Latest Property News on 'Real Estate Developers'

Six loopholes in Realty Bill

On Wednesday, January 11, the Ministry of Housing and Urban Poverty Alleviation invited comments on the draft Real Estate Regulation Bill (RERB). In Maharashtra, the state government has released a draft version of its own real estate regulation Bill, the very first state government to take the step.

In this backdrop, it would be instructive to take a look at the draft legislation once again. There are some loopholes in the legislation that need to be examined thoroughly so that the interest of the buyer is protected.

SIX AREAS OF CONCERN

A lot has been said and written about the provisions of the Bill and its benefits. Even as the intent of the Bill is laudable, there remain some concerns arising out of its provisions that need to be examined in detail.

Plot Size: The provision of minimum plot size could potentially create problems. The proposed minimum of 4,000 square metres to be covered under the legislation leaves out a substantial portion of the market unregulated. Let us look at three examples of how this can be circumvented:

Case 1: Developer “A” has, say 3,800 sq mt (40,888 sq ft) plot to develop. He can carry out everything as he likes as he is out of the purview of this regulation. Most standalone projects, and most of the redevelopment projects are under this segment and also the subsequent litigations. This could also lead to unauthorised development in tier-II and tier -III cities and towns where local forces may prevail more than laws.

Case 2: Developer “B” has plot larger than 4,000 sq mt, say, 7,500 sq mts. He may divide the plot into two and propose two separate projects say, 3,800 sq mt and 3,700 sq mt. As per the Bill, each project needs separate registration if the area crosses the threshold. But in this case he develops the land smaller than that size as one project, and is out of regulatory ambit. This can happen with still larger plots if division is allowed or managed as per local regulations.

Case 3: Developer “C” has the same size of land. This fly-by-night operator does not want to wait for two projects to be done one after the other or cannot afford the cost of waiting. He may be able to sell the part of it-on paper, of course. So, he creates another entity and then selsl/transfers/gifts the other half of the plot. Now both the projects can be carried out simultaneously with different names of the company and yet without adhering to the conditions of the regulation. There are no specific provisions or restrictions in this regard. Besides, many builders operate under more than one name for different projects. There are many projects, which are carried out under joint-venture agreement. These possibilities must be considered specifically.

Delay: The Bill makes it mandatory for each developer who registers with it to declare the time frame of the project. Regulation does not insist or compel anyone to declare a particular time frame, the freedom rests with the developer who has to adhere to it throughout the construction process till it is completed.

So, we assume that the developer must have calculated all the factors — raw materials, labour, approvals etc. If he thinks he can finish the project in three years he may very well declare four to be on the safer side. But then the Bill also provides for an extension of 1-2 years. This should not be open to all and should be on case-to-case basis especially during circumstances beyond control as the regulator may feel fit. If the extension is allowed to all, there would be no point in declaring the time-frame. Projects will be delayed officially, with permission from the Regulatory Authority.

Conveyance: This is a very important legal status, which every housing society must have. Most of the societies in Mumbai do not have conveyance despite laws mandating it. There are several court cases on this issue. After giving possession with garden and open spaces to the society, the developer delays conveyance.

Later, he begins construction on the open spaces or garden claiming it to be his land as it is not conveyed to the society. Residents are just owners of the flat and the society has only the building under its control is the usual ploy. There are laws that the conveyance must be done within a stipulated period once the society is formed but like many other rules, this time-frame is mostly neglected and then misused. The proposed Bill should reaffirm or establish a new time-frame within which the conveyance must be done by the developer.

Area Measurment: The proposed Bill is not specific about the space measurement requirement. Most developers mention carpet area in the agreement of sale but in reality make the buyer pay enormous amounts for the super built-up or saleable area. Developers include staircases, dry areas, open areas, flower beds, common areas – areas that have not consumed Floor Space Index (FSI) – in the flat area and extort payments.

For example, a flat in an upcoming project on the out skirts of Pune mentioned around 700 sq ft carpet area in the agreement with the buyer, but actually demanded payment for 1,100 sq ft. The situation in Mumbai is particularly worse. Here a flat of 650 sq ft carpet area was sold on payment for twice the area.

The proposed Bill expects every developer to declare the carpet area of the flat but does not specifically restrict them from adding up other areas into it. The developer has already charged a high rate for those extra amenities and common facilities. Therefore, charging for them in the form of additional area should be stopped on an all India level.

Payment Schedule: The major reason for the helplessness of the flat buyer in case of delay in possession is that the developer drafts the agreement in a manner that he takes away almost 80-90 per cent of the payment on completion of the skeleton of the structure. This is the stage, where many developers are allegedly diverting the funds keeping the home buyers in lurch. No fund, no work, no possession. The customer is very vulnerable as he cannot withdraw, he cannot move court. He is at the mercy of the developer. The Bill should consider this aspect and regulate the demand schedule as well. For example, at the last stages of the construction, a developer can demand payment of 15 per cent of the cost on receiving Occupation Certificate (OC) and the last 15 per cent of the amount on possession.

One Agreement: The Bill makes it compulsory for the developer to deposit 70 per cent of the funds collected from the buyers of the particular project in an escrow account so that the funds can be used to for the project in question. There is a potential loophole here. Some developers may begin making two agreements with the buyer, one for the flat and another for the amenities. Indeed, the practice already exists to save stamp duty and other taxes. Now, this will be used to split cash flow. As per the Bill, only sale agreement is a must for all declaration. The Bill must ensure that only one agreement is made for the entire transaction along with amenities etc.

INDUSTRY VIEW

Anuj Puri, chairman & country head, Jones Lang LaSalle India lists three lacunae. First, unless further safeguards are in place, the mandatory registration and licensing of projects may increase the scope for corruption. Second, it is also not certain how a central regulatory body will address land acquisition at the state level, with different laws in different states. Third, streamlining of approval procedures into a single window system is necessary for they are burdened with NOCs from multiple departments at the state and central levels. Lalit Kumar Jain, national president, CREDAI said, “The regulator should look into delays that are not in the hands of the developer and should have control over all stake holders including approval authorities, and financial institutions. We do not want licence Raj.”

The proposed legislation makes it mandatory for all state governments to set up a Real Estate Regulatory Authority in every state but difference in state laws will create variations in enforcement of the proposed law. Only pro-active state governments can remedy the situation. All eyes are on Maharashtra now.

Source: http://www.financialexpress.com/news/six-loopholes-in-realty-bill/899484/

Cash-rich realtors use correction to buy land

With depressed market and so many peers anxiously dumping lots to raise cash, they sense a great and rare opportunity.

While realty biggies are in a rush to sell their land parcels to reduce debt, a few cash-rich and low-debt property developers and companies sense an opportunity to seal big-ticket deals.

The Ajay Piramal Group and its partner, Sunteck Realty, the Ashok Piramal Group’s Peninsula Land and Oberoi Realty and the Wadhwa Group have become the most active buyers in the property market here, where big companies such as DLF and HDIL are selling realty assets.

Early this week, the Kamal Khetan-promoted Sunteck Realty bought a 15-acre industrial land parcel at Goregaon in Mumbai for Rs 400 crore. The Vikas Oberoi-led Oberoi Realty is in advanced talks with Om Metals to buy 850,000 sq ft of land in Bandra. It needs to pay Rs 75 crore and 50 per cent stake in the project to the seller. Oberoi Realty declined to comment on the deal.

In the upcoming property sales, the probable buyers are either develop-ers/corporates who have cash or those who can arrange it quickly, say property consultants.

Take the bidding for Hindustan Unilever Ltd’s (HUL) sea-facing property ‘Gulita’. The shortlisted candidates are billionaires Anil Ambani, Ajay Piramal and Gautam Adani, and realty developers Peninsula Land and Oberoi Realty. They have put in bids of Rs 400-450 crore each. While Ambani and Adani are looking at the property for self use, other players plan to develop it either as luxury residential apartments or a hotel.

Consultants say even on the land sale by DLF in the Worli area of Mumbai, where it expects to garner Rs 3,000 crore, only a few developers with cash on the books or a consortium backed by PE firms are expected to participate due to the high price.

“During the NTC or other auctions in the past, there used to be a rush of developers. In current land sales, the number of bidders is far lower and the profile is also different. Only financially sound developers are participating in the auctions now,” said Sanjay Dutt, chief executive of property consultant Jones Lang LaSalle (JLL), which is doing such asset sales.

Adds Niranjan Hiranandani, managing director of Hiranandani Constructions, “Obviously, people with cash are buying land parcels as banks are not lending to buy land. Usually, there are no buyers in a down market, but the presence of new players is a good sign for the market.”

In 2005, when NTC (National Textile Corporation) auctioned its 17-acre Mumbai Textile Mill land, a dozen city-based property developers were in the final round of bidding and finally, the plot went to DLF for Rs 702 crore. A few months ago, Jupiter Mills was taken by Indiabulls Property for Rs 276 crore amidst fierce bidding by other property developers.

Property consultants point out the active buyers now, such as Oberoi Realty and Peninsula Land, remained largely conservative during the property boom of 2005-08, when most companies such as DLF and HDIL bought land aggressively and piled huge debt on their books. The latest land-buying spree has been timed with the downturn in the property market. For example, Oberoi Realty, the only zero-debt company in the listed realty pack, which has Rs 1,190 crore cash on its books, is “well poised to deploy cash”, say analysts. Oberoi Realty bought back a 50 per cent stake from ICICI Venture in the GSK, Worli, project for around Rs 300 crore in the third quarter of this financial year.

“I am in this business to create value and we will do good acquisitions,” the 42-year old Vikas Oberoi had said in a recent interview with Business Standard.

With Rs 10,000 crore cash after the famous Abbott deal, the Ajay Piramal Group is “aggressively scouting for good opportunities in real estate”, says a property consultant who works with the group.

“Piramal’s idea is to create one of the foremost real estate companies in the country and build great realty projects,” he says. An email sent to the group did not elicit any response.

In June last year, Piramal Realty, part of the group, bought a land parcel in Byculla from Mafatlal Industries for Rs 605 crore, making its entry into Mumbai real estate.

Ashok Piramal group’s Peninsula Land spent nearly Rs 2,000 crore in the last two years to buy land in Mumbai, Bangalore and Hyderabad. Last October, the company bought Bishopgate, the property co-owned by Standard Chartered Bank and HSBC, for Rs 272 crore, outbidding four others such as Mahindra Lifespaces, Wadhwa group and others. Last month, Peninsula announced a JV with Brookfield Asset Management to float a real estate fund.

“We are buying land at reasonable prices. We feel this is the right time to buy properties,” said Rajesh Jaggi, managing director of Peninsula Land.

Agrees Dutt of JLL. “Land valuations have started to make sense. Barring a few, most deals are manageable,” he says.

Pranay Vakil, chairman of global property consultant Knight Frank, believes the clarity on development is also drawing serious players.

“In the NTC auction, developers thought they could buck the rules and develop more but that did not happen. With the new development control rules, buyers know how much they can exploit and price their bids accordingly,” says Vakil.

Source: Business Standard

House that: 30-storey building built in 15 days -Hotel Constructed In China By 200 Workers In 360 Hrs, Reducing Waste Of Material & Energy

House that: 30-storey building built in 15 days -Hotel Constructed In China By 200 Workers In 360 Hrs, Reducing Waste Of Material & Energy

Beijing: The Chinese tycoon behind a 30-storey energysaving building that went up in just 15 days said on Wednesday he intends to duplicate the model across the vast and heavily polluted nation.

The prefabricated building, the five-star T30 Hotel at Dongting lake, Hunan province, that opens on January 18, became an internet sensation after time-lapse video posted online showed it being constructed by 200 builders in just 360 hours (http:// www.youtube.com/

watch?v=Hdpf-MQM9vY).

Zhang Yue, the billionaire chief executive of the Broad Group air conditioning company, said the speed with which his buildings go up reduces waste of materials and energy. He said the buildings, which feature quadrupleglazed windows and only use energy-saving lighting, would become his biggest business in 2013.

“We need to speed up our environmental thinking. We need buildings like this all over China,” Zhang said of the pre-fabs, which he claims are six times greener than most European buildings.

“In 2013 we will build 20 buildings a month and by 2014, we’ll be up to 50 buildings a month. And that’s just from one factory,” he said.

“China is 20-40 times more polluted than Europe and that’s hurting our health and will offset the economic benefits of our growth,” added Zhang, who won a UN Environment Programme ‘Champions of the Earth’ award last year.

Zhang founded Broad in 1988 with his brother, Zhang Jian. Together they revived an old energy-saving technology for non-electric air conditioning, which they have now sold in 75 countries.

The hotel’s prefabricated parts were made at a factory owned by the Broad Group in Hunan that employs 10,000 people, using steel, glass and insulation sourced inside China, Zhang said. The group has three such factories in China, and plans to expand to 40 to promote its patented sustainable building model at home and abroad. AFP

Source: Beijing: The Chinese tycoon behind a 30-storey energysaving building that went up in just 15 days said on Wednesday he intends to duplicate the model across the vast and heavily polluted nation.

Real estate firms drop overseas plans, to stay grounded in India

Real estate companies, which started venturing overseas around 2006-07, are reviewing their global plans.

With the slump in international realty markets, many domestic companies are either withdrawing from weak markets or putting their global plans on hold.

Raheja Developers, for instance, has shelved plans to enter markets such as Mauritius and Colombo. Hiranandani Group, which has a major presence in Dubai, has changed its strategy. It’s stopped launching new projects, and is focusing on completing existing projects for other developers on a contractual basis. Omaxe has already exited Dubai.

Darshan Hiranandani, director and chief executive officer, Hircon International, a joint venture between the Hiranandani group and ETA Star, told Business Standard the company was not launching any new project in Dubai due to the slump. “Our strategy is to complete the incomplete projects for other developers on a contractual basis.”

According to him, 23 Marina in Dubai, which was recently completed, has been sold out. However, the launch of Business Bay, which the company says ‘coming soon’ on its website, will not be for sometime. He was optimistic the market would recover soon.

But Nayan Raheja, director, Raheja Developers, is not so hopeful about prospects of the international market. The Dubai market would not recover, at least in the next five years, he said. “Nobody should be looking at the Dubai market as of today,” said Raheja.

Raheja Developers, which was evaluating opportunities to enter Mauritius and Colombo, is giving it a miss in the wake of the global economic and realty gloom. “There is negative sentiment internationally. At this point, we are not even considering venturing out,” Raheja said.

Tata Housing is one of the few companies looking overseas at this point. After establishing itself in the Maldives, the company is looking at Colombo in Sri Lanka.

Its managing director and chief executive, Brotin Banerjee, said, “We are confident of finalising a few projects in Sri Lanka this financial year — Colombo will be one of the locations. All these international projects are being planned through separate special purpose vehicles formed for each country or project.”

Banerjee told Business Standard the company was in the final stages of due diligence for two mixed-use development projects of two million square feet each in Colombo. Of this, one could be affordable housing. “With peace returning to the island nation, real estate will be a big growth story there,” Banerjee said.

Tata Housing has earmarked Rs 1,000 crore for various ventures in 2011-12. “We work on a multi-city strategy and projects targeting all customer segments and hence, a slowdown in some geographies or customer segments does not adversely impact us,” said Banerjee.

Omaxe Group entered Dubai in 2007, with a goal of expanding in West Asia. But after investing Rs 50 crore (the first instalment of a Rs 1,600-crore project) through a joint venture with Dubai World’s property developer, Nakheel, Omaxe withdrew from the market due to a near lull. “We got the investment back, as Nakheel put the projects on hold indefinitely,” said Rohtas Goel, chairman and managing director, Omaxe. And now, the company has no plan of expanding outside India.

According to Sunil Dahiya, managing director of Vigneshswara Developers and vice-president of the National Real Estate Development Council, it is not just real estate developers, but also construction companies, which are withdrawing from the Gulf.

“Indian companies in West Asia, especially into construction projects, are experiencing a near lull, as no major work is happening there. The contractors are not being paid,” he said. At least 10 to 15 construction companies present in the Gulf are suffering from the slump.

Real estate consulting firm Cushman & Wakefield’s chief executive for Asia Pacific, Sanjay Verma, said, “For those over expanded, it would be a sensible move to focus on their core strength at this point.”

Source: http://business-standard.com/india/news/real-estate-firms-drop-overseas-plans-to-stay-grounded-in-india/461214/

Brigade Enterprises to launch 25 mega projects

Bengaluru-based Brigade Enterprises is all set to launch about 25 new projects this year developing a total area of 20-25 million square feet. The new projects will be about 70 per cent residential, while remaining 30 per cent will be a mix of commercial office space, retail and hospitality. About 20 projects will come up in Karnataka including Bengaluru and Mysore, while remaining five will be launched in Chennai, Hyderabad and Cochin. The overall cost of these 25 projects will be upwards of Rs 5,000 crore to be spread over five years’ time.

Speaking to Realty Plus about the company’s growth plans, M R Jaishankar, CMD, Brigade Enterprises, says, “Currently, we have 30 million sq ft of new projects in handout of which five million sq ft has already been launched in the last three months. We hope to launch the remaining 20-25 million sq ft this year which will comprise about 25 new projects. These will be launched at regular intervals over the years.”

“The project’s overall investment will be upwards of Rs 5,000 crore which will be spread over a period of five years. The funds will be generated through institutional funding, customer advances, internal accruals and from monetisation of commercial buildings that we have. Also when the stock markets look better, we will look at the primary and secondary market but not as of now,” he adds. Most of the Groups under construction projects are now complete and all the financial commitments for their existing projects have also been met.

Talking about the real estate industry in 2012, Jaishankar feels, “For 2012,the feeling is that the market has inherent strength but due to external factors including global, national and to some extent state-specific, there is a cause for concern. We are hoping that things will start improving by the middle of 2012 particularly after the political situation settles down post state elections and the new budget.” The Group’s turnover for last fiscal (2012-2011) was Rs 530 crore and “we are expecting a growth of 20-25 per cent this fiscal (2011-2012),” he further adds.

Taj Set To Offer Brand Between Gateway & Ginger

The Indian Hotels-owned Taj Group has planned to announce a new brand, to add to its current bouquet. While the name is under wraps, it is likely to be a category between their Gateway and Ginger ones.

Ginger is the budget hotel grouping, with daily room rates up to Rs 2,500. Gateway is a notch above, with rates between Rs 5,000 and Rs 7,000. Taj has opted for a gradation strategy in recent years. Vivanta was the last such branding exercise. Meant for the work-hard and play-hard variety, it was supposed to follow the launch of Gateway hotels in 2008, but got delayed to 2010, first because of the economic slowdown and then the November 2008 terrorist attack.

Internationally, hospitality chains, to tap into the various segments from luxury to premium to budget, offer a variety of hotels.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=18087&cat_id=1

SC Admits Sahara Plea Against SAT order

The Supreme Court has admitted a plea filed by the Sahara group against an order issued by the Securities Appellate Tribunal (SAT) last October directing the real estate to financial services group to refund around Rs 17,400 crore to its investors. The apex court said the stay on the SAT order will continue till further directions. On October 18 last year, the SAT had ordered two unlisted Sahara group companies – Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation Ltd) and Sahara Housing Investment Corporation, to refund within six weeks, the money they had raised through a controversial flotation of optionally fully convertible debentures (OFCDs) three years ago.

“Both the appeals are dismissed…The appellants in both the appeals shall now repay within six weeks from today the amount collected from investors on the terms as set out by the whole-time member (of Sebi) in the impugned order,” SAT had said in its order. Earlier, on June June 23, the market regulator Securities and Exchange Board of India had directed the two Sahara group companies and its promoter and directors to refund the money collected through OFCDs along with interest of 15 per cent to be calculated for the period from the date of receipt of the money till the date of repayment. It charged the two Sahara firms with violating regulatory norms.

The Sahara group firms had challenged the Sebi order before SAT. They have consistently maintained that Sebi has no jurisdiction over them as they are unlisted companies and report only to the ministry of corporate affairs. While dismissing the appeal filed by the Sahara Group companies, SAT held that the market regulator had jurisdiction over such fund-raising schemes. “We may mention that in view of our findings that OFCDs issued by the company are securities and that the issue was a public issue requiring mandatory listing and that SEBI has the jurisdiction under the SEBI Act to deal with all kinds of securities and companies, whether listed or not…” the SAT order had said.

Source:http://www.telegraphindia.com/1120109/jsp/frontpage/story_14983067.jsp

Jittery investors selling flats below market rate

Investors who spoiled the real estate market for the buyer by blindly buying new homes are now spoiling the builder’s prospects by selling apartments at values lower than what the builder is selling them for. If you are a buyer, look out for the investor, who is desperate to get out of a sluggish market. Manisha had been looking for an apartment in Noida for almost a year and was worried about the pace at which developers were raising property prices. She had also read about the stress real estate developers have been under for the last few quarters.

So, when a broker told her about an apartment on resale in Noida, which came at a 30% discount from what the developer, 3C, was offering for a similar flat in the same project, she jumped at it. The investor who was selling had bought the flat in 3C’s Lotus Panache in 2010 at a significantly lower price of around Rs 3,000 per sq ft. Manisha got it for Rs 4,300 per sq ft, while the basic selling price offered by the developer is Rs 5,500 per sq ft. In a market full of uncertainties, both investors and buyers are jittery. “The apartment complex is already half way through and the risk is lower for us,” says Manisha, who will now get the flat in two years compared to at least 3-4 years if she had bought it from the primary market.

“Buyers today are concerned about delivery timelines and of course high prices,” says Sumit Joshi, director of Noida-based Real Credit Consultancy. The steep hike in home loan rates in the last one-year hasn’t helped either. The concerns of buyers are not unfounded. The debt level of real estate companies has risen considerably in the last few years and input costs have gone up. Delivery timelines for a number of projects have been pushed back because developers are finding it difficult to fund projects. According to property research firm PropEquity, nearly half of the 930,000 under-construction residential units in the country, scheduled for delivery between 2011 and 2013, are likely to be delayed by up to 18 months. In recent months, secondary market property sales have been higher than primary sales by developers.

“This is especially true for projects where a considerable portion of construction work is already complete,” says Prashant Kaura, director, GenReal Property Advisers. There has been a rise in secondary sales because many investors are looking at cashing out of projects. The reasons for wanting to exit might differ- while some are facing a cash crunch themselves, others are unsure about the developer they are invested with. Some others want to exit to invest in other projects. “Some investors had gone overboard in 2009-10 and had bought multiple apartments. They have paid over 50% of the price but some of them are now are feeling the pinch,” says Abhay Khemka of Khemka Investments and Properties in Gurgaon.

A Mumbai-based wealth manager with a multinational bank had bought an apartment in Unitech’s Vistas project in late 2009 for around Rs 3,000 per sq ft. This was around the time real estate prices were looking up and jobs were secure. She is looking at exiting the project now and is getting offers for a price of around Rs 4,500 per sq ft, while the developer is selling atRs 5,600 per sq ft.

Source:http://economictimes.indiatimes.com/markets/real-estate/realty-trends/jittery-investors-selling-flats-below-market-rate/articleshow/11275674.cms?curpg=2

Green buildings not an in-thing

Despite government incentives, concept of green buildings has failed to catch the fancy of real estate developers here. This is much in contrast to booming real estate markets like Gurgaon (Haryana), Mumbai, Bangalore and Hyderabad where “green” is the in-thing. Section 33 (7) of the Bhubaneswar Development Authority (Planning and Standards) Regulation 2008 gives concession to platinum or gold certified green buildings. The BDA may refund fee proportionate to 0.10 premium floor area ratio to the developer of such buildings as per the regulation. “I don’t think any developer has sought approval for a green building in city so far though there is an incentive. It is yet to catch their attention here,” said Deoranjan Kumar Singh, vice-chairman of BDA.

Indian Green Building Council (IGBC) and The Green Rating for Integrated Habitat Assessment (GRIHA) of The Energy and Resource Institute (TERI) certify buildings on green quotient. The buildings are certified platinum, gold and silver for leadership in energy and environmental design. IGBC, which started green building movement in the country in 2001, defines green building is one which uses less water, optimises energy efficiency, conserves natural resources, generates less wastes and provides healthier spaces for occupants as compared to a conventional building.

Green buildings use non-conventional sources of energy such as wind, water, solar heat against non-renewable fuels like coal and crude oil. Besides, designs are made for minimum energy consumption by way of natural lighting and ventilation. Builders say it is a comparatively new concept and will take time to break ground. “It is relatively a new concept. But we have already started exploring the possibility of going green,” said D S Tripathy, president of Confederation of Real Estate Developers Association of India (Credai), Odisha chapter. Credai in association with TERI at the national level has taken up an initiative to create awareness among its members about the concept, Tripathy said.

The developers said more incentives should be given to developers for constructing green buildings. The small percentage of fee refund is too less compared to the input cost for a green structure. “The government should work out lucrative incentives to encourage green building concept,” said Pradipta Kumar Biswasray, president of Real Estate Developers Association of Orissa (Reda). Biswasray said alluring government sops for green projects in Haryana may be a reason why scores of such constructions have come up in Gurgaon. ITC, Wipro technologies and HSBC House in Gurgaon have platinum rating.

The only green initiative so far in Odisha is that new government buildings and institutions have to adhere to energy conservation building code (ECBC) of the energy department. “In public private partnership projects, BDA is also asking its partners to adhere to ECBC,” said Prashant Patnaik, planning member of BDA. However, more incentives should be given for eco-friendly sustainable projects, which do minimum harm to the nature and consume less energy, emits less waste, Patnaik said. According to UNEP figures, the buildings sector accounts for one-third of energy related carbon dioxide emissions worldwide. Nearly 60 per cent of world’s electricity is consumed in residential and commercial buildings.

Source:http://articles.timesofindia.indiatimes.com/2011-12-25/bhubaneswar/30556145_1_green-buildings-conservation-building-integrated-habitat-assessment

Amrapali in funding talks with PE firms

Realty firm Amrapali Group is in the process of raising about Rs 220 crore from private equity (PE) firms to fund the construction of two of its large residential projects in Noida. The Noida-based developer is raising Rs 100 crore from IL&FS Investment Managers Ltd for its 20-acre Princely Estate mid-segment apartment project. From JPMorgan Chase & Co, it is raising about Rs 120 crore for its 60-acre Silicon Valley project.

JPMorgan had invested Rs 75 crore in the firm’s Zodiac project in Noida in 2010, reports Mint. “Bank lending is a little difficult and time-consuming if you want a higher sum of capital, and then we have to look at alternative sources such as PE funds,” said Anil Sharma, chairman and managing director, Amrapali Group. “A single bank won’t lend a large sum and arranging a consortium of banks takes time.”

Sharma said Amrapali is raising money primarily to complete the two Noida projects in time; the projects are due for delivery to buyers in 2013. “If you want to target completion on time, particularly for large projects, you need strong financial backing,” he said.

Source: http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17752&cat_id=1