Latest Property News on 'Kolkata'

Joseph Stiglitz for govt role in land acquisition

Kolkata: Nobel laureate in economics Joseph Stiglitz today said that State should have a role to play in acquiring large pieces of land for setting up industry.
“For those who want to acquire large tracts of land from fragmented ownership holdings, it is really a problem and land purchase becomes difficult,” Stiglitz said on the sidelines of a seminar at the Indian Statistical Institute (ISI) here.

The noted economist said this when pointed out that the present West Bengal government’s declared stand was that it would not acquire land for setting up industry.

He said that land acquisition was really a sensitive issue across the world.

Citing the instance of Columbia University in the US, where he is a professor, Stiglitz said that a huge amount of land was needed for expansion of the ‘varsity.

He said that the university was unable to acquire land on its own and the expansion process was halted. Ultimately, the local city government intervened arguing that it was in the interest of the people that the university expanded.
“Only then that the land acquisition process became a success,” he said.
Source: http://www.financialexpress.com/news/joseph-stiglitz-for-govt-role-in-land-acquisition/898560

Shrachi group fails to deliver on Kolkata luxury apartment project

The recent fire in the AMRI Hospital, which led to the loss of many lives, isn’t the only instance of one of its promoters, the Shrachi group, being under the scanner. A prominent Kolkata-based group, it has vast interests in real estate and hospitality. Take the instance of its ‘Rosedale’ condominiums, spread over 16 acres in Kolkata’s satellite township, New Town. The $100 million (over Rs 500 crore at current exchange rate) complex was proposed to be a showpiece real estate complex, promising swanky luxury apartments in six ‘ground-plus-25′ skyscrapers. The open-to-terrace apartments were priced between Rs 50 lakh and 1 crore each. Nearly four years down the line, the project remains a story of shattered dreams and broken promises, reports Business Line.

According to a petition filed (case no 240 of 2010) before the National Consumer Disputes Redressal Commission, New Delhi, 59 buyers, mostly NRIs, who were provisionally allotted apartments, allege non-delivery of the apartments well beyond the scheduled time frame of 36 months ending in 2010. It is alleged that the developer has “unilaterally” flouted agreements, made several amendments to the master plan of the project, leading to even violation of fire safety norms and reduction of common service areas for which payments were already received.

Home buyers say Rosedale built an additional 10-storey tower — having 80-100 apartments — in the promised common area, whose “interest has already been sold to the initial buyers” of the project. The petition also accuses the promoter of “premature money claims by furnishing false certificates.” Some of the petitioners claimed to have already paid 90 per cent of the committed sum. According to the report of a Calcutta High Court approved valuer and licensed building surveyor, Monojit De, appointed by the petitioners to look into the alleged anomalies; common areas and promised amenities to the buyers that include quarters for domestic helps, swimming pools and tennis courts were either reduced in size or removed.

There was an “infringement of the mandatory car parking space” rule. There were also deviations in the quality of promised building materials. The petition has demanded a total compensation claim of over Rs 17 crore.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17730&cat_id=1

DLF to Sell Hotel subsidiary to Kolkata Based Square Four Housing

DLF Ltd, the country’s largest real estate company, is set to sell its hotel subsidiary to Kolkata-based Square Four Housing & Infrastructure Private Ltd for Rs550 crore, its third divestment in the last three month as it disposes non-core assets to pare its Rs22,500 crore debt. As reported by ET last week, the Delhi-based real estate company had acquired Hilton International’s 26% stake in DLF Hotels & Hospitality forRs120 crore and is now the sole owner of the hotels unit which own land parcels in four cities – Kolkata, Chennai, Mysore and Thiruvananthapuram.

This subsidiary’s assets do not include Aman Resorts, another non-core asset that DLF has been trying to sell for a long time. Two persons with direct knowledge of the transaction said DLF has signed a non-disclosure agreement with Square Four and expects to conclude the deal by third week of January 2012. The stake purchase from Hilton was a precursor to a total selloff, they said. “We are in discussion with DLF and cannot comment until we achieve the financial closure of the deal,” said Square Four Housing chairman and managing director Ganesh Singhania. The DLF spokesperson declined to comment.

DLF Hotels would be the third big-ticket asset sale by the realty giant in the current fiscal. Earlier this month, it completed the sale of its IT Park in Noida to IDFC for Rs512 crore. A couple of months ago, DLF divested a 28-acre land parcel in Gurgaon for Rs400 crore. One of the persons familiar with the development said Square Four has already paid a part of the financial consideration and expects to complete the deal by third week of January. It is in discussions with financial institutions to raise resources to fund the transaction, said this person.

Square Four will develop the Kolkata and Chennai land parcels for hotel-cum-commercial-cum-residential projects while the land in the other two centres – Mysore and Thiruvananthapuram – will be developed as pure luxury hotels. “Square Four has also started discussions with leading hospitality chains such as Four Seasons and Radisson and Hilton, among others, to form strategic alliances for developing all four hotel properties,” said the person familiar with the development. He added that the firm is also in discussions with some leading Mumbai-based real estate players for developing the residential and commercial parts of the Kolkata and Chennai projects. Singhania said his Square Four group specialises in buying distressed assets and turning them around.

The group has a net worth of Rs500 crore and owns an asset reconstruction company called Square Four Asset and Management Reconstruction Company. DLF is attempting to sell its IT SEZ in Pune, which it owns in partnership with Akruti City, as well as Aman Resorts, the super luxury hospitality chain it bought in 2007 for $400 million.

Decision on FDI in Multi Brand Retail Next Week

The Government’s long awaited ‘big ticket’ reform — of allowing foreign direct investment (FDI) in multi brand retail — is likely to see the light of day soon, with the Union Cabinet likely to take up the issue next week. The case for increasing the current 51 per cent cap on FDI in single-brand retail is also likely to be considered at the same time, Business Line reported, citing sources. Allowing FDI in multi-brand retail would open the door for giant multinational retail chains such as Walmart to enter the Indian retail sector. Currently, Walmart has a joint venture with Bharti for wholesale ‘cash-and-carry’ stores.

The move had been delayed by strong political opposition from some quarters, which feared that the entry of foreign retail chains would kill the small Indian retailer. According to sources, the plan is to issue the necessary orders within a month of the approval by the Cabinet. “So now you can expect a New Year gift for the foreign investors”, a person familiar with the development said. But the “gift” is likely to come with several strings attached. Sources confirmed that the Cabinet nod was likely to come with several modifications to the recommendations made by the Committee of Secretaries (CoS) on the subject.

For example, the final guidelines for the FDI may ask for 30 per cent mandatory sourcing from small and medium enterprises (SMEs). The definition of the SMEs may include domestic and global firms. It may be recalled that the CoS, in its meeting on July 22, said, “The condition that 30 per cent of value of manufactured items may be procured from the domestic SME sector, was not agreed to.” The Government is also likely to stipulate that in the case of agricultural produce, 60 per cent of the sourcing should be from low-income, resource-poor farmers.

Such farmers will be defined as those who are having less than 10 hectares of land. The final guidelines may retain the recommendation of the COS regarding self-certification by the company in regard to 50 per cent of the total FDI proposed by an investor in back-end infrastructure, but with a condition that the Government may go for surprise checks.
The final proposal is also likely to give some detail about the definition of ‘back-end infrastructure.’ It may say that cost of land and the building for a retail store will not be taken as investment in the back end infrastructure. Earlier, it was not clear what could be considered as back-end infrastructure.

To soothe the concerns of the electronics sector, the final guidelines may impose a condition such as, “for the purpose of investment in the back end infrastructure, any investment made in the processing, manufacturing or distribution would be counted.”
A senior Government official said that an increased FDI limit in single-brand retail may come with some riders. One of these could be mandatory 30 per cent sourcing from small and medium enterprises, as soon as the FDI limit exceeds 51 per cent. The Government allowed FDI in single-brand retail in February 2006. Till May this year, a total of $92.1 million was approved, but actual inflow has been just $69.26 million.

Govt to Make Draft Real Estate Regulation Bill Public

The government will make public the draft Real Estate Regulation and Development Bill, 2011 for comments from stakeholders this week and may subsequently introduce it in the forthcoming winter session of Parliament. Aimed at protecting customers from fly-by-night developers, the draft Bill will seek to bring more transparency in the realty sector.

“We will upload the draft Bill on the Ministry’s website on November 11 for suggestions by public. After considering those suggestions, we are hopeful of introducing the bill during the winter session of Parliament,” Union Housing and Urban Poverty Alleviation Minister Kumari Selja said. While unveiling the new logo and brand identity of Confederation of Real Estate Developers’ Associations of India (CREDAI), she said the draft Bill has taken into account of the concerns raised by the builder community.

“The bill will be under the public domain for few days… We are also prepared to look into the suggestion of single window clearance system for realty projects wherever we can,” Selja said. Last week, she had said the Bill would protect the interest of consumers without hurting the real estate sector. “It will be a balanced kind of Bill, as on one hand we do not want consumers should be put into any difficulty (in real estate buying) and on the other hand, we definitely do not want to throttle the real estate industry. So it will be a balanced (one),” the minister had said.

Real estate developers led by CREDAI has been opposing the constitution of a regulatory body to supervise sector and said that it would become a “breeding ground for corruption” when implemented. They apprehended that the objective of the draft Bill was limited to just consumer protection, leaving other important issues such as long delay in approval and rising cost of material.
According to the draft, developers will need to make public disclosures related to land title, project completion date and other relevant scheme details on the website of the proposed regulatory authority. The disclosures must be made before launching a project, so that consumers are not taken for a ride at a later stage and the promoters will also have to register themselves with the regulatory authority.

Ambuja Realty Acquires RMZ’s Ecospace Business Park for Rs 300cr

In one of the largest real estate deals in Kolkata, Ambuja Realty has acquired the RMZ’s Ecospace Business Park in New Town in Rajarhat for little over Rs 300 crore. The acquisition will provide Ambuja Realy a large chunk of premium commercial property adjacent to its existing one, Ambuja Realty Campus. The project, which is 80% complete, is spread over about 9 lakh square feet constructed area. International property consultant Jones Lang LaSalle facilitated the deal. JLL said the deal signified the importance of Rajarhat in Kolkata’s business landscape.

Ambuja Realty chairman Harshavardhan Neotia said that RMZ and Ambuja Realty had got two adjacent plots of land in Rajarhat. “Even our architects and structural consultants are the same. Therefore, we decided to call the entire property Ecospace Business Park. Their end is called the RMZ campus and ours is called the Ambuja Realty Campus. Therefore, the acquisition will only help Ambuja Realty in consolidating its position in the upcoming area.”

The opportunity to acquire the company emerged as RMZ and AIG, who were managing the RMZ Campus, wanted to exit, he said. “Given that we are already housed at Ecospace and have part of the campus, we responded affirmatively to acquiring the other part, as well,” he said. JLL said with the acquisition, Ecospace became one of the largest non-SEZ office spaces in Kolkata, offering nearly 19 lakh square feet of ultra-modern and environmentally sustainable business space. According to a person close to the deal, the cost of the realty space after completion of the project would be around Rs 4,000 per sq feet, which is very competitive.

Rajarhat area has emerged as one of the most attractive area in Kolkata as it is close to the airport. Besides, a large chunk of land is available for the development. JLL MD (Kolkata) Mayank Saksena said Rajarhat is Kolkata’s brightest rising star in terms of real estate growth, with both the commercial and residential segments holding immense possibilities for developers, occupiers and real estate investors alike.

PE Firm Fire Capital Forays into Real Estate, Plans to Invest 6000cr in 4 Years

Fire Capital Fund, India’s first real estate-focused private equity fund, has made a first-of-its-kind debut into real estate development with the launch of Astrum Homes Pvt Ltd, a real estate company targeting middle and upper income customers in tier II and III cities. This newly launched FDI-backed realty firm, which is already in partnership with leading North American investment and real estate firms, including the Miami-based Related Group, plans to invest Rs 6,000 crore in the next four years on developing 32,000 homes pan-India.

Speaking exclusively to Realty Plus, Om Chaudhary, chairman, Astrum Homes Pvt Ltd, informed, “FIRE Capital Fund is entering a new arena of home development with the sole motto of nurturing our vision — ‘Quality Living For All’. India would require at least 30 million homes by 2012, now look at the shortage of residential units. We are just looking at the amount of demand and supply gap in tier II and III cities. Our aim is to cater quality housing to the middle income segment in these cities, maintaining transparency.”

The company announced the launch of two township projects in Amritsar and Panipat. While Amritsar project, spread across 32 acres, has an investment outlay of approximately Rs 300 crore and built up area of 12 lakh sq ft, Panipat project will have apartments totaling approximately eight lakh sq ft with an investment of Rs 200 crore. Both the townships would feature international architecture and modern amenities.

According to an Astrum Homes spokesperson, “Initially, we are focusing to deliver better homes to middle-income buyers. Amritsar and Panipat projects will offer high-rise apartments spread across an area of 1,200-1,800 sq ft, which will be priced at Rs 2,000 per/sq ft, with added amenities like club house, restaurant, school, shopping centre, sports complex, parking and 70 per cent of green space. We have a total development target of 40 million sq ft in the next five years.”

Fire Capital is also pioneering ‘Satellite Urban Village’ concept to provide quality housing in Indian cities. The company is investing around Rs 700 crore to develop large format integrated townships spread across 1,300 acres in Jaipur, Ahmedabad, Indore, Nagpur, Bengaluru and Chennai.
Jorge M Perez, vice chairman & board of director, said, “For the next two decades, there is zero doubt about the booming real estate real demand in tier-II cities in India. We have a clear vision of creating affordable housing in India.”

Headed by Om Chaudhary, chairman and CEO, Astrum Homes, its board of directors include Jorge Perez, founder & chairman of The Related Group; Michael B Targoff, chief executive officer, Loral Space and Communications Inc; Jon Halpern, managing partner & CEO of Halpern Real Estate Venture; and James J Grogan, COO of International Capital Investment Company.

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.

Kolkata Based South City Projects to Foray into Sri Lanka Real Estate Market

South City Projects (Kolkata) Ltd — a consortium of six Kolkata-based real estate companies — will enter the real estate sector in Sri Lanka. The company, through its Sri Lankan subsidiary Indocean Developers Pvt Ltd, will invest nearly $100 million (approximately Rs 450 crore) to set up a residential-cum-commercial project in Colombo. The mixed-use project will be funded through a combination of debt and equity.

South City Projects is a consortium of Merlin Group, Shrachi, Rameswara Group, Emami, JB Group and Sureka Group. It has an eponymous project — a shopping mall cum residential — in South Kolkata, Bel Air and Gardens and an IT and logistics hub called Pinnacle. Indocean Developers is a subsidiary of South City formed under the Board of Investments of Colombo. “We are open to expansion in other markets including India. Plan are afoot for projects in southern parts of India too,” said Anil Khetawat, director, Indocean Developers Pvt Ltd.

Spread over 2 acres, the Sri Lankan project — South City’s first overseas project — will consist of high-end retail stores, restaurants, spas and residential apartments. Although the company is yet to decide on the name of the project, it will, however, use the South City brand for it. Land has been obtained at $35 million (over Rs 150 crore) from the Sri Lankan Government. “We are finalising the details of project and will start work on designing in another six to seven months,” Khetawat said. The company is expecting a turnover of nearly $400 million (Rs 1,800 crore) from the project, he added.