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PUNE GrOwTh STOry: NEw LOCATIONS PrOVIDE GrEAT INVESTMENT OPPOrTUNITIES.

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TOP TEN CITIES IN INDIA

ISSUE 3 • VOLUME 1 • JUNE 2015 • TOTAL PAGES 64 • AED 15

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MODI GOVErNMENT’S PErfOrMANCE VIS A VIS PrOMISES: JLL INDIA PErSPECTIVE

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NrI BUyEr’S GUIDE: VALUABLE TIPS ON BUyING AND SELLING PrOPErTy IN INDIA.

SMART PROPERTY BUYERS CAN MAKE THE MOST OUT OF EXPOS

A monthly publication exclusively for NRIs on buying real estate in India A

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INVEST IN THE GROWTH POTENTIAL OF PUNE BY CHOOSING FROM OUR EXCELLENT RANGE OF ONGOING PROJECTS.

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LET'S CONNECT

June 2015

EDITOR Menka Shivdasani menkaipieditorial@gmail.com EDITORIAL

BUILD AN ASSET IN A BUYERS' MARKET

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ne of the strange paradoxes of the real estate sector in India is that even as there is so much talk of a housing shortage in the country, inventories of unsold properties are rising. According to one estimate, in Mumbai alone the value of such property stands at $8.5 billion; this excludes projects that are still in the pipeline. No wonder then, that sentiments in the residential real estate sector are down, and show no sign of going up in the near future.

in. Of course, you need to do your due diligence before concluding a deal and not just be swayed by the freebies, but the fact is, home buyers have rarely had it so good.

For you as a non-resident Indian wanting to build a long-term asset, there is certainly a bright side to this. In a situation where developers are anxious to sell a wide range of properties across the country, it is a buyer's market. As a potential customer, you not only have a huge choice, but also an opportunity to strike a bargain. Developers are trying to woo customers in

knowing that you have a property waiting for you back home, should you ever wish to return.

to discounts and the waiving of stamp duty, to name just a few, there are many extras that they are throwing

With strong fundamentals in the Indian economy, and a positive outlook in spite of the current subdued sentiments, the value of the property you buy today is certain to go up; there is no doubt that patience will

If you are looking for a property, then there is another reason to not delay the decision. With vacations underway, the exhibition season is upon us and developers are getting together to help you choose from among hundreds of properties, all in one location. Home buying has never been more convenient, or more worthwhile.

CONTRIBUTORS Archana Sinha Shilpa Vyas Raina Assainar Saee Bandekar Prachi Bari PUBLISHER Wilfred Fernandes wilfredf@weareyoung.in MEDIA DIRECTOR Anup Kotekar anupk@weareyoung.in ADVERTISING Jitendra Boricha - Business Head jitendrab@weareyoung.in Richard Mendes - Chief Manager richardm@weareyoung.in DESIGN & INNOVATION Dallas Fernandes - Creative Head Sachin Rane - Art Director DESIGN & LAYOUT Shilpa Dinesh PRINTING & DISTRIBUTION PARTNER GN Media, UAE.

Printed and published by Wilfred Fernandes on behalf of Yo Sports Management Pvt. Ltd. Published at Young Media from 506, A-wing, Western Edge II, Western Express Highway, Borivali (East), Mumbai 400 066 and Printed at Al Nisr Publishing Press, Sheikh Zayed Road, Dubai, UAE. Editor Menka Shivdasani India Property Insider takes no responsibility for unsolicited photographs or material. All photographs, unless otherwise indicated are used for illustrative purpose only. Views and opinions expressed in the articles are of the Authors/subjects and do not While the editors do their utmost to verify information published, they do not accept responsibility for its absolute accuracy in matters which may be sub judice.

MENKA SHIVDASANI Editor

offers is being provided for the reference of readers. However, readers are cautioned to make inquiries and take their decisions on purchase or before investing after consulting experts. India Property Insider holds no responsibility for any decision taken by the readers on the basis of information provided herein. Subject to Mumbai jurisdiction only.

For business enquiries and to know more,

Call: +91 022 28700303/2299/2277 or write to us at ipi@weareyoung.in www.indiapropertyinsider.in

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MEDIA INITIATIVE


CONTENTS

Inside Insider 06

15

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25

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MARKET TRENDS: THE TOP 10 CITIES IN INDIA Bengaluru and Pune are among the top-ranking cities in the country, according to a recent report

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INSIDER SPEAK: 'LOOK FOR A GOOD DEVELOPER WITH AN EXCELLENT TRACK RECORD' India Property Insider speaks to Getamber Anand, the new President – CREDAI National

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EXPERT VIEW: 'INDIAN REAL ESTATE IS MOVING TOWARDS MATURIT Y' Pranay Vakil, who has watched the property market at close quarters over the last 26 years, believes it is far more professional today than it was 20 years ago

THE INSIDER STORY: SMART PROPERT Y BUYERS CAN MAKE THE MOST OUT OF EXPOS Exhibitions play a pivotal role in bringing buyers and sellers face to face, helping them to take the right decisions, says Shilpa Vyas

06 15

Panvel has been in the news for the upcoming international airport and for NAINA, a smart city that will be larger than Mumbai when it is built, says Raina Assainar

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'THIS IS ONE OF THE BEST TIMES FOR NRIS TO INVEST IN INDIA' As Mahindra Lifespace Developers Limited makes its presence felt in Dubai, Anita Arjundas, MD & CEO of the company speaks to India Property Insider

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THE BIG PICTURE: 'MODI GOVERNMENT ON TRACK' While all of Prime Minister Narendra Modi's promises have not been met in the one year he has been in office, there has been some progress

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SUSTAINABLE LIFEST YLES: OPT FOR

DESTINATIONS: PUNE IS GROWING IN ALL DIRECTIONS With its strong economy and expanding geography, Pune offers a variety of attractive options for home buyers, says Prachi Bari

Q&A: 'TODAY, IT IS THE CUSTOMER WHO DICTATES TERMS' Sujay Kalele, CEO, Kolte-Patil Developers Ltd, believes that there is more choice and transparency for non-resident Indians in the Indian real estate market today, says Menka Shivdasani

June 2015

As World Environment Day comes up on June 5, Saee Bandekar reflects on how green buildings offer multiple benefi ts, both for the environment and for users

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June 2015

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TREND WATCH: SENTIMENTS DIP, BUT THE FUTURE HOLDS PROMISE Sentiments are currently down in the Indian real estate sector but there is a strong positive undercurrent thanks to good economic fundamentals, says a new report URBAN LIVING: SMART CITIES WILL HELP INDIA GROW As the government's new initiative begins to gain momentum, a recent knowledge report believes that FY16 will be a game-changer for the country

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INVESTMENT OPPORTUNITIES: SOON YOU WILL OWN MARQUEE PROJECTS IN INDIA THROUGH REITS Archana Sinha examines how Real Estate Investment Trusts will impact Indian investments INSIDER ADVICE: THE NRI PROPERT Y BUYER'S GUIDE Sandeep Sadh offers some valuable tips to non-resident Indians on buying, selling and repatriation

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EXPERT ADVICE: TAKE CHARGE OF HIDDEN PROPERT Y COSTS Watch out for those extras that add to the cost of the home you purchase, says Anurag Jhanwar ADD A TOUCH OF EXOTICA TO YOUR HOME NRIs who are looking to add a special gloss to their homes in India now have a range of luxurious home dĂŠcor products to choose from

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DEVELOPER UPDATE: NEWS DIGEST Keep up with the latest news on Indian developers

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PROPERT Y PRICES Average Residential Apartment Rates

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PROJECTS ON OFFER Some options around the country

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PROPERT Y TERMS: JARGON SIMPLIFIED

We'd Like to Hear From You!

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India Property Insider would be happy to hear from readers. Write in to ipi@weareyoung.in with your comments, suggestions, experience of buying property in India and anything else that you would like to share. Send in your responses today!

GEOGRAPHY-WISE ADVERTISEMENT AND CONTENT PLAN

WEST Mumbai..................................13, 31, 63, 64 Pune...................................................15, 30 Navi Mumbai......................................2, 22 Nashik.....................................................43 Goa...........................................................47

NORTH Delhi.........................................................9

SOUTH Bengaluru..............................................30

Delhi NCR...........................................9, 26 Gurgaon.............................................12, 26

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THE INSIDER STORY

June 2015

Pic courtesy: Wadhwa Group

SMART PROPERT Y BUYERS CAN MAKE THE MOST OU T OF EXPOS Exhibitions play a pivotal role in bringing buyers and sellers face to face, helping them to take the right decisions, says SHILPA VYAS

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ven as the world is slowly turning virtual, the idea of buying real estate over a Skype or Facebook chat is a far-fetched one. Investing in real estate is a big decision, something that requires a fair amount of personal introspection till one zeroes down on the right deal. And this is where exhibitions play a pivotal role because they bring the buyer and seller face to face, allowing them to discuss and debate before taking the plunge. Also over time, exhibitions have become more creative and now provide a package of services to the visitors. It is like providing a ‘one-stop shop’ to property seekers, one that helps them make the right decision to buy, says Niranjan Hiranandani, Chairman and Managing Director, Hiranandani Group, who is gearing up for participation in the upcoming UK and Dubai realty expos. "For home www.indiapropertyinsider.in | A

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June 2015

buyers and property investors, exhibitions are a single point of reference, where an intending buyer / investor can compare his / her requirements vis-à-vis offerings by different real estate developers. It is this aspect – of the intending buyer being able to compare and make a ‘smart’ decision, which provides the basis for property exhibitions." Both domestic and international exhibitions are organised keeping in mind the benefit and comfort of home buyers. These exhibitions provide an opportunity for the home buyer to get first-hand information on the various projects on offer and take advantage of the special rates offered at these exhibitions.

A WIDE RANGE OF PRODUCTS

Exhibitions showcase a wide range of products from different locations under one roof and bring it on a platter to the prospective buyer. It is an extremely helpful exercise for the buyers because they get to scrutinise a valley of projects at different price points. Many of the realty exhibitions are organised by realty bodies like MCHICREDAI, which offer credibility and safety with regards to the projects on show. Work is in full swing for MCHI-CREDAI's silver jubilee exhibition to be held in October this year. A grand event in the offing, developers from all over India will be seen participating in the expo. This year, the event will run for five days at Bandra-Kurla Complex in Mumbai, and also run an open window for 30 days online for the interested NRIs looking to buy property in India. J S Augustine, Advisory Chairman-MCHI CREDAI exhibition committee says, "MCHI-CREDAI acts as a policy maker along with Government and self-regulates the developer members. It has a policy of allowing only approved projects to be displayed in the exhibition as a part of transparency. Also if there is any grievance on part of the consumer against the member developer, MCHI-CREDAI will address the same. This is a huge advantage to the consumer who attends the MCHI-CREDAI Expo, whether in Mumbai or abroad. In our International expos, we take an undertaking from the participants that in case of any dispute

Pic courtesy: Sumansa Exhibitions

Deepak Goradia, Vice-Chairman and Managing Director, Dosti Realty says, "International property exhibitions are trending big in the real estate industry. Indians working abroad have a desire to one day come back to their motherland. Therefore, they prefer to save and invest in property back home. Investment in property gives one the best returns as compared to other investment options. Also, buyers get first-hand information on various types of properties on offer catering to various segments such as premium projects, weekend getaway homes, bungalows, etc. Special rates are also offered to the Non-Resident Indians (NRIs) on properties booked at such expos."

QUICK FACTS • Property exhibitions play a pivotal role because they bring the buyer and seller face to face, allowing them to discuss the purchase in depth. • They bring together developers, home loan providers and experts who can clarify various issues.

between the NRI and the member developer, the decision of the Grievance Cell / MCHI Managing Committee is final and binding on the member. Hence NRI consumers are safe when they buy through MCHI exhibitions." The manner in which real estate companies function has evolved over the years. Builders have realised the importance of using the right marketing mix that helps them reach out to their target audience. The footfalls to an exhibition are higher than any marketing activity in the field of real estate, which reinforces the importance of this medium. Siddharth Bhatia, Marketing Head, The Wadhwa Group says, "Exhibitions give an opportunity to promote and sell

your developments directly to the selected buyers; they help identify potential partners, gain international and domestic exposure for the projects and gain insight into the latest trends from leading industry experts. For the buyer, exhibitions act as an interactive medium where they can gather information directly from multiple developers. Consumers can validate the information which strengthens their buying decision." The key learning from the exhibitions is developing new networks, creating brand awareness both at a national and international level and learning about trends in the real estate industry. Also many a times, there are buyer- to- buyer interactions like with banks, financial institutes, vendors and agencies, which are important from the business point of view. Gautam Ahuja, Managing Director, Ahuja Constructions says, "There are several opportunities that arise out of real estate property fairs and exhibitions. Exhibitors get the chance to interact with thousands of visitors that come to such expos. Not only does that increase awareness about the company and project but also increases the probability of finding a potential, interested buyer, thereby shortening the sales cycle." Real estate is a sector which sees a massive number of exhibitions each year, and the reason is not hard to arrive at. This is an extremely competitive sector, and developers are constantly challenged to find ways to talk to their intended clientele. A lot of creative thought is put into exhibitions to attract the buyers. Ashwinder Raj Singh, CEO - Residential Services, JLL 7


THE INSIDER STORY

June 2015

For the expatriate Indian working in a foreign country, any property exhibition is an opportunity to make a ‘smart decision’ by investing in real estate, with the added convenience of location and time. Mr Hiranandani explains, "The property expo is largely about different options that can be accessed by an intending buyer at a single location, comparisons that are easily done, queries are quickly answered – and the potential for decisions that can be taken at the event. International property exhibitions offer good opportunities to compare and select the property. There is a subtle difference between marketing and sales; property exhibitions in countries with a large Indian diaspora are a similar story. Prospective buyers who have been in correspondence through e-mails or phone calls over a period of time prior to the expo tend to close the deal after a face-to-face meeting with the sales team at the property expo. Some property shows also have lectures and presentations by experts on topics like taxation, financial structuring of a property purchases and so on, which add to the knowledge base of the expatriate Indian. Special offers are also introduced to create a positive vibe."

Pic courtesy: Nyati Group

India says, "During real estate exhibitions, developers get an opportunity to showcase their properties via various different audio-visual media. Also, their sales teams can engage with large numbers of potential clients. At a local level, property exhibitions allow developers to pull away from the immense online real estate marketing clutter and to strike up direct sales conversations with people who are looking for immediate solutions to their housing needs. With the growing popularity of Indian property exhibitions abroad, this platform has now extended its local reach to include the NRI community, as well. NRIs often attend such exhibitions in groups, and this allows them to apply a more consultative approach to their decision-making. By connecting with friends and colleagues back home, they are able to obtain information that may not be available at the exhibition. Likewise, online searches during and after the exhibition can provide needed granularity."

"International property exhibitions are trending big in the real estate industry. Indians working abroad have a desire to one day come back to their motherland. Therefore, they prefer to save and invest in property back home. Investment in property gives one the best returns as compared to other investment options." - Deepak Goradia, Vice, Chairman and Managing Director, Dosti Realty

BUILDING A CONNECT

Since NRIs are unaware about the changing landscapes in India, exhibitions help them to connect with the industry and stay abreast about the new developments in their cities / hometown back in India. It also gives them a chance to invest in their preferred areas /cities or hometown at discounted rates or get other lucrative offers. The idea again here is to make more customers and to be able to have a winwin situation for both the buyers and the sellers. Reshma Hajite, Director-Sales & Marketing at Excellence Shelters says, "Exhibitions act as a medium, a catalyst between the buyer and the seller. They help establish a connect and build a relationship with customers to gain their trust. Most of the times, people who come to us are also not very aware about the recent changes in the real estate sector in India. So it becomes a medium of education as well. Ultimately the motive of all such exhibitions is to create 10

goodwill between the developers and customers to enable an exchange of a mutually agreeable deal." Sumansa has been successfully organising exhibitions over nine years in various parts of the world like Dubai, Hong Kong, London, Durban, Muscat, Doha, Singapore and Qatar. The organisers have received an overwhelming response from both the exhibitors as well from the visitors year on year. The Indian Property Show is a name to reckon with in the exhibition space with buyers eagerly waiting for its next round slated for this month, June 2015. Samantha Cordeiro Miranda, Brand Manager, Sumansa Exhibitions says, "Exhibitions create a platform for both buyers

as well as for sellers where they can meet face to face, discuss the opportunities, clarify any doubts and get the maximum information they require. Buyers also get a wide variety of options before making the right choice. Buying a home / Investing is not an easy decision to make. You need to have all the options placed before you make that decision. As an exhibition organiser we provide the platform and the variety of options to the visitors and at the same time provide educative seminars that help the visitors in making the right decision." The Indian Property Show showcases a variety of investment options/ range of projects right from villas to row houses to plots, etc from over 150+ developers but at the same time also provides free seminars that offer interesting insights and analysis for the attending delegates. The seminars are conducted by some of the most influential property industry gurus, Vaastu experts and legal advisers. Know Your City is a new addition to the list of seminars giving visitors industry insights into new developments in India's bigger cities. Ms Miranda adds, "In addition to the free seminars we also bring in renowned lawyers from different regions in order to provide free legal advice on any of their property related matter whether it’s for new property purchase; concerns related to existing property, tenancy laws etc." The continuous presence in renowned exhibitions and delivery on time also impact the reputation of the company within the community. Mrs Hajite adds, "In the past, we as a company have grown from strength to strength through participation in exhibitions. It helps us get fresh clientele and add to the business. We are able to deliver products to the right people and have been quite happy servicing their needs. On an average, close to 30 per cent of the business we do comes from international exhibitions." www.indiapropertyinsider.in | A

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June 2015

Excellence Group has an International presence and are highly active in markets like Singapore, Dubai and GCC Countries and USA. "Apart from these countries we also have clients from UK, Australia etc. This year we are looking at exploring markets like Hong Kong and UK. The next set of exhibitions we are doing in India is primarily at Pune, and internationally at Hong Kong, Dubai (Sumansa), USA and Singapore," Ms Hajite informs. The main motive to introduce the trend of exhibitions

and expos was to create a platform to create awareness, collect and disburse useful updates and information about upcoming projects, developers amongst the public and the government. But these days, such events have assumed a wider perspective. They have become an avenue to discuss key industry issues, how the upcoming mega projects and economic drivers impact the real estate sector and the collaborative efforts of both private and government in facilitating growth.

Hiral Sheth, Director, Marketing and Sales, Sheth Creators says, "A lot of developers participate in exhibitions to showcase their various landmark projects offering exhilarating offers to the local and international customers. Along with that exhibitions also to gather local and international leaders and experts to share their views on the current state and the future of real estate market. Such events aid key stakeholders to determine their future business strategies in the NRI market. Also, realty expos are a unique platform for the potential buyers to get a wonderful home buying

'India is Fast Emerging as a Preferred Investment Destination'

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n the space of over three-and-a-half decades, Dosti Group has built an impressive portfolio of over 5,500 homes that house over 27,500 residents in 95 Dosti complexes, which occupy a total developed area of six million sq. ft. across Mumbai and Thane. Dosti Realty is headquartered in Mumbai and operates across residential townships, commercial and retail segments.

Their flagship project, Dosti Acres in Wadala, designed by globally renowned Architect Hafeez Contractor, changed people’s perspective towards Wadala East. They spread their wings to Thane, Andheri, Kandivali and South Mumbai with exclusive township planning and ultra-modern constructions and amenities. They are now broadening their horizons with new developments across Navi Mumbai, Pune and Ahmedabad. Dosti's ongoing projects include Dosti Ambrosia, a 36-storey tower at Wadala, which is soon approaching completion, pre-certified Gold Rated project under Indian Green Building Council (IGBC); Dosti Vihar, a township project at Thane, with Dosti Vidisha and Dosti Vasudha being the two latest additions to Dosti Vihar; and Dosti Imperia, which has seven towers of 29 storeys each on Ghodbunder Road in Thane.

I N T E RV I E W DEEPAK GORADIA, Vice-Chairman & Managing Director, Dosti Realty Ltd, spoke to India Property Insider. What are your views on the current state of the property market in India? Which are the prime locations in Mumbai that NRIs should consider? There is a global interest being generated towards India as a

prime investment destination. This has come about due to positive steps initiated by the new government in building investor confidence and creating a conducive environment for growth. India is fast emerging as a preferred investment destination especially from the NRI community based out of Gulf, US and UK.

The recent global financial crisis and depreciation of the Indian rupee was in fact the turning point; attracting NRIs to once again look at India as an investment destination. This has made investments in India's real estate sector more affordable and rewarding for overseas investors. Mumbai being the financial capital of the country has long been the epitome of India’s development story. With growing aspiration levels of the people, there is a spurt of luxury high-end property coming up across the city The Mumbai property market has appreciated significantly over the past few years. A number of projects in the premium and luxury residential segment have been conceptualised and successfully marketed in Mumbai. Major infrastructure projects are currently being executed across Mumbai which will help in better connectivity within the city. This will also lead to improved developmental activity in the peripheral areas of Mumbai as well. Generally, locations with good connectivity and social infrastructure are preferred locations to invest. In the western suburbs locations such as Goregaon and Borivali and in the central suburbs Mulund, Kanjurmarg and Thane are places to watch out for in the near future. Navi Mumbai is another area to watch out for, going forward. For example, Thane – Shil area is a prime location and fast developing nodule being strategically located with good connectivity to Thane, Dombivali, Kalyan and Navi Mumbai. Current social infrastructure in close proximity includes Symbiosis Convent School, St. Mary’s School, Navjeevan Hospital, Life Care Hospital, Mahape IT park, Dhirubhai Ambani Knowledge City and Taloja MIDC.

What are the advantages of investing in Indian real estate, in your view? The recent global slowdown has had a positive impact on interest shown by NRIs to invest in India. Our Prime Minister, Mr. Narendra Modi, has prepared the ground for large business investments into the country which has given a thrust to India’s positive image in the international arena. The government has initiated pro-development policies which has created a positive atmosphere within the real estate sector. Factors like a robust economy, easy access to capital, higher disposable incomes, most importantly; aspirations towards a better quality of life are the key drivers for the demand of property investments among overseas buyers. NRIs look at buying residential properties both for their own use as well as for investment. High economic growth, improved infrastructure development etc., are some factors that help sustain NRI interest in India. Real estate is the best among given investment options as it gives you the best returns and appreciation value, over a period of time. What would your advice be to NRIs looking to buy property in India? The Indian economy is currently growing at a healthy rate with major infrastructure and development projects being undertaken across the country. There is a genuine interest among NRIs wanting to invest in Indian real estate. Indians by their very nature have a propensity to save and Indians living especially in the Gulf work hard to save money and invest in a home back in India. Also, Indians settled abroad will always come back one day to their motherland – India. Therefore, my advice to those NRIs looking to buy property in India would be to BUY NOW and do not wait any longer. This is the best time to invest in a property here in India, as property rates never go down but always move northwards.

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THE INSIDER STORY

experience, especially during the festive season. We have been participating in various national as well as international trade shows and exhibitions and we have always received good feedback, enquiries along with bookings for our projects in Bandra, Malad and Andheri." Exhibitions are a win-win situation for both buyers and developers. To buyers, they offer choice and for developers they offer reach - both necessary - to reach the final goal, which is to procure an asset that adds value in the long run!

Before you Buy! • Steer clear of the impulse factor. Look at all the options before making a purchase. Do not make a purchase decision solely on the basis of what you see at property exhibitions, which usually represent only a fraction of what is available. • Do not over-commit on your home loan - analyse your current financial situation and make realistic projections about your future earning potential. It is better to buy a home that is comfortably within your means now and sell it later to upgrade to a bigger home. • Ignore all marketing pitches geared specifically towards NRIs. For instance, educate yourself about how terms such as 'luxury' are actually interpreted in India. • Demand to see vital documentation such as commencement and occupation certificates, environmental clearance certificates, etc. If these are not immediately available at the exhibition, ask for them to be mailed to you. • Do not make a final purchase decision without the guidance of an independent and reputed real estate consultant.

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June 2015

I n t h e i r Wo r d s Prashant Mirkar General Manager-Marketing, House of Hiranandani "Developers over the years have learnt that exhibitions are best suited to achieve the twin objectives of sales and brand promotions. They provide a perfect opportunity for the consumer to choose from a wide range of housing options under one roof. Also, these offer immediate comparison between options that would otherwise involve lot of time and effort. Exhibitions do not have a direct bearing on the market sentiment, but it does consolidate the direction and trends of the industry in terms of new launches, new formats or design trends. These exhibitions aim at bringing buyers and developers on a common platform, where home buyers can access a range of properties depending upon their suitability. Exhibitions can be a great medium for the developers to advertise to a target market and create brand awareness. Participation in exhibitions over a long period of time along with quality offering has helped well-known developers in creating a niche for themselves in the market." Nesar BS Executive Director of Concorde Group, Bengaluru "Many a times, buyers, especially NRIs, are bound to get confused about the regulations and formalities in a different country while possessing a property. So, to make things easier and convenient, real estate exhibitions can really help them to get over the fear. A lot of worries about policies and regulations can be solved, the name of the brand can help them associate with the values and also, the uncertainty that comes with a foreign brand gets dissolved. It is more convenient in the decision making process as well. Any exhibition helps the developer to gain visibility for their brand. What cannot be achieved through any advertisements or any media outreach campaigns can be achieved through such exhibitions. Displaying their own unique styles, values and establishing a personal touch with the potential customers can be really beneficial to them. It aids the developers to update their market knowledge and differences in each market. When an exhibition happens, we closely get to see how the others’ operations are better, which brings in a great chance for improvement and self- realisation." Gaurav Shah Director, Sales & Marketing, Ravi Group "For any high involvement purchase the buying cycle is spread over a long duration and there is huge amount of primary and secondary research that goes into it. I would term the decision to buy a home as ‘very high involvement’. An exhibition reduces the decision-making process to some extent and brings the buyer closer to the developer. NRIs are pressed for time and so travelling to India every now and then to look for a property isn’t feasible. Instead attending exhibitions in their own city/country offers great convenience and value to them. Increasingly banks and housing finance companies presence at such exhibitions is adding to the overall convenience factor. The objective isn’t only to make sales but also build brand presence, brand awareness and brand affinity at exhibitions. Many a times these exhibitions open up new opportunities for business, networking opportunities, etc. So we don’t judge an exhibition only on the basis of sales/conversions, other than sales there are many other advantages to look out for." Manish Kaneria Director, Mont Vert Luxury Homes "Real estate exhibitions generally offers good discounts and packages. For NRIs, overseas exhibitions are best way of avoiding travel expenditure and saving time. They generally select a few properties to their liking and then ask their family members in India to visit those sites and give their inputs, which will help them make final selection. This saves time and energy for the customers. For developers it gives more bang (footfalls) for their buck. One of the major roles of an exhibition is to create a brand awareness especially for those developers who cannot afford to spend big on their advertising. For well established brands, it is a brand reinforcement exercise. It also helps some localised or regional brands, expose themselves to a larger audience." Koshy Varghese MD, Value Designbuild "The idea about conducting exhibitions was to take the offer to the client rather than make the person travel around. It also helped to give the buyer a chance to meet the people behind the developments. Exhibitions give the buyer a chance to get first-hand information before travelling to the place where they were intending to make a purchase. In the early days people used to make bookings on the spot and avail discounts but bad experiences on account of a few unscrupulous developers have made many NRI investors / buyers wary. Nowadays, people take information, then carry out due diligence, before making a decision. At exhibitions, we get to hear the fears of the buyers. We get to hear what the price limits are and where the buyers wish to have their houses. We also get to know where we stand in comparison to other developers." www.indiapropertyinsider.in | A

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THE BEST WE'VE BUILT SO FAR, ARE THE FRIENDSHIPS.

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THE INSIDER STORY

June 2015

G e t s e t f o r I n d i a n Pro p e r t y S h ow i n D u b a i The 16th edition of the mega expo takes place between June 11 and 13, 2015

QUICK FACTS • More than 150 Indian developers will showcase their projects in Dubai this month.

Pic courtesy: Sumansa Exhibitions

• Knowledge sessions and special offers will add excitement to the event.

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eturning for the 16th time, Sumansa Exhibitions’ flagship exhibition, Indian Property Show, is all set to take place on June 11, 12 and 13, 2015 at Dubai World Trade Centre. The expo will feature a wide range of the latest properties by more than 150 Indian developers, who will showcase the best Indian real estate projects to potential investors in Dubai. On show at this biannual realty expo will be Apartments, Villas, Row Houses, Commercials and Plots ranging from ` 12 lakh to ` 23 crore (230 million rupees). Home buyers can also expect a host of special property deals and promotions from participating developers through the unique 'Property Dhamaka' feature, which highlights new projects with exciting deals announced here for the first time. The Dhamaka provides an opportunity for non-resident Indians (NRIs) to get discounts for on-the spot bookings, and attractive EMI and down payment options, among other things. Along with Indian developers, construction companies, banks and real estate agents are also participating in the expo. This year’s show will witness three distinct regional pavilions alongside a special CREDAI Maharashtra pavilion with properties from Pune, Nashik, Nagpur and other cities of Maharashtra. On offer are properties from Delhi, Noida, Greater Noida, Gurgaon, Jaipur, Kolkata, Goa, Ahmedabad, Mumbai, Navi Mumbai, Pune, Chennai, Coimbatore, Hyderabad, Bengaluru, Mangalore and many more cities.

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The three-day extravaganza will be open to visitors between 11:00 am to 8:00 pm every day with free entry and provision for free parking. A major draw at the expo will be the free seminars conducted by leading industry experts. There will also be 'Know Your City' seminars to educate people on new developments in India's bigger cities while guiding buyers

on the investment potential. Sessions include 'NRI Guide to property investment in India' by Ashwinder Raj Singh, CEO – Residential Services, JLL India, and South India’s Residential Real Estate Hot Spots by Sanjay Chugh, National Head - Mandated Sales & Business Head – (Chennai) Residential Services, JLL India. “Today's changing real estate market dynamics and the volatile world in which the realty industry operates require knowledge and intelligence to create a competitive advantage like never before,” says Sunil Jaiswal, President, Sumansa Exhibitions. Block your diary now for this exciting show!

Bridging the Knowledge Gap “Ratings agency Moody's recently stated that at 7.5 per cent, India's growth rate during 2015-16 will be the highest among the global 20 major economies (G20). The stabilising dollar along with healthy Return on Investment (ROIs) compared to the West or Middle East have fuelled real estate investments into India. Apart from NRIs wanting to stay connected with India, the wide array of opportunities available across the affordable, middle and luxury segments ensures that the right fit is available for each investor type. “Lack of reliable information is a major hindrance for NRIs to invest in real estate, and the India Property Show is an excellent platform to bridge this gap. Since real estate is a capital-intensive product, investment decisions need to be backed by sound advice from professionals with a strong research background. “During our thought leadership sessions at the India Property Show, JLL India – which is Knowledge Partner for the event – will aim to acquaint investors with the latest trends and evolving dynamics of the Indian real estate market.” Ashwinder Raj Singh, CEO – Residential Services, JLL India

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DESTINATIONS

June 2015

P u n e i s G row i n g i n a l l D i re c t i on s With its strong economy and expanding geography, Pune offers a variety of attractive options for home buyers, says PRACHI BARI

Pic courtesy: Paranjape Schemes (Construction) Ltd

P

une is a city of contrasts. This city, which is spreading horizontally, has many choices to offer, both to young buyers and to seasoned ones. Developers in this city are building for a buyer-specific market and are willing to create spaces that will attract any global resident. There is a plethora of areas available for the people who are keen on settling in this picturesque, bustling city which has managed to keep traditions and culture intact and yet openly accepted changing trends in a cosmopolitan society. According to experts, Pune is constantly expanding and adding to its own borders geographically. Unlike Mumbai, the city is growing in all directions, which means that there is a constant addition of new precincts with affordable

housing options in the market. Thanks to this, it is one of the hottest real estate locations in the country. “Pune has shown immense growth in certain pockets and maintained its status as a safe residential realty investment destination. With assured returns on houses at a constant rate of year-on-year appreciation, Pune has been a favourite location with investors who are averse to high risks," says Sanjay Bajaj, Managing Director – Pune, JLL India. "The average capital value appreciation rate in Pune is projected to be in the range of 12-15 per cent for the year ahead. Areas that will see maximum appreciation are Hinjewadi, Marunji Road and its surrounding areas, which will see the best appreciation in the next one or two years and Kharadi and nearby areas.”

According to Vishwajeet Jhavar, Chief Executive Officer, Marvel Realtors, the NIBM area has always been the centre of attraction to people from almost all walks of life. "With the increase in number of families preferring the locality, many developers have launched their residential and commercial projects in the area. Expansion in commercial development includes lifestyle and shopping destinations such as Royal Heritage Mall /Clover Plaza Mall/Marvel Boulevard High Street Shopping Complex," he says. "Concentration of many international schools in South Pune ensures that residents in NIBM have access to all necessities of daily living. Additionally, sanctioned DP roads will give good connectivity in adjacent areas in South Pune." NIBM is able to fetch decent rentals for investors, he believes, with 2BHK apartments in the area offered on a monthly rental of 15


DESTINATIONS

` 20,000-22,000 / 3BHK-30,000-32,000 / 4BHK 42,00050,000 depending on location, the kind of developer, size of the society, amenities provided and so on. Mr Jhavar points out that the city has been projected as "one of the top destinations for real estate investment owing to the incredible growth in sectors such as information technology, automobile, manufacturing, education and other service industries". Influx in these sectors has resulted in sudden price rise across all locations in Pune with real estate properties witnessing considerable appreciation in the last couple of years, he says. "Another strong reason for the city’s development is the rush of integrated townships giving rise to allied infrastructure development such as roads, water, and sewage, recreational and entertainment options like malls, multiplexes etc facilitating decongestion in the municipal corporation areas encouraging new settlements in the periphery,” he adds. Asserting this trend, the developers and builders are divided in the East and West segments, leading to tremendous growth in various suburbs, attracting a range of home buyers. Geographically, newer peripheral suburbs like Ravet, Talawade, Moshi on the north corridor of Pune and Pisoli, Yewalewadi in the south, Wagholi, Dhanori, Lohegaon on the east and Marunji, Punawale, have seen a spurt in new projects being launched. There are a large number of townships that have been launched over the past few years which require substantial infrastructure to support them, such as internal roads, power, commercial spaces, schools and hospitals.

Apart from areas such as Baner, Kalyani Nagar and Koregaon Park, which traditionally have been the prime areas due to the infrastructure and the elite occupying this geography in Pune, the city has thrown open plenty of new attractive geographies. A few of these are Kharadi with World Trade Center (WTC) and EON occupied by multinationals, which has increasingly become a major information technology (IT) hub; Viman Nagar, due to its proximity to airport, Nagar Road, Kalyani Nagar and Koregaon Park within a diameter of two to three kilometres.

A PREFERRED LOCATION

The growth has been steady and resilient, feels Aniruddha Deshpande, Managing Director, City Corporation Ltd., though the interest rates were high and the economy was doing well in Pune due to the growth in Auto and IT / ITeS sector. “Pune had affordable pricing and was a preferred location for both first and second homes. Infrastructure like roads, water and transport has failed to match the population growth. Generally, it is one of the fastest growing metros in India." Several builders are vying for the Eastern suburbs (Kharadi, Hadapsar) and on the west side Baner as among the most popular areas. Townships like Amanora and Magarpatta, due to their state-of-art internal infrastructure in the East and various complexes in Baner, Pimpri-Chinchwad Municipal Corporation (PCMC) areas due to the proximity to Hinjewadi and Mumbai to a certain extent provide better mobility conveniences and quality of life.

June 2015

With Pune Metropolitan Region Development Authority (PMRDA) in place, the proposed Ring road area and areas along the Pune – Daund railway line which runs parallel to Sholapur road would be the growth areas. While the Metro will pass through some crowded areas, the higher Floor Space Index (FSI) available along the Metro route would have many redevelopment projects, creating housing, shopping and offices in central Pune which had only five per cent of Pune’s total construction over the last decade. According to Mr Deshpande, “Pune is getting a Metropolitan attitude. People are not averse to move to the outskirts of Pune. The Metro will throw many opportunities for redevelopment. Pune district has nine townships going in and around mostly on the outskirts of the city, which are changing the housing pattern in the city. Proximity to the workplace is becoming important. Therefore, Kharadi and Hinjewadi are seeing growth in real estate. Amanora-like townships with 24 x 7 water, power, gas, safety, help desk and everything required for life including medical help, education, retail facilities are setting trends in lifestyle. Such places fetch a premium.” Sudhir Darode, MD, Darode Jog Developers, feels that consumers have purchasing power due to availability of housing finance at lower rates of interest and are choosy and conscious about intricacies involved in purchasing flats, hence their preference while buying a flat/ investing is a reputed builder with established reliability and standing. Darode Jog have worked out very interesting projects on

QUICK FACTS • Picturesque Pune has managed to keep its traditions intact even as it has accepted changes in a cosmopolitan society.

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Pic courtesy: Marvel Realtors

• As growth spreads horizontally, new locations with world-class properties are opening up to suit the needs of a range of buyers.

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IZARA FLOATING CABANAS, 2015 Concrete, Wood, Water


DESTINATIONS

June 2015

Pic courtesy: Amanora

the outskirts, mainly in Kharadi, Singhagad road and have received overwhelming response. What makes people consider areas like Viman Nagar, Baner, Pashan, Kothrud is good connectivity, infrastructural development and affordable prices of flats, but the area that is buzzing with activity for Darode Jog is Kharadi. “The most upcoming area in Pune is Kharadi, which falls in the North Eastern corridor. The main catalysts in development of this region are proximity to the airport, IT hubs in EON and Magarpatta and proximity to Ranjangon MIDC. Since the said area was undeveloped till the recent past, the Pune Municipal Corporation had the flexibility to plan and execute proper infrastructure in the vicinity. Secondly, in terms of the lifestyle quotient, around 90 per cent of Pune’s malls, multiplexes, and five-star hotels are within a three km radius. Hence it is the best location to be selected,” explains Mr. Darode.

SUSTAINING THE GROWTH

"Pune has shown immense growth in certain pockets and maintained its status as a safe residential realty investment destination. With assured returns on houses at a constant rate of year-on-year appreciation, Pune has been a favourite location with investors who are averse to high risks." Sanjay Bajaj Managing Director – Pune, JLL India

Rohit Gera, MD, Gera Developments, feels that increasing urbanisation, raising incomes and aspiring lifestyles have pushed the rapid growth of Pune’s real estate. “The residential real estate industry in Pune has witnessed sudden growth in the past few years owing to the increase in business opportunities, which led to the increase in the number of immigrants to the city. Ample job opportunities in service sectors and growing income levels have increased the appetite for spenders in the region. With Pune stretching its boundaries in all directions, the suburbs are emerging as new hubs of real estate development, attracting a serious demand from homebuyers and investors,” states Mr. Gera. 18

“Improving infrastructure and connectivity has fuelled growth of the upcoming suburbs of Pune. Pricing wise, average prices have increased from ` 3075 per sq. ft to ` 5061- per sq. ft in the last five years, translating to a compounded rate of 11% per annum. Given the tax benefits, ability to mortgage, rent inflows, this five-year increase is a good return by all means. The number of live projects under construction has increased from 1,813 to 2,683 which is a growth rate of 50% over the last five years with a market expansion by 45 per cent of the number of units being built,” he adds.

Sachin Kulkarni, Director, Vastushodh Projects, feels that this city has the potential to sustain the growth and it has shown that in the past five years. This city has always been the preferred location for many new home buyers, he believes. It has good connectivity and the growth of West Pune has been phenomenal especially as it is a link to IT and ITeS hubs, the automobile hub and Mumbai, financial capital of Maharashtra; besides, this city still offers a lot of greenery despite having many projects. According to Mr. Kulkarni, this city has pockets which speak of planned growth though it still needs to do a lot more in that area. Many developers who had projects in the Eastern side of Pune too are looking at developments in the western corridor. Nitin Nyati, Nyati Group, feels that among the emerging areas in Pune to look out for in the next five years with more than average growth is Bavdhan; it has grown steadily (from ` 4040/- per sq ft in February 2011 to ` 6166/- in February 2015, by 52 per cent in the past three years in average prices. It is estimated to grow ahead of the market. Other areas to watch out for in the next five years because of its proximity to the Mumbai-Pune-Bengaluru Highway, include upscale neighbourhoods like Kothrud, Baner, Pashan and Aundh, for which road infrastructure is already in place, he says. Paranjape Schemes (Construction) Ltd. have been in housing construction for more than 25years now. Predominantly, they have completed over 150 projects in various cities of Maharashtra but in Pune they are concentrating on peripheral areas post developing in the city. “Our township projects like Blueridge in Hinjewadi and Forest Trails in www.indiapropertyinsider.in | A

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June 2015

customer generally looks for large complexes with good amenities like swimming pool, club house, gymnasium, and children’s play area. - Shashank Paranjape, Chairman and Managing Director, Paranjape Schemes Bhugaon have some unique amenities like the nine-hole par 3 executive golf course and a stud farm and equestrian centre respectively, apart from the regular amenities mentioned above," informs Shashank Paranjape, Chairman and

Digitised homes are the need of the hour and the special

projects also have other infrastructure like good concrete road network, schools, convenient shopping areas, mall

home automation for his/her house.”

projects portray is 'walk to work'.

Townships like Amanora and Magarpatta provide a wide range of pricing in one complex. From a typically ` 6,000 to ` 10,000 per sq.ft. depending on branding of the apartments, ` 3,000/- per sq.ft. on the outskirts ` 14

He further explains that in the areas that they operate the predominant buyer is a middle or higher middle group complexes with good amenities like swimming pool, club house, gymnasium, and children’s play area. He/she looks for a location where all the other conveniences like schools for children, entertainment banks and medical facilities are also available easily in the vicinity," he says. "Nowadays, the buyer

PROPERTIES FOR ALL BUDGETS

higher price points, for instance, Aundh – ` 9500 per

sq.ft., Model Colony – ` 15,300 per sq.ft., Koregaon Park – ` 15,300 per sq.ft., and Boat Club - ` 19,500 per sq.ft. Price bands in the eastern zone consisting of Kharadi, Wagholi, Mundhwa, Keshavnagar and Wadgaon Sheri have an average price ` the city including NIBM, Kondhwa, Lullanagar, Pisoli, Hadapsar belt have an average pricing of ` 4,700 per sq.ft. Western Pune, including Baner, Aundh, Pashan, Bavdhan, Balewadi, Hinjewadi command roughly ` 5,800 per sq.ft. Kiwale, and attracts an average of ` 3800 per sq. ft. According to Kishore Pate, CMD, Amit Enterprises, good areas and their development is hard to miss. “Good accessibility, presence of realtors and good neighbourhoods and art galleries are all places where people can engage in the very vital activity of socialising. A neighbourhood which has such facilities is simply a nicer place to live in, making life there more convenient and enjoyable.” Pune's appeal also hinges on the fact that the local economy is booming, infrastructure is on the rise and more and more multinationals are focusing on Pune to set up their

MONTHLY REAL ESTATE MONITOR : PUNE

Pic courtesy: Amit Enterprises

Source: JLL Pulse

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DESTINATIONS

its IT, manufacturing, automobile and services industries are steady fuel for commercial real estate growth, as well as inward migration from all corners of the country to drive residential demand,” states Sudhir Darode. Also, thanks to its many educational institutions, Pune has a very rich and constantly replenishing talent pool which companies from across India and beyond see as potential for their own expansion on Indian soil.

June 2015

' P u n e S h ow s a L o t o f Prom i s e on t h e R e s i d e n t i a l S i d e '

RENTAL VALUES states Mr. Paranjape. "We operate predominantly in the western part of Pune in areas around Deccan Gymkhana, Kothrud, Bawdhan, Baner, Aundh, Sinhgadh Road, Hinjewadi and Bhugaon where the rentals can range anything between ` 8000- ` 15,000/- for a 1BHK, ` 10,000 to ` 20,000 for a 2BHK and ` 12,000 to ` 30,000 for a 3BHK. Rentals are very much location based.” Pic courtesy: Pride Group

Pricing for each project depends on the location according based on the land cost and construction cost the market ranges approximately from ` 35 lakhs to ` 7 crores,” states Mr. Paranjape. and its vision towards augmentation of the real estate sector and improving overall infrastructure in the country investors," explains Vishwajeet Jhavar. "Announcement of new regulatory developments and a series of incremental reforms such as relaxation in FDI norms, facilitation of Real Estate Investment Trusts (REITs), single window clearance, attempts to increase transparency through the Real Estate Regulatory Bill are bringing buoyancy in the property market.” Developers and investors are closely watching to see the actual roll-out and on-ground policy implementation. One of the game-changing infrastructure projects in Pune that will boost the city’s real estate market would and the Pimpri-Chinchwad Municipal Corporation and provide better connectivity to Pune-Nashik, MumbaiPune-Solapur, Pune-Ahmednagar and Pune-Satara highways. Other proposed projects such as Pune Metro, property prices, making certain areas better investment avenues in future. Owing to its multi-dimensional growth drivers, Pune's residential property market has proved to be very resilient of India. With its unbeatable combination of economic attributes, there is very little chance of a real estate slowdown in this city - now or in the future, say developers. 22

A

new report on Pune highlights the city's investors looking for steady rental income

"Pune holds untapped brokerage potential of ~ ` 400 crores from the residential sector," says Coldwell Banker India’s latest report on Pune realty trends. On May 26, the company released a proprietary report on real estate sector in Pune, in the presence of Coldwell Banker India - Director, Mr. Ramesh Sharma, and Vice President, Strategies and Operations, Ms. Mona Jalota.

the Pimpri Chinchwad area score the highest on Coldwell Banker India’s liveability index garnering a score of 51 out of 60. Kharadi with a mix of HIG and MIG projects stands next as a sought after residential and commercial of Hinjewadi earned 40 points and the southern region of Undri garnered 43 points. While Pune’s established IT and SEZ hub Hinjewadi is witnessing up-coming supply of single and multi-tower residential projects; Undri with its seamless connectivity to the Mumbai-Pune expressway predominantly remains a residential zone. Given the enormous income generating capabilities and positive government policies, Pune is fast emerging as the preferred city for home-buyers, says Coldwell

Banker. Mercer’s Global Quality of Living Rankings for 2015 place Pune on the 145th spot, second in India after Hyderabad and ahead of Bengaluru, Mumbai and other options and minimal maintenance charges. “Pune shows a lot of promise on the residential side Mona Jalota, Vice-President, Strategies and Operations, Coldwell Banker India. "With 85 per cent of Pune buyers in search of options worth less than 30 lakh, 14 per cent for homes between 30 - 60 lakh and one per cent with a 60 lakh - 1 crore budget, the demand for compact homes is on an all time high. While the majority of realty players focus primarily on the commercial side, we currently plan to cater to Pune’s compact homes seekers.” On the occasion, the Coldwell Banker also announced the company’s foray into Pune’s real estate brokerage market with a unique franchising model for select partners. "In a span of six months we have forayed into nine cities with a plan to have 30 franchisees by 2015 and touch the 100 franchisees mark by 2018," said Mr. Ramesh Sharma, Director, Coldwell Banker India. Pune as well as investors given the steady income from rentals due to its strategic location, he added.

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Q&A

June 2015

' To d a y, i t i s t h e C u s t o m e r w h o D i c t a t e s Te r m s ' Sujay Kalele, Chief Executive Officer, Kolte-Patil Developers Ltd, believes that there is more choice and transparency for non-resident Indians in the Indian real estate market today, says MENKA SHIVDASANI

SUJAY KALELE

O

Engineering, Pune. Before joining Kolte-Patil, he worked with Jones Lang LaSalle India as vice-president, capital markets, where he was primarily responsible for servicing fund raising needs of real estate developers in the Western Indian markets of Mumbai, Pune and other Tier II markets. He has also worked with Infosys. In his spare time, Mr Kalele is a keen biker and a member of the Harley Owners Group; he also enjoys playing the drums.

CEO, Kolte-Patil Developers Ltd

ver the last two decades, Kolte-Patil Developers Ltd (KPDL) has played a major role in transforming Pune's real estate market; the company has also made its presence felt in Bengaluru, and more recently, in Mumbai, where it has several upscale redevelopment projects in prime localities. Incorporated in 1991, KPDL has developed and constructed 48 projects including 35 residential complexes, nine commercial complexes, and four information technology parks covering a saleable area of over 10 million square feet across Pune and Bengaluru. In January 2014 CRISIL assigned its 'CRISIL A+/Stable' rating to the long-term bank facilities and non-convertible debentures of KPDL,

to develop Information Technology (IT) parks. With the Software Technology Parks of India (STPI) policy, IT

QUICK FACTS •

Sujay Kalele heads the operations in all three key markets —Pune, Bengaluru and Mumbai, the city in which he is currently based. Mr Kalele holds a post-graduate degree in Management with specialisation in Analytical Finance and and Bachelor of Engineering from Government College of 23

real estate sector. With private equity money, malls and other

From a monopoly era in real estate, there has been a transformation towards a competitive scenario where the customer has greater choice.

residential sector also dissected into lower-income group (LIG), middle-income group (MIG), higher-income group (HIG) and luxury housing; the average size of projects increased to ten acres.

Real Estate Regulation Bill is customer-friendly and is a big positive for consumers, and will make property buying more secure.

When you have greater demand, there is a crowding of players and more competition. With increased competition, customers had a lot of choice and what we have seen post 2010 is that the customer is dictating terms and driving corporate brands like Godrej, Tata and Mahindra entered

and established position in the Pune (Maharashtra) real regularly reaches out to non-resident Indians in various regions by way of exhibitions, road shows and seminars and was in the news this Februar y for its innovative tie-up with Snapdeal, the online marketplace, where it put up 13 KoltePatil Pune properties at the Nest Fest Home Buying Expo.

was a change in the kind of properties available—from small houses in standalone buildings, the average size of

witnessed and will continue to witness in the future. For two decades now, Kolte-Patil has been a major player in the Indian real estate market particularly in Pune and Bengaluru. What are the changes you have seen during this time in terms of options for home buyers, customer service and transparency? In the 1990s, we saw a monopoly era in real estate; there were very few players. But as the decade came to an end, many more developers had entered the market. As the economy opened up in 1991-'92, there was also an increase in disposable incomes, and this led to more demand,

Amenities also started coming in; earlier there were no clubhouses, then it went from one clubhouse to larger projects with multiple clubhouses; swimming pools became standard, now there are multiple swimming pools, spas, interior design tie-ups and much more. Non-resident Indians do appreciate these amenities even if they do not live here as these translate rental yields and appreciation. In Mumbai, for instance, a

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June 2015

Pic courtesy: Kolte Patil Developers Ltd.

"Non-resident Indians appreciate amenities even if they do not live here as these translate into positioning of projects and this results in better rental yields and appreciation." Sujay Kalele Kolte-Patil Developers Ltd

positive. We see more transparency from the state and central government and policy transmission as well. Earlier, policies were made just to favour a few lobbies; now they are fair and meant for all. What would you say about the smart city programme? Is it too ambitious? ambition, we can't progress. We may not have 100 smart than we are now in 2015. Tell us about Kolte-Patil's projects. You have been a major player in Pune and Bengaluru, but have now also entered the Mumbai market...

What is your view on the Real Estate Regulation Bill and the Real Estate Investment Trusts (REITs) that are slated to come in? How will they impact home buyers?

approval and construction, in prime areas like Vile Parle,

big positive for consumers. It will make property buying far more secure and bring in more transparency and accountability. It is a welcome move. I'm not so optimistic on REITs as there

infrastructure development. Some of these projects include Jai Vijay at Vile Parle, Link Palace at Linking Road, Bandra and Jumbo Darshan at Andheri.

will not be willing to give up so much revenue; for instance, the Karnataka government takes 13 per cent stamp duty. I don't expect REITs to happen in a hurry. Overall, however, there has been a policy shift and new thinking in the government towards progress and development. Do you see this on the ground?

layouts of one-and-a-half to two acres and above in good

Road (SCLR) and the Eastern Freeway have really opened up Chembur. Where two years ago, property at Chembur was available for ` 9,000 – 11,000 per sq. ft., now nothing is available for less than ` 20,000 a sq. ft. I don't think any other market in the country would have doubled like

Ghatkopar. What about the Pune market? What changes have you see there and which locations would you recommend NRIs consider here? In Pune, we now have the over-arching body Pune Metropolitan Region Development Authority (PMRDA), which has been given the task of seeing planned development in Pune and also in a ten-kilometre area the Metro and so on. In Pune, NRIs should be looking at locations like Kharadi, Wagholi and NIBM in the Eastern corridor and on the Western side, they should consider places like Baner, Wakad and Hinjewadi. Chandni Chowk is also a hot favourite of NRIs. What would your advice be to NRIs looking for property in India? Location is the key, and it is also vital to check approvals and the developer's track record. Such hygiene factors are important. One thing that NRIs look for is value-added services such as asset and property management; since NRIs do not stay here, property management becomes a key factor; this results in fewer headaches for them. If small issues do not receive attention, the value of the

to have a productive asset in India. 24


MICR

June 2015

Th e P r o m i s e o f P a n v e l Panvel has been in the news for the upcoming international airport and for NAINA, a smart city that will be larger than Mumbai when it is built, says RAINA ASSAINAR

Pic courtesy: Kalpataru Ltd.

E

quidistant from Pune, Mumbai and Alibaug, Panvel is the place to be when it comes to investing in one of the most developed cities attached to Navi Mumbai in Raigad district. Among its many alluring

Panvel’s proximity to Mumbai-Pune Express Highway and National Highway-17 with a railway terminus that is a main junction of the Konkan range. It has also been in the news in recent times for the proposed International Airport that is being built here.

residential, but also commercial establishments. “Where there is supply, there is a demand and that’s what is

25

Maharashtra Chamber of Housing Industry (MCHI) Navi Mumbai Unit. He points out that Panvel has land available that is cheaper than that in Mumbai. He also observes that this city, located 19 kilometres from Development Corporation (CIDCO) has announced Area), which is approximately 600 sq. km and will be a Pen and hence all these places will see a rapid development in future. Due to the government policy of Housing for up in Panvel,” he adds.

THE PERFECT PLACE FOR A HOLIDAY like Alibaug, Karjat and Lonavala in less than three hours. Located at the banks of river Gadhi, the city of Panvel is split into two parts—Old Panvel and New Panvel. While Old Panvel includes the old town of Panvel, New Panvel consists of recently developed residential and commercial areas. For trek lovers, Panvel is the perfect place to own a holiday home owing to its proximity to mountains like Karnala Fort, Haji Malang, Prabal Gad, and Raigad Fort.

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MICRO-MARKETS

June 2015

N AV I M U M B A I M A P

QUICK FACTS • Panvel offers several advantages, in terms of connectivity, infrastructure and premium properties. • The upcoming airport and a new smart city in the making add enormous appeal to this destination.

Chirle in Navi Mumbai. This project will cut travel time between South Mumbai and Navi Mumbai. Commercial vehicular traffic directly connecting Jawaharlal Nehru Port Trust ( JNPT) will also be facilitated with this proposed project of ` 11,000 crore. • The Navi Mumbai Metro-Rail (NMMR), which is expected to begin testing Phase I in December 2016, will connect Belapur-Kharghar-Taloja-Pendhar. • A passenger railway line connecting Nerul, Belapur, Ulwe and Nhava Sheva up to Uran, expected to be ready by 2017, will help connect Panvel and Uran easily. • The Delhi Mumbai Industrial Corridor (DMIC) is proposed to be developed on either side along the alignment of the 1483 km long Western Dedicated Rail Freight Corridor between Dadri (Uttar Pradesh) and JNPT, near Panvel.

Pic: Shashikant Patil

• Proposed Navi Mumbai International Airport near Panvel at Kopar-Panvel belt of Mumbai Metropolitan

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Region that will provide service to around 60 million passengers when fully developed and will ease the traffic of Chhatrapati Shivaji International Airport. Residents from Raigad district and other nearby areas will no more have to travel till Santacruz to travel abroad. • NAINA - The Navi Mumbai Airport Influence Notified Area, a new city with an area of 600 sq km which is more than the area of Mumbai city, will be developed around the upcoming Navi Mumbai International Airport at a radius of 25 sq km.

IMPROVED CONNECTIVITY

Both the Panvel State Transport Bus stand and the Railway station are a very important part of the connectivity network. The railway station is a key station of the Central line as well as the Harbour line when it comes to commuting locally in Mumbai, Navi Mumbai and on the Konkan route. Almost every city of Maharashtra is connected with Panvel via State Transport bus. Panvel will soon have international connectivity as well, after the airport comes up. There has been a massive improvement in the infrastructure around Panvel in the last few years. Apart from the proposed international airport, the increased frequency of trains connecting Panvel to both CST and Thane is one of the prime reasons for Panvel to emerge as one of the promising destinations for real estate. Located on the eastern side of Mumbai- Bangalore National highway and the Mumbai Pune Expressway, Panvel is one of the best locations as far as road connectivity is concerned. The Mumbai-Pune Expressway, Sion-Panvel road, NH 4B and NH 17 starts from here while NH 4 passes through Panvel. The roads are wide and well maintained by the local municipal corporations. The planned 22.5 km six lane

Trans Harbour connecting south Mumbai to Nhava Sheva will further boost residential and commercial real estate.

PROJECTS TO LOOK FOR

Godrej is planning a township of 150 acres with residential, commercial and retail development along with a hospital, school and club housing among other amenities starting from a range of ` 42 lakh for a 1BHK to ` 1.2 crore for a 3BHK premium apartment. The township is replete with every conceivable amenity with ample open spaces to give a sprawling outdoor experience with a nine-hole golf course for all golfing enthusiasts. “Panvel falls between two major cities of Maharashtra i.e. Mumbai and Pune and is also known as the gateway to Konkan," says Girish Shah, EVP- Marketing & Sales, Godrej Properties Limited. "It has slowly and steadily emerged as a home buyer’s destination looking for a house or to invest in a second home alike. Many new developments in the form of townships with good amenities and gated communities are coming up around the area. Areas including Kamothe and Ulwe, which fall under the City and Industrial Development Corporation (CIDCO), are witnessing a lot of development of late, along with a strong infrastructural push from the civic authorities. Also the green surroundings in close proximity make it a great choice for NRIs looking to invest in a property in Mumbai,” he adds. Spread across 25 acres, Kalpataru was one of the first renowned developers to offer a premium product in the form of Kalpataru Riverside. It offered multi-storeyed buildings with amenities like beautifully landscaped gardens with a special play area for children, club house with steam, gymnasium, swimming pool and toddler's pool. After the success of Kalpataru Riverside, the group launched Waterfront at Kalpataru Riverside. With a tranquil river running besides the project and view of the majestic hills in the backdrop, Waterfront at Kalpataru Riverside is a 13-storeyed tower presenting a perfect blend of nature and luxury starting at ` 1.2 crore. It is strategically www.indiapropertyinsider.in | A

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presence of infrastructure development and good connectivity has resulted in a number of residential projects and corporate houses coming up in and around Panvel. All these factors have made this city a promising real estate destination among home buyers.” A Kalpataru Ltd. spokesperson

presence of infrastructure development and good connectivity has resulted in a number of residential projects and corporate houses coming up in and around Panvel. All these factors have made this city a promising real estate destination among home buyers,” says a spokesperson from Kalpataru Ltd. next booming destination for real estate development.

connected to the nearby cities and has a pre-requisite for living a complete urban life and hence Marathon Group chose it for its next project,” says Mayur Shah, Managing Director, Marathon Group. Marathon Nexzone at Panvel is of 2BHK, 2.5 BHK and combination apartments starting from ` private club with state-of-the-art amenities like swimming pool, clubhouse, children's play area, landscaped garden and much more within the premises. “NRIs have a positive feel for integrated townships,” according to Niranjan Hiranandani, Chairman and Managing Director (CMD), Hiranandani Communities. Spread over 588 acres, Hiranandani Hills by Hiranandani group is a mixed-use township, and will have commercial spaces, Special Economic Zone (SEZ) and also residential spaces. “In terms of price points, Panvel’s real estate is still at a stage when anyone entering it can look forward to the opportunities of capital appreciation. Plus, the upcoming NAINA project, which is in the vicinity of Panvel, will create infrastructure development on a massive scale. All these aspects have made Panvel the epicenter in terms of property development,” Mr Hiranandani adds. Whether it is pricing, connectivity or amenities, every basic promises rapid growth and capital appreciation. So even for investors who do not wish to settle down in Panvel, this is one micro-location that is the most promising in terms of high returns in the future.

NAINA township, planned by CIDCO, will be a modern township at the radius of 25 sq km from the proposed Navi Mumbai International Airport, which will take more than two decades to develop completely. It is expected that this new smart city which is more than the area of Mumbai city and is expected to be better equipped with infrastructure and modern facilities than Mumbai and its suburbs.

taluka as a pilot project which will be of 37 sq km. “After a month, the proposal of the pilot project will be sent to the state government and simultaneously we will be planning about next 233 sq km area,” Sanjay Bhatia, MD of CIDCO said. He further pointed out that even as the whole of the township will take 20-30 years to develop, the pilot project of villagers over the objections and suggestions of the project is over and right now CIDCO is conducting

Navi Mumbai International Airport Mumbai’s Chhatrapati Shivaji International Airport, the proposed International airport at Kopar-Panvel belt has now become the main reason for the rapid development and property boom in the nearby areas. Tenders have been invited by CIDCO for partners in the project and at the time of writing four bids had reached the planning agency. bids that we have received. By December or January,

Pic courtesy: Marathon Group

expected to be operational which will provide service to around 10 million passengers. By 2030, the airport will provide service to 60 million passengers,” Sanjay Bhatia, MD of CIDCO said.

Sanjay Bhatia, MD, CIDCO

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MARKET TRENDS

June 2015

T h e To p 1 0 C i t i e s i n I n d i a Bengaluru and Pune are among the top-ranking cities in India, according to a recent report

QUICK FACTS • Top Ten Cities In the Indian Real Estate Market used ten key parameters to generate city rankings. • Bengaluru, owing to its professionalism, and being an end user market, led in project completion. • Pune has also shown significant commitment to end users in terms of delivery.

Source: Prop Equity

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ndia stands at the crossroads, and is on the path of achieving growth rate in the range of 7 per cent to 10 per cent, surpassing that of China in this year itself, according to a May 2015 report released by PropEquity. The report, Top Ten Cities In the Indian Real Estate Market, used ten key parameters to generate city rankings, including the price, supply, absorption, inventory, and new launch trends. They also looked at execution delays and the size of the market in value terms. The researchers discovered that India's bestranking cities were in the Southern region, with—Bengaluru (#1), Chennai (#3) and Hyderabad (#4). These cities topped over 50 per cent of the parameters evaluated in the research. Bengaluru emerged as the best city amongst the top 14 cities in India and has also ranked number 1 on 4 out of the 10 parameters evaluated (i.e. size of the market, CAGR of absorption and total unsold inventory to yearly absorption ratio); six years ago, in August 2009, when PropEquity published the first edition of the top 10 cities report in

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India, Bengaluru did not even figure in the first five cities. The report also notes that Pune came a close second and was solely responsible for helping the western region to gain the second spot. Bengaluru also witnessed the highest average number of project launches in the 2013 - 2014 period with almost 500 projects, followed by Pune. Bengaluru alone accounted for 20 per cent of the total projects launched in India’s top 14 cities in 2014. Mumbai, which ranked first five years ago, is now in eighth position. However, all three cities from the Mumbai Metropolitan region, including Navi Mumbai, figure in the top six, led by Thane. All the southern cities were in the top seven; Hyderabad went from the tenth position to the fourth. Speaking of the top ten cities in India, Samir Jasuja, Founder and Managing Director, P E Analytics Pvt Ltd, said, "As the Indian economy shows signs of recovery, these are the cities, which have shown maximum resilience to the present market challenges on

account of strong fundamentals, and will lead the way for real estate growth of India, going forward." P E Analytics owns and operates PropEquity, which covers over 45,000 projects of 8,200 developers across over 40 cities in India.

HERE ARE SOME OF PROPEQUITY'S FINDINGS, BASED ON THE VARIOUS RANKINGS: PROJECTS OFFERED POSSESSION

 Bengaluru, owing to its professionalism, and being an end user market, led in project completion, witnessing more than 500 projects getting completed in 2014, a whopping 50 per cent rise over 2013 numbers.  Pune, standing neck to neck with Bengaluru, has also shown significant commitment to end users in terms of delivery.  None of the cities from the MMR figure in the top five.  The five cities of NCR region were at the bottom of the barrel. www.indiapropertyinsider.in | A

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RESIDENTIAL SUPPLY  Bengaluru witnessed the highest average unit launches in 2013 - 2014 period, with more than 70,000 units getting launched.

 Historically, the NCR, the MMR, and the southern region have witnessed equal number of unit launches. This has changed drastically this year, wherein the south has led with 40 per cent of the new supply, out of the three regions.  New supply in key cities fell considerably over the last two years, falling the least in the southern region (36 per cent), and the most in MMR (50 per cent).  Noida was the only city, witnessing an increase in its supply (10 per cent), while Thane fell the most (60 per cent)

RESIDENTIAL ABSORPTION

 Although absorption fell across Pan India, Bengaluru, Pune and Thane have shown slightly better absorption levels compared to other cities.  The South region witnessed much better absorptions compared to NCR and MMR with reference to new launch absorptions. Last year the south absorbed almost 50 per cent of the total units launched.  All 14 cities saw decline in absorption over the last year. In line with the trend in new launches, the south maintained the lead with least drop in the number of units absorbed (17 per cent), compared to 23 per cent for MMR, and a massive 53 per cent for the NCR.

UNSOLD STOCK

 The western region alone accounts for more than 45 per cent of the total 7.6 lakh of unsold stock in the 14 cities.  MMR (215,203 units), NCR (188,751 units), and Bengaluru (100,406 units) together account for more than two-third of unsold inventory of the top 14 cities.  NCR’s inventory swelled by 14 per cent, owing to increases in inventories in Noida, Greater Noida, and Ghaziabad, while that of MMR and Southern region shrunk marginally.  Ahmedabad, Thane, and Hyderabad showed maximum resilience, with more than 10 per cent decline in their inventories from last year, while Kolkata’s inventory swelled by 24 per cent to 37,426 units.

LAUNCH PRICE INCREASE

 Despite a significant slowdown in the real estate sector across India over the last two years, the new launch prices have continued to rise unabated, ranging from 5 per cent to 16 per cent, on a compounded annualized price rise (CAPR), over a four-year period.  The maximum increase was witnessed in Gurgaon, with a CAPR of 16 per cent, followed by Thane at 14 per cent, and Pune and Mumbai at 12 per cent each.  Mumbai continues to be the most expensive city with weighted average price of `  16,000 psf, followed by Gurgaon at ` 6,700 psf, a distant second.

Source: Prop Equity

Five Reasons South India Fared Well

Here are some of the key factors that had an impact on the performance of South India. • Realty prices have remained at realistic levels and appreciated moderately in the weak market. • It has primarily been an end-user market so did not get adversely affected when investors started to withdraw from the market in the last couple of years. • Developers are not over-extended as they have launched smaller projects and are well capitalised. The land prices in the south are also much lower than the northern and western markets. • Many of the real estate projects in the Southern Region are sold post construction or when they are about to be completed, which leads to increased home buyers' confidence. Developers are also not heavily dependent on cash flows from sales to fund the projects and manage their finances more efficiently. • The South Indian region has evolved as the IT hub of India since the last decade and continuous increase in demand of IT space during last few years has maintained the end user driven demand in these cities.

RANKING – INVENTORY OVERHANG

 Of the major cities of India, Faridabad was hit the most in terms of sales velocity, and thus has the highest two year average inventory overhang of more than 65 months.  All the five cities of NCR had inventory overhang of more than 50 months at the start of this year.  Bengaluru had the lowest overhang at the start of this year, at 22 months, followed by Pune at 24, and Ahmedabad at 25 months.

SIZE OF MARKET

 Bengaluru, leading with ` 360 Billion of primary yearly sales, is the only city that witnessed an increase in its market size (4 per cent) from last year.  Mumbai, falling 13 per cent, follows closely with ` 340

Billion worth of sales.  The other ` 100 Billion markets left in India are Pune (`  216 Bn), Gurgaon (`  165 Bn), Thane (` 163 Bn), Chennai (` 130 Bn), G. Noida (` 106 Bn), and Hyderabad (` 100 Bn).  The market size of NCR fell by a whopping 58 per cent (down to ` 264 Billion from ` 552 Billion), followed by a 12 per cent fall in MMR. South was the only resilient market, falling by a mere 2 per cent Of the total 7,300 projects launched in 14 cities between 2009 to 2011 period, 2,100 i.e. around 30 per cent of the total projects, are still under construction. Ahmedabad leads the rankings with 93 per cent completions, followed by Hyderabad (84 per cent), Chennai (82 per cent), and Navi Mumbai (81 per cent). 29


INSIDER SPEAK

June 2015

'Look for a Good Developer with an Excellent Track Record' Confederation of Real Estate Developers’ Associations of India (CREDAI), the national body representing developers in India and driving self-regulation for the sector, recently installed a new team for the year 2015- 2017. India Property Insider spoke to GETAMBER ANAND, the new President – CREDAI National

You have just been appointed as President of CREDAI. (2015-2017). Could you tell us what role CREDAI plays in the industry and how this finally impacts home buyers? CREDAI is the apex body consisting of 154 city chapters and 24 state chapters. We are a self-regulatory body and this self-regulation impacts home buyers positively. All our 11,500 members are expected to sign our code of conduct. This code states that the member should adhere to uniform procedures in construction, maintain transparency with the customers and have a mechanism for consumer grievance redressal.

QUICK FACTS • The developers' apex body, CREDAI, has a code of conduct that all 11,500 members are expected to sign. • CREDAI has a consumer grievance redressal forum in each of its city chapters.

CREDAI has made transparency in the real estate industry, one of its key planks for action. Could you elaborate on what CREDAI has done to boost transparency in the sector? How much of a challenge would you say is still left on this front? We are continuously endeavouring to ensure greater and greater degree of transparency and our code of conduct is much in line with the proposed legislation called the 'Real Estate Regulatory Act (RERA)'. The sector has been going through some difficult times lately. Do you believe that this is a good time for nonresident Indians to be buying property in India? If so, why? All industries go through good and bad times and ours is no exception. It is a good time for NRIs to be buying into homes in India. The economy is expected to grow at an average rate of over 8 per cent in the next five years. This accelerated rate of growth will increase demand for homes, wherein currently there is a shortage of 19 million units. The projected economic growth will further increase this gap. What are the advantages that they would gain by acquiring property here, in terms of returns, and capital appreciation? 30

Keeping in mind a time horizon of five years or more, capital appreciation has been among the highest in real estate and this will continue. The accelerated rate of growth mentioned earlier will further strengthen the rate of appreciation. Which are the locations that they should be focusing on and why? Anywhere in India, with no particular geographical focus. What would you say is the current state of infrastructure in the country and how is this changing in Narendra Modi's India? How would this impact real estate markets? Obviously with improved infrastructure, the real estate business has impacted positively. One hundred smart cities, better roads, better communications, better connectivity are all going to very positively impact the real estate industry.

Single-window clearance and a focus on Goods and Service Tax (GST) are among CREDAI's stated goals for the new term. What would this mean for home buyers, particularly non-resident Indians? CREDAI has been continuously making representations to the state and central governments on a single window clearance. The complexity of the current laws is such that commission after commission has been appointed to find ways and means to bring all the laws under the single window. While this is work in progress, in the intervening period, because of the several clearances from different departments/ministries the developer has to incur additional costs. Currently each state has its own tax norms which would become uniform with the introduction of GST. Clearly, a benefit to the home buyer irrespective of where they are buying. If home buyers have had a difficult experience while buying property in India, what is the recourse that they can take? Whom can they approach for help? Does CREDAI offer any such services to buyers? CREDAI has a consumer grievance redressal forum in each of its city chapters. For e.g. CREDAI NCR in the last one month has addressed and resolved more than a hundred doubts/complaints received from several consumers. The way this works is that the consumer logs a complaint with CREDAI NCR, then CREDAI forwards the complaints to the concerned developer for his response. Once a month, a meeting is held where developers and consumers meet in the presence of CREDAI office-bearers and issues are resolved to mutual satisfaction. What would your advice to NRIs be while looking for property in India? Look for a good developer with an excellent track record. Good location and a reasonable entry price are important too. MENKA SHIVDASANI www.indiapropertyinsider.in | A

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EXPERT VIEW

June 2015

'Indian Real Estate is Moving towards Maturity' PRANAY VAKIL, who has watched the property market at close quarters over the last 26 years, believes it is far more professional today than it was 20 years ago, says MENKA SHIVDASANI

QUICK FACTS • Pranay Vakil, who was Founder Chairman of Knight Frank in India, has seen dramatic changes in the Indian property market. • With ready stock and developers eager to sell, this is a good time for NRIs to plan property purchases, he says.

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ranay Vakil, Founder Chairman of Praron Consultancy (India) Pvt. Ltd, has had a ringside view of Indian real estate for more than 26 years. Armed with qualifications in Accountancy (CA) and Law (LLB), he has worked with various Tata Group companies; with Raychem in India (a California-based Fortune 500 company) and as Managing Director of GESCO Corporation Ltd. It was in 1995 that he became Founder Chairman of Knight Frank in India, having set up the joint venture with Knight Frank UK, a leading international property consulting firm. Mr Vakil retired from Knight Frank on September 30, 2012, but at 68, he is still actively involved in several highprofile real estate-related activities. He is a member of the Real Estate Committee of Federation of Indian Chambers of Commerce & Industry (FICCI), after having served as

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its Co-Chairman for over five years; he is Co-Chairman of Housing & Real Estate Committee, Indian Merchants Chamber (IMC) and on the Management Board of IMC; he is also on the World Governing Council of Royal Institute of Chartered Surveyors (RICS), the highest professional Real Estate Body. Through all this, he finds time to be a Trustee with organisations connected with setting up of old age homes (Dignity), a school for integrated education (Rites) and an institution operating medical dispensaries (Prakash Charities). Mr Vakil took some time off in his tastefully decorated office at Nariman Point in Mumbai to reflect on the growing professionalism of the Indian real estate sector over the last 26 years and why non-resident Indians must think of investing in property here despite market sentiments being down.

MENKA SHIVDASANI (MS): You have seen the Indian real estate sector change quite dramatically over the last 25 years and were involved in setting up one of the first international property consultancies. Could you tell us about those early days and the changes you have seen? PRANAY VAKIL (PV): In 1992-'93, Mumbai was touted as the most expensive office space in the world. The dollar was at ` 15—I remember a time in '89 - '90 when it was ` 10. There was no organised broking set-up for real estate until '94 - '95. The first to enter was Colliers International with HDFC and ILFS as Indian partners, and Jardine Fleming had some holding. In '94, Knight Frank was the second to come in—Knight Frank UK, Great Eastern Shipping Company, and myself. Later, we also inducted Chandru Raheja [a leading developer] as a partner. After the demerger of Great Eastern Shipping, GESCO came www.indiapropertyinsider.in | A

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in and this was taken over by Mahindra Lifespaces, so by default Mahindras became a part of it. There was also a small component of Great Eastern Shipping called G-Corp. In 2007-2008, Knight Frank decided to buy out all the partners, including myself. However, at the request of Knight Frank, UK, I continued as Chairman of the Indian company for five years, until the end of 2012. MS: How did the entry of international property consultancies (IPCs) change the dynamics of Indian real estate? PV: The first change was that IPCs emphasised on property research. This was produced by professional researchers and very soon we saw some “method in the madness”. Non-resident Indians (NRIs) had access to these reports, so they were better informed; prices of various locations were published, they knew how much to pay for real estate. The second was that all foreign firms operating here could attract and appoint the best talent—MBAs, lawyers— something that was not possible for individual brokers. The standards of broking underwent a complete transformation. From ad-hocism, there was professionalism, a wellorganised, well-run system. Data management became organised; sitting in Mumbai, with a click of the finger, we could show properties in Delhi to potential customers. Knight Frank had 900 people; we had to have systems and processes. The most important thing was that organised training was now available. There were other changes, such as the Ready Reckoner, which came in 2002. There was initial debugging, some wrong numbers—in a document so vast, there will be anomalies—but today it is considered a Bible. Websites like Magicbricks came in so people knew what property rates were. The entire residential market was divided into two— the primary market, with the first sale from developer to buyer, where there was a reasonable amount of transparency, and the secondary market, where the investor was selling in a market that was opaque. In the last 20 years, much has changed—from the way lawyers look at titles to how information is accessed; stamp duty, registrations… We are moving towards a more transparent market, and almost to full cheque payments. The market is also beginning to accept penalties for late deliveries, people have won cases against developers for this; earlier, delays of two or three years were taken for granted. The market is maturing—there is information, transparency, legal titles are checked and certified, obligations of developers are encapsulated. Are we completely there yet? No, but we are much better off than we were 20 years ago. It's been a very eventful 20 years with so much having changed—from building materials to design, to the way we

build high-rises. There was a time when seven storeys was considered tall in India, now we build 102-storey buildings. I remember when the 60-storey Belvedere Court was built, we had difficulty finding a lift supplier. Then we found one in Chennai, but every time the lift broke down, it would take two days for the parts to come from there! The way we build, the way we sell… everything has changed. Who would have thought then that someone would buy a flat on a property website without even seeing it! Now, there are even sales by auction of large, palatial properties, where until recently, price discovery was an issue.

"It's a well-known fact that you make money by going against the tide; this is a basic principle of investing. So why not buy when the market is down and you have a choice and you get respect as a customer?" Pranay Vakil, Founder Chairman, Praron Consultancy (India) Pvt.Ltd

you get respect as a customer? There was a time when you would have to make five calls to a developer before you got a response; today it is the developer who will make those five calls to you as a potential customer!

5 Reasons to Invest in India If you were to enumerate five reasons why NRIs should look at buying property in India, what would they be? There are many reasons why NRIs should invest in India today. 1) The rupee-dollar parity is very good. Since the rupee is weak, they have to bring fewer dollars to India for the same property. 2) Developers are on the defensive, with piled-up inventory. They are eager to sell and may be willing to negotiate. NRIs have a choice. 3) There is better transparency and available stock of ready product. 4) NRIs are bound to come back sooner or later to India. Now is the time to plan their return, at least in terms of the house they want to stay in, when they return. 5) Renting out properties has become much safer than it was 20 years ago. Earlier you weren't sure if you would get your property back, but in the last five to seven years, this has changed. You will have a productive asset, although the return or yield on residential property is low.

MS: What would your advice be to NRIs who are looking to buy property in India today? PV: My advice to NRIs would be to buy a property that is ready, or close to ready; where you can check everything from the title to the specifications, amenities … remove all the ifs and buts. The Real Estate Regulation Bill will also help; some aspects will need to be fine-tuned, like how much of the money should go into an escrow account, but there is no question that it will help. In Dubai, every developer has to put the money in an escrow account; they get the last 40 per cent when they deliver. MS: Market sentiments are generally down in India. Is this the right time for NRIs to buy property? PV: It's a well-known fact that you make money by going against the tide; this is a basic principle of investing. So why not buy when the market is down and you have a choice and

Pranay Vakil,

Founder Chairman of Praron Consultancy (India) Pvt. Ltd & Founder Chairman of Knight Frank India 33


DEVELOPER SPEAK

June 2015

'This is One of the Best Times for N RI s t o I nve s t i n I n d i a ' As Mahindra Lifespace Developers Limited makes its presence felt in Dubai, Anita Arjundas, MD & CEO of the company speaks to India Property Insider

QUICK FACTS • UAE traditionally has been the largest contributor of real estate investments by NRIs in India. • With property prices having plateaued and poised to go upwards, this is one of the best times for NRIs to invest in India. Pic courtesy: Mahindra Lifespace

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n May 26, 2015, Mahindra Lifespace Developers Limited, the real estate and infrastructure development business of the $16.5 billion Mahindra Group, announced the opening of its first international office in Dubai, UAE. With a portfolio spanning the mid, premium and luxury housing segments, Mahindra Lifespaces is present across Mumbai, Pune, Nagpur, Gurgaon, Chennai, Hyderabad and Bengaluru. The residential and commercial development footprint of Mahindra Lifespaces comprises over 0.83 million sq.m. (8.92 million sq.ft) of completed projects with over 0.96 million sq.m. (10.38 million sq.ft.) of ongoing and forthcoming projects. Mahindra Lifespaces has also pioneered the concept of integrated business cities through its ‘Mahindra World City’ developments in Chennai and Jaipur. Mahindra Lifespaces launched its real estate office in Dubai, UAE on May 26h, 2015. What was the driving force behind this decision; would you say more Indians in the UAE today are looking to buy Indian property, prompting you to want to reach out to them? Do you have plans for any specific events/ promotions in the UAE?

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UAE traditionally has been the largest contributor of real estate investments by non-resident Indians (NRIs) in India and Mahindra Lifespaces also gets approximately 10 per cent contribution of its business from this market, hence it becomes the natural choice for us to have our physical presence in this critical market. Given our portfolio spread spanning affordable to luxury across the North West and South of India we believe that we can tap into the diverse Indian disapora. Over the last few years we have been participating in property exhibitions and in road shows with our channel partners. However with a physical representative office we will be able to service not only our partners but with direct potential customers who would find it more convenient to deal with our representative face to face. It also gives us the opportunity to address any current customer queries that may arise on a real time basis. Mahindra Lifespace Developers Ltd is the real estate development business of the $16.5 billion Mahindra Group. With corporates such as yours entering the real estate business in India, how has this transformed the

landscape in terms of quality, credibility and transparency of Indian real estate? Customers are increasingly becoming the fulcrum around which the promise or products and services are being delivered. Interestingly real estate is one of the few sectors where the customer pays for a product without having seen it, and goes by an experience or a two-dimensional expression of the same. In this scenario it is critical to be transparent, responsive and customer-centric. With corporates having entered real estate, the industry is in a transformation mode. In Mahindra Lifespaces, projects are launched with approvals are in place, there are regular updates given on construction progress and construction commences simultaneously with sales. Clarity on pricing and documentation also help build on transparency. This has helped us build loyalty, referrals and gain confidence of customers throughout the journey cycle. The company’s residential footprint spans across Mumbai, Pune, Delhi NCR, Nagpur, Hyderabad, Chennai and you also have plans to venture into Bengaluru. Tell us about the kind of projects that you offer in these varied locations. Which cities do you believe offer the most potential for www.indiapropertyinsider.in | A

MEDIA PUBLICATION


June 2015

NRIs today? Are there any common features they share that enhance their attractiveness to NRI home buyers? Mahindra Lifespaces is one of the few real estate developers having its presence in all three segments, namely Affordable, Mid to Premium and Luxury housing formats with prices ranging from ` 10 lakh to ` 7 crore. After a successful foray in the mid to premium segment in the National Capital Region (NCR), we recently launched our luxury project in Gurgaon, Luminare, which has been received very well by NRIs, who have contributed close to 30 per cent of sales. There are two kinds of NRI customers. One kind are those that are looking to re-establish their roots in their home territory and they are city and region-centric. We have found that there has been significant interest for our Bloomdale project in Nagpur, Ashvita in Hyderabad and our Mahindra World City residential projects in Chennai. The end user NRI looks for projects in a good location with the right social infrastructure, projects that allow their investment to be safe and within the budget they have set for themselves. There is another set of customers who look at real estate as part of their investment portfolio. For the second set of customers, markets like Bengaluru, Mumbai and Pune are currently the hot favorites. Micro markets with good infrastructure, either current or in the pipeline and those with lower price points become the choice of investors. We will be soon launching our project Windchimes in Bengaluru, a market which has seen sustained interest in the last several years. A new trend that has emerged is to own weekend homes amongst those customers who are looking for an enhanced lifestyle. Our project, The Serenes in Alibaug. addresses this need and has generated a lot of interest amongst a lot of Mumbaikars looking for a weekend getaway. You have also pioneered the concept of an integrated business city through ‘Mahindra World City’ developments in Chennai and Jaipur. Could you tell us more about this concept and what sort of possibilities such projects offer for NRIs looking to invest in India? Mahindra Lifespaces has pioneered the concept of an integrated business city through ‘Mahindra World City’ (MWC) developments in Chennai and Jaipur. These developments cover 1796 hectares (4,437 acres) and house over 125 reputed global companies, providing an integrated environment for Life, Living and Livelihood. The World Cities currently provide employment to over 42,000 people making it a robust job creation ecosystem. Today Mahindra World City in Chennai exemplifies that ethos of Life Living and Livelihood with three residential projects Aqualily, Iris Court and Nova under development, and one project Sylvan County completed handed over. A CBSE School, an Apollo Clinic and JSP Hospital, Shopping, a Club for Relaxation, Holiday Inn express are

" There is a stable government today, multiple infrastructure projects have been announced and the smart city initiative are all driving towards growth and development." Anita Arjundas, MD & CEO, Mahindra Lifespace Developers Limited

Anita Arjundas, MD & CEO, Mahindra Lifespaces with Smeeta Neogi, VP Marketing, Mahindra Lifespaces

some of the social amenities here. Building the soul of the city is equally important to us and regular events like quizzes, matches and cultural events all add up to create a vibrant community within MWC Chennai. There has been a lot of interest expressed amongst NRIs in our projects in Chennai especially from the GCC countries. Mahindra Lifespaces was also one of the first companies to receive the Platinum rated green homes pre-certification from IGBC and today all residential projects are pre-certified green buildings by IGBC. What are the benefits of such projects that would make them more attractive to NRIs? The mission of the company is 'Transforming Urban Landscapes by creating sustainable communities'. In line with this vision every one of our homes is pre-certified or certified by IGBC, including our affordable housing projects, and all our projects maintain the same level of certification post completion. Two of our delivered projects are Platinum rated projects, and all of our premium category projects get either a Gold or Platinum rating. NRIs place a lot of importance on sustainability. Our green homes philosophy addresses their need for environment consciousness and conservation. All Mahindra Lifespaces Green Homes have realised direct customer benefits which includes lower power consumption, lower water consumption, recycling of waste water – benefits that directly accrue to the living experience. Mahindra Lifespaces offers a range of properties, from the super-luxurious to affordable housing such as the Happinest project in Boisar near Mumbai. What do NRIs generally look for when they are purchasing property in India? Do they prefer luxurious housing or do they prefer more of the middle-range variety of homes? Has Mahindra Lifespace done any studies on the subject?

NRIs evaluate properties in two ways, either for investment or for end use. Properties which fall under Mid to Premium categories have Investment to End use percentage of almost 50:50, but for Luxury projects it generally is skewed more towards End Use. The affordable housing segment, which is in the range of ` 10-20 lakh, significantly attracts end users, as people employed in the manufacturing industry on the shop floor abroad, majorly in GCC, also have an aspiration of owning an asset back home. Do you believe that this is a good time for NRIs in the UAE to consider investing in Indian real estate? If so, why? This is one of the best times for NRIs to invest in India. Property prices in the last couple of years have plateaued and the only way for them to go is upwards. There is a stable government today, multiple infrastructure projects have been announced and the smart city initiative are all driving towards growth and development. With the projected GDP growth numbers of close to eight per cent CAGR, India is expected to witness major investment influx, with improved sentiments and perception about the country. Secondly the rupee is currently depreciated against the dollar and there is likely to be a pull back. It seems an opportune time for NRIs to invest in properties so that they can maximise their investment with the capital appreciation of property. What would your advice to such NRIs be? Our advice would be to be fully sure of the project that they are investing in, to select the market of their choice carefully seeing the growth trends of the past, to check all the documentation carefully, to look at the past history of the developer in terms of project delivery, transparency and timelines before they invest into a property. They should also talk to friends and acquaintances, possibly regional brokers, for reassurance. 35


THE BIG PICTURE

June 2015

' M o d i G o v e r n m e n t o n Tr a c k ' While all of Prime Minister Narendra Modi's promises have not been met in the one year he has been in office, there has been some progress

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s the Modi government completes a year in office, the initial euphoria is giving way to a more realistic cautious optimism that recognises a fundamental fact - that confidence has been returning to the economy, spurred on by big-ticket plans such as smart cities and 'Make in India'. Experts agree that such changes will not take place overnight, but the political will and enthusiasm to make them happen is strong. Anuj Puri, Chairman and Country Head at JLL India, believes that Narendra Modi's government "is reasonably on track with fulfilling its shortterm, medium-term and long-term promises". JLL has put together a white paper on the subject, conducting a survey of the Indian real estate community. The research reveals nine impressions, or misimpressions, of this government that exists in the minds of Indian realty’s stakeholders. JLL experts point out that major initiatives will take time to become a reality and criticising these too soon may be premature. "Initiatives such as developing affordable residential projects, robust infrastructure, and financial inclusion of the lower income group (LIG) segment into the 36

banking sector are important initiatives but require time to fructify," says JLL.

 Investment opportunities in office spaces open up for small retail investors thanks to REITs.

Here is what ANUJ PURI has to say:

 The quality of life of millions of Indian citizens is upgraded when the proposed 100 smart and sustainable cities come to life.

The continuation of the previous government’s policies like Land Acquisition and Rehabilitation and Resettlement (LARR) Bill, Real Estate (Regulation and Development) Bill will have significant impact on the real estate industry once these are passed by the Parliament. India’s historically opaque real estate sector will move towards more transparency with the introduction and implementation of these key policies. It is worthwhile to reflect on the grassroots-level transformation we can expect to see when:  Millions of home buyers in towns and cities, and farmers across the country (the latter being landowners affected by infrastructure projects) are empowered with the clauses in the real estate regulatory bill and LARR.

 ‘Benami’ transactions, which have for the longest time been a bane of the real estate sector, are eliminated. Let us take a look at the progress on some of the promises Narendra Modi’s party made in its electoral manifesto. Specifically, we will isolate promises which have direct bearing on enhanced governance and reinforced democratic fundamentals, which are important for India’s development and future-readiness:

PROMISES ON TRACK Transparency: Re-auctioning of coal blocks earned the government huge revenues. www.indiapropertyinsider.in | A

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Efficiency: Real-time effort towards rendering the existing institutional frameworks more efficient; a good example being the change in Food Corporation of India’s food procurement and storage mechanisms. Productivity And Accountability: Narendra Modi has been directly involved in monitoring and raising the productivity as well as efficiency of his ministry officials. He is clearly bucking a chronic trend of bureaucratic unavailability and aiming to increase public access to government officials. Black Money: The Black Money Bill has given a moratorium period to bring back unaccounted money into the system by paying normal tax. The ongoing dialogue with the Swiss financial authorities to disclose secret accounts of Indians abroad is reaping results. Corruption: Wired (online) transactions are now being encouraged for property transactions. This is a major step forward for curtailing black money in the sector. Investor Confidence: Market confidence has improved with the strengthening of the Indian equity, debt, currency markets and equal tax regime that was promised to both domestic as well as international investment companies Positioning India: Via a series of international tours, the PM is helping India rid itself of its anti-investor image and is opening up new avenues of foreign business in India, especially under the ‘Make in India’ campaign.

• Initiation of employment exchange programmes with other countries • Obsolete laws to be scrapped or modified • Online dissemination of court cases for better monitoring and creation of specialised courts to fast-track delivery of justice. In short, the Modi Government has a fairly balanced list of hits and misses so far. The trend does seem to lean more towards action than inaction. It definitely seems that Modi has every intention of living up to the larger part of his

QUICK FACTS • As the Modi government completes a year in office, experts believe that India is on its way to transparency and efficiency. • Wired (online) transactions are now being encouraged for property transactions.

June 2015

electoral promises in the future. I agree with Reserve Bank of India (RBI) Governor Raghuram Rajan when he says that the expectations from the new government when it came to power last year were ‘probably unrealistic’, and that it has in fact taken steps to create an environment for investment and is sensitive to concerns of investors.

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Much has been said, but little has been delivered JLL’s view: Modi has taken several initiatives, the outcomes of which will be seen only in the medium-tolong term (i.e. 2-3 years). Initiatives such as developing affordable residential projects, robust infrastructure, financial inclusion of the LIG segment into the banking sector, etc., are important initiatives but require time to fructify. Critical evaluation of success at this stage may be premature.

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Power is too concentrated JLL’s view: This fear loomed large in the minds of several political and market analysts since the time Modi came to power. The highly centralised appearance of the government has moderated in recent times with decentralisation of power to cabinet members and states’ chief ministers. We agree that power should be further de-centralised to the grassroots level (i.e. district and panchayat level authorities) and this further downward percolation of power may take another year or two.

Decentralisation And Cooperative Governance • Gradual increase in the financial autonomy of states • Farmers get real-time information on Minimum Support Price through digital channels and Kisan TV. Drastic price movements have been largely under control. A focus on citizen outreach programmes as well as leveraging social media have bought people closer to the governance process.

PROMISES THAT MAY SEE PROGRESS SOON • States with similar problems will be able to form councils under Niti Aayog to discuss common concerns. • Niti Aayog, along with other national agencies, will help individual states in mobilisation of resources.

PROMISES THAT SAW LITTLE OR NO PROGRESS • Relaxing clauses in the Land Acquisition and Rehabilitation and Resettlement Bill (LARR), Real Estate Investment Trusts (REITs) and Foreign Direct Investment (FDI) policies that investors find difficult to follow • Increased credit facilitation to start-ups 38

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June 2015

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Land Acquisition and Rehabilitation and Resettlement Bill not progressing as expected JLL’s view: There has not been much progress on the bill since the time it was first approved by the previous Congress government, and even after the recent amendments made in the Bill by the Modi government. Modi’s grand vision to build superior infrastructure, affordable housing projects and smart cities is related to the success of this Bill, which could be cleared by the Parliament after recommendations by the Joint Committee of Parliament come through in the monsoon session.

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Clarity needed on ‘Housing for all by 2022’ scheme JLL’s view: After having announced the scheme during the first Budget in June 2014, the government has remained silent on details. The market expected fine prints to come by in subsequent communications. The task of constructing 2.34 million homes every year as against an actual delivery of 1.2 million homes during the 11th five-year plan period (ending March 2012) is humungous.

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Smart Cities Mission cleared by the Cabinet but clarity needed JLL’s view: As the definition of smart cities given in the note

released by Ministry of Urban Development is too broad, different agencies have had different interpretation of the concept. Even though the union cabinet has cleared the Smart Cities Mission and allocated Rs 48,000 crore, there is a lack of clarity on identification criteria for the qualifying cities.

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The Real Estate (Regulation and Development) Bill still pending JLL’s view: Construction delays in many real estate projects are the result of delay in granting statutory approvals. Cost of financing material costs rise exponentially as a result of such delays, and this has an adverse impact on housing prices. The Bill – that the government is currently considering sending to a select committee for review – does not cover the actions of approval authorities and largely attempts to curb malpractices at the developers’ end. We feel that the Modi government could have done more on this front.

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E-commerce needs to be regulated JLL’s view: E-commerce has taken the Indian retail market by storm, and has been growing at close to 35% y-o-y in the last few years. Stiff competition among e-commerce players has resulted in price wars that had impacted the margins of physical retailers. There is a need to regulate the

online retail space and bring them on level playing field along with physical retailers. As of now, we see no evidence of efforts being made in this direction.

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Anti-corruption needs to be a focus area JLL’s view: The promise of bringing the Lokpal bill immediately had given Modi a marginal edge over the AAP party - the champions of the anti-corruption brigade - during the elections of May 2014. However, subsequent lack of progress or even convincing talk in that direction has been giving an impression that the issue is a low priority one for the Modi government. If not for this apathy, Modi would have performed better in the recently concluded Delhi elections.

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Tax structures are complex and retrospective tax amendments continue to haunt businesses JLL’s view: While the Modi government had expressed its strong intention of doing away with retrospective amendments, the issue still remains unresolved. Also, while simplification of tax structures has been spoken about, this will take some time to implement. If these tax issues are addressed properly, India would move forward in terms of improvement in World Bank’s ‘Doing Business’ rankings.

Keeping the Wheels Running

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Representatives of freight forwarders met in Mumbai recently to discuss issues related to logistics, waterways, the Delhi-Mumbai Industrial Corridor and much more

f India is to move forward, it is the logistics sector that will keep the wheels running smoothly. Recently, the Federation of Freight Forwarders’ Associations in India (FFFAI), the oldest and the Apex Body of Custom Brokers and Freight Forwarders controlling 90 per cent of India’s international logistics trade hosted the ‘FFFAI Biennial Convention’ to discuss issues involved with the Delhi-Mumbai Industrial Corridor, inland waterways, coastal shipping and much more. Mr Devendra Fadnavis, Chief Minister of Maharashtra, flagged off the event, which was being held after 14 years. "I always feel this is the right time, since it’s an inspired time when the growth story of India has begun," he said. "We have the opportunity to be a manufacturing hub. Make in India is now and you can become leaders of the growth story as it is dependent on a few pillars of industry and logistics is one." He also said that with the Goods and Service Tax (GST) being passed, hopes were running high. "The global country wants to invest in India. The government is providing measures of doing seamless

"We are focusing in Maharashtra on Aurangabad and Nagpur. Also with the Delhi-Mumbai industrial corridor, lots of opportunities are in the pipeline." - Devendra Fadnavis,

Maharashtra Chief Minister big ports is also a focus. Also we will look into cargo handling so as to increase it multifold. Special purpose vehicles (SPVs) are trying to develop railway connectivity to ports.” business," the chief minister said. "We are coming up with an integrated logistic park at Bhiwandi in Mumbai. The development is ready and soon a stateof-art facility will be developed to boost your industry. GST will also open doors for industry. We are focusing in Maharashtra on Aurangabad and Nagpur. Also with the Delhi-Mumbai industrial corridor, lots of opportunities are in the pipeline. Developing major

Ashish Pednekar, Convenor, said: "We urge the government to fast-track infrastructure projects and create a logistic hub at major cities". Debashish Dutta, President, FFFAI added: "The convention theme is based on make in India programme driven by our government. Logistics is the pre requisite for Make in India to succeed. The convention will give a food for thought for policy makers".

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SUSTAINABLE LIFESTYLES

June 2015

Opt for EcoFr i e n d l y Living As World Environment Day comes up on June 5, SAEE BANDEKAR reflects on how green buildings offer multiple benefits, both for the environment and for users

“The future will either be green or not at all."

QUICK FACTS • As the green building movement grows in India, buyers are recognising the multiple advantages in terms of lower energy costs and greater well-being. • The movement has now extended to residential spaces that offer a range of eco-friendly features.

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- Jonathon Porritt

welcome trend is being set in the real estate sector in India. Indian developers are recognising the importance of green buildings and are increasingly adopting green measures in their projects voluntarily. In the long run it would contribute towards reduction of energy consumption and the environmental impact of construction. For non-resident Indians (NRIs) who are looking to buy property in India, considerable options are open for investing which would give them true value for their money. A healthy environment, reduction in pollution, saving on energy costs with lower utility demands and better resale value are among the many benefits of green buildings. Green buildings essentially refer to the co-existence of a built form in harmony with its immediate surroundings. This includes all the various processes related to it starting from the conceptualisation stage and further covering its entire life-span. These basic concepts which ideally are at the root

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of design and built forms somewhere lost their precedence in the fast-paced urbanisation. As a result, today we have to make sustained and focussed efforts to correct the skewed balance on a global level by going back to the basics. “From an ancient age, Indian architecture has historically emphasised the significance of the built environment to its location," says Srushti Chitnis, an environmental architect and practicing LEED-AP (Leadership in Energy and Environmental Design-Accredited Professional). "Local materials were generously used in construction. Buildings were oriented skilfully with the help of solar study to maximise the natural light within, while shading devices cut the heat and glare. Sizes, shapes and location of fenestrations and openings articulated the envelope in response to the seasons and weather. The ‘Green Building’ concept, which is rapidly gaining popularity in our country, is also based on our conventional architecture. “Being practicing environmental architects, we are very happy to see an increasing sustainable approach being taken www.indiapropertyinsider.in | A

MEDIA PUBLICATION


June 2015

“I believe that we should be more aware on an individual level regarding environment and should opt for an eco-friendly way of living.” Harshal Kasat Dubai-based banker

On the importance of such development, especially in residential buildings he says, “Our goal in creating ‘green homes’ is not only to be responsible to our environment but also help our customers optimise their use of resources and live greener lives. On one of our residential projects we have recently piloted a ‘sustainability manual’ that we included with the flat handover. This manual was formulated to leverage the green infrastructure to finally help our customers reduce their bills and yet live better lives. We are also in the process to pilot post occupancy surveys to close the loop between green infrastructure and demonstrable benefits seen over the project lifecycle.”

GENERATING AWARENESS

in the building industry across the country similar to other European countries. This is creating abundant scope for NRIs to invest in an upgrading Indian real estate market,” she continues, adding, “Building rating systems are helping and guiding the construction industry to bring momentum in achieving energy efficiency and sustainability in buildings. The country has currently two rating systems namely, The Indian Green Building Council (IGBC) and Green Rating for Integrated Habitat Assessment (GRIHA). These rating systems provide opportunities to introduce new products and materials, equipment and technologies which have less impact on the environment throughout its life span and reduce carbon emission.”

“Where we do not directly control the value chain and as mentioned above, we constantly look for ways and means to influence stakeholders to share a holistic vision in adopting sustainable approaches,” he adds.

Priyanka believes that NRIs can play a critical role in contributing towards the green development of the country. She says, “Specifically speaking of NRIs, they are positioned to make an impact on the overall real estate scenario of India. They should ascertain that they are investing in a sustainable project. They should see to it that the basic factors like construction quality, water, lighting, use of renewable resources of energy are in compliance with the sustainable building norms. Ultimately it’s only when the end-user starts demanding, then the picture would change.” As rightly pointed out by Priyanka, the onus of creating a sustainable habitat equally rests with the end-user since they are in a position to demand. Harshal Kasat, an NRI Banker in Dubai would definitely like to invest in a green property back home. “I believe that we should be more aware on an individual level regarding environment and should opt for an eco-friendly ways of living,” he says.

BETTER APPRECIATION

K. Raheja Corp is among the leading real estate developers in India. The company is committed to have all their projects as LEED and IGBC Green Homes certified green buildings. Shabbir Kanchwala, Senior Vice-President, K. Raheja Corp

“From an ancient age, Indian architecture has historically emphasised the significance of the built environment to its location," - Srushti Chitnis, Environmental Architect

Pic courtesy: Godrej Properties

The Godrej Group has been associated with sustainable development for decades, having built a reputation for its commitment to environmental causes. They are one of the founding members of the IGBC. Elaborating on how the green buildings movement has grown over the years, Anubhav Gupta, Chief Design Officer and Head of Corporate Social Responsibility, Godrej Properties says, “At Godrej Properties all our recent buildings are precertified under this rating system. We participate actively in raising the bar using codes defined by IGBC setting up systems, mechanisms and platforms for these practices, codes and innovations to be realistically implemented. Where we control the value chain, we have made significant progress in adopting green practices. Today, the majority of our current projects include the standard features such as 100 per cent rainwater harvesting, optimum daylight and fresh air ventilation, electric car charging facility, grey water treatment for landscaping and flushing purposes, waterefficient fixtures in bathrooms and kitchens, differentlyabled friendly features, plantation using native species and local ground covers, energy efficient pumps, motors and elevators, use of low volatile organic compound (VOC) paints and at least IGBC Silver rating.

Commenting on the present status of the green buildings movement in India, Priyanka Kochhar, Senior Programme Manager, GRIHA Council observes, "A survey of the total constructed property across all sectors in the country which was conducted a couple of years back, indicated that less than one per cent of total built-up area was certified. Although there's definitely a rising awareness about things, a lot of push to mainstream resource efficiency is still required. The key factor is generating awareness, which would, in turn make people demand environmentally sustainable buildings. Once this demand is created then the supply would automatically increase. The norms should be accentuated, policies should be implemented and environmental clearances should be sought. People should ask

for cost benefits and the government is already giving incentives and faster clearances. Given the construction activity taking place in our country, it really needs to be upscaled.”

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SUSTAINABLE LIFESTYLES

explained some major green initiatives taken by them for all the residential projects. They have an environmental friendly building design to enhance fresh air ventilation as well as maximum daylight in the occupied space which require lesser energy. Use of energy efficient equipment, efficient glazing, building insulation and alternative energy sources reduces dependence on conventional energy sources. Water efficiency is ensured and savings to the tune of 20-25 per cent are targeted by promoting rain water harvesting, low-flow fixtures and use of sewage treatment plant (STP) recycled water. Landscape areas are plenty too. They also provide a home user guide to every occupant for designing energy and environmental friendly homes. Special provisions for physically challenged persons make their spaces more access-friendly.

"As green homes have less operational cost and are sustainable, there is better appreciation resale value for them" Shabbir Kanchwala, Senior Vice-President, K. Raheja Corp

Commenting on how the green buildings scenario offers a prudent opportunity for NRIs to invest in India he says, “The construction industry in India is one of the largest economic activities and is growing at an average rate of 9.5 per cent as compared to the global average of five per cent. With all the above measures, the lifetime payback is much higher compared with that of conventional buildings, which mainly accrue from savings in the electric and water bills. The energy efficiency proves beneficial during peak periods, when energy costs rise due to higher demand and which is a regional priority of the country like India. This reduces the demand for fossil fuel-generated electricity and reduces pollution and the emission of Green House Gases (GHGs). Also, as green homes have less operational cost and are sustainable, there is better appreciation resale value for green homes.� Creating a sustainable built environment is not something that anyone can do single-handedly; it requires a collective approach by all stake-holders. This requires the designers, consultants, developers, owners, facility and project managers to be environmentally responsible, apart from the authorities. Creating awareness is another important aspect. An increasing number of private players are proactively taking this ahead. But the most important mover in this entire scenario is the investor, who has the power to demand and seek a green environment! 42

June 2015

Green Buildings see Exponential Growth While new buildings in India are increasingly growing green, IGBC is encouraging retrofitting of existing buildings too

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ndia, which is a world leader in the green building movement, crossed a major milestone last month when the country crossed the three billion sq. ft. mark of registered green buildings. "We started with 20,000 sq. ft. in 2003, so this is an amazing story for our nation," said Mr Prem C Jain, Chairman, Indian Green Building Council (IGBC) at a conference organised by Confederation of Indian Industry (CII) in Mumbai on May 21. "We are the world's number two in the green movement, but we don't want to remain number two for long," he added. IGBC, which forms a part of CII, aims at facilitating 10 billion sq.ft of green buildings by 2022, coinciding with India’s 75th year of Independence. Pointing out that the cost of constructing a green building had gone down from 18 per cent since they first started to one per cent today for commercial properties, Mr Jain observed that it was even less for green homes. The benefits, however, are enormous, in terms of energy savings, lower maintenance bills and healthier spaces that would contribute to well-being. "You can come back to a home which is more energy-efficient, consuming 30 per cent less energy, plus you will have an environment where children growing up are healthier and medical bills are lower," he explained. Referring to the growing urbanisation and the belief that "three more Indias will need to be created in our lifetime" to meet this growth, he observed that going green would be a very important component of India's journey to becoming a developed nation by 2022. Speakers such as Mr Gurmit Singh Arora, Chairman, Green Existing Buildings Conference and V Suresh, Chair, IGBC Advocacy and Policy Committee, among others, spoke of the potential of retrofitting existing buildings, including residences, through low volatile organic compound (VOC) paint, energy-efficient appliances, eco-friendly housekeeping chemicals such as cleaners, and water-efficient fixtures, among other things. "Retrofitting water fixtures with aerators costs only ten rupees a piece but leads to water savings of 30 - 40 per cent," said M Anand, Principal Counsellor,

CII - IGBC. "There is so much that builders can do but so much that users can do as well," added Mr Suresh. He also mentioned that there was a move to incentivise green buildings through lower property taxes. According to IGBC, which has published a reference guide to green existing buildings, operational savings through energy and water could range from 15 - 30 per cent. Through reducing, recycling and reusing water, green existing buildings can save potable water to a similar extent. While improving the quality of life and health, green buildings can also lead to immense cost savings for users. As Mr Jain put it in a nutshell: "Green makes business sense." MENKA SHIVDASANI

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TREND WATCH

June 2015

S e n t i m e n t s D i p, b u t t h e Fu t u re H o l d s Prom i s e Sentiments are currently down in the Indian real estate sector but there is a strong positive undercurrent thanks to good economic fundamentals, says a new report

QUICK FACTS • The outlook for the real estate sector in India is cautious, yet positive, according to a recent report. • The south and east zones of India have seen a revival in sentiments in the last quarter.

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igh unsold inventory levels in the residential markets and liquidity constraints in the residential sector have led to a cautious, yet positive outlook for the real estate sector, going forward, according to the (Q1 2015, January–March) FICCI-Knight Frank Real Estate Sentiment Index. Stakeholders are fairly positive about the office sector, the report adds. The real estate sentiment index, developed jointly by Knight Frank India and the Federation of Indian Chambers of Commerce and Industry (FICCI), is based on a quarterly survey of key supply-side stakeholders, including developers, private equity funds, banks and non-bank financial companies (NBFCs). Though stakeholders' sentiments continue to reflect a declining trend post the results of the landmark 2014 elections, with a current score of 51, the future sentiment score stands at a healthy 64, indicating a strong positive undercurrent, the report notes. The current initiatives towards creating a business-friendly climate and the push for the 'Make in India' programme have lifted the stakeholders' sentiments, particularly in the office market. Stakeholders are optimistic about the future, in view of the strong economic fundamentals – GDP growth rate, controlled inflation, and the current and fiscal deficit levels.

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Source: FICCI-Knight Frank Real Estate Sentiment Index

While the north and west zones, with Delhi and Mumbai as the driver cities, saw a dip in sentiment levels during Q12015, the south and east zones saw a revival in sentiments during the same period. Both developer and financial institutions continue to show optimism for the future.

maintained in the coming six months. The fact that the economy looks to be revving up coupled with REITs in place has led 68 per cent of the respondents to believe that new office supply will see an uptake in the following six months, the report adds.

The on-going lull in the residential market, reflected in the lack-lustre sentiment levels and the continuous fall in launches and absorption across markets, has bogged down stakeholder sentiments, the report says. Fifteen per cent of the respondents expect the residential sales to be better in the coming six months.

"Developers across the six cities (Mumbai, NCR, Bengaluru, Chennai, Hyderabad and Pune) have continued to restrict new residential launches owing to the oversupply scenario prevailing over the last eight quarters," says Dr Samantak Das - Chief Economist and Director - Research, Knight Frank India. "While new launches have nearly halved during the quarter ended March 2015 compared to the same period last year, sales volume has managed to hold steady. However, new launches are likely to see a marginal improvement over the next six months as reflected in the latest findings of our quarterly FICCI- Knight Frank Real Estate Sentiment Index report ( Jan –March ’15)."

However, in terms of the funding scenario, stable macroeconomic indicators have led to an optimistic sentiment for the future. Over 90 per cent of the respondents expect the economy and funding scenario to be either the same or better in the next six months. A majority of the stakeholders believe that the growth momentum in the economy will be

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URBAN LIVING

June 2015

Smart Cities Will Help India Grow As the government's new initiative begins to gain momentum, a recent knowledge report believes that FY16 will be a game-changer for the country

QUICK FACTS • The Smart Cities movement will open up many new efficient urban centres that will add enormously to India's appeal as an investment destination. • There are many challenges along the way but the momentum is gaining strength.

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he next few years are expected to bring about a visionary transformation for Indian citizens, government and the thriving business enterprises, according to the YES Institute Smart Urbanization Series, a YES Bank initiative, which recently released a knowledge report, Growing the Smart Way. According to the report, with the smart cities initiative officially gaining momentum and government setting aside funds, FY16 is poised to be a game changer - in reviving the investment agenda and providing fresh direction or legitimacy to the concept that has long been popular but will now come close to being implemented. “Close to 8,000 towns and cities are rapidly urbanising due to India’s economic growth. Our cities face a range of social, environmental and economic issues due to lack of planned urban development," said Mr. Rana Kapoor, MD & CEO, YES BANK and Chief Mentor, YES Institute. "The top 100 Indian cities comprise only 0.26% of the country’s total area, yet account for 192 million people. Though the importance of urban centres as economic hubs is indispensible, their adverse impact on the environment cannot be ignored. I am confident that good urban design can give us an opportunity to bring together the best in technology and infrastructure to

achieve compact, efficient and ‘Zero Carbon Cities’, thereby making development truly responsible.” YES Institute Smart Urbanization Series, which convenes key thought leaders to actualise the idea of ‘Smart Cities’, has come up with a list of 15 most viable cities that can help India prosper and would be most feasible nominees for the success of project in its first phase. These include Delhi, Mumbai, Chennai, Ahmedabad, Surat, Lucknow, Gurgaon and Hyderabad. While the Dholera Special Investment Region (SIR) and Gujarat International Financial Tec (GIFT) City are examples of greenfield projects that are already underway, focus under the 100 smart cities project is likely to be on brownfield cities. For such brownfield investments, it is important that objective of smart cities should be to generate employment and not just cater to influx of people (high level of migration in megacities), the report notes.

The report defines a 'Smart City' as an urban area that is developed and self sustainable."It's a city which seeks to deliver high quality of living by excelling in areas of mobility, healthcare, education, business, commerce, technology and governance. At the core is both physical and technology infrastructure, with a network of sensors, wireless devices and intelligent systems," it says. Such cities also ensure lower operational cost, higher efficiency and increased competitiveness.

THE NEED FOR SMART CITIES

As per the World Urbanization data (UN), there were just ten mega-cities (ones with 10mn inhabitants or more) across the world in 1990. In 2014, the number had increased to 28, with 16 of those mega-cities located in Asia. While Tokyo is the world's largest city, it is followed by Delhi at the second place, and Mumbai too is counted among the top five. As the number of mega-cities continues to increase and as the 45


URBAN LIVING

migration of rural population adds further pressure on the existing cities, it is projected that largest urban growth is estimates that India is expected to add around 404mn urban dwellers by 2050, much higher than 292mn by China or 212mn by Nigeria. In such a scenario, managing urban cities of the future is considered to be most important challenge for the policy-makers.

THREE PRIORITIES

HOUSING DEFICIT

next 20 years). Assuming an average population of 1mn

As per the technical group on Urban Housing shortage, constituted under Housing and Urban Poverty Alleviation programme of the government, there was a shortage of

annum requirement of ` 350bn. Since investment of such a large scale cannot be covered by the central budget alone, it is expected that the private sector, along with the support of Ministries such as Urban Development, Housing, Health, Education and the state governments will take this forward. To kick-start the project, the government has earmarked ` 70bn under the FY15 budget.

was noticed in the states of Uttar Pradesh, Maharashtra,

to transcend on the path of a sustainable development and for

large scale leads to spur of unauthorised slums and also have implications on realty prices. It also leads to deterioration of sanitation facilities and overall suppressed standard of

According to the World Health Organisation (WHO), 10 per cent of the world's road fatalities occur in India. With growing pressure on Indian cities, safety and accessibility of public transport are two areas which need to be addressed for

green building norms, among many others.

of people into urban areas, expanding geographic reach of cities and large-scale reliance on private automobiles has rendered the existing infrastructure inadequate. Pollution: Rapid urbanisation, industrial development and unplanned cities have primarily led to a problem of air and water pollution in India. As per the Global Burden of Disease report by the WHO, out of the 67 risk factors studied, air in the case of health burden for India. As such, out of 20 most polluted cities in the world, 13 are in India. As the country moves along the path of sustainable development, immediate attention needs to be given on “cleaner technologies” and investment towards waste management. In the initial stages, this would also call for changing the tax structure to support and encourage a shift in consumption pattern, from private vehicles to public transportation.

June 2015

NDA’S DRAFT PLAN

Draft Plan: Government has decided to support the development of 100 smart cities throughout the country.

housing, adequate and quality water supply, 24×7 electricity healthcare, among other things. A framework has been would be signed between the Central Government, State Government and the local Urban Body. With digitised spatial maps, online delivery of all services and a platform to facilitate faster approvals and evaluation standards Financial Support: As per the report of High Power Expert Committee (HPEC), per capita investment cost of ` 43,386 has been estimated towards urban infrastructure (for the

Policy support: Although urban development is a state subject under the constitution of India, the concept paper outlines that the urbanisation planning and facilitation can happen at the central level. In this regard, a national urban transport policy to facilitate public transport, budgetary support under schemes such as the Solar Power mission, JNNURM, setting up of IITs, IIMs and AIIMS could play an important role. At the state level, policy reforms are likely to be in domains such as FSI (Floor Space Index) norms to allow high density buildings, overhauling current standards of water supply, sewerage and drainage, and other development acts to align the state level policy with the national master plan of smart-cities.

MAKING IT A REALITY to make the Smart City project a reality. Among other things, it suggests a Centre-State Partnership, pointing out that given the magnitude of the task, it is important that plans or models are drafted with co-operation of all the stakeholders. “India is on the cusp of development with a sharp focus on Smart Cities as an engine for economic development, integration and inclusion," says Preeti Sinha, Senior President and Global Convenor, YES Institute. "We believe Smart Urban Design can direct and balance urban growth and actualise the Government’s objective of ‘Sabka Saath, Sabka Vikas.’”

Source: UNDP, YES BANK Limited

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INVESTMENT OPPORTUNITIES

June 2015

Soon you will O wn Marquee P r o j e c t s i n I n d i a t h r o u g h R E I Ts With the government working relentlessly on simplifying the tax system and making investment an attractive proposition, owning celebrated real estate projects through REITs will become a reality, says ARCHANA SINHA

QUICK FACTS • Apart f rom a low entry level, REITs are expected to provide a safe and diversified investment option at reduced risk, all under professional management. • An investor can earn two types of income f rom REITs. One, through capital gains when he sells the units of REITs on exchanges and the other through dividend income.

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ost asset owners across the world have prided themselves in the fact that they own a part of blue chip real estate properties through Real Estate Investment Trusts (REITs) and Real Estate Mutual Funds (REMFs). Landmark properties such as worldfamous malls, office complexes and multiplexes, information technology (IT) parks, hotels and other such assets are a part of their investment portfolios. This was quite unimaginable in India up until now. But, as the Securities and Exchange Board of India (SEBI) has given its approval to REITs with minimum entry load as ` 2 lakh, REITs are expected to become another vehicle of investment in real estate in India. Within a year or two the asset owners will be able to diversify their investments in REITs too.

collected will be invested in commercial properties which are completed and are generating income. ‘REIT’ is a collective investment vehicle that invests in a diversified pool of professionally managed investment-grade real estate.”

Explains Mr. Sunil Mantri, Chairman, Mantri Realty, Mumbai, “Like mutual funds, REITs will pool in money from investors and issue units in exchange of the money

Mr. Pradeep Jain, Chairman, Parsvanath Developers, New Delhi, who have projects all over India says, “The intent of introducing REITs is to ease pressure on the banking system

Mr Mantri adds, “If you look at it in its simplest form, a REIT provides ownership of a portfolio of properties in units that are held by investors as a way of securitising property. Assets typically held by REITs comprise office, residential, retail, hospitality and industrial or logistics property. This is going to be a very attractive proposition soon as the government is working on simplifying the tax system in the country, for easing the business environment, and offering investment opportunities.”

to which the real estate sector looks for funds, free up existing funds of banks and to encourage construction activities. REIT in future will help attract long-term financing, improving fund availability to real estate developers. For the investors, they can provide a new investment vehicle with ongoing returns, elevated transparency and governance standards.” “In the near future, we expect the REITs to increase the depth of the Indian property market through enhanced transparency and governance standards along with monitoring of the REIT’s performance on a regular basis by the financial media,” says Mr. Jain.

TRADED LIKE SECURITIES

A REIT should be first registered and raise funds through an initial public offer or IPO. Units of REITs will have to be compulsorily listed on exchanges and will be traded www.indiapropertyinsider.in | A

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June 2015

like securities. Currently SEBI has kept the minimum requirement for asset sizes at ` 500 crore. The minimum issue size of the initial public offer should not be less than ` 250 crore. Investors will be able to buy REITs units from primary and secondary markets. While investing in an IPO, the minimum investment amount will be ` 2 lakh; on exchange the minimum lot size will be ` 1 lakh. Apart from a low entry level, REITs are expected to provide a safe and diversified investment option at reduced risk, all under professional management, to ensure the highest return on investment. This form of investment vehicle is expected to provide the opportunity to invest in large real estate assets with limited liability for unit holders, informs Neeraj Bansal, partner and head of real estate and construction practice, KPMG. Mr Venkat K Narayana, Executive Director and Chief Financial Officer, Prestige Group, Bengaluru, says, “It gives an opportunity to own an income yielding security bond. It is like any other share or mutual fund instrument where the entire property gets converted into units and an investor can own as much as his pocket allows in multiples of 10s and 100s. It allows an investor an opportunity to own a piece of marquee real estate properties, for example, in an IT park, a Special Economic Zone (SEZ), a mall or a multiplex which come at a premium price and are not usually affordable by an individual investor. The advantage is that the prices of units will also appreciate while yielding additional income just as any other shares of mutual fund offers.” “Of course, currently there are hurdles such as stamp duty, taxes, and other regulatory issues which are still to be ironed out especially since many of them come under state regulation. However the government is looking into the matter and we are expecting it to become easier,” adds Mr Narayana.

TWO TYPES OF INCOME

The distributable income will depend on the cash flow through sale of property or through rental income. Currently, of course, the return on investment (ROI) on REITS is at par with other fixed investment instruments, but experts feel that soon it is going to be an attractive proposition and very competitive and perhaps better than some of the existing instruments. An investor can earn two types of income from REITs. One, through capital gains when he sells the units of REITs on exchanges and the other through dividend income.

Mr. Anuj Puri, Chairman, Managing Director and Country Head, JLL India, says that Real Estate Investment Trusts or REITs will be a "booster rocket" for investments coming into India and realty players are awaiting more clarity on the proposed new instrument. Post the announcement of REITs, the regulations and the sentiments have gone through vast change. From a complex taxation structure where the majority of taxation was not a pass-through, the regulations have evolved significantly in last one year. Most of the taxation-related issues are solved and hence, it has become much more attractive.” He believes that the first listing of REIT is four to six quarters ahead. If they succeed, the market can potentially reach USD 15 bn in the next three to four years. Mr. Sanjay Dutt, Executive Managing Director of Cushman & Wakefield in South Asia, elaborates on this, as he says, “It would take about a year-and-a-half or so for REITs to take off in a significant way. Of course,

"REITs will pool in money from investors and issue units in exchange of the money collected will be invested in commercial properties which are completed and are generating income." - Sunil Mantri, Chairman, Mantri Realty

some trusts are being established in the meantime as the government’s intentions are good regarding REITS. The investment vehicle has been a successful entity in Singapore, Japan, Korea and other Asian countries because of transparency and simplified tax system, standardised and professional tax system and good returns to the investors. The government is looking into the Real Estate regulations, Land Bill and all other issues. India has all the potential to make REITs an attractive proposition. Almost $100 billion worth real estate properties are waiting to be brought under REITs and there is a great opportunity to make REITs a good investment proposition. Indians property's rate of appreciation is one of the fastest in the world.” Historically the success of REITs can be traced to basically two factors - the tax structure and the yield expectation by investors. Ms. Manisha Deshpande, GM Marketing, Kanakia Spaces, Mumbai, whose projects have made their presence felt in Bengaluru, Hyderabad and other cities as well, is upbeat about both the issues as she says, “We are now through with right tax treatment and almost there for matching investors expectation with yield what REIT can offer... SEBI created the legal framework. The only difference with REITs in other countries now is the interest rate difference. In the next three years, we see the gap reducing significantly although for one or two years there will be little pain as the yields of six or seven per cent as against the assured secured treasury current rate of almost eight per 49


INVESTMENT OPPORTUNITIES

cent. But with the interest rate on capital gain going down, the yield from REITs will start looking attractive.” According to the Union Budget 2015-16,developers listing their commercial assets as REITs will get a onetime exemption on capital gains when the trust lists. So far, the preferred route for developers has been private equity players. But the Finance Minister has rationalised capital gains regime for REITs and InvITs (Infrastructure Investment Trusts). Additionally the budget has allowed tax pass-through for alternate investment funds. This means the rental income from such assets will not have any tax liability when returned to the investors or unit holders.

to ease the taxation system. Rental yields in Indian real estate is among the highest in the world and is an attractive proposition. "Owning a piece of marquee property is one of most attractive investment aspects. Hence REITs will definitely pick up. We have also begun the process of registering some of our landmark projects in REITs. It will take some time for the process to complete," he says. Issues such as Dividend Distribution tax and other issues are

The other attractive aspect of REITs is that with the improving economy, the demand for office spaces and consequently the rentals are expected to rise. Going forward the market provides a good opportunity for rising capital values to as real estate will continue to appreciate for quite some years to come.

June 2015

in the process of being sorted out. Goods and Service Tax (GST) will be a good way to solve tax issues in the states. With time it is expected that the trust fees is lowered. And the transfer fees from parent company to Special Purpose Vehicle (SPV) under which the trusts have to be formed will also come down. “Tax efficiency indeed is going to be critical to the success of REITs. The basic framework for one-level taxation has been laid down. Further amendment in the Income tax Act to provide a tax efficient and stable regime for REITs in India is expected to make it really attractive,” says Mr. Pradeep Jain. With most Indians having a deep faith in real estate investments as one of the most reliable way to invest, it is a matter of some more months or perhaps a year or two before REITs will become a regular choice for investors. “It will be a win-win for all, developers as well as investors. NRIs have their roots here and they want to invest in India. Not only has it an emotional value, with tremendous growth happening in India, but it is also a rewarding experience from their mother country," says Manisha Deshpande.

AN ATTRACTIVE PROPOSITION

Mr. Venkat Narayana says that REITs in India have made some progress since it has been legalised last year and with that we have seen the urgency among the authorities

NAREIT®, the National Association of Real Estate Investment Trusts®, is the worldwide representative voice for REITs and publicly traded real estate companies with an interest in U.S. real estate and capital markets. Acting as the voice for the REIT industry in Washington, where they educate policymakers in Congress and the federal agencies about REITs, they are also an information resource for policymakers in countries around the world that have introduced or are considering introducing REITs.

Here are their answers to some fundamental questions. What is a REIT? A REIT, or Real Estate Investment Trust, is a company that owns or finances income-producing real estate. Modeled after mutual funds, REITs provide investors of all types regular income streams, diversification and long-term capital appreciation. REITs typically pay out all of their taxable income as dividends to shareholders. In turn, shareholders pay the income taxes on those dividends. REITs allow anyone to invest in portfolios of large-scale properties the same way they invest in other industries – through the purchase of stock. In the same way shareholders benefit by owning stocks in other corporations, the stockholders of a REIT earn a share of the income produced through real estate investment – without actually having to go out and buy or finance property. Why were REITs created? Congress created REITs in 1960 to make investments in large-scale, income-producing real estate accessible to average investors through the purchase of equity. In the same way shareholders benefit by owning stocks of other 50

corporations, the stockholders of a REIT earn a pro-rata share of the economic benefits that are derived from the production of income through real estate ownership. What Types of REITs are there? REITs often are classified in one of two categories: equity or mortgage. Equity REITs mostly own and operate incomeproducing real estate, such as shopping centres, health care facilities, apartments, warehouses, office buildings and hotels. Mortgage REITs mostly lend money directly to real estate owners and operators or extend credit indirectly through the acquisition of loans or mortgage-backed securities. What types of properties do REITs own and manage? REITs own and manage a variety of property types: shopping centers, health care facilities, apartments, warehouses, office buildings, hotels and others. Most REITs specialise in one property type only, such as shopping malls, timberlands, data centres or self-storage facilities. Some REITs invest throughout the country or, in some cases, throughout the

world. Others specialise in one region or even a single metropolitan area. Who invests in REITs? Everyone. Individual investors of all ages, both in the U.S. and worldwide, invest in REITs. Other typical buyers of REITs include exchange-traded funds, pension funds, endowments, foundations, insurance companies and bank trust departments. What are the investment benefits of REITs? REITs are total return investments. They typically provide high dividends plus the potential for moderate, long-term capital appreciation. Additionally, REITs offer liquidity, portfolio diversification and strong corporate governance. Do countries besides the United States have REITs? Yes, a total of 31 countries currently have REITs. The majority of REIT laws around the world mirror the U.S. approach to REIT-based real estate investment. Source: NAREIT www.indiapropertyinsider.in | A

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Think of it as a homing device for Indian property. India Property Insider - The only way for real estate advertisers to get direct access into HNI households in the UAE.

Presenting the best platform to interact with NRI property buyers in the UAE. The only real estate magazine to be personally handed over to the HNI Indian households based in UAE with a free direct to home access to advertisers. A unique medium, created with the single-minded objective of being the catalyst in facilitating sales for Indian real estate developers from the NRI customer segment. Needless to say, no other media can deliver your advertisements better.

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INSIDER ADVICE

June 2015

The NRI Property Buyer's Guide SANDEEP SADH offers some valuable tips to non-resident Indians on buying, selling and repatriation

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ometimes, NRIs who have either have stayed abroad for a long time and have had little exposure or understanding of the real estate market, shy away from buying and selling property due to complexity of the laws and transaction issues in India. It’s also seen that not only are they unable to exit at the opportune moment but also that the properties remain Non-Performing Assets even after possession. It is important not only to understand the legal and taxation issues while you buy and sell your property in India but also essential to understand the process and tax liabilities involved.

THE BUYER'S CHECKLIST

Highlighted below are important points for buyers to note: NRIs, PIO and OCI Card Holders Can Buy Homes and Offices in India : Anyone who holds an Indian Passport 52

or a Foreign Passport with Overseas Citizenship of India (OCI) or (Person of Indian Origin (PIO) Card is allowed to buy property in India without the requirement of approaching the Reserve Bank of India and can freely buy and sell property as any other Indian citizen in India can. If you have a foreign passport and you are of Indian Origin or your spouse is Indian then you can apply to the Indian High Commission in your Country for an OCI or a PIO Card. Once you submit your proper proof of Indian descent or the marriage certificate as per the documents prescribed by the High Commission, you can get the OCI cards in a couple of months maximum.

In NRE accounts, you can send the money from overseas but you cannot deposit the money in India in these accounts. You can issue payments from these accounts.

Documents Required for Buying a Property in Mumbai, or Most Metros: A. Non-Resident External (NRE) and Non-Residential Operational (NRO) account:

B. Pan Card – Permanent Account Number – Income Tax:

In NRO accounts, you can deposit the amounts you generate as Income by way or Rent, Interest or any other income or sale proceeds. Tip: You should open a bank account with a reputed Indian Bank in your country, where they can service you with your needs of funds remittance, transfer to the developer and so on and have good online banking facilities.

You would require this mandatorily if you are buying or selling a property in India, and since most of the values are www.indiapropertyinsider.in | A

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June 2015

above ` 500,000 this is a must for property buying. You can get this within 15 days to a month and you can apply online at the National Securities Depository Limited (NSDL) website, https://tin.tin.nsdl.com/pan/form49AA.html C. Address Proof If you have a local address, great, else, it is a good idea always to hire a Chartered Accountant who can help you with the Pan Cards, Power of Attorney (POA), and so on, or your Real Estate Advisor who can help you begin the buying process. D. Power of Attorney to Sell and Buy In India, you can give the Power of Attorney to buy to any of your relatives, friends, chartered accountants, lawyers and friends. The process for this is quite simple.

1

Draft the POA and put in the property details. A standard POA is available on www.mumbaipropertyexchange.com/nribuyingpoa.aspx. You can fill the details of the property, the buyer and the person you wish to make as the attorney.

3

Send the documents back to Mumbai for adjudication and stamping. This needs a stamp duty of ` 500/- and a copy of your passport. It is ready in a few days.

overseas and realising this much later. This is an important consideration.

Once, the POA is adjudicated, your POA holder can execute the Agreement for Sale and Register the same with the Registrar and pay Stamp Duty, among other things.

• Profiles: Non-Resident Indian (NRI), Person of Indian origin (PIO), Overseas Citizen of India (OCI), except Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan.

Kindly note for selling property, you only can give this POA to your wife or to a blood relative like your father, mother, sister, brother, son or daughter.

BANK LOANS

If you are looking for a property in India, it’s advisable that you take a home loan against the same. Banks do a very strong due diligence on the property and it safeguards you completely. Even if you take a small home loan of, say, 20 per cent of the property value, it is good enough. If you have income in India, you can set off upto ` 2,50,000 per year against that and also you don’t have to worry about keeping your original documents safe as they are kept in safe custody of the bank in any case. Furthermore for NRIs, having a bank in the transaction provides immense comfort to the home buyer as sometimes, the commitment by the developers on legal clearances may be in the pipeline. If there is a grey area it would come up very quickly and is a better option than the NRI sitting

WHO CAN APPLY FOR NRI HOME LOANS?

• Age: The minimum age of the applicant should be 24 years. The maximum age limit is 60 years or retirement age (whichever is earlier), at the time of loan maturity. • Work experience: The applicant should have a minimum overseas work experience of six months with total work experience of two years. • Minimum Income: For GCC Countries - AED 5000/p.m. (or equivalent); Other Countries and USA-USD 3000/-p.m. (or equivalent); For Merchant Navy - USD 2000/- p.m. for nine months. Home Loan Documentation for NRIs • Complete Passport copy and Work Visa copy; • Overseas address proof e.g. utility bill, card statement, House lease agreement, bank statement etc.; • Salary Slip for three months;

2

Then you need to go to your local Indian High Commission and get the document attested at the Indian High Commission in your city/country.

QUICK FACTS • When an NRI buys and sells properties, it is most important for him/ her to ensure that bank statements are in order, and to engage a Chartered Accountant. • Income Tax must be paid and returns must be up to date in order to sell or lease properties and repatriate the funds.

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INSIDER ADVICE

• Appointment letter or Contract Copy; • Salary a/c and NRE/ NRO a/c statement for six months; • General Power Of Attorney.

the (LTCG) is calculated based on the inflation index and usually the tax amounts to any where lesser than 20 per cent if you are holding for three years.

Once the property is ready, there are three options an NRI has:

The most important part about NRI selling is the TDS – Tax Deduction at Source.

HOLD FOR PERSONAL USE

If the property is for personal use, there is nothing to be done; just pay the regular monthly society charges and municipal taxes.

As per the Income Tax laws, anyone buying a property held by NRI or NRIs has to mandatorily deduct TDS of 30% of the consideration amount.

LEASE

To void this, the NRI Seller has to obtain a Lower Tax Deduction Certificate from the Income Tax office.The NRI's Chartered Accountant has to submit a detailed computation of the Capital Gains based on the Purchase and Sale value and if the proceeds are re-invested again into real estate.

If one has to lease, then the income from the same is taxed after a standard deduction of 30% on the rent. You can repatriate the rent income whenever you like by obtaining a Chartered Account Certificate.

SELL

This is the part which needs detailed attention. If you are selling a property the first thing you need to do is compute your Capital Gains, if you fall in the Short Term Capital Gains (STCG) category or Long Term Capital Gains (LTCG). The STCG is equivalent to your income tax current slab and

To initiate this, the NRI must have filed Income Tax Returns for the last two years. It is important that NRIs file regular returns in India so that once they are close to any property transaction, they should not be hassled by excessive paperwork at the last minute.

June 2015

REPATRIATION After all the taxes are computed and paid to the Government of India, the NRI seller can repatriate the proceeds to any foreign bank abroad and this can happen only once the Chartered Accountant issues a certificate. When a non-resident Indian (NRI) buys and sells properties, it is most important for him/ her to ensure that bank statements are in order, and to engage a Chartered Accountant. Taxes also must be up to date in order to sell or lease properties and repatriate the funds. If you are making an investment in the real estate sector, you must be able to realise your gains when the investment matures or make substantial profits on your base investment. Sandeep Sadh CEO www.mumbaipropertyexchange.com

F i v e T h i n g s To Wa t c h O u t F o r W h i l e H o u s e H u n t i n g

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hings have changed quite a bit for home buyers in recent times. A decade ago, searching for a property meant trudging around in dug-up spaces, tripping over construction materials and climbing precariously halfbuilt staircases, only to find that the layout of the house didn't appeal to you, or the rooms were smaller than you imagined. Home buyers today, and especially those who are far from their destination of choice, such as non-resident Indians, can now do their short-listing at the click of a button.

in love with one that doesn’t suit your needs. Tip: Start compiling your wish list by thinking about what you like and dislike about your current home. DO YOUR HOMEWORK Not long ago, consumers had very little access to information about recent home sales prices, market trends, homes on the market, neighborhood statistics and the home-buying process. Today, there is much more information available, both online and offline. Empower yourself; it is worth the trouble.

Still, buying a home can be one of the most tiresome and frustrating experiences of your life, especially if you haven't done your homework in advance. With the right preparation, it could be one of the most enjoyable experiences. Here are a few factors that you and your family need to be absolutely clear about before you start looking out for a flat.

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LOAN WATCH

LOCATION COUNTS

MAKE A LIST

As an NRI, you may not be staying in home you buy right away, but suppose someday you decide to return? Or, while you are in the UAE, you want to find a tenant and monetise your property? A convenient location, close to facilities such as modes of transport, schools, hospitals, shopping centres and so on is vital.

Do you (and your spouse) really know what you need and want in your home? You’ll save yourself many hours of shopping (and potentially arguing) if you make a list ahead of time. Zero in on the features you must have, would like to have, definitely don’t want and could prefer not to have. Your goal is to find the right home for your family without falling

Even if you are an NRI and don't really need a housing loan to invest, study the options. Ask the lending institution to give you a full assessment and a letter stating how much you’re qualified to borrow, depending on your age, income and other factors. Even a small housing loan could offer you a certain amount of security. USE A CHECKLIST Touring several homes is a confusing experience for most people. Make notes about the homes you visit. Track the features of each home in a personal checklist that includes factors such as location, price, layout, amenities and so on. www.indiapropertyinsider.in | A

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EXPERT ADVICE

June 2015

Ta k e C h a r g e o f H i d d e n P r o p e r t y C o s t s Watch out for those extras that add to the cost of the home you purchase, says ANURAG JHANWAR

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uying property in India can be akin to finding one’s way around an enormous maze. One is often met with surprises–not all of which tend to be of the pleasant kind. This makes the whole experience challenging, especially for buyers based outside the country, who are often uninitiated in the granular aspects of property purchase in India. One aspect that frequently comes as a rude shock is the hidden costs involved in such transactions. Let me illustrate this with an example.

for getting their choice of floor, size or alignment (east-west, north-south, etc.). The PLC varies according to the location and preferences of the buyer.

Arun Kumar, based in Muscat, did a great deal of research on property portals before settling on a three-bedroom house in his native city of Kochi. He called up the developer and enquired about the rates, and was pleased to know that it fell well within his budget. However, though he had factored stamp duty and registration into his calculations, he was stumped when the builder quoted a price that was ` 7 lakh higher than the amount Arun had budgeted for.

Utility charges Not just parking; amenities in upper-end residential or commercial projects also come at an extra cost. One example could be club membership, which could be compulsory for buyers. Some of these utility charges are billed up-front on a lifetime basis, while others may be on a yearly basis.

Why does this happen? In Arun’s case, the builder had added charges such as floor rise, legal charges, maintenance, sinking fund, etc. which had inflated the per-square-foot cost of the house. Often, in Indian property ads, the attractive rate quoted prominently is the base rate. Most of these ads do not prominently mention additional costs such as floor rise, Preferential Location Charges, registration cost, etc. Hence, buyers don’t account for them at the initial stage, and are caught unawares later. Hidden charges in property advertisements generally vary according to the state, the builder, and the amenities provided in the house/society. Here are some of the things to watch out for: Stamp duty and registration These are the most commonlyknown charges associated with buying property. Stamp duty is the tax paid on the market value of the house. It is mandatory under the rules of the Government of India, and is calculated as a percentage of the property value. The stamp duty varies according to the location. Meanwhile, registration gives the buyer legal rights to the property. Service tax and Value Added Tax Service tax and Value Added Tax (VAT) is applied on under-construction properties. At present, the service tax rate ranges from three to four per cent of the property price. VAT differs from state to state. Floor rise: Want to have an apartment with a stunning

Parking space In many of India’s larger cities, parking space is at a premium, and developers may charge extra for providing it. This charge is tacked onto the property cost, and can range from ` 2 lakh to ` 25 lakh, depending on the locality and luxury quotient of the property.

QUICK FACTS • There are many charges that home buyers must recognise, which go beyond the base rate. • These include stamp duty, floor rise and service tax.

view of the sunrise or the distant horizon? You could be charged extra for this. Floor rise charges are applicable after a particular floor. Assume that a developer charges a floor rise of ` 25 per square foot as you go up from the first floor onwards in a 24-storeyed apartment. In this case, the floor rise of the first floor is ` 25 per square foot, while that of the 25th floor would be ` 550 per square foot. Preferential Location Charges (PLC) Another charge comparable to floor rise is the PLC. This is what buyers pay

Maintenance deposit or External Development Charges (EDC) Maintenance costs refer to the amount paid by the developer to maintain roads, parks, street lights and other common facilities like water and electricity back-up. This may be taken up-front as a maintenance deposit in some cases. Infrastructure Development Charges (IDC) The government, for its part, bills developers for the development and maintenance of public infrastructure around the project. This is also sometimes added to the property price tag. For people who aspire to own a home back in India some day, the above knowledge is necessary to prevent a scenario where one is left with a sour taste in one’s mouth due to unexpected jolts in the form of inflated costs.

Anurag Jhanwar,

Director, CRISIL Real Estate Ratings 55


INTERIOR SPACES

June 2015

Ad d a To u c h o f E xo t i c a t o Yo u r H om e NRIs who are looking to add a special gloss to their homes in India now have a range of luxurious home décor products to choose from, says SHILPA VYAS

GRAND CHANDELIERS

Simple things like how you light up your home can add a great deal of panache to the look of your house. While we have an array of contemporary lighting options, traditional chandeliers never go out of style Investing in a grand chandelier is one of the most prominent ways of adding a royal touch to your home decor. They look ethereal and add a unique style quotient to your living room. Rajkumar Jain, Founder, Anemos Lifestyle says, "Since the eye travels to the brightest thing in the room, your light décor is the first thing anyone really notices. From small to large a great light design will always be the centre of attention. If you truly want to wow your guests I would suggest you go for a grand chandelier. A large crystal chandelier at least half of your ceiling height will create wonders and transform your space altogether. For me, glass and crystals elevate the look of the light. Textured lighting that creates shadows create contrast that allows the views to perceive depth in material." Dazzle your ceiling with a range of crystal chandeliers. You can choose from chandeliers embellished with Swarovski beads, wrought iron and crystal or a ruby colour crystal chandelier with dangling drops. For a contemporary touch, use open-faced multi-bulb industrial lights that make a very art deco chandelier for modern homes. Angular and geometrically balanced, it draws attention automatically.

A TOUCH OF TRADITION

When it comes to lighting, even traditional lamps are a must-have. Designers are adding their own style to add more punch to these. Baaya Design has these wonderful chikankari lamps that are worth a dekko. An ambient lighting effect created by these embroidered lamps render a romantic and serene mood to your setting. The shadow work of chikankari embroidery plays with the light and the floral motifs. These lamps are sure to add grace to your setting owing to their fine embroidery work on spun georgette fabric and the elegant wood framework. Even their striking collection of Sanjhi lamps is not to be missed. One can create a vibrant yet serene atmosphere with these wooden framed lamps. The speciality of these lamps is that each lamp is designed to 56

Pic courtesy: (Clockwise from top) Anemos Chandeliers, Elitaire Statues, Baaya Design, Schott Zwiesel

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t is often simple things that can create a lasting impact on the way your home looks. Your home is a space that reflects your personality. You can add a special touch to your home decor with one-of-a-kind pieces that not only complement the overall look of your house but also make it look unique and different from the mundane.

QUICK FACTS • You may not be living in your Indian home right now, but doing it up well will help bring in the right profile of tenant. • Investing in a grand chandelier is one of the most prominent ways of adding a royal touch to your home décor.

From traditional artefacts to contemporary products, India offers a wide range of artistic options for beautiful homes

tell a story, which unfolds as the lamp is lit! Skillful, hand cut Sanjhi motifs get illuminated when switched on and the artwork takes a different life! "Think of warm colours, soft textures and little extras," says Praveen Rao, President, d'Mart Exclusif. "It is easy to add luxury to your living room with simple changes and by adding colour, warmth and comfort. In fact, you can add a touch of luxury to every room. Look for furniture with upholstery in ornate patterns on fine fabric. You can also add accents like candles, baskets, vases, plants, sculptures and artwork. The luxury is in the detailing of the elements, so by adding conversation pieces that add interest to a room you are giving it a classy feel. You can never go wrong with a chic candle stand, a beautiful silver lamp or an extravagant centrepiece in your living room."

MODERN MASTERPIECES

Modern art is a great way to add a unique appeal to your home decor. If you are a book lover, try funky book ends to store your books in style. Make a statement with a customised piece of furniture. Be it a quirky chair, a book shelf, a piece of lighting or a wall decal, let something in your home be you. Keep an eye out for offbeat products. They will instantly transform your space. www.indiapropertyinsider.in | A

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That you can enjoy your vacation and still build a long-term asset. Find out how in this issue of

India Property Insider, is a monthly publication which is going to empower the NRI audience in the UAE with ‘need to know’ and ‘nice to know’ facts about the real estate sector in India. A credible source you can turn to when you are about to invest a substantial sum of your hard-earned money in an Indian property. In other words, your one stop for the best Indian property solutions.

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DEVELOPER UPDATE

June 2015

NEWS DIGEST K E E P U P W I T H T H E L AT E S T N E W S O N I N D I A N D E V E L O P E R S Tata Housing introduces online payment for installments

After the successful implementation of an online payment gateway to book an apartment in 2013, Tata Housing has announced the launch of an integrated payment gateway which will allow customers to complete the entire homebuying transaction online. Through this, consumers will now be able to purchase Tata Housing and Tata Value Homes projects across India in three easy steps on www.tatahousing.in and www.tatavaluehomes.com through Debit/Credit Cards and Net Banking, according to a communication from the company. “What started as an experiment in late 2013 has now emerged as the fastest growing channel of sales for the industry," says Mr. Brotin Banerjee, MD and CEO of Tata Housing Development Company. He added “Our latest offering has simplified the process of payment for our customers. Our payment gateway is designed to ensure that the entire transaction done online is safe and transparent. With this, we have expanded the boundaries of home buyers since they are not encumbered by geographical limitations and can purchase homes that are located in any part of India.” The company has 29 projects with around 70 million sq. ft. under various stages of development at 13 locations across the country. Tata Housing through its 100 per cent subsidiary Tata Value Homes, pioneered the concept of online home buying in India when it partnered with The Great Online Shopping Festival by Google in December 2013.

Godrej Properties sells entire launched inventory at Gurgaon property Godrej Properties Ltd. (GPL) (BSE scrip id: GODREJPRP), the real estate development arm of the Godrej Group, has announced that it has sold over 200 apartments, with an area over 400,000 sq. ft. in just three weeks at the launch

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of its residential project, Godrej Icon, in Sector 89A/88A, Gurgaon. Spread over nine acres, Godrej Icon consists of nine towers, including a 32- storey Iconic tower. According to a press release from the company, Godrej Icon will offer various amenities including a modern 17,000 sq. ft. club house and infinity pool, 130 feet high skywalk, services by Club Concierge, Four Fountains Spa and Holyfield Gyms. The skywalk at 130 feet features a jogging track, yoga and meditation centre, party deck, zen garden and an observation platform. Sports facilities such as a squash court, a tennis court, a basketball court, and a cricket pitch will also be part of the project. Customers will benefit from a school as well as retail spaces planned within the project. Designed on the principle of sustainability, the project will have more than 80% of the project covered in landscaped gardens and open spaces. Godrej Icon is being developed as a joint venture with Oasis Build home Private Limited.

Sunteck executing 1.5 mn sq ft residential development in BKC In a Management Meet Note on Sunteck Realty Ltd (Sunteck), ICICI Direct has pointed out that the Mumbai based real estate player has a development potential of ~25 million square feet (msf ) spread across 24 projects and four rented assets. "The company has prudently acquired land periodically through government tenders (closed), joint development and outright purchase from private corporates, resulting in getting relatively clean and clear land parcels," according to the Note. Currently, it is developing ~3 msf residential project in the Bandra-Kurla Complex (BKC) and Goregaon area. These two projects have the capability to generate pre-tax net cash inflows of ` 4515 crore over the next four or five years. Sunteck is also currently executing 1.5 mn sq ft of residential development in the BKC area spread across three projects at an estimated project cost of ` 770.9

crore. So far, it has achieved sales of 0.8 msf aggregating ` 2582.3 crore. Sunteck also acquired 23 acres in FY1012 at an average cost of ~` 21 crore per acre, which is at a discount to current prevailing prices. Out of 23 acres, it started development on a seven-acre plot in two phases aggregating 1.5 msf with estimated project cost of ` 967.6 crore. So far, it has achieved sales of 0.36 msf aggregating ` 432.5 crore.

Parsvnath announces Annual Results for FY 15 Parsvnath Developers Ltd. (PDL) has reported consolidated revenue of ` 763 Cr. for the financial year ended 31st March 2015 as compared to ` 561 Cr in the corresponding year ended 31stMarch 2014. According to a news release, they have realised sales for 12.01 lakh sq. ft of area (1,11,576 Sq. Mtr.), comprising of 1.35 lakh sq. ft (12,542 Sq. Mtr.) of Group Housing, 0.30 lakh sq. ft (2,787 Sq. Mtr.) of Commercial and 10.36 lakh sq. ft (96,247 Sq. Mtr.) of Residential plots. Commenting on the performance, strategy followed and future outlook, Mr. Pradeep Jain, Chairman, Parsvnath Group, said, “The last year has been a mixed bag for the overall realty sector. While announcements on 100 Smart Cities, Housing for All by 2022, Relaxation in FDI rules and REITs by the Government cheered the industry; high interest rates, spiraling input costs and weak consumer demand continue to neutralise the positivity around the sector. In such a scenario, the Group has offered possession of approximately 18.20 lakh sq. ft. (1,69,082 Sq. Mtrs.), in the fiscal 2015.” The group recently received an award for Best Developer of Delhi NCR at the annual Estate Avenues North India Real Estate Awards and the Realty Kings Award for Excellence 2014 for being the Realty Giant of North India at Award Night Conclave by Think Media Inc. PDL, which has completed 55 projects, is currently working on 48 projects with a total area of 71.10 mn. Sq. ft. (6.60 mn. Sq. mtrs.)

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PROPERTY PRICES

Average Residential Apartment Rates

MUMBAI

CHENNAI LOCALITY

CAPITAL VALUES (RS/SQ FEET)

June 2015

NEW DELHI

LOCALITY

CAPITAL VALUES (RS/SQ FEET)

LOCALITY

CAPITAL VALUES (RS/SQ FEET)

Altamount Road

66900 to 80490

Chittaranjan Park

14260 to 18230 25750 to 33340

Andheri East

14410 to 18100

Defence Colony

Andheri West

18630 to 24260

Dwarka Sector 19

8160 to 9770

Chembur

16040 to 21240

Greater Kailash 1

16910 to 21660

Dombivli East

5000 to 6360

Greater Kailash 2

17780 to 23030

Ghodbunder Road

8180 to 10130

Safdarjung Enclave

19120 to 24310 16330 to 20810

Goregaon East

14340 to 18570

Saket

Goregaon West

14660 to 19020

Uttam Nagar

3780 to 4840

Kandivali East

12320 to 16060

Vasant Vihar

25200 to 33660

Kolathur

4430 to 5420

Kharghar

Madipakkam

4550 to 5440

Malabar Hill

69520 to 90960

Medavakkam

4220 to 5140

Malad West

13650 to 17660

Dlf City Phase 4

11090 to 13030

Mulund West

12300 to 15550

Dlf City Phase 5

12380 to 14030

Golf Course Road

12210 to 14980

Nungambakkam

14240 to 18610

7070 to 8970

GURGAON

OMR

3720 to 4650

Panvel

Pallikaranai

4550 to 5390

Thakur Village

Perumbakkam

3760 to 4540

Ulwe

Porur

4410 to 5790

Sholinganallur

4280 to 5370

NASHIK

10850 to 14450

Ashoka Marg

3780 to 4410

6140 to 7780

Deolali Camp

3570 to 4680

HYDERABAD

Gangapur road

3800 to 4990

Banjara Hills

6680 to 8860

Govind Nagar

4110 to 4740

Gachibowli

3480 to 4410

3140 to 3710

Hitec City

4110 to 5210

T Nagar Velachery

GOA

4682 to 6130 14410 to 18750

Sector 66

7530 to 8760

4980 to 6100

Sector 82

w4970 to 6590

Sector 83

4860 to 5810

Sohna Road

7550 to 9750

Calangute

5420 to 7010

Indira Nagar

Candolim

5570 to 6570

Jail Road

3040 to 3690

Kondapur

3280 to 3980

Dona Paula

6753 to 7890

Mumbai-Agra Rd

3420 to 3900

Madhapur

4330 to 5310

Mapusa

3790 to 4710

Nashik Puna Highway

2990 to 3440

Manikonda

2490 to 2960

Margao

3990 to 4800

Nashik Road

3150 to 3280

Miyapur

2750 to 3400

Panaji

3710 to 4980

Panchwati

3060 to 3560

Sanath Nagar

4310 to 4990

Vasco Da Gama

4310 to 5460

Pathardi Phata

2910 to 3390

Somajiguda

5050 to 7040

Source: MAGICBRICKS.COM Rates As on April 2015

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INSIDER LISTINGS

June 2015

Pro j e c t s on O f f e r NAME Mittal Akshardham LOCATION Marketyard, Pune DEVELOPER Mittal Brothers SPECIAL FEATURES 968 - 1075 Sq. Ft; Possession: June

2016, starting ` 70 lakh onwards.

(with covered Car Parking) five minutes from SantacruzChembur Link Road and Eastern Freeway

NAME One Nation LOCATION Pimple Saudagar, Pune DEVELOPER Mittal Brothers SPECIAL FEATURES 3/4BHK and 5BHK penthouses,

NAME Lodha Exotica, Palava City LOCATION Kalyan-Shil Road, Mumbai DEVELOPER Lodha Group SPECIAL FEATURES Super-sized air-conditioned homes,

starting ` 1.67 crore onwards; five per cent down payment, rest on possession (conditions apply) NAME Godrej Horizon LOCATION NIBM Annexe, Pune DEVELOPER Godrej Properties SPECIAL FEATURES Four towers of 12 storeys each, 602

Sq.ft - 2031 Sq.ft, ` 33.11 Lakh, Possession June, 2015. IGBC Green Homes Gold pre-certified. landscaped internal courtyards, private gardens for select first floor apartments. NAME Vaibhav Vasind Hills LOCATION Near Thane (40 minutes away) DEVELOPER Value and Budget Housing Corporation (VBHC) SPECIAL FEATURES 40 minutes from Thane, well connected by road and rail; home to manufacturing companies offering employment opportunities, 1,2 BHK homes starting ` 17.01 lakh. Stamp duty and registration charges waived, or guaranteed rent-back offer for 12 months. Four-star rated project by CRISIL.

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NAME Sidhivinayak Residency LOCATION Chembur, Mumbai DEVELOPER Sidhivinayak Constructions SPECIAL FEATURES Large 2 BHK Luxury Residences

unrestricted views of river, school, cricket ground, clubhouse and sports arena. Modular Kitchen, private sun-decks and walk-in wardrobes in each apartment, plus an extra room that can be customised to your requirements. Palava City is a smart city with area of 4500 acres, located at the strategic junction of Thane, Navi Mumbai and Kalyan. Starting ` 84.2 lakh. NAME Acron Niama Valley LOCATION Porvorim, Goa DEVELOPER Acron Group SPECIAL FEATURES Six km from Panjim on a hilltop

location, 1297 - 1749 Sq.Ft., ` 70.2 - 123.6 Lakh, possession December 31, 2017

NAME Dosti Imperia LOCATION Thane DEVELOPER Dosti Group SPECIAL FEATURES: Summer offer, 50 per cent off on stamp

duty, 2,3BHK apartments,` 1.42crore onwards, possession July 2015 onwards

NAME Nikoo Homes Phase-2 - Bhartiya City LOCATION Bengaluru DEVELOPER Bhartiya Group SPECIAL FEATURES 1,1.5,2,3 and 3 BHK with Study

apartments spread on the approximate 620 sqft to 1768 sqft floor area respectively across nine towers of 33 floors. ` 4530 per sq ft pre-launch offer. NAME Artha Neo Aspire LOCATION Hoskote, Bengaluru DEVELOPER Artha SPECIAL FEATURES Residential land from 1200 - 2800

sq ft, ready for registration, starting at ` 1.95 lakh. Gated community with clubhouse and amenities NAME Prestige Temple Bells LOCATION Rajarajeshwari Nagar, Mysore Road, Bengaluru DEVELOPER Prestige Group SPECIAL FEATURES In close proximity to the upcoming

IT corridors and Bengaluru- Mysore NICE Expressway. Premium Investor share for sale (Limited Inventory). Freebies worth ` 10 lakh on booking of every apartment. NAME Prestige Lakeside Habitat LOCATION Whitefield-Sarjapur Road, Bengaluru DEVELOPER Prestige Group SPECIAL FEATURES Disney-themed homes on 102 acres

land with 80 per cent open space; options from 2BHK to villas; four swimming pools and clubhouses, skating rink, mini golf course, smart home technology and much more.

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June 2015

COMMON REALTY TERMS EXPLAINED NAME Tritvam LOCATION Marine Drive, Kochi DEVELOPER Tata Realty and Infrastructure Ltd SPECIAL FEATURES Landscaped podium, tennis court, yoga

studio, half basketball court and much more

NAME Grand Paeonia LOCATION Delhi DEVELOPER Prateek Group SPECIAL FEATURES A township two minutes' drive from

Electronic City, NOIDA and from the proposed metro station; ` 28.50 lakh onwards, attractive offers for on-thespot booking. 2,3,4BHK homes.

NAME UDB Orchid LOCATION Ajmer Road, Jaipur DEVELOPER Unique Dream Builders SPECIAL FEATURES 1152 to 1729 sq.ft. Semi-furnished

and unfurnished apartments

PROJECT New Haven LOCATION NCR DEVELOPER TATA Value Homes Limited SPECIAL FEATURES 2 BHK and 3 BHK (1296 to 1917 sq.ft.)

SOPHISTICATED CITY LIVING Next to a noisy bar. OLD WORLD CHARM Has some woodwork, needs cleaning. CONTEMPORARY FEELING Has no woodwork, needs cleaning. CLOSE TO LAKES Impossible to park from April to October.

NAME DTC Southern Heights LOCATION Subhash Road, Kolkata DEVELOPER DTC Projects Pvt. Ltd. SPECIAL FEATURES Two minutes from Joka metro station,

NAME Golf Village LOCATION Yamuna Expressway DEVELOPER Supertech SPECIAL FEATURES Pay two per cent now and own your

a modern residential complex spread over 10 acres of freehold land with 1100 apartments.

NAME Sunshine Krishna LOCATION Jaipur DEVELOPER Dhanuka Group SPECIAL FEATURES 3BHK apartments, DTH and Wi-fi

NAME Vrindavan LOCATION Near MIHAN, Nagpur DEVELOPER Radha Madhav Developers SPECIAL FEATURES 111-acre township, 1/2/3/4/6 BHK

home. Offer available on other properties as well.

ready, air-conditioned gymnasium and indoor games area

Here is what the newspaper Classifieds ads say… and what they really mean…

WIDE OPEN FLOOR PLAN Previous owner removed supporting walls. NEEDS TLC Major structural damage. UPDATED KITCHEN Sink no longer overflows.

bungalows, row houses and apartments.

MOTIVATED REAL ESTATE SELLER Has been on the market for 14 years. CONVENIENT LOCATION Located on or near a busy freeway entrance ramp. MINT CONDITION Someone has spilled a minty mouthwash on the carpet.

Disclaimer: Before investing in any of the properties listed here, readers are advised to carry out their own background checks and seek further information and legal advice.

NEUTRAL DECOR No murals of nudes, or Elvis, but has brown walls. SECURITY SYSTEM Neighbor has a dog.

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PROPERTY TERMS

June 2015

J a r gon S i m p l i fi e d Acceptance Acceptance of an offer usually means that an agreement has been reached. Acceptance is the consent of the person who receives the offer to be bound by the conditions laid down by the person who is making the offer. With all the due diligence that is required before accepting a deal, getting to this stage can take a while. Administrator It is always wise to make a will to avoid problems between your heirs, but if a person dies intestate (without a will), the probate court would have to appoint an administrator to administer the person's estate. Amenity Great views, leisure facilities, proximity to transport and various other features designed to make your life more comfortable and pleasurable. The more amenities a project has, the more value it will gain. A project without amenities is unthinkable in today's times. Certificate of Occupancy An absolute essential before you can move into a project. A certificate of occupancy is a document that the government

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issues, which allows the structure to be occupied. It indicates that the building has been constructed in line with regulations. Moving into the property without this document could involve severe penalties.

Nominee A person who, in a limited sense, acts for or represents another. If you own a property, it is always wise to name someone you trust as your nominee.

Caveat While ensuring your due diligence on a project before signing the deal, keep an eye out for caveats. This is a warning to the purchaser that a third party may have some right on the property, or some interest in it.

Off The Plan Think carefully before you do this; it involves purchasing a property after having only seen the plans.

Estate This is the sum total of all the real estate and personal property that a person owns at the time of his/ her death.

Pre-qualification This pertains to how much money a prospective home buyer will be eligible to borrow before actually applying for a loan. It is determined by factors such as age and income, among other things.

Encumbrance If you plan to use or transfer a property, be careful of impediments that can arise in the form of others' interest or right in the property.

Refinance The process of paying off one loan with the proceeds from a new loan using the same property as security. Sometimes this can be a very smart move.

Home Inspection. Best done by a professional, this is a thorough check to evaluate the mechanical and structural condition of a property.

Special Condition Before buying a home and making it legally binding, a purchaser may specify that some requirements will need to be met, such as a building inspection or other special conditions.

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India Property Insider - June 2015