www.arundevelopers.com

2012/12/16

Dream of affordable homes gathers dust in Maharashtra


Ihttp://zeenews.india.com/business/realestate/latest-news/dream-of-affordable-homes-gathers-dust-in-maharashtra_46543.html

Dream of affordable homes gathers dust in Maharashtra

Mumbai: An ambitious plan to construct 500,000 affordable homes in Mumbai, Thane and Raigad districts of Maharashtra is gathering dust due to "inaction and policy paralysis" on the part of the state government, a top realtors' body alleged here Wednesday.


The plan, jointly mooted by the Maharashtra Chamber of Housing Industry (MCHI) and the Confederation of Real Estate Developers' Associations of India (CREDAI), was submitted to the state government two years ago to bridge the gap between housing demand and supply and rein in realty prices.

"Even as housing cost is skyrocketing in Mumbai, the plan to construct 500,000 affordable flats as part of the realty industry and state government's initiative, 'Homes For All' gathers dust," MCHI-CREDAI president Paras Gundecha said here.

The realty industry's frustration came on the eve of the 'second anniversary of inaction' of signing the MoU with the state government (April 28, 2010) to find solutions to the burning problems of housing and arrest proliferation of slums in the country's commercial capital.

Realtors demanded a single-window clearance system for all housing proposals so as to expedite the projects.

"All that we wanted was a single-window clearance for all housing proposals to expedite the projects which get bogged down in official delays and red-tapism. All officials agree, but there is no action on this," said Gundecha.

Another office-bearer of the housing body alleged that "not a single file pertaining to building proposals" has moved ahead in the past 18 months or so, and this adds to nearly two years' delays on such projects.

A top government official, however, denied the accusations.
According to Gundecha, "A kind of policy paralysis" has gripped the Mumbai realty sector.
"On one hand, proposals are not being cleared leading to short supply of housing stock, on the other it has become fashionable to blame developers for the increasing cost of property. With barely any new project being cleared, market forces operate to create price imbalances," he said.
On the 'Homes For All' proposals, Gundecha pointed out that the government assured all help including legislative revamp, incentives to developers and authorising a nodal agency for a single-window clearance.

"But not a single paper moved after that, despite the MCHI-CREDAI reminders and meetings at various levels," he lamented.

Consequently, the dream of millions of commonersfor owning an affordable home in Mumbai remained on paper, though Maharashtra could have created history with this unique public-private initiative, he said.
IANS
First Published: Wednesday, April 25, 2012, 19:27

2012/11/15

What makes Talegaon so attractive ?


What makes Talegaon so attractive ?

The location of Talegaon in Pune is bang in the middle of the three cities – Mumbai, Nashik and Pune. Talegaon is situated on the Mumbai-Pune highway and enjoys favourable connectivity. As a result,
many companies have swooped down to invest in Talegaon. Investment by these companies has created a large employment base for the citizens and as a result they have flocked to Talegaon.
The industrial belt of Chakan (Chakan MIDC) and the automobile manufacturing hub are the main drivers of employment in Talegaon.

Some of the opportunities in Talegaon real estate market are created by :
Larsen and Toubro opening its plant
Bajaj and Jindal setting up facilities
General Motors producing the Chevrolet Beat and Spark at Talegaon in Pune
Talegaon is also very favourably placed from the important location of Hinjewadi which happens to be the major IT hub of Pune. The fact that close to 40,000 IT professionals are expected to work in Hinjewadi and that Talegaon is around 30 minutes away from it (approx 20 kms), makes Talegaon a hot destination among IT professionals.

The climate of Pune and Talegaon are ideal for residential housing. Compared to Mumbai which is around 2.5 hours away, Pune boasts of a hill station like climate.

Talegaon’s proximity to Mumbai via the Mumbai-Pune expressway gives Talegaon a major advantage in the Pune real estate market. In fact, the old Mumbai-Pune highway also offers good connectivity to Talegaon. Given this, Mumbaikars come down to Lonavala and Talegaon more often and many have based Talegaon as their weekend homes.

Another thing to note is that not only Mumbaikars but many Puneites are also making Talegaon their weekend destinations leading them to invest in their second homes. The pollution free climate and scant population make it a very attractive getaway. Obviously, this will not be the same forever and it is a matter of few years before Talegaon goes the same way as other parts of Pune have gone – sky rocketing prices and the unavoidable hustle bustle.

The infrastructure of Talegaon is undergoing massive changes. Residential societies are creating demand for basic amenities like schools and hospitals. Over the next few years, the availability of malls, schools and hospitals will increase significantly.


The property rates in Talegaon vary between 2200 psf (per square foot) to 3000 psf. This is on the lowest side in the Pune proprty market. In fact, Chakan also demands the same rate as Talegaon. So does Wagholi.
As far as properties for investment go, you could possibly be spoilt for choice. There are innumerable Pune real estate builders like the Siddhivinayak Group, Disha Direct, Om Developers, Naiknavare and Associates and many more who have thrown their hat in the ring and have launched residential projects. The one you cannot miss is Tata’s La Montana which has a plethora of amenities thrown in.
With so many builders jumping in the fray, you have apartments of all sizes and types available for you – 1BHK, 2 BHK, 3 BHK. Not to mention bungalows, villas and farmhouse plots. It’s all happening in Talegaon.

The residential demand in Talegaon will be on the rise in the future. In the Pune real estate market, Talegaon stands poised to hold its promise of safe returns over an extended period of time.
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What makes Talegaon so attractive ?

The location of Talegaon in Pune is bang in the middle of the three cities – Mumbai, Nashik and Pune. Talegaon is situated on the Mumbai-Pune highway and enjoys favourable connectivity. As a result, many companies have swooped down to invest in Talegaon. Investment by these companies has created a large employment base for the citizens and as a result they have flocked to Talegaon.

The industrial belt of Chakan (Chakan MIDC) and the automobile manufacturing hub are the main drivers of employment in Talegaon.
Some of the opportunities in Talegaon real estate market are created by :
Larsen and Toubro opening its plant
Bajaj and Jindal setting up facilities
General Motors producing the Chevrolet Beat and Spark at Talegaon in Pune
Talegaon is also very favourably placed from the important location of Hinjewadi which happens to be the major IT hub of Pune. The fact that close to 40,000 IT professionals are expected to work in Hinjewadi and that Talegaon is around 30 minutes away from it (approx 20 kms), makes Talegaon a hot destination among IT professionals.

The climate of Pune and Talegaon are ideal for residential housing. Compared to Mumbai which is around 2.5 hours away, Pune boasts of a hill station like climate.

Talegaon’s proximity to Mumbai via the Mumbai-Pune expressway gives Talegaon a major advantage in the Pune real estate market. In fact, the old Mumbai-Pune highway also offers good connectivity to Talegaon. Given this, Mumbaikars come down to Lonavala and Talegaon more often and many have based Talegaon as their weekend homes.

Another thing to note is that not only Mumbaikars but many Puneites are also making Talegaon their weekend destinations leading them to invest in their second homes. The pollution free climate and scant population make it a very attractive getaway. Obviously, this will not be the same forever and it is a matter of few years before Talegaon goes the same way as other parts of Pune have gone – sky rocketing prices and the unavoidable hustle bustle.

The infrastructure of Talegaon is undergoing massive changes. Residential societies are creating demand for basic amenities like schools and hospitals. Over the next few years, the availability of malls, schools and hospitals will increase significantly.


The property rates in Talegaon vary between 2200 psf (per square foot) to 3000 psf. This is on the lowest side in the Pune proprty market. In fact, Chakan also demands the same rate as Talegaon. So does Wagholi.

As far as properties for investment go, you could possibly be spoilt for choice. There are innumerable Pune real estate builders like the Siddhivinayak Group, Disha Direct, Om Developers, Naiknavare and Associates and many more who have thrown their hat in the ring and have launched residential projects. The one you cannot miss is Tata’s La Montana which has a plethora of amenities thrown in.
With so many builders jumping in the fray, you have apartments of all sizes and types available for you – 1BHK, 2 BHK, 3 BHK. Not to mention bungalows, villas and farmhouse plots. It’s all happening in Talegaon.

The residential demand in Talegaon will be on the rise in the future. In the Pune real estate market, Talegaon stands poised to hold its promise of safe returns over an extended period of time.
Path:

2012/11/04

Credai fears slew of VAT-related litigation - The Times of India on Mobile


http://m.timesofindia.com/city/pune/Credai-fears-slew-of-VAT-related-litigation/articleshow/17070409.cms


Credai fears slew of VAT-related litigation - The Times of India on Mobile


PUNE: The Confederation of Real

Estate Developers Association of India (Credai), Pune Metro, said on Friday that the state government's decision to stick to its stand on the Value Added Tax (VAT) on residential properties in the state - sold during the period June 2006 to March 2010 - will lead to multiple legal cases and cause ill-will between the developers and home buyers.


After the Bombay high court declined to interfere with the state's discretion to decide the tax rate October 30 and the state refused to change the rates it had declared earlier, realtors across the state had to rush to pay VAT on October 31.


Satish Magar, president, Credai, Pune Metro, said the developers have begun remitting their VAT liability though some couldn't remit their entire dues before the deadline. "WThe process of paying the tax is on and we have requested the sales tax authorities to condone the delay as their own system could not accept the rush of remittances which kept coming through the night of October 31," he said.


While that issue is solved separately,


Meanwhile, Credai members will have to now recover VAT which they paid on behalf of the apartment owners. Trashing the claims of some consumer organizations that it was not the customer but the developer who was liable to pay VAT, Magar said VAT is an indirect tax and like all indirect taxes the 'dealer' (a developer in this transaction) has to collect it from the customer.


Magar said the assessment of the VAT returns, which the developers have filed, and the recovery of the tax from customers are likely to lead to prolonged litigation. "Rule 58 of the Sales Tax Rules suggests three methods to determine the base value of an apartment for calculation of tax. We have followed the method that causes the lowest burden on a customer, but the sales tax officers may demand tax based on the method that gives the highest amount. This will certainly be subject of appeals and court cases which will take years to reach a solution."


On the other hand, the customers are agitated and apparently in no mood to pay anything as VAT dues, so the developers may have to resort to legal remedies such as civil suits for recovering the tax, Magar pointed out. "The Supreme Court has upheld the state's approach to the issue and the customers will have to ultimately pay up, though considerable delay and bitterness will mark this process," Magar said.


Highlighting the complexity of calculations necessary to arrive at the VAT amount for each apartment, Magar said, "The state has over 10,000 dealers who have to file 26 quarterly returns to fulfill their obligation to pay VAT. This works out to 2,60,000 returns for the sales tax officials to scrutinize. Also, as each apartment is sold at different points in time and at different stages of construction, the base value for working out VAT will be different for every apartment."


Credai had pleaded with the Bombay high court that the state be directed to modify the rate of tax to a flat 1% on the agreement value, which it is charging on transactions done on or after April 1, 2010, anyway. The court asked the state's counsel if this was acceptable and when the state declined the suggestion, dismissed the developers' case.


Magar said Credai would continue to follow up with the state government their request to modify the VAT to a flat 1%.

2012/10/25

good City= good transport = good society


What I have always felt is that our job is not just building Building's but building a Society & a Society is build only by our attitude as well actions towards the social cause!

“?? ??????? ??????? ????. ????? ????? ??? ????????? ???????? ?????. ??? ??????? ????????? ????. ???????? ???????? ?????? ???? ????? ??? ????? ????? ?????? ???? ????? ?????? ????????? ??? ??? ??? ????. ?????? ?????? ????????? ?????? ??????? ?????? ???? ?????? ?? ????????? ??? ????????? ?????? ????. ??????? ????????? ?? ????? ??? ??? ???? ??? ????? ???” - ???? ?????, ???? ?????? ??????????, ??????? ????? ???????? ?????? ?????? ???? ?????? ????????? ?????? ??? ?????? ?? ??????? ????? ???? ?????? ????????? ????????? ???? ????? ????????? ???! ?? ???????? ??? ???????? ?????? ??????? ???????????? ???????? ?? ????? ?????....“??? ????? ?? ????????? ????”, ?????? ??? ????? ????? ????? ?? ???????? ????? ???? ?? ???????? ??? ????? ?????! ?? ??????? ????? ?????? ????????? ?????? ??????????? ?????????????? ?????. ????????? ?????? ???????? ?? ?????? ???? ???. ?????? ???????? ???? ?????? ???? ?????? ??? ???? ???? ?????, ??? ??? ????? ?????????? ??????????? ?????????????? ?????? ???? ???? ????. ?????? ?? ???? ????? ???????? ????????? ???? ?????? ????????? ??????? ?????? ???? ??? ?? ????? ?????? ???. ???? ?? ??????? ?? ??? ???? ?????? ??? ???? ????? ?????? ???, ???? ??? ??? ???? ????? ?? ????? ?????? ??? ??? ?? ??????? ?? ???? ???? ????????? ?????? ?????????? ??????? ??? ??? ?????? ??????? ????????????? ????? ???? ?? ?? ????? ???????? ????? ???. ?? ?????? ?????????? ?????? ???? ???? ?? ?? ?????????? ???? ?????? ????. ?????? ?????? ???? ?????? ???? ???? ???? ????, ??? ????? ?????? ??????? ??? ??? ????. ????????? ?????? ????????? ?????? ? ???????? ?????? ???? ?????? ????? ????. ????????? ???????? ??????? ???? ??????? ??? ??? ?? ??????? ??????? ?????????? (????? ?????????? ???? ??????? ??????????) ???? ????????? ????? ???????? ??? ??????? ???! ???????? ?????? ?? ??? ??????????? ??????, ????? ??? ??????? ????? ???? ?? ?????? ?????? ?? ????? ????????? ???????????? ?????? ???. ????? ??? ?? ??????? ???????? ????, ??? ???? ??? ????? ???? ???? ??????? ?????? ??? ??????? ??? ????! ??????? ????? ??????? ????????? ?????? ????????????? ?????? ?????? ??? ??? ???????? ??? ??????? ????? ???? ???? ?????? ??? ?????? ???? ??????! ?????????? ?????? ??-?? ??????????? ????????? ???? ????????? ??????? ???? ?? ????????? ??? ???! ?? ????????? ????????? ?????? ??? ???! ???????????? ????? ???? ????????? ?????? ??? ??????? ???????? ?????????? ????? ????????? ???, ???????? ??????? ????????? ????????? ?????? ??? ?????. ??????? ??????? ????? ??????????? ????? ??? ?????: ?. ???? ?????????? ???????? ??????? ??? ??? ???? ???????????? ?? ???????????? ???? ?? ?? ???? ???? ???. ???????? ??? ????? ?????? ??? ???? -- 1) ??? ???? ???? ????? ?? ??????????? ????????? ?-? ???? (???? ?-?? ???) ???? ???? ??? ?? ???????????? ?????? ????? ??? ????. 2) ??? ????? ?????? ?????? ???? ????. 3) ?????? ?????????? ?????? ???? ?????? ?????? ??????? ??? ????????? ?? ?????? ?????? ???? ???? ????? ????? ?????? ???? ??? ???? ?. ?? ????????? ????????? ???????: ??????? ??????? ???/????????? ?????? ?? ?????? ???? ???? ???? ????. ?????????? ?????????? ????????? ???? ???????? ???? ????. ?. ???? ????????? ??? ??????. 1) ??????? ??????? ?????? ??????. 2) ?????????????? ????? ?????????? ???????????? ?? ???? ????????? ????. 3) ??????? ????????? ????? ????. ???????? ?? ????? ???? ????. 4) ?????? ???????? ???????????? ????? ???? ??, ???????? ?????????? ???????? ??? ?????. ?. "??????? ???????? ???????? ?????? ???" ?? ????? ???????????? ?????? ????????? ??????? ?????? ??? ????. ?? ????? ???? ????? ??? ?. ??? ?????? ???????? ????? ???????? ????? ??? ????. ??????? ??????????? ??? ??????????? ????? ?????????? ????? ?? ????? ???? ???? ???? ??? ????. ?. ???? ????????? ??????? ??? ???? ?????????? ?????, ????? ??? ?????????? ??? ?? ??????? ?????? ????. ?.????????? ?????? ??? ???? ???? ?? ??????????? ??????? ???????? ????????? ?????? ???? ??? ?????, ?? ????????? ????????? ???? ??????????? ?? ??? ??????? ????. ?. ????????? ?????? ???????? ???????????????? ?????. ?? ???????? ???????? ????????? ????? ?????? ???? ??? ????, ??? ??????????? ?? ?????????? ???? ???? ????. ?? ???????????? ????????? ?????? ?????? ??????????, ??????? ??? ????????? ??? ????. ?? ????? ??????? ???????? ???????? ????? ?????? ????? ??? ????. ???? ??????? ??? ???????? ?????? ???????? ????????? ????? ??? ????. (???? ?? ?????? ???) ?. ????????? ?????? ???????? ???? ????????????? ?????? ????????? ???????? ????????? ???? ???????? ??????? ?????????? ??? ????? ????? ????. ??. ??????????? ?????? ???????? ???????? ???????? ??? ???????? ?????, ???? ???? ?????????? ?????????? ?????? ?????? ??? ??????/????? ???????? ?????? ????????? ??? ?? ??? ??? ????. ??. ????????? ?????? ?????????????? ???? ???? ??? ???? ?? ?????????? ?????????? ?????? ???? ??? ????. ?????????? ?????????? ?????? ??? ???? ?????? ?? ???? ??? ????. ??. ???????? ????????? ??? ???????? ??? ????? ???????? ???????? ????????? ?? ??? ??? ?? ?????. ?????????? ?????? ??? ??? ????. ??? ???????? ???? ???? ??? ????? ????, ????? ???????? ???? ?????? ??? ???? ??? ?? ??? ????? ??? ???????? ???????? ????. ?????? ?????? ?????? ?? ???? ??????? ???. ???????? ??? ??????? ????????? ?????? ??????????? ???? ??????? ?????? ????? ?????????????? ?????? ????. ?????? ???????????? ????? ???????? ??? ??? ???? ??? ??????? ????? ??????? ??? ??????? ???? ??? ????. ??????? ??????? ??? ??? ???? ?????? ?????. ??????? ????? ??? ?????????? ?????? ?????? ?????? ???? ??? ?? ?????? ?????? ???????? ??? ???. ????? ????? ??? ???? ?? ?????????? ??? ???????????? ??????????? ?????????? ???? ???? ????? ???? ??????? ????? ??????????? ???-?????? ?????????? ??????? ??? ??????? ?????? ????? ??? ????? ??? ?????????? ??????? ????? ???????? ???? ??????????? ?????????? ?????? ????? ??????? ?????????? ?????? ???! ???? ?? ???????? ?? ?? ???????? ?? ???? ???????? ????? ??? ? ?? ???? ?????? ?????? ???? ????? ??? ????? ??????? ??? ?????? ?? ???? ???????? ???? ???????? ???? ???? ?????? ??????? ?????? ??? ???? ???????? ?????????? ???????? ????? ??? . ?? ???? ????? ????????? ?????? ??? ?? ???? ???? ????????? ??????????? ??? ???? ?? ?? ??? ?????????? ?????? ???????? ?????? ???? ???? ?????? ??? ???. ????? ????????? ?????? ???????? ?? ????? ??????????? ???????? ??? ??? ?? ?????? ?????? ????. ?? ?????? ?????? ???? ???????? ???? ????? ???? ???? ???? ???? ?? ??? ?????? ????????? ?????? ???? ?????? ????? ???? ?????? ??? ???????? ?????? ??????????????????? ?? ????? ??????? ???? ?? ?? ??????? ??? ???? . ?? ?????? ??? ?? ??????? ??????? ???? ?????, ???? ??????? ???? ??????? ???? ??? ?????? ??? ???? ! ??? ?????? ????? ??? ??? ???????? ????????? ?????? ????????? ????? ???, ?? ???? ???? ????????????? ???? ?? ????? ???????? ??? ????????? ?????? ???! ???? ???????? ??????? ?????????? ???????-???? ?????, ??????????, ????

2012/10/18

Cut in home loan interest rates will spur demand in the housing sector


http://m.economictimes.com/markets/real-estate/realty-trends/cut-in-home-loan-interest-rates-will-spur-demand-in-the-housing-sector/articleshow/16599026.cms

Cut in home loan interest rates will spur demand in the housing sector

A huge impetus to the real estate sector could help arrest the present slowdown in the economy to a projected growth rate of around 6% in 2012-13 as against 6.5% in 2011-12 and 8.4% in 2010-11 , real estate experts say.

In 2008-9 also, when India's growth had slowed down to 6.7%, from 9.3% in the previous year, the revival of the real estate sector due to launch of houses in the affordable segments led to a turnaround in the economy , which saw a growth rate of 8.4% in 2009-10 .

Lalit Kumar Jain, president of real estate developers ' body Credai, says that a revival in the real estate sector will have a positive impact on 250 industries. Jain, who is demanding that real estate sector not be meted stepmotherly treatment by the government, says that if the sector is given what it deserves, it will help revive the economic growth in the country.

As the home loans given by banks to homebuyers are backed by solid collaterals, the chances of default by borrowers are very low.

But still, as the banks are discouraged by the RBI in giving home loans, they charge high interest rates, in the region of around 10%. Jain says that whatever non-performing assets have been created in the homeloan sector, it is mainly due to delay in the payment of instalments. But, overall, there are hardly any cases where banks could not recover their money in the housing sector. Jain says that, therefore, banks should charge an interest rate of 7% on home loan. In fact, as the net loss due to non-performing assets in the home-loan segment is almost nil, banks should lend at the rate equivalent to cost of funds including the administrative charge. If home loan is brought to 7%, there will be a spurt in demand in the housing sector, which will help revive the economy. In fact, if interest rate on home loan is brought down to 7% from the present level of around 10%, an individual's borrowing capacity will go up.

If the interest rates fall by around 3 percentage points, an individual's borrowing capacity will go up by almost by 25%. That means, with the same EMI, he can borrow almost 25% more at 7% interest rate than he could have borrowed at 10% rate of interest.

Getamber Anand, officiating president of Credai, NCR, says: "An interest rate cut will trigger a boom in the real estate market and is sorely needed to support this sector. This has the potential to kick-start nearly 300 affiliate industries, which can contribute to the IIP. To aggressively kick-start this sector and uplift the sentiments of the retail customer, this rate needs to be brought down to a single-digit figure."

Real estate prices and rentals rise considerably in Pimpri-Chinchwad


Real estate prices and rentals rise considerably in Pimpri-Chinchwad

PIMPRI-CHINCHWAD: As areas under PCMC witness marked improvement in infrastructure, real estate prices across all sectors in the region have risen considerably. In the same league, the number of properties going on rent have also seen a considerable appreciation.

Industry observers in the realty sector say that on an average, properties on rent increased 50 percent in the past five years, while rentals are still appreciating. Moreover, availability of affordable properties when compared to neighbourhood localities is another key contributor to the boom in Pimpri-Chinchwad residential property sector.

THE PERFECT DESTINATION

As per a recent study conducted by 99acres.com, a real estate website, Pimpri-Chinchwad's advantage is being a prominent automobile hub in western India. This — along with a strong presence of IT companies in Hinjewadi — make areas like Wakad, Pimple Nilakh and Pimple Saudagar a perfect option for senior management professionals. On the other hand, Ravet, Talegaon, Moshi and Akurdi offer affordable and low cost housing for all categories of people.

Vineet Singh, business head of 99acres.com said, "Areas like Wakad, Pimple Saudagar, Spine Road and Pradhikaran have witnessed the highest rental appreciation in Pimpri-Chinchwad. People working in the nearby auto and IT hubs prefer to stay close by. The picture five years back was totally different. Most infrastructure projects were still taking shape."

PROPERTY BOOM

Singh also maintains that on an average the property values has seen a hike of 10-12 percent this year. "The convenient location near the emerging Mumbai-Pune growth corridors has come into the limelight and attracted buyers and investors not only from Pune, but from Mumbai and other cities as well," he said.

Anil Pharande, chairman of real estate developers, Pharande Spaces also agreed with rising rentals. He said that most areas that are well connected to Hinjewadi IT Park, the MIDC manufacturing belt and the upcoming International Convention Centre are witnessing rental appreciation.

Pharande added, "The highest demand for rental properties is for studio apartments and 1 and 2 BHK flats. These demands stem from a migrant workers."

He added further, "Three and 4 BHK flats are in demand by a smaller a section of people comprising top-management employees. Property prices and rentals are dictated by demand and infrastructure development, both of which are quite high in this region. Many investors are purchasing flats in order to rent them out because of the increasing demand for rental properties," he said.

2012/08/22

Shrinking homes


http://m.indianexpress.com/news/%22homes-no-bigger-than-a-bus%22/989700/

Homes no bigger than a bus - Indian Express Mobile

Yeh kamra toh shuru hone se pehle hi khatam ho gaya, bhai!” This piece of wit from the sidekick ‘Circuit

’, of Bollywood blockbuster ‘Munnabhai MBBS’ fame, is being played out in the affordable housing sector today, where real estate developers are offering homes that measure a mere 250 square feet. “Which is, as big as a bus!” said a real-estate expert who did not want to be named. Affordable, but how liveable?

In order to make the dwelling more affordable, reducing the saleable area is one of the several measures that are being adopted by real-estate developers who have entered the market in the National Capital Region, Mumbai, Ahmedabad, Kolkata, Pune, Bangalore and Chennai.

As a result, affordable houses have shrunk by at least 40 per cent of the sizes that existed a decade ago, say real-estate experts.

“According to our estimates, the sizes of affordable houses in Gujarat has shrunk by at least 40 per cent in the last decade,” says Nirav Kothary, head of industrial real-estate division at Jones Lang LaSalle (JLL), a global property consultant.

A recent report titled ‘Affordable Housing in India’ from JLL clearly states, “In order to reduce costs and improve affordability for the buyer, developers have adopted several measures. This includes units having reduced saleable areas of 250-350 square feet for one room-kitchen, and 400-500 square feet for one bedroom-hall-kitchen formats.” Experts describe these homes as being no bigger than a state transport bus operating in the state.

Real-estate developers say that the rising cost of land in urban centres is the main cause behind the shrinkage in the sizes of affordable houses. While experts believe that smaller housing units are an apt answer for India’s housing problems, a research study conducted by the Hyderabad-based Indian School of Business (ISB) in 2011, points out that families feel “uncomfortable” to live in houses that are smaller than 700 square feet.

Even large affordable housing players like Tata Housing are offering units as small as 293 square feet (carpet area) and in Ahmedabad it costs Rs 8 lakh.

In the period 2009-12, affordable housing projects priced between Rs 5-10 lakh have been sold on an “application model” due to huge demand, with multiple takers for the same unit, says JLL.

Thriving market, new suburbs

Increasing land prices have also pushed affordable housing projects away from city centres. Mumbai and NCR have affordable housing projects located 65-75 km away from the city centre. On the other hand, Ahmedabad and Kolkata provide better proximity, with projects located at a distance of 15-20 kms. Bangalore, Pune and Chennai also have projects after a distance of 25-30 km from the city centre, states the JLL report.

The shortage of land has been exacerbated artificially by poorly conceived central, state and municipal regulations. As a result, land prices in India are much higher than intrinsic levels that can support mass real-estate developments.

Mumbai is currently leading the affordable housing sector, with over 15 projects. Karjat, Palghar and Boisar in the neighbouring Thane and Raigad districts are the popular locations for homes at that price point. In Ahmedabad, the localities of Narol and Vatva have multiple ongoing projects.

Apart from Tata Housing the other players are Value Budget Housing Corporation, Foliage, DBS Affordable Homes and Nirman Group. Other big players such as HDIL and Usha Breco Realty have been successful while Mahindra Lifespaces, TVS Housing and S Raheja have announced future developments targeting this segment are.

“There cannot be houses as small as 250 square feet,” says Umang Thakkar, CMD Dharmadev Infrastructure which is currently building 10,000 affordable housing apartments in various areas of Ahmedabad and start at 600 square feet.

Thakkar who has been in the affordable housing business for the last 20 years feels that rising prices of land and the changing lifestyles of people have caused houses to shrink. “The prices of land have risen several fold over the last few years. Moreover, people no longer live in joint families. There are more number of singles and migrants who prefer smaller houses,” says Thakkar.

In order to ensure low construction cost, the building structure is typically low-rise with Ground+ four floors, without a lift. “The low-rise structure and adoption of technologies such as aluminium formwork and building information modelling enables developers to complete the project within a short period of 18-24 months, thus decreasing the collective time and better returns,” the JLL report states.

THE AFFORDABILITY GAME

To make the housing project more affordable for the buyer, developers are adopting the following measures:
Limited options: Units offered are mostly one room-kitchen and one-bedroom-hall-kitchen formats
Reduced areas: Units have reduced saleable areas of 250-350 square feet for one-room-kitchen and 400-500 square feet for one-bedroom-hall-kitchen.
Low construction cost: Structure is typically low-rise with ground+3 or ground+4 floors, without lift.

Shorter period of construction: The low-rise structure and adoption of technologies such as aluminium formwork and building information modelling enables developers to compete the project within a short period of 18-24 months, thus decreasing the collection time and improve returns.

2012/07/19

Policy paralysis hit realty sector in big way: CREDAI


Policy paralysis hit realty sector in big way: CREDAI

NEW DELHI: Realtor's body CREDAI today said the government's policy paralysis has severely impacted the real estate sector which is facing stagnation in growth.

"The economy

is in a bad shape and there is an all round despair. We have been witnessing a widespread criticism -- in India and abroad -- and policy paralysis has impacted the real estate industry in a big way," CREDAI National President Lalit Kumar Jain said in a statement.

Jain said the government needs to appreciate the fact that realty sector supports over 250 other industries, contributes 11 per cent to GDP and is the largest employment generator after agriculture.

CREDAI, the apex body of real estate developers from across the country, has convened its governing council meeting in Delhi tomorrow to take stock of the housing scenario in the country, the statement said.

The meeting assumes significance in view of the fact that real estate has been experiencing stagnation in its growth despite the housing shortage touching 26 million, it added.

Jain said the CREDAI's governing council would chalk out a plan and then announce it.

Real estate sector is witnessing slowdown in demand due to high interest rates on home loans since last couple of years and economic slowdown in global as well as domestic market.

Almost all the developers have reported decline in net profit from last several quarters.

2012/07/17

Article: Numerous religious beliefs drive the Indian realty sector


Numerous religious beliefs drive the Indian realty sector


A saying goes that the best investment on earth is earth. In the words of Charles Dudley Warner : "No man but feels more of a man in the world if he have a bit of ground that he
can call his own. However small it is on the surface, it is four thousand miles deep; and that is a very handsome property . To own a bit of ground, to scratch it with a hoe, to plant seeds and watch, their renewal of life, this is the commonest delight of the race, the most satisfactory thing a man can do."

Especially true for Indians, for whom home ownership has the most positive and uplifting effect. How the face beams with a megawatt smile when they start talking about their own home... 'sadi kothi' (my house)!

A house is not just a house - it stands for safety, security and there is great deal of pride in ownership of this unique asset for an Indian. Owning a house is a keystone in financial and emotional security. You aren't buying a space to eat and sleep. It is where you go after a hard day on the job - it is your 'safe haven' .

India, with its unique social landscape, is driven by numerous religious beliefs and, for most people, they are sacrosanct.

To approach the Indian market one has to be mindful about these social realities. One significant trend is of buying during Navaratra and Diwali. In Indian real estate industry, it is common knowledge that one third of the annual sales happen during Diwali.

On an average, the festive season stokes up real estate transactions by 25-35 %. On the contrary the "Shraadh" period typifies stalemate and a complete lull in the industry . This period is utilized for marketing and research activities to set the ground for sales during festive season starting from Dussehra to Diwali.

The real estate market operates on trust, rather than it being a plain commercial deal. People find brokers, more from word or mouth and references and bestow full trust on these agents. Brokers have a great deal of influence on the decision-making process and house hunting of a common man; hunting a house without a broker is akin to fighting a legal battle without a lawyer.
Even though things are changing now, and investors keep a keen eye on the internet platforms that provide reams of data on every locality and project, the final call, however, is made with the 'trustworthy' brokers. The New Age broker is becoming much more professional with even the term 'brokerage' rechristened as 'transactions' !

The other important emotional driver during house purchase is the family. "Family is the real engine or driving force of Indian real estate market. Strong family ties play a pivotal role; even today, if a person is buying a house, he consults his full family before a final decision," says Sonika Khurana, Planning Head, Vardhman Estate & Developer (P) Ltd.

An individual may zero in upon a property , but a final call happens only with consensus of family members. The stamp of approval of elders is seen as a must.

Family often lends financial support, without any 'interest' and, at times, without any expectation of return of their money . How else would one imagine people at the beginning of their career in their early thirties buying homes in metros; bank loans notwithstanding, it cannot be without the support of their family. So whether it is parents, in-laws , siblings - all have a role to play in that home purchase.
Some prefer to buy house in proximity to their extended families. And even those who, due to professional and sundry other reasons, are living in another city or country, are very keen and particular about the 'safety' and 'security' of their parents. "I am looking for a flat for my parents aged 70 and 65 in Gurgaon . I am keen on a place for them which has constant power, water and most importantly , tight security," says Amol Mehta, a US-based NRI.

Rajeev Talwar, the managing director of DLF Universal Ltd, says: "A majority of customers are senior people - in their middle ages and beyond, since only at that time can one have this kind of affordability . One of the major reasons they come to this elite community of DLF apartments, besides exclusivity, is safety and security - something that their children , especially if they are living elsewhere , are very particular."

Vastu compliance and east-facing property are other beliefs that drive the choice of customers. "People usually prefer eastfacing property. As the Sun rises in the east, this direction symbolizes life," Sonica says, adding, "According to vastu principles, the main entrance of a house opening up to the east or the north is considered best."
In fact, there is a new emerging trend of hiring 'astro' architects. Neeta Sinha, an 'astro' architect, has a clientele who are a veritable who's who of Bollywood and the corporate world (like Amitabh Bachchan, Shah Rukh Khan, Kirron Kher, Karan Johar, Punj Lloyd, Kotak Mahindra, ICICI Ventures, Cox & Kings, among others).

http://articles.economictimes.indiatimes.com/2012-07-14/news/32675068_1_festive-season-real-estate-indian-realty-sector

Maharashtra Bill to set up real estate watchdog - Indian Express Mobile

2012/07/09

Real estate funds clock high returns


http://forbesindia.com/blog/moneyball/real-estate-funds-clock-high-returns/


Real estate funds clock high returns


Real estate funds have been investing in India for more than six years. They started investing int
o the Indian markets after the release of Press note 2 in 2005 which opened up construction and development for FDI. Institutional investment into the real estate was on a roll. Many of these funds who invested at that point in time are now heading for maturity and are exiting their prime investments. Foreign funds who invested into the Indian markets found it much tougher to operate as compared to their Indian counterparts.

Pranay Vakil of Knight Frank in a podcast has an interesting take on the hurdles that foreign funds faced while investing in the Indian real estate market and how some of them managed to survive.

According to a report by Jones Lang Lasale, out of the $13 billion invested in the real estate sector, about $3.2 billion of exit has been recorded through 80 transactions. In general, the returns to investors have been satisfactory. Indian real estate (RE) investors have returned around 24% of the capital invested. This performance, considering the global investment scenario looks satisfactory as the global average for RE investors in terms of returns works out to around 4.5%.

Real Estate has the highest share in terms of value

The majority of exits have happened in the residential segment followed by commercial office segment. Here it must be noted that post the financial crisis investors have mainly concentrated on the residential space as compared to office space and this call has reaped higher returns. Institutional Investors have realized that residential space is not much affected by global factors. Residential segment has remained resilient through out the financial crisis in most of the tier I and tier II cities resulting into good returns. Thus, 46% of the exit for RE investors has taken place in through the residential space. These investors also made heavy exit through land parcels which accounted to 22% in terms of asset class.

It is interesting to note that land is the only asset class that has given the highest return to investors. The exit multiple for land is around 4.75x. Mumbai and NCR-Delhi together account for nearly 72% of the total value of PE exits. These are areas that are on the radar for all the new funds because of the predictability of demand and ease of exits.

Land has turned out to be the best form of investment

Typically, for any PE fund manager the biggest parameter for any investment happens to be exit. More than 69% of the total exits have happened through promoter buybacks both in value as well as the number of transactions which are more prevalent in the commercial spaces.
Wachovia, HDFC, Kotak Realty, ICICI ventures and Indiareit are some of the funds that have managed to give above average returns while offshore funds were the biggest losers.

In an earlier chat with us, Pranay Vakil explained why real estate prices continue to remain high despite any demand.

Arun Gupta

2012/07/05

Rich households in India prefer disciplined investments


http://business-standard.com/india/news/rich-households-in-india-prefer-disciplined-investments/479331/
Rich households in India prefer disciplined investments
Rich households in India prefer disciplined investments
BS Repo
rter / Mumbai Jul 04, 2012, 00:26 IST
The investment allocation to debt by ultra high networth households (HNHs) increased nine per cent in 2011-12 and it remained constant for equities. Investments in real estate dipped seven per cent compared to 2010-11, although realty's share among asset classes remains relatively high since ultra HNIs expect healthy returns over the long term. But generally, the appetite to take risk was subdued, with greater preference for a disciplined rather than opportunistic approach, particularly in high-risk instruments like equities and real estate. “Alternative assets like art are yet to catch up as an investment avenue in India,” said Mukesh Agarwal, president of CRISIL Research.


“The fact that so many ultra HNIs said their spending habits had not changed due to the slowdown is an indication they do not expect the slowdown to continue for long. However, it would be interesting to see whether the caution that has crept into their investments would spill over into their spending if the economic crisis persists longer than expected,” he added.

Currently, metro cities account for more than half the ultra HNIs. But that may dip by 3.5 percentage points in 2016-17 as cities like Ahmedabad, Bangalore, Hyderabad, Nagpur and Pune would see an increased number of HNIs.

While ultra HNIs in non-metros were extremely conscious about which brand of school their child should go to, their counterparts in the metros factored various other attributes such as curriculum and the quality of faculty.

Similar to the first edition, this time also the study identifies three distinct profiles of ultra UHNIs -- the inheritor, the self-made or entrepreneur and the professional.

CRISIL used the 'Idea' method to establish the findings of the report, that is, Income and Demographic Analysis, using NCAER data of bucket-wise income, census data on the number of households and GDP growth.
Arun Gupta

2012/06/11

dollar appreciating in value compared to the rupee, more NRIs are looking forward to investing in real estate


http://m.economictimes.com/markets/real-estate/realty-trends/nri-real-estate-investments-rise-in-mumbai-every-time-the-dollar-appreciates/articleshow/13960446.cms

REALTY TRENDS
With the dollar appreciating in value compared to the rupee, more NRIs are looking forward to investing in real estate in India. Since Mumbai is a booming realty market, NRIs have always considered it to be a safe bet to invest in the city.

"Generally , NRIs are looking at this period as an extremely advantageous one for realty investments. The Government has been making proactive policy changes clearly aimed at routing more NRI investments into India," says Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India.

"We have experienced a surge in NRI investments every time the dollar gets stronger. Considering the current scenario where the rupee has depreciated by nearly 23 per cent in the last six months or so, NRI investments are bound to increase significantly," says Manju Yagnik, Vice-Chairperson , Nahar Group.

The confidence levels of NRIs are also high since many amongst them have already earned and continuing to earn huge returns on their earlier investments.

"With exchange rate of the dollar rising, this is augmenting interest among expats for investing in properties in India, especially from locations like Dubai, Hong Kong and the UK. The interest levels have gone up in the past four months and Mumbai being a rank one city always has a higher traction," says Shveta Jain, Director, Residential , Cushman & Wakefield India.

According to Rajendra Karia, Past President, AREA Group and Convention Organiser , NAR India 4th Convention , "In the Mumbai realty market, inflows from the UAE and other GCC countries should be highest across the next few months." He elaborates that as the annual vacation in schools in the GCC start from July, many Indian families come for their holidays to India in the July-August period, and this is where most construction sites in and around Mumbai will see maximum number of NRIs visiting with the intent to grow their hardearned petro dollars.

Kousal Raman, an NRI settled in Sharjah, says, "Even though the real estate prices in Mumbai have not substantially reduced, it makes a lot of sense to invest in real estate now as appreciation of the investment is far higher in this city than any other."

Apart from the advantages NRIs have due to the depreciating rupee, developers are also offering discounts. "The 20/80 scheme and 10/90 schemes offered to patrons at Nahar's Amrit Shakti has been a major attraction for NRIs and 55% of this segment who have purchased their apartments at our township has availed of this scheme," avers Yagnik.

Arun Gupta

2012/06/01

India No. 3 in world in realty price rise - The Times of India


http://m.timesofindia.com/business/india-business/India-No-3-in-world-in-realty-price-rise/articleshow/13860510.cms
India No. 3 in world in realty price rise - The Times of India on Mobile
MUMBAI: Even as first-time buyers are exhausting their savings to buy a home, realty rates in India are going through the roof. Property prices increased by 12%, propelling India to third position among 53 countries where prices have appreciated in the past year.

The global house price index survey by property consultants Knight Frank shows that Brazil recorded the strongest annual growth (23.5%) in the past year, followed by Estonia with a growth rate of 13.9%. Globally, however, the picture isn't so rosy, the index shows.

The index is compiled on a quarterly basis using official government statistics or central bank data where available.
Property prices rose 0.9% in 2011-12 globally, shows survey According to Samantak Das, national head (research) of Knight Frank, intrinsic factors drive property prices in each city. "Base prices in tier-2 cities like Bhopal and Guwahati are affordable compared to big cities like Mumbai, which are reeling under price pressure. The price difference in turn reflects on flat sales across various cities across the country,'' said Das.

According to house price index survey by Knight Frank, while real estate markets in some countries are doing well, globally picture doesn't look so rosy. "Global property prices have seen their weakest annual performance since depths of recession in 2009, recording 0.9% growth in the year ending March 2012. Doubts over Eurozone's future, along Asian governments' efforts to cool their markets and deter speculative investment, have taken their toll and house prices were static in the first three months of 2012,'' says the report.

Times View

The fact that property prices in India are rising at such a fast clip is good news for the real estate business and clearly also reflects India's status as one of the world's fastest growing economies. However, it also means that affordable housing remains a dream for many who flock to our cities as job seekers.

An important reason for this is that mega cities continue to bear a disproportionate share of the burden of providing economic opportunities to people. The government can ease the pressure on these cities and hence on property prices by rapidly developing transport infrastructure and satellite towns that can absorb some of the load. That will not only spread growth more evenly, it will make life in the cities more pleasant for everyone.

Arun Gupta

2012/05/21

Real estate prices touch sky, not a bubble -research


http://businesstoday.intoday.in/story/real-estate-property-prices-rising-interest-rate-home-loan/1/24244.html

Realty Check

Real estate prices touch sky, experts rule out price bubble
Buyers jostle by each other, trying the

ir best to get the attention of sellers. Sellers have no time to breathe and can barely entertain the buyers. The scene could be from a bustling local market. But here sellers are smartly-dressed people beaming with confidence. It is a 'property fair' where developers and brokers are hardselling their properties and prospective buyers are eager listeners.


The Economic Survey 2011-12, struck a note different from the frenzy at the fair.
"Greater attention needs to be given to asset price bubbles in real estate and stock markets and their implications for the economy and the strength of the financial system," it said.

Are property prices higher than what fundamentals justify? Should the Economic Survey remark be taken as a cue to a price decline?

BEYOND BASICS

If you look at the real estate market on prices alone, it seems the demand is growing. But on the ground, the demand in six major real estate markets - Delhi, Mumbai, Kolkata, Chennai, Pune and Bangalore - has fallen significantly.

"The demand for residential property is subdued in most cities. This is primarily due to the 'wait-and-watch' policy adopted by end-users anticipating a fall in prices and interest rates on home loans in the near future," says Anshul Jain, chief executive officer at property consultancy DTZ India.
40 per cent is the decline in demand for new residential properties over the past one year.
"On an aggregate, the demand in India's six main markets has declined around 40 per cent in the past one year. New project launches have seen a drop of nearly 50 per cent," says Amit Goenka, national director, capital transactions, Knight Frank India, a property consultancy.

Basic economics says a product's price falls as demand declines. However, developers have been able to resist price cuts despite slowing sales, leveraged balance sheets and high interest rates.
"The real estate market has defied fundamentals in the recent past," says Shveta Jain, director (residential services) with real estate consultancy Cushman & Wakefield (C&W) India.

THE NOW-OR-NEVER PITCH

In the last few years, property prices have risen mainly due to speculators. For instance, they are buying as many as 80-90 per cent flats in under-construction properties in upcoming locations in the National Capital Region. After this, developers raise prices to help these early investors register notional gains.

Developers also launch projects at prices higher than that in the locality. "Like in any other business, builders have to keep up the enthusiasm. It is a strategy to generate demand," says Goenka.
Developers often put a 'sold-out' board within a few weeks of the project's launch while their brokers actively "resell" the same properties. "If all units are sold overnight, it is a clear indicator that an artificial scarcity is being created. This can be found in the National Capital Region," says C&W's Jain.

The current absorption rate for new projects is 10 per cent per quarter, which means it takes around three years for a project to be sold out.

COST FACTOR

Hyped sentiment is not the only culprit. "High prices can also be attributed to the rising cost of construction and funds," says DTZ's Jain.

30 per cent is the increase in input costs for realty projects, partly due to inflation.
Land prices have also been steadily rising. "Input costs, including construction materials and labour have risen by 30 per cent. Excise and service tax rates have also increased," says Goenka.
Some analysts blame shortage of affordable and mid-range residential properties. "While the worst shortfall is in affordable housing, a large number of developers have most exposure to mid-range and luxury housing. This is increasing the gap between supply and demand," says DTZ's Jain.

BUBBLE? NOT YET!

Future locations do seem overpriced, but analysts rule out a price bubble. "Some builders have been over-ambitious in pricing new projects, but I don't think there is any price bubble in the real estate market," says C&W's Jain.

Heavy speculation remains a concern as it means that valuations, especially in upcoming locations, are not backed by real demand. "Speculators can remain invested only for a specific period. They have to eventually sell to end-users. If demand from those who will occupy the properties is not high, there will be excess supply and prices will fall," says C&W's Jain.

MUST READ: Tips to buy property outside India
Though some developers have a lock-in period to end flipping, most do not mind bulk purchases as this generates cash. Is there a need to check speculation? Market analysts have different opinions.
Knight Frank's Goenka says if speculators invest, the market eventually discovers the right price. "As it is a free market, nobody should be stopped from buying," he adds.
In contrast, C&W's Jain favours regulation to check speculation. She says developers should screen buyers and have a sale lock-in period of two-three years.

Speculators are not expected to be deterred by policies like 1 per cent tax deduction at source announced in this year's Union Budget. "Looking at the returns, investors will continue exposure to real estate and it will be not possible to check such investments through a regulator or policy change," says DTZ's Jain.

SLOW GROWTH
Notwithstanding the hype, the frenzy is expected to settle. Residential property prices in most locations have almost peaked and no price increases are expected in the next 18 months. However, most experts rule out a price correction.

MUST READ: Invest in a house cautiously
"Owing to the increase in the cost of raw materials, the possibility of price correction is fairly remote," says DTZ's Jain.

As several lenders have reduced home loan interest rates in April 2012 even before the Reserve Bank of India slashed its policy rates, property prices may go up. However, prices of new properties in upcoming locations without adequate infrastructure may decline. "Prices in select locations, especially future locations which are witnessing heavy speculative activity, may decline 5-10 per cent in the next six months," says C&W's Jain.

Analysts say it is a good time to buy for end-use and long-term investment. "If your investment horizon is more than three years, it is always a good time to invest in residential properties as markets eventually go up due to their cyclical nature," says C&W's Jain.

MUST READ: How to win a good property deal
If you plan to buy properties in emerging locations, you need to analyse the planned infrastructure and supply-demand forecast for the region. Though premium properties are currently available at large discounts, the fact is that mid-range houses offer better returns than the luxury ones, both in capital appreciation and rental yields.

"If you have the money, split it between established locations with ready infrastructure and habitations and emerging locations," says C&W's Jain.

STOKING PRICES
>> Speculation for making quick gains
>> Rising construction cost
>> High labour charges
>> Hike in excise duty
>> Increase in service tax
>> Rising land prices
Arun Gupta

Real estate boom in suburbs


http://www.telegraphindia.com/1120521/jsp/bihar/story_15510962.jsp#.T7mkrolhic0

Real estate boom in suburbs - Land prices touch sky in Bihta

Selling fertile land may be anathema to farmers, but tillers in Bihta are parting with
their plots without much complaint.

The land price in this small town — 40km west of Patna — has skyrocketed in the past few years because of the construction of a number of projects in the area, including Indian Institute of Technology (IIT), National Institute of Technology (NIT), Employees’ State Insurance Corporation (ESIC) Hospital and others.

Sources claimed that in a few years, Bihta would be to Patna what Gurgaon is to New Delhi. At present, a cottah (1,361sqft) of land is priced between Rs 10 and Rs 15 lakh. A few years ago, it was available for only Rs 2-2.5 lakh.

Netaji Subhas Institute of Technology registrar Krishnamurari told The Telegraph: “When our engineering college was set up in 2005, 11 acres of land was purchased for Rs 44 lakh approximately, at the rate of 4.4 lakh an acre. Now, the market rate of the same plot is about Rs 6.5 crore per acre. Biada (Bihar Industrial Area Development Authority) is selling land at Rs 45 lakh per acre.”

The lucrative land price is common knowledge. A tea stall owner at Bihta Bazaar, Saryu Singh, said: “Most of the land near the road (Patna-Ara highway) has been sold or acquired by Biada.”

Asked if farmers willingly sold the fertile plots, Singh said: “Earlier, we had to sell around 1 bigha land (around 20 cottah) to get our daughters married. Now, we can raise the same money by selling only 1 cottah.”

A few years ago, a bigha land was priced at Rs 5-6 lakh. Now, one would have to shell out Rs 10 lakh for 1 cottah; in other words, around Rs 2 crore for a bigha.

Construction work in Bihta has also increased the sale of building material.

Ramveer Singh, a cement stockist in the area, told The Telegraph: “Two years ago, I used to sell around 100-150 cement bags a month. Now I sell more than 2,000 bags of cement every month.”

“Around four years ago, we had to depend on Patna for the consumption our materials,” said Ashok Kumar Singh, a stone and brick supplier. “Now, thanks to the plethora of construction work in Bihta, most of my materials — stone, sand and bricks — are sold locally.”

Many suppliers from Danapur, Maner and Bikram have shifted base to Bihta because of the boom in business.

Singh said: “Bihta is developing as the academic hub of the state.” (See chart)

The flurry in construction has brought along in its wake a slew of developments. Only a few years ago, Bihta residents would have to rush to Patna to get branded clothes or electronics. Now, they can get everything at a stone’s throw away from their home, thanks to the departmental stores that have opened in the area.

Vinay Sao, a grocery shop owner at Bihta Bazaar, said: “New cloth and electronic shops have opened in the area. We can get what we want close to our home.”

2012/05/16

Private Equity Likes Real Estate Investing in Pune, India's Other Growth City


http://www.worldpropertychannel.com/asia-pacific-commercial-news/pune-real-estate-investments-real-estate-private-equity-funds-india-real-estate-investors-sameer-gholve-jones-lang-lasalle-india-new-real-estate-projects-in-india-india-property-i
nvestors-5638.php

Private Equity Likes Real Estate Investing in Pune, India"s Other Growth City
Sameer Gholve

According to Sameer Gholve, Manager of Capital Markets at Jones Lang LaSalle India, Pune has been favored destination amongst Real Estate PE funds since 2005 - the year FDI opened for real estate.

Most of the funds are based out of Mumbai, which gives Pune obvious preference, as the city"s proximity allows these funds to track and monitor the market - and their investments - easily. Also, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore.

Pune Construction

The total flow of PE funds into Pune until December 2011 was approximately US$800 million. This consisted of both foreign and domestic monies through around 32 major transactions over the last five years. 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010 arrived. The renewed investor confidence resulted in a massive recovery of private equity deal closures in Pune

Woodsville Pune

As expected, most of these funds have been invested in the residential property asset class. In fact, residential real estate has proved to be the most consistent and enduring magnet for private equity funds into Pune"s real estate sector. In comparison, investments into SEZs, industrial parks (STPIT) and mixed-use townships have primarily been seen only before mid-2008. From 2010 onwards, the interest http://www.phpaide.com/?langue=en in these formats as asset classes has been quite meager.
Significantly, 61% of the total private equity investments that have been seen in Pune were done in projects located in East Pune. East Pune has the majority of the city"s IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada,

Weikefield IT Park on Nagar Road, etc. These IT developments have had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has caused the arrival of massive malls and also generated a huge demand for quality residential projects. These projects are proving to be the major magnets for private equity investments into Pune"s real estate sector.
Arun Gupta

2012/05/06

REALTY TRENDS


http://m.economictimes.com/markets/real-estate/realty-trends/young-buyers-investing-in-property-to-save-tax/articleshow/13007445.cms

REALTY TRENDS

After working for four years, Ramkumar Mahadevan, a professional with the financial
industry invested in a house. He was 26 years old, when he bought his 2BHK in a premium locality at Kharghar. The gap between the salary levels of working professionals in India and the more developed countries has narrowed in recent years resulting in young Indians being able to afford a house very early in their career.


The reducing average age of home-buyers is reflective of growing financial independence of resurgent India. Manoj John,VP - Corporate Planning & Strategy at RNA Corp says, "The income levels of population in the age bracket of 25 to 35 has multiplied five times in the last 10 years, and the relaxation of home loan lending norms by private and state-owned financial institutions has assisted this transition. Real estate is also seen as an attractive investment option due to the steady value appreciation demonstrated in last decade, which when combined with increasing need for housing in nuclear families become a compelling decision."

Endorsing this view, Mahadevan says,"An employee with high paying sectors like IT, Finance, etc. is able to save enough to cover the down payment for a house in four years into their career."
The youth today are more informed and are smart enough to prioritize things in their life. Buying a house requires some sacrifices to be made and a delay can prove to be costly. Many youngsters believe that once settled in a job, the next step should be to invest in a property and splurging on luxuries can follow.

"These days, generally inflation is higher than the rate of interest on fixed deposits. That doesn't make FD a viable investment option and stock markets don't promise assured returns. So, property remains the best bet as you can also save a bit of tax on the interest paid," says 32-year-old Ameya Dalvi, a media professional who has bought a 2BHK at CBD Belapur.

Sharing similar sentiments is 25-year-old Saurabh Dass, an IT professional, currently working in the USA. He has invested in a 2BHK property that is currently under construction in Dombivli. "With the volatility in the current market, real estate is the most lucrative options for investing my savings. The savings accounts in USA provide interest rates of less than 1%, which isn't comparable to the returns on realty in India. For a person like me working in USA and planning to settle in India, this makes sense as the exchange rates are at an all time high," says Dass.

Search for the perfect house that fits all or most requirements takes at least three months and could even take upto two years. The reason, nine out of 10 times, is typically budget constraints as sky is the limit for one's wishes. There is also an emotional factor when buying the first house and it takes time to make the big decision.
Arun Gupta

2012/04/28

Pizza, Prada and foreign makaan - Corporate News - livemint.com


http://www.livemint.com/2012/04/26195332/Pizza-Prada-and-foreign-makaa.html

Pizza, Prada and foreign makaan - Corporate News - livemint.com

When buying Indian real estate is complicated enough, foreign real estate must seem posi
tively daunting. But is it really?


Investing in foreign real estate is not a fiendishly complicated task. iStockphoto
The ongoing global economic malaise has created an opportunity for Indians to own prime residential real estate. The domestic populations of countries such as the US and UK are still working off the loans they took during the boom. Anaemic domestic demand has led to declining house prices. As the balance of power has shifted towards buyers, foreigners have exploited this opportunity to own residential real estate at fairly reasonable levels. The scope of the opportunity in some markets can be seen in chart 1 (see below). In most countries, the decline in house prices following the global credit crunch has left them at levels where they were five or more years ago. The exceptions being Canada and Australia, which are yet to see any meaningful decline.

Additionally, the strong recovery in foreign equity markets from their lows in March 2009 is yet to be seen in housing markets. Apart from stagnating or falling prices, the number of transactions has also fallen compared with the pre-credit crunch period. A few courageous buyers have stepped into this fearful market following Warren Buffett’s dictum that the time to be greedy is when others are fearful. However, most of the foreign buyers have been the global ultrarich buying multi-million-dollar properties. But this does not mean that one needs to be a Russian oligarch or a Middle Eastern sheikh to buy a house in London, New York or Valencia for that matter. For example, there are decent London properties available under half-a-million dollars.

The question to be answered is whether it makes sense to invest in real estate abroad. Intuitively, total returns (both capital appreciation and rental yield) from real estate in Western countries are expected to be lower than in India. Chasing the highest return in India has merit but is a blinkered view. From a portfolio perspective, foreign real estate has two advantages: first is of diversification and the second is wealth preservation.

A foreign asset denominated in hard currency in a nation with stable rule of law provides protection against unexpected downside. Russian, Middle-Eastern and European investment in the London property market is mainly to benefit from this characteristic.

Where to start

Investing in foreign real estate is not a fiendishly complicated task. The standard metrics of evaluation are applicable but need slight modifications. What needs to be borne in mind is that unlike financial assets, real estate is a domestic asset with risk and return driven by domestic factors. The first step is to gain knowledge of the domestic economy and demographics. This sounds obvious while making real estate investments in one’s own country. Overseas, however, this is a much greater challenge.

Once the fundamental drivers are analysed, the investor needs to evaluate the legal landscape. This would include whether foreigners are allowed to buy domestic housing and the strength of protection afforded to their property rights. It would also include the degree of regulation and transparency in the housing market. A lot of Western nations would satisfy the criteria of being open, transparent and with regulated jurisdictions. However, for Indians, the US and UK are preferred investment destinations. This is because of language and presence of similar commonlaw legal systems.
Other Commonwealth nations such as Canada and Australia would also be in the list were it not for the fact that their housing markets are yet to deflate. Ireland could be a contender were it not for its poor macroeconomic outlook.

Having decided on a country, the next step is to drill down to the city and area level. Economics and demographics are also important to evaluate the attractiveness of cities. For an example, New York with a resilient finance industry is better than Detroit with a declining car-manufacturing industry. Determination of a specific area requires the services of a local expert. It also involves enormous amounts of due diligence. The final step is to analyse investment economics under the familiar heads of transaction costs, tax treatment, mortgage availability, rental yields and running costs.

Graphic by Naveen Kumar Saini/Mint

Local experts such as estate agents and lawyers are necessary to execute the investment decision. While there are specialized real estate agents and legal firms catering to the international buyer, most of them operate in the multi-million-dollar segment (around Rs. 5 crore and above). Investors with smaller pots may be better off just talking to the agents and lawyers that the locals use.

Let’s use the London market as an example.

London is one of the investment options that Indians should consider. The UK economy, bogged down after the credit crisis, is recovering, albeit slower than the US. London is the main contributor to the UK’s gross domestic product and the main destination for immigrants into the UK, around 250,000 of whom arrived between June 2010 and 2011. Immigration combined with limited land availability and restrictive planning laws keeps the demand for housing up. London prime property is also the object of desire for the rich from Russia, the Middle East and Europe. Their purchases in the sought-after postcodes such as South Kensington, Belgravia and Knightsbridge led to a percolation of demand to other areas of London. This is mainly the reason why the London property market has massively outperformed the broader UK market.

Unfortunately, for rupee-denominated investors, the currency’s recent plunge has made London property 13% more expensive compared with last year. However, waiting for the rupee to appreciate or depreciate should not enter the investment decision since, when you think about it, that is a separate foreign-exchange trade in itself.

Having decided upon London, the next question to answer is where and what type of property to buy. Unless one wishes to compete with the global superrich and pay an enormous premium for a postcode brand, the lesser-known residential areas outside of Zone 1—as the heart of Central London is called—are preferable. They offer potential for capital appreciation and are still reasonably priced in comparison as shown in chart 2 (see above). It compares Wandsworth, a popular residential area for young families, and the Royal Borough of Kensington and Chelsea, a magnet for the global super-rich.

The ideal investment property is one which costs less than £1 million. This has two main advantages; the first obvious one is of a lower stamp duty. Properties between £250,000 and £500,000 pay 3%, and those between £500,000 and £1 million pay 4%, compared with 5% for properties above £1 million and 7% for those above £2 million.

This exemplifies the implicit political advantage of not being classified as a ‘‘rich man’s property”. It is very important in today’s economic environment where Western governments are trying to raise tax revenues. The second advantage in choosing such property is dual demand—from people lower down the property ladder looking to upgrade, and from people above looking to downgrade, such as when children move out and the couple wishes to move into a more manageable property.

London is only one of the options from a plethora available to the smart and affluent Indian investor wishing to add foreign real estate to his portfolio. There are hundreds of more options from chalets in Swiss ski resorts to cut-price Spanish seaside villas. However, due diligence of national and local factors are the key. Those who are short on time can still add foreign real estate to their investment portfolios using real estate investment trusts (REITs). But that is a discussion for another day.

Shashank Khare is a London-based investment professional, learning from the capital markets what they didn’t teach him at IIM Ahmedabad.
Respond to this column at indulge@livemint.com
Arun Gupta

2012/04/20

REALTY TRENDS


http://m.economictimes.com/markets/real-estate/realty-trends/rbi-rate-cut-a-boon-for-affordable-housing-investors/articleshow/12747704.cms

 REALTY TRENDS

The recent move by the Reserve Bank of India (RBI) in its annual Credit Policy has given some hope for investors in the affordable housing segment. This is being seen as a positive development for the overall property market. While investors remain cautious and wait for banks to announce the lowering of interest rates, realtors are optimistic of the scenario, however, hoping that inflation remains under check.

"While the rate cut of 50 basis points is definitely a ray of hope, it does not dispel the shadows nearly as much as may be initially supposed. It should be borne in mind that the Reserve Bank of India (RBI) has hiked interest rates 13 times between March 2010 and October 2011," says Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India.

"While this is understandable , given the ongoing concerns over inflation and liquidity in the market, the spate of rate hikes has created a compounded problem for the residential real estate sector. The series of hikes in the past have also affected the price that builders put on their properties, since their own costs of borrowing have increased. It is unlikely that property prices will come down because of this rate cut. In fact, it is very likely that there will be an upward bias on property rates because of the anticipated improvement in sentiments of buyers who have so far been sitting on the fence, waiting for some signals of relief," adds Ahuja.

Shrinivas Rao, CEO, Vestian Global Workplace Solutions says the reduction in repo rate will boost economic growth and improve business sentiments which in turn will strengthen buying activity. However, the impact will vary across sectors depending on implementation of the cut by leading banks.

"Leading lenders are likely to cut interest rates on deposits and loans. Home loans are likely to turn cheaper. For instance, a 25 basis point cut could lower home loan EMIs by Rs 16 per Rs 1 lakh. A cut in the repo rate will also reduce the interest on commercial loans which in turn will favour developers to avail cheaper loans, thereby providing traction to real estate activity. Cheaper loan rates are expected to attract more end-users, impacting the residential sales positively," he says.

With banks offering loans at cheaper rates, developers are likely to prefer the bank loans as against private equity funds. However, an increase in market demand in the short term will drive capital values, thereby benefitting retail investors, adds Rao

According to Ganesh Vasudevan, Vice President and Business Head, IndiaProperty, the cut of 50 basis points by the RBI is a move that will have a positive effect on the real estate segment.

2012/04/17

Land is netas’ currency of power


http://www.asianage.com/mumbai/land-netas-currency-power-445

Land is netas’ currency of power

The Asian Age explores the political-builder-mafia nexus to grab prime plots at throwaway prices

Last week, a report by global real estate firm Knight Frank LLP put Mumbai at the head of a list of most expensive cities in the world for locals. The firm estimated that the price of a luxury home in Mumbai is about 308 times the annual income of an average Indian. The average Indian, or Mumbaikar, of course, has little chance or hope of ever possessing a home in the city in his or her lifetime. That privilege is reserved for the rich and powerful.

But who are these people who not only use this privilege, but also drive up the prices for the rest of the commoners? They are the known faces, our own leaders, who with the help of developers, gangsters, police, and of course, the bureaucrats, work unscrupulously to grab whatever prime land they can at whatever little price they can.

If the leaked report of the Comptroller and Auditor General of India is to be believed, it is frequently a privilege usurped. A number of prominent ministers from the state have appropriated large tracts of land to themselves by using their discretionary powers to sell or lease out the land at a fraction of the official value to trusts they control. This official value itself would be well below the actual market rate.

THE POLITICAL CONNECTION

As recently stated by Union agricultural minister and NCP president Shard Pawar, the state wants to help trusts working for various charitable purpose, by providing land at subsidised rates, but this policy of the government is what has been taken advantage of.

Take the example of the state government allotting the Lavasa Corporation Limited a massive plot of land for development of Hill City near Pune that has opened a new chapter in state largesse. Even as the court of law dwells on the legality of the concept altogether, the names that are allegedly associated with the project smacks of blatant misuse of politicians’ power.

Meanwhile, even as the dust settles in the Lavasa and Adarsh society scam — another case of land grab, the revelations made by CAG’s report resound like a bombshell. The leaked report names many bigwigs in the state cabinet of ministers and shows how the public “trust” was flouted in the name of charity. Public works minister Chhagan Bhujbal, for instance, has been named in the report as his trust Mumbai Education Trust (MET) got a plot at Govardhan Taluka in Nasik admeasuring 50,000 sqm on occupancy right basis at an occupancy price of `7.53 lakh. This allocation was in addition to an earlier adjourning plot to MET admeasuring 41,300 sqm in 2003, the occupancy charge for which was `1.55 lakh. The report says that the entire 91,300 sqm plot was initially reserved for mining activity by the PWD. Interestingly, the MET had requested for the entire plot in 2003, but while it got one plot in 2003, the other was made available to it during Mr Bhujbal’s tenure as PWD minister. The CAG observes that as per the ready reckoner of 2008, the market value of the land was `9.39 crore and the allotment to the allottee, NCP MP Sameer Bhujbal, who is the minister’s nephew and a trustee at MET, was an apparent “conflict of interest”.

Former CM and Union Minister Vilasrao Deshmukh, whose name has already figured in the Adarsh scam and the Whistling Woods case, has also been named for allotting a plot in Borivali worth `30.37 crore to Manjra Education Trust for `6.56 crore. However, no dental college, as was initially proclaimed was ever developed on the land, but in absence of the clause in the agreement to return the plot, it continues to be held by the trust.

A long list of other ministers figure in the list. The story is the same in every case: land given by politician to his own trust at a throwaway rate (see box).

The list ends with the highest and mightiest. President Pratibha Patil has allegedly taken over 81,563 sqm of defence land in Pune for a retirement home. The Rashtrapati Bhavan spokesperson Archana Datta said the land would revert to defence use after the president’s lifetime and hence, there was no question of transfer of ownership.

THE NEXUS

But, it’s not only the netas named in the current CAG report who have a finger in the real estate pie. The involvement of politically powerful people, who have access to the public property, also has a set precedent.

Take for instance, Raj Thackeray, whose name appeared in a controversial land deal as Shiv Sena opposed the sale of Kohinoor mill land. Raj Thackeray, however, bid and won the prime mill land on July 21, 2005. To recap, he and Unmesh Joshi, son of Shiv Sena leader Manohar Joshi purchased a five acre plot of land, Kohinoor Mill No 3, located across the road from the Shiv Sena party headquarters Sena Bhavan for `421 crore, but the source of this money is a secret well-kept.

Real estates is simply too lucrative a business in Mumbai. South Mumbai had always been the costliest as places like Cuffe Parade, Napean Sea Road, Walkeshwar figure in some of the most expensive deals forged.

THE MAFIA’s ROLE

However, Mumbai markets are always booming, with old chawls, mill lands and slums giving ways to high-rises, malls and plush hotels. Not surprisingly, areas such as the Bandra-Kurla Complex are now giving stiff competition to Cuffe Parade for the “numero uno” spot on the list of costliest lands in Asia. But the prices have not gone up overnight.

The process has been long and continuous and there can always be some level of politicians’ involvement expected, which holds the key to allotments. There are umpteen examples of politician-builder nexus, but there are other players in the game as well — as limited as their role may be. These are the gangsters, the mobs that the builders use to either grab someone’s land via encroachment or forceful possession; for clearing slums; to guard their own properties, etc. By extension, the moment gangsters get involved, there is little scope that the police remains far behind in these activities. However, when they are not in cahoots, a conflict can ensue between the police and the underworld.

No matter what the picture or who the players, it is evident that the sheer volume of money that trickles in the business of real estate is what keeps the politicians and builders in a warm embrace as they exercise the policy of “I scratch your back, you scratch mine.” Arun Gupta

2012/04/12

Loopholes plague housing bill


http://www.dnaindia.com/mumbai/report_loopholes-plague-housing-bill_1674701

Loopholes plague housing bill

The Real Estate Regulatory Authority Bill, which was introduced in the legislative assembly today, has several loopho

les that need to be ironed out. However, these lacunae can be amended in ongoing assembly session before it is passed.

Ramesh Prabhu, chairman of the Maharashtra Societies’ Welfare Association, said, “It is neither in favour of buyers or developers. It has several lacunae that need attention.”

For one, the regulatory bill will be applicable only to private developers. Government bodies, including Maharashtra Housing and Area Development Authority (Mhada) and the Mumbai Metropolitan Region Development Authority (MMRDA), are excluded from application of the bill. “Government bodies also commit mistakes. Who will fine them? And as per the Central government bill, a criminal offence can be registered against the developer. But in the state bill, the criminal offence clause has been removed. There is only monetary punishment which the developer can pay anytime,” said Prabhu and added, “The government should not pass the bill hurriedly. It needs to be discussed thoroughly.”

Lalitkumar Jain, president of the Confederation casino of Real Estate Developers’ Associations of India (CREDAI), agreed that the bill needs to be studied. “I fear that politicians and government officials may use this as an instrument to interfere in the construction business. The CREDAI is already resolving property-related disputes at its own level,” he said.

Pranay Vakil, chairman at Knight Frank, India, a real estate research firm, said, “The government is only focusing on the housing aspect. They are ignoring the fact that many people are buying commercial properties. So, the commercial segment should be added into the main bill,” he said.
Arun Gupta

2012/04/10

Mumbai Is the World’s Least Affordable Home Market


http://mobile.bloomberg.com/news/2012-04-10/mumbai-is-world-s-least-affordable-home-market-chart-of-the-day.html

 Mumbai Is the World’s Least Affordable Home Market- Bloomberg
 Mumbai Is the World’s Least Affordable Home Market

 By Pooja Thakur and Ailing Tan April 10, 2012 6:00 PM EDT

 The average Indian would need to work for three centuries to pay for a luxury home in Mumbai, making that city the least affordable in the world for locals, according to an analysis of real estate and wages.

The CHART OF THE DAY shows a 100-square-meter luxury residence in Mumbai costs about $1.14 million, or 308 times the average annual income in India, based on calculations from a housing index compiled using 63 markets by Knight Frank LLP and income estimates of the U.S. Central Intelligence Agency for purchasing-power parity in 2011. Shanghai buyers would need 233 times the per-capita income in China and Moscow inhabitants 144 times Russian earnings. Singapore and New York homebuyers would need 43 years and 48 years, respectively, for equivalent residences using national income averages, the data show.

Prime-location home prices in Mumbai averaged $11,400 a square meter in the quarter to Dec. 31, while India’s per-capita purchasing power was $3,700, the data show. Shanghai residential prices were $19,600 a square meter and China’s income was $8,400. The Knight Frank Prime International Residential Index is compiled using the top five percent of districts in each city, according to Liam Bailey, London-based head of residential research at Knight Frank.

“There are big differences in wealth levels in emerging markets compared to the developed world, which is part of the course for economic development,” Bailey said in an e-mailed response to questions. “In the first phase of growth some people make big fortunes, it takes time for this to trickle down as the middle class develop and generate their own wealth.”

In a separate study published last month by a unit of Lloyds TSB Bank Plc, India, Russia and South Africa were the best performing housing markets since 2001. Residential prices in India, calculated using an average in major cities nationwide, rose 284 percent in real terms in the period after adjusting for consumer-price inflation.

Japan, Ireland and Germany posted the biggest price declines in the same period, according to the Lloyds TSB report. Japan’s cost-adjusted drop was 30 percent, the data showed.

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

2012/04/04

Donald Trump Is Focusing His Attention On Indian Real Estate


http://www.businessinsider.com/donald-trump-isfocusing-his-attentions-on-indian-real-estate-2012-4

Donald Trump Is Focusing His Attention On Indian Real Estate

American property mogul Donald Trump targets India above other emerging
economies, his son and business partner said, as the flamboyant tycoon looks to crack a notoriously tough real estate industry with his brand of luxury homes and hotels.

Trump"s eponymous real estate group expects to sign multiple deals for Indian residential projects and hotel contracts over the next five years, despite a market riddled by regulatory uncertainty and bureaucratic red tape.

"India, among other emerging markets, is the biggest push for our organization," Donald Trump Jr, an executive vice president of The Trump Organization, said on Wednesday.

Trump, whose portfolio includes projects in South Korea and Turkey, in addition to hotels and skyscrapers in the United States, is close to signing a couple of deals with Indian developers, the younger Trump said without providing details.

"Equity investment will depend on individual projects and partnerships but first we would like to form relationships which allow us to understand the processes and spectrum better," the 34-year-old said on the sidelines of a hotel conference.

The developer entered India last year with a joint venture partnership with Rohan Lifescapes to build a 45-storey luxury residential tower in http://online-nlcasino.nl/ Mumbai.

However, work on the tower, which will bear the Trump name but involves no equity from the U.S. developer, has been halted for about nine months since authorities said it lacked the necessary permits, a common problem in an industry wrapped in red tape.

Indian developers are often hit by changing regulations. In Mumbai, for example, the scrapping of a rule granting extra floor space in exchange for providing public parking facilities has meant many projects must reapply for clearances.

But Trump, whose father is worth an estimated $2.9 billion, according to Forbes, says the lure of an emerging India outweighs the regulatory headaches.

"I like the regulatory changes I am seeing. It may slow things down a bit but will create a level playing field and will help in eliminating the unknown for an outside investor coming in," he said.
The company plans to focus expansion in the country on luxury residences and hotels, and would look at cities including Mumbai, Delhi, Bangalore and the state of Goa.

Some local players such as privately held Lodha Developers and Godrej Properties are emerging as strong brands in India"s luxury housing space, but the market remains fragmented.

And despite a slew of interest rate hikes that have cooled India"s overall property market and hit luxury developers particularly hard, Trump is bullish.

"The Indian market is starved for a good luxury product and it needs a brand like ours," he said.
(Writing by Henry Foy; Editing by Tony Munroe)
Arun Gupta

2012/03/27

Round Table Conference: Real Estate: Ethical marketing and rational policies needed


http://www.afaqs.com/news/story.html?sid=33531_afaqs!+Round+Table+Conference:+Real+Estate:+Ethical+marketing+and+rational+policies+needed

afaqs! Round Table Conference: Real Estate: Ethical marketing and rational policies needed

The panel brought to the foreground the realities of the gimmicks disguised as marketing tactics, flawed policies and lack of regulation that abounds the real estate sector.

The afaqs! Roundtable Conference held on March 23 at Hotel Shivalik View, Chandigarh, focussed on the requirement of ethical marketing and various challenges faced by the real estate sector in cities other than metropolitan India.

The panel of speakers included Colonel R S Perhar, partner, Stellar Infrastructure Development Company; Satender Singh Jarry, director and chief executive officer, Alchemist Group; Yudhvir Arora, senior manager, marketing and commercial, Parsvnath Developers Ltd; R S Bipin, director, business development, Blessings World; Amit Puri, director, Accord Infra Developers; Gursharan Batra, managing director, Gee Impact Infra Con; J K Sharma, partner, Future Estates; Anil Chopra, chairman, PPR Group; P S Grewal, director, Orbit Apartment Constructions; and Kanwaljit Singh Walia, chairman and managing director, RKM Housing. Dipin Preet Singh, director, West Coast Investment Solutions moderated the discussion.

The panel debated and discussed multiple issues related to the realty industry. Some of the hard-pressing questions raised during the round table session were: Does real estate, like any other industry, need hard selling or does quality of a project speak for itself? Are Indian real estate players setting global standards of construction and infrastructure development? Is the industry doing enough to gain the consumer"s trust and credibility? Are issues like affordable housing given serious thought and commitment?

Realty marketing: a farce or reality?

Every newspaper on a weekend is full of advertisements that promote different real estate projects, which just makes things difficult for the buyers. One among many things that the panel agreed upon was that ethical marketing in real estate industry is the need of the hour. "Marketing should be turned to realistic marketing," Chopra said. Word of mouth marketing is the best that a realty project can get and brand equity needs to be built before promotion, agreed the panellists.

According to Grewal, real estate projects value sales more than sensible marketing. "Marketing majorly involves understanding the inherent need of the customer and delivering on it, thereby making your mark," he said, and highlighted that to deliver the best, development of quality needs to be ensured first and for quality projects, one needs skilled manpower, too.

Diverting the attention of those present in the session, Colonel Perhar said that the number of projects completed and handed over in Chandigarh could be counted on fingertips, whereas the number of projects launched was in the range of a few hundreds. This statement brought to the fore the topic of accountability and transparency while delivering realty projects, which many speakers on the panel admitted was missing.

Highlighting the malaise of false claims and unethical advertising, Puri concurred that it"s high time that a regulatory body for real estate industry was established. "Any sector, whether it"s telecom, automotive, broadcast or stock exchange, when faced with problems sets up a regulatory body."

Cracking the marketing conundrum
How important is marketing for the realty sector? Does brand equity matter here or is it all about tall claims? We are moving from unorganised to an organised way of functioning, said Batra. With increased competition, real estate and infrastructure developers are hiring professional real estate consultants like Jones Lang LaSalle and Cushman & Wakefield to jack up their brand equity and project delivery capabilities.

Grewal added that like any other servicing-led sector, real estate, too, should invest in building brand equity. "Builders and developers have to be conscious of the customers" demand, expectations and loyalty," he said. Trust needs to be established and grown with every project completed and delivered, said the speakers on the panel.

Challenges faced from flawed policies and guidelines
From sticky policy issues to the standardisation of business practices, from vested political forces playing to the gallery to the concept of master plans, a lot of challenges ailing the real-estate sector were discussed and ruminated upon. Some of the challenges discussed in the session included high construction costs and low margins in real estate in North India.

"With rising inflation, the Reserve Bank of India has raised the bank"s cash reserve ratio around a dozen times. A few years ago, land cost Rs 1,600-1,700 per sq. ft. Now, it is Rs 3,500-3,700 per sq. ft," Grewal said. Agreeing to this, both Arora and Bipin endorsed the view that since costs were running high, marketing and ethical promotion of worthy projects was not done adequately. Summing up what promotion of a real estate project should include, Col. Perhar enumerated, "Location - details and legitimacy; a project"s layout and ambiance; specifications; facilities and amenities; true accountability and time-bound delivery."

Highlighting the flawed governmental policies on developing land banks into habitable residential colonies, Jarry said, "I have made several representations to the Haryana government for roads, sewage plants, street lighting and landscaping on lands we were developing, but I"m sorry to admit that really shoddy, lax and old land development policies prevail currently.

Grewal pointed out that environmental impact assessment is not given a serious thought in official policies. There are so many clearance windows in place that instead of facilitating development, they act as impediments to project completion. Chopra agreed and cited examples of multiple cities in Punjab where unauthorised colonies were given preference and offered lenient taxation compared to regularised ones.

"In Punjab, 95 per cent of urbanisation is unauthorised. Due to political interests and backstage lobbying, unauthorised colonies get preferential treatment," he said. Arora brought in a streak of optimism when he referred to the introduction of the Real Estate Bill that addresses a lot of industry online casino spielautomaten problems.

Walia deliberated that developers are resorting to corrupt and unethical practices due to stringent and irrational tax regimes. On a project worth Rs 50 lakh, about Rs 20 lakh goes into taxation, he concurred. In 1995, there was no external development tax, while the development charge is Rs 7 lakh per acre today.

Global standards: a great outcry

Bringing in a perspective of what prevails in metro cities, Bipin said, "In a bid to meet deadlines and completion of projects, many a times developers miss out on delivering the promised global standards." Arora opined that master plans should be made, strictly frozen and adhered to.

"Like the West, after great deliberations and feasibility analyses, a master plan needs to be drawn and then implemented, followed by a detailed zoning plan. Making a fancy master plan and then changing it regularly according to some vested interests is common in India," Grewal said.

Many on the panel agreed that the pre-requisites for global standards are internationally trained and skilled manpower, and techniques. There is also a need for the will and desire to compete internationally and make a mark.

Affordable housing - who bells the call

In a "welfare state", it is the responsibility of the state to shoulder the onus of facilitating access to housing for the low income and economically weaker sections of the society. "Affordable housing to me sounds like a utopian thought," Colonel Perhar maintained. The reality, city by city, is staring us in the face, he added.

There"s no clear-cut definition of "affordable," the speakers agreed in unison. As a suggestion, Chopra, who also chairs the Punjab chapter of Confederation of Real Estate Developers" Associations of India (CREDAI), said that affordable housing should be incentivised by waving off external development charges for affordable housing projects.

Bringing forth various examples of successful affordable social housing initiatives, Bipin spoke about the colonies set up in Tamil Nadu after the Tsunami and in Bhuj, Gujarat after the earthquake. Batra opined that the government should realise that affordable housing is social infrastructure. Grewal, supported by a few other speakers, demanded that the government unlock land banks, bring in public-private partnership (PPP) projects and have experts on-board to see socially affordable housing projects through to completion.

The National Urban Housing and Habitat Policy 2007 incorporates reservation prominently by stating that 10-15 per cent of land in every new public/private housing project or 20-25 per cent of floor area ration/floor space index (FAR/FSI), whichever is greater, will be reserved for economically weaker sections (EWS) and low income groups (LIGs) of the society.

Puri, though, admitted that due to absence of rational policies in the past, many such projects have not been really good for some developers, but he added that new and vital beginnings can definitely be made.

Wrapping up the proceedings, Dipin Preet Singh, the moderator, said, "A lot needs to be done before the real estate sector can enjoy customers" faith and unflinching trust, and can take pride in contributing more to the gross domestic product and the healthy development of India."
(Held in Chandigarh, Punjab on March 23, 2012, the Round Table Conference on The Challenges in Marketing for Real Estate was sponsored by STAR News)