Cement prices drop in Delhi-NCR after builders allege cartelization

About four cement firms in the region have cut prices by about 17-19% following allegations of artificial price hikes, according to Credai-NCR

New Delhi : Cement manufacturers have started slashing prices in the Delhi NCR region this week as demand slips and pressure from builders grows. These companies have been facing allegations of price fixing from builders who had taken the matter to the Competition Commission of India (CCI).

About four cement companies in the Delhi NCR region have cut prices by about 17-19% following allegations of artificial price hikes and a cartel-like behaviour, said Manoj Gaur, president, Confederation of Real Estate Developers Associations of India (Credai)-NCR.

The companies have started taking orders at a price of Rs.245-250 per bag from this week, lower by about Rs.50, said Gaur. He did not disclose the names of the companies which have cut prices.

Two dealers from the NCR region, who did not want to be named, said there has been a price cut in the range of Rs.5-15 per bag in the last two to three weeks as demand continues to remain weak. Dealer prices differ from bulk prices at which cement makers supply to builders.

Deepak Kapoor, President(Western UP), CREDAI adds, "cartelization cannot be accepted. NCR is the largest real estate market with lacs of people buying their homes every year. Such activities would have adversely affected the whole market. This wasn't acceptable."

Ashok Gupta, CMD, Ajnara India Ltd, a prominent developer in NCR said, "we are happy to see a united step and finally getting the favourable result. We should think progressively to benefit the realty sector. "

Rajesh Goyal, MD, RG Group, summed up saying, "the market is already reeling under heavy pressure. The allied industry players should think alike and for the benefit of all and not just few". 

“Cement manufacturers had to cut prices as they were not sustainable. We expect further correction due to weak demand. With the festive season, labour shortage may lead to lower construction activity,” said one of the two dealers mentioned above.

According to these dealers, the price of a cement bag in Delhi is Rs.285 compared to Rs.300 per bag two to three weeks back.

Last month, builders in and around Delhi said they would stop buying cement from UltraTech Cement Ltd and Lafarge India Pvt. Ltd, which they alleged had pushed up prices artificially.

Mukesh Khurrana, MD, Rudra Group, a upcoming name in NCR realty said, " despite a low demand the cement prices have been continuously increasing. It is difficult to cope up with such steep price hikes."

Despite low demand, cement prices in recent months have risen 20-40% in major Indian cities, according to Kushagr Ansal, whole time Director, Ansal Housing.

Vikas Bhasin, Chairman, Saya Homes, added that realty sector must take steps towards betterment and it is good that CREDAI took the final step which otherwise would have harmed the interest of everyone. 

The real estate lobby, which has 220 members, had sent a petition to the CCI on 5 October against the price hikes.

The NCR is India’s largest real estate market, consuming about 12-15 million tonnes of cement a year. Companies including JK Lakshmi Cement Ltd, Shree Cement Ltd, UltraTech and Lafarge are among the cement manufacturers with a major presence in the north Indian market.

An email query sent on Thursday evening to JK Lakshmi, UltraTech and Lafarge remained unanswered. Concerned officials at Shree Cement could not be reached for comments.

Commercial space demand up in CBD

Many areas in the CBD are witnessing strong demand from the ITITeS, e-commerce and BFSI sectors as well as from start-ups.

The Central Business District (CBD) is the heart of the city. It is the original commercial and retail high street nodal hub around which the city's growth fans out. In Bengaluru, the CBD comprises commercial hubs that have developed within a three-km radius of M G Road. The localities in this region include M G Road, Lavelle Road, Langford Road, Ulsoor Road, Residency Road, Richmond Road, Infantry Road, Cunningham Road, Brigade Road, Museum Road and Vittal Mallya Road.

Shrinivas Rao, CEO Asia Pacific, Vestian Global Workplace Services, elaborates on the client profile and the commercial market scenario here. "The CBD primarily houses international and domestic banks, and corporate sales marketing offices of manufacturing, BFSI and ITITeS firms. Additionally, a majority of the professional services firms and government consulates are located in this micro-market". Vestian Global's research analysis reveals that currently 12.30 million sqft of commercial space is operational in this micro-market, while 1.75 million sqft is under construction and set to be operational by 2018.

Strong commercial growth

According to research by Cushman and Wakefield, the commercial sector in Bengaluru has witnessed strong growth over the last few quarters with office absorption doubling in the first half of 2015. The first half of 2015 witnessed total net absorption of 6.90 million sqft, nearly 2.50 times the net absorption noted in the same period in 2014. The CBD has a total inventory of 10 million sqft as of June 30, 2015, with Grade-A accounting for a 33 percent share of this inventory. In the first half of 2015, the CBD off-CBD locations witnessed all-grades leasing activity of 2.19 lakh sqft, up from all-grades leasing activity of 2.12 lakh sqft in the same period last year.

Naveen Nandwani, Managing Director Bengaluru, Cushman and Wakefield, explains, "The CBD off-CBD locations house major banks, financial institutions, insurance companies, a few corporates and ITITeS companies. However, the limited availability of Grade-A offices has led to an increasing occupier preference for suburban and peripheral office markets. Although sustained demand from the IT sector for large Grade-A spaces has spurred commercial development in and around the Outer Ring Road (ORR) and Whitefield, a number of smaller occupiers may prefer to be located in CBD on account of the availability of smaller spaces in non-premium developments at reasonable rentals."

Space uptake and supply

According to Vestian's research analysis for August 2015, the sector-wise occupancy in the CBD region is skewed towards the ITITeS sector. ITITeS notches up 30 percent of space uptake in the CBD. Following close behind are the ecommerce, retail and healthcare sectors, taking up around 29 percent of commercial space. Manufacturing and professional services each occupy around 15 percent, with BFSI space occupancy at around 11 percent.

Naveen says, "As of the second quarter of 2015, over eight lakh sqft of new supply is under development in the CBD off-CBD micro-market, of which, close to 60 percent is Grade-A space. The weighted average asking rental in the micro-market ranges between Rs 65-100 per sqft per month. This, coupled with its central location and good connectivity from the suburbs, attracts occupier interest."

Market outlook

According to Shrinivas Rao, the CBD region is projected to witness nearly 1.75 million sqft of fresh supply within the next three years. "Around 46 percent of the present supply in this micro-market comprises Grade-A developments. Our analysis projects that demand from e-commerce and ITITeS firms is expected to keep the vacancy levels at 9-10 percent regardless of the new influx of supply in Grade-A space. Warm shell rentals in Grade-A buildings are expected to increase on account of limited operational stock. Strong demand from ITITeS, BFSI and start-ups is estimated to push Grade-A rentals in key areas of the CBD," he says.

Source: Magic Bricks

THE TWO SIDES OF INDIAN REAL ESTATE COIN

     Indian real estate sector has always been known for its infamous deeds primarily because of the unorganised process that it follows which is still persisting. But at the same time, it is able to contribute gigantically towards India’s Gross Domestic Product (GDP) and employment opportunities. With the absence of a regulatory body, single window clearance system and industry status; still this sector has been consistent in serving the dynamic needs of the domestic as well as international traffic. But during this process, filtration of what is wrong and what is right is not possible due to which there are still a lot of questions that remain answered.

Parmar case: To learn or let go

In a recent shock to the entire nation, Late Mr. SurajParmarwas forced to end his life as he could not further bear the brunt of the corruption existing in the sector. Due to this incident, leading private body of the sector; CREDAI remained shut on 13^th October, 2015. Looking at the flipside, there have been numerous cases, where not only an individual but entire families have lost hope and committed suicide because of not getting their homes on time and fed up of paying rent and EMIs together. Who will address their issues?? “There is no denying that real estate sector has still not been able to earn trust of the public. This trust can be attained once there is proper registration process, monitoring of transactions and continuous supervision of the dealings. But the SurajParmar case has come out as an eye opener for everyone associated to this sector. The government should now focus upon making sure that single window clearance system and a regulator at the centre should become operational, so as to suffice everyone’s needs and curb the evils pertaining in this sector”, explains Mr. Rakesh Yadav, MD, Antriksh Group. Adding to this fact, Mr. Vivek Gupta, Director, Vardhman Estate & Developers (P) Ltd. states “At present, providing the real estate sector with an industry status is need of the hour so as to allow ease of doing business. Everyone must understand the fact that this sector is an end user of products created by over 300 industries in the country. Thus, simplifying the work process here will lead to an overall harmony for both, developers and customers. At the same time, timely approvals can become possible only with single window clearance system which will ultimately allow developers to offer possession on time and reduce unnecessary pressure over the customers”.

Real estate bill in winter session brings hope

Another disturbing feature of Indian real estate sector has been delays in delivery, not providing customers with refund for cancellations and changes in project specifications without prior notice to the customers. In this sector, the buyer agreements are tend to be one-sided with a bias towards the builder. Although, with the real estate bill hopeful to be tabled this winter session, if passed, it will greatly assist in bringing justice to the buyers and promote fair dealings in the future. “This bill will ensure that the transactions incurring in this line of business between buyers and developers are fair and transparent. Also, this bill will make sure that every state sets up a regulatory authority. With this authority, the developers will have to compulsorily upload all project related documents such as site plan, layout plan etc. on the authority’s website. Prior to selling the units, every builder will first have to register the project with RERA; and even the brokers will have to register themselves, thus enhancing the transparency in the sector”, enlightens Mr. VikasBhasin, MD, SayaGroup. Also agrees Mr. Amit Chaudhary, MD of Rhythm Ccounty, as he says “Apart from getting themselves registered with RERA, if developers plan a structural change, it won’t be possible until the developer has attained the consent of two-third of the buyers. This will promote discipline in the sector and remaining fixed to the initial designs. Another prominent feature of this bill is the clause of maintaining 50 percent of the funds in an escrow account so as to curb developers to divert funds to other projects. Hence, this bill will not only confirm transparency but discipline as well which suits the public”.  If real estate bill gets a go ahead this winter session, this sector which has lost its lustre will start coming back on track, and gradually gain trust and credibility.

What lies ahead

There is pressure on the customers as well as the developers. One is under pressure to deliver quality projects on time and other is under monetary pressure and facing the delays in delivery. Developers have a justification of not delivering on time and the customers are trapped equally. There is now need of an immediate government attention towards this sector if the dreams for Housing for all, smart cities and AMRUT have to become true. “Without real estate bill and single window clearance system in place, how can we provide 2 crore homes within 7 years? Further, even if this feat is achieved on time, who is there to answer the grievances of people of those segments who will own a home for the very first time in life? These questions and problems will remain unsolved till the time government does not take up these matters seriously and execute the real estate bill and single window clearance system across the country”, avers Mr. Sudeep Agrawal, MD, Shri Group.

Thus, Indian real estate sector has always faced trouble but is not much behind in creating trouble for the people as well. Every coin has two sides and thus, people of this sector must not ignore the fact that real estate in our country has always been in news due to some negativities but at the same time; even we need to excuse these negativities pertaining to this sector, as not all is in the hands of the developers fraternity and the government must intervene in these matters more seriously. “We cannot take credit away from the real estate sector for how it has transformed this country and is still doing so. Because of this sector several other industries are dependent. This sector is a massive contributor to employment and the economy in general, but again the multiplier effect that this sector produces for other industries can’t be measured. Why it is still ignored then? Recently we had CREDAI protesting on behalf of over 11,500 developers, but why do we need reasons to raise our voice? Isn’t our work already visible to the nation? We hope that the government now takes up certain disturbing matters seriously and allows this sector to grow peacefully”, questions and concludes Mr. Ankit Aggarwal, CMD, Devika Group.

$30b Malaysian offer for smart city projects

The 100 smart cities bandwagon is getting heavier with Malaysia as the latest bidder. A top Malaysian government-run and private companies consortium, Construction Industry Development Board (CIDB), proposed investment worth $30 billion in re-developing the New Delhi railway station and adjoining areas into a mini smart city and turn the temple town of Garhmukteshwar in Uttar Pradesh, into a green city.

A 30-member strong CIDB-led conglomeration offered to develop the New Delhi railway station and Garhmukteshwar, about 100 km from the national capital, as two separate theme-based cities.

The proposal came at a meeting between the Malaysian works minister Haji Fadillah Bin Haji Yusof and Union urban development minister M Venkaiah Naidu on Thursday.

A group of 12 Malay-sian companies have mooted pumping in $24 billion to re-develop the railway station and adjoining areas covering 1,000 hectares currently with the Indian Railways, urban development ministry and the municipal corporation of Delhi (MCD).

The CIDB consortium has also proposed to evolve Garhmukteshwar in Hapur district of Uttar Pradesh, off-national highway 24, as a green city that includes housing and cleaning of Ganga riverfront with an investment of $4 billion.

CIDB includes the Malaysian Highways Authority, Pembinan, Exim Bank and private companies like IJM Construction, UEM, Selia, Amona, Sunway Constructions, KLCC Projects, Scomi International and Veritas Architects as partners.

State-run National Buildings Construction Corporation (NBCC) is likely to be considered a partner with the Malaysian consortium.

The urban development minister will brief UP chief minister Akhilesh Yadav and Delhi CM Arvind Kejriwal separately on the proposed project. NBCC will ask both states to name two separate state-run firms to join the international consortium.

Developing the New Delhi railway station area into a mini smart city and Garhmukteshwar as green city are part of the plan to carve out 100 such urban enclaves based on different themes. Meanwhile, China’s Sany with a market capitalisation of $21 billion, has committed $ 3 billion investments in Indian urban smart cities projects with its own manufacturing facilities.

Malaysia is latest in the long list of nations and global majors that have committed to partner India for development of smart cities. Japan was first on that list when it offered to develop Varanasi as heritage city using its Kyoto experience. In January this year, USTDA concluded technical and financial deals to develop Allahabad, Ajmer and Vishakapatnam as smart cities.

Germany and India have set up a six-member committee to evaluate the possibility of Berlin’s proposal to develop smart cities. French president Francois Hollande too has committed 3 billion euros to develop three smart cities, including Pondicherry and Nagpur.

But the biggest commitment has been made by China, which offered to invest over $100 billion in both smart cities and high-speed trains over five years.

Green Court issues Warrant against two Developers

The National Green Tribunal (NGT) has issued a bailable warrant against two Noida-based construction companies, Assotech Realty Pvt Ltd and Panchsheel Greens 2, for flouting its earlier directive regarding misuse of groundwater at construction sites. 

On August 9, 2015, the NGT in a notice directed 14 realtors, including Assotech Realty Pvt Ltd and Panchsheel Greens 2 to reply to allegations of misuse of groundwater within 15 days. The two builders failed to follow the directive, the tribunal stated.

“Issue a bailable warrant against the managing director/managing partner of noticee number 4 (Assotech Realty Pvt Ltd) and 10 (Panchsheel Greens 2), Greater Noida west for the sum of `20,000 to the satisfaction of the arresting officer, in exercise of our powers and in terms of the provision of Section 19 (4) (a) of the National Green Tribunal Act, 2010, for securing his presence before us on the next date of hearing,” the order said.

The green court pulled up the two builders for failing to be present before the tribunal.

After inspecting construction sites, an NGT-appointed local commission said in his report that 14 realtors in Noida, Greater Noida, Gurgaon, Faridabad and Delhi were found misusing groundwater. A Gurgaon-based construction agency also said that it did not get the local commission’s report and notices.

“Noticees (realtors) may obtain copies of the report of the local commissioner from the registry and obtain copies of the inspection reports from the websites of the respective authorities. They should respond to it before the next date of hearing,” said the order.

The next date of hearing has been scheduled on November 19, 2015.

“I know the local commissioner had conducted inspections on our site. But we are adhering to all laid-down norms and not extracting groundwater. I will look at the NGT order,” said Neeraj Gulati, managing director of Assotech Realty Pvt Ltd.

The tribunal has also directed the Uttar Pradesh Pollution Control Board (UPPCB) to upload the report filed by the local commissioner and the notice copy on its website.

“I will comment on the issue once the NGT order reaches me officially,” said Anuj Chaudhary, director of Panchsheel Greens 2.

On August 19, 2013, the NGT had appointed a team of local commissioners to carry out inspections at construction sites to check whether realtors were adhering to environmental norms. This came after a Greater Noida resident, Vikrant Tongad, filed a petition alleging that groundwater was being used for construction purposes. Following the petition, the NGT on January 11, 2013, banned extraction of groundwater by builders for all purposes.

Source: ETRealty.com

Thousands of Developer Protests: will they be heard?

New Delhi: Tuesday, the 13th, got marked by a very rare incident. Developers from all across the nation went on protest condemning the death of their fellow developer from Thane, Mumbai. The day saw thousands of developer standing on the roads with their employees and supporters and doing a silent march. Many of them wore black ribbons on their arms to convey the message of 'Black Day' in Indian Real estate. This sight was unique. For the 1st time people who were always being protested were protesting for their own rights, the same way. 

There are few questions which have now arose: why are they protesting in a country where they play the most important role in country's economy? 

Will there be an actual result out of all this or was it just a fluke?

And finally, how long will they stand united? 

If we dissect the situation, then one can see that the developers have actually been equal sufferer in the hands of governments policies & regulations. If we look at NCR market, recently there was a huge crisis due to Okhla Bird Sanctuary. Over 60-70% of the projects in the area were badly hit and the work got delayed. Who should be blamed for this? The land was legally auctioned and bought from an authorised body, the mentioned clearances were taken and the construction was duly being done. The result: the buyers protested for delay in possession & the developer whose projects were ready couldn't give possession, it was a MESS! Who suffered? It started with developers and finally the buyers. They both suffered equally and very badly. The buyers had all rights to protest, shout slogans and they did. The developers had no rights so he remained calm. Can India shine in a situation where the business houses have to work in utter confusion?

This also cannot be denied, that many developers never had any intention to deliver because of multiple reasons and they must have got a breathing time due to the crisis but what about the majority who have been working and delivering projects? 

Saying this, the fraternity also suffers from a perennial disease. Lack of unity. Never you will see a developer whole heartedly supporting other developer or their projects. And this is quite obvious due to the tough competition the market offers. Various bodies like CREDAI have always tried to unite developers and bring them on a single platform to discuss and share ideas and also their problems. 

If we look at the recent CREDAI protest carefully, the biggest achievement of Tuesday's protest was the United stand which every developer showed. It was the 1st time when publicly they protested against the wrong doings which has been prevalent in the system. Finally they were letting people know that they equally suffer because of the same system. Unity finally brought strength. 

Now the final question lies with the government: will they be heard?

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Noida-Greater Noida Expressway has emerged as a major residential destination

In recent years, Noida-Greater Noida Expressway has emerged as a major residential destination. Here's a look at the pros and cons of the area.

Noida-Greater Noida Expressway is 24.53 km long. It begins from Amity Crossing in Noida and goes up to Pari Chowk in Greater Noida. The key residential sectors along the expressway are 82, 83, 92, 93, 99, 105, 108, 135, 137, 141, 144 and 153. In recent years, these sectors have emerged as prime destination where end users and investors have bought in large numbers.

Connectivity advantage

The biggest advantage of living along this expressway is that you have quick access to south Delhi. People living in sectors like 99, 100, 105 and 108 can reach south Delhi via Kalindi Kunj or Ashram in barely 15 minutes. East Delhi colonies like Mayur Vihar are also easily accessible from here.

Infrastructure development

The most important infrastructure development that will have a big impact on the lives of people living in this area is the expansion of Metro network from City Centre in Noida to Sector 62, Sector 71, and then to Greater Noida. Once the Metro link is complete, the time required for travelling to central parts of Delhi like Connaught Place will be greatly reduced.

Many of the forthcoming developments of this region like the Taj Economic Zone, international airport, and an aviation hub will also be close by.

Well suited for end-users

Noida-Greater Noida Expressway area is well suited for end users.

"The cost of flats here is much lower compared to south Delhi while the travel time to those areas is barely 15 minutes," says Bibhash Surya, head of Sri Sai Dreamlands, a Noida-based real estate consultancy.

All the key elements of infrastructure like roads, electricity and sewerage are already in place in these sectors.

As for social infrastructure, Jaypee Hospital, JS Hospital, and Yatharth Wellness are in the vicinity. Among schools, the key ones located in and around this area are DPS, Lotus Valley, Mayur Public, Somerville International, Jaypee, and so on. Great India Place (GIP) in Noida is the closest mall while DLF's Mall of India will be ready soon. Ansal Plaza Mall is near Pari Chowk in Greater Noida.

Gautama Buddha University in Greater Noida is also nearby. Several other colleges and institutions have come up in Greater Noida, transforming it into an education hub.

Among the other attractions of this area, Okhla Bird Sanctuary is close by while a budgetary allocation for developing Night Safari in Greater Noida has already been made. Early possession in projects is another advantage of buying a flat in this area. "Possession will be offered in many projects here within the next one and a half years," Surya says.

"The existence of such payment plans puts the responsibility on the developer to complete his project on time and hand over possession to the buyer. Unless he does so, he does not get the balance cost of the apartment from the buyer." Surya says.

Noida-Greater Noida Expressway

Office hubs and attractive possession linked payment plans have enhanced the appeal of the expressway A 2-BHK is available for Rs 15,000 per month here, at the lower end, and for Rs 18,000-20,000 at the higher end, while a 3-BHK comes for Rs 22,000-35,000 per month.  A big attraction of living along the Noida-Greater Noida Expressway is that sectors like 125, 126, 127, 132 135, 136, 142, 144, and 163 have developed as office hubs. For people living in this area with offices in any of these sectors, travel time will be minimal.

Many developers are offering attractive possession-linked plans. The positive aspect of these plans is that only a certain percentage of the cost of the apartment, about 5-25%, has to be paid to the builder in advance. The rest is to be paid only after possession.

Competitive prices

The current price of apartments in this area ranges from Rs 3,700 per sq ft to Rs 11,000 per sq ft. Mid-level apartments can be purchased for Rs 5,500-8,000 per square foot. "In sectors like 137, where possession has not been given, you can buy an apartment for Rs 5,500 per sq ft. But in sectors like 99 and 100, where possession was given earlier, rates have climbed to Rs 7, 5008,000 per sq ft," Surya says.

The price of plots ranges from Rs 30,000 per square metre to Rs 90,000 per square metre, depending on the size of the plot and the area in which it is situated. In some areas, prices can also range as high as Rs 90,000 to 1.75 lakh per metre. Prices have been largely stagnant in this area over the past one year owing to the slowdown in the real estate market.

Compared to 2010, however, apartment prices have shot up from Rs 3,000 per sq ft to Rs 5,500 per sq ft. Investors with a long-term horizon of 4-5 years can earn handsome returns by investing in this fast-developing area.

SOURCE: magicbricks.com