Research

On Government Initiatives
Which will boost up Real Estate Market in
• CHENNAI • GURGAON • NAVI MUMBAI

Real estate
The Indian real estate sector plays a significant role in the country's economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Almost five per cent of the country's GDP is contributed to by the housing sector. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. According to Jones Lang LaSalle, faster economic growth in Brazil, Russia, India and China (BRIC) could result in the property markets of those nations recovering at a faster rate than the UK and US real estate markets. It has also been suggested that India's property sector could begin to improve from late 2009 and may attract up to US$ 12.11 billion in real estate investment over a five-year period. Almost 80 per cent of real estate developed in India is residential space, the rest comprises of offices, shopping malls, hotels and hospitals. According to the Tenth Five Year Plan, there is a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle- and lower-income groups. Moreover, India leads the pack of top real estate investment markets in Asia for 2010, according to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, a global non-profit education and research institute. The report, which provides an outlook on Asia-Pacific real estate investment and development trends, points out that India, particularly Mumbai and Delhi, are good destinations. Residential properties are viewed as more promising than other sectors and Mumbai, Delhi and Bangalore top the pack in the hotel ‘buy' prospects as well. The study is based on the opinions of over 270 international real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants. Apart from the huge demand, India also scores on the construction front. A McKinsey report reveals that the average profit from construction in India is 18 per cent, which is double the profitability for a construction project undertaken in the US. The real estate sector is also likely to get a boost from Real Estate Mutual Funds (REMFs) and Real Estate Investment Trusts (REITs). In fact, according to a CRISIL paper, the REITs would have the potential to hold at least 5 per cent share of the total global real estate market by 2010, the size of which would reach US$ 1,400 billion in the next three years. The paper titled, ‘Indian REITs; Are We Prepared', says that by 2010, REITs alone would hold a market size of US$ 70 billion of the total real estate market as its concept is gaining ground in countries like India and other developing nations. According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian real estate sector is likely to experience consolidation wherein bigger players may opt for outright buy of smaller firms or forge joint ventures or business alliances with them. Foreign direct investment (FDI) into India in the real estate sector for the fiscal year 2008-09 has been US$ 2.8 billion approximately, according to the latest data given by the Department of Policy and Promotion (DIPP). Moreover, buoyed by positive market sentiment and demand revival in housing, four real estate companies—Emaar MGF Land, Lodha Developers, Sahara Prime City and Ambience Ltd—are looking to mop-up over US$ 2.35 billion through public offerings.

Brief of Every Place about Real Estate Market……
Chennai Real Estate is rapidly growing......
Chennai is considered as a preferred business destination of MNC and corporate houses in India due to its earmarked potential on financial costs, outstanding business environment and high quality manpower. Chennai real estate is recognized to be the recurrent wealth accumulator because it occupies the place one of the hottest cities among the Indian real estate market. Chennai real estate continues to grow at a faster rate to garner investments from MNCs and corporate like Mahindra- Nissan- Renault, Caparo Group, Moser Baer in the city. Due to the announcement of the airport expansion and a new Greenfield airport has spurred the demand in Chennai property very recently. Chennai has emerged first amongst the top 10 emerging destinations worldwide for outsourcing of IT and business processes in a recent study. Therefore, both international and domestic players are aggressively spreading their foot prints in Chennai property market with a pan India presence either by means of ownership properties or joint venture routes.

Market deals
Client Building Name Area (SQ.FT.) Location Transaction Type Lease Lease Lease Lease Lease

Vestas Deloitte CNSI Hero Daimler GSK

Tecci Park

70,000 40,000 20,000 18,000 10,000

OMR T.Nagar Egmore Anna Salai Chetpet

ASV Ramana Towers
Samson IT Park Sterling Towers KRM Towers

Source: Colliers International India Research

Commercial Real Estate
During 2007, over 7 million sq.ft of Grade A office space was transacted as compared to 5.1 million sq. ft in the year 2006 across Chennai. The first IT/ITES special economic zone (SEZ), the DLF IT/ITES SEZ in Mount Poonammallee Road was completed in 2007. Chennai real estate (office markets) is classified into 4 components: Central Business District that includes Anna Salai, T.Nagar and RK Salai Off/Non Central Business District that includes MRC Nagar, Guindy and Taramani Suburban and Peripheral Business Districts that include Old Mahabalipuram, GST Road, Poonamallee High Road and Mount Poonamallee Road The demand for office spaces are mainly driven by IT/ITES companies that are expanding into these micro markets. In recent years, Ambattur is newly emerging as the city’s new IT hub, a western industrial suburb of Chennai property market and also GST Road and MRC Nagar are gaining huge momentum in catering to office space requirements.

Some of the major transactions in Chennai real estate market are:
1. CENTRAL BUSINESS DISTRICT (ANNA SALAI, T NAGAR, R K SALAI) Atmel Technologies – 19,000 sq. ft. NSE – 10,000 sq. ft. Axis Bank – 20,000 sq. ft. Quintegra Solutions - 67,500 sq. ft. 2. OFF / NON CENTRAL BUSINESS DISTRICT (MRC NAGAR, GUINDY,

TARAMANI)

♣ Paramount Airways – 10,000 sq. ft ♣ Hella Engineering – 9,500 sq. ft ♣ CMC – 19,000 sq. ft
3. SUBURBAN & PERIPHERAL BUSINESS DISTRICTS (OLD MAHABALIPURAM, GST ROAD, POONAMALLEE HIGH ROAD, MOUNT–POONAMALLEE ROAD) • India Infoline – 220,000 sq. ft • Satyam – 400,000 sq. ft • Axial Photon Infotech – 47,320 sq. ft • Keane – 60,000 sq. ft

Future outlook
Chennai real estate is rapidly growing at a phenomenal rate in the various corridors with essential infrastructure in retail, hospitality and residential developments that augment the property market growth in the city apart from IT/ITES requirement in the commercial office space. The Special Economic Zones (SEZs) are gaining momentum in recent years in Chennai property market due to huge support and interest from large MNCs and IT/ITES companies in the city.

Gurgaon, the millennium city…..

Gurgaon, the millennium city, was recognized as a potential destination for investors after the liberalization of the Indian economy post 1990s due to its proximity to New Delhi and smart policy initiatives of the Haryana government. Today, skyscrapers and modern Haryana shopping malls dot the new city, which has seen a major real estate boom since the late 1990's. Gurgaon is a district head quarter in Haryana and the heart of a major industrial area. Gurgaon has developed into a large and flourishing town because of its on vicinity to New Delhi which is about 30 Kms from here. Gurgaon also known as 'Guru Gram' or 'Guru Gaon' ( village of the spiritual teacher) was named after Dronacharya, a character in the Epic Mahabharata. It is said that Guru Dronacharya of the Pandavas and the ic Kauravas gave spiritual instructions to them at this place. Till Independence it was industrially backward, but now a large number of industries like Maruti, Atlas Cycles etc have sprang up in this area. Real estate is booming here with new buildings coming up at ang an astronomical pace.

Gurgaon Real Estate- Gurgaon Property in Focus…. Focus

No one ever thought that real estate in Gurgaon will conquer such soaring heights. Gurgaon or now popularly known as the Electronic City of Delhi NCR has become the hot spot for real estate agents & property dealers which is mainly due to the emergence of the software industry there. This real estate boom in Gurgaon property has touched unprecedented heights, which is evident from the number of projects being planned to gratify the increasing demand for residential & commercial property. Thus, cashing this real estate boom many property dealers have started selling and arranging properties which are located close to the highway and also well connected with the city. That’s why many property dealers will try to fulfill your dream of owning a beautiful house. Flying high on the wings of realty, Gurgaon has been in the real estate news for a few years now, and the boom still doesn’t seem to subside in this millennium city. Sensing this hype, properties in Gurgaon are now sold on shy high prices but still shy they are affordable. The main USP of Gurgaon is that Gurgaon is the best location for constructing residential houses and simultaneously commercial complexes. Means whatever your needs may be, they are bound to be fulfilled. Currently several residential properties Currently are in an advanced stage of construction in this suburb of Delhi and many more are in pipeline of being launched. It means soon Gurgaon will rank at the number one slot as being the most hi-tech city. In short we can say that what you’re seeing is a very good tech housing market combined with the nation’s top developers establishing their base in Gurgaon. Currently there are almost 10 big construction projects that are underway, and by the time they’ll be finished new ones will be ready to go. This showcases the power carried by properties in Gurgaon.

Navi Mumbai City of 21st century…..

Seal of the Navi Mumbai Municipal Corporation
Navi Mumbai (Marathi: नवी मुंबई IAST: Navi Mumbai) is a city on the west coast of the Indian ई, ) state of Maharashtra. It was developed in 1972 as a twin city of Mumbai, and is the largest planned city in the world, with a total area of 344 km² and 163 km² under the jurisdiction tota of the Navi Mumbai Municipal Corporation (NMMC). Navi Mumbai lies on the mainland on the eastern seaboard of Thane Creek. The city limits stretch from Airoli near Thane in the north, to Uran in the south. The length of the city is almost the same as that of Mumbai. . The Vashi and the Airoli Bridges connect Navi Mumbai to Mumbai. A new link between Nerul and Uran is under construction. The costliest and most developed areas of Navi Mumbai are Vashi and Nerul. As a result, Vashi is known as the king of Navi Mumbai while Nerul is l. considered as the queen of Navi Mumbai. Navi Mumbai has a population of 2,600,000 of which approximately 800,000 come from Nerul and about 700,000 from Vashi with the remainder from Belapur, Sanpada, Airoli, Ghansoli and Koparkhairne and surrounding areas. elapur, Navi Mumbai is a part of the Mumbai Conurbation. NMMC is also rated amongst the richest corporations in Asia. Navi Mumbai is the only Indian city to be featured in the National Geographic Channel's Super Cities of the World. World

Planned city….

Seawoods Estate formerly known as NRI Complex in Nerul is the “Costliest Location” of Navi Mumbai. .

Utsav Chowk at kharghar.

Shivaji Chowk.

Recent Projects Running In Chennai…
Vision India Real Estate Plans Affordable Housing in Chennai. Big developers Partner with Local Developers to Complete Projects Quickly. Mahindra Lifespace to Set up Business Parks in Chennai and Pune. Emaar MGF Expands its Operations in Chennai. Builder Unveils Chennai’s Costliest Apartment Project. Residential hotspots to watch out for, in 2010. Call Express to launch new residential project on Chennai’s IT corridor. Muthoot Pappachan group plans two hotels in Chennai. Lancor Holdings eyes affordable housing segment. Tata Realty announces Rs 3,500 crore IT city in Chennai. Godrej Properties Joins Hand with Addison to Develop Residential Project near Chennai. Godrej Properties plans residential project near Chennai Doshi Housing launches Serene County in Chennai. Mahindra Lifespaces launches a premium residential community at Mahindra World City, Chennai.

Projects Initiated by Government….
Government Initiatives to Ease the Rising Pressure on Existing Infrastructure in Chennai
The growing population and the rising real estate development in Chennai city continue to put pressure on the existing infrastructure of the city. To ease this pressure, the Government has initiated various projects as follows:

Master Plan for Chennai Metropolitan Area:
CMDA [Chennai Metropolitan Development Authority]
The National Seminar on the Second Master Plan for CMA – ‘Avenues and Opportunities’ was organised in Chennai during 31st October 2008 and 1st November 2008. CMDA in the opening remarks stated that the challenges are most prominent in the areas of shelter, traffic and transportation, infrastructure development including water supply, sewerage, solid waste management, and environment. The Second Master Plan has brought to centre stage the modes of transforming these challenges into opportunities. The judicious employment of modern technology, active participation of the public and NGOs, the visionary leadership of the Government, its Departments and Agencies, and the joint effort of the Government Departments and Agencies are required for achieving the objective of having a harmonious metropolis. Here they actually wanted to do development in recommended six fields:

Urban Development and Management: Indian Experience. Traffic, Transportation and Parking. Water Supply, Sanitation, Solid Waste Management and Flood Alleviation. Shelter. Environmental Management, Infrastructure Development and Financing. Land Use and Development Regulations.

Great Southern Trunk Road and Ambattur - Emerging IT Hubs:
One of the prime reasons that led to the establishment of Old Mahablipuram Road (OMR) As the preferred commercial destination for the IT/ITES sector was government support. The Tamil Nadu government declared OMR as the IT corridor and provided initiatives Such as infrastructure to ease congestion in the city.

GST Road in southern–western suburb has emerged as a new IT corridor besides the western has OMR in the suburban district of Chennai. The GST Road precinct is close to residential Locations such as Perungalathur, Vandalur, Mudichur, Tamabaram, Chrompet and m Pallavaram. It also has good rail and road connectivity. Moreover, the airport is located connectivity. along GST Road. These factors are proving advantageous for GST Road projecting it as the next IT hub of Chennai. Ambattur forms part of the secondary business district (SBD), and is situated in the western quadrant of the city. It is fast emerging as another IT/ITES hub in Chennai. The Ambattur micro-market is close to residential areas such as Anna Nagar, Kilpauk, market Korattur and Avadi. It also has better accessibility to the city centre and existing hotels.

Grade Separators at Key Junctions within Chennai City: City

Proposed Katiphara junction…
The completion of grade separators at Katiphara, Koyambedu and Padi Junction will be a Major Facelift to Chennai’s infrastructure. There is alarming traffic congestion at these junctions. The Katiphara junction is located at the intersection of GST Road, Inner Ring Road, Mount Poonamallee Road and Anna Salai. The Koyambedu junction is located North of Chennai at the junction of the Inner Ring and Poonamallee High Road (NH4). orth The Padi junction is at the intersection of Inner Ring and the new Avadi High Road. We expect these grade separators to manage traffic and reduce travel time within the city. The Completion of these grade separators is expected by end end-2009.

Eight Lanes IT Corridor Highway:
In Old Mahablipuram Road, a 22 km IT corridor, starting from Madhya Kailash Temple junction in Adyar (SBD) to Siruseri (Suburban) a six-lane, two-non-motorised lanes and six motorised two service lanes are proposed. The IT corridor project is being implemented in two project phases: phase I, which is between Madhya Kailash Temple Junction and Siruseri, and phase II, which is between Siruseri and Mahabalipuram. At present, phase I is being developed and feasibility studies for phase II have been completed. At present, the IT corridor has around 9 million sq ft of Grade A office space and another 10 million sq ft of Grade A office space to be completed by 2008 2009. This express highway will provide 2008–2009. better connectivity to all IT companies such as Accenture, Satyam, Infosys, TCS, HCL and WIPRO with operations along this road.

Phase II of the Chennai MRTS:
The first phase of the Chennai Mass Rapid Transport Systems (MRTS) project, an 8.5 km stretch that connects the Chennai Beach railway station (CBD) to Thirumylai (CBD), was completed in 1997. The implementation of phase I partly eased the commutation in the city. In continuation, phase II of the MRTS is an 11.16 km stretch connecting Thirumylai (CBD) to Velachery (Suburban). The stations of phase II, such as Taramani located in the SBD, will provide quick accessibility to major IT parks such as the International Technology Park Chennai and Tidel Park. This is likely to increase the connectivity of the IT corridor with the rest of the city. The second phase is expected to be completed in early 2008. These infrastructure initiatives by the government will provide fillip to the real estate development within the city and in its suburban locations. With improved connectivity of the city center with the secondary and suburban locations, commute time between key residential areas and upcoming commercial districts of Ambattur, OMR and GST road will reduce. This will benefit the real estate market in the long term and project Chennai as a preferred commercial and residential destination.

Major Infrastructural Developments in Gurgaon…..
Haryana allocates Rs.900 crore for metro work in Gurgaon. Orris group offers new project Orris Carnation Residency in Gurgaon at affordable price. ABW Infra To Invest Rs.1,000 Cr. On Township In Gurgaon. Emaar MGF to invest Rs 500 cr on Gurgoan housing project Mapsko Paradise New Project in Sector 82 Gurgaon. Vatika Launches New Premium Floors Aster, Acacia and laurus in Gurgaon. Raheja Builders launches residential project in Gurgaon. BPTP launches Park Prime residential project at Gurgaon after Parklands Faridabad.

Tata Housing progresses into Phase II of Raisina Residency, launches Victoria in Gurgaon. Gurgaon calls up residents for development work. NH8 Expressway.
The upcoming eight lane toll expressway between Gurgaon and New Delhi, scheduled to become operational in April 2007 which will provide non-stop connectivity to the International Airport and Dhaula Kuan in Delhi over a distance of 28 kilometers and includes 7 flyovers and 5 underpasses along the stretch. Property prices around it have shot up to Rs 5,000-6,000 per sq ft.

Specialised Malls.
Gurgaon will soon have an Auto Mall and a Wedding Mall being developed by Omaxe. Gurgaon is also set to get the biggest mall of the world with an average size of 2.5 lakh sq. ft. It is being developed by DLF Universal and to be known as the Mall of India. Many more such large format malls are coming up, which offer over 1 lakh sq ft of space.

Rajiv Gandhi Education City.
With the proposed Rajiv Gandhi Education city, in Kundli on the Delhi-Haryana border, this area has the potential of becoming an education hub.

“The Real Estate in Gurgaon has shifted towards commercial segment due to high price structure, high inventory and less demand for residential real estate.”

Commercial Upcoming Projects
CUP projects are separated into three categories according to location, type of project and according the rate of that area.

Project

Location

Type

Rate (RS/sq.ft)

Category A
DLF The Belaire DLF Park Emaar-MGF The Palm Springs La Lagoon Near Golf Course Place Ph-V DLF City Golf Course Apartments Golf Course

3 and 4 BR Apartments 3 and 4 BR Apartments 3 and 4 BR Apartments 4 and 5 BR Apartments

7,250-7,500 6,250 6,315 6,000

Category B
DLF The Icon DLF The Summit Unitech Escape Vatika City Atlantis Apartments

Ph-V, DLF City Ph-V DLF city Sec 56, Nirvana Country Apartments Sector Road On NH-8 Sec 31 and 32

3 and 4 BR Apartments

4,700-4,800 4,700-4,800 4,400-4,600

2 BR

4,000-4,500 6,000

Category C
Unitech Fresco Delight Splendours Bestech Parkview II Bestech Parkview III Residential Upcoming Projects

Sec 56, Nirvana country Sec 57 Sohna Road Palam Vihar

Apartments 3 BR Apartments Apartments Apartments

3,300-3,500 3,300-3,400 3,200-3,300 2,900-3,000

Project Pioneered by government…….
Metro…
The Metro Rail projects at present cover over 100 km and will provide connectivity to areas like Jahangirpuri, Anand Vihar, Mundka, Gurgaon and Dilshad Garden expected to be completed by July 2010. The Haryana government has proposed to levy a tax on property developers to raise the Rs 680 crore required for Gurgaon's Metro rail. It will be part of the external development charges to be announced in January, and will apply to builders of all kinds of properties. This will inflate the cost of properties in Gurgaon as the consumer will have to bear some of the cost.

Kundli-Manesar-Palwal Expressway Palwal
Kundli-Manesar-Palwal expressway being developed as a global corridor offers major Palwal investment opportunities.

Special Economic Zone conomic
The Haryana government is establishing a special economic zone at Garhi Harsaru in New Gurgaon, about 25 km from the international airport in Delhi, adjoining NH-8 and the state NH highway between Gurgaon and Pataudi. The SEZ would be spread across 3,000 acres and ss about 2,400 units are slated to come up in this zone. Gems & Jewellery Park Complex at Udyog Vihar is in the Governments list of initiatives for promoting this sector and is also contemplating seeking SEZ status for this park. Along with that, an Apparel Park is also proposed to be developed in Gurgaon SEZ under the "Apparel Parks for Exports" scheme of the Government of India.

Soon to come Delhi Metro….
Two Metro projects are under way in Gurgaon. The Yellow Line of the Delhi Metro is being extended into Gurgaon, with five stations along MG Road. The line is expected to be completed by June 2010. In addition, the privately owned and operated DLFDLF financed Gurgaon Metro Rail Link is planned to connect the Delhi Metro's Sikanderpur Station to NH-8, with six stations on a 6-km elevated link.

Major Projects Developing In Navi Mumbai…..
Indiabulls Plans Eight Residential Projects. Navi Mumbai’s first luxury hotel by Abil Group. Wellwisher Group makes hospitality foray. MAN Industries to diversify into real estate sector. Metropolis to develop Navi Mumbai’s first luxury hotel. The City and Industrial Development Corporation’s (CIDCO) Rs 5,000-crore theme city project at Kharghar in Navi Mumbai. Signet Hotels to franchise upcoming property to Navi Mumbai Board of approval to decide on Navi Mumbai SEZ
The fate of the proposed Navi Mumbai multi-product SEZ promoted by RIL chief Mukesh Ambani’s aide Anand Jain is likely to be decided in the meeting of the board of approval (BoA) for SEZs next month. The board is scheduled to look at a host of other proposals including eight requests for setting up new zones, two proposals for conversion of in-principal approvals to formal approvals (which is given once land is acquired by developers), several requests for extension of validity of formal approvals where time for making investments has run out and addition and deletion in notified areas of several SEZs. The BoA, comprising key officials from a number of ministries including commerce, finance, agriculture and home, will meet. Three requests for denotification of SEZs where developers no longer want to make investments due to the uncertain economic environment will also be considered. Navi Mumbai SEZ, a multi-product zone spread over 1,234 hectares, which is facing problems in maintaining continuity because of a road and railway line running through the zone, was given formal approval in March 2007 on the condition that units would be allowed to be established in the zone only when the developer builds all the required underpasses and over-bridges as laid down by the BoA, to ensure contiguity.

However, the developer suggested that it should be allowed to construct two skywalks instead of the flyovers and maintain secured connectivity on the ground instead of the underpasses. Since revenue officials were not fully satisfied with the alternatives suggested and were concerned about revenue leakages, the BoA suggested that the development commissioner of the zone should have a meeting with the chief commissioner of customs, Mumbai, to work out a solution. The developers have now submitted a report to the BoA including steps taken to comply with modifications suggested by the chief commissioner of Customs. The BoA will also consider it in its meeting.

Navi Mumbai sees Rs 2K cr land deal
A consortium comprising the Essel Group, promoters of the Zee Group of companies, and Delhi based Bhushan Steel and Power on Thursday won a closely-fought bid to develop an amusement, theme and knowledge city over 250 acres at Kharghar in Navi Mumbai. The consortium has agreed to pay Rs 1,590 crore upfront for the land near Khargar, one of Mumbai’s distant suburbs and close to the city of Navi Mumbai. The bidder also has to deposit another Rs 538 crore with Cidco within a month, valuing the total transaction at around Rs 2,100 crore, which makes it one of the largest real estate transactions in India in absolute terms. The payment is for a 74% stake in a special purpose vehicle or SPV which will implement the project. The City and Industrial Development Corporation (Cidco), the state government’s industrial township development arm, opened the financial bids for the project on Thursday. Bids for the project were called by Cidco early last year, Cidco’s general manager (special projects and IT) DLN Murty. Cidco, which has developed Navi Mumbai, will hold 26% in the SPV in the form of land and other administrative clearances. The winning consortium outbid Indiabulls at Rs 1,050 crore and Hyderabad based GVK Group at Rs 808 crore. The transaction was confirmed by officials from a property consultant familiar with the matter. An official of one of the losing bidders also confirmed the details. The theme park is intended to be a first-of-its-kind amusement, fun, and knowledge city in India, which is expected to trigger huge investments in the film and entertainment sectors. The first phase of the theme park will have to be ready by 2013 and the entire theme park will be ready by 2016, Cidco officials said. The plot will be used to develop an entertainment theme park called Bollywood Hill City, on the lines of a similar project in Hollywood. The project will have an eco-park, a large amusement park, five-star hotel, studios and multiplex. The first phase of the project, comprising 100 acres, is to be completed by 2013.

Haware Builders has launched a project.
A project with 525 apartments situated in Navi Mumbai’s Kalamboli with 325 sq ft each. These come at a price of 5.25 lakh.

Projects broached by Government….
India: Metro rail project in Navi Mu Mumbai.
Projects reported that Navi Mumbai Municipal Corporation has submitted proposals for metro rail and monorail projects to Mumbai Metropolitan Region Development Authority. Authority The proposal has been drafted by the NMMC in consultation with Maharashtra government s infrastructure arm City and Industrial Development Corporation NMMC has proposed metro rail corridors between Mankhurd in Greater Mumbai and Panvel near Navi Mumbai which mainly proposes to connect the island city with the new airport. NMMC is of the view that, the metro rail and monorail projects are highly required for the city as there are two SEZs are coming up in and around Navi Mumbai. Also, the upcoming proposed international airport near Kalamboli, and the central business district in Belapur which houses government as well as corporate houses. The proposed projects will give a vernment boost to the transportation facility and ease the traffic.

Major Project by CIDCO
Navi Mumbai Urban Haat Urban Haat is an everever permanent fair for Crafts, Food and Cultural Activities. Activit The craftsmen from various areas and the cultural happenings provide a panoramic view of richness and diversity of handicrafts and artifacts.

The project is a part of Government of India’s policy to set up permanent marketing infrastructure at prime locations in the country to eliminate middle agencies. Urban Haat project confirms the prescribed policy details. Development Commissioner (Handlooms) and Development Commissioner (Handicrafts) are the coordinators and Development Commissioner (Handicrafts) is the nodal agency for implementation. For Maharashtra State, Maharashtra Small Scale Industries Development Commission (MSSIDC) is the nodal agency for co-ordination. This project is funded directly by Government of India, Ministry of Textiles to the tune of 70% of the estimated cost. Remaining 30% or the actual expenditure has to be borne by the implementing agency. Selection of site in Navi Mumbai Analyzing and understanding the concept of Urban Haat which is functioning in New Delhi and Kolkatta, it is felt that Navi Mumbai is the right place for establishing an Urban Haat. Out of the various townships constituting Navi Mumbai, Belapur is located at the centre. Spread over an area of around 600 Ha, it is a part of Central Business District of Navi Mumbai. The township proves to be the best location of Urban Haat for numerous reasons. A self-sustained township with adequate physical and social infrastructure in place, most of the residential area is developed Excellent connectivity by rail, road and waterway. The Sion–Panvel expressway runs through the township. Major institutions like RBI, TIFR, CCI, CGO Complex, IDBI, UTI, SBI, Central Bank of India and Regional Offices of State Government are functioning. Residential complexes for major PSUs like ONGC, GAIL, IDBI, Income-tax etc. are developed. The site for Urban Haat is unique and interesting as well. The location is abutting the forecourt area of Belapur railway station, which carries hundreds of commuters every day. Along the pedestrian link from Belapur Railway Station to Office complexes used by hundreds of people. The surrounding commercial area spreads over 136 hectares, with estimated number of jobs of more than 50000. Close proximity to Sion-Panvel Expressway and Belapur hover port station. Spread across 4.8 hectares. Undulating terrain with hill at the center and slope towards surrounding roads. Abundant fully grown trees existing. Panoramic view from the site.

Design of Haat Treatment of such a unique site has to be unique. A consultant to design the Haat to suit the prescribed guidelines of Government of India’s policy was necessary. Accordingly, M/s Vector Designs were identified as Consultant. Their proposal not only confirms to the prescribed guidelines but also does full justice to the land earmarked for Urban Haat. Salient features of the proposal • Low profile design, in harmony with surrounding. • Built up area maximum to the extent of 10% of the plot area. • Creation of garden around the Haat. • Stalls to reflect the local construction culture. • The complex shall also have tensile structures for cultural programmes, performing arts, exhibitions etc. • The entire area shall be exclusively landscaped to provide a conducive environment for recreation and leisure. • Use of non-conventional energy. • Rain water harvesting. Urban Haat aims to be a place to choose and eat from a variety of food stuff available from across the country, a place for craftsmen, artists, performers to exhibit their skills and for visitors it is a place to relax and enjoy. The formalities for the commencement of work are almost over and soon the implementation work of Navi Mumbai urban Haat shall begin. Government of India, under Ministry of Textiles has a policy for setting up of Urban Haats in the country. Such projects, which are fulfilling the criteria laid down by the Government, are financed partially. A high level screening committee examines such proposals received for financial grant and take decisions about the financial grant. CIDCO had also sought such financial grant for Navi Mumbai Urban Haat project. Status of the Project • • • A high level screening committee meeting was held on September 24, 2007 at the office of DC(Handlooms). In the above referred meeting, the project of ‘Navi Mumbai Urban Haat’ is approved in principle for financial grant of Rs. 2.1 crores. Foundation laying ceremony at the hands of Hon. Vice Chairman and Managing Director CIDCO, Mr. G. S. Gill was held on 3rd December 2007. The First Installment of Rs. 52.5 Lacs is received from DC (Handicraft) Ministry of Textile, Government of India in March 2008

• • •

Work for construction of compound wall and storm water drains amounting to Rs. r 25.85 lacs is awarded to M/s. C.P. Thakur and M/s. V.B. Bhoir Construction Co. Work of development of road and parking area is under award for Rs. 51.94 lacs to M/s. K.D. & Co. The total estimated project cost is 470 lacs. otal

"Latest Position of Urban Haat Project"

.

Vashi Bridge

'Government funding will dip as magnitude of projects rises'
The engineering field is not perceived to be glamorous unlike IT or entertainment. However, "Indian engineering skills compare with the best around the world and I foresee a lot of opportunities in this sector," says A.K. Chatterjee, Managing Director of Gilcon Project Services. Drawing on his 40 years Managing experience in the field, Chatterjee speaks to Project Monitor on the enveloping scenario and the changing changi environment. Looking ahead the projects scenario is quite encouraging. We have the best engineering skills and our he engineers can do very well with a little encouragement from the statutory authorities. Our engineers have to be bold in their approach, like the engineers in information and technology. Design consultancy is a

knowledge-based business and thrives on innovation, change and growth. More than anything else we have to change our mindset and group together wherever necessary. Indigenous contractors from countries like Singapore once faced the threat of being totally overshadowed by companies from Japan. It was only by adopting the consortia approach that they were able to effectively competing with the companies. In India also we have to think on the same lines. Clients' needs are changing and we have to expand our role from being just a project executor. We have to recommend, design, consult and also advise our clients. Then and now The project environment has become very dynamic these days. Forty years ago opportunities were less. There was not so much exposure to new technology. In the 1960's and 1970's, working for Gammon India, we had to pioneer and adopt various techniques. In bridges, for instance, there were no cantilever bridges in India. The technology was there in England and France. Indian engineers introduced it in Assam when they built the Barak Bridge Extension. Following this Gammon constructed a lot of other bridges, including the one at Patna, Buxar and Bassein. Design and construction of these bridges brought great satisfaction. At that time we also did not have any exposure to piling and other modern techniques like piling, foundations etc. Currently, flyovers are constructed in 10 to 12 months with the latest techniques. Earlier time was not a major constraint.

New Government Initiatives to Boost Real Estate Sector in India
At the Government level many new policy initiatives have been taken recently to boost the real estate sector in India. These policy decisions will lend a stimulus (motivate) and impetus (drive) to the industry. It is beyond doubt that the new initiatives will unlock the potential of the sector. Also, along with the stimulus package announced by the Government, the Reserve Bank of India (RBI) has taken a definitive step whereby banks are allowed to devise (set up) new schemes beneficial to the property sector. As part of the Government initiatives to boost real estate boom sector India, RBI has declared concessional schemes for the real estate sector. Such initiatives include: • Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed (cancelled officially) by increasingly larger number of states. • In case of integrated townships, the minimum area to be developed has been brought down to 25 acres from 100 acres. • 51 per cent FDI allowed in single-brand retail outlets and 100 per cent in cash-and-carry through the automatic route.

• Full repatriation (The act of returning to the country of origin) of original investment after three years. • Minimum capital investment for wholly-owned subsidiaries and joint ventures stands at US$ 10 million and US$ 5 million, respectively. • 100 per cent FDI allowed in realty projects through the automatic route. Further, in its endeavour (make an effort) to initiate new policies to boost the real estate sector in India, the Ministry of Commerce and Industry, Government of India, has taken steps to reduce the time taken to develop special economic zones (SEZs) by simplifying the procedures to get the tax-tree industrial enclaves (territories) notified. Now developers can easily get their land classified as an SEZ at the outset itself by producing title deeds (action) to prove their ownership. Again, the Government has announced several concessions in the Budget 2008-2009. New Government initiatives to boost sector of Real Estate India include granting a tax holiday on profits from initiates in the financial year 2007-2008. In order to enjoy this benefit, the housing projects should be of the affordable housing unit type of 1000 to 1500 square feet. Another condition is that such projects should be completed by March 1, 2012. Further, the Finance Ministry has allocated US$ 207 million to grant 1% interest subsidy on home loans up to US$ 20, 691. In order to avail this benefit, the cost of the home should not be above US$41, 382. It is believed that these initiatives will be add further impetus to the real estate sector in the country.

Road Ahead According to the Confederation of Real Estate Developers' Associations of India (CREDAI), the affordable housing segment is set to play an important role in India's real estate sector in 2010 on the back of an uptick in demand. Moreover, 2010 is expected to be a positive year for the real estate sector. The revival is expected to be driven by infrastructure growth, which, in turn, can accelerate real estate activities both in the residential as well as commercial spaces.

Government in India wants to attract t more foreign real estate investors….. investors

The government in India wants to make it easier for foreign property investors and in particular for them to put their money into projects that relate to the hospitality sector and tourism. It is looking at changing the rules to allow overseas investors to be part of smaller real estate projects. At present they are limited to investing in projects that cover a minimum of 25 acres. It is hoped it will encourage foreign investment in property developments in places like Mumbai, Delhi, Bangalore, Chennai and Hyderabad where it is generally not possible to find 25 acres of land for development. The Department of Industrial Policy & Promotion (DIPP), which sets out the guidelines for direct foreign is keen on attracting more investors. It is proposing to waive minimum capitalization for development projects which have hospitality and tourism facilities such as faci hotels, restaurants or entertainment facilities for visitors. The waiver would also be available if 50% of the built-up area in a project is devoted to built up hotel and tourism businesses, such as food courts, resorts and restaurants and if 20% of the total built-up area is used for hotel rooms. up The property industry welcomed the initiative and said they are long overdue. These steps, when implemented, will provide relief to high value projects in cities and projects being high-value developed for the tourism sector. The move comes as a relief at a time when the real estate industry is struggling with high levels of debts, strict lending conditions and a general slowdown in business.

Meanwhile there are signs that the hard hit commercial property sector is on the cusp of t recovery. Values have fallen by up to 30% as many corporates have downsized and are not enthusiastic about paying high rents.

RBI Increases Loans on Realty n

The Reserve Bank of India has asked banks to set aside more pelf for loans to realty projects which may eventually make borrowing more costly for builders. An increase in capital requirement will force banks to hike the rate of interest on such loans. SA Bhat, chairman and managing director of Indian Overseas Bank gave his perception saying “If RBI does not raise cash reserve ratio and keep signalling rates undisturbed, my feeling is that it may strictly st check the prudential norms. A hike in risk weight, particularly on real estate loans, is not ruled out.” According to the latest available data, banks exposure to commercial real estate is approximately Rs 88,581 cr. The money that is kept aside to calculate adequacy ratio is called the Risk Weight which is 9% for all banks. Banks have to set aside less capital for borrowers with higher credit rating. For a triple A clients, the risk weight is 20%, which means banks have set aside Rs 1.80 of its own capital for every Rs 100 loan to such borrowers. The risk weight for realty sector companies is 100 that is Rs 9 have to be kept aside for ealty 100% every Rs 100 loan to builders. This may increase to 125 percent or even 150 percent in the policy that are yet to come. To help builders and banks cope with the crises, RBI had me. lowered it to 100% from 150% during the decline. As said by Hemindra Hazari, head of research Karvy Stock Broking said “Government and banks released real estate companies by financing them. Prices did not come off Prices significantly because the growth in the realty sector was higher than the overall credit

growth. Revival in the sector has landed in hike in the realty prices and now RBI may need to make an effort to lower down prices.”

Government Sops (offerings) can Revive (refresh) Real Estate Sector
Eyeing fresh signs of a revival in the economy, which should nudge (push) growth back to 9% level by end-2010, finance minister Pranab Mukherjee announced fresh tax giveaways for housing and renewed the government’s commitment to more economic reforms and introduction of a single goods and services tax (GST) by 1 April. The move, expected to further boost housing demand in the economy especially in tier II cities, also seeks to quell (control) growing criticism that the Congress-led United Progressive Alliance (UPA) is averse to second-generation reforms. Replying to the debate on the Finance Bill, which was approved by a voice vote by the Lok Sabha, Mukherjee renewed his efforts to strike political consensus on key areas of tax reform, including the introduction of a direct tax code. The reply also calibrated a few of his 6 July Budget tax proposals, which are not expected to result in big revenue giveaways, thereby precluding the possibility of a marked increase in the Rs4 trillion fiscal deficit forecast for 2009-10. The stand out feature of Mukherjee’s calibration of tax proposals in the Finance Bill was the emphasis on boosting real estate through both budgetary support and tax changes. The budgetary support in the form of a 1% subsidy on the interest rates paid by people with a home loan of up to Rs10 lakh would cost the exchequer Rs1,000 crore in the current fiscal year, Mukherjee said. Under Section 80 IB (10), income-tax deduction was given to real estate developers for housing projects approved before 31 March 2007. This has now been extended to projects approved between 1 April 2007 and 31 March 2008, provided these projects are completed on or before 31 March 2012. “We have been asking for an extension for a long time and I am happy that this step has been taken,” said Kumar Gera, chairman of the Confederation of Real Estate Developers’ Association of India. “The extension will benefit only those projects that were approved during this period, so it may not have an impact on all housing projects in all markets. It could have an impact on certain micro markets.” Among other key tax changes was the removal of service tax charged by contractors repairing and maintaining roads, and extending tax benefits given in the Budget to firms producing natural gas under the new exploration licensing policy to those producing natural gas from coal-bed methane blocks. The finance minister admitted he had to ignore many other post-Budget representations, which came his way, as the tax proposals had to mesh with the broad strategy of providing fiscal stimulus. “We must generate internal demand,” he said. The spillover of the fiscal stimulus provided last fiscal year and proposals introduced in the 6 July Budget have cost the exchequer Rs2.4 trillion, Mukherjee said. The fiscal deficit (extent of borrowings needed to bridge the gap between expenditure and revenue) is estimated to touch 6.8% of the gross domestic product in 2009-10.The Budget estimates of the Centre’s net tax revenue in 2009-10 is Rs4.74 trillion, an increase of 0.19% over the previous year’s revised estimate. Economic

growth, which received top priority in the Budget’s overall strategy, is showing signs of recovery.

Contractors shift from realty to government projects
Contractors such as Ahluwalia Contracts, Simplex Infrastructure, Unity Infrastructure and BL Kashyap are increasingly shifting their focus to government-funded infra projects such as metro stations, airports, roads in the face of slowdown in real estate causing delays in payments from property developers. The companies, which had 18-75 per cent of their order books in property development, say they are facing payment delays of 20-90 days from some of the private developers, blocking their working capital requirements.

Current trend in Realty Companies…..
Moreover companies are opting for government projects because government projects are more secure in terms of payment schedules. That is the reason why most of companies are now shifting our focus to government projects. Companies are either taking small government projects alone or bidding for larger ones with consortium partners. Ahluwalia is currently building Ranchi Airport, Rohtak Technical Institute, Delhi University campus (Rajiv Gandhi House) among others, while Kashyap is bidding for the Bangalore Metro project with a partner. Property developers are stalling their projects as demand for homes and office space slows down in the country due to poor corporate and buyer interest in the current economic slowdown. This has hit contractors, such as Ahluwalia, which construct buildings for realty companies.

In conclusion I want to say.....
Financial meltdown and economic crisis of 2008 affected the real estate markets worldwide, which witnessed steep decline in prices/ property value and strained liquidity/ credit positions. India, despite its strong fundamentals, was also not intact of the global crisis, which resulted in significant downturn in the Indian real estate sector. Indian real estate sector also saw a reversal of sorts with the declining affordability of the end users and reducing funding options for the developers. However, starting mid 2009, time has been eventful for the Indian real estate sector. Government started new initiatives on the fiscal and regulatory front, which have been catapulted with price corrections, softening of interest rates, launch of affordable housing and improved liquidity. Sighting the significance that the real estate sector plays for the Indian economy, Budget 2010 is well placed in time to deal with the challenges still being faced by the sector and to adequately incentivise the sector in view of the changed

economic environment. For the past few years, one of the thrust (push) areas of the Government in this sector has been to meet the housing requirements of the society to meet the objectives of 'shelter for all'. Further revival (recovery) in the Indian real estate sector is also steered by the affordable housing segment. Considering the same, re-introducing tax benefits for development of such segment of houses will provide requisite boast to the real estate developers/ investors to pursue such projects and to pass tax synergies to the customers.

Dhiren Vyas, • dhiren_vyas777@yahoo.com • vyas.dhiren151@gmail.com

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