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Largest deal for HQ: Teva Pharma leases 1.25 lakh sq ft office space at Goregaon

The Israeli multinational pharmaceutical company will be shifting its India headquarters and consolidating six offices in Mumbai in this newly leased space, spread over four floors.

Kailash Babar  |  ET Bureau  |  Sep 19, 2016, 08.25 AM IST

MUMBAI: The world's largest generic pharmaceutical company, Teva Pharmaceutical Industries, has inked a deal for 1.25 lakh sq ft office space for lease in Oberoi Realty's commercial complex Commerz II in Goregaon suburb of Mumbai in the largest transaction for headquarters by any company, said three persons familiar with the development.

"The transaction was concluded recently and the company will start operating from the new premise in the next twothree months. The design and fit-out work will commence soon," said one of the persons mentioned above.

The Israeli multinational pharmaceutical company will be shifting its India headquarters and consolidating six offices in Mumbai in this newly leased space, spread over four floors. The New York Stock Exchange-listed firm's current India headquarter operations are split into two-three office buildings in the Powai suburb of Mumbai.

The drug-maker will be paying Rs 140-145 per sq ft per month for the space. Teva has leased the front-office space for five years and rentals will be escalated after three years.

Teva will be paying close to Rs 22 crore as rentals every year for the next three years. Rent will be reset for the next two years after that.

The transaction assumes significance as the space is being picked up for the company's headquarters and that too in Goregaon, not in any of the metro's business districts.

"We are delighted that Teva Pharmaceuticals has chosen Commerz II, our commercial building and part of Oberoi Garden City, for their India headquarters. Convenient location off the Western Express Highway and the proposed metro for easy connectivity between north-south corridor of Mumbai has aided the response to Commerz II," said Vikas Oberoi, CMD, Oberoi Realty, confirming the transaction.

Email queries to Teva remained unanswered until the time of going to press. Transaction advisor JLL India declined to offer a comment for the story.

The transaction shows that the commercial property market in the country's commercial capital continues to be robust. Low vacancy levels across office complexes and lack of new commercial space being ready to move are contributing to the rents firming up. Vacancy levels in other commercial complexes in the vicinity along Western Express Highway including Nirlon Knowledge Park and Nesco are currently close to zero.

Since 2015, office space absorption across major Indian property markets has been growing on the back of a combination of lower rents and a positive economic outlook, which makes it certain that the recovery, this time, is more sustainable and long-term in comparison with 2011.

Gurgaon builder booked for Rs 9 crore fraud

Ajay Sharma, a resident of Park Centre in Sector 30 on Mehrauli-Gurgaon (MG) Road, approached the court as the police had refused to lodge an FIR against the accused firm.

IANS  |  Sep 22, 2016, 08.02 AM IST

GURGAON: Senior officials of Empathy Infrastructure & Engineering Private Limited and a few others have been booked on charges of cheating and fraud involving Rs 9 crore, the city police said on Wednesday.

A case under the Indian Penal Code (IPC) sections relevant to hatching of conspiracy, cheating, fraud, and preparing and using fake papers was registered at Sector 40 police station after a court issued an order for registering an FIR.

Ajay Sharma, a resident of Park Centre in Sector 30 on Mehrauli-Gurgaon (MG) Road, approached the court as the police had refused to lodge an FIR against the accused firm.

Sharma, also a builder, said in his complaint that the accused company had signed an agreement to build a few projects for his firm in 2014-15, but it never did it.

Police officer Devi Charan told IANS, "We have started an investigation and are issuing notices to parties to the case to join the probe."

After NGT order, DDA razes farmlands to free floodplains

The authority said the land belongs to DDA and the demolition was being done on an National Green Tribunal (NGT) order.

Mohammad Ibrar  |  TNN  |  Sep 22, 2016, 12.00 PM IST

NEW DELHI: Delhi Development Authority (DDA) on Wednesday freed the Yamuna Khadar at Nangli Rajapur village adjacent to Sarai Kale Khan of encroachments by farmers, who were growing vegetables and flowers, as part of a demolition drive being conducted for the past three days. DDA officials said they plan to free 4,806 acres of such land within the next few days.

While the farmers, whose crop was destroyed, said their livelihood and shelter are both lost now, the authority said the land belongs to DDA and the demolition was being done on an National Green Tribunal (NGT) order.

Officials claimed NGT had prohibited cultivation of crops on Yamuna floodplains as the vegetables grown there could be "highly contaminated" and their consumption could even lead to cancer.

Crops of radish, spinach, okra, bitter gourd, brinjal and mustard were destroyed by the bulldozers early in the morning. "DDA has wrongly taken away the joint agricultural land of the village. We had recently sown the crops and the seeds were expensive. Instead of targeting our farmlands, the government should raze down the illegal colonies on the floodplains," said Sultan Singh, a farmer.

"In 1995, the government gave us Rs 27 per bigha as compensation when they acquired some land. We were promised alternate plots and jobs, but the promise has not been fulfilled," said Rajinder Singh, another farmer.

Independent studies have shown that the alarming levels of pollution in the Yamuna has had an adverse impact on soil and groundwater on the floodplains. The farmers, however, claimed they do not used the polluted water from the river but irrigate the crops through borewells. They added that they don't use insecticides.

A 2012 study carried out by TERI had indicated the presence of heavy metals in vegetables grown with water from the Yamuna. This prompted many cases to be filed in courts against the farming activity. NGT had passed the order in response to a petition filed by activist Manoj Misra of NGO Yamuna Jiye Abhiyan.

Mishra, however, said the order says that farming should be stopped only if it harms the environment. "Using the NGT's directive to evict farmers is wrong," he said. He added that if the farmer leased the land from the government then it can acquire it, but not under the shield of the NGT order.

Ghaziabad to revise city’s Master Plan 2021, proposal set to be placed in Sept 27 meet

Making of a new master plan involves taking into consideration the population projection which is followed by a satellite survey of the city that involves government of India.

TNN  |  Sep 20, 2016, 10.30 AM IST

GHAZIABAD: The Ghaziabad Development Authority will shortly begin a process to revise the existing master plan 2021. The proposal will be placed in GDA's board meeting scheduled for September 27 before its initiation.

"The GDA Master Plan 2021 will go for revision and the process will be initiated after the proposal gets a go ahead in the board meeting that will be held in the last week of this month," said Istiaq Ahmed, chief architect and town planner, GDA. "The process has to start early as it is time taking and cumbersome, as it involves number of surveys which is finally incorporated in the master plan," he added.

Making of a new master plan involves taking into consideration the population projection which is followed by a satellite survey of the city that involves government of India. What follows next is a series of surveys including road and transport survey, land use survey, socio-economic survey and industrial establishment survey.

"There are certain criteria laid down while preparing master plan and we ensure 40% of the area is allotted to housing projects, between 20 to 25% for roads and transport and about 20% for the green belt," said Ahmed. "The revision made in the existing master plan will be incorporated when the new master plan, that will be Master Plan 2041, will be made."

SC stays NGT order asking metro, freight corridor to get green nod before pressing on

On Friday, the issue was raised by Attorney General Mukul Rohatgi before a bench comprising Chief Justice TS Thakur and Justice AM Khanwilkar.

Samanwaya Rautray  |  ET Bureau  |  Sep 17, 2016, 07.44 AM IST

NEW DELHI: The Supreme Court on Friday stayed National Green Tribunal orders that had made work on the Noida-Greater Noida metro and the Mumbai-Delhi-Kolkata freight corridor conditional on getting green clearances. The court ruling clears the legal hurdles, at least for now, in way of these projects.

The NGT had in orders passed in May and July ruled that these projects required clearances under the environment ministry's Environment Impact Assessment Notification of 2006, issued under the Environment Protection Act.

The ministry insisted that these projects were not covered by the notification, but the NGT ruled otherwise. On Friday, the issue was raised by Attorney General Mukul Rohatgi before a bench comprising Chief Justice TS Thakur and Justice AM Khanwilkar.

"Roads have been dug up throughout the country in most cities. By getting people to travel by the metro, the metro is actually reducing pollution," he said.

Both the metro and the freight corridor corporations had challenged the NGT orders through advocate ADN Rao.

The AG said these the projects figured on the list of those excluded from the notification.

The NGT had passed the orders on pleas filed by activist Vikrant Tongad who had drawn its attention to the fact that work on these projects had commenced without the green nods and that these were seriously prejudicial to the environment.

Some of the work would affect the Hindon river bed and plains, he argued, besides the flora and fauna in the area. The NGT had directed that these projects either get post-facto clearances or stop all work.

The NGT had asked the project proponents to obtain environmental clearances within three months and asked the authorities to consider both remedial as well as precautionary measures that were required to be taken before allowing work to go ahead.

Exotica delay case: SC asks Parsvnath to deposit Rs 12 crore within four weeks

Parsvnath will have to deposit the money in the next four weeks.

Ravi Teja Sharma  |  ET Bureau  |  Sep 15, 2016, 01.34 PM IST

NEW DELHI: The Supreme Court has asked builder Parsvnath Developers to deposit Rs 12 crore with the court registry in a case where 70 home buyers in its project Parsvnath Exotica project in Ghaziabad have sought a refund as the company had delayed handing over possession of apartments.

Parsvnath will have to deposit the money in the next four weeks.

The National Consumer Disputes Redressal Commission (NCDRC) had asked Parsvnath Developers to refund the entire amount paid by around 70 home buyers in its Ghaziabad project with 12% interest for failing to complete the apartment project on time. The builder had appealed against the NCDRC order in the Supreme Court.

In the previous hearing, the counsel for Parsvnath had said that the order passed by NCDRC would "amount to a mad rush and everybody will come to get the money back." He said Parsvnath will instead complete the project and hand over apartments to buyers within 12 months.

The company had told ET last week that it is confident of completing the under-construction towers in the project and offering of possession within 12-15 months from the receipt of building plans from Ghaziabad Development Authority (GDA) which are pending with them for revised approval/renewal.

On Thursday, the Supreme Court bench of justices Dipak Misra and C Nagappan declined to pass any order in which it would ask GDA to reconsider the issue.

The court had recently asked another builder Unitech to deposit Rs 15 crore with the court registry representing the principal amount paid to the builder by 38 home buyers in its housing project in Gurgaon.

HC orders tighter norms on gains from property sale

The Bombay high court, in a recent order, has held that such an exemption will be available only to the extent to which the amount has been actually utilized by the taxpayer.

Lubna Kably  |  TNN  |  Sep 15, 2016, 08.47 AM IST

MUMBAI: The Income-Tax (I-T) Act provides for exemption from long-term capital gains where the sale proceeds of the original asset are invested in a new residential property. The Bombay high court, in a recent order, has held that such an exemption will be available only to the extent to which the amount has been actually utilized by the taxpayer, before the due date of filing his I-T return.

If a taxpayer has only partly utilized proceeds of the long-term capital gains (LTCG) by making payments to the builder and has not deposited the balance unutilized amount in a specified bank account, then only the actual payments will be considered for computing capital gains exempt under Section 54F of the I-T Act, the HC held.

The taxable component of LTCG is arrived at after taking into consideration the exemption available under Section 54F. This order will reduce the quantum that can be claimed as exempt from LTGC, consequently there will be a higher I-T payout (see box).

Tax authorities say while this order relates to Section 54F (covering LTGC arising on sale of non-residential property) its principle would also apply to Section 54 (covering LTGC on sale of a residential property). Both these sections provide for an exemption if the amount is invested in a residential property or deposited in a specified bank account. Thus, a larger number of taxpayers could be impacted.

To claim I-T benefits, post the sale of a non-residential property (say land), the taxpayer under Section 54F is required to invest the proceeds from LTCG in a residential property within two years from the date of sale. Or, he can construct another house property within three years.

That amount, which is not utilized towards a new residential house till the I-T return due date, is required to be deposited in a specified bank account. If the entire amount of LTGC is not invested or deposited, the remaining portion of the gain is subject to I-T. The HC adopted a strict interpretation of Section 54F(4), holding that "the amount which has not been utilized in construction or purchase of property before filing I-T return, must 'necessarily' be deposited in an account duly notified by the Central Government, so as to be exempted."

"The Supreme Court, in various cases, has held that exemption provisions should be liberally interpreted as long as there substantial compliance with the requirements. In this case, the taxpayer had met with the spirit of the I-T law, as purchase of the new flat was completed well before the I-T assessment was taken up," says Saroj Maniar, tax partner at CNK & Associates. Given this order, taxpayers should make deposits, wherever necessary, before filing their I-T return, she cautions.

In this case, Humayun Merchand had sold land on April 29, 1995 for Rs 85.3 lakh. He entered into an agreement on July 16, 1996, with a builder to purchase a flat for Rs 69.9 lakh (possession taken in January 1997). He filed his I-T return on November 4, 1996, by which date he had only paid the builder Rs 35 lakh and not made any bank deposit. The I-T officer allowed a proportionate exemption of Rs 31.6 lakh and treated Rs 43.8 lakh as taxable capital gains.

The tax tribunal had dismissed the appeal filed by Merchant who moved to the Bombay high court. Here, too, the verdict was not in his favour.

Developers step up focus on mixed-use office-cum-retail realty formats

Even today, key portions of several office buildings in major property markets are occupied by food & beverages and retail BFSI outlets.

Kailash Babar&Sobia Khan  |  ET Bureau  |  Sep 14, 2016, 07.45 AM IST

MUMBAI| BENGALURU: The combination of retail and office complexes may not be entirely new to metro cities, but the trend of setting up such combined projects is fast catching on. Developers are now looking at experimenting more with a mixed-use format rather than standalone retail formats, allowing for quality retail on the lower floors and commercial spaces on the upper floors.

Even today, key portions of several office buildings in major property markets are occupied by food & beverages and retail BFSI outlets. Such mixed-use retail developments have opened up a new format that would attract select categories of retailers.

"Of the total retail presence in office buildings across major Tier I cities, a dominant 26% is occupied by food & beverages and a significant 23% is occupied by retail BFSI outlets. While retailers get the dual advantage of paying lower rents compared to premium spaces in Grade A malls, and closer access to their main target segment of office-goers, developers are also open to experimenting more with a mixed-use format rather than a standalone retail format," said Anuj Puri, country head, JLL India.

Such office-retail complexes (ORCs) are emerging as alternatives to high streets, and even malls, for some categories of retailers. "In business district environments, it is important to bring in an optimum mix of retail spaces, which are best suited within that setting. Essentially food, BFSI rela ted outfits bring life into these busi ness districts and should be planned more to optimise the commercial user and not just retail space, to maximise rental maximise rental revenues. Correctly planned spaces with supporting infrastructure will flourish. We are seeing a rising trend of the same, where 10-15% of the overall space is earmarked for such re tail outlets," said Vinod Rohira, managing director, K Raheja Corp.

For some time now, retailers have been facing the lack of available quality retail space in right locations.

For instance, mobile manufacturing companies would want to open flagship stores in office districts in order to demonstrate new product service offerings.

Often, first time buyers of expensive handheld gadgets are officegoing employees, and a store in the same ORC would entice them to check out the store and products.

Comedian Kapil Sharma under lens for debris dumping in buffer zone

The mangrove squad visited SV Patel Nagar, Andheri, where Sharma’s property is located, after repeated complaints from people in the area about mangrove destruction.

Richa Pinto  |  TNN  |  Sep 13, 2016, 10.30 AM IST

MUMBAI: Adding to comedian Kapil Sharma's woes, officials from Mumbai's mangrove cell said on Monday that debris dumping occurred behind his Andheri row house and it appears that the spot is on the buffer zone between the stretch on which the property lies and the main mangrove area. But, they said, the notified forest area has not been tampered with. As per high court directions, a 50-metre buffer needs to be maintained between constructions and mangroves.

The mangrove squad visited SV Patel Nagar, Andheri, where Sharma's property is located, after repeated complaints from people in the area about mangrove destruction. Earlier this year, the BMC had taken note of the complaints. Chief conservator of forests (mangroves cell) N Vasudevan said, "Prima facie it appears that no filling (debris dumping) has happened in the notified forest area. But there appear to be violations in the buffer area. If the violations are established, we will write to the collector and the environment department."

Activist Nicholas Almeida from Watchdog Foundation expressed disappointment at mangrove destruction in the buffer zone. "This is not overnight destruction. Damage to mangroves all over Mumbai is at its peak and the authorities need to act now," he said.

The BMC has assured co-operation to the forest department. "It is a huge stretch, of 700-800 metres, and the layout plan should be available with the building proposal department. We will give it to the forest department should they it," said Parag Masurkar, assistant municipal commissioner, K-west ward. The BMC plans to survey plots in the area to see if any properties have been converted from residential to commercial without permission.

"We have called for the plot's plan from civic officials to understand the extent of debris dumping. It can be clearly seen that buffer has not been maintained," said assistant conservator of forests Makarand Ghodke, who was part of the team that visited the area behind Sharma's row house. "We inspected around 300-400 metres of mangrove land behind all row houses in the area."

He said a letter will be sent to the revenue department about the matter.
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27 new cities selected under centre's smart cities mission

Agra, Kanpur and Varanasi in Uttar Pradesh and Amritsar and Jalandhar in Punjab are among the 27 cities selected under the Smart Cities Mission.

ET Bureau  |  Sep 20, 2016, 05.00 PM IST

NEW DELHI: Five cities in election-bound Punjab and Uttar Pradesh, including Prime Minister Narendra Modi's constituency of Varanasi, have made it to the Centre's third list of Smart Cities that will get funding for initiating urban reforms.

Agra, Kanpur and Varanasi in Uttar Pradesh and Amritsar and Jalandhar in Punjab are among the 27 cities selected under the Smart Cities Mission, which will get Rs. 200 crore for improving their infrastructure. With the 27 cities announced on Tuesday , the total number of Smart Cities chosen rises to 60.

Maharashtra topped the list with five cities, Tamil Nadu and Karnataka were second with four cities each, followed by Uttar Pradesh with three cities.

The new cities are from 12 states and have proposed to invest a total of . 66,883 crore under their respective ` Smart City plans. The amount includes ` . 42,524 crore in area-based deve . 11,379 lopment (79% of the total) and ` crore (21%) in technology-based pancity solutions.

The third list was announced after the latest round of the Smart City Challenge competition. Amritsar topped the list, while Vadodara in Gujarat finished in last place. "Competition-based selection has made the cities rediscover themselves as they are undertaking a thorough assessment of gaps in the present levels of infrastructure and service delivery and come out with comprehensive, credible and actionable plans for area-based development and technology-based pan-city solutions," urban development minister M Venkaiah Naidu said.

Under the Smart Cities Mission, the government proposes to develop 100 cities as Smart Cities over the next three years. Naidu said the process for selection of the remaining 40 cities would start in January.

"With the third batch of cities, the Smart City implementation is now spread to 27 states and Union Territo ries...nine states and UTs still to join this club are Uttarakhand, Jammu & Kashmir, Meghalaya, Mizoram, Nagaland, Arunachal Pradesh, Puducherry, Lakshadweep, Daman, Diu and Dadra & Nagar Haveli," Naidu said.

Orbit Corp MD Pujit Aggarwal arrested by EOW in Rs 52 crore cheating case

Aggarwal (44) was earlier arrested by the Azad Maidan in a Rs 2.53 crore cheating case and on Tuesday, a court sent him to judicial custody.

Mateen Hafeez  |  TNN  |  Sep 22, 2016, 07.39 AM IST

MUMBAI: The city economic offences wing (EOW) on Wednesday arrested developer Pujit Aggarwal in a Rs 52.01 crore cheating case registered against him, his father and their firm Orbit Corporation Limited for allegedly cheating Capri Global Advisory Services (CGAS) Pvt Ltd.

Aggarwal (44) was earlier arrested by the Azad Maidan in a Rs 2.53 crore cheating case and on Tuesday, a court sent him to judicial custody. The EOW arrested Aggarwal from Arthur Road jail and will now produce him before a court on Thursday.

In the Azad Maidan police case, the complainant, the Capri Global Capital Limited (CGCL) said it had invested money in three flats in Orbit Residency Park in Sakinaka, promoted by Aggarwal, but had not yet got the flats.

The EOW took over investigation into the case registered on April 27 against Aggarwal at the Azad Maidan police station too. An EOW source said that they had earlier recorded Aggarwal's statement. "He will be questioned thoroughly in the police custody," said an officer. The Azad Maidan police had searched Aggarwal's office in Worli and seized Rs 77 lakh, over 230 sale and purchase documents and three laptops, among other items, and also frozen his firm's six bank accounts.

Ashok Agarwal, director of CGAS, told the police that accused and his father approached the firm, and claimed that Orbit Corporation was developing a real estate project, Orbit Terraces, in central Mumbai. "Aggarwal represented that the land on which Orbit Terraces was to be constructed was freehold and that they were in the process of amalgamating the said land with the adjoining land which would generate an additional FSI and upon the receipt of which, they would construct higher floors. s Orbit assured to sell eight units in the proposed building to us as per the terms and conditions mentioned in Orbit Terraces MoUs. The said eight units were to be acquired by us as an investment and that Orbit was to give a minimum return to us on the money invested by our company. The accused assured us that they would complete the construction within 24 months, failing which they would, before the expiry of such 24 months, find a buyer and would refund our invested money," the complainant has stated. The complainant stated that they were later informed that Orbit failed to get an additional FSI. He told the police that Aggarwal neither gave them the flats nor did he return their money-Rs 52.01 crore.

34 proposals to be tabled in Ghaziabad Development Authority’s board meeting

A set of 34 different proposals have been included in the agenda that will be presented in the scheduled meeting of the board of Ghaziabad Development Authority (GDA) on September 27. The proposals include infrastructure development works to be undertaken in the city as well as certain policies.

TNN  |  Sep 22, 2016, 03.05 PM IST

GHAZIABAD: A set of 34 different proposals have been included in the agenda that will be presented in the scheduled meeting of the board of Ghaziabad Development Authority (GDA) on September 27. The proposals include infrastructure development works to be undertaken in the city as well as certain policies.

"Certain supplementary proposals might be added to the main agenda depending on the urgency of having them passed and implemented," said GDA secretary Ravindra Godbole.

According to GDA, a draft Master Plan of the city for the year 2041 has been prepared by the town planning department and will be placed in the board meeting for its approval.

The board of the GDA had last met in April this year. A budget of Rs 1,500 crore to be spent on various developmental works in Ghaziabad had been approved in the meeting. The board had also provided its in-principle approval to construct an additional metro station in Indirapuram by extending the under-construction City Center-Sector 62 metro line of Noida across NH-24 into Ghaziabad.

Sources said the Principal Secretary (Housing) of UP state government is likely to preside over the meeting to be held on September 27. Funding issues of two ambitious projects in Ghaziabad, viz, the Dilshad Garden-New Bus Stand metro station as well as the Hindon Elevated Road will also be discussed during the course of the meeting.

Illegal portions of flats owned by Kapil Sharma, Irrfan Khan to be razed

An FIR was filed against Kapil and Irrfan for unauthorized work in their ninth and fifth floor flats in DLH Enclave on September 12.

Richa Pinto  |  TNN  |  Sep 20, 2016, 11.30 AM IST

MUMBAI: The BMC will demolish unauthorized constructions in actors Kapil Sharma and Irrfan Khan's Goregaon flats, reports Richa Pinto. The action comes a week after an FIR was filed against them and other building residents at Oshiwara police station.

Civic officials said they were waiting for police to complete the panchnama before taking action. Unauthorized work in the tower included merger of elevation features, ducts, common passage and part podium for parking. The BMC P-south office had filed a police complaint in June about the tower having unauthorized alterations in June.

We had served the residents notices for unauthorized constructions by them but did not receive any response."

An FIR was filed against Kapil and Irrfan for unauthorized work in their ninth and fifth floor flats in DLH Enclave on September 12. The FIR mentioned five flat-owners, including the actors, and the builder, Dev Land & Housing. The FIR, registered by ward sub-engineer Abhay Jagtap, books the flat-owners and builder under Section 53 (7) of the Maharashtra Regional Town Planning (MRTP) Act, 1966. The section deals with prosecuting flat-owners for not complying with notices against unauthorized constructions. Conviction under the section invites a jail term varying from one month to three years, and a fine of Rs2,000-5,000.

Municipal commissioner Ajoy Mehta said they were waiting for the police to complete their process before taking action. "We will following due process and take further action," Mehta added.

BMC is still awaiting a reply from Kapil on his bribery allegations. Mehta said that they had assured the actor that the identity of the official would be kept confidential. "But we are yet to receive details from him," said Mehta.

It is learnt that Mehta conducted an inquiry to ascertain if Kapil's allegations were true but no strong case was found, so no parallel probe has been initiated yet.

Co-working gathers ground as startups look for affordable work spaces

Majority of startups are now incorporating real estate strategies such as consolidation, expansion and focus on peripheral locations to save cost.

Sobia Khan&Kailash Babar  |  ET Bureau  |  Sep 16, 2016, 10.30 AM IST

BENGALURU | MUMBAI: With startups looking at affordable work spaces and central government creating an enabling environment for entrepreneurship, demand for co-working spaces has gone up.

"Co-working spaces are popping up across metros as well as tier-II cities, and are helping many startups get flexible working options at prices they can afford," said Anuj Puri, chairman, JLL India.

For a tech startup, cost of setting up an office in Mumbai, Delhi and Bengaluru range from $25,359 to $30,081 per annum, while operating out of co-working space would help these startups save anywhere between 72 per cent and 76 per cent, showed a Knight Frank report.

"In terms of startup costs in Bengaluru, 'co-working' offers a discount as high as 72 per cent compared to owning office space. In the context of global cities, co-working startup cost in the city is the most competitive at $7,100 next to Bangkok," said Samantak Das, national director, research, Knight Frank India.

Startup data tracking firm, Tracxn said there are 61 co-working spaces in India, of which 16 were set up in 2016.

Recently, New York-based office rental startup WeWork, valued at $10 billion, said it plans to enter India by setting up its first office in Bengaluru. Another commercial builder, RMZ Group has also opened its community workspace venture CoWrks recently.

"Businesses have begun making the switch to a co-working facility not only because of pricing and flexibility, but more importantly because they realise that it is a much better way of working," said Sidharth Menda, CEO, Cowrks.

Xander fund-promoted Virtuous Retail that set up Hive in Bengaluru is seeing huge demand for co-working space. "One key concern for a startup is to be able to establish base camp in a clean, secure and creative environment surrounded by like-minded people," said Rajiv Raichand, director, Virtuous Retail.

Majority of startups are now incorporating real estate strategies such as consolidation, expansion and focus on peripheral locations to save cost. Experts says a company can save up to 25 per cent on its costs by rationalising office spaces.

Vivek Oberoi's firm launches affordable housing project

This project would provide affordable housing to more than 15,000 families at a cost of Rs 7,90,000.

IANS  |  Sep 16, 2016, 08.04 AM IST

NEW DELHI: Actor Vivek Oberoi on Thursday announced the launch of Karrm Infrastructure Pvt. Ltd.'s affordable housing project at Shahapur in Maharashtra.

This project would provide affordable housing to more than 15,000 families at a cost of Rs 7,90,000.

Shahapur is the first affordable housing project of Karrm Infrastructure Pvt. Ltd and the company plans to expand rapidly with a target of 5,00,000 apartments within the next 3-5 years.

"Karrm's affordable housing projects provide enhanced lifestyle solutions for better living standards. The idea is to improve the living conditions of the poor and underprivileged and to provide their families a respectable accommodation and a safer environment," said Vivek, Promoter and Partner of Karrm Infrastructure Pvt. Ltd.

Karrm Infrastructure Private Limited has over 11 years of track record in real estate development.

The company has approximately 3 msf (million square feet) of completed projects with 4.5 msf of projects under construction. From developing major enclaves in Thane, Mumbai, the company is developing a presence in more than 50 cities in India. joins hands with PropTiger for offline support

SoftBank-backed Housing will feature select new projects on its online platform and make use of PropTiger's offline services to seal transactions with customers as part of this arrangement.

Aditi Shrivastava&Madhav Chanchani  |  ET Bureau  |  Sep 15, 2016, 08.15 AM IST

BENGALURU: Realty portal Housing has struck a partnership with rival PropTiger, in what is likely to be the first step towards a potential merger between the Mumbai and Gurgaon-based companies, according to three people directly aware of the development.

SoftBank-backed Housing will feature select new projects on its online platform and make use of PropTiger's offline services to seal transactions with customers as part of this arrangement.

"The commercial structure of the partnership is based on a revenue-share mechanism," said Housing CEO Jason Kothari. He declined to comment on the possibility of a merger with PropTiger, or an investment from its main investor NewsCorp, which holds 30% stake in PropTiger.

"PropTiger will provide an upfront marketing fee to promote front marketing fee to promote new projects on the Housing platform, and will also share a part of the transaction fee on successful sale of a property," he said.

The arrangement is aimed at combining the online reach of Housing with PropTiger's robust offline services which include services such as site-visits, help with paperwork and price negotiations as well as home-loan offers.

"This is just an experiment," said Dhruv Agarwala, cofounder at PropTiger, adding that it will take another three months to figure out how this partnership pans out. "Closures in real estate take longer," he added. Agarwala also declined to comment on a potential merger.

Meanwhile, Housing is also exploring talks with several other strategic and financial investors for a potential investment, one investor in the company said, add ing that the board has not reached any resolution as of date. ET was not able to ascertain the contours of the deal being discussed. Currently , SoftBank is the largest investor in Housing, while the 12 cofounders -alumni of IIT Bombay -also own stakes. The company was valued at ` . 1,500 crore in late 2014 when it raised $90 million led by SoftBank, but the valuation of internet companies in India has significantly softened since then. "What is likely to make the deal process more complicated is the liquidation preference and anti-dilution rights held by SoftBank and the stake of the 12 cofounders in the entity ," said one of the people quoted above.

"If the merger goes through both News Corp and SoftBank will invest in the new entity ," the person said.

News Corp and SoftBank declined to comment.

The partnership will be first launched in big cities such as Mumbai, NCR, Bengaluru and Pune, covering approximately 2025 new projects in the first phase. The move is also in line with Housing's strategy to build a complete buy-and-sell platform and shift from a mere real estate listings platform.

"Listing revenue in India is always going to be limited. PropTiger has built the capability of actually executing transactions, that's where the profit pools and scale lies," said an investor with direct knowledge of the plans.

Currently , Housing generates all its revenues through a suite of online products but this partner ship opens up new offline revenue channels with the transaction fee-sharing arrangement.

Industry estimates peg the new home advertising market at about ` . 2,000-3,000 crore, with a quarter of it being spent online.

Housing has raised more than $130 million in funding so far, out of which about $85 million has been invested by SoftBank. Other major investors include Nexus Venture Partners and Helion Venture Partners. It also counts Falcon Edge Capital, Nirvana Venture, Russian billionaire Yuri Milner's Apoletto Holdings besides Snapdeal cofounders Kunal Bahl and Rohit Bansal as shareholders.

Earlier this year, SoftBank invested an additional ` . 100 crore in the portal to help it scale its home buying and selling business with a focus on revenue generation.This financing round came on the back of sustained turmoil in the company through much of 2015 including the ouster of its cofounder and then chief executive Rahul Yadav.

Kapil Sharma & Irrfan Khan spared arrest; cops to serve notice now

An FIR was registered on Monday under the Maharashtra Regional Town Planning (MRTP) Act.

TNN  |  Sep 14, 2016, 07.56 AM IST

MUMBAI: The Oshiwara police are in the process of sending notices to actors Kapil Sharma and Irrfan Khan, demanding an explanation in connection with the charges levelled against them by BMC for unauthorized work in their flats in a Goregaon highrise.An FIR was registered on Monday under the Maharashtra Regional Town Planning (MRTP) Act.

"Supreme Court directions forbid us from making immediate arrests. The actors will have to submit an explanation which will be analyzed and scrutinized by our officers.Statements of the actors will be recorded. We will verify whether their submission fits what's legal. A final report will then be prepared," a senior police official said. If the police are able to gather evidence in the case, they can also submit a chargesheet in court.

"As of now, we have posted police teams at the highrise, DLH Enclave, to ensure that further alterations are not made and also to avert any law and order problems. We are yet to meet the two actors in person to serve them notices.The documentation is being prepared," the official said.

In June, the PSouth ward office had complained to the Oshiwara police about the highrise being reple te with unauthorized constructions. The flat owners had neit her restored their properties according to original plans nor given satisfactory replies to civic notices. The BMC found major violations in 15 flats in the highrise. It found that unauthorized work was carried out on the 9th floor of the building, where Sharma has a flat. It listed unauthorized merger of elevation features, ducts, voids, common passage and part podium for parking. Khan owns aflat on the fifth floor. The alterations were carried out contrary to the full occupation certificate issued by PSouth ward office in November 2013.

Goa's Kingfisher Villa on the block for Rs 85 crore

The auction of the beachside property will take place on October 19

Mayur Shetty  |  TNN  |  Sep 13, 2016, 12.24 PM IST

Vijay Mallya's fabled Kingfisher Villa in Goa has been put on the block by State Bank of India for Rs 85 crore. The auction of the beachside property will take place on October 19.

The Villa, which is the most publicised of Mallya's properties, could be attached by banks only in May 2016 - five months after the former liquor baron celebrated his 60th birthday there. This was because United Breweries had stymied attachment proceedings claiming tenancy rights on the bungalow.

The property, a landmark on Candolim Beach, has an area of 12,350 square meters. The Villa itself comprises of three big bedrooms and a huge living room containing has hand-crafted teakwood furniture has been designed in Goan style by Dean D'Cruz a famous architect from the state.

SBICAP Trustee Company, which has been appointed by the banks to conduct the auction said in its notice that the property will be available for inspection between 26th and 27th September and between 5th and 6th October. The bungalow was attached following a default by Kingfisher Airlines, which owed 17 banks Rs 6,963 crore as on April 2014. Mallya' had provided a personal guarantee for the Kingfisher Airlines loan along with co-guarantor United Breweries.

The auction comes at a time when the bank's attempt to sell other Mallya properties had failed. Bank's have not found any buyers for Kingfisher Airline's erstwhile headquarters - Kingfisher House near Mumbai Airport although the price was lowered from Rs 150 crore to Rs 135 crore in a second auction. Brokers say that the price is still higher than market rates considering height restrictions due to its proximity to the airport. There were also no takers for the Kingfisher brands, which the banks tried to sell for Rs 366 crore. United Breweries had contested the sale stating that it had rights to the Kinfisher bird logo.

But even as banks struggle to recover their assets, Mallya's woes have mounted with the enforcement directorate attaching proprety worth Rs 6,630 crore. Mallya himself has been staying in UK since early March 2016 fearing arrest. Mallya left India after a deal with British liquor giant Diageo on February 25 where he would get $75 million and step down from tbe board of United Spirits even as banks moved courts seeking to restrain him from leaving the country.

Although it has been three years since Kingfisher Airlines defaulted on its loans, concerted action by lenders picked up after former Reserve Bank of India governor strongly criticised the wilful nature of the default. "If you flaunt your birthday bashes even while owing the system a lot of money, it does seem to suggest to the public that you don't care. I think that is the wrong message to send. If you are in trouble, you should be cutting down your expenses," said Rajan.
Tomorrow's Budget presentation is my exam, says PM Modi on 'Mann Ki Baat'
BI INDIA BUREAU | FEB 28, 2016, 04.22 PM
"I have an exam tomorrow," Prime Minister Narendra Modi said today referring to presentation of General Budget in Parliament as he gave a pep talk to motivate students appearing for board exams for which he even roped icons like Sachin Tendulkar and Vishwanathan Anand. Modi said he was "full of confidence" ahead of his "examination" by 125 crore people, a trait which he wanted students to emulate when they appear for their examinations for Class X and XII starting Tuesday.

In his monthly radio programme 'Mann Ki Baat', he emphasised that students should appear for the exams with a "positive approach" having free and calm mind without any anxiety. He also asked parents not to put pressure on them.

In this context, he cited his example in the context of presentation of Budget which all the countrymen closely monitor and analyse.

"Friends, your exams are starting. I too have exam tomorrow. The country's 125 crore people are going to take my examination," the Prime Minister said, while pointing out that Budget is being presented tomorrow.

"But you must have seen how healthy I am feeling, how full of confidence I am. Let my exams take place tomorrow and yours day after and may all of us succeed so that the nation succeeds...Move ahead with a free mind, without any tension of success or failure," he said in his 35-minute programme.

To lay stress on a positive and tension-free approach, Modi roped in Sachin, Anand besides Bharat Ratna scientist C N R Rao and spiritual leader Murari Bapu, whose messages were played during the programme. They gave their own examples of how they approached their exams in their respective fields, keeping tension aside.

Underlining that "positive approach" and "positive frame of mind" help in all aspects of life, the Prime Minister talked about himself and said when he comes across some issues which he is not familiar with, he concentrates to deal with them.

"Sometimes I feel tension within. Then I feel that I should relax a bit so that I feel good. So I have developed my own technique. I do some deep breathing. I take deep breath three times, five times. It may take a few seconds but my mind becomes ready to deal with the situation with a calm mind. This may be my experience but this may help you too," he told the students.

Modi, a practioner of yoga, also referred to this art and mentioned how it helps in improving concentration and strengthening inner peace.

To motivate the students, the Prime Minister also invoked Thomas Alva Edison, who invented electricity, and J K Rowling of Harry Potter fame, saying their success had possibly come after many failures.

"There is success in failure too" if there is a positive approach, he said, while asking students to have dedication, determination and diligence to achieve success.

Giving example of Sachin, Modi asked students not be burdened by expectations of others but set their own targets with "free thinking, free mind and independent capability".

He told students that nobody can stop them if they set out to break their own records.

The students should link their efforts to acheive big goals like Sachin and even if the targets are not achieved, do not be demoralised but try harder, Modi said.

Sachin, in his message played during the programme, said, "I understand that exams are starting in a few days. Many of you must be tense....I want to say that your thinking needs to be positive, then positive results will follow. So be positive. God will give you good results... Write the exams with free mind and results will be good."

He said there will be many expectations of the students from their parents, teachers, family members and friends who all will keep enquiring about their preparations and their expected percentage.

"I will only say that you yourself set your targets and don't come under pressure of expectations of others. Work hard but set a realistic achievable target and try to achieve it," said the cricket icon.

Giving his own example, he said, "When I played cricket, there were many expectations from me. In the last 24 years, there have been many tough moments and at times good moments also. But people's expectations kept rising with time. So I had to find a solution. I thought that I will keep only my expectations and set my own targets.

"If I am able to achieve those targets, then I am able to do some good for the country... I always focussed on the ball and with time my targets were achieved.

Emphasising that students should have sound sleep before appearing for exams, the Prime Minister said himself sleeps less, which was his "shortcoming" and he was trying to rectify it.

"I agree that sleeping on time and deep sleep are as important as other activities during the day. I am lucky that I sleep less but I have deep sleep. This helps," he said.

Underlining the need for discipline and focus in life, Modi gave the example of world chess champion Vishwanathan Anand, saying his concentration is always intense when he plays the game and checkmates others, like Arjun's target of the eye of a fish.

Anand asked students to have good sleep, eat well and be calm when they appear for examinations.

"It is important not to put too much pressure on yourself, don't keep your expectations too high. Just see it as a challenge... Don't be over-confident. But don't be pessimistic either," he said.

Modi added that if a person lacks confidence, then there is no peace within, which affects work.

Rao asked students to decide what they want and try to achieve it through their "doggedness, dedication and tenacity. With all these qualities, you will succeed in all examinations and all other endeavours."

The Prime Minister noted that the country today celebrates the National Science Day to commemorate the announcement of Nobel Laureate C V Raman's discovery 'Raman Effect' in 1928.

This year's theme is 'Make in India Science and Technology Driven Innovations', he said as he pitched for innovation.

He also said that Laser Interferometer Gravitational-Wave Observatory (LIGO) was being established in India, becoming only the third country in the world to have it.

He lauded the Indian scientists for being part of the recent discovery of Gravitational Waves which had confirmed Einstein's theory.

ASK Group raises India’s largest pure equity realty fund in five years | Bhawna Gupta ( | February 25, 2016

ASK Group has closed its fourth Real Estate Fund- ASK Real Estate Special Opportunities Fund II at Rs 1,400 crore (about $205 million), the company announced, and this is among the largest largest domestic fund-raising exercises for realty investments

Through the fund - ASK Real Estate Special Opportunities Fund II - the firm will invest in mid-sized residential projects, and has already committed money in one Mumbai and another residential project in Chennai, according to information available on its website.

With regard to pure equity realty funds, this is the largest domestic vehicle raised in India, during the past five years.

“ASK provides growth capital to the developer partners as we believe in equity returns. This is our third domestic real estate fund raised in the last seven years and previous two domestic real estate funds are fully committed. We have primarily focused on Family Offices/ Ultra HNI investors. We have made five full and seven part exits from the first two funds in just over four years,” said Sunil Rohokale, MD and CEO, ASK Group.

The latest fund - with tenure of six years and two extensions of one year each had held its first close in March 2015, and with the final close, ASK Group’s real estate private equity assets under management stands at Rs 3500 crore ($511.1 million).

“Investors in the current market conditions see performance track record and strategy. So far, ASK has returned superior risk adjusted returns and focused on partnering with reputed developer, midsize residential projects and top six metro cities has earned us almost 2/3rd of repeat investors. 25 per cent of the new fund has already been committed in two projects so far,” said Amit Bhagat, MD and CEO, ASK Property Investment Advisors.

The new fund which was launched in October 2014, will focus on investing in six major cities including Mumbai, Pune, Chennai, Bangalore, Delhi-NCR and Hyderabad in next 18-24 months.

ASK Group, a financial services group, has committed Rs 2,000 crore in 19 projects ($292 million) till date.

In the financial year 2015-16 alone, the group has invested Rs 365 crore ($53.3 million) in Rajesh Lifespaces’ Vikhroli project, Rs 125 crore ($18.3 million) in ATS group‘s Noida project, Rs 112 crore ($$16.4 million) in Purvankara’s Chennai project,.

It has exited three investments in Mumbai’s Rajesh Lifespaces with 2.26x in over three years, Pune-based Amit Enterprises in more than three years with a multiple of 2.53 and Paranjape with 1.80 times in less than three years.

Good news if you work in real estate - your salary’s probably going up | ANUSHREE SINGH | FEB 23, 2016, 05.16 PM

If you are looking for a job or already working in real estate, you may get lucky as companies are giving above average salary increases. This despite both the residential and commercial markets have not grown as aggressively as analysts or the industry have been hoping under the Modi-led NDA government.

"A lot of it is governed by macroeconomic factors and there's less to do with the industry per se. For example, the GDP has not been very high which means surplus income at the household level has not changed much. This has resulted in lesser investments," says Suryanarayanan R, a senior consultant for Aon Hewitt.

However, this sector will not see saturation anytime soon. That's because real estate is an evergreen sector and Indians love to put their money there if they can afford it.

"As a result," Suryanarayanan thinks "the official predictions for salary increases in this sector are too low." He says the official prediction of 9.8% is "a cautious number which I see would reach around the India average of 10.3% in the next 12-18 months."

For the infrastructure segment, the outlook is moderate and success will depend on the progress of factors like the Land Acquisition Bill, government clearances at a departmental level, and funding/payment clearance to the vendors along with speedy review and closure of tenders.

Meanwhile, attrition in real estate continues to be higher than overall in India which is a reflection of the growing sector and many opportunities available across the real estate sector. The infrastructure companies are observing a slightly lower rate of attrition given the current challenges the sector is facing.

"Key talent is not available on structural side in India, and so companies need to look outside India," Suryanarayanan argues.

"Within the industry, if your genesis lies in the corporate houses, you will borrow practices from there when looking at talent retention/ rewards as opposed to pure real estate players who are still coming up the curve in this regard," he says.

"That's why there's a clear trend with organizations moving towards a professionally managed approach, which has enhanced focus on people and people practices in the short term, leading to a clear impact on the overall morale, engagement, retention and growth opportunities for employees in the sector," he adds.

Moreover, the emphasis on the improvement and enhancement of existing infrastructure across the country, with initiatives such as smart cities, housing for all by 2022, and so on, could create further opportunities for the real estate sector to grow. Additionally, the sector would get a strong boost if measures such as the land acquisition bill are passed to ensure that the urban infrastructure projects, highway corridors and all other projects which are dependent on easy availability of land can pick up pace.

Suryanarayanan says the demand for commercial spaces meanwhile has continued irrespective of the sector overall. "Despite an overall economic outlook being moderate, we continue to see continuous demand in this segment which is being driven by expanding organizations and global organizations setting up their offices in India," he says.

However, one major challenge the big players may have to face is the movement of talent to regional players. "Unlike other industries, real estate is not controlled by handful big players. There may be 200 to 300 regional players. It is a very fragmented industry. Therefore, we will see spurt happening in pockets. Even as emphasis has always been on the tier 1 cities but there's more focus on the tier II, III cities. Now, with the government announcing affordable housing for everyone by 2020, it's going to drive demand at smaller locations. This may have several companies not doing well lose their talent to the regional players as demand there goes up," Suryanarayanan says.

Growing demand from Startups pushes up the rentals in Bengaluru’s Koramangla

The Realty Paper | Hrishikesh | Wed, Feb 10th, 2016

The gradually increasing demand for commercial space from startups in India has led to a 10% increase in rentals in the hubs for these companies over the past one year, according to real estate services firm CBRE.

The top five micro markets that have witnessed rentals moving up include Cybercity in National Capital Region, Koramangla in Bengaluru, Andheri East and Goregaon in Mumbai and Kukatpally, Manikonda in Hyderabad. “The cities that led the demand include Bengaluru and Gurgaon. By 2020, there will be 11,500 startups, employing over 250,000 people,” said Ram Chandnani, managing director-transaction services at CBRE South Asia.

Currently, nearly 10% of the total office market demand is driven by the e-commerce companies. This segment barely existed two years ago. In 2015, these companies leased 4.3 mln sqft compared with 0.54 mln sqft in 2014, as per CBRE.

“At a time when quality supply is drying up in the market, the additional demand coming in from e-commerce has surely had a positive effect on the rental values of key e-commerce favourite micro markets like Mumbai’s Eastern Suburbs, Whitefield in Bengaluru and NH8 in Gurgaon,” said Ramesh Nair, chief operating officer business and international director at JLL India.

Nair said the demand from e-commerce is generally directed towards quality Grade A spaces which provide large floor plates in the peripheral business districts of various cities including Mumbai, Delhi-National Capital Region, Bengaluru, Chennai and Hyderabad. Taxi service provider Ola, for instance, recently leased 20,000 sqft of prime office space at Embassy Golf Links in Bengaluru, while online marketplace Snapdeal rented 0.43 mln sqft in Gurgaon and Pinelabs, a payment solutions firm, leased 60,000 sqft in Noida. took 0.15 mln sqft on rent in Supreme Business Park, Mumbai and Oyo Rooms leased 0. mln sqft in Space Palazo, Gurgaon. “We have been seeing active interest from e-commerce companies, which are now an important segment of our overall portfolio. It is a small but interesting new area and we have been looking at different solutions to respond to this segment,” said Mike Holland, chief executive of Embassy Office Parks, a joint venture between Embassy Group and Blackstone.

Why Wall Street is pouring millions into India’s real estate sector | John Tenpenny | 28 Sep 2015

Canadian investors may want to sit up and pay attention to India’s real estate market as Wall Street has recently upped its commitment to the real estate sector, which is estimated to be worth $180 billion by 2020.

In the last few months, global giants, including Goldman Sachs, Warburg Pincus and Blackstone, have invested more than US$910 million in Indian real estate firms, a far cry from the last couple of years when investors shied away from India’s real estate industry.

“The sentiments had started improving right after the results of general elections in 2014,” Anuj Puri, chairman and country head of JLL India, a real estate consultancy, told the website Quartz.

Over the past five months Goldman Sachs has invested $300 million in real estate development and income-producing assets in India.

“The government’s focus on simplifying regulation and boosting economic growth will kick-start investment and consumption,” Ankur Sahu, co-head of private equity at Goldman Sachs in Asia, said in a statement.

The country’s real estate sector has been recovering from the global financial crisis, but experts see the long-term outlook as promising.

“The inherent Indian demographics still makes the country’s real estate sector attractive. But if you are looking at short-term gains, then that continues to be a challenge,” said Shashank Jain, partner, transaction services and real estate deals leader at PwC India. “The long-term story is intact.”

Experts want Jaitley to reduce tax burden on real estate projects in Budget 2016 | FEB 22, 2016, 02.31 PM

Various industry bodies have been making representations to the Finance Minister on Budget 2016. Magicbricks has been talking to consumers on their biggest concerns and how they should be addressed in the Budget by Finance Minister Arun Jaitley. Keeping these in mind, we have put together five things in Budget 2016 that can change the course of real estate in the country.

1) Reduce the tax burden on real estate projects. Currently 30-35% of the cost of a residential project is because of Central, state and local taxes. Many materials are taxed as input materials and then taxed again as completed projects, which needs to be brought down significantly. The earning for the cities has to be on levying property taxes after occupancy. If value-added services are offered such as club houses, jogging tracks, parks, sites for music concerts, etc in addition to basic services like water and power, that too should be able to fetch the city government good income.

2) If the developer uses pre-fabricated or pre-cast materials to speed up construction and reduce pollution, there is an additional 10% that is added to the cost of the property. This burden should go away immediately so that good quality construction using standardised components can help meet the 2022 target of Housing for All.

3) Create an incentivised timeline for speedy approvals or deemed approval system for housing. While this is in the purview of city governments, this incentive can be bundled with the Smart City and AMRUT funds that states and cities can get from the Centre. There should also be penalties of poor access to development funds if the city does not have efficient approval system for projects.

4) There are various sporadic orders from the National Green Tribunal as knee jerk reactions to rising pollution. Can Budget 2016 incentivise non-polluting methods of construction and waste management and also create a penalty for polluters?

5) Finally, citizen's participation in various city-level programmes have been spoken about. Can there be some means of incentivising citizen's participation in planning for Smart Cities through an organised mechanism? Maybe create a fund for capacity building at citizen levels to be partners in creation and use of smart cities
(The article is authored by Jayashree Kurup, Head, Content & Research , Magicbricks)

Real estate licensing to go online in Haryana

Dipak K Dash | TNN | Feb 7, 2016, 04.29 AM IST

New  DELHI: All process relating to change of land use (CLU) and obtaining licence for real estate projects in Haryana will go online by June 30. The town and country planning department will launch first few applications by March-end and the rest in June to end discrimination, selective choice in processing applications and corruption. The applicants can also track the progress of their applications.

The online system will have five features and cover the entire cycle of a project starting from the filing of application to their scrutiny, sanction of building plans, payments by developers for external and infrastructure development to government besides the monthly or quarterly progress of the project and compliance of norms.

Even minute details including notices and orders issued by local offices will have to be uploaded, thereby leaving no scope for them to misuse their authority. Since every detail of projects including that of allottees will be available online, anyone buying a flat under economically weaker section (EWS) category won't be able to buy another one from a different developer.

Till now there was no such system to check whether one person has several EWS flats and there have also been allegations of developers booking these flats in "fake" names.

Banks likely to be allowed to revalue real estate assets

The Times Of Inida | Mayur Shetty | Feb 2, 2016, 01.19 PM IST

MUMBAI: : Raghuram Rajan's move to release regulatory capital for banks has received a positive response from the market. Stocks of public sector banks inched up despite investors being disappointed over the central bank's decision to hold policy rates.

In his policy statement, the RBI governor Raghuram Rajan said that the central bank's norms were stricter than global norms issued under Basel on recognising assets that have increased in value. "We are looking at allowing banks to use a part of this as capital," said Rajan. In response to what kind of assets could be revalued, Rajan said that many banks hold real estate where the value is not recognised anywhere and this could one of the items that could be revalued.

Almost all public sector banks hold real estate with market value running into thousands of crore. But conservative accounting norms prevent this value from being recognised in the balance sheet of banks.

Although the Bankex - which represents a broad category of bank stocks - was flat thanks to a decline in share prices of private banks, several psu banks showed gains. Bank of Baroda was the top gainer with a 2% gain at Rs 124. Other gainers were Punjab National Bank and State Bank of India which mildly recovered by 1.28% and 0.5% respectively. Federal Bank, Yes Bank, Axis Bank and HDFC Bank were among the private banks that were in the green. ICICI Bank continued to be a drag on the bank index with the share price declining by 1%.

In the past banks were allowed to revalue their real estate assets to beef up their capital adequacy.But the revaluation reserves could be utilized only toward tier II capital and not as tier I capital which is at the core of the new capital adequacy norms under Basel III.

Rajan also sought to alleviate some of the concerns of market on the bad loans stating that the market fears of 17% stressed assets were on the higher side. He said that loans described as stressed were not bad loans and many could be brought back on track through change of management.

Real Estate Market Showing Signs of Improvement in India: Report

SiliconIndia   |   Thursday, February 18, 2016

BENGALURU: The real estate market in India is limping out of the slumber says the recent report from Proptiger. Improvement is sales reported for the first time in the last 10 quarters comes as a breather for the real estate residential market, reports Srinibas Rout.

The report titled Realty Decoded Q3 FY’16 mentions that cities including Ahmedabad, Kolkata, and Hyderabad witnessed increased launches compared to that in Q3FY’15. Stability in prices can be expected due to the tangible signs of recovery in most cities.

Affordable segment is doing much better than the luxury segment with over 50 percent of sales but luxury segment has plenty to look forward to as there is a consistent increase in sales. Greater demand has been witnessed across the cities for a budget of not exceeding 75 percent with the exception of Mumbai and Gurgaon.

Bangalore rose by 13 percent over the last 10 quarters while Hyderabad in close on the heels standing at 12 percent. Factors such as subsiding inflation and softening of policy rates may also catalyze the real estate market growth, says the report.

Governments Chipping in
Both the ruling central government and the state governments are taking measures to help the real estate sector growth. The cabinet gave green flag to 20 major amendments to real estate bill. The government also partially relaxed FDI norms for the real estate sector. Rajasthan Housing Board cut down the additional charges, UP government is promoting green buildings by offering no additional tax, Haryana enabled real estate developers to set up more development projects, and Maharashtra has annulled ban on the fragmentation of non-agricultural lands measuring 2,000 square meters or less.
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Modi government puts real estate bill on priority list to pass it in Budget session

ET Bureau | NIDHI SHARMA | Feb 27, 2016, 11.04 AM IST

NEW DELHI: The Narendra Modi government has flagged the much-delayed Real Estate Bill as a "priority" bill to be passed in the ongoing Budget session of Parliament.

While the BJP government is still trying to garner support for the Goods and Service Tax ( GST) Bill, it is hoping to pass the Real Estate (Development and Regulation) Bill in the current session.

According to sources, the government has indicated it as a "priority" Bill and once it sees Parliament functioning normally it would push it in Rajya Sabha.

A senior government official told ET, "This is a high priority bill. We had decided against passing it in the winter session as there was hardly any business conducted. The Rajya Sabha functioned normally in the last 3 days and the government decided to push only non-controversial urgent matters then. If this time there is any indication of Houses running smoothly, it would be done in the first half."

The government is reaching out to non-Congress parties to push through the legislation, which has passed the scrutiny of a parliamentary committee. The Bill had been referred to a select committee, which had given its report in July last year. However, Congress, Left and AIADMK had expressed their reservations on the report through dissent notes.

Seeing stiff opposition right till the select committee, the government had formed an informal group of ministers (GoM) to formulate a politically-acceptable Bill. The ministry of housing and urban poverty alleviation, the ministry spearheading the Bill, accepted all the changes suggested by the select committee and the Cabinet gave its approval with further amendments on December 9. With these changes, the BJP government has even accepted suggestions made by Congress.

At present, the government faces the challenge of getting it first passed in Rajya Sabha and then take it to Lok Sabha. This would need a lot of political manoeuvering as the MPs would demand a debate on the Bill in both houses.

ASK Group to invest Rs 1,373 crore in real estate

M Allirajan | TNN | Feb 24, 2016, 08.02 PM IST

COIMBATORE: ASK Group has announced the closure of its fourth real estate fund -- ASK Real Estate Special Opportunities Fund II -- of Rs 1,373 crore ($205 million).

The company is planning to invest the same in next 18-24 months in six major cities-Mumbai, Pune, Chennai, Bengaluru, Delhi-NCR and Hyderabad-in mid-sized residential projects.

With the closure of this fund, ASK Group's real estate private equity assets under management/ advisory stands at Rs 3,500 crore. "ASK provides growth capital to developer partners as we believe in equity returns," said Sunil Rohokale, MD&CEO, ASK Group.

"This is our third domestic real estate fund raised in the last seven years and previous two domestic real estate funds are fully committed. We have primarily focused on family offices/ ultra-HNI (high net-worth individuals) investors," he said. The ASK Group has so far committed about Rs 2,000 crore in 19 projects.

"Investors in the current market conditions see performance track record and strategy. So far, ASK has returned superior risk adjusted returns by focusing on partnering with reputed developer, mid-size residential projects and top-6 cities," said Amit Bhagat, MD&CEO, ASK Property Investment Advisors.

ASK Group has invested Rs 365 crore in Rajesh Lifespaces' Vikhroli project, Rs 125 crore with ATS group in Noida project, Rs 112 crore in Purvankara's Chennai project and has exited three investments.

The group said it has exited Mumbai's Rajesh Lifespaces' investment with a multiple of 2.26 in over three years, and its investments in Pune with Amit Enterprises and Paranjape with a multiple of 2.53 (over 3 years ) and 1.80 times (less than 3 years ) respectively.

Additionally, the group has exited from 'ATS ONE Hamlet', a project of ATS Group in Noida in with a multiple of 2.45 in just over two years and 'Liviano', a project by Darode-Jog Developers in Pune while returning a multiple of 2.35 in just over three years.

Report for CREDAI on Impact on Real Estate Development in India (2007) | Editor | February 2, 2016 @ 05:34 PM

Confederation of Real Estate Developers' Associations of India (CREDAI), India's apex body of promoters and builders with about 18 state/city level associations of builders and developers comprising of about 3,500 individual members across seventeen states covering more than 60 per cent of organized private real estate development activities in India, has retained the services of MagicBricks, India's No.1 property website,promoted by The Times of India group, for the study on Section 80-IB (10). provides content pertaining to every aspect of the real estate industry and helps users make informed decisions pertaining to all their property requirements. The following document is a report on Impact of Section 80-IB (10) under the Income Tax Act on Real Estate Development in India.

The study is in six parts.The introduction deals with the overall background to the incentive, the Executive Summary encapsulates the study and its findings in brief, Chapter 1 deals with the incentive, Chapter 2 deals with the survey and its findings, Chapter 3 tackles the issue of housing finance, Chapter 4 deals with middle budget housing.

Chapter 5 gives the recommendations on the basis of the study and Chapter 6 summaries the conclusion. Section 80-IB (10) tax incentive was announced in 1998 (valid upto 2005,later extended to 2007) for real estate developers in India to construct upto 1,000 sq ft apartments in Delhi and Mumbai (and a ring of 25 km around it) and upto 1,500 sq ft apartments in other cities on a minimum plot size of 1 acre.The tax break is equivalent to 100per cent of the profits earned from this project in the previous financial year.

This tax incentive came into force in year 1998 after Rakesh Mohan committee's `India Infrastructure Report 1995',predicted a housing shortfall of 1 million housing units annually and the 10th Five-Year Plan document released in 2002 predicted a housing shortage of 22.4 million dwelling units.

The government was of the view that such a requirement could only be met if the private sector was encouraged to participate in a very big way.The Section 80-IB (10) Income Tax Act was one of the incentives used to provide the private sector with tangible benefits to construct smaller housing units which would then remain affordable to the masses.

E-commerce may be keeping up the pace but India is slowing due to mining, real estate woes | Feb 9, 2016 12:44 IST | Saurabh Mukherjea

For almost a year now my colleagues and I have been of the view that the Indian economy has been steadily losing steam. With a battery of metrics - such as credit offtake, cement demand, rural wage growth, corporate profit margins, banking system stress - now behaving exactly as they should in a steady economic slowdown, it is now time to delve deeper into the economy and understand which parts of our economy are more exposed to the slowdown than others.

We classify the Indian economy into three distinct segments that appear to be growing at distinctly differing paces namely: (1) The low speed economy (share in GDP 40%): Agriculture, construction, public administration and banks appear to be decelerating or growing at the slowest pace of all the sectors in the economy; (2) The mid speed economy (share in GDP 30%): Commercial transport, manufacturing, residential real estate and mining appear to be growing at a middling pace; and (3) The high speed economy (share in GDP 30%): Personal transport, hotels, commercial property and business services appear to be growing at a relatively rapid pace.

This column will focus on why these three segments are growing at different speeds and what that portends for overall economic growth going forward.

The low speed economy (40% of GDP): These segments of the economy have been hit by an unfortunate combination of bad weather (two droughts in a row have crippled the agricultural sector), specific policy decisions (the NDA has shrunk subsidies in its first two budgets and that has reduced the supply of funds being pumped into rural India) and crippling economic imbalances which arise from time-to-time in a free market economy. Let me elaborate on the last point - economic imbalances - as they arguably the most potent negative influence squeezing the Indian economy today.

Between FY04-08 India embarked upon an intense blast of capex - in those years capex grew at around 17% per annum (in real terms). Unfortunately, a large part of the monies for these investments were pilfered by corrupt promoters and their friends in political & administrative circles. Much of the rest of the investments were hit by the inordinate delays for clearances & permissions that plague almost every aspect of construction activity in India.

As a result, a large part of the capex of the go-go years became stressed assets on the balance sheets of the banking system and excessive leverage on the balance sheets of companies in the power, infra and roads sectors.

Now, with 15% of its assets in trouble, the banking system is in no shape to finance a capex recovery in India and, in parallel, the power, infra and roads sectors are in no shape to invest fresh monies. The Japanese economist, Richard Koo, calls such events a “Balance Sheet Recession” and he has articulated eloquently why it is so difficult for countries stuck in such recessions to drive an economic recovery. In particular, monetary policy loses its effectiveness in balance sheet recessions because the banks don’t have the ability to lend and corporates don’t have the ability to invest.

The high speed economy (around 30% of GDP): At the other extreme is that segment of the Indian economy which is benefitting from private equity & venture capital inflows into the Indian tech sector plus large investments being made by firms such as Google, Amazon, Alibaba and Uber in India.
If we combine these two streams, I reckon around $20-25 billion of foreign capital has been pumped into the Indian economy over the past 12 months. Whilst this is obviously benefitting the e-commerce companies, the money they are spending is benefitting other sectors such as airlines (domestic passenger traffic growing at more than 20% per annum), hotels (utilisation levels are at six-year highs), commercial real estate (demand for office space has recovered over the past year), cars (number of cars sold is growing at 7% per annum) and urban consumption in general (retailers such as Trent and ShopperStop are reporting double digit same-store-sales growth).

It is hard to ascertain how sustainable this e-commerce driven boom will be. Whilst overseas PE/VC flows have already started tailing off, deep-pocketed companies like Amazon, Alibaba, Softbank and Google are obviously not going to give up on India in a hurry. Furthermore, it appears that the Indian banking system has pretty much stopped directing credit towards corporate India. That in turn means that our banking system is now almost entirely focused on seeking its growth by directing credit to the retail borrower. These two factors - foreign equity capital inflows into the e-commerce sector and domestic credit flow - should keep the high speed economy centred around urban consumption in reasonably good shape in CY16.

The mid-speed economy (around 30% of GDP): Whilst I reckon the high speed and the low speed sectors of the economy will continue behaving in CY16 in much the same manner that they have done in the year before, the mid-speed economy seems to be heading for a pronounced slowdown. This is due to two reasons. Firstly, the residential real estate sector is plagued by numerous problems both:
-- On the supply-side (supply of equity capital from the black money economy, which was the core funding source for this sector, has dried up; in parallel, the formal lending sector has turned off the tap for developers); and
-- On the demand-side (2% rental yields in a country with 10% cost of borrowing makes India the world’s most overvalued residential real estate market; add to that many years of unsold inventory in the big metros and you have a recipe for demand hollowing out).
Secondly, the mining sector is being hit by the twin impacts of the global correction in commodity prices (which is making exploration-related activities unviable) and the government’s inability to find a viable construct for auctioning coal mines in the wake of the Supreme Court’s September 2014 judgement cancelling all mines granted by the government over the past 20 years.

They say that in politics the median voter, rather than the majority, determines the election result. Applying that analogy to the economy would suggest that the mid-speed economy will determine the direction of economic growth in India. For now that direction appears to be downwards.
The writer is CEO - institutional equities, at Ambit Capital and the author of “Gurus of Chaos: Modern India’s Money Masters”.

Real estate sector’s expectations from Union Budget 2016

Realty experts hope that Finance Minister Arun Jaitley through his Union Budget announcements on Feb 29 may bring in cheer for both home buyers and developers. | Navneeta Srivastava | February 17, 2016 3:11 PM

Like all sectors, the real estate segment is also looking at this year’s Union Budget with hope and expects changes ranging from service tax restructure relaxation to the long pending demand of industry status. Realty experts foresee this year to be a lucrative one for the sector, which appears optimistic towards the budget.

Although, the office space saw some pick-up in activity in the year gone by, but the residential sector continues to reel under slowdown due to high unsold inventory amid few new launches.

Realty experts hope that Finance Minister Arun Jaitley through his Union Budget announcements on Feb 29 may bring in cheer for both home buyers and developers. If this happens it may have a direct impact on the sentiment of prospective home buyers and it may reinstate their trust in the realty market.

“With the upcoming Union Budget 2016-17, realty experts and the property buyers are once again pinning high hopes from the government. The sector, reeling under pressure over the last one to two years, needs significant push in terms of project approvals, taxation policies, industry status, to name a few. One may opine that these have been the key budget expectations over the last three years but there has been little done so far. With overall sentiments of buyers looking significantly positive and realty experts hoping for lucrative 2016, budget will set the tone for the realty sector over the year,” Sumit Jain, CEO and co-founder, CommonFloor said.

Experts also hope that GST Bill may get a passage this budget session that can replace multiple taxes (service tax, VAT etc) when purchasing flats. Currently, home buyers are liable to pay multiple taxes on purchase of under-construction properties. In addition to the Stamp Duty and Registration Charges, other taxes such as Service Tax, VAT, Excise Duty, Custom Duty and Entry Tax, among others, are levied on home buyers. This combines to form about 22-25 per cent of the total cost of the unit. Since the focus is on affordable housing, the government must pass the Goods and Service Tax Bill in the Rajya Sabha.

With the help of experts, we list out 5 broad expectation from the Union Budget vis-a-vis realty sector:

1. Tax benefits for buyers: The call for hiking deduction limit on the interest component of home loans is the significant change that realty experts want this budget to offer. They believe this would boost housing demand. On purchase into an under-construction property, buyers can only claim tax benefits of Rs 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs 30,000 if the builder delays construction beyond this - and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent.

Anuj Puri, chairman & country head, JLL India said, “Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements.”

He furter adds similarly, if an under-construction property is purchased from capital gains, its construction must be completed within three years of its sale to avail exemption. There can be delays by developer in such cases too. These deductions should be brought at par and the construction timeline should be extended from the current three years to five years.

2. Single window clearance: The Union Budget should pay specific heed to this particular need from developers to avoid delays in project, feel developers. Procedural delays developing due to clearance at multiple levels are among the major reasons behind the construction delays, finally adding to the woes of home buyers.

“The sector expects a single window clearance system from the Budget so as to reduce time and cost involved in getting permissions between various departments. It is estimated to account for nearly 25 per cent of the cost paid by the buyers. Constant hindrances including speedy government approvals ultimately result in delayed deliveries,” CommonFloor’s Jain said.

3. Industry status for realty sector: This has been a long pending demand of the real estate sector. Experts see this as a game-changer move for the real estate sector that if implemented could benefit both consumer and developers alike.

“An industry status will serve as a game-changer since cost of funding provided to developers will come down significantly, and they can, in turn, pass on the benefits to the consumers, hence propelling sale volumes,” said Narasimha Jayakumar, Chief Business Officer 99

Jain of Commonfloor also expects an industry status from the coming budget as real estate sector contributes nearly 7 per cent to the country’s GDP.

4. Real Estate Bill passage and implementation: Union Cabinet last year approved the Real Estate Development and Regulation Bill, which has yet to become a law. The approval boosted buyers confidence as if accepted it would make real estate more transparent and organised. Realty experts want the Bill to be made into a law at the earliest to look into the concerns and issues within the sector.

“Discussions around the Real Estate Bill must reach a positive conclusion, which will give home buyers the confidence to return to the market and deal with responsible builders,” said SARE Homes managing director David Walker.

Pinning hopes on the forthcoming Budget Jayakumar calls for expedititing the process of turning the Real Estate Bill into a law. He says, “Aimed at protecting the interests of residential as well as commercial property buyers, by promoting transparency and accountability into the sector, the Bill makes it mandatory for registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority. It includes ongoing projects too that have not received Completion Certificates so far and these projects, the Bill states, need to be registered with the Regulator within 3 months.”

However, Urban Development Minister M Venkaiah Naidu on Feb 12 expressed hope that the Bill will get passed in the upcoming Budget session.

5. Tax sops and Real Estate Investment Trusts(REITs): Dividend Distribution tax (DDT) has remained the biggest bottleneck in REITs, which has not yet kicked off in India. There has not been a single REIT listing in India to date due to DDT ever since its announcement.

“Despite the announcement last year, there has not been a single REIT listing in India to date. The primary reason is the presence of Dividend Distribution Tax (DDT).

While the government has worked towards removing other bottlenecks, DDT has remained a key pending issue. Developers and other asset holders need the government to do away with it in the Budget 2016. Until this vital change is made, REITs - which can almost single-handedly revive the Indian real estate sector - will remain pipped at the post. To aid the faster revival of the real estate sector as well as to provide a significant boost to the economy in general, the Budget must address this issue,” JLL’s Puri said.
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