Monthly Archives: March 2012

As per a Survey, Bangalore is costliest Indian city to live in.

March 31, 2012 – 3:58 pm

Glitzy tech capital Bangalore just earned a new sobriquet, the costliest Indian city. An analysis of the Reserve Bank of India’s Consumer Price Index (CPI) shows that Bangalore is a couple of notches higher than the all-India cost-of-living average, with financial capital Mumbai just a shade behind.

The CPI is a measure of a standard basket of items, including food, clothing and transport, across cities. In the price race, Delhi is comfortably placed very low in the table, deriving its cushion from the subsidies galore it receives from the Centre. Take, for instance, LPG cylinders, which is a must-have in middle-class families.

According to Bharat Petroleum’s latest figures, Bangalore currently pays Rs 415 for a 14.5-kg refill, Kolkata Rs 405, Mumbai Rs 402 (expected to go up after budget), Delhi Rs 399 and Chennai Rs 393.50. Bangalore’s CPI peaks in the national chart at a whopping 200, followed closely by Mumbai at 199, Kolkata 184 and Delhi a distant 181. The national CPI average is 198.

For homemakers like Koramangala resident Aditi Rao, life in Bangalore is becoming tougher with each passing day. “Frequent hikes in the prices of basic items put our home budget out of sync every month,” said Rao, 34.

Budget analyst Ravi Duggal, who has lived in Mumbai and Delhi, observed that the high cost of living in Bangalore has come about as a result of the IT industry. He said there were different reasons for differential living costs among cities, including the aspiration of people. Talking of India’s two leading cities, he said, “Where education is concerned, for instance, Delhi has more public education facilities than Mumbai.”

What makes Mumbai equally expensive? “There are many factors, the chief being high rentals. Over 40% of the salary of an average Mumbaikar goes into paying rent,” pointed out economist Vibhuti Patel of SNDT University.

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This Navaratra Buyers are back in Realty Sector.

March 31, 2012 – 3:57 pm

There is flurry of activity in the offices of realty firms as buyers are coming out to seal deals. The mood is likely to remain upbeat till the end of summer vacation of schools.

Buyers are back in the realty market this Navaratra, lending credence to this festive season’s reputation as a golden period for business in this sector.

“I am sure that this positive momentum in the market will continue till summer vacation when even more end users are likely to clinch deals,” Samir Jasuja, the chairman and managing director of Prop Equity, says.

“After Navaratra, summer vacation in schools is regarded a good time for realty, as people wait for the end of term of their children to shift houses or buy one. The summer is a time of transfers and relocation; a time of school admissions and hunting for a house near schools, so that children can have an easy commute,” Jasuja says.

Gaurav Mittal, the managing director of CHD Developers, says: “The mood is really upbeat in the market with people finalizing deals in property. While market warms up during Navaratras even during bad times, this Navaratra is different. The quantum of deals is unexpected, though a welcome development.”

Jasuja says, “Notwithstanding a slew of legal battles, buyers are taking a final call on their new purchases in Noida and Greater Noida.” A report of Prop Equity says that the current financial year has proved to be good for almost all the big cities of the NCR including, Noida, Gurgaon, Ghaziabad, Greater Noida and Faridabad.

Sanjay Khanna, the director of Kailash Nath Developers Pvt Ltd, says: “I hope the worst is over for realty market and transactions take place till the end of summer vacation in schools. This Navaratra is proving to be very auspicious for the realty world. I know that NRIs, too, find the summer months an ideal time to return to their roots in order to buy property. Their search for a property also starts during the summer. This is the time when they visit India in order to meet their relatives and, side by side, also look for nice properties. They do not mind paying slightly more for good properties.”

Realty watchers say that April-June period records a high quantum of property transactions. Realty market picks pace from Navaratras. This is a time when end users finalize their deals and those looking for new homes on rent, also shift. The summer is also a time when the resale market picks up nicely.

Vijay Jindal, the chairman and managing director of SVP group, says: “It is a hectic period from Navaratra and through the summer months. A lot of transactions take place at all levels.” He says that during the summer, buyers give priority to those projects which are close to good schools.

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Income Tax Offices will remain open on Saturday i.e. 31-3-2012 to ease filing of returns.

March 30, 2012 – 7:05 pm

The Financial Year 2011-12 closes on 31-3-2012 which is falling on Saturday. All the Income Tax Offices throughout India shall remain open on this day and the receipts counters shall also work during normal office hours. This direction is issued for administrative convenience by the Central Board of Direct Taxes in exercise of powers conferred under section 119 of the Income Tax Act, 1961.

Accordingly, Income Tax offices will function from 9.30 am to 6 pm to handle year-end rush.

Special arrangements may be made by way of opening additional receipt counters, wherever required on 30th and 31st March, 2012 to make it easier to the taxpayers in filing their returns of income conveniently. These instructions may be given wide publicity – ORDER [F.NO.225/138/2011/ITA.II], DATED 30-3-2012

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No bar on Realty firms from applying for UASL.

March 30, 2012 – 5:32 pm

A prosecution witness in the 2G spectrum allocation case on Thursday told a Delhi court that as per the Unified Access Service Licences guidelines, the real estate firms were not barred from applying for the licences.

Company Secretary V Mohan of real estate firm Parsvnath Developers Ltd, which had applied for the UAS licences in 22 circles in August 2007, told Special CBI Judge O P Saini that when the company had applied for the 2G licences, they had gone through the UASL guidelines.

“When the company made application for UAS licence, I had gone through UASL guidelines. When I went through guidelines and the company decided to file application for UAS licences, it was quite clear to me that there was no restriction on a real estate company, applying for a UAS licence,” Mohan said.

Mohan deposed that in August 2007, the firm tried to venture in the telecom business and made applications to the Department of Telecom (DoT) for licences.

Mohan said their application was rejected by the DoT and Parsvnath Developers Ltd did not get any licence.

During his cross-examination, he said their firm was complying with net worth criteria and paid up equity capital criteria when it applied for the UASL on August 24, 2007.

He said the firm knew about August 2007 recommendations of the Telecom Regulatory Authority of India (TRAI) and in view of this, they knew that the entry fee for grant of pan-India UAS licence was Rs 1,658 crores.

“The company was in the know of TRAI recommendations of August 2007. The company knew that the entry fee for grant of a pan-India UAS licence was Rs 1,658 crore, in view of TRAI recommendations. When the company made the application on August 24, 2007, it never knew that DoT was going to announce a cut-off date,” Mohan said.

Mohan, whose deposition concluded today, said the main ground communicated to Parsvnath Developers Ltd by the DoT for rejecting its application for the UASL was that the telecom business was not in the object clause of the firm at the time of making the application.

He said the rejection of the application by the DoT was challenged by the firm before the Delhi High Court.

Besides Mohan, the court also recorded the testimony of prosecution witness Raj Kumar Kapoor, a retired Director of Bycell Communications (P) Ltd, which had also applied for UAS licences in 2007.

Kapoor, whose recording of testimony concluded today, said he was called by the DoT officials for licences on January 10, 2008 but at Sanchar Bhawan, he was given a letter to the effect that their application for UASL was not considered.

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Chennai leads Indian Real Estate Sector.

March 30, 2012 – 3:57 pm

In a recent report, property broking and real estate consulting firm Jones Lang LaSalle said the Indian property market is poised to attract about US$3 billion, almost double last year’s US$1.6 billion, from overseas buyers this year.

The Indian property market will see more investment from overseas this year as it still remains an attractive investment destination globally.

Of this, one-third would be from home buyers and the balance from investors. This is despite the fact that property prices in India are at an all-time high.

According to a recent National Housing Bank (NHB) survey, property prices in big Indian cities have increased by as much as 43 per cent to 166 per cent in the last four years.

NHB, wholly owned by the Reserve Bank of India, lends to home-mortgage companies. It also regulates and refinances social housing programmes. In its report, the bank said Chennai had seen the highest rise in prices at 166 per cent. Bhopal was second with a hike of 117 per cent and Mumbai was ranked third with an increase of 87 per cent.

What then brings overseas investment to Indian property, when prices are skyrocketing? The answer is simple: Despite the global turmoil because of the financial crisis, the Indian economy has remained robust, largely due to domestic-driven demand.

According to Jones Lang LaSalle, India’s strong economic growth, rapid urbanisation, growing middle-class population, demographic advantage and increased thrust on infrastructure has worked in its favour. Buying property is especially popular among Indians living abroad, who all seem to want a piece of the homeland. That is why Indian property shows are burgeoning around the globe.

Dubai-based Sumansa Exhibitions has been holding Indian property shows across five countries. And every year the number of developers taking part in the shows and the attendees has grown rapidly.

Sumansa Exhibitions’ chief executive officer Sunil Jaiswal says: “We have held shows in the UK, South Africa, Hong Kong, Dubai and Singapore. They have been very well received by both exhibitors and visitors alike.”

This year Sumansa will hold the Indian Property Show in Singapore on April 14 and 15. It will be held at the Suntec Exhibition Centre’s hall 401 and nearly 40 developers from across India will be part of the show.

More than 200 properties will be showcased during the two-day exhibition. Sumansa expects the number of footfalls at the event to be much larger than the 4,000 that turned up at its last year’s event.

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IOREC: Property Sector In Mauritius a Profitable Investment.

March 29, 2012 – 6:09 pm

The sluggish global economy has not left the property sector unscathed, but the high-end estate market on the Indian Ocean island of Mauritius is showing remarkable resilience.

Murray Adair, CEO of the Indian Ocean Real Estate Company (IOREC) who is developing several luxury resorts in Mauritius in partnership with Flacq United Estates Limited (FUEL), says while there had been a slow-down in the property market, sales transactions in upmarket resorts on the island remain buoyant.

Adair says this is particularly true for resorts developed under the Mauritian Government’s Integrated Resort Schemes (IRS) which aims to encourage foreign direct investment. He pointed out that more foreign ownership approved units were sold in 2011 than in the whole of 2009 and 2010 combined. Under the IRS, foreigners are allowed permanent residence in Mauritius when they invest $500 000 or more in these designated resorts and they keep this status for as long as they own the property.

“We find that the IRS is definitely encouraging investment on the island. For example, over 50% of the properties at Azuri, a luxury beachfront village to be built on the coast about 25 km from Port Louis on the north east coast, have been sold off-plan since it was launched in September 2011,” says Adair.

Adair says while the International Monetary Fund in January cut its 2012 growth forecast for Mauritius from 4.1% to 3.8%, the country remains a sought-after tourist and investment destination. He says the tourism sector contributes 15% to the GDP of Mauritius and remains the biggest foreign exchange earner for the island.

“The Government’s initiatives to further diversify the economy and encourage investments from the Far East, including China, Russia and India will further enhance the long-term growth potential of the island,” concludes Adair.

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Developer Brigade Group opens Orion mall in Bangalore.

March 29, 2012 – 5:14 pm

Real estate developer Brigade Group has opened its flagship retail venture Orion mall in Brigade Gateway Enclave, Bangalore. Spread over 8.2 lakh sq. ft., the mall houses a mix of global and national brands.

Orion mall is developed and managed by Brigade Group and located in the Brigade Gateway Enclave that also includes the World Trade Centre, Sheraton Bangalore hotel, 1,200+ residences, Columbia Asia Hospital, The Brigade School, and Galaxy Club. The mall overlooks a two-acre manmade lake and has open-air children’s play area and amphitheatre.

Foley Designs and DSP Design are the interior designers, while HOK from New York has developed the main design of the mall. The mall has LED lighting solutions, automatic sensor controlled car parking, over 225 closed-circuit security cameras apart from 42 lifts and escalators.

Speaking on the occasion, Jaishankar, CMD, Brigade Group, said: “Orion mall will undoubtedly be the most sought-after destination amongst discerning shoppers and for brands of repute as well. With the launch of Orion, it truly transforms the Brigade Gateway Enclave into an exclusive integrated lifestyle enclave and marks the Brigade Group’s foray into the highly competitive retail segment.”

Orion has a hypermarket (Star Bazaar). Its food court (Sauce Pan) spreads over 55,000 sq. ft. Housing brands like Mc Donald’s, Subway, Sbarro, Rajdhani, Kailash Parbat, Empire, Empire Fresh Fruit Juice Centre, Indian Tadka, Mad about China, Mad over Donuts, Tiger bay, and Up south. The mall also houses a Reliance Digital store for electronics need.
For entertainment, Orion will house the largest PVR multiplex of the country – with 11 screens and over 2,800 seats. BluO, a 27-lane bowling centre will also open its first centre in the city. The lounge will offer entertainment options like Karaoke bar. The mall will also house Time Zone, an 8,000 sq. ft. gaming centre.

Brigade Group has completed over 100 projects, developing over 20 million sq. ft. of area since 1986.

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Indian Real Estate Sector may gain due to Gudi Padwa.

March 28, 2012 – 4:51 pm

The festival is widely celebrated in the state of Maharashtra  and as for common people in India, a home is a priced possession and they do not sell and buy residential properties often. They wait for an auspicious date to such transactions.Gudi Padwa, a festival which earmarks new beginnings and new hopes to everybody’s life. Hence many builders announce their new projects at this point of time taking into consideration the sentiments of the local market.

Keeping this in mind, realtors at Pune has organized Sakal Pune Property Show named as Sakal Gudi Padwa Grihotsav 2012. Across the just concluded quarter, residential prices in the outskirts of Mumbai have seen a positive slide.

With the Union Budget 2012-13 giving due consideration to the loans of affordable housing projects coupled with the positive feeling related to the festival, buyers and sellers expect to strike a great deal during this year’s Gudi Padwa. The buyers mainly constitute the New Urban Family Sector. Moreover, during this festive season, realtors juxtapose the properties with attractive discounts and freebies. But with these factors only, nobody can lure customers today. They are more oriented towards the location of the property, the pricing and the quality of construction.

The recent years were not so good for real estate sector. The ever rising inflation rates and interest rates kept the buyers at the bay. But the recent decision of the RBI to cut CRR rates gives little bit of hope to the sector.

However real estate experts suggest that the sentiments related to a festival only cannot trigger the sector. But it is decisive in getting the real estate market on the right track after a gloom. Moreover, traditionally Gudi Padwa means birth of bhoomi and bhoomi is everybody’s shelter. We can hope and look forward for bright days for real estate sector ahead with this auspicious festival.

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It’s time to fulfil sweet dream for Hyderabad Residents.

March 27, 2012 – 8:50 pm

“Yes, there has definitely been a drop in prices by 5-8% in Hyderabad. But if one asks for the drop in real estate prices in Hyderabad for the year 2011, one has to look at it more as a necessity of investors to postpone their purchases due to the unstable political situation prevalent last year and absence of any major infrastructural developments, rather than just lack of demand.

For all those who thought Hyderabad was a costly city to live in, the latest statistics signify otherwise.

The city is ranked second in India, among 15 considered, for declining real estate prices in the year 2011, with the Economic Survey 2011-12 report tabling a decline by 14% in residential property cost in the twin cities, while a separate survey by the National Housing Bank has put the reduction rate at 8% for the quarter Oct-Dec 2011, as compared to 2010.

Such factors did lead to a 20 per cent decline in volume of sales, which ultimately affected the pricing,” said P Prem Kumar, managing director of Doyen Constructions and president of the Andhra Pradesh Real Estate Developer Association (APREDA), who added that even projects for commercial purposes have found less takers, with only half of the available 5 million sq ft of space in 2011, being actually sold off.

“Prices in main areas like Banjara Hills, Kondapur and Jubilee Hills etc. haven’t risen majorly over the past 10 years.

Instead, if one notices, it is outer areas like Shamshabad, Patencheruvu etc. where prices were inflated earlier, have suffered now due to lowered demand.” Statistics provided by the National Housing Bank report supports this claim, with prices declining by at least 10% in the North Zone region (Serilingampally, Patanncheruvu, Ramachandrapuram, Kukatpally) in Oct-Dec 2011, as compared with July- September 2011.

Prices in other zones, including the Old City, have come down only by 3-5%, as compared to the previous year.

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DLF Garden City Lucknow receives the ‘Integrated Township of the Year Award’.

March 27, 2012 – 8:48 pm

Garden city, the first ever residential project in Lucknow by DLF has bagged the “Integrated Township of the Year – North India” award at the Realty plus Excellence Awards 2012, instituted by real estate monthly magazine Realty Plus. Cheered by a galaxy of realty stars, luminaries and other stakeholders present from all over the country at a glittering award ceremony held in national capital at The Metropolitan Hotel, Bangla Sahib road, Garden city, Lucknow was chosen for setting new benchmarks for excellence in the Indian Real Estate industry in 2012′, their immaculate town planning and their outstanding contributions and efforts towards bringing about massive and positive changes in the real estate skyline of this region.

This is the fourth award in the last two years conferred upon DLF India:

* Marketer of the Year For Hyde Park Estate at DLF New Chandigarh – Estate World Awards in Association with KPMG & Bloomberg-2011

* Developer of the year – North India – Estate World Awards in association with KPMG & Bloomberg-2011

* Integrated Township of the Year For DLF Valley, Panchkula – Realty Plus Excellence Awards-2010,

Receiving the award, Ananta Singh Raghuvanshi, director sales and marketing at DLF India Ltd said, “It is extremely encouraging to enter new markets and recreate the success and magic of the past. As a group we are extremely excited and committed to our developments in Lucknow, New Chandigarh, Hyderabad, Chennai, Bengaluru, etc. For each market, we are trying our best to think globally and act locally.”

Garden city is DLF’s first residential project, in the city of Nawabs- Lucknow. With almost 40 per cent of the area as open spaces and plot sizes starting from 250 sq. yards and above, the township conforms to very high standards of low density population norms. The facilities at Garden city match the international living standards and give the people of Lucknow their first real taste of an exquisite lifestyle. It boasts of meticulous town planning, eco-friendly infrastructure, wide open roads, its own smart sewage disposal plant, underground cabling and massive green belts running across the township.

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Hike in Stamp Duty report in Maharashtra for the Real Estate Sector.

March 27, 2012 – 1:19 pm

Shares of real estate companies with significant exposure in Mumbai slumped in a weak market today after media reports surfaced that the Maharashtra government proposes to hike stamp duty for properties.

Shares of realty players like India Bulls, Oberoi and HDIL today slumped as much as 6 per cent after reports that the state government is planning to hike stamp duty by as much as 160 times.

India bulls Real Estate slumped 4.53 per cent to a low of Rs 65.25, Oberoi Realty tanked 2.32 per cent over its previous close to Rs 250 and Housing Development and Infrastructure Ltd was down by 6.64 per cent to Rs 89.15 on the BSE.

If the hike comes into effect, it will increase prices of both residential and commercial leave-and-licence properties, by a huge margin, market analysts said, adding that it will affect the already-sluggish Mumbai real estate demand.

“This news is going to be negative and stock prices of realty companies who have exposure in Mumbai took a hit. The cost of property in Mumbai will move up it will worsen the situation as there are already very few takers at the present interest rate regime,” Ashika Stock Brokers Research Head Paras Bothra said.

Moreover, weakness in the broader market also battered these stocks to some extent, market analysts said. The 30- share benchmark index Sensex was trading at 17,113.62, down 248.12 points at 1321 hours.

According to media reports, Maharashtra government proposed to hike stamp duty on leave-licence to 0.1 per cent on market value or 1 per cent of the average annual rent or deposit paid, whichever is higher, for residential properties.

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Maharashtra stamp-duty hike: What it means for Real Estate Companies.

March 26, 2012 – 5:05 pm

In a recent development, cash strapped Maharashtra government proposed to hike stamp duty on leave-license to 0.1% on market value or 1% of the average annual rent or deposit paid, whichever is higher, for residential properties. For commercial properties, the duty proposed is 0.4% for lease agreements over 60 months.

This is a whopping 160 times hike from the previous fixed amount of Rs 25,000 for residential and Rs 50,000 for commercial properties for 60 months.

Fortunes of real estate companies in India’s financial capital could take a turn for the worse if the Maharashtra government accepts the proposal to hike stamp duty on leave-licenses.

The government’s aim behind this move is to mobilize over Rs 1,000 crore and restore Mumbai to its previous glory.

Most realtors had stomached the 2% service tax hike (from 10% to 12%) announced in Budget 2012-13 and instead opted to see the silver lining , which is the introduction of external commercial borrowings (ECBs) in the low-cost housing segment and the reduction of withholding tax on ECB interest from 20% to 5%.

However, if the hike comes into effect, it will increase prices of leave-and-licence properties, both residential and commercial, by a huge margin which in turn will deal a sharp blow to an already-sluggish Mumbai real estate demand. India Bulls, Oberoi, HDIL, Phoenix Mills, Bombay Dyeing and Raymond are among the realty companies that will bear the brunt of the proposed stamp-duty hike.

 

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Gulshan Homz new project Gulshan Ikebana at Sector 143B, Noida Expressway.

March 25, 2012 – 3:54 pm

Gulshan Homz, part of the GC Group of companies has launched its new residential project: Gulshan Ikebana at Sector 143B, Noida Expressway that is designed by keeping all the modern needs, indulgences and luxuries in mind and offers a sleek, infinitely flexible, multi-dimensional and open life and is well conceptualised for quintessential living.  One would enjoy excellent location advantage with lust green surrounding and seamless connectivity at Ikebana located right on the Noida-Greater Noida expressway which offer natural retreat as well as excellent metropolitan convenience and vibrance with Apartment sizes 1400 sqft  to 2300 sqft. The project is spread over 12.5 acres land.

Amenities:-

  • Club
  • Internet Connectivity, 24 x 7 Security
  • Intercom Connectivity
  • Swimming pool, Steam/Sauna/Massage Rooms
  • Yoga Centre, Indoor Game
  • Jogging Track, Badminton
  • Basketball Court( Half Court), AC Gymnasium
  • Aerobic Dance Floor, Coffee Shop
  • AC Unisex Beauty Salon, AC Banquet / Party Hall / Guest Lounge
  • Kids Lounge
  • Doctor and Ambulance on Call
  • Stretcher Lifts, Wheel chair for Elderly and sick

 

About the Developer:

Gulshan Homz has created a mark of excellence in luxury Real Estate Development for themselves with sound business ethics, honest morale, integrity, transparency and invaluable experience. They have developed many luxurious living spaces  and have improvised skills over the years to launch a number of premium projects and are looking forward to develop luxurious home with a vision to gift a green environment and prosperous cities to the future generations.

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Rise in Indian House Prices gives relief to Affordable Units.

March 24, 2012 – 4:37 pm

Developers were largely disappointed with the country’s budget for 2012.  They had hoped the budget would have included more incentives for the development of affordable housing. Still, several of the key budget items were aimed at stimulating capital for new residential projects.

In the world, Housing prices in India are the highest, as per the most recent research from London-based Lloyds TSB International Global Housing Market Review.  Prices in a country of 1.21 billion residents have increased 284 per cent since 2001.The Lloyds report ranks Russia and South Africa with the second and third highest housing prices.  Prices in Russia are up 209 per cent over the last 10 years; in South Africa, they are up 161 per cent. Last year alone, prices in India rose by nine per cent, according to the Lloyds report.

External Commercial Borrowing (‘ECB’) doors are proposed to be made open for specified low cost affordable housing projects which could potentially provide the much needed liquidity to the housing sector. Further, the interest to be paid by developers on ECB loans available from July 2012 to June 2015 will drop to 5 per cent from the existing rate of 20%

While many in India’s real estate industry were hoping for a strong regulatory and effective policy framework which would have helped boost the real estate sector, the Union Budget 2012 falls short of expectations, according to several financial analysts.

Analysts in India also note that one of the major budget proposals which may have a huge cash-flow impact to the real estate sector relates to the deduction of a 1 per cent tax on the purchase of certain land parcels in urban areas. The measure would also help to close deals where instalment payments are agreed to by buyer and seller.

However, with the expected increase in liquidity through the availability of ECBs and the availability of higher deductions for the development of affordable housing generally, the real estate sector may see a surge in activity this year from an otherwise stagnant growth pattern, according to several analysts.

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Private Developers gets more Banks lending.

March 24, 2012 – 3:09 pm

According to the latest data available from the Reserve Bank of India, the outstanding for commercial real estate is Rs 1187.1 billion as of January 2012, a growth of 12.2 per cent over the year-ago period. Although this rate is lower than the growth figure of 19.9 per cent in the same period the previous year, the double-digit growth stands in sharp contrast to the claims from public-listed realty firms who say bank lending has shrunk considerably.

A slowdown in bank credit to commercial real estate development is not fresh news. But official data suggest that lending to realty sector is still growing in double digits.

According to a research report by IDFC’s Institutional Securities team last December, bank and NBFC loans to developers have increased 15 per cent to Rs 1.8 trillion for the 12 months ended September 11 in spite of higher interest rates and the RBI’s efforts to curb lending to the sector. Of this, loans to unlisted developers accounted for more than 72 per cent of the total.

Central to the theme of continued lending to real estate development are the low-lying, unlisted property developers of the country – a crop of realtors who have always been on the sidelines of the big Indian realty story but who are slowly yet surely climbing up the ladder for a larger share of bank loans.

One reason for such a shift could be the hard targets that listed realty firms chase due to the pressure of being listed, with compulsory quarterly disclosures. Add to it the size of the firm and pressure points will become clearer. A listed firm usually places bigger bets with larger projects and when the market faces turbulence, project execution becomes a problem. This reverberates with pending projects and drying up of bank credit.

Even as most unlisted private developers are small realtors, there are some large private groups in different regions of the country. Given the huge set of private developers, even private equity developers have been betting on projects sponsored by such realtors.

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India’s treasury lost $210 billion in coal scandal.

March 23, 2012 – 6:10 pm

As per the report, by the Times of India newspaper, the primary beneficiaries were about 100 private and state companies that were handed contracts for 155 coal fields between 2004 and 2009 without going through a competitive bidding process. The report said that $210 billion — five times India’s annual defence budget — was a conservative estimate given that it relied on prices for low-grade rather than medium-grade coal.

The Indian Parliament erupted in hoots and jeers Thursday after a draft report by government auditors estimated that the national treasury lost $210 billion by selling coal fields to private excavation companies in sweetheart deals.

The report represents the latest in a string of corruption scandals to hit the ruling Congress Party — others have involved the telecommunications, real estate and sports industries — that has left India’s leadership weak and bereft of policy initiatives. Opposition leaders called the latest revelation the “mother of all scams,” accusing the government of looting the country.

But auditors with the comptroller/auditor general’s office countered that the leaked draft is misleading, adding in a letter to the prime minister’s office that the figures publicized were the product of discussions held at a “very preliminary stage.”

“We are examining the news report and I have called for records,” Coal Minister Sriprakash Jaiswal told journalists, adding that he wasn’t in office at the time of the suspect deals. “After that I will reply.”

India, the world’s third-largest coal producer after China and the United States, has seen a series of mining scandals. In August, the top elected official in south western Karnataka state resigned after being implicated in a mining scandal that a watchdog said involved $400 million. Three months later, a report claimed that almost 50% of the iron ore exported from western Goa state was illegally mined.

India is hungry for energy to fuel its fast-growing economy, and coal accounts for 70% of the mix, a percentage expected to grow, given limitations on the further development of power from nuclear reactors and renewable sources. Environmentalists, however, say increased production is ecologically unsustainable.

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Kotak Realty invests 120 crore with Parsvnath Developers.

March 22, 2012 – 6:08 pm

Parsvnath Developers is raising Rs 120 crore from Kotak Realty Fund for a new 100-acre integrated township project on Sohna Road in Gurgaon. Kotak Realty fund will get a 20% stake in the special purpose vehicle that will develop the yet unnamed project.

Parsvnath Developers has sold stakes in many of its residential and office projects to private equity funds in the past. Last year, JP Morgan had invested $30 million in Parsvnath’s residential project La Tropicana in Civil Lines area of north Delhi, which was used to give an exit to Red Fort Capital that had invested 115 crore in the project in 2009.

The project will be largely residential in nature with some commercial and retail developments, and will be launched in the next two months. “The land for the project has been aggregated by Parsvnath over many years and at approvals are being taken to launch the project,” said the person.

A senior executive at Parsvnath who did not want to be named confirmed that talks were on. A Kotak Realty Fund spokesperson declined to comment on the deal.

Red Fort Capital had earlier picked up 24.5% for Rs 120 crore in an office project Parsvnath is developing on land it had got from the Delhi Metro Rail Corporation in New Delhi. In January 2011, Sun-Apollo India Real Estate Fund invested 100 crore for a 49.9% stake in a residential project Parsvnath Exotica in Ghaziabad near Delhi.

The plot is located opposite the American Centre on KG Marg, just outside the Lutyens Bungalow Zone. If the sale goes through, it will be the first new building to be built in the central business district of Connaught Place in Delhi after the Birla Tower that was built in early 2000.

The listed real estate player, which has a focus on the national capital region, is currently trying to reduce its debt, which stands at around Rs 1,300 crore. It recently put a 1.2-acre plot in the heart of Delhi, on Kasturba Gandhi Marg, on the block and is expecting to raise around 700 crore through the sale.

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Realty Plus Excellence Awards to Real Estate Sector.

March 21, 2012 – 5:13 pm

Realty plus Excellence Awards 2012 series for the northern region of India will be on March 21. The awards for South India and West India were given away on March 2 and March 9, respectively.

Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India, is the Jury Chairman for this year’s awards.

The Realty plus Excellence Awards will recognise people who have played a key role in the growth of the Indian real estate sector. Contributions made by developers, architects, interior designers, state government, and property advisors are recognised. These awards are decided upon by a distinguished jury.

The Realty Plus Excellence Awards are sponsored by Amrapali, Investors Clinic, Paras Buildtech and FlowGuard. M3M is the session sponsor, while Makaan.com is the online media partner. Adfactors Public Relations is the PR partner.

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Real Estate Sops cannot impress Firms.

March 20, 2012 – 2:58 pm

The finance minister relaxed borrowing norms for real estate firms and extended the loan subsidy for low-cost affordable houses. The concessions have, however, failed to impress the industry leaders who termed it as a too-little-too late move that would have a limited impact on the sector.

The Budget said, “I propose to allow ECB (external commercial borrowing) for low-cost affordable housing projects.”

Global consultancy Deloitte said RBI had earlier allowed ECB for developers in integrated township projects of 100 acres or more till December 31, 2010.

This move has a dual aim of expanding the window of funds for real estate developers such that affordable housing projects do not face cash crunch and are completed within the time frame.

The FM also extended, by a year, the 1% interest subsidy on loans up to R15 lakh where the cost of house does not exceed R25 lakh.

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Real Estate Sector is disappointed.

March 19, 2012 – 6:13 pm

Real estate players were disappointed with the Budget saying it failed to highlight the role of the housing sector in the economy.

The Union Budget 2012-13 on Friday proposed allowing external commercial borrowing for low cost affordable housing projects.

Presenting the Budget in the Lok Sabha, the Finance Minister, Mr Pranabh Mukherjee, also proposed setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans.

The Minister also proposed to enhance provisions under Rural Housing Fund from Rs 3,000 crore to Rs 4,000 crore besides extending the scheme of interest subvention of 1 per cent on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, for another year.

According to Mr Anurag Mathur, Managing Director, Cushman & Wakefield India, “The increase in allocation in infrastructure implies a clear intent on enhancing the urbanisation process as well as providing a support to the slowing industrial sector. At the same time the increase in the service tax from 10 per cent to 12 per cent would lead to additional burden on the tenants as the service tax on rentals has remained unchanged.”

“The proposal of bringing in an umbrella tax structure to the cement industry will increase the cost of housing and will negate the development process. Also providing ECB to affordable housing is a minor respite to the sector. There is an inherent risk of liquidity drying up wherein the exemption of capital gains tax to invest in small and medium enterprises may result in cash out from real estate,” Mr Lalit Jain, President, CREDAI, the industry body of real estate players, said.

The sector also said that the increase in service tax will increase the cost of construction by Rs 50-100 per sq feet.

Also Mr Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India said, “The one per cent tax rebate for home loans of upto Rs 15 lakh on homes costing up to Rs. 25 lakh will prove beneficial for developers in this segment. Exempting proceeds from the sale of a residential property from Capital Gains tax if they are invested in equity or equipment of an SME definitely provides home owners with more reinvestment options. Previously, the only route for exemption was purchase of another property or tax saving bonds. At the same time, this move could also result in a lowering of sales volumes in the secondary sale market.”

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Buying or building of a house will cost more as per the Union Budget 2012-13.

March 17, 2012 – 5:32 pm

Realty players said that purchase or construction of a house would now cost more due to expected rise in prices of key raw materials cement and steel and a hike in service tax by 2 per cent.Barring low-cost housing, property prices are expected to rise in the coming days after the proposed hike in service tax from 10 per cent to 12 per cent.

According to the budget proposals the threshold would be over Rs 50 lakh an urban areas and Rs 20 lakh elsewhere. Also the TDS at the rate of 1 per cent on transfer of immovable property (other than agricultural land) above a specified threshold will also add to the cost of buying a house.

Cement and steel manufacturers have already hinted at a price hike after the Budget proposed raising the excise duty to 12 per cent.

Commenting on the budget proposals, Confederation of Real Estate Developers’ Association of India (CREDAI) Chairman Pradeep Jain said, “Application of TDS on the purchase and sale of property and increasing Service Tax by 2 per cent will further add on to the overall cost of property and are bound to make property more costly in coming days.”

Realty consultant DTZ said that increase in the service tax is going to further increase marginally the overall burden on the home buyers of mid and high segment (dwellings costing more than 25 lakh). The impact of service tax would be about Rs 40,000 on a Rs 75 lakh home.

However, DTZ said that affordable housing, being part of negative list, is exempted from service tax and the move would give a boost to the affordable housing segment.

Jones Lang LaSalle India Chairman and Country Head Anuj Puri said that “the increase in the service tax rate from 10 per cent to 12 per cent will increase the cost of production for developers, who are already reeling under high input costs. It follows that this increased burden will be passed on to end users”.

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Union Budget 2012-13: Builders say that Pranab Mukherjee has ignored ground realty.

March 17, 2012 – 4:41 pm

Chief of the Confederation of Real Estate Developers’ Association of India (CREDAI), Lalit Kumar Jain, said the announcement on external commercial borrowings (ECB) for affordable housing was a minor respite but still meaningless. Jain, who is also chairman and managing director of Kumar Urban Development Ltd, added, “We contribute 6.5% to the GDP and expected a big boost from the budget for affordable housing through special schemes, an interest subvention of 5-7 % for LIG (low income group) and EWS (economically weaker section) housing and promotion of rental housing through tax exemption.”

The top players in the realty sector said they had been ignored by the finance minister.

Jain also pointed out that the interest subsidy on home loans was too low. The Budget has extended the scheme of interest subvention of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for another year.

Even Gaurav Gupta, director, Omkar Realtors & Developers commented that the realty sector had got nothing to boost market and customer sentiments. “There are no indications of this sector being granted the status of an industry, which it much deserves. On the contrary, the increase in service tax will push up realty prices as the additional cost will be passed on to the buyers.”

There were some who welcomed the proposals. Sachin Sandhir, MD, RICS South Asia felt it “exceeded expectations” given the pressures on the fiscal situation.

Tata Housing MD and CEO Brotin Banerjee added, “Initiatives to make affordable housing available to a larger section of the society have only been met partially.”

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Union Budget 2012-13 – A List Of Pros And Cons.

March 16, 2012 – 6:18 pm

Aunj Puri, Chairman & Country Head, Jones Lang LaSalle India has a mixed reaction to Union Budget 2012-13 as he seems that the Indian real estate sector does not have much to cheer about.

 

Exempting proceeds from the sale of a residential property from Capital Gains tax if they are invested in equity or equipment of an SME definitely provides home owners with more reinvestment options. Previously, the only route for exemption was purchase of another property or tax saving bonds and at the same time, this move could also result in a lowering of sales volumes on the secondary sale market.

He believes that it is difficult to see the raising of the personal income tax exemption limit from Rs 1.8 lakh to Rs. 2 lakh as anything more than tokenism. It is certainly not relevant for the aspiring Indian middle-class home buyer. The expected exemption limit of Rs. 3 lakh would have had some significance. Although, the 1% tax rebate for home loans of up to Rs.15 lakh on homes costing up to Rs. 25 lakh will prove beneficial for developers in this segment.

Also the postponement of a firm decision on FDI in multi-brand retail gave disappointment. We seem to have missed yet another opportunity to boost the Indian economy by ways of significant foreign capital inflows.  On the other hand, the increased spend on warehousing will certainly help the retail real estate sector, since more storage capabilities will help retailers to expand into more cities and towns.

Even the increased service tax rate from 10% to 12% will increase the cost of production for developers, who are already reeling under high input costs which means that this increased burden will be passed on to end users.

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Real Estate Industry expects Home Loan Rate to be renewed.

March 16, 2012 – 6:15 pm

As the Union Budget 2012-13 is already in news, city’s real estate industry also has expressed its expectations. Mainly revolving around increased subsidy on interest rate for loans towards affordable housing and industry status for taxation and construction and relaxation of FDI up to 51 per cent into multi-branding, the industry is hopeful of a favourable budget.

CREDAI President, Sushil Mantri, said that “The Indian real estate industry was riding through highs and lows in 2011. Last year, one per cent interest rate subsidy was offered for loans towards affordable housing. If the subsidy can be broadened, home buyers especially in mid and lower income groups will benefit.”

“Indian real estate, especially housing needs the government’s support for further growth. The government should consider restructuring interest rates on home loans to attract larger base of lower and middle income group to benefit. For loan amounts lesser than Rs 25 lakh, the interest rate should be lower and should scale up as the loan amount goes higher,” said Sankey Prasad, chairman and MD of Synergy Property Developments Services.

“The real estate industry will be looking forward to RBI’s intervention to control inflation which has adversely affected the industry. If FDI is relaxed up to 51 per cent in multi-branding, this will boost the growth path for the Indian retail industry,” Sushil Mantri added.

Further the Experts demanded that the glaring concerns of the real estate industry be addressed.

Whereas the CEO of Vakil Housing Development Corporation Limited, H R Girish  said that “Low demand and liquidity remain the enemies of the real estate industry. It is battered by repeated rate hikes which has resulted in fall in sales, higher cost of funds and slowing of economy. These are the key concerns that need to be looked into.”

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Indian developers will showcase properties to NRI investors at Doha exhibition.

March 15, 2012 – 6:35 pm

It is the 20th India Property Exhibition in Doha on Friday which will showcase more than 100 projects spread across New Delhi, the National Capital Region, Jaipur, Mumbai, Pune, Goa, Hyderabad and several other cities.

In this exhibition, Indian developers will offer NRI investors a wide choice of properties across India which is going to start on 16th March 2012.

The $12 billion realty market in India is on a high growth curve, because of the fast growing economy, increased participation of global players in the Indian market and new technological innovations.

According to organisers – Indus Fairs and Events (India) and Apex Business Solutions, Doha – the investment portfolio includes apartments, independent houses, bungalows, luxury villas, farmhouses, commercial properties, beach resorts and plots.

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