Monthly Archives: April 2010

Joint Venture Among Tata Housing & Tata Realty

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Joint venture
April 26, 2010

The two companies Tata Realty and Tata Housing belonging to Tata Sons Ltd. are competing with each other which are doing nothing but hindering Tata Sons on a whole.  Therefore, Tata Sons is asking them to avoid this competition.

Tata Housing Development Co. Ltd was established so as to develop and sell primarily residential projects whereas Tata Realty and Infrastructure Ltd was set up to function as a fund and develop infrastructure projects. They both are 100 percent subsidiaries of the group.

Some officials stated that the problem arose two years ago when Tata Realty started looking for real estate projects which directly overlap Tata Housing’s business interests.

This competition is on its peak since both of them now plan residential projects in cities such as Pune and New Delhi.

Now, Tata Realty is been told that it has two options; either develop its ongoing and future residential projects as joint ventures with Tata Housing or not pursue housing projects at all.

Mr. Brotin Banerjee, managing director and chief executive officer of Tata Housing maintained a silence when asked if the two groups had competition amongst them and said that just some overlaps were there and added that the companies shared the same chairman, R.K. Krishnakumar.

Emergence of Commercial Complexes

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Complex - Roland in Vancouver (035)
April 27, 2010

As per some senior executive of JLLM, Jones Lang LaSalle Meghraj, integrated commercial space developments is following the steps of integrated residential complexes and is thus expanding in India.

Mr. Anuj Puri, th Country Head of JLLM said that this is an upcoming trend as well as a saleable one.

Such projects house office space, five-star hotels and retail area among other facilities.

The project in Bangalore from Brigade Group is an example of such projects while there are many more such projects queued up.

As per the expectation of Puri, the margin builders have kept in these projects is higher than that in other projects.

Other examples of such projects are Capital City by BPTP Ltd in Noida which is spread across 21.17 acres and comprises 2.1 million sq ft of office space, Nirmal Galaxy by Nirmal Lifestyle at Mulund in suburban Mumbai.

One of the builders said that there is no doubt in the success of such projects since their housing counterparts are already a success.

Elderly Now Willing to Spend on Realty

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new house 3
April 24, 2010

As per the report from JLLM, Jones Lang LaSalle Meghraj, a realty advisory firm, the senior citizens’ home is now a days the most upcoming field of realty. This fact is evident from the increasing number of projects housing stock directed at this section.

The report published by JLLM ’Senior housing sector in India: Key Trends’ gives full details of this observation. According to the report, the seniors are not seen the same way they were seen a decade ago. These days, their status is experiencing a drastic change, the reasons being change in mindset, augmented financial independence and growing cohort size. The big caliber of this segment and its unique needs and promises are offering a good vector of opportunities to the Indian realty market.

Also, as per the report, the number of seniors believing in the idea of good standard of living and the sunset years of their lives with similar-aged companions and sharing facilities in settings of security  and enablement is rising rapidly. A survey was conducted on households with senior citizens from which it was inferred that more than 60% of them found concept of an elderly club or a senior citizen’s association as a viable and practical one. The old age homes are now replaced by contemporary retirement homes or resorts was one of the conclusions from the report.

Realty Getting Costlier

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My House drawing, back side
April 23, 2010

The real estate buyers are in big trouble in how to buy a dream home with these increasing costs of realty day by day. Since more than eight months, a 30-year-old professional, Nisha Parekh, has been searching for a proper and affordable residential space in Ahmadabad for her family but has not yet succeeded despite of aggrandizing her budget by Rs. 10 lakh, i.e, from Rs 25 lakh to Rs 35 lakh.

This is not the story of just one Nisha. It is about all the young buyers who failed to buy their dream home since the prices of realty shoot up by 30 percent in August 2009. Ms Pakekh, who till recently was working as a researcher with ISRO also added that due to these price hikes, she failed to buy her a dream home aven after increasing the budget with a decent amount.

One more witness of this price hike is Mr. Dutta, who noticed that in 2008 prices in Mumbai touched the sky. He added that after this hike, on recognizing lower volumes of transactions, the developers use inducements as goodies to attract home buyers. A price correction of around 15% could bring back buoyancy into the market, based on various indications. According to him, if this price rise continues, it will force the developers to finally come up with certain schemes and discounts that were done away with.

Also according to him, the realtors are majorly focusing on high profile projects which fall in the category of above Rs. 40 lakh costing but if seen from buyer point of you, they are totally unaffordable,
even with the economy stabilising and improved job security.

Debates on the future of real estate investment regionally and internationally

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Abu Dhabi Cityscape
April 22, 2010

Due to the support from a government-led infrastructure program, the real estate market is now acquiring stability again. But, according to senior executives of three of the top Abu Dhabi master developers with multi-billion dollar projects on their books; it will still take some time to be fully established.

At the Cityscape Abu Dhabi conference, in a finance panel debate it has been noticed that the highest investment potential is in the mid-range residential rental and the retail property sectors.

The CEO of Aldar Properties, John Bullough who is behind the projects as Al Raha Gardens, Yas Island and the Ferrari World theme park; the Executive Director of Mubadala Real Estate and Hospitality, John Thomas, associated with projects like Arzanah, Sowwah Island and the Mina Zayed Waterfront; and the Chief Operating Officer of Sorouh Real Estate, Gurjit Singh, whose works include Shams Abu Dhabi, Lulu Island and Al Ghadeer on the Abu Dhabi-Dubai border were some of the panel members.

Till 21 April 2010, Wednesday, many more inclusive and open debates will be held at the conference alongside Cityscape Abu Dhabi, at the Abu Dhabi National Exhibition Centre. The debate will be on the topic “the future of real estate investment regionally and internationally”.

Truth behind ‘Affordable Homes’

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More affordable homes
Affordable homeApril 21, 2010

A really interesting question rising up these days is that is affordable housing taken seriously by our policy planners and key stakeholders? Now-a-days, talking and discussing affordable homes has become a fashion, including those who were not as such associated with realty sector.

But when enters the term ‘affordable homes’, one must put up a question that affordable for whom?  Around 44% of our population comprises of people earning Rs 8,500 to Rs 40,000 as their monthly income and fall both in the formal and the informal sectors.  Are these flats for these 44% people?  Also, the banks are now backing out from providing home loans. Arun Mohan, a senior advocate and writer answered all these questions in his latest offering “Affordable Housing: How Law and Policy can make it possible” .

According to Arun Mohan, there are three areas that need urgent attention to provide affordable homes: One, availability of flats which are affordable; two, availability of bank finance; and, three, availability of land for housing. Also, crisis of confidence is one of the major problem due to which prices are so high and the market is restricted. He gave answers to these questions too.  After a keen analysis, he came to the conclusion that “certifying-cum-performance guaranteeing company” [or a regulator] is required, which would control the builders and issues a “wideguarantee certificate” to the flat buyer in order to ensure him that he will be delivered the flat he pays for. This guarantee will prove beneficial since both the flat buyer will be willing to part with his money and bank will also be willing to finance it.

Hike in Mumbai Property Prices is expected

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Blackstone Hotel Omaha, Nebraska
April 20, 2010

A current report by JLLM, Jones Lang LaSalle Meghraj revealed the fact that since sales are increasing and investor sentiment s are being strengthen, residential housing prices in Mumbai are expected to move further upside.

According to the report, demand for commercial spaces is improving and this growth is likely to continue till the end of 2010. As far as leases and outright purchases are concerned, this will result into a large number of transactions.

The supply is coming in all segments of residential, from luxury to mass housing. For the next year, in order to keep the markets going, both retail and commercial segments are also yielding enough supply.

The report also said that since many developers are now going for public funding, a large number of activities on the residential property front, owing to the strong demand will take place.

Besides, in order to boost accessibility more locations within the city and reduce commuting time, infrastructure projects such as the monorail, metro, and flyovers are being put in place.

Swami said that considering the pace at which these measures are implemented, in the medium to long-term this is good news for the realty sector. He also added that residential realty is likely to continue its demand growth, and thus will be on the priority list of most builders.

Omaxe Is Likely to start AIIMS Project

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All India Institute of Medical Sciences
April 19, 2010

Omaxe, one of the leading real estate construction and development company has come up with a Rs 64.8 cr project. This project is the All India Institute of Medical Sciences (AIIMS) which will be constructed at Rishikesh, Uttarakhand. Mr. Rohtas Goel, the Chairman and Managing Director of Omaxe also added that the project would start next month.

He informed that the order book of Omaxe stood at Rs 825 cr. He also plans to add Rs 200-crore order for Omaxe Infra in FY11. Their next strategy will be to raise Rs 800 crore but are yet waiting for conductive market conditions.

While bringing the company’s projection for FY11 into limelight, Goel said the company’s infrastructure arm’s sale were seen at Rs 500 cr vs. Rs 200 cr. Also, for this year, a profit of Rs. 50 cr. was seen.

35 Acre Land by Godrej for Development

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Chunk
April 17, 2010

Godrej Group, Mumbai’s biggest landowner, is likely to release by the end of this year in Vikhroli, a prime 35-acre chunk.
In the recent past, this could be one of the largest drapes of unencumbered realty hitting the market. In the eastern suburbs, most of the large industrial plots sold to developers over the past 10 years were between 5 and 20 acres.
In Vikhroli, it is estimated that the Godrej controls around 4,000 acres most of which is constituted of a huge mangrove sprawl. This mangrove sprawl is titled as the best preserved mangrove park in Mumbai by environmentalists.
On Tuesday, the executive director of Godrej Properties, Pirojsha Godrej revealed to Times of India that for mixed-use development, a big plan is being prepared. And it is being prepared by none other than architect Cesar Pelli.

Demand for Super Luxury Housing is Back

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Chennai Properties - Real Estate India - Villa Viviana 1

Luxury Property

The super luxury housing segment whose range was from Rs. 4 cr to Rs. 30 cr and which had taken backseat during the slowdown is now coming back. The demand for these residential properties has risen by 30- 40 percent.

The real estate firms such as Lodha Developers, Orbit Corporation, and Skyline Constructions are taking advantage of this demand hike and plan to cash in on a rather specialized alcove- the boutique homes category.

According to the national head (residential agency) Knight Frank India, Anand Narayanan KB, the sales of such luxury boutique homes are much higher as compared to volume luxury properties since there is limitation in this segment.

The HNI segment is to be hit by these homes. This includes senior professionals, CEOs, wealthy non-resident Indians and entrepreneurs in new-age businesses who are seeking for house in India. The CEO, Homebay Residential, Jones Lang LaSalle Meghraj, a real estate services firm, Mr. Raminder Grover noticed that the prices of luxury homes has gone up by 20%.

However, he also added that the prices should not rise now and become stable or otherwise the demand will go down again.

RBI Might Compel Banks to Increase Loan Rates

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April 15, 2010

The builders might now suffer with costlier scrounging since Reserve Bank of India (RBI) plans to ask banks to set apart more funds for loans to commercial realty projects. This in turn will force banks to aggrandize the interest rates on such loans.

According to senior bankers RBI can take either of the two options. First, increase normal provisioning or second, risk weight on bank loans to realty firms in the forthcoming policy on 20th of April. This will be intended at shielding banks’ contact with properties in the midst of mounting prices.

According to the Chairman and Managing Director of Indian Overseas Bank, SA Bhat, the outcome of RBI not raising the cash reserve ratio (CRR) and keep signaling rates like reverse-repo rate and repo rate untouched will be that the prudential norms will get tighten. “An increase in risk weight, especially on realty loans, is not ruled out”, he added.

As per the latest available figures, in November 2009, banks exposure to commercial realty was Rs. 88,581 crores.

The capital which is set apart to estimate capital sufficiency ratio is the risk weight which is now 9 percent for all banks. Less capital is to be kept for borrowers with increased credit rating. The risk weight is 20 percent for triple A clients, which indicates that a reserve of Rs. 1.80 of its own capital for every Rs. 100 loan is to be needed within banks for such borrowers.

Commonwealth Village: Dream or Nightmare?

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As Delhi is gearing up for the Commonwealth Games, all eyes are set on the Commonwealth Village which promises state of the art facilities specially designed to be the home for over 8000 finest athletes of the participating countries.

Clausura Commonwealth Games - 99.JPG
Photo by anselmogzIt is being constructed in partnership between the Emaar MGF and the Delhi Development Authority. It’s being built next to the very famous Akshardham temple with easy access to and from south and central part of the capital. The village consists of 34 towers spread around 27 acres of land that have 1168 flats (2-5BHK) with five star amenities. It is full of plush green lawns, a swimming pool which could host competitions as well and that’s saying something, a world class health club with fully equipped gymnasium, tennis court, basketball court, kid’s crèche, play area and what not.

It was said that after the games are over the village will serve as the hostel for the students of Delhi University. The plan looks on hold as of now.

The approximate prices of the houses eyed by the real estate players are:

2 BHK (1443 sq. ft.) – Rs. 13250/- sq. ft. (Approx. Rs. 1.85 cr onwards)*
3 BHK (2092 sq. ft.) – Rs. 13250/- sq. ft. (Approx. Rs. 2.60 cr onwards)*
4 BHK (2535 sq. ft.) – Rs. 14000/- sq. ft. (Approx. Rs. 3.50 cr onwards) *
5 BHK (3278 sq. ft.) – Rs. 15000/- sq .ft. (Approx. Rs. 4.50 cr onwards)*

*Preferential Location Charges as applicable

But the candy of the eye will be the village going green. The building will be certified ‘Green’. On Saturday the Chief Minister inaugurated a 66/11 kV grid sub-station that will provide uninterrupted power supply. The Rs. 40 cr sub-station has been constructed by the power distribution company, BYPL, in a record time of 13 months.

She expressed confidence that the Commonwealth Games would prove to be a “memorable event and will be able to showcase Delhi as a developed, historical, modern and vibrant city.”

But to all this there is a flip side as well, the Environmentalists claim it’s not a smart thing to build these massive buildings on the banks of the Yamuna. They believe that the village will hamper the flow of groundwater that replenishes the seasonal river, effectively choking it which in turn will increase the shortage of water supply in the city.

Anyways amidst all this the excitement and the speed of preparation for the games the nature has been left to the mercy of gods and the babus. The city people can just sit, pray and watch.

Kingswood Oriental By Jaypee Greens

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Jaypee Greens

Kingswood Oriental, a new project launched by Jaypee Greens, has got attestation from oriental architecture.

Jaypee Greens in Noida is introducing a new product at Jaypee Greens Wish Town,Noida that will be called “Kingswood Oriental”. This construction will consists of independent residential villas extravagant view of golf greens on one side and a chip & putt golf course on the other.

The built up area is approx 3,700 sq ft and 4,600 sq ft.The suggested price of these exclusive homes starts from Rs 3 cr at a basic selling price of Rs 8,100 sq ft where each villa will have three floors.

Community special features

Kingswood Oriental is planned to be a separate community within Wish Town and admittance will be restricted only to the buyers and their guest. It also offers Multicoloured Oriental style wall paintings in common areas like social clubs,etc

Home features

To match the compatibility with oriental feel use of wood and bamboo is made in Private lily ponds in each home Provision for elevators in each home Jacuzzi in the master bathroom Miniature gazebo in the back garden of the house Terrace garden with barbeque Top-of-the-line security system featuring videophones and burglar sensors

Oriental clubhouse

Especially designed clubhouse which has been designed using essence from the Southeast Asian architecture, takes approximately 60,000 sq ft of built up area Wellness zone with state-of-the-art gymnasium and fitness centre;yoga,aerobics areas accompanied with Multi-cuisine restaurant Exclusive members lounge area Party halls & gardens

Range of sports facilities

Apart from all the world’s luxury Jaypee also provides yours residence with sports facilities. Tennis courts Squash Swimming pool Pool/snooker Library. The Kingswood Oriental residences will be a perfect accordance of luxury lifestyle with a touch of oriental architecture, combined with the latest technology for leisurely life.
you should prefer  Wish Town because of its location that is close to the Noida-Greater Noida expressway.Also,it is just 10 minutes drive from Ashram Chowk and it is marked to have Metro connectivity in the near future.

Jaypee Greens in Greater Noida bagged the Best Golf Development-India from CNBC Asia Pacific Property Awards in 2008.

Memorandum to Govt. from CREDAI to Take Off Service Tax

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Ministère des Finances QuébecApril 14, 2010

A memorandum has been submitted to the Finance Ministry concerned with the appeal for removal of service tax on housing complexes under construction by CREDAI, Confederation of Real Estate Developers’ Associations of India which is a real estate industry body.

The Chairman of CREDAI, Kumar Gera stated that they have put forth their concerns and suggestions and also discussed the probable impact of the provisions with the Ministry. An understanding of the problem and required corrective steps will be taken is a hope from the government. The list of recommendations was built in consultations with KPMG, its knowledge partner and was submitted to Y G Parande, a Finance Ministry Member (Budget).

According to Gera, the money collected through the imposition of service tax on real estate development will not be big enough; rather it would majorly lead an overall negative sentiment and a net loss of revenue.

In budget 2010, it was announced by Mr. Pranab Mukherjee, the Finance Minister that a tax would be imposed on the housing complexes under construction but later it was clarified by the officials that service tax would be imposed on 33 per cent of total selling price. This was interpreted by the real estate players as a 3.5% price escalation for the buyers.

According to CREDAI, it was an impractical proposal to levy service tax on construction of complex since would lead to government giving preference to the secondary market of completed projects.