favours for home buyers

The Real Estate Bill which was passed in the Rajya Sabha on Thursday largely seeks to protect the interest of home buyers, at the same time aims to bring more transparency, accountability and efficiency in a sector which has hitherto been fundamentally unregulated and unorganised.

Delays in project delivery by developers, zero accountability on builders and opacity in project details and payment structures has blemished the credibility of the real estate sector for a long time resulting in lack of trust of buyers, which this bill aims to set right.

Moving ‘The Real Estate (Regulation and Development) Bill, 2015′ for consideration and passage, Urban Development Minister M Venkaiah Naidu said, it will not only bring transparency but also help in regulating generation of black money, to which the real estate sector contributes the largest in the country.

Here are things home buyers need to know and how the bill speaks in favour of them –

• Timely completion of projects: the bill ensures the completion and delivery of flats on time as stringent regulations are imposed on developers for any violations of the Appellate Tribunals or monetary penalties or both.
• Carpet area to be defined: The bill defines carpet area as net usable area of an apartment which means now a home buyer will be charged only for the carpet area. This comes as a huge relief to home buyers as developers now-a-days quote on super built up area or sellable area which is nearly 30-40% more than the usable area.
• Punish developers, real estate agents: as per a provision of The Bill, imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both can be awarded. Besides, Misleading advertisements will be punishable offence where first-time offenders will be fined 10% of project cost and repeat offenders could face a jail term.
• All clearances before project launch: the Construction of a project can start only after getting statutory clearances. Prior to the launch of the project, developers will have to get all the clearances necessary to go ahead with the development.
• Part of home buyer’s money to be kept till project completion: A minimum of 70% collections from buyers should be deposited in separate escrow account to cover the cost of construction and land. The bill prohibits unaccounted money from being pumped into the sector; 70% of the money has to be deposited in bank accounts through cheques.
• Registration of projects with Regulatory Authority: The Bill provides for registration of all real estate projects with Regulatory Authorities to be set up, which will require developers to disclose project information as well as details of the promoter, project, lay-out plan, land status, status of approvals, and agreements along with details of real estate agents, contractors, architects and structural engineers.
• Developers to provide after sales services: The Bill has increased the period from 2 to 5 years for developers to be accountable for any structural defects arising within 5 years of project construction. Developers cannot change architectural plans without the consent of two-thirds of home buyers.
• Speedy redressal of complaints: Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days.
• Delays to attract interest: Both builders as well as home buyers will have to pay the same interest rate for any delays on their part.
• Insurance on land title: to benefit consumers in cases where the land titles are found to be defective, The Bill provides for an insurance of the land title.

Blackstone group to invest Rs. 450 cr in commercial real estate

In a pure equity transaction, the world’s biggest private equity player in real estate, Blackstone Group, is at an advanced level of talks with Salarpuria Sattva Group to pump in nearly Rs 450 crore in its 30-acre commercial property coming up in Knowledge City, Hyderabad.

After being one of the most active buyers of commercial properties across the country last year, this will be the first real estate investment by the New York-based company in 2016. “Although the fund has by and large picked up ready and income-generating office real estate projects, this will be one of the few under-construction properties that Blackstone is investing in,” said sources familiar with the development.

The Knowledge City project in Hyderabad is a land parcel of about 200 acres that was sold to nearly 13 companies for Rs 2,000 crore by the Andhra Pradesh government in 2008. Salarpuria Sattva purchased 30 acres in the project for an estimated Rs 400 crore. The Salarpuria project is expected to have a total saleable commercial space of 6.5 million square feet to be developed in phases over the next five years.

Trump Group to construct luxury towers in Mumbai and Pune

Possible Republican nominee for US presidential elections, Donald Trump has recently spoken about India by stating how well the country is doing without being talked about.

Adding further he stated, “I have big jobs going up in India” referring to the two luxury real estate projects rightly named ‘Trump Tower’ that are coming up in Mumbai and Pune.

Signing a brand licensing agreement three years ago, Trump Group will be constructing a 75 storey tower in Worli in association with Lodha Group and a 22 storey twin tower in Pune with Panchshil Realty.

The projected real estate project includes a promise of “a host of exclusive lifestyle privileges, including a 24-hour Resident Manager and white-glove services, access to global Trump luxury properties and for the first time in India — a fractional membership to private jet service exclusively for Trump residents.”

Spread across on a 2.5 acre site with 44 luxurious condominiums across two towers of 22 storeys each, Trump Tower Pune will be the tallest residential building in that city. Each floor will have one expansive apartment of approximately 6,000 sq. ft. with five bedrooms and an exclusive home theatre room.

Adding further, the company stated the real estate property will have an exclusive range of carefully selected lifestyle amenities and services including fitness and recreational options, concierge service, pick-up and drop laundry service, and for the first time, an exclusive art gallery. There will also be a dedicated level for world-class leisure facilities such as John Abraham fitness centres, yoga room, jogging track, kids’ play area, swimming pools, library, business centre and game rooms.

Reviewing the proposed project, Pankaj Kapoor, Managing Director of real estate research firm Liases Foras said,  “These projects are for the high-end luxury market and they do not represent the market at large. Also, it is not that only because it is named Trump Towers, the companies are gaining from it in terms of sales. It is mainly the location and facilities which matter to the luxury market as well as the affordable housing market,”

ASK Group Planning to Invest up to Rs 1,500 crore in Indian Real Estate Market

Ask Group, which is one of the Financial Services Firm is now planning to invest up to Rs 1,500 crore with an aim to set up its own equity investment unit for the Indian real estate market in the current year as it seems that that the demand for mid-segment housing projects could increase. In year 2015, the firm has invested more than Rs 600 crore through three equity deals in real estate projects.

Previous Investment of ASK Group:

According to Amit Bhagat, the MD and CEO of ASK Property Investment Advisors, “In the year 2016, our company will deploy from Rs 1,000-1,500 crore as equity investment in the real estate market of India”. For ASK Group the largest investment deal was last month when they invested Rs 365 crore in a housing project of Rajesh Lifespaces at Vikhroli in Mumbai. Apart from that the company has also invested Rs 125 crore with ATS Group in project which is coming up in Noida and Rs 112 crore in project which is coming up in Purvankara, Bengaluru. As per the statement of Amit Bhagat, “Now we are focusing on the equity investment in the mid-income housing projects, which could have the ticket price of Rs 50-75 lakh bracket and we are expecting that real estate market will remain buoyant in this segment”.

In last five years of duration, ASK Group has invested more than Rs 2,500 crore in real estate market of India. Now the company’s main objective is to invest into the mid-income housing projects in five major cities such as; NCR, Bengaluru, Chennai, Mumbai and Pune. According to Bhagat the company is into the process to raise the s 1,500 crore from domestic and offshore investors, however; the fund raising exercise could be completed in next one to two months. The more he added that due to counter cyclical opportunity, now there are many deep-pocket institutional investors and large funds investors are looking for options to invest into the Indian real estate market.

Through its real estate business ASK Group has manage the funds of up to Rs 3,300 crore and it has committed in 19 projects with more than Rs 2,000 crore. ASK Property Investment Advisors is planning to set up the advice real estate dedicated funds.

L & T Realty is looking for the investors and partners in Navi Mumbai and Bengaluru

Larsen and Toubro Ltd’s real estate development arm L & T Realty Ltd is now seeking for the real estate investors and development partners for few projects which are about to come in the Bengaluru and Navi Mumbai as L & T Realty is planning to monetize its retail mall portfolio with an aim to use its land for the construction of offices. We all know that L & T Realty Ltd has huge real estate development portfolio and it is about 50 million sqft, and it includes both upcoming and ongoing real estate projects.

Projects of L & T Realty in Navi Mumbai and Bengaluru:

L & T Realty is the four year old firm from Larsen and Toubro and now its planning to bring developer partner for its Hebbal projects which is coming up in Bengaluru and in this project L & T Realty is developing residential apartments on the area of 45 acres, apart from that company is also planning to develop remaining 20 acre area with the help of joint venture partner. However; when it comes to Mumbai, so TOD (transit-oriented development) project which is coming up in Seawoods, Navi Mumbai, so here L & T Realty is looking for the strategic investor for the development of 1 million sqft retail space. However; the TOD project is coming around the railway station of Seawoods— Darave. Apart from that this developer is also coming up with 4 million sqft of office space as a part of 40 acre contiguous development under the Seawoods Grand Central project.

Recent transactions of L & T Realty:

Recently, L & T Realty has sold its commercial real estate project to Carnival Group in Rs.1, 785 crore and it was located in Chandigarh. This commercial real estate project includes a Hyatt hotel, office premises with a central courtyard and Elante mall. With the transaction of Chandigarh, L & T Realty exited from its real estate business in northern India and now its planning to focus on the projects which  are coming up in Chennai, Hyderabad, Mumbai, Bengaluru and Navi Mumbai. According to Shrikant Joshi, CEO of L & T Realty, “It’s not our policy to run malls and due to that we want to monetize them as we continue to build them in our projects. At this point of time in the Hebbal project, our company is planning to bring a joint venture partner for the development of office space. We are hoping to conclude all these transactions next year”. The more he added that In Seawoods, we are seeking for the investor partners, but we want someone who can be the worthy successor.

There are few developers which are showing their interest for Hebbal project and they are; Assetz Property Group, RMZ Corp. and some other developers and investors from Singapore. It is expected that by 2016, the L & T Realty will start to deliver the home in its projects which are in Seawoods and Powai in suburban Mumbai. Last year, the real estate market has under gone the number of challenges and due to that now buyers want to move with bigger and branded developers. According to Joshi, “Our strategy is to continue construct the projects which we have and on the same time we are looking for the joint venture partnerships with outstanding partners.

Due to brand value there are several branded developers such as; Godrej Properties, which have done well in the period when most of the developers where struggling. According to real estate experts, home buyers always shows a lot of faith in the larger brand association because they assure them with delivery capability, brand equity and goodwill.

National Green Tribunal

Recently, the NGT (National Green Tribunal) has imposed stay on the permissions of all new building construction which comes in the vicinity of the Sanjay Gandhi National Park and it is expected that this move can leave negative impact on the several proposed real estate projects which are in the western and eastern suburbs of Mumbai and Thane district. But still it’s not specified that exact how much area around the national park comes under this decision and due to that according to reports NGT stay on new construction which is around the Sanjay Gandhi Park.
The National Green Tribunal has directed the municipal authorities of Mumbai to not to grant any permission for further construction until National Board of Wild Life or Union Ministry of Environment and Forests  both notify a proposal of the state government to declare that all area around the national park are an eco-sensitive zone. However; there is chaos because tribunal has not specified the range of area around the national park where new construction project permissions need to be held back.

When social activist Santosh Daundkar filled petition, so while hearing the case NGT gave the order by stating that a real estate project of Omkar Realtors and Developers at Malad is located very close to the Sanjay Gandhi National Park. However; advocate Aditya Pratap, who was representing the petitioner stated that in the year 2003, the SC had given a judgement to restrict the mining activity in the rnage of 10-km radius which comes under the national parks and if anyone needs to the mining activity so they have to take the clearance from NBWL. We all know that building construction involves escalation of sand and minor minerals, so the real estate project of Omkar Realtors and Developers at Malad could not have received a green clearance from the standing committee of the NBWL”.

According to the spokesperson of Omkar Realtors and Developers¸ “The National Green Tribunal order has no impact on any ongoing real estate project within the Mumbai because all future projects within 10 km of the Sanjay Gandhi National Park will need no-objection certificate from NBWL, and it is nothing than the another permission which will delay the launch of the real estate projects, and it will also increase the cost of project, whereas; on the other side real estate industry will suffer from low supply of goo apartments in short run. The more he added that in the present project, the previous order which was dated on the February 2, 2015 to inform the prospective buyers about the pendency of the litigation in this tribunal be abide by scrupulously.

However; NGT has not issued any stay on the construction activities at Omkar Realtors’ project which is coming at Malad, it has only directed the real estate developer to inform prospective buyers about the litigation.