INDIAN REALTY GEARS UP FOR A PROSPEROUS NAVRATRA

The Indian subcontinent is a mix of cultures and throughout the entire calendar year, one or the other festival is being celebrated across the breadth of this country. The fervour is set on another tone from the month of March with the celebration of Holi which is very soon followed by the beginning of a new financial year. Everyone looks out for new opportunities to start new investments with the onset of a fresh financial year. Then after comes the festival of Navaratras which is considered by majority as the most auspicious time to invest and invest big in entities like automobiles, real estate, etc. Apparently, it becomes obvious for business houses to come out with something new or innovative in the market

The real estate fraternity in the country has been very forthcoming with respect to providing lucrative deals during festive season, especially during the Navratras. Navratras are one of the most highly anticipated and regarded festivals in India. People in the country have a tendency of waiting for these days every year to make important purchasing decisions, property buying being one of them. Buyers generally wait out the time before festivals, especially the Navratras, to make a property purchase as it is considered an extremely auspicious time for buying any new asset. During times like these, developers also try to lure the interested buyers by offering various schemes and offers on their one or more projects. In this way, the demand for real estate is met very well during these occasions.

Like the last year, this year too, developers are gearing up to come out with something for their customers. NCR realty major Ajnara India Ltd. is all set to for the upcoming days wherein it has offered a variety of goodies on it’s project Ajnara Le Garden coming up in Greater Noida West. In light to the offerings, Ashok Gupta, CMD, Ajnara India Ltd. says, “Navratras are considered to be an auspicious time for investing. And the best investment in today's time is property as the returns are higher and any scheme is a big draw for any buyer. We at Ajnara are providing a variety of offers to the buyers who book a property during this period at Ajnara Le Garden where buyers would be offered free club membership and a free covered car parking. The buyer would also be exempted from first transfer fees and will have the lease rent waived off along with dual meter and electrification charges.”

Another leading developer, Ansal Housing would be offering bumper discounts this time around where in one can avail these at all of their completed projects which are ready to move in. Kushagr Ansal, Director, Ansal Housing elaborated further saying “A lot of our projects in various cities, such as the Ansal Palm Court in Jhansi, Ansal Town in Meerut, Ansal Town in Indore, Ansal Town in Meerut, etc. are all complete and ready to move in and the same would be covered under this scheme. The booking amount has been reduced to Rs. 1 lakh only and on the spot loan facility has been made available. We are also providing 50% discount on the processing for home loans.” Premium offers have also been put out by Saya Group who have listed lucrative deals for their project in Indirapuram. Explaining further, Vikas Bhasin, MD, Saya Group said, “We have decided to allot a free car parking to every new buyer during the 9 days of Navratras at our project Saya Gold Avenue in Indirapuram. Along with it, every buyer would be provided with free Gold Club membership, however, this would exclude the monthly maintenance charges for the club. This the benefits are well visible to customers in the form of direct benefits and the trust factor can be up kept.”

One of the fast moving real estate developers in the region, JM Housing has made changes in their payment plan to offer some instant relief to buyers making purchases during Navratras. Commenting on the same, Rupesh Gupta, Director, JM Housing said, “We have changed the payment plan to 30:70 on our project JM Florence located in Greater Noida West. Earlier, a buyer had to pay 40% of the amount upfront but now the same would be 30% which means a reduction of 10% on the actual amount. This is sure to ease out the stress on the pockets of the buyers which will mean they can arrange rest of the funds in due course as the project approaches completion.” Another project in the region by the name of One Leaf Troy is also offering goodies on it’s project. Rahul Chamola, MD, One Leaf Group explained, “We are offering 5 star split air conditioners equivalent to the number of bedrooms in the flats where a 2 BHK flat will come with 2 pre fitted air conditioners and a 3 BHK flat will come with 3 pre fitted air conditioners. In case a buyer does not want to go with these pre fitted appliances, he can avail of discount of Rs. 45,000 times the number of air conditioners they forego in the final amount for their purchase.”

Taking a overall view of the situation, Kamal Batra, Chairman, Buniyad Group said, “The demand for real estate has been on a rise recently with positive sentiments floating in the market due to decreasing inflation along with policies and reforms being pushed along with. Passing of RERA from both the houses of the parliament was a big plus for the sector. Looking at the way demand is shaping up in the sector, it is very important to offer something new to the customers especially when they are anticipating the most. The way developers have come out with offers this Navratras, it would be hard for people to stay away from these lucrative deals.”

LIC to auction Unitech's land in Noida to recover Rs 184cr

NEW DELHI: Insurance major LIC will next month auction Unitech's 14 lakh sq meter plot of land in Noida if the real estate company does not repay the entire dues of Rs 184 crore before that date.

Unitech had borrowed money from LIC by mortgaging the plot but with the real estate company defaulting on repayments, Life Insurance Corporation of India (LIC) issued an e-auction notice for sale of the plot on May 6 at a reserve price of Rs 2,660.56 crore.

When contacted, a Unitech spokesperson said the company would repay the outstanding amount to LIC soon.

"We are in the process of making the payment for outstanding shortly. We are close to finalising the funding for the same," the spokesperson said.

Sources said Unitech has recently raised Rs 85 crore from Piramal Group and is in talks with two private equity players to raise more funds for the development of this land parcel in Noida and to repay the LIC loan.

The notice for "public sale of immovable property mortgaged to the corporation under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002" was issued yesterday.

In the notice, LIC said that the outstanding dues for recovery of which property are being sold is Rs 184.12 crore as on March 31, 2016 plus interest from April 1, 2016 and other costs, charges and incidental expenses.

The property consisting of land measuring 14,07,327.68 square meter is located in Noida, Uttar Pradesh. This land is on lease of 90 years from Noida Authority by a lease deed executed on December 28, 2006 in favour of Unitech Hi-Tech Developers Ltd.

"This is also a notice to the above named borrower/ mortgagor (Unitech and Unitech Hi-Tech Developers) about holding of e-auction sale on the above mentioned date if the dues are not repaid in full before the date of e-auction," the notice said.

LIC said that it would be the responsibility of the interested bidders to inspect and satisfy themselves about the property before submission of the bid.

Unitech's consolidated net debt as of 31 December 2015 stood at Rs 6,802.05 crore. Net debt to equity ratio was 0.64.

The company's share price closed at Rs 5.04 apiece on the BSE, up 1.82 per cent.

SOURCE: ETRealty.com

AFTER RERA, RBI TO BOOST REAL ESTATE SECTOR

In a much anticipated move, the apex bank cut down on the already existing REPO Rate of 6.75% by 25 basis points to 6.50%. However, there was an additional surprise sprung in the form of increased Reverse REPO of 6%. Earlier the Policy Rate Corridor stood at +/- 100 bps but now has been reduced to +/- 50 bps as a result of decreased Marginal Standing Facility rate by 75 bps. So, as of now, the key rates stand as REPO rate at 6.5%, Reverse REPO at 6.0%, CRR at 4.0% and SLR at 21.5%. This clearly shows that the RBI has provided further cushion to the banks in order to decrease their lending rates which could not be achieved on notable terms in the previous financial year even after multiple rate cuts.  

Industry Reacts

Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz

The move to cut down on the basis points is deemed to be very well received in the real estate sector. Last year as well, there were substantial rate reductions but the benefits were not passed on to the end users in full capacity. But, with more rate cut announced in the first policy review of the financial year shows that the market is improving and finally the financial institutions can now finally start to pass on the benefits to the end users.

Sudeep Agrawal, MD, Shri Group

RERA was already doing rounds in the real estate sector and now again with the Reserve Bank cutting down on the repo rates will only make the situation better than before. Cutting down on the repo rates is sure allow banks more margin towards cutting down on the lending rates, hence increasing the purchasing power of the common man. The Union Budget had key features for affordable housing and this policy review is sure to add more feathers to the affordable housing segment.

Vikas Bhasin, MD, Saya Group

RBI has not only cut down on the REPO rates but also increased the Reverse REPO rates which mean a win win situation for the banks. Increased Reverse REPO will allow banks to keep their money with the Reserve Bank at higher rates than before. One must not forget that the Policy Rate Corridor has been reduced from 100 bps to 50 bps which will now mean that the key rates will differ by 0.5% at all times. The basic benefit being, banks will borrow from RBI at a lower rate courtesy the decreased REPO rate and will lend to RBI at a higher rate thus increasing their profits on a twofold basis. This will help lower the prevalent lending rates in the market.

Ashok Gupta, CMD, Ajnara India Ltd.

The RBI has given positive signs wherein the CPI inflation is assumed to come down to 5% and the GDP is expected to rise to 7.6% by the end of the current fiscal year. These show that the market is on an improvement spree, however, against common speculation of 50 bps, the key rate was reduced by only 25 bps citing reasons of heightened global financial volatility which is a controlled measure making sure that the domestic market does not suffer. With so many infrastructure developments lined up, one cannot take the risk of fluctuating domestic market.

Rupesh Gupta, Director, JM Housing

With the REPO rates being cut and Reverse REPO being increased, banks would be forced to cut on the lending rates. Reduced lending rates are destined to bring in positive sentiments in the market which will induce increased investments in the real estate sectors. Additional sectors and industries are also to benefit which will add to the benefits being directly received because the realty sector is in itself an end user for over 30 allied industries.

Rakesh Yadav, Chairman, Antriksh India

The projections are bright for the upcoming months and with this reduction, people are sure to be entrusted more towards investing in the market. There might not be direct benefits visible at the very moment but definitely investments are sure to increase fund flow in the market which in some way will pump more funds in the real estate sector as well. This will ensure better sentiments and if the banks decide on further cutting on the lending rates, things will only get better for the sector.

Panama papers leak: DLF, Indiabulls Real Estate promoters say they are clean

MUMBAI | DELHI: The names of promoters of real estate developers Indiabulls Real Estate and DLF figure in the 11 lakh documents leaked from Panama-headquartered law firm Mossack Fonseca, alongside other Indians who have formed offshore entities in tax havens around the world.

Responding to ET's queries on the development, Sameer Gehlaut, promoter of realty developer Indiabulls Real Estate, said all relevant disclosures related to overseas investments through his family trust and other companies have been made to the authorities.

"I have made overseas investments after paying full taxes in India, each and every overseas remittance is disclosed to RBI on the date it has been made," Gehlaut said.

According to Gehlaut, he receives dividends worth Rs 350-450 crore every year and has been investing his monies in his Indian family trust, SG Family Trust (Sameer Gehlaut Family Trust), for further investments in its wholly owned subsidiary in India, Callies Infrastructure Pvt Ltd (India).

Further, Callies Infrastructure has capitalized its wholly owned subsidiary in Bahamas, Clivedale Overseas Ltd (Bahamas) that is engaged in property development business in London through its arms under the brand Clivedale, the response added. In 2014, Indiabulls Real Estate acquired a building 22 Hanover Square in London's Mayfair locality for Rs 1,550 crore.

"The overseas business of construction and property development being carried out by SG Family Trust and Indiabulls Real Estate is strictly as per the RBI policy framework for overseas direct nvesitments," Gehlaut added.

The documents leaked from Mossack Fonseca reportedly show that even before acquiring 22 Hanover Square, Sameer Gehlaut had acquired multiple other properties through SG Family Trust which are being built as residential and hotel projects.

Rajeev Talwar, CEO of DLF, said the media report is aimed at distorting public perception which is extremely dear and important to all corporate and promoter families.

"We strongly emphasise that all remittances were made after the government introduced the LRS scheme. Each year, the remittances were below the limit prescribed by RBI," he said. "All remittances were made from banks which were authorised dealers. Therefore, there is no question of wrong doing. No companies were set up by promoter group in BVI. All existing company shares were subscribed to as permitted by the government of India. This opportunity was available to every Indian."

He added that each year this was reported to the I-T and also mentioned in company's annual report.

On the promoters of DLF, documents reportedly show that chairman KP Singh had acquired a company in the tax haven British Virgin Islands in 2013. His wife Indira is a shareholder. Mossack Fonseca was the registered agent for offshore firm Willder Ltd that Singh acquired. The law firm had identified KP Singh as a politically exposed individual. The two had remitted funds to acquired Willder between 2010 and 2011and later between 2013 and 2014. The total capital of the company is around Rs 16 crore.

Offshore entities were also set up by KP Singh's son Rajiv Singh, who is DLF's vice-chairman and daughter Pia Singh, who is a nonexecutive member of the board.

Pia Singh, her husband Timmy Sarna, and their two children are shareholders in offshore company Alfa Investments Global that is registered in British Virgin Islands.

SOURCE: ETRealty.com

Maharashtra raises ready reckoner rates 7% from today

Mumbaikars will have to shell out more for the purchase of residential and commercial properties as the Maharashtra government has made moderate increase of 7% in the ready reckoner (RR) rates from April 1. In the rural areas RR rates have been hiked by 8% while 7% in influential areas, 7% in municipal council and nagar panchayat limits, 5% in municipal corporations areas.

At the state level the RR increase comes to an average 7% for 2016-17. The government hopes to mop up about Rs 15,000 crore through the RR rate revision. RR is an annual statement of rates on which the stamps and registration department collects the stamp duty from property buyers.

The state revenue minister Eknath Khadse made announcement in this regard in the state assembly saying that the government took the conscious decision not to increase RR rates steeply considering the slump in the economy and the sluggish mood especially in the realty sector.

This apart, the drought and scarcity conditions in rest of Maharashtra was also another reason for a moderate 7% rise in RR rates. Realty players and members from ruling and opposition parties had also appealed to the government not to have an hefty increase in RR rates.

The government had amended the Bombay Stamp Act and rules last year to introduce RR revision from April 1 instead of January 1 every year. The government had increased RR rates by an average 15% in 2015, 22% in 2014, 27% in 2013, 18% in 2012, 17% in 2011 and 14% in 2010.

SOURCE: Business Standard

REAL ESTATE BILL TO PILE UP DIFFICULTIES FOR THE SECTOR

   Already there has been considerable protest against the inclusion of under construction projects in the Real Estate Bill and very recently a news of projects, even 5 years old being included under this bill is doing the rounds. Now the developers are very disappointed with the news of amendments being made to the bill and a new provision being added to it. Adding impetus to the general thought process, Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz says, “It is not appropriate to include ongoing and previous projects in this bill. Government should understand that the if the project is almost complete and possession has already been offered to a majority of residents, taking the project back on the drawing boards to the regulator and having it registered post the submission of all documents will only delay the proceedings and this will ultimately bear a direct impact on the delivery timeframe of the projects.”

In the current session, the government has worked significantly with all readiness to bring forward this bill and it’s result was the bill being passed from both the houses of the parliament. “The real estate bill was welcomed by all, be it a developer or any person who is remotely associated with the real estate sector but the bill which was brought forward post multiple amendments did have some aspects to it which would make the work of developers more difficult. Now that completed projects would also be included in the bill, it will definitely come forward in the form of delay in the possession of completed projects”, says Vikas Bhasin, MD, Saya Group.

Practically speaking, including ongoing projects and the ones in the timeframe of 5 years from the enactment of the bill would further slow down the rate of work in the sector. Rupesh Gupta, Director, JM Housing says, “The pressure from appointing a regulator within a year to the extent of every state creating it’s own version of the bill is enough to prove that this bill will definitely improve the current scenario in the sector. But, the government should not have overlooked the developers and tried having a look at things from their point of view. Before implementing this amendment in the bill, the government should have incorporated single window clearance and simultaneously fixed timeframes for approvals.” If 50% of any project has been sold out then it will neither be entirely correct to apply it on the remaining 50% of the project nor will it be feasible to apply it on the entire project. “Even after making the bill very balanced, there are still certain provisions which need to be worked upon by the government very minutely. Involvement of  authorities and timeframes for approvals are areas which need to be addressed at the earliest”, concludes Ankit Aggarwal, CMD, Devika Group.

Single Window Clearance for Construction Sites in Delhi

New Delhi: In a significant policy shift in Delhi’s building by-laws, the Union Urban Development Ministry on Wednesday announced “single-window clearance” for construction plans for both residential and commercial properties within a month, while exempting owners of residential plots up to 105 square meters from seeking sanction of building plan. 

“The laws have been made user-friendly through unification and simplification of a host of amendments made over the last three decades and integration of approvals by different agencies into a single platform,” said Urban Development Minister Venkaiah Naidu at a press conference here. “The new process would reduce human interface and enable approvals in just 30 days,” he added. 

For residential plots up to 105 square meters, the owner need not obtain sanction of building plans. “You (owner) can just submit an undertaking intimating about construction along with requisite fees and other documents to start construction,” said Mr. Naidu, while explaining the new amendments. 

Previously, applicants had to go through a cumbersome process to get sanction of building plans as it involved scrutiny and approvals from various government agencies such as the National Monuments Authority, Department of Environment and Heritage Protection, Delhi Fire Services and the Airports Authority of India. 

With the modification of the building by-laws, an applicant can now file one single online application to the concerned urban local body. 

Highlighting another key amendment in the laws, Aishwar Rao, the chief spokesperson of the Ministry, said that payments for obtaining approvals from various departments have also been consolidated in the same online form. “With a click of your mouse, you can make one single payment electronically,” said Mr. Rao. 

The amendments come in the light of the World Bank’s “ease of doing business” ranking of 2015, in which India is at the 130th position. 

A senior official in Urban Development Ministry told The Hindu that a directive came from Prime Minister Narendra Modi’s office asking Mr. Naidu to “simplify” the process of granting permits to new constructions. The final goal, the official said, is to gain the confidence of foreign investors by creating a “smart” urban infrastructure. 

After Delhi, Mr. Naidu said that Mumbai would also unify its building by-laws. “After these two major cities (Delhi and Mumbai) we would ask other cities to follow suit,” he added.