|February 4 2012, 12:56 AM||#1661|
IndiaHomes to invest $10 mn, plans to acquire IT firm
Friday, February 03, 2012
New Delhi: Real estate brokerage firm IndiaHomes today said it will invest USD 10 million over the next one year to foray into new areas and is scouting for an acquisition in the IT space to boost online transactions.
The company, formerly known as Agni Property, today announced that it has re-branded itself as IndiaHomes. It said it is also planning to ramp up its headcount by over 65 per cent to 500 people in the next financial year.
"Seeing the demand from the consumers, we are expanding very aggressively in India as our company is the first professionally managed realty brokerage firm. We are now investing an additional USD 10 million to foray into new areas," IndiaHomes Managing Director Samarjit Singh told reporters here.
Two private equity firms -- Helion Venture Capital and Foundation Capital -- which are the promoters along with Singh, have have already put in USD 4 million and the rest will come in during the next one year, he added.
This USD 10 million investment will be in addition to the USD 12 million that the firm has put in since starting its operations in 2009, he said.
Elaborating on its expansion plans, Singh said: "We are present in the NCR, Mumbai, Bangalore and Kolkata. Besides further strengthening in these locations, we will start our operations in Pune, Ahmedabad, Chennai and Hyderabad soon."
The company will hike its staff strength to about 500 people next fiscal from the current 300 employees, he said.
When asked if the company would acquire local brokerage firms to further expand its reach, Singh said: "The small brokerage houses lack in professionalism and value. However, we are looking at acquiring a technology firm to offer a better online experience to our customers."
Without sharing details, he said IndiaHomes was exploring possibilities to acquire a Mumbai-based IT firm and "within the next 6-9 months, it will be clear whether we will develop our softwares in-house or acquire some company".
IndiaHomes today launched a new property pricing software -- Goldmine -- which will take into account factors like luxury, market demand, availability and positioning of the flat.
Talking about revenues, Singh said: "This fiscal, we are expecting to generate Rs 25 crore from fees from dealing properties worth Rs 1,000 crore. For next fiscal, our target is to transact Rs 3,500 crore worth of properties and earn a net transaction fee of Rs 100 crore."
Meanwhile, the company today announced the appointment of Bhaskar Bagchi as Chief Operating Officer, Ashwinder Raj Singh as Vice-President (Sales) and Deepak Goel as Chief Product Officer.
IndiaHomes to invest $10 mn, plans to acquire IT firm
|February 4 2012, 01:32 AM||#1662|
Tulips project to come up in Coimbatore
By D Govardan Feb 01 2012
Strategically located on Hindustan College Road, off Avinashi Road offering 80 flats, the project is likely to get completed in a year
Pune-based Vascon Engineers, a leading premier property developer, has joined hands with Coimbatore-based Pricol Properties, the real estate arm of the Pricol Group, to launch a high-end luxury residential project, Tulips. The project will be developed as an upscale neighbourhood and will offer well-ventilated two BHK, three BHK and four BHK apartments in sizes ranging between 1,300 sq ft and 2,250 sq ft.
The project is strategically located on Hindustan College Road, off Avinashi Road and the consturction is expected get completed in a year. The project offers 80 flats with the launch price of Rs 5,000 per sq ft.
The amenities of the project includes landscaped gardens, earthquake resistant structure with an architectural design and it is vaasthu compliant. The project is well connected with hospitals, schools, colleges, malls, officers, railway station, airport and the central bus station.
It has all the facilities one looks for in a premium apartment project including a decorative entrance lobby, swimming pool, club house, fully equipped gym, games room, children play area, multi-purpose hall, coffee lounge, solar water heater, reticulated gas supply for kitchen, power backup, passenger elevators and sewage treatment plant.
“Tulips is a first of its kind project in Coimbatore and it is planned for the perfect lifestyle in a city. Our aim is to challenge the face of real estate in this part of the region by providing royal living through luxury and quality execution, while keeping the customer’s needs in focus,” said R Vasudevan, managing director of Vascon Engineers in a statement. zz
Tulips project to come up in Coimbatore | mydigitalfc.com
|February 4 2012, 01:36 AM||#1663|
By Kumar Shankar Roy Feb 01 2012 , New Delhi
Tags: Home Improvement
On one hand there are locks, lighting, doors, windows and alarms that could keep your place safe from outside influences. On the other, little ingenuities such as covered socket or child proof wardrobes can keep your home truly safe for your loved ones
You might have taken home insurance to protect the place you call your own, but insurance does not guarantee safety. Experts point out different aspects such as glass, wires and lighting can be crucial areas that need as much tending to as other things.
Mukul Goyal, product designer and director of Mukul Goyal and Tattva Art Hardware believes locks, lighting, doors, windows and alarms are some of the most important aspects that should be taken care of, if one were to call his/her home 'safe.' “No lock, regardless of its quality, can be truly effective. Key-in dead bolt locks provide minimum security. Ask a locksmith for advice on your situation. Change locks immediately if your keys are lost or stolen. When moving into a new home, have all locks changed,” says Goyal.
When it comes to the safety of the periphery of your house, here are a few things you should keep in mind. One, have adequate exterior lighting. Two, a motion-sensitive lighting is recommended for backyards. Three, keep the perimetre of your home well-lit. Four, install low voltage outdoor lighting, which is a cost-effective way to discourage intruders.
But equally important are doors and windows. Says Goyal: “Make sure your door hinges are on the inside. Secure sliding glass doors. Place a metal rod or piece of plywood in the track and install vertical bolts. These will help prevent burglars from forcing the door open or lifting it off the track. Always lock the door of an attached garage. Don't rely on your automatic garage door opener for security. Most windows can be pinned for security. Drill a hole on a slight downward slant through the inside window frame and halfway into the outside frame — place a nail in the hole to secure the window."
Wiring is an essential area that is often neglected. Altho-ugh it is known wiring is important for the safety of the house, at times this aspect is merely ‘brushed under a carpet’ even while we pay considerable time choosing that perfect accessories and attractive switches.
Anil Gupta, chairman and managing director of KEI Industries says: “As most wiring is concealed beyond the walls they are ignored until there is a mishap. But ensuring quality wiring during construction is of utmost importance.” Gupta points out that, home or office, one needs to be extra careful while selecting appropriate wires. “With the increasing awareness about them, even companies are making conscious efforts to introduce products that are efficient, offering greater functionality as well as ensuring safety with guarantee.” For instance, KEI Industries has forayed into house wire segment with a launch of multi-strand flexible house wires with fire-resistant properties.
Glass windows could add to the charms of your home but they could be an unsafe option as well: Unless you choose extra safe glasses for windows. Asahi Glass India (AIS), for instance, has a special glass product — what it terms ‘burglar resistant glass’ — called AIS Securityglas. This laminated glass has specialised plastic inter layers to provide high level of intrusion resistance from burglar attacks. You don’t have to install grills or shutters alongside.
According to Aditya Bhutani, chief operating officer of Glasxperts (AIS), while choosing glass for windows, which, for one, allows maximum daylight into houses, one should not compromise on safety. One should remember that the technology has advanced so well that people, if they explore the choices, could find safer options that also put an end to feeling caged in their own homes.
“There are many types of security: Earthquake-resistant, bullet-resistant, bomb blast-resistant, fire-resistant, to name a few. Various combinations and types of interlayers and glasses produce different effects. Sev-eral layers of glass and vinyl (PVB) combined together offer greater protection. The thickness of the glass deter-mines the security of the laminated unit. In case of breakage, this glass creates a soft web like structure and glass fragments sticks to PVB interlayer and the chances of injury is low.”
Safe house | mydigitalfc.com
|February 4 2012, 01:40 AM||#1664|
By B Krishna Mohan Feb 01 2012
Tags: Real Estate
Builders are going for high-rise structures as it allows them to set aside land for amenities and landscaping
In Mumbai, ogling at a skyscraper and counting the number of floors with glee is still a popular game played by spellbound visitors. The city, the mecca of real estate in India, is undergoing a massive construction boom, with hundreds of skyscrapers all set to pop up. Residential towers in the city are rising beyond a whopping 100 floors and have continued their eternal search for clouds. But living in towers is nothing new to the city.
Other Indian cities are following the footsteps of Mumbai and growing vertical, with 25- to 50-storeyed residential towers. Cities such as Hyderabad, Bangalore, Chennai and Kolkata have several residential skyscrapers now doting their skyline. It is a new fad that is spreading far and wide in these cities.
Far away from the cacophony on the ground, living in the company of clouds and solitude is increasingly a craze among city dwellers, and they do not mind shelling out a premium.
“For many, staying in high-rises is an aspiration,” says Malik C, general manager (sales) of Ramky Estates, who is overseeing a tower project in Gachibowli, off Hyderabad. Ramky, like many other builders, charges an additional Rs 50 per square feet for every floor rise. Yes, that is the price you pay to stay away from the ground commotion, and beat pollution, and live rich in sunlight and cross-ventilation.
Not long ago, the Babu Khan Estate at Basheerbagh in Hyderabad was the lone high-rise building. As of now, several high-rise projects are in various stages of construction in the city. Aliens, Lodha, Lanco Hills, L&T, Saket and Manjeera, among others, are coming up with big projects in the city periphery.
Gone are the days when Kolkata had a handful of high-rises. Skyscrapers all over the city are now changing Kolkata’s skyline too. It all started with developers – including some of the leading ones like Bengal Ambuja Housing (Ambuja Realty, now), Bengal Peerless, Hiland Park and a larger number of local developers — building towers on both sides of the long stretch of Eastern Metropolitan Bypass — from Ultadanga in northern part of the city to Garia in the south. The high-rises have also come up at various connectors to the EM Bypass, like Rashbehari connector, Prince Anwar Shah Connector and Park Circus Connector. And now, even the traditional residential areas within the city, including the posh Alipore area, Ballygunge area, Behala, Lake Gardens, Golf Green and Tollygunge are seeing increasing numbers of skyscrapers.
Leading developers such as Merlin, Bluechip, Bengal Peerless, Ambuja Realty, Bengal Shristi — are all venturing outside the city, and offering home buyers an experience of tower-living in tier-II cities like Durgapur, Asansol, Siliguri and even suburban towns like Serampore, Uttarpara and Sodepur, mostly on the banks of river Ganga.
According to Sanjay Chugh, founder of Chennai-based Skylines property advisory, property developers are promoting high-rises in OMR, Chennai’s IT Corridor, as well as Oragadam/Sriperumbudur. “The land parcels chosen for such projects have wider main roads abetting them and this facilitates the property developer to get a higher FSI to the availability of 80 or 100 feet roads abetting such land parcels,” says Chugh.
Olympia Opaline, True Value Homes’ Auranya Bay and Mantri Synergy, besides Hiranandani Upscale are a few of the high-rises that have come up on OMR, while Hirco Palace Garden has come up in the Oragadam/Sriperumbudur belt.
Even though one gets larger land parcels, the choice of whether to go vertical or horizontal always comes up before the property developer. These days, the preference is for going vertical, as the move allows one to set aside land for amenities and landscaping. This actually turns out to be a USP to promote the project to the prospective buyers, who demand more open space, having spent enough of their life inside city apartments. People also prefer the high-rises as it offers better view, better ventilation and better environment, with less pollution.
Nakshatra Roy, a Chennai-based industry veteran, says the obvious reason why high-rises tend to come up in suburban areas is because of the setback rules. “To fulfil them, one needs large parcels of land”. For instance, if one is developing a 100-metre tall tower, one needs 18-19 square metre of land, to be left vacant all around the building. “That kind of land is not available in the city,” says Roy.
Hence, inside the perimeter of ‘inner’ cities high-rises with 10-12 floors (or in certain cases, up to 20 floors) are common. “However, if a developer wants to include more number of floors, say 30, he needs a minimum of four to five acres of land, which one hardly gets inside city limits. While buyers will look for pollution free clean environment that higher floors offer, builders too make money by charging an additional floor rise fees,” he points out.
Sanjay Chugh agrees as well. “The basic driving force is the availability of larger land parcel in the suburban and peripheral areas than in the city or closer to it”.
From a developer’s point of view, the floor space index rules are favourable to go vertical. “There are no unreasonable restrictions on going vertical although there is emphasis on provision of proportionate parking and open space,” says Prem Kumar, president of Andhra Pradesh Real Estate Developers Association.
Aliens Space Station, a project of real estate developers Aliens Group at Tellapur, is an S-shaped project that is among the eco-friendly buildings in India. The Rs 1,000-crore project will have nearly 2,200 units in many towers. Each tower will have 30 floors and six apartments on each floor.
In a small city like Thrissur in Kerala, where building villas is still the norm, the skyscraper trend is spreading fast. “We have been extremely successful in positioning the high-rise buildings. People want to stay in apartments for security, maintenance and community living,” says P Ramakrishnan, deputy managing director of Sobha Developers’ who is developing Sobha City, an integrated city in 55 acre, with three 26-storeyed towers.
This has three high-rise projects Sobha Topaz, Sobha Sapphire and Sobha Jade, each with with 216 luxury apartments in three 26-storeyed towers. Topaz is completed and the properties are being handed over to the customers. Sapphire is done nearly 70 per cent and will take one more year for completion. It will launch Jade this June. Each of these has come up in 2.9-3.35 acres within the Sobha City, according to Ramakrishnan.
“We have been extremely successful in positioning the high-rise buildings. People want to stay in apartments for security, maintenance and community living,” he says. According to him, growing urbanisation and changing lifestyle preferences are the main reasons for people to look to high-rise buildings. About 50 per cent of them are NRIs, mostly from West Asia. “We can say almost all our customers have some connection with Thrissur,” he says, adding that in tier-II and tier-III cities, locals will dominate the customer profile.
In some cities, there are some location-specific reasons as well. The IT hub tag that Hyderabad has is one of the main triggers for the high-rise numbers in the city. Almost all the IT companies are located in Hitech City-Gachibowli corridor. This is the main reason for the surrounding areas seeing a boom in the real estate sector, prompting many builders to go vertical.
For most locals, location, proximity to work and schools and availability of social infrastructure are the key factors that are coming come into play while selecting a high-rise. Other amenities come as icing on the cake. zz
(With inputs from D Govardan in Chennai and Ritwik Mukherjee in Kolkata)
Vertical unlimited | mydigitalfc.com
|February 4 2012, 08:11 AM||#1665|
Reliance Industries, Indiabulls construction projects under scanner for green norms violation
Mumbai: The State Expert Appraisal Committee (SEAC) has picked on two major construction projects for carrying out work without obtaining environment clearance (EC).
The projects include the commercial tower-cum-parking lot that is being jointly developed by Reliance Industries and Wadhwa developers at Bandra-Kurla Complex (BKC) and the central library and residential project by Indiabulls group at Kalina. Noting that the developers in both cases have “initiated the construction work without obtaining the prior environmental clearance (EC)”, the SEAC has directed the state environment department to look in to the “violation and take necessary action”.
While officials were unwilling to be quoted due to the ongoing election code of conduct, a senior government official said that any project that is being carried out without an EC will be immediately issued a notice under section 5 of the Environment Protection Act and can be directed to stop work until further orders.
The BKC project is coming up on a 2.5 acre land (C 66) that Reliance Industries purchased during an auction from the Mumbai Metropolitan Region Development Authority (MMRDA) in 2007. Using an FSI of over 8, the company along with Wadhwa developers will be developing a 20 floor commercial building with four floors of parking at an estimated cost of Rs 1,581 crore.
The Indiabulls project is proposed over a four acre plot within the Kalina University campus. The project was dogged by controversy as the land was originally transferred by Mumbai University to the state government on the condition that the latter would build a public library on the entire plot. Questions were raised about the decision of the state Public Works Department under minister Chhagan Bhujbal to call for bids and hand over half the plot to a developer. Indiabulls will be constructing a 13 storey high-end residential project in exchange of building a six storey library on the other half. The company has started work on leveling the site.
Environment experts point out that the EC is granted based on the comprehensive mitigating measures proposed by developers. They state that projects over 20,000 sq m have to get a prior environment clearance even before carrying out the basic ground preparation work.
When contacted by Newsline, Indiabulls refused to comment on the issue.
A spokesperson for Wadhwa group said, “We have permissions to construct till plinth from MMRDA. As per EC norms, we can construct up to 20,000 m at this stage. We are well within this limit.” The spokesperson added that the company has been following up with the authorities for EC since the last fifteen months.
|February 4 2012, 08:12 AM||#1666|
The rich Indian deconstructed
In the world of the rich, money is a subject fit for discussion any time anywhere.
Rajesh Mohan, a wealth manager at a private wealth firm, remembers a meeting with a client at the Delhi Airport early one winter morning last year. The client was to catch a flight to Bangalore but his mind was in the UK, where he wanted to buy a piece of real estate.
Homes in many prime locations in London and elsewhere in Britain were going cheap — as they still are — in the global downturn and financial mess that tailed the mortgage crisis in the US. By September, newspapers were full of stories of Indian and Chinese high net worth individuals (HNIs) snapping up luxury homes in posh districts of London and New York.
The private wealth firm Mohan represents does not do overseas real estate deals. But it keeps getting requests, which are routed to an overseas business partner.
Mohan is just one of hundreds of wealth managers who cater to rich Indians, advising them on where to park their considerable wealth, and helping them make more money. Real estate is but one — albeit popular — avenue of deploying their money.
Rich Indians have for some years been buying property abroad. “The trend has grown stronger since the global financial crisis, thanks to which property prices in most western markets have flattened out,” says Ashish Khetan, head of family office at Kotak Wealth Management, arguably one of the oldest and largest players in this space. The pull factor has only gathered momentum on the back of a weakening rupee, which has led Indian HNIs to look at options of parking wealth.
“A lot of real estate investment went overseas in the past two or three years, primarily in homes in Ivy League college towns in the US such New York, Chicago, Boston, and the UK. Typically, many of these investments were in the range of $200,000-$1,000,000,” according to Sunil Mishra, CEO of Karvy Private Wealth. In wealth management terminology, an HNI is one with investible wealth of $1 million or more. Then there are ultra-HNIs — those with investible assets of $30 million or more.
“As many HNIs have expanded their businesses beyond the Indian shores, they are evaluating options of purchasing real estate either for investment purposes or for leisure. So clients have explored second and third homes in global financial centres such as Dubai, Singapore, London and New York,” says Prateek Pant, head of products and services at RBS Private Banking in India.
A typical Indian HNI portfolio will be weighted heavily towards real estate. This comes mainly from inheritance; and investments in second homes and holiday homes in exotic places and hill stations. Mishra reckons that even if the primary home is excluded, an HNI’s portfolio will have up to 40 per cent of assets in real estate. While HNIs are known to have invested in mansions and malls extensively, what is not common knowledge is that many are also active early-stage investors in middle-class homes, “buying maybe a couple of 3/4BR flats in a project,” says Mishra.
In India, HNIs have exposure to both residential and commercial real estate, the latter including malls, office space and even warehouses. These investments are mainly in the metros, but there is also a trend towards taking measured risks in assets like holiday homes, agricultural land and plantations.
Real estate investment trusts, better recognised as REITs, are realty-oriented venture funds that came into being in the Indian market around 2005. They too are popular with Indian HNIs. Returns from these funds are still a matter of conjecture, as the first funds will mature only in another year or two. But these products did and see strong participation and continue to do so.
The tribe of Indian HNIs is not large yet, but growing fast nevertheless. A wealth report for the Asia Pacific region by Merrill Lynch Global Wealth Management and Capgemini in October pegged India’s HNI population at 153,000 in 2010, up 20.8 per cent from 126,700 a year before. Of them around 62,000 are ultra-HNIs.
According to a report by Kotak Private Wealth and Crisil, the number of the ultra-HNIs is projected to grow to 219,000 by 2015-16. In 2010-11 India was home to 57 billionaires, according to Forbes. The country is next only to the US and China in the number of billionaires. Swiss private banking group Julius Baer projects India’s HNI population to more than double to 403,000 by 2015. Karvy Private Wealth estimates Indian HNI wealth to nearly triple from Rs 86,50,000 crore now to Rs 2,49,00,000 crore by 2015-16, growing at a compounded annual growth rate of 23 per cent.
The rich are not only getting richer and more numerous, they are also getting younger. The average age of Indian HNIs has fallen to the mid-40s from the early 50s in just five years. This has happened because second generation entrepreneurs have come in hordes to replace the older generation. Also, plenty of professionals have turned entrepreneurs and the pay of many more still holding jobs qualify them to be HNIs.
The phenomenal growth in the numbers has not only spawned the wealth management industry but also led to its exponential growth. Homegrown as well as global players are actively chasing plentiful opportunities to manage this gigantic HNI wealth. At last count, India had about a dozen institutional players in private wealth management, besides a number of boutique firms — with strong connections with the caviar crowd — that are also doing brisk business.
“A dozen players, with at least 50 wealth managers each. We are quite a crowd now,” quipped a wealth manager at a domestic private wealth management firm. You would spot them meeting prospective clients on the fairway of the golf course on a Sunday morning or networking at a party in the evening, or even at a private gathering like a family do. “You cannot simply walk in to solicit business. Hundred per cent of it happens through references, which means you have no weekends, no fixed working hours and possibly no holidays also,” remarks the wealth manager.
Many of these firms also run family offices, where sophisticated, highly-skilled and foreign-educated wealth managers play the traditional ‘munim’ to the uber rich, doing their wealth planning from dedicated desks. These units typically manage portfolios above Rs 100 crore.
Growing entrepreneurship has been the dominant source of wealth creation in India, while fast-growing service industries such as IT and financial services have catapulted many middle-income individuals into the HNI bracket.
The average rise in HNI wealth has been in the high double digits, not much is known about their savings habits. The wealth of salaried HNIs rise has come mainly from Esops and other innovative salary structures, strong performance of Indian companies, a buoyant capital market and hefty return on personal investments.
Private wealth planners project the average Indian HNI as a largely conservative and slightly daring investor, who would still like to see most of his/her investment physically in front of his eyes. A typical HNI portfolio, they say, is 20 per cent equity, 30 per cent debt, 40 per cent real estate and 10 per cent gold and other assets. The dichotomy is they are pretty much diversified but not quite adept at judicious asset allocation.
The dictionary of wealth management describes asset allocation as an investment strategy that attempts to balance risks with rewards by adjusting the percentage of each asset in a portfolio according to the risk tolerance, goals and investment time frame of an investor.
“Asset allocation preferences of an individual are typically a function of three factors: risk tolerance, time period and return expectation. However, for many HNIs, their past experiences with asset classes drive investment preference. Real estate has been a popular investment choice, given its emotional appeal and super-normal gains in the past few years,” points out Pant of RBS Private Banking in India.
While HNIs do carry an unquenchable thirst to grow personal wealth as strongly as their core ventures, investment patterns show they exercise far greater caution when it comes to personal investment compared with the kind of risks they would take in their businesses.
Indian HNIs can be broadly classified into three categories — inheritors (those born with a silver spoon in the mouth, having inherited high net worth); the self-made rich or first generation entrepreneurs whose success in business has made them wealthy; and professionals, or qualified, highly-skilled people who have amassed wealth because companies that employed them grew bigger. Each of these groups has unique wealth dynamics.
For the last category of HNIs, Esops are the main instruments of wealth creation. “You would find the equity portion of their portfolios a little skewed. About 25 per cent will be invested in one company that he or she is attached to,” says Mishra.
On the equity side, an average HNI will generally have exposure to three kinds of investments: public equity (investments in listed companies); private equity and venture capital, or early stage, start-up investments.
“Within the listed space they will mostly have exposure to large-cap and mid-cap stocks. And a very few aggressive investors will have a limited exposure to small-cap firms also,” according to Mishra. There is also a lot of HNI participation in private equity funds.
“We do advise clients who set aside 5 to 10 per cent of their equity portfolio to private equity. These are high-risk-high-yield instruments and have typically a six- to eight-year investment horizon.” But as an equity investor, they can act much the same way as anyone on Street will. “They would typically stay with the ‘slogan of the season’, and often get carried away by market swings. At the turn of a cycle, they will go away, and try to be around,” said Khetan.
In the recent downturn, most Indian HNIs were known to have hugely depended on equity earlier, shifted into fixed income assets. This trend was quite pronounced in the past two years.
Wealth planners claim many HNIs left the stock market unscathed by the downturn, unlike retail and institutional investors who lost heavily. Sensex lost 26 per cent in 2011, eroding some Rs 19,50,000 crore of investor wealth.
“While the HNIs’ approach to investment is largely conservative, wealth planners often play devil’s advocate and manage to convince them to go for balanced portfolios of, say, half in equity and half in debt, even when the stock market is doing very well. That keeps the exposure to equity fairly cushioned. This is what stood most HNIs in good stead in the downturn. High interest rates also ensured them good returns,” Khetan said.
Risk aversion may be their hallmark, but of late some HNIs have shown greater sophistication in broadening their investments. Many have been drawn to less traditional asset classes, such as hedge funds, private equity and derivatives.
Many Indian HNIs also participate in the global success of individual companies, such as or Exxon. They buy equity in these companies through international broking houses.
In the international market another preferred instrument is managed commodity futures, which play on a variety of commodities such as crude oil and base metals. In India, investors have no access to similar products.
But many HNIs do take exposure to some complex arbitrages, which largely means trading in equity derivatives. “We generally recommend simple products. But then, at the end of the day the client has a choice. Most wealth managers follow an open architecture model, that is, identifying products from across a spectrum and not concentrating on in-house products alone. It may also mean referring a client to a product run by a boutique firm, if it is best at it,” Khetan reveals.
Commodities may have emerged as a wealth multiplier globally, but the average HNI generally avoids it. That’s particularly true of the Indian HNI. “Gold and to a certain extent silver remain the main commodities where HNIs take exposure. In the bullion trade they go in for both physical commodity as well as ETFs. Structured products like gold debentures too are extremely popular with this class of investors,” says Mishra.
HNIs like gold as it offers capital protection. They also look at it as a saving for the rainy day. Most would rather keep gold in the locker.
Another trait is that HNIs have a strong penchant for debt instruments. The fact that most of them are exposed to huge risks either from a business cycle, stock market exposure, stakes in their own business, or career uncertainties creates a tendency to seek preservation of capital.
So when tax-free bonds from NHAI and IRFC came in you saw huge HNI interest in them. “At 8.2 per cent tax-free returns, these were no-brainers. An HNI would typically keep looking for such instruments,” Khetan points out. Within the debt basket will mostly be government bonds, fixed-maturity sche-mes of mutual funds, debt funds and bank fixed deposits. Contrary to the popular perception, the bulk of HNIs are not art investors; nor do they put money in exotic investment products such as vintage cars or wine. “Many buy expensive art as passion buys and not really as an investment,” says Khetan. They spend a lot of money buying art and artefacts, yachts and islands, or even racing horses. But they do not count them as wealth creation propositions.
According to the Capgemini Merrill Lynch World Wealth report 2011, there has been greater appetite among HNIs for passion investments as the global economy rebounded.
“Our experience is that their propensity to acquiring passion investments have considerations that are not necessary traditional. However, many a time they are solid financial investments and will continue to play a role in their portfolios going forward,” Pant said.
|February 4 2012, 08:13 AM||#1667|
RBI directs banks not to overstate value of house property for loans
Stating that banks have been found overstating value of houses they finance by adopting practices like including stamp duty and other charges in the cost, the RBI today directed lenders to refrain from such practices.
"It has been brought to our notice that banks adopt different practices for deciding the value of the house property while sanctioning housing loans.
"Some banks include stamp duty, registration and other documentation charges in the cost of the house property," the Reserve Bank said in a circular.
It said this leads to overstating of the realisable value of the property as stamp duty, registration and other documentation charges are not realisable and consequently the margin stipulated gets diluted.
"Accordingly, banks should not include these charges in the cost of the housing property they finance so that the effectiveness of Loan to Value (LTV) norms is not diluted," the apex bank said.
Concerned over excessive flow of banking funds to the real estate sector, the Reserve Bank of India (RBI) had in 2010 issued guidelines directing the lenders to provide loans only up to 80 per cent of the cost of property.
As per the rule, a home buyer will necessarily have to arrange at least 20 per cent of the property value on his own before seeking loan from a bank.
In order to check speculation in the real estate sector, the central bank had made it tougher for banks to provide high value loans for properties costing more than Rs 75 lakh, besides raising the provision requirement for loans provided at 'teaser rates'.
However, in case of small value housing loans of up to Rs 20 lakh, banks can provide loans up to 90 per cent of the property value, the central bank said, adding such loans are part of priority sector advances.
In absence of any LTV norms, banks have been providing liberal loans for buying homes, going up to 90 per cent of the asset value.
|February 4 2012, 08:13 AM||#1668|
Israel’s co-ops optimise use of land, say Gujarat developers
The Confederation of Real Estate Developers Associations of India (Credai), Gujarat organised a seven-day technical tour for its members in mid-January. The 60-member delegation, that included developers from Ahmedabad, Mehsana, Rajkot, Surat, Palanpur, Navsari, Unjha, Bharuch and other centres, visited Israel, Jordan and Oman.
The developers visited various construction sites in the three countries for exchange of technologies and also gained knowledge of cooperative model for housing and farming followed in Israel.
The developers were quite impressed by the cooperative models. In India, Magarpatta City has been developed on the model of Israel's cooperative housing society. "The centres facing land crunch can use this model where many land owners are included as stakeholders and big townships are set up. This could benefit developers and the land owners," said Suresh Patel, vice-president of Credai, Gujarat.
The realty players from Gujarat found the cooperative model of farming also quite interesting, where farmers create a pool of land and other resources and work together. They get wages and profit goes to the cooperative society's account which is used for development of new farm land and bringing in innovation in farming.
"Israel is known for maximum utilisation of water and it is demonstrated in cooperative farming using drip irrigation," said Yogesh Bhavsar, secretary of Credai, Gujarat.
Similarly, Tel Aviv in Israel uses common parking space for row-house apartments. "It allows maximum utilisation of the parking area," said Bhavsar.
The builders also found it impressive that greenery was created despite shortage of water using recycled water. Apart from that in Muscat, reclaimed sea-land has been used for setting up a township. The developers wished that such technology had been used for development on Sabarmati Riverfront.
The developers also found that the real estate sector of Muscat in Oman was quite consistent compared to Dubai. "Unlike Dubai, Muscat has been stable without any major ups and downs. It has given around 25% return on investment in property in four years," said Dinesh Patel, president of Credai, Gujarat. The developers also found it interesting to have a government policy to give permanent resident (PR) status to investors buying property in Wave Muscat, township located in coastal area.
|February 4 2012, 04:24 PM||#1669|
Lame policies plague affordable housing
Faulty land policies are preventing development of affordable houses in urban areas, which are likely to witness huge demand for residential premises in the times to come, HDFC Chairman Deepak Parekh said.
"In India land policies have created distortions that have led to inordinate high prices in many key metro cities, Parekh said while addressing a National Housing Bank (NHB) Conference. "In places like Mumbai and Delhi and some large metros, land constitutes 90 per cent of the cost of the house.
If 90 per cent is the value of land, obviously it signifies we have wrong faulty land policies and with those land policies you cannot have a solution for affordable housing," he said. According to reports, the demand for affordable houses has not been met due to various reasons, including inadequate supply of houses as well as absence of credible builders in this field. Parekh said there was no standard definition for affordable housing, but land prices need to be lowered to build low-cost houses. "This is the most challenging aspect. While there can never be a standard definition of what is affordable housing, the bottom line is land prices need to be reasonable for affordable housing to come into supply," he said.
As per estimates, only 30 per cent of Indian population lives in urban area and this is going to go up to 40 per cent in the next decade.
"With urbanisation increasing so rapidly, it is essential to bring more land under urban usage. High land prices result in housing being out of the reach of middle class families. — PTI
|February 4 2012, 04:28 PM||#1670|
So many materials are required for the construction of a house that sometimes, sufficient time is not available to make the required survey and select the right material at the right cost. Even big projects may not be requiring as many different materials as a house requires. It is, therefore, always better to prepare a list of all the materials that will be required with the progress of construction. This list somehow keeps reminding the house owner to make the necessary exercise well in time to choose the material, its source or supplier and to assess its cost. Let us have a look at the materials required during construction of a house:
Basic materials: The basic materials required for the construction of a house are: bricks, cement, steel, coarse aggregate, fine aggregate or coarse sand, fine sand and brick bats. Binding wire can also be placed under this category as laying and binding of steel reinforcement is not possible without binding wire. One should make the necessary exercise to finalise the sources and rates of these materials as these shall be required throughout the construction of the house.
Sanitary items: Pipes are required to be erected in the walls for soil, waste water and rainwater drainage as the masonry work progresses. The sanitary items include pipes of 4 inch, 3 inch and 2 inch diameter, bends, P traps, floor traps, trap covers, collars, tees, tail pieces, solvent or rubber gaskets in case of using PVC pipes or caulking lead in case of using CI pipes. In addition, the gully traps with lids, stoneware pipes, inspection chamber covers are required.
Sanitary fittings: At a later stage, when the house is nearing completion, many types of sanitary fittings are required. These include water closets, their covers, flushing cisterns, wash basins, showers, shower cubicles, bottle traps, mixers, faucets, pillar cocks, stop cocks, taps, looking mirrors, soap dishes, towel rails, coat and hat hooks, bathroom cabinets, glass or acrylic shelves below mirrors, shower arms, diverters, cockroach traps, pull type cloth drying cords, CP wastes and plugs. As there is a huge variety of fittings available, making a final choice for each item takes a lot of time and the market survey should be done well in advance.
Water supply items: Water supply arrangement for the house requires water supply pipes which may be of GI or PVC or composite material or stainless steel. The pipes are of many diameters, main quantity belonging to ˝" and 3/4" diameters. In addition, a number of fittings called 'specials' are required. These include elbows, tees, sockets, unions, reducers, reducer elbows, nipples, plugs, bushings, caps, couplings, ball valves, gate valves and reducer couplings. Each of these specials is of different diameters as per requirement. In addition, water repellant paint is used to paint GI pipes to avoid the effect of salts released by the bricks these days. Water storage tanks and non-return valves are the additional items for the rooftop. Electrical items: The electrical items include PVC heavy duty conduits of various diameters to be embedded in the walls, heavy duty small and large bends of corresponding diameters, switch boxes of various sizes, wires of various sizes such as 0.75 mm, 1.5 mm, 2.0 mm, 4 mm, 6 mm, 10 mm and 16 mm, junction boxes, steel wire, insulating tapes, ceiling roses, MCBs, ELCBs, modular switches, sockets of 5 amperes and 15 amperes, two-way sockets, TV sockets, Fan step regulators, bell switches, call bells, fans, lights, tube-lights, fan hook boxes, light boxes, sheets, exhaust fans, gate lights, lawn lights, earth fitting items, air conditioners, chandeliers, conduits for phone wires and pole switches. The quantity should be worked out carefully and negotiations with a fixed retailer should be held as heavy discounts in the range of 35 to 45% are often offered on the MRP of electrical items.
Woodwork items: Lots of woodwork is involved in the construction of a house and this is perhaps the most time consuming item. Main item for woodwork is of course, the wood which needs to be procured after careful calculation of the quantity required. In addition to the wood, plywood, particle boards, wire mesh for doors, sunmica, toughened glass, float glass, blind glass, ply board, fevicol, holdfasts, corner straps, hinges, screws, nails, putty, black paint for door frames and anti-termite treatment solution such as Biflex TC are required.
Joinery fittings: Joinery fittings include door and window handles, tower bolts of different sizes, mortise locks, sliding bolts if to be provided, door stops, gate hooks, drawer runners, magnetic catchers, drawer locks, cupboard hinges, door closers, door springs as the main items. In addition fittings for aluminum doors and sliding doors are required. There is a vast range of joinery fittings available and one has to decide their provision by keeping the cost factor in view.
Kitchen items: In addition to the sinks, hobs or burners and chimney, the kitchen requires many types of baskets, cabinets, trolleys, corner storage units, tall unit, trays, cane baskets and stands. Drip tray, a water filter, a microwave or OTG, fold-up pantry and trash masher are some other items normally provided in the kitchen.
Wall and flooring materials: The items required for final finish of lower portion of walls and the floors are marble, granite, ceramic tiles for walls, wooden flooring, if to be provided in the bedrooms, vitrified tiles, courtyard tiles or Kota stone and anti-skid tiles for bathroom floors.
Finishing materials: The finishing materials include plastic emulsion or oil-bound paints for interiors, water proof wall papers for some walls, putty for wall finishing, POP, black paint for sunken areas of toilets, exterior quality paints, stones or other finishes for external surfaces, sand papers, primer, paint, sealer and polish for woodwork, any tiles required for front elevation of the house, paint and primer for grills, main gate and any other steel work.
Miscellaneous items: The miscellaneous items include security items such as CCTV, Burglar alarm system, door phone etc; anti-termite treatment material for the foundations and floors, water proofing compounds for adding to concrete, cover blocks, water proof paint for the basement walls, terrace and plinth beams; window grills, main gates, balcony railings, staircase railings, spiral ladders, curtain rods, POP for ceilings and false ceiling materials.
It is not only interesting but useful to maintain a complete list of all the materials that you keep on buying as your house progresses. On completion, it may help you in developing a fair idea of the cost of material components along with their quantity estimates.
— This column is published fortnightly
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