Big fish eye realty backwaters
Small cities have become the favourite playfields of major realty groups as a number of projects have been launched in Tier II and III cities of late, writes Geetu Vaid

Construction on in full swing at Impact Projects and SARE’s joint venture in Amritsar

It's the age of small town now, be it cricket or real estate. It's not just Sachin Tendulkar who has recognised the fact that small towns hold the promise of providing the maximum talent to the world champion Indian cricket team. India's major realty players, too, seem to have woken up to the immense potential that small towns and cities hold for expanding their business and are making significant investments in these towns.

Metros and big cities have, no doubt, been the favourite playfields of major real estate companies of the country for years on end and one can see the projects developed by big names in the industry virtually rubbing shoulders with each other in metros and their swish suburbs. Even though most of India doesn't live in the top few cities, most of the big names of the industry did confine themselves to these because you were not considered big in the industry till you had a couple of projects at least in metros like Delhi, Mumbai, Bangalore Chennai etc. These were the essential listings in the portfolio of a national-level builder and real estate company, but all this is changing now as several of these building giants are now trudging slowly towards the India that lives in small towns or what are technically known as Tier II and III cities.

The 'e-generation' of today has a higher educational background and more spending power. These factors are compelling this generation, more particularly in Tier II and Tier III cities, to move out of the walled areas of these cities and to go for the urbanised regions in their own city which are being developed by the real estate builders. They look for the most modern comforts and facilities which have become an important part of their lifestyle. — Ashwani Prakash, ED, Paramount Group

Price Index Karnal Sector 2 18,000 to 20,000 Sector 6 33,000 to 36,000 Sector 7 16,000 to 19,000 Sector 9 20,000 to 24,000 Sector 9-A 21,000 to 23,000 Sector 13 17,000 to 19,000 Model Town 30,000 to 31,000 Parsavnath 8,000 to 9,000 Prem Nagar 13,000 to16,000 Sector 6 to 9 29,000 to 32,000 Sector 12 to 14 31,000 to 34,000 Price in Rs per sq yd Flats in different Areas RS 1,600 per sq ft To Rs 2,000 per sq ft Note: The prices may vary as per the size of the plots and location, and are subject to change from time to time. Source: Nirmal Infrastructures. Mohali nirmalinfrastructures@yahoo.com

Plush residential projects loaded with the latest in interiors and building designs, 24x7 security, club houses, swimming pools, play areas etc no longer have a Mumbai or NCR suburban address but can be seen at places like Khanna, Gobindgarh, Jammu, Pathankot, Bathinda, Barnala, Kulu, Saharanpur, Kurukshetra etc. Top league players like DLF, Omaxe, Ansals, Emaar MGF, Unitech etc are spreading their wings in cities with a population of less than a million.

People in these small cities are now fully aware of the latest trends and facilities that are available to those in big cities and they want these for themselves. Improved economy of the country as well as rising income levels have also created a strong customer base in these towns.

"Tier II and III cities are emerging as hot destinations for long-term investment for end users and investors. Fast- improving infrastructure, favourable government policies and demand for quality housing have led to a high growth rate in these cities. A variety of businesses, including retail, IT and others, too, are eyeing Tier II and Tier III cities in India as highly attractive destinations. With high levels of demand existing in these cities and comparatively low supply, the developers are exploring these unexplored territories", says Rohtas Goel, Chairman and MD, Omaxe Group. The group has penetrated tier-II and tier-III cities with more than 40 residential and integrated township projects in Haryana, UP, Rajasthan, MP, Punjab etc.

Other big time players like the DLF and Ansals groups, too, have launched a number of projects in small cities all over the country. "We have projects in 23 locations, including Jhansi, Kochi, Jammu, Pathankot, Amritsar etc, and the company has at present invested close to Rs 850 to 1,000 crore in these projects", said Ranjeev Kalia, head Sales and Marketing of Ansals Buildwell Ltd. during the launch of a housing project in Kulu, HP recently.

Key movers

A major attraction for big players is the easy availability of land here. "While land is a scarce commodity in and around the big cities and gobbles up a major chunk of the total investment, small towns still have plenty of land available at relatively cheaper rates. This keeps the overall cost low. For example while a villa in a place like Gurgaon will cost around Rs 1.5 crore because of high land price, the same will cost Rs 47 lakh in a place like Jammu or Jhansi and Rs 51 lakh in Pathankot", says Kalia.

Relative stability of the realty market in smaller pockets is another factor that has lured big players to these small cities. "These markets are not as prone to fluctuation as some of the hyper markets that see valuations rise at a fast pace, but also see downturns when the market is affected in an adverse way. The slower markets in Tier II and III cities offer a stable option when it comes to investors as well as developers", says Jaivir Singh, Vice-President, Impact Projects Pvt. Ltd. that has collaborated with SARE Group for projects in Punjab.

Apart from this as in small cities the competition is less, selling is relatively easier as there is the novelty and exclusivity factor at work there. Small local builders can’t provide what the experienced players can and customers generally have more confidence which reflects in the sale volumes. Thus as far as profit margins are concerned there is not much of a difference there for builders.

"Customers just lap up a good quality product and with the rise in disposable income and aspirations of young home buyers, these cities have woken up to a demand for homes in the luxury and affordable luxury segment", says Sanjiv Saddy, Executive President, Emaar MGF land Ltd. group that has substantial land parcels in Amritsar, Jalandhar and Ludhiana and in towns like Indore and Jaipur.

The platter of a home buyer in small cities, especially in the region, is thus full of a host of options ranging from plotted developments, apartments and independent floors in housing complexes and luxury villas. Major real estate groups make the most of their experience and expertise and come up with products that are the most suitable for a particular market. "The products that are brought to these markets are somewhat different due to cultural, social and economic contexts as compared with that of the main line markets. Therefore, a market analysis mixed with product and customer profiling is the key pre-entry into such like markets", says Jaivir Singh.

Profits and sale volumes

The high level of demand and comparatively low supply makes the ventures in smaller cities profitable ones for realtors. "The profit margins in small cities are more as the cost of construction material is low and the FAR is high so the builders can construct more number of units at a lower cost and can sell at good margins. This also helps the customers as the builders can offer schemes and discounts due to high profit margins", says Mohit Arora, Director, Supertech Limited. The group has projects in Hardwar, Meerut, Moradabad and Rudrapur.

Local players also benefit from this as in many of these towns the projects are usually in partnership with local players who sort of provide the land and get other clearances for the "big brother" who adds the sheen of its experience and building excellence to a project and for consumers it is a win-win situation.

REALTY BYTES
Four Seasons hotel at Delhi One

India's leading green developer 3C Company recently announced a tie-up with internationally renowned Four Seasons Hotels and Resorts to develop a five-star hotel at its project — 'Delhi One' spread across 12.5 acres of mixed land use adjacent to the DND flyway in sector 16 B, Noida. The strategic move between the two companies was sealed by signing the LOI and thus ensuring that Four Seasons will not develop any other five-star property in Delhi and Noida for the next 25 years.

The hotel will be ready and functional by 2014. Delhi One would also feature the Four Seasons residences which would be serviced by the hotel. Speaking on the occasion, Vidur Bharadwaj, Director, The 3C Company, said, " The tie up with Four Seasons marks the grand emergence of Noida in the International Real estate sphere."

Gold Souk enters hospitality sector

Real estate developer Aerens Gold Souk International Ltd. (AGIL) is venturing into the Indian hospitality sector through a strategic alliance with US-based hospitality giant Wyndham Hotel Group.

AGIL will build four hotels — one each in Kochi, Chennai, Ludhiana and Hisar under Wyndham Hotel Group's Ramada brand. Plans to set up four to six more hotels in Karnal, Doraha, Jagadhari and Ambala under Ramada's brand are also being finalised. Also, in pipeline are talks of setting up a Hotel Management Academy/Company in collaboration under the guidance and technical know how of Wyndham Group.

Bhoomi poojan at Golfforeste

The Paramount Group performed bhoomi pujan of its new project 'Golfforeste' recently . The new affordable luxury housing villas located at Site C, Greater Noida . The project is a next step of evolution, with a unique combination of Golf Course and forest to enhance the living experience of the residents.

On the same occasion, the commercial centre , Golf Mart and Pine and Oak studio & suites towers were also launched. Spread over an area of approx.100 acres, comprises two, three and four BHK, G+2 and duplex floors. ranging from Rs 30.89 lakh with a minimum area of 1507 sq. ft to 3008 sq ft priced at Rs 61.66 lakh. — Agencies

REALTY GUIDE
Best option
B K Sanghi

Q. I am an NRI living in Toronto (Canada). I want to invest around Rs 50 lakh in or around Chandigarh as a long-term investment. What are the options available for me? I am interested in buying a plot.

— A.S Sangha

A. A sum of Rs 50 lakh would not fetch you a decent deal within Chandigarh as realty prices have shot up here. However, a large number of options are available in Chandigarh's vicinity. Zirakpur, Kharar,Dera Bassi, Kalka and Mullanpur will be good investment options for you as you have long-term investment in mind. Mullanpur, which has been projected as New Chandigarh, is the new kid on the realty block in the area. It is being developed as Punjab's first eco-township. With mini townships being developed by major realtors like DLF, Omaxe and an upcoming urban estate by Punjab Government controlled Greater Mohali Development Authjority (GMADA), the area holds a lot of promise. Since a lot of care is being taken to develop the area according to the master plan there is no threat of haphazard construction and unregulated growth here.

Authority to rent property

Q. A friend of mine is living in a rented house for the past one year. Sometime back he came to know that the property rented by him is not registered in the records of the revenue department in the name of person who had rented it out. He has only a special power of attorney in his name, in which he has been authorised to sell the property by appearing before the registrar etc. But in this Special POA he has no authority to give it on rent or on lease in writing nor is he authorised to use it himself. Can S POA give this property on rent or lease it out, if he is not empowered to do the same. Is there some legal hitch if my friend continues to live in such property? Person who gave this Special POA is an NRI.

— P.S Panesar

A. From your query it seems that the NRI owner had given special POA to his friend or well-wisher for selling the property only. Technically speaking your friend is in illegal possession of the property. An 11-month rent agreement might have been signed by your friend and the S POA holder. But as the S POA is not authorised to rent out the property, your friend could be in trouble if the actual owner comes to India and objects to the arrangement. It is also possible that the rent might not have reached the actual owner.

It is always desirable to enter into a rent agreement with the actual owner or GPA holders, who hold the right to rent out the property on bahalf of the actual owner. The best course of action now will be to vacate the property immediately in order to avoid legal complications at a later stage. Your friend should immediately inform the actual land owner and explain his position regarding how the SPOA took him for a ride. If there are rent receipts and payment has been made through cheques, then he should preserve them in case of any legal dispute later on.

The writer is president of the Haryana Group Housing Federation. The column will be published fortnightly. Readers can send their queries at Real Estate Desk, The Tribune, Sector 29, Chandigarh (by post) or through e mail at realestate@tribunemail.com

green house
They, too, need sunshine
Satish Narula

Fortnightly alert This is the perfect time to sow your summer annuals. Normally the tail end winter annuals like petunia, salvia etc are long lived and keep flowering even till May. As one keeps on seeing flowers, there is a chance of forgetting to plan for the future flowering and sowing. This may result in a long gap in your garden. So act now to keep your garden blooming in summers too.

It is difficult to change and suppress natural instincts as these always come to the surface. This is true in the case of humans as well as plants and animals. We as human beings were once very close to Nature. But with the growth of civilization humans slowly moved away from Nature but soon there was a yearning to return to its lap. Home gardens were born as a result of this yearning of humans to bring Nature into their abodes. Having plants indoors was also a way of staying close to Nature. But in this desire to stay close to Nature, humans became insensitive to the needs of the plants that were kept indoors.

First of all let me make one thing clear, there is no plant that is truly an indoor plant. So the term ‘indoor plant’ is, in fact, a misnomer. You may call them shade-loving plants but never indoor plants. In order to understand their nature to grow indoors, we will have to know about their origin. Most of the so -called “indoor” plants are , in fact, a selection from rain forest flora. These grow in a climate where they get a lot of humidity, partial shade, a micro-climate and protection on all sides. Once this aspect of their original habitat is understood, then you can grow them successfully indoors.

By keeping the plants indoors we are, in fact, subjecting them to all kinds of stresses and assaults. Complete shade, no open air, less humidity, one-sided source of light, irregular watering, assault of coolers or air conditioners etc. are all very damaging for these plants. The maintenance tips mentioned in gardening guides and books can just serve as guidelines as there are no generalised rules for maintaing these plants as each species grows differently in different conditions.

ACs etc reduce the humidity level of rooms or halls as they draw moisture and moisture is a must for many of these plants. So one should keep rotating these plants every fortnight by allowing them to “breathe” in green shade or in a net house. This way these will recuperate from the stress of staying indoors. The plants which are kept inside for a long time look sick. The inter-nodal length of the stems increases and the leaves look abnormal. If kept in a place that has light source on one side, these plants bend on the side of the source of light. One should keep at least two sets of plants ready. In case you are taking these out for keeping in controlled conditions like green shade net house, it is alright or else, they should be taken out in stages, first keep them out in verandah and then under trees etc. They respond better if you provide them company rather than keeping them individually as a group of plants creates a micro-climate of its own where they support each other.

One thing that is most important is the selection of species for indoor display. Know about your plants and keep the poisonous plants away and out of the reach of children. See the accompanying picture, the plants kept indoor are dieffenbachia, one of the most poisonous plants known. An accidental ingestion of its sap may even cause partial paralysis of trachea imparing speech for a few hours. It is because of this reason that it is also known as ‘Dumb Cane’.

This column appears fortnightly. The writer is a senior horticulturist at PAU and can be reached at satishnarula@yahoo.co.in

tax tips
No escaping tax liability
S. C. Vasudeva

Q. I hade purchased a 300 sq yd. plot in 2008 for Rs 7,00,000 by taking a loan in my wife's name. I had spent Rs 25 lakh on construction on the plot. The construction work was completed in October, 2009. I sold the house for Rs 80 lakh in financial year 2010-2011. Kindly advise:

• What are my tax liabilities?
• If I get Rs 40 lakh by cheque and Rs 40 lakh in cash, then do I need to pay tax on Rs 40 lac received by cheque after depositing the money in my account?
• My wife was a government employee and retired on January 2, 2008. Assuming that my salary is enough for both of us, can I show my wife's salary from 2003 onwards and all the amount that she received after her retirement for raising money for constructing the house?
• What are the best options to save the tax in this case?

Investing sale proceeds

Q. I had sold a residential plot in Haryana, on May 3, 2010 (the date of registry) for Rs 9,90,000 (out of this an amount of Rs 7,90,000 was received by me on the day of registration and Rs 2 lakh was received earlier as token m money on March 15, 2010). The plot had been allotted to me by HUDA in September, 1991 and I had paid Rs 90,720 for it. 25 per cent of the total cost was paid by me up to October 3, 1991 and the balance amount of Rs 68,040 was paid in six annual instalments of Rs 11,340 each. The last instalment was paid on September 10, 1997. The possession of the plot was given to us by HUDA on September 2, 1996.

Subsequently, at the instance of the court, I also had to pay the enhanced price on two occasions (Rs 45,783 on October 6, 2005 and Rs 2,03,025 on April 23, 2009). Apart from this, an amount of Rs 7,260 was also paid by me on June 30, 1997 towards the cost of some increased area of the plot. Thus the total cost price paid be me was Rs 3,46,888. The entire sale consideration of Rs 9,90,000 was invested by me for purchasing a residential plot in Punjab on May 12, 2010 (the date of registry) for Rs 18 lakh in the joint names of myself and my son (my share being 75 per cent). I also took a loan of Rs 5.20 lakh from HDFC for purchasing this plot, as the money received from Haryana’s plot was not enough. Would you please give advice on the following points:

• Please confirm whether capital gains tax is payable by me even if I don’t construct a house on the newly purchased plot in Punjab, as I had already invested the entire sale proceeds of Haryana’s plot for purchasing the residential plot in Punjab.

Succession clause

Q. My father's sister who was unmarried died intestate recently. Both her parents are no more. Out of her brothers and sisters only two brothers are alive. Please clarify as to who will be the legal heirs. Will only the living brothers be considered her legal heirs or children of the predeceased brothers/sisters, too, can be considered legal heirs as per the Hindu Succession Act.

— Raj Kumar

A. General rules of succession as per the Hindu Succession Act 1956, applicable in case of a female Hindu who has died intestate, are specified in Section 15 and 16 of the said Act. The property devolves firstly upon the sons and daughters (including children of any predeceased son or daughter) and the husband. Since your father's sister was unmarried, the above provisions would not be applicable. However, according to rule laid down in Section 16 of the aforesaid Act, property would be inherited by the heirs of the father i.e. her two brothers simultaneously. This rule would apply even if the property was inherited by her from her father or mother.

Declaring plot purchase

Q. I and my wife jointly purchased plot for Rs 33 lakh. Should we show it in the IT Return, as per rule more than Rs 30 lakh (individually) has to be declared. Kindly guide.

— Deepak Kothari

A. In the Schedule relating to AIR the requirement is to indicate the purchase of an immovable property by an assessee at Rs 30 lakh or more. Therefore, in case the amount of Rs 33 lakh has been paid by you and the property is in the joint name of yourself and your wife, it will be essential to give this information in the said Schedule. However, in case your contribution towards the purchase of the property is less than Rs 30 lakh, it may not be essential to give the information in the tax Return.

Discount on deal

Q. I am a Central Government employee. I recently purchased a house and made the down payment of 15% of its cost from my own savings through cheque. Since I do not have any alternate source of income, I believe I have already paid due taxes on the amount in past years. Now on bargain I managed to take a handsome discount from my broker which he paid in cash. I have signed a receipt for the same and kept a copy of it. Am I eligible to pay any more taxes on my own already taxed money which I have got refunded as a cash discount? — Shashi

A. I assume that the discount from the broker is in respect of the purchase of the house. If that be so, the cash discount received by you would go to reduce the cost of house. The amount of discount received is not taxable as the same is linked to the purchase of the house.

The writer can be contacted at sc@scvasudeva.com