Goregaon-Mulund Link Road plan first hurdle cleared

In the first step towards the construction of two underground tunnels beneath the Sanjay Gandhi National Park (SGNP) as part of the Goregaon-Mulund Link Road(GMLR) project, the Centre has issued terms of reference (TOR) for the proposed road. Here’s more…
WHAT IS TOR

Terms of reference can be understood as a project’s charter They comprise a statement of the background, objectives, and purpose of a programme, project, or proposal.

GMLR PROJECT

The expert appraisal committee (EAC) of the Union environment ministry (MoEF) issued TOR for GMLR a month after refusing to do so TOR will specify detailed studies necessary to justify the project This is the first step towards obtaining environmental clearance for the mega project from MoEF.

PROJECT SPECIFICS

Rs 2,000 crore | Project cost as estimated by BMC 5km | Length of each of two independent parallel tunnels under SGNP 3 lanes | Laning per tunnel.

ENTRY/EXIT

The western end of the tunnels will be near Film City, Goregaon. The eastern end will be near the Bhandup water treatment plant.

SAFETY FEATURES

The tunnels will have an integrated system for artificial ventilation, power supply, accident/incident detection and fire control (smoke detectors to automatically activate sprinklers).

Retail realty back on PE radar with investment over $724 million in the first nine months of 2017 This investment includes all types of investment such as platform and entity-level deals as also acquiring stakes in leading malls across cities.

MUMBAI: After a few years of reduced focus on retail real estate, private equity firms have set their eyes again on these assets in the backdrop of rising consumption levels and strategy to diversify their investment portfolios.

PE players have invested over $724 million in Indian retail realty in the first nine months of 2017 alone, against $846 million invested in two years between 2015 and 2016, showed data from JLL India. This includes all types of investment such as platform and entity-level deals as also acquiring stakes in leading malls across cities.

With an aim to create a portfolio of assets as the Indian market expands, some of the leading global private funds including Blackstone Group, Canada Pension Plan Investment Board (CPPIB ), APG Asset Management, Xander Group and GIC have started investing in retail sector — diversifying investment portfolios. And this trend is expected to strengthen further.

“Platform deals to form strategic retail partnerships are expected to see more traction in the coming quarters. In these deals, the track record of a developer and their operational processes is the key selection criteria of investors. The global investing partner brings expertise in managing international retail assets and thereby, international best practices. The local partner or the mall developer contributes in terms of local market understanding and leverages existing, strong on-ground teams,” said Ramesh Nair, head, JLL India.

Joint ventures and strategic investment platforms have also been in focus in the last 15 months. Canada Pension Plan Investment Board (CPPIB) and The Phoenix Mills joined hands for a strategic platform to develop greenfield and brownfield retail-led assets in India. Island Star Mall Developers, a Phoenix Mil ls subsidiary that owns Phoenix Market City Bangalore, will serve as the platform for this tie-up. “Urbanisation, young population and rising proportion of nuclear families will boost urban consumption. Over 70% of consumption growth in the next 15 years is expected from population aged 15-59 years, with increased per capita consumption.

Increasing disposable income levels and rising aspirations is leading to demand for affordable luxury as well as premium products and experiences,” said Shishir Shrivastava, joint MD, Phoenix Mills. Xander Group’s Virtuous Retail (VR) and APG Asset Management have also formed a joint venture Virtuous Retail South Asia (VRSA). The latter recently acquired North Country Mall in Mohali. With this acquisition, VRSA expanded its portfolio that now includes VR Bangalore, VR Surat, North Country Mall and an upcoming mall in Chennai.

“We are actively looking at acquisition proposals for expansion. We will commit capital from Virtuous Retail South Asia for opportunities with right price and location. Over the next 2-3 years, we are likely to pump in more capital and are open to leveraging as well,” Siddharth Yog, founder, Xander Group, told ET in a recent interaction recently. The most recent example is of Blackstone forming an India subsidiary, Nexus Malls, which includes a retail portfolio as well as stakes in successful malls like Seawoods Grand Central, Ahmedabad One, Mall of Amritsar, Elante Mall, Treasure Island Next, Treasure Island Indore and Westend.

According to Shrivastava, even from retailer perspective, both foreign and domestic retailers are looking to significantly expand their presence in the Indian market which is leading to demand for quality retail space outstripping the supply in the top 10-12 cities in India.

Source – Economic Times

500 FLAT BUYERS IN A LURCH: DIAMOND TRADER HELD OVER STALLED HIGH-RISES

Lukhi, 50, is one of the three partners at Kashimira Ceramic Products LLP, which had been promoting a high-rise project in Mira Road’s Kashmira locality. Tanvi Eminence, which promised 500 apartments, was started in 2010, but the construction stopped in 2013 because of a financial row between the partners.

There has been no progress since and the home buyers, who have paid 85 per cent of the property cost, fear they will lose all their money. Recently, they named Lukhi, diamond trader Dahyabhai Sutaria and advocate Vijaykumar Hegdes wife, Sangeeta, in a cheating complaint. It is one of the biggest such cases, Mirror had reported on October 6.

Senior inspector Venkat Andhale of Local Crime Branch, Thane (Rural), confirmed the first arrest in the probe. “We had specific information that Lukhi was going to fly to Belgium tomorrow (Tuesday). He has a house in Belgium. As there was an apprehension he may flee, we intercepted his car at BKC and placed him under arrest,” Andhale said. “He will be produced in a Thane court.”

Source – Mumbai Mirror

Could GST make your dream home a reality?

Potential home buyers could be in for a treat post the GST rollout. So, what does the one-tax regime bring with it?

 IT executive Ashwin Chandra has been toying with the idea of buying a new house in Mumbai. He had checked out several under-construction projects, and even spoke to the developers, but was not entirely convinced if it would be a good idea to dive in now. Buying a property of his own will be a dream-come-true for Ashwin. But he is worried about a few other things. For starters, now that the Goods and Services Tax (GST) has been rolled out, is it wise to invest in a property after July?

Ashwin’s dilemma is a reflection of what most homebuyers have been going through for some time. Demonetisation had set the property prices crashing. Now GST is touted as the biggest indirect tax reform in independent India. But nobody is certain whether this will be good for the real estate sector. Of course, more clarity will appear once the GST rollout is complete. There are certain indicators that foretell advantages for homebuyers. Yet, there are factors that can be worrisome. Let us see what the deciding factors could be.

What does anti-profiteering mean in relation to GST?

GST at 12%
GST on under construction and newly constructed properties that have not received the Certificate of Occupancy (OC) or completion certificate is 12%, which is much more than the 4.5% service tax that was previously applicable. An OC is a document that is issued after the completion of construction by a local government agency or planning authority and serves as proof of the building compliance and associated laws.

Does this mean it will contribute to higher property prices? The answer is not a definitive ‘No’. This is because GST will subsume six existing taxes, including the likes of raw material and excise, entry tax and Value Added Tax (VAT), which is often beyond 12%.  However, ready-to-move-in properties are not under the ambit of GST. This has fuelled the belief that homebuyers will prefer to buy new properties.

A homebuyer, at present, must pay almost 11% in indirect taxes. For instance, VAT on the construction materials ranges from 12 to 14%. This will now be replaced with GST of 12%. The cumulative tax burden is borne by the customer, who pays a higher price for property. However, under GST, the cascading effect of half a dozen taxes is likely to reduce, ultimately benefitting customers.

Related: With GST ready to roll out this July, what does it mean for you?

This benefit, however, may be offset with the hike in cement prices. Critical to any housing project, cement will fall under the 28% GST slab. This remains a big detriment for the housing sector, as it is likely to increase property prices. Moreover, material like ceramic tiles, paints, wall fittings etc. may become more expensive as they now carry a GST of 28%, as opposed to the previous tax rate of 20-25%.

ITC as incentive for under-construction projects
Homebuyers are also likely to benefit from the Input Tax Credit (ITC), another tax that the government has announced. Builder can claim a refund for excise duty and other central taxes paid on construction material. By government directive, they must pass on the benefits to consumers. For homebuyers, this means reduced prices of properties and instalments. Note that this benefit accrues only for under-construction properties, and developers feel that the benefits will be marginal for homebuyers.

What will not change?
Presently, homebuyers pay stamp duty to get their property registered. This is typically 6-8% of the price of the property, and varies from one state to another. This amount goes into the state government’s coffers. This probably explains why states shot down the proposal to replace stamp duty with GST. Post GST, there will be no change to this cost, and homebuyer will have to pay the stamp duty.

Other government measures
It remains to be seen if the rollout of GST will benefit homebuyers. The real estate industry has been going through a churn since demonetisation, which set realty prices crashing.

Soon after, the government introduced the Real Estate Regulatory (Regulation and Development) Act, which made it mandatory for builders to register with the regulator. Under RERA, builders must disclose the size of the apartment based on carpet area. For ongoing projects, yet to receive a completion certificate, the promoter needs a separate account. The builder must deposit 70% of the money collected from homebuyers in this account. This must be done within three months of application for registration. The government wants to prevent diversion of funds to other projects belonging to builders, thus ensuring timely delivery.

Meanwhile, the rollout of GST is expected to further streamline the realty sector. The aim is to discourage purchase from unregistered dealers. So, the government has imposed a reverse charge on the recipient. This adds to the compliance cost of the purchaser.

Related: Home buying mistakes to avoid [gifographic]

The bottom-line
It remains to be seen if the rollout of GST will actually benefit homebuyers. Given the massive scale, initial hiccups are likely to crop up in the first few months, at least. On the face of it, property prices in metro cities might shoot up. Remember, homebuyers could pay 17-18% in taxes (12% GST plus stamp duty), which is a significant increase from the present 11-18%. But builders could pass on the benefits of ITC to customers. Or, at least, the government directive requires them to do so. There is little doubt that GST will bring more accountability to the real estate sector, and will provide a traceable trail of money. Thus, homebuyers can hope that the government will make the property buying process much easier and hopefully, a little lighter on the wallet as well.

Source – Mumbai Mirror