GROUND ZERO - Even Gold & Cars Fail to Attract Home Buyers Keen on Price Cuts : The Economic Times

New Delhi| Mumbai| Kolkata



Unsold residential properties in top six cities of the country rose to 853.09 million sq ft in the quarter to March

Thirtythree year old HR executive Kaustubh Pradhan has been on the lookout for a house in Mumbai for the past few years.He has come close several times, but unlike many of his friends, never managed to cross the bridge. Occasionally, when he does find a good option, the seller's price expectation puts him off.

Now, looking at the state of the market and the stress among builders, he has come to the conclusion that it is best to wait, for a further price cut might be round the corner. This is a really strange situation, though. Builders and investors, who are desperately looking to offload their properties, in this case apartments, are doing everything they can with one unique offer of a subvention scheme trumping another equally superb plan. To sell an apartment, a gold coin is competing with a car today.

But the buyer, with eager expectations of a price cut, doesn't want to buy. He is willing to wait. “Every time he goes out and sees the hoardings, the buyer sees more lucrative schemes,“ says Sunil Rohokale, managing director of ASK group, which manages a PE fund that invests in residential housing projects across India. “He is still expecting more concessions, more financial flexibility in the future for him. It's the perceived benefits that are stopping him from buying.“

Housing inventory in the top six cities rose to 853.09 million sq ft, or about 650,000 apartments, in the quarter to March from 832.09 million sq ft in the previous quarter, according to property research firm Liases Foras.

Among all markets, the NCR had the highest inventory at 321.68 million sq ft, which will take about 71 months to get sold at the current pace of sales. The Mumbai Metropolitan Region (MMR) was the next with 192.27 million sq ft that will take 46 months to be sold. Bengaluru was among the best performing markets among the larger ones with 152.43 million sq ft that will take 27 months to sell.

These are scary numbers for buyers as well as real estate firms, which have been reeling under a liquidity crisis for the past few years. These numbers also illustrate how things could go wrong in a highly price-sensitive industry that is susceptible to the vagaries of consumer sentiment, interest rate and commodity price changes.

Renu Sud Karnad, managing director of Housing Development Finance Corporation, India's largest mortgage lender, says a lot of buyers-to-be are waiting for interest rates to come down. “Also, that syndrome that prices will come down and we should wait is also there,“ she says.Karnad points out that there is a lot of talk about interest rates in the news and people get influenced. “People think that if interest rates come down, the economy will improve, builders will also pass on the benefit and prices will come down,“ she says.

According to her, builders are, in a convoluted way , bringing down property prices through subvention schemes. In some of these, buyers need to pay only 30% at the time of booking and the rest at the time of possession. Comparatively lower prices and the hope that interest rates will come down further should push people to start buying homes by Diwali, she forecasts.

“Usually, we all think that when prices come down, demand improves. However, the reverse is turning out to be true now as buyers are expecting more reduction in prices and, therefore, not acting right now,“ says Yashwant Dalal, president of Estate Agents Association of India. “In Mumbai particularly, uncertainty over government policies on housing and lack of clarity on property tax is holding buyers back.“

But there are other serious aspects too that have buyers worried.

Tanuj Duhan, who works with a telecom MNC in Gurgaon and is looking to buy a second home, says the option today is between buying a ready-to-move-in apartment or one that is under construction.

Prices of ready property are still high and unaffordable. In comparison, there are dime a dozen schemes to sell new properties in which prices are reachable, but there is one big problem.

“When I go see these under-construction properties, they haven't moved much in the past one year. Then we keep hearing from friends about their homes being delayed, by years, and that thought is scary,“ says Duhan.

Of the 17 lakh apartments launched between 2008 and 2011, 55% were delayed by at least one year and 20% by over 48 months, many of which have still not been completed, according to Liases Foras. That is a long wait for a home. Every other day, there is news of buyers agitating against the very builders that these new buyers might buy their homes from. It is a hard fact to digest for them and many are apprehensive.

Abhay Khemka of Gurgaon-based real estate brokerage firm Khemka Investments and Properties says people are playing a cautious game also because despite what the new government had promised in the last year or so, nothing much has changed on the ground.

“Buyers want to see real change on the ground before they put in money into the biggest purchase of their lives,“ he says.Till then its futile competition between builders to sell of inventory by bringing down prices, says Champalall Baid, director at Champalall and Co, a Kolkata-based real estate firm. “Despite the lower prices, there are still no takers. Buyers are deterred by the negativity in the outlook of the government,“ he says.

Quikr in talks to buy Housing.com in cash and stock deal estimated at Rs 1,100 crore : The Economic Times

BENGALURU: Online classifieds portal Quikr is in talks to buy Housing.com in what will amount to distress sale of the real estate listings startup which has lurched from one controversy to another in the past year. 

According to three people directly aware of the development, the cash and stock deal could be struck at up to Rs 1,100 crore ($175 million) depending on the stock-cash split. The details are being worked out. During its last round of funding in November, Housing was valued at Rs 1,500 crore ($250 million).

In that round, SoftBank led a $90-million investment in the Mumbai-based company. The Japanese conglomerate is the biggest investor in Housing, and is estimated to have invested $70 million. "Right now the deal is 70 per cent in stock; if the stock amount is over 80 per cent then the valuation can increase to $175 million," said one investor in Housing. Representatives of Quikr and SoftBank did not reply to emails seeking comment. In response to a questionnaire from ET, Housing's outgoing CEO Rahul Yadav wrote, "Joke of the year." 

"There have been talks (with Quikr), but there are other things to get sorted out first," said one of the sources, referring to the imminent management overhaul at Housing where Yadav, 26, has resigned as CEO. He cautioned that the deal is yet to reach the final stage of negotiation or financial due diligence. The deal hinges on the outcome of Housing board's meeting scheduled to be held on Tuesday when investors will seek to remove Yadav as CEO, the source said. 

For Quikr, which is one of the eight so-called Indian 'unicorns' with billion-dollar valuations, the addition of Housing will open up a new revenue stream and add a well-known brand to its portfolio. Nearly a dozen investors including Tiger Global, Warburg Pincus, Steadview Capital and Norwest Venture Partners have pumped around $360 million in six funding rounds so far. This includes $150 million it raised in April this year, valuing the startup at over $1 billion.

Earlier this year, Quikr founder Pranay Chulet said the company will hire 500 people to beef up its online real estate business, Quikr-Homes.com For the investors in Housing, the deal will give them a chance to be a part of a larger business and cut their losses in a company whose fortunes have dwindled rapidly because of a spate of controversies triggered mostly by Yadav.Yadav, who led a dozen college-mates from IIT-Bombay to start Housing in 2012, has had public spats with venture fund Sequoia Capital and disparaged the intellectual worth of investors in his company. He resigned at the end of April, but was asked to stay on by the board which appointed a committee to oversee operations. 

"The investors have been looking to exit for some time now — the startup has been making news for all reasons except the market it addresses," said a person familiar with the talks. 

So far, Housing has raised around $140 million from four investors including SoftBank, Helion Venture Partners and Nexus Venture Partners. As reported by ET last week, Yadav agreed to step down as CEO, with an announcement expected on his departure during the next board meeting on July 1. The agenda of the meeting is to finalise talks with Quikr and come up with a restructured top management and head for Housing.com

Rahul Yadav owns about 4.57 per cent of Housing.com and at a valuation of about Rs 1,500 crore, his stake is worth Rs 68 crore. The company has over 2,000 employees.

Housing.com currently has an Esop pool of 4 per cent, with the total number of outstanding Housing-.com shares standing at 7.15 million. Helion Ventures and FalconBSE 1.00 % Edge own about 10 per cent each, while SoftBank owns some 32 per cent and Nexus Venture 19 per cent. 

‘Draft housing policy not key for people’s representatives?’ : The Times of India

Mumbai: Merely seven of the 433 MLAs, MLCs and MPs in the state have responded to the draft housing policy more than a month after receiving it.

This "lackadaisical approach" has angered citizen activists, who wonder whether the draft policy is important to people's representatives.

G R Vora, a member of Citizens' Federation of F-North Ward, for one, said, "It is shocking that only seven people's representatives have replied to the draft. They are expected to give vital suggestions on the policy and point out the flaws and suggest changes for the benefit of the state's overall housing scenario."

The draft policy proposes a government land bank by pooling in plots that belong to state bodies such as BMC, MIDC, Cidco, Mhada and MMRDA for affordable housing. The main objective is 'housing for all' or 19 lakh homes by 2022, through continuous creation of the land bank.

The state government's housing department came up with the draft policy on May 15. Since the policy is for the people, the government expects suggestions and objections from their representatives before finalizing the draft. "Once these are in, we will upload the draft policy for one more month for the public. They will also have the right to make suggestions."

While the department got seven responses, Ravindra Waikar, minister of state for housing, said he has not received any. "Although it will take some more time to finalize it, the policy would be ideal for the state. We are in no hurry."

Amin Patel, Congress MLA from Mumbadevi, said, "We need more time to respond as the draft is over 90 pages long. I have consulted experts to suggest a few changes as some points are against my voters in south Mumbai. I will send my reply soon."

18,500-cr projects on cards to better city’s railway connectivity : Hindustan Times

MUMBAI: Expect better connectivity between Mumbai and the Mumbai Metropolitan Region ( MMR) i n the near f uture. Reason: The road map for the next phase of the Mumbai Urban Transport Project (MUTP) is all set to be drawn up.

Senior railway officials will soon plan infrastructure projects worth Rs18,500 crore to increase their network in the MMR and enhance capacity of local trains.

Railways minister Suresh Prabhu on Monday asked the Mumbai Rail Vikas Corporation Ltd (MRVC Ltd) as well Central Railway ( CR) and Wester n Railway (WR) to start preparing the road map for MUTP 4. The minister was visiting Dadar station to inaugurate the integrated security system (ISS).

According to railway officials, the key rail projects that will be part of MUTP 4 include the Virar-Vasai-Kopar-Panvel suburban cor ridor, which will connect the western suburbs with new growth hubs in Raigad. Constructing the third and fourth line between KalyanKasara and Kalyan-Karjat to increase the capacity of CR’s suburban section will also be taken up. Another key project will be laying an additional line between Karjat-Khopoli.

Prabhu’s directive indicates his keenness to plan for such projects well in advance. “It is always observed that by the time we plan and construct infrastructure, the demand increases manifold and we lag behind in matching the supply-demand ratio. Therefore, the MRVC and Railways should start planning and preparing for MUTP 4 right now,” said Prabhu.

While MUTP I and 2 was largely focused on increasing road and rail capacity within Mumbai, MUTP 3 focuses on expanding the rail network across the MMR. Similarly, MUTP 4 is being planned to enhance connectivity in the MMR.

“Our vision behind MUTP is to bring down the congestion in suburban railways. If not all, we will try to bring down the congestion in some sections by expanding the network. Providing an alternate rail route also reduces the burden on existing rail routes to some extent,” said a senior railway official, requesting anonymity.

Besides, the railway is also trying to push premium elevated airconditioned rail corridors between CST-Panvel, Andheri-Virar and Kurla-Thane-Bhiwandi.

However, these corridors will not come up under MUTP. They will be constructed on a publicprivate-partnership (PPP) module or with government funding involving all stake holders like local bodies. The railway ministry and the state on Sunday launched Rs11,000-crore worth projects under MUTP 3.

Civic chief digs to find the hole truth : Hindustan Times

1,277 POTHOLES YET Mehta takes to the streets to review condition of city roads after several complaints

MUMBAI: With the pothole count crossing the 1,200 mark this monsoon, the civic chief took to the streets on Monday to review the city roads.

On Monday, the pothole count reached 1,277 across the city.

After being bombarded with complaints, Ajoy Mehta has started assessing road repair works in parts of western suburbs.

During the visit, Mehta asked ward and civic road department officials to keep a strict check on the material used to fill potholes.

Over the past few days, several cases have been reported where f illed potholes were washed away owing to the poor quality of material used.

Facing flak for shoddy work, Mehta on Monday visited John Baptist Road in Bandra (West) and Nehru Road in Vakola to check the progress on road repair work.

The Bandra, Khar Road (H-west) ward has reported more than 50 potholes, while the number was 10 in Santacruz, Bandra East (H-east) ward. The BMC is using patchmaker and wonder patch technology to fill potholes.

“Taking note of the washout of recently-filled potholes at various places, the municipal commissioner has instructed us to check the material strictly. Also, he asked us to explain how pothole filling is done,” said a civic official who was part of the visit.

“He was satisfied with the work, but suggested monitoring it regularly and clearing the roads of encroachment,” added the official.

Most of the 1,277 potholes were reported on the voice of citizens’ website. Of these, 55 potholes have formed on newlybuilt roads.

Further, 60 potholes are reported on roads under a guarantee period, while 38 are reported on roads where potholes were already filled.

Till Monday evening, the civic body claimed to have filled 851 potholes.

The Brihanmumbai Municipal Corporation has constructed at least 842 new roads at the cost of Rs2,000 crore over the past one year.

‘Why delay in setting up panel to hire staff to deal with illegal buildings?’ : THE TIMES OF INDIA

MUMBAI: The Bombay HC on Monday frowned upon the BMC chief for delay in setting up a panel to decide on recruiting staff to deal with illegal constructions. A bench of Justice Abhay Oka and Justice Revati Mohite-Dere said the civic chief took five weeks to constitute the committee for "such important work". 

On April 17, the HC directed the panel to be formed on a PIL by Sayyad Rizvi regarding inaction on his complaints of nearly 3,000 illegal structures on Madh-Marve Road in P North ward (Malad-W). His advocate Diwakar Dwivedi said more constructions have come up after the order. The judges rapped the ward office for carrying out only three site visits. "In Mumbai, you don't have manpower to deal with illegal structures. You could not have waited for telling the court that you have no manpower but moved the government to create the posts," said Justice Oka. 

The court said BMC promptly acts when it issues eviction notices at property owners' behest. "When it comes to such structures, you say you don't have staff," 

4 lanes for NH-17 in Karnala sanctuary : The Times of India

Mumbai : Wildlife Board Overturns Own Decision That Put Curbs On Widening In Core Area

Six months after it restricted the widening of the NH-17 Mumbai-Goa highway through the core of the Karnala Bird Sanctuary, the National Board of Wildlife (NBWL) has overturned its decision.

The NH-17 will be widened to four lanes from the current two lanes. The NBWL cleared the proposal in its 34th meet ing early this month on the grounds “that widening within the sanctuary will smoothen the traffic and reduce foul emissions from recurring traffic jams, which are harmful for birds and other wildlife“.

Last December, the NBWL had allowed widening of the highway but on the condition that it be restricted up to 1 km on both sides from the boundary of the sanctuary . There was to be no widening in the core area of the sanctuary . The sanctuary has a 10-km eco-sensitive zone around it. The NBWL had also restricted the speed in the sanctuary to 30 kmph.

The committee, in its December order, had directed setting up of speed breakers, barriers and channelization of traffic within the existing lanes of the road passing through the sanctuary to facilitate a smooth flow. The order further said there should be controlled movement of traffic in the sanctuary with proper signals on the boundaries of the sanctuary . The new order has done away with all the earlier restrictions and safeguards.

The NBWL, in its new order, recommended the project and directed that a team comprising a representative of Wildlife Institute of India, NHAI and chief wildlife warden of Maharashtra undertake a site visit, agree on feasible mitigation measures including those for reptiles, within and outside sanctuary along the 3.5 km stretch which will be widened in a month.

Lower Provisioning for Home Loans Sought : The Economic Times

New Delhi:



PSBS THINKING Move may lower interest rates & boost demand in struggling construction sector that has big job potential

Banks have asked for lower provisioning requirement on housing loans, saying that it will help bring down interest rates and boost demand in the struggling construction sector that has big job creation potential.

The issue was discussed with the Reserve Bank of India and the government at a performance review meeting held earlier this month.

The suggestion was made amid concerns over banks not passing on the benefit of rate cuts announced by the central bank, a senior government official told ET.“There was a suggestion. It may be discussed further,“ the official said. The RBI has cut its policy rate by three quarters of a percentage points over the past six months, but banks have passed on less than half that reduction. They have reasoned that their balance sheets and higher rates on the government's own small savings schemes were impediments towards bringing down interest rates.

Some private banks argued that reduced risk weights on housing loans will incentivise lenders to quickly bring down their interest rates in this segment, the official said. Risk weight is the proportion of loans which is counted towards total assets against which banks have to maintain statutory reserves. A high risk weight discourages lending by increasing the capital requirement for lenders.

According to existing guidelines, the risk weight allocation for individual housing loan up to ` . 75 lakh is 50%. Above that, the weight in creases to 75%. “Reducing risk weights is a regulatory decision.The government, however, will take steps to support PSBs (public sector banks),“ the official said.

“These loans are a secured exposure. The RBI should look to bring it (risk weight) down to 20-25% for . 75 lakh, which will all loans below ` help banks to bring down their interest rates by 25-50 basis points,“ said one of the bankers who attended the meeting.

As per finance ministry data, nonperforming housing sector loans are very low.

The nonperforming assets ratio of PSBs in housing loans fell to 1.25% as on March 31, 2015 from 1.39% a year earlier. Overall, the gross NPAs for state-run banks stands at more than 5%.

Interest rates on home loans have come down into single digits after the latest round of cuts, but are still seen expensive by the borrowers at around 9.75%.

“The bucket on risk weights by the RBI for loans up to ` . 75 lakh is the same and there is a need for innovation. Besides, today, in any metro or Tier I city, most properties range between `. 45 lakh and `. 75 lakh. They can look at various combinations,“ said another banker. The government has directed PSBs to achieve 30% growth in their portfolio towards priority sector housing loans, where it has halved to 5.12% at the end of March 2015 from 11.47% in the previous fiscal year.

Santa Cruz-Chembur Link Road extension gets a leg-up : DNA

Mumbai: After having prepared a concept plan, the Mumbai Metropolitan Region Development Authority (MMRDA) is making the Detailed Project Report (DPR) to extend the Santa Cruz-Chembur Link Road (SCLR) right up to the Western Express Highway.

“This project will ease congestion at Imam Ahmed Raza Chowk in Kapadia Nagar as well as outside the University of Mumbai entrance in Kalina,” confirmed UPS Madan, MMRDA commissioner.

The road width is narrow near the Kalina campus, making it a congested spot.

Last August, dna had reported that the MMRDA was working on a plan to have an elevated road between Kurla and the Western Express Highway in Santa Cruz. As per the plan, a flyover and an underpass will be built.

The 3-km-long bridge has an estimated cost of Rs300 crore. It will come up just before the chowk, criss-cross the Kalina campus-Maharashtra Fire Services Academy-Grand Hyatt hotel, take a right turn for the Western Express Highway, and then cross over the Vakola flyover to land just before Vakola junction on the service road. There will be ramps in between to enter and exit from the bridge near the university.

The proposed underpass will assist in easing traffic movement between CST Road and Bandra-Kurla Complex. At an estimated cost of Rs25 crore, the underpass will be 350 metres long and 7.5 metres wide. Motorists from Kalina proceeding towards BKC will be able to use the underpass as it will start from CST Road’s east-bound lane, some metres before the chowk and take a right turn to surface at BKC.

Motorists coming from and moving towards the business district will use the existing road, which is at a grade.

Around 70,000 vehicles ply on the SCLR daily on weekdays and is a relief for those travelling between the eastern and western areas. The existing road network of Mumbai focuses on north-south connectivity.

Land Bill Panel's Term Gets Extended to July 28 : The Economic Times

New Delhi:

The government's plan to get the joint house panel to process the contentious land acquisition bill and submit its report on the opening day of monsoon session of Parliament on July 21 faces a fresh hurdle.

Bowing to demands from the Opposition members, the panel's term was on Monday extended by a week to July 28.This means the government will now have a window of just a fortnight to get the report submitted in time for being taken up during the monsoon session, provided the members of the panel do not press for further extensions.The industry and investors are eagerly awaiting the passage of the bill.

“The deadline of the joint house committee on land acquisition bill has been extended by a week to submit its report as most of the members have been pressing for extending the time frame because they want to have more witnesses and stakeholders examined, given the importance of the bill,“ a person privy to the development said.

Another person said even after the government stands to lose one week in the three-week session, further extensions to the panel cannot be ruled out.

“Since the Congress and other Opposition members in the panel have been seeking one-month extension to the committee, one can't rule out the members pressing for another extension,“ he said.





State's slum rehab scheme is a gold mine for builders : The Times of India

Mumbai:



Slum enclaves in prime localities of the city have turned out to be gold mines for private developers.

In an irony of sorts, some of Mumbai's most expensive luxury residential skyscrapers have been built on slum land as part of the state government's controversial slum rehabilitation scheme, popularly known as SRA. These slum sprawls are mainly located in south and central Mumbai where high-end apartments sell for between Rs 25,000 and Rs 50,000 a sq ft.

For instance, India's tallest twin residential buildings, Imperial Heights, at Tardeo in south Mumbai, were built as part of a slum rehab scheme. At Worli, a Ritz-Carlton hotel is coming up on a slum sprawl.

Twenty years after it was introduced to rehouse eligible slum families free of cost in new buildings, the scheme has allowed builders to rake in super-normal profits. For those who have ventured into this scheme, the returns are phenomenal. But many prominent builders still stay away from it because they do not want to deal with extortionist slum lords, political goons and sometimes, the underworld.

The government's largesse is extra generous. The public land on which the slum is located is virtually given away for a pittance to the developer, who pays just 25% of the plot's ready reckoner ra te. The cross-subsidy scheme mandates that the developer who manages to procure consent of 70% of slumdwellers, must rehabilitate them free of cost in new buildings in a portion of the plot. As compensation, the builder receives additional construction rights to build luxury towers and sell them in the open market. To entice high net work income indi viduals to invest in properties on slum land, slum redevelopers and their marketing team go the whole hog. Like this brochure for an upcoming slum redevelopment project in prime Worli: “ After a hard day's work, imagine entering a gated complex in the middle of the city , handing over your car to a valet and entering an elevator that opens straight into the living room of your duplex sky bungalow. You flip a button and the curtains part... your butler brings you your favourite single malt...'' In Tardeo's MP Mill compound, a joint venture between the construction firm Shapoorji Pallonji and builder Dilip Thacker redeveloped a large slum on a hill into two 60-storey residential towers. The shanties were demolished and around 2,500 slum families were accommodated into brand new buildings. Each family was allotted a 225 sq ft tenement free of cost by the builder.

Imperial Heights, built on the remaining portion of the slum land, today houses corporate honchos, bankers, top lawyers and expats. Some of the larger apartments were sold for over Rs 60 crore each. Here, domestic help are randomly frisked for tobacco, alcohol and more sinister objects. Facilities include a climate-control swimming pool, a gym, a restaurant, a cigar room, a convenience store and a banquet hall.

At Annie Besant Road, Worli, a10-acre plot is probably the most lucrative slum redevelopment scheme in Mumbai at present: Oasis Realty , a joint venture between developer Vikas Oberoi and builder Sudhakar Shetty , who owned the now defunct Deepa bar in Vile Parle. The developer rehoused 2,228 slum families in 14 rehabilitation buildings, each 10 to 22 floors high. Last year, Oberoi announced Mumbai's first Ritz Carlton hotel with 238 rooms on a portion of the Worli slum plot.

“Globally , the Ritz-Carlton is known for its legendary services and they have splendid properties at the most sought-after locations worldwide. This partnership will enable us to craft an iconic development known for its unmatched quality and finest service standards for guests and residents alike. We are positive that we will add a luxury landmark to the skyline of Mum bai,“ Oberoi said.

The mix-use development on the Worli slum plot also comprises a residential component comprising two wings, each 67 floors high. Last year, one of the highvalue transactions involved actor Abhishek Bachchan, who booked a luxury apartment on the 37th floor of Skylark Towers for Rs 41.14 crore. The rate worked out to Rs 1.06 lakh a sq ft for the 3,875 sq ft flat.

Behind the upcoming RitzCarlton at Worli is another large slum project on a 10-acre plot redeveloped by Omkar, now described as Mumbai's biggest slum redeveloper. A premium residential project called Omkar 1973, comprising three skyscrapers, is coming up as part of the free sale component. “ A Sky Bungalow at Omkar 1973 comes with an envious view of the city and the Arabian Sea...Lose yourself in the luxury of space and unwind from the day's hectic pace with a relaxing dip in the Jacuzzi and swimming pool while overlooking the city's night lights,'' says the developer's swanky marketing brochure. The price of some of the “sky bungalows'' is pegged at over Rs 80 crore to Rs 100 crore each.

Just adjacent to these highend towers are new dwellings, cheek-by-jowl, where slum families have been accommodated in 1,309 tenements in ten 23-storeyed buildings by Omkar.

At J Boricha Marg in Mahalaxmi, Lokhandwala Infrastructure bagged the rights to redevelop a seven-acre slum sprawl and rehabilitate 10,000 slum dwellers.A luxury tower, over 80 floors high, has been planned on a portion of the land and some flats were sold for over Rs 25,000 a sq ft. Perhaps the most lucrative slum pocket in the island city is the 17­acre encroached plot near E Moses Road in Worli with a development potential estimated to be over Rs 8,000 crore.

For the past several years, two developers, Lokhandwala and DB Realty , fought over its redevelopment. Last year, the rival builders decided to join hands and redevelop it together. Large slum pockets along the Colaba-Cuffe Parade coastline, where property prices are some of the highest in the city, are also expected to be redeveloped soon with some prominent builders in the fray .

In 2006, a division bench of Bombay high court scathingly re marked that the slum scheme is a “profitable business venture for builders“, with the active backing of politicians. Builders have swooped down upon slum pockets located in areas where property prices are high while neglecting similar enclaves in non-prime areas.

A property redeveloper, who did not wish to be identified, said profits from slum projects are astoundingly high. “ Against an in vestment of Rs 300-400 crore for a large slum plot, the developer stands to make a profit running into a couple of thousand crores because of the government incentives,'' he said.

Real estate sources said the government must review its policy to hand over public land at a rock-bottom rate to the developer executing the slum redevelopment scheme. “It must invite global bids to sell the land to the highest bidder. This will give a level-playing field to all developers instead of a few who have the resources to manage the system,'' said sources.

Slum realty: Sky's the limit for developers : The Times of India

Slum enclaves in prime localities of the city have turned out to be gold mines for private developers.

In an irony of sorts, some of Mumbai's most expensive luxury residential skyscrapers have been built on slum land as part of the state government's controversial slum rehabilitation scheme, popularly known as SRA. These slum sprawls are mainly located in south and central Mumbai where high-end apartments sell for between Rs 25,000 and Rs 50,000 a sq ft.

For instance, India's tallest twin residential buildings, Imperial Heights, at Tardeo in south Mumbai, were built as part of a slum rehab scheme. At Worli, a Ritz-Carlton hotel is coming up on a slum sprawl.

Twenty years after it was introduced to rehouse eligible slum families free of cost in new buildings, the scheme has allowed builders to rake in super-normal profits. For those who have ventured into this scheme, the returns are phenomenal. But many prominent builders still stay away from it because they do not want to deal with extortionist slum lords, political goons and sometimes, the underworld.

The government's largesse is extra generous. The public land on which the slum is located is virtually given away for a pittance to the developer, who pays just 25% of the plot's ready reckoner ra te. The cross-subsidy scheme mandates that the developer who manages to procure consent of 70% of slumdwellers, must rehabilitate them free of cost in new buildings in a portion of the plot. As compensation, the builder receives additional construction rights to build luxury towers and sell them in the open market.

To entice high net work income indi viduals to invest in properties on slum land, slum redevelopers and their marketing team go the whole hog.

Like this brochure for an upcoming slum redevelopment project in prime Worli: “ After a hard day's work, imagine entering a gated complex in the middle of the city , handing over your car to a valet and entering an elevator that opens straight into the living room of your duplex sky bungalow. You flip a button and the curtains part... your butler brings you your favourite single malt...'' In Tardeo's MP Mill compound, a joint venture between the construction firm Shapoorji Pallonji and builder Dilip Thacker redeveloped a large slum on a hill into two 60-storey residential towers.

The shanties were demolished and around 2,500 slum families were accommodated into brand new buildings. Each family was allotted a 225 sq ft tenement free of cost by the builder.

Imperial Heights, built on the remaining portion of the slum land, today houses corporate honchos, bankers, top lawyers and expats. Some of the larger apartments were sold for over Rs 60 crore each. Here, domestic help are randomly frisked for tobacco, alcohol and more sinister objects. Facilities include a climate-control swimming pool, a gym, a restaurant, a cigar room, a convenience store and a banquet hall.

At Annie Besant Road, Worli, a10-acre plot is probably the most lucrative slum redevelopment scheme in Mumbai at present: Oasis Realty , a joint venture between developer Vikas Oberoi and builder Sudhakar Shetty , who owned the now defunct Deepa bar in Vile Parle. The developer rehoused 2,228 slum families in 14 rehabilitation buildings, each 10 to 22 floors high. Last year, Oberoi announced Mumbai's first Ritz Carlton hotel with 238 rooms on a portion of the Worli slum plot.

“Globally , the Ritz-Carlton is known for its legendary services and they have splendid properties at the most sought-after locations worldwide. This partnership will enable us to craft an iconic development known for its unmatched quality and finest service standards for guests and residents alike. We are positive that we will add a luxury landmark to the skyline of Mum bai,“ Oberoi said.

The mix-use development on the Worli slum plot also comprises a residential component comprising two wings, each 67 floors high. Last year, one of the highvalue transactions involved actor Abhishek Bachchan, who booked a luxury apartment on the 37th floor of Skylark Towers for Rs 41.14 crore. The rate worked out to Rs 1.06 lakh a sq ft for the 3,875 sq ft flat.

Behind the upcoming RitzCarlton at Worli is another large slum project on a 10-acre plot redeveloped by Omkar, now described as Mumbai's biggest slum redeveloper. A premium residential project called Omkar 1973, comprising three skyscrapers, is coming up as part of the free sale component. “ A Sky Bungalow at Omkar 1973 comes with an envious view of the city and the Arabian Sea...Lose yourself in the luxury of space and unwind from the day's hectic pace with a relaxing dip in the Jacuzzi and swimming pool while overlooking the city's night lights,'' says the developer's swanky marketing brochure. The price of some of the “sky bungalows'' is pegged at over Rs 80 crore to Rs 100 crore each.

Just adjacent to these highend towers are new dwellings, cheek-by-jowl, where slum families have been accommodated in 1,309 tenements in ten 23-storeyed buildings by Omkar.

At J Boricha Marg in Mahalaxmi, Lokhandwala Infrastructure bagged the rights to redevelop a seven-acre slum sprawl and rehabilitate 10,000 slum dwellers.A luxury tower, over 80 floors high, has been planned on a portion of the land and some flats were sold for over Rs 25,000 a sq ft. Perhaps the most lucrative slum pocket in the island city is the 17­acre encroached plot near E Moses Road in Worli with a development potential estimated to be over Rs 8,000 crore.

For the past several years, two developers, Lokhandwala and DB Realty , fought over its redevelopment. Last year, the rival builders decided to join hands and redevelop it together. Large slum pockets along the Colaba-Cuffe Parade coastline, where property prices are some of the highest in the city, are also expected to be redeveloped soon with some prominent builders in the fray .

In 2006, a division bench of Bombay high court scathingly re marked that the slum scheme is a “profitable business venture for builders“, with the active backing of politicians. Builders have swooped down upon slum pockets located in areas where property prices are high while neglecting similar enclaves in non-prime areas.

A property redeveloper, who did not wish to be identified, said profits from slum projects are astoundingly high. “ Against an in vestment of Rs 300-400 crore for a large slum plot, the developer stands to make a profit running into a couple of thousand crores because of the government incentives,'' he said.

Real estate sources said the government must review its policy to hand over public land at a rock-bottom rate to the developer executing the slum redevelopment scheme. “It must invite global bids to sell the land to the highest bidder. This will give a level-playing field to all developers instead of a few who have the resources to manage the system,'' said sources.

MMRDA ‘in the dark’ over Metro plans : Hindustan Times

MUMBAI: 

The proactive role officials of the chief minister’s office (CMO) seem to be playing in deciding the city’s metro projects has not gone down well with the Mumbai Metropolitan Region Development Authority (MMRDA).

Senior MMRDA officials said bureaucrats at the Mantralaya are proposing changes in the metro routes or announcing new decisions – such as linking Metro 3 with the coastal road – without taking them into confidence.

“We got to know about the proposal to merge the Metro 3 with the coastal road through news reports,” said an MMRDA official.

In a meeting with the Delhi Metro Rail Corporation last week, a senior official from t he CMO reportedly asked t he MMRDA t o change t he proposed underground Wadala-Ghatkopar-ThaneKasarvadavali (WGTK) metro project into a fully elevated corridor – something they say is not possible along the crowded LBS road.

“A senior bureaucrat asked us to make the metro line fully elevated. However, we have informed the chief minister it cannot be constructed along the congested LBS. If elevated, the corridor will have to come up near the Eastern Express Highway, where fewer people will be able to use it,” said an official.

According to the latest plan, the WGTK line, the Metro 4, will have an underground line from Wadala to Kapurbawdi, while the rest of the stretch till Kasarvadavali will be elevated.

“It is intriguing how announcements are being made by t he CMO without studying the metro plan and consulting us. We have planned the various corridors only after carrying out required studies,” said another official.

About a year ago, the MMRDA had decided to make the Metro 2 (Dahisar- BandraMankhurd) underg round. However, it was cut into three parts and turned into an elevated cor ridor after instructions from the chief minister.

Buyers stay away from high-value homes : Hindustan Times

MUMBAI: 

Despite an overall improvement in economic sentiments, there has been only a marginal growth in residential real estate off-take in Mumbai and things have remained slow even in the premium-end of the market, say real estate analysts and developers, as consumers continue to wait for a further reduction in interest rates for a cheaper home loan.

“After almost eight quarters of slow movement of inventory in Mumbai, marginal improvement was witnessed in select micro markets at the introductory level. Retail buyers as well as investors are shying away from high-valued apartments,” says a recent report by real estate consultancy Colliers International India Research.

The Mumbai Metropolitan region has unsold inventory — houses that have not been bought — of close to 168 million square feet, which will take 45 months to sell. This is more than ideal inventory levels of not more than 12 months, says another consultancy Liases Foras.

This trend is considered significant as transactions in the Mumbai real estate signal a direction for retail purchases and also induce developers in other regions to alter their marketing strategies.

There has been oversupply in some pockets like central Mumbai, where there are multiple luxury projects under development. Despite slow demand, residential real estate prices in Mumbai rose in the JanuaryMarch quarter, according to Colliers International.

While prices in south Mumbai and central Mumbai rose 1-3%, those in the Western suburbs were up 3-8%, it pointed out. Developers attribute varied reasons for the price increase.

“The cost of construction hasn’t come down and government charges have also increased over time. Therefore, prices in Mumbai remain high,” said Deepak Goradia, vice-chairman and managing director of Dosti Realty, one of Mumbai’s largest real estate developers.

“The rise in house prices in the suburbs could also be due to improved connectivity to the business districts of south Mumbai and Bandra- Kurla Complex,” said Kamal Khetan, chairman of Sunteck Realty.

Real estate companies are also using various schemes like 20:80 — pay 20% up front and rest on possession — to lure potential buyers and fence setters. Some are tying up with home loan companies to provide low interest rate loan schemes, while others are offering discounts on registration and stamp duty to boost sales.

But volumes are still low. “The market has been slow. The time that customers are taking to make home buying decisions is still longer,” said Goradia.

Some say overall sales have shrunk to only a few good players who have all approvals in place and the financial strength to complete projects. “Potential buyers are waiting to see the turn of events like a positive shift in economy and more rate cuts to improve the home loan scenario,” Khetan said.

Coastal road to have multiple parking slots, says civic body : Hindustan Times

As activists say road will help only car owners, officials speak of launching bus service

MUMBAI: 

Parking can be as much a nightmare as driving on the city’s roads and the upcoming costal road project is set to make the problem even worse. To tackle it, the civic body has decided to develop parking facilities along the coastal road.

Brihanmumbai Municipal Corporation (BMC) officials said multi-level parking slots would be constructed at all 12 interchanges on the road that is being planned from Nariman Point to Kandivli. The roads near these interchanges may also be used for parking.

An interchange facilitates traffic movement from one road to another without requiring vehicles to stop.

BMC chief engineer (roads) Ashok Pawar said “These parking facilities will regulate the parking system effectively and ensure that traffic congestion does not occur at openings to the coastal road and nearby roads. We are working on the plan on how to develop these facilities.”

Activists blamed the civic agency f or i nvesting huge amounts of money to serve just 6% of Mumbai’s citizens.

Advocate Godfrey Pimenta of NGO Watchdog Foundation said, “The coastal road will mostly benefit car users, who account for just 6% of the total commuters in the city. The parking facilities will bring more cars on to the roads, which goes against the new government’s vision of developing a strong public transport system in the city.”

However, the BMC does plan to build taxi stands and bus stands at all interchanges, which can be used by commuters travelling on the Bus Rapid Transit System (BRTS) on the coastal road, officials said.

“Commuters who do not have cars could travel on the BRTS and get down at any interchange and take a taxi or public transport to go to any location in the city. The journey timeme will reduce significantly because cause of the faster BRTS and itss connectivity with other modesdes of transport,” said a civic officialfficial who requested anonymity.y.

There will be one to 122 taxi stands at every interchangege and each stand will have a standing nding capacity of 20 taxis. The BMC will build walkways to connect nnect the bus stands, parking slotsts and taxi stands with the coastall road.

Now, elevated 6-lane rail-road corridor : The Times of India

Mumbai:



MMRDA To Submit Feasibility Report

Chief minister Devendra Fadnavis has told the Mumbai Metropolitan Region Development Authority (MMRDA) to submit a feasibility report within two months on constructing a six-lane elevated rail and road corridor across Mumbai on single pillars above existing railway lines.

The chief minister has also proposed integration of all modes of transport, such as BEST buses, Monorail, Mumbai Metro and Railways, so that one can use a single ticketsmartcard to travel seamlessly from one corner of the city to another using any mode.

The two announcements were made on Sunday at a function at which the state government signed an MoU with the railway ministry to launch a special purpose vehicle (SPV) on a 50-50 partnership. The SPV will speed up implementation of rail projects in the state.

Sources said an integrated rail-road six-lane corridor could come up along the CST-Panvel section. Fadnavis said the state plans to invest Rs10,000 crore to strengthen the rail network across Maharashtra. He also officially launched the Rs11,441 crore Mumbai Urban Transport Project (MUTP)-III project for Mumbai region at the function.

The MUTP-III involves quadrupling of the VirarDahanu section, a new link between Airoli and Kalwa stations, a new corridor between Panvel and Karjat, redevelopment of 21 suburban stations and trespass control on tracks.

“Rail projects such as the Parli-Beed-Nagar link, a rail network in naxal-affected Gadchiroli and WardhaNanded, have been dis cussed for 15 years. But with the SPV , we will complete them within five years,“ he said.

Union railway minister Suresh Prabhu said similar SPVs will be launched in 20 states to speed up rail projects in India. A concession agreement was also signed between JSW Jaigarh Port Ltd and Konkan Railways for developing a 33.7km railway corridor, connecting Jaigarh port to the new Digni station on Konkan Railway . “International cargo from our ports will travel seamlessly to Konkan Railway , from where it will be distributed across India, enabling the railways to earn huge freight revenue and improve the GDP,“ Prabhu said, adding that the elevated road-rail concept for Mumbai had his ministry's go-ahead.

He also inaugurated a Mumbai Railway Vikas Corporation Ltd (MRVC) eoffice, which will have a transparent e-tendering process and paperless communication.

Critics slam agri land move : The Times of India

As part of its Make-in-Maharashtra push for business, the state government has further eased the rules for industrial expansion on agricultural land.In addition to hiking building rights on farm land, reported by this newspaper, the government has also dropped the requirement to convert agricultural land to non-agricultural use.

Officials say the move will cut the red tape around industrial growth on the outskirts of cities, especially for the small and medium scale sector. “The conversion of land use was a process which would take up to two years,“ points out industries secretary Apurva Chandra.

Since the mid-1990s, companies have been allowed to set up industrial units on agricultural land after informing the collector. However, since farm land is classified as a no development zone, they were given minimal building rights with FSI of up to 0.2. If industries sought to build more, they needed the permission of the urban development department to convert the land into a non-agricultural zone. Now industries do not need to seek this zone-change clearance. “Industries no longer need to approach the state government for a zone change. To avail of the additional space, they just need to pay the premium fee to the collector.

This is a major delegation of responsibility from the state to the collectors,“ said urban development secretary Nitin Kareer.

The state government, in a notification earlier this month, had allowed industries nine times the earlier building rights on agricultural land.To exploit this additional space, they merely need to pay a fee worth 30% of the land rate to the district collector.

However, critics warn that dropping the zone-change clearance will remove a crucial level of scrutiny and could pave the way for the reckless expansion of industry on farm land. “The zone change requirement was put in place to prevent fertile agricultural land from being diverted. How will the state ensure that industry does not come up on fertile land?“ asks Debi Goenka from the Conservation Action Trust.

Housing activist Chandrashekhar Prabhu warned that industries could pay to acquire additional building rights on farm land and then fail to use it. “This could result in speculation.How will the state ensure that the land is actually used to set up industry?“ he asks.

The same benefits also apply to public educational and medical institutes as well as highway amenities coming up on farm land. These were also granted additional building rights on farm land earlier this month.

The new rules will apply to areas including the Mumbai metropolitan region, Pune, Nagpur, Sangli, Kolhapur, Nasik, Ahmednagar, Aurangabad, Ratnagiri and Raigad. Also, Jalgaon, Amravati and Chandrapur.

Navi Mumbai SEZ developers may face penalties for delay : The Times of India

Navi Mumbai



While the Navi Mumbai SEZ is yet to take off, the state, through Cidco, may seek damages or impose penalties on the developers of the SEZ and also introduce a termination clause for future.

The developers failed to complete the project, missed the 2010 deadline and were given an extension till 2012. The developers yet again failed to meet the deadline and the state refused to give further extension and the project was in limbo.

Recently , however, the developers of the SEZ, Dronagiri Infrastructure Pvt. Ltd (DIPL) -owned by SKIL Infrastructure, Jai Corp Ltd and Mukesh Ambani -expressed interest in reviving the project and sought a fresh extension to finish it.Meanwhile, chief minister Devendra Fadnavis also declared his intentions of reviving the SEZ project, which was slated to bring in investment to the tune of Rs 25,000 to 30,000 crore as per a 2004 estimate.

But the state and Cidco now want to seek damages as the developer has failed to implement the project on time and have sought legal opinion. Besides, it also wants to ensure that the project is implemented in the e quickest time possible if an extension is granted. Cidco MD Sanjay Bhatia confirmed they were seeking le, gal opinion on damages and also incorporating a termination clause if the developers failed to finish the project within time.. “A decision is being taken at the highest level and new mile stones are being considered for e the project. Even if an extension is granted, we are looking at the e project being completed in r quick time,“ said Bhatia.

The damages may run up to Rs 400 crore, according to an estimate prepared by an internal Cidco t audit. However, it may be calcue lated after being legally vetted.t When this correspondent e contacted SKIL Infrastructure e Limited director Shekhar Gandhi, he refused to comment, while its marketing manager S Chaudhury said he was not authorized to comment.

Cidco had committed 2,140 hectares of the land for the project and managed to hand over 1,842 hectares to the developers from 2006 to 2008 for implementing the project. The project was to be completed in five phases and the first deadline was in 2010. But till date, there has been very little development.

“The promoters had probably lost interest due to market conditions and had not even developed 10 percent of the land allotted to it,“ said a Cidco official.“The promoters too have their grouses and claim Cidco has not met its own commitments,“ another official pointed out.