Category: Real Estate News

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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Abu Dhabi Investment Authority (ADIA) targeting Indian Real Estate Sector.

March 15, 2012 – 5:01 pm

The Indian Real Estate Sector may expect direct investments from the Abu Dhabi Investment Authority (ADIA) very soon.

Although, ADIA has already invested money in India’s international property market through a variety of real estate and private equity funds with a total holdings in India to be worth between $400 million and $500 million.

Sovereign fund is looking to hire a fund manager from a private equity firm to look for direct real estate opportunities in India.

Many developers in India are seeking funds to begin new projects and to reduce their debts, which currently is around 1.8 trillion rupees approx.

Although, being Asia’s third largest economy, residential property developers in India is facing a major funding gap as home prices stay low and the country’s banks go on playing it safe when it comes to lending to the real estate sector.

An India-centric private equity fund, Red Fort Capital has recently accepted a $50 million investment from ADIA and has already raised $80 million of its planned $500 million for its second India dedicated property fund. Property accounts for 5% to 10% of ADIA’S global portfolio, whilst North America and Europe account for 60% to 85% and the emerging markets 15%.

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Realty sector demands affordability from the government.

March 14, 2012 – 6:52 pm

From the forthcoming Union Budget 2012, realty sector have much expectation that it will contain some pragmatic provisions which will lower effective price barriers for home-seekers.

Broader incentives for development of affordable housing are needed, to encourage more developers to become active in this important sector and increase the supply of budget homes in the city as the city continues to face problems including high lending rates and construction costs, insufficient infrastructure and lack of affordable housing, says real estate developers.

Anil Pharande, Vice-president of Credai (Confederation of Real Estate Developers Associations of India) Pune Metro, said that “The government can set clear guidelines on timely commencement and completion of projects and link disbursement of these funds with adherence to these guidelines.” Also a higher allocation of infrastructure funds for housing can be a favourable approach on a macro level,he said.

In addition he also said that removal of the 10 per cent service tax on residential real estate construction, that increases the cost of new homes by as much as 3 per cent, is critical for a cost-sensitive market like Pune, where mainly the lower mid-income segment resides.

Also the 1 per cent interest rate subsidy on home loans can also work as a good measure to bring affordability. Also the present eligibility limit of loan amount of Rs 20 lakh should be raised to Rs 30 lakh which will help people think about buying apartments of decent sizes. Reducing taxes such as excise VAT and stamp duty on real estate will also make home purchase attractive, Pharande said.

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From April 15, State Government to implement the Affordable Housing Policy.

March 12, 2012 – 5:57 pm

The affordable housing policy by the state government is set to be implemented from April 15. The policy will be implemented after the final notification within a month’s period with a preliminary notification already out.

The decision got finalised in a meeting between Additional Chief Secretary (Urban Development Department) TC Benjamin and representatives of Confederation of Real Estate Developers’ Associations of India (CREDAI) from Pune, Nagpur, Kolhapur, Nashik and Aurangabad.

The government in the notification has made it mandatory to reserve 20 per cent of the land or constructed space for small-sized housing for all projects on more than 2,000 sq m land.

Benjamin said that, “The state has a dearth of such housing and this initiative will help bring about more such houses in residential projects. It will have to be implemented by the builders after April.”

Builders expressed reservations about whether the 20 per cent of the land should be reserved in the same area. However, it was decided that they could have a little farther but in the same zone. To this Benjamin added that, “They have to provide the housing with almost the same kind of infrastructure.”

The rule clearly mentions that in case of sub-division of land measuring 2,000 sq m or more, a minimum of 20 per cent will be handed over to MHADA. This would be applicable to the 26 municipal corporations and all municipal councils in the state. In order to prevent any misuse of the policy, the notification states that developers will not be allowed to amalgamate the smaller flats or land under any circumstances.

Most of the builders had reservations about having the economical housing on the same campus but later agreed to have it a little farther away from their projects.

Satish Magar, Pune CREDAI representative, who attended the meeting, said, “We are open to the policy but had some issues, which we discussed.”

“In case of the built-up space, it will be bought at the construction cost. In order to compensate the developer for the land cost, the affordable housing will be included in the floor space index computation,” said a senior official.

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Indian Property Exhibition in Hong Kong.

March 2, 2012 – 4:07 pm

In this exhibition coming projects and infrastructural development in Mumbai, Pune, Jaipur and Bengaluru will be showcased.

The exhibition being a two day affair will give a proper overview of the real estate sector which will be helpful to those who want to own or invest in Indian real estate. In this exhibition around 300 projects will be exhibited by over 70 developers.

As we know that Indian real estate industry is growing tremendously in both commercial as well as residential sectors so buying property in India at this time will be an excellent investment.

Dubai-based company, Sumansa Exhibitions is organizing the Indian Property Show in Hong Kong . Here, Investors and homebuyers can get good information and knowledge about the real estate from experienced Indian builders.

Home loan Approvals for properties purchased at this exhibition will be given there itself. So now, Indian living abroad will no more have to just dream to own a house in India.

The venue given as:

Indian Property Show Hong Kong

Date March 3 and 4

Time 11am-9pm

Venue Hong Kong Convention and Exhibition Centre, Wan Chai

Website www.indianpropertyshow.com

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Land to be Taken on Lease from Farmers

August 6, 2011 – 8:45 pm

The BJP has said that the draft Land Acquisition and Resettlement and Rehabilitation Bill 2011, which is now in public domain, is good but cannot be accepted in its existing format.

Sangh Priya Gautam, the former Union minister said, farmer should be given the right to sell 100% of their land. In Greater Noida, the Formula 1 racetrack required only 1000 acres of land but 2500 acres were acquired and allotted to a private builder by the government.

Land should be taken on lease from farmers. A BJP leader said, “The ownership should remain with farmers”. Another major aspect of the centre’s draft is that the urgency clause can be imposed only at the time of natural calamity or can be imposed in case of national security.

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Monsoon Discounts on Buying Houses.

July 16, 2011 – 9:45 am

The monsoon is usually considered as a lean season in terms of sales for the developers. It’s not just the weather that affects the purchase of property, but also because it is considered inauspicious to buy anything for about two weeks during this period (because of shraadh or pitrapaksh). Buyers prefer to wait till the festival season to buy real estate. So, in order to increase sales, developers are willing to offer ‘monsoon discounts’.

Many people postpone buying a house during these months. This adds to the existing inventory of the real estate developer. The builder, on their part, wants to get relieved from it so he can start a new project in the upcoming festival season. Also, they would need some liquid cash in hand for the new projects.
While only a handful of developers advertise it as a ‘monsoon discount’, most are willing to offer lower rates to serious buyers. The significant of discount varies for different cities, depending on how badly it is affected by the monsoon. So, in Mumbai and Kolkata the quantum of discount is likely to be higher than that in Delhi and Chennai. In Mumbai, a buyer can expect discounts ranging from 10-20%,  a Mumbai-based real estate marketing company.

Besides the entice of discounted property prices, buyers can also avail of the monsoon special offers on home loans by banks.

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Risk Factor Increases in Investing in Real Estate

May 21, 2011 – 11:23 am

The first quarter of this fiscal would be a difficult one for the real estate sector. Many of the big players in metropolitan cities have had to borrow funds to pay their installments on loans due to banks by the end of March 2011. In smaller cities and towns, the situation is not any better. Realtors who had overerated actual end user demand for housing, and had received advances from pioneers and investors are coming under pressure to deliver promised projects to enable them to cash in on their investments.

Projects are not moving ahead because of lack of cash, and banks are not falling over themselves to lend money to the sector any longer – especially as the RBI has restricted such flows and had asked banks to be cautious of offering out too much money to real estate companies. What does all this mean and how are these indications going to affect the person who wants to invest in real estate?  Firstly, potential investors should be very, very careful of where they invest in. In the absence of a real estate regulatory body in place the old statement of requirement , or buyers beware is more relevant today than ever before. Developers are facing a double setback this year.

Even if their projects come up, the support of foundations and substructures promised by government agencies such as power, water , sewage, and above all, road and transport connectivity – is just not happening on time, so projects may be finished, painted and polished, but may not be livable . The high cost of borrowing money is also hitting developers and with banks becoming cautious of extending credit to the sector, many developers are now looking towards private equity and similar sources of finance, many of which are much more expensive than bank funds. Apart from expenses, many financiers are also more wary about the money they lend.

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SBI Hikes Lending Rate by 75bps

May 12, 2011 – 4:04 pm

Country’s largest lender State Bank of India has declared a hike in loan interest rates by 75 basis points (bps), making housing, auto and other loans dearer for both new and existing debtors. State-owned SBI has increased the base rate, or the minimum lending rate, by 0.75 % to 9.25%. The new rate is effective from 12 May 2011, the Banker said.

The increase in State Bank of India’s loan rates comes a week after the Reserve Bank of India raised its lending and borrowing rates by 50 basis points. SBI has also increased its standard prime lending rate by 75 bps which would mean that existing borrowers will also have to pay more for their loans. With this, BPLR goes up to 14 %.

State Bank of India has also elevated deposit rates by up to 225 bps on selected 04 maturities. Many banks have been on a rate increment spree since the RBI’s decision to raise short-term key rates in its annual credit policy on 03 May 2011. Over a dozen banks, including PNB, ICICI Bank, Oriental Bank of Commerce and Corporation Bank, have raised interest rates in past one week.

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Keerthi Estates Instigates Luxury Residential Villas in Hyderabad

April 30, 2011 – 12:15 pm

Keerthi Estates, a Hyderabad-based real estate developer with huge experience and long term operations in Hyderabad and Bangalore, has launched its premium luxury residential complex – Richmond Villas – in Hyderabad. The gated-villas project, consists 157 villas of 4BHK, is coming up over 24 acres of blossoming green land near Andhra Pradesh Police Academy circle, close to the new International Airport.

Managing Director, Keerthi Estates, K Anil Kumar Reddy, said, “Each villa, ranging from 3,400 sq ft over 300 square yards to 4,000 sq ft over 466 square yards, will be built as triplex and will have a huge multipurpose hall, which could be converted into a mini theatre or bar or gym based on the buyer’s choice”. Each villa would cost between Rupees 1.25 crore and Rupees 1.85 crore.

The project is well connected to all the reachable amenities within 10-15 minutes like hospitals, educational institutions and shopping, the IT hub, financial district, Hi-tech city, international schools. The company has to complete the project by the end of 2013, so it has already taken all the approvals for the project and began construction. They have already completed two model villas and work on 15 villas is now at a later stage. There has been good response to the project so far and more than 30 villas are booked.

With around 52 per cent open area in the gated villas project, the company is offering key facilities such as a smartly designed clubhouse along with sports facilities, a swimming pool and an air-conditioned gym among others. The project also offers a waste management system with sewerage treatment plant, supported by water harvesting system and solar fencing all around.

Keerthi Estates has so far built over 3-million sq ft of residential and commercial space and some 1 million sq ft is currently under development in Hyderabad and Bangalore.

 

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SBI Ends Its Teaser Home Loan Schemes by End of April 2011

April 27, 2011 – 11:31 am

State  Bank of India (SBI) will put to an end to its puzzled home loan schemes by the end of April 2011. The interest rates offered on its home loans will now be recalled by floating interest rate schemes, which are comparable with those offered by  other commercial banks and housing finance companies. All loans from May 1 will  draw an interest rate of 9.5-10.25 per cent, depending on the loan amount.  Loans up to Rs 30 lakh will be available at 9.5 per cent (one percentage point  above their base rate). Loans in the Rs 30-75 lakh range will be charged 9.75  per cent (125 basis points above the base rate). And, those above Rs 75 lakh  will be charged 10.25 per cent (175 basis points above the base rate). Though,  these rates would move in line with the changes in the bank’s base rate that is  reviewed every quarter.

Earlier,  the RBI had asked banks to stop giving teaser loan rates,  since it believed such loans would blow the asset quality of the bank’s home  loan portfolio. Puzzled loans offer advances at a comparatively lower rate of  interest for the first few years, after which rates were re-set at higher  rates. SBI is the last one to discontinue such special loans. Under its SBI  Easy Home Loan and SBI Advantage Home Loan products, one could get loans for  8-8.75 per cent in the first three years. After the third year, the rates would  get reset at the current floating rate structure. At 8.75 per cent, a  20-year-old loan on Rs 30 lakh would come to Rs 884 a lakh. At 9.5 per cent,  you would now be paying Rs 932 a lakh.

Those who already have SBI’s puzzled home loans  and are still in the initial three years, the old rates remain applicable. The  new rates will only apply to new applicants. Among the housing finance  companies, LIC Housing Finance is still offering a fixed interest rate of 9.9-10 per  cent for the first five years and, thenafter, the existing rates will apply. A quick calculation on apnaloan.com showed that the average  rate for a 20-year period still works out in SBI’s favor. The average rate for  SBI was 9.5 per cent, while that for LIC Housing was 10.5 per cent for the same period.

SBI  has also said there would be no penalty on foreclosure on home loans. The bank  used to charge customers a 02 per cent penalty on fore – payment of the home  loan. It will also introduce a graded processing fee, which will increase   according to the loan amount.

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Smarter Way of Buying a Home.

April 18, 2011 – 1:41 pm

Profit is the keyword, when it comes to Investment and Investment in real estate rotates around purchase, ownership, management, rental and sale of property.  It involves a lot of planning, especially because of the rapid changes in the economic scenario.

Here’s a checklist of the things you need to keep in mind:

  • The Location: While buying a home, location is the most important factor. It is essential to take several factors into account. If you are to reside in a house, it becomes important to see the other factors such as propinquity to the work place, school, family and friends. No one would mind spending a few lakhs of rupees if the house were close to ones child’s school or ones office.
  • Th Condition of the Home: If you are buying an old house, scrutinize it carefully. No one don’t want to waste a lot of money in repairs later on.
  • Nearness to leisure time areas: You may want to live in a neighborhood with parks, libraries and walking trails, local markets, shopping malls, etc. as these are the points where you can relax or have fun on daily basis and also fulfils your basic needs of life.
  • Future Prospects: You can have an idea about the property by the area is going to develop by looking at the current local real estate trends. Upcoming malls and hotels are a key of the kind of development that the region is expected to undertake. The more developed an area, the more valuable your property becomes. High property values are especially useful when you want to go in for rent out or selling, so that it gives you good profit.
  • Your Neighbors: Try to meet the people living in the neighborhood of the choice of your area. If they are unfriendly to the idea of having you as their neighbor, it’s likely to show in their behavior.
  • Finance: You need to work out the financial implications of buying a home. You will have to decide whether which home loan, which bank at pertaining interest percentage you want to opt for to finance your property. If you already have the money, you need to work out whether investing your money in a property will affect your other expenditures in any way as you may need some for unforeseen emergencies.
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Master Plan 2025 Revealed

December 20, 2010 – 11:13 am

The national capital’s satellite township of Gurgaon, is currently witnessing a growing trend of high rise residential apartments in its skyline. As much as 60% of the total population residing in Gurgaon lives in these high rise societies built by private developers like DLF, Unitech, Emaar MGF, among several others.

Most of these colonies are gated domains; the trend is gradually shifting from individual plots to gated colonies, add experts, who add that more such residential high rises will come up in new sectors under the Master Plan 2025 which is still to be notified. Individual homes have issues concerning security, maintenance and cost of construction on plots, which are many times higher compared to owning an apartment. This is because the land prices are at an all time high and affordability is prime concern, especially when it comes to the middle-income groups.

The new draft development plan-2025 of Gurgaon-Manesar Urban Complex will cater to the needs of a projected population of 39.7 lakh, compared to the earlier notified plan of 2021, which was planned for a population of 37 lakh.

Under the new plan, the area covered has increased from 37,069 hectares to 37,314 hectares, of which 15,009 hectares has been reserved for residential purposes, which was 14,930 hectares earlier. Out of 12 projects announced in the new sectors, nine are residential highrise apartments while only three are individual plots and villas.
Individual villas in these projects are 3/4/7 BHK and of price range between Rs 1.75-3.05 crores for areas ranging from 2,500-5,889 square feet, depending on the location of the project. On the other hand, residential apartments of 2/3/4 BHK projects with average areas between 1,600-2,200 square feet are priced in the range of Rs 50-70 lakh.
The only plotted colony which was recently announced was in Sector 73, by a private developer. It seems some time away before Gurgaon sees more plots floated by HUDA with the growing land rates and security still a major concern.

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Building Trust

December 14, 2010 – 6:54 pm

Bellevue — the Phase 1 condominium towers of Central Park II in Gurgaon has been creating stir in the buyers in Gurgaon, for the infrastructure it provides.

“Bellevue is a rare example in India to have obtained quality certificates from Grant Thornton, Jones Lang LaSalle-India, KCB Associates, Dema Consulting and Manu Jain leading auditors and consultants. These certificates carry seal of approval from the consultants on specifications relating to the construction quality and the structural integrity of Bellevue. Certificates are going to be handed over to each apartment owner at the time of possession” says Vineet Nanda, vice-president of business development at Central Park.

Bellevue, comprising over 400 exclusively-designed apartments of 2,350 square feet to 4,650 square feet, offers modern range of amenities. These apartments overlook the swimming pool and the sprawling greenery on one side and the Aravali skyline on the other. 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, highspeed communication networks and beautifully designed park and play areas for children.

State-of-the-art construction technology, known as Mivan shuttering has been used in the project, to impart solid structural integrity and a high-degree of seismic resistivity. The project has been designed by one of the world’s largest and well-regarded architectural firms HOK (formerly Hellmuth, Obata + Kassabaum).
Bellevue is very close to the heart of the Gurgaon city centre, IFFCO Chowk, the Metro station and the international airport.
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 Special Economic Zones. 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.

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The METRO Effect

December 13, 2010 – 6:38 pm

As the Delhi metro rail moves to the various parts of the national capital region, easing the day to day life of locals in the capital, market watchers term it as a perfect opportunity to expand its real estate business.

Most of the people are seeking rental accommodation close to metro stations, which is making life comfortable and better for them. It is has also boosted the demand for rental accommodation as well as commercial properties close to metro stations. As the metro network expands beyond the capital, it is has improved infrastructure and real estate demands. Ghaziabad is one such example, with metro touching Anand Vihar and slated to move into Vaishali and Vasundhara in Ghaziabad soon, the realty scene of the entire area has suddenly witnessed a major change.

The Delhi metro network has served to be a huge relief to large number of daily and occasional commuters, who had to struggle to reach their destinations due to a poor public transport system and chaotic traffic.

Metro’s ingress into NCR cities would prove to be a game changer for realty players, and the metro factor has led to the increase in demand for flats of almost all the realty firms, said Anil Sharma, CMD of Amrapali group.    While the Metro is on the move, there is still a great scope to improvise its service.

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Anil Ambani’s answer to Antilla

December 8, 2010 – 6:24 pm

Antillia, Mukesh Ambani’s 4500 cr Altamount Road residence and world’s most expensive family home, will soon have competition from Anil Ambani’s new house at Bandra’s Pali Hill. Antillia towers hover almost all of south Mumbai at 170 m, if Anil’s 150 m new house gets the clearance, it would dwarf everything in its sight in Bandra.

Ravi Muthreja, spokesperson for the Anil Ambani-controlled Anil Dhirubhai Ambani Group (ADAG), confirmed that the plot on the Nargis Dutt road will house a residence for Anil Ambani and his family. The 1537 square meter plot where the Ambani house is being built came to their possession in early 2000, when Reliance gained control of BSES.

Members of the Pali Hill Residents Association (PHRA), who are opposing the project, revealed that the Ambanis have got permission to build a 66 m tall structure and applications have been moved to raise the height to 150 m.

Meanwhile, they are building their case to oppose any move to allow Anil’s house to rise to 150 m. According to them the building will affect the water reservoir which supplies water to the Bandra and Khar residents and would also be in flight path of the planes.

Anil Ambani currently stays with his wife, sons and mother at the 17-storeyed Sea Wind building at Cuffe Parade.

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Chintels India’s New Venture

December 6, 2010 – 5:36 pm

In a press conference today, Realty firm Chintels India Ltd. said it will invest about Rs 310 cr over the next 3 years to develop a residential project  in the National Capital Region. The company has already acquired 12.3 acres of land for Rs 103 cr. Chintels India Ltd. has been active in the field of real estate in the NCR since 1992.

“This project will be developed in a location next to our ongoing township with Sobha Developers at Gurgaon. We will invest about Rs 205 cr in construction work of this group housing project,” Chintels India Joint Managing Director Prashant Solomon told PTI.

Chintels Serenity, group’s housing project will house 555 flats of 1,720-3,200 square  ft., with prices between Rs 64 lacs and Rs 1.2 cr. Construction is likely to start from May next year. Currently, Chintels India, has a land bank of about 450 acres, and is developing one integrated township and four group housing projects in association with Sobha Developers in Gurgaon.

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REAL plans for Godrej

December 4, 2010 – 10:28 pm

Godrej Properties Limited (GPL), real estate segment of Godrej Group, has revealed its plans for the development of residential housing project at Mohali in Punjab, involving a capital of about four hundred and fifty crore rupees.

The company also has future plans for several cities, including NCR, Mumbai, Bangalore, Pune, Chennai and Chandigarh for development of residential projects in line to cash in on the growing demand for housing from urban sector.

“We are looking to develop a residential project in Mohali with a minimum land of 20-25 acres…we are in talks with certain land owners here for (entering into a) joint venture in this project,” stated the company’s MD Milind Korde.

GPL is already in the process of developing its first Rs 400 crore commercial project in Chandigarh, going to be completed by September next year. Company’s focus towards growing in the real estate sector of northern region can be realized from the fact that it has set up a 3,500 square feet office which will take care of its projects in northern region.

GPL, has presence in 11 cities across country, and plans to develop 83 million square feet of area in the span of next 8 to 10 years. It seems Godrej Properties is also keen on redevelopment of real estate projects particularly in Mumbai as they revealed their plans to go into redevelopment of areas like old buildings, cooperatives society houses and slum area in Mumbai. The company’s has other ongoing projects in Gujarat, Mangalore, Kochi, Chennai, Gurgaon, Pune, Bangalore, and Hyderabad.

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Loan Scam Backwash

December 2, 2010 – 4:38 pm

After the loan scam was unearthed last week, realty developers and companies providing home loan are finding it difficult to raise money from retail investors through corporate fixed deposits, despite offering coupon rates close to the maximum permissible limit of 12.50%.
The retail investors have become very cautious of the investments they make in the corporate schemes in the real estate sector. The schemes which were popular among the investors are also suffering from this blow.
Realty majors like Ansal Housing & Construction , Ansal Properties, Jaiprakash Associates and Unitech are offering coupon rates in the range of 10.5-12 .50%. Godrej Properties is said to be offering 8-9 % as interest on deposits.
In future the real estate companies may have to face more strict checks and laws say investment experts.  They also fear that the real estate companies will have to suffer if the alternative sources of funding are blocked. This may lead to the fall in actual sale of properties.
As one of the consequences of correction in overall property prices the realty developers may have to replenish margins that have fallen and will have to either borrow money or build more property in order to fill the gap in the lost margin.
In the wake of the loan scam Maneesh Kumar MD, Burgeon Wealth Advisors, added  “Real estate companies have not had an easy time ever since the meltdown of 2008 in rising funds. Recent headlines have further dampened the already difficult fund raising efforts by them.”

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35% people believe there will be no change in market

August 19, 2010 – 3:14 pm

Homeowners doubt these days of the future home values due to which they plan to put their home up for sale if they see the same conditions prevailing in next six months too.

According to a survey, 33% people believed that home values in their housing market are still above the bottom line while 38% believe that they have already reached a bottom.

28% homeowners expect a decrease in home values in the next six months. However, 30% of them are expecting an increase in their local market.

In totality, 27% of homeowners hope for an increase in their home values in the next 1 year, 12% expect a decrease in value, 35% say the value ill be same and 26% don’t have any opinion yet.

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CRISIL rated Raheja Universal Ltd at 3 stars

August 17, 2010 – 7:02 pm

Three stars
Raheja Universal Ltd’s is rated a three star on the scale of CRISIL. This implies that the proposed issue of Rs. 864 cr. is an average proposal as compared to other listed ones.

Mumbai will soon be gifted around 70 million sq ft of developed area by Raheja Universal out of which 26 million sq ft will be the commercial segment and 44 million sq ft will be residential segment.

The three stars received by the company from CRISIL reflect its strong position in the realty business in Mumbai. Due to its good execution track record and high quality construction, it has been able to maintain its image as a good brand. This brand name has been the major reason for the company being able to command premium prices over its competitors.

Also, other than this, the company owns an area of 1,202 acres across eight Indian cities.

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