Emerging Joint Development Property Model

Joint Development (JD) has evolved as the most preferred and widely adopted property development model in urban cities. An individual land owner and a developer may enter into a Joint Development Agreement. The key feature of a JD is that the land owner will contribute land and the developer will undertake development activity on it with his expertise. Depending upon the land price, the Joint Development ratio is decided among the parties.
The land owner has the option of retaining his whole share or a part of the share or even fully sell his share directly or through the developer. In consideration for this, the land owner will part with the agreed ratio of undivided share (UDS) of land in favour of the developer or his nominee and will also allow the developer to construct and sell the share of his apartments.The owner will permit development of the project and sale of his share of apartments. At the same time, the builder gets access to land and does not have to invest money for purchase of land. The success of any project lies in the land owner identifying the developer based on his track record.

Source:Magicbricks

Highways charts out route for vital OMR-ECR road link in Chennai

The highways department has finalised the alignment of the new link road between East Coast Road (ECR) and Old Mahabalipuram Road (OMR). The final decision was made by a steering committee with top officials from the highways, Chennai Metropolitan Development Authority (CMDA), Chennai Corporation and police.

The new road will begin at Neelankarai on ECR, cross Buckingham Canal and join OMR opposite the Pallavaram-Thoraipakkam Road junction.

Though the alignment was part of the Chennai Metropolitan Transport Authority’s master plan in 2008, a private consultant was appointed to study the feasibility of the project. The consultant carried out traffic studies and found that there is an urgent need for a road at this junction.

There are no roads connecting OMR and ECR apart from Kalaignar Karunanidhi Road in Sholinganallur and West Avenue Road in Thiruvanmiyur. These two roads are 10km apart.

“Earlier there was a small bridge that we used to cross the canal. But it was closed a few months ago. Now we have to go all the way to Sholinganallur and then come back,” said V Srinivasan, a bank manager who lives in Thoraipakkam. “Not only is this a 10km detour but it takes half an hour just to cross the Sholinganallur signal.”

Unchecked real estate growth has been rampant in this area and may delay land acquisition process, say officials. At least 100 houses built illegally have to be demolished. Of the two options available — to go by the master plan or chart a new course through vacant land — the government has chosen the tougher one. This will give them legal leeway when it comes to land acquisition.

The highways department estimates land acquisition to cost around 100 crore for an estimated 42,000sqm that it will have to acquire. Around 30,000sqm of this land is owned by private individuals with legal deeds.

“Though most land owners have pattas, buildings on the eastern side of the canal do not have approval,” a highways official said. “People constructed buildings in violation of the master plan.”

The western side of the canal is mostly vacant and should the highways department should not have any problems with land acquisition along the stretch.

“Once the plots are identified, land acquisition will begin. Unlike earlier projects, construction will begin only when land acquisition is completed,” the official said. Officials expect the land acquisition process to last at least two years and say laying the road will take a year to complete.

Source:gharabari

 

Chennai real estate market growing steadily

Chennai real estate market has been stable with moderate price appreciation of 8 10% in 2012. With inprogress infrastructure projects taking shape, the demand and capital values are expected to rise across all sectors. Focus on improvement of public modes of transport has been one of the major highlights in Chennai. This is evident from the expansion of the existing highways, work on Chennai Metro and the Outer Ring Road.

Approval of three new bridges connecting ECR and OMR at Neelankarai, Palavakkam and Kottivakkam is expected to impact the capital values. Going forward growth in Chennai would not solely be determined by the IT/ITES sector, but also the transport corridors of the above mentioned infrastructure projects. Chennai market is looking forward to the MRTS and BRTS projects to give the city a new face in 2014-15. 2012 has seen the city shift investor focus from the usual OMR, ECR to the WEST and NORTH of Chennai. The operationalization of the TIDCO & Ascendas SEZ at Tiruvallur and the operationalization of the new airport at Sriperumpudur in 2015 is driving interest in the North & West Chennai regions.

STOCK AND ABSORBTION

Global uncertainties and IT/ITES sector going slow with their expansion plans impacted the real estate scenario in Chennai with high vacancy rate. Though the focus on residential sector from developers end was high, and Chennai market saw remarkably high number of new launches in 2012. Sales were moderate in comparison to the new residential supply added to the market. In 2013 Chennai residential market is likely to see few launches compared to 2012 but improvement in sales with an overhang of 18-22 months.

Source:moneycontrol

Rs 400 crore flyover to connect OMR, ECR in Chennai

A flyover connecting the Old Mahabalipuram Road and the East Coast Road is now a step closer to reality. The design of the flyover that would start near Tidel Park on OMR and land on ECR was given a go-ahead by a technical committee of the state highways department that met a few days ago. “The alignment of the flyover was decided in December last. Now we have decided where the arms will come and where exactly the flyover will land,” said an official of the state highways department.

TOI was the first to report when the alignment committee gave its nod in December last. The flyover will begin just after the small bridge on the Buckingham Canal on West Avenue Road. It will then cross the much-dreaded Lattice Bridge Road junction, turn right and then land on ECR near the Thiruvanmiyur RTO. “The final detailed project report will be submitted in three months. A tender will then be floated and work on land acquisition will start in a year,” said the official.

This is touted to be one of the most expensive flyovers in the city, given its size. “The cost has been estimated at Rs 400 crore,” said the official.

Unlike previous projects, land acquisition will be completed before construction begins. “This is to ensure that cost of construction doesn’t keep increasing with delays in land acquisition,” said the engineer. Construction of flyovers in Porur, Moolakadai and Thirumangalam has been delayed due to land acquisition issues.

Commuters on the stretch say that while the flyover would make a difference, the Tidel Park junction is still a bigger problem. “This flyover will make a difference, albeit a small one. It is a temporary solution and the bigger problem is at Tidel Park,” said Suresh Menon, a cinematographer who has been working with the Chennai Traffic Police on solutions for traffic management in the area. “While one would take 10 minutes to cross the traffic signal at LB Road, it takes at least 45 minutes to cross Tidel Park signal. Coming from Madhya Kailash, traffic piles up well past Thiruvanmiyur MRTS station,” he said.

Earlier this year, the state government announced that a 45-km elevated road would connect Madhya Kailash and Mahabalipuram. “We will soon appoint a consultant to study the feasibility of this project as well,” said a highways engineer.

Additional commissioner of police (traffic) Karuna Sagar said this was the only real solution in sight. “There is nothing else we can do to manage the traffic flow. It takes more than one signal cycle to clear traffic and hopefully the situation will improve after these projects,” he said.

Source: The Times of India, Chennai

‘Land, quick approvals necessary for low-cost housing projects’

Government needs to ensure availability of land and speedy approvals for effective implementation of low-cost housing projects, real estate developers’ body NARDECO said on July 23.

“For effective implementation of low-cost housing projects, it is imperative that the government ensures availability of land at subsidised rates, fast approvals, property tax relief, funding support, additional FSI, connectivity to suburbs and creation of special residential zones,” National Real Estate Development Council (NARDECO) President Navin Raheja said in a statement.

Demanding infrastructure status for the sector, he said, “This will help the sector getting government incentives, subsidies and tax benefits. Besides, it will also lead to lower cost of funding and taking loans from financial institutions will become cheaper translating to more supply of affordable houses.”

He further said that upward revision of floor area ratio (FAR), ground coverage and population density norms are required on priority basis.

“In most states, the floor area ratio (FAR) density and ground coverage norms do not support the creation of affordable housing the long approval process is another major problem. In major cities where land cost is high, this is possible only under PPP model,” Raheja added.

Source: The Economic Times, Mumbai

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low budget flats in chennai-marg swarnabhoomi aayush apartments

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Importance of Allotment Letter

The first and foremost payment to be made to the builder is the booking advance (up to 10 percent of the property value) for which a receipt duly acknowledging the payment and an allotment letter is given to you. Since some builders make the booking advance non-refundable, it will do you good to be completely sure of the deal.

The allotment letter is a document that is given by the builder to the buyer when a property is booked. The letter contains facts and figures of the property, payment options and other charges applied for maintenance, added amenities etc. Normally, it is only issued after a payment of 15 percent of total value of the property. It also gives you information about the construction details and plans, architecture details and certain other specifications of the project, the date of delivery etc. This letter will give you a strong hold in case the builder is delaying your possession. You must discuss any preferences, such as choice of floor, parking etc. before receiving the allotment letter as these options will be included in it. This is the first agreement that you sign with the builder and includes the following:

• Booking amount
• Terms of construction
• Carpet area, built up area and super built up area
• Cost of car park if any, and other amenities such as a club house, gymnasium etc. as promised by the builder
• Final amount due from you, including all charges such as VAT, service tax, charges for amenities and car park. The costs incurred during the registration will not be mentioned in the allotment letter.

Why is this necessary?

Usually, at the time of a bank loan application, the allotment letter that will have the description of the subject property that is being sold/bought by the two parties is required to be handed over. It is the most important document for applying for a loan, as it contains the details of the amount you have to pay for the purchase of your house. Thereafter, the remaining amount will be calculated and financed by the bank.

An allotment letter holds great value as it is the only document which will be with you as proof of your property dealing. If you have not been offered your dream house in time or as it was promised, then this letter will help you lead a case. An allotment letter is vital in availing a loan from the bank, as the letter mentions the amount of money which you have to pay to the builder/housing society, so that remaining amount can be financed by the bank. Generally, on the basis of this letter, the bank finances the remaining amount.

Although the general impression is that the sales agreement holds supreme importance in a property deal, the allotment letter comes in when you are deprived of what you were promised. For example, if on any one of the pertinent aspects mentioned in the allotment letter, your builder refuses to give adequate proof of document, as a buyer you can opt not to make a subsequent payment and can demand that unless he satisfies the disputed aspect, you will not make the payment. It will legally bind him to refund the money.

Source: Chennai realty

Chennai’s OMR sees 25% rise in rental values

Are you looking for a property in Chennai that assures return on investment? Old Mahabalipuram Road (OMR) can be an ideal option. Yes, the residential rental market in the area is seeing an upward trend. The rental values have increased by 25 per cent in the Apr-Jun 2013 quarter. Data also shows that the current rental values for a 1BHK range from Rs 6,000-10,000, for a 2BHK from Rs 12,000-16,000 and for a 3BHK from Rs 20,000-25,000 per month.

The set-up of IT establishments in and around the OMR has what turned into its favour. “OMR is home to over 240 software companies employing more than 1.2 lakh professionals. It is a major hub of working populace that is pushing the demand for rented accommodation.

“The rental space in the area is preferred by single professionals or by young and small families, who would like to stay near their workplace”.

IT/ITeS companies like Satyam Computer Services, HCL Technologies, Tata Consultancy Services, Bahwan CyberTek Group, Accenture India, TECCI Park, Wipro Technologies, Cognizant Technology Solutions, Scope International, Photon Infotech, Polaris Software Lab and Infosys to name a few that are situated along the IT Corridor. The area stretches from TIDEL Park in Tharamani to SIPCOT IT Park in Siruseri. TIDEL Park is home to a number of BPO and IT/ITeS companies.

The area also offers ready-to-move-in condominiums and cooperative multi-storeys with functional sweeping, drainage and sewerage system. Developers present in the area are MARG Properties ,Hiranandani Group, Vishram Builders, Silicon Realty Ventures, Provident Housing Limited, Vaikund Estates, XS Real Properties and Urban Tree Infrastructures among others.

Apart from this, the area provides easy accessibility to nearby areas. “Sholinganallur is at a distance of 5-km. Connectivity to ECR, Velachery and Kelambakkam is easy and smooth with frequent bus service. Shared buses and autos are also available throughout the day. Hotels like Asiana and Sabari Classic as well as all kinds of restaurants are also present in the vicinity.

The area has well developed social and physical infrastructure as well. It is located close to the city centre. It also has a number of schools, hospitals and neighbourhood markets. It is about half an hour drive from the airport. Prominent Government Institutes and technical/educational institutions like Chennai Mathematical Institute are also situated along the corridor.

Find out: Costs of 2BHK areas acorss all metros

Real estate services firm Jones Lang LaSalle elaborates on the prices of 2BHK apartments across the four metros of Mumbai, Delhi, Kolkata, and Chennai over an area of 1,000 square feet.

Prime property, the weekly real estate reckoner, finds out the prices of 2 BHK apartments across the four metros of Mumbai, Delhi, Chennai and Kolkata.

Mumbai’s property market remains subdued. High prices continue to dampen buyer sentiment. Jones Lang LaSalle is particularly bullish on the western suburbs and Navi Mumbai. It also advises buyers to hold on to purchases for now.

Rohan Sharma, Senior Manager Research, at Jones Lang LaSalle India says, “For a buyer it might make sense for him to see if the continued pressure on developers on unsold inventory makes them come down on prices. That trend has not been seen. But increasing pressure may lead to a situation where they might be able to get better. Schemes are being introduced in which they can enter into the market. So, they might get favourable payment terms and they might want to hold on for a minute and then enter the market.”

Mumbai’s loss is often seen as Pune’s gain. With the average price being less than Rs 5,000 a square feet Jones Lang LaSalle is bullish on Pune as an investment option.

“We have locations like Wakad and Aundh towards western side and Hadapsar which are doing well. However, they are still yet to pick up pace on the overall level of development. So, prices may not move up very quickly”, adds Sharma.

New Delhi’s builder flats have also witnessed a slowdown. Builders in Defence Colony and Panchsheel Park have been finding it difficult to sell independent floors but still don’t want to budge on prices.

These flats are being viewed as too expensive and buyers have a plethora of options in the suburbs of Gurgaon and Noida with bigger specks and plenty of amenities.

“In terms of investment activity the Dwarka Expressway is seeing a lot of launches and good traction. There was a lot of end-user activity in this part of Gurgaon. Now, price points have increased, projects are being offered with better specifications. So, investor activity is also happening here. However, there are situations where a project priced at Rs 6500 a square foot in the primary market from a developer an investor is willing to sell-off at around Rs 5500-5600 a square feet.

Bangalore has seen many launches off-late. Jones Lang LaSalle says prices as well as rents have increased marginally since April. It expects rents for residential properties to continue to head north.

Sharma says, “Hebbal Flyover, in a radius of 3-4 kilometers, there is a good amount of residential activity happening. There is the North-East quadrant which we talk about Bangalore and where most of the residential launches and sales are happening.”

And in Chennai Old Mahabalipuram Road (OMR) continues to be the hotspot for new launches. However a few high-end launches in the City Centre, where there is little available land, have been witnessed.

Overall Chennai is a stable market with no major movement expected in prices.

“Prices are looking stable in Chennai and they are merging corridors. They will take a while and this is a slightly slower market with respect to overall sales. So, entering today or maybe three, four months down the line would not make much of a difference on pricing”, adds Sharma.

Prices in Kolkata have remained steady. It is not easy to get a home in Central Kolkata as the concept of apartment complexes is still developing. All the action though seems to be at Eastern Metropolitan (EM) bypass and Rajarhat.

Sharma says, “EM Bypass has projects available at higher end segment. They can go as high as Rs 14,000-15,000 a square feet and prices at Rs 7,000-8,000. So, a larger part it is catering to the upper-mid to a slightly luxury segment kind of profile. Rajarhat is slightly on the lower side. It is more an affordable location. Prices are typically between Rs 3,000-5,000 a square feet.”

Source:moneycontrol

‘GST Road, OMR – fastest growing residential sectors’

What do you think sells best in the city?

Apartments are the most popular property type in Chennai. The main reason behind this is that owners find apartments easier to maintain due to the support of the association. In addition, apartments give a feeling of security to its inhabitants.

What is the current scenario of re-development in Chennai?

Chennai is gradually moving towards re-development. The corporation is extending its limits around Chennai and is planning to give facilities in these extended limits.

Which locations are being redeveloped in Chennai?

Localities such as East Coast Road (ECR), Old Mahabalipuram Road (OMR), Grand Southern Trunk (GST) Road, Oragadam and Sriperumbudur are a few localities which are witnessing rapid redevelopment.

Which are the future growth corridors of the city and what factors affect their growth?

GST Road and OMR are the fastest growing residential sectors in Chennai. There has been rapid development of IT/ITeS industry in the areas around GST, OMR and ECR. This has facilitated growth of the residential sector in these areas. Oragadam and Sriperumpudur are the major industrial zones of the city. Since there is substantial industrial growth in Chennai, residential development is also taking place in these locations.

Can you define affordability and luxury in Chennai?

Affordability and luxury vary as per the location in the city. For instance, in prime locations of South and Central Chennai, lower end properties are available within Rs 15,000-20,000 per sq ft. Luxury depends on the facilities offered in the projects. It usually starts at Rs 20,000 per sq ft.

Similarly, in developing locations like OMR, GST Road, areas near Maraimalar Nagar, Chengalpattu, Sriperumpudur and Oragadam, lower end properties are available in values ranging between Rs 2,800 to Rs 4,800 per sq ft and luxury apartments start at Rs 6,000 per sq ft and go up to Rs 10, 000 per sq ft.

Unsold houses in Chennai pile up as sales slump

Builders across the country have been worried as unsold housing stock have been piling up in the recent months.

Chennai’s unsold housing stock, for instance, has risen from 20,000 units a year ago to 45,000 units now as per a study conducted by international realty consultant Jones Lang LaSalle. Sales have dipped across seven major markets in India in the first quarter of 2013, . As against 80,000 apartments sold in the last quarter of 2012, only 65,000 units were sold between January and March this year. A sizeable portion, about 39% of these sales happened in the National Capital Region (NCR). Mumbai accounts for 18%, Bangalore 15%, Chennai 13% and Pune 8%.

The waiting period for unsold inventory in Chennai is the lowest among seven major Indian cities, said Puri. While the average waiting period for a completed apartment to get sold in the country is 15 months, in Chennai it is only 10 months. Hyderabad and Kolkata have a slightly higher waiting period of 12 months, Pune and Gurgaon 14 months and Bangalore 23 months. An average apartment in Mumbai, which has the highest waiting period, gets sold after 34 months of completion. It is this comparatively higher demand for residential apartments that helped Chennai rebound soon after the 2008-09 realty slump,.

Differentiating between Chennai city and outlying areas, “While the demand for housing in the core city is quite high even now, it has slowed down in the suburbs.”the slump in the suburbs partly to an unprecedented glut in supplies and partly to a steep hike in prices, especially on the Old Mahabalipuram Road in a short span of six to nine months. “Until a year ago, apartment price on the OMR was in the region of Rs 4,000 per sq ft. It suddenly went up to Rs 5,500 per sq ft in areas like Sholinganallur and Thoraipakkam, which still lag in good social infrastructure. Naturally”.

About 35% of Chennai suburbs unsold housing stock is on the OMR, “If investors who have funded the projects find it difficult to exit, the market may crash as it happened in the case of NCR,”. Too much concentration by builders on OMR is the bane of Chennai, noted  “When so much of development is happening on the OMR, transportation facility and social infrastructure need to be improved manifold.”

Source: The Times of India, Chennai