Real Estate News No 27

Mumbai Property Lease Deals Still Rise to New Peak, Sales Stay

MUMBAI: Property lease transactions in Mumbai continued to rise to new peaks with June knowledge showing 12% year-on-year jump at 11,401 deals, highest since February 2010. Property Registrations, however, rose mere 3% from a year ago throughout the month to 4,869, showed a report from brokerage Prabhudas Lilladher.

The trend continues to point that home patrons, who are looking forward to a correction in property costs, value more highly to lease flats than shopping for on outright basis as of currently.

With interest rates remaining firm the woes of the trade are seemingly to continue. With developers sitting on highly leveraged balance sheets, a value cut becomes a powerful chance, the brokerage said during a report.

"We believe the challenges to the sale situation within the town still stay high and a lot of must happen to correct the stressed affordability equation amid high property costs," the report said.

The brokerage has maintained its cautious stance on the city's realty situation. It conjointly added the situation for industrial realty within the town remains really weak, with vacancies levels at around 20%.

Real Estate News No 26

CREDAI Demands Single Window Clearance System to Hurry up Approval Processes

MUMBAI: realty trade body, CREDAI, has demanded for one window clearance system, to hurry up the approval processes. "McKinsey has said in its report back to the govt. of India that delays in approval processes alone increase sale price of homes by 40%," said CREDAI in its press unleash.

The trade body has conjointly taken up the difficulty of confusion caused by varying directions from state and central government.

"The varied Central and State Government Departments are issuing directives in isolation," said the discharge issued by CREDAI, "For instance, the atmosphere Ministry issued Building Approval tips authorising its Committees to link the peak of a building to its distance from a fireplace Station, though the Ministry is neither the technical nor the executive head of fireplace Safety issues! Such arbitrary exercise of power by MoEF has crippled the world attributable to approval delays, adding to costs" Delays attributable to multi level clearances, from virtually 40 agencies, takes virtually as long as 18 months.

Real Estate News No 25

Tribunal Asks CCI to Complete Proceedings in DLF Cases by September

NEW DELHI: The Competition Appellate Tribunal has asked the competition watchdog to complete proceedings in 3 cases against assets firm DLF by September 30, whereas refusing to permit the firm to use the contentious clauses in its agreement with patrons.

The tribunal on Wednesday directed the CompetitionCommission of India to submit its suggestions on modification of the allegedly abusive clauses, besides finishing all pending proceedings within the cases slapped by the patrons of Park Place, Belaire and Magnolia comes in Gurgaon.

Responding to a question from the firm, the tribunal clarified that the CCI's 'cease and desist' order would stay in place, implying that DLF cannot enforce or use the allegedly one-sided clauses with its existing or new customers.

The tribunal additionally asked DLF and also the patrons of Magnolia project to submit their version of the proposed changed clauses to the CCI by September-end, so all 3 cases may be taken up along within the next hearing scheduled for the start of October.

This was the tribunal's 1st hearing since Compat Chairman Justice Arijit Pasayat retired on May 9. The hearing occurred below Justice VS Sirpurkar, the new chairman, who is additionally heading the new bench.

The CCI had imposed Rs 630 crore penalty on DLF in August 2011 for alleged abuse of its dominant position and for one-sided contracts with patrons of Belaire and Park Place comes. It had additionally passed a 'cease and desist' order over unfair conditions imposed on the patrons of its flats.

The Compat stayed the order in November 2011, when DLF filed attractiveness against the CCI order.

The patrons of the 2 comes had filed a grievance with the CCI in could 2010. The grounds of the grievance were delay in possession and arbitrary changes within the building set up and structure by the builder. As an example, Belaire was to originally have 5 towers with 19 floors every however DLF later increased the quantity of floors to 29.

Harsh Sehgal, president of the Park Place Residents WelfareAssociation, told ET that although the CCI's 'cease and desist' is in place, DLF has been demanding interest on delayed payments from home patrons in these comes at the speed of 15%-18% and has been paying solely Rs 10 per sq ft for delays on its half solely to those that haven't delayed payments.

"We had earlier filed a contempt petition with the CCI that was heard on could fourteen and also the order on its still awaited," said Sehgal.

Real Estate News No 24

Wadhwa Cluster, Deserve Exim Ink Pact for Thirteen.5-Acre Chembur Slum Rehabilitation Project

MUMBAI: Mumbai-based builder Wadhwa cluster has entered into an agreement with another native developer Deserve Exim to amass a slum rehabilitation project unfold over 13.5 acres in town suburb Chembur, said persons conversant in the event.

The project, with total estimated saleable area of over 8 lakh sq ft, has revenue potential of nearly Rs 900 crore. Deserve Exim has already applied to the slum rehabilitation authority with the project proposal, and therefore the development potential might vary consistent with the particular clearance , said one among the sources.

The 13.5-acre plot is a component of a bigger targeted project unfolds over 40 acres. However, Wadhwa has to this point entered into development pact for under initial section and is nevertheless to come to a decision on taking part within the entire 40-acre project.

Under the joint development pact, Wadhwa cluster can get 60% revenue of the project, whereas the remainder can attend partner Deserve Exim. As a part of the transaction, Wadhwa cluster is additionally expected to pay around Rs 50 crore as an upfront payment for the project in 2 tranches.

Wadhwa cluster officers declined to comment for the story, whereas an email question sent to Deserve Exim remained unanswered. The slum, underneath initial section of the project, is situated behind RK Studio in Chembur and has total 850 tenements that can ought to be rehabilitated to assert the free-sale part of the project.

Wadhwa cluster is aiming to develop residences targeting middle-income cluster. Currently , rate of such residential properties in Chembur is between Rs 11,000 and Rs 12,000 per sq ft.

In the backdrop of scarcity of open and vacant land parcels in Mumbai, slum rehabilitation comes are attracting realty developers with a chance to urge prime plots.

However, despite being developers, several giant entities don't have the experience in handling an SRA project that most significantly involves handling tenant problems and, therefore, they like tie-ups to urge access to those land.

Real Estate News No 23

Artist Subodh Gupta Buys Delhi House for Rs 100 crore

NEW DELHI: Subodh Gupta isn't any stranger to shaking up the art world together with his work exalting plebeian materials like utensils, tiffin boxes and even scrap into dear installations. The Delhi-based artist might shake things up again-this time, the capital's assets market.

Gupta, whose rags-to-riches journey from a little-known Bihar village to the high table of up to date Indian art in twenty years has acquired folklore standing, and his artist wife Bharti Kher have quietly bought a bungalow on an 865 sq yard plot in Sunder Nagar in Lutyens Delhi, a district where three-figure crore deals are the norm.

Both Gupta and seller of the property, who requested to not be named, declined to verify the deal or its terms. Gupta didn't reply to an email and a number of other reminders sent by ET seeking confirmation. however papers filed by him at the property workplace and seen by ET reveal the house-115, Sunder Nagar-has been registered within the name of Gupta and Kher.

While the precise transaction worth isn't known, dealers ofhigh-end properties say similar-sized homes in Sunder Nagar have recently modified hands for Rs 100 crore or a lot of.

If true, this is able to build it the primary reported instance of an artist acquiring a house with a three-digit crore worth tag and make a brand new marker of kinds within the world of Indian art, whose size and international profile has grown exponentially within the past decade.

According to trade estimates, annual turnover of the art business in India grew to an estimated $350-400 million (Rs 1,900-2,200 crore) in 2011 compared with simply $5 million in two hundred3. The trade has been growing at 30-35% a year, enriching Gupta and a breed of young artists like him.

Brokers with data of the transaction said Gupta and Kher are nevertheless to maneuver in to their new home and arrange to pull down the recent structure.

The new structure is predicted to embody their inventive designs and vision, though they're going to be barred from constructing something quite 10,000 sq. feet on the plot (the size of the current building), to keep with building bylaws in Delhi's Lutyens Bungalow Zone that need new constructions to not exceed the world or the peak of the recent structure.

Many of the homes in Sunder Nagar, a tony residential locality favoured by expatriates and whose famous residents embody cricketer Kapil Dev, industrialist Dhruv Sawhney and also the mother-son art collector couple of Lekha and Anupam Poddar, were inbuilt the years soon once Independence.

Real Estate News No 22

Property Sales Slump in Kerala as NRIs Lose Religion

BANGALORE: Residential property sales in Kerala have dropped up to 40% in the last 3 quarters as non-resident Indians, who account for 70% of the demand, slashed investments as a result of project delays, high costs still as higher returns on bank deposits.

Top builders like Sahara cluster, DLF, Unitech, SRK Group, Apple daily Properties and Abad Builders have either delayed, downsized or shelved their comes as a result of dwindling interest among NRIs, who are driving up property costs in God's own country regarding 20% each year.

"Property brokers' business from NRI shoppers has nearly halved," TKC Jose, president of assets Agents Association of Kerala, said. "The market has been stagnant and that we haven't seen a lot of activity from NRIs within the past six month," he said.

Typically, July-August and October-December are thought of peak seasons for NRI property purchases in India. July-August is summer vacation within the Gulf region --where most of the NRI remittances to Kerala come back from. however brokers and developers say there has been tepid response to date this year despite increasing remittances as a result of the depreciating rupee.

"Normally, property sales obtain once the rupee falls, however that trend isn't seen," says SN Raghuchandran Nair, managing director of Kerala-based assets firm SI Property. As per a World Bank report, $64 billion of remittances poured into India in 2011 as a result of weakening rupee and strong economic action within the Gulf Co-operation Council (GCC) countries. It’s estimated that cash sent by emigrants living within the GCC countries like Oman, the UAE and Saudi Arabia to Kerala is reminiscent of the state's budget.

LONG DELAYS

Most NRI investors blame long delays in project delivery for his or her call to not invest in property. S Jose, a senior official operating with a multinational food processing company in Dubai for 10 years, invested in property in Kochi in 2005 and was promised possession in 2 years. he's still waiting. "My cash has been misused... currently i might solely invest if the property is usually recommended by somebody known to me," he says. Trade insiders estimate that around 70% of residential properties in a very worth bracket of Rs 2,700 to Rs 4,000 per sq ft, underneath construction across Kerala, are delayed by over 2 years currently. There are some 10,000 such properties. "NRIs are terribly cautious and are solely shopping for property in comes that are completed or nearing completion. they are doing not wish to risk their cash," says PA Varghese , senior VP selling of Skyline Builders, a Kochi-based assets company.

PLAYING SAFE

Another issue worrying several NRI investors is high property costs within the state. Increasing NRI investment within the residential section over the past few years in cities like Kochi, Thiruvananthapuram and Kozhikode has led to over 20% increase within the capital worth annually. Investments have caught up since October last. Property costs across India have crossed the height level of 2007; however residential property sales are down anywhere between 10-50% in the country, mainly as a result of high property costs and rising value of borrowing. In Kerala, apartment sales have fallen 20-40%, diminishing the industry's attraction as a secure investment haven.

"I had earlier determined to speculate an extra Rs 80 lakh to buy property in Kerala, however currently I like better to place the cash within the bank," says Zubin J, a Keralite primarily based in Dubai. He had bought an apartment price Rs 70 lakh in 2005 and continues to be watching for its possession. in a very high interest rate regime, several banks provide assured come back of 9.5% on mounted deposits, creating several NRIs park their cash in banks than invest in property. George Sebastian, promoter of Kochi-based property brokerage firm international Properties, says some NRIs are investing in land, coconut grooves and farmhouses instead of flats. 

Real Estate News No 21

Mumbai Q2 Workplace Area Absorption Falls to Lowest Level Since 2009: DTZ

MUMBAI: Mumbai's workplace area transactions in April-June touched its lowest quarterly absorption level since initial quarter of 2009.

The total workplace area take up slipped 63% from last quarter to mere 0.42 million sq ft within the second quarter, said a report from property consultancy firm DTZ.

During the quarter, the country's monetary capital witnessed restrained new provider of 0.48 million sq ft workplace area, with most of the focused within the off central business district locations.

According to DTZ, developers have steer clear off any new project launches in Mumbai and are that specialize in leasing their existing workplace area inventory. This is often preventing any major drop in rental values.

Overall rentals have remained stable across all micro markets in Mumbai. Some developers have rescheduled their comes so as to avoid putting downward pressure on rentals, the report said.

"The moderation in take-up may be attributed to the slowdown within the domestic economy. Moreover, ongoing challenges within the Eurozone have heightened considerations of a worldwide economic slowdown. IT/ITES and BFSI sectors have consequently adopted a cautious approach towards enlargement and this resulted in below expected take-up in Q2," DTZ said.

The property consultant expects workplace area take-up possible to stay subdued within the short term and rental values across most micro markets to be harassed. Its forecast rents of grade A buildings to stay flat for the rest of the year from here on.