Latest Real Estate News on 'Delhi'

Plan to hive off sick PSUs’ real estate

Comments Off on Plan to hive off sick PSUs’ real estate   |  July 21, 2014

NEW DELHI: The government is considering a proposal to hive off real estate owned by sick public sector companies in Mumbai, Kolkata, Pune and Ahmedabad to state-owned National Buildings and Construction Corporation (NBCC), before selling off the chronically loss-making entities.

Senior government officials told TOI that NBCC, which is developing real estate in the national capital, has shown interest in prime plots owned by companies such as Bengal Chemicals, National Bicycle Corporation and Richardson & Cruddas in Mumbai’s Worli and Byculla.

Similarly, in Kolkata, the company is looking at land owned by NJMC as well as state-government entities such as Lilly Biscuits and West Bengal Warehousing Corporation.

When contacted, NBCC chairman and MD Anoop Kumar Mittal confirmed that his company has written to the disinvestment department and the Board for Reconstruction of Public Enterprises to enter into a partnership with some of the loss-making PSUs. “Our interest goes beyond metros as we also want to look at tier-II cities,” Mittal said, but refused to discuss the issue further.

Separately, the company has initiated a dialogue with some of the companies to develop land. Government officials said NBCC has suggested various models, including direct sale of land and even joint ventures for the development of real estate. There are also suggestions of a holding company model, which will bring the sick companies under its fold, along with the staff and other assets and liabilities.

“It is something that we are considering but there is no decision on the issue,” an official said.

The government is keen on maximizing its disinvestment receipts and is looking at various ways to maximize its mop-up to meet the stiff Rs 48,000 crore target fixed by finance minister Arun Jaitley for the current financial year. Although the BJP government is continuing with the UPA’s disinvestment policy, it has not ruled out looking at strategic sale in profit-making PSUs as well.

Under the policy approved by the UPA, loss-making PSUs were to be put on the block but it’s a different matter that no action was initiated for a decade. But, before these companies are sold, the government will want to sell off its real estate so that it is not accused of handing over prime property at throwaway prices. Analysts, however, say that there may not be many takers for the sick companies minus the real estate.

Builders hunt for cheaper land & technology to offer affordable housing

Comments Off on Builders hunt for cheaper land & technology to offer affordable housing   |  July 21, 2014

NEW DELHI: Builders are scrambling to acquire cheap land and technology for low-cost housing after the government and central bank announced incentives for affordable housing, including cheaper loans to developers and buyers.

Real estate companies including Tata Housing, ATS Infrastructure, Bhartiya Group and Anantraj Industries are busy sewing up land deals for projects in the Rs 5-20 lakh home segment. There is unlimited demand for homes in this segment, say experts.

“There is a large market for such homes but a big supply constraint as well,” said Shailesh Pathak, executive director of the Bhartiya Group, which is planning to build 10,000 low-cost homes over the next two-three years on a 50-acre land near Chennai. Its larger plan is to upscale this to a million homes in the next decade across the country.

According to the ministry of housing, India faces a shortage of 18.78 million homes, of which 96% is in the economically weaker and low-income segments. The challenge for builders is to find cheaper land that makes it economically viable for them to build such homes. Such lands, however, are only available away from the cities, where, in most cases, there is a lack of transport facilities.

What is also required in this segment is a way for the builder to keep cost of construction in check, which can be achieved by adopting technology to speed up construction.

Tata Housing, which has decided on a long-term strategy for this segment, has set up a pre-cast plant in Bangalore where a house is literally manufactured and then assembled on site. “This technology standardises our homes and because it is factory based, we save on both time and cost,” said Rajeeb Kumar Dash, head of marketing services at Tata Housing.

What conventional construction achieves in three to four years, this technology does in two to three years. The one year saved translates into cost benefits.

Pathak of the Bhartiya Group says Korea has been successful in providing mass housing, while Mexico and South Africa have interesting success stories. His company is looking at international and other Indian case studies with the aim of incorporating key learnings and eventually adopting one of the technologies.

Noida-based ATS Infrastructure has built 400 apartments priced less than Rs 10 lakh in Bulandshahr in Uttar Pradesh and is looking at similar projects on the outskirts of tier-2 cities such as Muradabad, Kanpur, Saharanpur and Bhiwadi.

Managing director Getamber Anand said ATS Infrastructure would look at incurring capital expenditure for technology only after a certain scale is reached. At the moment, his in-house construction team sources materials from around project sites to keep costs low, as did noted British-born Indian architect Laurie Baker.

“This is a volume game, with very thin margins,” Anand said. Builders are working on different models. Anantraj Industries, for instance, secured cheap land from the Rajasthan government in Neemrana, but on condition that the company would not sell houses over a certain price. It built 2,300 homes with one room, toilet and kitchen in the industrial area and sold them at Rs 8-9 lakh each.

“We are now looking at replicating the model for other projects as well. Low cost of land and low cost of money will help,” said Amit Sarin, director at Anant Raj Industries.

Mayank Saksena, managing director at property advisory firm JLL, said several developers are looking at buying cheap land and some are even open to revenue share and joint developments for projects with owners of land in good locations. But there is a word of caution.

While the government has articulated a clear vision for housing in the budget this month, apart from cheaper capital and land, approval delays and regulatory hurdles need to be sorted out.

“Any delays could severely impact such projects because of the thin margins they operate on,” said Vishal Gupta, managing director of Ashiana Housing.

Subrata Roy pleads for court’s mercy

Comments Off on Subrata Roy pleads for court’s mercy   |  July 7, 2014

NEW DELHI: The Supreme Court on Friday reserved its order on release of Subrata Roy for 40 days after the Sahara group chief pleaded for ” raham” (mercy) and urged the court to let him out of jail so that he could negotiate the sale of properties to deposit Rs 10,000 crore with Sebi.

“Raham is what is required now in this case. Today he has spend more months behind bars and his release would enhance chances of negotiation for sale of properties,” senior advocate Rajeev Dhavan, appearing for Roy, told the court.

However, piling on the misery for Roy, the income tax department on Friday informed the court that the tax liability of Sahara Real Estate and Sahara Housing, which have been engaged in a festering legal battle over refund of Rs 24,000 crore, was assessed at Rs 10,051 crore.

Additional solicitor general Tushar Mehta said, “As of today, the total tax assessment of the two companies stood at Rs 10,051 crore.” He sought the court’s permission to intervene in the pending matter without interfering in the judicial monitoring of the process for recovery of money from Sahara for refund to nearly three crore investors.

Sahara, through senior advocates Rajeev Dhavan and S Ganesh, refuted the I-T department’s claim and said these were old assessments, which the group has challenged before the I-T appellate tribunal.

A bench of Justices T S Thakur, A R Dave and A K Sikri asked the I-T department to file an affidavit in two weeks “setting out details of (tax) assessment already made against Sahara companies, action taken against such companies and action proposed to be taken against them with regard to the transaction in question”.

The transaction in question was declared illegal by the Supreme Court in its August 31, 2012 order. It had directed the two companies – Sahara Real Estate and Sahara Housing – to return through market regulator Sebi the Rs 24,000 crore it had collected from nearly 3 crore investors.

Sahara had said it had refunded most of the investors through its field offices. It admitted an outstanding of Rs 2,000-odd crores and said to meet this, it had deposited Rs 5,120 crore.

The court had prima facie disbelieved the refund story and asked Sahara to deposit the entire money with a direction to Sebi to verify the investors. It had said if the investors were not traced or refund was not substantiated, the money would go to the Reserve Bank of India.

The bench reserved its order on Sahara’s plea for release of Roy for 40 days to negotiate the sale of three hotels abroad – Grosvenor House in London and Dreams Downtown and Plaza in New York.

On the safeguards to be put for transparent sale of the properties, Sebi counsel Arvind Datar said the market regulator had no expertise in real estate sector. “It is for Sahara to arrange for Rs 5,000 crore in cash and Rs 5,000 crore in bank guarantee. How they get it is for them to decide,” Datar said.

However, the court asked Sebi that it also had to verify details of investors submitted by Sahara. It said amounts actually refunded to investors should not be shown as due from Sahara as it would amount to double payment.

Sebi said it was planning to give advertisements in language newspapers in the Hindi heartland as most investors shown were from Uttar Pradesh and Bihar. It said it was contemplating putting a deadline of March 31, 2015 for investors to write back for refund and accordingly the money due to them would be refunded after verifying the antecedents. It admitted that till date it had refunded only Rs 5-6 crore of the Rs 5,120 crore deposited by Sahara in December 2012.

Source: TOI

Delhi tops India list for property fraud cases. Here’s how people are being duped

Comments Off on Delhi tops India list for property fraud cases. Here’s how people are being duped   |  July 7, 2014

Delhi tops the list in terms of cases related to property fraud and misappropriation among all states and union territories in the country, according to the National Crime Records Bureau (NCRB).

The total number of cases reported in sections of property lost under criminal breach of trust and cheating during 2013 was 181, the highest in the country, the report says.

While eight cases among them were of criminal breach of trust, 173 cases were of cheating. Delhi was closely followed by Maharashtra with 176 cases, while Punjab came third with 82. The Economic Offences Wing (EOW) of Delhi Police which investigates financial crimes also says that there has been a spurt in such cases.

“Around 30 percent of all the cases which are reported to us are related to real estate,” Joint Commissioner of Police (EOW) Satish Golcha told PTI. Selling mortgaged property to multiple buyers or on fudged papers have been the typical methods, but now people are coming up with unique ways to con investors these days, police said.

“In a recent case, a real estate firm in its promotional documents used projects executed by some other entity to gain investors’ trust,” said a senior police official. An FIR was lodged by one Surrinder Kumar Bangla, a former Assistant General Manager at SBI, against the promoters of Cosmic Structures Ltd at Janakpuri Police Station of West Delhi under provisions like Sections 420 (cheating), 120B (criminal conspiracy), etc.

Bangla allegedly paid Rs 70,000 and booked a virtual space in an upcoming tower in Noida of Cosmic Structures Ltd after its promoters provided him with a list of projects they claimed to have developed, constructed and delivered across the country.

“However, Bangla later came to know that the projects Cosmic Structures Ltd was boasting off were actually of
Quality Constructions and he demanded a refund. He later approached court and got an FIR registered. Police is
investigating the case,” said the official. Meanwhile, the owner of Quality Constructions, Rajesh Lamba, who is the brother of late cricketer Raman Lamba, approached Delhi High Court requesting it to restrain Cosmic Structures Ltd from using his name for their promotion. The ruling as sought was granted to Lamba by the court in an order on April 3. He has also filed a case in this regard at EOW and it currently is under investigation.


Commercial realty gets a boost as companies gear up to cash in on “Acche Din”

Comments Off on Commercial realty gets a boost as companies gear up to cash in on “Acche Din”   |  June 30, 2014

Companies across industries such as IT, consultancy and e-commerce have begun leasing and buying office space in expectations of an economic boom under a stable central government — a development that will rejuvenate the job market.

Top property consultancies in the country such as Cushman & Wakefield, CBRE, JLL, Knight Frank and DTZ say they have mandates from various corporates to lease about 40 million sq ft of space in the top seven cities this year. With firms planning to use more than half this space for expansion, conservative estimates show that they will create around 350,000 jobs in the process.

“There is a sense of urgency among clients today,” said Viral Desai, director – office at Knight Frank. “While not much has changed in their business so far, with a new government in place, they are preparing for growth. No one wants to miss the bus,” he added. Consulting firm KPMG recently leased over 700,000 sq ft of space in Bangalore and there is buzz in the market that its peers EY, Deloitte and PwC are also looking to ramp up. Many of the big Japanese and Korean firms are looking for space, though demand from the IT industry — doing well on the back of a US recovery — is still the biggest.

Accenture, for example, is looking for about one million sq ft of space in Bangalore, according to property consultants. Another big segment vying for space is e-commerce which has seen multiple rounds of consolidation and entry of big global players such as Amazon and eBay over the last one year, with players adding offices and warehouses on hopes of a boom in consumer spending.

Bangalore-based RMZ said it has already leased 3.25 million sq ft in a business park in the city to corporates such as SAP, Morgan Stanley, ANZ and Honeywell in the last few months. While large scale leasing might not be back just yet, the first signs are here.

“Corporates, both Indian and foreign, foresee 2016 as a big year and they are starting to plan for that growth today,” said Bhumesh Gaur, co-chair at India chapter of CoreNet Global, an association of corporate real estate professionals whose members include over 100 India and foreign corporates. A landslide victory for BJP-led National Democratic Alliance in the general elections triggered the new-found excitement in the corporate sector. “In our conversations with companies till a few months ago they were more interested in maintaining status quo as they were uncertain.

There were no large futuristic calls on expansions. That’s changing now,” said Anckur Srivasttava, chairman of GenReal Property Advisers. Srinivasan Gopalan, chief operating officer at Mumbai-based developer Wadhwa Group, said the company’s leasing pipeline has doubled since the election results to nearly 400,000 sq ft now. “Enquiries have gone up substantially,” he said.

The development will boost the job market, which has slowed down due to subdued economic growth that hit production and consumption. According to an ET Intelligence Group analysis of close to 250 companies belonging to the S&P BSE 500 index, employment growth slowed to 3.5% in FY13 from 5.7% in the year before and 6.4% in FY11. There could be an improvement this fiscal with corporates planning to use about 25 million sq ft of office space they plan to take on lease in top cities such as Gurgaon, Bangalore, Pune, Hyderabad and Chennai for expanding their businesses. “There is a lot of positivity in the environment now as challenges of project approvals and capital inadequacies are being done away with.

There is significant expectation of de-congestion of growth from now on. Overall growth expectation for the job market in the next one year is very bullish,” said Rituparna Chakraborty, senior vice president at HR consultancy firm Team-Lease Services. “The challenge for India now is not job creation but finding the right talent and skillset,” he added. Meanwhile, rising demand for office space may lead to supply shortage and high rentals. Over the last few years, as demand for office space declined, as a kneejerk reaction most builders started to defer new office projects and shelved many projects.

According to JLL, across the top seven cities, expected total supply of grade A office space is only about 31 million sq ft in 2014 compared to 44 million sq ft in 2011. “In most cities, enhanced interest from companies has not kept pace with commercial property developers with lack of new launches. The rentals are expected to move up by 5% to 10% this year,” said Ashutosh Limaye, head of research at JLL India. Srivasttava of GenReal Property said he expected office rentals to keep rising constantly over the next five years.

Source: Economic Times, By Sobia Khan, Kailash Babar & Ravi Teja Sharma

Blackstone, others gear up to list REITs as India finalises rules

Comments Off on Blackstone, others gear up to list REITs as India finalises rules   |  June 30, 2014

NEW DELHI – Blackstone Group(BX.N: Quote, Profile, Research) and its partner, Embassy Group, are laying the groundwork to cash in on their property holdings by setting up India’s first real estate investment trust (REIT) and listing it on one of the country’s stock exchanges.

The move comes as Prime Minister Narendra Modi’s government works to finalise rules as early as next month that will govern the trusts. The finance ministry is expected then to clarify tax rules for REITs in the budget, people with direct knowledge of the matter said.

The world’s biggest property investor and Embassy have a joint portfolio of more than 20 million square feet of offices in India, which is likely to help value their REIT at $2 billion, said Jitendra Virwani, chairman of Bangalore-based Embassy.

Listing REITs gives companies like Blackstone, The Xander Group, an emerging markets investor backed by the Rothschild family, and private equity firm Red Fort Capital, which counts Abu Dhabi Investment Authority among its investors, an attractive option to exit some of their investments.

“We are actually gearing up because we feel the pace the government is moving at is faster than what we would want, so it is better to be prepared much earlier than later,” said Virwani, who was set to meet Blackstone on Thursday to draw up a plan for the listing.

A spokeswoman of the tax department did not answer requests for comment. Blackstone did not respond to a request for comment.

The long-awaited move by India will be implemented by the country’s market regulator after the ministry clarifies tax rules to transfer assets into a separate vehicle before listing the trust, which had triggered worries over double taxation.

Implementing REITs will also be one early sign from Modi of how he wants to bolster the economy, which is suffering its longest spell of under-5-percent growth since the late 1980s.

India issued draft regulations for REITs in 2008, but was forced to shelve the plans after the global financial crisis dried up investor interest and an economic downturn dimmed the outlook for real estate investments.

If REITs are approved, India will follow China, where regulators in April approved the first property trust. The absence of REITs in China and India made Singapore and Hong Kong the preferred markets for listing property assets in the region.

REITs, listed entities that invest mainly in leased office and retail assets and distribute most of their income to shareholders as dividends, will give developers a new avenue to raise funds by allowing them to sell finished commercial buildings to investors and list them as a trust.


Between 2008 and 2013, private equity funds invested more than 452 billion rupees ($7.6 billion) in Indian real estate, of which more than a third was spent on office and retail assets, according to data from Cushman & Wakefield, an international property consultant.

“If there is more liquidity in the market, if people believe they have clearer exit possibilities, obviously it is helpful to any investor,” said Siddharth Yog, managing partner at Xander.

“If REIT laws came into being and a potential REIT listing in India was possible, it could be one of many potential exit strategies that could be explored,” said Yog, adding that REITs, however, will not dictate the company’s investment plan.

In 2012, Blackstone paid $200 million for a 50 percent stake in three office assets managed and owned by Embassy and mainly located in Bangalore. Earlier this year Blackstone and Embassy hived off their portfolio of assets into a separate vehicle, taking their first step towards listing a trust in India.

The portfolio, leased to tenants like Microsoft (MSFT.O: Quote, Profile, Research), IBM (IBM.N: Quote, Profile, Research) and Goldman Sachs (GS.N: Quote, Profile, Research), generates an annual rental income of 8 billion rupees and Virwani expects this to rise to 10 billion rupees by the time it lists a REIT.

“To have a brand like Blackstone along with us will help us market the REIT and get a better valuation.”

Source: Reuters, By Aditi Shah (Additional reporting by Rajesh Kumar Singh; Editing by Sumeet Chatterjee and Matt Driskill)

Internet influencing real estate decisions worth $43billion in India: Google

Comments Off on Internet influencing real estate decisions worth $43billion in India: Google   |  June 18, 2014

NEW DELHI: As more Indians log online to seek information before entering into property deals, Internet today is estimated to be influencing decisions worth about USD 43 billion, search engine giant Google said.

According to a study commissioned by the US-based firm, over 50 per cent of real estate buyers’ decisions are influenced by Internet research.

“This phenomenon of researching online for real estate information before making a decision is not limited to metros but also extended to buyers in tier II cities,” Google India Industry Director Nitin Bawankule told reporters here.

The overall influence of Internet on real estate transaction value of both residential and commercial property including rentals amounts to USD 43 billion (USD 31 billion for residential and USD 12 billion for commercial), he added.

The primary reasons for researching online were easy access to in-depth property information and market trends (60 per cent), large comparison options (52 per cent), easy access to contact details of owners and developers (49 per cent) and financing and document processing information (43 per cent).

The survey, conducted by consultancy firm Zinnov across 15 cities in India included the metros, Pune, Lucknow and Ahmedabad with 6,196 respondents.

Talking about search trends on Google, Bawankule said the number had seen a 3x growth in the last three years.

“There is tremendous opportunity for both online real estate aggregators, brokers and developers to engage the buyers online by providing rich, meaningful and immersive experience to buyers on the Internet,” he added.

According to the study, 62 per cent respondents said aggregator sites (like and were top sources of information for them on the Internet, followed by websites of real estate companies (52 per cent).

About 45 per cent said they visited broker sites, blogs and forums to find information before making a decision.

An increasing number of people are also using their mobile devices to search for properties online.

“Mobile queries (those originating from mobile phones) are doubling every year and about 40 per cent of total searches came through mobile phones,” Bawankule said.

Also, the study found 73 per cent respondents saying they prefer using their mobile apps for researching for property.

However, a major concern for people researching online was the lack of accurate and updated information.

Respondents said websites of developers and aggregators often lacked availability of in-depth information about property and features like easy price comparison.

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