Prime city plot sold for 1.75cr in 2002 fetches 600cr 10 yrs later

8-Acre Land Was 'Gifted' Away By MP Govt Company Nauzer K Bharucha TNN  Mumbai: An eight-acre plot in Kalachowkie in the heart of central Mumbai which was sold for a throwaway price of Rs 1.75 crore a decade ago by a Madhya  Pradesh government undertaking to a small-time developer, fetched Rs 600 crore last month.      South Mumbai property redeveloper Haresh Mehta, who was in possession of the property for the past two years, sold it to the Lodha Group, it is learned. The Lodhas have already announced a residential project on this land.      Last year, this paper had reported how the prime property had originally been sold for peanuts by the MP government-owned Provident Investment Company Ltd.  HOW TO BUILD A FORTUNE  • Eight-acre plot was sold by MP govt-owned company for Rs 1.75 crore in 2002  • Last year, buyer pushed for redevelopment of land  • SRA declared entire Ambewadi plot a slum, although it housed legitimate chawl residents  • Residents then complained to MP govt about cheap sale  • But company said it had invited bids in 2002 and sold it to highest bidder  • Plot was re-sold for Rs 600 crore to the Lodha group a month ago  • New owner plans to launch a mega residential project Plot value appreciated 350 times in 10 years  Mumbai:ThesprawlingKalachowkie plot that fetched developer Haresh Mehta Rs 600 crore has a controversial past. Twoyearsago,Mehta'scompany,RohanLifescapes,tookover the redevelopment rights of Ambewadi from Paras Porwal to jointly develop the property. Subsequently, Porwal sold the entire project to Mehta for an undisclosedamount.      In 2010, JP Morgan Chase's privateequityarminvestedRs 160 crore in the first phase of Rohan Lifescapes' Kalachowkie project. JP Morgan's arm was to receive around 26% stake in the project and the dealwaslikelytofetchaninternal rate of return of 24-25% a year. Rohan Lifescapes sold around five lakh sq feet to Lodha about a month ago. Soon, Mehtadecidedtoputtheentire project on the block and found a willing buyer in Lodha. The plot was originally owned by Provident Investment Company Ltd, a MP government undertaking, when it decided to call for tenders in 2002. The highest bidder was Esque Finmark, a firm owned by a politicallyconnecteddeveloper,Porwal.Whatraisedeyebrowswas whenitwasdiscoveredthatthe highest bid was just Rs 1.76 crore, a price of a mid-sized apartment. Although the real estate market was not exactly booming in 2002, the plot could havestillfetchedatleastRs160 acreatRs20croreanacre.      The controversial transaction between PIC Ltd and Esque Finmark came out in the open only last year when some tenants of Ambewadidug up informationaboutthestatusof the land. Residents alleged the Slum Redevelopment Authority "hurriedly" declared the entire 32,000 sq m sprawl as a slum, although they are legitimate chawl tenants. Two Ambewadi housingsocieties, Shri Khapri Baba and Om Sai Darshan,challengedtheslumnotification.Theysaidin1996,2,275 sqmof the32,411sqmlandwas declared a slum. Residents of the tiny slum portion went on toformtheirownsociety,Yashodhan. Now, the SRA has classified the entire sprawl as a slum based on the tag given to Yashodhan,theysaid.      The tenants then wrote to the MP government, asking if it had given a NOC for the sale. MP government officials said they knew nothing about the transaction as it had occurred adecadeago.PICLtdsaidithad announcedthelandsaleintwo city newspapers. It decided to sell the property as it was encumbered and hence not gettinggoodreturns. PLOT OF GOLD: The 32,000 sq m Ambewadi colony at Kalachowkie The TOI report on July 3, 2011

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New Launches Take a Backseat as Realty Cos Look to Clear Inventory

Cos feel new projects could put pressure on pricing in a market already saddled with a lot of inventory

Real estate developers have cut back sharply on new project launches, preferring instead to first try and sell pricier unsold inventory and, in the process, also prevent prices from collapsing in a sagging market. 
Analysts tracking the property market say developers across India have realised that launching new projects could put pressure on pricing in a market already saddled with inventory. "If they launch at a lower price today, their existing unsold inventory will get hit," says Vineet Chandak, real estate analyst with IDFC Securities. Property prices rose sharply in the last one year even though sales volumes fell more than 50%, hit by double-digit interest rates, high property prices and an overall economic slowdown. 
Research firm PropEquity estimates that residential project launches in key centers such as Delhi-NCR, Mumbai and Bangalore have dropped by 30-50% in a year. The firm estimates that new residential project launches fell 49% y-o-y in the Delhi NCR region in the January-March quarter, outpacing a 31% drop in the Mumbai Metropolitan Region. The numbers for Bangalore, Chennai, Pune and Hyderabad stood at 45%, 42%, 44% and 77% respectively. "Developers across the country are delaying project launches to maintain pricing and clearing their unsold inventory that was launched at higher prices," says Samir Jasuja, CEO at PropEquity. Developers, many of whom managed to increase prices in the last year to pass on increased costs of steel, cement and labour, also concede that new launches are being delayed. 
"Slow sales are forcing developers to go slow on launches. Unfortunately, because of high costs, developers do not want to drop prices, which will be the cases with some new launches," says Shakti Nath, managing director of Logix Group. Lalit Kumar Jain, president of the Confederation of Real Estate Developers' Association of India (Credai), the apex body for private real estate developers, also blames delays in getting project approvals for the drop in new project launches. Developers are also having to grapple with delays in the construction of projects already underway because of liquidity issues and these are also affecting new launches. 
Experts say developers have managed to hold on to pricing levels so far, but that could change. "Lesser project launches will keep future supply of homes in check and reduce pressure on prices. But if the market situation continues in the same way, it will surely have an impact on pricing," says Anshuman Magazine, chairman and managing director of property advisory firm CBRE South Asia. "Nobody wants prices to come down as recovering those prices quickly is difficult." 
ravi.sharma4@timesgroup.com 

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Mill workers to get nearly 7k houses in Mhada lottery

Mhada will allot 6,925 houses to mill workers through a lottery on Thursday. Each tenement costs Rs 7.5 lakh and will be handed over to the workers during Diwali. TNN

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Mhada gets only 2 bidders for Dharavi pilot project

Mumbai:A year after it was given the mandate to redevelop Sector V,Mhada has got bids from only two firms in response to its advertisement inviting contractors to build 344 flats as part of a pilot project in Dharavi. The two bidders are Shirke Constructions and Neptune Group.      However, even before the bids are finalized, Congress MP Eknath Gaikwad has warned against opening them. "Three years ago, the state government cancelled bids saying there was inadequate competition despite seven companies showing interest. If the government found seven bids insufficient, then on what grounds can Mhada claim good competition and open the bids when it has received only two responses?'' he argued.      Gaikwad further said: "When the government asked Mhada to redevelop one sector, we were reassured that slumdwellers would be rehabilitated in buildings constructed by bigger developers. None of these contractors has bid and it appears that the conditions have been framed to favour one bidder. We will not allow this to happen. The government will have to call for fresh bids."     If the poor response was not enough, a group of housing societies led by Gaikwad and his legislator daughter, Varsha, sat on a one-day hunger strike recently to protest against the delay in implementation of the Dharavi redevelopment project.      Sachin Ahir, minister of state for housing, said though they have received only two bids, the government would ensure quality work by the successful bidder. "This is just a pilot project. Our aim is to counter claims that the Dharavi project will not take off. We are confident that once the pilot project takes off, we will see reputable companies participate in the bid for the balance area in Sector V. I will try to explain this to Gaikwad,'' said Ahir.

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The Curious Case of Indian Realty

Home prices stay stubbornly high even as demand slumps Gautam Belwal is not much of a movie buff. But these days, he spends most Sundays at his rented home catching some action flick or the other. His weekly searches for a twobedroom house in Noida (in Delhi NCR) have come to an end due to soaring realty prices. And as if to add insult to injury, the youngster suffered a double whammy some weeks ago. The multinational IT company he works for doled out a below-par increment, dashing his hopes of buying a permanent home.  Sumit Joshi, director of Noida-based Real Credit Consultancy, a small firm that helps home buyers get loans from the big banks, reminisces about the days he would be flooded with calls from customers and bankers. Now, he is the one doing the chasing as buyers stay away and a banker client refuses payment due to unfulfilled targets.  Joshi and Belwal have little in common apart from being members of India's increasingly harried middle-class striving to either buy a home or make a living in the fractious, disorderly real estate market. But as prices rise, thanks to inflation and attempts at cartelisation by real estate barons in some parts of the country, and banks turn stingy and overcautious, people like Joshi and Belwal are finding their carefully laid out plans being blown away by this perfect storm.  "Our payments from banks are linked to certain disbursement targets we are struggling to meet because of very slow home sales. Where is the business today?" asks Joshi. Home Loan Growth Slows to 12%  Joshi has seen a 40% crash in business in the past eight months.  But he is not the only one. Across the country, home loan bankers are seeing a sharp drop in business as buyers rebel against high prices by staying away. According to a recent Knight Frank report, Indian real estate prices rose 12% in the past year, the third highest in the world. Reserve Bank data shows housing loan growth slowed to 12.1% for the year ended March 2012 from 16% in the previous year. Also, before real estate prices peaked in 2008, big lenders were managing to grow their home loan portfolio at an annual average of 25%.  "Demand in metros has slowed down in April-May. This is mainly due to high interest rates, which have made buyers hesitant to buy property. There are also very few new projects being announced as builders' communities have been affected by high interest rates too," said VK Sharma, CEO of LIC Housing Finance, the country's third-largest housing finance company.  Loan growth at LIC Housing Finance slipped to 17% in 2011-12 from 28% a year ago, forcing the company to set a lower target of 20% for the current fiscal.  State Bank of India's housing loan disbursement grew 15% in 2011-12 against its target of 20%. The country's largest lender sanctioned Rs 28,000-crore of housing loans last fiscal.  "During January-March, there were hopes of business picking up, but April-May has been slack. Typically, this period is slower, but this time around it was slacker than last year. FY2013 has been quite disappointing due to both local and macro-level issues," said a senior official of SBI.  He also highlighted that there are markets like Mumbai, NCR and Bangalore that have unabsorbed supply, and in some cases, it is close to two years' oversupply.  But what is surprising in all this is that prices are showing no signs of coming down. Though consumers are shying away and there is enough evidence of this and volumes have dipped, debttrapped developers are still not ready to reduce prices of apartments.  For the quarter-ended March, prices in the National Capital Region rose 33% while Mumbai and Bangalore posted 17% and 8% jump, a recent report from Liases Foras Real Estate Rating & Research showed.  "Demand has slowed down, number of transactions is falling. In the top 10 cities, sales volume has dropped 10% in the last one year. Mumbai is the worst-affected market with a 40% decline in transactions, but prices have remained more or less stable across these regions," said Binaifer Jehani, director, CRISIL Research.  Some Mumbai-based developers such as Kalpataru Group, Oberoi Realty, Lodha Developers, Wadhwa Group and Nirmal Lifestyle have actually raised prices in the last few months by more than 10% in Mumbai's central and western suburbs as well as in south Mumbai.  Although the hottest property market has an inventory level of over 120 million sq ft, equivalent to 40 months' average sales volume here, not much of this is available for immediate possession. This is helping developers with projects that are close to delivery and resale flat owners seek premium for their units.  The NCR, being the largest residential market, faces challenges at unsold inventory levels. However, the market has shown stability and there has been no drastic dip in the sales velocity in 2011-12.  In the most stable property market of Bangalore, too, buyers are either deferring their decisions or looking at suburbs to buy properties.  "There's a demand-supply mismatch. Only 20-25% of the properties in Bangalore are in the price range of Rs 35-70 lakh category while the current demand is driven by this segment. Around 70% of the buyers are looking to purchase properties in this bracket," said BM Poonacha, head-land and special projects, LJ Hooker Project Marketing India.  While apartment sales in the price range of Rs 35-70 lakh have grown 20-25% in Bangalore, there's a drop in demand for property priced over Rs 1 crore, he said.  Builders are blaming the civic and urban development authorities for delay in approvals. "Most of the launches are not taking place as there are no approvals coming from the civic authority. Once approvals gain momentum, we can expect project launches to increase, and that can lead to some softening in housing prices. There's no possibility of any cartelisation among developers as each one is incurring huge interest cost for any delay in project launch," said Paras Gundecha, president of Maharashtra Chamber of Housing Industry.  Others agree, but what Gundehca is not saying here is that builders are also unwilling to bring down prices and are either delaying launches or selling noncore businesses in order to raise cash and build a cushion for themselves.  "Reducing prices might not help in reviving the demand beyond a point, as buyers would expect further drop in prices and defer their buying decisions. Rather, developers are going slowly with their launches," Jehani said.  According to her, developers prefer to ease their debt burden by selling land parcels or non-core assets rather than directly reduce prices of their projects. They also feel there's no scope for any price reduction in the first place.  By going slow with their launches, builders might open themselves to charges of cartelisation. But so far, very little has been proved and the Competition Commission of India (CCI) did not respond to an ET query on whether a probe was underway on alleged cartelisation by builders.  "All input costs have gone up, including government taxes like property tax and development charges. Labour cost has shot up nearly 60%; cement and steel prices have also increased over 30% in the last one year. There's a limit up to which developers can take the hit," said Lalit Kumar Jain, national president of the Confederation of Real Estate Developers Association of India (CREDAI).  "It's impossible to expect prices to soften hereon, but at the first opportunity, prices should move up 10-15% to compensate developers against the input cost rise," said Jain.  "Developers' margins are clearly under pressure due to rising costs. Operating margins are now around 30-35%. This is a reasonable number to be in the business, but if we remove the rental income some of the developers are earning from their commercial properties, it would move a lot lower," said Aashiesh Agarwaal of Edelweiss Securities.

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Will 2,000cr redevelopment plan be dusted?

Mumbai: With Thursday's fire causing major damage to the eightstworied main building of the state secretariat, it appears that the Rs 2,000-crore Mantralaya makeover project, seriously discussed in 2009, could once again see the light of day. Or at least, it will be discussed for a while until the building is made habitable again.      The project envisaged by the state public works department has been mired in controversy, the last being the Opposition's allegation that the government had declared Mantralaya "a slum" to get additional FSI. Following the allegations, the government had said the project stood scrapped. "This was an old plan and stands scrapped even today," said state home minister R R Patil on Thursday when asked if the fire was a possible sabotage to revive the Mantralaya makeover project.      According to state officials, the project tender was bagged by construction and infrastructure firm Indiabulls. The project was intended to redevelop the main Mantralaya building, the administrative building opposite it and approximately 50 row bungalows. This would have made way for a massive tower to come up over a period of five years. The builder would get four to five acres of land in lieu of the redevelopment.      The state, in its approval application, had said it would develop the building under Clause 33(10) of the Development Control Regulations, a clause for slum redevelopment.      The plan, though, was declared unviable by PWD minister Chhagan Bhujbal. He had said that the state, in the wake of the allegations, would redevelop the building on its own. However, even that plan did not take off.      "It is, in a way, a blessing in disguise. These proposals haven't materialized because the fire safety then would have been a concern in a 30-to 40-storey building, as was being planned in the makeover project. If the fire in this building is proving to be tough to handle, imagine firefighting in that tall a building," said a state official.  BACK ON BOARD?  The Proposal      Redevelop the main Mantralaya building, the administrative building opposite it and approximately 50 row bungalows      A massive 30- to 40-storey tower would come in their place over a period of five years      The builder would get four to five acres of land in lieu of the redevelopment  The Obstacles      The Opposition alleged that the government had declared Mantralaya 'a slum' to get additional FSI      Following the allegations, the government had said the project stood scrapped

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Registration may be a must for 11-month leases

New Delhi:In a move aimed at putting property owners and tenants on stronger legal footing in case of disputes, the government may make it compulsory to register even those lease documents dealing with periods of less than one year      An amendment proposed to the Registration Act, 1908, seeks to redefine 'lease' to remove the provision stating that those for a period under one year need not be registered. The amendment would,  however, exempt lease agreements pertaining to an amount which is below the 'floor price'.      Groups like landlords have been exploiting the provision and avoiding registration by using methods like going in for 11-month leases. Conversely, there are cases of land grabbing or squatting where a nonregistered lease puts the owners on a weak wicket.      Sources said making registration compulsory for every lease could, however, hinder business because of sheer volume and the government hasthought of a 'floor price' to make it binding. States are likely to be given the freedom to decide the floor price.      The move is part of the changes thatthe Union rural development ministry has proposed to the Registration Act and are being vetted by law ministry. The government may also make it mandatory to register powers of attorney. The transfer of property without registration causes loss to exchequer and is also a big source of disputes.      In another change, the registered documents relating to moveable and immoveable property would no longer be secrets in the registrar's office. The changed law may throw the Book 4 open for general viewing. Book 4, or the Miscellaneous Register, is a compendium of all registered documents of certain value which is not allowed to be accessed by the general public. Sources said it would enable citizens to verify facts like ownership details of certain properties.

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Clear old-bldg redevelopment pleas fast: HC

Mumbai: In a major push for the redevelopment of old, dilapidated buildings, the Bombay high court has paved the way for CRZ permission and litigation in such cases to be put on the fast track. A division bench of Chief Justice Mohit Shah and Justice Nitin Jamdar cited that around 500 applications were pending for approval before the Maharashtra Coastal Zone Management Authority (MZCMA). They also cited a statement by former municipal commissioner Subodh Kumar on how red tape was stymieing the redevelopment of over 15,000 old buildings in the island city.      The judges said the present system had resulted "in undue delay in granting environmental clearances even in cases of reconstruction on small parcels of land having dilapidated old buildings".      The court has directed the state and the MZCMA to consider setting up additional committees to hear applications for CRZ clearance for redevelopment of old buildings on small plots in Mumbai. "Such committees may meet at least once in a week and the recommendations of the committees may be placed before the MCZMA at its immediate next meeting. The committees should consider such applications expeditiously and preferably within two months from the date of receipt," the judges said.      The high court also ordered that courts in Mumbai city shall give priority to cases involving redevelopment of old buildings.      The court was hearing a petition filed by a developer who is undertaking the redevelopment of Ramkrishna Niketan at Shivaji Park. A pre-1940 cessed building, it is 500 metres from the high tide line and its managers were asked by the authorities to take clearance from the MCZMA since it was in a CRZ II area.  GROUND REALITY  • 15,000 old cessed buildings in island city awaiting redevelopment  • Only 3% have been redeveloped so far  • 500 applications are pending with the CRZ authority

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‘Civic body yet to recover 656 cr from developers’

Mumbai: From purchasing health machinery at higher cost to underbidding in civic tenders, financial malpractices seem to have taken precedence in civic corridors. Following a point of order raised by senior Congress leader Mohsin Haider, the civic administration on Monday said it is yet to recover premium dues worth Rs 656 crore from 45 developers who redeveloped properties on BMC land in the island city since 1996. Corporators have slammed the civic administration for causing such a huge loss to the civic exchequer. 

    According to the civic administration, the 45 developers who have defaulted were last sent a notice in January. The developers have the choice of handing over the flat or pay a premium to the corporation. "We are taking this seriously. Of the 45 developers, 21 have responded to the notices and their cases are being heard. The recovery of dues will soon be made. Action will be taken against those developers who fail to respond to the notice," said Milind Sawant, deputy municipal commissioner. 
    In the improvements committee meeting held in April, Haidar had raised a point of order regarding the recovery of premium dues from builders for redevelopment projects as per sections 33 (7) and 33 (9) of Development Control Rules, 1991. 
    As per the DCR, the developer is supposed to cough up 10% of the premium amount at the time of issuance of letter of intent, while the remaining 90% is supposed to be paid before procuring occupancy certificate from BMC. "In most cases, the developer never comes to the BMC for seeking the occupancy certificate (OC). The flats are sold much before that and once the new occupants enter the flat, the BMC will turn up to check the OC. The developers in this case go scot-free without paying the corporation the premium," said Haidar. 
    The defaulting amount is excluding the interest rate which is imposed by the civic body. "If the interest rate is added then this figure would rise beyond imagination. The civic body should take the developers and architects involved to task. Once the projects are completed, the developers dissolve their existing companies and float new companies. Meanwhile, the civic body keeps waiting for the company to turn up for the OC," Haidar said. 
    Dr Ram Barot, improvements committee chairman, said, "It is a huge loss to the civic exchequer and strong action should be taken. The civic administration hasn't been serious about this issue. If the developers do not respond to the notice sent by the civic body, then they should be blacklisted."

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No HC relief for Kharghar builder

Mumbai: A second attempt to stall the demolition of portions of the multi-storey tower, Green Heritage, at Kharghar proved futile on Monday with the Bombay high court refusing to stay its judgment dismissing the plea to regularize unauthorized flats and shops in the building. 

    Hearing a plea by Abhishek Builders, seeking time to approach the Supreme Court and explore options to regularize the building, a division bench of Justice Sharad Bobade and Justice Mridula Bhatkar gave the developer an option to stave off the demolition squad's hammer by submitting an undertaking to the court that the petitioners would voluntarily pull down the illegal portion of the building if the apex court rules against them. 
    However, R Soni, counsel for the developer, expressed inability to give such an undertaking as the possession of the flats had been handed over to third parties. The court subsequently dismissed the builder's application. 
    The top three floors of the 21-storey tower is facing demolition over unauthorized constructions, allegedly made by the developer. The building—a ground plus 21-storey structure—comprises four wings with two flats on each floor of each wing. As per the initial plans approved by Cidco, the developer was allowed to construct 97 residential flats, 20 shops and three floors of office space with six office units. 
    According to Cidco officials, the builder illegally extended the construction area of each floor horizontally by 1.5 metres, thus converting 2,300 square metres above the allowed floor space index into saleable space. This resulted in the construction of 160 residential flats, 38 shops and an extra floor of office space. 
    Cidco has refused to regularize the unauthorized construction by loadingFSI of adjoining plots. The high court last week upheld the Cidco order and refused to set aside the demolition notices. 
    On Monday, advocate Soni claimed that plans were afoot to buy land adjacent to the building so that the construction rights of that plot could be used to regularize the unauthorized construction in Green Heritage. The advocate also sought time to file an appeal in the Supreme Court. Cidco's lawyers sought an undertaking that the petitioner would voluntarily demolish the unauthorized portions in case they failed to get it regularized. When the court sought a response from the petitioner, the developer said they could not sign on such an undertaking. 
Residents of 'illegal' tower plan to move SC 
Navi Mumbai: The residents of Green Heritage are planning to move the Supreme Court to protect their property from demolition. While they are yet to confirm when they will move the SC, they said they have "become victims over violations committed by the builder, coupled by the ignorance on part of the Cidco officials". 
    "Though we respect the HC verdict in the case, we are disheartened as we stand to lose our flats which were purchased by our hard earned money," said a resident. 
    Resident G H Manas said: "Last week, an unnamed Cidco official had told TOI that the top floors of Green Heritage may be demolished. We protest against such sweeping statements and want to know which Cidco official said so." -Vijay Singh

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State to aid coastal slum makeover

Mumbai: The skyline in coastal areas could soon witness a makeover. Over a year after the new coastal regulation norms lifting restrictions on the FSI for redevelopment of slum colonies in coastal stretches, the state government on Monday held deliberations on the model for revamp. 

    There are about 300 slum pockets on the coast between Cuffe Parade and Dahisar. While the CRZ lifted FSI curbs for slum redevelopment in these areas, a condition that the state government will have to partner in the redevelopment and hold a minimum stake of 51% was imposed. 
    On Monday, during a meeting chaired by the CM, the Shivshahi Punarvasan Prakalp, a state government undertaking for slum redevelopment, was named as a special purpose vehicle for the state's role in redevelopment of slums in CRZ areas.

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Lodha buys Washington House Pays 375Cr For US Consulate Property

Mumbai: Nearly two years after it put up the property for sale, the United States consulate is learned to have finally sold Washington House, its three-storey residential building at Altamount Road, to Lodha Group for over Rs 375 crore. The city-based realty developer is believed to have already paid a token amount of over Rs 50 crore to the consulate. Talks are on with Tata Realty and other bidders for the sale of Lincoln House, which housed the office and residence of the US consul general at Breach Candy. 

    The three-storeyed Washington House covers 2,702 square metres. It is listed as Grade III property and falls under the Coastal Regulation Zone II. Property rates in the immediate vicinity currently range between Rs 60,000 and Rs 70,000 a sq ft. Lodha Group will demolish the building and replace it with a luxury residential tower. 
    Highly placed sources said the deal was reached about a month ago but had not been inked as the consulate is yet to receive the go-ahead from state and central authorities, including the ministry of external affairs. Lodha bid in tune with market reality 
Mumbai: Speaking about the reported sale of the US consulate's Washington House on Altamount Road, Abhishek Lodha, managing director of Lodha Group, said, "We haven't concluded the deal yet.'' Anshul Jain, DTZ's chief executive officer, the global property consultant for the transaction, refused to comment. 
    The bidding memorandum had said that the US government expected to procure clearances from the MEA and state and local authorities for the sale within 90 to 180 days of getting the confirmation letter from the winning bidder. However, if the clearance did not come through within this period, the memorandum said, the US government could cancel the transfer of property and return the money to the bidder or reach a mutual decision to extend the time limit for obtaining the said approval from the ministry of external affairs. 
    Property sources said that Lodha's bid, close to the reserve price of Rs 350 crore, is in tune with current market conditions. The Altamount Road property is believed to have received three bids. "There is always going to be an appetite for property in these prime locations,'' said Anshuman Magazine, managing director of CBRE, global property consultant. 
    Altamount Road winds up the hill off Pedder Road and is rated as the 10th costliest street in the world (2010 Wealth Bulletin). Breach Candy, Carmichael Road, Nepeansea Road and Altamount Road have always been prime residential locations in south Mumbai where property prices range between Rs 45,000 and Rs 85,000 a sq ft.

Washington House at Altamount Road used to house consulate officials before the US decided to hive off the property

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Rental housing FSI may be lowered to 3

Mumbai: The state government's affordable rental housing scheme may get anFSI of three instead of four for projects that will come up within municipal limits if the latest recommendation by a committee implemented. This will make the projects low-rise and easier to maintain. 

    The committee, comprising Mumbai Metropolitan Region Development Authority(MMRDA) commissioner Rahul Asthana, urban development department secretary Thomas Benjamin and principal secretary (housing) Gautam Chatterjee, has also recommended an FSI of one in Urban 1 and Urban 2 zones, which fall in areas being developed as growth centres by the MMRDA. —Ashley D'Mello

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GOVINDA TOWER CRASH CASE HC tells Mhada to be sensitive

Mumbai: The Bombay high court on Wednesday lambasted the Maharashtra Housing and Area Development Authority (Mhada) for being 'insensitive' to the plight of survivors of the Govinda Tower crash. The seven-storeyed building had collapsed on August 3, 1998, killing 37 persons in Bandra (E).      Adivision bench of Justices Sharad Bobde and Mridula Bhatkar was hearing a petition filed by residents in 2001. The petition said although in 2004 the HC directed the building to prove plans and give permission for redevelopment. Mhada was directed to consider the development in accordance with development control regulation 33 (5)-2 C as it was an old proposal of the Mhada layout and as a special case, as the petitioners were victims of the building which collapsed and the survivors were homeless. But it was made clear that it will not be a precedent for other cases.      Mhada opposed granting of permission for the building to be reconstructed as per old guidelines. "It will have serious repercussions,'' said advocate P G Lad. He said the proposal will be processed under present guidelines DCR 33 (5) 2 C (1), which are on a sharing basis for grant of additional floor space index and not on premium. Mhada used to charge a premium for granting additional FSI, but now it is asking for a share in additional FSI. be reconstructed by its hotelierowner Dilip Datwani and builder Jairam Chawla in a ratio of 75:25, not a brick had been laid. They alleged that the duo sold out their share of the property to a new developer without court permission. The HC sent the matter for mediation to resolve differences on February 10, 2012.      More than 82% occupants agreed to settle the issue and agreed to the developer. In the minutes of the consent terms signed, the Brihanmumbai Municipal Corporation (BMC) was directed to expeditiously ap-The judges wondered why it could not be considered as a special case. "Be sensitive. Don't be insensitive as an authority. People have lost lives due to complete innocence. For years they are knocking on the court's doors,'' said Justice Bobde. Lad sought time, as he had received acopy of the minutes of the consent terms, and wanted to consider them. The judges will pass their order on Thursday.

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Navi Mumbai building gets ‘illegal’ tag, 83 families to lose homes

High Court refuses to help flat and shop owners of Green Heritage building, says it will not direct planning authority to regularise illegal construction

More than 100 flat and shop owners in Navi Mumbai — who were denied occupancy certificates by local authorities — suffered another setback on Monday when the Bombay High Court refused to give them any reprieve. A division bench of Justices AM Khanwilkar and SS Shinde dismissed their petitions, saying the court would not use its special powers to regularise unauthorised constructions. 

    On April 9, City and Industrial Development Corporation (CIDCO), the planning authority for Navi Mumbai, refused to give the certificates to 83 flat and 18 shop owners at Green Heritage complex, Kharghar. Officials alleged that the builder had violated norms by developing more residential and commercial space than sanctioned. 
    The owners, however, claimed that they were not aware of the violations and had purchased the properties legally. An occupancy certificate is a document that confirms a building's compliance with construction codes and other laws, declaring it to be suitable for occupation. It is mandatory for all property buyers to obtain this clearance. 
    "Individual rights and interests are subservient to the concerns for public health and safety," the court said while hearing the owners' petitions that sought regularisation of the affected properties. "If they (property buyers) are carried away by the brochure and the public advertisements and do not make such inquiries, then they cannot turn around and seek assistance of the courts."
    Green Heritage, a project by Abhishek Builders and Developers, was given permission to create 97 flats, 20 commercial establishments, and a three-storey office building. The company, however, constructed 160 residential flats, 38 shops and a four-storey office building. The unauthorised constructions came to light during an inspection by CIDCO, which then turned down applications for occupancy certificates. 
    The affected owners told the court that CIDCO should not withhold the clearance as they had already secured approvals from the fire department and other civic agencies. 
    Justices Khanwilkar and Shinde, however, cited an earlier judgement: "Ultimately, if they purchase flats without bothering to make inquiries and seeking details of the construction at site, then they are themselves to blame." 
    They further noted: "In such cases, flat purchasers are aggrieved but their interest cannot override those of the public at large. When science and technology have advanced to a great extent and enactments such as Right to Information are in place, it is not unreasonable to expect flat purchasers to avail of the same and seek details of construction before booking flats." 
    The court added that there are laws for redressal of individual grievances. "However, they cannot seek a writ directing the planning authority to regularise illegal constructions. That makes a mockery of the law," it said.

CIDCO denied occupancy certificates to 83 flat and 18 shop owners at Green Heritage complex at Kharghar, Navi Mumbai, alleging that the builder had developed more commercial and residential space than permitted

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Govt wants Mum devpt model in smaller towns

Mumbai: With families hunting for their dream homes in smaller towns in Mumbai's periphery owing to soaring realty prices and paucity of space here, the state government has decided to amend norms to ensure "planned" development of these new pockets.      The government plans to apply building byelaws applicable in Mumbai and other municipal corporations to towns categorized as A, B, C municipal councils.      A government-appointed panel of town planning experts has recommended extension of floor space index (FSI), transfer of development rights (TDR), free-of-FSI, and fungible FSI norms, which are currently applicable to only municipal corporations, to municipal councils.      The state urban development department has accepted the report, and has submitted a proposal for approval to CM Prithviraj Chavan. Like in Mumbai, a no-objection certificate from the fire department would be necessary for highrises. Higher FSI has been recommended for the construction of schools and hospitals.

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Sahara India arm launches low-cost housing scheme

Lucknow: Sahara Infrastructure and Housing, the real estate arm of Sahara India Pariwar, on Sunday launched the group's first low-cost housing project in India. To be branded as Swapna City, houses built as part of the project will cost between Rs 5.5 lakh and Rs 12 lakh and will come up across 366 Tier-II and Tier-III cities in India. Houses built under this project will range from 285 square feet studio apartments to one and two bedroom sets.      Sahara India managing worker and chairman Subrata Roy said the projects are expected to be completed over the next three to five years. "This affordable housing project is our first such venture. With cities feeling the pressure to cater to supply mass-housing schemes, this project will come as a relief to people who belong to low-income groups," he said. Roy also said seven to 10 affordable housing projects were on the anvil in the National Capital Region, near Dwarka, and Ghaziabad where the group has already acquired land.      The group also announced the launch of 10 lifestyle township projects, nine self-sufficient integrated townships under the Sahara City Homes brand and one premium residential apartment cluster called Sahara Grace, which were inaugurated across Pune, Bareilly, Jodhpur, Gwalior, Aurangabad, Solapur, Porbandar, Kashipur and Katni on Sunday. After Kochi, the second premium residential apartment cluster in Cuttack in Bhubaneswar was also launched.      Announcing the group's future plans in the real estate business, Roy said Sahara India would introduce 58 real estate projects in the current fiscal. Out of 58 projects, 21 will be township projects, while 37 projects will belong to the affordable housing segment.      Sahara Infrastructure and Housing would also, in the future, foray into rural housing schemes. Roy also said the projects will be maintained by the group for the first 10 years after being developed; maintenance will, subsequently, be handed over to the housing societies. Sahara India managing worker and chairman Subrata Roy

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Adarsh effect: Netas shun cheap MHADA govt flats

Mumbai: As a direct fallout of the Adarsh and Rajyog housing societies imbroglios, politicians seem to have lost interest in acquiring more than one flat in public housing schemes. 

    At the recently concluded lottery for the Maharashtra Housing and Area Development Authority (Mhada) flats, four of the eight locations where flats were reserved for elected representatives received no applications; few applied for houses at other locations. 
    A similar trend was noticed in the lottery for 4,034 Mhada flats held last year. In 2011, no applications were submitted at five of the 11 locations, moreover, there were fewer applicants for 78 flats that were reserved for elected representatives. 
    Senior officials said it was unusual that there were few takers forMhada homes reserved for politicians. "It may be possible that most legislators already own a house in Mumbai and hence won't apply again," said an officer. "After the recent housing scams, we assume no one wants to risk it anymore," he added. 
    Stung by poor response, the housing authority is planning to eliminate the economically weaker section (EWS) and low-income group (LIG) flats from the quota reserved for politicians. However in the 2010 lottery, legislators Manikrao Mhaske and Kalyanrao Patil bagged two Mhada flats each, after they applied in both HIG and LIG categories in contravention of norms. During the tenure of CM Ashok Chavan, Nitin Raut, Aneez Ahmad, Harshvardhan Patil, Bhai Jagtap and Rajesh Tope among others were given flats at throwaway prices in Mhada's Rajyog society in Versova, despite owning one or more apartments in Mumbai. 
    This year, there were no takers for the 14 EWS dwellings and merely three politicians applied for LIG flats in Mira Road, Malwani and Charkop, thirty-nine applications from politicians were received for six reserved flats in the Middle and High Income Group category in Gorai, Charkop and Powai. Nearly 51% of the total flats put up on sale by Mhada are meant for the public. The remaining are reserved for Scheduled Castes, defence personnel, Mhada, state and central government employees, journalists and the physically challenged categories. 
    A total of 2% flats are reserved for serving/ex-elected representatives. Under the rules, if flats in a reserved category don't get enough applicants, they can be released to the general section.

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Builders Go Slow on Big Shopping Malls

More than a dozen projects put on hold due to rising costs and subdued demand from large retailers; some developers even shelve projects

Big shopping malls are fast losing sheen among builders, who have put on hold a number of projects across the country due to rising costs and dwindling demand in a slowing economy. 

More than a dozen projects that were due for completion this year have been put on hold, even as just a third of the anticipated supply of 24.27 million sq ft retailing space in 2011 was eventually executed. 
India's largest realty firm DLF has shelved a luxury mall in Mumbai and another in Chennai to unlock value, while other builders such as Sheth Developers, Nirmal Lifestyle and Sonal Group have deferred the completion of their new malls by two to four quarters. Developers such as RMZ, Ozone, Landmark, Embassy Property Developers and K Raheja have also deferred projects by a year or put them on hold until the retail market revives. 
Even as the demand from big retailers has softened, construction and borrowing costs have risen for developers. Further, the returns from shopping malls are much lower compared with office complexes. 
"It is a difficult time and mall development activities are not as high as three years ago," said Vishal Mirchandani, CEOretail at Brigade Enterprises. "Retailers are cautious and will try to hold expansion even if they have made commitments." 
Bangalore-based Embassy Property Developers has delayed by two quarters its 189,762 sq ft Embassy Galaxy Mall — earlier expected to be completed by the end of this year — and will target luxury and premium brands. "There have been delays due to operational issues," said the company's chairman and managing director Jitendra Virwani. 
Inorbit and Vega malls in Bangalore are facing similar delays, while Orion and Signature malls have became operational over the past few months, nearly two years behind schedule. 
"Delays in store openings impact a retailer's revenues and scale, which are critical for its viability," said Viney Singh, managing director of Max Hypermarket India. At present, there are 155 shopping malls across the country with a combined retail space of 60 million sq ft, of which 8.04 million sq ft was added last year. In Mumbai, 1.5 million sq ft of mall space is expected to be added over the next 12 months. 
"The retail mall as an asset class is difficult to market compared with easier asset classes such as residential and commercial properties. Hence, the developers are focusing more on residential and not venturing into the high-risk retail mall space," said Anshul Jain, chief executive officer of DTZ India. 
According to rating agency Crisil, as much as 96 million sq ft of retail area is expected to be added over the next three years, against the demand of 34 million sq ft, spelling a significant mismatch. 
"Malls constructed in over-supplied micro markets have not seen much success in terms of occupancies. The anticipated supply of the projects that are under execution is higher than the actual demand," said Jaideep Wahi, director-retail services at Cushman & Wakefield India. 
In Delhi and the National Capital Region, a few developers are adopting a mix-use approach to pare their risks and announcing projects that have residential, commercial and retail segments built into their designs. "With hopes of further liberalisation in multi-brand retail, the real estate sector is hopeful of demand pickup in the coming times. Going ahead, policy impetus will drive demand in retail segment," said Omaxe chairman and managing director Rohtas Goel, who is targeting smaller cities such as Patiala, Ludhiana and Lucknow to launch his retail venture. 
Indian retail industry has seen moderate growth even as same-store sales have slowed down. While most retailers clocked between 20% and 30% growth in the quarter to March, sales from stores that were operational last year grew in single digits and are unlikely to improve this fiscal. 
"For retailers, sales-per-sq ft is the most important parameter before setting up their store. Rentals in malls have gone up by 14% over the past year, making it difficult for retailers to operate," said Susil Dungarwal, chief mall mechanic at Beyond Squarefeet Advisory, a boutique mall consultancy firm. Retailers are reducing the size of their stores to increase efficiency and profitability, Dungarwal added. 
Retailers are now looking to set up standalone stores ranging between 750 sq ft and 1,000 sq ft as against 2,000-2,500 sq ft earlier.

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Good infrastructure and close proximity to office spaces has led to an increase in the demand for housing in Bandra-Kurla

A VALUE PROPOSITION

After Nariman Point and Fort, Bandra-Kurla Complex (BKC) has emerged as the biggest commercial hub in the last few years. As locations turn into large office destinations, residential property also evolves rapidly in the vicinity. This is also the main reason why people want to stay in BKC; due to the closeness of both commercial as well as residential spaces. 

    Diipesh Bhagtani, Executive Director, Jaycee Homes Limited, says, "The area has come up very well. Moreover, the rise in commercial centres and spaces at BKC has led to an increase in residential as well. For BKC, a master plan has been created that consists of more commercial development than residential. Several schools, commercial complexes and hotels are expected to come up here in the near future. The rates for the residential areas start from Rs 15000 to nearly 35,000 just on the carpet area." 
    In terms of connectivity, BKC is very strategically located; proximity to retail outlets in Bandra West and LBS Marg and existence of good schools and hospitals has also benefited the area. Andheri and Goregaon in the west and Kurla and Ghatkopar in the central suburbs can be reached within a half-hour drive. The upcoming or completed residential projects are all targeted at the premium range of buyers. 
    Dr. Samantak Das, National Head, Research & Advisory Services, Knight Frank (India) Pvt. Ltd , says, "BKC and off-BKC locations have the most obvious requisite of an ideal place to reside i.e. being very close to the workplace yet away from the peak time hustle as in the case of other commercial locations of Mumbai. Moreover, the region, though being a commercial hub, still has ample green cover, which also attracts residential owners." 
    He adds, "Upcoming projects at BKC offer many facilities like swimming pools, health clubs, club houses and ample parking space. However, most of the buildings in Bandra West are standalone with few amenities including parking space. These days, buyers are looking for these facilities. As a result, I do see a lot of demand for residential properties in BKC. Residential projects in and around BKC are priced in the range of Rs. 17,000-27,000 per sq.ft. It is observed that the majority of property owners in this location are end users. The future of the residential market in BKC is quite bright." 
    Similarly, a spokesperson on behalf of Sunteck Realty Limited, says, "There is a huge interest for residential spaces at BKC. Today, everyone wants a pie of BKC because it offers a number of benefits. A large number of organisations have established themselves here, so offices are now just a short walk away instead of a two to three hour long drive. There are world-class schools and shopping complexes coming up. Residents have all their requirements and needs right next to them. When compared to residences at South Mumbai, the ones at BKC are much more preferred because of the proximity. The residential rates are more than Rs 40,000 per sq. ft. at BKC." 
    Signature Island is a project at BKC. This project offers high-end luxurious apartments to its residents of 7000 and 11000 sq ft. It also consists of modern amenities and facilities like gymnasium, swimming pool, health care centre, among many other things. 
    International schools like the Dhirubhai Ambani International School and the American School and specialised hospitals like the Asian Heart Institute have changed the face of the area. 
    Bharat Dhuppar, CMO, Omkar Realtors and Developers, says, "There has been a demand for residential projects in BKC as it is centrally located. The infrastructure is good. Moreover, the area is emerging as a financial hub and has several leading banks, NSE and leading luxury hotels that have established themselves here. 
    "There will be more development in the area, in terms of infrastructure and other amenities as regions like Kurla and Kalina that are surrounding BKC are also witnessing growth. Phoenix Mall is one such example. Adding to this is the prospects of development in Dharavi." 
    Although the area is developing quite rapidly, there are still a few infrastructure projects that could take the area to a different level altogether. Says Ramesh Nair, Managing Director- West, Jones Lang LaSalle India, "The Metro project announced in 2008 would be a game changer; however, this project has been drastically delayed. The monorail project, now scrapped, could have been a significant infrastructure boost for Bandra Kurla-Complex." 
    He adds, "Various infrastructure initiatives like Santacruz-Chembur Link Road will help adjacent areas around BKC such as LBS Road, Sion, Kurla, Kalina and Mahim to develop, posing competition for BKC. Many senior executives who work in BKC are expected to shift their residence to Bandra, driving up residential prices in Bandra. With the Diamond Bourse soon to be operational in two million square feet of the premises, the number of people at BKC will increase dramatically." 
QUICK 
BYTES 
    BKC AND SURROUNDING AREAS ARE SEEING RESIDENTIAL GROWTH 
    NEW PROJECTS HERE OFFER FACILITIES SUCH AS SWIMMING POOLS AND PARKING

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State defers slum transfer plan for now

Mumbai: The government has deferred a decision on a proposal that would make more slumdwellers eligible for rehabilitation.      In the run-up to civic polls, CM Prithviraj Chavan, who also heads the housing portfolio, had announced the decision to relax the eligibility criteria for slumdwellers in new redevelopment projects. Recognizing a slumdweller's right to transfer a slum structure, an amendment was to be introduced in the development control norms. While the existing norm allows only the original inhabitant of a pre-1995 (January 1) slum structure to be rehabilitated, the proposed modification will make new occupiers (including those who settled after the January 1, 1995, cut-off date) of such slum structures eligible for rehabilitation upon payment of a transfer fee.      The proposed amendment seeks to limit the eligibility criteria to a structure's existence before the cut-off date. The move is expected to allow 15-20% more slumdwellers to seek rehabilitation in redevelopment schemes.      In the post-election phase, the state is, however, dithering on a final decision in this regard. According to sources, the CM is concerned regarding the possibility of a further proliferation of slums and slum structures.      The CM reportedly expressed this concern during a meeting with minister of state for housing Sachin Ahir and top officials on Friday. Implications of the move on a related case pending in the apex court was also discussed. Chavan ordered officials to prepare a detailed inventory of slum structures and slumdwellers. It was decided to rely only on the 1995 electoral rolls for preparation of the list. While the CM has directed officials to assign top priority to the assignment and employ expert agencies to assist in the task, sources said this exercise could take more than a month. According to sources, no consensus could emerge on other technical questions related to the move, including the issue of multiple transfers and slum rises—a term used to define shanties having two or more levels.  Decks cleared for Dharavi redevpt T he Dharavi redevelopment plan will finally take off. The state government has decided to expedite the process of inviting tenders for starting work on Sector 5 in Dharavi, which will be developed by Mhada. TNN

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NO WATER FOR MHADA FLATS AT MIRA ROAD

Owing to scarcity of water supply MBMC Mayor has expressed the corporation's inability to provide water connection to new flats constructed in Mira Road A WEEK after 1,726 lottery winners are rejoicing after winning flats in Maharashtra Housing and Area Development Authority's (MHADA) annual lottery scheme, water woes are likely to dampen their spirits. The housing body has received a letter from the mayor of Mira-Bhayander Municipal Corporation (MBMC) stating that his corporation won't be able to supply water to the MHADA flats allotted to lottery winners in Mira Road. Last week MHADA allotted 2,593 homes of which 1,726 are located in Mira Road. Tulsidas Mhatre, mayor of MBMC, said, " I have written a letter to MHADA clearly indicating to them that MBMC is not in a position to supply water to new dwellers. We had also warned them earlier about the same before they conducted the lottery, but they still went ahead with the allotment. We want people to know of the water scarcity in Mira Road and hence want to make our concerns known." Mhatre claims that the corporation for the last six months has been stating that new and up coming constructions in the Mira- Bhayander region can't be supplied with water. " Our current water supply is only sufficient for the existing population. Our water supply cannot take any extra burden," said Mhatre. MHADA's Mumbai and Konkan board chief officer, Bhausaheb Dangde, confirmed the receipt of the letter. However, he downplayed the issue. " Yes, the mayor of MBMC did write a letter to the authority. Soon after that we held various meetings with the commissioner and the problem will be sorted out," he said. Water woes In 2010, MHADA had faced a similar problem after allotment of houses in the lottery. There was a water scarcity in Mumbai and the BMC had said that it won't be able to provide water to MHADA flats built in Ghatkopar, Mankhurd and Versova. "The earlier issues have been solved, and we have also spoken to MIDC, the body that's laying water pipelines in the MBMC region. We are sure that this problem won't pertain for a long time," said Dangde. I have written a letter to MHADA clearly indicating to them that MBMC is not in a position to supply water to new dwellers. We had also warned them earlier about the same before they conducted the lottery — TULSIDAS MHATRE, mayor, MBMC

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