susheel04

HMDA in financial mess


HYDERABAD: With no fresh land auctions in sight and more commitments to fulfill than its revenue, the Hyderabad Metropolitan Development Authority (HMDA) is on the verge of a financial crisis. If the situation continues like this, the authority may not be in a position to pay salaries to its over 400 employees from October.
However, HMDA officials claim there will not be any problem for the Outer Ring Road (ORR) and Hussainsagar cleaning works as the projects are being funded by the Japan International Cooperation Agency (JICA).
The HMDA has financial commitments to the tune of Rs 50 crore immediately for various pending projects like PVNR Expressway (ramps works) and rail over bridge at Hi-Tec City.
Official sources said the HMDA needs Rs 18 crore every month for salaries, maintenance & repairs and payment of interest on loans taken from various banks and financial institutions. But, it earns only Rs 10 crore revenue per month, mainly from planning department and rents from its commercial complexes at various locations.
It has taken a loan of Rs 1,000 crore__Rs 700 crore from Hudco, Rs 300 crore from Indian Bank and another Rs 100 crore from Union Bank__and has been paying Rs 14 crore as interest every month, Rs two crore towards salaries and Rs two crore towards salaries of outsourced employees, power bills, maintenance of parks and other miscellaneous expenditure.
Of the about Rs 10 crore revenue it gets every month, Rs eight crore is from the planning department and another Rs 1.5 crore from rents on its commercial complexes like Mythri Vanam, Mythri Vihar, Swarna Jayanthi complex, all in Ameerpet, and Hermitage Complex in Adarshnagar.
"Nearly 90% of revenue, which it is getting from the planning department, is from Layout Regularsiation Scheme (LRS) and pending Building Penalisation Scheme (BPS) applications. The LRS scheme will close on September 30," a senior HMDA official said.
Last year, the planning department, which is the main source of revenue, had earned Rs 12 crore per month, the official said. The revenue from building permissions is not crossing Rs one crore per month.
For the last two years, HMDA has been surviving on money it is getting from land auctions. Last July, the HMDA had earned Rs 67 crore though auction of land, while in February this year it sold plots and got about Rs 23 crore.
Though the urban authority wants to go for another round of land auction to get over its financial problems, the officials are hesitating due to the fluid political situation and land deals coming under scrutiny. It reportedly identified land in Jawaharnagar for auction.
Meanwhile, the income tax department slapped notices on the HMDA to pay Rs 412 crore income tax on Rs 2,684 crore revenue it got through land auctions during the last five years. The urban authority, which refused to pay the tax, claimed the revenue generated was for specific purpose. Then, it approached the income tax tribunal against the notices.


source: Toi

susheel04

A builder has just built a housing complex comprising 55 flats. The real estate market isn’t doing too well at this point in time. The builder is finding it difficult and has an unsold stock of 25 flats. He is even ready to give heavy discouns if someone can buy in bulk, say even five flats. Other builders too are in a similar situation. In spite of the discount offer on bulk purchase, there are no takers. Why would anyone want to purchase 5 flats in one go?

Now, Ramesh, Shan, and Sayeed are engineers looking for a flat in the same city. They know that the market isn’t doing too well and want to make the most of the situation to buy a house. They are not able to find a good deal in the current market scenario. How can the builder and potential home buyers like Ramesh, Shan and Sayeed get in touch with each other? For if they did, both builder and buyer could work out a mutually beneficial agreement.


Group Buying — a new trend in real estate PURCHASE


This is where the concept of group buying comes into the picture. In the last few years, group buying has been touted as a viable option for home buyers looking towards getting attractive discounts.


Here is how it works. Potential home buyers connect with one another through a common platform, usually provided by a third party or a group buying company (referred to as company hereafter), and form a group. The company then goes to the builder with a couple of orders and negotiates for possible discounts. The builder, sensing a good opportunity to sell a number of his flats, agrees to the discount. Typically, there is negotiation on discount but the discount is higher than what is offered in individual cases.


Then there are exclusive platforms such as Group Bookings (Real Estate Group Bookings, Bulk Buying, Deals, Offers, Discounts), dedicated to group buying of homes, which help individuals join like-minded groups, who are interested in bulk purchases of certain properties. Once a group is formed, the company negotiates with the builder on the group’s behalf to get better discounts.

Advantages for the home buyer


The typical home buyer is in constant search for a better deal. As individuals, home buyers cannot negotiate for a better deal since it will not make economic sense for developers. The transaction cost with each individual will be high for developers. Also, an individual home buyer will not have bargaining power in a market dominated by real estate developers. By coming together and forming a group, the individual buyers can increase their bargaining power and hence will be able to bag better discounts.


For example, suppose a developer prices 2 BHK apartments in a residential complex at Rs 2,800 per square feet. The company can negotiate the price and bring it down to Rs 2,300 — Rs 2,700 per square feet for group buying of apartments. This discount will be much more than what an individual home buyer can negotiate with the builder.


Typically, the company which negotiates on behalf of the home buyers will probably be able to get a 4 per cent to 10 per cent discount on the price of the property. That is, if the price of your dream home is 40 lakhs, you can save up to 4 lakhs as discount.


Another advantage is that the group can share common services needed to complete the transaction such as a home loan, lawyer’s fee, and compliances. In these areas the individual home buyer as part of a group, will have more power for negotiation.

Advantages for the developer


Group buying offers builders certain advantages. Usually down payment in group buying is higher and hence developers who are just starting to build the complex get much needed cash. In the era of high interest rates and uncertain stock market, the higher down payment comes as a blessing for cash strapped developers.


Moreover, developers get a readymade market to sell their properties in bulk without spending anything in customer acquisition and marketing. This reduces their cost of selling. This savings can be passed to the home buyers in the form of extra discount. Group buying also helps developers sell the properties faster and focus on the next venture.

How does it work?


Let’s see how group buying works. Essentially, there are two ways:


Buyer initiates the deal


In this case, the potential home buyer posts his or her wish to buy a home in a project. The deal is then listed on the website and potential home buyers are encouraged to form a group if they want to buy a house in the same housing complex or from the same real estate developer. The home buyer can also visit the office of the company and get the required information.


Once the group reaches the critical number, the sales team contacts the home buyers, aggregates the demand and submits the bid to the builder.
The deal is then negotiated, and finalised. The home buyers get the agreed group discount.


Broker Company initiates the deal


In this case, the company posts a potential housing complex that will come up or an existing one. The deal is displayed with discount on offer at the website of the company. The buyers are encouraged to form a group to avail the discount.
Once the group achieves the critical number, the company submits the bid to the builder. The deal is then negotiated, and finalised. The home buyers get the agreed group discount.

Important Points


While as a home buyer you need to consider all important aspects typical to a home purchase process, you have to consider the following additional points:


The broker company is likely to charge for the services. The charges could be up to 1 per cent of the price of the property. The charges vary with brokers though and hence you should compare and check with companies that provide group buying. You should factor these charges to the total cost of buying your home. Usually charges will only work out to be lesser than the incremental discount you get from group buying. In some cases, the group buying company doesn’t charge anything from home buyers but gets its service charge from the developer.
You may have to shell out higher upfront or advance money to a developer.



The money asked upfront is usually more than what you pay in case of an individual buy. The amount could be twice as much.
Building critical mass of people to buy houses in a specific location and housing complex takes time. The buyers should like the place; should have the same requirement; should have convenience of communication to their office, and should meet many more requirements of individual buyers. Assimilating all such buyers to form a group will take time and hence home buyers should be ready to wait for the deal to materialise.



Last and most important, read the deal and all its features carefully. In a group buy, most of the buyers think that others have read the terms and conditions and hence do not bother to read it. Do not make such mistakes. Ask if you do not understand some features. This is the most important aspect that you need to provide maximum attention to! When it comes to doing the due diligence, think like an individual not as if you are the only one buying the home and take utmost care to ensure the credibility of builders, papers, and possession.



source:financial express

susheel04

With almost half of the 158 km long Outer Ring Road (ORR) stretch completed and work on the rest in progress, a formal nod from the government is awaited to put the toll collection process in place.
The Hyderabad Growth Corridor Limited (HGCL) which is executing the project has forwarded the lone tender it had received for collection of user fee on the completed ORR stretch, to the government.


“We are waiting for permission from the government. Once we get the necessary approval, the process can be started,” said an official. Following a call for tenders to collect the user fee from vehicles using the completed ORR from Pedda Amberpet to Patancheru, only one bid was received which led to speculations that the tender process could be cancelled and a fresh call made.
Open tender

However, officials maintain that it was an open tender and there was no stipulation that a work should not be given in case of only one bid. “Even if there is a lone bid that fit the prescription, we can go ahead and consider it,” the official pointed out.
Meanwhile, couple of patches that are not yet fully ready on the 85-km stretch of the ORR southern arc between Patancheru and Pedda Amberpet would be completed within next three months. “The Muthangi junction will be ready in about 45 days while the one at financial district will be completed within 75 days,” he said.
Progress

According to authorities, the work on major part of the northern arc of the stretch too was progressing smoothly and about 38 km of it would be ready for usage by the month of November.
Court cases

“Except for places that are involved in court cases like at Kandlakoya junction and Shamirpet, the work is moving briskly and this will be completed in three months,” the official added.


source:hindu

susheel04

Brickless technology will meet the need for housing in half the time compared with conventional methods. Feroz Khan, Director, Fabtech Sterling Building Technologies



Pre-fabricated concrete products can be a solution to the soaring construction costs and delays in construction of property, says Mr Feroz Khan, Director, Fabtech Sterling Building Technologies. Mr Khan, shares the advantages of pre-fabiracated and pre-engineered technology over conventional building systems. Excerpts:
Is there any statistics on pre-fabricated and pre-engineered concrete industry growth in India?


Pre-fabricated and pre-engineered concrete industry is growing by 30 per cent year-on-year. With the economic re-strengthening, we expect rise in current trends. The reason behind our expectation is also linked to the impetus provided by the government with tax exemption for concrete products pre-fabricated on site. Brickless technology will fulfil the nation's need for housing in half the time in comparison to conventional construction in future.


In what ways are your products suitable for Indian conditions? What are the inputs that go into making your products?


Our most premium offerings are under the umbrella of FABFORMS, a range of building systems. This replaces all kinds of traditional forms such as wood , steel and aluminium and is manufactured from specially designed plastic spacers made from 100 per cent recycled plastic and composite cement

boards, thereby making it a green product.


Fabtech Plaswall and Plasmolite are offerings with unique form for external construction and are making a headway in West Asia and Africa. Plaswall, with panel thickness of 4 inches provides more carpet space compared with conventional seven to nine inch wall.


It can be constructed at the company's manufacturing facilities or at the site of construction. Plasmolite, on the other hand, is a product for high-rise buildings.


It is lighter and has special properties such as low thermal conductivity and high fire resistance.


What advantages do they have over the traditional system of using bricks?


Fabtech's technology has tangible benefits. Plaswall, for instance, is adaptable to all climatic conditions and even extreme conditions like earthquakes and cyclones. Design flexibility allows any configuration as per client's requirements - arches, curved walls and so on. It can be very well integrated with conventional columns and beams. It saves energy equally up to 40 per cent both while heating and cooling.


On the cost side, it reduces construction time by a third and enables you to save dramatically on the material cost. Also, since the site completion takes less time, developers are able to get return on investment much earlier, thus saving on interest.


The products do not also require huge skilled labour which is a big issue in India today.


Currently which segment sees the most demand?
Residential seems an exciting segment for us at the moment; however industrial segment is growing as well. We are in discussions to build power plant projects in Orissa and Wardha.


Prefab products have been the subject of quality concerns? What is your defence?


We use James Hardie boards known for their better quality. James Hardie is the first and largest manufacturer of fiber cement boards. Our technology is well-proven for quality with various fire, acoustics and thermal certifications. The product is not prone to termite, seepage and leakage when compared to conventional technology. It is because of the quality of board.



Which other countries use this technology?
Globally, this technology has been in use for eleven years and has spread from the Philippines to Australia, Qatar, Oman and India. In India, operations have started a year ago and we are already working with the best names such as Tata, Celon, Ajanta, Atra and so on.



source: bline

susheel04

With their home markets in turmoil, large global investors such as Blackstone, Carlyle, Morgan Stanley, JP Morgan and the Government of Singapore Investment Corporation are actively scouting for and signing deals in the Indian property sector.


Take, for instance, the Carlyle Group, which has $153 billion in assets under management. The group invested $26 mn (Rs 117 crore) in former Citibanker Jaithirth Rao’s low-cost housing project ‘Vaibhava’ in Bangalore. The investment was made from the $1.04-bn Carlyle Asia Growth Partners IV (CAGP IV) fund.


Although Carlyle’s investment in the Vaibhava project was its first in the Indian property sector, the group has been an active player in the real estate segment across many Asian countries, including China and South Korea, since the year 2000.


A Carlyle spokesperson said: “As you may notice, this investment was made from our growth capital fund because they see strong growth prospects in this company and the demand for affordable housing, rather than purely targeting the property sector, although this is indeed our first investment in the property sector.”


Another global private equity (PE) giant, Blackstone, which gained exposure to Indian real estate through its 2008 investment in Synergy, a Bangalore-based architectural company, is looking for opportunities to invest in the property sector, said two executives privy to the talks.


In what could be its maiden investment in the Indian property sector, Blackstone is in advanced stages of negotiations with DLF, the country’s largest realty company, to buy the latter’s land in the information technology special economic zone in Pune for Rs 900 crore. Blackstone is also financing the Embassy group’s purchase of 22 per cent stake in Manyata Business Park, Bangalore, for Rs 540 crore.


“As a policy of the Blackstone Group, we do not comment on industry speculation,” was the response of a public relations executive, when asked to confirm.


According to sources in the market, Morgan Stanley is looking to invest $100 mn in the Century Group, the Bangalore-based property developer. Morgan Stanley made headlines in 2007 when it invested Rs 675 crore in Mumbai-based Oberoi Constructions, in one of the largest entity-level deals in real estate. An email to Morgan Stanley did not elicit any response.
Although the property market is abuzz with the news that JP Morgan has launched a $350-500 mn India-focused realty fund, a senior executive of the investor denied the development.


Background
The heightened activity by these investors comes after two years of exit or inactivity of global funds such as Wachovia, Citigroup, Goldman Sachs and Marathon, among others, in the Indian property sector after the global financial crisis in 2008-09.


“You can say it is a good coincidence of availability of capital and opportunities to invest,” according to a senior executive of JP Morgan. “There is a clear funding constraint because of high interest rates and provisioning for bank loans. It is an opportunity for investors at reasonable valuations.”


Most of the investors exited or became inactive after the global financial crisis and collapse of Lehman Brothers in 2008. Lehman itself was one of the biggest investors in the Indian realty sector.
Also, the proposal from former US Federal Reserve chairman Paul Volcker played a role in global banks limiting their exposure in PE funds. The Volcker rule specifically prohibits a bank or institution that owns a bank from engaging in proprietary trading that is not at the behest of its clients, and from owning or investing in a hedge fund or PE fund.
“Post the global financial crisis, it would have taken global investors a couple of years to reorganise themselves and raise fresh funds to invest. For instance, Morgan Stanley raised $5 bn last year and there is an India allocation in that. Carlyle is looking at an IPO,” said Amit Goenka, national director, Capital Transactions, Knight Frank, a global property consultant.


“Many global investors burnt their fingers during the boom of 2005-2008; they invested at high valuations but did not find any easy exits,” said a senior realty fund manager who did not want to be named. That made many of them cautious, he added.


source:bs

susheel04

Nearly 260 trees on the Nagole-Mettuguda stretch, which is part of the Metro Rail Corridor-III, will face the axe or be translocated in the next few months.


The Nagole-Mettuguda stretch, which is around eight km length, forms a part of the 27.51 km stretch for Corridor-III, proposed by the Hyderabad Metro Rail Limited (HMRL). "About three months ago, HMRL undertook a detailed survey of the stretch to find how many trees would be affected by the metro rail project. A few days ago, they submitted a report. According to the report, 260 trees would have to be removed or translocated. However, we have identified that particular eight km stretch, because it is clear and we received no objections to it from local people or traders," a senior HMRL official told TOI.


A letter has been sent to the forest department seeking permission either to remove/translocate the 260 trees. A detailed report with the number of trees and their girth was also sent to them, after which the forest department would inspect the stretch and would take a final decision. "After completion of inspection, they will send us a report to axe or translocate the trees," the official added.


The official added that members of the Forum For A Better Hyderabad have also approached the forest department with a plea that the trees be translocated to an open space to save greenery. "We will invite tenders for removal and translocation of the trees," he added.


The HMRL has already completed soil tests on the stretch to construct piers (pillars). Earth excavation works is expected to begin once the forest department gives the green signal on the trees. "The Nagole-Mettuguda stretch is the first in all three corridors, where the Metro rail authorities are ready to begin the work," said the official.
The identification of trees located on other stretches has also already begun and a report on these is likely to be received within three months.


source:toi

susheel04

To save Hyderabad's heritage from being run over by the metro rail project, the Heritage Conservation Committee (HCC) has for the first time made a statement on the issue and suggested that the metro line be taken underground, at least partially.

It has also stated that the metro rail body should take clearance from it before taking up work near any heritage site. The committee's proposal came to light in a recent letter sent by the Hyderabad Metropolitan Development Authority (HMDA) to Forum for a Better Hyderabad, in response to queries raised by the latter on the controversial project. In its letter, HMDA stated that the metro rail issue was placed before the HCC at a recent meeting, wherein the body proposed that the project be taken underground on the metro routes that house heritage buildings and precincts.

The committee also suggested that the project director (metro rail) seek clearance from HCC before starting work. According to HMDA, these proposals have now been forwarded to metro officials for further deliberation. Activists say that close to 17 ancient monuments of the city would have to be pulled down if the metro project is executed in its present form.

This list includes parts of prominent buildings such as the Jubilee Hall, Vilayath Manzil, Hyderabad central building division's office (Moazam Jahi market), Nampally Sarai, Women's College, Koti, etc. "Laying underground tracks is the only solution we have in sight to save this heritage cover," said HCC member Sanjay Torvi. "In the past, when the metro authorities made a presentation before us, we had suggested that the matter be dealt with sensitively. But this time we have made a specific appeal and we hope it is honoured."

The committee also dismissed arguments about the option (of going underground) being unviable owing to Hyderabad's rocky terrain. In fact city architect Srinivas Murthy, while lauding the HCC's decision, said that it was no Herculean task to build an underground rail network, thanks to latest technologies.

"It would slightly inflate the budget of the project but then that is a small price to pay to protect the city's heritage," Murthy said. Referring to the metro rail in New Delhi, the architect pointed out how the entire route passing through Old Delhi is built underground so as to preserve the character of the area.

Even in Bangalore, city activists say, an 8.2 km-long metro line is being laid underground to protect the ancient Vidhan Sabha building. "We have forwarded the HCC's proposal to Hyderabad Metro Rail (HMR) officials. Now it is up to them to conduct the required surveys and see how best they can execute it," said Sayed Ziauddin, chief planner, HMDA. He said that the HMDA was still awaiting a response from HMR on the issue.

source: toi

susheel04

The government has received 55 proposals for establishing integrated textiles parks in various parts of the country. The government has approved a budgetary allocation of Rs 400 crore for setting up new textiles parks under the Scheme for Integrated Textile Parks (SITP).

At present, there are 40 textiles parks in Tamil Nadu, Karnataka, West Bengal, Gujarat and Andhra Pradesh. As per the scheme, the government will finance 40% of the cost of facilities and infrastructure, up to a limit of Rs 40 crore. To encourage the production of special yarn and silk, two silk parks have been sanctioned at the Doddabalapur Integrated Textile Park and Kanchipuram AACM Handloom Silk Park.

source: pm

susheel04

After Sultan Bazaar traders, now it's the turn of Ameerpet businessmen to join the fight against land acquisition for the proposed metro rail project. On Sunday, about 200 traders affected by Corridor-III of the metro rail project that runs through Ameerpet crossroads to Uppal staged a dharna demanding the state government to immediately stall the project.
Members of the ameerpet traders association on Sunday said they have already given representations to state government and the metro rail authorities opposing the move. The protestors said, the metro rail corridor project, if completed, would adversely impact their business prospects in the area.
While about 500 traders in the locality will be affected by the land acquisition that is halfway through already, protestors said that they will continue their agitation if the land acquisition on either sides of the main road does not stop immediately. The traders who sat on dharna at Ameerpet crossroads from 10 am continued their protests till 2 pm.
They alleged that the land acquisition for the second phase of Corridor-III started without any prior notice. "While the authorities had acquired land on National Highway-9 starting from Sanjeev Nagar Colony to Punjagutta in the first phase, they did not inform about the current land acquisition. Now the authorities have started acquiring land from Ameerpet crossroads to Green Park Hotel and Begumpet without any prior notice. This will ruin our business prospects completely," said V Babu, general secretary, Ameerpet Merchants' Welfare Association.


The traders said since Ameerpet crossroads is the major location for most of the trading, their business has taken a beating due to the ongoing land acquisition process. Ashok Nandan, a textile merchant from the area, said that even during the busy festival time, most shops in the area did not make much profit due to the land acquisition process. "The discussions with the metro rail authorities are still on. But the barricades put up by authorities preventing many customers from visiting our shops during Ganesh Chaturthi," he said. "Small traders suffered losses to the extent of Rs 3-4 lakhs due to the land acquisition so far and the losses incurred by big shops could be even more," some traders complained. The traders are planning to meet chief minister N Kiran Kumar Reddy soon to request him to stop the land acquisition process at least till Dasara and Diwali festivals.
Ameerpet traders, however, added that they oppose only the new unnotified land acquisition that started this month. "We do not have any problem with the rail project coming up using the land which is already acquired. But we vehemently oppose any further acquisition," said Babu, a textile merchant. The protest on Sunday stalled traffic in the area for a few hours, causing trouble for commuters. The Ameerpet traders said that they have already forged an alliance with the Sultan Bazaar traders to strengthen their fight against land acquisition.


source: toi

susheel04

Real estate developer DLF Ltd that currently operates luxury mall - DLF Emporio - in the Capital is considering to start similar projects in other big cities, including Hyderabad and Chennai, that are seeing traction for high-end brands.

"We are looking to open more luxury malls in cities like Hyderabad and Chennai," DLF Malls Business Head Savitri Devi Singh said.

The company is currently in talks with the existing tenants at its DLF Emporio for the same. "There are some 10-12 anchor brands we are in discussions with to bring up similar models in other cities," she said.

According to Singh, who did not disclose the investment planned by the company in future projects, developing malls for housing luxury brands is an attractive proposition.

"DLF Emporio has already broken even and is doing very well in terms of revenue generation. It is a very viable business," Singh said, although she declined to divulge the amount, developer invested on the mall.

According to her, the mall is currently operating at a conversion rate of about 70 per cent. Some of the brands in DLF Emporio include Giorgio Armani, Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, Aigner, Tods, Tiffany’s, Burberry and Hugo Boss, along with some leading Indian designers.

"Even Chandigarh has good potential for selling luxury goods, but we are not sure whether it would be right to open another mall there due to its proximity to Delhi," she added.

Cities like Bangalore and Mumbai already have luxury malls such as the UB City and Galleria, respectively and entering there is a much lesser attractive option.

If experts are to be believed, there is a dearth appropriate retail space in India that is keeping many luxury brands away from the country.

"There is a serious need to have more retail spaces for luxury brands to expand or enter India," AT Kearney Principal Neelesh Hundekari.

According to a CII-A T Kearney report, India's luxury market, which is small compared to global standards, is likely to grow three times and touch USD 14.7 billion by 2015.

In 2009, the luxury industry, including products, services and assets, was estimated at USD 4.76 billion.

source:zee