Aug-Sep 2013 Issue, Property & Wealth Magazine by Property & Wealth

contents

COVER STORY Real Estate - a topsy turvey way out of turbulence The industry requires support of policy makers to achieve its goals

Over 700 Indian businesspersons descended at the Russian capital to discuss issues pertaining to real estate. Like India, Russia too has become an emerging market. The CREDAI conference shared Moscow as a success story for favorable real investment destination.

propertywise newsdesk hotspots

19 23

Will Rupee Depreciation Bring NRI Real Estate Investors Home? 32 Home Loan

How To Spot Bad Construction In Buildings 36 NAR-INDIA Convention held in New Delhi 38 How Road Connectivity Leads To Real Estate Growth 40 NAR India Conventions: Why It Is Important For Brokers? 42 Real Estate Industry Outlook and Credit Rating Perspective in Real Estate 44 On Indians Investing In Properties Abroad 46 Reliance Com-municates with its Property 48 Anandgarh, it would have been, now its New Chandigarh 50 Care Rates Imperial Estate 52

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

contents

prosperityseek be a prosperity seeker

Get back to basics?

quotemagic 58

quotemagic 66

eyecatchers 59

Positive Living With

Homes of the Rich..

Ravi Nanda

Amazing Buildings

planetsavers 68

quotemagic 63

bookshelf 69

Commercial Vaastu

softcorner 72

CONTRIBUTORS AND ASSOCIATES Publisher & Editor-in-Chief Jasmeet Dhamija jasmeet@propertyandwealth.in Editor Charu RS charu@propertyandwealth.in Feature Writers Satpal Kataria, K.Singh, Rupinder PD, Sheetal Singh Art Director & Visualiser Rajesh Kumar Graphics Team Antima, Arun, Sunil Advertisement & Sales Director Marketing: Sandeep Kapoor (M) 9818510511, sandeep@propertyandwealth.in Sales & Subscription Ajay Gupta (M) 9216841278 Photography Rohit Bhatia Pre Press Team: Gopal Production Team: Vikas, Vijay Advisory Board Harpreet Pooja & Associates Architects Rajiv Gupta & Associates Chartered Accountant Vikas Chatrath, Advocate Printed & Published by Jasmeet Singh at Plot No. 437-A, Industrial Area Phase-2, Chandigarh. Owned by Jasmeet Singh, 220, Sector 19-A, Chandigarh & Printed at Savitar Press, Plot No. 820, Ind. Area Ph-2, Chandigarh. Print Production

info@ideaprintcity.com

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

3rd Year of Publication ......

To order PDF / Online edition of any of the old issues .. write an email to archives@propertyandwealth.in

about this issue ‘Realty for the brave – surviving against all odds’, the conference theme for 13th NATCON says it all about developers mindset in the prevailing tough conditions for the real estate sector. Our cover story this month takes you to a virtual trip of the conference. 5th NAR Conclave held at New Delhi in July 1st week was well attended by over 850 delegates from India & Abroad, read a brief roundup of the event on page 38. Will Reliance Com manage what Mahindra & Godrej achieved with their real estate assets?, an exclusive story on Reliance communication hiving off its real estate property into separate company. Anandgarh, it would have been, it’s now New Chandigarh. Notwithstanding the controversy over renaming of Mullanpur

Prosperity seekers this month has Name (Prince of Cambridge), Fame (Milkha Singh), Money (Trave a while, Mukesh Ambani style) & Social Work (Bill & Melinda Gates Foundation), get to realise what really gives you a kick. Property & Wealth now enters in to its 3rd year of publication & will be a bi-monthly magazine through out its VOL 3. We are giving a new bigger size to the magazine and adding more pages by introducing new regular columns as ‘Homes of the rich & famous’, ‘Amazing buildings’, ‘Positive living with Ravi Nanda’. We are extremely relying on our online edition to reach out to more number of rearders. You may browse through online edition at our website: www.propertyandwealth.in or visit us on facebook at www.facebook.com/propertyandwealth

LPA as New Chandigarh, the city is being developed as planned area with Medi City & Edu City being part of it. Read all about New Chandigarh, it’s past, present and the future.

Jasmeet Dhamija Editor-in-Chief

editorial

Loose control... Loose loose lose control!! Remember the popular song from the youth awakening & reforming RANG DE BASANTI! Clearing synthesizing the social reverence with thought proving agendas, the movie’s long-standing question still remains, where is our country heading today? What’s so much gush about the so-called “CONTROL”? As India rolls towards its 66th Independence Day this month, it is worth reviewing what has really changed during this past dramatic decade. From the rupee’s frisking downward trend, deterring investments, souring investor sentiments, to territorial divide, a general sense of women security, to lack of women security blatant showcase of violation of laws, coalgate, 2G & now 3G scams.. it seems we simply have “Loose control” over all!!

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

No wonder P Chidambaram is not promising the quick fixes in the challenged times. Surely the economy needs to be re-build brick by brick. At this time, it is best to believe that there is more to India than just the indices. But, even if on one hand, India is seeing newer states as business opportunities, it’s sowing a seed of national disintegration with every telangana, on the other. With country going to polls in 2014, and more than 50 % of India’s population under the age of 25, there will be a spurt in new voter numbers. Surely the new young India is on a look out of future centric leaders & no old schools. Alas!! there is certainly a need for more Durga Shakti’s in India literary- a socio- eco-political Durga shakti indeed! Charu RS Editor

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Cover Story

13th NATCON “Realty for the brave − Surviving against all odds”

Moscow, Russia 26-28 July 2013

Conference theme The Indian real estate sector today faces liquidity issues due to escalating commodity prices, interest rates and inflation. Bank lending has declined significantly to the sector as there are few lenders willing to take a high-risk bet on high-priced development projects or buyers able to pay high mortgage rates. Higher input costs and significant project delays have

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

caused private equity investment in real estate to drop over the course of last year. Thinking long term, the Indian developer community is giving bigger emphasis to learning best practices, to improve their internal processes and delivery capabilities, which in turn will help investors and lenders to be more receptive to Indian real estate.

Real Estate - a topsy turvey way out of turbulence The industry requires support of policy makers to achieve its goals

ou never want a serious crisis to go waste. As the American Politician, Rahm Emanuel famously said, his quote became the conventional wisdom for crisis management. There is an opportunity in every crisis and its best to not let it go.

“The Indian real estate and construction industry is an integral part of the economy and plays an important role in the development of the country’s infrastructure base and is one of the largest generators of economic activity,” the report by global property consultant CBRE said.

While Indian economy is still trying to fiddle around measures to mitigate possible bubble-dynamics, Indian Real estate scene looks a little different.

According to research conducted, India’s real estate sector is estimated to have a total supply pipeline of close to 3.6 billion sq ft lined up for completion in the year 2013, with about 98% of this being concentrated in the residential segment.

With a revenue generation of worth INR 370,000 crores, the real estate sector has an estimated share of 6.3% in the GDP, and the segment is expected to generate employment for about 7.6 million people in the year 2013 and may reach to 17.6 million by 2025. This is as per the report, ‘Assessing the Economic Impact of India’s Real Estate Sector’, which was released by Minister of Housing and Urban Poverty Alleviation, Girija Vyas at the inaugural session of Natcon 2013 in Moscow, the flagship real estate event of Confederation of Real Estate Developers’ Associations of India (CREDAI).

“Increasing urbanisation, demand for new housing, expanding spread of organised real estate and introduction of new construction technologies are some of the factors that are likely to be a pivot for the growth of real estate construction activity in the country”, CBRE South Asia Chairman and MD, Anshuman Magazine said. Surely the scenario looks promising but the industry does require support and encouragement of policy makers in order to achieve its goals.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Girja Vyas, Minister for Housing and Urban Poverty Alleviation addressing the gathering at Moscow.

String of policy measures to navigate Real Estate sector Govt will stimuli & support: Girija Vyas With Government struggling to revive India’s faltering economy, these are tough times for India & more so for the real estate sector. The turbulence in currency market is a great worry and the international investors are growing restless. In such a scenario, a promise by Vyas for string of policy measures to navigate Indian Real Estate sector through various headwinds is surely a delight.

come forward and participate through capital and technology for up-gradation and creation of affordable stock and helping the government build and inclusive India.” The Indian Real Estate sector is a Rs 2659 billion (USD 45 billion) industry by revenue and the second largest employing sector linked to about 250 ancillary industries like cement, brick and steel through backward and forward linkages. In such a case, a regulatory legislation is what the time demands. The Real Estate Bill has been approved by the cabinet and expected to be introduced in the coming Monsoon session

“We would welcome Russian & international investment in the Indian real estate, especially in view of the current liquidity problems faced by the sector.”- Vyas The Minister for Housing and Urban Poverty Alleviation, Dr.Girija Vyas was addressing the 13th National Convention of Confederation of Real Estate Developers’ Associations of India ( CREDAI) in Moscow.

of Parliament. The bill is being said to instill standardization and professionalization in real estate sector thereby catalyzing domestic and foreign investments. During 2007 to 2012, housing shortfall has declined from 24.8 million to 18.7 million a 25 percent reduction.

Calling for support from the India Inc. the Minister said, “We solicit the reality sector to be brave the current scenario and

In a recent statement, Dr Vyas informed that all the industry’s concerns have been taken into account through wide ranging

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

consultations with all stakeholders and the government is further willing to incorporate industry’s suggestions at the time of examination by standing committee of the Parliament. “The bill would ensure consumer protection and promotion of real estate sector through effective regulation and introduction of speedy mechanism for adjudication of disputes,” said Vyas. On the industry’s equivocal demand for an online single window mechanism, ministry would launch a state-wise campaign to sensitise state governments about need for an affordable housing policy and the need for single window clearance system. The PPP Mode The Minister invited India Inc to partner with government to develop affordable housing. “Our priority is to provide houses to weaker sections of the society and this we are willing to do together with the private sector under the public-private partnership model. There is still a 18.78 million housing shortage in the country, ”, she said. Government Housing schemes: • Jawaharlal Nehru National Urban Renewal Mission (JNNURM) 2005 • Basic Services for the Urban Poor (BSUP); • Integrated Housing and Slum Development Programme ( IHSDP) • Rajiv Awas Yojana (RAY)- for a ‘Slum free India’ and creation of affordable housing. • Affordable Housing in Patrnership Scheme ( AHP) & • Rajiv Rinn Yojana ( RRY) dovetailed with RAY to improve the supply side and demand side incentives for affordable housing for the urban poor.

C Shekar Reddy President, CREDAI Managing Director, CSR Estates Ltd. with the Minister

Audience at the confrence

“Since the launch of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in 2005, 1.6 million housing units for the urban poor has been sanctioned throughout the country with expected approximate flow of Rs 420 billion to social housing, city infrastructure and basic services. Under Rajiv Awas Yojana (RAY), Rajiv Rinn Yojana (RRY) and Affordable Housing in Partnership Scheme (AHP), government will support establishment of 2.5 million housing units,” she stated. The Minister also discussed the various issues with Indian Diaspora in St Petersburg, Russia. She said, “We would welcome Russian petrodollar investment & international investors in the Indian real estate, especially in view of the current liquidity problems faced by the sector.” Anuj Puri, Chairman & Country Head at Jones Lang LaSalle India interacting with the audience during a panel discussion PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Indian realtors trotter the globe- Look for overseas investments 700 Indian Realtors participate at 13th NATCON at Moscow

The CREDAI convention saw stalwarts of the industry confer on topics like learning from international markets, transformation imperatives for braving the current crisis, levering technology for reducing costs to name a few. For the last few years Moscow has been ranked among the five most expensive cities in the world in terms of the cost of housing and rental rates for commercial space. Over 700 Indian businesspersons descended on the Russian capital to discuss issues pertaining to real estate. With India & Russia being seeked as potential investment markets, the event was especially hosted at the Russian capital, sharing its success story on how Moscow has emerged as a favour investment destination. Additionally, Moscow has come to be known as one of the three world leaders in terms of growth in the value of real estate in 2012, its increase amounted to approximately 7%. At the beginning of the financial year, the Russian Prime Minister Dmitry Medvedev said in a statement that the Russian government is considering several options as to how to locate a international financial hub in Moscow. In Asia Pacific, Hong Kong, Japan and Singapore top the list of cities for new retailer entries across Asia Pacific. However, New Delhi achieved more new entries compared to other South East Asian markets such as Bangkok, Kuala Lumpur and Jakarta and has been characterised as a maturing/emerging retail market in Asia-Pacific, similar to the likes of Beijing, Shanghai and Ho Chi Minh City.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

“More importantly, a single window system for all clearances will facilitate quick approvals and speedy execution of projects. We want the government to accord `Industry Status` to the sector” - Lalit Kumar Jain, Chairman, CREDAI on Regulatory legislation “International retailers from across the globe are slowly but surely looking at India as a mature and viable market to expand their business. With Asia Pacific continuing to lure international and domestic retail chains, India is poised to witness a retail revolution. With the government permitting FDI in multi-brand retail, we can expect more international retailers to seriously consider the growing consumer base here.” -Anshuman Magazine, CMD, CBRE South Asia “The no-change approach will lead to an irreversible economic slowdown. This will harm the GDP growth and employment generation. RBI should make a policy to encourage construction of mass housing instead of stifling its growth with credit squeeze and unaffordable rates of interest for both the developer and the buyer”. Brotin Banerjee, MD and CEO, Tata Housing “The poor segments of the society, basically economically weaker sections (EWS) and lower income Group (LIG) have not reaped the benefit of real sector boom. Out of 18.78 million housing shortage in the country, 96% shortage is in the EWS & LIG category and for this we require huge investments. Private sector along with the Government needs to play a crucial role to fill this gap”. - Dr.Girija Vyas, Minister of Housing and Urban Poverty Alleviation, Government of India

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

With market sluggishness tending to aggravate the funding problem for several developers, and the RBI’s liquidity tightening measures this month set to increase borrowing costs, experts say a price cut could be round the corner. In an interview with P&W’s, Charu RS, Lalit Kumar Jain, CMD- Kumar Builders, Chairman-CREDAI, shares his views: Excerpts Lalit Kumar Jain, CMD-Kumar Builders, Chairman-CREDAI P&W: With Rupee falling and the RBI’s status quo policy on rates, what’s in store for a realtor? LJ: Real estate market is under great pressure. It’s not seen as a priority sector in India whereas globally it’s one of the key sectors driving GDP. Looking at current scenario, we need to control costs & also curb this liquidity crunch. P&W: The real estate bill looks more of a consumer centric one, how important it is from a builder’s point of view? LJ: Well, if we talk about legislation, then 90% of regulation today is about delay. The regulatory legislation should bring all the stakeholders involved in its purview…be it be the raw material supplier, or the developer, or the contractor, or the banks, the NOC authorities, so on & so forth. Delay could be at

any level, so if all the stakeholders are brought under the same lens, its only then the bill would serve its purpose. Just taking the consumer’s perspective & not addressing the single window clearance system won’t bring in any transparency. P&W: What is your opinion on Foreign Direct Investment in Real estate? LJ: In spite of the economic uncertainties as well as the skepticism encompassing global markets, the investors are once again warming up to the real estate sector of India. This will bring in some relief to the liquidity crunch. For thorough utilization, we must allow FDI to buy ready to use assets & fund projects.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

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newsdesk REAL ESTATE & INFRASTRUCTURE NEWS

regional

national

international

newsdesk

regional

Property Tax in Punjab

New Collectors Rate

Chandigarh

Effective 3rd August 2013, Chandigarh Administration has hiked collector’s rate by up to 50%. Rates in Rs/ Sq yds)

Collectors Rate Chart Urban Area/Commercial Existing New Rates Industrial Area (Ph 1 & 2) 54912 82368 Iron Market, Timber Market, Transport Area 61776 92664 Shivalik Enclave SCO 240240 360360 Milk Colony Dhanas 240240 360360 Booth Sec 17, 19, 22, 34, 35 308880 463320 Booth Sec 7, 8, 9, 16, 18, 20, 21, 26 247104 370656 Booth in Sec 23, 24, 32, 37, 38 & other sectors 171600 257400 SCO in Sector 17, SCO on Madya Marg, Sector 34, 22 480480 720720 Sector 34-35 Dividing Road 343200 514800 Vacant Converted Plots, Ind Plots 205920 216216 Industrial Area Shops (per sq ft) Ground Floor 19800 20750 First Floor 17500 18480 2nd Floor Urban Area / Residential Residential Housing Board Flats/Industrial , Independent Houses 54912 82368 Shivalik Enclave (Resi) 34320 51480 Milk Colony, Dhanas (Resi) 34320 51480 Rural Area Villages Under MC (Resi Area) 6864 10296 Commercial Area 13728 20592 Villages Under UT Admn Resi Area 4576 6864 Commercial Area 9152 13728

The Punjab Govt. has approved the imposition of Property Tax. The Cabinet also approved to do away with the Zone wise unit value based Property Tax. The Cabinet not only decided to revert back to the old annual value system but also has given a slew of major concessions in that. From the earlier house tax of 15% of the annual rental value for the commercial rented property, the rates have been reduced to 10% and for rental residential Property Tax rates have been brought down from earlier 10% to 7.5% annually. Similarly, for non- rented commercial property the rates have been reduced from earlier 15% to 3% of the annual value. For self occupied houses upto 50 Sq. Yards a consolidated Rs. 50 per year would be charged and for houses between 50 to 100 Sq. Yards the annual consolidated tax of Rs.150/- would be charged. For self occupied house having area between 100 to 500 square yards, the property tax @ 0.5% of the Annual Value and for Self Occupied Residential above 500 square yards, a tax @ 1% of the Annual Value would be charged. For vacant plots and un-utilized buildings and plots the Property tax would be @ 0.20% of the Annual Value. Besides, all religious institutions, Gau Shallas, Care Centre for Stray Animals and Charitable Institutions besides Freedom Fighters and people living below the poverty line have been totally exempted from property tax. To promote education in the state, all educational Institutions which were not even covered under Charitable Institutions have now been provided 50% rebate on the Property Tax .

forthcoming events Mega Property Expo Venue: Hotel Shivalik View Date: 17-18th Aug 2013 20

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Chandigarh

NOIDA

Times Property Exp Venue: Noida Exhibition Centre Date: 13-14-15 Sep. 2013

newsdesk

national

DLF Aman Resorts sale in trouble Gurgaon

A crucial piece in DLF debt reduction strategy, DLF has walked out of an exclusive pact to negotiate sale of its luxury hotel chain Aman Resorts with Indonesian hotelier Adrian Zecha. Both had set June 2013 as the deadline to conclude the 1600 crore deal that was agreed upon last year. DLF is now in talks with several private equity investors as well as international hotel operators for the sale of Aman Resorts.

GPA Okay for Property Transaction New Delhi

The Delhi government has issued a new notification to allow registration of properties through General Power of Attorney (GPA). The move comes over two months after the Revenue department was pulled up by the Delhi High Court for banning registration of any sale deed for immovable property through a GPA by having “misconstrued” an earlier Supreme Court order.

spouse, son, daughter, brother, sister or any other relative or person of trust to manage his property or empowering him/them to execute any further deed of transfer, including conveyance, sale, gift deed on behalf of the registered owner.”

Mumbai Flat for 21 Cr Mumbai

A 10th-floor, sea-facing flat of the marquee Samudra Mahal in Worli sold at the rate of Rs 1.23 lakh per square foot, the highest in the country. Leading glassware company Borosil bought the 1,706 sq ft, three-bedroom apartment for Rs 21 crore. Flat 310 has a carpet area of 1,706 sq ft and a built-up area of 2,625 sq ft, with servant quarters. Amenities in the 28-storey building, home to corporate czars, industrialists and even members of royal families, include a swimming pool, health club, children’s play area and a garden. Industry experts said the transaction is

a one-off and does not reflect general market sentiments. “Apartments in such landmark buildings like Samudra Mahal and Palazzo will continue to fetch premium rates because of their location, profile of residents and upkeep,’’ said Nikhil Bhatia, head (Western region), CBRE, global property consultants.

Online Property Business Growing Bangalore

According to experts tracking the realty sector, sites such as Magicbricks. com, 99acres.com, Makaan.com, IndiaProperty.com and CommonFloor. com are fast becoming the choice of consumers looking for renting a property, as well as for developers. “The online real estate market is yet to reach an inflection point as seen in the travel or e-commerce sector. However, with the penetration of internet more and more consumers in the urban areas have started using this medium as the first point of search for all their real estate needs. Currently, the size of the property portal market is around Rs 250 crore going by the topline of some of the listed portals in the country. This market is expected to grow at a growth of 50-100 per cent in the coming years, mainly on the back of increased focus on this medium of communication by buyers as well as developers. This model also helps in faster decision-making for buyers.

The government clarified: “There is nothing in existing provisions of law that prevents the registered property owner holding registered and valid deed of transfer, like sale deed, gift deed, partition deed, relinquishment/release deed, from executing general power of attorney/ special power of attorney in favour of their

forthcoming events Times Property Expo Venue: Hotel Shangri La Lower Parel Date: 30-31 Aug, 1st Sep 2013

Mumbai

India GRI 2013 Venue: The Taj Mahal Palace Hotel Date: 3-4 October 2013 PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

newsdesk RAK Free Trade Zone – UAE UAE

RAK Free Trade Zone, UAE is offering warehousing units of 150 to 416 m², suitable for the storage of goods, light manufacturing and assembly and available for lease on a year-round or limited time basis at very reasonable costs. Warehouses are located at two locations: Industrial Park (Hulaylah Island in the vicinity of Saqr Port) and Technology Park (Al Jazeera Al Hamra with easy access to RAK airport). Basic infrastructure (road connection, light power supply of 15 to 60 kW, water/gas supply) is in place. Enjoy zero taxation and 100% repatriation besides high trade facilities.

international

for investors and traders who want to approach the rapidly growing Chinese market. Expo Build China is organised by UBM Sinoexpo* and supported by the Architectural Society of China and the China Institute of Interior Design. A great variety of high-tech building materials, innovative technologies and designs will be showcased at Expo Build China from 31st March - 3rd April 2014 at theShanghai New International Expo Centre. As part of the international hospitality show - the HDD Expo* - it is estimated that Expo Build China will attract the participation of over 500 exhibitors and 50,000 visitors.

Boomtime in US Housing US

Expo Build China 2014 China

As one of the largest premium comprehensive building trade shows in China, Expo Build China(www.expobuild. com), has built up its reputation through 22 years of experience in the building industry, as well as serving as the gateway

Boomtime is back! U.S. house price rises are accelerating, consumer confidence is at a five-year high, construction activity is picking up, and foreclosures and delinquency rates are falling. All 20 U.S. major cities registered strong year-on-year house prices increases in March 2013. Pheonix recorded the highest annual house price increase, of 22.4%, followed by San Francisco (22.2%), Las Vegas (20.6%), Atlanta (19.1%) and Detroit (18.6%). The Federal Housing Finance Agency (FHFA)’s house price indices were also encouraging.

Singapore Tightens Norms Singapore

Another round of tighter property measures had been put in place by Singapore, which has been the seventh time since 2011. The new measures will avoid a more serious correction in prices, especially at a time of low interest rates and the current market trends. “The new property measures will ensure that housing will remain affordable to Singaporeans,” notes National Development Minister Khaw Boon Wan as he estimates the completion of private and public housing that would add some 200,000 units in the medium term.

Indians Investing in Dubai Indians are top foreign investors in Dubai’s real estate market, with transactions of over Rs 132.6 billion made by them during the first half of 2013, according to an official report. Dubai’s Land Department announced the statistics based on its semi-annual report that revealed a significant increase in funds invested in the market, reaching Rs 877.5 billion.

forthcoming events Home Buyer & Property Invester Show Venue: Melbourne Convention & Exh. Centre Date: 23-25 August 2013 22

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Melbourne

London

The Property Investor Show Venue: ExCel, Royal Victoria Dock Date: 11-12th Oct 2013

CHANDIGARH CAPITAL REGION PROPERTY HOT SPOTS ZIRAKPUR R ZONE 1 ZIRAKPUR R ZONE 2 MULLANPUR - NEW CHANDIGARH KANSAL AEROCITY MIXED LAND USE & INDUSTRIAL SECTORS 82, 66, 66A, 66B LANDRAN - BANUR ROAD (RIGHT SIDE) LANDRAN - BANUR ROAD (LEFT SIDE) KHARAR LANDRAN - ROAD BALONGI - KHARAR ROAD

FOCUS THIS MONT H MIXED LAND USE & INDUSTRIAL SECTORS 82, 66, 66A, 66B

Disclaimer: Map is not to scale and purely for illustrative purpose. Accuracy of the map is not guaranteed.

IT City JLPL Industrial Plots

IT City

Falcon View

Bestech Square

GURUDWARA SINGH SHAHEEDAN

TRIBUNE CHOWK

Signature Towers

TO DELHI

TO PATIALA

*Map not to scale

HOT SPOT IN FOCUS

200 ft. International Airport Road

Disclaimer: Map is not to scale and purely for illustrative purpose. Accuracy of the map is not guaranteed.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

HOT SPOT IN FOCUS - MIXED LAND USE & INDUSTRIAL SECTORS 82, 66, 66A, 66B

Janta Industrial

JLPL Falcon View

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Location: Sector 66-A, Near International Airport, Mohali Highlights: Excellent Location on 200â&#x20AC;&#x2122; Airport Express Highway with 17 ACRES of Lush Green Park Options: 3BHK (2480 SqFt), 4BHK (3007 SqFt) Flats. @ INR 3,790/- per sqft.

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Bestech Square Sector 66 Mohali

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Location: Sector 66, Mohali (adjoining Chandigarh) Highlights: Most Prime Location in Mohali adjoining Chandigarh Options: Office Spaces 2BHK & 3BHK Flats

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Janta Twin Towers

Location: Sector 66A Mohali Highlights:City-within-a-city concept, which shall comprise of built up IT offices, BPO/ Institutional space, residential units, hotels, premium clubhouse etc Options: Industrial Plots, Office Spaces, Residential Apartments

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Location: Sector 66-A, SAS Nagar(Mohali), Highlights: The ultimate office spaces with futuristic designs, state-of-the-art facilities and relaxing environment strike the right balance between modernity and functionality Options: Office Spaces

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DISCLAIMER: Features, information & Budget Planner given above are indicative only. Please contact respective builder for more specific & accurate information. Property & Wealth is not responsible for any decisions taken through use of above information.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

WEEKEND/HOLIDAY HOMES

Amravati Hills

DLF Samavana

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Zigma Wealth: 8146992437

Pine Wood Resorts

Hill Farms

Location: Dagshai Hills Highlights: Situated at height of 5500 sq feet. its un spoilt nature at its best with Villas, plots, 5 star resorts. Options: Luxurious independent villas, residential plots

Budget Planner

90 100 150 >200

` in Lakh

Location: Dharampur Sapatu Road 2 kms from Hotel Victoria Intercontinental Highlights: Panoramic View of the valley. Non Himachalis can buy in their own name. Specially imported pre fabricated apartments. Options: 1BHK/2BHK on 400 sq yard Plot

Budget Planner

90 100 150 >200

Sales Organisers/Dealers: Call 9872635220 to Advertise in this space

Mega Marketing: 9815740230

Kaisville

Pine Wood Cottages

Location: Kais Village, Kullu Highlights: First of its kind group housing in HP, Unique terraced landscaping all around. Options: Exclusive low rise designer apartments and Luxurious villas

Budget Planner

90 100 150 >200

SS Associates: 9876500036

` in Lakh

Location: Solan Simla Old Road, Kumar hatti Highlights: Beautiful fully furnished apartment With un spoilt view of the mountains. An ideal hill farm house. Options: 2BHK and 3 BHK

Budget Planner

90 100 150 >200

` in Lakh

Call 9815601347

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Zigma Wealth Corporate Office:-

81469-92437, 98156-01347

PRICE WATCH - CHANDIGARH NCR Sr.

Project

Category

Unit Size

Sushma Elite Cross

3 BHK

1685-1825

Sushma Green Vista

2 BHK

1276

Sushma Crescent

3/4 BHK

1690-2380

Sushma Chandigarh Grande

3/4 BHK

1885-2250

Escon Arena

2/3/4 BHK

1385-2195

ATS Golf Meadows

3/4 BHK

1350-2950

IREO Fiveriver

2/3/4 BHK

1300-2200

DLF Valley

3 BHK Ind. Floors

1450-1550

JLPL Falcon View

3BHK + Serv, 4 BHK+S

2480-3007

Wave Garden

2/3/4 BHK

1380, 1885, 1990

Ansal API

3 BHK

1695-1800

Sandwoods Opulencia

3BHK + Serv, 4 BHK+S

1950-2600

Nirwana Greens

1/2/3/4 BHK

880,1350, 1810, 3270

Maple Apartments

3BHK

1816-2060

Omaxe Service Suites

5 Star Service Aptments

480, 720, 960, 1440

Ireo Rise

2/3 BHK

1,23,31,51,11,609

Emaar MGF The Views

2/3 BHK

1350, 1550, 1750

Unitech Gardens

2/3 BHK

1485,1790sqft

Bestech Parkview

2/3 BHK

1395-1850

WWICS Imperial Heights

2/3/4 BHK

1160,1737, 1840

Anmol Homes

3 BHK

1550

VIP Floors

2BHK + Serv Room

1250

Bollywood Floors

3 BHK Ind. Floors

1550

No.

PLOTS Offering Plot Size Rate / sq yards Budget 1 IREO Fiveriver Residential Plots 250-1000 87-325 2 DLF Valley Residential Plots 400-500 40000 3 Emaar MGF Residential Plots 250-500 20000-25000 4 DLF Hyde Park Residential Plots 250-500 35200 5 Unitech Uniworld City Residential Plots 22995-27995 30

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Per sq ft

Budget Bracket

Location

Tentative

in Rs. Lac

Possession Date

3260-3300

50 - 60

Zirakpur

July_14

3300

40 - 45

Zirakpur

July_14

3300

55 - 80

Zirakpur

Dec_15

4150

75 - 95

Zirakpur

Mar_16

3090

40 - 70

Zirakpur

Dec_15

3100

40 - 90

Derabassi

Mar_16

4300

55 - 90

Panchkula

Mar_16

4400

65-70

Panchkula

July_14

3890-4050

100-120

Sector 66-A, Mohali

July_15

4450

60-90

Sector 85, Mohali

July_16

2990

50-55

Sector 115, Mohali

Mar_16

3195

50-55

Sector 110, Mohali

Mar_16

20-100

NH-21, Greater mohali

2900

50-60

Gazipur, Zirakpur

6100

65-85

Mullanpur, New Chandigarh

4000-4200

50-65

Sector 99, Mohali

3800

50-70

Sector 105, Mohali

3195

45-60

Sector 97, Mohali

6495

90-120

Sector 66, Mohali

2800-3150

35-55

Sector 115, Mohali

40-45

Zirakpur

Ready to Move in

30-35

VIP Road, Zirakpur

Ready to Move in

55-60

Sector 113, Mohali

Aug_14

July_14

Disclaimer: Rates mentioned in property watch column are based on inputs collected from active property professionals operating in the area. Please check latest rates with respective builder before making any decision on your purchase.

COURTESY: DNA REALTORS, MAKAAN SEARCH, CHANDIGARH

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Will Rupee Depreciation Bring NRI Real Estate Investors Home? Merely the incremental return of 12.0% owing to exchange rate fluctuation is comparable to the 10-12% of total returns expected by DLD in the near-term from investment in Dubai real estate.

ubai, which is touted to be the most popular and world-class property investment destination in the Middle East, has started to witness a recovery of its property market post the financial crisis. In 2012, real estate prices recovered for the first time, growing by 10% y/y, according to the Dubai Land Development (DLD) authority’s data and as quoted in various regional media. Real estate transactions in Dubai had increased by 8% to Dh154 million in 2012. Not surprisingly, this recovery is backed by huge investments been made by expatriates, particularly from India. Nonresident Indians (NRIs) are comfortably amongst the top five investor communities in the region. With their natural affinity towards India, and against the depreciation of the Indian rupee against the US dollar, could the NRI community’s real estate investment decisions be changing in favour of the Indian market? For Indian real estate, general perception amongst buyers/ investors is that prices have increased dramatically over the last few years. Immediately following the Lehman-collapse period, Indian property prices witnessed significant increases - averaging 40-42% across all major markets (as per Jones Lang LaSalle India’s Real Estate Intelligence Service data - see chart below) Even in cities like Mumbai, where capital values are already high, returns stood at 66% during the same period. As against this, DLD data for Dubai suggests property prices witnessed a 65% slump in the four-year period prior to 2012, thereby justifying the question whether a 10% rally in 2012 is actually all that significant More recently, the Indian rupee (INR) has seen 12.0% depreciation against the US dollar since the start of May till June 2013, thereby forcing its value down against all other currencies pegged to the US dollar - including the UAE Dirham (AED). As a consequence, the Indian rupee has also depreciated against the AED by 12.0% during the same period.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

A simple back of envelope calculation suggests that if a Dubaibased NRI invests AED 10mn in the Indian real estate now (INR/AED at 16.4), and assuming only conservative returns of 15% from Indian real estate in the near-term, the investor could expect repatriated returns of over 27% assuming that Ashutosh Limaye Head – Research & REIS, the INR returns to its preJones Lang LaSalle India May mean of 14.8/AED (see diagram).

Merely the incremental return of 12.0% owing to exchange rate fluctuation is comparable to the 10-12% of total returns expected by DLD in the near-term from investment in Dubai

real estate. Similar incremental returns can be expected from investments made by NRIs from other parts of the Middle-East where the local currency is mostly pegged to the US dollar (see Table 1). Returns from Indian residential market in last four years

Table-1: Incremental FX-returns for investments fromUAE (Dirhams)

12.7%

Saudi Arabia (Riyal)

12.6%

Oman (Rial)

12.0%

Kuwait* (Dinar)

12.2% *Pegged to the USD

sustain NRI interest in Indian property market – including: • The higher economic growth in India • Improving infrastructure and renewed political focus on timelines for new infrastructure initiatives • Rising demand for commercial space in the market (leading to job creation) • Social infrastructure • Price trends. Putting these findings into perspective, the recent fall in the Indian rupee could potentially act as a trigger for the NRI community in the Middle East to switch focus towards properties back in India.

It could be argued that expatriate Indians may be favouring Dubai over Indian real estate on the basis of socio-economic and other factors. According to media sources, Indian investors were buying properties in Dubai as it offers relative political stability, world class infrastructure, tax benefits, attractive prices and geographical proximity. Also, Dubai’s economy has been recovering since last two years, growing by 4.4% and 3.4% in 2012 and 2011, respectively. Table-1: Incremental FX-returns for investments fromUAE (Dirhams)

12.7%

Saudi Arabia (Riyal)

12.6%

Oman (Rial)

12.0%

Kuwait* (Dinar)

12.2% *Pegged to the USD

However, a recent survey conducted by Sumansa Exhibitions, organisers of the successful annual event called the India Property show in UAE, portrays a different picture. The survey possibly reveals that NRIs place a higher intrinsic value on property owned in India over that of property owned in Dubai or elsewhere. Apart from strict visa rules in the Middle East region, there are certain regulatory obstacles in buying a property in the Emirates. These are also other critical factors that can help

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Documen Salaried Customers

SelfProfe

Application form with Photograph duly signed by all applicants

Applicatio Photogra all applica

Identity, Residence and age proof

Identity, R age proof

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PAN Card main appl

Last three Months Salary Slip

Education certificate business e

Form 16/ Income Tax Returns

Last three tax Retur computat

Last Six monthâ&#x20AC;&#x2122;s bank statements

Last three CA-certif balance sh loss accou

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Last Six m statemen

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Note :- The above mentioned list of documents are inclusive and not exhaustive. The Bank / Financial In

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

nts Required for Processing of

Home Loan

-employed essionals

Self-employed Non-professionals

Salaried NRIs

Self-employed NRIs

on form with aph duly signed by ants

Application form with Photograph duly signed by all applicants

Residence and f

Identity, Residence and age proof

Copy of valid passport showing visa stamps

Copy of Passport along with valid visa stamp

PAN Card copy of the main applicant

Copy of valid visa / work/ permit/equivalent document Supporting NRI Status of the Proposed account holder

Trade license or equivalent document

Proof of business existence

Latest contract copy evidencing salary/salary certificate / wage slips

Computation of income, P & L account and Balance Sheet for last three years Certified by the CA/CPA, or Any other relevant authority (or equivalent company accounts)

e year’s income rns with income tion

Business Profile

Overseas bank account Statement

Six months overseas bank account statements and Nre/Nro account

e year’s fied / audited heet and profit & unt

Last three years’ income tax returns with income computation Last three years’ CA-certified / audited balance sheet and profit & loss account Processing fee Cheque

month’s bank nts

Last Six month’s bank statements (Self and business)

ng fee Cheque

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n qualification e and proof of existence

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nstitutions may ask for any additional documents / information on case to case basis at their discretion.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

How To Spot Bad Construction In Buildings

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

w o building collapses h a v e received a great deal of media coverage thus far in 2013: the building collapse in Thane, Mumbai and Savar, Bangladesh. Whereas 74 people lost their lives in the Thane Kishor Pate, CMD – Amit Enterprises building collapse, the Housing Ltd. death toll was more than 700 in the Savar building collapse. In the South Asian cities that are witnessing rapid urbanization, building collapses are a common phenomenon, but these tragedies seem to mostly occur in small buildings belonging to low income and informal and semi-formal neighborhoods. In fact, it is quite possible that the total toll caused by such collapses could be higher compared to the large-scale ones that happen occasionally. These collapses do not necessarily occur because the buildings are illegally constructed. Gaps in the system lead to poor quality of construction. Further, multi-floor structures are constructed by untrained workers without proper engineering knowledge. Often, generic reasons such as use of substandard materials and poor construction are attributed to building collapses without conducting any proper investigations. The aim of this article is to provide some information as to how you can spot bad construction.

defective material can weaken the structure. Defects in construction and use of bad construction material can be spotted by looking for presence of moisture, mold and mildew in buildings. #3: The vertical or horizontal cracks on plastered walls indicate shrinkage and drying and are normal. Cracks that are jagged, resemble stair steps and are at 45 degrees generally point to settling issues and structural movement. These cracks are usually harmless, but can be serious sometimes. A crack that is less than 1/8th of an inch width is usually caused because of stress and is considered to be harmless. However, a crack that is 1/4th of inch or more wide is more serious. In the case of concrete walls, vertical as well as diagonal cracks typically signify foundation movement. If the vertical crack widens at the bottom or top, it may be because of settling or gradual heaving. Stair-step cracks also indicate heaving. Horizontal cracks signify design defects or build up of pressure behind the wall. Horizontal cracks can cause serious problems. Design aspects are compromised and people who do not have adequate technical knowledge related to construction of buildings are frequently entrusted with the multi-floor building projects. Finally, the rising cost of land and building materials drives people, especially those living on low incomes, to seek cheaper options. In Indian cities, this invariably means being at the mercy of fly-by-night developers with no reputations to protect. This is regrettable, because many reputed developers have projects in various price-bands. In other words, a lower price does not have to mean dangerously low construction quality.

#1: Constructing buildings, especially high-rise buildings, without performing proper soil analysis can cause cracks on the structure as well as on the outside pavement. Types of foundation problems can include windows and doors that make noise, jam or separate from frames, cracks that appear near the corners of windows and doors as well as at wall joints, cracks in basement that continue to widen or cause water seepage and leaky roofs. #2: The use of defective building material can cause construction defects. For example, water leakage caused by

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

NAR-INDIA National Realtor Convention held in New Delhi Over 850 delegates from various cities in India & international delegates from the USA, France, Brazil, Singapore, Ire land, Germany etc pariticipated at the convention The Valedictory Address was delivered by Sh. Rehman Khan, Hon’ble Minister for Minority Affairs of Government of India. Prof.Dr.P.S.N.Rao, Founder and Chairman of NAR-INDIA stated that the central theme of this Convention was ‘customer orientation’ of the brokerage business. Lead speakers from across the country spoke to update the participants on the latest developments in customer centric marketing, law, finance, taxation and investment trends. A special session was also held on the role of women in the real estate brokerage business. Sachin Shroff, a well known realtor from Baroda took over as the new President of NAR-INDIA for the year 2013-14, at a function later in the evening.

Lighting of Lamp, Ceremony Inaugural

he National Association of Realtors - India ( NARINDIA ), held its 5th Annual Convention at Hotel Taj Palace, New Delhi on 6 and 7 of July, 2013. NAR-INDIA was established in the year 2007 as the apex national level association for realtors (real estate brokers) in India. In the last 5 years, NAR-INDIA has grown rapidly with member reach across 26 cities with over 25,000 member representatives. The objectives of the association are to bring real estate brokers under a common umbrella, improve awareness and skills and create networking opportunities for improving business. The Inaugural Session was graced by Sh. Arun Kumar Misra, IAS, Secretary of MoHUPA, Government of India who was the Chief Guest. In his address, he stated that real estate brokers were one of the most important stake holders in the industry. He also stated that real estate brokers were included in the Real Estate Regulatory Bill which is likely to be introduced in the Parliament soon. He stated that once this Bill would be enacted, the real estate brokerage business would get streamlined in the country and consumers as well as brokers would be benefitted. 38

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

In all, there were 850 delegates from various cities in India who participated in the Convention. International delegates from the USA, France, Brazil, Singapore, Ireland, Germany, Dubai and several other countries also participated. The participant profile comprised of real estate brokers, developers, IT companies, analysts, housing finance companies, investors and all those who are interested in real estate. NRIs and PIOs will also found this convention very useful. Indian School of Business ( ISB ) from Hyderabad was the Knowledge Partner.

Registration Counter

Valedictory Ceremony

NAR-INDIA is an affiliate of NAR of USA, the worldâ&#x20AC;&#x2122;s largest real estate organisation with over 1.1 million members.

Exhibition Stalls PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

How Road Connectivity Leads To Real Estate Growth There is a higher demand for homes in well-connected areas because they equal an easier, safer, healthier and more cost-effective way of life.

t is generally accepted that improved road connectivity is very important for real estate growth. Most property brokers will make a big case out of an area’s excellent road network and how this improves the appreciation value of a proposed property. But how exactly does this phenomenon work? What is the real ‘connection’ between better roads and better real estate values? Road Connectivity And Quality Of Life Fundamentally, the creation of major roads reduces vehicle travel by cutting down the distance that needs to be traveled between destinations. This has a direct effect on residents in connected areas. With shorter distances, people can comfortably choose to travel public transport or two wheelers, thereby cutting down fuel expenses. This also decreases noise and air pollution in residential areas. Improved road connectivity also improves the overall safety of a neighbourhoods. This is because it becomes easier for emergency services such as fire brigade and ambulances to reach them. Likewise, it is possible for residents to reach hospitals faster - this can sometimes make a difference between life and death. Such an undertaking is also a blessing for employees working in the area’s numerous manufacturing and service industries. In Indian cities, the amount of time it takes to get to and from one’s workplace is an extremely important consideration. By allowing the residents of connected neighbourhoods to reach and return from their workplaces faster, the amount of time they can spend with their families increases significantly. The same paradigm applies to school-going children. The Health ‘Connection’ Reduced travel time also reduces the incidence of various physical ailments as well as stress levels. Longer travel times give rise to higher exposure to traffic pollution and extreme climate. Several serious health problems such as deep vein thrombosis and lung infections have been directly linked to 40

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

extended automobile travel on a regular basis. Similarly, road rage and reckless driving are often the direct result of the traffic congestion caused by insufficient road linkages. Also, as road connectivity improves further, the shorter travel distances can encourage the use of health-positive travel modes such a bicycles.

Anil Pharande, Chairman-Pharande Spaces & Vice President CREDAI Pune Metro

The Personal Finance ‘Connection’ Ever-increasing fuel prices were once a concern only to the middle class - today, they have gone so high that even the more affluent classes are feeling the heat. Electric cars that can meet the travel requirements of a normal-sized family are still a distant dream. We hear that Tata Motors is developing a air-powered car, but it is unlikely that we will see such solutions on the roads for several more years to come. In the mean time, like it or not, we are dependent on fossil fuel-driven vehicles. The magnitude of savings that are possible because of improved road connectivity must not be under-estimated. It is a known fact that the transportation expenses of residents in well-connected areas is lower; a lesser-known fact is that communities which live in areas without good road connectivity often spend between 10-15% of their monthly income on transportation alone. The figures rises proportionately to the number of vehicles the family operates. The Real Estate ‘Connection’ These are the reasons why road connectivity has such a massive impact on real estate prices. Simply put, there is a higher demand for homes in well-connected areas because

they equal an easier, safer, healthier and more cost-effective way of life. In this context, the arrival of the PCMC Spine Road has become a game-changer for the regionâ&#x20AC;&#x2122;s real estate market. For example, the Spine Road is a monumental contribution to the PCMC real estate sector by the Pimpri Chinchwad New Township Development Authority (PCNTDA). This becomes evident when we study the benefits that this massive infrastructure initiative brings with it. The Spine Road is the latest initiative by PCNTDAâ&#x20AC;&#x2122;s focus on location-efficient development. The PCMC Spine Road connects two major highways and provides an access focus for the residential, commercial and industrial centres in the PCMC. As the longest stand-alone

road within the PCNTDA limits, it is a significant step forward in relieving traffic congestion on internal roads. It also features six lanes with cycle tracks, service roads and parking facilities, thereby vastly improving the quality of living for all residents living along its perimeter. The investment value of residential properties along the Spine Road has not been lost on investors, who are now making a beeline to residential developments in Moshi, which is one of the most prominent areas along this road. ABOUT THE AUTHOR: Anil Pharande is Vice President of CREDAI (Pune Metro) and Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in the PCMC area of Pune, India.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

NAR India Conventions: Why It Is Important For Brokers? NAR is certainly a good place to train with the best minds in the industry. One can brush up on existing, albeit somewhat dusty knowledge, besides learning new things.

he National Association of Realtors in India or NAR-INDIA, was established in 2008 as a national level apex organisation of real estate brokers across India. The yearly convention is a platform wherein the common interests of all realtors are the agenda. NAR has 24 member associations at city levels with 1700 companies and roughly 30,000 brokers, making it one of the largest trade union organisations in the country. The NAR India Convention is held annually and is attended by real estate brokers from all over India. Why should a broker attend the NAR India Convention? Apart from an opportunity to be a part of a convention of likeminded people sharing common business interests, attending the NAR Convention offers a plethora of benefits for a broker. • Real estate updates: This is a great opportunity to get industry updates and be up-to-date with all goings on in the real estate world that is worth knowing. Also a good way to understand changing trends in customer demands and share common issues. An authentic knowledge of the latest real estate regulations also can be gathered here. Other updates include news of the resale market, RBI fiscal policy for home loans, financial institution updates, construction industry updates, etc. • Broker industry news: Apart from updates, other news of interest to real estate brokers can be obtained here. Broker achievements, news on training courses, market transactions and other relevant details will be available here. • Economy updates: With changing times even the price specific information in the realtor world is changing. NAR is one place where once can get relevant and authentic updates pertaining to pricing and fees. In this way uniformity in the pricing plateau is reached at the national level too. •

Legal provision updates: The legal regulations and other 42

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

related matters change from time to time. Sometimes it may not be practicable for a broker to get to know all the changes, big or small. One cannot keep guessing without having accurate knowledge that ëyes, there has been a legal update to thisí. So NAR would be one place where a broker can educate himself about the change in laws and amendments in real estate India.

Manan Choksi Regional Director RE/MAX Mumbai, Gujarat & Maharashtra mchoksi@remax.in

• Relevant training sessions: NAR is certainly a good place to train with the best minds in the industry. One can brush up on existing, albeit somewhat dusty knowledge, besides learning new things. There are several training sessions that definitely rejuvenate the mind and make one apply his set skills better. These sessions go a long way in increasing business and thereby increasing the revenue. • Technological updates: Industry specific technological updates in abundance is what a broker can get from here. These will help him to improve his way of working and get things done at a faster pace and more conveniently. • Networking at its best: What better networking opportunity that an industry specific convention where one can meet others from the same field but from different geographic locations. This promotes networking and sharing of contacts full-fledged. For example, inter-city transactions where a broker can share contacts of clients who have moved places with another fellow

broker in the same location as the client. • Healthy relations: Such conventions take away feelings of unhealthy competition among brokers. Realtors treat each other as colleagues, rather than competition, with whom they share common interests and are willing to share tips and ideas. They discuss problem areas and try and solve them proactively. • Time off: This is a good scope to take some time off from the regular work routine and have some good fun. This may be the break that gets one going to achieve more as such a razzmatazz can be rejuvenating and invigorating.

• A win-win situation: In a convention like NAR, the senior brokers share their experience with the juniors and new joinees and earn fame. While the junior less experienced brokers gain knowledge from the experts along with builder tie ups and project updates. So, it is indeed a situation that is beneficial to all. The NAR India Annual Convention is important for any real estate person. It is the perfect scope for learning new things, exchanging information and having a productive time with people from the same industry.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Real Estate Industry Outlook and Credit Rating Perspective in Real Estate GDP growth has bottomed out and gradual recovery is expected most likely from H2FY14. Further, inflation (wholesale price index) is showing signs of cooling down as it stood at 4.70% for the month of May 2013, as compared to 4.89% for the month of April 2013.

eal estate sector plays an important role in the Indian economy; contributing around 6.5% to GDP in the year 2012. The sector is one of the largest employers after agriculture and textile and has numerous allied industries linked with it. Broadly, the sector can be classified into three segments - Residential, Commercial and Retail. In case of residential space, demand is determined by a combination of factors like property prices, interest rates, economic scenario determining the income levels etc whereas the demand for commercial as well as retail space is directly related to the prevailing macroeconomic environment. The real estate in India is highly fragmented, capital intensive in nature and is yet to receive an Industry status. Further, the sector has close linkages with the economy and therefore is highly cyclical in nature. A typical real estate project has a gestation period of three to four years and any adverse change in the macroeconomic factors in the interim period can affect the cash flows of the developer. The real estate sector continued to remain fragile in FY13 as the industry is facing the headwinds such as slow rate of approvals, recent regulatory changes in key micro market â&#x20AC;&#x201C; Mumbai (pertaining to development control rules), inflation impacting cost structure, declining demand due to increasing prices, etc. New investments projects added in the real estate sector across India slumped by about 58% in the financial year ended March 2013 to Rs.43,151 crore from Rs.1,01,368 crore during the same period a year ago, according to Centre for Monitoring Indian Economy (CMIE). Developers are even facing lack of adequate sources for funding the project, which is done through a mix of internal accruals, customer advances, and debt. Funds from internal accruals are likely to be limited in nature in short to medium term due to current sluggish demand 44

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

in real estate sector, impacting the cash flows from ongoing projects. Customer advances, the other source of funding, may not be available to fund the project in the initial stages. Thus, debt becomes the principal source of funding for the project. The total exposure of banks calculated as percentage increase in lending towards the real estate sector has also followed a declining trend. Bank loans to real estate sector have increased only by around 12% in FY12 against FY11 whereas, the same increased by around 23% in FY11 against FY10 indicating the cautious outlook of the banks towards the sector. To add to this, foreign investors have also become cautious in investing due to continued weakness in the Indian rupee in an uncertain macroeconomic environment. The rupee has weakened 6.27% against the US dollar in the last fiscal. As per RBIâ&#x20AC;&#x2122;s data, FDI flows to India in real estate activities in FY12 (provisional) has been USD 340 million vis-Ă -vis USD 444 million in FY11 (provisional). Since these traditional sources of finance have dried up, developers approach nonbanking financial companies (NBFCs) for short-term debt and private equity (PE) funds. However, funds from NBFCs and PE investors are also fading away as the returns have been on the lower side and many PE investors are struggling to exit at decent returns. All the above-mentioned factors have resulted in liquidity crunch in the sector. The same can also be reflected from the latest dispersion of credit ratings for real estate players rated by Credit Analysis & Research Limited (CARE). While assessing the credit profile of a real estate entity, CARE begins with review of the sector and the Government policies, followed by assessment of the management and the business model adopted. Project-specific analysis is carried out to determine the funding, execution and marketing risk while financial parameters are analysed to understand the debt profile and determine financial flexibility of the company. Greater emphasis is placed on cash flow analysis to determine

Assessing the sector and the Government policies, followed by assessment of the management and credit profile the business model adopted. Project-specific analysis is carried out to determine the of real estate and marketing risk while liquidity and developers cash flow adequacy funding, to meetexecution the funding Real Estate Sectorfinancial Outlook parameters are analysed to requirements as well as debt obligations of the entity. growth has bottomed out and recovery is expected understand the debt profile andGDP determine financial flexibility of gradual the company. Greater most likely from flow H2FY14. Further, (wholesale emphasis is placed on cash flow analysis to determine liquidity and cash adequacy to inflation meet the funding price CARE has observed that primarily subdued demand, increasing index) is showing signs of cooling down as it stood at 4.70% requirements as well as debt obligations of the entity. construction cost, rising interest expense, and delays in for the month of May 2013, as compared to 4.89% for the projectCARE approvals have dented the earnings and return ratios of Aprilcost, 2013rising (5.96% March, 2013)and anddelays 7.55%induring has observed that primarily subdued demand, increasingmonth construction interest expense, of real estate developers in India. Moreover, drying funding May 2012. In this backdrop and if it continues to move around project approvals have dented the earnings and return ratios of real estate developers in India. Moreover, drying funding sources have impacted the liquidity profile. As a result, the the RBIâ&#x20AC;&#x2122;s target of 5%, CARE expects RBI to soften the repo sources have impacted the liquidity profile. As a result, the credit ratings of real estate developers were impacted in FY13 credit ratings of real estate developers were impacted in FY13 rate during the course of FY14 with a view to boost business and in such a scenario, many entities in the real estate sector fell in CARE BB [Double B] category. and in such a scenario, many entities in the real estate sector confidence and create a more favourable investment climate fell in CARE BB [Double B] category. resulting in availability of funds. Moreover, with improving

CARE's rating dispersion in the real estate sector as on June 30, 2013, is presented in the graph shown below

D RE CA

B RE CA

BB RE

RE CA

A RE CA

AA RE CA

RE CA

CARE Rating- Dispersion of ratings in the real estate sector

Percent

Rating Dispersion 50 45 40 35 30 25 20 15 10 5 0

Ratings

More than 50% of total outstanding ratings at the end of June growth in the employment, household incomes are also likely 2013 in the real estate sector were below investment grade. to improve. Decline in interest rates and improvement in More than 50% of total outstanding ratings at the end of June 2013 in theoutlook real estate sector were below investment During FY13, around 30% of the outstanding ratings were employment will improve affordability and provide downgraded, and only 11%around were upgraded. sector hasratings the grade. During FY13, 30% of theThe outstanding were downgraded,stimulus and only were upgraded. Thesector. much-needed to 11% demand in the real estate also some established and organized players with strongplayers credit with strong Combination of the Out above and aggressive marketing sector has also some established and organized credit profile. of factors total portfolio of companies profile. Out of total portfolio of companies rated by CARE 34% and pricing of inventory will help the real estate players to rated by CARE 34% belong to investment grade rating. belong to investment grade rating. stride on smoother ground and manage cash flows in the coming period.

Real Estate Sector

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

On Indians Investing In Properties Abroad Singapore, Malaysia, New York, Dubai and various cities in the UK – predominantly London are the preferred destinations for Indian property buyers.

he real estate market in many countries offers very lucrative investment prospects, with various offers and options. Apart from that, Indians buying property abroad can often avail of citizenship in the host country. This factor has considerable aspirational value with many. The aspiration factor aside, property in more and more locations within Indian metros has become enormously expensive. Moreover, interest rates for bank loans are already proving to be a stumbling block and may rise further with the future revision of RBI norms. In comparison, an Indian wishing to buy a property in New York, London or Singapore can avail of the considerably lower interest rates of local banks in those countries. Also, many foreign property markets are more transparent than our own, so investors can get ‘clean’ deals much faster and easier. Investment in property abroad makes sense for those who are employed or have business interests in the country of choice. Indians who have settled or are planning to settle abroad permanently are, of course, prime candidates. Who Is Buying, And Where Are They Buying? The broad profile of Indians who are looking at buying properties abroad would include business owners, professional property investors, mid-to-top level company management and high networth individuals. A very large component of buyers is also comprised of people whose children study in those countries. Singapore, Malaysia, New York, Dubai and various cities in the UK – predominantly London - are the preferred destinations for Indian property buyers. Because of the current ceiling on how much an Indian can invest abroad in a financial year, central city locations are out of reach for a large number of aspiring Indian buyers. This makes peripheral locations, which tend to be cheaper, attractive to such buyers. The US or the UK are doubtlessly closest to the hearts of most Indians hoping to 46

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

buy property abroad. However, when these are out of reach, Dubai is definitely among the most preferred among realistic property investment destinations for Indians. The current limit on Indians for investing abroad continues Anuj Puri, Chairman & Country Head, to be $200,000 per Jones Lang LaSalle India annum. This ceiling is not for investment in real estate alone, but applies to any kind of investment in a foreign country. The limit applies to individual buyers, so the investable amount doubles in the case of couples. The Indian Government may consider relaxing the ceiling further if it perceives increased interest by Indians in investing in foreign properties. Indians often have the option of entering into joint ventures with local operators in foreign countries such as Mauritius, Bhutan and Sri Lanka. The UAE also offers such a facility in some quarters. Entering into a JV with a foreign entity on its home turf can lead to vastly increased investment scope (beyond the $200,000 ceiling now prescribed by the RBI) and generate higher profitability. Precautions For Investing In Property Abroad Indians buying property in a foreign country should remember that there are investment and liability risks they may be exposed to. In some countries, land laws for investment in immovable properties can lack transparency and be quite complicated. It is inadvisable to invest in any kind of project announced by a company or other seller that has no physical representation on Indian soil. The exception would be where one has personally

established the legal and market bona fides of the seller. Secondly, one must keep in mind that most foreign property markets have their individual regulatory and permission mechanisms. While the RBI does permit investment of up to $200,000 per annum, one must establish whether one is eligible to invest in the country of choice to begin with. Apart from the above, the general guidelines for any property

investment also apply: • Ensure that the actual location of choice has sufficient appreciation potential • Establish the suitability of the neighbourhood (even more important in a country whose social dynamics one is unfamiliar with • Ensure that the property is free of litigation and has a clear title PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Reliance Com-municates with its Property R-COM hives off its real estate property into separate company Expected releasable value 12000cr

he Anil Ambani-led Reliance Communications (R-Com), has announced hiving off its entire real estate assets, into a separate listed company called Reliance Properties Ltd. As per independent valuers, the preliminary and indicative monetisable value of R-Com’s real estate on development is estimated at over Rs. 12,000 crore (US$ 2 billion), which is equal to Rs. 60 (US$ 1) per R-Com share, the company said in a statement. With the board making the decision in principle, the reaction to the announcement is a hot pot pourri in itself. Let’s take a look… Why the step? The company calls the proposed separation of real estate into a separate unit as a part of its strategic plan to divest non-core assets, and focus on its core wireless and enterprise business. The hard-hitting reality is the debt burden of Rs 39,000 crore at the end of March, 2013. In this scenario, the move may better be called a debt pare strategy. The company has been trying to raise funds for several years to reduce debt. “The demerger is expected to enhance value for R-Com’s existing shareholders. This spin-off is another effort in anticipation for the group to raise funds through an imminent stake sale,” Angel Broking said in a report. How much will the Co gain from the Property venture? For RCom, the motivation for setting up the property arm seems to be that it will offer much higher realizations than a plain sale of land, at prime locations Mumbai and Delhi. While it owns 135 acres of land in Navi Mumbai (Dhirubhai Ambani Knowledge City), with an estimated saleable area of over 15 million sq ft, the company also has four acres of property in Delhi near Connaught Place. As per Jones Lang LaSalle, a Real estate consultancy, the retail space in Navi Mumbai was valued at Rs. 7,000- 12,000 a sq ft in May and Office properties in Connaught Place, New Delhi 48

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

were quoted at Rs 28,000- 35,000 a sq ft. Based on these the potential value on being developed into office spaces in Mumbai is 12000 cr & that of Delhi is about 1400 Cr. The indicative monetisable value of RCOM’s real estate on development as estimated by independent valuers is over Rs. 12,000 crore (US$ 2 billion), which equals to Rs. 60 (US$ 1) per RCOM share, the company said. Land V/s Devleloped property Sometimes selling of the property is more profitable preposition compared to the return on development especially if the company is in dire need of cash, feel experts. Despite being a developer, DLF sold around 17 acres of land in Mumbai for Rs 2,700 crore in 2012. Had Rcom went through the plain route of directly selling of the land, it is estimated that it would have earned around Rs 2,700 crore, assuming the land price is 20 per cent of the sale price.

But for those who have the luxury to hold on to and develop property, the return might be substantially higher & the Telecom giant seems to be taking this route. As also done by large corporate houses, like Mahindra & Godrej who have also floated real estate arms that have turned out quite profitable. Phoenix Mills that started property development on its textile mill land in the early 1990s. The company has expanded in many cities and now its textile business exists only in name. While there might be success stories there are some not so successful ones as well, like those of Consumer electronics maker Videocon and software developer Satyam. The infamous demerger of cigarette maker GTC in 2008 for the joint development of its 14-acre land in Mumbai along with other property assets is another case in point. The deal, inked in 2010 and worth over Rs 500 crore, is still caught up in a legal tangle. Reliance Properties Ltd.- the Challenges ahead: In the light of downward pressures on the office-space market and capital intense nature of the real estate business, it is said that Rcom have shore off into property venture during tough waters. The global slowdown and reduced demand has resulted in a downward trend in office space. About 7 million sq ft of office space has been absorbed in the March-June 2013 period, a decline of 6 per cent over the previous year, according to real estate research firm CBRE. Moreover, with high interest rates most property developers such as DLF and Unitech are already struggling with high debt and interest service costs. Forging global partners RCom, on its part, has indicated that it will work with global partners to develop real estate & ‘unlock the value’ of this asset. In December 2012, RCom set up a joint venture with Chinese real estate firm Wanda Group to develop integrated township projects in India, including commercial buildings and residential apartments, hotels and retail space. The process of getting approval and roping in foreign partners would take at least six months, We will have to wait and see how soon Rcom implements this proposal. Market sentiments Cheering the news, shares of the Telecom major on the day of announcement (7 July 2013) jumped over by 9.29% cent to Rs.148.20 reaching its 52-week high on the BSE. The stock

had soared 115 percent during the past three months alone. At the NSE, the stock zoomed up by 9.24 percent to touch its one-year high of Rs 148.25. So what’s in store for shareholders Besides unlocking real estate asset value to the existing 2 million institutional and retail shareholders, the demerger would also provide the R-Com shareholders with fully tradable shares in the new company in the ratio of 1:1. The indicative value of Reliance Properties shares is Rs 60 per share, and the market price of R-Com share is Rs 130. This translates into almost 50 per cent enhancement/addition in the shareholder value of R-Com. Demerger v/s debt The proposed demerger is subject to approvals from shareholders, lenders and courts and some are already concerned over the idea of reducing debt through this.One, the value of the real estate will go to the shareholders, and not RCom, until some of the debt is also shifted to the new company,” told a telecom analyst on condition of anonymity. Two, taking the partnership for development, route may reduce RCom’s share of the property, thereby reducing its share of the estimated gains too. Three, Property development also involves a long lead-time due to delays in gaining approval and sanctions. So the money, even if fully realisable, may take time to flow in. Hence, the company’s board has also decided to set up a committee to decide on the timeline for the monetisation. This month, RCom paid $1 billion out of its $7 billion debt on ECB loans from a clutch of international banks. It is also said to be selling its Flag undersea cable assets (Globalcom), and may be planning to sell 80% stake in its DTH business to Sun Direct. Earlier this year, RCom signed a long-term deal with Reliance Jio, the 4G arm of RIL, for leasing its existing infrastructure of optical fibre cable (OFC) and towers to repay a part of the debt. For all the reactions, looking at the current economic slumber, its only in time we shall know what shall be the future of Rcomm through this move for now its 12000 cr expected realizable value V/s a debt of 39000cr!!

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Anandgarh, it would have been, now its New Chandigarh Notwithstanding the controversy over renaming of Mullanpur LPA as New Chandigarh, the city is being developed as a planned area with Medi City & Edu City being part of it. Where there is a will, there is a way; we may attribute it to the will of S.Parkash Singh Badal, Chief Minister Punjab. He may have lost the battle in the courts way back in 2001, when Punjab & Haryana High court scrapped the ambitious Anandgarh project citing legal & technical points. Accounted here is story of New Chandigarh, the Past, the Present & the future. THE PAST 1993 It was late Chief Minister Beant Singh (belonging to the Congress) who first came out with idea of building city comprising of 15 villages in the area including Mullanpur. “The villages that were intended to be included were Togan, Milkh, Mastgarh, Tira, Ratwara, Mullanpur, Nayagoan, Nada, Kansal and others. The opposition Akalis then ensured the project was grounded. 1999 Akalis formed the government in 1997 and whereas they opposed the project tooth & nail when it was proposed by Congress in 1993, Akalis went all out and constituted, “The Anandgarh Development Authority”, which was set up to acquire around 10,000 acre of land in 29 villages. The decision to set up Anandgarh, an ultra modern, futuristic city with a global vision to commemorate the 300 years of Khalsa was announced by Punjab Government in April 1999. It was to be the 5th newly planned city of the Punjab after re organisation of the state in 1966.

2001 The Punjab & Haryana High Court turned down the project in March 2001, with reasons that the township fell under the Periphery Control Act (disallowing construction 16 km around Chandigarh), the permission from the competent authority under the provisions of the Punjab New Capital (Periphery) Control Act, 1952, was not taken and secondly the statutory provisions of the Section 56 of the Punjab Regional and Town Planning and Development Act (PRTPDA), 1995, were not adhered to. The rules demand notifying the local planning area (LPA) and inviting objections and suggestions from the pubic. 2007 In 2007, the Punjab government did its homework and made a strong legal case. It declared Mullanpur as a local planning area under the regional master plan for the Greater Mohali. THE PRESENT 2013 The government has now in 2013 rechristened the Mullanpur LPA as New Chandigarh and formal notification to this regard would be out soon. This is how the government countered the legal objections: • Under the PRTPD Act, Mullanpur was identified as one of the six clusters of development in the Greater Mohali Area Regional Master Plan, prepared by Jurong Pvt Ltd •

Land compensation in 1999 In a meeting between ADA and District Price Fixation Committee, held on 7th Jully 2000, it was decided to award compensation at the following rates: 1 lakh per acre for River Bed Land 1.75 lakh per acre for Land close to River 2 – 3 lakh for good irrigated land. 7.5 lakh for land close to main road.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Mullanpur was notified as a local planning area.

• Objections were invited from the public after notifying the draft master plan (Once an area is notified as local planning area, provisions of the Punjab New Capital (Periphery) Control Act, 1952, ceases to apply). THE FUTURE Notwithstanding the controversy over renaming of Mullanpur LPA as New Chandigarh, the city is being developed as a

planned area with Medi City & Edu City being part of it. 33 percent of the area is reserved as green belt. If intentions remain good & so does the planning & efforts, New Chandigarh would be new hub of activity in the region. Education city at New Chandigarh The state government has given a nod of approval for setting up Education City at New Chandigarh. The Authority has started the process of acquiring 1700 acres of land for the project. Land will be acquired in villages Kansala (419 acres), Takipur (354 acres), Rajgarh (337 acres), Boothgarh (303 acres) and Kartarpur (287 acres) for this ambitious project. After demarcation of land to be acquired, objections will be invited from the land owners whose land will fall under the project. Following which the process of land acquisition will be started. Land will be made available for setting up schools, colleges and universities offering world class state of the art facilities. The project so completed would offer education facilities in courses like Engineering, , Medical, Management, Bio tech, Tourism, Hospital, Multimedia, pharmaceuticals etc. Land may also be allotted to some IT companies in this Education City. Apart from allottment of land to various educational institutions, residential and commercial areas will be developed in the project for the convenience of the students and the faculty. The district will surely be a preferred destination among the aspirants of various educational streams, with the project getting into the shape.

7 kilometers from PGI. Medicity, located a little ahead of Phase I on the opposite side of the road going from PGI to Mullanpur, is about 8 kilometers from PGI. Punjab Deputy Chief Minister Sukhbir Badal said that the state is talking to the top medical care providers both nationally and internationally for Medicity. “It is going to be the greatest hub of medical care in the country. We have chosen Mullanpur because of its proximity to Chandigarh. To attract the best talent, we needed to give them the best in lifestyle options in the state,” he said. Medicity will be a self-contained campus, with the best of housing facilities for the doctors and other hospital staff members within the area. Medicity and the Urban Estate are on prime road that go from PGI towards Mullanpur. While the Urban Estate is a prised residential destination in itself, Medicity is going to propel the area to a different level of commercial success. The Engineering Department of the UT Administration is drawing up plans to construct a flyover from PGI to Mullanpur, in view of the heavy traffic expected on this road in the coming years. The metro proposed in Chandigarh is also likely to be extended to Mullanpur. The road coming from PGI will be taken into the prime urban area of Mullanpur as a six-laned stretch. Meanwhile, a four-lane road is also planned from Sector 38 towards Mullanpur. This will give access to ‘New Chandigarh’ from the Mohali side.

Medi City at New Chandigarh Medicity will cover 150 acres and will have plots of 5-10 acres. GMADA Eco City Urban Estate Phase I is at a distance of about PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Imperial Estate

July 2013

Imperial Estate by SPR Buildtech Limited

Rated NCR 6-Star by CARE Research About CARE Credit Analysis & Research Ltd. (CARE) was promoted in 1993 by some of the leading Indian banks and financial institutions. Major shareholders of CARE include IDBI Bank, Canara Bank and State Bank of India. CARE is amongst the premier credit rating agencies in India and provides credit rating, research and information services. CARE Ratings is well equipped to rate all types of debt instruments including Commercial Papers, Fixed Deposits, Bonds, Debentures, Hybrid Instruments, Preference Shares, Loans, Structured Obligations, Asset Backed Securities, Residential Mortgage Backed Securities etc. CARE’s rating methodologies are in line with the best international practices. Disclaimer CARE’s star rating of real estate projects is an opinion on the developer’s ability to execute the real estate project in timely manner and with the agreed upon quality standards. Besides, it is an opinion of the legal quality of the project. The analysis draws heavily from the information provided by the developer and information obtained from sources believed by CARE to be accurate. However, CARE does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Also, CARE does not guarantee the adequacy of title search done to arrive at the legal quality of the project. CARE’s Real Estate Star rating is also not a recommendation to buy, sell or hold the rated real estate property. CARE shall also not be liable for any losses incurred by users from any use of such rating. Most of the developers whose real estate projects are star rated by CARE have paid a rating fee.

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CARE Assigns “NCR 6-Star” Rating to Imperial Estate by SPR Buildtech Limited

July 2013 Project Star Rating Rationale • Project developer quality SPR was incorporated in 2007 and ‘Imperial Estate’ is the first real estate project of this company and its promoters. The promoters of SPR have experience in automobile dealership, education sector, real estate brokerage and real estate development (small scale). SPR is developing the project in three phases comprising of a total of seven towers. SPR has given possession for seven towers (4.28 lakh square feet [lsf], saleable area) launched under phase I and proposes to offer possession for another 3 towers (4.28 lack square feet [lsf] saleable area) under phase II in December 2013. The revised building plan approval for the seventh tower (do) under phase III is yet to be applied for. Imperial Estate is the first project of the promoters, the phase I of project has been offered for possession within the stipulated schedule and phase II of the project is also progressing as per schedule.

swimming pool, children’s play area etc. Also, there is a provision for rain water harvesting and about 39% of the area has been reserved for lawns, parks, landscaped greens and other open area. The project comprises of basement and stilt parking for 677 cars along with guest parking.

• Project location, construction quality and amenities SPR has appointed M/s CP Kukreja & Associates as the architect, civil and structural consultant, which is a renowned architect firm with an experience of more than 40 years. The civil construction for the project is done by SPR through its in-house team of engineers and contract labourers. Apart from this, SPR has appointed consultants for activities like STP, WTP, elevator & ventilation. The project has amenities and recreational facilities such as club house, fitness centre,

funding is dependent on customer receivables and realization of sales from remaining inventory. The promoters have infused 85% of the total equity commitment and the entire debt is already sanctioned and disbursed. The balance project cost of Rs.50 crore (22% of total project cost) shall be funded by customer receivables (from sold inventory) of Rs.26 crore and remaining Rs.24 crore from the sale of remaining inventory in phase I and II and launch of phase III.

Imperial Estate by SPR Buildtech Limited

• Project legal quality The Developer has acquired land through outright purchase from farmers. The project’s land title is clear and marketable as per the title search (done by Grover & Associates) for the entire land (admeasuring 10.256 acres) for 12 years. Besides, the project has received all the required clearances for the construction of group housing society for towers 1-6. For the tower 7, SPR is in the process of applying for revised building plan approval. • Project financial quality As per the current plans of the company, major construction

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Project Profile Project Name

Imperial Estate

Project Type Residential Project Location Faridabad Development Type

Bought out land

Project Start Date

October 2008 (phase I), September 2009 (phase II)

and phase III yet to be launched

Scheduled Project Completion Date

October 2012 (phase I), December 2013 (phase II)

and December 2016 (phase III)

Agreed upon Possession to the customer The developer proposes to deliver residential units within 36 months

from the date of signing builder buyer agreement. Phase I already

handed over on time, phase II to be handed over by (December 2013)

and as per the management, phase III to be handed over by 2016.

Total Saleable Area

10 lsf

Construction Status

SPR has already incurred 78% (for all three phases) of the total project (three phases) cost. Status is as give below: Phase I – Handed over to customers. Phase II – Civil work completed and internal work is ongoing. Phase III –SPR is yet to apply for the revised building plan approval

Project Developer Profile Name of the company developing the project

SPR Buildtech Limited

Project developer group

Development Experience of the developer group First project No. of years in the industry

5 years

No. of projects developed till date

Total Area developed till date

8.57 lsf

No. of projects ongoing

Project Developer SPR is promoted by five individuals namely, Mr Sanjeev Saluja, Mr Sudesh Gupta, Mr Rajesh Nagar, Mr Basant Virmani & Mr Pawan Agarwal. The promoters of SPR have prior experience in automobile dealership, marketing, sales, education, real estate brokerage and other fields. Mr Basant Virmani is the Ex-Dy Mayor of Faridabad. Mr Rajesh Nagar and Mr Pawan Agarwal initially acquired the land and conceived the project. The other three promoters were inducted to provide their expertise in various fields such as marketing, liasoning and sales. Mr Saluja is a renowned businessman in Faridabad with commercial interests in automobile, telecom dealership and petrol pumps. Presently, Mr Saluja and Mr Sudesh Gupta are

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

actively managing the operations of SPR. The promoters do not have an extensive prior experience in the development of real estate projects, and ‘Imperial Estate’ is their first project. However, the same is mitigated to some extent by the fact that, SPR has already given possession of three out of seven towers. Three other towers in phase II are at the advanced stages of construction and balance building with a saleable area of 1.42 lsf is to be completed in 36 months. Project Details “Imperial Estate” is a high-rise group housing project being developed by SPR Buildtech Limited. The project is spread over land admeasuring approximately 10.25 acres in Sector

82, Faridabad, Haryana for constructing six towers of G+17 storeys. The project uses an FSI of 1.75 and has a total saleable area of 10 lsf.. There are total of 372 apartments and 24 penthouses in the six existing towers of the project. SPR is yet to apply for the revised building plan approval for tower 7. The project site is located in sector 82, Faridabad, Haryana which is in close proximity to the Delhi border and Badarpur metro station. The average size of each apartment is close to 2,050 sq ft while penthouses have an area of 4,368 sq ft. The project has various amenities such as club house, fitness centre, swimming pool, children’s play area, basketball, tennis, badminton courts and cricket pitch. Also, there is a provision for rain water harvesting and about 39% of the area has been reserved for lawns, parks, open and landscaped greens. The project is certified in the Gold category by the environmental ministry. Highlights of the Project • Landscaped Greens with Children Play Area • Jogging Tracks • Club with Swimming Pool and Fitness Centre • Badminton court • CCTV with 24*7 surveillance and gated community • Fire-Fighting System with water sprinkler in every flat • Power back up upto 2100 KVA for entire project expandable upto 2500 KVA • Overhead tanks for each building • Provision of solar heating on rooftop • Rainwater harvesting • Air conditioned lobbies • Open air theater • Water & sewage treatment plants • The construction activities such as RCC works, brick work, internal plaster, water proofing, electrical, plumbing work for phase II has been completed. The interiors of the flats including flooring are in progress. The phase II is proposed to be offered for possession in December 2013. The construction for phase III is yet to start. Brief particulars about various contractors is as follows – 1. Architects The principal architect of the project is M/s CP Kukreja & Associates. The firm was established in 1969 and has worked on several residential projects, commercial, hospitals, industries, institution and others with many established real estate developers of North India. The firm has successfully completed over 500 projects in India and abroad. 2. Structural consultants and civil engineers

The structural and civil work supervision is being managed by CP Kukreja & Associates. 3. Civil Engineers Entire construction and the civil work is being overseen by the promoter group with an in-house team of engineers, technicians and labour force. SPR has in-house team of 120 engineers, who look after the entire construction work, electrical and other structural activities. Project legal status ¨Land has been purchased from farmers on freehold basis. The entire purchase consideration is already paid and there is no amount outstanding to be paid for land purchase. ¨SPR has got the title search done for 12 years from Grover & Associates and as per their opinion the title of land is clear and free from sorts of encumbrances. ¨SPR has taken project license for development of group housing society and has taken occupation certificate for 3 towers in phase I. ¨The buyer agreement has been drafted and executed among developer and buyer. The buyer agreement provides details of possession date, key deliverable, payment schedule, escalation clause, penalty on buyer and seller, cancellation terms among other details. The buyer agreement seems comprehensive and includes all the relevant details. Project Financial Status ¨The total estimated project cost of Rs.225 crore, which is being funded by way of equity capital of Rs.13.64 crore, bank loan of Rs.20 crore and balance from customer advances. SPR’s promoters have already infused Rs.11.64 crore as equity contribution and bank loan is also fully disbursed. The company has already received customer advances of Rs.144 crore and has receivables of Rs.26 crore from sales already made. Further inventory is available of 20 flats and penthouses fromphase I and phase II. Phase III is yet to be launched for sale. ¨As on February 28, 2013, SPR has already incurred Rs.175 crore that includes the land cost of Rs.5 crore, construction cost of Rs.147 crore and other administrative and selling cost of Rs.24 crore. For the balance construction cost of Rs.50crore, SPR has cash flow visibility from booked units with customer advances receivable amounting to Rs.26 crore from sold inventory. The remaining cost will be funded by future sale of available inventory.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

be a prosperity seeker

Prince of Cambridge- the Royal Baby

Milkha Singh- the Flying Sikh

Britain raised toast to the much-awaited arrival of its future king- Prince Cambridge. Born to Prince William & his wife Kate Middleton, the royal baby is expected to boost Britain’s economy by € 521 million (US$800m), as per a leading brand valuation agency. From short of boost to souvenirs, food & beverages, to long term enhancement in overall consumer sentiments of about €208 million (US $ 319 m )– the baby brings it all. As the first child of the Duke & the Duchess of Cambridge he will remain third line to the throne under new laws to the succession of the royal family. Needless to say, the Monarchy is a powerful endorsement for individual and company brands and the latest Windsor will be an effective and lucrative ambassador for Brand Britain. Hope it’s big enough to draw out the recession stuck Britain out of it!

With the nation running with Milkha, Singh has once again short to fame becoming a household name not only in India but also across the globe. Milkha Singh, India’s legendary sprinter was overwhelmed to see Farhan Akhtar bring alive his younger days on big screen. The box office success counted 75 crores in less than two weeks of the release of the film. Kudos to the sue do Milkha- Farhan Akhtar who worked really hard to bring himself close to near perfection and transformed himself into the legendary athlete. Milkha Singh took just a token fee of Rs1 for Bhaag Milkha Bhaag. The flying Sikh has just one last wish- an Olympics gold medal that slipped out of his hands must come to an Indian during his lifetime. Fingers crossed for that- up till then Bhaag Milkha Bhaag...

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name, fame, money, social work… know what gives you a kick!

Travel a while - Mukesh Ambani style

Bill & Melinda Gates Foundation

If one has to travel, do it in style! This is the mantra of the India’s richest man Mukesh Ambani who is also world’s 18th richest person on the Bloomberg Billionaires Index. Top-of-the-line private and corporate jets at the hangar, and an extensive parking line-up of swanky 168 cars, it’s only a person with net worth of $21.5 B can suit the bill. Standing proud is the private Boeing Business Jet for about Rs 327 cr for him and a worth 242 cr Airbus 319 gift for wife Nita Ambani. Akin to the likes of a business hotel, 1,004sqft Boeing jet boasts of a full-fledged executive office and a private bedroom suite. Not only him but he makes sure his team travels in style too!! Dassault Falcon 900EX, the 19 seater 7000 flyer ranger carried the Mumbai IPL team around during the 2013 tournament.

Gates began his major philanthropic efforts in 1994, when he created the William H. Gates Foundation, which focused on global health. Three years later, he and Melinda created the Gates Library Foundation, which worked to bring public access computers with Internet connections to libraries in the United States. Its name changed to the Gates Learning Foundation in 1999 to reflect its focus on ensuring that low-income minority students are prepared for college and have the means to attend. In 2000, to increase efficiency and communication, the two groups merged into the Bill & Melinda Gates Foundation. Bill Gates and Melinda were raised knowing it’s important to give back to the community. “Both the Gates and French families instilled the values of volunteerism and civic engagement. If life happens to bless you, you should use those gifts as well and as wisely as you can.” PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

quotemagic

I earn more money than i could spend in a lifetime doing what i Love to do!

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eyecatchers

India is the world’s most youthful nation! A nation with such youth power cannot dream small. (Home page www.narendramodi.in)

Eye catcher this month is Mr. Narendra Damodardas Modi, a bright prospect for PM’s post in next general election. He holds a Master’s degree in political science and is currently serving 4th Term as Chief Minister of Gujarat. Road blocks seems to be clearing and gradually peers and non peers are accepting him to be the next PM’s canditate representing BJP/NDA.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Homes of the Rich & Famous

prah Winfrey is an American media proprietor, talk show host, actress, producer, and philanthropist. She is best known for her multi-award-winning talk show ‘The Oprah Winfrey Show’ which was the highest-rated program of its kind in history and was nationally syndicated from 1986 to 2011.

Although Oprah Winfrey is one of the world’s most successful women, she didn’t always have it easy. In fact, to get to where she is today, she had to make a few sacrifices and work as a news anchor, a job she disliked, for a few years to pay the bills and gain experience and skills. Winfrey advises to “do what you have to do until you can do what you want to do”.

She has been ranked the richest African-American of the 20th century and the greatest black philanthropist in American history. She was also considered for a time the world’s only black billionaire. She is also, according to some assessments, the most influential woman in the world.

“You’re not supposed to be able to get everything you want immediately, and when you’re starting out, you should “keep a foot in the door” of your passion while doing what “you have to do to feed yourself”.

She has also managed to build up a pretty incredible life for herself, acquiring real estate across the country. 60

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“The Promised Land” Montecito, California

Her main house, “The Promised Land” Montecito, California, (outside Santa Barbara) It’s been told that Oprah was at a party hosted by the estate’s former owners and fell so in love with the property that she wrote a $50-million-dollar personal check to the owners to buy the estate, even though it wasn’t even for sale.Oprah’s 23,000 square foot mansion sits on 42 acres of prime real estate in Montecito, California. It has both ocean and mountain views.

Oprah’s Maui spread, located in Kula, was renovated by N.Y. designer Elissa “Ellie” Cullman to reflect contemporary American farmhouse style.

The media queen owns a lavish vacation home on the shores of Antigua.

When she’s in Chicago, Oprah resides in a 15,000-square-foot duplex at Water Tower Place on Michigan Ave.

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amazing buildings

Kansas City Library (Missouri, USA)

he Kansas city library is one of the extraordinary architectural designs all over the world. It is one of the largest public libraries in the world and is well known for its exceptional architectural design.Â The unique design for which, the library is famous is ; the walls made in the shape of the books placed side by side, with the name of the book and the name of the author ingrained. The architectural bookshelf runs between Wyandotte Street and Baltimore Avenue, along the south wall of the Central libraryâ&#x20AC;&#x2122;s parking garage. The bookshelf is known as the community bookshelf. Each book design measures about 25 feet by 9 feet and there are total of 22 titles, which are constructed by keeping the reading interests of the people of Kansas city in mind.

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quotemagic

The secret to long life Fruit and coffee Now thatís more like a long-life diet. American Walter Breuning, who in 2009 was the worldís oldest man, put much of his great age down to diet. He ate eggs or toast for breakfast and lots of fruit every day, all washed down with a couple of cups of coffee. But Breuning had another dietary tip that may have contributed to his longevity. He only ate two meals a day, breakfast and lunch, and said he never felt better after giving up his evening meal. Being hungry was good for you, he claimed, saying that: ìI think you should push back from the table when you’re still hungry...if you could just tell people not to eat so darn much.î Thereís now quite a lot of evidence that Breuningís calorie restricted diet can add years to your life.

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Get back to basics?

PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

e are living in a complex world. 2+2 remains 4, whether we calculate by mind, calculator or computer.

proof that you have it in you. Home is an important aspect of happy living. You may be earning well today and leasing out a comfortable house. But what if you stop working tomorrow. Reasons can be many. You owe this

The next few pages are for anyone who wants to learn basic living skills, the kind employed by our forefathers and adapt them for a better life in the twenty-first century. Use this Back to Basics for inspiration and instruction, escaping to an era before power saws and fast food restaurants and rediscovering the pleasures and challenges of a healthier, greener, and more self-sufficient lifestyle. The first in series write up Go Back to Basics, deals with the various aspects where basics work, the keep it simple funda. 1. Studies – education is manifestation of perfection already in man. Don’t make your mind a garbage bin, by storing everything it. Discover what you are good at. Find out which out 3 Idiots you are. Manifest the skill you already have in you. Not everyone is destined to be a doctor or scientist. It’s a whole world out there. Find the YOU. Discover the diamond in you. Do not stop experimenting. Stop not till the goal is reached. 2. Healthy living – Healthy mind a healthy mind. Sooner you accept this, better it is for you. Numerous time you have heard & read, Money is lost – nothing is lost, character is lost – something is lost, health is lost – everything is lot. Work hard, impress your boss, grow your business, but never ever compromise on your health. Run, exercise, go to gym, eat well, sleep well. We know all this basic stuff. Well it’s all about keeping basics intact. Stay well, stay healthy. Money, name, fame all can follow. 3. Work – Work is worship. Be honest with your work. Integrity is a must. Work in a team. Keep healthy work relationship with your colleagues. Work as tea. All basic. Yet if you keep the basics intact, you will never be disappointed. Your boss may be unreasonable at times but not always. If you are right everyone knows, and it is acknowledge by one & all, sooner or later. Be smart but stay calm. 4. Family – Give time to family that they deserve. You may be busy on week days, but you can always make it up at week end. A short picnic, a joint family meal, a movie show with kids & spouse and all are happy, including you. 5. Basics of Happy living – Buy a house before you marry. If you are reading this article till here, you already have it in you. Your mind has taken you till this paragraph is enough

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quotemagic

A good life is when you assume nothing, do more, Smile often, dream big laugh a lot, and realize how blessed you are for what you have. 66

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Positive Living With Ravi Nanda

STORY WITH 3 MORALS A TEACHER LESSON to her STUDENTS The teacher told each child in the class to bring along a plastic bag containing a few potatoes. Each potato will be given a name of a person that the child hates.

some 3 while some up to 5 potatoes. The teacher then told the children to carry with them the potatoes in the plastic bag wherever they go (even to the toilet) for 1 week.

So the number of potatoes that a child will put in his/her plastic bag will depend on the number of people he/she hates.

Days after days passed by, and the children started to complain due to the unpleasant smell let out by the ROTTEN POTATOES. Besides, those having 5 potatoes also had to carry heavier bags. After 1 week, the children were relieved because the game had finally ended....

So when the day came, every child brought some potatoes with the name of the people he/she hated. Some had 2 potatoes;

The teacher asked: “How did you feel while carrying the potatoes with you for 1 week?”. The children let out their frustrations and started complaining of the trouble that they had to go through having to carry the heavy and smelly potatoes wherever they go. Then the teacher told them the hidden meaning behind the game. The teacher said: “This is exactly the situation when you carry your hatred for somebody inside your heart. The stink of hatred will contaminate your heart and you will carry it with you wherever you go. If you cannot tolerate the smell of rotten potatoes for just 1 week, can you imagine what is it like to have the stink of hatred in your heart for your lifetime?

Mr. Ravi Nanda’s core passion is developing people towards POSITIVE THINKING & POSITIVE LIVING through introspective workshops. One of his very favourite workshops at the Chamber of Commerce: “Why every successful businessman does not become Tata or Ambani” was a real toast to the entire audience. This missionary work he started on the advice of a visionary educationist Dr Waryam Singh. He started designing different attitudinal modules for the teachers in India.

3 Morals of the story: • Throw away any hatred for anyone from your heart so that you will not carry sins for a lifetime. • Forgiving others is the best attitude which brings HAPPINESS • True love is not loving a perfect person but loving an imperfect person PERFECTLY

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planetsavers

GROW MORE TREES each one, plant one, every month

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bookshelf

Money, and the Law of Attraction: Learning to Attract Wealth, Health, and Happiness Esther and Jerry Hicks

his Leading Edge work by Esther and Jerry Hicks, who present the teachings of the Non-Physical consciousness. Abraham, explains that the two subjects most chronically affected by the powerful Law of Attraction are financial and physical wellbeing. This book will shine a spotlight on each of the most significant aspects of your life experience and then guide you to the conscious creative control of every aspect of your life, and also goes right to the heart of what most of you are probably troubled by: money and physical health. Not having enough money or not having good health puts you in the perfect position for creating more of that which you do not

have. This book has been written to deliberately align you with the most powerful law in the universe—the Law of Attraction— so that you can make it work specifically for you. Money, and the Law of Attraction is formatted in five, vibrant essays: Part I – Processing of Pivoting and Positive Aspects Part II – Attracting Money and Manifesting Abundance Part III – Maintaining Your Physical Well-Being Part IV – Perspectives of Health, Weight, and Mind Part V – Careers, as Profitable Sources of Pleasure

The book comes with a free CD (excerpted from a live Abraham-Hicks workshop) that features the Art of Allowing your physical and financial well-being to come through. PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

Commercial Vaastu

Vaastu Shree, Vaastu Visharad Shri Naresh Singal, Vaastu & Feng-Shui Consultant. For any further queries on the subject, readers can contact him on mail@vaastunaresh.com

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ith increasing production, the business houses are opening their offices and showrooms in numbers for marketing their products. Therefore buildings for these commercial purposes have become a necessity. And such offices are being operated for multistoried commercial complexes. Such type of complexes can be seen in numbers in metro cities. It would be wise if we say that these multi-stories buildings have become the part of the culture of metros. While construction of multi-storied complexes most of the vaastu principle cannot be followed. Due to high price, most of the value for the price is taken and maximum utilization of space is done. Even doing so, if the rules laid in Vaastu are followed while construction of commercial complex they gain fame and are sold quickly and the business or offices operating for such buildings become profitable. There are peoples who think that vaastu rules are only for domestic constrictions. My friends, I would like to tell you that vaastu rules are equally important for commercial constructions. Understanding the importance of vaastu most of the commercial builders and business houses follow vaastu rules. Here we would like to mention, though basics for domestic and commercial vaastu are same, still there are major difference between both. When we go for the commercial vaastu, we have to consider the nature of business/commercial activity to be done in the building. A professional vaastu consultant shouldn’t ignore this. Anyway, here are some basic rules which can be applied in any kind of commercial building or office space.

constructed either in North or North-East zone of the plot. Whereas, overhead water storage tanks may be put in northwest. • Waste water drained out of the building and also the rain water should flow towards the north or east directions. • Lawn in north side open space and parking in east side is auspicious. • Slope of the land should be from south to North and West to East. • If the trees are used in horticulture, tall and dense trees should not be near the building. They should be such planted that their shadow does not drop on the building till 4 pm in evening. • Every floor should be constructed in such a manner that fresh air should flow freely in every room. There should be provision of day light to enter in every room of the building. • If attached toilet is to be provided with any room in the complex, it should be in the south portion of the room. • If store room is required along with the office, it should be in the south or west part of the room. • It is advisable to construct stairs in the south or west zone of the main building. Stairs in north or east portion of the building are not auspicious.

• Rectangular plot of side ratio between1:1 to 1:2 are best suited for the purpose. Construction on such plots is auspicious and is beneficial not only to the owners but also to the occupants who rent or buy the commercial units in such constructions. • There should be enough space left around the building. More open space towards North and East side of the Building as compared to south and west sides. • As far as possible the main gate should never be in South-west zone of the plot. The height of the main door to the building should be more than the entry doors of individual unites in the complex. • Any underground water storage or tube-well may be PROPERTY & WEALTH VOL 3, ISSUE 01, Aug-Sep 2013

softcorner

Actions certainly goonj louder than words!! Rooted in faith & spirited with dedication to bring a change, Anshu K Gupta, is all geared up with the strategy to rehabilitate the disaster stuck people of Uttarakhand where about 10,000 people lost their lives in the flash floods. His founded NGO, Goonj which provides relief aid to those affected by such natural calamities has been on the forefront to bring relief items to the families of Uttarkhand as evacuations and rescue efforts continue. Keen to be called a Social entrepreneur than a social worker, Anshu collects 30 tonnes of clothes every month and distributes it across 20 states through his 300 volunteers. With an amazing reach, a simple network and excellent supply-chain management, Anshu made it to the seven most powerful Indian rural entrepreneurs list in the Forbes magazine. During Anshuâ&#x20AC;&#x2122;s decade long work, his organization Goonj has deservedly won many prestigious awards, such as the Ashoka Fellowship in 2004, the World Bankâ&#x20AC;&#x2122;s Development Marketplace Award 2007, the Indian NGO of the Year award in 2008, the Ashoka Change-Makers Awards and the Lien i3 Challenge Award for Social Innovation. Wow! Actions certainly goonj louder than words!! 72

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