RESSEX™ is Real Estate Sensitivity Index

RESSEX™ is Real Estate Sensitivity Index

Pulse of Real Estate Market

Homebuyers Lure PNB With Margin at 4-Year Low: Corporate India

Anto Antony

Punjab National Bank (PNB), India’s third- largest state-run lender, is seeking home and automobile buyers to boost credit and bolster margins from the narrowest level in almost four years.

The bank also plans to limit high-cost deposits of more than 10 million rupees ($183,000) and reduce credit to indebted real estate developers, said K.R. Kamath, chairman and managing director of the New Delhi-based bank. Net interest margin, the difference between earnings on loans and the cost of funding, fell to 3.47 percent in the three months ended Dec. 31, the least since the three months to March 2009. Kotak Mahindra Bank Ltd. (KMB) had the highest margin of 4.6 percent last quarter.

The lender, which has the second-largest branch network in the world’s most populated nation after China, is tapping segments that expanded faster than loans to companies. The slowest pace of growth in a decade in the $1.8 trillion economy has sapped demand for credit to expand and build factories. Mortgages may climb as the central bank reduces borrowing costs, encouraging homebuyers to accelerate purchases.

“We will be back on the growth path from the next financial year if the economy permits,” Kamath said in an interview. “We have realigned our balance sheet and have put in place measures to recover bad loans.”

Demand for loans to buy homes and vehicles accelerated to 14.3 percent at Indian banks in the 12 months to Dec. 28, while the pace of growth for credit to industry slowed to 13.8 percent, according to data compiled by the central bank.
Bank of Baroda

Retail lending, including mortgages and auto credit, account for as much as 11 percent of Punjab National’s loans, exchange filings show. Punjab National was overtaken by Bank of Baroda as India’s second-largest lender by assets in the three months ended Sept. 30.

“Home sales will pick up in the current year with a reduction in interest rates,” said Anubhav Gupta, a Mumbai- based analyst at Kim Eng Securities Pvt. “While bookings at new projects were low last year, transactions in the secondary market remained strong, primarily driven by smaller cities.”

The central bank cut its policy rate to 7.75 percent from 8 percent on Jan. 29, the first reduction since April. Six of 15 economists in a Bloomberg survey forecast the Reserve Bank of India will reduce the benchmark rate by three-fourths of a percent by December.
Property Sales

Property sales in Bangalore, home to software developers including Infosys Ltd. and Wipro Ltd., grew 77 percent in the two years to Dec. 31, according to Liases Foras Real Estate Rating & Research Pvt. In New Delhi, a record 30.99 million square feet of property were sold in the three months to March 31, before dropping to 20.5 million square feet by December, the data show.

The 117-year-old lender is targeting a net interest margin of more than 3.5 percent, Kamath said. The company also plans to cut bad loans, which narrowed for the first time in 15 quarters in the third quarter, to boost profit, he said. Net income may rise 2 percent in the year ending March 31, according to the median estimate of 59 analysts. That’s the slowest pace of annual growth since at least 2002.

At about 12 percent, Punjab National has the highest proportion of soured and restructured debt among the nation’s 10 largest lenders, according to exchange filings. The measure is 7.7 percent for State Bank of India, the nation’s largest, and 2.1 percent for No. 2 ICICI Bank Ltd. (ICICIBC)
‘Stressed Assets’

“With stressed assets higher than 12 percent of the loan book, it will take time to clean up the balance sheet,” Vishal Narnolia, a Mumbai-based banking analyst at SMC Global Securities Ltd., said by phone. “It will take at least two more quarters before seeing any meaningful improvement.”

The lender to grounded carrier Kingfisher Airlines Ltd. (KAIR) and Suzlon Energy Ltd., the wind-turbine maker that defaulted on its convertible bonds last year, ordered three executive directors to monitor recovery of delinquent debt over 5 million rupees, Kamath said.

Shares of the lender have dropped 13 percent in the past year, making them the worst-performing stock after IDBI Bank Ltd. in the 14-company S&P BSE Bankex (BANKEX) index. They rose 0.5 percent to 814.65 rupees in Mumbai, the highest since Feb. 27.

“PNB is poised for a rally as the economy improves,” said Nitin Kumar, an analyst with Quant Broking Pvt. “The pace of increase in non-performing assets has moderated and growth in the economy will help them to bring down stressed assets substantially.”
‘Extraordinary Support’

India Ratings & Research Pvt., a unit of Fitch Ratings, yesterday kept Punjab National’s local currency rating at AAA, citing “extraordinary support” from the government, which owns 56 percent of the lender. Finance Minister Palaniappan Chidambaram, in his budget presented in Parliament on Feb. 28, pledged to add 140 billion rupees ($2.6 billion) to boost capital at state-run banks.

He also announced measures to accelerate infrastructure projects, which will help in recovering bad loans in the road and power sectors, said SMC’s Narnolia. Chidambaram allocated 330 billion rupees for the ruling coalition’s flagship rural jobs program and 100 billion rupees for a plan to give the poor cheap food grains, ahead of a general election due by 2014.

“There is an expectation that credit offtake will pick up over the next two quarters as higher government spending nudges private investments,” said Debasish Mallick, chief executive officer at IDBI Asset Management Ltd. That may help banks, he said.

Kharghar plots sold at record price

Sudhir Suryawanshi

Despite the current glut in the real estate market, the City and Industrial Development Corporation (Cidco) managed to sell three commercial plots and one residential one in Kharghar at a record price of Rs79 crore.

In an auction held on Thursday, a plot measuring 4,000 square metre (sqmt) was sold at the rate of Rs1.06 lakh per sqmt, earning Rs42.04 crore; another measuring 1,365sqmt was sold at Rs1.21 lakh per sqmt, fetching Rs16.51 crore; a 555 sqmt commercial plot was sold at Rs1.41 lakh per sqmt earning Rs7.82 crore and a 1,180 sqmt residential one was sold at the rate of Rs1.11 lakh per sqmt, earning Cidco Rs13.13 crore. Buyers can avail floor space index (FSI) of 1.5 in the commercial plots and that of 1 in the residential one.

Real estate experts said that for an area like Kharghar where land was sold at Rs60,000-Rs70,000 per sqmt last year, plots being sold at such prices was unheard of. “There is a glut in the property market now. But even then Cidco has fetched a good deal,” real estate expert from Navi Mumbai, Atul Nemade said.

According to Chandan Lakhani, the owner of Rajesh Developers, the bidders quoted high prices for the plots. “The commercial occupancy rate in Navi Mumbai is very low and beecause of the bad commercial market, most developers here are trying to convert their commercial space into residential ones,” he said.

Recently, City Centre mall in Vashi was demolished due to the lukewarm response it received. “The owner now wants to convert it either into a residential complex or a hotel.
Most of the malls in Navi Mumbai are struggling and incurring losses,” Nemade said.

Aditya Birla Fund Said To Buy Half Of Peninsula’s Pune Project

Vivek Singh

Peninsula Land Limited, the listed realty developer of Ashok Piramal, is learnt to be selling 50% stake in its township project at Pune to Aditya Birla Group fund, according to ET.

The deal is likely to be done for R115 Cr valuing the project under development at R230 Cr.

However it is structured in a different manner. While Aditya Birla is expected to earn around 25% returns, anything above this would be shared by Aditya Birla fund with the company, basically to boost profitability.

The fund has offered to share the 25%+ returns of their stake. This will be beneficial to Peninsula as it will get to share earnings above its own part of 50%.

Peninsula acquired 33 acre land for R150 Cr in December 2011 from a JV involving Ekta Group and Pune’s Oxford Group. Of this, 3 acre is disconnected from the larger part and thus is put up for sale.

Aditya Birla Real Estate Fund is part of Aditya Birla Financial Services and is a R1,100 Cr fund. It has exhausted R300 Cr till now across five transactions.

Real estate deals in Pune include the recent acquisition of stake by IDFC Alternatives for R250 Cr in a SEZ at Pune.

Kolta Patil Developers acquired remaining 49% stake from Epsilon Investments in its subsidiaries Oakwoods Hospitality (Pune) and Jasmine Hospitality (Bangalore) for R65.62 Cr.

Ajay Piramal led Indiareit Fund Advisors was close to investing R250 Cr in two projects last month of which one was a residential project in Pune.

Pull down illegal floors of 25-yr-old Worli bldgs: SC

Yogesh Sadhwani and Pandurang Mhaske

Residents plan to file a review petition at the apex court – their final recourse

The Supreme Court has ordered the BMC to demolish illegal floors of six buildings at Worli Naka 25 years after buyers moved in.
In an order dated February 27 on a petition filed by residents requesting regularisation of the buildings, an apex court division bench of Justice GS Singhvi and Justice Sudhanshu Jyoti Mukhopadhaya ruled that the violations could not be regularised and ordered the Brihanmumbai Municipal Corporation to take action at the earliest.
While the residents plan to file a review petition at the apex court – their final recourse –the civic body is chalking out plans to demolish the illegal floors.
“The corporation is expected to take action in the matter at the earliest,” said the bench. “We also direct the state government and its functionaries/officers and the officers/employees of the corporation to not put any hurdle in the implementation of the notice. It is needless to say that the flat buyers shall be free to avail appropriate remedy against the developers/builders.”
The buildings – Esha Ekta, Patel, Orchid, BY, Midtown, and Shubh – were constructed by four developers on a plot that used to house Pure Drinks, the manufacturers of Campa Cola. While the builders were granted permissions to construct only ground-plus-five floors, Midtown went up to 20 floors, Orchid to 17, Esha Ekta to eight, Shubh to seven and BY and Patel to six floors each.
In November 1984, the BMC issued the first notice to the developers but did not take any further action and soon all the high-end flats were occupied. Almost every building has a palatial terrace flat. Most of the houses are occupied by top businessmen or executives.
“It is a different story that after issuing the ‘stop work notice’, the authorities of the corporation buckled under pressure from the developers/builders and turned a blind eye to the illegal constructions made between 1984 and 1989,” said the SC order.
In 2002, the BMC assessed the quantum of illegal construction. Prosecution was launched against the builder, developer and all the occupants of the building, who were convicted on admission of guilt. A magistrate imposed a fine ranging from Rs 600 to Rs 2,000. “Apart from the above, no other action has been taken by the corporation in relation to the illegal construction,” said the order.
When in 2005 the residents approached the Bombay High Court seeking regular water supply, the matter resurfaced. The civic body assured the court that it will initiate action against the unauthorised construction and in November 2005 issued fresh notices to all the buildings.
This led to a fresh set of litigations and after winding its way through various courts, the matter reached the Supreme Court in 2012. Counsels of the societies argued that many of them were unaware of the illegalities at the time of buying the houses. However, the division bench held that the buyers were well aware of the unauthorised additions.
“Although the members of the housing societies knew that the construction had been raised in violation of the sanctioned plan and permission for occupation of the buildings had not been issued by the competent authority, a large number of them occupied the illegally constructed buildings. After this, the housing societies started litigation in one form or the other,” said the order.
Residents said they are now exploring the option of filing a review petition in the SC, which will be their final recourse. “I bought the flat in 1993 and paid in full. I don’t know what to make of the order. Our society is trying to work out a way,” said Rajesh Parikh, a businessman who lives on the sixth floor of BY apartments.
Municpal commissioner Sitaram Kunte said the BMC will follow the Supreme Court’s order. “There is no question of giving them further relief following the Supreme Court’s specific orders to demolish the illegal construction,” said Kunte. “We will coordinate with various departments internally and then decide on the plan of action.”


The Orchid is one of six Worli buildings that face demolition after the SC order

Reclamation promenade goes from good to worse

Yogesh Naik

Over two years after a “perfectly built” Bandra Reclamation promenade was given to a private developer for making improvements, the public walk has become yet another story of poorly managed city infrastructure.
Residents say far from making the 1.5- km promenade better, the developer, DB Realty, has stopped the construction halfway through, leaving the walking track uneven and partly developed at some places.
The firm was supposed to hand over a smartened-upsite, including two amphitheatres and a cafeteria, in January last year, but the latest deadline set by Maharashtra State Road Development Corporation is October. MSRDC constructed the promenade in 2008-09, and handed over the site to DB Realty in 2010. The agreement was that the company would pay Rs 99 lakh a year to MSRDC and maintain the place for 15 years in exchange of advertising rights at the site.
Bandra residents claim since the time the deal was struck, the only addition the company has made to the promenade is its own advertising boards and signs.
“The promenade was very nice when it was constructed. We suggested MSRDC to deploy guards, improve lighting and maintain the garden, hoping that the place would get even better. Suddenly, the responsibility of the promenade was given to another agency (DB Realty) for no rhyme or reason,” said Vidya Vaidya, secretary of General Arunkumar Vaidya Nagar Rahivasi Sangh, an umbrella group of residential colonies in the area.
She said three years after the promenade was constructed, Bandra residents were still waiting for the project to turn into the spacious public walk they were promised. Citizens across the city have expressed similar anger over being denied pedestrian space. For the past week, Mirror has been highlighting their concerns as part of its Talk the Walk campaign.
At least two senior citizens have suffered fractures while walking on the partially developed promenade in the past few months.
“The work has been going on at a snail’s pace, as a result many people have started going to Jogger’s Park and Bandstand,” said another resident, S K Jambavdekar. “MSRDC refuses to give an explanation for the delay or a time frame for the work to end — there is just no accountability. There was no need to hand over the project to another agency in the first place.”
DB Realty apparently suspended the work after its two promoters, Shahid Balwa and Vinod Goenka, were mired in the 2G scam. MSRDC had issued notices to the realty major for the delay last year, the latest being in November.
“MSRDC imposed a fine of Rs 36 lakh on the firm, which has now restarted the work,” said MSRDC executive engineer K P Mali. The road development corporation’s managing director, Bipin Shrimali, if DB Realty failed to complete the project, MSRDC would take over. He refused to comment on why a fully developed promenade was handed over to DB Realty. While DB Group CEO Vipul Bansal refused to comment, a spokesperson said the work at the promenade was “on schedule”.
“DB Realty has no financial crunch and rentals have been paid regularly,” the official said.
Un impressed by the assurances, former MSRDC managing director R C Sinha, who was part of the team that first designed the promenade, said that the original concept of a spacious public walk had been completely neglected.“I wanted it to be the Marine Drive of Bandra, where people could take a stroll or sit and relax. What I had conceptualised has been neglected,” said Sinha, who was one of the key planners for the Bandra-Worli Sea Link. “There was no need for MSRDC to give the project to a private entity.”

Residents say DB Realty, which took over developing the walk from MSRDC in 2010, has ruined the place with constant delays

Budget for realty

Jharna Mazumdar

While the budget will provide the much-needed boost to the affordable housing segment, experts and developers feel it has not turned out to be a game-changer for the real estate sector

After a long wait of three years, Rajiv Singh and his wife Jaya have finally decided to purchase their dream home.  Singh, working as an executive in a private bank, has already identified a project in Pune and the house would cost him around Rs 30 lakh. The couple plans to take a loan of around Rs 25 lakh and seek the additional Rs 1 lakh interest benefit promised by the finance minister in the Union budget.

Like Singh, many others are moving in to buy an affordable house and avail the tax benefit. The budget provided a boost to the affordable housing segment with an additional interest benefit of Rs 1 lakh on first-time home loans up to Rs 25 lakh. However, this provision is only for the first year and with a carry-forward benefit of the unutilised deduction to the second year. This will help boost housing sales in tier-II and III cities and peripheral areas and distant suburbs of metros.

Singh said, “With the tax benefit, we will be able to save some money, and after one year, my salary will also increase. So, even if the tax benefit is gone, we will have some extra cash. For purchasing the property now, I am stretching my budget and even a one-year tax benefit will be of great help to us.”

For the real estate sector, especially in small cities, the new budget proposal may act as a much-needed boost.  Gagan Banga, chief executive officer of Indiabulls Financial Services, told FC Build, “The various incentives and initiatives will kickstart investments, which is a positive sign. The finance minister’s budget proposal to offer an additional interest deduction of Rs 1 lakh on housing loans of up to Rs 25 lakh for first-time home buyers will not only help housing as such, but will also lead to an increase in demand for steel, glass, cement and several other related industries.”

The setting up of Rs 2,000-crore urban housing fund and greater impetus to rural housing fund will go a long way in giving the much-needed support to the housing industry as a whole, says Banga. According to him, the additional allocation of Rs 14,873 crore to Jawaharlal Nehru National Urban Renewal Mission towards public road transport will help make lagging real estate locations more viable in the long term.

According to the economic survey, the 11th five-year plan (2007-12) has estimated housing requirement of 24.7 million units in urban areas, of which, 99 per cent was in the economically weaker sections/lower income groups (EWS/LIG) segment. As per the estimates of the task force on housing requirements in urban areas during the 12th five-year plan (2012-17), the housing requirement in urban areas is 18.7 million units, of which, 18.5 million are for the EWS/LIG segment. The survey quoted a recent McKinsey report, and said the demand for affordable housing would go up to 38 million by 2030.

While some moderate growth is expected in the affordable housing segment, the luxury housing space will
continue to witness sluggish growth as the rate of abatement on homes and flats of above 2,000 sq ft, or costing Rs 1 crore and above, has been reduced from 75 per cent to 70 per cent. (service tax @ 12.36 per cent will henceforth be calculated on the 30 per cent of the flat value, instead of the earlier 25 per cent). Effectively, this translates into an increase in service tax outflow (about 0.62 per cent), which means luxury housing will now become even more expensive, according to experts. They feel the sops are not enough to boost overall growth of the sector.

Developers too feel the affordable segment will gain momentum, but the budget has not turned out to be a game-changer for the real estate sector, which is witnessing sluggish sales over the past couple of years, as the announcements made in the budget are tepid and are aimed at boosting affordable housing in the country.

Rajeev Talwar, executive director of DLF, said, “An additional benefit of Rs 1 lakh on first-time loans up to Rs 25 lakh is expected to boost housing sales in tier-II and III and distant suburbs of metros, but not within the metros where houses are very expensive.”

Although some positive measures have been taken by the government like setting up of the urban housing fund by the NHB with an allocation of Rs 2,000 crore and greater impetus to rural housing fund, these are not enough to drive the overall growth of the sector that has slowed down significantly over the past couple of years. Further, excise duty on marbles has been doubled to Rs 60 per sq ft, which would lead to escalation of construction costs, says Talwar.

The TDS of 1 per cent to be charged on the transfer of immovable property is an obvious move to curb speculation and bring about improved reporting and accountability in high-value immovable property transactions.  Considering that the TDS is to be charged on the gross transaction value rather than net gains, sellers will have a cash-flow impact in situations where the sales are at a loss, or at zero/negligible gains, Talwar adds.

In the luxury segment, the cities have inventory in excess of 21 months with the Mumbai metropolitan region (MMR) touching as high as 47 months, whereas, ideally, the inventory should be in the range of eight to 12 months, said Pankaj Kapoor, chief executive officer of Liases Foras.

Overall, the steps taken in the budget will increase demand and will give a fillip to the real estate sector, making it more consumption-oriented.

Sanjay Dutt, executive managing director – South Asia of Cushman & Wakefield, said, “Given the political compulsions of heading into elections next year, the budget focuses on the middle class and is quite populist in nature. Overall the budget did not meet the expectations from developers, occupiers and investors in the real estate industry as it did not address their concerns on minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZs, recognition as an industry/infrastructure sector, steps to reduce the input costs and encourage more investments in the real estate sector, which is one of the largest employment generators.”

There were no proposals on few key expectations of real estate developers. These include implementation of the real estate regulator and the land acquisition act. All said and done, the Indian real estate sector will continue to struggle with its larger hurdles. While the affordable housing category has been rightly given due attention, provision of adding TDS at the rate of 1 per cent on immovable property exceeding Rs 50 lakh is de-motivating and this will lead to rise in property prices, said Lalit Kumar Jain, chairman and managing director of Kumar Urban Development.

According to the economic survey, real estate and dwellings has a share of 5.9 per cent in India’s GDP and a growth of 7.2 per cent in 2011-12. The growth of the real estate services in particular has been impressive consistently at over 25 per cent since 2005-06 with 26.3 per cent growth in 2011-12. Housing is a basic necessity for human life and is the second largest generator of employment, next only to agriculture.

Realty Firms Hope to Build on FM’s Home Loan Initiative

RAVI TEJA SHARMA, SOBIA KHAN & KAILASH BABAR

Cos expect additional tax benefit for first-time borrowers to spur demand for homes in the . 30-40 lakh category

Finance minister P Chidambaram’s incentive to first-time home loan takers has come as a boon to the real estate developers who have been saddled with a growing pile of unsold stock over the past two years.
The industry expects the proposed incentive in the Budget, by way of additional tax deduction on interest of up to . 1 lakh on a loan of up to . 25 lakh, to spur demand, especially in the . 30-40 lakh category.
Of the 583,513 unsold apartments across the country, 39% cost less than . 35 lakh. In the national capital region, 50% of the unsold apartments are in this segment while the figure is 30% in Mumbai, according to property research firm Liases Foras. In 2012, 42% of homes sold in the country were in this category, with buyers taking a loan of . 25 lakh on average.
In the national capital region, developers say the budgetary proposal has already led to increased interest among potential buyers in Raj Nagar Extension in Ghaziabad, Noida Extension in Greater Noida and along the Yamuna Expressway. “We have got good enquiries already after the Budget. This will help us clear unsold stock,” said Gaurav Gupta, director at SG Estates, which has projects in Raj Nagar Extension.
RK Arora, chairman of Supertech, said most of the enquiries pertain to the segment that stands to benefit from the Budget. Many of those who are calling on developers are also asking them to explain the benefits of the minister’s proposal. The additional deduction of interest of up to . 1 lakh for first-time home loan takers over and above the existing deduction of . 1.5 lakh will cover close to 95% of the interest to be paid on a loan of . 25 lakh in the first year, said Pankaj Kapoor, managing director of Liases Foras.
At the current interest rate of 10.5% a year, the total EMI outflow for the loan amount of . 25 lakh will be . 3 lakh, of which . 2.64 lakh will be the interest component in the first year. With a deduction of . 2.5 lakh, up from . 1.5 lakh earlier, 95% of the total interest burden will be covered, compared with just 57% earlier. Home sales have dropped across the country over the past few quarters because of high interest rates as well as low consumer sentiment.
“Additional demand will be created in this category and it will be a great opportunity for smaller developers to increase their market presence and branding by building affordable homes in this category,” said Sanjay Dutt, executive managing director, South Asia, at property advisory firm Cushman & Wakefield.
In Mumbai, apartments are available for less than . 35 lakh in areas such as Badlapur, Kalyan, Vasai-Virar, Bhiwandi, Taloja, Kalamboli, Kamothe, New Panvel, Road Pali and some part of Karjat and Khopoli.
“Demand for a product in this price range is huge anyway, but with this measure it will become affordable to more buyers and demand is likely to get converted,” said Mayur Shah, managing director of Marathon Realty, which has projects in Kalyan and Dombivli that are priced at . 15-35 lakh.

Maharaja’s ‘ 200-cr’ Bungalow Sold for 20 cr in Fraud Deal

KAILASH BABAR

Scion of the royal family of Rewa in MP files a police complaint over Pedder Road property

The owners of a sea-facing bungalow on Pedder Road, the family of the late Maharaja Martand Singh of Rewa, an erstwhile princely state located in present-day Madhya Pradesh, have complained to the police that the property has been fraudulently sold for . 20 crore on the basis of a fake power of attorney.

Representatives of Pushpraj Singh, a scion of the erstwhile royal family and the sole legal heir to the property, have filed complaints in both Mumbai and Rewa against the transaction which was carried out by Mumbai-based Jamaluddin Shaikh in 2011.

According to the sale agreement, a token amount of . 5 crore was supposed to be paid to Singh for the bungalow, named Rewa Kothi, which is located towards the Haji Ali end of Pedder Road. Of this, . 50 lakh was paid into an account in the Patna branch of HDFC Bank while . 4.5 crore was supposedly paid in cash in several tranches.

Pushpraj Singh said the so-called deal was fraudulent and that no authentic power of attorney existed in favour of Shaikh for the twostorey bungalow which has an estimated market price of . 200 crore. According to him, the family became aware of the transaction when Shaikh and another person arrived in Rewa to complete the deal by paying the ‘balance’ . 15 crore.

“We have not entered into any transaction to sell this property. I don’t even know who these people are… there is no question of receiving any token money for it from anyone,” said Singh, whose wife Ragini Singh stays in the bungalow along with her daughter and support staff.

Shaikh — as per the power of attorney, a copy of which is available with ET — is a resident of Behram Nagar slum in Bandra suburb of Mumbai. However, the address mentioned in the document could not be traced by this paper due to incomplete details.

“The property cannot be sold as there is a status quo ordered by the Supreme Court in an old matter related to the late Maharaja’s will. Even if Maharaja Pushparaj Singh wants to sell it, he cannot,” said Alka Tiwari, chief executive of His Highness Maharaja Martand Singh Charitable Trust, which controls all the properties and assets of the erstwhile royal family.

Singh also has no bank account with HDFC Bank’s Patna Branch, Tiwari said, adding that the property had been sought to be sold in this fashion twice earlier.

“We have lodged a complaint with Rewa police regarding the fake deal and power of attorney. However, they have not registered an FIR (first information report) about this stating that the property is in Mumbai and, therefore, it needs to be registered there,” Tiwari said.

Prakashchandra Buch, the erstwhile royal family’s representative in Mumbai, has informed the Gamdevi police about the transaction and sought help in case anybody tries to wrest control of the property.

“Yes, we have been informed about this disputed transaction in which the said power of attorney has been used and the complainant has sought protection,” said Suresh Chowdhary, senior police inspector, Gamdevi police station. However, he also added the power of attorney was executed in Rewa and, therefore, any probe needed in this matter can be undertaken by police there.

The photographs used for the sale agreement and power of attorney are fake as are his purported signatures, Singh’s representatives said, pointing out that the copy of voter identity card was also forged and that there was overwriting on a copy of his passport used for the unauthorised sale.

Royal Case

  • According to the sale deal, . 5 crore was to be paid to the royal family scion Pushparaj Singh for the bungalow
  • The two-storey bungalow has an estimated market price of . 200 crore
  • Transaction was carried out in 2011 by Jamaluddin Shaikh, who claimed to have power of attorney over the property

Godrej Properties Raises Debt Funds For BKC Project

Paritosh Gajjar

Godrej Properties has raised around R500 Cr as debt for its commercial project at Bandra-Kurla Complex in Mumbai, states ET.

The total investment for Godrej BKC, the project, is outlined to be around R2,000 Cr for the proposed 1.3 Mn sq.ft project to be developed under a JV with Jet Airways.

Godrej is targeting at a revenue figure of R3,500-4,000 Cr out of this project. With an aim to achieve around 50% gross margins, the company is also estimating average realization to be around R25,000 for the initial stages which could scale up to about R30,000-35,000 Cr per sq.ft in three-four years.

An earlier attempt to raise $100 Mn from Singapore government’s sovereign fund – GIC Real Estate for the project in February last year did not go through as the deal was called off later on.

Godrej Properties, after launching a residential development fund worth R770 Cr along with a consortium of global investors led by APG in July last year, was planning to raise R200 Cr by issuing CPs in October.

As on June 30, 2012 GPL was developing 13.76 mn sq. ft. area launched in its thirteen ongoing residential projects. It is also developing 5.37 mn sq. ft. of area through its five commercial projects.

The new commercial hub of Mumbai, BKC, has seen the interest of investors rising as they shift dependence to commercial projects which provide steady rental yields and appreciation compared to residential units.

Morgan Stanley was in talks with Wadhwa Group to invest around R900-1,000 Cr ($186 Mn) in an office development project in Mumbai.

Among the deals in the office space, HDFC Bank was likely to buy commercial space in Lower Parel for R220 Cr.

The latest major office space deal in Mumbai was also concluded in Lower Parel when pharma firm Cipla bought office space in Peninsula Business Park in a deal worth over R270 Cr.

One of the major deals in the space was the DLF-Lodha one in which DLF sold a land parcel to Lodha Group for R2700 Cr last year.

Budget may boost budget hsg in metropolitan region: Experts

Sudhir Suryawanshi

As some respite for those looking to buy homes this year, provisions and incentives in the 2013-14 budget may give affordable housing in the Mumbai metropolitan region a boost, experts feel.

The budget has specified that on a on a first-time home loan of up to Rs25 lakh, theadditional interest rebate is of Rs1 lakh. However, this applies only for houses that cost up to Rs40 lakh. “Almost 90% buyers obtain home loans within the Rs8 lakh to Rs25 lakh bracket. We might see a boost in affordable housing in the metropolitan region, particularly in Kalyan, Dombivli, Karjat, Vasai, Virar and Panvel,” said MD Shivam, a builder.

Managing director of Liases Foras, Pankaj Kapoor said, “Developers will now be interested in affordable housing instead of high-end luxury housing. They will have to rework their strategy.”

However, managing director of Puranik Developers Shailesh Puranik feels that the current budget is nothing but an eyewash. “The government should have increased the rebate bracket to Rs50 lakh instead of Rs25 lakh,” he said, adding that buyers are already paying several taxes and that introducing new ones will not only overburden them, but affect the sale of houses.

Moreover, the government has also taken some steps to curb the unaccounted money in the real estate market. “If the agreement value of the property is shown less than the ready reckoner rate, then the income tax will be considered on the basis of the latter. If the difference is more than Rs50,000, then it difference will be taxable. This move will curtail the flow of the black money,” Kapoor added.

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