Tag Archives: Hospitality India

Lemon Tree to launch its fifth hotel venture in Hyderabad

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Lemon Tree Hotels, operating various luxury hotels across India, has announced the launch of their brand new Lemon Tree Hotel in Hyderabad. The new hotel is a Luxury Hotel having 267 rooms and will be Lemon Tree’s fifth hotel venture in South India. With addition of Hyderabad property, the company now owns and operates an inventory of 1500 rooms across its 14 properties in India.

Patu Keswani, Chairman and Managing Director of Lemon Tree Hotels said, “Our profitable growth has been driven by an end-to-end business model which has led to a 60 per cent year-on-year growth in rooms over the past five years. We design, build, own and operate all our hotels. This ensures that our customer’s experience is consistent across India”. Moreover, the company is planning to add another six hotels to its current portfolio by the next two tears.

Like any other Five Star Hotel in Hyderabad, this new Lemon Tree property features a fitness center, a spa facility, Fresco – rooftop swimming pool and a fully equipped business center. The dining facilities in the hotel are made excellently including ‘Kebab Theater’ which showcases the char grilled and tandoori delicacies from different regions of country.

A tea lounge is set there offering the guests with the fine selection of herbal teas and coffees from across the world and a Pan-Asian Restaurant is also established in the hotel. All of these facilities make it a fabulous Hyderabad Luxury Hotel.

CBDs losing sheen to PBDs

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By: Ravi Sinha

SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, Mumbai Real Estate, India PropertyCentral Business Districts (CBDs) are supposed to be the lifeline of the city and a mirror of the economic activity and real estate market trend. However, the real estate boom in the last over a decade now, added to the leaps and bounds growth in the economic activity has upset the conventional outlook over the CBDs and the traditional business centres across the country are fading away as the benchmark of economic activity. The economic upswing has fuelled the infrastructure growth that has led to the concept of suburbs. Hitherto seen as the second choice for the business and living, gradually these peripheral centres have started redefining the concept of business districts. Today the CBDs in almost all major cities are losing sheen to the PBDs (Peripheral Business Districts).

It all started with Gurgaon in the NCR coming into prominence for the multinationals and FDI compliant business, then Navi Mumbai got the big ticket projects over its traditional CBDs in South Mumbai. Experts believe traditional CBDs were designed by the town planners who had no exposure to the international CBDs. The businesses then were local and catered to an economy with a GDP of 1 per cent of that time. Now India a global economy, with GDP of 9 per cent and above, needs global thinking in the design and the real estate conducive to this is not in the Metros, but in the satellites destinations to such metros, like Gurgaon to Delhi and New Mumbai to Bombay.

Atul Modak, Head of Kohinoor City agrees to it when he says that it is no longer a matter of pride to have an office in Nariman Point in Mumbai. “ICICI, National Stock Exchange, Reserve Bank of India so much so that even our prestigious diamond bourse, all have set up their offices at BKC, not to speak of MCA, Asian Heart Hospital and Dhirubhai Ambani International School. The American Consulate too is shifting to BKC. In spite of this, Nariman Point still remains one of the priciest commercial areas in the world making it even more unviable. Look at the influx of new offices in Upper Worli, Andheri, Malad, Powai etc making them the new CBDs in demand. That speaks for itself. Other factors influencing this trend could be the connectivity, infrastructural development and proximity to residences,” he says.

Madhusudan Thakur, Country Head, Regus suggests that apart from the standard concerns of infrastructure, safety and ageing buildings, another major concern is commuting, largely many companies want to be nearer to their employees, which can mean an alternative location is more desirable, therefore assets in CBDs do present a challenge. “Smart companies have realized that the answer to the challenges posed by the lack of options in CBDs is a blend of different types of working that put employees where and when they need to be there. For some companies, this will be a distributed workforce, across a wide variety of locations such as home, a CBD office and remote locations such as business centers. Actually any day of the week you can see this at our own Regus business lounges, which give corporate members access to our network of 30 centres across the country,” he says.

Sunil Dahiya, Managing Director of Vigneshwara Developers that has recently launched a SOHO (Small Office Home Office) in Gurgaon as the next generation of PBDs believes India is taking a tectonic shift from 2G to 3G in all spheres, be it telecom to automobiles to banking. Therefore real estate cannot be behind and has to adapt to the new generation Indian and global expatriates working out of the CBDs.

“For a knowledge worker in the traditional CBDs 50 per cent of his CTC is spent on the road traffic and his personal performance is undervalued by half. Therefore, at an annual rental starting at 4.5 lakhs, it makes prudent sense for any corporate to give a SOHO in the CBD to its top executives, making ‘walk-to-work’ for faster mobilisation of human resource. The pattern of Mon to Friday working out of a SOHO and a weekend getaway to a lavish farm on the outskirts for his weekends is going to be witnessed. A quick power nap of an hour in a SOHO within the CBD will energize the executive for another 5-7 hours of productivity through the late night office hours,” he says.

Harinder Dhillon, VP, Marketing, Raheja Developers agrees that SOHO is the future and world over the economy is adopting it in a big way since that is the need of the hour. He, however, still finds traditional CBDs a value for money. “If we look at Connaught Place in Delhi or Nariman Point in Mumbai, these markets have revived in a very big way on capital values as well as lease rentals. A similar story has unfolded on Anna Salai in Chennai & Bangalore MG Road/Brigade Road,” he says.

Indian investors flocking to Dubai property market

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Dubai Real Estate, Abu Dhabi, UAE, Burj Al Arab, Dubai Marina, Palm Jumeirah, Burj Downtown, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyA growing number of investors from India are showing interest in Dubai as they look to capitalize on 60 per cent savings per square foot in the Dubai property market, a Dubai-based real estate company has said.

DAMAC Properties said in addition to the price disparity, Dubai’s property market is becoming increasingly attractive to foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners.

“As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the Emirate’s real estate market,” it said in a statement.

At an average price per square foot of $264 in Dubai, according to Colliers International, properties are now 60 per cent less expensive than in central Mumbai, where the price per square foot is $664, according to Jones Lang LaSalle.

The DAMAC Properties Senior Vice-President, Mr Niall McLoughlin, said: “At DAMAC Properties, we have seen a marked rise in interest across our Dubai portfolio from Indian investors; in January 2011 we had double-digit growth in inquiries on the same period last year.

“Not only are we seeing a surge of interest from potential Investors from India but also from other emerging markets such as sub-Sahara Africa and China who are looking for quality assets, at competitive prices.”

According to Mr McLoughlin, even though confidence was shaken following the global slowdown, the introduction of new regulations in Dubai gives property buyers more security over their investments. DAMAC Properties has also welcomed the return of liquidity into the mortgage market, which it cites as another major factor in the revival of the Emirate’s real estate sector.

“Now that banks and financial institutions have begun to regain confidence in the market, and are again in a position to offer financing packages, it will start to address the issue of oversupply — one of the major factors in the sector’s devaluation,” he said.

Housing bubble trouble in India, says Global Property Guide

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2nd of the series of report

Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Faridabad property, Real Estate India, Real Estate FaridabadIndian house prices rose rapidly from 2002 to 2007. Strong economic growth and urbanization supported house prices, while in city centres a housing bubble was encouraged by inadequate infrastructure, lack of planning and antiquated land use laws.

From 2005 to 2007, the Indian economy grew annually at 8.9% per annum, making the country one of the world’s fastest growing, after 7.6% per annum growth from 2003 to 2004.

The liberalization of major sectors of the Indian economy during the early 1990s brought a rapid influx of foreign direct investment (FDI). A boom in the ICT and BPO industry generated rapid employment growth, increasing demand for housing, and caused a ripple effect in the construction and telecommunications sectors.

Yet although house price increases were supported by these strong fundamentals, speculation also played a role. From 2000 to 2006, residential property became significantly less affordable. By 2002, a residential property in Mumbai cost around 85 times the average annual average income. By 2006, residential properties in Mumbai cost 100 times the average annual income.

The capital of developers rapidly grew as their stock prices increased. Developers used the capital to bid high prices for huge plots of land, making it relatively easy to sell properties at very high prices.

The impact of the global crisis

In the global downturn of 2008, developers resorted to rounds of price cuts, and introduced lucrative deals, with subsidized furniture and internet connections.

Demand for luxury housing fell 50%, while affordable housing demand fell 10%, according to a May 2009 survey by the Associated Chambers of Commerce and Industry of India (Assocham), the umbrella body of chambers of commerce in India.

Developers refocused on low-income houses.

Global financial meltdown leading to realty boom in Punjab

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SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, Mumbai Real Estate, India PropertyGlobal financial meltdown and the NRIs fear psychosis with the collapse of financial institutions seems to have by default been the catalyst to the realty boom in Punjab. Punjab has, of late, been heading to a realty boom with the top realtors showing interest in land acquisition and projects. If the interest shown by realtors like DLF, Emaar MGF and Tata Housing is any indication, Punjab is turning out to be a promising market from the realtor’s perspective.

The state better known for its green revolution and significant contribution towards agriculture is now catching fancy for realtors in a big way who are looking ahead of the northern capital territory (NCR) region.

Sunil Dahiya, Managing Director of Vigneshwara Developers believes the NRI community of Punjab has been the demand drivers and the developers have sensed this pulse of the market. “With the financial institutions collapsing in several other countries, the NRI community of Punjab now wants to park their money into the safe territory and real estate is definitely the best investment instrument in the asset class,” he says.

Tata Housing Development Company Limited (THDC) CEO Brotin Bannerjee agrees that Punjab holds distinction of having a massive NRI population mainly residing in the developed countries of Canada, England and America. “Punjab enjoys one of the highest per capita incomes in India for the past several years. Not just the state leads in agricultural and business activities in the country As far as investing in real estate in Punjab is concerned, the environment is quite conducive at present. As there is lot of economic progression happening in Punjab there is opportunity for us to develop both, affordable and premium segment housing,” he says.

Tata Housing Development Company Limited (THDC) plans to invest around Rs 2,000 crores in Punjab, Himachal and in the periphery of Chandigarh as part of a long-term expansion plans has substantial part of investment lined for Punjab.

Similarly, Emaar MGF the joint venture between Dubai based Emaar group PJSC and MGF development of India which has around 3,500 acres of land in Punjab believes the state is traditionally a prosperous region marked by significant propensity for consumption and aspiration levels, Punjab and its people have a penchant for best-in-class communities townships owing to its close global linkages.

Kerala realtor in Doha to promote project

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SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, Mumbai Real Estate, India PropertySFS Homes, a noted builder from the south Indian state of Kerala, is in Qatar to promote its latest projects at Thiruvananthapuram, Kochi, and Guruvayoor. The flagship project SFS Cyber Palms, near Technopark, Thiruvananthapuram, has been awarded the highest seven-star rating by Crisil, the premier credit and quality rating agency in India.

The company is offering luxury apartments in the recently launched fifth block – Silver and in the Cherry and Ivory blocks, with delivery starting in 2011 itself. On this tour, the company is also announcing the launch of their signature luxury pool villa project – SFS Gardenia at Vazhakkala in Kochi city. These pool villas come in sizes ranging from 2800 to 3600 sft.

Among the other projects on offer, SFS Grande at Vellayambalam in Thiruvananthapuram is the first Green Building to be constructed in Kerala’s capital city.

SFS Cyber Gold, near Technopark in Thiruvananthapuram and SFS Airport Royale at Nedumbasserry, near the Kochi International Airport offer apartments in a wide variety of sizes like Studio, 1, 2 & 3 BHK.

SFS Branton Park at Vazhakkala in Kochi features two and three bed apartment options. SFS Silicon Gate is an apartment project at the heart of the IT city at Kakkanad.

IT notice to MMRDA, CIDCO

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SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, Mumbai Real Estate, India PropertyThe Income Tax department has sent notices to real estate companies, MMRDA, CIDCO stating that all land lease sales or transfers attract a 10% tax, sources said. The IT department states that tax should be cut with retrospective effect from FY08 and estimates suggest they could raise Rs.1000 crores in the process. Real estate developers said they will contest this tax liability as it will have a negative impact on their cash flows and cost of land.

According to the IT department, the tax on land lease transfers is an obligation on the payee and will be deductible at source (TDS). These will be applicable on all long lease land sales or transfers in Mumbai, sources said. Industry experts say all the land auctions by government agencies and private lease transfer deals like Lodha’s Wadal land deal, RIL-Wadhwa lease transfer, Jet Airways-Godrej Properties deal could fall under the tax net. There have been many such land deals in Mumbai in the last 4 years.

Legal experts believe it is likely to be covered by IT Act provision 194 (i). The tax liability, however, will depend on the way the land deal documents are structured. They added that there is a debate between treating it like a ‘transfer of lease’ or ‘transfer of capital gains.’ While the debate is on, sources said final decision on whether this tax will be applicable or not will be clear in the next few days.

India’s housing markets mixed, says Global Property Guide

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1st of the series of report

CREDAI, Lalit Kumar Jain, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyInterest rate rises are beginning to bite in India, and housing markets in major cities weakened in 2010, says a report by the Global Property Guide. It says yet this hasn’t broken the clear pattern since the relaunch of the National Housing Bank residential property index in 2007. Successful growing cities have seen house prices rise rapidly (Chennai, Mumbai, Pune, Faridabad). Prices in some other cities have fallen strongly (Jaipur, Hyderabad, Kochi, Bengalaru).

The contrasts are really striking. House prices have more than doubled in Chennai from 2007 to today (with the index moving from 100 to 204). During the same period the house price index fell from 100 to 66 in Jaipur. According to the report one explanation is that cities relying mainly on electronics and manufacturing suffered most during the global financial crisis, while cities with offshoring and business process outsourcing (BPO) showed resiliency – but that is not the whole story, and does not explain the strong house-price falls over the past 4 years in Bengalaru (now recovering).

House prices still rising in some cities

Prices are still rising in Chennai (+11.5% on a quarter-on-quarter basis), and Bengaluru (India’s Silicon Valley and third largest city, +2.9%). In Mumbai and Katna, house prices were unchanged from Q2 to Q3 2010.

House prices fell q-to-q in eight of the 15 major cities covered by the NHB Residex. Declines ranged from -1.8% for Delhi, -2.8% for Kolkata to -21.3% in Surat (the capital of Gujarat state in eastern India). The Residex only started publishing quarterly figures in 2010; from 2008 to 2009 the index was updated semi-annually.

Compared to last year property prices are sharply up in five cities (Chennai +43%, Mumbai +27%, Pune +24%, Bengaluru +19% and Hyderabad +8.6%). Cities which suffered included Bhopal (-12%), Surat (13%), Kolkata (-7.6%) and Delhi (-4.4%).

Property prices in Mumbai’s luxury segment continue to surge. The luxury residential property index based on capital values rose 2.8% q-o-q and 14.9% y-o-y to Q4 2010, according to Jones Lang LaSalle (JLL), an international real estate consultancy firm.

MIDC can capitalize on its land along Thane-Belapur highway

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Pinkesh Teckwani, JLLM, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyEven as we continue to discuss the acute shortage of industrial land in Mumbai, the fact remains that there are rather significant land parcels held by the MIDC along Mumbai’s Thane-Belapur Highway. The prices for plots on this stretch currently range from Rs. 5-8  crore/acre.

There has already been lot of commercial development on this tactically important highway, leading to a steady escalation in prices. Moreover, with the formal announcement of the international airport at Panvel and the ambitious infrastructure enhancements that will follow, the strategic value of this land will increase exponentially.

It sounds like an ideal solution for mid-sized commercial space developers who are looking for suitable land parcels for their projects. The problem is that the MIDC has restricted the use of this land, allowing plots to be taken up only by IT/ITES in an obvious effort to boost this particular industry.

While the upcoming Union Budget may extend the STPI sunset clause and its benefits to the Indian IT industry beyond March 2011, this provision now definitely has a limited shelf-life left. In the mid-to-long term, the only option for IT companies who wish to set up shop on the Thane-Belapur stretch is to launch IT SEzs – which unfortunately need to cover a minimum of 25 acres.

Paradoxically, this stretch also encompasses land parcels less than 25 acres in size, previously held by industries which since have shut down operations. There is a huge latent demand for these land parcels by developers. However, since these land parcels are not large enough to conform to IT SEZ parameters, their potential remains unexploited. In light of Mumbai’s legendary space crunch, this represents an illogical anomaly in the system.

One way around this hurdle would be for MIDC to consider permitting development models other than IT/ITeS as well, even if they decide to charge a higher premium on such developments. Permission to develop mixed-use projects on this important stretch of land would make optimal use of its real estate potential. All industries require workforce housing, which in turn require retail outlets and peripheral services. The location is also perfect for local offices of manufacturing companies.

In fact, such amendments to the current restrictions governing these sub-25 acre land parcels will eventually happen anyway. It is hard to ignore a number of such strategically located plots lying vacant because they cannot be utilized by a single industry vertical. The advantage that MIDC would have in amending the parameters now is that it would become instrumental in creating a holistic, locationally important new commercial SBD that would work out to be extremely cost-effective for real estate developers – and by default for end users.

By default, making these changes to the existing usage parameters governing these land parcels would apply downward pressure on the real estate prices of surrounding areas and create more employment opportunities for people living along the stretch from Thane to Nerul. It would prove to be a turning point for the development and overall prosperity of areas like Airoli, Rabale, Turbhe, Nerul, Juinagar and Sanpada.

With a little extrapolation based on known real estate growth patterns in Mumbai, the MIDC can ensure the formation of an entirely new real estate destination by allowing such developments to come in on this vital stretch along the Thane Belapur Highway.

The author, Pinkesh Teckwani, is Head-West India, JLLM

A tie budget; not won, not lost, say realtors

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By: Ravi Sinha

Pranab Mukherjee, Finance Minister of India, Budget 2011, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyReal Estate developers across the country have termed the Union Budget 2011-12 as a tie cricket match which can’t be termed as won or lost. However, they are all unanimous that it is not a game changer budget for the sector. The developers’ final cost-benefit analysis finds more negatives than positives and majority of them say the Finance Minister has pointedly ignored the larger issues affecting the sector at this sensitive stage of revival and growth. While Pranab Mukherjee’s focus on affordable housing seems to have cheered up a section of the realtors who have projects in the segment, the sector by and large is questioning as to why the Government has been ignoring them and giving a cold shoulder.

The sector is though happy with the move to increase the priority housing loan limit to Rs 25 lakh. They term it as a positive one that will lead to increasing the base of home loan takers and thereby a boost for affordable housing. Not given industry status is being termed as the biggest disappointment. Jitendra Jain, MD & CEO, Neev Group of Companies says, “Had the government given it an industry status, bank financing would have been easier for real estate companies. Affordable housing should have got some fiscal incentives as this would address affordability issues. The Proposal to increase rural housing fund to Rs 3,000 crore from 2,000 crore will lead to developments in the rural areas.”

Sunil Dahiya, Managing Director of Vigneshwara Developers exudes optimism when he says the developers now need to refocus on their strategy and make best use of what the sector has got. “With the focus on affordable housing the Finance Minister has tried to enhance consumption at the bottom of the pyramid. I personally welcome the budget for providing impetus to this under nourished market which is actually very dynamic market. The way tier-II and III cities are being renovated, we need to be part of that growth story as well,” he said.

Brotin Banerjee, CEO and MD, Tata Housing Development Company also feels the budget is positive. “The interest subvention scheme of 1 per cent on all individual housing loans up to Rs. 15 lakh for units costing up to Rs. 25 lakh is a welcome move and would give a boost to low cost housing. The proposal to create a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana will guarantee housing loans taken by EWS and LIG households and enhance their credit worthiness. The investment linked deduction to businesses which develop affordable housing under a notified scheme is also a welcome initiative,” he said.

Not many in the sector are ready to subscribe this optimism though. The mismatch between expectations and offer is aptly summed up by Lalit Kumar Jain, CMD. Kumar Urban Development and VP CREDAI. He says, “The unfulfilled demand of more than 24 million houses in the country needs large scale impetus to achieve desired results. Allowing deduction for investment into affordable housing is a welcome step and will surely boost morale of housing industry and will accelerate investments in affordable housing. Increase limit to 15 lakhs for 1 per cent subvention, increasing limit to 25 lakhs for priority lending for home loans are welcome. However much more could be done to accelerate supply of affordable housing stocks. Also we register our displeasure over MAT in SEZs. Government should not deflect from declared policy of tax exemptions as this gives wrong signal to investors in such projects.”

Atul Modak, Head of Kohinoor City calls 1 per cent tax subvention as a populist gimmick which will neither benefit the developers nor the end users. “With our substantial share in the GDP I fail to understand why the Finance Minister is repeatedly ignoring the sector. What was actually needed was to bring down taxes and stamp duty, because even a 2BHK flat in cities like Mumbai costs more than 50 lakhs today,” he adds.

Navin M Raheja, MD, Raheja Developers rues that the sector didn’t get long awaited government support for reforms in the sector. “No effort has been made to counter the liquidity crunch. The budget is more focused on rural and social development of the country. Emphasis has been given to infrastructure and rural development. Overall budget is good for the general public. But it fails to the expectations of Real estate and SEZ. Also, imposition of service tax on hospitals and hotels will add cost to basic necessities. FM has not considered any of the demands of reality sector,” he said.

Agrees Anuj Puri, Country Head of JLLM, when he says that there is nothing in budget for real estate to get excited about. “SEZs have been brought under the purview of MAT, which basically diminishes the benefits that SEZs offer for developers over other commercial real estate asset classes. The budget remained silent on the pressing issue of extension of the STPI exemptions as well and Sec 80IA and 80IB, which are pertinent to the construction of residential projects of units sizes below 1200 sq. ft. This is a de-motivating factor which will further curtail the supply of affordable housing,” he said.

The sector is undoubtedly divided over the cost-benefit analysis of the Union Budget 2011-12. While a section of the developers who are into or looking forward to get into affordable housing are relatively satisfied with what has been offered by the Finance Minister, his Pandora box has definitely failed to fulfill the expectations of the sector that has weathered a storm in the last few years and still contributed significantly to the GDP. That may be the reason why they rest their hope high with the government. But then as a developer laughs it out saying, “earning boy in the family is often made to sacrifice for the sake of deprived one.”

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