Traditionally, most resident welfare associations have been dependent on options such as fixed deposits, which offer a fixed rate of return, to investment their fund base. The interest rates were good earlier and outflow in the form of expenses was manageable.

In the last few years, the money management for these associations has been challenging because of diverse trends in income and expenditure.

On the one hand, the interest rate offered on fixed deposits has been coming down in line with global trends. On the other, the expenditure required to maintain a property has been steadily going up. The situation has forced many to look at newer options and here is a helping hand for such associations.

Monthly income plans

As the name suggests, monthly income plans MIP offers monthly income. The product offered by mutual fund houses does not guarantee returns but one can expect the returns to be in the range of 10 per cent. The payout will be in the form of dividend and hence tax free in the hands of investors, though the mutual fund will be declaring dividends after paying the dividend distribution tax. Still, it offers a better tax advantage for the investors.

The MIP of mutual funds invests a small portion, ranging from 10-20 per cent, in equity and hence they have the ability to generate higher returns. For instance, during good stock market years, the returns from these MIP have been as high as 15-18 per cent, but during bad market years, they can turn negative. Hence, associations need to bear in mind the fact that they carry an element of risk. Then how does one use MIP to advantage?

The best option will be to opt for monthly or quarterly dividend payout option depending on fund needs. For instance, if an association has a fund base of Rs.25 lakh, it can opt for a fixed deposit for its monthly expenditure need and invest the surplus, which could be in the range of Rs.2-5 lakh, in MIP.

The advantage with such a strategy is that the corpus of Rs.2-5 lakh has the potential to grow even in terms of capital and this, in turn, can take care of long-term needs of the building. The association can also look at annual dividend option to take care of extraordinary expenses without dipping into capital.

Fixed maturity plans

As the name suggests, fixed maturity plans FMP come with a fixed tenure and are a good alternative for short and medium term needs. For instance, at present, FMP with a tenure of 100 days offer returns in the range of 6.5 per cent, whereas it is almost a percentage lower in the case of fixed deposits. Unlike MIP, fixed maturity plans do not have any exposure to stock market and hence do not carry any risk.

Corporate deposits

Besides banks, companies mobilise deposits from the public and the advantage is that they offer a higher interest rate than bank deposits. Companies with good credit rating, such as triple A, are as safe as bank deposits and they can be one of the options.

However, while choosing the product, the association should take into account its fund needs over a period of time and should also focus on the quality of the fund house. One can take professional help by taking the assistance of qualified financial planners for choice of scheme.

More importantly, as pointed out earlier, though MIP has the ability to generate higher returns, they carry an element of risk. But then returns can never be higher if risk is not taken.

Builders consider access most important when choosing a property for development. The value of the piece of land rides much on this factor.

The revised Kerala Municipal Building Rules, brought about by the Local Self-Government Department, as in earlier versions, hold that smaller roads can have only fewer people living on either side, though the restrictions have been relaxed to some extent.

The access width has been reduced on all categories and the space of the buildings, whether small, medium or industrial, will also be a determining factor.

The road width also determines the number of dwellings on a plot. A 5-metre-wide road now allows a built-up floor area of 4,000-8,000 square metres and 31 to 60 dwellings and a 3.6-metre-road, 1,000-4,000 sq.m with nine to 30 dwellings.

For 1,000-4,000-sq.m buildings with a 5-metre road, only three storeys will be allowed. To build four storeys, the road should be at least 6 metres wide and the built-up area 4,000-8,000 sq.m.Many in the construction sector does not view these rules as progressive.

The new set of changes in the Kerala Municipal Building Amendment Rules, 2010 is nothing but an agenda to retard development of the State in housing and construction, says Lalichan Zacharias, chairman, Kerala chapter, Indian Institute of Architects. The main issue regarding the changes brought about in 2009 had been with regard to the required road width for access to buildings, whether residential or commercial.

The latest amendments have done nothing much but contradict the earlier rules, Mr. Zacharias says. The required width of the access road for any high-rise building is said to be 7 metres if residential and 8 metres if commercial. And a high-rise building has been defined as one with more than four floors ground plus three.

In formulating this rule, the extent of land has been ignored, he says. Hence, on a plot of five-10 acres or 25 cents with an access road of 5 metres, the built-up area should be less than 8,000 sq.m. The aim of such a rule can be nothing but anti-development, he says. Road width along with plot size had been considered for fixing the Floor Area Ratio FAR earlier, while the new amendment does not consider FAR or plot size.

As much of the developable land is in suburban and rural areas, where it is difficult to come across a road with width over 5 metres, the government agenda on development is rather clear, he says. Only roads under the Public Works Department have a width of about 7 metres or above and these are very few. Only those who have acquired land on the sides of roads with widths above 7 metres will be able to build high rise buildings, he says. The size of the plot does not play a role. It is the built-up area that matters.

Hence, a private school that has an access road of 5 metres width cannot build any extra classroom or even toilets. However, government schools will be able to do so with special sanction, he says.

The government could always reduce FAR for a smaller plot, but now such considerations are overruled, says Mathen Chakola, member of the Confederation of Real Estate Developers of India.

Parking

The latest amendments have only brought clarity to the requirement of parking space and lifts in a building. Decentralisation of power has taken a hit as the Chief Town Planner office will become more involved in providing various sanctions, which can be done at the district level, Mr. Chakola says.

Have the much awaited glad tidings finally arrived for the real estate in the city and suburbs? The mid-2010 seems to be ushering in some reassuring signs for the construction industry with hopes getting rekindled on the fate of hordes of project that remained wedged in dilemma in the aftermath of loss of interest in property.

While enquiries for properties are said to have been much better since the beginning of the year when compared to the scenario that prevailed last year, the scene has been more heartening for couple of months, happens to be the feeling of the industry. “More enquiries have started to get converted into actual sales and this is a good sign for us,” points out a builder.

Topping the feeling has been the recent response to the Hyderabad Metropolitan Development Authority HMDA auctions which after a couple of years managed to strike a chord with prospective buyers.

Against an initial hope of being able to rise around Rs.40 crores, the Authority appears set to earn around Rs.67 crores by the time all the successful bidders made their payments.

Since auctions by bodies such as HMDA and Housing Board usually end up offering a perspective for prevailing mood and setting tone for the pricing, the recent auction is being seen as offering a positive outlook for matters of real estate.

The auction result is seen as successful by the industry which has pinned its hopes on fast revival of the sector from now on.

Price correction

The corrections in terms of pricing indeed seem to be falling in place when compared to the boom period. The plots which then were sold like hotcakes for even Rs.18,000 per sq.yards in some locations got buyers for a price tag of around Rs.10,000 and little more.

While those in the industry feel that the prices could take a small further dip and no more, the buyers who adopted a wait-and-watch approach all these days seems to be veering to the idea of these being realistic costs as of now.

The successful bid prices during auctions by government most of the times act as a baseline at a given location. “Though minor fluctuations could be there but most try to quote a price that is close to the auction prices,” informs a developer.

That being the scenario for open plots, the same is expected to move on to the unsold stocks of apartments that have got accumulated in last one year.

Have the much awaited glad tidings finally arrived for the real estate in the city and suburbs? The mid-2010 seems to be ushering in some reassuring signs for the construction industry with hopes getting rekindled on the fate of hordes of project that remained wedged in dilemma in the aftermath of loss of interest in property.

While enquiries for properties are said to have been much better since the beginning of the year when compared to the scenario that prevailed last year, the scene has been more heartening for couple of months, happens to be the feeling of the industry. “More enquiries have started to get converted into actual sales and this is a good sign for us,” points out a builder.

Topping the feeling has been the recent response to the Hyderabad Metropolitan Development Authority HMDA auctions which after a couple of years managed to strike a chord with prospective buyers.

Against an initial hope of being able to rise around Rs.40 crores, the Authority appears set to earn around Rs.67 crores by the time all the successful bidders made their payments.

Since auctions by bodies such as HMDA and Housing Board usually end up offering a perspective for prevailing mood and setting tone for the pricing, the recent auction is being seen as offering a positive outlook for matters of real estate.

The auction result is seen as successful by the industry which has pinned its hopes on fast revival of the sector from now on.

Price correction

The corrections in terms of pricing indeed seem to be falling in place when compared to the boom period. The plots which then were sold like hotcakes for even Rs.18,000 per sq.yards in some locations got buyers for a price tag of around Rs.10,000 and little more.

While those in the industry feel that the prices could take a small further dip and no more, the buyers who adopted a wait-and-watch approach all these days seems to be veering to the idea of these being realistic costs as of now.

The successful bid prices during auctions by government most of the times act as a baseline at a given location. “Though minor fluctuations could be there but most try to quote a price that is close to the auction prices,” informs a developer.

That being the scenario for open plots, the same is expected to move on to the unsold stocks of apartments that have got accumulated in last one year.

Puravankara Projects PPL, the BSE-listed real estate company, has launched a project named Purva Sky wood for luxury segment on Haralur Road in southeast Bangalore. The project is valued at about Rs 350 crore, including land cost.

The luxurious project, which will comprise 2, 3 and 4 bedroom apartments with size ranging between 1,263 sq ft and 2,340 sq ft, will be spread across an area of 12.75 acres.

With quick access to electronic city, outer ring road and Whitefield, this project will cater to the home needs of people who are working in these belts and also in areas like Koramangala and Bannerghatta road.

Jackbastian Nazareth, COO, Puravankara Projects, said, “Purva Sky wood is sure to impress discerning lifestyle lovers with an eye for elegance and open space. The apartments, the amenities, the facilities, all bear the stamp of Puravankara.

Purva Sky wood has luxury not only in terms of finish level as well as ambience, but also in its thematic concept. This project is conceptualized on a nature scape theme, giving ample natural surroundings to the end users.

Ashish Puravankara, director, Puravankara Projects, said, Before deciding upon apartments, buyers can take a look at some of the standard Puravankara features that are already considered luxury elsewhere; a range of features like green verges, lots of open space with designer landscaping, larger than standard windows, quality materials used for construction, rainwater harvesting and other such features that make the collective look translate into luxury.

The group began operations in Mumbai and has established a considerable presence in the real estate industry in the metropolitan cities of Bangalore, Kochi, Chennai, Coimbatore, Hyderabad and Mysore, and overseas in Dubai and Colombo.

According to the company, it has the distinction of being the first to obtain FDI in Indian real estate industry through its joint venture with the Singapore based Keppel Land, the property arm of the 54 per cent government-owned conglome rate, Keppel Corp oration.

The joint venture company, Keppel Puravankara Development Private, has ongoing housing projects in two cities in India. One is in Bangalore, Elita Promenade, and the other one is Elita Garden Vista in Kolkata.

Ritwik Mukherjee The word Viva means live long and the Sanskrit word Vara meaning a boon or fulfillment of a wish.

Vivara Residences of the Acron Group, a Goa-based chain of exclusive housing complex for the elderly population, promises to offer a perfect blend of the two live long with all wishes fulfilled.

John Britto, director Acron Group said, Vivara Residences will start its journey with its project for the senior citizens in north Goa and eventually spread its wings across all major cities in the country, mostly on the outskirts. Next in line will be Coorg, Kerala, Pondicherry, Shirdi, Rishikesh and Vrindavan.

The first set of Vivara homes will be launched in October. Unlike many retirement projects launched earlier, Vivara promises a world-class living experience, for which we have teamed up with international retirement associations. We will give the elderly people a house that offers top-notch facilities, an atmosphere of fun and revelry, Britto said.

He said that they had taken care to ensure people who come to live here can enjoy a carefree life. We ve gone a step further and incorporated this philosophy even into the buying process. Vivara operates on a leasehold model and not freehold, something that has always been a hurdle for senior citizens.

So you pay only a deposit and a lease you re comfortable with, we take care of the rest. It has therefore considerably reduced the stress of buying and selling property at this stage of one life, he said.

In most of the retirement home projects, houses are sold on an ownership basis and the developer is neither involved in day-to-day operations nor concerned with the future of the residents in the complex.

Another disadvantage in such freehold projects is that in subsequent, open market sales, the homes could be purchased by buyers who do not match the age and lifestyle profile of existing residents. Vivara tries to address these problem areas.

Amar, director of the Acron Group said, we are going to position them not as retirement homes but as unretirement homes. And unretirement is pure unadulterated pleasure that one can get in life, when you know that everything has been taken care of from security to maintenance to emergency healthcare. That the kind of life we re promising at Vivara Residences.

Besides, senior citizens will also be given the opportunity of choosing from a range of attractive pricing plans including some that allow one to earn profits on one lease deposit. The best part is that in all options, residents get their entire deposit back when they terminate their lease.

On offer at Vivara Residences will be fully furnished, ready to move in homes, in a lively resort setting and designed to high standards along with eco-friendly features, physical amenities and senior friendly services.

Vasathi Housing and Infrastructure is developing two residential properties in the city. The company commenced operations last year with the launch of these two gated community projects under the name, Vasathi Navya and Vasathi Anandi. The construction is slated to begin in August.

Vasathi Navya is a 200-apartment project spread over 3 acres. The ground plus five floors residential project is coming up near Chintal in Balanagar. Possession will be given in 18 to 30 months. The project will offer 2 BHK apartments of sizes between 900 and 1,100 sq ft. The starting price will be about Rs 18 lakh excluding stamp duty and registration. Vasathi Navya will have amenities such as power back up, supermarket, gymnasium, shuttle court, table tennis room, library and reading room besides offering space for a pharmacy.

Vasathi Housing has earmarked an investment of Rs 30 crore for the Navya project. This will be funded through internal accruals, debt and equity besides pre-sales proceeds. Similarly, Vasathi Anandi will see an investment of about Rs 75 crore.

The ground plus seven-floor project covering 5 acres will have 450 apartments. Vasathi Anandi is coming up in Bandlaguda. The project comprises 1-2-3 BHK apartments ranging from 800 to 1,350 sq ft priced upwards of Rs 21 lakh.

Vasathi Anandi will house a school, a restaurant, supermarket, club house with gymnasium, table tennis room, jogging track and swimming pool besides a shuttle court.

P V Ravindra Kumar, chief executive officer of Vasathi Housing and Infrastructure said, With aim of becoming a pan-India affordable housing player, we intend to deliver 15,000 housing units in select major urban cities by 2014.

Vasathi plans to launch its third project in Visakhapatnam by yearend, and thereafter expand into select markets in the neighboring states.

A dharna by employees of the Kerala State Housing Board belonging to unions affiliated to various political parties early this week in the State capital once again highlights the problems in an institution established to provide a direction to, and coordinate, housing schemes in the State.

The employees have been demanding immediate government intervention to revive the board. They have been calling for a quick and lasting solution to the problems into which the board has stumbled over the years, which they say is largely because of its inability to raise working capital and thereby launch new projects.

A spokesman of one of the employees unions told The Hindu that the current travails of the board could be traced quickly to the refusal of the State government to stand guarantee for it to raise loans for new projects.

He said the board had been unable to raise money through loans since 2001. The government’s inability to act decisively and the neglect of the board in successive State budgets had played big roles in the sending the board to such a state.

The union leader recalled that the most glaring example of government neglect was the failure to act on the Composite Action Programme, submitted in 2006, for the revival of the board. The plan was submitted by an action council of employees unions, envisaging the building of a new future for the board based on its expertise and its assets.

Though some hopes were raised in the State Budget for 2008-09 which provided a Rs.255-crore loan and proposed a comprehensive revival plan of Rs.2,060 crore, nothing much has come of the promise.

The employees unions have, in the meanwhile, have rejected the recommendations of the Working Group on Restructuring of the Board. The working group suggested, among several things, that the board concentrate on consultancy, contract and deposit works. The report has created a sense of anxiety among the employees, said a spokesman of the Kerala State Housing Board Employees Association.

The employees have demanded now that besides standing guarantee for loans, the government should pay what is due to the board under various heads. These payments include Rs.136 crore under the Maithri housing scheme subsidy; Rs. 14 crore in rent arrears; and Rs.14 crore owed by the Department of Welfare of Scheduled and Backward Communities.

Another demand raised by the employees is that the board liability with the Housing and Urban Development Corporation be met through a one-time settlement.

Mumbai

Struggling to extend its services to every corner of the city, Mumbai Fire Brigade has demanded that the Brihanmumbai Municipal Corporation (BMC) reserve at least 92 plots in the revised development plan (DP) for construction new fire stations.

The civic body, having taken note of the fire brigade’s requirement, is set to propose that developers give priority to construction of fire stations while handing over built-up amenity and accommodation reservation plots.

“If not, we will ask them to hand over only vacant plots as our share,” an official of the DP department said. The existing development plan of the city expires in 2013 and the BMC has begun work on a new plan. According to fire officials, Mumbai needs at least 125 fire stations—each with a minimum area of 2,500 sq m—in order to keep pace with city’s vertical growth, building collapses, fire accidents and other calamities.

Currently, there are only 33 fire stations. The BMC has, over the years, acquired possession of 37 plots. Fourteen of the existing stations have come up on these 37 plots. “Few of the 33 stations are also covering parts of island city and central suburbs, where maximum number of high-rises are coming up. The BMC must also be prompt in taking over amenity and accommodation plots from builders,” chairman of improvements committee, which controls most of Mumbai’s land, Manoj Kotak, said.

Under the development control regulations, owners of defunct industrial and mill land must surrender between 5% to 25% of the property for public amenities and utilities before constructing residential or commercial structures on the plots.

Kolkata

If poor infrastructure and lack of development held back real estate prices on the western front of the Hooghly for the last couple of years, the upcoming real estate projects are changing the industrial landscape in the Howrah-Hooghly belt, pushing up property prices.

Less commuting time, excellent connectivity and real estate ventures by large branded players like the Unitech, Universal Success, Forum Projects, Peerless, Merlin Group, Keventer Projects and the Salim-Ciputra group indicate that the area seems to be tantalisingly poised on the threshold of the next wave of realty action.

It may be mentioned that land prices had skyrocketed on Kona Expressway and stretches of National Highway-2 and National Highway-6 with projects like the DLF township in Dankuni, Kolkata West International City and the logistic hub on Kona Expressway coming up. Several brokers purchased land in the area hoping for the price to shoot up further.

“Though there has been an impact on the price of land in that belt after the Tatas decided to leave Singur, real estate prices do not change overnight. Had the Tatas decided to build their plant in Singur itself, land prices would have shot up. After they left, real estate prices still moved northwards but the pace was slow. It is only recently that the real estate price picked up momentum,” says a senior real estate consultant on conditions of anonymity.

What should, however, be kept in mind is that the real estate market in this part of the city has not developed as fast as it has in Kolkata. Most of the developments, which have come up in and around this area and offer some 10-200 flats per project, have been done by small and mid sized local players.

Lemongrass Advisors joint managing director Abhijit Das said, “Howrah is densely populated — more in terms of numbers — than the Kolkata Municipal Corporation areas of Kolkata. It is inhabited primarily by low and middle income Bengali and non-Bengali business families barring some clusters within the area which are occupied by high income business families. Since the inhabitants are into unorganised and semi organised businesses, the buying power of the catchment area is weak compared to that of proper Kolkata. Skilled professionals from these areas usually travel to Kolkata for their jobs.”

Some of the city’s leading realtors second this emotion. “People staying in the suburbs of Kolkata do not relocate to Howrah, till such time they are offered something different or unique than what Kolkata has on offer and that too, at an attractive price. Besides, it is easy to woo Howrah consumers to projects being developed in proper Kolkata but not so easy vice versa,” they say.

Among the various projects, Kolkata West International City is probably one of the first large scale organised developments in the Howrah district and Merlin Uttara at Konnagar, one of the first organised branded realty projects in Uttarpara. Developed by Merlin Group, Merlin Uttara was conceptualised to meet the growing demand for urban living standards in Kolkata’s fringes, especially on the other side of the Ganges.

Hyderabad

Recession and separate Telangana issue continue to haunt auctions of Hyderabad Metropolitan Development Authority (HMDA). Though the urban development authority has put up 229 plots for auction, so far only 85 bidders have come forward to participate in the bidding process. The e-tendering closes on July 9, while the bids will be opened on July 12.

HMDA has invited bids for 229 leftover plots in Asifnagar (one plot), Miyapur (102 plots), Mushk Mahal Residential complex (5 plots), Nallgandla complex (98 plots), Nandagiri Hills (one plot), Ramchandrapuram (Chandanagar) (20 plots) and Tellapur (2 plots) on June 21.

Though the HMDA had reduced upset price for plots to Rs 10,000 per square yard from the earlier price of Rs 18,000 per sq yard, there are no takers for the plots. This time ICICI and Hudco have agreed to provide loans to bidders at eight per cent interest. The earnest money deposit (EMD) to participate in the bidding is between Rs two lakh and Rs five lakh based on the plot size and area.

Sources said in earlier auctions, especially during the real estate boom time, many non-resident Indians (NRIs) evinced interest and participated in bidding of plots as the HMDA-owned plots had clear titles and were disputefree. However, in the latest bidding, NRIs seem to have distanced themselves from the bidding process.

Of the bidders who came forward to participate in the auction, many of them have opted for plots in Miyapur and Nallagandla areas where 102 plots and 98 plots have been put for sale respectively. There are no takers for plots in areas like Asifngar and Nandagiri Hills. “Everyday, 20 to 30 prospective buyers are visiting sites like Miyapur, Nallagandla and Ramachandrapuram, but when it comes to e-bidding, the response is not encouraging,” a site incharge said.

Officials attribute the poor response to the ongoing byelections for 12 assembly seats in Telangana region in particular and separate Telangana issue in general. “The situation will be like this till December, 2010, the deadline for the Srikrishna Committee,” the officer added. HMDA officials also agree that the Kokapet land auction getting into legal wrangles had its impact on the image of the authority.