Latest Property News on 'Kolkata'

mjunction eyes Nokia Siemens land in Kolkata to build IT campus

KOLKATA: mjunction Services Ltd, an equal e-commerce joint venture between Tata Steel and Steel Authority of India ( SAIL) plans to acquire a 9 acre plot in Kolkata where Nokia Siemens Networks (NSN) runs a loss-making landline gear manufacturing unit.

mjunction, which conducts e-auctions of steel and coal on an electronic platform, has been scouting for prime real estate in the city to set up an IT campus. Nokia Siemens is likely to shut down its Kolkata plant as part of a global decision to sell non-profitable fixed-line assets worldwide to cut losses.

It has 73 employees in the Kolkata unit who were recently offered a voluntary separation scheme that will cost the company Rs 14 crore, averaging a pre-tax payout of Rs 15-20 lakh per employee.

NSN is an equal joint venture between Finland’s Nokia and Germany’s Siemens. Nokia Siemens Networks in an internal memo to Kolkata employees, said that due to “circumstances beyond control, there was a compelling necessity to review the limited work at the factory and resources including, manpower”.

mjunction confirmed it is interested in the land if Nokia Siemens shuts down the Kolkata telecom factory.

“The Nokia Siemens site seems a good fit and we are very keen on developing our IT campus there. We are looking at exploring this opportunity and start conversations with the West Bengal government,” said Viresh Oberoi, founder CEO & managing director, mjunction Services Ltd.

Nokia Siemens India said it would not comment on the land issue since it involved one of the parent companies. mjunction’s move comes at a time when the West Bengal government wants an IT park to come up on the land in the event NSN shuts down its landline gear unit.

The state government has told Siemens — the owner of the NSN factory land — to honour its earlier pledge of setting up an IT park within the complex since a majority of the land is idle.

A senior bureaucrat in the state government said Siemens had not come up with any concrete plan towards this, post-discussions. “We have told Siemens to either set up an IT park or vacate the land, since there is serious paucity of land for IT projects in Kolkata,” said a senior state government official.

Siemens has declined to comment to ET’s emails on its discusions with the state government on building an IT park on the NSN factory site. The Mamata Banerjee government has directly approached Siemens since NSN is a tenant in so far as the Kolkata unit goes.

Though the factory building and equipment were handed over by the erstwhile Siemens Public Communication Network Ltd (SPCNL) to NSN five years ago post-formation of the Nokia Siemens JV, the land remains with Siemens.

Bengal urban land policy seeks 30% reservation for low-cost housing

The promise of Ma, Mati, Manush governance by Mamata Banerjee may fall short of the second M-word, meaning land — at least for real estate developers in the state’s capital city.

For, the West Bengal government has now decided to bring in an amendment to the Urban Land (Ceiling and Regulation) Act (ULCA), 1976, an eyesore of developers for quite some time. The proposed alteration will stipulate the developers to reserve 30 per cent apartments in big housing projects for the low-income group (LIG). Industrialists have been seeking a total repeal of the Act, introduced in 1976 to prevent hoarding or excessive holding of land in urban centres.

West Bengal is one of the few states in the country to have a legislation like the ULCA. The move is in sync with the apprehensions of the chief minister. After all, Banerjee had once wondered, “What will happen if someone wants to buy the city?”
According to the Act, the ceiling limit on vacant land in a category ‘A’ city like Kolkata is 7.5 cottah or about 500 square meters.

The demand for repealing the ULCA was raised for the first time by Godrej Properties chairman Adi Godrej, at an industry meet within the first month of Banerjee taking over the chief minister’s office.

Much to the disappointment of the developers, urban development minister Firhad Hakim has now totally ruled out the possibility of repealing the Act. “We are not going to abolish the Land Ceiling Act,” he said. “Instead, we will give permission to developers for purchase of land beyond ceiling, provided they reserve 30 per cent housing for low-income housing segment.”

The amendment will be a part of a bigger urban development policy that the government is expected to announce next month.

For West Bengal, which has not seen the launch of any major real estate projects since the Trinamool Congress government came to power 11 months ago, the move is seen as a dampener for already sluggish real estate market.

Prominent city-based developer Santosh Rungta says it is not feasible to reserve 30 per cent of the project size for the LIG segment. “The responsibility of the state is being thrust upon the private developers,” according to Rungta, who is a former president of the Confederation of Real Estate Developers Association of India.

The body is now set to hold a meeting with government, insisting that not more than 15 per cent of the reservation was possible for LIG segment.

As for the Trinamool dispensation, it has also decided to do away with the concept of public-private partnership (PPP) — an idea pioneered by the earlier Left Front government under Buddhadeb Bhattacharjee. Instead, “the government will allocate land to the highest bidder and for the rest of the big projects the state will build on its own,” according to Hakim.

Notably, in spite of the Land Ceiling Act, the earlier government had windfall gains by allotting land in prime areas of city.

For example, three prominent government agencies involved in land deals in and around Kolkata — the Kolkata Metropolitan Development Authority (KMDA), Kolkata Municipal Corporation and West Bengal Housing Board— signed deals worth more thanRs 18,000 crore, for over 5,250 acres of land during the period in little over two years. In fact, KMDA was credited with signing deals, worth more thanRs 800 crore with real estate developers on a single day.

“The process of land allotment slowed substantially over the last two years. First, it was due to elections,” said a city-based real estate developer. “second, it was due to lack of vision and policy of the new government.”

Bengal Land Reforms (Amendment) Bill 2012 passed

Kolkata: A bill facilitating relaxation of urban land ceiling laws in setting up industry in West Bengal was today passed in the state assembly by 252-46 votes despite Opposition by Left Front members.

In the absence of Chief Minister Mamata Banerjee, who is also in-charge of the Land and Land Reforms department, in the House, the West Bengal Land Reforms (Amendment) Bill 2012 was introduced by Parliamentary Affairs Minister Partha Chatterjee for discussion.

Immediately after it was moved in the Assembly, Leader of Opposition Surya Kanta Mishra said such an important bill required a detailed discussion before passage in a hurry and demanded that it be referred to a select committee of the House.

It would be unwise to pass such an important bill after a 90-minute discussion, he said.

Mishra said that the Bill was moved earlier in 2006 when it was sent to a Select Committee and was subsequently withdrawn.

In his reply, the minister said that the LF Bill of 2006 and the Bill they moved now were different in context and intention.

The government was against forcible acquisition of land and was committed to protect the farmers as well as to brighten the prospect of industrialisation in the state, he said.

Describing the bill as “sensitive”, Chatterjee said that the government was not against industry and that enough land was available for setting up of industry.

Chatterjee alleged that the erstwhile state government went for forcible acquisition of land starting from Singur to Nandigram putting farmers at party cadres’ gun point.

The passing of the bill would facilitate relaxation of urban land ceiling laws in some cases for setting up industry.

The state government would also be able to take back land allotted to a person for setting up any unit, if the land remained unutilised for three years.

Source: http://www.financialexpress.com/news/bengal-land-reforms-amendment-bill-2012-passed/931645/0

Kolkata Port Trust may monetise 100 acres of its land

NEW DELHI: The Kolkata Port Trust, which owns more than 10,000 acres of prime property in and around Kolkata, may just succeed in monetising some 100 acres of its land through commercial use. West Bengal chief minister Mamata Banerjee has sought union shipping ministry’s approval for effective utilisation of some 100 acres of KoPT’s vacant land. Part of the port’s land is currently home to some shabby real estate, several years old, fetching rent as low as Rs 10 a month.

KoPT chairman ML Meena said, “The state chief minister has sought shipping ministry approval for effective utilisation of some 100 acres of vacant land. Of this, about 30 acres have become labour colonies. If the ministry allows it, the chief minister intends to rehabilitate the encroached land.”

The union shipping ministry is, however, yet to give the go-ahead to the plan. K Mohandas, secretary, ministry of shipping said that a concrete proposal has not been finalised yet. However, he added in-principle they would be willing to work with the state government for the development of the city.

The current shipping guidelines allow port authorities to use a portion of their properties for non-port related activities, but the proposal has to be sanctioned by a high-powered committee formed by the shipping ministry.

“Currently, for land matter, there is an embargo. Although, we have an existing policy but it would be designed in which ports can lease the land,” Mohandas said. Any lease or licensing policy would be done only based on cabinet’s approval. The cabinet approval is expected in a month’s time, he added.

KoPT earns only a paltry sum of Rs 140 crore a year from its prized possession leased to different parties, primarily because a large chunk of KoPT’s properties has been mired in court cases for years now. The rental earnings of Rs 140 crore is seven times more than its earnings of Rs 20 crore just seven years ago and follows a 30 % rise in rent rates sometime in 2010.

Consultant PricewaterhouseCoopers is revaluing KoPT’s assets and a final report is likely to be submitted soon. The assets between the Ganges and Strand Road along with a major chuck of land, which houses factories, were last revalued some years ago. KoPT owns some 4,574 acres in Kolkata. Of this, around 2,774 acres are within the municipal limits of Kolkata, Howrah and Budge Budge and uses some 1,650-acre for its operation. Besides, it owns about 6,300 acres in Haldia.

Kolkata realty goes up but policy uncertainty affect projects

There is no doubt that the property prices in almost all the micro market of eastern city is going northwards, yet uncertainty looms large over Kolkata realty. There have been less transaction and even lesser new launches in the city, even when the state chapter of the Confederation of Real Estate Developers’ Association of India (CREDAI) demands ten satellite towns in the state. The real estate projects have been on a standstill as the developers are apprehensive of the policy of the Government post the change of power after 34 long years.

In the last one year, the city has witnessed fewer number of new project launches as compared to last year due to delay in approvals and clearances. Pradeep Sureka, Managing Director of Sureka Group and President of the Kolkata Chapter of CREDAI, says, “This year the new supply in residential segment has been significantly low as before the elections approvals had stalled and even now they are very slow.”

Sureka, like many other developers in Kolkata, is awaiting Government approval for his next set of launches. “Once we know the kind of land that we can purchase and their probable locations, we can go ahead with the projects. On an average, we are looking for 500-1,000 acre of non-agricultural land for housing development. Of course, if we are to directly buy land, the Urban Land Ceiling Act has to be removed,” Sureka pointed out.

Developers are also lobbying with the State Government for incentives to recover cost overruns. The three critical factors that will determine the Kolkata realty choice ahead are land availability, infrastructure readiness and ease of connectivity. Acknowledging the need to fast-track housing development in the state, the Urban Development Minister Firhad Hakim says the new Government required some time to assess the sector.

“We want to join hands with the industry but in a manner that is transparent. So far as infrastructure development goes, there is no two ways about the need for better infrastructure in New Town. Since we have shifted the township development authority from the Housing Department to Urban Development, we can apply for funds under the Jawaharlal Nehru National Urban Renewal Mission scheme,” said Hakim.

According to data by Jones Lang LaSalle India, (JLLI) only 4600 apartments have been launched by October 2011 as compared to 8900 in 2010. In the second quarter of 2011, the market witnessed the launch of four projects, offering only 711 new units which includes the costliest project, Atmosphere offered by Forum Group.

Though project launches have been few, the realty market unlike other parts of the country has witnessed a jump in prices by almost 15-20 per cent. Mayank Saxena, Managing Director JLLI, Kolkata says, “Post 2009, developers in the city focussed mainly on sub Rs. 20 lakh homes, but now everyone is building bigger projects and prices have increased substantially. Last year prices in Ballygaunje, were around Rs 13000-14000 per sft which has climbed upto Rs 16,000- 17000 per sft.”

Apartments in New Town, in the Rajarhat area on the fringes of Kolkata, is commanding a price tag of Rs 3500- 5000 per square feet (per sft), while in the posh Ballygunj and Alipore areas, prices are hovering in the range of Rs 12,000-17,000 per sft. In the upcoming area of the E M Bypass, developers are getting buyers to shell out between Rs 5000-8000 per sft.

Rahul Todi, Managing Director of Shrachi Realty, part of the Rs 800 crore Shrachi Group, says, “Prices have appreciated in the city center by 15-20 per cent. Prices have not increased in any other city but the prices have largely been driven due to demand-supply gap in the city. This year only 5-10 significant projects have been launched and we expect the situation to continue like this for next few months.”

Meanwhile, property analysts believe the IT/ITeS sector will continue to lead the demand for office space followed by telecom, pharma and financial firms. Industrial growth might spur office space demand from the manufacturing and engineering sectors.

Going forward, developers expect prices to remain stable as rate hikes and unsold inventories will dominate the market in 2012. Property consultants say real estate prices in Kolkata have begun to firm up. “The second half of the current fiscal (2011) has seen many more sales and bookings compared with the first six months,” said Kaustuv Roy, Executive Director of Cushman and Wakefield. “Developers are probably betting on property prices remaining firm for the next two-three years, by which time most of these projects would be ready for possession.”

As per the data released by Liases Foras, a real estate rating and research firm, the Kolkata residential market, at present, has 15,300 unsold units of which 42 per cent inventory hails from Rajarhat and 17 per cent each from north and west Kolkata. The research has been done across 66 locations in the city and its suburbs including Hooghly and Barasat.

Pankaj Kapoor, Managing Director of Liases Foras, says, “The Kolkata property market is the smallest in size as compared to other metro markets and the market is sluggish at the moment. Though rest of the city has very less unsold inventories but Rajarhat dominates the chart.”

The real estate market in Kolkata is still in a very nascent stage but prices have started to escalated and both Unitech and DLF who have projects in the city are reporting healthy sales for its launched projects. Information technology (IT) service sector has not recovered completely thus Rajarhat is witnessing more vacancy than the other parts of the city like Alipore or Ballygaunje, the hotspots for residential realty projects at present.

Advantage Kolkata
Nascent property market
Proposed ten satellite towns
IT/ITeS, telecom, Pharma & financial firms
Growth potential due to demand-supply gap
Policy change with JNURM funds

Source: http://www.track2realty.com/kolkata-realty-goes-up-but-policy-uncertainty-affect-projects

Meinhardt to invest 100 cr in 2012

Global engineering, infrastructure and project management consultancy firm, Meinhardt plans to invest over Rs 100 crore this year to increase its footprint in India.

Meinhardt will be increasing its presence in Kolkata, Mumbai and in a Southern city within a year. It has initiated talks to acquire a couple of consultancy firms engaged in water supply and sewerage space.

Talking about the firm’s plans for India Rajesh Srivastava, MD-Meinhardt India, said, “The growth curve of Indian economy is at an all-time high and contributing to the upswing is the Infrastructure sector in particular. Growth in this sector is driven primarily by globalisation of Indian corporate, growing presence of foreign businesses in India and rapidly increasing consumer class.

With major national and global players making large-scale investments, we have to play a major role to boost the development of infrastructure and thus construct a developed nation. We have over 400 engineers and architects in our offices in Delhi and Chennai. We plan to double the headcount and start operating from three other cities. A couple of acquisitions are also on the cards. All these will require over Rs 100 crore. We are currently talking to a company in South and also one in Delhi in the water supply and sewerage space. The deals are likely to be signed this year.

The cost of acquisitions might be more than Rs 50 crore.” The firm is providing engineering consulting services for some very key projects in Kolkata which includes tallest building in Kolkata, “Urbana-2″ which is 201 mt high ultra-luxurious residential project. They are also providing detailed engineering services to South City Residential Township, Kolkata, India’s largest township development, covering an area of 372,000 m² and featuring four towers, each 34 storey high. Providing structural, mechanical and engineering services to the splendid residential project in Kolkata, “Rosedale”.

Source: http://www.tribuneindia.com/2012/20120128/real.htm

Videocon arm to withdraw IT/ITeS SEZ project in Bengal

A Videocon group firm has approached the Centre to withdraw its IT/ITES SEZ project at Jalpaiguri due to “latest business outlook” in the northern region of West Bengal.

”…Now, the developer has requested for withdrawl of formal approval stating that the company is not able to implement the project owing to the latest business outlook of the region,” according to a Commerce Ministry document.

An inter-ministerial Board of Approval (BoA), chaired by Commerce Secretary Rahul Khullar, will consider this request on January 24.

The project was to be implemented by Videocon Realty and Infrastructure Ltd which had been granted a formal approval for setting up 10-hectare Special Economic Zone(SEZ). The preliminary approval was given in May 2009.

Even as Chief Minister Mamata Banerjee recently held a meeting in Kolkata with industrialists, several projects relating to steel and power are stuck in the state for different reasons including certain regulatory and land issues.

Infrastructure major Larsen and Toubro has also approached the Commerce Ministry to surrender its IT/ITeS SEZ which was to come up at Coimbatore in Tamil Nadu, due to “economic unviability” of the project.

“The developer has requested for de-notification of the SEZ…in the changed economic scenario,” the agenda papers of the BoA meeting said.

Besides, 11 developers including that of Parsvnath SEZ Ltd and Taneja Aerospace and Aviation Ltd have extension of time for execution of their projects.

However, India’s largest software firm, TCS remains bullish on the sector and has sought approval for its new SEZ project at Indore in Madhya Pradesh.

Source: http://www.thehindubusinessline.com/industry-and-economy/info-tech/article2808350.ece

Private equity funds like Kotak Realty Fund, Redfort Capital and IL&FS plan to exit large township projects

BANGALORE/KOLKATA: Private equity funds are trying to exit their investments in large integrated township developments where the projects have been stuck for lack of demand or clarity on approvals.

PE funds like Kotak Realty Fund, Redfort Capital and IL&FS, whose township projects have been stuck since they invested a few years ago, are now changing their investment strategies and are focussing on investing in short term, small format projects which will be completed in three to four years at the most.

“Township projects today offer limited scope. We now want to invest in projects spread over two-four million square feet with a smaller average ticket size of 100-250 crore,” says V Hari Krishna, director, Kotak Realty Fund.

In 2008, the realty fund from Kotak had invested in a 125-acre residential township project with Bangalore-based DivyaSree Developers in Chennai which was expected to start early this year. The fund had also picked up a 28% stake for 270 crore in Aavisa – an integrated township project being developed by IVRCL Assets & Holdings.

Redfort Capital’s three-year-old investment in two township projects promoted by Prestige Estates is in the process of aggregating land.

Integrated townships were the first category in real estate in which foreign direct investment was allowed by the Indian government in 2005. Private equity funds have invested $1.5 billion in township projects since 2006, says property consultancy firm DTZ.

“In 2007, integrated townships seemed to be the preferred investment option for private equity players in India due to their diversification benefits and low entry cost. But now many such investments are stuck due to execution and approval delays,” said Rajeev Bairathi, director, investment advisory at DTZ India.

London-listed Trinity Capital, whose investments are now managed by Indiareit Fund Advisors, has exited Rustomjee Evershine Global city township project by selling its 23% stake for 48 crore. It has also exited Rustomjee Group’s 127-acre integrated township in Thane by selling 16% stake to Keystone Realtors.

Source: http://economictimes.indiatimes.com/markets/real-estate/realty-trends/private-equity-funds-like-kotak-realty-fund-redfort-capital-and-ilfs-plan-to-exit-large-township-projects/articleshow/11519359.cms

Case filed against MIMEC for alleged real estate fraud

Case filed against MIMEC for alleged real estate fraud

KOLKATA, JAN 12: Five individuals, who had booked residential properties on the outskirts of Hyderabad, have moved a city court for an alleged fraud against MIMEC India Ltd.

According to MIMEC’s latest filings to the Registrar of Companies, Kolkata, three ITC associate companies – Russell Investments Ltd, Divya Management Ltd and Antrang Finance Ltd – jointly hold 1,64,509 shares of Rs 10 each, representing 79.86 per cent of the paid-up equity of 2,06,006 shares of MIMEC.

The 8th Metropolitan Magistrate’s court on November 22 took cognizance of the criminal complaints and issued order to begin proceedings against Kolkata-registered MIMEC and its directors under Sections 418/420/406 of CrPC.

The court also issued arrest warrants against the eight directors of MIMEC and two directors of a Hyderabad-based developer, for their alleged involvement in the case.

One of the MIMEC directors, Mr Jagdish Singh, obtained a stay on the proceeding for eight weeks from the Calcutta High Court on December 16. The High Court, however, asked Mr Singh to surrender before the Metropolitan Magistrate’s Court.

The High Court on December 20 further stayed the proceeding before the 8th Metropolitan Magistrate for 10 weeks.

In an e-mail response to Business Line’s queries, Mr S. Mukherjee, a director of MIMEC, confirmed the development. He, for and on behalf of the MIMEC Board, said: “Five criminal complaints, in the name of five different individuals but in identical language, have been filed against the Company and other parties including Mr J. Singh. Petitions challenging these complaints have been filed in the Hon’ble High Court of Calcutta on behalf of Mr Singh, and the court has stayed all further proceedings in these complaints.”

Meanwhile, in response to the Magistrate’s summons, Mr Singh appeared in the Magistrate’s court and obtained requisite legal relief in accordance with the usual procedure. “Since the matter is sub-judice, we are unable to comment any further, except to mention that the complaints are frivolous and vexatious”.

The complainants alleged that MIMEC in late 1980′s offered to sell plots in a 2,000-acre township project ‘Prakriti’ about 36 km away from Hyderabad on the N.H. No. 9. Petitioners allege that though payments were made in several instalments to MIMEC, the project never took off.

According to the petition in 2011 complainants learnt: “Either the entire or parts of project land under “Prakriti” had already been resold to several independent third parties including one Sri Sri Developers, who in turn have renamed the project or part thereof as “Rich Valley” and are re-selling plots to the general public at the rate of Rs 4,500 per Sq. Yd. and the same was done by Sri Sri Developers by issuing Brochures to the general public at large, with the active aid and assistance of the accused persons”.

Source: http://www.thehindubusinessline.com/companies/article2796090.ece?homepage=true&ref=wl_home

Retail realty commands unreal prices

Retail realty commands unreal prices

KOLKATA: Believe it or not, it is at least twice as expensive to lease retail space in Kolkata than Bangalore or Hyderabad. There are even instances of property in the city commanding as much rent as one in Mumbai or Delhi.

“I can get a retail property in Bangalore or Hyderabad for Rs 50/sq ft. But the situation is peculiar in the east. In a place like Patna, realtors are demanding Rs 100/sq ft. In Kolkata, it is obviously higher than that,” Reliance Trends senior vice-president (operations) Akhilesh Prasad said on Wednesday.

He was among several top officials of retail firms who came down heavily on artificially jacked up realty rates in Kolkata and rest of the east. Speaking at the East India Retail Summit, they said the deliberate cartelization of real estate players in the city kept other players out of the market and controlled the quantum of development in a manner that ensured the demand-supply situation was always skewed.

According to market trackers, lease rentals in Kolkata and its outskirts range from Rs 50/sq ft to Rs 350/sq ft with the average rate hovering around Rs 200. While vanilla stores in Garia go for Rs 50/sq ft, Forum Courtyard – the premium mall on Elgin Road – commands Rs 350/sq ft. The average rate in Mumbai and Delhi is around Rs 350 with some prime properties in the commercial capital going for as high as Rs 1,000/sq ft.

RP-Sanjeev Goenka Group general manager Sanjeev Mehra, who was earlier at the helm of South City Mall, pointed out that while real estate prices recorded a cyclical trend of hitting the roof and then bottoming out, it strangely remained firm all through in Kolkata. And this, he felt, affected growth of retail in the city and elsewhere in the region.

“We do not have enough brands in the city. We need to be more open and attract more brands to differentiate between malls,” he remarked.

Multiplex chain Cinepolis has been scouting for properties in the entire region but has had difficulty finding them. The company’s business development head, Bimal Sharma, felt the east would lose out if it did not get its real estate strategy straight.

Prasad agreed: “Retail growth in Kolkata is far behind other metros. The market exists but there is no real estate for retailers to move in. The city needs at least 20 more malls to be on a par with other cities in offering customers a proper retail experience. There is a crying need for quality retail space.”

Apparel firm Turtle’s chief strategist L Sridhar, too, felt the realty rates in Kolkata were a tad too high. “Compared to Hyderabad, real estate prices are at least 20% more in Kolkata. The only reason we will continue to invest here is because the growth prospect is very high in Kolkata,” he said.

A realty major acknowledged that prices in Kolkata were unnaturally high due to supply constraint but denied it was due to cartel. “There is collaboration in the market but I don’t think there is cartel formation. Rarely will you see five real estate players coming together to do a high-ticket project like it happens in Kolkata,” he said, referring to South City project on Anwar Shah Road and Urbana in Chowbagha.

The situation is further compounded by a high 95% occupancy at malls in the city. With only RPG Galleria under construction at present, the supply crunch situation will persist.

Source: http://timesofindia.indiatimes.com/city/kolkata/Retail-realty-commands-unreal-prices/articleshow/11454679.cms