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Tata extends affordable housing scheme to 2BHK segment

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Tatas expanded their affordability drive to the housing sector by launching flats for Rs 12.73 lakh for a two bedroom unit.

Tata Housing Development Company launched its ‘New Haven’, offering 1,300 apartments, including 2 BHK (bedroom, hall and kitchen) and 3 BHK homes, starting at Rs 12.73 lakh with a minimum size of 670 square feet.
The Tatas began their affordability drive in the housing sector earlier in May by offering one bedroom flat at prices starting from Rs 3.9 lakh at Boisar in Mumbai.
Conceptualized as a national brand, New Haven will meet the home-buyers’ full spectrum of lifestyle needs at an affordable cost, the company said in a statement.
According to the statement, after the launch of New Haven at Boisar in Mumbai, it will be expanded across the country mainly in the Tier I and II cities. Consumers can book an apartment with an initial payment of 10% of the total sale price as booking amount.
New Haven, spread across 35-acres, will offer self- contained homes and provide consumers with facilities such as club house and community center.

Residential property prices may go down

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Knight Frank India said that prices in the residential property segment are likely to decline in a short time. Knight Frank India Chairman Pranay Vakil said, “We feel prices of residential segment may go down over a period of time”. Further he added that the residential segment may see a robust demand in certain markets and it was also a good time for property developers to invest in land.

Real estate demand at this stage is the result of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, on the other hand the end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and also in property price.

2BHK is in trend

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The maximum demand currently is for 2BHK residential apartments and finally supply is following demand. Such has been the response that there are developers who claim as much as 55% of their inventories comprise two bedroom units.

According to Atma Sharan, GM-Marketing, Ashiana Housing Ltd, “About 55-60% inventory would be 2BHK. This definitely is the fastest moving segment, particularly among first home buyers.

The 2BHK end user is attracted by the price tag, affordability factor, and lower EMIs. Developers who were primarily focusing on plush housing earlier are including smaller units in a big way in their projects. They are coming up with new initiatives in this line which is expected to attract the young service class people in a big way. So, be it DLF, Unitech or Jaypee, they all have at least 30% inventories as two bedroom units in their projects and plan to increase the percentage with time.

Retail investors turn careful on IPOs

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Though the 10 IPOs in the fiscal have mopped up close to Rs 10,000 crore, the attitude of retail investors to the offerings has been one of extreme caution.

While participation by institutional and high net worth investors has been positive, retail interest has waned, said merchant bankers.

The 10 IPOs that hit the market this fiscal have seen their retail portion getting subscribed less than four times on an average.

The IPOs may be getting subscribed multiple times. But the fact that several investment recommendations stated that the IPOs were overvalued put retail investors off.

Mr Adeel, a retail investor, said: “A small-time retail investor will look at investment recommendations and most of the IPOs are said to be overvalued. This will keep us away from those IPOs.”

Janpath, Samrat hotels to get posh makeover

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After revamping its flagship hotel, The Ashok, ITDC is going full-steam ahead to give hotels Janpath and Samrat a makeover designed to make the competition sit up and take notice. As part of the renovation, Hotel Janpath will soon boast of onyx pillars and a mini-spa in each room on four floors. The spas will be equipped with a jacuzzi, massage table and medicine dispenser while one spa each on the ground floor and first floor will offer services of a gym, sauna, steam room and treatment room. For those working on their tan, the rooftop will have a solarium. “The personal spa concept is likely to require an investment of Rs 45 crore. We are still in the process of finalizing the details,” a senior ITDC official said. The hotel has already seen some tangible changes like a cobbled stone driveway. The grim, white-washed facade has been knocked down in favour of glass and the decrepit restaurants, known only for political sit-downs, have been opened to private players. While designer Rohit Bal promoted Italian joint Cibo opened earlier this year, Mismo and Swagath are the other top of the line eating places that the hotel hosts.

All apartments sold within 2 hours

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DLF has launched the 2nd phase of its residential project in the heart of national capital, has sold all the apartments within 2 hours. The company sold all the flats, offered at prices of up to Rs 1.86 crore, though it has increased the selling price of its units by up to 26% compared to 1st phase.
TC Goyal, MD- DLF said, “Even with increased price, we have received tremendous response for our product. We initially planned to launch six hundred fifty units in 2nd phase, but due to huge demand we planned to offer more”.
The company has launched 2nd phase of the project at Rs 6,750 (2-BHK), Rs 7,500 (3-BHK) and Rs 8,000 (4-BHK) per square feet.
However, the effective rate would come down to Rs 5677, Rs 6363 and Rs 6820 per square feet respectively as DLF would offer a discount of five hundred rupees per square feet for timely payment and 8.5% rebate on down payments.

PDL looking torward tier-II cities

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Parsvnath Developers Limited is looking toward tier-II cities and following the strategy, PDL announced Parsvnath City at Saharanpur.  It will offer plotted development, independent Floors and expandable villas at affordable prices.  Spread over more than hundred acres, Parsvnath City, Saharanpur is strategically located on Delhi road. First of its kind project will offer independent floors in affordable range starting from Rs 9.50 lakh. The project will comprise of plots in various sizes of 201, 300, 402 and 502 square yards. The independent floors will have the options of 2 bedroom, 3 bedroom and 3 bedroom with study room units and option of expandable villas are also available.
Parsvnath City will have fully fledged infrastructure wide well lit metaled roads and solid waste management.  The township will also have Group Housing, School, Community Center and Mall. The realization from the project will be about three hundred fifty crore rupees spread over 2 years. The development of the township is planned to be completed in 2 years.

Century joins affordable housing bandwagon

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Century Real Estate is the latest to join the affordable housing bandwagon. It has come up with ‘Century Indus’ project that offers apartments in the Rs 20-30 lakh category.
Mr P. Ravindra Pai, MD, Century Group said, Acquiring land at historical rates has helped the company make the project affordable.
The company has a land bank of over 3,000 acres, most of them acquired in historical rates, worth about 2 billion dollar. There are plans to make use of some of the land parcels to develop few more affordable projects in the city.
“We propose to develop 6,500 apartments targeted at the affordable segment, approximately seven million sq ft development, with a budgeted outlay of Rs 1,050 crore in the next three years,” said Dr P. Dayanand Pai, Founder and Chairman, Century Group. The projects would be located in North and West Bangalore.
Mr Pai said that the group has now formed ‘Century Real Estate Holdings.’ About 300 acres, valued at Rs 1,200 crore, from the land-bank have been transferred to this company, and about 12 projects would be developed on this land.
The company is looking at raising funds at entity and project levels. At the entity level, it plans to raise Rs 200 crore as bank debt for pre-development of these 12 projects. “We have almost tied up the debt,” said Mr Pai.

Lodha Developers among top 10 Builders

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Lodha Developers Ltd. has been selected as one of the India’s top ten builders on the basis of a survey conducted by Construction World, India’s premier magazine for the construction sector.
The survey was conducted over a period of 4 months among a spectrum of handpicked audience comprising industry professionals from across India.
Mr. Abhisheck Lodha, Director, Lodha Developers Ltd. said, “Our selection as one of the top ten builders in India by the Construction World is recognition to our standards of excellence in every aspect of our services and our presence in varied segments like high-rises to mid-income luxury, in the real estate sector”.
Instituted by ASAPP Media, the award is recognition of exceptional work done by architects and builders in various aspects of infrastructure and real estate industry over the years.

Mumbai high street rentals see biggest crash

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As the global slowdown pushed consumers to stay at home, retailers halted expansion plans and checked out of expensive high-street locations. Rental rates at high street locations across the world crashed, with the biggest crashes in Mumbai.
Among the exceptions were Bangalore’s two iconic retail hubs, Brigade Road and Commercial Street, and Kolkata’s Camac Street.
Mumbai’s leading highstreet locations—Colaba Causeway, Linking Road and Kemps Corner—also reported the largest declines in rentals across the world on a year-on-year basis—63.5%, 63%, and 60% respectively.
As per the annual global survey, Main Streets Across The World 2009, by global real estate consultants Cushman and Wakefield, over three-fourth’s of the world’s most prestigious shopping streets saw rentals crashing anywhere between 17% and 63.5%. Around 18%, however, recorded a growth.

Weaving character into homes

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Bringing character to a home is the latest mantra, at least in the luxury format.
Designer Mr Sabyasachi Mukherjee will work on six of the two hundred limited edition homes Samira Habitats is developing at Alibagh. These would cost upwards of one crore rupees each.
The designer will work closely with the project architect to ensure structural compliance of the masonry, while filling in with his craft and elements.
The purpose is to lend individuality and embed creativity that the designer exhibits in his apparel on the ground.
Further he said, “When I decided to extend my love for visual aesthetics, form and color to interiors, I chose Samira Habitats because of their offerings of finely crafted homes close to nature. Their eye for opulence and detail is a vision I passionately share”.

Real estate firm sees festival sales

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Property firms are launching housing projects and raising pitch for ongoing ones in the hope of making decent sales going into the festive season. The mood among builders may be buoyant, but very few believe price hike is possible as demand is still hesitant and new supplies are hitting the market.

The festive season, which usually begins late September with the Hindu festival of Navratra and continues up to Christmas, often sees higher sales of property, cars and other durables.

Lodha developers is planning to launch two new projects, comprising apartments priced over Rs 1 crore, in Mumbai’s suburbs of Andheri and Thane. So far, the slow return of housing demand was scripted by lower-priced homes. But Lodha’s offerings indicate the builder is confident of getting buyers for high-priced segment as well.

Sub-PLR rates set to go

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People who borrow money from banks to buy homes at floating rates of interest are set to benefit as banks are expected to change the way they price such loans.
The Reserve Bank of India is preparing to ban lending below the prime lending rate, the benchmark rate for all floating rate bank loans.
Sub-PLR lending came into existence a decade ago after banks obtained permission from the central bank to lend below the benchmark rate.

International Real Estate Expo (IIREX 2009)

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Best time for a deal in real estate

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It is the best time to look around for a value buy in real estate. With lower price points in locations which were not within your wallet’s reach, buyers are scouting for good ‘value’ bargains at this time.
And with developers going big on affordable home launches, the timing may just be one of the best for buyers seeking a steal deal.
Anshuman Magazine, CMD of global real estate consultancy CBRE says that value buying is happening mostly in suburban locations as that is where the current supply is.

Dax Properties setting up golf township

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Dax Properties is setting up a 18-hole golf course-centric luxury retreat and township at Shadnagar near here which will entail investment of five hundred crore rupees.
The golf course will be spread over 130 acres on a 300-acre site earmarked for the Golf Retreat project, according to Mr Masood, MD of the Bangalore -based Dax Properties, part of Countryside Realtors.
Further he said, “We believe India has potential to serve golf lovers offering golf tourism in a majestic lush green environment where one could also buy luxury villas being developed on the property”.

Best Western opens property

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Best Western India, the Indian affiliate of the international Best Western brand, opened its 13th operational property.
Branded as ‘Best Western Classic Avenue’, the 60-room, four-star luxury property is the second in Kerala after Kochi.
Best Western, among the world’s largest chain providing marketing, reservations and operational support to over four thousand independently owned and operated member-hotels in more than 80 countries.
According to Mr Sudhir Sinha, President and COO, Best Western India, occupancy rates have looked up by 20 – 25% to 65 %-plus since the lows registered during the recession period from September last.
Mr K. P. Sahadevan, Managing Director, Best Western Classic Avenue, said that an additional seventy rooms would be added to the property over the next three to four years to raise it to five-star category.

Realty companies may keep rates steady

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Raising home prices may anticipating festive season demand.
Mr. Niranjan Hiranandani, MD of Hiranandani Group, said “It is not very wise to increase prices drastically now”. Further he said, “The market has just recovered and buyers are returning back”.
The shortening of supply due to a 45% decline in new projects in tier-I cities has also enhanced the prospects of higher prices.
Mr. Abhisheck Lodha, director of Lodha Developers, said, “We have sold around 2.5 million square feet in the last quarter and are expecting to sell over 1.5 million square feet during the last quarter of this year”. Further he added, “Normally, the festive season is when there are a lot of bookings in the real estate sector”.

Retail investors begin to return

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Retail investors are regaining confidence in the primary market but they seem to be gradually making their presence felt in the secondary market.

Leading retail brokers say that they are seeing an increment in the number of clients returning to the market. The only difference is that investors are taking small bets, and quickly booking profits even if they are not large.

Growing retail investor interest can also be gauged from the fact that indices tracking the SME space have outperformed the key indices in the run-up to five thousand level touched by Nifty during intra-day trading.

Dharwad simplifies norms for land conversion

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In a move that could have implications for the process of land acquisition for industry, the Dharwad district administration has introduced a system to prevent delay in processing applications linked to land conversion.
The Deputy Commissioner, Mr Darpan Jain said that though according to Section 95 of the Karnataka Land Revenue Act, 1964, permission for conversion of land use had to be granted within 45 days, the current method was causing unnecessary delay and there was no means for the applicant to know the status of his application.
Mr. jain further said, “We have decided to re-engineer the process of land use conversion so that the process is simple and on the spot”.
Under the new system, applications for land conversion from applicants in Hubli and Dharwad would be collected at a counter established on the premises of the Deputy Commissioner’s office. In the remaining three taluks of the district, applications would be accepted at the counters established in the offices of tahsildars, he added.
He said that a single counter for Hubli and Dharwad would save the time lost in forwarding applications from the tahsildar’s office to the Deputy Commissioner’s office.
Under the system, details of applications would be entered into a computer system and application would be verified taking into account the enclosed documents, the number of which had already been reduced.

Various Industrial Projects Look Out for Orissa Govt NOD

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The Naveen Patnaik Government’s failure to help companies take possession of land has delayed implementation of 14 mega industrial projects.
Top representatives from Posco-India, Tata Steel, ArcelorMittal India Ltd, Jindal Steel & Power Ltd, SSL Energy Ltd, Uttam Galva Steels Ltd, Essar Steel Orissa Ltd, Bhusan Power & Steel Ltd, Aditya Aluminium Ltd, Welspun Power & Steel Ltd, Vedanta Aluminium Ltd, Jindal India Thermal Power Ltd and Bhushan Steel Ltd attended the meeting.
The 14 projects had proposed investments of Rs 2 lakh crore but have invested Rs 21,031.71 crore only. Though 45,607 acres were required for the projects, the State Government had allotted them 14,131.90 acres till date.
Most companies have not been able to take possession of land for their respective projects primarily due to opposition from people living in the area who face displacement. The other issues were availability of water, supply of power, and rehabilitation and resettlement.
The Minister asked senior Government officials to resolve the problems facing the industries and also advised the companies to expedite land acquisition.

Realtors must tell buyers about bank claim

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Home buyers will now know if the land on which their building stands is free of outside claims after a recent RBI circular mandating builders mortgaging the land to raise money to disclose it in all advertisements and brochures. RBI has asked lenders to ensure that all publicity material relating to the sale of real estate make a mention of the bank’s lien on the property so that home buyers are not kept in the dark. RBI aims to prevent prospective buyers from being lulled into the belief that the flats they own are on ‘free-hold’ land through this move. In Mumbai flatowner gets rights over his house through membership of a cooperative housing society. The land is not owned by the society unless it is transferred through a conveyance.

Piramals’ Indiareit plans realty fund

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Indiareit Fund Advisors is setting up its second real estate fund with a corpus of five hundred crore rupees and expects to raise the money from investors by the end of this year.

The group had earlier floated Indiareit Fund, a $450-million real estate fund in 2006 and the proposed new Rs 500-core fund is over and above this. The Piramal Group has a presence in sectors, such as healthcare, diagnostics, glass manufacturing and real estate.

Said Ramesh Jogani, managing director and CEO, Indiareit Fund Advisors: “The Piramal Group is setting up a new domestic real estate fund and we are in the process of raising an overall corpus of around Rs 500 crore for it. This fund will invest in projects in Mumbai, New Delhi and Alibaug, a tourist town near Mumbai, and will be restricted to the residential segment. The new fund, apart from having a real estate focus, may also invest jointly with the existing fund.”

Bajaj Plans to Liquidate land bank

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Bajaj Auto vice chairman Madhur Bajaj, who in his personal capacity owns over 350 acres of land under Emerald Acres, plans to liquidate a large portion of his land-holdings to unlock value as the real estate sector looks up after the downturn.
He said that he has no plans to venture into real estate development in next ten years and would prefer sell outright large parcels of land to developers or sell through plotted schemes.
Further he added “We don’t have any expertise in construction and so we don’t want to get into development at this stage. We are in the process of valuing the land price and would put it for sell soon.”
He further stated that Emerald Acres has nothing to do with the Bajaj group, as he had purchased land in the past four years through his personal money.
Emerald Acres owns land in the stretch between Mumbai and Pune highway and the largest piece of 124 acres is located at Lonavala, a hill station near Mumbai. The rest are in eight other locations including Murbad near Thane and Khandala, another hill station.
Mr. Bajaj further said, “A township can come up at the Lonavala land and all other plots are uniquely located. We are planning to sell these so that we can buy more land maximise the value.

Faults in house property regime

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The tax on income from house property has all along been on one’s potential income and not on one’s actual income unless the latter happens to be greater than the former. The Direct Taxes Code strays away from its basic objective by factoring the cost of construction or purchase where rateable value has not been fixed by the municipal authorities.
Briefly, what is proposed by the DTC is income from house property would be deemed to be the actual rent receivable or the presumptive rent, whichever is greater. And the presumptive rent is deemed to be 6% of the rateable value fixed by municipal authorities or if it is not so fixed, then 6% of the cost of acquiring the house.
Under the extant regime, market rent is a significant factor in determining the potential rent. The Government perhaps feels that figuring the market rent is difficult given the various subterfuges adopted, such as camouflaging a part of the rent as interest-free or concessional deposits, etc.
Therefore, it seems to have plumped for the rateable value which to be sure is also premised on the market rent without being property-specific. But then the danger of this approach is the municipal authorities do not bestir to revise the rateable value every year. In the event, what is considered for income-tax purposes may be outdated and inappropriate even though it may be appropriate for levying municipal tax.