Month: June 2013

Land deals push up real estate prices in Kolkata

Defying the overall slowdown in the real estate sector, exorbitant land prices are pushing housing prices in Kolkata.

Land prices have gone up by more than 50 per cent in many plush localities, as demand remains steady and hardly any new townships have come up in urban and semi-urban areas in city fringes.

The recent land auction by government bodies like Kolkata Municipal Corporation (KMC) and Housing Infrastructure and Development Corporation (Hidco) give a fair idea of the burgeoning land prices in the city. In June this year, KMC sold a 2-acre plot on EM Bypass for Rs 115 crore, making it the biggest land deal in the city so far. The last big land deal was in 2009, when a 3.35-acre plot on EM Bypass sold for Rs 135 crore. More recently, in the IT township of Rajarhat, a 2.5-acre plot for a retail-cum-office complex fetched Rs 51.13 crore for Hidco.

“The value of land has gone up by around 50 per cent in Kolkata, the impact of which will be reflected in the upcoming project. The land supply is reducing, but the demand remains steady and there are hardly any new townships coming up to meet the demand,” said Santosh Rungta, a city-based realtor.

The abysmal rise in land prices in West Bengal is not new. Around 2009, in the earlier Left Front regime, government agencies made windfall gains by selling land in prime locations.

For example, three prominent government agencies involved in land deals in and around Kolkata · The Kolkata Metropolitan Development Authority (KMDA), Kolkata Municipal Corporation and West Bengal Housing Board· signed deals worth more thanRs 18,000 crore, for over 5,250 acres of land during the period in little over two years. In fact, KMDA was credited with signing deals, worth more thanRs 800 crore with real estate developers on a single day.

One of the biggest hurdles in developing new townships in West Bengal is the the Urban Land (Ceiling and Regulation) Act (ULCA), 1976. According to the Act, the ceiling limit on vacant land in a category ‘A’ city like Kolkata is 7.5 cottah or about 500 square meters.

West Bengal is one of the few states in the country to have a legislation like the ULCA. The move is in sync with the apprehensions of the chief minister. After all, Banerjee had once wondered, “What will happen if someone wants to buy the city?”

The demand for repealing the ULCA was raised for the first time by Godrej Properties chairman Adi Godrej, at an industry meet within the first month of Banerjee taking over the chief minister’s office.

However, much to the disappointment of the developers, urban development minister Firhad Hakim has recently ruled out the possibility of repealing the Act. “We are not going to abolish the Land Ceiling Act,” he said. “Instead, we will give permission to developers for purchase of land beyond ceiling, provided they reserve 30 per cent housing for low-income housing segment.”

“In Kolkata, the real estate prices have not gone down, and the market is steady. Prices have gone up by around 15 per cent in some localities,” said Pradip Chopra, chairman and managing dierctor, PS Group.

Notably, unlike the real estate market in Delhi and Mumbai, in Kolkata the real estate sector is driven by consumers, rather than investors. As a result, the prices generally remain steady in times of boom or slowdown.

Thus, even as the housing market in the city has been insulated to recession, the commercial real estate market has been facing a slowdown.

“The occupancy rate office space is low and there are lot of vacant spaces in Sector V and Rajarhat,” said Chopra.

The growth of commercial real estate market is slow in Kolkata, even as the housing market has been growing. In some cases the office rentals have also corrected, but prices have not gone down,” said Pradeep Sureka, Managing Director of the Sureka Group.

Source: The Business Standard

More people to get homes under revised scheme

KOLKATA: With the task force on affordable housing suggesting revisions in the eligibility criteria for affordable housing schemes, Bengal is likely to witness a huge growth in demand for such residential units. Already the state has an estimated shortage of 12 lakh residential units for economically weaker section and medium income group.

The task force has suggested an upward revision of the income ceilings to Rs 8,000 per month against Rs 5,000 per month earlier. Since many residents belonging to the economically weaker section do not have regular income, the task force also proposed to consider those with an annual income of Rs 1 lakh in that case.

For the low income group, the task force recommended a revision in the ceiling from Rs 5,000-10,000 to Rs 8,000-10,000 per month, translating into an annual income of around Rs 2 lakh. It said that for cities and urban centres having a population of more than a million, state governments could consider an increase of up to a maximum of 25% on the recommended household income levels.

The estimates with the ministry of housing and urban poverty alleviation show that West Bengal had a shortage of more than 12 lakh units in 2012. Apart from the 5% demand coming from medium income group, rest of the demand for housing is from economically weaker section and middle income group.

According to Debashis Sen, secretary of the state’s urban development department, “We have been seeing huge demand for affordable housing across the state. Recently we invited applications for residential units in Rajarhat for the economically weaker section and have received more than 3,000 applications for 297 units.”

So far the state government has completed 74,000 dwelling units under JNNURM — the highest in the region. The state government has asked the central ministry of urban development for a permission to revise the project cost to prevailing market prices.

In a recent report, global real estate consultant Jones Lang LaSalle mentioned that if land is acquired at a cost of Rs 150-250 per sq ft, an affordable housing project with basic amenities (with construction cost of Rs 800-1,000 per sq ft) would result in a minimum selling price of Rs 1,400-1,700 per sq ft. The construction cost forms nearly 50-60% of the total selling price for affordable housing.

Source: The Times of India

Karnataka governor returns Land Revenue Bill passed during BJP government

BANGALORE: Governor H R Bhardwaj on Wednesday returned the Karnataka Land Revenue (Second Amendment) Bill, 2012 , passed by both the Houses of the legislature in last days of BJP tenure.

The legislation was brought by inserting new section 94CC in the act with the intention of regularizing unauthorized occupation of revenue land belonging to government areas with dwelling houses constructed prior to January 1, 2012 by granting the land to unauthorized occupants after payment of small amount of fee.

Justifying the decision to return the bill, governor has said “The policy of regularization of encroachment of government land directly encourages illegal occupation of government land. This amendment will cause severe inroads into the lofty principles such as rule of law, equality before law, due to process, majesty of law, dignity of courts, inalienable fundamental rights, directive principles etc, which are enshrined in the constitution,” he said. He added that in the larger interest of the public, illegal occupation of government land has to be curbed.

Referring to Task Force for Protection of public lands headed by V Balasubramanian, Joint Legislature Committee constituted to go into the deadline of the problem of land grabbing and encroachments and also Supreme Court judgment in the case of Jaspal Singh Vs State of Punjab in January 2011, Bhardwaj in a strongly worded observation has said the amendment bill does not specifically prohibit grant/regularization of common land. “This amendment does not serve any public good or social cause, on the other hand it may lead to illegal grabbing of government land.”

Governor also observed that similar act was passed in April 1998 of regularizing the unauthorized occupation as a one time measure. “However it is not known why such lands under unauthorized occupation made prior to April 1998 could not be granted till now.”

Source: The Times of India

Developer booked for cheating

A Delhi-based developer has been booked for duping a home buyer of Rs. 10 lakh while booking a house in Gurgaon.

The case was filed following a court order. DS Manchanda, who lives in a villa at Orchid Petals’ condominium in Gurgaon Sector-49, approached Delhi’s Patiala House court saying that the developer failed to complete the conveyance deed of his property as it didn’t have the occupancy certificate.

Balkishen Saraf, one of the directors at Orchid Petals, said, “We will take appropriate legal recourse.” He said the occupancy certificates are obtained gradually as the project is completed phase wise.

Metropolitan magistrate Ashok Kumar said, “certain cognizable offences are disclosed, which need investigation”.

Manchanda’s lawyer said that the buyer had paid the stamp duty of more than Rs. 10 lakh for the conveyance deed.

Source: Hindustan Times

LinkedIn books office space in Bangalore technology park

BANGALORE: California-based social networking site LinkedIn recently booked 74,341 sq ft of office space in Prestige Technology Park in Bangalore at 43 per sq ft, people familiar with the transaction said, establishing the fact that leading technology firms are investing in additional space in Bangalore.

“The new office space in Bangalore will house employees across functions, including customer service, engineering, sales and marketing,” said LinkedIn India Country Manager Nishant Rao.

The company has taken up space for consolidating its existing offices while the rest will be used for growth. “The new facility can seat 750 people and will be mostly used for expansion. It has also taken into account growth for three years,” said a person having direct knowledge of the transaction. LinkedIn has 150 employees in India as on December 2012.

The transaction was handled by property consultant DTZ.

LinkedIn India is headquartered in Mumbai with two offices in Gurgaon and a technology centre in Bangalore, the first outside the US. Situated at the Bagmane Technology Park, the LinkedIn Technology’s R&D centre is its fourth office in the Indian market. The world’s largest professional networking site, with over 20 million users in India, has added five million more users in the past 12 months ended March 2013.

India, with 100 million Internet users, provides the second largest user base for LinkedIn, after the US, where it has 74 million users.

LinkedIn has launched a series of new products to make things easier for users and its premium offerings in India. ING Vysya, HCL TechnologiesBSE 2.79 % and WABAG are among the companies that are extensively using LinkedIn Talent Solutions to establish an employment brand, develop their career pages and boost their recruiters’ ability to identify and connect with the best talent.

“Having grown by almost 500% since LinkedIn India started operations in November 2009, the 20 million members account for about 9% of LinkedIn’s global members (225+ million),” said Rao.

The 22-acre Prestige Tech Park has three independent towers having two wings each of an average floor plot size of 40, 000 sq ft. It houses some big companies such as JP Morgan, Quintiles, and Adobe. Private Equity fund Red Fort Capital had invested $35 million ( Rs 157.54 crore) in the tech park in January 2007.

Typically, leasing of commercial real estate is a good indicator of a country’s business outlook. According to Cushman & Wakefield, office markets in India registered a downward spiral in absorption in the first three month of the year.

Source: The Economic Times