Real estates success storeysThe real estate business is often painted in shades of grey due to its poor reputation for ethics, transparency and governance. However, the industry contributed to 6.5 per cent of the countrys GDP in 2012 (10.5 per cent in 2010-11) and is the second largest employment generator in the country after agriculture.The total revenue of the real estate sector was $66.8 billion during 2010-11. By 2020, the sector is expected to earn revenue of $180 billion.The fact that today almost every individual/couple considers real-estate investment as the first form of investment after securing a job/getting married says something about how far the industry has fared compared to a few decades back, when buying a home was usually the last investment before retirement.Bright ProspectsThe good news is: Short-term pressures induced by high interest rates notwithstanding, large industrial houses such as Tata and Godrej are planning to expand their foray into the sector. In fact, Adi Godrej has gone on record stating that real estate is likely to become the largest business division for the group in the next 10 years. In addition, large well-reputed Indian and international fund houses are increasing their exposure to the real-estate industry.Last week, Kohlberg Kravis Roberts and Co. LP (KKR) one of the worlds largest private equity (PE) firms announced that it is joining hands with Singapores sovereign wealth fund to set up a non-banking financial company (NBFC) with a corpus of around $150 million that will lend funds to property developers in India.Lately, the Government has also been talking about setting up a new regulatory authority for the sector. All these developments point in one direction the increasing importance of the sector to the economy, more professionalisation and bright prospects that lie ahead for genuine businesses and investors in this sector.One of the advantages of the property business, as pointed out by Adi Godrej, is that one does not have to be concerned about market share or size of the opportunities for one to make profits. There are other characteristics that lie behind generating extraordinary profits in this sector. In this article, Id like to provide an insight into the success strategies that lie behind three firms that have recorded industry-beating profitability amidst tough external conditions. The firms are Oberoi Realty, Sobha Developers and Ashiana Housing.Oberoi RealtyOberoi Realty is a debt-free real estate firm (a laudable achievement for an industry drowning in debt). The company is built on a model similar to Trump Luxury Real Estate (minus the recklessness of the swashbuckling Donald Trump of course), with the aim of developing signature properties in return for a hefty premium.The firm has carved a niche for itself in the Mumbai market.Although the company has a diversified portfolio across commercial and residential, the predominant focus has been on the residential side and the aim is to target the upper end of the market segment. Integrating retail, office space, social infrastructure and hospitality projects, has been one way in which it has been able to create an aspiration value for residences in mixed use developments.The company extensively out-sources work to leading international and domestic consultants in the areas of architecture, design, engineering and construction to achieve international quality and styling as well as to attain the scalability required to undertake large developments. Yet, it is able to clock a high margin due to the target segment and premium branding.

Sobha DevelopersSobha Developers is known for building a good portion of the Infosys campuses. It focuses primarily on residential projects for families and contractual projects for corporate, especially in the south market. Backward integration model is one of the key competitive strengths of Sobha.This means that the company has in-house possession of most of the competencies and resources required to deliver a project from conceptualisation to completion. Backward integration includes an interiors division with one of the countrys largest wood working factory, a metal works and glazing factory, and a concrete products factory. These help it to lock in higher margins end-to-end by achieving cost efficiencies.Ashiana HousingAshiana Housing is another near debt-free firm in the real estate sector that records high return ratios. The company mainly focuses on group housing for the middle-income group and retirement communities for senior citizens in Tier-2 and Tier-3 cities such as Jamshedpur, Jaipur, Bhiwadi and Ghaziabad.The companys business model is based on five strategies low capital employed, land is raw material, in-house construction capabilities, direct sales team and facilities management.By operating in regions where land is a smaller portion of total costs and using the JV model with land owners, the company is able to keep its capital requirements low. Focusing on an execution-based model as against land banking further frees up capital. In-house construction allows better cost and quality control.In-house sales team allows sale to actual users and long-term investors instead of a broker selling to speculative investors. Lastly, facilities management provides annuity revenues even after project completion.Common ThreadWhat distinguish these companies from the rest of the players in the sector is their focus, prudent financial management and ability to avoid the herd mentality that did many others in during the 2008 crisis.The typical real estate developer diluted equity and loaded up on debt to accumulate large land banks in the hope of high valuation what they missed was a key component of the financial equation cash flows.Another common denominator for the companies discussed above is the strong web of trust that they share with their customers.These characteristics, along with their unique business models, are likely to hold them in relatively better shape when it comes to coping with the volatilities that the industry is bound to witness along the way in its long-term growth journey ahead.Mahindra Group sees 500-Mw opportunity in solar powerThe Mahindra group, which forayed into the solar power sector three years ago, said it could add another 500 megawatts (Mw) over the next 24-36 months.

This opportunity, however, was not restricted to the projects it had won under the tariff-based bidding as part of the National Solar Mission, the company added. The group has two projects, of 5 Mw and 33 Mw, under the National Solar Mission.

We are looking at off-grid products using solar in rural areas, and we believe that solar products can replace or supplement several applications, which currently run on gensets, said Parag Shah, managing partner at Mahindra Partners and head of Mahindra Clean Tech. The company plans to leverage its strong presence in rural areas, thanks to its tractor and farm equipment business.

The off-grid solar business will include solar products such as solar irrigation pumps, solar lights, solar water purifiers, and lanterns. We have already launched two products and working on others, said Shah.

It recently received a bulk order from an undisclosed telecom tower company to provide solar power to towers, which are now run on diesel.

Mahindra is also looking to orders to execute engineering, procurement and construction (EPC) of solar power. The company has plans to set up solar power charging points for its recently-launched electric car, e2o.

In addition to being green, using solar power can also cut down a lot of pilferage, said Basant K Jain, chief executive officer of Mahindra EPC & Solar. The EPC company has already set up as much as 65 Mw and hopes to bag orders to execute as much as 600-800 Mw in three years.

According to Jain, there are many such opportunities where companies and organisations are looking for expertise to set-up and maintain solar power projects.

The company is also looking at private-power-purchase agreements (PPP) to set up rooftop solar power installations for private companies. The real market is in the rooftop. Solar power on grid can see saturation or might have land constraints, but not for rooftop, said Jain.

However, the price structure for solar power on rooftops could be higher as it requires customisation for each product. Even so, many corporates which have green agenda like public sector utilities, institutions and corporates too are looking at solar.

The group's real estate venture, Mahindra Life Spaces, might be looking an extended rooftop projects.

There could be microgrids in rural areas as well, said Jain. The opportunity only for EPC in solar could be as high as 1,000 Mw in another three years.

Going forward, solar power is likely to play a larger role in grid connected power, as many states are taken to task for not fulfilling their renewable power obligations. Once the norms for buying renewable power are clear, there would be more solar power flow to the grid. Solar is at a tipping point in its lifecycle and the government is making several efforts to help it succeed and help India's energy security, said Shah.

Solar power price has also changed, said the company. Before the tariff-based bidding came into play three years ago, solar power was being sold at Rs 17.9 a unit. The bids recently were as low as Rs 7 a unit. There has been a substantial drop in the capex for solar power as well, said Shah.

Real estate Bill: Will it create consumer comfort?The government has been proposing to introduce a law to regulate the real estate business, which is probably one of the largest and worst regulated sectors in India. The activity in the Indian real estate market constitutes five to six per cent of gross domestic product, and the market is expected to grow further in the coming years as is the need for affordable housing. The Bill intends to cover the construction development sector, including townships, housing and built-up infrastructure.

The business and the market have so far been the monopoly of promoters, developers and builders. The promoter, who usually wears all the above hats, starts off with a promise of delivery within a few months and provides a payment plan, linked to completion involving huge instalments, which are demanded, even if the progress of the project lags, due to recessionary trends or any other extraneous reason, the customer is the one to suffer .

Inevitably, the window for the payments is brief, and the interest rate for delayed payments is exorbitant. In the Competition Commission of India ruling in the complaint by the Belair Owners Associations against DLF Limited, the commission observed that the developer/builder had reserved sole discretion in changing zoning plans, super area, carpet area, location of apartment, with no opportunity being afforded to the customer to raise any objection and the discount on the overall cost. A discount, if at all given, is negligible and on completion, the final price is inevitably beyond the estimated budget of the customer, who has to serve the banker's loan with interest. In the above DLF case, delays by the customer attracted interest at the rate of 15 per cent an annum, while in the case of consumer, the rate was 15 per cent an annum for the first 90 days and 18 per cent thereafter.

Delays are inherent in the system as many approvals are to be taken at the start of the project because of objections by other authorities. Real estate is a state subject and all the approvals are at that level. Land availability and procurement, and infrastructure development are the key issues. Very often, land has to be acquired by following the legislative process, unless purchased from farmers and other small land owners. Even otherwise, there are around 50 approvals required, of which, the ownership certification, land use conversion, non-encumbrance from the registration authorities, no objection certificates (NOC) from the State Pollution Control Board and the central ministry, NOCs from the forest authorities, coastal zones, airport authorities, Archeological Survey of India, road access clearance, in most cases have to be taken separately from each regulator. The contractor/subcontractors have to be registered with the local labour department, and possibly in some states under the Contract Labour Regulation Act, as well. And there are post-commencement approvals pertaining to construction, arranging electricity and water connection, establishment of a substation, back-up arrangements such as installation of generators.

The Bill seeks to specifically define 'apartments' and also provides for it to include garage or open space following the above determination of the CCI. Competent authorities are to be set up in each state having powers to give permission for development. And there is to be an Appellate Authority at the Centre. The promoter is defined as the person who constructs or cause to be constructed an independent building consisting of apartments for sale to the general public. What is required is that the promoter has to be specifically registered for real estate purchase and the transfer of immovable properties including conversion thereof with the Real Estate Regulatory Authority for a plot of land exceeding 4,000 Sq metres. On receipt of all the approvals for the development, the promoter has to seek registration. Therefore, unless all the approvals are in place, the promoter is barred from approaching the public, or issuing an advertisement or prospectus to the public. The Bill proposes that, for being eligible for certification, a promoter has to deposit 70 per cent of the amounts realised for the real estate project from the allottees from time to time, would be deposited in a separate account to be maintained in scheduled banks, within 15 days of its realisation for meeting the costs of thee real estate project and would be used only for that purpose. This will help keep a check on possible misappropriation of consumer money.

The state authority has to within 30 days of receipt of the application along with all necessary paper work grant or reject the application provided the applicant will be given an opportunity for hearing to clarify any sensitive issues. The prospectus has also to be approved by the authorities.

Once the prospectus is in the public domain, based on access password and login granted by the authority, the promoter has to give certain information to the allottee as well as its website on the site plan, design and specifications, stage-wise time schedule for completion of the project along with municipal & other essential services.

A certificate of compliance regarding building plan, structural safety, fire safety and other requirements has also to be provided to the customers. In case the promoter is unable to complete or give possession then the promoters are bound to refund the money forthwith along with penalty.

The Bill is, however, not entirely punitive in its approach, unlike the other laws, such as, the Consumer Protection Act, Indian Penal Code and Transfer of Property Act. By regulating the promoters and requiring transparency and accountability this will hopefully work in favour of the consumer, and protect them from unscrupulous operators.

Hopefully it will also improve the standards of construction and services provided by the promoters, thereby giving the consumers better options to choose from.

The grant of registration would be subject to the promoters making full disclosures about the company or enterprise proposing to develop a real estate project. Further, the promoter will have to file the development plans (layout plans, date of start of construction, date of completion of construction, handover date etc) and the names of real estate agents associated with the project. This will prevent subsequent arbitrary changes that are generally made by promoters, who reduce the carpet area of their units causing loss to the consumer.Big discounts on resale flatsThe resale market offers new properties and those under construction at a discount to those being offered in the same projectsAfter the failed predictions over the past couple of years about a fall in property prices, you are more likely to witness the prophesied Second Coming before the promised correction. So what should cash-conscious buyers do? Wait endlessly in the hope that realty prices falter or take the bait of glossy schemes offered by developers? While most such offers for new houses seem tempting, you wont derive any real benefit. Fortunately, there is a third option: cheaper flats in the resale market. No, these arent old, mouldy apartments in decades-old projects. Quite a few of these houses have not even been lived in, but you can get them at a discount to similar houses within the same project or vicinity.If youre wondering why resale flats are cheaper than the new ones being offered by the developer, it can be due to various reasons. One of them is that these houses have been snapped up by buyers and investors during the pre-launch phase with the intention of selling them after about three years to earn a profit. At this stage, they were only required to make the down payment. Many investors book a property at the initial stage just to make a small profit. If they want to make a quick exit, they will price it cheaper than the one offered by the developer, for a faster sale, says Yashwant Dalal, president of the Estate Agents Association of India, an apex body of real estate developers.Another reason is that a lot of investors who book flats during soft launches are offered heavy discounts by builders. So, even if such investors sell the flats at a price lower than the one offered by the construction company, they make a hefty profit.While individual buyers readily make the down payment, a few find out that their finances are strained when they have to start paying the home loan EMIs after the construction is complete, especially if they are also paying a rent. The only option is for them to sell the current house as quickly as possible to repay the home loan, even if it means earning a smaller profit than the one they had hoped for.How you gain? The biggest benefit of buying in the resale market is that the construction is almost complete and some of the houses are ready to move in. Of course, in this case, you will also know that you are getting exactly what you are paying for. You can be sure that you wont be duped by the developer, who promises to install marble or wooden flooring and, instead, puts in regular tiles. Another advantage is that you can avail of the tax benefitbeginning with the first mortgage payment. The tax deduction of 1 lakh on the principal component of an EMI is available under Section 80C, while the interest paid on a home loan is tax-exempt up to 1.5 lakh under Section 24B. However, this is possible only after you take possession of a house. In case of a property under construction, you have to pay the pre-EMI, which is the interest on the home loan. Though the total interest that you pay as pre-EMI can be tranched into five payments that areeligible for tax exemption for five years after you take possession, they are included in the capped amount under Section 24B. So theres hardly any benefit in this case.Problems you may face. In the resale market, the down payment is higher than that demanded by a builder, which is usually 20% of the value of the property. Also, the seller may ask for a portion of the selling price to be paid in cash, which means that you will have to apply fora smaller home loan. So, you should be sure that you can afford to pay 25-30% of the price. Also, when you buy a property in the resale market, you are dealing with an individual rather than the developer, who has a reputation to protect. You cant take anything at face value here, so you must thoroughly scrutinize all the property documents, especially those that verify the seller as the real owner of the property, who has the right to dispose it of, says Om Ahuja, CEO, Residential Services, Jones Lang LaSalle India.Beyond the sale price, there will be additional costs that you should factor in, such as registration costs and transfer fee to the housing society. Before taking over the house, make sure that the seller has paid all outstanding dues and taxes. However, to get the utility connections transferred to your name, you will have to pay a fee to the relevant state departments or municipal authorities.Though these houses are practically new, you may want to carry out renovations or changes to suit your taste. So, include such costs while finalising your budget.There could be other minor issues like not getting the membership to the societys club because it is full or the lack of parking space. If the first buyer did not buy the parking space, the new buyer may not be able to get a new parking lot even if he is ready to pay for it, says Ahuja. The situation may be worse if your family owns more than one car.What if the property is mortgaged?If the house is already mortgaged with a bank, you should ask the seller to obtain a letter from the relevant bank stating that it agrees to relinquish the property documents when the loan is fully paid.After you are satisfied with all the property documents, you can make a token payment to the seller and enter into a registered agreement with him. You can then deposit the balance payment to the sellers loan account, after which the bank will initiate the process of releasing the documents. The bank and the seller will fix a date by which you will have to make the full payment. If you are unable to do so by the due date, the bank will levy either a penalty or a premium over and above the outstanding principal, which you will have to pay.If you plan to take a home loan to pay for the house, your bank will directly transfer a portion of the outstanding amount to the sellers loan account. Once the sellers bank receives the payment, it will issue a no objection or no dues pending certificate to the seller and hand over the original documents to your bank, which will then transfer the balance payment.

Hotels strive to beat the heat from taxFrom Monday, your neighborhood restaurant could become a sweltering hotspot, with many hoteliers deciding to disconnect and remove their air conditioners.This decision comes after the Central government refused to withdraw its decision to levy a 4.94 per cent service tax on fully and partially air conditioned restaurants.Middle- and small-segment eateries, hotels and restaurants in the city have now decided to remove their air conditioners.In partially air conditioned restaurants, even customers seated in non-air conditioned dining halls would have to pay this service tax. Such eateries cannot afford to pass on the increase to their customers at a time when people are thinking twice before spending on eating outside. Families will rather get parcels from non-a/c hotels and eat at home. Already mobile fast-food eateries are eating into the share of small hotels, said K.T. Srinivasa Raja, president, Chennai Hotels Association.Of the 15,000 non-star category hotels in the State, at least 75 per cent are air-conditioned and of these nearly 11,000 hotels, 8,000 are in and around the city. There are 150 star category hotels.M. Venkadasubbu, president of the Tamil Nadu Hotels Association, said hotels have been asked to put up boards informing the public about the new tax.It is very unfortunate that this order comes into force in peak summer. In this sweltering heat, people who do not have air conditioners at home usually come to restaurants to cool off; they will be disappointed, he said.Tamil Nadu Hotels Association secretary, R. Srinivasan said this new tax would amount to double taxation as already VAT is being levied by the State government on the sale of food. There is only one transaction happening, we cannot be taxed twice for that. In 1991, an expenditure tax of 12 per cent was levied by the then Union finance minister Manmohan Singh, but that was rolled back. At that time too we had removed air conditioners, he recalled.Sources in the associations said members were planning to approach the court for remedy.B. Sriram, executive director, Tax and Regulatory Services, PwC, said while courts would generally be unwilling to test the validity of the [service] tax, however, they will be open to rule on the mutual exclusiveness of the two taxes.How to ensure your flat has good resale valueMumbai-based Salil Joshi, 30, is worried. His society had received a letter from the Brihanmumbai Municipal Corporation saying it planned to build a crematorium in that area, just a few hundred metres from the building premises. Joshi's relatives suggest he, with his wife and a three-year-old daughter, shift before the area loses its value.

While some face hurdles in getting good resale value for their flats, some struggle to merely sell the property. Real estate experts say a flat might not have good resale value if there is a public toilet or a crematorium in the vicinity or if the building has a bad approach road.

Bharat Dhuppar, chief marketing officer of Omkar Realtors & Developers, says while nothing can be done about the location and structure of the building, for good resale value, one could definitely work on the home interiors.

Get an agentFirst, know the current rate in your area. You may need a good real estate agent to help sell your flat. However, it isn't a question of selling alone; one has to ensure it is sold quickly and the rate is better than the prevailing one. Therefore, hire a professional agent with good contacts. Also, informing the maids and guards in your premises could prove helpful. Agents usually charge one to two per cent of the transaction value as commission. This, however, is negotiable.

A compact kitchenIt is best to remodel the kitchen and the bathrooms. Most women judge a house based on how compact and useful the kitchen looks. If it isn't spacious, ensure you have dedicated space for daily-use electronics items such as a microwave-oven, a mixer-grinder and a washing machine. To give it a modern look, one could consider furniture fixtures for these. Modular kitchens are becoming popular, as these make the kitchen look bigger; all unwanted items can be stashed away in stylish drawers. "You can get these custom-made for anything upwards of Rs 30,000," says Vyomesh Rao of YMS Consultants.

"Basic wood-work and kitchen fixtures could fetch you 5-15 per cent more than the actual resale rate in your area," adds Dhuppar.

Fix problemsDon't leave repair work for the new buyer. This would leave a bad impression, which might result in lower resale value. Plumbing and lighting problems are common and people often avoid resolving these. As a buyer would spend a huge sum on the house, he/she wouldn't want unnecessary overhead expenses. Basic changes in electrical wiring and fixing taps and fittings could cost you Rs 20,000-50,000.

Upgrade interiors"On an average, people spend Rs 100-700 a square foot on beautifying their house, including on interiors and upgrades," Dhuppar says.

A spacious living room and a compact kitchen improve the image of a house. Get rid of unwanted or broken furniture, as these occupy space and make the house look smaller than it is. One might also consider painting at least those parts of the house that look shabby and are probably putting off buyers. For a one bedroom-hall-kitchen flat, basic paint work would cost Rs 20,000-30,000.

Ashutosh Limaye, head (research) at Jones Lang LaSalle India, suggests one keep the receipts and bills of all such repair/renovation work as proof of the amount spent.

Ready documentsIf the house was bought on a loan, ensure your loan papers are in good condition, as potential buyers would need to take a look at these. Produce all loan-related papers and provide their photocopies. Obtain a no-objection certificate from the society, as this would indicate the house is ready for sale and the seller has no dues towards the society. "Good documentation takes away stress, making a customer more confident about buying a house," says Limaye.

Keep it cleanTushar Savdavkar, a Mumbai-based vaastu consultant, says keeping the place clean is the first step towards keeping negativity out. Therefore, even if you aren't staying in the house, ensure it is clean. A clean house, one that has natural light, has a positive impact on the buyer.

Niranjan Hiranandani, managing director of Hiranandani Group, says, "Small changes in the house, coupled with good maintenance and hygiene, could definitely attract potential buyers willing to give a premium."

Customise, but don't overdo itThose who have extra space such as balconies have an edge, as balconies and store rooms act as add-ons. If you don't have a great view from the house, try enhancing the look of your balcony with plants and flower beds, as these provide a natural and soothing effect. If you have a dry balcony, convert this into a small storage room by separating it with a sliding door. The extra room would be a great selling point.

So, keep it simple, yet useful.Realtor body against Budget proposal of 1% TDS on property dealsMUMBAI, BANGALORE: Confederation ofReal EstateDeveloper's Associations of India (CREDAI), has sought withdrawal of Budget proposal to levy 1% tax deducted at source on any property deal other than agriculture land.

In a recent representation sent to the finance ministry, the realtors' body has argued that implementation of this proposal will lead to more complexities and harassment of consumers. "We are seeking withdrawal of this proposal completely. This will lead to harassment of consumers, especially the buyer who is being burdened with additional responsibility to withhold the amount, deposit this to tax authorities and file returns," said Lalit Kumar Jain, chairman, CREDAI.

CREDAI, the apex body representing organised real estate developers and builders across the country, has sent a written representation to thefinance ministryin this regard. Under the proposal, the tax is mandated to be paid if the property consideration is over 50 lakh in specified urban areas and 20 lakh in any other area. The transaction will be registered only after the buyer provides proof of deduction and payment ofTDS. The proposal will be effective from June 1, 2013.

According to Jain, around 80% of realty transactions in top six markets in the country including Mumbai Metropolitan Region, Delhi, Bangalore, Chennai, Pune and Hyderabad will be affected by the proposal, given the current property rates.Eight core industries output contracts 2.5% in FebThe output of eight core sector industries contracted 2.5 per cent in February, against a growth of 3.1 per cent in January and 7.7 per cent growth in February 2012.This is the weakest performance for the eight core industries that have a 37.9 per cent weightage in the Index of Industrial Production (IIP) since the new series started in April 2005.The January 2013 output figure has also been sharply revised downwards to 3.1 per cent, from 3.9 per cent earlier.On a cumulative basis, the eight core industries output grew 2.6 per cent in April-February 2013, lower than the 5.2 per cent growth recorded in same period last year.All this is a pointer to weak industrial growth for February 2013, official data for which is expected to be released on April 12. The February performance of eight core industries was hit by contraction in as many as five of the eight industries.The five sectors that saw a decline in output are coal (8 per cent), crude oil (4 per cent), natural gas (20 per cent), fertilisers (4 per cent) and electricity (4.1 per cent). The other three core industries cement (3.9 per cent), steel (0.5 per cent) and refinery products (4.3 per cent) recorded growth in output during February 2013.The weak core sector performance for February coupled with the sharp fall in Indias manufacturing Purchasing Managers Index (PMI) for March (from 54.2 to 52) is a signal that growth recovery may be further delayed, economy watchers point out.Raised road to add space to OMRAfter several years of see-sawing, the state government has chosen to build an elevated corridor on Old Mahabalipuram Road (OMR) rather than introduce a bus rapid transport system (BRTS) to ease congestion.The four-lane elevated corridor is planned from Taramani to Siruseri. With the existing six lanes on OMR, the stretch will get 10 lanes to cater to the growing vehicle population.There are no plans to introduce metro rail, mono rail or MRTS. The elevated stretch has been designed with a technical committee that includes experts from IIT-Madras and Anna University, said a source.The design for the corridor has been finalised for the stretch between Taramani and Sholinganallur junction. On Monday, chief minister Jayalalithaa announced that the corridor will run up to Siruseri in the first phase, which is about 22km, and from Siruseri to Mamallapuram in the second phase, coming to atotal of 45km. When completed, it will be the longest elevated corridor in the country.Available designs show that the corridor will begin after the MRTS station in Taramani and go over junctions at SRP Tools, Perungudi, Thoraipakkam and Sholinganallur. Those on ground level will not be disturbed, said an engineer familiar with the project.The corridor will have rotaries to exit OMR. It will be like the rotaries on the Padi flyover so that people can get on or off the elevated corridor at any point, said the engineer. The government has sanctioned 5 crore for a detailed project report that will study the feasibility of the project. Initial estimates suggest that the 22km stretch will cost about 1,500 crore. Earlier, the government was considering a bus rapid transport system on OMR with a dedicated lane for buses, lanes for pedestrians and cyclists, and a lane for other vehicles. Politicians and bureaucrats visited Ahmedabad to get a sense of how the systemworks. According to the plan, 30% of the 41m OMR was to be dedicated to buses, 30% to cyclists and pedestrians and 40% to general traffic. With Mondays announcement, officials seem unclear about the fate of BRTS, which has to be implemented before work begins on the elevated corridor. Louis Berger Group, a USbased engineering firm, submitted designs for the corridor. Highways department, Chennai Metropolitan Development Authority, Metropolitan Transport Corporation and Tamil Nadu Urban Infrastructure Financial Services are the government bodies that responsible for implementing the project.RAMPING UPThe government plans to build an elevated corridor on Old Mahabalipuram Road (OMR)Four-laned elevated corridor between Chennai and Mamallapuram planned in two phases on OMRAt 22km, first phase between Taramani and Siruseri will be longest elevated corridor in the countryCorridor will be in the middle of the road with rotaries at every junction for commuters to enter and exit OMR, similar to Padi flyoverDesigns available for Taramani-Sholinganallur stretch, which will go over junctions at Tidel Park, SRP Tools, Perungudi, Thoraipakkam and Sholinganallur.Design for elevated corridor done by US-based engineering firm Louie Berger Group

Realty market strikes gold, city sees 3 deals worth 450 croreIndicating buoyancy in therealty market, Chennai-based builder Akshaya bought a 1.03-acre land on Sterling Road for Rs 86.75 crore on Tuesday. In the past few weeks alone, three city-based builders have concluded land transactions worth nearly Rs 450 crore.

While VGN bought a 26-ground (one ground is 2,400 sq ft) property in Nungambakkam from Tatafor 195 crore, Ceebros is taking over five-star Hotel Atlantic in Egmore from publishing firm S Chand and Co for 165 crore. Akshaya has bought the land, located close to the Sri Lankan Deputy High Commissioner's office, fromIFCI Infrastructure Development Ltd. Including stamp duty and registration charges, the landing price for Akshaya is 5 crore per ground, said its CMDT Chitty Babu. All the three builders are planning to develop high-end residential apartments.

The Atlantic deal is an indicator of the financial woes of the hospitality sector in the city due to oversupply. Ceebros has paid 35 crore so far for the 30.75 ground property and is expected to complete the transaction in April, said group CEO of the hospitality division of Chand and Co, Amitabh Sanduja. The hotel is non-operational at present. Ceebros will pull down the hotel to construct a multi-storeyed luxury apartment project, said its MD Subba Reddy.On the decision to sell Atlantic, Sanduja said, "The hotel industry is saturated in Chennai because of oversupply in the last few years. The average occupancy in five-star hotels is only 55% now and new entrants are struggling for existence. The average room rent has come down from 6,000 to 4,000. The next three years will be really bad for hotels in Chennai. We intend reinvesting the sale proceeds from Atlantic in Shaara Hospitalities to expand in northern and western India. With this money we can develop three hotels elsewhere".

Chand had bought Atlantic in 1980 for 90 lakh. It was closed down in 2002 owing to a labour unrest. The group started renovation of the hotel in 2007. "We have spent 60 crore for doing up the hotel and 90% work is over, but chose to sell it because recovering that money will take several years in the present circumstances. Moreover, we have made our profit because our land cost is historical," said Sanduja.

Shaara recently bought a five-star boutique hotel in Goa. It is developing a five-star hotel in Noida and a health tourism resort in Almora. It started a budget hotel in West Delhi six month ago. Meanwhile, Ceebros is in discussion with P Prabhakar Reddy-ownedViceroy Hotelsto buy JW Marriott, being constructed in MRC Nagar in Chennai. Work on the hotel is halted after completing the shell. If Subba Reddy buys it, he may pull down the structure to construct a luxury residential project, said sources close to him.Sembakkam is now municipality, residents thrilledResidents of Sembakkam town panchayat near Tambaram are upbeat over their elevation as a municipality.On Tuesday, minister K.P. Munusamy made an announcement in the regard in the Assembly. Sembakkam is only the fifth municipality in the citys southern suburbs and the eighth in Kancheepuram district.Staff and elected representatives at the town panchayats office in Kamarajapuram were overjoyed. This is recognition of our efforts to provide the best services to our residents, said G.M.R. Santhakumar, the local body chairman.It is an extremely proud moment for the administrative machinery and it would not have been possible without the excellent co-operation extended by our residents. This will only make us more committed and inspire us to work harder towards implementing some of the long-awaited projects like the underground drainage and water supply improvement schemes, Mr. Santhakumar said.Proactive administrationOfficials at the directorate of town panchayats said the selection of Sembakkam among 18 other town panchayats in Kancheepuram district was made after taking into consideration the norms of the department of municipal administration and water supply.Tambaram, Pallavaram, Pammal and Anakaputhur are the other municipalities in the citys southern suburbs. (Alandur was merged with the Chennai Corporation in 2011.) The other municipalities in Kancheepuram district are Maraimalai Nagar, Chengalpattu and Madurantakam.There were 24 town panchayats earlier, and five among them, Perungudi, Sholinganallur, Pallikaranai, Meenambakkam and Nandambakkam, were merged with the Corporation in 2011.Factors such as proactive administration that included novel initiatives such as mass cleaning, better maintenance of amenities and creating new access to remote areas were also taken into consideration, an official said.Along with the hamlets of Rajakilpakkam and Gowrivakkam, Sembakkam was a village panchayat till its elevation as a town panchayat in 1984. Spread over 6.27 square kilometres, the town panchayats population was 21,492 as per figures of the 2001 census.It more than doubled to 47,700 as per the census of 2011. The annual revenue of the town panchayat touched Rs. 5 crore, an important factor that aided its status elevation, the official said.PROBLEMS REMAINSembakkam, like other urban and rural local bodies, has its share of problems. Residents, while welcoming the elevation of the local bodys status, said hygiene has taken a severe beating not only in the newly-developed and expanding areas, but also in traditional hamlets.Many parks were left neglected and connectivity between some of the pockets and Tambaram and Velachery was not satisfactory. Street illumination too had to be improved, the residents said.

Park Hotels launches mid-market brand ZoneApeejay Surrendra Park Hotels, which runs boutique hotel chain Park Hotels in the country, has launched a new brand, Zone by the Park.Priya Paul, Chairperson, Apeejay Surrendra, Park Hotels, said, We saw an opportunity to create a mid segment brand that reflected an upbeat mood. Though different from The Park, we wanted to create a brand that would channel its inimitable spirit.The group will launch four hotels under the new brand, with the first one expected to open at Raipur by the end of this year. Other three locations that have been identified for the brand include Coimbatore, Dehradun and New Delhi. It will largely be run through management contracts with developersVijay Dewan, Managing Director of the hotel chain, added, After much deliberation, we closed on the brand Zone by The Park. Zone will cater to the gap in the Indian hotel market for the burgeoning Indian middle class and international traveller looking for budget travel. The hotels will be priced around the $80-100 (daily tariff) mark.TDS proposals can increase compliance burdenOnce bitten, twice shy. If this saying were to be followed literally, the finance minister wouldnt have restored the levy of deduction of tax at source (TDS) on immovable property transactions. The introduction of a similar proposal was proposed last year in Budget 2012, but did not see the light of the day. It was ultimately withdrawn due to the number of representations pointing out the compliance burden. Surprisingly, a microscopic reading of the new proposal makes us believe that the compliance burden has in fact substantially increased in the current proposal.It was quite apparent that the finance minister was wearing the hat of a revenue collector when presenting this years Budget proposals considering that he is faced with a huge fiscal deficit problem. And the most obvious sector to be pushed to the fence was the real estate sector which is generally perceived to be not so real.The finance minister was vocal enough in putting it on record that transactions in immovable property are generally undervalued and under-reported (few would be able to articulate anything against this).In addition, half of all property transactions are not supported with the PAN of the parties involved. With a view to improve reporting mechanism of such transactions and to collect revenue at the earliest point of time, the finance minister has proposed the introduction of a levy of TDS on immovable property transactions (other than agricultural land transactions). This enables a buyer will be liable to deduct taxes at 1 per cent of consideration from a resident seller where the property value is in excess of Rs 50 lakh.Introduction of the TDS provisions may have manifold repercussions, especially by increasing the compliance burden for buyers. Based on the current reading of the law proposed, the buyer will have to obtain Tax Deduction Account Number (TAN), file TDS return and issue TDS certificate.The provision introduced last year had a specific exemption from obtaining a TAN and filing a TDS return, on which the current proposals are silent. A salaried individual is likely to buy his dream home, only once in his life on account of soaring property rates (especially in metro cities). Because of such provisions, he will be required to apply for a TAN, file a TDS return, issue TDS certificate, etc., and more so, be prepared to answer queries of TDS officer (in addition to the usual income-tax officer). This will surely increase his compliance burden and costs, and not to forget the possibility of additional scrutiny from income-tax authorities.In case of resale of properties, where the PAN of the seller is not provided or an invalid PAN is quoted, then the buyer shall be liable to deduct taxes at a massive rate of 20 per cent as against 1 per cent. In such a scenario, if tax is not deducted at 20 per cent, the buyer may also be faced with levy of interest and penalty. On account of such onerous provisions, the buyers will have to be extra cautious about the genuineness of the PAN provided by the seller.From sellers perspective, where the seller buys a new residential house upon sale of his existing house and thus, is not liable to pay tax on the capital gains earned, he will have no option but to claim the TDS as a refund in his return of income. No prizes for guessing when the refund will see the light of the day.In the case of a property under construction, the developer will have to collect the TDS certificates from thousands of buyers and claim the TDS in its return of income. This may pose administrative issues for the developers which may also result in short grant of TDS credit. In addition to the administrative hassle, the amount withheld by the buyers will negatively impact the cash flow of the developers.In case of purchase of under-construction property, where the buyer uses bank finance and payment to the developer is made directly by the bank on a staggered basis, the question that may arise is, who will deduct tax; the buyer or the bank?Certainly, for better implementation of these proposals, clarity on certain aspects is awaited. Only time will tell whether the provisions are successful in creating a better reporting mechanism of such transactions or whether such provisions will cause undue hardship to the average home buyer.Towards cheaper, mass-scale housingCan panels made of gypsum reinforced with glass fibre be used as load-bearing walls replacing brick in a multi-storied building? Can they also be used as floor/roof in place of reinforced cement concrete (RCC) slab? The simple answer is, yes.A few years ago, Rapidwall Building Systems, Australia, developed a technology to make gypsum strong and water-resistant enough to be used as load-bearing walls. This is by calcining process where glass fibre is combined with gypsum plaster to produce glass fibre reinforced gypsum (GFRG) panels. Now, researchers at IIT Madras have gone a step further.They have developed a technology to make GFRG panels to be also used as floor/roof, thus eliminating the use of RCC slabs. An eight-storied building, for instance, can be built using the panels as load-bearing walls, floors/roofs and staircases.They also collaborated in the indigenous development of an excellent water-proofing material. Water-proofing is essential for prolonged durability of the GFRG panels, especially in the case of roofs and toilets.A demonstration building ground plus first floor is being built inside the IIT-M campus. The building, with electrical and sanitary fittings, will be ready on April 8 just 29 days of construction after the foundation was completed. It will be ready for occupation when it is completed, said Prof. Devdas Menon, Department of Civil Engineering, IIT Madras.The building will have four units two with a carpet area of 269 sq.ft are for the economically weaker section, and another two, with a carpet area of 497 sq.ft, are for the low-income group (LIG).A few years ago, a couple of buildings were constructed at the GFRG panel manufacturing plants at RCF in Mumbai and FACT Cochin, and one at Visakhapatnam using the IIT technology. Those were pilot projects, said Prof. Menon. This is a demonstration that the material can be used for cost-effective, mass-scale and quickly buildable housing, with improved water-proofing.What makes the rapid construction possible is that the panels are prefabricated and cut to desired sizes based on room sizes with openings for doors and windows.A panel has two skins of 15 mm thickness that are interconnected at regular intervals (25 cm). The cavities formed by these interconnections are used for several purposes filling with concrete, and laying electrical conduits and plumbing pipes.In Australia, the Rapidwall technology has been used for constructing several 2-3 storied buildings. Since the walls act as load-bearing structures, every cavity in the panel is filled with concrete. They use conventional RCC solid slabs for the roof/floor.We recommend the use of two steel bars instead of one and filling all cavities with concrete in the lower floors in the case of a high-rise building, said Prof. A. Meher Prasad of Civil Engineering Department, IIT, Madras. The number of concrete-filled cavities and steel bars keeps reducing from the ground to the topmost floor. The topmost floor will need very few concrete-filled cavities.A reduction in amount of concrete used in turn reduces the total weight of the building. The ripple effect is the reduction in the foundation cost. The demonstration building at IIT Madras is about 25 per cent cheaper than conventional ones. There will be greater savings when used for mass-construction, Prof. Menon stressed. Aside from the savings and speed of construction, the buildings are subjected to lesser earthquake forces. This is because of their lighter weight.For the floor/roof, the panels are placed over the vertical wall panels and the top skin of every third cavity is cut open. Steel reinforcement is placed in these cut cavities before being filled with concrete. The concrete-filled cavities tend to behave as hidden beams. The panel is then covered with a 5-cm thick concrete topping.Since the panels have a smooth finish, the need to plaster them (as in the case of brick walls) does not arise. The total weight of the building (dead weight) is reduced substantiallyAccording to the IIT researchers, tests conducted have shown that GFRG panels reinforced with concrete are also capable of resisting lateral loads caused by earthquakes. During an earthquake or strong wind, buildings tend to sway and the walls are subjected to enormous loads exerted laterally.The Building Material & Technology Promotion Council (BMTPC) has approved GFRG for construction in India.Piramal realty fund to invest Rs 200 cr in two projectsIndiareit Fund Advisors, the real estate private equity arm of Piramal Enterprises, is to invest Rs 200 crore in two separate residential projects in Mumbai and Pune.The first transaction will be from its recently closed Rs 400 crore Mumbai Redevelopment Fund, which will pump in Rs 100 crore in a project being developed by Omkar Realtors in Bhoiwada, Central Mumbai. Spread across over 17 acres, it will have 25 lakh square feet of residential space.The second transaction of Rs 100 crore will come from its Indiareit Domestic Scheme IV, which has a total corpus of Rs 900 crore.The fund has closed a deal with Pune-based Marvel Group, which has already delivered 1.3 million sq ft (16 projects) and has another 15.3 million sq ft (38 projects) under construction.Indiareits investment is tied to a basket of pre-identified city-centric projects across Pune, Bangalore and Mumbai that are in various stages of construction and delivery.Khushru Jijina, Managing Director, Indiareit, said: Capital is scarce and our understanding of the real estate space and our resultant ability to add value, allows us to create rewarding partnerships with developers in projects, where both the demand feasibility and the execution capability are already established.

Indian Hotels moves Court to restrict Delhi civic body from initiating auctionThe ownership saga of the iconic Taj Mansingh Hotel has taken a new twist. Indian Hotels Company (IHCL), which manages the Taj Mansingh, has filed an injunction suit in the Delhi High Court, even as the New Delhi Municipal Corporation (NDMC) is gearing up to invite bids for auction of the property.The Group in a statement said that it was doing so to protect its position, but refrained from giving any more details on the grounds that the matter is nowsub judice.However, those tracking the sector said, this could be to pre-empt the bids being invited by the NDMC for the property.The auction was being keenly watched by the other majors in the sector, considering the rare opportunity of a hotel in a premium location like Lutyens Delhi being up for grabs. The Sahara group, Oberoi Hotels, in which Reliance Industries has a stake, and several other Indian and international hotel players were reportedly keen to bid for the hotel.The NDMC Board was planning to meet next week to finalise the terms and conditions of the open auction. IHCL will have the first right of refusal but will have to match the highest bid in the auction.When contacted, NDMC chairperson Archna Arora said that she was not aware of the case as yet.Taj Mansinghs lease for the property ended on October 2011.The Group had got an extension for a year in September 2012. Taj has been operating the hotel on the NDMC land for 33 years.However, when extending the lease in September 2012, the NDMC Board also decided to complete the auction process within a year.Indian Hotels Corporation was earlier paying 10.5 per cent of the gross revenues annually as rent but this was increased to about 17.25 per cent of the gross revenues for the extension period.Taj Hotels officials have maintained that the company had equity participation in the project considering it was bare shell and the hotel major had put in money to build the property.Our Mumbai Bureau reports:Indian Hotels Company has invested approximately Rs 129 crore over the last 33 years, to position the hotel as an iconic property and to maintain it to international standards.IHCL was responsible for the operations and maintenance of the hotel, and said it has paid around Rs 293.32 crore as license fee over 33 years to the NDMC.IHCL has prayed that the court pass a decree of permanent injunction, restraining the defendant...from giving known or unknown decision to conduct an auction.For the last two years, IHCL has been paying the increased licence fee. The return on investment has amounted to Rs 293.32 crore, officials said.According to market estimates, the Tata's earn Rs 150 crore annually in revenues from the property, which is located at a prime spot in Lutyens Delhi.Office space demand grows, Amazon scouts for 3L sqftCHENNAI: The world's largest online retailer Amazon.com is set to double its operations in Chennai. The company is looking to lease out an additional 3 lakh sqft of office space in the city to expand its operations in the city. The company currently has a development centre here which also deals with the company's e-book reader kindle, employing close to 5,000 people.

"Amazon andIBM Dakshare looking for additional space in Chennai," sources said. Amazon officials could not be reached for a comment.

Over the last few months, Chennai has seen an increase in the demand for requirements of office space, primarily by IT companies, and this would add to the list of several IT deals, Mind Tree's 175,000 sqft space at Ramanujan IT City (SEZ) Taramani, being the largest.

Chennai office market has witnessed nearly 3.5 lakh sqft of absorption in January and March, 2013. Some of the significant transactions include Synergy AKDR Building on OMR of 30,000 sqft, Episource Prince Info Park on OMR of 35,000 sqft and Sashun Bascon Towers at Nungambakkam for 22,000 sqft. The rental values across the market remain stable compared to December 2012.

"If this trend continues along with a good conversion rate, the commercial market is expected to show some intensified activity with increased level of absorption in the just commenced fiscal year," a report from real estate consultancyRECS Groupsaid.

Investment transactions, more particularly residential investments are on the rise. January - March saw several multi-crore investment transactions like VGN's acquisition of the 1.5 acres of land at Nungambakkam fromTatas, Ceebros' acquisition of Atlantic Hotel, a prime property at Egmore.

The retail front too saw heightened activity with the opening of city's largest mall, Phoenix Market City at Velachery, even as others like Prestige Forum Vijaya Mall at Vadapalani and the PS Group's mall at Velachery are in the pipeline.Jayalalithaa announces residential projects for Tamil NaduTamil Nadu chief minister JJayalalithaaon Thursday announced a series of residential projects across the state, including the construction of 5,000 houses in and around Chennai and the setting up of an integrated satellite township near Madurai Airport.

Making the announcement in the state assembly, the chief minister said a 1,500 ten-storey apartment will be constructed atSholinganallur in Chennaioutskirts at a cost of Rs 612 crore using pre-fab technology for the low, medium and high income group families. A total of 844 houses would be built at seven places in and around Chennai at a cost of Rs 371 crore, besides 3,500 new apartments in the city and other districts at a cost of Rs 280 crore in the place of existing dilapidated apartments.

Theproposed satellite townshipproject in Madurai will come up on 586.86 acres and will be located inThoppur and Uchapatti villages, about 15 km from the temple city on the Madurai-Tiruneveli four-lane highway. Jayalalithaa said the township, to be implemented using the State Housing Board funds, would in all have 19,500 plots. "Of this, 14,300 plots will be allocated for low income group, 2,500 plots for middle income group and 750 plots for high income group and 1,950 plots for economically backward sections," she added.

Jayalalithaa said the township would have all the basic amenities to be created at a cost of Rs 120 crore. "All the basic facilities like roads, drinking water, sewerage, street lights, rain water harvesting system, parks, besides a school complex, police station, post office, primary health facility and developed plots for industry,"Online property sites sizzle as top choice of home seekersWant a house on rent? Visit an online property site which would help you rent a property without any middleman.

According to experts tracking the realty sector, sites such as Magicbricks.com, 99acres.com and makaan.com are fast-becoming the choice of consumers looking for renting a property, as such sites let them directly connect with the owner and save time and money. Besides rentals, these sites also offer primary sales (new apartments under construction or ready to move in) and secondary sales of properties.

Though the share of online property sites in the overall property business in the country is still a miniscule one per cent, analysts expect this segment to grow to 15-20 per cent in a few years.

Advertisements in the realty sector, including the ads by such property portals, went up 14 per cent in print media and three per cent in the TV space in 2012, compared to 2011, according to data by TAM.

These portals are also increasingly becoming a tool for research on buying, selling and leasing residential or commercial properties in many parts of the country. According to industry estimates, people in the age group of 30-45 years do most searches and the the property price range varies from Rs 50 lakh to Rs 1 crore.

Digital media is increasingly being used for fact-finding and initial level of research. But since buying a property is a high-value decision for many, it will take time, may be another five years, before we see a huge number of transactions happening through the online medium, said Sanjay Dutt, executive managing director-South Asia, Cushman and Wakefield, a real estate consultancy.

He said portals such as Magicbricks and 99acres received tremendous hits, but maximum were for renting properties. It is definitely a fast-emerging channel of sales and is expected to grow 15-20 per cent every year, Dutt added.

Harinder Singh, managing director, Realistic Realtors, said the online property segment had great potential and would grow very fast in the coming times. There is a huge scope for this business model. It makes decision-making faster. In the next three-five years, the government is expected to come out with a set of regulations. And if everything goes well, this miniscule share of one per cent can increase to 15-20 per cent.

The portals are mainly driven by revenues through advertisements, commissions from developers or brokers and funding from private equity funds.

Initially, when such online portals had started, there was very limited information available and customers were not comfortable in taking decisions on that basis, said Manish Mehta, vice-president of property brokerage IndiaHomes. However, now we have quality information, with latest updates / launches, more and more people are researching through these tools. The chances for closure of deals through online will increase with time, he added.

However, there are many challenges that need to be overcome before such sites establish a strong foothold in this industry. According to experts, the main challenge is buying the consumers confidence and the need to have more localised information, which is currently given by brokers operating in that area. These sites offer services only in select cities now. Secondly, the system needs to be more organised.

The lack of benchmarking in such sites is another problem. Moreover, enquiries by potential customers are answered by telemarketing people, not real estate professionals, who can only give limited information to people, an expert tracking the sector, said.

Marriott to introduce Edition Boutique HotelsMarriott is planning to introduce its premium Edition Boutique Hotels in India soon.Edition brand has been created in partnership with boutique hotel pioneer Ian Schrager. Each hotel has its rare individuality, authenticity and unique ethos reflecting the best of its location, Arne M Sorenson, President and Chief Executive Officer, Marriot International, toldBusiness Line.The group has identified New Delhi to set up its premium hotel brand Edition- India. We plan to set up our first Edition Boutique Hotel in India in the next few years, Sorenson said.The hotel group in the last couple of years, through management contract basis, has introduced brands such as Courtyard, Fairfield, Marriott and Renaissance in India. We are to open The Ritz-Carlton and JW Marriott in India later this year, Sorenson.Driven by our customers, along with different lodging segment, we are planning to concentre on setting up more Marriott Executive Apartments (MEAs) in select cities, he added.The hotel group has 3,700 properties in 74 countries and has reported revenues of over $12 billion in fiscal year 2011. Sorenson said, Despite gloomy economy in US and Europe, we grew by 6 per cent in 2012 and expect to perform at similar level in 2013 as well.According to Rajeev Menon, Area Vice-President, South Asia and Australia, Marriott Hotels India, We expect to grow from 15 to over 50 hotels across seven brands, creating 8,000 new jobs in the next three years.India has about as many branded hotel rooms as Orlando, Florida in the US. So, we feel very confident that theres plenty of room for growth in the country, he added.Talking about Bangalore market, Menon said, The city has tremendous potential for business and hospitality growth. We have made an obvious choice to introduce our signature brand by opening Bengaluru Marriott Hotel Whitefield.The property in Bangalore is Indias fifth and Bangalores first, this property embodies the brand philosophy of inspiring and energising the performance of its patrons. We foresee this property growing to be the next community centre of Whitefield, he said.Realty projects on a roll, despite slowdown"Save lakhs by buying a pre-launch flatexcellent location, reputed builder, metro connectivity"... "Holi offer: Plot in just Rs 12 lakh before Holi, rate revising soon"... "Last chance to grab personal suites, pay 15 per cent now, no EMI till 18 months"... "Most awaited project launching at Rs 6,550 per sq ft, next rate Rs 7,550 after this week, book profit". These are among the hundreds of promotional messages which have flooded the inbox of mobile phones over the past few months, more so since the beginning of 2013, after a longish lull. But even as developers are on a spree to launch residential projects, it may not mean the end of trouble for the sector.

While analysts are still crunching numbers on launches this year, estimates suggest the first three months saw record growth in new realty projects including from the big builders in investor-driven markets of Delhi and Mumbai.

There are 492 new residential projects on offer in Mumbai and surrounding areas, of which 122 are ready to move in, according to property listing website 99acres.com. In Delhi, there are 539 new projects, Bangalore 536, Chennai 387, Kolkata 212, Pune 331, Ahmedabad 124 and Hyderabad 352. Ready-to-move-in house numbers are low across cities at 19 in Delhi, 46 in Bangalore, 43 in Chennai, 7 in Kolkata, 23 in Pune, 11 in Ahmedabad and 36 in Hyderabad.

DLF, Emaar MGF, Wave Infratech, Godrej Properties, Tata Housing, Lodha group, Paradise, Amrapali and Prestige are among the long list of developers to have launched projects in these markets in the last few months. Another leading developer, Unitech, is expected to launch a project soon. Bigger players and high-end launches have dominated the market this year as against smaller companies (who lack marketing muscle) announcing most of the projects last year, according to industry experts.(RISING HIGH)

Sanjay Sharma, managing director, Qubrex, a real estate research and brokerage firm, says the scenario now is quite similar to 2008-09 when the economic slowdown had started. As at that time, new projects have picked up pace, though, ready-to-move-in is slowing down. But, while in 2008-09 realtors leaned towards affordable housing in a big way by cutting size to lower the ticket price, and delayed high-end launches to increase the stickiness for investors, now developers are continuing with the premium and luxury projects despite a slow secondary market, according to Sharma.

The lure of lessHowever, even as the ticket price for residential real estate projects has remained high, the upfront money to be paid by the buyer is rather low. A broker cited the low "floor price', referring to the booking amount, as a definite attraction in the market these days. When it comes to payment, a 20-80 model is the buzz where the buyer pays 20 per cent or less initially as advance and the remaining money is paid only when the flat is ready.

According to Jigar Shah, head of research, Kim Eng Securities, a leading Asian brokerage, investors will chase what gives them best returns. While a lot of real estate investment is need-based in India, Shah talks of new projects launched by several companies in the past 18 months and the concept of pre-buying of residential units that have made it an investors' market more than ever before.

The concept of builders keeping property prices on hold till demand is established through pre-launch offers is also picking up, keeping the primary realty market hot. While the Lodha group tried the IPO-allotment like strategy to allot flats in Mumbai, Tata Housing opted for a lottery system to sell houses at Dwarka Expressway that joins Gurgaon and Delhi. Godrej Properties chose the first-come, first-served route for a Gurgaon project recently, and as the number of applicants far exceeded the number of flats, the final price was fixed at Rs 5,500 per sq ft, against market expectation of Rs 4,500 per sq ft.

However, despite the buzz around launches, there's a definite sign of slowdown. A leading developer is learnt to be offering inaugural discounts even weeks after the launch, a broker says without naming the company. Usually, this builder sells within hours of the launch of a project, he adds.

After a challenging year for the real estate sector largely due to economic factors and mispriced projects, by the end of 2012, a general confidence in the economy was gaining ground with the realisation that projects would only be successful if they were launched at lucrative prices, says Samir Jasuja, founder and chief executive, PropEquity, a real estate consultancy. "That's been the basis for majority of the launches in 2013," Jasuja adds.

But Jasuja agrees that the luxury segment has been the focus for some developers both due to its better project margins and demand. "This segment has generally done well in prime micro-markets where land availability is low and if the developer's profile and specifications of the project are good."

Harinder Singh, managing director, Realistic Realtors, a brokerage firm, attributes the large number of launches to developers getting more licences for projects this year. Many say the spike in launches could also be a strategy by the cash-starved developers to raise fresh money.

Industry experts agree some percentage of developers may be up to that, using the fresh money to clear their backlog, but it is not true for the industry overall. An executive of a leading real estate firm says the market has started opening up with the softening of interest rates. "Developers want to encash on this demand from consumers, which is why more projects were launched this year."

Buyer's marketShould you be investing in a house then? Singh of Realistic Realtors says, "It is a good time to buy property." "The market has potential and we could even achieve 20-25 per cent growth this year," he adds.

Also, developers are now launching products which are more aligned to the current market conditions, according to experts. "Before 2009, developers seized every opportunity and launched hotels, SEZs and other retail ventures. Subsequently, they had no cash flow and again moved towards residential segment to generate cash flow," Sanjay Dutt, executive managing director (South Asia), Cushman and Wakefield, says.

"Overall, big players who were earlier over-exposed are now getting their act together and moving in the right direction," Dutt says. DLF, perhaps, is a case in point. Among others, the country's largest realtor has been trying to reduce its mounting debt and has somewhat succeeded in doing so by selling its non-core assets. From a peak of Rs 23,000 crore, its debt is down to Rs 18,000 crore, and is expected to reduce to Rs 15,000 crore over the coming months.

The year is likely to be good for not just those who are scouting for new houses but also for those awaiting deliveries. It is expected to see one of the largest handing over of projects with about 517,365 units in 15 cities, according to data from PropEquity. This committed supply is even higher than the actual deliveries for the preceding two years from these cities. In 2012, about 291,000 homes were delivered, against 172,000 in 2011.

However, not everyone is so optimistic of the future and some say handing over of nearly half of these homes would be delayed. Sounding a cautionary note, Anshuman Magazine, chairman and managing director, CBRE, South Asia, says, "Moving market is a good sign, but the overall sentiment is still very low."

Also, banks came to the rescue of the real estate sector indirectly in 2008-09 by giving loans to the buyers who in turn passed it on to the builders, points out Sharma of Qubrex. "This time around if things go wrong in the primary realty market, it would be beyond repair."844 multi-storey apartments in city to be built with pre-fab technologyAnnouncing several projects of the Tamil Nadu Housing Board in the state, Chief Minister J Jayalalithaa said most of them would be constructed using pre-fab technology.Stating that the pre-fab technology is already in use in the cities like Delhi, Mumbai, Bangalore and Hyderabad, Jayalalithaa said this technology reduced the duration of the construction up to 25 per cent and the cost by 10 to 15 per cent.Parts of the building are manufactured in factories and used in the construction after curing through water. Among the projects announced, the number of houses that are to be built in each of the nine districts and the cost involved is as follows: Chennai and its surrounding areas (seven places - 13.80 acres - 844 multi-storey apartments - Rs 371.05 crore), Kancheepuram (two places - 22.70 acres - 1,500 multi-storey apartments- 32 plots would be developed - Rs 303.80 crore), Coimbatore district (two places - 3.90 acre - 344 multi-storey apartments - Rs 50.16 crore), Erode district (two places - 12.15 acres - 468 multi-storey apartments - Rs 59.27 crore, Salem district (36.20 acres - 120 houses - Rs 13.27 crore), Krishnagiri district (10.50 acres - 258 multi-storey apartments - Rs 19.20 crore), Virudhunagar district (three places - 32.50 acres - 722 houses - Rs 73.10 crore), Dindigul district (two places - 1.03 acres - 35 houses - `2.68 crore), Tiruchi district (two places - 3.09 acres - 104 multi-storey apartments, 27 houses - Rs 25.92 crore)The Chief Minister also said of the 1.29 lakh apartments and houses built by the Tamil Nadu Slum Clearance Board, most of them were in a dilapidated condition.The people in these buildings were living in fear. As such, the government has decided to demolish the old buildings and construct new ones.In the first phase, 3,500 multi-storey apartments in Chennai and other districts that are in a state of ruin would be rebuilt in the current financial year at a cost of Rs 280 crore. The place and the number of apartments to be built are: Dr Radhakrishnan Nagar (480 houses under Ranganathapuram scheme, 120 houses under Parthasarathy Nagar scheme), Perambur constituency (392 houses under Sathyavanimuthu Nagar scheme, Egmore constituency (288 houses under Nehru Park scheme and 32 units under Pillaiyar Koil Street scheme), Chepauk constituency (304 units under Lock Nagar (Navalar Nagar) scheme and 708 houses under Ayodhya Kuppam scheme), Saidapet constituency (136 houses under Kotturpuram scheme) and Mylaopre constituency (42 houses under Andimanya Thottam scheme and 48 units under Pallakkumanyam scheme).Coimbatore district (246 apartments under Aduthotti scheme), Tiruchi district (587 houses under Tiruchi-Beechankulam scheme and Nagapattinam district (117 apartments).

Madurai Satellite Township among new TNHB projectsChief Minister J Jayalalithaa on Thursday announced a number of housing projects for the poor and middle class, including a satellite township near Madurai, 1,500 multi-storeyed residential apartments and 4,422 houses in nine districts.Making a suo motu statement in the State Assembly, the Chief Minister said considering the increasing need for housing facilities in Madurai district, an integrated satellite township with all infrastructure facilities would be established 15 km from Madurai airport.The satellite township would be built in 586.86 acres of land owned by Tamil Nadu Housing Board in Thoppur and Uchapatti villages on Madurai-Tirunelveli road. It would comprise 19,500 plots, of which 14,300 are earmarked for low-income families, 2,500 for middle-income families and 750 for high-income families. Besides, 1,950 plots would be set apart for economically weak sections.Apart from basic amenities like roads, drinking water and drainage facilities, streetlights, rain water harvesting and parks that would cost `120 crore, the township would have schools, commercial complexes, a police station, post office, primary health centre, fire service and rescue station and improved industrial sites. TNHB funds will be used to build the township.The Chief Minister also said 1,500 10-storey apartments would be built under the self-financing model in land owned by TNHB in Sholinganallur near Chennai at a cost of `612 crore, using pre-fab technology. Apart from these, 1,630 individual houses and 2,792 multi-storey tenements would be constructed in nine districts in TNHB land, at a cost of `918.45 crore. Besides, 32 plots would be developed in these districts.The works on these apartments would be completed within 24 months.Old housing colonies to get a new lease of life in ChennaiWith a view to providing aff o r d a b l e homes for the middleclass in the city, who have been pushed to the margin by the realty boom, the state government on Thursday announced a 1,500-apartment project at Sholinganallur.The Tamil Nadu Housing Board would use pre-fabricated structures to speed up work. Such structures are already in use in Delhi, Mumbai, Bangalore and Hyderabad. While much of the work would be carried out in workshops, machines would be used to erect the structures at the site. They would be fixed using quick-fix solutions. It would reduce time consumption by 25% and cost by 10% to 15%. The government has sanctioned Rs 612 crore for the project, chief minister J Jayalalithaa said in the assembly.To be constructed in multiple towers, each having 10 floors, the project would have separate enclaves for lower, middle and high income groups, she said. Jayalalithaa said buildings up to 24 floors high could be constructed using pre-fab technology.Apart from the Sholinganallur project, she announced construction of 844 apartments in seven locations around Chennaiat a cost of Rs 371 crore. The government has also decided to redevelop 3,500 apartments by demolishing dilapidated ones in and around Chennai, Trichy, Coimbatore and Nagapattinam. Poor maintenance of buildings and salinity in the air have led to corrosion of steel rods used for reinforcement in many old buildings constructed by the housing board. People living there have a harrowing time during rainy season. The government has earmarked Rs 280 crore for redevelopment of these buildings. Under this scheme, 600 apartments would be constructed in Radhakrishnan Nagar, 392 in Perambur, 320 apartments in Egmore, 1,012 apartments in Chepauk area, 136 apartments in Kotturpuram and 90 apartments in Mylapore. In Coimbatore, 246 apartments would be redeveloped. Similarly, 587 apartments would be constructed in Trichy and 117 in Nagapattinam. Earlier this year, Jayalalithaa had announced that the government would construct 6,254 apartments in Chennai at a cost of Rs 1,740 crore to meet the demands of growing population in the city.Accordingly, the existing 2,238 apartments in Peters Colony and Lloyds Colony (Royapettah) and Todhunter Nagar Phase I and II (in Saidapet) would be demolished and new apartments would be constructed in their place. In the first phase, government plans to construct 2,522 rental apartments for government employees and 1,770 apartments under self-financing scheme for outright sale to general public.BILLED TO GROWIn a major boost to housing sector, the govt announced 1,500 homes in Chennai and satellite township in MaduraiIN CHENNAI1,500 flats at Sholinganallur in several 10-storey blocksMethod: Buildings to be constructed using prefabricated structures to cut down on time and cost Total cost: 612 croreIN MADURAISatellite town to be developed on 586 acres near the Madurai airport Total cost: 120 crore Total no of plots: 19,500DLF sells wind energy projects for Rs 240.9 croreReal estate major DLF Ltd has announced the sale of its wind energy projects in Tamil Nadu and Rajasthan to two separate entities for Rs 240.9 crore.The sale is a part of its ongoing strategy to exit non-core business to pare debts.DLFs DLF Home Developers Ltd has signed an agreement with Tulip Renewable Powertech to sell the 34.5 megawatt (MW) Tamil Nadu project along with related assets, liabilities and long-term loans for Rs 188.7 crore.While the 33-MW Rajasthan windmill will be sold to Violet Green Power for Rs 52.2 crore, the company said in a filing to the BSE.Earlier, DLF had sold 150 MW windmill in Gujarat to Bharat Light and Power for Rs 282.30 crore.Now, the company is left with only Karnatakas windmill having a capacity of 11 MW.The transactions are in line with the DLFs objective of divesting its non-core assets, the company said. In August last year, DLF had sold 17 acres in Mumbai to Lodha De`velopers for Rs 2,727 crore.In December last year, it announced sale of Amanresorts back to founder Adrian Zecha for about Rs 1,650 crore, while in January this year, it sold Gujarat windmill project for Rs 282 crore.DLF has been selling its non-core businesses in the last couple of years to focus on core real estate business and cut its huge debt, which stood at Rs 21,220 crore at the end of December quarter of 2012-13 fiscal.The company had earlier said that it plans to reduce debt by around Rs 5,000 crore by March.On Thursday, DLFs shareholders approved the sale of fresh equity shares to meet market regulator SEBIs norms of 25 per cent minimum public shareholding in a listed company.DLF shares fell 0.98 per cent to close at Rs 232.95 on the BSE.Poor urban planning, public facilities pull down ratingChennai may be one of the few cities to have a mayor elected directly for a five-year term, but lack of urban facilities and planning bring it down. Its citizens scored Chennai higher than most on empowered and legitimate political representation but among the worst on urban planning and design and capabilities and resources.

In its first Annual Survey of India's City-Systems , conducted by Bangalore-basedNGO Janaagraha, 11 cities were assessed on four parameters urban planning and design, urban capacities and resources, empowered and legitimate political representation , and transparency, accountability and participation. These cities were compared with New York and London as the international benchmarks.

Chennai comes in second from the bottom with a score of 2.2 on 10 for urban planning and design (Pune with 0.7 is last) because of the lack of monitoring of sub-local and neighbourhood planning. With the exception of Delhi, no city has Ward Development Plans. The absence of guaranteed land titling, weak institutional structures such as lack of single base map across civic agencies and lack of authority of urban local bodies for approving land-use change are factors that account for weak urban planning and design, the survey says.

However, the fact that the mayor is elected for a five-year term has raised the score for political representation , with Chennai being only one of three cities in the country with a mayor who is directly elected. Transparency, accountability and participation gets a score of 2.9. Most cities fare very poorly in the realm of public accountability due to the absence of a local government ombudsman , and audit mechanisms.

Rapid urbanization has forced government agencies to look for quick-fix measures to meet the growing infrastructure demand. But little attention is being paid to sustainable development of cities, which are seeing a surge in migrant population. Besides Delhi, the only cities focusing on sustainable development are Kolkata, Jaipur and Hyderabad, says the survey. Delhi and Kolkata are the only cities that have made a provision for ward development plans and metropolitan planning committees, respectively.

"These are crucial to sustainable development of cities. The city system in Surat and Ahmedabad, which have witnessed massive development in the last decade, is not ready for the future,'' said Srikanth Vishwanathan of Janaagraha. India needs to learn from New York and London where emphasis is on planned development, says the survey. While assessing the cities on 107 pointers - divided under four main heads - the survey found that a majority of local bodies faced a serious fund problem and that the political leadership was not strong enough to get the work done. Jaipur was ranked first in terms of political leadership, but due to lack of resources and planning , no major work could be executed. "What is the point of having a strong leadership without any resources. There is a need to decentralize power, especially financial, and empower local bodies. Civic agencies need to widen their tax base so that they can spend more funds,'' said Vishwanathan. Indian cities need to learn from New York where the capital expenditure per capita is 21,322 (London 15,177) compared to Delhi's 2,316, Mumbai's 4,079 and Chennai's low 1,000. The survey also looked at quality of life. "We checked with people on what they think about the cities. Transportation and clean drinking water were the prime concerns. While Surat and Ahmedabad were rated as the best cities, Kanpur was described as the worst. When it comes to transparency, other cities have a lot to learn from Hyderabad, which is the only city to have area sabhas,'' said Swati Ramanathan, cofounder of Janaagraha.Luxe beckons: Builders scout for hefty pocketsFor many, it's a mystery how high-end apartments and villas are sold in the city. The type of advertisement campaigns mostbuildersresort to in marketing medium and low-budget projects don't often work in this case.

Apartments and villas priced at 3 crore and above are sold differently as the moneyed don't go by mass psychology, says Jayant Hemdev, business director of real estate consultancy firm Hemdev's.

"Builders adopt a customized approach in identifying high-networth individuals (HNIs). They identify potential clients from among major depositors in banks. Some like ICICI and HDFC, with their own brokering divisions, play a key role in marketing expensive apartments," says Hemdev.

With builders like VGN, Ceebros, Akshaya and Jain Housing concluding five major land deals for developing luxury apartments in the past few weeks and TVH and Khivraj set to launch two projects in Kotturpuram soon, a host of premium apartments are set to be up for grabs. Many have already started scouting for potential buyers.

Many developers build a huge data base of old customers as well as potential buyers and alert them whenever a new project is launched.

T Chitty Babu, MD of Akshaya which launched a luxury apartment project on the OMR recently, sent his team to reach senior executives of all corporate houses in the vicinity. "We also approached leading clubs. At times, it takes several weeks between the first contact and the conclusion of the deal," he says.

P V Sanmugam, MD of city-based Kgeyes, says HNIs are choosy about neighbours. "When a CEO of an MNC wanted to buy an apartment from us in Poes Garden a few years ago, she sent a broker to do the groundwork. She showed interest after realizing the other two buyers were top executives of MNCs, whom she knew. Many HNIs operate through brokers they trust. Others approach us through common friends. Seldom do they approach us directly," says Sanmugam.

Since understanding the market is as complicated as knowing the psyche of potential buyers, most builders arrange pre-launch sales for a select few. It not only gives them a head start with some assurance on funding, but also helps the builder know if he has the right product mix in terms of size. It helps gauge the public feedback on pricing too.

Though there is no thumb rule on how much a builder offloads in a pre-launch, it is normally in the region of 20-30%. They sell the balance at a higher price after the formal launch. The difference is often 10%, says Hemdev.Land transfer plan finds few takersThegovernmentintroduced transferable development rights(TDR) to acquire land for infrastructure projects without paying money to the property owners, three years ago but the scheme has found few takers.

Chennai Metropolitan Development Authority issues TDR certificates to land owners who can use them to transfer building rights to other properties. They also have the option to sell them, like share certificates, to other parties, including builders.

A grand total of 14 people have opted for TDR in the city so far. Nine of the 14 had their land acquired for Metro Rail and others lost their properties to road and other infrastructure projects.

Though CMDA permits various government agencies to use TDR for civic projects like setting up bus stops, laying water lines, drains, and electricity lines, few agencies have offered the scheme.

However, the public works department has now applied to CMDA to permit it to use TDR for widening of the Veerangal Odai drainage course. Officials said there was no need to use TDR for other projects under the Centre's flagship JNNURM programme.

"If need arises, we will use TDR for other waterways as well. PWD is restoring major waterways like Otteri Nullah, Virugambakkam-Arumbakkam Canal, Buckingham canal and the Cooum river under JNNURM," an official said.

Restoration of the waterways is part of flood-alleviation measures being carried out at an estimated