MUMBAI:

A 25-acre residential plot in Thane's Majiwade area is at the centre of a legal dispute between builder from Mumbai Wadhwa Group and owner of the land Ravechi Property Developers .

In 2010, the two signed an agreement to jointly develop part of the property . Wadhwa said it paid its partner Rs 36 .5 crore , but then , Ravechi failed to go ahead with the project . Last month , Wadhwa moved court , and on Friday , Ravechi told a division bench of the Bombay high court that it would not dispose of or alienate the property till the matter was resolved.

Atthecrux of thedispute is the objection raised by over 60 bungalow owners , who currently occupy the land .They protestedthatR avechi wanted to change the plan of the entire layout , which was earlier approved by theThane Municipal Corporation . They feared that their bungalows would be surrounded by towers .

"If the builder wants to change the plan , he must consult us first ," said one of the villa purchasers of Neelkanth Woods residential project , which issued a legal notice to Ravechi last November through advocate Vinod Sampat .

The notice said the developer , in collusion with some person , was approaching the municipal commissioner and the building proposals department of the Thane Municipal Corporation to make changes in the building plans . They added that any change of plan without their consent or written permission would be illegal . But Wadhwa , through its solicitor Parimal Shroff , said its agreement with Ravechi did not include the 14,264.49 sq m of floor space index (FSI ) already consumed in building 63 bungalows and villas . The joint venture would build multi-storied buildings on the remaining 42,282 sq-m land .

"It was agreed that the petitioners will pay Rs 50 crore to Ravechi , which will also be entitled to 12% of the net sale proceeds of the project , subject to an amount of Rs 245 crore for permitting the Limited Liability Partnership (LLP) Company to develop the said property ," said Wadhwa's petition .

Ravechi was to make the marketable title free from encumbrances andobtain title certificate stating that the land was free of encumbrances . "Prior to execution of the development agreement , Ravechi was to obtain a certificate from its architect , confirming the balance FSI of 69 ,040 sq m is available for development and TDRof 78,405sq m tobeloaded on the property ," said the petition . It added that Ravechi failed to comply with its obligation and Wadhwa had to move court . "In spite of the petitioners requiring Ravechi to cooperate in forming the LLP and execute the development agreement , they have failed and neglected to carry out their obligations ," it added .

Anshul Bhimjyani of Ravechi Developers told TOI that both disputes were "on the verge of settlement" . "There has been some miscommunication and we will resolve them ," he said .

MUMBAI:

Home sales in the city have dipped over the past year , with the residential marketshowing a negative growthof 9.1% from March 2011 till March 2012.

This was revealed in the latest survey of the Knight Frank Prime Global Cities Index , which compares the performance of prime sales markets in key global cities. Going by the survey , the value of prime properties in world's key cities fell by 0.4%in thefirst quarter of 2012. This represents the index's first quarterly fall since the depths of the global recession . Overall , the index rose by 1.4% in the past year ,till March 2012.

Explaining the reason behind the slide in residential building sales , Knight Frank said numerous repo-rate revisions by the Reserve Bank of India , which led to the upward revision of mortgage rates , inflationary pressures , affordability and high prices , coupled with regulatory pressures , impactedend-users .

"Some parameters like affordability can help improve sentiments with one more interest rate-cut . But low customer confidence , which is an important factor for sales to pick up , remains the primary concern . Buyers are worried about the uncertain economic scene . Earlier ,therewas a guaranteeof recovering EMIs with three salary raises . Now, bad salary hikes and uncertainty of even retaining a job have deflated customers' confidence and that has lowered the sales rate ," said Knight Frank national director (research )AnandN arayan.

Echoing him ,chairman and managing director of CBRE, South Asia Anshuman Magazine said while the realty market witnessed buoyancy in 2011, rising prices and prevailing economic conditions led to a drop in sales . "This caused a supply pile-up in thekey marketsof National Capital Region , Mumbai andB angalore andthatkeptthe capital values flat across various micro-markets in the three hubs. While the rate-cut by RBI has helped generate positive sentiments in the market , demands may be muted ," hesaid .

According to real estate services firm , CBRE, oversupply in Mumbai pertains largely to underconstruction flats launched in the past two years , mainly in Lower Parel , Mahalaxmi , Worli andNepean Sea Road . "Buyers arewaiting for a fall in rates and not closing any deal . The simple reason is that prices in the Indiabulls project in Lower Parel andKR aheja project in Mahalaxmi have risen by almost 40%," an official of CBREsaid .

Mumbai:

Residential property prices in Mumbai declined 9.1 percent last fiscal, recording the first price fall since the 2008 crisis, according to a survey by consultancy firm Knight Frank.

The survey, titled 'Knight Frank Prime Global Cities Index Q1 of 2012', said that property prices of global prime cities reported a 1.4 percent growth during the period, compared to April 2010-March 2011.

On year-on-year basis, the prices of properties in prime global cities in the first quarter of 2012 fell 0.4 percent.

"This represents the index's first quarterly fall since the depths of the global recession. Although a milestone, the index's negative quarterly growth is not surprising. Quarterly price growth has been below 2 percent since Q1 of 2010 and it averaged only 0.6 percent in 2011," Knight Frank Asia-Pacific research director Nicholas Holt said in the report.

Despite the overall index's sluggish performance, four markets -- Nairobi, Jakarta, Miami and London -- achieved double-digit growth during the period.

"Prices not only held up but actually increased slightly at the very top end of the Singapore market in Q1 of 2012. This was not only due to fairly resilient domestic demand, but also due to wealthy Chinese, Indonesian and Indian buyers." It seems unlikely that "we are on the cusp of a new deflationary cycle in luxury global house prices", he said.

"The safe-haven argument still resonates. Capital flight will continue to focus on cities with low political risk, transparent legal systems, good security and ideally those with a high networth individual-friendly tax regime," Holt added.

MUMBAI:

Despite the claims of the civic body on having transparency and parity in the new capital value-based property tax system, citizens seem unhappy at the development.

They feel that while a handful of new buildings that have come up after 2005 will benefit from the new system, several old structures will face a high rate of taxation.

According to BMC data, 27% or 3.87 lakh properties will benefit from tax reduction, whereas 19% or 2.75 lakh properties will face a higher rate of taxation, which will be up to two times the original amount paid. The maximum number of such structures are found in Andheri-Vile Parle west (50,000), Bandra-Khar-Santa Cruz west (34,000) and Esplanade-Fort-Colaba (11,000).

Anandini Thakoor, chairperson of the H-West Ward Welfare Association, said: "I understand that expenses have risen. But to shift the burden to citizens is not justified. Residents of some old buildings will have to face a 100% rise in tax. The tax slab should have been lower."

Many felt that the approval to collect rent in retrospect was unjust. AGNI coordinator Raj Kumar Sharma said: "The state had to amend the present law to make it possible. The revised property tax should be levied from the time the revision is approved by the corporation."

An official said there were legal provisions to charge people retrospectively. "From April 1, 2010, we had been sending people provisional or temporary bills. It was clearly mentioned in the bills that payment would have to be adjusted once the new system was approved. As it might be a steep amount for many, we are likely to extend the due date of payment of bills till March next year without any penalty," he said.

What New Property Tax Format Means For You

A Borivli resident will stand to gain more-in terms of percentage-than a person living in Cuffe Parade under the new capital value-based property tax system. While there will be a 54% reduction in property tax in the former, the latter will see a 37% decrease.

In Cuffe Parade, tax levied under the old ratable value system was Rs 17.54 per sq ft per month. Taking into account the Ready Reckoner (RR) rate, which is Rs 34,330 per sq ft, the new property tax has gone down to Rs 11.10 per sq ft. In Borivli, the rate has gone down from Rs 4.99 to Rs 2.28.

Meanwhile, civic officials said of the 700 RR pockets in the city, only 17 had properties with a capital value more than Rs 2.5 lakh, pushing their taxation higher than the rest of the city. However, compared to the old system, the taxes have come down. Nepean Sea Road is one such example. With an RR rate of about Rs 53,120 per sq ft, the new property tax is pegged at Rs 17.17 per sq ft per month, 41% less than the earlier Rs 29.11.

MUMBAI:

Bullish on improvement in the real estate sector in the next couple of months, Godrej Properties, the real estate arm of Godrej Group, plans to continue its focus on residential space, a top company official said.

"Though there is negative sentiment among buyers at present, the demand for houses will continue to grow, which is a huge opportunity for developers like us. We will continue to remain very much focused on the residential space," Godrej Properties (GPL) managing director and chief executive Pirojsha Godrej said.

Of the 10 deals that the company signed last fiscal, only one was in the commercial space, at Bandra Kurla Complex.

"Going forward, the entirety of our business will be focused on residential space," he said, adding, "It is not that we feel the commercial space will not do well, but given our current portfolio, we think we have a significant exposure to this segment."

"Financing for residential projects is much easier than commercial projects. In residential, construction can be financed by customer advances. That is the key for scaling growth."

GPL plans to launch 15 projects this fiscal, he said, adding that these will primarily be residential projects.

MUMBAI:

Mumbai's residential property market has shown a negative growth of -9.1% during the year ended March 2012, according to the latest Knight Frank Prime Global Cities Index that compares the performance of prime sales markets across key global cities.

Although the value of prime property in the world's key cities rose 1.4% in the year to March 2012, on quarterly basis it took a hit. In the quarter ended March, the index slipped 0.4%, registering its first quarterly drop since the depths of the global recession, said the report released on Monday.

"Affordability is relative. The real issue plaguing the market is lower customer confidence due to various factors like interest rates rise and regulatory issues," Anand Narayanan, national director (residency), Knight Frank India. "Although some of these have moved into neutral zone; interest rates have taken a directional 'U' turn, things would be upbeat once there's good news on income (salaries and bonuses) front."

Most of the prospective home buyers in Mumbai are on waiting for an anticipated price correction in the backdrop of oversupply scenario in some of the areas of the city and rising inventory level of nearly 120 million sq ft being under construction.

The report also showed that Nairobi (up 24%) was the strongest performer in the last 12 months, while prices in Dubai (up 4%) rose the most in the last 3 months.

MUMBAI:

When the RBI cut interest rates seven weeks ago, home buyers heaved a sigh of relief. Although several banks have now begun to offer 'discounts' to new customers, existing borrowers are still paying the old EMIs. Reason: some banks haven't changed their base rates, the benchmark for consumer loans. So is there a way out?

Yes. But the only hitch is that banks are unlikely to offer the reduced rate on a platter and expect you to tell them that your EMI is way too high. Sometimes even a mild threat of switching banks may work.

MUMBAI:

An additional 2.5 million sq ft of office space is expected in Bandra-Kurla Complex (BKC) this year, taking the total stock in the commercial business district (CBD) past the one million mark.

Despite this, the current vacancy level here stands at 16%, says a report prepared by Jones Lang LaSalle India (JLLI) accessed by TOI .

"Leasing and buying activity continued to accelerate during the last two quarters. The rent correction appears to be complete, with most existing buildings and new projects recording flat rates or slight increases over the previous quarter. The overall stability of the market is a sign that it has bottomed out," the report stated.

The additional 2.5 million sq ft is expected with the completion of buildings such as The Capital, FIFC and TCG Finance Centres. Over the last few years, BKC's 'G' Block has gained prominence as the key location within the unique micro-market.

BKC was created by MMRDA as an alternate CBD to Mumbai, with the purpose of halting the further growth of offices and commercial activities in south Mumbai. "Despite the economic uncertainty, which continues to haunt the BFSI sector in Europe and the United States, BKC's office market continues to grow.

Today, the indecision among tenants which defined 2010 and 2011 has eased. Over the last 24 months, the market needle has begun to point towards a landlord-favouring market," said Ramesh Nair, managing director (west) of JLLI.

"The change in sentiment has come earlier than was originally expected at the beginning of last year and can be attributed to the large deals by Citibank, Deutsche Bank and First Rand Bank and also the lack of new quality supply in the market in 2013 and 2014," he added.

Major institutions that have independent buildings in BKC include IDBI, SBI, SEBI, BOI, Dena Bank, SIDBI, PNB, ING, NSE, NABARD, ILFS, ICICI, UTI, Citibank, Canara Bank, Bank of Baroda and Oriental Bank of Commerce. Other prominent institutions include the American consulate, Dhirubhai Ambani International School and The American School of Bombay. Currently, BKC also has two luxury hotels-The Trident and Sofitel.

The JLLI report stated that with the diamond bourse (2 million sq ft) soon to be operational in 2 million sq ft of premises, the number of people coming to BKC would increase dramatically. "How the MMRDA will address the management of this sudden onslaught of traffic remains to be seen. Other areas of concerns include the continued lack of food and beverage outlets and sufficient public transportation. The Metro project announced in 2008 would be a game-changer, however, the project has been drastically delayed. The monorail, now scrapped, could have been a key infrastructure boost for BKC," the report added.

UPCOMING SUPPLY

Key projects in Bandra Kurla Complex over the next 2-4 years include:

The Jet Godrej office project

The Reliance headquarters-cum-convention centre

Wadhwa's C66

Kotak's headquarters

Enam's new building (to be completed in 2013.)

Luxury hotels such as The Bellagio and MGM Grand will also be completed over the next few years

Luxury mall by Maker Group

MUMBAI:

The Maharashtra Consumer Disputes Redressal Commission held a developer guilty of deficiency of service for failure to hand over possession of a residential tenement as per a 2004 agreement under Slum Rehabilitation Authority scheme.

The commission directed M/S Chaitanya Developers to give Raj Katkam the 225 sq-ft redeveloped premises at Dadar on obtaining eligibility certificate or alternatively, pay him the Rs 24.79 lakh, the current market value of the flat. This will attract 9% interest from May 2008, which amounts to Rs 9 lakh.

The commission directed the developer to pay Katkam Rs 50,000 compensation for inconvenience, mental torture and costs of the litigation. The developer will additionally give him monthly rent of Rs 7,000 till possession of the redeveloped premises is handed over or till the payment is made as per alternative relief granted.

"In the given circumstances and on perusal of the record and documents tendered by the complainant (Katkam), validly opponents (developers) have clearly rendered deficiency in service in not handing over the agreed accommodation in the redeveloped premises," the commission said.

Katkam said he was in possession of the premises since 1972 and had all the necessary documents to make him eligible under the SRA scheme. In March 2004, the builder executed an agreement to provide a residential accommodation of 225 sq ft carpet area. This accommodation would be provided by demolishing the existing structure of Katkam and other members of the society. Katkam said that he vacated his accommodation and moved into an alternate transit accommodation. Through another agreement the developer had agreed to pay a monthly rent Rs 7,000 rent for this transit premises.

Even as the rest of the tenants were eventually provided with the redeveloped property , the developer failed to provide one to Katkam stating that he did not have a slumdweller identity card. Aggrieved Katkam, filed the complaint in the commission on May 30, 2008.

The builder contested Katkam's claim and stated that the agreement executed was subject to certification by competent authority on his eligibility. The commission said Katkam's name was not included in the additional collector's report, which reflected serial numbers of those who were not eligible. "There is sufficient evidence on record to show that the complainant has all the necessary documents to decide his eligibility....So, we infer that the complainant meets all requirements of eligibility," the commission said.

NAVI MUMBAI:

The NCP-led Navi Mumbai Municipal Corporation (NMMC) is leaving no stone unturned to secure permission for extra floor space index (FSI) for dilapidated buildings. FSI defines the permissible built-up area on a plot.

According to sources, the civic body is likely to sanction a proposal for 2.5 FSI during a special general body meeting on Friday. Currently, FSI between 1 and 1.5 is available for redevelopment, however, there are few takers since builders feel it is "unviable". At a later stage, the municipal administration plans to invite suggestions and objections from the public. A final proposal will then be forwarded to the state government for its approval.

"If the plan for extra FSI is sanctioned, then it could pave the way for redevelopment of nearly 71 dilapidated buildings in Navi Mumbai," said mayor Sagar Naik. City engineer Mohan Dagaonkar will give a detailed presentation to corporators on Friday. However, civic activist Sandip Thakur claimed that the proposal was mooted by developers who wanted to regularize FSI violations in their ongoing projects.

MUMBAI:

Office market in the city witnessed subdued transaction activity in March even as rents and capital values remained stable during the month, said a report released by Jones Lang LaSalle on Tuesday.

Among the transactions were Pfizer which leased space at Jogeshwari in north Mumbai. Few buildings which became operational in March included Phoenix Market City at Kurla, I think Thane Phase 2 at Thane, Mindspace Building 5&6 at Airoli and Godrej IT Park Wing C at Vikhroli. The report said occupancy levels were good in Godrej IT Park Wing C and Mindspace.

On the residential front, projects launches remained stable in Thane, Navi Mumbai and extended suburbs of Mumbai. "Residential sales remained moderate in March. Capital values continued to show marginal upward trend across most sub markets (barring south Mumbai) despite nominal absorption rates,'' it said.

However, rents continued to increase as demand for rental housing remained high. ``The fact that potential buyers continued to defer their decision to buy drives growth of the rental market in Mumbai Metropolitan Region,'' said the report. Major launches in March were Omkar Wing A and B at Worli, Godrej Platinum Tower 2 at Vikhroli, Lodha Dawn at Ghodbunder Road, KUL Tulip at Ghatkopar.

In the retail segment, international retailers primarily in the luxury segment continued to expand their footprint in prime locations of the city.

Meanwhile, the Jones Lang LaSalle report said the value of investment grade real estate that is under construction in India is estimated to be about $180 billion as of fourth quarter of 2011. "This is an indication of the country's potential which investors will definitely not want to ignore,'' it said.

Mumbai:

Since the old system was based on the first-year rents, older buildings paid far lesser taxes than newer ones, until the property tax chart became lopsided. Older buildings, especially those in the island city, paid much lower taxes than many suburban constructions.

The civic standing committee on Thursday approved the new capital-value system, which bases taxes for all buildings (old and new) according to the Ready Reckoner rate. Bills will be issued retrospectively within the next three months. The civic body will return the excess money charged in provisional bills with 6.25% interest.

The watered-down taxation system for residential units will be based on a formula that takes into account 0.00348% of the Ready Reckoner rate and not the proposed 0.00412%, which had been struck down by the standing committee earlier this year.

The new rates will affect 6.62 lakh residential units of the 14 lakh in the city. Of the 6.6 lakh units, 3.87 lakh (or 27% of 14 lakh) will see reductions ranging from 30-40% and 50-60%. The reduced rates will especially benefit buildings that came up after 2005. Redeveloped buildings will be treated as new buildings.

Another 2.75 lakh units (19%) will see property rates rising up to 100%. Most are old houses that pay Rs 2,000 a year in tax; their rates will increase to Rs 4,000. The maximum number of such structures are found in the Andheri-Parle (West) area (50,000), the Bandra-Khar-Santa Cruz (West) area (34,000) and the Esplanade-Fort-Colaba area (11,000).

The remaining 7.4 lakh of the city's 14 lakh units are less than 500 sq ft (including in slums and chawls) and hence won't see any change in billing.

The buildings that will see lower increases or reductions are those that mushroomed after 1995, when the slum rehabilitation scheme was announced. Around 1998-99, buildings started mushrooming in Bandra, Khar, Santa Cruz, Andheri, Malad, Kandivli, Borivli and Dahisar. Around 2004, suburban Goregaon began getting new buildings.

In the island city, cessed buildings began to be redeveloped around 1998-99. Around 2004-05, mill areas in Dadar, Worli and Parel saw development. At the same time, Malabar Hill and Nepean Sea Road began getting new residential buildings.

The upside of the new system is that citizens can calculate their own taxes and pay them online. The civic body, which hopes for a better recovery, aims to increase revenue collection by Rs 356 crore. Currently, it collects Rs 2,800 crore from 55% of the properties. Officials are hopeful for an 85% recovery. (See box for payment formula.)

The suburbs will benefit more, said officials, due to the presence of more new buildings. However, the overall impact of the new system, said officials, will take some time to be ascertained. "As of today, we have just fixed the rate of property tax at 0.00348 % However, its area-wise impact across the suburbs will take time to be assessed. This, however, is a uniform rate that doesn't differentiate between the suburbs and city, and hence the difference in rates will reduce," said an official.

Additional municipal commissioner Rajiv Jalota said the new system would ensure transparency since citizens will compute their own taxes. "People will be able to verify and calculate the taxes based on their property. This should ensure better recovery," he said.

The BMC is deliberating a suggestion to not issue a penalty for delay in payment of taxes this year and is likely to extend the due date to March 2013.

MUMBAI:

Succumbing to pressure from citizens, the Brihan Mumbai Corporation (BMC) on Thursday tabled a watered-down property tax system before the standing committee, ensuring that taxes will be lower than those proposed earlier. Residents of pre-1996 buildings will see rates double, while those living in buildings built from 1996 to 2004 will see rates rise by 10 to 70%. Residents of newer buildings, those built after 2004, will see rates drop 30 to 60%.

The new tax system - which will be in effect from April 1, 2010, when the BMC started giving provisional bills - has been brought in to rationalize taxes.

Under the former, ratable value system, property tax was calculated according to the rent a unit commanded during the first year of its existence.

As rents increased over the years, older buildings paid far lesser taxes than newer ones, until the property tax chart became lopsided. Older buildings, especially those in the island city, paid much lower taxes than many suburban constructions.

The civic standing committee on Thursday approved the new capital-value system, which bases taxes for all buildings (old and new) according to the Ready Reckoner rate. Bills will be issued retrospectively within the next three months. The civic body will return the excess money charged in provisional bills with 6.25% interest.

The watered-down taxation system for residential units will be based on a formula that takes into account 0.00348% of the Ready Reckoner rate and not the proposed 0.00412%, which had been struck down by the standing committee earlier this year.

The new rates will affect 6.62 lakh residential units of the 14 lakh in the city. Of the 6.6 lakh units, 3.87 lakh (or 27% of 14 lakh) will see reductions ranging from 30-40% and 50-60%. The reduced rates will especially benefit buildings that came up after 2005. Redeveloped buildings will be treated as new buildings.

Another 2.75 lakh units (19%) will see property rates rising up to 100%. Most are old houses that pay Rs 2,000 a year in tax; their rates will increase to Rs 4,000. The maximum number of such structures are found in the Andheri-Parle (West) area (50,000), the Bandra-Khar-Santa Cruz (West) area (34,000) and the Esplanade-Fort-Colaba area (11,000).

The remaining 7.4 lakh of the city's 14 lakh units are less than 500 sq ft (including in slums and chawls) and hence won't see any change in billing.

The buildings that will see lower increases or reductions are those that mushroomed after 1995, when the slum rehabilitation scheme was announced. Around 1998-99, buildings started mushrooming in Bandra, Khar, Santa Cruz, Andheri, Malad, Kandivli, Borivli and Dahisar. Around 2004, suburban Goregaon began getting new buildings.

In the island city, cessed buildings began to be redeveloped around 1998-99. Around 2004-05, mill areas in Dadar, Worli and Parel saw development. At the same time, Malabar Hill and Nepean Sea Road began getting new residential buildings.

The upside of the new system is that citizens can calculate their own taxes and pay them online. The civic body, which hopes for a better recovery, aims to increase revenue collection by Rs 356 crore. Currently, it collects Rs 2,800 crore from 55% of the properties. Officials are hopeful for an 85% recovery. (See box for payment formula.)

The suburbs will benefit more, said officials, due to the presence of more new buildings. However, the overall impact of the new system, said officials, will take some time to be ascertained. "As of today, we have just fixed the rate of property tax at 0.00348 % However, its area-wise impact across the suburbs will take time to be assessed. This, however, is a uniform rate that doesn't differentiate between the suburbs and city, and hence the difference in rates will reduce," said an official.

Additional municipal commissioner Rajiv Jalota said the new system would ensure transparency since citizens will compute their own taxes. "People will be able to verify and calculate the taxes based on their property. This should ensure better recovery," he said.

The BMC is deliberating a suggestion to not issue a penalty for delay in payment of taxes this year and is likely to extend the due date to March 2013.

MUMBAI:

Chief minister Prithviraj Chavan has overturned another decision that was taken before he took over in the state. He has revoked the permission granted to a private developer for redevelopment of a 15-hectare land at Sion because it was "inconsistent" with state orders.

On November 4, 2009, the Slum Rehabilitation Authority (SRA) had issued a provisional letter of intent permitting Ackruti City to redevelop 15 hectares of land adjoining 26 hectares of slum land, for which the builder had already obtained the state government's permission for redevelopment under the contentious 3K clause of the Slum Act.

The SRA proposed special township status to the amended project involving 41 hectares of land under the integrated and holistic slum rehabilitation strategy incorporated in the state housing policy. This meant that special development control regulations and various incentives along the lines of the Dharavi model would have become applicable to the project. Also, the developer would have been able to tap additional land for its sale component following the new status.

In March 2011, Bharatiya Janata Party leader Kirit Somaiya objected to the permissions and largesse extended to the developer, bringing the controversy to the fore.

In a setback to the developer, Chavan on May 5 ruled the SRA's decision to incorporate additional land as inconsistent and not in keeping with the government order issued under 3K. Based on the chief minister's directives, the state housing department has directed the SRA to revoke the provisional letter of intent applicable for the 15-hectare portion. The SRA has been asked to submit an action taken report.

The move comes as another embarrassment for SRA chief executive officer S S Zende, who is already facing the heat over decisions taken by him in respect to two other 3K redevelopment proposals, which were recently scrapped by the government. Even in those cases, the housing department had found that the circulars issued by Zende were not consistent with related government orders.

While claiming that he was unaware of the development, Zende said that his department will abide by the government's directives.

NEW DELHI:

Realty firm Sobha Developers has set a target of Rs 2,000 crore in sales booking this fiscal, up 18 per cent from 2011-12.

The Bangalore-based company posted 50 per cent growth in the sales booking at Rs 1,701 crore in the 2011-12 fiscal as against Rs 1,133 crore in the previous fiscal.

For 2012-13, Sobha is targeting a new sales volume of 3.75 million square feet and sales value of Rs 2,000 crore, the company said in a statement.

"This year the growth momentum will continue. As we move forward, the sales we have achieved for the last financial year will reflect on our income statement in 2012-13," Sobha Developers Vice Chairman and Managing Director JC Sharma said.

"We have already witnessed a decline of interest rates in the first quarter, which is a positive sign. Although the headwinds remain, Sobha is confident of achieving new sales of 3.75 million square feet valuing at Rs 2,000 crore," he said.

Yesterday, Sobha reported 14 per cent rise in consolidated net profit at Rs 206 crore for 2011-12. The total income rose marginally to Rs 1,414 crore in FY'12 as against Rs 1,400 crore in the previous fiscal. The company has recommended a dividend of Rs 5 per share.

It had also announced the succession plan by elevating Ravi Menon as co-Chairman of the company. Ravi Menon (31), who is son of Sobha's founder Chairman P N C Menon, was earlier Vice-Chairman of the company.

Sobha has so far completed 79 real estate projects and 209 contractual projects covering about 51.80 million sq ft.

The company has 38 housing projects aggregating to 23.04 million square feet of developable area and 47 contractual projects aggregating to 10.05 million sq feet in various stages of construction.

Sobha has presence in 21 cities and 11 states.

MUMBAI:

Behind the glass facade of the swanky new office buildings in Mumbai's Lower Parel area , the light is fading. Many of these buildings, touted as the most coveted piece of real estate in the country's financial capital, remain nearly half empty despite being ready for almost a year now.

Office rentals have now fallen to almost one-third (down 36%) of what it was three years ago. What was available for Rs 275 per sq ft three years ago is now on offer for Rs 175 per sq ft. Yet, there are few takers and, despite plunging rentals, the area is still witnessing a building boom.

Huge office complexes tower over shanties, slums and cacophonic traffic. Dozens of small shops, which used to cater to mill workers a few decades ago, are still around, sitting cheek by jowl with gleaming showrooms selling high-end furniture. Cars, bikes honking furiously clog the narrow roads, while on weekends, luxury sedans queue up to enter one of the many shopping complexes that dot the area.

The entertainment industry is doing very well, the restaurants are full and bowling alleys and dance floors are packed. But, it is the office space developers who are feeling the pinch of the economic slowdown. In the past four years, Lower Parel alone has seen launch of nine major projects, with office space of nearly 8 million sq ft, more than the entire Nariman Point, long the hub of Indian businesses. The total office space in-place at Nariman Point is 6 million sq ft, which was absorbed and used over 40 years, and till 2005 that was enough to sustain the city's business.

Developers Offer Discounts

Now, the city has a total 85 million sq ft ready and under-construction office space. "Do we have tenants ready for this kind of supply in the shortterm ? The answer is 'no' ," says Aniruddh Wahal, director - transaction services at property consultancy firm DTZ. "Certainly , not at the speed witnessed during 2005-2008 , which set the expectation for this breakneck pace of development." Given the oversupply , developers have now lowered rentals while some are also looking at outright sales of buildings as against leasing them.

One such player is Alok Realtors, the real estate arm of Alok Industries. Alok had bought a commercial building from Peninsula Land four years ago and has been trying to sell it completely. Only around 30% of this 615,000-sq-ft ready building has been leased so far. The rest is vacant. "Developers stuck with inventory here are ready to offer big discounts to attract tenants and buyers. Some of them are even ready to negotiate the deal close their cost price," says Ashok Kumar , MD of international property consultancy firm Cresa Partners.

Lower Parel, of course, isn't an isolated case. Other places such as Nariman Point and Andheri are also hobbled by poor offtake , with rents falling by up to 30%. The only exception is Bandra-Kurla Complex (BKC), where rents have risen 40%, but experts say the peak may have been attained here. Key buildings that have major vacancy levels in Lower Parel are Peninsula Business Park A and B where 83% and 70% space is yet to be leased, respectively.

Marathon Futurex, of which so far only first phase is ready, also has nearly 92% vacancy, while One Indiabulls and Indiabulls Finance Centre have 15% and 30% vacancy, respectively , showed data from DTZ. Although Lower Parel's problem may be amplified by the sheer size of the oversupply, the scenario is not very different across Mumbai . According to property brokers , between 2003 and 2005, when foreign direct investment started flowing into the economy, the demand for office space grew manifold , driving developers to build more.

Availability ratio for commercial space was at a record high of 23% in the quarter ended March 31. During this quarter, Mumbai witnessed new supply of approximately 2.65 million sq ft, taking the overall office stock in the city to over 85 million sq ft. The result: Falling rental values, but relatively stable capital values. In the quarter ended March 2012, rental values for grade 'A' building in Nariman Point in South Mumbai, fell from Rs 425 per sq ft three years ago to Rs 325 per sq ft a month, off its peak of Rs 450 per sq ft in 2008.

However, capital values here are still at Rs 33,000 per sq ft, not very far from peak rate of Rs 35,000 per sq ft in 2008, says a report by DTZ. "Nariman Point has actually gone down significantly from its peak level as there is no deal taking place at all. It's a frozen market , but people are not writing it off as a ghost market yet due to its connectivity, social infrastructure and prime residences," Wahal says.

NEW DELHI:

Many high value bungalows in Delhi and Mumbai are under the government's scanner for evasion of stamp duty. These include bungalows in Lutyens' Delhi and other upmarket neighbourhoods in Delhi such as Golf Links and Shantiniketan, as well as sea-facing apartments in south Mumbai, which are bought by the rich and the famous.

In such transactions, buyers of these luxury homes - which include many leading businessmen - acquire shares of the seller's shell company, which owns the property, instead of transferring the property in their name by paying stamp duty, the usual practice followed for buying homes.

This way, while the seller evades paying capital gains tax, the buyer pays only 0.25% taxes on the share transfer instead of the 6-8% stamp (registration) duty. In big deals running up to 150-300 crores, the tax evasion could be as high as 15-30 crore.

Vijay Dev, principal secretary-revenue of Delhi, said the state government is setting up a financial services cell to monitor such transactions. "This cell will scrutinise all transactions involving financial instruments and matters pertaining to companies trading in properties and share market, with the aim to maximise revenue realisation... Transactions bordering on stamp duty evasion will also come under the purview of this new cell," he said.

Sources said that a recent deal, executed in a similar manner, came under flak from a Delhi court, and ever since, the state government has stepped up its vigil and has been monitoring big deals in the capital.

While at least half a dozen big bungalow deals happened last year in the Lutyens' Bungalow Zone and Golf Links areas, the registrar's office in Delhi, when contacted by ET, said they have no record of any property transaction in LBZ in the past two years.

This happened because the buyer did not need to register the property in his name; it continues to be registered in the name of the company he acquired.

A finance ministry official, who did not wish to be named, said such transactions would come under the anti-avoidance mechanism that the government is trying to bring through the introduction of General Anti-Avoidance Rule (GAAR). The implementation of GAAR has been postponed by a year, but once it is in place, such deals will be considered as tax evasion.

MUMBAI:

The State Consumer Disputes Redressal Commission recently ordered a builder to hand over a flat and pay compensation of Rs 60,000 to a buyer who paid 20% of the price in 2009 but never got possession.

Taking the builder, M/S A & A Shelters Pvt Ltd, to task for not appearing before it, the commission said it seemed that the developer did not care for the law of the land. It directed the builder to pay the buyer, Mangilal Parihar, Rs 50,000 as compensation towards mental agony and Rs 10,000 as costs.

In a complaint filed before the panel on August 8, 2011, Parihar said he booked a flat measuring 1,305 sq ft in the builder's project on Veera Desai Road, Andheri (W). It was a 3BHK flat on the ninth floor of the building, Azad Nagar Gem Cooperative Housing Society Ltd.

In September 2009, Parihar paid Rs 4 lakh of the total agreed amount of Rs 20 lakh and the balance was to be paid at the time of handing over the flat's possession in December 2010. The builder gave Parihar a receipt for the payment as well as an allotment letter with respect to the flat.

A sale agreement was executed between the builder and the buyer in October 2009 and the builder also collected Rs 2 lakh towards stamp duty and registration charges. Parihar alleged that despite repeated requests, the developer failed to register the agreement and did not hand over possession at the agreed time.

The builder also did not respond to the legal notice that Parihar issued in April 2011. Parihar then filed a complaint before the panel. While seeking possession of the flat, he prayed that the builder be restrained from creating third-party interest in the flat.

The commission then sent a notice to the builder. However, due to non-appearance by the latter, an order was passed in the builder's absence. The panel took into consideration key documents, including the allotment letter, agreement copy and receipt of payments made by Parihar.

Reprimanding the builder for not giving possession of the flat, the commission held the former guilty of deficiency in service and unfair trade practice. "The complainant has established and proved his case beyond doubt," the panel observed. The builder has to give possession of the Andheri

flat within two months of receiving the remaining amount of Rs 16 lakh.

DLF, India's top-listed realtor, is in talks with three Mumbai-based real estate companies -- Lodha Developers, Runwal Group and Sheth Creators, to sell a piece of land in central Mumbai, according to a report on Friday.

While DLF is seeking a valuation of 30 billion rupees ($571 million) for the 6.8 hectare property, the potential buyers are negotiating at between 20 billion and 22 billion rupees, the newspaper said, citing an unnamed person.

"Even as all the parties had talks with DLF, the developer is yet to make up its mind, as it is expecting higher valuations," it quoted the person as saying.

DLF bought the land for 7.02 billion rupees in 2005 from state-owned National Textile Corporation.

Abhisheck Lodha, managing director of Lodha Developers, said the company was not in talks with DLF while an executive at Runwal group also responded in the negative, the paper said.

DLF does not comment on market speculation, the company's spokesman told.

Mumbai:

As Maharashtra turned 52 Tuesday, the government said it would provide low-cost housing to mill workers and free houses to kin of mill workers who died during struggle for a state for Marathi-speaking people.

"The government has decided to provide 6,948 houses to mill workers at reduced and affordable rates, at Rs.7,50,000 in multi-storeyed buildings. The government will also give free houses to the survivors of the mill workers who lost their lives in the Samyukta Maharashtra Movement," Governor K. Sankaranarayanan said at a function held to mark the state's 52nd anniversary here.

He spoke about the government's initiatives and said the drought in the state was being tackled on war footing.

the governor said the state soon would have national investment and manufacturing zones, a youth and sports policy and a sports university.

He also spoke about the new Maharashtra Housing (Regulation & Development) Act, 2012.

Maharashtra's 52nd anniversary coincides with the birth centenary of the state's first chief minister Y.B. Chavan and the International Labour Day or May Day.

Chief Minister Prithviraj Chavan, Deputy Chief Minister Ajit Pawar and other ministers attended the function.

They also paid floral tributes at Hutatma Chowk, a martyrs' memorial in south Mumbai - a monument raised in memory of those people who died during the 1950s movement demanding that a state for Marathi-speaking people be carved out from the State of Bombay and incorporate all neighbouring Marathi-speaking regions.

NEW DELHI:

Nearly 5,00,000 houses are under construction in the national capital market (NCR), the largest residential market in the country, and half of them are slated to be ready for possession by next year, according to property consultant Knight Frank.

In its market overview, the consultant said that NCR did not witness a steep decline in launches last fiscal despite global economic slowdown and high mortgage rates in India.

"Nearly 86,000 residential units entered the market in FY 2012... Nearly 40 per cent of the units launched, fall in the Rs 25-50 lakh ticket size," Knight Frank said in a report.

Ghaziabad contributed to about 34 per cent of the number of project launched, followed by Gurgaon and Noida.

"Developers were able to gauge the pulse of the market and launched more affordable and mid segment projects than premium projects in FY 2012," it added.

Knight Frank research report found out that nearly 5,00,000 units were under various stages of construction in the NCR market as of March 2012.

"NCR is the largest residential market in the country by sheer volume of residential units launched. It currently has higher number of units compared to the other five metropolitan cities of Mumbai, Chennai, Bangalore, Kolkata and Hyderabad put together," the consultant said.

About 50 per cent of the upcoming supply in the NCR market is expected to be ready for possession by 2013, as a bulk of projects were launched towards the end of 2009 and early 2010.

Nearly 57 per cent of the upcoming supply falls in Noida and Greater Noida. Gurgaon constitutes nearly 19 per cent of the upcoming supply and about 94,000 units are slated to enter this market by 2015.

"The NCR being the largest residential market faces challenges at the unsold inventory levels. However the market has shown stability and there has been no drastic dip in the sales velocity in FY 2012.

"The vacancy levels have improved and stand at 36 per cent in Q4 2012 as compared to 40 per cent in Q2 FY 2012," the report said.

About 78 per cent of the unsold inventory is concentrated in Noida and Greater Noida, including Noida Extension that generated a controversy over land acquisition.

MUMBAI:

The Phoenix Mills Ltd has decided to raise up to Rs 1,000 crore through issue of equity shares or convertibles including a QIP or an overseas issue in one or more tranches, the company informed Bombay Stock Exchange.

The company is planning to utilize these funds for fast track completion of balance phases of ongoing projects, finance acquisition of new projects and augment working capital requirement. The amount raised can also be utilized for increasing funding requirements of investment in subsidiaries and consolidation of holdings in its project special purpose vehicles.

The Phoenix Mills will be raising the fund through issue of equity shares or convertible instrument to qualified institutional buyers in one or more tranches, the company said.

"This is just a routine enabling resolution and the company is not required to raise these funds immediately," said Shishir Shrivastava, managing director and CEO of The Phoenix Mills.

Phoenix Mills has also decided to increase the limit of foreign institutional investors' holding in the company up to the sectoral limit.

On Wednesday, the board of directors approved both the proposals, subject to authorization at extraordinary general meeting and receipt of relevant approvals.

On Thursday, shares of Phoenix Mills closed at Rs 215.05 on the BSE, nearly flat from Wednesday's close.

NEW DELHI:

In an order that puts thousands of property transactions in Delhi under a cloud, the revenue department has made all realty sales through transfer of general power of attorney null and void with retrospective effect from October last year.

The order, dated April 27, directs all 13 sub-registrar offices, DDA and NDMC to follow the Supreme Court's order last October that no sale deed will be registered if it is through a GPA transfer. This means transactions carried out since October on GPA transfers will have to be registered afresh with complete documents.

On average, around 20% of registries are done through GPA transfers, a common way of selling leasehold properties and those that don't have a clear title. In Delhi's northwest district, for instance, of 5,300 documents registered across three sub-registrar offices in March, 1,157 were GPA transfer registries. Bankers said the proportion of GPA transfers were even higher in sales involving bank loans.

Top revenue department officials steered clear of taking responsibility for the delay in implementing the Supreme Court order. They said that as this was a Supreme Court order, it should have been implemented at the sub-registrar offices since October. They admitted, however, that registrars have only stopped registering such sale deeds after the April 27 directive from the revenue secretary and divisional commissioner Vijay Dev.

Realty watchers said the order will reduce the number of saleable properties in the capital and lead to a hike in the value of properties on freehold land.