Air India – Real Estate

Air India, the national carrier is ready to take off its plan for real estate monetization, as AI has finalized a deal to sell its 4 apartments in South Mumbai. After three years of gap, again Air India has finally started to sell its properties in Mumbai. Following by many unsuccessful attempts, this national carrier has finalized made a deal with public sector lender State Bank of India (SBI) to sell its 4 apartments, which is located in south Mumbai and the price of deal is Rs 88 crore.

Recently, the Union Cabinet approved the sale of these properties and after that now it is expected that apartments will be handed over to the State Bank of India in the month of December 2015, as per the statement of a top official. As per the statement of an Air India spokesperson, “This is first time when we have actually made deal as per terms and conditions laid in the turnaround plan”.

All the four apartments are 3 BHK flats in Sterling Apartments with measuring carpet area of 2,033 sq ft and the property is located at Peddar Road, South Mumbai. These properties were the houses of top executives of Air India, but now these key officials of national carrier have relocated to New Delhi and after that these apartments were identified as surplus and were put up for deal with SBI.

Turnaround Plan of Air India:

For its turnaround plan, Air India also sought cabinet approval to sale its land in Kolkata which is worth Rs. 25 crore and a residential property in Mauritius (worth Rs. 3.5 crore) to the NBCC (National Building Construction Corporation). Air India, needs to sell the property or real estate assets of Rs 5,000 crore to repay the high-cost debt as well as to generate few more funds for further investment and to meet the working capital, as a part of its turnaround plan of AI. It is expected that in near future AI will sell parcels of land as well as residential and commercial properties in Indian and abroad.

Chhota Rajan

In present ED and CBI both are focusing on the criminal cases of Chhota Rajan. Now it’s time when Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) should investigate the assets and investment of Chhota Rajan in different parts of country.

According to reliable sources, investigating team of CBI would have a word with Mumbai Police about their findings and other data about the assets and investment of Chhota Rajan in Mumbai, abroad and other parts of country. However; according to sources Chhota Rajan owns property in Indonesia, China, Malaysia, Zimbabwe and India. According to one of the CBI officer, we would grill Chhota Rajan on his assets and investment once we will indentify his properties and after that we will contact the Enforcement Directorate to take appropriate action and initiate further proceedings in this regard. At that time CBI is expecting that Chhota Rajan will prove to be a mine of information about the underworld.

According to sources of Mumbai Police, apart from extorting builders, Chhota Rajan also had interest in the real estate properties and due to that he have invested in many properties in Mumbai and aboard. According to CBI officer, “it has come to our notice that from past few years, Chhota Rajan has been showing his interest in the real estate of Mumbai and due to that he have involvement in grabbing of land and settling land disputes in exchange of money and partnerships with builders in projects. In most of the cases he prefer to take 2o per cent partnership with real estate builders whereas; in some of the cases he had even financed the projects.

Real estate investment

In present location issue is keeping the buyers away; but better ROI, an incentive, benefits of tax breaks are still attracting the investors as well as end users towards the real estate market. In India, affordable segment are finding buyers but most are investors not those who are planning to stay in those homes because of the location issue as the home is located too far away from offices and have little support infrastructure, analysts and trade experts said. Peoples are making the attempt to invest in real estate sector because government have increase the accessibility of housing through tax breaks and other incentives or benefits, which are therefore going towards those more interested in turning a profit.

Almost 50 per cent of the total housing stock of 293 million sq. ft sold in the last fiscal year, which was ended on March 2014 and the prices of those property was less than Rs.50 lakh, as per the data of real estate research firm Liases Foras. Flats which cost Rs.25-50 lakh accounted for 37 per cent of the total housing stock sold in the same period, while those below Rs.25 lakh had a 13 per cent share. Mumbai is the city which known for its high property prices as well as ROI, accounted for 13 per cent of the sale of houses priced below Rs.25 lakh and 28 per cent of houses in the Rs.25-50 lakh range. According to Pankaj Kapoor, The Managing Director of Liases Foras, “Most new launches in the last three quarters are in the affordable category”. The more he added that the rise in sales in part to state government regulations which have been favorable for both real estate developers and buyers in the relatively more affordable segment.

In December 2014, the Apex Bank (Reserve Bank of India) allowed real estate developers and housing finance companies to raise up-to $1 billion through external commercial borrowings to promote housing projects, which also referred to as low-cost because they are cheaper than more upscale properties. The budget of 2013, proposed a Rs.2.5 lakh deduction on the total taxable income on home loans of less than Rs.25 lakh, applicable to loans from banks and non-banking financial companies (NBFCs). Such housing projects are profitable business for real estate developers as in Mumbai, they provides an internal rate of return (IRR) of 45 per cent with gross margin of 24 per cent. According to report of Monitor Deloitte in 2010, a consulting firm, “Most of the flats are being bought by investors rather than genuine low-income end-users despite the low prices and interest rates, since these flats are being built in far-flung places with poor connectivity and social infrastructure, real estate and analysts”.

For example, If person buys such a home in Karjat, which is one of the last stops on Mumbai’s suburban Central line,  will have to travel about 85 km if his/her office is in the central business district of Nariman Point. That’s about two hours by train each way. According to Kapoor, “Trans Harbour Link have easy connectivity between the the mainland and the island city and provided a much-needed boost for affordable housing”. The Trans Harbour Link have 22 km road across the sea which will connect the island city and Navi Mumbai. It is expected that, Trans Harbour Link will be operational by 2018-19. Now investors are looking to it as excellent opportunity as it has connectivity and support of infrastructure. According to Om Ahuja, the chief executive, “Most projects are not affordable in terms of living and these projects are bought by investors who park their money. If it is a wrong product, their investment gets stuck”.

According to Brotin Banerjee, MD and CEO of  Tata Housing, “Tata Housing sells these homes under two different national banners; Shubh Griha (Rs.4-13 lakh) and New Haven (Rs.25-40 lakh). It plans to launch more affordable projects across different consumer segments in Mumbai, Bangalore, Gurgaon, Bhubaneswar and Kolkata.” VBHC (Value and Budget Housing Corp.), has many affordable housing projects, which are in Delhi, Chennai, Mumbai and two in Bangalore. It’s planning to launch one more in Delhi and Mumbai in the next few months, according to Vivin Mathew, chief executive, western region. On March 2014, GPL (Mumbai-based Godrej Properties Ltd), the realty arm of the Godrej group, launched an affordable housing scheme at its Godrej Garden City township project in Ahmedabad. In real estate market some of the real estate developers are using finance and marketing techniques to attract genuine home buyers or investors in the Rs.6-25 lakh range.

Poddar Developers Ltd, a Mumbai based real estate developer has 25 per cent of the apartments in one of its project to families availing loans from NBFCs such as Gruh Finance Ltd, Mahindra and Mahindra Financial Services Ltd and Muthoot Fincorp Ltd. NBFCs offer rates that are slightly higher than that of commercial banks, but have an easier documentation process, making it a better option for low-income borrowers. According to Rohit Poddar, MD of Poddar Developers Ltd., “We don’t sell more than one flat to a single buyer. We have a 75:25 mix of actual home buyers and investors”. In last two years, Poddar Developers has sold more than 2,500 apartments in Badlapur in Thane district and Karjat in Raigad district, in the range of Rs.3.5-12 lakh each. Recently they have launched the similar project at Atgaon in Thane and is planning 40,000 sq. ft of land by the end of this financial year.

According to Rashmi Housing Pvt. Ltd, “It’s also giving a loan to home buyers without interest to drum up interest in homes that cost below Rs.25 lakh. According to Yogesh Bosmiya, Director of Rashmi Housing, “Around 30 per cent of our home buyers or invetors they are availing this loan facility and we are mostly getting the end users”. Rashmi Housing Pvt. Ltd, said that they has sold more than 3,000 units in the Mira-Bhayander area of  Thane district since 1999 and is developing another 4,000 units in the same area. Bosmiya said the profit margin is 20-25 per cent. Whereas; some of the real estate developers are constructing the hospitals and schools to improve the existing public schools, to create social infrastructure in a bid to attract families.

Ranbir Kapoor and Katrina Kaif

Recently, Ranbir and Katrina was the talk of town because they were shifted into a rented apartment at Mumbai’s Carter Road. Earlier, Sunny Leone shifted in rented apartment at Versova after searching for an ideal pad for nine months, before that she was living in a hotel. Other known celebrity are Jacqueline Fernandez, Prabhudeva, Aditi Rao Hydari, Chitrangada Singh and Imitiaz Ali who are the prominent tenants in Mumbai and living on rented property since the beginning of their careers in Bollywood.

Living with stars and celebrities can be a dream come true for you, and as well as you can get a chance to enter in the media industry. But as a landlord you should have some of the important ‘must-have’ qualities as well as your property or apartments should have same. This trend shows that even celebrities prefer to rent apartments or properties rather than buy one in a city with ‘exorbitant’ real estate prices. Celebrities consider following factors while taking the property on rent;

Property Design:

In present all the modern actors look for fully furnished apartments along with creative interiors and best view that can relax them during their free time. So if you wish to give your property on rent to any celebrity than you should design your property according to needs and necessities of celebrities.

Frequent Partying:

Celebrity always looks for easy-going landlord because of their professional relation and regular parties. if you are keen to earn the desire income from well know face of the TV or Bollywood industry. As a landlord you should never put the objection on their late night parties, loud music and visitors, because it’s their professional culture and without it they will never agree to rent your property.

Premium Locations:

All celebrity love to live in premium locations such as; Versova, Juhu, Bandra West, and Andheri West because these localities are nearby Film City in Goregaon East, so it will save their time while traveling.

Privacy and Independence:

Most of the celebrity prefers to live in peaceful location like other tenants, so if you wish to give your property on rent than develop your property in peaceful atmosphere. Try to give them as much independence and privacy within your resources.

Fluctuating Incomes:

We all know that acting is not a regular profession, hence you may face unavoidable delays in payment from them and as a good landlord you need to understand that.

Housing Society Approvals:

All celebrity to know the rules and regulation and before taking the property on rent them can ask for the document of society approval and other documents. In Mumbai most of the housing societies are reluctant to rent homes for those who all are in the acting field. Make sure that your resident associations don’t have any objection if you give your house to any celebrity.

Rental Agreement:

It’s recommended to enter in the rental agreement before leasing your property to a known face because this simple step can avoid future hassles when and if it comes to evicting the property due to breach in society by laws.

According to marketing manager of well known construction company, Luxury apartments and villa projects are in huge demands because investors are buying the property and later they are earning lakhs of rupees by renting the property to well known faces. So it is recommended that if you wish to rent your property to some celebrity than buy a property will all luxury and basic amenities.

Times Property Expo, 2014

The Times Property Expo is going to provide excellent opportunities for the real estate companies and developers to exhibit the exceptional properties. This is the pivotal trade event for building related business, and it is the great opportunity to get the recognition by leading buyers, and investors in real estate market. The Times Property Expo 2014 will be held in BKC Ground in Mumbai for the duration of four days, ie 27 to 30 Nov. 2014.

The Times Property Expo 2014 Mumbai is the only event and most significant property trade show in India for some serious business in real estate market. Because of advertisement and publicity this expo will get the huge attention from high end buyers and it will be good platform to display high-end properties. In India, real estate sector is booming, and we all know that it is contributing the huge percentage in the nation’s economy. In present, all of the real estate properties providing the international standard and quality right from commercial properties to residential projects. Mumbai is the global hot spot for foreign real estate developers and standing next to the real estate market of London and New York. In India, property investors and buyers have become price and quality conscious and they are searching for the best property in most affordable price. From past few decades Indian real estate market is seen to be more investor-friendly as it is attracting the NRIs and foreign investors, which is the main reason for the boost in real estate market that drive demand to greater heights.

Over a time traditional legacy of architectural richness and drawing inspiration have leveled up the lifestyle experiences, now people are looking beyond mere buildings today. New real estate projects are showcasing their unique and iconic creations to enhance lifestyle experiences and end user experiences by offering comfort, luxury and style. And now Times Property Expo 2014, Mumbai is here to deliver all this at one stop platform. Times Property Expo 2014 is grand invite for the developers, investor’s and buyers. Here at BKC Ground Mumbai, a world class opportunity awaits the real estate developers to come together and develop the network with an elite clientele of individual, organizations and institutional investors, who appreciate quality and affordability to invest in their real estate projects, which deserve the best kind of buyers. Here buyers and investors will be able to make direct contact with builder or his authorized representative for any queries without losing time. And it will eliminate the middle man or agents, so that buyer can save their money (agent fee).

Life is all about taking the right decision at right time and The Times Property Expo 2014, which will kicks off at , BKC Ground Mumbai is the great opportunity and it promises something more to everyone who is interested in real estate.

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.

Upcoming projects in Mumbai

Mumbai is the financial hub of country and driving the maximum economic growth in comparison of rest of the cities. From past many decades, Mumbai is attracting the investors and it is the main reason for the success of this commercial hub. Many premium real estate developers are launching the new projects in Mumbai, which includes commercial projects in Mumbai as well as residential projects. Some of the upcoming projects in Mumbai are; Ornate Synergy in Andheri West, Hubtown Jewell in Andheri West, Kabra Jay Vikas in Malad West, Geeta Platinum in Mira Road and more.

In Mumbai, commercial and residential both projects are in huge demands and to cater the needs of people premium developers are developing the new projects for affordable as well as for luxury market. upcoming projects in Mumbai are reflecting the positive trend in real estate market of Mumbai and it includes commercial projects in Mumbai and as well as residential projects. According to real estate developers if end user and investors are looking for new investment, so it’s good time to buy the property in Mumbai. Investing in new projects in Mumbai can bring the good returns in future because real estate market of Mumbai is the most favorite destination of investors, no matter they are from India of they are NRIs. Some developers such as; Manohar Vikas Group, Mohan Group, Poddar Group and Ankita Builders are constructing the premium as well as affordable projects in Mumbai.

Features of upcoming projects in Mumbai:

Mumbai is place, where the cost of residential as well as commercial project prices are not less than London and New York, in short we can say that Mumbai is the hottest property destination in the world. Mumbai always shows the latest trend of real estate sector, and even after that developers are willing to construct the affordable projects in Mumbai and now even Indian Government is taking the initiative to offer the affordable housing for the residents of India. New projects in Mumbai are available in different range according to the need of customer. The latest trend in real estate has made middle and upper middle level to come to together and make the investment in real estate sector to get the best outcome of their money. Thane, Navi Mumbai and central Mumbai is the favorite destination for who want to invest in commercial projects in Mumbai.

On the other side developers are playing with the decision of investors and end-users by launching the new lucrative schemes for commercial projects in Mumbai and upcoming projects in Mumbai, Even now to clear the old inventory of real estate projects developers are ready to negotiate and offer the gifts such as; free registration, car, AC, modular kitchen and more. New projects in Mumbai are the great option for new investment because it could bring the good ROI in future.

Increasing the speed of redevelopment

As the speed of rebuilding of ceased structures by MBRRB was not adequate enough to cover the entire ceased structures in the Island City of Mumbai, Government decided upon involving tenants, landlords and private developers for increasing the speed of redevelopment.

As per Development Control Rules FSI or Floor Space Index is the area of construction permitted on a particular land. Permitted FSI in Mumbai depends on various factors such as land’s location, kind of current residence and the project to be developed.

Because of the conflicts between while Navi Mumbai Municipal Corporation (NMMC) and City and Industrial Development Corporation (Cidco) board over the FSI rates, Government of Maharashtra is indecisive over finalizing the FSI for redevelopment of dilapidated buildings in Navi Mumbai area. NMMC has offered 2.5 FSI previously, whereas Cidco board agreed upon 3 FSI. Government has to select either of the two choices or find an agreeable solution.

Each of these proposals has their pros and cons. Though Cidco’s offer may look more convincing and transparent to the residents and they also state that their proposal will generate housing stock for economically weaker section but it also comes with the condition that members of the society will not have the right to choose their developers.

As per NMMC, 3 FSI proposed by Cidco will produce infrastructure problem for the city. On the other hand, Cidco says that NMMC’s proposal will be more helpful to developers rather than occupants. This way the developers will load the property buyers with added cost as they have to pay premium for Free of Floor Space Index Area.

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.

Minimal drop in property sale in Mumbai

Even as Delhi and its surrounding region witnessed a 20% drop in sale, Mumbai saw marginal drop at just 2 per cent while Chennai and Hyderabad and Mumbai saw 18% and 13%, according to the 2014-15 real estate research survey by Liases Foras. Liases Foras, a non-brokerage firm, is into real estate researches. The survey was released on Thursday. It says that property sales across tier I cities in the country have dropped.  Proving that change in guard at the Centre has not changed the property market scenario.

The survey says that construction activity has increased in affordable and ultra-luxury segments in Mumbai. Flats that cost less than Rs50 lakh are selling more. Besides, the average prices have gone up in Greater Mumbai and Mumbai metropolitan region. In Greater Mumbai, this year a 2BHK costs Rs2.30 crore. Last year it was Rs2.14 crore… in MMR, a 2BHK flat cost is Rs1.32 crore while it was Rs1.20 crore last year, according to the report.

According to Pankaj Kapoor, MD, Liases Foras, “Currently, property market has been quite inflated and over-stretched. No one, including end-users and investors, wants to invest his/her money… and that has resulted in decline in property sales” . “Besides, there is a huge gulf between the current rates and expectations of end-users. They are still waiting for price correction. All things are attributed to the stagnant sales in Mumbai and other cities,” he told a newspaper. “Buyers cannot afford such costly houses. But developers have little choice. The land cost is already high and buyers have to pay various government taxes. If we meticulously calculate, buyers are forced to spend almost 10-15% of total flat cost on stamp duty, registration, valued added tax, service tax etc. To make houses affordable, the government should slash taxes,” Manohar Shroff, general secretary of the Maharahstra Chamber of Housing Industry (MCHI) demanded.

The Narendra Modi-led government cannot increase peoples’ income overnight. The current property market is beyond the reach of common man. An ineffective market will continue for some time. Despite low sales, developers are not bringing down prices. But they are offering sops such as waiving off stamp duty and registration charges to lure buyers.