GST rollout in April won't be possible, says BJP
Business Standard, January 7, 2010, Page 5
BS Reporter / New Delhi
The Bharatiya Janata Party (BJP) today said it would not be possible for many states to roll out the Goods and Services Tax (GST) from April 1 as proposed by Finance Minister Pranab Mukherjee, as several contentious issues regarding interest of states had not been addressed.
Senior party leader and former finance minister Yashwant Sinha, who spoke to reporters on the deliberations of the state finance ministers, said the empowered committee of the state finance ministers had worked on the issue but several matters had been left unexplained. The Centre had not shared with the states its view on some of the objections raised by them, he added.
“The BJP has been pointing out that a balance needs to be struck to protect the revenues of the state government, interests of industry and traders and benefits to the consumers at large and to specific sections of society as farmers and those living below the poverty line. The GST structure should not be such that the common man is adversely affected, either by additional tax or any consequent price rise,” the party leader said.
Differences on GST include the revenue neutral rate and revenue buoyancy, threshold limit, value added tax on imports, pending issues of compensating the Central Sales Tax, effective mechanism of levy of tax on textiles, flexibility to the state governments to exempt goods of local importance and include items in the lower rate list.
The BJP also suggested necessary amendment to the Constitution to change the federal structure, but said the issue needed more discussion.
A comprehensive compensation package operated by an independent agency was also needed, it said. Issues of an inter-state movement and the IT preparedness of states, which is imperative before the GST rollout, also needed to be discussed.
Although Sinha denied any differences on the GST issue among the BJP-ruled states (Madhya Pradesh and Gujarat are reportedly favouring the GST), the party statement said “most of the BJP states” endorsed the party view.
Thursday, January 7, 2010
GST rollout in April won't be possible, says BJP
A diluted tax code may go to LawMin for drafting
Business Standard, January 7, 2010, Page 7
BS Reporters / New Delhi
With the consultation process for the direct taxes code over, the proposals on taxation for salaried employees and income from house property may undergo some changes.
There could also be a relook at the proposals on the minimum alternate tax, capital gains tax, double-taxation avoidance agreement, general anti-avoidance rule, taxation of charitable organisations and foreign companies, and taxing investment at the withdrawal stage.
According to the code, income from a house, which is not occupied for the purpose of any business by its owner, will be taxed under the ‘income from house property’ head.
TN housing scheme for 2 million families
TN housing scheme for 2 million families
The Times of India, January 7, 2010, Page 14
CHENNAI: When it comes to proclaiming itself as the ultimate welfare state, the DMK government in Tamil Nadu is really pushing the envelope. In the annual governor’s address delivered in the assembly by Surjit Singh Barnala, it announced an ambitious housing scheme for the rural poor to cover more than two million families and introduced free professional education to students hailing from families that have not produced a graduate so far. Both schemes are the first of their kind in the country, officials said.
Having deepened its social base by supplying rice at Rs 1 a kg to ration card holders, waiving farm loans, distributing free television sets and introducing a health insurance scheme for life-saving treatment, the 44-month-old Karunanidhi regime announced more schemes aimed at strengthening its popularity for the fourth consecutive year. This year’s policy pronouncement was significant for CM personally as he has indicated that he may shed his administrative burden later this year.
The housing scheme aimed at a hut-free Tamil Nadu targets nearly 50% of the state’s rural residents by envisaging conversion of mud huts with thatched roofs into concrete dwellings. ‘‘Dalits and most backward classes will greatly benefit from this,’’ said a senior official. The rural development department will spend Rs 1,800 crore in the first year.
Real estate not long-term bet
Real estate not long-term bet
The Times of India, January 7, 2010, Page 23
MUMBAI: Stay off real estate — these are the words of wisdom offered by investment consultants to the clients now. They are also warning their clients, who are still optimistic about the prospects of the sector, to tread with ‘‘extreme caution.'' Worse, of late, even some mutual fund managers have joined the chorus, questioning the veracity of the claims of a turnaround made by realty firms.
The news comes at a time when most real estate players are claiming that they have turned the corner with many firms lining up with initial public offers (IPOs) in the coming months.
‘‘We are not recommending the sector to our clients. After the slump last year, we now find it difficult to take a call on the sector. The claims made by the companies, the financials... everything is questionable,'' says awealth manager who doesn't want to be named. ‘‘The valuations claimed by these companies, their land bank, title...these are problematic areas. There are a lot of ifs and buts involved,'' says K R Choksey, chairman, K R Choksey Shares and Securities, one of the oldest broking firms of Dalal Street.
According to stock market pundits, after the slump in the sector a year ago, thanks to the economic slowdown, many investors have turned bearish on realty. Many experts believe that the real estate players are not serious about long-term prospects of their business. ‘‘It seems like these people just want to make a quick buck. For
example, there was a pick-up in demand sometime ago, but it died down the moment developers started quoting higher prices,'' says a real estate expert. ‘‘If you are buying any business, it should have good long-term prospects. The business should be able to generate money consistently over the long term. Otherwise, there will be a lot of volatility,'' says Choksey, explaining the fluctuating fortunes of the sector.
Navneet Munot, chief investment officer, SBI Mutual Fund, says he prefers a stock-specific approach than a sector-centric one. ‘‘The sector is finding it difficult to get over the difficult times. The strength of the balance sheet is also a matter of concern,'' he says. ‘‘Still, we believe that some players may have the potential to deliver in the long term, but you have to be extremely focused on the stock,'' he adds.
Long term is a phrase almost every expert uses while recommending real estate stocks, as these stocks can be extremely volatile in the short term. ‘‘Real estate is always a long-term investment,'' says Dharmesh Jain, MD, Nirmal Group, real estate developer.
Brand land going places in north India
Brand land going places in north India
The Hindustan Times, January 7, 2010, Page 14
AS INDIA COMES OUT THE GLOBAL DOWNTURN, THE DEMAND IN REAL ESTATE SECTOR HAS RETURNED AND THE PRICES OF RESIDENTIAL PROPERTY IN NORTH INDIA ARE STEADILY GOING UP SINCE SEPTEMBER THIS YEAR. DEVELOPERS HAVE RAISED PRICES IN MOST OF THE MARKETS IN NORTH INDIA.
When it comes to development in the real estate sector, North India takes a comfortable lead as compared to other parts of the country with Delhi, Gurgaon, Faridabad, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh, Madhya Pradesh and Rajasthan leading the pack.
Much of the real estate development work has been concentrated in the top 38 cities of Northern India including Delhi, Gurgaon, Chandigarh, Noida, Shimla, Ambala, Jaipur, Ludhiana, Indore, Rudrapur, Ajmer, Bikaner, Kanpur, and Agra among others.
The past few years, before the recent economic slowdown, have seen an unprecedented growth in many of the urban centres in India and most of the cities in Northern India have been at the forefront of this real estate boom creating consumer confidence, investment & employment opportunities and growth of businesses.
According to a report prepared by India Brand Equity Foundation and Ernst &Young Pvt. Ltd., the Indian real estate industry is currently estimated to be US $ 48 billion, with a CAGR of 30 per cent. The total economic value of the market is estimated to be US $ 4045 billion, accounting for four to five per cent of the GDP. `The consistently growing IT/ITes sector, increasing presence of large foreign businesses in India, the globalisation of Indian corporates and the rapidly increasing consumer class provide a huge market potential and are the key growth drivers of this sector’. Rapid urbanisation has also been fuelling the real estate boom in India, providing huge opportunities to builders, developers and investors. As a consequence to the government relaxing FDI regulations, foreign investors too have joined this boom along with private equity funds, NRIs, and High net worth individuals (HNI) driving investments in real estate.
Needless to say, the real estate market in India is still in early growth stage and can be segmented into residential, commercial, retail and hospitality asset classes with an existing demand-supply gap across all segments for quality real estate.
Before the world was hit by the recent recession, the real estate market in Northern India was booming. In fact, investment in real estate market had seen a massive increase in the last seven years with the average return on investments touching around 40-60% per annum. But the economic downturn and its crippling effects lead to an almost 20-40% fall in prices, with most of the consumers preferring to postpone their decision of buying property till the situation stabilised.
However, as India comes out the global downturn, the demand in the real estate sector has returned and the prices of residential property in North India are steadily going up since September this year. Developers have raised prices of their products in most of the markets in north India. According to a new report prepared by realty consultant Cushman Wakefield, prices however are `still lower than what they were a year ago. As the market has revived, a large number of developers have jumped in the fray with new launches and projects’.
DELHI NCR The Delhi NCR real estate story has become a legendary tale. Real estate business in the National Capital Region (NCR) started when builders and developers started spreading their wings towards Delhi’s suburbs, viz. Gurgaon, Noida, Ghaziabad, Faridabad, Greater Noida and places like Kaushambi and Indirapuram. The rising demand for residential accommodation ably supported by the rising disposable incomes, lower rate of interests, other fiscal incentives and rapid urbanisation encouraged real estate developers to move beyond city limits towards smaller towns that are well connected with larger cities and satellite towns which have emerged as business and IT hubs in the past few years. From Gurgaon, the real estate boom also reached East Delhi and to places like Kaushambi and Indirapuram which were once considered down-market. Strategically located between three cities (Delhi, Ghaziabad and Noida), Indirapuram’s infrastructure is being seen as its biggest strength. According to realtors, before the recession, property rates in Indirapuram alone registered a 60-70 per cent appreciation. Construction of malls (like Shipra Mall), townships, numerous service apartments and business suites sent the property prices soaring and heightened the snob value of this place and many real estate developers are constructing business suites and corporate parks here as a part of their upcoming projects.
New players like the Amrapali Group have completed several projects Greater Noida, Indirapuram and other East Delhi locations, spreading over more than 100 acres. Evidently, places near Noida like Indirapuram, Kaushambi, Vaishali and Vasundhara in Ghaziabad and Greater Noida have come up as an alternative as accommodation in Noida and Gurgaon has gone beyond the reach of middle class.
Greater Noida is now coming up in a big way as an industrial and educational hub. Major players are now focussing on developing infrastructure here as the place offers good connectivity and enough unexplored land.
Ansal API, one of the oldest real estate players, is developing independent bungalows, premium floors, highrise apartments at Megapolis, small and large offices in Corporate Park in Noida and IT offices in the IT SEZ in Greater Noida. “In India, there is still a big gap between demand and supply in the housing sector. As economic cycles change, the pending demand only shifts from one segment to other or within the sub-segments of the same asset class. With over 42 years of experience behind us, we have seen these kinds of cycles before as well. In the present scenario, we are focussed on the affordable housing segment and have set ourselves a target of building 10000 homes in this category across the Northern India region where we are mainly present as of now,” states Rakesh Kaul, Chief Operating Officer, Ansal Hi Tech Townships Limited.
New companies like the 3C Company are also focussing on Noida and Greater Noida by developing `green buildings’. “Currently, Lotus Boulevard and Lotus Boulevard Espacia are the current residential projects that we are working on. Adjacent to each other, spread across 40 acres, collectively these form India’s largest green residential estate in sector -100, Noida. We are also nearing completion of Oxygen Boulevard, which is a green IT SEZ in sec-144, Noida. With 2200 plug & play work stations and over 7 lakh square feet of ready to fit out space available, this project is spread across 25 acres.
The team is also gearing to launch another green residential project in Sec-110, Noida,” informs Vidur Bharadwaj, Director, The 3C Company.DEVELOPERS REJOICE AS MARKET’S LOOKING UP According to the latest report prepared by realty consultant Cushman Wakefield, `property values in NCR has climbed up with the return of investors and end users interest in the realty market in the third quarter ending September 2009. Certain suburban markets like Noida and Gurgaon witnessed even higher growth due to heavily discounted prices in the previous quarter ending June - particularly in the new launches’. `After a sharp decline in the last few quarters, capital values have started to strengthen and register marginal appreciation across most micro-markets. Cyclical demand with festive season has resulted in strengthening of prices. The launch of new projects catering to the mid-segment witnessed heightened activity resulting in price escalation. Gurgaon and Noida are the key locations to witness this activity and registered the highest growth, 19% and 16%, respectively, during the quarter.’ RISING DEMAND FOR LOW DENSITY HOUSING Low density housing is also gaining tremendous popularity in the residential real estate segment as it entails lower risk for the developers and they can also meet deadlines since the development comprises of low-rise, low-density development and with major concentration on development of basic infrastructure, the speed of delivery is much faster compared to high-density development.
Understandably, real estate developers like the Jaypee Group, Vipul and Fire Capital Fund are attracting buyers with a number of such niche projects.
Low-density housing is premium priced units as compared to group housing and offers a range of entertainment, recreational and other facilities to the customers apart from lush greens and well-spaced dwellings. Significantly, most of these are on the outskirts of cities in Greater Noida and Gurgaon.
Jaypee Group’s 452-acre Jaypee Greens Township in Greater Noida is one of the first examples of low density housing wherein out of the total area; only 70 acres have been used for dwelling development. Besides, Jaypee Group has also announced the launch of India’s first Sports City on the Yamuna Expressway in Gautam Budh Nagar. The Sports City will have in total 12 Districts and each would be based on a theme. Approximately 875 acres of land in the Sports City will be used in providing sports facilities like motor race track, go-karting facility, stadiums for various sports and other recreational facilities. Property developer Vipul is also coming up with its `Vipul Tatvam’ villas in Gurgaon, a project which has just 255 villas spread over 50 acres, wherein homes are priced between Rs 2.2 crore and Rs 6 crore.
BURGEONING GROWTH IN OTHER TOWNS AND CITIES Apart from Delhi-NCR, other parts of Northern India are also witnessing major activity as far as real estate development is concerned with a slew of projects in the pipeline by old and new developers. The real estate boom is not confined to Delhi NCR alone as developers and investors have already gone beyond NCR and other big cities like Mumbai and Bangalore and started developing townships, business towers, shopping malls etc. in smaller towns like Mohali, Rudrapur, Sonipat, Manesar, Bhiwadi and Jaipur. With this new trend, the real estate sector in the country has entered its second phase, the next level of development and it’s these smaller towns that are being touted as `destination next’ for those interested in buying property for residential purposes or for investing in this sector.
Another reason for moving towards Tier III cities is that the main city and other satellite towns and suburbs like Indirapuram, Noida and Gurgaon are virtually exhausted in terms of new lands and prices of properties in these areas have hit the roof and there is but little scope for further appreciation in the prices in the short to medium term.
Real estate developers like Omaxe, Eco Terrain, Today Group, Ansal API, Alliance Nirman, MDLR, GTM Builders and AJS builders are constructing major townships in small towns like Agra, Amritsar, Punjab, Hapur, Kufri, Muzaffarnagar, Jaipur and other smaller towns. Bhiwadi, near Gurgaon is developing rapidly as an industrial town where many SEZs have been constructed or are underway. Mohali and Derabassi in Punjab are also developing speedily and real estate developers like Parsvnath Developers and AJS Builders have come up with townships here as well. Omaxe has already made its presence felt in smaller towns by developing residential and commercial projects in Sonipat, Rohtak, Bahadurgarh, Gurgaon, Palwal and Faridabad in Haryana; Noida, Greater Noida, Ghaziabad and Lucknow in UP; Rudrapur in Uttarachal; Amritsar, Ludhiana and Patiala in Punjab.
Alliance Nirman too has come up with townships in Hapur, Rudrapur and Gurgaon and developers like Assotech, GTM Builders, Piyush Group, AJS, Vipul Infrastructure, Suncity and NHIO etc. have also followed suit.
Meanwhile, these are just a few names to exemplify the plethora of quality real estate developers that are going to change the way we live and work. Real estate boom is here to stay and the government, the business houses and the common man all have contributed towards making this dream a reality.
3C Company has led the way in development of green buildings in Delhi-NCR
The Hindustan Times, January 7, 2010, Page 16
While enhancing air-quality, providing excellent day lighting and saving energy consumption by a minimum of 40%, developing a green building involves about 5% extra cost in construction but gives many fold benefit to the users. Looking at the future s a part of any revolutionary business model. The future hat the human race as an entity should ook forward to for itself cannot ignore he importance of going green. In these times of environmental turmoil, here is nothing more refreshing than an idea that put together a green future. Here is a look at one of those ideas…
reducing carbon footprints on earth, the company has been creating buildings that are truly sustainable in form, function and use. These sustainably developed projects not only use far less natural resources and energy in the process they are built but are also more durable and require less maintenance. Besides, 3C works on a dynamic integrated business model that provides an end-to-end solution to its clients.
The driving force of these green architectures, Vidur Bhardwaj , Director, 3C Company is also popularly known as the ‘initiator of sustainable development projects’ in Delhi-NCR. A graduate from School of Planning and Architecture, Delhi, Vidur has taken his creativity to new heights with his dynamic and innovative designs that have brought accolades for him and his team.
Here, he explains how his company has lived up to its motto of “creating, caring and conserving” through their environment friendly creations and has set stringent standards for others in the industry in the process.
Excerpts from the interview: Before the world was hit by the recent recession, the real estate market was booming. In the present market scenario how are you sustaining the growth of your business?
The uniqueness of our operation is our bus iness model to develop ‘Green Buildings’. We are the pioneers in development of green buildings in Delhi-NCR.
When the Indian real estate industry was reeling under the capital crunch and lack of demand for their projects due to economic downturn, we focused on providing our customers value for their money.
Corporate houses, which too were affect ed by the downturn, realized the importance of cutting costs. An efficient energy saving building was just a savoir for them and an opportunity for our business. This kept the momentum of demand for us in the commercial segment.
At the same time, in the residential segment, when most of the developers were focused on launching a slew of projects across the country, we launched only a couple of residential projects and our main focus till date is the completion of our on-going projects. The location and the quality of our projects became their selling points.
What are your new projects in the pipeline that your company is devel oping? l Lotus Boulevard and Lotus Boulevard - Espacia are the current residential proj- r ects that we are working on. Adjacent to each other, spread across 40 acres, col- f lectively these form India’s largest green e residential estate in sector -100, Noida. c We are also nearing completion of d Oxygen Boulevard, which is a green IT 5 SEZ in sec-144, Noida. With 2200 plug & play work stations and over 7 lakh square feet of ready to fit out space avail able, this project is spread across 25 h acres. The team is also gearing to launch i another green residential project in Sec- g 110, Noida. t i As you have already mentioned that k 3C Company specializes in develop- t ing green projects. It is also a well known that in the light of increased e environment consciousness, ‘green’ is the new mantra, can you explain in detail in what ways does your development work cater to this market as well as social needs?
The 3C Company is an environment responsive company which is developing green buildings. Having delivered over 12 million square feet, we are the only team in Asia which has to its credit the “03 Platinum Rated Leed Certified Green Buildings by USGBC (United States Green Building Council)”. These are Green Boulevard and PATNI campus in Noida and WIPRO Campus in Gurgaon. Green Boulevard is world’s largest Platinum Rated Leed Certified Green Building in shell and core category.
Green concept offers numerous benefits. While enhancing air-quality, providing excellent day lighting and saving energy consumption by a minimum of 40%, developing green building involves about 5% extra cost in construction but gives many fold benefit to the users.
Any real estate development work has to go hand in hand with larger infrastructural development by the government (for example, a residential complex gains in value only if it is well connected by roads), what kind of infrastructural requirements, the govt. has to put in place that would boost the growth of real estate. Infrastructure is a key factor for any kind of development. The Expressways are the new growth corridors. Well developed main roads along with good internal roads also add to the value of the project. As a strategic planning, our key offerings are situated at locations that boast of a developed infrastructure. The govt. should try to provide basic infrastructure like roads, public transport, water, clean sewage systems etc. before allowing any development in the region.
What are the challenges you face in land acquisition for real estate development purposes?
We have an in-house division which looks after the land acquisition for the 3C Company. We feel that there are very few strategic land parcels available in and around Noida and as far as operational hurdles are concerned, every business has its own set of challenges. The right quality of research is the way towards hassle free land-acquisition.
How do you differentiate your offering from others in this space?
We have an expertise in green developments and that is what distinguishes us from others developers. We are a team of 350 professionals that are jointly working towards the cause of reducing carbon footprints on earth. Today, when a lot of other major players in construction and development industry are still accumulating their resources to develop environment friendly construction solutions, the 3C Company has already set very high standards and created benchmarks in the concept of green construction.
Wednesday, January 6, 2010
The need for planned cities
The Economic Times, January 6, 2010, Page 3
Godrej Properties has a dream debut
Economic Times, January 6, 2010, Page 16
Stock Surges 9% To Close At Rs 535 On BSE; 20% Of Equity Traded On The First Day
Our Bureau MUMBAI
THE new year has begun on a positive note for new listings. After JSW Energy, yet another public issue — Godrej Properties — made its debut on bourses at a premium to the offer price on the back of good investor participation in trading of the shares.
This is unlike the response to some of the high-profile initial public offerings (IPO) last year that attracted huge subscription but failed to deliver positive returns on listing and subsequently. Godrej Properties shares saw heavy trading during initial trading hours, which lifted the share price to an intra-day high of 586.7. As the day progressed, the stock lost some ground to touch the day’s low of Rs 500 before ending with a gain of 9% at Rs 535 on BSE on Tuesday. The gains were supported by huge volumes as a total of 1.4 crore shares, or 20% of the company’s equity, changed hands both on BSE and NSE.
Analysts have positive views about the long-term prospects of Godrej Properties. The company could be a good long-term bet, because of its trustworthy management and the group’s credential to deliver quality products, they feel.
“The company is into affordable housing, for which there is a lot of demand. The segment still has enough potential for accommodating more and more large players,” said Mayank Shah, CEO, Anagram Capital. The business model of Godrej Properties is different from other players, as the company outsources a lot of work which helps it realise quick gains, he added.
Priced at Rs 490 a share, Godrej Properties IPO was subscribed four times on overall basis, although the retail portion was under-subscribed. The company plans to use the proceeds for new projects, debt repayment and for joint development projects.
The near-term outlook for the real estate sector, according to analysts, does not look as promising as in the past, as most of the positives have already been factored into prices, they feel. The sector is sensitive to changes in interest rates. So, any rise in rates won’t augur well for the sector. It would affect demand, putting pressure on prices and profit margins, feel analysts.
Godrej Properties does a star turn, lists at a premium
Hindu Business Line, January 6, 2010, Page 1
Our Bureau, Mumbai
Godrej Properties beat most of the recent IPO showings on the bourses, listing at a 4 per cent premium to its issue price and closing 9 per cent higher on Tuesday.
The scrip, whose issue price was Rs 490, listed at Rs 510 on the BSE and closed Tuesday at Rs 534.55.
Recent listings have had a subdued run, despite the hype generated ahead of their debut. Adani Power closed at its issue price of Rs 100. JSW Energy managed a gain of 0.75 per cent over its issue price, while NHPC was marginally better, logging a gain of 2 per cent over its issue price of Rs 36.
Mr Mehraboon J. Irani, Senior Vice-President (PMS), FCH Centrum Wealth Managers, said the Godrej Properties IPO was quite attractively priced and looked fairly valued with today's gain. With the economy just about looking up, property prices have seen improvement in the last six months. It is a good stock to buy with a long-term perspective, he said.
On the BSE, Godrej Properties touched a high of Rs 586.70 and a low of Rs 500 with the total traded value clocking Rs 290.11 crore. A total of 52,60,628 shares changed hands during the day. On the NSE, the stock opened at Rs 511, touched a high of Rs 586.80 and a low of Rs 502.15 before ending the day at Rs 536.05. The total value of shares traded was Rs 480.27 crore with 87,07,481 shares traded.
In December, Godrej Properties sold close to 9.43 million shares to raise Rs 469 crore. The issue was subscribed over four times. About 30 per cent of the IPO money would go towards servicing debt.
The company allotted 16,97,345 equity shares at Rs 530 per share, the top end of the issue price band, to four anchor investors — JF India Fund (8,72,365 shares), JF Eastern Smaller Companies Fund (1,80,453 shares), Ward Ferry Management (2,93,592 shares) and The Royal Bank of Scotland (3,50,935 shares) worth about Rs 90 crore.
Posts
