Assured Returns Properties in NCR - Gurgaon - Noida - Indian Real Estate Forum

bamalboy · 13-03-10

Hi Everyone!

Is there any one who can throw some light on assured return properties in NCR. My doubts are....

1. What will happen if the property does not find any tenant? will the assured returns continue?
2. If the property goes on rent say for 9 years, then what after 9 years?

Thanks in advance.

abhi · 17-03-10

I had made this post

Spaze Towers Pvt. Ltd - Gurgaon, NCR, How Sound?

These guys also offering a similar option. ASSURED RETURNS.!

If you have money to speculate, then go for it. But I have decided to give it a miss.

a) I wanted to see a structure (none yet).
b) Who the FXXX is going to be the tenant?
c) Is it going to be easy to sell the property?
d) How solid would be the documentation?
e) What if the PDC"s bounce? Or are late or else? Who is going to keep track of it? And then deposit them? Why can't these builder deposit them in a nominated account automatically and sign a declaration (like we do EMI's for a car or loan).

I HAVE DECIDE TO STAY AWAY MY FRIEND.

bamalboy · 20-03-10

hi abhi

thanks a lot for the reply.

but few of the answers could have been better coined.

in depth knowledge about a subject gives us a positive attitude and that helps. a measured risk is the name of the game.

regards

Indianil · 23-03-10

hi !

1. your questions are a little vague.
2. the developer will pay till the assured tenure.
3. and your 2nd question i.e. after 9 yrs...do baten ho sakti he ..... either lease term will renew or tenant will vacate the place..
4. In nutshell, there is no universal law to this ...
5. better post specific questions, so that some 1 can advice well.

cayogeshgupta · 03-04-10

In assured return scenario, there is only one thing is which is certain that investor in property is going to pay for his/ her mistake.

Lets take the case of assured return, which now a days developer's are advertising. It can happen only when you have the location, which is generating that kind of footfall which will entice all marketers, shop owners and office admin to that site/ property (assuming it's an commercial property only). Depending upon the location, the developer will invite the anchor tenant for long term lease at very concessional rates such as Big Bazar or for that matter any known brand, which in turn take huge space on rent regularly for their operations in that particular area/ location. Now by piggybacking on that, developer will try to secure the tenants for the rest of property.

It's the basically finding anchor tenant and then try to find out the mean rent and assure the same to investors.

However, in this kind of deals, please check the integrity of the promoters of that commercial unit. If they happen to be person, who in the past have defaulted in their promises, than in future also, they will.

And by looking into the history of real estate developer in India, one can take an informed judgement of staying away from this kind of stupid so called structured deals.

abhi · 07-04-10

Agree. So how does one take the plunge? Builder Reputation is important I guess. Who would believe in some new time builder?

How easy would be the way out if the PDC cheques's start bouncing? Or you loose cheques in the mail? If the builder seems so confident, why wouldn't he simply agree to direct deposit (Assured Return) in a designated account?

Who would like to take the hassle of waiting for cheques to keep arriving in regular post?

Trojon · 08-04-10

Quote:

Originally Posted by nirkit

As you know real estate has lots of money in it,so assured return is not a big deal.Those developers who are going to give you assured return are pooling your money which in other case had to take from other source like bank and NBFC etc and end up giving high interest and at the end they will have to sell the project in the market itself,so pooling money from the market through assured return plan and pre selling it.

There is certainly a lot of money floating in RE but its unidirectional...towards buider's pocket

Builder can't really cheat banks after raising money from them as Banks are huge entities and builder cannot survive by duping them.

Howvere, they can dupe layman and Mango people and no-one would give a damn about it

BTW go for FDs of private players if you want fixed returns like Lnt NCD or any other scheme giving about 10-12% returns.

abhi · 08-04-10

Developers Lure Real-Estate Buyers With `Assured' Returns

Real-estate prices are rapidly going up all across the country, but sales of commercial properties are still recovering from the slowdown of the past year. Developers in Delhi are now trying every trick in the book to lure commercial real-estate buyers.

Thanks to the sky-high prices, commercial properties are facing a tough time in attracting investments across the country. Neither the banks nor high net-worth investors are ready to invest in under-construction commercial properties. Developers in Delhi have found a new way to raise funds for commercial properties. Since they have to pay a minimum interest rate of 17%-18% to banks if they have to borrow for developmental activities--and provide collateral--developers seem to have pounced upon a new opportunity. They are promising 12% `assured' returns if an investor is ready to pay down-payment for a property--which sometimes exists only on paper.

"Banks are not ready to give loans for (construction of) commercial properties, as there is an over-supply of such properties. If at all some banks agree to grant a loan for such properties, they charge the developer 18%-19% interest rate--plus the developer has to keep something with the banks as security. On the other hand, retail consumers are giving upfront down-payment seeing such mouth-watering returns (12%). Consumers pay this money without any security. Such investments are unsecured investments," said Pankaj Kapoor, founder, Liases Foares, a real-estate consultancy firm.

Most of these properties for which the potential buyer is being offered an `assured' return are located along the various national highways in northern India, near urban settlements. These types of schemes are being offered by many developers like MVL Ltd, ARN Infrastructure and Piyush Group. These developers are offering commercial spaces in under-construction properties (of a minimum of 100 square feet). In a few cases, the construction has still not started. Investors are supposed to pay a down payment (which can start from a minimum of Rs11 lakh, and which varies according to the size/location of the property) for such commercial properties. They are offered 12% annual returns for a specific period (two years, three years or more).

Moneylife contacted a few places to check out these offers. AMR Infrastructure India (P) Ltd is constructing a technology park, `Kessel I Valley', in Greater Noida, spread over 25 acres. The company is offering 12% assured returns for three years for retail investors who are ready to make a down payment of around Rs17,57,500 for 500 square feet (the property is valued at Rs3,700 per sq ft)--which is 95% of the base price.

13-03-10	#1
bamalboy New Member Join Date: Mar 2010 Posts: 2 Thanks: 0 Thanked 0 Times in 0 Posts Rep Power: 0	Assured Returns Properties in NCR - Gurgaon - Noida Hi Everyone! Is there any one who can throw some light on assured return properties in NCR. My doubts are.... 1. What will happen if the property does not find any tenant? will the assured returns continue? 2. If the property goes on rent say for 9 years, then what after 9 years? Thanks in advance.

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17-03-10	#2
abhi Member Join Date: Oct 2008 Posts: 144 My Mood: Thanks: 0 Thanked 2 Times in 2 Posts Rep Power: 1	I had made this post Spaze Towers Pvt. Ltd - Gurgaon, NCR, How Sound? These guys also offering a similar option. ASSURED RETURNS.! If you have money to speculate, then go for it. But I have decided to give it a miss. a) I wanted to see a structure (none yet). b) Who the FXXX is going to be the tenant? c) Is it going to be easy to sell the property? d) How solid would be the documentation? e) What if the PDC"s bounce? Or are late or else? Who is going to keep track of it? And then deposit them? Why can't these builder deposit them in a nominated account automatically and sign a declaration (like we do EMI's for a car or loan). I HAVE DECIDE TO STAY AWAY MY FRIEND.

20-03-10	#3
bamalboy New Member Join Date: Mar 2010 Posts: 2 Thanks: 0 Thanked 0 Times in 0 Posts Rep Power: 0	hi abhi thanks a lot for the reply. but few of the answers could have been better coined. in depth knowledge about a subject gives us a positive attitude and that helps. a measured risk is the name of the game. regards

23-03-10	#4
Indianil New Member Join Date: Dec 2008 Posts: 29 Thanks: 0 Thanked 0 Times in 0 Posts Rep Power: 1	hi ! 1. your questions are a little vague. 2. the developer will pay till the assured tenure. 3. and your 2nd question i.e. after 9 yrs...do baten ho sakti he ..... either lease term will renew or tenant will vacate the place.. 4. In nutshell, there is no universal law to this ... 5. better post specific questions, so that some 1 can advice well.

03-04-10	#5
cayogeshgupta New Member Join Date: Jun 2008 Posts: 15 Thanks: 0 Thanked 0 Times in 0 Posts Rep Power: 1	In assured return scenario, there is only one thing is which is certain that investor in property is going to pay for his/ her mistake. Lets take the case of assured return, which now a days developer's are advertising. It can happen only when you have the location, which is generating that kind of footfall which will entice all marketers, shop owners and office admin to that site/ property (assuming it's an commercial property only). Depending upon the location, the developer will invite the anchor tenant for long term lease at very concessional rates such as Big Bazar or for that matter any known brand, which in turn take huge space on rent regularly for their operations in that particular area/ location. Now by piggybacking on that, developer will try to secure the tenants for the rest of property. It's the basically finding anchor tenant and then try to find out the mean rent and assure the same to investors. However, in this kind of deals, please check the integrity of the promoters of that commercial unit. If they happen to be person, who in the past have defaulted in their promises, than in future also, they will. And by looking into the history of real estate developer in India, one can take an informed judgement of staying away from this kind of stupid so called structured deals.

07-04-10	#6
abhi Member Join Date: Oct 2008 Posts: 144 My Mood: Thanks: 0 Thanked 2 Times in 2 Posts Rep Power: 1	Agree. So how does one take the plunge? Builder Reputation is important I guess. Who would believe in some new time builder? How easy would be the way out if the PDC cheques's start bouncing? Or you loose cheques in the mail? If the builder seems so confident, why wouldn't he simply agree to direct deposit (Assured Return) in a designated account? Who would like to take the hassle of waiting for cheques to keep arriving in regular post?

08-04-10	#8
abhi Member Join Date: Oct 2008 Posts: 144 My Mood: Thanks: 0 Thanked 2 Times in 2 Posts Rep Power: 1	Developers Lure Real-Estate Buyers With `Assured' Returns Real-estate prices are rapidly going up all across the country, but sales of commercial properties are still recovering from the slowdown of the past year. Developers in Delhi are now trying every trick in the book to lure commercial real-estate buyers. Thanks to the sky-high prices, commercial properties are facing a tough time in attracting investments across the country. Neither the banks nor high net-worth investors are ready to invest in under-construction commercial properties. Developers in Delhi have found a new way to raise funds for commercial properties. Since they have to pay a minimum interest rate of 17%-18% to banks if they have to borrow for developmental activities--and provide collateral--developers seem to have pounced upon a new opportunity. They are promising 12% `assured' returns if an investor is ready to pay down-payment for a property--which sometimes exists only on paper. "Banks are not ready to give loans for (construction of) commercial properties, as there is an over-supply of such properties. If at all some banks agree to grant a loan for such properties, they charge the developer 18%-19% interest rate--plus the developer has to keep something with the banks as security. On the other hand, retail consumers are giving upfront down-payment seeing such mouth-watering returns (12%). Consumers pay this money without any security. Such investments are unsecured investments," said Pankaj Kapoor, founder, Liases Foares, a real-estate consultancy firm. Most of these properties for which the potential buyer is being offered an `assured' return are located along the various national highways in northern India, near urban settlements. These types of schemes are being offered by many developers like MVL Ltd, ARN Infrastructure and Piyush Group. These developers are offering commercial spaces in under-construction properties (of a minimum of 100 square feet). In a few cases, the construction has still not started. Investors are supposed to pay a down payment (which can start from a minimum of Rs11 lakh, and which varies according to the size/location of the property) for such commercial properties. They are offered 12% annual returns for a specific period (two years, three years or more). Moneylife contacted a few places to check out these offers. AMR Infrastructure India (P) Ltd is constructing a technology park, `Kessel I Valley', in Greater Noida, spread over 25 acres. The company is offering 12% assured returns for three years for retail investors who are ready to make a down payment of around Rs17,57,500 for 500 square feet (the property is valued at Rs3,700 per sq ft)--which is 95% of the base price.