Tata Housing is about to invest Rs. 600 crore

One of the leading realty firm Tata Housing is planning to invest more than Rs. 600 crore for the development of new residential project at the Bahadurgarh, Haryana.

For this particular residential project Tata Housing has tied up knot with the local real estate developer, who owns about 21.7 acres of land for the development of this project which will contain more than 800 to 1,000 units. As per the statement of Tata Value Homes, which is the subsidiary of Tata Housing, with this deal it has entered in the Delhi and NCR region for affordable housing market by launching the new project at Bahadurgarh, Haryana, where apartments price will start from Rs. 50 lacs.

Apart from that Tata Housing, still hiding the fact that how much they are going to invest in this latest projects, but as per anonymous sources Tata Housing is about to invest Rs. 600 crore. As per the officials company has received all the necessary government and non-government approvals to develop this project, however; it is expected that the construction work will start within one to two months.

Brotin Banerjee, MD and CEO of Tata Housing, stated that this project is in the close proximity for New Delhi and Gurgaon both city and Bahadurgarh has potential to become next corporate hub in terms of value and affordable housing in the NCR region.

Tata Housing is about to become the public limited company however its subsidiary, Tata Sons Ltd which hold more than 99 per cent stake in the realty firm. Currently, Tata Housing has more than 70 million square feet under development which is in various stages from planning to execution with the additional 19 million square feet area which is under pipeline. In present, currently, three projects are underway from Tata Housing.

On Wednesday, cabinet defers on the approval of Real Estate (Regulation & Development) Bill, which is committed to ensure consumer protection and to establish regulatory bodies at Centre and states for transparent and ethical business practices in country’s real estate sector. As per sources, the housing ministry has been asked to review the real estate bill explore that how it can be more consumer-friendly and to have better provisions for promotion of affordable housing.

Country’s Real Estate Sector

In review low cost housing and roof have been identified as a focus area by central government and it has promised the housing for all by 2022. Low-cost housing and roof to all have been identified as a focus area by the Narendra Modi government and it has promised shelter to all by 2022. TOI has learnt that there was a suggestion and strong argument during the Cabinet meeting that the provisions relating to Centre-state issues need to be made clearer in the bill. In current session of Parliament, central government has included the bill as one of the legislations for passage.

Recommendations in Real Estate (Regulation & Development) Bill:

The real estate bill was introduced in the Rajya Sabha in August 2014 and referred to the parliamentary standing committee for modifications and later committee had made several recommendations particularly in favor of consumers and greater check on unscrupulous developers, the housing ministry has rejected most of them. According to committee there are also several provisions in the revised bill with a single aim to protect the consumer’s interest. This has reference to recent cases in Noida where a developer had changed plans and built towers to increase economic viability without taking buyers into confidence. The real estate bill also included that the condition prohibits a developer to change the plan in a project unless 2/3rd of the allottees have concurred for such change.

As per new recommendations, now it will include checking the antecedents of project promoters before their registration is done and ensure that all real estate developers who have defaulted in two earlier cases be blacklisted. But later housing ministry has ministry rejected this by arguing that this a provision will work as a deterrent for the sector. The panel of committee had also recommended all real estate agents involved in sale of secondary market projects also need to be regulated through real estate bill. But this was not accepted. Similarly, the panel also suggested that promoters be made to enclose names of contractors, architects and structural engineers, which were also turned down.

Earlier housing ministry have allowed to builder to divert up to 50% of buyers’ investment in case of special projects to other real estate projects which are under criticism. But the original real estate bill had mandated the developer to put more than 70 per cent of the buyers’ investment to an escrow account to be used only for construction of that project.

Launching Eternia & Enigma in Mulund

Oberoi Realty has launched twin developments; Eternia and Enigma at Mulund area of the city. Oberoi Realty has so far developed over 36 projects at most strategic locations in all over the Mumbai on an area of about 6.5 million sqft of space and apart from that 24 million sqft projects are under development stage. The company is positive for the sales booking of the flats as this is the first project in the central suburbs for them.

About Oberoi Realty:

Oberoi Realty is one of best real estate developer, which is based in Mumbai, Maharashtra. Till now it has completed 32 projects covering approximately 4.979 million square feet of saleable area spread across the city of Mumbai. The main interest of Oberoi Realty is to develop the Residential, Hospitality, Office Space, Retail, and Social Infrastructure properties in Mumbai.

Eternia Project description:

The newly Eternia is spread on an area of 9 acres, where development will offer compact 3 BHK, premium 3 BHK and 4 BHK apartments will be available in different size. Enigma will have around 1,100 apartment units.

Enigma Project description:

Enigma is spread on an area of 9 acres with luxury 3 BHK and luxury 4 BHK apartments configuration. In Enigma project 600 apartment units will be available.

Financial position of Oberoi Realty:

As per reports, Oberoi Realty is set to raise Rs 650 crore for the development of Oasis Tower project in Worli. Report stated that the fund raising process is now at advanced stages of completion.

Accoridng to Vikas Oberoi, CMD, Oberoi Realty, “These two projects will offer the affordable housing options which are about 880 square feet and will cost less than Rs. 2 crore. Both these projects are on land parcels which are about 9 acres with two buildings each. So, on one project we have got two 3 BHK apartments and in the other one we have got 3 BHK and 4 BHK”. While commenting on new projects he added that, “In new upcoming projects company is planning to launch affordable housing, which will collectively come on 3.3 million square feet. So, it is like launching 10 buildings of reasonably big size projects for any other developer. In the same way our Borivali is a 25 acre land parcel which we will be launching altogether anywhere between March and June”.

Redevelopment projects

After facing a lot of opposition from real estate developers, the state government is implemented the affordable housing policy in city, which stipulated that certain portion of the plots will be kept to build low-cost homes free of cost.

This amendment was proposed by the urban development department by stating that real estate builders no longer have to carve out more than 20 per cent of their plots for public housing. Instead of that they can construct the cheaper tenements anywhere within the same administrative ward to cater the need of affordable housing in the city. But Housing experts questioned, the move is pointing out not many builders have plots in the same ward. . “Will developers be forced to buy another plot to construct these tenements?” asked industry insiders. In notice it was issued on Monday that, the government offered 50% free floor space index (FSI) to all real estate developers to build tenements on alternative plots in the same ward.

But real estate builder are in the mood to oppose this move because the Slum Rehabilitation Authority (SRA) provision already allows them to provide tenements in faraway wards. The mandatory 20 per cent affordable housing scheme will also apply on housing society redevelopment projects where the existing flats are less than 600 sq ft. If the existing flats are on the area more than 600sq ft, so real estate builders have to construct the additional tenements but need not hand them over to the state housing authority, Mhada. “It will be constructing either in a separate block or in a separate wing in the same building and allotted to the housing society for use as ‘service quarters’,” indicated the notice. This may complicate the certain things, as it will lead to tussles among housing society members on who should be allotted these tenements,” stated by the member of a housing society. So the department has proposed a 300 per cent premium on the “applicable rate” to be paid by the society if these service quarters are sold to outsiders.

The state government has clarified that 20 per cent for affordable housing will not be applicable to redevelopment projects for old and dilapidated buildings, clusters, slums, Mhada colonies and on defunct industry land. In these schemes more than 20 per cent of the basic zonal FSI is already utilized for low cost housing, it said. In Mumbai lack of affordable housing has reached to a crisis point as public agencies such as; Mhada able to build around 2.8 lakh tenements in the past 15 years. In past two decades SRA has provided 1.6 lakh tenements, a report released by NGO Praja in December 2014, showed that different public agencies such as; MMRDA, Mhada and SRA have been able to provide around 3.1 lakh homes between 1995 and 2014, of which 1.1 lakh tenements are still under construction.

Neera Adarkar, a architect and urban researcher stated that an average salaried person can no longer afford to buy a home in Mumbai. “A few years before during recession, when real estate developers could not sell their luxury apartments, they divided them into four parts and started selling homes of 500 sq ft each. This is not what affordable housing is about,” she said. In 2013, the report by Knight Frank (a global realty consultancy, listed Mumbai) indicated that the most unaffordable housing market in the country with 29 per cent of its under-construction dwelling units exceeding the Rs 1crore mark. We all know that in Mumbai the relentless price rise and higher concentration of premium projects had limited the purchasing ability of home buyers, it added.

Pankaj Kapoor, who is a property researcher in farm Liases Foras, stated that, “Affordable homes are only available 50km away from Mumbai, but even in these far-flung regions, 60 per cent to 70 per cent of the homes or flats or apartments have been sold to investors and not to the end-users”

Infrastructure development Mumbai

In past few years, Mumbai and other metro cities have emerged as the most preferred destination for property investment. After the budget of 2014 the ball of real estate sector is spinning in positive direction because new FDI norms, implementation of REITs and allocation of new funds for infrastructure development. Recently, Indian government has made it clear that there solo objective is to provide the affordable housing units and due to that they are implementing the new policies, which will be helpful to boost the economic growth. Property in Thane and Property in Mumbai is the one of the most preferred destination of investors and high end users because Thane and Mumbai is the most commercial areas and we all know here investment means more than 40 per cent ROI. It’s not easy for common man to own a Property in Thane and Property in Mumbai due to high budget, but now real estate developers are planning and constructing the new affordable housing units for middle class and all this is possible due to reduced size of apartments.

According to real estate experts, there are some areas in Mumbai, which will see a positive momentum and can play a vital role in the real estate market of Mumbai. Most of the Property in Thane and Property in Mumbai are comes in high budget, so just clear the pending inventories, developers are now ready to negotiate on the price and providing some great offers, so that they can attract the pool of investors and end users and after getting the money they will be able to invest in the new real estate projects. Property in Thane and Property in Mumbai are consequently growing and expanding with new commercial and industrial opportunities. In Thane and central Mumbai buyers have a option to purchase the 1BHK, 2BHK, 3BHK, 4BHK and luxury apartments in the price range of 25 lakhs to 2 crores, here apartments size vary from 1,000 sq ft to 3,500 sq ft. Mumbai is famous in all over the world for their super-luxury projects and due to that this city is attracting the Indians as well as NRI’s for investment.

Property in Thane and Property in Mumbai why are the hot-spot? Because of high returns and luxury apartments? The answer is both, realty market in Mumbai is attracting the investors and end-users of premium segment as well. But due to high cost it’s not a cup of tea for everyone to won a Property in Thane and Property in Mumbai. Thane and Mumbai fetch the high rates of appreciation due to metro connectivity, well developed road network, fast-paced development in infrastructure and availability of other basic amenities such as; colleges, schools, super market, shopping malls, banks, ATMs, hospitals and other places. In present even some people are ready to take the loan just for making the investment in these reasons because they know that this investment will bring the good returns in future.

Capital requirements for real estate firms

With its emphasis on attracting Foreign Direct Investors (FDIs) to invest in India’s real estate, Narendra Modi-led government is softening the rules and regulations for foreign direct investment in construction and housing sector in a big way.

The new central government norms are expected to allure the FDI inflow in the country. The relaxed rules pertain to the lowering the minimum built-up area and capital requirements for real estate firms. It is expected that the relaxation in the rules and regulations will attract investments in the sluggish real estate sector. The Union cabinet resolved to lower the minimum built-up area requirement for FDI in construction projects to 20,000 square meters. Earlier, the minimum built-up requirement was 50,000 square meters . Besides, the minimum capital requirement has been reduced from $10 million to $5 million, an official statement after the meeting said. So far, 100 per cent FDI was permitted in realty with stringent terms and conditions, which included a lock-in period of three years, during which the investment could not be repatriated.

It is expected that the lowering of minimum requirement for built-up area and capital may enable the Modi government to fulfill its promise to build 100 smart cities within next six years. The statement issued to the newsmen said that the funds will have to be fetched in six months soon after the beginning of the residential project. “The investor will be permitted to exit on completion of the project, or after three years from the date of final investment, subject to the development of trunk infrastructure,” the statement said.

There are plans by the government to permit repatriation of FDI, or the transfer of stake by one non-resident investor to another even before the completion of the project. The government may authorize the Foreign Investment Promotion Board to consider these proposals on a case-to-case basis.

Reacting to the fallout of the relaxation of rules for FDI, Akash Gupta, executive director of Price Waterhouse Cooper told a newspaper that the new rules would boost the development of smaller projects in urban areas, since the availability of land in metropolitan cities is low. Besides, the smaller projects could be expedited faster. He further said that the relaxed rules would attract increased funds into the real estate sector.

The move is also aimed at inducing investments in unchartered territories and boost development of affordable housing and construction of smart cities across the nation. It will facilitate the realization of government’s vision of housing for all.

Housing Mission named after Sardar Patel

The ambitious urban housing mission to ensure housing for all by 2022 will be soon launched and will be named after Sardar Patel, said Minister of Housing and Urban Poverty Alleviation M. Venkaiah Naidu. The government is taking many steps to convert the vision of housing for all by 2020 to reality and to boost the affordable housing. The government will give priority status to affordable housing. Since the vision of housing for all by 2022 is to be realized, hence the government will streamline the approval process and also reduces the total cost of ownership for the end user of affordable housing on an urgent basis.

Addressing a press conference to present the vision of the central government for the country, Minister of Housing and Urban Poverty Alleviation M. Venkaiah Naidu said, “under the Sardar Patel Urban Housing Mission, 30 million houses will be built by 2022, mostly for the economically weaker sections and low income groups, through public-private-partnership, interest subsidy and increased flow of resources to the housing sector,” Naidu said. The minister made this announcement while speaking at the ‘World Habitat Day – Voices from Slums’ programme here

Naidu said an investment of about Rs 50 lakh crore would be required over the next few years for various initiatives such as housing for all (Rs 22.50 lakh crore), urban infrastructure development (Rs 16.50 lakh crore), urban sanitation (Rs 62,000 crore), and building smart cities. “The Government is focusing on ‘in-situ’ development of slums by encouraging vertical construction,” he added. The central government will remove major bottlenecks like land acquisitions and government clearance for the real estate sector, especially affordable housing projects. The Modi government wants everyone in the country to have a roof over head and hence no efforts will be spared to realize the dream of the development of affordable housing for all countrymen, said the minister.

The New Chief Minister of Maharashtra

The first BJP government of Maharashtra is committed to providing roof over every head and accelerating housing industry in Maharashtra to realize the vision of housing for all by 2020, said Maharashtra CM-designate Devendra Fadnavis.

Q: What steps should government take to convert the vision of housing for all by 2020 to reality and to boost the affordable housing?

A: The government will give priority status to affordable housing. Since the vision of housing for all by 2022 is to be realized, the government will streamline the approval process and also reduces the total cost of ownership for the end user of affordable housing.

The new government will remove major bottlenecks like land acquisitions and government clearance for the real estate sector, especially affordable housing projects. Our government wants everyone in Maharashtra to have a roof over head and hence we will do everything within the legal framework to facilitate the development of affordable housing.

Q: Will you adopt BOT policy for development?

Developmental projects should be undertaken on ‘Build, Operate and Transfer’ (BOT) basis. This is one of the ways of development. But in the last few years, some contractors have gained disproportionately out of such projects. Nothing was done in the past to augment the revenue of the state. But this will not happen again. Efforts will be made to augment the revenue of the state by proper evaluation of every project and no undue favours will be granted to any contractor.

Q: What will be your order of priority as the CM?

A: Development of infrastructural facilities, improving the agricultural productivity, industrial development, law and order, standard education in schools and colleges, besides basic facilities of water, power, road, bridge, irrigation and airport.

Q: Since you hail from urban area, what is your idea of agricultural development?

A: I am the son of farmer. I know that it is essential to improve the productivity of the farmland. Unfortunately nothing has been done by the past government. A special machinery will be set in place for this purpose. There will be proper planning for ‘Bagayati and Jirayati’ forms of farming and ample water will be supplied for irrigation. Stress will be on sprinkler irrigation which will lead to the saving of water.

Q: What is your idea of industrial progress?

A: For the promotion of industry, red-tapism will have to go. Efforts will be made to remove all hurdles in the path of industrialists desiring to set up industries which take as many as two years for establishment as of now.  No delay can be tolerated in this competitive age. Technology gets obsolete in no time and hence fast clearances will be granted to industrial projects. Decision will be taken on increasing the FSI in the industrial estate. Effective implementation of Narendra Modi’s ‘Make in India’ will be done in Maharashtra and I will put great emphasis on IT development in Maharashtra.

Q: When in opposition you had flayed the government for turning Maharashtra into debt-burdened state. How will you tackle the situation?

A: Actually, I am not opposed to seeking loans. What is important is purpose for which the loan is taken for and how it is utilized, whether assets can be created out of them. When the loan is spent on unproductive things, the state enters the debt trap. Unnecessary expenditure will be lessened; quality of official cost will be examined, and newer sources of revenue generation will be created so that the state GDP also goes up.

National Real Estate Development Council

India will require to build at least 30000 to 35000 dwelling units daily for 8 years to meet the housing needs of the country, says the National Real Estate Development Council (NAREDCO) report.

A majority of these houses need to be in the affordable segment requiring investment of more than US$2 trillion since a fifth of urban and rural households have limited access to housing facilities.

It is estimated that in the next eight years, India needs to invest more than Rs 125 trillion (USD2 trillion) at current prices to meet its housing needs, which is over Rs 16 trillion (USD260 billion) per annum.

“Large-scale development of affordable housing projects is still a challenging proposition for many private developers,” it said. The current housing shortage in urban areas is estimated at 19 million units. Of this, about 95.6% is estimated to be from economically weaker sections (EWS) and low income group (LIG) households, who cannot afford houses costing above Rs 15 lakh.

“A major issue in the real estate sector, which has increased risk affecting the availability of liquidity is the widening of the real estate project life cycle. A project today takes anywhere between seven and eight years, of which about 20%-30% of the capital investment happens in the initial years. Liquidity from formal channels is available only for four to five years, and that too at the start of construction. Thus, the lack of long-term capital in the sector could be restricting entry of new players into the market,” Said Neeraj Bansal, KPMG India head real estate and construction.

Real estate development across Eastern suburbs

Eastern Mumbai suburbs are among of the fastest growing residential centres in Mumbai metropolitan region. This area is advantageously located in proximity to other industrial sub-markets such as Bhiwandi, Badlapur, and Dombivli-Kalyan. Situated in Mumbai Metropolitan Region, these eastern suburbs have attracted a lot of heavy investments from established builders and developers.

The Mumbai Metropolitan Regional Development (MMRDA) authority has developed several residential zones that have led to this sub-market’s emergence as a major residential hub. The demand for homes from workers employed in these industries is therefore considerable and constantly rising. This provides eastern suburbs with all the attributes of an ideal real estate investment market, offering low entry points and high appreciation potential. Developers have already acquired large land parcels in eastern suburbs, while others are actively seeking such parcels for development. Some residential projects by elite developers have already been launched. This sub-market has especially high potential for integrated township projects and affordable housing undertakings. The eastern suburbs will continue to attract demand from the large existing workforce as well as additional manpower that will migrate there over the course of the next few years. The government of Maharashtra has already extended the jurisdiction of the MMRDA for the eastern suburbs up to Kasara and Karjat. The planned infrastructural initiatives in this region will further aid the emergence of these suburbs as a major real estate growth node. There are plans to set up a cargo airport, with industrial firms from abroad showing keen interest in establishing their manufacturing facilities in the area. With industrial growth acting as a pull factor for this sub-market, real estate development across the eastern suburbs’ various segments will find increasing traction going forward. The real estate story has just begun for Mumbai’s eastern suburbs. Residential prices in these areas are already up and give every indication of healthy rise in the future. This is a market that is especially appealing for large plot investments, and long-term investors who value the success formula of its unique combination of growth drivers.