Sudden Burst of Residential Activity in an Overlooked Slice of TriBeCa

The area of lower Broadway south of Canal Street in Manhattan has long been characterized by nondescript discount stores and lunchtime counters packed with city workers. It has been mostly ignored by the wave of gentrification to the west that has flooded TriBeCa over the last decade, bringing with it baby carriages, designer boutiques and restaurants.

“Along Broadway has always been the funkier part of TriBeCa where you can still find artists,” said Erik Torkells, the editor of the Tribeca Citizen, a neighborhood Web site. “People call it Chibeca because of its proximity to Chinatown.”

This may be about to change. On a four-block stretch of Broadway, between Worth and Walker Streets, nine new residential projects are in the works, bringing more than 430 new condominium units to the area. The burst in activity is largely because of a booming condominium market and insatiable demand for downtown luxury apartments that is rapidly encroaching on commercial spaces and transforming old office towers.

In the second quarter this year, the average condominium price in TriBeCa reached $1,583 a square foot, nearly 17 percent higher than the $1,354 a square foot posted last year during the similar period, according to data from the appraisal firm Miller Samuel. The median sales price in the neighborhood was $2.75 million in the second quarter, a significant premium over the $1.25 million for all of Manhattan, according to the firm. Land prices for development sites have followed, averaging as much as $500 a buildable square foot in TriBeCa, up from just $300 a buildable square foot two years ago, brokers said.

“With prices approaching $2,000 a square foot or better in TriBeCa, it is encouraging the expansion of the core of the neighborhood to adjacent areas like Broadway,” said Daniel Fasulo, a managing director at Real Capital Analytics, a research firm. “The amount of deal-making in the neighborhood is astounding.”

By the start of winter, the first buyers will move in to 93 Worth Street, a 92-unit condominium that features a dog-washing station and a roof-deck terrace. The 18-story building has had swift demand from buyers, with just nine apartments remaining, including four penthouses that are yet to be put on the market. The average sale price is $1,700 a square foot, according to Eldad Blaustein, the chief executive of IGI USA, the building’s developer.

“This is a brand-new Broadway corridor,” said Doron Zwickel, an associate real estate broker at Core, which is marketing the building. “Historically, this hasn’t been prime TriBeCa, but it is becoming more desirable.”

One draw has actually been that the building is outside the core of the neighborhood, and not in the flood zone that saw so much damage during Hurricane Sandy last year. “After the storm, we got a lot of interest from people close to the water who wanted to be in the neighborhood but didn’t want to have the risks,” Mr. Zwickel said.

On Leonard Street one block to the south, two buildings are rising: 350 Broadway, a 12-story former office tower, is being converted into a 66-unit condominium. Bizzi & Partners Development, which built the Setai Fifth Avenue in Midtown, began sales in July, and the building, called 101 Leonard, is more than 60 percent sold. At 346 Broadway, the Miami-based developer Don Peebles is planning a $350 million renovation to convert the building, which was used by the New York City Criminal Court, into roughly 200 condominium units and a hotel. It acquired the 13-story building in March from the City of New York for $160 million.

At Broadway and Franklin Street, the developer El Ad is planning the Franklin, a 53-unit condo complex with amenities like a children’s playroom and a rooftop pool. The building has gone through a number of failed conversion plans, perhaps most notoriously in 2006, when the Dutch architect Ben van Berkel designed a 20-story apartment building, with glass elevators and a facade of black metal bands. Those plans fell apart during the recession, and El Ad eventually acquired the site.
The Franklin “is the fastest-selling building I’ve ever had,” said Richard Cantor, a principal at the brokerage firm Cantor Pecorella, which is overseeing the marketing. Since sales began in May, 48 of the 53 apartments are in contract. Originally, the units were priced at $1,350 a square foot, but they were later raised to $1,550 and then $1,650. “Now, by the time we sell out, the prices will be closer to $1,800 a foot; we just sold the largest penthouse for $10 million, or just under $2,700 a foot,” Mr. Cantor said.

There are also a number of small boutique buildings in the works. The Keystone Group acquired 391 Broadway, a commercial building, eight months ago and is converting it into four residential floor-through lofts with retail space on the ground floor. “With TriBeCa the way it is, there is not enough product for all of the demand, so the neighborhood keeps being pushed eastward,” said Daniel Martin, a managing director at Keystone Group. It hopes to complete the project by May.

At 372 Broadway, which is being renamed 6 Cortlandt Alley for the street it abuts, developers are getting approvals to build a five-unit condominium, with sales beginning in the spring. At 361 Broadway, the Japanese architect Shigeru Ban is designing 13 condominium units, including a set of glass duplex penthouses that will be affixed atop the six-story cast-iron building. The plans were approved last year, and construction is set to begin as early as next month, said Dean Maltz, the building’s executive architect based in New York.

Another possible development could come at 360 Broadway, where the real estate investor Waterbridge Capital recently acquired the building for $23 million. Calls to the chief executive, Joel Schreiber, were not returned.

“I’ve done a number of sales on the SoHo side of Broadway, and it seems to me a very natural progression to develop the area below Canal Street,” said Susan Wires, a broker at the brokerage firm Stribling & Associates, which is marketing 6 Cortlandt Alley with her partner, Leila Yusuf. “So many of the buildings that are coming to this area are large-scale, but ours will be really intimate and boutique, something that is missing in the marketplace right now.”

With such a strong condominium market, the land prices for development sites have also skyrocketed. “If you compare where prices are today from 2010, it has gone way up,” said Nick Petkoff, the director of sales at the brokerage firm Massey Knakal Realty Services.

When Mr. Blaustein acquired 93 Worth Street in 2010, for example, he paid roughly $300 a buildable square foot. “Now, if you are buying buildings to convert, they are costing $500 to $550 a square foot,” he said. “We would love to buy more buildings in the neighborhood, but the competition has become fierce.”

The demand for development sites is a key reason that the owners of 396 Broadway have put the vacant building on the market for $37 million, rather then push ahead with plans to convert it into a 50-unit rental building. “We have approved plans for a residential conversion, and an alternative plan for a hotel,” said Gene Kaufman, the project’s architect. “But the owners right now see that the property is a lot more valuable than it once was, and so it is reasonable that they pause and rethink it, given that the circumstances have improved for the better.”

But while there has been many residential developments, retail activity in the neighborhood remains lackluster. “Retail hasn’t happened yet, it is all very embryonic,” said Roger E. Eulau, an executive managing director at the Lansco Corporation, a retail brokerage firm. Rents are around $100 to $150 a square foot, compared with as much as $1,000 a square foot on Broadway in SoHo, he said.

Still, “we feel that Broadway is going to be a natural gateway that links the Fulton Street Transit hub and the World Trade Center to SoHo, it is a natural thoroughfare for retail,” said Mr. Martin of the Keystone Group. “We are very bullish about this neighborhood’s future.”

source:- http://www.nytimes.com/2013/08/28/realestate/commercial/a-sudden-burst-of-residential-activity-in-tribeca.html?pagewanted=2&_r=0

http://www.sreindia.in/subvention-scheme-gurgaon.php

Credai against linking of home loans to construction stages

MUMBAI: Criticising the Reserve Bank's decision to link disbursal of home loans to stages of construction, real estate apex body Credai said the move will harm developer sentiment and disturb business plans.

RBI today asked banks to link the disbursal of home loans to stages of construction to protect the interests of buyers and contain the fallout of "innovative" housing financing schemes.

It has directed banks that upfront disbursal "should not be made in cases of incomplete/under-construction/ green field housing projects".

Confederation of Real Estate Developers' Associations chairman Lalit Kumar Jain said: "Housing finance institutions or banks normally safeguard their interest while devising such instruments. Abruptly issuing such circulars, advising bank against established practices only harm the sentiment and disrupts business plans. This will create setback for projects, affecting the end consumers."

The notification follows the introduction by some banks of "innovative housing loan schemes" in association with developers or builders, where upfront disbursal of housing loans is made to builders without being linked to the various stages of construction.

Also, under such schemes, the interest/EMI on the housing loan availed of by the individual borrower is serviced by the builder during the construction period. These loan products, the RBI said, are popularly known by names such as 80:20 and 75:25 schemes.

RBI said such home loan products are likely to expose banks and their borrowers to additional risks.

"RBI should have consulted stakeholders before issuing such circulars on disbanding current practices. In the past, the RBI circulars have resulted in reversal of good market sentiments affecting economy and concerning housing sector," he added.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/credai-against-linking-of-home-loans-to-construction-stages/articleshow/22264351.cms

CCEA clears 2 proposals for housing for the poor

NEW DELHI: Government today cleared two proposals for providing affordable housing to the urban poor and provide them with self-employment and skilled wage employment opportunities to help reduce poverty. 

The Cabinet Committee on Economic Affairs(CCEA) today approved the launch of Rajiv Awas Yojana (RAY) as a centrally- sponsored scheme (CSS) to be implemented in mission mode during 2013-2022 and also continuation of Affordable Housing in Partnership Scheme (AHP) as part of RAY with amendments. 

The CCEA also approved the proposal for restructuring of the centrally-sponsored scheme of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in the 12th Plan and as the National Urban Livelihoods Mission (NULM) with an allocation of about Rs 6,405 crore. 

The NULM Mission is to reduce poverty and vulnerability of urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities, resulting in an appreciable improvement in their livelihoods on a sustainable basis through building strong grassroot-level institutions of the poor. 

The mission would also aim at providing shelter equipped with essential services to the urban homeless in a phased manner. It will also address livelihood concerns of urban street vendors by facilitating access to suitable spaces, institutional credit, social security and skills to urban street vendors for accessing emerging market opportunities. 

It was decided to continue the Interest Subsidy Scheme for Housing the Urban Poor and rechristen it as the Rajiv Rinn Yojana. This will be implemented as a stand-alone central sector scheme. The Planning Commission has allocated Rs 32,230 crore for RAY during the 12th Plan. 

The RAY will provide support to states/union territories and central government agencies for providing housing, including rental and transit housing, development/improvement of basic civic and social infrastructure and operation and maintenance of assets created under the scheme. RAY will cover all cities and towns, the selection of which will be made by the states in consultation with the Centre.

sourcehttp://economictimes.indiatimes.com/news/economy/policy/ccea-clears-2-proposals-for-housing-for-the-poor/articleshow/22267193.cms

New supplies, resellers to bring down home prices

BANGALORE/MUMBAI: If you have been waiting to buy a home, this could be your chance for some bargain hunting as nearly five lakh apartments are expected to be delivered this year, shaking up an already oversupplied home market and forcing investors to sell them in a hurry.

"The widening demand supply gap will help prices fall further," says Pankaj Kapoor, managing director of Liases Foras, a property research firm, which supplies market data to banks and industry.

ET reported on Monday that property prices have begun to soften around the country and builders have started to offer discounts as high as 10% in some cases. According to the National Housing Bank's (NHB) residential housing index Residex, 22 of the 26 cities it tracks have seen a decline in home prices between 1% and 5% in the April to June quarter.

While builders under pressure have started offering discounts, an even better opportunity is emerging in the secondary-resale market where over-leveraged investors who had picked up properties over the last few years are willing to offload their inventory at discounts as high as 30%.

The advantage for a home buyer is that several of these apartments that investors are selling in cities like Gurgaon, Noida, Mumbai, Bangalore and others, will be delivered in 2013, so the wait for your dream home could become much shorter.

Many investors who are already sitting on ready-to-move-in properties are also exiting at discounts for want of funds and the fear of a further correction.

Amit Bansal, who runs a chemicals business and has been investing his business surplus into real estate, sold a 2,400 sq ft apartment in Emaar MGF's Palm Terraces Select on Golf Road Extension in Gurgaon for Rs 8,300 sq ft fearing a drop in prices in the current market. Just a few months back he was getting offers of Rs 8,600 per sq ft for the same apartment.

For the end-user who bought the apartment, the price was a decent bargain, of over 40%, considering the developer's price is around Rs 12,000 per sq ft. For Bansal too, it was a more than profitable exit as he had invested at a much lower price point.

In Mumbai, an investor is selling an apartment in a project called Dheeraj Celestial in Bandra for Rs 55,000 per sq ft while the builder is selling it at Rs 70,000 per sq ft.

In south Kolkata's Topsia First lane, Mohammad Rafique bought a 1,100 sq ft apartment for Rs 2,500 per sq ft in 2007. While the developer's rate is Rs 4,500 per sq ft in the same project today, Rafique sold it for Rs 4,000 per sq ft.

In search of liquidity, Prabhakar D, who bought a property in Channasandra in the eastern periphery of Bangalore, is selling an apartment that he got for Rs 36 lakh for Rs 50 lakh. The market price of the apartment is around Rs 70 lakh. "The response has been overwhelming," says Prabhakar.
Such investors abound in cities across the country. While some want to exit fearing a price correction, others are hoping to create some liquidity for their struggling businesses and this is where end users who are still on the lookout for their dream homes could find their golden opportunity. For the buyer, such a property where construction is halfway through or where possession is due in the next few months brings down the risk.

"Several investors who have stretched themselves too thin are in exit mode and discounts in such cases could range anywhere between 20% and 30%. As the desperation level of the seller increases, so does the discount," says Atul Marwaha, principal consultant at Prime Options, a Gurgaon-based real estate brokerage firm.

The bounce back after the downturn in 2008-09 saw investor activity in markets like Gurgaon, Noida, Mumbai, Bangalore and Chennai peak and several investors bought multiple properties, sometimes over-leveraging themselves. While property prices rose in the last two years and several locations saw appreciation upwards of 50%, with the tide turning in the last few months, these investors are feeling the pinch.

Abhay Khemka of Khemka Investments and Properties in Gurgaon says these investors are getting more desperate by the day. Brokers say end-users today are a cautious lot, considering the state of the economy.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/new-supplies-resellers-to-bring-down-home-prices/articleshow/22273085.cms?curpg=2

What's the key to unlocking the door to your dream home?

Home ownership as the foundation of the American dream is built into our nation’s cultural DNA.

A recent survey from the National Association of Realtors (NAR) showed that owning a home is a high priority for 51 percent of renters. The idea of what a home is, however, varies widely from one person or family to the next. Some people want a traditional suburban home, surrounded by trees, in a quiet cul-de-sac, or perhaps they want a shingle-style house near the beach. Others may want a super-sleek modern condo in the red-hot center of their favorite city, while others want a cottage in the woods. Regardless of what their ideal home looks like, or where it’s located, the vast majority of people will need to borrow money in order to buy a home. In other words, they will need a mortgage.

There are many different types of mortgages, with various interest rates and terms. However, in practice, it comes down to making a monthly mortgage payment, which combines the principal (amount of the actual loan), interest, taxes and home insurance. In addition, the mortgage process also includes up-front fees and documents.

DOING YOUR 'HOME' WORK

While this process may seem overwhelming, according to TJ Freeborn, Mortgage Professional, Discover Home Loans, there are lots of on-line sources to help consumers understand their options. She says, “It’s smart for consumers to do their homework before they get started. Many people don’t. They should also talk with a trusted mortgage broker—either someone they know or a referral—to find out if they can get preapproved or prequalified and to find out how much house they can afford.”

To clarify, prequalification is the lender’s estimate of how much a consumer is eligible to borrow based on information about income, debt and other financial factors. It is not a guarantee. Preapproval is slightly different. It implies that a lender is ready to make a mortgage loan based on information and documentation.

THE NUTS AND BOLTS OF FINANCING

Ms. Freeborn cautions that “no major purchase takes place without due diligence” and the same holds true for getting a mortgage. One of the most important decisions is whether to get a fixed-rate or adjustable-rate mortgage (ARM). With a fixed-rate mortgage, monthly costs are fixed, whereas, with an ARM, the rate may change over time. An ARM generally starts with a lower rate than a fixed-rate mortgage, but it is designed to adjust periodically depending on market conditions. The initial term ranges from one to 10 years before the readjustments start. “It’s really important to know what your reset date is if you have an ARM. A mortgage broker can help walk you through what that reset could look like. ARMs are ideal for people who don’t plan to stay in a home long, especially if they plan to move out before the reset date,” says Ms. Freeborn.

It’s also important to know how much the entire loan will cost throughout the lifetime of the mortgage. The APR (annual percentage rate) represents the cost of the loan, including the interest rate and upfront fees.

Even though fixed-rate loans tend to have slightly higher interest rates, there is flexibility with terms. Again it comes back to the fact that the mortgage market is not one-size-fits-all. According to Ms. Freeborn, “In addition to 15- and 30-year terms for fixed-rate mortgages, conventional loans offer rates for 10- and 20-year periods as well.” She reiterates, “Every homeowner and every situation is unique.”

REFINANCING

When it comes to refinancing, the goal is to take an existing loan and refinance it into a lower interest rate or shorter loan term. Ms. Freeborn reminds consumers that you don’t have to refinance with the same person you got your mortgage from. A lot goes into choosing which person and institution to work with. Look for credible institutions with a good track record and reputation, and find out whether there are any rewards programs, such as a close-in-time guarantee for new mortgages, or in the case of refinancing, a welcome back bonus.

THE RIGHT TIME TO BUY IS NOW

Is there a right time to buy or refinance?  According to Frank Donnelly, Chairman, National Bankers Association, “A lot of times, people think that because rates have recently gone up that suddenly, it’s not a good time to buy, but the ability to lock in a 4.5 percent interest rate on a 30-year, fixed-rate mortgage is an incredible opportunity. I’ve talked to people who originally thought that their mortgage payments were high—and then 28 years later, the payment is the same and it seems low. Unlike insurance and taxes, fixed-rate mortgage payments are not subject to inflation.”

Freeborn also notes that compared with 10 years ago, interest rates are near historic lows. Cameron Findlay, Chief Economist, Discover Home Loans, says, “Ownership in terms of affordability remains exceptionally attractive influenced by monetary stimulus helping drive rates to their current levels, which remain relatively low despite the recent move higher; however, staring in 2014, expect affordability to be driven by stricter government regulations.” Freeborn is optimistic, and says, “No one has a crystal ball about where interest rates will go. It’s an imperfect science at best, but it’s still an excellent time to buy or refinance.

source:- http://us.mediaplanet.com/real-estate/whats-the-key-to-unlocking-the-door-to-your-dream-home

Eastern Freeway: Latest game-changer for Mumbai real estate

Ramesh Nair of Jones Lang LaSalle (JLL) India explains about positive impact of the Eastern Freeway. He elaborates on how property prices have seen a spike in areas which are in close proximity of the route.

Ramesh Nair
JLL India

With the development potential of Mumbai's Western Suburbs almost fully exploited, we are witnessing increased momentum in new developments in the Eastern Suburbs where land parcels are still available and prices more affordable.

As a result, the 16.8 kilometre-long Eastern Freeway that connects P. D'Mello Road in South Mumbai to the Eastern Express Highway at Ghatkopar has now sprung into sharp focus with developers.

Also read: Land Acquisition Bill: Here's how it will impact valuations

The implications in terms of demand, supply and price are considerable. We have seen a steady increase in inquiries for residential and commercial spaces close to the Eastern Freeway's entrance and exit ramps, and developers have begun marketing their projects with an emphasis on their proximity to this key arterial route.

In Chembur, property prices have risen by as much as 25 percent over the past two years primarily because of this area's advantageous juxtaposition to the Eastern Freeway. Also, markets such as Kanjurmarg, Kurla, Powai and Ghatkopar saw residential property prices rise by 32 percent, 29 percent, 27 percent and 23 percent respectively in 2012.

This year-on-year increase in prices is also attributable to reasons such as the increase in superior quality projects with innovative concepts in these areas. LBS Marg has seen the arrival of luxury hotels such as Radisson Blue by Rajesh Builders and Novotel by Nirmal Group.

In fact, the property market in the CBD - currently on a decline - will also get a fillip because of the drastically reduced inward-bound commuting time. Improved road connectivity between Thane-Navi Mumbai with the CBD will result in an increase of residential project launches for the same reason.

The completion of the Santacruz-Chembur Link Road will cause more traffic coming in from the North side of the secondary business district of Bandra Kurla Complex. This will trigger a fresh spate of developments in the catchment areas surrounding the alternate route to the Central Business District.

With the improved connectivity of the Eastern suburbs, we will see these areas gradually attracting the commercial space requirements previously aimed at other micro-markets as long as the rates remain favourable. Such a relocation trend has already been witnessed in SBD North from other markets. This trend will become even more visible once the current lease periods expire.

There will also be further eastward movement of real estate development into locations like Sewree. However, it is the areas closest to the Eastern Freeway's entry and exit ramps specifically, Orange Gate, Anik Junction, Chembur-Mankhurd Link Road and Panjarpol Link Road which will emerge as the stronger locations.

Thanks for the new impetus, the real estate markets in these areas, which see high residential property absorption, will also see greater demand and consequently upward pricing momentum.

Going forward, the prices in the Eastern Suburbs are expected to rise at the rate of10-12 percent year-on-year over the next two years. A number of developers launching new projects are using the development of the Eastern Freeway as a marketing tool by highlighting the reduced commuting time to South Mumbai from peripheral locations.

Over the mid-term, properties in Wadala will also see a marked increase in value due to the combined influence of the Eastern Freeway and the fact that the MMRDA is fast-tracking this area's development as a Business District.

In the long term, certain land parcels currently held by the Mumbai Port Trust could eventually be released for development. If and when this happens, the presence of the Eastern Freeway will ensure that these land parcels will attract considerable premiums.

There is also a possibility of many industrial units present in the catchment areas of the Eastern Freeway moving out, further augmenting the supply of prime property for commercial and residential development along the Eastern Freeway.

Micro-Market Impact:

• South Mumbai may witness a small jump in absorption, considering the improved accessibility. Close to 35,000 vehicles travel on the Eastern Freeway each day.

• Central Mumbai will witness some acceleration in supply and absorption, and a moderate jump in rental/capital values.

• BKC will see moderate impact, which could improve once the Santacruz-Chembur Link Road (SCLR) comes up.

• Andheri will show, if at all, a mild negative impact because the Eastern Suburbs would now compete with it as an option for real estate.

• The Western Suburbs will largely remain unaffected by the Eastern Freeway, but the contrast between Eastern Suburbs - where a number of infrastructure projects are being undertaken - and the crowded Western Suburbs might become more pronounced, resulting in price pressure in the Western Suburbs.

• The Eastern Suburbs will see the maximum impact, with a sizeable increase in supply, absorption and rental/capital values across all segments.

• The Thane-Navi Mumbai market will experience positive movements, primarily in the residential market, with a lag effect on the commercial market.


The author is the COO- operations at Jones Lang LaSalle India.

source:- http://www.moneycontrol.com/news/real-estate/eastern-freeway-latest-game-changer-for-mumbai-real-estate_943960.html

Realty brand positioning not connecting with home buyers-III

Track2Realty Survey: Is a buyer ready to pay premium for the brand reputation of the developer?

Majority of the brand conscious buyers’ say ‘NO’ unless the big brand has offering to match the high price and differentiate the product. In the high-end category, 40 per cent of the buyers are ready to pay a premium.

In the mid segment not more than one fourth, 26 per cent of the buyers are ready to pay a premium for the brand. 70 per cent of the buyers who are brand conscious and can name the reputed developers in the given city and other parts of the country say a ‘brand’ has to be ‘synonymous’ with better offering, failing which paying a premium is a pain.

How much should be the premium over the brand. Here again it depends on the product segment and it ranges from 20-40 per cent in the high end to 10-15 per cent in the mid segment housing.

However, Pranay Vakil, Chairman of Praron Consultancy maintains that brand reputation does give a premium if the branding has been scientifically done over a period of time, and not just selling the project.

“A classic example would be the name of K Raheja where three companies are operating with the same name and one that has invested wisely in branding is today commanding a premium of about 40 per cent,” says Vakil.

As a surprise finding, the survey noted that the first time home buyers are more brand conscious than the second-time or seasoned buyers who have tasted the water. They are also more matured in picking the project on its merit than going for the ‘big name’.

While nearly seven out of ten, 68 per cent of the first time home buyers go for a ‘brand’, this figure is not even touching the half-way mark, 46 per cent, when it comes to second time home buyers.

This indicates that the perception of just having a roof over the head drives the buyers to unbranded or less reputed builders is not based on merit.

Brand positioning for a developer is more important in retail where the success or the failure depends on the kind of brands that open their outlets. But here also survey respondents have a fractured mandate.

40 per cent say there can be no premium also even after footfall, if the footfall is not translating into the sales. While 42 per cent assert footfall definitely adds to premium, rest 18 per cent believe it is a result of a number of factors.

Food and grocery is sill the demand drivers of the retail as majority of Indians go to malls for outings, as many as 68 per cent, followed by grocery purchase by 56 per cent.

Exclusive brands do drive the footfalls but hardly translate into sells. For other branded stuff like clothing or other expensive items Indians, as many as nearly eight out of ten, 78 per cent, prefer high street. Despite of all its branding to attract brands into the malls, Indian retail real estate has thus far failed to translate footfalls into sales.

This dynamics changes in residential real estate but gone are the days of paying premium for the top developers’ projects vis-à-vis same offering by the lesser known developer in the same location.

For many of the home buyers it is difficult to differentiate the product offering as more than seven out of ten, 72 per cent say all the advertisements appear to be offering the same amenities and services in their advertisements, with project elevation being the only difference between various advertisements. For majority of them, 80 per cent, location is the brand, and not the developer, to show off in their peer group.

“Brand is important because I am not ready to invest with a company which has not delivered the promised houses in the past. I won’t compromise on a lakh or two to end up repenting my life’s biggest purchase being a nightmare. But if you ask me whether I will pay a couple of lakhs more to the developer just because he has a slight edge as a brand name, then the answer would be no. It does not matter how much they advertise. I am happy with a lesser known brand so long construction and other promises have not been compromised with,” says Raman Prasad in Bangalore who is on a house hunt.

But yes, brand matters in a sense that most real estate developers and their brand strategists have failed to acknowledge the psychograph of the target buyers. While branding is positioned only selectively with investors or the IPO in mind, the project branding (rather plain advertising) is done to attract the buyers.

…to be continued

source:- http://www.track2realty.com/realty-brand-positioning-not-connecting-with-home-buyers-iii/

India Inc’s prescription to turn gloom into boom

The government and RBI first need to decide is there a line on the sand for the rupee? If they believe the rupee has overshot, then they need to push it back. They need to ensure that CAD is adequately funded and for that they need to show that there is another $15-20 bn in portfolio inflows this year — that too because of structural reasons, not one-off ad hoc measures
Win trust with policy |

Why aren't portfolio investments coming to India? Is it because growth has been damaged or simply there is lack of confidence in the macroeconomic policy-making framework? It is likely that investors are concerned about both. The government needs to address these issues

Push structural reforms |

Put in the long-delayed structural reforms and approve the pending
investment projects

Open debt mkt |

Open debt market, which is the only real source of large inflows that India has not tapped. Investors are overweight on Indian equities, so expecting a large inflow from equity investors is being over optimistic. The banking sector reforms proposed by RBI are steps in the right direction

RBI must intervene |

To create space for these measures to work, RBI also needs to back them up with interest rate and reserve interventions

Act fast |

September is likely to be a very volatile month from the global perspective. There are questions over QE tapering in the US, results of German elections, the debt ceiling in the US and the Middle East geo-political situation. Any action that the Indian authorities are thinking of needs to be taken now before the global uncertainties become reality


R C Bhargava Chairman, Maruti Suzuki

Boost manufacturing |

The focus should be on creating growth through competitive manufacturing. Manufacturing should be a priority and not be used to subsidize other areas. While the industry is all for social welfare measures and inclusive growth, these need to be sustained by growth of manufacturing in the country

Fast-track clearances |

To promote manufacturers, clearances should be given within a prescribed period, say three or five or six months. If the rest of the world can do it, why can't we? This will help create thousands of jobs

Adopt farm reforms |

Agriculture requires a lot of liberalization, more so as far as the state governments are concerned. There are many restrictions and it is one of the most regulated sectors. Areas where focus is required are land holdings, transfer of land, mandis, etc. Also, why do we need to subsidize everything in agriculture?


Puneet Bhatia MD, TPG Capital

Boost FDI in insurance |

We need some short term measures like opening sectors such as insurance to FDI (49%). This itself will bring $10 billion in one shot

Clear projects, resolve disputes |

The government needs to give out a message to the world that India is open for business. It can be done by clearing the Posco project, getting back L N Mittal and resolving the Vodafone tax issue. Selling majority stakes in PSU banks or getting in a big multi-brand retailer will also send out the message to investors

Empower banks |

Banks need to be empowered so that they can enforce selling of collaterals, this will help in the medium term, else NPAs will become a big issue going forward

Privatize assets |

Privatize strategic assets like coal, ports

Look for more revenue |

Before the government finds new expenditure through announcing populist measures, the finance minister needs to prove that there is a new source of revenue. What can also help is the formation of interministerial committees so that the government can create a window for projects which have been stuck to be proactively cleared


Kris Gopalakrishnan President, CII

Consider sovereign bond |

Carefully consider the issue of sovereign guaranteed bonds. The amount has to be large to deter speculators from dragging the rupee down

Exempt FIIs from tax |

The government should study the merit of exempting FIIs from short-term capital gains tax. This would ensure greater inflows in the capital markets.


source:- http://timesofindia.indiatimes.com/business/india-business/India-Incs-prescription-to-turn-gloom-into-boom/articleshow/22131221.cms?

Will the new land acquisition law help?

tary Panel | Ficci | The Financial Express
We have stressed on two points while preparing the Parliamentary Standing Committee Report on the Land Acquisition, Resettlement and Rehabilitation Bill.

First, the government should not buy land even for private public partnership (PPP) projects or even when there is ‘public interest’ involved and, second, as far as possible, agricultural land should not be used for industrial purposes.

However, the draft law asks for 80% consent for acquisition for private projects, 70% consent for PPP projects and no consent for infrastructure projects fully owned and executed by the government. Although the rural development ministry (which is anchoring the Land Acquisition Bill) has not agreed to our opposition to land purchase for PPP projects, the government has accepted our proposal to exempt all agricultural land from acquisition.

In the Bill submitted to the Parliamentary Panel, the government has included the clause that ‘multi-cropped, irrigated’ land is to be acquired only as a last resort. With large-scale diversion of agricultural land for industry purposes, providing food security to such a huge number of people will become difficult as food cannot remain limited to rice and wheat only. Using agricultural land for industrial use should remain the state’s prerogative. The states can demarcate the areas in their master plan for industrial use.

We have also made a case against the creation of a ‘land bank’, proposed in the draft legislation, with the lands acquired from farmers for industrial use which are not put to use within 5 years of purchase. All the members of the Parliamentary Panel had expressed their reservation against the concept of a ‘land bank’ as land is a scarce resource in our country. We had proposed that the unused land be returned to the original owners in case the land is not put to use within 5 years of purchase. The government has agreed to this proposal.

The government has also agreed to our proposal of making gram sabha consent mandatory for acquisition of land in scheduled areas for industry purposes. This is in line with the demands of the civil society organisations. Under a separate provision—the ‘Special Provisions for Scheduled Castes and Scheduled Tribes’—the Bill says, “In case of acquisition or alienation of any land in scheduled areas, the prior consent of the gram sabha concerned or the panchayats or the autonomous district councils, at the appropriate level in scheduled areas under the fifth schedule of the Constitution, is mandatory.”

We have also pushed for changes in the definition of the term ‘project affected people’. It now includes those who have been working in agricultural lands set to be acquired for industrial use. The government has also agreed to include a new clause in the Bill to encourage states to lease land for projects instead of acquiring it. The new clause leaves it to the states to decide on whether they would be exercising the option to lease land for any project.

However, the government has not supported the panel’s suggestion of having a multi-member committee at the district level to decide on the marketvalue of the land. The Bill empowers the district collector to decide the market value of land in his/her district. The Bill now stipulates a compensation of four times the market value of the land being acquired, payable to landowner while the earlier version proposed a compensation of six times the market value.

We have agreed to support the Land Acquisition Bill as it is long overdue. The proposed law would replace the 117-year-old Land Acquisition Act of 1894. It will also integrate acquisition and resettlement & rehabilitation (R&R) in one policy for the first time ever. The new law is the need of the hour.

The author, a Lok Sabha member, was chairperson, Parliamentary Panel on Land Acquisition Bill

(As told to Sandip Das)

It is ironical that, on the one hand, the government is trying to resolve and speed up the land acquisition process for large projects through the Project Monitoring Group set up to assist Cabinet Committee on Investments while, on the other, it is trying to bring a Bill that will further protract the process of land acquisition. One of the commonest reasons for delay faced by large projects is land acquisition.

The Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2012, prescribes a 10-stage process for land acquisition. Starting with the social impact assessment (SIA) study followed by the evaluation of SIA by independent expert group, publication of preliminary notification, hearing of objections, publication of declaration, etc, it would take not less than four years

source:- http://www.financialexpress.com/news/will-the-new-land-acquisition-law-help-/1160593/3

Affordable housing scheme gets maximum response from Gurgaon

Of the 56 applications the Haryana government recieved from builders for the construction of housing projects under its Affordable Housing Policy, 48 are from Gurgaon.

The state government notified the policy on Monday and invited developers to apply for the scheme, which aims at providing affordable housing units to persons belonging to economically weaker sections.

On the very first day, 56 realtors submitted their applications. The huge response from Gurgaon builders indicates that there’s a huge demand for affordable houses in the city.

Of the rest, six applications were received from developers in Faridabad and one from Jhajjar and Karnal each.

According to experts, the policy would help checking illegal constructions and also act as a breather for the otherwise sluggish real estate market.

“The policy will rekindle hope for the common man, as it has a provision for higher population density norms of 850-900 people per acre as against the prevalent figure of 300,” said National Real Estate Development Council (NAREDCO) president Navin Raheja.

The policy was cleared by the Haryana cabinet on August 6 during a meeting held by chief minister Bhupinder Singh Hooda in Chandigarh.

For a city like Gurgaon where a two-bedroom apartment sells for anywhere between Rs. 75 lakh and Rs. 1 crore, the new policy has brought a ray of hope for people of low income groups as they would be able to buy a 300 sqft house for as low as Rs. 12 lakh through draw of lots. The price for a 645 sqft flat would come to about Rs. 25 lakh.

As per its terms and conditions, the policy allows developers to construct and sell small housing units — measuring between 300 sqft and 645 sqft — in the economically weaker section (EWS) and low income group (LIG) category.

The maximum allotment rate for the apartment units approved under such projects will be — Rs. 4,000 per sqft of carpet area in Gurgaon, Fairdabad, Panchkula and Pinjore-Kalka; Rs. 3,600 per sqft for other high and medium potential towns and Rs. 3,000 per sqft for the remaining low potential towns.

source:- http://www.hindustantimes.com/India-news/Gurgaon/Affordable-housing-scheme-gets-maximum-response-from-Gurgaon/Article1-1110615.aspx