Prime Property: The burst of tier-II, tier-III price bubble

Here is what we have on the show today:

1. The tier-II and tier-III price bubble burst a few years ago. We find out how these cities are performing in our Price-O-Meter.

2. Delays in debt reduction come back to worry the country’s largest developer DLF. CNBC-TV18 learns the closure of the USD 300 million sale of Aman Resorts has been delayed by five months.

3. We find out if Ireo’s apartments for a whopping Rs 12-30 crore in Gurgaon are worth your while.

4. We touch base with Piramal Group’s real estate private equity fund Indiareit.

Ireo has tied up with Grand Hyatt to sell luxury branded residences in Gurgaon. The project will come up on 29 acres and will also include a Grand Hyatt hotel. There will be a 265 luxury residences coming up in configurations of 4BHK, duplexes and penthouses.prime

The penthouses come with private pools. Apartment sizes vary from 4,600-10,000 sqft.

Ireo says the project will overlook a 50-acre golf park inspired by Hyde Park in London and may even include a driving range. Foster & Partners of London’s newest landmark, the Gherkin are the lead architects of the Ireo-Grand Hyatt Project.

Now let us talk about prices. Ireo tells Prime Property it has not finalised the pricing as yet. However, many high net worth individuals (HNI) we spoke with have got a pricing list from Ireo.

Read more / Watch video: Money Control

High-rises to turn over green leaf, get energy-efficient

High-rises in the Capital are all set to become greener. It may soon become mandatory for high-rises in Delhi to use ‘energy-efficient glass’ on their exterior that allow ample sunlight in but keep the heat out, cutting down on use of lights and air-conditioning.

The Delhi Urban Art Commission (DUAC) has sent this proposal, among others, to the Urban Development ministry for approval. “This is a part of the proposal on simplified building bylaws for Delhi,” said a senior official.

DUAC chairman Raj Rewal said the plan for any building will have to ensure use of energy-efficient glass, apart from other measures. DUAC had also recommended extra floor area ration for green buildings as an incentive.

The NCR is also going green. In fact, Gurgaon is way ahead of the Capital with 15 such buildings. Five of them have the highest ‘platinum’ certification of the US Green Building Council’s Leadership in Energy and Environ-mental Design (LEED).

Read more: Hindustan Times

Economy

Economic growth will elevate in current fiscal: Montek

Montek Singh Ahluwalia feels that the industrial growth is very low due to the problems in mining sector.

Even as he described the industrial growth figure for February as “very low”, Plan panel Deputy Chairman Montek Singh Ahluwalia took heart that it was not in the negative, and expressed confidence that India’s economic growth would be higher in the current fiscal.

“I think it (IIP growth in February) is consistent to what we have been saying that 2012-13 was not a good year and (the economic growth in) 2013-14 would be a lot better. I am glad that it (IIP) is not negative but it is very low,” Ahluwalia told reporters here.

According to official data released today, industrial growth has slipped to 0.6 per cent in February this year due to contraction in power generation and mining output and poor performance of manufacturing sector.

Factory output, as measured by the Index of Industrial Production (IIP), had grown by 4.3 per cent in February last year. IIP had growth at 2.4 per cent in January this year.

“Obviously the industrial growth is very low. It is due to mining sector. There are problems in mining sector which I hope will get sorted out”, Ahluwalia said.

The mining output in February this year too contracted by 8.1 per cent, compared to a growth in production by 2.3 per cent in the same month of 2012.

For the April-February period, the production in the sector showed a decline of 2.5 per cent, against contraction of 2.1 per cent in the year—ago period.

Read more: Business Line

Home Loans

A Matter of Convenience

Buying a home has become easy with innovative plans and schemes launched by developers. Most of them have tied up with banks to introduce subvention or no-EMI-till possession schemes to make property transactions customer-friendly. So, what is this subvention scheme? Who actually pays for the EMI? Who benefits more from the scheme – the developer, bank or buyer? Are there any hidden costs or conditions in such schemes that the buyer should be cautious about? Under the subvention scheme, if someone buys a property under construction, he or she does not have to pay any EMI for a defined period (typically 18 to 24 months) or until he/she takes the possession of the house. The developer takes the responsibility of paying the EMI on the loan taken by the buyer. Usually, private and nationalised banks tie-up with only ‘category-A’ developers to offer loans for such subvention schemes. It is also called as 80:20 scheme as the buyer has to pay the booking amount (20 percent) initially and give the remaining 80 percent during possession. The advantages for a developer is that he accesses funds at a much cheaper rate of interest than commercial loans.

Source: Hindustan Times (HT Estate, Page 4)

Commercial

Office demand stronger in Gurgaon and Delhi

Gurgaon, Delhi’s southern suburban commercial district, is rapidly overtaking both, Delhi and Noida, as an office property destination, as per the magicbricks.com listings data. Connaught Place (CP), Delhi’s Central Business District, is ranked 4th in the list of most expensive office locations in the world, according to latest report from Cushman and Wakefield. This clearly shows a robust demand. So, why has Connaught Place given way to Gurgaon? Manoj Goyal, director, Raheja Developers says, “Gurgaon is witnessing high demand from corporate houses. The connectivity boost because of the metro services and industrial development in areas such as Manesar, Dharuhera and Palwal, is pushing up demand in the office market.” This segment has shrugged-off the sluggishness of 2010 and 2011 and posted better demand in 2012. Santhosh Kumar, CEO – operations, Jones Lang LaSalle India tells us why. “Sector 62 suffered because of its distance from the CBD. Greater Noida was also unable to perform because of the existing supply of quality office space along the Noida Expressway, which is closer to the CBD than Greater Noida,” he points out.

Read more: The Times of India

Advisors send out contrasting signals on office realty trend

A leading international consultancy has created a stir in the real estate market as its optimistic report on the Indian office space is a contrast to at least three others. US-based CB Richard Ellis (CBRE) released a study yesterday showing office space take-up across key Indian cities had increased 37 per cent in the first quarter of calendar 2013, compared with the same period last year. Since just a day ago another American consultant, Cushman & Wakefield, had reported a 37 per cent drop in the office space absorption in 2013 Q1 against 2012 Q1, industry watchers sat up.

Is office realty showing signs of recovery after a year of gloom? Is the depression continuing? Or is it getting worse? Many industry experts ducked the question, while CBRE in a surprise move withdrew the report within hours of releasing it.

Even as CBRE is taking another look at the numbers, two other international advisors- Jones Lang Lasalle (JLL) and DTZ-hit the market with their findings in the office space today. While JLL researchers are of the view that the first quarter of 2013 will be quite like Q1 of 2012, DTZ is talking of around 20 per cent fall in absorption in office space comparing the first quarter of 2013 with 2012.

Read more: Business Standard

Infrastructure

Rs. 2,000-Crore Plan for Rebuilding Delhi Roads

In election year, the Congress-party ruled Delhi Government has announced a slew of measures to strengthen the Capital’s roads with close to Rs. 2,000 crore to be invested in rebuilding roads including those taken over from the municipal bodies.

In the first phase, 107 roads in West Delhi are being rebuilt at a cost of Rs. 565 crore, following which work has begun in 100 roads in East Delhi, said Delhi Public Works Department Minister Raj Kumar Chauhan.

Roadwork is also continuing in places such as Bawana, Narela and Najafgarh, he said, speaking at a function to inaugurate work on 15 roads in Mangolpuri on Thursday.

Mr. Chauhan also inspected the ongoing works in the constituency and said Rs. 40 crore has been invested in repair and construction of work which will be completed in two months.

Among the roads that are being revamped is Kala Mandir Road, Sanjay Gandhi Memorial Hospital Road, Police Station Road and so on.

The PWD Minister also said that repair works will extend to footpaths and maintenance of street lights.

Source:  The Hindu

New Flyover to Ease Gurgaon Traffic Okayed

Haryana Chief Minister Bhupinder Singh Hooda on Thursday approved the construction of a flyover at Maharana Pratap Chowk, also known as MDI Chowk, in Gurgaon. The flyover will ease traffic congestion on MG Road and adjoining Delhi- Gurgaon Expressway. An official spokesman said Haryana Public Works (building and roads) Department would undertake this project at an estimated cost of Rs 126.14 crore. The flyover will be constructed from Signature Tower on the Delhi- Gurgaon Expressway to Atul Kataria Chowk on Old Delhi- Gurgaon road. It is likely to start from MDI gate and land near Sector 17 gate.

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