Own and earn

Reverse mortgage is emerging as a fiscal boon for the elderly, says Ruchika M. Khanna

Old age will no longer be a bane if you have built a small haven for yourself. The reverse mortgage scheme, announced by the Finance Minister in the Budget 2007-08, will enable the elderly property owners’ surrender property with a bank for a regular monthly income. This will turn out to be a blessing for these property owners, many of whom have been abandoned by their children.

The Budget mentioned that the reverse mortgage scheme would focus primarily on urban areas, especially where high realty prices will be a major incentive for banks. The Finance Minister had asked the National Housing Bank to enter the reverse mortgage market for senior citizens. The NHB will offer guarantees to senior citizens availing reverse mortgage facility from lenders to provide protection against any defaults by banks and housing finance companies.

However, the government now proposes to extend the scheme to rural areas as well. Considering the fact that rural areas too have a large number of elderly persons, abandoned by their children, the Ministry of Social Justice and Empowerment is now pressing for its extension in rural areas as well.

The government is contemplating on forming a joint committee of ministers concerned to coordinate with banks and village panchayats to form a scheme for extending reverse mortgage scheme in rural areas. The scheme for rural areas, with its focus on social security of elderly, will be first initiated in the realty boom villages of Punjab, Haryana and Uttar Pradesh.

Prakash Singh Gill, a 68-year-old resident of Model Town, Jalandhar, says: “This scheme has brought a lot of hope to elderly like us. My children are settled in Canada and I don’t want to ask them to support me and my wife, Kiran. ”

Under the reverse mortgage scheme, the banks will ensure lifetime income for the old man and his spouse, without alienating them from their property. The property owner surrenders the title of the property to a bank or financial entity. The bank will pay an agreed sum in regular installments to the owner and his/ her spouse through their entire lifetime. After their death, the heirs’ get the first right of refusal to purchase the property from the bank. The bank will fix the property price according to the market value of the property and the interests on the amount paid by the institution to the old couple.

Failing this, the property is transferred to the financial institution. If there is any surplus after sale of the property mortgaged, after adjustment of loan and interest amount, the refund will be made to the legal heirs.

Reverse mortgage also allows for revaluation of the house after specific periods. If the value of the property increases in this time, senior citizens can get a higher loan amount. If the senior citizen or the spouse lives beyond 15 years (the normal time of the mortgage) they can continue to live in the house till the last of them expire. If the couple had taken a lump sum loan, they will have to pay interest on the loan amount.

Ashok Gupta, Deputy General Manager, Chandigarh, Union Bank of India, says: “The scheme will prove to be a boon for many senior citizens, who are residing alone in their sprawling bungalows in Chandigarh, but have little available cash flow. ”

ICICI Bank, the largest private sector bank, too, is keen to enter reverse mortgage business, once the guidelines are laid out. “This will prove beneficial for those above 55 years of age. But we are awaiting guidelines before taking the plunge in the business,” says Kalpana Morparia, joint managing director, ICICI Bank.

Some bankers are, however, skeptical about working out the modalities for introducing the scheme. Vivek Vig, Head, Retail Bank, Centurion Bank of Punjab, says: “Though we are very keen to offer the scheme, several issues have to be resolved like execution of will and getting the property vacated from the heirs. Banks will have to gain expertise on estate management. The RBI and Indian Banks Association will have to call a meeting of banks to have a policy framework for introducing the scheme”.

Make up on City Beautiful’s face

Sanjeev Singh Bariana tells about upgradation of infrastructure in industrial area

The Municipal Corporation has drafted an exhaustive plan for the “upgradation of infrastructure in industrial area” in the wake of ongoing conversions. Definite entry of big shopping malls, hotels and healthcare facilities will not just be a facelift but also lead to a sizeable human rush in the area. The Chandigarh Administration is going ahead with the creation of infrastructure for likely requirement in the changed order of the day.

Broadening of roads tops the work plan agenda. Process has begun for the beautification of entry points by providing state-of-the-art lighting technology, landscaping and murals. Entry points have been earmarked at Junction 39 (Poultry Farm Chowk), crossing near erstwhile Pasco, near Bhushan industry, and near KLG slow carriageway in Phase I. In Phase II, the points have been identified as the temple and intersection of V3 and V5 roads.

The roads identified for widening include all peripheral roads, which will go from 33 feet to 44 feet, along with the creation of parking spots, aside them. Road in front of the Ordnance factory is to be converted into dual carriageway. Roads, adjoining mango grove in front of Pasco, leading from CTU workshop to railway station, and internal roads will be widened from present 16 to 33 feet. The sites for the creation of additional parking have been identified on plot numbers 41, 42, 48, 184A and 185 in Industrial Area, Phase I and on three other places in Phase II.

The action plan makes a mention of the development of three parks, increasing water supply hours, earmarking of at least six locations for dhabas, new taxi stands, construction of subways and multi-level parking.

The MC has also listed areas of concern during the conversion process including absence of footpath, low sewerage carrying capacity of drains, problem of dumping garbage, misuse of vacant plots, encroachments by kabaris, mushrooming slums (colony number IV and Sanjay Colony) and, most importantly, a slackness in enforcing regulatory controls, especially pertaining to traffic management and misuse of buildings.

It is felt that the Administration needs to give priority to the removal of slums and check misuse of industrial plots. A plot more than an acre is being used by ragpickers right in the vicinity of the industrial area. More than two-dozen trucks can be seen parked illegally in front of the industrial plots in transport business.

Removal of approximately 3,000 jhuggis from the government land in Colony Number IV and approximately 400 jhuggis in Sanjay Colony near CTU workshop is not going to be an easy task.

Out of 114 square kilometer (28,160 acres) area span of the city, the industrial areas occupy 1,475 acres. Except for a negligible number of unregistered units, the UT has 1,411 registered ones.

However, a large segment of traders in the industrial area is averse to the idea of conversion for personal and financial reasons.

Objections are being raised about the real motive of conversion. A group of industrialists feel that the “administration is largely helping the outsiders. Local industrialists do not have stocks of money, so they are either selling the land or tying up.

It is worth pointing out that the Industrial Area has not seen even 5 per cent conversions in more than a year after the conversion was started. Only 35 applied and at least four of them have not been cleared.

West Asia beckons

Hindujas, DLF, Punj Lloyd and the Ajmeras ink slew of pacts

In what could be called a week of Indo-West Asian realty developments, the Hinduja group plans to invest Rs 12 billion ($260 million) in building resort and commercial properties in Dubai and signed a pact for a joint venture with Dubai World for developing medicare business in both countries.

The Hindujas also signed a joint venture with UAE’s real estate group LLC — a real estate arm of Dubai Global for developing medical services and infrastructure in cities of both countries.

Hinduja Group (India) Chairman Ashok P. Hinduja said the company has already purchased land in the Waterfront Project of Al Nakheel, which is a member of Dubai World — an investment and holding company owned by the government of Dubai.

The group would be developing 2 million square feet of property for resort, commercial and mixed-use purposes.

Punj Lloyd, too, announced that its subsidiary Sembawang Engineers and Constructors was all set to construct a residential complex in the Kingdom of Bahrain.

The company has signed a contract with Bahrain’s Riffa Golf and Residential Development Company to construct 325 villas for a residential community.

The value of construction cost is Bahraini Dinar 45 million (Rs.54.2 billion), stated a press note. The entire project involves the development of three distinct signature estates — lagoons, oasis and park.

According to Punj Lloyd, this order is the largest single package in the development of the three estates.

In another separate development, India’s largest real estate developer, DLF Ltd., and Dubai’s Nakheel will invest more than $10 billion to build two townships in 40,000 acres (16,200 hectares) in India, DLF said.

The first phase of the project will commence in 2007 and is expected to be completed in three years, it said in a statement.

DLF, which is planning India’s biggest initial public offering of more than $2 billion, has formed an equal joint venture with Nakheel LLC for the projects, it said.

Just last week, Limitless LLC, the second real estate arm of Dubai World, had unveiled plans of its first project in India in a proposed $12-billion partnership with New Delhi-based DLF Group.

The company would shortly announce the details of the joint project, which is estimated to be in the range of $10 billion and $12 billion.

As if a flurry of joint ventures and pacts were not enough, Bahrain Bay Development, a futuristic residential and commercial project, signed a letter of intent with an Indian consortium to develop a $150 million project within the Bahrain Bay masterplan.

The joint venture consortium consists of Ajmera Group, a $450 million conglomerate based in Mumbai, and Mayfair Housing, a major Indian urban residential property developer. The project is scheduled to be completed within two-and-a half years.

Bahrain Bay is a real estate project worth $2.5 billion off the northeast coast of Manama in Bahrain, covering two million cubic square metres for 25,000 residents.

The waterfront project will include commercial, residential and retail properties with outdoor cafes, shops, restaurants and condominiums.

The futuristic project is a joint venture between Arcapita Bank (Arcapita) and a Bahrain-based investment group. — TNS, Agencies

Realty mutual funds get finishing touch

Market regulator SEBI said it would allow registration of hedge funds but only selectively.

“We will look at the merits of each case (before taking a decision),” SEBI Chairman M Damodaran told reporters in Mumbai. “There are a whole lot of people involved in hedge funds.

It is difficult even to describe what is meant by a hedge fund,” he said.

According to him, many hedge funds were already present in the Indian market through the offshore derivatives market.

“They should come here and invest directly. Let them come from the front door. Let them not hide,” he said, adding that nearly 30 per cent of FII investment in the market was estimated to be through the hedge fund route. Damodaran announced that SEBI would soon come out with regulations for investment advisors.

Pointing to two issues that were holding back real estate mutual funds, Damodaran said one was valuation of unlisted assets and the other related to accounting treatment to the sector.

“While significant progress has been made on the issue of valuation, we are still discussing the accounting norms. It will be a few months from now that we will see the launch of real estate mutual funds,” he said.

He also indicated that unlike traditional mutual funds that declare net asset value on a daily basis, real estate mutual funds may not declare their NAVs on a daily basis since there will not be fluctuations in real asset prices daily.

Referring to the valuation norms for real estate companies introduced last week, the SEBI chief said valuation must be based on sound principles.

“We may prescribe more norms if required,” he added. He also informed that the government plans to register valuers to value real estate soon.

Real estate giant Parsvnath’s Chairman Pradip Jain said new norms would bring realty firms’ land bank valuations to realistic levels.

Experts believe SEBI’s new initiatives would weed out those from the IPO process that scrap their plans after getting bad response as well as those who manage to get good subscriptions just because of “herd mentality.”

Share prices of a number of companies, particularly in the real estate sector, have dropped sharply in the recent past, some times much below the issue prices.

There have also been allegations that some firms arrange proxy bidding from big investors just to get a good amount of subscriptions from retail investors. — PTI

Greater Faridabad under focus

Group housing projects for the middle class are the need of the hour, says Bijendra Ahlawat

With fast development in the basic infrastructure among factors fuelling real estate boom in this industrial hub of Haryana, Faridabad seems to hold quite a promise in the group housing sector, considered the best alternative to solve the burgeoning needs of the people.

Though the state government has already announced two separate multi-storied housing facility to provide affordable houses for the urban poor, it is yet to come out with fresh schemes to cater to the needs of a large number of middle-class families wishing to have a roof over their heads.

While hundreds of group housing societies, which came into existence at the time of special allotment of plots for such societies last year, are waiting for next such draw, certain social bodies and individuals have sought suitable changes in the group housing schemes in order to make the societies eligible to apply directly to builders to have flats at concessional rates, instead of seeking individual plots and then constructing houses.

This suggestion seems to have found the fancy of the Department of Urban Development and that of the Town and Country Planning. It is likely to have a positive impact, a source claims. It may be recalled that about 5,000 acres of land has been earmarked or licensed for housing projects in the eastern part of the city, located across the Gurgaon and Agra canals, running parallel to the Mathura road from north to south.

Dubbed as Greater Faridabad, this region is likely to address the housing needs of thousands of people in near future and may emerge as most sought-after area, if things go as projected, claims a property agent based in Sector 14. He says this region, which would have about 20 residential sectors, will be an exclusive zone mainly of high-rise multi- storied buildings, on the pattern of Gurgaon, with all kinds of facilities.

According to another property dealer based in Sector 15A here, the development of the Eastern Peripheral Highway, connecting Palwal with Ghaziabad via Noida and the construction of the Taj Expressway by the UP government can change the face of things in near future. Moreover, the proposal of the government to develop some more facilities like the special freight corridor of Indian Railways will certainly bring the region under greater focus.

According to Punarjagran Sanstha, a social body based in Faridabad, the government can reap the potential, if it goes with some changes in housing norms. According to Shailender, an office bearer of the Sanstha, the government ought to provide an opportunity to the group housing societies to have built up housing units in the housing complexes being developed. He says the authorities could bring a legislation into effect and ensure that the societies be given special concessions and subsidies as the number of applicants may be large.

He says this method would not only solve the problem of heavy advertisement and publicity done by the companies to sell flats, but can also be an easy process for the house seekers and the societies waiting endlessly to have a plot of their own. He said the government may be spared the allegation of corruption and favoritism in the process of allotment of plots, which was visible in the last such allotment when about 133 plots were given through lottery in Faridabad, on September 29, 2006.

“There had been a total of over 3600 applicant societies, but the applicants were not satisfied with the manner in which the allotment was done,” claims K.L Gera, a social activist. Claiming that the government could hardly meet the requirement of plots and houses for housing requirements in such a manner, he says there is a forcing need that the government adopts new methods to cater to this sector. Asking the government to ensure speedy implementation of its projects regarding the flats for the poor and middle class residents, he says the government should allow construction of more multi- storied residential buildings in all parts of the city, especially where large chunks of land lie vacant.

Proposal to auction land in Baddi

Opportunity aimed at investors may be misused by dealers, writes Ambika Sharma

With a view to earn a quick buck the state government is now proposing to auction land lying in the bordering industrial areas to the investors. A proposal in this regard has been finalised and it awaits a final nod from the government.

Sources told The Tribune that this proposal was mooted about two months back and is likely to be cleared soon. This would make land available to the investors in Baddi-Barotiwala, Nalagarh, Kala Amb and Poanta Sahib, which constitute about 70 per cent of the state’s industry.

With a slump in the industrial area, the land prices had fallen down sharply. One bigha of land, which was sold at Rs 18 lakh by the industries department earlier, had now plunged down by Rs 3 lakh. The industries department is in the process of acquiring about 5,000 bighas of land in Gurumajra, Chenalmajra and Bagheri in the Baddi-Nalagarh industrial belt.

A section of officials, however, felt this move would not augur well for the industrialisation as real estate dealers will end up buying land during auctions. While they will further inflate rates while selling it to the investors, the actual beneficiates would end up paying exorbitantly leaving the government with little profit.

This fact was manifest in a recent auction conducted by the HPSIDC in this industrial belt where barely 50 per cent plots could be sold in the first auction. Even the Himachal Pradesh Housing and Urban Development Authority had to suspend its auction for a multiplex due to a slump in the market.

Though the earlier auction conducted last year had fetched a whopping Rs 7.78 crore as against the reserve price of Rs 2 crore yet the deal was cancelled after the concerned realtor failed to pay the exorbitant amount.

Cask and cottage

Fraser & Neave plans entry into realty sector

Singapore beverages and property group Fraser & Neave (F&N), brewer of Tiger beer, is in talks to enter the Indian real estate sector, a company official told Reuters.

F&N, which already owns a brewery in India through its Asia-Pacific Breweries unit, said it was focusing on residential and serviced apartments in Indian cities like Mumbai, New Delhi, Bangalore, Hyderabad and Chennai, but had yet to conclude a transaction.

“We are currently discussing potential opportunities with various parties and hopefully we can close our first deal in due course,” company spokesman Hui Choon Kit told Reuters.

He declined to be more specific about the potential partners or the size of the investment. Under Indian foreign direct investment rules, the minimum equity for foreign investors in real estate joint ventures is $5 million.

He said that due to continuing growth in the Indian economy, “demand for quality housing, offices and hospitality will continue to outstrip supply”.

F&N’s property unit develops shopping centres, residential homes and serviced apartments in Singapore and has residential projects in Britain, Australia, New Zealand, China and Thailand.

Besides India, the firm is also exploring opportunities for its property business in Vietnam and Russia.

F&N jointly owns Tiger beer maker Asia Pacific Breweries with Dutch brewer Heineken.

Terminating termites
Raj Kumar Aggarwal

Termites are a worldwide problem and causes extensive damage to wooden work and furniture. It is estimated that the loss caused by termites in our country runs into several millions every year. Once termites enter a building, then control becomes rather difficult. Under the circumstances, the control in existing as well as new buildings is very important.

Termites, or white-ants, are insects that live in dry wood or in the underground soil in colonies. Once established in or near a building, they start spreading and quickly start gorging on wood and other cellulosic materials. Termites are responsible for most of the damage done to the wooden structures of the building.

Broadly, termites can be divided into two types — subterranean and dry wood. Damage by subterranean termites is not always evident from the exterior, since they don’t reduce wood into powder. These are identified by the presence of earth like shelter tube of 5mm diameter affording a passage between the soil and their food (timber). Damage by drywood termites can be judged by a hollow sound that emanates when tapped.

To check termites entering the building from the ground, it is necessary to form a termite control barrier between the ground and the building during or after the construction. A good chemical barrier should be complete and continuous under the whole of the building. All foundations shall be fully surrounded and in close contact with the barrier of treated soil. Preventing termites from reaching the buildings is being done worldwide by this method.

Before taking up the construction work of new buildings in hand, the site should be cleared from all types of wooden debris, dry timber, roots, leaves and other organic materials to reduce the hazards of termites. The mounds of termites, if found, should be destroyed by flooding the mounds with one per cent solution of Chlorpyriphos E.C. (emulsified concentrate) chemical.

Prevention is better than cure and it is therefore, better to give suitable treatment for termites control in buildings. Use only seasoned timber during the construction.

HOME DECOR
Interior psychology

Devendra Malik writes on how a design reflects the client’s personality

Interior of a space is a statement of style by the architect or, for that matter an interior designer, for the user.

When a person enters a space, one starts forming an image of the personality of the owner. The way the components of the interior (furniture, flooring, upholstery, walls) are laid, their form (square, circular, elliptical, curvilinear, straight linear), colour composition (harmonious, contrasting or a mix of both) present a style statement, which depicts the psychology of the user.

For example, square depicts discipline and rigidity whereas curvilinear stands for flexibility and fluidity. The same goes for colours too, for example shades of red depict warmth and arrogance whereas shades of green are for peace and fluidity. Black depicts absorption and depth while white impregnable.

Volume of a space, too, has its effects. Vastness of a space makes the onlooker feel small resulting in respect and adoration for the space.

Finishing, too, reflects the richness and fineness of the surface.

An architect, too, has affection for certain materials, forms and colours, which he cannot resist using in most of his designs. That thus becomes the architects’ style. As he uses these elements quite often, he becomes deeply familiar with them making them commercially viable for his business.

“Form follows function” or “Function follows form” is still debatable among architects and interior designers. However, a good design must meet all requirements of the clients, including psychological. An introvert client should not be presented in an extrovert manner through the design of the space unless he insists on it.

A good design should reflect the personality of the client rather than the imposition of the designer’s style.

Interior design of public areas should be done in accordance with the psychology of a particular class of the society. Specifications, which cater to that segment of the society in general life, have to be taken into account while designing spaces.

The writer is New Delhi-based architect

TAX tips
Swapping loss on bourses with gain in property
By S.C. Vasudeva

Q. I sold my house on which I have earned a long-term capital gain of Rs 10 lakh. I am a private company employee and invest in shares. In the process, I have acquired a large number of blue chip shares. I sold some of my bad investments and have incurred a short-term capital loss of Rs 20 lakh for the year. Is it possible to adjust such short-term capital loss against the long-term capital gains earned on the sale of my house?

— Ashim Singh, Nawanshahr

A. In accordance with the provisions of Section 70(2) of the Act where the result of the computation made for any assessment year under Section 48 to 55 of the Act in respect of any short-term capital asset is a loss, the assessee shall be entitled to set off such loss against any income arrived at under a similar computation made for the assessment year in respect of any other capital asset. Accordingly it should be possible for you to set off short-term capital loss against the long-term capital gain.

Two houses

Q. I am living in my own house. I have bought another plot in an area, which is being developed by a private coloniser and will have lot of greenery around the entire area developed. If I borrow money for the construction of the house, will I be entitled to a deduction of the interest paid/payable and principal sum payable for second house, which I am now constructing?

— Raj Jain, Hoshiarpur

A. The provisions of Section 80C of the Income-tax Act, 1961, (The Act) provides for the deduction against total income in respect of sum paid towards the repayment of amount borrowed by the assessee for the purchase or construction of a residential house property, income from which would or would have been chargeable under the head ‘income from house property’. Deduction under Section 80C of the Act is limited to a sum of Rs 1 lakh and covers apart from other deductions repayments as stated herein above. There is no restriction in the section with regards to the repayments of loan obtained for another house.

Therefore, as long as the conditions prescribed under Section 80C of the Act with regard to the borrowing from specified sources and the acquisition or construction of a residential house is satisfied, the deduction will be allowable. The interest on the borrowings would be allowable as deduction against the income from house property. Section 24 of the Act also does not contain any restriction that such deduction is allowable in respect of one house only.

Rent to mom-in-law

Q. I am living in a house, which is owned by my mother-in-law. She is also living in the same house. I am paying her a monthly rent for which she is issuing a receipt. If such receipt is produced for claiming a rebate in respect of HRA, will the same be acceptable?

— Amit Kumar, Jalandhar

A. The exemption in respect of house rent allowance (HRA) is allowable to an assessee to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by him. Accordingly, you would be entitled to a deduction in respect of HRA only if the amount is actually paid by you to the person who has given the house on rent. The facts given in the query indicate that your mother-in-law is charging rent for which actual payment is being made by you. In my opinion, therefore, you can tender the receipt issued by your mother-in-law to your employer for the purposes of seeking the due relief under section 10(13A) of the Act. I may add that your mother-in-law would be taxable in respect of rent so received from you.

Section 80C

Q I had purchased a flat in Mohali for which the possession is likely to be given in April 2008. I have taken a loan of Rs 15 lakh. The amount towards the flat is payable in instalments. Am I entitled to the deduction of such instalment against my total income?

— K.S. Anand, Ambala

A. The deduction allowable under Section 80C of the Act for the purpose of purchase or construction of a residential house property covers the payments made towards or by way of any 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 house property on ownership basis or any instalment or part payment of the amount due to any company or a co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him. Accordingly, if the aforesaid conditions are satisfied, you will be entitled to a deduction in respect of instalments payable towards the acquisition/purchase of the flat. I may add that the deduction allowable under Section 80C of the Act would be within the overall limit of Rs 1 lakh.

NRI house

Q. I am a senior citizen and have a house in India, which I want to sell. Please enlighten me with regard to the tax consequences.

— Ram Lal, Jalandhar

A. The capital gain on the house, which you intend selling, would be taxable. The taxability would depend on the period for which you have held the capital asset i.e. house. In case the house is held for a period exceeding three years the capital gains earned on the sale of house would be treated as a long-term capital gain and shall be liable to be taxed at a concessional rate of 20 per cent plus surcharge if applicable. The tax and surcharge is to be further increased by an addition of surcharge of 3 per cent towards the education cess. In case the asset is held for a period of less than three years, the capital gains arising on such a sale would be short-term in nature and tax would be charged at the normal slab rate provided by the Finance Act every year. Capital gain in the case of a long-term asset is computed by deducting the cost of acquisition of the asset, expenditure incurred on any improvement to such an asset and the expenditure incurred wholly and exclusively in connection with the transfer of the capital asset such as stamp duty, registration charges, legal fee, brokerage etc.

The cost of acquisition of a long-term capital asset and the cost of any improvement thereto is to be worked out in the following manner:

(a) Cost of acquisition multiplied by cost inflation index of the year in which the asset is transferred, cost inflation index of the year of acquisition or the year beginning April 1, 1981, whichever is later;

(b) Cost of improvement multiplied by cost inflation index of the year in which the asset is transferred, cost inflation index of the year of improvement to the asset.

I may further add that the cost inflation index for the financial year 2006-07 is 519.

The writer can be contacted at sc@scvasudeva.com

GREEN HOUSE
Parking perfection

Satish Narula discusses tree varieties suitable for vehicle stands

A lot has been said about the horticultural planning, specific to various housing needs. Parking, however, remains an area of neglect. This needs a careful and professional handling and there are reasons for it.

There are many considerations while planning a parking space. An inherent problem for a vehicle owner is shade, especially during the summer months. Another important aspect is the protection from dirtying of vehicles by fruits, leaves, plant wastes and, bird droppings. It is not only the external spoilage that needs deliberation but also the risk of life and property due to wrong selection of tree species.

In the present day scenario of multiple flats, the ground floor is reserved as the parking lot. Here, the vehicles remain under shade and protection. But when it comes to parking outside, no serious thought is given.

This is more so on the premises dealing with public. The consideration of ‘saving’ is the foremost on the mind of planners. There is a need for judicious planning that costs nothing. See the accompanying picture. The tree has been so trimmed as to give it an umbrella shape and the oblique vehicle guiding reference has been given by small topiaries developed by trimming the most common hedging plant, Duranta. In fact, oblique parking needs lesser space and clearance for vehicle to reverse.

Selection of tree species is the most important aspect. I made a personal observation by parking the vehicle under various tree species in Chandigarh for a specific period of time. My inference is that the vehicle parked under Alstonia scholaris (Satvaan Satpatti ) remains neat and clean.

This is because birds seldom perch on this tree due to its closed canopy. The other tree that provides good shade because of its round canopy and disciplined growth is Moulsary. The dirtiest are the Ficus species trees under which the vehicle is littered not only with ‘fruits’ and seeds but also intolerable bird droppings. Avoid planting trees like Cassia siamea (yellow flowering) and Millingtonia hortensis (Akash Neem) that have brittle branches and may snap even on moderate wind velocity. Such trees are a potential danger to the life and property of the owner.

Trees like Neem are also not suitable for parking due to fruit shedding in the rainy season. Low-headed trees like Lagerstroemia (Pride of India) should also be avoided. Their hanging and spreading branches interfere with the movement of vehicle.

Erecting structures, using steel, could also provide shade. On this, climbers like Vernonia (Curtain Climber), Golden Shower (where plenty of sun is available) and Clarodendron (where the aspect is shady most of the time) can be trained to keep environs cool and colourful.

The writer is a senior horticulturist

Tesco scouts for partner in India
Rachel Sanderson

Tesco is reviewing its real estate portfolio while raising £5 billion ($9.8 billion) from its property assets, but the world’s fifth largest retailer will always own most of its space, its chief executive said.

Wal-Mart beat Tesco to a retail partnership with India’s Bharti Enterprises last year. Tesco remains outside the fast-growing economy where foreign multibrand retailers need a domestic partner to enter.

“We are still considering what to do in India. We do obviously require a partner there if we were to invest in India and there are plenty of very good business and people in India,” CEO Terry Leahy said in an interview.

There was “no point being held to dates or a timetable” with regard to entering India, he added. — Reuters

The Nahan maze

Violators have a field day due to lack of clear-cut policies, says Vidya Rattan Sharma

Nahan, a picturesque settlement that has earned the sobriquet of being a heritage town, is losing architectural grandeur due to the congested and unregulated construction coming up on 730 hectares stretch of the town.

Senior officials of the Town and Country Planning say that a proposal for expansion of housing construction, along the highway up to Paonta Sahib, was sent for the government’s approval, but no reply was received pointing at lackadaisical attitude.

Similarly, a proposal for housing at Rajgarh vide letter number RGH/MA/19/2001/66666-781 dated February 18, 2005, still hangs fire.

Owing to the Forest Conservation Act and in the absence of a clear-cut housing policy, Nahan has been witnessing unauthorised multi-storeyed construction.

Civic infrastructure also faces bottlenecks in water supply, traffic and waste disposal systems. On Shimla Road, at Jharja, approximately 50 hectares of land had an approved planned colony, where nearly 70 structures had come up. An unprecedented ban on further construction dismayed the plot holders.

Further construction is not feasible as no more plots are available. Apartment culture has set in and apprehensions due to the disputed Forest Act, which includes Nakabil Jungle Jhaari, are often put forth.

Town and country planner R.D. Sharma cites Section 118 of the HP Tenancy and Land Reforms Act, 1972, which authorises district authorities to clear the way for the residents to supplement the housing construction needs.

Prices of the plots vary according to the location. It is Rs 6,000 per yard near the premises of the model jail. In main bazaar, shops of 10x12 feet dimension may be procured for Rs 15 lakh.

At Chirranwala, near kutcha tank, the rate of Rs 5,500 per square metre may easily fetch a plot but a cross-section of the population says that the land is strictly for agricultural purposes.

Environmentalists allege hills are being cut beyond the slope of 45 degrees. Excessive cutting, against the regulation, may destabilise the hill strata. Multi-storeyed construction needs to be banned to exclude the chances of degradation disasters. Constructions need to match precise proportions, eco-friendly ambience and seismic regulations.

Mortgage business to remain healthy
Peeyush Agnihotri

Increase in lending rates, both by private and public banks, over the last six months has affected genuine buyers, investors, bankers and developers. The rates, which have increased by nearly 2 per cent in the last six months, are now having a telling impact on the financial condition of the employed class.

“Conversely though, banks can expect good mortgage business in the coming five to seven years. It is also expected that the PLR will stabilise with minor 0.25-0.50 per cent changes in near future.”

This is the yet-to-be-published research finding on the tricity by propertyvertical.com, a Chandigarh-based portal that analyses real estate market trends. The portal, which has already come up with four quarterly reports on the tricity and its periphery, is expected to come out with the one of the impact of hike in bank PLRs shortly.

“Chandigarh is the most preferred destination in the North by non-resident Indians scouting for property. Initially, they purchase for investment but end up retaining eventually,” says Vipin Sharma, the owner of the portal.

With the emergence of multinationals, the demand for office and residential space has increased manifolds. “Chandigarh, which comes under Tier III city category, is positioned to emerge as a major centre for offshoring by IT and ITeS companies over the next five years. The appreciation in the buying capacity of these professionals and the easy availability of home loans have seen a shift from rentals to purchase of residential properties,” he says.

Sharma, an MBA, who also dabbles in realty abroad, says the NRI segment is also keenly looking at owing apartments at places like Shimla and Solan. “Initially, Himachal Pradesh real estate sector was confined to hospitality and institutional sale purchase. However, with the easing of ownership norms, Indians based abroad are looking at owing flats in Himachal,” he says.

Talking about hi-end flats that a few zealous builders have launched in Chandigarh, he says they may find just a few takers. “Either these could be offshore rich Indians or very well-paid IT honchos, who may make the city’s IT park their official base,” he avers.

“Real estate prices in Mohali and Panchkula are expected to decrease further in future,” he concludes.

Buzz on Bourses
Hirco to park £47.9 m

London: Hirco Plc, a real estate investment firm floated by Mumbai-based Hiranandani Group, has announced an investment of £47.9 million (about Rs 400 crore) to develop a township in Chennai. Following this investment, 35 per cent of the net funds raised at the time of company’s IPO would have been deployed, Hirco said in a filing on London Stock Exchange. Hirco, a close-ended investment firm set up in Isle of Man, had raised £382.6 million (about Rs 3,200 crore) in December last year from its listing on the Alternative Investment Market (AIM) of LSE. — PTI

Darby to invest

New Delhi: The private equity arm of Franklin Templeton Investments, Darby would invest Rs 75 crore in Escorts Construction Equipment Limited (ECEL), manufacturer of construction and material-handling equipment. The investment would be made through Darby Asia Mezzanine Fund II to fund ECEL’s expansion plans including a manufacturing facility spread over 15 acres of land at Ballabhgarh in Haryana, a company statement said. “Mezzanine finance is an attractive source of long-term capital for us as we pursue our plans for growth and an increased share of overall market,” Escorts Chairman Rajan Nanda said. — PTI

TDI Mall in Agra

Agra: The Taj Mahal city of Agra has got its biggest shopping mall, and item girl Rakhi Sawant was there for its opening. Just a kilometre away from the Taj, in the heart of the tourist complex on Fatehabad Road, the TDI Mall will have many outlets for handicraft makers from Agra. Travel agents too will provide an array of facilities while fast food joints and leading brand outlets will be the major attractions, Ravinder Taneja, managing director said. — IANS

Temasek Tower deal

Singapore: Southeast Asia’s biggest developer CapitaLand Ltd. said its subsidiary has agreed to sell the 52-storey Temasek Tower in Singapore to a unit of Macquarie Global Property Advisors for S$1.04 billion ($686 million). The sale of the building, in Singapore’s business district, will be completed in April and would result in a gain of S$427 million for CapitaLand, the company said in a statement. — Reuters

Innova for Clarion hotels

New Delhi: Innova Hotels and Resorts Pvt Ltd today said it plans to invest Rs 200 crore to develop and promote three Clarion Hotels, from the house of Choice Hospitality hotels. Innova is a joint venture between the Gupta Group of Asian Hotels and US-based real estate company Hillwood. Initially, Innova would develop three 150-room Clarion Hotels in Bangalore, Pune and Hyderabad. Land for these hotels has already been purchased, it said in a press note. The company is looking for more sites in Chennai, Mumbai and Jaipur and plans to invest an additional Rs 250 crore in the next five years, he added. — PTI

Merril Lynch stake

New Delhi: Indiabulls Real Estate, the newly demerged entity of domestic financial services firm Indiabulls, today said that Merril Lynch has picked up a 9.1 per cent stake in the company. Indiabulls Real Estate, which was listed on the stock exchanges as a separate entity last week, today informed the stock exchanges that global fund house Merrill Lynch has acquired over 1.61 crore shares, amounting to 9.1 per cent stake. — PTI

Ajmera Group’s move

Mumbai: BSE and NSE-listed Shree Precoated Steels and Anik Development Corporation have submitted a scheme of amalgamation to the Bombay High Court. The companies have got a no objection certificate from both the stock exchanges, a press note said here. The swap ratio has been fixed at 5:6. Shree Precoated Steels is the flagship brand of Ajmera Group. The amalgamation is a first step toward corporatisation of the real estate business, Ajmera Group Managing Director Bandish Ajmera said. — PTI

IndoChina Capital

Hong Kong: IndoChina Capital, which runs a London-listed Vietnam fund and two property portfolios in the country, is considering a spinoff of its real estate holdings to create Vietnam’s first real estate investment trust. Peter Ryder, chief executive officer of Hanoi-based IndoChina Capital, said the company is considering a listing of resort and multi-use property in booming Vietnam worth at least $200 million on either the Singapore or Vietnamese bourse. — Reuters