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area watch: baddi & mullanpur
launch pad
tax tips
real
trends
loan zone
Ground Realty
realty bites
Spurt in demand for warehouse space
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area watch: baddi & mullanpur
Baddi in Himachal and Mullanpur in Punjab are almost rubbing shoulders with each other, thanks to the Mullanpur-Baddi-Siswan road. The two areas have a lot of similarities on the realty turf. Proximity to Chandigarh and its satellite towns — Panchkula and Mohali — is one factor and strong financial backing by government is the other. Besides, both were projected as the flagship projects of the respective state governments, making these attractive realty destinations — Baddi, by virtue of being a part of the Baddi-Barotiwala-Nalagarh (BBN) industrial belt where the central government’s industrial package had lured a large number of industries. This employment-generating pharma hub was expected to have a booming realty scene with the demand for residential, commercial and office space shooting steeply. Mullanpur’s claim to fame, on the other hand, lies in it being the first Eco township of Punjab. Starting off with a well-laid and detailed master plan, it has blossomed not only into ‘New Chandigarh’ but also into Punjab’s showcase destination over the past three years. Deputy Chief Minister Sukhbir Badal recently okayed the extension plan of Mullanpur, besides giving the green signal to PUDA to acquire more land for its proposed project and make way for developing the area as a magnet for futuristic development with state-of-the-art facilities. But in spite of the similarities, at present it apeears to be a case of contrast as real estate values have taken a hit in the Baddi area, while Mullanpur has seen steady appreciation over the past few months. While hardly any new residential projects have been launched in Baddi, Mullanpur has biggies like DLF and Omaxe, besides GMADA and groups like Altus etc unloading their ambitious township projects. The buyers are fewer in Baddi, while homes are selling like proverbial hot cakes in New Chandigarh. DLF that recently launched its independent floors in Hyde Park in Mullanpur reportedly had a 100 per cent sale within a matter of days, claimed Rakesh Kerwell, Director, North, of the group. GMADA’s Eco City project had elicited a tremendous response last year and currently the prices are in the range of Rs 23,000 to 30,000 per sq yd and apartments are in the Rs 60-80 lakh bracket, depending on the size and developer. An international-level cricket stadium, 150-acre Medi-City and educational institutions are some of the projects that will make this area a realty goldmine in the next few years. Baddi’s bane The main reason for Baddi’s poor report card of has been cited as the expiry of the 2003 central industrial package for BBN in March 2010. A number of industries have packed their bags and moved on, leaving the doors open for realty slump in the belt. Though the BBN was earlier being pegged as an upcoming realty destination, the area has failed to come up to the expectations of the people working here. Thousands of industry executives commute daily from Chandigarh and its periphery to work in the several industrial units of Baddi. There are as many as 38,790 industrial units in Himachal at present in which an investment of Rs 16,287 crore has been made and 2.67 lakh persons have been provided employment. As many as 70 per cent of these industries have come up in the BBN and the investment figures run over Rs 30,000 crore. Though efforts were made to develop the BBN area as a planned industrial cluster with space earmarked for residential, industrial and commercial pockets, its non-implementation has led to haphazard growth, thus leaving little scope for planned development. Poor infrastructure support has been the bane of this area, says J.S Ahlawat of Ahlawat Developers that is bringing up Himachal One project in Baddi. “The expectations regarding housing and civic amenities of the industries and the workforce
that came to Baddi were really high and Baddi has not been able to measure up to that,” he added. With quality education, health and recreational facilities failing to come up in the BBN belt despite the coming up of a few universities and a multiplex there is little that attracts a company executive to stay back in the BBN after a day’s hard work. “Improvement in infrastructure will go a long way in improving the realty scene here,” says L.C. Mittal, Director of Motia Developers that has come up with a commercial complex Motia Plaza in Baddi. Saying that the expiry of the tax holiday is not the main reason for the lukewarm property market, Ahlawat explains that according to the terms of the central package, the sops will effectively remain in place till 2020. “Moreover, the companies that have come here include big names like Cadbury’s, Dr Reddy’s, Colgate Palmolive, Procter and Gamble, Hindustan Unilever, Cadburys, Johnson & Johnson etc which are not just into money making but are serious about CSR also. So end of tax sops is not going to end their sojourn here. Thus it is difficult to write off the area completely as it is still a good investment option. The prices here are much below those in Chandigarh, Panchkula and even Mullanpur for that matter. A 3-BHK is priced at around Rs 30-40 lakh and a 2-BHK in projects like Himachal One can be had for Rs 20.5 lakh. While the same in Panchkula will cost around Rs 70-90 lakh. Another factor that makes Baddi a good investment option is the rental returns. As Ahlawat puts it, a 3-BHK costing Rs 30 to 40 lakh can fetch rent of up to Rs 25,000 while the same may not fetch more than Rs 15,000 in Panchkula. Similarly, a two BHK costing Rs 20.5 lakh can fetch upto Rs 9,000. Watch out for Stretches along the Baddi-Siswan road are also evoking the interest of those wanting to stay close to the City Beautiful and away from the hustle and bustle of BBN. “The area can develop as the vast stretch of undeveloped land can be plotted into a planned habitation thus offering an advantage which the other areas like Zirakpur, Kharar, etc., have failed to offer due to the haphazard mushrooming of flats, malls and commercial space,” opines R.K Kohli, a senior company executive who commutes from Chandigarh to Baddi daily. Measures like the widening of the Siswan-Mullanpur T Point after the receipt of the environment clearance from the Ministry of Environment has also added to its value.Plot sizes of 300 to 500 sq yards are being offered on this road at about Rs 13,300 per sq yard. The Punjab Government has also been making efforts to develop the Chandigarh-Siswan road as an alternative route to Kurali to take the pressure off the Chandigarh-Kharar-Kurali highway. This will ensure planned development of the area thus attracting the industrial clan from the BBN belt. PROPERTY PEEK An industrial plot which was selling for Rs 20 lakh a year ago is now available for Rs 12 to Rs 15 lakh. Land which was registered for Rs 1.5 crore per bigha on the Sai Road is now available for Rs 45 to Rs 47 lakh. A 3 BHK flat measuring 1100 sq feet which was available at Rs 20-Rs 22 lakh now is fetching Rs 13 to Rs 14 lakh. Studio apartments which fetched Rs 6 lakh to Rs 7 lakh earlier fail to find buyers even at Rs 5 .5
lakh.
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launch pad
Godrej Properties Ltd. (GPL) announced the launch of its residential project, Godrej Summit, in Sector 104, Gurgaon earlier this week. Spread over 21 acres, this project will consist of 11 high-rise towers and offer about 1,200 homes across 2 mn sq. ft of space. Customers can choose from 2, 3 4 BHK, and penthouse apartments ranging in size from 1,250 sq. ft. to 4,500 sq. ft.
The location is close to the proposed 150 m wide Dwarka Expressway, which is currently under construction. The site is strategically located in the high growth corridor of Gurgaon urban area and is also well connected to the airport, railway station, NH8 and Gurgaon Central Business District. Designed on the principle of sustainability, the project will have extensive use of eco-friendly material besides integrating environment-sensitive passive architectural solutions to minimize the carbon emission associated with the development. Features like rainwater harvesting and solar heating and lighting will be incorporated in the project design. It is a joint development project, which Godrej Properties is developing in partnership with Zara Sanya. Alfa square in Greater Noida Real estate group Vardhman Estate & Developers Pvt. Ltd officially announced the launch of its fully integrated commercial project Vardhman Alfa Square in Greater Noida, Pari Chowk. Spread over 5 lakh sq.ft. area the project is located at 3-3 acres side corner plot at Surajpur-Kasana road. Alfa Square is an integrated commercial project will have a business centre, hotel and high street stores. The group is offering 12 per cent assured return to investors till possession. New feature Finding a home requires a lot of research on properties available in one’s desired location. Groffr.com has started a new feature which will enable buyers to compare projects across location, price, budget, sizes and amenities in a simple tabular format. The new feature will assist buyers in taking a better decision as it lets them organise different projects and helps them to compare prices, features and specifications side-by-side. The buyers can add up to four projects of their choice in the same page by using this compare tool to quickly scan the projects with better options at the best price. — Based on information provided by the developers
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tax tips
A.Your queries are replied hereunder: A loan from a relative should be taken by an account payee cheque only. It will be advisable to exchange a letter confirming the grant of loan indicating the Permanent Account Number of the person from whom the loan has been taken. If the loan is interest bearing, such a letter should specify the rate of interest and terms of repayment. The interest paid/payable on such a loan would be allowable as a deduction against the income from house property provided evidence in this regard is available and if so required, can be produced to the authorities.
The interest on loan taken for purchasing a property on Power of Attorney basis should be admissible as deduction under Section 24 of the Income-Tax Act 1961 (the Act) against the income from house property provided the possession of the property has been taken by you. It may be added that the Supreme Court has recently held that transfer of property on GPA basis is not legally enforceable.
Can I claim exemption on buying a house in London?
A.You will have to invest the entire amount of net consideration i.e. Rs 2.50 crore less the amount spent wholly and exclusively in connection with sale of the plot in order to save the amount of tax on the capital gain. The amount will have to be invested for the purchase of a residential house within one year before or two years after the date of sale or utilised towards the construction of a residential house within three years after the date of sale. In case you are not able to utilise the amount for either of the above purposes before the due date of filing the return, you will have to deposit the net consideration in a bank account under the capital gains scheme account. The amount so deposited can thereafter be withdrawn for the purposes of utilisation of purchase or construction of the residential house as the case may be. The acquisition of house in London may not enable you to get the relief from the taxability of capital gain in view of the conflicting decisions of the Income-tax Appellate Tribunal on this issue.
How much amount can I remit abroad in a year?
Q.My son who is settled abroad is planning to purchase a residential house with my help. Kindly advise how much amount I can remit abroad in a financial year to him for which no permission from IT Department\ ED will be required.
A.You can remit a sum of $ 2,00,000 to your son without any permission from the RBI. IT authorities can’t question such a remittance made to your son as gift, if the same has been made out of your declared sources. The gift so made is not taxable.
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real
trends
So
apartment designs have gone ‘cool, chic and contemporary’ with an eclectic
mix of design and functional elements. Almost all new projects being launched
in the tricity region come “embellished” with modern amenities, high
quality furnishings and decor. These stylish apartments offer open-plan
kitchen and living areas, luxury bath and shower rooms, spacious bedrooms with
built-in wardrobes, wooden floorings, wall paper, textures, imported tiles and
other designer fixtures. Sharing a builder’s perspective about this trend,
Sanyam Dudeja, COO, Punjab, of the Taneja Developers and Infrastructure Ltd. (TDI),
that has township projects coming up in Mohali, says, “It is not so much the
size that matters, but the overall aura of the home. Buyers now prefer homes
with a distinct designer touch. It should be swish, relaxing, and most of all,
gratifying.” It is to cater to this trend that realtors, too, are laying
more emphasis on giving a designer edge to the apartments to make these smart
homes. “Right from the inception of a project to the final touch-up, smart
features and interiors are the top priority,” adds Dudeja. The trend that
started in the region with the popularity of modular kitchens some years back
has slowly led to the concept of the whole house being unique and designer,
says Chandan Singh, Executive Director, Aeren R Enterprises. With home buyers
becoming ‘aware and demanding’ about the interiors and fittings, a bigger
chunk of the total cost of a residential unit is being spent on providing
these to them. “The approximate division of cost covering the construction
and land is 60:40. So we can safely say that if a flat costs Rs 65 lakh then
almost Rs 38 lakh is spent on giving a good product to the customer and the
rest is the cost of land. And a major portion of this is spent on providing
quality interiors and branded fittings,” says L.C. Mittal of Motia
Developers that has residential projects like Royal Oasis and Royal Palm
coming up in the tricity area. Little wonder then that specialised interior designers have become key components of the construction team in residential projects in this region. With
the average homebuyer “age bracket” going down substantially, the younger
generation is looking for not just a simple home but a home which matches a
luxury villa or an apartment. There is also demand for CCTVs, remote control
switches, mobile signal boosters, cable connectivity, wifi mobility etc. As
Ashwin Duggal, interior designer for TDI homes says, “In the age of Internet
and technology, smart homes have become more than relevant, especially for the
well-travelled clientele, which is always on the move. Smart homes integrate
all smart features and electronic devices, allowing centralised control which
improves convenience, energy efficiency and home security. Nowadays, one
important factor that customers look out for while buying homes is convenience
coupled with luxury.” Apart from the “decorative elements”,
specifications like earthquake resistant RCC-framed structures, treated
hardwood doors and windows, emulsion paints for interiors and weather-proof
emulsion for exteriors, laminated door paints, modular kitchen with modern
fittings, vitrified tiles and provision of lifts and escalators are also being
preferred by the home buyers. — Geetu Vaid
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loan zone
A.Self-employed people can find it hard to get approval for a traditional home loan. This is because those having their own business or enterprise benefit from tax offsets surrounding income and expenses which make it difficult to show the banks exactly what their income really is. However, the current mortgage market does cater for this growing group of consumers and offers a variety of ways to get finance for a property. Lenders usually get apprehensive despite the fact that many self-employed are financially very strong and have secure work. Banks like regular income, proof of savings and financial records dating back at least two years. If you are self-employed then making every effort to ensure your personal documentation such as tax returns and bank statements are up to date should be a priority. If you have proof of income, a savings history and a tax return for the previous two years, then applying for a home loan should be no different than that for a salaried employee. If you can’t provide this paperwork to the lender, you will probably have to accept the fact that you won’t get a traditional home loan. Borrowers applying for a home loan will need to have a clean credit history and proof of identity. However, higher interest rates are usually applied to these loans, depending on the perceived level of risk by your lender. Lenders Mortgage Insurance and higher interest rates can quickly add up so it is important to do your research before committing to any loan. There may be other fee involved for a low-doc loan, although the more documentation you can provide, the less it will be. — Readers can send in their home loan related queries at
realestate@tribunemail.com
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Ground Realty
Here is a check-list which a house builder should keep handy for use whenever the RCC slab of his house is to be laid:
Before starting concreting work nHave the shuttering plates been fixed properly and securely? Checks to be performed during concreting work Once the concreting has been started, perform the following checks during the laying of concrete: — This column is published fortnightly
Checks to be performed after concreting work
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realty bites
Growth in bank lending to realty drops to 4 pc in June: Report
The growth in bank lending to commercial real estate has declined sharply to 4 per cent in June this year against 23 per cent in the same month last year, property consultant Knight Frank said in a report. Quoting RBI data, the consultant said the outstanding bank credit to the realty sector stood at Rs 5,31,300 crore till June this year and out of that the home loan segment accounted for 78 per cent. “As per the June'12 RBI data, the outstanding bank credit to the real estate sector is Rs 5,313 billion. 78 per cent of this exposure is towards the housing loan segment and the remaining 22 per cent is to the real estate developers. “An evident trend is the decline in banking sector's exposure towards commercial real estate lending. The growth has come down from 23.2 per cent in June'11 to just 4 per cent in June'12,” Knight Frank said. The waning interest of banking sector towards commercial real estate lending is reflected in the decline in loan exposure growth rate, it added. The property consultant said the lower economic growth has hit demand for both housing and commercial properties. “Since demand for property is a derived demand, the overall economic situation has a bearing on the real estate sector. The lower growth had a significant impact on demand for commercial and residential property during the last year. While the initial signal was decline in absorption, it is fewer project launches now, it said. The report further said during the five-year period between FY08-FY12, the sales value of the real estate sector declined by 15 per cent but net profit fell by almost 67 per cent primarily on account of interest cost going up five fold. “Even while property prices rose during this period, the industry has not managed to surpass the FY'08 sales value clearly indicating the larger dent on sales volume,” it said. Knight Frank said declining property sales coupled with companies’ stretched balance sheet would "remain a concern in the short term leading to a moderation in property prices in some markets”.
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Spurt in demand for warehouse space CBRE’s latest report titled “India Logistics Market View”, has projected an increased demand for logistics spaces across the country in H1 2012. According to the report, the demand for logistics and warehousing spaces was not only limited to leading cities such as NCR (National Capital Region), Mumbai and Bangalore, but was also spread across the leading tier II cities.
E-tailers invested heavily into strategically located assets, and have been taking up quality warehousing space across India, primarily in NCR, Mumbai and Bangalore. However, the availability of large land parcels at relatively low cost, connectivity to multiple markets across states and industrial clusters, has led to the emergence of some tier-II and tier-III cities as favoured destinations for the development of logistics parks and warehouses. Rental values witnessed growth across most micro-markets due to higher demand for warehousing and logistics facilities. The coming months are likely to witness additional supplies across cities, which will positively impact transaction activity in these locations. Commenting on the findings of the report, Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said, “The rising level of activity in logistics and warehousing space across metros as well as tier II cities is testimony to the growing confidence of domestic and international retailers in India. Factors such as enhanced connectivity, implementation of various reforms and completion of major infrastructure projects are expected to further augment the logistics sector across India.” FMCG majors, white goods and consumer electronics firms are also on an expansion spree and are steadily increasing their footprint across the country. Built-to-suit options have been the preferred mode of expansion for most occupiers, with large sized transactions of around 10,000-15,000 sq ft of warehousing space being reported in the first half of 2012.—
TNS
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Baddi in Himachal and Mullanpur in Punjab are almost rubbing shoulders with each other, thanks to the Mullanpur-Baddi-Siswan road. The two areas have a lot of similarities on the realty turf. Proximity to Chandigarh and its satellite towns — Panchkula and Mohali — is one factor and strong financial backing by government is the other.
Q.I intend purchasing a residential house. I have a few doubts which I would like to clarify in this regard:
Q.I am an OCI (Overseas Citizen of India) and hold a British Passport. My wife and I were both NRIs and held Indian passport earlier. A plot in Mohali was bought for Rs 40 lakh in 2004-05 by my wife and was registered in the same year. We are planning to sell this plot now. The payments for the entire amount were made through my wife’s NRE account. She will get about Rs 2.50 crore for the property. I am planning to invest the sale proceeds to buy a house in London. Does it matter whether the investment in India or abroad is in a residential house to get the exemption from taxability of the capital gain on sale of the plot? — r.k. seth
The residential realty market may be tepid, with buyers preferring to wait for prices to slide further in view of the current low trend, but things are really hotting up as far as their preference regarding the amenities and facilities being provided by the builders is concerned. A designer touch for their home has become as important as the three deciding commandments of location, connectivity and price. The sale volume in such projects is decidedly on the higher side. Following this trend, more and more developers are now collaborating with interior designers to provide not only classy interiors but also customised ones.
Q.I am a self-employed person. Can I get a home loan?— satpal dang
After completing the planning and preparation for laying a RCC slab it is essential to carry out some checks. These check points can be divided into three categories: