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King of the ring
While the argument for affordable housing is gaining momentum in the country, Chandigarh Housing Board seems to have taken a lead by offering around 13,000 dwelling units for different income groups, making the housing mart all the more exciting for buyers, writes
Pradeep Sharma While there is fierce competition between private players, both big and small, for hogging a bigger share in the ever-burgeoning housing market, the CHB’s plan of constructing over 13,000 dwelling units, including those for the economically weaker sections (EWS), seems to have set the cat among pigeons. With CHB set to come out with mega residential projects after many years, the private realtors will be compelled to re-assess their marketing strategies to retain the clientele in the periphery where, more often than not, basic amenities are in a mess. Harmeet Singh, a small businessman, who had been scouting for a suitable deal in Chandigarh’s periphery for several months now, seems to have dropped the idea as he wants to try hid luck for an apartment in Chandigarh itself. “While a two-bedroom flat on the city’s periphery costs between Rs 20 lakh to Rs 23 lakh, a similar one will cost around Rs 29 lakh in Chandigarh. In fact, given excellent facilities that the city offers and the fact that my workplace is in Chandigarh, I would prefer to pay a little more for a CHB flat rather than go in for a state-of-the-art apartment in any of the satellite towns of the city,” he adds. The dream of owning a house in Chandigarh, which boasts of world-class facilities, already seems to have enthused a large number of people, including the powerful UT employees, who till now formed a major chunk of the clientele of private builders coming up with mega projects in the periphery. In fact, in a move to “deal with” the shortage of housing for the government staff the board had already floated a special housing scheme for UT staff at prices much lower than those for the housing scheme for general public in Sector 63. And in a bid to give a tough competition to the private players, the housing board has kept the prices at “affordable levels”. The price of a three-bedroom flat is Rs 39.69 lakh while a two-bedroom apartment would cost Rs 29.14 lakh. A one-bedroom flat will cost Rs 17.29 lakh with EWS tenement consisting of one room having a sale price of Rs 5.67 lakh. “The board has worked out the prices after a lot of deliberations and these are quite reasonable given the infrastructure and the location of the housing projects,” CHB chairman Mohanjeet Singh claims. If the board sources are to be believed then the prices of the upcoming apartments in Sectors 53, 54, 55 and Hallomajra are going to be “almost equal” to those in the Sector 63 scheme. The area consisting of Sectors 53, 54 and 55 is prime property as it is strategically located between Chandigarh and Mohali. So is Hallomajra as it is in the vicinity of the Chandigarh Airport, a CHB official asserts. Observers claimed the CHB chairman’s claim is not far-fetched when compared to specifications and prices offered by leading builders such as Omaxe, Ansals, Motias, Silver City, TDI and Sunny Enclave in Chandigarh’s periphery. A majority of these developers offer a covered area of 1,500 to 1,800 square feet for a three-bedroom apartment in Chandigarh’s vicinity within a price range of Rs 27 to 35 lakh. On the other hand, the CHB offers a three-bedroom apartment plus a servant quarter with an area of about 2,000 square feet at over Rs 39 lakh which seems to be a good bargain, argues A.K Sharma, a Panchkula-based property analyst. Apart from end users the speculators would also have a field day in the CHB housing schemes since Chandigarh is one of those cities where property prices have seldom come down even at the time of recession, he claims. Property watchers believe that besides having a bearing on the prices of flats being offered by the private builders, the CHB’s price regime would also have an effect on the prices of the thousands of the group housing societies dwelling units in Chandigarh’s Sector 48 to Sector 51. Atul Mittal, a Noida-based realtor having stake in Chandigarh’s periphery projects, concedes that CHB’s project could pose a major challenge to the private players. Since the CHB gets land at a very cheap prices from the Chandigarh Administration, it could keep the prices “affordable” even in the wake of a spurt in the construction costs, he feels. However, in the backdrop of consumer awareness, quality of the construction is going to be the only hallmark in the months to come and the private builders are likely to score on that point over the “sarkari board”. However, board sources claim that being aware of quality-conscious prospective buyers the board had already outsourced the design and construction. Even as the private players and board officials make claims and counter-claims, the prospective buyers have all the reasons to be elated over the options available to them. Some observers even feel that since thousands of apartments in Chandigarh and its surrounding areas are up for grabs the private builders and CHB could be forced “rationalise” the price structure. Should that happen the prospective buyers stand to gain. With easy availability of home loans and subsequent rebate on income tax, the end users and speculators are going to be in advantageous position.
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Global Touch
With the $15 billion realty sector in India booming at an annual growth of 35 per cent and global players lining up investments worth some $10 billion, this industry has begun attracting international planners and architects. So don’t be surprised if fancy realty project names like Orchard Country, Sun City, Malibu Towne, Espace Nirvana Country and Karma Lakelands also have some top international civil engineers and architects associated with them. “With the influx of global realty developers in India, home-grown companies are also signing on architects and engineers with international footprint to give a touch of class to their projects,” said Kunal Banerjee of Ansals API. His company has hired the services of New York-based architects FX Fowle for the projects in the national capital and surrounding satellite towns, just like what Omiros One of Australia is doing for Omaxe’s residential towers. And these are not the only names. Emaar MGF has hired the services of a host of global architects, like Singapore-based SRSS Architects, Bentel Associates of South Africa and Giorgio Armani for its various projects in India. “International architects have better expertise and exposure to tackle complex projects like theme townships, golf cities or technology parks. All need expert designers and experienced master-planners,” said Pramod K. Magu of Unitech. “These global players provide us access to the latest in design and construction techniques that shorten lead time for completion,” Magu, who is the company’s executive vice-president and an architect himself, told IANS. Experts in the industry say these international names come with a price tag, but nobody is complaining about the costs. “Hiring an international architect costs 5-10 per cent of the total cost, depending upon the project. The cost actually doubles compared to what we incur by hiring Indian architects,” said industry expert. “Yes, there is just fractional increase of cost,” added a spokesperson for DLF. “The increase is around Rs 40-100 per sq ft. But this is easily recovered from the premium of up to 20 per cent on account of better design.” Some developers hire multiple design firms together for a single project. Unitech, for instance, has 10 global architecture and design consultants for the $3 billion Unitech Grande project, a super-luxury residential complex over 347 acres along the Noida expressway neighbouring the national capital. This project has experts like US-based mall designer Callison and landscape artists SWA and EDAW, as also Britain’s RMJM for architecture and interiors and HOK for floor plans, besides Australian golfer Greg Norman. Likewise, Ansal API’s 5,000-acre Sushant Golf City in Lucknow has the course villas designed by New Zealand’s Woodham Meikle Zhan Architects Ltd, golf course by Martin Hawtree and landscaping by Thailand-based KTGY.
— IANS
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REALTY CHECK
Growing at a rate of 25 per cent, the country’s organised retailers are set to exploit the potential of the tier II and tier III cities, as they have already lined up about Rs 1,31,804 crore in the last six months, a study said last week. “Inflated land prices in metropolitans and growing untapped consumer markets in the smaller cities, the tier II cities such as Hyderabad, Kochi, Goa, Chennai, and Chandigarh are becoming the preferred destination for investment by these leading real estate players for exploring the retail business opportunities,” Assocham President Venugopal N. Dhoot said. Tracking investments during the period September 2007 to February 2008, the organised retail is set to penetrate the tier II and tier III cities, as they are attracting the major share of investment announcements worth Rs 27,550 crore, according to Assocham Investment Meter (AIM). With mega retail malls coming in a big way, the real estate development for the organised retail sector has attracted maximum number of investment announcements amounting to Rs 65,000 crore. Real estate developers such as Unitech and DLF have announced major expansion plans to set up large shopping malls. Unitech has fixed a capital expenditure of Rs 20,000 crore, DLF with an outlay of Rs 16,000 crore and a plan of Rs 15,000 crore by Parsvnath Developers to foray into the construction of mega retail stores. The fast growing Indian economy has given a major thrust to changing consumer behaviour as reflected by the increase in investment announcements worth Rs 29,154 crore for setting up hyper marts, the study added. Reliance Retail has set aside Rs 24,000 crore for setting up hyper marts by the year 2010-11 in National Capital Region (NCR), Spencer retail announcing a capex of Rs 3,000 crore for expanding its retail outlet and setting up hyper marts in the next three years. With huge demand for food and grocery items in the country of 1.1 billion population, the organised retail in this segment is gaining momentum. Capex of Rs 22,100 crore has been planned to be invested in setting up chains of food and grocery stores in the next three years. Reliance Retail has announced an investment outlay of Rs 12,700 crore to set up grocery stores by next two-three years in cities like Hyderabad and NCR. The Aditya Birla group has also announced its investment plan of Rs 8,000 crore to set up a chain of stores in the country in next three to five years. Companies like Wadhawans Food Retail, Subhiksha, Dabur have also made investment announcements worth Rs 1,500 crore, Rs 300 crore and Rs 200 crore, respectively in tier II and selected tier III cities during the past six months. While the textile and the garment industry is facing tough competition due to rupee appreciation and high competition in the international market, the industry players are betting on the booming domestic market. In the past six months, a major expansion was seen in the textile and apparel segment by large retailers, including Provogue, Trent, Arvind Mills drawing up the investment chart of Rs 7,900 crore for setting up new stores in cities like Pune, Hyderabad, Navi
Mumbai.
Provogue with a capex of Rs 6,000 crore has made an announcement to set up 40 new stores in tier II and tier III cities by next fiscal. Other major fashion brands like those of Arvind Mills, Donear Industries and Trent are upbeat on the robust consumer demand and plan to invest Rs 400 crore, Rs 300 crore and Rs 250 crore, respectively. With more and more corporates investing in the sector, the prospects of job creation will surge in the next five years in cities like Hyderabad, Pune, Surat and Chandigarh among others.
— UNI
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PUDA auction dampens realtors’ hopes
The much-hyped recent auction of over two acres of government-owned land situated in the heart of Ludhiana ended in a whimper, raising serious doubts about the claims of real estate prices soaring in the city. Much against expectations the auction of Old Sessions Courts land fetched just Rs 1.46 lakh per square yard for the Punjab Urban Development and Planning Authority. This has forced property dealers and real estate companies in the city and the state to think how real is the property boom. For many this lacklustre auction may set a negative trend as far as prices are concerned. Moreover, it was the first major auction of government land put for sale in the city under the optimum use of vacant government land (OUVGL) scheme. But the revenue earned has belied the hopes of all those who thought of raking in moolah through this. Experts confide that the government will have to do a re-thinking on whether to sell a large chunk of land as a whole or auction it in parts for better returns. The PUDA officials were expecting that the land would fetch as high as Rs 3 lakh per square yard. There had been claims that the auction would break the past records in terms of value. In spite of being in a prime location, it could not attract more than three bidders. One of them withdrew only after the bid went up to Rs 2,400 more than the reserve price of Rs 1 lakh per square yard. The PUDA, which was auctioning the land despite protests by local residents, who wanted the space for setting up a park, settled for Rs 175 crore. That too after the officials prodded the bidders for several hours to bring the final bid for 2.474 acres at Rs 175 cr. A Gurgaon-based company, Jasmine Projects Private Limited won the bid finally. Contrary to expectations of real estate experts that several companies would bid for the land that can be used for raising a multiplex, a mall or a hotel, only three bidders deposited an earnest money of Rs 1.20 crore with PUDA. Ludhiana-based Ashok Malhotra of Palm City was one of the bidders, who withdrew his bid soon. Only two companies, Best Hotels and Resorts, New Delhi and Jasmine Project, Gurgaon, were, thus, left in the fray. While the PUDA officials claimed that they were happy with the outcome, the real estate dealers said the amount was far less than what they had expected. They argued that it was a huge chunk of land located in an area where there was not an inch of vacant land left. “But there were no takers. This raises the question where were the other big investors? Nobody turned up. If such prime piece of real estate attracted only three bidders then the obvious impression is that there is a dearth of investors in Ludhiana. It has really dampened our spirits," said a real estate agent. He added that it was being stated that companies like DLF, Ponty Chadda group would be vying for the land. “But where were they? ” Real estate agents said they were hoping that this land would fetch a much higher a price than any other property in the city. Yet another property on Ferozepore Road, near PUDA office, had fetched more than this. They said the land was priced at Rs 3 lakh per square yard in Feroze Gandhi market. “There is no hype surrounding this land. Still it fetched Rs 3 lakh. People in this market paid Rs 1 lakh for this place five to eight years ago. Then that land should have fetched a much higher price,” said K.S. Monga, a property owner in Feroze Gandhi market. Monga also said small plots in areas as far as Metro Road in focal point had fetched Rs 1.25 lakh per square yard. The real estate agents even alleged that the two bidding companies had formed a pool. “That is why they were raising the bid amount by just Rs 100, 200 and 500. It was only after PUDA officials hinted that they would cancel the auction that the companies started bidding in thousands rather than in hundreds.” Additional chief administrator of PUDA S.R. Kaler, however, expressed satisfaction at the outcome of the auction.
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Pre-fab wood houses enter India
Lockwood International, a leading New Zealand-based wood construction company, has launched its first pre-fabricated wood houses in India aimed at the luxury realty segment in the country. The company showcased its first model house at the Classic Golf Resort in Gurgaon, on the outskirts of the national capital, on Tuesday. MacDonald Sarin, a realty asset management company in Gurgaon, will market the houses in India. “Just like modular kitchens and bathrooms, pre-fabricated wood houses are made by fixing pre-designed wooden building blocks,” said Ajit Sarin, the proprietor of MacDonald Sarin. The houses cost between Rs 6,000 and Rs 7,000 per sq ft. “The wooden building blocks are fixed by a special lock-wood technology without the use of nails or cement or steel in just two months. So people do not have to wait for a year or two to enjoy their dream house,” Sarin added. “These houses are very popular in European countries. Initially we will cater to the high end segment, designing it specifically for farm houses and second homes. But in future we will expand this concept to the middle housing segment.” The Indian Forest Research Institute has tested pinewood for its suitability in Indian conditions, Sarin said, adding these structures are also resistant to earthquakes and termite attacks. New Zealand’s agriculture, forestry and fisheries minister Jim Anderton launched a prototype of the house. He is in India to offer sustainable timber resources to the booming Indian housing and construction industry. “As India is now protecting its native forest and needs to import the timber to meet growing demand for construction and other industry, New Zealand can provide the timber for its huge construction industry,” he said. “The New Zealand wood industry currently generates $3.1 billion in exports to India. We are the fifth largest export market for wood products.”
— IANS
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Realty deals under IT scanner
To keep a check on underhand real-estate transactions the Income-Tax Department will now mandatorily scrutinise cases in which loss from house property is shown as more than Rs 2,50,000 and investment in property is more than five times gross receipts. In a communication from the Central Board of Direct Taxes to IT officials it has been pointed out that secrutiny notices should be sent to all builders and those involved in real estate business activities having a turnover of Rs 5 crore or more. Through these notices the assessing official can ask builders to appear before them to explain the sources of income, net profit, tax deduction at source. They will also be asked to disclose the details of income and expenditure during the past three years. It has also come to the notice of Income-Tax department that many builders are selling flats by taking money partly in cash and not disclosing it in the annual returns. It has been further pointed out that many builders are taking money from home buyers in advance, but they show income in tax returns after the completion of projects only. In many cases the bank accounts of real estate businessmen have been sealed. Stiff scrutiny norms for property deals are the result of high level of activity in the real estate market. The government wants to ensure that people are paying taxes and that there was no black money in circulation. Those who have filed their returns by July 31 will be issued notices for scrutiny by July 31, 2008 by the IT department. In a number of cases the IT department has already issued notices and builders from Mohali, Zirakpur, Panchkula and Chandigarh have been asked to review the statement of bank accounts, match withdrawals with expenses, including those having credit cards. Scrutinies would also include interest free loans given by builders to their employees, property agents and through lucky draws. Only last week IT officials have searched the premises of the real estate businessmen in the tricity. High value property transactions exceeding Rs 80,000 crore in the last fiscal have put taxmen on high alert. The government has further decided to increase the number of scrutiny of tax return from 0.8 per cent to 2 per cent of all high value transactions.
The writer is a senior banker
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Pay panel report jacks up realty stocks
Realty stocks continued their upward march on the bourses on Tuesday on brisk buying by brokers and other market participants on optimism that the proposal to raise salaries of government employees will help lift demand for housing. The BSE realty second index shot up by 645.06 points at 7,451.24 on Tuesday as construction stocks led by country’s biggest developers DLF Ltd and Unitech Ltd recorded handsome gains, extending maximum support in lifting the Bombay Stock Exchange (BSE) benchmark Sensex to regain 16,000 points level. The stock markets across the board, which had been under selling pressure on rising concerns of recession in the US, witnessed a sea-change and fuelled buying of realty stocks. DLF rose 13.4 per cent to Rs 678.65, Unitech rose 10.21 per cent to Rs 279.15. Indiabulls Real Estate traded 2.91 per cent higher at Rs 435.30. A committee formed for the pay commission recommended an average 40 per cent rise in salaries of government employees, which might generate more buying power and might boost housing sale, market men said. Others on the higher side were Housing Development Finance Ltd by Rs 70.90 at Rs 581.50, Parsvnath by Rs 11.55 at Rs 185.40, Shobha Developer by Rs 6.80 at Rs 603.85, Akruti City by Rs 16.25 at Rs 697.75 and Anant Raj Industries by Rs 27.05 at Rs 230.
— PTI
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Salarpuria group eyes hotel industry
Real estate major Salarpuria Group is all set to invest billions in West Bengal with projects ranging from hotels and residential complexes to IT special economic zones
(SEZs), a top company official said in Kolkata. Some of the key projects on the anvil for the group include a 350-room four-star hotel at the upcoming township of
Rajarhat, Kolkata and also investments in two IT special economic zones
(SEZs). “We have planned to develop this (hotel) project within two-and-a-half years from now. The project would be developed over 3.5 acres of land with an investment of more than Rs 2 billion ($50 million),” Salarpuria Group vice-chairman Rakesh Salarpuria said. He said the company has already bought the land from the West Bengal Housing Infrastructure Development Corporation
(HIDCO) Ltd and is now awaiting approval to begin construction. “This apart, the group is also working out on a project to build a 50-room hotel along with a spa and 200 residential duplex bungalow at Thakurpukur on the city’s outskirts. There will be an investment of around Rs 1 billion for the project and it would be implemented in two phases, with Rs 500 million of investment in each phase,” Salarpuria said. The company will also come up with two IT Special Economic Zone
(SEZ) at Kalyani and Bantala in West Bengal. — IANS
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GREEN HOUSE
Satish Narula gives tips
You may have created many special features in your garden. You may have planted many shrubs and climbers. You may also have put a few good pots in the passage. But all compliments may be choked if the grass in the lawn is not lush and green. It’s like a man dressed in an Armani suit with dust-coated shoes. Lawn is the biggest part of a garden and thus draws the maximum attention. Before seeing anything in the garden the eye travels to the turf. Any other feature in the garden is like a painting on a canvas. This is where you sit to relax after a hectic day. This place has to be the best. Those who participate in various garden shows know that maximum marks are attached to the upkeep of lawn. In cities where there is limitation of space, there could be certain problems attached with lawns. Also, if you have a very old ‘problem’ lawn or just made your house and want to make a fresh garden, find the best way to do it. In case of small lawns, due to the restricted area, the whole family treads on the same spot day and night and the lawn gets spoilt. The reason in case of big lawns is different. It is poor preparation before planting the grass. There is no reason why a big lawn should need a redoing after three to four years. Summer is the best time to start preparations for laying the lawn afresh. The earth is dug deep. In case of big lawns it has to be the disc plough followed by tines. However, in the home gardens, it can be done with spades. The soil thus pulverised has to be kept open, exposed to summer sun for a few days. During this time the weeds and stones are handpicked. After about a fortnight, the soil is again pulverised in the same manner and weeds handpicked. Remove as many weeds as possible by digging as deep as possible. When satisfied, add super phosphate at about a kilogram of it in 25 square meter area. Also sprinkle lindane dust covering the whole surface. Mix the two well with the soil and level. The level has to be like the table top with a natural slope to one side. If in the meantime, before planting the grass there is rain or you fill the ground with water, watch out for the level and depressions. You can also remove more of weeds if you find them coming out anywhere. Once the soil is
levelled, it is time to plant the grass. It would be better if your time of planting coincides with the onset of rains. At the time of planting, make sure you do close planting, say at four inches. This will ensure a fast turf formation. One of the most important operations will be to keep removing weeds as they appear during the time till you get a full turf. The writer is a senior horticulturist from PAU at Chandigarh and can be contacted at
satishnarula@yahoo.co.in
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Tax tips
Q. I am a senior citizen and have recently sold for Rs 26 lakh my share of the inherited agricultural land within municipal limits acquired by my grandfather much earlier than 01.04.1981. As its acquisition cost is not known to me, I have been advised to get the fair market value of the land in question ascertained from an approved valuer. I seek your expert advice on the following: Is there any government authority whose valuation of the land in question would be readily accepted by the Income Tax department? For the land sold in December, 2007, what is the last date, including grace days, if any, for filing the IT return? Is there any specific IT return form no. for LTCG tax. Can the filing date be got extended and how? — R.S. Sandhu, Patiala A. The Central Government has its own valuation department to whom valuation of properties is usually referred to by the Income-Tax department in case of difference of opinion between the Assessing Officer and the assessee. The valuation reports prepared by the Valuation Officer of such department are binding on the Assessing Officer. However, an assessee cannot directly make a reference to such department. The last date for filing the return in your case would be 31st July 2008. There are no grace days available for filing the tax return. However, you can file the tax return by 31st March 2009 without attracting penalty. You would, however, be liable to pay interest under Section 234A of the Act at the rate of 12 per cent per annum on tax payable for the relevant assessment year. Such interest is chargeable up to the date of payment of tax on the assessed income. The return forms as prescribed for assessment year 2007-08 would not be applicable for assessment year 2008-09. These would be prescribed in the month of May 2008 i.e. after the Finance Act 2008 is passed. The Act does not contain any provision for extending the date for filing the return of income. The Central Government, however, has power under Section 119 of the Act to extend the date of filing the returns.
Joint loan account
Q. Me and my wife are government employees working in PSEB and educational department, respectively. My wife purchased a PUDA plot at Bathinda (Punjab) from market at market rate. The registry of the plot is in the name of my wife only. However, we have raised a housing loan for construction of house on the land from O.B.C. in the name of “Ritu Gupta and Rajesh Garg – Joint Account”. The first name in the joint loan account is that of my wife. So you are requested to kindly clarify: Can both of us claim deduction of interest/instalment if I deposit Rs 4,000 per month from my salary and my wife deposits Rs 3,000 per month from her salary separately for repayment of interest/instalment for 2007-08, 2008-09? What will be the quantum of deduction that both of us can claim in respect of interest and principle for 2007-08, 2008-09? What other declarations have to be produced by us to IT authorities or to employer? — Rajesh Garg, Bathinda A. The answer to your queries is as under: The deduction of interest under Section 24 of the Act can be claimed only by a person who is the owner of the house. Accordingly the deduction from ‘Income from house property’ towards interest paid on loan raised for construction of the house can be claimed by your wife only. The deduction under Section 80C of the Act towards the repayment of the loan raised for construction of house can also be claimed by the owner of the house. In this case also, the deduction would be allowable to your wife only. Your wife can file a declaration under rule 26B of the Income-tax Rules 1962 alongwith a statement of chargeable “Income from house property” other than a loss under the said head of income with the office where she is working. The department would take into account such income for the purpose of computing the tax payable on her total income, including income from house property.
The writer can be contacted at sc@scvasudeva.com
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The real estate boom in Chandigarh and its periphery is set to make consumer the king in the year 2008. Close on the heels of major realtors changing periphery’s skyline, the Chandigarh Housing Board (CHB), the monopolistic real estate arm of the Chandigarh Administration, is making major forays into the housing sector after a gap of several years with the aim of providing “affordable housing” to almost every section of society.
A luxury villa designed by Giorgio Armani, an 18-hole golf course conceptualised by Greg Norman and skyscrapers with the FX Fowle touch - hiring global professionals has become a new trend with Indian realtors.