Monday, 30 September 2013

Jammu & Kashmir never merged with India: Omar Abdullah

SRINAGAR: Jammu & Kashmir chief minister Omar Abdullah on Wednesday reiterated his party's stand that the state's accession was not a merger with the Indian Union in 1947. 


"While all the states acceded to the union of India and then merged with it, Jammu & Kashmir only acceded and not merged. That is why we have special status, our ownconstitution and the flag,'' he said while talking to a European Union Delegation. 

He said the Kashmir issue was linked to the partition when future of all states except Jammu & Kashmir was decided and underlined the need for a sustained dialogue with Pakistan and separatists. 

Omar said there were diverse views regarding the issue. "While one extremist view is for cession, the other is total merger of the state with the union of India,'' he said. 

"Unless the process of dialogue is started with a view to find out flexibility in both of the views and carve out a roadmap of addressing the issues, the position will not change.'' 

He said the Constitution provides a framework for dialogue with separatists.

source:- http://economictimes.indiatimes.com/news/politics-and-nation/jammu-kashmir-never-merged-with-india-omar-abdullah/articleshow/23085011.cms?intenttarget=no

What would happen if the US government shuts down?

A partial shutdown of the US government will begin at midnight on Monday if Republicans and Democrats fail to agree on a funding bill.

In a government shutdown, spending for essential functions related to national security or public safety would continue along with benefit programs such as Medicarehealth insurance and Social Security retirement benefits for seniors.

But civilian federal employees - from people who process forms and handle regulatory matters to workers at national parks and museums - would be furloughed.

The last government shutdown ran from Dec. 16, 1995, to Jan. 6, 1996, putting about 800,000 federal workers on furlough.

Here is a roundup of the expected impact of a shutdown.

FEDERAL WORKERS

Up to 1 million US federal workers could face furloughs without pay beginning on Oct 1.

Most federal agency workers would be furloughed, but a small number of "excepted" employees must continue to work. These include security workers such as air traffic controllers and prison guards. Congressional staffers could work if requested by the lawmaker or committee that employs them.

Congress has previously paid federal workers for their furlough days.

Federal workers could face penalties if they tried to do any work during the furlough.

FINANCIAL MARKET CONSEQUENCES

Apart from potential market swings, companies hoping to raise money in an initial public offering could face delays.

Businesses will still be able to file certain documents to the Securities and Exchange Commission, but the agency said on Friday that processing and approving applications will be discontinued during a shutdown.

"Capital-raising will have a huge hiccup if the SEC shuts down as it has said," said Eric Jensen, a partner with law firm Cooley LLP in Palo Alto, California.

Drug companies waiting for a decision from the Food and Drug Administration could also see delays. The FDA said it would continue "limited activities" related to programs that are paid for by user fees from drug approval applications.

GOVERNMENT CONTRACTORS

A shutdown lasting less than two weeks would not hurt big defense contractors, which can survive temporarily without federal contract payments, said ratings agency Standard & Poor's. But a longer shutdown could weaken the financial profiles and liquidity positions of smaller defense contractors.

"It is felt a heck of a lot more keenly by small contractors," said Bradley Wine, co-chair of Morrison & Foerster's government contracts practice.

MEAT INSPECTORS

Meat inspectors for the US Department of Agriculture, considered necessary to national safety would stay on job.

source:- http://economictimes.indiatimes.com/news/international-business/what-would-happen-if-the-us-government-shuts-down/articleshow/23294616.cms

SFIO probe calls Rs 1,700 crore Tata-Unitech deal in 2007 dubious and disguised

NEW DELHI: The Serious Fraud Investigation Office (SFIO) has strongly questioned the purpose of the Rs 1,700 crore deal in 2007 between the Tata Groupand Unitech, bringing to life a controversial episode from the past that the salt-to-software conglomerate might have thought was dead and buried. In an initial report submitted in April this year, the Mumbai unit of SFIO has come to the conclusion that the money was meant to enable UnitechBSE -3.38 % Group companies to pay for telecom licences issued in January 2008, rejecting the theory put forward by the Tatas and Unitech that the funds were meant for real estate transactions in Gurgaon.

These findings are the outcome of a wider investigation into the affairs of Vaishnavi Corporate Communications - a PR-cum-lobbying outfit owned by Niira Radia - that was ordered last year by Veerappa Moilywhen he was the corporate affairs minister. (Moily is now the oil minister.) Moily told PTI on July 6, 2012, that he had ordered an SFIO inquiry after receiving a report from the Mumbai unit of the Registrar of Companies.

The report describes the transaction between Unitech and Tata Realty as "dubious" and "disguised as a land deal". It also alleges that the names of eight Unitech subsidiaries were changed to "conceal their identity". These initial findings, which have been reviewed by ET and are part of a wider report into Vaishnavi, are currently being analysed at the SFIO headquarters in Delhi, according to people familiar with the matter. "I do not want to discuss the report," said SFIO Director Nilimesh Baruah, when reached on his mobile. He did not respond to further queries seeking details on whether the report had been accepted or rejected by SFIO headquarters and on the next course of action.
SFIO probe calls RS 1,700 crore Tata-Unitech deal in 2007 dubious and disguised

Responding to emailed questions, Corporate Affairs Secretary Naved Masood said a final report was awaited soon. "Based on a report furnished by the Registrar of Companies, the Ministry of Corporate Affairs appointed officers of SFIO as inspectors to investigate into the affairs of Vaishnavi Corporate Communications and eight other companies under Section 235 of the Companies Act, 1956. Final report of the investigation is awaited shortly. Appropriate action would be taken after detailed findings of the investigation are available," he said.

Corporate Affairs Minister Sachin Pilot did not respond to an email sent to his office. When contacted on his mobile, he declined comment. The Tatas and Unitech have firmly denied any wrongdoing. They also pointed out that the Central Bureau of Investigation had already probed the deal and found nothing that could be used in court.

http://economictimes.indiatimes.com/news/news-by-industry/telecom/sfio-probe-calls-rs-1700-crore-tata-unitech-deal-in-2007-dubious-and-disguised/articleshow/23274301.cms?intenttarget=no

Realtors hope to clear inventory on freebies, festival sales

MUMBAI: Realty developers are hopeful of clearing a large portion of their inventory pile-up during this festive season by luring in buyers with freebies and discounts, even as they sit tight on declared prices, said industry experts.

"Higher interests and the overall slowdown has led to a significant build-up of unsold units with developers in most of the major realty markets over the past few quarters, adversely affecting cash flow and impacting new project launches," KPMG India partner Neeraj Bansal told PTI.

Further, RBI's stringent directives like banning the 80:20 scheme is expected to make things more difficult for developers, he said.

The September-December period witnesses maximum launches and publicity of real estate projects.

However, industry watchers are not expecting any price correction during the period.

"We don't expect any price correction now. Most projects have maintained the price levels or in some cases gone up marginally. But since they have already been factored in the slowdown, they will cautiously plan their sales," PwC India associate director Bhairav Dalal said.

Developers are likely to attract buyers through several discount schemes/gifts with most common being gold coins, cash-back on monthly rentals, customisation, free parking and club facility, zero brokerage, upfront cash discounts among others.

According to realty portal Magicbricks, developers in metros like Mumbai, Delhi-NCR, Bangalore, Kolkata, Pune, Chennai and Hyderabad have already announced various freebies.

"Offering such innovative schemes is most likely to result in higher enquiries and footfalls, which coupled with festive offerings, may help generate decent sales," Bansal said.
Despite concerns over slowdown and high interest regime, there will still be demand from primary buyers, Dalal said.

"There indeed is a slowdown but we believe that sales will happen during this festive season. We will see some offers and discounts, but that may not be major," he said.

For instance in Mumbai region, which has been witnessing a major drop in sales for quite some time, developers like Lodha, Mantri Realty and Romell Group have already announced various discounts.

While Lodha has offered Rs 2 lakh discount on spot booking for its 'Lodha Elite' project in Dombivli, Mantri Realty was offering 100 gm gold on bookings till September 18 for its upcoming Serene project at Goregaon.

Speaking about buyer sentiment, Confederation of Real Estate Developers Association chairman Lalit Kumar Jain said, "This is the best time when buyers will look at buying homes. Despite the slowdown, there will be demand as people are worried about interest rates still going up which will result in property prices escalating. So they believe this is the right time to cash in.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/realtors-hope-to-clear-inventory-on-freebies-festival-sales/articleshow/23253018.cms

DLF may sell Rs 900 crore assets to Shriram Group

BANGALORE: Realty giant DLFBSE -2.54 % has held talks to divest some of its southern projects worth about Rs 900 crore, or $150 million , to the developer arm of the Chennai-based Shriram Group, said people directly familiar with the matter.

Shriram Properties is in discussions to acquire land parcels and not yet launched projects of DLF, which is seeking to pare its $3.5-billion (over Rs 21,000-crore ) debt through non-core divestments. DLF wants to focus on select cities and pursuer highend developments with better operating margins.

The privately held unit of the $9-billion Shriram Group has had more advanced negotiations with DLF regarding the latter's two land parcels in Hyderabad but the discussions also covered not yet commenced projects in cities like Chennai.

India's biggest developer DLF is unlikely to exit projects that are already under construction. Sources mentioned earlier said DLF has to decide whether it should divest at lower valuations, or wait longer. DLF also has lockin clauses and should retain a stake in some of these projects under the land acquisition agreements with state bodies, which complicates the value-unlocking moves, added one source who did not wish to be named since the talks are private.
When contacted, both Shriram Properties and DLF declined to comment on market speculation.

Property brokers have assessed that in the years leading up to the 2008 economic meltdown, DLF had splurged at least $1 billion in land aggregation in south India. The total developable area of DLF's land holdings between Chennai, Bangalore and Hyderabad add up to around 18 million sq ft, said an international property consultant, who has reviewed the land parcels. DLF shares ended nearly 3% down at Rs 132 in Mumbai on Friday.

Shriram Properties, a zero-debt company and sitting on Rs 400 crore cash, could fund the transaction through structured financing support from investors like Indiabulls and JPMorgan. The Shriram group arm has explored tying up more than Rs 1,200 crore in structured debt to step up the development story ahead of a possible initial public offering in the near future.

Last week, TOI reported that Shriram was also in dialogue with a real estate fund of the Tatas to sell a minority stake. Private equity investors TPG, Starwood Capital and Walton Street are other existing backers of the company.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/dlf-may-sell-rs-900-crore-assets-to-shriram-group/articleshow/23289942.cms?intenttarget=no

DDA flats way behind deadline



NEW DELHI: The Master Plan 2021 says the capital would need 24 lakh additional dwelling units to cater to a projected population of 230 lakh by 2021. At least 54% of these units should be for the economically weaker section and the LIG category, the plan suggests.

With the assembly polls round the corner, both the Delhi government and the Centre are busy trying to meet the deadlines. While several schemes are in different stages of construction or allotment, some projects have not yet taken off despite being announced with a lot of fanfare and many others are stuck in litigation.

While urban development minister Kamal Nath has said DDA would build one lakh houses every year for the EWS category, the authority already has its hands full. Most of its projects were announced in 2011-12 and are way behind their 2015 deadline, sources said. Currently, only 2,400 premium flats in Dwarka have been completed but waiting for allotment since March 2013 while around 10,440 flats in Rohini and 5,860 units in Narela are still under construction.

In August, DDA had paved the way for allotment of the EWS houses in Dwarka, initially meant to be a regular housing scheme, to JJ cluster dwellers from nearby areas. "This decision will be a onetime decision as in future the guidelines of the housing and urban poverty alleviation ministry will be followed for formulating schemes for rehabilitating JJ clusters," said a DDA official.

In all, 2,383 slum dwellers have been identified for rehabilitation in the Dwarka EWS flats from six clusters at Indira Camp 2, 4, 5, 3 and 6, Vikaspuri and Shanker Garden . "The beneficiary's identification survey has almost been completed and inputs have also been taken from other socioeconomic surveys carried out by Delhi Urban Shelter Improvement Board (DUSIB) etc," added the official. The allotment process is likely to take six months to a year.

Around 11,000 flats are proposed to come up in the land recently acquired by DDA in Rohini and around 809 flats in community personnel plots. DDA's screening committee cleared over 16,500 flats this April. But there is no indication of whether the construction will be over by 2015. DDA is also yet to clear construction of nearly 50,000 EWS flats.

In-situ projects are also facing difficulties, with the plan for the Katputli colony in west Delhi dragging on for years and DDA approving shifting of 2,574 JJ slum dwellers to a transit accommodation at Anand Parbat only recently.

Once the colony is vacated, development of 2,800 units will begin, said officials. The project , conceived in the publicprivate partnership mode, will see the private firm Raheja Builders developing the units, unlike the recently inaugurated in-situ project at Kalkaji where DDA is constructing 8,064 flats.

"Under phase I, 3,000 flats will be made which will be completed within three years at a cost of Rs 269 crore," said an official. A commercial complex will also come up at the site to recover the cost.


source:- http://economictimes.indiatimes.com/markets/real-estate/news/dda-flats-way-behind-deadline/articleshow/23290118.cms

Not a single real estate project in UP completed since March 2012: Assocham

LUCKNOW: The real estate sector in Uttar Pradesh may be clocking a year-on-year growth rate of about 57%, but industry body Assocham claims not a single real estate project in the state has been completed since March 2012, after the Samajwadi party government was sworn to power.

According to Assocham projects, while UP accounts for 40% of the new investments attracted by real estate sector during the first quarter of the current fiscal, times completion of projects in the state remains the biggest stumbling block in the sector's growth. Assocham's paper, Current State of Real Estate Sector in India and It's Revival, says, "UP has attracted new investments in the real estate sector worth about Rs 2,350 crore in Q1 of FY '13-14 as against Rs 1,500 crore worth of new investments attracted by the state during corresponding period of last year." National secretary general of the industry body, DS Rawat, said, "However, timely completion of ongoing projects has remained a major concern for a long-time in the state as UP has not witnessed completion of any of its real estate projects since March 2012."

He also said that with a share of about 10% in total outstanding investments worth over Rs 14 lakh crore attracted by top 20 states in the real estate sector as of June 2013, UP ranks fifth with outstanding investments worth over Rs 1.4 lakh crore in the realty sector. With real estate projects worth over Rs 1.3 lakh crore under implementation in UP, Assocham says UP commands a share of about 14% in realty projects worth a total of over Rs 9.4 lakh crore under implementation across top 20 states of India.


Comparing UP's performance with other states, the Assocham survey also says Maharashtra alone accounts for highest share of about 20% with outstanding investments worth about Rs 3 lakh crore in the real estate sector followed by Gujarat (15%), Haryana (12%), Karnataka (12%), Uttar Pradesh (10%) and Andhra Pradesh (10%).

The industry body has, however, said that the sector has been hit by a slowdown not just in UP, but across India; the total new investments in real estate sector across India dipped by over 50% during the last one year as top 20 states of India attracted new investments worth over Rs 11,905 crore in the Q1 of FY '12-13 as against Rs 5,884 worth of new investments in Q1 of FY '13-14. "Real estate projects worth over Rs 2,971 crore got completed during the Q1 of the FY '13-14 across India thereby registering over 50 per cent growth in rate of project completion as realty projects worth only Rs 1,976 crore had got completed in Q1 of the previous financial year," Rawat said.

Wednesday, 25 September 2013

Ansal Properties sales booking down 23% at Rs 558 crore

NEW DELHI: Realty firm Ansal PropertiesBSE 0.06 % and Infrastructure today said its sales bookings fell 23 per cent to Rs 558 crore during the first quarter of this fiscal due to lower realisation compared with the year-ago period.

The company had achieved a sales bookings of Rs 726.5 crore in the April-June quarter of last fiscal, Ansal said in a filing to the BSE.

Ansal API sales volume fell marginally to 4.56 million sq ft in the first quarter as against 4.88 million sq ft in the year-ago period. The realisation dropped sharply to Rs 1,224 per sq ft from Rs 1,488 a sq ft during the review period.

The decline in sales realisation was mainly due to launch of projects in regions where prices are lower.

Total area sold stood at 20.37 million sq ft during 2012-13 fiscal, aggregating to sale value of Rs 2,581 crore.

The company's net debt declined to Rs 1,000.58 crore from Rs 1,006.66 crore as on March 31, 2013.

During the April-June quarter of this fiscal, revenue rose 34 per cent to Rs 353 crore against Rs 264 crore in the year-ago period.

However, net profit had declined by 41 per cent to Rs 8.69 crore compared with Rs 14.81 crore in the corresponding period of the last fiscal.

Ansal has land reserves of 9,731 acres out of which 7,156 acres has been acquired or agreed to be acquired by third parties till 31st March 2013.

The company is currently developing 18 integrated townships (including two Hi-Tech townships) with maximum saleable area being in 'residential' segment.

Majority of the total saleable area is being developed in company's two largest townships -- 'Sushant Golf City, Lucknow (3,530 acres) and Megapolis Dadri, Greater Noida (2,504 acre).


Ramprastha to invest Rs 1,000 crore in two townships in Gurgaon

NEW DELHI: Real estate firm Ramprastha Group today said it will invest Rs 1,000 crore over the next four years to develop two townships in Gurgaon, each spread across 450 acres.

"We are coming up with two large townships in Gurgaon. Both the integrated townships are of about 450 acres each," Ramprastha Group Chief Executive Office Nikhil Jain said.

The township 'Ramprastha City' will comprise row houses, plots, villas, plotted colonies and independent floors.

The townships would have more than 4,000 plots, apart from other infrastructure facilities such as shopping malls, hospitals and schools.

"We launched about 200 plots last week at Rs 66,000 per square yard. The rest will be offered in various phases," Jain said.

Asked about the investment required to develop these townships, he said: "It would be around Rs 1,000 crore, excluding land cost. The investments would be funded through internal accruals".

US-based investment firm Clearwater Capital Partners had invested about Rs 100 crore in one of the townships, he added.

Ramprastha Group has a land bank of about 1,500 acres in Gurgaon, which it plans to develop over the next 10 years. The company also has presence in Ghaziabad, where it has delivered over 10 projects.

"At present, we are focusing on developments in Gurgaon. We are developing 6,000 apartments in seven group housing projects, all in Gurgaon," Jain said.

The company targets to deliver 1,500 units by March 2014 and another 1,000 units by March 2015.

The construction is outsourced but layouts, elevations and designing of projects is done in-house, he said.

"We are in talks with 2-3 global as well as domestic school-chains for the township," Jain said.

At present, the company has an annual turnover of about Rs 600 crore.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/ramprastha-to-invest-rs-1000-crore-in-two-townships-in-gurgaon/articleshow/22888680.cms

Tips for NRIs investing in commercial property in India

For Non Resident Indians (NRIs) looking at investing in Indian property today, the task is challenging. On one hand, with the rupee touching all time lows against the dollar, it appears to be a great time to remit funds to India for investment. However, on the other hand, with India's growth story looking bleak, the prospect for high returns seems an uphill task. For Non Resident Indians with big budgets and who have the appetite for some serious real estate investing, here's an option you might want to consider.

If you are keenly looking at investing in property in India, consider commercial spaces. "Today, NRI's are buying commercial properties for investment. Of course, HNIs also continue to plough huge amounts of money into high-ticket commercial properties in the quest for yield. Private bankers and wealth management firms confirm that their clients have actively started investing in commercial properties after staying away in 2009 and 2010. These investors have bought into commercial properties because they seek assets that can protect their portfolios from inflation and stock market volatility. The possibility of diversifying your portfolio, the sheer pride of ownership and the benefits of the longer leases that typify commercial tenants are the other reasons why an investor should look at commercial real estate investing" says Ramesh Nair, COO - Operations, Jones Lang La Salle.

So if you are looking at commercial property, here are some tips that might help you.

Location

"Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets which have or will have high vacancies," Nair says. NRIs must ensure that the economy, job market and population growth in the market is healthy.

"Today Bangalore and Mumbai offer the best investment opportunities for commercial," he adds.

Type of property

There are different kinds of commercial properties that are available. The popular ones are retail and office spaces. "Till a few years ago, only large units were available in both, making it difficult for a small investor to invest. However, there has been a change and smaller spaces are becoming available," says Pankaj Kapoor, Founder and Managing Director at Liases Foras Real Estate Rating & Research Pvt Ltd.

"Many developers, especially in cities such as Mumbai, are today offering smaller units of space (as small as 500-1,500 square feet) in Grade A buildings. Investors looking at retail space can now consider a multitude of affordable options in free-standing high street outlets or shops in malls," Nair says.

In fact, if you are looking at buying retail space, Nair says it is advisable to look at high street rather than a mall as a strata sold mall is a recipe for disaster. In a strata sale model, shops in a mall are pre-sold to individual investors. The developer thus restricts himself to selling a store as a unit and investor can hunt for a tenant. The problem arises because the model has no control over trade and tenant mix and there is no cohesiveness to the mall to attract customers.

Out lay and expected returns

Experts suggest that the minimum budget you should have in mind for a commercial investment is Rs 3-4 crore.
Kapoor pegs the rental yield from commercial properties at 12%. Rental yield is nothing but the annual rent divided by the property value. "Often, buyers tend to ignore rental yield and instead focus only on capital appreciation. However, rental yield is a very important parameter as it represents productivity of the price. When you buy a commercial property, make sure that you can get a rental yield of at least 11-12%. An yield of less than that means the property is overvalued," Kapoor explains.

According to Nair you can expect returns of 10-11% per annum from commercial investment. "Remember, you do not only make a profit on the sale of appreciated commercial property - the rental cash flows of a well-located office or shop space are considerable. Unlike with a residential property, the income that can be generated from commercial property is what determines its value. In other words, the capitalisation rate is actually the measure of the demand for the property. For those who do their homework well, investing in commercial property is a high-adrenaline and high-returns game," he says.

Due diligence

Like any other property purchase, commercial real estate investing too calls for a fair share of due diligence.

Check the developer credentials, potential for infrastructure development, access to public transport and quality of property management in the project. If you are investing in a retail store, consider the frontage, foot-fall and the dynamics of the adjoining catchment

"If you are an investor looking at an income producing office asset, look at the break-up of cash flows, the vacancy factor, expenses such as maintenance, property tax and building insurance, lease term, lock-in period and expiry dates, long-term capital appreciation potential, and refurbishment, refinancing and repositioning potential," Nair adds.

Builders at private lenders’ mercy as demand falls, forced to pay interest rates as high as 42%

NEW DELHI | BANGALORE: The stress among real estate developers is now showing clearly. Private money lenders are back in demand with small and mid-sized real estate developers picking up short-term money at interest rates as high as 42% a year to avoid the prospect of reducing property prices.

With home sales dropping and banks being picky about lending to the sector, many real estate developers are facing a liquidity crunch, which would eventually force them to reduce prices to book sales. This, they fear, could induce a downward spiral in property prices.

According to the National Housing Bank's residential housing index, Residex, 22 of the 26 cities it tracks have already seen a marginal decline in home prices in the April to June quarter. A recent report by property research firm Liases Foras puts the cumulative nationwide unsold inventory at 670 million sq ft, or around 6 lakh apartments, putting further pressure on real estate developers.

"Raising money even at exorbitant rates, developers hope, will help them fend off this crisis situation and keep prices steady till the economy picks up," says Ambar Maheshwari, managing director of corporate finance at property consultancy Jones Lang LaSalle.

Recently a Noida-based developer who had managed to sell only 30% in his housing project and needed money to pay some government charges and continue construction, borrowed Rs 20 crore from a local money lender at 4% a month for a few months and a collateral that was at least twice the value of the loan.

If he hadn't, the only option for him would have been to covertly sell some apartments at a discount and continue construction. Since he borrowed, he was able to reach a certain construction milestone after which construction-linked payments of his existing customers came in. A small Chennai-based builder, who did not wish to be named, says the market is very tight and even raising Rs 30 crore from banks and PE funds is difficult today for a small developer. "This is where money lenders come in, even though they charge us steeply."

When a developer does not have enough money to continue construction, the first impact is that existing buyers stop paying installments, explains Anckur Srivasttava, chairman of GenReal Property Advisers. "He then has no option but to cut prices or go for such expensive money," he adds.

While developers of some repute are able to raise money at 2-3% a month, the smaller ones are even paying close to 4% a month with greater collateral.

The desperation level, of course, varies from developer to developer which is being seen as an opportunity by several HNIs, exporters and diamond merchants, entrepreneurs and family offices.

Take the case of Rajesh Mehta, chairman of Bangalore-based Rajesh Exports, one of India's biggest gems and jewellery exporter — he has invested close to Rs 700 crore in such transactions.

"We are seeing huge pain in the market but are very selective in who we work with. There's demand for such money even from the best of developers," says Mehta, who has lent to mostly Bangalore-based developers at interest rates in the 2.5% to 3.5% a month range.

The former owners of Patni Computers that was sold to Nasdaq-listed IT services company iGate for $1.2-billion (Rs 5,450 crore) at that time have been investing their money in different spheres that includes buying completed real estate assets and also lending to real estate companies.

They recently lent to a Bangalore-based developer at an interest rate in the 20-25% a year range. "There are very few cashrich developers today. All others are looking for money. When we lend, we look at the builders' reputation, his ability to actually complete the project and the quality of the security he is offering," says Dinesh Maheshwari, who heads such investments for some of the former owners of Patni.

A Delhi-based exporter, who did not wish to be named, says he and his other HNI friends have set up a consortium of sorts that has been lending to several real estate developers in the region. "Interest rates might be steep, but today they are willing to pay," he says. And this demand for short-term money is only set to grow louder.

As elections draw closer, a lot of the money that has been put in by politicians and people around them is being pulled out of real estate companies, says Srivasttava, who is currently helping five developers across the country raise money from non-banking finance companies and some money lenders as well.

"Developers will get more desperate for money going forward as the situation is not likely to improve till after the elections," he says.

Amar Merani, chief executive officer of NBFC Xander Finance, says his company receives 10-12 requests from developers who are looking for money every month. "They are looking at raising anywhere between Rs 40 crore and Rs 250 crore to tide over temporary cash flow issues and refinancing," he says.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/builders-at-private-lenders-mercy-as-demand-falls-forced-to-pay-interest-rates-as-high-as-42/articleshow/22826946.cms?intenttarget=no

Mahindra Lifespaces, GE Shipping in dispute with locals over land ownership

MUMBAI: A tussle for control over unused land with development potential in a residential project has erupted between Mahindra Lifespaces Developers, GE Shipping and existing residents of their project, Great Eastern Gardens, in a suburb of Mumbai, a development that can have repercussions for builders and home buyers. 

Around 400 residents of the complex are seeking control of the undeveloped land worth over Rs 800 crore inside the complex. The residents say that the vacant plot has a total development potential of 7.5-8.0 lakh sq ft and are objecting to further development by the developers.

GE Shipping and Mahindra, however, claim that they are the rightful owners of the land parcel and will go ahead with their plan of constructing two more buildings. But the irate residents say that the developer had not informed them about their proposed plan when they booked their apartments and had not made a complete disclosure of the development potentiality. Therefore, they argued, that the proposed buildings are not part of the original layout. The complex includes six residential buildings comprising 4 condominiums. 

"Residents of Great Eastern Gardens are entitled to balance (of) FSI, TDR and additional FSI as the property has already been submitted under the provisions of Maharashtra Apartments Ownership Act, 1970, by declaration and supplemental declarations, the last of such supplemental declaration being as far back as in December 2008 and, moreover, since GESCO failed to convey the land within four months of last supplemental declaration," said Savitri Dadhich, a resident of the Great Eastern Gardens and partner at Dastur Dadhich & Kalambi, Advocates & Solicitors.

But Mahindra Lifespaces and GE Shipping stuck to their guns, saying Great Eastern Gardens has been developed in a phased manner, in line with the development plan that was envisaged at the start of the project.

"This fact has been categorically disclosed in the relevant agreements with the flat purchasers that the project is being developed phase-wise and, further, that GE Shipping as owners have the right to construct the said buildings. Therefore, the proposed construction is in line with the development plans and is not a new addition to the project," GE Shipping and Mahindra Lifespaces said in their response to ET's email query. The civic authority has also granted the commencement certificate for the proposed construction, the response said, while adding that the claims made by the residents have no legal validity.

Residents of the complex, however, have a different take. According to Dadhich, the layout plans for construction on the entire property have not been disclosed in the declaration/supplemental declaration of AB and CD condominiums. Most of the residents of the GE complex were not informed about future development plans.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/mahindra-lifespaces-ge-shipping-in-dispute-with-locals-over-land-ownership/articleshow/22962293.cms

Sea-facing Mumbai duplex goes at Rs 1.35L/sq ft

MUMBAI: Whatever the general market trend, Mumbai's realty market does not stop creating new records. In the costliest apartment deal in the country, a sea-facing duplex in a Malabar Hill building was recently sold for Rs 57 crore or roughly Rs 1.35 lakh a sq ft.

The duplex in the tony Darshan Apartments on Mount Pleasant Road was sold last month to the Bulchandanis, a prominent business family with interests in software, aluminium and real estate. They own three other duplexes in the same complex.

The family's latest acquisition (flat number 111) sits on the 9th, 10th and 11th floors of the complex's 'A' wing, has four bedrooms and is spread over 3,510 sq ft. It comes with attached terraces of 1,386 sq ft on the 11th and 12th floors and a covered garage of about 700 sq ft.

According to property documents, the apartment was previously owned by the sisters Mana and Shyama Sarabhai. It was bequeathed to them by their late father Gautam Sarabhai. Gautam, who died in 1995, was the brother of Vikram Sarabhai, the founder of India's space programme.

Legal sources close to the Bulchandani family confirmed the transaction. The Sarabhais could not be contacted for comment.

Located near the chief minister's residence, Darshan Apartments was the first residential complex in the city where duplexes were constructed. Sitting on an incline, it has 42 flats offering a view of the Arabian Sea. The complex was built on a 6,752.5-sq-m plot originally leased by Gautam to the Malabar Hill Cooperative Housing Society for 21 years. The society purchased the land from Gautam in 1971.

The recent Darshan Apartments deal overshadowed the record created by the glassware company Borosil this July when it paid Rs 21 crore (or roughly Rs 1.23 lakh per sq ft) for a sea-facing flat on the 10th floor of Samudra Mahal in Worli. It also eclipsed the Rs 1.2 lakh per sq ft paid by Jindal Drugs for a luxury apartment in Tahnee Heights on Nepean Sea Road in June 2012.

Property experts said the latest transaction was a one-off and did not reflect general market sentiments.

"Apartments in landmark south Mumbai buildings will continue to fetch premium rates because of their location and upkeep," said an expert. "There are not many buildings of such quality. So, they fetch higher premium than many new developments."

source:- http://economictimes.indiatimes.com/markets/real-estate/news/sea-facing-mumbai-duplex-goes-at-rs-1-35l/sq-ft/articleshow/22972721.cms

Basant Lok, Ansal Plaza: Once tony marketplaces, now falling on hard times

Once tony marketplaces where people loved to shop or watch movies, Basant Lok, Anupam complex and Ansal Plaza have fallen on hard times, edged out by malls. Ruhi Bhasin finds out what went wrong and what these markets are doing to survive

Before the advent of malls, Delhi’s brand and fashion-conscious flocked to Basant Lok or Anupam complex, Saket, to shop or just catch a movie at PVR Priya or PVR Anupam. Over the years, however, the footfalls in these once-tony marketplaces have drastically fallen, especially during summer, as people nowadays prefer spic-and-span, air-conditioned malls over markets with deteriorating infrastructure. ‘To-let’ signs are visible in both these markets, which look deserted during weekdays. But the market associations of both Basant Lok and Anupam complex, Saket, are optimistic, saying if the markets near the Ansal Plaza mall can survive, there is still hope for them. The Ansal Plaza mall might have been one of the first to open in Delhi but, much like these markets, has seen a steady decline over the years with office spaces taking over merchandise shops.

Basant lok

Once counted among the upmarket shopping addresses in the city, the 40-year-old Basant Lok community centre has seen a 50 per cent decline in footfalls in the last few years, the market association admits. The reasons attributed for this range from collapsing infrastructure to opening of three malls in nearby Vasant Kunj. Punjabi By Nature, a popular restaurant here, has shut down and has put up boards announcing its relocation to Ambience Mall, Vasant Kunj. Manchester United Cafe also shut down some time ago. ‘To-let’ signs can be seen all over the market.

“The high-street concept is still a viable business model. South Extension survived despite Ansal Plaza. The problem here is complete civic apathy. Right from sweeping of the marketplace to ensuring proper street-lighting, everything is taken care of by the market association. There has been talk of redevelopment of this community centre but nothing has happened so far. The footfalls have gone down by 50 per cent,” Kapil Das, owner of Citi Shoppe and a member of the market association,says.
He claims earlier people from Gurgaon used to throng the market but all that has changed with malls mushrooming in Gurgaon and surrounding areas.

Broken walking plazas and unkempt common areas have taken the sheen off this once high-end market, which was also popular among students of South Campus.

According to the market association, while shops have shut down, others, among them pubs, have taken their place. “While five-six shops have shut, retail outlets have opened here. Even pubs, because of which unwanted elements hang around the market, which is a problem,” Das says.

On the competition from surrounding malls, Das believes each option — mall and high-street — has its advantages and disadvantages. “In high-street, you get personalised service while shops in malls are staff operated. On the other hand, the air-conditioning in malls makes it a more appealing option during summers,” he adds.

The president of the market association believes while malls have affected business, high-streets will bounce back. “In a few years, high-streets will soon be back in business. We have seen this in other parts of the world also,” Harish Jagwani says.
The Delhi Development Authority (DDA) is responsible for the redevelopment of the centre. The agency claims a plan to redevelop the complex is still under consideration.
“It will require clearances from DDA’s screening committee before it reaches the implementation stage,” a DDA official says.
Anupam Complex, Saket
The Anupam complex, like Basant Lok, has taken a hit due to competition from malls that have opened in Saket. But it is slowly trying to re-invent itself to survive. “Our customer base shrinks in summer when people prefer the air-conditioned malls over high-street markets but in winter, business is back to normal. The market has transformed over the years. The niche shops have shut down and shifted to the malls, which attract that kind of crowd,” Bhagwan Das, owner of Lebanese Point and vice-president of the market association, says.
While many shops have closed, new ones have opened. “It has become more ofa restaurant and coffee shop market,”
Das says.
Little China, a restaurant which opened last week, used to be a shoe shop. “People from surrounding areas basically come to the market to eat. They like to grab a bite before a movie. We also get a lot of home delivery orders. A shoe shop used to operate from this space earlier but this isn’t the kind of market where people come to shop anymore so it shut down,” Jordan, manager of Little China, says.
Chutney D’lite, a small joint which has been functioning from this complex for the past 10 years, admits there has been a substantial fall in footfalls and business has taken a dip.

“There is talk of Anupam Cinema being revamped. Once that happens things might improve,” Das says.

Unlike in Basant Lok, traders say civic agencies are making efforts to keep the place neat and clean. “The lighting and general upkeep have improved. Pavements have been re-laid. While improvement on this front is slow, at least it’s happening,” a trader says.
But broken fountains and a general lack of cleanliness is still visible all around. Once frequented by rich customers, traders say now the address only draws middle-class crowd, especially from nearby areas.
Ansal Plaza

It was one of the first malls to open in Delhi. Its prime location in the heart of South Delhi made it an instant hit, especially with cultural events organised in its amphitheatre. But over the years, like Basant Lok and Anupam complex, people have given this mall a miss altogether. With several merchandise and retail stores shutting down, the mall now has offices functioning out of it. Shopkeepers claim they are struggling to make ends meet.

Gagandeep Singh, Chief Operating Officer (malls), Ansal API, says, “Ansal Plaza was launched in 1999 and enjoyed the status of being the most successful mall for almost a decade. Every product has a life-cycle.

With more malls opening in the vicinity, there is definitely a rationalisation of footfalls,” he says.
Office space seems to outrun the number of merchandise shops in the mall. The ground and first floors still have Shoppers Stop, McDonald’s, Meena Bazaar, Lacoste, Red Tape etc., besides two liquor shops. By evening, with most office-goers leaving, the mall wears an empty look. “The mall

source:- http://www.financialexpress.com/news/basant-lok-ansal-plaza-once-tony-marketplaces-now-falling-on-hard-times/1171700/3

RBI repo rate hike: Indian realty developers unhappy with Raghuram Rajan, say will impact housing

Expressing disappointment over RBI Governor Raghuram Rajan's decision to hike the key policy rate, real estate developers said this would lead to increase in finance cost and also affect housing demand during the festive season.

"There was no need to increase the repo rate at this juncture. It will hurt the growth sentiment further," DLF Chief Financial Officer (CFO) Ashok Tyagi told PTI.

Asked about impact on real estate, Tyagi said the overall sentiment would remain cautious, but he believed that good products from credible developers on good locations would always have a demand.

RBI today raised the short-term policy rate by 0.25 per cent to keep "worrisome" inflation under check, a move that may increase EMIs for home and auto loans in the medium term.

Commenting on the policy, Parsvnath Developers Pradeep Jain said: "It is highly disappointing to see such a signal from RBI. Though increasing Repo by 25 bps (0.25 per cent) may curb inflation marginally or may hold Rupee for a while, it is going to impact market sentiments significantly".

The RBI had a golden chance to bring positivity in an otherwise sluggish economy, but this increase in rates would affect growth prospects, he added.

"It is not a good signal for the industry which is about to enter the festive season. Banks have already started raising their rates," Jain said.

Housing demand generally goes up during the festival season and developers major part of sales take place during this period.
Global property consultant Jones Lang LaSalle India Chairman and Country Head Anuj Puri said the hike in repo rate would lead to increase in developers' finance cost and affect their profit margin.

"In the current monetary policy, RBI has increased the repo rate by 25 bps, which will increase the borrowing cost. However, with reduction of MSF by 75 bps (0.75 per cent) and reduction of minimum daily maintenance of CRR from 99 per cent to 95 per cent, it has relaxed tightening norms," Puri said.

Increase in finance cost along with rising cost of construction and the already challenging economic scenario is expected to affect profit margins of developers, he added.

industry has reason to be somewhat disappointed on the increase in borrowing cost, RBI has made provisions for increased liquidity in the system," he said.

Terming RBI's decision as "unexpected", Griha Pravesh Buildteck CMD Abhay Kumar said the move would disappoint the banking industry and consumers who are struggling under the burden of high Equated Monthly Installments (EMIs).

"It would also dampen sentiments ahead of the peak festival season, when developers expect the demand for houses to go up. This is going to hurt both buyers as well as the developers," Kumar said.

Reacting to the RBI policy, real estate developers' apex body CREDAI's Chairman Lalit Kumar Jain said: "It is equally important for the RBI to promote economic growth by encouraging real estate and infrastructure development even as the new Governor has inflation on his mind."

RBI's move to raise repo rate would negatively impact sentiments, ultimately affecting sales, he added.
Realtors' body NAREDCO President Navin Raheja said: "All industries including real estate are struggling and facing huge liquidity crunch, high input costs and slow sales. Hike in repo rates will again lead to increase in borrowing cost and will result into further increase in input cost."

Tata Housing MD & CEO Brotin Banerjee said that banks can be expected to increase interest rates which will impact consumer sentiment in the real estate industry.

"If not through the monetary policy, the industry needs to be provided immediate relief through other fiscal measures. The government needs to have policies to drive real estate growth as this is the second largest contributor to our GDP," Banerjee demanded.

Assotech MD Sanjeev Srivastva said: "Looking at current situation of our economy, we were not hoping any rate cut in repo rate, but increasing repo rate is a bit surprising."

Expressing similar views, Ramprastha Group CEO Nikhil Jain said that the company expected a significant change in policy that would encourage borrowers and investors to lend money. The hike in repo rate would escalate project cost.
KDP Infrastructures Executive Director Anuj Goel said that the move is aimed at reducing inflation. "We need to closely watch how fast this could bring down inflation and ensure industry growth."


Home loans would be costlier after this move, having a direct bearing on the aspiring buyers as lot many people will refrain from buying homes, said Pankaj Jain, Director of Noida-based realty firm K World Group.

sourcE:- http://www.financialexpress.com/news/rbi-repo-rate-hike-indian-realty-developers-unhappy-with-raghuram-rajan-say-will-impact-housing/1171835/3

Real estate: Back to freebies this festive season

The RBI Notification Restricting Loans Under 20:80 Scheme Has Developers Reworking Strategy To Woo Buyers Without Reducing Prices. Some Are Coming Up With New Variants While Others Are Banking On Gifts And Freebies

The Just-concluded Ganesh Festival Has Not Shown Much Movement In Mumbai’s Real Estate Market. This Is Usually A Period When Buying Activity Starts And Is A Harbinger For The Turn The Market Would Take During Dussehra And Diwali, The ‘festive Season’ For Realty Players. But Pushed Into A Corner Due To The Slowdown, Developers Are Working Out New Schemes And Offers And Also Handing Out Gifts And Freebies.

A Recent Report By Jones Lang Lasalle (Jll) India Shows That Mumbai City Alone Has Unsold Inventory That Would Take 48 Months To Clear At Current Absorption Levels, While For Delhi-ncr It Is 21 Months. For Pune It Stretches 14 Months.

Given The Staggering Numbers, Developers Have Also Been Hit Hard By A Surprise Move From The Reserve Bank Of India That In A Notification On September 3, Asked Banks To Restrict Lending Under The 20:80 Scheme For Under-construction Projects. This Has Led To All Calculations Going Topsy-turvy.

“under The Notification, The Central Bank Has Particularly Advised Banks Against Upfront Disbursal Of A Significant Portion Of The Loan Amount To The Developer Without Linking The Same To The Stages Of Construction. Rbi Has Tightened The Norms To Protect The Interests Of Buyers And Contain The Fallout Of Such Innovative Housing Financing Schemes. It Feels That Any Default By Builders Could Affect The Credit Profile Of The Borrower And Expose Banks To Higher Npas,” Said Research Note From Crisil.
The Scheme
As Per The Scheme, A Tripartite Agreement Was Signed Between The Bank, The Developer And The Home Buyer Who Would Book By Paying 20 Per Cent Of The Total Cost. The Bank Would Give Almost 80 Per Cent Of The Remaining Amount To The Developer On Behalf Of The Buyer. The Developer Agreed To Pay The Interest And Some Principal Amount For A Stated Period Of Say 2 Years And On Possession, The Entire Amount Would Be Paid Back To The Developer By The Buyer.
“The problem was that the developers were using the credit line of the home buyer and were getting the funds as home loan at much cheaper rate of 10 to 12 per cent interest instead of construction finance which is usually given at 16 to 18 per cent,” said M Ganeshan, a buyer who has booked a flat in a township on the outskirts of Mumbai.

This is similar to the 10/90 scheme, launched in 2009-10 by some developers and banned subsequently. This was an advance disbursement facility scheme wherein 100 per cent money was disbursed irrespective of the progress of the project. These had created many problems and a speculative trend back then.
Over the period, several developers diverted funds and delayed projects for which the loans were disbursed. Banks were in trouble recovering the dues as committed in the agreement. The buyers, on the other hand, were forced to repay after the particular period even without getting possession as per the complicated clauses of the agreement. When they resisted, legal issues cropped up. Projects were fast becoming non-performing assets.
“It was alleged that in the competitive environment, banks went overboard and disguised construction finance as mortgage loans to make their balance sheets look brighter. They looked the other way when the buyer was being grilled on the clauses of the agreement by the developer till the banks began to feel the brunt of it themselves. In some cases, they disbursed almost entire 80 per cent upfront so that they could start levying interest immediately,” said ND Mehta, a property consultant.

An industry source said that developers, who used this scheme then and now, are not small players who would have financing problems. These are big players with good holding capacities who exploited the banks and the buyers and made money and credited the consequences to both. This lot would be the most affected if the supply of cheaper funds suddenly stops.

Issues unresolved

There are some issues that are as yet unclear. One, the notification — as of now — applies to banks and not to housing finance companies. When contacted, a spokesperson


source:- http://www.financialexpress.com/news/real-estate-back-to-freebies-this-festive-season/1172139/2


The anatomy of a safe room inside your home?

As a concept, panic or safe rooms date back to ancient Egypt. Inside your house, a room like this can be used to protect you and your family from harm. While some think of them as money pits to placate the fears of rich and the paranoid, modern-day panic rooms are becoming increasingly popular among those desiring security in a dangerous world. If constructed properly, they are the unparalleled in providing safety. Hitesh Raj Bhagat tells you how: 

Ventilation and HVAC 

Ideally, the room should be air tight - no air gaps around the doors (construction specialists will know how to do this). This also means that staying for longer periods requires a system to keep the room warm/cool and to re-circulate fresh air. 

Supplies Keep enough canned food, bottled water and some clothes handy. Other essential supplies include items like fl ashlights, fi rst aid equipment and basic self defence equipment. 

Panic gear 

Here's where costs can skyrocket; oxygen masks, oxygen tanks, night vision goggles, fl ares and weapons can all be bought for a fair chunk of cash. 

Communication 

If you're locked in, you need a way to call for help. In a panic situation, you may not have time to grab your cellphone, so a dedicated landline phone is essential. 

Sanitation 

Small chemical toilets are ideal for this purpose. If the panic room is being made while a house is being constructed, a small toilet can be built in too.
The anatomy of a safe room inside your home?
Walls and construction 

Thick concrete walls are a must for a room like this - at least 8-inches thick, but they can also go up to 2 feet. Walls can also be lined with Kevlar and/or lead plates. 

Grades of panic room 

Is the room designed to only protect against intruders? What about storms, fl oods, terrorist attacks, nuclear blasts or chemical warfare? Depending on what the room is designed to do and for how long, a specialist needs to be Illustration: ARINDAM called to design and equip the room.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/the-anatomy-of-a-safe-room-inside-your-home/articleshow/22561726.cms