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.

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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.

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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

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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.

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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.

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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.

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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.

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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.

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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

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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
EWS: 283
LIG :500
MIG: 216
HIG: 2
Carried forward from previous lotteries: 136

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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.

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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.

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Builders are keeping their fingers crossed since 2018 is the first year after two years of disruptions — demonetisation and RERA and GST.

X

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.

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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.

Redevelopment

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.

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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.

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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.

NEW ORDER

• 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.

ALSO READ: Triggered by ILFS default, NBFC crisis may delay real estate’s recovery

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.”

ALSO READ: New NBFCs set up realty verticals to tap demand for credit from developers 

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.”
ALSO READ: SuperTech default risk adds to HFCs’ woes amid liquidity tightening worries 

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.

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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.

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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.

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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

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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.

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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.

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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.

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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.

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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.

COSTING TONNES

• 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.

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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.

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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.”

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

Mahul Miseries

• 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

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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.

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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.”

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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.

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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.

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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.

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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.

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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.

Save GST

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.

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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

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The 15-acre land parcel, acquired from Skyline Mansions & PE fund promoted by Anand Jain, has development potential of 2 m sq ft

Mumbai

: 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.

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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.

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