Tag Archives: Real Estate Sector

CREDAI to Handle Corruption in Real Estate Sector

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“The CREDAI today presented an action plan to union urban development minister Kamalnath at the two-day 11th National Conference (NATCON) of CREDAI in Singapore to handle corruption”. CREDAI National President Lalitkumar Jain said, the developer community is being marked as being pollute. He said the association would seek an appointment with the prime minister to discuss ways and means to check the cancer of corruption rather indulging in blame game.

“Our country is, sadly though, rated to be one of the most corrupt nations of the world. Any citizen of the country will feel hurt and disgraced. The real estate sector is rated to be the biggest contributor to this dishonor. Jain Said, “I and all my colleagues in real estate  feel seriously insulted.” He added that developers were sufferers of the system and not the beneficiaries. He also said the real estate sector was being named as the reproduction ground for black money and corruption. “It is the various government methods, procedures and delays in clearances that give birth to corruption. We curse every person who exploits us to give us a lawful permission which we deserve immediately and without any dishonest demand,” he said.

“After investing madly in land, even a day’s delay in approvals adds to the costs and in extreme anxiety and when speed becomes important, the concept of speed money crawls in,” he pointed out. Every developer has to get 40 certificates, No Objection Certificates and clearances. “The McKinney report to the Government of India as long ago as in 2001 said that land approval related obstacles are costing 40% higher to home cost,” he said. CREDAI presented two key documents to Kamalnath – an anthology of best practices by some state governments that can be followed by the rest of the country and a extensive checklist for approvals.

Gurgoan to be gifted with North India’s Tallest Residential Tower

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A leading private equity fund, Ireo, which is dedicated to the Indian real estate sector with nearly $2 billion of funds, has annunciated the launch of the tallest residential towers in Gurgaon which would be called Victory Valley.

There will be adjacent mid rise options along with the three high-rise residential towers which would essentially be the tallest towers across the whole North India. This Victory Valley will come up with a wide range of choices for the consumers, varying from the 2 BR apartments to 5BR apartments in penthouse/ simplex/ duplex formats. It would have 51 stories.

There will be total 762 flats in the tower. The inaugural base price is Rs 5,500 per sq feet for the bookings of the flats. As per the company plans, the project is likely to complete within 3 years after the commencement of construction.

This project is located at Sector 67, Gurgaon and is spread in an area of 25 acres. Security, comfort and convenience will be the three major pillars of this tower.

Survey on Realty Growth

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contact: rajkamal.aich@gmail.com
Analysis of the growth in real estate sector in last few years was performed. It revealed some very interesting statistics of the growth. The facts go like this:

In 2007, the office sector experienced highest demand. Grade A office space of about 32 million sq ft leased out in that year. But after that, it has been a decline throughout. In 2008, it reduced to 28 million and a further decrease to 21 million in 2009. However, now a growth back to 28-29 million is seen. Although it is less than what was in 2007, but still is complementary. This demand majorly comes from infrastructure companies, from Indian corporate who wish to merge, from pharmaceutical etc and it is at pace in Bangalore, Delhi and Mumbai.

After the office space, we move on to the residential sector, where once again these three cities are putting their landmarks. Even on the account of increasing prices, these cities have managed to go through a rise in demand. In cities like Mumbai where the pricing went through a downfall of around 25-30%, it has once again come back with the demand as well as pricing. However, the situation is not the same in the other regions of India as far as residential sector is concerned.

Next comes the retail sector. This sector has not seen much growth. Although the demand from some new Indian corporate, the existing retailers and many foreign retailers, this sector still seems to be gloomy for now.

Realty Sector Urges FM To Revisit Budget

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The urban development ministry aims to seek a review of the proposal to get the service tax duty on sale of housing projects under construction which had been proposed in budget 2010 from April 1, 2010.

Delhi Properties - Real Estate India - Unitech Verve
Photo by nancyarora2020The urban development Minister Mr. S Jaipal Reddy said at the national conference on Indian Real Estate “The urban development ministry feels the proposal of service tax needs review. I am recommending the review of the proposal. I think the real estate sector in India is not in pink of health right now and we cannot afford to add pressure on that,” he said, adding that suggestions would be made to the finance minister in the next few days.

The conference on Indian real estate was held by Associated Chambers of Commerce and Industry of India ( ASSOCHAM ) on Friday, March 26.

Realty sector has suffered the most after the global meltdown started in September 2008 and has just started to witness marginal pick up in demand. Real estate players are already pushing the government to withdraw the service tax imposed on the housing sector (at 3.3%, with abatement), as it would dampen the buyers.

“This is not the right time for service tax implementation as the government’s objective is to encourage people to own houses. We have to wait for another month or so to see if the finance ministry listens to our request,” told KP Singh, Chairman, DLF Group.

Mr. Reddy said that the government wants “vertical growth” of cities contrary to urban sprawl due to shortage of land and a more flexible floor-area-ratio (FAR) regime. A high FAR limit will allow more storeys’s to be built in the houses.

He quoted a report from the UN Habitat which showed, by 2050, 1 billion people of India will be living in cities. Reddy said to the reporters “ Urbanization is not only inevitable but also desirable,”  but further added that urban development has been a subject of “benign neglect” over the years as the issue fell in the domain of the state governments.”

Another suitable point that has been an issue for real estate companies is the number of clearances one has to take for the beginning of any project. “Today, there are more than 50 agencies from where we have to take our clearances. We have to ensure that the best way forward is to have a single window system as it would not only save time, but also ensure transparency,” said MD, Raheja Developers Ltd, Mr. Navin M Raheja.

“It is very important to have a single window clearance system in real estate sector,” put forward Anil K. Agarwal, Past President of Assocham.

All we have to wait for is the finance minister’s stand.

Renaissance of Realty Sector

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Delhi Properties - Real Estate India - Unitech Verve 1

In last few months Indian real estate has undergone a reawakening enforced by a noticeable increase in the level of construction activity of low-budget housing coupled with low home loan rates reached an all time low in the last few years.

As researched by Boston Analytics, the Indian realty sector has undergone an increased supply and pace of development activity which brought an improvement in pessimism associated with the realty prices. A low interest rate on home loans driven by Government’s impetus packages have also catalysed the Indian consumers to buy homes.

“Increased supply, improvement in pessimism related to realty sector rates, and low rates of interest on home loans seems to be encouraging Indian consumers to firm up their home purchase decisions” as said by Shirin Bagga, Economist, Boston Analytics.

The data was collected by conducting a monthly survey that targets 10,000 respondents cross 15 Indian cities—Delhi, Mumbai, Hyderabad, Kolkata, Chennai, Bangalore, Chandigarh, Nagpur , Ahmedabad , Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam.

According to the recent reports the conviction concerned to speed of construction activity conveys more anticipation with regards to observed change in construction activity in Tier II and Tier III cities relative to Tier I cities. The real estate projects which are in different phases of completion in all levels of towns and cities appear to be introducing optimism about the expected change in construction activity among respondents across Tiers,” the report said.

As brought into light by Economic Survey of  FY 2009-10, the need of the construction and real estate sector in creation of both financial and physical assets has been amplifying over the years. The construction sector now accounts for 8 percent of GDP at constant prices, hiked from 7.7% in 2004-05.Equivalently, the share of real estate ownership of dwelling and business services in overall GDP as hiked to 9.2 percent in FY 2008-09 from 8.9 percent in 2004-05.

New Courses In Real Estate

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IDS National Institute of Real Estate Management (IDS NIREM) has come with an idea to develop human resources for the Indian realty sector focusing on Real Estate Education, Training, Consulting & Research. Acknowledging the urgent need for specialization in realty management education it recently launched a PG Diploma course in Commercial Real Estate (PGD-CRE).

fresh off the stage
Photo by FoxtongueIt will be a one year distance learning course patterned on MBA in Real Estate. IDS NIREM also proposes the course at diploma and certificate level.

The Diploma course will be offered in two divisions. First is for those who want to commence their career in real estate including the fresh graduates and MBA’s. Second, for already existing real estate professionals who either want to amplify their learning or want to ace in commercial property sector. This course will focus on knowledge as well as practical skills to analyze, acquire, finance, and operate realty sector resources.

NIREM promises to provide PG level degree, diploma and certificate courses along with MDPs, Consulting and Research in different fields of real estate. In addition to these learning programs, it also plans to develop touchstones for real estate sector, retail & institutional investors and other stakeholders

The courses offered are:

Post Graduate Diploma Courses

  • Post-Graduate Diploma in Commercial Real Estate
  • Post-Graduate Diploma in Real Estate Sales & Agency Management

Diploma courses

  • Diploma in Commercial Real Estate
  • Diploma in Real Estate Sales

Certificate Courses

  • Certificate in Real Estate Management
  • Certificate in Commercial Real Estate

Companies with land bank turning realtors

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The revival of riches in the real estate sector has encouraged textile companies with huge land banks to enter into property development.
Among such companies are textiles major Bombay Dyeing and Century Textiles.
Golden Tobacco, manufacturer of the Panama and Chancellor cigarette brands, is also considering to have its real estate arm to utilize its land assets across the country.
Earlier, groups like Tata, Mahindra and Godrej also entered the realty space. The Tata group has Tata Housing and Tata Realty while Mahindra’s venture is called Mahindra Lifespace Developers. Godrej’s venture goes by the name of Godrej Properties.

Indian real estate trend

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In coming years, India is expected to outperform the global markets with a growth rate in the range of 7 percent to 10 percent. This will benefit the real estate sector, which is closely linked to high growth in the economy.

A decrement in property prices, reduced interest rates and stability in the job market has helped the sector gain momentum once again. Developers now realized that affordability was the key to attract the prospective buyers; they tried out with smaller sized apartment. Projects that were launched in this segment received a good response, which indicated that home-buyers were waiting for a good opportunity.