REAL ESTATE INDEX
 

 

Indian realtors ready for foreign ‘invasion’

With global players eyeing the Indian realty market, only professionally managed real estate firms will be able to face the competition, asserts
S. Satyanarayanan

Due to consistent economic growth since the past few years, the real estate sector in India is booming. Year 2006 started on a promising note for the real estate sector in India when the government opened the construction and development sector in February 2006, and allowed 100 per cent foreign direct investment (FDI) under the ‘automatic route’ in order to spur investment in the vital infrastructure sector.

The relaxation of the FDI ceiling has resulted in several big global real-estate developers eyeing India for investment in a big way.

This trend in the real estate in India is all set to throw up competition between Indian and overseas player.

Industry insiders and experts feel that while professionally-run Indian realty firms will be able to compete effectively or become equal partners with multi-nationals, unprofessionally-run organisations would definitely feel the heat and could well be out of business.

Another scenario that could unveil is that smaller players in India will either have to join hands together to exist in the metros and look for opportunities in hitherto unexplored small cities and towns for their survival.

However, they said that initially there would be more joint-venture (JV) formations than direct inroad of foreign players as they were expected to take their own time to understand the land acquisition rules and other legalities involved in the real estate in India.

“In the near future, there will be more JV formations as the foreign players are wary of Indian land acquisition rules, other legalities involved and also multiplicity of authorities,” Assocham secretary-general D S Rawat told The Tribune.

“So, only professionally-run companies having considerable experience would be able to enter into JVs with overseas players. This itself will stir competition in the real estate industry in India,” he said.

He also felt that most of the JVs would be on a 50:50 basis, with both Indian and foreign companies holding equal equity as the returns were quite high in the realty sector.

Mr Rawat said that while professionally-run real estate companies in India, if they maintained their credibility and were able to mop up huge capital requirement for mega projects, would be able to take on the competition from overseas.

“There are all sorts of companies. There are those who are not professionally managed and they are definitely not ready while those companies who have got their systems in places, have a good reputation in the market, are strong enough to face any competition - Indian or foreign,” said Mr Amol Arora, executive director of Emgreen Projects Limited.

There would be upheavals as these foreign players enter the industry. Initially more JVs were expected as Indian property buying and the associated legal system was very cumbersome. Once foreign players got a hold on things there would be more direct entries. In addition, as property-buying laws became more transparent it would make the market more attractive for direct entries of foreign players, he said.

The returns appeared attractive, but “the risk was still difficult to measure,” on account of lack of transparency. This was one factor where the Indian real estate sector ranked very low with Transparency International rating India at 88 out of 150 countries with regard to perceived corruption level, he said

This competition would drive real estate firms to attain a corporate structure while taking up the best of international business practices and also ensuring that basic Indian cultural values were adhered to, Mr Arora said.

“In my opinion in the initial years primarily most of the FDI that comes in will be through joint venture. And then it will pan out and people would have more foreign investors and more confidence to their get own way,” Mr Arora said.

The smaller players, who would not be able to withstand competition, would exit the market while those who were quick on their feet or those who found their own niche and have the expertise, would definitely survive and prosper, he said.

Foreign players would definitely not restrict themselves to any segment. They would come loaded with lots of experience, exposure and money and would try their hand in all segments based on which segment would offer a good return.

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REAL TALK
'Tier II, Tier III cities to drive realty growth’
Pradeep Sharma

The future in the real estate  sector belongs to the Tier II and Tier III towns with population up to 1 million as they are going to drive the growth in this sector in the next three to five years, feels Mr S.K. Jain, Managing Director of the real estate marketing network — jaaydaad.com.

The rising property prices in metros, dearth of skilled and cost-effective manpower, comparatively high-cost of living and high operational costs would drive the technology-sound companies towards these cities, including Mohali and Chandigarh. Even Ernst & Young has forecast that these towns will emerge as the most promising market for residential and retail developments in the years to come, Mr Jain said in an interaction with The Tribune recently.

Mr Jain, who was in Chandigarh to announce the launch of the three-day first Jaaydaad Expo-cum-Sale World Tour 2006-07, beginning at New Delhi from December 15, said that the exposition would also be organised in 17 other Indian cities, including Chandigarh and  Ludhiana. Post this, the exposition will travel to 12 global destinations, including Dubai, London, Washington DC, New York, Singapore, Australia, New Zealand, China, Germany, South Africa, Mauritius and Canada.

Turning back to region, Mr Jain said: “The trend has already started to some extent. Modern Mohali is already the home to many multinational corporations like the Godrej Group, Infosys and Ranbaxy among others.  In fact, Mohali is fast emerging as the second best option, after Chandigarh, for employees, landlords of Punjab and even NRIs to invest in property.”

Mr Jain said in the next few years, bigger regional developers would aggressively expand and diversify their operations across the country, while city-focused developers would venture into new cities.

Explaining the concept of jaaydaad.com, Mr Jain said through the portal the company aimed to create the largest real estate marketing network in India. Currently, the marketing space in real estate sector was completely unorganised. There were no organised players or brands in this segment. Through jaaydaad.com the company’s aim is to create India’s first organised and branded network in real estate marketing space. 

Through its various online & offline products,  the company aims to connect all stake holders, including developers, investors, buyers, and sellers of the real estate market and offer quality & reliability in services, which is completely missing at present, the realtor said.

Unveiling the expansion plans, he said the company was planning to open a nationwide chain of property showrooms by the name of ‘jaaydaad.com. The Property Showroom’. It’s a unique concept wherein property owners and buyers could buy, sell or rent properties instantly from these shops. As many as 600 property shops across the country in next 2 years with an investment of Rs 120 crore were being planned. The company would set up around 17 such property showrooms Chandigarh & Punjab alone, he added.

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GMADA: Old wine in new bottle
Chitleen K Sethi

The course of state-driven urban development has changed forever. Since it has virtually become impossible for government agencies to acquire land for various development works, including to meet the housing needs, the consumer is now left with no choice but to approach private promoters and builders for their housing needs. Also those developing land are buying it directly from the owners.

The state agencies have been relegated to playing the role of facilitators and hopefully regulators of private developers all of whom might not have the good of the consumer in mind.


A map of the newly-carved SAS Nagar district.

In such a situation it is surprising that the government, instead of consolidating the functioning of its already existing urban development agencies, which now have a limited role to play in urban growth, is creating new authorities overburdening the exchequer amounting to the proverbial filling of old wine in new bottles.

On August 14, 2006, Greater Mohali Area Development Authority (GMADA) was created under Section 29 (1) of the Punjab Regional Town Planning and Development Act 1995 to facilitate, coordinate and plan the urban growth of 1350 sq km of area, including the entire area that falls under the jurisdiction of the newly-carved district of SAS Nagar. Other than Mohali, townships like Kurali, Kharar, Banur, Dera Bassi, which are seeing urban growth at an unprecedented rate, are now under the jurisdiction of this authority. The GMADA’s aim, of course, is to streamline this growth and regulate it.

However, instead of planning afresh for areas that are still in the transitional phase of becoming urban from rural, GMADA has taken the easy way out. It has simply taken over the entire work of Punjab Urban Planning and Development Authority (PUDA), Mohali zone (and its staff), the entire estate falling under the zone and started doing what the PUDA had been doing already.

Also since the whole estate now stands transferred to GMADA most of the long-term development plans made for the area by PUDA have come to a naught. Now till GMADA comes up with a comprehensive blueprint for the development of the area nothing much can be expected to happen in the area.

The minutes of a meeting held by the Chief Administrator, GMADA, in October 2006 had listed a host of development works that the brand new authority wished to undertake or had already undertaken. These included road-repair work, up-gradation and strengthening of current roads, widening of roads, removal of jhuggis from near Quark, setting up of GMADA complaint kiosks, providing cycle-tracks around Sectors 54, 59 60 and 61 and follow up of the work on the sewerage treatment plant, and providing canal water supply from Kajauli water works. The minutes of the meeting also pointed out that all works were being reviewed regularly, time-frames had been fixed and bottlenecks had been removed etc 

In its existence of four months, the authority has not undertaken any work that was already not falling under the purview of the PUDA’s Mohali zone. The works, which ‘brand-new’ GMADA has undertaken, are the annual routine repair and development works which PUDA’s Mohali zone undertook routinely. If PUDA’s routine has to be reproduced every year what was the point in creating GMADA?

Interestingly the original authors and advocates of GMADA had not envisaged GMADA’s role as an authority to replace PUDA’s Mohali zone. According to the original plan Mohali zone in PUDA will continue to over-see the development of Mohali till Sector 90 beyond which the fresh development will be under GMADA’s purview.

Following the creation of GMADA a letter written to the government by the Chief Administrator, PUDA, had also pointed out this strange situation stating that instead of GMADA replacing PUDA’s Mohali zone and taking over its estate it should have its own areas like had been done in the case of the Noida Development Authority. But the letter obviously fell on deaf ears and now GMADA is merely a change in nomenclature of PUDA’s Mohali zone.

And while it came to planning for the future, one of the first things the government did was to send a team of officials, including those from GMADA, to Singapore and shortlist a firm from there to plan Greater Mohali here.

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Eco-friendly homes on rise in Bangalore
Jangveer Singh

A well used for rain water harvesting.
A well used for rain water harvesting. — Photo by the writer

Amidst the high pollution levels which are the bane of living in any metro city, Bangalore offers a ray of hope to people who want to stay in environment-friendly homes. A small number of builders are offering eco-homes to people who care for the environment and want to live in eco-friendly homes.

Vinay Nair, who has just shifted into an environment-friendly home, built by Bio-diversity Conservation India Limited (BCIL) at Varthur near Whitefield, says he made the choice because of his children. Talking to the Tribune, Vinay says, “I was afraid that how would I be able to face my children if they asked me about my contribution in checking environment pollution. Living in an environment-friendly home seemed the right answer,” he adds.

Like Vinay there are a small but growing number of people who are choosing eco homes in Bangalore. BCIL has built three complexes in the city and is in the process of developing two more. Similarly the Total Environment group is also offering eco- homes in the city to the discerning few.

Eco homes are slightly costlier than the traditional brick and mortar ones. They also do not have a bright appearance as they are not given any paint coating on the exterior and very little in the interiors as well. However, they do pay in the long run, ensuring savings on electricity and water and giving its residents the satisfaction of bringing up a family in harmony with nature.

A visit to BCIL complex at Varthur which is known at T Zed homes makes one realise how different they are from conventional ones. The homes use laterite stones on the exterior walls and sun-dried solid composite bricks for the interiors instead of conventional burnt bricks. Wells situated in the five acre complex are quite intriguing. some of these wells are decorated while others are covered.

Amit Chauhan of BCIL said there were 42 wells in the complex which had been built with the express intention of retaining and conserving water. As much as four million liters water is harvested from all roof tops and 12 million liters from the green areas around the buildings. The complex has not even taken a municipal connection and is meeting the water requirement of the whole complex through rain water harvesting alone.

T Zed homes also recycle waste through the vermin compost method and cut on electricity costs by going in for centralised refrigeration and air conditioning facilities. The air conditioners in individual units have only fans with a central compressor providing the chilling. The refrigerators are CFC-free and cut down energy costs by as much as 40 per cent. The project also has solar water heaters and built-in energy efficient lights, central laundromat, detergent-free dishwashers, which are built into the kitchen sink and intelligent electric switch controls. All these measures reduce electricity bills significantly.

Like BCIL, the Total Environment group also believes in simple but efficient methods to harmonise homes with nature. The company, which is marketing two properties at Whitefield and on the Kanakapura road presently and has built few more already in the city, uses 90 per cent natural materials while constructing its homes.

Explaining the concept, Abby Abraham from of the company said the accent was on the use of wire-cut bricks, wood and glass. It uses minimum of steel and does not use ceramic tiles at all.

Total Environment, like BCIL, tries to bring greenery into the house by going in for terrace gardens. Large balconies with sunken slabs are filled with cultured soi,l which is separated from the roof by use of charcoal cinders and a layer of nylon. A sprinkler system is installed along with fixed timers to install a green garden without any bother. With sufficient greenery, light and air assured under one roof.

With rising pollution levels everywhere an eco home is a concept which has a great need as well as future in India.

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HUDA to tee off into prohibited zone

HUDA has decided to set up a golf club and recreational centre in the prohibited zone around the Defence Ammunition Depot in Gurgaon, says
Ravi S. Singh

Haryana Urban Development Authority (HUDA) and the Town and Country Planning Department have decided to set up a world-class golf club and recreational centre in the prohibited zone around the Defence Ammunition Depot here on a directive by the Haryana Government

This would go long way in stopping one of the largest encroachments in this area here. The golf project is expected to boost up the real estate prices as well as the scenic value and the overall ambience of the adjoining areas.


Encroachments have come up in the 900-sq yard area around the Defence Depot in Gurgaon, which is a prohibited zone.
Encroachments have come up in the 900-sq yard area around the Defence Depot in Gurgaon, which is a prohibited zone.

The move would serve as an effective deterrence against “land laundering” and earning through sub-rosa deals in the prohibited zone by land mafia.

Thousands of acres of land girdling the depot in the 900 sq yard area around it is a prohibited zone. No permanent structures can be set up in the zone. The prohibition is on account of the standing Defence laws.

The primacy of the area in terms of money, cultural and social values could be fathomed from the fact that the posh stretches of DLF City on the trans-national highway (Delhi-Jaipur) are passing near it and the much sought after HUDA Sectors 18 and 14 are in its vicinity. The area has good road connectivity with IFFCO Chowk (Sukhrali bypass) near it. With the expansion of the highway underway and the proposed extension of Delhi Metro to IFFCO Chowk, the area has assumed added value.

On account of its strategic locale and high-end land value, large-scale encroachments have been taking place over the years, right under the nose of the district administration, the police, HUDA and the Town and Country Department.

Thousand of illegal constructions, both residential and commercial, have come up in the area. Illegal colonies, dhabas, marble shops doing retail and trading business and hotels and offices of realtors dot the prohibited zone. The area can be good case study on the unholy nexus between the politicians, land sharks and officialdom.

Though the zone has been categorized into prohibited zone on account of the sensitivity of the area, including the security of the nation, as well as to avert mishap to the civilians on account of possible accidents in the depot, as there may be heaps of explosives and ammunitions lying in it.

The cumulative effect of it all was the haphazard growth in this part of the city having a bearing on the value of real estate. While ugly developments instilled uneasiness among the residents on one hand, they also acted as an eye sore to the overall ambience.

The Administrator, HUDA, Gurgaon Circle, Mr S.P.Gupta, said that his office has sent a proposal to the headquarters for acquisition of about 1,800 acres of land in the prohibited zone. However, according to him, the proposed golf course and the recreation centre could be set up on about 600 acres of land, which is presently free from encroachments. This stretch of 600 acres of land is the one in which several marriage parties are being hosted. The land runs parallel to Mata road.

According to Mr Gupta acquisition proceedings have already been initiated. There is only one hitch though to set up the project. The Defence establishment has to agree with it as the project would be right in the prohibited zone. However, Mr Gupta said that already the government was in touch with the Defence department and the project would get the nod from the quarters concerned. It is win-win situation, and would prevent further encroachments in the area.

The project would add long to zing and glamour to the area as a good number of Koreans and Japanese nationals come from their countries on week-ends to play golf in far off courses in the city. This site is near to the International Airport. To boot the city would have one more golf course to the already five existing. Also, the proposed 150 meter wide new road connecting Palam Vihar in Gurgaon and Dwarka in Delhi would present added attraction to the project for people from the national capital.

The estimated cost of the project, as well as the details of the construction parts, has yet not been determined.

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TAX tips
RBI nod must for NRIs under FEMA for sale/transfer of agri land
by S.C. Vasudeva

Q. I and my husband are NRIs settled in USA. We had purchased agricultural land near Kandala village which falls under Dharamagarh village in erstwhile Ropar district. This is very close to Jagatpura near Sectors 48. The 10-marla agricultural land, within 16 km periphery of Punjab and UT, was bought on 19.04.1999. Can we legally hold the land? If not, then why not? What remedial action can be taken on our part if we can’t hold the land?

S.S. Bedi

A. The land was purchased by you on 19.04.1999 and thereby the said transaction would be covered under the erstwhile Foreign Exchange Regulation Act, 1973 (FERA). However FERA has now been repealed and a new law namely the Foreign Exchange Management Regulation Act, 1999, is in place. As per the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000, a person resident outside India, who is a citizen of India and a person of Indian origin resident outside India, are not permitted to transfer any agricultural or plantation property without the permission of the Reserve Bank of India (RBI). Therefore you should intimate the RBI regarding the purchase of the said property in contravention of FERA and request for a condonation of the same. Further you should seek permission of the RBI under FEMA in case you would like to now sell/transfer the said property.

Interest on CG bonds taxable

Q. I had sold one plot within the municipal limits in 2003 which was purchased in 1981. The long term capital gains earned on this transaction was invested in Nabard’s capital gains bonds within 6 months and the same was also shown in the income tax return. However, the interest accrued on these capital gains bonds annually has not been taken in my annual income tax return.

Kindly advise me whether the interest accrued annually on these bonds is taxable or not. If yes, can I include this interest income in my current year Income-tax return.

Subhash K. Garg, Sangrur, Punjab

A. The interest accrued on Capital Gains Tax Saving Bonds is taxable and it has to be included in the income-tax return as part of your income. In case you have not included the same in the preceding year, it would be advisable to revise your return for the preceding year so as to rectify the error.

Land purchase instalments not covered U/S 80-C

Q. I am Haryana Government employee. I had been allotted a plot by HUDA (Haryana Urban Development Authority) in a draw in March, 2006. I got the earnest money financed in October 2005 from PNB.

On receipt of allotment letter, I returned the earnest money to the bank along with the interest accrued thereon and in addition to this (Rs 90,000) i.e. 15 per cent of the total cost was paid to HUDA in June 2006. The balance cost is to be paid in six equal yearly installments.

“My question is whether 15 per cent amount of total cost i.e. Rs 90,000 paid to HUDA during June 2006 and later on six equal yearly installment to be paid to HUDA (on which interest shall be charged after offering me the possession of the plot) is to be counted as saving rebate for the purpose of tax saving”

ABC, Yamuna Nagar

A. Section 80-C of the Income Tax Act 1961 (the Act), provides that in computing the total income of an assessee, being an individual or an HUF, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of various sums referred to the said section as does not exceeds Rs 1 lakh. One of the items covered in the aforesaid section is a payment for the purposes of purchase or construction of a residential house property, the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own resident, have been chargeable to tax under that head), where such payments are made towards or by way of -

* any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

* an instalment or part payment of the amount due to any company or cooperative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

* repayment of the amount borrowed by the assessee from various specified authorities.

Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee.

It would thus be observed from the above, that payments or instalments paid for purchase of land are not covered for the deduction allowable under Section 80-C of the Act. Therefore in my opinion you would not be entitled to such deduction.

CG tax on sale of agri land

Q. My father had gifted me 2 acres of agricultural land in December 2005, through a gift-deed registered in the office of sub-registrar. This land falls within 8 km of municipal limits. This is our ancestral property and my father had inherited this property from my grandfather in 1995. My grandfather had inherited this property from his father in 1970. I am thinking of selling this property and purchasing a plot at Bathinda. I hope to get about Rs 12,00,000 from the sale of this land. Will this sale and purchase involve the levy of any capital gains tax? If yes, how much? Is there any way out to escape from the payment of Capital Gains Tax?”

G.S. Dhillon, Fazilka

A. The agricultural land gifted to you by your father is in the nature of ‘capital asset’ or not will have to be decided with reference to the notification issued by the government in this regard. The reason for this proposition is that the distance of 8 km is the maximum distance specified by the relevant section defining the term capital asset and therefore one will have to look up the notification issued by the Government of India to ascertain whether agricultural land situated in a village or town which is covered within the distance specified in the notification. Since the details of the situation of agricultural land are not given in the query, I am unable to give a definite reply to your query. However, presuming that the land is so covered in the definition of the term, ‘capital asset’ it will be a long term capital asset and the gain arising on the sale of such land would be eligible for Capital Gains Tax. The Capital Gains Tax will have to be computed after taking into account the fair market value as on 01.04.1981to which would be applied the cost inflation index as notified by the government so as to arrive at the cost as on the date of sale. Such cost will be deductible from the sale price of Rs 12 lakh. The excess of the sale price over such cost will be capital gains taxable @ 20 per cent plus education cess of 2 per cent on the tax so computed. In case the capital gain is more than Rs 10 lakh, a surcharge of 10 per cent will also be chargeable on the tax so computed. You can save the capital gains tax by utilising the capital gains in the acquisition of a residential house property within two years of the date of sale or constructing a residential house property within three years of the date of sale.

IT calculation on goodwill amount

Q. Please advise me on income tax liability on goodwill amount of rented shop.

I am a senior citizen. I got a shop on rent on 10.02.1990 about 16 years 5 months and 12 days back. I vacated the rented shop on 21.07.2006, after getting goodwill amount of Rs 5 lakh from the owner through bank draft. I have no other income.

What is the tax liability and how to calculate it?

Is there any way to evade this tax by purchasing some certificates (bonds) etc?

Is there any time limit to give the tax or to purchase bonds etc.

Can I give tax on some amount and purchase bonds etc. of balance amount.

Surjit Kaur, Jalandhar City

A. The amount received for vacating the shop would be taxable as long-term capital gains. No deduction is allowable against the receipt as the cost of the capital asset is deemed to be NIL in accordance with the provisions of Section 55(2) of the Act. The tax would be payable @ 20 per cent of the capital gains plus education cess of 2 per cent on such tax. The capital gains tax can be saved by investing the same in the acquisition of a residential house property within two years of the date of vacating the shop or constructing a residential house property within three years of the aforesaid date.

The capital gains tax saving bonds have already been oversubscribed and the specified institutions have stopped taking further subscription. Therefore, the only way to save capital gains tax is to invest the same in the acquisition or construction of a residential house property within the period specified hereinabove.

The Capital Gains Tax Saving Bonds are required to be purchased within 6 months from the date of transfer. It is possible to use a part of the gain in the acquisition of the capital gains tax saving bonds and pay tax on the remaining amount.

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Satyam forays into realty development
Ramesh Kandula

The first residential venture of Maytas Properties, which is being promoted by Satyam Computer Services, is a sell-out barely a month after it opened to public.

Christened ‘Hill County’, the township is spread over 85 acres with state-of-the-art facilities and amenities and is located at Bachupally, Hyderabad, a 10-minute drive from Hi-Tech city, the IT district.

B Rama Raju, one of the key promoters and vice-chairman of Maytas (reverse of the word ‘Satyam’) Properties, is the son of Ramalinga Raju, chairman of Satyam Computer Services.

Given the formidable reputation of the Satyam brand, the villas and bungalows at this venture were lapped up even before they could be formally put up for sale.

In all, two types of 42 villas, measuring 4,500 and 4,000 square feet of settled plot areas of 750 and 550 square yards, respectively, as well as three types of 283 bungalows, measuring 3,400, 2,900, 2,700 square feet each found buyers at the planning stage itself.

Another 840 apartments, ranging from 1,000 to 4,500 sq ft, are presently on sale. “We have already completed sale of 85 per cent of the apartments,” says Suneel Kumar, sales manager of Maytas Properties. Software giant Infosys has booked about 45 apartments in the venture for its employees.

One of the reasons contributing to the brisk sale of apartments is the proposed SEZ promoted by Maytas in an extent of 75 acres, adjoining the Hill County.

“Lot of value addition is being offered to customers, which sets aside this venture from other such projects,” explains Kumar. They include abundant open spaces, sky lounge, hanging gardens, double lobby at the entrance, 14 acres of concrete slab for underground parking which will have lot of greenery and sun light, a five-acre club house and a 25,000 sq ft shopping area.

The venture even boasts of a full-fledged cricket stadium with an amphitheatre, besides two tennis courts, two badminton courts, two squash courts, two billiards tables, gymnasium, yoga hall, aerobics hall, massage centre, each for men and women, cascading swimming pool, children’s pool, play area for children, library, restaurant and bar, business centre, banquet hall, mini home theater, wi-fi enabled common areas among others.

Presently being sold at a base price of Rs 3400 a sq ft, the project is expected to be completed by September 2008.

Maytas has three more projects on hand. A premier land area of 5.7 acres adjacent to KBR Park in Jubilee Hills is being developed for mixed use. It will have over 1,000,000 sq ft of space and will include a five-plus-star hotel, luxury apartments and high-end retail space. The project is scheduled to be completed in 2008.

An officer tower with a built up area of 85,000 sq ft. at Banjara Hills is to be completed by December 2007. Another project is Jubilee Hills Park View, overlooking the tranquil KBR Park in Jubilee hills. This property will have over 70,000 sq ft of space and will house IT offices and residential buildings.

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Trident row: Farmers up in arms against Punjab Govt
Sushil Goyal

The acquisition of 376 acres of land in a “forcible manner” by the Punjab Government for Abhishek Industries Limited, known as Trident Group, in Dhaula, Fatehgarh Chhanna and Sangherra (near Barnala) has not only raised the ire of farmers of the state against the Amarinder government but also put brakes on the further acquisition of land of the farmers by the government for its dream mega projects to be set up by the big industrial houses in the state.

The government has acquired 103 acres in Dhaula village, 217 acres in Fatehgarh Chhanna village and 56 acres in Sangherra village. As this entire land is now in the possession of the Trident Group, the company has raised a high boundary wall around the acquired land to prevent the entry of the agitating activists and members of the farmer organisations besides those farmers, who have not taken the compensation and are demanding their land back. Besides the boundary wall the factory owners have also put up a board in the acquired land stating, “This land is the property of Abhishek Industries Ltd. Tress passers will be prosecuted”.

Farmers of these three Barnala villages are angry with the Punjab Government because of the method adopted by it to make them landless for the benefit a big industrialist. The farmers do not want to sell their lands as many of them are small farmers and have no other means of livelihood. Their other grudge against the state government is that it has acquired their land at a rate of about Rs 8.50 lakh per acre whereas the market price of their land is two to three times more.

Mr Hardev Singh, a resident of Dhaula village, whose land was also acquired, said that the normal rates of the land in the Dhaula and Fatehgarh Chhanna villages were now about Rs 18 lakh to Rs 20 lakh per acre while on the main road the price of an acre was about Rs 35 lakh or more. He said that some days ago someone had made a deal at a rate of Rs 33 lakh per acre near the new gate of Abhishek Industries limited at Dhaula. He said many farmers of these villages had not taken compensation from the government against their acquired land as they wanted their lands back.

This acquired 376 acres of land has emerged as a bone of contention between the state government and the farmers due to which nine farmer organisations are up in arms against the state government for the past several months. They have been filling jails, blocking rail and road traffic, besides taking out protest marches and organising demonstrations and dharnas through out the state to get the lands of the farmers back.

Mr Sukhdev Singh Kokrikalan, general secretary of the BKU (Ugrahan), claimed that farmers had been looted by the state government to benefit the Trident Group owners. He said despite strong opposition by the farmers against the acquisition of their land, the government had acquired their land and had fixed the rate as Rs 8.45 lakh per acre whereas actual market price was about Rs 20 lakh per acre. In some cases it was more than Rs 30 lakh per acre. He said as the majority of the farmers were not interested in selling their land for industrial purposes so out of total 128 families (owners of 376 acres) only 30 farmers had taken the compensation from the government while 98 families had refused to give their land and take the compensation.

However, Mr Rupinder Gupta, manager, administration, Abhishek Industries Limited, claimed that so far 70 farmer families of Sangherra, Dhaula and Fatehgarh Chhanna villages had already taken the money against their land. He said the Abhishek Industries would set up a spinning unit, a readymade garments unit on the acquired land of Sangherra village while on the acquired land of Dhaula and Chhanna villages it would set up a sugar mill, a paper mill, a power generation unit, a bed sheet plant.

He said with the setting up of these units about 10,000 youths would get direct employment while about 20,000 persons would get employment indirectly.

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Mumbai buildings set to touch the sky

A recent order by the HC has allowed unrestricted vertical growth of redevelopment projects, says Shiv Kumar

Mumbai’s buildings will soon reach out to the sky thanks to an order of the Bombay High Court last week which allowed redevelopment projects to grow vertically without restrictions.

With land scarce in a city surrounded by the sea, there is no other option but to grow upwards. With this objective in mind, in 1999 the Maharashtra government had issued a notification to modify the Development Control Regulations in order to allow redeveloped properties to rise above the 45-metre limit.

Urban activists and citizens groups, led by former minister Sadanand Varde, had challenged the government’s rules on several grounds, including the lack of adequate infrastructure for the proposed constructions.

The petitioners contented that the modification was in contravention of the Town Planning Act. Further they contended that open spaces around buildings would be reduced and warned of fire hazards if the proposed rules were permitted.

The petitioners also warned that supply of water, power and sewage disposal would be affected since adequate infrastructure in this regard did not exist.

In his affidavit before the court Principal Secretary of Urban Development Department Ramanand Tiwari had stated that the objective of the notification was to replace old dilapidated buildings and to rehabilitate tenants in newly-reconstructed buildings.

Advocate-General Ravi Kadam, representing the government, had argued that this modification was needed as additional Floor Space Index (FSI), which was provided to builders as incentive for redevelopment, could only be accommodated by going higher. In other words builders would build flats for sale in the open markets which would subsidise the homes of the existing residents.

Addressing the concerns of the petitioners, the court, while upholding the modified rules, ordered the government to provide for adequate infrastructure.

The modified rules would apply to reconstruction of old buildings by a private builder brought in by the landlord or tenants as well as redevelopment by the BMC or the Maharashtra Housing And Development Authority.

With the Bombay HC giving the nod to builders to construct skyscrapers to house residents of dilapidated buildings, redevelopment activity is likely to spread across the limits of the Brihanmumbai Municipal Corporation. “It should now be easier for old buildings to be demolished and towers constructed in their place,” says Mr Nathulal Taneja, a developer in the Northern suburbs.

Several prominent builders, who had moved faster than the activists and obtained government clearances quickly, were on the verge of completing their projects.

The Shapoorji Twin Towers in the congested Tardeo area will be 65-storeys tall making it the tallest building in South Mumbai. Flats start from the 15th floor with the floors below reserved for parking cars. Rates begin at Rs 25,000 per sq feet with every apartment having a view of the sea. The mill workers, who originally lived here, will be accommodated elsewhere.

Elsewhere too, residents of old buildings are already being paid off to move as their homes make way for the swish set. In suburban Bandra, developers bought out the Catholic Christian residents in many buildings, which were re-developed for the rich Palanpuri Jain community, who did not want to have meat-eaters as their neighbours.

Within days of the HC order; developers have begun to make enquiries with smaller housing societies in the Western suburbs offering to build towers in their places. Apart from spacious homes, existing residents are offered a plum advance in cash in black to sign on the dotted line.

And many are doing so even if they have to come back to crowded roads and water cuts two years down the line.

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Practice by unauthorised architects on rise
Sunit Dhawan

Much hue and cry is raised by voluntary social organisations as well as the media about unqualified medical practitioners or quacks playing with the health of residents, especially in rural areas, slum dwellings and other backward localities. However, one hardly sees any reports about the unauthorised persons practising as architects in practically all parts of the country.

The Union Government has formed a statutory body called the Council of Architecture, India, under the Architects Act, 1972, to ensure that only well-qualified and trained professionals can practice as architects.

Under Section 37 (1) of the Act, no person other than a person or firm registered with the Council of Architecture shall use the title and style of architect and/or hold office as an architect or carry out the duties and functions of an architect in any government or local body institution or private organisation.

Thus, as per the mandatory provisions of the Act and norms laid down by the council, only those persons, who hold a recognised degree or diploma in architecture, are eligible to practice as an architect. As per the norms, even the use of the title of “architect” by the persons not registered with the council is an offence, for which they can be prosecuted and punished under Section 37 (2) of the Act. The council keeps on issuing warnings and public notices through newspapers and other media in this regard, but irrespective of these measures, a number of unauthorised persons continue to practice as and use the title of architects.

These unauthorised persons use various ways and means to carry on their practice. For example, they get themselves approved for working in C-class committees under certain provisions of the Act and council. Later they start working in A and B class committees for which they are not eligible.

To hoodwink the law, they get their drawings and building plans signed by some registered architect and get it approved from the authorities concerned. Such persons usually get their work done in local government bodies by greasing the palms of lower level officials. Many a time, draftsmen working in the town planning or urban development offices themselves practice as architects.

Such unqualified persons, practicing as architects without authorisation, may cause a disaster by preparing flawed building plans. Still, the authorities concerned are yet to take any concrete measures in this regard.

On being contacted, the Estate Officer of HUDA, Hisar, Dr Jai Krishan Abhir, maintained that they ensured that the map drawings and building plans of only the registered architects were approved. He asserted that they could only take appropriate action against unauthorised “architects” on getting specific complaints regarding the matter.

“The unqualified persons working as architects should be identified and barred from practice to streamline the system, which would be a big help for the urban development authorities,” he remarked.

Dr Abhir observed that the associations of qualified and registered architects should also come forward to help nail the black sheep in their field.

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Indians among top real estate investors in Dubai

A view of the Hong Kong skyscrapers. Hong Kong’s property giants snapped up the latest plots of government land released for auctions, reaping 5.18 billion Hong Kong dollars (664 million USD), well above the reserved prices.
A view of the Hong Kong skyscrapers. Hong Kong’s property giants snapped up the latest plots of government land released for auctions, reaping 5.18 billion Hong Kong dollars (664 million USD), well above the reserved prices. — AFP photo

Indians are among the top investors in the booming real estate market here, a government official said.

Therefore, to tap the growing Indian interest, the Department of Tourism and Commerce Marketing (DTCM) here, in conjunction with the Dubai Properties Group will organise Dubai real estate road shows, conferences and exhibitions in India and Saudi Arabia in 2007.

“This is the first time the department is organising dedicated road shows, conferences and exhibitions to promote the real estate projects in overseas markets,” DTCM Director Operations and Marketing, Mohammed Khamis bin Hareb said.

In India, the road shows will be held in New Delhi on August 20 followed by Bangalore on August 22 and Mumbai on August 24 next year, he said.

More than 40 real estate companies will be participating in the exhibitions, he said.

“The series of road shows will help highlight the strengths and attractiveness of Dubai’s booming real estate and the investment potential in this promising sector,” Hareb said.

The DTCM also operates a representation office in Mumbai. Adel Lootah, Executive Director, Dubai Properties Group, said the road shows will attract more investors from India.

Ever since the emirate of Dubai opened its property sector in 2002, there has been a boom with some USD 100 billion worth of real estate projects under construction or in the pipeline. — PTI

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Buzz on Bourses
Sobha IPO oversubscribed 108 times

Riding high on the robust response from institutional investors, initial public offer of Sobha Developers was oversubscribed 108 times on its last day of offer on Thursday.

The offer received overwhelming response from Qualified Institutional Buyers with over 96 crore bids received against the total offer size of 88.92 lakh equity shares, according to latest data available on the stock exchanges.

Price band for the issue had been fixed between Rs 550-640 per share.

The real estate company proposes to utilise the net proceeds of the issue to finance land acquisition and fund ongoing projects, while a part of the proceeds would be used to repay certain loans. — PTI

DLF Park Place achieves 600-crore sales

Real estate major DLF on Thursday said it has achieved a sales of Rs 600 crore in 10 days at its 30-acre integrated township in Gurgaon, Haryana.

The DLF Park Place, a part of DLF City-Phase five, has attracted a huge response of Rs 600 crore in just 10 days, a company release said.

DLF Park Place, which incorporates four apartment buildings, club, malls, school and medical centres, would offer 1,500 flats for the customers.

“We have sold more than 40 per cent out of 1,000 flats that have been launched,” DLF general manager, corporate communications, Shalini Vig Wadhwa said.

DLF brand continues to attract high-end customers, which was evident from the successful response of DLF Park Place, she said. — PTI

Parsvnath may raise up to 600-crore debt

Buoyed by the overwhelming response to its IPO, realty major Parsvnath Developers now plans to raise up to Rs 600 crore in debt by mid-2007 to fund its existing projects.

Parsvnath Chairman Pradeep Jain has said that the company might raise the amount to develop projects at its existing properties spread over 108 million sq ft.

“So, may be we will require Rs 500-600 crore as debt from banks and financial institutions,” he said.

Prices of its shares, which made its trading debut on Thursday, soared 75 per cent over the issue price of Rs 300 per share, after listing with a premium of 80 per cent at the Bombay Stock Exchange.

The company achieved a market capitalisation of over Rs 9,500 crore on its debut on the bourses, after having raised over Rs 1,000 crore in its public issue earlier this month to fund 11 projects.

The company’s debt-equity ratio was comfortable as its net worth stood at Rs 1,400 crore with debt of Rs 500 crore, Jain added.

Parsvnath, which is having presence in 14 states and 41 cities across India and operates in all verticals of real estate development, is developing 90 projects aggregating to a saleable area of over 108 million sq ft at a cost of Rs 13,270 crore. — PTI

Pentium Infotech’s foray into real estate

Pentium Infotech has said it has earmarked an initial investment of Rs 8 crore to enter the booming realty business.

In a communique to the Bombay Stock Exchange, Pentium said the board of directors have given their nod to enter the business and have approved Rs 8 crore as initial investment.

The company is understood to be in talks to forge a tie-up with property developers and some industries having construction and infrastructure related projects approved by the government. — PTI

 

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