Real Estate Hyderabad

Genuine or just an eyewash?

noreply@blogger.com (harsha) — Thu, 08 Jan 2009 13:57:00 +0000

A major casualty of the current global meltdown has been the real estate sector. With uncertain job scenarios and companies cutting costs across the board to tide over recessionary trends, buying a property is lowest on the priority list. Making do with what you have is the new mantra with focus narrowed down to keeping the job in hand where spending is tightly reined in.

Luring such an unwilling customer requires more than perfunctory corrections in pricing and developers are undoubtedly aware of this. The last few months have seen a range of freebies and incentives offered to tempt the buyer.

Thus, offers like “buy a flat and get a kilogram of gold free” or “opt for a free site,” “buy a farm land and get a farmhouse free” are no more a product of imagination. Of course, offers such as these raise doubts about units actually getting constructed and delivered on time, questioning the prudence of investing in such ventures.
Sustainability

Some offers do appear genuine, the cost built into the unit offered for sale, yet others fail to have economics and sustainability in place. The question arises, is the customer being sensible to fall for such offers. Is the price quoted genuinely marked below market rates?

Says Girish Puravankara, Managing Director, LGCL, “Our offer of 30 per cent below the prevailing market rate for our villas was possible through smaller profit margins, good planning, low overheads and an efficient team.” According to him, there is no case of falsely luring customers as they are well aware of existing prices and quality expected.

“This is especially the case in a recessionary market as compared to a boom period when not many checks are done before purchase.” The villas are to be built with 98 per cent efficiency in the usable area with no compromise on quality to accommodate the lower price, he adds.

Concurs Parag Sen, V-P, Sales and Marketing, Golden Gate Properties, “Typically our margins are less and we reduce cost through innovation and low wastage. Besides, our volumes make our pricing competitive.”
Goodwill money?

Construction cost remains the same throughout the country for a given level of quality, he says. The high price differential is attributable partially to goodwill money charged by established developers and the unwillingness to pass on to the customer any reductions in cost. Incidentally, the developer offers value-added promotions such as furnishings for the finished apartment at a marked down price of 30-35 per cent.

“The discount is offered by the brand that sells the furniture. We work out a deal with them on a no profit-no loss basis,” he adds.

With the bleak market scenario deterring even customers who want to graduate from an apartment to a villa from doing so, the Alliance Group recently came up with an innovative option of exchanging an old apartment for a villa in one of their upcoming projects.

“We believe in innovation in product and sales and this exchange was a result of that in tune with today’s market conditions,” says Manoj Namburu, Chairman and MD, Alliance Group.

As for piling up of stocks in the form of unsold apartments impacting liquidity of his venture, he is quick to add the exchange offer is open only for the first 50 units. “We ensure sustainability of our projects by not only making prices realistic but progressive where the first set of units is sold at cost price and the rest at a higher rate in relation to their level of completion.”

Referring to the severe liquidity crisis in the residential market, Anurag Mathur, Managing Director, India, Cushman Wakefield, says, “Developers are facing severe resource crunch with sales at an all-time low. Some of the freebies offered to push sales are genuine while others a mere eyewash. The discounts are significant in fresh projects.”

He points out that these discounts and freebies are more to do with lesser-known projects though the future may see this extended to reputable ones. As for determining the realistic price of a unit, he uses late 2005 or early 2006 prices as the benchmark for getting good value on a purchase.

Indicating correction of prices started in early February, Amit Bagaria, Chairman and CEO, Asipac, says, “The bottom of price correction is bound to be hit in the next 5-6 months.”

According to him, while price correction would not exceed 30-40 per cent, those yet to correct their prices will do so in the coming months while those who have will be unable to reduce it further, given cost considerations.
Volume sale

“Increase in margins by top builders to 50-60 per cent has prompted buyers to shift to lesser known developers who have realistic margins. The present crisis is not merely of low demand that has dipped by 20 per cent but of huge increase in volume on the supply side.”

As for sustainability and genuineness of the freebies and discounts offered, he feels the best deal would be in terms of payment while liquidity factor is solely dependent on individual builders.

Adds Koshy Varghese, MD, Value Design Built,

“Any price correction should be realistic, based on cost considerations. Any discount or offer should be sustainable to prevent the project from running into problems.” Sums up Guru Prasad, Joint MD, Chaithanya Projects,

“To develop a sustainable model, the incentive should be a price cut that affects EMI positively. Innovative schemes can lead to trouble, more so where projects are large and risks equally so.”

A garden with a pond is complete

noreply@blogger.com (harsha) — Thu, 08 Jan 2009 13:57:00 +0000

Water is the elixir of life for all the living beings. Apart from being the basic sustenance factor for greenery, water can also shelter various kinds of beautiful plant-life. Those who have seen and experienced the splendour of the aquatic greenery will vouch for the same. Apart from nurturing plants, water bodies complementing the home garden will offer a diversified landscape and relief to the eye.

Water bodies in the garden may include fountains, artificial waterfalls, or small ponds, all rendered more elegant if decorated with pebbles, rocks, and lighting. Apart from plants, they can also have fish, snails and other small creatures, sharing a symbiotic relationship with plants.

Choosing the appropriate spot could be the trickiest job while venturing to have an aquatic garden. Almost all the water plants need good amount of sunlight to live and hence, the spot should be exposed to sun at least for five to seven hours in a day. And also, care should be taken to see that the pond does not fall into the shade of any tree or undergrowth.

“The pond could be natural, dug up in the ground and equipped with perennial source of water. In such case, there will not be a need for pots. In case there is no such naturally viable spot, one can build a concrete one or use a plastic tub. One can even dig up sufficiently and cover the area with thick plastic sheets to hold water. In any case, one should use only fresh water and not saline water,” informs an official from Buddha Purnima Project Authority.
Variety of plants

The number of aquatic plants one can display obviously depends on the space available. However, one should be cautious to fill only 50 to 60 per cent of the surface with plants, so as to avoid cluttering.

Aquatic plants can be of many types depending on their growth specifications. Prominent among them are floating, partly emerging, marginal, and submerged.

Floating plants, as their name suggests, float about in water and do not require root penetration for survival. Most of them have weed-like growth and hence, need to be restricted manually. Water hyacinth and Pistea are the best example of the floating plants. Partly emerging plants are the ones that have their roots entrenched in soil, while the leaves and inflorescence are above water. They offer a beautiful sight to behold. Water lilies and lotuses are examples of the partly emerging plants.

Emergent plants, in some cases, could be taller and have their stems visible above the water. Submerged plants are the ones that remain beneath the water surface. Mostly aquarium plants, they do not offer much visual appeal, yet are instrumental in curbing algae growth by consuming excessive nutrients. They also produce oxygen during daytime and are known as Oxygenators.

Trees such as Salix babylonica, Barringtonia and Bottle Brush varieties can be planted on the edges of the pond by virtue of their tolerance to water logging. These are known as marginal plants and include palms such as Nipah (Nypa) fruiticans and Ravenea palms.
Useful tips

While natural ponds can have the plants in the soil, pots could be used to accommodate the same in the concrete ones and plastic tubs. Alternatively, the container may be half-filled with soil.

“Heavy soil should be used for the aquatic plants with choice mix of horse manure or chicken manure. Algae should be removed from time to time. Periodical replenishment of water is must,” informs the official.

Those desiring a mix of partly emergent and emergent plants may use pots fixed atop a perch (bricks or inverted pots) as per convenience. One can also use ornamental fish to clear the algae. They will prove to be an effective deterrent to insects and mosquito larvae.

Private trust can be formed through a Will

noreply@blogger.com (harsha) — Thu, 08 Jan 2009 13:56:00 +0000

A trust can be created orally by the author of the trust and it may be done in the presence of the trustees and the beneficiaries and terms of the trust will also be specified orally. For the sake of certainty, oral trusts have to be confirmed by sworn affidavits made by the author of the trust and the trustees. Normally, such trusts do not exist in practice as there will be a lot of uncertainties relating to the matters governing the rights and responsibilities of the trustees, beneficiaries etc.
Normal trusts

The second category is where the shares of individual beneficiaries in the net income of the trust and in the net assets of the trusts on dissolution are definite and are clearly indicated in the instrument of trust itself. For the sake of convenience, we can refer to them as “Normal Trusts.”
Discretionary trusts

The third category will be where the individual shares of the beneficiaries are not specified in the instrument of trust and the trustee or trustees are given the option or discretion to divide the net income of the trust among a set of beneficiaries (indicated in the instrument of trust) at any proportion or ratio as the trustees may deem fit and proper. Such trusts are called “Discretionary Trusts.”

A Private Trust can be formed through a Will also. It will come into effect on the death of the person who creates it or on a date with reference to the death of the person. Such a trust is called a “Testamentary Trust.”

A trust also can be declared by a person, as the author, during his life time itself but can be made to come into effect only on his death or on any date with reference to his death.

A normal trust by itself is not taxed to income tax on its net income and only the individual share incomes of the beneficiaries are taxed in the hands of the beneficiaries independently. However, the trustee will fill the returns of income of such beneficiaries as a representative assessee for and on behalf of the respective beneficiaries, by virtue of provisions of Section 160(1)(iv) of the Income tax Act, 1961.
Rate of tax

The rate of taxation applicable is the rate at which the beneficiaries total income including the share income from the trust will be taxed. On the other hand, a discretionary trust as well as an oral trust will be assessed in the name of the trust itself at the maximum marginal rate fixed under the aforesaid Income Tax Act 1961.

The maximum marginal rate means the highest rate of tax fixed for an individual at the highest slab including surcharge on income tax, if any.

An instrument of a private trust shall contain: the name and description of the author of the trust; the name and description of the trustee or trustees; the sum of money or property including immovable property declared as trust property duly described in detail in a separate schedule; the operative portion of the instrument of trust formally declaring the creation of the trust and the trust property; the name and description of the trustees, their powers, authority, rights and responsibilities.; the name and description of the beneficiaries and the nature, scope and extent of the interests of each of the beneficiaries, including their rights to assign their beneficial interests in parts or as a whole to and in favour of third parties.; the duration of the trust.; the mode and manner of determination and dissolution of the trust and the mode and manner of division of trust property among the beneficiaries of the trust; the mode and manner in which the instrument of trust itself can be amended. The schedule shall contain the details of the trust property and in the case of immovable properties, their clear descriptions, dimensions, boundaries and locations.

Developer asked to pay monthly rent to flat owner

noreply@blogger.com (harsha) — Thu, 08 Jan 2009 13:55:00 +0000

In a recent verdict, the Andhra Pradesh State Consumer Disputes Redressal Commission (APSCRDC) ordered a developer to refund the monthly rent to flat owner, as the former refused to hand over the flat. The Commission also upheld the decision of Visakhapatnam District Consumer Forum-I on compensation to the customer.

Nagari Parameswara Rao, a resident of Visakhapatnam, was a member of a group of 20 Low Income Group flat owners. The group entered into a contract with Sai Thirtha Constructions for development of the place. According to the deal, the developer has to return a three bedroom flat along with car parking place and other facilities to the owners. Mr. Parameswara Rao passed away in June, 2003. Since then, the developer refused to hand over the flat in spite of execution of sale deed. Mr. Rao’s wife Ch. Vijaya Lakshmi Parameswara Rao filed a case in the District Forum requesting to direct the developer to pay Rs.2,000 for monthly rent from October, 2003, the month she was supposed to get possession, along with damages and court costs.

The developer resisted the case by arguing that Mr. Parameswara Rao was supposed to submit the land title to them and Ms. Vijaya Lakshmi had to pay Rs.20,000 towards the charges of underground drainage and municipal water connection.

However, there was no evidence provided in support of these arguments.

The District Forum directed to hand over the flat to the customer along with Rs.78,000 for loss of monthly rent, compensation of Rs.25,000 and Rs.1,000 towards court costs. The aggrieved company contended the decision in the State Commission.

It argued the District Forum should have directed the complainant to hand over the land title deed to them, besides the payment of Rs.20,000 towards the underground drainage and municipal water charges.

However, State Commission upheld the decision of the lower forum as the arguments of the builder were not substantiated with any evidences. It directed the builder to deliver possession of flat, besides payment of compensation and rent.

It also ordered Ms. Vijaya Lakshmi to hand over the original title deed to the builder on the date when flat is handed over to her. Time given for compliance was four weeks.

K. VIJAYA BHASKARA REDDY

Shamirpet is the new hot spot

noreply@blogger.com (harsha) — Fri, 02 Jan 2009 13:11:00 +0000

Shamirpet happens to rank high among the emerging real estate hot spots of the city suburbs these days. Once known only for the lake and deer park, the vicinities of Shamirpet have in the last couple of years underwent a metamorphosis making it a preferred destination.

A lot of residential and commercial projects are changing the landscape in and around the place. Existing projects and future prospects plus an affordable price tag has in a way, helped Shamirpet score positively with the middle class in particular.
On global map

Emerging as a Biotech Hub, the place has won a position on the global map. The state-of-the-art Biotech Park has been earmarked here in three phases over hundreds of acres.

The ICICI Knowledge Park developed and maintained by ICICI Bank apart there are other projects being taken up by APIIC. A spread of 25 acre is also to be developed as SEZ by Parswanath Developers. Rough estimates suggest that 62 companies are already functional here with a good enough workforce. The upcoming projects include Giga City in 2,000 acres, DLF in Jawahar Nagar, Genome Valley and Tata Chemicals.

The other major infrastructure taking shape includes a new bypass from Biotech Park II to Biotech Park III, Manjeera water supply up to Biotech Park III, ORR, six lane express highway from Parade Grounds to Shamirpet. It is in this backdrop, Desire Estates and Property (Ph. 9246156109), has come with a project aimed at middle class.
Clear title

With clear title, it is next to Biotech Park Phase III and is spread over 20 acres. On offer are plots of 200 sq.yds with a price tag of Rs.1,450 per sq.yd. Assured are basic amenities including gated community, blacktop roads, underground drainage, club house and swimming pools and ‘vaastu’ compliance, according to the promoters.

T.L.S.

Home loan @ 6.5 p.c. interest?

noreply@blogger.com (harsha) — Fri, 02 Jan 2009 13:10:00 +0000

The benefits available for home loan repayment under the Income Tax Act, 1961, if appropriated towards the interest paid on loans, will bring down the effective interest to 6.5-7 per cent. Here is an effort to substantiate the same.

The income tax benefits available for home loan borrowers are:

Under Section 24 of the IT Act 1961, interest paid up to Rs. 1,50,000 is set off as loss from salary/business income, for self-occupied property (if property is acquired earlier to April 1, 1999, interest up to Rs. 30,000 per annum is allowed).

For rented out property, entire interest paid is deductible from taxable income after computing the rental income. If loan is availed for house renovation, interest up to Rs. 30,000 p.a. is allowed as deduction.

Under Section 80C, home loan borrowers can claim deduction up to Rs. 1,00,000 from taxable income on the loan repaid during the year (along with specified saving instruments).

The entire PEMI interest amount (the interest amount paid during construction period), is allowed as a deduction under Sec. 24, equally over five years (20 per cent of total interest paid), starting from the year in which the construction is completed.
Registration cost

Under Section 80C, along with other specified savings and home loan repaid, the amount spent for stamp paper and registration cost on registering house property up to Rs. 100,000 is deductible from total income.
An instance

Let us analyse the benefits for Ashok, who is working in a MNC with a taxable income of Rs. 900,000 p.a. He needs to pay income tax of Rs. 180,250 as per the slabs applicable for assessment year 2009-10. Plus, there is education cess of 3 per cent on the income tax payable. 10 per cent surcharge, if the taxable income is Rs. 10 lakh and above.

For female assessee, the ceiling is Rs. 180,000.

For senior citizens, ceiling limit is Rs. 225,000.

As per the income tax slabs, his income tax burden comes down to Rs. 133,900 (including education cess) from Rs. 180,250, a saving of Rs. 46,350.

If this saving of Rs. 46,350 is appropriated towards interest paid on home loan, the effective interest on home loan reduces to 8.67 per cent.

Mr. Ashok can also claim deduction up to Rs. 100,000 towards the principal loan amount paid.

Since he was burdened with a whopping EMI of Rs. 34,773, he could not save in other specified instruments such as Provident Fund and LIC premium.
Deduction

By claiming deduction of Rs. 100,000, his taxable income got reduced to Rs. 650,000. And as such, his income tax burden got reduced to Rs. 103,000, thus earning him additional savings of Rs. 30,900. If this additional saving of Rs. 30,900 is appropriated towards interest paid on home loan, the effective interest on home loan reduces to 7.12 per cent.

Build up evidence base in your own interest

noreply@blogger.com (harsha) — Fri, 02 Jan 2009 13:10:00 +0000

n consumer disputes, it is always imperative to set legal process in motion at earliest date possible. Writing letters to the company to build an evidence base, serve them with legal notice and filing the case at consumer fora ought to be taken place quickly. Otherwise, consumers would lose the interest compensation as the fora consider the date of legal notice, date of complaint or date of verdict as the base date to award interest on amount of the incurred loss.

A recent verdict by Visakhapatnam District Consumer Forum can vouch for this.

Although the verdict was in favour of the consumer, she could get interest compensation only from January 2006, the date of legal notice, while she had paid money to the builder in July 1995.

“Delay in filing case will not only cost interest compensation, but at times, the cases also can be rejected for taking such a long gap from the date of incident,” said C.V.L. Narasimha Rao, an advocate and consumer rights activist.
Registration

L.T. Vineela joined in Sai Kanaka Durga Layout of GPR Housing Pvt. Ltd., Visakhapatnam in March 1995.

She paid Rs.36,800 towards the plot with in four months but it was not registered in her name in due time.

In spite of a legal notice, the developers failed to register the site with an approved layout from Municipal authorities or to refund her money.

In April 2008, she filed a case in the District Forum seeking a direction to the builder to refund Rs.36,800 with interest of 18 per cent per annum from July 1995, Rs.1 lakh towards damages and court costs.
Compensation

The forum observed that the builder received substantial amount from the customer, but could not get approval from authorities to register the plot and it was nothing but deficiency in service.

It ordered the builder to refund Rs.36,800 with 12 per cent interest per annum from January 6, 2006, the date of legal notice, to the date of realisation and Rs.7,000 for compensation along with Rs.1,000 for court costs. Time given for compliance was four weeks.

To avoid pitfalls in compensation the consumers should move to the court at earliest date possible and seek the compensation they deserve.

The icing on the cake

noreply@blogger.com (harsha) — Fri, 02 Jan 2009 13:09:00 +0000

Since a major focus of the real estate activities in coming days is expected to be in the extended areas of the Hyderabad Metropolitan Development Authority (HMDA), a decision has been made to reduce the developmental charges in these areas by 75 per cent.

The recently constituted HMDA in its first meeting chaired by the Chief Minister Y.S. Rajasekhara Reddy, who also is the HMDA Chairman, reviewed the issue of developmental charges for the extended area and decided to reduce it by 75 per cent here on the rates prescribed in G.O.Ms.No. 439 dated June 13, 2007 of Municipal Administration and Urban Development.
More teeth

The meeting also discussed and decided on delegation of development control powers to the local bodies. For properties coming in the HMDA area, it is decided to delegate these powers to the Commissioner, Greater Hyderabad Municipal Corporation. All residential, institutional, commercial building permissions below 18 metres height (non multi-storied building) and issue of No Objection Certificate to the Commissioners of Sangareddy and Bhongiri Municipality while grant of residential building up to G+2 on plot area up to 1,000 sq. mts to the Panchayat Secretary/Executive Officers of Village Panchayats in HMDA.

The HMDA Board decided to adopt the concept of Green Channel for speedy approval of Building Permissions and Layouts.

As per this, non-MSB cases would be cleared in six working days and applications coming through this channel would be liable for charging special fee.
Incentives

The meeting reviewed the progress of work in preparation of Master Plan for HMDA extended area and observed Transportation Plan, Environmental Development Plan should be given importance along with land use zoning plan. The need for additional Railway passenger terminals and freight terminals was also highlighted and the Chairman also directed to provide duct along the roads for utilities. He also instructed to check the feasibility of providing gas pipeline in the duct. The HMDA also directed Metropolitan Commissioner that suitable incentives are worked out to encourage builders in taking up buildings as per the Green Building Code.

While sanctioning Rs.100 crore for the new HMDA building at Hitech City, the Board also approved four zonal offices and eight service centres.

While the zonal offices are to be located at Shankarpally, Medchal, Ghatkesar and Shamshabad, the HMDA service centres would be at Chevella, Sangareddy, Narsapur, Shamirpet, Bhongir, Pochampalli, Ibrahimpatnam and Maheshwaram.

Dream homes still in distant vision

noreply@blogger.com (harsha) — Fri, 02 Jan 2009 13:07:00 +0000

The bubble of real estate boom finally had to burst. Or it may seem so. Even as many ‘incentives’ are being brought forward by the government and real estate players alike, middle-class families are still playing the ‘wait-and-watch’ game before buying property. The prices have been scaled down to woo the potential buyer too.

“I will wait for the prices to come down further,” says E. Srinath, a government employee. It was two years ago that he decided to buy a house but given the high property, he went for a car instead. “The market was already beyond our reach and we kept hoping that the rates will come down,” he adds.The boom was created artificially only to increase demand, Srinath feels. “It was created by builders because a segment of people were buying property. The per sq.ft. rate at Champapet was Rs.1,600 and in matter of months, it skyrocketed,” says A. Aparna, his wife. “Today, even with a combined income, it is difficult to get a house,” she adds.

Their interactions with local builders in the area also fuelled their decision to wait for prices to drop further. “Six months ago, a builder offered us a flat for Rs.3,100 per sft.

Three months later, he came down to Rs.2,800 and a month back, he called us up and offered as low as Rs.2,600 per sft,” says Srinath.

Now, the couple is waiting for the prices to fall even further so that they can go ahead with the purchase. “We didn’t expect the market to go up that way. But with prices spiralling down, we are going to wait for two to three months before taking the plunge,” concludes Srinath.

Indian economy: will the stimuli work?

noreply@blogger.com (harsha) — Fri, 19 Dec 2008 14:44:00 +0000

The global financial market meltdown and its effect on the Indian economy has forced the Reserve Bank of India and the government to initiate some more measures for uplifting the sagging economy. Let us examine the details of the ‘stimuli” and its possible effect on the housing sector.

The main accent of the RBI’s stimuli is on interest rates. The government’s package is a mixed bag — additional budgetary expenditure of Rs. 20,000 crore, tax/duty cuts and increased lending by public sector banks.

The major policy announcements by the Reserve Bank made on December 6 are:

Reduction in repo rate to 6.5 per cent and reverse repo to 5 per cent

Housing loans up to Rs. 20 lakh to be treated as ‘priority sector’ lending

Refinance of Rs. 4,000 crore ( details to be announced after the meeting of RBI Board, slated for the current week), for the National Housing Bank for financing construction/purchase of dwelling houses under the priority sector to individuals/families

Five per cent ceiling on housing sector priority quota within the overall priority sector lending; such loans sanctioned up to March 31, 2010

Concessional treatment to commercial real estate lending and consumer loans extended up to 30-6-2009.
Interest reduction war?

Even before we read the news item in the morning papers, the television channels beamed the decision of ICICI Bank to reduce interest on home loans to 11.5 per cent from 13 per cent, a hefty reduction of 1.5, on housing loans up to Rs. 20 lakh. While the general public may be carried away by this high speed action, since the ongoing interest rate movements are a by-product of the ‘stimuli’ to the sagging fortunes of the Indian economy as a result of the global meltdown, other steps are necessary as a follow-up measure.

The government came out with a package of economic revival ‘stimuli’ on December 7, which has certain direct and indirect measures to support the real estate sector, such as

Housing loans up to Rs. 5 lakh to be treated on special footing.

Loans above Rs. 5 lakh and up to Rs. 20 lakh to be treated as priority at concessional rate.

CENVAT relief of four per cent for all dutiable items.

Special approach to residential housing segment.

Why the reduction in rate only to loans up to Rs. 20 lakh?

The specific plan behind the RBI’s declaration of housing loans up to Rs. 20 lakh as ‘priority’ sector is not very clear. However, this only prompted the ICICI to pass on the repo rate reduction to lower and middle class investors who are shying away from investing due to high prices.

Interest on home loans during the last two years.

The home loan rates climbed from around nine per cent to about 14 per cent during the last couple of years. This, along with the increasing cost of construction materials, service charges, cost of stamp duty and registration charges, enhanced the cost of investment in the housing sector by 20-25 per cent. Coupled with the general rise in land cost, this increase has discouraged investors, especially the lower and middle class. Promoters and builders who had big plans for expansion have deferred their plans to invest in new ventures. As a result, the housing market has been dull and demand has came down by almost 25 to 30 per cent, according to top builders.
Cheap money policy

The urgency shown by the RBI and the open direction from the former Finance Minister last month will certainly encourage banks to pass on the reduction in their cost of funds to the borrowers in general and to the small investors in real estate. However, not extending the reduced rate to all the existing borrowers may have negative effect. Most of these loanees may opt to change over to other banks. Another possible effect can be the borrowers utilising the opportunity to limit their borrowing to the upper limit of Rs. 20 lakh in order to get the benefit of lower interest. Yet, the idea needs to be welcomed.

Major effects on the sector can be:

Fillip to long term lending, say 25-30 years.

Preference to floating rates.

Relocation from congested cities to less crowded towns.

Movement from central districts to outskirts.

Green structures to counter climate changes.

Development of townships in and around metro rail terminals.
Cautious approach

Another point to be debated is whether all banks will be in a position to reduce interest on lending unless their cost and asset liability match. Despite positives, it is better to wait and watch for a while. In case the recession is to continue for a while, say 2-3 years, the money value can come down substantially. Optimism pays, but caution can be the watchword. If interest rates go down continuously, the benefits should be fully availed by the borrowers, as the up-cycle will come, may be a tad late in the day! The good news, however, is the positive responses from many banks such as BOB, BOI and Oriental to reduce the rates.

Compensation for mental agony too

noreply@blogger.com (harsha) — Fri, 19 Dec 2008 14:44:00 +0000

In a recent case, the A.P. State Consumer Redressal Commission increased the compensation amount to offset at least a reasonable portion of loss incurred by a customer.

M. Srinivasa Raju, a resident of Saroornagar, purchased a plot from Sreemitra Real Estates Pvt. Ltd. in August 2002. He made the initial payment of Rs.49,625, but however, stopped the further payments as the developer refused to allocate him the plot. His repeated requests were ignored.

Mr. Raju filed a case against the developer in Ranga Reddy District Consumer Forum seeking repayment of his money together with Rs.50,000 towards interest, Rs. 1 lakh as compensation and Rs.50,000 for mental agony.

The District Forum ordered the builder to refund the paid money Rs.49,625 along with interest of 9 per cent per annum from July 2004 till the date of realization and compensation of Rs.2,000 and Rs.500 for court costs.
Better compensation

Upset with the amount of recompense, Mr. Srinivasa Raju challenged the verdict in the State Commission. He argued that if he was refunded the money when he had asked, he could have purchased another plot in city and would have earned a good market value for it.

He further said he would get only a meagre compensation with the interest rate granted by District Forum and pleaded for better compensation.

The State Commission found force in the contention of the customer.

It observed that if customer was refunded his money in 2003 itself, he could have bought another plot and benefited from the increased land rates.

The State Commission modified the order of the District Forum keeping and asked the builder to repay Rs.49,625 with interest rate of 15 per cent per annum from August 2004 to the date of realisation.

It increased the compensation and legal expenditure amounts from Rs.2,000 and Rs.500 to Rs.25,000 and Rs.1,000 respectively.
Cases cited

The Commission cited three cases - Lucknow Development Authority v. M.K. Gupta, Haryana Development Authority v. Suman Bansal, and Haryana Development Authority vs. S. P.Gupta, which were tried by the Supreme Court.

In the verdicts of these cases, the apex court stated that consumer fora should specify the amount under each head while awarding the compensation and due compensation should be awarded for mental agony and harassment. The time given for compliance was one month.

Too many tongs in the fire

noreply@blogger.com (harsha) — Fri, 19 Dec 2008 14:40:00 +0000

Now that the government’s integrated townships on a Public Private Partnership mode’s draft policy has come into the public domain, initial excitement seems to be giving way to trepidation. Stakeholders concerned like real estate developers, technocrats and experienced officials have been raising quite a few pertinent points on the issue.

Few are ready to buy the argument that the current slump is the right time to get “budget projects” grounded, the basic premise on which the new policy envisages. As much as 40 per cent of the purported township’s plotted area is to be earmarked for economically weaker sections, low income and middle income groups.

People in the business wonder if it’s practical to go for such housing when 10 per cent of the township is reserved for open spaces and another 10 per cent of residential area is to be handed over free to the sanctioning authority for its own usage? “Can any entrepreneur be successful by taking such a project? Is the government washing off its responsibility to provide housing for poor,” asks an official, incredulously.
Business lobby pressure

He points out that an earlier plan to earmark 20 per cent land in each layout for such a purpose in Hyderabad Metropolitan Development Area (HMDA) came tumbling down to five per cent following incessant pressure from the builders-politicians lobby. “And, even there are no proper modalities on how the reserved space is to be utilised, the cost factor, selling price and probable beneficiaries,” he says.

A previous attempt to sell such houses did not serve the purpose as even the “low price” was way above the affordable range of the target group.

Putting onus on private parties to develop townships is fraught with risks as the contentious land acquisition could lead to more legal wrangles as incentives are simply not enough, argue few others.

“The market value rates upon which cash compensation is to be paid will not be acceptable since it denotes to official values which is too low,” points out a developer. There was also a danger of such townships becoming inaccessible from rest of the urban area.
Gujarat example

Instead, the government should follow the Gujarat example where the urban development authority takes over all the land delineated for a township, builds basic infrastructure like internal and arterial roads, earmarks public spaces, etc. Most importantly, it allows a plot owner to retain his ownership allowing him or her to sell when the time is ripe.

Also, asking developers to build and also maintain civic amenities in such townships is expecting too much, say critics. “When governmental agencies have failed to provide for proper civic infrastructure anywhere, is it possible for private players to do the job? What is the guarantee the developer will do it, if at all or qualitatively, after the plot or apartment is purchased? There are many cases of such failed promises,” says an official.

While giving a push to real estate is imperative, government should seriously consider giving it an industry status as there will be easy finances and tax benefits along with some much needed regulation to protect the consumers’ interests, feel some.
No Master Plan

Without a proper Master Plan in place, it is foolish to go ahead with such projects as it would do against the very tenets of the policy of organised growth, is an overwhelming opinion among stakeholders. Hyderabad itself had a Master Plan in 1975 and a new one is yet to see light of the day even as it has been a stupendous growth.

The prices…..in the wake of terrorism

noreply@blogger.com (harsha) — Tue, 09 Dec 2008 13:07:00 +0000

Most of us consider the interest rate as the key factor affecting real estate prices. While a combination of factors can affect the demand and consequently prices, terrorism can be the most lethal market buster.

Commenting on the terrorist attack on Hotel Taj, Trident-Oberoi and Nariman House, the Singapore Prime Minister expressed the view that investment in India can be adversely affected by the developments. The then Finance Minister, P.Chidambaram, admitted that the Mumbai siege may mar the mood of the investors and could have negative impact on investor sentiments at least in the short run, but the Indian economy has the strength to overcome it fast. The rating agency, Standard and Poor, however, does not expect any negative impact on India’s macro economy. The terror strikes, they say, are isolated incidents. Percy Mistry, economist and head of an expert committee on making Mumbai an international financial centre, which recently submitted a road map for the same, is reported to have stated that the terrorist attack can erode investor confidence. What is the factual position relating to property prices?
Risk perception

Investment in real estate mainly depends on the risk perception. Risks are from many angles. First and foremost is the safety of one’s investments and the return for it. Next, the class of investor/s who contribute a good percentage of the investments in property. In the case of Indian real estate, individuals form only 10-15 per cent of the transactions, especially from the volume point of view. Surveys have shown that the institutional investors form around 40-45 per cent of the value of deals done in the last 3-5 years. Banks, finance companies and software firms own office premises in major cities as they plan for medium to long-term benefits. If this is true, risk perception will be high in the short term. Yet, the global financial meltdown does not give many alternatives for funds and trusts to get reasonable returns for their investments in liquid assets and they have to turn to the property market. Some may even use the slump to buy property in risky metros.

If terror attacks are dampeners, the 9/11 World Trade Centre attack in New York did not affect property prices in New York city. Even in the Philippines, the killings of tourists did not stop further property development. Nearer home, the 2001 terror attack on Parliament in Delhi did not have any adverse effect of property prices in the metropolis. The risk perception is a wholesome feeling and again comparative in nature. In fact, terrorism is now a global phenomenon and there is no place which can be considered insulated against it. This means among the risk Factors such as fire, flood, earthquake, and now terror all have pivotal role in risk perception.

In this background, Indian property prices cannot be considered high as compared to the ‘street specific’ top few cases as reported recently. For example, the most expensive sq.ft. prices at Rs 8.45 lakh on Avenue Princes Street in Monaco, Rs. 5.40 lakh in Seven Road, Hong Kong, Rs 3.60 lakh in Fifth Avenue, New York, etc are not comparable to any area in Mumbai or Delhi or Kolkata . At best, the price of Rs. 52,000 reportedly paid by a foreign bank in Mumbai last year for securing an office space could well be the highest in India. In such a situation, a reported slump of 10-15 per cent seen in Mumbai market overnight cannot be considered alarming.

Much needs to be done to protect properties from terror risk. Some important steps can be:

Insurance against risk of terror attacks.

Business Districts must spread its wings to interior locations.

International property exchanges covering property stocks, so that risk can be neutralised by investing in stocks of different countries.

Cities including Hyderabad, Bangalore and Chennai have lower property price rates as compared to Mumbai or Delhi. In such a situation, it is likely that investors may turn to these cities for taking the advantage of lower prices. This may perhaps help the sagging market too to look up. Let us wait and watch.

Consumer can no longer be taken for a ride

noreply@blogger.com (harsha) — Tue, 09 Dec 2008 13:07:00 +0000

In a recent verdict, the A.P. State Consumer Disputes Redressal Commission (APSCDRC) censured Narne Estates Pvt. Ltd. for its unethical business practices.

The State commission commented that the company was harassing and causing loss to the consumer and its efforts to repudiate the agreement were unethical.

T. Vijaya Kumari, a resident of Indian Airlines Employees Colony, purchased a plot from the company in its East City extension in January 1998. She paid Rs.40,000 by the end of 2000 as per the initial agreement. She was asked to further pay an amount of Rs.43,750 towards development charges.

Accordingly she paid the charges by February, 2003. The company refused to register the plot on her name and it offered an alternative plot, which was not acceptable to the buyer.

Hence, the buyer asked for repayment of her amount. However, she could get only Rs.81,250 out of Rs.83,750.

She was told that Rs.2,500 was deducted towards outstanding dues, which never existed.

The company neither paid interest on the money for keeping it for three years nor compensation for going back on its promise.

The annoyed buyer filed a case at Hyderabad District Forum-III seeking for Rs.3,75,000, the then market rate of the plot, with 24 per cent interest rate per annum, Rs.2,500, which was deducted illegally and Rs.50,000 towards compensation besides court costs of Rs.10,000. The company didn’t oppose the case at the Forum.
Deficiency in service

All in all, the District Forum stated that not registering the plot after taking the entire sale consideration, amounts to deficiency in service.

However, the forum awarded only a compensation of Rs.50,000 besides costs of Rs.2,000. The company contended the verdict in the State Commission. It said that the compensation of Rs.50,000 was on the higher side and it argued that it was not liable to pay either interest or compensation since it proposed to register an alternative plot.

The commission pointed out, that the reasons put forth by the company for not registering the plot were inconsistent. It further stated that compensation of Rs.50,000 cannot be termed high, as the company locked up the consumer’s money for three years by which she has lost her plot at a time when land prices in the city escalated.

However, Ms. Vijaya Kumari was not granted the market rate as she couldn’t submit any proof to support her argument.

Home loans: rise in slippages worry banks

noreply@blogger.com (harsha) — Tue, 09 Dec 2008 13:05:00 +0000

Banks have begun stress testing their realty assets as delinquencies in loan service payments begin mounting.

Bankers said that many banks were facing overdues on some of the past realty loans and some home loans. The slippages noticed were mostly through an increase in overdue debt service payments for up to one month. In the past, overdue payments were very low.

Bankers said that in at least 10 per cent of the home loan accounts, they had experienced such slippages.

Two years ago, when rates were low, the slippage was minimal. Only about 2 per cent of the home loan accounts experienced such slippages, the bankers said.

Such slips in debt service payments notwithstanding, banks see little need to classify the accounts as sub-standard assets.

Vijaya Bank’s Chairman and Managing Director, Mr Albert Tauro admitted “There is an increase in debt service payment slippages. But this is not an immediate cause of worry.” This was because despite the overdue payments, they were yet to reach the threshold level of 90 days. Assets are classified as non-performing only if the debt service payments were overdue for more than 90 days. Besides, for most banks, realty and home loans comprised less than five per cent of their gross assets.
Unfinished projects

Bankers said some realty projects had been left unfinished for want of buyers, increasing the risk of loan delinquencies.

As a result, most of them were limiting loans to the realty sector to contain risks and assessing potential risks through stress testing of the assets.

Stress testing implied assessing the potential for asset delinquency. Asset delinquencies were on the rise in several public sector banks.
Rising NPAs

Bankers are resorting to moral persuasion, persuading borrowers to settle their overdue payments.

However, despite such efforts, NPA accounts have been on the rise. In the second quarter of the current financial year, the average NPAs of the banking sector is already close to 1.5 per cent of advances.

For the last financial year, the average was about 1.3 per cent of advances.

Banks’ worries are not just confined to rising NPAs in the realty sector. In many cases, the loan-to-value (LTV) ratio has dropped below the prudential level of 1.5. Under current guidelines, banks are expected to maintain physical asset coverage of at least 1.5 times (150 per cent) the loan value.

Normally as loans are amortised, LTV ratios tend to rise. A falling LTV, however, implied depreciation in the value of assets.
Distress sales

Mr Lakshmi Narayanan, president and Chief Executive Officer, The Real Estate Bank of India, said “Distress sales have increased. Some developers are resorting to discounted sales for meeting liquidity requirements.”
Balance sheet losses

Realty prices consequently are sliding. LTV ratios are currently down to 1.22 with the drop in the value of realty prices in most metros.

Bankers said that if realty values dropped further, LTV ratios were also likely to drop further. This meant that in the event of loan foreclosures, banks would have loan losses on their respective balance sheets.

Carpets as tiles

noreply@blogger.com (harsha) — Sun, 23 Nov 2008 09:50:00 +0000

While commercial spaces, especially corporate houses, use wall-to-wall carpeting for interiors, carpets do have maintenance issues and can cause allergy if not properly maintained. With certain areas wearing out more than others based on foot fall, the need to replace large chunks of the carpet arises, which is not eco-friendly.

To negate these factors, the concept of carpet tiles has emerged where pieces of the carpet are used, enabling specific pieces to be changed in the event of sections getting worn out.

InterfaceFlOR is into manufacturing carpet tiles and the company has achieved a green tag for its process of manufacture. These carpet tiles incorporate features such as no VOC content and contain a proprietary anti-microbial preservative, Intersept, which protects the floor from mildew, bacteria, mold and other odour-causing micro- organisms. Glue-free TacTiles are used to install the carpet tiles, which reduces the environmental footprint by 90 per cent.
Air quality

These features improve the ambient air quality, thus contributing to reduction of the sick building syndrome, says Raj Menon, CEO, InterfaceFLOR. “The added advantage is the minimal 3-4 per cent wastage of material at the time of installation which is against conventional broad looms which amount to 13-14 per cent,” he adds.

Nothing commercial about it

noreply@blogger.com (harsha) — Sun, 23 Nov 2008 09:49:00 +0000

Given the consciousness and increasing need to opt for greener solutions to promote sustainability, corporate houses appear serious about carrying out operations from buildings that sport a green tag. Unlike earlier times when few sustainable options were incorporated, commercial buildings now evince the need to go not only totally green but be rated green.

Buildings that have incorporated green aspects of construction and ensured thermal comfort and indoor air quality have been found to increase employee productivity and reduce attrition rates.
LEED-rated IT park

While none of the presently occupied commercial buildings have a LEED rating, Xylem, the first LEED (Gold) rated IT park in the city, developed by the Tata Group, became ready for occupation recently.

With an area exceeding 240,000 sq.ft., Xylem incorporates all the essentials in terms of design, materials, orientation, energy savings and indoor air quality.

The objective is to tackle the ‘sick building syndrome’ and focus on occupants’ health, ergonomic design and architecture to increase employee productivity.

Boasting of a 19 per cent saving in operational cost as compared to a conventional building, the IT park packs in features such as efficient water use, right orientation to let in maximum natural light, efficient and intelligent air conditioning that results in energy savings of up to 26 per cent as well as energy saving lighting options.

To ensure indoor air quality, the building has 22 CFM of fresh air as compared to 15 CFM in a conventional building. The use of double-glazing glass and aluminium aerofoil louvers further reduces indoor temperature, reducing the need for air-conditioning.

The building has lounges at each level with a terrace garden to serve as relaxation centres. A fully-equipped club house complements this.

Says Brotin Banerjee, COO, Tata Housing, “While this IT Park is the first of its kind in Bangalore, we propose to make all our future projects green compliant.” While there is a marginal increase in the cost of construction, the operational and health benefits negate this extra cost.

Following closely on this path is Bearys Global Research Triangle, currently under development by the Bearys Group. Being the first green building research park in the IT sector, the development aims to incorporate all aspects of a green building to attain a LEED Platinum rating on completion.

Aesthetically designed, the building is in the midst of the lush green belt in Whitefield and built with no changes to the contours of the landscape. The building is to be surrounded by trees to add to the green factor. While all the open terrace spaces are to sport a terrace garden to minimise heat besides enhancing the green look, even the commonly used aluminium louvers have been replaced by creepers.

“The building occupies only 28 per cent of the site area with the rest covered by trees. Even in this 28 per cent, all open areas are to be greenery”, says Syed Beary, Chairman, Bearys Group.

The building is uniquely designed with a portion of it slanting to provide shade to the relevant section. Similarly, the fire escape incorporates a fresh air vault to successfully push the fire out of the section.

While the orientation of the building is structured to let in maximum natural light while cutting out heat, double-glazed glass and Aerocon blocks act as an extra level of insulation.

To ensure indoor air quality, separate ducts are provided for fresh air which minimises stale air traditionally circulated in an air- conditioned interior. Green-compliant carpet tiles will improve indoor air quality.

About 50 per cent savings in energy is expected to be realised with CFL and LED lights. In conference halls, sensors are to regulate air-conditioning as well as lighting.

Similar to energy saving, water conservation features will be in place, not only in terms of waste water recycling and rainwater harvesting, but by using methods like dual flushing and sensor taps.

While the facilities of a club house are to be available for the occupants, the building also proposes to incorporate a Montessori and child care centre to take care of the needs of working mothers with young children.

To promote green modes of transport, special bicycle parking zones and facilities for charging battery-operated cars are to be provided besides making available a fleet of buses for long distance commuters.
Remove the myth

Says Chandrashekar Hariharan, CEO of BCIL-GIL, “the concept that green buildings are more expensive than conventional buildings is a myth.” According to him, a green building veers around the basic approach to design and the right design will reduce the cost of construction, making the cost difference minimal.

BCIL is a green building consulting firm assisting corporate houses with green options. Its wing, GIL, is into research and innovation to promote new ways of adopting green technology.

The company has developed and is in the process of developing various end-user products that are not only energy saving but economically viable.

These products extend to home appliances and address commercial needs such as innovative ways to increase the level of fresh air in an air-conditioned interior.

Adds Hariharan, “There has been tremendous response from builders to incorporate green features not only in commercial spaces but residences too.

This response is seen across the board to imbibe the green concept even in other sectors like food processing and manufacturing.”

Going forward, he envisages increased awareness and steep growth in the percentage adopting the green concept.

These midgets can be mysterious and mindboggling

noreply@blogger.com (harsha) — Sun, 23 Nov 2008 09:45:00 +0000

The mention of the word ‘tree’ immediately conjures up an image with enormity as its key character-- trunks of vast circumference and wide-spread canopy stemming from innumerable branches and sub-branches. If one can think different; think of midget trunks and insignificant canopy with scaled-down heights, growing from trays and having only so many branches as the owner wishes, one has known and seen the bonsai beauties.

The Japanese word ‘bonsai’ means ‘potted plant’ and does not in literal sense convey what it denotes—a miniature tree. Though said to be originating from China, Bonsai technique reached its acme only in Japan, where it was transformed into an art, and spread across the world. Not many noticed the presence of bonsai in the world’s first Horticultural Show of Paris in 1848, yet the show in 1912 at London drew hordes that immediately attributed mysticism to the art of bonsai. Post World War II, the veil of mystery removed, it became a craze even in the Western world.
Artistic touch

“While horticulture is a healthy diversion from mundane activities, bonsai adds a touch of art to it. A bonsai tree is the result of a series of physical manipulations, not genetic modifications. Hence, sowing of a bonsai’s seed does not yield a Bonsai tree,” says D. L. N. Prasad, eminent plastic surgeon who first brought the art to the city.

Showing around his much-loved and cared for garden of miniatures, he explained how he and his wife first started off in 1967 with minimal knowledge, how they used the curd-bowls to plant the saplings, and later tried out earthen trays and failed, and how finally got the miniature Ficus bengalensis that survived till now, with prop roots et al.

“Now, I can tell you the shortcuts, but initially it was a story of repeated failures. Patience and perseverance are the two investments needed for bonsai cultivation. First thing you should know is that there is a pre-bonsai stage in which sapling from the nursery is prepared,” Dr. Prasad says.

Seedlings from nursery, if planted directly in a typical bonsai tray, will not last long. Instead, they should first go straight into earth or a pot as the case may be, and grown like normal plants.

Even before obtaining the plant, one should have a vision about what one would like to do with it, about its growth orientation and the number and size of branches one would like to retain. It is more or less similar to the creation of an artwork, in that, both are driven by an idea.
Selection process

Though there are no rigid rules in selection of saplings for bonsai, a few practical considerations could go a long way in ensuring trees as family legacy.

“Any species that branches freely may be chosen for bonsai. They should be soft-stemmed and be able to take pruning of roots and branches. All Ficus varieties apart from trees such as tamarind, badam, baobab and guava may be trained as bonsais,” says M. M. Hussain from Plants Land Nursery. Another point to be borne in mind is the life of the plant. It takes about five years for a plant to be made into a bonsai. Those with marginal lifespan will not be suitable for the art, as they die sooner.

As miniatures, bonsais should always represent nature in its myriad forms, but not beyond that. A few basic growth orientations adopted straight from nature will help one to visualise what one would like to design. For single-trunk bonsais, it might be formal upright, informally upright with scattered branches, slanting, curved/twisted trunk, semi-cascading with down-ward bend, cascading with total fall, wind blown, or literati with foliage in the top.

Those with multiple trunks may be double-trunked, triple-trunked, a series of trunks, growth akin to a raft, or rambling ones. Seasoned growers may also plan a landscape of bonsais in a single tray. Once the orientation and the number and placement of branches to go with it are clear, one should visit a nursery and choose a plant that shows promise of the desired growth.

Pot should be of the same size as the plant and the tap-root of the sapling may be cut and a rock placed underneath to encourage growth of secondary roots.

After planting and nurturing it in a pot, one should allow vigorous growth of the desired branches, albeit after slicing off all the superfluous ones.

Any unwanted growth disturbing the desired branching should be immediately curbed. One should not mind the growth of the required branches till the thickness intended for the stem is arrived at. Pruning of the branches to suit the proportions comes only at a later stage.
Do’s and don’ts

The focus of a bonsai artist should largely rest over trunk and canopy which are known as primary features and over the branches—main, secondary, tertiary and lateral—and roots that are the secondary features. One aspect typical of bonsai is the discouragement of thick foliage at the middle stem.

“Care should be taken to make the main branches visible. They should be trained in such a way to have gaps among them. No two branches on either side or vertically should begin from the same point of the trunk and they should not be at right angles. Branches may also be trained in the desired direction by tying them with wires,” says Dr. Prasad, his hands automatically pruning away the excess foliage.

Once the stem becomes thick—which might take upto five years—the plant is ready for transplantation into a tray. Selection of a tray should follow the tree’s height and branching. If it is rectangular, planting should take place to a side, for attaining that ravishing look. While displaying, the tree should always be at the eye level.
A creative touch

Much depends on innovation that amply manifested itself in Dr. Prasad’s garden as knots wherever he cut away the branches. By scooping away a bit of wood from the cuts, he made them look like natural hollows.

He also resorted to air-layering as a method to curb the tree’s height, and pruning of the selected leaves to keep the size of the rest small. Leaf-size reduction and also root exposure come at a much later stage and a beginner need not worry about them.

“There are three limitations for bonsai, namely light, water and time. Bonsai is not meant for indoors and needs as much sunlight as a grown up tree. Hence, it must be kept outside and carried in only occasionally,” says Dr. Prasad.

“Watering is a must three to four times a day depending on the season, as the roots are shallow.

Time, in my opinion, is not difficult to shell out for a passionate heart,” he adds as an afterthought.

Bonsai buffs may call him at 040-23392424.

YSR offers land for ISRO centre

noreply@blogger.com (harsha) — Tue, 18 Nov 2008 06:56:00 +0000

HYDERABAD: Chief Minister Y.S. Rajasekhara Reddy has urged the Indian Space Research Organisation to establish its astronaut training centre under the Human Spaceflight Programme (HSP) at Anantapur and offered land, even as the space body announced plans to set up a facility for advanced atmospheric studies near Tirupati.

Replying to Dr. Reddy’s congratulatory message following the launch of Chandrayaan-I, ISRO Chairman Madhavan Nair said the National Atmospheric Research Laboratory (NARL) was functioning at Gadanki, near Tirupati, since 1992.

BJP seeks details of land alloted to SEZs

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:56:00 +0000

HYDERABAD: Bharatiya Janata Party president Bandaru Dattatreya on Sunday demanded that the government publish a white paper on the land allotted for various companies and individuals in Special Economic Zones as also the details of the firms which were set up in them.

In an open letter to Chief Minister Y.S. Rajasekhara Reddy, the BJP leader also urged the government to stop acquisition of the land at Chillmathuru and other places where public purpose was not served.

Accusing the State government of acting inhumanly against farmers, Mr. Dattatreya said that lands were being taken away from them in violation of their fundamental rights.

A prelude to painting

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:53:00 +0000

Surface preparation prior to that long-needed coating is as important as choosing the right colour(s), type of paint and brand to go with your tastes and settings. In fact, many seasoned painters and interior designers emphasise on proper preparation before going in for actual coating.

A good paint on a surface well-prepared always gives one the satisfaction of the final product. In fact, experienced painters say paints on well-prepared surfaces always last longer.

Better the surface cleaning and preparation, better will be the life and gloss of the paint and lesser the cost will be ultimately, says T. Narayan Rao of Monarch Paints in Jambagh. In fact, all major paint companies stress on proper surface preparation to avoid disappointment once the final coat is done.

The first thing one should do before the painting work begins, obviously, is to take away all the curtains and fixtures from their places. All the furnishings in the room should be placed in middle of the room and covered fully so as not to let the dust settle on them or the paint ruin some expensive showpiece.
Prelims

Carpets, rugs or any such loose covering on the floor should be removed and placed in safer areas. Use covers or dustsheets for the purpose. Oily and greasy marks can be removed by using a sand paper. It also takes care of dust particles or rust in case of metals.

Insects or termites (wooden surfaces) should also be taken care of. Applying two to three coats of Kiricide 15 days prior to the day of painting should help. The substance penetrates the surface. Make sure it is dried up by the time it is painted.

Once the walls are clear of their adornments, wash their surfaces with soap or detergent to get rid of dust and debris. That done, the about to be painted surfaces should be carefully inspected for any kind of holes, cracks or loose plaster.

The look of a room can be greatly diminish if painted on a damp surface, says Vijay Kapoor of Tirupathi Paints in Jambagh. Besides, damp surfaces are not really conducive for wall painting. One of the golden rules when painting a room is to ensure all the surfaces to be painted are dry and clear of dust. A damp surface also can lessen the life of paint, says Mr. Rao.
‘Fix its’

Hence the maxim, a stitch in time saves nine always holds true in case of damp surface areas. In case any damp spots are spotted, they should be dealt with immediately. There are several ‘fix-its’ like Algi coat RE104 or Dr. Fix damp guard available in the market to stop/block small leakages. These ‘fix-its’ should be applied only after the first primer coat.

In case the seepage is more or there is excessive leakage, professional help should be sought. According to Mr. Rao, a new primer ‘Zysocil Primer’ is now available in the market. This primer can be applied directly on the wall’s surface before the application of first primer coat. Cracks and holes are another aspect that should be dealt with care. If not tended to in time, the risk of the cracks widening or the wall surfaces peeling after a point of time is greater.

Loose and flaky plaster can be detected by tapping the wall or ceiling surfaces. Portions where cracks have developed or are doubtful should be very carefully examined, says Yusuf, a professional painter. Once the cracks or holes are identified, correction measures can be taken.

Specific crack healing solutions are available at paint shops. While some just cover up small cracks, there are others like ‘wall care putty’ that act both as putty as well as to hide or rectify cracks.
Repairing cracks

While covering up the holes or cracks, it is advisable to fill it up more than the levelled surface, Mr. Kapoor says.

It is always possible for us to smoothen and level it to the wall’s surface by rubbing it with fine sandpaper, he adds. Seek professional help in case the cracks are larger.
Primer coat

Once these problems are dealt with the wall should be dried before the first coat of primer could be splashed over it.

In case one is planning to go in for a new coat of paint that is lighter than the existing colour, a primer should be applied so that it neutralises the older paint. Last but not the least one must ensure that the area to be painted is well ventilated during and immediately after the painting.

Do you get your promised quality?

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:52:00 +0000

You zero in on a development which meets your requirement, fits your budget. You then proceed to raise a loan, garner all your savings and pay for the apartment. It is a proud, satisfying moment when you walk into the Sub Registrar’s office to make the apartment legally yours.

But move into your finished apartment and you realise to your dismay that your residence is anything but satisfying. For, the quality of construction is a far cry from what you had bargained for. You find that cracks and leaks are now part of your life. You learn to contend with bad tiling in bathrooms, leaking sewage pipes, badly aligned doors and windows, and discoloured flooring, amongst an endless list of complaints.

You try to hold the developer accountable only to be told that his liability ends after one year of handing over the apartment complex. When attention is drawn to the promised quality, fingers are pointed towards subcontractors.
Penalty clause

The penalty clause for the subcontractor is again to the tune of one year after completion which means that he is not accountable beyond the one year period. This means the customer pays for the apartment at the current exorbitant price only to be delivered questionable quality with no place to appeal or find recourse.

If developers insist that top priority is given to ensure quality construction, why then are developments increasingly coming up with substandard quality. This is true with not just small builders who are yet to make an impact but with established and highly reputed developers.

Gopal V, Senior Vice-President Projects and Planning, Prestige Group says, “materials like cement, steel, and finishing materials like granite, tiles, sanitaryware are supplied by us to ensure quality. We have developed a series of checklists with a quality control audit system, besides backward integration. Site engineers are assigned to monitor workmanship.”
Reasonable controls

Perhaps the developer has in place reasonable quality controls. A surprising factor is that a few developers have managed to deliver quality to the extent of leaving customers with very little to complain about. Says Guru Prasad, Joint Managing Director, Chaitanya Projects, “While the main structure is subcontracted, finishing part of the construction is done by our own labour contractors. While detailed monitoring is done to ensure quality compliance, our approach is extremely focused on the project in execution. The volume of our projects is kept at manageable proportions to enable higher levels of supervision. But the clinching factor is the level of commitment that successfully eliminates questionable quality.”

Syed Beary, Managing Director, Bearys Group says, “quality can be delivered only when approached with a conscience and commitment. It is also dependent on how you manage to extract quality work from the subcontractor. In a boom time, the volume handled is extensive and given the time constraint, enough focus is not paid to quality and this leads to substandard workmanship. Shortage of skilled labour adds to this. Being proactive limits this occurrence” Perhaps boom time and high volumes add to low quality of constructionPerhaps the scenario may change making quality mandatory with customers gaining the upper hand to dictate it.

You can be floored by this concrete

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:51:00 +0000

Concrete has come a long way from the warehouse floors of yesterday. Now, people are finally warming up to the beauty and versatility of concrete and decorative concrete can be found among others, even at places such as upscale restaurants and charming bed and breakfasts, says Colourcrete Systems which has an impressive line-up of products using decorative concrete technology.

The applications have become wide and varied from kitchen and bathroom countertops, sinks, tub surrounds, tabletops for dining, coffee tables and end tables, interior floors, driveways, patios and outdoor living areas.

Decorative concrete has become the new material of choice for designers and homeowners. One of the most common places the decorative concrete is seen these days is under the feet. Even the elaborately detailed pieces of these can be more cost-effective than marble, slate, granite and others. Decorative concrete flooring is resistant to the wear and tear or decay and unlike other floor coverings, it does not warp or buckle, Colourcrete says. Receptive to colouring methods, it offers the flexibility to cut, pattern and impress, making it possible to produce near exact replicas of even the most expensive building material from granite to marble.

The other features assured by Colourcrete include high capacity to absorb, store and slowly release heat and coolness, easy maintenance, water resistance among others. For those keen on putting specific designs, logos and custom graphics can be recreated on concrete floors.

The products of Colourcrete include Stampcrete which duplicates textures with realism, Overlay-crete that comes as cover-up for existing concrete surfaces, Stain-crete that creates mottled colour tones in the existing concrete, apart from Texture-crete, Stonecrete and Walkcrete.

There really are no restrictions that usually come with other material, for one can unleash one's imagination and get the desired surface with decorative concrete. "Any colour and any pattern and any design can be worked out," says Vasant Sunerkar of Wide Spread (Ph.9866326686), local dealer for Colourcrete.

Asset reconstruction, home loan

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:51:00 +0000

Reconstruction is nothing but converting the loan portfolio into a sort of securitised debt which will be sold to other institutions at a ‘discount’

Many of us would have noticed a statement from the Chairman of H.D.F.C (Housing Finance and Development Corporation Limited) a few days back that there is great scope for development of asset reconstruction in real estate sector. Let us examine this concept and find out the effect of asset reconstruction on the home loan.

While on the subject, we can either start from the lenders end or the borrowers end. If we start from the lender, as all of us know, the lender is always looking for,

* Increasing business

* Higher income from lending

* Quality of assets

* Zero bad debts

* Be the leader in the business segment

When a lender talks about reconstructing his asset, in this case the loans to real estate sector, either he is not happy with the quality of his asset or he wants to get more solid income. The quality of asset can suffer due to many reasons, such as,

* Repayment delays

* Delay in completion of projects

* Cost escalation

* Borrowers at the cross roads
The property sector

No one complained till a couple of months ago when the stock market was ‘up-ish’ on the portfolio. Even the turmoil in the U.S. property market did not worry anyone as Indian market was high on demand, new projects were many and the economy has been buoyant.

The slow down: Where did the slow down start? Is it because of less demand? Is it because of tight money conditions? Dear money policy of the Reserve Bank of India? Growing inflation? …Or a combination of all these factors? Much can be said about all the above.

Effect of slow down on loan segment: When cash generation is affected adversely, repayment suffers and the ongoing projects suffer. New projects will virtually be nil. Cost increase will be the other issue affecting the sector. Cost of land, construction materials, cost of rising labour and service charges are basic problems. Allied problems are widespread industrialisation and conversion of farm lands for housing purposes. The proliferating Special Economic Zones, in spite of strife and struggles from the land owners here and there make land rare for further construction of houses and office complexes.

What do bankers do when their loans are stuck? Banks will have to provide for the low quality assets; Income by way of interest will stop; New lending will be few to come by; Recovery proceedings will have to start.

One way of recovery will be to ‘sell’ the loans before it is classified as non-performing. Loan securitisation is the concept which is now called ‘asset reconstruction.’

The reconstruction process: Reconstruction is nothing but converting the loan portfolio into a sort of securitised debt which will be sold to other institutions and investors at a ‘discount’. Some lenders set up subsidiary ‘holding companies.’ What the HDFC and other major real estate lenders may be looking at is to ‘sell’ the loans to Asset Management Companies (AMCs). Some primary lenders may set up their own AMC to which the home loan portfolio can be transferred. Such reconstructed asset can be treated as a ‘securitised debt’ by extending a Corporate guarantee and sold to other banks or private investors, with attendant risks.

The borrower vis a vis asset reconstruction and securitisation: If the process yields extra income to the lender, the retail borrower has to be given at least a portion of it by way of interest reduction. This is an opportunity for the retail borrower to benefit from reduction in cost.

The bank should in fact obtain the borrower’s consent for securitization. So, here is the benefit for the retail home borrower who should bargain for interest concession.

Sky is the limit here

noreply@blogger.com (harsha) — Mon, 17 Nov 2008 06:50:00 +0000

The buzz continues. The site swarms with architects, engineers and thousands of skilled workforce. The ground is excavated, pillars rise and records are set with slabs too. Lanco Hills at Manikonda which promise to metamorphose the city skyline with tallest of the structures is doing a slab every fourth day!

Spread over 30 million sft which include residential, SEZ, retail and hospitality, the Lanco Hills which is promoted by developers as one of the world’s largest single-phase development and represents a world of luxury, convenience and comfort, is getting ready to make available the IT space for utilisation by June next year. “The residential space will be available after that followed by the commercial and then hospitality,” informs S. Pochender, Lanco Hills CEO.

It is a single phase development and the entire work is on.

Nearly 8,000 skilled personnel were already at the task and similar numbers are to join in next few months. “There were some problems but we overcame them and are on path of progress now,” he says.
Villas

On the progress of work, he says a slab every fourth day is what is being done. This is one step further when compared to some of the best developments across the globe that did it in six days or so.

The developers have now decided to add villas to the project. “Villas have a strong demand these days and we will cater the intrinsic demand. The villas are at a drawing board stage and will be finalised in next two months,” Mr. Pochender says.

The residential towers are to be completed in the range of 27 to 34 floors including duplex and three and four BHK types worked out from 1,900 sft to 4,500 sft.

The Signature Tower that promises to stand well above everything else is pending with the Union Ministry of Civil Aviation. “The entire project will be over in three years time”. While 70 per cent commitment has been made for the residential, three major partners have committed for the IT spaces.

The effects of the economy slowdown are clear, but Mr. Pochender is confident that it will stage a strong come back. “There is a slowdown in enquiries. However, the phase is a passing phenomenon and we are sure it will bounce back,” he says.