Green Houses, Pay More For Your Dream Home, Realtors Gain More Cash & Global Uncertainties Hit Realt

News Posted - 2010-05-19

Biggies To Be Roped In For Green Houses

In order to reduce carbon emissions, the government will soon rope in major real estate developers for voluntary adoption of a set of new guidelines on developing low energy consuming green housing complexes. The initiative is part of the government's national action plan on climate change. The ministry of new and renewable energy (MNRE) has asked an expert agency, set up by it in partnership with The Energy And Resources Institute (Teri), to come up with a set of guidelines on how to develop large housing complexes in the most environment friendly and energy efficient way. Source: 14 May 2010 The Financial Express

Get Ready To Pay More For Your Dream Home

All those looking for a new home will soon have to shell out a heavier sum. The main reason for this is the decision taken by the government to impose a charge on real estate developers to give road connectivity to new properties. According to most of the developers, they will increase the sales price of houses to make up for this fee. The biggest impact of the move will be on people purchasing homes near national highways as these locations have good connectivity with cities. If a realtor wants the government to provide roads near real estates that are being built at other locations, then also the developer has to pay a fee to the authorities. The idea of imposing the connectivity charge came from the finance ministry. "The general view in the government is that if there is any private use of public properties, there should be a revenue generation to the government. It may be in form of tax or cess," a senior government official said. Source: 14 May 2010 The Financial Express

Ongoing Global Uncertainties Hit Realty

Real estate companies seem to be the worst hit by the current global uncertainties, along with the new norms for primary market issuances. At a time when confidence is yet to completely return to the market, experts feel this rate-sensitive sector will get only subdued response from investors. This could cause trouble for the companies, which plan to raise Rs 12,000 crore in the coming months. As per Prime Database, nearly 10 real estate public offerings have got the final go-ahead from the Securities and Exchange Board of India. Some big names are Emaar MGF Land, Lodha Developers, Oberoi Realty, Ambience and Neptune Developers. Considering the Sebi approval is applicable for a year, the coming months will see these companies roll out their issues. According to market experts, the current volatility in the secondary market has made most investors risk-averse and this impacts sectors that suffer from inherent risks. Some other challenges faced by the sector include the government's divestment programme, which aims to raise Rs 40,000 crore in the current financial year, and the new IPO norms that call for 100 per cent upfront margin from institutional investors. Source: 12 May 2010 Business Standard

Diversification Helps Realtors Gain More Cash

Hiranandani Constructions Pvt. Ltd's plan to set up a Rs10,000 crore power plant near Pune is just the latest in a trend that has seen real estate developers diversify into infrastructure construction and civil contracts. The developer has already created a separate entity, Hindustan Energy Generation Co. Ltd, which is going to develop the 400MW plant. The assurance of regular cash flows is prompting developers, whose returns from realty projects have been inconsistent in the past year, to turn to infrastructure. However, the peers of Hiranandani Constructions in the realty sector are opting to play a safe game by confining themselves to engineering, procurement and construction (EPC) projects and civil contracts and not getting into operations. Unitech Ltd, which recently announced that it would spin off its non-core businesses into a separate company called Unitech Infra Ltd, is looking at EPC projects, telecom transmission towers and hydropower projects as key focus areas. Omaxe Ltd has decided to get into civil construction contracts to boost its cash flows. Parsvnath Developers Ltd has also taken up construction projects for Delhi Metro Rail Corp. Ltd, building three station complexes. The developer is also constructing 13 shopping malls at Delhi Metro stations on a build-operate-transfer basis. "This is an example of backward integration, where a real estate developer gets into such contracts. It is an expansion strategy that generates revenue," said Mr Amber Maheswari, head of investment advisory at property consultant DTZ International Property Advisers. Source: 13 May 2010

Supertech Plans To Make Big Investments In Housing Projects

Supertech, a realty firm in India, is proposing to invest Rs4000 cr to build 15 mega housing and commercial projects. The realty projects, mainly across North India are going to be developed during the course of the next three years. The company is planning to raise capital through a public issue, in order to fund its future projects. Besides mega housing projects, the firm also announced the launch of a Rs.1, 000cr residential project at Noida - Supertech Eco village. This 6,000 unit development will be constructed in different phases over the next two and half years. Source: 10 May 2010

MHADA To Announce Results For Low-Cost Houses On May 18

On May 18, the Mumbai Housing and Area Development Authority (MHADA) is going to declare results for a lottery for 3,449 houses, bid on by 3.28 lakh people. But things wouldn't be pleasant for 1,111 people who will get an equal number of houses at Turbhe (Mandale), Mankhurd, as the authority does not expect regular water supply to these houses before December 2011. At present, 1,018 Economic Weaker Section (EWS) houses measuring 180 sq ft each, and 93 Low Income Group (LIG) houses measuring 320 sq ft each are empty. Source: 11 May 2010 Hindustan Times

Looking For A Home In Mumbai? Get Ready To Shell Out More

The state cabinet has decided to charge 1% cess on construction cost on builders and contractors, which will finally be passed on to the buyer. The amount collected from the cess will be utilised for the welfare of construction workers. The Building and Other Construction Workers Welfare Cess Act 1996 makes it mandatory for all state government to impose cess on construction costs. However, the government of Maharashtra had failed to implement it and so had to face the wrath of the Supreme Court. The government finally decided to levy cess on all construction works engaging more than 10 workers in the state after the chief secretary and labour welfare secretary were given contempt notices by the court. Source: 13 May 2010 DNA

Gurgaon To Get High And Reach To The Sky

After the height restriction on the construction of hi- rise buildings got deregulated in Delhi and other NCR towns including Gurgaon, a number of developers as well as HUDA started planning 150-180-metre-high skyscrapers in the Haryana city. Ireo, which claims to have got necessary height clearances from various agencies, is the first realty firm to build a 180-meter high residential tower with 51 floors in Gurgaon. The firm claims that its proposed high-rise will be the tallest residential tower in northern India. Other realty developers who are soon going to announce their 'hyper hi-rise' plans include MGF, DLF and Raheja Group. Source: 14 May 2010 Hindustan Times