Monthly Archives: June 2010

Siva Group Hold 13.88% in Arihant

June 29, 2010 – 11:06 am

me, chairman of Bombay Stock Exchange
The Siva Group owned by NRI C Sivasankaran has acquired a stake of 13.88% in Arihant Foundations and Housing which is a Chennai based firm.
On Monday, Arihant informed the Bombay Stock Exchange (BSE) that Saravna Enterprises, Siva Projects Engineering and Enterprises and S Jayalakshmi have picked up the stake. Before this deal, Siva Group held 0.32% stake.
Arihant is a leading player in the realty market. This is also evident by its net sales of Rs 158.9 cr. and net profit of Rs 2.8 cr. in the time period of September 2008 to September 2009. It also has a surplus of Rs. 138.2 cr.

A top official of Arihant said that Siva Group has bought the stake as part of their treasury operations. Although promoters have a stake of 65% in Arihant, but dilution is still not needed. The Siva Group has entered the stake market a few months ago. Recently, it bought 12% stake in Ruchi Soya Industries.

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Word to Developers: Have 3D Floor Plans

June 28, 2010 – 10:07 am


condo layout -- mad mspaint skillz
If you plan to develop a project now then 3D floor plans can be of great help in both saving time and money.

With the 3D floor plans, you can easily visualize and understand better which in turn will bring better and focused results. It is even useful for the buyers who then will have a proper view of your project.
Some of the benefits of 3D floor plans are:

  1. It provides the exact view of floors to both developer and buyer.
  2. It brings ease in improving the plan as per need instead of changing the whole plan and start from scratch again which is obviously both expensive and hectic.
  3. It also attracts lenders due to its proper design and colors which may lead to better sale.
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Stability in Commercial Real Estate Market

June 26, 2010 – 11:05 pm

IMG_0190
Real Estate Intelligence Services (REIS) which is a division of Jones Lang LaSalle Meghraj released a report which said that stability in the commercial real estate market of India is observed with the economic recovery of India.

According to the report, although in 2010, the landscape will be beneficial for tenants, but in 2011, influence of landlords will be higher. It implies that since the office rents are beginning to hit the ground, in the coming term, they should be proactively looking to lock in attractive leases.

Abhishek Kiran Gupta, the Associate Director JLLM said in the report that the Indian commercial realty market is about to attain stability with the well going economic recovery of India.

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Impact of DTC Revision on Real Estate

June 24, 2010 – 11:11 pm

Income tax
On June 15, the revised draft for the Direct Tax Code was released. This code is a try by the Indian government to simplify the laws of income tax. The government is waiting for the Parliament to pass the code and plans to adopt it from April 1, 2011.

Below is the list of some must know changes proposed in the draft code with respect to realty sector.

Short-term capital gains: As per the proposals, tax will be imposed on any gain or loss made on the sale of an asset within a year.

Long-term capital gains: The proposed laws say that after an year of purchase, the taxation policy on any gain or loss made on the sale of an asset will be implemented as per the long-term capital gains tax policy.

As per the draft code, from April 1, 2011, April 1, 1981 will not be considered for calculating the discount rate; rather April 1, 2000 will be considered for the same.

Rental Income Taxation Policy: The draft code has proposed that the gross rent should be calculated on the actual rent receivable or received for the financial year.

Home loan Interest Rates: The draft DTC intends to keep on deducing tax on the interest paid on home loans up to Rs 1.5 lakh for construction or purchase of residential property.

Self Occupied House Property: Any self occupied house property (property not been let out) will be allowed for deduction on account of interest to the tune of Rs 1.5 lakh.

This revised draft code of the DTC has come up as a boom for the home buyers and home owners. The revision seems to be beneficial for all, be it is investors or developers.

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CCI Investing in Real Estate

June 24, 2010 – 10:19 am

Real Estate = Big Money
On Wednesday, the Cable Corporation of India made announcement that it has planned to enter into the real estate and will spend an amount of Rs. 1000 cr. in its first project. CCI Projects Private Ltd (CCP) is an associate company of CCI in which CCI holds 15% stake. CCI will be developing the project through CCP.

The project is entitled as Rivali Park. It is a project spread over an area of 22 acres located at Borivali, Mumbai. The project can be considered as a mixed-use development with various commercial, retail, entertainment, hospitality, and cultural elements.

The project will be completed in phases and would take around five to seven years to complete. The first phase is expected to complete within next 24 to 30 months and is part of the residential development.

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‘Inno GeoCity’; a residential project

June 22, 2010 – 12:29 pm

union avenue
‘Inno GeoCity’; a residential project, is launched by Inno Real Estate in Oragadam near Chennai. This firm is a division of Inno while Inno is a , a global investment group focussed on Indian real estate with operations in India, Middle East and Europe.

On Monday, Rajamannar Ramaswamy, the Group Managing Director said that GeoCity is the first own development project of Inno. Till now, they just used to fund other projects and they have already six Indian projects with a total gross development value (GDV) of Rs. 2,600 cr.

Sajid Sathak, the Managing Director said that Geocity, which is spread over an area of 131 acres would be a self-contained township and that it would have a GDV of Rs. 750 cr. 4,000 residential units would be available for buyers plus amenities such as shopping mall, school and medical facilities would be there.

The first phase of GeoCity will consist of 1,000 units and would complete within 1.5 years.

The houses would fall in any of the three categories; Row House I, Row House II and twin house. The cost of houses would fall in the range of Rs. 17 lakhs to Rs. 22 lakh.

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Vivacity Mall is back in demand

June 21, 2010 – 11:03 pm

Cinépolis mexico
Since the demand of commercial real estate is increasing due to the increase in retail activity, Sheth Developers, a property firm tied up approximately half the space at its upcoming 1 million sq ft mall in India’s financial capital.

Sheth developers are Mumbai based developers. They have lined up retailers Hypercity and Shopper’s Stop. Also Cinepolis, which is a Mexico-based multiplex chain, is lined up as tenants for the ‘Vivacity’ mall at Thane which is currently under-construction. All this information was gathered by some reporters on Monday from the vice-president for marketing & leasing of Sheth developers.

He also admitted that although the firm had slowed down construction work due to the market slump, they are now back into operation since their leasing team is getting tremendous response now.

This mall has a total of 670,000 sq ft area as the saleable area and it scheduled to start operations by August 2011.

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“Space City” near Bangalore

June 20, 2010 – 10:12 pm

IMG_9459
Photo by Justin A. Wilcox

On last Sunday, Marib Holdings LLC, an Abu Dhabi-based company announced that they plan to build a “space city” in Chikkaballapur district. This district is approximately 90 km from Bangalore. The company would invest an amount of Rs.18,400 cr. ($4 billion) in the project.
On Saturday, this project got its approval from the state government. The project would include both business as well as residential options. The project is to be built over an area of 1,600 acres. Also, an entertainment theme park would be set which would be inspired from Disneyland.
Exhibition centers, a science and technology park, malls and media-linked events are also included in the project.
In all, the project will include 7,200 residential units, a city center consisting of fashion hub, media city, exhibition halls, media design centre and techno city. Also there will be star hotels, a convention centre, offices and an exhibition hall in the free zone office tower.

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Banks Backing Off from lending to Commercial Realty

June 20, 2010 – 8:17 am


Due to the continuous oversupply of the commercial projects, the signs of pickup in demand in the sector seems becoming dull and thus banks are also backing out from lending to real estate firms.

As compared to the residential sector, the demand growth of the commercial sector in past few months is much behind that of the residential one. Not only the office spaces are yet to be occupied, but also the ready projects are unable to seek buyers. This lack of buyer’s interest in the office spaces, multiplexes and retail has forced banks to back off lending to commercial sector.

Other than the uncertain demand scenario for commercial space, banks also have to look and take care of the rising realty sector debt on their ledgers. Ranjan Dhawan, the chief general manager of Punjab National Bank (PNB) said that since some of the banks have reached their sectoral exposure limit, they cannot now get into more lending. He also added that although PNB is still in is exposure limit, still it would get into some other lending only after thorough due-diligence.

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CREDAI will handle builder- buyer disputes

June 19, 2010 – 8:24 am

conduct!
In the Visakhapatnam chapter, regarding the disputes between buyers and builders, on Thursday, the Confederation of Real Estate Developers’ Association of India (CREDAI) took responsibility of being a mediator so as to arbitrate the disputes.

A code of conduct was formally released by code of conduct, national president, CREDAI. This code was originally brought by the Visakhapatnam chapter as a measure of self-regulation. The formal release of this code of conduct announced many dos and don’ts for member developers/builders of CREDAI.

In the welcome address, K. Subba Raju, the chairman of CREDAI said that they would surely keep a watch on all members so that they adhere to the 27 guidelines of the code completely which in turn would develop a sense of confidence upon the fraternity.

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Real Estate Provides Assured Returns

June 18, 2010 – 12:09 pm

American Dollar 2
The realty prices in cities like Delhi, Mumbai or even some of the smaller tier II cities, like Jaipur or Coimbatore, have shown a remarkable increase over the past few years. This growth has proved the advice of Mark Twain, an American author, that ‘Buy land, they are not making it any more’.
There is no paucity of multibaggers in Real estate. Many cases have been observed in which the property brought in 1986 for just Rs. 1 Lakh is now valued at Rs. 1 cr. or even more.
Thus, it can be inferred that prices are multiplying a whopping 100 times in approximately 25 years at an annual return of 20 percent per annum. For example, in 1977, Mr. N Mehta, a retired professional had bought a 1 BHK house in Andheri, Mumbai, for Rs. 70,000 and the price of this BHK now is Rs. 70 Lakh.
According to the head (real estate investment advisory) of Birla Sun Life AMC, Mr. Sashi Kumar, In today’s scenario, each one should hold realty in the portfolio, although the ratio of how much he/ she should hold could depend on the individual.

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Property Tax to be Increased in Delhi

June 15, 2010 – 11:36 pm

5 March 2007: The Taxman Cometh
The decision made by Delhi government in concern with increasing the circle rates has encouraged the Municipal Corporation of Delhi which thus, now plans to revise its property tax rates upward.

According to some experts, the impact of the increase in circle rates would be in the ratio 2:1, i.e. , with the increase of 200% in the circle rates, there will be a hike of 100% in the property taxes.

However, where the circle rate increase is not very steep, the revision in property tax could be lower.

The property taxes in Delhi are based on the unit area. The circle rates are fixed at a higher rate because of the cost of property in the posh areas which is quite high.

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Delhi govt. to put Check on Illegal Construction

June 14, 2010 – 10:39 pm

[mb] Gutted Abandonment
In order to check the illegal constructions across the capital, especially on the land for agriculture, the concerned departments are ordered by the Delhi Government to come up with strict actions against such activities.

As per the instructions of Mr.Raj Kumar Chouhan, the Revenue Minister, any illegal construction will not be tolerated and along with the guilty, the government officials will also be punished if they fail to control such activities.

He added that if anyone is found who is carrying out any construction activities in 1,639 unauthorized colonies, which are being considered for regularization by the government will also be considered guilty and will be punished as well.

Finally, he also said that government would not stand aside but will take action against developers and land mafia if they are found guilty.

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‘247Park’ is HCC’s focus

June 14, 2010 – 12:09 am

Deep Reflection
Hindustan Construction Company (HCC) which is country’s leading construction firm has declared that it will soon strip its stake. The firm revealed the fact that it will divest its major proportion of investment, i.e. 74% of its stake in various other projects.

At present, the firm’s focus is the project called ‘247Park’. This project lies in Mumbai and this project is expected to work as a milestone for the company’s business destination. IL&FS Milestone Fund are the ones from which firm has striped stake.

The ‘247Park’ will be the hugest standalone LEED Gold certified green building in India. The total estimated value of this Park is Rs. 775 cr. The project is spread over an area of 1.8 million square feet. While Vikhroli seems to acquire a good position in the ranking of business corridors in Mumbai, this ‘247Park’ is located at the heart of Vikhroli. This project was completed in March, 2010 and in just a couple of months, its more than 85% of space has already been leased.

According to Mr. Rajgopal Nogja who is the President of HCC Real Estate Ltd., HCC has finished the project in time without compromising on the high standards of the project.

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SEZ Kolkata Restarted

June 11, 2010 – 11:21 pm

Hotel Stotsenberg....former US military barracks
One of the leading real estate developers in India, DLF, has been granted the NOC from the government today, thus the firm will now resume its plan for SEZ, a special economic zone in Kolkata.

After a meeting of the Board of Approval which is the nodal body for SEZ-related matters, Mr. D K Mittal, the Commerce Ministry Additional Secretary told the media that the DLF’s SEZ in Kolkata has been granted re-notification by the Board of Approval.

In June, 2008, DLF had come up with four SEZ projects out of which one was SEZ Kolkata.

DLF have gained this notification after a long struggle since it had to approach the Commerce Ministry for reviving this IT/ITeS tax-free zone. Finally, once the demand for IT/ITES leasing space came up, the company allowed for resuming the project.

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TOI Organised Real Estate Exhibition

June 10, 2010 – 11:51 pm

The Crown of Navi Mumbai
A real estate exhibition has been organized in India which starts from tomorrow in Doha and is a two day showcase. This exhibition is organized by the Times of India newspaper. The venue of the exhibition is Regency Halls near Mall Roundabout.

The exhibition guarantees showcase of the best real estate options available across India which thus assures the visitors with the exhibition worth a watch.

According to a study carried out by PricewaterCoopers and Urban Land Institute, Mumbai stands at second and New Delhi at the fourth position.

The release also added that the key advantages of Mumbai are its lack of dependence on foreign demand and strong fundamentals. The exhibition would be an ultimate opportunity for potential homeowners to choose from among the best available in India.

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CCI to Look into General Buyer Problems

June 8, 2010 – 12:51 pm

Competition Commission of India (CCI) has decided to take action against the malpractices taking place in the real estate sector. While any specific complaints would be dealt with, misleading the buyers would also be considered as a malpractice.

Some sources revealed that apart from the general complaints of conditions of sale agreements, change in terms, delayed possession and problems faced by consumers while opting out, the complaints of misleading advertisements would also be taken into note.

Sources also revealed that CCI has found a large number of complaints against many leading real estate developers. There exist an Act of Parliament through which the Commission, which gained functionality last July, is empowered to ban any malpractice or enalise the guilty.

According to the Commission, irrespective of any specific builder, the consumer status as far as unsatisfaction is concerned, is the same. Thus, it is well justified to look into these specific as well as general problems.

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New Project in Gurgaon: Victory Valley

June 6, 2010 – 8:58 am

The Abraj Al-Bait Towers also known as the

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

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

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

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

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World’s Tallest Residential Tower in India

June 4, 2010 – 11:40 pm

Q1 Residential Tower
Since the home prices continue to surge in the financial capital of the country, one of the leading real estate developers of India, Lodha Developers have come up with the tallest residential tower in Mumbai. For the financial support, Lodha is negotiating with foreign as well as local financiers.

A banker informed that the Lodhas have approached the property fund of mortgage giant HDFC for over Rs 1,000 cr. and the leading Singapore funds, GIC and Temasek.

Presently, the world’s tallest residential tower is in Australia, known as Queensland Number One which has a height of 322.5 metres. While due to the market downturn, some of the major projects in the West are put on hold, there’s some movement in the Middle-East. Dubai is to come up with a tower of height 516 metres having 120 floors.

The New York architects,Pei Cobb Freed and Partners, who have designed some of the most lavishing architectural marvels across the globe, around 200, are to be hired by the Lodhas for this tower.  Some of their famous marvels are Bank of China Tower in Hong Kong, Louvre Pyramid in Paris and John Hancock Tower in Boston.

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Analysis of Indian Housing Sector

June 3, 2010 – 9:20 am

House, House Industries

The realty market in India is flourishing these days. Not just the domestic real estate developers but also the investors from all across the world; especially the NRIs are attracted to this Indian real estate market. If this continues, it is then expected that very soon the realty market will overtake the other industrial sectors in terms of contribution to GDP growth.

Currently, the major constituents of the Indian housing industry are the affordable houses which target especially the low income groups and economically weaker class. In the field of medium and luxury housing, in next few years, it is expected to see a remarkable growth since this segment has huge prospects for further developments. The hiring of expat employees by the MNCs and then providing them with luxury housing benefits is one of the reasons for the development of this sector. Also, the demand for luxury housing by NRIs is acting as a catalyst in the growth of this sector in India.

RNCOS presented a report called “Indian Housing Sector Analysis” in which it gave exhaustive information and objective analysis about the growth of Indian housing industry. The current and past market performance, market structure and factors critical to the success of the Indian housing industry are also covered in this report.

Based on the relation between the past market growth and growth in base drivers, such as government support, long-term interest rates, disposable personal income, household size, contribution by housing finance industry, GDP growth, growing industrialization and competitive structure, a forecast is been made in this report about the Indian realty market.

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Demand for Luxury Homes at a High Pace

June 2, 2010 – 10:53 am


388 Lower Lake

After a year, the realty market seems to be overwhelmed with the comeback of the demand of luxury homes. Apart from the prime locations like Bangalore and Mumbai, the tier-II or tier-III cities, such as Nagpur and Ahmadabad are also witnessing remarkable growth as far as luxury homes are concerned. Within just six months, these cities have seen a rise of about 20-25% in account of premium residential projects.

Some of the developers who have floated several luxurious schemes across the country in order to grab more and more investors and end-users are Hiranandanis, Sobha, DB Realty, Lodhas , Indiabulls and Prestige.

However, each city has its own range of prices of these luxury homes. The cities Bangalore and Hyderabad have a pricing of Rs 6,000 per sq ft while the pricing in Mumbai is Rs 30,000 per sq ft.

“From Jones Lang LaSalle Meghraj (JLLM) which is a real-estate consultant, the managing director, strategic consulting, Mr. Deepak Bhavsar said that there has been an increase of 10-12% projects in Delhi NCR and Mumbai.

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