time of construction. Starting or upto 20% but under the IFRS, only when an apartment in constructed and ownership rights are transferred.
According to Mr. Amarjeet Chopra President the Institute of Chartered Accountant of India (ICAI) is in no mood to exempt any sector from adopting these standards. If real estate sector have any objection, let him talk about it.
According to Mr. Santosh Rungta, President of the Confederation of Real Estate Developer of India (CREDAI) will study the all impact of IFRS on realty sector and is also planning to take up the matter with government .
In 1st Phase, the IFRS rules will impact companies with Net worth of over Rs 1000 crore or have issued Foreign Currency Convertible Bonds(FCCBI) or Global Depository Receipts(GDRs) over 100 countries now accepted IFRS norms.
|Select a home of your choice at Property Expo
|On Saturday and Sunday, you can choose real estate property of your choice at one of the biggest real estate expo, 'Property 2010' organized
|Property 2010, being organized on April 10 and 11 will be an exhibition of one of the most diverse residential and commercial properties in Noida, Greater Noida, Indirapuram, Ghaziabad, Gurgaon, Faridabad and other parts of the National Capital Region. The expo will also have finance companies, which will not only enable visitors to select a property but also to avail funds to buy them at the most competitive rates.
Such expos have been found very useful for end users as they make available all the possible choices at one place. Developers exhibit their products with the help of models, which enable end users to know the product better and help them in taking right the decision.
As a number of developers will be available under one roof, you can compare the residential units then and there and take a decision. Not only this, it will also help you bargain hard with the developers to arrive at a most competitive price.
Times Group has been organizing such expos to help end users find suitable houses. Now, as the market has revived, a number of developers have floated a large number of projects in various segments. The large number of choice in the market often confuse buyers and they are left running around from one developer to another to find the best accommodation for themselves.
While such expos will help end users in comparing the large number of alternatives then and there, it will also provide a good opportunity to investors to not only understand the new trend in the market but also to make a decision to buy the right kind of property.
While Supertech Limited has taken Title Sponsorship, Amrapali and Sumangalam are the associate sponsors. Other participants are Gaursons Builders, Today Homes, Paras Group, Aditya Group and Saamag Construction. Besides them, leading property consultants like S&A Finman, Prithvee Propmart, Better Option Propmart and Krishna Infratech, among others, will be presenting a lot of other options from other developers to the visitors.
CEO of Supertech Eco Village, Mohit Arora said the 150-acre eco-village project in Greater Noida sector I (Noida Extension) will provide an affordable housing option to end users in the truest sense. The project has been well received by end users in the market. Gaursons will also showcase a number of projects including the one in the Noida extension. Saamag construction will exhibit their NH-24 Cresent ParC project.
Courtesy:- Times Property dt:- 10-April-2010
|Munirka Enclave resident Jai Kumar, a retired Air Force officer who now runs his own business, talks to Ritu Ghai about the joys of living in the heart of south Delhi
|Tt was in 1978 that I saw a IDDA advertisement in a newspaper. It was the first Self Financing Scheme (SFS) from the Delhi Development Authority (DDA) inviting mid- dle-class families to buy a flat in South Delhi by making the payment in instalments.
My wife, three daughters and I were living in a rented floor in Uday Park at that time. I didn't want to let go of an opportunity to buy my own place in South Delhi and immediately went to the Vikas Sadan DDA office. I bought the brochure that cost about Rs 5,000. It contained the terms and conditions and the eligibility criteria. I was to fill up a form and give three locations as preferences. Allotment of the flats was to be made through a computerised draw after scruti- nising the applications that ful- filled the eligibility criteria, and other terms and conditions. It was a very transparent system that aimed to solve the housing needs of many families. In fact, Munirka Enclave was our third choice after Hauz Khas and Sarita Vihar.
Moving in Arranging funds was the next step towards making the dream home a reality. The house was priced at Rs 1.38 lakh and we had the option of paying the money in instal- ments, after making an initial payment of Rs 20,000. I decid- ed to pay the entire amount in the first instalment after tak- ing a 20-year loan from HDFC.
Thus, I was able to procure this three-bedroom ground floor flat in Munirka Enclave after submitting the necessary affidavits, down payment, forms, photographs attested by a gazetted officer/first class magistrate and completing other formalities.
The possession was given to us with the basic framework, doors, bathroom fittings, sewage and civil work. It had a small front lawn and a back- yard. Initially, we made no structural changes because funds were limited at that time.
We got some woodwork done and installed grill doors. The flat was, however, well laid out and comfortable.
The colony has 204 flats and water has never been a prob- lem. Being a small colony, it has been easy to get familiar with the people around us. With parks and ample parking space, Munirka Enclave has been a welcome change for us. I have recently also joined a DDA scheme in which the leasehold on my property will be convert- ed to freehold by paying Rs 25,000. A freehold flat can be sold or transferred without a clearance from the DDA.
Adjusting to the times Munirka Enclave has its own association that takes care of maintenance and security. The time for opening and closing the gates is fixed, and visitors are required to enter their details in a register kept at the gate. The colony does have the usual problems. People are unwilling to raise the monthly maintenance subscription in line with rising prices. This has not only affected the quality of maintenance but also created a rift between residents.
I have seen the happiest and saddest moments of my life in this house. My three daughters got married here and the house is also witness my five grand- sons and grand-daughter growing up. The saddest moment came when I lost my wife. However, the good moments have helped me recover from this loss and nowadays I stay here with my second daughter Deepika, her husband Vinod, their daughter Shonan and son Siddhant, who is a very talented, young polo player. My eldest daughter is in the US while the younger one lives in Noida.
Developing hub Munirka Enclave is a nice place to live in. It's close to Vasant Kunj and various south Delhi markets and malls. Over the years, the Nelson Mandela Marg has become very busy and the Priya cinema complex nearby is one of the most hap- pening spots for the urban elite and youngsters.
Munirka Enclave's close proximity to the IGI airport makes it convenient for makes it convenient for my son-in-law who flies frequently for business.
The house has been recently renovated with complete change of win- dows, flooring, tiles and woodwork. As the family grows, needs change and the recent renovation reflects this. I love spend- ing time playing golf, reading and spending time with the family in the common lobby. I am happy to have my flat here.
Courtesy:- HT Estate dt:- 10-April-2010
|Jaypee Greens is launching the Kingswood Oriental, which has taken cues for design elements from the oriental architecture and landscapes, says
|Krishna Kumar Mangalam
| Jaypee Greens Noida is launching a new product at Jaypee Greens Wish Town, Noida — Kingswood Oriental. The Kingswood Oriental community comprises premium individual residences, adjacent to an 18-hole Graham Cooke golf course, with an expansive and breathtaking view of golf greens on one side and a chip & putt golf course on the other.
There are 160 units, in two sizes, with a built-up area of approximately 3,700 sq ft and 4,600 sq ft. “We will be offering different layout designs to the customers,” says Manu Goswamy, head of business development and strategy at Jaypee Greens. The price of these exclusive homes starts from Rs 3 crore at a basic selling price of Rs 8,100 sq ft — each villa will have three floors.
Kingswood Oriental is aimed at a niche market — the discerning clientele will be offered a very exclusive community of luxury homes where the design elements have taken cues from oriental architecture and landscaping, apart from of course providing them with the finest in luxury fittings and fixtures. The community will have some special features, as it has been billed as “one of its kinds in the country”, and to give it a premium look and feel the following features are proposed for the community as a whole, and for individual villas.
Community special features Kingswood Oriental will be a separate community within Wish Town and access to this will be restricted only to the buyers and their guests Multicoloured Orientalstyle wall paintings in common areas like social clubs, etc Zen Gardens and Bonsai draped landscaping to go with the theme Beautiful waterbodies as landscaping element Adjacent to the 18-hole golf course Oriental street lighting and street furniture Pebble walkways in parks lined with flora from the Far East Golf carts for local transportation within the community
Home features Use of wood and bamboo in the design to go with an oriental feel Private lily ponds in each home Provision for elevators in each home Jacuzzi in the master bathroom Miniature gazebos in the back garden of the house Terrace garden with barbeque Top-of-the-line security system featuring videophones and burglar sensors Oriental clubhouse Exclusively designed clubhouse which has been designed using cues from the Southeast Asian architecture, will be of approximately 60,000 sq ft of built up area Wellness zone with state-of-the-art gymnasium and fitness centre; yoga, aerobics areas Multi-cuisine restaurant Exclusive members lounge area Party halls & gardens Range of sports facilities Tennis courts Squash Swimming pool Pool/snooker Library Goswamy says, “The Kingswood Oriental residences will be a perfect harmony of luxury lifestyle with a touch of oriental architecture, combined with the latest technology for leisurely life. We have added 17,000 customers in the last two years alone in the NCR. The customers for individual houses in the higher and premium segment look for uniqueness and demand exclusivity and this project will fill this gap in Delhi NCR.” Wish Town, the largest township in Noida, is spread over 1,162 acres. It is a gated resid e n t i a l community with dedicated s p a c e s catering to all comforts in urban living and the developer says it offers the finest choices for the new home buyers in the NCR. Just off the Noida-Greater Noida Expressway, it is on a 30-minute drive from Connaught Place, and 15 minutes from Ashram chowk. Jaypee Greens Noida bills itself as “Golf-centric real estate development” — there are two golf courses in Wish Town. Some of the features of Wish Town, an integrated township, where Kingswood Oriental is coming up: 9-hole and 18-hole golf course designed by Graham Cooke Acres of landscaped greens and Zentheme gardens 450-bed Jaypee Super Specialty Medical and Research Centre, equipped with the latest medical equipment and healthcare services
Boomerang (A club which is expected to be one the finest clubs in the country)
Some of the advantages of Wish Town are its location — it is close to the Noida-Greater Noida expressway. Also, it is just 10 minutes drive from Ashram Chowk and it is slated to have Metro connectivity in the near future.
The Jaypee Group is a well-diversified infrastructural and industrial conglomerate in India with engineering and construction, cement, private hydropower, hospitality, real estate development, expressways and highways among its portfolio. The group is synonymous with premium lifestyle developments through exclusive golf-centric real estate, and in the words of Goswamy, “Our focus is not just on the house you buy, but also the environment you live in.”
Jaypee Greens in Greater Noida bagged the “Best Golf Development-India” from CNBC Asia Pacific Property Awards in 2008.
Courtesy:- Times Property dt:- 10-April-2010
|Those looking for good buys in the NCR can check out unsold stock in projects that are complete or nearing completion, says Syed Amir Ali Hashmi
|The summers are here and the search for homes has become doubly difficult as one has to not only face the scorching sun, but also take the heat of rising real estate prices. But wait, that's not all. If you are on the lookout for a new apartment that's ready for possession, then get ready with a bigger stash of cash, for that's certainly not going to be cheap.
Area in focus This week we look at Ghaziabad, one of Delhi NCR's hot draws, offering affordable apartments to the middle-class buyer who also doesn't find the commute to the city centre that tough to handle. Now the question is, where should one look (for a home) in Ghaziabad?
You are here Kaushambi, Vasundhra, Raj Nagar Extension, Vaishali, Crossings Republik have projects which have been launched and sold some years back and are almost ready for possession. A num- ber of buyers today are interested in the flats that have not been sold in these projects. “We have complet- ed first phase of River Heights in Raj Nagar Extension and possession has started. The prices at Raj Nagar are still low unlike other places. For people, who think their pocket permits, should look for homes in ready-to-move-in projects, as they will not have to wait long for delivery and will also avoid paying rent and home loan EMI simultane- ously,“ says Manu Garg, MD, Landcraft developers. (See box for list of projects) The cost?
“It's obvious the costs (since project launch) of these flats have gone up by 40-50 per cent. Some flats in our proj- ect Gulmohar Greens, Mohan Nagar, are empty but the prices now are around Rs 2,720 per sq ft as against the launch price of Rs 1,900 per sq ft two-three years ago,“ says Sunil Jindal, CEO, SVP Group.
A lot of people want affordability to be factored in when it comes to ready proj- ects, but that, say builders, could be asking for too much. “It is not possible for people looking for houses in these projects to get low- price deals.
“When a project gets com- pleted it comes up with appreciated price and this appreciation depends on many factors apart from just location,“ says Dujendar Bhardwaj, JMD Group and company, realty agents.
As most of these homes are in completed projects, these are in areas where infrastructure, etc, has come up. “Location is the most important factor in the real estate scenario and prices are directly proportional to it. If you have decided to invest in such a project, then scout around for a good loca- tion where other facilities are also functional. If a per- son is buying a ready home from a developer directly, then the prices might be a little higher than the market rates. This is more so because in such cases the payment to the developer will have to be done in white,“ says Pradeep Mishra, real estate analyst. Why do flats remain unsold?
Experts say that many real estate developers hold back their inventory and sell it later at a higher price. When they breakeven after the launch of a project and think they can complete the proj- ect with the money collected, they hold back the inventory.
So 60-70 per cent of the proj- ect is sold off and the rest held back.
Of course cases vary from developer to developer. “In our case, at SG Impressions in Vasundhara, we did not get the permissions for a duplex apartment at the time of launch. So we could not sell it at that time. Hence, these apartments remained empty.“Not getting the requi- site permission also means the stock remains unsold.
Apartments getting clear- ance much after the launch of a project are often put up on sale, much later after pos- session of other flats have been handed over. This might happen due to various reasons such as increase/ purchase of floor area ratio (FAR),“ says Gaurav Gupta, director, SG Estates.
Is it a good buy?
“Yes, it's a good buy for peo- ple who want ready facilities like shopping complexes, other facilities such as hospi- tals and schools nearby, good infrastructure and good accessibility. It is good for people who want to move in immediately. However, peo- ple who buy for investment won't get good returns. Such buys won't also suit people for whom budget is of utmost priority,“
Courtesy:- HT Estate dt:- 10-April-2010
|A Weekly Real Estate Reports of Mumbai, Bangalore and Kolkata
A premium residential apartment located in Central Mumbai was purchased in a primary sale at a total cost of Rs 14,00,00,000. The 4-bedroom unit is spread across an area of approximately 4,000 sq ft and commanded an average capital value of Rs 35,000 per sq ft, which is at par with the range of Rs 34,000-55,000 per sq ft prevalent in the location. The apartment comes with four dedicated car parking lots. The apartment is situated on a higher floor at a residential project located in Mahalaxmi. The project boasts of numerous value-added amenities like club house, landscaped garden and walkways, barbeque location and an amphitheatre, in addition to three swimming pools for the residents. Central Mumbai has been witnessing many premium developments as residential demand in the location from end-users as well as investors is high. The location is situated at a comfortable distance from major business districts of Nariman Point and Bandra-Kurla Complex, while Central Mumbai itself is developing into an office location. It has remained steady in terms of capital values for high-end property and is expected to remain stable in short to medium term.
A high-end residential apartment admeasuring 2,500 sq ft was sold for a total value of Rs 1,50,00,000 in a premium residential complex located near Hebbal Lake. The 3-bedroom apartment fetched approximately Rs 6,000 per sq ft which is in line with the values prevalent (Rs 6000-13,000 per sq ft) in the location. This apartment, which is part of a premium residential development, offers to its customers a wide variety of services, including club house and sports facilities such as squash, badminton and a swimming pool. Hebbal is one of Bangalore’s rapidly expanding residential markets. While the area is situated in the North, the location enjoys connectivity through the ORR and other arterial roads into the city and to the major commercial and retail destinations across the city. The residential market had registered a considerable correction in its capital values of approximately 32% in 2009. However, it has seen some appreciation in the past quarter and is expected to remain steady in the short-tomedium term.
An apartment, located on EM Bypass and admeasuring 2,393 sq ft was sold at a total cost of Rs 1,04,98,460 (Rs 4,220 per sq ft). This is one of the city’s upcoming residential locations with many mid- and high-end residential units, which have been witnessing some active end-user demand, post the recent economic slowdown. The location enjoys proximity to the established CBD and SCBD and to the new IT hubs of Salt Lake and New Town Rajarhat, thus making it an ideal location for residential development. After having experienced a slowdown, the location has started to see some revival and a resultant increase in capital values of approximately 8% over the previous quarter and is expected to remain stable with an upward bias in shortto-medium term.
Courtesy:- ET dt:- 09-April-2010
|Emaar bets big on a high-return India
|Co To Raise Rs 3,500 Cr, Shift Focus To Residential Units
|AN OFFICIAL of Dubaibased Emaar Properties says it will continue to focus on India as it offers the best investment opportunities across the 16 countries in which the real estate developer is present.
“Given the robust domestic market and high economic growth rate, India will continue to give superior returns compared to other countries in the developing and developed nations, including the US and the UK,” the official Mohammad Alabbar, chairman of Dubai-based real estate firm Emaar Properties, told ET.
Its Indian arm, known as Emaar-MGF plans to raise Rs 3,500 crore from the Indian capital market by way of a public issue. The company has received permission from the market regulator, Securities and Exchange Board of India (Sebi). The company has invested $4 billion abroad, of which $1 billion is in Indian joint venture, which is with Delhibased MGF Group.
Mr Alabbar is here to evaluate the timing of the proposed IPO. “We have got Sebi’s approval and plan to launch the issue in an appropriate time,” he said. The company had made an attempt to enter the capital market in February 2008, but the issue had to be aborted in the wake of a market crash.
On the impact of the financial crisis, which engulfed the Emirate in late 2009, Mr Alabbar said as demand for real estate had already dropped sharply following the crash of 2008, it hasn’t had much of impact. “It did result in a jolt as lenders hardened interest rates by about 1-1.5%, which has started softening now,” he said.
Part of the proceeds from the proposed issue will be used to repay debt and facilitate other expansion plans, Sharvan Gupta, managing director of Emaar–MGF, said. The company currently has debt of Rs 5,000 crore, of which it plans to pay Rs 2,500 crore this year.
Emaar-MGF, which is primarily known for its commercial projects, is looking to shift its focus on residential units this year.
“Demand in the real estate sector in India has picked up and property developers will be able to attract buyers if they keep the price of residential units at a moderate level,” Mr Gupta said.
Emaar-MGF currently has 30 million sq ft land under construction and plans to add another 15 million sq ft in the next one year. The firm plans to deliver at least 8 million sq feet by this year. Housing prices are still lower than the booming period of 2007, Mr Alabbar said.
Courtesy:- ET dt:- 09-April-2010
|Emaar MGM may launch IPO in next 90 days
|NEW DELHI: Realty player Emaar MGF on Thursday said it may hit the capital market within the next 90 days to raise about Rs 3,500 crore through an initial public offer (IPO), its second such attempt after it was forced to withdraw by poor market response in 2008. “Within the next 90 days we may launch the IPO but it will depend on how the market is,” Emaar MGF vice-chairman and MD Shravan Gupta told reporters. The company had in 2008 planned to launch its maiden public offer to raise Rs 7,000 crore, but had to withdraw due to poor market response. With the stock market again on the upswing in the recent past and even touching the 18,000 mark this week, the company is looking to take the opportunity.
Courtesy:- ET dt:- 09-April-2010
|Small is the new big for investors
|Suddenly there is no stopping luxury brands, hotels, retail formats from entering Tier 2 and Tier 3 cities in what may be bigger and better avatars than even in the metros
If you thought 'mall' is Greek and Latin to someone in smaller cities and towns you surely need a reality check. Smaller city folk are not being treated to some lowbrow 'country cousin' version of your metro malls - instead, they are witnessing much better and bigger developments. Businessmen have smelt the appetite of locals and are crowding into Tier 2 and Tier 3 cities to encash upon the first mover advantage and grab vast plots at reasonable rates (as against the metros, which suffer from both paucity of land and high real estate costs).
The head of operations of a big retail chain shares his perspective saying that smaller cities is the way to go for big brands now. Citing an instance, the industry insider says that when Globus had opened its store at a place like Varanasi, no one was sure what would happen, but today, the store has outperformed its Mumbai counterpart. Even the Crossword store in Visakhapatnam and other small cities in south India are doing great - so much so that a second outlet has been opened there.
Retailers, realtors, hoteliers are now seen heading to smaller cities which conventionally were not on the organized business's radar. Take a look at the 6 lakh sq ft Alpha One mall at Amritsar and anyone would agree that it has a good mix of international, national and regional brands available anywhere.
Even luxury hotels have zeroed in on Tier 3 cities. Just imagine, one of the most sought after spas in the country, Ananda, chose Amritsar to open its only branch at a 5-star luxury hotel, Ista, which is owned and managed by hospitality chain IHHR. According to Ashwin Handa, general manager of Ista, "Ista is Amritsar's only 5-star luxury hotel and we decided on Amritsar as the city has a huge tourist influx and offers great potential."
The same logic holds true for mall developers and according to Pickles Sodhi of Alpha G Corp, "Punjabis like to shop and they like to spend money and enjoy a good life. My investment in Amritsar was more of a gut instinct based on the facts, of course, that Amritsar is a huge religious draw - there is enormous tourist influx and many NRIs frequent this religious destination. The paucity of a decent mall spelt opportunity. Next, we plan to target Chandigarh, Jalandhar and Ludhiana. And after that we are readying a 7 lakh sq ft mall at Ahmedabad." He adds that they have tried to retain the local flavour by introducing Amritsari bazaar, which will retail Amritsari crafts, phulkari, etc, and encourage shopping of local goods in sanitized environment.
Fun Cinemas' Atul Goel feels that small cities are hugely receptive to new ideas. Fun Cinemas already has multiplexes at Chandigarh, Lucknow, Ahmedabad and Coimbatore. "We are entering Amritsar with a multiplex which will have the first gold class in Punjab. Priced within Rs 500 per cover, this 35-seater will provide endless cold drinks and popcorn to patrons." Goel adds that they are trying to tap the aspirational living value of people and showing them a taste of good life, "once they taste it and learn to enjoy it, they will ask for more and this way they will grow with us".
North India's first hypermarket Hypercity Retail (India) Ltd has opened in Amritsar in Alpha One mall. B S Nagesh, vice-chairman, explains: "In this vast floorplate of 1.4 lakh sq ft, a shopper gets everything from the freshest malta to jeans worth Rs 199 to LCD TVs. Besides, there is a feature called Daily diamonds, which is meant for today's women who can pick up their favourite piece of jewellery at price points of Rs 2,000 to Rs 10,000, while shopping for daily groceries. We are here to create lasting value and we are giving ourselves three years to break even."
But when retail strikes smaller towns do they replicate their city formats or customize to the local tastes? Govind Shrikhande, CEO of Shoppers' Stop says that the stores have similar merchandise albeit with some changes. "We are stocking pagdi (turbans) and jutti (shoes), as these are important part of the basket of a shopper in Punjab. Besides, our thrust will be on stocking more casuals than formal wear since Amritsar is not home to many corporates yet, unlike Delhi or Mumbai. Also, we would include brighter shades and focus more of traditional wear."
However, what does not keep pace with these striking private developments is the poor public infrastructure. There is glaring contrast between public utilities and private developments and this is evident as soon as you step out of Alpha One mall and are greeted with poor infrastructure. Says S K Sayal, director & CEO of Alpha G: Corp: "While making this mall we were faced with infrastructural bottlenecks like lack of electrification, storm water drainage system, sewerage system - there is no master plan for these cities. But the authorities are slowly but surely realizing that infrastructure has to be built and we would say that one thing is leading to another. Things are certainly improving."
• Smelling the appetite of locals, developers have turned their focus to the Tier II and III cities, and are going all out to set up businesses there
• Leave alone big brands, luxury hotels and multiplexes too have realised the need and importance to show their presence in the Tier II and III cities and tap the aspirational living value of people living in the small towns
Courtesy:- ET Realty dt:- 09-April-2010
|GEARING UP FOR THE GAMES - Commonwealth village apartments ready, developer starts handing them to DDA
|The Commonwealth Games Village luxury apartments are ready and Emaar MGF, the developer, has begun handing them over to DDA.
The residential project on the banks of river Yamuna will house athletes and officials for the Games that will be held from October 3 to 14, 2010.
“We have begun the process of handing over the apartments to DDA,“ said Shravan Gupta, executive vice-chairman and managing director Emaar MGF.
The project, with 1,168 apart- ments, was to be built on a pub- lic-private-partnership model between DDA and Emaar MGF which won the right to develop the 118-acre residential project in competitive bidding from DDA at Rs 321 crore against a reserve price of Rs 300 crore.
As per the arrangement, DDA got ownership over onethird of the apartments over and above the Rs 321 crore from the developer. Emaar MGF was to retain ownership of the rem- aining 790 apartments which it expected to sell in the open mar- ket and raise money.
However, last year's financial crisis and realty slump meant the company couldn't find buy- ers and raise money. It asked DDA for a bail out which it got--DDA purchased another 333 apartments for Rs 770 crore.
“Market conditions are improving. There has been a robust demand for quality res- idential projects,“ said Gupta.
He claimed the company has managed to sell a major portion of these apartments.
After the games are over the developer would refurbish the apartments and physically hand over the apartments to end- users by early next year.
Courtesy:- HT dt:- 09-April-2010
|Property rates to remain stable
|If you are planning to buy a house this year, take all the time you need.
A Crisil research report on residential property prices of India's 10 biggest cities says prices will remain more or less stable with a moderate dip in prices in Mumbai and a marginal (2 per cent) rise in the National Capital Region (NCR) in 2010.
According to the report, the average capital appreciation in the 10 cities is expected to be 2-3 per cent. Bangalore and Chennai are expected to see the highest rises of 7.3 per cent and 5 per cent respectively. On the other hand, Ahmedabad and Mumbai will see a correction in prices by 1.8 per cent and 0.4 per cent respectively.
Interestingly, Mumbai witnessed the maximum rise in prices by 11 per cent between March and November last year, the report said. While Central Mumbai witnessed a price rise of 21 per cent, the central suburb saw 15 per cent hike.
“Mumbai has already witnessed a steep recovery in prices after the correction in 2008 and the demand has slowed down since December 2009,“ said Sudhir Nair, head, Crisil Research.
Developers, however, disagree. “We have not seen any drop in demand and I believe demand for residential real estate will go up by 30 per cent this year,“ Niranjan Hiranandani, vice chairman & MD, Hiranandani Construction said.
“Mumbai is so starved of volume that unless land supply increases, prices cannot drop,“ Dharmesh Jain, CMD, Nirmal Lifestyle, said. “Considering the rate of inflation, we expect that prices in Mumbai to go up by 5-12 per cent in 2010, depend- ing on the location and quality of constriction of building.“
The expected price rise in Bangalore and Chennai is on account of recovery of the IT sector. “The confidence is back now in the (IT) sector leading to a demand in those areas,“ said Nair.
Courtesy:- HT dt:- 09-April-2010
|Unitech forms panel to push demerger
|UNITECH has formed a panel of five board members to push the demerger of its non-core businesses into a separate entity as the country’s second-largest real estate developer looks to focus on its mainstay, realty.
The company plans to hive off its investments in telecom, hotel and special economic zones into a new offshoot, said a senior executive, requesting anonymity. Unitech owns a 33% stake in Uninor, a telecom joint venture with Norway’s firm Telenor.
All Unitech shareholders will get proportionate shares in the new entity after listing, he said, adding that the restructuring will help unlock value for them.
Unitech shares closed marginally higher at Rs 76.55 on the BSE on Tuesday. At this price, the company’s market capitalisation is a little more than Rs 18,000 crore.
Consultants Ernst & Young and SR Batliboi & Co as well as legal firm Amarchand & Mangaldas will advise the panel about the restructuring.
Courtesy:-ET dt:- 07-April-2010
|Unitech appoints E&Y for demerger plan
|Realty major Unitech said on Tuesday it had appointed Ernst &Young (E&Y) and two other advisors for exploring opportunities for potential restructuring of its business, to unlock value for shareholders. The company’s board of directors has constituted a restructuring committee for evaluating opportunities for “potential merger of subsidiaries, demerger and other forms of restructuring, or acquisition, or spin-off with the ultimate object of enhancing and unlocking shareholders’ value”
Courtesy:-BS dt:- 07-April-2010
|Mumbai realty developers offer to build 500,000 affordable houses
|BS REPORTER Mumbai, 6 April
|Real estate developers in Mumbai propose to join hands to construct 500,000 affordable houses for middle and lower income groups in partnership with the Maharashtra government in the next five years in the fast-growing Mumbai Metropolitan Region (MMR). The MMR region comprises Mumbai and the adjoining cities and towns such as Thane, Dombivli, Kalyan, Vasai, Virar, Mira Road and Nalasopara.
The project, as proposed, entails an investment of over Rs 15,000 crore. Houses of 160 sq ft to 600 sq ft are proposed to be created. The floor space index proposed (the ration of total built-up area allowed on the given land area) is three. The project would be implemented under the aegis of the Maharashtra Chamber of Housing Industry (MCHI).
The idea is also to take inputs from the ongoing schemes of rental housing implemented by the state-run Mumbai Metropolitan Region Development Authority, public-private partnership carried out by Maharashtra Housing & Area Development Authority and the slum rehabilitation scheme. MCHI President Pravin Doshi said details of the financial requirement of the project was being worked out.
“Residential housing can be made affordable by release of land by the government, increase of FSI, reduced taxes, single window clearance on plans and availability of micro finance.
Through this partnership, our endeavour is to arrive at some substantial solutions to cater to the ever growing need of demand for homes,” Doshi said.
However, Doshi was unable to explain what MCHI meant by affordable housing. He said it would depend on location. He repeatedly said MCHI and its members had no hidden agenda: they would not seek any extra favours from the state government for the construction of 5,00,000 affordable houses.
According to the information available with MCHI, Mumbai alone has an immediate demand of 1.4 million homes, of which 80 per cent comes from the Rs 3-5 lakh income group. There is also an unmet demand for basic affordable housing in Mumbai and the metropolitan region.
MCHI office-bearer Dharmesh Jain said the proposed mass housing project would help increase volume and stabilise the realty market. “Ultimately this will lead to mass consumption,” he noted.
The project entails an investment of over Rs 15,000 crore
Courtesy:-BS dt:- 07-April-2010
|Land value may be kept out of tax net
|Proposed Service Tax On Under-Construction Homes May Exclude Circle Rate Of Land
|THE FINANCE ministry may exclude land value from the ambit of a new tax on under-construction houses, potentially taking the sting out of the proposed levy after it ran into a storm of protests from the real estate sector and exposed fissures within the government.
The 2010-11 budget has proposed a 10% service tax on 33% of the total cost of under-construction houses, which could increase the price tag of such properties by 3.3%. The new tax will come into effect once the budget is approved by Parliament.
But protests from a real estate sector worried that the tax could harm its nascent recovery and a demand by the urban development ministry to review it has forced the ministry to consider a retreat and look at ways to ease the burden on potential homebuyers.
Finance ministry officials said they were examining ways to separate land costs from the overall cost equation and take it out of the purview of the proposed tax. “We are looking at the issue to see how this can be done,” an official told ET.
Any change will make the new service tax more acceptable to all stakeholders and also introduce greater transparency in the pricing of homes by providing a break-up of cost. Its impact could be especially felt in major cities where land costs account for a bulk of the cost of under-construction properties.
“The proposed reduction will bring in a huge relief to both consumers and realty companies,” said an executive with Delhi-based real estate developer Ansal API.
The change could take much of the sting away from the proposed tax, especially since 67% of the property cost is not covered by it because it is considered as the cost of material used in construction.
Excluding land costs, the effective rate of service tax will fall to 1.75%, added Pradeep Jain, chairman of Parsvnath Developers.
Experts say the ministry could use circle rates or floor prices for areas set by states for computing land costs. But stripping out the land costs could prove complicated even when floor prices are available because ascribing land value to a flat in an apartment complex may be difficult.
“Practices are not consistent in the whole of country so it will have to be seen how a mechanism can be worked out,” said Rajeev Dimri, leader of indirect tax practice at BMR Advisors & Co.
The precedent of excluding land value from tax already exists in some form. State governments, for instance, do not include the value of land while imposing tax on works contracts.
Tax experts have questioned the legality of the proposed service tax, arguing that land is a state subject. “Whether the centre can tax land or property is a challenge. Imposition of service tax on commercial renting has already been challenged and the appeal lies before the Supreme Court,” said Mr Dimri at BMR Advisors & Co.
The service tax proposal signals a movement towards a unified goods and services tax framework, which will allow the centre and states to tax items in their respective domains. The centre has indicated rolling out GST from next April.
Courtesy:-ET dt:- 07-April-2010
|Art in the eye of the beholder
|We collect art; we buy real estate; but is there common ground for the two to meet? On the face of it, they are not mutually exclusive, for any art needs real estate to give it context. But is their value calculated when conjoined, or separately? And how does it engage buyers investing in a residential real-estate project in Gurgaon that promises to rewrite the rules of town planning within our urban ghettos? At the centre of this premise is the promoter’s decision to engage an artist who promises to add “soul” to the project —at best, a notional quality, not something to which you can put value to. While art in the development might be easier to put a price on, for its buyers, is it too not merely notional? At the heart of this debate is the question of how to put value to art that is both part of a development project as well as bespoke, something tailored and built into a few designated villas or penthouses. It has a price point when commissioned, but does it impact resale value? Will escalations in real estate keep in mind the rise in the value of an artist’s contribution? Will there be a separate and additional value for the artworks? It appears, so far, not.
When the Glaxo building in Mumbai was sold, no one considered the value of the Krishen Khanna painting in the foyer, which was later dumped in a store by the caretaker, where it lay abandoned for years. When afire destroyed a part of Vigyan Bhawan in New Delhi, a sculpture commissioned by Amarnath Sehgal met with similar fate, and the artist had to wage a bitter battle to have it restored in the public domain. Do hotels, which often invest their properties with larger tranches of art, view it separately when selling or merging with another chain? Does it have any negotiable value given the new promoters may want to change the look — and art — they wish to showcase as part of the newer experience? Did the MF Husain ceiling at the Kanishka even enter the picture when the ITDC hotel in the capital was disinvested to become the glitzy Shangrila? (Husain had loaned these works to the hotel, and simply withdrew them when it did not exercise the option of buying them.) Have the Taj and ITC hotels undertaken any exercise to put a value to their art collections? The ambitious M3M group which has announced the Ramesh Khosla-designed, Basant Bansal-promoted 70-acre Golf Estate township with art inputs by artist Satish Gupta, raises these very issues. Satish Gupta’s work devolves around the concept of the five elements and is imbued with a deep spirituality. He has bridged the gap between painting and sculpture, textiles and landscaping in his own studio, to recreate a lifestyle that treats nature with respect.
The challenge now is to provide the same value to a large township, and to customise at least some of the properties with elements of art that will enhance the value of the homes, but also not dominate the space for buyers who may have their own ideas about the art concepts with which they wish to surround themselves.
Golf Estate will have a builtup value of Rs 15,000 per sq ft (which makes the introductory offer of Rs 6,100 a sq ft hugely attractive), but what is one to make of the value of Satish Gupta to the project’s resale value and escalation over time — and can one divorce the value of art and real estate at such point? Has India evolved sufficiently to pay a premium simply because prime property also has an artist’s name attached to it? A lot might depend on how the Bansals promote this aspect of their township. Publicising the artist’s inputs could create a value above and beyond just that of the real estate. The only parallel that comes to mind is the buildings artist Satish Gujral created in the capital between the mid-1980s and the mid-1990s — most prominently the Belgian Embassy, and the Mexx farmhouses. The architecture carried the stamp of a Gujral sculpture. Even so, it is unclear how the artist’s premium will be calculated in any secondary market sale. Clearly, the square inch value of a work of art cannot be imposed on the square foot measure of real estate, just as an artist’s escalation in price terms cannot be imposed over and above the value of the real estate.
It is this that makes Golf Estate interesting. The Montrealbased architect has promised a township that will set a benchmark for India. Will Satish Gupta set a similar point of reference on how an artist’s intervention in architecture can result in an extraordinary realisation of value?
Courtesy:-BS dt:- 07-April-2010
|Zuri Group plans Rs 700cr investment in hotels, realty
|Zuri Group Global, which is present in the high-end hotel, real estate and floricul- ture sectors, has announced plans to invest Rs 700 crore in hospitality and real estate ventures.
Zuri will invest Rs 400 crore in setting up two five star lux- ury hotels in Bangalore and Nairobi in Kenya, and Rs 300 crore in its 250-acre premium villa-cum-apartment project in Goa.
“Both the hotels would com- plete within 20 months. The new 160-room hotel at Bangalore is near the airport and it would be a mix use proj- ect on six acres,“ said Bobby Kamani, managing director, Zuri Group Global.
“We have started work on the 150-room hotel in Nairobi and we are waiting for final clear- ances for the villa project in Goa to begin work,“ he said.
The group is backed by a con- sortium of investors from the Middle East and so far has invested over Rs 900 crore in India. It has properties in India, Kenya and UK, including four hotels in India which are run under the brand name of Zuri.
Apart from organic growth, Zuri now plans to grow aggres- sively through management contracts. “Though (we are) very young, hotel owners are coming to us to run their proj- ects. Two hotels in Sikkim and Kolkata have been finalised while one in Hyderabad is at an advanced stage,“ said Kamani. “We are very keen to have a presence in Delhi and Mumbai and are looking for hotels either through management contracts or outright lease,“ he said.
Kamani said Zuri hotels, which started only last year after taking back properties from foreign hotel chains, is fast catching up among upwardly mobile corporate executives and visitors, who seek value for money luxury service.
The group, which has 250 hectares of land in Kenya pro- ducing 150 million roses a year for the export markets of UK and Dubai, is also expanding its wind energy business in India and geo-thermal energy busi- ness in Kenya.
The group employs over 2,100 people globally including 1,200 in India and wants to meet its capital investment through a mix of debt and equity.
“We see tremendous busi- ness opportunity here; that is why my cousin Abhishek and I shifted to India five years back to grow the group's business.
We have seen growth even dur- ing recession and we will invest heavily as we are impatient to grow,“ said Kamani, who was born and brought up in Kenya.
Courtesy:- HT Business dt:- 06-April-2010
|City still prefers independent houses
|Only 14.81% Of Population Lives In Flats, Big Bungalows Giving Way To Smaller Homes: Survey
|TIMES NEWS NETWORK
|New Delhi: If you think multistoreyed flats are gradually occupying the city landscape, you are wrong. Delhi is still very much the city of independent houses rather than flats — 73.60% Delhiites live in independent houses and 14.81% in flats. This was revealed by the report on the Level and Pattern of Household Consumer Expenditure in Delhi which was released by finance minister A K Walia on Monday.
However, the sprawling bungalows which were once the hallmark of the city — they still are but only in Lutyens’ Delhi — have been replaced by far smaller living spaces, with 52.84% families living in a home that measures less than 450 square feet. At least 62.05% Delhiites own the places they live in and 35.16% have hired dwelling units.
The report — which is based on the 64th round of the National Sample Survey held between July 2007 and June 2008 — predictably found that Delhiites have the highest per capita expenditure in the country. The bulk of that — 37% — is spent on food items, an oddity, considering that the city government has been in a self-congratulatory mode over the past few months about the inflation figures being the lowest in the capital among all Metros.
An interesting study was the steep rise in the monthly per capita expenditure on food from 2004 to 2008. For cereals, it has gone up from Rs 89.42 to Rs 133.78, on milk and milk products it is up from 157.19 to 212.07 and on meat, fish and eggs it is up from Rs 16.40 to Rs 30.89.
The expenditure on intoxicants, pan and tobacco were the least hit with the difference being Rs 6.78 to Rs 10.80, Rs 9.68 to Rs 9.77 and Rs 2.86 to Rs 3.10 respectively. The average monthly per capita spend on consumer goods rose only marginally in these four years from 102.37 to 103.78. The spend on footwear went down from 24.38 to 24.25. Of the average Rs 767 per capita spend on food items per month, 10% was spent on milk and milk products, 8% on cereals and pulses, 2% on edible oils, 4% on vegetables and 2% on fruits.
In absolute figures, a family — the report says the average household size in Delhi is 4.47 — in rural Delhi spends about Rs 3,308 on food items out of a total monthly spend of Rs 7,606 and in urban Delhi about Rs 3,445 out of a total of Rs 9,295.75.
Among non-food items, fuel and light incur the biggest expenditure, coming about Rs 686.32 per month, followed by education at Rs 585.35 and clothing at Rs 418.50. Conveyance is a huge drain on a family’s resources, with rural Delhi spending Rs 655.36 (8.61%) per month on it and urban Delhi Rs 763.39 (8.21%) on it.
Courtesy:- Times of India dt:- 06-April-2010
|SKY IS THE LIMIT
|Mumbai flat fetches Rs 36cr
|Nauzer K Bharucha | TNN
|Mumbai: The city once again seems to have broken a national record in property transactions, with a duplex in the prime Samudra Mahal building at Worli fetching in excess of Rs 36 crore in an auction on Monday.
Although people involved in the transaction flatly refused to comment, TOI has learnt through reliable market sources that the deal worked out to more than Rs 99,000 a sq ft. The last highest transaction recorded was at the NCPA Apartment at Nariman Point in 2007 when a flat measuring 3,475 sq ft (super built-up) was bought by a London-based NRI at a rate of Rs 97,842 a sq ft (Rs 34 crore).
The Samudra Mahal duplex is situated on the 19th and 20th floors of the 28-storey, sea-facing highrise. The high net worth individual who won the bid is the wife of a prominent banker who died sometime ago. The duplex belonged to ABN Amro bank and the deal was brokered by the London-headquartered real estate adviser, DTZ. The duplex is spread over a built-up area of 3,640 sq ft and has four bedrooms and two covered car parks. The building has a swimming pool, a children’s play area and a small football court.
One of the losing bidders said they walked out once they learnt that the bidding started at Rs 32 crore. ‘‘We had a budget of only Rs 25 crore,’’ he said. Samudra Mahal is one of the sought-after residential buildings in the city. One of the occupants of this building are the Scindias (family of the late Madhavrao Scindia).
Courtesy:- Times of India dt:- 06-April-2010
|Big but Affordable Apartments
|Developers Keep The affordability factor in mind Even as they build large-sized apartments
|Shikha Sood, a teacher in an international school, bought a two-BHK 1,250 sq ft apartment for Rs 32 lakh in the NCR in 2007 with some amenities and frills thrown in. Her colleague, after a long wait, took the plunge and bought a house during the slowdown. On offer was a 900 sq ft apartment in the same area for Rs 22 lakh. Her sister bought a 1,100 sq ft flat last week in the same area for Rs 27 lakh.
That's not all. Suman Singh, a 38-year-old engi- neer, bought a residential property -- a 1,482 sq ft, three-BHK apartment in the stilt-plus-four-storey catego- ry at Rs 1,650 per sq ft -- in new Gurgaon in September last year. His brother-in-law bought a house in December last year when phase II of the same project was launched.
On offer was a 1,516 sq ft, three-BHK unit, at a rate of Rs 1,550 per sq ft, in the stilt- plus-14-storey category.
These examples are an indication of some interesting trends currently being wit- nessed in the real estate housing market. They show that while the sizes of the boom era (2007) may be mak- ing a comeback, the differ- ence this time is that afford- ability is becoming an increasingly important con- sideration while planning apartment sizes. Making detailed plans for projects and doing market research before launching housing products are becoming the norm. Unlike last year, the attempt now is not to shrink sizes but to make them sensible.
Inching forward The year 2007 saw many projects launched in the mid- end and high-end categories.
The affordable concept caught the fancy of develop- ers during the slowdown.
This year is witnessing launches in the mid-end seg- ment and sizes are slowly inching towards 2007 levels though the frills are missing. “There were two things happening last year -- reduc- tion in prices and reduction in sizes. With prices starting to rise gradually, job security returning and businesses doing better, the mid-seg- ment and the high-end seg- ment are back. Affordable housing exists but the new projects cater more to the mid-segment. House sizes have, therefore, increased and are moving towards 2007 levels,“ says Abhishek Kiran Gupta, head of operations - research and real estate intelligence, Jones Lang La Salle Meghraj (JLLM), a real estate consultancy.
Also, developers are not experimenting with varia- tions and modifications in apartment sizes at the pace in which it was happening in 2009. Though sizes will increase, it will happen in stages, the first trigger being this Diwali, he adds.
If one were to compare the 2007 situation with the pres- ent, one will find that three years ago consumers went beyond their budget to buy bigger apartments. Having learnt their lesson during the lowdown, they are now going for housing products that suit their pockets. Also, if developers are moving back to 2007 sizes, the same is being done with a greater level of discretion, study and research. There is greater focus on planning.
“If the brief I gave to my architect then (during 2007) was that I feel like building `X' product in a particular area because I feel good about it.
The brief I give him now is that these are the conclusions drawn from my demand sur- vey and, therefore, you need to build product `Y',“ points out Kumar Gera, chairman, Confederation of Real Estate Developers Associations of India (CREDAI).
Varied offerings Agrees Vidur Bharadwaj, architect and director at the 3Cs group. “In 2007, develop- ers were looking at opulence.
Today, the market is not yet ready for it. Every location will have some percentage of affordable, mid-segment and high-end apartments. I foresee a mixed bag.“
Concurs Pradeep Varshney, CEO, Jindal Realty (P) Limited, “In any project you'll find 10-15 per cent of the two- BHK variant of size 1,250 sq ft, 60-70 per cent of affordable apartments of sizes 750-1000 sq ft and 15-18 per cent flats of sizes 1,250-2,500 sq ft. “ Size and densities The size of apartments is not only being driven by market conditions but by densities provided by the government.
According to Amit Ramani, president, NELSON India, a US-based integrated solutions firm offering services in archi- tecture and interior design, “Developers are being forced to bring in all sizes to match and maximise the Floor Area Ratio (FAR).“ Differential pricing A dual pricing trend has also been observed in some proj- ects. Developers are offering bigger sized apartments in a high-rise at a lower price band when compared to apart- ments of similar sizes in a low- rise structure.
A case in point is the Crescent ParC project by SARE group in Gurgaon. The company is offering a 1,314 sq ft three-BHK apartment at Rs 1,650 per sq ft in the stilt-plus- four-floors category. In the stilt-plus-14-floors category, the company is offering a 1,516 sq ft three-BHK flat with servant quarters for Rs 1,550 per sq ft. This is because in a low-rise project a developer tends to lose out on Floor Space Index (FSI), which is the ratio of the total floor area of buildings to the size of the land. These low- rise towers are less dense and their FSI is a costly affair and in that sense these are premi- um towers, points out Sunil Agarwal, chief development and acquisitions officer, South Asian Real Estate (SARE).
According to Priyankar Bhikshu, DTZ, a global consul- tancy, in 2007, developers managed to increase cost and realisation but they have now concluded that it cannot hap- pen sequentially. Therefore, differential pricing has been introduced to keep the overall affordability under check.
Going forward, the trend of bigger-sized apartments will rise. For each segment, con- sideration of affordability (price `X' size) will be an inte- gral part of the development process (design to selling) in the Indian realty market. Courtesy:- HT Estates dt:- 03-April-2010
|Costs may force builders to give up green buildings
|It may become difficult for builders to construct green buildings as they are 25-35 per cent more expensive than normal housing structures, reveal findings of Grant Thornton and ASSOCHAM.
Releasing the findings of the White Paper, ASSOCHAM presi- dent, Dr Swati Piramal pointed out that despite the benefits, construct- ing a green building remained a challenge when it came to the initial capital outlay and immediate returns on investment.
The Paper also points out that considering the changes in global climate, rising population, pollution, related regulations and also com- mercial concerns vis-à-vis power crisis, running cost and pressure on urban infrastructure, green practice will become a necessity rather than a matter of choice in the next 10 years.
Along with environmental con- cerns, the most obvious objective of constructing green buildings will be to bring in energy efficient practices, thus reducing consumption of power and water. However, in the short term, real estate developers find the s initial cost of deploying energy effi- cient systems a major hindrance.
This is inspite of the fact that real estate and its ancillary industries account for more than half of the world's energy consumption.
Courtesy:- HT Estates dt:- 03-April-2010
|Mapsko Group has launched Mapsko Casa Bella, a Group Housing Project
|Mapsko Group has launched Mapsko Casa Bella, a Group Housing Project spread on an area of around 18 acres at Sector 82, Gurgaon. The group housing has 3, 3(+1), 4(+1) bedrooms of 1690 sq. ft, 1960 sq. ft., 2535 sq.
ft. respectively. The price ranges between Rs. 2,500-2,600 per sq. ft.
Courtesy:- HT Estates dt:- 03-April-2010
|Paramount Group have recently unveiled their new project Floraville in Noida
|Paramount Group have recently unveiled their new project Floraville, which is coming up at Sector 137, Expressway-Noida. The project aims at providing luxury at affordable prices.
Floraville will have 2, 3 and 4 bed room apartments. To make houses affordable, Paramount Group have come up with 2 BHK of 1045 sq ft and 1240 sq ft, priced at Rs 23.90 lakh and Rs 28.37 lakh respectively, 3 BHK of 1360 sq ft and 1425sq ft priced at Rs 31.11 lakh and Rs 32.60 lakh respectively and 4BHK flats measuring 1685 sq ft priced at Rs 38.55 lakh.
Ashwini Prakash, executive director, Paramount Group, at the launch function said, “The new era demands an amalgamation of mod- ern amenities, luxurious living and green environment at affordable prices.“
Courtesy:- HT Estates dt:- 03-April-2010
|Tenure is the period or duration for which a loan amount is sanctioned. Borrowers might feel like taking the shortest possible loan tenure ideally. However, do not rush for the shortest loan tenure. It may appear enticing to pay off your home loan debt in the shortest possible time span. However, a short tenure loan translates into very high EMI dues month after month. The borrower must remember that he has other financial commitments - usual monthly expenses - and must not stop saving during the repayment period.
So, what is the ideal loan tenure?
Consider different EMI outflows for various loan tenures. Will you be comfortable paying the EMI, yet have enough to meet all other financial commitments and emergencies? Freeze on the tenure for which you can pay the EMIs without a major financial stress.
Consider these parameters before deciding on the loan tenure:
Is the amount high?
If the homeowner has borrowed a huge sum of money, the EMI outflow would be high. Hence, to make EMI repayment comfortable, the borrower may have to go for longer loan tenure. Longer the loan tenure, lesser is the EMI outflow.
Consider a loan of Rs 50 lakhs borrowed at 12 percent interest. If the tenure is 15 years, the EMI outflow would come to around Rs 60,000. If the loan amount was lesser, say Rs 25 lakhs at 12 percent interest, the EMI outflow for a tenure of 15 years would be around Rs 30,000. If the borrower can afford to take a shorter tenure loan, of say 10 years, his EMI outflow would be around Rs. 36,000.
Purpose of buying property
If the borrower has purchased the property solely as an investment, he would like to sell it off when he gets a good deal. In such cases, most buyers prefer to keep the loan tenure as short as possible. This way they need not pay any penalties towards prepayment or exiting the loan before end of tenure.
Those who have purchased the property only to live in it may prefer longer loan tenures. They may not be very keen on a very short loan tenure. Further, they benefit from tax deductions on their home loans. However, borrowers must keep in mind that longer the loan tenure, greater is the associated cost of borrowing.
Age of borrower
A person close to his retirement years will not be eligible for a long tenure loan. A middle aged person who is making good money may prefer repaying the loan before he retires. A young borrower who has recently started working may not bring home a huge income. His income level may go up as the years pass by. He should opt for a longer loan tenure as he has many years ahead to work and clear his debt.
A person with greater disposable income can pay off his debt faster than a person who earns lesser. If the borrower has higher income, he can pay higher EMIs and clear his debts faster.
A person having greater financial commitments, other debts or a lower income may find repaying his debt a big challenge.
A borrower's current income level and expected increase in income are factors that can influence the loan tenure. Interest rate fluctuations are difficult to predict.
The impact of increase in interest rates could be hard if the borrowed amount is high. Whenever you have excess funds, partially prepay the loan. This way, a borrower can clear his debt faster.
Courtesy:- Times Property dt:- 03-April-2010
|Lifestyle statements in Noida
|Noida is shaping up as one of the most promising residential and commercial destinations in the NCR, and the Mahagun Group is adding its signaturestyle developments to the skyline, says
Krishna Kumar Mangalam
Mahagun Group has emerged as one of the leading realty players in Noida, setting standards in the sector with a proven track record of more than 40 years — it has delivered 20 projects with a client base of more than 4,000 families. It has also managed to carve a niche for itself as a reliable brand with its team of committed and highly experienced engineers and space planners, and has been delivering on its promises with consistency.
Dhiraj Jain, director of Mahagun Group, says, “Mahagun, with its unblemished track record of handing over all our projects before the committed dates, and to the complete satisfaction of our customers, has taken the principle of ‘deliver what you commit’ to new heights.” “All of our ventures have met with a resounding success. The foremost reason being our focus on rigid quality and time control. The company always strives to provide optimal specifications, thereby adding more value and cutting cost, all of which translate into optimum benefits for the customers. And the amenities, which the projects boast of, are trendsetters in their own right,” says Jain.
Mahagun has contributed immensely to the residential segment in Noida, which is developing into a premium residential and commercial destination in the NCR with top-class connectivity including expressways and the forthcoming Metro link to its various sectors. “Building on existing infrastructure and amenities, Mahagun has gone ahead and developed masterpieces in the form of premium, top of the line residential projects. Transforming the skyline of Noida are the various Mahagun creations,” says Jain.
Mahagun offers luxurious residential options in the choicest of sectors of the city. “And with Mahagun there are no shortcuts to success. Each project is meticulously planned to perfection, right down to the minutest details. Penthouses, duplex apartments or opulent multiple bedroom apartments, Mahagun has established unassailable benchmarks in each category,” says Jain. All Mahagun projects are designed by the renowned architect Hafeez Contractor.
An amalgamation of all the prime features, namely luxury, comfort and prime location, Mahagun projects have been extremely well received by customers — be it Mahagun Manor, Mahagun Villa, Mahagun Mosaic, Mahagun Mascot, Mahagun Maple, Mahagun Puram, Mahagun Maestro, Mahagun Mansion, or Mahagun Morpheus — all the ventures have been instant sellouts. Mahagun also has a commercial establishment, the Mahagun Metro Mall, which is a unique combination of a shopping mall, serviced apartment hotel and a multiplex. Mahagun is also a part of the prestigious Crossings Township project, which is India's first global city. Mahagun Maestro, a quality residential complex located in a prime location of Noida, is a showcase of the group’s creations. Built on land allotted by the Noida Authority, 80% of its area has been allocated for ‘green’ spaces. Equipped with all the Mahagun standard features like earthquake-resistant RCC structure, vaastu and ecofriendly layout, assured timely possession with penalty clause, ample parking space, power backup, and rainwater harvesting it showcases some unique features too. Each tower has a luxurious entrance lobby for example. As one walks into the apartments, you are surrounded by Indo-Italian marble, chandeliers, designer light fittings, woodwork, among other such fittings and fixtures.
Mahagun Morpheus, also located in Noida, is built along the same lines. It too bears Mahagun’s signature style of huge spaces. Each tower here has a musical entrance lobby, which lends a soothing and pleasant ambience to the whole place. With only three apartments on each floor, with a common waiting area, there is no sense of claustrophobia. The interiors have been designed with teak woodwork and designer light and bath fittings, high-grade marble and chandeliers, giving the entire setting an impression of being in a castle. The club house is studded with state-of-the-art facilities — swimming pool, gymnasium, squash court, steam and sauna bath, Jacuzzi, etc.
“At Mahagun, we are creating new models of luxury and changing the scene of real estate block by block,” says Jain. Apart from many landmark projects, the group has a very promising 4-star luxury hotel on the anvil, at Karkardooma in Delhi. After delivering several projects in Noida, Mahagun recently launched the Mahagun Maple, which is at an advanced stage of construction and has been fully sold out. To bolster its brand and presence in Noida, Mahagun is soon going to launch a megaresidential project here with quite a few other projects also lined up on the drawing board.
Courtesy:- Times Property dt:- 03-April-2010
|Bigger, brighter and better
|Suddenly there is no stopping luxury brands, hotels, retail formats from entering Tier 2 and Tier 3 cities in what may be bigger and better avatars than even in the metros, finds
If you thought ‘mall’ is Greek and Latin to someone in smaller cities and towns you surely need a reality check. Smaller city folk are not being treated to some lowbrow ‘country cousin’ version of your metro malls — instead, they are witnessing much better and bigger developments. Businessmen have smelt the appetite of locals and are crowding into Tier 2 and Tier 3 cities to encash upon the firstmover advantage and grab vast plots at reasonable rates (as against the metros, which suffer from both paucity of land and high real estate costs).
The head of operations of a big retail chain shares his perspective saying that smaller cities is the way to go for big brands now. Citing an instance, the industry insider says that when Globus had opened its store at a place like Varanasi, no one was sure what would happen, but today, the store has outperformed its Mumbai counterpart. Even the Crossword store in Visakhapatnam and other small cities in south India are doing great - so much so that a second outlet has been opened there.
Retailers, realtors, hoteliers are now seen heading to smaller cities which conventionally were not on the organized business’s radar. Take a look at the 6 lakh sq ft Alpha One mall at Amritsar and anyone would agree that it has a good mix of international, national and regional brands available anywhere. The brands include Shoppers Stop, HyperCity, Fun Cinemas, Orama, Reliance Trends, Standard Max and Lifestyle Max as well as United Colors of Benetton, Tommy Hilfiger, Levi’s, Provogue, Wrangler, Adidas, Nike, Reebok, Puma, Blackberry, Zodiac, U.S. Polo, Flying Machine, Planet Fashion, F2O, Peter England, Mufti, Hidesign, Biba, Arrow, Kap Kids, Catmoss, Emerge, Lakshita, Woodland, Magnet, VIP, Just Lucky’s, Nu West, Café Coffee Day, Mothercare, Rockport, Himalaya, VDOT, Fuel-Stop, Metro, The Body Shop, Beverly Hills Polo Club, Guess, among others.
Even luxury hotels have zeroed in on Tier 3 cities. Just imagine, one of the most sought after spas in the country, Ananda, chose Amritsar to open its only branch at a 5-star luxury hotel, Ista, which is owned and managed by hospitality chain IHHR. According to Ashwin Handa, general manager of Ista, “Ista is Amritsar’s only 5-star luxury hotel and we decided on Amritsar as the city has a huge tourist influx and offers great potential.”
The same logic holds true for mall developers and according to Pickles Sodhi of Alpha G Corp, “Punjabis like to shop and they like to spend money and enjoy a good life. My investment in Amritsar was more of a gut instinct based on the facts, of course, that Amritsar is a huge religious draw — there is enormous tourist influx and many NRIs frequent this religious destination. The paucity of a decent mall spelt opportunity. Next, we plan to target Chandigarh, Jalandhar and Ludhiana. And after that we are readying a 7 lakh sq ft mall at Ahmedabad.” He adds that they have tried to retain the local flavour by introducing Amritsari bazaar, which will retail Amritsari crafts, phulkari, etc, and encourage shopping of local goods in sanitized environment.
Fun Cinemas’ Atul Goel feels that small cities are hugely receptive to new ideas. Fun Cinemas already has multiplexes at Chandigarh, Lucknow, Ahmedabad and Coimbatore. “We are entering Amritsar with a multiplex which will have the first gold class in Punjab. Priced within Rs 500 per cover, this 35-seater will provide endless cold drinks and popcorn to patrons.” Goel adds that they are trying to tap the aspirational living value of people and showing them a taste of good life, “once they taste it and learn to enjoy it, they will ask for more and this way they will grow with us”.
North India’s first hypermarket Hypercity Retail (India) Ltd has opened in Amritsar in Alpha One mall. B S Nagesh, vice-chairman, explains: “In this vast floorplate of 1.4 lakh sq ft, a shopper gets everything from the freshest malta to jeans worth Rs 199 to LCD TVs. Besides, there is a feature called Daily diamonds, which is meant for today’s women who can pick up their favourite piece of jewellery at price points of Rs 2,000 to Rs 10,000, while shopping for daily groceries. We are here to create lasting value and we are giving ourselves three years to break even.”
But when retail strikes smaller towns do they replicate their city formats or customize to the local tastes? Govind Shrikhande, CEO of Shoppers' Stop says that the stores have similar merchandise albeit with some changes. “We are stocking pagdi (turbans) and jutti (shoes), as these are important part of the basket of a shopper in Punjab. Besides, our thrust will be on stocking more casuals than formal wear since Amritsar is not home to many corporates yet, unlike Delhi or Mumbai. Also, we would include brighter shades and focus more of traditional wear.”
However, what does not keep pace with these striking private developments is the poor public infrastructure. There is glaring contrast between public utilities and private developments and this is evident as soon as you step out of Alpha One mall and are greeted with poor infrastructure. Says S K Sayal, director & CEO of Alpha G: Corp: “While making this mall we were faced with infrastructural bottlenecks like lack of electrification, storm water drainage system, sewerage system — there is no master plan for these cities. But the authorities are slowly but surely realizing that infrastructure has to be built and we would say that one thing is leading to another. The authorities have built a flyover near the mall and the second one is already being planned near the Golden Temple.”
These private parties, of course with vested interest, are also doing good in both creating pockets of entertainment for small cities that lack them, and also bettering the services and utilities in their city of operation.
Courtesy:- Times Property dt:- 03-April-2010
|HNI in realty
|Unlike in the past, the New Age Indians are not confined to investing in residential properties — they are now setting their sights on commercial property as well, says
|If you imagine that commercial properties are only purchased by companies to expand their business prospects, think again! Now high net worth individuals (HNI) too invests in commercial properties. As recently as a few years ago, commercial property was an investment option for select individuals. Apart from the issue of a large investment, it required a different mindset from the investment point of view as well. But, over the years, a large number of Indians have begun to earn huge salaries while many others are also making a lot of money through freelance jobs, which they are investing in commercial properties.
Unlike in the past, the New Age Indians are not confined to investing in residential properties. This trend is picking up fast. “If banks do not show reluctance to give loans to individuals in order to buy commercial properties, more and more HNI will come forward to buy commercial properties. It is now no secret that banks hardly show any positive attitude to sanction loans to individuals in order to buy commercial properties. This happens all over the world. That is why you can not blame only our banks,” says Samir Jasuja, CMD of PropEquity.
An official of PNB Housing Finance Ltd also admitted that while banks happily give loans for residential properties, they are not that forthcoming when it comes to loans for the purchase of commercial properties. Reason? He said that compared to residential properties, the rate of default is very high in this segment. That is precisely the reason banks avoid disbursing loans to individuals in buying commercial properties.
“As far as Ansal API is concerned, we have got bookings from a sizable number of such individuals (HNI) in our malls (Ansal Plaza in various locations), as also in small to medium office spaces in our commercial projects in Delhi NCR, Punjab, Lucknow, Kundli (near Sonipat in Haryana), among other projects,” says the company's official spokesman.
Anu Gupta, director of Century 21 India, says that HNIs should make investments in commercial properties as these investments could maximize their return. The reason being, while they could go for bank loans up to 75-80% for such investments, the repayment of such loans could be set off against the rental incomes from such commercial properties. Thus, by investing a portion of the total price (say 25%), an investor can acquire a high-value asset, which will not only give maximum return (thanks to the set off provision
in IT against rentals), but could see a significant appreciation over a period as the retail/commercial industry grows.
Giving his own example as to how he is earning less because he has invested in residential property while his friend is earning far more than him for investing in commercial property, a Delhi-based financial professional, Narinder Gambhir, says that both he and his friend invested in residential and commercial properties in 2004 in East Delhi. Both invested close to Rs 30 lakh each. “While I am getting a rent of Rs 15,000 per month, my friend is earning Rs 25,000 from his property. This is a huge difference,” Gambhir rues.
Discussing about the factors which are crucial for HNI to look before buy commercial properties, a realty expert says that they should not invest where there is a deluge of supply. In that case, the investment would not fetch good returns. HNI also invest in commercial property, as they are not restricted to a dingy market area. Today, swanky malls enable an individual to look at commercial property as a viable investment option. Moreover, the emergence of semi-commercial property in residential locations has made the investment financially viable.
R K Arora, CMD of Supertech group, says that there is nothing wrong if you invest in commercial property, but one must invest after taking all the pros and cons into consideration. "I feel that if you invest in some commercial space in NCR, then you have to wait for a long period before earning anything as there is a massive supply of such commercial property in NCR, unlike in Delhi. If you can invest in Delhi, then it is great."
However, Alimuddin Rafi Ahmed, CMD of ILD realty group, feels that as our economy is improving after tiding over a really tough time during the market slum of 2008-09, corporates are looking for commercial spaces on lease, hence it is a perfect time to invest in commercial properties. “This is just the right time to invest as the property is available at rock-bottom prices. The crash in property prices led to downward revision of prices by developers. The reduction was to the tune of 30% or so,” Ahmed concludes.
Another point in favour of commercial property is the changing dynamics on the economic front. In bigger cities, entrepreneurship has been on the rise and this would mean a lot more individuals would be looking for office space for their business enterprises. These individuals look for properties which are not commercial, but a mix of commercial and residential.
Do they also get queries from HNI for investment in their commercial properties or malls? Sunil Jindal, CEO of SVP Developers, says that they have not dealt with HNI so far as they deal with big brands directly. “I still suggest HNIs to invest in residential than commercial properties. That is safe for them. We have noticed that due to over supply of commercial properties in NCR, they are not fetching enough returns,” says Jindal. And in the end, Ashish Jindal, head (North) of Knight Frank India, also says that if you can, then commercial property is a good investment option for investors. The motive behind such investments should be more rental returns than capital appreciation. A typical commercial office property can give 8-12% return depending upon the quality of building and tenant. It’s a good medium to long-term asset class to have in one's investment portfolio - even for the salaried class.
Courtesy:- Times Property dt:- 03-April-2010
| Bull and Bears
|Among major sectors Real Estate is also continuing to perform well on sensex and nifty from early 2004 and also builder are selling new projects on the name of affordable housing insubrubs of metro cities, tier I and tier II cities but from last two months seeing slow on sensex and nifty but selling of project is good
Big real estate company showed better results in last quarter in respect of last year same quarter and loss also picked up money from private equity players through. QIP (Qualified Institutional Placement) and reduced their debts.
Private Equity Players also learned handsome amounts. In case of Unitech, India’s second real estate company by market capitalization was placed its share with ---@ 40 in last year and this time is stable with @ to plus with high Rs 95+ in Dec 2009 from low Rs 25-40 in Mar 2009
On the operational front for the Dec 2009 quarter, the company has been able to record revenue growth of 76% year on year to Rs 774 crore largely on sales which have occurred in the previous fiscal
The company is focusing on affordable homes and expects the segments contribute about half of the overall volumes in 2010-11 about 16 million sq. ft and also focusing on Mumbai were It has tied up with Mumbai-based developers for slum rehabitation projects and expecting to will sell 40 millon sq. ft area. The company is now standing on a debt of Rs 6200 cr. I.e. debt to equity ratio is 0.3 times
The company also hived off its non-core businesses like power, telecom, hotels and SEZ’s to improve sentiments towards the stocks
|Bottom-Fishing with Caution
|The market has been recovering from the meltdown, but a few stocks are languishing at lower levels. Some of these stocks can turn out to be good bets for the long run.
In the advanced stages of any rally, experts often dig much deeper to find stocks, which still can provide some value to investors. With frontline stocks already factoring in one or two years of expected growth, the focus shifts to stocks, which have not done well over the course of the rally. There could be many reasons for some stocks to languish during the rally. The first and the simplest is that they are simply off the investor’s radar. The other reason could be that their financial performance is wanting. Whatever may be the reason, one thing is for sure that there is an eye keenly going over the stock charts and finding out which of these stocks, can be a good investment. Seizing these opportunity, ET Intelligence Group analysed the stocks, which haven’t done well ever since the current rally started on March 09, 2009 to find out if there are good value picks for investors.
And we didn’t have to dig deep to find, as leading stocks of the FMCG sector – Hindustan Unilever (HUL) & Britannia - have been gross underperformers over the course of the past one year. HUL, in fact, didn’t move at all during the year. HUL it has underperformed most of its smaller peers since the past four consecutive quarters. Its performance is also way below its own track record also. For instance, its current operating margin of 14% is lower than its own peak margin of 18%(achieved in 2002) and below than other FMCG players, such as Nestle and Dabur that have operating margins of 19% and 17%, respectively. Rising competition has become a double-edged sword, as it has not only eaten into HUL’s market share, but has also made it necessary for the company to spend more on advertisement. Much like HUL, Britannia too fared poorly vis-Ã -vis its peers, such as Dabur and Marico. If Britannia’s stock price fared poorly compared to Sensex, its performance was equally subdued. The spiralling cost of wheat and sugar, key ingredients for the company, has adversely impacted its bottomline. Rising commodity prices amidst inflationary conditions are likely to be major hurdles for the company to deliver growth in earnings. Since the near-term prospects of both HUL and Britannia look bleak, investors are advised to stay away from them even though they are available at seemingly reasonable valuations.
Similarly, oil marketing companies (OMC) are facing tough operating environment. All three of them - Indian Oil, BPCL and HPCL, have grossly under performed the market over the past one year due to their continuing inability to control their profitability. They face a peculiar predicament as they can’t decide the selling price of most of their products despite rising costs. What is more, they can’t even curtail their sales even if higher sales lead to higher losses. In the meantime, the government has cut down on its aids to OMCs for selling products below cost. These three companies, which have launched expansion projects that may be dubbed as ambitious considering their cash generation capacity are likely to become debt-ridden, unless some bold decisions are made. The government’s past attempts at bringing in reforms in the oil industry have failed miserably. Investors should shun these stocks too even though they are available at bargain prices.
Bargain hunters may, however, find value in the power sectors with the country’s two largest utilities-NTPC and Power Grid- available at significant discount to their peers. While NTPC’s stock price, the country’s largest power generator, has suffered due to a delay in the commissioning of new projects due to various issues; Power Grid stock continues to languish despite a robust financial performance by the company in the first quarter of FY 10. However, the recent lull in NTPC earnings growth is about to end as it recently commissioned a 490 MW units in Delhi and is expected to augment its product capacity by nearly 60% in a phased manner by the end of FY 13. This will not only double the company’s revenues and net profit but would also improve its return ratios such as return on equity (RoE) and return on capital employed (RoCE), which suffered in the past two years due to a sharp increase in capital expenditure. The stock is currently trading at just 19 times its trailing net profit. In contrast, its peers, such as Tata Power and Neyveli Lignite are trading in the range of 30-40 times. This makes it a value buy for long-term investors though immediate gains may be difficult.
Power Grid is working on equally big capacity expansion and implementing projects, which will nearly double its transmission capacity by 60% in the next three years. This will help maintain earnings momentum in the near to medium term. Power transmission is a highly scalable business, and once a project gets commissioned, operating profit can be as high as 90% with hardly any operational risks. At its current price, Power Grid is down nearly 18% from its 52-week peak and looks undervalued with a price-to-earning multiple of 21x and looks a safe bet for investors.
Then there are stocks, which seem to be poised to yield good returns for their shareholders going forward. For instance, Koutons Retail’s stock price has largly remained flat in the current rally. This is despite the factors like improved inventory management, lesser markdowns and higher volumes have enabled this retailer to post a 16% growth in its profit in the nine months ended December 2009. Moreover, the company is expected to gain from ladies and kids segment, which have higher margins. On the other hand, improved inventory management will result in lesser working capital thereby improving the cash flows. Given the expected improvement in financial, Koutons Retail can be a good bet for investors at current levels.
Similarly, investors can take a sigh of relief as far as India Cements is concerned. It has been one of the worst performing stocks due to a tough operating environment in its markets in Tamil Nadu, Andhra Pradesh and Karnataka. The region is facing a glut in cement supply, which has depressed prices. However, worst seems to be over for the company. In May last year, the company opened a grinding unit in central Maharashtra to lessen it independence on South India and enter central and west India where cement prices remained firm. The stock is currently trading at just 1.2 times its book value. In contrast, most of its peers are trading at 2-5 times their book value. At this level, a lot of bad news is already factored into the stock price, and any improvement in financial may lead to a rally in the stock’s price.
Similarly, industrial cylinder manufacturer Everest Kanto Cylinders (EKC) had a disastrous run till now, as its consolidated profit fell by 76% in the nine months ended December 2009. The company is facing pressures of high cost inventory. However, it is expected to get a breather as its 3-lakh units per annum plant in Kandla SEZ is expected to commission operating soon. The profitability of EKC’s subsidiaries has drastically come down, particular those in the UAE and US, while the newly acquired subsidiary in Kolkata, which holds marketing rights for ONGC’s coal-bed-methane block in Jharkhand, is yet to begin operations. However, this situation is likely to improve in the near future with demand picking up and company getting rid of its high cost raw material inventory. So, investors can make use of the current fall in stock price by investing in the stock
Another stock, which has not done well of late but can be a good potential investment, is EIH. The hospitability major is trading at a significant discount to its rival- Indian Hotels. Indian Hotels. While EIH is trading at a price-to-earnings (P/E) multiple of 48, Indian Hotels is trading at a P/E of 78. This is despite the fact that EIH is known for lesser capital dilution compared to its peers. The advantage of lesser capital dilution is that its growth is fuelled by only internal accruals and not through more money from stakeholders. As a result, its return on capital employed is much higher than Indian Hotels. So, at current levels even EIH could be a good buy for investors.
Further the country’s largest non-basmati rice producer Lakshmi Energy and Foods is trading at P/E of 8, while industry P/E is 10.5. This is regardless of the fact that the company’s performance in the quarter ended December 2009 was above the market expectations. Recently, it has ventured into power generation from biomass and selling of branded rice to retail, thereby safeguarding itself from the cyclically of the sector. No doubt, the stock is not adequately priced at current valuations, which means retails investors can take exposure to the stock.
As it seems from the analysis, not every battered stock is a good bet at current levels. Investors should exercise caution and invest wisely in those companies, which are going to show some recovery in fundamentals.
|Mar 9 '09
|Indian Oil Corporation
|Lakshmi Energy & foods
|Power Grid Corporation
|*March 9 '09 was when the current rally had started
|^ it shows the percentage change in the stock price since the rally had started
|# it shows the percentage change in Sensex since the rally had started
|**it shows the difference between stock price change and Sensex change
|Courtesy: ET – 22-03-2010
|DLF completes Caraf merger with arm, gets ready for DAL listing
| DLF Assets Likely to Be Listed On Singapore Stock Exchange In Q1 Of 2010-11
DLF has completed the merger of Caraf Builders and Construction, which owns investment trust DLF Assets Ltd (DAL), with another offshoot DLF Cyber City, a move India’s biggest realtor says is logical to listing DAL on the Singapore Stock Exchange (SGX).
A company spokesman confirmed the development while two senior executives involved in the listing process said DAL, set up to acquire properties from DLF and other developers for leasing out to third parties, is likely to be listed on SGX in the first quarter of 2010-11
Though DAL’s listing was not dependent on the merger, it was important that the integration with Cyber City, a wholly-owned subsidiary, was completed before the listing as the move is also aimed at further streamlining all commercial assets under one head, said the first executive on condition of anonymity.
Under SGX norms, a company planning to list cannot reveal listing plans before its draft prospectus is approved. Merging DAL, which buys and manages commercial assets on the lines of real estate investment trusts, with Cyber City will ring-fence DLF from the uncertainties of the property market as it guarantees a steady stream of revenues, said the second executive. DLF acquired Caraf from promoters KP Singh and family last December in a share swap deal and decided to give it a 40% stake in its Cyber City. By consolidating the group’s rental assets, that transaction too was aimed at ensuring a steady cash flow.
The rental business of DLF and Caraf together generated annual incomes of Rs 700 crore and Rs 550 crore in the current fiscal. Post-merger, the rental business is expected to give DLF an annual income of Rs 1,500 crore in 2010-11, which should be 20% of the total income, said the second executive. As the merger is effective from March 19, its effect will not reflected in the current financial year, he added.
Courtesy: ET – 22-03-2010
|100 Years On, Govt Reworks Property Registration Rules
|Proposed Legislation Is Likely To Recognise Electronic Stamping and Online Payment of Stamp Duties
Registering a property could soon be painless affair with the government planning to replace the century-old Indian Stamp Act, 1899 with a simpler law that will do away with a large number of antiquated provisions and fees.
The finance ministry has already kicked off a preliminary exercise for drafting the new law and is hopeful of finalising it by the end of the year. The draft will also be discussed with state governments to elicit their views before a final decision is taken, government officials familiar with the development said.
“The current law was written more than 100 years ago. Since then the form of business and transactions have completely changed and we feel that there is a need to replace the Act,” said a senior government official.
Stamp duty is levied on a number of financial and legal transactions. At present, the documents are physically verified by different departments, making the process of registration a time-consuming activity. The new legislation is expected to address some of these issues.
The proposed legislation is likely to recognize electronic stamping and electronic payment of stamp duties. At present, the facility is available as part of the MAC 21 e-governance initiatives for companies that wish to file their papers online with the Registrar of Companies.
The legislation could also allow payment of duty on instruments and court fees through modes like demand drafts and bankers’ cheques, which are not permitted under the existing law.
“The emphasis has now shifted to e-governance and such a provision will make it easier for citizens to adhere to laws and be much more convenient than the physical act of buying and pasting stamps,” the official said, requesting anonymity.
The provision could also help reduce the leakage of revenue because of stamp duty frauds, he said.
The government is also planning to rework the current structure of stamp duty fees and penalties. Duties charged in the smaller denomination and often, obsolete paisa would be replaced with rupees or be calculated as a percentage.
Significantly, the Law Commission, led by Justice AR Lakshmanan, had suo moto taken up the issue of amending the Indian Stamp Act last year. It had suggested in its report that the required fee for any transaction or court fee should be paid by demand draft, cash, postal order, banker’s cheque rather than through non-judicial stamp papers or special stamps.
Courtesy:- ET dt: 20-March-2010
|REALTORS WOO MFS TO THEIR IPOS WITH GOODIES
|While most of the large to mid-sized recent offerings have received a lukewarm response, the buzz is that quite a few real estate companies are bent on going ahead with their initial public offering (IPO) plans. Grapevine in market circles is that quite a few fund managers are being tempted with apartments at concessional rates in the projects of these companies in return for subscribing to the issues. This kind of arrangement will not be very expensive for real estate firms either, given the fat margins in the business and the fact that these projects are yet to be completed. After all, what are a few crores when hundreds of crores are at stake? Market watchers say at least two companies that came out with IPOs in the recent past had such an arrangement with some fund managers. Needless to say, both the offerings had witnessed a strong response from institutional investors despite expensive valuations. With banks cutting down their lending to the real estate sector, and the stock market, too, lukewarm to property developers, it has become a desperate situation for many cash-starved builders.
Courtesy:- ET dt:- 18-03-2010
|A WEEKLY SNAPSHOT OF SOME BIG-TICKET CITY DEALS
A residential apartment spread across an area of 5,800 sq ft was sold at a total value of Rs 12,52,37,500 at Lower Parel in Central Mumbai. The apartment features a plunge pool and a terrace garden, while the complex offers a club house, along with other amenities. This under–construction high-end apartment commanded an average capital value of Rs 21,500 per sq ft and will be ready for possession in 34 months. The commanded range for ready apartments in this area is Rs 34,000 – 55,000 per sq ft. Lower Parel is likely to witness an increase in the number of new project launches for high end as well as mid-ranged projects over the next three to six months.
An apartment covering an area of 2,800 sq ft in Kalyani Nagar was leased out to a corporate for a rental of Rs 1.6 lakh per month. This rental for this high-end apartment was well within the commanded range of Rs 1,10,000 – 2,10,000. It happens to be amongst the most sought after buildings in the expat community. While prices in this micro-market have remained stable over the past two quarters, they are expected to appreciate on account of the growing demand from expatriates and corporates, mainly due to its proximity to the airport, railway station as well as the central business district.
A beach house spread across 3500 sq ft, located on the East Coast Road was leased for a monthly rental value of Rs 1.75 lakh. This apart, another apartment admeasuring 3500 sq ft at Boat Club was leased out for a rental of Rs 1.4 lakh per month. This highend apartment’s rental is well within the prevalent range of Rs 80,000–2,25,000 per month. Properties on the East Coast Road, which are closer to the city limits, have been witnessing a buoyant demand in the recent past.
An apartment covering an area of 3,000 sq ft was sold at a total value of Rs 2,24,00,000 in the highly sought-after Koramangala area. This high-end apartment commanded an average capital value of close to Rs 7,466 per sq ft, which is well within the commanded range of Rs 6000– 8500 per sq ft in the locality. A villa in Whitefield, spread across 4,000 sq ft, was sold for a total cost of Rs 1,75,00,000. This high-end villa commanded an average capital value of Rs 4,375 per sq ft, which was below the prevalent range of Rs 5,600– 7,000 per sq ft. The demand in the city of Bangalore has been largely driven by affordable housing projects and smaller sized-apartments.
Cushman & Wakefield, a commercial real estate services firm with offices worldwide, delivers solutions including advising, implementing and managing on behalf of landlords, tenants, and investors.
Courtesy: - 19-03-2010
|BUDGET BLUES FOR THE REALTY SECTOR
|Service tax burden imposed by the Union Budget on realty transactions will affect the sector. Read on to know what are the pluses and the minuses of the new budget
The Union Budget 2010-11 is a big disappointment to the middle-class urban housing sector. However, it has bet on the economic growth to drive demand in the sector. By tweaking the income slab, finance minister Pranab Mukherjee has put some extra money into the pocket of middle-class tax payers. A person having an income of Rs 5 lakh per annum is likely to gain Rs 20,600 per annum from the provision. But, if his income is more than Rs 8 lakh, his annual gains will be around Rs 51,500. These are a big booster to the economy as they will increase the purchasing capacity of individuals. Ultimately, tax saving is equivalent to money earned.
Service tax on apartments under construction
But at the same time, the finance minister has imposed service taxes on a number of services related to the real estate sector. Anshuman Magzine, MD of global consultancy firm CBRE Asia, says that these provisions will be a dampener and affect the revival of the real estate sector. Another realty consultancy firm,
Knight Frank also said that it would affect the sector adversely. According to a budget provision, in cases where a property under construction is bought and a consumer makes payment over a period of time, then it will attract service tax. "In the 'Construction of complex service', it is being provided that unless the entire consideration for the property is paid after the completion of construction (that is, after receipt of completion certificate from the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly," reads the provision.
A senior tax consultant of KPMG says that this clearly means that if a house or apartment is sold before the completion of the construction, a buyer will have to pay the service tax. In fact, Sunil Mitra, revenue secretary, said that even if a house is already sold but the completion certificate could be secured from the concerned authority in 2010-11 or after March 31, 2010, the service tax would be levied on such transaction. According to tax experts, this will lead to a tax outgo of 3.4% of the sale value of the house. Mitra also confirmed that the department would allow an abatement of 67% on the value of house to calculate the service tax at the rate of 10.3%.
This means, if you have bought a house for Rs 50 lakh at the time of launch of a project, your tax liability would be Rs 1.70 lakh. However, with the service tax levied from service provider, a senior builder said they would pass on the liability to the customer. He said that since they have started launching affordable apartments, the margin is so thin that they would not be able to absorb them. The budget has also included the renting of immovable property under the service tax net. Knight Frank says that this will have a negative impact on the real estate sector. The levy of service tax will impact rented commercial property with retrospective effect from June 1, 2007. Even in cases where a developer takes land on lease and pays lease rent, the lease rent will attract service tax.
Preferred location will be taxed
Interestingly, the differential charges for higher floor, or for preferential view, better spaces, etc will also attract service tax. "Certain additional services provided by a builder to prospective buyers like providing preferential location or external or internal development of complexes on extra charges. However, service of providing vehicle-parking space would not be subjected to tax," the new provision says. However, there are some positive aspects also, which will benefit the construction sector as a whole.
Hotel industry gets a boost
According to a new provision, all new hotels of 2-star and above category will be benefited because of the investment-linked deduction - 100% of the capital expenditure incurred by a hotel can be reduced from taxable income. This will enhance the returns for developers of hotel projects, says Knight Frank. "The provision will enable investments in the hospitality segment and boost supply in the organized sector. It aims to provide support to the hospitality sector in expectation of growth in tourism and both business and leisure travel," says Anurag Mathur, MD of Cushman & Wakefield India.
Relief under 80 IB
The budget has also given relief to developers under Section 80 IB (10). It has provided the extension of income tax exemption for housing projects by one year. It will give a relief to projects that were delayed during the slump. These projects should have been sanctioned on or before March 31, 2008 and be completed in five years. Similarly, the provision for commercial establishments has been increased from 5% or 2,000 sq ft of built-up area, whichever is less, to 3% or 5,000 sq ft of built-up area, whichever is higher. Therefore, at least 5,000 sq ft of shop establishments can now be developed in these projects while continuing to remain eligible for income tax exemption, says Knight Frank.
The relief to developers by allowing extension for claiming deduction of their profits within a period of five years under the section, says Mathur, would help those developers who were impacted by the global financial crisis last year. This announcement is likely to provide a breather for developers who were finding it difficult to complete projects due to liquidity crunch.
However, on the other hand, the announcement may be a cause of concern for the consumer/end user as relief extended to developers might result in further delay in project completion.
In addition, it is suggested that the norms for built-up area of shops and other commercial establishment in housing projects will be relaxed to enable basic facilities for the residents.
Courtesy:- ET Realty dt:- 19-03-2010
|HNI INVESTING IN COMMERCIAL PROPERTIES
|Unlike in the past, the New Age Indians are not confined to investing in residential properties. They are now setting their sights on commercial property as well. Read on to know what attracts them to commercial properties
If you imagine that commercial properties are only purchased by companies to expand their business prospects, think again! Now high net worth individuals (HNI) too invests in commercial properties. As recently as a few years ago, commercial property was an investment option for select individuals. Apart from the issue of a large investment, it required a different mindset from the investment point of view as well. But, over the years, a large number of Indians have begun to earn huge salaries while many others are also making a lot of money through freelance jobs, which they are investing in commercial properties.
Unlike in the past, the New Age Indians are not confined to investing in residential properties. This trend is picking up fast. "If banks do not show reluctance to give loans to individuals in order to buy commercial properties, more and more HNI will come forward to buy commercial properties. It is now no secret that banks hardly show any positive attitude to sanction loans to individuals in order to buy commercial properties. This happens all over the world. That is why you cannot blame only our banks," says Samir Jasuja, CMD of PropEquity.
An official of PNB Housing Finance Ltd also admitted that while banks happily give loans for residential properties, they are not that forthcoming when it comes to loans for the purchase of commercial properties. Reason? He said that compared to residential properties, the rate of default is very high in this segment. That is precisely the reason banks avoid disbursing loans to individuals in buying commercial properties.
"As far as Ansal API is concerned, we have got bookings from a sizable number of such individuals (HNI) in our malls (Ansal Plaza in various locations), as also in small to medium office spaces in our commercial projects in Delhi NCR, Punjab, Lucknow, Kundli (near Sonipat in Haryana), among other projects," says the company's official spokesman.
Anu Gupta, director of Century 21 India, says that HNIs should make investments in commercial properties as these investments could maximize their return. The reason being, while they could go for bank loans up to 75-80% for such investments, the repayment of such loans could be set off against the rental incomes from such commercial properties. Thus, by investing a portion of the total price (say 25%), an investor can acquire a high-value asset, which will not only give maximum return (thanks to the set off provision in IT against rentals), but could see a significant appreciation over a period as the retail/commercial industry grows.
Giving his own example as to how he is earning less because he has invested in residential property while his friend is earning far more than him for investing in commercial property, a Delhi based financial professional, Narinder Gambhir, says that both he and his friend invested in residential and commercial properties in 2004 in East Delhi. Both invested close to Rs 30 lakh each. "While I am getting a rent of Rs 15,000 per month, my friend is earning Rs 25,000 from his property. This is a huge difference," Gambhir rues.
Discussing about the factors which are crucial for HNI to look before buy commercial properties, a realty expert says that they should not invest where there is a deluge of supply. In that case, the investment would not fetch good returns. HNI also invest in commercial property, as they are not restricted to a dingy market area. Today, swanky malls enable an individual to look at commercial property as a viable investment option. Moreover, the emergence of semi-commercial property in residential locations has made the investment financially viable.
RK Arora, CMD of Supertech group, says that there is nothing wrong if you invest in commercial property, but one must invest after taking all the pros and cons into consideration. "I feel that if you invest in some commercial space in NCR, then you have to wait for a long period before earning anything as there is a massive supply of such commercial property in NCR, unlike in Delhi. If you can invest in Delhi, then it is great."
However, Alimuddin Rafi Ahmed, CMD of ILD realty group, feels that as our economy is improving after tiding over a really tough time during the market slum of 2008-09, corporates are looking for commercial spaces on lease, hence it is a perfect time to invest in commercial properties. "This is just the right time to invest as the property is available at rockbottom prices. The crash in property prices led to downward revision of prices by developers. The reduction was to the tune of 30% or so. Hope things go better in the times to come and everyone benefits from the property," Ahmed concludes.
Courtesy:- ET Realty dt:- 19-03-2010
|Norwegian major yesterday has released last fourth installment of Rs 2000cr of Unitech wireless and increased his stake up to 67.25% and rest with Unitech but Telenor has got approach from Indian regulator to increase its stake up to 74% but it has no plans to hikes its holdings from current 67.25.
Hospital chain, Fortis Healthcare will raised Rs 1250 cr from domestic and international markets to meet its funding requirements by global depository receipts, American depository receipts and foreign currency convertible bonds, said in a filling to the Bombay Stock Exchange.
|REAL ESTATE: SOME LIKE IT ‘OUGHT, SOME LIKE IT SOLD. SOME LIKE IT IN THE FINANCING POT, NINE EMIS OLD -- SOME POST B BLUES
|REAL ESTATE: SOME LIKE IT ‘OUGHT, SOME LIKE IT SOLD. SOME LIKE IT IN THE FINANCING POT, NINE EMIS OLD -- SOME POST B BLUES
Did Pranab Mukherjee get it right this time according to our real estate players? Pallavee Dhaundiyal Panthry spoke to real estate developers about their opinion on the subject and their industry. Paradigm shift or run-of-the-mill?
Developers have welcomed the increased time limit for the completion of projects from four years to five years for claiming a deduction of their profits. However, they are not really for the increase in excise duty because, according to them, this move will increase input prices and the burden will eventually be on developers as well as buyers. The 10 per cent service tax in real estate, as per many, will prove more unfavorable to the buyers. Besides, the changes in the real estate sector included allocation of huge funds in the rural area and property rights to slum developers and increase in the set time limit for accomplishing a project from four to five years.
GAURAV MITTAL, DIRECTOR, CHD DEVELOPERS
The up side of the budget includes, surcharge on corporate tax decreased from 10 per cent to 7.5 per cent, which will prove beneficial for all corporates. Besides, extension of subsidy for home loans less than Rs 10 lakh for one more year more is again welcoming. However, the unfavorable point in budget 2010-11 is the service tax, which will be applicable on all under construction properties. At one side the government talks about promoting affordable housing and at the same time making this tax applicable would only make these houses more expensive, which is ironic. Increase in excise duty from eight per cent to 10 per cent, means increase in the price of raw material, will eventually lead to costlier construction and costlier houses. I feel some initiatives should be taken to make affordable housing, economical to construct in true sense and not just as an eye wash. This may not prove to be fruitful.
SANJEEV SRIVASTVA, MANAGING DIRECTOR, ASSOTECH
Allocation of Rs 1,270 crores for the FY11 under the Rajiv Awas Yojna along with special emphasis on low cost housing and slum rehabilitation will help buyers of low cost housing in the rural and semi-urban area. Five years extension in the time-limit for completion of projects eligible for deduction under section 80-IB and extension of one per cent interest subvention for low cost housing to 31.03.2011 along with increase in the IT slab rates for individuals would boost demand for budget homes. Proposed service-tax at 10.3 per cent on the value of additional services provided by the builder and lease of vacant land (if construction is undertaken thereon) would make the cost of home dearer to the buyer. Imposition of service tax on rentals with retrospective effect from 1st June 2007 would cost one percent to 1.25 per cent of the retailer's turnover, which is neither in the interest of the owner of the commercial space nor the retailer using that space.
Talking from the developers' perspective, developers undertaking low cost high volume mass housing projects will be benefitted. Investment-linked tax holiday for all new hotels in the two-star plus categories would help developers undertaking hospitality projects.
But applicability of service tax as detailed above and increased indirect taxes on raw materials such as steel and cement will increase the end cost and project costs would go up by four to five per cent, which would adversely affect the developers. This may not be a good sign for the times to come for this industry. Anyway, we have to make the best of the good points from this.
R K ARORA, CHAIRMAN & MANAGING DIRECTOR, SUPERTECH
The budget, this year talks of both positive and negative aspects for the real estate developers as well as the buyers. There is a revision in personal income tax slabs, which will strengthen the purchasing power of the buyers affecting the demand of the residential sector. The common man will also be benefited by the continued subsidy of one per cent for affordable housing loans, which will help this sector to grow. On the other hand, a two per cent increase in excise duty of cement and steel might not prove profitable for the real estate developers as the cost of construction would be expensive which will ultimately result in the increased cost of the project and hence the buyers will be affected. Also, it would have been a great support to the real estate sector if Section 80I (B) would have been renewed to thrive the demand of affordable housing.
ABHISHECK LODHA, MANAGING DIRECTOR, LODHA DEVELOPERS
The finance minister has taken a pro-active measure by reducing the income tax burden on the middle class and hence, increasing disposable income and consequently leading to increased demand for consumables and housing. The focus on development of infrastructure is crucial as the world is looking at India as an important member of the global community. While there are no major initiatives for real estate, the lack of extension of 80 IB benefits to new projects started after March 2008 is a missed opportunity, since it would have led to creation of large volumes of affordable housing for the "Aam Aadmi' and also spurred economic growth due to strong cross industry linkages of the construction chain. We hope that the intent of the government to continue the economic momentum through a combination of consumption growth and fiscal discipline will be further enhanced through the coming year by concrete initiatives on increasing productivity in our country - this would ensure that the goal of double digit growth rates is achieved soon.
ANIL KUMAR SHARMA, CHAIRMAN & MANAGING DIRECTOR, AMRAPALI GROUP
While extending measured benefits to the realtors, the proposed budget visions its commitment to promote "Aam Aadmi" housing by proposing major allocations for it. Developers and real estate companies, however, were looking for much more than what the finance minister had to offer. The real-estate sector is all about demand and supply. In India, demand far outstrips supply. Budget 2010 is positive, balanced and growth oriented. By raising the exemption limits in the income tax, the government has sought to financially empower the consumers, which would boost real estate sales. Although government has increased the cost of raw material, yet the budget this time can be viewed in a positive way. The industry will witness an upsurge shortly marking a benchmark of recovery from the ongoing worldwide recession as the government has sought to financially empower the consumers, which would boost real estate sales.
AMAR AMBANI, VICE PRESIDENT RESEARCH, INDIA INFOLINE LTD
One major devil in the budget detail is for the real estate sector. Service tax has been levied on additional services provided by a builder to buyers like preferential location, internal and external development of complexes (except vehicle parking). Furthermore, unless the entire consideration for a property is paid after completion of construction, the construction activity will be charged service tax. Renting of property, rent of vacant land under agreement to undertake construction of building or other structures will be charged service tax -- a drag on the bottom-line.
MANISH PERIWAL, CHAIRMAN & MANAGING DIRECTOR, PIONEER URBAN LAND AND INFRASTRUCTURE
The Government has treaded a line of fine balance to lead the economy to high GDP growth rate by investing in infrastructure sector, yet keeping the fiscal deficit within manageable limits which has already undergone a substantial deviation at 6.8 per cent from 6.1 per cent at the time of interim budget. In the backdrop of ambitious 'housing for all' and `Slum free India' agenda, the rural and urban housing sectors have been given importance, largely through Government's flagship programmes rather than the incentives real estate companies were hoping for. We feel investment in infrastructure will have a cascading impact on the residential and commercial projects as the development foot print can expand. The concessions in Direct Taxes on the salaried class should have a positive impact on the mid to premium residential housing segment in which we operate. But launched projects will suffer as the top line is locked and thin margins will erode further. The buyer will be impacted.
Courtesy:- FT dt:- 07-Mar-2010
|Recovery in realty
|Recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010, a report says, but cautions that it would be premature to predict a bounce-back for the entire sector. Prabhakar Sinha writes
Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.
The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilize but will remain within acceptable range. The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3 % to 25% over the previous year, the report shows (see chart). Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well. NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown, which created a kind of uncertainty in the
job markets. The best outcome of the slowdown is the emergence of affordable housing in the country. At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.
Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction. The report said, there was a clear shift towards ready to-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.
In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech, which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days. The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.
Due to focus by developers in 2006 and 2007 on luxury housing, high-end properties in most cities suffered a steep correction when slowdown impacted the sector, as compared to mid-end properties. This left a large unmet demand in the mid-end market. As favourable conditions have come back, the sector has witnessed resurgence of demand.
However, for the trend to continue, the government should not put extra burden on it. The budget announcement of 10.3% service tax on the sale of apartments before completion is expected to have the highest impact in the real estate market. This may hamper the attractiveness of the projects under construction. The scope of service tax is extended to the construction of complex service, wherein the developer/builder is likely to pay service tax on construction services while the project is under construction. The levy would cover all construction of complex service or commercial or industrial construction services resulting in higher cost of properties under construction. The service tax of 10.3% will be levied and also be charged on additional services provided in residential developments such as preferential location charges, internal or external development charges, etc. It is estimated that service tax of 10.3% will be levied on approximately 33% of the value of an apartment, which is likely to escalate the price of real estate and put further pressure on the housing affordability. In the short term, the report says, real estate prices across most cities are expected to continue to strengthen. However, it also warns that a significant increase could result in demand drying up and lead to stagnation or further correction. Rental values are expected to remain stagnant, especially in the luxury/high-end segment with certain mid-end properties witnessing buoyancy.
Developers are likely to remain cautious and launch new projects at attractive price points, the report says. Due to prevalent demand for mid-income housing, most developers are expected to focus on new projects in this category, over short- to medium-term, with very few niche projects in luxury category with strong differentiation factors.
Courtesy:- TP dt:-13-Mar-2010
|SERVICE TAX MAY TAKE TOLL ON REALTY
|After many months in the dumps, the housing sector was finally sniffing at a recovery as buyers returned gradually, lured by sharp price cuts and teaser loans.
But a Budget proposal to levy service tax on houses under construction is threatening to crimp the sector’s fragile recovery as the resultant price hike is certain to dissuade fresh buyers. The proposal, a bolt from the blue, purported to spur builders into completing projects faster after rampant complaints of long delays.
Though that remains to be seen, an immediate effect will be the prices of incomplete houses rising by 3% after a service tax of 10.3%, including surcharge, is imposed. The levy is based on an earlier Income Tax Department circular, held up due to resistance from developers, which set 33% of the house price as services.
Housing project comprises land, raw material, labor and services. Though services include branding and selling of a project, there is an unwritten understanding that no ‘service’ was being provided till a developer passed a property title to a buyer.
Back-of the- envelope calculations show that an Rs 30-lakh housing property will see a price hike of at least Rs 1 lakh after the service tax is affected.
“Affordable housing will be impacted the worst,” said Niranjan Hiranandani, chairman of Mumbai-based developer Hiranandani Constructions, adding that everyone in that category must now pay developers in installments.
The Budget proposal, coming after the Reserve Bank of India’s incessant frowning on teaser loans, will wane demand further, say realty watchers.
Most houses are typically sold during construction with buyers paying in phases. The Budget proposal means that even buyers who have to pay, say, the remaining 5% of the overall cost during possession, will have to cough up more.
The proposal could also pose problems in calculating remaining payments though it will ratchet up demand for ready-to-move properties, say realty watchers.
As for developers, the market’s response to the proposal will determine their long-term plans. “Affordable housing will now become unaffordable,” said Rajeev Talwar, managing director of DLF, the country’s largest developer.
“Housing is a state subject and the move is impinging.”
Real estate was among the worst hit sectors in the global downturn as buyers kept away and banks became wary of lending. But teaser loans, some even as low as 8.25% much below their prime lending rate (PLR), last year stalled the decline.
But builders fear that the introduction of a service tax and absence of teaser loans will compound the problem of oversupply of residential and commercial properties in several parts of the country.
Courtesy:- ET dt:- 04-Mar-2010
|NO TAXING TIME FOR REAL ESTATE: GOVT
|Says construction attracts service tax only on 33 per cent of the value.
The government today said the net impact of the service tax on real estate construction would be only 3.3 per cent, since construction attracts service tax only on 33 per cent of the value.
The government had last week clarified through the Budget that transactions such as leasing vacant land and commercial spaces, payment made to developers before the grant of completion certificate and imposing preferred location charges, among others, would come under the service tax net.
Developers said the proposal could push home prices up by 10 per cent in Tier-II and Tier-III towns and 0.5-4 per cent in big cities such as Mumbai and Delhi which have higher land prices. However, a senior finance ministry official here said the net impact of the service tax would be only 3.3 per cent, since there is an abatement of 67 per cent.
“There is a false impression being created that prices will go up by 10 per cent but the fact is that 10 per cent service tax is levied only on 33 per cent of the value,” said the official.
The budgetary clarification has been issued with retrospective effect from 2007, when real estate transactions were brought under service tax. Abatement scheme, under notification number 1/2006 dated March 1, 2006, says that the contractor is entitled to claim abatement to the extent of 67 per cent of the value of services rendered by him. In effect, the contractor would have to pay service tax only on 33 per cent of the value.
Stung by new service tax proposals on property transactions, real estate bodies such as the Confederation of Real Estate Developers Associations of India and Maharashtra Chamber of Housing and Industry plan to approach the finance ministry to seek rollback of some proposals.
Developers have already increased prices by 15-20 per cent in the last nine months as demand for homes picked up. This resulted in demand tapering in January and February.
Courtesy:- BS dt:- 04-March-2010
|FOREIGN DEBT STILL SEEPING INTO REALTY
| Foreign debt, banned in real estate, is finding its way into property firms as bankers and lawyers help builders cobble together new deals to raise money.
Even though foreign loans—better known as external commercial borrowings—are not permitted in construction, property firms have spotted a mechanism where the debt can be provided by foreign institutional investors (FIIs) registered with Sebi. No rules are broken and the deals, involving a three-way transaction, come across as normal private placements in the corporate bond market.
The process begins with a real estate company placing nonconvertible debentures (NCDs) with a local entity, such as a nonbanking finance company (NBFC). The next step involves listing the debt security, soon after which an FII steps in. Once the NCD is listed on a stock exchange, the NBFC offloads the paper to a foreign fund. Since FIIs cannot invest in unlisted debt, the NBFC warehouses the NCD till the paper is listed and then recovers the money by selling the debentures to a foreign fund.
The two transactions are part of a back-to-back deal struck between the firm issuing the NCD, the local NBFC and the FII. At least four developers—three from Mumbai and one from Bangalore—have risen over Rs 1,000 cr in the past few months through this route.
“It does not directly violate the Press Note on foreign investment in property, and such FII investment is within the overall corporate bond ceiling applicable to foreign funds... but it’s against the spirit of the regulation,” admitted a senior banker who has advised one such NCD issue.
Indeed, a few foreign banks have made presentations to property firms on the convenience of such fund-raising which has become more attractive since the government plugged a loophole on the foreign direct investment (FDI) regulations in the real estate sector.
Courtesy:- ET dt:- 04-Mar-2010
|INVESTORS SPARED OF SPECIFIC NORMS
| In the past few years, FDI worth billions of dollars came in as overseas investors subscribed to equity and quasi-equity products — often with put options — sold by real estate firms which were starved of bank finance. But a chunk of this inflow was based on an interpretation that the three-year lock-in on the FDI applied only to the ‘original’ amount brought in and not the full quantum of FDI in a project. Many investors took advantage of this: an offshore fund which decided to put in, say, $25 million split the inflow, by first bringing in $5 million, the minimum amount, and then bringing in the balance $20 million subsequently. The understanding was that the lock-in applied only to $5 million and not $25 million. This flexibility in interpretation disappeared after the government clarified last year that the full amount, irrespective of whether the money comes in tranches, would be locked in for three years. The move, which came as a jolt to several foreign investors, paved the way for the more recent NCD route that’s catching on among local developers.
“There are advantages. First, there is no lock-in because the FII can sell the NCD as and when it wants. Second, the debt is secured against mortgage of assets, pledge of shares, etc. Third, unlike FDI, here the foreign investor can fund even those projects which are not FDI-compliant,” said a lawyer familiar with such debt-raising. For a project to receive foreign equity or FDI, it should not have less than 50,000 square meters of built-up area, among other things. “These conditions don’t come in the way when a foreign fund buys NCDs,” he said. Interestingly, such NCDs have also been issued by a leading NBFC which, like property firms, are restricted from tapping the ECB market.
According to a real estate fund manager, some foreign investors reluctant to increase their equity exposure post the downturn, prefer secured debts with a decent interest return. Sebi’s listing regulations extend to debentures that have been privately-placed; and, the NCDs can be listed even if the real estate company or a project specific special purpose vehicle floated by it is a private firm or an unlisted public entity.
Courtesy:- ET dt:- 04-Mar-2010
|DLF CONVERTS MUMBAI MALL PROJECT INTO RESIDENTIAL ONE
| DLF, the country’s largest realtor by market value, is planning to build a premium residential apartment complex at Worli in Mumbai instead of a high-end mall project, as demand for retail spaces has come down sharply, according to a company executive.
“We felt residential will do well here, and we will fix the price depending on market conditions,” he said. According to DLF website, the project is under “planning and development” under the high-end mall brand Emporio.
Rents of retail spaces are down by 25-30 per cent from their peak in 2007-08 as demand slowed. Though demand for office spaces have picked up slowly, property consultants expect lukewarm demand to continue for retail developments.
Worli, which was a former hub of textile mills, is witnessing modern office developments by realtors such as Indiabulls, Bombay Dyeing and Century Textiles, and residential apartments command a price of Rs 22,000 per sq ft and above.
DLF made news in 2005 when it bought a 17-acre Mumbai Textile Mill land from National Textile Corporation (NTC) for Rs 702 crore. The company at that time announced it would build a futuristic retail-cum-entertainment complex on the land.
The new project is expected to be launched in the next four-five months after taking all the necessary approvals, the executive said.
According to property consultants, the company changed the plan several times as real estate market went through a prolonged slowdown.
However, DLF is not alone which converted its mall project into a residential one. Host of others such as DB Realty in Dahisar area of Mumbai, West Pioneer in Kalyan near Mumbai and TTK group in Bangalore also changed their plans to build mall to apartment projects.
Apartment prices have raised 15-20 per cent since mid-2009 as home buyers returned to the market. Earlier, prices had declined by around 40 per cent as home buyers stayed away.
Buoyed by response for its apartment projects, DLF is expected to launch 8-10 new residential projects in the next one year, according to sources. DLF, which stalled some of its office projects during the slowdown, is planning to launch two-three commercial projects in Gurgaon and Hyderabad.
DLF today sold 1,200 units of independent floors in its Panchkula Valley housing project in Chandigarh within a week of its launch.
The units were priced between Rs 30 lakh to Rs 60 lakh. The company is aid to have made around Rs 500 crore from the sale of units. The company originally planned to launch 500 units, but later increased it to 1200 due to good response, a release from the company said. The project was launched on Feb 18, 2010.
The company, which had plans to book these units in 45 days till March 31, 2010, closed bookings within seven days of launch as the bookings crossed 1200 units within 15 days.
Courtesy:- BS dt:- 26-feb-2010
|US NEW HOME SALES FALL IN DEC FOR 2ND MONTH IN A ROW
| Sales of newly built US single-family homes fell unexpectedly in December, data showed on Wednesday, the latest indication that the government-led housing recovery might be losing some steam. The Commerce Department said sales fell 7.6% to a 342,000 unit annual rate from an upwardly revised 370,000 units in November. It was the second straight month that new home sales declined. US stock indexes fell on the data, while government bond prices held at higher levels.
“This isn’t good news. It should put some pressure on the market, especially coming after the disappointing outlooks we saw,” said Dan Cook, senior market analyst at IG Markets in Chicago. New home sales for the whole of 2009 fell 22.9% to a record low 374,000 units, the department said.
The data came as the Federal Reserve deliberated on monetary policy. The US central bank is expected to leave overnight lending rates near zero.
At its meeting in December, the Fed announced it would end purchases of agency mortgage-backed securities in March. The program has depressed mortgage rates, contributing to the housing market’s healing in recent months.
But the housing market recovery is showing some signs of fatigue after a surge in sales as first-time buyers rushed to take advantage of a popular tax credit, which had been scheduled to expire in November.
It has since been expanded and extended until June this year and while analysts expect home sales to pick up as a result, they reckon the pace will not be as strong as witnessed with the initial tax credit.
Courtesy:- ET dt:- 28-jan-2010
|CONSTRUCTION SERVICES TAX TO RAISE COST OF APARTMENTS
|The Budget proposals have thrown up a dampener for the housing industry. Construction services have now been brought under the ambit of the service tax in an unexpected move that would raise cost of apartments that are still under construction. As per the Budget proposal, the finance ministry has suggested that construction would be deemed to be a taxable service if the building or complex is still under construction and approval from the concerned regulatory authority — which in most cases is the resident municipal authority — hasn’t yet been granted. The levy would cover all construction of complex service or commercial or industrial construction services, the Finance Bill suggested.
The service tax levy would be 10.3% and would also apply to additional services such as those offering preferential locations for flats in multi-storey buildings where flats in each floor are priced at a premium due to their location. This too has been described as a service and hence taxable, according to the proposal which was tabled in Parliament on Friday by finance minister Pranab Mukherjee. The premium is typically levied on categories such as flats or apartments that are above a certain floor rise or have other high value locations such as being in front of a garden or a sea or any other preferred locality.
“The proposal is to tax construction if the entire payment for the flat is made before completion of construction,” said consulting firm RSM Astute executive director K H Viswanathan. “This would increase the cost of the apartment and may discourage potential buyers.” The service tax would be 10% on 33% of the price of the apartment, while on the remaining 67%, tax won’t be levied.
Till now, for all apartments under construction, customers paid in instalments based on plinth level construction and also on the progress in building activity. Banks too lent money to the customers according to the requirement of the builder. Now most developers would ask customers to pay the entire value of the building if they sought to lock in at a certain value. This would mean paying the entire sum before the construction. Typically, in cities such as Mumbai, where there is a pressure on space and hence apartments and flats are much sought after, customers booking for flats in an under-construction building, is very common. “The service tax and excise duty hike on cement would increase the overall cost of apartment by about 10%,” said Dharmesh Jain, managing director of Nirmal Lifestyles, a Mumbai-based developer. “It’s a negative step and we are considering to meet the finance minister to plead for a relook on this measure,” he added. But there are other positive measures that the Budget proposes such as allowing pending projects to be completed within a period of 5 years instead of 4 years, for claiming deduction of profits, as one time interim relief. There is also a suggestion that the commercial area included in a housing project would now be 3% of the aggregate built-up area of the housing project or 5,000 sq. ft, whichever is higher, compared to the existing limit of 2% and 2,000 sq.ft. respectively. This would help developers and real estate companies to make their projects more viable. Courtesy:- ET dt:- 01-march-2010
|SOME FORMS OF DEEMED TENANCY
|A tenant can continue holding possession even after the lease is determined
Deemed tenancy is a 'tenancy by holding over'. It is an implied tenancy. Under the Transfer of Property Act 1882, some circumstances lead to a tenancy by holding over.
When tenancy by holding over is created:
• The lessee or underlessee of the property remains in possession after the determination of the lease granted by the lessor
• The lessor or his legal representative either accepts rent from the lessee or underlessee, or otherwise assents to his continuing in possession
• There is no agreement to the contrary
The expression 'holding over' refers to retaining possession. There is a distinction between a tenant continuing in possession of a property after the determination of the lease, without the consent of the landlord, and a tenant doing so with the consent of the landlord. The former is called a tenant by sufferance. On the other hand, the latter is called a tenant holding over.
A lessee holding over with the consent of the lessor is in a better position than a mere tenant at will. The assent of the landlord to the continuance of the tenancy after the determination of the tenancy creates a new tenancy.
In such a case, the lease is renewed from year to year, or from month to month, according to the purpose for which the property is leased. For example, say A lets-out a house to B for three years. B underlets the house to C at a monthly rent of Rs 2,000. The three years expire, but C continues in possession of the house and pays the rent to A. So C's lease is renewed from month to month. Similarly, in case A lets his house to B for the life of C. If C dies, but B continues in possession with A's assent, then B's lease is renewed from year to year.
A statutory tenancy is distinct from a tenancy by holding over in the sense that the former is more specific. Most rent control acts recognize statutory tenancy - either expressly or by implication. In case a tenancy is given protection under a statute, it is called a statutory tenancy.
In case of a statutory tenancy, the rights of a tenant who retains possession by holding over is defined by the statute. All rent control acts recognize and afford protection to tenants against eviction despite termination of tenancy except on the grounds recognized by the acts.
Courtesy:- FT dt:- 29/11/2009
HOME LOAN RATES STABLE, SAY ANALYSTS
Vikas Agarwal outlines some significant factors that indicate stability in home loan interest rates
Home loan interest rates have come down quite significantly over the last one year as the Reserve Bank of India (RBI) cut the key policy rates (repo and reverse repo rates) and the cash reserve ratio (CRR). The RBI adopted a soft monetary policy by reducing its policy interest rates. The RBI adopted the soft interest rate regime to promote spending and stimulate economic activities, and prevent the economy from getting into a recession in line with the global economic conditions.
In general, the economic conditions have improved significantly over the last few quarters and the liquidity situation is good in the system. Many felt the home loan interest rates would start going up soon as the RBI exits from its soft monetary policy. However, analysts say the decision to tighten the policy depends on many factors and the RBI will act only after taking those factors into consideration. A premature exit from the soft monetary policy may lead to slowing down the pace of the economic growth. On the other hand, a delayed exit may result in a higher inflation rate in the economy.
Here are some significant factors that will drive the monetary policy stand in the near to medium terms:
Macroeconomic and financial parameters
The RBI has to balance the risks associated with inflation, fiscal consolidation and capital inflows. Its decision to continue or exit from the low interest rate regime depends on several factors associated with these risks. Analysts believe the RBI's policy largely depends on macroeconomic and financial market conditions.
Factors like strong aggregate demand conditions and a well-functioning domestic banking system will pave the way for a gradual exit from the soft monetary policy. Analysts believe the rates will remain stable for some more time. This policy will be in place till the various parameters give strong indications that a tightening will not hamper the economic recovery process and inflation will stay in control.
The Wholesale Price Index (WPI) based inflation rate is quoting at a low level. But it is rising at an alarming pace and analysts believe it will reach the six percent levels by the end of the current fiscal. A concern at the moment is the inflation rate in primary articles, especially in the food index. The inflation rate in the food index is reported in double digits at the moment.
However, analysts believe a tightening of the monetary policy will have little effect on food inflation as its cause lies in supply shortage. The debate around this indicates there are remote chances of an immediate increase in interest rates.
Credit off-take situation in home loan segment
The credit off-take for banks in the home loan segment had been low during the last few quarters. However, with the economic recovery and improved market conditions, the demand in the housing industry is picking up. Consumer sentiments have improved, and the festival offers and schemes floated by various banks increased demand. The home loan rates are expected to remain soft and stable in the near term as most of the leading banks have extended their festival offers for some more time to attract more borrowers and increase their credit off-take.
Due to globalisation and strong interdependence of economies, central banks have to consider the global factors before taking any policy decisions within the country. There is uncertainty on the global economic recovery front. The huge stimulus packages announced by central banks across the world have pushed up the inflation rate in many countries.
However, in the US, the inflation rate is still quite low and the Federal Reserve has recently reiterated that the soft interest rate regime will continue for an extended period of time. Given the overall global situation, the policymakers are taking a cautious stance before changing the monetary policy. Therefore, the interest rates are expected to remain stable and soft in the near term.
Courtesy:- FT dt:- 29/11/2009
|Unitech again approach to DIPP for fund raising
|The Second Largest Real Estate Company Unitech again approached to Govt. (DIPP) for approval for Real Estate fund raising
via FCCBs near about $700m (Rs. 3200 cr) in a single year third time.
Already in march of this year company raised $325m at price Rs 38.50
per share and in june Rs. 82 per share through External Commercial
borrowings (ECSs) which permitted by Govt in Jan 2009.
In jan 2009 the value of the Real Estate Company Unitech is one third of total debt
10,000/- cr and toady Real Estate Company Unitech shares closed at Rs 79.95, valuding the
firm at around Rs. 19,910 cr. At its peak, the firm was valued at
around Rs 87,370 cr.
|Parsvnath Developers Ltd
|Parsvnath Developers Ltd have recently performed ‘bhoomi pujan’ and announced the launch of Parsvnath City Saharanpur. The project, spread over 107 acres, will offer plotted development, independent floors and expandable villas at affordable rates starting from Rs9.5 lakh.
Parsvnath Developers Ltd, a real estate company, is doing multi-facet construction activities for over two decades. It has attained the status of one of the leading real estate companies of India. The company has transformed barren tracts of land into landscaped green belts housing world-class commercial, residential and recreational properties. With pan-India presence across 47 cities in 16 States, Parsvnath Developers Ltd has a diversified portfolio which includes Integrated Townships, Group Housing, Commercial Complexes, Hotels, IT Parks and SEZs. As on date, the company has 98 ongoing projects and a total developable area of over 193 million sq. ft. across all real estate verticles. Through the length and breadth of the country, Parsvnath group has successfully completed 37 projects. Today, Parsvnath with its high commitments has become synonym for perfection, innovation, customer satisfaction and transparency. They are an ISO 9001, 14001 and OHSAS 18001 certified company.
|THE VIEW’ (RAMPRASTHA GROUP)
|The View’ residential project has been launched by Ramprastha Group. ‘The View’ project is strategically located in Sector 37 D, Ramprastha City Gurgaon - a township spread over 45 acres of land. Other specifications of the ‘The View’ project are – 0-km from Dwarka Expressway & Metro Station, 15 minutes drive from IGI Airport, right opposite to Reliance SEZ, a premium residential experience of luxurious villas, group housing, penthouse, plotted row houses & town houses, complete with ultra modern amenities like school, hospital, hotel, shopping mall, multiplex, golf club, post office and a temple. ‘The View’ has a great planned infrastructure to boast of.
Ramprastha group is a renowned real estate company, operating in Delhi/NCR for almost four decades. The company has planned and developed many prestigious projects including townships, plotted housing colonies, and a large number of group housing dwelling units. This is the first construction company to foray into building of self-sufficient colonies. Ramprastha group, with its innovative construction techniques and unique craftsmanship, has set inimitable benchmark for its competitors. Ramprastha group’s vision is to create and promote developments that are forward looking, innovative and tailored for specific markets, to promote Ramprastha development - a good place to live, work and enjoy life, to optimize personal development of staff through quality training and establishing and maintaining the highest standards of professionalism and ethics.
|RBI tells banks to do a realty check
|Central Bank Ask Them To Guard Against Reators’ Exposure To Arms
NO CENTRAL bankers wants to repeat the mistakes of Alan Greenspan, the former US Fed chief, whose loose monetary policies are blamed for the subprime mess. With the first hint of a bubble in the local property market, the Reserve Bank of India has told banks to watch out for pitfalls while giving loans to builders.
In a communiqué to bank CEOs on Thursday, RBI has said, “It has been observed that some of the companies operating in the real estate sector have significant exposure in the form of advances, investment, etc to their subsidiaries and other group or related entities ….As a matter of prudence, banks may meticulously assess the inherent group risk of their borrowal account falling under the purview of real estate sector.”
Real estate firms, whose stocks have rebounded as property prices firmed up in key market like Mumbai, often lend to and invest in group companies – a practice that makes such loans risky for banks. These less credit – worthy group entities also raise money against guarantees from the parent firm or promoters, pledge of stocks and through structured deals with foreign investors who get the right to take over the company in the event of defaults.
But the regulator, according to one of India’s biggest builders, Niranjan Hiranandani, may be worried about certain isolated cases. “RBI is an efficient regulator. This circular addresses a particular problem rather than a general sectoral trend,” said the MD of Hiranandani Constructions.
Indeed, there have been cases where local banks have been kept in the dark about deals that the realtors have struck with foreign investors.
The RBI note comes at a point when banks have resumed lending after a year-long lull. New loans given by banks rose Rs 56,000 crore between July and September against a drop of Rs 7,400 crore from April to June. According to a city-based loan broker, a slice of this money has gone to property developers.but senior bankers think that lenders are doing the necessary due diligence. “This is just cautionary note from RBI. Most banks are already following this philosophy,” said Canara Bank chairman AC Mahajan.
RBI, widely perceived as one of the world’s most conservative central banks, has been apprehensive of property bubbles since the Asian meltdown of ’97. As property emerged as an asset class among Indian investors in recent years, RBI hiked the loan risk weightage for banks – a measure that required lenders to have more capital to give the same loan. It also tightened home loan margin norms, which led banks to cap the loan at 80% of the property value.
In the coming weeks, realtors will try to figure out the possible reasons that led RBI to issue the circular. “Since RBI has come out with a directive, industry bodies like NAREDCO and BAI would look to know the root cause behind it,” said Rajeev Talwar, group executive director of DLF. “Some banks,” Abhisheck Lodha, director, Lodha Developers, “may have a large exposure to a particular real estate group and this can expose the whole system to a big risk.” It’s evident that RBI is closely monitoring the stunning recovery by real estate companies, many of which are back from the brink. A year ago, these companies had forced mutual funds to rolls over bonds, made banks restructure loans and borrowed at as high as 25% interest to stay afloat. A few which had borrowed against stocks almost lost control of the company. Today, they are back in business.
The RBI note is specially aimed at the large firms. It says,”…while assessing the loan requirements of large builders/land developers, they(bank) may carefully analyse the financial credential/viability of the borrowers on a consolidated basis supported by the consolidated accounts/position of the group. They may also examine the financial credential/viability of the relevant unconsolidated related entities such as special purpose vehicles (SPVs)”
The RBI’s unstated concern may be the nature of deals that these SVPs have entered into. In the past five years, the Indian real estate sector has received around $20 billion in foreign direct investment, a chunk of which has come into multiple SPVs that builders floated to promote special projects. Tagged with this money, mostly in the form of quasi-debt, are tough conditions which local builders have to meet to avoid loan recall and litigations.
ET dtd: 25/09/09
|BANKS TOLD TO COME CLEAN ON RETAIL LOAN CHARGES, PRICING
|Home loan borrowers can now look forward to more transparent pricing from banks, with the Banking Codes and Standards Board of India (BCSBI) directing its member-banks to come clean on their lending policies and its other services upfront.
Henceforth, those who avail of floating rate home loans will have to be informed of the reference rate to which the floating rate is anchored. Bank will also have to disclose on their websites of changes in such reference rate as and when they take place on a real-time basis. This was indicated by KJ Udeshi, chairperson of BCSBI, a joint initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) while unveiling revision in banking codes on Tuesday.
The revised codes will be applicable to almost all major commercial banks in the country. These banks have been persuaded by the regulator to voluntarily accept the banking codes which force banks to announce minimum service standards. Banks will now have to come clean on charges and the pricing mechanism and they can’t charge anything more than what they have put out in public domain. If member banks do not follow publicly-announced policies, then the Board could intervene and ensure that they comply with the public announced policies, Ms Udeshi added. Speaking on the occasion, RBI deputy governor KC Chakrabarty said the codes would essentially help those vulnerable sections of the society who do not have any other platform for redressed. Going forward, customer services will assume more importance in regulation. “As a regulator, we have the responsibility towards customers,” he said.
The revised code has called for banks to bring greater transparency, further enhancements in systems in banking practices relating to customer service, a more responsive grievance redressed system in banks and provide additional protection to customers.
Banks will also have to explain the provisions of the Income Tax Act, applicable to interest income and obtain form 15G/H at the time of opening a term deposit account, besides not insisting on insisting on an insurance cover for securities lodged. The banks are also directed to dispose customer complaints in 30 days, among other things. Banks now have to come out with the most important terms and conditions (MITC) for credit cards and loans that are more simple and concise.
Customers can now refer to banks’ websites for policies relating to cheque collection, compensation, collection of dues and grievance redressed. BCSBI will also start its credit counseling services from its premises at Bandra-Kurla Complex in Mumbai, from October 1, 2009. The services will be free of cost to any retail borrower and micro and small enterprise customers of member banks. However, the cases of willful defaulters will not be pursued by the Board.
Courtesy:- ET dt:- 23-09-09
|LUXURIOUS APARTMENTS AT EAST OF DELHI
|Max City Developers brings to you state of-the-art architectural and engineering excellence called "Park Sapphire". Strategically located, just 2 km east of Delhi (Anand Vihar) in an integrated township spread over 100 acres of Ramprastha Greens in the very heart of Vaishali, the project has three high-rise 15-storey towers with luxurious two and three bedroom apartments and penthouses. The construction is in full swing with December 2010 the project completion time.
Courtesy:- HT Estates dt:- 19-09-09
|HI-TECH TOWNSHIP IN LUCKNOW
|Omaxe Ltd. will develop a hi-tech township spread over 2700 acres (approx) in the heart of Uttar Pradesh in Lucknow. Garv Buildtech Private Ltd, a subsidiary of Omaxe, has signed a Memorandum of Understanding with Lucknow Development Authority to develop the Hi-tech Township in Lucknow.
The Hi-tech Township will be executed over a period of five-seven years. It will cater to the growing demand of quality living space in the city. The township is strategically located on the proposed Lucknow Ring Road, close to Lucknow Airport and an half-an-hour's drive from Hazratganj, center of Lucknow city.
Courtesy:- HT Estates dt:- 19-09-09
|BEST TIME TO GO HOME SHOPPING
|INFLATION UP RBI MAY ALLOW HOME INTEREST RATES TO BE RAISED LATER
|If you are planning to buy a house, now is the time. Do it now, because a rise in interest rates might not be too far away.
Ending a 13-week streak of contraction, the wholesale prices based inflation rate returned to the positive zone in figures relating to the week ending September 5, triggering speculation about when the Reserve Bank of India (RBI) would announce a rise in lending rates.
Inflation measured by the wholesale price index (WPI) rose by 0.12 per cent for the week.
It had fallen by 0.12 per cent in the previous week.
The RBI faces the dilemma of containing prices without making loans costlier for individuals and corporations in an uncertain economy.
One way to contain inflation is to reduce the amount of money circulating in the economy.
The RBI usually does this either by sucking out liquidity from banks by raising the cash reserve ratio (CRR, or the percentage of deposits commercial banks have to park with the RBI) or by raising interest rates and reducing demand for money.
A rise in interest rates could upset plans of realty firms as people defer plans to buy homes.
"Borrowing rates may go up in three months' time and that may result in a rise in lending rates," said R.R. Nair, CEO, and LIC Housing Finance.
The government said the rise in inflation rate was not unexpected. "This is a trend we were expecting," finance minister Pranab Mukherjee told reporters.
Courtesy:- HT dt:- 18-09-09
|EMERALD ESTATE GURGAON
|MGF Development Limited of India and Emaar Properties, a Public Joint Stock Company (PJSC) of Dubai have made a joint venture and have developed a company in the name of ‘Emaar MGF Land Limited’ to make it one of India’s leading real estate company. Emaar MGF Land Limited started real estate activities in India in 2005. Emaar MGF has developed many projects in residential, commercial and hospitality sector across lengths and breadths of the country. Company’s vision is to be India’s leading and most admired real estate company. Their mission is to develop and deliver unique lifestyle and work place environments in India through world-class quality, integrated infrastructure and master-planned development.
‘Emerald Estate’ project is being developed by Emaar MGF Land Limited in Sector 65 Urban Estate Gurgaon. The project is ideally located in proximity of National Capital. Emerald Estate Gurgaon is a part of the larger master planned gated community of Emerald Hills, Emerald Estate, a 25-acre mid-rise group-housing development. In the project area, clean crisp air, clubhouse, state-of-the-art security, centralized piped cooking gas system, wide internal roads and shopping make it a great place to live in.
|COS WITH LAND BANK TURNING REALTORS
|Upsurge In Real Estate Sector Prompts Bombay Dyeing, Century Textiles & Golden Tobacco To Develop Property
The revival of fortunes in the real estate sector has encouraged textile companies with huge land banks to foray into property development. Among such companies are textiles major Bombay Dyeing and Century Textiles. To date, most of the textile firms sold their land to developers.
Golden Tobacco, manufacturer of the Panama and Chancellor Cigarette brands, is also mulling to have its real estate arm to utilize its land assets across the country.
Earlier, groups like Tata, Mahindra and Godrej also entered the realty space. The Tata group has Tata Housing and Tata Realty while Mahindra’s venture is called Mahindra Life space Developers. Godrej’s venture goes by the name of Godrej Properties.
Nusli Wadia, Bombay Dyeing’s chairman, at the recent annual general meeting (AGM) said the progress on the real estate business was encouraging. Later, he told ET, “We have a land bank of 64 acres in Mumbai and we will develop this in a phased manner. The plan is to develop the land ourselves without involving a developer. We do not intend putting our land on the block.” Bombay Dyeing’s property is situated in central Mumbai. The real estate business for the company clocked revenues of over Rs 250 crore for FY 09. Apartments have been developed in Worli and Lower Parel.
Bombay Dyeing does not have a separate company in place for the realty foray. The company spokesperson declined to comment on the possibility of floating a real estate company.
BK Birla Group’s Century Textiles, which has a land bank of around 20 acres in Worli, will be the other company to enter the real estate space. “The company is considering real estate development and there could be some concrete development in the next couple of months,” said Century Textiles president RK Dalmia.
Meanwhile, Golden Tobacco, a Sanjay Dalmia group company, is also mulling the option of having a separate real estate arm. The company has land in many parts of India. Its 7.5-acre property in Mumbai was intended to be developed with a real estate company. However, it is learnt that Golden Tobacco will now go alone on this project. “We are looking to optimize our real estate resources and would do the needful in that regard,” said the company’s spokesperson.
Said Amber Maheshwari, director, investments, DTZ, an international property consultant, “The sector is looking better by the day and it is a good thing that corporates are venturing into it. This would not only improve the domestic framework but also bring in some good corporate governance practices. There will be more supply of land.” It is estimated that if the plans of these companies fructify, land worth $1.5 billion will come in as fresh supply.
Courtesy:- ET dt:- 16-09-09
|Bhumi Pujan by KLJ Town Planners in Bahadurgarh (Haryana)
KLJ Town Planners has performed a ‘bhumi pujan’ for their group housing project – KLJ Heights – in Bahadurgarh. Within the first phase of the group housing project, the company proposes to develop 300 flats each in the two and three bedroom category.
KLJ Group was founded by Shri K L Jain long back in 1968. KLJ Group is now the upcoming leader in construction/real estate sector having completed number of projects. The company is striving ahead to give its consumers better commercial and corporate space with world-class standards. They are in the process of developing Integrated Townships/Group Housing projects at Faridabad and Bahadurgarh (Haryana) and IT Park at the most prime location in Gurgaon and Greater Noida.
The vision of KLJ Group is to contribute significantly to building the new India and become most valuable realtor. The company has developed an impeccable goodwill and enjoys leadership in India in real estate sector.
Their other upcoming projects of KLJ Group are – La Vista, Sector 77, Faridabad and KLJ NTWork City, Greater Noida
Their completed projects are – KLJ Tower North Delhi, Park Centra Gurgaon, Shop’in Park North Delhi, Centra Square Noida, Shop’in Park CBD (Central Business District) East Delhi.
We, Shri Aditya Estate, are one of the leading real estate consultants, established in Delhi and working successfully for more than a decade. We have developed well-embellished websites viz. www.zameen-zaidad.com, www.propertycafeteria.com with a clear concept to showcase all kinds of properties of our patrons for wider publicity of their products for sale/purchase, leasing and renting purposes.
Our website – www.zameen-zaidad.com - is displaying the details of almost all the projects of KLJ Town Planners.
Homes for sale are available in the above-said projects. For best and transparent deals for apartments in various projects of KLJ Town Planners, our experienced marketing executives can be contacted at mob no 91-9650398921, 9810445860, 9911158601, 011+91-11-40014001 or email at : firstname.lastname@example.org.
Our company is on the approved list of leading banks/financial institutions for grant of home loans. We have got an experienced team to process home loan applications. For hassle-free home loans for various projects of KLJ Town Planners our executives can be contacted at mobile no 91-9990217028, 9810445860, 011-47082736 or email at : email@example.com.
|REAL ESTATE REVIVAL STORY BEING SCRIPTED BY INVESTORS: ANALYSTS
|The real estate revival story is being driven by the residential segment, but contrary to the claims made by a number of developers that end-users are their main buyers, the current trend is being driven by investors.
“These are investors who are taking an opportunistic view of the situation where prices have corrected considerably in many locations,” says Sanjay Dutt, CEO business at Jones Lang LaSalle Meghraj (JLLM). He estimates that a good 40% of the stock sold in the last few months would have gone to investors. In Delhi-NCR, this figure might be higher at 50%.
“Investors are back in good numbers and before the curve goes up, they want to buy. Some who have bought are already hoping to book profits during this Diwali,” he adds. This could be a precursor to further improvement in investor sentiments, since investors would take this as a sign to look towards a sustainable run in the future.
Investors took flight from the residential real estate market when the market crashed last year and many have been shy of venturing back. The last few months though have seen a number of affordable launches at price points, which have stimulated the market. Most developers have launched mid-income housing in the Rs 20-40 lakh range, which has created a movement.
While the short-term investor is there, interestingly, a good number of the investors are medium to long-term investors. “These investors are flocking to real estate because of the lack of other investment opportunities in the market at the moment,” says Ajit Krishnan, partner, real estate practice at audit firm Ernst and Young who feels the trigger for these investors was the drop in price points in the residential segment in the last eight months.
These investors are not purely speculative and are investing in real estate as a shelter against inflation, he says. Other investment opportunities today do not yield the same results.
Developers on their part are insisting that a majority of the buyers in their projects are end-users. As there is no set way to differentiate investors from end-users, Unitech looks at consumer behaviour to judge one from the other. “Investors usually are not too bothered about specification details, do not go for site visits too often. We have not seen such behaviour at our projects. It appears that a large majority are end-users,” says R Nagaraju, general manager of corporate planning at Unitech.
Wherever prices have been brought down to attract customers, there have been investors but Aditi Vijayakar, executive director, residential services at Cushman & Wakefield says these investors are mostly long term. “These investors are using this decline in the market to buy another property which they can decide on selling after the project is delivered,” she adds.
Alongside investors are endusers who are mainly interested in completed homes. “The question is of consumption. We are definitely seeing movement in completed properties which are being picked up end-users,” explains Krishnan.
Prices in the residential market in NCR-Delhi and Mumbai have started to climb up in the last months or so and Vijayakar warns that it is a little too early to raise prices. “In the medium term, it will not be sustainable for developers,” she says. There is a concern that the few end-users who have started to show interest might be deterred from making purchases if the prices of homes keeps rising.
Courtesy:- ET dt:- 08-09-2009
|DLF NEW PARTNER OF MOTHERCARE
|UK Retailer Forms 51:49 JV With Indian Realty Co, Present Franchise Deal With Shoppers Stop To Coexist
Mother care, a UK retailer for kids and expectant mothers, is forming a 51:49 joint venture with India’s largest real estate company DLF, two people close to the development said.
While the company would continue its existing franchise agreement with department store chain Shoppers Stop, it hopes that the new JV will give it greater control over its Indian operations and ability to expand quickly in one of the fastest growing economies, they said requesting anonymity.
Both DLF and Mothercare refused to confirm the developments brushing it off as “market speculation”.
Mothercare spokeswoman Catriona McDermott said in a statement that the company was committed to its ongoing expansion in the Indian market. She said the company has 21 stores in affiliation with Shoppers Stop, which will remain a Mothercare franchisee in India.
“Shoppers Stop continues to be a valuable partner in Mothercare’s ongoing Indian strategy,” she said.
The UK retailer had been in discussions with DLF and Tata group retailer Trent for a possible equity partnership in India.
In the past, many foreign retailers, who nurtured a long-term view on India, have shunned the franchise route to form JVs with Indian partners. Last year, UK’s largest apparel retailer Marks & Spencer entered into a joint venture with Reliance Retail ending its franchise agreement with Planet Retail. Indian laws make it compulsory for a foreign retailer selling a single brand to take on Indian partner as the former can’t own more than 51% equity in a retail business. Foreign investment is still not allowed in companies that sell more than one brand.
A JV in India traces Mothercare’s recent move in China, which saw it breaking from its tradition of growing overseas only by franchising to local organisations. It has formed a joint venture with local partner Goodbaby in China.
“We envisage that we may engage in more joint ventures in future, though we will remain mindful of political, cultural and economic risks which attend international investment,” chairman Ian R Peacock said in the latest annual report, talking about China joint venture.
The UK retailer, which has 1,014 stores in 50 countries, including 609 stores outside the UK, sees the international market as “the biggest single growth opportunity”, as per its annual report. Mothercare reported an International retail sales growth of 41%, as against 6.9% overall sales growth for FY09 to £723 million. Similarly, international same store sales were up 6%, as against UK’s 1.4% for FY09.
A joint venture with Mothercare further diversifies DLF’s portfolio of brands, which already has Giorgio Armani, Dolce & Gabbana, Salvatore Ferragamao, Sunglass Hut and Sia Home. The realty firm, which has been partnering foreign retailers—usually as junior ally—aims to have a stream of clients for its malls through these tie-ups.
A typical standalone store of Mothercare in India is 3,000-6,000 sqft, while a shop-in-shop is 1,800-2,000 sqft. The retailer offers a range of products, including clothing, hardware and toys in India for mothers-to-be, infants and pre-school kids and sources over 70% of products sold in the country from global vendors.
Courtesy:- Et dt:- 08-09-2009
|REAL ESTATE SECTOR - SIGNS OF RECOVERY
Lower home loan rates, property price cuts, apartment downsizing and a recovery in the job market have helped to increase demand for residential projects. On showing interests by buyers, developers and builders have launched many new affordable projects across the cities. During early period of this year, interest in properties were being shown by business class and professionals whereas service class was not showing any interest owing to risk of job layoffs. Now on diminishing the risk of job layoffs, service class has also started showing interest in properties. Low property price is another aspect which has attracted the service class to real estate sector leading to a strong revival in demand for residential apartments.
With the return of liquidity to the real estate sector in form of FDI (Foreign Direct Investment), QIPs and bank loans in recent months, the financial position of realty players has started improving. Motivated by this, the developers and builders have started launching new affordable apartments to boost the real estate sector.
RBI has relaxed certain norms for realty companies. Loans granted by banks to housing finance companies for further lending to individuals for purchase/construction of dwelling units, may be classified under the priority sector if the loan amount granted is less than Rs 20 lakh. Priority sector lending attracting lower rate of interest will boost real estate sector.
Price reduction by 20-40% depending on project location and reduction in apartment size have brought a greater section of buyers into the fold. The increasing demand has induced many builders and developers to launch many new projects. The new launch tally is on increase. Downsizing apartments has reduced the cost of dwelling units by 50% enabling a lower segment of society to select a house at a better location or at the same location but at a lower cost. Cheaper home loans have further attracted more and more home buyers.
All these aspects have shown signs of recovery in real estate sector.
|THE REIT WAY
|Are Indian REITs ready to make a mark or are they losing business to those from overseas markets? Kamlesh Pandya analyses
In a scenario where real estate is becoming out of reach for small investors, to invest and reap profits, real estate investment trusts (REITs) are a good way for the investor class to invest in the sector. It also benefits developers, as more funds are pumped into real estate. REITs/REMFs offer an innovative option for investors to buy and trade shares in the real estate sector and collect dividends from capital appreciation and rental incomes, explains Atul Modak, head, Kohinoor City Project.
REITs are generally classified into three broad categories - equity REITs, mortgage REITs and hybrid REITs. "The best benefit of REITs is fast and easy liquidation of investments in the real estate market, unlike the traditional way of disposing real estate," he explains. However, it is important to have proper regulation and utilisation of these funds and total transparency in the whole process. For REITs to be a success and contribute to the growth of the economy, initial tax sops to the investors and REITs will be helpful, he feels.
REITs in the Indian scenario, are yet to take off, says Ashok Kumar, principal and managing director, CresaPartners India. "Certainly, we are losing out on such opportunities to overseas REITs, as it does not seem to be a priority for the government," he regrets. The real estate sector in India is still complex and the regulators have to fix a lot of policies and valuation issues, in advance, for REITs to become functional, he adds. "If one considers the union budget 2009-10, there was no mention about FDI in real estate or REITs and REMFs. However, we hope that the FM will announce some relief for the sector, post the budget," adds Kumar.
Realtor Bharat Mailk points to a paper, 'Indian REITs: Are We Prepared', by the ASSOCHAM and CRISIL and says that REITs in India would have the potential to hold at least five per cent share of the total global real estate market, by 2010. The size of this global market would touch US $ 1,400 billion, according to the paper. "According to the paper, by 2010, REITs alone would hold a market size of US $ 70 billion of the total real estate market, as the concept is gaining ground in countries like India and other developing nations," he says, laying out the statistics. In the Indian context, REITs can help provide an exit route for developers, to revolve funds more efficiently. It will also provide opportunities to retail investors to participate in the real estate sector and provide asset diversification to corporate investors, besides building a vibrant secondary real estate market, adds Malik.
REMFs are the Indian version of the international REITs, adapted to the Indian mutual funds platform, explains Shobhit Agarwal, joint MD (capital markets), Jones Lang LaSalle Meghraj. "In the current context, while everybody is now working on entry and creating assets, the important question of who will buy these assets to provide an exit to the developers / investors needs to be addressed,'' he points out. The leveraging allowed in the case of Indian REITs is the lowest (at 20 per cent of the value), compared to 35 per cent in the case of Malaysia, Hong Kong, Singapore, and Taiwan and 200 per cent in the case of Korea. This could result in a lower yield and because it is not really leveraged, the risk taken is also more," he cautions.
Mihir Dhruva, CEO of Siddharth Group is of the opinion that REITs should be more preferred by the 'low-risk, low-return' investor segment. "Sentiments, which contributed significantly to the depressed market in FY 08-09 are now reversing," says Dhruva. "This has been reflected in reports coming from different cities, showing revival of real estate transactions and REITs should have a positive response as a result," he concludes.
Courtesy:- ET dt:- 31-08-09
|REALTY TRIES TO PUT DOWNTURN TO BED WITH 10-15% HIKE IN PRICES
|Developers Jack Up Prices In Mumbai & NCR; Move Likely To Dampen Demand
With residential property buyers gradually returning to the market, especially in key regions like New Delhi-NCR (National Capital Region) and Mumbai, realty prices in these areas have moved up 10-15%. While some developers have increased prices across projects, others are doing it on a project-specific basis.
Industry trackers say the hike in prices could result in demand moving southwards. Realty fund Kotak Investment Advisors’ director, Vikas Chimakurthy, said, “There was a substantial demand, especially in the mature markets, after prices dropped a few months ago. Today, potential customers are not willing to buy properties at these (higher) prices.”Developers, meanwhile, confirmed the decision to hike prices. “We have increased prices across all our properties by 10%. It is not much and is the result of the improved market conditions,” said Abhishek Lodha, director, Lodha Developers, a Mumbai-based company that has projects in and around the city.
Delhi, like Mumbai, is witnessing a hike in prices of realty projects. DLF, the country’s largest real estate company by market capitalisation, is one of those whose properties will be dearer. “Yes, there has been a price increase though it is still limited to some projects nearing completion,” said DLF executive director Rajeev Talwar.
How long these prices will hold out is hard to determine. “Mumbai and some parts of New Delhi have been witnessing some rise in price and it will be interesting to see if these prices are sustainable. In other markets like Bangalore, supply still exceeds demand,” said real estate consultant Saffron Asset Advisors managing director Ajoy Veer Kapoor.
As realty gets pricier, there has been concern among buyers about whether this is purely on account of the economic scene improving or due to builders reaching an understanding among themselves. Though prices have not reached the 2007 levels, the hike has been enough to make buyers think twice. “We are still a while away from the 2007 levels, which could take two more years. In our case, we have increased prices by around 5% for our projects and are hopeful of a recovery by the end of this year,” said Hiranandani Constructions managing director Niranjan Hiranandani.
Courtesy:- ET dt:- 03-09-09
|ICICI CUTS HOME LOAN RATES TO REMAIN COMPETITIVE
|Joining the battle being fought in the market for mortgages, India's second-largest lender, ICICI Bank, has cut rates for home loans from August 20.
Accordingly, the rate for home loans up to Rs 20 lakh will now be 8.75 per cent, while loans between Rs 20-50 lakh will be charged 9.25 per cent. For loans above Rs 50 lakh, the rate has been fixed at 9.75 per cent. Earlier, loans below Rs 30 lakh were charged 9.25 per cent while the rate for loans above Rs 30 lakh was 9.75 per cent.
The battle in the home-loan market was sparked by the country's largest lender, State Bank of India (SBI), which announced a competitive package early this month. Now, loans from SBI are available for 8 per cent for the first year and 8-9 per cent for the next two years depending on the size of the scheme.
Two weeks ago, India's largest mortgage lender, Housing Development and Finance Corporation (HDFC), reworked its interest rate slabs, resulting in a 50 basis points (bps) cut to 9 per cent for loans of Rs 30-50 lakh. In mid-July, HDFC had cut interest rates on loans of up to Rs 15 lakh by 50 basis points to 8.75 per cent.
The last mortgage player to cut home-loan rates was LIC Housing Finance. The country's second-largest mortgage player cut floating rates by 50 bps from 9.25 per cent to 8.75 per cent for loans of Rs 30-75 lakh.
ICICI Bank, which has seen high losses on its unsecured loans portfolio, has indicated that it wants to continue growing its mortgage and auto loans portfolios.
As of June 30, 2009, the lender's outstanding housing loans portfolio was Rs 53,472 crore.
Courtesy:- BS dt:- 28-08-09
|HOUSING AFFORDABILITY MORE ACCESSIBLE
|Housing units, now available at affordable price, have become more accessible for middle income group people across seven cities in the country. The fall in interest rates for home loans in the last eight months, has given momentum to Housing Affordability. During the period, interest rates on home loans upto Rs30 lakh have come down by three percentage points from 12% to 9%. This has improved the capacity of the borrowers. For instance, at 12% the EMI on Rs10 lakh loan to be repaid in 20 years is Rs11,010/- whereas with interest rate at 9%, a person can borrow Rs12.30 lakh with the same EMI. This means, now he can buy a house with 20% higher value than what he could have done in 2008.
Since January 2009, prices of residential units have fallen by 30%. This has brought housing within the reach of large number of buyers.
It is expected that total housing requirement in affordable section across seven cities – Mumbai, National Capital Region (NCR), Channai, Bangalore, Hyderabad, Kolkatta and Pune – will be approximately 2.06 million dwelling units by 2011. The group earning Rs3 lakh to Rs6 lakh would drive this demand.
As per the Housing Development Finance Corporation (HDFC), the maximum affordability of a household has been computed to be 5.1 times its annual income. In other words, for a household earning Rs3 lakh a year, an affordable house should cost Rs15 lakh. In the NCR, the average budget of buyers varies between Rs19 lakh to Rs31 lakh.
Keeping in mind factors influencing choice of location, buyers in the NCR prefer Noida, Ghaziabad and Gurgaon.
Affordable housing has helped the builders and developers to come out of their liquidity crunch as affordable dwelling units are attracting much demand in the market.
|BPTP MULLS PUBLIC OFFER
|Delhi-Based privately held realty firm BPTP, which shot into limelight last year after winning the bid for the country’s largest-ever land deal in Noida and slid into a financial mess thereafter, says it has seen off the financial troubles but remains cautious on growth. The company intends to raise funds through an initial public offer (IPO), but has not decided on the timing or the amount to be raised, a senior executive said.
“We are out of this mess (Noida land deal). Home sales have picked up and we have received bookings for around 5,500 homes,” said BPTP director Sudhanshu Tripathi, explaining how things were improving at the firm.
In March 2008, BPTP placed a big bet by outbidding realty giant DLF to win the Rs 5,000-crore land deal in a government auction. The property market went into a slump soon after the land deal. To add to the company’s woes, one of the financial investors — Citi Property Investors (CPI) — reduced its commitment of $160 million in BPTP’s special economic zones (SEZs) to just $100 million. This was in line with many other private equity deals that either got scrapped or scaled down in the downturn.
Eventually, BPTP acquired only a part of the land (23 acres of the total 95 acre) that it won in the auction. It shelled out Rs 1,300 crore for the transaction, half of which was raised through stake sale to J P Morgan and Citi Property Investors and rest came from promoter Kabul Chawla.
BPTP, which claims to have a landbank of over 2,000 acres in the national capital region, may soon revive its plans to raise capital and give exit route to its foreign stakeholders Citi Property Investors and JP Morgan, which together hold close to 9% in the company. “We will contemplate an IPO in 2-3 months to raise funds for our growth. But right now we haven’t charted a growth plan. We still remain cautious,” Mr Tripathi says.
Courtesy:- ET dt:- 27-08-09
|U.S. HOUSING, DATA SHOW SEEDS OF RECOVERY
|Larger-than-expected improvements in U.S. housing prices and consumer confidence on Tuesday lent new weight to signs the economy is emerging from the longest and deepest recession since the 1930s.
U.S. home prices rose for the second month in a row in June, according to a closely watched S&P index, and consumer confidence jumped in August.
In addition, President Barack Obama nominated Ben Bernanke to a second term as chairman of the Federal Reserve, removing some niggling doubt from investors' minds as the decision promised a consistent approach to monetary policy in the years ahead.
The developments helped buffer the blow of projections for the U.S. budget deficit to reach its highest level in 2009, relative to the total economy, since World War II. "The recession appears to be over, with consumer attitudes lagging behind broad economic developments," said Steven Wood, chief economist at Insight Economics in Danville, California.
Major U.S. equities indexes climbed to new 2009 highs on the day's events, while bond prices fell as signs of a resurgent economy reduced interest in safer investments.
The Conference Board, an industry group, said consumer confidence climbed to a reading of 54.1 in August from 47.4 in July, handily outpacing forecasts, on an improved outlook for the job market and the overall economy.
The rise sent the index to its highest level since May. Still, some analysts warned not to get carried away. "Confidence remains well below its historical average of 95 and it has not even regained the level of 61 seen before the collapse of Lehman almost a year ago," said Paul Dales, U.S. economist at Capital Economics in Toronto.
The weak labor market remains a sticking point to recovery, and especially a revival in consumer spending. Even the Fed has conceded the likelihood of a "jobless recovery," with the unemployment rate staying high long after growth resumes.
Americans saying that jobs were "hard to get" in August dropped to 45.1 percent from 48.5 percent but those saying jobs were plentiful were just 4.2 percent.
"Most of the strength was in the 'expectations' component, so it looks like even though the near-term conditions are still a bit rocky, there is hope for the future," said Kim Rupert, managing director, global fixed income analysis, Action Economics LLC in San Francisco
Other data supporting recovery hopes came from the Standard & Poor's/Case-Shiller index, with prices of U.S. single family homes rising by 1.4 percent in June from May, after creeping up by 0.5 percent in April.
The data gave fresh evidence that the three-year housing slump is finally easing. The housing market is considered a critical component to a broad economic recovery.
Courtesy:- BS dt:- 26-08-09
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Courtesy:- HT dt:- 23-08-09
|After successful phase 1, co to build 350 low-cost houses in kundli
Delhi-based realty firm TDI is planning to invest Rs 1,000 crore to build lowerpriced homes in the national capital region in the next three years, a senior company executive said.
“The demand for homes is coming back slowly,” said TDI managing director Kamal Taneja, adding that the company was focusing on lower priced homes to attract buyers. TDI, which has its real estate projects spread over Delhi, Kundli and Panipat in Haryana and Mohali in Punjab, recently launched 350 residential units in Kundli and claims to have sold all of it in just a month. The company is now planning to launch another 350 homes over the weekend in Kundli, around 35 kms from central Delhi. The 900-sqft independent floor homes will be priced between Rs 16.50-19.50 lakh. The company will invest around Rs 1,000 crore to build a total of 700 homes in Kundli over the next three years, Mr Taneja said.
TDI has tied up with architectural firms Drew Dickson Associates of Australia and HO Partners of Hong Kong for development of its 1600-acre Kundli township. Following a revival in the capital market, many listed real estate companies, including Unitech, HDIL and Sobha, have raised funds via QIP, while some other unlisted firms such as Lodha Developers and Emaar MGF, are lining up their initial share sale. But Mr Taneja says the market is still volatile and an IPO is not on the cards for TDI immediately.
He says his company is relatively less leveraged and doesn’t intend to go in for any private equity deals either immediately and would focus on selling homes to raise cash. “There is very little private equity money available and there are too many developers chasing it. Also, private equity investments made these days are actually debt structured as equity,” he says, explaining why he is not excited about getting PE fund infusion in his company.
Courtesy:- ET dt:- 21/08/2009
SAHARA PRIME CITY PLANS TO RAISE RS 5,000 CR IN IPO
Sahara group’s realty arm Sahara Prime City is planning to raise up to Rs 5,000 crore by this year-end through an initial public offer (IPO) and will approach market regulator SEBI later this month in this regard.
The company is believed to have engaged investment bankers, including Kotak, Enam and JM Financial, for the public issue, market sources said.
The draft prospectus for the IPO is being readied and the same could be filed with the Securities and Exchange Board of India by the end of this month.
No comments could be obtained from the Sahara group spokesperson, but sources said the group would wish to launch the IPO by the end of this year, subject to Sebi approval.
Sahara Prime City will be the third Sahara group entity to enter the capital market after Sahara Housingfina Corp Ltd and Sahara One Media and Entertainment Ltd. It is present in over 200 cities with its housing and commercial projects. However, the group’s ambitious Ambey Valley project is not part of the company
Courtesy:- BS dt:- 21-08-09
| DLF BAGS GURGAON LAND FOR RS 1,750 CR
DLF, the country’s largest realty firm, today bagged a 350-acre plot for Rs 1,750 crore in Haryana for developing a recreation and leisure project, making it one of the costliest land deals in recent times.
“The letter of acceptance has been issued to the successful bidder (DLF) after getting the approval from the state government,” Haryana State Industrial & Infrastructure Development Corporation Ltd (HSIIDC) Deputy General Manager Priya Sardana said.
Earlier this week, DLF emerged as the sole bidder for the 350-acre project after the bids of other parties — Unitech and Malaysia-based Consortium comprising Country Heights, Country Club of South Africa and Rajarhat IT Park — did not qualify on technical grounds.
The qualified bidder, DLF, had quoted its bid at Rs 12,000 per sq mt against the reserve price of Rs 11,978 per sq mt for the project.
Earlier, BPTP had bagged a 95-acre plot in Noida for Rs 5,006 crore in 2008, but later surrendered because of inability to arrange funds for the payment.
DLF had acquired 38 acres in the heart of Delhi for Rs 1,675 crore. Unitech had bagged 1,750 acres in Vizag for Rs 3,350 crore, while the company won 340 acres in Noida at Rs 1,582 crore in 2006.
HSIIDC had invited competitive bids in January this year for allotment of 350 acres of prime land on freehold basis, at village Wazirabad in Gurgaon, for setting up of a recreation and leisure project comprising commercial and residential buildings and golf courses.
The corporation reinvited the bids after the sole bidder at that time — DLF — pointed out certain difficulties in project implementation.
In the second round of bidding, Unitech was disqualified as its partner was found ineligible for developing the project, while the bid of the third party did not qualify as the net worth of the Malaysia-based company Country Heights was less than the required amount of Rs 500 crore.
Courtesy:- BS dt:- 21-08-09
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