Top 5 reasons to invest in Dwarka Expressway

Dwarka Expressway has created much hullabaloo in the real estate market of the Delhi-NCR. Top real estate developers have assured and re-assured about putting your money in this eight-lane expressway.

Also known as the Northern Peripheral Expressway, it covers areas such as Bijwasan, New Palam Vihar, Kherki Daula and finally meets the NH-8.

According to reports, Dwarka Expressway had done exceedingly well in the Oct-Dec FY2012-13 quarter with its proposed infrastructure.

Why should you invest?

Maximum Price Appreciation: Alimuddin Rafi Ahmed, MD of ILD opines that the Expressway falls in the R-Zone in the Gurgaon Master Plan-2021 which means in the coming years, the value will increase significantly.

Ideal for Investment Purpose: If you are an end-user then plan to invest in someplace else. Dwarka Expressway is excellent for people who wish to invest with a horizon of 3-5 years. Like Sohna Road in Gurgaon, the Expressway will be in proximity with commercial areas in sectors 105, 106, 109, 110, 110A, 111, 112, 113 and 114. Sectors 100 and 101 will be used for public utilities.

Location Benefit: Its close proximity to Delhi and IGI Airport will always ensure a quality price.

Better Options for Lesser Amount: Because the stretch is still under construction, there are more chances of getting a good size apartment as compared to other areas in Gurgaon. Rakesh Kaul, CEO, Experion Developers Pvt Ltd. in Times Property Virtual Expo mentioned “Look at parking your money in sectors 108, 109 and 111 along the Dwarka Expressway to gain almost 50 per cent returns ....” This stretch will soon be at par in investment potential and will also surpass Sohna Road in appreciation, he added.

Easy Connectivity: As per the new Master Plan, there will be a well-built 100m-wide roads connecting the area to the Metro corridor and the proposed diplomatic enclave. The 18km Expressway will be close to some SEZs that are coming up near Kherki Dhaula. This Expressway will reduce the travel time of commuters from west Delhi. It will be parallel to the NH8 till it merges ahead of the IFFCO Chowk.

Source: PropertyatNeoDevelopers.Wordpress.Com

Shared office concept gaining popularity

Shared office spaces provide opportunities for many entrepreneurs to set up their own office at an early stage in their business in a cost effective manner.

In the last one decade, the concept of shared office space (also known as serviced offices or business centers) has become quite popular in the city. With entrepreneurship becoming big and start ups gaining momentum, there is a significant rise in the demand for such spaces in Chennai today.

A business center is a professionally managed commercial facility that offers end-to-end business infrastructure for short to medium-term duration. One can choose from a wide range of flexible options that suits one's needs. Based on specific requirements with respect to space and infrastructure, people can enjoy the advantage of customized, unbranded serviced offices. The business centers offer tenants a private, often glass-walled office on a floor, which is also occupied by other firms. Amenities such as cafeteria, boardrooms, meeting hall and reception are shared between the firms. An organization or an individual entrepreneur can rent a desk, if they don't need or can't afford a huge office of their own.

According to Satish Chander Narayanan, associate director, investments, Cushman & Wakefield, "It is increasingly becoming a preferred choice for companies that operate on a small scale. For large scale firms, these help as temporary solutions until they move into their permanent facility. Additionally, these spaces were high on demand during the recent floods and almost all business centers were packed with more than their usual capacity during the months of December, and January."

The occupancy rates are also high for this kind of property. Geethapriya R, general manager, Regus says, "People are looking at cost effective offices with good infrastructure, as real estate costs are escalating. Hence shared offices are being looked at as a viable option as it doesn't involve infrastructural cost and initial investment. The prospective clients range from start ups to Fortune 500 companies. There is surely a good demand in this office space category."

Sathish adds, "Over the last few years, a change is being seen in the attitude towards a serviced office, which initially posed a challenge for firms that were used to operating in their own office. With real estate costs going up, the need for a serviced office is seen as advantageous to a tenant who might be testing the waters with his new business. Besides, business centers have come in handy to provide long-term customized solutions for a number of firms who prefer operating from a serviced office than getting to invest in a full-fledged office space which would warrant them to invest in interiors and pay a significant amount as advance towards the premise. It isn't surprising that there are firms which have been operating in these serviced offices for more than five or six years, though they have grown substantially."

Puneet Murthika, senior business development executive, Lema Labs says, "Shared office spaces allow the company to enter a market without making a big financial commitment in an area that's often unfamiliar. At the same time, employees get a wonderful and professional working environment. We look for work spaces that allow us to innovate and motivate us to work better. Shared offices provide such a platform.”

The story is set to be better with demand rising from domestic and international players. "For firms that place a lot of importance on convenience and flexibility, these spaces are being much sought after. With flexible options like single seat occupancy, many start-ups are also preferring to go with a cost per head arrangement." says the spokesperson from Doxa Business Center.

"Features such as cost being calculated per workstation, convenience, ease of accessibility, flexibility, lesser planning, lower capital investment, hassle-free maintenance, professional reception services, high-speed broad band and single in voice attract entrepreneurs as they allow them to concentrate on their work. It also gives room for scalability. These are valued highly by emerging enterprises," adds Puneet.

Source: PropertyatNeoDevelopers.Wordpress.Com

Private equity investments in realty rise 40 per cent to Rs 3,840 crore in March quarter

Home sales in the top Indian cities may not be growing at a brisk pace but private equity investments in real estate rose 40% year-on-year in the quarter to March at Rs 3,840 crore. Of this, 48% or Rs 1,870 crore went into the residential segment, according to a report by property consultancy Cushman & Wakefield.

The retail real estate segment witnessed the second highest investment, accounting for 26% of total investments in the quarter since 2008 on the back of a single investment, where Singapore's sovereign wealth fund GIC bought the Viviana Mall in Mumbai from Sheth Developers for Rs 1,000 crore.

The commercial office segment recorded total investment of Rs 470 crore again in just one transaction where Blackstone invested in Salarpuria Sattva group's project in Knowledge City in Hyderabad.

In 2015, private equity investments from foreign as well as domestic funds in Indian real estate grew 72% over the previous year to Rs 25,680 crore, the highest since the peak of 2008. In 2015, 70% of the total investments went to the residential segment, followed by the commercial segment at 21%.

In the quarter to March 2016, investments in Mumbai increased 12 times from the corresponding quarter of the previous year to 44% (Rs 1,710 crore) of total investments. This was followed by Hyderabad, which got a 19% share with investments of Rs 720 crore.

The Delhi-NCR region got 12.5% of the investments at Rs 480 crore, though investments here were only in the residential space.

"Domestic funds have continued to invest and focus primarily on the residential asset class as developers raised funds to meet their growing funding needs for working capital, construction financing and refinancing of loans," said Sanjay Dutt, managing director-India at Cushman & Wakefield.

Dutt pointed out that the investments are being made mostly at the special purpose vehicle (SPV) level, amid a slowdown in residential sales over the past few years. Some of the large foreign PE funds such as Blackstone, GIC and Xander have sought to diversify their investment portfolios in India and are venturing towards the retail, mixed-use and hospitality segments apart from investments going into commercial and residential segments.

"This could be attributed to several opportunities arising across India wherein developers have been trying to raise capital by monetizing their distressed or non-core assets to reduce the high debt levels," he said.

The total number of deals closed during the March quarter increased 13% to 17 from 15 in the corresponding quarter of 2015. The average deal size increased 23% to Rs 230 crore. But unlike the year-ago quarter that saw investments only in residential assets, the quarter to March 2016 witnessed investments across asset classes.

In the residential space, financial services firm IIFL invested Rs 500 crore with Aristo Realtors in Mumbai through a structured debt transaction. KKR India Asset Finance put in Rs 150 crore with Sunteck Realty in Mumbai.

Dutt said the SPV level route continues to be the most preferred by domestic as well as foreign PE funds.

"However, it is observed that joint venture partnerships and strategic alliances route have picked up over the past two years, wherein more foreign PE funds, pension funds and global financial institutions have entered into such partnerships with their Indian counterparts and real estate developers," he said.

In the last few quarters, funds dedicated to specific asset classes have been set up through partnerships between builders and funds to invest in income generating commercial and residential assets besides the warehousing sector.

Source: PropertyatNeoDevelopers.Wordpress.Com

Office rentals up in Gurgaon, Bengaluru

Office space rentals have appreciated in Gurgaon and Bengaluru, while remaining stable in Mumbai. Noida’s information technology segment saw a marginal rise.

Corporates were seen pre-committing space in under-construction developments in three cities - Bengaluru, Gurgaon and Mumbai - due to the limited availability of investment-grade space at prime locations, said Ram Chandnani, Managing Director-Transaction Services, CBRE South Asia.

Bengaluru office rentals witnessed an increase of 2-6 per cent q-o-q across non-IT spaces in certain micro-markets during the January-March quarter.

Chandnani said sustained demand led to marginal rental appreciation across South Bengaluru and areas of Indira Nagar, Koramangala, Old Madras Road, Domlur and CV Raman Nagar.

The rise in rentals in Gurgaon was led by DLF Cyber City and Golf Course Road. Noida too witnessed a marginal appreciation in rentals the IT segment, led by high demand for space in certain quality developments along the Expressway.

In other micro-markets of the region, however, rental values remained largely stable.

According to Chandnani, in Mumbai, rental values of corporate real estate across remained largely stable during the first quarter of 2016, with a marginal increase in certain office districts.

The peripheral locations of Malad/Goregaon in the Western Suburbs were the exceptions that noted a slight quarterly increase due to increased occupier demand in quality IT projects.

Meanwhile, the city recorded capital value growth for non-IT space across most front office space locations in the first-quarter, said Chandnani.

“As seen in past years, the first-quarter of the year usually witnesses muted transaction activity as most corporate real estate occupiers’ use this time to strategise their plans for the year ahead,” said Chandnani.

Source: PropertyatNeoDevelopers.Wordpress.Com

7 bottlenecks that hold back affordable housing in India

Incentivizing developers to enter the affordable housing segment and including mass housing zones in city master plans are must.

Large-scale affordable housing in cities is the greatest necessity of urban India today. Because Indian cities have such a severe shortfall on this front, we are seeing the proliferation of slums and unorganized real estate. These are detrimental to planned growth of our cities.

Large-scale urban developments - the only way to create affordable housing in the required magnitude in our major cities - are becoming increasingly difficult due to lack of land parcels, congested transit routes, lack of finance, rising input costs and regulatory hurdles.

If we take a bird’s-eye view of the problems plaguing this sector, the vision of Housing for All by 2022 becomes a hazy one at best. It is vital that these issues are addressed on a priority basis so that a comprehensive framework can be established for ensuring the development of affordable housing.

On analyzing the bottlenecks that currently hold affordable housing in India to ransom, it emerges that any approach towards a workable solution will have to encompass these functions.

1.) Formulate guidelines for identifying right beneficiaries:

It is important to formulate guidelines that will identify the appropriate beneficiaries for affordable housing projects. This is critical, as the involvement of speculative investors in such projects defeats the whole purpose. The National Population Register and issuance of unique identities via the Unique Identification Authority of India will become crucial elements in identifying the right beneficiaries if they are linked with income levels.

2.) Innovate on micro-mortgage financing mechanisms to ensure a larger reach:

Effective financing through micro-mortgages by utilizing the reach of self-help groups (SHGs) and other innovative financing mechanisms can ensure that housing finance is available to large sections of lower income groups (LIG) and economically weaker sections (EWS). Flexible payment mechanisms should be put into place, as households in low-income groups typically have variable income flows.

3.) Incentivize developers to enter affordable housing segment:

Urban local bodies can develop guidelines by giving free sale areas, extra floor space index (FSI) and other policy-level incentives to real estate developers, thereby attracting them to develop affordable housing. Schemes for redevelopment and slum rehabilitation should be developed with incentives that generate sufficient returns for the developers, while simultaneously controlling the development density.

A cost-benefit analysis of regulations should be carried out from a development perspective to ensure that schemes to facilitate affordable housing development are actually realistic and feasible.

4.) Streamline land records to improve planning and utilization of land:

Adequate availability of land for housing and infrastructure can be ensured by computerization of land records, use of geographical information systems, efficient dispute redressal mechanisms and implementation of master plans. The central government and some state governments have already begun work on this front, but there is still a lack of required pace.

5.) Include mass housing zone sin city master plans:

Additionally, ensure that these zones are developed within a pre-determined schedule, accounting for the future requirement of affordable housing. Some cities have already dedicated zones for development of affordable housing in their master plans. This needs to be replicated in other cities and towns - with a sharp focus on development timelines.

6.) Deploy well-researched rental housing schemes in urban areas:

Authorities like the Mumbai Metropolitan Region Development Authority (MMRDA) have experimented with rental housing schemes in the past. However, these have not been very successful as a proper framework for such schemes was missing. The most visible limitations were that development of rental housing took place in farflung areas which are not suitable for affordable housing, and the lack viable means to identify the right end-users.

7.) Formulate policies for greater participation from private sector:

The private sector can play a big role in affordable housing, most notably in terms of providing technological solutions, project financing and delivery. Disruptive innovations on these fronts, with a specific focus on affordable housing, are the need of the hour. We need imaginative, workable solutions to reduce the costs of construction in the face of rising input costs. As construction costs account for a significant portion of the selling price of affordable housing units, savings accrued on the back of such innovations can immensely benefit the occupier. The author is chairman and country head, JLL India.

Source: PropertyatNeoDevelopers.Wordpress.Com

Office space absorption up 11% to 8.8 million sqft: Report

Backed by positive economic sentiment and business confidence, office space absorption during January-March quarter increased by 11 per cent to 8.8 million sqft across nine major cities, a survey said.

Office absorption leaped to over 8.8 million sqft, including pre-commitments of 8 lakh sqft, across nine major cities, upping the number by 11 per cent from October-December quarter, as per a report by Colliers International.

"This absorption was primarily derived by the traditional demand driver, technology sector. The growth is mainly backed by positive economic sentiment, business confidence index which increased by 5 per cent in January and the GDP forecast of about 7.5 per cent," Colliers India Senior Associate Director (Research) Surabhi Arora said.

Bengaluru remained the top contributor of the demand with 33 per cent share, followed by National Capital Region (Delhi, Gurgaon and Noida), Hyderabad, Pune and Mumbai.

"The majority of markets are enjoying this growth and overall office market sentiments are optimistic. We anticipate positive momentum in the coming quarter as the overall office leasing pipeline seems strong and is steadily growing," she said.

Arora further said positive economic growth coupled with increasing business confidence index due to government's proactive policy initiatives will be the factors influencing the demand for office space in the coming quarters.

Bengaluru witnessed a total office absorption of 2.65 million sqft, which is a 13 per cent jump from the last quarter.

IT-ITeS (also comprising technology startups and e-commerce companies) continued to remain the leading sector driving this demand with an 88 per cent share in overall absorption, it said.

NCR clocked an overall absorption of 1.42 million sqft with Gurgaon's commercial real estate market recording about 7 lakh sqft of office space uptake in the first quarter of 2016 as compared to 4.5 lakh sqft in the previous quarter, but about 30 per cent less than in Q1 2015.

Delhi and Noida recorded absorption of about 3.4 lakh sqft and 3.8 lakh sqft, respectively.

Hyderabad witnessed robust corporate demand in the first quarter with a gross leasing volume of 1.27 million sqft.

Source: PropertyatNeoDevelopers.Wordpress.Com

5 mn sq ft of office space absorbed in Q1 of 2016: CBRE India

About five million square feet of office space has been absorbed during first quarter (Q1) of 2016 (January – March) - a drop of approximately 26 per cent year-on-year, according to CBRE’s India Office MarketView.

Following a particularly strong fourth quarter of 2015, the first-quarter of 2016 was comparatively sluggish as most corporate space occupiers were still strategising their real estate plans for the year, with limited transaction decisions being implemented in the first-quarter.

The report said, corporate real estate space take-up during the quarter was led by Delhi National Capital Region (NCR) with a share of 31 per cent of total transacted space in the leading cities, followed by Mumbai (23 per cent) and Bangalore (17 per cent).

Corporate occupier interest remained concentrated towards prominent micro-markets such as Gurgaon in Delhi NCR; Thane, Navi Mumbai, Vikhroli, Goregaon and Andheri in Mumbai; Koramangla, Whitefield and Electronic City in Bangalore; IT Corridor in Hyderabad; and Viman Nagar in Pune.

Occupiers were also seen pre-committing space in under-construction developments, primarily in Mumbai and Gurgaon, largely led by the lack of available space in investment-grade developments at prime locations.

Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia said, “While the first-quarter of the year traditionally witnesses muted transaction activity, the overall sentiment among India’s corporate space occupiers is optimistic. Besides, India continues to remain one of the global key outsourcing destinations which will improve the momentum going forward.”About five million square feet of office space has been absorbed during first quarter (Q1) of 2016 (January – March) - a drop of approximately 26 per cent year-on-year, according to CBRE’s India Office MarketView.

Source: PropertyatNeoDevelopers.Wordpress.Com

FDI in e-commerce: demand for office space to go up

With the government announcing 100 per cent FDI in e-commerce category, office and warehousing space is likely to witness a spurt in activity. Industry watchers and developers note that ecommerce companies will fuel demand in top four metros besides cities like Pune and Hyderabad for its proximity to provide quality skilled professionals.

E-commerce and start-up firms had leased 4.3 million sq ft in 2015 compared to just 0.54 million sq ft in 2014, as per property consultancy CBRE.

“Around 10 per cent of the total office market demand is currently driven by e-commerce companies. This segment was not there till two years ago,” said Rajat Gupta, Managing Director - transaction services at CBRE South Asia.

Anuj Puri, Chairman & Country Head, JLL India, said, “India is already host to some of the largest global e-commerce players. The announcement that 100 per cent FDI will now be allowed in e-commerce is going to open the floodgates to a host of other players in this segment. The impact that this development will have on Indian real estate will be significant. In the first place, the new players - like their predecessors - will require large office spaces to house their back-end teams. They will naturally direct this requirement to the country’s top seven cities.”

Ashish Shah, COO, Radius Developer too echoed a similar sentiment. Shah points that there will be an upswing from top four metros and its peripheries.

“E-commerce players typical need two types of space - warehousing and other to house their vendors and software-led operations to complete fulfillment soon. We see a whole new gamut of companies coming in next 6-8 months.” In January this year, Amazon had taken close to 30,000 sq ft space in Radius’s commercial project in Mumbai.

Last year, Flipkart completed India’s single largest office space leasing deal, signing up for a 2 million sq ft custom built office campus in Bengaluru. Snapdeal.com had also relocated to 450,000 sq ft campus. Players like Ola, Peppery Fry and Jabong too were among key space occupiers. A CBRE report also noted that demand for warehousing space rose by nearly 40 per cent during last year to an all-time high of about 10 million sq ft driven by demand from logistics, FMCG, e-commerce and engineering & manufacturing firms.

According to the report, Delhi-NCR and Mumbai witnessed bulk of the leasing activity and constituted close to 50 per cent of the total space absorption in 2015. Logistics and e-Commerce players remained the dominant drivers of demand in these two micro-markets. Bangalore and Chennai were among the other leading cities that were on the radar of warehousing space occupiers during the year.

Developers like Lodha, Hiranadani, Radius are also putting their focus back on commercial properties as the rental yield is much higher such projects.

Source: PropertyatNeoDevelopers.Wordpress.Com

Incentives to rejuvenate India’s housing sector

The Union Budget for 2016-17 provided a significant push to the housing sector. The government extended quite a few incentives targeted at the Affordable Housing segment under the Pradhan Mantri Awas Yojna (PMAY). It announced 100% tax exemptions for private players constructing affordable housing of 30 sq m in the four metros and of 60 sq m in other cities, approved during the June 2016 to March 2019 period, to be completed within three years of construction approval. Minimum Alternate Tax, however, will apply to these undertakings.

Apart from the 100% investment-linked tax deductions for development firms launching affordable housing projects, service tax of 5.6% has also been exempted on services for the construction of such projects under the urban Housing for All Mission or PMAY. These moves attempt to address the supply side constraints of developing affordable housing to plug the significant demand gap in this realty segment.

Encouraging Private Players:

Hopefully, such tax incentives should encourage private players to participate in larger numbers in the construction of projects under the Affordable Housing in Partnership component of PMAY.

In addition, the government has also clarified that the unit sizes of such housing projects may not exceed a carpet area of 60 sq m. These broad guidelines have also been extended to low cost housing schemes of state governments.

The finance minister has, moreover, announced 100% excise duty exemption for Ready Mix Concrete, which is also expected to aid in easing supply side constraints of the real estate sector by bringing down construction cost to some extent. On the demand end of the housing spectrum, an additional rebate of 50,000 per annum has been announced on housing loan interest for first time home buyers in the affordable housing segment. This announcement, however, is applicable for home loans not exceeding 35 lakh, and for properties not exceeding 50 lakh. This move is likely to fuel affordable housing demand, especially among home buyers in the country’s tier II and III towns and cities.

HRA Increase:

The finance minister also provided a boost to the rental housing market with an increase in House Rent Allowance (HRA) deductions. Those not owning a house and not receiving any HRA from their employers previously, can now avail a standard deduction of ` 24,000 per annum; while for those already availing HRA, the limit has now been raised to `60,000 per annum towards rent paid for their homes.

The recent passage of the Real Estate (Regulation and Development) or RERA Bill is also expected to have positive implications for the housing sector in India. It will hopefully help regulate the sector and promote transparency. If implemented in the right spirit, it could facilitate greater volumes of domestic as well as overseas investment flows into the sector. Above all, home buyer confidence in the property market is likely to revive with the Bill coming into effect. Moves such as incentivizing the developer community with tax exemptions, as well as incentivizing the end-user by providing tax breaks will hopefully rejuvenate the sluggish residential market.

Source: PropertyatNeoDevelopers.Wordpress.Com

Take Five - Dwarka Expressway Primer

Why Dwarka Expressway? The 18 km Dwarka Expressway in 2006 was planned to decongest Gurgaon by providing an alternative to NH8. The 14 km stretch on Gurgaon side is complete but work on the remaining four kilometers is unfinished. Some land on the Delhi side is yet to be acquired.

Decision to accord NH Status: Acquisition of land will become quicker, specially on the Delhi side, once Section 3(d) of the National Highways Act is notified. Section 3 (a) calls for appointment of competent authority for land acquisition on behalf of the government of India.

Other Sections: Section 3(g) ensures that compensation is paid to families. This will be fixed as per the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015.

Residential Stock: There are as many as 40,000 units expected to come up in this area spread across 70 projects. Construction is in progress currently in sectors 37 C, 37D, 102, 102A, 103, 104, 105, 106, 107, 108, 109, 110, 110 A and 111.

Price Trends: Most residential projects were launched at ` 3,750 per sq ft and their current value is below ` 6,000 per sq ft. Prices in this market almost doubled in 2012-2014 but are now not expected to increase anytime soon. Some developers will time their delivery with the completion of the expressway.

Source: PropertyatNeoDevelopers.Wordpress.Com

Demand for office space continue to grow in 2016

According to a recent report by CBRE, demand for corporate real estate space in the top seven cities of the country saw a high annual take up of 38 million sq ft for 2016, the highest till date; this translates to an annual rise of 18 percent. This positive demand is indicative of an overall improved economic sentiment among domestic and international corporates. According to the findings of CBRE's latest report, India Office Market View for Q4 2015, absorption Grade-A office space across key cities in India witnessed a quarterly growth of approximately 26 percent during the October-December period-translating to more than 12 million sqft of leased office space.

The annual office demand was led by Bangalore with 32 percent share of the total absorption across leading cities during the year, followed by the Delhi National Capital Region (NCR) with 23 percent share. Suburban and peripheral office districts of major cities attracted steady occupier demand in Q4 2015. Prominent micro-markets included Gurgaon in Delhi NCR; Powai, Vikhroli, Kanjurmarg and ThaneNavi Mumbai in Mumbai; the Outer Ring Road (ORR) in Bangalore; the IT Corridor in Hyderabad; the Old Mahabalipuram Road stretch along Perungudi in Chennai; Viman Nagar in Pune; and Salt Lake Sector V in Kolkata.

Commenting on the findings of the report, Anshuman Magazine, chairman and managing director of CBRE, South Asia Pvt Ltd said, "India is an established outsourcing destination for various multinationals, who continue to outsource their operations to major cities in India; a key reason for a sustained spurt in office transaction activity. This coupled with a steady macro-economic climate and an overall positive market sentiment during the year, encouraged corporate office occupier demand in 2015."

IT/ITeS firms across the seven leading cities garnered a share of more than 56 percent of the entire transaction activity reported during the year. Other sectors such as banking financial services, engineering manufacturing, e-Commerce and research consulting also saw significant traction, collectively contributing about 29 percent to the total transacted space in the year.

Meanwhile, fresh supply of office space development rose to a five year high of around 45 percent during the year over the previous year. These development completions were led by Bangalore, followed by Delhi-NCR, Hyderabad and Mumbai. The fourth quarter, in particular, saw new supply addition of more than 11 million sq. ft. Most of the supply in Q4 2015 came up in Gurgaon and Noida in Delhi-NCR; ORR and Sarjapur Road in Ban galore; IT and Extended IT Corridors in Hyderabad; Baner and Hinjewadi in Pune; and Andheri (East) in Mumbai.

"Corporate occupier demand for office space is expected to continue to grow in the forthcoming months. Expansion and consolidation strategies of corporate firms will continue to be in Greenfield projects and pre-committed space in under construction projects. Occupiers will evaluate their office space requirements on the basis of infrastructure development and cost effective investment-grade office space," says Ram Chandnani, MD transactions services, CBRE South Asia Pvt Ltd.

Rental values remained largely stable across most micro-markets of leading cities during the quarter. Demand for newly completed properties, however, led to rental growth in select peripheral micro-markets. A marginal rental appreciation of around 1-5% q-o-q was reported at ORR in Bangalore; DLF Cybercity in Gurgaon; Guindy, Vadapalani and Mayor Ramnathan Chettiar Nagar in Chennai; and the IT and Extended IT Corridors in Hyderabad. Rentals were stable for the most part in the Central Business Districts of most leading cities, barring Bangalore and Pune.

Source: PropertyatNeoDevelopers.Wordpress.Com

Office hubs see 10% rise in rentals on start-up rush

Growing demand for commercial space from start-ups in India led to a 10% increase in rentals in the hubs for these companies over the past one year, according to real estate services firm CBRE.

The top five micro markets that saw rentals moving up include Cybercity in National Capital Region, Koramangla in Bengaluru, Andheri East and Goregaon in Mumbai and Kukatpally , Manikonda in Hyderabad. "The cities that led the demand include Bengaluru and Gurgaon. By 2020, there will be 11,500 start-ups, employing over 250,000 people," said Ram Chandnani, managing director-transaction services at CBRE South Asia.

Nearly 10% of the total office market demand is currently driven by ecommerce companies. This segment barely existed two years ago. In 2015, these companies leased 4.3 million sq ft compared with 0.54 million sq ft in 2014, as per CBRE.

"At a time when quality supply is drying up in the market, the additional demand coming in from e-commerce has surely had a positive effect on the rental values of key ecommerce favorite micro markets like Mumbai's Eastern Suburbs, Whitefield in Bengaluru and NH8 in Gurgaon," said Ramesh Nair, chief operating officer -business and international director at JLL India.

Nair said the demand from e-commerce is generally directed towards quality Grade A spaces which provide large floor plates in the peripheral business districts of various cities including Mumbai, Delhi-National Capital Region, Bengaluru, Chennai and Hyderabad.

Taxi service provider Ola, for instance, recently leased 20,000 sq ft of prime office space at Embassy Golf Links in Bengaluru, while online marketplace Snapdeal rented 0.43 million sq ft in Gurgaon and Pinelabs, a payment solutions firm, leased 60,000 sq ft in Noida.

Housing.com took 0.15 million sq ft on rent in Supreme Business Park, Mumbai and Oyo Rooms leased 0.1million sq ft in Space Palazo, Gurgaon.

"We have been seeing active interest from e-commerce companies, which are now an important segment of our overall portfolio. It is a small but interesting new area and we have been looking at different solutions to respond to this segment," said Mike Holland, chief executive of Embassy Office Parks, a joint venture between Embassy Group and Blackstone.

Source: PropertyatNeoDevelopers.Wordpress.Com

Realty demand set to touch 1.35 billion sq ft by 2020: Report

Demand for organized real estate in India will reach around 1.35 billion sq ft by 2020, up from around 880 million sq ft currently, and 85% of this will be for residential real estate, according to a report by consulting firm Bain & Company.

Residential Real Estate in India: A new paradigm for success finds that while home sales have slowed in recent years because of low consumer demand at current prices, leading to inventory overhang in major cities, upfront and discreet discounts by builders have increased, indicating some improvement in the condition of the sector.

However, going forward, businesses in the real estate sector will have to do things very differently to be successful.

"The business model of real estate itself has seen a change and will continue to change more rapidly over the next few years. Traditionally, all the value that was attributable to a real estate firm was in land acquisition, agglomeration and managing approvals," said Parijat Jain, principal-infrastructure and real estate practice at Bain's and co-author of the report.

"Now people are building concrete businesses, sustainable and value creating businesses around very good execution skills and very good process managed real estate," he said.

The industry is seeing a shift in dynamics with competitive forces giving rise to distinct business models, the market and regulatory environment becoming more complex, a shift in profit pools and increasing awareness among consumers and customer activism. And with high levels of inventory, selling properties has become increasingly challenging.

While there are challenges in selling older inventory, a lot of the newer inventory is coming into the market but those projects are doing reasonably well.

"It is a combination there is a part of the sector that is doing extremely badly and there are pockets which are actually doing well," said Gopal Sarma, head of Bain India's real estate and infrastructure practice and the lead author of the report. "There has never been value attached to discipline, to process and to the customer."

Sarma said to be successful in the current market, builders should keep three key aspects in mind. Firstly, they should decide on the markets they want to play in, both geographically as well as market segment wise. "Ultimately real estate is a business of local scale. It is not a business of national or regional scale. When a customer wants to buy, you need to be able to give options in that market," he said.

Secondly, the builder needs to choose his business model and then get the right processes in place to deliver on that choice.

"Well-defined processes running throughout the value chain, from pre-construction through the construction cycle, handover and beyond, can create alignment and increase companies' ROI ( returns on investment)," said the report.

The third important aspect Sarma wants builders to keep in mind is the customer. "Currently, for most businesses, the customer is not front and center. We believe developers need to start thinking about customer as being at the center of the business," he said. "There is a lot more that a builder can do to become more customer centric, including listening to the customer and it doesn't end at handover."

Source: PropertyatNeoDevelopers.Wordpress.Com

2016 will rev up real estate sector

Relaxed foreign direct investment (FDI) policy and bullish trend in the absorption of commercial real estate is likely to turn around the residential real estate in the New Year.

The government's policy of improving the infrastructure of a number of cities through the "100 Smart Cities" programme and providing affordable homes on a mass scale through "Housing for all by 2022" programme is expected to ramp up growth and drive the sector. There is some disappointment that the Real Estate Regulatory bill could not be passed in the winter session of Parliament, but there is hope yet that it will see the light of the day in the New Year.

All these will go a long way in instilling confidence among buyers to invest in the market. Thus, Year 2016 is likely to begin on a cheerful note o the back of reforms and increased investor confidence.

Anshuman Magazine, CMD of CBRE South Asia Pvt Ltd, says: "The new FDI norms will help foreign capital enter the sector, which is acutely starved of fund. This is likely to provide the much needed push to rejuvenate growth in the real estate." Sanjay Dutt, MD (India) of Cushman & Wakefield, says: "The commercial office sector gathered momentum with some large leases and buy-out transactions during the year. Companies are firming up expansion and consolidation plans, leading to an increase in leasing activity as they foresee higher potential and increasing business activity. This will certainly result in fresh demand for residential units." Around 5.8 million sq ft of office space was taken on rent by various companies in the first three quarters of 2015, a report said. This alone requires a fresh batch of 60,000 people to occupy. Going forward, activity in the office sector is expected to intensify with supply likely to see a spurt in 2016, Dutt said.

Overall, the next five years may see new strategic partnerships with developers and private equity investors, too, looking at liquidating assets, Dutt said. All these developments are likely to improve the supply and efficiency in the sector, thereby bringing down prices to the affordable range.

Anil Sharma, CMD of Amrapali Group, said: "With several big announcements from the government in 2015, things have gradually started gaining momentum. Year 2016 will turnaround the realty sector."

Prashant Solomon, MD of Chintels Group, said that demand has started picking up and with various measures taken by the government, the sector is hopeful of a better year ahead.

Source: PropertyatNeoDevelopers.Wordpress.Com

Think local act global

From a real estate perspective, there are certain inherent advantages of having a large Indian diaspora. If you cannot find buyers home, well, go abroad. The current dollar to Indian rupee value pegged at around Rs 64 gives the NRI more rupees per dollar, a factor that offsets house prices to an extent and becomes a motivation to invest into property.

With piled up inventories, the realty market, particularly its luxury segment, is looking up to the NRI community as prospective clients. Select real estate companies are setting up their overseas offices or appointing representatives to canvass and market their products.

The companies are active in countries where the Indian diaspora is strong, like the UAE, Singapore and the US. Many Indian real estate companies are becoming a regular feature at various global trade shows, which keep an eye on prospective buyers.

Experts can scarcely conceal their optimism. Ashwinder Raj Singh, chief executive officer- residential services, JLL India, predicts that the sector has once again become attractive for NRIs. `For a protracted period, investments in India did not offer good returns, causing NRIs to invest in countries of their migration - or anywhere else where the markets were attractive. Today, the Indian realty market is once again a prime focus area for NRI investors,’’ he asserts.

The Indian realty sector as a whole - namely, across residential, retail, hospitality and commercial verticals - is slated to grow at 30 per cent over the next decade, attaining a market size of around $180 billion by 2020. However, the investment opportunity lies less in the sector’s speed of growth than in its overall dynamism. Conventional wisdom has it that long-term investments into Indian realty pay off very well as long as sound investment decisions have been taken, JLL said in a recent research report.

Generally, the NRI community prefers to invest in their state of origin - primarily Kerala, Karnataka, Tamil Nadu, Maharashtra and Delhi NCR. However, since residential inventory has piled up in Delhi and Mumbai, investors are currently very well placed to find good bargains in these markets. Singh says developers, in an effort to sell, are offering discounts and attractive financial schemes.

Last week, Tata Housing announced the launch of its operations in Dubai to cater to the growing demand from consumers. Apart from Dubai, the company has offices in Maldives and Sri Lanka, its managing director Brotin Banerjee points out.

Currently, NRIs contribute between 15-20 per cent of the total housing sales in India, a trend, which shows an upward climb in the last few years. Banerjee believes the contribution could go up to 25-30 per cent in the next three to four years.

With a new office in Dubai, it would reach out to NRIs who constitute more than 30 per cent of the population in UAE. The Gulf market witnessed rapid strides in the past decade with Gulf Cooperation Council (GCC) contributing to more than 50 per cent of international sales.

Tata Housing has announced 'Happy Returns' to coincide with the opening is new office. Under this, customers will get 72,000-10,00,000 Jet privilege miles on the purchase of a home across Tata Housing projects in India. The scheme is applicable to those with a valid non-resident Indian status, including Indian passport holders and green card holders.

UAE-based NRIs earn in West Asian currencies, which is an advantage as they trade strongly against the Indian rupee. This factor offsets a part of the house cost. However, the difference between the currencies will reduce as the rupee strengthens, says Singh.

Indian developers have had to wake up to certain immutable market realities over the last couple of years. In many cities, they have misjudged where the actual demand is and how much buyers - including NRIs - are willing to spend on their first or second homes. This has resulted in worrisome levels of supply overhang of larger-configuration apartments, the JLL India official points out.

Singh says developers are now serious about right sizing and right pricing their products to make them attractive to a larger cross-section of customers. In fact, smaller, better-designed and more efficient homes are in - as project launches in 2015 confirm.

Points out Swaroop Anish, executive director, business development, Prestige Group. “UAE and USA are key target markets for us. Though we have not set up any overseas offices so far, we participate and organise regular exhibitions in West Asia to create awareness of our new project. We have select channel partners overseas who take part in marketing our products. Prestige also has a strong customer base in the UK, Singapore and Hong Kong.

"The company has managed to create a niche in these markets through indirect marketing with the help of local partners. While social media has lend out a strong helping hand, the best sales have happened through word of mouth from its existing customers, says Anish. “Many choose to buy more than one property in the mid-range segment for investment purposes,” he explains, adding that NRIs account for over ten per cent of its customer base. For good measure, Prestige offers its customers assistance in property registration, renting out property, management and upkeep of the same post sale, all sops to widen their customer base.

Other firms too are waking up to this happy trend. Ram Raheja, director, S Raheja Realty, says his company’s priorities are fixed. “We have always targeted buyers who are likely to use the property, not just for investment purposes. In our projects, NRI buyers are the ones looking for second homes back in their country.”

S Raheja Realty too has tie-ups with local real estate brokers and agencies, which market its wares. Currently, it is advertising some of its luxury penthouses in Mumbai’s Natraj and Sapphire projects to international HNI NRIs, explains Raheja.

According to Singh of JLL, selective corrections are taking place in some over-priced pockets of India’s larger cities. As this swing gathers momentum, the industry will start seeing faster sales velocity in the stagnated supply of larger configurations.

The supply pipeline for luxury home projects is slowing down in reaction to the slow demand. “Residential property rates have reached saturation point in both Delhi and Mumbai. Good returns can be expected only if the investment horizon is three years or above. In such cases, annualised returns of 10 per cent can be expected from the third year on. Sluggish sales, especially in the luxury segment, have led developers to offer several financial schemes. Luxury projects are available in Indian cities but the market is currently struggling to sell inventory,” says Singh, adding it is the right time to invest as social infrastructure- hospitals, schools, leisure and shopping facilities, connectivity and availability of utilities- has improved significantly in most of the larger Indian cities.

Once their primary residence is secured, NRIs with surplus funds can invest in rental income-generating apartments, as well. However, they must be aware of taxation regulations that apply to NRI investors. Rental income is taxable in India. It is also taxable in other nations, except in cases where a treaty exists between the two involved countries with regards to double taxation. “Real estate is capital intensive and best returns on investment are not attained by guesswork but by decisions arrived at after weighing merits and demerits,” he avers.

Experts believe prospective NRI buyers should pay heed to the track record of the builder concerned and ascertain that the project has all mandatory clearances. A personal evaluation of projects while visiting India will help. NRI investors can consider projects in pre-launch stage for discounts and competitive prices. Due diligence is a must, particularly if the schemes are in upcoming or peripheral locations of primary cities. If a property is marketed as exclusive for NRIs, then the parameters, which make it exclusive, should be explained. Well, it certainly is getting to be more and more creative.

Source: PropertyatNeoDevelopers.Wordpress.Com

LIC realty fund eyes office opportunities

Having deployed a significant portion of its Rs.529-crore real estate fund in residential projects in Bengaluru, Pune and Chennai, LICHFL Asset Management Co. Ltd (LICHFL AMC) is planning to INVEST the balance in commercial space and warehouse projects, the fund’s chief executive said. LICHFL AMC - the private equity arm of LIC Housing Finance Ltd - had raised its maiden real estate fund called LICHFL Urban Development Fund in 2013 with a focus on mid-income residential projects.

“There are many deal opportunities that are coming to us, both from IT (information technology) -backed office projects as well as from warehousing, fuelled by the growth of e-commerce today,” said A.K. Sharma, chief executive of the fund. According to Sharma, INVESTMENT OPPORTUNITIES have piled up as many projects are stuck and waiting for completion.

In many cases, the developers have finished construction but don’t have money for infrastructure work on water treatment, waste disposal or approach roads. “We are looking at such deals related to project infrastructure. For IT office park deals, we are looking at cities such as Bengaluru and Pune, where we could buy a single asset or even look at a joint development deal,” he said. LICHFL AMC is also thinking of a second real estate fund, with a probably bigger corpus, said Sharma, without disclosing details.

The real estate sector has faced a slowdown in the last two years or so. While home sales are yet to pick up, private equity (PE) INVESTORS have actively engaged in funding commercial office projects. “The positive outlook for the Indian market this year includes an increasing demand for IT/back-office space, the emergence of new sectors such as e-commerce as well as the rising demand for SEZ (special economic zone) space,” said Anshuman Magazine, chairman and managing director at property advisory CBRE South Asia Pvt. Ltd. “Other silver linings for 2015 are the likely commencement of REIT (real estate investment trust)-led investments in India’s commercial real estate, new workplace strategies and rising rents in supply-deficient core MARKETS.”

“Most PEs have a clear INVESTMENT strategy, where they either look at office space projects that are typically longer in tenure and without much exit pressure, or they invest in residential projects which are more fragmented and there is construction risk involved,” said Shashank Jain, partner, transaction services at PricewaterhouseCoopers India. “These are two different asset classes, and while the bigger funds look at the large office deals, there are many new FUND managers who do smaller residential deals,” said Jain.

Source: PropertyatNeoDevelopers.Wordpress.Com

Making older buildings better

Redevelopment is not just about technological advancements or better lifestyles. It is also about safety.

Like every other form of housing, affordable homes need space for construction. Even more importantly, affordable housing needs to be available in locations where it is needed the most. In most cases, we see such projects coming up only in distant suburbs. This is primarily because there is no land for development in the central areas of our cities, and all that is available is priced too steeply for affordable housing to make sense.

In this scenario, redevelopment of old buildings and societies makes sense. Unfortunately, redevelopment is mainly used by developers to turn huge profits, rather being used as a means to increase the supply of housing.

Good, bad or ugly?

Several factors influence change in the way products are conceived, produced and used. We see very rapid changes taking place in the fields of engineering, consumer electronics and software development. Real estate is no exception, which is why we have the concept of redevelopment.

There are two primary reasons why change is necessary in almost any product vertical:

Things Wear Out: Every manufactured product has an inherent shelf-life built into it. Once its age exceeds this shelf-life, it becomes unusable and often dangerous to use.

Technological Innovation: The world is constantly finding newer and better ways of doing things. Old concepts are abandoned and new ones, based on new findings and technologies, take their place. Just as we see hundreds of software packages across the world becoming obsolete and newer ones replacing them, technological advancements in the construction industry leave no space for older things in real estate.

Buildings and societies in India are constantly being redeveloped – both to mitigate the safety hazards of buildings that have reached or exceeded their ‘expiry dates’, and to make way for more modern buildings that use available space in a better way, have better electrical fittings and plumbing, are safer, offer newer features and are also friendlier to the environment.

While real estate developers, agencies and consumers are largely in favor of redevelopment, there are always elements that oppose it. In India, these include slumlords that benefit from things remaining the way they are, and building occupants paying negligible rents (locked in decades ago) who would lose this benefit if their building were redeveloped. However, consensus remains that redevelopment of old buildings is necessary and beneficial.

The Benefits:

Redevelopment of old buildings is not merely about technological advancements or better lifestyles - when buildings age, they become febrile and unsafe. The cement and reinforcing metal bars used in buildings are all subject to degradation over time, causing structures to become increasingly unstable. As disturbing news stories remind us regularly, old buildings can and do collapse in India.

Redeveloping buildings after they have stood for a certain span of time is not only an option - it is a life-saving necessity. Structures also get a new lease of life and more homes become available in a location where supply is constricted by non-availability of developable plots. Homes that result are larger, safer and more comfortable than those which were available in the building prior to redevelopment. Also, improved structures utilise fewer resources than developing a new building.

Buildings which have been redeveloped are safer than they were to begin with not only because of renewed structural soundness, but also because modern safety features can be introduced where they did not exist before. For instance, many old buildings in cities like Pune and Mumbai were constructed with now obsolete construction technologies or by unscrupulous developers who cut costs at every corner.

These flaws or shortcomings in a building can be rectified during the redevelopment process with the inclusion of CCTV cameras, fire alarms, access for fire-fighting vehicles within the project, and firefighting hoses on all floors etc. From a real estate market perspective, redeveloping or re-engineering an old building significantly increases its value on the market. Unfortunately, this is often the only objective for Indian developers to undertake redevelopment projects in the first place. Such projects must be done in the right way and for the right reasons. Developers should do so not only to make a profit but also with the intention of deliver more housing.

Source: PropertyatNeoDevelopers.Wordpress.Com

Top 5 policy game changers for real estate

The real estate fraternity is positive about the year ahead as some policy changes are expected to bring back the lost sheen, after the slowdown. This was marked by the recent surprise cut in repo rate by RBI which delighted realty experts, leading to high spirits. Here are few other changes which can further bring cheer to the sector.

Reduction in interest rates - As repo rate reduction has brought cheer, banks and housing finance companies are also considering cutting home loan interest rates. This would not only encourage home buying but will also clear inventories which are piling up in big cities.

Real Estate Regulatory Bill - Pending from a long time, the Real Estate Regulatory Bill, if passed, will bring relief to all stakeholders of the sector. “The long-pending Real Estate Regulatory Bill is expected to bring transparency. It will provide relief to buyers and investors as it will ensure buyers get their properties as per promised specifications,” says Anuj Puri, chairman & country head, JLL India.

100 Smart Cities – The ‘Smart City’ concept is one of the most talked about term currently. Allocation of Rs 7,000 crore in the Union Budget 2014 made the real estate sector go ‘gaga’ about the anticipated development. As more clarity over the subject is expected in the coming month, it can be one of the game changers for the real estate sector.

MISIDICI - ‘Make India Skill India Digital India Clean India’ is one of the visions which the government is focusing on. Creation of manufacturing hubs to generate jobs, digitisation of land records, single window clearance for speeding up processes and clean India for developing a pollution free environment will not just improve transactions in the market but will create opportunities for economic growth as well.

REITs - As SEBI announced regulations for Real Estate Investment Trust for the commercial sector, the market is expecting the same for residential also with easier exit routes. Interestingly, this will also bring NRI money to invest in the sector hence, giving more funding channels for a developer to source funds and complete projects on time.

With so many policy reforms anticipated by industry experts, the onus is on the government on what they will deliver and what will still be in the waiting list.

Source: -PropertyatNeoDevelopers.Wordpress.Com

Globe Trot - Theme-based housing catches on like wildfire

Developers these days are finding themselves contending with increasingly evolved tastes among buyers with theme-based housing projects emerging as a major attraction.

Faced with growing competition and rising consumer aspirations, developers are nowadays foraying into theme-based housing projects to differentiate their offerings and add value to their projects.

A Harikesh, senior VP (marketing & sales) of Tata Housing Development Company, says: “With the upsurge in economy, Indian consumers are getting influenced by global standards that have majorly become differentiators for the real estate developers. Also, by traveling a lot for both work as well as leisure, people have become more aware of the different cultures and lifestyles. Therefore, they not only want a home, but opt for a luxurious lifestyle that should be an extension of the experiences they gather as global travelers."

Little wonder then that developers of housing projects are now finding themselves contending with increasingly evolved tastes among buyers.

“Exposure to international home concepts among many of India's well-traveled property buyers is raising the bar on differentiation in residential projects here as well. Besides, lifestyle aspirations have risen, and there is now a lot of demand for themed housing projects,“ Om Ahuja, CEO (residential services) of JLL India, said.

Theme-based housing projects, thus, have evolved into a major attraction in today's cluttered markets. Today consumers are not only interested in luxury homes with larger spaces, fancy facades and super luxury amenities, but are increasingly opting for theme-based housing construction and design like European, Arabian, Singaporean, Spanish, Victorian, and forest style themes. The latest trend to be enlisted in this high-end residential market is Mediterranean theme-based housing, which has of late started picking up in India. The Mediterranean concept, in fact, aims to convey a feel of the architecture popular during the Italian Renaissance and 16th century seaside villas. Certain developers who specialize in luxury villas and townhouses have adopted this concept in India.

For instance, Lavasa aspires to become a metaphor for the future Indian city with a township featuring lakeside apartments and Mediterranean-themed villas.

Mantri has come up with Mantri Espana in Bangalore, while ATS Infra has conceived ATS Lifestyle near Chandigarh on a similar theme.

Sobha Developers' Sobha City, Bangalore, is also a Mediterranean-themed town ship, which has got exquisitely built row houses as well as luxury and super-luxury apartments. Tata Housing, on the other hand, has launched La Montana, a Mediterranean themed town ship located at Talegoan, which is designed by renowned international architect firm F + A of the US.

“DLF's Ridgewood Estate and Sky Court in Gurgaon; Unitech's Vista Villas in Greenwood City, Gurgaon; Emaar MGF's The Villas at Mohali Hills and Ekaantam in Gurgaon; Jaypee Greens' Kasa Isles in Sector 129, Noida, and Lodha Luxuria in Mumbai are some of the projects inspired by the Mediterranean theme,“ Om Ahuja of JLL says.

These projects offer a residential format consisting of 3-5 spacious bedrooms, measuring between 2,000 and 4,000 sq ft and possessing world-class features and distinct interior architecture. It is needless to say that the Mediterranean concept is particularly popular with the elite and super-rich clients.

“The consumers who opt for such theme-based housing are the ones who want to live king-size. More over, they want their homes to reflect their sense of style, taste, and lifestyle. Hence, their homes need to go beyond just luxury homes,“ A Harikesh of Tata Housing says.

Fast Facts: Today consumers are not only interested in luxury homes with larger spaces and super luxury amenities, but are opting for theme-based housing.

Source: Times Property, Dec 06, 2014

Property Wise - You must get the documentation right

Here is an easy tick list for customers to consult before buying a plot.

The first document that you sign is an agreement to sell. The second document is the sale deed, which you get registered in your name by paying stamp duty to the government.

Once you have done this, the title gets transferred to your name. The sale deed is the most important document. At the time of taking possession of the property, the owner should also give you a possession letter. If the property was involved in litigation, you should get papers to the effect that the litigation has been settled. All taxes, penalties, bills, etc, on the plot must have been paid up to date. Get proof to this effect. If you are buying from a developer, then the allotment letter is an important document.

Do the due Diligence:
If you are buying a plot within a developer's project, make sure that he has all the necessary approvals, such as the license to develop that piece of land. Make sure that the land can be registered in your name. You must also find out if the land is leasehold or freehold.

Sometimes, when you are buying the plot from an authority, there could be a clause which says that you must complete construction on it within a certain time period. If you are buying the plot for investment, such a clause sets a limit on the time period by which you must exit this investment.

The plot shouldn't be attached by a court order. Consult a lawyer to make sure that it is not encumbered legally. Any adverse order by a court on the property may affect you down the line.

Quick Byte: Be specially wary of this risk if the property is being offered to you at a low price.

Source: Times Property, Dec 06, 2014