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Realty slump forces builders to look outside state

Add comment   |  July 7, 2014

AHMEDABAD: Low profit margin and a saturated market in Ahmedabad and better opportunities in other cities are pushing the real estate companies in the city to look outside Gujarat. Several developers are planning to set up residential projects in cities like Bangalore, Mumbai and even Dubai.

While companies like Arvind, Adani and Goyal have announced their projects, sources said that others like Iscon, B Safal and Bakeri are also mulling projects outside the state.

Arvind real estate has ambitious plans of coming up with innovative offerings and mega projects in Bangalore catering to residential and commercial space. Local developer Goyal has already completed a project in Bangalore and plans to start another. Another developer Bakeri is said to have invested in five acres of land in Bangalore, but has not planned a project so far. Amplus Realty Fund, an Ahmedabad-based real estate dedicated private equity fund, has made its first investment in Bangalore instead of Ahmedabad as part of a joint venture with Bangalore-based developer Assetz Homes. Amplus plans to invest over Rs 110 crore through equity investment, debt and customer advances for a mid and high-end residential project in Bangalore.

Similarly, Adani’s Mumbai project is under construction, while Iscon Group is planning to set up a project in Dubai. Sources said that city-based B Safal group is also exploring options outside Gujarat.

“There are better opportunities outside Gujarat now, especially in Bangalore where the land is available at the same rate as Gujarat but the selling rate is double. Fast and smooth selling and similar FSI norms make Bangalore a lucrative market for Gujarat’s developers, who are facing a slump and low profit margin in Ahmedabad at the moment,” said Monil Parikh, an Ahmedabad-based property consultant.

As compared to some new residential projects, which are selling above Rs 6,000 per square feet, most projects in Bangalore offer a stable rate of Rs 5,000 per square feet. Experts also attribute Bangalore’s attractiveness for Gujarat’s developers to its heavy dependability on the IT sector, which they plan to leverage.

“Instead of risking sales by concentrating on a single, difficult location, companies are looking at other stable markets. The sales in other cities, especially Bangalore, are prompting companies from Gujarat to plan projects there. It is a good strategy,” said Neeraj Tomar, head-Ahmedabad operations at JLL.

Source: TNN

Paint house blue-and-white in Kolkata and get full property tax waiver

Add comment   |  June 10, 2014

Kolkata is all set to turn into a blue-and-white city during the Mamata government.

The Kolkata Municipal Corporation (KMC) announced Monday that if you paint your house’ exterior blue-and-white, you will be fully exempted from paying property tax to the government. The Trinamool Congress-run KMC has come up with a proposal to waive the property tax for 2014-15 if a residential building or house is painted in the party’s favorite color combination — white and sky blue.

“We will allow full waiver of property tax for 2014-15 if anybody wishes to paint his/her house or even apartment buildings, of course residential, in white and sky blue – the theme color for Kolkata,” city mayor Sovan Chatterjee, who chaired the Mayor-in-Council meeting on Monday, said.

BJP state president Rahul Sinha was quick to question the logic behind the move and said it would only increase the state’s financial burden.

“Why white and blue? The government has to go to the public and explain the reason for such a colour choice before taking up such schemes. However, this act of the KMC or to say of Mamata Banerjee, is a childish one which will put the already bankrupt civic body into further financial crisis,” Sinha said.

Congress municipal party chief Mala Roy termed it as a gimmick.

“This decision will not benefit the thousands of disputed property owners. It’s an arbitrary move and will see an early death in the court,” Roy claimed.

According to the KMC Act 1980, any decision to waive property tax for a full year needs the approval of the governor, which might put the entire initiative in jeopardy.

Questions have also been raised by the CPI(M) against the KMC move.

“To paint a two-storied house you need at least one lakh rupees, while you can avail only say `2,000 as waiver, which is your annual property tax. It’s not a buying proposition for the middle-class residents of Kolkata,” CPI(M) leader Rupa Bagchi argued.

Since coming to power, chief minister Mamata Banerjee had evinced interest in a theme colour for Kolkata and had zeroed in on the combination of white and sky blue.

Not wanting to be left behind, the KMC too had started painting all public places, including civic offices, bridges, flyovers, guard railings and road dividers, in the adopted colour combination.

Civic body offers amnesty to property tax defaulters

Add comment   |  June 9, 2014

KOLHAPUR: The financially strained Kolhapur Municipal Corporation (KMC) has introduced an amnesty scheme to woo property tax defaulters to pay the tax evaded in the last two years.

Defaulters can now avail a concession of around 6% if they pay all their dues before June 30. As per the civic administration, the total pending amount is around Rs 13 crore. The scheme was implemented at a special camp organized by the property tax department on Saturday.

Dilip Koli, head of the KMC’s property tax department said, “The revenue generated through the property tax department is the major source of income for the civic body. However, some citizens are reluctant to pay taxes on time, which affects infrastructure projects which we undertake. The scheme will help defaulters come forward to pay the tax, though it means revenue loss for us.”

The KMC will face a revenue loss of around Rs 78 lakh if all defaulters pay the tax. The civic body, however, hopes that the scheme will add a significant amount to its coffers within a month.

At present, there are around 1.34 lakh properties across the city, of which around 30,000 owners do not pay taxes every year. The tax is collected from all property owners of residential and commercial plots as well as other types of properties held either privately or by the government (state or central), within KMC limits.

“We submitted a proposal to impose heavy fines on defaulters. The plan involved imposition of 2% fines on tax defaulters on a monthly basis. But the proposal was rejected by the corporators in the general body meeting held last month. We will again table the same proposal as per the state government guidelines as the proposal was drafted after it issued a notification in 2010 for change in tax rules,” Koli said.

The civic administration is also in process of including new properties under the ambit of the tax. It has received applications from around 12 new properties. The civic officials claim that there are around 10,000 new properties across the city, which are not under the ambit of the tax. Bringing these under the tax regime, will generate better revenue.

Source: TNN

Crisil enters into Rajkot’ real estate sector

Add comment   |  June 7, 2014

RAJKOT: Credit rating firm Crisil has entered into Rajkot’s real estate sector and rated one real project in the city with giving 5 stars. Crisil has rated real estate projects across various cities in India including Bengaluru, Chennai, Coimbatore, Hyderabad, Kochi, Kolkata, Mumbai, Pune, Trivandrum, and Visakhapatnam. In Gujarat, it rates real estate projects in Ahmedabad and Baroda.

Patria, a residential real estate project, coming up in city’s prime location known as ‘Govindbhai ni Vadi’ near airport, has been rated with 5 stars by Crisil.

“We have hired the Crisil for the assessment and this is the first time in the real estate sector the Saurashtra where any project went to rating. It might inspire others to go for real estate rating for their projects” said Mihir Maniar, one of the developers of Patria.

Patria is highly luxurious apartments of 2 and 3 BHK project. Maniar said that the project will complete within the next six months.

“Crisil real estate star ratings provide city specific all-round assessment of real estate projects and help buyers benchmark and identify quality projects within their city. We are also in touch with other new projects in Rajkot for their real estate ratings” said Dnyanesh Nandurkar, regional head, real estate ratings, Crisil ratings.

“Real estate star ratings provide a comprehensive, independent assessment of real estate projects in the city. It improves transparency and objective benchmarking of projects,” he added.

Source: TOI

New Telangana government promises support to real estate sector

Add comment   |  June 2, 2014

At the stroke of midnight on June 2, 2014, India’s youngest state Telangana was born. The Telangana Rashtra Samithi (TRS), which spearheaded the movement for a separate state formed the first government in Telangana and has painted Hyderabad pink – the colour of its flag.

Telangana will comprise of 10 districts with Hyderabad as the common capital for the next 10 years.

For some time now the real estate scenario in Telangana saw a decline after the bifurcation of Andhra Pradesh state and the subsequent instability. However with the formal creation of the new state, this situation is expected to change soon. The TRS has embarked on a special confidence building exercise with the various representatives of industries, promising a friendly, growth focused government with a congenial environment for rapid development.

The TRS leader K.T. Rama Rao also attended a meeting by the recently formed Telangana Builders Federation where the builders sought a congenial environment for the building industry besides availability of raw materials and hassle free clearances among others.

At this meeting Mr. Rama Rao personally assured property developers that the Telangana government will bring back the old status of Hyderabad real estate, further stressing that his government will strive to assist the builders in every way possible. Assuring all support to the real estate industry, Mr. Rao further added that this fraternity would be involved in the process of decision making pertaining to the sector.

According to a recent newspaper, party chief and chief minister K. Chandrasekhar Rao appeared positive about the real estate scenario in the newly formed state. He predicted that the city’s realty was poised for positive growth. According to him, the right time to buy property is within the next three months or so, before the prices start to move upwards.

Industry insiders believe that this recent meeting between the TRS leader and the Telangana Builders Federation will help increase optimism about the real estate sector in Telangana.

Mr. C. Prabhakara Rao, President, Telangana Builders Federation believes that once the new government settles within six months, the positive momentum will start building up. For investors and buyers looking to purchase property in the newly formed state – the time is ripe with ample opportunities. While realtors expect a boom in Seemandhra, once the capital city is decided, prices in Guntur and Vijayawada will also see an increase.

With increased political stability in the newly formed state, construction activity that had taken a hit is set to pick up and witness steady, healthy growth over the next one year.

Gujarat model shows way – Vertical growth plan for land losers

Add comment   |  June 2, 2014

Bhubaneswar, June 1: The Bhubaneswar Development Authority has decided to issue transferable development rights (TDR) in order to acquire land for development work, such as construction of roads, drains and renovation of drainage channels.

TDR is a certificate given to a person who loses a portion of his land to the development projects. The certificate is issued as per the market value of the particular land in the urban area. If the person develops a building in the remaining land, he will be allowed construct a house with more height in lieu of his TDR value.

TDR can be encashed if the owner sells the document to another person or a real-estate promoter developing a property in the city. While the TDR owner can get his value from the builder, by accepting the certificate a real-estate developer can get benefit in having more floor area ratio (FAR) or height of the building with respect to the road width available nearby.

BDA vice-chairman Krishan Kumar said: “During renovation of the drainage channels, we have noticed that work is not progressing as the channels are passing through private plots.”

“While on one hand the landowners are demanding residential or commercial rates in exchange of the land near the channels, it is impossible to provide them the rate as technically no one can get building plan approval to construct a structure over a channel,’’ he said.

To help the landowners and ensure quick development work, the BDA has now decided to issue TDR so that the landowners can use the certificates while developing their other portion of land at the same locality or at any other locality and if needed, sell it to a builder in exchange of money. An official in BDA’s planning wing added that land owners losing their land to other development activities such as laying of master plan roads within the comprehensive development plan (CDP) area around the city can also avail the benefits of TDR.

National council member of Indian Institute of Architect (IIA) Akshaya Kumar Beuria said: “The TDR is a good concept and it has started delivering results in states such as Gujarat and Andhra Pradesh, but if it will be used for acquiring land for development activities then it may be more useful for persons with a bigger plot or more than one plots and builders. It may create problem for owners of single and small plots.’’

“If a person has ownership of more than one plots, then TDR issued against one plot can be used for the development of the other, but if he/she has only one plot then it may create problem for him to use it as depending on the real-estate market is risky,’’ said N.K. Patnaik, a city resident and land owner.

Land acquisition in several places has resulted in controversies as the original landowners are facing difficulties in getting their dues due to alleged wrongdoings of revenue officials.

“I hope that the TDR will give a new dimension to land availability for development. But if a person is having a single plot of land and it is completely lost due to development work, then there should be proper mechanism to compensate them with another land,’’ said real-estate developer

Source: The Telegraph by BIBHUTI BARIK

Crime Branch plea to confiscate Ashore property

Add comment   |  May 21, 2014

BHUBANESWAR: The Economic Offence Wing (EOW) of Crime Branch (CB) on Tuesday proposed the finance department to confiscate property of Ashore Group, accused of cheating depositors of more than Rs 25 crore in Odisha.

The EOW submitted a seizure list to the finance department, seeking confiscation of the company’s 28 acre and Rs 85 lakh. “The lands are located in Mayurbhanj and Balasore districts. The market value would be not less than Rs 5 crore,” said ADG (CB) B K Sharma.

The dubious money circulation company came under police scanner in 2012. On August 2, 2012, the EOW swooped on offices of Ashore Group in Bhubaneswar and Balasore. Four senior functionaries of the company, including its CMD, were arrested. Sources said the firm was into illegal money circulation to the tune of Rs 3 crore a month.

The EOW sources said the company was set up on November 18, 2010. The company allegedly collected crores of rupees from gullible investors, promising them to double their money in quick time.

The company had forayed into pharmaceutical business in Balasore, CB sources said. However, the company’s website described it was dealing with life insurance, general insurance, loans and deposits, equity trading and land-related products.

The CB and Odisha police have so far sought confiscation of assets of 11 controversial companies in Odisha under the newly-enacted Odisha Protection of Interests of Depositors in (Financial Establishment) Act. Earlier CB had moved the finance department with proposals to confiscate assets of Seashore Group, Saradha Group, Astha, Green Ray, Sastra, Safex and Flourish India. Property attachment process of Artha Tatwa Group by commissionerate of police also started a few weeks ago.

The CB and different district police stations froze nearly Rs 127 crore bank accounts of chit fund companies between 2012 and July 2013. Besides, more than Rs 86 lakh, 203.8-kg silver and over 1.5 kg gold were seized from different companies during raids.

Source: TOI

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