Latest Property News on 'Chennai'

Less Fireworks for Builders This Festive Season

The period around Diwali is usually the best time in the building trade, but this festive season a triple cocktail of volatile markets, double-digit interest rates and poor consumer confidence in a slowing economy has hit sales volumes, portending hard times for India’s real estate sector. Some brokers and market experts are bracing themselves for a 25-30% drop in transaction volumes in the country’s top six property markets during the October-December busy season, which, if it happens, could trigger a competitive spiral of discounting to get rid of mounting inventories and restore depleted cash levels.

But builders are holding on to price levels while buyers, reluctant to book flats at current price levels and interest rates firmly in double digits, remain convinced that it’s only a matter of time before the penny drops. Which side will blink first is still not certain, even though some builders concede all is not hunky dory. “There may not be much of a light for developers during this Diwali,” said Niranjan Hiranandani, chief of Mumbai-based builder Hiranandani Group. “It may not turn out to be a good one in terms of sales activity.”

Property developers are trying their best to woo buyers with festive offers, although these have failed to have much of an impact so far. With high inflation eating away at their earnings and financing costs high, buyers are looking for a significant correction in property prices rather than some festive season freebies. “Builders need to accept reality. This acceptance will lead to price correction and revival in volume,” said Pankaj Kapoor, managing director of Liases Foras Real Estate Rating & Research. Kapoor attributes the drop in sales volumes to steep property prices, rising interest rates and poor supply of socalled ‘affordable housing’ projects.

“Usually, during the festive season, prices firm up and there are new launches as well. But this season, both the inventory and prices of residential properties have remained static,” said Samarjit Singh of Agni Property, a property brokerage. The National Capital Region (NCR) comprising the satellite towns of Noida, Gurgaon and Faridabad bordering Delhi, which turned in good sales numbers in the past two years, is facing supply constraints.

This is particularly true for Noida, which has seen a slew of regulatory actions prompted by farmers’ agitation over land acquisition. Singh says a lot of developers are repackaging their previously unsold inventory with special discounts to push sales. Lodha Developers in Mumbai and Ansal API in Delhi are among the builders who are repackaging their older inventories with newer discounts. “As far as sale of plotted land and mid-income housing is concerned, demand is intact in NCR and good sales traction is expected during this season,” said Anil Kumar, CEO of Ansal API. “However, sales may take a hit wherever there are issues of land title.”

Akshaya Developer Plans to Strengthen its Presence in South India

Real estate developer Akshaya has chartered out plans for the next five to 10 years with an aim to strengthen its presence in South India. The expansion plan is also part of the city-based firm’s foray into new verticals like developing commercial properties, Information Technology parks, health care and schools. “Next five years to 10 years we will be in these businesses — healthcare, commercial property, retail, schools.. it may be through township projects..” Akshaya Chairman and CEO T Chitty Babu told reporters here.

The company was engaged in developing various real estate projects for the last 16 years and predominantly focused on residential units. “We want to be in commercial projects, retail, healthcare and schools.. Last year, we touched Rs 200 crore this year we expect to reach Rs 350 crore.. We are aiming to reach Rs 1,000 crore by 2015..”, he said after unveiling the company’s new logo. Elaborating about the “rebranding exercise” for which the company has spent around Rs 10 crore, he said, “we have taken a conscious decision. Our earlier name (Akshaya Homes) was saying only about our residential properties, but with the new logo we will be doing other businesses also”.

The company’s future projects would be based on green building concepts, Babu said and added that CRISIL would rate their projects regularly. “Every six months they (CRISIL) will monitor the operations of Akshaya.”, he said. On their expansion plans, he said, “right now we are having projects across Tamil Nadu. In next three years you can definitely see us in other three States ie., Andhra Pradesh, Karnataka and Kerala”.

Shriram Properties Announces Residential Projects in Rajahmundry, Vijayawada

Shriram Properties is planning to take up housing projects in Rajahmundry and Vijayawada, according to M Murali, managing director.
He was addressing the press in Visakhapatnam on Thursday after participating in the “bhoomi puja” for the block two in the housing project of the group — Shriram Panorama Hills — at Endada. He said the projects in Rajahmundry and Vijayawada were still in the preliminary stage, and sites had to be acquired for them. “We are keen on taking up housing ventures in the two coastal towns and later in other towns of Andhra Pradesh as well,” he said.

He said the group was focussing on middle-class and upper middle-class housing ventures, but not on luxury housing for the affluent sections. “There is a huge housing scarcity and unmet demand in the country. It is estimated that there is a deficit of 20 million homes right now and it is bound to increase. Therefore, there is room for any number of developers,” he said.
Murali said Panorama Hills in Visakhapatnam was a mega housing project, taken up at a total cost of Rs 1,800 crore, to build 2,000 apartments and 220 villas. “We are completing it in phases and the whole project may be completed by 2014-15. We have already sold 430 units and 120 villas,” he said.

Asokan, executive director, Shriram Properties said the construction of block-4 was in the advanced stage and most of the apartments and villas were sold out. “We have performed bhoomi puja today for block-2 with four towers consisting of 680 apartments. They are affordably priced at Rs 2,350 per sq ft. The block has 17 floors, we have already sold 160 units in the block,” he said.
He added that a “unique, eco-sensitive design” had been developed for the block. It would be completed in roughly two years’ time.

Govt Ready with Final Draft of Real Estate Bill

The Centre is ready with the final draft of a real estate bill that makes it compulsory for developers to disclose key aspects like carpet area and layout and promises a safety net for prospective home buyers. If the Real Estate (regulation and development) Bill, 2011 is cleared, developers can even be jailed for up to three years for making false promises to customers, many of whom invest their life’s savings for a place they can call their own. The jail term could be in addition to a penalty of 10 per cent of the total project cost.

The proposed law envisages a real estate authority to regulate all developers and real estate agents. All developers will have to register with the authority, the first such body in the sector. The draft, which The Telegraph has accessed, has been sent to the law ministry. Once cleared by the ministry, it will be presented to the cabinet before it is tabled in Parliament. The proposed act says developers have to disclose the carpet area, layout plan of the proposed apartments, structural design and plans for other on-site development. Builders cannot change plans or insert charges after the sale agreement is in place.

The draft says developers will have to upload on the proposed authority’s website all certificates and details that can be accessed by any future customer. “The act will bring a sea change in access to information that buyers have at present. The regulatory authority’s website will act as an interface between buyers and developers,” said an official with the ministry of housing and urban poverty alleviation, the nodal ministry.
Developers cannot float fancy advertisements to attract buyers. If there is any deviation from the ad, the promoter has to compensate the buyers for any loss because of the false information. If a builder pulls out of a project, the money has to be returned with interest at not more than the prevailing market rate.

The bill also addresses the problem of disputed property. Since there have been cases where developers have used such property to build multi-storeyed apartments at attractive rates, the bill stipulates “full and true disclosure” of the nature of the title of the land to be developed. If the land is owned by any other party, the developer has to upload the agreement with that party. Under the draft law, developers cannot publish advertisements till projects are registered with the regulatory authority or force buyers to pay an advance without the sale agreement. If there are any “structural defects or deficiencies” in a building within “a year of allotment”, they will have to be “rectified by the promoter”.
The bill envisages an appellate tribunal, to be headed by a retired Supreme Court judge or a retired high court chief justice. The tribunal can start investigations on its own if it receives a complaint of violation.

Omaxe Shelves Plan to Develop 10 Lakh Affordable Houses at an Investment of Rs 80,000cr

Realty firm Omaxe has shelved its Rs 80,000 crore investment plan aimed at developing 10 lakh affordable houses across the country over a period of five years. “The project could not take off after the slowdown impacted all the developers in 2008. We tried to develop some houses at some locations… The project is shelved now,” said Rohtas Goel, chairman and MD, Omaxe. In May, 2008, the company had announced an elaborate plan to build 10 lakh affordable houses for low-income consumers across tier II and III cities, at a price ranging between Rs 3 lakh and Rs 15 lakh, over a period of five years. The National Capital-based developer had tied-up with farmers in Gujarat and Maharashtra to acquire land for developing the affordable houses, he added.

“However, it did not finally materialise,” Goel said. He, however, declined to divulge if the company had put in any money in initiating the project. The 2008-09 global financial crisis had hit the realty sector hard and the same is expected again under the current economic environment. Omaxe had formed a subsidiary, National Affordable Housing and Infrastructure Ltd (NAFHIL), for the low-cost housing project and had also initiated an international design competition, besides publishing advertisements. Later, the company divested 51 per cent stake in NAFHIL to a promoter group firm. The company had initiated dialogues with the state governments in Uttar Pradesh and Madhya Pradesh in February 2008, to implement the affordable housing project. It had also placed a concept plan for consideration before the Union State Minister for Urban Housing at that time.

Goel had said Omaxe would construct 800 million sq ft to develop 10 lakh housing units of size starting from 300 sq ft to up to 1,500 sq ft. About 20,000 acre of land would be required to develop the project. The company had planned to develop 5,000-10,000 housing units at every location over an area of about 100-200 acre. It had said it would sell these units through lottery system and would charge only Rs 100-150 per sq ft as profit. It had identified Indore as the first location for the proposed project with plans to develop 10,000 low-cost homes at a 200-acre township at an investment of about Rs 1,000 crore. It planned to offer the flats, sizes of which would have started from 350 sq ft, for Rs 4-10 lakh. Similar projects were also planned in other locations such as Raipur, Bhopal, Bareilly and Allahabad.

Sahara Prime City launches residential complex in Kochi

Sahara Prime City Ltd (SPCL), the real estate company of Sahara India Pariwar, has launched Phase II of its Sahara Grace brand of residential complex in Kochi. The launch of Phase II is an outcome of the success achieved by Phase I of Sahara Grace Kochi. In line with Sahara Grace at Gurgaon and Lucknow, the Sahara Grace at Kochi is the third project under this brand of premium luxury housing.

Spread over 14.72 acres of prime location on Seaport – Airport road at Kakkanad, Sahara Grace aims to provide an exquisite combination of aesthetics and functionality by offering a product mix of apartments and penthouses along with numerous value-added facilities as well as amenities to its residents. With a total built up area of approximately 19.72 lakh sq ft of residential area, the project comprises a mix of 2-4 bed room apartments, three & four bed room duplex apartments and penthouses.

The phase II of the project is three 24-storied towers having a total built up area of 5.18 lakh sq ft. As a safety measure for protection of life and property from earthquake, construction at Sahara Grace, Kochi is designed at 1 level higher than the applicable seismic zone according to the specifications of the Bureau of Indian Standards.

Strawood to Open 100 Hotels in India by 2015

Leading global hotels and leisure company Starwood Hotels and Resorts Worldwide is targeting a portfolio of 100 properties in the country by 2015. The company’s main focus will be on smaller cities for its business hotel brands, ‘Four Points’ and ‘Aloft’. “India has tremendous potential for growth and we have a very strong pipeline for all our brands. We are looking at expanding our ‘Four Points’ and ‘Aloft’ brands, targeted at business travellers mostly in tier-II and III cities,” Starwood Hotels & Resorts Worldwide managing director for India and regional vice-president (South Asia) Dilip Puri said.

The company is bullish about the country and expects India to become its third-largest market after the US and China by next year. “India is currently our fourth-largest market globally. However, looking at the accelerating growth rate, we expect the country to overtake Canada to become our third-largest market by next year,” Puri said. Starwood globally has nine brands, of which six are already in the country. The group has brands like Westin, Sheraton, Four Points by Sheraton, The Luxury Collection, W Hotels, St Regis, Le Meridien, Aloft and Element by Westin.

The group will be launching two more brands — W Hotels and St Regis — in the country by 2015. “We have already signed deals for developing three W Hotels and one of our premium brands, St Regis, which will be operational by 2015 in New Delhi,” Puri added.

APIIC-Emaar Probe: CBI Questions Chiranjeevi’s Son

The CBI, which is probing the alleged irregularities in APIIC-Emaar Properties land deal, on Thursday continued examination of buyers of the villas sold by Emaar and also questioned Telugu film actor Ramcharan Tej, son of actor-turned-politician Chiranjeevi.
The villas and plots in ‘Emaar Hills’ township project in Gachibowli were allegedly purchased by several people from the film industry, family members of politicians and businessmen. The CBI last week issued notices to over 80 persons in this regard. CBI, which is probing the alleged irregularities in APIIC-Emaar Properties land deal, on Thursday continued examination of buyers of the villas sold by Emaar and also questioned Telugu film actor Ramcharan Tej, son of actor-turned-politician Chiranjeevi.

The villas and plots in ‘Emaar Hills’ township project in Gachibowli were allegedly purchased by several people from the film industry, family members of politicians and businessmen. The CBI last week issued notices to over 80 persons in this regard. Ramcharan Tej — one of the villa owners — was quizzed for about one hour, CBI officials said. The agency is collecting information about buyers’ transactions with Emaar Hill Township Pvt Ltd (EHTPL), a joint venture of APIIC and Emaar Group. Andhra Pradesh Industrial Infrastructure Corporation (APIIC), in 2006, allotted 258 acres of land at Gachibowli to Emaar to develop an integrated township and a golf course.

CBI, on August 17, registered a case against B P Acharya, senior IAS officer and former Chairman and Managing Director of APIIC, and Emaar Group on the direction of the High Court, for cheating, criminal conspiracy and offences under Prevention of Corruption Act. The agency said Acharya, currently Principal Secretary (Home), entered into a criminal conspiracy with officials of Emaar Group and unknown public servants to cheat APIIC. One of the allegations is that Emaar sold plots at below the market rate prices, without the knowledge of APIIC, causing loss to it.izzed for about one hour, CBI officials said. The agency is collecting information about buyers’ transactions with Emaar Hill Township Pvt Ltd (EHTPL), a joint venture of APIIC and Emaar Group.

Andhra Pradesh Industrial Infrastructure Corporation (APIIC), in 2006, allotted 258 acres of land at Gachibowli to Emaar to develop an integrated township and a golf course. CBI, on August 17, registered a case against B P Acharya, senior IAS officer and former Chairman and Managing Director of APIIC, and Emaar Group on the direction of the High Court, for cheating, criminal conspiracy and offences under Prevention of Corruption Act. The agency said Acharya, currently Principal Secretary (Home), entered into a criminal conspiracy with officials of Emaar Group and unknown public servants to cheat APIIC. One of the allegations is that Emaar sold plots at below the market rate prices, without the knowledge of APIIC, causing loss to it.

Developers Excited as Retail Giants Plan Country Wide Expansion

India’s biggest retail players are on the hunt for space again, after a hiatus of two years, breathing life into the real estate sector, which is reeling under the impact of falling home sales. Encouraged by an upswing in demand, builders have launched over 6 million sq ft of retail space in the first six months of 2011. This is in contrast to a total of 5 million sq ft that they had launched in the entire year of 2010. Leading retailers that include Reliance, Pantaloon, Aditya Birla (More), Trent ( Tata) and Shoppers Stop, are looking for space ranging between 1,000 sq ft and 150,000 sq ft in various formats across the country.

“Currently expansion by both national and international retailers is concentrated in the prime locations of key cities thus prompting an upward movement of rentals…Transaction activity and size are expected to increase going ahead,” said Anshuman Magazine, chairman and managing director of CB Richards Ellis South Asia, a property advisory firm. He expects pan-India retail rentals to see an average increase of 10-15% in the next six months. According to a recent report by his firm, most of this total 6 million sq ft of organised commercial retail space expansion was witnessed in the National Capital Region, Mumbai, Bangalore, Pune and Chennai.

Retail sector executives feel developers still have an upper hand in rent negotiation and seek a higher revenue share given the positive outlook for retail industry. “Rentals, most of the times now, are not linked to property market scenario. Performance of the centre and retail industry’s business outlook matters. As most of the deals now have a revenue share component, retailers’ affordability depends on revenue generation,” said Kishore Bhatija, chief executive officer of Inorbit Malls (India), part of K Raheja.

Although rentals are not showing any signs of decline, experts also cautioned that all properties may not be able to get high rentals. “Business outlook remains buoyant for the retail industry and expansion plans are on track. There is no change in developers’ stance on pricing and rates but one must understand that a successful mall developer is a rare commodity,” said Thomas Varghese, chairman at the Confederation of Indian Industry’s (CII’s) National Council of Retail and chief executive officer at Aditya Birla Retail.

The company itself is looking to open 12 hypermarkets and around 150 supermarkets in India by March end. Realty space for some of these have already been tied up, while negotiations are on for rest of it, said Varghese. Due to high demand for quality space, key markets such as Mumbai and NCR continued to see rise in retail rentals in the first half of 2011. In Mumbai, increase in queries from new and existing retailers led to an upswing in transactions, pushing rents at south Mumbai’s Colaba by 10-11%, and 18-20% in central Mumbai, said the CBRE report. Malls in Saket and Vasant Kunj in South Delhi witnessed a rental increase of 9-12%, while Gurgaon witnessed rental appreciation of almost 15-16% as various brands consolidated outlets to tap the mid and upper mid-income catchment in the micro-market, the report added. “The demand for retail is good at the moment. There has been a 15-20% increase in rentals over the last two years.

Regulatory Body for Real Estate will lead to Corruption: CREDAI President

Real estate industry body CREDAI on Saturday opposed constitution of a regulatory body for the real estate sector, saying that it would become a “breeding ground for corruption” if implemented. “The proposed regulatory bill will become a breeding ground for corruption (if implemented),” the Confederation of Real Estate Developers Association of India (CREDAI) President Lalit Kumar Jain told reporters here. The Centre has proposed to form a regulatory body through the Real Estate Regulation Bill 2011 which seeks to protect home buyers from fly-by-night developers.

Arguing that the objective of draft regulatory bill was limited to just consumer protection, Jain sought the jurisdiction of the bill be expanded to address other pressing issues like long delay in approval, rising cost of material and labour etc, which hold utmost importance for the sector. “Only controlling one issue (consumer protection by the regulatory bill) is not going to help unless the entire spectrum of the industry is handled by the proposed bill,” he said. CREDAI further questioned the formation of any regulatory body on the ground that there were a number of options and mechanism like the consumer affairs department, the Competition Commission of India redress consumer grievances.

“Then what is the need for increasing the number of windows for (consumers),” asked CREDAI Vice President Getamber Anand. The real estate sector complained that delay in getting approvals from different departments, especially environment, cause bottlenecks for projects. “There are 48 departments attached to the real estate sector which leads to exploitation of developers…we are victims of corruption,” Anand said. “If the time taken for (statutory) approvals for starting a project is reduced, then the sale prices of the property could come down from 10 to 25 percent in the entire country,” he said.

Jain also pointed out that the spiraling labour and material cost had also put an additional burden on the real estate players. Meanwhile, CREDAI unveiled ‘Code of Conduct’ for the real estate sector for Punjab, aimed to bring transparency in the conduct of the business. “The Code of Conduct not only ensures transparency in real estate deals but will also imbibe setting up of a grievances redressal cell for the people who have unsavoury experience with respective real estate companies,” he said. Jain said if any member found to be indulged in wrong practice his membership could be terminated. He asserted that the Code of Conduct would make developers responsible towards their consumers.