TAIN-All News

Home > News
News

Covering private builders under Land Bill to hit infra sector

5/18/2012 National Real Estate Development Council on Thursday opposed the Land Acquisition Bill saying it should not be applicable to private builders as it will impact development of infrastructure across the country. "Redefining public purpose, as suggest by Parliamentary Committee, will impact infrastructure, industrial and township development severely," National Real Estate Development Council (NAREDCO) Chairman Navin Raheja said in a statement. Setting tough conditions for land acquisition in Land Acquisition, Rehabilitation and Resettlement Bill, a Parliamentary panel on Thursday said the government should not acquire land for private businesses and underlined on a clearer definition of "public purpose" in this regard. "Provisions of LA and R&R Bill should not apply to private acquisitions done by developers after direct negotiation with land owners/farmers. Privately negotiated prices, in almost all cases, are much higher than acquisition compensation suggested in the bill," Raheja said. The proposal of 20 percent of developed land going back to owner in the Bill will make township development difficult, he added. "Putting all land under agricultural cultivation in the same bracket as multi cropped land will make land acquisition for township more difficult," Raheja said, adding the ceiling of 5 percent on multi cropped land acquisition in a district is to follow if acquisitions for all purposes taken into consideration together. Besides, Raheja said: "Land for residential uses of weaker sections was included in Public Purpose according to LA and R&R bill. Its exclusion will severely impact the housing supply of this category." Expressing similar views, Confederation of Real Estate Developer s Associations of India NCR President Pankaj Bajaj said: "On Thursday, all significant projects in the country are stuck due to land assembly issues. Industry needs government help. Whether it is China or any other competing economy, the government goes out of the way to facilitate industry." Earlier in the day, the Panel said that "public purpose" in the Bill should be limited to linear infrastructure and irrigation, including multipurpose dams and social sector infrastructure such as schools, hospitals and drinking water or sanitation projects constructed at state expense. "All cases of land acquisition must entail obligations for adequate compensation, rehabilitation and resettlement to all land losers and other affected persons," said the Parliamentary Standing Committee on Rural Development, chaired by BJP leader Sumitra Mahajan, in its report on the Bill. The report was tabled in Parliament on Thursday.

‘Cops favouring real estate agents’

Police stations that have names of sponsors on their signboards or hoardings within the station premises will have to remove these. The National Human Rights Commission informed Gujarat police about this issue after observations by dalit activists and allegations of police giving undue favours to land mafias. NHRC members, after meeting dalit victims and NGOs, opined that cops might be giving undue favours to real estate companies like Tulja Estate who sponsor signboards of police stations. Their names are also written on the signboards. Some trading companies too get their names written on such boards.Dalit activist Raju Solanki raised this issue on Monday and alleged that cops act as agents to these real estate firms, which eventually try to influence people with their contact . He said this in an open forum in the presence of NHRC chairperson KG Balakrishnan and other members including BC Patel. Reacting to this issue, in-charge director general of police Chitranjan Singh told DNA that a circular will soon be sent to police stations and such signboards will be removed. He said that the issue was mainly related to Ahmedabad city, where the names of some firms are written on sign boards of police stations. Singh also said that this was done to enhance police-public participation in the area. NHRC has said that they have been given to understand by the police department that hoardings of private traders will not be displayed at police stations in future. Police sources said that the hoardings are mainly of real estate companies. 5/17/2012

IIM-B Century Real Estate in research initiative

The Indian Institute of Management, Bangalore (IIM-B) and city developer Century Real Estate Holdings Pvt. Ltd are teaming up in a venture that will collect data and conduct scientific, cross-disciplinary research on the real estate sector. The IIMB-Century Real Estate Research Initiative will create a bridge between the industry, academia and the government, and seek to provide guidance and policy prescriptions to the government and industry stakeholders on major issues relating to the sector, according to IIM-B and Century. Data collected will be documented in academic and practitioner journals. The two on Thursday signed a memorandum of understanding (MoU) after deliberating on the initiative for almost a year. Century Real Estate is the primary investor in the initiative and IIM-B will offer administrative and research support, said Century managing director Ravindra Pai. Venky Panchapagesan, an associate professor in finance who is leading the effort at IIM-B, said that despite real estate being a large sector, not much data is available on which any research can be based. Also, data that comes out are largely from vested interests, which is why scientifically collected data is the first step in the initiative, he said. “Though this has national scope at a later date once the prototype is ready, we will start with data collection in Bangalore and Karnataka to begin with,” said Panchapagesan. “We look forward to working closely with the government, without competing with the industry.” Citing an example, he said that during a time when affordable housing was being actively promoted by the government, there was no objective research on the topic. If this initiative can put out proper research, it could drive policy matters, he said. Property analysts said that with the real estate sector in India not being organized and transparent enough, research data is often not objective or holistic. To begin with, there is no authentic, consolidated pan-India data available on something as fundamental as housing demand and supply in the country, said a property analyst, who didn’t wish to be identified. Between 2003 and 2007, Mumbai-based Pankaj Kapoor set up Liases Foras, a real estate research advisory, and launched Ressex, a real estate sensitivity index. Kapoor said the journey has not been easy particularly when one wants to project unbiased, scientific data and valuations. “There has been pressure from developers to not put out data that will not help the market and surviving that to come out with an unbiased stand has been the biggest challenge for us,” said Kapoor, whose firm largely maps demand-supply in terms of inventory, price movement and construction activity in eight large property markets. 5/18/2012

Indian wary of investing in property: Survey

5/17/2012 Uncertainty in the real estate sector is keeping the Indian home buyers away, according to a survey. "While property still remains the preferred choice of investment of nearly all the Indians, as high as 92 percent, they are pretty scared of trading in the property market now," real estate market tracking news portal Track2Realty s survey titled `Home Buyer s Satisfaction Index said. The survey further said that buyers are looking at other options including infra bonds for investment. "Nearly 70 percent of Indians who are looking to invest again after occupying a house assert they prefer relatively safer bets like infra bonds than be sorry after the new launches are stuck up due to developers poor financial condition, regulatory hassles or other legal issues." The survey was conducted in ten cities: Delhi, Mumbai, Kolkata, Bangalore, Kochi, Ahmedabad, Chennai, Patna, Pune and Chandigarh. As many as 2,000 house-buyers were surveyed. "Almost 60 percent of home seekers active in the property market believe there is artificial demand in a new launched project and after 12-24 months, prices can be realistic, if not outrightly downward," it said. Due to lack of confidence in the new launches, buyers are preferring ready-to-move properties. "Nearly 62 percent prefer to settle for a flat in the secondary market as against the temptation of brand new in the recently launched apartment."

Bypass the broker rent a flat via facebook

5/16/2012 To get rid of the middlemen’s hefty brokerage fees, people are actively using the online social media to rent out houses, get a tenant, a roommate and even paying guests. Groffr.com has recently launched Rent a Flat, an easy, fast and free service via Facebook, which works as a facilitator to connect the tenant and owner. And, the real estate brokerage firm does this for no charge. “We believe social media will be a big change agent for how real estate transactions happen in India. At Groffr.com, we want to be at the forefront of this change,” said Sandeep Reddy, cofounder, Groffr.com. Tusharika Aggarwal is among those exploring this medium to meet their demands. An employee with private firm, Aggarwal was looking for the room-mate to share her 2BHK flat at Lokhandwala, Andheri. “Within two days, I got couple of enquiries and I am about finalise one of them as my future room-mate. Without spending anything, I managed to get the room-mate in Mumbai, where everything comes with certain cost,” she said. “Thanks to Facebook, I can see the person’s profile and social background. If I am going through the middlemen, this facility is not available. And, I do not even need show the house as I have already uploaded pictures of my flat,” she added. Another beneficiary is Amish Singhal, a bank employee. As the Gurgaon resident was transferred to Mumbai, Facebook helped him get a house on rent in Mumbai. “I liked the Groffr.com Facebook idea. It is good for a person who is travelling from one city to another. I had no idea about the city and still managed to get a house, that too without paying the brokerage fee,” said Singhal.Reddy said brokers gain by keeping the rents high through the brokerage.

Real estate boom leaves Hyderabad high and dry

5/16/2012 The massive real estate boom that pushed Hyderabad to prominence among global investors also sucked the city dry of its water content. With drilling machines digging deep into the ground to lay foundations for the dozens of high-rises that have sprung over the last decade, Hyderabad s water-table has receded dangerously. Money-driven developers have violated all building norms leaving little open space for the rain to seep through and enhance the ground water level. "People have started building more per square kilometer (sq km) now to utilize maximum land available. That has led to widespread concretization of the city. At least 70-75 per cent of all real estate projects are covered with negligible open space," explains architect Srinivas Murthy while highlighting the many breaches that builders have resorted to. The rulebook requires every developer to leave a one-metre green patch on all sides of a building but few comply with it. "Even the mandatory 10 per cent open area is not being earmarked in most ventures these days. How will then the water percolate into the earth," asks Murthy. Environmentalists too blame the over-ambitious realty industry for this acute water shortage in Hyderabad. Filling up of water bodies to make way for towering apartments, they say, is a menace that needs to be arrested to address the city s water woes. "Even the designers of Hyderabad s master plan should share the blame," feels Shankar Narayan, another city-based architect pointing out how the local development authority intends to add yet another regional ring road to Hyderabad s periphery by 2031. "Instead of pushing Hyderabad to grow endlessly we should divert some attention towards the other major cities of Andhra Pradesh. That will reduce the pressure on the capital and also sort such civic issues," he added.

ASK to exit Noida residential project

5/15/2012 Real estate-focused private equity (PE) fund ASK Property Investment Advisors—part of the diversified financial services firm, ASK Group—is charting its first exit since it started deploying money in 2010. The fund will get returns of about 2.5 times on the Rs.50 crore it invested in a residential?development?project in Noida by ATS Infrastructure Ltd, group chief executive Sunil Rohokale said. ASK Property made the investment in 2010. Several PE exits are expected in fiscal 2013, particularly on investments made in realty projects in 2007, said analysts. Investors in PE firms typically seek returns on their investments in three-five years. “We have made seven investments in residential projects from our first fund, and we expect IRRs (internal rate of returns) of 30% from them,” said Rohokale. The 14.5-acre Noida project, comprising 12 towers, will be completed in a few months. ASK will probably exit the project a few months before schedule, helped by the strong sales for it, Rohokale said. While exits in office projects are usually in the form of buy-backs by developers or sales to third-party investors or buyers, exits in residential projects self-liquidate as sales happen. Getamber Anand, chairman and managing director, ATS Infrastructure, declined comment. ASK Property, which invested in the ATS project from its Rs.326-crore first fund, ASK Real Estate Special Opportunities Portfolio-1, is raising a second domestic fund of about Rs.1,000 crore. It has so far raised Rs.850 crore for it. Rohokale said the remaining process will be completed once the Securities and Exchange Board of India finalizes the regulations for alternative investment funds. ASK has invested close to Rs.600 crore from its first and second funds, including the three investments it made in Mumbai and Pune this year. Shortly, it will also begin raising its first offshore fund of $250-300 million, which it recently registered in Singapore. As a fund, ASK Property invests in residential projects and is particular about the price band in which the apartments are sold. In Mumbai, it typically invests in projects priced at Rs.8,000-12,000 a sq.ft. In Pune, Delhi-National Capital Region and Bangalore it invests in projects priced at Rs.4,000-6,000 a sq.ft. In February, Deutsche Bank AG sold its investment in a subsidiary of Mumbai-based Lodha Developers Ltd for a gain of Rs.900 crore on an investment of Rs.1,640 crore made four years ago. Analysts estimate Deutsche Bank got IRRs of 12-13% on the investment. Typically, a 20% IRR is considered good for investments in the sector. In 2011, Kotak India Real Estate Fund-I sold its stake in an office building in Mumbai to a fund managed by Tata Realty and Infrastructure Ltd for Rs.385 crore on an investment of Rs.95 crore. In another exit later, Kotak sold its stake in 3C Company’s information technology park project in Noida back to the promoters, earning a return of less than 30% on its investment. Many PE funds focused on real estate will be under pressure to show exits to investors this year as their investment cycles near an end, or find it difficult to raise fresh capital, said Amit Goenka, national director-capital transactions, Knight Frank India, a property advisory.

Green nod for high-rises takes too long says CM

5/15/2012 Chief minister Prithviraj Chavan on Monday expressed concern over pending environmental clearances for high-rise projects in the city . "It has been found that the Union ministry of environment andforests (MoEF)hasbeen taking too much time in granting clearances to high-rises ," said Chavan. During his meeting with Union environment minister Jayanti Natarajan on May 7, Chavan had suggested the formation of three expert committees for the state . "While one can take care of approvals for real estate projectsin Mumbai, the second can clear realty projects in the rest of the state and the third can look into industrial and mining clearances ," Chavan said , adding he was willing to meetN atarajan again todiscuss the issue. Chavan said he had requested the Union minister to keep in abeyance a contentious notification which ruled that a high-rise can be permitted only on roads with a minimum width of 30 m and required a fire brigade unit within a certain distance from the structure. "I told the minister that if the notification is implemented , no high-rise construction would be permissible in a city like Mumbai ," Chavan said . Chavan plans to call on the minister to discuss the ambitious proposal to set up a statue of Shivaji in the Arabian Sea . The chief minister said the Madhav Gadgil report on preservation of the ecology in the Western Ghats was yet to be discussed.

Indians prefer second-hand property: Study

5/14/2012 While buying a house, majority of the Indians prefer a ready-to-move property than new launches, a recent study has said. "About 74 percent home buyers across India are negotiating for a ready-to-move property," real estate market news portal Track2Realty s survey titled Home Buyer s Satisfaction Index said. The survey says out of the remaining 26 percent, who opted for new launches for price discounts, as many as 82 percent were now repenting their decision, mainly due to delays in the project completion. The survey was conducted in Delhi, Mumbai, Kolkata, Bangalore, Kochi, Ahmedabad, Chennai and Patna. About 68 percent of buyers prefer ready-to-move property because they could avail of tax benefits only after getting the possession of the house, it says. "Saving tax on the EMIs is one of the big reasons why eight out of 10 plan their house buying," it points out. Around 92 percent of the respondents agreed that buying under-construction property makes them suffer double blow of paying rent and EMI and not getting any tax benefit. Nearly 52 percent were ready to pay slightly more for a ready-to-move property because they wanted to make sure who their neighbours would be and the overall community profile. Delay in the delivery was cited as a major reason by almost 92 percent buyers for reluctance to book a new launch. Faulty design or construction scares 70 percent of home buyers, who opted for "you get what you see" projects. "About 78 percent say they have not got what was showcased as the sample flat," the survey adds. Around 72 percent respondents complained about developers passing off cafeterias as "clubs" and under-equipped gyms. Also, 72 percent were scared of going to consumer courts and face the legal hassles. More than 62 percent, therefore, said they preferred to settle for a flat in the secondary market.

Coming soon: affordable housing policy for all

5/14/2012 In two months, India could have a brand new affordable housing policy, an effort to give some boost to a weakening real estate sector. The Union Ministry of Housing and Urban Poverty Alleviation (Mhupa) is in the process of finalising such a policy in two months, reports Business Standard. The government had already allowed external commercial borrowing (ECB) for low cost houses in India in the annual Budget. But the real estate companies are not too keen on this segment because of the low margins.Hence the government is now trying to make affordable housing attractive for the developers as well. The policy will raise the floor space index to compensate developers for high cost of land and also ease density norms, the Business Standard article says. It would give capital and interest subsidy to developers. Even government land would be auctioned on the basis of who could build maximum number of low cost houses. The Mhupa has also built an internal committee to fast track the process of granting approvals of housing projects in a bid to reduce costs by 25-40 percent, reports the Economic Times. Approvals would be given in six-eight weeks as against almost 70 approvals they require at present which typically take between two to three years. A recent example of such a case is the allegation by the Maharashtra Chamber of Housing Industry and the Confederation of Real Estate Developers’ Associations of India that 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. Such projects could be better executed with some sort of a single window clearance system. On the other hand, the government is also making strict riders for the ECB borrowing so that money cannot be borrowed for low cost housing and transferred to other segments. “We do not want a situation where the land mafia is trying to raise such funds from abroad. Only genuine developers, who are building affordable housing projects should be able to avail such loans,” a finance ministry official said. So the government could mention specific projects and developers that could access the ECB funds and also mention specific channels like National Housing Bank to borrow the funds.

Indian moms storming into real estate

5/12/2012 Indian mothers have indeed come a long way to prove that the challenging job of realty business can be managed along with family responsibilities and bringing up the children. Ravi Sinha salutes the mother. When the mother of a three-yearold baby, Ramya Agnihotri (name changed on request) joined a Mumbaibased real estate company, her neighbours had suspicion in their eyes and colleagues were visibly uncomfortable in the presence of a woman. It took around a decade for this marketing director to scale up the professional ladder but more than that, the real challenge was to make sure she is treated on an equal footing as an employee and alongside, not neglecting the upbringing of her child. Similar is the story of Anuradha Gandhi, director, Property Solutions (I) Pvt Ltd, a Kalpataru Group company, where she leads the project management, facility management and mall management services of the company. Gandhi is well-qualified to face the multiple challenges of the real estate sector professionally but the larger challenge at hand is bringing up her two daughters while taking up the demanding job of real estate. "I come from a progressive family where I had supportive parents and an encouraging husband but looking back, I feel times have really changed. Even in our organisation, now around 30 per cent employees are women" smiles Gandhi. However, all mothers in real estate did not enjoy this comfort zone. Ashwin Puri, CEO of Mumbai-based PPZ had to deal with a lot of challenges on the job. It is difficult for a working mother to take up key positions in this industry as it thrives on relationships, networking and contacts. It is challenging for a woman to stay late for dinners, share a drink with a developer in the evening to build relationships. These realities put women on the back foot. "At one point of time, I was lucky to get an opportunity to work as a development consultant whose role starts from undertaking a full site and catchment appraisal, to preparing a detailed design brief for architects and controlling the entire design development process and a project team to adhere to this brief and vision of the developer," she adds. "Earlier, not many women got such openings but today, there are many such opportunities which would suit a woman and she would add immense value despite the existing practical constraints," shares Puri. Renuka Chohan, head of corporate planning, RNA Corp, had a supportive husband and loving mother-inlaw who never questioned long duration official tours, late hours and leaving her only son behind. "Earlier, there were very few women and that too, mostly in architecture and design. Now, working women are everywhere in real estate including sales and marketing. If you are a mother of a small kid back home, society by and large, is accepting it as a way of life now," beams Chohan. As Ashwin Puri says, "Women are making a steady progress in this industry and in the recent twothree years, I find myself smiling to see more number of women as a part of the project team which was not the case earlier."

Nilgiris s tea estates lose ground to real estate

5/12/2012 The famed tea gardens of the Nilgiris are fast disappearing, thanks to commercial activities linked to real estate and tourism. In the last seven years, tea estates in the hills have shrunk by more than 1,200 hectares. The green patches on the hills are being replaced with concrete structures at a fast pace. "The recent trend in land use is a serious threat to the Nilgiris eco-system. Indiscriminate conversion of tea gardens into concrete structures will spoil the hills," said Tea Board executive director R Ambalavanan. Many small tea growers are falling prey to the lure of quick money offered by realtors and real estate developers. According to records available with TOI, in 2004, small tea estates in Nilgiris were spread across 43,699 hectares. "Now, it would be approximately 42,500 hectares in the district," said Ambalavanan. It is estimated that around 65,000 small farmers cultivated tea in the district six years ago. Interestingly, though the number of small tea growers has gone up by at least 10-15% in the hills, the area under cultivation has decreased significantly. Waking up to the concerns, the Tea Board has undertaken enumeration and registration of small tea growers in the district. Even corporate estates have begun to shrink in size by about 8% in the past decade and floriculture too, say farmers, has grown at the cost of tea gardens. The tea directory says that in 1998, there were 160 companies managing gardens spread over an extent of 17,468 hectares in the six taluks in the Nilgiris. "A baseline survey conducted in 2011 found that the corporate tea gardens had shrunk to 16,025 hectares. Even the number of estates went down to 95 from 160 in 1998," said Ambalavanan. Activists and residents blame it on local land sharks as well as from other states. "Small farmers are carried away by the huge offers by real estate developers for their land," said K Mohan, a resident of Kambatty village in the district. Many small tea estates in Thummanatty panchayat near Kambatty have given way to buildings and so have many of the panchayats in the Nilgiris. Representatives of the local bodies in the district have been given special powers regarding issuing building licenses in panchayat areas and the dos and don ts they have to follow. "But, the local body representatives should be more stringent while sanctioning approvals for buildings in panchayat areas especially in tea garden areas", said Nilgiris collector Archana Patnaik. Pro-active courts and sporadic crackdowns have had little effect as the green patches continue to give way to buildings. The prevailing market price for an estate is Rs 3 to Rs 4 lakh per acre if they remain a tea garden. However, real-estate agents and developers are ready to offer Rs 40 to 50 lakh per acre. Said K Balan (name changed), a local real-estate agent, networked with counterparts in Bangalore and Hyderabad, "Big time real estate operators in other states are eying the Nilgiris. They are ready to pay any amount for an acre of land here. Hence tea estates are getting converted to farm houses, tourist resorts and residential buildings. For small farmers, the kind of money they are offering is unimaginable." The conversion of tea gardens taking place in the district is far from legal and violative of several building norms in the highly eco-sensitive hill district. "But, only the local panchayats and revenue authorities are authorised to control such activities. The Tea Board does not have direct control over the land administration and therefore, it cannot directly check the trend," pointed out Ambalavanan.

Global Market Perspective - Second Quarter 2012 - A measured recovery

5/11/2012 The world s major commercial real estate markets have been in recovery mode since the crisis of 2008/2009, with 2011 having shown the strongest evidence of an upswing so far. As we move through 2012 nonetheless, first quarter market data suggests a slowing in forward momentum, with investment and leasing volumes down by about one-fifth on a year ago. We believe this is a lagged market response to the escalation of the euro crisis during the second half of 2011 and, as such, it is likely to be a temporary slowdown. Given the more positive outlook for the global economy, the significant weight of capital targeting commercial real estate and the strong pipeline of deals, we fully expect the global real estate markets to resume their steady, measured recovery path during the remainder of 2012. India Perspective: - India s economic growth is expected to ease to just below 7%, a result of weakening exports and investment spending, while the country s lack of progress on structural reform remains a persistent downside. - Despite RBI initiating cuts in term rates to improve liquidity, the ongoing policy paralysis , if continued, will slow monetary easing, possibly stalling any recovery. High oil prices also remain a dampener for dynamic but oil-intense economies such as China and India most vulnerable. - However, most emerging markets continue to perform above average, particularly those with strong domestic corporations (e.g. China) and/or IT-BPO functions (e.g. India and the Philippines) - Technology occupiers continue to expand in India, albeit at a slower pace. While large IT-ITES corporations are cautious in expanding their offshore centres in India, some traction has been seen from Level II IT-ITES firms. "The outlook for India s commercial real estate market remains favourably balanced, though we are definitely looking at a more rationalized growth over the mid-term," says Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India. "Two immediate causes for concern are the slowdown in the country s export markets and the continued absence of positive policy reforms which would help increase foreign investments into the sector."

Mumbai Land Prices Set to Extend 15% Decline Oberoi Realty Says

5/11/2012 Mumbai land prices, India’s most expensive, may extend their 15 percent decline this year as high borrowing costs force indebted developers to sell real estate, Oberoi Realty Ltd. (OBER) Chairman Vikas Oberoi said. Land transactions have dried up as buyers aren’t willing to pay higher prices or “ferociously” compete to purchase land, while sellers have been holding out, he said. “We are waiting for the right opportunity to buy,” Oberoi, who runs India’s second-largest developer by market value, said in an interview in Mumbai. “I don’t want to waste my bullets. These are high-cost acquisitions and they can make or break a company.” India’s biggest developers are failing to rein in record debt as they grapple with high borrowing costs, dwindling sales, and banks reluctant to lend to developers. Oberoi, with no debt and about 13 billion rupees ($244 million) in cash, will take advantage of falling prices to buy land, he said. Oberoi Realty reported a 5 percent increase in earnings to 1.43 billion rupees in the three months ended March 31 as the company increased home prices, beating analyst estimates. The developer, backed by Morgan Stanley, raised 10.3 billion rupees after selling shares at 260 rupees each in an initial public offering in October 2010. Oberoi is one of only two listed real estate developers in India with a net operating cash surplus after taking into account debt servicing, Rakshit Ranjan, a Mumbai-based analyst at Ambit Capital Pvt., said in a note dated April 26, after the developer reported earnings. Still, analysts have expressed concern that Oberoi isn’t deploying cash to buy land and putting the money to better use. The “missing clarity” on new land acquisitions may be a drag on valuations with “idle cash” offering lower returns, Mumbai-based analyst Tejas Sheth at Emkay Global Financial Services Ltd. said in a note to clients on April 26. He retained his “accumulate” rating on the stock and raised the target price by 17 percent to 315 rupees a share, citing strong sales in the fourth quarter. Oberoi said he is in the market to buy land. “I am not watching the audience, I am watching my game, not playing for the gallery.” Oberoi said. “I am very interested and very aggressive to acquire land, but aggression can’t be jumping off the cliff, it has to be backed with caution and preparation. After I jump I want to land on my feet not on my head.” Mumbai’s amended building rules for home construction will spur new projects and increase supply in India’s most expensive property market, where permissions to build had come to a virtual halt, Oberoi said. New rules by the state government will allow buyers to expand the size of their apartments by enclosing spaces such as balconies, flowerbeds and terraces. “The rules have crystallized what one can get, the basic land potential is clear,” Oberoi said. “Discrimination between two developers has now gone as everyone gets the same area. It’s leveled the playing field in a big way, which is fantastic.”

Cognizant raises investment in real estate infra by $200 m

5/10/2012 Cognizant Technology Solutions has increased its real estate infrastructure expansion in India by nearly $200 million. The US-based company, which has large offshore presence in India, has revised its investment plan to a total of $700 million in real estate from 2011 through 2015. This is to expand its campuses in India by an additional 10.5 million sq ft. This expanded programme includes expenditure on land acquisition, facilities construction and furnishings to build new company-owned IT development and delivery centres in regions primarily designated as Special Economic Zones in India. In February 2011, the company announced $500 million of investment in its India infrastructure expansion through the end of 2014. However, at the beginning of calendar 2012, the company decided to expand its planning horizon for the India real estate programme to 2015 and beyond, said a company spokesperson. CASH AND CAPEX For the first quarter ended March 2012, Cognizant finished with $2.5 billion of cash and short-term investments. It spent around $60.5 million for capital expenditures during the quarter. “During 2012, we expect our capital expenditure to total approximately $370 million,” Ms Karen McLoughlin, Chief Financial Officer, Cognizant, told analysts while discussing the company s financial results. HEADCOUNT Cognizant ended the March quarter with around 1,40,500 employees globally. Of this, nearly 105,000 are in employed in its India centres.

Competition Commission of India pulls up DLF for allotment cancellation

5/10/2012 The Competition Commission of India (CCI) has pulled up real estate major DLF Ltd in a recent order for cancelling the allotment of an apartment of a member of DLF s Park Place RWA, stating that it was in "direct contravention" of its stay order of September 2010. The order was passed by the commission to prevent the opposite party from abusing its dominant position to the detriment of allottees during pendency of the proceedings. The CCI also severely admonished the builder for discriminatory behaviour towards members of the owners association and other allottees/owners. The cancellation letter for one Vipin Mahajan was issued on January 28 last year when the interim order was in force. According to Mahajan, despite the directions being in force to date, the opposite party issued a letter in January last year, cancelling the booking of his apartment and forfeited a sum of Rs 23,06,778 out of the total amount of Rs 44,89,503. While the CCI accepted this restoration of status quo and therefore felt that no further direction needs to be passed as far as restitution of Mahajan s apartment was concerned which had been a great relief for the allottee concerned, the CCI as prescribed by the Competition Act 2002 "is obliged to impose penalty because of the deliberate non-compliance". This, the order stated, was a violation of Section 42 of the Act. Also, Section 48 of the Act makes it a liability of every person for penalty, who at the time of contravention was in charge of or was responsible to the company for conducting its business. DLF will now have to disclose the name of the errant persons who were responsible for the misconduct and also give a showcause notice as to why the penalty should not be imposed. The case on the same is up for hearing on May 17. Meanwhile, a spokesperson of DLF Ltd clarified that the company had "restored the ownership of the apartment which was cancelled due to non-payment of dues by the allottee".

LIC Housing Finance raises Rs 250 crore for real estate private equity fund

5/9/2012 LIC Housing Finance Ltd, the mortgage unit of India s biggest insurer, has achieved a first close of Rs 250 crore for its maiden real estate private equity fund. Launched late last year, the fund has a target size of Rs 500 crore, with a green shoe option of Rs 250 crore. This provision will allow LIC Housing Finance Asset Management Company, the manager of the fund, to sell more units than planned. "We have raised Rs 250 crore so far from institutional investors like banks and corporates," AK Sharma, chief executive of LIC Housing Finance, told ET. "We also have additional commitment of Rs 50 crore and are hopeful to finish fund raising by June end." The fund has a target net internal rate of return of over 22%. It will invest in urban real estate such as mid-income housing projects, IT parks and warehouses across tier I and II cities. "There is a huge demand for mid income category homes in the range of Rs 1,600-4,000 per sq ft and we will target such opportunities," Sharma said. The fund is already looking at various proposals. The asset management arm of LIC has received a commitment of Rs 50 crore each from LIC and LIC Housing Finance. LIC, which earlier targeted retail investors, is now looking to raise the remaining capital from the institutional investors. "Retail investment in private equity is yet to pick up. Retail investors do not understand the risks and rewards associated with the business," Sharma said. There are at least half a dozen real estate-focussed funds in the market that are trying to scoop up fresh or follow-up funds to invest in Indian real estate. These include HDFC Property Fund, JP Morgan Asset Management, IndiaReit Fund Advisors and Kotak Realty Fund.

Realty players upbeat over removal of 1% TDS

5/9/2012 Finance Minister Pranab Mukherjee’s move to withdraw one per cent tax deducted at source (TDS) on transfer of immovable property has brought relief to the real estate industry. The industry said the move would be helpful, as TDS on property transactions would have discouraged buyers due to price escalation. “It is an excellent move, as TDS was totally unnecessary,” said R R Singh, director-general, National Real Estate Development Council. “Property buyers would benefit from the withdrawal. This would have been an additional burden on taxation,” he said.

Noida Extn realty issue echoes in Parliament

5/8/2012 The ongoing Noida Extension realty crisis on Thursday echoed in Parliament when BJP member in Rajya Sabha Mukhtar Abbas Naqvi said housing projects had remained stuck because of “red-tapism prevailing in the central government”. Raising the issue during zero hour, Naqvi said “10 lakh people”, who had booked houses in Noida Extension by investing savings of entire lifetime, were left in the lurch as the NCR Planning Board, a central body, had not cleared Greater Noida’s master plan, resulting in halting of projects. The Centre in March informed Parliament that no timeline could be set for approval of the master plan. Union minister of state for urban development, Saugata Roy, then informed Rajya Sabha the NCRPB has requested Uttar Pradesh to incorporate certain observations and suggestions and submit a revised plan. Even as the state government has, after addressing the objections raised by the NCR board, sent the plan back for approval, flat buyers have said they would stage a protest at Jantar Mantar in New Delhi later this month. The BJP MP said the inaction on the part of the central government had also rendered lakhs of construction workers jobless and they were on the verge of starvation. “The previous Bahujan Samaj Party (BSP) and the current Samajwadi Party (SP) governments in Uttar Pradesh have done their best to lift the deadlock but the planning board has failed to clear the master plan.” Naqvi demanded that the Union urban development minister should direct the NCR planning board to immediately solve the issue and clear the decks for resumption of stuck housing projects. Other members from the BJP as well as the CPI-M supported Naqvi in his stand. Non-clearance of Greater Noida’s master plan by the NCRPB has halted real estate projects in Noida Extension for the past six months. The NCR board came into picture after the Allahabad high court last year said construction would not begin till the board approved of the master plan. The NCR planning board has objected to massive acquisition of land despite a low population density in Greater Noida.

Nearly five lakh houses currently under construction in NCR

5/8/2012 Nearly 5,00,000 houses are under construction in the national capital market (NCR), the largest residential market in the country, and half of them are slated to be ready for possession by next year, according to property consultant Knight Frank. In its market overview, the consultant said that NCR did not witness a steep decline in launches last fiscal despite global economic slowdown and high mortgage rates in India. "Nearly 86,000 residential units entered the market in FY 2012... Nearly 40 per cent of the units launched, fall in the Rs 25-50 lakh ticket size," Knight Frank said in a report. Ghaziabad contributed to about 34 per cent of the number of project launched, followed by Gurgaon and Noida. "Developers were able to gauge the pulse of the market and launched more affordable and mid segment projects than premium projects in FY 2012," it added. Knight Frank research report found out that nearly 5,00,000 units were under various stages of construction in the NCR market as of March 2012. "NCR is the largest residential market in the country by sheer volume of residential units launched. It currently has higher number of units compared to the other five metropolitan cities of Mumbai, Chennai, Bangalore, Kolkata and Hyderabad put together," the consultant said. About 50 per cent of the upcoming supply in the NCR market is expected to be ready for possession by 2013, as a bulk of projects were launched towards the end of 2009 and early 2010. Nearly 57 per cent of the upcoming supply falls in Noida and Greater Noida. Gurgaon constitutes nearly 19 per cent of the upcoming supply and about 94,000 units are slated to enter this market by 2015. "The NCR being the largest residential market faces challenges at the unsold inventory levels. However the market has shown stability and there has been no drastic dip in the sales velocity in FY 2012. "The vacancy levels have improved and stand at 36 per cent in Q4 2012 as compared to 40 per cent in Q2 FY 2012," the report said. About 78 per cent of the unsold inventory is concentrated in Noida and Greater Noida, including Noida Extension that generated a controversy over land acquisition.

How Koramangala became a hot real estate destination in Bangalore

5/8/2012 Once upon a time localites used to call Koramangala Sollemangala (Solle means mosquitoes in Kannada). The area spread over 1,800 acres in eight blocks, was once petrified by mosquito menace and mangroves. It was a village and was considered not a great place to live for a Bangalorean in the 80s and 90s. Today, it is one of the hottest real estate destinations in India s Silicon Valley. "I would kill to get a place in Koramangala," said MR Jagannathan jokingly. The 60-year-old retired employee stays very close to Koramangala. "It used to be in the outskirts of the city when I could afford it. Now, unfortunately I cannot buy a place there." This is just a glimpse of how much the landscape and aspiration for Koramangala has changed over the years. "You won t believe it. I once had an offer to buy a plot in Koramangala for a few lakhs in the 90s. That time if I would have stretched a bit I could have actually owned something in Koramangala, but it was not so good then. This is one decision I regret to have made," added Mr Jagannathan. GAME CHANGERS The Rahejas, real estate developers, are often credited with changing the landscape of Koramangala when they come up with mixed-use project called Raheja Arcade. Many companies those days shifted from other parts of Bangalore to Raheja Arcade. Then came the Forum Mall, which further increased the value of the locality. In fact Forum is one of the earliest malls in the country, which was constructed to meet international standards. Even to this day, it is one of most successful malls in the country. BUYERS BENEFIT At present, the rentals for mid-segment residential properties are expected to grow by 5-10 per cent in the Koramangala locality over the next few months. "This is due to good social as well as physical infrastructure, good connectivity to various business districts and availability of premium developments," said Naveen Nadwani, director South India, for Cushman & Wakefield, a real estate consulting firm. "Rentals for residential properties in the high-end segment are expected to remain stable while mid-segment are expected to witness further increases on account of persistent demand. While in the commercial office market space as well as in the retail segment, rentals may remain stable in the short to medium term," added Mr Nadwani While the rate for land parcels range between Rs 13,000-15,000 per square feet, not much of commercial space is available for sale. "At present, no major land parcels suitable for developers are available in Koramangala. Only a few scattered small plots ranging up to a size of 3,500 sq ft owned by individuals are available," added Mr Nadwani. The residents of Koramangala are buying whatever is available. Recently, a well-known local businessman bought two adjacent plots in the vicinity.

residential builders, luxury real estate, property management, residential home builders, custom residential builders, luxury homes for sale, luxury houses for sale, property management services