$10 bn ready to make India entry through FVCIs

Mumbai : Lack of clarity over foreign venture capital investments (FVCIs) in India has led to 83 applications from foreign venture capital firms piling up with the Reserve Bank of India for approval.

Of these, about 28 venture funds (non-real estate funds) which have sought approval have committed close to $10 billion to India, according to lawyers involved with the registration process. Most of these foreign private equity firms have given an undertaking that they would not invest in the real estate sector or in related activities.

According to sources close to the development, policymakers and financial sector regulators are working towards harmonising the regulations related to foreign venture capital investment, foreign direct investment and domestic venture capital investment.

“RBI is looking into a broad-based policy issue with regard to the foreign venture capital investments in the country,” said Akil Hirani of law firm Majmudar & Co, who is also advising a couple of foreign venture capital funds planning to register themselves with SEBI.

Although policy makers have been wary of venture funds investing in the real-estate sector, regulators have moved on to scrutinise many other applications in order to track the investors behind these funds. Because they believe that these investors are more focused on the returns they earn.

Regulators are concerned about issues such as whether these funds are beneficial for the real economy or even for the companies they seek to invest. RBI’s concerns also relate to impact of large capital inflows into the country especially into the real estate sector, which could fuel an asset price bubble. However, according to market participants, considering that a regime is already established and operational, any policy hiccups ought to be dealt with rather than keeping the proposals of PE funds on hold.

Policymakers are also looking at creating a level-playing field between foreign and domestic venture capital funds by ensuring that same tax rule is applicable to both. Foreign private equity funds now have an edge over their domestic counterparts under the existing tax system of the country as foreign funds registered in Mauritius and Cyprus enjoy the benefits of the double tax avoidance treaty.

Some of the FVCI applications pending RBI approval under the Foreign Exchange Management Act (Fema) includes Apax Mauritius, Baring PE Asia, DE Shaw Composite Investments, Fidelity India Ventures, Goldman Sachs, JP Morgan, Sabre Abraaj Infrastructure and TPG Ventures.

According to the data compiled by SEBI, total investments by domestic and foreign venture capital investors amounted to Rs 31,682 crore as on March 31, 2008, of which Rs 16,705 crore comprises FVCI.

The real estate sector saw the highest amount of fund inflow considering it as one of the high-growth areas. In 2004, SEBIhad removed the real estate sector from the negative list, an incentive given by the market regulator to encourage PE funds to register as FVCI.

Real estate agents, tour operators under service tax scanner

The tax authorities are preparing for a clamp-down on service tax evaders, especially unregistered real estate agents and tour operators.

The newly constituted Survey and Investigation Branch (SIB) of the service tax department has started scrutinising municipal corporation records, income tax returns and yellow pages, a commercial directory, to find out the real estate agents, tour operators and other service providers who are not paying service tax, an official said.

The tour and travel industry and the real estate sector, which are highly unorganised, could be major evaders of service tax, he said.

There are about 4,500 registered tour operators in the country and much more are in the unorganised sector, who are doing brisk business following a spurt in domestic and overseas travel in the recent past. In Delhi alone, there are 800 registered tour operators, said the industry sources.

Similarly, the boom in the real estate sector has given rise to a number of brokers and middlemen who are doing substantial business in the unorganised sector.

“We want to widen the service tax base and pay special attention to these sections which are neither registered with us nor pay service tax. The ground work has already been done with regard to this and we expect to complete the process soon,” the official said.

After completing the exercises of data compilation, the SIB would conduct physical surveys to identify the service providers who are not registered with the department, the official said.

Pointing out that the exercise would bring tour operators and real estate agents within the service tax net, the official said, “They have a huge revenue potential but at present are escaping the tax net.”

In addition to government records and yellow pages, the SIB would also collect information about the service providers from various websites, which post advertisements about such services.

In the current fiscal, the service tax collections recorded a growth of nearly 30 per cent at Rs 14,838 crore in the first quarter of this fiscal. The government in the current year, according to the Budget estimates, expects to collect Rs 64,460 crore as service tax.

A Home in the UK to cost you less, compared to Delhi and Mumbai

The time is right to buy a house in the UK, as the slowdown in the global economy has made residential properties cheaper there. Prices are falling by about one percent every month and it is estimated that there might be a 12% decrease in prices this year. A report by JLLM says that the number of Indians buying houses in the UK is set to increase hugely, by 2017. Currently, property prices in cities like London and Birmingham are between 20 to 60 percent lower than in major Indian cities like Mumbai and Delhi. With prices falling further, it might get easier to afford a house in the UK, than within the country, where in some areas, prices are still bullish.

Realty Players to develop more economical houses to attract buyers

Increasing interest rates and rising construction costs are changing the mood of many aspiring homebuyers, because of which real estate developers are changing their strategy to keep their business going. They are now switching either to so-called affordable housing projects or high-end customers, who mostly buy cash down or with limited amount of borrowing. Many developers are opting for low-cost housing – the latest to come on board is Bangalore-based Puravankara Projects, which is planning to build 65,500 low-cost flats in five southern cities over the next five years. Realty major, Omaxe is building 1 lakh houses across cities in northern India – the flats would be priced between Rs 1,000 and Rs 1,100 per square foot. “Most large developers have now woken up to the fact that affordable housing projects have the fastest absorption rates and are focusing on this,” said Mr. Anuj Puri, chairman of realty consultancy company, Jones Lang LaSalle Meghraj.

ANSAL announces Rs 36 billion investment in SEZ and IT parks

Ansal Properties & Infrastructure Ltd has announced a total investment of about Rs36nm SEZs and Its. Ansal API is one of the first developers in India to obtain notification for setting up of IT/ITES SEZs in the country. The company currently has approval for setting up IT/ITES SEZs in Greater Noida, Gurgaon and Mumbai. While the IT SEZs have been named as ‘The Campus’, the IT Parks have been christened ‘Net City’. Construction, for some of the projects has already commenced and they are expected to be completed in the next five to seven years. The total area to be developed under the scheme would be approximately 270 acres with built-up area of about 17mn sq.ft. Strategically located close to IT companies, expressways and airports, these SEZs will offer immense value to IT/ITES companies in the area besides contributing to its development. Based on the walk-to-work culture, the proposed SEZs will consist of an IT Zone (Processing area), a commercial zone (non-processing), a residential zone and a recreational area. These SEZs will be equipped with all modem amenities like 100% power back-up, professionally managed 24X7 facility services, central air conditioning etc. Special attention has been given to the architecture in order to maximize space utilization. Large and efficient floor plates, lesser columns and high ceiling height and ample car parking space are some of the other features that will be offered to customers. These SEZs / Parks will also endeavour to adhere to energy efficient building practices.

Speaking on the occasion, Pranav Ansal, Vice- Chairman and Managing Director, Ansal API said, “We are extremely delighted to announce our expansion into West India with the launch of IT SEZ ‘The Campus’, Khopoli. These SEZs are aimed at growing IT & ITES companies who are choosing to set up centers in adjoining areas of Tier- 1 cities in view of the global economic pressure to reduce costs and maximize returns. Ansal API SEZs will offer them the best value for money.” Earlier in the year, Ansal API announced Haryana’s first private Integrated Industrial Park – Pioneer – spread over 100 acres at Pathredi in Gurgaon.

Raheja to develop engineering SEZ in Gurgaon

Realty firm Raheja Developers Ltd today said it would develop an engineering SEZ in Gurgaon over the next three to five years. The firm will be spending Rs 4500 crores on the project. The project is expected to create job opportunities for around 50,000 people (including both direct and indirect) and has a potential to generate annual exports of Rs 1,000 crore.

“This is the first notified engineering Special Economic Zone (SEZ) in the northern India. The project cost to develop this 255-acre SEZ is about Rs 4,500 crore,” Raheja Developers Chairman Navin M Raheja told reporters here. The investment would be funded through a mix of debt, equity and internal accruals, he said. “We are looking at strategic investors as well,” he added. Raheja said the first phase of the project that involves the notified 255 acre would be completed over the next 3-5 years. The company plans to increase the size of SEZ project and is in talks with land owners. He said the expression of interest from the companies has been sought and deadline for submitting the same is September-end. “We are in talks with at least 10 firms which have shown interest in setting up facilities in our SEZ,” Raheja SEZs Ltd Director Ajay Midha said, but refused to name any.

Omaxe to develop medical college & hospital at Saharanpur

New Delhi : Omaxe Infrastructure & Construction (OICPL), a wholly owned subsidiary of Omaxe, has received a Letter of Intent for the construction of an Allopathic Medical College and Associated Hospital at Saharanpur, UP, from the UP government through UP RNNL.

The construction value of the project is Rs 250 crore. According to Rohtas Goel, CMD, Omaxe, “The financial standing of Omaxe and rising demand of the projects will further add to its value. Omaxe has prepaid 60% (Rs 180 crore) of the total term facility (Rs 300 crore) taken from Indiabulls Financial Services.

In spite of this term facility being for three years, it was felt by the company to prepay the loan to free up equity. Omaxe is planning to retire the outstanding of Rs 120 crore soon. This step of Omaxe shall further strengthen the trust of investors in the company.

Plot sells for 10.5 cr per acre on lease

In a recent bid, Bangalore based Mantri Developers acquired lease for a 4.9 acre plot of land at Siruseri IT Park on the IT Highway for developing an amenities centre. The price Rs 10.5 crore per acre for a 75-year lease is considered a new benchmark in Chennai real estate . The builder is already promoting luxury and business hotels in Bangalore and Hyderabad and IT space in Bangalore and Pune. The group started by Sushil Mantri with a low capital of Rs 10 lakh in 1999 in Bangalore, has so far completed more than a dozen residential projects in Bangalore.

The plot of land, located at the entrance of the IT Park and adjoining the IT Highway, was originally acquired by the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT). It was handed over to the Tamil Nadu Road Development Company (TNRDC) which develops the IT Highway also known as Old Mahabalipuram Road (OMR) or Rajiv Gandhi Salai on a 99-year lease for developing world-class facilities for the IT and ITES sector as well as the road users. The TNRDC’s earlier efforts to identify a business partner for the project failed because all were far below the upset price of Rs 10 crore fixed by the company. When the TNRDC floated a revised bid recently, Mantri offered to pay Rs 10.5 crore per acre and emerged successful. The TNRDC will hand over the land on a 75-year lease to Mantri for setting up a hotel and an amenities centre with shopping mall and club house measuring roughly 6.5 lakh sq ft. The developer will be at liberty to identify a viable business proposition.

While sources in the TNRDC and Mantri refused to comment, it is learnt that the two firms are working towards the conclusion of the bid process. Mantri will have to make a one-time payment of Rs 51.45 crore for the plot of land. Mantri’s offer is more than double of what many IT companies have paid for acquiring land from SIPCOT in the Sirusseri Park .However, the commercial value of private properties along the IT Highway between Sholinganallur and Sirusseri range from Rs 15-20 crore per acre. Mantri is also developing a residential project Mantri Synergy at Padur on the IT Highway.

Realty sector finds green the colour of money

While all the real estate companies say that there is a new business opportunity in green buildings arising out of climate change, a majority of the financial sector companies say that carbon trading is the biggest business opportunity.

These are the initial trends emerging from the responses of ten companies from the financial sector and eight companies from the real estate sector during the ongoing FE-EVI Green Business Survey.

The new business opportunity in green buildings has arisen because such buildings have more saleability among customers, say all real estate respondents. In fact, they are already taking a cue from the world’s first green city, which is coming up in Abu Dhabi.

All residential and commercial buildings and properties there are required to comply with internationally recognised environmentally friendly specifications. In fact, India too has around 7 million sq ft of green building space across the country.

Besides, there are long-term intangible benefits, too. For example, all the real estate respondents say that the biggest benefit that accrues by taking action on climate change is earning better reputation among customers and investors. Despite the perceived benefits, 66% real estate respondents say that government and executive management can exert more pressure on companies to act to slow down the process of climate change.

In contrast, 67% respondents from the financial sector say that carbontrading is the biggest business opportunity arising out of climate change. The financial sector respondents are talking for the larger business community. It may be because banks are aggregators and not manufacturers. Fifty per cent banking respondents say that the supply chain is the biggest opportunity for them to reduce their carbon footprint.

Banks can influence the supply chain with their climate friendly policies and practices. For example, some banks are taking their role as change makers seriously and have started providing loans for climate friendly projects. Such projects range from harvesting rainwater to replacing lighting.

The survey is expected to be completed by September end. The Financial Express (FE) and Emergent Ventures India (EVT),a leading climate change mitigation advisory firm, are seeking responses from 300 top businesses in the country to map the greening of Indian businesses, celebrate success stories and lay down a set of climate friendly recommendations. The aim is to enable businesses to pursue a low-carbon path without comprising on growth to attain a csompetitive edge.

PBEL India plans Rs 1,200-cr project in Hyderabad

Hyderabad-based property developer PBEL India is building a township in the city at a cost of Rs 1,200 crore. Named PBEL City, the township will comprise 13 residential and two commercial towers.

PBEL City, a joint venture between PBC and Electra Real Estate, both from Israel, and Incor from India, will come up in Rajendranagar on the outskirts of Hyderabad.

Addressing the media, project executive director Anand Reddy said PBEL City was the company’s first offering in Hyderabad. It has spent about Rs 200 crore on the project for purchasing the land and creating infrastructure.

The company will raise the funds from internal sources and through banks. In the first phase, to be completed in 18 months, the project will have 500 units with a built-up area of 1,050-1,600 sft. While the second phase will be ready in 24 months, the third phase will be completed in 36 months. The units will be priced between Rs 40 lakh and Rs 55 lakh each, Reddy said.

The company is planning mega projects across the city and in other parts of the country. Over the last couple of months, PBEL had bought about 110 acre worth Rs 500 crore across various cities.

Currently, it is focusing on Hyderabad, Chennai and Mysore, and plans to spend about Rs 4,700 crore over the next three years.

Greater Hyderabad is India’s second largest metropolitan area

Hyderabad : Greater Hyderabad, which has become the second largest metropolitan area in India, will be developed as a world-class city and a model metropolis in the country, said Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy Sunday.

He asked officials of the newly constituted Hyderabad Metropolitan Development Authority (HMDA) to ensure a scientific and regulated development in the metropolitan region.

Last year 12 municipalities and several villages of the five surrounding districts were merged with Hyderabad to make it Greater Hyderabad. HMDA was formally constituted Saturday replacing Hyderabad Urban Development Authority (HUDA).

The chief minister Sunday launched HMDA and laid foundation stone for the central office of the new body, which will have jurisdiction over an area of 6,856 square km, making it the second largest metropolitan area in the country after Delhi.

The jurisdiction of the earlier body was 2,000 square km. The population coverage has also increased from 6.5 million to 7.8 million.

The government issued orders posting Indian Administrative Service officer K.S. Jawahar Reddy as the metropolitan commissioner.

The jurisdiction of HMDA covers 54 ‘mandals’ (administrative blocks) in the five districts. It includes 16 ‘mandals’ of Hyderabad, 10 of Medak, 22 of Rangareddy, two of Mahbubnagar and four of Nalgonda districts. As many as 849 villages of four districts were merged with Hyderabad.

As the city is growing by leaps and bounds thanks to the IT boom of last one decade and consequent economic activity, the government felt the need to merge the surrounding municipalities with the capital region to ensure planned development and provide better infrastructure.

The new international airport at Shamshabad, about 30 km from the city, the ongoing world-class 160-km Outer Ring Road (ORR) project, mega townships along the ORR, over 30 IT Special Economic Zones (SEZs), major real estate projects, new campuses of IT and biotechnology majors, metro rail and other infrastructure projects are expected to give further impetus to the growth.

The chief minister asked officials to ensure that there was no deviation from the approved plans for any construction activity. He assured that the government would take all steps to provide better road connectivity, 24-hours water and electricity supply and other infrastructure to all the areas falling under metropolitan region.

The missions of HMDA include promoting active participation of citizens in the process of planning and implementation of development plans, improve quality of life through planned growth and development and contribute to the creation of a cleaner and greener city.

Office rentals in Bangalore, NCR, Mumbai to stay steady

New Delhi : Office rental prices are unlikely to see any major fall across the country’s three major business hubs – National Capital Region, Mumbai and Bangalore even as the commercial realty markets in these areas are expected to witness a significant surge in supply, a leading real estate consultancy firm said.

While Bangalore is expected to witness further rise in the average office rentals, those in Delhi and adjoining areas like Gurgaon and Noida as well as Mumbai are expected to remain mostly flat in the short to medium term, CBRE said in its latest office market review for Asia-Pacific region.

Only certain small pockets in National Capital Region (NCR) and Bangalore could see a correction in prices in the near future, while any downward correction is very unlikely across Mumbai region, it said. “The National Capital Region (NCR; including Delhi, Gurgaon and Noida) is expected to witness flattening trend in rentals over the short to medium-term,” CBRE said.

“However, some micro-markets with forthcoming supply is likely to experience a margina value correction in the next six months,” it said, adding there would be significant additional supply in Gurgaon, Noida and Jasola in South Delhi. CBRE noted that in preparation for hosting the Commonwealth Games in 2010, rigorous efforts have been made to improve infrastructure all across the NCR.

For Mumbai it said, that with over one million square feet of corporate office supply currently available and another nine million square feet ordinary office space expected to come online in the next two quarters, rental values are likely to remain stagnant. CBRE said that the quantum of supply, coupled with weakening IT/ITeS sector demand, was likely to result in higher vacancy levels.

“However, in the immediate future, any downward correction in rents is unlikely,” it noted. In Bangalore, the rental values are likely to remain resilient in the immediate future due to tight supply. “However, the Outer Ring Road micro-market might see a slight correction in rental values due to the large number of developments scheduled for occupation in the near future.

“The widening of the flyover leading to Whitefield and an elevated highway to Electronics City will connect these micro-markets, thereby creating fresh demand in the above locations,” the report said.

SEZ investment to cross Rs 2 lakh cr by next year

Mumbai : Investments in India’s special economic zones may cross Rs 2,00,000 crore by next year, Commerce Secretary G.K. Pillai said in Mumbai on Friday.

“The investments, which currently stand at about Rs 77,000 crore, would cross the Rs 2 lakh crore by the end of 2009,” he said. Employment would cross 800,000 by the end of December 2009. It’s an almost 4-fold increase in employment in SEZ, he said while addressing a seminar organised by MEDC here.

“We are also happy to state that the investment in this sector has got catalyzed especially in industries that earlier did not attract investments -leather industry being one example. Further, to encourage the domestic handicrafts sector in particular, SEZs with just 10 hectare has been approved instead of the earlier 100 hectares, he said.

During the financial year 2007-08, SEZ exports worth Rs 66,638 crores has been made, registering a growth rate of 92% over the exports during financial year 2006-07.

Germany’s MPC to pump 200 mn in Phoenix Mills

Mumbai : Property developer Phoenix Mills on Friday announced that Germany-based investor MPC Synergy will invest 200 million (about Rs 1,288 crore) in the special purpose vehicle floated by the company and its subsidiaries, Entertainment World Developers (EWDPL) and Big Apple.

This is the second largest foreign direct investment in the country’s real estate sector, after Deustche Bank invested $425 million in an SPV floated by Mumbai-based Lodha Group.

MPC Synergy, a joint venture between Germany’s MPC Capital and Synergy Asset Management of Switzerland, has picked up varied stakes in the company’s 21 projects, said Mahesh Iyer, chief finance officer at Phoenix Mills. The projects are being developed at Mumbai, Jabalpur, Pune, Bangalore, Raipur, Udaipur and Chandigarh.

Private equity has emerged as a favourite option for property developers, who are hit by the credit crunch due to falling property markets, increase in lending rates, for raising funds. Recently, the realty arm of global investor Lehman Brothers invested $175 million in the Mumbai project of Delhi-based property developer Unitech.

Phoenix Mills owns 42 per cent in Indore-based mall developer EWDPL and owns majority stake in north India-based Big Apple. Shares of Phoenix Mills closed at Rs 184.80 on the Bombay Stock Exchange on Friday.

Property prices increase significantly in Punjab

According to experts, the prices of prime locations in Punjab have shot up by 40-55% in the last two years. The cash-strapped state, which needs to push the growth of industrialisation, is facing shortage of land, resulting in increase of prices. The reality can be measured from a fact that recently the state government acquired 300 acres for the upcoming Mohali international airport for which the government paid a compensation of Rs 1.5 crore per acre to farmers whose land was possessed. This was the highest ever compensation paid for acquisition by a state government to farmers which has certainly set a standard. Besides that, Punjab has fertile land and in the previous past various examples have been set where the land has been sold at exorbitant prices, said president of Punjab Builders and Coloniser Association, Mr. Kulwant Singh.

Property Tax to increase in Mumbai

The State government has announced that revision in property tax as in Mumbai would come into effect before the end of the year. For this purpose, instead of waiting till December when the state Assembly is supposed to pass a bill amending the relevant law to change the property tax assessment system, the government will soon promulgate the ordinance. The amendment to the Mumbai Municipal Act would mean the property tax would go up in the city and reduce considerably in the suburbs. Now, the city will have to pay property tax on the capital value instead of rateable system followed until now.

To combat the slump, Developers put projects on fast track

Property companies are rushing projects or cutting down on project completion time, by nearly 20 per cent in an attempt to overcome the liquidity crunch. Companies that took 3 years (36 months) on housing projects are now completing them in around 30 months by boosting efficiencies and using modern technology. One of the most significant reasons for the faster turnaround of projects is the decline in property sales by over 30 per cent in the last six months in Mumbai, national capital region (NCR) and other regions, which were the main revenue streams for developers. To add to their woes, the prices of cement, steel and labour, which account for more than half of the input costs, have risen 50 per cent over the last one year, putting pressure on developers’ margins. Construction costs, which vary from city to city, are growing 20-25 per cent every year, said industry experts.

Mumbai’s Phoenix Mills to set up mall, IT park in Chennai

Chennai : The Mumbai-based Phoenix Mills, a leading developer of malls and retail space, is setting up a Rs 850-crore mall and IT park in Chennai.

According to company officials, the company is setting up a 2.5-million sq ft mall and IT Park at Velachery, a major destination in the southern part of Chennai for retail space with major IT developments happening in the neighbourhood. The company had sometime back acquired 17-18 acres from the pharmaceutical company Raptakos Brett here.

The project, Phoenix Market City, will have 1.7 million sq ft of retail space designed by leading architects Rockwell, New York. It will have an 8-10 screen multiplex, 5-6 department stores, a large hyper-market, a home store format and one food court, apart from a fine dining restaurant, officials said.

The IT Park will be spread over six lakh sq ft and the contract has been awarded to JMC Projects. The facility will also have a hotel, Chennai’s first Shangri-La, the Hong Kong-based hotel chain with which Phoenix Mills has a hotel management agreement. Shangri-La Hotels and Resorts is an international group that manages over 53 hotels in the five-star Shangri-La brand and the four-star Traders brand.

Phoenix Mills has announced plans to set up commercial projects in Mumbai, Bangalore, Chennai, Pune, Raipur, Agra and Indore. The company has a 30 per cent stake in EWDPL India Pvt Ltd, a mall space developer that concentrates on Tier – II towns and cities.

Golden Gate plans affordable houses

Citigroup-backed Golden Gate Properties plans to invest close to Rs 2,000 crore over two years in affordable housing projects, a senior official said. The projects will be funded primarily through customer sales, apart from banks loans to the tune of Rs 500 and equity, Golden Gate managing director K Pratap said.

The Bangalore-based developer on Thursday announced plans to start construction on four township projects in Bangalore and Hyderabad, all grouped under the brandname Commune. A significant portion of each development will comprise low-cost housing units with an area of 995-1122 sq ft. “A large section of society is unable to own homes owing to spiralling real estate costs.

The Commune has been conceived to fulfill this need-gap. The starting price for the affordable housing units will be around Rs 19 lakh. These properties will be on a par with premium developments in terms of quality, treatment and amenities,” he said.

Citigroup has invested Rs 150 crore in Golden Gate and Deutsche Bank $70 million. Golden Gate plans to expand to several southern cities with affordable housing projects.

Earlier this week, Bangalore’s Puravanakara Group also outlined plans to develop low-cost housing. The Housing Ministry estimates the shortage of homes in India at 24.71 million, most of it among economically weaker sections and low-income groups.

Golden Gate’s first project, comprising 2,500 apartments on 30 acres, is located some four km off the road link to Mysore while the second will come up in the Sarjapur area on the city’s periphery on 100 acres.

In Hyderabad, the company has acquired land in Tallapur and Secundrabad. “Each project will be developed in a phased manner.

The Bangalore model will be replicated across cities with some modifications to suit local tastes,” he said. The company hopes to drive down costs by acquiring land on the outskirts of cities and using modern construction techniques to bring down labour count by 75%.

Omaxe Palm Greens Greater Noida

Omaxe Palm Greens spread over 50 acres land, located in the National Capital Region at MU Greater Noida, and thoughtfully conceived to give you a world-class ambience and top of the line benefits.Omaxe Palm Greens is made up of over 1243 high construction quality and elegant apartments that live-up to everything one looks for in life. And with the options ranging from 3 Bedrooms, 3 Bedroom + servant quarters

Features	Omaxe Palm Greens Central park
	Swimming Pool
	Stream
	Tennis/Bedmintion court
	Clock Tower
	Gate House
	Pedestrian Plaza
	Jogging/walking track
	Lake side restaurant
	Kids play area
	Special Garden

Locations : MU Sector, Greater Noida

Type	Size(Sqft)	Price PSqft(Rs)	Amount(Rs)	Booking	Status	Floor Plan	Specials
3 BHK	1700	2751	46,76,700	15%	Booking Open		Incl Inaugural Rebate Rs.150/-
3 BHK + SQ	2000	2751	55,02,000	15%	Booking Open		Incl Inaugural Rebate Rs.150/-
4 BHK + SQ	2435	2751	66,98,685	15%	Booking Open		Incl Inaugural Rebate Rs.150/-

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Marriot-Uppal Hospitality to launch hotel in Gurgaon

Marriott International along with Uppal Hospitality plans to launch a 206 room JW Marriott hotel in Gurgaon. The hotel, which is located on the Delhi-Jaipur highway, is expected to open in mid 2009.The hotel will offer a spa and fitness centre with gym, an outdoor swimming pool, pool bar, gift and retail shops, business centre, executive lounge and 1, 220 sq m of meeting space. A 400 sq m ballroom will be available for meetings, as well. F&B options comprise a casual restaurant, two specialty restaurants and a café-deli. Other amenities include a bar and a lobby lounge.Marriott has 24 properties in various stages of development. Five properties will come up under the JW Marriott Hotels luxury brand; one hotel under the Ritz Carlton umbrella; 11 Courtyard by Marriott projects will launch in the upper-moderate segment; three Renaissance hotels and two Marriott hotels are scheduled for the upmarket, deluxe section and two luxury Marriott Executive Apartment properties will cater to long stay travelers.

Rahejas offer farmers built-up area in SEZ to tackle opposition

New Delhi : In order to contain the opposition from farmers in aggregating lands to launch a Special Economic Zone, Gurgaon based-Raheja Developers Ltd has adopted an unique method. The company gave the farmers, whose land it is acquiring, an option to own around 15240 sq ft built up area for every acre of land given to the project.

The developer has already acquired 255 acre of land in Gurgaon and got the SEZ for engineering activities notified. Chairman of the company Navin Raheja said that with the current rental rates going in the area, a farmer will earn around Rs 2 lakh to Rs 3 lakh per month per acre of land. The capital cost of the land, in the area is around Rs 1.5 crore per acre. Raheja said that lease rentals income will increase over a period of time.

However, the monthly payment against the lease rentals will start accruing only after the SEZ become functional. Raheja said that entire infrastructure in the zone will be developed in three to five years at an investment of Rs 4,500 crore.

With the present model of making farmers a party of the development, the developer has not only able to acquire the land successfully but also it is getting support from the local population for the speedy completion of the project. Raheja said that around 40% of the farmers have chosen for the lease-rental model. The company plans to increase the size of SEZ project and is in talks with land owners.

Raheja said unlike the other SEZs in the country, which are facing stiff opposition from the local population and getting delayed, his project is on time. The SEZ has also received approval for authorized operations. Raheja said a number of domestic as well as foreign companies have shown interest in opening their manufacturing units in the SEZ.

In fact, this will be the first notified engineering spe­cific SEZ in northern India. He said the investment would be funded through a mix of debt, equity and internal accruals, he said. “We are looking at strategic investors as well, he added.” The project is expected to create job opportunities for around 50,000 people and has a potential to generate annual exports of Rs 1,000 crore.

Raheja said the expression of interest from the companies has been sought and deadline for submitting the same is September-end. “We are in talks with at least 10 firms which have shown interest in setting up facilities in our SEZ,” he said. It has also promised jobs to two person from each family of farmers whose land has been acquired, he added.

Goa forbids land allotment for SEZs

Goa government has recently stated that no lands within the industrial estates owned by Goa Industrial Development Corporation (GIDC) should be allotted or leased for establishing special economic zones (SEZs). In a written reply tabled on the floor of the house, chief minister Digamber Kamat said that if any land has been leased, the lease should be immediately revoked or cancelled. The state-government run GIDC had earlier issued show cause notice to revoke lands to seven SEZ promoters, which were later revoked forcing the state developers to approach the High Court.The GIDC has issued notices to meditab specialities (pharma), Peninsula Pharma Research Centre Private Limited (Bio-tech), K Raheja Corp Pvt Ltd (service), Paradigm Logistics and distribution pvt ltd (IT), Inox Mercantile co. pvt ltd (Bio-tech), Planetview Mercantile Co Pvt Ltd (Gem and Jewelry) and Maxgrow Finlease Pvt Ltd (IT). The chief minister stated that the six companies have already moved to the high court challenging the show cause notice. The court has granted status quo to the petitioners.

Largest International Real Estate referral program launched

The International Real Estate Advisory Board has launched the largest International Real Estate referral program in the world and has invited Real Estate Professionals from around the globe to become a registered IREAB Advisor and earn a significant supplemental income via International Real Estate Referrals. IREAB’s Referral Program is destined to become one of the most valuable resources for every Real Estate Professional and Real Estate Developer in the world. The launch of the IREAB Advisor Referral Program benefits Registered IREAB Advisors (Real Estate Professionals) with an extra source of income that actually generates significant income. On the reverse side of the coin, the Referral Program will also provide Real Estate Developers with a meticulously organized (world-wide) referral program.It’s a Win-Win-Win for everyone, especially International Real Estate Investors and Residential Home Buyers of International Real Estate because the majority of Referral Contracts registered with IREAB is considered to be privileged information. IREAB International Real Estate Analysts will only work with select development projects which are deemed to have a high probability for Return on Investment. All referral contract listings have been analyzed and assessed by top IREAB Analysts with focus to the best interest of Investors, Developers, IREAB and registered IREAB Advisors. IREAB’s mission is to provide free advisory that accesses the largest organized international real estate advisory referral program in the world.

Matheran Realty to come up with Low-Cost Houses

Mumbai-based developer, Matheran Realty has come up with an integrated township at Karjat, 80 kms from Mumbai, where a basic one-room flat would cost as little as Rs 3 lakh. The cost of construction, at Rs 999 per sq ft, is a fraction of the Rs 2, 500-3,500 prevailing in other parts of the city as well as other major metros. At this rate, the bigger flats in the township, in the size of 500 sq ft and 700 sq ft, are priced at Rs 5 lakh and Rs 7 lakh respectively. The booking for the project has already been started and 3, 000 flats will be handed over in the first phase between January and June 2009. The name of the project is Tanaji Mulsure city (TMC).

Residents of Dwarka oppose DDA’s Plans to develop Megacities

The Dwarka Forum – a collective of residents from residential complexes and the Dwarka Kshetra Gram (DKGK), a group of 20 villages have asked the DDA to put on hold its expansion plans, keeping in mind the depleting water table and shrinking water sources. These residents have joined forces to oppose Delhi government’s move to add five new townships to the city. “Dwarka does not even get half of the water that it should. Villages around Dwarka are dependent on tube-well water. There is no piped-water from the Delhi Jal Board for them and they are forced to use unfit tube-well water. It is impractical to increase the city limits,” said Mr. Diwan Singh, a member of the Dwarka Forum.

Tallest building in India

India will get among its first tallest buildings. The tower, to be built in Kolkata, will rise to a height equivalent to 83 storeys. “We will actually construct 54 floors, but at 250 m, it will be easily be the tallest commercial structure in the country, its height corresponding to an 83-storey tower,” says Mr. A.N. Shroff, the leader of the  consortium Diamond Group that is developing the building. The project is coming up on the vacant land that was once the proposed site for Grand Hyatt. The 54-storey structure will tower over the Chowringhee skyline, housing 10 levels of car parking at the base and a helipad on top. “The Chowringhee building will have many firsts, like a 4.2 m floor-to-ceiling height, a grand entrance lobby 42ft high, a sky garden on the 29th level, restaurants on the 50th and 51st floors and three levels of viewing galleries above that,” said Mr. Vinoo Chadha, principal architect for the project. The cost land for the proposed building is Rs 432 crore, construction is estimated to cross Rs 200 crore.

Dubai-based Developer’s Project in Mumbai to take shape in October

Dubai-based based Sternon Real Estate and Mumbai-based Garnet Construction said their NRI township,’Magic Hills Residences’ in Navi Mumbai will start construction works in October and complete the first phase in 18 months. Mr. Hussaini F. Nalwalla, Managing Director of Sternon Group, said, “The main benefit for NRIs who booked in the first phase of Magic Hills is that they will enjoy a huge price advantage, as the rate has already appreciated three-fold. We understand the delay in the start of construction has caused concern among some sections of NRIs, but we assure all investors that the project is all set to take off from October.” The project is being marketed exclusively to non-resident Indians, especially in UAE. The project has attracted global interest, and Phase 1 has already been sold out.

Real estate firms delay plans, shares face the heat

Mumbai : Most Indian developers have hit the brakes on fresh land acquisitions as a slide in the stock market, rise in interest rates and aggressive demands of the private equity investors have limited funding options.

After five years of boom, real estate firms in India are grappling with tepid sales and cash crunches as inflated property prices and interest rates at near-decade highs scare away buyers.

“The aggression for acquiring land has disappeared. Deal volumes are down 35-40 percent, though prices still haven’t moved significantly,” said Anuj Puri, who heads property consultant Jones Lang LaSalle Meghraj.

“My land division guys are crying.” This is a sharp turnaround from as recent as a year ago, when property firms, flush with funds from public offers or advance bookings, rushed to bid for land parcels, even at distant locations in metros, and in second-tier towns.

Even mid-size developers in India say they hold land reserves of 60-100 million sq ft, sufficient for projects planned in the next 3-4 years. But slumping demand could drive down land prices soon, leading to some distress sales, officials say.

“We have not acquired an inch of land in nine months. I think by December-January, land prices should soften,” Vyomesh Shah, Managing Director of Akruti City told Reuters late last month. Analysts say shortage of cash has also forced developers to put off new project launches and delay work on current projects. Some planned projects may not even materialise.

“Developers normally did construction through booking advances for planned projects. Sales are down, so obviously there are delays,” said an analyst at a Mumbai-based brokerage that has revised downward target price on sector stocks by 15-25 percent.

Rising inflation and an expected slowing of the economy will only worsen the situation, say analysts, who are now reviewing their target prices on these stocks. An analyst at a domestic brokerage said it had recently changed valuation methodology to net-asset-value basis, which had led to some downward revision in target prices. The new method values companies based on current assets rather than future cash flows, he added. CLSA lowered its net asset value estimate for HDIL by 29 percent, citing higher costs on account of rising interest rates.

STOCKS MELTDOWN

Real estate stocks have been among the worst performers in the Indian stock market, as funding concerns and the sub-prime crisis drove away investors.

Shares of the four largest real estate firms in the country by market capitalisation, DLF, Unitech, Housing Development & Infrastructure and Indiabulls Real Estate, are down by 50-65 percent so far in 2008. In comparison, the benchmark stock index BSE Sensex has lost 27 percent.

While most real estate firms are still getting by with advance bookings done 18-24 months ago, a sustained lack of demand in the coming quarters may worsen the situation. “Right now, it is only depletion of paper profits,” said Nayan Bavishi of U.K.-based investor Baron Group International, which invests in real estate projects in India and Dubai. “Wait till after Diwali. Their pockets will get eroded further.”

NRIs more attracted to real estate back home

At a time when the US and European economies are spiralling down, the Indian economy in general is looking up, despite the current slowdown. Not surprisingly the NRI is investing in various sectors, including real estate. Several real estate projects across India have garnered approximately 10-20% participation from NRIs.

The return on investment provided by Indian real estate has been found to be more attractive than that offered by developed nations. Also the simplified process of investment has reversed the equation and many NRIs have been consistently investing in properties.

Rajesh Goenka, chairman and CEO, Axiom Estates, the international property consultants who have several active NRI clients says, “They are the most affluent lot among real estate buyers in India, showing interest in buying large chunks of land in their home country. They are not affected by the current slowdown, as they take a long-range view of the whole scenario. They have faith in the Indian economy, and firmly believe that the prices will appreciate by at least 10 to 15 per cent every year. They see the downturn as an opportunity to invest in large chunks of land or even developed areas which they get at a good discount from even the top developers.”

He adds, “According to our assessment, despite a slowdown in the last six months, the interest of the NRIs has increased almost by 20-25% every quarter, that is almost two to two-and-a-half times in the last two to three years.”

Raminder Grover, managing director, Homebay Residential, Jones Lang Lasalle Meghraj says, “Many NRIs in the US and UK are not as confident as before of sanctity of their employment, while others are disturbed by negative economic patterns across developed countries. They see greater potential for India overcoming current economic setbacks. Sentimental attachment to their country of origin is another reason.”

NRIs can expect appreciations anywhere upwards of 15% per annum and rental yields of 4 to 6% on his property in India. There are different types of NRIs, as Akshaya Kumar, MD, Parklane Property Advisors, puts it. “The Gulf NRI is one who is bound to return. NRIs are looking for decent returns, and might think of holding property in India, while investors from UK and USA are pure investors. NRIs mostly have an affinity to the areas they come from,” he says.

Pune, Mumbai, Indore, Baroda, Bangalore, Chandigarh, Gurgaon and Kolkata and Goa seem to draw the highest number of inquiries. So do second home destinations and extended suburbs. Those with business aspirations are investing wherever IT/ITES is making its presence felt.

According to Mr. Vidhan Choubey, senior VP, Lodha Constructions, “The property price upswing seen in the Indian market has made NRIs very bullish about the Indian real estate. NRI segment contributes to about 25-30 % investment, both for the end-use and for investment.” Mostly all sectors including residential, commercial, retail have seen good NRI investment.

Ramesh Bijlani of Ekta Supreme Group adds, “Many NRIs have shown keen interest in luxury homes in places like Khar, Bandra and Powai due to their vicinity to the airport. Also there has been interest in projects in Kandivali and Borivali. For many Maharashtrians abroad, Pune is the preferred location for investment. Many a times, a crisis situation in their country brings them to other countries for investment.”

As opposed to earlier times when an NRI had to struggle with various rules, income tax and other issues, these days the NRI is being welcomed with open arms, and this has elicited an extraordinary response.

UK Realty Developers trying to woo Indian Buyers

The property agents of UK are targeting an estimated 1.25 lakh Indian dollar millionaires, who might invest nearly $30 billion (Rs 1.2 lakh crore) over the next decade in London. Home prices in the UK have fallen due to the loan crisis and it is anticipated that rich Indians could stabilize the market. Some agents like Berkley Homes are flying in senior executives to make direct contacts with would-be buyers in India to woo them to London, particularly to addresses like Knightsbridge and Kensington or places like Hampstead and St. John’s Wood, which have an abundance of Indians. “With relaxed rules in India and the burgeoning economy, middle class in India is now showing keen interest in buying properties here. Over 100 enquiries have come in, in the last few months. Many among them are serious buyers,” Mr. Jaideep Singh, who heads the India desk at Knight Frank said.

Good news for Property Buyers

For all those who are dreaming to own a house despite the high home loan rates, there is some good news. The costs of residential properties across four major markets of the country have stabilized during the April-June period. According to the report by global realty consultant, Cushman & Wakefield (C&W) on India’s residential sector, the availability of new supply, shrinking demand from investors and increasing rates have led to the stabilization of capital values in both high-end and mid-range residential segments across the National Capital Region (NCR), Bangalore, Mumbai and Pune in the second quarter of 2008.

Saffron Asset to raise Rs 840 crore via property fund

Realty fund to launch Shariah-compliant, India-specific corpus in 6-9 months.

In a significant move towards tapping funds for the cash-starved Indian realty market, Saffron Asset Advisors, a Mumbai-based realty fund manager, is planning to raise a $ 200-million (nearly Rs 840 crore), Shariah-compliant and India-specific property fund from international markets in the next 6 to 9 months.

According to realty investment experts, this could be one of the first India-focused Shariah-compliant property funds.

Shariah-compliant ventures follow Islamic principles and accordingly, abstain from investing in businesses such as alcohol, tobacco, pork products, conventional financial services (banking, insurance), weapons, defence, and entertainment. They do not invest in interest-paying instruments and instead may hold cash on a temporary basis.

Saffron, which manages the real estate investments of NYSE Euronext-listed Yatra Capital, is planning to raise these funds from Middle-East, Malaysia, Indonesia, where Shariah funds are available for investment. The company is planning to invest the funds in residential projects in the country, where sales have gone down by 30 per cent in the last six months, tightening funds for property developers.

‘’We will be looking at raising such a fund soon. There is a lot of Shariah funds available and India is well positioned to take advantage of that,’’ said Ajoy Veer Kapoor, managing director of Saffron Asset Advisors, which has raised and invested $ 425 million in the country, so far.

Investment advisors also believe that it is the right opportunity for tapping Shariah funds abroad when Indian realtors are reeling under cash crunch due to higher interest rates, drastic fall in property sales, crash in stock markets, among others.

“Shariah funding is suitable for India when stock markets are falling and debt market is drying up in the country. In the coming years, we can see a significant Shariah funding in the country,’’ said Ambar Maheshwari of global investment advisory DTZ.

In one of the first Shariah-compliant transactions in the Indian property market, TAIB Bank, a Bahrain-based bank, picked up a 26 per cent stake in Anant Raj Projects, a subsidiary of New Delhi-based realtor Anant aj Industries (ARIL), for Rs 216 crore.

A clutch of Shariah-compliant mutual funds have applied with capital markets regulator Sebi to set up their operations. Taurus Parsoli Ethical Fund is expected to launch a Shariah fund by the end of this month after Sebi approval and a host of other shariah-compliant funds are expected to be launched soon.

Saffron is also planning to launch a bouquet of funds focusing on India, with a total mop-up of Rs 4,000 crore in the next couple of years. Starting from real estate, the company will launch sector-specific funds such as healthcare, logistics, infrastructure, hospitality and so on.

The company has already launched Saffron India Real Estate Fund-1 and done its first closure of Rs 300 crore with Standard Life of United Kingdom. Yatra and Saffron Real Estate Fund I (SIREF I), Saffron’s two investment funds, picked up 30 per cent in a realty project of Parsvnath Developers in Mumbai for Rs 186 crore.

Saffron has plans to close the Rs 2,000-crore offshore fund by September this year, which will invest in hotels, warehouses, residential apartments and commercial offices across the country.

Kapoor said once the property fund is invested fully, the company would launch sector-specific funds in late 2009. Saffron is planning to launch Rs 300 crore domestic real estate fund, which will be invested in non-FDI-compliant projects in the country.

“Given the current global economic situation, fund raising is slightly challenging. However, if the fund manager can withstand the due diligence of investors, then there is substantial money available for India,’’ Kapoor said.

Massive project being developed in Chembur, Mumbai

The huge project is being developed and executed in Chembur, Mumbai by GA Builders, an “RNA Corp Group” company that would provide “New Homes” to more than 1950 tenants, according to a media release. The Subhash Nagar Colony, built by MHADA, is about 55 years old and comprises 57 buildings that house 36 members each. On completion of the mass housing project, the tenants would be re-housed in flats with an area of 320 sq. ft. plus 65 square feet in the form of a flowerbed, niche or dry area with all necessary amenities. After obtaining all the requisite approvals for the redevelopment of the project and after setting up the transits for tenements, the company is all set to make its mark in Mumbai real estate sector.

“We have so far built 744 flats for the residents in five buildings, and have finalized plans to build eight more buildings for 546 families who have signed for redevelopment.” Mr. Manoj John, spokesman for RNA Corp said. He added that more than 1300 families out 1950 have accepted their plan to turn Subhash Nagar into mini-township. Mr. John further said “Considering the sheer scale of this project, we have undertaken extensive infrastructure enhancement drive that includes setting up of drainage and sewerage infrastructure, underground water lines, recreation grounds, playgrounds, internal roads. Underground and overhead tanks will ensure uninterrupted water supply with an added provision for piped gas connection.”

Besides the amenities, RNA also provides for a “Zero Maintenance Cost” for the society by ways of issuing fixed corpus to each member of the society. A Fixed deposit of the aggregate of the corpus funds generates monthly interests to take care of the maintenance and also meets other costs to be borne by the society, the release added. Additionally, RNA will also help the tenants during the transit period by providing them with the cost towards brokerage for rental accommodation, the rentals and shifting charges. With over two decades in the construction industry, RNA Corp’s expertise and knowledge of local partners coupled with its strong focus on customer satisfaction, has resulted in gaining an impeccable reputation and setting up a successful track record of performance.

Upcoming SEZ at Nellore

The Nellore district of Andhra Pradesh is experiencing the development of a multi product SEZ (Special Economic Zone) about 55 km from Chennai. The sprawling 5000 acres private city on the National Highway-5, a part of the golden quadrilateral connecting the four major metros with well-demarcated industrial zones and an adjacent domestic tariff area in the bordering district of Andhra Pradesh, is set to have the strategic advantage of sharing a proximate corridor with Sriperumbadur autocomponent cluster – outer of Chennai and manufacturing cluster units near Gummidipoondi and other manufacturing industries – located north of Chennai. The city is also close to 3 sea ports and 2 airports with 2 sea ports having closer access to the Ennore (40 km) and Chennai ports (65 km) and with one international airport (75 km) also in Chennai – all opening a floodgate of opportunities for jobs and businesses between Sri City and Chennai. The new SEZ is envisaged to generate employment for 1.75 lakh people with an overall investment of Rs 17,500 crore, said Chief Minister of Andhra Pradesh, Y S Rajasekhara Reddy in his keynote address.

Explaining India’s rationale in jumping the SEZ bandwagon, L B Singhal, director general of export promotion council for EOUs and SEZ units, ministry of commerce, government of India, said the country’s venture is based on the success of 3,600 SEZs generating 420 lakh jobs around the globe. “SEZs in India have attracted investments to the tune of Rs 73,000 crore and contributed to the export kitty of around Rs 60,000 crore, providing employment to around 3.30 lakh people in the country,” he said. Lauding the government’s role in roping national and international SEZ developers, Bhaskar Subramanian, associate director, PWC (PricewaterhouseCoopers) said the government sops in both direct and indirect taxes in various state governments is encouraging various reputed players both national and international to set up shop in India. Ravindra Sannareddy, chairman, Sri City (P) Ltd said the setting up of 5000 acres SEZ and DTA (Domestic Tariff Area) encompassing a landmass in Nellore and Chitoor districts of Andhra Pradesh in a way is repaying the debt of gratitude he owes to his native region of the state.

Real Estate Atmosphere Is Getting Gloomy

Thanks to choppy economic conditions, the real estate market continues to slide and some top builders expect a substantial dip in their sales this year. Mr. Niranjan Hiranandani, Managing Director, Hiranadani Constructions said, “Due to a slump in the real estate market, our forward budget planning has come down by 15%. Hence, by this year end, we expect our overall sales to dip by about 20% to 25%.” Earlier this year, the company was expecting a rise in its budget by about 35%, but calculations have gone awry. However, he feels that the market dynamics are still strong and there are a number of opportunities available for the realty market to grow in the long term. Mr. Hemant Shah, Chairman, Akruti City believes that only after Diwali, the real estate market will start showing some signs of improvement.

TCI to foray into real estate sector

Transport Corporation of India, so far engaged in movement of cargo over land and sea, is planning to venture into the real estate sector with pan-India presence. The company has 200 properties and would develop a number of them for residential and commercial projects. Apart from the foray, TCI also plans to build a number of large warehouses across the country. It already has 7.5 million sq ft of warehousing facility available which it plans to increase to 12.5 million sq ft in the next 2-3 years. It is also looking at opening offices in China, Thailand and in few European countries in the current financial year. The company would also be investing Rs 200 crore in the next two years for purchase of trucks and ships.

Apply for joint loan and get tax benefits

In case both husband and wife are working or have separate sources of income can apply for a joint loan for purchase of a house. This way, the loan eligibility and amount also increase. Under the Income Tax Act, tax benefits are available on housing loans and the interest paid on them. In case of joint loans also all the co-borrowers can get tax benefits. Co-borrowers, who are also co-owners, are eligible for tax rebate in the proportion of their share in the loan. The repayment capacity of each spouse should be taken into account while deciding on the shares of the loan. The shares may be any ratio. The tax benefits would be shared in that proportion only. One should specify the share of the property and other loan details on a stamp paper.It needs to be ensured that both should be co-owners of the property. The ownership of the co-owners of the house must be co-borrowers as well. It is essential for co-borrowers to be co-owners in order to claim the tax benefits. One cannot get tax benefits if he is just a co-borrower but not a co-owner. In case a borrower pays Rs 1 lakh as interest and Rs 25,000 as principal, in case each has an equal share in the borrowing, each can claim Rs 50,000 against interest and Rs 12,500 against principal in their respective income tax returns. Each borrower needs a copy of the borrower certificate. The borrowers should take the interest and principal certificate from the bank and each can submit copies of the certificates along with a copy of the agreement signed between them to claim tax relief. The co-borrowers should enter into a simple agreement with the spouse on a Rs 100 stamp paper. This agreement should basically contain the share of the ownership along with that of the home loan availed by the couple. If one of the co-owners does not have any income, then the other co-owner should enter into an agreement with the spouse. The agreement should state that the entire repayment is met only by one borrower’s income. This would ensure that the main applicant will have 100 percent beneficial home ownership and consequently he can enjoy all tax benefits applicable to a single borrower. The repayment of the loan may be repaid from a joint bank account, where both the husband and wife share the funds. Another option, although less popular, would be to share out the EMIs between husband and wife and both pay a specified number of cheques for the loan repayment. It would need to be ensured that the repayment of the loan is made in the same ratio as the joint borrowing. Further, each of the borrowers should have a demonstrable source of income to justify the repayment of loan. The maximum tax deduction allowed for a single borrower is Rs 1.5 lakhs. This deduction would apply to each borrower. A proper record of the respective shares of borrowings needs to be maintained to prove the shares of each of the borrowers.

Marwari bond is fuelling real estate market in Jodhpur

Jaipur’s loss is Jodhpur’s gain. The downfall in the state capital’s property market post-bomb blasts, which had ripped the city apart in May, has steered investors to look westwards. This apart, the strong Marwari bond is fuelling the real estate market of Jodhpur. Marwari business community from across the globe is investing heavily in their hometown. Marwaris may run their business anywhere in the world but they don’t leave their roots. They prefer to have a base in their home town. This has created a big demand for prime properties in the city which is expanding horizontally on all sides. Apart from that, a large expatriate population working with the armed forces, railways and corporates form the biggest customer base. The simplicity and easy-life of the city never let them off post-retirement. Driven by the local residents’ wish to live outside the congested walled city, the periphery of Jodhpur is witnessing a real estate boom. Even old residents of the main city prefer a house on the outskirts for open space and better infrastructure in terms of water, road, electricity and parking facility. In fact, retail and commercial rates are riding on corporate demand for retail and office space within city limits and the outskirts too. Changing consumption patterns, shopping centres, cineplexes and malls are replacing the old structures which were once the identity of this heritage city. Major players such as Ansals, Tulip in collaboration with Jodhpur royalty, Khalsa Developers and Ashapurna are coming up with mega malls to cash in on the retail boom. Many banks, retail and business houses with a pan-Indian presence have brought their zonal/ regional office spaces here. Zee group’s Ecity Bioscope has already entered the city in Ashapurna Mall, while Reliance Hyper will start functioning soon at the same mall. Being an army and airforce base, Jodhpur offers a safe and secure residential option.

ETA Star to come up with a township In Sriperumbudur

ETA Star Property Developers Ltd is planning to come up with a mega integrated township on a sprawling 400 acres of land at Sriperumbudur near Chennai with an estimated cost of nearly Rs 7, 500 crore, said Mr. P H M Syed Ismail, Managing Director, ETA Star Property. Of the projected 3 crore sq ft built-up area, nearly 70% would be towards residential and the rest will be for commercial and other purposes. It will house IT SEZ, a medical college with a hospital, hotel, multiplexes, commercial space, school and all basic facilities.

Chidambaram requests banks not to hike interest rates

Finance Minister P Chidambaram requested public sector banks not to increase interest rates for home loans up to Rs 30 lakhs. He also asked the banks to lend more to consumers even as the Reserve Bank of India is trying to moderate credit growth to contain inflation. Taking cues from the North Block, most banks have already left interest rates untouched in the above categories. Chidambaram also impressed upon the banks’ chiefs to increase disbursement of auto loans as well as personal loans by keeping interest rates affordable, sources added. Some banks such as the Punjab National Bank, which have raised interest rates for existing borrowers in these categories, have given assurance that they will take another look at these portfolios.

“(Responding to the monetary policy) Public sector banks have increased their benchmark prime lending rates by 75-100 basis points. Banks have said almost unanimously that it will not impact existing home loans up to Rs 30 lakh, auto loans and education loans,” Chidambaram told reporters after meeting the chiefs of public sector banks here.

Taking a feedback from banks, Chidambaram said credit growth will be brisk this year. He said advances are likely to grow by over 20 per cent, while deposits more than 17 per cent. Most banks have conveyed that they were not witnessing any slowdown in credit demand. However, there was no growth in farm credit due to the relief scheme.

RBI has pegged the credit growth at 20 per cent and the deposit growth at 17 per cent for the banking industry in 2008-09. “Deposits are growing at a satisfactory rate compared to last year. Advances are higher compared to the last year (in the first quarter),” Chidambaram said.

Reliance ties up with Vornado

Mukesh Ambani-led Reliance Industries that currently operates over 700 retail stores in multiple formats in India announced a 50-50 partnership with US-based real estate investment trust Vornado to collectively invest $500 million in a shopping mall joint venture. RIL is India’s largest public company with revenues in excess of $34 billion and a market capitalization of over $75 billion.Vornado Realty Trust, on the other hand is a fully-integrated equity real estate investment trust. It is one of the largest owners and managers of real estate in the United States with a portfolio of over 100 million square feet in its major platforms, primarily located in New York and Washington, DC metro areas.

Under the JV, RIL and Vornado Realty Trust would commit up to $250 million each to acquire, develop and operate retail shopping centers across key cities in India. “The shopping centers will contain 500,000 to 1,000,000 or more square feet and typically be anchored by a hypermarket to be owned and operated by Reliance, Vornado said. Vornado has an aggregate investment in other India joint ventures of approximately $91 million and capital commitments to these ventures of an additional $92 million. Vornado’s other real estate investments include 32.8 per cent interest in Alexander’s Inc, 32.7 per cent interest in Toys “R” Us and Hotel Pennsylvania in New York City. Total real estate owned or managed, including pro-rata share of partially-owned entities and joint ventures, is over 100 million square feet, including Vornado’s 16 million square feet of Toys “R” Us real estate.

The joint venture is going to be one of the biggest retail investments in India.

SRK Group planning Major Investment in India

Real estate developers SRK Group is planning to invest Rs 5,000 crore in developing residential and commercial projects in India. The group will undertake work in various cities like Delhi, Gurgaon Ahmedabad, Pune and Chennai over the next five years with plans to expand to new cities. “The group has identified many projects in south India and other parts of the country to pump in about Rs 5,000 crore in the next five years in developing residential as well as commercial projects,” industry sources said.

When contacted, the Pune-based SRK Group’s Chairman and Managing Director K Rasheed Malik said, “We are looking into new areas and different projects. Currently we are talking to land owners to acquire land, but nothing has been finalised yet. In Kerala, we have already identified some projects, which we will be developing in the future.” He, however, declined to comment on the size of the investment the group is planning to put in.

According to the sources, SRK group plans to invest about Rs 2,000 crore in Kerala in five years. It is also likely to launch 3-4 residential projects in the state within the next six months. Apart from Delhi, where SRK Group plans to develop only commercial projects, in all the other cities it will develop both residential and commercial properties.” We are looking to develop about 15 projects in these five new cities with over 100 acres of land in total,” Malik said.

The group, which is currently developing 20 projects in south India, is also planning to construct 100 housing units for Adivasis and poor people in Kerala free of cost, he said.

“We will also be launching healthcare facilities and ambulance services in rural Kerala,” he added.

PE Funds Now Eye Ancillary Businesses In Realty

With the property market going through a slump, private equity investors are shifting their investments to companies engaged in real estate ancillary businesses, where returns are perceived as fairly safe. “Real estate ancillary businesses are attractive,” said Mr. Sourav Goswami, the Managing Director of a leading private real estate investment company, Walton Street Capital. “We continue to look at opportunities in this space, but the main challenge is the capability of the managements to carry out expansions. Such companies face shortage of talent and the stretch level is very thin.” There are at least six private equity investors who are learnt to be in talks with Pune-based Universal Construction Machinery and Equipment. This company manufactures and sells construction equipment, and had a net profit of Rs 7 crore on sales of Rs 130 crore in 2007-08. Mumbai-based Sankapan Group also revealed that three private equity investors are interested in investing in its four subsidiaries.

Property prices falling in Chennai

Chennai had seen property prices shoot up almost by 200 percent in the last two years but the situation seems grim at the present. The real estate sector in Chennai may be witnessing the beginning of a crash. Some realty players have sold only a couple of houses in the last six months. Experts say there has been a 90 percent drop in demand for residential projects since the start of the year.

This area along the Old Mahabalipuram Road was once mooted as the hottest realty destination in the city. It’s now turning out to be a dampener. There have been few takers for the over 14000 units of flats here, mostly due to lack of infrastructure.

Office rentals are also seeing a correction. The Central Business District in Chennai has seen a 15 percent drop. According to a Cushman Wakefield report, the expected supply of the office rental space for 2008 is 18 million square feet. But the absorption rate is a mere third of this. This is because the office rentals are largely driven by IT companies who are now deferring their expansion plans. No wonder then developers are slowing down their project plans. They say funds are hard to come by.

The PE funds are mostly looking at structured deals of the north of 30 per cent post tax ERR; now those kinds of funds they are being very choosy today, looking at valuations realistically from the perspective of what it was done earlier they have given discounting of what about close to 70 per cent now .

Most real estate developers in Chennai say they are struggling to sell flats, with one real estate player admitting he has sold just one flat in the last six months. Analysts say that this is the time for developers to sit back and take a realistic look at prices.

Firms may expand into NCR on low rentals: Study

Delhi : Companies, which had deferred expansion plans in the National Capital Region (NCR) due to high property prices, can now think of going ahead as rentals for office space in IT and SEZ segments have declined by up to 13 per cent during the second quarter of 2008.

“The rentals of IT/SEZ segment in Gurgaon and Noida witnessed correction with values declining by 3 per cent and 13 per cent over the quarter respectively,” global real estate consultant Cushman & Wakefield (C&W) said in its report on the office market for second quarter of 2008.

The anticipated supply and deferred expansion plans of the companies resulted in the decline of rents, the consultant pointed out. However, the office rentals in Delhi have risen, though the pace of growth has slowed down. In the Central Business District (Prime) and other micro markets, rentals rose by up to 4 per cent only. Limited supply and robust demand due to convenience of the location pushed the rentals in these areas.

Giving the outlook, C&W said office market is expected to remain firm with rental values rising except for the IT and SEZ segments of Gurgaon and Noida, which are likely to see an estimated supply of 3.3 million sq ft during the third quarter.

Acacia buys India mall stake

MANAMA: Acacia Real Estate has acquired a 26 per cent stake in a retail development mall in India in a Sharia-compliant deal.

The retail mall in Delhi was acquired through a joint venture with Anant Raj Group, a publicly listed company with a market capitalisation of $1.2 billion.

The project is expected to generate a return on equity for investors of 83pc over a three and a half year holding period.

TAIB Bank has been appointed as the exclusive placement agent for the project.

The $220 million retail mall development will consist of 600,000 square feet of retail space upon completion.

The mall will be managed by Sandalwood, a joint venture company of Jones Lang LaSalle and Colonial First State Property Management, an Australian retail management firm.

The joint venture partners are in currently in advanced discussions with the potential anchor tenant of the mall.

“We’re proud to be able to offer our clients the first Sharia-compliant deal in India’s growing real estate and retail market,” Acacia executive committee board member and vice-chairman Iqbal Mamdani said.

“This deal provides investors with an attractive return and upside potential in one of the fastest growing emerging markets,” he added.

Tatas & Rahejas to invest Rs 500 cr in housing complex

New Delhi : Tata Housing Development Company and Raheja Developers have tied up to build a luxury housing project in Gurgaon in the next three years at an investment of Rs 500 crore.
The project — Raisina Residency — spread over 11.73 acres, would be developed by the two companies in a 50:50 partnership. The total number of housing units would be 340. “We are looking at an average realisation of Rs 6,000 per sq ft. The total sales potential from this project is about Rs 700 crore,” Tata Housing managing director Brotin Banerjee said here.

Asked about the investment in this project, Raheja Developers chairman Naveen M Raheja said: “It will be about Rs 500 crore, including land and other development cost.” Of the total 340 units, Banerjee said about 100 units have been sold through soft launch in the last two months and the company has witnessed “good appreciation” in the project.

Tata Coffee re-entering Retail

Tata Coffee is seeking a re-entry in to the retail business by setting up a café chain across the country. The company exited the business in December 2004. In 2001, the Tatas bought stake in Barista from the Turner Morrison group for Rs 26 crore. After three years, they exited Barista after selling its stake to Sivasankaran’s Sterling Infotech reportedly for Rs 65 crore. The Company, which sold its 34.3 per cent equity in Barista to NRI investor C Sivasankaran, is waiting for the contract it signed with Barista to expire. MH Ashraff, managing director of Tata Coffee stated, “The non-compete agreement period ends next year and we will consider setting up a coffee bar chain then. We have not decided anything on the size and investment of the chain,”

“In the last three years, domestic consumption of coffee has gone up steadily, with out-of-home consumption of coffee growing at a faster rate of 12-13 per cent. At present, India has a coffee consumption of nearly one lakh tonne a year,” said industry officials.Tata Coffee owns 19 coffee estates in South India. It produces 10,000 tonne of Arabica and Robusta coffees.

Tata Coffee, Asia’s largest coffee plantation company, is already running its branded coffee powder retail business through Mr. Bean Coffee Junction. Mr. Bean outlets have been opened in Kochi and Coimbatore and the company is planning to launch three more, including those in Chennai and Pondicherry. “For setting up a café chain of 100 outlets entails an investment of Rs 75-100 crore. The investment will vary according to the location and the volume of business the company eyes.

Private developers need to buy 70% land for SEZs

The policy framework of special economic zones (SEZs) are getting tweaked to meet the aspirations of all stakeholders. One of the latest regulations on the anvil pertains to land acquisitions.

Following the recommendation by an Empowered Group of Ministers (EGoM), private developers should buy 70 % of the land at prevailing market prices with government acquiring the rest, said R Gopalan, additional secretary, union commerce ministry.

Stating that a number of changes are being made in the rules relating to the land acquisition for SEZs, he said a suggestion has been mooted to place a cap on prime agricultural land bought for the SEZs.
Mr Gopalan was in Chennai on Friday for honouring SEZ developers and export-oriented units for their outstanding performance. The meeting was organised by the commerce ministry and the Madras Export Processing Zone SEZ(MEPZ-SEZ).

SEZ Developers, who got awards for 2007-08, were Nokia India, Mahindra World City, SIPCOT-SEZ and Flextronics Technology.
Export Award winners included Linea Fashions, Ambattur Clothing, Orchid Chemicals, Polyhose, Shasun Chemicals, Igarashi Motors, Magic Wood, Nokia Telecom, Infosys, Covansys, Syntel, Tata Coffee, Sterlite and Nestle India.

He said the changes, aimed at ensuring fair valuation, are expected to be passedby the winter session of Parliament, along with the amendments to the Land Acquisition Act, which is now before a standing committee.

For about a year now, the Centre has been working on putting in place a single-window system of clearance for SEZ developers. A single-member committee, at the chief secretary level, could report through the development commissioner on the unit approvals, which are now facing several procedural wrangles, Mr Gopalan said. At the EGoM meet on Thursday, it was decided that the current fiscal incentives to SEZs and land ceilings and other rules would continue, he said.

Endorsing the view, MEPZ-SEZ development commissioner B Vijayan said as a small step to initiate faster clearances for SEZ units, Elcot has been identified as a single window for IT-SEZs. The state has one of the best track records in the speedy implementation of SEZs, he added. Highlighting the performance of the SEZs, Mr Vijayan said that seven out of eight units, which had the letter of approvals, had started operations.

In Oragadam, six out of eight LoAs were expected to go on-stream by October. SIPCOT is the biggest landlord in Tamil Nadu, he added. ETL, ETA, DLF, TCS, Hexaware, Shriram Properties and Elcot Sholinganalur were already operational while half-a-dozen are scheduled to become in the current fiscal, Mr Vijayan said.

Earlier, at the award function organised by the MEPZ-SEZ, Mr Gopalan said SEZs were the key to increasing India’s share of global trade, which currently stood at $200 billion. SEZs could help to boost the foreign trade share to 5 % by 2 015 from the current share of 1.5 %, he said. Mr Gopalan also flagged a specific issue of skill development from the perspective of SEZs.

Apart from corporate social responsibility, the onus of creating a talent reservoir lay with them, he said, urging the SEZs to interact with the government through the development commissioners.

While a stable policy regime would continue for SEZs, he said they must be allowed to run for five years before any alterations are made. SEZs have generated 2.5 lakh direct employment opportunities and new investments of about Rs 74,000 crore.