Malls with a focus

The region is finally waking up to speciality malls, says Ruchika M. Khanna

The mall mania cannot get better. In an effort to outdo competition, mall developers have found a new innovation in the form of speciality malls. So out are the regular malls offering a plethora of goods and services, as developers get ready to offer one-stop solution to the customers in speciality malls.

Gold souks, wedding malls, festival city, boutique malls! The region is finally going to wake up to speciality malls. Other than a wedding mall that is coming up in Patiala, at least two Gold Souks are expected to come up in two cities of Punjab, including Ludhiana. A boutique mall and the Festival City are expected to come up at Ludhiana.

How is a speciality mall different from a normal one? Unlike the normal malls, speciality malls focus on a specialised product category. In a real estate mall, for instance you can walk in and out with keys to your dream house and in an auto mall, you may shop around for the latest car of all possible brands under one roof. The economics of these malls is also different from the retail ones. The footfalls in these malls, though less than a normal one, will see only the real buyers.

Aeren R Enterprises is coming up with a theme destination mall at Ludhiana. The company plans to invest Rs 300 crore towards the mall, which promises to offer an international retail, entertainment and leisure experience. The mall would also have Punjab’s first IMax theatre. “It would be among the biggest malls and is planned over two million-square feet of the covered area. People will be introduced to the latest concept of ‘malls within a mall’ through it,” says CEO Aeren R Enterprises Sudhir Mathur.

Located on the outskirts of the industrial town off the Delhi bypass chowk on the Ludhiana-Jalandhar GT Road, the company aims to attract customers from the city and around, including Phagwara, Jalandhar and Amritsar. The mall, Mr Mathur says, will be operational by April 2008.

He says besides environment-friendly design with large open sky spaces, landscaped greens with water bodies and fountains, the company will take special care for the safety of kids, elderly and differently-abled.

Bouyed by the new innovation in the mall culture, Ansal API, too, is planning to come up with a boutique mall in Ludhiana. Mr D Sachdev, Director of Ansal API, says that the mall will come up on the Mall Road and will house international fashion stores. “Speciality malls are an in thing in the real estate sector. These ensure that people want to go to a mall not for an experience of visiting a mall, but to encourage people to shop. These malls will ensure that genuine customers come here and have the pleasure of shopping at will,” he says.

But ask the developers about the malls not being a success in Gurgaon, and they say that it has largely been due to an imbalance between demand and the existing capacity. They say no proper survey had been done to identify the demand and the number of expected footfalls. However, as the NCR region is expanding, it is getting better as the buying power of the purchasers has also gone up.

Cottages, a casualty of concrete culture

Rakesh Lohumi notes how apartments are replacing traditional structures in Shimla

In the mad race for owning multi-storeyed buildings, cottage culture, a legacy of the British, has become a major casualty in the “Queen of Hills”.

Many old buildings have been demolished to pave the way for modern multi-storeyed structures and those surviving have virtually vanished in the concrete jungle. Most of the new buildings have come up on the spacious lawns and open spaces around the old bungalows. The landlords converted open spaces into plots and disposed them of to make a fast buck.

Keen to recreate a “homely” ambience, the British used the English architecture yet also incorporated indigenous style while constructing houses and other structures, giving rise to a different style. The ‘Swiss Chalet’ bungalows were the most common in Shimla along with ‘Boronial chateaux’ with corrugated iron roof and Tudor Gothic architectural styles. The ruling families of erstwhile princely Indian states also build palatial houses, which matched the ones built by the British in elegance and size. However, common Indians built cottages over much smaller area mostly using local material. The houses were eco-friendly, well-proportioned and limited to two-storeyes. Only institutional buildings were multi-storeyed to lend character to the town. They were nothing but architectural marvels.

The cottages mostly had a boundary line, defined by a wall or hedge. The open space between the boundary line and the house structure was developed as a garden. There was usually one main entrance linked to some main road by a footpath. Many of them even had tennis courts. These elegant structures survived until the ’60s as they were of little commercial value. In fact, most of old buildings were sold off at throwaway prices.

The scenario changed drastically once the erstwhile British summer capital became part of Himachal Pradesh. As the prices of property skyrocketed, the owners lost no time in selling off their properties. Over the past three decades, the cement -concrete culture has completely overwhelmed the city and multi-storeyed buildings have mushroomed on steep slopes virtually one over the other. What to speak of open spaces, even the bare minimum prescribed setbacks of 2m and 1.5 m on front and sides have been encroached upon by builders. Worse, successive governments instead of enforcing the approved development plan came up with retention policies to help regularise the unauthorised structures.

More and more multi-storeyed structures are coming up even though thousands of buildings already constructed are lying vacant. A survey conducted by the Town and the Planning Department has revealed that 35 to 40 per cent of the built space lies in Katchi Ghati, New Shimla, Jiwanu Colony, Tutu, Puabo and other areas where most of the new structures are coming up. Further, a large number of flats have been purchased by the people of neighbouring states, who spend just a few days here during summer.

The hill station has lost much of its scenic charm and architectural grandeur due to unregulated construction. Besides, civic infrastructure has also come under a heavy strain, giving rise to problems like water scarcity, waste disposal, traffic and congestion. If all the built up space is occupied, the situation will turn worse. On an average, landowners have built up three to 11 times their genuine requirement. It is time for the government to take steps to prevent the impending disaster by imposing a ban on high-rise structures. Only need-based construction should be allowed so that those who have plots could build decent houses to live in.

House through the mouse
Peeyush Agnihotri

Online property portals have started to click in India, and matching up with the trend, regional entrepreneurs are hopping on to the bandwagon.

In a bid to reach out to the lesser-tapped NRI market, Anand Chanana, a 26-year-old student from Amritsar, launched gharji.com, an online real estate portal, this week. Chanana, a qualified mechanical engineer, is currently pursuing his BCA from a college in Jalandhar.

“A few real estate deals that me and my father did made me sit up and take notice of the vast potential that this sector had. The current real estate market, which is swiftly becoming like an organised sector, inspired me. I then clubbed this opportunity with the talent I possess - hosting a website,” he says.

Chanana is a veteran in hosting websites. In fact, he has quite a few ones to his credit and all are, more or less, unique in many ways. “I started designing websites nearly seven years ago. The first one was for my father, who is still getting export orders from the website that I made for his engineering company,” he says.

His other web-based accomplishments include making a site that sells chess internationally and the first community website of Guru Nanak Dev University. He also has an interesting one for those who wish to marry a multi-millionaire.

“The realty site will be helpful to NRIs because it will save them the trouble to come over and see the property in person. As we have the option of showing the photographs of the property on site, they would be able to shortlist before finalising a deal,” he says.

Dismissing the fraud factor that might creep in while transacting a deal, Chanana says he verifies each list manually. “We make sure that each property transaction is legal and all government procedures are duly taken care of,” he says optimistically.

This student-entrepreneur, who boasts of being the only person to have an online payment gateway in Amritsar, says the website will greatly help the buyers as they would be able to find a good deal, in the shortest possible time period.

Online property market is growing exponentially in India. “I believe that with the growing Internet penetration, it will be a great success in the North,” he says, while adding that his portal may give property dealers a run for their money. “The website will make the dealers commission competitive as there is still a very large market untapped. The market is fragmented and localised currently,” he says.

Another salient feature of his real estate portal is that the buyers, who are limited to a budget, can search through the property that matches their pocket. "Similarly, people who are interested in buying property in a particular city can search city-based property,” he says.

Currently, Chanana says he is focused on the Amritsar, Jalandhar and Chandigarh realty. He plans to launch a worldwide property search engine in near future.

GREEN HOUSE
Competitive lawns

Satish Narula lets out a few tips on how a home garden can be a winner at flower shows to be held in the region

No matter how much you spend on the construction of the house, it is incomplete unless tastefully decorated with velvety turf and quality plants. In the houses or flats you do it yourself and in the societies, the onus is on the management. See any housing ad, and the first thing to lure the customers is the ‘beautifully landscaped environs’.

When once you have done efforts to plan your garden well, why not compete with others to find out as to where your garden stands out in comparison with others in the city. Third week of February to the second week of March is the time when all flower shows-cum-competitions are held in this region. There is a category of competition in the home gardens, terrace gardens included. Make up your mind and we will tell you what judges look for and how your garden can have an edge. There is a category for whole of the society premises too.

Do not think that your garden is too small to compete. There are various categories of gardens depending upon the size. In big houses, it is mostly seen that garden is decorated within the boundary of the house but no care is given to entrance and adjoining berm outside. Remember, the first impression is the last one. The entry to house should be inviting. Good planners put some welcome trees at the entrance but even a few high palm specimens also give a good look. Although one cannot create permanent structures on the outside berms for the fear of getting them uprooted by service providers yet one can create some good features with marbles, pebbles, white stones or even ground cover plants. Inside the garden, corners are normally neglected or else the area behind the shrubs is never tended. It cannot escape the eyes of judges.

The planting or placing of pots etc should be such that it guides the path and at the same time is not interfering with the drive. At times the gardeners tend to wash the premises just before the time of arrival of judges. This is not desirable. Anyhow, God has been kind this year and the gardens already wear a fresh and clean look. The lawn of the garden has maximum credit. It should be lush green and well manicured. Do not try to mow it at the last minute. You will get brown patches. Also, do not water a day before. Let the judges tread on it and see the purity for themselves.

Display similar kind of pots in rows. Do not colour them harsh with paints. The display should look arranged and neat. Avoid haphazard placement. Judges also see the planting pattern. They also note the right kinds of placement of the plants as per sun and shade requirements. Diseased and dead plants and twigs should be removed from the sight. In the trees, the removed stub should have a clean round edge, smeared with some disinfectant.

Introduction of an element of surprise gives your garden an edge. It may be in the form of an artefact, a statue, a water feature or even an unusual plant.

And, for God’s sake keep your pet under leash when the judges come. Nothing could be more irritating.

Retail throws up key roles in bulk

A career in real estate was till now limited to brokers, masons and labourers. Not anymore as the industry opens up limitless scope for investment bankers, marketing managers, visual merchandisers and supply chain distributors. Many are even coming armed with foreign degrees.

India’s total retail market is estimated at Rs. 9,300 billion, of which organised retail is at Rs 300 billion and expected to grow at a compounded rate of 30 per cent over the next five years. Currently employing nearly 15 per cent educated Indians, the industry has the potential to employ over two billion people over the next five years, says Sanyam Dudeja, VP Marketing, TDI.

The real estate industry segment today requires real estate specialists who have knowledge in business, finance, investment and communications. There are aspirants who want to make a career in this emerging opportunity, and they need a formal orientation into this conventional segment, which is now metamorphosing into a new industry altogether, says Dr Hari Gautam of School of Business & Communication Studies.

Riding the real estate boom, developers are hiring big time to scale-up their national operations. The reason for demand has been major expansion drives by developers across the country due to which there has been a sudden spurt in the number of commercial and residential projects, says Dudeja.

The real estate market in the country is now opening up and a lot of FDI is coming into the business. With this, every group now needs people at all levels, he says.

Real estate careers are here to stay. The number of employment opportunities created by the real estate sector currently make it the second highest employment generator in India, next only to agriculture. Hundreds of subsidiary industries are, directly or indirectly, dependent upon real estate operations, he says.

The boom has created a whole host of new employment and career opportunities in this sector, he says noting as of now those with an MBA enter into the field. Many industry associations are also conducting regular seminars and conferences to update those in the industry on the emerging trends, says Rameet Trehan, a real estate expert.

It was earlier believed that real estate could, at the most, generate jobs in construction and civil engineering. But with an organised housing industry coming up, urban development has opened the floodgates for the constant flow of real estate job openings, says Sunil Anand of Anand Properties and Infrastructure.

Fears expressed in certain quarters that FDI in the retail sector will short-change the local kirana stores and smaller players are exaggerated. On the contrary, it would to lead new economic opportunities and generate more employment.

The opening up of the sector to FDI will lead to new economic opportunities and there will be more employment generation, says Anand.

The Indian retail business employs nearly 21 million persons, which is around 7 per cent of total employment.

Although the country has more than 12 million retail outlets, which is the largest in the world, the share of organised retailing is merely 2 per cent. Thus, there is a huge scope for the growth of the organised sector in India, says Dudeja.

Other job options range from real estate appraisal to property managers, advisors, investment bankers, entrepreneur, retail buyers and merchandisers, visual merchandisers, supply chain distributors and logistics and warehouse managers, notes Anand.

The majority of jobs are at the shop floor level or in sales. These account for approximately 60 to 75 per cent of the total jobs in the sector. Other job opportunities are in merchandising, visual merchandising, customer relationship management and in marketing and supply chain segment, he says. — PTI

Mandi, a haven for the retired

Kuldeep Chauhan notes that the town is becoming a commercial-cum-educational hub

Known as Choti Kashi of Himalayas, real estate prices have sky-rocketed in the Mandi town, which has emerged as a refuge for retired people, besides an educational hub in the central region of Himachal Pradesh over the years. The new banks and educational institutes have resulted in the shrinking availability of land within the Mandi town.

The construction activity has picked up in the town, as it has become a refuge for the retired people and settlers from the district and even outsiders. The banks and educational institutes have further pushed up rentals and land prices in the town over the years.

There are more than 1,000 unauthorised structures in the Mandi town planning area and more are coming up in almost all 25 revenue villages that are included in the Mandi development plan area of over 2,296.43 hectares, sources say.

Though town plan is planned for a population of 50,000 people till 2021, but town’s population has already crossed 35,000 mark as per 2001 census. The population has increased at a rate of 15.75 per cent over the last decade.

The pressure on land has increased as the retired government or other settlers prefer to build houses in this ancient town, the Mandi district headquarters. The town has, in fact, emerged as a central commercial-cum-educational hub in the region. It has postgraduate college, private and government schools, teaching shops and computer and technical institutes, ITI, zonal hospital, commercial establishments, banks, offices, hotels, shops and dhabas, all pushing up land prices, commented property dealers. “The land is shrinking even within the planned area, while there is no land within the limits of the main town. As a result, the prices of land have increased from Rs 1.5 lakh per biswa in posh localities like Khaliar, Jawahar Naggar and Bhiuli to Rs. 2.5 lakh per biswas for the last two year, reveal property dealers in the town.

In the commercial area in the main town, prices of property have shot up between Rs 30 lakh and Rs 40 lakh for a shop measuring 8 square feet area. “Property dealers attribute the rise in real estate prices to the lack of land in the main town and increasing demand for land in the posh localities of the town,” says Ajit Kapur, who runs a medical store in the town.

TAX tips
No rebate on loan for acquiring plot
By S.C. Vasudeva

Q. I purchased a plot by taking loan from HDFC. Kindly clarify the following points:

Am I entitled to take any rebate under the Act on EMI, consisting principal or the interest or both?

Is there any time limit for the construction and completion of house for availing the benefit under the IT Law?

A friend of mine has stated that benefit under income tax can be only after the completion of house and not before but HDFC authorities while granting loan had stated that we would get benefits under Section 80C of the Act.

— Balram Sharma, Kurukshetra

A. The answers to your queries are as under:

According to the provisions of the Section 80C of the IT Act, 1961, (the Act), a deduction is allowed of a sum not exceeding Rs 1 lakh, where such an amount has been paid by the assessee towards the instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of property on ownership basis or any instalment or part payment of the amount due to any company or cooperative society of which the assessee is a shareholder or a member towards the cost of property allotted to him or repayment of the amount borrowed by the assessee from specified sources for the purposes of purchase or construction of a residential house property. The aforesaid deduction is within the overall limit of Rs 1 lakh specified in the said section. In view thereof, no rebate would be allowed to you for the EMI paid towards the repayment of loan borrowed for acquisition of a plot of land.

There is no time limit for the construction and completion of house, as the Act does not contain any such provision.

The information given by your friend is correct.

Top up loan

Q. My wife and I raised a loan of Rs 9 lakh from a private sector bank to construct a house. We spent the loan amount plus our own contribution on the construction of the house. Still in need of money, we requested the bank to granting us further loan. Meanwhile, in March 2006, we shifted to our newly constructed house. The bank instead of granting us further home loan offered us Top up home loan of Rs 2 lakh. We accepted it and got the loan in May 2006. We spent the entire amount of Rs 2 lakh on the house construction.

At the time of granting us Top Up loan, we had been informed by the bank that we would be issued interest certificate in respect of Rs 2 lakh - Top up home loan, for the purpose of income tax. But when we requested for the issuance of provisional interest certificate for the financial year 2006-07 in respect of Rs 2 lakh loan, we were informed that the bank had received a letter from the IT Department against issuance of interest certificates in respect of Top Up home loans.

When we persisted, the bank issued us a certificate stating the grant of Rs 2 lakh loan to us in respect of the property (our house). The certificate also mentioned PEMI amount, total EMI amount payable from April 2006 to March 2007 and break up of total EMI amount payable from April 2006 to March 2007 into principal component and interest component.

Can we claim deductions under Sections 24(b) & 80C(2)(xvii) of the Income Tax Act, 1961? Pertinent to add here is that it is not mentioned on the certificate “Provisional statement for claiming deductions under sections 24(b) & 80C(2)(xviii) of the Income Tax Act, 1961”.

Neither the loan has been stated as housing loan in the said certificate though the said certificate has been issued for the bank (acting for itself and/or as duly constituted attorney in this behalf of bank Home Finance Co. Limited) nor have been mentioned in the said certificate various advices/ conditions for claiming deductions under sections 24(b) & 80C(xviii) of the Income Tax Act, 1961.

Even if we are not entitled to claim deductions in respect of our above mentioned Top Up loan of Rs 2 lakh, should we mention in our income tax returns about the raising of Rs 2 lakh, loan and spending the same on our house construction?

— Ashok Kumar, Ambala

A. You would be entitled to the deduction under Section 24 of the Act in respect of the interest paid on the loan of Rs 2 lakh raised for the completion of the house. Similarly, you should also be entitled to the deduction of principal amount paid to bank towards the repayment of your loan under Section 80C of the Act provided you are able to prove that the loan was raised for the construction of the house. I may add that deduction under Section 80C is limited to Rs 1 lakh and the instalment paid by you will have to be within the overall limit of Rs 1 lakh.

Two plots

Q. Kindly advise me on the following:

(a) I have two plots in different urban estates.

(b) Amount is paid on instalment, along with interest and non-construction charges for both. Conveyance deed is yet to be done.

(c) Will the cost of acquisition or instalment + interest + non-construction charges apply?

(d) Can I sell one plot and invest the money on the payment of dues on the second one?

(e) Can the remaining amount be invested in construction on the 2nd plot and what will be the period?

(f) If I sell both plots and invest the consideration on purchase of the new plot + construction or can I purchase a new house.

What will be the tax liability?

— Kulbir Singh, Chandigarh

A. The answers to your queries are as under:

(i) The interest paid towards the acquisition of plot will form part of the cost of acquisition of the plot. However, non-construction charges will not form part of the cost of acquisition.

(ii) You can sell one plot and invest the money on the payment of dues in respect of second plot. However, the sale may involve capital gains tax and if applicable will have to be paid.

(iii) You can invest the remaining amount in the construction of the house on the second plot. The question as to the period within which the remaining amount is to be utilised is not clear. I am, therefore, not able to give a reply in this regard.

(iv) In case you sell both plots and such sale gives rise to a long term capital gain, the same will have to be invested in construction of the house within three years of the date of sale. The utilisation of long term gain for acquisition/purchase of a house has to be within one year before or two years after the date of sale. In case investment of sale proceeds of plot is made to acquire a new plot capital gains tax if applicable on the sale of such plots will have to be paid.

Plots, stocks

Q. Please let me know tax to be paid for 2006-07.

(a) I am an employee of PSEB. My salary income for 2006-07 is Rs 4,94,096 and GPF saving is Rs 1 lakh.

(b) I sold a plot in 2006-07 for Rs 2 lakh, which I purchased in 2000 for Rs 1,00,000.

(c) I sold 450 shares in 2006-07 for Rs 2,50,000 of a public limited company duly listed on the BSE, which was allotted to me in 1993 as 100 share for Rs 4,500 and subsequent bonus share allotted during the period with all 450 shares with holding of more than one year.

(i) Please let me know my tax liabilities for 2006-07.

(ii) Is it mandatory for me to show all capital gains in my IT return of 2006-07, which is even exempted from paying income tax?

— G.D. Saini, Patiala

A. On the basis of figures given by you, the total income excluding long term capital gains of Rs.72,167 arising on the sale of plot works out at Rs 3,94,869 (4,96,096-1,00,000). The income tax @ 20 per cent on long term capital gain would work out at Rs.14,423. The income-tax on other income would work out at Rs.68,230. The education cess on the total tax would work out at Rs.1,653. Thus the total tax liability without interest under the Section 234B and 234C of the Act would amount to Rs 84,306. I may add that it has been presumed for the purposes of these computations that years mentioned in the query are financial years and the sale of shares has been transacted through the stock exchange and securities transaction tax has been paid thereon. The capital gain on such shares has thus been taken as exempt from tax on the basis of such presumption. The capital gains, even if exempt from tax, must be disclosed in the return of income.

REC bonds

Q. I sold property in March 2005 resulting in long-term capital gain (LTCG), which had to be invested in available NHAI/REC bonds. These were oversubscribed fast and I could not invest in them within six months. Then the government permitted investment in LTCG bonds till December 31, 2006. But the government came out with REC Capital Gain bonds issue of Rs 3,500 crore only on December 28-29, 2006. Even then no forms for REC Bonds were available in the market (Even till first week of January), so I could not invest in LTCG Bonds (REC) till the last date 31.12.2006.

My query is:

(1) Will the government allow more time to buy REC bonds or will I have to pay, Long Term Capital Gains Tax as the only solution.

(2) Can any government agency clarify this point?

— Rakesh Kumar, Nabha

A. The answers to your queries are as under:

(a) In all fairness, the government should allow more time for the purchase of Capital Gains Tax Saving Bonds as the non-availability of forms should not disentitle you to claim the benefit.

(b) You should have made investment at the first available opportunity so as to claim the benefit. This would have entitled you to relief at least at the level of appellate authority. In case you have not done so, the only alternative would be to pay the tax on the long-term capital gain.

(c) The law does not provide any such forum.

Buzz on Bourses
NHB inks pact with SPA

New Delhi: National Housing Bank (NHB) has said it has signed a memorandum of cooperation (MoC) with the School of Planning and Architecture (SPA) for collaboration in the areas of training and research in housing, integrated township development and low-cost housing. Under the MoC, the two institutions would work to conduct studies of housing in disaster prone areas, eco and tribal housing, building material and technology, NHB said in a press note here. NHB Chairman and Managing Director S. Sridhar and SPA Director Subir Saha signed the MoC, it said. — PTI

Asian Granito eyes bourses

Mumbai: Asian Granito India Limited, manufacturer of a wide range of vitrified tiles proposes to enter the capital market with a public issue of 7 million equity shares of face value of Rs 10 each comprising an employee reservation of 3,50,000 equity shares of face value of Rs 10 each (the issue). The net issue to the public shall be of 6,650,000 equity shares of face value of Rs 10 each. SBI Capital Markets Limited and Enam Financial Consultants Private Limited have been appointed as the book running lead managers for the proposed issue, the company’s press note said. — UNI

Designer flats in Panchkula

Chandigarh: Redpro & Motia Group, the developers of Redpro royale estate at Zirakpur, will soon come up with the state-of-the-art designer apartments in Sector 20, Panchkula. As many as 900 centrally air-conditioned apartments, comprising three spacious bedroom flats will be spread over an area of 176 acres of land, according to Mr Arjun Kumar, Chairman, Redpro and Mr Pawan Bansal, Managing Director of Motia Constructions Limited. The group has many projects in the pipeline including group housing at Gurgaon, Panipat, Mohali, Baddi and Dera Bassi, malls in Ludhiana and Jalandhar, townships in Karnal and two schools at Mani Majra. — TNS