volume 2 | issue 2 - National Real Estate Development Council

Transcription

VOLUME 2 | ISSUE 2 | SEPTEMBER-OCTOBER 2015
Outsourcing and
Corporate Real Estate
FUTURE PERFECT
Real Estate Trends and Expectations
Rs. 100
V o i c e
o f
R e s u r g e n t
I n d i a
INDIA AWAKES
HOUSING FOR ALL
NAREDCO - BMTPC
Conference Report
Metro Rail
An Unmatched Real Estate Catalyst
Quality Construction
What Does It Really Mean?
Editor-in-Chief
The bugles have been sounded to hail the Prime Minister Narendra Modi from
the ramparts of Red Fort on Independence Day Team India comprising of 1.25
billion people to implement three missions- The Smart Cities Mission, the ATAL
Mission for Rejuvenation and Urban Transformation (AMRUT) and the Housing for All Mission. These missions envisage an investment of Rs. 4 lac crore
to build 20 million homes, The Smart City and AMRUT Mission will need an
investment of Rs. 48,000 crore and Rs. 50,000 crore respectively over the next
five years.
The battle for inclusion in the list of 100 Smart and 500 AMRUT Cities has begun on account
of government funding of Rs, 100 crore each. Yet the battle is only a race between state governments to get maximum number qualified for meeting the norms set by the center. Unlike
the west, Indian Smart Cities have to be financial, commercial, cultural and social hubs that
generate employment as also invite investments. The new concept has lead to a virtual rise
of parallel capital cities across the country vying with the present mega capital cities- Delhi,
Mumbai, Kolkata, Chennai and Bengaluru.
Public- Private Partnership is a force multiplier and an important adjunct of the Missions Affordable Housing for All. In this regard, the
updated Haryana Affordable Housing Policy has become a model for
meeting the rising aspiration of the under privileged and the middle
classes. The definition of affordable has also undergone a transformation with increasing prosperity of all classes and their desire to
upgrade from rent to self owned homes of different categories. Consequent to the licenses issued to the private developers in accordance
with the act, houses were booked and sold within days of a transparent lottery system. Affordable Housing Association formed by
Real Estate Development Council (REDCO Haryana) has played a
dynamic role in interacting with the government. A survey of Housing Market in Haryana reveals that despite housing prices touching
record levels, the disposable income of the homebuyers is directed towards “Affordable
Housing” as the preferred choice, especially on account of Affordable Housing Policy of
Haryana government.
HOUSING
For All
The 100th Governing Council of NAREDCO laid the roadmap of National Housing through
its resolve to script a new constitution for providing continuity to its goal of working with in
conjunction with the Government of India at national, regional and state level as also unite
the industry through state councils in accordance with the federal structure of government.
National Realty celebrates its journey from its inauguration on Feb 7th 2014 at Jagannath
Puri on the formation of NAREDCO Odisha at Bhuvneshwar. At a time when the Prime
Minister Narendra Modi is expected to return with Kohinoor from London as outline in our
Dwaapar column- The Return of Kohinoor we humbly pray that coronation of Lord Jagannath will signal the return of investment to India after its departure in 1850.
While entering the second year of publication we thank the readers and the advertiser for
their support and encouragement in bringing out National Realty both in print and as an
E- Magazine on NAREDCO website www.naredco.in and REDCO Haryana website www.
redcoharyana.com
Col. (Veteran) Prithvi Nath, VSM
20
12
Contents
05 India Awakes
Indian Real Estate has had a long and illustrious
history.
12 Infrastructure Special
Metro Connectivity, a good road and rail network and a
focus on sustainability through solar power and Green
districts are set to revive the business
28 Maharashtra Special
Integrated Townships, Quality construction and
a sharp eye on illegal constructions is the need of
the hour.
Metro Connectivity and Road Network
Metro Connectivity, a good road and rail network and a
focus on sustainability through solar power and Green
districts are set to revive the business
With a distinct advantage for Lonavala and New Pune
in terms of proximity and pleasant weather conditions,
they are poised to emerge as viable Real Estate
Destinations
32 NAREDCO Reports
From the HSMI Training Programme for Real Estate
professionals, the BMTPC-NAREDCO conference and
seminar and the Build Connect platform for Architects
and construction specialists, NAREDCO is at the
forefront of the industry activities
38 Unlocking the Rental Potential
The draft Model Tenancy Act, a look at how to solve
the problem of unoccupied flats in the city and tips
for First-Time Residential Landlords will all help
understand the rental markets better and improve the
realty situation
42 Gender Diversity in Real Estate
Having women at all levels in the organisation is
critical not only to increase the resource pool, but also
to provide enrichment and diversity.
10
43 E Registration for Transparency
E-registration has simplified the process for providing
evidence of titles and facilitating transactions, and will
go a long way in preventing the unlawful disposal of
land.
46 Outsourcing and Corporate Real Estate
While the initial development of the outsourcing
industry was through call centres, research and
development and processing centres have emerged in
India, signifying a move up in the value chain for India.
50 Rupee Rebound
Future Perfect
Real Estate Trends for 2015 indicate a slow but
steady recovery even as RBI Governor urges the
industry to reduce rates.
The ‘Rupee Rebound’ again on Sept 8, 2015 after
Prime Minister Narendra Modi’s economic review with
India Inc., Finance Minister Arun Jaitley, RBI Governor
Raghuram Rajan, Industry leaders, Bankers and
Economists.
Cover Story
Editorial Board
Printer, Publisher & Editor-in-Chief
Col. (Veteran), Prithvi Nath, VSM on behalf of NAREDCO
Associate Editor
Meenakshi Sharma
INDIA AWAKES
Deputy Editor
Suneel Sehgal
Marketing (West & South)
Viresh Pandey
Advertising & Circulation
Yogesh Kumar and Asad Mubin
Content Management & Editorial Assistance
Resurge Management Consultant Pvt. Ltd.
E-mail: naredco@naredco.in / nationalrealty9@gmail.com
After 409 years of darkness, there is a light at the
end of tunnel as India Awakes by PRITHVI NATH & Rohit Gupta
RNI No.: DELENG17455/29/1/2009-TC
Published from
National Real Estate Development Council,
First Floor, 8 Community Centre, East of Kailash, New Delhi 110065
Printer
Naveen Printers, F-11/B, Okhla Phase- 1, New Delhi 110020
National Real Estate Development Council
First Floor, 8 Community Centre, East of Kailash, New Delhi-110065
Tel: 011-26225795, 41608570, Fax: 26225796, Email: naredco@naredco.in
Mumbai Office
NAREDCO West Foundation
GA-1, Court Chambers, 35, New Marine Lines,
Mumbai - 400 020
Tel: +91 22-22841604/61560500
Andhra Pradesh office
NAREDCO Andhra Pradesh
Plot No. 43-A, Journalist Colony, Road 76, Jubilee Hills,
Hyderabad – 500033
Tel: +91 40-65572184
Jaipur office
Rajasthan State Real Estate Development Council (RAJ REDCO)
307, Pink Towers, Opp. Nehru Garden, Tonk Road,
Jaipur – 302015
Tel : +91 141-2741375, 5108651
Telengana office
NAREDCO Telengana
Plot No. 43-A, Journalist Colony, Road 76, Jubilee Hills,
Hyderabad – 500033
Tel: +91 40-65572184
Haryana office
REDCO Haryana
O-149, 1st Floor, Shopping Mall, Arjun Marg, DLF City Phase – I,
Gurgaon – 122002
Tel: +91 124-4055124
Karnataka office
NAREDCO Karnataka
# 578/B, Shwetha Arcade, 3rd Floor, Sector - VI, 100 Feet Road,
HSR Layout, Bangalore – 560102
Tel: +91 80-49081102
Uttar Pradesh office
Real Estate Development Council Uttar Pradesh (REDCO UP)
152, 5th Floor, A-41, Sector – 62,Gautam Budh Nagar,
Noida – 201301
Tel: +91 120-4888400
Odisha office
NAREDCO Odisha
Plot No. 84, Satyabadi Enclave, Gayatri Vihar, Chadrasekharpur,
Bhubaneshwar – 751024
Tel: +91 674-2740103
Advisory Board
CHAIRMAN
Shri Navin M Raheja,
CMD, Raheja Developers Ltd.
PRESIDENT
Shri Sunil Mantri,
CMD, Mantri Realty Ltd.
VICE PRESIDENT, North
Shri Rajeev Talwar,
Group Executive Director, DLF Ltd.
VICE PRESIDENT, Central
Shri Sudarshan Jhavar,
Director, Devkrupa Realty (India) Pvt. Ltd.
VICE PRESIDENT, South
Shri R Chalapathi Rao,
Chief Convener, NAREDCO AP & Telangana
VICE PRESIDENT, West
Shri Rajan N Bandelkar
Director, Unnathi Estate (Raunak Group)
VICE PRESIDENT, NCR
Shri Parveen Jain
CMD, Tulip Infratech Pvt. Ltd.
Vice Chairman (RAJ REDCO)
Shri Ashok Patni
MEMBER FINANCE
Shri Rajesh Arora
MD, Arora& Associates Infradevelopers Pvt. Ltd.
DIRECTOR GENERAL
Brig. R R Singh
“Let there be Light, and there was light”
— Bible: Genesis 1:3
339 years of British East Indian Company rule followed
by The British Raj till August 15, 1947 further extended by
another 68 years of independent rule till August 15, 2015,
were the dark ages of the country that continued the obsolete British legal frame work even after the independence.
After 409 years of darkness, there is a light at the end of tunnel as India Awakes with the speed of technology to completely overhaul the system- 339 years of the British loot of
what was once the Golden Bird and 68 years of rampant
corruption that has eaten into the entrails of the country to
become a tradition.
Cover Story
The government has balanced out the ordinance by
including 13 so far excluded Acts under the Land
Acquisition Act. Rehabilitation, resettlement and
compensation provisions will be applicable for the 13
existing central pieces of legislation.
The Legal and Administrative
Framework
The British had created a strategic legal and
administrative framework for revenue and
tax collection to enrich the British Indian
Empire. Land Acquisition, Rent Control,
Stamp, Property, Taxation, Land Consolidation, Development, Roads, Highways, City
and Town development laws became archaic on British departure but were neither
repealed nor new acts enacted resulting in
rampant corruption due to discretionary
powers vested in the Government and the
Administration.
Expansion of Land Acquisition
Parameters
British Land Acquisition Act 1894
The UPA Government enacted Land Acquisition,
Rehabilitation and Resettlement Act 2013 (LARR)
only in 2013 to replace the
archaic British Act- it was
too little and too late.
The Right to Fair Compensation and Transparency
in Land Acquisition Rehabilitation and Resettlement
(Amendment) Bill 2015
will replace the ordinance
promulgated by the NDA
government on December
30 last year.
The Awakening
Despite the inherent negatives of British
Rule, there were three positive aspects that
unified India through –
1.Strong Armed Forces protecting the
borders with an efficient Police Force to
maintain law and order coupled with the
steel arm of administrative service (IAS)
extending from a Viceroy at the Center
and Governors at State to fully empowered Collectors (Deputy Commissioners)
to collect revenue and administer districts.
2.An Extensive Railway Network
3.A River linked canal irrigation system
6
National Realty | September 2015
The NDA government had introduced the
ordinance to make major changes in the existing LARR Act 2013. The restrictive nature
of the act was a major hindrance to development of Public Private Partnership Infrastructure, Projects and Residential Housing.
It has amended Section 10(A) of the Act to
expand in five sectors where assessment
and consent will not be required. So the
government will no longer need mandatory
80% consent for land acquisition in those
five sectors - national security, defense, rural infrastructure including electrification,
industrial corridors and housing for the
poor including PPP where ownership of
land continues to be vested with the government.
Progressive Act
The government has balanced out the ordinance by including 13 so far excluded Acts
under the Land Acquisition Act. Rehabilitation, resettlement and compensation provisions will be applicable for the 13 existing
central pieces of legislation. Till now land
could be acquired under these Acts and
there was no uniform central policy of rehabilitation and resettlement.
These Acts include the Coal Bearing Areas
Acquisition and Development Act 1957, the
National Highways Act 1956, Land Acquisition (Mines) Act 1885, Atomic Energy Act
1962, the Indian Tramways Act 1886, the
Railways Act 1989, the Ancient Monuments
and Archaeological Sites and Remains Act
1958, the Petroleum and Minerals Pipelines
(Acquisition of Right of User in Land) Act
1962 and the Damodar Valley Corporation
Act 1948. The Electricity Act 2003, Requisitioning and Acquisition of Immovable
Property Act 1952, the Resettlement of Displaced Persons (Land Acquisition) Act 1948
and the Metro Railways (Construction of
Works) Act 1978 are also brought under its
purview to provide higher compensation,
rehabilitation and resettlement benefits to
farmers whose land is being acquired.
An Act of Clarification
The government has given a message to
investors that it is trying its best to free up
procedural bottlenecks for infrastructure
investment in India to make Modi’s ambitious Make in India project a reality.
Modi- The Peace Maker Notifies 13 Points
Finding that a united opposition had wasted the time of the country the government
allowed its ordinance on the Land Acquisition Act on Aug 31, 2015 during PM Narendra Modi’s announcement in his Mann
ki Baat radio programme. Making a direct
appeal to farmers, the PM added that he
couldn’t allow anyone to create “fear” in
their minds on the matter.
Announcing that he had decided that the
ordinance on the Land Acquisition Bill
“should be allowed to expire”, Modi said,
“It means restoration of the situation that
prevailed before my government took
over”.
At the same time, he added, “13 points” in
the ordinance which are directly linked to
farmer benefit would be implemented from
Sunday by notifying them under the rules.
“We are doing this is so the farmers do not
lose” he said.
Salient Features of the Bill
•Applicable to both residential and commercial Real Estate
•Establishment of one or more Real Estate Regulatory Authority
in each state/ UT, or one authority for two or more states/UT.
•Appointment of one or more and adjudicating officers to settle
disputes and impose compensation and interest.
•Mandatory registration of projects and real estate agents with
RERA
•Mandatory public disclosure of all project details
•Promoter to disclose project details, adhere to approve plans and
specification
•Fulfill obligations in advertisement/ sale/ prospectus: rectify
structural defects and refund money in cases of default.
Compulsorily deposit 50% of the amount realizes in ESCROW within 15 days to
cover the cost of construction.
7
Cover Story
developers in Haryana have formed “Affordable
Housing Association of Haryana (AHAH)” under
the umbrella of REDCO Haryana
The PM stressed that the government has
an “open minded” on the land acquisition
Act. “I have repeatedly said that I am ready
to accept any suggestion in the interest of
farmers,” he said
Buyers- Developers- Government with bold
initiative by Deputy Commissioner, Gurgaon, heading the Gurgaon Arbitration Council (GAC) with Convener, Vice President
and Secretary General, REDCO Haryana as
its Ombudsman.
Regulating Realty
Gurgaon, the global city has emerged as the
financial, social and cultural capital of the
country due to the backup support and expertise of private sector teaming up with the
District Administration as a city state under the umbrella of REDCO Haryana. The
formation of Gurgaon Arbitration Council
(Ombudsman) breaks fresh ground in encouraging Public- Private Partnership by
liberating the private sector from the fear of
law in cases of dispute referred to the Council by the District Commissioner is providing a platform for rapid resolution of cases
at district level.
The Government has brought in Real Estate and (Regulation of Development) Act,
2013 (RERA) to regulate realty. It provides
for registration of projects on the website of
Regulating Authority and covers allottees
of properties to ensure that consumer interests are protected through speedy adjudication of disputes for orderly growth of real
estate sector.
The bill will boost domestic and foreign investment in the sector to achieve the objective of the Government of India to provide
Housing for All by 2022 through enhanced
private participation. The bill has been
stuck up in Rajya Sabha with opposition
recommending imprisonment for developers in case of default.
Dead Lock on Reforms
The government’s attempts to push through
Land Acquisition and Real Estate Regulation Bill through the monsoon session of the
Parliament have been stalled for the present. Despite coming close to a consensus on
Land Acquisition the select panel of the Joint
Committee on Land Bill has deferred finalizing its report till winter session of Parliament. Despite a majority in the Parliament,
the opposition has delayed the enactment
of New Laws to spur economic growth. Its
fallout has been activation of state government initiatives to resolve various disputes
clogging the courts including consumer
and punitive forums. Once, such initiative
by Haryana Government has the potential
of brining in transparency, trust and truth in
real estate industry facing growth squeeze
from all sides. The first innovative initiative
in India shall change the face of the housing
and construction country.
The Rise of Ombudsman
REDCO Haryana has a taken a lead in introducing the concept of consensus between
8
The Vision
Prime Minister Shri
Naredra Modi has
integrated 1.25 billion
Indians into Team India
racing to change the
face of Rural India into
Urban by 2022 through
Startup and Standup
India. It is on his recent
post independence visit
to UAE that he made of
statement of national
intent: Build a peaceful
globe by eliminating
terror through the
concept of One World
One Family on the
foundation of Awake
India rising across Asia,
Middle East to Europe
and Australasia- a
peaceful empire on
which the Sun will
never set.
The impact of the Gurgaon Arbitration
Council (Ombudsman) is both short and
long term. The speedy resolution of disputes
caught up in consumer and civil courts will
not only fulfill the Supreme Courts direction of clearing the clogged legal system but
also lead to a healthy respect for fair play in
global Gurgaon, one of the successful cities
in the race to meet the benchmark set by the
Government for a Smart City.
Affordable Housing for All
Before the last world war, rental housing
was the only solution for first time home
seekers moving into cities for employment
or becoming entrepreneurs. Both the government and private individuals built rental
homes for providing housing for all. In order to protect the interest of returning soldiers the government passed a temporary
War Rent Restriction Order that froze housing. For 66 years, successive governments
remained blind to the need of the people
and kept a large private sector housing
stock locked up vacant due to fear of losing
high value assets through “fair” or standard
rents fixed by them.
Haryana has brought about an Affordability
Housing Act that allows private individuals
to construct rental homes to accommodate
the large floating population thronging its
cities. This initiative will makes cities slum
free and unlock large housing stock for the
migrant and economically weaker sections
of society.
REDCO Haryana has taken a major initiative in forming the Affordable Housing Association of Haryana to give a boost to the
Government Mission of Housing for All by
2022.
24 licensed developers of Affordable Housing in Haryana have formed “Affordable
Housing Association of Haryana (AHAH)”
under the umbrella of REDCO Haryana,
the apex body of public and private sector
developers working in unison with RWAs,
Civil Society, Foundations and Trusts with
CM as the Chief Patron and DC Gurgaon as
the Chairman along with District Administration- MCG, Police Commissioner and
HUDA Administrator.
Their survey of Housing Market in Haryana
revealed that despite housing prices touching record levels, the disposable income of
the homebuyers is directed towards “Affordable Housing” as the preferred choice,
especially on account of Affordable Housing Policy 2013 of Haryana government.
Realizing that luxury and high end Housing Sector is facing oversupply amongst a
drying demand, the Association decided
unanimously to extend its whole hearted
support to the State’s Affordable Housing
Policy with certain essential course corrections based on analysis of the people’s
needs in order to make Haryana Number
One in the provision of affordable housing.
Haryana Government reduced the population density ratio from 850- 900 persons per
acre to 750ppa. Another amendment in the
policy is with regard to the draw of lots. A
developer can now hold a draw even if he
gets lesser applications that the required
number of 125%. Earlier, if 1,000 flats were
on offer under an affordable housing project, the developer must get 1,250 applications in order to hold a draw of lots.
While commenting on the new population
density norms, Navin Raheja, NAREDCO President, said though the new move
would certainly benefit buyers, the state
government could have done better by imposing a cap on the upper limit and not the
lower limit.
“Now developers would be able to offer
biggest flats in upscale areas. Buyers who
cannot afford above 1000 sq ft flats may
have to settle for affordable housing that
earlier offered 2-BHK flats measuring about
600 sq ft. However, the state government
could have done away with the upper limit
allowing the developer to construct even
more spacious flats for those who can afford
it,” Raheja added.
SMART CITIES
The greatest idea to shape the destiny of
India Awake has been the selection of 20
contenders for 100 smart cities. The selected
cities under the first 20 will set up Special
Purpose Vehicle (SPV) for their implementation. Thereafter, 40 cities will be selected
in two more rounds.
Smart City concept had originated in Europe to take their citizens to the pinnacle of
technological excellence through seamless
integration of homes into transportation
and communication hubs that blend human
needs into smart cities from their very inception.
India has made a break with the west and
broken new ground by combining the pent
up demand of affordable housing with the
emerging rapid transport systems, metro
rails, water supply, sanitation and power.
Unlike Europe, Indian smart cities have to
be employment generators; engines of economic growth and provider of shelter and
comfort to the millions engaged in building the New India of multimillions into a
smaller sub continent while it’s overflowing population of peaceful, honest and hard
working people inhabit all parts of world.
Chairman
Mr. Navin M Raheja
writes in News Hour,
“The biggest qualm
among the consumer
when talking about
the realty sector is
that they are often
duped and their
grievances mostly go
unheard. Well, there
isn’t much that you
can do against a real
estate developer if
he does not keep his
end of commitment.
You can always take
the case to the law
but fighting a case
isn’t very cheap these
days. You will have to
hire a good lawyer to
stand against them but
now there has been
alternate route to
solve the problems,
at least in Gurgaon,
with the setting up of
Gurgaon Arbitration
Council (GAC).”
9
Real Estate Trends for 2015
tive financial instruments to choose from.
Earlier, there weren’t any options as the equity market was not performing.”
FUTURE PERFECT
Real Estate Trends and
Expectations
be keen to buy houses.” The RBI governor
added that property prices need to fall
before interest rates on home loans come
down, any further. “I think we need the
market to clear. With growing unsold stock,
we need to see the ways to do it. Some of
it might be by making loans easier, but we
also don’t want to create a situation where
prices stay high at the level which means
demand can’t pick up,” he said.
Housing is the second largest industry that generates employment, after agriculture. With more than 300
linked industries like steel, transport,
construction, cement and brick, Real
Estate contributes significantly to
the country’s GDP share and capital
formation. National Housing Bank’s
(NHB) report places real estate as the
third most impactful industry in India
in terms of its effect on other industries and fourth in terms of employment generation. The real estate sector
employs more than 35 million people,
especially low and medium skilled labour and directly impacts manufacturing whilst attracting money in Foreign
Direct Investment (FDI). While the
first half of 2015 has been largely about
recovery with property markets, international agencies like IMF and World
Bank predict an increase in GDP.
10 National Realty | September 2015
The residential segment, comprising residential buildings, townships, schools, colleges and hospitals and other projects,
makes the maximum overall contribution in
the real estate industry and commands the
largest part of its market share. Real Estate
Website www.commonfloor.com believes
that the construction market is poised to
grow by 20 per cent between now and 2017.
Both large and specialised players stand to
benefit and gain equally. www.projectvendor.com projects a 10 to 15 per cent increase
in growth from FY14 to FY17 and 11 per
cent growth in FY15. Residential and commercial projects, organised retail will contribute to this growth significantly.
The residential real estate space in India is
divided into affordable housing, mid-level
priced houses and the luxury segment. The
onus on low cost housing is expected to put
pressure on the luxury segment, but this is
not significant. 2015 will focus more on recovery and clearing inventory, construction
deadlines and backlogs. Affordable price
points will lead to higher absorption levels.
Easing pressure on the rupee will also impact the industry positively.
Real Estate Investment Trusts (REITs) and
commercial real estate have made a huge
impact in 2015. An REIT is a trust that buys,
sells, develops and manages income-generating real estate property such as malls,
commercial office spaces and more, with
the main intention of attracting investors
who can manage an interesting array of
properties. Corporate investors benefit from
tax exemptions. It largely impacts small investors and encourages proper investment
channels in large real estate accounts, and
is a better alternative to investing in stock,
due to its higher returns and a diversified
portfolio of investments.
The Governor of Reserve Bank of India
(RBI), Mr Raghuram Rajan recently said, “It
would be a “great help” if realty developers
sitting on unsold stock bring down prices…
Once the prices stabilise, more people will
Reserve Bank of India’s data of June 2015
shows that the total amount of home loans
given by banks grew by 15.6 percent to Rs
6,53,400 crore, over the last one year. In
comparison, the overall lending by banks
grew by just 7.3 percent. RBI Governor
Rajan believes that real estate companies
and others associated with the sector who
demand interest rate cuts must first ensure
that home prices fall because even at high
interest rates home loans given by banks
continue to grow at a very brisk pace. Banks
have given out Rs 88,400 crore of home
loans in the last one year and yet this has
not affected the inventory of unsold homes
due to high prices. Governor Rajan believes
that the only way this situation can be corrected is if home prices fall.
The Real estate market
is driven largely by
sentiment. Most Realty
gurus have been
predicting positive
recovery trends for
2015 due to a number of
factors.
Baijal also believes that, “If you look at investor demand, property is not their primary
choice anymore. This is due to muted price
appreciation, high level of unsold inventory,
and the fact that there are other more lucra-
According to the National Housing Bank
(NHB) Residex Index, the first half of 2014
saw property prices dip as high inflation
and a weak rupee had a negative impact on
spending, but residential property prices
indicated an upward trend in the second
half of 2014 leading Colliers Research to
believe that Bangalore and Chennai witnessed maximum demand and growth,
while Kolkata, Mumbai and Gurgaon were
unchanged. Despite this, many developers
launched new projects during the end of
2014. 2014 has seen delays in approvals,
project clearances and targets, apart from
debt commitment on property and government spending less in this area and a
huge delay in finishing projects while the
construction industry has grown 2 per cent
from 2014 to 2015.
The Real estate market is driven largely by
sentiment. Most Realty gurus have been
predicting positive recovery trends for 2015
due to a number of factors. For one, the RBI
has reduced interest rates and this will see
more spending in the residential real estate
segment. The Ministry of Statistics Program
and Implementation and PwC Analysis had
predicted a growth of 8 to 9 per cent. Added
to this, the introduction of REITs, improved
market sentiment and more efforts by the
government to reduce project loopholes
and bottlenecks in transactions will go a
long way in clearing the way forward.
Shishir Baijal, chairman and managing director of Knight Frank India, a real estate
consultancy in an interview with Mint
shared, “Theoretically, if prices come down,
perhaps the demand can increase. But I’m
not sure if developers have any leeway left
now for reducing prices. This is because input cost has increased quite a lot over the
past few years— be it cost of labour, construction and material, or even the historical cost of land itself, which is very high. It
does not look like there is any scope left for
a serious correction in prices.”
National Realty | September 2015 11
Infrastructure Special
• Land prices are higher if a land parcel is
located within walking distance, but not
directly next to the station. The increase
in the land values is reflected in the area
served, especially around the stations
Metro Rail
An Unmatched
Real Estate Catalyst
While Metro rail implementation has a
huge impact on real estate prices along its
corridor and ‘influence zone’, in the larger
context it improves the standard of living of
a large segment of urban population, and is
also a catalyst for sustainable development
across large urban areas. by A. Shankar
In India, it is indubitably Metro time. Year
2015 saw the unveiling of metro rails in
Chennai and Jaipur, along with the expansion of Metro lines in Delhi and Bangalore.
Currently, there are 7 operational metro systems in India. Kolkata was the first city to be
blessed with a metro rail in 1984, followed
by Delhi in 1995. The success stories of Kolkata and Delhi paved the way for metro
in others cities such as Bangalore (2011),
Gurgaon (2013), Mumbai (2014) and Jaipur
(2015).
These cities show a uniformly positive
change after the implementation of metros
along their metro corridors. The deployment of a Metro directly impacts real estate
through increase in land value, land use
change and densification along the Metro
corridor. International case studies prove
that mass transit systems such as Metros
and monorails contribute significantly to
solving traffic problems. Such projects also
result in increased urban real estate values,
since consumers are willing to pay more for
the convenience.
Real Estate Impact of Metros
The impact of a Metro on real estate along its
corridor is direct and powerful. Of course,
retail or commercial areas benefit due to
improved accessibility, but residential areas
receive a dual demand driver - the Metro
generates jobs which result in increased demand for homes, and the reduced commuting costs and convenience draw buyers to
areas close to the Metro.
• In areas closest the stations, the visible
impact is higher on commercial property
values than on residential values, and the
effect diminishes as the distance from the
station increases
• There is a considerable increase in demand of retail and office spaces around
existing metro stations.
• Most commercial properties near Metros
result from the conversion of standalone
residential units to apartments, mixed
use properties to commercial use and
new development on vacant land.
Land values are inversely related to the distance of land parcels from the metro station.
Ordinarily, land values decrease along with
the distance from Metro stations. Technically, a Metro exerts an influence buffer of
up to 1 km radius, with the maximum influence being within 500 meters. Typically
in a city, the market value of properties will
increase by more than 50% over the prevalent values after the launch of metro rail,
depending upon the location, land use, and
the micro-market’s overall potential.
The population density of nearby residential areas will increase after the launch of
a Metro because of proximity preference,
along with the increases demand for retail
and office spaces. There will simultaneously
be a steep increase of new developments in
the abutting vacant land or open spaces, as
the developers will seek to capitalize on the
profit implications of higher developments
that can result from additional FSI, if this is
applicable. A constant rise in the land prices
in the proximate areas is usually seen during all project stages.+
Regulatory Changes To
Accommodate Metros
development will crop up on the heels of
the higher rentals assured by the increased
connectivity. Given the influence zone of
800-1000 meters from the Metro stations,
the land use for this zone must be properly mapped in order to maintain a balance.
Residential to commercial land use conversion will invariably be most prominent, as
commercial spaces will fetch higher rentals.
JLL Property Consultants have worked on
various assignments with Metro authorities
across the globe and in India to analyse the
impact of Metros on the respective property
markets, including benchmarking property
values.
Case Study: Chennai Metro
The now operational Chennai Metro network has been planned in a manner
which integrates it with other forms of public transport, including buses, suburban trains and MRTS. The enhancement and easement of connectivity has
had a huge impact on real estate prices along the Metro corridor. With the
amplified connectivity of Chennai’s suburbs to the city centre, more and more
property buyers are considering settling down in the suburbs, away from the
busy city and yet enjoying rapid connectivity to their workplace in the Central
Business District (CBD).
Real estate demand along the Chennai’s suburbs saw a significant increase,
and this prompted developers to unleash a number of new launches in these
areas. North Chennai, which hitherto had limited real estate prospects, is now
seeing the green shoots of growth after the Metro connected it to other parts
of the city. The Metro is now expected to find solutions for unsold real estate
inventories, resale and unoccupied commercial and retail spaces.
It will also restore the lost prominence of micro markets such as Anna Salai,
which was the city’s earlier entertainment and business hub. The existing developments and infrastructure at Anna Salai had not been able to cater to latterday demand, but will now doubtlessly see a lot of commercial redevelopment
as a result of the easy access provided by the Metro.
Since the Metro’s announcement in 2009, Chennai has witnessed steady real
estate price increases, especially along the Metro corridor. Prices near the
Metro station have already reached Rs. 7000–16000/sq.ft. and are expected
to increase further about 15% now that the Metro is operational. Residential
rentals will rise as more of the population moves closer to the Metro to benefit
from the faster and cheaper transport. If feeder services are strengthened, this
impact will amplify out to a radius of 4-5 km from the Metro stations.
There will invariably be regulatory changes
taking shape after a Metro is put in place.
To address the needs of urbanisation in the
Metro areas, the government usually addresses the specific needs of housing development by granting extra FSI (Floor Space
Index) along the corridor. This increased
FSI will reflect in increased prices for land
along the Metro corridor, and automatically
lead to increased population density near
the Metro station.
Likewise, home buyers are also attracted by the reduced commuting time to
work, and this will lead to a significant rise in sales and increased capital values near the Metro stations. The return on investment is considerable, given
that home buyers are willing to pay a premium for residential units situated
close to public transit systems like the Metro.
Needless to say, this imposes stress on the
existing infrastructure available in the region, which the government must tackle
along with the Metro development. In order to control development along the metro
corridor, land usage needs to be revised
– failing which unorganised commercial
•Higher productivity and savings across the system
Overall benefits of a Metro:
•Saving on travel time
•High service availability, reliability and quality
•De-congestion
While Metro rail implementation has a huge impact on real estate prices along
its corridor and the influence zone, in the larger context it improves the standard of living of a large segment of urban population, and is also a catalyst for
sustainable development across large urban areas.
Why Roads Boost
Real Estate
Growth
improved road connectivity is very important for
real estate growth. Most property brokers will
make a big case out of an area’s excellent road
network and how this improves the appreciation
value of a proposed property. But how exactly does
this phenomenon work?
What is the real ‘connection’ between better roads
and better real estate values? by anil Pharande
The History of ‘Road Power’
Infrastructure is the key to growth for
real estate - and the cornerstone of infrastructure is roads. The importance of
roads to human being is vouchsafed by
how long they have been around. The
oldest paved road in recorded history
was made sometime between 2600-2200
BC in Egypt; but it was the Roman Empire which brought out the fullest potential of roads traversable by wheeled,
horse-powered carriages.
Circa 312 BC, the Roman Empire built
stone roads throughout Europe and
North Africa to aid its military campaigns. At the height of their power, the
Romans had built 78,000 kilometers of
roads that led to and from Rome. History is witness to what the Roman Empire achieved by connecting the parts of
the world that were important to them
to their seat of power.
However, it was only much later that
‘road power’ could begin to be fully
exploited. It was, in fact, only in 1768
that the French inventor Nicolas-Joseph
Cugnot built the first steam-powered
automobile capable of human transportation. Ever since then, roads have
emerged as the master key that unlocks
all urban potential in the modern world.
Fast Forward to Today
It is safe to say that real estate development
as we know it is impossible without adequate road networks. In the first place, they
are required to transport construction materials and manpower to sites. Thereafter,
people need roads to be able to travel to the
newly developed locations. However, the
basic roads that are initially used to ‘open
up’ and area usually fall short of the task of
really making it prosper. High volumes of
traffic require larger, better-planned roads
to accommodate it, and it often emerges
that existing distances between locations
can be significantly reduced by laying new
roads altogether.
In the city of Pune, one recent example of
the introduction of a new major road can cut
down the distance that needs to be travelled
between destinations was the Spine Road in
the Pimpri-Chinchwad Municipal Corporation (PCMC). The launch of this important
piece of infrastructure had a direct and very
beneficial effect on residents in all the areas it
influences. It connects two major highways,
provides access focus for various residential, commercial and industrial centres and
is the longest stand-alone road in the region.
Spine Road has significantly relieved traffic
congestion on internal roads - it has six lanes
with cycle tracks, service roads and even
parking facilities.
How Roads Improve Urban Life
Time Saved = Improved Lifestyle: With the
shorter distances achieved by well-planned
and strategically laid new roads, people
can choose to not use their fuel-guzzling
cars and travel to and from work by public transport or two wheelers instead. Apart
from improving the quality of lives, this
also decreases noise and air pollution in residential areas. Improved road connectivity
also improves the overall safety of a neighbourhood, because emergency services like
law enforcement and fire brigades can reach
there faster. Residents also have quicker access to hospitals, which often makes the difference between life and death.
Obviously, infrastructure initiatives like the
Spine Road in PCMC are a major advantage
to employees working in the area’s numerous manufacturing and service industries.
In Indian cities, the amount of time it takes
to get to and from one’s workplace literally
makes or breaks residential locations. Also,
because residents of well-connected localities can reach and return from their workplaces faster, they have more time to spend
with their families. The same fundamental
works for school-going children, as well.
Considerable Savings On Fuel: Everincreasing fuel prices were once a concern
only to the middle class, but they are today
even the more affluent classes are feeling
the heat. In India, electric cars that can meet
the travel requirements of a normal-sized
family are still a distant dream. Like it or
not, we continue to depend on fossil fueldriven vehicles.
A normal middle class family can save quite
a lot on its monthly fuel expenses when a
new road improves overall connectivity in
their locality. Communities which live in
areas without good road connectivity often spend between 10-15% of their monthly
income on transportation alone. The figure
rises proportionately to the number of vehicles the family operates.
The Health ‘Connection’: Reduced travel
time also equals a lower chance of commuting-related physical ailments and stress levels. When people have to travel over longer
distances daily, the time in which they are
exposed to traffic pollution and extreme
climate increases proportionately. Several
serious health problems such as deep vein
thrombosis and lung infections have been
directly linked to regular, long automobile
travel.
By the same coin, road rage and reckless
driving also often the direct by-product of
traffic congestion caused by insufficient
road linkages. Also, improved road connectivity leading to significantly shorter travel
distances makes it possible for people to opt
for health-positive travel modes such as bicycles.
The Real Estate
‘Connection’
For all the above reasons, improved road
connectivity has a
massive impact on real
estate prices of a location. There is always
higher demand for
homes in well-connected areas, because they
are more accessible,
safer, healthier and
cheaper to live in.
Green Districts
Building the Suburbs
of the Future
The way the world is being built now will
determine how human civilization will
deal with natural resource management,
waste management and sustainability in
the near future. by Arvind Jain
By 2025, the world would
have added another 65 million inhabitants, each fighting for their share of livable
space. Global governments
are already working on
building infrastructures that
would support the growing populations every year.
In fact, by 2025 India will
need to add the equivalent
of a city the size of Chicago
to its existing floor space to
support the growth in population – and China’s population is growing at twice that
rate. Sustainable
Development It is evident that the concept of sustainability will have to transcend its current confines. No longer can we talk merely of green
homes as the answer to all our urbanization
woes. No doubt, green homes projects are
pockets of excellence, but their positive impact at a city level is minimal at best. In India, where unregulated urbanization
has created serious deficits at all levels,
green districts are a viable solution. These
districts are all about taking the concept of
environmental sustainability and sustainable real estate development beyond green
homes and sustainable townships, and to
create entire new suburbs that function on
those lines. 16 National Realty | September 2015
New Suburbs As
Miniature ‘Smart Cities’
The Modi government’s Smart Cities program is a clear indicator that the need for
more sustainable urbanization has been
recognized. However, the current scramble
among various cities to qualify under this
program indicates that its primary message
has still not been understood. It is not about
winning the race to win the prize – it is
about making a concerted effort to improve
the way our cities are run – about making
them more livable and future-ready. Regardless of the Smart Cities movement,
it is possible for cities to create their own
green districts – large urban areas where
the normal flow of development has been
reinvented and redirected so as to create an
oasis of sustainability. In fact, green districts
are the requisite building blocks of future
cities all over the world. So what exactly are
they?
Green Districts
Green districts are urban areas which not
only allow sufficient floor space to the increasing population density but also employ design elements and techniques that
minimize pollution and the exploitation of
natural resources. Overall, green districts
integrate design principles that will support
a transit-oriented, dense and mixed development that considers renewable energy as
a means of power production. While this looks good on paper, the concept in fact requires a great deal of agility
and fine-tuning – green districts need to be
small enough to innovate quickly but big
enough to have an impact. The ideal geographical size of a green district is, in fact,
that of a newly emerging suburb in a city
like Pune. Below are some of the reasons why green
districts will become indispensable in the
near future:
yy Economic Viability
Green solutions are not necessarily achieved
at lower costs than the conventional alternatives - in fact, it is no secret that green
residential projects involve a significantly
higher cost to developer. This is also true
to green districts, wherein the construction cost of everything from residential and
commercial spaces to support infrastructure would be higher by 10%. However, this cost if justified by a lower
annual operating costs. Within three to five
years – which is the period it takes for most
new suburbs to attain functional viability green districts can ‘break even’ on the cost
of creating them. The true value of green districts is in the
massive positive impact that that they have
in terms of improved environmental quality, urban climate and matchless investment
opportunities. As long as they are planned
intelligently from the ground up and incorporate the right technologies, green districts
are by far the most economically viable urban configurations. yy ‘Repaired’ Environment
Green districts follow construction practices that reduce a suburban area’s energy
consumption by as much as about 20–50%,
while simultaneously rationalizing water
consumption by 50-60%. Further, green
districts generate 25% less solid wastes,
making the available land more viable for
both farming and living and reducing the
dependence on environmentally destructive landfills.
yy Improved Quality Of Life
A gentler natural environment automatically equals more comfortable, healthy and
wholesome living space for humans. Conventional cities grow to become congested,
which inevitably leads to increased cost
of living and pollution. Green districts are
therefore an important tool for the revitalization of our urban spaces.
Solar
Power
A Homebuyer’s
Perspective
Solar power promises to change the way
electricity is generated in the country, and it
has an impact on the real estate sector as well.
by Ashwinder Raj Singh
With Mr. Narendra Modi raising the
target of solar electricity generation
from 20,000MW to 100,000MW by
2022 at a cost of $100 billion, the market for everything solar has suddenly
come to life. As pollution and the rising cost of power hits the consumer,
more and more people are becoming
attuned to living a ‘green’ life. Keeping this in mind, many upcoming residential projects in cities across India
are using solar power as their primary
energy source. Homeowners can also
install their own solar panel-based
systems to benefit from this technology if it has not been installed a project level.
Tips For Homebuyers
Calculate the cost
of solar power generation and compare it
with energy rates of
the utility company in
the area.
Ensure that branded
and high-quality solar
panels are installed
at non-shadowy place,
and that there is a
proper maintenance
schedule
If battery-supported
panels are used, ensure
that the distance between panel and battery is low, as energy is
lost with longer distances. It is beneficial
to have solar powered
batteries for best results.
Ask about the expected
life of the solar panels, and the warranty
given on the system.
Solar Systems For Individual
Homes
Firstly, a buyer has to decide what his energy requirements are based on electrical equipment in use in the house. A solar
system is good enough for major electrical
appliances except for water heaters and air
conditioners, for which separate, highercapacity solar panels are available. A solar
panel works best on a flat terrace, rather
than on slanting surfaces. To access maximum sunlight, the panel should be placed
away from shadows.
Cost of Installation and
Maintenance
Even though the upfront cost of installing a
solar system is on the higher side, it pays off
in the long run and eventually proves economical compared to conventional means
of power. A roof-top solar system will cost
approximately Rs. 1 lakh per KW (this
cost is excluding the cost of batteries) before various incentives offered by different
states and electricity boards. It has a life of
25 years and will deliver 90% efficiency in
the first 10 years of installation, and about
80% from years 11-25. Batteries account for
almost 30% to the cost of the total system.
To generate 2000 watts of electricity, one
would need around 200 sq. ft. of space on
the terrace. As far as maintenance is concerned, the only cost incurred in a good
quality solar system is that of changing the
battery, if it is a battery-supported panel.
Otherwise, the solar panels are totally
maintenance-free except for regular cleaning to remove dust, bird droppings, etc.
The other components of the system - inverter, wires, etc. should be of top quality, as
lower quality will lead to faster wearing out
and add on to the maintenance cost. For inverters, the best option is a pure sine wave
model. This is slightly more expensive, but
very efficient and long-lasting.
Capitalizing On Subsidies
Since the cost of batteries is prohibitive,
various state governments and electricity
boards are offering subsidies along with
special deals. Any surplus power that a
residential solar panel generates can be
sold back to the government-operated grid
at good prices. For example: if the building’s requirement is 5 units of power and
the solar panel generates 7 units, the extra 2
units can be sold back to the grid. On rainy
our cloudy days, if only 4 units are generated, the additionally required 1 unit can be
sourced from the grid, which is chargeable.
However, at the end of the month, if the net
outage of power towards the grid is more
than inflow, the society or individual home
owner stand to make a profit.
Performance So Far
Gujarat has taken the lead in solar power
generation, and is ahead of all other states
with a commissioned capacity of 929MW,
followed by Rajasthan at 840MW generation.
Madhya Pradesh, Maharashtra, Karnataka,
Punjab and Haryana are now coming out
with very aggressive solar power policies focusing on not only giving massive subsidies
of as much as 30% on installation, but also
attractive buyback offers on power.
Going forward, solar power is going to
make a decisive change in consumers’ strategies for buying homes. For developers,
it has become imperative to include solar
power generation as part of their project
cost, and to install the best possible systems
to attract potential clients who are willing
to pay a bit extra for living in environmentfriendly homes.
meanings in different cities. For instance,
the most reputed developer brands in a city
like Mumbai also have the biggest price
tags. Quality construction in their projects is
assured, but so are ruinous property costs.
In Pune, a developer’s brand evolves more
on a reputation for consistently high quality
in offered amenities and construction. Such
a reputation spreads quickly by word of
mouth and becomes a benchmark for overall value and quality. Because their reputation for quality construction is their primary
ambassador in a very competitive market,
branded builders employ only trusted contractors and ensure proper quality control
throughout the construction process.
What Does It Really Mean?
Banks do only a cursory check on a project’s overall construction
quality while evaluating a home loan proposal. It has become a common
marketing practice for developers to claim that their projects are of
high-grade construction. by Kishor Pate
Today, one of the factors one looks for while
buying a home is quality construction. A
home buyer wants to ensure that the home
will:
• Be safe and sound for its inhabitants
• Usable for a maximum possible amount
of years
• Will not develop problems over time
• Have good resale value if one decides to
sell it
These are aspects which are next to impossible to judge when a residential project is
new or only a couple of years old. Naturally,
most property developers will ensure that
everything looks ship-shape on the surface
even if they do not necessarily follow quality construction norms.
Even on the resale market, we will find that
the current owners of a resale flat will undertake cosmetic touch-ups to make their
home look as new and unflawed as possible. Banks do only a cursory check on a
project’s overall construction quality while
evaluating a home loan proposal. It has become a common marketing practice for developers to claim that their projects are of
high-grade construction.
Because of this, they will often develop
these projects at the lowest possible cost
because their greatest expense lies in the
purchase of the plot. The situation is not as
severe in smaller cities like Pune. Commuting distances are smaller, which means that
home owners manage to reach workplaces,
shopping outlets, healthcare facilities and
places for family entertainment faster.
Those who do so without justification
are aware that most home buyers are not
equipped to make a value judgment on such
claims. Home buyers often select properties
on the basis of location advantages such as
availability of public transport, shopping
and hospitals. In larger cities like Mumbai
and Delhi NCR, plots in such locations are
quickly snapped up by developers because
they know that the location itself will sell
their projects.
This is one of the primary reasons why
land costs – and therefore finished property
costs – in smaller cities are more rational.
However, many developers try to cut costs
wherever possible, so there is still a high incidence of inferior construction going on in
cities like Pune.
How to Judge Construction Quality
To begin with, a developer’s brand is a fairly good indicator. Brand value has different
In other words, a builder’s brand status in
a city like Pune is a reasonably good guideline to follow. This holds true in new constructions by such a builder as well as resale
properties in his projects. The most important hallmark of quality construction is that
it endures.
There are various ways in which a home
buyer can check on the general quality of
construction:
From the point of view
of personal use of a
flat for occupancy,
quality construction
ensures that the owner
will incur much lower
maintenance and repair
costs and enjoy its
security and comfort
for much longer.
structure is evenly and scientifically distributed. Also, a developer focused on quality
will not spare costs when it comes to providing detailed finishing and intricate detailing, both in the building’s common areas
and within the residential units themselves.
FIXTURES
Patched cracks in a building’s exterior can
be an indicator that the project has a faulty
foundation. Other signs to look for are
small cracks in walls of a flat, creaking or
sticking doors and windows and improperly aligned or uneven floor, bathroom and
kitchen tiles.
Developers who pride themselves for quality construction do not allow their contractors to use cheap taps, window frames, door
handles, electrical outlets and fittings. Likewise, common facilities such as lifts will be
by established manufacturing brands and
will be under a maintenance contract by a
reputed facilities management agency. Any
evidence of obscure, unfamiliar brands
should be viewed with suspicion.
DESIGN
PAINT
A quality construction project is designed
in such a way that the weight of the overall
Cheap paint on walls and doors is easy to
detect. Good paint on walls and wooden
FOUNDATION
surfaces not only enhances their visual appeal but also prolongs the life of these surfaces. If one finds that cheap paint has been
used, this is evidence that the developer does
not feel that investing in good paint makes
sense because the surfaces themselves are
not made to last.
CONCRETE QUALITY
The quality of the concrete used in a building depends on what grade of concrete has
been used, what the concrete/sand ratio is
and whether the concrete was allowed to
cure for a sufficient amount of time. One rule
of thumb is that it should not be too easy to
drive a nail into the walls.
OPEN AREAS AND
LANDSCAPING
Though it may not be immediately obvious, the presence of sufficient open areas
and landscaping has a symbiotic significance with relation to construction quality.
The availability of open areas implies that
the builder has not made filling every available square foot with sellable construction,
and that he intends to provide a wholesome
and pleasing experience to his customers.
Similarly, aesthetically done landscaping
indicates that the buildings in a project are
built to last and deliver value for the longest
possible time.
The True Value Of
The average life-span of a project that has
been built on quality construction parameters is around 80 years. After this period, a
project will usually come up for reconstruction. It should be remembered that the true
investment value of a residential unit such
as a flat does not actually lie in the flat itself,
but in the flat owner’s share of the land that
the building occupies.
In other words, it is the undivided land portion of the investment that one has made in a
flat that amounts to the actual value of one’s
investment. However, in real estate market
terms, the longevity of a building is very
much linked to how much it will fetch on the
resale market, or how long an investor can
derive rental income from it. From the point
of view of personal use of a flat for occupancy, quality construction ensures that the
owner will incur much lower maintenance
and repair costs and enjoy its security and
comfort for much longer.
Governments and municipalities across the world are waging a war against illegal
constructions over a decade now. This has been a global phenomenon, crippling
cities and compromising their logical growth. Urban development is not just
about high rise constructions but a painstaking planning. Open spaces and revised
construction are a part of this planning and thus countries like India have been
investing in demolitions as a planning tool.
However, illegal constructions continue to
cripple roads, public spaces and other amenities. Successful urban planning in India
will only have a future when it is complemented by efforts to educate the masses
about its importance. Real estate buyers
need to know how illegal constructions impact regional planning and development –
and them personally. More awareness would lead to greater due
diligence at a consumer level. We have nation-wide campaigns about the evils of tobacco use – can such efforts not be put into
creating greater awareness about this social
evil?
Illegal
Construction
Paralyzes Cities
The rapid and uncontrolled growth of population has led
million in this globe to opt for slums. In any developing
city, it is not unusual to find anything between 30-60% of
the population living in slums or otherwise unauthorized
spaces. Since these constructions aren’t regularized, they
don’t enjoy the amenities of piped water, storm drainage,
sewers, roads, electricity, public transportation or
healthcare. by Kishor Pate
It is tempting to say that education of developers is equally important; that if more real
estate developers understood the deeper
rationale of urban planning, they would
be far less likely to violate municipal codes
and standards. However, if we look at the
problem of illegal construction in India, it
is evident that the root cause is developers
who just couldn’t care less. Even where efforts are undertaken to publicly explain the desirability of planning, some
developers will inevitably disregard the law
purely for financial benefits. Illegal construction is done knowingly, simply to extract financial profits from the construction. The main reason why illegal construction is
so profitable to unscrupulous developers is
that there is a population explosion which
needs to be solved by housing. Where illegal constructions grow alongside legal constructions, urban areas soon become wastelands of mismanagement and pollution. Illegal constructions start with four walls
and a ceiling, but soon take the form of high
rise building, attracting more renters. They
are often seen coming up in peripheral areas and even in premises of public utility
like parks, near highways, streets, com-
munity centers, etc. These buildings are
constructed without the inputs of licensed
engineers and architects. Failing any safety
codes, these are also the first buildings to be
affected by climatic upheavals. Also, legal
constructions beside these buildings are at
a risk, both physically and socially.
The Government of India has historically
had a passive or even tolerant attitude towards such constructions. This has resulted
in several problems in areas beset by illegal
buildings, including:
• Absence of housing-related public services such as water and sanitation
• The haphazard distribution of such ille-
gal structures makes it extremely costly
for municipalities to provide water, sewage facilities and roads even if they are
‘regularized’
• The residents of such areas and buildings
are not eligible for loans improve their
homes or to expand business that they
run from them, since banks will not accept illegal structures as collateral
• In the case of multi-level residential
buildings, buyers can lose their entire
investments – often their life savings -if
the building is found to be illegal and demolished
It is only in the last decade or so that India’s
state governments have been waking up to
the hazards put forth by these illegal constructions. Some use demolition and others
(unable to handle the pressure) regularize
them in exchange of a fee. Poverty certainly plays an undeniable role
in illegal construction and accommodations.
However, the more relevant cause is the
profit motive of unscrupulous developers.
Illegal buildings are already hijacking the future of our cities. It is high time that the state
and central governments takes the strongest
possible measures to curb this menace.
NAREDCO
Integrated Townships
If we look at how configurations like villages work, then it emerges that
Indians have been living in integrated residential communities
for a very long time indeed. by Ashwinder Raj Singh
While the concept of integrated
township living is still something
of a novelty in India, the concept
of living in integrated residential
communities is definitely not. If
we look at how configurations
like villages work, then it emerges that Indians have been living
in integrated residential communities for a very long time indeed.
Of course, integrated townships
are a far more specialized and sophisticated real estate model - and
one which is becoming a very important one for various reasons.
For all those who have been living in cities
like Pune and Mumbai, the fact that urban
life can and does become rather disconnected is not news. Since most developers will
build residential projects on whatever small
land parcels are available, neighbourhoods
are created in a very unplanned and uninspiring manner and their residents wind up
living in small, isolated pockets which are
often quite far from day-to-day conveniences and essentials such as shopping centres,
schools and hospitals.
At the same time, people are thrown together on the basis of their household budgets,
which is basically what decides what kinds
of homes they can buy. Those who opt for
staying on rent are often transient families
which do not add to the neighbourhood.
Creating a sense of neighbourhood and
community under such circumstances is
very challenging - and because people also
have the stresses of their daily work life to
tackle, they tend ignore what neighbours
they have altogether.
The unfortunate fact that emerges is that
people can buy homes, but not a sense of
community. Integrated townships, on the
other hand, bring the best elements of a
village back to urban dwellers. They are
distinct and cohesive neighbourhoods
within people can reside with a comforting
sense of certainty and predictability. People
who buy homes in integrated townships
are not merely investing in an orphaned,
anonymous set of walls somewhere in the
city - which is basically all that one can expect from most residential projects in India
today.
Township residents become members of a
self-sufficient residential microcosm which
operates on proven fundamentals of social
integration and living convenience. They
enjoy all the benefits of a comfortable and
secure lifestyle with the additional benefit
of social ‘connectivity’ that derives from
like-minded people who are willing to invest that extra bit for their families living in
harmoniously balanced neighbourhoods.
The fact that schools, shopping, healthcare
and public transport are readily available
and accessible goes a long way in reducing stress and increasing the willingness
and scope for healthy social interaction.
Likewise, not having to contend with water
supply issues and power outages makes for
more relaxed and happier neighbourhoods.
And since integrated townships also offer
parks, gardens and other places for people
to meet and interact in, the stage is set for a
way of life which most city dwellers in India have bid goodbye to long ago. In a very
definite way, integrated townships have
brought the village back in the best possible way - by allowing people to enjoy the
benefits of community living against a zerostress backdrop.
36th NAREDCO-HSMI
Collaborative Course on
“Real Estate Management”
by Neeraj Bajpai
NAREDCO started its 36th Certificate course
in real estate management for real estate
agents, sales persons and commercial & customer care executives on 11th August, 2015.
This course is a collaborative initiative of
NAREDCO, HSMI of HUDCO and Guru Govind Singh Indraprastha University (School
of Management) with the objective to impart
specialized knowledge and skills about real
estate property market and its operation in
India context together with Govt. policies
and legal & regulatory issues. Over seven
years, NAREDCO has successfully conducted 35 such certificate courses and certified
over 1250 candidates have benefited.
Dr. M. Ravi Kanth, CMD, HUDCO, Shri
Navin M. Raheja, Chairman, NAREDCO and
Prof. A.K. Saini from School of Management
A practical course
to self assess
capabilities inspires
participants
for a career in
the Housing and
Construction
Industry.
of GGSIPU, amongst others, addressed the
participants in the opening session on 1th
August 2015. The certificate course for 40
Hrs, spread over to 3 weeks will be concluded on 28th August 2015, with distribution of
certificates issued by NAREDCO, HSMI &
GGSIPU. The innovative training took the
participants through an interactive session
on a journey of regulation with an in depth
look in to Affordable Housing and dispute
resolution.
Col. Prithvi Nath, who has also been one of
the founders of the program, commenced
and concluded the course with a presentation on Regulating and Ethics in Realty.
Participants also learned the importance of
working in groups to understand all aspects
of realty in a practical manner.
Maharashtra Special
The Birth of
New Pune
As Narendra Modi had correctly identified long before he became Prime Minister,
infrastructure is the backbone of any modern city. Without the benefit of steady
infrastructure building and up gradation, a city will eventually not be able to
match up to the needs of its growing population. This is precisely what has been
happening in the Pune Municipal Corporation, which has not had the benefit
of planned, logical development. by Arvind Jain
A few decades ago, the question of
where to live in the Pune Metropolitan Region had only one rational answer - in Pune, and as close to core
areas like Kothrud or Sadashiv Peth
as possible. The Pune Municipal Corporation or Pune Mahanagar Palika,
established in 1950, controlled (and
continues to control) the whole administration of Pune City. As such,
the kind of civic infrastructure and
amenities that made life tolerable anywhere in the city were provided by the
PMC. There was no Plan 2 - people
could either live within PMC limits
and get the basic experience of urban
life, or choose to live somewhere outside the PMC limits and put up with
considerable hardships.
Though the neighbouring Pimpri-Chinchwad Municipal Corporation (PCMC) was
formed way back in 1970, it was initially
not seen as a serious alternative for Punekars. In earlier years, the PCMC was developed primarily as an industrial area whose
focal point was the Maharashtra Industrial
Development Corporation (MIDC). In the
first place, the persistent ‘industrial area’
tag was quite unappealing to residents of
Pune - and to be sure, the PCMC did not
have much to offer. It was a ‘C’ class municipality, with everything that this classification implied more or less reflecting on the
ground in the PCMC’s residential areas.
All this changed when the Pimpri Chinchwad New Township Development Authority (PCNTDA) was formed in 1972, and
charged with the responsibility of developing the areas towards the north of the Pune
Metropolitan Region. This marked the birth
of Pimpri Chinchwad New Town, where
residential and commercial spaces were
planned and developed according to a predetermined blueprint.
The effects on the urban fabric of the region were profound and almost immediate.
In 1975, the Pimpri-Chinchwad Municipal Corporation was upgraded from a ‘C’
class to an ‘A’ class municipality. Today, it
is the most prosperous municipal corporations in Maharashtra, and is seeing a very
rapid growth to the tune of 6% annually.
The PCMC has also emerged as a far more
desirable region to live in than the Pune
Municipal Corporation. This is primarily
because everything that makes life easier
Today, for
all practical
purposes, PCMC
is the New Pune
- the city for
contemporary
Punekars to work,
live and raise a
family in.
in a city - such as water and electricity supply, roads, green open spaces and safety - is
more abundantly available in the PCMC.
Furthermore, the most vibrant employment
hubs of the Pune Metropolitan Region - its
automobile and manufacturing industries
as well as the Hinjewadi IT Park - are situated in the PCMC. It is far more convenient
for people working in these establishments
to live close to their workplaces than far off
in the primary city. Living close to work
also means that they can reach there by
public transport, which is also far superior
in the PCMC - both in terms of quality and
reliability. This, coupled with the attraction
of more affordable real estate prices, has
sparked off a steadily escalating outward
migration from Pune’s core areas into the
PCMC.
Naturally, this fact has not been lost on
property investors who map the movement
of demand for residential real estate so as
to anticipate where the highest returns are
possible. Today, for all practical purposes,
PCMC is the New Pune - the city for contemporary Punekars to work, live and raise
a family in.
Maharashtra Special
Locations which are
within a comfortable
driving distance from
both Mumbai and
Pune are now in high
demand - and Lonavla,
situated only 53 km
from Navi Mumbai
and 55 km from Pune,
therefore assumes
renewed importance.
Advantage
Lonavla
la, situated only 53 km from Navi Mumbai
and 55 km from Pune, therefore assumes
renewed importance.
to offices in Navi Mumbai can rent a home
in Lonavla around half the cost and still
save on travelling time.
Market activity
Connectivity
Several notable Pune and Mumbai-based
developers have already launched projects
over the last couple of years to leverage rising residential demand in this hill station.
Prominent names now targeting this region
include Tata Housing, Kalpataru, Puranik, Ajmera and Lakhani. Over the last two
years, the average y-o-y appreciation for
residential real estate prices has been in the
range of 7-9%. Currently, residential property prices range from Rs 2,800-4,000/sq.ft.
meanwhile, escalating real estate costs and
the steady erosion of its once scenic areas
are insurmountable market realities. Some
of Pune’s residents – most notably IT professionals – face daily hour-long drives
commuting between their work places, (e.g.
Magarpatta to Hinjewadi, Magarpatta to
Chakan or Talegaon).
The average rental rates in Lonavla are less
than or at par with a few locations in Mumbai and Pune. In Pune, rents in areas likeHadapsar, Viman Nagar and Nagar Road
range from Rs 14,000-18,000, and the travel
time to Hinjewadi is more than one hour. As
an alternative, it is possible to pay a rent of
Rs 10,000 in Lonavla and still benefit from a
rational commuting distance to Hinjewadi.
Locations which are within a comfortable
driving distance from both Mumbai and
Pune are now in high demand - and Lonav-
Similarly in Mumbai, people paying rents
in the range of Rs 20,000-30,000 for homes
in old, run-down buildings and travelling
While the train network on the LonavlaKalyan-Thane-Navi Mumbai and LonavlaPune routes is well-established, there is
need to enhance direct train connectivity
between Lonavla and Panvel. Once this is
achieved, this hill town will become a preferred alternative for residents of both Pune
and Mumbai.
Located between Mumbai and Pune, Lonavla – ever-popular for its scenic
beauty, excellent weather, greenery, historical monuments, ancient caves
and hangout spots - has always been a popular destination for weekend
and second homes for both cities. by Alok Jha
It also is likely to become a satellite
town for both Pune and Navi Mumbai in the future. Given the economic
activity and employment generation
in Navi Mumbai – which now has the
potential to become a serious office district - Lonavla can mature from a mere
weekend getaway into a residential investment hotspot and end-user-driven
market. Once the Navi Mumbai international airport becomes operational,
Lonavla will stand to benefit from excellent air connectivity.
The rising office stock both in Mumbai and
Pune has increased the demand for training
centres in the region, and Lonavla is already
home to the corporate training centres of
L&T and Tata.
Lonavla has excellent boarding schools,
spiritual retreats and alternate medicine
centres, and is also a well-established senior living destination. The town has become the most preferred choice for celebrity
events and conferences. As the concept of
destination wedding picks up, Lonavla
is also witnessing increasing demand as a
venue to host weddings, especially ‘monsoon weddings’.
Distinct lifestyle contrast over its
bigger neighbours
In Mumbai, rapidly increasing population
density, gruelling commutes and extremely
high real estate costs have compromised the
quality of life in the financial capital. Left
with little choice by the unaffordable property rates, a significant part of Mumbai’s
population lives in far-flung suburbs like
Karjat, Kasara, Kalyan, Virar and Panvel
and travel two hours – one way- each day
to reach their offices in the Island City.
Meanwhile, Pune’s city limits are also
expanding due to the rising population;
NAREDCO Reports
Dr Nandita Chatterjee, Secretary, Ministry of Housing & Urban Poverty Alleviation is flanked by Shailesh Agrawal, ED, BMTPC and
Rajiv Ranjan, Joint Secretary, Ministry of HUPA on the left and Mr Navin M Raheja and Mr Sunil Mantri of NAREDCO on the right
BMTPC Conference
‘Housing for All by 2022’:
New Technologies PROVIDE the answer
She stated ‘Housing for All’ (Urban) under Pradhan Mantri Awas Yojana requires
construction of 2 crore housing units,
translating into 30 lakh units per annum
covering 4041 statutory towns. This challenge and task has been accepted for the
first time and elaborated the four verticals
of Housing for All (Urban) mission.
The Secretary, HUPA referred to the
housing technology sub-Mission and
emphasised the need to adopt alternate
technologies with a view to conserve the
depleting natural resources, safeguard
environment, use local materials for local needs and minimize the use of scarce
slum rehabilitation
participation of
private developers
using land as
resource
Promotion of
Affordable housing
for weaker sections
through Credit Linked
Subsidy Scheme (CLSS)
skilled manpower. The sub-Mission shall
focus at design and planning of habitats,
adopting green building techniques, minimizing the cost etc. She added that, in
order to suggest appropriate action plan,
the IITs, NITs and Schools of Planning &
Architecture in the country are being associated and appreciated the initiative of
NAREDCO to organize the Conference
together with BMTPC to promote public
private partnership in the ‘Housing for
All’ (Urban) mission through promotion
of new construction technologies and alternate building materials.
Subsidy for
beneficiary-led
individual house
construction or
enhancement.
Affordable
housing in
partnership.
Navin M Raheja
Sunil Mantri
In his welcome remarks Mr Navin M Raheja,
Chairman, NAREDCO called upon all developers to become partners in the affordable
housing mission, which offers a game changer
opportunity in housing development. Affordable housing definition includes a unit upto 60
sq mtr including EWS+LIG housing for which
interest subvention upto 5% on housing loan is
given by the Govt of India. In order to match
the challenge, conventional construction technology has to be replaced by modern prefab
technology to reduce cost & time to complete
the construction. In this connection, he referred
to laying of a floor slab every 7 days at his 60
storey new housing project in Gurgaon and
added that the real answer to provide housing
to nearly 590 million urban dwellers by 2030
can be met only by adopting modern new construction technologies.
Speaking on the occasion Mr Sunil
Mantri, President, NAREDCO emphasised the need for lowering the cost of
new technology for high rise buildings
and referred to the high cost of Rs 3500
per sq mtr quoted by a reputed construction company for a 30 storey building in Mumbai.
Chairman, NAREDCO
by Suneel Sehgal
Inaugurating the
Conference, Dr Nandita
Chatterjee, Secretary,
Ministry of Housing &
Urban Poverty Alleviation
emphasised the role
of new technologies
and alternate building
materials in order to come
out of ‘housing poverty’,
a term used by the Center
for UN Settlements.
the four verticals
President, NAREDCO
Dr Shailesh Agrawal
ED, BMTPC
In his Theme presentation, Dr Shailesh
Agrawal, ED, BMTPC called upon developers to adopt alternate building materials,
construction systems using less sand, steel
and cement i.e. prefab construction system
which depends lesser on natural resources.
Tapping the huge housing demand shall
not be possible with conventional technologies alone, therefore in future, buying of
housing shall be linked to factory, assembling in-situ, adding chemicals for curing
and use of less water; use of water and cement free concrete i.e. geopolymer concrete;
nano technology i.e. use of smart material’s
reinforced concrete with less steel and cement, zero energy buildings. In brief industrialization of housing sector is need of the
hour.
NAREDCO Reports
Mr Vineet Relia
Prof. Anil Sawhney
MD, SARE Homes Project
Services Pvt Ltd.
Associate Dean, RICS School of Built
Environment, Amity University
Mr Vineet Relia, MD, SARE Homes
Project Services Pvt Ltd. emphasised
the need for local solutions to ensure
commercial viability of projects. He
stated that Cisco and IBM technologies
are going to be energy guzzlers and
need not to suitable to India’s smart
cities and ‘Housing for All’. Mission.
Adaption is therefore the answer to
suit India’s requirements.
In his expert presentation Prof. Anil Sawhney,
Associate Dean, RICS School of Built Environment, Amity University highlighted the use of
design as facilitator for affordable mass housing
and employing digital technology; consider life
cycle cost of pre-cast technology housing and
not only first cost of construction; in Finland the
use of pre-cast technology is for 90 percent construction off-site which needs to be replicated
in India for mass housing projects under Pradhan Mantri Awas Yojana.
Prof K N Jha
Mr Amit Barde
Col S M Adsar (Retd)
Mr Amit Pal
Dr S K Bhattacharya
Prof K N Jha, Associate Professor, Dept.
of Civil Engineering, IIT Delhi highlighted the safety aspects in building
construction and stated that 60% failure occur due to formwork collapse,
shoring collapse, inadequate shoring
and lateral bracing; 8% due to premature removal of shore; 18% failure is
due to faulty materials.
Mr Amit Barde, Head Precast Designs, Larsen &
Toubro Ltd emphasized that :
Col S M Adsar (Retd), GM , B G Shirke
Construction Technology stated that
the industrialized total prefab construction technology is based on factory mass manufactured structural
prefab components conforming to
provisions of relevant Indian Standard.
The major precast elements are:
Mr Amit Pal, Head-Project Happiness, Mahindra Lifespace Developers presented a
case study of the 1260 units, 396 sq ft 1 BHK
to 677 sq ft, 2 BHK housing project at Avadi,
Chennai. The sale price varies between Rs
9 lac to 16 lac. The factory assembly line
concept has been used for construction for
IGBC certified buildings with ready to fit
components including door frames, window shading and balcony railing. Some of
its salient features are:
Addressing the participants Dr S K Bhattacharya, Director CBRI, Roorkee focused
on the endeavour of research to achieve
sustainability and saving natural resources
with focus on the following:
Associate Professor, Dept. of
Civil Engineering, IIT Delhi
Therefore formwork needs to be built
adequately so that it is capable of supporting all dead and live loads without
danger to workmen and to the concrete
surface.
Solution available in context of high
rise building are Climbing formworkMivan, Doka and PERI and Flying
formwork such as Table Formwork,
Tunnel Formwork, Column Mounted
Shoring System and Gang Form.
Head Precast Designs, Larsen &
Toubro Ltd
• A number of countries / cities including Singapore, Shanghai, Tokyo, Bangkok, etc deployed pre-cast large panel system for high
rise construction and Mumbai can replicate
the same to construct 10 lac housing units in
next 4-5 years.
• In Singapore, Thailand and Turkey ‘pre-cast’
technology is mandatory for construction.
• The four important factors favouring pre cast
construction are demand for housing and
large scale of operations, health and safety
standards require use of new technologies,
shortage of skilled labour and durability of
housing units.
• Possible to tailor make architect designs in
new technology constructions and engineer the buildings i.e. less site activity, high
strength concrete walls and no sound transmission.
• Govt. needs to consider zero excise duty for
offsite pre-cast construction similar to on-site.
GM, B G Shirke Construction
Technology
RCC hollow columns with notches;
RCC solid beams (T/L/Super Shape);
Staircase
RCC precast slab; AAC precast slab;
AAC precast block. Shrike has so far
constructed 2.5 lac tenements in India
and abroad is various geographic locations and at present 69,000 houses for
DDA are being constructed and the
1st phase of 20,000 houses has been
completed. The company follows an
integrated approach and in house door
systems are also being manufactured.
Head-Project Happiness,
Mahindra Lifespace Developers
• FRP increased CLC door frames is 15 kg
includes as compared to wooden frames
of 35 kg and 50% less costlier.
• FRP doors, shutters are used.
• Concrete Light Weight (CLW) concrete
block for building envelope are used,
overall 20% cost offer then quick, cement,
sand plaster.
• High Volume Fly-ash Concrete (HVAC)
for all road networks, car park and certain structures. This reduce cement consumption environment friendly.
Director CBRI,
Roorkee
• Attempt to utilize the large types of waste
including agri waste with not to deplete
natural resources.
• Conventional materials i.e. cement, steel,
ceramics require to be reinforced with
alternate materials to solve the scarcity
problem.
• Manufacture of steel has to be with corrosion free properties.
• Cement-impact of water be minimized
and concrete free of water be developed.
Also develop alternate materials to cement as the process of manufacturing
produces Carbon dioxide.
• Finally focus on smart materials.
• Finally speaking at the Panel Discussion
Mr Sanjeev Kumar, Jt Secretary, Housing for All (Urban), Ministry of HUPA
focused on:
• The need to adopt modern construction technologies for faster construction
and making the industry environment
friendly. Since sand is becoming a problem, cement uses high energy etc., there
is a need to adopt environment friendly
technologies.
• He referred to endeavour to introduce
transparency and informed about decision to set up a portal on new technologies at 3 levels for market adoption as it
is desirable not to rely on a single technology but encourage others as well in a
transparent manner.
• Typical need in EWS / LIG housing is
expandability with a provision for modular construction and the Government is
working on the design for this.
• Discipline of electronics is going to merge
with civil engineering and this shall be
seen in intelligent buildings being constructed in smart cities.
• Finally, conditions are being created to
make the country ready to adopt modern
technologies.
Rentals
NAREDCO Bangalore
Unoccupied flats
in our cities
Vacant homes across our cities are causing a
big stir now - and for good reason. In a country
which has not been able to meet the housing
needs of the largest part of its population, a
massive number of flats standing empty come
across an aberration. by Arvind Jain
The reasoning behind the outrage seems
sound. Many Indians cannot yet afford to
buy their own homes; these vacant flats
should at least be rented out by their owners so that more of the population can find
homes within their means.
However, all may not be as it seems at first
sight. Homes can be unoccupied for various reasons. For instance, they could be in
projects which are complete but stalled because they are been found to be legally noncompliant by the local authorities. In such
projects, many of the flats may be ready and
also bought up, but they are not legally fit
for occupation by anyone.
Many homes that are lying vacant today
have been purchased by NRIs who are currently stationed abroad and intend to occupy them on their return to India. They
are not interested in renting them out in the
interim, because they are worried about not
being able to vacate the flat when they need
it themselves. In many other cases, unoccupied homes belong to investors who are
looking solely at capital appreciation and
are not looking at renting them out for the
same reason. 36 National Realty | September 2015
In yet other cases, projects may be lying vacant because the areas they are in lack water supply, electricity, connectivity or other
forms of support infrastructure. In other
words, they are unoccupiable - their owners did not do the necessary due diligence
and believed unreliable developers who
told them that the necessary infrastructure
is on the way.
If units in a project are lying vacant because
the project is complete but stalled, the developer must get the project approved at
all levels so that it becomes marketable. If a
significant amount of vacant homes in a city
is held by investors focused only on capital
appreciation, the state government can step
in and enforce laws to release such supply
onto the rental market. Instances where a
project is vacant because the locality lacks
the necessary utilities or support infrastructure are trickier. He is clearly at fault for
launching and marketing his project in such
an area in the first place, but there is not
much he can do on his own without support from the local municipality.
A platform for architects, interior designers, builders, developers and project management companies, the event brought together key project personnel with the objective of bridging the
gaps in execution of projects, efficiency, and sustainability in the
construction and to address construction and architecture challenges and opportunities.
Some of the main features of BuildConnect 2015 were, exclusive
networking opportunity, a boutique exhibition setup to meet,
discuss and discover newer possibilities and an interactive panel discussion on “Growing Trends of Smart Home”.
The Smart Home has been a “hot” topic since last year and is
expected to explode by 2020. Thanks to technology’s ability to
aid in resource allocation for homeowners, programmable and
cloud-managed services are growing in appeal as costs decrease.
A report published by Allied Market Research concluded that
The event was inaugurated by Mr. Parth Hirani, Director of
Quba Architectural Hardware, Mr. Dharesh Hanamapure,
Head of NAREDCO, Karnataka Chapter, Ms. Jyoti Gandhi, Associate director business Development, of Gleeds Hoolooman
Consulting (I) Pvt Ltd and Architect Mr. Nitin Saolapurkar and
Mr. Anant Ramu.
BUILD
CONNECT
2015
A special tribute to India’s
greatest architect Late Chares
Correa who was the founder
of Mumbai based Charles
Correa Associates was another highlight.
After a brief round of presentations by sponsors from
building material, interior
and construction segments,
Build Connect 2015 was Exhibition Asia’s third successful event after
architects, interior designers
Global Real Estate Brand award 2015 and Arc Review Conclave.
and educationists from architecture schools were honored
for meritorious services by
the global smart home and buildings market is expected to grow
Mr. Balan Nambiar who is a painter, sculptor, enamellist, phoat a compound annual growth rate of 29.5 percent between 2012
tographer and an academic researcher.
and 2020. The market revenue of 4.8 billion$ in 2012 is expected
Those honoured included Architect Satish Naik; Architect
to grow up to 35.3 billion$ by 2020. The huge increase is attribPrabhakar Kulkarni; Architect Anant Ramu , Architect Gayuted to government regulations, rising energy costs and raising
athri Shetty, Architect Leena Kumar, Architect K Jaisim; Archiawareness with respect to environmental concerns.
tect Dinesh Verma, Bindi Saolapurkar, Dr. Krishne Gowda and
The panel discussion was moderated by Dr. Sujith Kumar, PrinArchitect Nitin Saolapurkar. The attendee profile comprised of
ciple architect / Director of Klimart and renowned personalities
Builders, Developers & Contractor, Architects & Interior Deon the dais included Architect Ms. Leena Kumar; Kumar Consigners, Project management companies, Building Owners &
sultants , Mr. Manjunath Prasad; COO Brigade Group, Mr. M
Facility Managers, Procurement Directors & COO, Operation
Selvarasu; Director , LEED Accredited professional & faculty,
head, managers etc.
USGBC & IGBC, and Architect Mr. Nitin Saolapurkar; Saolapurkar and Associates.
Rentals
overnight. House owners will first like to
test the waters. However, with a long-term
view, house owners have everything to gain
by letting out their property without having to worry about seeing them vacated.
A lot will depend on the execution of the
rules mentioned in Act to help landlord
raise rents and get trouble-making tenants
evicted.
Unlocking
India’s Rental Market
State-Level
Applicability Of The Act
with Draft Model Tenancy Act, 2015
A change is in the air after almost 70 years as far as rental
market is concerned. With the Draft Model Tenancy Act 2015,
more of India’s budget-strong families can expect to have
a roof over their heads at a cost that is affordable, and to
live with dignity. by ASHWINDER RAJ SINGH
The NDA government has finally started moving on the Draft Model Tenancy
Act 2015. The previous UPA government initiated it almost four years back,
but did not complete the process. Housing is a major problem in India, and
this Act looks forward to making an impact on it in the most constructive
manner.
Will this Act will change
the market dynamics and if
so, how?
The Draft Model Tenancy Act, 2015 is an improvement on its obsolete predecessor, the
Rent Control Act, 1948. The latest draft will
make things much easier for the landlords
who were short-changed by the previous
law. The Rent Control Act was applicable
only to tenancy of more than 12 months,
had put a cap on rent and made it extremely
difficult to evict a tenant who did not pay
the revised rents despite living in the same
premises for years. The new draft, on the
other hand, will ensure that landlords are
able to charge market rates for their residential or commercial properties, get the
rents revised periodically and also get their
premises vacated easily without getting
into the long-drawn legal proceedings.
What is Draft Model
Tenancy Act, 2015
responding to?
There was a need to unlock the greater potential of the housing sector. Property owners were sceptical about giving their house
on rent, and most of them avoided it out of
the fear that tenant will never vacate their
property. With these changes, house owners
can relax and a huge number of properties
lying vacant can be used to not only generate additional income for them, but also
solve the housing problem of millions.
Who will benefit from the
new Act?
Apart from the benefits to landlords, the
new draft Act also works well for tenants.
As per the draft, rent ceiling will be fixed
in consultation with the state government
to avoid arbitrary hikes. Besides this, landlords won’t be able to evict tenant as per
their whims and fancies, as there will be
a written agreement. Also, the security
deposit charged from the tenant will be
capped at three times the monthly rent,
which is currently charged more or less on
an ad hoc basis. Another plus point for tenants is that they can claim a reduction in
rent if the quality of services available to
them deteriorates in any way. In short, it’s
a win-win situation for both house owners
and tenants if they play by the rule book.
Will the new Act succeed
where the previous one
failed?
Yes, it will. The new Act safeguards the interests of both the parties in a special court
of law, so there is no reason to believe that
it will fail to have an impact. Landlords
can expect rent that their property deserve
and tenants will be saved from unexpected
rental raise and surprise evictions. The only
thing to be considered here is the implementation of the Act in its right spirit.
The purpose of this Act is to help unlock the
pent-up potential lying in the housing segment. While the UPA government’s avowed
intention of constructing houses for millions will take a lot of time and regulatory
approvals, unlocking the doors of houses
already built but not utilized is a faster and
comparatively easier process of addressing
the goal of Housing For All.
Will there be an immediate
impact?
The expected change - meaning the increased willingness for property owners to
rent out their properties - might not happen
Since land is a subject
of state, this Act is not
binding on the states and
therefore is called a draft.
It is left on the states to
decide whether to accept
it or not. Given the votebank scenario, most state
governments might not
adopt this draft, but in
the long run they would
have to accept it since it
is beneficial for tenants
in a big way. Presently, the
rent laws in most states
have become archaic and
are not serving the purpose
of the current day and
age. Additionally, lots of
tenants have to undergo
the harrowing experience
of either giving in to
arbitrary rent hikes or
face eviction. This Act can
help bring transparency
as well as ease of doing
business for both the
parties involved.
A change is in the air after
almost 70 years as far as
rental market is concerned.
With the Draft Model
Tenancy Act 2015, more
of India’s budget-strong
families can expect to have
a roof over their heads at
a cost that is affordable,
and to live with dignity. The
sooner the respective state
governments adopt the
new Rental Act, the sooner
they will be able to reap
the benefits.
Rentals
Deciding On The Rent
Drafting The Rental Agreement
It is always essential to ascertain the correct
rental amount for your property. In such
a competitive market, you cannot ask for
more than the prevailing market rate. To
ascertain this, you need to do a thorough
check of the area’s current rental rates, and
price your rent competitively. Only if your
property is well-maintained, fully furnished
and offers that extra ‘luxe’ factor can you
can charge a consummate premium – and
even that needs to be logically calibrated.
Every rental agreement should be in writing and registered. The rental agreement
should provide the term of the lease,
monthly rental amount and security deposit. It should specify also all the terms and
conditions such as who will pay for utilities
water, electricity and maintenance charges.
The purpose of tenancy should be clearly
mentioned, such as whether the property
is being used for commercial or residential
purpose. If the rental agreement is set to expire and you and the tenant agree to extend
the term of the lease for a specific period,
then the extension should be in writing.
Getting The Property Insured
A savvy landlord gets his rental property
fully insured. A landlord is always at risk
because he is not the one controlling the
property, but the tenant. Landlords should
consult with their insurance agent to ensure
they have the maximum amount of liability
coverage for their property.
Listing The Property
Residential Landlords
tips for firsttime landlords are unaware of the potential
risks associated with renting out a property – particularly
a residence. Renting out a house in India does not always
result in smooth sailing - if not approached diligently, it can
become a serious headache – and often a nightmare.
Once you have decided the rental amount
for your property, the next step is to list the
property on the market. You can do that by
either listing on online portals or by contacting local agents. If your rental property is an upscale apartment or a bungalow
which will fetch a higher rental, a property
consultancy should be roped in to help you
with the leasing.
Registering The Agreement
After preparing the agreement, the most
important task is to get it registered. It is
necessary to register the rental agreement
because only then it can be used as evidence
in the court in case of any legal action. The
amount to be paid for registration and the
stamp duty may be borne by the landlord,
or it can be paid mutually depending on the
situation.
Police Verification
This is one of the most essential parts of the
process which helps in background check
of the tenant. Not running a background
check is a punishable offence under Section
188 of the Indian Penal Code. The landlord
has to fill the verification form, obtainable
from the state police department website. It
must then be submitted to the local police
station along with identification proof of
the tenant. The local police then conduct the
background check and give approval for
the rental agreement.
Non-discrimination Against Prospective Tenants
A savvy landlord will not discriminate
among potential tenants on the basis matters such as religion, gender, familial status,
profession or dietary preferences. There
are certain situations where refusal to rent
out the property is justified, but this at best
a grey area and every instance of refusal
needs sound justification in the eye of the
law.
Summary
Apart from the above, a landlord should invest the time and effort to conduct periodic
checks to make sure that the tenants are not
violating any laws or the terms and conditions of the agreement, and to verify that
the property is safe. Investing in rental real
estate can be a profitable proposition, but it
is by no means a passive process. First-time
landlords in particular must fully acquaint
themselves with the intricacies of a rental
situation so that there are no causes to regret
later on.
by Santhosh Kumar
India’s cities are growing and creating wide spectrum of
opportunities. This means that there are a lot of people
flocking to these cities in search of jobs, higher studies or
just for a more cosmopolitan lifestyle. In other words, today’s real estate market is flooded with prospective renters. The sky-high property prices in the larger cities are
keeping the ‘buy’ option out of the reach of the common
man, so the rental market is booming.
Not surprisingly, countless investors are invested in or
entering rental real estate. Their objective is to purchase
homes and then rent them to tenants.
Problems for
First-Time Landlords
The most common problems that first-time landlords encounter include:
• Finding new tenants, especially the right kind
• Delay in payment of rent
• Misuse of the property by the tenant
• Tenants refusing to vacate
• Tenants not paying maintenance fees (if the rental agreement requires them to).
First-time landlords
in particular must
fully acquaint
themselves with
the intricacies of a
rental situation so
that there are no
causes to regret
later on.
Human Resources
New Trends
E-Registration
A Major Step Towards Real Estate
Market Transparency
The most frequently-occurring type of
disagreement in Indian real estate is land dispute.
Cases range from of illicit land grabbing and
illegal land sales to instances of purchase of
land where no actual purchase has taken place
– to name just a few. by ASHWINDER RAJ SINGH
Gender Diversity:
Supporting India’s 1st Generation
Women Workforce by Gagan Singh
One of the main challenges
every CEO and HR manager
in India faces is availability
of ‘employable resources’.
While this is certainly ironical in a country of over 1.2
billion people, it becomes
even
more
complicated
when they seek to adapt
their companies’ hiring programme towards the cause
of gender diversity.
Women constitute almost 50% of the employable resource pool of the country. However, this is purely an academic observation - the worrying fact is that India has the
second-lowest representation of women in
the work force in the world, and that the
percentage of women’s participation has
in fact dropped from around 33.7% to 27%
from 1991 to 2012.
Having women at all levels in the organisation is critical not only to increase the resource pool, but also as a business imperative – namely, to provide the enrichment
that diversity brings to business and the
workplace.
Corporate India has woken up to the need
for an extra effort to increase the inflow of
female employees at all levels. At several
Corporates, including JLL India, which
have a focus on gender diversity, for instance, recruiters and 3rd party support
agencies are incentivised to get more female
candidates for interviews.
The whole issue of gender diversity in India
needs to be approached with a great deal of
understanding and sensitivity. It bears remembering that a large percentage of women employed in the junior levels are 1st generation working women. They are young
women hailing from families that have no
precedents of working women at all, leave
alone women who have been exposed to the
corporate world.
As a matter of fact, many of these women
move out of their homes to live on their
own in hostels or in paying guest facilities.
These women need special support and
nurturing in these initial stages. Especially
when they are faced with a corporate environment, they require a great deal of handholding and guidance to decipher the dos,
don’ts and protocols – not to mention their
intrinsic rights.
If we take a hard look at Corporate India today, there is no dearth of cases where young
women put up with protracted harassment
by male bosses, assuming that it is normal
and that such treatment must be endured in
order to win acceptance in the workplace.
While the West seems to have evolved more
rapidly in finding a wholesome equation
on this front, there is still a very distinct
need for proper induction and awareness of
ethics at the corporate workplace in India.
Young women must understand that while
they must certainly work hard and deliver
results, they can and must raise their voices
against discrimination or harassment of any
kind.
At JLL India, awareness creation and empowerment of women employees is assigned to specially-appointed ‘mavens’
– senior, experienced women who are wellversed with the work environment and the
culture of the Company. They are the ‘goto’ women for any concerns other women
employees face but are hesitant to bring to
the attention of their managers or even HR.
Many other corporates use the ‘buddy system’ to see the young women through the
settling-in/settling-down phase.
Only when companies offer the right kind
of support and nurturing to their young 1st
generation women employees will they be
able to boost their diversity programmes.
The real estate market has historically been
plagued by such issues, and the current
government’s initiative of facilitating eregistration to streamline the registration of
immovable properties is an extremely progressive move which has been universally
welcomed for its transparency and ease of
use.
E-registration has simplified the process for
providing evidence of titles and facilitating
transactions, and will go a long way in preventing the unlawful disposal of land. This
online registration system effectively put
paid to the various underlying problems
and loopholes in the traditional land registration process, based on the Land Registration Act of 1925, which typically involves
Powers of Attorney, sale or mortgage of
land and transfer of property under rent.
The Land Registration Act of 2002 introduced this new system using verified electronic signatures to transfer and register immovable property online.
The All-Important Tree of
Ownership
If a piece of land has been passed on for
generations or has seen multiple owners
over time, a proper hierarchy of land holding needs to be available so that current
buyers or tenants can ascertain the exact
value of land or the rent according to current market values.
This is possible only when there is complete
transparency in document verification and
full disclosure of details about the property - gross carpet area, number of rooms,
foundation details and wiring blueprints.
Nothing should be hidden from the future
investor/buyer. E-registration has provided
a much-needed level of transparency to
property dealings.
The Role of a Broker After
E-Registration
Does e-registration also negate the need
for a real estate broker? This is a fair question. While all details of the property may
be available online, this may not be enough
information to make a firm investment decision. The question of whether a particular
property, regardless of how many details
are available online, makes good investment sense in light of many other options
can only be answered by a knowledgeable
consultant.
New Trends
What Do Real Estate
Experts Say?
Benefits of Land
E-Registration
•Real estate experts are in
favour of registration of land,
especially e-registration,
since it helps them to focus
on larger projects.
•The usual resource challenges at Registrar offices are
reduced drastically, allowing
them to tend to more sensitive matters like disputes.
•Since e-registration adds
transparency to the nation’s
real estate, it also adds credibility to each real estate
agents’ and expert’s credentials.
•Consumer pays a registration amount which is relatively affordable.
•There is no longer any need
to visit different offices to
register a property
•It helps to secure deals that
will not land up in legal
troubles, since non-registration can lead to significant
legal trouble.
•The details and documents
pertaining to land records
can be accessed online at
any time.
•Transparency in the registration process increases
significantly, thereby also
rationalizing broker fees and
negating the need for bribes
to officials
•The software calculate the
stamp duty on the basis of
the stored data, and the duty
can be paid online
•A state-of-the-art system
will reveal the current market price of any land located
at any location within the
State
The fees a broker will charge are definitely
reduced by e-Registration, but a broker is
still required – not only to provide inputs
on the advisability of the investment proposition, but to mediate between the involved
parties and help negotiate the price.
E-Registration Procedure in
Urban and Rural Areas
Since property in both urban and rural areas property comes under the jurisdiction
of the same State Government and both
types of areas are managed under a Tehsil
(aka taluka ormandal) the e-registration of
property (housing or commercial rental) is
fairly similar. The process will only differ if
the land is vacant or occupied (built upon).
For vacant land, valuation is done at current
market price while for occupied land (with
built-up properties like shops, flats, cottages, etc.) it is done on the market price as well
as the gross investment utilized by a building. For instance, a single-storied house will
be valued higher than a multi-storied house
if it is a prime location. Otherwise, the latter
commands a higher valuation. Also, leases
of immovable property in urban areas command a higher stamp duty (6%), while in
rural areas it is lower (5%).
How to E-Register Land
The procedure of doing e-Registration of
land is simple. The land registration and
application form can be either downloaded
online or obtained from the concerned authority’s office in the state. After the verification of form details and the related documents of the concerned person, the land
is registered in a matter of days, and this
marks the completion of the registration
process and establishing the full-accredit
ownership of the property.
Safety of E-registration of Land
E-registration is pretty safe. Hackers can do
nothing to compromise documentation, as
they do not have access to the papers owners hold relating to their land, such as transfer of Power of Attorney, land purchase
deed or wills of deceased person who were
entrusted with the protection of the property. Also, since most government servers
are SSL encrypted with multiple layers of
security and a personalized login system, it
is not easy to hack consumer’s details.
However, to check the authenticity of the
buyers and sellers, it is always best to consult a professional real estate consultant
who has proper knowledge about the sector.
Efficient background research is always the
crux of any good and profitable land deal. It
is important to establish that a land’s claim
is retained by the owner, and that there is
no scope for the land mafia or government
to contest it.
Also, before signing a deal, it is always advisable to visit the site at least twice (giving
a gap of a few months) in the presence of
the seller or buyer in order to verify overall
authenticity.
Where is E-Registration Already
Being Used?
States such as Kerala, Orissa, West Bengal, Karnataka, Tamil Nadu, Rajasthan,
Jharkhand, Sikkim, New Delhi, Maharashtra, Madhya Pradesh, Punjab and Chhattisgarh have the facility in force since as long
as the 1990s. Such states have developed
the Common Services Centre (CSC) Scheme
where all registrations are verified. These
CSCs cover almost all the rural and urban
areas.
What About Old Property?
For older property, the process is simple.
Consumer need to register the following
documents:
• Power of Attorney (sale, transfer, hold or
deconstruct).
• Non-testamentary instruments which
purport directly to or operate to create,
declare or assign any right, title or interest of the value of one hundred rupees
and upwards, to any kind of immovable
property (inherited land).
• Non-testamentary instruments which acknowledge full receipt of payment of any
consideration on the transfer of ownership to a new owner.
•Overall, one should always
register (or e-register) their
land dealings and purchases
to add a credible name to the
entire holding or immovable property comprised
therein at that space of land.
In cases where there is a
need to confer any kind of
power - especially in patriarchal or commercial holdings - land registration helps
the government to ascertain
the rightful owner and avoid
family feuds.
•Also, e-registration helps in
quickly producing evidence
of any transaction that affects
the property or confers special powers to an individual
or firm. It pays to remember that a land owner does
not exist in the eyes of the
government unless the land
has been registered. To avoid
the risk of personal land
being impounded, it makes
sense to register all the land
documents online today at
the respective State’s online
website.
New Trends
Corporate Real Estate Services
With the evolution of corporate real estate, the following kinds of real estate
services have emerged in India:
• Transaction Management (Buying, selling and leasing properties)
• Project Management (Design, development and construction of
corporate facilities)
• Management of day to day operations of corporate properties and
facilities
Corporate Real Estate Services are now required to cope with demands like:
• Increase in quality of construction and infrastructure with larger
floor plates and efficient buildings
• New specifications and practices
• Technical diligence in choosing the right real estate infrastructure
• Project management approach
• Modern trends and high service levels
• Increased pace and higher quality of construction
• Increased competition
Outsourcing & Corporate
Real Estate
The trend towards outsourcing of business activities to
India and other low-cost economies began in the early 1990s
driven by the requirement for efficiency and effectiveness.
This outsourcing of processes and services to several
cities in India has resulted in several effects on the economy
including the real estate sector. by Sarita D Souza
The Cushman & Wakefield’s H1 Office
Market Beat Report and Trends for H2 2015
indicates a 32% increase in office space
absorption in the country’s top eight cities
to 17.9 million square feet in the first six
months of 2015. This is attributed to the
regained expansion momentum, mainly in
the IT-ITeS and ecommerce sectors.
Business Process Outsourcing: While
capital and commodities can be freely
traded in the global market, labour does
not enjoy the same degree of ease of trade.
Business Process Outsourcing (BPO) is a
form of employee arbitrage; an organization
outsources its processes/activities to regions
which have a large skilled workforce at a
low cost. According to Former US Secretary
of State Colin Powell, ‘outsourcing is a
natural effect of the global economic system
and the rise of the Internet and broadband
communications.’
While the initial development of the
outsourcing industry in India in the early
nineties was through call centres, gradually
higher value research and development and
processing centres have emerged in India,
signifying a move up in the value chain for
India.
Multinationals in their search for
alternative off-shore hubs, seek to mitigate
risk by ensuring that a significant percent
of their workforce is not concentrated in
one country. This enables companies to
ensure that they are not too exposed to a
single market risk. While cost is a major
factor and stable political climate is another
consideration, intellectual property and
transparency levels emerge as key concerns
particularly when the outsourcing is at the
higher end of the value chain.
While Mumbai, Delhi and Bangalore were
the initially preferred locations, new cities
have emerged with businesses exploring
more cost-effective locations. Tier-II cities
now compete for a piece of the outsourcing
business. With the emphasis on ‘Make-inIndia’ came the need to skill individuals
in trades that will provide opportunities
in a manufacturing focused economy and
consequently support outsourcing in the
manufacturing sector.
estate and services available. Developers
now appreciate workspace specifications
required for IT-enabled outsourcing services
or Knowledge Processing Organisations
(KPO) services. This appreciation along
with a greater exposure to international
service providers results in development of
quality real estate solutions at costs suited
to BPO/KPO companies.
The global IT outsourcing services industry
is anticipated to grow as companies focus
on information technology to retain
competitive advantage. With the expected
growth in the Indian economy, demand
for office space is expected to increase due
to the Indian BPO/KPO services. Such a
demand for quality infrastructure could
result in a greater demand for corporate
real estate.
The demands of the Outsourcing industry has its impact on developers,
these include:
• Shift to smaller cities
• Growth in suburban areas due to cheaper real estate
• Customization of buildings to suit client needs
• Competition between developers to provide ‘A Grade’ buildings
• Benchmarking of real estate properties
Corporate Real Estate services are evolving to include:
• Introduction of new specifications and practices for Corporate
Real Estate Services
• Innovation
• Improved services owing to competition and demands of the
outsourcing companies
The demand for corporate real estate is likely to benefit from the trends in the
volume and complexity of outsourcing services: data management, equity research,
market research and business analysis and research. The question remains whether
the demands of the outsourcing sector will result in a sustained increase in the real
estate sector’s focus on corporate real estate.
Commercial real estate: Commercial real
estate can be classified into Corporate,
Retail and Hotels.
When companies first began to outsource
services to India, there was an acceptance
of any kind of available facility. With
competition across countries for a share
of the outsourcing pie, organizations
now assess the quality of corporate real
Retailing
Retail Brands
adapt for their Non-Metro
Expansion
Mid and mass-segment brands are best placed to tap into tier-II / tier-III potential
by Pankaj renjhen
As incomes rise, aspirations change and
brand awareness increases among the nonmetro consumers, an increasing number
of international and Indian brands have
started foraying into these largely untapped
markets.
in terms of organised retail, non-metros
like Ahmedabad, Jaipur, Ludhiana, Indore,
Chandigarh, Bhopal, Surat, Amritsar, Nagpur and Lucknow have witnessed considerable growth in retail development in the last
four-five years.
As the markets in metros mature, brands
have started expanding their footprint in
non-metros to capitalise on the growing demand. However, as supply of quality malls
is less, many brands have to either open
their stores in the already-established highstreets, generally located in the heart of a
city, or explore built-to-suit (BTS) options.
With these cities having favourable demographics and a high propensity to consume,
many national and international brands are
creating their presence here. Consumers in
some of the Tier-II cities around New Delhi
travel to the malls here to shop for luxury
and high-end brands.
The lack of entertainment options and organised retail, when compared to the metros, has paved a way for high-street retail
culture and rising demand for such offerings. Despite a lack of supply and options
Interestingly, it is the mid and mass-segment brands that are expanding the most in
non-metros owing to the market dynamics
and demand potential. Many are trying to
gain first-mover advantage.
Customisation is Key
Inclination towards cultural events and traditions continues to remain strong in Tier-II
and Tier-III cities. Therefore, customising to
the local culture becomes very important in
each city as standardised store formats do
not necessarily work. The formats, sizes and
pricing – all need to change as per the spending power and target audience in each city.
Many of the food and beverage (F&B) players customise their menus to include local
flavours and suit the taste palate. Department stores and hypermarkets incorporate
F&B brands or cafes in their stores to attract
more footfalls and extend the time spent by
consumers in the store. Likewise, fashion
brands also customise their merchandise
according to demand and demographic parameters.
City
High Street/Market
Average Store
Size (sq ft)
500-600
Delhi
Connaught Place
1000-4000
Khan Market
450-1000
City
Mall Name
Average Store Size
(sq ft)
Delhi
Select Citywalk
Gurgaon
Ambience Mall
1000-1500
Delhi
Delhi
DLF Promenade
500-600
Delhi
South Extension
500-1000
Jaipur
World Trade Park
400-600
Jaipur
MI Road
400-600
Ludhiana
MBD
300-400
Guwahati
GS Road
400-1000
Amritsar
Trillium
400-600
Amritsar
Model Town
800-1000
Bhopal
DB Mall
500-600
Goa
June 18th Road
500-1000
Goa
Mall De Goa
700-1000
Nasik
College Road
700-1000
Nasik
Nasik City Centre
700-1000
Coimbatore
DB Road
1000-1500
Coimbatore
Brookefield Mall
800-1000
Trichy
Thillai nagar main
Road
1000-1500
Madurai
Millennium Mall
800-1000
Madurai
Theni bypass Road
1000-1500
Ahmedabad
CG Square
400-500
Ahmedabad
CG Road
800-1500
Baroda
Inorbit
500-700
Baroda
Alkapuri
500-1000
Nagpur
Empress Mall
800-1000
Nagpur
Dharampet
600-800
Store Sizes
Sales per square feet and productivity of
space utilised have become an important
parameter for success of a brand. A majority
of the brands are focussing on right-sizing
their stores according to the location, format and demand from consumers. Due to
the onslaught of discounts from ecommerce
players, smaller formats are also coming up
apart from the standard formats.
A comparison between the average store
sizes in malls located within metros vis-àvis non-metros reveals that there is hardly
any difference between them. Also, no direct correlation between the store sizes and
their locations exists, i.e. the average store
size in one of Delhi’s leading mall could be
the same size as the size of a store in Bhopal,
Ahmedabad or Baroda.
The flagship stores, which showcase a
brand’s variety of merchandise, are generally bigger in size, and are generally found
in prominent locations across these cities.
So while store sizes may be comparable in
the metros and non-metros, brands generally have a larger footprint in the metros by
having several smaller stores in different
malls and high-street locations vis-à-vis a
single store in a non-metro.
It could also be due to brands wanting the
non-metro consumers to have the same experience as their metro counterparts. The
same holds true if we compare the store
sizes at high-street retail locations in metros
and non-metros.
City
Average Rentals
(INR/sq ft/month)
Delhi
350-1200
Mumbai
300-1000
Bangalore
150-300
Hyderabad
100-200
Chandigarh
700-1000
Goa
200-350
Ahmedabad
140-150
Nagpur
120-140
Gazing Into The Future
A look at the average rentals across some of
the established high-streets in metros like
Delhi and Mumbai shows how non-metros
like Chandigarh have a similar range of
rentals as the former while Goa has higher
rentals than Bangalore.
As bigger cities would reach saturation
point soon, the next phase of retail real
estate growth is expected to come from
non-metros. The rentals in non-metros
may increase in quality mall supply and
prominent high-street locations depending
on the economic conditions and consumer
demand in the long run. The upward movement, though, will be in line with growth in
consumption.
Finance
The Rupee
Rebound
by Prithvi Nath
After the manic Monday on Aug 25, 2015
resulting in a drop of 1.625 Sensex and a
sharp rupee depreciation of 82 paisa against
the $, resulting in a loss in the accounts of
Retail Investors at about Rs. 75,000 crores
and Institutional Investors of about Rs.1 lac
crores, the Rupee bounced back on Tuesday, August 26 gaining 91 points on Sensex
and 55 paise in Rupee indicating the greatest Rupee Rebound and the Great Indian
Economy.
The ‘Rupee Rebound’ again on Sept 8, 2015
after Prime Minister Narendra Modi’s economic review with India Inc., Finance Minister Arun Jaitley, RBI Governor Raghuram
Rajan, Industry leaders, Bankers and Economists.
The economic destinies of Asian giants,
China and India are interlinked as India
chases the dominant Chinese economy by
following its passion for technology, modernity and development.
India share of the global economy stands at
2.6% in $ terms and 6.8% in terms of purchasing power parity. Its robust economy
has impressed the global economy through
its fastest growth in accordance with International Monetary Fund’s (IMF’s) 2015
GDP growth projection.
The seven years cycle of financial crisis
starting from the wall street crash in 1987,
the great bond market massacre in 1994,
the 9/11 terror attacks in 2001 and Lehman
bankruptcy global crisis in 2008 and the
present 2015 manic Monday have proved
to the world that USA has lost its dominant
position.
In order to overcome a crash, China has
adopted a strategy that will unite the Asian
giants to bring in a new currency which
would be on the pattern of Purchasing
Power parity with Rupee as the balancing
currency.
No wonder that after Chinese devaluation
of its domestic currency in a bid to shore up
exports, China has cut both its key Policy
Rates as well as reserved requirement ratio.
Reserve Bank of India (RBI) Governor Raghuram Rajan was ready to use the coun-
try’s Foreign Exchange Reserves to curb
volatility in the Rupee. “India is better
placed compared to other counties with its
low current deficit, fiscal deficit discipline,
moderator inflation, low short term foreign
currency liabilities and very sizeable base of
forex reserves, ” he said
India has built up its Foreign Exchange Reserves to more than $ 355 billion since Rajan
became the Governor in September 2013
when the Rupee was facing the worst crisis
of more than two decades.
With the rupee riding on the highest ever
growth rate of 8%, time has come for the
biggest push to National Realty. The government will be achieving the target of
10,000 km of National Highways to be executed over the next 2 to 3 years and will develop seven major ports and 5 airports with
commodity prices crashing to the greatest
low following the dip in Chinese manufacturing. Similarly the fall in crude oil prices
will help government by savings in subsidy
expenditure as the cost of infrastructure development declines substantially.
IMF’s 2015 GDP GROWTH
PROJECTIONS
US
-3.4
Russia
China
-1.5
2.5
6.8
Brazil
South Africa
2.0
Euro Area
1.5
India
7.5
NAREDCO & APREA REAL ESTATE AND
INFRASTRUCTURE INVESTORS’ SUMMIT 2015
05th & 06th October 2015, Mumbai
National Real Estate Development Council (NAREDCO) and Asia Pacific Real Estate Association (APREA) invites you to the
Real Estate and Infrastructure Investors Summit (REIIS), 2015 on 05th & 06th October 2015 at Hotel Trident, Nariman Point,
Mumbai.
This Summit focus is primarily on Private Equity and Real Estate Investment Trust (REIT’s) in INDIA, to discuss issues, challenges
and way forward to attract more funds to real estate and infrastructure sector from across the globe. Global institutions like
as KPMG India, RICS & VC Circle India have joined hands at “REIIS – 2015” to put this summit on an international platform.
Arun Jaitley, Finance Minister, Govt. of India has been invited as Chief Guest. Other eminent speakers invited are:
• M. Venkaiah Naidu, Minister of Housing and Urban Poverty Alleviation, Govt. of India;
• Jayant Sinha, Minister of State for Finance, Govt. of India;
• U. K. Sinha, Chairman, Securities and Exchange Board of India (SEBI);
• Amitabh Kant, Secretary, Dept. of Industrial Policy and Promotion, GOI;
• Ananta Barua, Executive Director, SEBI;
• Arundhati Bhattacharya, Chairman, State Bank of India (SBI);
•Lee Fu Nyap, CEO, Ascendas India Operations;
•Loh Wai Keong, Managing Director & Co-Head, Asia, GIC Real Estate;
• Peter Verwer, CEO, Asia Pacific Real Estate Association;
• Navin Raheja, Chairman, NAREDCO;
• Sunil Mantri, President, NAREDCO;
• Niranjan Hiranandani, Executive Chairman –Advisory Council, NAREDCO;
• Neel Raheja, Chairman, APREA India Chapter; etc.
To achieve ‘Housing For All by 2022’ a vision of Narendra Modi, Hon’ble Prime Minister of India, the real estate sector requires
approx.US $ 2 trillion investment for constructing of 9 Cr. housing units (the present shortage plus additional demand of
housing for everyone by 2022) as per the joint study of KPMG and NAREDCO. Looking at the huge fund requirement, it is
essential that apart from Banking Industry, other sources such as private equity, allowing foreigners to invest in real estate
sector as in Singapore, Hong Kong & Dubai, and promoting REITs and various other mechanisms are facilitated.
Apart from the Top Global Fund Houses fund houses from across Asia Pacific region, investors based in European and American
continents, International Banks, Large domestic and foreign PE GPs, LPs, FIIs, DII’s, Mutual Funds, NBFCs, Corporate Treasury
Heads are invited. More than 100 top Private Equity players from across the globe shall be attending the Conclave.
For any further assistance contact:
Abhijith Balan: +91 9823420068 / 022 65652309
Sheetal Kamble: +91 9930455307 / 022 65652307
Email: events@naredcowest.com & naredco.m@gmail.com
LAST WORD - Dwaapar
Anil Suri flagship company has construction activities spread across India. In short
span of 26 years Anil Suri has emerged at the forefront of development. Its exemplary
vision top-line technical expertise and precision project managment has proved in
over 20 projects spanning 5 million square feet of development...
Suri Infotech - IT Park
Kolhapur
• Beautiful Landscape.
• Billimoria Bricks cladding.
• Power Back-up though D.G set
• 100% Redundancy with dedicated earth station.
• P32 MBPS Bandwidth by STPI dedicated
earth station.
• Zero down time.
‘Pre leased office spaces
8% to 9% rental return
The Return of
Fully furnished office spaces
1000 sq. ft -10,000 sq. ft
Koh-I-Noor
The Government of India had requested His Majesty’s
Government in 1947 for the return of Koh-I-Noor after
a declaration by Maulana Abdul Kalam Azad in the
Indian Parliament. by Prithvi Nath
The Government of India had requested His
Majesty’s Government in 1947 for the return
of Koh-I-Noor after a declaration by Maulana
Abdul Kalam Azad in the Indian Parliament.
This request had so agitated the British Public
preparing for the coronation of Queen Elizabeth
II that the demand was given up by the Prime
Minister Nehru “as it is not an art object and
now forms part of the British Crown Jewels”.
68 years after the Independence, Keith Vaz, the
longest serving MP of Asian origin, has again
raised the demand following Congress leader
Shashi Tharoor’s widely- watched speech at the
Oxford Union in which he suggested that Britain should pay reparations for the depredations
during British rule in India. According to Vaz,
“What a wonderful moment it would be, when
52 National Realty | April
September
2015 2015
Ou r Upco min g
Proje cts
Gurgaon - Sector-23 - An upcoming
Grand Housing Project (Residency - 23)
of 4 Lac sq. ft.
Approx 2000 sq ft. Super Luxury
Apartments with Ace Modern Facilities,
Club House, Swimming Pool etc.
Near to Sector 23 Market.
PM Modi finishes his visit, he returns to India
with the promise of the diamond’s return.”
When Maharaja Ranjit Singh was lying on his
death bed, he expressed his desire that this magnificent gem, of which he had been so very fond,
should be sent to the Puri Temple in the Orissa
State as his devout offering to “Jagannath” (the
Lord of the Universe), the Deity therein. Unfortunately, this last desire of Maharaja Ranjit was,
however, not carried out by his successors, with
the result that a miserable fatality readily overtook them all.
Connected as I am with Koh-I-Noor as the last
of Riga Mishrs with my ancestor Beli Ram possessing the diamond in his custody in the Tosha
Khana (Treasury), will I be able to get the will of
Maharaja Ranjit Singh honored with the return
of Koh-I-Noor to the Lord of Earth Jagan Nath
in Odisha in November 2015?
It was my privilege to dedicate the inaugural issue of National Realtys to the Lord on February
7, 2014 when members of NAREDCO Governing Council paid homage to the Jagannath Lord
at Konark, the temple of Sun God to mark the
inauguration of NAREDCO Odisha at Bhubaneshwar. Will the December 2016 Issue of NR
feature the coronation of Jagannath thus fulfilling the dream of Maharaja Ranjit Singh and
Riga Mishr as also 1.25 Billion Team India?
Bhiwadi - Residential Housing Coming Up Very Soon
Township in Bahadurgarh Coming Up Very Soon
Upcoming Project in Mumbai “Sewri” High End Exclusive Tower, with
Ultimate Specifications. With Club House, Swimming Pool, Exclusive Parkings.
Anil Suri Group
Corp. Off.:
524 Spaze IT Park, Tower B, Sohna Road Gurgaon (INDIA)
P: +91 11 8130827029 E: info@anilsurigroup.com
Mumbai (Plan)
Wanted IT related projects
in any part of the country
constructed or otherwise.

volume 2 | issue 2 - National Real Estate Development Council

Transcription

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