IFCs funding infra sector should be through automatic routes: ASSOCHAM

To facilitate flow of funds from the international market with flexible but prudent regulatory framework, the apex industry body ASSOCHAM has suggested that all infrastructure finance companies (IFCs) be brought under the automatic route in line with other corporate in the infrastructure sectors.

“Exempting withholding tax on interest and other payments to external commercial borrowings (ECBs) by infrastructure sector including the IFCs and also allowing, within a certain limit, Indian corporate in the infrastructure sector, including IFCs to issue rupee denominated bonds in the international markets”, said a study titled ‘Indian Infrastructure: A Trillion dollar opportunity’, jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Deloitte.

The study said, recently, take-out financing arrangement has been permitted through ECB, under the approval route, for refinancing of rupee loans availed from domestic banks by eligible borrowers in the port, airport, roads including bridges and power sectors for development of new projects.

However, there is a need to simplify the process for take-out financing/refinancing rupee loans through ECBs for infrastructure companies as to engage foreign lenders for takeout are limited. It is difficult for foreign lenders to come to an agreement at the initial stage itself and assume the execution risk at the time of take out, said the study that was jointly released Tamaki Tsukada, Minister (Economic), Embassy of Japan, Gautam Bhandari, Chairman- PEVCAI, Gautam Adani, Chairman Adani Group, Kalpana Jain, Co-Chairperson, PEVCAI & Senior Director, Deloitte Touché Tohmastu India Pvt. Ltd. at ASSOCHAM 5th PEVCAI Annual Convention in New Delhi today.

This condition of entering into tri-partite agreement may be dispensed away with and an amount for such take-out financing through ECB automatic route could be declared on an annual basis, suggested the study.

There is a need to relax the all-in-price ceiling for ECBs (i.e. 500 basis points over the 6 month Libor) for infrastructure projects with average maturity exceeding 7 years. The interest rate ceilings set by RBI on ECBs put constraints in availing foreign currency loans for domestic infrastructure projects, the study said further.

Relaxation of the ECB ceiling of USD 500 million per annum per company for automatic route will help make ECB stable source of financing and ensure increased ECB funding

To facilitate flow of funds from the international market with flexible but prudent regulatory framework, following measures could be considered; bringing IFCs in the infrastructure sector under the automatic route in line with other corporate, exempting withholding tax on interest and other payments to ECBs by infrastructure sector, including IFCs and allowing, within a certain limit, Indian corporates in the infrastructure sector, including IFCs to issue Rupee denominated bonds in the international market.

Builders now eye huge LIG home market

Even though India is among the top developing countries having the most number of high net worth individuals (HNWIs), people under low income group still remain dominant among the total population, and need to have a shelter of their own without stretching too much is one of their major priorities. 

According to an estimate, India’s low income group families in urban areas need more than 15 million homes at a price range of Rs 5 - 15 lakh and seeing the present days economic scenario, low growth and high interest, providing such a high number of housing is not going to be easy for the government, unless the private builders also pitch in, according to industry experts.

A recent report by Deloitte India has analysed that the market for affordable housing is about Rs 9 lakh crore and real estate developers are having a great chance to tap this huge market at this hour of slow moving business condition for other categories of housing.

In about 19 months since June 2011 there has been a supply of 30500 LIG housing units whose prices were tagged below 10 lakh. Mostly launched by private developers across tier I and tier II cities, 39 per cent of the housing units were launched in Gujarat itself.

Though financial institutions, particularly the housing finance companies, show grater interest to provide loan at considerable low interest to affordable home loan seekers, the gap between supply and demand is huge due to various soci-economic factors.

India has the large number of low-income families in urban areas whose monthly household income is between Rs 10000 – Rs 25000.These people can afford a privately build houses which would cost them some where between Rs 4-10 lakh without any financial aid from the government, said a top official of Housing and Urban Poverty Alleviation (HUPA) ministry, while launching a report on LIG housing market in India, recently.

This group needs about 1.5 crore homes, which boils down to Rs 9 lakh crore business for the developers and Rs seven lakh crore for banks or housing finance companies (HFCs).

Though most of the housing finance companies did not favour loan to low income customers, the things have changed now with more and more HFCs are showing interst to tap these segment and as of now over ten housing finance firms are lending the race in providing financial help to buy homes for low income customers.

While Deloitte’s report has highlighted that three cities such as Ahmedabad, Indore and Mumbai are top the chart in providing housing below Rs 10 lakh with over 20 projects in each city, in the northern part of India, the supply of low income housing (LIH) is very significant.

States such as Madhya Pradesh, Maharashtra and Gujarat are doing better than other states across the country by providing affordable housing.  Of the 30668 LIG homes launched during the observation period, Gujarat has recorded maximum supply of 11,823 units followed by Maharashtra and Madhya Pradesh with 8513 and 4759 housing units, respectively.

 

The reason for Gujarat taking the larger share of low-income market is that developers understand the potential of the LIG market much better and early than others and the state government also promotes such people-friendly schemes by providing fast approvals.

Bengaluru tops in office space absorption

While residential real estate in India is yet to find its right growth momentum, its commercial counterpart has been witnessing a steady growth for the last few years and is expected to have a healthy demand-supply ratio over the period of 2013-2017.

According to a survey report, jointly released by global real estate consultants, Cushman & Wakefield and Global Real Estate Institute, the estimated demand for office space across top cities during the period is expected to reach 132 million square feet (msf) with Bengaluru to record the highest office space absorption of 32 msf in the next five years.

Though at the current level, office space absorption across the country is expected to be about 22.5 msf in 2013, which is 26 per cent less over previous year, experts believe that the momentum of absorption will pick up by 2017 recording about 128 msf. The report also noted that due to current economic slowdown many companies have deferred their leasing requirements.

The publication titled ‘Decoding Realty: Changing Dynamics of Indian Real Estate’ has noted that next to Bengaluru, Mumbai will have its net absorption to be at 24 msf followed by NCR (23 msf). Pune and Hyderabad are expected to record absorption of about 14 msf of office space each while Chennai office market will absorb 11 msf.

Ahmedabad and Kolkata have finished the survey with three msf and seven msf of total absorption, respectively. The supply of new office space for the same period is expected to be approximately 143 msf. in which, 90 msf is currently under various stages of construction that will be completed by 2015. Of the eight top cities, Delhi-NCR is projected have highest supply of 38 msf till 2017 in which 23 msf will get absorbed.

The report also noted that lowest office space supply would come from Ahmadabad with three msf with more than 100 per cent absorption level followed by Chennai and Pune with 6.5 msf and 12.5 msf, respectively.

The commercial office real estate sector has seen postponement of considerable number of supply in the recent times due to delays in regulatory clearances and lack in demand. Similar trend is expected to continue in the next few years due to issues such as low demand from occupiers and funding problems that developers have been facing.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield commented: “The office real estate market in India is expected to remain attractive for occupiers with steady increase in absorption after a trend of decline in 2013. With economy is expected to become stable in the post election period from 2015, the absorption trend will pick pace especially in established markets such as NCR, Bengaluru and Mumbai. 

We expect growth to set in from the second half of (June) 2014 when an increase in leasing activities, on account of entry of new companies into the country, relocation and consolidation activities and indeed expansion of existing companies, is expected to continue.”

SC nods revocation clause in land acquisition law

A Supreme Court order on the new land acquisition law will have a long-term effect on those whose land has been acquired but who have not accepted compensation and gone to court, and where the matter is still pending, reports Business Standard.

The order relates to compensation under Clause 24 or the ‘retrospective’ clause for land acquired by private parties or the government. The new law -- the formal name is Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 -- says if for five years after acquisition the owners of the land refused to accept compensation, the acquisition could be set aside.

In pursuance of this, 18 appeals were filed before the SC, invoking application of the clause. In all of these, five or more years had passed since the acquisition award under section 11 of the Land Acquisition Act, 1894, and the applicants/petitioners had refused to accept the compensation. Given the new rights in the legislation, allowing pending litigation to be reviewed and retrospectively annulled, these parties approached the SC.

In this litigation, the acquiring authority (Pune Municipal Corporation) argued it had deposited the amount in the state government treasury, in fulfilment of its obligations on compensation. This has been the standard procedure in acquiring land when the owners refuse to part with it.

Last Friday, the SC ordered that in accordance with the new law, compensation would only be deemed to have been paid if it had been deposited with a court dealing with the matter and after having been offered to the individual concerned. In this case, the compensation had only been deposited in the treasury.

As a result, compensation could not be deemed to have been paid and the acquisition was considered to have lapsed, the order said. It made no comment on the fairness or otherwise of the amount of compensation; only, that the process to acquire land had not been followed. It merely said the compensation was inadequate because it did not include interest that had accrued while the compensation was lodged in the government treasury.

The implications are multifarious. If structures have been built on the acquired land, whose property will these be? How will these be valued? Will the land need to be returned or will arbitration have to take place? This order will mean many more cases of acquisition are likely to be reopened through the courts.

The Union ministry of rural development says the SC order not only validates the legality of the new Act and the retrospective clause but provides clarity on the way forward. “I am certain many displaced families will benefit as a result of this solid precedent,” said minister Jairam Ramesh.

Mantri Developers bags Golden Peacock Award for CSR Initiatives

Bengaluru: Mantri Developers Pvt ltd, the leading real estate developers of South India, has bagged the 'Golden Peacock Global Award for Corporate Social Responsibility 2013' for its contribution in the community development and promoting sustainable social development.

Kiran Kumar, Associate VP, Mantri Developers receiving the Golden Peacock Awards 2013

On receiving the award Sushil Mantri, Chairman and Managing Director, Mantri Developers, said, "Our CSR arm, Mantri S.E.V.A has been persistently working towards bringing a positive change in the society at large. We are making efforts to bring in visible, positive and satisfying social impact. We are delighted to receive this award, it encourages and strengthens our commitment towards CSR initiatives and we thank IOD for the honour."

The award for Corporate Social Responsibility has been instituted by Institute Of Directors (IOD) to encourage initiatives that promote sustainable development.

The award was based on three key parameters; integration of CSR concerns with corporate functioning responsiveness to the needs of different stakeholders; and development of innovative partnership models to fulfill social responsibilities, a release said.

Mantri Developers over the years have taken major steps to contribute towards the betterment of the society in the areas of Education, Environment, Livelihood, Social awareness to name a few.

Nikhil Kumar, Governor of Kerala and Lt Gen J. S. Ahluwalia, PVSM (Retd), President, Institute of Directors, India presenting the award to Kiran Kumar Associate VP, Mantri Developers.

About Mantri Developers:

Mantri Developers Pvt. Ltd. is a leading developer of world class Homes, IT Parks, Retail Spaces and Educational Institutions. Mr. Sushil Mantri founded Mantri Developers in Bangalore in the year 1999. In just 14 years, the company has built over 24 projects. Today, as part of its diversified portfolio Mantri Developers cumulatively has to its credit over 20 million square feet of constructed area, over 30,000 satisfied residents and 11 million square feet under various stages of construction. Mantri Developers has a track record of delivering 1.4 homes per day since inception. The company plans to focus on the residential sector, retail, hospitality, IT Parks and educational institutions in Bangalore, Chennai, Hyderabad and Pune.

No rosy picture for Chennai Real estate in 2014

Macro-economic conditions coupled with weak demand and rising input costs have impacted the growth of Chennai residential market in 2013, and if one goes by the experts, 2104 will be no different either unless there is a dramatic turnaround in economic condition, feels K Ramanathan.

Owing to negative sentiments among buyers, the city has witnessed decrease in sales to the tune of 33 per cent in 2013, which forced developers to defer new project launches. According to a data available, Chennai has witnessed a whopping 35 per cent drop in availability of new homes in 2013.

According to a Knight Frank study, owing to weak demand, developers in Chennai now require seven quarters to clear their existing unsold inventory compared to five quarters in 2012.

Indicating the impending price correction in Chennai, Om Ahuja, CEO - Residential Services of Jones Lang LaSalle India, said, “Over the last few months, many research reports have spoken of excessive real estate supply and slowing demand across many cities including Chennai. Developers in this southern metropolis have been rolling out discounts and freebies that are not part of the normal offers. This trend has created an expectation that first few months of 2014 will see a correction in property prices.”

Though there is no visible state of panicky among developers, the reducing number of homes available to buyers, piling of inventory, dolling out of freebies, marginal reduction of prices are nothing but an indication that all is not well for Chennai realty market in 2014. And according to Ahuja, “The current sluggishness in property sales can continue for a maximum of two more quarters.”

Praising the swift reaction by Chennai developers to overcome the sluggish demand by of deferring new launches and focusing on on-going projects, marginal reduction in prices and introduction of innovative schemes, Dr Samantak Das, Chief Economist, Director-Research and advisory services of Knight Frank India, hoped that such measures would revive the sales volume in 2014.

However, the drop in absorption and launches during 2013 has drastically shrunk the size of Chennai market. Surprisingly, even though there has been a drop in sales and demand, property prices has seen a marginal rise in the range of 5-7 per cent, said a Knight Frank research report on Chennai residential property market.

As for as office realty market in Chennai, absorption has gone down drastically which has pushed the vacancy level up. When compare to other major markets, which have held on to their 2012 levels, this is indeed a bad news for Chennai commercial market that is looking for a revival in this year.

For residential side, West Chennai is expected to attract buyers in the coming quarters on the back of some emerging employment hubs, while the upcoming metro corridor will be instrumental in driving demand in other locations within Central Chennai.

Realty unplugged: Welcome to greater Chennai

The advent of important corridors of Chennai -- Old Mahabalipuram Road (OMR), East Coast Road (ECR) and Grand Southern Trunk (GST) Road -- has provided a gamut of opportunities to home seekers in selecting properties under different types and budgets, writes K Ramanathan.

With almost 80 per cent of residential and commercial developmental activities being centered around these southern corridors, OMR and its surrounding areas, take the lion’s share offering wide range of residential properties - from affordable, luxury, villas to single floor residential apartments and commercial floor spaces.

However, poor planning towards future development along the corridor is casting a shadow on the prospect of OMR becoming a satellite town, says Dr R Kumar, Managing Director of Navin Housing, a leading developer in Chennai.

“Real estate activity is happening at a break-neck speed along OMR. Several housing and commercial establishments have already been established on both sides of the road. But it is only a ‘ribbon development’. Interior areas on both sides are still undeveloped with acres of land being lying vacant. As there is no proper connectivity to the OMR, government should take measures to lay interior roads for a planned development,” said Dr Kumar, who is also Chairman of Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu chapter.

Area specific growth

Real estate activity in Chennai has always been area-specific. In 1998, it was Velacherry. The 2006 boom brought in OMR to limelight and later ECR, which is still continuing. Next, it will be GST Road or Sriperumbudur, according to realty experts.

Being an IT hub of the southern metropolis, local and global companies along OMR have created thousands of employment opportunities here, which in turn has triggered residential and commercial activities. Though there has been a slump in IT/ITeS services across India for the last two years, absorption has been satisfactory so far on this stretch as residential demand remains at par with the available or created stock.

Tamil Nadu Housing Board (TNHB) has created a township at Sholinganallur with IT Parks, arterial roads, schools, play grounds and bus service. The township has 4000 dwellings and situated next to the upcoming 200 acres Rs 1000 crore National Maritime university complex. To add to the development of OMR and its periphery, the government has recently sanctioned Rs 500 crore for the proposed 55-km-long elevated corridor from Taramani to Mamallapuram on OMR.

The unprecedented development here has transformed the once sleepy towns/villages along OMR such as Tharamani, Thoraipakkam, Siruseri, Sholinganallur, Perumbakkam, Thaiyur etc. into vibrant realty hotspots today, with state-of-the-art facilities and amenities making it a mini city in itself. Starting from Madhya Kailash on Rajiv Gandhi Salai, the realty development on OMR has spread beyond Thaiyur.

However, Dr Kumar feels that to make the reality growth along OMR sustainable, developmental activities should be systematic and uniform. “We have seen a good traffic on this stretch already. The government should extend the MRTS services beyond Siruseri, improve infrastructure and also broaden the stretch to avoid traffic congestion,” says Dr Kumar.

According to an estimate, there are about 70,000 people employed in the IT and BPO companies along this corridor and about one lakh more people will get employment in the IT belt in the next one to two years.

Property prices have gone up by 50 per cent in the whole belt in the last two years, and an unbelievably 80-100 times since a decade. “In 1999, the cost of a plot measuring 2400 sq ft in Thoraipakkam was about Rs 150000 which is now selling at Rs 40-50 lakhs depending upon the location,” says Durairajan, a real estate consultant and building contractor in Taramani.

Some of the leading builders who have built or are making homes here, are Akshaya Homes, Hiranandani, Mantri Developers, XS Real, Puravankara Projects, L&T Constructions, DLF Group, Appaswamy Builders, Olympia Group, Radiance Realtors, Vijay Shanthi Builders, Aayush Builders, Naveen Construction, Millennium Foundations, Suryavardhan Estates Private Limited, Jain Housing & Constructions, RAMS Builders, Singapore-based Ascendas, Bangalore-based RMZ, Arihant, Doshi & Doshi, Rajyog, Prince foundations Ltd and many more.

Almost every residential development has been offered with health clubs, sports facilities, supermarkets and other logistic supports so that the residents don't need to travel to the city. Construction of a state-of-the art shopping mall with a hotel and cinema is also in progress at many projects.

Welcome to greater Chennai

So, what has kept this 35-km long stretch from Adyar to Siruseri and beyond selling at fast pace, despite economic slowdown?

“OMR is strategically placed between ECR and GST and so, areas in between these roads are also developing. More so, many parts of OMR are well connected to Central Business

Districts of Chennai,” says Sathish Kumar, Managing Director of Anandam Foundation, a city based developer.

Having four projects at various places along OMR, he says, “With several IT giants setting up homes within the SIPCOT IT Park, it is only natural that people working there would want to move in nearby. Builders see this as perfect opportunity to set up large-scale projects like integrated townships and gated communities. To their advantage, large land parcels are still available for building such projects on OMR.”

DABC has an integrated township Acacia, which provides residents with a number of amenities like medical facility, eateries, club, bank and ATMs. The builder is also providing an international style mall and amphitheatre, to meet the entertainment needs of residents.

Not to lag behind, L&T is planning to being in the third branch of Padma Seshadhri Bala Bhavan Senior Secondary School, a leading CBSE chain of schools, to its new project ‘Eden Park.’ The project also has supermarket, polyclinic and swimming pool among other facilities.

Residential properties on OMR were part of luxury bracket, with square foot was selling as high as Rs  4000 and above. But today, after surviving global meltdown, the real estate here now toes the more affordable line.

Builders on the stretch have pegged their rates between Rs 2500 and Rs 4000, in response to the change in buyers' sentiments. “Today, people are looking for affordable homes here and want to settle down,” says Sathish.

Affordable housing

Of 7,000 housing units developed in Chennai Metropolitan Area (CMA) annually, more than 95 per cent were made in the suburbs and fifty per cent of them belong to low-income group.

 

Still, the city is facing a shortfall of more than one lakh houses. Going by the present pace of development, this shortfall could be increased to eight lakh units in the next 15 years.

Homebuyers belonging to lower income group feel that there isn't enough supply of affordable houses as builders are finding affordable housing a nonviable option to make profit. However, whenever a builder promotes a budget housing project, it gets sold out fast. Akshaya MD T Chitty Babu has said that he had to sit in his office till late night to accept bookings when he launched a budget housing project on OMR last year. Plaza group, which launched a 176-apartment project at Perumbakkam, off OMR, early this year, sold out the entire stock in just five hours.

Projects at a glance on OMR:

Projects	Place	Category	No of Apts	Size
Sobha Meritta	Kelambakkam	Luxury	556	537 to 2179 sq ft
Vishwakarma-In town	Kelambakkam	Mid-segment	352	950 - 1250 Sq. Ft.
Bollineni Hillside	On OMR	Integrated township	4500	708 - 2346 Sq. Ft
Marg Savithanjali	Kalavakkam	Luxury	702	1157 sq.ft to 1636 sq.ft.
Alta Vida	Thaiyur	Mid-segment	397	570 - 1275 Sqft
Pacifica Aurum	Kelambakkam	Apts and Villas	1714	1149 - 4251 sq.ft.
Elegants Pinnacle	Semmenchery	Mid-segment	178	533 - 1661 sq ft
Akshaya Today Akshya January	Kelambakkam Kelambakkam	Mid-segment Mid-segment	3790 688	630 sq ft - 1360 sq ft 610 sq ft - 1412 sq ft
Marg Pushpadruma	Kalavakkam	Mid-segment	466	847 sq ft to 1140 sq ft

On commercial side

Housing development has triggered unprecedented growth in commercial realty too on OMR. According to Badal Yagnik, Managing Director – Chennai and Coimbatore, Jones Lang LaSalle India, “OMR is fast turning into an epicenter of commercial property development. Over the years the area has turned into a new mother lode of opportunity, thanks to excellent ‘Grade A’ office space availability for a spectrum of multinational tenants, he says.

As per a Cushman and Wakefield’s analysis, in the second quarter of 2013 approximately 2.4 msf of new office space came into supply in OMR, which is more than six times compared to previous quarter.

Key IT Parks along OMR are Ascendas IT Park, SP Infocity, Prince Infocity, RMZ Millenia, Tidel Park etc. This corridor also hosts IT SEZs such as Chennai One BPO Park and Ramanujan IT City along with ELCOT SEZ and Siruseri SIPCOT.

The excellent connectivity and transportation network have augmented OMR’s status as an important IT / ITES hub. In fact, the commercial real estate projects along OMR attract not only domestic players, but also foreign investors.

“In the current fiscal, we expect the highest demand for office spaces to continue focusing on the pre-toll micro-market of OMR. Two reasons that attract the occupiers are locational advantage and competitive rentals,” he further added.

Tips For Constructing Your Own Bungalow

Arvind Jain

Considering the complexities involved, it often makes sense to buy a bungalow rather than construct one, says Arvind Jain, Managing Director – Pride Group, Pune.

While there are significant advantages to buying a ready bungalow from a reputed developer, many individuals prefer to build their own homes as per their own specifications. Here are some guidelines on what constructing your own bungalow involves:

The Plot

Obviously, the first thing that is required for constructing your own bungalow is a suitable plot. The next aspect required to commence building a house on it are the necessary permits from the concerned authorities. This would include a NOC with regards to land use from the local zoning authority, a building permit from the municipal corporation, load approval from the electricity board, etc. It is best to use the services of an experienced architect or contractor, since such professionals are familiar with the process.  

If the plot is being marketed as a developed plot by a reputed developer, there is very little stress involved in establishing the legal veracity of the land. If the plot is being bought directly from individual owners, an advocate experienced in property matters should do a title check. It is not advisable for a lay person to attempt to do the due diligence without professional assistance.

Factoring In All The Costs

The overall costs of constructing your own bungalow would include the price of the plot, the stamp duty payable to the Government upon purchase, the cost of obtaining statutory clearances from various authorities, the cost of obtaining an electricity connection, the cost of raw materials used in construction, the cost of construction labour and the fees of the architect and / or contractor.

The costs will vary depending on where the plot is situated, as land costs differ from city to city and area to area. While the cost of building materials would remain more or less the same everywhere, the cost of labour and also statutory permits may differ in urban, semi-rural and rural areas.

The cost of constructing an independent house can range from Rs. 700-1200 per square foot, depending on various factors such as the house design, quality of materials used, etc. The entire construction process involves excavation, foundation, stonework and brickwork, roofing and waterproofing, flooring, doors and windows, internal and external finishes, water supply and electricity connections and sanitary works.

The cost of steel, cement, sand and labour can increase significantly, and have in fact increased a lot in recent times. This is a function of the state of the economy and availability of labour at a given time in a certain area.

Be Sure About Local FSI Norms

FSI norms are laid out for urban areas are inflexible. However, many semi-urban and rural areas are not bound by regulations with regards to mandatory parking and open space provision, rules pertaining to structural safety or construction regulations such as FSI. The FSI norms within which you can construct your own bungalow will not be the same from area to area, and this mainly depends on which corporation limits the plot falls in, or if it falls under gram panchayat jurisdiction.

These are three main aspects to be considered for the construction of a bungalow, but it is by no means a complete list. Considering the complexities involved, it often makes sense to buy a bungalow rather than construct one.

Ruby Builders launches Ruby Landmark near Vandalur

Chennai:  Ruby Builders, a Chennai-based construction company, today announced the launch of Ruby Landmark near Vandalur in Chennai.

Speaking at the launch in Chennai recently chairman and managing director, Ruby Builders, Ruby R Manoharan said,'Landmark will gave 208 two-bedroom apartments and 90 three-bedroom apartments. The size of the 2BHK would range from over 1101sq.ft to 1141sq.ft and that of 3 BHK  from about 1360sq.ft to 1518 sq.ft..'

The apartments are to be sold at a price of Rs 3500/sq.ft and the builders are offering a launch price of Rs 3050/sq.ft for the first 100 bookings.

Manoharan said, 'The location of the project is near the proposed Asia's biggest bus terminus which makes it easily accessible.'

The project will include a swimming pool, gym, facilities for indoor games, pneumatic water system, power backup, common area, round-the cloc security, sewage treatment plant, integrated DTH and CCTV at the entrance lobby area.

Manoharan also said that the project costs Rs140crore and is being constructed in a land area of 2.25 acre.
Ruby builders have completed 168 residential projects in the past 17years. The company forayed into developing multi-storey building in 2012 with its 'Ruby Elite'.

Manoharan said the focus of Ruby Builders has always been on sustainable quality on stringent safety standards,'The company has also made use of newer technologies,' adds Manoharan.

Prince Foundations’ project bags twin awards

Chennai: Prince Foundations, a leading real estate developer in Chennai , has recently bagged the 'Best integrated residential & commercial developer of the year 2013' award for its project ‘Prince Village – 2’ at the Brand Academy Real Estate Awards 2013.

Besides bagging the top honour, Prince Village - 2 was also chosen as the 'Most affordable housing project of the year 2013' under the Chennai North category at the Chennai Real Estate Awards 2013 by Silicon India.

Brands Academy Awards identifies the best of Real Estate Industry in India across several categories that have risen to unprecedented heights in their respective geographies and felicitate them for their vision, achievements and the contribution to the growth of the real estate and infrastructure in the country, a release said.

Speaking on the achievement Ashwin Kamdar, Managing Director said, "It is the combined and consistent hard work and commitment by all concerned staff including the labourers, which has made it possible for Prince to scale this height in such short time. Over the years, we have grown to understand and fulfill the needs of customers belonging to every segment. We are committed and we promise to continually better in every aspect to achieve the highest performance standards in the areas of complete transparency, superior service levels and the best prices. These recognitions have and will energize us further in our continuous journey of promise delivered."

Prince Foundation Ltd was incorporated as a private company in February 2004. Over the years, under the guidance of Ashwin Kamdar, Chairman and Managing Director, Prince Foundations has grown into a real estate developer of repute with 6.5 million square feet of completed, on-going and forthcoming projects in both commercial and residential markets.

The other members of the board of Directors include Sharad Vasanji, Raj Kumar Kamdar and Asit Mehta. Entering into the 10th year of business, Prince Foundations has changed the skyline of Chennai cityscape. Prince Foundations has developed over seven residential projects and four commercial projects in the city.

A few notable among them being - Prince Courtyard - Egmore , Prince Highlands (Porur), Prince Village (Tondiarpet), Prince Info City (Kandanchavadi - OMR), Prince Info Park (Ambattur), Prince Techno Park (Thoraipakkam - OMR), etc.

Hot Real Estate Investment Destinations of Kolkata

Mid-to-long-term residential investment potential in some of the areas in Kolkata is good in terms of appreciation of capital values and resale purposes, says Surekha Bihani, Head – Transactions (Kolkata), Jones Lang LaSalle India.

Rajarhat- New Town

Rajarhat has several factors going for it in terms of real estate market drivers. It enjoys good road connectivity with Eastern Metropolitan Bypass and Belgharia Expressway connecting it to southern and northern parts of the city. 

Netaji Subhash Chandra Bose International Airport is close to Rajarhat and is well-connected to the submarket.
Currently, work on metro railway is in progress which can connect Rajarhat to the airport as well as to the southern part of Kolkata city. Work on another metro route is also in progress connecting Salt Lake with central Kolkata and Howrah.

This submarket has witnessed interest from various national and international developers such as DLF, Unitech, Tata Housing, Shapoorji Pallonji Group, Keppel Magus, etc. for residential projects development. In addition, regional developers like Shrachi Group, Belani Group, Shrishti Group and Bengal DCL are also present with projects.

Present Scenario

• Commercial: The average capital values for commercial spaces are in the range of INR 3,300-3,600 per sq ft and rents are within the range of INR 30-35 per sq ft per month. We expect the rents to increase by about 15% in the next 5 years.
  
• Residential: The average capital values and rental values are on the higher side in the planned part of New Town when compared to the surrounding areas of Rajarhat. The capital values in New Town are INR 3,300- 5,700 per sq ft and the rental values would be INR 9,000-15,000 per month for a 2BHK apartment (1,000 sq ft). The capital values in the surrounding areas are in the range of INR 2,500-4,700 per sq ft and the rents are within the range of INR 7,500-12,500 per month for a 2BHK apartment (1,000 sq ft).

Maheshbathan

Mahesbathan is at a location between Salt Lake Sector V and New Town. It enjoys the same connectivity features as Rajarhat. This location is coming up in a good way in recent past due its locational advantage.

Present Scenario

• Residential: The average capital values and rental values Maheshbathan are INR 4,100- 5,000 per sq ft.

EM Bypass- Park Circus Connector

EM Bypass and Park Circus Connector have good connectivity to not only the CBD but also the PBDs (Peripheral Business Districts) of the city. Currently, work on metro railway is in progress which can provide better connectivity to the airport. In addition, work on flyovers and widening of EM Bypass are under progress, with the BRTS system ready to be implemented in the near future. A lot of good commercial and residential projects are coming up in this area.

Present Scenario

• Commercial: The average capital values for commercial spaces are in the range of INR 9,000-11,000 per sq ft and rents are within the range of INR 70-80 per sq ft per month. We expect the rents to increase by about 25% by the next 5 years.
• Residential: The average capital values and rental values in this area. The capital values are INR 6,500- 11,000 per sq ft and the rental values would be INR 20,000-30,000 per month for a 2BHK apartment (1,000 sq ft).

Overall Outlook

The mid-to-long-term residential investment potential in these areas of Kolkata is good in terms of appreciation of capital values and resale purposes. Within a period of 3-5 years, social and civic infrastructure would also develop sufficiently to boost prices. Commercial properties, which are big ticket investments, would also be good over the long term of 5 years or more, with satisfactory appreciation of rents very possible.

The Legacy Of Bungalows In Pune Real Estate

Kishor Pate

Despite their unique characteristics, bungalows are becoming scarce in Pune, writes Kishor Pate, CMD - Amit Enterprises Housing Ltd.
 
Pune's residential real estate market has come a long way - especially in formats. From huts to 'wadas', and from there on from individual, owner-built units to modern apartments, the landscape has been changing constantly. Today, tall, modern apartment buildings reach for the skies all over Pune, jostling for space with commercial developments and older, smaller buildings.

However, none of the residential formats available now and in the past have had such enduring appeal as bungalows. There are good reasons for this. To begin with, Pune is a city with a unique blend of individualism and solidarity. The bungalow is the only format of housing that captures and caters to this spirit in every respect. This sociological ethos is evident everywhere in Pune's society, but is most is made concrete in the properties being maintained by the city's more prominent families - private and beautiful, they provide a safe haven for the inhabiting families while sending out a clear message of their social status.

Secondly, a bungalow is the only residential format which offers complete and unequivocal ownership - no part of it is part of anyone else's property. As such, a bungalow owner is a true 'lord of the manor'. There are no society rules to crimp one's lifestyle, and every part of a bungalow is a firm possession. This factor was aptly brought out by a renowned spiritual master from Coimbatore who held a discourse in Pune several years ago.

A man who had grown up in and among the highly individualistic homes that defined many South Indian cities back then, he had been invited to dwell in the home of one of his disciples in the city. This, he recalled, was his first encounter with the modern 'flat system'. He quizzed his disciple about the flat format, and was perplexed to discover that no part of the flat was really wholly owned. The walls were common to other flats, the ceiling was somebody else's floor and the floor was somebody else's ceiling.

Simplistic though it may seem, this evaluation is actually quite accurate. A bungalow is the only format of built residential real estate that is an owned asset in the truest sense.

Thirdly, a bungalow offers the ultimate work-life balance option for those who have made it in life. The bungalows of most of Pune's elite function as homes as well as workplaces for their owners. With enough space to separate work from family life without overlap, bungalows offer the highest form of luxury and convenience to business owners.

Fourthly, the security of a bungalow is matchless if it is part of a modern township in Pune. While isolated bungalows on the outskirts definitely face security threats, bungalows in avant-garde townships such as Bloomfield - a luxury residential project based on the Singapore theme - have the advantage of the highly efficient, yet non-intrusive security of the project. This unique blend of security, privacy and autonomy in bungalows is the result of Pune's rapid progress towards Western living concepts.

Finally, a bungalow offers the ultimate bridge between generations, allowing large families with members of all ages to cohabit is a perfect harmony of space, privacy and safety.

Despite their unique characteristics, bungalows are becoming very scarce in a city that treasures individuality as a tradition and a life value.  Because of the economy of scale that residential developers in Pune must pursue as a business model, most available plots are now being used for the development of apartment buildings. 

However, Pune still offers a limited number of exclusive bungalows to those who will not compromise on the right to privacy, total ownership and a lifestyle above and beyond the common denominators.

PuneVille: A Lifestyle Project In PCMC

Pharande Spaces, the leading deveoper in Pune, has recently launched an ultra-exclusive luxury residential township by PuneVille at Punavale. Being the latest real estate investment hotspot in Pune’s burgeoning Pimpri-Chinchwad Municipal Corporation, the project will be made on a 40-acre plot and will offer every luxury and convenience of modern life to its residents.

'This is not just a promise - it is a blueprinted guarantee.  PuneVille has been conceived to stand head and shoulders above the rest - not just first among equals, but quite literally without peers,' says Anil Pharande, Chairman - Pharande Spaces.

Not Just Designed – Perfected By Aedas

This unique luxury project has been conceived by Aedas, the global award-winning architects who have master-minded Venetian style-hotels in Las Vegas and Macau, as well as the Financial Centre in Shanghai and Marina Bay Sands at Singapore.

Aedas ranks second among the world's top architectural firms and will bring its full expertise to bear on PuneVille. Aedas is the leading international design firm which specializes in blending architecture, interior design, landscaping and overall project concepts into cohesive and stunningly compelling masterpieces.

Thanks to Aedas, PuneVille is not only a marvel of modern architectural and lifestyle - it is actually based on this firm's deep study of the location's geographic, climatic and environmental profile. This has given rise to a luxury living community which is not only the ultimate statement in modern living, but also completely in harmony with its surroundings - and with the needs of its elite inhabitants. In every respect, and without compromise.

Not Just A Project - A Lifestyle Masterpiece

PuneVille is a top-of-line luxury residential project. The first phase consists of 16 towers, each with 23 storeys of exclusive and uniquely crafted living spaces. The entire project has been designed with a luxury resort theme. Every unit is uniquely crafted, provided with the highest-quality imported fittings, fixtures and marble flooring as well the top Indian brands.

PuneVille will incorporate an international school, a state-of-the-art hospital and well as high-end commercial office spaces. This township is going to be among of the best in the country and incorporate every conceivable luxury feature, including a Olympic-size lagoon shape swimming pool, Club House, restaurant, landscape garden, tennis / multi-use court, lush lawns, a Joggers Track, a children’s' play area, a serene and spacious water bodies, and a walkway at a height of 22 feet, connecting all the residential towers to the central common amenities.

 Not Just A Location - An Answered Prayer

Punavale is the perfect location for such a unique luxury offering. It is in the very heart of the Pimpri-Chinchwad Municipal Corporation, and just one kilometer from Wakad. Punavale provides easy accesss to Aundh, Baner the University Circle and Hinjewadi, home to Pune's largest and most vibrant IT Park, as well as to Lonavala and Mumbai via the Expressway.

In fact, PuneVille is a mere five minutes' drive to the Pune-Mumbai Expressway via a specially constructed 700 meters access road. Likewise, Hinjewadi will be brought even closer via the proposed road which adjoins the project. Immediate access to the proposed 6-lane road to Baner will bring the Queen of The Suburbs, along with all its shopping complexes, hospitals and leisure outlets, within easy reach.

On a macro level, the PCMC region is poised for a quantum upgrade in its economic profile, with in excess of 6000 new white collar jobs to be created over the next few years, 36 new educational institutes coming up and major hospitality giants such as Taj Gateway, JW Marriot, Smart Inn, Le Royale, Lemon Tree, St. Laurn and Sayaji delivering the final vitalizing boost.

Not Just ‘Green’ – Completely Sustainable

PuneVille will be PCMC's most resounding statement from the perspective of environmental sustainability. The project has already been given a 4-Star pre-certification from GRIHA - one of the leading sustainability rating agencies in the country. With the rapidly increasing interest for 'green living' among Pune's most discerning home buyers, Pharande Spaces can do no less than ensure that PuneVille takes a leadership position in terms of 'green homes in Pune.  

In short, PuneVille will outshine anything so far seen in residential real estate in Pune - and indeed, the rest of the country. It is a tantalizing vision of a modern lifestyle transformed into magnificent reality, translated into ground realty. PuneVille is the very highest standard of urban living - now, or in the future, anywhere in India....

Centre launches initiatives to monitor housing schemes

To monitor the number of houses being constructed every year through various government sponsored housing schemes such as JnNURM and Rajiv Awas Yojana (RAY), the centre has launched Housing Start Up Index (HSUI) and a monitoring tool “Integrated Urban Poverty Monitoring System” (IPoMs).

While launching the initiatives, Dr Girija Vyas, Union Minister for Housing and Urban Poverty Alleviation, said, “HSUI is an index that will track the number of houses being constructed every year across the country. The Housing and Construction related activities in our country with its backward and forward linkages and with nearly 254 ancillary industries have huge multiplier effects on the economy. Hence HSUI would indirectly indicate the growth of National Economy itself.”

Housing Start Up Index is a joint initiative of the Ministry of Housing and Urban Poverty Alleviation (MoHUPA) through its integral arm – the National Building Organization and the Reserve Bank of India.

The minister also disclosed that the results of the pilot index initiated in 25 cities would be released in the last week of this month or first week of February 2014.

In her address, she spoke about the various pro-poor housing schemes such as JnNURM, Rajiv Awas Yojana, Rajiv Rinn Yojana (RRY) and National Urban Livelihoods Mission (NULM). Dr Vyas also highlighted the Socio Economic Caste Census (SECC), developed by the MoHUPA, which is a first time initiative in the country. The minister also highlighted other achievements of her department such as Real Estate regulation Bill and the Street Vendors Bill.

The event culminated with the launch of the web-based MIS system Integrated Urban Poverty Monitoring System (IPoMS) for JnNURM & RAY. In order to closely monitor the submission of the Detailed Project Reports under RAY by the States, a web-based tool called the Integrated Urban Poverty Monitoring System or IPoMs has been designed by the Ministry. Through this tool, the implementation of the scheme can be expedited and tracked effectively. This will also ensure transparency and accountability in the implementation of the scheme.

In his welcome address, VP Baligar, Chairman and Managing Director, Housing and Urban Development Corporation Limited (HUDCO) briefly listed out various achievements made by HUDCO in the last one year. The function was attended by A.K. Mishra, Secretary,MoHUPA and several senior officers of the Ministry and HUDCO.

Korean investors shying away from India due to unfriendly policies

Excessive red tapism, land acquisition problems, poor infrastructure, complex tax policies, high licensing and inspection costs, protectionist labour laws and congested judicial system are the major bottlenecks forcing Korean investors to opt for other emerging markets in Asia over India, according to a study.

“With just 1.25 per cent share i.e. about $2.6 billion of Korea’s $215 billion worth total overseas investments till the end of 2012, India figures quite low on the list of favoured investment destinations for Korean firms evidently as investors from Korea have pumped in $39.67 billion in China, $14.18 billion in Hong Kong, $8.38 billion in Vietnam, $6.73 billion in Indonesia, $4.65 billion in Singapore, $3.95 billion in Malaysia and $3.81 billion in Japan,” noted a report titled ‘India-Korea: Eliminating Barriers and Increasing Investments,’ by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Though the bilateral trade between India and Korea reached $19 billion clocking nearly 20 per cent growth during 2012, it is relatively low compared to the size and structural complementarities of the two economies,” said the report.

“Korean FDI inflows have been growing at a very tardy pace as their companies seem to be keener to explore other emerging markets as many of them feel that if big company like POSCO can face difficulties, despite government assurances, it would be even tougher for smaller companies to survive in India,” highlighted the report.

ASSOCHAM has also suggested the government for speedy administrative processes for approval and clearance of big-ticket investment projects through fast track process, development of dedicated world-class industrial parks and supporting infrastructure like logistics, power and water supply, carrying out tax reforms like early introduction of goods and services tax (GST) and developing social infrastructure like Korean restaurants, recreational facilities and others.

“South Korean companies can forge business alliance with their Indian counterparts to become partner in infrastructure development as India plans to tap $1 trillion in infrastructure sector by 2017,” suggested the ASSOCHAM report. Moreover, there is vast scope to boost trade in services like information technology (IT), information technology enabled services (ITeS), communications, banking, insurance, education, broadcasting, tourism and healthcare.

The chamber study further states that automobile, infrastructure, nuclear and renewable energy, defence, small and medium enterprises (SMEs) and shipbuilding are some of the key areas with significant potential for investments and co-operation between India-Korea.

Besides, there is tremendous potential for India and South Korea to work together and explore possibilities of promoting third country exports by taking advantage of the various rationalised procedures and investment norms applicable to the Special Economic Zones (SEZs), added the report.

India may act as an ideal destination for Korean companies to relocate to counter growing labour scarcity and rising wages back home thereby taking advantage of India’s cost-effective human resources, it added.

Further, there is also scope for the two Asian giants to take leverage from complementarities in case of India’s growing knowledge-based service industry and Korea’s hardware and manufacturing-based economic structure. Besides, India’s capabilities in pharmaceutical industry, IT software and auto components indeed complement Korean competence in heavy engineering, automobiles, machinery and electronic hardware.

Also significant opportunities for bilateral co-operation also exist in the area of internet and e-governance.

Pre-launch Schemes by Developers May Vanish Soon

Pre-sales of residential units is a widely followed practice universally. However, in India, developers go a step further, offering units for sale at a prelaunch stage. During pre-launch, developers offer investors an opportunity to purchase residential units ahead of even procuring all necessary approvals, says Suvishesh Valsan, Senior Manager - Research, Jones Lang LaSalle India.

At times, land title due diligence or product-mix (retail, residential, commercial) considerations may still be underway. During pre-launch, developers apprise an inner circle of brokers/investors that a property not officially launched in the market is available for sale. While one imagines the news spreads through word-of-mouth or email, recently we have seen prelaunch announcements made on public hoardings and in newspapers.

For developers, prelaunch provides funds, which could be used for part-payment of land (or to acquire another piece of land) or meeting approvals related costs (which in India are usually higher). Also, developers benefit through test-marketing a project before spending time, effort and resources on approvals, due diligence and construction. Developers expect to sell 15-20% of units during prelaunch. 

For investors, prelaunch provides an upper hand in terms of apartment choice as well as price discount. Market observation suggests prelaunch investors could earn a discount of about 15% over the base price at the start of construction. In recent years, investors enjoyed healthy returns by holding from pre-launch until completion (usually 3-4 years) considering that over the past four years, the price of residential units pan-India increased by over 50% on average. The risk involved is related to approval delays, product-mix changes or project cancellation at worst.

In June 2013, India’s Group of Ministers (the Union Cabinet) approved the Real Estate Regulatory Bill, which prohibits residential unit sales by developers before obtaining all approvals. Though still not approved by the parliament, the Bill has aroused debate about the viability of developers’ current business practices and the Bill’s likely impact on land cost and housing affordability. 

It is pertinent to mention that the Indian central bank prohibits funding for land purchases to avoid land hoarding, and prelaunch was an alternative funding mechanism for developers. Thus, in its current form, would the Bill create funding constraints for Indian developers?

Let’s look at China as a comparison. The practice of prelaunch does not exist in China and banks are prohibited from making loans for the purchase of land use rights. However, capital markets in China are highly liquid and developers have many sources of funding including the corporate bond market onshore and in Hong Kong, project-level equity joint ventures with domestic or foreign funds and institutions, as well as lending from trusts and other non-bank financial intermediaries. 

In China, the Government is typically responsible for land acquisition, rehabilitation and resettlement, while developers purchase land from government with clear title. Since the land title is clear, developers can mortgage their land to acquire additional funds for construction work. In India, however, developers are responsible for land acquisition and rehabilitation, causing delays, manipulations and litigations.

Prelaunch leads to information asymmetry and, thus, should be abolished. Simultaneously, there is a need to provide practical solutions to the genuine funding needs of developers. Either the bank funding channel needs to open-up, or a better market environment must prevail to attract more private investors.