Mumbai Builder held for trying to grab dead man’s plot

Mumbai: The Economic Offences Wing (EOW) has arrested a developer who tried to usurp a dead man’s plot, estimated to be worth Rs 1.52 crore, by showing the owner, Ramchandra Patil, had sold it to him.

The arrested developer, Atul Patel, and his father, Nathlal Delvadia, also an accused, knew Patil and in 1988 had offered to
buy the plot, measuring 2,178 sq yards in Eksar village, Borivli. The accused duo had made a part payment.

However, three years later, Patil died and the accused did not pay the balance amount. “After Patil’s death, his son, daughter and daughter in-law were the plot’s rightful owners. Patel and Delvadia, who owned Atul builders and Associates, never paid the arrears to the Patil family,” a police officer said.

 In 2008, Patel allegedly produced a man at the deputy tehsildar’s office identifying him as Ramchandra Patil and completed the procedures for the sale of the land. “On November 21, 2008, Patel submitted an application to the office of the sub-divisional officer in Bandra. Fake documents were also prepared and submitted to the sub-divisional office. Letters were sent to other offices related to the sale and purchase and the statement of the seller and purchaser was signed by the then deputy tehsildar as ‘Before Me’. On December 23, permission to sell the property was approved,” said the officer.

The police are also verifying the information that an agent had facilitated the entire process by charging Rs 5.5 lakh from Patel. The property is valued at Rs 1.52 crore. A case of cheating, forgery and impersonation has been registered. “Patel had fraudulently obtained the sale permission, prepared the conveyance deed and got the same registered. The property is in his name now. It’s a serious offence and we have taken him in custody till January 17 for interrogation,” said a police source.
Source : TOI

Mumbai Property :New FSI rule yields 938cr for BMC

Mumbai: The city’s builders have enriched the Brihanmumbai Municipal Corporation (BMC) by nearly Rs 1,000 crore within a few months. Between April and December 2012, India’s richest civic body raked in Rs 938 crore as premium from developers seeking to utilize 35% extra floor space index (FSI) for their residential projects. The huge collection comes at a time when the property market is virtually stagnant.

The new policy formulated by the previous municipal commissioner, Subodh Kumar, and approved by the state government a year ago has finally reaped a huge dividend for the BMC. “We expect this amount to touch Rs 1,500 crore by the end of the financial year in March,” civic chief Sitaram Kunte told TOI.

The money accrued from builders will be ploughed back to augment Mumbai’s civic infrastructure—roads, sewage and water supply. The premium for what is termed as “fungible FSI” in the construction industry is all set to become the third largest money-spinner for the civic administration.

“After octroi and property tax, the premium on fungible FSI will be our major source of income this year,” said Kunte. The BMC hopes to collect Rs 7,000 crore as octroi and Rs 3,300 crore as property tax by the end of this financial year.

The first builder in Mumbai to pay the premium was Nayan Shah of Mayfair Housing. The Runwal Group is believed to have paid one of the highest premiums of around Rs 70 crore for its housing project in Mulund.

Kumar formulated the new policy to streamline the non-transparent and highly corrupt building approvals system. It curtails the municipal commissioner’s discretionary powers to grant building concessions to developers. Earlier, municipal commissioners liberally cleared projects with unusually large flower beds, voids, lily ponds and car decks. These areas are not included in the building’s FSI. These concessions allowed developers to build an additional 50% to 80% above the permitted built-up area.

The developer would sell these free spaces to buyers at market rate and then encourage them to illegally amalgamate these areas to make the apartment bigger.

Most building files will now be approved at the civic executive engineer’s level. Only in rare cases will they be put up before the commissioner.

THE MONEY-SPINNER

Between April and December 2012, the BMC raked in `938 crore as premium from developers seeking to utilize 35% extra floor space index (FSI) for their residential projects

The biggest chunk of premium has come from builders in the western suburbs between Bandra and Dahisar. As much as 522 crore or more than half the total collection in the past nine months came from this region alone

Developers in the eastern suburbs between Ghatkopar and Mulund paid about 333 crore during this period

The island city, where property prices are the highest in some enclaves, contributed 83 crore to the civic kitty

The maximum monthly collection ( 348 crore) was made in last December In all, 715 applications were made by builders to avail of fungible FSI in this period
Source : TOI

Most ‘green’ bldgs may not be green

Mumbai: If you are planning to buy property, then don’t get easily swayed by a project’s green tag. Chances are that it may not be “green” in the true sense of the word. While many high-end projects are generously using the “green building” tag to boost sales, only a handful has availed of the government incentive for eco-friendly buildings.

Last year, the state introduced a scheme where buildings with green certification were given priority for environmental clearance, which often takes over a-year-and-ahalf. However, the response to the scheme has only been lukewarm. Said secretary of environment department Valsa Nair Singh, “Only five in 300 buildings are availing of the incentive at the moment.”

The requirement of an official green certification could be one of the reasons for the poor response, said a senior state official, adding that the process of certification is tedious and can cost up to a few lakhs of rupees. “Construction material and technologies for green certification raise the cost of a project by at least 10%,” he added.

Sunil Mantri of Mantri Realty admitted that getting the certification was a challenge. Pointing out that lack of awareness about the government sop could be the reason for the poor response, he said, “I did not know about the incentive even though I have three ongoing green-certified projects in Mumbai,” he said.

Niranjan Hiranandani of the Hiranandani Group also said that he was unaware of the incentive. Welcoming the move, he echoed Mantri’s views and said the state must spread awareness about it.

Admitting that the “green” tag attracts buyers, Mantri demanded concessions in scrutiny fee for proposals and higher FSI for such buildings.

Last year, chief minister Prithviraj Chavan announced that the government would soon announce a “green code” to encourage eco-friendly buildings. It was proposed that citizens who buy flats in buildings following the “code” would get tax concessions. Developers of such projects, too, stand to gain concessions in fee. Singh said the proposal was in advanced stages.

WHAT IS A GREEN BUILDING?

A green building is one which uses less water, optimises energy efficiency, conserves natural resources, generates less waste and provides healthier spaces for occupants,
as compared to a conventional building

GOVT SOPS FOR ECO-FRIENDLY STRUCTURES

Prioritized environmental clearances for such buildings
The state plans to offer concessions in property taxes as well as water and sewerage charges
The state plans to launch a green code this year. It will make the use of green technologies mandatory in government buildings and later apply them to private buildings
At present, only five out of 300 buildings avail of government incentives at any given time

INDUSTRY DEMANDS

With the green building norms raising the construction cost by 10% and the certification process costing a few lakhs, the construction industry wants the government to offer concessions in scrutiny fee for building proposals and a higher FSI for green buildings
STAMP OF APPROVAL

Leadership in Energy and Environmental Design (LEED) and Indian Green Building Council (ICBC) certification of the Confederation of the Indian Industry are the most sought green certifications in the country

Source : TOI

Key boost for 5k cr Dharavi revamp plan

Mumbai: The state government on Saturday provided a much-needed fillip for the Rs 5,600-crore Dharavi revamp project.

A decision was taken to appoint a “bidding consultant” for the project after chief secretary J K Banthia met officials of the Dharavi Redevelopment Project Authority. The government has decided to prepare a ‘formal sanction plan’ for the project and put it in public domain. Later, feedback will be invited over the project. Currently, the state is looking at developing only Sector 5 of the project that houses nearly 9,000 slums.

Source : TOI

Mumbai lags in new hsg units on the block

Mumbai: The financial capital logged the third highest number of new housing units last year.

According to the latest audit of new housing units in the market, global property consultant Cushman and Wakefield states that Mumbai recorded a 72% rise in 2012 over the previous year.

Residential market across major cities in India witnessed a drop in total number of units launched by approximately 16% over the previous year, the report found. Approximately 1.62 lakh new units of residential properties were launched in eight major cities last year.

Of the total number of units launched, majority units were launched in the mid–range segment comprising approximately 83% of total launches.

With nearly 54,500 new units, the national capital region (NCR) constituted a majority (34%) of the total number of new units launched. Pune came in second with approximately 24,000 new tenements, followed by Mumbai (22,500 new units) and Chennai. Bangalore recorded a drop of 50% in the number of new launches over previous year.

According to Sanjay Dutt, executive managing director (south Asia), the increase in new homes is mainly attributed to clarity on Development Control Rules (DCR) that had held up new projects from taking off. “The new project launches were mainly concentrated in the suburban locations like Borivli, Kandivli, Thane and Mulund,” Dutt said.

“Out of the total units launched, 64% catered to mid-end segment. Juhu, Khar and Andheri witnessed new launches in the high-end segment,” he added. The mid-range segment saw a record 1,35,700 units being launched. Of the total mid-range housing units launched, the NCR saw a total of over 50,000 units mostly concentrated in Gurgaon and Noida. High–end and luxury segments saw a 24% and 23 % decline over the last year. Mumbai witnessed the highest number of luxury units offered (approximately 1,200 units) followed by Bangalore and Pune in 2012.

Source:TOI

Why black money is making real estate a Ponzi scheme

The trend of rising property prices due to the circulation of black money is dangerous. The fact that every transactor from a crook to a salaried professional is being sucked into dealing with black money makes real estate even more dangerous. The only way this trend can be stopped is by the income tax authorities cracking down on black money in real estate.

Now the million dollar question is “Is there political will in allowing the IT department to crack down on real estate?” If the answer is no then everyone should listen to “Hotel California” by the Eagles before entering the real estate market.

The tax authorities will do well to scrutinise every real estate transaction taking place in the country. It is high time that the plug is pulled on the Ponzi scheme that is real estate in India.

The real estate Ponzi scheme is sucking in even normal working class professionals who otherwise in their lives would not have any contact with black money. The real estate Ponzi scheme is one primary reason why real estate prices are going up while rental yields are going down .

Real estate is the talk of the town and anyone and everyone in any place in India talks about rising real estate prices. However buying or selling real estate is a nightmare for everyone, especially salary earners.

The reason that real estate transactions are a nightmare for everyone is the cash component involved in the transactions. Obviously the first part of the nightmare starts with the dealing with the brokers, agents, builders and every other peripheral person involved in the transaction. One conversation with the real estate dealers is enough to put one off buying or selling property in India.

The trend in every part of the country is part of the real estate transaction takes place in cash. Hence a salaried professional wanting to buy a property has to cough up cash and that would mean several hundred trips to ATMs. The same applies to a person selling property, as the buyer who is invariably one who has sold a property and has got cash from sales wants to reinvest the cash.

The Indian government, to its credit, has made it more and more difficult to launder cash and that is forcing any transactor in real estate to deal more and more in real estate as there is no place to invest the black money that is prevalent in real estate dealings.

The black money floating in the real estate market is being circulated within the market and has no outlet. This black money is forcing property prices higher as one sale transaction results in demand for real estate as black money has to be deployed somewhere. This circulation of black money in a single market is driving prices higher and higher. However, at the same time, genuine demand for rentals, especially in commercial real estate, is low and that is driving down rental yields. In short the real estate market in India is flying high not on the back of demand and supply but on the back of black money having no other place to go.

The question is where will this all end? An investor wanting to book profits in real estate ends up with taking cash payment. The investor cannot exit the real estate market as he is holdings wads of cash that cannot be deployed elsewhere. Unlike markets such as equities, bonds and commodities where exit is easy and one can wait to enter, the real estate market has no exit. As the song Hotel California goes “ We are just prisoners here of our own device”. Once one enters the property market one can never leave it even if he or she wants to.

News Published Under:   Real Estate India

Mumbai Real Estate – Expectations of an Optimistic Future

While the end of 2012 witnessed the initiation of a few regulations by the government benefitting the realty industry, 2013 can be considered as the starting point for these policies to be executed. Several experts feel that 2013 would witness the much needed steps to be formulated for the realty sector.

Sukhraj Nahar, CMD, Nahar Group says, “The real estate industry is currently passing through a transformation. All of its participants have made serious efforts to bring transparency in 2012. Going forward, we feel this will help both industry players and stakeholders. The industry is still unorganised and its efforts with the government for awarding them industry status are in progress.” Nahar also has a lot of expectations from the government in terms of various positive initiatives like priority lending from banks, immediate rate cut by RBI and single window clearance for project approvals.

The economy had its share of ups and downs during the last year, but it picked up in the end because of a few government initiatives. Samujjwal Ghosh, Head of Marketing, Lodha Group says, “The Indian economy slowed down between mid 2011 and mid 2012, but then bottomed out and started rebounding. This was partly because interest rates started falling and partly because the government started taking proactive measures to push up the economy in the last few months. Also, last year many developers adopted a wait and watch attitude due to changes in FSI norms and approvals, which will now change as the sector will be buoyant this year. This is good news for the industry as well as for customers being a win-win situation for both.”

Lodha plans on continuing with the development of their city centre project New Cuffe Parade. Ghosh lists Wadala as a prime destination to invest in property in 2013 as it has proximity to the premium business districts of Bandra Kurla Complex and is the only confluence of the Monorail, Metro and Eastern Freeway.

Joint government efforts can help revive the real estate sector and take it to new heights. Lalit Kumar Jain, CMD, Kumar Urban Development Ltd and President National – CREDAI, believes that if the government shows concern towards the industry, they expect a lot from the government like the Finance Ministry and RBI working together to strengthen demand and supply by a special housing development policy. He says, “We also expect the Housing Ministry to work with the Finance Ministry and work out affordable housing through various measures in the Finance Bill.”

Several essential issues in the real estate industry need to be addressed immediately. Approval of single window clearance, stamp duty and VAT, among many others, is important for the sector to grow. Dhaval Ajmera, Director, Ajmera Realty & Infra India Ltd says, “2013 is expected to be vibrant for the realty industry. The need of the hour is quintessential reforms to be passed along with the approval of single window clearance to ensure speedy approval. Matters which urgently need to be addressed include stamp duty, VAT, service tax and labour tax.”

The year 2012 has seen maximum number of steps taken by the government to boost the realty sector. As a result developers believe that 2013 would be a positive year for the sector. A Kalpataru spokesperson says, “We are expecting 2013 to be more robust compared to the past few years based on the government’s impetus on the infrastructure development including the Mumbai Metropolitan Region; coupled with positive steps taken by the Centre to find concrete solutions for issues in the industry.” The Kalpataru spokesperson also feels that the Finance Ministry’s motivation through softening of interest rates and lending more to the real estate sector will have a positive impact on both developers and consumers.

The real estate market could start to perform better as the easing of FDI norms will begin to show results during the second half of the year, believes Jain. He says, “The economy will also recover in 2013 which in turn will perk up the real estate sector in India. With the government trying to introduce developer and buyer friendly policies, the outlook for real estate in 2013 does look promising.”

QUICK BYTES

THE SECTOR IS STILL UNORGANISED AND EFFORTS WITH THE GOVERNMENT FOR AWARDING INDUSTRY STATUS ARE IN PROGRESS

THE FINANCE MINISTRY’S MOTIVATION THROUGH SOFTENING OF INTEREST RATES WILL HAVE A POSITIVE IMPACT ON DEVELOPERS AND CONSUMERS

 

Indian Realty Sector – Revival Mode 2012

 

Though the Indian property market remained stable throughout 2012, there were a few hiccups to conquer. Facing the pangs of global economic crisis and with clearances in cold storage for a long time, it was a battle indeed. However, in the last quarter, the government has tried to ease sluggishness in the market by announcing a few reforms to revive the sentiment. The revival in the sector has brought hope as we move towards the New Year.

Despite the sluggish the trend, the residential real estate market witnessed good demand, points out Manju Yagnik, Vice-Chairperson, Nahar Group. “Infrastructure development has played a key role in helping residential real estate in a city like Mumbai to flourish, where the infrastructure works undertaken by MMRDA and various other authorities brought great relief to the sector by creating location-based demand. There has been a great exchange of knowledge and technology among the international experts and Indian real estate participants. We have seen good demand for luxury and super luxury residential apartments. One of the important things we have noticed is that the new generation home buyers are looking for innovation in design and technology as well as world-class amenities,” she adds.
 
 “In 2012, the Mumbai residential real estate market showed signs of revival after nearly 18 months of sluggishness, driven by increase in demand and steady pricing,” points out Ramesh Nair, Managing Director – West, Jones Lang LaSalle India. “The best performing markets were Parel, Wadala, Dadar (E), Sewri, Chembur and Tilak Nagar. Generally, 2012 saw a significant increase in absorption over 2011 in these markets, in which capital values grew in the range of nine to 10% y-o-y during the year. The increased demand for residential units came from robust commercial office market activity in south central Mumbai. Also, these sub-markets benefited from more attractive pricing when compared to premium addresses of South Mumbai.”
   
Location and amenities are playing a crucial role in the buyer’s decision. And projects offering the best of both have seen a tremendous response in the last year. Bharat Dhuppar, CMO, Omkar Realtors and Developers says, “While the year started slow, the market opened up in the second half. The market activity picked up, especially post the festive season. We had a mega launch of our project Alta Monte at Malad where we got more than 5,000 enquiries and more than 2,000 families visiting the site since the launch in October. We have sold 75% of the inventory that was opened. Our project Meredia at BKC Crossing, which was launched just a month back, has also seen very good response. For the last two-three years, transactions were slow so there has been a lot of pentup demand. With infrastructure bottlenecks, people today increasingly want to buy a home in a good location. As a result, a lot of projects are coming up near the highways. Also, people now prefer to live in a community, where all amenities are at the doorstep and one does not have to move out.”
   
One of the major shifts in 2012 was the clarity on new DCR rules that allowed faster clearances so a lot of projects saw the light of day. Nair feels that due to the clarity on the new DCR regulations, 2013 will see more projects launch on schedule, with an implied assurance that developers will focus on meeting the committed timelines.
   
Awarding of infrastructure status to the sector would resolve the funding concerns of real estate. Yagnik says, “While the real estate sector was awaiting key decisions such as infrastructure status to the sector by the RBI and an introduction of single window clearance system for the approvals, the government so far has not yet addressed the same, thus arresting the overall growth of the sector. The Centre’s decision on FDI in retail and raising of money up to USD one billion by the developers from overseas market for affordable housing have provided some relief to the otherwise eventless year. We are confident that the year 2013 will bring cheer to the market.”
   
Also, there is hope that interest rates would come down. Anshuman Magazine, CMD, CBRE South Asia Pvt. Ltd adds, “Over the next few months, moving into 2013, consumers will hope for a reduction in interest rates, which in turn might help in reviving demand in the real estate sector. This will also propel growth in construction activity across the country.”
   
In its recent credit policy, the Reserve Bank of India continued with its status quo on key policy rates, which stirred a wave of disappointment in the sector. CREDAI hopes that going forward, the country’s apex bank will take necessary steps to provide cheaper funding to both developers as well as home buyers.
   
With India faring better than its global counterparts, it continues to be a promising market. Dhuppar concludes, “In the year 2013, we are hoping for an industry status for the realty sector. Also, there will be some action to fast track affordable housing and hopefully interest rates will also come down. It is a year of hope.”

QUICK BYTE
ONE OF THE MAJOR SHIFTS IN 2012 WAS THE CLARITY ON NEW DCR RULES THAT ALLOWED FASTER CLEARANCES. AS A RESULT, SEVERAL PROJECTS SAW THE LIGHT OF DAY

 

TCS leases largest IT office space

Mumbai: In a dismal real estate market, Tata Consultancy Services (TCS) has signed an agreement with Neptune Developers to lease the largest IT office space in the city.

TCS will take over 3.5 lakh sq ft space in Neptune Element, an 11-storey IT building constructed by the developers in Thane’s Wagle Industrial Estate. The two parties are learnt to have negotiated the deal for a lease amount of Rs 35 to Rs 40 per sq ft per month, which works out to an annual rent of close to Rs 16 crore. A formal agreement is expected to be sealed in a few weeks.

A TCS spokesperson said, “We have signed a letter of intent to lease the space. A final agreement will be signed only after due diligence of the property documents.” About 3,000 staffers are expected to work on the new premises.

President (operations) of Neptune Group Nayan Shah declined to comment.

According to global property consultant Cushman and Wakefield (C&W), Mumbai, like other cities, has witnessed a significant addition to the IT/ IT-enabled services (ITES) supply of approximately 5.4 million sq ft in 2012, while only 3.6 million sq ft got absorbed. “The oversupply has led to huge vacancy levels, more than 20% in the city and close to 30% in certain micro markets such as Thane. Rentals over the next two quarters are expected to remain stable with a downward bias,” said Ravi Ahuja, executive director, C&W. “Given that limited new projects are being launched for office developments in Mumbai, vacancy levels in IT/ITES are expected to reduce from the second half of 2013. Today, markets offer a good investment opportunity in Grade A IT parks in strategic locations for investors looking at 9% to 10% per annum yields, with a three to five-year capital appreciation,” Ahuja added.

A C&W report on the IT/ ITES in the Thane and Thane-Belapur belt says the trend for such companies to move from suburban Mumbai to Navi Mumbai and Thane continues unabated as locations such as Malad and Goregaon are increasingly becoming unaffordable, particularly to third-party operators like TCS and local BPOs, who cannot pay more than a dollar (Rs 50 per sq ft per month) as rent.

Bandra’s latest slum

Residents in Bandra have complained after a new slum appeared to take shape before their eyes in a 24-hour period starting Tuesday night. The new set of shanties have come up on a plot between Nargis Dutt Nagar (a slum that was legalized in 2000) and the flyover that connects the Sea Link to the Western Express Highway.

The plot belongs to MHADA, which has said they will look into the matter. Mirror visited the site on Wednesday, and locals said that they had bought a 10 ft x 10 ft space for Rs 50,000 from a man who assured them they would not be driven away. For that sum, they were also given four bamboo poles and a tarpaulin sheet.

The man who looked to be in charge of the operation refused to divulge his name, but did cheekily offer to sell us a spot. “For water and electricity you will have to pay extra,” he said. Anil Joseph, chairperson of Perry Road Resident’s Association, said the police had been informed, but no action had been taken.

“The shanties are being constructed so blatantly. The Collector’s office, MMRDA, MHADA and BMC offices are at stone’s throw distance from this plot. Every officer who uses Reclamation flyover can se this encroachment.”

A few residents’ associations came together on Wednesday and lodged formal complaints with the police commissioner and the BMC chief. According to people at the site, thugs had assaulted several people who had paid an advance on Tuesday, but had been unable to furnish the remaining sum by Wednesday.

A few of them went lodged complaints at the Bandra Police Station. Abhay Shastri, Senior Inspector of Bandra Police Station, said that cases of assault had been filed, and that the offenders had been warned. He did not comment on the illegal slum that had come up at the spot.

Niranjankumar Sudhanshu, chief executive officer of MHADA’s repair board told Mumbai Mirror that he would initiate action after checking the construction, while Sudhir Naik, deputy commissioner attached to the municipal commissioner’s office said they would help MHADA in their demolition drive once a decision was taken.

Source: Mumbai Mirror