Tag Archives: Ashish Puravankara

Populist budget & challenges of affordable homes

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Contrary to the hype of affordable housing around the Union Budget 2017-18, many Indians across the cities are questioning how the budget has addressed the core issue of affordability.

Union Budget, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2Realty“Siddharth Chopra, a Mumbai resident has been glued to the television news channels during the live telecast of the Union Budget 2017-18. Like the rest of the Indians expecting the budget bonanza for the middle class affordable homebuyers, he is now rather confused as most of the analysts are debating how the Union Budget has addressed the pertinent issue of affordable housing.

“It is no doubt a populist budget that may earn goodwill to the government in terms of getting media headlines and garnering votes in the rural areas. But for people like us living in the metro cities, I wonder how the budget has addressed the concerns of affordable housing. The government might have redefined the affordable housing by increasing the size of the carpet area and giving it the infrastructure status, but that will address the concerns of the developers. What about the homebuyers?” questions Siddharth.

Like this confused homebuyers, many Indians across the cities are today asking this questions as to how the budget has addressed the core issue of affordability. Affordability for a common affordable homebuyer is more about the pricing than the size of the apartment. As per the standard definition of affordable housing, any house that costs more than 5 years of gross income of the buyer with the second simultaneous condition that the EMI should not cost more than 50% of the take home salary is not affordable.

Another definition often floated in the Indian context is that any house that costs approximately 20 years of rental value is affordable. The budget, if seen with the right context of affordable housing in the major cities of India, fails to answer these much-needed affordable requirements of the Indians.

Beyond symbolic relief for affordable housing

  • Increasing the size of affordable housing without reducing the price does not address the concerns of affordable housing
  • No relief in Service Tax, VAT is a dampener for affordable housing
  • No incentive for developers to reduce the pricing and make houses affordable
  • Budget fails to redefine affordable housing and low cost housing in terms of price point

The developers are nevertheless happy as the budget has addressed their concerns to a large extent. JC Sharma, MD & VC of Sobha Limited points out that the focus on affordable housing is laudable, as it has been accorded the infrastructure status which will have many ripple effects.

“Government’s proposal to take into consideration the carpet area of 30 and 60 sq. metres instead of built-up area of 30 and 60 sq. metres (as was the case earlier) of the houses is a welcome step, whereby 30 sq. metres limit will apply only in case of municipal limits of 4 metropolitan cities, while for the rest of country, including the peripheral areas of metros, limit of 60 sq. metres will apply. This will allow developers to plan their future projects within the 60 sq. metre carpet area, which will boost the housing sector immensely,” says Sharma.

Ashish Puravankara, Managing Director, Puravankara Limited believes the budget has spelt out roadmaps and allocations across various initiatives of the Central Government and the Finance Minister has done an excellent job of managing the expectations. According to him, revision of Built-up area to Carpet area is a great move to push for apartments in affordable housing category.

“The according of Infrastructure Status to the Affordable Housing will boost investment in this category. Extension of period for carrying forward the MAT Tax from the existing 10 years to now 15 years is a welcome move,” says Puravankara.

Kishore Bhatija, MD – Real Estate Development, K Raheja Corp says the government has been working towards boosting the affordable housing segment and the announcements made today are in line with their objectives. The infrastructure status to affordable housing sector is a quantum step for the development of housing.

“In addition to this, the tax relief for developers on unsold inventory is a positive step resulting in lowering the burden on their shoulders. The changes in income tax slabs are a welcome move which will leave more liquidity in the hands of consumers boosting consumption,” says Bhatija.

However, beyond the euphoria of the budget sentiment within the built environment of the Indian real estate, the fact lies that the budget has not addressed the key concern of affordability of the average homebuyers in the major cities of India. Moreover, there is hardly any substantial focus on job creation which has a direct linkage with the housing consumption in the cities, especially the affordable housing.   

By: Ravi Sinha

Puravankara, Snapdeal & JLL alliance offer residential rental returns scheme

Posted on by Track2Realty

News Point: Three-way alliance between , Snapdeal and JLL to provide unique leased asset management programme.

Puravankara Projects, Purava Amaiti, Ashish Puravankara, Ravi Puravankara, South Indian real estate market, Bangalore property market, India real estate news, NRI investment, Indian property market, Track2RealtyAt a time when the built environment of Indian real estate is debating how to promote the rental housing, an alliance by  Snapdeal, Puravankara and JLL India have initiated an innovative scheme of Managed Residences Plan for their customers.

The Managed Residences Plan functions as a dedicated long term asset management programme for leased residential real estate, supporting customers with different risk capacities to drive better value from their investment.

The three-way partnership between Snapdeal,  Ltd and JLL India, will enable customers to purchase a ready-to-occupy apartment from Puravankara across Bangalore, Chennai, Coimbatore & Kochi and lease it back to Puravankara for a contracted term of 7 years.

As a part of the contract, Puravankara will secure pre-agreed monthly rentals to the customer and pay the common area maintenance amount to the building association. This ensures that the purchaser enjoys a hassle free, uninterrupted rental returns for 7 years, along with an additional rental appreciation benefit of 8.0% every year.

The buyers, however, have an exclusive option for premature withdrawal from the lease agreement, in case they choose to occupy the apartment or manage the rental process themselves.

Puravankara has appointed JLL as the Lease Manager, to assist it in further sub-leasing the residential apartments to tenants and provide leasing related services.  JLL also offers to provide lease management services to the purchasers beyond the 7 year period, in return for a service fee. 

How managed residences plan works?

  • Customers can  purchase  an apartment from Puravankara & lease it back to them for a contracted term of 7 years
  • Puravankara will secure pre-agreed monthly rentals & common area maintenance ensuring uninterrupted returns for 7 years
  • Additional rental appreciation benefit of 8% every year
  • JLL appointed as Lease Manager, to sublease the apartments
  • Purchasers have an exclusive option of early withdrawal from the rental programme

Speaking about the launch, Snapdeal spokesperson said, “Snapdeal’s real estate category has   received a phenomenal response from customers since its launch witnessing 300% year on year growth. We have forged alliances with some of the most trusted names in the real estate industry to offer a range of housing options for our ever-expanding customer base in a hassle-free and transparent manner. We are confident that the unique Managed Residences Plan will be an exciting proposition for our customers and help them maximise benefits from their home investment.”

, Managing Director, Puravankara Projects said “At Puravankara, we are always striving to meet the evolving needs of home buyers, and the benefits offered under the Managed Residences Plan are in tandem with our Group’s vision. While developers in the past have offered rent assurances for one or two years, it is for the first time a developer has taken a 7 year long term view on rentals. This indicates our bullish view on the long term real estate story in the country”.

Ashwinder Raj Singh, CEO – Residential Services, JLL India said “We at JLL India believe that the Managed Residences Plan is a convincing answer to the challenges investors face with regards to managing their real estate investments efficiently. Buying ready-to-move-in homes rules out uncertainties around quality and possession timelines, as purchasers buy what they see. Simultaneously under this Plan, rental income is guaranteed. We are excited to associate with Puravankara on this one-of-a-kind initiative, and are sure that this offering will appeal to both local and NRI investors.”

Offering 200 ready-to-occupy residential assets in the inaugural phase of its launch across Bangalore, Chennai, Coimbatore and Kochi with investment sizes ranging from Rs 35 lakhs to Rs 3.5 Crores, the bookings for Managed Residences Plan will be open exclusively on Snapdeal for 10 days, starting May 27th and allotment of units will be on a first come first serve basis.

The exclusive launch of the Managed Residences Plan on Snapdeal allows prospective purchasers to place an Expression of Interest online, along with a nominal reservation amount, post which the developer’s representative shall assist them in choosing a unit. Those who book online during this inaugural period shall also be eligible to receive an Rs. 25,000 Snapdeal Purchase Voucher.

View: If the projected plan of Managed Residences work the way it is conceptualised, it will invite more and more developers to adopt this model. The plan has the potential to not only solve the rental housing problems but also encourage the investors of commercial properties to shift into residential segment, as they have already burnt their fingers with assured return schemes in that segment.