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Vanguard Global ex-U.S. Real Estate (VNQI) Enters Oversold Territory 5/25/2013                   In trading on Friday, shares of the Vanguard Global ex-U.S. Real Estate ETF (NASD: VNQI) entered into oversold territory, changing hands as low as $57.05 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. In the case of Vanguard Global ex-U.S. Real Estate, the RSI reading has hit 29.7 — by comparison, the RSI reading for the S&P 500 is currently 54.6. A bullish investor could look at VNQI’s 29.7 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Looking at a chart of one year performance (below), VNQI’s low point in its 52 week range is $43.02 per share, with $62.10 as the 52 week high point — that compares with a last trade of $57.10. Vanguard Global ex-U.S. Real Estate shares are currently trading down about 1.6% on the day

Investors snub gold; prefer stocks real estate: Survey 5/24/2013                   In the wake of present global economic crisis, India’s declining GDP growth, political reform paralysis and recent market scams, India’s first financial services website, Equitymaster.com, recently took the much needed initiative on investor awareness. It started an Investor Survey 2013 on 3rd May this year, the very first move aimed at learning how confident you as an investor are and more importantly, what you are doing with your money. Awareness is always a part of investor education, and the survey was the first step towards that. Equitymaster, being “the investor’s best friend” along with a member base of 1,484,807 readers across 71 countries worldwide, took the onus on itself to spread more alertness and transparency among investors with this survey. The survey, being accessed and participated by 16,421 investors from within and outside India, asked the following basic questions. 1.Who is to blame for the dismal returns of your stock portfolio? 2.What will impact the Indian stock market in the near future? 3.Are you invested in the Indian stock market? 4.What is preferred choice of stocks? 5.Are you buying gold? 6.Where are you placing your bank deposits? 7.Where are you invested the most? 8.What is the most preferred mode of investment? 9.Where do you see the BSE Sensex in the short term and the long term? And some interesting results were found. Almost 34.6% of the participants think that they lost money due to their own greed. They are also positive about the situation changing for the better with proper policy initiatives by the Indian government. The good thing is they choose to remain invested over a variety of asset classes, although equity/mutual funds (38.5%) and real estate (34.7%) remain the preferred options. What is probably surprising is that investors have different opinions about whether or not to invest in gold. With only 8.9% of the investors looking to buy more gold, it can be safely said that Indian investors are gradually moving away from their most-preferred, age-old, safe investment choice. That being said, gold still is a recommended investment, considering the incessant money printing by more and more economies, along with the currently unstable global economic condition. However, the most crucial point made is that overall more than 60% of investors are pretty optimistic about the upward potential of the stock markets in the coming couple of years. Around 62.7% of the respondents believe the Sensex will rise up above 20,000 in the coming year. Around 37.2% of the respondents think that the Sensex would reach 30,000 in the next 2-3 years. It is good to see that investors are still optimistic and more importantly, have become more aggressive about investing in equity over time.

RBS Financial launches Real Estate Services in India 5/23/2013                   RBS Financial Services, a part of the Royal Bank of Scotland group, on Wednesday, announced the launch of Real Estate Services (RES) in India. This new initiative follows the launch of Wealth Planning, which was introduced last year. A statement issued by the company here said RES was a referral-based service which would offer a comprehensive range of real estate solutions to high net worth (HNW) clients in India. With the new service, in-house real estate specialists will work closely with clients to establish their goals and understand their risk appetites. They will then work with the client to guide them to a bespoke panel of real estate service providers, each of whom would be selected, after diligent analysis, on the basis of their skill, market expertise, integrity and professionalism. Anand Moorthy, head of RES for RBS Financial Services, said intelligent investors were today looking beyond the simple purchase of premium homes. “They see potential in pre-leased commercial and retail property, as well as small office spaces, structured deals and land or plotted developments. There is a fundamental need for quality real estate solutions for domestic, non-resident, individual and institutional clients,’’ he added.

It’s boom time for real estate sector 5/20/2013                   It seems like Kochi will continue to be the favourite real estate destination in the state as realtors feel the commencement of the construction of the Kochi Metro rail project will trigger sales in the city. Major players in the field say the city is witnessing vibrant activities now a days and this will indeed boost all kinds of business. The opening of Lulu shopping mall, Metro Rail and Smart City are the three major positive factors which will boost the sector. As per reports, around 52 acres of land have been acquired and handed over to DMRC for the Kochi Metro Rail Project so far. The remaining 48 acres, which is mainly for the metro stations, will be acquired soon. John Thomas, managing partner, Noel Villas and Apartments said Kochi has now become the best centre for real estate customers because of the facilities available here. “The real estate sector is doing well in the city now. The number of builders have come up with projects which are affordable to the consumers. The real estate concentration is more in the city because of the increased business activities here. This will increase with the commencement of the construction of Kochi metro,” he added. According to sources in the real estate sector, there will be a possible spurt in the land and property prices near the Kochi Metro stations. The land prices in Tripunithura and Aluva regions have already started rising, they said. “The majority of the builders are getting continuous enquiries from the customers. There is also a supply-demand mismatch in the sector. The positive sign is that now only genuine buyers are coming to the field,” said T V Thomas, who owns a franchise of Remax, an international real estate consultant company. According to John Thomas, though the real estate sector is going through a tough phase, local developments are driving the sales in the city.

Put and call options breather to real estate PE sector 5/22/2013                   The government s move to provide a fillip to investors by allowing put and call option on contracts is set to be notified soon, but it already has real estate private equity (PE) funds excited. Fund managers say, the ruling will help unwind transactions easily and hedge risks. CNBC-TV18 s Priyanka Ghosh reports. When almost ten real estate IPOs were called off due to the stock markets turning volatile in 2011 , private equity investors who had hoped to gain by exiting through the IPO route found themselves at a dead end. But now the proposed regulation to permit put and call options may just be what these investors were waiting for. Sunil Rohokale, CEO & MD, Ask Group says, “Put and call options are necessarily used in equity investments to hedge the risk because in the Indian real estate sector. Because of the approvals, the projects get delayed and the holding period of investments gets enhanced. To hedge the risk, if part of an investor s shares can be converted at a specific price and time, I think it suffices the purpose of the risk management as far as the international investors are concerned.” While some fund managers hope that along with an easy exit route, the time and price of exit will also be predetermined, others say that the regulation will legalise the enforcement of put and call options in compulsorily convertible debentures and preference shares. However, investors will be allowed to exit at fair market value at the time of exit because the RBI will not allow a speculative transaction. Apart from unwinding a transaction, according to industry experts the proposed law is also expected to boost private equity investment in the sector, which, post 2007, has never recovered. It is also expected to aid companies to raise overseas funds at a faster pace. According to Ernst & Young, fund managers are taking 6-7 months longer to raise funds than they did in 2006. This proposal will put FDI investments in India at par with global practice so companies are hoping that they will be able to sell the India story better.

Investors Leave London for Property Yields: Real Estate 5/21/2013                   Private-equity firms, pension funds and millionaires from Russia to Qatar spent more on real estate in London than the rest of the country for the first time last year, lifting values there while prices elsewhere sank. Now investors such as Legal & General Group Plc (LGEN) and Aviva (AV/) Plc are being attracted by higher returns available from cheaper real estate outside the capital. Enlarge image Pension funds and insurance companies like Legal & General and Aviva are hunting in larger regional cities such as Birmingham and Manchester, where the value of some properties has started to rise and the amount of empty space is lower than in previous recessions. Photographer: Chris Ratcliffe/Bloomberg 5:46 May 21 (Bloomberg) -- Phil Tily, managing director of Investment Property Databank Ltd. s U.K. business, discusses the outlook for commercial property in London and elsewhere in Britain. He spoke May 15 in London with Bloomberg s Ben Priechenfried. (Source: Bloomberg) 4:13 May 21 (Bloomberg) -- Hans Vrensen, global head of research at DTZ, talks about commercial real estate in London and investment opportunities outside of the U.K. capital. He spoke May 16 with Bloomberg s Neil Callanan in London. (Source: Bloomberg) Enlarge image Development Securities converted a warehouse and office property into a supermarket as part of a development in Littlehampton in the southern county of Sussex. It then sold the building to tenant William Morrison Supermarkets Plc. Source: Development Securities via Bloomberg Sponsored Links Growth Stock Pick (CTLE) The Nano-tech Juggernaut; An Awakening $2.6 Trillion ... www.theamericansignal.net Penny Stock of the Day Don t miss the next stock to take off! Insane gains f... www.theamericansignal.net 5-Star Stock Pick: CTLE 5 Reasons Why Nano Labs (OTCQB:CTLE) May Be Vital to ... www.theamericansignal.net Buy a link The value of income-producing properties outside London fell 7.2 percent from September 2011 through March while rising 7.4 percent in the city’s center, as a double-dip recession prompted buyers to avoid all but the safest prime assets, according to Investment Property Databank Ltd. That pushed non-London yields, or income as a percentage of the price, to 6.5 percent in March compared with 4.3 percent in London’s most expensive districts, IPD said. “The shift away from core to a higher-risk mentality is the dominant trend that I see in 2013 and 2014,” Joe Valente, head of research and strategy at JPMorgan Asset Management, said in an interview. “Not everyone is well equipped to go up that risk curve.” That doesn’t mean all markets are appealing. Investors are focused on properties with steady rental income or those that can be put to better use. Few in the property industry predict that commercial property values outside the capital will appreciate meaningfully until the U.K. economy improves. Birmingham, Manchester Pension funds and insurance companies like Legal & General and Aviva are hunting in larger regional cities such as Birmingham and Manchester, where the value of some properties has started to rise and the amount of empty space is lower than in previous recessions. The Co-Operative Group Ltd.’s headquarters in Manchester was bought by Chinese sovereign wealth fund Gingko Tree Investment and German fund Grundbesitz Europa in February, a person with knowledge of the deal said. The price was 142 million pounds ($216 million), according to the person, who asked not to be identified because the matter is private. Gingko declined to comment. Billionaire George Soros’s Quantum fund got a slice of the development market outside London when it bought 5.7 percent of Development Securities Plc (DSC) in January and increased its stake to 6.8 percent this month, according to stock exchange filings. About 90 percent of the developer and property investor’s income-producing assets are outside London, according to its annual report. Growth Pockets Although average values continue to fall outside of London and Cambridge, there are pockets of growth. More than 30 percent of non-London commercial properties tracked by IPD rose in the year through March, including top-tier warehouses in Manchester and shops in the best parts of Birmingham. Those assets gave investors returns that beat office buildings in the City of London financial district, IPD said. Commercial properties in Leeds now produce an annual yield of about 7 percent after values fell about 42 percent from their peak in 2007, according to the research company. Broker Colliers International estimates that City of London yields are 5.25 percent. “In the first quarter, we saw a growing percentage of assets outside of London delivering flat or positive capital growth, and that trend has continued in April,” Phil Tily, IPD managing director for the U.K. and Ireland, said in a May 15 report. “Hopefully, the recent economic news will lead to further confidence and selective recovery in the regions.”

UP witnesses remarkable achievement in outstanding investments in real estate sector 5/17/2013                   LUCKNOW: As per a sector specific analysis by Associated Chambers of Commerce and Industry of India ( Assocham), Uttar Pradesh has witnessed a remarkable progress in outstanding investments in real estate sector from 2008-09 till 2012-13. The most populous state of India, which is also the biggest consumer base for any company has recorded a 106 percent growth in total outstanding investments in the real estate sector, which is quite impressive as compared to an all India growth of mere 25 percent in the same period. UP holds sixth rank among all states in the total value of outstanding investments which happened in realty across India till March 2013 to the tune of Rs 14 lakh crore. It has a share of over 9 percent in the same.

UP witnesses remarkable achievement in outstanding investments in real estate sector 5/17/2013                   LUCKNOW: As per a sector specific analysis by Associated Chambers of Commerce and Industry of India ( Assocham), Uttar Pradesh has witnessed a remarkable progress in outstanding investments in real estate sector from 2008-09 till 2012-13. The most populous state of India, which is also the biggest consumer base for any company has recorded a 106 percent growth in total outstanding investments in the real estate sector, which is quite impressive as compared to an all India growth of mere 25 percent in the same period. UP holds sixth rank among all states in the total value of outstanding investments which happened in realty across India till March 2013 to the tune of Rs 14 lakh crore. It has a share of over 9 percent in the same.

Hurt real estate sector reeling under sand bans 5/19/2013                       MARGAO: The construction industry in Goa is reeling under a double whammy-an economic slowdown-infused buyer s market and a debilitating shortage of construction material, especially sand. While the state government has banned the extraction of sand in Goa, the Karnataka government has banned its transportation to Goa. These developments have led to a severe scarcity of this fundamental construction material and an over 100% escalation in its price. There s also a paucity of other construction materials such as stone aggregate, rubble and laterite stones. "The acute shortage of sand and other construction materials has led to a slowdown of construction projects," Datta Damodar Naik, managing director of a reputed Margao-based real estate firm, and former president of CREDAI (Confederation of Real Estate Developers Associations of India) told STOI. He explained that the months preceding the monsoon constitute the peak season for construction activities in Goa and are used to the optimum by both the organized and unorganized sectors in the construction field. This summer, construction activity has taken a hit. Sand transporters too are a worried lot. With the transportation ban by Karnataka in place, contractors are forced to transport the sand from Karwar, Ramnagar and Londa-considered superior to Goa s local produce-on the sly and are inevitably selling it at a premium. "Sand from the Kali riverbed in Karwar is fine and free of silt and other organic impurities. Sand extracted in Goa, on the other hand, is coarse and needs to be screened, which besides adding to the cost of labour, renders a significant portion unusable for construction work," explained N Prashant, a sand transporter. He pointed out that the locally available sand also has high levels of salinity and is therefore not advisable for concreting work. Stating that the transport ban has left almost 250 persons engaged in the business jobless, Prashant demanded that the state government provide them with adequate financial compensation on the lines of that being given to the mining-affected. The escalation in prices has obviously led to a rise in the cost of construction, but builders are not keen to transfer the burden to customers owing to the already slack real estate market. The stakeholders in the construction industry are hopeful that the new government in Karnataka will lift the ban on sand transportation to Goa. From P1 "The real estate sector is reeling under the effects of global recession. The ban on mining in Goa has also compounded the problem. While on one side, new sales are hard to come by, old buyers are facing problems in repayment of their house loans. It s a buyer s market. Besides, in this year s state budget, the real estate industry is among the heavily taxed sectors. We are sandwiched from all sides," lamented Naik. Considering the paucity of fundamental raw materials, what alternatives is the industry adopting? "RMC or ready-mix concrete in one option, as sand is substantially used for concreting purpose. It s expensive, but convenient," said Naik. "Another alternative is artificial sand and since a number of plants manufacturing this have come up in Goa and neighbouring areas they can cater to Goa s requirement." He added that these moves reduce the requirement of local sand to tasks like plastering, etc. Sources said that as an alternative to laterite stones, many construction firms have resorted to using concrete blocks. tnn

Chart of the Day: High five for real estate 5/14/2013                   The total of $105bn was fuelled by a 30% surge in deals across Europe and Asia against the first quarter of last year. This was below the $150bn registered in the fourth quarter which tends to be more buoyant than the rest of the year, but buying interest is growing fast. Appetites were strongest for prime property, although Jones Lang noted interest in higher yielding secondary real estate in Europe. Interest in secondary property, parallelling a rise in junk bonds, could propel the scale of deals beyond last year’s $450bn. David Green-Morgan, Jones Lang capital markets research director, confirmed: “Investors are starting to look slightly higher up the risk curve.” The Jones Lang report added: “There seems to be no slowdown on the horizon. If anything the flow of capital is increasing and arguably the weight of money has never been higher." “Continued quantitative easing around the world is increasing liquidity and reduces the cost of debt,” said Jones Lang. The availability of debt finance at competitive interest rates is key to fuelling property values, leading to a competition between investors for assets. The search for yield is persuading investors to put their frequent concerns about the illiquidity of the property market to one side. In the Americas, the growth in deal volumes is more restrained at 9%. US institutions are leading the buying spree, as you can see in the attached chart. Jones Lang said: “They remained one of the most active cross-border purchasers in the first quarter.” Successful fund-raisings in the last quarter have propelled institutional purchases. Japanese and US real estate investment trusts are back in the market. Sovereign wealth funds are also showing more interest in real estate, increasingly with joint-venture partners.

Buy IB Real Estate with a target price of Rs 93: Sandeep Wagle 5/15/2013                   Real Estate. ET Now: What is your view on IB Real Estate? Sandeep Wagle: IB Real Estate is a BUY call with a target of Rs 93 and a stop loss of Rs 82.

Despite FDI no respite in sight for retail real estate 5/16/2013                   Stung hard by the weakened economic climate and with no immediate prospects of a rush by foreign companies into multi-brand retail following the liberalisation of foreign direct investment (FDI) norms in the sector, growth in retail lease rentals in India will remain subdued over the next two years (an estimated 2-4% per annum). Incremental supply coupled with high vacancy levels in operational malls will continue to outstrip demand until 2014. Even now, demand remains abysmally low across most of the 10 major cities, a trend that emerged after the global financial crisis in 2008. Rentals across these cities shrank by 7-9% annually in the period between 2008 and 2012 and oversupply continues to plague many of them even today; mall vacancies in some of them are as high as 30-35%. Compounding this will be the fact that around 38 million sq. ft. of retail mall space is expected to materialize in these 10 major cities by 2015—Ahmedabad, Bangalore, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, NCR, Mumbai and Pune—although this will be far short of the nearly 67 million sq. ft of mall space that is planned. Today’s scenario is a far cry from the industry hey days during the last decade— during 2004-05 to 2007-08, organised retail grew at 28% compounded annual growth rate or CAGR. Retailers struggled in 2012-13 as weak consumer sentiment hit growth. Net space additions were lower as many companies shut down unprofitable stores and rationalized existing store spaces. Consequently, Crisil Research estimates that the organized retail market grew by a muted 10% in 2012-13, and will grow by around 12-14% in 2013-14 due to a marginal recovery in consumer sentiment arising from an improvement in the macroeconomic environment. Importantly, the expected boost to lease rentals due to the liberalisation of FDI in multi-brand retail is unlikely to materialise by 2014 as many companies are on a wait and watch mode because of the ongoing political uncertainty. Even if a company decides to foray into the country in the immediate term, it is likely to take at least 2-3 years before its investments, particularly in back-end infrastructure, begin to yield results. Of the 10 major cities—in cities where FDI in multi-brand retail has been permitted namely Mumbai, Pune, Hyderabad and parts of NCR (Delhi, Gurgaon and Faridabad)—the incremental demand from foreign retailers is expected to materialize only after 2014. But for that to happen, a number of issues still remain to be ironed out. The decision to permit 51% FDI in multi-brand retail was taken in September 2012 (10 months after the proposal was initially cleared and put on hold thereafter) and the FDI cap in single-brand retail was removed in January 2012. But there is still a lack of policy clarity, although the Supreme Court’s recent decision to dismiss a challenge to the government’s decision to liberalise FDI in retail will be seen as a major positive step by foreign retailers. Policy riders in multi-brand retail such as the sourcing and back-end investment clauses are particularly worrisome for foreign retailers because certain segments such as apparels and electronics do not require that much investment in the back-end. Factors such as the mandatory approval required by the state governments are also playing on retailers’ minds (currently only nine states and two union territories have allowed FDI in multi-brand retail). That is not to say that there has been no forward movement since the policy changes. Although no concrete proposal has been received in multi-brand retail, around eight proposals in single brand retail, amounting to Rs.114 billion, have been cleared by the Foreign Investment Promotion Board of India, including Swedish furniture retailer Ikea’s proposed investment of Rs.105 billion. Ikea has proposed to set up 10 stores in India in over 10 years. Eventually, however, global giants such as Walmart, Tesco and Carrefour will find the lure of the India growth story and its inherent potential hard to resist. This will result in organised retail growing at a robust 18-20% in the longer term. But for the medium term, it is mostly wait and watch for FDI. That, of course, is not good news on the retail lease rentals front, particularly with the lingering uncertainty on economic growth.

Northeast experiencing real estate boom 5/10/2013                   Guwahati, May 10 (ANI): The countrywide boom in the real estate sector is now visible in the northeast, especially in Assam, which has fast emerged as an investment hotspot. Assam is a growing hub for trade and commerce in the Northeast. And, this has opened up new vistas for the real estate industry. Shopping malls, showrooms, apartments and hotels - the new face of city has made it one of the most happening places in the country. And to tap the potential - real estate developers are venturing in. In recent years, the demand for both residential and commercial complexes is on the rise. "Now the government is focusing in Northeast and there is immense potentiality for development basically industrial projects," said D K Roy, DY General Manager, TANTIA construction, Kolkata Recently, a three-day realty expo was also held in Maniram Dewan Trade Centre in Guwahati. Organised by AREIDA, it aimed at bringing real estate leaders and customers under one roof. Many multinational companies also participated in the expo. "We have our own service, showroom here in Guwahati. Now we are concentrating on the entire Northeast because northeast is one of the fast growing market in India and buying products is very good. We already sold many products because this is the most developing area and expecting more good number in future," said Parag Miraz, a participant. The decline of insurgency has triggered economic growth in the Northeast. One of the sectors to benefit from this - is the real estate. (ANI)

Why Mumbai real estate rates will continue to be stable 5/13/2013                   In the Indian city which has for years carried the unwholesome reputation of being the most over-priced in terms of residential real estate valuations, there is no relief in sight for aspiring home buyers. Over the last four years, property valuations in the financial capital have increased by an average of 66 percent. All ‘expert’ predictions of an imminent correction over the last three years have proved to be wrong. It is true that going by all known market dynamics, a correction was inevitable. Lack of affordability over an extended period is a known catalyst for downward revisions in any market category, including real estate. One of the primary reasons for Mumbai’s ‘unreal’ price movements is the limited supply of ‘clear’ land. AFP Another globally accepted precursor of a property market correction is a surfeit of unsold inventory. If these two indicators would have held true in Mumbai, the city’s residential real estate market should have corrected three years ago. However… Ground Reality Residential property prices in Mumbai have increased steadily after the correction seen post the Lehman debacle. In the period from the second quarter of 2009 to the same quarter in 2013, residential real estate prices in Mumbai have increased by 66 percent. In Thane, the increase has been even higher at 70 percent while Navi Mumbai has seen a staggering escalation of 74 percent. Even within Mumbai, some locations have crossed the 66 percent average increase in the same period. The Malad–Borivali belt has seen an increase of 85 percent. The cumulative price escalation figures for Mumbai, Thane and Navi Mumbai represent the highest among all cities in India. During the period in question (2Q 2009-2Q 2013), Gurgaon and Bangalore – undeniably two of the hottest real estate markets in India – saw increases of 52 percent and 46 percent, respectively. From an end-user’s perspective, Mumbai’s astronomical residential price increase is undoubtedly irrational. Below the surface, however, there are market forces at work which cannot be mitigated. Escalation triggers One of the primary reasons for Mumbai’s ‘unreal’ price movements is the limited supply of ‘clear’ land. Other factors at play are the reduction in new launches over a 1.5 year period from 1Q 2011 to 2Q 2012, caused largely by a slowdown in approvals for new projects, and the high interest rate scenario in 2010-2011. In this period, the government, in its efforts to curb inflation, raised lending rates around 12 times. Every time this happened, developers’ input costs for their projects rose in tandem. The matter was further compounded by the pressure on developers to give assured return to investors who had bought into their projects at the pre-launch stage. Meanwhile, there was a high rate of price volatility in other asset classes such as equity. This, along with the high cost of debt, brought about a massive liquidity crunch. As a result, developers’ backs were to the wall when it came to purchasing the massively priced land parcels. This limited new project launches. The historical title disputes attached to many of these plots did not help matters much, either. In the midst of all this came the new development control rules, which caused many projects to come to a grinding halt midway as developers and architects struggled to adapt projects at various stages of development to a completely new set of mandatory guidelines. Finally, we need to consider the phenomenon that is, in degree if not in principle, more or less unique to Mumbai – that of developers as well as buyers adopting the dubious philosophy of benchmarking prices in an particular locality based on one or two high-profile transactions or over-hyped launches. Demand remains steady Through it all, the demand for investment residential properties and end-user homes in the country’s financial capital has remained stable. The ever-increasing number of second home buyers within the city and the firmly entrenched – and admittedly vindicated – mind-set that real estate prices in Mumbai will never go down will ensure that the stability of Mumbai residential real estate market will continue.

Real estate regulator Bill will see light of the day soon; it is in the interest of all stakeholders: R V Verma 5/11/2013                   The Central Registry of Securitisation Asset Reconstruction & Security Interest of India (CERSAI) portal would be open to the public by mid-June, says R V Verma, chairman and managing director of National Housing Bank (NHB), a shareholding bank in CERSAI. In an interview with Neelasri Barman, he says the portal would provide a seamless payment gateway system and enable checks on information related to the properties that would be transacted. Edited excerpts: The Union Cabinet has deferred a decision on the real estate regulator Bill. When can it be expected? It s only a matter of time, as this is a critical need and would serve the larger interests of consumers and aid transparency in the sector. This would, in turn, have a number of positive implications, including a large flow of funds, better credit availability and lower risks. These would result in more efficient and transparent pricing and enhanced confidence among lending institutions. It would be akin to reforms in the real sector (supply side), which has lagged sectors such as finance. We are optimistic the Bill would see the light of the day soon, as it is in the interests of all stakeholders. Earlier, you had said disbursements in 2013-14 would be better than in 2011-12. Which factors would contribute to the disbursement growth? Yes, that s right. We would be closing the year ending June 30 (NHB follows the July-June financial year) with the highest-ever disbursement for the bank in a single year-about Rs 18,000 crore. Recently, NHB had crossed an important milestone-total refinance of Rs 1 lakh crore. The home loan market, for primary lending institutions (PLIs), as well as NHB, has seen robust and sustained growth. For PLIs, 2012-13 saw growth of 19 per cent, which is likely to remain so, if not improve in 2013-14. NHB s refinance schemes cover a wide spectrum of lending by PLIs. NHB is also supported by the government and the Reserve Bank of India (RBI), in terms of allocation of resources (Rs 6,000 crore under the Rural Housing Fund and Rs 2,000 crore under the Urban Housing Fund for 2013-14). This helps us expand our operations and extend support to PLIs in lending to under-served market segments. Besides, NHB s thrust on low and moderate income housing has given us a low average loan size (in terms of refinance)---Rs 9-10 lakh. NHB is also encouraging lending in niche areas such as energy-efficient residential housing projects and solar water heating & solar lighting equipment for domestic use, in line with the government s thrust on encouraging energy conservation, energy efficiency and use of alternative renewable energy sources. We see growing passion among the people for green and clean energy environment, including in rural areas. How successful has CERSAI been, in terms of preventing fraudulent transactions in real estate? In about just two years starting operations, CERSAI has developed into an important source of information and data on transactions related to equitable mortgages. The central registry, or the CERSAI portal, has about 8.4 million transactions on its platform, which is being actively visited by banks, housing finance institutions and other lending agencies under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. These include subsisting mortgages, as well as new ones, created after CERSAI was set up. It is encouraging to receive positive and valuable feedback on the usefulness of the portal and the quality of data. As data on the CERSAI portal provides the status of encumbrance or creation of charge on a particular underlying property, lenders visiting the portal can avoid creating a second charge or lending against the same property, through misrepresentation by the borrower. The portal also updates the charge once the loan is fully amortised. While this helps prevent multiple lending against the same property at the individual transaction level, the CERSAI portal also mitigates the risk at the sector level. We have connected CERSAI with major credit bureaus in the country, through the CERSAI portal. An important message underlying this integration is credit risk emanating from frauds, misrepresentation and credit profiles of borrowers has to be mitigated through an organised and integrated system of information, one that is quick, reliable and cost effective. We are planning to open the CERSAI portal to public view by mid-June. We are working to provide a seamless payment gateway system for the individual members of the public to enter the site and check information relating to properties they would be transacting. You plan to raise Rs 14,000 crore this financial year. Would this include a tax-free bond issue? Yes, we believe there a good appetite for tax-free bonds among retail investors. This requires a great deal of time and planning. I feel a little more aggressive marketing, with more realistic and competitive pricing, can whet the appetite of institutional investors, as well, banks, financial institutions and companies. How much did you raise through your term deposit scheme last financial year? Considering interest rates are headed south, do you plan to revise rates this financial year? Frankly, term deposits form a very small part of our resources, but help us remain connected with the retail depositor community. We have not aggressively pursuing our retail deposits, but there is good potential; we will take measured steps in this direction. We keep a close watch on our cost of funds, as also the prevailing interest rate regime and the outlook, to take a view on our resource profile and lending rates. As a development finance institution, NHB operates on thin margins.

Karnataka polls: Real estate funds prop up polls 5/2/2013                   BANGALORE: There s a big dip in the amount of cash floating around this election, particularly of the unaccounted variety. The 2010 ban on iron ore exports from the state, imposed in the wake of rampant illegal mining, has changed the spend scenario, leaving only the flourishing real estate sector to fund poll fortunes -- at least in Bangalore City, Bangalore Rural, Mysore and Tumkur. This shift in money power from iron ore mining in Bellary district to the real estate sector in Bangalore will be a key change in the poll dynamics, as compared to 2008. Money generated through illegal businesses is laundered through various means, including mortgaging of land to generate funds. "Real estate money does play an important role in all elections, more so this year," Trilochan Sastry of Karnataka Election Watch said. Over the years, various cash-rich lobbies have funded parties and key individuals. For long, the liquor lobby funded elections and reaped a good harvest through successive governments. Then came the capitation lobby. With communities and individuals establishing medical and engineering colleges, money flowed during elections. Then came a real estate boom, and the contractor-developer lobby took up prime position, before mining came to the fore. Now, it s back to the land lords. "There s no doubt the real estate sector will play a vital role in this election, in the absence of mining. It doesn t mean that big builders are pumping in money. Candidates and their key supporters are involved in some way or other in the land business," said Zahed Mehmood of Silverline Realty. Most of the candidates, irrespective of the political parties they represent, and Independents contesting from Bangalore and Mysore, have a direct or indirect hand in land transactions. Many candidates with ancestral property started developing housing or commercial projects, while some sitting MLAs invested money in real estate after they became members of the assembly. However, none of the well-established developers are in the fray. Another way contestants are generating money is by pledging their benami properties to credit cooperative societies and private moneylenders. Candidates have taken this risk, unmindful of high interest rates. "These transactions are made some months before the election process starts. As nationalized banks seek detailed information on ownership and the source of the land, private moneylenders and credit cooperative societies are good sources," Prashanth Sambargi of Mars Realty said. Intra-corporate short-term loans are another source of money flow. Unlike in 2008, this time, intra-corporate loans are not too popular. "Some transactions have reportedly taken place, Sambargi said. Here, money is transferred to a candidate or his family-run company, for which the candidate pledges land or a house. Money flow Moneybags have hijacked Karnataka. Money power is also in full play in the state. In a few states, releasing of manifestos by major political parties is just a ritual. Thereafter, it s a money fight, tons of it. All parties, including Congress, BJP, KJP and JD(S) fight elections based on money power.

New property tax to hit Bengal real estate sector: CREDAI 5/8/2013                   The real estate sector in West Bengal would be hurt if a proposed tax on property sales is introduced in the Finance Bill 2013, the Confederation of Real Estate Developers Association of India s (CREDAI) Bengal chapter said Wednesday. This, according to CREDAI Bengal, is because valuation of properties by registration authorities in the state in many cases are much higher than their actual transaction values. The central government has proposed a new tax on real estate transactions on the basis of assessed valuation of a property at the time of transfer, instead of levying a tax on the basis of sale price fixed when the project was initiated. "In West Bengal, developers are largely affected due to the high valuation (of properties), which in lots of cases are more than the actual transaction price," CREDAI Bengal President Harsh Vardhan Patodia said here. Developers said the impact of the proposed tax on the sector would be huge across India as they have to pay additional income tax on the income, which is "not actually earned" by them and similarly purchasers also have to pay taxes based on deemed income, which they have "never received". According to them, the impact of the new tax would be "much greater" in Bengal as in many cities, including Kolkata, the actual value of property is much less than the valuation assessed by the stamp duty or registration authorities. "The declared circle rate (for valuations) is much higher in the state and in some cases it goes up to 25 percent to 100 percent of transaction," Patodia said. According to Patodia, if the state government did not rationalise the circle rate, real estate transactions would be impacted severely. "The problem is across India. But if West Bengal does not rationalise the rate in certain areas, transactions will not take place, so the business will come to a standstill. This problem will be very peculiar to the state," he added.

Gayle becomes brand ambassador of real estate firm Read more at: http://www.thatscricket.com/news/2013/05/09/gayle-is-brand-ambassador-real-estate-firm-067641.html 5/9/2013                   Patna, May 9: West Indian cricketer Chris Gayle was on Wednesday (May 8) named brand ambassador of Patna-based real estate company, Agrani Homes. The announcement was made by company s Chief Managing Director Alok Kumar at a function here. In his brief speech, Gayle expressed happiness over his association with the company active in Bihar, Jharkhand and National Capital Region. The big-bodied Jamaican, however, refused to talk about cricket. Gayle recently set a new record for the fastest century in the history of the game which came off just 30 balls for the Royal Challengers Bangalore in the IPL, and then went on to make the highest score ever in Twenty20, ending unbeaten with 175 off 66 balls. A large crowd had gathered at the venue, a leading hotel here, to get a glimpse of their favourite cricket star. The fans also thronged the airport and the residence of JD(U) Legislative Council member Sanjay Singh, who is also associated with the real estate company, on the arrival of the hard-hitting batsman. Read more at: http://www.thatscricket.com/news/2013/05/09/gayle-is-brand-ambassador-real-estate-firm-067641.html

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