Monthly Archives: December 2010

WAVES in NOIDA

December 20, 2010 – 11:15 am

When it comes to commercial activity in Noida, only one place comes to mind — Noida Sector 18. Gen-next awaits weekends to throng the place which throbs with entertainment zones, eateries and every conceivable commercial activity. Now, this commercial hub is set for a new entrant that may change the Noida skyline.
A prime plot of nearly 16,950 square metres, right in the middle of Sector 18 commercial hub, will see a towering 37-floor building — Wave One. Designed by the reputed Brennan Beer Gorman Architects-Brennan Beer Gorman Monk Interiors (BBG-BBGM), New York, this iconic building promises to become a landmark in Noida’s commercial real estate. The plot is surrounded by some of the best known landmarks of Sector 18 like Centrestage Mall and Raddisson. Just as the malls changed the way people perceive this commercial hub, Wave One is set to overshadow all the other hotspots of this location.

It is an integrated complex having retail, offices and a multiplex, Wave One will have constructed space of around 2 million square feet. To take care of the parking woes, the complex will have parking space for over 2,500 cars on upper floors. Car parking on the 2nd and 3rd floor will make the retail shops on these floors as prime as the ground floor.
With the ceiling of ground floor retail shops as high as 5.9 m and an outside opening, visitors and customers will get a feeling of high street shopping at Wave One. For those who have experienced and love the high street feel in other countries, Wave One will fill that gap in the NCR.
Bringing high-class retail, commercial and entertainment under one roof, Wave One will have a 5-screen multiplex with a seating capacity of around 1,500 viewers to be managed by Wave Cinemas. The complex is centrally airconditioned with premium specifications; planned on a rectangular plot, it will provide excellent branding and visibility from all sides. Developers say that the project on a four-side open plot is vaastu and feng shui compliant.
The construction of the project has commenced. Once complete, Wave One will create ripples in the commercial district of Noida, Sector 18 — to say that it will become the hub of commercial, retail and office activity may not be farfetched. With picture-perfect exteriors and interiors, Wave One is sure to replicate a feeling of shopping abroad and is expected to have record footfalls.

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Wise Decisions In Realty Dealing

December 17, 2010 – 5:51 pm

Proper documentation is one of the most critical step in the process of property acquisition. A promoter should enter into written agreement to sell with each of the persons who are to take or have purchased property.  The agreement should contain particulars of the property and also annex related documents.

In case of a property, yet to be constructed, the agreement must contain liabilities of the promoter to construct it according and specifications approved by the local authority.  The agreement should also contain possession date, money to be paid, intervals at which installments are to be made,  stages of construction, common areas and facilities,  percentage of undivided interest in the common areas and facilities escalation clause,  penalties or damages payable in case of delay in completion of project beyond the agreed time period. Copy of title certificate, approved plan and specifications with the list of fixtures and amenities including provisions are the few documents that should be demanded with the agreement.
A promoter, while he is in possession and has to pay all out-goings including rent, taxes and interest on any mortgage or other encumbrances, till he transfers the property to the buyers .  It is also mandatory for a promoter to convey the land in favor of an association of owners within a specific period of completion of the project. A declaration by the promoter should be there in the sale agreement that he has not entered into any other agreement to sell, lease or license with any other party. It also needs to be specified whether the property is vacant or in possession of any other party other than the seller.
A buyer should ensure that these formalities are taken care of by the builder while entering into a sale agreement.

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De-stressing Destinations

December 16, 2010 – 6:31 pm

The new craze of Delhi’s neo-rich and the corporates to develop holiday or de-stressing resorts to Delhi, Gurgaon and Manesar has caused a spurt in the prices of lands, particularly those located along national highways and also in those along some link roads.
According to the reports available with the real estate agents at Gurgaon and Faridabad, the land rates have crossed Rs 50 lakh to Rs 75 lakh per acre. During the last few months, no-objection certificates have been issued to some dozen parties to develop farmhouses-cum weekend resorts in the Haryana part of the National Capital Region (NCR). Such NOCs are not granted for lands situated within 2 kms of the Kundli- Manesar-Palwal multi-lane global corridor (under construction) and for land pieces which are less than 2.5 acres in size. These farm houses or de-stressing resorts are, no doubt, eating into the green lungs of this prime region.
According to an executive of the Federation of Estate Consultants of NCR (Foenc) while earlier, the first choice of a VIPs and the affluent class of the national capital was the areas near Chhatarpur and the neo-rich had engulfed the prime fertile land on Faridabad-Sohna road and Sohna-Taoru road touching the KMP corridor, now Delhiites are sourcing land along other roads in the region.
The first VIP to have developed his rural retreat was former Prime Minister Chandra Shekhar, at Bhondsi, on the Gurgaon-Sohna road. But later, the neo-rich began acquiring big chunks of fertile agricultural land from Kundli to Karnal (via Sonipat and Panipat) to build farmhouses.
In a related development, the tourism department of Haryana has also initiated steps to promote ‘farm tourism’ in the NCR, conforming to the recently revised norms in this regard.

It is now official that Haryana’s tourism department has identified some 20 farms for the public-private partnership initiative. The farmhouse owners have committed to providing boarding and lodging facilities to tourists at reasonable rates.

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ET REALTY EXPO 2010- Mumbai

December 15, 2010 – 6:26 pm

The infrastructure and real estate sectors have grown phenomenally over a period of time, making India one of the most preferred destinations for investment in the Asia-Pacific region. The real estate boom in India is supported by its own flourishing economy on a sustainable basis. Selling and buying Indian property is now considered to be the most profitable and attractive business opportunity in the present real estate scenario in India. New demands have added to the strength of real estate markets across the commercial, residential and retail sectors in India.
To witness all this visit The ET REALTY EXPO 2010 in association with Times Property, to be held in Mumbai on 17, 18, 19 December 2010 at The JW Marriott Hotel. Conceptualized and managed by Asian Business Exhibition & Conferences Ltd, the country’s leading exhibition experts, The ET REALTY EXPO is in its 9th year.
Foreign investors are building hopes on Indian real estate and they are really bullish on the Indian real estate scenario. Also keeping in mind the latest trends and the local demand for real estate, The ET REALTY EXPO is a platform that features the best brands in the real estate business that have a variety of real estate properties on show.

This unique property exhibition shall feature high-end luxury apartments, villas, value added residential projects, second homes, offices, it parks and commercial properties. Reputed real estate developers such as Hiranandani Group, Godrej Properties Ltd., Indiabulls Real Estate Ltd., Kalpataru Ltd., Hicons Developers Pvt. Ltd., The Wadhwa Group, Sunteck Realty Ltd., RNA Corp., Kumar Properties Group, Nahar Group, Royal Palms India Pvt. Ltd., Parinee Pvt. Ltd., etc, shall exhibit a wide range of residential and commercial projects that investors and occupiers could choose from.
Properties from Tier I and II cities will be on display. The basic objective of this platform is to bring builders and service providers face to face with actual buyers including global clients and NRIs who are scouting for properties in various metros, and upcoming cities in India. Major financial and banking institutions such as HSBC and SBI will also make their presence felt with the real estate financing options they may have to offer. The ET REALTY EXPO 2010 promises to be a complete real estate investment exhibition.

Earlier this month  The Times group also organized much acclaimed bi-annual India realty exhibition in Dubai from 9th to 11th of December 2010, at Renaissance Dubai Hotel, deira.

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RCA for Property Maintenance

December 15, 2010 – 6:08 pm

Cost of rented property maintenance is often common point of dispute between landlords and tenants. Usually, it depends on the mutual terms and conditions as agreed upon and laid down in the lease agreement. The landlord has to ensure that the tenanted premises are habitable and safe, with adequate repairs undertaken. In case a landlord is unable to do so, the tenant may undertake these repairs, with a proper notice to the landlord, mentioning the nature of problem, inconvenience, safety hazards, and the necessary steps required to correct the problem. It should be mentioned that, in case the landlord fails to undertake these repairs within the specified time, the tenant will have it done and will be eligible to recover the amount spent from the landlord. However, this covers only repairs that are essential and urgent.

The Rent Control Acts says, that a landlord is bound to keep his premises in good and tenant-able repairs. If a landlord fails to undertake any repairs, the tenant may do so himself and deduct the expenses from the rent payable to the landlord. This is subject to the condition that any amount deducted or recoverable in any year will not exceed 1/12 of the rent payable by the tenant for that year.

In case of repairs, without which the property is not habitable, and the landlord  fails to do so notice in writing, the tenant may apply to the rent controller under the Rent Act for permission to undertake the repairs himself. He should submit to the controller an estimate of the cost of such repairs too. After considering the estimate of cost, controller may by an order permit the tenant to undertake the repairs. It will then be lawful for the tenant to undertake the repairs and deduct the cost. The costs can be recovered from the landlord.

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Nashik, New Realty Destination

December 14, 2010 – 5:29 pm

Sizzling by the virtue of its all round development, Nashik has now become one of the hot property destinations in Maharashtra. The exclusive residential projects that are coming up in various external parts of the city are adding to the demand in the realty sector in the city.

Godavari Ghat Panchvati Nashik
Photo by Durgesh PaliwalNot long back, the outskirts of the city used to be least preferred locations for residential purposes. However, over a span of few years the transformation in this area has put many homebuyers in dismay, which is today being considered as premium residential location of the city, with malls, multiplexes, colleges and international schools, finance offices, eateries, fitness centers, in its vicinity.

The residential and commercial projects here too are as exclusive and so is the stream of investors in this location. Apart from homebuyers seeking high-end amenities in the city’s best location, even corporate houses are showing keen interest in this area.

Of late, Nashik has become a sought after residential area, for those who don’t want to be a part of the hustle bustle and the traffic at the end of the day but yet have quick access to facilities are opting for the city. Upcoming areas in the city are in demand as far as property is concerned. The future SEZs are the added attractions in the city, with improved public transport system.

Ekta Group, a Real Estate Company has launched its Ekta Greenville project here and this has followed by a spate of construction activity there. People who have to commute between Mumbai and Nashik prefer these locations on the highway for residential purpose.

As of today the most sizzling stretch with regard to the property market is the stretch between Dwarka and Fame Theatre and the areas adjacent to it, accessible from Nashik Road Railway Station, Sinnar, Dwarka or any other part of the city. Buying a property in the external developing areas of a city is always a good proposition, since you get to have amenities of your choice that many not be possible in the heart of the city due to space constraints.

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Rs 300 crores villa project launched in Goa

December 13, 2010 – 1:21 pm

Leading real estate developer Nitesh Estates has launched its exclusive Rs 300 crore luxurious high-end villa project in Goa. The project has been designed by international architects CPG and the interior design firm Warner Wong.  The project is to be developed across 9.3 acres in the landscape of Goa, and will have 36 luxury villas and to be completed in 2-3 yrs.

Nitesh Estate’s Chief Operating Officer, Ashwini Kumar, said in a statement that  ,the natural scenic beauty of Goa is the most compelling reason for creating this villa community. And these villas are designed for people who are looking for a resort-like experience,” Kumar said.

Besides, having common water sports complex, jetty etc, each villa has a spa and a private pool and everything else that one could desire for, officials added.  These villas are priced at Rs eight- ten crores, and targeted at the upper-crust from India and abroad.  Over 70% of the project area is covered with landscaping and water bodies, designed by international landscape firm, Belt Collins.

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ADB Grants $300 million Pack to Bihar

December 10, 2010 – 12:21 pm

Asian Development Bank has agreed to channel another 300 million dollars loan to Bihar for the development of state roads.  This is the 2nd loan from ADB for Bihar’s road development. In this phase, the state government has decided to construct 4 state highways covering 354 kms with an estimated cost of $368.26 million (Rs 1,653.5 crore). In 2008, ADB had provided the state $420 million to build nine state highways covering 820 kms.

The state’s road construction department secretary Pratyaya Amrit told that their mission is to develop state highways so that anyone can travel to Patna from any part of Bihar within 6 hrs.

Over the past 5 years around 3,300 km of state highways and major district roads has been developed in Bihar.  To carry this development forward, Bihar government is slated to sign a pact with ADB for the new loan in the 3rd week of December this year. Typically these development loans are given by ADB to the Centre, which, in turn, extends it to state governments in local currency.

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HC questions Adarsh Society

December 9, 2010 – 12:01 pm

On Wednesday, Bombay High Court asked the controversial Adarsh Housing Society to submit a list of its original members, along with existing members.

The society filed the petition challenging cut-off of water and power supply as well as cancellation of occupation certificate.

Hearing the petition, high court asked when Defense handed over the land to state. The division Bench of also asked the society to produce terms and conditions of allotment of land by state government in January 2003, and whether permissions were taken when height of building was increased.

The 31-storey building, in South Mumbai, became controversial after it was reported that it stood on Defense land violating CRZ regulations, and was originally meant for relatives of martyrs of Kargil war. The next hearing for the matter will now come up on December 16.

MMRDA cancelled the objection certificate after State received communication from Ministry of Environment and Forests and before cancellation of objection certificate, as well as power/water cut-off, no hearing was given.

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Indian Realty Sector in need of Regulation

December 8, 2010 – 11:18 am

The realty sector probably has the maximum rate and volume of investments and the number of investors. In contrast to the various Securities and Exchange Board of India regulations aiming to protect the capital market investors, real estate development regulation has mostly been neglected.

Current scenario holds that the Indian developers buy land; obtain clearances from the competent authorities for building and layout plans. The predevelopment clearances needed range from non-agricultural orders by way of government permissions for the proper use, building and floor plans are approved by local municipal or state urban development authorities, no-objection certificates are also to be obtained from state pollution boards, water supply and sewerage authorities, properties and other state and central authorities in order to rule out attendant risks.

But, in practice, these approvals are taken at a much later point of time, and booking and collection of a large chunk of demand from prospective buyers are concluded well before these clearances are obtained. This leaves buyers with no choice but to sign on the standard contract formats, with no right to negotiate. The contracts which the buyer is induced to execute are with loopholes for the developer to get away with.

So far the buyers’ recourse has been to the Consumer Courts. In 2007, The National Commission held that the builders’ practice of collecting money from prospective buyers without obtaining the required permissions amounted to an unfair trade practice and the builder is duty bound to obtain the requisite permissions in the first instance, and thereafter, recover from the buyer. Further it also held that if there is any express promise that the premises would be delivered within a stipulated time-frame, the builder has to bear the escalation costs.

A case in point is that of DLF Park Place in Gurgaon, which was to be constructed in 22 mn sq ft in 13 blocks of 1 floor and completed by fiscal 2010. The delay was caused due to DLF departing from the original project, in getting approvals for 29 floors with the plot area being substantially reduced, in breach of the Haryana Urban Development Act the Haryana Apartment Ownership Act, 1983.

With the change in law, such cases come in scope of the Competition Act. The Apartment owners Association, in this case approached the Competition Commission (CCI) for abuse of dominant market position. The CCI has restrained DLF from cancellation of the allotments and also creating third party rights, and also referred the matter to the Director General – Investigations for further consideration.

In the meanwhile, the builder lobby is trying its best to find the Bill, which requires preregistration with the Regulator before the property can be marketed. The Regulator will scrutinize all advertisements, which are to be mandatorily displayed on the developers’ website.

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An insight on India’s Leading Real Estate Companies

December 7, 2010 – 11:52 am

On December 6, world’s leading provider of global business information, knowledge and insight, Dun & Bradstreet released its publication on ‘India’s Leading Real Estate Companies 2010’. The publication highlights the performance of the Indian real estate sector over the past few years, the current trends and challenges in the industry, and the road ahead. It also included detailed analysis about the financial performance of 30 listed Indian real estate companies.

The publication profiles 68 real estate companies in India and provides information on their areas of operations, geographical reach, key projects and contact information amongst others. Companies with total income of more than or equal to 750 millions in Fiscal Year 2010 were selected. The financial analysis in the publication consists of 30 real estate companies for which financial information for the past five years is available, which were further categorized into large, medium and small-size based on total income.

According to, Kaushal Sampat, President & CEO – India, Dun & Bradstreet, the real estate industry has shown positive signs of recovery in FY10-11 in property demand. The studies revealed that many real estate companies undertook several debt and capital restructuring measures owing to an increased debt burden in FY09. As a result of these capital restructuring measures, the overall interest expenses of the real estate companies declined by 10% in FY10 as compared to FY09.

The publication reports that, in FY09, real estate companies faced 38% decline in sales, however, in FY10 sales grew by 4%. Whereas, the mid-size real estate companies reported better recovery in sales with growth of 16% in FY10 as compared to the large companies where recorded sales growth was only 2 % during this period.
As expected, a sharp decline of 26% in net profit was recorded in FY10. Here too, the mid-size players performed better, recording net profit growth of 7.3%.
Certainly, managing interest expenses has become a trend within last couple of years in the reality sector.

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BPEP in India

December 6, 2010 – 10:34 am

Baring Private Equity Partners (BPEP), the global PE major, is planning its future investments in Indian real estate in the near future. For a long time now, BPEP India was looking at investing from its $650 million Baring India Private Equity Fund III. Previously, the firm has invested in information technology, healthcare and financial services sectors from its first two funds.

BPEP has been investing in India since 1998. Baring will look at residential and commercial properties in top seven cities. The foray comes at a time consolidation is taking place in the real estate PE space. Global PE firm Blackstone has taken over the management of BoA-Merril Lynch’s Asian real estate business.

Apart from consolidation, overseas property investors such as Goldman Sachs, Landas Banki and Carval have pulled out from the Indian realty market, while others such as Morgan Stanley, AIG and Wachovia have become dormant.

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Realty Sector in India – ‘Definitely Bullish’

December 3, 2010 – 5:00 pm

While foreign capital rushes into the Indian real estate market, the long-term future of the industry lies in the hands of Indians themselves. A new, positive mindset about opportunities in India is taking shape among young people who are increasingly returning to India after studying abroad and foreign investors. The real growth story is going to be from the people themselves.

Keeping in mind India’s relatively young population — with an average age of 24 — will create continued demand for property and there is a huge supply gap. It’s definitely an under-exploited market in India, but Money can’t just be put into a place where people don’t want to work, don’t want to look at growth, or look at a better lifestyle.

The Indian real estate market is now a hot spot for global investors after new laws being enacted allowing foreigners to own 100% of real estate assets, resulting foreign real estate firms rushing into the country searching for projects and local partners.

India is attractive to  investors abroad because English is spoken in most regions as a first language and the culture is open to foreigners. You are safe.

Foreign investors probably have fewer problems with the government than a local. The government is scared of institutions and will fool around more with private individuals.

The most optimistic side of real estate in India is the prospects for residential development as millions of Indians continue to migrate to the cities. While land prices may seem to be hitting unsustainable heights to people who already live in those cities, migrants are willing to pay a premium.

Keeping in mind the current scenario real estate in India is definitely the right place for future investments.

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