New areas under MRTS to witness realty boom in Chennai

CHENNAI: After the recent test runs of Chenai Metro Train from Koyambedu terminus to Ashok Nagar on the elevated corridor, all eyes now on the emerging new routes that the phase II of the project would connect in future.

The government has recently announced its ambitious plan to connect some of the fast growing neighbourhood areas in West parts of the city such as Iyyappanthangal, Kattupakkam and Poonamalle along with Muggapair, Padi and Kolathur with Mass Rapid Transport System (MRTS).

There will be a new line of Monorail network connecting Vadapalani to Poonamalle via Porur. The line will pass through the busy and congested Arcot Road, say sources.

According to sources, the government would soon begin a feasibility study on expanding metro rail network to connect fast developing neighbourhood on the west of Koyambedu and Poonamallee which are not connected by the MRTS.

The expansion idea is to build small stretches and connect them to other modes of transport including monorail. The study will exploit the possibility of having metro rail on two routes - one originating from Chennai Central Station towards Poonamallee High Road, and a second one from Koyambedu towards the Western suburbs. Sources said the routes and stations of the phase II corridors would be decided later.

Once the metro rail routes are identified, the government would commission a feasibility study, cost and detailed project report.

Some of the areas with would witness real estate appreciation due to commissioning of new metro and monorail routes are Mogappair, Padi, Ambattur, Kolathur, Thiruverkadu, Kumananchavadi, Iyyappanthangal, Kattupakkam, Poonamalle and adjoining areas.

"The government would be looking to fill in gaps in the network of the existing metro rail and mono rail lines that has been sanctioned for construction. In the last few years, several neighbourhoods have grown and there is a demand for fast and hassle-free public transport connectivity to different areas," said an official.

Officials want to solve the problem of limited connectivity options, through phase II of the metro rail project, by integrating different modes of public transport, said a senior government official. "We are primarily looking at areas not covered by phase I on Poonamallee High Road and the northern areas. This corridor may begin from Chennai Central," he said, adding, that the second corridor is to be extended from Koyambedu towards the western and the northwestern parts of the city.

Official said that the government would plan the new routes after considering demands from people who live in developing areas such as Mogappair, Padi, Ambattur and Kolathur and after studying several factors including the emerging industrial trend, real estate development and enormous level of migration.

While addressing the state assembly recently, governor K Rosaiah said the government would ensure faster clearance of Washermenpet to Thiruvottriyur corridor, besides taking up the detailed project report for phase II of the project in the newly-identified corridors.

Besides metro rail, an extended MRTS that connects Velachery to St Thomas Mount, development of outer ring roads, and an elevated freight corridor are some of the projects would not only reduce the congestion on city roads, but also trigger rapid real estate development in the concerned areas, feel realty experts.

Land buying becomes the latest fad in Chennai

True to the saying that ‘the best investment on earth is earth’, Chennaiites are now more inclined towards investing in land notwithstanding the strained economic condition and stagnancy the real estate sector has been witnessing for the last few years, says K Ramanathan.

With buying homes becoming increasingly difficult for lower and middle class segments, people who could invest as low as Rs one lakh to 10 lakh are increasingly looking for land on the outskirts of Chennai for investment purposes and what more, land promoters are jumping into the fray to tap the God sent opportunity offering land in newer locations around the southern metropolis at affordable prices.

However, real estate experts warn that the overwhelming rush towards buying land would encourage fly-by-night promoters to cheat the gullible land seekers.

“The city has been dotted with posters of various sizes informing people about the availability of land in various places like Redhills, Chengelpet, Oragadam, Avadi, Periapalayam, Sriperumbudur, Madurandagam, Melmaruvattur etc from prices ranging between Rs one lakh to Rs 10 lakh. Some even offer DTCP approved plots of 600 to 1200 sq ft for as low as Rs 6 lakh. People have a good chance to invest in properties at low price as land has less chance of depreciation unlike homes,” says Sathish Kumar, Managing Director of Anandam Foundation.

Though investment in land properties would be ideal considering the present slowdown, care should be exercised in choosing the property under one’s budget. 

What made people to go after land in Chennai? S Stalinraja, Senior Manager, Sales and Marketing of Omshakthy Homes Private Limited, says, ‘The present market condition guarantees more value appreciation for land properties compared to flats. For the last few years, some of the areas of Chennai have witnessed depreciation in capital value for flats whereas prices of land have been increasing steadily.’

S Stalinraja

Agrees Mayank, a property investor from South Chennai. ‘I bought a DTCP approved plot measuring 2400 sq ft in Madurandagam for Rs 6 lakh in 2012. It was sold to me at Rs 250 per sq ft. Presently, developers are offering land at Rs 450 per sq ft in the same area, almost 100 per cent appreciation one can say in one year,’ he says.

In the recent years the state government has been focusing on the infrastructure of Chennai and the surrounding suburbs. Adding to market growth, south Chennai suburbs are experiencing heightened activity as multi crore companies are changing the skyline.

Chennai City has grown and expanded exponentially, embracing what was once known as the outskirts, Guduvanchery, Singaperumal Koil and Oragadam, now becoming the hot hubs of Chennai with multi national companies investing in crores. With industries booming and the demand for real estate escalating, areas of south Chennai will continue to grow, no doubt the investment on land property will double in few years from now, says Sathish.

Of the promising investment hotspots for land around Chennai, Chengalpet on GST Road remains on top, offering varied investment options for middle class and upper middle class people. The reasons for those choosing Chengalpet for property investment are many with some of them being, close proximity to manufacturing & IT hubs and Mahindra World City, the business township of TIDCO.

Being the southern gateway to Chennai city, Chengalpet has been one of the fastest developing municipalities in recent times and situated just 30 km from the city center. Apparently termed as ‘New Chennai’, it is the metro’s first integrated business city and India’s first operational Special Economic Zone.

Air, road and rail networks have been expanded to provide handhold service to the public in South Chennai. New master plans have been proposed by Chennai Metropolitan Development Authority (CMDA) in terms of rail route that includes laying of the second lane between Chengalpet and Arakonam, which is about 60 km from Chennai. According to some front-line developers, Chengalpet will become a well-equipped metropolitan city in the next four years.

Chengalpet also has both quality education and medical facility under its belt. The district is equally endowed with top autonomous and affiliated educational institutions in the state.

“Apart from Chengalpet, which provides short-term gain for investors, other places which offer quick appreciation of land value are Oragadam, Sriperumbudur, Singaperumal Koil, Poonamalle, Madurandagam and up to Thiruvallur. One should also look for transport, educational, medical, employment facilities before choosing a land for either investment or residential purposes,” feels Badal Yagnik, Managing Director – Chennai and Coimbatore, Jones Lang LaSalle India, a leading real estate research firm.

Making a pitch on southern and western outskirts of Chennai to get fast and consistent appreciation of land value, Bala however, cautions against buying land in northern and north eastern localities such as Redhills, Periyapalayam, etc, which he feels, have less chances of appreciation in short term. ‘Even for long term also, compared to southern parts, these areas will have less appreciable values. So, one must be very careful from the road-side advertisers offering plots in these areas at affordable prices with hosts of freebies such as free patta, registration, EC, gold coins, scooty etc,” says Badal.

On the percentage of appreciation, southern Chennai areas can appreciate between 30 per cent to more than 100 per cent depending upon the location with in 3-5 years, people who are investing in other areas can expect appreciation between 30-50 per cent in the span of 5-10 years.

The price also varies depending upon the appreciable values, which depend on the infrastructure facilities available and future prospects in the area. For example, a person having a budget of Rs one lakh can look for a land at far off places near Thiruvallur or Arakkonam and can wait for ten years to get a decent appreciation, where as those who look for a fast appreciation of their money can buy a land measuring 1200 sq ft for Rs 10 lakh at places like Oragadam or Sriperumbudur and book profit within three to five years, says Stalinraja.

Legal side

Though there has been a landslide rush towards buying land, legal experts believe that buying land through reputed promoters would save them from being cheated.

“Though lands bought through prominent and reputed developers would be little costlier, these properties would have less chance of having title deed-related problems. One should not blindly believe builders or developers as properties to be purchased should be thoroughly checked for legal problems through a competent authority,” says S Ramaswamy, senior advocate, Madras High Court.

While purchasing land, one should see for appropriate approvals from local panchayat, DTCP or CMDA authorities for using the piece of land for residential or commercial purpose. Encumbrance certificate would give details about the details of liabilities, if any, on the property to be purchased. Transition of legal heir/s should be thoroughly screened for any anomalies in subsequent property sales. One should also demand for Patta, chitta, adigal, copies of necessary approvals and legal opinion.

Lack of awareness drive people to buy land from unscrupulous developers without checking the documents. ‘Most of them do not even ask for a copy of documents such as parent documents, patta, EC, approvals, etc. They simply pay the advance money and give the rest at the time of registration. If any problems arise after few years, at the time of building home in the land, landowners seldom find those who sold the property to them. So it is better to check the documents before registering a land, say legal experts.

“A genuine developer would handover all these copies to the prospective buyer after a token advance which is refundable in case of any legal problem, found later by the client’s lawyer,” says the advocate.

Places to ponder

Areas for short term gain (3-5 years)	Areas for long term (5-10 years)
Oragadam, Sriperumbudur, Singaperumal Koil, Poonamalle, Madurandagam, Kanchipuram, Thiruporur, Sholinganallur, Chengalpet, Padappai, Mahabalipuram, Guduvanchery, Chungavarchathram, Melmaruvathur, Walajabad, Karapakkam	Dindivanam,  Marakkanam, Periapalayam, Redhills, Paruthipattu, Tiruvottiyur, Thiruvallur, Kalpakkam, Uthiramerur, Putlur, Minjur, Athipattu, Thirumazhisai,

Is it the Right Time To Take A Home Loan?

Since there are no prospects of home loan interest rates rationalizing over the mid-term, and price correction in the near future, it is the right time to avail of a home loan and purchase a property in Pune,  says Kishor Pate, CMD - Amit Enterprises Housing Ltd.
 
Because of the on-going economic uncertainties, many aspiring home owners in Pune are still hesitant about taking a home loan and buying a residence. One of the questions that people who seek to make this beautiful city their permanent home is whether it makes more sense to rent now and await a price correction.

For those who are thinking of renting a home in Pune, there are many aspects to consider. In the first place, the affordability of both rental and purchased property is highly location and project specific. To illustrate – someone in Pune who can afford to buy a home in Undri may not even be able to afford the rentals at Boat Club Road, Koregaon Park or Kalyaninagar.

Secondly, whether it makes more sense to rent rather than buy a property would also depend on one's future plans in a particular locality. Does one wish to settle down there, or is one also open to other areas? It definitely makes sense to rent a home while one is making up one's mind about a particular locality.

If an individual is certain of a locality in Pune and is committed to settling down there, the right time to buy a home is now. There are many projects available in the excellent new residential areas that have come up in Pune, and prices are still competitive. There will not be a correction in real estate prices in Pune, as demand for a movement of residential properties in the city is healthy.

The watch-and-wait policy is only valid if there are informed reasons for anticipating a correction in a certain locality. On the whole, property rates in Pune will either remain stable or appreciate, depending on the area. Also, there are no prospects of home loan interest rates rationalizing over the mid-term, and economic indicators suggest that inflation will continue to drive up costs.

Given that it is the right time to avail of a home loan and purchase a property in Pune, one still needs to consider the financial implications. As a thumb rule, an individual's home loan EMI should not exceed a rational percentage of his or her net monthly disposable income. Generally, EMIs can amount to 50% of monthly income.

However, home loans are not the only cause of debt in the contemporary context. People take out personal loans and have pre-existing debts, too. In other words, even a 'fair' EMI percentage could prove unaffordable. The 'ideal' EMI component can only be calculated vis-à-vis a debt-free person's salary. This would be between Rs. 1000-1200 per lakh.

People availing of home loans sometimes forget that they are under legal obligation to repay. There are numerous cases where borrowers have neglected to undertake a due diligence with regards to their financial capabilities and the suitability of the loan of which they have availed. As a result, they find themselves in debt traps and sometimes default on their repayments. Borrowers should stretch themselves only to the extent that they realistically foresee their financial position improving in a given time frame.

No home loan strategy should ever be based on anticipated financial windfalls as a means to pay off the loan. It should be based on realistic factors such as reasonable salary hikes and maturing of insurance policies and investments. If one anticipates a salary hike, even if this amounts to only a certain annual increase, one can consider a 'step-up' option for the existing home loan. Here, the borrower pays a lower EMI initially and steps up the repayment of the home loan in proportion to the assumed percentage increase in income.

HIgh price and interest rates kept housing demand weak in 2H2013: CBRE

New Delhi: High prices and steep interest rates coupled with slow economic growth have kept the housing demand 'weak' in the second half of 2013 , according to a report. 

"A slowing economic growth, coupled with high property prices and steep interest rates, resulted in weak demand for housing during the second half of 2013," global property consultant CBRE said in a statement.
 

In its bi-annual India Residential Market View report for H2 2013, CBRE said high vacancy level and rising construction cost led to a slowdown in construction activity, leading to a decline in new launches, and further delay in project completion timelines.
 

Commenting on the report, CBRE South Asia Chairman and Managing Director Anshuman Magazine said: "Home buyer sentiments remained cautious and subdued due to high price points, with preferences shifting to secondary and emerging micro-markets of leading cities."
 

On the outlook, he felt that housing demand in the high-end and mid-end, as well as in the luxury segment, could remain sluggish across India’s leading cities during the first half of 2014, due to the subdued pre-election macro-economic environment.
 

The report said that liquidity issues and an increasing inventory caused developers to shift their focus from new launches to the completion of existing projects. Still, the consultant said, the delays in project execution continued to remain an over-riding concern in most emerging housing markets. "Developers reduced prices across select projects and offered discounts or marketing promotions to attract buyers in micro-markets with high inventory levels," CBRE said.
 

While the premium housing segment saw a steady interest from high net worth individuals (HNIs) and non-resident Indians (NRIs), end-user demand in the high-end and mid-end segments remained low. The depreciating rupee resulted in an increase in NRI enquiries for property in India.
 

"The Delhi NCR witnessed capital appreciation across most micro-markets. Capital values in locations such as Sohna Road and MG Road in Gurgaon increased by 4–5 per cent owing to strong demand for high-end properties over the last review period," CBRE said.
 

Mumbai’s housing market remained largely stable, with a slight appreciation in select premium micro-markets. The exception was Central Mumbai, where values declined by 4–5 per cent, owing to sluggish demand, in comparison to the first half of 2013.

Buyers expect realty prices to go up post polls: Survey

The Housing Sentiment Index (IIMB MB HSI) assessed by IIM Bangalore and Magicbricks has given a forecast as homebuyers across the nation expect real estate prices to rise over the next 6 months.

The aggregate Housing Sentiment Index (HSI) measured over the holiday season, has bounced back to 117 (the level at which it was in Q1) from 93 in the previous quarter.This reflects a shift from the previous quarter when buyers expected a decrease in prices. (An HSI score of 100 suggests the prices would remain static.)

“Indian real estate is bound to remain an attractive sector in the medium term with faster growth expected in Tier II cities. Competitively priced urban pockets such as Noida, where robust supply is backed with a promise of even better infrastructure have received a thumbs up from end users. However, active interest will take another 6-9 months to translate into buying activity as consumers expect prices to go up only after six months, post the 2014 elections,” says Sudhir Pai, Business Head, Magicbricks.

This quarter, the IIMB MB HSI buyer survey extends to two more cities, Ahmedabad and Kolkata, apart from covering Mumbai, Delhi, Hyderabad, Pune, Noida, Gurgaon, Bangalore and Chennai.

Noida topped the list of cities with an HSI of 129 witnessing a 33% jump in HSI Q/Q. The proposed metro link, emphasis on affordable housing projects and construction of software technology parks is making Noida a fast growing and attractive city to live in.

The sentiments were muted by Mumbai, which ended last this quarter too with an HSI of 85. As the financial capital wrestles with a state of high supply with negligent demand, it is predicted that it will take 9 quarters to clear this inventory at current rates.

The Latest IIMB MB HSI Report also introduces the Seller survey to compare sentiments between sellers and buyers. The HSI of 156 for sellers was a lot higher than the buyer HSI. 29% of sellers expected a 5%-10% increase in property prices. 38% want to book profits while 30% want to move to a bigger accommodation.

Key Findings of the Q3 2013 Report

• The National HSI bounced back to 117 from 93 in the previous quarter.

• Noida, with an HSI score of 129, posted an increase of 33% compared to the previous quarter.

• In spite of the Telengana issue, Hyderabad HSI increased by 22% to 101 this quarter,breaking a largely negative streak to end close to neutral

• This quarter too, Mumbai posted lowest HSI score of 85, followed by Delhi with an HSI of 96, the only two cities with HSI lower than 100.

• Not surprisingly, the seller index that was introduced this quarter is highly optimistic with an HSI of 156.

Prof. Venkatesh Panchapagesan, Head of IIMB-CRERI, IIM Bangalore stated, “Although sentiment this quarter has increased, buyers continue to be cautious with average waiting time increasing to over 9 months. Bangalore continues to be steadily upbeat over the last 3 quarters and is the first choice for those relocating from other cities.

Buyers “wait and watch’ approach is most likely to continue in the first half of 2014.”

Properties in the Rs. 20-40 lakh range are most preferred with over 30% of buyers in this range. Given the high construction costs, steady inflation, increasing bank loan rates and the looming elections, buyers are likely to use extreme caution before investing in property in the coming months.

Hayat Invest gets into realty business in India, launches homes near Chennai

Chennai: Kuwait-based investment company Hayat Investment as part of foraying into the domestic real estate business has announced its commencement of first residential project near Chennai with its Indian partner XS Real Group.

"Hayat Invest would pledge about USD 100 million in next couple of years. For the first two projects it will invest about USD 25 million," XS Real Group Chairman S G Prabhakaran told reporters here.

"The money came in around October 2013 at the time when uncertainity prevailed in the (real estate) industry," he said.

The two companies, in which Hayat Invest holds the majority stake, have jointly launched a special purpose vehicle -- Jacaranda Properties -- to manage the real estate entity.

The first project to come up on a 14-acre land at Siruseri near the SIPCOT Industrial Park would have about 1,500 apartments.

"The first phase is expected to be rolled out by June 2014," he said, adding the apartments would be positioned under the mid-segment category in which prices would range from Rs 20 lakh to Rs 50 lakh.

"For the second project we are still looking at land. It will also be a residential project," he informed.

The reason for setting up the maiden project on the Old Mahabalipuram Road, was the logic behind XS Real Group, which has already undertaken a similar project belonging to Government of Singapore Investment Corporation, Prabhakaran said.

Hayat Investment Company, Founder-Chairman, Nabeel Al Mannae said the two companies were in discussion for a year and last October the financial transaction was made.

"It is just a start from our side. We have the common understanding (through this partnership). We are eager to look forward for more projects in future...," he added.

The two companies are eyeing to clock revenues of USD 120 million through the real estate business, a company statement said.

Unitech says it will clear LIC loan by March

Mumbai: Real estate developer Unitech has claimed that it has been regularly 'servicing' Rs 200-crore
loan it had taken from LIC, even though a senior official of the life insurance major said they are looking into the account as it is a very serious matter.
 

The company also said it will clear all the dues by the end of the fiscal.
 

There were media reports quoting unnamed LIC officials having declared Unitech as a "wilful defaulter".
 

"We are repaying all the dues on time and by March-end, we will clear all the dues," a company official
said.
 

Last week, in a filing to the BSE, the realty company had said, "Requisite steps have been taken by it to ensure that no pendency with the LIC that will be reflected in the financial results and/or financial statements, which are due at the end of this financial year."
 

Last December, LIC had issued a notice to the real estate developer after it defaulted on one of the instalments.
 

Unitech had taken Rs 200-crore loan from LIC in 2007 for a project in Noida. When asked regarding the status of Unitech's loan, a senior LIC official remained non-committal regarding the status, but added that they are looking into it.
 

"This is a serious matter. We are looking into it, but would not be able to comment on it for now," the official said.
 

Concerned over rising bad loans, RBI Governor Raghuram Rajan had asked banks to be strict in dealing with loan defaulters.
 

Last week, RBI's senior most deputy governor K C Chakrabarty had said, "We are very sure that banks have to take quick action about the existing stock of NPAs. They have to take some debt cuts, and they have to do it very quickly.
 

And, if they do not do, then as a regulator, we will make their cost higher."

TATA Housing offers unique scheme for homebuyers

MUMBAI: In a special initiative to commemorate the group’s 175th anniversary and also its founding father’s birth anniversary, TATA Housing in association with TATA Capital, is offering home buyers to book flats in selected projects by paying just 3 % of the cost.

For the first time in real estate history, the offering by Tata Housing Development Co. Ltd, will help realise the dreams of many aspiring homeowners, a TATA Housing release claimed.

The offer allows buyers to book their dream home by paying only 3% of the booking amount. This will be followed by 7% over the next six months across their projects in the premium and luxury homes.

The exclusive offer is valid only for three days between 1-3rd March on select Tata Housing premium properties such as Ariana (Bhubaneswar), Amantra (Mumbai), Myst (Kasauli), The Promont (Bengaluru), Gateway Towers (Mumbai) and Primanti (Gurgaon).

On its part, Tata Capital will offer a lower interest rate of 10.2%, as against 10.5%, with a complete waiver on the loan processing fees under this scheme. Moreover, Tata Housing offers a special concession of 3% across all its premium and luxury projects, the release further stated.

Speaking on the occasion of the 175th year legacy being honoured by Tata Housing, Brotin Banerjee, MD & CEO, Tata Housing said, "The Tatas have over the past 140 years improved the lives of communities they serve. Consumers have always been faced with the challenge of mobilizing the initial booking amount and that's been the deterrent in most of the cases for booking premium apartments. In keeping with the Tata ethos, we decided to simplify and ease the ownership of a home and actualize dreams. The partnership with Tata Capital highlights our commitment to the interest and requirements of our consumers."

The offering fosters the culture consumer consciousness before profits and echoes the compassion of the founder. In a message to the group earlier this year, Cyrus Mistry, Tata Group Chairman had said, "All of us have a responsibility to protect and enhance this brand through the ethical conduct of business and by adhering to the unique value system instilled by our founder, sustained for over half a century by JRD Tata, and fortified by Ratan N Tata in recent years."

SunEdison commissions 18 MW Solar Park in Tirunelveli

CHENNAI: SunEdison, a leading solar technology manufacturer and provider of solar energy services, has announced commencement of full operations of 18 MW Tirunelveli Solar Power Park in Tamil Nadu.

The park is designed to help commercial and industrial establishments. SunEdison relied on its global experience to select a site, obtain permits, design and built a unique solar park that allows businesses to procure as much solar electricity as they desire without having to become solar experts.

"The Tirunelveli Solar Park is a tremendous growth opportunity for our company because it allows us to reach a new customer base of businesses," noted Pashupathy Gopalan, President, SunEdison, Asia Pacific, GCC and South Africa. "We're offering a turnkey solution that allows commercial and industrial businesses to take advantage of renewable tax incentives with minimal effort. We've developed this model to make solar a hassle-free investment for businesses," he said.

Thanks to the 2012 Accelerated Depreciation Benefit for Solar tax law and competitively priced solar power through the Open Access program, businesses investing in the Tirunelveli Solar Park can expect a rapid return on their investment.

The Accelerated Depreciation Benefit allows businesses in India to receive 100% depreciation on solar assets in the first year after purchase. The Open Access program allows developers to sell Renewable Energy Credits. Businesses that purchase part of the Tirunelveli Solar Park can typically expect payback of their equity investment as a tax credit within the first year. 

Power generated by their portion of the Tirunelveli Solar Park will be fed into the local electricity grid to offset their electricity bills. The Tirunelveli Solar Park locks in electricity pricing for 25 years, protecting owners from the rising costs of fossil fuel generated electricity.

Building a solar park requires expertise outside of most businesses' core competencies such as procuring appropriate land, obtaining necessary permits and designing a profitable solar electricity plant. 

SunEdison is solving this issue by offering a secure, turnkey solution based on the knowledge the company has amassed interconnecting 1.4 GW(gigawatts) and operating 1.9 GW of solar worldwide.

Finding a home is now just a click away

Gone are the days when people solely depended on ‘TO LET’ boards, property consultants or classified ads in a popular daily to find a home on rent or lease. With technological advancement, finding a house of one’s choice has now become less cumbersome.

Internet provides the best and reliable option to find rental homes and there has been several region-specific websites have cropped up which provide accurate choice in terms of accommodation, budget, area and other amenities.

The choice has become so narrow that people are now putting up various demands before finanlising a home. “Our clients even ask for the details about next door neighbours, their economic status, number of car parking and facilities available in the apartments for children etc, which will make the search more difficult for us,” says Mani Priyan, CMD, Vasavi Consultants in Chennai.

He agrees that online sites do provide much more options for people to zero-in on their rental needs or owners to find suitable tenants.

For students or working professionals who are looking for flats in major cities across India, online search option is a boon as they can fix up homes by sitting at their work places itself.

In an ideal renting site, one can find the exact location of the property with available facilities such as transport, schools, hospitals, infrastructure such as banks, shops etc and price listing of each property.

Some sites even provide verified listing of the property or videos of house/flat to cater to the need of tenants. 

“Listings of property with good images or videos get good number of views and bookings. It is indeed a great idea when a house owner offers a virtual tour of his apartment or house on lease or rent,” Vibha Sridhar, Chief Executive Officer of EasyRenting says.

To make the search more enjoyable and less time consuming, her site has recently launched verified listing property facility in Delhi, Noida, Bangalore and planning to launch similar facilities across India in the coming months.

To stay in the competition, some rental sites even send their team to clients’ place to get the picture or video of the property to show in the listing, apart from the accommodation details, the surrounding areas, approach roads, neighbourhood, next door neighbour/s, sanitation and children’s play area.

Such minute details will reduce the number of visits to the property sites by home seekers and make the search more specific.

“We have seen a rental ad about a property in Iyyappanthangal in a famous rental site. The advertiser gave a photo of the building but did not give details like proximity from the main road etc. When we reached the property, though we liked the flat, the infrastructure is awful and the property is 3 km from the main road with no transport facility to the main road. The approach road is also not laid properly. We went to three other properties, and found nothing was in our favour. We lost precious time and energy in finding a right home for us,” says Geeta Vasudevan, who works for TCS and looking for a 2 BHK in Porur area.

“Tenants always look for comfort, security and convenience when they hunt for an apartment. Our team goes to the location, takes videos of the property and then uploads the same on our site. This helps prospective tenants to get a clear picture of the property,” Vibha adds.

When a potential client virtually sees and gets a feel of the property, it becomes easy for him to take a decision faster, and more so, accurately. So, house owners who intend to let out their property for rent in major cities will have an edge over others, when their listings have clear videos. Such facility benefits property owners as well as seekers.

IT/IteS holds the key for revival of commercial real estate in 2014

With the real estate industry's fortunes are closely tied to the economic situation, a Knight Frank Research report has predicted that the revival of commercial real estate (CRE) in the second half of 2014 would largely depend on the results of the upcoming Parliamentary elections and the performance of IT/IteS as the fractured result would further take the economy to uncertainty mode.

“Increased likelihood of a fractured mandate in the upcoming general elections will put a question mark on the chances of economic stewardship in H2 2014.  With the economic momentum having slowed down drastically from over 9% in three years preceding the global financial crisis period to an estimated 4.8% in the current financial year, employment and income growth have suffered a severe setback,” the research firm said in its recent report on commercial real estate in India.

Pointing out that the slowdown has impacted the revenue growth and profitability in industries that drive office space demand, the report further stated that, “With the slowdown in IT/ITeS, manufacturing, BFSI, telecom and media sectors the rate of employee addition has declined drastically thereby adversely impacting demand for office space. Such a scenario raises a question mark over the fate of several CRE projects that are either completed or under construction across the urban landscape of the country. If at all there is light at the end of the tunnel, it cannot be assessed without conducting a threadbare analysis of the present financial health and future prospects of industries that consume office space.”

The report also noted that IT/IteS, compared to other sectors, still has the lions share in the commercial real estate. In the six major cities -- Mumbai, NCR, Bengaluru, Chennai, Hyderabad and Pune -- the IT/ITeS has absorbed 52% of the total office space during the last four years till 2013. In other words, the growth prospect of IT/ITeS sector has direct impact on the growth of CRE.

Blaming the multiple offices led to an increase in administrative costs and a bloated wage bill that took away the cost advantage India enjoyed in the global IT/ITeS market, for that the 43% decline in the absorption of office space by the IT/IteS companies during FY11-13, the report asked the IT/IteS entrepreneurs ‘to rethink their strategy in order to protect margins and have a sustainable business model.’

The report also noted that austerity measures taken by IT/IteS companies to cut cost had an adverse impact on the commercial office space demand as companies preferred to operate from multiple locations to single location.

As for as manufacturing sector, the Knight Frank research report noted that a stable central government and an unambiguous policy framework would be the key catalysts for the resumption of investment in the sector.

On BFSI, which contributes 16 per cent of total absorption of commercial real estate spaces, the report hoped that the, “The issuance of banking licenses will encourage office space absorption in the BFSI stronghold of Mumbai and provide a significant buffer for its commercial office space market.”

Predicting that the commercial office space would clock the absorption to the tune of 35-36 mn.sq.ft.in 2014, the report said, “The absorption levels in the IT/ITeS sector would dominate other markets as the sector outlook has eased considerably. Among the IT/ITeS pack Pune and Chennai markets would witness the highest growth in office space absorption during 2014 while Bengaluru, which is the IT/ITeS capital of India, would see the highest quantum of office space absorbed. Mumbai and NCR, considered to be the prime real estate markets in India, are expected to grow at a steadier pace. Similarly the NCR office space market which has a healthy share of IT/ITeS and BFSI sectors is expected to grow at a conservative rate of 3.8% in 2014.”

India's most efficient green building inaugurated in Delhi

New Delhi: Touted to be the most energy efficient structure in India, Environment Ministry's new office in Delhi - a green building which has several measures to save energy -- is not only energy self-sufficient, but can also sell electricity to the central power grid.

Indira Paryavaran Bhawan

Prime Minister Manmohan Singh on Tuesday inaugurated the building and was briefed about the various energy saving and energy generating features of the building, 'Indira Paryavaran Bhawan', by Environment Minister Veerappa Moily and Ministry officials.

Speaking about the building, the Minister said, "This is a very unique structure and has five blocks named after the five elements of nature namely earth, air, sky, water and fire. This also corresponds to our senses."

He said the building with its large solar panels, is "self sufficient in terms of power and we can even sell some power to the grid. It is the best building in the country and has been developed by the CPWD."

Moily said the logo of the building has been designed by the National Institute of Design which captures "the concept of the green building. The motif is of tiger, which is our national animal along with the national aquatic animal gangetic dolphin."

He credited his predecessor and Rural Development Minister Jairam Ramesh for the idea behind setting up of the building, a PTI report said.

Moily termed the increasing use of diesel cars as a "matter of concern" and said the Government was promoting the use of CNG and PNG as fuel in cars.

He said a proposal to make vehicles adhere to Bharat 5 standards of emission was "making good progress" as the Government is keen to cut down pollution drastically. Speaking on the occasion, Ramesh said the "new building has been able to cut down on air conditioning load from 1,000 tonnes to 500 tonnes. If all buildings are built like this, we would be able to meet our greenhouse gas emission targets."

Indira Paryavaran Bhawan

Cutting air conditioning load by using innovative methods such as geo-thermal and solar energy will help in cutting energy requirements, he added.

How To Succeed In Property Investment

Getting into real estate investment without a proper understanding of what you aim to achieve is not advisable. There are many risks involved in real estate investment. However, with the right data and advice, you can definitely succeed in property investment, says Kishor Pate, CMD - Amit Enterprises Housing Ltd, who explains the nuances of realty investment.

 

To begin with, you should know what the odds are. The fact is that the chances for inexperienced property investors to either succeed or lose a lot of money are more or less evenly balanced. The likelihood of suffering a loss is greater if the investor does not have a good idea of the state of the local property market.

Before investing in property, make sure that you have enough insurance. Many investors who have succeeded in the property arena safeguard their investments by floating a nominal limited liability company for their activities. This is certainly an option, but not really a necessity unless you are playing for very high stakes and investing in multiple properties.

Advice To End-User Investors

Property investors actually fall into two broad categories: end users and pure investors. That's right - even end users can technically be described as investors in some cases. These individuals seek to make a percentage of profit on properties that they are themselves occupying. This may involve partial rental or sale of a home or office, retail or factory space. This is not a very common practice, and is usually seen only in cases where the part of the property being rented out or sold would otherwise remain idle and non-productive.

A more rewarding option is the sale of the entire property. This is sometimes done for reasons other than investment - the seller may be seeking larger or more luxurious premises, may be in the process of relocation, or may not be satisfied with the property for other reasons. There may also be a need to downgrade on certain expenses such as maintenance costs. If the sale of such a property is need-based, the profitability usually reduces since the seller needs to cash in within a limited period.

The kind of profit an end user can make on the sale of a property depends on the age and state of the property, its location and its inherent value on the market. A residence purchased five or ten years ago will have appreciated in value for the simple reason that property rates are constantly increasing. The value of the property will be even higher if the location is one in high demand.

The price a 'second-hand' property will fetch will also depend on whether or not it is well maintained, the facilities it offers, the area it is located in, etc.

Advice To Pure Investors

Exclusive or pure investors buy property for the exclusive purpose of earning a profit on them; they do not utilize the estate personally. The properties in question can be residential (flats, bungalows, row houses, duplexes, etc.), commercial properties (offices, factory sheds, etc.), retail (e.g. mall space) and non-developed or partially developed land.

Pure investors have a better chance of making a profit in their dealings simply because their options are wider. There is also no immediacy or urgency involved, since the basic objective is profit.
Investors of this kind should keep certain guidelines in mind:

• Location is everything. Even if rates are steeper in a preferred area, go for it. It will pay rich dividends in the final analysis.
• It is always more profitable to invest in properties under construction or still in the planning stage. By the date of actual completion, rates will tend to be higher.
• If one chooses to invest in residential real estate, the first preference should be towards flats that are located on the first floor. They should offer a good view and ventilation and, ideally, the use of a swimming pool, clubhouse and other trendy facilities. They should also be backed by adequate parking facilities. Most buyers do not make compromises on this last factor, even if they give consideration to the others. 
• Choose to invest in properties by reputable developers. The very name of a famous builder makes a definite difference on the bottom-line of the sales deed.

A quick note on ready for possession properties. Certain dynamics of the property market remain constant, so a profit is still possible. However, a 'readymade' property bought for the purpose of investment will have to be given sufficient time to appreciate in value. Also, certain modifications specific to a potential customer's needs may have to be made. The cost that this involves would have to be adjusted in the final amount.

Finally, if you are new at property investment and are utilizing a housing/investment loan in order to invest in property, ensure that the ratio of self-finance-to-loan amount is conducive to a future profit. Double-check all legal documents.

Property investment is not a game of blind man's bluff. Fortunes can be lost for many reasons - spurious documentation, faulty judgment, market crashes and other unforeseen circumstances. There are a number of bases that need to be covered to reduce the risk factor.

‘FAIRPRO 2014’ witnessed record footfall at CTC

The three-day property exhibition, Fairpro 2014, sponsored by Confederation of Real Estate Developers Associations of India (CREDAI) which began at Chennai Trade Centre in Nandambakkam on Febrruary 21, has seen a record footfalls this year and if one go by the information gathered at the ticket counters and builders, above 9000 people have visited the fair.

Almost all the stalls have seen people thronging and enquiring about the housing projects being offered by them. As most of the builders an developers belonged to CREDAI family, most of the projects were targetting high-end home seekers.

However, a few builders were offering houses less then Rs 10 lakh (one BHK of around 300 sq ft specification -all inclusive) on the outskirts of the city.

In his inaugural speech on Friday, Tamil Nadu Governor K. Rosaiah has asked the construction sector in the state to meet the needs of people.

“In the age of information, the needs of people have changed drastically and it has become imperative for builders to plan their real estate projects to suit their changing needs,” Rosaiah said.

Pointing out the real estate sector was going through a transition, he said, in terms of quality of construction, India was on par with international standards. He also lauded CREDAI for being the guiding force to the industry and ushering in transparency in the sector.

Proximity to bus and railway stations, availability of water and basic infrastructure of a good quality topped the list of requirements of property hunters who visited the exhibition on the first two days of the fair.

Speaking on the occasion, R. Venkatesan, member secretary, Chennai Metropolitan Development Authority, said, in 2013, they had issued planning permits for 528 special buildings and 79 multi-storey buildings.

Thanga Kaliyaperumal, secretary, housing and urban development department, was present. Sandeep Mehta, president, Credai-Chennai, welcomed the gathering. Suresh Krishn, secretary and R. Sivagurunathan, convener, Fairpro 2014, also spoke.

The fair culminated on 23^rd February (Sunday).

Advantages of Maharashtra Housing Regulation and Promotion of Construction, Sale, Management and Transfer Act

Maharashtra Housing (Regulation and Promotion of
Construction, Sale, Management and Transfer) Act

The introduction of the Maharashtra Housing (Regulation and Promotion of Construction, Sale, Management and Transfer) Act can potentially have a very positive impact. It is certainly a concept whose time has come, says Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India.

The biggest advantage that it offers to buyers as industry stakeholders is that there will be an arbitrating body available to attend to their grievances and redressals. There has to be accountability at all levels of the approval process, and it needs to include all stakeholders involved with real estate - including the architect, the contractor and the developer. The housing regulator can potentially benefit buyers as well as all other stakeholders.

As of today, the real estate industry faces issues in terms of insufficient transparency over cost and timeframes and also lacks sufficient depth when it comes to credible developers. Hopefully, the State-level housing regulator will implement systems which will mitigate risks and increase accountability. It can potentially boost transparency by standardizing practices, streamlining procedure systems and attending to consumer grievances in a decisive and timely manner. It will therefore help in bringing about a greater level of trust between buyers, sellers, developers and financial institutions that fund the real estate sector. It can also help curb speculative activity in the sector and contribute towards keeping prices in check.

If the correct processes are followed as outlined, developers will benefit as much as buyers. As things stand today, developers have to go through very tedious, time-consuming and indefinite approval procedures. While it is not certain whether the Act will provide single-window clearance of projects, it would be ideal if such a system were also introduced.

T Bill: The Real Estate Impact

The Telangana Bill passed by Lok Sabha is being viewed by mixed feelings by various stakeholders, but it is still too early to gauge its impacts on the real estate industry, says Sandip Patnaik, Managing Director – Hyderabad, Jones Lang LaSalle India. 

That said, it is likely to end the political uncertainty that Hyderabad has been facing for the past few years. The outcomes are still unclear, but Brand Hyderabad is not likely to be overly affected as it is planned to serve as a joint capital for ten years.

Hyderabad has state-of-the-art infrastructure and is the most developed city in the state; therefore, it will continue to retain its relevance and pre-eminence going forward. Over the next six to nine months, the overall business sentiments in the city are likely to remain stable. Investors may find this period favourable, as property valuations are low and there is still potential to capitalize on this.

Similarly, this period will offer the best deals for genuine home buyers, as home prices will remain stable for at least the next six to nine months. As a result, residential sales are going to rise in the city. Office space occupiers are expected regain their confidence for business continuity in Hyderabad – a factor that was being negatively affected by the previous agitations. Leasing activity will improve now, and new occupiers will be attracted to the city.

Overall, Hyderabad City has immense growth potential and will definitely get back into growth trajectory once things stabilize.

Meanwhile, the formation of the new capital for the Andhra Pradesh (Seemandhra region) is waiting in the wings. This is likely to bring in new real estate opportunities in terms of the development of the new capital, which will witness immense infrastructural and real estate growth. However, these developments will depend largely on the support of policies and the leadership that will implement them. 

Other key cites of Andhra Pradesh - Vijayawada, Visakhapatnam, Guntur, Nellore, Ongole and Tirupathi - are also likely to witness increases in property prices going forward. As these cities are in the running for the new capital, they may witness increased speculation.