MUMBAI: Home loans have become more expensive with the country�s largest housing finance company, HDFC, raising its retail prime lending rate (RPLR) by half a percentage point. Meanwhile, HDFC�s and ICICI Bank�s special dual rate scheme that guaranteed low rates for first two years came to a close.

A 50 basis point increase will have the effect of increasing the equated monthly instalment on a `10 lakh loan by `330. HDFC�s dual rate scheme, which allowed borrowers to raise loans at 8.25% up to March 2011 and 9.25% up to 2012, has also come to an end. But there is a likelihood that HDFC and ICICI Bank may come out with a revised dual rate scheme, considering that its main rival the State Bank of India�s dual rate offer continues until the end of this month.

The corporation is last among the large lenders to increase its prime lending rate.

Earlier this month, SBI, the country�s largest bank, and ICICI Bank both increased their prime lending rate by 50 basis points. Following Tuesday�s increase, HDFC�s lending rate on floating rate loans are almost in line with the two other lenders. ICICI Bank�s dual rate scheme which was valid until August 31 has closed. The bank has, however, not yet announced its new rates or the spread at which it will be extending home loans over the base rate.

Following the 50 basis point hike, loans up to `30 lakh are now available at 9.25%, loans between `30 lakh and `50 lakh at 9.5% and loans above `50 lakh at 9.75%. HDFC follows a three-month reset cycle for its floating rate loans, and hence, the change in RPLR will impact all the existing customers over the next three-month period, depending on their date of first disbursement.

The State Bank of India under its special scheme offers loans up to `30 lakh at 8% per annum for the first year, 9% for the second and third year and from then on at the rate of 1.75% over the prevailing base rate. Under the same scheme on loans above `50 lakh, a borrower pays the same fixed rates for the first three years. However, from the third year, loans will be priced at 2.25% over the base rate.

Looking for a house in one of those quite, verdant suburbs? Chances are that you would hear the word �redevelopment� from the real estate agent or the society secretary.

Walk into any old locality, famous for its serene surroundings, in a big city and you would see a few deserted buildings waiting to be demolished. Even those in good conditions may be on the verge of signing a deal with a builder to transform it into a tower. Replacing the dilapidated building with sturdy and modern construction doesn�t seem like a bad idea. In fact, it�s an advantage for potential buyers � especially in metros such as Mumbai, Delhi, Bangalore or Chennai � who dream of owning a house in a popular suburb of their choice. But buying a house in a redeveloped or under redeveloping society is a tad different from a regular home buying exercise.

SCENARIO I

The housing society is discussing the redevelopment project with a developer, but no agreement has been signed as yet. In such a case, buying into the project is as good as buying a house on resale. �However, the buyer should get a clear picture from those in charge of the society about the redevelopment plan and what stage the discussion is with the builder,� says Ashutosh Limaye, associate director-strategic consulting at Jones Lang LaSalle India.

SCENARIO II

An agreement is already in place between the society and the developer. If you are buying a flat in such a property, there are three parties involved in the transaction �the seller, the buyer and the developer�. Make sure that the developer is kept in the loop so that the rights of the existing society member (or the seller) are transferred to you (the buyer), with the knowledge of the society.

If the building is not yet demolished, you can move into the house immediately. You can vacate it along with other society members at the time of actual redevelopment. However, things could be complicated if the building is already pulled down. �If the building is already demolished, the old flat no longer exists and the new one is yet to be constructed, then the permission of both the society and developer are required. Though money has changed hands, the transaction is incomplete until the property has been reconstructed and registered in the new owner�s name. The agreement needs to mention this appropriately,� adds Mr Limaye

BIT OF PAPER WORK

The buyer should ask the developer for the approved drawings of the project, a copy of the intimation of disapproval (IOD) and a commencement certificate if the building is under construction. �Without these two documents, a buyer is better off without investing in these projects,� says Gulam Zia Gulam Zia, director, national advisory services at Knight Frank. In fact, the recent trend is that banks/housing finance companies (HFCs) pre-approve residential projects. In such cases home buyers can breathe easy as banks and housing finance companies have carried out the due diligence process by themselves,� he adds.

Bayer CropScience is close to selling it�s 108 acre land at Thane in Maharashtra, the land is valued at around Rs 1000 crores. Developers including Peninsula Land, Runwal, Wadhwa Group, Everest Developers, Sheth Developers, Hiranandani, Kanakia Constructions are said to be in the race. Sources familiar with the deal told ET Now.

Bayer Crop�s stock ended the day up 6.59% at Rs 1,121/share on the BSE on Thursday, Sept, 02.

Market sources say the bids could be aggressive going by the track record of the past few land transactions in and around Mumbai. Ambit Capital is running the bid process for Bayer Crop.

MUMBAI: Borosil Glass Works has sold 18 acre in Marol, Andheri, to Neepa Real Estate for Rs 830 crore, reflecting a rapid demand in recovery in Mumbai�s realty market.

The transaction is higher than two major deals in suburban Mumbai this year � Sheth Developers� acquisition of 14 acre from GTC in Vile Parle for Rs 591 crore and Wadhwa Group�s purchase of 18 acre in Ghatkopar for Rs 571 crore from Hindustan Composite. The deal translates into Rs 46 crore per acre, higher than the other two deals.

However, the transaction is way behind Lodha Developers� acquisition of land in the central Mumbai suburb of Wadala for Rs 4,050 crore, the biggest-ever land deal in the city.

�Its a win-win deal for both the buyer and the seller,� said Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj (JLLM). �Marol promises to be an ideal location for developing prime residential property.�

The Borosil stock rose 5% to close at Rs 779.95 on BSE, putting the company�s market capitalisation at Rs 309 crore. The deal consideration is nearly two-and-a-half times the market capitalisation of Borosil. Borosil Glass will utilise the fund to expand its operations and retire debt, said Chetas Desai, MD of Ambit Corporate Finance, advisor to Borosil on the deal. Borosil�s debt stands at around Rs 50 crore.

However, it is not clear how much of the sale proceeds will be used by Borosil to expand capacity. �The Borosil promoteRs are yet to finalise the details of the expansion plan,� Mr Desai said.

Borosil, a 48-year-old company, is engaged in the manufacturing of sheet glass, laboratory glassware and microwavable kitchenware. Its main manufacturing operations are now located in Bharuch in Gujarat.

�In the interest of generating maximum value for the shareholdeRs , we considered this as an opportune time to unlock value from the sale of the Mumbai real estate property,� PK Kheruka, vice-chairman and managing director of Borosil, said in a media statement.

�We will evaluate and deploy the sale proceeds after due consideration of strategic business opportunities in a manner that will result in maximisation of shareholder value.� The real estate market in Andheri (E) has experienced immense growth in the past few yeaRs , primarily driven by rise a in demand for commercial space and IT/ITeS and residential development, a Borosil statement said.

�The area continues to witness rapid expansion driven by infrastructure expansion � on-going development of the Mass Rapid Transit System, Sahar elevated road and the Jogeshwari-Vikhroli Link Road,� it added.

MUMBAI: Jet Airways is close to sell the right to develop its 2.5 acre plot in the Bandra Kurla Complex, to Godrej Properties for Rs 550 crore in a cash-cum-debt deal.

Godrej Properties is likely to pay Rs 200 crore in cash and to absorb Rs 350 crore of debt � the money Jet borrowed from HDFC Bank in 2006 to buy the land from an arm of Maharashtra government for Rs 400 crore � for obtaining the right to develop the land located in the BKC, which has emerged as an attractive alternative to expensive South Mumbai locations. The deal is likely to be signed in a fortnight, said a person close to the negotiations who did not wish to be named.

The deal has been structured so that both companies will share profits from the project. The exact ratio of the profit sharing is under negotiations, he added.

Adi Godrej, chairman, Godrej Properties, declined to comment on �speculation.� An email sent to Jet Airways went unanswered.

The land purchase agreement makes it mandatory for Jet to develop at least 60% of the total area of the plot for self-use for five years. Jet is likely to keep at least 25,000 sq ft area for its proposed headquarters. Jet�s share of profit will reduce if it wants to retain more.

Jet has been trying to monetise the land since it suffered losses in the year ended March 2009 but a legal tussle with Sahara Airlines prevented it from selling the land and forcing it to go for a joint development deal with Godrej, said another person in the know. The deal, if it goes through, will provide much-needed respite to the country�s largest airline which has done operationally well in the June quarter of the current fiscal but remains concerned about its liability of Rs 3,200 crore.

Jet had unsuccessful discussions with a consortium consisting of Morgan Stanely and Oberoi Constructions, and Bharti Enterprises. Jet incurred a net loss of Rs 961 crore in 2008-09 and Rs 420 crore in 2009-10. According to the permissible floor space index, or FSI, Jet can build a tower up to a height of 56 meter on the plot. However, Jet has applied to the government asking for additional FSI � the ratio of the total floor area of a building to the size of the land � after Wadhwa Properties got permission to construct an 80 meter-high tower in the same locality.

Godrej will pay Rs 500 crore if the government grants additional FSI, said the same person quoted above. Godrej can construct 1 million square feet of saleable area, even if the project does not get the additional FSI.

The property prices in BKC are pegged between Rs 30,000 � Rs 40,000 per sq ft. Godrej may earn Rs 1,500-1,800 crore from the project, said a real estate expert. It will take three to four years for development.