Commerce firm on keeping SEZs out of direct tax code

THE commerce department has opposed bringing tax-free special economic zones (SEZs) under the ambit of the proposed direct taxes code, arguing that it could hit the development of such zones and ultimately hurt exports.

SEZ developers and units in these zones at present enjoy benefits under a special Act passed by Parliament and are spared from paying taxes on profits.

However, under the code, that has been circulated by the revenue department and which seeks to streamline the countrys tax regime by minimising exemptions and lowering rates, tax benefits will be linked to investments made by developers. The code is also unclear about the tax treatment to units that operate out of SEZs and could erode the attractiveness of SEZs for businesses. It could particularly cut tax benefits enjoyed by SEZs, especially in sectors like IT where investments are low.

The commerce department therefore wants SEZs to be kept outside the new overarching code and has indicated this in a communication to the finance ministry, a department official told ET, requesting anonymity. Such a demand signals a hardening in the stance of the department, which had earlier sought only a written assurance from the finance ministry that the new tax regime will not be applicable on the zones where
developers have already started making investments.
Director general of export promotion council for exportoriented units (EoUs) and SEZs L B Singhal said while the proposed code contradicted provisions of the SEZ Act, ambiguities in the new proposal was making things worse and investors were shying away from taking investment decisions. The proposed code allows so-called grandfathering of incentives, under which SEZs enjoying tax breaks under present rules would continue to do so. But there is no clarity on whether tax exemptions on export income available to SEZs and the exemption from minimum alternate tax would continue, Mr Singhal said.

He added that the government could not wait until 2011 to make clarifications as investors, both domestic and foreign, were hesitating from making investments in SEZs amid apprehension that these would fail to attract units if tax laws changed.
SEZ projects are typically long-gestation projects and lack of certainty about tax laws could make developers of these zones apprehensive about the returns that they would expect from prospective units coming up in them.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=ETM&pubLabel=ET&pageid=13&mydateHid=20-11-2009

Real estate developers rethink SEZ plans

Mumbai:

The economic slowdown and the problems in acquiring land are making developers re-think their SEZ plans and 10 of them have approached the government for withdrawal of approvals for setting up the taxfree enclaves.

Besides, at least eight SEZs, have sought extension, citing different reasons like problems in acquiring land.

The applications for seeking withdrawal of approvals and extension of validity of clearances will be considered by the Board of Approvals in the commerce ministry in its meeting on October five.

http://content.magicbricks.com/real-estate-developers-rethink-sez-plans

Hi-Tech Infra to invest Rs 600cr in Coimbatore SEZ

Hi-Tech Infrastructure Private Limited, promoted by Coimbatore-based KG Information Systems Limited (KGISL), plans to invest around Rs 600 core over the next two years in building a township at a special economic zone (SEZ), the first SEZ for IT and ITeS sectors being developed at Saravanampally in Coimbatore. Speaking to Business Standard, KGISL managing director, Ashok Bakthavathsalam, said the company was developing the SEZ on 150 acre, of which 65 acre had already been allotted to Robert Bosch India, Cognizant and Perot Systems. Bosch is setting up a research and development centre in the SEZ with an investment of around Rs 250 crore.

Bakthavathsalam said the SEZ was expected to attract investments to the tune of Rs 2,000 crore and generate employment to about 15,000 people over the next two years. “KGISL alone will invest around Rs 600 crore in the SEZ, which will be funded through a mix of internal accruals and debt,” he said. The company is planning to set up a budget hotel, 400 affordable houses and a hospital to supplement the upcoming industries in the SEZ, he said, adding that the company is open to join hands with private partners to promote the township.

“The SEZ will also help other industries to grow in this region. For instance, Robert Bosch facility will not only create additional job opportunities in Coimbatore, but will also benefit the manufacturing sector in and around Coimbatore as Robert Bosch is looking for partners to bring complimentary strengths to what it does,” Bakthavathsalam. Coimbatore, he said, will be the right destination for IT and ITeS companies, which are currently passing through rough times. A business process outsourcing (BPO) company, which will operate out of Coimbatore, can save up to $200 per seat a month when compared to Delhi or other major metros.

“Moreover, there are about 40 engineering colleges and 80 arts colleges, which are producing about 150,000 students every year. Availability of human resources is the biggest advantage.The establishment of the SEZ will also benefit the adjoining villages with the creation of non-IT jobs,” he said.

Source : http://www.indianrealtynews.com/sezs-india/hi-tech-infra-to-invest-rs-600cr-in-coimbatore-sez.html

Ireo to invest $500m in Indian realty

The global investment fund Ireo announced its plans to invest $500 million in real estate projects across the country. The project mix will include both residential and commercial developments. The $500 million fo-rms part of the $2 billion tranche of fund available with the Ireo.
“We already have invested close to $1.5 billion towards development of 13 real estate projects in the country,” said Anurag Bhargava, chairman Ireo. He added that the company is now exploring options in tier I and II cities. “Residential projects will remain our priority though we are open to developing commercial projects like the SEZs,” Bhargawa explained.
The company has already completed three million square feet of residential development and has further plans to develop around eight million square feet residential and commercial pro-jects over the next one year.
At present, the company owns 3000-acre at Pune, Gurgaon, Mohali, Ludhinana, Ghaziabad, Noida, Chennai, Coimbatore, Goa and Jalandhar wherein it is developing thirteen realty projects that include development of IT-SEZ at Pune. The construction work of the IT-SEZ at Pune is expected to be complete by next year.
“Though the SEZs do not find favour with other developers in the changed economic environment, yet we feel that with right location and scale they still can be good business propositions,” quipped Bhargawa.
The company is also exploring options in the education and hospitality sectors. “The projects in these categories will largely be in and around the areas where we already are executing projects, as we have a fair amount of understanding of the market, he said.
The investor base of Ireo consists of several financial institutions such as JP Morgan Chase, TPG-Axon, Citadel Investment Group and sovereign wealth funds.

Source : http://www.mydigitalfc.com/companies/ireo-invest-500m-indian-realty-875

Coming soon, cheaper loans for SEZ developers

NEW DELHI: The government may soon release a new set of rules that will make domestic borrowing cheaper for developers of special economic zones  (SEZs), thereby boosting investment in these tax-free manufacturing hubs.

The Reserve Bank of India (RBI) recently granted infrastructure status to projects in these SEZs that will let them access cheaper funds. The central bank will now release revised commercial real estate exposure (CREE) guidelines for banks to identify activities that can be classified as infrastructure.

The draft norms have been circulated for comments to banks and general public, and once they are finalised, SEZ developers will be able to source funds at about 2% cheaper rates for most activities in the processing areas that are likely to be classified as infrastructure, a government official said.

The move will benefit both small and big SEZ developers such as Reliance, Adani and Essar, and IT companies such as Infosys and Wipro.

“The development is definitely positive as SEZs have been facing a cash crunch due to the global slowdown. Once banks adopt the new guidelines, SEZs will get access to funds earmarked for infrastructure projects at lower interest rates, giving them a much-needed boost,” the official added.

As per the draft guidelines, the exposure of banks towards purchase and development of land for SEZs that will be repaid from the sale proceeds or rental of the plots given on lease to the units in SEZs will be classified as CREE exposure. The cost of plots would include the cost of land acquisition as well as the cost of land development.

However, if a single company is developing an SEZ completely or partially for its own use and its repayment will depend on the cash flow generated by economic activities of the units in the SEZ along with the general cash flow of the company rather than the level of real estate prices, it should not be classified as CREE but as infrastructure lending.

Similarly, if there are co-developers in an SEZ who undertake a specific job such as provision of sewerage and electrical lines, among others, and are paid by the main developer based on the work in progress, such exposure will be classified as infrastructure lending, the draft notification said.

Source  : http://economictimes.indiatimes.com/Economy/Coming-soon-cheaper-loans-for-SEZ-developers/articleshow/4755404.cms

Increased Infrastructure Spending will Benefit Real Estate

While most real estate developers were disappointed with the Budget, a few realtors and global property service provider Jones Lang LaSalle (NYSE:JLL) Meghraj stated that increased infrastructure spends would indirectly benefit real estate. Mr Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj, said, of late, increasing number of infrastructure projects had a real estate component by virtue of a cross-subsidisation principle. Therefore, boosting infrastructure projects would give an impetus to real estate.

Similarly, a higher allocation to NHAI (National Highways Authority of India) would ensure improved and accelerated connectivity, which in turn would raise the value of real estate along the routes and open up new areas for development. A larger allocation for Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was also good news for urban infrastructure. The programme has been instrumental in improving road and rail connectivity in urban and suburban areas, and this would boost mass housing schemes on the fringes of the metros. A higher outlay for the rural electrification scheme, besides rural housing fund and roads might serve to improve the realty markets in far-flung areas and help reduce inward migration from the villages by providing industrial growth in the hinterlands.

On the negative side, Mr Puri said STPI (Software Technology Parks of India) units would have a higher burden of Minimum Alternative Tax (MAT). This was an indirect endorsement of SEZs, and in line with the Government’s stance to phase out benefits to STPI projects, thereby encouraging migration to SEZs. Mr Pradeep Jain, Chairman, Parsvnath Developers, said though it was a non-event Budget specifically for the real estate sector, there were certain announcements which would indirectly support the sector. The Budget provides stimulus worth Rs 2,000 crore to the rural housing which was a welcome move as it would complement efforts to provide good quality housing in rural India.

Refinancing 60 per cent of commercial bank loans for PPP projects in critical sectors by IIFCL would infuse liquidity in the system and boost infrastructure development. Increase in allocation under JNNURM by 87 per cent to Rs 12,887 crore would be instrumental in reviving the urban infrastructure. The total excise duty exemption from pre-fabricated concrete slabs would help reduce the cost of construction in projects using pre-fabricated materials.

Mr Kapil Wadhawan, Vice-Chairman and Managing Director, Dewan Housing Finance Corporation Ltd, said the Budget clearly focused on improving rural housing and developing infrastructure in urban and rural India. The allocation of Rs 2,000 crore for Rural Housing Fund through the National Housing Bank to boost the resource base of NHB for refinance operations in rural housing was a significant announcement and would help organisations such as DHFL, which primarily focused on the lower and middle-income segment. The Confederation of Real Estate Developers Association of India said it was utterly disappointed, particularly because the Budget completely ignored the substantial contribution of the housing and real estate sector to GDP and employment of 10 million workers, which was second only to the agriculture industry.

Mr Kumar Gera, Chairman, CREDAI, said he was also upset as the real estate sector that has an impact on over 200 services and industries, with forward and backward linkages, had been let down. However, referring to the allocation for JNNURM scheme and enhancement outlay for housing and provision of basic amenities to urban poor, he said it would provide some relief through Government authorities without much participation by the private sector.

Source : http://www.indianrealtynews.com/real-estate-india/increased-infrastructure-spending-will-benefit-real-estate.html

In realty, the worst is over

Moumita Bakshi Chatterjee

The near lull in the housing sector just months ago has been replaced by a slew of project launches touting affordable price tags, and a fund-raising spree by leading realtors. Developers are keeping their fingers crossed that sustained improvement in consumer sentiments – coupled with Government’s thrust on urban housing, a bigger Jawaharlal Nehru National Urban Renewal Mission (JNNURM) outlay, and the Union Budget for 2009-10 – would speed up the recovery in the sector and drive up demand for property.

Business Line spoke to Mr Kumar Gera, President, Confederation of Real Estate Developers Association of India, and Chairman & Managing Director, Gera Developments, on issues relating to recovery, challenges, and expectation from the Government.

Real estate companies are claiming that housing sales have picked since March-April. In your view, is the worst behind us and have the prices bottomed out?

Yes, I do believe that the worst is behind us and sales will now be inching forward in terms of velocity and price. My reason for saying this is largely due to the change in sentiment that is being witnessed, which seems to be related to the growth of the economy being at a healthy 6-plus per cent.

But is the demand restricted to specific segments of the property market, primarily the affordable housing space? In your opinion, are real estate players catering adequately to this segment ?

Currently revival is seen mainly in the residential sector, albeit at lower price points, and in the less-than-1,500 sq.ft segment. Real estate development often sees a herd mentality among developers.

The current mantra seems to be affordable housing and it is this segment where maximum sales are happening while commercial sales and residential units with price tags in crores of rupees are sluggish, at the moment.

Meanwhile, the improvement in the secondary housing market is not as obvious as is the case in the primary market – this is because the drop in prices in the secondary market has generally been less than the drop witnessed in the primary housing market.

Has the cash crunch, for players, eased over the last quarter. Do you expect the cash flows to improve in the coming months?

The cash crunch has eased to an extent as a result of offloading inventory at low prices, disposal of NPAs, reduction of land banks, arranging finance through private investors, holding back or delaying new launches, and so on. It is expected that the overall liquidity in the markets will see improvement, going forward. But there still are challenges.

These relate to depressed prices and low sales velocity, which though better than March-April levels, are far lower than those witnessed in the year-ago period.

For instance, if the prices dropped by, say, 35 per cent in the period October to December 2008, and increased today by a mere 10 per cent, the actual rise is still a fraction of the previous levels.

The impact is bigger when you see the fall and the relative rise in the context of the slow sales velocity. We still have a long way to go to recover the earlier growth rates.

The Parliamentary Standing Committee on urban housing, in its latest report, has taken note of the benefits of having Special Residential Zones (SRZs) and has asked the Centre to consider such programmes. Do you think the concept of SRZs is even more critical, in the wake of the current affordability push?

Yes, setting up SRZs could be the answer to issues of affordability and kick-starting the economy. The Government can stipulate the minimum size of the land – say, 50 acres and above – and have these SRZs bonded by compound walls just like an SEZ.

In this model, the Government should not get into land acquisitions, and the same can be done directly by the private sector.

SRZs would be areas that are excluded from domestic taxes and levies, with specific rules to promote large-scale affordable housing. For instance, each SRZ could have 3,000-4,000 affordable dwelling units.

Government support to development of these zones through concessions means that these fiscal benefits will bring down the cost of the units that are located within these SRZs. I think creation of SRZs is the need of the hour, more so in the current context.

Could you outline specifically the three most important things that industry wants from the Government?

We would like to see the three categories — affordable housing-projects with over 100 units, below 90 sq.mt of space each; integrated townships -any development that is over 20 acres; and SEZs — being accorded infrastructure status.

Secondly, we are hoping that the Government would raise deduction permissible on interest repayment for housing loan from Rs 1.50 lakh to Rs 3 lakh.

Thirdly, exemptions should be provided for affordable housing projects below 90 sq.mt on the lines of the erstwhile 80Ib (10) scheme.

Source : http://www.thehindubusinessline.com/iw/2009/07/05/stories/2009070550581500.htm

Sluggish Growth in Real Estate Coimbatore

Laxity in promoting Coimbatore as next IT destination after Chennai,time-consuming approval process, speculative land prices, conservative nature of people and lack of political clout are some of the key reasons identified behind the sluggish growth in real estate in the techcity. Speakers at a forum organised by Confederation of Indian Industry (Coimbatore) and Jones Lang LaSalle Meghraj (JLLM) here on Tuesday. However, believed the realty sector has enough potential and it is poised to pick up growth in about six months to one-year.

In his presentation on Coimbatore Edge, Ramesh Nair, managing director of JLLM, Chennai and Hyderabad regions said branding Coimbatore, as a single entity is very important for the growth of the city. Also, the city has the capabilities to be promoted as a highly promising alternative IT/ ITES and a biotech destination. “There is a huge potential for local, national as well as international developers in the real estate sector in Coimbatore,” Abhishek Kiran Gupta, Head – Research, JLLM said. He cited high literacy rate, more number of people graduating out of many renowned colleges and the city’s contribution to the growth in the per capita income of the country.

“Coimbatore is a self-made city and we haven’t had a trigger point yet. If only the city had got an IT park five years ago when Chennai got it in 2000, it would have propelled a greater growth today,” said Ashok Bakthavathsalam, managing director, KG Information Systems. D R Sekar, chairman, Builders Association of India (BAI), Coimbatore Chapter added that getting approvals for land and buildings have been a difficult and laborious process in Coimbatore and whole of Tamil Nadu.

“Compared to other neighbouring states, the approval process takes a long time in TN and therefore all promoters are shying away from investing in the state,” he said, adding a single window system is the need of the hour. Rajesh B Lund, vice president of Confederation of Real Estate Developers Association of India (TN) said, apart from the delay in approvals, the market fell when the new projects were about to take-off. “It led to a lull in the construction industry,” he added.

Of the proposed seven SEZs in Coimbatore, only three including Tidel Park are under construction now. Likewise, many companies evinced interest to build malls in the city but today only two projects – Brooke Fields and Fun Republic are getting ready. “The lack of night life in Coimbatore and the delay in IT infrastructure has led to slowdown among retail mall developers,” said A Sridharan, managing director, Covai Propery Centre. “Coimbatore is not a modern city and it is also conservative and not used to mall culture. But, after these two malls start operations, people will get used to it,” added Mr Sekar. Also, with the new generation starting to work, the city is bound to catch up with experiencing a new culture”, he said.

On land values, Mr Rajesh Lund said though prices have dropped drastically compared to the all-time high in 2007-08, the landowners still stick to the high prices and are not willing to sell lands. About the city attracting big investments, he added, once infrastructure falls in place investments would automatically flow in. He also hoped that non-resident Coimbatoreans would return to the city and invest here. Mr Ashok added that with the opening of the Tidel Park and the IT-SEZ in Keerenatham village, nearly 16,000 seats would be created in another 1 to 1.5 years time. “If these new professionals are to come to the city, then there would be huge demand for affordable housing and also serviced apartments,” he added. Already leading promoters in the city have planned to construct budget houses costing Rs 15 lakh to Rs 20 lakh each.

HDFC branch head S Ramesh Kumar expected the market to pick up since the costs have come down. “Also with the fall in interest rates, a large number of people would be attracted to real estate now,” he said, adding the future trend also points to a reduction in interest rates.

Source : http://feedproxy.google.com/~r/Indian-Realty-News/~3/vJQ6jxVE5Bk/sluggish-growth-in-real-estate-coimbatore.html

BoA grants extension to Orion SEZ despite delay

Orion proposes to build an SEZ for information technology firms at Bandhwari near Gurgaon, Haryana

New Delhi: Setting a precedence, the commerce ministry’s board of approval (BoA) on special economic zones (SEZs) on Friday granted an extension of an in-principle approval to Orion Infrastructure Pvt. Ltd even though the developer approached the board 20 days after the expiry of the validity period.
Slowdown factor: Commerce secretary Rahul Khullar.Harikrishna Katragadda / Mint Orion proposes to build an SEZ for information technology firms at Bandhwari near Gurgaon, Haryana. The developer has submitted that it has acquired the entire 130 ha of land for the project. It had obtained the approval in 2006.

An SEZ is an enclave aimed at increasing investment and exports. Companies based in SEZs are eligible for tax and other incentives.
According to SEZ rules, 2006, an in-principle approval is valid for one year and an extension of validity could be granted for another two years. A second extension could be granted for a sector-specific SEZ if the developer is in possession of 60% of the required land.
“This is the first such instance. Even if the rules do not permit extension after the validity period expires, the board has exercised its power and waived off the rule in this particular case,” a consultant with an audit firm said on condition of anonymity. He, however, said that the board is unlikely to make this a normal practice.

Among other proposals, the board agreed to denotify an information technology SEZ in Navi Mumbai by realty firm K Raheja Universal Pvt. Ltd and allowed the passage of metro rail through the Cyber City SEZ in Gurgaon being developed by DLF Cyber City Developers Ltd. In its previous meeting, the board had agreed to de-notify four zones of real estate firm DLF Ltd, with the rider that the company would repay all tax benefits it availed of in developing the SEZs.

The board ratified extension of time to 23 developers, including Satyam Computer Services Ltd in the wake of economic slowdown for building these enclaves. The government has so far granted 576 approvals to set up SEZs, out of which 319 have been notified. The Friday meeting, chaired by commerce secretary Rahul Khullar, informed the board that Rs1.09 billion have been invested in the SEZs and direct employment of 387,439 persons has been generated. Exports in SEZs registered around 50% growth in rupee terms in 2008-09, amounting to Rs99,689 crore.

Source : http://www.livemint.com/2009/06/19224210/BoA-grants-extension-to-Orion.html?h=B

Chennai Plans New IT SEZ

Tamil Nadu government is planning a special IT industry economic zone spanning 1,000 square kilometres, according to T Willington, director of projects, Tamil Nadu Industrial Development Corporation (TIDCO). The project, worth about thousands of crores of rupees, is likely to attract investments of more than Rs one lakh crore and is being termed as ‘IT investment region’. Willington was speaking at a FICCI-MIBC (Malaysian-Indian Business Cooperative) conference on real estate and infrastructure here. He said the petroleum, chemicals and petrochemicals investment region at Cuddalore which had planned investment of Rs 19,000 crore, and the IT investment region near Chennai, were major projects apart from the 69 SEZs being planned in the State.

He told Express that the project report had been sent to the Centre. “We expect the approval by the end of this year, after which we will begin work on phase 1 of the project. The project will be many times larger than the Cuddalore project,” he added. The project, he said, would be executed in two phases wherein the first phase covering not more than 20 per cent of the project area would be completed within five years and the next phase within 15 to 20 years. The identified region spans from the outskirts of Chennai to its North and extends upto Kancheepuram and Chengalpet to its South and will be bordered by the East coast road to its East.

In phase one, development will start in the Kancheepuram and Chengalpet areas, “The idea is to take the pressure off the metro. Since the Northern side with Chennai is developing, we will focus initially on the southern side of the project area,” Willington noted. “Around 250 square km should be sufficient for such a project but we are going in for 1000 square km because we don’t want to congest development within a small area,” he added. This region would be administered by a development authority on the lines of Chennai Metropolitan Development Authority. Two new townships of 2,000 acres and housing capacity of 2.5 lakh people each would be created in phase one. Willington said that once the project was notified, developers would be free to acquire land and start developing land. “There will be no compulsory acquisition by the government except to create social infrastructure such as roads.”

Source : http://www.indianrealtynews.com/real-estate-india/chennai-plans-new-it-sez.html

23 SEZ Proposals Get BOA Approval

The Board of Approvals (BoA), chaired by Commerce Secretary Rahul Khullar, today approved K Raheja Universal’s request to scrap its Navi Mumbai SEZ and also allowed 23 developers more time to develop the tax-free industrial enclaves. In addition, the board also gave its nod to partially scrap another special economic zone (SEZ) developed by the Mumbai-based realtor K Raheja Universal. The company cited economic slowdown as the reason for its inability to develop both the zones, which were notified by the commerce ministry. Though there are no provisions for denotification of zones in the SEZ Act or rules till now, the law ministry had told its commerce counterpart that the board has the power to denotify SEZs with the condition that the developer will have to give back the government all the benefits it availed while constructing it.

K Raheja Universal’s told the board that it had not developed the zones and hence, had not availed any duty benefits. In its earlier meeting on June 2, the board had given conditional approval to DLF for scrapping four of its notified SEZs. In today’s meeting, which took up the leftover agenda of the previous meeting, the board also gave additional time of one year to 23 developers to build the SEZs. These include three SEZs proposed to be developed by fraud-hit Satyam Computer Services that has been recently acquired by Tech Mahindra. The pace of development of the zones have slowed down considerably, owing to lesser demand for SEZ space, high cost of borrowing and land acquisition problems. Prospective clients of the zones have put their expansion plans in the back burner, which has made developers go slow on their construction. The board also approved proposals by Shyam Steel Industries and Limitless Properties for building two zones related to information technology in West Bengal.

At the moment, there are 90 functional zones out of about 570 SEZs, which have been formally approved since February, 2006. The BoA today gave its nod to a proposal by DLF Ltd, the Delhi-based realtor, to let the metro corridor from National highway-8 to Sikandarpur to pass through the Cyber City SEZ in Gurgaon. The corridor will be built through a public-private partnership by the Haryana Urban Development Authority (HUDA) and a consortium of ITNL ENSO Rail Systems Ltd. (IERS), IL&FS Transportation Networks (India) Limited (ITNL) and DLF. The developer has assured that no tax benefits will be availed while building the elevated corridor through the zone. Moreover, the corridor will not lead to problem in contiguity — a mandatory condition for SEZs — because of its elevated status.

Source : http://www.indianrealtynews.com/sezs-india/23-sez-proposals-get-boa-approval.html

DLF Seeks GOVT Approval to Build Apartments & Commercial Complexes in SEZs

Realty major DLF has sought government approval for building service apartments and commercial complexes in four special economic zones, of which two are located in Gurgaon. The Board of Approval (BoA) in the Commerce Ministry will consider requests from the developers for building apartments and commercial space in the non-processing areas of the four IT/ITeS SEZs at Gurgaon, Chennai and Hyderabad, an official said. The non-processing area includes non-core activities.

The BoA is meeting here on June 17 to take up the request, along with other agenda. DLF has informed the ministry that it wants to build service apartments on 15,000 square metre and commercial space on 12,000 sq m at one of its Gurgaon SEZ. The total notified area for SEZ is 10.73 hectares (1,07,300 sq m). At the height of the SEZ ontroversy, it was alleged that the land was being acquired for real estate gains by the developers. However, the Commerce Ministry has denied these claims stating the commercial activities would be restricted to non-core areas. The SEZ developers have been demanding that they should be granted an infrastructure status for availing the bank finance. However, the Reserve Bank has not acceded to the demand taking a view that it is a real estate activity.

Source : http://www.indianrealtynews.com/sezs-india/dlf-seeks-govt-approval-to-build-apartments-commercial-complexes-in-sezs.html

Stimulus Expected for Real Estate Sector in Budget 09- Experts

Although, Indian economy as a whole has largely been insulated against the global economic slowdown, the Indian real estate sector has been severely been affected keeping in sync with the fortunes of the global real estate sector. Demand dynamics of one large industry decide the fortune of its ancillary industries. The ups and downs of the real estate market have serious implications on companies whose future is linked to the housing and infrastructure demand in India.

The risk straddle includes industries such as furniture, granites, ceramic tiles, paints, power cables, glass, electrical equipments and interior designers among others, which exemplifies the significant backward and forward linkages that the real estate sector has with the economy. There is a need for the Government to provide a stimulus for the industry so as to revive this ailing spectrum of sectors. And what better time can there be, than the forthcoming budget!

Some of the measures that should be taken by the Government are as follows:

• Given the demand for and emphasis of the Government of India on affordable housing (through lower interest rates on loans upto Rs 30 lakhs) there is a need to reintroduce tax holiday under section 80IB for housing.

• Tax holiday available to hotels under section 80ID to be extended 10 years from existing time limit of 5 yrs. The gestation period in hotel industry, itself, stretches from 4 to 5 yrs. • To garner resources for providing liquidity to the Indian real estate industry, there is a need to:

Re-introduce ‘tax pass through’ status for domestic venture capital funds that invest in the Indian real estate sector; Clarify that the Real Estate Mutual Funds are to be treated as equity oriented fund; Extend the external commercial borrowing scheme to the entire Indian real estate sector including Special Economic Zones and not just 100 acre township, hotels, hospitals in view of the moderate international costs of borrowing;

• Encourage states to reduce stamp duty to 5 percent and to provide a system of credit for each stage of sale i.e. levy on value addition. • Increase in deduction available under section 24(b) to Rs 300,000, against, existing limit of Rs 150,000 for self occupied houses. • Increase the basic exemption limit under provisions of Wealth tax Act to Rs 50 lakhs against existing limit of Rs 15 lakhs keeping in perspective the price of property, etc. • Service tax provisions should be amended as follows:

It has been clarified that no service tax should be levied in case pre-construction sale of residential complex where the seller and the buyer enter into an ‘agreement to sell’. Similar clarification should be issued for pre-construction sale of commercial complex. Service tax on renting immovable property should be abolished • To reduce the cost of procurement of capital equipments for construction purposes there should reduction/ rationalization of customs duty (exemption from special additional duty) and excise duty (8 percent to 4 percent)

Source : http://www.indianrealtynews.com/real-estate-india/stimulus-expected-for-real-estate-sector-in-budget-09-experts.html

Slowdown in SEZs

When the Board of Approval for special economic zones (SEZs) meets on Friday, liaison and corporate affairs executives will jostle for space in the narrow corridors on the ground floor of Udyog Bhavan, which houses the commerce department. In stark contrast to last year, however, few of them will be pushing proposals for new zones. Demand dynamics brought on by the global slowdown and persistent land acquisition problems are forcing developers to alter their plans.

As a result, almost half the proposals that the inter-ministerial panel headed by Commerce Secretary Rahul Khullar will consider have to do with extensions to acquire land or cancellations of these tax-free enclaves that were supposed to catapult India’s exports into the big league. Of the 58 SEZ proposals on the agenda, only two are for setting up new zones; 23 zones are applying for an extension of the validity period and two — from K Rajeha Universal — are seeking de-notification on the grounds that the economic downturn has resulted in lower demand. Then there is Mansarovar Industrial Development Corporation that has decided to expand the focus of its zone from handicrafts to information technology-enabled services (ITES), and to split the 131 hectare-zone.

“The developer has requested that due to the present downturn in the economy, the additional sectors (ITES) may kindly be permitted to be included in the SEZ,” the commerce ministry said in its note for the BoA meeting. Similarly, financial constraints have forced Diamond Software Developers, which was setting up an SEZ focused on information technology (IT) and ITES in Noida, to drop its plans. Meanwhile, companies such as Parasvnath SEZ have had to move the proposed 10.11 hectare Biotech SEZ from Ranga Reddy district in Andhra Pradesh to Medak in the southern state owing to legal hurdles in land acquisition.

Similarly, with only 63 per cent of the land acquired, Rajasthan Explosives and Chemicals has sought more time for developing a multi-product zone. Plagued by insufficient demand for space, land acquisition problems and the liquidity crunch in the first half of 2009, nearly 27 developers with all approvals in place had already sought more time to operationalise SEZs. Ministry officials said the number could go up to 50 at Friday’s BoA meeting and much more at subsequent meetings. According to the norms, an SEZ has to be up and running within three years of receiving the formal approval, which is only given after land is in the developer’s possession. When the economy was growing at 9 per cent, there was a rush to set up SEZs. Between February 2006 and May 2009, the government gave formal approvals to 568 proposals, nearly 60 per cent for IT. Of these, 315 have been notified, which means they can claim tax and duty benefits.

But work has been completed and exports are taking place in only 90 zones. So, only 16 per cent of the formally approved proposals are contributing to India’s exports. Exports from these 90 operational SEZs are projected to grow 38 per cent to over Rs 1,25,000 crore in 2009-10, as against Rs 90,000 crore last year. This will, however, be just a quarter of the Rs 5,00,000 crore projected if all the formally approved zones were to become operational. Government officials, however, said this was only to be expected. “When we started giving approvals, we expected at least one-third of the approved SEZs to fall by the wayside. But the slowdown and restrictions on state governments acquiring land could see more projects not seeing the light of the day,” said an official who was associated with SEZ policies and approvals for over five years.

“The number of approved zones is already high. The serious players are here to stay and our focus will be to facilitate SEZ-related matters,” added another official. Experts said with prospective clients putting their expansion plans on hold, developers do not want to take risk and build zones. This is because, unlike the real estate business model, SEZs require a long gestation period before developers see any financial gains. “Scrapping unviable zones is a systemic correction. When the business cycle is on an upturn, the zones will bounce back,” said Aradhana Agarwal, senior fellow at ICRIER and reader at Delhi University’s Department of Business Economics. PricewaterhouseCoopers Executive Director Vivek Mehra, who is advising many developers, said the downturn had lowered demand for space in the IT zones. Besides, the extension of the Software Technology Park scheme also meant that the rush for SEZs has come down.

“There are pressures on timeline and builders, who have put in more than the requisite 25 acres, are looking at other options. Even if you de-notify now, you have the option to seek a re-notification later or a set up a zone with a smaller land area,” he said. Developers seeking extensions include fraud-hit Satyam (three zones), Infosys (two zones), NIIT, and ONGC-promoted Kakinada SEZ in Andhra Pradesh. The former commerce ministry official said the manufacturing sector-related SEZs, which have not shelved their plans, could stage a comeback over the next eight to 10 months if production shifted to low cost destinations. For the moment, the absence of demand and liquidity crunch has also forced real estate major DLF to get conditional approval to scrap four of its notified zones, while its plea to get another of its Delhi-based zone has already been accepted.

Gitanjali Gems, which has permission to set up nine SEZs, has also applied the brakes on its plans. Although the company has decided against going ahead with a proposed zone in Nanded, the development of six zones in Gujarat and Maharashtra is yet to pick up. Only one SEZ in Hyderabad is expected to be operational, but that is one-and-a-half years away. In pharmaceuticals, chemicals and biotech, most of the 16 notified SEZs have been non-starters. Apart from the projects of Divi’s Laboratories, Biocon and Serum Institute of India – the first among the notified SEZs in 2006 – the others are still under implementation. Issues such as land acquisition, delays in developing physical infrastructure, setting up of plants and regulatory approvals from the US and Europe are delaying the projects, sources said.

“The development of a pharmaceutical SEZ may take three-seven years as pharmaceutical plants need quality water, effluent treatment plants and good physical infrastructure,” said Hitesh Gajaria, head – pharmaceuticals and executive director, KPMG India. Even government-promoted projects such as development of Kandla Port Trust’s Rs 7,000 crore port-based SEZ is in pause mode. “A majority of the developers want to see how the situation evolves in the coming days. So, they do not want to scrap their plans for the zones as of now. But there is an oversupply issue in zones,” said Abhishek Goenka, partner at consulting firm BMR & Associates.

Source : http://www.indianrealtynews.com/sezs-india/slowdown-in-sezs.html

After DLF, Rahejas want to surrender SEZ

Real estate developer K Raheja Universal Private Ltd wants to scrap one of their notified special economic zones (SEZs) and also surrender a part of another zone, citing lack of demand from the information technology sector.

The Mumbai-based developer has approached the Board of Approval (BoA) regarding this, which will decide on the matter on June 17. This is the second realtor after DLF Ltd, which too sought cancellation of notified SEZs. Notification is the final clearance for a SEZ, after which it starts enjoying the direct and indirect tax benefits prescribed under the SEZ Act.

K Raheja has asked for denotification of its 13 hectares IT zone based in Navi Mumbai. In addition, the company also wants to surrender about half of the 20.65 hectares of another infotech SEZ in the same area. These are the only two notified SEZs for the Mumbai-based realtor.

When contacted, K Raheja officials declined to comment.

While asking the BoA to denotify the zones, the company has blamed the lack of demand for space for IT-related zones. It also said that prospective clients have halted their expansion plans indefinitely due to the ongoing economic slowdown. Both the zones were notified in mid-2007.

The company has told the BoA that both the plots are vacant, and no construction activity has taken place. Thus, no duty or tax benefits were availed by the company.

The BoA has taken up de-notification requests of five zones till now, all belonging to DLF. While one of the Delhi-based zones has been de-notified, the BoA has given in-principle approval to scrap four other notified zones, under the condition that DLF will have to pay back all the duty benefits it availed from the government.

All these notified SEZs, which the developers have surrendered, belong to the infotech sector.

Though there are no provisions related to de-notification in the SEZ Act, the law ministry has told the commerce ministry that since the board has power to notify zones, it also can also scrap it, if developers want to exit the zones.

DLF seeks permission for building commercial space

Even as DLF got conditional approval for scrapping four infotech zones, it has asked the BoA under the commerce ministry to build 2,28,000 sq feet of commercial space, service apartments and housing for employees in four SEZs at Gurgaon, Hyderabad and Chennai, which the company is developing. All this construction activity has been proposed in the non-processing area of the zones, where supporting infrastructure for units in the processing area is built.

Source : http://www.business-standard.com/india/news/after-dlf-rahejas-want-to-surrender-sez/360966/

DLF seeks nod for apartments, commercial complexes in SEZs

New Delhi (PTI): Realty major DLF has sought government approval for building service apartments and commercial complexes in four special economic zones, of which two are located in Gurgaon.

The Board of Approval (BoA) in the Commerce Ministry will consider requests from the developers for building apartments and commercial space in the non-processing areas of the four IT/ITeS SEZs at Gurgaon, Chennai and Hyderabad, an official said. The non-processing area includes non-core activities.

The BoA is meeting here on June 17 to take up the request, along with other agenda.

DLF has informed the ministry that it wants to build service apartments on 15,000 square metre and commercial space on 12,000 sq m at one of its Gurgaon SEZ. The total notified area for SEZ is 10.73 hectares (1,07,300 sq m).

At the height of the SEZ controversy, it was alleged that the land was being acquired for real estate gains by the developers. However, the Commerce Ministry has denied these claims stating the commercial activities would be restricted to non-core areas.

The SEZ developers have been demanding that they should be granted an infrastructure status for availing the bank finance. However, the Reserve Bank has not acceded to the demand taking a view that it is a real estate activity.

Source : http://www.hindu.com/thehindu/holnus/006200906141012.htm

India’s special estate zones

The government should review SEZ policy for the unintended effects: Instead of manufacturing clusters, India seems to be getting real-estate developers

The government’s policy on special economic zones (SEZs) has come under fire many a time this decade. It’s again back in the media spotlight, with the Supreme Court’s refusal last week to grant Mukesh Ambani’s Maha Mumbai SEZ more time to acquire land. Botched land acquisition is a central problem, but that’s not the only one: There’s a good case to be made that the government isn’t achieving what it set out to do.

When India started on the SEZ track earlier this decade, it meant to imitate China. There, SEZs—free-trade areas with a liberalized environment that help form business clusters focusing on particular activities—have provoked the envy of the world. But instead of getting manufacturing clusters, India seems to be getting real-estate developers masquerading as SEZs.

Illustration: Jayachandran / MintFirst, too many SEZs have been granted approval. With 568 proposals okayed since 2005, India has lost a lot of potential tax revenue, which the government claims is offset by higher employment. If that’s the case, then it’s doing poorly: Since 2006, SEZs have seen investment worth Rs77,058 crore, but have employed only an extra 214,499 persons—that’s Rs35 lakh for every person hired.

Second, as Partha Mukhopadhyay at the Centre for Policy Research in New Delhi has argued, most of the jobs seem to be generated in only five states—that too in districts already well industrialized or urbanized.

Third, the size and nature of SEZs also raise questions. Mukhopadhyay has shown that as of 2008, 94% of SEZs are less than 3 sq. km in size, most of them in the information technology (IT) sector.

These are, then, not manufacturing clusters. They don’t hire the low-skilled workers who need to be integrated into the labour force, and they don’t build new centres for commerce. If anything, they capitalize—like the Maha Mumbai SEZ—on existing urban centres that will only serve to worsen urban imbalances.

All this lends credibility to the theory that SEZ developers are looking to make a fast buck with real estate. After all, the SEZ Act 2005 only requires 35% of a zone to be devoted to productive activity. For the rest, residential buildings, hotels and office space are attractive diversions from producing goods. The Reserve Bank of India has generally treated SEZs as real estate ventures, not allowing them access to certain foreign credit.

If not for all the controversy SEZs have sparked, the government should at least review its policy for all the unintended effects generated.

Source : http://www.livemint.com/2009/06/09214020/India8217s-special-estate-z.html?h=B

Mahindra Lifespace Plans to Target SEZ and Real Estate

The Mahindra group has decided to intensify its focus on special economic zones (SEZs) and real estate to take advantage of the improved sentiments witnessed in the sector across the country. The group is going ahead with its planned SEZ in Rajasthan, besides increasing focus on residential developments and integrated mega cities in southern and western India. Mahindra Lifespace Developers, which leads the group’s foray in this business, recently achieved a milestone of almost 5.8 million sq ft, comprising business cities and green homes spread over 2,000 acres. “At Mahindra World City New Chennai, the industrial area has been completely leased out. We are now looking to acquire land for the next phase here,” said Arun Nanda, president of infrastructure development, Mahindra and Mahindra (M&).

The industrial area of the Mahindra World city comprises an infotech/IT enabled services special economic zone (SEZ), an automobile SEZ and apparel SEZ, in addition to an earmarked domestic tariff area. Tamil Nadu Industrial Development Corporation holds 11 per cent stake in Mahindra World City Developers, Chennai, while the balance is split between M&M and Mahindra Lifespace Developers. “At Mahindra World City, there are enough local businesses, which can support additional dedicated housing. So we are launching a residential project there,” said Nanda. The residential development aggregating 1.5 million sq ft, spread over 55 acres, is being developed as a joint venture (JV) with Arch Capital — an affiliate of the Philippines-based Ayala group. While the Philippines conglomerate holds 49 per cent in Mahindra Residential Developers, Mahindra Integrated Township holds the balance. The project is expected to be completed in three years. About 300 acres, including the 55 acres being developed as a JV, has been earmarked for residential development in the World City at Chennai. “Building on our success in Tamil Nadu, we are now scouting for land around Chennai to build a second World City. We are, at present, aggregating land parcels there,” Nanda said. FC Estate learns that this land is being acquired at a location that’s around 35 km from Chennai city. “We plan to build an integrated city spred over 1,500 acres in Chennai,” Nanda added.

Mahindras, which were one of the early entrants in the SEZ space, are also seeing a revival of customer interest in their planned SEZ in Jaipur. “The first phase acreage has already been completely leased out here and we see an increase in regular enquiries,” said Nanda. Of the SEZ area, 452 acres have been committed and several units are already in operation. According to information made available by M&M, the IT, ITeS SEZ there has attracted seven tenants, while the Evolve Tech Park, which has Deutsche Bank as the anchor tenant, is already operational. In the industrial area, the light engineering SEZ has seen eight companies sign up while the handicrafts SEZ has acquired 11 tenants. Rajasthan State Industrial Development & Investment Corporation (Riico) holds 26 per cent of Mahindra World City Jaipur that is developing this project. In aggregate, Mahindras have around 5.92 million sq ft of space, which will be developed in the residential category spread across cities such as Gurgaon, Mumbai, Chennai, Pune, Nagpur and Nashik. The company is also exploring the feasibility of setting up a World City in Maharashtra. Pre-feasibility and demand surveys for the 3,000-acre development at Kurla near Pune in western Maharashtra have been completed, said a top M&M officials. The company plans to develop this project in collaboration with the Maharashtra Industrial Development Corporation. The latter is expected to hold 11 per cent in the proposed World City. On a much smaller scale, the group is also building a 52-acre research & development-focused biotech SEZ at Thane, around 16 km from Mumbai.

Source : http://www.indianrealtynews.com/real-estate-india/mahindra-lifespace-plans-to-target-sez-and-real-estate.html

DLF, Raheja want to surrender SEZs

MUMBAI: Till last year, Special Economic Zones (SEZs) were the flavour of the season. But for some developers, the downturn in the global economy is  now forcing them to surrender their SEZs despite having received formal approvals from the Centre.

On Tuesday, the Board of Approval of the ministry of commerce and industry in Delhi will deliberate on half a dozen proposals by two developers construction giant DLF and the Mumbai-based K Raheja Universal to denotify their SEZs.

Both the developers have cited global slowdown in the IT sector as reasons for scrapping their SEZs. DLF, the country’s largest real estate company, has requested the Board of Approval to denotify four of its approved SEZs 25 acres in Gujarat, 25 acres at Rai, Sonepat in Haryana, 25 acres in Kolkota and another 25 acres in Bhubaneswar in Orissa.

Raheja Universal controlled by Suresh Raheja, the youngest of the Raheja brothers who split about two decades ago, has requested the board to denotify its 50-acre IT/ITES SEZ in Navi Mumbai and also sought part denotification of a portion of its 30 acre SEZ in the same area.

According to sources, Raheja Universal approached the board with a proposal to surrender its SEZ, citing economic recession in the IT industry. The company has been selling of its land bank for the past several months now.

Last month, the realty company sold its Wallace Flour Mills property at Mazgaon for a substantial loss following pressure from a private bank to shore up its hefty loans.

In DLF’s case, the board in its meeting on Tuesday will consider if the realty major had benefitted from the duty free benefits offered to SEZs and whether it should be returned to the government.

In Maharashtra, as many as 109 SEZs have received a formal go-ahead while another 35 have got in-principle approval by the union ministry of commerce and industry so far. Incidentally, Maharashtra has the largest number of SEZs in the country.

The SEZs which have received formal approvals by the board of approvals in Delhi are cases where the developers have got complete possession and ownership of the land to be developed.

Six of the approved SEZs are located in Mumbai itself. They are Hiranandani Builders’ 31 acres proposed information technology (IT) zone at Powai, Royal Palms India’s 24 acres (IT) in the heart of Aarey Milk Colony in Goregaon (east) and another 24 acres for a gems and jewellery SEZ in the same region, Chiplun Infrastructure’s 99 acres (location not given) for a warehousing zone, Bombay Industrial Corporation’s IT SEZ on 30 acres in Mahul and Ferrani Hotels Private Ltd/Ozone Developers 69 acres for a IT zone in Malad.

Source : http://timesofindia.indiatimes.com/Business/Builders-surrender-SEZs-after-getting-approvals/articleshow/4605865.cms

GOVT makes way for big SEZs

Union Government has reportedly decided not to apply an area limit of 5,000 hectare for SEZs if 2 or more such zones are merged thus making way for big SEZs in India. In an amendment to the SEZ rules, the developers are given more freedom on selecting the location by defining vacant land where a special zone can be set up as land where there are no functional ports, manufacturing units, industrial activities or structures in which any commercial or economic activity is in progress.

As per the SEZ rules published in the Gazette of India, the government may consider on merit the clubbing of contiguous existing notified SEZs notwithstanding that the total area of resultant zones exceeds 5,000 hectare.

Source : http://www.indianrealtynews.com/real-estate-india/govt-makes-way-for-big-sezs.html

Global cos may join Iffco’s Kisan SEZ

NEW DELHI: Indian Farmers Fertiliser Co-operative(Iffco)-promoted 2,800 acre agro park project has drawn interests of investors from the  Netherlands, Israel and Italy, a company official said. The domestic fertiliser co-operative major had organised an international investors’ meet to attract global investors for its Kisan SEZ coming up in Nellore in Andhra Pradesh.

Investors showed interest in areas such as greenhouses, dairy production and processing, high-end processing of poultry products, fruit and vegetable processing, processing of paddy and bio-mass-based power generation, sadi the company official, who did not want to be named.

“A renowned domestic fruit and vegetable retailer has expressed interest in setting up a fruit processing unit and is in advanced stage of the feasibility study,” he said. A leading Indian conglomerate has proposed to set up a fully-integrated dairy farm and is in dialogue with international technology partners, he added. Dutch and Israeli business houses are scouting for Indian partners to venture into green house production and integrated poultry production.
IFFCO has already started developing the agro park, IFFCO deputy MD Rakesh Kapur said.

“The co-operative would also evaluate options of investing in specific joint ventures which, when actualised, will have a positive influence on the lives of farmers in the area,” he said while addressing potential partners.

The park has logistical advantage of being located on both sides of the National Highway No-5, about three hours drive from Chennai and half an hour drive from the Krishnapatnam port.

At the agri park, about 108 Rural Transformation Centers (RTCs) will be developed at the village level under the hub and spoke model in order to enable direct linkage of the farmers to the demand side of the food chain. These centers would act not only as a collection point for supply of raw materials to the AFP but also serve as vehicles for agri-extension and quality control. It is expected to generate employment avenues for more than 5,000 persons apart from large-scale economic development of the region.

In addition to developing the Kisan SEZ, IFFCO is also planning to set up state-of-the-art technical training institute to impart training in agriculture and post harvesting technologies as well as grain-harvesting facilities and construction related skills. The co-operative is also looking at the option of adopting a few farmer training institutes in the district to upgrade their facilities in its bid to train local manpower.

Source : http://economictimes.indiatimes.com/Economy/Global-cos-may-join-Iffcos-Kisan-SEZ/articleshow/4473841.cms

SEZ developers need time to complete their projects

NEW DELHI: Faced with a severe financial crunch, several SEZ developers have approached the Commerce Ministry seeking more time to complete their projects.

“Some companies have asked for extension of time,” said the Commerce Secretary Mr G K Pillai. Mr Pillai heads the inter-ministerial Board of Approval which clears the proposals for setting up of special economic zones (SEZs) where units are given tax ex emptions.

Export Promotion Council for export-oriented units (EOUs) and SEZ Units Director General Mr L B Singhal said, “It is natural because of the current economic slowdown … demand for space has also come down.”

After each stage of approval – in principle and formal – the developer is given time to proceed and return to the government for final notification. Even after final notification, the promoter gets time to make the SEZ functional.

While Mr Pillai did not disclose the companies approaching the Commerce Ministry for extension of time, sources said developers, mainly from the real estate sector, have put their SEZ plans on the back-burner.

The real estate majors such as DLF, Parsvanath Developers, Rahejas and Emmar have received formal approvals for tax-free enclaves. Several of these projects have been deferred. – PTI

Source : http://www.thehindubusinessline.com/blnus/03141921.htm

Lucrative SEZ Power Projects

New guidelines issued by the commerce ministry have made setting up of power plants within Special Economic Zones (SEZs) more lucrative than outside. The guidelines, which cover both stand-alone electricity generating zones and captive units, permit sale of power to users based outside SEZs. Experts say the new regulations would make it attractive to set up a power plant inside an SEZ, as the formalities required to start such projects in SEZs are much easier compared with the non-SEZ areas. After the SEZ Act of 2005 came into force, there were no clear rules on how power plants within the SEZs would be treated. One of the key issues was how to treat surplus power produced by power plants within the SEZs. The commerce ministry, as well as its revenue and power counterparts, was in talks to find a common ground on the matter for over a year.

The latest guideline will also allow power companies to sell electricity to users outside the SEZs after payment of duty. The move will benefit all SEZs including the one built by Adani Group at Mundra, Gujarat, which, according to the commerce ministry, will have a 2,300-Mw power plant. Maharashtra Industrial Development Corporation had got an in-principle approval from the Board of Approvals on SEZs to build two power-based SEZs in Raigarh and Chandrapur districts of the state. Moreover, multi-product SEZs, which have to be set up in areas over 1,000 hectares, also stand to benefit from the new guidelines as they require large amounts of power.

According to the new norms, a developer wanting to set up a stand-alone power-based SEZ will enjoy fiscal benefits for constructing the plant as well as for the raw material and consumables used in operating it. However, there could be no other factories in such zones. Moreover, such a power plant will have to be a net foreign exchange earner by sourcing more revenue in foreign currency, than in Indian rupees. This can be done by selling more power to other SEZs, who can pay the tariff in foreign currency. “It seems it has become more lucrative to set up power plants inside the SEZs,” said Abhishek Goenka, partner, BMR Advisors.

Source : http://www.indianrealtynews.com/sezs-india/lucrative-sezs-power-projects.html

Developers may get to buy back built-up space in STPI

NEW DELHI: The department of industrial policy and promotion (Dipp) is examining a proposal to allow real estate developers to buyback built-up area Home loan rates may drop shortly
sold in software technology parks of India (STPI) units and lease out the same to other businesses. As the STPI benefits are expiring in 2010, the government has observed that builders are not expanding in such units rather than carrying out the same business at other special economic zones (SEZs), a senior official in the Dipp told ET.

The issue came up in the last meeting of foreign exchange promotion board (FIPB), when the board took up real estate company Information Technology Park’s request for a clarification whether it could buyback builtup space constructed by ITP itself and lease out the same to other businesses.The company has set up an information technology park under the industrial park policy. The park has a total built-up area of two lakh square metres, out of which, 57,000 sq m space has been sold to various customers in STPI units.

The STPI policy entails exemption from income-tax for IT companies for a period of 10 years for setting up IT units. The tax benefits are expiring in 2010. There are around 6,000 IT units across the country registered under the STPI scheme.

The company has informed the board that as the STPI benefits would expire in a year, most of these units are not expanding and consolidating in SEZs. hence, these units have offered to the company to buyback the built up space sold by the company to them. The company has now sought clearance from the board whether it could buy back the built-up space and lease out to other business units.
The Dipp has now been directed by the FIPB to examine ITP’s proposal in detail, the Dipp official said. The government’s decision on this issue is being watched the industry in general, as many real estate developers have sold spaces in IT parks under the STPI scheme and the scheme ends in 2010.

STPI scheme is a 100% export oriented unit scheme for the development and export of software using data communication links or by physical media or by on-site Consultancy. STPI supports new companies by providing incubation infrastructure with all facilities such as Internet, telephone, fax and power back-up.

The Dipp has now been directed by the FIPB to examine ITP’s proposal in detail, the Dipp official said. The government’s decision on this issue is being watched the industry in general, as many real estate developers have sold spaces in IT parks under the STPI scheme and the scheme ends in 2010.

STPI scheme is a 100% export oriented unit scheme for the development and export of software using data communication links or by physical media or by on-site Consultancy. STPI supports new companies by providing incubation infrastructure with all facilities such as Internet, telephone, fax and power back-up.

Source : http://economictimes.indiatimes.com/News-by-Industry/Developers-to-buy-back-space-in-STPI/articleshow/4284618.cms

Developer Puts Project on Hold

Property investment company Ishaan Real Estate Plc (ISH.L) delayed certain projects and said it would not start two of its projects as economic slowdown shrinks the demand for property and rental values in India. Ishaan Real Estate, which invests in information technology parks and special economic zones (SEZ) projects in southern and western India, said the value of the projects may fall due to the rise in capitalisation rates, the pressure on rental values and the delay in projects.

The company expects rental values for further lettings in the retail sector to remain under pressure in the near to medium term. While the company delayed projects in the Indian cities of Mumbai and Hyderabad, it said development of the IT space in the cities of Bangalore and Pune will be not be started until “there is evidence of occupier demand and confidence that a satisfactory level of pre-letting can be achieved.” Shares of the company were trading at 23 pence on the London Stock Exchange.

Source : http://www.indianrealtynews.com/sezs-india/developer-puts-project-on-hold.html

SBI, Mahindra World City in tie-up for Jaipur hub

JAIPUR: India’s largest public sector bank State Bank of India has signed an agreement with multi-product special economic zone- Mahindra World City
to set up a 25-acre northern hub in Jaipur.

The hub, coming up in the domestic tariff area of the SEZ, would be the banks’ only data processing unit outside Maharashtra. It is likely to create 20,000 jobs in next few years.

Mahindra and Mahindra executive director Arun Nanda said the presence of SBI would give a tremendous boost to the company’s efforts of positioning Jaipur as a specialized banking, insurance and financial services processing hub.

“With the inclusion of SBI, we would now have three top banks of the world – Deutsche bank, ICICI and SBI – in our campus. It will help us to attract other banking, insurance and financial majors to establish their facilities in Jaipur.

ICICI bank has also signed up an MoU with MWC to set up its northern hub while Deutsche bank is already operating its offshore processing unit from this campus. Earlier, Rajasthan chief minister Ashok Gehlot inaugurated Mahindra World City’s light engineering and handicraft SEZ.

The 250-acre light engineering and handicrafts zone form a part of 3000-acre multiproduct SEZ that also have IT, auto ancillary and logistics zone which hosts 17 players including Q H Talbros, Veto Electropowers, Om Metals, Marsons, Dyanmic Engg, Tijara Polyprep, Polymed, A L Paperhouse, Rustic Furniture, Pink city Enterprises, Peadiprint etc..

Apart from the light engineering and handicrafts zone, the 750-acre IT zone of MWC, which is the largest IT SEZ of the country hosts IT majors like Infosys, Wipro, Tech Mahindra, Naggaro Connexions and Truworth.

“We are trying to rope in TCS as well. Our talks are in advance stages. We are a transparent company and want to make this zone a growth driver of this region,” said MWC chairman Sunil Arora.

The Mahindra World City, a 74:26 joint venture between Mahindra Lifespace developers Limited and state owned Rajasthan State Industrial Development and Investment Corporation Limited is likely to attract an investment of Rs 10000 crore over a period of 5 years.

Source : http://economictimes.indiatimes.com/Economy/SBI-Mahindra-World-City-in-tie-up-for-Jaipur-hub/articleshow/4206307.cms

Ten more SEZs get nod

The UPA government, in its last meeting on its flag­ship special economic zones policy, cleared 10 more proposals for such tax-free zones, taking the total number of SEZs in the country, after the enforcement of SEZ Act and Rules, to 714.

The commerce ministry expects exports from SEZs to touch Rs 90,000 crore by this fiscal-end. Exports from SEZs in April-December 2008 have touched Rs 67,000 crore, which is more than the Rs 66,638 crore in the whole of 2007-08. “There is a little bit slow­down but we think we will cross Rs 90,000 crore,” commerce secretary GK Pillai said. SEZs approved by the Centre include Navi Mumbai gems and jewellery SEZ, promoted by an aide of Reliance Industries chairman Mukesh Ambani, and L&T’s shipbuilding SEZ.

The board of approval (BoA) for SEZs, also gave its approval for an application to merge three notified SEZs of the Adani group—4,846 hectare (Mundra Port SEZ I) and 1,074.17 hectare (Mundra PortSEZII),as well as 293.88 hectare Adani Power SEZ -taking the total area of the combined zone to 6214.05 hectare. The total investment proposed for this SEZ is Rs 100,000 crore and the zone is expected to provide employment to 5 lakh people over the next 1O years.

This is the first time since April 2007—when an empowered group of ministers (EGoM) fixed the 5,000-hectare cap on the maximum area for a special economic zone (SEZ) following protests against forcible land acquisition for the zones that the Centre has given the nod for a tax-free enclave to breach this cap. Earlier, the EGoM had given the green signal for the same application.

The BoA agreed to the contention of the Adani group that since the notified areas of all three SEZs are contiguous, treating all the three SEZs as one SEZ would help prevent duplication of administrative requirements, do away with the need to create separate boundaries for each SEZ and also ensure that the developers can now build seamless infrastructure connecting the three SEZs.

The BoA also approved the proposals for 11 investors to join as co-developers, including six in the Mundra SEZ. The co-developers in Mundra SEZ would help develop schools (including one by the Delhi Public School ), colleges, hospitals and a 2300 mw power project (of which 300 mw will be commissioned next month. The SEZ will house a railway line, an airport and a port. It will be a part of the Delhi-Mumbai Industrial Corridor (DMIC).

The DMIC project, jointly developed by India and Japan, would entail an investment of $45-50 billion. Pillai told reporters after the BoA meeting, “five years from now it (Mundra SEZ) will be one of the show-pieces.”

Besides, the BoA has cleared a proposal on some technical complications involved in the Essar steel SEZ. Earlier, the Centre had decided against withdrawing the approval given to Essar and Mundra SEZs. The finance ministry had earlier alleged that these SEZs had violated the rules regarding vacancy of land.

Meanwhile, the commerce ministry has decided to give in-principle approvals (for viable proposals without the required land) only to proposals for multi-product SEZs and not to sector-specific or IT/ITeS SEZs.

Source: The Financial Express

Lahari group charts Rs 400 crore for SEZ

Lahari Infrastruaure has invested close to Rs 400 crore on land in a special economic zone in the state. It has partnered with realty developer Hiranandani for the project which has just got off the ground.

The SEZ project will be developed over 15 million square meters of land. Around two million square feet’ will be developed in the first phase that is slated for completion by 2011. SEZs are tax-free zones meant to promote exports.

“After the first phase, around 1.5 million square feet of land will be developed every year,” said Lahari Group chairman Hari Babu. According to him the Hiranadani group is in talks with the country’s largest bank State Bank of India for Rs 300 crore to fund the first phase.

The Hiranandani Group holds a 70% stake in the SEZ, while Lahari Infrastruaure holds the balance 30%. The equity holding is in the form of land. Hiranandani will develop the infrastructure over the next 12 years or so. The companies have inked an agreement with an undisclosed company to lease out 1 million square feet.

Two companies including Suven life Sciences will take on lease 1 lakh square feet each after the completion. The SEZ, called Hiranandani Upscale, will have facilities for Information Technology (IT), IT Services, Banking and Education apart from a free-trade zone and warehouse. The joint venture has to be approved by the Hyderabad Urban Development Authority and Environmental Clearances. The turn over of the Lahiri group was around Rs 70 crore in FY 08.

Source : http://propertybytes.indiaproperty.com/?p=3336

Hirco signs MoU with Tata Power for Panvel township project

MUMBAI: Real estate developer Hirco Developments on Tuesday said it had signed a Memorandum of Understanding (MoU) with Tata Power to ensure power  supply for its Panvel Township project.

“The association with Tata Power will enhance our ability to provide reliable power solutions to our customers,” Hirco Developments Chairman and Managing Director Firdose Vandervala said in a release here.

The company is putting up a mixed-use SEZ at Panvel on the outskirts of Mumbai.

Source : http://economictimes.indiatimes.com/News/News_By_Industry/Services/Property__Cstruction/Hirco_signs_MoU_with_Tata_Power_for_Panvel_township_project/articleshow/4106704.cms

USEL to invest Rs 50,000 crore in Gujarat

The Singapore-based Universal Success Enterprises Ltd (USEL), in partnership with Indonesia’s Salim Group, is planning to invest Rs 50,000 crore in Gujarat in the next 10 years. The investments will be in infrastructure-related sectors such as the Special Economic Zones (SEZs), ports and the like.

The company would sign the requisite agreements with the State Government this month. Prasoon Mukherjee, chairman, USEL said, “The company, which has assets worth $ 4 billion in India, mainly in West Bengal, is diversifying into different sectors and would be investing the equivalent of $10 billion in western States in the first phase of its India plans, mainly in the priority sector of infrastructure.”

“We will partner with the Salim Group in all our projects in Gujarat. The company would be investing between Rs 500 crore and Rs 1,000 crore in the first two years, till 2011, from its own internal resources,” Mukherjee added.

Source: http://propertybytes.indiaproperty.com/?p=3264

India Government approves Modern India warehousing SEZ

Projects today reported that Modern India Free Trade Warehousing, a flagship company of Modern India has received an in principle approval from the Union government for its warehousing SEZ planned at Panvel in Raigad district of Maharashtra.

The planned SEZ is 18 kilometer away from Jawaharlal Nehru Port Trust and 9 kilometer to 10 kilometer away from the new international airport. The SEZ entailing an investment of INR 375 crore will spread over 40.47 ha.

Modern India has to acquire land for the SEZ and start the process of financial closure. It is in discussions with logistic companies in Japan, West Asia and China to enlist them as partners in the project. In the warehousing SEZ, people can import, repair, repack and export products from the zone itself.

As per report, it has also received approval for setting up an IT SEZ in Khopoli. The real estate company will invest around INR 1,100 crore, of which INR 450 crore will be debt and the remaining will be equity. It will create infrastructure for both hardware and software industries in the upcoming IT SEZ.

Source : http://steelguru.com/news/index/2009/01/18/Nzg5ODA%3D/India_Government_approves_Modern_India_warehousing_SEZ.html

9 SEZs Get Govt Approval

The government today approved nine special economic zone proposals, including the Navi Mumbai SEZ promoted by Reliance Industries Chairman Mukesh Ambani’s close aide Anand Jain. The Board of Approval in the Commerce Ministry gave seven ‘formal’ approvals, while two were given ‘in-principle’ clearances. The BoA, chaired by Commerce Secretary G K Pillai, considered 12 proposals in all. Formal approval was given to the Navi Mumbai SEZ, JSW Aluminium SEZ, agro-product SEZ by Anand Agrochem India, and Kerala Infrastructure’s IT project, since the promoters of these have land.

Larsen & Toubro’s proposal for an IT SEZ was deferred “because there was no clarity on land,” Pillai told reporters after the BoA meeting here. The Anand Jain-promoted Navi Mumbai SEZ is promoting different tax-free enclaves. There is a ceiling of 5,000 hectares on a single SEZ. In-principle approvals were granted to Lepakshi Knowledge Hub Pvt Ltd’s multi-product tax-free enclave in Andhra Pradesh and Karaikal Port SEZ. The government has so far given formal approvals (those possessing land) to 552 projects, of which 278 have been notified and 87 are operational.

Source : http://www.indianrealtynews.com/sezs-india/9-sezs-get-govt-approval.html

DLF staggers SEZs on fund crunch

DLF, which recently asked the government to cancel the approval for an IT special economic zone (SEZ) near the capital city, may start five of its other SEZs after 2010 on an expected revival in demand for real estate, according to sources in the company.

The proposed SEZs are in Khurda district in Orissa, Kancheepuram in Tamil Nadu, Kolkata in West Bengal, Sonepat in Haryana, Gandhinagar in Gujarat among others, according to the list of SEZs notified by the government.

“It is not feasible to start all the SEZs at one go, since it involves a lot of investment and time. We will do it in a phased manner. We will complete the already started SEZs in 2010 and then look at others,” said a DLF spokesperson.

DLF is already developing five SEZs — Gurgaon (two), Hyderabad, Chennai, Nagpur — expected to be completed by 2010. The company is planning to make a total investment of Rs 40,000 crore in its 10 SEZs.

Developers need to operationalise their IT SEZs within three years after the project is notified. While the already started SEZs got notified between December 2006 and April 2007, most of the yet-to-be-launched SEZs got notified in 2008. Recently, DLF asked the commerce ministry to denotify an SEZ at Shivaji Mart near Delhi for lack of interest from companies for IT space. Instead of leasing space, the company now plans to build office space and sell it, sources added.

However, analysts have concerns about sufficient demand for SEZs in the coming years as the economy slows down and companies, mainly IT firms, go slow on their expansion plans.

“If the economy weakens further, they may have to defer the launch of new SEZs. If there is no demand, there is no point in launching new projects,’’ said an analyst with an international brokerage, who did not want to be identified.

But a DLF spokesperson denied any impact of the slowdown on their plans, “If there was no demand, we would not have continued with our existing plans. If we are going ahead with them, it means we have enough demand for those projects. We have understanding with 70-100 Fortune 500 companies, who will follow wherever we launch our new projects,” he said.

Source : http://www.business-standard.com/india/news/dlf-staggers-sezsfund-crunch/00/51/346213/

Developers in India have been forced to drop the price of their off-plan apartment developments

“In my view the current global financial situation has led to one of the greatest bargains in overseas property investment presenting itself in India. The Orchard View development in Rudrapur, India, where the formation of a Special Economic Zone led to the development of some 400 factories in a massive industrial estate right by the development. This was to bring hundreds of workers into the area looking for rental accommodation, of which Orchard View was to help with the under-supply. Now, many of the factories who took plots on the estate have either trimmed their production, or closed their factories altogether and prices have dropped significantly.

“However, no one investing in property now is doing so to make immediate capital gains, or even make gains during the current financial situation, but are investing with the view to making long-term gains. Buying property like this below its market value, is an incredible mid-long term investment opportunity, because they will appreciate massively throughout India’s economic recovery, and the re-birth of the industrial estate, during which time the apartments are also set to make impressive rental yields.”

The Orchard View development offers 1, 2 and 3 bedroom luxury apartments just outside the Special Economic Zone (industrial estate) from just over £30,000. It is a securely gated 6 acre community, with manicured professionally designed grounds maintained by a professional gardener. The apartment building and apartments are finished to a high standard with marble throughout. The complex, which is close to all amenities, comprises its own commercial centre, restaurant, swimming pool, gymnasium and recreation centre.

Property Abroad has many other properties in India, most of which are priced below their market value and as such excellent investment properties. Find out more by visiting the site.

About Property Abroad

Property Abroad is rapidly growing into one of the best known, trusted and most successful overseas property portals in the U.K. With a slick dynamic site and very reasonable rates Property Abroad currently has among the most extensive worldwide property listings on the net.

Source : http://www.pr-inside.com/developers-in-india-have-been-forced-r990182.htm

Predictions for the Indian real estate in 2009 – Part – I

Asset class: Office

• Even the well–established CBDs markets are likely to face vacancies in 2009, as the first impact of the global recessionary economy is being felt by the financial and other fore-runner organizations. The vacancy may be further fuelled in CBD areas by the consolidation moves of many organizations.

• We will also see a reversal of the trend witnessed over the last two expansionary decades where large organizations moved from owned to leased assets. Given the drop in prices and availability of choice properties, this will be a good time for surviving organizations to announce their new leadership positions through trophy purchases. Jones Lang LaSalle Meghraj is currently transacting in many such mandates.

• This CBD vacancy rate, if triggered, can add significant pressure to the upcoming/newly developed premises in upcoming front-office districts such as Lower Parel in Mumbai and Nehru Place in Delhi.

• While the sentiment in the US and Europe towards outsourcing is positive in the long term, as the corporations there realize its need more than before, the active decision-taking for expansion by BPOs is totally suspended for the moment. We do not expect this to change in the 2009. Hence, the pressure on upcoming and announced projects –especially SEZs – will continue in 2009.

• In 2009, IT SEZs will also experience further pressure from the fact that the STPI concessions may be extended for another couple of years. While these concessions are important for IT companies’ survival during the recession, they will adversely impact SEZ developments.

• In 2009, the peripheral areas of metros as well as the Tier II/III cities will need to compete with the central or secondary business districts for the same set of talents, thus dissolving the clear segmentation which was emerging and separating various micro-markets over the last couple of expansionary years. Newly developed or announced projects are especially going to suffer and may see continued vacancy in 2009.

• However, 2009 will also see practices in the real estate business become more organized and professional, as they did in the late ‘90s and early 2000s with the introduction of FIs, foreign money and the creation of Government-supported large development formats. This time around, a similar professional approach may reach warehousing land acquisitions.

Source : http://propertybytes.indiaproperty.com/?p=3141

Makeover of Surat on cards with setting up of two SEZ

Surat, the second biggest city of Gujarat, India is known for its manmade textile and diamond polishing industry. Surat also has to its credit the largest number of multi-head embroidery machines in the world (over 40,000) installed in last 3 years. The city manufacturers over 2,500 million meters of fabrics per day.

The diamond industry contributes to Rs 700 billion in exports per year and nearly 90 percent of all diamonds processed in the country are done so in Surat. Now, the city of Surat is now on the verge of a mammoth makeover. On the cards are two SEZ, one meant for the apparel industry and the other for the diamond industry.

To get a better perspective on the industry development activities, fibre2fashion.com spoke to two torch bearers of the textile and apparel associations, Mr. Devkishan Maghani, General Secretary of Federation of Surat Textile Traders Association (FOSTTA) and Mr. Bhimaraj Pawar, President of Gujarat Garment Manufacturers Association (GGMA).

We asked them to comment on the SEZ activity, to which Mr Maghani replied by saying that, “Apparel Park is ready in Sachin area of Surat. A few units have commenced and others are in the process of doing so and the second SEZ is a Gems & Jewellery Park which is under development and will take around one year to complete. Surat is famous for diamonds, textiles and zari used in decorative clothing and items.”

Speaking to Mr Pawar, he said, “In month of July we have urged Ministry of Textiles to provide us closed mills and their land to accelerate the development of textile and garment industry in Gujarat. Ministry had asked us to provide a roadmap for the same. We had invited applications from our members and we have received around 400 forms from members who are interested and which we have forwarded to the ministry.”

He added by saying that, “We are also receiving support from Gujarat Government under Vibrant Gujarat Special project and the employment department. Employment to tune of around 25000–30000 is expected to be generated from this project.”

Source : http://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?news_id=67691

Dishman plans JVs with up to 10 foreign cos

AHMEDABAD: Dishman Pharmaceuticals is planning joint ventures with 8-10 global mid-sized companies through joint ventures. As per the plan,  Dishman’s upcoming pharma SEZ near Bavla, Gujarat will house manufacturing facilities of the JV companies.

The pharma major has reserved 40% of the SEZ area (15 lakh sq ft) for the upcoming facilities. Nearly 20% land in the pharma SEZ has been earmarked for setting up captive units. The foundation stone of Dishman’s two SEZs — pharma and engineering — was laid by chief minister Narendra Modi on Tuesday.

Talking to ET, Dishman Pharma managing director JR Vyas said: “Almost 40% land at our SEZ is kept reserved for our future JV projects, which the company intends to start in the next few years.”

According to Mr Vyas, the JVs will be based on an outsourcing format where Dishman would hold a minority stake. “We would use our expertise in manufacturing and management of these units, as per the requirements of our partner,” he added.

According to Mr Vyas, with most international pharma companies scouting for future joint venture partners in India, Dishman’s strategy will help them to leverage the low-cost advantage. Globally, pharma multi-national companies are under pressure to reduce drug prices, following government pressure as well as competition from generic companies.

Dishman’s Pharma and Fine Chemicals SEZ is spread across 15 lakh sq ft, out of which it has occupied about 2 lakh sq ft (20%) for its own pharmaceutical production. The company has already received expressions of interest (EOI) from eight pharma companies, who are keen on setting up their units in the SEZ. These units are likely to take up to 30% space in the pharma SEZ.

Dishman Infrastructure, a wholly-owned subsidiary of Dishman, will execute both the SEZ projects. The company has already pumped in Rs 1,000 crore for both projects and will invest another Rs 750 crore for setting up its own pharma units at the SEZ.

The company expects to begin work by January 2009 and plans to complete it by May 2011. The pharma major also plans to dilute equity in its Swiss subsidiary — Carbogen Amcis — through IPO. “We plan to raise $100 million through IPO,” Mr Vyas added.

Currently, Dishman is one of the major players in the Contract Research and Manufacturing Services (CRAMS) segment in the country with a market capitalisation of Rs 2,258 crore.

“We have set a target to achieved $1-billion turnover by 2013 and believe we are on track to achieve the goal,” Mr Vyas added.

Source : http://economictimes.indiatimes.com/News/News_By_Industry/Healthcare__Biotech/Pharmaceuticals/Dishman_plans_JVs_with_up_to_10_foreign_cos/articleshow/3892557.cms

SEZs get nod to prune area

New Delhi: Six major SEZs have clipped the size of their projects, foregoing potential tax gains for them. The developers have got the commerce ministry nod to de-notify parts of their tax-free enclaves for better viability. The projects include Hyderabad Gems SEZ Ltd, Reliance Industries’ Navi Mumbai IT SEZ, L&T Phoenix Info Parks, Maharashtra Industrial Development Corporation’s (MIDC) agro SEZ, Vikas Telecom SEZ and Dahej SEZ.

The government has also allowed the de-notification of DLF’s IT SEZ near Delhi. The developers have realised that instead of holding on to the plots to earn future tax breaks, it will be better to surrender them now to improve the projects’ financial viability. The realty sector has been one of the hardest hit in the economic slowdown. The SEZ projects were the crown jewels of the real estate companies.

The government has, however, deferred the Maharashtra Airport Development Corporation’s request to de-notify 361 hectares from the 1,578-acre multi-product SEZ in Maharashtra.

MADC officials said if the ministry does not permit them to use the rail and cargo operations in the non-processing area of the SEZ in Nagpur, they would like to get that portion de-notified. They said rail and cargo access for units within and outside the SEZ is vital to the SEZ’s viability. While officials of other SEZs did not immediately respond or declined to comment, L&T Phoenix Infoparks officials confirmed that they are seeking a de-notification of two hectares in their Vijayawada SEZ and use that space to build housing or commercial complex.

The companies have opted for de-notification because they still meet the minimum area requirement for SEZs. For instance, the minimum area for an IT SEZ is 10 hectares, while it is 100 hectares for a sector-specific SEZ and 1,000 hectare for a multi-product SEZ.

To obtain an order from the government for a partial de-notification, the developer has to cite reasons and provide proof of refund with interest of any tax sops availed of on the area sought to be denotified. Also, that area should be free of industrial units or residential and commercial complexes.

Source :  http://www.financialexpress.com/news/sezs-get-nod-to-prune-area/397061/

BoA approves denotification of DLF Special Economic Zone

New Delhi, Dec 10 (PTI) The government has approved the denotification of the DLF Special Economic Zone, providing the realty major an exit from its IT/ITeS project, which it would have found difficult to sell in the midst of the slowdown.
The Board of Approval in the Commerce Ministry cleared the denotification of the DLF SEZ in its last meeting held earlier this week, sources said.

The company had got approval to develop the SEZ named ‘Shivajimarg Properties’, spread over 10.02 hectares in the heart of the national capital.

DLF has informed the government that it wants to withdraw from the project because of “less demand” for space from the IT companies in Noida and surrounding areas.

It also said that the company was resorting to “voluntary denotification” and it has not so far used any duty-free material as an SEZ is entitled to. The company has also not started construction at the site.

A company official confirmed that it has applied for the denotification of its SEZ.

IT and ITeS is the preferred sector for SEZ developers, since tax benefits under the Software Technology Parks of India scheme were to end by March next year.

Of the 260 SEZs notified up to September 2008, as many as 160 are related to IT/ITeS.

While the government has extended the validity of the scheme, the industry feels SEZ is a better option since the units get tax exemption for the first five years.

Real estate is facing a major slowdown for the past six months due to high interest rates and a liquidity crunch. Demand for office space has seen a sharp decline, leading to a lowering of rentals.

DLF is the largest real estate developer in the country. PTI

Source :  http://www.ptinews.com/pti%5Cptisite.nsf/0/2B1D1FCB8630C6E46525751B004BA5D0?OpenDocument

DLF drops Delhi SEZ plan

DLF, India’s biggest real estate firm, has dropped its plans to set up an IT Special Economic Zone (SEZ) in Delhi. The company cited the global slowdown as the reason behind the move.

Instead, it will utilise about 25 acres purchased from Sriram Industries three years ago for residential projects, company sources said.

The plot, close to Swatantra Bharat Mill, had an in-principle approval from the government to develop an IT-SEZ. The company has now applied for a formal withdrawal of the in-principle approval, sources added.

Last year, DLF had, in one of the costliest land deals in the city, acquired 37 acres close to the proposed IT-SEZ land for Rs 1,675 crore. The idea was to develop the entire space as an integrated township, including an IT hub.

Company sources said that all other DLF SEZ projects are on track. No construction had started on the particular land, thereby enabling them to apply for de-recognition of its SEZ status.

DLF is the largest commercial real estate player with around 38 million sq ft of ongoing projects and a total development potential of 164 million sq ft

Source : http://www.business-standard.com/india/news/dlf-drops-delhi-sez-plan/01/01/342668/

Crisis forces SEZ developers to review plans

NEW DELHI: India’s SEZ story, which generated protracted controversies last year, seems to have lost its sheen fo r now, thanks to the global  economic turmoil. As funds become scarce and demand for IT and industrial space diminishes, developers are looking to roll back their SEZ plans by seeking denotification or buyers for their projects. The country’s largest real estate developer DLF is looking for a buyer for its 10-hectare IT SEZ in Noida.

Three more developers are seeking to sell their IT SEZ projects in Noida and Gurgaon. One notified IT SEZ project, looking for a buyer, is located on the Sohna Road in Gurgaon. Brokers have approached potential buyers with proposals, without much success.

And that’s not all. Mumbai-based leading apparel exporter Alok Industries has decided not to go ahead with its proposed 80-hectare textile SEZ at Silvassa in the Union Territory of Dadra & Nagar Haveli. The company is understood to have decided not to seek notification for its SEZ, which received formal approval over six months ago. A company executive said Alok Industries did not see any rationale in pursuing the project as it will not give textile exporters duty-drawback benefit, thereby putting a question mark on the viability of the SEZ.

One large developer in Kolkata is seeking denotification for its SEZ even as another developer is requesting the government to denotify part of an IT SEZ near Mumbai. Notification puts certain obligations on developers, whereby he is expected to construct a minimum built up space in three years and reserve areas for specific usage. Once denotified, a firm gets the flexibility to develop project at his own pace and without any restriction on usage.

Meanwhile, India’s largest private company, Reliance Industries, has reportedly put on hold land acquisition at its proposed multi-product SEZ in Haryana.“Developers are facing severe cash crunch. They have no choice but go slow or exit projects.

But who will pick these projects,” says property consultancy firm Cushman & Wakefield director (transaction) Kaustuv Roy. Companies are putting off expansion plans and squeezing their space requirements as slowdown grips the world. “In six months, most markets in India will see supply of IT space far outstrip demand, bringing pressure on most new IT SEZs,” Mr Roy said.

A DLF spokesperson denied the company wanted to sell its IT SEZ in Noida. But a person close to the development said the company held negotiations with at least two Noida-based developers, though potential buyers later backed out as economic environment in general worsened, giving rise to fears that it may be unsustainable to have more IT space in a market like Noida, where supply has already edged out demand.

In many other projects, including multi-product SEZs, developers have put on hold acquisition of land. “Anyone who hasn’t acquired land so far will definitely not go for acquisition,” property consultancy firm JLLM managing director Anuj Puri said, adding that funds are difficult to raise and there was no urgency to pay farmers a high rate, when rates were likely to fall further.

Source : Economictimes

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.

RIL going slow on Haryana SEZs plan

Capital spending at Gurgaon, Jhajjar SEZs stopped, says executive, but company says work never began on site

New Delhi: The plans of Reliance Industries Ltd, or RIL, India’s biggest private sector company by market capitalization, to set up special economic zones, or SEZs, at Jhajjar and Gurgaon in Haryana may slow due to the global financial meltdown and a fall in demand for such projects.
An executive at RIL’s external public relations agency, however, said that work on the SEZs had not begun.
A senior RIL executive said the project was going slow and blamed the current business environment, which he described as “bad in all areas”.
“At this moment, we have been told not to spend money. Our capital expenditure on the sites have been stopped. The meeting to decide what to do next will happen next week in Mumbai,” said the executive, who didn’t want to be named because he is not authorized to speak to the media. “However, no formal directions have been issued.”
The SEZ plans are being executed by Reliance Haryana SEZ Ltd, a joint venture between Reliance Ventures Ltd, a subsidiary of RIL, and the Haryana State Industrial and Infrastructure Development Corp. Ltd, or HSIIDC, the state’s industrial development agency. While Reliance holds a 90% stake in the SEZ arm, the rest is with HSIIDC.
Mint had reported in July that Reliance Haryana SEZ’s land acquisition plans were facing hurdles, with land owners in the area demanding around three times the amount the company is willing to pay because land prices have increased since late 2006, when it made its offer. The company had acquired 9,500 acres of a targeted 25,000 acres in July.
A spokesman representing RIL did not specifically answer questions on the latest update on land acquisition or the deadline for the completion of the project. “With regards to Jhajjar SEZ, we have not begun work, hence there is no question of putting the work on hold,” Manoj Warrier, an executive with Neucom Consulting, a public relations agency working for RIL, wrote in an email.
SEZs are industrial enclaves that come with fiscal and other benefits. Companies wishing to set them up have to take initial approval from the government, acquire the land, and then have the SEZ “notified”, which means the units based there are eligible for the fiscal benefits.
RIL had originally planned one SEZ at Jhajjar, but after the government capped the size of such zones at 12,500 acres, the company decided to create two adjacent SEZs.
The Haryana SEZs are expected to require an investment of Rs25,000 crore and have provisions for a cargo airport and a 2,000MW power plant.
“A significant profit for the organization (RIL) is from polymers for which the rates have gone down. The first priority is for traditional business and SEZs are low on priority. Even if we put up the SEZ infrastructure, where is the demand for it from the consumers?” the RIL executive asked.
The company has a current polymer production capacity of 3.5 million tonnes per annum of polypropylene, polyethylene and polyvinyl chloride. The outlook for revenues from such products, however, is uncertain, as new polymer capacity comes on stream in West Asia amid a slowdown in global economic growth.
RIL posted the smallest profit increase in at least 10 quarters as it earned less from processing crude oil into fuels, although revenue jumped 40% to Rs44,790 crore in the quarter ended 30 September. Net profit for the quarter rose by a modest 7.42% from a year ago to Rs4,122 crore.
A Mumbai brokerage recently reduced the profits it expected from RIL’s SEZ projects. In a late-September report, explaining a reduction in the target price set for the share price of the company to Rs2,540 each from the earlier Rs2,780, Enam Securities Pvt. Ltd analysts Ballabh Modani and Parikshit Shah wrote, “The decline is mainly due to a cut in our SEZ valuation from Rs157/share to Rs30/share due to lack of clarity.”
The report, published on 22 September when the share closed at Rs2,039.10 each, was written before a steep fall in Indian stock markets. The RIL stock on Friday closed at Rs1,220.75, 40.13% lower from the 22 September price, a period during which the Bombay Stock Exchange’s benchmark index dropped 28.8%.
Explaining the probable reasons for RIL going slow on its SEZs, an analyst at a Mumbai-based domestic brokerage firm, who also did not wish to be named, said gestation periods in the business are long “and so generating revenues from them also takes a long time”.
Similarly, a New Delhi-based analyst at an accounting and consulting firm, who asked he or his employer not be named because of business considerations, said, “There is a slowdown in demand from the real estate and the industrial sectors. On the other hand, this being an election year, land acquisition will also be a problem.”

Source : www.livemint.com

Private equity deals in realty sector down

New Delhi: Private equity (PE) deals in the real estate and infrastructure space grossed about $3 billion in value during the first nine months of 2008, over 9 per cent lower than the year-ago period.

Moreover, PE investors, who had been cherry-picking realty deals earlier this year, appear to have tightened their purse strings now, with September seeing only two transactions worth $12 million compared with August, when $427 million of PE funds was infused into various projects.

According to data compiled by Grant Thornton, while the number of deals during January-September was higher at 45 against last year’s 39 deals, the average ticket size of the transactions has come down substantially in the first three quarters of 2008, reflecting softening valuations across the crisis-ridden real estate sector.

Cash crunch

Realty companies have been facing a severe cash crunch with bank loans drying up. Their problems have been compounded by plunging sales and weak demand. Even the festive season has been laggard with developers witnessing 40-50 per cent lower volumes this season compared to the previous year.

While leading real estate developer Parsvnath has said it would shortly weed out ‘non-performers’ as part of its cost-cutting measures, even Unitech — which categorically ruled out any retrenchments — gave lower increments to employees.

Treading with caution

“With banks going slow on lending to the real estate sector, realtors are turning to PE funds. However, as realty demand is slow, and the projections by builders on selling price and velocity of sales turn out to be less than anticipated, the PE funds too are treading with caution,” said Om Chaudhary, Managing Director of Fire Capital, which has already committed $150 million into seven projects and would invest another $50 million, before raising its next fund of close to $500 million in 2009.

Chaudhary said developers, who had acquired land banks at astronomical rates, are still unwilling to lower valuations, despite the turmoil in the market.

Realty opportunity

“The situation would get even more challenging in the next few months driven by the general downturn in the market. But this also offers a great opportunity for PE investors to look at real estate industry again,” said Harish H.V., Partner, Transaction Advisory Services, Grant Thornton.

In August this year, Atul Ruia-promoted real estate developer of Phoenix Mills raised €200 million (about Rs 1,300 crore) from a German real estate fund MPC Synergy, while September saw BTS India Private Equity Fund announcing an investment in Saisudhir Infrastructures Ltd.

Other PE transactions inked this year include Lehman Brothers Real Estate Partners’ $175-million investment for 50 per cent stake in the initial phase of Unitech’s Western Expressway project in Mumbai; Axis Bank’s investment in Lavasa Corporation, a subsidiary of Hindustan Construction Company, in the form of convertible preference shares and convertible debentures; and Citi Property Investors’ infusion of about $160 million in four SEZ projects of real estate firm BPTP Group

Source : Sify.com

AIG Global Real Estate Invests in Velankani Tech Park, Chennai

An affiliate of AIG Global Real Estate has announced an investment in Velankani Tech Park, a part of the Bangalore-based Velankani Group. Velankani is developing a notified Special Economic Zone (SEZ) in Sriperumbudur, located approximately 50km from Chennai. The proposed development of 8.5 million sq. ft. is aimed to provide plug-and-play space for electronics hardware and telecom component manufacturers and IT/ITES companies. Velankani Tech Park is expected to house around 20-30 global component suppliers and will meet ready-to-move-in space requirements of vendors to telecom original equipment manufacturers & Electronic Manufacturing Services (EMS) giants looking to set-up operations in Sriperumbudur.

Kiron Shah, Director and Founding Member of Velankani Group, commented that the development is uniquely positioned and has a first mover advantage in the region. “The Velankani Tech Park is the only SEZ which will offer a plug & play facility in Sriperumbudur for companies and a seamless experience in commencing operations. Substantial effort has already gone into the conceptualization of the project over the last two years leading to commencement of development at the project site. All basic infrastructure will be provided by Velankani to meet tenant requirements including future expansion.” He further added “AIG Global Real Estate brings tremendous experience in development of industrial parks worldwide and we are excited to partner with them. We will benefit from their global client relationships and hands on design and development expertise. This partnership is a starting point and we believe it will flourish and grow in the future.”

Rajesh Agarwal, Managing Director, AIG Global Real Estate India, stated, “We are excited to partner with the Velankani Group and invest in a project that caters to an unfulfilled demand in the region. We look forward to strengthening and expanding this relationship with Velankani. This investment is a statement of AIG Global Real Estate’s continued commitment to India and our investors, and we are looking forward to expanding its presence in India and building strong relationships with local partners and investing in attractive opportunities in the region.”

Avista Advisory Group were advisors to the Velankani Group on this transaction.

Networkcomputing.in

Vishakapatnam: Feeling the ripple effect

Real estate prices in the country are witnessing a sharp drop with the US financial sector slowdown spilling over to the rest of the world.

In India, it has also lead to a credit crunch, forcing the builders and infrastructure developers to either go slow or put breaks on their ongoing projects.

Besides, speculators and investors have almost vanished from the market and real customers are finding its hard to finance their property investment plan.

Visakhapatnam, considered to be an emerging investment destination in Andhra Pradesh after Hyderabad is not insulated from the current crisis. Though in the long term, the situation may turn around, at present, the city’s real estate prices are witnessing a 50% downturn.

Though independent analyst reports and builders are trying to put a brave face by citing the city’s inherent advantages in terms of availability of skilled labour, infrastructure and the presence of a number of PSUs, sources say most real estate projects are experiencing a slowdown.

“There are no takers for much of the commercial space though the retail sector is witnessing comparatively better response. However, the standard prices quoted by builders and brokerage houses even two months ago have gone down by almost 50%,” said a local property consultant based in Visakhapatnam.

He adds that during 2004-06, the government also played a major role in jacking up the prices in the city. “The municipal authorities started auctioning the land and they garnered Rs 1,000 crore in the first phase. However, those who bought the land are now finding it difficult to continue the project development due to the high cost of funding,” he said.

Builders on the other hand say that most places in the city are witnessing a price rise. “Places like Rishikonda Madhurwada and Sitammatara are the preferred destinations for commercial and residential projects. In fact, Vizag real estate prices have gone up by at least 15% during the last six months,” says a leading infrastructure company official.

According to a recent property report by Jones Lang LaSalle Meghraj (JLLM), Vizag is expected to be one of the next growth drivers in the coming decade. Development of a greenfield international airport and a new seaport at Gangavarm are a big draw as it will help fuel trading activities.

“Satyam Computer Services for instance has 1 lakh sq ft facility in Vizag. The company is also developing an SEZ in the city. Wipro’s facility is also under development, while HSBC has a large BPO centre operational in the city. Besides, IBM Daksh and EDS are planning to expand operations to Vizag,” said George Johnson, regional director of JLLM.

According to him, demand for real estate by IT companies is expected to go up in the future. “With an expected global slowdown, IT companies will look at reducing cost of operations and Vizag will be an ideal location for them as the real estate prices are cheaper here compared to Hyderabad,”he added.

The report suggests that the state government is also proactive in attracting IT/ITeS companies to Vizag.

The government has planned a 2,000 acre IT layout in Rishikonda, 10 km from the city. The state government has allocated over 20 hectares of land to Satyam for developing IT SEZ in Vizag. Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is setting up two IT SEZs and it has received 16 hectares and 36 hectares of land near the city.

Ramky Group is developing an SEZ — Jawar Pharma city and Biocon has already announced Rs 1,000 crore investment there for opening a facility. The government has also allotted 1,700 acres of land to Unitech to build a knowledge city.

The retail market is showing an upward trend. Currently the city has no operational malls, but there are six malls under various stages of construction expected to be operational by 2010. Out of these, three malls totalling to a built-up area of 4,00,000 sqft will be operational in 15-18 months.

Economictimes

Nagpur finds a place on the Investment Map

According to a study done by Deloitte Touche Tohmatsu India, Nagpur is among the fastest growing investment destinations in India. Developments in the recent years support this statement. Maharashtra Airport Development Company (MADC) is developing a multi-modal international airport and a multi-product SEZ over 4,025 hectares. The MIHAN project and SEZ, which estimates an investment of $11,625 million, is tipped to be a major driver of economic growth not only for Nagpur, but also for the entire Vidarbha region, said MADC vice-chairman and MD RC Sinha. Deccan Cargo & MADC have signed a MoU to develop a cargo hub, while Air India and Gati have joined hands to develop a dedicated freighter service with Nagpur as hub. Gurgaon-based Radisson Group has started work over a five-star hotel in Nagpur. The other investments include that of the Taj Group, Hyatt, Leela, Kamat Group and Fariyas Group. Moreover, work on real estate projects like Sahara City Homes, is also in progress.

According to property consultants Jones Lang LaSalle, Nagpur is among top IT/ITES commercial destinations among the Tier III cities. IT majors like TCS, Wipro, Satyam, HCL and Hexaware Tech have purchased around 500 acres for their proposed projects. On the investment front, four major sectors are expected to fetch an investment of around $16,135 million over the next decade or so. The tourism sector has pegged an inflow of $120 million. In this context, The Economic Times and Vidarbha Economic Development Council have planned a two-day international summit on Investment Opportunities in Nagpur on November 26-27 at Nagpur. Deloitte is the knowledge partner for the summit titled “Nagpur-the Growth Nucleus of India”. The summit will focus on investment opportunities in the sectors of urban infrastructure, SEZ and MIHAN, multi-modal logistics, and tourism infrastructure.

Indianrealtynews.com

Singapore may set up SEZ in India

Singapore is keen to set up a special economic zone in India, but also voiced an understanding that the acquisition of large tracts of land was a sensitive issue in the South Asian country, unlike in China. “I had proposed the idea of having a special economic zone with India to Premier Manmohan Singh two years ago and he was very enthusiastic about the idea,” senior Singapore Minister Goh Chok Tong told the Prawasi Bharatiya Diwas, a conclave of more than 800 members of the Indian diaspora from 20 countries. Widely credited to be the man behind the “India fever” in Singapore, Goh said at a special session on “Personal Reflections on India” that he knew there had been problems in acquiring large areas of land required to set up an SEZ.

Comparing the condition with a “different system” in China, the former premier said his project for setting up an “Eco City” in April last year in China was expedited by the authorities and land was soon acquired. “In China because of a different system, things can move much faster,” Goh said, adding, “We are still interested and are still looking for that piece of land in India”. The senior minister also said the city state was open to entering into infrastructure projects in India in partnership with Malaysia. His response came to a query from Samy Vellu, the president of the Malaysia Indian Congress (MIC), who asked if Singapore would be keen to take up infrastructure projects in India along with Malaysia by pooling talents from both neighbouring countries.

Source: http://www.indianrealtynews.com

Kamal Nath to push SEZs cause in EGoM next fortnight

New Delhi, October 7 With a change of guard at the Reserve Bank, the commerce ministry will be pushing again for treating bank credit to special economic zones (SEZs) projects on a par with other industrial advances. The RBI had, in September 2006, directed state-owned banks to offer loans to SEZs on the same terms and conditions as offered to real estate projects, which had affected credit flow to what the ministry calls “new engines of growth”.
According to the commerce ministry, one of the major objectives of SEZs is to develop industrial, commercial and social infrastructure, and they can not be treated like commercial real estate projects. Treating SEZs like real estate resulted in higher interest costs since banks have to make extra provisioning and assign higher-risk weightages on such advances.

With only a few months to go for the general elections, the Government has once again decided to clear out the air around some of the long-standing issues pertaining to SEZs. The Empowered Group of Ministers (EGoM) on SEZs, chaired by external affairs minister Pranab Mukherjee, is likely to meet later this month, possibly around October 20, to try and sort out certain problems being faced by SEZ developers and units. Some of the major issues yet to be resolved are those of the interpretation of Section 10AA(7) of the Income Tax Act, imposition of a minimum alternate tax (MAT) of 10 per cent on SEZ units, removal of export duty on supply of steel to SEZs, availability of central value-added tax (Cenvat) credit to domestic manufacturers on inputs used in finished goods supplied to SEZ developers and the contention over the RBI’s definition of SEZs as real estate and not infrastructure projects.

Commerce ministry has sought an amendment to the Section 10AA(7) of the IT Act since SEZs are supposed to be given a 100 per cent tax break on exports. With this clause, however, tax exemption is bound to be given based on the ratio of export sales from the unit to the total turnover of the entity. This glitch has greater consequences particularly for IT SEZs, which are not usually set up as separate subsidiaries unlike in multi-product or manufacturing SEZs.

Source : Indian Express

MP Govt to tie up with Gwalior firm for realty project

The Madhya Pradesh government will be tying up with Gwalior Agriculture Company Ltd (GACL), a subsidiary of Gwalior Sugar Company Ltd (GSCL), which has proposed a special project comprising a special economic zone. The company may also join hands with the Airports Authority of India. The project will be a single real estate project offering employment to 60,000 people, while planning a township for 200,000 people. The project will be completed with an investment of Rs 20,000 crore. The project will be completed in four phases. The first phase will create an aviation facility, the second will have an air-cargo and logistics hub, the third will develop an industrial or agro-processing park, while the fourth phase will create a township, medical tourism, a biotech university and a leisure destination.

The Project Clearance and Implementation Board (PCIB) had given in-principle clearance to the project. This project also involves foreign direct investment of Rs 6,000 crore. The company has proposed to join hands with Singapore-based consultant Jurang International, a Singapore airport consortium. Earlier a proposal submitted to the PCIB claimed to have 3,800 acres for the SEZ and the aviation and cargo hub, 770 acres of urban land for township development, and 4,000 acres for agriculture development.

Indianrealtynews