Monthly Archives: August 2008

Stamp Duty Amnesty Scheme Imperfections Confuse Flat Owners

August 9, 2008 – 2:17 am

Mr. Ramesh Prabhu, Chairman of Maharashtra Societies Welfare Association said that Flat owners wanting to take benefit of Maharashtra Government’s stamp duty amnesty scheme.

The scheme, launched in June this year, says that flat owners have to pay stamp duty at the rate that was applicable when the property was bought until September 2008.

Circular issued in 2006 by the state inspector general of registration and controller of stamps says that the current owner is liable to pay the unpaid stamp duty of the previous occupant of the flat at the current market value.

Mr. Prabhu said, “If there has been a chain of transactions involving a flat over the past two decades and no stamp duty has been paid as required under the sale deed, the present owner must pay the stamp duty on all the earlier sale deeds”. Further he added that people are unaware that such a circular exists.

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Residential Complex At AIIMS Patna

August 8, 2008 – 4:58 am

Kolkata-based RDB Industries Limited, one of the foremost real estate company has informed that the Ministry of Health & Family Welfare, Government of India, have granted a tender in favor of the Company for setting up Residential Complex at AIIMS Patna, the projected value of which is thirty crore rupees.

RDB Industries Limited works in the real estate. Its real estate business includes the development and construction of residential units and commercial complexes.

The company also makes and sells cigarettes and other tobacco products.

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Expatriates’ Struggle For Finding Right Home

August 8, 2008 – 4:58 am

Finding the right kind of place to live in is not that easy when you come down to a different country.

Coming from a foreign land and making India their home is not an easy task for most expatriates, considering the differences in culture, language, lifestyle, habits and so many other small things that we don’t even realize in our everyday lives. It’s definitely not child’s play. Setting up a new home, taking care of intricate details and also making a large number of adjustments is what comprises an expatriate’s life in the initial phase of settling down in a new country. Jim Gainsford , Regional Director (North), CEC shares his experiences of settling down in India.

Talking about how he found a home for himself in the National Capital, Delhi, Gainsford, who comes from the United Kingdom expresses, “I live in DLF Central Park, Gurgaon, Haryana, just outside Delhi and I chose to live here because it is very close to my office. I am single and needed a single apartment close to my office.”

He states that he was extremely fortunate that he was saved of a lot of time while he was house hunting, because he was shown a suitable place in Gurgaon within the first few times only, and thus, did not have to waste his time ‘house hunting’ for long.

Though for Gainsford, Gurgaon is just the perfect place to live in, there are a few changes that he feels will make this area a better area to live in.

“Hopefully, the main developer in Gurgaon will one day make an effort to finish off and tidy up the roads and open space areas linking and between their buildings. Most of the traffic problems in Gurgaon stem from the badly constructed roads which are already in a state of disrepair, a situation exacerbated by the total absence of a traffic plan and/or controlled signaling, adequate signage and illegal breaks in central reserves that are not policed at all,” he avers.

It’s not all that easy to settle down in a country which holds no similarity to one’s own homeland. A lot of adjustments need to be done and some major changes have to be made to one’s lifestyle too apart from the basic change in the living environment.

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Tata Housing Project In Major Cities

August 8, 2008 – 4:57 am

Tata Housing Development Company Ltd., a fully-owned subsidiary of Tata Sons, announced its foray into the North Indian realty market with the launch of a residential property in neighboring Gurgaon. “Raisina Residency will be jointly developed by Tata Housing and Raheja Builders. Aedas, one of the top five architects in the world, has designed this unique project,” Tata Housing Managing Director Brotin Banerjee said.

Addressing a press conference here, Mr. Banerjee said Tata Housing would be developing 200 lakh sq. ft. worth over Rs. 12,000 crore across India in the next four to five years. The projects will be developed by the company on its own as well as in partnership with land-owners and other real estate firms. “The projects are coming up in 8-9 major cities such as Delhi and its neighboring townships, Mumbai, Goa, Hyderabad, Chennai, Bangalore and Kolkata,” he informed.

Talking about the project in Gurgaon, Mr. Banerjee said it would be spread across a sprawling 11.73 acre campus. “Raisina Residency has nine aesthetically designed towers that complement modern lifestyle. It will have two and three bedroom apartments and also duplex and penthouses. The master plan ensures that maximum flats get unhindered views of both the Aravalis and the city landscape,” he added. Raheja Builders Chairman Navin M. Raheja, said: “Raisina Residency will be the new luxury address in the Gurgaon metropolis. Air-conditioned condos, penthouses with island bathtubs and a state-of-the-art clubhouse, fluid landscape are some of the luxuries that are fit for a king which are being offered.”

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Overseas Venture Capitalists Invest Rs 17000 Crore In Indian Assets

August 7, 2008 – 1:24 am

While foreign portfolio investors have been selling stocks of Indian companies, overseas venture capitalists continue to invest in Indian assets.

In a sharp contrast to foreign institutional investors (FIIs) selling shares worth Rs 15,000 crore in the first quarter, foreign venture capital (FVC) investors have invested close to Rs 17,000 crore in Indian assets during the April-June quarter.

The spurt in foreign venture capital investments has been attributed to dipping asset prices, the presence of more India-dedicated venture funds, besides the slide in the stock market. While IT companies continue to account for a majority of foreign venture capital investments, the proportion of non-IT investments, both by activity and value, has gone up.

Sebi’s data shows that FVC investors have invested Rs 1,545 crore in various IT firms in the first quarter of the current fiscal. Real estate and the services sector have received Rs 1,424 crore and Rs 1,259 crore, respectively, in the first quarter. FVC investments are increasingly focusing on alternative energy, media, retail and other consumer demand-led sectors as well. This is at variance with foreign equity portfolio investors, who have been drastically reducing their holdings in manufacturing concerns, real estate companies and telecom set-ups.

According to Navin Wadhwani, director at investment bank NM Rothschild, “FIIs invest only when stocks gain some sort of an upward momentum; they also make it a point to exist when the downturn starts. FVC investors invest in assets when prices cool off, but they hold on to their investment for a longer term. Indian assets have become more appealing with capital markets trending down and valuations becoming more realistic”.

According to Dow Jones VentureSource India Venture Capital Report, venture capitalists invested some Rs 3,712 crore through 80 deals in 2007. As a matter of fact, FCV investors, alone, have surpassed last year’s net venture capital investments in flat three months. Overall venture capital investments (domestic players included) during the first quarter is pegged at Rs 32,379 crore.

According to Axis PE CEO Alok Gupta, Mr Gupta added, “Compared to Europe and the US, India is becoming an attractive destination for overseas investors. The investment market in Europe and the US has been wiped out because of subprime and a probable slowdown; their mainstay — the leverage buyout market — is virtually dead. Growth investing is becoming more popular as opposed to leverage funding among global investors”.

The fall in the stock markets has also done a world of good for venture capital investors. With the average six-month stock price (calculated while making stake placements in a listed company) coming down drastically, investors are able to find good deals in publicly-listed companies as well, industry officials said. Estimates show that of all Indian companies that received venture funding in 2007, nearly 73% are already generating revenues or are profitable.

Arun Natarajan of Venture Intelligence said, “Funds with global mandates have always dominated the venture capital segment. By value terms, over 50% of total venture capital inflows originate from global funds; India-dedicated venture funds account for the remaining portion”.

Mr. Natarajan added, “From what we understand, on contrary to late-stage investments, which could dry up if there is a persistent global recession, venture capital investments will continue for a longer term. This is because there are more than a hundred overseas funds that only has the mandate to invest in India”.

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Indian Real Estate Spreads Globally

August 7, 2008 – 1:23 am

Cento International Investments, UK based real estate consultants have organized ‘Invest India Tour London 2008 to showcaseinvestment potential in India.’

Cento along with Baron Group International, a UK based property investment company and E- eighteen, the marketing division of Network eighteen have organized this tour which they say will provide a platform for real estate developers from India to interact with foreign investors and help promote the country as a lucrative investment hub.

Baron Group MD Nayan Bavishi said that the UK with a population of fifteen million has an untouched market of investors for the real estate in India.

Bavishi said, “There are a number of road shows that happen with developers from India going to the UK. But these road-shows are limited to targeting NRIs who are 2.5 million in number in U K, which has a population of fifteen million”.

Bavishi said, “These investors from UK have already invested in markets like Spain, Portugal, Carribean and Dubai and are looking at India as a potential for investment. But they are skeptical of doing so because they do not have knowledge of the market in the country”. Further he added that these investors need someone who has the whole chain covered for them.

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Inflation Affecting Real Estate Prices

August 7, 2008 – 1:22 am

With inflation touching 12.98%, realtors here are finding it difficult to hold their price line and plan to increase rates for residential units by Rs 100-500 per sq ft later this month.
According to Confederation of Real Estate Developer’s Associations of India (Credai) Bengal, there has been a 25% increase in the construction cost of residential buildings over the last one year, almost double the increase during last year over 2006.
“Construction cost has increased from Rs 1,265 per sq ft in 2006 to Rs 1,811 per sq ft in July 2008, or by 43%,” said Pradeep Sureka, president of Credai Bengal. The city has added almost 10 million sqft of real estate space in last one year.
While steel prices have gone up by 107% in the last two years to Rs 45,500 per tone, cement has become dearer by 39% at Rs 4,900 per tone. “Even cost of bricks has doubled in the last two years to Rs 4.40 per piece,” Sureka said.
In April this year, Prime Minister Manmohan Singh had asked steel companies not to increase prices and the big steel makers had responded by holding the price line for three months.
“If the steel companies start increasing prices after August, prices could go up by Rs 500 per sq ft,” said S. Rungta, VP of Credai.
According to Credai estimates, direct and indirect taxes add nearly 27% to the cost of a six-lakh sq ft residential project with 30-40-metre high buildings. For a property selling at Rs 2,600 per sq ft, a buyer has to shell out Rs 211 as stamp duty and registration charges. Indirect taxes have already added around Rs 483 per sq ft.
Realtors said their sales have come down by more than 30% in the first quarter of 2008-09. Many of them will be gauging the customer mood at a property fair scheduled to open on August 11.
“We have requested Credai members to hold prices till Home Front-2008,” said Sushil Mohta, executive body member of Credai India, referring to the annual event.
However, banks said housing spends in West Bengal pick up after the second quarter, after people have done their festival spending.
According to SK Goel, chairman and managing director of Kolkata-based Uco Bank, the demand for housing in Kolkata and West Bengal starts picking up after the festive season.

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Assocham Predicts $21 Billion FDI In Real Estate Market

August 6, 2008 – 4:31 am

Despite the real estate market being confronted with a short-term depression as real interest rates hovered between 12 – 16%, the Associated Chambers of Commerce and Industry (Assocham) has projected a twenty one billion dollar spurt in foreign direct investment (FDI) in the real estate market in the next 10 years. Read More »

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Parsvnath To Go Slow On Land Buys

August 5, 2008 – 3:39 am

Parsvnath Developers, the Delhi-based realtor, plans to invest up to Rs 500 crore for land acquisitions in fiscal 2009. However, it will not be aggressive in ramping up its land bank and would acquire land for its projects.
In its latest quarter, the BSE-listed Parsvnath added 66 acres of land.
Pradeep Jain, chairman at Parsvnath, said the focus is to acquire land for setting up integrated townships. “We are not very aggressive in acquiring new land to boost our land bank”.
Jain said, “I think we would invest Rs 400-Rs 500 crore out of internal accruals, depending on liquidity …to acquire land in this financial year”.
The realtor further added that land acquisition for its 8 special economic zone (SEZ) sites is complete. These are at Dehradun, Indore, Kochi, Gurgaon, Nanded, Hyderabad, Mysore and Jaipur.
He said, “Construction for most of the SEZs will start in two months”.
Parsvnath is setting up a 370-acre pharmaceutical SEZ in Nanded, Maharashtra. It is also in advanced talks to sell stake in its SEZ projects to fund its developmental plans.
The realtor is in talks with at least five private equity funds, including Saffron India Real Estate Fund.
The formal announcement for the stake dilution is expected in a month.
The developer plans to build nine five-star and 4 four-star hotels. It also expects to open hotels in Shirdi and Mohali within 9-12 months.
For its retail foray, Parsvnath plans to open five to ten stores with formats including hypermarkets, convenience stores, food joints etc during the current fiscal. It is in talks with a major retailer for a joint venture, and the announcement is expected within a month. Per store costs would be around Rs 3,500-4,000 per square feet.
For its latest quarter, Parsvnath posted a 27% decline in net profit at Rs 73.97 crore from Rs 102 crore a year earlier. Sales fell to Rs 381 crore from Rs 414 crore.

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Parsvnath Plans To Invest Rs 500 Crore For Land Acquisitions In FY 2009

August 5, 2008 – 3:37 am

Parsvnath Developers, the Delhi-based realtor, plans to invest up to Rs 500 crore for land acquisitions in fiscal 2009. However, it will not be aggressive in ramping up its land bank and would acquire land for its projects.
In its latest quarter, the BSE-listed Parsvnath added 66 acres of land.
Pradeep Jain, chairman at Parsvnath, said the focus is to acquire land for setting up integrated townships. “We are not very aggressive in acquiring new land to boost our land bank”.
“I think we would invest Rs 400-Rs 500 crore out of internal accruals, depending on liquidity to acquire land in this financial year,” Jain said in a conference call with analysts.
The realtor further added that land acquisition for its 8 special economic zone (SEZ) sites is complete. These are at Dehradun, Indore, Kochi, Gurgaon, Nanded, Hyderabad, Mysore and Jaipur.
“Construction for most of the SEZs will start in two months,” Jain said.
Parsvnath is setting up a 370-acre pharmaceutical SEZ in Nanded, Maharashtra. It is also in advanced talks to sell stake in its SEZ projects to fund its developmental plans.
The realtor is in talks with at least five private equity funds, including Saffron India Real Estate Fund.
The formal announcement for the stake dilution is expected in a month.
The developer plans to build nine five-star and 4 four-star hotels. It also expects to open hotels in Shirdi and Mohali within 9-12 months.
For its retail foray, Parsvnath plans to open 5-10 stores with formats including hypermarkets, convenience stores, food joints etc during the current fiscal. It is in talks with a major retailer for a joint venture, and the announcement is expected within a month. Per store costs would be around Rs 3,500-4,000 per square feet.
For its latest quarter, Parsvnath posted a 27% decline in net profit at Rs 73.97 crore from Rs 102 crore a year earlier. Sales fell to Rs 381 crore from Rs 414 crore.

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Delhi Metro Sells 2 Hactare Land For Rs 220 Crore

August 4, 2008 – 1:14 am

A little known realty firm Young Builders has bought Delhi Metro Rail Corporation 2-hectare land plot at Vishwavidyalaya metro station in North Delhi for Rs 220 crore in an auction.

It will construct a residential complex at the site, which is currently being used for parking. The developer has bought the land on a 90-year lease and is likely to get a developable area of 3.5 lakh square feet, which will translate into a land acquisition cost of around Rs 6,200 per square feet.

Parsvnath Developers’ residential project near Vishwavidyalaya metro station is being sold at Rs 10,000 per square feet.

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WBGEDC Wants Green Energy Certificate Mandatory All Commercial And IT Buildings

August 4, 2008 – 12:55 am

It’s time for the city’s developers to go green. With the Center’s green rating project scheduled to be launched on August 6, environment watchdogs have decided to encourage commercial buildings that will meet energy saving norms.

If developers want to know whether their buildings are meeting the green norms, they can get the energy efficiency levels evaluated by Tata Energy Research Institute (TERI) under the project. Those who pass the test will get a green energy certificate from TERI. In fact, West Bengal Green Energy Development Corporation (WBGEDC) wants the evaluation to be made mandatory for all commercial and IT buildings.

The green rating project will be launched by WBGEDC in the presence of TERI’s director R K Pachauri, who also heads the Nobel Prize winning Inter-governmental Panel on Climate Change. He will also discuss environmental issues with chief minister Buddhadeb Bhattacharjee.

WBGEDC managing director S P Ganchowdhuri said the concept of this green rating project is to make both developers and the public aware of the amount of green energy being used to curb consumption of conventional energy.

“The project will cover all upcoming and future commercial buildings in the state. Developers will have to apply to TERI for evaluation of the energy efficiency level of their buildings. The green certificate will come once TERI finds them taking necessary steps to save energy in their buildings. This evaluation will help developers know what they need to do to construct a green energy building and how to minimize the use of conventional energy,” he said.

The director said they want this certification scheme to be made compulsory for all commercial buildings in the city.

“With many commercial and IT buildings coming up at Rajarhat and Salt Lake, we want the green rating to be made mandatory. We will place this proposal before the state government,” he said.

The government has been emphasizing on environmental issues such as air pollution and climate change due to global warming for some time. Chief Minister Buddhadeb Bhattacharjee recently declared at a World Environment Day programme that he had invited Pachauri to visit the city and suggest ways to control pollution and save the environment.

Bhattacharjee had said he wanted state agencies like the environment department, disaster management authority and science and technology department to work together and formulate a strategy. The state’s Expert Appraisal Committee has already made rainwater harvesting mandatory for all new multi-storied real estate projects to prevent an imbalance in the groundwater level.

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BOA For SEZ Approved 29 Proposals

August 2, 2008 – 7:15 am

The Board of Approval (BoA) for Special Economic Zones (SEZs) cleared a total of 29 proposals to set up SEZs, including three proposals for conversion of in-principle approvals into formal ones. The Board recommended grant of 23 formal and six in-principle approvals.
Prominent among the formal approvals are four IT/ITeS SEZs in Kerala by Kerala State Information Technology Infrastructure Limited, another two IT/ITeS/electronic hardware SEZs in Andhra Pradesh by Godrej Real Estate Private Limited and S2tech.com. Two more IT/ITeS SEZs were approved to be set up in Gujarat by Strength Real Estate and Gaurinandan Property Holders.
Two biotechnology SEZs in Andhra Pradesh by Lahari Infrastructure and a Biological E were also approved.
An SEZ for non-conventional energy, including solar energy equipment/cell SEZ in Gujarat by Euro Multivision was also granted formal approval.
An engineering SEZ in Tamil Nadu by Township Developers India was converted from in-principal to formal approval.
In-principle approvals were granted among others for a multi-product SEZ in Madhya Pradesh by Reliable Smart City.
The airport and aviation sector, including maintenance, repair and overhaul (MRO) SEZ in Tamil Nadu by Taneja Aerospace and Aviation Limited, was given in-principle nod as also a free trade warehousing zone SEZ in Tamil Nadu by Vikram Logistics and Maritime Services.

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Feature Of Real Estate Industry In India

August 1, 2008 – 5:55 am

The real estate sector in India has now become one of the most important sectors in the recent times, thanks to the rising prices of land.
Today real estate sector has become a reckoning force in the economy of India. This sector which till few years back were unknown to most of the investors and people suddenly has become a hot topic to discuss about in a group. The evidence of popularity of real estate in India can be determined from the fact that now to buy a piece of land in the metropolitan cities like New Delhi, Mumbai, Kolkata and Chennai requires a person to shell out a huge sum of money probably in crores. Nariman point, in Mumbai is the most expensive place in India. If that is about the Mumbai, then even New Delhi is not far behind. Yes most of the real estate developers have now shifted their focus on New Delhi and to the NCR areas.

These real estate developers are now investing huge amount of money to buy the large pieces of land in New Delhi and in the National Capital Region areas like Noida, Haryana and Ghaziabad. Ghaziabad is currently ruling the list of these real estate property developers as according to a recent survey that was organised across the whole world Ghaziabad is the sixth most dynamic city to live in the entire world. This has caught the imagination of all the real estate developers and hence now they are not shying away from the idea of investing more and more capital into this potential sector.
Thus it is quite evident that not only the metropolitan cities but the areas near to them are now fast catching up with them. This is why, the real estate property owners are now making merry by investing endlessly into it. Another symbol of this real estate boom in India can be seen with the emergence of more and more shopping malls in the cities across the world. According to a report there are around 21 shopping malls in the city of Ghaziabad alone while more projects are in the pipeline. Another pure example of this is the opening of more and more private engineering and management colleges in Ghaziabad, Noida and Haryana. Most of these colleges are of real estate property owners which are why the area near the capital has now turned into an ‘EDUCATION HUB’ and there are more to follow the trend. Not only that Special Economic Zone i.e. SEZ’s are now the hot favourite option among these real estate developers. But it is still to be seen whether these SEZ’s will have a positive or negative effect in the coming years. However the recent Nandigram issue has put a big question mark on the development of real estate in India. But still then real estate property sector continues to be a hot proposition for the new and budding investors who are looking forward to earn huge returns on their investment.
Thus it is quite obvious why more and more investors are willing to invest in the sector of real estate property in India. But due to this tremendous rise in the field of real estate it also has drawn some unwanted attention of the land mafia and the encroachers. Yes its true since nowadays law bodies have adopted a more stringent approach towards these people, therefore these people are now looking for new alternatives to raise capital to finance their dangerous motives and plans, which is why government has now made the laws stricter for the investors of real estate in India. But even then there is a lot of thing that needs to be done in this direction.
Overall real estate property owners are now playing an important role in the sector of real estate in India.

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