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Hilton opens fourth India property in New Delhi

2011-10-12T22:10:00.000-07:00

Hilton Hotels & Resorts has opened the Hilton New Delhi-Noida-Mayur Vihar, under a management agreement with Eros Resorts & Hotels Ltd.

The 168-room hotel features two restaurants and a lobby lounge and bar. Facilities include a 24-hour business centre, outdoor pool, a fitness centre and a spa.

“Hilton New Delhi-Noida-Mayur Vihar is our fourth hotel in the country. We have opened three hotels in India this year, and we plan to launch five more hotels over the next eight months. At the current pace, we hope to triple our presence in the country in the next two years,” said Martin Rinck, president - Asia Pacific, Hilton Worldwide.

Located close to NOIDA’s business district, and within half an hour’s drive from Connaught Palace in the city centre and other tourist attractions including Akshardham Temple, Rajghat, Old Fort and Humayun's Tomb, the hotel is expected to attract both business and leisure travellers.

Guest rooms include four suites, and rooms start at a size of 400 sq ft, offering among the largest accommodation in the city.

Dining at the hotel includes Infinity, an all-day-dining restaurant that offers a buffet alongside an a la carte menu of international and local delicacies; and S.P.I.C.E.D., an Indian specialty restaurant scheduled to open in December.

“This has been an incredibly exciting year for us in India. Our Hilton brand is ranked as the leading international hotel brand in India. This hotel continues our brand’s rapid expansion in this growing market,” commented Dave Horton, global head, Hilton Hotels & Resorts.

Mumbai flat sold for Rs 6.9 crore

2011-09-15T22:44:00.000-07:00

Property Deals in MUMBAI

An apartment measuring 3,000 sqft, located in Powai, was sold for a Rs 6.9 crore. The apartment, set in the one of the most-sought-after locations in Mumbai, commanded an average capital value of Rs 23,000 per sqft and is as per the current average, which ranges between Rs 23,000 and Rs 32,000 per sqft. However, the suburban locations of Mumbai have not seen any change in the values in the last three months. The rates are expected to remain stable in the short to medium term.

Property Deals in Delhi NCR

A residential unit measuring approximately 5,000 sq ft, situated in Panchsheel Park in South Delhi, was leased to an NRI for a monthly rental of Rs 3,00,000. The duplex property has commanded the prevailing rental value; the rental value for comparable property in the region ranges from Rs 1,75,000 to Rs 3,25,000 per month.

Rental values have seen a rise of 5% over the last quarter in the region of south-central areas of NCR, which includes Panchseel Park, due a steady rise in demand and limited availability. Going forward, however, rental values will remain stable in the short to medium term.

Property Deals in KOLKATA

A high-end residential apartment spread across 1,309 sqft was leased to a corporate for a monthly rental of Rs 38,000. The apartment is located in a well-maintained residential complex located in the area of Rajarhat, one of the fastest developing residential locations in the city, given the parallel development of commercial office space and corresponding retail space.

It is well connected through road network to various parts of the city and has been attracting many corporates looking for residential space for their senior executives. Given the current demand for rental properties, the area has seen an increase of 6% in rental values in the past quarter. It may not see a rapid rise in the short to medium term as rental markets are generally sensitive to rapid price movements.

Oberoi group sells 100-year-old Oberoi Palm Beach to Mayfair for Rs 10 crore

2011-09-15T22:43:00.000-07:00

The Oberoi Group has sold its 100-year-old hotel property at Gopalpur on Sea in Orissa to Mayfair Hotels and Resorts, a local hospitality company owned by former cabinet minister and industrialist Dilip Ray, for Rs 10 crore.

The property, Oberoi Palm Beach, was bought by Rai Bahadur MS Oberoi in 1947 from an Italian lady and was the third hotel in his portfolio after Shimla and Kolkata.

EIH, formerly East India Hotels, the flagship company of the Oberoi Group, has handed over the property to the Mayfair Group, which now has eight properties, said top executives at both companies. For the Oberois, the Gopalpur property, though small, had a lot of sentimental value.

However, with any significant expansion not possible due to the Coastal Regulation Zone restrictions and high overhead costs, the EIH management decided to lease or sell it. For a few years, they leased the hotel to a Bhubaneswarbased hotelier, but it did not work well, said an EIH source. Ray, who has been expanding his hospitality business in the past few years, said: "It is a dream acquisition.

We will try our best to develop this hotel to international standards and expand it." The Mayfair group now plans to spend Rs 25-30 crore to expand the hotel and add another 15 rooms to the existing 20 rooms. It will also add a spa to the property along with villas. Gopalpur on Sea has been a popular destination among the Russian tourists throughout the year. Domestic travellers visit during winters .

With Gopalpur port being developed from a seasonal to an all-weather port, commercial and industrial activity is expected to pick up. Tatas too are planning an industrial park at Gopalpur where it will be the anchor investor.

Abu Dhabi Visa and Immigration:

2011-06-03T01:19:00.001-07:00

Abu Dhabi is the capital of United Arab Emirates and this capital city is just a marvellous place to be. Abu Dhabi has the Arabian Gulf in its front and provides you an atmosphere where you can stroll, cycle, roller-blade or drive the Corniche for a journey to the tip where the majestic Emirates Palace – one of the world’s most opulent hotels sits on 1.3 kilometres of pristine beach.

Abu Dhabi Visit Visa:
Abu Dhabi offers free of charge Visit Visa to citizens of the following 33 countries: UK, France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Finland, Malta, Spain, Monaco, Vatican, Iceland, Andorra, San Marino, Liechtenstein, United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia and Hong Kong.

Apart from the above mentioned countries, people from other countries have to apply for a Visit Visa for Abu Dhabi from their nearest UAE embassy.

Visa terms and conditions and requirements may change from time to time as Government policies might change. It is recommended to check the information with the nearest UAE embassy before coming to Abu Dhabi.

Last but not the least, Eye scan is required for everyone except GCC citizens and the 33 visa-exempt nationalities.

What's new in real estate investments?

2011-05-06T00:57:00.001-07:00

Buying real estate on the auspicious day of Akshaya Trittiya is not just about 'first homes' , from open plots of land to bungalows, this Akshaya Tritiya, we expect bulk of real estate transactions be in the domain of a 'second home' or a 'weekend home' , says Santosh Naik, CMD, Disha Direct .

"There is a sense of achievement that is celebrated when one purchases real estate on such auspicious days like Akshaya Tritiya. Any property bought on this day signifies the sense of achievement, of 'having arrived' at a particular stage in one's life. This segment can best achieve the heady feeling of success when they pick up a 'second home' or a 'weekend home' on the auspicious day," he adds.

"If you want to buy a second home within urban limits, the price factor can be a problem. Or, in most cases, possession is expected after two and a half years. This is where a 'second home' or a 'weekend home' wins - ready possession options, at prices that are easier on the wallet," he adds.

A study by the Mumbai-based real estate research agency Liases Foras supports this theory, it says the entry level prices of apartments and flats in Indian metro cities have logged high growth rates. "For anyone looking at investments in real estate, the 'entry level' pricing for a new project has steadily moved upwards across the past couple of years," explains Pankaj Kapoor, CMD of real estate research and analysis agency Liases Foras. The pricing level at the initial stage in such projects is lower as compared to the entry level pricing for 'metro city location' residential realty. "This creates a perception that these will give better returns on investments ," he adds.

Mihir Dhruva, CEO of Habitat Group says there is a definite trend of 'second home' or 'weekend home' projects attracting buyers this Akshaya Tritiya. "For those who find the price levels of apartments in metro cities a dampener when it comes to investment sentiment, the new option is to buy a second home or a weekend home located in the periphery of metro cities. These have a lower price at the entry stage, and provides better growth rates as compared to prime properties within the metro cities," he adds.

High Cost Real Esate Deals in Delhi

2011-05-06T00:55:00.001-07:00

In a recent transaction in Delhi , a 600 square yard plot was transacted at a price of Rs 61.5 crore. This old G+1 property is located in Shanti Niketan, a high-end residential micromarket in South Delhi.

The property has been purchased by a well-known builder in NCR for redevelopment. The builder plans to build a G+3 storied structure. Construction activity will begin soon. The builder has already started marketing the project .

The first floor is been quoted for Rs 20 crore, the second floor is being sold for . 20.5 crore, and the third floor for Rs 21 crore. The project commands a premium in terms of price, due to its South Delhi location.

Shanti Niketan is well connected to all the major business districts in the NCR and most of the foreign embassies are in the neighbourhood of this location.

Source: Knight Frank India

High Cost Real Estate Deals in Pune

2011-05-06T00:54:00.000-07:00

Recently, a 3-BHK apartment was transacted at a total value of Rs 44,33,000 in Rich Woods, a new project by Rama Developers in Chikhli in the city. The price was inclusive of the car parking charges .

Rich Woods is a project of 180 spacious 2 & 3 BHK apartments in seven imposing towers with state-of-the-art amenities and facilities. Chikhli is directly accessible from the Nashik highway and has great connectivity to the Pimpri Chinchwad area.

The Rama Group has made its mark in the city with two well executed projects to its credit. The base rates are being quoted at . 3,100/ sqft, while the general residential rates in the area range between Rs 2,600/sqft and Rs 3,100/sqft.

Chikhli area has evolved as a viable residential locality. It has become a great option for investors as well as end-users.

Source: Knight Frank India

3-BHK in Mumbai goes for Rs 20 crore

2011-05-06T00:40:00.001-07:00

A 3-BHK apartment, measuring approximately 3000 sqft, was recently transacted for about Rs 20 crore on Carmichael Road. This spacious apartment has a large entrance foyer, living room with an adjoining dining area and a separate study room. The master bedroom has an en suit bathroom with a walk-in closet and great sea views.

The apartment has separate servant's quarters and one covered and one open car parking. The building is equipped with amenities like a garden, pool table and gymnasium. Carmichael Road is one of the most premium localities of Mumbai with several oldstyle bungalows and apartment buildings.

Source: Knight Frank India

Bangalore tops office space absorption again

2011-04-14T05:08:00.001-07:00

Bangalore has topped the league table, outperforming the National Capital Region (NCR), in the total office space transactions across India in the first quarter of 2011, according to a report by real estate consultancy CB Richard Ellis .

With IT/ITeS firms revisiting their expansion plans in Bangalore, the IT hub accounted for almost 36% of office space absorption at over 2 million sft. The first quarter of 2011 witnessed an offtake of 6 mn sft across key market in the country, recording a 20% increase over the same period last year.

NCR took the second spot, accounting for 27% (more than 1.6 mn sft) of the total absorption .

In Bangalore, the peripheral business district of Outer Ring Road (ORR), Whitefield, Electronics City and North Bangalore have turned out to be office hotspots for companies on an expansion and consolidation drive. Almost 1.6 mn sft of fresh IT space was released into this market. The ORR market witnessed absorption of almost 0.62 million sft.
"Vacancy levels in Whitefield and ORR were high. Rentals were subdued, but they are firming up as some vacant properties have been absorbed," said Anshuman Magazine, MD, CB Richards Ellis.

Rentals of Grade A properties on ORR marginally increased from 42 per sft in December to Rs 44 per sft in March. Whitefield saw monthly rentals jump from Rs 24 per sft in December to Rs 30 per sft in March. The area has seen some key leasing activity. Biotech company Invitrogen Bio leased 28,000 sft in Tata Xylem building in Whitefield last year. Robert Bosch has taken up 91,000 sft in L&T Cyber Park in Electronics City.

The Central Business District (CBD), comprising of MG Road, Richmond Road, Residency Road and Lavelle Road, witnessed an increase in number of enquiries from corporate houses. Rentals for Grade A spaces have increased by 15% quarter-on-quarter , said the report . "There are basically smaller transactions . We have seen some big transactions like Microsoft leasing out 1 lakh sft on Lavelle Road last year. With Metro chugging on track, the CBD will see more rental action," Magazine said. Rentals for Grade A office spaces on M G Road and Residency Road increased from Rs 74 per sft in December to Rs 85 per sft in March this year.

The South Bangalore micro markets of Banerghatta Road, JP Nagar, and Jayanagar suffer from lack of supply, so has seen limited action. North Bangalore has seen some demand, but the area too suffers from lack of quality space, the report said.

Dubai properties 60 % cheaper than Mumbai

2011-04-07T06:21:00.000-07:00

A growing number of investors from India are showing interest in Dubai as they look to capitalise on 60 per cent savings per square foot in the Dubai property market, a Dubai-based real estate company has said.

DAMAC Properties said in addition to the price disparity, Dubai's property market is becoming increasingly attractive to foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners.

"As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the emirate's real estate market," it said in a statement.

At an average price per square foot of USD 264 in Dubai, according to Colliers International, property is now 60 per cent less expensive than in central Mumbai , where the price per square foot is USD 664 according to Jones Lang LaSalle .

DAMAC Properties Senior Vice-President Niall McLoughlin said: "At DAMAC Properties, we have seen a marked rise in interest across our Dubai portfolio from Indian investors; in January 2011 we had double-digit growth in enquiries on the same period last year.

"Not only are we seeing a surge of interest from potential Investors from India but also from other emerging markets such as sub Sahara Africa and China who are looking for quality assets, at competitive prices."

According to McLoughlin, even though confidence was shaken following the global slowdown, the introduction of new regulations in Dubai gives property buyers more security over their investments. DAMAC Properties has also welcomed the return of liquidity into the mortgage market, which it cites as another major factor in the revival of the emirate's real estate sector.

"Now that banks and financial institutions have begun to regain confidence in the market, and are again in a position to offer financing packages, it will start to address the issue of oversupply -- one of the major factors in the sector's devaluation," McLoughlin said.

Pune Biggest Real Estate Deals

2011-03-28T00:03:00.001-07:00

Recently, a 3-BHK apartment with an area of around 1,482 sq ft located at Kunal Crimson project was sold for . 75 lakh, all inclusive. The possession of the property is due in 18 months. Kunal Crimson located at Aundh Annexe is easily accessible from Khadki Station , University Circle, Shivajinagar as well as Pimpri-Chinchwad . Presently, this project has an availability of 27 apartments of 2-1 /2 and 3-BHK configurations with saleable area varying between 1,382 sq ft and 1,482 sq ft.

The residential price in the area ranges from . 3,500- 4,500/sq ft. The project offers amenities like a club house, gymnasium, jogging track and a children's play area . Aundh Annexe is an established area of Pune and commands a premium on account of good connectivity to the rest of the city.

Source: Knight Frank India

Recent Biggest Real Estate Deal in Delhi

2011-03-28T00:00:00.000-07:00

A 2,587-sq-ft luxury apartment was sold in Sector 57, Gurgaon at a price of . 1.45 crore, all inclusive . This is a secondary sale transaction. This apartment is located on the eighth floor of one of the high-rise towers and the buyer had to pay . 100/sq ft as preferred-location charges, which is included in the price. The unit comes with two car parking spaces.

This group housing project is built on around 14 acres of land area with ample open spaces. The apartment comes with amenities like 100% power backup for flats and common areas, security and door-phone facility, a well-equipped club and a swimming pool. The developer is also providing laminated wooden flooring in all the bedrooms and vitrified tiles in living and dining area.

Source: Knight Frank India

Mumbai realty robust despite small fall in flat sales in Feb

2011-03-27T23:52:00.001-07:00

Mumbai's real estate market continues to be robust despite a minor blip in February when flat sales clocked a 2.40 per cent decline, a leading industry body said.

The city reported a marginal decline in flat registrations at 16,341 in February as against 16,743 registrations in the year-ago period, data from the Maharashtra Chamber of Housing Industry (MCHI) showed.

"There has been no sharp decline in Mumbai's real estate market--there has only been a marginal decline in sales figures of residential apartments," MCHI said in a statement here.

The decline in flat sales in the first two months of this year is not severe, MCHI's President Sunil Mantri said, admitting, however, to a small dip in the same during the period.

"Although it is a fact that flat sales did decline in the first two-months of the current year, the extent of fall is not that severe as is being made out to be by some," Mantri said.

In 2010 (January-December), Mumbai clocked a total registration of 2,17,466 as compared to 1,94,885 in the previous year, MCHI data showed.

Dubai property prices set to fall up to 30% in next two years

2011-03-20T23:45:00.000-07:00

Real estate prices in Dubai fell 1.7% in February and could fall up to 30% in next two years in a sign that the emirate’s beleaguered property market is still not back on track.

The latest figures from Deutsche Bank show that although the pace of decline is slowing there is still likely to be further downward pressure on the market.‘We do not see any improvement in fundamentals that could trigger a recovery, the bank said in its report.

Residential property prices in Dubai have now fallen by 62% since their peak in the middle of 2008 after the global economic downturn caused mortgage lending to dry up and speculative demand ground to a halt.

And in a separate report it is predicted that prices are likely to decline a further 25 to 30% this year and in 2012. The gloomy prediction from investment bank Rasmala is based on the fact that there is too much supply and not enough demand.

‘We believe the UAE property sector is undergoing mid-cycle dynamics. House prices have corrected by 45 to 55% but rising oversupply could see a further 25 to 30% drop in the next two years,’ Rasmala said.

‘While supply dynamics may be somewhat different for Dubai and Abu Dhabi in terms of volumes, their demand dynamics almost mirror each other in terms of a low appetite for new housing as financing remains tight and negative equity concerns linger,’ the report added.

Developers are, however, seeking to sort it out. The supply of fresh real estate in Dubai will tumble by nearly a third this year as developers hold back units in a bid to manage the city’s saturated property market, according to real estate consultants Jones Lang LaSalle.

The supply of residential, retail and hotel real estate is expected to be 32.2% lower than in 2010, a report from the real estate consultancy showed.

‘The supply clearly is being held back. That is partly due to the market factors and it is partly due to the fact some developers have had trouble financing projects and making the last payments,’ said Craig Plumb, head of research at JLL. ‘There are a number of buildings that have been completed and have not been released to the market,’ he added.

But thousands of units are scheduled for release this year, despite an estimated 40% vacancy rate in homes and offices across the emirate. JLL said some 25,000 residential units will be released on to the emirate’s property market this year, but this is a drop of 31% when compared to 2010.

The hotel market will see the largest decline in supply, with 3,400 new rooms expected to come on stream in 2011, around 55% less than the 7,700 that came online in 2010.

Plumb said an added number of new units may be held over to 2012 in a bid to pace the supply being released on to the market. ‘Some space will simply get pushed to 2012. The supply we have for 2011 will probably finish up less than we are forecasting,’ he explained.

In Abu Dhabi, the situation is reversed, JLL data shows. The capital will see a 108% surge in new real estate this year, driven by its residential market. Some 25,000 new houses and apartments are due online this year, a massive 346.4% rise in the 5,600 units released last year.

‘Dubai is past the peak of its annual pipeline of new supply while Abu Dhabi is still approaching the peak for new supply,’ the JLL report said.

Industry experts have long acknowledged the oversupply problem facing Dubai. However, there is little agreement on how long it will take to clear the backlog. Mohamed Alabbar, chairman of Burj Khalifa developer Emaar Properties, said in November it would take at least 20 months for the city to absorb its surplus stock.

Chris O’Donnell, chief executive officer of debt hit developer Nakheel, said in December that the figure was closer to three to five years.

Dubai economy grew by 2.2pc in 2010

2011-03-20T23:43:00.000-07:00

Dubai's economy is expected to have grown by around 2.2 percent in real terms last year, emerging from a similar contraction in the previous year, the Arab emirate's statistics office said on Sunday.

The global financial crisis shelved projects worth billions of dollars in Dubai, a trade-focused member of the United Arab Emirates known for artificial palm-shaped islands. Its economy was further hit by debt troubles in state-owned firms last year.

But recovery in trade flows and tourism was seen helping lift 2010 growth of the oil-wealth lacking emirate, which accounts for almost a third of the UAE's gross domestic product.

"The GDP for the first nine months of 2010 increased by 2.4 percent and Dubai Statistics Center expects that the GDP for the whole year will increase by around 2.2 percent," it told Reuters in an e-mail.

The statistics office head said in February that Dubai's economy grew 2.5 percent year-on-year in the first nine months of 2010.

Earlier on Sunday, its data showed that Dubai's real GDP contracted by 2.4 percent in 2009, more than expected, due to a plunge in property and construction sectors. It expanded by 3.2 percent in the oil and property boom year of 2008.

The International Monetary Fund forecast the emirate's real gross domestic product to have shrunk by 0.9 percent in 2009 and predicted a 0.5 percent growth for 2010.

Dubai's nominal gross domestic product fell 14.2 percent to 294.2 billion dirhams ($80 billion) in 2009, around 54 percent of that of neighbouring Abu Dhabi, the data showed.

In 2009, the construction sector shrank by 19.5 percent in real terms, while the real estate and business sectors plunged by 19.8 percent. Both sectors account for about a quarter of Dubai's economy.

"Since 2009 there was a bounce in activity with recovery in the global economy and the removal of some of the uncertainties around some of the Dubai debt issues," said Giyas Gokkent, chief economist at the National Bank of Abu Dhabi.

"When you look at Dubai, tourism, aviation and logistics are doing well ... The bit that is not doing so well is real estate and any activity around that," he said.

Concerns about Dubai's total liabilities, estimated at around $115 billion or 144 percent of GDP, have eased after state-owned Dubai World sealed a deal last September to restructure almost $25 billion of debt.

Worries still persist about the ability of Dubai and its companies to repay some of their bonds and loans worth billions of dollars in the next four years.

Dubai house prices, already nearly 60 percent off their peak, are set to drop another 10 percent over the next two years as new units are released onto a market awash with supply, a Reuters poll showed in January.

The economic output of the whole UAE, the world's third largest crude exporter, is expected to grow by 3.4 percent this year as oil prices hold above $100 per barrel, fuelled by political turmoil in the Arab world, a Reuters poll showed last week.

Dubai's GDP growth alone is forecast to quicken to 2.8 percent in 2011, the IMF said in March.

Source: Reuters

Real estate most corrupt sector: KPMG

2011-03-20T23:39:00.000-07:00

Real estate sector has topped the list of industries perceived to be the most corrupt in India, followed by telecommunications and social development sectors in a survey conducted by global consultancy firm KPMG.

Nearly half of the respondents in the survey are of the view that real estate, construction and telecommunication sectors are most prone to corruption because government and political intervention is considered higher in these sectors, KPMG stated here. Large capital investments, multi-level approvals, complex processes and huge projects give immense opportunity for corruption, the survey said.

Financial services, defense, information technology and IT-enabled services, energy and power sectors are also perceived to be corrupt, in that order, the survey noted. Sixty-eight percent of respondents believed that the country can achieve more than the projected 9% economic growth if corruption is controlled, while 51% feared that rising corruption will make India less attractive to foreign investment. As many as 90% of respondents believed that corruption negatively impacted stock market performance.

“ Regulations in the country focus on the bribe taker rather than on the payer and hence corporate houses do not shy away from adopting corrupt practices. However, the global environment is rapidly changing and it will only be a matter of time before Indian regulators align themselves on global anti-corruption practices”, the survey quoted KPMG's risk and compliance head Deepankar Sanwalka as saying.

The survey is based on responses of about 100 corporates, mainly MNCs (48%), India based MNCs (28%) and domestic Indian firms. KPMG had sent its detailed set of qestions to about 300 companies.

Mumbai witnesses fall in real estate sales registrations

2011-03-20T23:32:00.000-07:00

It’s been a weak start to the year for the Mumbai real estate market with the number of property sales registered in India’s financial capital continuing to fall for the second consecutive month. The downtrend in sales volumes for the month of February is similar to that seen in January. Sales registrations at 4,716 are down 22% year-on-year and 7% month-on-month, according to a study by Prabhudas Lilladher, which points out that even after adjusting for the fewer days in February, the numbers would be more or less similar to those seen last month.

“The three-month moving average graph for sales registrations clearly illustrates a continuation of the downtrend,” the brokerage notes, adding that volumes for the lease segment continue to trend up, with the numbers coming in at 8,055, up 20% year-on-year. The continuous rise in the number of properties being leased is probably the result of prospective home buyers not being able to afford purchases after the sharp rise in property prices seen over the last one and a half years. It’s possible that prospective buyers are waiting for a correction.

Sales in Mumbai’s suburbs fell sharply, down 26% year-on-year in February, on the back of a 26% year-on-year drop in January. In contrast, sales in Mumbai city at 824 are up 13% year-on-year, albeit on the lower base of last year.

The brokerage notes that although February 2011 figures suggest a divergent trend, “a sharp slowdown is visible in both the city and suburbs, with volumes down 45% and 46% respectively compared to their peaks in 2010.”

Meanwhile, real estate analysts believe that although volumes were reasonably good at a pan-India level (ex-Mumbai), in the three months to December 2010, rising property prices and hardening mortgage rates combined with slowing investor demand will lead to volumes declining across most cities in the first half of 2011. “Volumes in Mumbai are down 50% below peak levels and we believe a similar trend ,though less acute, may play out in the National Capital Region (NCR) over the first half of calendar 2011,” notes a report from Edelweiss. The brokerage adds, “We have maintained a view of prices in Mumbai correcting by about 15% in 2011 on account of high prices and dampened buyer sentiment. In this regard, our channel checks indicate initial signs of prices softening in central Mumbai. However, we believe the correction of about 15% is limited to premium high-rise projects in the initial stages of construction and does not represent a broad-based correction in Mumbai.”

Meanwhile, the cost of home loans is going up with almost all banks and home loan major HFDC having upped their lending rates in the last few months. Some banks like ICICI Bank have increased rates twice in the span of three months in the wake of the central bank tightening money.

Property tax board to be set up

2011-02-23T03:24:00.001-08:00

The Gujarat government has decided to make municipal corporations and municipalities 'fully enabled' to levy property tax for all types of residential and commercial projects, removing hindrances that come in the way. For this, it is planning to set up a state-level property tax board to assist all municipalities and municipal corporations put in place 'an independent and transparent procedure for assessing property tax'.

Part of the half-a-dozen-odd amendments being contemplated to the current laws to reform the urban local bodies' (ULB) administrative structure, the board will enumerate all properties within the jurisdiction of municipalities and corporations. It will also review the present property tax system and make suggestions for a suitable basis for assessment and valuation of properties, and recommend modalities for periodic revisions.

State urban development department plans to place these amendments in the upcoming session of state assembly, to start on February 24. Yet another amendment requires a Comptroller and Auditor General ( CAG) of India inspection of the audits currently being carried out by ULBs for proper monitoring of funds disbursed at the state and Central levels.

These amendments are proposed to be in line with the recommendations of the Centre's 13th finance commission. If the state government fails to amend its present ULB laws, there is a danger that Central funds made available for various developmental schemes to Gujarat for urban areas may lapse. The reforms have to be carried out starting with the financial year 2011-12, and amendments must be in place 'before March 31', official sources said.

A third reform sought is putting in place the system of independent local body ombudsmen who will look into complaints of corruption and bad administration.

Other reforms which must be compulsorily carried out, include fixing qualifications of the members of the state finance commission.

This commission will look into the funds requirement of ULBs; set service standards for water supply, sewerage, storm water drainage and solid waste management; and put in place a fire hazard response and mitigation plan for each of the ULBs by making it public.

RAK promulgates regulation on immigration

2011-01-07T03:51:00.001-08:00

ALL international passengers arriving at Ras Al Khaimah (RAK) International Airport should hold a passport, which is valid for at least three months to obtain “a visa on arrival,” a source at the Department of Civil Aviation (DCA) clarified.

DCA service manager Abdullah Al Hammadi has clarified that the regulation, applicable immediately at RAK airport, has been initiated by the immigration authorities after there were instances of “embarrassing moments” being faced by both passengers and officials at the airport. This regulation, however, is not applicable for passengers who reside in the UAE with valid visas, he explained.

There was some confusion prevailing among airline agents on the contents of a previous bulletin issued by the chairman of the DCA.

The notification to all airlines operating in the country instructed them to “kindly note that any passenger disembarking at RAK airport should hold a passport having validity of at least 6 months to qualify for a resident visa or validity of at least 3 months for obtaining a visa on arrival. All airlines are requested to verify the validity of passenger passports as mentioned above.”

The notification also warned that airline companies that violate this regulation would face a fine of Dhs5,000.

“Hence it is advised all airlines to implement this new regulation as soon as possible and avoid embarrassment,” the notification from Eng Salem Bin Sultan Al Qassimi, chairman, Department of Civil Aviation, added.

Airline sources in Dubai said that other entry points in the UAE, especially airports in Dubai and Sharjah, had already been implementing this regulation.

“RAK airport, however, has now adopted the rule. Since the restart of RAK Airlines, several people were using this airport on account of several facilities being accorded to them, such as low fares and connecting bus services with other cities,” one senior travel agent said.

“We were little confused on the wordings of the notification and thought that even residents with valid visas would need a minimum 6-month visa validity, while entering the country after vacation. It is now clarified,” he added.

The Significance of Real Estate in Dubai for Dubai Economy

2011-01-04T05:32:00.001-08:00

For the first time in history UAE has simultaneously in all productive activities record growth values. In the UAE, the economy grew at an annual average of 6% in the decade 1993-2003 and since then it has climbed to 9%, a rate similar to that achieved by China. With a GDP per capita multiplied nearly six-Argentina: US $ 24,000 compared to US $ 4,700. But in this country where 80% of its land is desert, it supersedes everyone with the help of the income generated from oil and with an eye toward the coming decades dream run horizon.

Dubai is a city of 700,000, the second largest among the seven that make up the federation of the UAE: Abu Dhabi (The capital), Sharjah, Ajman, Urmm Al Quwain, Ras Al Khaimah and Fujeirah are the other six. It is the business hub of commercial life in this part of the Arabian Gulf, but not least it has the edge to be the center of the world.

Thanks to changes in the legal framework of Dubai real estate facilitating the properties of sale Dubai by foreigners making an attractive destination for purchasing a second home.

So far the purchase of property by foreign population was made for the sake of investment. Foreign workers spending some periods of time away from Dubai can benefit financially from his house just renting them. And considering the pace with a growing number of residents in Dubai, it is hard to think of the importance that is acquiring the property market rents.

The truth is that Real Estate in UAE is one of the most exciting opportunities that we can find within the global property market, since in most cases, those who buy flats and houses in places like Dubai get an excellent business results by other round.

One of the things that should not fail to note is that in the future properties for sale Dubai will be much more expensive. Therefore, many entrepreneurs throughout the world use these transactions as business investments having very little room for error.

Another good fact which should be analyzed is that emirates are having a very good period to allow those who do good business to ensure the future so to speak. Many foreign businessmen have realized the good investment that offers Dubai apartments rent to have been more significant to consider.

In May the release of 850 buildings that will tower between homes, offices, a logistics city, an industrial center, a commercial area, a scientific-technological university including a mega cancha courses and half-city, prepared to accommodate film productions, television and cultural.

UAE authorities build brick by brick this big commercial hub after massive investment in public works, hotels, entertainment and construction. Only in a real estate project are spending now US $ 3,000 million and just start building the world’s largest airport with capacity for 190 million passengers per year.

This country’s “relatively liberal economic environment” has evolved to “become one of the strongest economies and fastest growing in the world,” according to the World Trade Organization (WTO), transport services, mainly – became “strategic priority.”

RAK Ceramics set for growth

2011-01-04T05:31:00.001-08:00

Ras al Khaimah Ceramics, the world's largest ceramic tile company, expects to boost its revenue by up to 15 per cent over the next two years after slashing its debt by a quarter.

The company, which is based in Ras al Khaimah and has operations in Bangladesh, Iran, China, Sudan and India, has a global production capacity of 117 million square metres of tiles per year. It is selling 105 million square metres at present.

"We have adequate capacity to meet our sales [targets] and to grow revenues within the existing capacity by between 10 or 15 per cent," said Manish Joshi, the chief financial officer at RAK Ceramics. He added that emerging markets, which offer large returns on investment, were the main targets for growth.

He singled out India and Bangladesh as having "large" market growth potential for sales of tiles.

"There's a lot of sustenance from the emerging market. If India's tile consumption reaches half of China, it means the India market will grow by 770 million square metres," said Mr Joshi.

This equates to more than double India's present consumption rate of 350 million square metres per year. About three out of every four tiles laid in India come from RAK Ceramics, according to the company. Housing demand in India and Bangladesh is also expected to fuel demand for ceramic tiles and sanitaryware, which includes toilet bowls and sinks.

RAK Ceramics supplies up to 75 per cent of Indian domestic demand for sanitaryware and 25 per cent of demand for ceramic tiles in Bangladesh.

Khater Massaad, the chief executive of the company, said in September that it planned an initial public offering (IPO) of its India subsidiary this year. He did not disclose the size of the issue.

This follows the US$250 million (Dh918.22m) IPO of its Bangladesh unit last May, which was 15 times oversubscribed and the first book-building IPO in the history of the Bangladesh stock market.

The company has cut its debt by more than Dh550m, 25 per cent in the past two years, making it less debt-dependent and freeing cash to expand existing operations around the world.

"The company is generating cash, and because it has sufficient capacity, it is using its funds to pay debt," said Mr Joshi.

"This gives us a position to grow our operations without external means," he added.

RAK Ceramic's share price has more than doubled in the past year to Dh2.55, but it is still trading at a substantial discount, traders said.

Fadi al Said, a manager at ING's MENA fund, which has a 1.1 per cent stake in RAK Ceramics, said the possibility of selling non-core assets and handing out a cash dividend was not "out of the question".

Separately, RAK Minerals, a unit of RAK Ceramics that owns a coal business in Indonesia, is expected to reap rewards for the company.

About 500 million tonnes of coal was thought to be in the coal mine, but exploration unearthed nearly 2 billion tons, "far exceeding expectations", said Mr Joshi.

"It's an interesting asset because of the amount of coal that has been identified," he said.

He would not be drawn on speculation that the asset would be sold or on how much a sale could raise. People close to the situation estimated a sale could raise as much as $100m.

Ras Al Khaimah Land Department signs agreement with Empost for delivery of documents

2011-01-04T05:30:00.001-08:00

The Land Department of Ras Al Khaimah and Empost today signed an agreement to ensure prompt delivery of documents from the Land Department to customers in the UAE within 48 hours

The agreement was signed by Mr. Sultan Al Midfa, CEO of Empost and Mr Sultan Abu Laila, Director General of the Land Department of Ras Al Khaimah.

Under this agreement, customers can be assured of a safe and speedy delivery of their Land Department documents through Empost's "Tawseel" service by purchasing a Dh 20 sticker which will have transaction and customer details, including the address, to facilitate easy delivery.

"This agreement with the Land Department in Ras Al Khaimah is part of our ongoing efforts to widen our customer base," commented Mr. Al Midfa. "We remain focused on elevating the standard of our services and introduce new value-additions and innovations in keeping with the developments taking place in various sectors and industry segments."

"The Ras Al Khaimah Land Department is the first local government department in Ras Al Khaimah to sign a partnership agreement with Empost," said Sultan Abu Laila. "This agreement will enable our customers to save time and effort, as there is no need to visit the Land Department. Also, the Department will not need to allocate separate staff for handling deliveries."

Mohamed Hussein Fahmy, Acting Director, Office of Organizational Excellence, RAK Land Department, said the department's services to customers exceeded 32,000 in 2010. The department also provides services to about 20,000 traders. This means that with this agreement with Empost, these traders will not visit the department and thus help raise the level of customer satisfaction and human resources.

Wafaa Youssef Al Bazzi, quality coordinator at the Land Department, said the first stage of this agreement will focus on providing services to customers within the country, as there is a large customer base in Abu Dhabi and other emirates. In the second phase, it will cover services to customers in GCC countries, especially Kuwait and Saudi Arabia, in addition to customers in countries of Europe, Asia and Africa.

Beside this agreement with the RAK Land Department, Empost has signed similar agreements with several federal and local departments, for delivery of important documents. In addition, Empost has also signed agreements with different diplomatic missions in the UAE to manage the delivery of passports and documents under the Jawaz service.

UAE rents to decline further this year

2011-01-03T02:29:00.001-08:00

Rents in Abu Dhabi will soften further this year even though demand exceeds supply. However, analysts acknowledge that the Abu Dhabi rental market is undergoing a similar transition to a tenant-driven one.

"We would expect to see further declines for the residential market in 2011," said Simon Gray, head of property broker Chesterton International.

"The market cannot sustain the current rental levels, with many occupiers looking at options further away from the city centre to satisfy their budget," he added.

In Dubai, the rental market is not expected to recover this year. There is still huge uncertainty among landlords and property owners about what new supply coming on the market will do to the sector. John Davis, the regional CEO at Colliers International, does not see any turnaround on the leasing side anytime soon.

Sharjah's landlords have tried to stanch the outflow to other emirates, mainly Dubai, by cutting their rentals, but inherent hurdles such as power outages during the summer, the rise in utility costs and the regular traffic snarls into and out of the emirate during peak hours are taking a toll on residents' patience.

Changing landscape of property in Dubai

2011-01-03T02:28:00.001-08:00

Buyers from places as diverse as Nigeria, Malaysia and Singapore are playing an increasingly important role in Dubai's residential market.

Foreign sales are still dominated by India and the UK, but the signs of growth are coming from countries that, in many cases, were barely on the radar two years ago.

Nigerians purchased Dh117 million (US$31.85m) worth of Dubai property in the first eight months of last year, compared with Dh34m for the same period in 2008, according to sales data tracked by REIDIN.com.

For example, Nigerians still make up less than 0.25 per cent of the market. But the growth has attracted the attention of at least one developer. Tameer Holding, which is marketing apartments in Dubai Marina's 107-storey Princess Tower, the world's tallest residential tower, has identified Nigeria, along with China and Russia, as key target markets.

"Tameer has received several inquiries from [Nigerian] customers interested in investing in the UAE," a company spokesman says. "It looks appropriate to establish some points of contact and drive the business to new markets."

Overall, Dubai posted Dh48.3 billion in sales for the first eight months of last year, the most recent period for which data are available, compared with Dh56.6bn in the same period in 2008 and Dh36.2bn in the first eight months of 2009, according to REIDIN's data, which uses transactions registered with the Dubai Land Department. In some cases there might be a lag between the time of the sale and when it is registered, but the data are still useful for spotting market trends.

For analysis purposes, it is best to throw out 2009, which was something of a black hole for the global property market. "2009 was very subdued," said Saurabh Sharma, the research and data manager for REIDIN.com's Dubai office. But 2008 includes some sales from 2007, making it a natural point of comparison for the current market.

From 2008 to last year, there has been little change in the numbers from many of Dubai's traditional foreign markets, the data indicate.

Indians continue to be the largest non-UAE purchasing bloc, buying Dh9bn worth of property in the first eight months of last year, representing 19 per cent of sales, REIDIN's numbers show. In 2008 Indians bought Dh6bn of property, accounting for 10.6 per cent of purchases.

UK citizens, the second-largest group of buyers, acquired Dh5.6bn worth of Dubai property in 2008 and Dh5.5bn last year, representing 11.5 per cent of sales. Among the top purchasers, Iran was the only large segment to post growth, jumping from Dh2.8bn in sales in 2008 to Dh4.2bn last year.

Since 1973, Indians have purchased Dh31bn of Dubai property compared with Dh25bn by UK buyers, Dh14bn by Pakistanis and Dh13.8bn by Iranians, according to the REIDIN data.

Among other segments popular with development marketers, there were few major changes. Ireland accounted for Dh570m in sales in the first eight months of last year, compared with Dh534m in 2008. Russians purchased Dh800m of property in 2008 and Dh726m last year, according to the data.

There was little change among GCC countries. The volume of purchases from Saudi Arabia declined, from Dh1.5bn in 2008, representing 2.8 per cent of sales, to Dh964m last year, representing only 1.9 per cent of sales. Qataris bought Dh102m in 2008 and Dh126m last year.

The most dramatic drop was among UAE buyers. Nationals accounted for almost 40 per cent of sales in 2008, with about Dh22bn in purchases, but only Dh10bn in sales in the first eight months of last year, representing 20 per cent of sales, REIDIN's data showed.

"The people in the UAE are not that focused on real estate as an investment class now," Mr Sharma said. "They are diversifying."

REIDIN's numbers on the market's biggest buyers are generally supported by data for the third quarter compiled by the local office of the property agency Better Homes.

Dubai property market drawing tenants from other emirates

2011-01-03T02:27:00.000-08:00

Developers of all those residential high-rise projects on Shaikh Zayed Road hurtling towards completion have an eye out for potential tenants in Dubai and Sharjah... and from Abu Dhabi.

The lifeline provided to Dubai's rental market by those working in the capital yet preferring to live here is still very much there. And the great migration continues.

"People are moving around the emirates, particularly those from Sharjah to Dubai and out of Abu Dhabi to Dubai Marina," said Jonathan Fothergill at Cluttons Middle East. Apart from Dubai Marina, the JLT cluster is another out to attract white-collar workers from Abu Dhabi.

Given Dubai's looming residential oversupply, landlords are not going to be very concerned about where their tenants are coming from. As long as they keep coming, they are out to make the best of what they can deal with.

In fact, Abu Dhabi developers may be aiding the cause of their counterparts in Dubai. The projected supply of new stock that was expected to come out during 2010 in the capital did not materialise.

"The slowing down and cancellation of projects have [affected] the timing of new stock additions," Fothergill added.

Overall supply

According to Chesterton International estimates, the overall supply in Abu Dhabi will be between 3,000 to 4,000 units, which are inclusive of the non-freehold locations in the city.

"This is way below the demand levels which are estimated to be circa 30,000 per annum," said Simon Gray, the regional head at the firm.

Going forward, the Reem Island development will be central to Abu Dhabi's residential market playing catch up on supply.

The Marina Square with its 4,500 units will be ready as will some of the other high-rises on the Island. Together, these will add around 10,000 units, according to Chesterton International.

According to Chesterton International, of the original eight elements in Al Raha Beach, only Al Bandar has been handed over so far. Al Zeina has been delayed, but is expected to be ready shortly. So will the Al Khubeira and Al Munenra elements of Khor Al Raha.

"We are unaware of the current position of the remainder of Al Raha Beach although there may be plans to re-strategise this in line with current market conditions," Gray said.

"The major constraint in the pace of development relate to available finance, as many schemes have slowed as available cashflow dries up. This will indeed constitute a sizeable component of the deliveries in 2011," he said.

"There is a dearth of project finance available from banks to assist in the construction phase. We have also noted that some delays have been caused by issues relating to connection of services, receipt of completion certificates and municipality approval for handover."

Costly transition

Meanwhile, rentals in Abu Dhabi city are likely to take another hit this year, confirming the market's transition to a tenant-driven one. But the fact that not enough supplies are flowing out of the completed pipeline is slowing down such a transition.

"We would expect to see further declines for the residential market in 2011. However this is likely to be tempered by a lack of supply in the market as a whole," Gray said.

"The market cannot sustain the current rental levels, with many occupiers looking at options further away from the city centre to satisfy their budget."

Even if rentals are down from the peaks, there are newer costs crimping an Abu Dhabi residents' budget. For one, there are the fairly high parking charges which have been in effect for some months now. With residents looking to alternatives this has set alarm bells ringing at the older buildings. Their owners have reacted by slashing rentals. The writing on the wall should be clear for Abu Dhabi's landlords — drop their rents to what's realistic. Yet there are still the holdouts.

"Most landlords still have 2008-09 expectations in terms of pricing, and in most the property built exceeds market affordability," said a Better Homes spokesperson, who added the firm has seen an increase in leasing activity in the city in the last quarter.

"Tenants are still looking to upgrade their lifestyles by moving into the newer developments with more facilities at better rental rates. However, the challenge is that we do not have suitable property matches for them with affordable rates."

The mismatch between demand and expectations looks set to continue for a while.

Abu Dhabi In Abu Dhabi's commercial space too, there seems to be a disconnect between tenant expectations and what developers are putting out.

"There is a lot of office space with large floor plates. However, current demand is for smaller office spaces as companies restructure and are more hesitant to take larger spaces," said Simon Gray of Chesterton International. Which is why "commercial office space is as affected as there is more supply than demand," he added.

"Landlords are reluctant to divide the spaces up as they prefer to cater to single clients on whole floors. We would say that as with most things in 2011, the key has been the budget, with many companies having to reduce their current office space requirement," he added.

"This has been suppressed to some extent by incoming SMEs to Abu Dhabi which is now seeing an increase. The government at present [is] looking to target SMEs and encourage them to locate in Abu Dhabi. This would be the key cornerstones for diversification of the economy within the city," Gray said. "There is unlikely to [be] major government moves due to the future plans for the Capital City District which will house all federal and emirate's government offices. It is unlikely that any of the government departments will move although some may relocate to increase efficiency."

Ras Al Khaimah eyes investment from India

2010-12-15T05:39:00.000-08:00

The Free Trade Zone in Ras Al Khaimah (RAK FTZ) is eyeing investment from India Inc in its attempt to become the most sought-after business destination in United Arab Emirates. The trade zone was set up 10 years ago.

Giving stiff competition to neighboring emirates like Dubai, Sharjah and Abu Dhabi, RAK FTZ offers advantages like cheaper cost of living, better infrastructure, state-of-the-art business centres , availability of trained work force and tax-free environment for companies, especially SMEs.

Talking to an Indian media delegation to Ras Al Khaimah, Sheikh Faisal bin Saqr Al Qasimi, chairman of RAK FTZ, said, "India is a mass market and we want to be a part of the development process of the country. Our ties with Indian companies have grown manifold in the last 10 years due to our focus on the mass segment. We are building a network of financial institutions to cater to Indian firms."

Appealing to Indian firms to invest in the tourism sector, he said, "We have sand, sea and mountains, besides an excellent law and order situation. We want to tell business leaders that they are safe here. We are setting up a tourism board for promotion . RAK Airways plans to strengthen its operation in India to tap the growing traffic. We are also planning to pump in about AED 730 million in the aviation sector and want to create a maintenance and repair hub in RAK FTZ," he added.

According to Christopher Tomseth, director (sales and marketing), RAK FTZ, "around 7,000 companies have been given licences for operating from RAK FTZ so far, of which more than 1,900 are from India. We hope that 10,000 companies will operate from RAK FTZ by the year-end ."

Indian firms are operating in the academic, commercial , industrial, consulting and general trading sectors. "We are now targeting SMEs, because it would be easier for them to tap the global market once they start operations here. At least six universities from countries like France, India and the UK, have signed up to open educational institutions ," he said.

Source: TOI

Indian households' savings to touch $5bn by 2020

2010-11-13T23:33:00.001-08:00

India may takeover the US in terms of households savings by 2020, touching the USD 5 trillion mark, as the growing economy would boost incomes of people, a study has said. "The household savings rate of 33.4 per cent would translate into incremental savings of USD 5 trillion over the next decade with growing incomes of Indian households," Assocham President Swati A Piramal said in a statement.

Currently, the size of Indian household savings is over USD 330 billion, according to a study jointly done by Assocham and PricehWaterhouse Coopers. Indian households have traditionally preferred safety of bank deposits and government saving schemes.

Less than 10 per cent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies, Piramal said. "Given the quantum of savings, the need to mobilise savings into productive channels and the opportunity for financial intermediation, the next decade will be an opportunity of a lifetime for Indian capital markets," the study said.

It said, currently, Indian economy''s size is about USD 1 trillion with the savings rate of Indian households of 33.4 per cent, which is expected to grow further at an average rate of 8 per cent annually. Concerted efforts of the government and the regulators supported by a long-term vision and a clarity in action can significantly help in fostering a climate that is conducive to growth and investments, Piramal said.

Shah Rukh Khan hunting for plot in lion's den?

2010-11-13T23:29:00.000-08:00

After Sachin Tendulkar inked a property deal in a 700-acre golf course in Ahmedabad, it is now the turn of Bollywood star Shah Rukh Khan, who is said to be looking for land in the home of Asiatic lion in Gir.

Sources said Shah Rukh Khan and television producer Ekta Kapoor have already made inquiries for land on the outskirts of the protected Gir sanctuary, which is the only home for Asiatic lion in the world. Khan, say local sources, has shown interest in a plot located between Haripur and Jalandhar villages on the outskirts of the Gir forest in Junagadh district.

Earlier this month, Tendulkar had invested in a property in the Kensville Golf and Country Club near Ahmedabad.

GD Gajera, talati-cum-mantri of Jalandhar village, which is near the Devaliya Interpretation Zone for Asiatic lions, told TOI, "We too have learnt that there are some negotiations going on between locals and estate brokers. But the deal is yet to be clinched".

Sources said a farmer in Haripur had decided to sell off his land to the star. According to sources, Khan's office in Mumbai was still to clarify for what purpose he wanted the land. It is believed to be for a farmhouse. The film star's office was in contact with local estate brokers, who are expected to be in Junagadh on Saturday to get land records.

Officials said the only condition the buyer party has put forth is that the farmhouse has to be in the vicinity of the national park. When contacted, Haripur sarpanch Ramnikbhai Naranyanbhai said, "We have heard that Khan and Kapoor are looking for land near Sasan". He said Khan's office had probably zeroed in on a plot near Hiran river which passes through Gir forest. The owner of the land is a Gujarati based in Mumbai.

When contacted, Sandeep Kumar, deputy conservator of forest (headquarters), said, "We don't have any knowledge about this".

Changes in taxation of income from house property

2010-07-30T00:05:00.000-07:00

The proposed Direct Tax Code contains many provisions that aim to change the mode of taxation of 'income from house property' . In order to simplify the determination of taxable income and eliminate any scope for litigation, the code will have a new scheme for computation of 'income from house property' .

According to the code, 'income from house property' will be computed in the hands of the owner. Even if the property is let out for business etc, it will be taxable only under the same head. Under the present provisions of the Income Tax Act, letting out an inseparable building along with plant and machinery is taxable under 'business income' or 'other sources'.

However , according to the new code, it will be taxable under the head 'income from house property' . In case the property is owned by more than one owner and if the share of each company owner is definite and ascertainable, it will be computed separately for each co-owner . The property will not be taxable under this head of income if it is used for own business or profession, or if it is not ready for use.

The gross rent minus deductions specified in Section 26 will be the 'income from house property' . The computation of gross rent is outlined in Section 25 of the code. Gross rent is the higher of contractual rent and presumptive rent. If the property is acquired during the financial year, the presumptive rent will be also calculated on a proportionate basis. Either contractual rent or presumptive rent for the financial year, whichever is higher, will represent the gross rent. The concept of 'annual letting value' under the Income Tax Act has been given up. Contractual rent is the rent receivable under a contract. It can even be an oral contract. Presumptive rent will be six percent of the rateable value fixed by the municipality or the cost of construction/acquisition of the property, if the municipality does not fix the rateable value.

Section 26 provides for deduction from the gross rent. These include property taxes paid during the previous year, service tax on rent paid during the previous year, 20% of gross rent towards repair and maintenance, interest on capital borrowed for purchase /construction /repairs. In case of a self-occupied property, the gross rent will be taken as nil. The aggregate of deductions specified in Section 26 will be nil for such houses. The deduction of interest on capital borrowed which is currently available for a self-occupied property will not be available under the new code. In case an assessee has more than one house for self-occupation , the benefit of nil gross rent will apply only for one self-occupied house at the option of the assessee. The computation of remaining houses will be made as if the properties are let out.

Delhi top destination for end users looking to purchase flats

2010-07-17T08:31:00.000-07:00

Delhi is the most popular place to buy a property, according to a survey. The report reveals that 34% of those surveyed want to purchase a flat in Delhi, followed by 28% plugging for Mumbai and 11% each opting for Bangalore and Hyderabad. The survey also reveals that the realty sector in 2010 is going to be driven by end users.

Due to the recession and fluctuating property prices, property seekers shied away from making a property purchase last year - but with an improving economy and slightly stable property prices, end users are ready to jump into the market this year. Most of the buyers who are interested in buying a house this year want it for their personal use with 67% of those surveyed citing this reason. Some 23% are looking for property as a long-term investment while 10% are looking at it through the prism of a short-term investment.

The survey has also found that the cost of buying a property is marginally higher now due to the hike in prices of construction material, taxes and rising interest rates. Cement and steel prices are increasing and this is likely to be passed on directly by developers to the customers while a 10% service tax on purchase of apartments will make buying more costly, according to the Confederation of Real Estate Developers Association of India (CREDAI).

Recently, the State Bank of India, one of the leading players in the housing finance market, raised interest rates on home loans. Although the bank will continue with its 8% teaser rate for the first year, it has increased rates for subsequent years. "There is a strong possibility of price hike as factors like service tax and rise of input prices will be passed on to the end users," Raj Menda of CREDAI said.

The real estate sector had been hit by the recession due to falling demand and repayment pressures. However, the sector is now looking up with some tangible signs of economic revival. "Roughly, as of now, real estate developers are saddled with 6% of unsold properties. In commercial property, there is an oversupply, which is expected to be absorbed in the next two years," Menda added.

Banks are still cautious about providing housing loan to consumers and asking for higher collaterals for lending to real estate developers. But several property deals are being cancelled due to the additional costs being levied by developers, according to Yashwant Dalal, president of the Estate Agents Association of India. He explained that many developers have decided to collect service tax, which adds up to nearly 4% of the price at the time of handing over.

During the pre-global downturn property boom, many investors bought flats anticipating that the rates would go up further and just paid the builder the value of the flat, he explained. "The agreement at that time did not mention anything about the service tax or the value added tax.

Investment News India, July 2010

Realty prices may go up as govt refuses to remove service tax

2010-07-06T05:17:00.001-07:00

Real estate prices may go up with a plea of Urban Development Ministry for withdrawal of 2.5 per cent service tax from the sector not being heeded to by the Finance Ministry.

The Budget for 2010-11 proposed a service tax of 2.5 per cent on all under-construction projects in the real estate sector. The Urban Development Ministry, however, wanted to get the tax revoked on the plea that the sector was still to recover from the economic slowdown which it witnessed two years ago.

Urban Development Minister S Jaipal Reddy had on April 15 met Finance Minister Pranab Mukherjee and sought the removal of the service tax.

In the meeting, Reddy had said that the sector was going through a difficult phase and the service tax could hurt its interests as also that of the middle class families.

Sources in the Urban Development Ministry said that the proposal has not been accepted as the ground situation in the sector had changed since the request was first made.

"It has been observed that in the last four months or so there has been an upswing in the realty sector and it has overcome recession successfully," an official said.

The service tax of 2.5 per cent on the actual sale value will be imposed on all under-construction projects from this month.

As the developers are not expected to absorb the new tax, they would pass it on to the consumers leading to an increase in costs of apartments all over the country, which would hurt the consumers directly, the sources said.

4.5 acres of land in Mumbai's Mulund suburb sold for Rs 200 cr

2010-07-06T05:16:00.000-07:00

Kalpataru Builders has purchased 4.5 acres of land in a busy Mulund area for close to Rs 200 crore in one of the biggest real estate deals in the suburbs here, a source said.

"Kalpataru builders has signed an agreement to buy 4.5 acres of land in Mulund that belongs to Schrader Duncan Ltd, a leading manufacturer of tyre tube valves and accessories," the source close to development said.

The total land area is a little over 1.5 lakh square feet with a floor space index (FSI) of 2, the source said.

Kalpataru Builders, however, did not reply to e-mail queries seeking confirmation of the deal.

The land owner, Schrader Duncan Ltd, had shifted its automotive plant from Mulund to Ranjangaon, in Pune, in 2009, where commercial production has already started.

Before that, the company had shifted its pneumatic division from Mulund to Mhape, in Navi Mumbai.

According to a filing to the BSE, the company had sold 2 acres of land at the backside of the property for Rs 28 crore in December, 2006, to fund its new plant.

Schrader Duncan is a joint Venture between Delhi-based Industrialist J P Goenka and Schrader Bridgeport International Inc, USA, which is a subsidiary of global engineering and manufacturing group, Tomkins PLC, UK.

Investment News India, July 2010

Property Tax in New Delhi to go up this year

2010-06-28T00:08:00.001-07:00

It’s taxing time for property owners. Since the rate of tax for different categories has been revised, Delhiites will have to pay more from this financial year. However, no major amendments have been made in the property tax forms, according to senior MCD officials.

With June 30 being the last date to avail the 15% rebate on property tax, people can pay tax either online or submit their forms in the 12 MCD zonal offices.

As per the revised rates, colonies falling under category A and B will now have pay 12% property tax. The categories from C to H will see a rise of 1% from the previous rate — 10% to 11% for categories C and E and from 6% to 7% for properties under category F to H.
For commercial properties like multiplexes, big shops, etc, there has been an increase of 10%. The property tax rate for multiplexes , petrol pumps etc has been increased from 10% to 20%. The rate for commercial properties falling under A and B categories has been increased from 10% to 15% and from 10% to 12% for categories C to E. There is no change in the tax rate for categories F, G and H.

Press and information director , Deep Mathur, said: ‘‘ We have not created any new categories in the property tax forms. It is more or less the same like before. The only change is that we have added a section called the special commercial category under which multiplexes , petrol pumps, etc need to pay more tax. Under this section there is also the general commercial category which includes power distribution companies, etc.’’

For online payments, a person will have to first visit MCD’s property tax website — www.mcdpropertytax .in. If you have an old property reference ID, you will have to enter it and details of the earlier forms filled by you will be made available. A new online user will have to fill up all relevant information before they get a reference ID.

An MCD official said: ‘‘ You can pay by cash, card or cheque. We have tied up with HDFC Bank and Axis Bank for this purpose.’’ According to MCD, the number of people making use of the online system of property tax payment is more thandouble from last year.Added an official : ‘‘ Around 2,000 people were using of the online system at any point of time in a day till last year, this year the number has gone up to 5,000.’’

Mathur said: ‘‘ Forms can also be submitted at zonal offices after filling them up manually. Only up to Rs 5,000 will be accepted in cash payment.’’

Meanwhile, with recommendations of the municipal valuation committee underway , these recommendations may or may not be applicable from this financial year. Mathur said: ‘‘ If recommendations made by the municipal valuation committee are accepted this year, decision regarding applicability within the same financial year will be taken in consultation with the law department.’’

For online payment, you will first have to fill out a self-assessment property return form. Payment can be made through credit card, cheque or cash Online payment can also be made through ITZ cash centres using an ITZ cash card or cash payment. An ITZ card is a prepaid card like a Delhi Metro card For online payment, you will first have to visit the website www.mcdpropertytax.in. If you have an old property reference ID, enter it in and details of your earlier form will be made available If you are a new user, you will have to fill up all relevant information before you get a reference ID After filling up the relevant details, choose your mode of payment For receipt, click on receipt, enter your property reference ID and financial year & take a printout Forms can also be submitted at zonal offices after filling them out manually. Only payment of up to Rs 5,000 will be accepted in cash.

1. This year, changes have been made in the rate of taxes to be paid for commercial and residential properties. More sections have been added to the commercial category

2. Additional rebate of 90% instead of 40% earlier — on lump sum payment — will be given to govt and autonomous body-aided schools if they pay up by June 30 For all residential and commercial property owners who pay by June 30, a rebate of 15% will be given

Armani Signature Suite, Burj Khalifa

2010-06-22T23:21:00.000-07:00

A tour of one of the premium suites in the Armani Hotel, Dubai reveals a minimalistic contemporary design from Giorgio Armani himself. Phil Blizzard is amazed by the size of the suite, its hidden corridors, sliding wall panels and the finer points of this ultra luxury suite.

1-BHK flats in Mumbai's old Khar society sold for Rs 4.5 crore

2010-06-22T02:44:00.000-07:00

In a bonanza for residents of a Khar housing society, a builder has been buying off their mid-sized flats, paying each family between Rs 4 crore and Rs 5.5 crore.

Mumbai-based Parinee Developers claims to have shelled out between Rs 4 crore to Rs 4.5 crore for a one-BHK flat and Rs 5 crore to Rs 5.5 crore for a twoand-a-half-BHK in the three-decade-old Bharatiya Bhavan Cooperative Housing Society, which is located at the corner of 17th Road in Khar (west). Parinee plans to demolish the buildings and set up a high-end residential tower.

However, there is a word of caution from real estate experts. They warn these huge amounts may send wrong signals in the redevelopment market, unnecessarily create hype and raise expectations of other housing societies in the area. However, Parinee said it is paying this astronomical price only because the society has utilised barely 40% of its floor space index (FSI).

The developer has already bought out 20 of the 37 flats in the society and said it is negotiating with the remaining flat owners. “We are finalising the purchase of the remaining 17 flats. Our acquisition cost for all the flats is around Rs 200 crore,’’ said a spokesperson for the developer.

The society comprising six buildings, each ground plus two floors, is spread over an area of 5,570 square yards (over an acre) with ample open spaces and car parking. The one-BHKs have a carpet area of between 580 to 625 sq ft while the two BHKs are between 800 to 900 sq ft in size.

Tip from expert: Don’t be greedy

The Bharatiya Bhavan CGHS in Khar (West) has been on the block for the past four years. In 2007, TOI was the first to report that the society had invited sealed bids from various developers and that a Navi Mumbai-based builder, APA, had offered Rs 180 crore to the society. There were several other leading builders in the fray, including Tata Housing, Wadhwa Group, Naman Developers and Acme.

However, the builder subsequently withdrew the offer due to recession and also because of infighting between two groups of flat owners. Some residents thought that APA’s offer was not enough. The fight culminated in a legal battle — Parinee Developer now claims it has helped resolve the issue between the two groups.

In 2006-07 , a slew of housing societies in the suburbs had received phenomenal offers from developers if they agreed to redevelop their properties. While some builders wanted flat owners to move out permanently by paying them off handsomely, others agreed to rehouse them in new and larger flats in the redeveloped property.

However, many of these deals failed to take off because either residents became too greedy and kept on demanding more from the developers or the builders themselves backtracked when the property market slowed down two years ago. Sprawling housing colonies like Nutan Nagar near the Bandra (W) station and Khira Nagar in Santa Cruz got stuck after getting offers running into hundreds of crores. In 2007, Khira Nagar housing society entered into agreement with the Pune-based Kumar Developers for a reported Rs 900 crore for the 640 flats in 16 buildings. But the project never took off.

Last April, TOI reported about how a developer left residents of Sangam housing society (Santa Cruz) high and dry after entering into an agreement with them. After demolishing their building, the developer suddenly turned around and asked the residents to accept only 10% additional space in the reconstructed property as against the 26% extra space signed in the agreement . The residents and developer are believed to have reached an amicable solution recently.

A real estate expert has a word of advice for housing society residents, “Don’t get greedy. Stick to only prominent developers who have delivered in the past.” The expert further said some unknown builders in the past had offered astronomical prices to housing societies, even outbidding the big guns in the industry. These shady builders are just fronts for some politicians who want to roll their black money in real estate. Housing societies should stay miles away from such builders, he warned.

Delhi and Mumbai have best living standards: Survey

2010-06-17T00:48:00.000-07:00

Delhi and Mumbai have the best living standards in the country while Orissa's Rayagada and Kandhamal districts are the worst, a survey said.

According to the survey by the Tata Strategic Management Group, central Delhi ranked first followed by New Delhi and North Delhi districts.

The fourth and fifth spots, according to the survey, were Mumbai and Mumbai suburban.

The worst living standard was in Orissa's Rayagada and Kandhamal district, followed by Banka district in Bihar.

Tata Strategic Management Group today released the report after analysing the National Sample Survey Organisation household surveys and Census 2001 data to generate the Well Being Index.

Delhi and Mumbai occupied the first five slots in the index measured on eight criteria--education, hygiene, entertainment, communication, healthcare, transportation, home amenities and kitchen facilities.

In home amenities, North and Central Delhi were at pole position followed by South and New Delhi while East Kameng in Arunachal Pradesh and Banka in Bihar were bottom-placed.

Kitchen facilities were found to be the best in East district in Delhi and Dimapur in Nagaland, followed by North and Central districts in Delhi. Sonapur and Nuapada districts in Orissa occupied the bottom positions.

India invested over $26 billion and created 60,000 jobs in US

2010-06-16T23:49:00.000-07:00

India has invested over $26.6 billion in the US over the last five years thereby creating about 60,000 jobs, even as the country remained the third largest investor in the US, says a new study.

The investments included 372 acquisitions worth a total $21 billion by 239 Indian companies and 127 fresh investments worth $5.5 billion between 2004 and 2009, the report, `How America benefits from economic engagement with India,' released yesterday by Congressman Jim McDermott, said.

The 127 greenfield investments alone created 16,576 jobs in the US, according to the study.

The report is based on a joint study by the University of Maryland, India-US World Affairs Institute and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Minnesota, Virginia and Texas emerged the top three destinations for green field investments while Ohio, Texas, and California were the top three states in terms of jobs created, the report said.

Bulk of the Indian investments were in the mining, manufacturing and other industries, while the software and IT services sector, received less than 15 per cent of the total investment, the report noted.

The five sectors - metals, software and IT services, leisure and entertainment, industrial machinery, equipment and tools and financial services - accounted for almost 80 per cent of total Indian greenfield investment in the US, the report said.

Georgia, New Jersey, Michigan, California, and Texas were the five states that accounted for most of Indian investments (almost 75 per cent) through mergers and acquisitions (M&A) by Indian companies.

Manufacturing, IT & IT enabled services, biotech, chemicals and pharmaceuticals, automotive and telecom sectors accounted for 83 per cent of the total M&A investments.

In fact, the value of Indian acquisitions in the US, which fell in 2008, rose in 2009 amidst the worldwide recession, the study noted.

The study comes in the wake of US President Barack Obama's plans to end tax incentives to US companies that outsource jobs and instead give incentives to those creating jobs inside the US.

Changes in a Cheque are not allowed anymore

2010-06-15T06:32:00.000-07:00

A very common thing that people do is that they edit or alter the cheques that they have issued to companies or individuals. The general practice is that if someone has made a mistake with the signature or date, they simply change it and then mark a signature right besides the mistake to declare that they are/were aware of the mistake and to approve the correction on that mistake, they have signed beside the correction.

As per RBI Circular – DPSS.CO.CHD.No. 1832/01.07.05/2009-10 dated February 22, 2010 with effect from July 01, 2010 no alterations in cheque will be allowed (even if signature is made at the place of alteration). This kinds of altered cheques will not be honored by Bank.

According to the RBI guidelines:

1. You cannot alter the amount or the payee name while issuing a cheque.

2. Cheques with such corrections will no longer be honored effective July 01, 2010.

Solution: Simple, reissue the cheque

Lodha to gift Mumbai world's tallest homes

2010-06-04T03:52:00.001-07:00

Lodha Developers, one of India’s biggest realtors, is taking a tall bet on Mumbai’s top-end residential property market as home prices continue to surge in the country’s financial capital. The company is negotiating with foreign as well as local financiers to fund what it claims would be the world’s tallest residential tower.

The Lodhas are learnt to have tapped leading Singapore funds GIC and Temasek, and a property fund of mortgage giant HDFC for over Rs 1,000 crore, said a banker.

According to sources in the Mumbai property market, the tower will come up on the 17.5-acre plot of the defunct Shrinivas Mill in Lower Parel, central Mumbai, that the Lodhas got control of after purchasing the shares of Shrinivas Cotton—which owned the land title— some years ago.

When contacted, Abhishek Lodha, managing director of Lodha Developers, confirmed that the company would build the world’s tallest tower in Mumbai, but refused to share further details. The Lodha group is scheduled to make an announcement on the project next week.

But the realty market has got a whiff of the project. “What we understand is that the tower may have 117 floors, and the company is talking to a famous name in the fashion world for the design... A project of this scale will take not less than three years to complete. It should have air evacuation facility and proper fire escape routes. As far as I know, the layout has been approved by state government authorities,” said a senior official of a leading property brokerage. “We don’t know when the booking will start, but the price should be around Rs 22,000 per sq ft,” he said.

The height of the world’s tallest residential tower—Queensland Number One in Australia—is 322.5 metres. While construction on some of the grand projects has been put on hold in the West following the market downturn, there’s some activity on in the Middle-East. Pentominium, the supertall skyscraper that’s under construction in Dubai, will be 516 metres with 120 floors.

The Lodhas are hiring the services of New York-based architect Pei Cobb Freed and Partners, which has completed nearly 200 architectural marvels across the globe, including Louvre Pyramid in Paris, Bank of China Tower in Hong Kong, and John Hancock Tower in Boston.

The group was recently in the news for having bagged a 22.5-acre property in Mumbai after bidding Rs 4,050 crore in the country’s biggest land deal.

Circle rates for properties set to increase in Delhi

2010-06-01T04:16:00.000-07:00

After increasing the registration fee for properties and road tax for luxury cars, the Delhi cabinet is set to give its nod to a proposal to hike circle rates for sale and purchase of properties in the capital June 7.

The state government has decided to revise the circle rates, introduced in 2007, in a bid to earn additional revenue, an official source said.

The circle rate is the minimum rate for valuation of land for residential use that differs for various categories of colonies.

There are eight categories for colonies in the capital -- A, B, C, D, E, F, G and H.

The minimum rate for valuation of land for residential use is Rs.43,000 per sq metre for category A, while it is Rs.34,100 per sq m for category B. For Category C, it is Rs.27,300 per sq m; Category D - Rs.21,800 per sq m; Category E - Rs.18,400 per sq m; Category F - Rs.16,100 per sq m; Category G - Rs.13,700 per sq m and Category H - Rs.6,900 per sq m.

"We have decided to revise the circle rates fixed in 2007. It may be put up before the state cabinet next Monday," Delhi Revenue Minister Raj Kumar Chouhan told IANS.

A senior Delhi government official said the hike in the circle rates will be nearly 25 percent, but added that it may differ with categories of colonies.

For instance, in areas like Vasant Vihar, Greater Kailash, Hauz Khas, New Friends Colonies and Defence Colony, the circle rates may even double.

"I cannot discuss on the increase in circle rates before the cabinet meeting, but can say that the exiting rates require revision as they are less than the market price of properties," Chouhan said.

However, an official source said the rates have already been decided by the state revenue ministry.

The Delhi government is facing a financial crunch in the wake of large spending on improvement and beautification of infrastructure in the capital for the Commonwealth Games Oct 3-14.

The government, in a bid to collect around Rs.100 crore, had hiked registration fee for properties in the capital. It had also decided to raise the road tax rates for vehicles to generate additional revenue.

Luxury homes back on buyers’ wish list

2010-06-01T04:14:00.001-07:00

Fancy crore-plus price tags in the real-estate market are back in fashion after almost a year. Not only tier-I locations, such as Mumbai and Bangalore, but tier-II or tier-III cities, such as Ahmedabad and Nagpur, are also witnessing sizeable chunk of niche luxury projects. In the past six months alone, there has been about 20-25% rise in premium residential projects in these locations.

A string of developers, including the Lodhas, Hiranandanis, Prestige, Sobha, Indiabulls and DB Realty, have floated several luxurious schemes in an attempt to cash in on the rise in confidence among investors and end-users. “There is a sudden spurt in the Rs 4.5 crore-plus properties. For instance, about 7,000 fresh residential units are expected to hit the market in central Mumbai (Parel-Prabhadevi-Sewri-Worli) alone,” said Anand Narayanan, national director, Residential Agency, Knight Frank India, a global real-estate consultant.

Similar is the sentiment of Shailesh Sanghvi, director of Mumbai-based Sanghvi Group of Companies. “Recently, there has been a 20-25% rise in luxury projects. More projects will come up in the coming months,” he said. Global slowdown resulted in a dull year, but with resurging demand, customers are “regaining confidence to invest in upmarket luxurious projects,” he said.

However, luxury home prices vary from city to city. If it is Rs 6,000 per sq ft in Hyderabad and Bangalore, the cost is a whopping Rs 30,000 per sq ft in Mumbai. Even in a city like Ahmedabad, there is a sudden upsurge of Rs 1 crore-plus properties. “At present there are at least 15 projects, which are costing Rs 1 crore and above. Investors and HNIs are buying these properties that measure anywhere between 2,600 sq ft and 3,500 sq ft,” said Jaxay Shah, president of Confederation of Real Estate Developers' Associations of India(CREDAI), Gujarat.

“There has been a 10-12% increase of such projects in Mumbai and Delhi NCR,” said Deepak Bhavsar, managing director, strategic consulting, Jones Lang LaSalle Meghraj (JLLM), a real-estate consultant.

Due to high land prices, there is little scope to construct and sell an affordable house at a profit, said Mr Sanghvi. “Another reason is that profit margins in an affordable housing project are lower compared with luxury housing project,” he added.

Delhi property registration fee hiked after 45 years

2010-05-18T23:30:00.001-07:00

Delhi cabinet on Monday gave nod to a proposal to significantly increase the registration fee of property in the city. The revision comes after a gap of 45 years.

Officials said a rationalization was long overdue given the ridiculously low rates of filing of appeals and fee for registering wills, gift deeds etc. The revision is expected to increase revenue collection from Rs 1.5 crore per year to Rs 100 crore.

As per the new rates, fee for registering conveyance deed, sale deed, gift deed etc relating to immovable properties will be 1% of the stated value or the circle rate whichever is higher up to a fee of Rs 50,000. Where the value of the property is not mentioned, the fee will be Rs 1,000. Earlier the fees were just Rs 100 for both categories.

The fee has also been revised from Rs 100 to Rs 1,000 for registration of lease of an immovable property and from Rs 100 to Rs 500 for registration of wills. Miscellaneous registration of documents will now cost Rs 1,000 per document.

Officials said the rock-bottom rates had meant that despite the flurry of registration, government collection was very low. In 1007-08, 291469 documents were registered which generated a revenue of around Rs 1.48 crore. In 2008-09, Rs 1.40 crore was earned from registration of 284203 documents while in 2009-10 the earning from registration of 2,74,466 document was around Rs 1.31 crore.

The most dramatic revision has happened for fee relating to filing of various appeals. In this case, the fee has been revised to Rs 100 from Re 1 in some cases and Rs 10 in others. For inspection or search, the fee now stands at Rs 100 from the earlier Re 1.50.

Copies of registered documents will now come at Rs 10 per page instead of the earlier 25-75 p per page. Attending registrations at private residences in case of the infirm or in jail for the incarcerated will now be charged Rs 500 instead of Rs 10. In all other cases where a Rs 20 fee was charged, now Rs 200 will be charged.

Filing for translation will now cost Rs 50 instead of Rs 2. Authentication of a power of attorney for which fee was Rs 3 earlier, will now cost Rs 1,000. Rs 10 will be charged now instead of Rs 10 for deposit/withdrawal/opening of the will. Safe custody of documents after registration will cost Rs 50 per week instead of Re 1 per week.

Pune Property Rates | Pune Real Estate Trends

2010-05-18T23:27:00.000-07:00

A residential apartment admeasuring 2,800 sq ft, situated in Kalyani Nagar was leased out to a senior executive of a multinational corporation in India for Rs 1,65,000 per month. The apartment, located in a high-end residential building, has commanded a rate that is line with the existing prices in the location.

The prevalent rental values in Kalyani Nagar for high-end residential units range from Rs 1,30,000 to Rs 2,10,000 per month. Kalyani Nagar has traditionally seen high demand from expatriates and senior corporate executives in the city. However, rental values recorded a drop of approximately 3% over the previous year, due to a slowdown in demand for high-end residential units for lease.

The overall economic slowdown and higher rental values had made leasing in these locations less attractive. With economic stability and resurgence of senior executives’ presence in the city, demand for lease of high-end property is on the rise.

Kolkata Property Rates | Kolkata Real Estate Trend

2010-05-18T23:25:00.000-07:00

A high-end apartment in a premium residential complex at EM Bypass was leased by a major Indian company. The 2,400-sq ft, fully furnished apartment commanded a total rental value of Rs 60,000 per month.

The apartment has been refurbished as per the lessees requirements and has been converted from a four-bedroom unit to a three-bedroom unit with larger living space.

The average rental values for high-end residential apartments range from Rs 60,000 to Rs 78,000 in this locality and have seen a 2% increase over the last quarter. This is because of the growing demand from corporates and end-users as an increasing number of corporates start to operate out of the city.

EM Bypass is one of the city’s upcoming residential locations. The location enjoys proximity to the established CBD and SCBD and to the new IT hubs of Salt Lake and New Town Rajarhat, thus making it an ideal location for senior and mid level executives.

Mumbai Property Trend | Mumbai Real Estate Rates

2010-05-18T23:22:00.000-07:00

An apartment spread across an area of 2,600 sq ft, located in Cuffe Parade, Mumbai, was leased out to a senior executive at a reputed corporation for a monthly rental value of Rs 3,10,000. The semi-furnished, three-bedroom apartment, with just falls short of being classified as high–end due to the age of the building, commands moderately lower rate than the average rental values of high-end apartments in the location, which range between Rs 4,75,000–6,00,000 per month.

Cuffe Parade, situated at the southern-most part of Mumbai, has been a highly sought-after residential locality by end-users as well as by corporates. The area is strategically located in proximity to the CBD and has all necessary civic and social infrastructures in the vicinity. The location is also connected to office destinations like Lower Parel and Bandra-Kurla Complex through road and rail networks.

The area also boasts of all the modern amenities. Retail and entertainment, education and healthcare facilities are also easily accessible. Adding to the charm is the proximity to the sea shore

Ras Al Khaimah PEST Analysis

2010-05-13T03:14:00.001-07:00

Ras Al- Khaimah ("the top of the tent") PEST Analysis

Ras Al-Khaimah is one of the United Arab Emirates. It covers an area of 656 square miles (1700 km²). Ras Al Khaimah is in the northern part of the Arabian Peninsula.

Location: located at the north end of the coast of the Arabian Gulf bordering Oman, is one of the seven Emirates that form the United Arab Emirates.
The city has two main sections Old Ras Al Khaimah and Nakheel on either side of the creek which flows through Ras Al Khaimah.
(Source: Wikipedia)

Key Facts and Figures
Population:		250'000
Area:		1'680 square kilometres ( 4^th Largest Emirate)
Coastline:		40 kilometres
Climate:		High temperature and humidity in summer while weather in winter is moderate
Languages:		Arabic and English
Religion:		Islam
Local time:		GMT +4
Currency:		Dirham (AED)
Economic Facts and Figures
GDP	AED 6.96 billion (USD 1.9 billion)
Per Capita GDP	USD 9730
Service sector’s contribution	58%
Exports (2003)	1242 Million AED
Imports (2003)	1172 Million AED

(Source: RAK Tourism report, Global Investment House and HSBC report)

Share in the Economy
Mining, quarrying	18%
Trade	14%
Agriculture	11%
Real Estate	10%
Construction	9%
Transport and communication	9%
Manufacturing	8%

Gross Fixed Capital formation (Source: Global Investment House report)

Political, Economical, Social and Technological Analysis (PEST)

Political
H.H. Sheikh Saqr bin Mohammed Al Qasimi has been the Ruler of Ras Al Khaimah since 1948.
His son, H.H. Sheikh Saud bin Saqr Al Qasimi was appointed Crown Prince and Deputy Ruler in June 2003. Graduate from MIT, USA.

· RAK has an independent judicial system which follows the federal laws of the UAE.

· A stable economic and political environment.

· Flexibility of economic laws and regulations; no restrictions on capital movement , zero taxes and 100% ownership of projects

· RAK free trade zone allows 100% ownership and 100% repatriation of capital.

· Easy business registration process.

· Presence of facilitating industrial base.

· The UAE has one of the most open trade policies within the GCC region with no protective duties and minimal import restrictions.

· UAE has been a WTO member since 1996, giving it access to newer markets and helping removal of the barriers to exports.

(Source: RAK Tourism report, Global Investment House and HSBC report)

Economical

· Economy is not based on Oil but on mining of minerals like limestone, iron, copper and chromium.

· Manufacturing, constructions, hotels, financial institutions and Insurance have grown dramatically reflecting a clear change in policy towards developing the tourism and manufacturing industries. Cement, Pharmaceuticals and Ceramics playing a major role.

· Pleasing ambiance (scenic mountains, clean beaches etc.); Ready availability of hotels, residential compounds and entertainment resorts.

· Ideal location readily accessible from Asia and most of Europe.

· Diesel is available in plenty and is economical, cheaper that other GCC countries.

· RAK also has a substantial dairy industry sector.

· RAK Free Trade Zone: The RAKFTZ regional office is also in Mumbai, India which started functioning since August 2005.

· Ras Al Khaimah has an excellent road network with emirates like Dubai, Sharjah, Ajman, Umm Al Quwain and Fujairah.

· Ideal location readily accessible from Asia and most of Europe.

Bridge from Ras Al- Khaimah to Dubai (takes only 45 minutes to reach Dubai)

Low interest rates:

1. Encouraging spending and investment.

2. Lower borrowing rates becoming boon for the economy leading to good credit growth and investments.

Tourism Statistics

International Airport: RAK Airport is one of the 6 international airport in the country.
Port:

1. Mina Saqr port: located near industrial area.

2. Al Jazeera

3. RAK Port

(Source: Global Investment House and HSBC report)

Social (Source: RAK Tourism)

· A large cosmopolitan expatriate population.

· Crime Rate is almost Zero.

· Shariah court deals with family and religious issues.

· Consumption of alcohol is not restricted.

· Secular policy that allows practice of all religions.

· Education: A large number of Government-run schools - primary, elementary and higher secondary are scattered all over Ras Al Khaimah.

· A 200 acre international campus for George Mason University, USA offering nursing, pharmacy, business study and IT.

· Ample drinking water supply, proper sewerage system and water storage measures followed. Electricity is available through federal authority.

· Pleasing ambiance (scenic mountains, clean beaches etc.); Ready availability of hotels, residential compounds and entertainment resorts.

Restaurants and night life:

1. Al Hamara Fort Hotel – 5 Star

2. Bin Majid Beach Hotel and Resort – 4 Star

3. Hilton hotel and beach resort – 5 Star

4. RAK Hotel – 3 Star

Recreational Facilities:

1. Mountain Climbing.

2. Golf Club

3. Aviation Club

4. Shooting Club

5. Desert 4 wheel drives.

6. Bowling.

7. Snooker.

8. Football grounds.

9. Water Skiing.

10. Sailing.

11. Fishing

Heritage Sites:

1. National Museum

2. Dhayah Fort

3. Falayah Tower

4. Shebas Palace

5. The lost mountain villages

6. The deserted villages of Jazirul Hamra

Others:

1. Media City

2. Manar Hall (A huge shopping mall)

(Source: RAK Tourism, Global Investment House and HSBC report)

Technological

· Has 4 world class hospitals and 17 clinics run by the Government. (Source: RAK Tourism report)

· Ras Al Khaimah spaceport: Space Adventures, the only company to have sent tourists into space, has announced plans to develop a commercial spaceport in the UAE emirate of Ras Al Khaimah. The project will cost $265 million. It is a joint venture between Prodea and Space Adventures, and will be used to launch suborbital tourist flights in the Space Adventures Explorer spaceplane. (Source: Space Adventures)

· Etisalat is the federal entity that provides telecom services. It has satellite links to more than 238 countries. (Source: RAK Tourism report)

· A joint venture with a Swiss firm Centre Suisse D`Electronique et de Microtechnique SA (CSEM) is being established. (Source: RAK Tourism report)

· Nano technology, micro electronics, system engineering and IT are the area of Focus. (Source: RAK Tourism report)

· Falcon Technology International investing $ 75 million for manufacturing of DVDs. (Source: RAK Tourism report)

Ras Al-Khaimah News:

RAK plans investment of $1 bn in infrastructure (19^th Jan 2007) (Source: Economic Times)

A new Ras Al Khaimah centre dedicated to autistic children will officially open next month. (11^th Jan 2007) (Source: Gulf News)
Hilton Hotel Group opens first Worldwide Resort in Ras Al Khaimah. (7^th Jan 2007). (Source: Gowealthy)
Dabur India forms new subsidiary in Ras Al Khaimah, UAE (2nd Jan 2007). (Source: MyIris)

Ras Al Khaimah Visa and Immigration

2010-05-13T03:09:00.000-07:00

General Information on RAK Visa

Information concerning visa requirements for those wishing to travel to the UAE has been listed below, however visa regulations and costs are subject to change and should always be checked with you travel agent or nearest UAE embassy before traveling. Do not overstay your visa as this will result in detention and fines.

Ras Al Khaimah Visas

The Cabinet has decided to reduce the visit visa period for citizens of 33 countries who are allowed to enter the UAE without a prior visa to one month non-renewable instead of three months. The Cabinet also decided to impose a charge of Dhs100 per visa to be collected on entry to the UAE through land, seaport and airport entry points.

The decision includes citizens from France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Cyprus, Finland, Malta, Spain, Monaco, Vatican, Iceland, Andorra, San Marino, Liechtenstein, United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia and Hong Kong.

Ras Al Khaimah Visit Visa
Citizens of the UK (with right of abode in the UK) will be granted a free of charge visit visa on arrival in the UAE: Passports will be stamped with the visit visa as you pass through Immigration at any airport in the UAE. Although the visa may be stamped for 30 days, it entitles the holder to stay in the country for 60 days and may be renewed once for an additional period of 30 days for a fee of Dh500.

Except for citizens of the Gulf Cooperation Council who do not require a visa and nationalities automatically entitled to visit visas on entry, all other visitors who wish to stay longer than 14 days in the UAE (see Entry Service Permit below) must obtain a visit visa in advance through a sponsor. The sponsor can be your travel agency, your hotel, the company or department with which you are doing business in the UAE, or an individual (e.g. a relative or friend resident in the UAE).

You can pick up this visit visa on arrival at the airport, but there is a fee of Dh100 plus a Dh10 delivery charge for this service. In order to complete your application, your sponsor will require your date of arrival, flight details, and a photocopy of the first few pages of your passport, which should be valid for at least three months.

A hotel will only provide a visa if you are a guest. For an individual to sponsor a visit visa, he or she must earn over Dh4000 per month and hold a valid residence visa. Your visit visa must be deposited at airport immigration one hour before the arrival of your flight. Note that your airline may require evidence (e.g. a photocopy) before departure that a valid visa awaits you on arrival.

Please note that holders of British Overseas Citizens Passport who do not have the right of abode in the UK do need visas to enter the UAE.

Ras Al Khaimah Tourist Visa
This special category of visit visa is available for individual tourists from East and West Europe who are not entitled to be issued with a visa on arrival, as well as visitors from Thailand, South Africa and China. The tourist visa, which must be sponsored by hotels and tour operators, entitles its holder to a 30-day stay and is non-renewable. The fee is Dh100, with an additional Dh10 for delivery.

Ras Al Khaimah Entry Service Permit
An entry service permit (sometimes referred to as a 14-day stay) is available to businessmen and tourists. The permit must be sponsored by a company or commercial establishment or a hotel licensed to operate within the UAE. The visa, which is non-renewable, is valid for 14 days from the date of issue and the duration of stay is 14 days from date of entry, exclusive of arrival and departure days. There is a fee of Dh120 plus Dh10 delivery charge for obtaining an entry service permit. Allow at least two weeks for processing of the permit.

Ras Al Khaimah Transit Visa
If you are flying to or from Europe or the United States, to Asia or Africa and passing through UAE airports, you can obtain a special 96-hour transit visa. You must be sponsored by an airline operating in the UAE and you must have a valid ticket for your onward flight. Your travel documents will be stamped with an entry seal and there is no charge for this visa.

Ras Al Khaimah Multiple Entry Visa
This is an option for business visitors who are frequent visitors to the UAE and who have a relationship with a reputable company in the UAE. Valid for six months from date of issue, each visit must not exceed 30 days in total. This visa costs Dh1000. The visitor must enter the UAE on a visit visa and obtain the multiple entry visas while in the country.

German citizens (both tourists and business visitors) may apply to the UAE embassy in Germany for one or two year multiple-entry visa. No sponsor is required. The maximum duration of stay should not exceed three months a year. The visa fee is Dh1500.

US citizens may apply to the UAE embassy in the US for one to ten year multiple-entry visas. A sponsor is required and the visa will be granted free of charge. The maximum duration of stay should not exceed six months per visit.

Ras Al Khaimah Visa Documents
To obtain a visa from a UAE embassy, you will need the following:
• Passport
• 2 photographs
• Duplicate application form
• Letter or fax from the sponsor in the UAE to the embassy concerned
• A letter from the applicants company plus photocopy

Ras Al Khaimah Immigration Department

Ras Al Khaimah Visa Office Abu Dhabi
Saeed bin Tahnoon Street, Abu Dhabi
Tel: 02 4462244

Ras Al Khaimah Visa Office, Al-Ain
Aditaba Road, near Dubai Islamic Bank, opposite Carrefour supermarket
Telephone number: 03 7625555

Ras Al Khaimah Visa Office, Dubai
Department of Naturalization and Residency, Trade Centre Road, near Bur Dubai Police Station
Telephone number: 04 3980000

Ras Al Khaimah Visa Office, Sharjah
Department for Naturalization and Residence, near General Post Office
Telephone number: 06 5726777

Ras Al Khaimah Visa Office, Umm al-Qaiwain
Telephone number: 06 7666419

Ras Al Khaimah Visa Office, Ajman
Phone number: 06 7422255

Ras Al Khaimah Visa Office, Ras Al-Khaimah
Phone number: 07 2273333

Source: RAK Government

RAK Free Trade Zone

2010-05-13T02:47:00.001-07:00

Since its inception in May 2000, RAK Free Trade Zone (RAKFTZ) has been growing rapidly. It now has an investor data base of 905 companies from 70 different countries. The RAKFTZ continues to spread its wings in the industrial horizon with more and more companies willing to set up shop in the investor friendly environment.

RAKFTZ holds out the following advantages for the prospective investors:

· 100% foreign ownership

· 100% income and corporate tax exemption

· 100% Capital & Profit repatriation

· Long term renewable lease

· Strategic location with access to over 1.2 billion consumers

· Transparent laws and regulations

· Promotion centres in Dubai and Abu Dhabi

· Simple and fast application procedures

· State-of-the-art communication facilities

· Excellent Sea port and International Airport facilities

· Easy international Access

· Abundant energy supply

· Marketing support services

is striving to provide lucrative business opportunities to world’s most dynamic companies. RAKFTZ is unique for the fact that it has three different business parks specializing in various sectors. The diversification of the Free Zone parks, both functionally and geographically, offers numerous advantages to the investors as they can choose their location based on the type of business activity. Each of the three parks, the Business Park, Industrial Park and Technology Park, offers identical advantages and benefits to investors. A brief overview of each park is presented below:

1. The Business Park

Centrally located in the vibrant, bustling heart of the City’s business district, the new World Trade & Business Innovation Centre is ideally situated within the RAKFTZ, between the Industrial and Technology Parks.

Offices are equipped with state-of-the-art communication links and the Free Zone Authority provides all utilities and cleaning services. RAKFTZ also provides its clients with local and international marketing knowledge, support and information services.

2. The Industrial Park

The Industrial Park is situated approximately 15 kilometers north of RAK and very close to the Saqr Port. The Industrial Park takes care to meet its environmental obligations and has a green cover provided by a stretch of mangrove trees encircling the Park.

Plot sizes are allotted to suit the space requirements of individual clients and are fully serviced with water, electricity and telecommunication facilities. On-site employee accommodation can also be provided. There is an administrative and service support centre located within the Park.

3. The Technology Park

The 71 hectare park is located in a rapidly expanding area devoted to automated manufacturing and capital intensive quality lifestyle projects. Situated south of RAK, the Park offers ease of access to the City Center, RAK International Airport and Saqr Port. It also has easy access to business centres like Dubai by road. A premier five star hotel is situated just across the highway with a lagoon and a golf course under development.

Types of licenses:

Industrial License

Activities allowed: Import of raw materials, manufacturing, processing, assembling, packaging, and export of finished products. Feasibility and environmental impact studies and clearance from RAKFTZ are required.

Commercial License

Activities allowed: Import, export, distribution, consolidation, storage or warehousing of items specified in the license. Maximum limit is seven similar product lines.

Consulting and Service License

Activities allowed: Offering consulting services in management, finance, investment, legal issues, labour relations, economics (including feasibility studies), industrial development, marketing, and related subjects. Other services include logistical support such as: restaurants or food outlets, catering services, travel agencies, leisure and social activities, insurance, cargo & freight forwarding, accounting, and auditing services.

Commercial - General Trading License

A General Trading License can be obtained under a Commercial License, which allows for more then seven product lines.

Application Procedure

The application process for obtaining a license is quite simple:


1.	Prepare and present a project report of your business and contact RAKFTZ head office.
2.	Complete and submit the simple application form (available on the website www.rakftz.com ). For an industrial license, a detailed application form will have to be submitted and environmental clearance has to be obtained prior to the approval.

3.	Documentation is reviewed, approval is granted and license awarded.

The investor can also apply online at www.rakftz.com.

Required Documents

	Free Zone Establishment	Free Zone Company	Foreign Branch	UAE Branch
Application Form	*	*	*	*
Brief Project Description	*	*	*	*
Memorandum of Association & Articles of Association		*	*	*
Passport Copy of Owner / Manager	*	*	*	*
Certificate of Registration			*	*
Resolution		*	*	*
Board Decision to set up			*	*
Power of Attorney appointing a Representative		*	*	*
Bank statement and Recommendation	*	*	*	*
Minimum Capital AED 100000	*	*

License Fee & Charges

Licenses	AED	USD
Commercial	2,500	685
Industrial	2,500	685
Consulting & Service	2,500	548
General Trading	5,000	1,370
One Time Registration Fee	3,000	822

Registering a Public Joint Stock Company in RAK, UAE

2010-05-13T02:43:00.001-07:00

As per the draft Federal Corporate Law, a public joint stock company must have a minimum capital of AED 15 million (USD 4.08 million) and the number of its shareholders must not be below 10. It must be licensed by the Ministry of Economy and Commerce and must be approved by the Central Bank if it covers banking or investment activities.

Founders of the company must subscribe at least 20 per cent of its capital and a maximum of 45 per cent. A single shareholder must not subscribe more than 10 per cent of the capital. The board of directors must not be fewer than five and not over nine and must have a term of three years in office. Each member must control a minimum AED 100,000 (USD 27,250) of its shares and is not allowed to hold that post in more than three companies in the country at a time.

Registering a Private Joint Stock Company

Its shareholders must not be fewer than three and must subscribe to its full capital of at least AED 2 million (USD 545,000). A private joint stock company is not allowed to put up its shares for public subscription

Investor's Benefits

Anyone is welcome to establish a legally permitted business in RAK. The investor can either opt to invest in RAK Free Zone or in other areas, subject to UAE general regulations. In either case, the investor will enjoy the following facilities:

·         Easy and quick registration (maximum 2 days);

·         Government will assist in obtaining all legal, industrial, and environmental licenses for the investor after receiving a project report or feasibility study;

·         Industrial projects with an investment of more than USD 10,000 will be   exempted from having a local partner, even if the project is not situated in the Free Zone;

·         Land is available in any size, leveled and ready for construction, at the rate of USD 0.45 per square meter per year, with a grace period of three years for commencement of operations. The rates are negotiable for important strategic projects;

·         Cost of construction:

·         Luxury offices: USD 400 per sq. meter.

·         Factory buildings in steel structures with a height of six meters: USD 45    per sq.meter;

Construction permits will be issued within a week after submitting the drawings for approval. If the investor wishes, the government could even arrange the construction works for him at the above rates. There are no limitations or restrictions on buildings.

·         Complete freedom from all taxes (i.e. no corporate, income or personal taxes);

·         Free transfer of money;

·         The investor can even contact the government for assistance in preparation of a feasibility study;

·         Government can assist the investor in the identification of a suitable local partner in business;

·         No restriction on manpower recruitment from any country.

DLF looks to exit Chennai SEZ

2010-05-12T02:18:00.000-07:00

Concerned over the delay in getting clearance from the Centre for its IT SEZ in Chennai, India’s largest listed developer DLF has decided to pull out of the project, communicating the same to Tamil Nadu government.

Tamil Nadu’s deputy chief minister MK Stalin informed the state assembly on Tuesday that DLF is keen to exit the proposed IT-SEZ project, which was to come on 26.24 acres at Taramani in Chennai. It has offered to return the land and also asked the state government to return the Rs 700 crore that it had paid earlier for the site. The government is yet to take a call on DLF’s request.

"At Taramani in Chennai, an IT related SEZ was proposed on an extent of 26.64 acres and DLF was selected through the transparent open tender procedure. Though this firm had already remitted Rs 700 crore to the Government towards the cost of the land, they have been requesting return of this money as approval by the Central Government for the SEZ is getting delayed," Mr Stalin told the house.

It is learnt by ET apart from problems on securing clearance front from the Centre, there also seem to be differences between DLF and government agency, Tidco (Tamil Nadu Industrial Development Corporation) over the terms and conditions of the agreement for the SEZ.

"As per the agreement, at least 2.5 million square feet of IT/ITes space needs to be developed in the SEZ . But DLF is not keen to develop this in an SEZ because existing units cannot be shifted to a new SEZ," Tidco chairman and managing director Sunil Paliwal said.

DLF, on the other hand did not wish to comment on the subject. When contacted, DLF Southern Homes MD KK Raman said, "We have no comments. We have several options." But he didn’t elaborate on what these options are. Official sources said neither any decision has been yet on re-tendering the project nor about returning the amount paid by DLF. "Negotiations are still on," a senior official said.

DLF’s project may have hit a wall but the SEZ project on 25.27 acres by another national player, Tata Realty and Infrastructure at Taramani was on track and is scheduled to be completed in a couple of years.
Stalin said "This project (Tata Realty) involves building a state-of-the-art SEZ for IT with an integrated international convention centre with about 40 lakh Sq. ft. of I.T. and I.T.E.S./commercial space, an Integrated International Convention Centre to seat 1,500 delegates and 275 Service Apartments and suites at an estimated cost of 2,410 crore of rupees. Construction works are in progress now,".

He was replying to an adjournment motion moved by the opposition alleging irregularities in the MoU signed by the Government with Tata for the IT-SEZ project. He told the house Tata was not chosen arbitrarily without following any procedure. It was chosen by Tidco through the transparent tender procedure. It was during the previous AIADMK regime, 123 acres of lands were given to the firms of its choice arbitrarily without any tender.

That way, through Government orders, 80 acres of land was given to Wipro, 50 acres to Satyam Computers, 50 acres to HCL, 20 acres to Cognizant, 25 acres to Mega Soft, 25 acres to Bench mark Soft, 50 acres to Advance software. Again, without floating any tender, AIADMK Government had signed an MoU with Lee Kim Tah Holdings, Singapore to develop a township at Siruseri IT park for allotting 104 acres of land at a price of Rs 15 lakhs per acre.

Investment News India, May 2010

Selling your property? Get the papers in order

2010-05-12T02:15:00.000-07:00

Planning to sell your old house to buy a new one? Undoubtedly, residential properties sell like hot bread in metros like Delhi, Mumbai or Chennai, or even in tier II towns like Pune, Coimbatore or Chandigarh. It was a simple journey for Bangalore-based software professional Puneet and his wife Haimanti. They sold their house in Mumbai as they were relocating to Bangalore. The couple hired a broker to facilitate an easy transaction. “The broker would get serious and committed buyers,” was Puneet Malviya’s logic. Ms Haimanti also looked at various real estate portals to post an advertisement but found the entire process time consuming. “Eventually we settled for an offline broker,” she said.

Even Ashish Avasthy, a Mumbai-based corporate lawyer, preferred to trust his broker who helped him buy his first house for similar reasons.

What are the essential documents you need to sell the house?

The documents required to sell a residential property are the housing society share certificate and the sale/purchase deed. Sale deed will confirm if the land is in the name of the seller and only he/she has the full right to sell the land. You need a copy of previous deeds, if required, to confirm the authenticity of the deal and the property. You also need original copies of stamp duty and registered house documents. The seller will also require an NOC from the housing society. In case of a joint ownership, the owner/owners have to submit documented consent. Home buyers insist on these documents if they are opting for a housing loan. “We sold our house to an old couple who bought the house from their own savings. Hence, they didn’t insist on too many documents,” says Mr Avasthy.

How should you file for missing documents?

Both the Malviyas as well as the Avasthys didn’t have a problem with missing documents as they had invested in new constructions. But, often old houses, which are 30-40 year old constructions, may not have proper registration. In such cases, the owner should ideally pay off the outstanding stamp duty and file for a registration. “In the case of a missing share certificate, the intending seller should request the housing society to issue a duplicate copy. If the sale/purchase deed and/or chain of agreements/deeds are misplaced, an indemnity bond needs to be furnished by the seller, along with a confirmation letter from the housing society,” explained Mrunal Duggar, vice-president — Homebay Residential, Jones Lang LaSalle Meghraj.

Similarly, if the original copy of stamp duty and registered house documents are unavailable, an indemnity bond should be furnished by the seller. “In any case, the deed needs to be registered after paying up the valid stamp duty. A public notice also needs to be issued,” Ms Duggar added.

Is your property mortgaged with the bank?

You cannot sell the property if you are still servicing the loan. “We paid off the loan amount from the first instalment we received from the home buyer. We took our payment in tranches for an easier transaction,” said Ms Haimanti. Mr Avasthy, on the other hand, paid off only 99% of the loan and paid off the balance 1% over a period of one year to avoid foreclosure charges. But, the bottomline, is you can’t sell a mortgaged house if the buyer insists on accurate paperwork to apply for a loan.

How does one get an objective evaluation of the house?

The value of a property is decided by various factors, including the cost of similar properties in the same location, the view of the apartment, the available amenities in the building and the overall market trends in terms of appreciation and depreciation. Apart from checking out with your neighbours, get the property evaluated by 2-3 brokers to get a realistic quote.

What are the other clearances before putting the house on sale?

Apart from the title clearance and NOC from the society, the precise details pertaining to the age of the building, the floor plan, the carpet and built-up area, the conveyance of the society, car parking status, land title (free hold/lease hold/collectors land) and transfer charges of the building and the apartment need to be attended to.

What are the tax implications?

The capital gain would be exempt from tax under Section 54 and Section 54F if the sale proceeds are invested in a residential house and if you do not own more than one residential house at the time of purchase of such a house. But you have to purchase the new house within a year before the sale. Otherwise, this capital gain or net consideration is required to be deposited in a separate account before you file the return. You can reinvest only in a residential property. This doesn’t include a commercial property or vacant plot of land. Similarly, short-term capital gains enjoy no exemption.

“The house you are planning to sell would be classified as short-term capital asset as the holding period is less than three years. There is no exemption available on reinvestment, be it a new house or capital gains tax saving bonds,” explained Vaibhav Sankla, executive director, Adroit.

Property News, May 2010

Flat rentals fall flat in Ajman

2010-05-09T01:57:00.000-07:00

Rents in Ajman have dropped by more than 40 per cent this year, real estate agents and a senior official at the Ajman Municipality and Planning Department said.

Mariam Al Rumaithi, Director of the Rent Contracts Authentication Department at the municipality, said that based on data culled from rental values of tenancy contracts they have stamped, rents have dropped by almost 40-50 per cent this year.

Due to the huge number of tenants moving from expensive apartments in the emirate to cheaper ones that offer better facilities, the municipality has also seen a spike in the number of contracts authenticated.

"Some have even moved to Ajman from neighbouring emirates," she said.

Rifaat Abdul Rahman of Aman Real Estate in Ajman said the drop in rents is frustrating property owners who are unable to reverse the supply glut. He said property owners are now competing to provide tempting offers to potential tenants, with some offering furniture for free with any two-bedroom flat leased.

Two-bedroom units leased for not less than Dh55,000 before the credit crunch now go for Dh32,000 to Dh38,000, depending on location, said Abdul Rahman.

Ajman resident Younis Mohammad, 34, said he recently moved from a one-bedroom apartment he rented in 2007 for Dh32,000 to a two-bedroom apartment for Dh27,000.

Shireen Mosalami, 30, said that she moved to a four-bedroom villa in Ajman for Dh40,000 from a Dh34,000 one-bedroom apartment in Sharjah.

Ajman Property News, May 2010

Realty prices may go up 10-15 pct in 6-9 months

2010-05-07T06:19:00.000-07:00

Realty prices may go up by anything between 10 to 15 per cent in the next six to nine months, with demand exceeding supply, real estate developers said today.

"The price is going forward. It is likely to increase by 10-15 per cent in the next six to nine months' time," Parsvnath Developers Chairman Pradeep Jain told reporters on the sidelines of a conference organised by Credai's NCR chapter.
BPTP Chief Financial Officer Sunil Jindal also feels that housing prices in the National Capital Region are likely to increase by 8-10 per cent in the same period on the back of rising demand.

Both feel that the anticipated price rise would not have any impact on demand for housing units, since the gap between supply and demand is huge and the overall sentiment for the sector has improved since the downturn.

"Demand is huge. Now things have improved, funding has improved, purchasing power has improved. Hence, I don't see any impact even if prices escalate further," Jain said.

Real estate prices have gone up by 10-15 per cent in the last few months on increased demand.

"NCR is short of five lakh housing units and there is an incremental demand of at least one lakh units a year. For the past few years, total supply in the region could not even meet the year-on-year incremental demand," Jindal said, justifying the rationale for prices going up.

India Real Estate, May 2010

Delhi real estate regulator by this year-end

2010-05-07T06:17:00.002-07:00

Delhi will have real estate regulator by this year-end, Urban Development Minister S. Jaipal Reddy said Thursday.

He also said the government was talking to other states to have similar regulators.

"The state governments have sounded positive. It would take time to happen. But Delhi will get a regulatory authority for the real estate by this year," Reddy told.

He said the legislation process for the real estate regulator for Delhi would soon be completed as the draft bill has been circulated to the stakeholders.

According to him, the regulator once in place would prevent real estate players from indulging in unnecessary profiteering.

The minister also said the Metro rail will stretch to 190 km in the national capital region by the time the Commonwealth Games start here October 3.

India Real Estate News, May 2010

Coming soon: A real estate regulatory authority

2010-05-07T06:17:00.000-07:00

Indian States will will soon have a real estate sector regulatory authority to protect the interests of residential apartment buyers from land sharks, Urban Development minister Jaipal Reddy said while releasing a report on 'Intelligent Urbanisation: Roadmap for India' here.

For urbanization to be truly sustainable, the report contends, India needs to adopt the Framework for Sustainable Urbanization. Merely enhancing infrastructure investment is not enough. The report, which has proposed a new framework for sustainable urbanisation, calls for a US $ one trillion investment in India’s urban infrastructure before 2020. Over two-thirds of India s GDP and 90% of the governments revenue generated is from the country’s cities and towns but commensurately inclusive, sustainable and people and environment sensitive infrastructure has been far lagging behind.

In 2010, there will be a regulatory authority in Delhi to protect the purchasers from fly by night operators entering the residential housing sectors in real estate. State governments have also been asked to put in place similar regulatory mechanisms to protect small buyers, Mr Reddy said. However, he pointed out, no timeframe could be given since under the Constitution, the Centre could only advise states.

Emphasing the need for capacity addition in a sustainable fashion and the need of local bodies to focus on urban infrastructure urgently, the minister highlighted the need to infuse technology to save water and build new urban cities. The second phase of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will be launched next year, he said.

Under the flagship programme of the UPA government, so far projects (mainly drinking water, sanitation and sewerage infrastructure) worth over Rs one lakh crore have been sanction sanctioned. It has exhausted all its funds for the plan period. The quantum of funds to be sanctioned for the second phase is being negotiated with FM Pranab Mukherjee, he said. Speaking at the International Conference on Intelligent Urbanisation organised by the Confederation of Indian Industry (CII), Arun Maira, Member, Planning Commission, Government of India, emphasized that Indias urban development should be economically viable and inclusive but also environmentally sensitive and sustainable.

The CII Report outlines that using technology as an enabler in this transformation could lead to efficiency savings of US $130 billion over the next ten years. Prepared by Booz & Company in association with Cisco Systems for CII, it examines the challenges of urbanization in India and proposes a new framework for sustainable urbanization. Intelligent Urbanization is defined as enhancing the citizens quality of life and social inclusion, boosting economic growth and minimising adverse environmental impact.

India is probably the only country which needs to not only revitalize some of the densest urban agglomerations in the world but also to ensure the delivery of basic services to the lesser privileged in an efficient manner during this urban transformation. The opportunities and challenges are unique to India and therefore the solutions must be transformational, not incremental. Our solutions must help cities be truly sustainable: socially, economically and environmentally.

India not only requires a massive investment from the government, but also the adoption of technology to make the investments more efficient supported by next generation smart government regulations and strategic public private partnerships, said Wim Elfrink, chief globalisation officer and executive vice president, Cisco Services and chairman of the CII Steering Committee on Intelligent Urbanisation.

For urbanization to be truly sustainable, India needs to adopt the Framework for Sustainable Urbaniza-tion. Recognizing that mere investments in enhanc-ing infrastructure is not the solution. For urbanization to be successful in India the social, econom-ic and environmental well-being of cities needs to be ensured.

Urbanisation in India is driven by natural population growth rather than migration. So, the most significant challenge for India will be to revitalize existing urban centres while strengthening capacity to support the future growth. Challenges include brownfield urbanisation, high density cities and unprecedented scaled besides increased efficiency in governance and an enhancement of municipality resources.

The Report illustrates how the competitiveness of individual cities is determined by quality of its infrastructure, ability to attract talent, medical facilities and quality and cost of housing.

Therefore, abundant and reliable housing, physical safety & security, education, health care, transportation, power and water are critical enablers to make a city more competitive.

Real Estate India News, May 2010

Suburban office bldg sells for Rs 407 crore

2010-05-05T02:01:00.000-07:00

In what is touted as the largest commercial transaction of 2010 in Mumbai suburbs , a brand new office building at Kalina has been sold for Rs 407 crore.

Market sources said the deal was signed sometime last week. The buyer, Edelweiss Broking Ltd, is believed to have paid around Rs 20,000 per sq foot for over two lakh sq ft space in the 14-storey building, Lotus Midtown, located outside the Bandra-Kurla Complex. The building has been constructed by Anand Pandit of the Lotus Group.

A real estate analyst said demand for commercial properties was once again picking up. However, he said it is mainly coming from Indian companies rather than multi-nationals as was the case earlier.
Last February, a four-storey commercial building at Worli was sold for Rs 640 crore, one of the costliest of its kind in the country. The Wadia Group sold its property to Axis Bank, which is planning to shift its headquarters to the building.

The building, Wadia Tower A, located on Bombay Dyeing Mill compound on Pandurang Budhakar Road, has a saleable area of over 4 lakh square feet. It worked out to Rs 16,000 per square foot.

Mumbai Property News, May 2010

Mallya’s luxury flats to be priced at Rs 20 cr

2010-05-05T01:59:00.000-07:00

It’s official now. Liquor and aviation baron Vijay Mallya is uncorking a Rs 1,500 crore-luxury residential play in the heart of Bangalore, on Vittal Mallya Road, along with Prestige Estates. This could well be the most expensive residential project to be sold in Bangalore’s real estate history , as the asking rate per sq ft is pegged at a whopping Rs 33,000. Mallya plans to develop 75 apartments over 5-lakh sq ft.

Mallya is razing down his ancestral home spread across approximately 4 acres of land and is situated adjacent to the UB City to construct a 31-storey high-rise super luxury residential building likely to be called ‘Residences at UB City’ . The project would have 75 super luxury apartments of 6,000 sqft to 7,000 sqft in size sporting price tags anywhere between Rs 15 crore and Rs 20 crore apiece.
What is now known is that as part of the project, Mallya is building a 70,000 sqft to 80,000-sqft penthouse for himself , which will be the only home in Bangalore to have a bird’seye view of Cubbon Park, MG Road, Vidhana Soudha, and the entire central business of the city.

Also, at 31-storeys high, it could well be the only house in Bangalore that can boast of reaching to the stars. Once upon a time, the land, on which UB City and Mallya’s house are situated, comprised a brewery, belonging to the UB Group. TOI was the first to break the story on July 11, 2008.

Investment News, May 2010

Property rents in Dubai fall even in sought after locations, new report shows

2010-05-04T05:47:00.000-07:00

An increased supply of residential real estate units in some of Dubai's most popular areas has resulted in further rent declines in April but there are fewer disputes.

Locations such as Palm Jumeirah and Dubai Marina which have performed better than other parts of the emirate during the past six months are now seeing rents fall. Rents have gone down by up to 6% according to a report from Landmark Advisory.
Average rents for a two bedroom apartment on Palm Jumeirah had fallen from AED120,000 to AED115,000 a year, a drop of 4%, while the same type of property in Dubai Marina has fallen about 6% from AED90,000 to AED85,000, the report says.

The Landmark report also says that villa lease rates have remained relatively stable with certain areas like Arabian Ranches, Victory Heights, and parts of the Lakes experiencing lower limit declines.

The report concludes that the risk in both the residential and commercial property markets continued to be the new supply forecast to enter the market during the next three years.

'Lease rates in most areas, in both the residential and commercial markets, will fall in the coming months, especially for lower quality buildings in the least developed and integrated communities,' the report says.

However, the company said it had seen a recent increase in enquiries from companies considering relocating their operations to Dubai. 'While this is still a nascent trend, it is one that we predict will gather momentum over the next three to four years as commercial sale prices and leasing rates bottom out,' said spokesperson Jesse Downs.

The report comes at the same time as officials revealed that rent dispute cases in Dubai dropped by more than 50% in the first quarter of 2010 compared to the same period last year.

Dubai recorded 943 rent dispute cases as opposed to 2,003 cases in the first three months of 2009, said Mohammad Al Sheikh, general secretary of the Dubai Rent Committee.

Dispute numbers were 40% lower in 2009 from the previous year. A total of 5,373 dispute cases were registered in 2009 against 9,000 cases in 2008 while Dubai recorded a 10% increase in the total number of rent dispute cases resolved in 2009, he added.

Al Sheikh said the main reason for a drop in the new rent cases registered was the fact that now more and more people were adhering to their rent contracts. 'People are now understanding the law and abiding by their contracts,' he said.

Dubai Property News, May 2010

Alternative investments India

2010-05-03T05:37:00.000-07:00

The world of investment today extends far beyond equities and bonds. Although these alternative investments are still evolving in India, they are an option for those who are looking for hybrid features in an investment.

Alternative assets typically provide economic value that would not be found in a standard investment portfolio. They could be in the form of structured products, private equity funds, real estate funds, commodities or art funds. Also, investments in art, rare coins, rare stamps, fine wine, though not popular in India, are part of alternative assets.
“Alternative Investment products are offered to clients who already have some experience with equities and bonds and are looking for a different flavour. Depending on a client’s profile, they could constitute about 5-15 % of his portfolio, and clients could expect an IRR (internal rate of return) of 20-25 %,” says Rajesh Saluja, CEO, ASK Wealth Advisors.

Typically, alternative assets are long-term and being illiquid in nature require an investment horizon of at least 5-7 years. In many cases like art funds or rare coins, it may be difficult to ascertain the value of the investments and hence the timeframe of investment could be longer.

“Many a time such alternative assets are recommended to clients who have a passion or interest in such products,” says Richa Karpe, director, investments, Altamount Capital. Let us look at some such products:

Investment in Structured Products

Simple structured products such as capital-guarantee products are offered to clients, with some participation in the Nifty upside. If an investor invests Rs 100 in this product, with a maturity of 3 years, Rs 80 will be allocated to debt and Rs 20 will be allocated to equity (Nifty).

A 7% interest on the debt component of Rs 80 will give around Rs 21 as interest in 3 years, which ensures that the principal (Rs 100) is intact. If we assume that Rs 20 allocated to equity, doubles in three years, the investor will get Rs 40. Thus, at the end of the term, the investor gets Rs 140.

While this is a simple structured product, more complex products with Nifty participation , gold as an underlying, are created based on demand from clients and keeping the market situation in mind.

Investment in Managed Futures

Managed Futures are a form of alternative investment with focus on absolute returns in liquid futures . The fund manager uses quantitative and algorithmic trading strategies.

The process involves technical analysis and involves going short or long in areas such as metals, grains, commodities and currencies. Unlike traditional investments, managed futures can take both long and short positions , enabling you to achieve returns in both rising and falling markets.

“Using quantitative strategies, which are extensively backtested, we take a bet on futures with an aim of giving absolute returns to clients,” says Hrishikesh Parandekar , CEO, Karvy Private Wealth. Karvy does this in association with Superfund, an Austrian company, using RBI’s $200,000 investing window for overseas investment.

Investment in Private Equity

This is a pooled investment vehicle used for making investments in various equity and equity-related securities of primarily unlisted entities. Private equity funds typically make investments in companies with a small established track record and in need of funds to expand.

They offer high return opportunities due to their ability to participate in a company’s profits when the company is about to experience high-growth faze. An individual with a minimum of five-year investment horizon and with an investible kitty of around Rs 25 lakh can consider this option. Though recently there were options seen that offer entry at as low as Rs 5 lakh.

Investment in Real Estate

Real Estate has long been considered the most tangible form of wealth accumulation. Apart from a few blips such as the mid-90 s, real estate prices have seen a secular rise. Real estate investors earn returns by way of rentals and value appreciation of the property.

Investment in Gold

Gold comes handy in times of hyper-inflation and currency weakness. Gold is known to have a low correlation with other asset classes such as equities and debt and is considered a safe haven during times of economic crises. Some even regard it as an alternate currency. Gold can be conveniently bought through the ETF route in India itself. ETF units track one or half a gram gold price.

Investment in Commodities

Commodities provide a diversification to your portfolio and also act as an effective hedge against inflation. However, they are traded in futures market only and are highly regulated. Investment options here could include energy funds or global ETFs using the headroom for individuals to invest up to $200,000 per year overseas.

Investment in Art

“For clients who have a passion for art, we help build a collection that could have future saleability,” says Richa Karpe. It could mean buying into art directly, and building a portfolio or it could be identifying contemporary artists of today who will be masters of tomorrow or through an art fund.

Investment News, May 2010

South Mumbai flat sold for Rs 33 crore

2010-05-02T23:08:00.000-07:00

In another freakish transaction barely few weeks after the sprawling duplex in Samudra Mahal building at Haji Ali was bought at Rs 37 crore (over Rs 1 lakh/sqft), another apartment in the art deco Kamal Mahal building on Carmicheal road in south Mumbai has fetched its owner a whopping Rs 33 crore.

In 2007, a flat in the NCPA Apartment at Nariman Point was bought by a London-based NRI for Rs 34 crore. The Kamal Mahal flat is located on the fourth floor of the seven-storey building and belongs to one Bhagat family.
However, the identity of the buyer is unknown. The sale papers are expected to be submitted to the building's society for its no objection certificate in the next one week, it is learnt.

The apartment (flat no. 8) has a carpet area of 4,171 sq ft and was in the market for the past 15 months. Market sources said the owners had initially set a price of around Rs 40 crore for this flat, but later scaled it down.

“Such deals are not representative of the property market today. You can possibly get a flat across the street or on the same road at half the price. Buildings like Kamal Mahal are considered to be iconic and always command a premium when volumes are not available,” said developer Niranjan Hiranandani.

He confessed that when such large transactions are reported, builders take advantage and jack up rates of their own properties. “Some are willing to pay any price because of the building and its location. But when people read about such deals they think the market has gone berserk,” he added.

Market sources said flat owners living in premium south Mumbai buildings sometimes demand astronomical amounts for their properties from interested buyers. One such premium penthouse in a high-end building at Pedder Road has been waiting for a buyer for many months now because the owner wants Rs 55 crore for it.

Kamal Mahal was constructed more than six decades ago and was one of the first buildings to come up on Carmichael Road. It was originally known as Sethna House.

Mumbai Property Rates, May 2010

Vinod Khosla tops 10 greenest billionaires

2010-04-23T04:03:00.000-07:00

Indian American Silicon Valley billionaire Vinod Khosla tops the list of 10 greenest billionaires chosen by Forbes "who are most active in green, sustainable causes and who are working to have the greatest impact."

The leading US business magazine said it found the top ten "are altruistic, yes, but most of them are also very much aiming to turn a profit" and they hail not just from the US but also from Israel, Germany and Canada.

"Khosla-a cofounder of Sun Microsystems and a longtime partner at venture capital powerhouse Kleiner Perkins Caufield & Byers-has, with fellow billionaire and green business supporter John Doerr, been pouring millions of dollars into green tech companies," Forbes noted.
The magazine put Khosla's net worth at $1.1 billion and Doerr's at $1.7 billion, noting in 2004 Khosla began, though his Khosla Ventures, to fund dozens of innovative companies involved in areas such as sustainable building materials, solar power and advanced biofuels.

Some of these investments Khosla has described as "science experiments" that may or may not succeed, it said.

"I like Vinod's strategy because traditionally VCs don't buy into companies at their early stage. He does, and the science experiment that survives that germ-of-an-idea stage has a good chance it'll be mainstream some day," Forbes quoted Michael Kanellos of Greentech Media as saying.

Ausra, a solar thermal power company backed by Khosla Ventures and Kleiner Perkins, had trouble getting financing and permits for planned solar plants and in 2009 switched its focus to selling equipment for customers that included coal-fired plants.

Now the company is out of Khosla's purview as in February French nuclear giant Areva bought Ausra for an undisclosed sum.

But Khosla has plenty of other green tech bets, including Calera, a company that is developing technology to trap carbon dioxide and capture it in cement, Forbes.

Among others making Forbes greenest billionaires list were Israeli Carnival Cruises heiress Shari Arison, Google cofounders Larry Page and Sergey Brin and German billionaires Aloys Wobben and Prince Albert von Thurn und Taxis.

Nearly everyone wants to be green these days, or so it seems, said Forbes noting more than $200 billion globally will be invested this year in sustainable businesses-a 40 percent increase from 2009.

Latest Investment News, April 2010

Affordable homes are fine, but for whom?

2010-04-20T03:50:00.000-07:00

Are our policy planners and key stakeholders of realty sector serious about providing affordable homes to lakhs of Indians? This is really a very key question given that these days, talking and discussing affordable homes has become a fashion, practically among everyone even remotely associated with realty sector. It goes without saying that the term 'affordable housing' sounds alluring.

But when we talk about affordable homes, we must ask - affordable for whom? Is it affordable for those earning Rs 8,500 to Rs 40,000 per month, who comprise 44% of our populace and fall both in the formal and the informal sectors? And if so, where are the flats for these 44%? Where are the builders? And, critically, where are the banks which will dole out the loans? The answer for all these questions is the same - as good as none. These are some of the key questions, which have been discussed by Arun Mohan, a senior advocate and writer, in his latest offering "Affordable Housing: How Law and Policy can make it possible" .
Arun Mohan has tried to prove that all the advertisements , whether by the builders or the local development authorities, bank finances is for the top few - about 4%! While the lower 52% will have to wait for the country to develop further, the 44% of the population, or the great Indian middle class, is a victim through absence of laws and they have denied what is their due - an opportunity for an ownership of flats. At whichever strata or class a person is born, housing must be notionally considered a fundamental right - a right step has been taken with regard to education by making it a fundamental right. The rest depends on his skills, labour, determination, and also, to an extent, on his destiny.

A basic flat as a shelter is a prerequisite for proper education. In his endeavor in moving upwards , the laws of the land should not fail a citizen , but encourage and support him. The issue has perforce to be addressed from the standpoint of annual household income. Presently, only those with Rs 5 lakhs plus annual income (or less than 4% of the population) are attended to. Unless we attend to the 'middle class' (44%), which we easily can, we can never hope to attend to the 52% poorer masses.

Arun Mohan argues in his book that there are three areas that deserve urgent attention to provide affordable homes: One, availability of land for housing; two, availability of flats which are affordable; and, three, availability of bank finance . There is another problem and because of that prices are so high and the market is restricted . And that is there is crisis of confidence. And what is the answer to these issues? According to him, after analysing this problem, he believes a "certifying-cum-performance guaranteeing company" [or a regulator] is needed, which keeps a control on the builder and issues a "wideguarantee certificate" to the flat buyer that he will be delivered the flat he pays for. With this guarantee in hand, a flat buyer will be willing to part with his money and a bank will also be willing to finance it.

While making sufficient land available for affordable housing is important, one has to cater to the flat buyer who is not willing to part with his life savings and assume a liability because he does not trust the builder. There is the bank that is not willing to lend. And there is the builder, who, in the absence of a large market, cannot have the economies of scale and pass that benefit on to the buyer in terms of lower price.

Mohan writes that it is this "crisis of confidence" which is one of the major factors that has stifled growth of affordable housing in the country . So large is this sector and so important is housing, both for the citizen welfare and for nurturing and education of the young ones, that attention to this section, who comprise 44%, will hopefully propel national growth. Once this crisis of confidence has been overcome , the housing sector will see a boost. Mohan says that pricing is unnecessarily high, when it need not necessarily be so.

If we divide the population of our country into sectors according to income, it is only the top 4%, in fact less, and who are attended to by the banks for home finance. Only those at the top can afford houses. He notes that 44% of our middle and upper-middle class, which earns more than Rs 1 lakh a year or even Rs 5 lakhs a year receives no assistance for housing primarily because the flats that they can afford are not worth the money and, two, the bank finance is not available to them.

FOCAL POINT

There are three areas that deserve urgent attention to provide affordable homes—avilability of land, availability of affordable flats and availability of bank finance While making sufficient land available for affordable housing is important, one has to deal with the ‘crisis of confidence’ , which is the most major factor that has stifled the growth of affordable housing in our country.

Real Estate India News, April 2010

Mumbai property prices may see further upside: JLLM

2010-04-20T03:48:00.000-07:00

Residential housing prices in Mumbai are expected to move further upside as sales increase and investor sentiments strengthen, a recent real estate report by Jones Lang LaSalle Meghraj (JLLM) said.

"Demand for commercial spaces is improving and will continue to do so until the end of 2010. This will translate in to a large number of transactions, both in terms of leases and outright purchases," the report said.
According to the report there is supply coming in on all segments of residential, from luxury to mass housing. The commercial and retail segments are also yielding enough supply to keep the market going over the next year.

In addition, there will be lots of activity on the residential property front, owing to the strong demand and the fact that many developers are going for public funding, the report said.

"Residential is currently in vogue, so this is the area of focus for developers who seek to create brand in order to get on the funding bandwagon," Managing Director (West India), JLLM, Pawan Swamy said.

All these factors, coupled with growing urbanisation, are also fuelling the demand for property constantly.Moreover, with limited space available in the central city, Mumbai's real estate market boundaries are constantly extending into newer area, Swamy said.

Besides, infrastructure projects such as the metro, monorail and flyovers being put in place to boost accessibility more locations within the city and reduce commuting time.

"This is good news for the realty sector in the medium to long-term, depending on the pace at which these measures are implemented," Swami said adding that residential real estate will continue to be in highest demand, and therefore on the priority list of most developers.

Mumbai Real Estate News, April 2010

Five lakh affordable homes planned in Mumbai, adjoining areas

2010-04-07T05:56:00.000-07:00

Maharashtra Chamber of Housing Industry (MCHI) has embarked on an ambitious plan of facilitating the creation of five lakh affordable
houses by 2015 in co-ordination with the State Government.

The total investment will be around Rs 15,000 crore and more than 500 builders will participate in the project.

"We are closely working with the State Government and its officials to come up with the modalities of the scheme," MCHI President Pravin Doshi told reporters here today.
The aim of the project is to provide affordable homes to middle-and-lower income groups living in the metropolis and the Mumbai Metropolitan Region (MMR), Doshi said.

The MMR, besides Mumbai, consists of some areas in neighbouring Thane and Raigad districts.

MCHI, a prominent body of real estate builders and developers, will be working with the Government to examine and identify measures to strengthen the housing industry's role in the State's socio-economic development, Doshi said.

A convention will be held here on April 28 and MCHI will also sign an MoU on the same day with the Government to create confidence among investors for this project, he said.

"Mumbai has an immediate demand of around 1.4 million homes, of which 80 per cent is expected to emanate from the Rs 3-5-lakh income group. There is an unmet demand for basic affordable housing in Mumbai and the MMR region due to rise in land, labour and construction costs," Doshi said.

Mumbai Real Estate News, April 2010

Mumbai Real Estate : High prices hit demand

2010-03-31T02:09:00.000-07:00

Realty sales in Mumbai Metropolitan Region (MMR) have fallen. The total area (m sq ft) sold in MMR in December 2009 as compared to September 2009 quarter, has come down. Prices have risen or remained flat in some cases. This shows that homebuyers are holding on to their demand and exercising restrain. Demand for big-ticket houses has been the worst hit.

As per the data compiled by Liases Foras, a real estate research agency, flats costing Rs 1 crore to 2 crore have seen a sharp fall in demand which is contrary to what many developers in the region have been saying. Homes costing over Rs 2 crore are also witnessing the same trend. This is in contrast to cities like Bangalore, Hyderabad and NCR, where sales have risen, thus proving again that Mumbai property market defies rules applicable to other markets. The main reason for the same being that prices have fallen in the above-mentioned cities whereas Mumbai based developers have been increasing their prices.

MMR’s business turnover index (BTI) registered a 32% decline in the last quarter of FY09. BTI is the measure of movement in the sector, which takes into consideration the price, and area of the total number of units sold across projects across regions. Nonetheless, what is noteworthy is that despite a 20% growth in sales in NCR, the overall increase in its BTI is very small. This is due to the fact that there has been a more than proportionate increase in sales of low-ticket units.

Mumbai developers have scarce land resources to build upon when compared to NCR builders, the reason why they make the most of what’s available. The efficiency index in MMR has also come down, the highest decline seen in the Rs 1 crore to Rs 2 crore category. The market efficiency is the ratio between the average sale movement per building and the rate per sq ft. It suggests demand elasticity.

So, if the average sale per building is increasing with the increase in rate, the market is efficient. Conversely, reduced sales means the market has become relatively inefficient to that extent. Developers must realise that if they increase price irrationally, they will be left with unsold inventory and thus lead to the vicious cycle of debt trap as was the case in 2008.

They must realise that ‘Customer continues to be the king’, at least for the time being.

India Real Estate News, March 2010

Delhi, Mumbai most preferred by home-seekers: Survey

2010-03-30T06:02:00.000-07:00

New Delhi and Mumbai are considered the most preferred real estate investment destinations for this year (2010), with 62 per cent of prospective buyers wanting to invest in a home and live in these two cities, a nationwide survey revealed here Monday.

The survey by housing and realty portal entitled "Realty Trends-2010" conducted in the metros and tier II cities found that nearly one-third of the people - 34 percent - would like to buy a house in the national capital.

Mumbai follows close behind with 28 percent of the people desiring to settle in their own home in the city of dreams.

Surprisingly, Bengaluru and Hyderabad came a distant third as the option of only 11 percent of the people surveyed, said Aditya Verma, vice-president, makaan.com.

"The survey also revealed that in 2010, the realty sector will be driven by the end users who shied from making property purchases last year in view of the recession and fluctuating prices," Verma added.

As many as 67 percent of those surveyed wanted to buy a house for self-consumption while 23 percent looked at it as a long-term investment and the remaining 10 percent as a short-term investment proposal.

A majority of the buyers have also said that the speculators driving the realty boom of 2004-07, have been more or less driven out of the markets.

As far as Mumbai is concerned, the survey has some unexpected results.

While 72 percent of the property seekers want to buy a home for self-consumption, nearly 20 percent plan to take the plunge this year itself. The remaining 8 percent will treat it as a short-term investment option.

About the location choices, the north-west Mumbai suburbs - Andheri, Jogeshwari, Goregaon, Malad, Kandivli, Borivli and Dahisar - have emerged as the hot favourites with 30 percent of the people opting for this region.

Another 29 percent will prefer to consider relatively cheaper options in Navi Mumbai, while only 12 percent plan to buy a house in the south Mumbai areas.

The survey was carried out among people in the 26-35 age group, who form the main chunk that invests in property for long-term purposes.

Real Estate India News, March 2010

Urban dreams: New cities to sprout across India

2010-03-30T06:00:00.000-07:00

Independent India has had the curious—if not unique—distinction of creating large new cities usually when new states are carved out. After all, the four planned entirely ‘new’ metropolises India has developed so far, have come about thus: Bhubaneswar, Chandigarh, Gandhinagar and Naya Raipur. Forty years ago, the great steel plants also forged Bokaro, Bhilai and Rourkela, successors to older industrialisation-led agglomerations such as Jamshedpur, Burnpur, Durgapur and Modinagar, but they could not possibly absorb the influx from rural areas.

Today petroleum, steel, cement, infotech, auto and other industries are spurring town-to-city transformations, conurbations and extensions, if not always new cities. Noida, Gurgaon, Navi Mumbai and NewTown (Rajarhat) are some indicative examples; new ports and extensions at Paradip, Kandla, Mundra, Pipavav are also part of this trend. Most important of all, though, is that the government has realised it must take a primary role in facilitating a crying need for new cities in India. And not a moment too soon.

In going slow on large greenfield cities, India was in line with global trends, says J David Foster, an urban affairs expert formerly with USAID, who lists new capitals like Brasilia, Canberra and Abuja as the few exceptions. Indeed, more new cities worldwide were stymied by the mixed track record of countries like Egypt and Britain on that front. But as Indians move on from Mahatma Gandhi’s vision of village-centred utopias — and pile into India’s existing urban agglomerations — international failures can no longer be a disincentive.

Thus in the past five years the Central government has made a provision for a whopping Rs 1 lakh crore to bolster infrastructure in 63 major cities in India under the Jawaharlal Nehru Urban Renewal Mission, it has pushed for SEZs and then, inevitably, greenfield cities. And if HCC’s under-construction Lavasa, India’s first post-Independence hill station near Pune, is evidence of the private sector’s interest, the Centre’s plan to build six brand-new cities in the next five years may be the catalyst India desperately needs for more such initiatives.

The greenfield cities on the anvil—Dholera in Gujarat, Manesar-Bawal in Haryana, Indore-Mhow in Madhya Pradesh, and Dighi and Nasik-Igatpuri in Maharashtra—have been conceived on a grand scale, along the Delhi-Mumbai Industrial Corridor (DMIC). For example, at 900 sq km, Dholera is envisioned to be six times bigger than Chandigarh. The success of these cities, however, hinges on DMIC getting private sector investment and the Central government facilitating soft loans from multilateral agencies with a 10-year moratorium at least.

Amitabh Kant, CEO of DMIC Development Corporation, a private company formed with 49% government equity, said the master plans for three cities are ready; SundayET has reviewed a part of these master plans. Plans for the two other cities in Maharashtra are at an advanced stage. According to the initial plans, Dholera has a four-year target of completion, with four-laned roads (provision for 10 lanes), a 100 m road corridor, improvements to the NH8E, a broad guage rail line and more.

If everything goes according to plan, most of these cities would be privately owned. “The model is such that a large part of the new cities would also be owned by private sector though there would be a mechanism to give the local people a voice in the management,” says Mr Kant, who is excited about the project’s potential to also create 8 lakh jobs.

“These will be industrial cities but we want to create them as living organisms,” he avers. “The model will be quite different from the West where people drive 100 miles to work. Ours will be walkable cities. The master plan ensures that anywhere you live, you should be able to get the nearest public transport in 7 minutes. That will make these cities environment-friendly too!”

Road ahead not all that smooth

But the road ahead is anything but smooth. First, the project will require Rs 17,000 crore as the initial capital, for the trunk facilities alone. Add to that a break-even level possible only in the 11th year, little wonder that the DMICDC has been discussing initial funding with finance ministry officials. A Japanese government official says companies that have shown a keen interest in the DMIC mega-project include Toshiba , NEC, Mitsubishi, Itochu among others.

Significantly, Japan is the partner country for the project though India expects investments from US, Europe and South East Asia too. “The Japanese government has given a loan for feasibility study of the DMIC project,” says an official . “We are partners in the process of building this corridor. It would be difficult to estimate how much investment is likely to come from Japanese companies for the corridor though it was earlier estimated to be about $10 billion.”

“Massive amounts of capital and the ability to make fast and objective decisions are not the only challenges,” says Mr Foster, putting India’s dilemma in an international perspective. “Unlike China and Brazil in which most of the development is concentrated along the East Coast, India has two coasts and has long had a more even distribution of cities than most other countries. As a consequence, there are relatively few suitable totally undeveloped sites still remaining in India.”

That highlights the second hurdle, apart from financing : acquisition of land. On paper, Dholera has an advantage, as 300 sq km of land (35% of the total proposed area) has already been acquired by the government. Also, there is a proposal to make the farmers stakeholders. But acquisition of the rest of the land remains a challenge.

These new cities shows are to be modeled on the few global success stories like Shanghai-Lingang satellite city (positioned as a trading hub with an annual industrial growth rate of 48%), Iskandar of Malaysia and the Amsterdam-Rotterdam corridor. The 2,000 sq km Iskandar city, for example, is projected to grow nearly six times in 20 years from a GDP of $6 bn in 2005 to a $28 bn projection for 2025.

But as Mr Foster says, even in countries like the US, the development of new cities has been extremely slow. The private sector comes forward, but cannot proceed fast due to land acquisition. “James Rouse, the most successful of new town developer in the US, has concluded that future such developments by the private sector would be virtually impossible without government assistance in acquiring land,” says Mr Foster.

A pro-active government of India is therefore a must if millions of migrants are to find decent jobs, accommodation and proper civic amenities and infrastructure in India’s brand new cities.

Real Estate India News, March 2010

Tax only when interest credited to fixed deposits: CBDT

2010-03-25T10:54:00.000-07:00

No income tax at source will be deducted if banks have only made a provision for interest on fixed deposits and not actually paid it to the depositor, the Finance Ministry has clarified.

Until now, tax was supposed to be deducted by banks even if only provisioning was made for interest payment.

However, this was creating problems for banks using Core-Branch Banking Solutions (CBS), which enables customers to access their accounts from any branch.

The Indian Banks' Association in a representation to the Income Tax department had said that for banks using the CBS software, interest payable on fixed deposits is calculated generally on a daily or a monthly basis but is parked in the provisioning account for monitoring only.

The interest is actually credited to the depositor's account either at the end of the financial year or at periodic intervals or on maturity of the deposits.

The matter was considered by the Central Board of Direct Taxes to plug this loophole.

According to a Finance Ministry official, CBDT clarified that since no credit is given to the depositors while calculating interest on fixed deposits on daily or monthly basis in the CBS software used by banks, tax need not be deducted at source on such provisioning of interest.

"In such cases, tax shall be deducted at source on accrual of interest," the board clarified, according to a source. Income tax is charged at the rate of 10 per cent on interest income of more than Rs 10,000 in a year.

Investment News, March 2010

HNIs now investing in commercial properties

2010-03-25T10:36:00.000-07:00

If you imagine that commercial properties are only purchased by companies to expand their business prospects, think again! Now high net worth individuals (HNI) too invests in commercial properties. As recently as a few years ago, commercial property was an investment option for select individuals

Apart from the issue of a large investment, it required a different mindset from the investment point of view as well. But, over the years, a large number of Indians have begun to earn huge salaries while many others are also making a lot of money through freelance jobs, which they are investing in commercial properties.

Unlike in the past, the New Age Indians are not confined to investing in residential properties. This trend is picking up fast. "If banks do not show reluctance to give loans to individuals in order to buy commercial properties, more and more HNI will come forward to buy commercial properties. It is now no secret that banks hardly show any positive attitude to sanction loans to individuals in order to buy commercial properties. This happens all over the world. That is why you can not blame only our banks," says Samir Jasuja, CMD of PropEquity.

An official of PNB Housing Finance Ltd also admitted that while banks happily give loans for residential properties, they are not that forthcoming when it comes to loans for the purchase of commercial properties. Reason? He said that compared to residential properties, the rate of default is very high in this segment. That is precisely the reason banks avoid disbursing loans to individuals in buying commercial properties.

"As far as Ansal API is concerned, we have got bookings from a sizable number of such individuals (HNI) in our malls (Ansal Plaza in various locations), as also in small to medium office spaces in our commercial projects in Delhi NCR, Punjab, Lucknow, Kundli (near Sonipat in Haryana), among other projects," says the company's official spokesman.

Anu Gupta, director of Century 21 India, says that HNIs should make investments in commercial properties as these investments could maximize their return. The reason being, while they could go for bank loans up to 75-80 % for such investments, the repayment of such loans could be set off against the rental incomes from such commercial properties. Thus, by investing a portion of the total price (say 25%), an investor can acquire a high-value asset, which will not only give maximum return (thanks to the set off provision in IT against rentals), but could see a significant appreciation over a period as the retail/commercial industry grows.

Giving his own example as to how he is earning less because he has invested in residential property while his friend is earning far more than him for investing in commercial property, a Delhibased financial professional, Narinder Gambhir, says that both he and his friend invested in residential and commercial properties in 2004 in East Delhi. Both invested close to Rs 30 lakh each.

"While I am getting a rent of Rs 15,000 per month, my friend is earning Rs 25,000 from his property. This is a huge difference," Gambhir rues. Discussing about the factors which are crucial for HNI to look before buy commercial properties, a realty expert says that they should not invest where there is a deluge of supply.

In that case, the investment would not fetch good returns. HNI also invest in commercial property, as they are not restricted to a dingy market area. Today, swanky malls enable an individual to look at commercial property as a viable investment option. Moreover, the emergence of semi-commercial property in residential locations has made the investment financially viable. RK Arora, CMD of Supertech group, says that there is nothing wrong if you invest in commercial property, but one must invest after taking all the pros and cons into consideration.

"I feel that if you invest in some commercial space in NCR, then you have to wait for a long period before earning anything as there is a massive supply of such commercial property in NCR, unlike in Delhi. If you can invest in Delhi, then it is great." However, Alimuddin Rafi Ahmed, CMD of ILD realty group, feels that as our economy is improving after tiding over a really tough time during the market slum of 2008-09 , corporates are looking for commercial spaces on lease, hence it is a perfect time to invest in commercial properties.

"This is just the right time to invest as the property is available at rockbottom prices. The crash in property prices led to downward revision of prices by developers. The reduction was to the tune of 30% or so. Hope things go better in the times to come and everyone benefits from the property," Ahmed concludes.

Investment News, March 2010

Luxury houses tempt buyers with lower tags

2010-03-25T10:32:00.000-07:00

Luxury homes became more affordable last year, as the financial crisis eroded prices from Monaco to Barbados, according to Knight Frank.

Prime real-estate values at 56 locations declined by an average of 5.5%, the London-based property broker said in a report published on Tuesday. Monaco was the most expensive market for the second year in a row, followed by London and Paris.

Wealthy individuals put off making purchases in 2009 because of concern about the economy, Knight Frank said.

Prices of properties in the countryside, coastal locations and ski resorts, often bought as second homes, fell by at least 12%. The biggest declines were in Dubai, in the western part of Portugal’s Algarve, in Palma on the Spanish island of Mallorca and in Dublin. Values in each of those markets fell at least 22%.

“Cities tend to perform better because they are necessity driven, whereas resorts and country pads are more discretionary purchases,” said Liam Bailey, Knight Frank’s head of residential research.

Luxury apartments and houses in cities appreciated by an average of 0.4%, led by a jump in values in China, Hong Kong, Singapore and Jakarta, the broker said.

“Boosted by China’s quick recovery from the global recession, the price of prime properties in Shanghai, Beijing and Hong Kong rose at a phenomenal rate last year,” Bailey said. Shanghai Booms Shanghai had the biggest increases, with property prices averaging $500 to $700 a square foot, or 52% more than a year earlier, the survey showed. It was the 13th most expensive luxury-home location among cities. There were 8,438 properties sold there last year for more than $735,000, making it China’s largest prime residential market.

Luxury-home prices in Beijing rose 47%. Hong Kong values increased 41% to average $2,000 to $2,500 a square foot, making it the fourth most-expensive city in the study. China is already taking steps to rein in the real-estate market as price increases accelerate. The government in January reimposed a sales tax on homes sold within five years of their purchase and the People’s Bank of China raised the proportion of deposits banks must set aside as reserves to reduce lending.

Property prices in China rose 10.7% in February, the most in almost two years, prompting the World Bank to urge the central bank to lift interest rates to prevent a bubble. While government measures may damp demand, “strong economic growth and limited stock should keep prices stable” this year, said Xavier Wong, Knight Frank’s head of research for greater China and Hong Kong.

In Monaco, where residents include Formula One champion Jenson Button and billionaire Philip Green, prices fell by about 15% last year. The average cost of a luxury apartment or house in the low-tax state on the Riviera ranged from $4,300 to $5,900 a square foot at the end of 2009, Knight Frank said.

International Real Estate News, March 2010

Real Estate recovering

2010-03-15T03:46:00.000-07:00

Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.

The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilise but will remain within acceptable range.

The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3% to 25% over the previous year, the report shows (see chart). Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well.

NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown , which created a kind of uncertainty in the job markets. The best outcome of the slowdown is the emergence of affordable housing in the country.

At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.

Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction.

The report said, there was a clear shift towards readyto-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.

In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech , which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days.

The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.

Real Estate India News, March 2010

God of SIPs will protect you at tough times

2010-03-15T03:44:00.001-07:00

One of the less foreseeable results of the past two years’ turmoil on the stock markets has been that many investors are loudly questioning the efficacy of SIPs. One such person I met, a typical case, started by claiming that SIPs were no good and that he had barely broken even on SIPs in a number of funds over the past four years.

This seemed odd because the funds he named had done quite well. I quizzed him further and it turned out that back in 2008, when the markets had crashed, he had immediately stopped all his SIPs. However, he had restarted all the SIPs in August 2009.

Observant readers would have realised that this investor had basically done it to himself. He had invested in a manner which was guaranteed to shield himself from any possibility of making money. Unfortunately, this problem is way too common.

The underlying problem is the increasing belief among people who skim the financial media that SIPs are a magical device, akin to the blessings of a godman and are thus guaranteed to produce profits no matter when. They can stop whenever they feel and start whenever they feel like and the God of SIPs will protect them.

The basic idea behind SIP, what the Americans would call SIP 101, is that while the general direction of an investment, a fund or even a stock, is upwards, it is not possible to reliably predict the actual fluctuations that it may undergo as part of its general trend.

Instead of trying to time one’s investments, one should regularly invest a constant amount. As time goes by and the investment’s NAV or market price fluctuates, this will automatically ensure that when the price was low, you ended up purchasing a larger number of shares or units.

Eventually, when you want to redeem your investment, all the units are worth the same price. However, because your SIP meant that you bought a larger number of units whenever the price was low, your returns are higher than they would have been otherwise. That’s the way it works.

Usually. However, you have to allow it to work by going on investing when the market is low. That’s the most important part. Generally, over a long period of time, the ups and downs of the market will ensure that SIP has the better returns.

Mutual Fund Investment News, March 2010

DLF changes tack in Mumbai realty market

2010-03-15T03:43:00.000-07:00

In a move that could add 5-million sq ft to Mumbai’s high-end residential market, the country’s largest developer, DLF, has decided to change the end use of its Lower Parel property.

DLF had acquired the defunct mill land in Lower Parel in an auction conducted by state-owned National Textile Corporation in 2005. It had bid Rs 702 crore for a 17.5 acre plot — a record price at that point — while stepping into the Mumbai market. But while buyers of some of the other plots in the auction have already completed their construction, DLF has chosen to wait and watch.

Industry officials feel that switching the project from a commercial complex to residential makes sense, given the oversupply in office space. While residential rates have firmed up in the city, lease rentals as well as prices are still way below the peak levels.

Recently in a Rs 650-crore deal, Axis Bank purchased nearly 4 lakh sq ft of office space developed by Bombay Dyeing in its erstwhile Mill land in Lower Parel. The bank’s acquisition price works out to nearly Rs 16,000 per sq ft, which is significantly lower than Rs 20,000-Rs 25,000 being quoted for top-end residential properties in the same locality.

When contacted, a DLF spokesperson refused to comment on the matter.

“The commercial real estate market is facing oversupply. Buyers are also concerned that as the area develops there will be more traffic congestion in the Tusli Pipe road (the arterial road for mill lands in Lower Parel),” said an official with HDFC Realty, which brokered the Axis Bank deal and another Rs 200-crore transaction by SBI Life.

Several builders were banking on the commercial property market, as municipal authorities grant higher development rights for properties earmarked for hospitality and information technology businesses. “Many developers have gone for commercial property because they can get higher FSI (floor space index). Also, they felt these real estate assets could generate a regular rental income,” said a leading broker.

However, DLF is not the only builder to change a commercial project into residential. Last year, Mumbai-based Ackruti decided to build a residential building in a property set aside for a mall at Andheri in North-western Mumbai. Besides supply of fresh commercial real estate in Lower Parel, several million sq ft of office premises are expected to come up for occupation in the Andheri-Kurla Road. HSBC in a recent report on commercial real estate had said office rentals have fallen by 39% from their peak levels.

Real Estate India News, March 2010

Ambuja Realty to set up three IT parks in Kolkata

2010-03-12T05:14:00.000-08:00

Kolkata-based Ambuja Realty plans to invest over Rs 300 crore to set up three business parks in the city. While two such parks will come up in the city's IT hub-Salt Lake Sector V-Ambuja has plans to set up the third one in Rajarhat in the eastern fringes of Kolkata.

Plans are also afoot to set up office space in Siliguri, Patna and Raipur. Ambuja Realty chairman Harshavardhan Neotia on Thursday said the company plans to start construction of new projects in couple of months. "We are in the process of receiving the necessary approvals. All the projects will be ready for possession within three years," he added.

While Ambuja plans to invest Rs 200 crore for a 5-lakh sq ft business park in Salt Lake, the second project will be set up over 1.5 lakh sq ft and will entail an investment of around Rs 60 crore. On the other hand, the Rajarhat project (1.2 lakh sq ft) is coming close to the group's existing shopping mall, City Centre II, and will bear an investment of around Rs 35 crore.

"While we will definitely target the IT sector for leasing out and sell out of space, but the parks will be designed in a way which will have appeal for all the sectors. At the same time, we plan to set up office space in three of our upcoming mixed development projects in Siliguri, Patna and Raipur," said Mr Neotia.

Ambuja Realty on Thursday announced the launch of the second phase of the group's first business park, Ecospace, in Rajarhat. The second phase comprising of two blocks will have a saleable area of 4.5 lakh sq ft. The entire project is spread over 10 lakh sq ft. Already 85% of the area in the first phase is leased or sold out to the likes of Bajaj Allianz, HDFC Bank, Voith, Thyssenkrupp, Indus Towers and Bayer Corp. "Of the total project cost of Rs 300 crore, we have already invested Rs 200 crore in Ecospace. The project will be completely ready by April 2010."

Kolkatta Real Estate, March 2010

L&T Mutual Fund launches daily investment plan

2010-03-12T05:11:00.000-08:00

L&T Mutual Fund said it has launched a scheme -Daily Investment Plan- which will offer investors an opportunity to transfer a fixed amount on a daily basis to eligible open ended equity schemes of the company.

"The plan offers investors the opportunity to transfer a fixed amount on a daily basis to the eligible open ended equity schemes of L&T Mutual Fund with effect from March 5," it said in a statement.

The daily investment in the equity schemes of the company enables investors to get benefits of the fluctuation in the equity markets, L&T Mutual Fund said.

The minimum investment amount in the fund offers growth option with minimum application amount of Rs 10,000. It would be open for subscription from tomorrow.

The plan "is an attractive option for the investors as it gives the freedom to put in as little as Rs 50 on a daily basis in an eligible equity scheme," L&T MF CEO Sanjay Sinha said.

"This facility is designed to help the investors in coping with the market volatility and take the advantage of rupee cost averaging," Sinha added.

Best Mutual Funds India, March 2010

Nariman Point losing out to newer buildings in other parts of the city

2010-03-12T05:05:00.000-08:00

For years, Nariman Point has housed India's most exclusive office property, with impossible rental rates and a listing on all the major
international surveys. But Mumbai's central business district's good old buildings are now starting to lose out to newer, swankier constructions in other parts of the city.

With companies such as JP Morgan, Goldman Sachs and UBS shifting to buildings with better facilities northwards, a 2,000-sq-ft office space in the three-decade-old Arcadia Building is now being leased out for only Rs 1,60,000 per month, or in property terms, at Rs 80 per sq ft.

"It is difficult to find takers even at such low rates. People are not fascinated by Nariman Point the way they used to be. Just over a year ago, a similar space in Arcadia was priced at Rs 220 per sq ft," Naren Sukhwani, a broker for the property, told Mumbai Mirror.

The Arcadia rate is not an aberration. A 550-sq-ft commercial space in Dalamal Towers has been put up for rent at an asking price of Rs 82,000 a month, which translates to Rs 149 per sq ft. Harakh Nagda of Harakh Estates, who's trying to get leasees for that property, said there had been no enquiries so far.

"These buildings are old, and not state-of-the-art. Most of them were constructed decades ago. Many don't have proper parking spaces. Lower Parel is coming up rapidly as a commercial hub. Look at Indiabulls and Peninsula, for example."

Mumbai Property News, March 2010

275-metre ritzy tower to come up in Prabhadevi

2010-03-12T05:03:00.000-08:00

Have you ever wondered what it would feel like living at the height of Eiffel Tower’s highest observation deck, which stands at 276 metres? If you have Rs 50 crore in your kitty, you may be a proud owner of just one such celestial home in Mumbai

For, Prabhadevi is all set to witness the rise of a 275-metre tower on a one-and-a-half acre plot. Touted to be one of the most expensive upcoming apartments in Mumbai, the tower will have villa-like apartments sprawling across 12,500 sq ft and 7,500 sq ft.

With an average height of three metres per floor for residential complexes, 275 metres would come to 90-odd floors. But the skyscraper in Prabhadevi will have only 24 apartments.

According to Lalit Kumar Jain of Kumar Urban Development, which is building this property, this is to give each floor a feel of exclusivity. “This is an extremely high-end project with the sea link in view. We decided to maintain a distance of 50 feet between two floors to create an air of exclusivity,” he said.

Each 12,500 sq ft apartment will be a triplex with a 4,000 sq ft terrace on the first level that will have a mini putting range leading to a living room and a guest bedroom. The other two levels will have a living room, space for a gymnasium, more master bedrooms and family rooms. Each apartment will also have an individual parking space with a capacity of around five cars on the apartment’s first level with two special lifts for cars.

The 7,500 sq ft apartments will be duplexes. “The 7,500 sq ft apartments at the lower levels would cost around Rs 20 crore. But the price obviously increases as you go higher, with the most expensive apartments falling in the price range of around Rs 50 crore,” said an industry source. The lowest apartment will be at the height of 18 meters.

Though the city probably does not have any other luxury triplexes launched yet, high-end duplexes are certainly on the rise. Orbit Corp, for instance, is selling 4,500 sq ft bungalows at Napean Sea Road for around Rs 25-30 crore.

We had earlier planned villas of 12,000 sq ft, but later changed it to independent bungalows as we think there is more demand,” says Pujit Aggarwal, Managing Director of Orbit Corp. Other high-end duplexes on Napean Sea Road include Lotus Villas, the cost of which is under wraps.

In Lower Parel, 5,000-6,000 sq ft duplexes at Lodha Bellissimo are going for Rs 20-25 crore. On the other hand, two 60-storey Indiabulls towers – Sky and Sky Suites — that come with a combination of smaller apartments, duplexes and penthouses are commanding anywhere between Rs 7.5 to 25 crore, depending on the size.

“Sky is sold out while Sky Suites is 45 per cent booked. It’s the value being created that is important. I strongly believe the real estate market has bounced back,” said Gagan Banga, CEO, Indiabulls.

Mumbai Real Estate @ Investment News India

DLF says sells homes worth Rs 4.8 billion in Jan

2010-02-10T05:09:00.002-08:00

DLF Ltd, India's top listed real estate firm, sold homes worth Rs 4.8 billion ($103.1 million) in January, group's Executive Director Rajeev Talwar told reporters on Wednesday.