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AR Group launches high-end villa project in Chennai

The Chennai-based AR Group, which had earlier promoted the premium IT park, Acropolis in Chennai’s upmarket Dr Radhakrishnan Road, has announced the launch of premium high-end villas on the scenic East Coast Road (ECR). The project, Amara Ananta, coming up at Palavakkam on ECR and located close to the city, will offer a total of 25 high-end premium villas. Each villa will come up on a two and half ground land (one ground = 2,400 square feet) and around 5,500 square feet built-up area. Each villa will have a private swimming pool and facility to park two to three cars. Being developed as a gated community, the common facilities will include a large club house with a swimming pool, a 1,500 sq ft multi-purpose party hall and a 1,000 sq ft gym, besides service areas and terrace BBQ facility.

“Amara Ananta will be one of the best gated communities in the city. It will be a contemprory design executed with the best quality materials available in the market,” says Amarnath Reddy, managing director of AR Group. “The construction, which has already started, is in full swing and the villas will be handed over in about 18 months from now,” Reddy added. The gated community will also have four boutique showrooms to match the lifestyle of the villa owners and six different elevations, besides being centrally air-conditioned and furnished (except for furniture). Located just a few minutes’ away from the beach, the villas are modern, idyllic homes with the finest amenities, coupled with expansive estate, with spectacular green landscapes, Reddy observed.

Given the amenities and the large land area that comes to be owned by the buyers, the price per villa ranges between Rs 5.5 crore and Rs 7 crore, depending on amenities and fixtures chosen by the buyers. AR Group is targeting business people, HNIs and top-level executives for the villas in Amara Ananta, since it is not only coming up on ECR, but also located close to the city as well as easily accessible to OMR, the city’s IT Corridor.

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.”

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.

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.

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.

Strong Lokpal May Expose Developers Nexus with Govt

Among many other things, the implementation of a strong Lokpal Bill will expose the nexus between government officials and developers. It will also control the flow of unaccounted black money in the real estate sector, which has been used as a parallel source of funds and income for decades.

“Developers as a private player will not directly come under the ambit of the Lokpal, but their nexus with the BMC and especially income-tax officials will surely be exposed. The flow of black money is enormous in real estate sector. Buyers frequently become victims of developers who demand black money. Citizens need to be alert and file regular complaints if something amiss is happening,” said noted IPS officer turned activist YP Singh.

Manohar Shroff, secretary of Maharashtra Chamber of Housing Industry (Navi Mumbai) said the Lokpal Bill will reduce cash transactions as builders will prefer transactions by cheque. “Due to the nexus between bureaucracy and builders, the latter opt for cash. Corruption starts at the top and percolates down to the whole society,” he said.

Another developer said, “If we stop accepting black money, then the majority of profits will go in paying huge government taxes. We are not the only ones involved in this wrong practice, Even buyers do so while selling their own flats. They do not mention the real transaction amount in the sale agreement to save on taxes.”

Diwali Surprise: New Home Prices May Fall by 10-15%

That dream home that you have waiting to buy may become a tad more affordable – new home prices could decline by between 10 to 15% by Diwali. Real estate companies that have accumulated huge inventories as sales dipped over the last two years, are under pressure from banks and investors to sell in order to generate revenues. Adding to the pressure is a growing mountain of debt, over Rs 38,000 crore for the top 11 builders.

“The property market cannot sustain the current price levels. Mumbai and Delhi are the most investor-driven markets. This is where the first crack can come from,” says VK Sharma, chief executive officer of LIC Housing Finance, the state-owned insurer which commands a large chunk of the country’s home finance market. A 10% price correction is likely in Mumbai and Delhi around the festival season, as that is the only way to revive sales, Sharma says.

Leading builders say that supply has to increase for prices to come down. “RBI’s rate tightening has resulted in developers not having funds to complete the projects and hence the supply will remain in check, while demand is still intact. For any easing of prices, the secret is to increase supply, not reduce it,” says Niranjan Hiranandani, managing director of Hiranandani Constructions. “Developers will hold onto their stocks, unless someone is over leveraged.” But a consensus seems to emerging among many market participants that the crucial Mumbai and the Delhi-National Capital Region (NCR) markets will correct soon. “A price correction in Mumbai and Gurgaon is bound to happen… There will be fractional break of 15% in the Mumbai market,” says V Hari Krishna, director at Kotak Realty Fund, a private equity arm of Kotak Bank.

“We are keeping our fingers crossed. But in all probability, we will have to resort to a price correction during the festive season when buyers go for new homes,” says a leading builder in the NCR region, who didn’t want to be named. He says his bank is refusing to lend any further and is instead asking him to service his debt by selling vacant apartments, even if that meant cutting prices. So far, builders have managed to avoid doing this, fearing any correction could lead to a crash. Many bank officials and investors ET spoke to say they have increased monitoring of realty projects and are trying to persuade developers to clear inventories. According to data compiled by Liases Foras, a real estate research firm, inventory in the top six property markets in the country has continued to rise over the last few quarters except in Hyderabad.

In the previous quarter, inventory level in Mumbai has grown to 108 million square feet which, based on monthly absorption rates, is expected to take 40 months to clear. In the NCR, the total unsold space rose to 220 million sq ft, 30 months of inventory. And in Bangalore, it has gone up to 27 months from 19. Despite the rise in unsold flats, prices have continued to move up in most of these markets.

At the same time, the debt burden on the builders is constantly on the rise. The total debt that the country’s top eleven builders have to service stood at Rs 38,500 crore at the end of the June quarter which builders have been trying to reduce by selling of non-core assets. “We have reached our real estate exposure limit. We will not be lending more unless there is a large influx of repayments. But I expect repayments to be normal. The NPA level has not gone up, it has stayed at 4-5%,” says TS Srinivasan, general manager, treasury, at Indian Overseas Bank.

“We can only persuade them to bring down their inventories. We cannot force them. Since the markets are such and prices are not going down; inventories are bound to rise. The NPAs from the sector in the June quarter was less than 1%,” explains RK Dubey, executive director of Central Bank of India. Some private equity players say that price cuts are the only way to ensure better sales. “We had gone back to our developer about 6-8 months back and wherever it was possible, we changed the product in terms size and pricing, understanding that it is the absolute pricing of a house that impacts buying decision. Today again, the situation looks a little difficult,” says Sanjeev Dasgupta, president, real estate at ICICI Venture.

Vaswani Group comes up with ‘Reserve’ Apartments in Bangalore

Vaswani group has recently launched a two, three and four BHK apartment project — Vaswani Reserve — located 300 metres off the Sarjapur Outer Road on Pa¬nathur Main Road in Bangalore, behind Cisco and Cessna Business Park. Vaswani Reserve comprises 236 units in several styles and configurations, some of which offer 180-degree views. Size of each unit varies from 1,715 sq ft to 4,4495 sq ft. Price of a unit starts at Rs 82 lakh, excluding statutory charges.

Vaswani Reserve actively fosters community living with several unique features, including terraced landscaped meeting places and sky-lo¬unges, the company said. With all units coming with reserved car park(s), the apartments are available in both single-level and duplex styles, with a mix of tall and intermediate towers. Other features of Vaswani Reserve include gathering spaces, reflexology path, avenue plantation, infinity edge pool, entry arch with water feature, and entrance pl¬aza, among others. Some of the amenities in the project include an expansive, internationally styled clubhouse incorporating full-fledged gym, health club, table tennis, billiards/ pool, party area, Vaswani said.

ASK Property Investment Advisors to raise INR 10 Billion by December

India’s ASK Property Investment Advisors aims to raise a 10-billion-rupee ($219 million) fund by December in a bet on the long-term case for property in Asia’s third-largest economy. The real estate-focused private equity firm, which manages assets worth more than 9 billion rupees, is in talks with developers in five of India’s largest cities to deploy the funds, Amit Bhagat, chief executive officer and managing director, said.

“In the downturn, if you invest, chances are there for superior returns,” Bhagat told Reuters. Slowing economic growth is mounting pressure on property prices in India, which are expected to “correct partly” in locations such as Bangalore and Chennai, Bhagat said. “We will invest in cities and suburbs, not extended suburbs. The fund will focus on residential projects in Mumbai, Pune, Chennai, Bangalore and the Delhi area, he said. ASK has already received commitments for more than half of the 10 billion rupees it is plans to raise, he said. The first fund of 3.4 billion rupees, raised in 2009, has been fully invested, Bhagat said.