- News Letter
Realtors aggressive on vaccinating their workforce before Covid-19 third wave
The second wave of the COVID-19 pandemic has been more ‘devastating’ on the real estate sector than the first one, as new launches and …
Experts Explain Why To Invest In Residential Real Estate During Covid-19
The future of commercial real estate investment through REITs
Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the r…
The Economic Times: Tier II markets are likely to see growth in co-working spaces: Neetish Sarda, founder, Smartworks.
NEW DELHI: Flexible work spaces are a compelling proposition in today’s fast paced world. Demand for such spaces is increasing in India as th…
CNBC TV 18: Luxury losing the plot to affordable housing?
Luxury supply increased by 29% since …
Financial Express: Real estate flourishing: Despite demonetisation pain, commercial property investment at 10-year high in 2017.
Even though demonetisation and GST affected the investment made into the real estate similar to other business in the economy, private equity (PE)…
Hindustan Times: 26,959 low-cost houses to come up on Mumbai national park’s border.
Opening up 90 acres of land inside the eco-sensitive zone of Aarey Milk Colony bordering Sanjay Gandhi National Park (SGNP), Maharashtra Housing an…
The Hindu Business Line: Organised co-living space sees 100% growth in one year.
New Delhi, December 10
The organised co-living space has seen a growth of around 100 per cent in the last one year, according to industry…
Realty companies hope for revival of market after RBI decision.
Realty players hope that the RBI’s move to hold repo rate will help revive the industry while for home buyers it is the opportune time to avail…
The Asian Age: Now pay slightly more for Mhada affordable homes.
The real estate market has faced a slump after the introduction of the Real Estate Regulatory Policy (RERA) and demonetisation.
Mumbai: MHADA affordable housing lottery applicants seek lower EMD
In its upcoming housing lottery, the applications for which will close on December 10, applicants will have to pay the MHADA an EMD between Rs 25,0…
The Hindu Business Line: Chennai witness 92% growth in office space absorption.
Bengaluru records highest absorption at 7.9 million square feet
Bengaluru, November 29
Chennai witnessed a staggering 92 per …
DNA: BMC loses plot reserved for park in Kurla.
The Brihanmumbai Municipal Corporation (BMC) rejected a proposal to acquire around 2000 sq metre plot in Kurla reserved for a park. The proposal wa…
DNA: MahaRERA mandates developers to issue quality assurance certificate.
To clear the doubt regarding the quality of construction that a home buyer mostly has, Maharashtra Real Estate Regulatory Authority (MahaRERA) has …
The Asian Age: MMRDA may give ultimatum to Scomi.
Mumbai: Highly-placed sources in the Mumbai Metropolitan Region Development Authority (MMRDA) revealed that the authority might gi…
The Hindu Business Line: Maharashtra stays land acquisition for Ratnagiri refinery project.
Mumbai, November 28
In a major setback to the proposed 60-mmtpa Ratnagiri refinery and petrochemical project, Chief Minister of Maharasht…
Business Standard: Godrej realty PE arm to raise new fund focused on co-working, data centres.
Godrej Fund Management (GFM), real estate READ MORE
Mumbai Mirror: DP 2034 still shows land parcels in sea and mangroves.
Urban planners, activists cry foul over ‘draftsman’s mistakes’ in Development Plan; write to Ajoy Mehta.
Mumbai Mirror: Residents see red after SRA proposes slum tag for gaothan.
Change in nomenclature leaves the gaothans open for exploitation by real estate developers, say activists.
DNA: Flat buyers, builder to jointly complete stuck Noida project.
In a speedy redressal, Uttar Pradesh Real Estate Regulatory Authority (Rera) on Wednesday delivered a unique judgment that the flat buyers and the …
DNA: Co-working spaces get corporate boost.
Co-working or flexible workspaces are gaining a lot of traction with corporates increasingly looking at the option and account for approximately ha…
DNA: Mumbai: Sales will go dry, cry builders as duty hike makes home run longer.
The state government’s decision to charge homebuyers an additional 1 per cent on the existing 5 per cent stamp duty is set to squeeze the rea…
DNA: Developers on a rough patch since Diwali.
The festive Diwali period, when homebuyers are known to make purchases, failed to bring in business for developers selling under-construction house…
DNA: Ashoka Buildcon road project may net Rs 100 crore.
Ashoka Buildcon’s Ahmednagar-Aurangabad Build-Operate-Transfer (BOT) road project has again received an extension from the Maharashtra governme…
DNA: Mumbai: Get ready to pay 1% extra on stamp duty surcharge.
Soon, transactions on properties in Mumbai will become costlier. The state has decided to charge an additional 1 per cent stamp duty surcharge on v…
DNA: Draft to see builders redo MHADA buildings in 3 years.
In what could be good news to the lakhs of residents staying in dilapidated MHADA buildings, the government has decided to amend the existing Mahar…
The Economic Times: Lodha puts London properties up for sale to bring down debt.
MUMBAI: One of India’s largest realtors and probably the most aggressive one, Lodha Developers, is selling its London assets to prune borrowi…
The Times of India: Stamp duty on Mumbai properties set to go up 1% to fund infrastructure.
MUMBAI: Mumbaikars will soon have to pay 1% additional stamp duty on property to fund transport infrastructure projects in the city, like metro and…
The Hindu Business Line: Godrej Properties exits Hyderabad.
Plans to move out of Kochi, Mangaluru too
Mumbai, November 25
Godrej Properties (GPL) has exited the Hyderabad market and wil…
Mumbai Mirror: New builder must take on all liabilities of old project.
Housing regulation authority Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a builder to honour a home buyer’s agreement …
DNA: e-Sang Redwood to buy 200 acre land in Thane.
Asian logistics developer e-Shang Redwood is close to acquiring in excess of 200 acre in Thane for its logistics hub, which would be its biggest project in India planned so far.
Its Mumbai plans have been scaled up significantly with the backing of Allianz, the third-largest real estate fund in the world, which on Friday committed to jointly invest $1 billon in India.
ESR, co-founded by major private equity player Warburg Pincus, is backed by global investment companies including APG, SK Holdings, JD.com, CITIC CLSA, Goldman Sachs, CPPIB, PGGM, Ping An.
“We are in talks which are at its last stages for more than 200 acre at Bhiwandi. Mumbai for us is the most important hub for the warehousing business among all the states,” Gaurav Sharma, director, leasing and acquisitions at ESR Adisers India, told DNA Money.
ESR’s second funding deal with Allianz is India specific and involves immediate equity commitment of $225 million to be funded on a 50:50 basis by Allianz and ESR subsequently be converted into a $1 billion assets under management platform.
Such fund flows have helped ESR turn aggressive with an ambition to emerge as the largest player in the sector.
“Our objective is to be the market leaders in India in the next 2-3 years, and in the next 2-3 months you would hear a lot from us,” Sharma said at the sidelines of a CII-organised event on logistics sector.
Allianz-ESR combine said they would be investing in eight key target cities of Mumbai, Pune, Chennai, Bangalore, Hyderabad, Ahmedabad, Kolkata and the National Capital Region.
“In Pune we got 53 acre for creating 1.2 million square feet. In Kolkata we have acquired 75 acre from a closed motorcycle plant, and in Chennai we are identifying land. There we are at the last stages of closing the deal which would be in excess of 150 acre,” he said.
ESR last week conducted the groundbreaking ceremony for the Chakan facility which would get completed in the fourth quarter of 2019.
“In Uluberia near Kolkata, we have just started construction of 1.5 million square feet for which we have tied up with a major e-commerce player as a client for built-to-suit half a million square feet to be delivered to them by the middle of 2019,” he said.
BULLISH ON INDIA
Allianz-ESR combine said they would be investing in eight key target cities of Mumbai, Pune, Chennai, Bangalore, Hyderabad, Ahmedabad, Kolkata and NCR
- $1 billion – It along with Allianz plans to invest in India
- 53 acre – Land co has got in Pune for creating a 1.2 million square feet facility
DNA: Unilateral termination of booking of flat invalid: MahaRERA to builder.
The MahaRERA recently held that the cancellation of a property allotted to a homebuyer by a developer was invalid according to law as the complainant had not accepted the cancellation and neither had he received a refund of the amount paid.
The complainant, Sunil Devnani had booked a flat in the year 2010 and was to get possession of the same in October 2012. The developer has been ordered to pay interest to the homebuyer.
Devnani had complained against Geopreneur Spire Realty (Respondent 1) and Aditya Enterprises (Respondent 2). He sought directions from MahaRERA for both the respondents to execute an agreement for sale and also pay interest at an amount of 18 per cent per annum, which he had paid to the respondents to book a flat in the project, known as Mayur Tower, Bandra.
Devnani argued that he booked the flat for Rs 67.58 lakh. Accordingly, respondent 2 issued an allotment letter dated June 2010, wherein it was argued that the flat will be handed over by October 2012. However, despite the complainant paying Rs 13.51 lakh to respondent number 2, no agreement was executed, and respondent 1 was not involved in the process of booking the flat at all.
Respondent 2 disputed the claim and argued that a registered agreement for sale was not executed, and that the complaint had been filed based on the allotment letter. They said they had already cancelled the allotment letter due to non-payment of consideration amount by the homebuyer as per schedule.
According to the respondent 2, he had issued termination notices dated April 2018 and May 2018 and he called the complainant to collect the refund amount which he didn’t collect. The builder said that the layout plan was to be first approved by MHADA and due to the delay on the part of MHADA, MCGM could not issue the IOD and commencement certificate on time. However, now with permission granted the developer had completed 12 floors out total 15 floors.
Dr Vijay Satbir Singh, Member, MahaRERA while passing the order stated in his order, the respondent 2 argued that he has cancelled the said allotment letter by issuing legal noticed, the said cancellation is not valid as per law, since the complainant didn’t accept the cancellation and also the amount paid by him was not refunded. “Such unilateral termination of allotment is bad in law and MahaRERA cannot accept the contention of the respondent number 2.”
Singh finally ordered the respondent 2 to execute the registered agreement for sale with the home buyer on payment of outstanding dues by complainant. He also asked him to pay the complainant an interest on the amount paid by him from May 2017 till actual date of possession.
The Times of India: Mumbai: State staff housing plan may help builder exploit prime Nepean Sea Road plot.
MUMBAI: In a controversial proposal, the state government plans to open up for construction a green hill slope currently occupied by slums in the p…
Live Mint: Mumbai’s new luxury flats face harsh realty.
Mumbai: The drag in luxury home sales may soon leave some of south Mumbai’s posh neighbourhoods with a string of almost empty skyscrapers.
In Worli and neighbouring Prabhadevi, which host the super-rich in business and Bollywood, more than half of upcoming residential towers are struggling to find buyers.
Lower Parel, also in the vicinity, where residential high-rises have mushroomed in the midst of large office complexes, is witnessing a similar fate.
Out of the total supply of 7,292 luxury apartments in Worli and Prabhadevi, 4,107 remain unsold, according to data compiled by Liases Foras Real Estate Rating and Research Pvt. Ltd. The average cost of an apartment in these areas is ₹10 crore. At the current pace, it may take more than 17 years to dispose of the current stock, shows the data.
“Only a little over 200 units get sold each year in both these areas. We are seeing over 200 months’ supply. This is way too high for any market to sustain,” said Pankaj Kapoor, founder and managing director, Liases Foras.
The situation has put pressure on property prices in these areas, with builders offering discounts.
At Worli, homes are being sold at ₹60,987 per sq. ft (on carpet area basis), down from ₹67,467 per sq. ft in the second quarter of 2014-15. At Lower Parel, with 1,337 unsold units, prices have dropped from ₹60,708 to ₹58,269 per sq. ft during the same period, according to Liases Foras data.
“Too much supply came at the same time. If the supply was staggered over a period of time, it would have adjusted to the demand but the challenge compounded as most of them came around the same period,” said Anuj Puri, chairman, Anarock Property Consultants Ltd, a property broking firm.
In Worli alone, 2,290 units launched since 2013 remain unsold, shows another set of data compiled by Anarock.
Worli is dotted with some of the most expensive upcoming housing projects: Oberoi Realty Ltd’s uber luxury project Three Sixty West, K Raheja Corp’s Artesia, Omkar Realtors’ 1973 and Provenance Land’s Four Seasons Private Residences. While Lower Parel houses Lodha Group’s ambitious project World Towers, Prabhadevi has Wadhwa Group’s 25 South, among others.
“Sales have definitely been slow. We are now focused on first completing our project. We will open our third tower for sale next year when the market stabilizes,” said Rahul Maroo, CEO of Omkar’s 1973 project. Between 2013 and 2017, Omkar sold over 85% of first two towers that comprised over 320 units, he said.
Last year, Piramal Capital and Housing Finance Ltd, which lent to the 1973 project, had to bring in Anarock Property Consultants for pushing sales to expedite the recovery of its money.
This year, developer Parinee Group was forced to convert its planned upscale residential project in Worli, funded by non-banking finance group ECL Finance Ltd, into office space, due to huge oversupply in the vicinity.
Cash-rich builders have, meanwhile, put up a brave face, claiming there are enough takers for high-end homes. Vikas Oberoi, chairman and managing director, Oberoi Realty, said Worli continues to find traction among wealthy Indians looking to shift their base from different parts of the city.
“… Properties at Worli Sea Face are being sold at around ₹1.5 lakh per sq. ft. Our project is one lane behind and we are selling at 50% of that price. So I have customers lined up, but we are particular about the right profile,” Oberoi said.
Launched two years ago, Oberoi’s Three Sixty West project has registered sales of 56 units out of around 200. Not far away is K Raheja Corp’s Artesia, where around 50 units are yet to be sold out of 100, with each apartment costing ₹35 crore and above.
“We don’t have a large inventory. We are only creating exclusive apartments and very choosy about the profile. We decide whom we want to sell,” said Om Ahuja, chief operating officer, residential business, K Raheja Corp.
Live Mint: Residential real estate sales drop further in NCR.
Financial Express: Unsold inventory remains high in Mumbai Metropolitan Region.
The unsold inventory in the country’s costliest real estate market –Mumbai Metropolitan Region (MMR) – continues to remain high with over 2.2 lakh units remaining unsold as of September 2018.
The unsold inventory in the country’s costliest real estate market –Mumbai Metropolitan Region (MMR) – continues to remain high with over 2.2 lakh units remaining unsold as of September 2018. However, with fewer new launches and stable absorptions, the unsold unit numbers are holding steady post-2016.
MMR, which accounts for around 37% of the overall unsold units across the top 7 cities in India, has witnessed a growth of nearly 56% in unsold units till the end of September 2018 over 2013. The data show that the number of unsold units in 2013 in MMR stood at about 1.43 lakh units, which went up to nearly 2.3 lakh units in 2016, after which there has been a marginal decline.
“Aggressive launches between 2013 till 2015 have added to the unsold stock,” according to a report from ANAROCK Property Consultants. However, post 2015, with restricted launches and stable absorption rates the market has reversed its trend and the unsold stock has started to decline.
Majority of unsold stock in MMR is in Mumbai and its peripheral areas. Thane city and Navi Mumbai account for nearly one-third of the unsold stock in the region and the trend has been similar during the past five years. Lesser launches in Thane and Navi Mumbai, coupled with better off-take compared to Mumbai (due to higher affordability), have kept the unsold stock in these regions on the lower side.
As for the pricing, nearly 60% of the unsold stock in MMR is in the affordable and mid-segment of units priced less than Rs 80 lakh. Anuj Puri, chairman, ANAROCK Property Consultants, said: “While Mumbai’s share in overall launches in MMR declined from 71% in 2013 to 67% in the first three quarters of 2018, Navi Mumbai has witnessed an increase in share from 9-17%.”
A majority of the unsold stocks in MMR are still under various stages of construction. A handful of existing stocks are in the ready-to-move-in stage which the developers are looking to sell at a fast pace.
According to Samantak Das, head of research at JLL India, about 70-80% of the projects in the market are old projects, which would be getting completed in the next 7-8 months. “There is some amount of latent demand in the market and buyers are waiting for the projects to get occupation certificate so that it does not attract GST,” Das said.
GST is not chargeable on a ready-to-move apartment. He added that sales momentum is still choppy right now and it will take at least 2-3 more quarters for some stable growth to come back to the market.
DNA: Hyderabad replaces Mumbai as the second most active market after Bengaluru.
Despite currency fluctuations, gross leasing activity in India has been buoyant across the seven major cities. The gross leasing activity in India was recorded at 36.4 million sq ft for the first nine months of 2018, up 26 per cent Year on Year basis. Pan-India demand for Grade A office space was driven by the technology sector (48 per cent) in Quarter 3 2018, followed by banking and insurance representing 19 per cent of the total leasing volume. The need for workspace efficiency and a collaborative work environment has increased demand for flexible workspace, which accounted for 13 per cent of pan-India office leasing volume in Q3 2018. This is what the research by Colliers International, a global real estate services and investment management company says.
“Despite currency fluctuations, the gross leasing activity in India across major 7 cities was recorded at 36.4 million sq feet for the first nine months of 2018, up 26 per cent YoY. Bengaluru again saw the bulk (30 per cent) of leasing activity during Q3 at 3.7 million sq feet followed by Hyderabad which replaced Mumbai to be the second most active market”, said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India. The leasing activity in Hyderabad doubled over Q2 to 2.1 million sq ft owing to large transactions by technology occupiers in the Secondary Business District (SBD) micro market.
According to the report, flexible workspaces or co-working has contributed close to 13% in the total year-to-date Q3 office leasing, reporting a 2x growth from the last nine months of 2018. This trend indicates that 2019 will be an even more active year for the flexible workspace sector, fueled by an increase in end-user demand from the IT industry, looking for ways to mitigate real estate costs and seeking flexible solutions.
Some Key markets.
Bengaluru: Bengaluru recorded gross office absorption of 3.7 million sq ft in Q3 2018, representing a growth of 55% from the same period last year. Total Grade A office leasing through Q3 2018 was 11.4 million sq ft. Further supporting the city’s real estate growth is the steady demand from the technology sector that constituted 41% of the total leasing activity in Q3 2018. This was followed by the Banking Financial Services and Insurance (BFSI) sector accounting for 27% of leasing activity, flexible workspace operators on 15%.
Hyderabad: It defeated Mumbai to reach the second sport. Hyderabad recorded 2.13 million sq ft of gross office leasing in Q3 2018. YTD gross absorption is 3.60 million sq ft, which is similar to 2017 levels. In Q3 there was an increase in the number of deals by IT-ITeS occupiers, and the average deal size was 79,000 sq feet, higher than the annual average over the last two years of 45,000 sq feet. Deals greater than 1,000,000 sq feet constituted 70% of total leasing activity in Q3 2018, which is 30% higher than Q2 2018.
Mumbai: Mumbai recorded a gross absorption of 1.9 million sq feet in Q3 2018, a QoQ increase of 11%. This take-up was concentrated in the Andheri East (25%), Navi Mumbai (18%), LBS/Eastern Suburbs (15%) and Goregaon/JVLR (12%) micro markets. For the second consecutive quarter, flexible workspace operators drove leasing activity in Mumbai accounting for nearly 36% of gross absorption in Q3 2018, followed by BFSI occupiers representing 28% and consulting occupiers accounting for 15%.
Gurugram: Here, gross absorption declined 60% QoQ and 50% YoY. Q3 2018 noted leasing activity of 0.80 million sq ft with most occupiers expanding operations in the city. Contributing to the decline, deals in excess of 50,000 sq ft comprised 43% of leasing activity, compared to 69% in Q2 2018.
Delhi: The office market recorded gross absorption of 0.14 million sq ft in Q3 2018, representing a quarterly contraction of 6.7%. Over the last three quarters, the continued decline in demand can be attributed to a lack of Grade A space in major micro markets such as the CBD and Aerocity, as evidenced by the CBD recording a significant decline in take-up compared to last quarter.
Pune: Pune witnessed gross absorption of 1.8 million sq ft in Q3 2018, more than double the absorption in Q2 2018. The leasing activity is driven by absorption of pre-committed spaces by technology occupiers and flexible workspace operators. Despite significant new supply, rental values appreciated 3-6% QoQ in select micro markets including Nagar Road, Baner and Kharadi.
DNA: MHADA earns Rs 99-cr premium for five NOCs!
Over Rs 99 crore premium five No Objection Certificates (NOC)! Yes, you read right. The Maharashtra Housing and Area Development Authority (MHADA) earned over Rs 99 crore as premium from only five buildings to which it gave NOCs for carrying out redevelopment.
Confirming the same, a senior MHADA official, who looks into redevelopment proposals said, “Till now we have given NOC for four to five projects and have received a premium of over Rs 99 crore.”
Within months of being appointed as the planning authority, MHADA had received 107 proposals from various MHADA buildings located in its layout seeking redevelopment. Of these, more than 47 proposals have received approval. Of the proposals received, around half-a-dozen are self-redevelopment proposals.
In 2010, MHADA changed its policy of giving NOC to only those buildings, which agreed to give housing stock in return. The decision brought redevelopment activities almost come to a standstill. Later, there was a change in the policy where the government allowed housing stock in certain cases and premium in other cases for giving NOC. This helped, as the authority started receiving redevelopment proposals again.
Another senior MHADA official said, “With a change in policy and MHADA becoming the planning authority, redevelopment process will be on fast track. It also means a lot of profit for the housing authority.”
The six self-redevelopment buildings are located at Ghatkopar, Mulund, Bandra and other areas. Currently, there are around 2.10 lakh people residing in the 114 layouts of MHADA in the city. If all of them are redeveloped, apart from the 2.10 lakh rehab homes, lakhs of homes, that can be sold in the market, will be generated.
Most of the buildings are in a dilapidated condition; redevelopment process of these buildings was stuck at various levels. Now with approvals being granted, it is expected that redevelopment will be on fast track.
Earlier this year, the government allowed MHADA to become the planning authority for the 56 colonies of its 114 layouts and also for the homes to be constructed under the Pradhan Mantri Awas Yojana (PMAY urban). According to MHADA, since the time of appointment, they have formed various cells that are active from the body’s office in Bandra, east.
- The state government accorded Mhada the status of planning authority on May 23
- Making Mhada a nodal agency is expected to speed up redevelopment process of 114 Mhada layouts across city and cut down red-tapeism
DNA: Flexible office space absorption increases by 11% in last 3 months.
The need for workspace efficiency and collaborative work environment has increased demand for co-working space. Its increasing demand has made it l…
The Indian Express: 22 people show interest in MHADA’s costliest flats.
These 22 applicants are yet to pay the Ernest Money Deposit (EMD) of Rs 75,000. Sources said the applications will be confirmed only after the EMD is paid.
IN THE first week since the Maharashtra Housing and Area Development Authority (MHADA) opened applications for its annual housing lottery, 22 applicants have shown interest in its priciest offerings — three flats sized over 850 square feet and priced between Rs 4.99 crore and 5.8 crore — in Dhawalgiri Apartments at Cumballa Hill.
These 22 applicants are yet to pay the Ernest Money Deposit (EMD) of Rs 75,000. Sources said the applications will be confirmed only after the EMD is paid.
On November 5, the MHADA opened applications for the Mumbai board housing lottery, offering 1,384 homes at different locations in the city. A senior MHADA official said, “The response for the overall lottery is good, but for the homes at Grant Road (Cumballa Hill), we have got received only 22 registrations.”
The lottery includes 63 flats for the Economically Weaker Section (EWS), 926 homes for Lower Income Group(LIG), 201 homes for Middle Income Group (MIG) and 194 homes for Higher Income Group (HIG).
In HIG category, the MHADA has included 44 flats located in south Mumbai, priced between Rs 99 lakh to Rs 5.8 crore. Out of these, three flats in Cumballa Hill, measuring 884.79 sq ft, 983 sq ft and 859 sq ft are the costliest flats ever offered by the MHADA. These cost Rs 5.13 crore, Rs 5.8 crore and Rs 4.99 crore, respectively.
While housing experts have claimed that these three homes will fail to draw interest, MHADA officials said that the interest in the flats is expected to peak by the end of the month.
As on Monday, MHADA has received over 17,000 applications for its 1,384 flats. The result of the online lottery will be declared on December 16 and the last date for payment of the EMD is December 10.
The Indian Express: Mumbai: Government to dole out more sops to slum developers.
Sources said the fresh concessions for slum developers will be included in the notification regarding corrections to be made to the excluded part (EP) of Mumbai’s new development control regulations (DCR).
IN THE run-up to the 2019 Lok Sabha polls, the state BJP government is set to announce more sops for developers of Mumbai’s slums.
Sources said the fresh concessions for slum developers will be included in the notification regarding corrections to be made to the excluded part (EP) of Mumbai’s new development control regulations (DCR). Slum redevelopment projects, which offer high saleable area incentives, are already considered a goldmine for developers.
Earlier, the chief minister-led urban development (UD) department had deferred the date of the implementation of the EP, contending that there were “typographical errors and mistakes in the EP notification (published previously) that required corrections.” While it had originally fixed October 24 as the date for the implementation, this was later postponed to November 13.
Sources said that the postponement was also on account of fresh sops that the government plans to extend to construction industry players, especially those involved in slum redevelopment projects.
Mumbai’s new DCR came into force on September 1. But major modifications in the permissible floor space index (FSI) for various development and redevelopment schemes in the DCR were sanctioned as part of the EP, which received the government’s nod on September 21. While a proposal to make 51 corrections (mostly of typographical nature) was submitted to the chief minister’s office on October 15, an approval was kept pending.
The Fadnavis government has already made the slum redevelopment more lucrative. On September 21, while sanctioning the EP, the government increased the minimum tenement size of a rehabilitation home from 269 sq feet to 300 sq feet. While wooing the slum voter ahead of the polls was the main purpose behind the move, this has also resulted in an upward revision in the developer’s sale incentives, which is linked to the area utilised for rehabilitation.
The government also lifted the cap on maximum permissible FSI on a slum plot, which had previously been capped to 3 FSI for controlling population densities on slum lands, and changed the FSI computation formula by linking it to the boundary of the slum plot instead of the area occupied by slum structures.
Now, despite opposition from activists and a section within the bureaucracy, sources said that the government is likely to relax the condition regarding the space between two slum rehabilitation buildings, a move that will further enhance the overall building footprint of the redevelopment project.
Apart from this, fresh concessions are expected in case of slum redevelopment schemes involving the clubbing of two or more plots.
The slum redevelopers lobby has also been demanding that for such schemes, permission to locate the rehabilitation component anywhere in the city be granted. As per current regulations, the rehabilitation component is to be built either on the same plot or on a similar value plot in the same or the adjoining ward.
Hindustan Times: Mangrove razing in Maharashtra: Action must be taken in 48 hours.
After initial action, cases must be closed in three months; officials must submit photos or videos after inspection.
In a major boost for laws implemented to counter mangrove destruction in Maharashtra, the mangrove committee on Monday decided that various state departments and district administrations will have to act on complaints related to mangrove destruction in 48 hours. Officials will have to submit reports, along with photographs or videos, after inspecting the site.
“While the police will file its report in 30 days, a sub-divisional officer or other officials will file a charge sheet and submit it in the court in two months. A case needs to be closed in three months,” said Jadish Patil, Konkan commissioner and chairperson of the state mangrove committee.
Other decisions taken during the first committee meeting include, resident deputy collectors along the Konkan coast will assist the forest department to identify reserved mangrove forest land, ensure it is transferred to the forest department and is identified as notified forest. Similar action will be undertaken within municipal limits by respective corporations and councils.
As per state mangrove cell, around 2,000 hectares is likely to be added to the existing 15,088 hectares of notified mangrove forests across Maharashtra. The overall mangrove cover in the state, including private land, is around 30,000 hectares.
“We will restore mangrove forests using funds from the mangrove foundation while the municipal corporation or councils will restore mangrove forests in urban areas using their own funds,” said N Vasudevan, additional principal chief conservator of forest, state mangrove cell.
He added all collectors, members and various state departments were present at the meeting.
“We received numerous suggestions, which will be discussed and implemented as we meet in the coming months. The forest department will use satellite mapping to identify vulnerable mangrove areas in three months,” said Patil.
In addition, collectors along the Konkan coast have been asked to set up district and taluka-level mangrove protection committees by November-end.
“They were asked to identify a nodal officer from each department — police, revenue and forests — and share their contact details. Our control room will now directly forward complaints to these officers to ensure timely action,” Patil added.
The committee also decided that leases for aquaculture at mangrove forests along the Konkan coast will not be renewed by the district administration.
HT had reported on October 18 that the state constituted a mangrove committee comprising 22 members. The committee was formed following the landmark Bombay high court judgement related to protection of mangroves in the state. The members are responsible to look into cases of mangrove destruction, restoration and preservation in districts of Konkan based on a landmark order by the Bombay High Court (HC) for mangrove protection in Maharashtra in September.
Hindustan Times: Mumbai’s Metro-3 to get new technology for tunnelling work.
To overcome the restrictions caused by the city’s narrow roads and congested spaces, the Mumbai Metro Rail Corporation (MMRC) will adopt new …
DNA: Price of houses can be lowered furthermore: Experts.
Despite a relatively high number of responses to MHADA Mumbai board lottery, experts have said that the authority can reduce the price of the houses furthermore. Many had criticised the housing authority saying that lottery isn’t aimed at the common man following houses being sold at and around Rs 5.80 crore in south Mumbai.
Madhu Chavan, MHADA Mumbai board chairman — while agreeing that the prices may not be affordable — says they are reasonable. “There is a huge demand for MHADA homes because people cannot afford the market rate. The response is a sign that people are looking for options. I am not saying that our prices are affordable in every segment but then the influx of response shows the prices are reasonable,” he said.
Chavan said, “The home that we are selling in Cumbala Hill is priced at Rs 5.80 crore, the ongoing market rate is above Rs 8 crore and we are still selling below the market rate, which is why people are coming. We aren’t expecting MIG and LIG to come for these homes, hence it is in the HIG category.”
This year, 63 houses are being provided to the Economically Weaker Section (EWS) while 201 houses have been assigned for the Middle Income Group (MIG). The High Income Group (HIG) will be provided with 194 houses. Dr Sanjay Chaturvedi, housing expert, said, “MHADA homes are still expensive, and there’s a huge margin to cut down it to. MHADA shouldn’t sell homes at market rate or less than it, the homes should be sold only on construction cost, because that is what it pays. In most cases the land is provided to MHADA for free.”
The housing authority had formed a committee that had decided to look into its pricing policy, and, according to senior officials from MHADA, certain points of the recommendations made have been implemented in this lottery. MHADA credits the recommendations for “bringing down the prices this year”.
The price of houses in Lower Parel in the last lottery was around Rs 1.92 crore as against Rs 1.36 crore this year. While the homes priced at Rs 1.36 crore cost Rs 99 lakh this year.
- 63 houses are being provided to the Economically Weaker Section. 201 houses have been assigned for the Middle Income Group. The High Income Group will be provided with 194 houses.
DNA: Citizens across income groups eye MHADA houses.
MHADA’s Mumbai board has received overwhelming response this year after it announced a lottery of 1,384 houses. Till Monday evening, and within…
Business Standard: Lodha Developers sells Rs 42-bn real estate in H1, eyes Rs 90-bn FY19 sales.
The company has a major presence in MMR and Pune, besides London where it is developing two prime properties.
The Indian Express: BDD redevelopment project: MHADA survey hits roadblock as residents object to it.
The Maharashtra Housing and Area Development Authority (MHADA), the nodal agency for Bombay Development Directorate (BDD) redevelopment project, has hit a roadblock in its survey of the BDD chawl in Naigaum after facing stiff resistance from its residents.
The MHADA, officials said, has now directed the deputy collector to take support of the Mumbai Police to ensure that the first of the five-phase survey of the chawl is conducted. The big-ticket project, worth over Rs 15,000 crore, entails the redevelopment of 121 chawl buildings in central Mumbai that are nearly a 100 years old.
The chawl in Naigaum that houses 3,344 tenants, is part of the BDD chawl redevelopment project, the foundation stone for which was laid by Chief Minister Devendra Fadnavis in 2017. While the MHADA has completed the first phase of the survey of the BDD chawls in N M Joshi Marg, identifying 408 tenants as eligible for housing under the redevelopment project, it has, however, been met with opposition from the tenants in Naigaum.
Officials said the residents have demanded that the MHADA create a corpus fund of Rs 25 lakh for each tenant to be disbursed after allotment of a tenement under the redevelopment agreement. “The survey of eligible tenants for BDD Naigaum is stuck due to the demand of a group of people who are asking for Rs 25 lakh corpus fund. We tried more than five times but we failed to complete the survey,” said a senior MHADA official.
‘’I don’t understand the need for a survey because our family and eligibility details are already with the PWD. If the government wants to do a survey, then first they have to enter into an agreement with the tenants. We will allow the survey only after that,” said Raju Waghmare, a resident of BDD chawl in Naigaum.
On the demand of corpus fund of Rs 25 lakh, he said: “The government agency is saying that it will do maintenance work of the buildings for 10 years after redevelopment. But new buildings do not required maintenance work for 10 years. Our demand is give us Rs 25 lakh of corpus fund so that in the future, we can do maintenance work.”
The British had developed the BDD chawls in the 1920s as a low-cost housing solution for the city. There chawls are spread over 93 acres in Worli, Naigaon, NM Joshi Marg and Sewri. The chawls, home to nearly 16,500 families, are 160-sq ft tenements with common bathrooms and toilets.
Hindustan Times: Versova creek in Mumbai has most mangrove species.
Mumbai has 6,600 hectares (ha) of mangrove cover with 6,400 ha in the suburbs and 200 ha in south Mumbai.
Even as four …
DNA: Most Mumbai Metropolitan Region home buyers want ready-to-move-in flats: Survey .
Once again it has been found that most home buyers want to put their money in properties that are ready to move in. A survey by Anarock Property co…
The Times of India: IAF objection halts construction near Thane base for over a year.
MUMBAI: After the army and navy, it is now the Indian Air Force that wants builders to stop construction near its base in Thane.
For more than a year, building activity close to the Indian Air Force (IAF) station at Kolshet Road in Thane (West) has come to a standstill after the station commander wrote to the local authorities not to approve projects near the base.
In a letter to the Thane municipal commissioner early last year, station commander Manu Kapoor said no construction be permitted up to 750m, especially on the chopper approach funnel, to ensure “safe helicopter operations”. The air force station was developed in 1968 and is spread over 146.8 acres.
Property market sources in Thane told TOI that more than two dozen residential projects with over 10 million sq ft space in the pipeline have been stalled. Only a few select builders have managed to receive the no-objection certificate from the IAF, it is learnt.
Last month, TOI had reported how around 2,500 families in Mumbai’s eastern suburb of Ghatkopar have been left high and dry with the navy refusing permission for redevelopment of their buildings.
Money Control: Private equity inflows in real estate at Rs 112 billion; office sector leads investments.
The residential sector sees higher inflows largely through domestic and NBFC route, but the current concerns on the asset quality and debt levels o…
The Asian Age: Grants relief to buyers in project with OC.
The Indian Express: Without nod to cut trees, BDD Chawls redevelopment project may be delayed.
The Economic Times: DLF inks pact with Hines for 12-acre Gurgaon plot joint development.
MUMBAI: Realty major DLFNSE 1.37 % has entered a pact with global real estate investment, development and management firm Hines to jointly develop a high-end commercial project on a nearly 12-acre land parcel in Gurgaon’s Udyog Vihar.
The company has entered into a non-binding term sheet with a fund managed by Hines through its wholly-owned subsidiary DLF Home Developers. DLF subsidiary will hold 51% stake in this partnership, while rest will be held by the fund managed by Hines, the developer said in a regulatory filing.
The company has not disclosed any financial details of the alliance with Hines. According to property consultants, the plot located close to DLF Cybercity has total development potential of 2.5 million sq ft.
ET was first to report, on August 27 that DLF was in advanced stages of dialogue with an investor for this transaction.
The transaction documents are under negotiation and subject to all other approvals as may be applicable.
DLF had acquired the said plot for nearly Rs 1,500 crore after emerging as the highest bidder for the same. This land parcel put on the block by Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) in a closely contested auction.
This was an unprecedented price paid ever for a land parcel in the NCR property market. The deal that was concluded through an e-auction earlier this year, at a base price of over Rs 127 crore per acre, had surpassed all earlier benchmarks.
Separately, the company reported consolidated net profit of Rs 373.21 crore for the quarter ended September as against Rs 12.57 crore a year ago. Total income for the period rose nearly 32% to Rs 2,304.90 crore.
The Times of India: HC quashes plan for golf course, towers on Navi Mumbai wetlands.
MUMBAI: The Bombay high court on Thursday scrapped plans for an 18-hole golf course and a residential colony with 17 towers on a large water body s…
The Hindu Business Line: Compact units fulfil housing dreams of millennials.
Apart from cars and super gadgets, millennials are in the fast-lane when it comes to buying a house as well.
More than one-third or about…
The Hindu Business Line: No construction, industrial activity in Delhi for 10 days.
EPCA clampdown as paddy straw burning, vehicle emission turn NCR air toxic
New Delhi, October 31
For Delhi reeling under pollution woes, more bad news is in the offing. According to the System of Air Quality and Weather Forecasting and Research (SAFAR) of the Ministry of Earth Sciences, the coming days could see a sharp deterioration in air quality in the National Capital Region.
A toxic cocktail of weather disturbances in the north and east India, increasing paddy straw burning in Punjab and Haryana coupled with Delhi’-NCR’s own pollution will turn the air toxic in the next ten days.
Particulate Matter up
Particulate Matter (PM) 2.5 levels in Delhi for Wednesday stood at 215 micrograms per cubic meter, up to four times higher than the acceptable levels. Similarly, PM 10 levels stood at 370 micrograms per cubic meter also close to four times higher than safe levels.
The Environment Pollution (Prevention and Control) Authority (EPCA) has therefore instructed that all construction activities involving excavation and civil construction (excluding internal finishing/work where no construction material is used) will be stopped in Delhi and other NCR districts from November 1 up to November 10.
The circular of EPCA further states, “All stone crushers and hot mix plants generating dust pollution will stop functioning in Delhi and other NCR districts from November 1-10.”
Also, all industries using coal and biomass as fuel will stop functioning in Delhi and other NCR districts from November 4 to 10. Industries that use natural gas as fuel can continue to operate. The order does not apply to power plants in the NCR (except Badarpur) and waste-to-energy plants.
Also, all diesel generator (DG) sets in Delhi have been shut as of October 15, and the Badarpur Power Plant in Delhi has been closed as of October 15, 2018, EPCA noted.
Also, the EPCA is issuing a letter to shut down brick kilns in Haryana, Rajasthan and UP on Wednesday. Brick kilns in the NCR will also be closed from November 1 to 10.
Industries to shut shop
The industrial area of Mundka will remain closed from November 1 to10 so that all debris of plastic, rubber and other waste are removed by the North Delhi Municipal Corporation, based on the EPCA’s inspection and directions, the central regulator said.
The EPCA has instructed all chief secretaries of the States involved to set up teams to patrol and impose fines on violators for garbage burning, industrial air pollution, dust mismanagement and visibly polluting vehicles.
The Indian Express: Mumbai: Public plot worth Rs 600 crore slips into private hands.
The plot, situated at Majas in Jogeshwari, is worth Rs 600 crore. When Mumbai’s previous development plan (DP) was finalised in 1991, the plo…
DNA: NHAI may go slow on road projects.
Even as the roads and highways sector is keeping an eye on the bumper round of bids to be floated in the next three months, the first half of the current financial year, however, saw just half a dozen projects being bid out by the National Highways Authority of India (NHAI). This is because several companies continue to face challenges in achieving financial closure for their earlier projects while land acquisitions for projects bid out during the last fiscal are yet to be completed.
“Since April this year, only 400-500 km of bids were awarded by NHAI. A lot many are left to be bid out, especially in a short span as once the general election is announced, no new bids would come out,” said an analyst.
On the matter, Sudhir Hoshing, joint managing director, IRB Infrastructure Developers told DNA Money, “There are two reasons for a regular flow of bids not coming from NHAI. First is that there are lot many projects that are in the process of achieving financial closure. These projects were awarded in the months of February and March 2018. In our case, we achieved financial closure of three Hybrid Annuity Model projects within a month. Possibly, authorities are waiting to see the fate of those projects that are yet to achieve financial closure.”
According to him, the land is still being acquired for the projects that have already been awarded.
“There are projects worth around Rs 70,000 crore that are yet to be awarded. With only three to four months left for the election model code of conduct to set in, it looks tough if NHAI will actually be able to bid out this quantum of projects. But, going by NHAI’s past, the way they had bid as many projects in Q4 FY18, they may repeat the same this time too,” said a road developer requesting anonymity. Roughly, projects involving around 5,500-6,000 km are yet to be awarded by NHAI.
The industry is expecting a slew of bids between mid-December and late January or early February, as the general election announcement during the latter part of the fourth quarter of FY19 will put the bidding cycle to a halt. However, the states of Rajasthan, Madhya Pradesh, Chattisgarh, Mizoram and Telangana, where the election is scheduled between November 12 to December 11, will not have a significant impact on the bidding activity.
Flooding as many road projects once again may further aggravate the funding challenges of the road projects at a juncture when the industry is already facing headwinds, with the latest being the liquidity crisis hitting the non-banking finance companies (NBFCs).
“Because of the focus on project completion in the current year, the pace of awarding of projects is likely to slow down. In the first four months of fiscal 2019, NHAI has hardly awarded any projects…
Banks are becoming conservative in lending to private players in the roads and highways sector given the problems players in the infrastructure sector are grappling with,” said Crisil’s latest report on infrastructure.
“The problem is especially acute for mid-sized players who have recently won projects from NHAI. Banks have misgivings about the balance sheet strength of such players and their ability to absorb a financial hit in case the projects are delayed. Banks are also uncomfortable because of wide discrepancies in costs estimated by the bidder and NHAI in a number of cases,” the report said.
As per a source, lenders including banks are giving priority to road projects of the companies having either ‘A’ or above ‘A’ ratings. Those having ratings below ‘A’ are not even considered to be funded, thereby delaying the financial closure process.
As a result, bids coming up in the next few months may not see aggressive participation by the road developers due to the ongoing liquidity crisis. Those with proven credentials, deep pockets and healthy balance sheet will remain in the race to bid for NHAI’s projects.
IN SLOW LANE
HIGHWAY CONSTRUCTION TARGET
16,420 km – Total target
9,700 km – Ministry of Road Transport & Highways’ target
6,000 km – National Highways Authority of India’s target
720 km – National Highways and Infrastructure Development Corporation Limited’s Target
The Economic Times: Realty PE inflows in Q3 highest in 11 years.
Mumbai: Fund inflows from institutional investors reached its peak of Rs 11,212 crore — highest third quarter performance in the past 11 years — indicating the continued momentum in private equity investments in the Indian real estate sector.
The investment volume increased 9 per cent from a year ago in the first three quarters of 2018 and stood at $5.6 billion (Rs 37,815 crore), signifying heightened investor confidence, showed data from Cushman & Wakefield.
The commercial office asset class accounted for nearly two-thirds of the investment volume during the quarter at Rs 7,140 crore. This is a marker for the continued strong institutional interest in the commercial sector for core and core-plus assets as well as opportunistic investments in brownfield and greenfield projects.
“As office space supply and demand continues to experience a robust increase, coupled with the emergence of co-working spaces in a phenomenal way, the investor confidence in the sector will continue to remain intact. While residential showed y-oy growth in 2018, we shall keep a close eye on the developing NBFC situation that has the potential to tighten liquidity flows to this asset class,” said Anshul Jain, country head & managing director, Cushman & Wakefield India.
Office sector investments during year-to-date 2018 have surpassed volumes by 1.3 times for the corresponding period of 2017. The large pipeline of transactions is expected to create a new benchmark and scale new peaks by the end of this year.
Jain believes that the surge in office investments was an expected trend, given the earlier forecast of several marquee office sector deals by private equity majors. Retail also continues to grow strong, with declining mall vacancy rates constituting heightened investor interest in this sector.
The residential sector has also seen higher inflows largely through domestic and NBFC route, but the current concerns on the asset quality and debt levels of NBFCs are likely to impact future disbursals amid the IL&FS default and concerns regarding developer credit defaults impacting NBFCs ability to raise from funds from banks.
“The recent liquidity crisis in NBFCs and HFCs will result in swift reduction of funds to real estate developers since banks and MFs have already reduced the flow of money for various reasons. This is expected to lead to a faster price correction in the highticket residential apartment segment as well as hasten the process of consolidation in the real estate sector going forward,” said managing director of Xander Finance, an NBFC-owned by the Xander Group.
Out of the key property markets, Hyderabad attracted the maximum attention from institutional investors with the city recording almost 60 per cent of the total investment inflows during the quarter. Mumbai was second with a 22 per cent share of the quarterly investment flows.
Some marquee transactions recorded in Hyderabad were Xander Investment Management’s commitment of Rs 2,550 crore in Phoenix Group for development and acquisition of an office project in Gachibowli, and forward purchase acquisition of office buildings in aVance Business Hub 2 by Ascendas India Trust.
The upcoming Real Estate Investment Trust (REIT) listing has also helped bolster investors’ interest as it will serve as a benchmark for monetisation and create liquidity for smaller investors to participate in the commercial office segment.
Realty PE Inflows at a Record
The upcoming quarter is also likely to see some key transactions with investors such as Blackstone, GIC, Mapletree Investments and the Canada Pension Plan Investment Board (CPPIB) eyeing lucrative office assets in Mumbai, Chennai and Hyderabad.
Retail has retained its strong showing in investment flows, but is still slightly lower in YTD 2018 compared with the corresponding period in 2017. However, Tier-II and III cities and opportunistic deals in larger cities are still being actively considered by institutional players.
According to the report, hospitality is finding favour again with refinancing as well as picking up of equity stakes in key hotel assets across the country. Increasing occupancy in both businesses as well tourist locations and attractive valuations for assets are attracting institutional players to this segment again. The focus remains on operational assets largely.
The Economic Times: We Work India leases office area in Bengaluru, Mumbai and Gurugram.
BENGALURU: The India arm of New York-based collaborative workspace major We-Work has taken on lease about 2.5 lakh sq ft of office space across Bengaluru, Mumbai and Gurugram as it seeks to expand operations, said people aware of the transaction. Of this, the largest lease is for 96,500 sq ft in Blue One Square in Udyog Vihar, Gurugram, followed by 90,484 sq ft in Mumbai and 60,783 sq ft in Purva Pavilion in Bengaluru.
The leases have a total tenure of 20 years, including an initial term of 10 years with an option to extend it by another 10 years unlike usual tenures of three, five or nine years. “With our rapid expansion, we are continuing our journey towards opening more spaces that inspire people to be creators, and foster the spirit of collaboration,” said Karan Virwani, chief executive officer at WeWork India.
In October, WeWork’s India arm had picked 0.5 million sq ft of office space in one of the largest deals by a co-working company across the Mumbai Metropolitan Region and Bengaluru. “Traditional office setups include exorbitant real estate expenses amounting to 9-12% of overall operating costs whereas shared, flexible spaces can save 20-25% of real estate costs. India will emerge as one of the largest markets for shared workspaces in the coming years,” he said.
The company has been picking up properties aggressively in a bid to expand the number of facilities to over 20 centres across key markets by December 2018. WeWork will double it’s seats across Delhi, Mumbai and Bengaluru, and reach 35,000 desks by the end of the year.
“At the beginning of 2018, we set out with the aim to double our locations by the year end. We are well on our way to achieving this, and we plan to expand to booming cities such as Pune, Chennai and Hyderabad by next year to reinforce this commitment,” said Virwani. The firm that started operations last year has so far leased 1.5 million sq ft across 12 office spaces in Mumbai, Delhi and Bengaluru, with over 15,000 desks.
Co-working, or collaborative, offices is a relatively new idea in India and is gaining momentum across key property markets due to lower costs and flexibility. As per estimates, co-working spaces witnessed nearly a million sq ft of absorption last year across the country. According to CBRE South Asia data, co-working and business operators leased about 3.3 million sq ft space in the first three quarters of 2018.
The Times of India: Jogeshwari plot goes back to its owners, reservations lapse.
MUMBAI: Reservation for a hospital, a recreation ground and housing for the dishoused on the controversial Majas plot at Jogeshwari has been delete…
Live Mint: Motilal Oswal Real Estate sells Shriram Properties stake for ₹125 crore.
Motilal Oswal Real Estate has exited Shriram Properties’s Shriram Greenfield, a 2 million sq. ft project near Whitefield, Bengaluru.
Mumbai: Motilal Oswal Real Estate, the realty-focused private equity arm of financial services conglomerate Motilal Oswal, on Monday said it has sold its investment in Shriram Properties, a Bengaluru-based developer, for ₹125 crore. The investor exited from Shriram Greenfield, a 2 million sq.ft project near Whitefield, Bengaluru. The fund had invested ₹67 crore in the Shriram project in December 2014 via an equity stake, thus exiting with a return of 1.87 times.
The investment was made from Motilal Oswal’s India Realty Excellence Fund II (IREF II). The ₹500 crore fund made its final close in April 2015, and is fully deployed across 14 investments.The fund has returned 107.5% of fund corpus (including capital and interest) to its investors within 3.5 years from its final close, a Motilal Oswal Real Estate statement said. It has another 40% capital invested across its balance six investments which would be exited over the next two-three years. IREF II has so far secured eight exits at an average internal rate of return of 21.2%.
“Shriram Greenfield Project is a good example of how even in tough market conditions, a project can be successful based on parameters like right configuration and affordable price point, favourable location, trust associated with the developer for timely delivery and quality of construction backed by active monitoring of the project,” said Sharad Mittal, chief executive, Motilal Oswal Real Estate.
The fund strategy has been to partner with trusted developers in top 6 cities and invest in their affordable/mid-income housing projects, he added.
Mint reported on 17 September that the real estate arm raised ₹575 crore, announcing the first close of its India Realty Excellence Fund IV. The fund will focus on early-stage structured equity or debt investments with established developers and undertake 12-15 transactions of ₹80-150 crore each. On 24 October, Mint reported that Motilal Oswal’s private equity arm raised ₹2,300 crore for its third and largest fund.
The Economic Times: Mumbai leads data centre business, Bengaluru 2nd.
NEW DELHI: Mumbai with 35 operators is the leading destination for establishing a data centre, followed by Bengaluru with 27 and Delhi-NCR with 19, a report said on Tuesday.
Tech growth, Smart City initiatives and easy availability of land and infrastructure has emerged as strong demand drivers for opening data centres in India, said the report by Los Angeles-based CBRE Group, one of the the world’s largest commercial real estate services and investment firm.
According to CBRE South Asia Pvt Ltd, Mumbai has led the data Centre business as it is one of the global cable landing locations in the country.
Cable landing stations or submarine cables are vital international telecommunication links between countries across the world, making them an essential element in telecommunication services including broadband connectivity.
Mumbai presently has four of the 10 cable landing stations in the country.
“Overall, the data centre market outlook looks positive on the back of the availability of land and skilled talent pool along with a huge, untapped market. Moreover, a slew of policy reforms undertaken by the Indian government have generated enthusiasm among overseas investors,” said Anshuman Magazine, Chairman, India and South-East Asia, CBRE.
Maharashtra and Telangana are among the quickest states to tap into the growing demand for data centres by announcing several incentive schemes for the sector.
Jharkhand and Chhattisgarh too have formulated policies for the IT-ITeS segment as well as introduced a single-window clearance system to encourage investors.
Despite having immense potential to become a data centre hub in the APAC region, the report also identified several hurdles in this path.
“Several states in India are yet to formulate policies for this segment. Additionally, issues such as a cumbersome approval process for the acquisition of infrastructure and prolonged environmental clearances also need to be addressed,” said the report.
The Economic Times: Mapletree bid highest for Chennai IT park.
Mumbai | Bengaluru: Mapletree Investment, a Temasekowned real estate asset manager, has emerged as the highest bidder to acquire IT park SP Infocity in Chennai, in what would be the largest-ever single realty asset transaction in India.
Mapletree has offered about Rs 2,450 crore for SP Infocity, jointly owned by the Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Investment Advisors, said three people aware of the development.
Large real estate transactions concluded so far in India such as the DLF-GIC deal worth $1.9 billion and the $1billion Hiranandani-Brookfield deal involved a portfolio of assets, while this transaction would be for a single asset. “Mapletree Investment has outpaced the GIC-K Raheja Corp alliance that had emerged as the other entity in the final lap,” said one person.
Blackstone Group, Brookfield Asset Management, Xander Group and Ascendas-Singbridge Group had also shown interest in acquiring this asset. Mapletree Investment and transaction advisor JLL India and CPPIB declined to comment for the story, while ET’s email query to Shapoorji Pallonji Investment Advisors remained unanswered until the time of going to press.
SP Infocity has 2.7 million square feet of leasable space and is over 99% occupied with key tenants including Amazon India, World Bank, HSBC and BNP Paribas.
DNA: MHADA receives 107 proposals seeking redevelopment in Mumbai.
After years but within months of being appointed as the planning authority, MHADA received 107 proposals from various MHADA buildings located in its layout and seeking redevelopment. Of these, 47 proposals have received various approvals. Of the 47 proposals, close to half a dozen are self-redevelopment proposals.
MHADA changed its policy where it had decided to give No Objection Certificates to only those buildings, which agreed to give housing stock in return. After this stand, the redevelopment of MHADA buildings had almost come to a standstill and there were hardly any proposals that reached the body.
However, later there was a change in the policy where the government allowed housing stock in certain cases and premium in certain other cases for giving out an NOC. This helped, as the authority started receiving various proposals.
“After MHADA has been appointed as the planning authority, and with the change in policy response has been good, we hardly received proposals earlier but within few months we got more than 107 proposals, of which 47 have received approvals at various stages. Apart from these close to 12-15 approvals have been sent back for further clarity. Many other proposals are being considered. The change in policy and MHADA becoming the planning authority will fasten approval work and help buildings redevelop quicker,” said a MHADA official.
The six self-redevelopment buildings are located at Ghatkopar, Mulund, Bandra and other areas.
Apart from this, MHADA officials say that currently there are some 2.10 lakh residents in the 114 layouts ( comprising of several buildings) of MHADA in the city. If all of them are redeveloped, apart from the 2.10 lakh rehab homes, lakhs of homes will be generated additionally, that will be sold in the market.
Most buildings are in a dilapidated condition and need redevelopment, but it was stuck at various levels. Now with approvals being handed out at MHADA, from where these buildings need permissions, it is expected that redevelopment will be quick.
The government earlier this year, allowed MHADA to become the planning authority for the 56 colonies of its 114 layouts and also for the homes to be constructed under the Pradhan Mantri Awas Yojana (PMAY urban). According to MHADA, since the time of appointment, they formed various cells that are active from the body’s office in Bandra, east.
CHANGE IN POLICY
To give out an NOC, MHADA later agreed to receiving housing stock in some cases & premium in certain other cases. With this change in policy, it started getting proposals for redevelopment
Live Mint: As real estate churns, it’s the customers now calling the shots.
Real estate developers are customizing products and are paying attention to what buyers really want from their residential properties.
The Indian Express: Wait for MHADA lottery gets longer; 1,194 homes on cards.
While the housing lottery had opened on August 10 and November 10 in 2016 and 2017, respectively, housing experts said this year, the applications for the lottery are rather late.
The housing lottery had opened on August 10 and November 10 in 2016 and 2017. (Representational)
Applicants awaiting the opening of MHADA’s housing lottery may have to wait a little longer. According to MHADA officials, the lottery for 1,194 homes in the city may open in time for Chirstmas.
While the housing lottery had opened on August 10 and November 10 in 2016 and 2017, respectively, housing experts said this year, the applications for the lottery are rather late. MHADA sources said an advertisement announcing the housing lottery will be issued by the authority on November 5. Applicants will have 45 days to apply.
The upcoming lottery will, however, offer 1,194 homes that will be open for allotment under the lottery. The number of homes allotted in 2017 was 819 and the same was 910 in 2016. However, majority of tenements up for grabs this year are under the Economically Weaker Section (EWS) and Lower Income Group (LIG) categories.
The lottery will offer approximately 500 homes under the LIG category, located at Gavanpada in Mulund and Siddharth Nagar in Goregaon.
Houses alloted in the MHADA lottery fall under four categories — EWS, LIG, Middle Income Group (MIG) and High Income Group (HIG).
The maximum monthly salary of a household to apply for an EWS house has to be Rs 25,000; for LIG between Rs 25,001 to Rs 50,000; for MIG Rs 50,001 to Rs 75,000; and for HIG, it is pegged at above Rs 75,001.
According to officials, the number of homes may change since the final list is still under preparation.
The HIG homes will be located in Pant Nagar and Sahakar Nagar in Andheri (West).
Homes In numbers
Total number of new homes: 1,001
Carried forward from previous lotteries: 136
The Times of India: Maharashtra offers 25 acres in Goregaon for new HC.
MUMBAI: The Maharashtra government on Monday submitted a fresh proposal for allotting around 25 acres of land for a new Bombay high court complex in Pahadi, Goregaon (West). This is an alternative to its earlier plan for a high court complex on around 15 acres of land in Bandra.
The offer of land in Goregaon was made after the high court indicated that the space in Bandra would not be enough to create all the necessary infrastructure for a court complex. A division bench of Justices Abhay Oka and Mahesh Sonak observed that the state was still to take a cabinet decision on allotment of land.
The court is hearing a public interest litigation filed by Mumbai advocate Ahmed Abdi, who had raised the issue of severe space crunch in the 140 -year-old building near Flora Fountain, Churchgate.
The bench has now scheduled the PIL for further hearing on Wednesday when the Bombay Bar Association, Association of Advocates of Western India (AAWI) and other parties will place their views on the state’s proposals before the court.
Senior advocate Anil Sakhare said a meeting was chaired by chief minister Devendra Fadnavis with top officers of various departments on October 22, 2018. The high court administration had sought around 50 acres for the court complex. As per the minutes of the meeting, submitted to the high court, it was discussed that while a large parcel of land was not available in Mumbai and its suburbs, it was possible to make available around 25 acres of private land in Pahadi area of Goreagoan.
The meeting further discussed that the original plans of allotting around 15 acres of land, by demolishing existing structures, was still on offer. It would take around three years to demolish the existing buildings on the Bandra plot, rehabilitate the occupants and make available land for construction purposes. The chief minister directed the authorities to consult the high court administration and prepare building plans for constructing the complex that would include court halls, chambers for judges, offices for the advocate general, government pleaders, public prosecutors and other functionaries, bar rooms and a high court library.
One contentious issue has been space for lawyers’ chambers which, the state said, cannot be accommodated in the Bandra complex due to paucity of land. The government had earlier said that since there was a height restriction of 50 metres in the area, it could construct 12-storey buildings in the new high court complex in Bandra with a floor space index (FSI) of 4 for the project.
The Indian Express: 9% of Mumbai Trans Harbour Link project completed.
According to officials, in phase-1, 12.28 per cent of the work has been completed; in phase-2, 5.37 per cent progress has been achieved; in phase-3, 5.4 per cent progress has been recorded.
The Mumbai Trans Harbour Link corridor will ease travel time between Mumbai and its satellite city, Navi Mumbai. (Representational image)
Nine per cent of the Mumbai Trans Harbour Link (MTHL) corridor has been completed, said R A Rajeev, metropolitan commissioner, MMRDA, Sunday after visiting the site. The corridor will ease travel time between Mumbai and its satellite city, Navi Mumbai.
The project, which commenced in March, is being constructed in three phases. According to officials, in phase-1, which involves construction of 10.38-km bridge, 12.28 per cent of the work has been completed; in phase-2 involving construction of 7.807-km bridge section, 5.37 per cent progress has been achieved; in phase-3 involving construction of 3.613-km bridge viaduct, 5.4 per cent progress has been recorded.
During the visit, Rajeev was briefed by experts that a total of 751 bore holes in marine and land areas have been completed for geotechnical investigation and that 11 per cent of the 2.9 km-long temporary bridge has also been constructed.
On Sunday, the Metropolitan Commissioner launched the Reverse Circulation Drilling Rig (RCD) at intertidal zone. The machine has been imported from Germany for speedy construction in marine areas. The commissioner instructed the contractors to deploy more such machines to achieve scheduled completion.
Rajeev also inspected the casting yard at Sewri Timber Pond, where activities such as construction of site office, casting bay preparation and a concrete batching plant work are in progress.
The project is expected to be completed by September, 2022.
Financial Express: Distant Dream: Home buyers stay away despite new launches, hefty discounts.
Builders are keeping their fingers crossed since 2018 is the first year after two years of disruptions — demonetisation and RERA and GST.
Big-bang launches and large scale bookings, symbolic of the festive season, are a thing of the past.
For the sixth year in a row home buying could turn out to be a low-key affair this festive season even though developers are trying every trick to woo consumers. There is some interest but whether the prices, freebies and discounts are enough to convert the queries into transactions is hard to tell. The smaller number of unit launches and the high inventories — much of it incomplete — suggests the sentiment is subdued.
Indeed, big-bang launches and large scale bookings, symbolic of the festive season, are a thing of the past. Arvind Nandan, ED (research), Knight Frank India, told FE the momentum, this time, is marginal. “The launches have been better but while demand was expected to pick up in the festive season, that has not materialised meaningfully as yet,” Nandan said.
But builders are keeping their fingers crossed since 2018 is the first year after two years of disruptions — demonetisation and RERA and GST. The management at Sobha believes that the transitional challenges may be behind us and that demand is picking up across all regions and segments.
However, estimates suggest that a total of over 618 million sq ft of under-construction inventory is available with the developers in top three cities. The amount of completed inventory is in the range of 75 million sq ft, according to analysts at Kotak Institutional Equities. “We highlight that at current levels of sales, the extant inventory will take as much as 50 months to absorb. However, if incremental sales are directed towards completed inventory alone, then the current inventory can be absorbed within 5-6 months,” they said.
Nonetheless, there is some underlying demand as seen in the number of enquiries. Nandan pointed out enquiries have been up about 10-15% compared to last year. “These are very subtle enquiries, like people just checking the going rates but not asking for much more,” he said. Mayur Shah, MD, Marathon Group, believes the sentiment is more positive than it was last year. “There is a better response from home buyers who are curious about the pricing and offers.” Shah said.
How many of these enquiries will convert into sales is not clear. Builders are doing their best, offering a nominal down payment on purchase, flexi payment schemes, a GST waiver, no EMI till possession, flat discounts on rates, free amenities & parking, white goods additions, or even winning schemes for expensive items like high-end mobile phones.
Among the launches, Bengaluru-based Sobha Developers is out with SOBHA Meadows in Mysuru and SOBHA Lake Gardens in Bengaluru that offer apartments with one to three bedrooms.
Mumbai-based Omkar Realtors recently introduced limited edition inventory of The Bliss collection at its existing project called Omkar Altamonte in the western-suburbs of Mumbai. It also launched Omkar Lawns & Beyond and Omkar Sereno both on Western Express highway in the city. Another Mumbai-based developer Marathon Realty recently is offering compact homes at price points of Rs 43 lakh and Rs 64 lakh in the eastern suburbs of the city. The launches, industry consultants say, will be in the Rs 60-80 lakh range, and mostly concentrated in Bengaluru, Hyderabad and in some northern India markets.
Builder asked to pay 5% of money paid for delayed possession.
Delayed possession of a flat has cost a building developer dear, who had to return five per cent of the total money paid to him by home buyers. Cus…
The Hindu Business Line: NBFC crisis to bring down land prices, trigger M&As in realty sector.
A shot in the arm for financially strong developers.
The ongoing NBFC crisis that has dried up liquidity for the real estate sector has…
The Hindu Business Line: NBCC to float tenders for six Amrapali projects.
SC appointed the group to develop 16 stalled projects.
The NBCC may invite tenders for the remaining six stalled Amrapali projects by next week. Recently, tenders were floated for 10 stalled projects of the group.
The Supreme Court in September appointed NBCC to develop the stalled projects of Amrapali group. Of the 16 stalled projects of Amrapali, nine are in Noida and seven in Greater Noida.
The projects have been divided into three categories based on the quantum of work remaining.
“There are different phases for the completion of project which varies from 12 months to 36 months. It depends on the kind of the project,” said AK Mittal, Chairman-cum-Managing Director, NBCC. The tender is being floated to appoint the contractor, which is selected through Quality and Cost Based Selection (QCBS) and will be entitled for the payment.
Out of the 41,690 sold units, 8,416 units have been handed over. However, no units have been handed over in the Greater Noida projects. Mittal said that apart from Amrapali, there is no other stalled housing project which has been taken up by the NBCC for construction.
After the Delhi court’s approval, the NBCC has ordered initial work for redevelopment of two colonies — Netaji and Sarojini Nagar, in New Delhi. The hearing for the redevelopment of the third colony— Nauroji Nagar— will take place in November. The work was stalled because of environment clearance.
Minor changes have been made for the redevelopment of colonies. There has been a reduction of two per cent in the number of houses which are being built.
Instead, more plants would be transplanted now. The company is also aiming to increase the use of technology to complete the projects at the earliest.
“Project monitoring is one of the biggest tools to complete a project on time. So, we are using the latest technology,” said Mittal.
The Afternoon Despatch & Courier: New autonomous corporation to speed up PMAY.
With a view to construct 5 lakh houses by 2022 under the Prime Minister’s Awas Yojana(PMAY) (‘Housing for All’ scheme), the state government has decided to set up the new corporation – Maharashtra Grih Nirman Vikas Mandal (MGNVM) (Maha Housing) which will be an autonomous body solely working for the purpose.
The decision to set up the new housing corporation was taken in a meeting of state cabinet held on Tuesday.
The duration of MGNVM will be till 2022 or till such time PMAY is on. The state Chief Minister will be the president, while the Housing Minister will be the additional president of the proposed corporation. There will be 6 non-government members and the government appointed CEO will be its Managing Director. All the officers and employees will be outsourced and as such there will be no financial burden on the Government.
Since heavy investment is required to construct lakhs of houses, the MHADA, SRA, Shivshahi Punarvasan Prakalp Maryadit (SPPL) and other government agencies will contribute towards the share capital of the proposed corporation which will also be empowered to raise money through banks and financial institutes in the open market. Besides, the grant received from the centre as well as Maharashtra government will also be made available to MGNVM.
Each housing complex will have at least 5000 houses for EWS, HIG and MIG. The housing complexes will be given 2.5 FSI in residential areas and one FSI in No Development Zone.
The Central government has already approved a plan to construct 19.40 lakh houses in 383 towns in Maharashtra, which are being constructed by MHADA, Nagarparishad Sanchanalay (DMA) and other local self governments under the Public Private Participation (PPP) and Joint Ventures. Now all these activities will be co-ordinated by the proposed corporation. This new corporation is being set up as MHADA and SRA are engaged in other work and cannot concentrate on PMAY.
Financial Express: Hyderabad top investment destination in Telangana real estate, says report; land prices rise 20% ahead of polls.
Ahead of the Assembly elections in Telangana, which are scheduled on December 7, Hyderabad is witnessing a sharp rise in land prices — the ju…
Business Standard: As NBFCs turn off tap, realty funds see deal proposal spurt but remain wary.
Given the demand for funds and tight lidquidity, PE funds are charging 150 to 200 basis points more in the new deals.
After non-banking finance companies (NBFCs) tightened liquidity flow to property developers over the past month, private equity (PE) funds are seeing a spurt in proposals from developers for funding.
“Developers need capital to sustain the current cycle. From that perspective, they are coming,” said Vikas Chimakurthy, chief executive officer (CEO) at Kotak Realty Fund.
Defaults at Infrastructure Leasing & Financial Services (IL&FS) has made it difficult for NBFCs to raise money, forcing them to avoid new lending and stop the disbursal of already sanctioned loans.
Sharad Mittal, CEO at Motilal Oswal Real Estate Fund, said after NBFCs had gone slow on lending to developers, deal flow had gone up significantly for funds like theirs.
- PE funds see spurt in deals
- Charging 150 to 200 bps more in new deals
- Structures such as ‘payable when able’ becoming popular
- Funds treading cautiously
- Funds becoming flexible in repayment
According to Reserve Bank data, NBFCs have exposure of 7.5 per cent to real estate. This amounted to Rs 1.65 trillion as on end-March.
However, property funds are treading cautiously, given the scenario in the segment.
“Where NBFCs have given significant leverage and the loan to value (ratio) is not justified, we cannot give money. In most instances, it is the case,” said Chimakurthy. He said the existing providers would have to write down their loans or take over the collateral from developers.
Amit Goenka, CEO at fund manager Nisus Finance Services, says: “The challenge is how developers generate cash flow. Banks and housing finance companies have gone slow. Customers are delaying payments as they know developers cannot cancel their projects.”
Given the demand for funds and tight lidquidity, PE funds are charging 150 to 200 basis points more in the new deals, market sources said.
“Funds are saying borrowers can pay at the end of the year, instead of quarterly or half-yearly. But, they come at higher rates, 20-22 per cent,” said the head of a PE fund, who did not want to be named.
Says Chimakurthy: “Cost of capital has increased across the market. That is given.”
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In the current scenario, structures like “payable when able” are becoming popular, wherein developers pay back their liabilities when cash flow comes. Kotak Realty Fund recently did a deal wherein the principal was guaranteed and returns would be taken when the cash began getting generated.
“Basically, we are riding the curve with the developers,” Chimakurthy said.
The Economic Times: Welspun India MD Mandawewala buys penthouse in Prabhadevi for Rs 150 crore.
In one of the largest residential apartment transactions, textile major Welspun India’s co-promoter and managing director Rajesh Mandawewala …
Live Mint: Real estate sector to chart new growth story, will grow 35% annually in next 5 years: Niranjan Hiranandani.
Niranjan Hiranandani, CMD, Hiranandani Communities sees 2016 and 2017 as a threshold story, which will be the beginning of growth for a new era.
Though the real estate sector is under stress for the last few years, this could be the beginning of a new growth story, said Niranjan Hiranandani, president (national), National Real Estate Development Council (NAREDCO) and chief managing director of Hiranandani Communities. The survival trick for developers and investors is to adapt to the changing environment and government policies.
The real estate sector, especially the residential housing segment, is witnessing a lull since about five years. What was the problem?
First of all you have to understand that there has been a certain trend of construction working experience environment which took place in the last 25 years. This led to a certain system of working which was put to an end by 2016 and 2017. So there’s a change; whenever change takes place, either you adapt to the change, resist change or work towards the change in a positive or proactive manner.
Before I explain further, I will go back. In 1991, there were only two cars, Fiat and Ambassador. They thought they will last forever, because they had a waiting list of about 25,000 cars. And the production was 10,000 cars a year. So they thought nothing is going to happen at least for the next two-three years.
Plus, they got a commitment from the West Bengal government that Ambassador will be used permanently for taxis and that the government will buy only Ambassador cars. Similarly, in Maharashtra, the government said that taxis will always be Fiat cars.
They said since we have such securities, we need not change anything. However, the automobile sector was opened completely and then Maruti, Mercedes and other carmakers took over. Now millions of cars are being sold. That was a paradigm shift and those who didn’t understand it, got finished. Similarly, look at the monopoly of Indian airlines, or that of MTNL.
Similar changes have taken place now (in real estate). Those who understand that change and are willing to understand and accept the new order will be okay. But those who were already in difficulty in the previous regime will not be able to come into the new era until they extricate themselves in terms of resolution of earlier problems.
You may be as strong as DLF to say that I will not sell during construction and be able to get away with it, or there will be people who will tie up with others, or those who will work out some development model, or do something to sort out the problems of yesterday, or there will be people who will behave like an ostrich and put their heads in the sand and say that everything will be okay once the storm is gone.
Now, those people who put their head in the sand waiting for the storm to stop are finding that the storm is getting stronger. Ideally, they should have moved to a safer place.
At present, developers are struggling with demand, regulatory changes and funding. What lies ahead for them?
Those who will look in the right direction will move into a new segment and see a growth story of 35% compounded increase in business per year for the next five years. If we grow that much, we will achieve a part of the prime minister target (Housing for All by 2022). The prime minister wanted it (the real estate sector) to grow at 60% per annum to achieve his target. Growth is there—whether it’s 35% or 60% is the only issue.
Whether or not you change your methodology to do whatever is better is up to you. Are you going to be in the old world of Fiat and Ambassador, Indian Airlines, Air India or are you going be the Indigo of the world where you will be able to do extremely well. Or you are going to be that Jio of the world, where you can eat up everyone else.
ALSO READ: Reasons to not give up on Indian real estate
All that depends on how you look at your business. So I see 2016 and 2017 as a threshold story which will be the beginning of growth for a new era. But you have to modify and position yourself. If you do that, then the wind will take you up, but if you don’t, wind will trough you down.
Does that mean the problem was with the way developers were doing business?
No, the environment was like that. So nothing was wrong pre-1991. But the environment changed and the policy changed. Once the policy changes, you need to fit with the new policy; if you don’t change you will be finished.
If you are willing to change according to what the new situation merits, which is having adequacy of capital, transparency and taking care of the customer and setting up a new base, you will have no problem. Because there is a growth story there. Are you going to be a part of that story or not is the issue.
I don’t see any difficulty in terms of the future. I do see difficulties for those who don’t want to adapt to the changes that are taking place.
You said that after RERA, transparency has increased, but if you go through the details of registered projects on RERA websites, many developers have listed a completion deadline of 5-6 years from now. Typically, developers used to give deadlines of maximum three years.
Those who have written 5-6 years are not getting sales, so you can write whatever you want, but if your customer is not happy, if the customer wants to invest her hard-earned money and wants to get a house and if she goes to somebody who will say we’ll will give it in six years, she’s not going to buy.
These developers are being extra cautious, which is correct at this point of time. But now at least customers are well-versed; they have the information and they can take decisions accordingly.
But real estate agents and developer executives mislead customers saying these completion dates are just for statutory purpose, and that the project will get delivered in a year.
Very simple, if you buy it considering the words of executives instead of what’s written on the RERA website, you will be responsible for your losses and problems, and you can’t blame anyone else. Customers should consider information provided by the developer on the RERA website.
Insolvency cases should get resolved soon
How have insolvency proceedings against developers impacted sentiments of developers, real estate investors and home buyers?
The impact has been 100%. But there is no sense in that. Even investors who had the capacity to buy one flat had bought five because they were anticipating that they will be able to sell four once prices go up, making the fifth one free.
But definitely the consumer has been badly hit. So whether he’s an investor, consumer or an over-jealous customer, it is the duty of the developer and the government to see that these large projects, especially those of the size of Jaypee, Amrapali or Unitech, should get resolved, with intervention if necessary.
Live Mint: Ajmera Group to invest $10 million in tech startups
Bengaluru: Mumbai-based real estate developer Ajmera Group will invest up to $10 million in technology-based startups, with a focus on fintech and software-as-a-service (SaaS), as part of its expansion plan. It has already picked up stakes in three startups and plans to invest in another seven by the end of June 2019, said a top executive.
“We are primarily in real estate, but with opportunities coming up in the startup space and the vision of the government, I feel it is a great business opportunity. The future definitely looks good. It gives us an opportunity to enter into a line of business which will grow organically,” said Dhaval Ajmera, director at Ajmera Group.
According to Ajmera, Ajmera Group will also consider acquisitions of such companies. Two years ago, it had backed BookMeIn, an online marketplace for services, besides investing in The Sports Gurukul, which runs sports programmes in schools and colleges, and ModuleX, a modular kitchen development startup.
Ajmera, founded 50 years ago, has diversified into various sectors over the years, including power, steel and education. In September, Ajmera entered Bahrain and London with their first international project, according to a Business Standard report. The company also plans to develop residential projects in Rajkot, Bengaluru and Mumbai.
In September 2017, the Lodha Group had tied up with Mumbai-based start-up incubator Zone Start-up India (ZSI) and had launched Palava Accelerator. Lodha had initially invested about $7.8 million in real estate and smart cities.
In 2016, venture capital and private equity investments in Indian startups had dropped by almost 24%, according to a joint report by KPMG and CB Insights. But the funding boom is back after US retail giant Walmart’s 77% stake acquisition in Flipkart. The content startups space, which has benefited from the revival in funding, is projected to close over $400 million in deals by the end of this year, Mint had reported in August.
But with the return of the funding boom, Ajmera will likely face competition from investors such as SAIF Partners, Matrix India Partners and Sequoia Capital, apart from its real estate peers such as Lodha.
Hindustan Times: Activists to go NGT way to put Mumbai’s mangroves on the map.
Alleging the recently published final coastal zone management plan (CZMP) maps for the city has left mangroves, wetlands, salt pans with no protect…
Hindustan Times: Mumbai Metro work causes rush on western line; 20 lakh more WR commuters in September.
A total of 10.96 crore passengers used the Western Railway (WR) in September 2018 as against 10.76 crore in September 2017 — an 18.5% rise, d…
DNA: Mumbai: Sewage plant near coastal road to be beautified.
The Brihanmumbai Municipal Corporation (BMC) wants to leave no stone unturned for its ambitious Coastal Road Project. It is for the same that the c…
DNA: Have a equitable policy for cessed and uncessed buildings: Developers.
Realty players in the state have appealed to the state government to provide incentives in the form of additional floor space index (FSI) to both cessed and non-cessed building owners. This comes in a bid to kick off composite development plan consisting of cessed and un-cessed buildings under the single or multiple ownership of old and dilapidated buildings, that have come up before and after 1969 in the island city and suburbs.
For the cessed buildings, the state government in the recently released Development Control and Promotional Regulations (DCPR) 2034, has mentioned that the FSI will be equal to that required for rehabilitating existing lawful tenants plus 50 per cent incentive FSI. This means the tenant living in a 200 sq ft tenement will get 300 sq ft after redevelopment.
However, for non-cessed building on the same plot, as per the DCPR, the owner will get utilised or consumed FSI. The city-based CREDAI-MCHI, a representative body of 1,800 developers, said that DCPR 2034 with regards to non-cessed buildings gives the tenants their rightful privileges but fails to deliver any incentive to the owners of such buildings. The tenant will get 200 sq ft of dwelling unit but the owner will not get any incentive and this will effectively derail the redevelopment process in Greater Mumbai.
CREDAI-MCHI president Nayan Shah argued that if the owners of old buildings are not given any incentive, they will have no reason to part with their land and building. This will effectively not just stall the redevelopment of dilapidated buildings but also risk the lives of a large number of people. In his letter to the state urban development secretary, Nitin Kareer written on October 15, Shah has stressed on motivating owners to go for redevelopment.
Builders Association of India’s Infrastructure Committee chief, Anand Gupta said that additional 50 per cent incentive is to be given to the landowner as compensation for his land and structure. “In such a scenario all landowners will come forward to cooperate with the tenants and developers for the faster redevelopment of nearly 26,000 old and dilapidated buildings from Greater Mumbai,” he added.
Not Fair They Say
CREDAI-MCHI, body of 1,800 developers, said DCPR 2034 with regards to uncessed buildings gives the tenants their rightful privileges but fails to deliver incentive to the owners of such buildings
The Economic Times: Housing sales up 24%; new supply down 35% in 9 cities in Jul-Sep.
Top nine property markets in the country saw 24 per cent increase in housing sales during July-September period, but new launches declined by 35 per cent resulting in a fall in unsold apartments, according to News Corp-backed brokerage firm PropTiger.com.
Housing sales rose to 72,472 units during July-September 2018 from 58,470 units in the year-ago period across nine major cities. New launches dipped to 35,836 units from 54,170 units, while unsold stocks fell by 11 per cent to 7,80,424 units during the period under review, PropTiger said in its ‘Realty Decoded’ report for Q2 of FY19.
These cities are Ahmedabad, Bengaluru, Chennai, Gurugram (including Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane), Noida (including Greater Noida and Yamuna Expressway) and Pune.
“An increase in sales combined with a fall in launches is good news for the industry. The resulting decrease in inventory is a harbinger of increased activity in the sector over the next 12 months and points towards an upward movement in prices going forward, PropTiger.com’s CEO Dhruv Agarwala told PTI.
Ankur Dhawan Chief Investment Officer of PropTiger said that significant reduction in launches clearly indicates that developers are focusing on the completion of existing projects rather than launching new ones.
As per the data, Noida saw the maximum rise in sales by 59 per cent to 6,652 units, while launches fell by one-third to 1,617 units. Higher sales and lower new launches resulted in 20 per cent decline in unsold inventories to 69,953 units.
Sales in Mumbai region were up by 22 per cent to 22,969 units during the second quarter of this fiscal compared to the year-ago period. Launches fell sharply by 59 per cent to 11,603 units. Unsold stocks reduced by 8 per cent to 3,01,761 units.
Pune witnessed 50 per cent increase in sales to 13,833 units. New launches were down 44 per cent in this city to 6,248 units, while unsold stocks fell 12 per cent to 1,37,166 units. Old stocks fell by 12 per cent to 36,588 units.
Sales in Bengaluru rose by 27 per cent to 9,367 units, while launches were up by 30 per cent to 4,598 units. The unsold units fell by 14 per cent to 75,116 units.
Chennai saw 54 per cent rise in sales to 4,781 units. Launches jumped more than two-fold to 2,380 units. Unsold stocks in the city fell by 16 per cent to 33,852 units.
The apartment sales in Hyderabad rose by 49 per cent to 5,577 units, while launches jumped more than two-times to 3,296 units. Unsold stocks dropped slightly to 38,119 units.
Kolkata witnessed 6 per cent rise in sales to 3,915 units and 31 per cent increase in launches to 2,927 units. Unsold stock remained flat at 43,803 units.
Housing sales in Gurugram fell by 43 per cent to 3,332 units, but launches dipped by 46 per cent to 1,839 units. Unsold stocks fell 14 per cent to 44,066 units.
Ahmedabad saw 15 per cent decline in sales at 2,047 units, while launches fell by 28 per cent to 878 units. Unsold inventories fell by 12 per cent to 36,588 units.
The Economic Times: Tata Realty frontrunner to buy Chennai land for Rs 500 crore.
BENGALURU|MUMBAI: Tata Realty and Infrastructure Ltd (TRIL) has emerged as the frontrunner to acquire a 22-acre land parcel in Chennai from Xander Investment Management and Realvalue Promoters for about Rs 500 crore, two people aware of the development told ET.
If TRIL clinches the deal, it will be the first large transaction that the company will have undertaken after it reorganised its operations. “The company is conducting due diligence on the property located on Thoraipakkam road in Chennai, an upcoming IT corridor. While TRIL is the frontrunner, a local Bengaluru-based builder is also in the race,” the persons cited earlier said, requesting not to be named.
Email queries to Xander Investment Management and Tata Housing Development Company remained unanswered till the time of going to press on Monday. Xander Investment Management had invested about Rs 220 crore as debt four-five years ago in a residential project by Realvalue, but the project failed to take off. “Realvalue has defaulted on many projects and now the fund is looking to recover its money by divesting the land parcel,” said one of the persons cited earlier, requesting not to be named.
In a bid to simplify structures and leverage synergies, Tata Sons had recently announced the reorganisation of its infrastructure and real estate businesses— TRIL and Tata Housing Development Company. “The company has been actively looking for growth opportunities, including joint developments and outright land deals, to support its future growth,” the person cited earlier said.
Live Mint: Bengaluru’s Puravankara re-enters Mumbai housing market.
Mumbai: Bengaluru-based Puravankara Ltd has purchased a two-acre plot at Chembur in suburban Mumbai for ₹147 crore, two people familiar with the development said, marking the property developer’s return to the financial capital that it left over three decades ago.
According to the people cited above, who spoke on condition of anonymity, Puravankara purchased the land from Food and Inn Ltd, a food exports company, to develop a residential project.
The project, with development potential of 3.5 lakh sqft, is estimated to cost around ₹500 crore. Construction is likely to start in five to six months, the people cited above said. Property adviser JLL India was the transaction adviser to the deal. Puravankara did not respond to emailed questions while JLL declined to comment. Spokespersons of Food and Inn were not immediately available to comment on the transaction.
“The land sale is part of Food and Inn’s plan to exit non-core assets,” said one of the two people cited above. Chembur has emerged as a new residential hot spot thanks to connectivity with prime locations in Mumbai city. The suburb saw its last major land deal in January 2017, when PepsiCo sold its 2.3-acre Duke’s plant to real estate firm Wadhwa group for ₹167 crore. The Kapoor family, owners of the iconic R.K. Studio set up by legendary Bollywood actor Raj Kapoor, has also put up the property for sale.
Founded in 1975, Puravankara built residential projects at Versova, Yari Road, Malad and Chembur near Mumbai until the late 1980s, before shifting base to Bengaluru in 1986. According to a third person who also spoke on condition of anonymity, Mumbai is one of the seven cities, including Chennai, Bengaluru and Pune, that Puravankara plans to focus on as part of its new growth strategy. In the last two years, Puravankara has made tentative efforts to re-enter Mumbai, signing joint development deals at Mulund, Bhandup and Goregaon in the suburbs. However, all these projects are still awaiting regulatory approvals, this person added.
On 26 February, Mint reported that Puravankara is planning to form two separate investment platforms of around ₹4,000 crore each along with institutional investors to finance expansion.
The two funds would be used to finance its new pipeline of affordable housing projects and to build a sizeable commercial rental portfolio within the next five years, Ashish Puravankara, managing director, Puravankara Ltd said in the report.
DNA: MahaRERA denies relief, turns down home buyer’s complaint.
When a home buyer approached MahaRERA complaining against the developer for a delay in possession seeking an interest on the amount he had paid to the developer, the authority noticed that the home buyer was already residing in the apartment since 2012 even though the building did not receive an occupation certificate, hence denied him relief.
The authority then ordered the developer to get the OC within three months, failing which he shall be liable to pay interest to the complainant till OC is received.
Amol Jadhav a home buyer complained against Balkrishna construction and three others, to MahaRERA seeking directions, to the developer to obtain OC within a stipulated period and pay the municipal charges, water charges, MHADA charges to all concerned authorities and also pay interest from actual date of possession till the handing over possession of the flat. The flat was in Rohini Niwas building located at Vikhroli.
The buyer argued, he purchased the flat and registered the agreement on April 25, 2011. The developer was liable to hand over possession of flat on or before December 31, 2011. The buyer paid 100 per cent consideration to the developer; the developer gave possession to the buyer in November 2012, without OC.
DDA: Protests against Metro-2B will result in cost escalation of project: MMRDA.
While protests by citizens and court cases have slowed down the pace of civil construction work on DN Nagar-Mandale Metro-2B, the Mumbai Metropolitan Region Development Authority (MMRDA) opines that the delay may cost them a loss of Rs 3 crore per day. Currently, the civil construction work is delayed by around three to four months at least.
High Court’s stay on construction work except that for utilities and conducting soil testing has led to the delay. If its delayed further, it may result in cost escalation of Metro-2B, fears MMRDA.
“After residents from Bandra, Khar and Juhu challenged the construction of Metro-2B on the ground instead of underground, the matter is with the HC. The case is in court since May 2018, and this has delayed our work by around 3-4 months. We will have to bear the cost of around Rs 3 crore daily as contractors are not able to do piling work in places which have been barricaded,” an MMRDA official said.
The MMRDA official added, “Owing to the monsoon, work did not progress between June and September. However, work is affected during monsoon is something we deal with every year. more delay will ultimately result in contractors claiming for delays that will increase total project cost in the end.”
The total project cost of Metro-2B is Rs 10,986 crore of which civil construction is funded by MMRDA, and rest is being funded by the Asian Development Bank in form of a loan.
The construction of Metro-2B has courted controversy after residents from Bandra, Khar and Juhu challenged the construction of Metro-2B on the ground instead of underground.
The Metro-2B DN Nagar-Mandale corridor is 23.5-km-long and the DN Nagar-Mandale Metro corridor is a part of the Metro-2 (Dahisar-Charkop-Bandra-Mandale), which was earlier planned underground but was later turned into an elevated corridor. The line was also divided into two parts namely Dahisar-DN Nagar Metro-2A, DN Nagar-Mandale Metro-2B.
- Meanwhile, earlier the same issue of cost escalation due to legal tangles was also faced by Mumbai Metro Rail Corporation (MMRC) constructing the Colaba-Seepz Metro-3 underground corridor. Due to a stay on felling of trees for the project, the MMRC had claimed it suffered a loss of Rs 4 crore daily.
- The total cost of Metro-3 is estimated to be around Rs 23,000 crore that is funded by Japanese International Cooperation Agency.
- MMRDA also scrapped the plan to purchase platform screen doors for the Metro stations of Metro-2B as they fear that civil construction will be delayed.
Hindustan Times: Civic body to reclaim 2 acres near Girgaum Chowpatty for Mumbai’s coastal road project.
The Brihanmumbai Municipal Corporation (BMC) is set to reclaim more than two acres near Girgaum Chowpatty and Priyadarshini Park, as part of work on the two underground tunnels for the coastal road.
The 3.45-km underground twin tunnels, part of the ₹12,721-crore first phase of the project, will start from Princess Street flyover to Priyadarshini Park, running under Girgaum Chowpatty and Malabar Hill.
The reclaimed space will be used to launch shafts of a 12.2-m wide Tunnel Boring Machine (TBM) that will excavate the soil.
The work at these areas, chosen to avoid slowing down traffic in South Mumbai, is likely to begin from November 1, according to a civic official.
The TBM will begin the excavation work near Priyadarshini Park and it will be retrieved at a site around Girgaum Chowpatty, near the Thackers Club.
“As the tunnels are running through many prominent areas of the city, placing barricades or blocking traffic at these places is not possible. So, the launching shafts will be at this to-be reclaimed land and there will be no traffic inconvenience to citizens,” said Mohan Machiwal, chief engineer, coastal road.
In a meeting last week, with the contractors and consultants, the civic chief Ajoy Mehta asked three companies to begin mobilisation of resources. The work is expected to be completed in 48 months and the civic body will levy penalties on both the contractor and consultants if they do not adhere to the schedule.
The three companies will also have to submit a primary design to the civic body within three months, starting from October 1.
Earlier this month, the BMC gave its final approval to the construction of the first phase of the coastal road — a 9.98-km road between Princess Street flyover and Bandra-Worli Sea Link (BWSL). The construction of the road, which is divided into three packages, will begin simultaneously.
The civic body will reclaim 90 hectares for the project.
Of the 90 hectares, 70 hectares will be available for landscaping and for other facilities like a police chowky, public toilets, pedestrian crossing and bus stops.
Dodamarg-Sawantwadi forests not included in ESA in Western Ghats.
The Union environment ministry, in a draft notification released on October 3, proposed the declaration of 56,825 sqkm or 37% of the Western Ghats as ESA, but left out the 38kmx10km forests of Dodamarg-Sawantwadi belt in Maharashtra’s Sindhudurg district in the classification.
Not including the Dodamarg-Sawantwadi forests, an important elephant and tiger corridor along the Maharashtra-Goa border, in the ecologically sensitive areas (ESA) in the Western Ghats will expose them to the threat of mining projects, said experts.
The Union environment ministry, in a draft notification released on October 3, proposed the declaration of 56,825 sqkm or 37% of the Western Ghats as ESA, but left out the 38kmx10km forests of Dodamarg-Sawantwadi belt in Maharashtra’s Sindhudurg district in the classification. While the proposed Western Ghats ESA for Maharashtra is spread across 17,340 sqkm, this is the second time this corridor has been left out after a similar draft notification in 2015.
The wildlife corridor, home to tigers, leopards, elephants, sloth bears, civets, pangolins, several resident and migratory bird species, and even the Indian giant squirrel (Maharashtra’s state animal), connects the Radhanagari Wildlife Sanctuary in Kolhapur in Maharashtra to Bhimgad Wildlife Sanctuary in Karnataka. The state forest department confirmed the area has 22 to 25 tigers and the recent record of a family of four elephants.
Environmentalists said the area was left out by the Centre despite a Bombay high court (HC) order from 2012 that banned tree felling in the Dodamar taluka based on a petition by NGO Awaaz Foundation, and another order from 2015 declaring it an ESA.
“The Centre is violating the HC order on finalising the ESA for this tiger corridor. They have deliberately left out villages in this area to allow the mining lobby to enter Maharashtra as they had done in Goa,” said Stalin D, director, NGO Vanashakti, petitioners in HC who got Dodamarg-Sawantwadi declared an ESA.
Vanashakti, petitioners in the matter, shared satellite images of one of the villages Dodamarg-Sawantwadi – Udeli – which has been included in the Centre’s draft notification, but over the past three years have fallen prey to large-scale tree cutting. “Other villages such as Gharpi, Kumbral and Shirval are also witnessing the same pattern. The loss of primary forests will soon dry up the water resources of the region, causing siltation of the reservoirs, rivers and will impact movement of wildlife,” said Stalin.
Declaring an area as ESA means restriction on projects such as mining, quarrying, thermal power plants, setting up of industries and construction. The latest draft notification was a result of a National Green Tribunal order from September 4, following the Kerala floods, directing the environment ministry to finalise the ESA at the earliest.
“The draft has been made based on the 2013 report of the high-level working group under former ISRO chairman K Kasturirangan. We have also incorporated inputs from states. Those that oppose the draft can submit suggestions and objections till the first week of December,” said a senior official from the Ministry of Environment, Forests and Climate Change.
Madhav Gadgil, ecologist who headed the Western Ghats Ecology Expert Panel formed by the Ministry of Environment and Forests in 2010, confirmed the mining mafia had been eyeing the land for years. The Gadgil committee report was scrapped after states such as Kerala objected to its recommendations, citing dilution of development activities.
“In our report, we had quoted petitions from gram sabhas across 25 villages in Dodamarg-Sawantwadi that had passed resolutions asking their areas to be declared ecologically sensitive. Currently, such democratic processes have been completely sabotaged, and the current process of declaration is improper,” said Gadgil. “Mining mafia is very likely involved and this kind of imposition of such activities is unconstitutional, considering the area is wildlife hotspot.”
Senior forest officials said they were aware of the ecological significance of Dodamarg and had directed the Wildlife Institute of India (WII) to carry out a detailed study to find out whether the area forms an elephant and tiger corridor. “A preliminary site visit by experts has been completed. We have asked WII to submit a project proposal with estimated cost of the study, and this is in process,” said Virendra Tiwari, chief conservator of forest (Mantralaya), state forest department. “The HC has already given express directions to protect this region, and our department is ensuring its full safety.”
WeWork India leases four office assets in Mumbai, Bengaluru.
MUMBAI: New York-headquartered collaborative workspace major WeWork’s India arm has picked up 0.5 million sq ft office space in one of the largest deals by a co-working company. The space was leased across four locations in two major property markets of Mumbai Metropolitan Region and Bangalore pushing its total portfolio to nearly 2 million sq ft.
Of this, the largest lease is for nearly 2 lakh sq ft in Navi Mumbai, followed by nearly 1.5 lakh sq ft in Bangalore. Interestingly, these leases have tenure of total 20 years including initial term of 10 years with an option extend it by 10 years unlike usual tenures of three, five or nine years.
“As the shared workspace industry evolves rapidly, we have observed that more and more people want to work out of spaces that inspire them and help them connect and network with people,” Karan Virwani, CEO, We-Work India, told ET.
The company has been picking up properties aggressively in a bid to expand number of facilities to over 20 centres across key markets by December 2018. Last month, it picked up an entire commercial building, Zenia, spread over 12 floors, on lease in Hiranandani Estate, Thane.
Zenia was the second transaction involving an entire building by WeWork. In May, the company had leased Raheja Platinum spread over ten floors in Andheri suburb of Mumbai.
“We plan to continue expanding across the country and this will further add to our growth in India. Keeping in mind the growth and expansion of new business hubs in Mumbai and Bengaluru, these locations were a natural fit and choice for us,” Virwani said.
The company had earlier leased a 1.9 lakh sq ft standalone building owned by Enam Securities Group in Mumbai’s commercial business district of Bandra-Kurla Complex. In addition to this, it has also leased two buildings in Worli and 1lakh sq ft office space in Navi Mumbai.
Since its inception in India in July 2017, WeWork has expanded to total 11 centres across three key cities — Mumbai, Delhi and Bangalore — with over 15,000 desks across 1.4 million sq ft leased office space.
WeWork India will add around 7,225 desks to its existing capacity with these four new centres.
Co-working, or collaborative offices, is a relatively new concept in India. It involves various individuals, or start-ups, sharing a common workplace environment and is steadily gaining momentum across prime Indian property markets due to relatively cheaper costs and flexibility. According to several estimates, co-working spaces witnessed nearly a million sq ft absorption last year across the country.
Latest data from CBRE South Asia showed the agile workspace sector continued to see strong growth momentum with global and Indian majors expanding their footprint in tier-1 and tier-2 cities. Co-working and business operators leased about 3.3 million sq ft space in the first three quarters of 2018, almost doubling their take-up reported in the first three quarters of 2017.
Review South Bombay bungalow redevelopment nod, Mhada told.
MUMBAI: In partial success over a legal battle launched by some residents of Carmichael Road, also known as Millionaires Mile Road in south Mumbai, the Bombay high court directed the state housing authority to reconsider its approval for redevelopment of a two-storey bungalow, Villa Nirmala, into a 24-storey residential tower. The HC observed that authorities failed to apply its mind over relevant issues, including location of plot, width of abutting road and assignment of tenancy, while granting the clearance six years ago.
A bench of Justices Shantanu Kemkar and Nitin Sambre, invoking the doctrine of public interest, said the authorities are required “to strictly apply the law”, consider relevant facts, and “maintain transparency in dealing with request of parties like builder” for approval of plans to redevelop pre-1940 tenanted structures. “There should neither be any abuse of discretion nor… mechanical approach to the decision-making process,” said HC.
In 2016, Carmichael Road residents filed a PIL against the construction and permission granted to builder RA Realty Ventures by Mhada in 2012 and BMC in 2014. The petitioners included Normandie housing society, Prakash Patel of Usha Kiran building, Dilnar Chichgar of Mayflower building and Jyotsna Nevatia of Kamal Mahal building.
Over 80% of the structure is ready. The British-era villa was originally owned by Maharaja K K Shivajirao Gaekwar who had two tenants.
The HC did not restrain the construction, but said development would be subject to further proceedings and decision to be taken by Mhada and BMC afresh over clearing the project under DC Regulation 33(7) (permission to redevelop tenanted cessed buildings) and the height approval. But the HC, on request of the builder’s counsel, “stayed only that part of the judgment by which the authorities have been directed to reconsider the matter”.
It was an ‘A’ category cessed building (pre-1940), said Mhada counsel Prasad Dhakephalkar, entitled to greater FSI on redevelopment. Residents’ counsel, Janak Dwarkadas, argued that the bungalow ceased to be a cessed structure in 1975 with a conveyance of the 2 tenants into ownership. But counsel for the builder, R A Dada and Milind Sathe, argued that the tenancy had not ended. The builder has assigned the so-called tenancy to two new tenants in 2011, just before becoming the new landlord, argued Dwarkadas, and the approvals were valid as the building remained cessed. “The authority is also required to look into whether there is misrepresentation of vital facts,” said the HC.
Mint: Builders scale down, exit projects amid cash crunch
Some developers have avoided new launches, focusing instead on finishing projects.
Squeezed by impatient lenders on one side and angry customers on the other, many property developers are shrinking their businesses or planning to exit altogether. Some of them have avoided new launches for years, focusing instead on completing ongoing projects, selling land and finding partners for development.
The reasons: a crippling cash crunch and heavy debt in a market that has flatlined in the past four-to-five years, besides a tough real estate law.
Kumar Urban Development Ltd (KUL), one of the biggest land owners in Pune, has not launched a project in three years, a person in the know said, asking not to be identified. According to two others, it recently sold 300 acres at Hinjewadi and Manjari Khurd to VTP Group—another local builder—and institutional investors. The land sale is part of KUL’s strategy to repay debt.
Lalit Jain, chairman and managing director, KUL, declined to comment on the land sale, but said, “We have been trying to sell a few of our assets. We are debt-free now. We will come up with our next growth plan,” Jain said, without elaborating. A VTP spokesperson declined to comment.
The fate of some of India’s largest developers such as Unitech Ltd, Amrapali Group and Jaypee Infratech remain uncertain owing to insolvency proceedings, with many promoters in police or judicial custody and stalled projects.
Many land aggregators who had turned builders when the going was good are giving up development to reduce risks. One of them is Mumbai-based Rohan Lifescapes.
“We used to develop on our own. We are now focused more on land aggregation. We will pursue a development model with other builders. We are in conversation with a number of real estate firms for partnership,” chairman and managing director Haresh Mehta said. He said 80-90% developers will finally exit, given the market slowdown and because of the new real estate law.
Rohan Lifescapes has not launched any project in two years and is chalking out a new growth plan. It will no longer develop projects but stay as land aggregators, partnering other builders to develop plots.
“The frequent changes in policy and regulations is affecting everyone. Cash flow is an issue for most now. Earlier, projects used to get sold once launched. Now, until the project is 60-70% ready, no sales are happening,” Mehta said.
Strategic and serious builders are here to stay, said property analysts, adding with the real estate market evolving, there would be clear demarcation between developers and landlords.
“No one wants to build land banks anymore. Traditional developers are segregating their portfolios for self-development and strategic partnerships,” said Nishant Kabra, director and head—land and development services (West India), JLL India. Bengaluru-based Unishire Group, which hasn’t launched anything in three years, plans to finish projects in hand in the next 15 months and then evaluate future plans. “Right now, we want to monetise our land either by selling or through joint developments, so we can fund our ongoing projects and reduce debt,” said managing director Pratik Mehta.
Developers like Nirmal Ltd and Peninsula Land Ltd are focusing on developing some land parcels on their own while partnering with other developers for larger plots.
Nirmal has created a separate unit called Nirmal Ventures to partner with bigger builders like Godrej Properties Ltd, Shapoorji Pallonji Real Estate and L&T Realty to develop their land parcels in Mumbai. Peninsula Land has sold most of its non-core assets. It has sold land in Pune and is wanting to exit investments in Hyderabad and Nagpur, a consultant said on condition of anonymity.
Peninsula land declined to comment on the matter.
“Builders are now focused on their strength. There are developers who are good in execution or construction and those, whose strength is aggregating land,” said Ram Yadav, CEO, Edelweiss Real Estate Advisory Practice.
However, the problem with some land aggregators is that they have acquired land beyond their capacity to develop them and are stuck with it, he said.
Indian Express: MHA gives security nod for construction of Mopa airport
The Philippines-based company was vetted at the time of tendering, but once the contract was finalised and they engaged the services of a Dubai-based consultant, there was need for a second round of security clearance.
With Goa Chief Minister Manohar Parrikar back at the helm, the Union Home Ministry is learnt to have given security clearance for construction of GMR Goa International Airport Limited (GGIAL) in North Goa.
The state government had sought approval of central agencies for Megawide Construction Corporation, one of Philippines’s leading engineering and infrastructure developers, and Dubai Consultants, both engaged by GMR for the upcoming greenfield airport at Mopa.
Officials said that construction of the airport had started and the state government has appointed Engineers India limited (EIL) to monitor the construction.
The Philippines-based company was vetted at the time of tendering, but once the contract was finalised and they engaged the services of a Dubai-based consultant, there was need for a second round of security clearance. “Inputs from Intelligence Bureau and Research and Analysis were sought and conveyed to the state government and Ministry of Civil Aviation,” an official added.
Refusing to elaborate on any objections raised by the agencies, the official said that if there is any feedback from the agencies on the grounds of national or economic security, the concerned ministry is informed. “At the time of vetting, the agencies examine the role of the company, its promoters, directors and key executives. The security clearance procedure took into account their involvement, if any, in any case that might have adverse implications on national security,” he said. While the decision of granting or denying security clearance remains with the MHA, inputs are shared with concerned administrative ministries to enable them to take an appropriate decision, as deemed fit, in accordance with their rules, policy, procedure, guidelines, he added.
The GGIAL, an SPV formed by GMR Airports Limited, signed the concession agreement with Government of Goa for development and operation of the Greenfield International Airport at Mopa in 2016. Two years later, Megawide was selected as it was the lowest bidder. As per the concession agreement, GGIAL will have the right to operate the business for 40 years, extendable by another 20 years. The estimated cost of Phase I of the project is Rs 3,100 crore. It will be completed in four phases, and work on the first phase is expected to be completed by 2020, an official said.
Hindustan Times: Residents, experts not convinced about revamp of Mumbai’s Dharavi slum
The state cabinet gave a go-ahead to redevelop the entire 535 acres of Dharavi slum by setting up a special purpose vehicle and floating one global tender for the entire project.
Although the state government on Tuesday announced its decision to revive the long-pending Dharavi Redevelopment Project, residents of the slum cluster and real estate experts seem unconvinced that the plan would work.
The state cabinet gave a go-ahead to redevelop the entire 535 acres of Dharavi slum by setting up a special purpose vehicle and floating one global tender for the entire project. The earlier plan was to divide Dharavi, the largest slum pocket in India from Sion to BKC, into five sectors for easier redevelopment.
Real estate experts have said slowdown in the construction sector has put a question mark on the project. The state has proposed that 59,160 families living here before 2000 will get free houses and those who moved here from 2000 to 2011 will be given subsidised homes.
“How can the scheme work when it excludes majority of residents? People will not pay when others are getting free houses,” said Waqar Khan, founder of Nehru Nagar Bindeshwari Cooperative Society at 90 feet road.
Locals claim that Dharavi has more than 2 lakh hutments.
The residents of Matunga Labour camp, who live in chawls and buildings, want the government to exclude them from the project. “We don’t live in slums. While slum dwellers are getting 350 square feet area, we are getting 405 square feet which is unfair. We should at least get 500sqft like the BDD residents,” said Ravi Naidu, a resident.
According to Liases Foras, the real estate research firm, it will be difficult to mop up such large-scale investment in the current scenario. “Builders are very cautious with funds and the project of this scale requires massive capital infusion,” said Pankaj Kapoor, CEO, Liases Foras.
Real estate expert Sunil Bajaj warned that this was not a normal revamp project and needs creative planning.
Mumbai Mirror: Ministry clears coastal zone plans for city
This paves the way for 400 pending proposals, including the bullet train project, to be taken up by the MCZMA soon.
Nearly 400 proposals that have been awaiting a nod from the Maharashtra Coastal Zone Management Authority (MCZMA) are set to be heard now as the environment ministry has cleared the coastal zone management plans for five districts – Sindhudurg, Ratnagiri, Raigad, Mumbai City and Suburbs. The National Green Tribunal (NGT) had halted the meetings of the MCZMA a year ago for want of these coastal zone management plans.
The hard copies of these plans were received by the state environment department on Tuesday and will be uploaded on the MCZMA website in a day or two. Thereafter, the meetings of MCZMA can commence.
There is a backlog of at least 400 proposals, including 300 government proposals, which the authority will have to take up. It is expected to take at least three months to clear the projects. A special meeting of the MCZMA was held in August for some key government projects, whose meetings will be released only after the plans are in the public domain.
Principal Secretary, environment, Anil Diggikar said, “We have received the plans for five districts. These are being scanned and will be uploaded now. There has been a delay of one year. We will start our meetings soon. There are nearly 400 proposals pending, of which 300 are government proposals. We can discuss 25 to 30 proposals in each meeting and can hold upto four meetings in a month. It will take around three to four months to clear the backlog.”
Diggikar added that the National Centre for Sustainable Coastal Management has directed Centre for Earth Sciences, Kochi, and Indian Institute of Remote Sensing to finalise the coastal zone plans for Thane and Palghar by October 31. Major projects that come under the purview of coastal regulation zone notification of Environment Protection Act need a clearance from the MCZMA.
Environmentalist D Stalin of NGO Vanshakti said, “The state delayed the payments for the mapping agencies so that constructions could continue in CRZ. Then I approached NGT and got a stay on meetings. The NGT said that in the absence of accurate maps, the meetings of MCZMA were pointless. They stopped the meetings in October last year. The state had also promised NGT that they will not regularise any violations.”
Sources in the state government said that the bullet train is one of the most affected projects for want of a plan for Thane and Palghar districts. Several builders have also approached Chief Minister Devendra Fadnavis to hold the meetings quickly as their projects were getting delayed.
DNA: In a first, RERA to allow homebuyers to take over stuck project
The Uttar Pradesh Real Estate Regulatory Authority (RERA) is set to allow the defrauded homebuyers to take over and complete a stuck project in Noida.
UP RERA took the decision after buyers of Shubhkamna Group’s Project in Sector 137 ‘Tech Zone’ approached it, seeking handover of the project to them as one of the developers, Diwakar Sharma was behind bars and another partner, Piyush Tiwari, was on the run. The project is almost 80% complete.
After Shubhkamna Tech Homes Buyers Association submitted a proposal for the takeover, the UP RERA asked it to take consent of 60% of the homebuyers so that this can be considered.
A senior UP RERA official said RERA will appoint a financial consultant who will look at the financial viability of the takeover.
“Shubhkamna buyers have approached us, and we will consider appointing a financial consultant if we get a formal proposal from them. We will ask to Noida Authority to advise if they can also join the takeover process,” Balvinder Kumar, member, UP RERA told DNA Money.
A legal expert said it could be a landmark decision and may have an impact across India where a number of projects are stuck and buyers are waiting for possession.
Venket Rao, founder, Intygrat Legal and a RERA expert, told DNA Money, “I believe this is first-of-its-kind initiative under the RERA regime. This will transform the power of buyers and proves the merit of collective action. Section 8 of RERA does provide for takeover by the buyers’ association. Further, in the other matter where takeover of land is contemplated at least, the Authority may examine the possibility of resale, etc.”
UP RERA has received 3,340 complaints about 722 projects in Uttar Pradesh, with 70% of projects being from Noida, Greater Noida and Ghaziabad. Most of the complaints are about delays and fraud by builders.
According to the real estate consultancy firm, Prop Equity, more than 4.65 lakh units of housing projects across India are significantly behind their delivery deadlines. The situation in the National Capital Region (Gurgaon, Noida, Greater Noida, Ghaziabad, Faridabad) is even worse where 1.80 lakh units valued at Rs 1.22 lakh crore are facing an uncertain future. Mumbai Metropolitan Region (MMR) is the second worst affected region regarding delayed projects with around 1.05 lakh homebuyers waiting for possession.
UP RERA has also issued an order in the case of another housing project of Earth Gracia Buildcon Pvt Ltd. Since the project is only 5% complete, it has asked Greater Noida Authority to explore options of selling land and recovering its dues and refunding buyers along with interest.
In a recent report, property consultant ANAROCK said in the top seven cities, the residential real estate launched in or before 2013 that is stuck in various stages of non-completion are collectively worth Rs 4,64,300 crore for a total of 5,75,900 units that are yet to be delivered to homebuyers.
Anuj Puri, chairman, ANAROCK, said in his report, “This is apart from the other inventory under construction which, judging my visible construction progress, will assuredly get delivered over the next 3-4 years. These 5,75,900 units have been stuck since 2013 or before”.
A BIG RELIEF
- After Shubhkamna Tech submitted a proposal for the takeover, the UP RERA asked it to take consent of 60% of the homebuyers
- A senior UP RERA official said RERA will appoint a financial consultant who will look at the financial viability of the takeover.
DNA: BMC ignores warnings on Mahul, to renovate 4,500 houses in area
The Brihanmumbai Municipal Corporation (BMC) is sticking to its argument that Mahul is a good locality for residents to live in, though activists and citizens have criticised the civic body for using the area to build rehabilitation projects in the city. The current plan involves over 4,500 houses which are to be renovated in Mahul.
The project throws the spotlight on Mahul, several years after the BMC started its rehabilitation project for the area’s buildings. But residents were unhappy given the shabby condition of their houses, poor infrastructure in the area, and air pollution. Some of them even moved the Bombay High Court, which clarified that the civic body can’t force people to move there. Furthermore, the National Green Tribunal also said the area is “not good for human habitation”. The hearing is still underway, but the civic body seems set on sticking to its earlier version, while also coming up with 4,500 houses which can be an alternative to the shabby houses of Mahul.
The three areas which the BMC has selected are Mukund Nagar, SG Chemicals and Videocon Kshiti. All three are in M-West ward, which includes Chembur and borders Mahul. The buildings built by the Slum Rehabilitation Authority (SRA) were handed over the MMRDA in 2005-06. But the MMRDA’s requirements were so meagre that the remainder were given to the BMC in 2009-10. “By that time, the BMC had Mahul’s buildings ready, so we decided to shift the project-affected people to this area,” said a BMC officer.
Assistant commissioner (estates) Parag Raghunath Masurkar said, “We have already given a working order to renovate houses in Mukund Nagar. Around 250 houses will be ready by April 2019. After the works committee’s approval for two other colonies, we will get 4,000 more houses. The BMC has more than 2,500 vacant houses in Mahul and they are shifting people from other areas in a few wards in the eastern suburbs. But now, with more houses still available, the BMC will start stringent action against encroachment.
- Residents who were given houses in Mahul said they weren’t happy.
- They complained about the area, poor infrastructure and air pollution.
- Even NGT said it isn’t fit for habitation
DNA: Ambitious Rs 22,000 crore project was stuck in limbo since 2004
The state Cabinet gave its nod for the comprehensive redevelopment plan of the Dharavi slums, through a global tendering process, by forming a special purpose vehicle company.
The decision would throw open process for tendering of the ambitious Rs 22,000 crore project, which would now involve redevelopment of all five sectors of Dharavi in one go. Prakash Maheta, minister of housing development, said the total area is around 600 acres, of which mangroves and the nature park would be left out.
Redevelopment of the rest would involve 80 per cent investment from the developer, while the government puts in a 20 per cent stake. The minister informed that rehabilitation of slum dwellers would be in-city, meaning they would be rehabilitated at their present locations.
The first government resolution for integrated comprehensive Dharavi redevelopment was passed in 2004. In 2005, it was decided that sectors 1 to 4 would be redeveloped, while in 2009, it was decided that Sector 5 would also be redeveloped. After the tender process was twice passed between 2007 to 2011, redevelopment could still not take place, as tenders did not receive responses. In 2017, Chief Minister Devendra Fadnavis in principle gave approval for forming a special purpose vehicle (SPV) so that the project can be expedited at a faster rate.
DNA: Dharavi redevelopment project to change face of Mumbai’s real estate
Mumbai’s skyrocketing property prices are likely to come down by as much as 25 to 30 per cent in the coming years. In the next five years, over seven lakh 2BHK housing units would become available in Mumbai, given the ‘special project vehicles’ model for redevelopment of Dharavi, which was passed by the state Cabinet on Tuesday.
“Dharavi is a dream project, and it will generate over 5 crore sq.ft construction space, worth roughly 60-80,000 housing units. The rehabilitation cost of this project run over Rs 22,000 crore. We are committed to bringing the down the soaring housing prices by 25-30 per cent,” said housing minister Prakash Mehta.
The main hurdle to the project was the 70 acres of land held by the Railways. “Railway Minister Piyush Goyal assuring to hand over this land to the state government helped. Added to this, we got 20 acres of saltpan land for construction of transit camps,” he said.
Besides Dharavi, the 94 acres of the BDD chawl redevelopment would also generate more than 8,000 saleable 2BHK housing units. “The Slum Rehabilitation Authority (SRA) has approved several projects, which are likely to generate 2.35 lakh more houses. Moreover, private and MHADA development would also create more than 3 lakh houses. So, in the next five years, we can see more than seven lakh additional houses in Mumbai,” Mehta added.
Real estate experts, however, had a different take on this. “This mammoth project is unlikely to take off,” said Pankaj Kapoor, MD, Liases Foras, a Mumbai-based real estate research firm, who added that such attempts were made earlier as well but nothing happened. “The government fails to understand that Dharavi is not a housing project, but an integrated cottage and commercial industry. Dismantling this well-settled scenario fabric isn’t a good idea. No developer, Indian or foreign, has the financial capacity to undertake this project or putting in an initial Rs 25,000 crore to Rs 30,000 crore that is required. The chances of recovery are dim, considering the market is heavy and interest-ridden.”
TOI: Dharavi to be redeveloped as a whole with 80% private stake
MUMBAI: After several failed attempts, the Dharavi Redevelopment Project is being revived yet again. The state government’s plan to divide the sprawling slum into 12 sub-clusters and redevelop it, has been scrapped.
On Tuesday, the state cabinet approved a fresh plan: Dharavi will be redeveloped as a whole, not in parts. A special purpose vehicle (SPV) will be set up-with 80% private stake and 20% government contribution- to execute the Rs 22,000-crore project. Global tenders will be issued for its construction, said housing minister Prakash Mehta.
The three lakh slum-dwellers are being promised even larger homes. “The families will get a minimum 350 sqft if they are currently living in 300sqft homes. Tenements above 300sqft will get 405sqft homes, and those having homes over a 500 sqft will get an additional 35% area,” said Mehta.
If the Dharavi redevelopment project gets delayed further, the cost is expected to escalate to Rs 40,000 crore, said sources.
This is not the first time that the government set up a SPV to redevelop Dharavi. In 2011, chief minister Prithviraj Chavan of Congress had floated a similar model and even invited global tenders. The entire exercise was scrapped as it did not get the expected response. In 2016 too, global tenders had been issued and the project again failed to get any response. This time round the cabinet has approved a proposal wherein the SPV with 80% private stake and 20% government contribution will have a special status.
“This will enable the project to obtain concessions in stamp duty, state GST repayment and relaxation in premium for fungible floor space index (FSI),” said a senior official from the housing department. Under the new plan, the land owned by Central Railway (90 acres) which abuts Dharavi will also be part of the redevelopment project. Sources said discussions with the railways are at a preliminary stage.
“Dharavi redevelopment has simply failed to take off though the government in 2003 declared it a vital infrastructure project and offered an FSI of 4. This is because it is in the airport funnel zone and there is a height restriction so there is no way a developer can utilise the entire FSI,” said a senior bureaucrat.
The Maharashtra Housing Area Development Authority’s (Mhada’s) attempt to redevelop a part of Dharavi (Sector 5) also failed as local residents categorically refused to allow it to carry out redevelopment. “Mhada does not enjoy the trust of the residents and so it could construct only one building, which till recently was unoccupied,” said a former housing secretary, who had headed Mhada at the time of the redevelopment.
Political observers, however, rubbished the new plan saying it was nothing but ‘wishful thinking’ with an eye on the forthcoming Lok Sabha and Assembly elections.
ET Realty: MahaRERA asks realtors to display building plans at project sites
In its circular, MahaRera said that all the promoters should ensure that sanctioned plan, layout plan along with the specifications approved by the competent authority should be prominently displayed at the respective .
MUMBAI: After the Supreme Court earlier this month made it mandatory for real estate firms to display approved building plans on project sites, MahaRera Monday issued a circular in this regard and has warned of strict action if developers fail to abide by it.
In its circular, MahaRera said that all the promoters should ensure that sanctioned plan, layout plan along with the specifications approved by the competent authority should be prominently displayed at the respective site.
“Failure on the part of the promoters to comply with the provisions of the RERA Act and the rules and regulations made thereunder, shall be viewed seriously and action will be take,” it said in the circular.
At present, it is mandatory for developers to submit the sanctioned plans on the MahaRera website so that anyone can check the details of the project.
“As demanded by us, MahaRera has instructed developers to display approved building plans on the site as per SC order. Such display will prevent deception of home buyers and false /misleading promises by unscrupulous builders,” Mumbai Grahak Panchayat chairman Shirish Deshpande said.
The Hindu Business Line: Housing sales remain subdued in September quarter, says Anarock
BENGALURU: Real estate market across top seven cities stayed subdued in the September quarter with just nine per cent increase in sales, indicating that house buyers continue to wait and watch.
September quarter saw a meagre three per cent increase in overall fresh housing supply compared to the April-June period despite property prices remaining stagnant, according to Anarock Property Consultants.
“The third quarter saw only a minimal increase in both new launches and absorption over the previous quarter. However, there has been a 51 per cent jump in new housing supply against Q3 2017. Purchases also rose 15 per cent compared to the year-ago period,” Anuj Puri, Chairman, Anarock, said.
Buyers and developers alike are pinning their hopes on the ongoing festive season for better deals and faster deal velocity, respectively. “Lower-budget range housing continues to keep the momentum going. This segment saw a nearly 65 per cent increase in supply in Q3 2018 against the same period last year,” he added.
NCR, MMR, Chennai, Bengaluru, Pune, Kolkata and Hyderabad saw 52,150 units launched in Q3 2018 against 50,600 units in Q2.
“MMR and Pune together led the pack with 27 per cent rise in deals compared to the previous quarter. Out of all the states and Union Territories in India, Maharashtra takes the first place when it comes to proactive RERA deployment. This has boosted home buyer sentiment significantly,” Puri added.
Residential property rates across the top cities remained stagnant in Q3 2018 compared to the previous quarter. Kolkata was an exception where the rates declined by around one per cent as considerable unsold stock in the market kept ticket sizes range-bound.
Lower-budget and mid-segment housing continued to dominate, with 75 per cent of launches (39,300 units) costing below Rs 80 lakh. Lower-budget segment comprised 42 per cent share of the total new launches.
Despite the ongoing pain in Indian real estate, both housing sales and new launches have increased quarter-on-quarter. The future depends on a favourable macroeconomic environment in 2019, Puri added.
Mint: Mumbai home sales jump, boosted by affordable low-budget units
The highest sales were recorded in Mumbai and neighbouring Pune, which accounted for about 27% of purchases across the seven cities, real estate broker Anarock said in a report.
Singapore: Home sales rose 9% across India’s seven biggest cities in the third quarter, boosted by low-budget apartments, according to Anarock Property Consultants Pvt.
The highest sales were recorded in Mumbai and neighbouring Pune, which accounted for about 27% of purchases across the seven cities, real estatebroker Anarock said in a report. The National Capital Region, which covers Delhi and surrounding areas, and Hyderabad both posted the lowest growth, with a 2 % increase from the previous quarter, the data showed.
The third quarter of the year is usually a slow period for the housing market because of the 15-day “shraddh” period, when people honour their dead ancestors and which is considered inauspicious for buying property. Developers typically hold off marketing new projects until the Hindu festival season which starts in October.
Housing supply rose just 3% last quarter from the previous three months, the data showed. This was largely dominated by low-budget housing, with homes costing less than 4 million rupees ($54,000) accounting for about 42% of total new supply. Homes costing between 4 million rupees and 8 million rupees made up 33%, with the balance coming from luxury and ultra-luxury developments.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
Mint: Eight reasons why you should buy a ready-to-move-in house
Ready-to-move-in houses reduce chances of getting duped, besides offering other benefits.
There is no dearth of supply in the residential real estate market across India, both in the ready-to-move-in and under-construction categories, thanks to low sales in the last few years. According to a report by LiasesForas, a Mumbai-based real estate rating and research firm, at the end of first quarter of financial year 2018-19, there were 945,964 unsold units in 8 tier-I cities including Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan region (MMR), National Capital region (NCR) and Pune. Moreover, considering the sales volume during the quarter, it will take 41 months to clear these inventories, said the report.
If you are looking to buy a property now, you would get plenty of options. But there is merit in choosing a ready-to-move-in property. We list eight of the benefits.
No risk of project delay
When you buy a ready-to-move-in house, the biggest risk that you eliminate is project delay. You are not required to wait for the completion of the apartment and other amenities in the project.
While the Real Estate (Regulation and Development) Act (RERA), 2016 has been implemented and developers are expected to adhere to timelines, most developers have listed a deadline of 5-6 years from now on the website for their projects. Typically, the deadline that developers gave earlier was for three years.
In other words, most developers have already made provision for project delay. Any penalty or compensation under RERA will get implemented only when the developer does not meet the mentioned deadlines.
Buy what you see
Uncertainty about space, size of rooms, view from the apartment, and quality of construction, available amenities and fixtures can be eliminated when you buy a ready to-move-in apartment. “It is important to consider the quality of the project; a ready-to-move in project allows one to closely inspect the structure and quality of finish,” said Anshul Jain, country head and managing director, Cushman & Wakefield India.
While buying an under-construction property, you make a decision based on sample flats, which may be misleading.
“The major benefit (of buying a completed apartment) is that buyers are completely aware and know exactly what they are buying while inspecting the apartment. The decision of purchasing a ready-to-move-in property is not based on what is shown in a sample flat or on mere layouts,” said Ramesh Nair, chief executive officer and country head, JLL India.
Know the neighbourhood
It is essential to know your neighbourhood and the available infrastructure around the area such as nearby markets, common public areas and parks, connectivity issues, among others. “A building offering amenities, security, a good neighbourhood and social infrastructure in the vicinity tends to work better for buyers,” said Nair.
Get immediate possession
You can start living in a ready-to-move-in house as soon as you buy it. “For those with an immediate requirement who are unable to afford both rent and EMIs, a ready-to-move-in home works well,” said Jain.
Even those who can delay moving to their own house by a few months or years can never be sure about the timeline as the possession will be dependent on whether the developer is able to execute the project on time—or worse—at all. For instance, homebuyers in projects of Jaypee Group, Unitech Group and Amrapali Group, builders that are facing insolvency proceedings, have been left in the lurch.
Get rental income
If you do not want to move into the house your are buying and are planning to buy it for investment purposes, you can start earning rentals as soon as you buy a ready-to-move-in property.
Rentals can help you pay some part of the EMI if you have taken a loan and enhance your returns. “It is also advisable to study the pricing and rental yield trends in the location and check for any upcoming infrastructure in the vicinity to gauge possible capital appreciation in the future,” said Nair.
Goods and services tax (GST) of 12% is applicable on an under-construction property. It is charged over and above the property value. So if you are buying an under-construction property valuing ₹60 lakh, you will have to pay ₹7.2 lakh as GST.
“Currently, no GST is applicable (on ready-to-move-in property) which reduces the overall financial outflow,” said Jain.
Immediate tax benefit
According to the Income tax Act, 1961, a borrower can claim deduction under Section 80C against principal repayment of a home loan, which has an overall limit of ₹1.5 lakh and up to ₹2 lakh for payment of interest under Section 24(b) for a self-acquired house.
However, there is a catch; these tax benefits can only be claimed after the construction of the property is complete and you get the registration and ownership documents. So, no possession means no tax benefit against home loan repayment.
You are allowed to claim deduction on the interest paid on a home loan during the construction phase in five equal instalments post possession. But if the construction gets delayed and takes more than five years, the maximum deduction allowed on interest payment reduces to ₹30,000 instead of ₹2 lakh per annum. Moreover, the principal amount repaid during construction is not allowed for deduction at all.
It’s more liquid
It is difficult to sell an under-construction property, especially if its delivery is delayed or it’s locked in a legal battle. In many cases, developers do not allow the transfer of apartments until the project is complete. Even if they do, you may have to pay hefty transfer charges in the range of ₹200-500 per sq.ft or more, which can dent your gain.
Though there are benefits of buying a ready-to-move-in apartment, “they (home buyers) might have to shell out a little more on such purchases compared to under-construction ones,” said Jain. However, whether you buy an under-construction or ready-to-move-in property, be sure to do your due diligence regarding the quality of construction, location and surrounding infrastructure.
Mumbai Mirror: 16% increase in home sales in city, suburbs
Launch of housing projects rises by 42% in third quarter
Mumbai Metropolitan Region (MMR) witnessed a 16 per cent growth in sale of housing units, from 15,750 units sold in second quarter to 18,200 units in the third quarter of FY 2018, said a research report by Anarock Property Consultants released on Monday.
The same period also saw a 42 per cent jump in launch of housing projects –19,850 units were launched as opposed to 14,000 new units in Quarter 2 – in MMR.
The report said 67,175 units were sold in Quarter 3 of 2018 across seven top cities. MMR saw the highest jump followed by Pune at 11 per cent. In Pune, sales grew from 8,375 units in Quarter 2 to 9,300 units in Quarter 3.
The top 7 cities, which include National Capital Region, Chennai, Bengaluru, Kolkata and Hyderabad, saw 52,150 new units launched in Quarter 3.
“Buyers and developers alike are pinning their hopes on the ongoing festive season for better deals and faster deal speed respectively.
Lower budget housing continues to keep the momentum going. This segment saw a nearly 65 per cent increase in supply in Q3 as against the same period last year,” said Anuj Puri, chairman, Anarock Property Consultants.
MahaRera asks realtors to display building plans at project sites
After the Supreme Court earlier this month made it mandatory for real estate firms to display approved building plans at project sites, MahaRera on Monday issued a circular in this regard and has warned of strict action if developers fail to abide by it.
MahaRera said that all the promoters should ensure that sanctioned plan, layout plan along with the specifications approved by the competent authority should be prominently displayed at the respective site. “Failure on the part of the promoters to comply with the provisions of the RERA Act and the rules and regulations made thereunder, shall be viewed seriously and action will be take,” it said in the circular. At present, it is mandatory for developers to submit the sanctioned plans on the MahaRera website so that anyone can check the details of the project. PTI
ET: Kanakia Buys Land in Powai for About ₹850 cr
The 15-acre land parcel, acquired from Skyline Mansions & PE fund promoted by Anand Jain, has development potential of 2 m sq ft
: Realty developer Kanakia Group has acquired a nearly 15-acre prime land parcel in the Powai suburb of Mumbai for around ₹850 crore from Skyline Mansions and the private equity fund promoted by Anand Jain, two people with direct knowledge of the development said.
With this transaction, the Urban Infrastructure Venture Capital, floated by Anand Jain’s Jai Corp with Reliance Industries as an anchor investor, has made a complete exit from the project in which it held 33% stake.
Urban Infrastructure had teamed up with Skyline Mansions in 2007 after the acquisition of the land and was looking to develop a residential project. It had invested in this alliance through its India fund Urban Infrastructure Opportunities Fund.
“The 15-acre project has development potential of nearly 2 million sq ft. While certain approvals are already in place, Kanakia will be responsible for further permissions now as the land parcel has been sold on a as-is-what-is basis,” said one of the persons mentioned above.
Kanakia Group had entered into an agreement with Urban Infrastructure to acquire the latter’s stake and has now concluded the deal at around ₹250 crore. Of the total consideration paid to the fund, the developer had paid ₹60 crore at the time of entering into the pact two years ago.
In addition to this, Kanakia has also acquired balance 66.66% project stake owned by Skyline Ventures for over ₹600 crore taking the total deal value to ₹850 crore.
ET’s email queries to Urban Infrastructure Venture Capital and buyer Kanakia Group remained unanswered until the time of going to press. Skyline Mansions’ director Narottam Sharma confirmed the transaction without elaborating on details.
The Kanakia Group is looking to develop a mid-income premium residential project and has started the process to secure approvals. Currently, under-construction property rates in the vicinity are in the range of ₹18,000 to ₹20,000 per sq ft.
After a long gap, land transactions have started to gain momentum in Mumbai Metropolitan Region, the country’s most expensive property market. Over the last few years, outright land transactions were overtaken by joint developments and joint ventures as that would enable the developer lower capital involvement and a possible revenue upside to the landlord once the project is ready.
In May, realty developer Kalpataru emerged as the highest bidder for 8-acre land parcel of Mondelez India or former Cadbury India on Thane’s Pokharan Road 1with its bid price of ₹282 crore. Kanakia Group itself entered into an agreement with India Tube Mills to buy its seven-acre land parcel in Vikhroli suburb of Mumbai for ₹363 crore.
The Economic Times: Home sales up 15% as developers focus on pricing, delivery.
MUMBAI| BENGALURU: Residential property sales in the secondquarter climbed 15% year-on-year across India’s top seven markets, led by demand for affordable homes. Sustained conversion of inquiries into purchases suggests that builders are offering solutions within reasonable budgets and sticking to delivery timelines.
Bengaluru, Kolkata, Mumbai Metropolitan Region (MMR) and Pune witnessed more than 20% on-year sales growth in the quarter ended September, although Hyderabad and Chennai posted declines of 3% and 27%, respectively. Sequentially too, sales cumulatively rose 9% in these seven markets, showed data from ANAROCK Property Consultants. Prices remained largely stagnant, except in Kolkata, where they declined 1%.
The sequential growth assumes significance in this quarter as it includes the 15-day shraddh period considered inauspicious for property deals. So, builders also kept new projects on hold for the ensuing festive season.
“There has been a 51% jump in new housing supply and 15% rise in sales from a year-ago period. Buyers and developers alike are pinning their hopes on the ongoing festive season for better deals and increased sales,” said Anuj Puri, chairman, ANAROCK Property Consultants. “Affordable housing continues to keep the momentum going, with nearly 65% increase in supply during the quarter.”
Affordable and mid-income segment housing dominated, with 75% of launches, or 39,300 units, priced under Rs 80 Lakh. The affordable segment alone accounted for a 42% share of the total new launches.
“The market has turned in buyers’ favour. Prospective homebuyers are selective about the projects, and developers in particular, focusing on quality and track record,” said Kamal Khetan, CMD, Sunteck Realty. “The combination of right location, pricing and upgraded amenities is helping in demand conversion.”
The company has managed to sell more than 2,100 apartments in its recent launch, with units priced in the range of Rs 25 lakh to Rs 50 lakh in Sunteck West World at Naigaon, near Mumbai.
The 3% sequential rise in launches also indicates the industry’s focus on completing existing projects, and selling ready-to-movein apartments rather than launching new units.
The rupee’s recent fall against the rupee has also turned out to be a blessing in disguise for residential sales, with non-resident Indians seeking to take advantage of lower prices, discounts and the currency move.
“There has been an increase in interest and enquiries from NRIs, especially from the Middle East region. The value of the dirham has appreciated due to US dollar fluctuation. We are gearing to convert these sales during the upcoming festive season,” said Viswaprathap Desu, senior vice president, sales and marketing, at Brigade Enterprises.
The recent government initiatives such as implementation of the Real Estate (Regulation & Development) Act, 2016, Goods & Services Tax and demonetisation have also improved the transparency in the sector, offering more comfort to NRIs looking to build assets back home.
Markets typically known for attracting NRI investments are Bengaluru, Chennai, Kochi, Chandigarh, and Pune, and premium projects in Mumbai and Ahmedabad.
DNA: Mumbai: Builders hope festive season will offset slump.
The Times of India: Cement prices may increase by up to 10% in next 6 months: CMA.
New Delhi, Oct 14 () Cement prices could go up by up to 10 per cent in the next six months in order to compensate for the increased fuel and transportation costs, according to a top official of industry body CMA.
As per Cement Manufacturers Association (CMA), the industry has witnessed 14 per cent growth in the first half of 2018-19– the first double digit growth since 2009-10 — thereby providing an opportunity for correction of prices which have remained stagnant for the last six to seven years.
“If not for anything else, there is a very dire need to correct the (cement) pricing. In the last one year we have seen 60-70 per cent rise in cost of fuel. At least to recover some portion of this increase, we need to increase the prices of cement,” CMA President Shailendra Chouksey told .
He further said cement prices have been “almost stagnant for the last six to seven years” but the cost and normal inflation are “much more than the pricing that we have been able to raise”.
There is surplus capacity in the cement industry but no pricing power, Chouksey said, adding even after witnessing pick-up in demand, “prices are still languishing at very very low levels”.
In the national capital, a 50-kg cement bag sells for less than Rs 300 at present, he claimed.
“Today, we are selling a cement bag practically at the same price that we sold in 2011-12. That is mainly on account of the huge surplus in the system,” he said.
Out of a total of 500 million tonne (MT) capacity available in the industry, only 300 MT is utilised at the moment, he added.
However, with sustained demand, he said there is an opportunity for the industry to correct the prices.
“Hopefully, the next six months is a good period for good consumption by and large and I think that it will be a good period for some possible price corrections,” he said.
When asked by how much the prices could go up, he said: “Just for recovering the fuel cost and transportation charges, that itself will call for a minimum of Rs 25-30 a bag, which is about 8-10 per cent increase in prices.”
Such a price hike, he said,”will bring us at the level where we were last year in terms of operating margins.”
Stating that the health of the cement industry isn’t so good, Chouksey said:”We have been seeing that lot of units have been put on the block. It indicates the margins are not very healthy, I think that will continue for a while till such time the prices are corrected.”
Asked if there could be more cases of cement companies going for insolvency proceedings, he said: “I would not be surprised if it happens.”
Earlier this year, after going for insolvency proceedings, debt-ridden Binani Cement had become a bone of contention between Ultratech and Dalmia Bharat. RKL RKL SHW ANU ANU.
The Hindu Business Line: Leasing activity to touch 10.9 mn sq.ft in Q3: CBRE .
NCR, Bengaluru, Mumbai and Hyderabad, contributes for 80 per cent of the leasing activity
New Delhi, October 11
The leasing activity has improved by 12 per cent on a quarterly basis to touch 10.9 million sq.ft. during Q3 2018, with NCR, Bengaluru, Mumbai and Hyderabad, contributing for 80 per cent of the leasing activity, according to a report by CBRE.
The report ‘India Office Market View-Q3 2018’ further said that office space take-up was dominated by small and medium-sized transactions. The mid-sized transactions (ranging between 10,000 sq. ft. and 50,000 sq. ft.) accounted for about 45 per cent of the transaction activity, while small-sized transactions (less than 10,000 sq. ft.) had a 42 per cent share. However, the share of large-sized deals (greater than 100,000 sq. ft.) increased to 7 per cent during the quarter.
“India’s economic growth continued on its upward trajectory and real estate services (along with financial and professional services) sector contributed to this economic surge as it grew from 5 per cent in the previous quarter to 6.5 per cent during the review period. Sectors such as engineering and manufacturing, and co-working are likely to account for a larger share in leasing activity going forward,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE.
With 48 per cent, tech corporates drove office space take-up in the country during Q3. They were followed by engineering and manufacturing companies and co-working/ business centre operators at 14 per cent and 11 per cent respectively.
Mid Day: MHADA tells Mahalaxmi residents to move to Gorai for Metro III work.
In a seven-day notice served on October 8, MHADA asks 25 families located in Mahalaxmi to vacate their building due to upcoming Metro 3 work; how will our children go to school from so far, residents ask.
As if studying for exams is not nerve-racking enough, at least 30 children living at Mahalaxmi Sadan, Jacob’s Circle, are worried that they will be thrown out of their homes in the middle of their exams. Residents of the MHADA building have not only been asked to vacate it within the week, but will be moved all the way to Gorai. All this to make way for the Metro III construction.
“Even as I study for the semester exams, I can feel this constant tension that I might have to leave my home,” said Samar Harmalkar, a Std X student who attends a school in Byculla East. These are heavy concerns for a child of 11, but Samar is not alone in worrying.
Residents allege that MHADA has not given any assurances about what will happen to them after the Metro work is completed. Pics/Bipin Kokate
The 25 families residing in Mahalaxmi Sadan are all anxious about the toll it will to take on their kids if the MHADA authorities end up forcing them to move to Gorai. Like Samar, most of the children attend schools in Dadar or south Mumbai, and currently have to travel around 20 minutes to get to class. If they move to Gorai, the travel time shoots up to two-and-a-half hours.
Deepak Khamkar, one of the residents, said, “How will I travel all the way from Gorai to Dadar every day to drop my daughter to school? It is just not feasible.”
‘What about our homes?’
Most alarmingly, though, the residents allege that the Maharashtra Affordable Housing and Development Authority (MHADA) is ousting them from their homes without any assurances of what will happen to them once the Metro III construction is over. The building’s inhabitants received a notice on October 8, giving them seven days to vacate the building and shift to Gorai. There are now barely three days left, but the families are yet to receive any word on where they will be accommodated in Gorai, or for how long.
This uncertainty has gone on since July, when the Mumbai Metro Rail Corporation (MMRC) wrote to them stating that a structural audit had found the building’s structure weak. Not only will the underground Metro tunnel be dug through this area, but the Mahalaxmi Metro station is also billed to come up there. The MMRC advised the residents to vacate their apartments for the duration of the Metro work, to prevent any mishap. However, by this time, the children had already begun a fresh academic year.
The letter offered the project-affected people (PAPs) alternative accommodation at Wadala, which they rejected. They were then given the option of Pimpalwadi in Girgaon, and were asked to move there within seven days. Once again, residents rejected this, citing lack of basic amenities such as water and proper drainage. After a long silence, MHADA’s October 8 letter came as a big jolt to the families, said one of the residents, Abhay Babar.
Ravindra Sahani, another resident, said, “MHADA left the repairs of our building mid-way and did not pay any attention to us; now they are asking us to vacate. What will happen to our building? Will we ever get our houses back? Why are we being moved now, when we were living in danger earlier while the piling work was going on?”
Madhu Chavan, chairman of MHADA’s Mumbai Board, said, “The building is in a dilapidated condition. The main issue is that they wanted a place in the island city, but as there is no space available here, the suburbs are the only option. However, considering that the children might suffer, I have asked MHADA officials to look into this seriously.” MMRC’s spokesperson said the agency did not want to comment on the matter.
Hindustan Times: Cidco moves to revive wetlands in Navi Mumbai.
During the wetland grievance redressal committee meeting on Thursday, chairman of the committee, directed Cidco to keep the sluice gates at Panje open till May 2019.
The City and Industrial Development Corporation (Cidco) opened 70 of the 76 sluice gates to revive the dying 237-hectare Panje wetlands in Uran, Navi Mumbai. The move comes after environmentalists and citizen groups had complained to the state mangrove cell that the closed sluice gates in a flood-protection barrier were stopping the flow of tide water into the wetlands. Cidco, the planning agency for Navi Mumbai, said since monsoon is over, there are no worries about flooding.
“As per directions from our vice chairman and managing director, Lokesh Chandra on Wednesday, our engineering team opened 70 gates, allowing tidal water flow to Panje wetlands from Thursday morning onwards,” said Pramod Patil, nodal officer, environment and forest, Cidco.
During the wetland grievance redressal committee meeting on Thursday, Konkan commissioner Jagdish Patil, chairman of the committee, directed Cidco to keep the sluice gates at Panje open till May 2019.
“Cidco raised concerns about flooding of nearby villages. We have asked them to monitor the situation carefully. If need be, the villagers with their consent can be relocated. As of now, the gates have to remain open for the safety of the wetlands,” said Patil.
Cidco said they follow directions of the HC committee.
The barrier was built in the year 1991 with help from Indian Institute of Technology, Bombay as a flood control mechanism. It shuts automatically during high tide and opens up during low tide, remaining closed throughout the months of monsoon. However, in the last week of September, some gates were damaged and the barrier was shut down, starving water supply into the mangroves.
HT has been reporting how the wetlands had partially dried up after high tide water was blocked on September 28, following which Navi Mumbai residents and environmentalists filed a complaint with the state. On October 6, Cidco had opened 10 of 76 gates. But environmentalists said it was insufficient to restore the wetland.
Environment group Vanashakti decided to file a contempt petition, and the matter was to be heard by the Bombay high court (HC)-appointed grievance redressal committee on Thursday, but Cidco acted a day prior to the meeting. “Cidco has shown sensitivity as they realised they were breaking the law,” said Stalin D, director, Vanashakti.
Documentary film maker Aishwarya Sridhar, who had photographed the changes in the wetland between May and October, said the plan by Cidco to open the sluice gates was a victory. “If there are flooding concerns at nearby villages, Cidco needs to find remedial measures to stop it at those villages but they cannot cut off all water to a wetland site using that logic,” she said.
Nandkumar Pawar, the environmentalist who had filed the first complaint, said that the citizens highlighted the issue at the right time to stop the wetland destruction. “Using flood control mechanism, Cidco is trying to drain out such areas and sell them to private developers for housing projects,” he said.
In 2014, the Bombay high court had banned reclamation and construction on wetlands after environment groups filed a petition to protect them.
Environmentalists said that Cidco had violated the wetlands conservation rules. “The wetland is now partially protected but it is a disgrace that a government organisation cannot follow the law on its own and citizens have to take matters in their own hands. Cidco needs to be prosecuted,” said Debi Goenka, executive trustee, Conservation Action Trust.
Others said that the development agencies should not be allowed to do development work in natural areas. “They cannot play around with the flow of water for pristine wetlands and bird havens. We need to act quickly to get it declared as a protected area,” said Sunjoy Monga, ornithologist and naturalist writer.
•September 28: Navi Mumbai residents and environmentalists file first complaint with the state, alleging Cidco has shut tide water flow in the wetlands by blocking 76 gates at Panje wetlands in Uran, Navi Mumbai. Documentary film-maker Aishwarya Sridhar states the wetland may dry up if high tide water is not restored
•October 2: Cidco states repair work for the gates is being carried out and new gates are being installed
•October 3: After four days of inaction, environmentalists Debi Goenka and Sunjoy Monga approach the state mangrove cell which wrote to to Cidco, telling them the area has mangroves and holding ponds and that tide water flow cannot be restricted.
•October 4: Bombay Natural History Society asks the state to dismantle the sluice gates to conserve the Panje wetlands.
•October 6: Cidco allows tidal water ingress to the Panje wetlands by opening 10 of 76 outlets. However, environmentalists say it is not enough to guarantee adequate water flow to the wetland site.
•October 7: Sridhar visits the site to find the wetland has dried up. Local villagers say there are no flooding concerns except a few isolated areas that have knee-deep water during the monsoon
•October 8: Vanashakti decides to file a contempt petition against Cidco under its original petition to safeguard wetlands in Maharashtra.
•October 10: A day before the Bombay High Court appointed wetland grievance redressal committee was to hear the matter, Cidco vice chairman and managing director, Lokesh Chandra directs his engineering team open majority of the gates at Panje.
•October 11: Of 76 gates, 70 opened by Cidco, and the wetland, mangroves and holding pond area partially restored.
Seasonal variation for the number of migratory birds spotted at Panje every year
•Summer – 10,000
•Monsoon – 40,000
•Early Winter – 80,000
•Late Winter – 1,40,012
Wetlands matter because
They act as a buffer zone between the land and sea
Biggest carbon sink, larger than Amazonian rain forests
Protect land from wave erosion.
Mumbai Mirror: Maharashtra sees 15% fall in revenue from GST.
The state government earned Rs 30,321.67 crore in second quarter of the current financial year (2018-19) through goods and services tax (GST). However, the revenue is Rs 5,632.42 crore, or 15.66 per cent, less than compared to the first quarter.
The state government’s target of revenue collection from GST for the entire financial year is around Rs.1.51lakh crore.
The major reason behind the drop in GST collection is a slowdown in sectors such as aviation, real estate, banking and insurance, said a senior official from the state’s finance department.
However, compared to second quarter of the last financial year (2017-18), the state government earned Rs 1,810.98 crore more in GST.
In first quarter of the current financial year, the state government managed to earn Rs 35,954.13 crore which was 39 per cent more compared to the corresponding quarter of the last fiscal year.
The official, however, claimed that overall, the GST regime has been beneficial to the state with Maharashtra earning Rs 1.15 lakh crore in the financial year 2017-18 compared to Rs 90,525 crore which it collected VAT in the financial year 2016-17.
A senior official further said, “One of the major reasons behind higher revenues in the first quarter of the current financial year was that a lot of disputes between traders and the department were settled over tax assessment and the actual revenue was realised.”
He further said, “The increase in the number of registered dealers under GST to 14.55 lakh from 8.30 lakh under VAT was one of the reasons why revenue increased in the financial year 2017-18 compared to the previous year.’’
What made several traders quickly adopt GST was the realisation that if one buys goods and services from an unregistered dealer, then a registered dealer would have to pay the entire tax and they won’t get any credit for it.
This resulted in big traders, manufactures and service providers insisting that vendors register for GST, said an expert.
The Times of India: Housing sales rise 6 pc in Jul-Sep in 9 big cities: PropEquity.
New Delhi, Oct 11 () Housing sales rose by 6 per cent during July-September in nine major cities at 51,142 units on demand recovery post demonetisation, new real estate law and GST impact on the real estate market, according to PropEquity data.
Nine cities tracked by real estate data, research and analytics firm PropEquity include Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru, Thane and Chennai.
Launches of new homes grew by 12 per cent to 32,870 units during the third quarter of 2018 calendar year.
“In the last one year, prices have corrected and the realty market has started to somewhat revive. With festive season coming up, developers will dole out discounts, finance schemes and freebies to push housing demand further,” said Samir Jasuja, founder and managing director of PropEquity.
“We continue to see strong traction for ready to move in and nearing completion projects to attract demand,” he added.
The market has been continuously recovering over the past few quarters as substantial amount of ready stock available in the primary market has led to the market slowly transforming into a buyer’s market.
“As the real estate market got accustomed to reforms like goods and services tax (GST) and Real Estate Regulation Act (RERA), absorption for ready to move and nearing completion projects picked up,” the report said.
The unsold inventory dipped by 8 per cent to 6,17,456 units in these nine cities.
Among cities, housing sales in Bengaluru increased by 14 per cent to 8,916 units.
Mumbai saw an increase of 20 per cent in sales to 5,736 units, while Pune witnessed 17 per cent rise at 11,720 units.
In Chennai, housing sales jumped 70 per cent to 3,966 units. There was a marginal increase of 1 per cent in housing sales in Kolkata at 3,058 units.
However, Hyderabad saw a dip of 24 per cent to 3,624 units. Thane, too, saw a decline of 3 per cent to 11,210 units.
In Delhi-NCR, Noida saw absorption jump of 34 per cent at 920 units, but sales in Gurugram fell 41 per cent to 1,992 units.
PropEquity, which is an online subscription based platform, covers over 98,370 projects of 26,881 developers across over 42 cities in India. MJH ANS
The Hindu Business Line: Maharashtra looking for more warehouses.
Mumbai, October 10
In order to prevent large-scale wastage of government procured tur dal and other agricultural commodities, the Maharashtra government has started the process of identifying warehouses spread across various departments and institutions, which would be taken over and managed by a nodal agency.
It will leverage the existing State government and cooperative societies facilities for the storage and create a pan-Maharashtra warehouse grid. The Maharashtra State Warehousing Corporation (MSWC), which is jointly controlled by the Maharashtra government and Central Warehousing Corporation, has been identified as the nodal body for the creating the additional warehousing capacity.
Chairman and Managing Director of MSWC Suhas Diwase told BusinessLine that the process of identifying warehouses, which are held by bodies and departments such as Maharashtra State Agriculture Marketing Board, Maharashtra State Cotton Growers Marketing Federation, PWD and Transport Department, cooperative sugar mills and other institutions, is under way. The warehouse facilities will be checked for scientific storage of grains and other commodities. All such facilities will be geotagged on the GIS platform of MSWC, he said.
MSWC already has its own 1,200 warehouses with a combined capacity of holding 17 lakh tonnes of goods. By the end the current year, another 70,000 tonnes capacity will be added.
A government resolution issued by the Cooperative, Marketing and Textile Department said that the capacity creation is being made under Atal Mahapanan Vikas Abhiyan, which is the flagship programme of the department. In the last two years it has been observed that the agriculture goods procured by the Centre and State government in Maharashtra did not have adequate storage space, therefore a warehouse grid needs to be created.
The departments, which have spare capacity have been asked to share the details about their warehouse to the MSWC by October 31. The warehouses would be checked for scientific storage by MSWC and after that, a MoU would be inked. The designated departments will get rent or revenue share form MSWC for their warehouse space.
Live Mint: Realtors shun price cuts this festive season, offer freebies.
Bengaluru/Mumbai: Potential homebuyers expecting price cuts in the upcoming festive season may have to settle instead for freebies, flexible payment plans, and some cash discount, as builders hold on to prices.
Five years into the real estate slowdown, developers have pinned their hopes on a robust sales season this time, but are still unwilling to lower prices, apart from the correction that has already happened in different pockets.
Analysts, however, question if that’s enough to bring buyers back to the table.
“We are giving ₹3-9 lakh spot discounts in our projects in Thane, Borivali and Oshiwara, in Mumbai. This is done to boost sentiment and encourage people to buy homes. If the cost of the apartment goes down, that becomes the single largest motivator for potential customers,” said Parth Mehta, managing director, Paradigm Realty, which sells houses costing ₹60 lakh to ₹1.5 crore. The discount is offered during the nine days of Navratri this month. The offer may get extended during the entire month. Mehta said while the incentives will not lead to a sharp jump in sales, it would definitely help boost buyer sentiment.
Another Mumbai builder, Ruparel Realty, is offering a Scooty two-wheeler with every purchase in its suburban Kandivali project, but with a caveat that the buyer would get the vehicle at the time of possession of the flat and only “if the payment is done on time”. The homes cost between ₹60 lakh to ₹75 lakh.
“Prices are already attractive. Gifting a Scooty is just a token of appreciation for putting trust in our company. It doesn’t cost much,” said Amit Ruparel, managing director, Ruparel Realty.
Typically, the period between Dussehra and Diwali is preferred for buying homes. Given the tepid sales in the realty sector, developers are now divided between offering temporary incentives and long-term project and price solutions to buyers.
Bengaluru’s Shriram Properties Pvt. Ltd, for instance, is pre-launching a project at its lowest entry price of ₹20 lakh for a two-bedroom home.
“It’s a great opportunity for both investors and end-users. We think the affordability along with an interest subvention scheme we are offering will be attractive,” said Vyoma Pandit, chief marketing officer, Shriram Properties.
Anuj Puri, chairman, ANAROCK Property Consultants said launches have increased this year and apart from the usual freebies, cash discounts and offers like no-registration and stamp duty fees and no EMIs till possession, cash-starved developers are also coming up with other innovative schemes.
“…Some offers can be genuinely rewarding if the customer has picked the right developer and project. On the other hand, offers can also be misleading—for instance, if a financial scheme is not transparent and/or the buyer does not read and understand the fine print. Also, freebies only make sense if the property itself is of inherent value to the buyer,” Puri said.
Mumbai’s Nahar Group is not giving any festive discounts but instead will be offering certain gifts to customers. “In the past five years, cost of construction has increased, be it finance cost, material and labour cost. Even taxation has increased, but we have not increased the property prices,” said Manju Yagnik, vice chairperson, Nahar Group.
Pankaj Kapoor, managing director, Liases Foras Real Estate Rating and Research Pvt. Ltd said developers don’t want to lose customers today, which is why as many as seven different customised payment plans are being offered for new launches.
“A blanket reduction in prices is tough but developers are bringing down prices depending on how smart and demanding the customer is,” Kapoor said.
Mumbai Mirror: Junior housing minister Ravindra Waikar dishoused from MHADA.
Ravindra Waikar ‘forced’ to give up office in MHADA headquarters to newly-appointed chief Uday Samant, allegedly skips visits; Samant now said to be eyeing Housing Minister’s office.
Space crunch has apparently hit the state’s biggest housing development agency, too. Senior Shiv Sena leader and Minister of State for Housing Ravindra Waikar has been edged out of his office at the MHADA headquarters by newly-appointed chairperson of the agency Uday Samant.
The office is the plushest in the Bandra head office.
Things have allegedly come to such a pass that a miffed Waikar, a senior Shiv Sena leader, has stopped even visiting the headquarters.
Chief Minister Devendra Fadnavis had appointed Ratnagiri Sena MLA Samant as MHADA chief last month—a post that didn’t have a full-time chairperson for 16 years. Since Waikar holds the housing department portfolio, he had a designated office on the fifth floor of the MHADA headquarters. Officials said he used to regularly convene meetings there.
Soon after Samant took charge, he was given a chamber which, according to sources, wasn’t big enough for him. He then asked the staff to relocate him to Waikar’s office. “We removed Waikar’s nameplate and Samant moved into Waikars office. A small chamber that was used for BDD chawl redevelopment work was also included in Samant’s office,” said a MHADA official.
To stake his claim over Waikar’s office, Samant apparently told officials that since he was the chief, he deserved “a good office”. He is also said to have reasoned that as Waikar was a minister and already had an office at Mantralaya, he didn’t need another chamber at MHADA.
MHADA officials said Samant is now eyeing the office of BJP leader and Housing Minister Prakash Mehta. Soon after taking charge, Samant had said that MHADA would never be able to achieve its target of constructing 15,229 affordable houses till 2020, taking a dig at the agency’s target of 15,000-plus houses to be delivered in Mumbai alone.
Officials said Samant hasn’t just crossed swords with party seniors— Waikar is much senior in the party hierarchy—but his term has also got off to a rough start. A senior official said Samant was invited for an Engineer’s Day event last month, but the function had to be called off after he expressed his displeasure over being invited just the day before. “He was not happy about being given a last minute invitation. This (the cancellation) sent a very bad message to all our engineers,” said the official.
Samant denied having “taken over” Waikar’s office. “I’m sitting in Waikarji’s office after taking his consent. There is no controversy. Waikarji is my colleague and minister of state for housing; he can come and sit in the office any time. In fact, I also sit in Housing Minister Prakash Mehta’s office often. There was no designated office for the chairperson and so, I had to sit in the minister’s office,” he told Mirror.
Waikar did not respond to calls and text messages.
Waikar is a loyal Sena man, a two-time MLA and former corporator, while Samant joined the party after quitting the NCP just before the 2014 assembly election.
DNA: 381 slum rehab projects approved under PMAY in Mumbai.
Bringing the Slum Rehabilitation Authority (SRA) under the Pradhan Mantri Awas Yojana has benefited lakhs of slum dwellers in Mumbai. And with SRA 381 projects getting approval from the PMAY committees at centre and state this year, its a bonanza for the slum dwellers.
In May 2018, the SRA established a PMAY cell for implementation of the PMAY Scheme. The scheme comprising of about 381 projects, for which Letter of Intent (LOI) was granted after 2015, were presented before the State Level Sanctioning and Monitoring Committee (SLSMC) in a meeting held in the last week of June.
After approval of the state level committee, the projects were presented before the committee headed by Secretary, Housing and Urban Affairs (HoUA) which gave its nod.
According to data available from SRA, 47,984 tenements under PMAY will be alloted at construction cost to the owners of huts constructed between January 1, 2000-January 1, 2011. 28,079 additional tenements, which will be available at construction cost, are being constructed.
Commencement certificate for 22,777 tenements has been issued by SRA. As per SRA policy, 1.24 lakh tenements will be allotted free of cost to owners of huts constructed before January 1, 2000 to who have not claimed subsidy under PMAY. The provisions are being made after the state government directed that SRA scheme be included under the ambit of Pradhan Mantri Awas Yojana – Housing for All by 2022 Scheme.
According to a senior official from SRA’s PMAY cell, they do not claim any subsidy for the free houses but they are part of the target and are included in it. “All future projects will be included in the PMAY scheme. Currently, we have 381 projects,” he said.
V M Muglikar, a senior official looking after PMAY in the state stated that in Mumbai, all SRA projects are under PMAY and have been approved by both the committees.
Under PMAY, the beneficiary gets a benefit of Rs 2.5 lakh, which includes both centre and state’s contribution. To avail benefits under PMAY one cannot own a pucca house anywhere in the country.
May 2018 SRA established PMAY Cell for speedy implementation of PMAY schmes1.24L tenements to be allotted free of cost as per SRA policy47,984 tenements to be constructed for allotment at construction cost28,079 additional tenements being constructed as per new policy22,777 tenements with commencement certificate issued by SRA under PMAY.
The Times of India: Bid to divert Juhu airport land for housing rejected.
MUMBAI: Less than two years after CM Devendra Fadnavis promised in-situ rehabilitation or free housing for existing slumdwellers on Juhu airport land, the state government has backtracked and said the land would continue to be reserved for an airport or heliport. This means 60,000 slumdwellers occupying 78 acres out of the airport’s 385 acres will have to move out.
During the 2017 BMC poll campaign, Fadnavis had said all slumdwellers on airport land would be rehabilitated in-situ. This was in line with PM Modi’s ambitious “housing for all” (by 2022) scheme. The civic body, while preparing the draft DP-2034, had proposed the Juhu airport land be reserved for an airport/ heliport. Local BJP corporator Renu Hansraj had proposed the airport/heliport reservation be deleted and replaced with affordable housing and a tank/pond/lake as per the existing site status.
Hansraj’s request was approved by the BMC general house and was incorporated in the draft DP sent to the state for its approval.
But the scrutiny committee set up by the state government has refused to give sanction to the changed reservation and reinstated the original. The scrutiny committee includes Nitin Kareer, principal secretary, urban development department, and municipal commissioner Ajoy Mehta.
“The reservation for affordable housing scheme on Juhu airport land has been cancelled and reservation for airport restored in the Development Plan–2034,” Kareer said.
The Hindu: SRA project: blacklisted builder’s kin back in fray.
Documents link winning company with developer’s relative
Days after Shiv Infra Vision Pvt. Ltd. won the majority of votes for the redevelopment of Andheri’s Annanagar, Vitthal-Rakhumai and Kasam Nagar project, documents have emerged linking the company with relatives of a blacklisted developer. The relatives had joined hands with L&T Realty but could not officially compete as the latter backed out of the project.
Prithvijeet Chavan, one of the directors of Shiv Infra Vision Pvt. Ltd., had joined hands with Saurabh Shailesh Mehta to be on the board of Virtual Construction Pvt. Ltd. from September 24, 2018. Mr. Mehta is the son of Shailesh Mehta, whose company Sunshine Builder and Developers was blacklisted in June 29, 2015.
Saurabh Mehta formed LTR SSM Private Limited along with L&T Realty to compete in this redevelopment project. Following reports about the blacklisted developer entering the redevelopment project through the back door published by The Hindu, L&T Realty backed out of the project. Its election symbol, the autorickshaw, was then given to Shiv Infra Vision Pvt. Ltd. According to SRA sources, the move could be challenged in court.
Virtual Construction Pvt. Ltd. was purchased from a company called Kakaria Housing. According to documents with the Ministry of Corporate Affairs, Mr. Chavan and Mr. Mehta became directors of Virtual Construction a day before the deadline for filing applications by companies interested in executing the redevelopment project.
The documents indicate similar addresses for Virtual Construction and Kakaria Housing. Ujwal Kakaria, a senior partner with Kakaria Housing, told The Hindu he had sold the company to Mr. Chavan and Mr. Mehta. “I have no stake in the Andheri project. Also, Virtual had zero transactions. We have sold it. If you want any more details you can get them from them directly,” Mr. Kakaria said. Mr. Chavan reportedly was in New Delhi at the time of going to press.
“He (Mr. Mehta) has direct links with Shiv Infra’s owner, through another company. Is it a coincidence? Incidents such as changing the election symbol and giving it to this company and allegations of malpractice, point to the need for a detailed inquiry,” said a source. The ₹5,000-crore redevelopment project was stuck in controversy for years after it was linked with the alleged Maharashtra Sadan scam that is currently under investigation by the Enforcement Directorate. It was also linked to former Maharashtra minister Chhagan Bhujbal, who was in jail for more than a year and is now out on bail.
The slum was earlier to be redeveloped by M/s K.S. Chamankar Enterprises, which was terminated on June 19, 2017 over its alleged links in the Maharashtra Sadan scam. On September 15, 2017, Mr. Somaiya had written Additional Chief Secretary (Housing) seeking permanent disqualification of M/s K.S. Chamankar Enterprises from this redevelopment project on the basis of investigations in to the alleged scams against them. On November 28, 2017, the termination order was modified to bar all blacklisted developers or entities associated with them.
DNA: Mumbai: No ‘dalali’ good for home buyers, not for estate agents.
An advertisement claiming to get rid home buyers of dalali (brokerage), has sort of shaken up the real estate industry. The advertisement by R K Home Solution says it’s against two per cent brokerage charged by brokers; service charge, which is refundable, will be applied during the deal.
However, this hasn’t gone well with the conventional real estate brokers. A few brokers have complained against the advertisement to MahaRERA, citing it to be in bad taste and questioned whether it is registered with MahaRERA. Vikram Mehta of Property People, a group of brokers sent a message to MahaRERA asking the authority to do something about it. “We charge two per cent brokerage for the hard work we put. We show flats around, we spend our energy and only when the deal clicks we charge brokerage, we do not fleece. I also observed that the advertisement doesn’t have a MahaRERA registration number which is mandatory for real estate agents.”
The company, however, claims that it isn’t against brokers, it’s only against the brokerage. Ashok Narang, Vice President of R K Home Solutions said, “We are not against brokers, we acknowledge their contribution to the real estate industry. We are against brokerage in our project. Service charge, which is refundable after a period of six years, will be applicable.”
“We do have a MahaRERA registration number,” he added.
Meanwhile, Mumbai Grahak Panchayat said that only experience will define whether such a thing is good or bad, but competition is always welcome. Adv Shirish Deshpande, Chairman of MGP said, “Earlier we had traditional brokers only. Then came the web portals and now this is a new concept. Brokers charge brokerage after a deal is finalised, web portals in most cases provide free service to home buyers. Only experience will tell whether this is worth it or not. Also, we welcome competition, but it has to be transparent and fair.”
Even Deshpande has sent messages to MahaRERA regarding the missing MahaRERA number in the advertisement. He has asked the authority to take action if the project is not registered.
- A few brokers have complained against the advertisement to MahaRERA
- Mumbai Grahak Panchayat said that competition is welcome, but it needs to be transparent
The Economic Times: Xander to invest Rs 2,550 crore to acquire 4.5 million sq ft Office Projects in Hyderabad.
MUMBAI: Xander Investment Management, the private equity real estate arm of global investment firm, The Xander Group, has signed a $350 million or Rs 2,550 crore primary investment with Hyderabad-based Phoenix Group for development and subsequent acquisition of 4.5 million sq ft office space in Hyderabad.
Located in Gachibowli, the buildings will be delivered in phases between 2020 and 2023, and on completion be able to accommodate over 50,000 employees, Xander said in a statement.
“We are driven to explore new avenues where we can positively leverage our extensive operating expertise and scale in the office sector in India, supporting export contribution and job creation in the country. We are pleased to work with Phoenix to expand our presence in the Hyderabad market”, said Arpit Singh, Principal at Xander Investment Management.
According to Singh, this develop-to-core acquisition in Hyderabad fits well with Xander’s existing fully owned office portfolio.
“At this point in the cycle, the risk/return metrics that many office development opportunities present are attractive. We intend to expand our develop-to-core office investment strategy as the right opportunities present themselves,” he added.
With this latest investment, Xander continues its focus on Indian real estate.
Xander Investment Management has been actively investing in India for over a decade and has acquired and developed over 81 million sq ft of real estate across all primary asset classes, including office, retail, industrial, budget and luxury hotels, warehousing, and residential condominiums and townships. Since 2005, the Xander Group has committed more than $3 billion to the Indian market across private, public, credit and venture investments.
The Hindu Business Line: Now, NRIs prefer ‘affordable homes.’
Average cost of home buys down to ₹51.5 lakh
Mumbai, October 8
It’s now the turn of NRIs to jump onto the affordable housing bandwagon. The average ticket size of NRI housing purchases has gone down from ₹70 lakh in FY16 to ₹51.5 lakh now as the global affinity for micro apartments percolates to India, according to data from consultant 360 Realtors.
For this fiscal so far, the average ticket size of the NRI investments is ₹51.5 lakh, easing out by almost 23 per cent compared to the previous year and 26 per cent since FY16. “In metros like Delhi-NCR, Mumbai and Bengaluru, a sizable population comprises millennials, mostly migrants. They have a high propensity for micro-apartments, studio or one BHKs due to lower rentals and ease of maintenance, which increases rental as well as resale opportunities,” Ankit Kansal, Founder and MD, 360 Realtors told BusinessLine.
Higher rental yields
Rental yields (income received from the property as a percentage of the its cost) from 1BHK segment in Bangalore is 3.50 per cent, Pune 3.60 per cent, Mumbai 3.20 per cent and Delhi-NCR 3.40 per cent. It is higher than 2BHK and 3BHK segment, both of which give less than 2.5 per cent returns. “Similar to international markets like New York, Tokyo and London, rental yields from smaller units in India are outperforming their bigger counterparts by 50 to 100 basis points, Kansal said.
Pankaj Kapoor, founder and MD of Liases Foras said the probability of finding a buyer for a smaller apartment is more than for luxury apartment. “There is supply glut in the luxury segment, where future appreciation is not in sight,” he added. The sale of luxury homes has gone down from 14 per cent of overall residential sales in FY16 to just 5 per cent now.
Backed by high demand that is constantly spiraling northwards, the potential capital returns are higher in smaller units. Farshid Cooper, Managing Director, Spenta Corporation said houses with a higher ticket size take longer liquidate, if required in future.
“Smaller ticket sizes offer good growth and more value for money in the near term, especially for NRIs, due to rupee depreciation. Additionally, in the recent past, investing in a good brand name for smaller ticket size has brought good returns on resale,” he said.
Low ticket size of smaller apartments offers lower entry barriers for young, first time NRI buyers with lower investment bandwidth. “Consequently, this defers their involvement in high ticket-size projects. As smaller units are priced moderately, young NRI buyers are actively drawn towards them,” Kansal said.
Indian developers are also coming up with studios and micro-homes with in-built furnishing. “These apartments are in sync with the expectations and preferences of international buyers. In-built furnishing are preferred by expatriates as it saves a lot of time,” he added.
The Hindu: Green signal for coastal road project, but concerns remain .
Taking a re-look at the ₹20,000-crore project, which is set to become a reality
Years after it met with opposition from fishermen, environmentalists and civic activists, the city’s coastal road project is set to become a reality.
With new names, concepts and two agencies executing the almost ₹20,000-crore project, rivalling its contemporary, the Metro, anticipation is at its peak. Though contractors have been finalised, concerns remain. The Hindu takes a re-look at the project.
The Brihanmumbai Municipal Corporation (BMC) is in charge of a 9.98-km section from Marine Drive to Worli (referred to as south section) while the Maharashtra State Road Development Corporation (MSRDC) is overseeing the Versova-Bandra Sea Link (VBSL).
The BMC’s standing committee in the third week of September cleared the ₹12,721-crore south section proposal. The contract for the first package from the Worli end of the sea link to Haji Ali was awarded at 12.35% more than the revised estimates to a joint venture of Hindustan Construction Company and Hyundai Development Corporation. Larsen and Toubro was selected to construct the stretch from Priyadarshani Park on Napeansea Road to Haji Ali at 1.94% more, and Princess Street flyover to Priyadarshini Park at 10.43% more than the revised estimates.
The project cost now stands at ₹12,721 crore, and the BMC has claimed that the road would save 70% travel time and 34% fuel every year. Construction work will start by the end of 2018 and is expected to be completed in four years.
The 17.17-km-long VBSL (thrice the length of the Bandra-Worli Sea Link) will have exits at Bandra, Juhu Koliwada, and Versova. It is expected to cut down the travel time between Versova and Worli to 15 minutes from the 45-60 minutes it takes at the moment. Construction is expected to commence in October and the project is slated to be completed by 2023.
Anil Ambani-led Reliance Infrastructure Limited in association with Italian major Astaldi S.p.A, the world’s third largest player in bridge construction, have been chosen for the construction of the ₹7,000-crore VBSL. While there will be no toll levied up to Worli, the VBSL will collect ₹250 as toll for cars and will be in force until 2052.
The MSRDC is planning to add three extra road connectors to seamlessly connect it to the Western Express Highway. The south section will also have four interchanges to provide easy entry and exit from the road at periodic intervals.
The south section will have two 3.45-km tunnels constructed using tunnel boring machines under Malabar Hill. Of the four lanes on either side, one each will be reserved for the Bus Rapid Transit System (BRTS) and emergency vehicles.
The BMC will reclaim 90 hectares from the sea primarily for connecting roads to the proposed entry-exit to the tunnels. Of the 90 hectares, only 22% will be used for construction and the rest will be kept for public amenities like landscaping, promenades, a 6.2-km jogging and cycling track, a butterfly park, open air theatre, playgrounds, bus stops, subways, and police posts. Three parking lots will come up at Amarsons, Haji Ali and Worli interchanges, with a combined capacity to accommodate 1,625 cars.
At what cost?
Since its conception, the coastal road project has met with scepticism. In 2015, the draft Development Project Report (DPR) was published on the BMC’s website for inviting objections. It received 3,375 suggestions and objections. Rajesh Mangela of Juhu Moragaon Machhimar Sahakari Sanstha is among those who opposed the project. He said, “The government has no regard for our lives. Even if they have the necessary permissions from agencies, those are conditional. They have to protect our villages and livelihood as we are an indigenous community.”
According to Mr. Mangela, fishing will be largely affected in Moragaon, Juhu Koliwada, and Chimbai villages due to the construction noise and tidal upheaval. He claimed the MSRDC never conducted a social impact assessment of the project and never held public meetings with fisherfolk.
Moragaon’s city survey record (CTS) no. 3 has a proposed interchange of the VBSL which Mr. Mangela said was initially reserved as a no development zone where fishing and ancillary activities were to be allowed. With the plot gone, it will be a big blow to fishing.
The MSRDC will provide around five hectares in Juhu Koliwada for a casting yard. The collector transferred the land a few weeks ago.
The Hindu had reported on September 19, “The MSRDC has sought permission from the forest department to cut over 1,000 mangrove trees for the VBSL. This will take some time as the corporation will first need an approval from the Bombay High Court before they can commence work, as the High Court had said that the State cannot permit destruction of mangroves for private, commercial, or any other use, unless the court finds it necessary for public interest.” The Sanstha, along with NGO Vanshakti and Bandra West Residents Association (BWRA), had moved the National Green Tribunal, challenging the environmental clearance given to the VBSL.
Explaining the petition, Stalin D., director of Vanshakti, said, “Even if a thousand-odd mangrove trees that will have to be cut for the VBSL are transplanted, transplantation of mangroves is a sham. Every mangrove tree has around 30,000 roots under water. The change in tidal pattern will lead to erosion of our beaches and, soon, Mumbai’s public beaches may vanish altogether. There is a fear of flooding as well.” The BMC has planned a 6.44-km sea wall to prevent coastal erosion and serve as a protection from waves and floods.
Daryl D’Monte of BWRA said, “Countries across the world are encouraging public transport. Then why are we encouraging private cars? The existing Bandra-Worli Sea Link was supposed to cater to 1.25 lakh cars every day, but less than 50,000 vehicles use it now. Will the State government be able to justify this mega project in reality?”
Although most of these concerns were addressed in terms and conditions of the provisional no objection certifcates (NOCs) given by various authorities, including the Ministry of Environment and Forests (MoEF), to the BMC and the MSRDC, these people want a strict vigil on whether these conditions are met. As Mr. Mangela said, “Every condition should be met before starting work, not after.”
‘Waste of public money’
Hussain Indorewala, activist and researcher, said the projects are an outright waste of public money. He said, “To call these projects inefficient is putting it mildly because the government is making everyone pay for the infrastructure that will serve only a small percentage of the population.”
According to the BMC’s environment status report, the city had 33.5 lakh vehicles as of March 31, of which over 20 lakh, around 64%, were two-wheelers and three-wheelers. The VBSL and the south section, like the Bandra-Worli Sea Link, will be out of bounds for this category of vehicle owners. According to the MSRDC’s own estimates, 86% of the sea link’s traffic is expected to be cars.
Mr. Indorewala said, “The government by investing in such projects is providing an indirect subsidy to car owners, while not providing subsidy to public transport operators in distress such as the BEST.” He said the government can easily write off all of the BEST’s debts and also upgrade the ailing transport undertaking for a fraction of the cost, benefiting the city as a whole.
A plan prepared by the citizen’s collective, Aamchi Mumbai Aamchi BEST, highlighted that an upgraded bus system or a BRTS can be executed at ₹2,700 crore and will benefit a much larger section of the population. While the coastal road also has a provision for a BRTS system, Mr. Indorewala said it will not work since it will be cut off from the rest of the city.
“Dedicated bus lanes or the BRTS need to be part of the city’s road network and go through important roads as they serve the majority of commuters. Having a BRTS on a road that bypasses the city does not serve the purpose,” Mr. Indorewala said.
The plan also highlighted that big-ticket projects such as the Eastern Freeway and the Bandra-Worli Sea Link are practically used by private vehicles.
Incidentally, neither of the two roads allow two-wheelers, and only a handful of BEST services run on the Eastern Freeway.
Versova-Bandra Sea Link
Contractors: Consortium of Reliance Infrastructure and Astaldi S.p.A
Length: 17.17 km
Bandra to Versova: 10 mins (Travel time expected)
Cost: ₹6,993.99 crore
Contractors: Larsen & Toubro and joint venture of Hindustan Construction Company and Hyundai Development Corporation
Length: 9.98 km (Bandra-Worli Sea Link to Girgaum Chowpatty)
70% Expected reduction in travel time
The Indian Express: Maharashtra, Three years on, govt affordable housing target nowhere in sight.
Struggling to achieve the target of building 19 lash affordable homes by 2022, the government has proposed the formation of the new corporation, which would be led by CM Devendra Fadnavis.
The state’s housing department will table a proposal in this regard to the Cabinet, which is expected to approve it. (File photo)
Maharashtra will now get a separate housing corporation for construction of affordable houses under the Centre’s flagship ‘Housing for All’ initiative. Struggling to achieve the target of building 19 lash affordable homes by 2022, the state BJP government has proposed the formation of the new corporation, which would be led by the chief minister.
The state’s housing department will table a proposal in this regard to the Cabinet, which is expected to approve it.
In May 2015, Chief Minister Devendra Fadnavis had declared Maharashtra’s new housing policy, which had targeted the construction of 19 lash new affordable units within seven years. But senior officials said on Monday that barely 1872 affordable units have been completed so far.
While the government has so far approved 273 projects involving the construction of 6.90 lash houses in all, officials said that the construction work is ongoing for 1.7 lash-odd units. With more than 370 urban local bodies and planning agencies involved in the initiative, the government had previously nominated the state-run Maharashtra Housing And Area Development Authority (MHADA) as it’s nodal agency. But with MHADA facing a resource crunch, the new corporation will now be tasked with the nodal responsibilities for large-sized affordable housing projects involving the construction of 5,000 units or more, said officials.
Incidentally, the proposal is also to nominate a person from the construction industry as the working president of the new corporation. “Affordable housing under the public-private partnership route (where the government provides buildable area incentives for landholders for construction of affordable homes on their lands) is a major component of the initiative. An industry representative will help push the creation of more houses under this component,” said a source.
Another task of the new corporation will be to raise monetary resources through loans and bonds for financing such projects. Projects approved under the initiative are entitled for a subsidy ranging from Rs 2 lash to Rs 2.7 lash.
Given the state’s current fiscal position, the government — which has to contribute up to Rs 1 lash towards the subsidy component — would find it difficult to pay for the subsidy component for all the targetted houses from the state’s kitty.
While the state has already asked agencies such as the Mumbai Metropolitan Region Development Authority, the City and Industrial Development Corporation of Maharashtra Limited, the Slum Rehabilitation Authority, among others to share some of this burden, sources said that it is also looking to raise bonds and loans to meet the expenses.
Meanwhile, a proposal for extending mobilisation advance to housing federations building affordable units on “cooperation basis” is also on the cards. Sources said only one such project, involving the construction of 30,000 affordable homes, has been approved in Solapur.
Mumbai Mirror: Maharashtra govt gives MMRDA a slice of Aarey land.
Dairy devpt dept official says had no say in it; activists slam loss of green cover.
More than a year after the Mumbai Metropolitan Region Development Authority (MMRDA) temporarily sought 8,000 sqm of land in Aarey Colony to house labourers and build machinery yards, the state dairy development gave it permanent charge of the plot on Monday.
Environmentalists alleged that the move smacked of a land-grabbing attempt.
The MMRDA, which is developing nine Metro corridors in the city—Mumbai Metro Rail Corporation is handling line 3—had in February last year asked for the land on a temporary basis for a maximum of five years, seeking to construct a camp for Metro labourers, a steel yard and a machinery yard for the Dahisar East-Andheri East corridor (line 7). This parcel of land is close to the Western Express Highway, from where Metro-I passes. It had also sought a place to build Metro Bhavan, a control room to operate the signalling system of all corridors. Then MMRDA bosses had claimed that trees would be transplanted on the plot once the agency was through with its work.
The demand had drawn the ire of environmentalists, who warned that such a move would spell an end of one of the last green covers of the city.
Three months ago, the MMRDA changed its tune: It demanded permanent charge of the plot. The dairy development department granted this through a government resolution (GR) on Monday, leaving the green brigade up in arms again.
D Stalin of NGO Vanashakti, which has been fighting against the losing green cover of Aarey, said the state government’s move “confirms the fears that entire Aarey is up for sale”. “The state government is busy selling Aarey to all and sundry,” he alleged.
Zoru Bhathena of the citizen-driven Save Aarey Movement, said, “The government is out to ruin Aarey. First, the MMRDA demanded land on a temporary basis and then asked for it on permanent basis. The government only looks at Aarey as a land bank.”
MMRDA spokesperson Dilip Kawathkar said land has been given as per the agency’s requirements.
A junior officer from the dairy development department claimed that it had no say in the allotment of land and the decision was taken at a warroom meeting of Chief Minister Devendra Fadnavis.
Aarey Colony is spread over 3,160 acres.
The Economic Times Wealth: Ready-to-move-in flats in demand; only 5% buyers want to invest in new projects.
NEW DELHI: With many real estate projects stuck across the country, prospective home buyers are shying away from investing in newly launched projects and instead looking for ready-to-move-in flats or units to be completed within next six months, according to a survey.
As per the online survey by property consultant ANAROCK, about 49 per cent respondents prefer ready-to-move-in properties while 35 per cent are looking to buy property which will be in ready-to-move- in stage within the next six months.
Eleven per cent participants favoured those properties that will be ready within a year and only 5 per cent buyers want to put their money in newly launched projects.
The survey was conducted in seven major cities — Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Kolkata and Pune — and saw participation of 2,621 people.
“Ready-to-move-in property has become the flavour of the season with buyers preferring to see what they get. More so, buyers prefer to stay away from risks associated with newly launched projects including incessant delays, few developers claiming bankruptcy or even carrying on with unscrupulous activities, etc,” ANAROCK said.
Real estate market, especially that of Delhi-NCR, has been severely affected by defaults and significant delays in deliveries of housing projects. Lakhs of home buyers in Noida, Greater Noida and Gurugram are stuck in projects announced by Jaypee group, Amrapali, Unitech and The 3C Company, among others.
“Buying property is a very judicious decision and the stage of construction indirectly affects one’s budget. In a significant trend witnessed in the Indian real estate market recently, demand for new launches has almost ceased to exist in most cities across the country,” it added.
Live Mint: Shapoorji Pallonji Real Estate plans land monetization programme.
Shapoorji Pallonji Real Estate is also in the process of raising another $200 million equity under its mid-income housing platform, Joyville, from existing investors.
Mumbai: Shapoorji Pallonji group’s real estate arm plans to monetize about 100 acres of land over the next two years to raise about ₹ 2,000 crore, bulk of which will be used to repay debt. Shapoorji Pallonji Real Estate is also in the process of raising another $200 million equity under its mid-income housing platform, Joyville, from existing investors—International Finance Corporation, Asian Development Bank and Standard Chartered Private Equity whose real estate business is now part of UK-based Actis.
“We have a big land monetization plan. While we have a strong development pipeline, equally important is our asset monetization plan. We have so many assets to monetize,” Venkatesh Gopalkrishnan, chief executive officer at Shapoorji Pallonji Real Estate, said in an interview.
As part of its asset monetization programme, the company plans to divest about 20-25% of legacy lands, which it owned for years, and sell a fully-leased 2 million sq. ft software park called SP Infocity in Pune.
The land parcels include 30-40 acres in Pune, 25 acres in Kolkata and 30-40 acres in Mumbai.
Created in 2016, the Joyville platform had raised $250 million in its first round.
The funds have been utilized in three existing and four forthcoming residential projects.
“We can’t hold on to land endlessly,” said Gopalkrishnan.
He declined to disclose the total debt.
Shapoorji Pallonji Real Estate has an outstanding debt of over ₹ 4,000 crore, said two people familiar with the matter. The company plans to trim the debt to about ₹1,500 crore over the next one or two years, said the two people cited above, who did not want to be named.
“We have one eye on debt. It is not very high. Considering we have around 90 million square feet of development in the pipeline and so much of land holdings, we are comfortable. But, at the same time, we don’t want to go out of proportion,” said Gopalkrishnan.
Meanwhile, Shapoorji Pallonji is also sharply ramping up its residential business after a slow pace of launches in the last one year. The company plans to start about 15 new projects spanning both mid-income and luxury housing over the next year, compared with only five in the last 12 months.
The forthcoming projects will mainly include new housing projects, besides a few comprising new phases of existing projects. The company is also developing about six million sq. ft of commercial space in Pune.
“End of this financial year, we should be selling around 3,500 homes, which is double of what we did last financial year,” said Gopalkrishnan. “This is mainly on the back of new launches.”
The company has unsold inventory of about 35% to 40% across most of its projects, he said, adding it now plans to sell about 3,500 to 4,000 homes each year.
Shapoorji Pallonji is also gearing up to enter the national capital region centred on Delhi over the next four to six weeks through the launch of homes under the Joyville platform in Gurugram. It is also in advanced stages of acquiring land to launch projects in Hyderabad and Chennai on the same platform.
“In all likelihood, the investments will continue. We are working on it (the second round of fundraising on Joyville platform),” he said without elaborating.
Mumbai Mirror: Court denies developer relief from arrest in cheating case.
Dhanista promoters allegedly took money from 36 buyers but didn’t deliver
After seven months of interim protection from arrest for allegedly cheating home buyers, the Mumbai Sessions Court has rejected the anticipatory bail application by Dhanista Group Builders and Developers promoter Devidas Rao and four others, setting the stage for their possible arrest.
Additional Sessions Court Judge MM Umar on Saturday rejected the bail applications by Rao, his son Tejasvi, daughters, Nandita Rao and Sowparnika Rao-Atwane, and an employee, Bhavana Menon, booked by the Vikhroli Parksite police on charges of cheating 36 home buyers for a sum of Rs 6.28 crore.
In July, the court had given an ultimatum to Rao to deposit Rs 50 lakh by July 23 and warned that unless he deposited the money, his interim protection would be vacated. However, Rao failed to deposit the amount, and continued to plead for more time to do so.
“On Saturday, the court refused to give him any more time, and rejected the bail applications of all five. They sought more time to approach the Bombay High Court, but the court refused to give them more time,” advocate Chitra Salunkhe, representing home buyers, told Mumbai Mirror.
Immediately after the interim protection was vacated, the investigating officer of the case, Gokul Borse, went to the residence of the Rao family at Wadhwa The Address complex at Ghatkopar with the intention of taking them into custody. “We did not find them at the residence at Wadhwa complex opposite R City Mall in Ghatkopar,” said Assistant Police Inspector Borse of Vikroli Parksite police.
Rao and others are likely to move the Bombay High Court to appeal against the Sessions Court order.
When contacted, advocate Saikumar Pathrudu M, representing the developer, said: “We explained to the court that my client only got approvals for his projects in January 2018 and hence could not construct. My client is also facing serious liquidity problems and tried to raise funds from several banks and financial institutions but failed. Mr Rao also offered eight flats to the buyers, but they rejected the offer as the flats are in Pune. The court rejected the bail appl ications last evening. The developer may approach the High Court.’’
A group of 11 home buyers had lodged an FIR against Rao and four others at Vikroli Parksite police station on March 6 this year under IPC sections for cheating, and breach of trust under IPC and Section 4 of Maharashtra Ownership of Flats Act (MOFA) (not registering agreement for sale after accepting 20 per cent of flat cost). The developer accepted more than 20 per cent of flat cost from buyers who booked flats in Dhanista Allure in Mulund, Dhanista Gardenia in Powai and Dhanista S u n s h i n e i n Ghatkopar, but failed to construct either of the three projects.
Three days after the FIR was lodged, Rao and others moved the Mumbai Sessions Court for anticipatory bail and the court extended the interim protection for seven months on the assurance that he would repay the money. After Mumbai Mirror reported the case, more home buyers lodged complaints with the police. “As of now, we have received complaints from 36 buyers, and the total amount has increased to Rs 6.28 crore,” Borse said.
DNA: Mumbai Man pays for flat without contract.
Buildings Image for representation.
In a case pertaining to property possession, the Maharashtra Real Estate Regulatory Authority stated that the RERA Act does not include any express provision with regards to refund of the amount paid by the homebuyer, and hence forwarded the case — because it involves a large amount of payment made by the complainant — to investigative authorities.
A homebuyer had approached the MahaRERA stating that he had paid Rs 50 lakh in cash to the builder for the flat, the possession and papers of which he hadn’t received. The developer denied the allegations.
Ganesh Gujeti had approached the housing regulatory authority against Ismail Amdule, and requested the authority for either a refund, or the possession of the flat along with the document of agreement for the same. Gujeti had booked a flat in the Muktanand CHS Ltd project in Kurla.
The complainant stated that the total cost of the flat was Rs 64 lakh, of which he paid Rs 59.50 lakh to the builder. Of the total amount paid, an amount of Rs 50 lakh was paid in cash, Gujeti said.
Refuting the allegation, the builder said that he had refunded Rs 9 lakh via cheque by cancelling the booking. Notably, both the parties did not have a sale agreement.
MahaRERA asked the complainant to file an affidavit on the allegation of cash payment. Gujeti followed suit and also filed payment receipts. The developer also made his submission.
On the issue of possession of the flat, MahaRERA said that as there was no registered agreement for sale nor an allotment letter, granting possession of the flat doesn’t stand. Speaking on the issue of refund, Dr Vijay Satbir Singh, member, MahaRERA, who was hearing the case, said there is no provision in the Act under which the complaint can be entertained, and therefore it is not maintainable.
However, Singh, while disposing the case also said, “The MahaRERA has noticed that huge cash transactions have been made in the case as is evident from the affidavit submitted by the complainant along with the receipts duly signed by the respondents, and the said issue is required to be investigated through the concerned authorities. Hence, the MahaRERA directs the Secretary, MahaRERA to forward the affidavit filed by the complainant to the concerned investigation agency for necessary action.”
BLIND TO BALONEY
Neither the homebuyer nor did the builder sign a sale agreement
Rs 64L Cost of the flat
Rs 59.50L Total amount paid by the homebuyer
The Economic Times: 348 infra projects show cost overruns of over Rs 3 lakh crore.
As many as 348 infrastructureNSE -0.31 % projects, each worth Rs 150 crore or above, have shown cost overruns to the tune of over Rs 3 lakh crore owing to delays and other reasons, a report said. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.
“Total original cost of implementation of 1,351 projects was Rs 15,72,066.02 crore and their anticipated completion cost is likely to be Rs 18,72,201.51 crore, which reflects overall cost overruns of Rs 3,00,135.49 crore (19.09 per cent of original cost),” the ministry’s latest report for May 2018 said.
Of these 1,351 projects, 348 reported cost overruns and 263 time escalation.
According to the report, the expenditure incurred on these projects till May 2018 is Rs 7,47,302.42 crore, which is 39.92 per cent of the anticipated cost of the projects
However, it said the number of delayed projects decreases to 191 if delay is calculated on the basis of latest schedule of completion.
For 650 projects, neither the year of commissioning nor the tentative gestation period has been reported. Out of 263 delayed projects, 66 projects have overall delay in the range of 1 to 12 months, 50 projects (13-24 months), 71 projects (25-60 months) and 76 projects (61 months and above), it added.
The report attributes the time overrun to a host of issues, including delay in land acquisition, forest clearance, supply of equipment, fund constraint, Maoist incursion, legal cases and law and order situation.
The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in forest clearance, delay in supply of equipment, fund constraints and geological surprises, among others.
It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported.
The Economic Times: Real Estate developers turn to IoT, Artificial Intelligence to woo home buyers.
The Asian Age: SRA initiates survey of slums.
Live Mint: Trent to acquire Lodha office space for ₹200 crore.
Mint: Trent to acquire Lodha office space for ₹200 crore
Trent may buy four floors and lease another floor at the Lodha’s upcoming tower at Wadala in Mumbai.
Mumbai: In one of the largest office deals this year, Tata group’s retail arm Trent Ltd is close to buying around 120,000 sq. ft of space at a Lodha group property coming up at Wadala in central Mumbai for over ₹200 crore, two people in the know said.
Trent will buy four floors and lease another floor at the tower, said the first of the two people cited above, both of whom spoke under condition of anonymity. Each floor is spread across 30,000-33,000 sq.ft, the person said.
While Trent is purchasing four floors at ₹17,000-18,000 per sq.ft, the fifth floor would be leased at ₹150 per sq.ft per month, according to the second person.
The 30-storey commercial building is part of a mixed-used development called New Cuff Parade that comprises 10 residential buildings and two commercial towers.
Spokespersons for Trent and Lodha Developers Ltd declined to comment on the development.
Trent operates some of India’s largest retail stores including Westside, Landmark and Star Bazaar. It is planning to use the new space, which is expected to be ready by January, to expand its office. At present, its corporate office is located at Bandra Kurla Complex (BKC).
The Tata group company, which also has a joint venture with Spain’s Inditex group that owns clothing brand Zara, has been on an expansion spree.
In a 21 August interview, Trent chairman Noel Tata said the company has “speeded” up its expansion with plans to open around 40 stores of Westside, apart from ramping up its retail brands. At present, Trent has over 130 Westside stores across the country.
Lodha group, which has largely focussed on building homes, has ramped up its commercial office business in the last year. By 2021, the Mumbai-based firm expects to have commercial assets under management of $1 billion. At present, it is also setting up a warehousing park in the city, apart from developing retail and office buildings.
Despite the slowdown in the residential market, commercial property business has continued to pick up in the last three years. According to an August report by property consultant firm Colliers International, around 12.6 million sq ft of office space was leased in India during April to June period this year, driven by expansion from technology companies. According to the report, some of the major leasing transactions in Mumbai include WeWork leasing around 75,000 sq ft at Worli and Kotak Mahindra taking up around 70,000 sq ft at Thane.
The Hindu Business Line : Delos ties up with Knight Frank to promote healthy buildings in India
Wellness real estate company, Delos, has joined hands with Knight Frank India to incorporate wellness technologies and promote healthy buildings in the country, which has 14 of the 15 most polluted cities in the world.
Wellness real estate promotes buildings proactively designed and built to support the holistic health of their residents by incorporating natural elements like lighting and fresh air. Globally, this opportunity is pegged at $134 billion. “This initiative will ensure that ‘people’ experience an enabling environment, keeping their physical and mental well-being in focus,” Shishir Baijal, Chairman and Managing Director, Knight Frank India, said at a press conference today.
Knight Frank India has signed an MoU to extend Delos technology and product offerings in India, including the DARWIN (Delos Automated Residential Wellness Intelligence Network) platform that utilises Delos’ cloud-based algorithms and sensor technologies to enhance health and mitigate harmful indoor environmental concerns.
Knight Frank will promote the technology in the Indian real estate ecosystem. “The opportunity in India is massive. Both existing and new buildings can benefit from wellness real estate,” Delos CEO and Founder, Paul Scialla, said.
Knight Frank will also promote the WELL Building Standard for commercial properties. WELL is a performance-based system for measuring, certifying and monitoring features that impact human health and well-being in the built environment. Administered by the International WELL Building Institute (IWBI), WELL is a certification by Green Business Certification Inc. (GBCI). “Globally, there are over 5,000 WELL accredited architects, engineers and other stakeholders in the real estate ecosystem. We will see them in India also now,” Scialla added.
Live Mint: Jerry Rao-backed VBHC looks to raise ₹300 crore to fund expansion
Bengaluru: VBHC Value Homes Pvt. Ltd has deferred its plan to go public and will instead raise ₹300 crore as the Jerry Rao – backed developer shifts from low-cost homes to mid-income housing projects.
The affordable housing firm will raise capital through a combination of debt and equity to fund expansion and make land payments, Ram Walase, managing director and CEO of VBHC Value Homes said in an interview. With investors still wary of real estate, particularly the residential sector, VBHC, which had deferred its IPO plan last year to this year, feels it’s not the right time to launch a public offering for another year and a half, Walase added.
VBHC plans to launch a mid-income housing project at New Panvel near Mumbai before Diwali, at ₹4500 a sq. ft, with one- and two-bedroom homes.
“We will continue to remain an affordable housing firm but the definition of affordable has changed. Earlier, it was low-cost homes but we are now coming closer to city centres with our projects. Customers today want smaller homes but in centrally located places, where there is existing infrastructure,” said Walase said.
With low-cost homes not fetching enough margins and luxury homes not finding buyers, builders have found a sweet spot in mid-income housing. Though it would depend on the specific market, such homes typically cost ₹25-50 lakh.
It has helped that many government incentives for housing have targeted this price segment, boosting the confidence of builders and buyers alike.
VBHC has five ongoing projects and is planning to tie up land in Mumbai Metropolitan Region, Pune and Bengaluru.
“Going forward, we will focus on these markets and create depth and expand in these instead of multi-city expansion. We are also seeing opportunities of acquiring projects that are partly done, but have all approvals and the existing developers don’t want to continue,” Walase said. In terms of delivery, a critical part of the real estate business today, the company will deliver 1,200 units in 2018-19.
VBHC was set up by Rao and P.S Jayakumar, former Citibank colleagues, after the former sold a majority stake in IT services firm Mphasis Corp.
They launched VBHC Value Homes in 2009 and started their first project—Vaibhava—in Bengaluru in 2010. In 2015, Jayakumar resigned from VBHC to fill up the top position in state-owned Bank of Baroda as managing director and chief executive.
DNA: Vote over, Andheri RTO slum gets a developer
Finally, the elections to find a developer for the Andheri RTO slum ended on Wednesday with Shiv Infrastructure getting the contract, bagging 213 of the 330 votes at stake. A Gujarat-based developer, who ran a campaign, releasing front-page advertisements on newspapers, promising freebies to slum dwellers, managed to secure 103 votes.
The election officer from Slum Redevelopment Authority said, “the eligible voter count stood at 472. Total vote polled was 330 of which 323 were valid. Shiv Infrastructure received 213 votes, Manav Infrastructure 103 votes, and the rest 1, 2 and 4 votes. Initially, there were six developers for the contest, of which one withdrew on Monday, leaving five in the fray.
The seven invalid votes were of those who didn’t vote for anyone.
With election results out, the report will be submitted to the senior officials of SRA.
Shiv Singh, one of the slum dwellers said, “I am happy with the results. Most of us were united and we elected one developer, He has assured us to fulfil our demands. We want homes instead of our homes that we are giving away.”
The project comprises three slums – Kasam Nagar, Anna Nagar and Vitthal Rukhmai. According to the residents, the process started in 1999 but never took off. Finally, the Slum Rehabilitation Authority removed the builder over the inordinate delay and called for the selection through ballot paper. The slum pocket is spread over an area of three lakh sq.ft.
Manav Infrastructure had come out with ads offering the slum dwellers fully furnished homes, an insurance of Rs 5 lakh, a deposit of Rs 1 lakh for the marriage of the daughters of the slum dwellers for next 10 years, Rs 1 lakh each every year for the education of sons for next 10 years and homes for all 900 families living there.
Pramod Parekh, who heads strategic alliances at Manav Infrastructure appeared unhappy with the results and said, “There were many that weren’t right and we are planning to approach the appropriate authority against the elections.”
However, SRA officials say everything was systematic. They said at first, biometric registration of slum dwellers was conducted post which a peaceful election was held and the results announced.
Meanwhile, housing experts say the election is a good way of appointing a developer, but then it has to be free and fair and authorities should keep an eye that no one has a free run. Dr Sanjay Chaturvedi, a housing expert, said, “Competition, involving a free and fair process, is better. A bidding and election process is good provided the parameters are fixed and held without any bias.”
HOW VOTES PLAYED
3,00,000 sq.ft – Total area of the slum
900 plus – Number of slum dwellers
472 – Slum dwellers eligible to vote
5 – Total developers who contested
330 – Total votes polled
323 – Valid votes
7 – Invalid votes
213 – Shiv Infrastructure
103 – Manav Infrastructure
7 – Others
ET: Godrej Fund Management eyes Gurgaon plot
BENGALURU | MUMBAI: Godrej Fund Management, real estate private equity arm of the Godrej Group, is in talks with Pankaj Munjal-promoted Hero Cycles to buy a four-acre plot along Golf Course Road in Gurgaon for nearly Rs 600 crore, said two people aware of the development.
“Hero has been looking to sell the site and has given up plan for buildings hotels. Godrej Fund is in talks for 60% or may even the full asset,” the persons cited earlier told ET.
In India, high-ticket land parcels are seen in markets like Bengaluru, Gurgaon and Hyderabad, and both builders and funds are looking to acquire them. “Godrej Fund is the front runner in the transaction. Both the parties had signed term sheet and it is under due diligence,” said one of the persons quoted earlier.
Top executives at Hero Cycles and Godrej Properties declined to comment. Hero Group had earlier planned to build a 280-room, 5-star-category hotel in Gurgaon.
TOI: 53,000 construction labourers in Maharashtra, 90% registered: Govt
MUMBAI: As many as 48,488 (91%) of the total 53,270 labourers working on construction sites across the state have been registered under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, the Maharashtra government has told the Supreme Court.
Senior counsel Shekhar Naphade, appearing for the state government, said the number of construction workers does not include schemes approved by the Slum Rehabilitation Authority.
The Supreme Court is hearing a PIL by NGO National Campaign Committee for Central Legislation on Construction Labour which has alleged that the statutory cess levied on real estate firms for the welfare of construction workers was not being utilised properly. In 2012, TOI had reported (Labour dept earns Rs 526 cr cess, doles out just Rs 70,000) how the Maharashtra government had collected Rs 526 crore through the levy of cess on construction projects (1% of the construction cost) on contractors and builders but paid out only Rs 70,000 as compensation. It has paid Rs 5,000 each to the families of 14 labourers who had died.
During the hearing last week, the Supreme Court observed that about 5,000 workers were not registered. “This is an extremely unfortunate situation because due to the non-registration of these workers, they will not get the benefit of the provisions of the Act and on the contrary cess will be collected from the contractor/builders but utilised for a purpose other than the benefit of the construction workers.”
It has directed the government to identify the contractors/builders who have employed these 5,000 construction workers without them being registered and take punitive action against the contractors/builders. It has also directed the SRA to comply with the provisions of the Act ensuring registration of the builders/contractors along with the labourers. “the construction workers are either illiterate or semi-educated, it is unlikely that they will know their rights under the Act. Therefore, the responsibility of registration must squarely lie with the employer/contractor/builder/state of Maharashtra,” states the order. The next date of hearing is October 10.
TOI: ‘GST makes jt development of realty projects unviable’
NEW DELHI: Joint development of a real estate project, including housing, has become unviable due to inclusion of such a practice under the Goods and Services Tax (GST) regime, say developers. Joint Development Agreements (JDAs) now attract GST at the rate of 18%.
According to the new regime, the land owner renders a ‘service’ to the developer via the transfer of development (construction) rights and therefore GST is applicable at the JDA execution stage itself, said a CEO of a real estate firm from Mumbai, whose efforts to enter into agreement with a farmer in Gurgaon fell through. “This increases the cost of a project, making it unviable in the present market scenario,” said the CEO, who declined to be named.
There are two common types of JDAs. One is area-sharing JDA. Under which, the developer pays the land owner a deposit and hands over a certain percentage of the developed area in the project to secure development rights.
Another model is the revenue-sharing JDA, where the developer pays the land owner a deposit and a share of the revenues from the project to secure the development rights.
In the pre-GST era, revenue-sharing JDAs were outside the ambit of service tax and area-sharing JDAs would attract service tax at the time of approvals for the project, once the apartments/units under the land owner’s area share were identified.
But in the new regime, the GST at the rate of 18% on the market value of the deal has to be paid at the time of execution of the deal itself, which in turn results in cash flow concerns for both parties, said Pankaj Goyal, director of Express Builders.
Suppose a developer is constructing 200 apartments under JDA with an agreement that 100 apartments would be given back to the land owner after finishing the construction to compensate for the value of land.
If the cost of each apartment is Rs one crore, the deal size would be treated as of Rs 100 crore and a GST of Rs 18 crore would be levied.
As land costs have increased, JDAs have become a popular and preferred format for real estate development in the country and helped address the need for housing stock in a sustainable manner, said CREDAI chairman Getamber Anand, who is also the CMD of ATS infrastructure.
“The JDA model enables the developer to share market risk with land owner and reduces capital outlay,” he said.
The Afternoon Despatch & Courier: Mumbaikars to be offered 1194 houses in Diwali.
MHADA is planning to sell 1194 affordable houses by way of public lottery before Diwali and the flats will be in the range of Rs 16.40 lakh (Pratiksha Nagar) to Rs 58.16 (Mahavir Nagar), newly appointed MHADA President Uday Samant said.
He said that the tentative list of houses that would be sold by lottery is : Antop Hill (Economically Weaker Section (EWS) 278, Pratiksha Nagar (EWS) 83, Pratiksha Nagar, Sion (EWS) 05, Mankhurd(EWS) 114, Gavhanpada, Mulund (LIG) 269, Pant Nagar, Ghatkopar (MIG)-2,Tagore Nagar, Vikhroli East(MIG)-7, Sahkar Nagar (HIG)-2, Sahkar Nagar (HIG)-2, Siddharth Nagar, Goregaon West(LIG)-24, Mahavir Nagar, Kandivali (MIG)-170 and Badani Bori Chawl, Parel (68).
Besides, 108 commercial galas will also be offered for sale. They are located in New Hindu Mill in Mazgaon, Pratiksha Nagar, Turbhe Mandal in Mankhurd, Swadeshi Mill in Kurla, Tunga Powai, Gavanpada, Majasawadi in Jogeshwari, Shastri Nagar and Siddharth Nagar in Goregaon etc.
About reconstruction of existing MHADA headquarters at Bandra East (Grih Nirman Bhavan) Samant said that the building will be reconstructed at a cost of Rs.850 crore in two phases in next two to three years. The design of the new building will be finalized in next three months.
MHADA is also planning to have own District Schedule of Rates (DSR) instead of depending upon Public Works Department. MHADA has strong force of 300 to 350 engineers who can assist MHADA in this regard, he added.
Meanwhile MHADA is planning to construct 2500 houses in Konkan- Chiplun-1500 houses, Ratnagiri district- 600, Ratnagiri (City)-(slum improvement)-800 houses and Dapoli(in Tourism circuit)-300 houses. Till now not a single house under PMAY has been constructed in Ratnagiri, Samant added.
Live Mint: Realty NBFC Altico to diversify into infra, education.
Altico’s strategy to diversify its portfolio may also be a good way to de-risk its investments, which are heavily dependent on the real estate sector.
Bengaluru: Altico Capital India Ltd, a real estate-focused non-banking financial company (NBFC), plans to diversify into health, education and infrastructure among sectors to achieve its goal of doubling its loan book to $2 billion in the next 18 months.
The company has also elevated former head of HSBC India, Naina Lal Kidwai, who has been an independent director in Altico since 2016, as its chairman.
“…The focus will also to be enhance customer base, add new segments and geographies along with providing varied financial solutions across the spectrum. There is a lot of demand for capital in non-real estate sectors like health and education as well and we are exploring opportunities,” said Sanjay Grewal, chief executive officer, Altico Capital.
Altico is backed by Clearwater Capital Partners LLC, Abu Dhabi Investment Council and Varde Partners Inc.
The company plans to make a deeper presence in the real estate business, and enter real estate-backed segments such as logistics, warehousing, healthcare and hospitality.
It will also expand its presence in real estate projects to Ahmedabad and Kolkata, from the current seven cities. Altico also wants to make inroads into asset-backed businesses such as the infrastructure sector.
“…While healthy liquidity has been the strong backbone of Altico’s performance over the last several years, the endeavour is to keep this momentum growing with further broadening and deepening of lender base. With all of this, we intend to cross $4 billion book size in 3-4 years from now,” Grewal said.
Altico’s strategy to diversify its portfolio may also be a good way to de-risk its investments, which are heavily dependent on the real estate sector.
The NBFC sector has been going through a tumultuous period after Infrastructure Financing & Leasing Services Ltd defaulted on some of its debt obligations. With banks wary of lending to the real estate sector, NBFCs have offered a lifeline to cash-strapped projects and developers in the past few years, with refinancing deals occupying a chunk of the investments made.
Altico expects to deploy $800-900 million every year given the need for capital in the mid-income and affordable housing segments in key markets, Grewal said. The company is also closely evaluating further asset growth and diversification strategies, which may include the potential for commercial real estate funding to complement its residential lending footprint, he said.
Outside the core strategy of financing housing projects, Altico will look to provide structured finance solutions to the capital-starved infrastructure sector and aims to deploy an incremental $150 million steadily over the next 12-18 months in the commercial real estate and infrastructure sectors, said Grewal.
DNA: 14,000 get lucky as CIDCO announces lottery result.
The dream of more than 14,000 commoners came true as CIDCO declared results of the first lucky draw. The computerised lottery system for the mega housing scheme was held on Tuesday. The authority has planned another mega housing lottery of 25,000 homes and the results of this lottery will be announced by the year end.
Of the total 14,838 homes under the CIDCO scheme, 5,262 homes are being built for the economically weaker section (EWS), while the remaining 9,576 homes are being built for the lower income group (LIG) category. The housing projects will come up in 11 locations across five nodes, namely Taloja, Kalamboli, Kharghar, Ghansoli, and Dronagiri in Navi Mumbai.
The EWS applicants are eligible for a subsidy of Rs 2.5 lakh under the Pradhan Mantri Awas Yojana, whereas the LIG applicants are eligible for a subsidy of Rs 2.67 lakh under the CLSS.
EWS category will get flats with a carpet area of 25.81 sqm, while LIG applicants will get flats with a carpet area of 29.82 sqm.
Mayuresh Ganpatye, a journalist by profession, couldn’t contain his happiness. He had been applying for a house since 2010. He even featured once in the wait list of a MHADA lottery, but on Gandhi Jayanti he finally won a house. “I cannot explain my happiness in words how important owning a house is and what it feels like to own a house. I won a house measuring more than 320 sq ft in Kharghar. I will be paying Rs 27 lakh for the house and am happy to finally own it,” he said.
Ashok Khandagle, another winner, had applied for two places; he won a house in Kalamboli in the EWS category. It was the first time that he had applied and he won. There were many who didn’t win; their deposits will be refunded within 15 days. The homes will be handed over to the winners in three batches in by October 2020, December 2020, and March 2021.
Those applying under EWS category paid a deposit of Rs 5,000 and an additional amount of Rs 280 as application fee, while those under LIG category paid a deposit of Rs 25,000 and an additional amount of Rs 280 as application fee.
The Times of India: 2 coastal tunnels to be 20m below Chowpatty, 70m under Malabar Hill.
MUMBAI: The BMC’s coastal road project, work on which will start this month, is expected to get two independent tunnels—one 20-25 metres below south Mumbai’s Girgaum Chowpathy area and the other 70-75m below Malabar Hill.
The 9.9km coastal road will link Marine Drive to the southern end of Bandra-Worli Sea Link (BWSL) and include a 6.8km undersea tunnel, which will run from Marine Lines near Princess Street flyover to Priyadarshini Park.
A civic official said the proposed tunnels would be earthquake-resistant and have a life span of more than 120 years.
The tunnels will have three lanes on either side and will get a coat of reflective paint to ensure adequate lighting. “In case of disaster, 13 cross tunnels would be opened up. Of the 13, seven cross tunnels would be for vehicles and six for human movement. These, though, would only be opened up in times of emergency,” said the official, adding that the two tunnels below Girgaum Chowpatty and Malabar Hill would have a circumference of 11m each.
The civic standing committee cleared the proposal to construct the Rs 12,000 crore coastal road last week. Even as several questions were raised over the escalation of the project cost from Rs 5,000 crore to over Rs 12,000 crore, the administration has assured that there would be no more increase.
DNA: Slum dwellers say they have decided whom to elect.
Slum dwellers, of the three slum pockets located at Andheri RTO, say they have been suffering for a long time and now have decided whom to vote. The slum dwellers are from three slum pockets which include Kasam Nagar, Anna Nagar, and Vitthal Rakhumai. According to slum dwellers the project started in the year 1999, when a builder came ahead to redevelop the slums.
However, in between the project halted and later on the Slum Rehabilitation Authority decided to hold an election of eligible slum dwellers to get a new developer. The election will be held on October 3, and the process includes holding a biometric registration of the present eligible slum dwellers. this will be done between 10 am to 1 pm. Post this the election will be held between 1 to 4 pm and post election the results shall be announced.
On Sunday when this reporter visited the slums, the slum dwellers were sitting under a pandal and were having their lunch. It was apparently a meeting where slum dwellers had come together to decide on whom to vote. Shiv Singh, one of the slum dweller said, “I have been staying here for 35 years now, we are poor people and are troubled too. We have seen a lot, but we have now decided that we need homes instead of the shanties that we are staying in. We have decided whom to vote, but we cannot tell you this.”
Another resident of the slum Nazma Shaikh, says that the slum dwellers have suffered for all these years, had the original developer completed the work they would have now been staying in proper homes. But now they have come all together and are focused on getting a home. They say SRA officials came to them and have explained on how to cast their vote on October 3.
Laxmi Dhotre, who also is a slum dweller says that in spite of October 3, being a working day all the 472 eligible slum dwellers have decided to take a day off to cast their vote as they all need homes. The slum dwellers claim that once the builder is elected they will press for demand of having homes for everyone residing in the slum, there are close to 900 slum dwellers at present says Shiv Singh. One of the slum dwellers said that they have appointed a few people among themselves to take decision on other aspects like rent and transit camps and all this will be decided by them later on.
However, the new developer Manav Infrastructure who has come in also held a meeting hardly 200 meters away from the slums where he was giving out presentations to the slum dwellers. Pramod Parek, from the developers side, said that he had to hold a meeting a little far away from the slums because his people weren’t allowed to meet the slum dwellers to put forth his side. However, at the meeting site of the developer which was in an AC hall, there were slum dwellers who had come to listen to their side.
The election will be held on October 3, and the process includes holding a biometric registration of the present eligible slum dwellers. This will be done between 10 am to 1 pm.
DNA: Mumbai: Redevelopment of slums adversely hit due to real estate slump.
Redevelopment in a city like Mumbai constitutes 75 per cent of the total real estate supply, however, in the past few years, because of the slump in real estate market even redevelopment of slums and old buildings has been impacted adversely.
Pankaj Kapoor, MD, Liases Foras, a real estate research firm, says all markets in real estate are hit, but slowly they are moving now. “The market was hit, but now things have started moving slowly.
Negotiations are taking place but only in places, where the slum dwellers and even the landlords are being reasonable. Only if the demand from them to the builder is rational and in most cases they have become rational seeing the current market scenario negotiations are taking place,” he said.
In a city like Mumbai which is saturated in most places, redevelopment of old buildings and the slums are the only way to create more housing. According to Kapoor, in Mumbai district, 70-75 per cent of the total supply in real estate comes from redevelopment. It could be redevelopment of old buildings or that of slums.
Scarcity of open land is one of the reason in most cases, developers go to any extent to bag a project or get a redevelopment deal. Even the government is hiking the FSI when it comes to redevelopment of old buildings already slum redevelopment has an FSI up to 4 in most cases. All these factors contribute heavily to the demand of developers moving towards redevelopment. A developer said, “If not redevelopment, then where will we be able to find land to construct buildings in Mumbai. From top developers to the new ones every one eyes a slum or an old building and everyone is in redevelopment these days.”
DNA: Gujarat-based developer wants to re-develop Mumbai slums, makes tall promises.
A slum redevelopment project in Andheri’s RTO region is in limelight. The reason behind this is that, slum dwellers on October 3, have to vote one developer out of the six who have participated in the election.
One of the developers, who hails from Gujarat has promised everything that a slum dweller in Mumbai would like to dream of. For example the builder is offering fully furnished homes, an insurance of Rs 5 lakh, deposit of Rs 1 lakh for the marriage of daughters of slum dwellers every year for next 10-years, Rs 1 lakh each every year for the education of the sons of slum dwellers for next 10 years and homes for every slum dweller immaterial whether he’s eligible or non-eligible for a home.
The project comprises of three slums Kasam Nagar, Anna Nagar and Vitthal Rukhmai. This slum is spread over three lakh sq ft and has around 900 slum dwellers, of which 472 slum dwellers are eligible to vote. Slum Rehabilitation Authority (SRA), officials will be holding the election and slum dwellers have been explained the same. There will be ballot papers, the slum dwellers will have to stamp on the one whom they want to elect. The senior SRA official said, “If any developer opts out we will remove the name from the ballot paper and inform the slum dwellers too.” Slum Dwellers say the redevelopment project started way back in 1999 but never took off properly and the builder responsible for the delay was removed and hence the election for new developer.
The Gujarat based developer is Manav Infrastructre, which is part of the Shree Balaji Constructions. They currently have projects in Ahmedabad, Vadodara and Mehsana areas. They have already carried out slum redevelopment in Vadodara and claim that they have constructed 80-lakh sq ft in Gujarat.
On the promises and also the question that such promises doesn’t make appear serious, Pramod Parekh, who heads the strategic alliances of Shree Balaji Constructions said, “Our promises are out in the open for everyone to see, we will give whatever we have promised. All this is an additional expense that we are ready to bear, we are serious developers and hence we are here.”
The total FSI Parekh says available on this plot is 4 and they aim to construct up to 12 lakh sq ft on this plot. According to reports the land cost along with the development potential would put the price in few thousand crore. One of the other developer in the fray is LTR SSM Private Limited, hoarding of which also were seen at the slums. However, a detailed mail sent to L&T Realty got us no response.
This uniquely systematic, collaborative and community-driven reform of learning systems in remote northern India.
The Times of India: Land reserved for JVPD open spaces for free use: Mhada
MUMBAI: Land reserved for public roads and open spaces in Juhu Vile Parle Development (JVPD) Housing Scheme are for use of the general public free of cost. The 14 housing societies, comprising JVPD Scheme, cannot claim ownership rights on these plots, said Milind Mhaiskar, vice-president, Maharashtra Housing and Area Development Authority (Mhada).
In his letter to additional chief secretary (housing) Sanjay Kumar, in July, Mhaiskar said on April 24, 1960, the Bombay Housing Board (BHB), Mhada’s predecessor, had handed over 31 public amenity plots spread over 125 acres and worth over Rs 15,000 crore to the 14 societies and they are holding the same as tenants in common. In 2010, JVPD Scheme had served a purchase notice on the BMC for 12 such plots. But last April, Mhada said it is the owner of the 12 plots, valued at Rs 4,200 crore. Mhaiskar’s letter stated that the 14 societies were misleading the BMC.
“For years, the repair and maintenance of these plots are being carried out by the BMC. Mhada or the societies should have handed over these plots to the BMC without charging anything,” stated the letter. He added that the purchase notice served by the societies on the BMC is not correct because the transfer agreement clearly states they are tenants in common and not owners. However, the societies said the expression “tenants in common” describes the rights between co-owners of a property.
Maloy Bhatt, honorary secretary of the JVPD Scheme Association, said they were not aware of any letter by Mhaiskar to the government. Last year, in response to a legal notice from Mhada to cancel the tenancy of the 14 housing societies on public roads and open spaces, the societies claimed they have been owners of the land for the last 55 years.
Mhaiskar said since JVPD Scheme was approved under the erstwhile BHB Act, 1948, it is necessary to carry out the correction at the government level. “The conveyance is bad in law and the correction deed should withdraw all public utility and amenity plots from Mhada and vest its ownership in the BMC and modify the original agreement. In the meantime, it is important that the government urgently stay the process on the purchase notice issued by the societies,” he said.
In September 14, BMC chief Ajoy Mehta wrote to the housing secretary that in the light of Mhaiskar’s letter, “the government may give directions under the BHB Act to declare the vested ownership of the BMC for all public roads and open spaces in JVPD Scheme”.
Hindustan Times: Maharashtra government approves excluded part of DCPR, experts upset.
FSI hike will benefit only real estate sector, experts say none of their objections were considered in the recently approved document.
The state government on Saturday approved the excluded part of the Development Control and Promotion Regulations (DCPR) and retained controversial provisions that will benefit only the real estate sector, say experts.
In a turnaround from the last DP, which reduced the FSI in a bid to decongest the city, this DP has increased base permissible FSI in the city to 3 and in the suburbs to 2.5. The higher FSI has been linked to the width of the adjoining road, allowing higher FSI for wider roads. FSI refers to the ratio of the total buildable area on a plot to the size of the plot. In land-starved Mumbai, it typically indicates how high a building can be constructed.
“It is evident that none of the suggestions /objections was considered to be included in the final document. It seems that the state government wanted to appease the real estate sector, reducing the open space available,” said Pankaj Joshi, president, Urban Design Research Institute.
The approved DCPR facilitates vertical development and clears a new floor space index (FSI) regime for the city in the range of 2.5 to 5-plus, allowing maximum buildable rights for commercial towers like hotels (5+), followed by redevelopment for residential use under various special categories that include buildings declared unsafe, private buildings older than 30 years, development on ‘no development’ zones, slum redevelopment, cessed buildings and cluster redevelopment. A no-development zone spread across 2,230 hectares has been opened up for affordable housing by the DCPR. While the rules stipulate the area of the houses be small – ranging from 30 square meters to 60 square meters – there is no cap on the pricing, which means the houses may not actually be affordable. Urban planning experts had sought clarity on this provision and it was suggested that the government earmark areas meant for affordable housing.
DNA: NRIs must buy property in rupee.
The Indian rupee has been touching new lows vis-à-vis the US dollar, recently hitting a lifetime low of Rs 72.98 against the dollar. For Non-resident Indian (NRI) investors looking at buying property in India, the depreciating rupee is a positive, as it means more value for money. However, they must keep in mind several factors – legal, geographical, financial, etc.
How a falling rupee helps
The Indian currency started the financial year (April 1, 2018) at Rs 65 to the Greenback and now stands around 72 to the US Dollar, a slide of almost 11% in just six months.
While NRIs have always been key investors in the Indian real estate market, the falling rupee translates into a monetary advantage for them, as they can get more rupees for the dollar. The economics, thus, works in favour of the NRI, who is investing his funds into India.
“For the NRI investor, the ticket size in several Indian markets is still more viable than in global economies,” explained Arvind Nandan, Executive Director, Knight Frank India, about the attractiveness of Indian realty. For example, the median-price for a two or three Bedroom Hall Kitchen (BHK) apartment in a second-tier metro is about Rs 60-lakh (about US$85,000). Even a stronger rupee will mean below US$ 100,000 ticket size. This makes it an attractive proposition.
The rate of return is another attraction. While returns on investment in realty is highly subjective, there are good returns to be had. “Certain locations and projects may appreciate by between 5 and 10% or even more, on the back of lack of supply and huge demand,” said Anuj Puri, Chairman – Anarock Property.
According to Nandan, on a general basis, real estate investment can fetch about 7-8% annual appreciation over a 10-year horizon. Apart from this, residential yields in most Indian markets have been in the range of 2-2.5% per annum. “Thus the overall gross returns can be in the vicinity of 10% annually,” Nandan explained. However, investors must remain conscious of the fact that real estate investment is best done with a seven-to-eight year horizon. While there have been cases of extremely strong capital appreciations in very short time, that is not the usual course.
Even commercial property can offer good returns. “For a preferred and well located commercial property in Gurgaon and Bangalore, the expected annual returns could be in the range of 10%-12%,” said Arvind Hali, MD and CEO, ART Affordable Housing Finance.
“Also, with Indian markets still on a growth path, the future appreciation in property value is perceived to be much better in the longer term,” said Nandan.
In fact, according to Puri, given the current trend of rupee depreciation, it is unlikely that it will strengthen enough to kill NRI investor appetite. says Puri.
Conditions to keep in mind
NRIs with a valid Indian passport can invest in the Indian realty market, though there are few pre-conditions. NRIs with a valid Indian passport need no prior approval, unless they are residents of few neighbouring countries – specifically Pakistan, Bangladesh, Sri Lanka, Iran, Nepal, Bhutan, Afghanistan and China.
An NRI can buy as many properties – residential or commercial – as they want, but are not allowed to buy agricultural land, plantation properties and farmhouses. “However, such properties can be gifted to or inherited by NRIs,” said Puri.
Transactions must be done in Indian rupee, through regular banking channels, via an existing NRI account.
In case of an inherited property, NRIs must provide documentary evidence with regard to inheritance of property and also certificate from chartered accountant in the specified formats.
An NRI can also get a home loan for property purchase on fulfilling normal banking criterion. These include furnishing proof and documents regarding lengths of their overseas stay, their employment and income status, age proofs, etc. The process is relatively simple and can be done online for most part.
Different countries’ residents will have to meet varying eligibility criteria. “Home loan is usually easily available, except for citizens of some select countries,” said Nandan.
Do the due dilligence
Investment into real estate needs a lot of checking and caution. “A major hurdle for an NRI is the relatively less transparent market (as compared to developed economies),” said Nandan.
While several online portals and advisory firms do provide transaction data and supply information, these can often show only a part of the picture. Ground level checking on latest market conditions, transactions, listings, etc, is needed.
“Title insurance is another challenge that NRIs could face, if they have spent time in countries where it is a norm,” Nandan added. With most states now having implemented RERA, several worries regarding false promises, project features, completion dates, etc are getting addressed to some extent.
However, if an NRI takes some precautions then his/her investment into Indian real estate can be secured. One can hire a lawyer to vet property documents, verify the original title deed documents; ensure that the property title is in the name of the seller, do a thorough check to ensure that the seller has cleared all dues related to the property, verify that the seller has not diluted the right to transfer the property to a buyer, ensure that the property is not built on agricultural land without requisite government permissions. “An NRI may get into legal problems in such transactions (agricultural land),” said Puri.
In the case of under-construction property, it is advisable to give a power of attorney to the developer or a trusted associate (please explain why).
BROAD GUIDELINES WHILE BUYING PROPERTY
- Hire a lawyer to vet property documents
- Ensure that the property is not built on agricultural land without requisite government permissions
- In case of under-construction property, give a power of attorney to the developer or a trusted associate
DNA: Maharashtra government boosts redevelopment of Mumbai’s MHADA colonies.
A major boost to redevelop MHADA colonies in the city, has finally surfaced. The redevelopment scheme will affect at least three lakh families. The government, recently, passed amendments in the Development Control Rules 33 (5) because of which the housing authority is expecting to witness faster redevelopment of old, dilapidated colonies.
The consent of residents which was earlier 70 per cent, has been brought down to 51 per cent. This is a big change as less percentage of tenants’ consent means faster redevelopment and restoration.
The second big change is that for colonies that were above 4,000 square metre earlier, the developer would get an FSI of 3 by paying a premium, and plus 1 FSI which was meant for housing stock that was completely handed over to MHADA has been amended too. Now of 1 FSI meant for housing stock the developer will hand over two third housing stock to MHADA and remaining one third to the existing housing societies which means larger homes for tenants and in lieu of which the authority expects tenants will agree faster for redevelopment.
The government earlier this year allowed MHADA to become the planning authority for the 56 colonies of its comprising of 114 layouts and also the homes to constructed under Pradhan Mantri Awas Yojana (PMAY urban). According to MHADA, since the time of appointment, they formed three cells that are active from MHADA building in Bandra, east.
The two other amendments are as follows, an official statement from MHADA says, there are many small colonies of MHADA, which earlier had to keep an open space of 3.6 mts, now it haan been brought down to 3 mts.
The last amendment is that reservation on MHADA colonies can be used adaccommodation reservation now onwards.
Most of the buildings are in dilapidated conditions and need redevelopment, but it was stuck at various levels. Now with the approvals being handed out at MHADA, and with new changes in place, it is expected that the redevelopment will be fast.
MHADA is acquiring the same online process as used by BMC for building approvals so that the approvals are faster and online.
CHANGE FOR BETTER
The consent of residents which was earlier 70 per cent, has been brought down to 51 per cent. This is a big change as less percentage of tenants’ consent means faster redevelopment MHADA is also acquiring the same online process as used by the Brihanmumbai Municipal Corporation for approvals so that the approvals get done faster and without much hassle
The Economic Times: Prestige Estates, Nirmal in talks to jointly develop mall in Mulund.
Bengaluru-based developer Prestige Estates Projects is in talks to enter into a partnership with Mumbai’s Nirmal Lifestyle to jointly develop a 1 million sq ft mall in Mulund suburb of Mumbai, two persons familiar with the development said.
As part of Rs 1,000-crore agreement, Prestige will pay 50% upfront to Nirmal, while the balance amount will be invested in the project that has been a non-starter for the last couple of years.
“The deal is being discussed right now and the numbers may change slightly depending on the final terms being offered and agreed upon. The asset is likely to be valued at around Rs 1,800 crore,” said one of the persons mentioned above.
ET’s separate email queries to both Nirmal and Prestige Estates Projects remained unanswered till the time of going to press. Prestige Estates Projects has been looking to acquire malls across major cities to expand its rental income base. Earlier this month, ET reported that the company is in talks to buy out malls across Pune and Mumbai, which will also mark its foray into these cities.
Earlier this year, Prestige group acquired Singapore-based CapIta-Land’s stake in five mall projects in Hyderabad, Mangaluru, Mysuru and Udaipur. The buyout includes a mall management company operating Oakwood serviced Residences in Bengaluru and under construction properties in Kochi.
The company has 48 million sq ft of upcoming projects across assets classes and holds a land bank of 424 acres with potential developable area of over 42 million sq ft.
Nirmal Lifestyle has been looking to monetize its land parcels on Mulund’s LBS Marg for more than a year. It was keen on a joint development pact as it would help the company get future revenues apart from an upfront payment.
Nirmal has so far entered joint development and development management agreements with Godrej Properties, L&T Realty and Shapoorji Pallonji Real Estate. It has also sold a 3.2 acre land parcel to Piramal Realty for Rs 153 crores.
In late 2016, the Debt Recovery Tribunal (DRT) had directed Nirmal Lifestyle to freeze the sale of its properties and to disclose all movable and immovable assets in response a petition filed by IDBI Trusteeship Services in relation to the company’s dues to Kotak Realty Fund.
The Economic Times: Embassy Office Parks applies for proposed Rs 5,000-crore REIT.
MUMBAI | BENGALURU: Blackstone and Embassy Group’s Real Estate Investment Trust is expected to see over 50% cumulative rise in rental income over the next three years, two persons familiar with the development said. On Monday, Blackstone and Embassy’s joint entity Embassy Office Parks filed papers with the Securities & Exchange Board of India (Sebi) for the proposed over Rs 5,000-crore REIT. This will be India’s maiden REIT issue.
Embassy Office Parks now earns annual lease rentals of over Rs 2,000 crore from tenants including Google, JP Morgan, Microsoft, Cisco, IBM, Wells Fargo and Mercedes Benz. It counts more than 150 tenants, over half of which are Fortune 500 companies.
Embassy Office Parks is listing 33 million sq ft office real estate portfolio under the REIT. Of this, an area of 24 million sq. ft. has been completed and has 95% occupancy. The remainder is under construction.
“Of the 24 million sq ft, over 3 million sq ft office space is coming up for renewal over the next three years in a steady phase. The revised rentals will be commensurate with the current market rates,” said one of the persons mentioned above.
Blackstone and Embassy declined to comment for the story. ET has learnt that the board of directors of the REIT comprises of two representatives of Blackstone and Embassy each apart from four independent directors. The independent directors include Punita Kumar-Sinha, managing partner at Pacific Paradigm Advisors, Ranjan Pai, CEO & MD of Manipal Group, Anuj Puri of ANAROCK Property Consultants and Vivek Mehra, former partner at PwC.
Chris Heady, senior managing director & head of real estate, Blackstone Asia and Tuhin Parikh, senior managing director, real estate at Blackstone India will represent the private equity major on the REIT’s board, while Embassy will be represented by Jitu Virwani and Aditya Virwani.
The REIT portfolio is expected to yield 8% in the third year from listing once the entire portfolio is stabilised while returns are expected to be 13-15%, experts said. The listing is expected to be concluded by the end of this financial year.
“The proposed REIT indicates the Indian real estate is moving closer to maturity and the quality of assets in the first issue is superior. Given the robust demand for commercial spaces and expected rental escalations, the returns are also expected to be good,” said Shishir Baijal, chairman & managing director, Knight Frank India. The REIT, registered in 2017 as Embassy Office Parks, is sponsored by Blackstone and Embassy Property Developments. The lead banker to the issue is Morgan Stanley followed by JP Morgan, Kotak Mahindra and Bank of America Merrill Lynch.
The Times of India: Land scam fallout: DP department chief shunted out.
MUMBAI: Barely a month after being pulled up for poor supervision in the Jogeshwari land scam, Sanjay Darade, chief of BMC’s development plan department, has been transferred to the less significant bridges department. Municipal commissioner Ajoy Mehta on Monday issued orders for his transfer.
The land scam inquiry report had suggested appropriate action against Darade.
The Supreme Court had ruled in favour of the land owner after the BMC did not present its case strongly. The plot is believed to be worth Rs 500 crore and the BMC wanted it for a public amenity. On July 27, the municipal commissioner had ordered an inquiry against the legal and DP department of the BMC for lax handling of the matter after it came to light that the apex court had dismissed the SLP.
Mehta ordered an inquiry against officials working on the case. Deputy commissioner Nidhi Choudhary had conducted the inquiry, which put the onus on civic officials for negligence resulting in BMC losing the prime Jogeshwari plot to a person claiming to be the owner.
As DP chief, Darade also held additional charge of the bridges department. However, following the Gokhale Bridge collapse and Hancock Bridge reconstruction being stuck, the department needed a full-time chief. The DP department, which is a key department in the BMC, directly reports to the civic chief, while the bridges department reports to additional municipal commissioner Vijay Singhal.
The Times of India: Redevpt will be unviable with FSI sops gone: Experts
TNN | Sep 25, 2018, 03.38 AM IST
MUMBAI: Construction industry sources told TOI that withdrawals of FSI incentives in the new DP notification will hamper development in the city. Generally, about 50% of a plot is reserved for Accommodation Reservation (AR) meant for any public amenity like a hospital or a market. For surrendering this portion of the plot, the developer was earlier entitled to receive additional FSI for the total area. The changed AR policy, architects said, will not find any takers.
Industry experts warned redevelopment of housing societies will become unviable. Architect Manoj Daisaria said withdrawal of the AR and Road FSI benefits will severely hamper redevelopment.
Under the new notification, the incentive FSI has been curtailed to the net plot (after surrendering the land required to BMC). For example, on a 10,000 sq m plot, the developer surrenders 5,000 sq m to the BMC for public amenities. With the incentives offered earlier, the builder would have been able to construct over 40,400 sq m on the 5,000 sq m under him. Saturday’s notification will reduce the construction allowed to just 16,685 sq m on the 5,000 sq m portion held by the builder. “The state government’s own AR policy in 2016 had allowed incentive FSI on the gross plot. It is shocking that the urban development department has reduced this on the net plot,” said a senior architect.
Another withdrawal is of construction benefits offered to land-owners/builders whose plots are reserved for widening a public road. The government’s Road TDR policy of November 16, 2016 had offered additional construction rights in the form of FSI to builders when a portion of the plot is surrendered for road-widening. The new notification has withdrawn this.
For instance, an industry expert said, on a 10,000 sq m plot, the builder would have been able to receive extra FSI to build on the 9,000 sq m (after surrendering 1,000 sq m for road-widening). This extra FSI would have permitted him to build around 35,700 sq m on the 9,000 sq m portion. However, now the developer may get to build just 30,000 sq m.
Architects, engineers and town planners are aghast that even after four rounds of corrections over the last three years, the government is unable to correctly publish the Development Control and Promotion Regulations (DCPR).
Members of the Practising Engineers, Architects and Town Planners Association (PEATA) said the government in May 2016 had promised land owners who offered their plots for public amenities extra FSI over and above the permissible limit.
“All this has been rolled back without assigning any reasons and without inviting objections and suggestions,” said Yomesh Rao, an architect. Rao said nearly 70% of plots in Mumbai have reservation for road-widening. “Societies who have to give up land for road setback waiting to carry out redevelopment will be badly hit. The FSI they will now get for the setback area will not ensure them those slightly larger flats on account of the FSI cap,” he added.
Architect Vilas Nagalkar said in the last five decades neither the state nor BMC have come forward to acquire plots on which reservations have been clamped. “In the absence of incentives no landowner will offer his land for reservation nor offer to develop it. The result is Mumbai suffers,” he said. Sources in the BMC said civic officials have already started work on correcting certain clerical errors.
The Economic Times: Home sales pick up as NRIs rush to gain from falling Rupee.
MUMBAI:The rupee’s plunge has led to a pickup in residential real estate as an increasing number of non-resident Indians (NRIs) are rushing to take advantage of lower prices and discounts as the dollar surges in value.
The rupee has dropped 13.04% against the dollar since the beginning of 2018, 6.20% over the past three months and 3.4% in one month, amid a global rout of emerging market currencies. Recent reforms such as implementation of the Real Estate (Regulation & Development) Act, 2016 (RERA), amendments to the Benami Properties Act, the goods and services tax (GST) roll out and demonetisation have also improved transparency in the sector, thereby offering more comfort to the NRI community.
“Depreciating rupee against currencies such as dollar, pound, the UAE dirham, among others is prompting large number of NRIs to invest into the country’s realty market,” said Anarock Property Consultants chairman Anuj Puri. “Builders are also leaving no stone unturned in luring them with a host of amenities and features.” That’s led to a resurgence in serious inquiries by NRI end-users and investors, leading to deals taking place.
This may result in a repeat of the phenomenon witnessed in 2012. The NRI segment usually contributes about a tenth of annual property sales in India but it soared to 25% in 2012 when the rupee depreciated 17.37% between February 3 and July 22 that year. “NRI segment constitutes around 8-10% of annual residential market in India. However, the contribution of this segment sees a spike as and when there is depreciation in rupee value for a sustained period over two-three months, as was the case witnessed in 2012,” said Pankaj Kapoor, MD, Liases Foras Real Estate Rating & Research.
The property markets that typically attract NRI investments are Bengaluru, Chennai, Kochi, Chandigarh and Pune besides premium projects in Mumbai and Ahmedabad.
While the reforms cited above have increased formalisation of the sector over the past two years or so, they also led to a slowdown in home sales, ensuring a buyers’ market.
“For NRIs, the situation is a deja vu of sorts — it is the same as the scenario we witnessed in 2012,” said Niranjan Hiranandani, developer and national president of lobby group National Real Estate Development Council (Naredco). “Home buying is regaining traction, RERA has made it better — and in a situation where property prices at primary level are down by 10 to 15% and the currency valuation adds another 10-15%, it definitely is a scenario where the NRI buyer is back.”
Real estate in India has always been the most preferred investment option for NRIs across the world. Although the new regulatory environment had revived the confidence of home buyers, stalled projects were a key concern for NRI, experts said.
The Indian Express: Mumbai: New Cuffe Parade project comes under us, says MahaRERA.
In case of the New Cuffe Parade project at Wadala, four of the towers were granted part OC for ground to 40th floor by the Mumbai Metropolitan Region Development Authority on June 8, 2017, a month before the RERA came into being.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that it will have jurisdiction over the ‘New Cuffe Parade’ project by the Lodha Group even though parts of the project have received a part occupancy certificate (OC). Setting a precedent for future disputes over part OC, the authority observed last week that it was ‘anomalous to hold that some part of the building is covered by the Real Estate (Regulation and Development) Act (RERA) jurisdiction and other part is exempted’.
In case of the New Cuffe Parade project at Wadala, four of the towers were granted part OC for ground to 40th floor by the Mumbai Metropolitan Region Development Authority on June 8, 2017, a month before the RERA came into being. These flats were, therefore, exempt from being registered with MahaRERA. According to Section 3(2) of the Act, a project is exempt from registration if the promoter has received completion certificate for the project prior to the commencement of the Act.
However, while hearing a case filed by a homebuyer seeking compensation on his investment in a flat in the New Cuffe Parade project, MahaRERA member B D Kapadnis held that a part OC implies that the project was incomplete.
“The part occupancy certificate impliedly demonstrates that the building/project is not completed. It is issued on the basis of part completion certificate given by the private architect, that too on the indemnity of the owner/constructor. Hence, it indicates that the project is not completed as per the sanctioned building plan, layout plan and their specifications. Section 3 (2) of RERA Act exempts the phase/part of the project/building from its registration. However, I find that the other requirements of RERA can be complied with only on completion of the entire project such as handing over the amenities to the society of the allottees, execution of their conveyance in favour of the society etc,” read the interim order on the matter dated September 12.
When contacted, a spokesperson from Lodha Group said: “We intend to file an appeal against the order before the Appellate Authority.”
A homebuyer, who had bought a flat on the 13th floor of one of the four towers, had approached MahaRERA with a complaint that the respondents — Bellissimo Crown Buildmart Ltd, a Lodha Group company — did not show/provide him the copy of occupation certificate. He contended that he was unable to avail loan and pay the entire consideration amount before application of Goods and Services Tax in Maharashtra. He has sought refund of his investment amount of Rs 40 lakh with interest.
Bellissimo, on the other hand, had contended that as the flat in question was not registered with MahaRERA, the authority had no jurisdiction to entertain the complaint.
In the interim order, Kapadnis said the homebuyer’s complaint was maintainable and rejected Bellissimo’s application for dismissing the complaint.
Earlier, a group of 23 customers, who have bought flats at the New Cuffe Parade, filed a writ petition with the Bombay High Court seeking that the ground to 40th floor of the four towers by Lodha Group be brought under the Real Estate (Regulation and Development) Act (RERA).
DNA: Next MHADA lottery to feature cheaper flats.
MHADA The last MHADA auction took place in November 2017
The Maharashtra Housing and Area Development Authority (MHADA) will sell houses it received under housing stock from building developers at prices that are 20 per cent less than ready reckoner rates. This is one of the key proposals mooted by the regulation authority, in order to get rid of the ‘MHADA’ tag attached to unaffordable flats.
In the previous lottery by the Mumbai Board, there were homes which were priced above Rs 1 crore and were returned by the winners. Even people on the waiting list have now returned these homes, thereby forcing MHADA to have a rethink on its pricing policy. It has also called in the former chief engineer of MHADA to help them with the pricing policy. Ready reckoner rates in most cases are below the market rate, which means prices will be lower than the market value too.
MHADA gets housing stock under the development control rule 33 (5), under which its colonies are redeveloped. The homes are given to MHADA in return of the ‘no objection’ clause that it issues to the developer, and MHADA aims to sell them to the buyers via a lottery system. Sanjay Bhagwat, joint chief officer of MHADA’s Mumbai Board said, “There is a proposal in place that flats that we get under housing stock be sold in lottery below the ready reckoner rate. The pricing policy is being decided and this change has been proposed.”
In its previous lottery, MHADA received flak for selling houses way above the Rs 1 crore mark. In November 2017, MHADA had put up 36 houses in Lower Parel for sale, and while two were sold at Rs 1.96 crore, the rest were sold at Rs 1.42 crore each. However, of the 36 lottery winners, 29 willingly gave away their claims to the flats. This meant close to 80 per cent of the lottery winners refused to take home the prizes the won. The reason cited by most of the winners was that the flats were too expensive, and they couldn’t afford to purchase it at the prices quoted. MHADA then offered the same flats to people who were on the waiting list. Bhagwat said even a few of them have to accept the flats. The houses will then be added to future lotteries, he added.
Newly appointed MHADA president Uday Samant had said earlier that technologies be brought in so that prices are reduced, so as to make the homes sold by MHADA more affordable.
DNA: Mumbai’s old buildings likely to get vertical push.
In a bonanza for residents and builders in suburban Mumbai, the state has decided to award extra floor space index (FSI) of approximately 2 for redevelopment of old buildings. The decision comes at a time when political parties are gearing for the 2019 elections and scouting for funds.
The state plans to issue an amended notification for redevelopment of old buildings that are given permission under the Development Control Rule 33 (7). The notification will be applicable for redevelopment of cessed buildings in the island city as well as old buildings in the suburbs. The Opposition is crying hoarse against the BJP alleging that the decision comes with an eye on the polls and will benefit mainly the builders.
Congress leader and former chief minister Prithviraj Chavan said that the government should discuss the proposal with all stakeholders. “BJP is in a hurry to amend policies ahead of the 2019 polls without realising that these policies will have everlasting ramifications. The suburbs are already congested and the traffic is crazy. The additional FSI will burden the existing infrastructure and burgeoning population,”Chavan said. He added that a scientific study should be carried out before announcing this crucial decision.
According to State Housing Minister Prakash Mehta, the prevailing FSI in island city is 1.3, while it is 1 in the suburbs. “Currently, in the island city, a developer directly gets FSI of 3 or more. In the suburbs, a builder has to pay to get additional FSI and transfer of development rights (TDR). This leaves the developer in the suburbs with only 1 FSI as his profit component shrinks,” Mehta explained.
He added that several developers and elected representatives from the suburbs had complained that projects under 33 (7) are not feasible there. “Therefore, they requested us to extend the island city’s 33(7) policy to the suburbs as well,” Mehta said. He said that Chief Minister Devendra Fadnavis had agreed in principle.
Dadar-based architect Milind Samel welcomed the state’s decision to increase the FSI in the suburbs. “It will be a win-win situation for residents of old buildings and developers,” Samel.
Manjul Yagnik, vice-chairperson of Nahar Group said that developers were fighting for long time to get the 33 (7) policy for the suburbs. “With the amended policy, we can go vertical on building plots in the suburbs. If we amalgamate adjoining plots, then more breathing and open space can be created. The amended policy will make redevelopment projects in the suburbs more viable,” Yagnik said.
Another Brick In The Wall
- State plans to amended notification for redevelopment of old buildings in the suburbs under Development Control Rule 33 (7) ahead of the 2019 polls
- Currently, in island city, a developer directly gets FSI of 3 or more
- In suburbs, a builder has to pay to get extra FSI and TDR space
Maharashtra: Rera orders builder to pay interest for delayed possession.
MUMBAI: The Maharashtra Real Estate Regulatory Authority (MahaRera) has directed the developer of a Thane highrise to pay interest to eight flat buyers from the agreed date of possession till the date when the occupation certificate was obtained. The earliest agreed possession date was in December 2016, and latest in December 2017.
The eight complainants had booked flats in a project by Soham Estates called Tropical Lagoon on Ghodbunder Road. They moved MahaRera over the delay in possession and sought interest under Section 18 of the RERA Act till the date of actual possession. Their advocate Tanuj Lodha argued that the agreements were executed and the developer had agreed to hand over possession of flats on different dates between 2016 and 2018. However, he did not do so.
The developer’s advocate, Ajay Mehrul, countered that OC was obtained on August 3, 2018. He said the date of possession was May 31, 2018, and OC was applied for on May 9, 2018. He claimed that the Thane Municipal Corporation was responsible for the delay in getting OC and that there was no intentional delay by the developer to hand over the flats. However, the Authority noted that in the registered agreements the date of possession has been clearly recorded.
“…the respondent (developer) has not clarified as to why the project was delayed and why the possession of respective flats to the eight complainants has not been given,” said member Vijay Satbir Singh, in his September 4 order. He added that the complainants are, therefore, entitled to get relief under Section 18 of RERA Act “from the date of agreed possession in their respective agreements” till August 3, 2018, the date of occupation certificate. MahaRera said interest is to be paid to the complainants at marginal cost of lending rate plus 2% per annum. Sources said this works out to nearly 10.5% (simple interest) per annum for a 2-BHK flat costing approximately Rs 1 crore.
The Hindu Business Line: Low investment interest to keep home prices stagnant.
In the days to come, the prices of residential properties are likely to remain stagnant in most of the markets as there is an increase in the number of end-users investing in the realty sector.
“In Delhi-NCR, around 2-3 lakh units under construction are currently unsold. New units will come up only after these units are sold. So the prices of primary residential property in Delhi-NCR residential markets are not going to escalate for almost a year,” said Parveen Jain, President, Naredco.
According to market experts, though the prices of the property are not going to go down, a slight appreciation is expected in some of the markets. However, in most regions, prices are likely to remain stagnant in the coming months.
“With end-users entering the market, realistic pricing will become the norm with small investors looking at 8-10 per cent annual price appreciation, like in the developed countries,” said Anuj Puri, Chairman Anarock Property Consultants.
“The sector will get institutionalised once the big and professional players will be able to survive and this will also lead to a lot of international players making an entry in the sector,” said Rahul Maroo, Senior Vice-President, Omkar Realtors and Developers.
As per the Anarock data, around 68 per cent property seekers are currently looking to buy a home for self-use while only 32 per cent are looking to buy for investment. Similarly, around 84 per cent buyers prefer to buy property which will be either ready-to-move-in or will be ready within the next six months.
Mumbai Mirror: 118 Backbay buildings have no legal right over land.
Revenue dept finds that no lease agreement was ever signed with the govt since allotment in the 1960s.
A total of 118 buildings in the city’s toniest address — the Backbay reclamation area, extending from Nariman Point and Cuffe Parade to Girgaum Chowpatty — have got no legal right over the land. None of them has signed a lease agreement with the government.
A senior official from the state revenue department said although land was allotted — some as early as the 1960s — to several builders and corporates on payment of a one-time premium, a formal lease agreement was never drawn up. “The agreement was to be drafted by the law and judiciary department, but it did not do so. Revenue officials also did not follow up with the department.”
He said the omission came to light after several applications for sale of office or residential premises in these buildings were placed before the revenue department. Since the buildings stand on government land, a no-objection certificate from the revenue department is mandatory for such sales. “It was when we began examining the documents did we realise that there was no lease agreement for 118 buildings.”
The revenue department has now started issuing notices to the proprietors to sign lease agreements. “There is a problem, however,” said the official. “Many of the original builders are long gone and housing societies have taken over management of the properties. These societies will have to pay the stamp duty for registration of the lease. But with today’s ready reckoner rates, the stamp duty will run into crores of rupees and the societies are not willing to cough up such a massive amount.”
Meanwhile, the district collector’s office has initiated the process of taking possession of 368 properties in the island city whose leases have expired. “The collector issued a notice a few months ago, asking owners of 697 leased properties in the island city to renew their lease in a month,” said the revenue official. “A total of 368 property holders failed to do so.”
The official said another public notice will be issued soon and if the leaseholders do not still do not respond, then the authorities will begin taking back the properties.
Most of the 697 properties were given on a 99-year lease, which began lapsing in the 1990s.
Mumbai Mirror: Poor response hits Prime Minister Narendra Modi’s affordable housing scheme.
State waives deposit for homes for economically poor sections as various fees discouraged applicants; target to build 19 lakh houses by 2022.
Under pressure to achieve the target of building 19 lakh affordable houses by March 31, 2022 under Pradhan Mantri Awas Yojana (PMAY), the Maharashtra government has waived the required security deposit for the economically weaker sections. Sources in the housing department said the response to the scheme so far has been poor, making it difficult for the government to achieve the target. In January this year, the government had approved 79 projects for constructing 2.15 lakh houses under the scheme.
In a notification issued in this regard on Monday, the government said, “The economically weaker sections are required to pay different types of fees under the Beneficiary Led (Individual House) Construction’ (BLC) resulting in low response to the PMAY scheme. Therefore, it has been decided that the security deposit will not be charged for economically weaker sections under the BLC under the PMAY.’’
Under the PMAY scheme, the Centre provides an assistance of Rs 1 lakh-Rs 1.5 lakh while the state contributes Rs 1 lakh. The government allots the land at the rate of one rupee per sq mt while Rs 1,000 is charged as stamp duty.
In the beginning of the year, the state government had given its approval for building 2.15 lakh houses – 1.40 lakh houses for the economically weaker sections, 37,656 houses for the lower income group, 14,766 for the middle income group and 166 houses for the higher income group. These houses will be constructed in Pune, Konkan, Nagpur, Nashik, Amaravati, Solapur, Pimpri, Washim, Barshi (Solarpur), Parbhani, Gadchiroli, Ichalkaranji (Kolkhapur).
As per the data accessed by Mumbai Mirror, the state government in the financial year 2017-18 constructed 55,695 houses under the PMAY. In the current year (2018-19), so far 1,498 houses have been constructed.
An official from the housing department said, “The pace of construction under the PMAY is slow, but the government will achieve its 2022 target. The government has identified various locations for projects under the scheme, and a few proposals are under consideration for approval.’’
With the objective of extending the PMAY to Mumbai too, the state government has offered a floor space index (FSI) of 2.5 under public-private partnership. The developer can construct affordable houses under the PMAY on government as well as private land.
HOW SCHEME FARES
YEAR | HOUSES
2016-17 | 1,69,250
2017-18 | 55,695
2018-19 | 1,498
DNA: Affordability without connectivity means nothing, say hard-hit real estate developers.
The Hindu Business Line: Realtor told to refund ₹8.2 cr to home buyers.
Anti-profiteering body says profit was made by not passing on the benefit of GST
NEW DELHI, SEPTEMBER 19
The National Anti-Profiteering Authority has asked Haryana-based realtor Pyramid Infratech to return a profit of over ₹8.22 crore made by not passing on the benefits of input tax credit (ITC) to nearly 2,500 buyers. The realtor might also be asked to pay a penalty.
The company, however, can challenge the order by filing a writ petition in the high court.
The order made it clear that the realtor will reduce the price to be realised from the buyers of the flats commensurate with the benefit of ITC received. The benefit till date will need to be passed not just to the petitioners, but to all the buyers as they are identifiable.
Commenting on the order, Anita Rastogi, Indirect Tax Partner at PwC, said close monitoring will be done by the Commissioner to ensure that the buyers are refunded along with 18 per cent interest. Directions have been given to levy penalty by issuing showcause notice. “Overall, a ruling will have huge implications on the real estate sector,” she said.
However, Abhishek A Rastogi, Partner at Khaitan & Co, felt while the news is good for home buyers, the moot point is the constitutional validity of Section 171.
“The output tax rate and the input credits are the relevant factors but not the only factors to determine profitability. Lastly, absence of procedural framework raises the question of correctly computing the profiteering,” he said.
The order covers two projects developed by Pyramid Infratech — Urban Homes in Sector 70A and Urban Homes in Sector 86 at Gurugram near Delhi. Over 100 buyers approached the Haryana Screening Committee (contact point for the NAA in a State) with complaints that the realtor was not giving them the benefits of ITC.
After the initial probe, the matter was referred to the Standing Committee on Anti-profiteering which found merit in the complaints and forwarded it to the Director General-Anti-profiteering (DG-AP)) for final investigation. Based on the report by DG-AP and after hearing buyers and the company, the NAA observed that excess ITC was available to the company and it was required to be passed to the buyers.
Live Mint: In cheer for homebuyers, anti-profiteering body asks Pyramid Infratech to pass on GST benefits.
Over 100 home owners, who had bought residential units under the Haryana affordable housing policy in 2013, had approached the NAA alleging that Pyramid Infratech had not passed on the GST benefits to them.
In an order dated 18 September, the authority said that the builder must also pay 18% interest, while dismissing the builder’s argument of escalating prices of inputs.
New Delhi: Homebuyers have a reason to cheer with the national anti-profiteering authority (NAA) directing Pyramid Infratech to pass on the benefits of input tax credit under the goods and services tax (GST) to its customers.
More than 100 home owners, who had bought residential units under the Haryana affordable housing policy in 2013, had approached the authority alleging that Pyramid Infratech had not passed on the benefits of the lower tax rate on construction services to them. The ruling is expected to encourage more homebuyers to lodge complaints against builders who refuse to pass on the benefits.
In an order dated 18 September, the authority said that the builder must also pay 18% interest, while dismissing the builder’s argument of escalating prices of inputs. It also directed the Haryana tax authorities to ensure implementation of the judgement.
“While the news is good for homebuyers, the moot point is the constitutional validity of Section 171 per se. The output tax rate and the input credits are relevant factors, but not the only factors to determine profitability. Lastly, absence of procedural framework raises the question of correctly computing profiteering,” said Abhishek A. Rastogi, partner, Khaitan and Co. Section 171 deals with anti-profiteering provisions that seek to ensure that companies pass on the benefits of lower GST rates to customers.
“This is the first order of NAA against the real estate sector and, that too, an adverse one,” said Pratik Jain, leader, indirect tax practice at PWC India. “While the overall effective tax rate for the sector may not really have reduced under GST, benefit on account of additional input tax credit available needs to be passed on by reducing the base price.”
The Asian Age: MMRDA’s coastal road to connect highway.
Meanwhile, the BMC will soon start the work for Phase 1 (Princess Street to Worli) of the 29.2 km-long highway, which will end at Kandivali.
There would be total eight interchanges at WEH.
Mumbai: In yet another attempt to reduce the congestion at Western Express Highway (WEH), the Mumbai Metr-opolitan Region Develop-ment Authority (MMRDA) is in final stages of approving the alignment of their coastal road, which will have its interchanges at WEH. The coastal road from Versova to Ghodbunder will pass through Marve-Manori areas. According to officials, there would be total eight interchanges at WEH towards the coastal road. Commuters opting to travel towards Churchgate will get a relief after the road is implemented. This would be the second extension from Versova-Bandra sea link project.
“The alignment is in its final stages of approval, we have decided to take the bridge through Manori-Marve areas in order to improve the connectivity. The coastal road will have around eight interchanges to WEH,” said a senior official from MMRDA. He further added, “The geo-technical investigation and preparation of detailed project report (DPR) is in process currently,” added the official.
According to the plan prepared by the authority, the creek bridge will have interchanges at Malad, Marve, Manori-Gorai, Borivali, Uttan-Dongri, Uttan, Bhayander and Ghodbunder etc. “We had seven alternative alignments, we zeroed down to this alignment since it will reduce the vehicular traffic at WEH. Anybody who wants to travel to Churchgate from Virar can use this bridge,” said another official from MMRDA. He further added, “We are 90 per cent sure that the alignment will be approved by the committee, post which the bidding process will begin”. The coastal road will begin where the MSRDC’s Versova-Bandra sea link project will end.
The Asian Age had reported in its April 27 edition that the authority is finalising the alignment for the project. The total cost of the project is Rs 15, 000 crore and is expected to be thrown open for motorists by 2022.
Meanwhile, the BMC will soon start the work for Phase 1 (Princess Street to Worli) of the 29.2 km-long highway, which will end at Kandivali.
The Hindu: New building permits: BMC awaits SC order.
Mumbai Mirror: Sans 30% refund, MREAT rejects builder’s appeal.
Developer had challenged MahaRERA orders; the authority demands minimum deposit before hearing.
The Maharashtra Real Estate Appellate Tribunal (MREAT) has dismissed two appeals fi led by developers after they failed to deposit a minimum 30 per cent refund with the court before their appeal could be heard.
Justice (retd) KU Chandiwal, who presides over MREAT, dismissed an appeal filed by ITMC Developers Pvt Ltd, a part of the Shree Sai Developers group, against a MahaRERA order that directed the company to refund home buyer Radha Arakkal in April this year.
MahaRERA member Bhalchandra Kapadnis had earlier rejected the developers’ reason for delay in possession and held that Arakkal, who had booked a flat in Sapphire 1 project in Kurla, was entitled to Rs 1.42 crore as refund under Real Estate (Regulation and Development) Act (RERA).
ITMC filed an appeal against the order with MREAT, and the court directed it to deposit 50 per cent of the refund amount with the court before the appeal is heard under section 43 (5) of RERA, which mandates that a minimum of 30 per cent amount must be deposited by the appellant. Annoyed by letters from the developer seeking more time, Justice Chandiwal said the developer was giving “lame excuses”. He dismissed the appeal for non-compliance.
Justice Chandiwal also rejected an appeal filed by Marvel Promoters and Developers who appealed against MahaRERA refund orders given to five home buyers in Pune’s Marvel Brisa project for delayed possession. The court has asked the developer to deposit the required minimum amount.
While Marvel is likely to file a second appeal in the Bombay High Court against the dismissal, ITMC Developer’s lawyer Karan Bhosale told Mumbai Mirror, “We will appeal against this order in the high court.”
Hindustan Times: Maharashtra to seek Rs 50,000 crore package for Mumbai’s infrastructure projects.
The Maharashtra government is all set to demand from the 15th Finance Commission a special package worth Rs 50,000 crore for Mumbai’s infrastructure
The Maharashtra government is all set to demand from the 15th Finance Commission a special package worth Rs 50,000 crore for Mumbai’s infrastructure.(HT File Photo)
The Maharashtra government is all set to demand from the 15th Finance Commission a special package worth Rs 50,000 crore for Mumbai’s infrastructure. The commission, headed by chairman NK Singh, is on a three-day visit to the city. The state will also demand Rs 25,000-crore special package for backward regions of Vidarbha and Marathwada.
“People from all over the country come to Mumbai and the country must think about the city’s infrastructure. The same reason will be presented before the commission while raising the demand,” state finance minister Sudhir Mungantiwar said.
The minister reasoned that Mumbai’s contribution to India’s GDP is around 2.5%, while 30.5% of India’s total tax collection comes from the financial capital.
The BJP-led state government has set the ball rolling for 14 big-ticket infra projects such as new Metro corridors and sea links that are worth around Rs 1.40 lakh crore. While most of these projects will be funded with the help of loans from international funding agencies, the state will have to give some funds as viability gap funding for these projects.
For Vidarbha and Marathwada regions, the state finance department has cited poor human development index (HDI) and low per capital income as reasons for seeking the special package. Of the total 19 districts of Vidarbha and Marathwada, the per capita income of 16 districts is below the national average, said an official from finance department.
“The Constitution of India admits that Vidarbha and Marathwada are backward regions, along with two other regions, Kutch and Saurashtra, and are entitled to a special package,” said the finance minister. “Except Nagpur in Vidarbha and Aurangabad in Marathwada, all other districts are backward. We will make our case before the commission with statistics.”
Singh and other members of the commission will meet state officials to discuss several issues such as slow pace of decentralisation, inter-regional disparity, debt sustainability and financial and socio-economic concerns, among others. The commission will also hold consultations with leaders of political parties, representatives of trade and industry and urban local bodies to understand their issues on Tuesday.
DNA: Mumbai: BMC clears 1,293 building proposals in six months.
Following the Supreme Court interim relief on the ban on constructions in the city and the state in March, the Brihanmumbai Municipal Corporation okayed around a 1,000 constructions in the city.
Interestingly, 94 per cent of these buildings or complexes got permission in the first four months after the relaxation. In the last two months, 77 building proposals came to the civic body for preliminary permissions. The BMC is expected to file its reply on Tuesday.
The Bombay High Court banned all new construction work except on redevelopment projects in March 2016, after frequent fires in dumping grounds were reported and the corporations failed to implement proper management system for disposal of construction debris.
When Maharashtra Chamber of Housing Industry (MCHI) challenged the order in the Supreme Court, the BMC submitted a list of 11 sites for dumping construction waste. As soon as the Supreme Court lifted the ban and allowed to give permissions for a window period of six months, builders who waited for two years swarmed to submit their proposals.
In four months alone, the BMC has cleared 1,216 proposals. The number of proposals and construction debris generated filled up five out of 11 sites to full capacity within just two months. However, then the construction industry pitched and offered five more bigger public and private sites where debris could be dumped if the developers paid a hefty premium for their usage.
A senior BMC official told DNA that the Supreme Court gave preliminary permission or Intimation of Dissapproval (IOD) for constructions only if building proposals mentioned proper debris disposal sites.
On Tuesday, the BMC is expected to file a report on various Solid Waste Management (SWM) measures, namely number of permissions awarded, amount of debris generated and sites inspected. The Supreme Court will also consider a monitoring committee report while hearing the case.
DNA: Mumbai: City developers look forward to Supreme Court lifting construction ban.
Construction Picture for representation
City-based developers are expecting relief from the apex court as the civic body prepares to submit debris disposal reports on Tuesday. While developers are looking forward to court lifting the HC stay on new constructions, city planners and environmentalists think the environment impact of the order needs to be considered properly.
The housing sector in Mumbai was hit after the High Court stayed new constructions in the city in 2016. Many in the sector heaved a sigh of relief after the Supreme Court allowed construction for six months early in March this year.
“Construction businesses are already in deep trouble because of GST, RERA, and demonetisation. The ban escalated the issues. The industry currently lacks direction. Such decisions not only affect developers, but also 80 lakh labourers and their families across Maharashtra. He further added that state government is taking efforts for solid waste management and sewage disposal. Hence, we are expecting relief from court,” said Anand Gupta, Chairman, Infrastructure Committee, Builders Association of India.
On the other hand, builders are blaming civic body and the state government for failing to deliver on their duty. They said they shouldn’t have to pay for the failure of civic authorities to manage solid waste.
“The court should fine government officials for not creating space for dumping the debris. Targetting builders is uncalled for,” said a developer.
However, environmentalists in the city are up in arms against releasing any more sites for debris dumping.
“Debris sites are dubious. Builders should send debris to stone mines in Thane and Bhivandi to dump on low lying areas. Over a period of time, the debris could be used for reforestration in the area,” said D Stalin, Director of NGO, Vanashakti.
City planners have a different take on this issue. Pankaj Joshi, executive director, Urban Design Research Institute (UDRI) told DNA that builders are worried about raising the cost of houses. There are more than 2 lakh unsold houses in MMR region and most of them cost more than a crore.
- Environmentalists in the city are up in arms against releasing any more sites for debris dumping.
- They suggest builders should send debris to stone mines in Thane and Bhivandi to dump on low lying areas.
The Economic Times: MR Infra looks to monetise land near Hyderabad airport.
BENGALURU: GMR Infrastructure is looking to monetise land parcels around the Hyderabad international airport, which it owns and operates.
“The company has formed a strategy to develop logistics parks, a commercial centre and a retail hub on the airport city land,” said Aman Kapoor, chief executive of airport land development at GMR Airports.
GMR has 1,400 acres of land around the airport. While the business park is being developed on 800,000 sq ft, the warehouse development will be spread over 3.5 million sq ft and retail will cover 550,000 sq ft.
“The business park is already under development. The next in line is the warehouse hub that will take us two-and-a-half years to develop,” he said. Industry sources said GMR is in talks with several logistics players to form joint ventures for developing the warehouse hub. They include e-Shang Redwood, a developer backed by equity firm Warburg Pincus. Kapoor refused to comment on this topic.
According to Kapoor, the retail hub will be attached to the airport and will be a branded shopping destination for international retail. “This will be the first of its kind in India,” he added.
The Bengaluru-based firm currently has Amazon as one of its big clients on the land near the airport in Hyderabad. GMR’s Hyderabad airport revenue grew 13% in the last fiscal year.
Its revenue from non-aero operations rose 12%. The Hyderabad airport handles 15.2 million travellers annually and is being expanded to accommodate 34 million passengers. GMR is one of the largest infrastructure companies in the country and operates airport in Delhi, Goa and Hyderabad in India. It also has a presence in the Philippines and Greece.
The Times of India: Builders caught in a bind as BMC approvals come to halt.
MUMBAI: Confusion over implementation of the new development control regulations (DCR 2034) has brought construction approvals to a standstill in the BMC’s building proposals department since September 1, according to builders and architects.
Although the civic administration denied it, construction industry sources said junior level engineers are not processing building files because of lack of clarity. From September 1, DCR 2034 replaced the old DCR of 1991. But the rules of the new DCR are yet to be implemented. A senior architect told TOI that 55% of the rules are yet to be framed. This is largely because some of the clauses of DCR 2034 are in Excluded Portion (EP), which are yet to be sanctioned.
Architects who spoke to this newspaper said department officials are unsure which building rules to apply at the moment.
The biggest setback is for builders with half-finished projects, whose work commenced under DCR 1991. “When they go for further permissions to complete their buildings, they are asked to come under the new rules. It is not possible to follow the stipulations of the new 2034 DCR, especially when you have just one or two floors of the building to complete,” said a source in the real estate industry. A developer said it would be difficult to comply with the conditions stipulated in the new DCR at a stage when his building is almost complete.
Another prominent developer said the building proposals department was not even accepting premium payments for construction concessions. “I have to pay Rs 50 crore as premium for my project, but it’s all in limbo,” the developer told TOI.
Sources said the state government should have come up with a transition policy for projects that commenced under the old 1991 DCR and are now stuck due to the new 2034 DCR.
“Since the past two weeks, there’s a total shutdown in the BMC’s building proposals department. Junior level officials do not know what to do,” said a prominent architect.
BMC chief engineer (development plan) Sanjay Darade said he has held meetings with his engineers and given instructions on how to scrutinise the proposals. “There is no issue at all. It is for the builders to submit their proposals,” he said.
Darade said the more stringent of the two DCRs will apply to building proposals in transition. Early this week, the BMC issued a circular that all proposals will now be processed as per the new DCR through the online system.
The BMC initiated the development plan of 2034 and published the draft DP on February 25, 2015. However, since there were a lot of anomalies, it was scrapped by the government. The second draft DP along with DC regulations was published in May 2016 and suggestions and objections were called. The final plan was published on May 8, with some of the clauses added in Excluded Portion (EP), which was not sanctioned and further suggestions and objections were called for.
“Since September 1, there are many Excluded Portions within the new plan. There is chaos in the entire building proposal department and no approval is being granted in the zonal offices, even to developers who have made payment of crores to BMC. All approvals such as IOD, CC, further CC are stuck,” said a developer.
Afternoon Despatch & Courier: BMC worker arrested for ille.gal sale of MHADA flats
The RCF police have arrested three persons including a BMC employee for illegal sale of Mumbai Metropolitan Region Development Authority (MMRDA) flats in MHADA colony at Mahul Village, Chembur with the help of fake documents.
In the first incident, the police arrested a BMC employee (rent supervisor E Ward), Sachin Maske (37), a resident of Thane,who had allegedly been forging documents for MMRDA flats in Mahul village in Chembur. Sachin,with two of his accomplices Suresh Kumar Das (45) and Gopal Sameer Shaikh alias Nazir (41), had cheated at least eight people in the past four years by forging documents while the owners were away on vacation, to the tune of about Rs 44 lakh, said the police.
Sachin Sanap, Sub Inspector Of RCF police station, said, “We arrested accused E-Ward rent supervisor, Sachin Maske (37), and he has been remanded to police custody until September 18, and his accomplices Suresh Kumar Das (45) and Gopal Sameer Shaikh alias Nazir (41), under Section 420, 465, 467, 468, 466, 471, 477, 34 of the IPC. Sachin Mhaske presently works at E ward BMC office but earlier he was posted in M Ward, BMC Office at Chembur.
According to police, after twelve years MMRDA completed 12 thousand flats under Rehabilitation Authority (SRA) project in Mahul village, Chembur, which were handed over to BMC. Two agents Suresh and Nazir had sold eight flats in the MMRDA colony building at Chembur with help from Sachin Maske by procuring forged documents for fake flats. The incident came to light following a BMC inquiry which involved them overseeing all flats.
These elements sell MMRDA flats by obtaining forged documents to dupe innocent flat buyers. When BMC raid such flats, the duped victims lose flats and the loss of considerable sums of money.
Investigation Officer, Assistant Police Commissioner, Bajrang Bansode said, “We have arrested three accused following investigation into this scam, and have also investigated link of BMC employee and agents.”
Mumbai Mirror: MahaRERA rejects plaint citing plot’s agri status.
Complainant says builder continues to advertise the projects in Valvan even though it is yet to be registered with real estate regulator
Maharashtra Real Estate Regulatory Authority (MahaRERA) has rejected a complaint filed by a home buyer against a bungalow project in Lonavla’s Valvan area, which is yet to be registered with the real estate regulator, on the grounds that the builder is yet to convert the plot’s classification into Non-Agricultural (NA) land.
The complainant, Mohammed Zain Khan, said the builders continue to advertise the projects – Valvan Valley and Lion’s Valley – even as it is yet to be registered with the real estate regulator. However, the project’s promoters have claimed that they had sold the complainant agricultural land and had never promised to change the land’s classification.
“In the present case, the subject plots are agricultural land and till date there are no permissions granted by Competent Authority for development of the land by way of NA order or otherwise. Therefore, MahaRERA is of the view that it is not a (real estate) project as defined under Section 2 (zn) and hence cannot be registered under section 3 of RERA,” the order issued by a bench of MahaRERA chairman Gautam Chatterjee and Vijay Satbir Singh, member, MahaRERA, on September 5.
The MahaRERA order also pointed out that under section 4 of RERA, there are mandatory requirements prescribed for registration such as layout plans, sanctioned plan, commencement certificate, specifications of the proposed projects sanctioned by the competent authority and unless these mandatory requirements are fulfilled by the promoter, MahaRERA cannot entertain a registration application from the promoter.
The order said no such permissions have been granted to this land for development and the mandatory requirements under Section 4 have also not been fulfilled and hence MahaRERA cannot register the project.
Khan had filed a writ petition in the Bombay High Court earlier this year against MahaRERA for not acting on his complaint against the promoters of the project. The real estate regulator then promised to make necessary changes to bring the project under its ambit.
Khan had booked a 22,000 sq ft bungalow plot in 2012 and paid Rs 12.5 lakh of the total Rs 55 lakh of the project. While the land was reserved for agricultural use even then, the builders had promised to secure permission to the land under NA soon.
Yusuf Baig and Farhan Khan, two of the three promoters of Valvan Valley and Lion’s Valley projects, contended that they had sold agricultural plots to Khan and had never promised to obtain NA permissions for the land. They said they are yet to even apply for such permission from the state.
The Asian Age: No possession date in deed can’t be an excuse: RERA
The Hindu Business Line: CAI Expo to offer latest and best in construction, architecture, interiors.
The construction industry plays a vital role in the economy, creating investment and job opportunities across various segments. The Centre’s focus in this sector has paved the way for policies that help create world-class infrastructure in India.
The CAI Expo 2018 brings together players from the construction, architecture and interiors sectors. As a popular annual event, CAI (Construction, Architecture & Interior) Expo has carved a niche for itself in this space. It enables participants to showcase their best creations, discover innovative products and services, and exchange ideas in the business of construction, architecture and interior design.
“Perceptions are important in our industry. The 2017 CAI show had a good vibe and we had meaningful conversations with many of our customers. It is a professional event that helps us showcase what we do,” said DB Suresh, Managing Director, Classic Kitchen Pvt Ltd.
CAI 2018 will showcase the latest products and technologies available in the market and provide an opportunity to interact with industry professionals and learn about the latest developments. CAI EXPO 2018 is organised by BusinessLine in association with i ads & events group.
“Being a part of CAI is a good opportunity for us to showcase and promote new products which will benefit both the consumer and clients. It provides a platform to reach end-users on a one-on-one basis,” said Sukumar Srinivas, founder and MD of Shankara Buildpro.
‘The CAI Expo offers an ideal opportunity for any organisation in the construction or building materials industry to gain access to major developers, contractors and clients,” said Mohiyuddin Ashfaq of MAK Plywood Industries Pvt Ltd
Aside from being a great platform to showcase new products to leading architects and builders, the event also helps multiple ideas and concepts to evolve, said K Mohamed Thoufiq Sulthan, Managing Director, Kamai Elevators.
Since debuting in 2013, CAI has grown, attracting a newer and wider range of brands from across industry segments.
For Vijay Bhaskar, Managing Director, PRIME Group of Companies, CAI has been a wonderful platform to reach out to influencers and end-users.
‘We at Credai are extremely happy to be associated with CAI, which helps bring the construction, interior and architecture fraternity together. This event not only brings all the key players together but also provides the added advantage of introducing cutting edge technology and products to foster innovation,” said WS Habib, President of Credai Chennai.
As a B2B event, CAI is an ideal platform for all businesses in the construction, architecture and interior segments. It offers networking opportunities for every segment. “ISLE (Indian Society of Lighting Engineers) is conducting a technical seminar on ‘Lighting for Smart Cities’ in Chennai and Hyderabad during the CAI exhibitions,” said ISLE President Dilip Khumbat.
‘RMCMA (Ready Mixed Concrete Manufacturers’ Association) is happy to be an associate partner for CAI 2018 right from its inception and our relationship continues in strength year after year,” said the association’s President Ravi Shankar.
Published on September 12, 2018
The Indian Express: MahaRERA asks L&T Realty subsidiary to compensate homebuyer.
The regulatory body has directed L&T Parel Project LLP to pay interest on the buyer’s investment for five months.
THE MAHARASHTRA Real Estate Regulatory Authority (RERA) has directed L&T Parel Project LLP — a subsidiary of L&T Realty — to compensate a woman who bought a flat in a south Mumbai project. The regulatory body has directed L&T Parel Project LLP to pay interest on the buyer’s investment for five months.
The woman had booked a flat in the T-4 wing of Crescent Bay project in Parel and was expecting possession by September 30, 2017, with a grace period of six months. She claimed that the respondents, L&T Parel Project LLP and Omkar Realtors, failed to hand over possession of the flat on the agreed date.
In an order dated September 4, the regulatory body noted that the respondents issued a possession letter to the complainant on March 29, 2018, asking her to take possession and clear dues amounting to Rs 15.96 lakh.
The woman, however, refused to take possession on the grounds that the clubhouse was not operational. She also claimed that the water connection was pending. The respondents claimed that they had applied for a permanent water connection but work had been delayed because road-cutting work was underway.
After considering the arguments, the regulatory body ruled that respondents had failed to deliver the possession on the agreed date and the complainant was entitled to get interest on her investment. “The complainant has desire to continue in the project and therefore, she is entitled to get interest on the prescribed rate, which is 2 per cent above SBI’s highest MCLR from April 1, 2018, till she gets possession of the flat,” said RERA member B D Kapadnis, who was hearing the matter.
“The respondents shall pay the complainant interest on her investment, i.e., the consideration amount Rs 4,03,87,720 and TDS amount from April 1, 2018 to August 31, 2018. The complainant shall either deposit or shall pay the balance of clubhouse Rs2,00,000 on completion of it, till then she shall not use the clubhouse. On completion of the clubhouse Rs 4,00,000 deposited by the complainant be paid to the respondents,” read the order.
When contacted, the spokesperson for L&T Realty did not comment on the matter. Omkar Realtors said they handled only the SRA part of the project and did not comment on the matter.
Mumbai Mirror: Standing on ground that’s no longer theirs.
Patra chawl residents gave up their homes in 2010 for redevelopment but the developer allegedly resold the land to seven other developers; MHADA bound by court order to not take coercive action.
60-year-old George Raphael, on the verge of retirement from a printing facility, is really worried about the future of his family. An original tenant from Siddarth Nagar Patra Chawl redevelopment project initiated by MHADA in Goregaon West, Raphael and his family vacated their home in 2010 with 671 others and has been living on rent ever since. Eight years later, all that stands on the plot are half-constructed shells with no sign of completion as the entire project is in limbo due to litigation.
“Eight years ago, when the developer Guruashish Constructions ran the bulldozers over Patra Chawl, the monthly rent given to us was Rs 18,000. Now it is well over Rs 40,000, which I haven’t received since April 2017. It is only because my younger son is employed that we have survived so far,” says Raphael, whose 32-year-old elder son, an MBA employed with a hypermarket, was diagnosed with brain cancer in 2015 and underwent two operations in two years. With the developer refusing to pay the rent, the family has been struggling with the finances.
“They have stopped paying rent to those who raise questions about the project. We can neither go back nor sell the tenement,” says Raphael, who will retire in a few months this year.
After the project construction stopped in 2015 and the rent stopped coming in 2017, the matter reached Chief Minister Devendra Fadnavis. The CM chaired a meeting on May 6, 2017 to resolve the issue. According to the minutes of the meeting, Guruashish promoter Sarang Wadhwan had presented a bar chart and assured that the rehab component would be completed by April 2018. However, the construction never resumed.
The project became a full blown problem in January 2018 when MHADA terminated the joint development agreement signed with the developer and sought possession of the entire 47 acres, alleging that the developer had fraudulently sold the free sale component to seven other developers.
Alarmed by the turn of events, the seven developers rushed to the High Court to seek relief and the HC directed MHADA not to take coercive action, but allowed the housing body to take possession of the land other than those sold to these developers.
Meanwhile, insolvency proceedings were initiated against Guruashish by United Bank of India before the National Company Law Tribunal (NCLT). The Insolvency Resolution Professional wanted the NCLT to restrain MHADA from taking possession of the land but its plea was rejected. Guruashish then moved the National Company Law Appellate Tribunal in Delhi, where its appeal is pending.
Makarand Parab, one of the 113 tenants who have formed the Goregaon Siddarth Nagar Patra Chawl Sangharsh Samiti, blames the mess on tenants’ society Goregaon Siddarth Nagar Sahakari Grihnirman Sanstha Maryadit and its managing committee for allegedly playing ball with the developer. “The committee headed by Shivram Shinde should have demanded a corpus fund of Rs 25 crore and bank guarantee to protect the interests of the tenants.”
When contacted, Shinde denied the allegations and said, “We settled for Rs 25 lakh which has grown to Rs 50 lakh in FDs.”
Asked to respond to MHADA’s allegations, Sarang Wadhwan of Guruashish Constructions said “We cannot comment on this right now as the matter is sub-judice.”
Highrises by other developers have gone up to 30 floors, but the Patra chawl rehab project is incomplete
Mumbai Mirror: 8 years on, RCF to finally reap benefits; can sell land rights.
In a big boost to the Central government-controlled Rashtriya Chemicals and Fertilizers (RCF), the public sector undertaking can now sell the Transfer of Development Rights (TDR) that it got from the Mumbai Metropolitan Regional Development Authority (MMRDA and the BMC. The RCF had given up massive tracts of land for construction of the Eastern Freeway by the MMRDA and for road-widening projects in the area by the BMC.
The Union cabinet on Tuesday permitted the RCF to avail a construction bonanza as compensation. The move comes at a time when the public sector enterprise has initiated plans to unlock the value of its real estate assets in the financial capital. In 2010, RCF transferred 5.26 lakh square feet land it owned in the eastern suburbs to the MMRDA for construction of the Eastern Freeway.
While convention at the time was that land transfer between two government agencies took place free of cost, the MMRDA, which was keen to complete the road work in time, entered into a written arrangement with the RCF on a suitable compensation. However, no compensation was provided at that time. Eight years later, RCF cited the new state government provisions to demand as compensation 10.52 lakh square feet, or twice the land area surrendered, in transferable development rights. TDR is a floating floor space index that can be utilised elsewhere or traded.
In June this year, Chief Minister Devendra Fadnavis cleared a proposal permitting the RCF to avail this TDR, which can either be utilised by RCF on its own for construction activity or monetised through sale. Following the Chief Minister’s go-ahead, the state’s Urban Development (UD) department wrote to the Ministry of Chemicals and Fertilisers conveying that the PSU can avail the TDR.
The Union cabinet gave post facto approvals to the transfer of land to the MMRDA and the BMC and selling of the TDR that the RCF got in return for its land.
“The RCF received TDR certificate of 16530 sq mtrs in November 2017 issued by MMRDA against 8,265 sq m of land as an interim relief. The claim of RCF for TDR against more land of around 40,584.74 sq m is being decided by an arbitrator,” said a senior government official.
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“RCF was asking the BMC to delete the internal roads of RCF colony from their Development Plan (DP) for a long time. Subsequently, RCF agreed to hand over about 16,000 sq m of land for construction of roads in lieu of TDR as compensation. In its DP the BMC has shown reservation of 331.96 sq m of RCF land in front of the proposed township of RCF for public road widening. As per development control rules 1991, in case of reservation on the land it is mandatory to surrender the land, as road set back area to the BMC. So the land will be hand over and TDR benefit will be availed in return,” the official added.
BMC officials said that the RCF has also demanded TDR worth another 3.52 lakh square feet in lieu of land surrendered to the BMC for r