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South leads in housing for seniors


South India is emerging as a senior citizens' paradise, going by the number of

elderly-friendly residential projects. Of the 29 projects operational in the
country, 16 are in the four southern states.
While Bangalore has the maximum number of seven projects, Chennai and
Coimbatore have three each, Kochi has two and Hyderabad one.
Delhi and Mumbai have just one each. Of the 30 projects that are in the
proposal stage, nine are likely to come up in Bangalore and Chennai .

Hotels check out new strategies for


ITC Welcomgroup's Chola-era inspired hotel in Chennai, the Grand Chola, has
a 100,000-square-feet banquet hall ready for weddings and red-carpet events.
The recently opened Kempinski hotel in New Delhi has a ballroom large
enough for 6,000 guests. Grand pavilions are also central to other new hotels
like the Taj Vivanta in Gurgaon and the JW Marriott in Delhi's Aerocity.
These hotels boast of many other attractions - rooms with large windows,
adjustable lighting and spa treatment - but the banquet halls are the most
noteworthy. It's not difficult to see why. In Delhi alone, about 5,000 five-star
weddings take place in a year. Each wedding can result in a business of at
least Rs 20 lakh - rooms, banquets and food. That makes it a market of Rs
1,000 crore in a year. A large chunk of weddings takes place in the
farmhouses on the outskirts of the city or in nearby cities like Jaipur and
In a market that is getting more and more competitive, this is the newest
gambit that hotels are using to survive. There was an increase of 15 per cent
in the hotel room inventory in the country in 2011-12, taking the total supply

to over 96,000. As a result, the occupancy level has remained almost static.
Nationally, occupancy levels rose 1.9 per cent, while the average room rates
increased 2.2 per cent. But in most large cities, including Delhi, Mumbai and
Chennai, there has been a drop in occupancy by around 10 per cent and the
average room rates (ARRs) have seen a decrease of around 5 per cent,
according to industry experts.
Growing mismatch
And the competition will become more intense in the days to come. By 201718, the total room supply in the country is expected to grow to 175,980.
Nearly 36 per cent of these rooms are expected to be in the mid-budget
segment and 18 per cent in the luxury segment. Delhi, which has a branded
room inventory of 11,000, is set to see an addition of over 5,000 rooms after
the Aerocity project is ready. The markets where inventory is expected to rise
significantly are Bangalore, Chennai, Kolkata, Goa, among others. This would
keep ARRs under check for some time till the supply balances out against
demand. In the short run, industry experts say that the demand and supply
gap in the sector could widen with more supply coming in the market. "It is a
cyclical business. The supply will take a couple of years to absorb," says P R
Srinivas, senior advisor, HTL Capital Advisors, an consultancy firm.
That's worrisome for the hospitality sector, especially as traffic is slowing. In
2012, foreign tourist arrivals grew just 5 per cent. By comparison, 2011 saw a
13 per cent rise in tourist arrivals. Travel for work, too, has slowed with
companies going on a cost-cutting mode. They are increasingly making do
with tele- and video-conferencing, instead of face to face meetings. Some
have even set up their own guest houses or taken studio apartments on rent.
But, while business may be down, it has not stopped hospitality chains from
opening up new hotels. Almost 60 per cent of the new hotels have opened up
in the last five years -in the thick of the slowdown. The saving grace for new
and old hotels alike has been the restaurants and banquet halls. Hotels are,
therefore, rushing to tap this market. As a result, the share of banquets and
food & beverage in the total revenue of hotels is steadily rising. From 33 per
cent in 2007-08, it went up to 38 per cent in 2011-12. At the same time, the
share of revenue from rooms has fallen from 61 per cent in 2007-08 to 55 per
cent in 2011-12. "There is a dearth of good convention centres and
banqueting space for both marriages and business events. In a local market
such facilities stand out," says Srinivas.
Cutting costs
While the hotels are trying to exploit new revenue streams, they are also

working to manage their costs. Sustainable technologies that lower power

and water consumption are becoming popular. But controlling manpower
costs isn't easy. Hotels are trimming their staff-to-room ratio to bring it closer
to international standard. At 1.6 employees per room, the average ratio in
India is nearly twice the international standards.
"Currently we are seeing that the supply of manpower is far less than the
demand, since so many hotels have come up in the last few years in the
Indian market. We are trying to make our employees more efficient by
improved technologies without compromising the quality of services," says
Jan Smits, chief executive officer (Asia, middle-east and Africa),
Intercontinental Hotels Group.
According to a survey by Federation of Hotels and Restaurants Association of
India and consultancy firm HVS, the average percentage of trained employees
per hotel is 83.3 per cent in 2012. "With supply expected to increase by
nearly 111 per cent in the next five years, the demand for high quality
professionals will continue to increase and will also lead to a steady rise in
compensation levels," the survey says.
"For the first time revenues are falling and employee costs are increasing.
The payroll costs have gone up from 12 per cent to 16 per cent in the last
couple of years," says Ajay Bakaya, executive director, Sarovar Hotels and
"A number of things play out when you are in a tough market. Our brands are
best positioned in their categories. We have a very strong focus on MICE
(meetings, incentives, conferences, and exhibitions). We have continued our
expansion in Kochi, Bangalore, Bhopal and also Aerocity in Delhi," says
Rajeev Menon, Marriott's area vice-president (India, Pakistan, Sri Lanka and
The hotels in India were predominantly in the luxury sector, the additional
supply has come largely in the mid-market space where the tariffs are lower.
This has pulled down the average room rate of the industry. Is it a sign of
correction in hotel prices? Experts argue room rates for luxury hotels in India
at an average are still lower in comparison to some of the gateway cities of
the world like New York, London where tariffs range around $600 a night.

However, it is in the mid-market and budget segment that travellers find a

paucity of rooms. The additional supply coming in these segments would spell
good news for the consumer as it will rationalise the average room rate in the
mid-budget segment. "We see a lot of scope in the mid- and -upper market
which is highly underserved in India. We will be focusing on these segments
through our brands like Country Inn and Park Inn by Radisson," says K B
Kachru, executive vice-president (South Asia), Carlson Rezidor Hotel Group .

Tamil Nadu allots Rs 100 cr for rural

buildings scheme

The Tamil Nadu government on Monday allotted Rs 100 crore towards 'Rural
Buildings Maintenance and Renovation Scheme' during 2013-14 for
renovating government buildings in rural areas across the state.
Making a suo motu statement in the Assembly, chief minister J Jayalalithaa
said works under the scheme would be implemented by local bodies. The
scheme would cover the maintenance and renovation of community centres,
nutritious meals scheme, anganwadis, public distribution shops, milk union
and cooperative societies, town panchayat offices, libraries, burial grounds,
overhead water tanks and sports centres in rural areas.
Attempting to repair roads in rural areas, she announced the creation of the
scheme with Rs 400 crore for which funds would be sourced from the state
Finance Committee as well as the 13th Finance Committee.
Observing that roads using plastic waste of 917 tonnes were laid to a total
length of 1,002 km last year in rural areas, she said, another 1,000 km would
be laid this year. The government has also allotted Rs 50 crore and Rs 20
crore for the construction of 25 panchayats union offices and 200 village
panchayats across the state respectively.

RBI working on improving on housing

finance database

The Reserve Bank is working on further broad basing its home price data
base so that it can monitor among others loan to value ratio, EMI or equated
monthly instalments to income ratio, a top RBI official said. These are the
parameters which are crucial to assess individual affordability of home
loan and its repayments.
The Reserve Bank is also developing a housing asset price monitoring
system covering such details as LTV ratio, EMI to income ratio and price to
income ratio based on housing loan data from select cities collected from
select banks and HFCs." Said Deepak Mohanty, executive director, RBI at an
international seminar orgainsed by the National Housing Bank last week.
Currently there are two house price indices or HPIs available in the public
domain. One is the National Housing Bank's NHB-Residex compiled on survey
based information for 20 cities. The second one is RBI-HPI based on
registration prices information for 9 cities.
RBI's work of compilation of a HPI was initiated by the central bank in 2007,
said Mohanty. It began with Mumbai city. Subsequently, the coverage has
been extended to eight more cities: Delhi, Chennai, Kolkata, Bengaluru,
Lucknow, Ahmadabad, Jaipur and Kanpur. Apart from data for individual
cities, a composite HPI covering these 9 cities is currently being is released
by the central bank on a quarterly basis. As per the Reserve Bank's composite
HPI, house prices have nearly doubled since 2008-09.
Among other issues that Mr Mohanty highlighted, he also said that in order to
mitigate risks in housing finance, besides application of macro-prudential
regulations, there is a need to develop a fixed rate housing loan product of
longer maturity.
Besides, borrowing from banks and housing finance companies, self financing
from private sources, with drawals from provident funds and loans from
employers are important sources of housing finance.

Subhash Chandra's Essel Group launches Rs

1,000-cr realty fund

The $4-billion Essel Group has launched a Rs 1,000-crore real estate private
equity (PE) fund as part of its asset management foray. The fund will have a
corpus of Rs 500 crore, with an option to have an additional Rs 500 crore.
Subhash Chandra-promoted media company Zee Entertainment is the
principal sponsor and anchor investor in the PE fund. Zee has put in Rs 100
crore and Chandras family office trust gave Rs 100 crore as part of the initial
closure of the fund, which took place last week, said Amit Goenka, managing
director and chief executive of Essel Financial Services, the new financial
services arm of Essel Group.
The group got a license for the fund called India Asset Growth Fund Series I,
which will essentially do debt funding for the residential projects in top six
metros, said Goenka.
We will do last-mile funding and bridge financing facilities to developers and
target 20-22 per cent internal rate of returns from our investments, Goenka
added. The group is also looking to launch an offshore fund of $100 million in
the next three-four months to augment the first fund.
After Series I, which is focusing on residential assets, the group is also
looking to launch Series II sometime next year, which will invest in education
The Series I fund has already deployed some funds and it is in the process of
deploying the rest over the next couple of weeks.
The fund has deployed Rs 40 crore in a residential project in Chennai and
plans to invest Rs 80 crore in a project in Mumbai next week, followed by a
Rs 60 crore investment in a residential project in Gurgaon, he said. We will
mainly compete with non banking finance companies (NBFCs) and PE funds,
which do mezzanine financing (a hybrid of debt and equity financing), he

The Essel Group has appointed a six-member investment committee and a 12member investment committee to manage the fund.
The group has proposed the names of former chairman of Knight Frank,
Pranay Vakil, former chairman of Bank of Baroda, Anil Harish, former
chairman of PwC, Jairaj Purandhare, and former chief of the Institute of
Chartered Accountants India, Mukund Chitale, on its investment committee.
The fund-raising scenario in real estate is bouncing back in 2013. According
to data from VCCedge, 15 India-dedicated realty funds have raised $1 billion
in 2012, against $911 million by eight funds in 2011.
In 2013, two funds have raised $91 million. Avenue Real Estate Fund has
closed its fund by raising $64 million, while ArthVeda Star Fund has raised
$26.8 million in 2013.
Indiareit Fund Advisors, the PE arm of Ajay Piramals Piramal Enterprises,
announced plans to raise Rs 200 crore over the next three months for its fifth
domestic real estate fund.
The domestic fund has a total corpus of Rs 750 crore with an option to
expand by Rs 250 crore. Indiareit is also planning to launch an offshore fund
of $300 million (Rs 1,632 crore) next month from investors in Europe, Asia
and Australia.
Other major funds in fund-raising mode include Redfort India Real Estate
Fund ($500 million), Shapoorji Pallonji Real Estate Fund ($500 million) and
ASK Real Estate Special Opportunities Fund ($220 million).

Why rents may head up


House price appreciation in the last five years has brought cheer to home
owners in most metros. But the rent on the same properties hasnt kept up
with the property value. In fact, rental yields, or the ratio of rent to property
values, have actually fallen from five per cent to three per cent over the last

decade or so. Renters and owners may both be wondering if rents are
expected to stay put, plummet through the floor or shoot through the roof.
While reliable data on house prices is available through sources such as the
National Housing Boards Residex Index, similar long term data does not exist
for rents. But data from Savills, a global real estate service provider, offers a
sense of how low rents are in relation to capital values in India. In Mumbai,
buying a new property entails shelling out four times the annual rent, even
with rents increasing in the first half of 2012 and prices falling. Similar data
for London shows that you can buy property for a single years rental value,
indicating higher rents relative to price.
Comparing rent to capital cost may lead us to believe that rents move in step
with house prices. But that isnt true. House rent and prices march to
different tunes.
One big factor that decides rent in a locality is the demand for rented homes
relative to their availability. This is why it becomes important to know the
proportion of owner-occupied homes.
For instance, rental yields in India are often much lower than elsewhere in
the world because relatively few people seek rented homes: 66 per cent of
homes in Indian cities and 90 per cent of homes in rural areas are owner
occupied. Owner occupation is far lower in many international cities such as
Berlin (11 per cent) and New York (45 per cent). Essentially, the number of
people on the look-out for rented accommodation is pretty low in India.
The proportion of floating population in a city, usually seeking employment
opportunities, also decides rent. Bangalore, with nearly 57 per cent of its
homes up for rent, is a good example of a city with relatively high rents.
However, cities with lower proportion of floating population, such as Pune,
and smaller towns, typically have lower rents.
Theory says that in an efficient market, house prices and rents will adjust so
that an individual is indifferent between renting and owning. However, in
reality, it does not work out so neatly. Rents need not always move when
property prices do.
For one, rent control laws in cities such as Mumbai and Delhi keep rents on
some properties out of tune with the market.

Two, many owners may just choose to keep their homes locked up, rather
than rent them out due to other factors. They may be worried about wear and
tear and the tenants willingness to vacate the property. Concerns about
rental disputes, particularly as most rental agreements are informal, may also
discourage renting out. Data from the Ministry of Housing shows that over 1
crore homes in urban areas were empty, as of March 2012. Locked houses
reduce supply and help to keep rents artificially high.
Localised factors sometimes tend to drive rents and prices in opposite
directions. Data from online real estate site MagicBricks shows that in EM
Bypass region of Calcutta, prices increased by 13 per cent in the December
2012 quarter, while rent fell by five per cent. Demand from affluent buyers in
this area led to soaring property prices. On the other hand, in Nizampet area
in Hyderabad, capital value fell by five per cent, while rent rose by five per
cent. Fall in price was due to concerns about construction quality.
Rents may also move out of sync with property prices due to short-term
mismatches in demand and supply in a locality. For example, rental rate for
Bangalores high-end villas was on an upward trend from 2007 due to
demand from ex-pat community and limited supply. The rate of rent increase
has slowed down since 2012, due to reduced demand.
What are the factors one should consider when choosing to rent or deciding
to buy? Affordability is a big factor that makes individuals stay put in a rented
property. Affordability is measured as a multiple of annual salary to house
price, with a multiple of 3 or less considered affordable by international
standards. Soaring property prices in recent years have put many homes
beyond the reach of buyers. Yet the rents on these properties are still within
the reach of renters.
In fact, one may even turn a quick profit by staying on rent and investing the
down-payment in a high return investment instead of buying a home. March
2013 data from real estate advisory firm Jones Lang LaSalle shows that a
1,000 sq.ft apartment in Adyar, Chennai, costs between Rs 1 crore and Rs 1.7
crore and fetches rent of Rs 20,000 to Rs 30,000 per month. Suppose one
were to rent it for Rs 20,000 and invest 30 per cent of the property value
(down payment) at 8 per cent, it would easily cover the rent. This is
particularly true when high interest rates are available on safe investment
Renting may also be preferable when comparing the cash outflows for rent
against the monthly EMI. In fact, December 2012 data from online real estate

portal Makaan.coms buy vs rent index (MBRI) shows that this is the case in
almost all major cities Mumbai, Chennai, Pune, Ahmedabad, Delhi,
Bangalore and Hyderabad.
Exceptions could be when salaries rise faster than property prices. For
example, HDFCs home loan borrower profile shows that the years of salary
needed for home purchase has reduced from 5.1 years in 2002 to 4.8 years in
2011, indicating that salaries are rising faster. Since most of the home
purchases are funded by home loans, one may consider the number of years
needed to save for down payment. A person with an income of Rs 10 lakh and
saving rate of 25 per cent will be able to make the 20 per cent down payment
towards a Rs 40 lakh-property in three years.
Even when salary is stagnant, affordability improves by spending less and
saving more. A low interest rate on home loans and government tax breaks
for home purchase also enable purchase of higher value homes.
For many people, the decision to buy may be based primarily on the ability to
manage the EMI payments, rather than on absolute property price. So a
renter must weigh these financial factors vis--vis the psychological yearning
to be a home owner.
So if rents in India are generally low, can renters count on this happy state to
continue? Sadly, it is likely to change, for many reasons.
Home purchase for ownership or as investment helped buoy home prices,
while metros as well as smaller cities saw anaemic growth in rent. For
example, data from Jones Lang LaSalle shows that rents in Wakad area of
Pune have been stable at around Rs 10,000-12,000 from May-2012 to March
2013, while price per square foot increased from the range of Rs 3,200-3,500
to Rs 3,800-4,800.
However, rents may increase from these levels. As the urban population
grows in the coming decade, demand for housing space in the cities will
Expansion in the working population and higher mobility of employees would
lead to greater demand for rented homes.
As older homes are re-developed to good quality and newer construction, rent
escalation will likely happen too. Also, delays in urban infrastructure
development create rental hot-spots where demand far outstrips supply.

The trend of rents rising faster than prices is already seen in markets such as
Noida-Greater Noida Expressway.
Jones Lang LaSalle data shows that rents increased from Rs 11,000-12,000 in
May 2012 to Rs 12,000-14,000 in March 2013 while sale price per square foot
was stable at Rs 4,000 to Rs 5,500.
Higher rents may not be welcomed by renters, but the higher monthly cash
flow will bring cheer to investors.
REITs in India
If rents are set to climb, is there a way to benefit from this, without all the
hassles of owning a property? Yes, you could benefit if there were Real Estate
Investment Trusts (REIT) in India. REITs raise funds from investors, purchase
rent generating assets and pay out majority of the rental income. So far,
Indian real estate investment has focussed on capital appreciation rather than
income generation. The launch of REITs would offer an alternative to
purchasing property and develop income focussed investing. This could also
potentially reduce speculation and stabilise house prices.
But REITs face a lot of challenges in the Indian context. For one, the low
rental yield may discourage investors. Laws that protect tenants and inherent
long delays in seeking legal recourse are also dampeners. The lack of
transparency in real estate dealings would also make companies cautious
about launching REITs. Tax structure and schemes that offer incentives to
home owners rather than renters also lower REIT uptake.

Uthiramerur, Poonamallee to be pilot taluks

for digitisation of FMB sketches

Uthiramerur in Kancheepuram district and Poonamallee in Tiruvallur district

have been selected as pilot taluks for the digitization of FMB (field
measurement book) sketches.
A direction in this regard was issued by the principal secretary/commissioner,
Survey and Settlement Department, at a meeting held in Chennai on March

The scheme envisages the computerisation of land records, to help land

owners keep tracks or check the status of their land holdings online, without
having to make a written application or appear in person at the taluk office.
At the meeting, district-level land records department officials were asked to
collect applications, along with copies of land ownership documents from land
owners on or before May 10.
These applications will contain details such as a survey number, sub-division
number (if any), ownership/ownership pattern, land pattern/category etc.
They will be submitted to tahsildars through the respective village
administrative officers.
The application will then be processed by the department officials to correlate
them with the master FMB sketch (otherwise known as cadastral map)
available with them.
These FMB sketches were prepared when the UDR scheme (updating of
registry scheme) was announced and implemented by the late Chief Minister,
M.G. Ramachandran, in the early 1980s, official sources said.
The departments will then use software, Collabland, prepared by the National
Informatics Centre (NIC), to translate base data into map forms, create and
merge sub-divisions, and automatically synchronize input data into tables,
and so on.
The initiative is part of the Union-government-funded Computerization of
Land Records project.

Chennai Metro rising - will it ease road


Sriram Amarnath, a software engineer, has just returned to Chennai from the
US after a gap of nearly five years. He was upset to see the congestion
outside the airport due to the construction work going on with regard to the
Chennai Metro Rail project.
But as he moved in to the city, he was awed looking at the magnitude and
pace of the construction of the Rs 14,000 crore project, which is to help

decongest the city roads and take care of the growing demand for the public
transport system.
With the citys current population of over 50 lakh, which is expected to reach
120 lakhs by 2026, the Chennai city is struggling to keep pace with the ever
increasing traffic demand. In the past, every household used to have a
vehicle. But, today, every member of the household is having a vehicle,
putting enormous pressure on roads.
Further, over 3,200 buses move nearly 52 lakh passengers every day. All
efforts of the government seem to be falling short to meet the ever increasing
demand. School children dangerously clinging on the bus foot-board is a
regular scene.
The Chennai Metro could thus become a major source of public transport
system in future. It is going to be a part of an integrated multi-modal
transport system along with the planned Mono Rail project, which is still in
the drawing board stage. This is in addition to the strengthening of the suburban rail service, the Mass Rapid Transit System and the Metropolitan
Transport System.
The Tamil Nadu government gave its in-principle approval for the Chennai
Metros initial corridors in October 2007 and the Centre gave its nod in
January 2009.
The project envisages creation of two initial corridors under the proposed
phase-1 with a total of 45.1 km. The corridor from Washermenpet to Airport
will be 23.1 km and the other corridor from Chennai Central to St Thomas
Mount will be 22 km.
The portions of Corridor-1 with a length of 14.3 km from Washermanpet to
Saidapet, and Corridor-2 with a length of 9.7 km from Chennai Central to
Anna Nagar 2nd Avenue will be underground and the remaining portion will
be elevated, says information available in the Chennai Metro web site.
Huge tunnel boring machines, including Chinese made, are continuously
drilling the citys hard soil to enable air-conditioned trains criss-cross the city
underground in the next two to three years.
As on March 31, nearly 10 per cent of tunnelling work for the project has
been completed. Out of the total 27,220 metres, tunnelling work of 2,731
metres has been completed.

Projects worth over Rs 10,000 crores have been awarded to various

companies from countries like India, Russia, Germany, Japan, France and UK.

Worst may be over for India: Moody's


The worst may be over for the Indian economy, a new report by Moody's
Analytics has said. It sees economic growth at around 7% from 2014 onwards
in its India Outlook report titled The Worst May Be Over.
"The December quarter was likely the bottom of the economic cycle, and we
anticipate a steady acceleration in GDP growth across the coming year. Our
forecast from 2014 onwards is for economic growth of around 7%, which is
India's new rate of trend growth," the report read. At the same time, Moody's
has cautioned the government against targeting double-digit GDP expansion
saying any growth beyond 7% without reforms will fuel inflation that will
result in "more painful" future adjustments .

The apartment ARGUMENT


You dont need superior vision to spot the difference. Step back from the
street and youll grasp the architectural evolution of the city. Over the last
decade, whole orchards have been force-fitted into planters, verandahs have
been julienned into bitty balconies and villas have been sliced and stacked as
multi storey buildings. It isnt just the landscape, though, that has evolved.
For homeowners who boldly went where no predecessor may have gone
before to put their bungalows on the block and set up house in apartments
this was no mean move. One required not only adjusting to unfamiliar spatial
arrangements, but also learning new social conduct.

From never having exchanged a word with ones neighbours in the adjacent
villa to encountering them on the landing daily, from prizing ones privacy
behind boundary walls to having strangers tramp routinely past your door,
from observing strict dietary rules on your premises to coming to terms with
non-kosher aromas wafting down the stairwell, from lording it over your land
to adjusting to the democracy of a residents association. Is the barter worth
it? You bet, Chennaiites chorus.
Seeta Raman (name changed) was urged by her mother to consider the
switch a decade and-half ago. The old house was difficult to manage and we
felt apartments would be easier to maintain. Better security was another
positive aspect.
It was, admittedly, a big decision. The Ramans had lived all their lives in their
bungalow on Boat Club Road, on five grounds (12,000 sq ft) of land. However,
when they entered a joint venture with a leading developer, Seeta used her
know-how in spatial planning to propose a design that would not completely
obliterate accustomed assets such as open space, greenery and privacy. I do
miss our garden, she admits. But if you plan you can accommodate large
balconies and open areas. I think our space is now better utilised.
Most homeowners who approach developers, no longer need to be won over
to the apartment argument. Pon Ravichandran, director of Greentree Homes,
a real estate company, says people want to unlock the value of their
property. According to Jayanth Hemdev, business director at Hemdevs, a
real estate consultancy firm, the concept of apartments arrived in Chennai in
the early 1970s, and from the 80s, multistorey buildings sprang up.
Ravichandran says that an independent house was once a sign of status;
conversely a homeowners social value fell if he lived on a co-owned estate.
These codes have far less franchise today. Landlords have realised theyd be
foolish to hold fast to their properties and chosen to compromise on their
inherited values, he says.
Some will compromise, but only to a point. K N Radhakrishnan, a former
chartered account, insisted on a lone condition when he signed up for an

overhaul. That the buildings new owners be vegetarian, he says. While the
Radhakrishnans main objective, security, was met, the place did make a few
demands of him. At home, I could walk around without a vest, but in the flat,
I have to keep it on, he says, for fear that someone might spot him through
the windows. I have to also remind myself to use water with caution, keeping
the needs of neighbours in mind.
For some, civic-mindedness is the unforeseen payout of the exchange, as they
have to deal with the dispensation of resources and troubleshoot collectively.
Nagendra Babu, who sold his house in Nungumbakkam to the developer Isha
Homes, says his living space may have been reduced, but the benefits far
outweigh the losses. I now share the expenses of maintenance, water and
security with my neighbours. Security men screen strangers at the gate,
while at our bungalow vendors would come right up to the door, he says.
We also enjoy greater interaction with our neighbours, particularly at
cultural get-togethers organised by the residents association.
Sometimes, owners instinct runs deep and one forgets she/he has
surrendered their privileges with their land. Suresh Krishn, MD of Isha
Homes says that the few who continue to consider themselves proprietors
often have run-ins with present owners. They disregard parking instructions,
and bristle when theyre not accorded the same respect as, say, the building
society president, he chuckles. But then home truths are not always

At 5.96%, inflation falls to over threeyear low


At 5,96 per cent, the Wholesale Price Index-based inflation in March grew at
the slowest rate in more than three years. It is significantly lower than the
7.69 per cent recorded in March last year and 6.84 per cent in February
2013. It is also lower than the 6.8 per cent projected by the Reserve Bank of

WPI inflation falling below the 6 per cent mark for the first time since
November 2009 helped push up the Sensex (up 0.7 per cent) and the bond
markets. This softening has cemented expectations that the RBI will cut key
rates at its next policy review on May 3.
Wholesale prices, which are the main gauge for inflation in India, have been
trending downwards, from 8 per cent in September last year.
Encouraged by the latest WPI numbers, Planning Commission Deputy
Chairman Montek Singh Ahluwalia expressed confidence that price situation
would improve further in the coming months. I have to say that monthly
numbers can jump around, but it has been our view that in a gradual way
inflationary pressure is coming down, he said.
January numbers
The Commerce and Industry Ministry also revised upwards the WPI-based
inflation for January to 7.31 per cent from 6.62 per cent earlier. Much of this
rise was contributed by the lagged adjustment to the fuel index.
These monthly numbers in our system are not so robust that you dont get a
correction. If the January number has been raised upwards, then the extent of
slowing down of inflation is greater than the unrevised number show,
Ahluwalia said.
So far this year, the RBI has cut the policy rate twice by 25 basis points each.
Despite the softening in inflation, the RBI is expected to be in a tough spot on
taking further rate-cut decisions. This is because the recent deterioration in
current account deficit is likely to keep interest rates high and cool the

Use your house for a cheaper loan


With lower interest rates and longer tenures, bank loans against property are
more cost-effective than personal loan.
Even if you are a meticulous saver, there may be times when your finances
are strained and you need a little help to tide you over. Though borrowing
from family or friends is a preferred option for many, if the amount you need

is large, it may not be a good idea to stress their finances as well. A better
option would be to leverage an asset you ownyour house.
You can use your house as collateral to take a loan from a bank. The latter
will exercise due diligence as far as the property is concerned, appraise its
value, and offer you up to 70% of its value as loan. Since this is a secured
loan, you can get a higher amount than the one you will get for an unsecured
loan like a personal loan. Typically, the tenure for such a loan is 1-9 years, but
some banks may be willing to extend it to 15 years if the loan is large. The
interest rate, which can be floating or fixed, varies from 12-16%, which makes
them cheaper than personal loans (see table).
Its also a better option since the tenure for these loans is longer than those
for personal loans, which offer a maximum term of five years. Of course, you
can prepay the loan, with the banks following the same guidelines as those
for regular home loans. Though they cannot charge any fee for floating rate
loans, there is a 2-4% penalty for fixed rate loans.
How to get a loan against your property?
If the property you are taking a loan against has more than one owner, all of
them will have to be joint applicants to avail of the loan. You can get a loan
against any type of freehold property, from a house to a plot of land. It also
doesnt matter whether you live in that house or have given it on rent. The
most important criterion is that the title of the property should be clear and
there shouldnt be any encumbrances, says Pankaaj Maalde, head, financial
planning at Apnapaisa.com.
The bank will check all the documents related to the title of the property, as
well as ask you for proof of residence. If you are employed, you will have to
provide bank statements for the past six months, while a self-employed
person will have to provide a certified financial statement for the past two
The loan offered by a bank will vary from person to person since it depends
on various factors, including the work profile and age of the borrower.
Typically, the income proof for three years is required to have the loan
against a property sanctioned. So, the minimum age is 24 years. Similarly,

lenders prefer that the loan be fully repaid while the borrower is employed,
which is why the maximum age till loan maturity in case of a salaried person
is 60 years, while for self-employed individuals and consultants it is 65 years,
says Rajiv Raj, director of CreditVidya.
The bank will also check your credit history through the Credit Information
Bureau India Ltd (Cibil) and go through your repayment track record. Based
on your credit score and the above documents, the bank will ascertain your
repayment capacity. In case you have ever defaulted on any bill payment, it
will reduce your chances of getting a loan. After the bank is satisfied with the
paperwork, it will offer you the loan, which will typically range from 40-70%
of the value of the property.
Is this the best option?
The main reason people usually dont opt to mortgage their house is that they
dont want to take the risk of the bank taking over the property if they are
unable to pay the dues. Another disadvantage is that unlike home loans, there
are no tax incentives while paying the EMIs. However, this is only in the case
of a salaried person. A businessman can claim tax deduction on the entire
interest amount paid on the loan if he can prove that the loan was genuinely
used to improve his business.
However, this tax advantage is also available if the businessman takes a loan
against gold or shares/securities that he owns. The interest rate for a loan
against shares or securities varies from 12-15%, while that for gold ranges
between 14% and 25%. In the case of the former, a lender will be willing to
offer a loan that is 40-60% of the value of the securities, while for a gold loan,
you will be able to get 50-70% of the value of the gold you pledge. In either
case, if you default, the bank will sell the pledged shares or gold to recover its
dues, which is a smaller loss than losing your home. However, if you need a
large amount of money that runs into lakhs, the only viable valuable asset
that you may be able to pledge is your house.

Radiance Realty to scale up



Radiance Realty, a Chennai-based premium residential projects developer, is

scaling up operations and its promoters are considering diversifying into
utility scale renewable energy projects.
The developer, backed by a war chest swollen by the promoters selling off
their road and infrastructure construction business, NAPC, to the
multinational Vinci Group in January 2012, has multiplied its project pipeline
several fold. NAPCs revenue at that time was about Rs 600 crore, having
been in the business for over six decades.
Varun Manian, Managing Director, Radiance Realty, said as of last year the
real estate development business had delivered over 3.82 lakh square feet of
built up space. It now has over 27.80 lakh square feet under construction in
Chennai on the IT corridor, South Chennais fast-growing commercial and
residential area. Radiance has finalised deals totalling over 40.03 lakh square
feet of projects for completion over the next four-five years. More than 60 per
cent of the projects are fully owned by Radiance and about 40 per cent are
joint developments.
Manian said over Rs 650 crore equity has been brought into the projects in
the past year and there are plans for more before Radiance looks at
alternative sources of funds.
Radiances projects, mostly in the suburbs of Chennai, are estimated to bring
in over Rs 7,000 a square feet as they are mostly premium developments, an
indication of the revenue potential, he said. It is also planning a 70-acre villa
project in Coonoor, a hill station in the Nilgiris.
Renewable energy will be another major area of development, he said. It will
be a separate business which will look at the MoU route with State
Governments for utility scale projects.
Wind and solar projects are under consideration, he said.

BHEL developing products to make

solar energy cheaper


The corporate R&D arm of power equipment maker BHEL is set to launch
products aimed at making solar power production cheaper.
First in the pipeline is a new solar thermal sun tracker -- a system for
tracking the sun to produce increased power output from the solar panels
mounted on it.
We are preparing to commercially launch this product in the next six to eight
months. Our prototype has shown that the tracking system can generate 2535 per cent additional energy when compared to the conventional modules
mounted on the fixed structures, said S. Sekar, GM of BHELs corporate R&D
The operation of the sun tracker is based on simple liquid balancing system.
Hence, there are no motors, gears and control system for the operation.
We are currently fixing this system in one of our existing solar units to finally
evaluate its operational and cost efficiencies, he told media persons here
The R&D wing is investing over Rs 1,300 crore in developing news products
in the current fiscal against Rs 1,248 crore last year.

Delhi-NCR residential housing

market still on slow burner

The Delhi-National Capital Region (NCR) residential market seems to be

going slow on new launches, with the segment witnessing a 31 per cent dip
compared with the second half of fiscal 2012-13.
A report by property portal Knight Frank India says developers are struggling
with liquidity crunch due to project delays, while consumer confidence is
marred due to higher interest rates, inflation and the current economic
The report says that nearly 33,500 residential units were launched in the
second half of FY13, showing a dip of almost 31 per cent compared with the

same period a year ago. However, there was a 6 per cent increase in project
Greater Noida recorded a 40 per cent increase in project launches over the
second half of FY12, clearly showing that the developers were concentrating
on the affordable segment.
Incidentally, Greater Noida witnessed the highest number of launches in the
second half of FY13, taking up about 50 per cent of the total pie. Most of the
project launches were in the price range of Rs 2,900-3,500 per sq ft. Gurgaon
followed suit in the second place.
The NCR residential market has an estimated 1.4 lakh units of unsold
inventory, which is approximately 27 per cent of the units under construction.
Nearly 5.2 lakh residential units are under various stages of construction in
the NCR market. Almost 50 per cent of this is expected to be ready for
possession by the end of 2014. At least 58 per cent of the under construction
units fall in Noida and Greater Noida, followed by Gurgaon, which constitutes
nearly 24 per cent of the under construction units. About 66 per cent of the
unsold units are concentrated in Noida and Greater Noida, due to the start of
a number of large projects here.
The NCR residential market observed total absorption of 33,200 units in
second half of the current fiscal showing a dip of about 12 per cent, compared
with the same period a year ago. Greater Noida is the only micro-market that
has shown an upward trend in sales, primarily due to a number of project
launches in the affordable range. While Faridabad is the only market to have
shown stable demand compared with H2 FY13. Nearly 65 per cent of the
absorption has been in the affordable and mid-segment housing.

Fillip to TNs growth with urban


The state government on Tuesday said it aims at a planned urban growth and
plans to operationalise a Land Use Information System, which would be made
available on the Internet.

With the online system, the public can gather details on construction permits
for residential sites at the click of a mouse.
Replying in the Assembly on demand for grants, Housing and Urban
development Minister R Vaithilingam expressed the governments vision to
increase the role of planning in urban development through the expansion
and creation of new plan areas across the State.
Plan areas are those coming under a master plan, outside the ambit of
Chennai Metropolitan Development Authority (CMDA).
Currently, there are vast areas in the state that doesnt come under plan
areas. Inclusion in planning areas would augment their development.
The minister announced the expansion of four Composite Planning Areas,
upgradation of two Local Planning Areas into Composite Planning Areas and
the creation of four Single Local Planning Areas.
Composite Planning Areas in Tirunelveli, Thoothukudi, Vellore and Nagercoil
would see expansion and the Local Planning Areas of Krishnagiri and Ooty
would be elevated to the status of Composite Planning Areas.
The government would also establish new Single Local Planning Areas in
Peranampattu, Kangeyam, Vellakoil and Gudlaur (Theni District)
Vaithilingam also informed the House that the government would take up the
construction of 5,653 housing units and 20,699 slum tenements through the
Tamil Nadu Housing Board (TNHB) and the Tamil Nadu Slum Clearance
Board respectively.
Also, 3,112 TNHB quarters set to be rented out to government servants were
to be allotted to local bodies and other government bodies in the face of low
internal demand, he said.
Vaithilingam also announced that his department would carry out a rain
water harvesting audit to review the implementation of the norms, which had
been made mandatory by the previous AIADMK government.
The Chennai Metropolitan Development Authority would also look into the
feasibility of developing the eastern stretch along the Outer Ring Road in
Chennai, he added.

It's going to be another tough quarter

for infra firms

Infrastructure companies continue to be plagued by concerns of poor

liquidity, tough market conditions and delays in implementing projects as they
report fourth quarter numbers.
There is a good chance that most of the companies will more or less mirror
their performance of the third quarter ended December 2012.
Interaction with some of the industry players shows there is not much
likelihood of change in the performance of most infrastructure companies as
the macro-economic environment continues to be worrisome.
The numbers will be stretched further when it comes to infrastructure
companies such as Lanco, GVK and GMR, which have gas-based power plants
running on natural gas supplied from KG-D6 fields.
M. Gautham Reddy, Executive Director of Ramky Infrastructure, told Business
Line that the quarter will continue to be pressured, and marked by a high
interest rate regime and poor cash-flows, with funds hard to come by.
Liquidity is something most companies are having problems with. Having
committed funds for the equity component, most companies had a tough time
steering through the current environment, he said.
R. Balarami Reddy, Executive Director of Finance, IVRCL, said: There is
unlikely to be any marked difference in terms of performance of
infrastructure companies during the fourth quarter. But the changes
indicated might augur well as we have entered the new financial year.
Interestingly, the changes announced by Prime Minister Manmohan Singh
and the RBI seem to be gradually being implemented. State Bank of India has
brought down interest rates by about 2.5 per cent and we hope other banks
will follow suit.
With inflation seeming to moderate, we hope the RBI will have greater
flexibility in handling the interest rate regime, he said. T. Adi Babu, Chief
Operating Officer, Finance of Lanco Infratech, said: The results for most

companies are likely to be similar to what they recorded during the third
quarter as the market conditions have not changed for the better.
Even if certain changes are brought about at the macro level by the Centre,
it will take at least a couple of quarters to yield results. While some
companies have begun to divest stake in companies, the market condition
from a global investors perspective is still some way away from being ideal
for investment, he said.

Referring to power projects that are dependent on gas supply Krishna

Godavari Basin D6, Adibabu said most plants are working at below threshold
level. If in the third quarter, they managed to break-even, during the fourth,
their performance will impact overall financials.
The stock market seems to have battered infra stocks, with the majority of
them quoting at low prices lately.

State Bank chief wants 100 bps cut in


A cut in Cash Reserve Ratio will be much more effective in bringing down
lending rates than a repo rate cut, said State Bank of India Chairman Pratip
A strong votary of abolishing the CRR, the SBI chief said he will bring the
base rate down by 20 basis points, if the Reserve Bank of India cuts the CRR
by 100 basis points. Base rate is the minimum lending rate below which
banks cannot lend.
Policy meeting
The RBI will review key policy rates in its annual policy meeting scheduled on
May 3.

Currently, the CRR (the slice of deposits that banks keep with RBI) and the
repo rate (the interest rate at which banks borrow short term funds from the
RBI) are at 4 per cent and 7.50 per cent, respectively.
Repo rate has very little or insignificant impact on the cost transmission. The
only thing that can significantly bring down the base rate is the CRR.
Looking at the inflation numbers yesterday, I am encouraged to recommend
a 1 per cent (100 basis points) reduction in CRR, Chaudhuri said.
Also, a CRR cut will release more liquidity into the banking system. The
banks will be less desperate for deposits so it (liquidity) will have a more
benign impact on the interest rates, the SBI chief said.
Chaudhuri, who mooted the idea of banks being allowed to introduce ultrashort term deposits of three days maturity, said there will not be any liquidity
management issues if such a product is introduced.
Pointing out that absence of such a product is making banks uncompetitive,
Chaudhuri reasoned that if banks can take care of seven-day deposits, then
they can take care of three-day deposits too.
The SBI chief said that he has explained the new idea to the RBI top brass.
In any case, there is no rule saying that customers cannot withdraw money
before the seven-day maturity period, he said. So, if a seven- day deposit is
stable then three-day deposits will also be stable.
SB deposits
Chaudhuri pointed out that the entire savings bank deposits of banks
constitute 25 to 40 per cent of their total deposits and they are with drawable
on demand.

Arakkonam to come under Chennai


The Chennai Metropolitan Area (CMA) is all set to cover the whole of
Kancheepuram and Tiruvallur districts as well as Arakkonam taluk in Vellore

Minister for housing and urban development R. Vaithilingam on Tuesday

made an announcement on the Chennai Mega Region to this effect.
A preliminary report to expand the jurisdiction of CMA to 8,878 sq km is
being examined by the government, said Mr. Vaithilingam.
The existing jurisdiction of CMA covering 1,189 sq km in Chennai,
Kancheepuram and Tiruvallur districts was declared in 1973-1974.
Areas outside the CMA are witnessing rapid development and there is a need
to integrate these developments with Chennai, he added.
Census 2011 data confirms that population growth within Chennai district
has slowed, while in the adjacent districts of Kancheepuram and Tiruvallur, it
has increased.
The focus of planned development in the expanded CMA therefore, is likely to
be move beyond Vandalur-Kelambakkam Road towards the south.
Satellite Township
The Minister also announced a development plan for the TiruporurMaraimalai Nagar Corridor comprising 134 villages covering an area of 562
sq. km. This will involves the preparation of base maps, collection of
demographic and social data, a physical survey, preparation of existing landuse maps, analysis of current level of infrastructure facilities, projection of
population and future needs and working out spatial strategies.
The Thirumazhisai Satellite Township scheme will be implemented at the
earliest, said Mr. Vaithilingam. The creation of this township, on the
Chennai-Bangalore National Highway, was announced by Chief Minister
Jayalalithaa in 2011.
The township will come up on 311.05 acres of land, owned by the Tamil Nadu
Housing Board. It will include the villages of Chembarambakkam,
Kuthambakkam, Parvatharajapuram, Narasingapuram and Vellavedu.
A total of 12,000 flats will be constructed here, and be made available to
economically weak sections and to low and middle-income groups.
Reconstruction scheme
The Minister also announced reconstruction schemes in 17 areas within the
city. The schemes include the construction of 3,646 flats as part of the Tamil

Nadu Government Servants Rental Housing Scheme and 2,606 flats under a
self-financed scheme at an estimated cost of Rs. 1,740 crore.
Occupants in several existing dilapidated structures have already been asked
to vacate. The Tamil Nadu Slum Clearance Board will complete the
construction of 16,856 tenements in Chennai at a cost of Rs. 913.60 crore
under the JNNURM in 2013-2014.
A socio-economic survey of slums under the Rajiv Awas Yojana is also
underway in the city.
The survey is part of a larger scheme to ensure the city is slum-free in the
near future.

Domestic solar cell makers slam govt

for failing them

Indian manufacturers of solar cells and modules have lashed out against the
government, complaining that authorities are not supporting the industry,
which is incurring huge loss and is on the verge of shutdown. The domestic
solar industry association is lobbying hard for anti-dumping duty on imports
and greater policy support for indigenous products.
The solar cell and module manufacturing industry is currently operational at
only 10% of its capacity. The industry blamed it on cheap imports from
Addressing the media for the first time, Indian Solar Manufacturer's
Association (ISMA), an association of domestic solar cells & modules
manufacturers, said it has asked the government for a clear policy for the
domestic solar industry. For the second phase of the national solar mission,
there are still no clear instructions for the project developers on the domestic
equipment sourcing.
"Investment worth Rs 10,000 crore has jeopardised because there is no
headspace for the indigenous industry among the foreign players who are
dominating the Indian solar market," said S Venkataramani, Indian Solar

Manufacturer's Association (ISMA).

The current capacity of Indian solar manufacturing is roughly 1,000 mw of
cells and 2,000 mw of modules. Most of the units, including Moser Baer BSE
0.63 %, Lanco, Tata Solar have shut down their manufacturing capacity.
Others like Indo solar BSE -2.26 % have scaled down to 5-10%.
Domestic manufacturers also lodged a dumping case last year in January
against China, US, Taiwan and Malaysia at Directorate of AntiDumping (DGAD) and has sought anti-dumping duty in the range of 35-40 to
be levied on products from these countries depending on the amount of
There are five Chinese, two each of Malaysia and Taiwan and one US-based
solar company that have been put in dock by DGAD for dumping solar
equipment in India.
In the first phase of the national solar mission, there was a domestic content
clause, under which solar power project developers were supposed to source
30% of their equipment from domestic market. Just before the
commencement of the second phase, the US solar industry has questioned
this clause at the WTO stating that it's hurting their imports. Hence,
the Indian government is reviewing the clause.
"This clause motivated many of our industries to establish world class
manufacturing facilities with expandable capacities. More effective
continuum of the policy will logically support the entrepreneurial decisions

Oversupply of retail space hits rents

in South India

A mismatch between demand for retail space and supply is growing worse in
the south of India, with a projected increase of 100% by 2014, as developers
continue to build malls in a saturated market. Bangalore for instance will

have 27.602 million square feet of operating space an oversupply of 141%

over the next two years. Similarly, Hyderabad will have 18.853 million sq ft of
mall space leading to a potential 114% oversupply by 2014.
However, bigger markets like greater Mumbai and Delhi NCR will keep pace
with the demand, says Asipac, retail planning consultancy firm.
"The upcoming supply will outpace the demand with 30.053 million sq ft of
demand hitting the market as against supply of 56.399 million sq ft by 2014,"
said Amit Bagaria, chairman, Asipac Projects. South India has about 50
million sq ft of operational mall space across 130-odd malls.
Builders including Sobha Developers BSE 1.21 %, Prestige Estates Projects
BSE 3.38 %, Suraj Developers, and Century Real Estate have either launched
or are in the process of launching mall projects.
The mismatch has led to rental rates staying f lat or increasing just
marginally, going up between 4% and 9% for city centre locations in
Bangalore, Hyderabad and Chennai in 2012.
"There is pressure on rentals in malls that do not have footfalls," says
Shrinivas Rao, CEO Asia Pacific, Vestian Global.
The excess supply of retail space is further expected to benefit retailers who
are looking at increasing their presence. "We are renegotiating rentals for
stores where lease or lock-in periods are ending," said Mark Ashman, CEO
HyperCITY Retail India. The company plans to take its store count to 20-24 by
2016 from 13 now spread over 30,000 to 50,000 sq ft.
Louis Philippe, the apparel brand from Madura Fashion & Lifestyle is being
choosy signing new properties and is looking to tie up with successful malls
only. "Oversupply will lead to failure of malls and brands. We are very
selective in our approach and see brand mix, mall developers and catchment

before signing the property," said Jacob John brand head at Louis Philippe.
Asipac estimates that out of 175 operational malls across India, only 30 are
performing, while the rest are running at a loss. It further says that top 20
cities in the country can absorb per capita mall space between 1 sq ft and 1.5
sq ft depending on the economic growth projections. However currently it is
below 1 sqft for all metros.

FDI in hospitality has made investment

atmosphere buoyant

We see significant opportunity for outbound travel to key Fairmont markets

including Dubai, Abu Dhabi, Singapore, Shanghai, Beijing.Jennifer Fox,
President, Fairmont Hotel and Resorts
Luxury hospitality chain Fairmont Hotel and Resorts entered the Indian
market with a 255-room hotel in Jaipur last year. The Canada-based hotel
chain is now exploring options to expand its footprint to other Indian cities.
Jennifer Fox, President, Fairmont Hotel and Resorts, toldBusiness Line about
the groups future plans.
What are your plans for expansion in India?
Fairmont entered the Indian market in early 2012 with its first property in
Jaipur. Well look to develop city centre hotels in urban areas such as
Bangalore, Delhi and Mumbai, while destinations such as Goa will serve as an
attractive location to grow our resorts portfolio.
We are working with partners and developers to look for opportunities in the
What are the occupancy levels of the hotel in Jaipur? Why did you select
Jaipur and not a metro?
We have received a positive response since our launch in August last year. As
far as the market is concerned, we have had a good response from both

wedding and MICE (meetings, incentives, conferencing, exhibitions)

segments. Overall, it has been a positive opening.
Jaipur is part of the famous golden triangle (Delhi-Agra-Jaipur) which serves
huge benefit for us. Most of the international tourists usually visit the golden
triangle. Moreover, it offers great connectivity. With the conversion of 90 per
cent of the NH-8 into an eight-lane highway, the travel time from Gurgaon to
Jaipur is now down to three hours. Also, NH 11 is yet another important
tourism highway for Jaipur that connects Agra.
The city appeals to a mix of rich cultural, historical and business interests and
is definitely a huge market for us.
From a global perspective, how important is the Indian market?
We see significant opportunity for outbound travel to key Fairmont markets
including Dubai, Abu Dhabi, Singapore, Shanghai, Beijing, in addition to
locations in Canada, US, Europe and Africa. With the launch of Fairmont
Jaipur, it will definitely assist us in introducing Indian travellers to our brand.
With Subroto Roys Sahara India Pariwar group now being the owner of the
Plaza Hotel New York, what difference does it make to you as the
management company of the hotel property?
The hotel is currently owned by Sahara India Pariwar and Kingdom Holding
Company, chaired by HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud
and a shareholder of our parent company Fairmont Raffles Hotels
International. The Plaza will continue to be an iconic property in New York
and a distinctive member of the Fairmont Hotels and Resorts portfolio, with
all the services, amenities and programmes that this entails. We look forward
to working with our new owners and will of course remain open to exploring
additional opportunities with Sahara.
What is your outlook for the Indian hospitality sector?
The hotel industry is going through an interesting phase in India.
International hotel chains are influenced by the growing economic setting
and demand for more hotel rooms across categories. In 2013, the market will
definitely be in a stronger position than 2012. The first quarter results will set
out the trend for the rest of the year. It will have a positive impact, especially
with incentive travel becoming big within the region.
The Indian Government is proposing several measures that will increase
investment in the hospitality sector and accelerate the process of growth.
With the opening of FDI in hospitality, the market is attracting more foreign

investment onto Indian shores. This in turn has the investment atmosphere
buoyant for Indian investors and promoters of hotels as well. The year 2013 is
likely to increase and shape investment in the hospitality sector, across a
broad price band.
What are the challenges in the India market?
Being a new international brand poses more opportunities than challenges.
Indias luxury hospitality sector is growing and interestingly at a rapid pace.
The Indian luxury hospitality industry has recorded healthy growth fuelled by
hearty inflow of overseas tourists as well as increased tourist movement
within the country.
We remain optimistic on the long term growth story for the Indian hospitality
industry. This is further reinforced by the India-centric growth strategy of
several global hotel players.
What is the impact of the slowdown in the global economy and Indian market
on Fairmont Hotels and Resorts?
Last year was admittedly challenging, though we werent impacted as heavily
as some of our competitors due to our property mix and current distribution.
However, along with savvy travellers wanting a luxury product and unique
experiences, guest expectations are also increasing on the service side, so we
are equally focused on this front.

Real Value to raise Rs 200 cr from PE


Chennai-based real estate firm Real Value Promoters Private Limited plans to
raise Rs 100-200 crore from private equity (PE) players for its projects.
Announcing the companys new Rs 500-crore residential project Padmalaya,
here, V Suresh, chairman and managing director, Real Value, said so far the
company had completed 3.3 million sft of residential projects and another 3
million were currently under construction.
Besides, the company has planned for another 6.2 million sft of new projects
across categories, including budget (Rs 20-30 lakh), medium (Rs 70 lakh to Rs
1 crore) and upmarket (Rs 10 crore-plus). One of the projects include an
exclusive 18 high-end Condominium at Greenways Road, Chennai.

The total construction cost of these projects would be around Rs 2,000 crore
and will be completed in the next 5-6 years, he said here. The company
would look at accruals to the maximum extent to fund the projects and then
look at domestic funds.
Meanwhile, the company is in the process of finalising one or two projects,
which will be backed by PE funds and going forward, the money would be
raised on a project-to-project basis, he said.
In April 2010, the company had raised around Rs 50 crore from ASK Property
Investment Advisors, a venture of the ASK group set up to manage real estate
dedicated funds. The money was infused in a residential project spread across
4.32 acres at Kottivakaam, here.
About Padmalaya, coming up near Siruseri here, he said it would have 1,154
apartments from 1 BHK, 2BHK and 3BHK, with starting price of Rs 3,199 per
sft. The project will be taken up in phases and the first one with 600 units will
be ready by April 2016.

Extra floors violate bldg norms

Builders Get Approval for Single Storey House from
Corporation, Add More Levels Later

The rash of construction in the city hides a tale of unauthorised additions that
is leading to haphazard, and often hazardous, development.
Builders often take advantage of weak enforcement mechanisms to add floors
to buildings that have permits for just a ground and a first floor. The sheer
number of notices issued points to
a larger trend of builders and house owners violating approval guidelines
after they get property tax assessment done.
For ordinary buildings, as the government classifies ground and first floor or

stilt plus two

floors, the corporation provides plan approval. We do not have a system of
issuing completion certificates for ordinary buildings, said a senior
corporation official. The property tax certificate issued after assessing the
building is considered a completion certificate.
The corporation has sealed 137 buildings and demolished 13 structures that
violated regulations in the last two years. Corporation records show that 343
unauthorised buildings were served lock and seal notices from April 2011 to
March 2013.
Officials say more than half the building owners took corrective measures
or regularized structures. When we notice an unauthorised building we
issue a lock and seal notice stating the deviations. If they do not comply
within 30 days, we seal the building, said the official. A building violating
guidelines during construction is issued a stop work notice.
Many house owners add extra floors or extend the building after a few years.
Last year, three people died when their old house in Triplicane collapsed
during renovation. The owner did not have permission from the civic body to
extend the building.
For buildings that have four floors are two to four storeys, the builder has to
seek permission from CMDA. The housing development minister has to
approve buildings higher than five storeys.
Officials say buildings that construct additional floors illegally create
jurisdiction problems.When we see a three storey building we assume it is
under CMDA. We dont know that the approval was for an ordinary building,
and granted by the corporation three decades ago, said an official. Houseowners say they are awaiting CMDA approval when we serve lock and seal

Just after the Triplicane tragedy, CMDA gave the civic body the right to lock
and seal buildings that added floors after initial approval. Since we gave the
initial building plan approval, we have the
right to seal the bulidings too, said the senior officer. The
corporation decided to identify
houses and shops in continuous building areas, found in older parts of the city
like Mylapore, Triplicane and North Chennai, which were weak and required
demolition nor strengthening.
Junior engineers were instructed to conduct inspections at least once in two
months. Sources said more than 100 buildings each in Mylapore, Triplicane
and Pudupet were identified as dangerous and were issued notices to be
strengthened. However, the number of buildings strengthened is not known.
Enforcement and followup of notices issued is weak, admit senior corporation
officials. Demolitions are ordered only if officials feel the building could pose
a danger to the inhabitants or general public. It is usually a last resort
measure, said the official. We demolish only the obstructive or illegal part
of the building.
Different organisations provide sanction depending on the type of building
Chennai corporation:
Ordinary buildings; ground plus one floor
Chennai Metropolitan Development Authority (CMDA): Special
buildings; ground plus three floors ; Housing development department: Multistorey buildings; ground plus four floors or stilt plus five floors.

AGs housing scheme smacks of scam


The accountant general's office in Chennai, the watchdog of government

spending in the state, is now under the watch of its parent comptroller and
auditor general (CAG) of India for alleged irregularities in the allotment of
plots under a housing scheme.
The 1989 housing scheme by the AG's Office Staff Cooperative Building
Society was to apportion plots on a 7-acre land among 96 employees.
However, documents available with TOI show that 13 senior officers were
included on the list and more than one plot was allotted to some of them in
contravention to rules and without the approval of the society's general body.
The 96 original beneficiaries had paid an advance of about Rs 26,000 each for
the purchase of the 7 acres in 1989. However, the plan approved by the
Chennai Metropolitan Development Authority (CMDA) on March 21, 2013
mentioned 125 plots.
Documents show that the society's special officer C Saravana Murthy last
month allotted 25,000sqft of excess land to 13 officers who were not on the
original list. Murthy said these people have to pay about Rs 10 lakh, but
sources said this is much lower than the market rate of Rs 70 lakh per ground
(one ground is 2,400sqft).
Officials with the state cooperative department said this is in violation of the

Tamil Nadu Cooperative Society Act, 1961, as any land allotment under the
scheme has to be approved by the general body of the housing society. The
AG's office housing society has more than 3,000 members.
When asked about the legality of the additional allocation, Murthy said he had
merely followed a convention with the approval of principal accountant
general R S Rangarajan and the office of the registrar of cooperative societies
(housing). When contacted by TOI, however, registrar M Rajasekar said the
extra allotment was against convention, and Rangarajan said he was not
consulted. "The general body's approval is mandatory for any land allotment,"
said registrar M Rajasekar.
There were clear cases of favoritism too. One of the 13 who got out of turn
allotment is a PA to the principal AG. A retired official, K Santhanagopalan,
who was later re-employed as a PA to the principal AG was gifted two plots
despite he being a contract employee. When contacted, Santhanagopal said
there was no violation in the allocation.
D Balachandar, an assistant accounting officer who was not on the original
list, received three plots adding up to 4,200sqft. While the rule 29 (8)
of CMDA restricts the sale of public purpose (PP) plots, one of the three plots
Balachandar received was a 1,550sqft PP land. Zamin Pallavaram scheme has
13 PP plots strictly meant for public utility services. Balachandar, whose
signature is affixed on the land registration document at Pallavaram
municipality, told TOI that he is not aware of the land allotment.
Murthy said some officers were given land as "a reward for their hard work
and commitment to the department."

Map to tap solar energy by next year


India will set up additional 60 Automatic Solar Radiation Monitoring Stations

(ASRMS) in the eastern part of the country to help prepare a solar map of the
nation within next year, according to Dr S Gomathinayagam, executive
director of Centre for Wind Energy Technology (CWET).
Addressing a press conference along with Narasimhan Santhanam, marketing
coordinator for Renergy 2013, here on Thursday, Gomathinayagam said that
they have now established 51 Automatic Solar Radiation Monitoring Stations,
which cover potential areas in the country and transmit data via GPRS to the
Central Receiving Station in Chennai established at CWET.
He said the map will identify solar top spots at which the suns radiation
shows optimum intensity for power and heat generation, enabling developers
to accurately pinpoint future solar project sites.
The data gathered by the monitoring stations will be used to calculate the
Global Horizontal Irradiance, the Direct Normal Incidence and the Diffuse
Horizontal Irradiance. Physical plausibility tests for secondary meteorological
parameters (non-radiation values), such as air temperature, relative humidity,
wind speed, barometric pressure, etc. will be updated monthly at each
station. As a result, project developers will be able to predict the plants
output with reasonable accuracy.

Solar is RENERGY 2013 buzzword


Solar energy will be the buzzword during RENERGY 2013 in a bid to attain
Chief minister
J.Jayalalithaas vision of developing Tamil Nadu
as a world leader in solar energy.
Addressing a press conference here on Thursday, Narasimhan Santhanam,
marketing coordinator for RENERGY 2013, said the three-day event, which is
hosted by Tamil Nadu Energy Development Agency, will begin on May 9 at
the Chennai Trade Centre and is expected to have 250 exhibitors, 1,000
renewable energy companies, 2,000 delegates and 20,000 visitors.
Unlike in the past, the focus will be more on solar energy, he said.
Interestingly, this also comes in the wake of the state government launching
one of the most ambitious solar policies in the country, with a vision of 3,000
MW of solar power by 2015. The event is likely to have the largest
participation of top government officials from many states including officials
from the Ministry of new and renewable energy. Many of the states have
come out with a policy on solar energy.
During the event, the state governments solar powered green house scheme
will also be on display, said Narasimhan.

Air Asia to replicate low-cost model in hotels


The Air Asia group is set to introduce its low-cost hotel business in India, just
like the budget air carrier.
For every facility you ask for in their establishments, branded as Tune Hotels,
you pay separatelywhether it is 24-hour air conditioning, television, towels
or toiletry kit. The daily rate will be Rs 2,000-2,500 but will go for Rs 599 for
early bookers. The idea is not to let any room go unmonetised, even if the
booking is done at a low rate.
Tune Hotels, owned by Air Asias Tony Fernandes, is investing $30 million
(around Rs 160 crore) in a 60:40 joint venture with Apodis Hotels. The
company will set up 20 properties in India in the next three years. The first
one will open on May 15, in Ahmedabad.
When we first started, we thought people wont understand our business

model. It has worked well for us, said Mark Lankester, group chief executive
officer, Tune Hotels.
On the airline side, the company has tied up with the Tatas. For hotels, it has
positioned itself on the same pitch as the Tatas budget hotel brand, Ginger. I
dont think there is any competition. We are hopeful we will be welcomed in
the Indian market, added Lankester.
To customize its hotels to suit the Indian market, the hotel will have food and
beverage options. There will be no room service but there will be an in-house
restaurant, the name for which is still in the works.
The company is also betting highly on the marriage market in India and will
provide a banquet facility in most hotels to tap the segment.
Tune Hotels has wanted to open a property in India for some years but its
plans were delayed due to the (global) financial crisis and a drop in lending
by banks. The company is planning to set up hotels in Surat, Bhavnagar,
Jaipur, Agra and Delhi in the next three years.
The hotel brand goes by the great value, great savings tagline. The hotels
have, as mentioned earlier, a low cost model, similar to the airline, and use a
self-service online booking system. The daily rate for a room in a Tune
Hotel can go as low as Rs 180 during promotional periods.
While the company will sell its hotels on travel portals like Expedia, Make My
Trip, Clear trip, etc, it claims the prices on its own website will always be
more attractive. We want to have repeat customers. We even give
promotional offers a year in advance in some cases, says Lankester.
So far, the company has hired 20 people for its 100-room hotel in Ahmedabad.
With more properties in the pipeline, it will get at least 500 more people on
board. We see high growth potential in India. We havent even rushed to
China, as we think India has a solid ground for growth, Lankester said.

Tour operators, hotels allowed to import

cars, SUVs under SFIS

In a move likely that is likely to be cheered by the hospitality sector,

government today allowed hotels and tour operators to
import cars and SUVs under the Served from India Scheme (SFIS).
"I am allowing use of SFIS scrips for import or domestic procurement of
motor cars, SUVs, all purpose vehicles for hotel, travel agents, tour operators,
companies owning/ operating golf resorts for tourist purposes, "Commerce
and Industry Minister Anand Sharma.
Announcing the supplementary Foreign Trade Policy (FTP) for the fiscal, he
said this is being done to encourage export of services, especially in the
tourism sector.
The FTP document said the SFIS scrips can be used for payment of import
The service providers are entitled to duty credit scrips under SFIS at the rate
of 10 per cent of free foreign exchange earned during a financial year.
However, Sharma said the entitlement would now be calculated on the basis
of net free foreign exchange earned (meaning after deducting foreign
exchange spent from the total foreign exchange earned during the financial
However, users of the scrip to import vehicles will be required to submit proof
of registration for tourism purposes within 6 months.
Further, these vehicles will not be allowed to be imported under EPCG
scheme, Sharma added.
In another step to facilitate import of motor vehicles, the FTP said the import
of cars and vehicles will also be allowed at Inland Container Depot (ICD) at
Faridabad and Ennore Port.

Valmark Group to launch Rs 125 crore real

estate fund

Bangalore-based real estate company Valmark Group is launching its first

Bangalore-focused real estate private equity fund, signaling the return of risk
capital to the beleaguered sector.
The Rs 125 crore Valmark Infra and Realty Trust will look to invest in the
southern city's residential space, with returns expected at a minimum of 15%.
The fund, which expects to make between four and six transactions, will look
to stay invested for a period of between three and five years.
"Given the velocity shown in the space, we expect returns to be between 24%
and 30%, and which could go up to 36%. If we don't see good exit
opportunities, we will look to stay invested for an additional two years,"
Jaswant Munoth, the investment manager for the fund, told ET
The average investment ticket size will range between Rs 25 and Rs 30 crore,
according to Valmark Group managing director Ratan Lath.
"Our understanding of the Bangalore residential market is better than a
number of the other premier real estate markets around the country. The
average commitment that we are looking for is about Rs 1 crore," Lath said.
The Valmark Group currently has 1.8 million square feet of projects under
execution across Bangalore. It has entered into joint ventures with a number
of well-known real estate developers, including, the Brigade Group, Embassy
Property Developments, K. Raheja Corp, Nitesh Estates BSE 3.46 %,
and Unitech BSE 2.22 %.
"We have already committed Rs 25 crore to Indya Estate's upcoming
apartment project called 'The Greens.' We have several other proposals under
discussion at the moment, and expect to have the entire fund corpus deployed
nine months from now," Munoth said.
It is into development of residential apartments, shopping malls, hotels,
commercial office spaces and integrated townships in and around Bangalore
and in second-tier cities like Mysore. The company has a land-bank of over
500 acres.
Private equity has made a cautious return to investing in the country's
residential real estate sector, with risk capital majors Kotak Realty and India
Infoline BSE 1.08 % consummating deals since the January this year.

2013, so far, has seen a total of $137 million (Rs 739.2 crore) raised by real
estate-focused private equity funds. In 2012, eight funds raised a total of $1.8
billion, according to Venture Intelligence.

Maintenance fee for premium apartments

hits Rs 1 lakh a month

If you've been wondering that the EMI you are paying for your home loan was
massive, think again. These days, residents of some of Mumbai
and Gurgaon's premium apartments are paying astronomical amounts just as
maintenance fee for the all the facilities that are thrown in with their

Maintenance charges at The Imperial, a residential building at Tardeo in

south Mumbai, for instance, is as high as Rs 1.5 lakh a month for a 10,000 sq
ft apartment. This isn't an exception, but more of a norm, given the number of
luxury projects that have sprung up in the recent years.
Even the smallest 2,550 sq ft configuration flat at The Imperial shells out over
Rs 40,000 based on monthly charges of Rs 16 per sq ft, says one of the
residents of the building. In Gurgaon, too, some high-end properties charge
Rs 7-10 per sq ft and the size of some apartments are between 4,000 and
5,000 sq ft.
The high-rises that are under construction or have come up in Mumbai and
Gurgaon are setting new benchmarks in luxury. Apart from the usual frills,
they sport facilities like concierge service, air conditioned apartments, large
private swimming pools and restaurants, and the super-rich are ready to pay
top-dollar to buy such a lifestyle. Most of the residents in such buildings are
corporate promoters, diamond merchants, investment bankers, and the likes.

Typically, the amenities along with its location dictate the property price, and
good maintenance enhances the life of the building besides the luxury
quotient adding to the resale value. "Property rates in our complex are at
least 30% higher than the neighborhood," said Pradeep Patil, chairman of
Oberoi Sky Heights Co-operative Society. He insists that the rate differential
is due to "good maintenance, landscaping and services offered here".
Oberoi Sky Heights, a 36-storey building, was constructed by Oberoi Realty
BSE 0.60 % and the management of the society was handed over to the
managing committee two years ago. The complex, with two wings and 65
apartments, charges Rs 9 per sq ft a month as maintenance charge and has
amenities like clubhouse, gym, squash court and a pool. The highest monthly
maintenance charge of Rs 1.08 lakh are paid by owners of triplex apartments
here spread over 12,000 sq ft that also boast of private swimming pools on
Given the large sizes of these projects and the ultra-luxury amenities, more
and more housing societies and developers are now engaging companies
specialising in facilities management to take care of maintenance aspect.
"Earlier, only commercial complexes used to hire facilities management firms.
However, given the number of luxury properties being developed, even
housing societies are doing so," says Vishal Gupta, chief strategy officer at
ISS Integrated Facilities Services that looks after estate and facilities
management for various societies and developers.

Nariman Point continues to see sluggish

demand for office space, says CBRE South

Nariman Point, the country's first planned central business district in south
Mumbai, has continued to witness sluggish demand for office space in the
quarter ended March. The Central Business District including
micro markets of Nariman Point, Fort and Cuffe Parade has seen office space
absorption of meager 10,000 sq ft during the quarter, said a CBRE South Asia
Office rental values in these micro markets have declined 3-4% sequentially
in January-March, the report said. In the last few years, Nariman Point is
losing its sheen as central business district with rising vacancy levels due to
companies preferring to move their offices to other locations like BandraKurla Complex, Lower Parel and Andheri. Rentals have also fallen here from
over Rs 300 per sq ft a month in early 2011 to around Rs 250 now.
The micro market of Lower Parel continued to witness increased occupier
interest during the quarter from financial companies that are keen on cost
effective Grade A options. Around 0.20 million sq ft of Grade A office space
was absorbed here during the quarter, a growth of 60% over previous
"While the rental values have remained stable for the current quarter;
vacancy rate is estimated in the range of 27-29%. No new supply addition was
witnessed in the micro-markets of Worli and Prabhadevi. Rental values
witnessed a marginal decline of 3-4% q-o-q," the report said.
Transaction activity was upbeat in Bandra-Kurla Complex with around 0.18
million sq ft of Grade A office space absorbed here during the quarter. "The
existing vacancy pressures and further supply addition (in BKC) during the
current quarter have led to a decline in rental value by 3-4% quarter-onquarter," the report added.
Around 10 million sq ft of new office supply came on-line across major
markets in the country During the quarter. Mumbai led project completions,

followed by Bangalore and Chennai, representing about 82% of the entire

space completed in the country during the quarter.
Office space rentals continued to witness downward pressures across most
micro markets as occupier expansion faced cost pressures and consolidation
continued to be the key theme, said the CBRE South Asia report.

Solar park to come up in Ramanathapuram


The Tamil Nadu state government is proposing a solar park in

Ramanathapuram in southern Tamil Nadu. State industries minister P
Thangamani on Friday said that state-owned TIDCO (Tamil Nadu Industrial
Development Coporation) is proposing to develop the solar power park at a
cost of Rs 920 crore.
The minister said around 1,000 MW of solar power projects would be set up
in public-private ventures. "In the first phase, TIDCO and Bangalore-based
Raasi Green Earth Energy are jointly developing 100 MW capacity solar
power project in Paramakudi taluk of Ramanathapuram district in 500 acres
of dry lands", he said, adding that this project is expected to be completed in
six months.
The minister said in the next phase, TIDCO has also proposed to facilitate
1,000 MW capacity solar power park projects in multiple locations in
association with private players during the current fiscal at a total investment
of Rs 9,000 crore.
"The proposed solar parks will provide common facilities to the independent
solar power producers such as developed lands, roads, water supply,
drainage, dedicated power and evacuation facilities,"he added.

TN pushes for industrial corridors to aid



The proposed Chennai-Bangalore industrial corridor has got a fillip with the
state-run SIPCOT (State Industries Promotion Corporation of Tamil Nadu)
completing a study along with other consultants for the development of
highways along Chennai-Sriperumbudur-Ranipet-Hosur, MaduraiThoothukudi and Coimbatore-Salem.
"After the study, it was proposed to create industrial parks in the MaduraiThoothukudi corridor to develop the backward southern districts for
increased economic growth," state industries minister, P Thangamani said.
Meanwhile, Karnataka has also started the process of DPR (detailed projects
report) for the peripheral ring road (PRR) project between Tumkur and
Hosur. This road will be in the proposed Chennai-Bangalore corridor. In
December 2012, the Karnataka state cabinet cleared the first phase of the 65
km PRR project between Tumkur and Hosur at a cost Rs 1,750 crore. The
Chennai-Bangalore corridor is being modeled along the proposed $100 billion
Delhi-Mumbai (DMIC) industrial corridor.
In his budget address, Union finance minister P Chidambaram had said the
project with assistance from the Japan International Cooperation Agency
(JICA) would be developed in collaboration with the governments of three
southern states. JICA and the Union government's department of industrial
policy and promotion are preparing a master plan for the corridor. "The
corridor will be developed in collaboration with the governments of Tamil
Nadu, Andhra Pradesh and Karnataka," Chidambaram had said. While the
existing road connecting Chennai and Bangalore is 350 kms long, there is a

proposal to cut the distance by 100 kms with new roads

Also, the NPAR (northern port access road) project, an integrated project to
strengthen connectivity to the Ennore Port, is being implemented jointly by
the state highways department, SIPCOT and TNRDC (Tamil Nadu Road
Development Company). "Industrial parks will be set up abutting the NPAR to
an extent of about 10000 to 15000 acres," Thangamani said.

TN to get 6 more industrial parks soon


Industries minister P Thangamani on Friday said six new industrial parks will
be established across the state spread over 8,000 acres. He told the assembly
that these parks would come up in Sriperumbudur, Cheyyar, Tuticorin,
Madurai, Oragadam and Tindivanam.
The minister said the new park in Sriperumbudur will generate direct
employment for 3,000 persons and indirect jobs to 20,000 persons. This park
would be spread over 1,780 acres. "Many MNCs have evinced an interest to
establish units in their park," the minister said.
The Cheyyar industrial complex would entail an expansion on 2,300 acres of
land while in the case of Tuticorin it would be 1,179 acres under Phase II for
the Thoothukudi industrial complex. In case of the Madurai industrial park,
the government is in the process of acquiring 1,478 acres and 720 acres of
land in the Tindivanam industrial park. Land extending 616 acres will be
added to the Oragadum industrial growth centre under Phase II of the

In addition, SIPCOT (State industries Promotion Corporation of Tamil Nadu)

is also in the midst of preparing a comprehensive plan for Sriperumbudur
with the help of consultants to upgrade basic social infrastructure and also
housing facilities for employees in the region. "The government has issued
orders for 100 acres of land each to be allotted by SIPCOT for setting up
separate industrial parks for investors from countries like Japan, Korea,
Finland, Germany and France to attract more foreign investment,"
Thangamani said. The allotment would be made after acquisition of lands in
the Sriperumbudur industrial park expansion (Vallam-Vadagal scheme).
In addition, SIPCOT has identified another 25,000 acres to develop the
industrially backward southern districts. "It is proposed to create a land bank
of 20,000 acres to fulfill the Tamil Nadu Vision 2023 document," the minister
SIPCOT is exploring the possibility of establishing a water treatment plant to
meet the present water requirements of 10 MGD (million gallons per day) for
industrial park requirement either through a public private partnership model
or with Chennai Metro Water.
TIDCO (Tamil Nadu Industrial Development Corporation) is also in the
process of constructing bio park Phase II that will provide an additional lab
space of 6.13 lakh square feet for bio technology, pharmaceuticals, nano
technology and other research and development activities at a cost of Rs 150
crore at Taramani, Chennai and is also planning a LNG (liquefied natural gas)
import terminal at an estimated cost of Rs 4,320 crore near Ennore.

Design solutions for developing mega-cities

by Mohsen Mostafavi


Rising population and rampant urbanisation have left Indian cities in a

mess. Mohsen Mostafavi, dean of Harvard's Graduate School of Design, offers
some solutions.
The evolution of India's cities mirrors its economic growth chaotic, largely
unplanned and seemingly at the edge of a precipice. The deluge of
urbanisation taking place in the country's megapolises has been left
unfettered by a combination of poor governance, barely-there infrastructure,
and fundamental lack of vision pertaining to civil planning.
India's cities need a massive overhaul, and it has to be driven by partnership,
according to Mohsen Mostafavi, dean of Harvard University's Graduate
School of Design, and one of the foremost experts on the modes and
processes of urbanisation.
Mostafavi, who consults on a number of international architectural and urban
planning projects, is currently the Alexander and Victoria Wiley Professor of
Design. Edited excerpts from an interview:
Looking at the Shanghai & Kuala Lumpur Models
A number of these cities still rely on the concept of provision of infrastructure
as the basic ground for urban development. But they don't actually have the
mechanisms that are sufficiently nimble and go beyond roadways, and that
can deal with the spaces between buildings or the way pedestrians operate.
I think many of the examples of places that seem to work better than India
have their own problems and raise certain challenges. Therefore, I'm not sure
they should be seen as the ultimate solution.

We can certainly learn from the experience of Kuala Lumpur, Singapore and
others, but we must not see them just as a template. At the same time, China,
in a relatively short period of time, has been able to fast-track development in
terms of provision of public services through certain central resources. This is
something that can be replicated in India.

Land prices soar as farmhouses in Delhi see

real estate boom

The prices of land on the outskirts of Delhi, where farmhouses are permitted,
have soared 50-100 per cent through the past year. The rise in prices was
triggered by the Delhi Development Authority (DDA)'s proposal to allow
farmhouses with floor area of an acre (4,840 sq yards), against the previous
requirement of at least 2.5 acres. DDA also proposed the floor-area ratio
(FAR) limit be raised by a third.
FAR is the total square feet of a building divided by the total square feet of
the plot the building is located on. An FAR of two means the total floor area of
a building is two times the gross area of the plot on which it is located.
The proposals have put farmhouses in direct competition with independent
houses in some of the posh localities in Delhi, including Shanti Niketan/West
End, Golf Links, Jor Bagh and Sunder Nagar.
Ramesh Menon, director, Certes Realty, said, "In some villages, prices have
doubled, while in others, it has gone up by at least 50 per cent in the last one
year." In fact, the price appreciation started even before the DDA proposals
were announced. Expecting these announcements, investors had started
buying land, Menon said, adding in the next one year, prices were expected to
further increase by up to 50 per cent.
In recent months, the number of deals for one-acre plots has also seen a rise.

Several plots would be made available by the government in Zone N

(Northwest), with 10 villages, and Zone L (Southwest), with 27 villages. In
Zone N, prices stand at Rs 1.5-3 crore an acre, depending on the location. In
Zone L, prices are Rs 2.5-6 crore an acre. Farmhouses are located in other
zones, too.
In Gurgaon, land/farmhouses on Sohna Road cost Rs 3-3.5 crore an acre; in a
few locations, prices stand at Rs 1.5 crore an acre. In comparison, an
independent house in Golf Links/Jor Bagh and Sunder Nagar costs Rs 1.1-1.35
crore a sq yard, a rise of 63-86 per cent compared with the prices in 2010,
according to data by international real estate research firm CBRE.
While the new one-acre farmhouses, referred to as 'country homes', would be
allowed a higher FAR of 20, this could be further increased after paying
additional charges.
Sumit Jain, chief executive and co-founder of Commonfloor.com, said, "The
one-acre farmhouse would become the preferred choice for people who want
to have second homes and, of course, for investors. We have seen a lot of
demand from NRIs (non-resident Indians) for these one-acre plots." He added
many property agents/brokers were entering this business and buying land
for reselling, as demand was expected to rise.
Though Zone L was an investment hotspot, investors would face hurdles
related to electricity, water and roads in the new areas allocated in the green
belt, he said.
About 2,500 farmhouses developed before February 2007 and exceeding the
construction limit would be regularised, after penalties were paid for these.
"All existing farmhouses in the proposed urban extension area that had come
up prior to February 7, 2007, but accorded after that date by the regulatory
authority shall be regularised and re-designated as country homes," DDA had
Though some experts feel prices in south Delhi might come under stress,
owing to direct competition with one-acre farmhouses, many think as
farmhouses cater only to a niche segment, there won't be any impact on
prices of properties in south Delhi. Manish Mehta, vice-president,
IndiaHomes, said, "Farmhouses cater to a niche segment, not to all. Prices
also depend on the demand-supply situation. The price points for this
segment are still on the higher side."
Experts said one-acre farmhouses would primarily be second homes or

weekend getaway options for many and, therefore, it wasn't correct to

compare the prices of these properties with those in south Delhi.