Builders upbeat about the RBI rate cut move

Serving as good news for Indian property buyers, the Reserve Bank of India (RBI) lowered its key policy rate for the first time in nine months. The RBI cut the policy repo rate by 25 basis points (bps) to 7.75 percent in order to help a slowing economy. India recorded its slowest annual growth rate in a decade.

Real estate developers believe that this move will help correct the imbalance laid by inflation across industries. This will also change home buyer sentiments and motivate them to make their home purchase now. A lot of industry experts shared their reactions to the repo rate cut with 99acres.com. Here’s a look:

Brijesh Bhanote, Director Sales & Marketing, The 3C Company

We welcome this move of central bank, as it will help sector to rope in more liquidity in times to come. This rate cut reflects government’s sustained efforts to correct the imbalance laid by inflation across industries. This move shall encourage banks to further reduce the base rate which will be beneficial for home loan buyers. We firmly believe this will instill more confidence in home buyers with less interest burden.

Anshuman Magazine, Chairman & MD, CBRE South Asia Pvt. Ltd 

This reduction in the CRR and Repo rate will bring in some liquidity into the banking sector. This is a positive move and hopefully will reduce interest rates marginally which will help the real estate industry. The industry expects more such steps to improve liquidity and reduce interest rates to increase investments.

Sanjeev Srivastva, Managing Director Assotech Ltd

The much awaited relief, although small in percentage, is going to decide the trend in the coming months. It is now fully acknowledged that interest rate is an important component in driving the economy. When Government is determined to take hard decision on reviving the economy, this is a great sentiment booster.

Gaurav Mittal, Managing Director, CHD Developers Ltd

We are happy that RBI has taken cognizance of the plight of the productive sector by lowering the CRR and repo rate, for the first time in nine months, by 25 bps. The move will help curb to some extent the negative sentiments in the economy in general and real estate sector in particular. The move which aims to drive growth is expected to infuse more liquidity in the system, a much needed relief for the real estate sector. The signal will serve as a boost for the sector with sentiments of buyers turning favorable. Banks may pass on the benefits to the consumers by easing off the lending rates. Home loans may get cheaper, facilitating the buying decision of the consumers.

Nikhil Jain, CEO, Ramprastha Group 

We appreciate the efforts put in by RBI by slashing the CRR. The move will stir more liquidity providing a slight breather for the real-estate sector which has started to stabilize from the toll of the inflation and hence provide a boost to the economy. This reduction should bring adequate availability of home loans in the market attracting attention of investors in this sector. Overall the industry expected RBI to reduce repo rate by at least 25 basis points considering lower inflation figures in last 3 months and GDP growth concerns.


Neeraj Gulati, Managing Director, Assotech Realty Pvt. Ltd

We highly appreciate this step undertaken by the apex bank. Not only will it bring forth liquidity in the market, but will also help in curbing the price escalation to a certain extent. This move will help in sustaining the economic growth and at the same time will offer relief to consumers.

Abhay Kumar, CMD, Griha Pravesh Buildteck Pvt Ltd

It is a good move for economy as a whole and real estate sector in particular as this will boost the growth which has, in recent past, seen a downward movement. A 25 bps cut in CRR and Repo Rate will boost the sentiments in the market as it will ease liquidity and lower the interest rate burden. Though RBI has acted much late in easing the grip from liquidity, it shall certainly push sentiments across manufacturing sector and real estate sector in particular which happens to be highly price sensitive. We expect an upward move in demand in coming days. Also, we hope RBI shall act in the same manner more frequently in future as well.

Dubai-like 'New Patna' planned in Bihar

Renowned architect Hafeez Contractor plans to develop a world city with eco-friendly buildings.

Hafeez Contractor, one of India’s best known architects, plans to develop a world city alongside the river Ganges here – on the lines of Dubai – that will boast of eco-friendly buildings and water sports facilities, officials here say.

“Contractor submitted his proposed plans to the state government during his visit here Tuesday,” an official said referring to the proposed New Patna World City.

Chief Minister Nitish Kumar is reportedly impressed by Contractor’s plans to develop a future city in Patna.

“After Contractor met him in this connection, Kumar has asked development commissioner A.K. Sinha and top officials of the urban development department to have a meeting with Contractor to discuss it,” officials said.

“All the high-rise buildings and apartments will be constructed on eco-friendly lines with water sports facilities on the river side,” the official said.

An official of the urban development department told IANS that Contractor’s plans are to develop a new city spread over an area of 1,700 acres. This would include residential, commercial and entertainment centres on 300 acres while 350 acres would be developed as green fields.

“He plans to develop a park on 600 acres on the lines of the New York park which is spread over 800 acres,” officials said.

Other facilities like seven-star hotels, malls and shopping centres, schools, hospitals, health clubs, meditation centres, art galleries, convention centres and sports centres would be created in the planned city.

Kumar Wednesday laid the foundation for Bihar’s first multi-storeyed industrial complex at the Fatuha industrial area near Patna. At a function on the occasion, he said Contractor had come up with a layout to develop land full of sand near the Ganges.

Contractor said Patna has the potential to become a city like Delhi or Dubai. “Patna has a lot of potential with regard to infrastructure development, especially with the positive leadership in the state,” he said.

Contractor is already working in Patna. Eary this year, the Bihar State Housing Board (BSHB) selected him for the re-development of the housing board’s flats here.

RESHAPING MALL CULTURE IN THE NCR

The recent approval of FDI in multi-brand retail has pushed developers and promoters to reshape mall culture in the Delhi NCR realty market. PUNITA writes

    With an estimated current urban population of over 27 million people (as per the Census 2011 provisional data) and based on an ideal mall space ratio of 1 .2 sq ft per capita, the Delhi NCR can currently absorb total mall space of 32.460 million sq ft in GLA (gross lettable area). 
    Another reason for the rising popularity of malls is that they have been designed as modernistic shopping complexes offering best-in-class retail-cum-entertainment avenues to suit diverse customer profiles. 
    A report estimates that the ideal per capita mall space in India's Top 20 urban centres is about 1.2 sq ft per person, but this can fluctuate from 1.0 sq ft and 1.5 sq ft in different micro markets based on the percapita income of that particular micro market. 
    The demand and supply scenario, both current as well as projected till 2014, for mall space in Delhi and the NCR areas like Gurgaon, Faridabad, Ghaziabad, Noida and Greater Noida, will see significant growth. 
    Average size of shopping malls in India has already begun to increase as developers focus on larger spaces. The success of a mall does depend on its size as superior-grade malls are nearly double the size of average-grade malls. 
    It is estimated that the average size of a superiorgrade mall is 4,00,000 sq ft. The larger malls allow for a complete tenant mix in various formats and categories, and can adopt modern mall management practices easily. With the introduction of FDI in multibrand retail, the average size of a mall is likely to increase as foreign retailers tend to occupy large space. As a result, the total mall supply and size are expected to increase over the medium to long term. 
Forthcoming malls 
    After the successful launch of Centrestage Mall, Wave Infratech is now coming up with one of the tallest commercial-cum-mall projects, Wave Vertica, in Sector 18 in Noida. Wave Vertica will have six screens and seating capacity for nearly 1,500 viewers. 
    DLF is going to open Mall of India near hotel Radisson in Sector 18, Noida , over a total built-up area of nearly 27,07,575 sq ft and a gross leasable area of 16,00,000 sq ft. To be operational by the middle of this year, Mall of India is considered as India's first mall to offer six floors of shopping and entertainment. This will be the first reality project of DLF in Noida. 
    Recreating the magic of the iconic Connaught Place of Delhi, Omaxe is developing Omaxe Connaught Place (OCP), one of the largest shopping-cum-entertainment malls in Greater Noida. This mall will feature ultramodern office space, a world-class shopping mall, a 5-screen multiplex, a 5-star hotel, food courts, family entertainment zones, etc, spread over 15 acres, with a total built-up area of around 1.9 million sq ft. 
    The large-scale expansion of population in Greater Noida is expected to boost commercial and retail space in the region. Thus, more than 200 brands have already signed up with OCP to open their stores there, including Wal-Mart's Easyday, which is opening its largest hyper markets in India. 
    Also, the forward-looking policies of the Greater Noida and Noida authorities have enabled the construction of largescale residential complexes in the region. Quality infrastructure and well-planned landscaped green environs at Greater Noida are a great attraction for homebuyers. These developments will provide a captive consumer base to the top brands coming up in malls like OCP, Great Adventure Mall, and Grand Venice. 
    AMR Infrastructures is coming up with Great Adventure Mall, which is also specially designed with fully furnished office space for corporate requirements. Great Adventure Mall is an ideal destination for those looking forward to a holistic work environment, the developer says. 
    Kapil Agarwal, the MD of AMR Infrastructures, says: "After completing the shoppingcum-office project, we have recently launched Apartment 55, a residential project in the sprawling mall, which offers 2- and 3BHK apartments. The project is situated in an excellent locality of Greater Noida." 
    Bhasin Group is developing a mall-cum-tourist destination project, Grand Venice, near Pari Chowk in Greater Noida. The forthcoming mall is a Venice-themed retail tourism destination and will offer a unique Venetian experience, the developer says. 
    Positioned as tourism centre with a grand retail podium targeting a host of national and international apparel brands, a hypermarket, departmental stores, a cineplex, entertainment zones, and unique Venetian experience with canals and gondola rides, Grand Venice will also have a 5-star hotel and office space as well. The mall is being developed as one of largest indoor amusement parks over 1,00,000 sq ft and hopes to target 20 million domestic and international footfalls annually. 
    S S Bhasin, the MD of Bhasin Group, says: "The Grand Venice is our first signature project based on the city of Venice. Designed to international specifications and conforming to futuristic designs and world-class features, the commercial tower of Grand Venice has been created to maximize the usage of space and energy through its innovative architectural design and sustainability options." 
    Red Solutions Pvt Ltd, a top retail entertainment player, in a joint venture with Celebration City Projects Pvt Ltd, is coming up with RED (Retail Entertainment Destination) in Ghaziabad. RED will have an ideal combination of entertainment, retail, and hospitality, and once complete, this could pretty well be the largest mall in Ghaziabad, the developers say. 
    The major attractions of RED are the indoor and outdoor entertainment facilities for all age groups: the mall will have Ghaziabad's largest 12-lane bowling alley, an indoor amusement park with 15 rides for children and iconic outdoor and indoor rides. 
    Rakesh Babbar, the MD of Red Solutions Pvt Ltd, says: "Red Solutions Pvt Ltd has been established with a vision to bring world-class shopping and entertainment experience for the entire family at an affordable price. RED is another benchmark in our 15-year journey of successfully establishing and running theme parks in north India. We are positive that we will have another successful innings with this new endeavour." 
    International Amusement Ltd has been allotted 42 acres in the heart of Gurgaon to set up a mixed-use entertainment centre, Appu Ghar. The much awaited Appu Ghar, which used to be one of the major tourist attractions of Pragati Maidan, is all set to be operational in Gurgaon this year. 
    The company is setting up the amusement park in two sectors in the city. While one park will come up in Sector 29, on 25 acres, another one will come up in Sector 52 on 17 acres. Appu Ghar will offer various entertainment and recreational options like an amusement park, a water park, retail outlets, and a sports club. Since it is a multi-location format, connectivity between the two locations will be provided in the form of shuttle bus services and a mono rail. 
    R a ke s h Babbar, the director of International Recreation Parks Private Limited, says: "In Appu Ghar in Delhi, there was no space for a mall, but this Appu Ghar in Gurgaon will have a large mall within the amusement park. This will make it complete in every sense." 
    TDI Mall on the main stretch of Kundli-Sonipat along NH-1 has an excellent locational advantage being in close proximity to premier residential colonies of Delhi. TDI mall is one of the longest and biggest malls on NH-1 and is strategically located, being only a short drive away from Rohini and Pitampura and next to KMP Expressway (currently under construction). 
QUICK 
BITES 
    THE DEMAND AND SUPPLY SCENARIO, BOTH CURRENT AS WELL AS PROJECTED TILL 2014, FOR MALL SPACE IN DELHI AND THE NCR AREAS LIKE GURGAON, FARIDABAD, GHAZIABAD, NOIDA AND GREATER NOIDA, WILL SEE SIGNIFICANT GROWTH 
    WITH THE INTRODUCTION OF FDI IN MULTI-BRAND RETAIL, THE AVERAGE SIZE OF A MALL IS LIKELY TO INCREASE AS FOREIGN RETAILERS TEND TO OCCUPY LARGE SPACE. AS A RESULT, THE TOTAL MALL SUPPLY AND SIZE ARE EXPECTED TO INCREASE OVER THE MEDIUM TO LONG TERM

REALTY DEVELOPMENT CHANGING SKYLINE OF GURGAON

The quality of real estate developers and the huge gap in demand and supply are crucial factors that are positively affecting the changing skyline of Gurgaon.

    The new developing sectors of Gurgaon are becoming hubs for real estate projects, as the growing demand for housing, improving connectivity like the forthcoming Gurgaon-Dwarka Expressway and KMP Expressway, and availability of land have all raised the potential of these locations. 
    Two factors that are positively affecting the changing skyline of Gurgaon are the quality of real estate developers and the huge gap in demand and supply. 
    With rising demand in housing, most of the realty development has shifted to newly developing sectors of Dwarka-Gurgaon Expressway, main Gurgaon-Sohna Road, and Golf Course Extension Road. According to a report of Knight Franks India, Gurgaon will see the delivery of around 29,900 residential units in these areas this year. 
    After the approval of the New Master Plan 2031, there is great scope for realty development along NH-8 and the newly developing sectors at Sohna. 
    Major developers like DLF, Unitech, Ansal API, Adani Realty, Tata Housing, Godrej Group, Raheja Developers, Emaar MGF, M3M, Satya Group, Ramprastha, BPTP, Assotech, Antriksh, Supertech, etc, have launched projects here in the recent past. 
Location and 
connectivity 
    In terms of location and connectivity, regions like Gurgaon-Dwarka Expressway, Gurgaon-Sohna Road, Golf Course Extension Road and NH-8 are ideal destinations for real estate development. 
    Gurgaon-Dwarka Expressway is an 18km stretch starting from Dwarka and connecting Palam Vihar and the forthcoming special economic zones in Gurgaon, and finally touching NH-8 near Kherki Dhaula. It will not only reduce the travel time between New Delhi and Gurgaon but after completion it will provide faster access to the airport also. 
    With the proximity to proposed diplomatic enclave and in the route of current Metro corridor, Dwarka Expressway will spur the development of the Gurgaon region in the long run. This area is a part of 'New Gurgaon', which is being developed with infrastructure of world-class standards. Extensive land area has been reserved for commercial development along the Dwarka Expressway. 
Gurgaon-Dwarka Expressway 
    The construction of Chintels India Ltd's Paradiso and Sobha Developers' International City in Sectors 106, 108 and 109, Assotech's Blithe in Sector 99, Godrej Group's Godrej Summit, CHD Developers' 106 Golf Avenue, Adani Group's Oyster Grande, ATS Triumph in Sector 104, BPTP's Amstoria Lutyens Park in Sector 102, Antriksh Group's Antriksh Zeal, Raheja Group's Raheja Atharva, Raheja Vedas, Raheja Vedanta in Sector 109, Paras Group's Paras Dew in Sector 106, Puri Construction's Diplomatic Green, Lumbini Terrace Homes of Brisk, Earth Infrastructures' Earth Copia and Earth Towne 2 in Sector 112, etc, have gained good appreciation. 
    With rise in demand, prices on Dwarka-Gurgaon Expressway have almost tripled, from Rs 2,250 per sq ft in 2009 to Rs 7,500 per sq ft today. 
    SARE Homes has recently launched The Grand in Sector 92. These 5-star lifestyle homes have been developed as part of the newest phase of its 65-acre integrated township SARE Crescent ParC. The Grand consists of 23 floors in the 3- and 4BHK format; the size of the units range between 1,853 sq ft and 2,280 sq ft, priced in the range of Rs 97 lakh to Rs 1.19 crore. 
    Vineet Relia, the CEO of SARE Homes, says: "The new project will have airconditioned apartments with sophisticated individual zone control (VRV). An exciting elevation design, a 5-star lobby with two 23-storey atriums and one of Gurgaon's finest clubs, make The Grand a truly stellar product." 
    David Walker, the executive director of SARE Homes, says: "At SARE, we are fully focussed on developing homes that offer our customers a distinctive lifestyle and make their dreams come into reality when they start living here. The homes are designed to match the lifestyle needs of modern homebuyers and provide them with the latest conveniences and amenities by which they can truly experience a luxurious style of living." 
    Assotech Ltd is constructing a group-housing project, Assotech Blith, at Sector 99 along the expressway. REALTY DEVELOPMENT CHANGING SKYLINE OF GURGAON 
    Sanjiv Srivastava, the MD of Assotech Ltd, says: "We have launched Assotech Blith in May and we will give possession by the end of 2015. Our sample flats are ready for potential buyers to inspect and the construction on the project site is in full swing." 
    Spread over 400 acres of self-owned land in Sectors 106, 108, 109, 114, and 115 of New Gurgaon and adjoining parts of Delhi, Chintels Group is going to launch Chintels Serenity, a set of residential towers including two iconic towers. 
    Prashant Solomon, the MD of Chintels India Limited, says: "With an extensive presence in the NCR, we have announced residential and commercial projects of around 15 million sq ft. We estimate an investment of nearly Rs 4,500 crore by 2023 in developing these projects. Escalating demand in residential and commercial sectors, especially in the areas of New Gurgaon comprising Sectors 106, 108, and 109 bordering Dwarka Phase II, proximity to Delhi and the IGI Airport are the key factors that will make these areas attractive real estate destinations in the NCR." 
    Emaar MGF Land Ltd (EMGF), a leading real estate and infrastructure developer, has announced the launch of Imperial Gardens, a fine conglomeration of luxury and fine living, in Sector 102, Gurgaon. The company plans to develop nine highrise towers comprising 580 units of 3BHK apartments, each 2,000 sq ft. The project offers 3BHK flats with family lounge and luxury specifications in a modern gated development over 12 acres along Gurgaon-Dwarka Expressway. 
    Ashish Jerath, the VP sales of Emaar MGF, says: "Luxury has always been our forte. Imperial Gardens is the next chapter in defining luxury in its finest details. We have strategically launched it along Gurgaon-Dwarka Expressway, as the area is designed to change the way Gurgaon currently looks." 
    Fast developing sectors like 37D and 92-95 along the Gurgaon-Dwarka Expressway have a number of quality projects lined up. Ramprastha Group, which has more than 600 acres of land bank here, is going to launch a new project, Primera, at Rs 6,500 per sq ft. 
    Nikhil Jain, the CEO of Ramprastha Group, says: "We have a number of projects like Edge Towers, Atrium, Rise, View along Gurgaon-Dwarka Expressway and the main Pataudi road. Our group has plans to deliver 
    nearly 5 lakh units in the next five-six years." 
    Satya Group has launched Hermitage, a residential group-housing project, on Dwarka Expressway in Sector 103. Hermitage, a 10 acre group-housing project, caters to the luxury segment with proximity and connectivity as its USPs. 
    Manish Agarwal, the MD of Satya Group, says: "Hermitage, with its vibrant features and close proximity to Dwarka Expressway, would be a boon for investors. The group is also planning to launch two more projects on Dwarka Expressway." 
Sohna Road 
    Looking at the prospects of the expanding size of Gurgaon's realty market, the Haryana government has notified the Sohna Master Plan, 2031. After approval of the new master plan, several residential, commercial, and industrial projects are expected to be launched here shortly. More than 20 new sectors have been notified in the new master plan. 
    According to the Sohna Master Plan 2031, 6,110 hectares would be developed with a residential density of 300 people per hectare. The development plan of Sohna has been prepared for a projected population of six lakh people. Over 28% of the area would be earmarked for residential development while 20% of the land has been allocated for industrial purposes. 
    After the approval of the new master plan, another realty player, Gold Souk, has chalked out a plan to invest Rs 1,000 crore in this region. The group is in talks to launch multiple residential projects in the NCR region, majorly focusing on Noida and Gurgaon. 
    Gurgaon-Sohna realty market will be an independent market not affected by price movements and absorption of projects located along Dwarka-Gurgaon Expressway or Golf Course Extension Road. 
    For example, the group-housing projects on Golf Course Extension Road are priced at over Rs 10,000- 12,500 per sq ft, but on Gurgaon-Sohna Road, the rates are still around Rs 4,500-6,500 per sq ft. Thus, the Sohna market will cater to the affordable segment. The townships with group-housing and plotted developments are likely to come up in the area in the price band of Rs 3,500-4,000 per sq ft. 
    Major developers like Raheja Developers, Gold Souk, IREO, Central Park, Tata Reality, Godrej, MVL, Universal, ILD, Avlon, Parsvnath, Paras, and Homestead are planning to launch projects in this area keeping the growth in 
    demand of residential and 
    commercial space in mind. QUICK BITES 
    MAJOR DEVELOPERS LIKE DLF, UNITECH, ANSAL API, ADANI REALTY, TATA HOUSING GODREJ GROUP RAHEJA DEVELOPERS, EMAAR MGF, M3M, SATYA GROUP, RAMPRASTHA, BPTP, ASSOTECH, ANTRIKSH, SUPERTECH, ETC, HAVE LAUNCHED PROJECTS HERE IN THE RECENT PAST

LUXURY HOMES NOW MORE EXPENSIVE

The Budget proposal to reduce the rate of abatement from 75% to 70% on homes and flats of 2,000 square feet and above or those costing Rs 1 crore and above, will make luxury homes even more expensive for buyers, says NEHA NAGPAL

Luxury housing will pinch even more now! 
    With the Budget announcement to reduce the rate of abatement from 75% to 70% on homes and flats of 2,000 square feet and above or those costing Rs 1 crore and above, luxury homes will become more expensive for buyers. 
    Experts say that the reduction will have an impact on service tax, which developers will pass on to the consumers. "Effectively, this translates into an increase in the service tax outflow, which means that luxury housing will now become even more expensive," says Anuj Puri, the chairman and country head of Jones Lang LaSalle India. 
    Boman R Irani, the CMD of Rustomjee Group, says, "This will lead to an increase in service tax outflow from 3.09% to 3.71% in the coming year, which will be passed on to the consumers." 
    As per the Jones Lang LaSalle report, there are 182 residential projects in the luxury segment, which have been launched in the top seven cities: the Delhi NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata. The total value of these luxury homes is estimated at $30 billion. 
    However, Om Chaudhry, the chairman & CEO of Astrum Homes and founder & CEO of FIRE Capital, says, "The government's proposal to set up an Urban Housing Fund with an allocation of Rs 2,000 crore will infuse liquidity for urban housing, thereby, boosting demand in urban cities." 
    Navin Raheja, the president of Naredco and CMD of Raheja Developers Limited, says, "With this, the infrastructure investment would boost the economy and tone down the acute housing shortage in the country." 
    Experts say that this announcement will not have much impact in Tier II and III cities, as there are not many projects falling under the specified category. Anuj Puri of JLL says: "The cities that will be most impacted are Delhi, Mumbai, Bangalore and Hyderabad. To a certain extent, Chennai and Pune will also be affected because they also offer a noticeable component of luxury housing that cost Rs 1 crore and above." 
    The impact will be seen more in Mumbai, as a majority of properties in the city, with a decent unit size, are priced over Rs 1 crore. 
    Having a common stand, the real estate industry says that there were no reforms in the Union Budget, which would make home buy a priority for everyone. The Budget gave very less impetus to 'homes for all', which is the need of the hour, most industry people reiterated. 
    Another announcement which would impact the real estate sector is the 1% tax deducted at source (TDS) on the transfer of immovable property with a market value of more than Rs 50 lakh. Apart from the increase in transaction cost, this will add to the paperwork for buyers.