Credai again pitches for quick approvals for affordable housing

The Confederation of Real Estate Developers’ Associations of India (CREDAI) has again pitched for quick approvals for the affordable housing segment in the country. 

With a new elected body of realtors, CREDAI has embarked on a fresh agenda laying focus on affordable housing, green buildings, water harvesting and skill development among construction workers.

"The task force report on affordable housing is with the Government. We will impress upon the concerned departments to facilitate its implementation for ensuring that the millions of homeless fulfill their dreams of owning a house," Lalit Kumar Jain, who has been elected Chairman of CREDAI, said.

The Confederation also announced the setting up of its youth wing.

Jain called upon the Centre to issue guidelines to States regarding online approvals and single window system. States like Punjab, which have implemented single window system, are doing very well, he said, adding, this would help check corruption to a large extent.

The Confederation has suggested changes in the Land Acquisition and the Real Estate Regulator Authority Bills to make them much more effective and beneficial for the home buyer.

C Shekar Reddy, newly elected National President of CREDAI, said the apex body will campaign with the Finance Ministry and RBI for reducing the risk weightage given for funding the real estate projects.

The industry would need close to 40 million skilled workers on an incremental basis in next ten years or so, he said.

The new elected Credai team comprises of Jaxay Shah- MD Savvy Group & VP Credai National, Satish Magar- chairman & MD, Magarpatta Township Development & Construction Co, Sushil Mantri, chairman & MD, Mantri Developers, Sanjeev Srivastava, MD, Assotech Ltd, Harsh Vardhan Patodia- MD Regent Hirise, MD Unimark Group & Heritage Reality Group, Vijay Mirchandani, Hon. Secretary Credai National & MD Mirchandani Group, Shekhar G Patel- Hon. Treasurer, Credai National.

The newly elected leadership of realtors apex body Credai has embarked on a multi-pronged agenda to work closely with the various governments with focus on affordable housing, green buildings and water harvesting and skill development among construction workers.

The Confederation represents over 8,800 developers through 20 States and 114 city chapters across the country. Its initiatives and activities help developers come together and work towards better practices, improved customer service and a stronger realty industry.

Two realtors from Gujarat in CREDAI

Jaxay Shah, MD, Savvy group, has been elected as the national vice-president (VP) of the Confederation of Real Estate Developers' Associations of India (Credai ). He is among the five VPs in the country and was elected uncontested for the second time this year, according to a report.

The election results were declared by Credai on late on Saturday evening. Another realtor Shekhar Patel, MD, Ganesh Housing, was elected as treasurer of Credai .

Both Patel and Shah have been elected for the second time in a row for these posts. There are close to 6,000 members from Gujarat in Credai in 23 cities and towns in the state. This is a huge chunk against 127 member cities of Credai across the country. Shah was awarded the "Best Performing' member in his previous VP term.

Land acquisition hits NH projects in Bengal, Kerala

NEW DELHI: Kerala and West Bengal, where land acquisition for road widening is a major impediment for highway expansion, are feeling the heat of the National Highways Authority of India (NHAI), which is threatening to abandon projects. The fear stems from the fact that the Authority has already abandoned two projects in Goa on similar ground, a Times of India report said.

"We are facing the worst situation in Kerala and West Bengal. In Kerala, the cost of land acquisition is very high and unviable," said a senior NHAI official. In Bengal, there is a major problem in disbursement of compensation for land acquisition.

An official cited a project in Kerala, where the cost of land acquisition would be 40% higher than the total project cost. Sources said that the Authority has asked the Kerala government to rationalize the land acquisition cost else the project could never take off.

They added that the owners of properties, which are adjacent to the existing highway stretches, want higher compensation. "Compensation for land acquisition at such high value is unacceptable," an official said.

NHAI chairman R P Singh recently wrote a letter to Kerala chief secretary Jose Cyriac, citing his displeasure at the tardy progress in land acquisition for stretches along the NH-17 & 47 from Karnataka/Kerala border, Kannur-Vengalam-Kuttipuram and Thiruvananthapuram-Tamil Nadu border from Kannur to Thiruvananthapuram. He said that NHAI would have no option other than abandoning these projects.

The Authority had awarded these works to concessionaires in 2009 and 2010. NHAI feels that delay in handing over right of way (RoW) to private builders would increase land acquisition cost and in turn escalate the expense for construction.

Concessionaires are disinterested in highway projects since the general public are apathetic to paying toll charges. Highways minister C P Joshi raised this issue when he met Kerala CM Oomen Chandy recently here.

NHAI has written a letter to road transport and highways ministry urging it to push state governments to sign the State Support Agreement (SSA) for smoother execution of projects, and failing so it would pull out.

SSA is an umbrella promise from states to cooperate and facilitate road projects, including allowing concessionaires to collect toll. Uttar Pradesh, Gujarat and Tamil Nadu, however, have still not signed the agreement.

While progress of work is better in Gujarat, highway projects are on slow lane in the other two states, the report further stated quoting the sources.

Haryana, Rajasthan, Bihar, Andhra Pradesh, Uttarakhand, Jammu & Kashmir are all performing well, and Odisha also isn't not too far behind.

Cushman & Wakefield India launches Debt Financing Services

Chennai: As part of its ongoing endeavor to strengthen services towards the real estate industry in India, Cushman & Wakefield in India announces the launch of the ‘Debt Financing’ Services as part of its Capital Markets division. With this, the current portfolio of financial services is expanded to include both private and public sector bank funding as well as investment sales.

The Cushman & Wakefield Debt Financing services will include Debt Syndication, Private Placement of Debt Capital Products, Acquisition Financing, Refinancing, Special Situations & High Yield Financing and Trade Credit Advisory. Cushman & Wakefield will service the real estate requirement across sectors, including Infrastructure, Engineering Procurement & Construction (EPC) Hospitality, Healthcare, and Education amongst others.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, commented “This widened capability in debt and equity advisory is in addition to our traditional capital markets and land industrial activities making us the preferred one stop shop for real estate capital markets services throughout India.”

Sanjay said, “The Indian real estate sector has been growing steadily over the years, despite government regulations on funding options for development in the last few years. The RBI directives also increased the risk weightage on Real Estate further discouraged financial institutions from making highly speculative investments. This has led to a severe shortage of funding options. While private equity and investments from HNI have their limitations, financing from domestic Institutional investors is a very viable option. Public sector financial institutions can provide debt at lower rates as well as for longer periods which makes them an attractive option. However, such financing is also skeptical about the project that they enter.”

Sanjay further added, “It is estimated that debt worth over US$ 24 Billion has been loaned out to the real estate and development sector and is further estimated to rise moderately by the end of FY 2012- 13. Commercialization of more public sector had resulted in their increased willingness to provide funding to large infrastructure and real estate projects at reasonable rate of return.”

This Debt Financing Services will be complementing Capital Markets Group, which currently provides services such as structured equity and debt services, capital advisory including equity raising for pooled funds and programmatic club and joint venture transactions and development project funding.

How to make fool-proof Land Acquisition

One can avoid bad land deals by using experienced lawyers for the transaction, doing a detailed due diligence, employing the services of a reputed real estate consultant with in-depth market knowledge, says Mayank Saksena, Managing Director – Land Services, Jones Lang LaSalle India.

The core issues that surround the acquisition of land in India are more complex than those related to built-up property. Some of these are  Litigations due to inheritance, Multiple sales which have not been properly recorded, Pledging of land to local money lenders, Fragmented holdings, Requirement of cash while dealing with sellers, Difficulty in obtaining contiguous land, Lands which have been granted to SC/ST by the Government,  Land ceiling laws and Tough resettlement and rehabilitation laws.

As things stand now, land acquisition has become a means for a multitude of middle-men to make a lot of money. This is because the tough regulations and complexities related to acquiring land today provide huge arbitrage to such people. If the Government starts simplifying the process, middlemen can be eliminated, reducing the cost arbitrage and passing the benefit to the actual land owners.

Until that happens, the availability of fool-proof deals in land will remain scarce on the ground. For the record, a good deal is one wherein one can buy, in one go, a clean title property that complies with all Government plans and stipulated usages.

How To Avoid Bad Land Deals

One can avoid bad land deals by Using experienced lawyers for the transaction, Doing a detailed due diligence, Employing the services of a reputed real estate consultant with in-depth market knowledge.

When it comes to land acquisition, there is no question of a free lunch or short-cuts. If something about a land deal seems out of whack, then it can be taken for granted that there is an issue with the land. As things stand today, fraud happens as because people buy land without complete due diligence, which leads to faulty acquisition of land with title issues.

The objective of buying land for development should be getting a clean, secure title and being able to develop on the plot without facing any future complications at the development stage, and within a stipulated time.

 Developers' Nightmare

In the whole morass of problems related to land acquisition, developers face the greatest challenges in obtaining a clean, bankable title to a contiguous land parcel of sufficient dimensions to develop projects. Another issue they face is the loss of control on cost during acquisition, since the cost of acquisition after completion of the entire process is often so high that any development becomes prohibitively expensive.

Often, the only way in which developers have been able to circumvent the complexities involved in the acquisition and development of land is via land pooling. This is a process wherein a number of land owners agree to pool their land holdings and then develop them together. Successful cases include Amanora in Pune and Magarpatta, also in Pune, where various land owners pooled their land and developed townships to service the growing residential and office real estate needs of Pune's IT industry. All the original owners have a stake in the developing company.

The Role of the Government

The present laws are such that it is next to impossible to get 100% clean title for a land parcel of any significant size. The problem is that the law does not have provisions to stop a claimant from approaching the courts at any stage and at any time. The only secure way to get land with a 100% secure title in India was through the Government. However, with the issues that have been raised as farmers went to court at Noida West and Greater Noida, even that route has now come into question.

In order to make acquiring land India easier and more beneficial, the Government needs to make more proactive laws for the process of acquisition, as well as for resettlement and rehabilitation. Two of the most critical needs of the hour are the abolishing of the Urban Land Ceiling Act across country, and the formulation of laws that encourage participation of the owner in development of land.

The Government cannot wash its hands off the responsibility of providing land for development, especially on rehabilitation and resettlement. The Government should devise a mode to provide title security, and laws need to be made in a manner that ensures that old laws like ULC do not have an overhang on the land.

If we want our country to be truly global, and to grow more rapidly, land for development needs to be made available more easily. Cases like Singur, Greater Noida and Noida West must be avoided at all costs, as they shake global confidence in investing in India.

CREDAI Maharashtra to showcase projects at Indian Property Show in Doha

Maharashtra chapter of Confederation of Real Estate Developer's Associations of India (CREDAI), the apex body of the organized real estate developers/builders across the state of Maharashtra (excluding Mumbai) will have a special pavilion at the upcoming Indian Property Show - Doha to be held on March 29-30 at Convention Center - Al Wajba Ballroom, La Cigale Hotel between 10 am to 8 pm.

The 2-day property extravaganza is being organized by Sumansa Exhibitions in association with Media Plus Qatar. 17 district level associations spread across the state are members of CREDAI Maharashtra; with over 1400 individual member developers encompassing over 75% of the organised private development in the state.

FDCC, Ishwar Parmar Group, Nyati group, Achalare Rachana, Pyramid ventures are among the developers showcasing their projects under CREDAI Maharashtra pavilion at the exhibition.

"Weakened rupee has given a big boost to NRI buyers and they should seize this opportunity as experts predict rupee to still remain weak in next 6 months. All Gulf NRIs will have to return to India one day; hence investment into properties makes perfect sense due to its minimum volatility and stable appreciations. 

However, you should choose a location that is familiar to you and stick to a reputed builder, there is greater chance that projects of reputed builders will appreciate more than others," said Sunil Jaiswal, CEO Sumansa Exhibitions, organizers of Indian Property Show.

"Real estate scenario in Tier II and Tier III cities in India looks promising, with soaring prices in metros, these cities provides cost effective alternatives and have emerged as excellent investment option. The government is also taking special measures to provide the smaller cities with infrastructural facilities and the initiation of the SEZs. The growth in tier-II and tier III cities is attributed to good appreciation, rising urbanization, rapid industrialization and better infrastructure and facilities as metros reach a saturation point," Jaiswal added.

The upcoming Indian Property Show will provide perfect platform for developers and potential property buyers to interact face to face. Unique features such as "Free Exclusive Seminars" would be a special highlight of the show. The not-to-be missed property and investment seminars will be conducted by some of the most influential property industry gurus, vaastu consultant and legal advisers. These aim to guide the buyers on the booming real estate markets within India along with the benefits of investing now.

The exhibitors at the show include best of the Indian real estate developers, construction companies, banks and real estate agents. Developers will be showcasing apartments, villas, row houses, commercial, retail properties and farm land from across India from cities like Delhi, Noida, Greater Noida, Gurgaon, Jaipur, Mumbai, Navi Mumbai, Pune, Chennai, Bengaluru, Ahmedabad, Kochi and more.