Rs. 100 - National Real Estate Development Councilof India’s Global Sovereign ... double taxations...

VOLUME 1 | ISSUE 7 | APRIL 2015

Rs. 100

V o i c e o f R e s u r g e n t I n d i a

Real Estate Regulatory Bill

Land Acquisition Ordinance

FDI Policy in Construction

Development

Green Technologies

Real time Ethics

Ace the Sale

The inauguration of Sikanderpur Flyover by the Haryana Chief Minister Shri Manohar Lal Khattar

Brand Vision and Realty Exchange 2015

The Anniversary Issue of National Realty marks India’s “tryst with destiny” announced at the stroke of midnight on August 15, 1947. It also marks Prime Minister Modi Cabinet’s decision on April 7, 2015 to set up a Regulator for Real Estate to kick start Indian economy through a massive thrust in Housing, Construction and Infrastructure Sector. This initiative is similar to that China took three decades ago after discarding the autocratic regime of Mao-Zedong. While the Chinese big leap forward in the 21st century is based on the communist doctrine, the Indian journey to become an Asian Super Power is lead by a charismatic PM galvanizing the nation to eradicate corruption.

The clash between the two Asian titans is marked by an emphasis on affordable housing. While China laid stress on providing privileges to land owners to house migrant rural population through hukou, India has launched a massive land reform process by enacting an amended land acquisition act to pass the benefits of economic growth.

While rural India gets transformed into an urban hub, young India sees women in the forefront. NAREDCO Women’s Awards honoring women achievers in real estate, highlight their contribution in nation building which changes Indian Realty. Just as National Realty in its present avatar was born at Odisha a year, its endeavors to bring economic reforms are reflected in the Budget 2014-15 which harnesses the potential of vast water ways and underground resources.

Economic and administrative reforms have been undertaken after six decades of obsolete legal and administrative system, bequeathed by a colonial regime. The Foreign Direct Investment (FDI) policy in the construction development sector has relaxed conditions for 100% FDI under the automatic rule. The upgrading of India’s Global Sovereign Rating Outlook from stable to positives reflects improvement in India’s macro- Economic, Infrastructure and Institutional Profile.

VISION MAHARASHTRA CONCLAVEOn the eve of Vision Maharashtra Conclave at National Center for Performing Arts, Nariman Point, Mumbai on April 22, President NARECO Shri Sunil Mantri told National Realty that land being a state subject, “Vision Maharashtra Conclave will provide a blue print for speedy approval of urban development projects, cut down the number of No-Objection Certificates (NOC) for approval and pave the way for developing Maharashtra as Number 1 state in the country.” He also added that while not focused on Real Estate, the union budget provides for incentives through Real Estate Investment Trusts (REIT). “I welcome the move to avoid double taxations through provision of tax pass-through status”.

As economic indices surge and the world recognizes the vast potential of India with our Prime Minister travelling to France, Germany and Canada to attract investments into India, I look forward to continuing this dialogue with you through media-both print and digital.

Col. (Veteran) Prithvi Nath, VSM

Ed i to r - in -Ch i e f

Tryst with DESTINY

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Our uPCOmInG PrOjeCTS Gurgaon - Sector-23 - An upcoming Grand Housing Project (Residency - 23) of 4 Lac sq. ft. Approx 2000 sq ft. Super Luxury Apartments with Ace Modern Facilities, Club House, Swimming Pool etc. Near to Sector 23 Market.

Bhiwadi - Residential Housing Coming Up Very SoonTownship in Bahadurgarh Coming Up Very SoonUpcoming Project in mumbai “Sewri” High End Exclusive Tower, with Ultimate Specifications. With Club House, Swimming Pool, Exclusive Parkings.

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fully furnIShed OffICe SPACeS1000 Sq. fT -10,000 Sq. fT

Wanted IT related projects in any part of the country constructed or otherwise.

FDI Policy in Construction Development

The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India has recently provided a Clarification to Press Note 10 of 2014 on FDI policy in the Construction Development Sector.

Inauguration of Flyover

The inauguration of the 748 meter long three lane Sikanderpur Flyover and 364 meter long two lane Underpass on Mehrauli Gurgaon (M G) Road on April 11, 2015 by the Haryana Chief Minister Shri Manohar Lal Khattar signals the entry of private sector in the creation of world class infrastructure through Public Private Partnership.

Green TechnologiesIn a bid for rapid development, human interven-tion with nature is inflicting irreversible dam-age to the ecology of our planet, as the energy sources on which today’s rapid development banks upon are mostly non-renewable that im-pairs environment. The construction activity is no different as it impacts the earth surface, flora and fauna, water, energy and so on. Lately, we have started realising importance of green and sustain-able buildings and, as of now, India has about 2.1 billion sq ft of green buildings and more than 50% of that is in residential segment.

Women Awards AnnouncementsNAREDCO Celebrates Women Empowerment with an announcement of Award Nominations.

Magic Bricks - Property IndexThe Propindex highlights how customers prefer value for money homes

Gurgaon Seminar and ConclaveREDCO Haryana’s Seminars and Conclave create a dialogue between stakeholders and the Administration

Real Estate Regulatory BillUnderstanding the new Regulatory framework that has something positive for the Developer and the Consumer

Regulatory Bill Regulating Realty Eating Out is in - Food CourtsFood Courts cash in on the new mantra of eating out in style

Project delays and deviationsAre the Developers or the Approving Authorities to blame when projects get delayed? We explore this phenomenon.

Post Budget SessionGetting Intuitive on Smart citiesSmart Cities in India are so new that we need to understand how it affects everything from local governance to the role of the individual. Big MoneyThe old order yields to the new as we decipher Money

Trends and Techniques in SalesSales is an art and a science and while trends indicate that the future is in online sales, they too must necessarily echo the common strategy Land Acquisition OrdinanceEasy steps in understanding the Land Ordinance

Hospitality and REThe trend towards rebranding and increased loyalty to Indian brands bodes well for the hospitality industry

Role of Market ConditionsMarket Conditions may change constantly but they affect the market in unique ways

Pre approved home loansLife is so much more simple when a loan is already approved

Real time EthicsOne can hardly overemphasize that chasing revenues need not come at the expense of ethics

Kohinoor - Power of PlanetThe author understands the divine powers that influence planetary conditions

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NatioNal Real estate DevelopmeNt CouNCilFirst Floor, 8 Community Centre, East of Kailash, New Delhi - 110065

Tel: 011-26225795, 41608570, Fax: 011-26225796, Email: [email protected]

Editorial Board

aDvisoRy BoaRD

CHAIRMANShri Navin M Raheja,CMD, Raheja Developers Ltd.

PRESIDENTShri Sunil Mantri,CMD, Mantri Realty Ltd.

VICE PRESIDENT, NorthShri Rajeev Talwar,Group Executive Director, DLF Ltd.

VICE PRESIDENT, CentralShri Sudarshan Jhavar,Director, Devkrupa Realty (India) Pvt. Ltd.

VICE PRESIDENT, SouthShri R Chalapathi Rao,Chief Convener, NAREDCO AP & Telangana

VICE PRESIDENT, WestShri Rajan N BandelkarDirector, Unnathi Estate (Raunak Group)

VICE PRESIDENT, NCRShri Parveen JainCMD, Tulip Infratech Pvt. Ltd.

VICE CHAIRMAN (RAJ REDCO)Shri Ashok Patni

MEMBER FINANCEShri Rajesh AroraMD, Arora& Associates Infradevelopers Pvt. Ltd.

DIRECTOR GENERALBrig. R R Singh

Mumbai officeNAREDCO MaharashtraGA-1, Court Chambers, 35 New Marine Lines, Mumbai 400 020, Tel: +91 22-61560500

Jaipur officeRajasthan State Real Estate Development Council (RAJ REDCO)307, Pink Towers, Opp. Nehru Garden, Tonk Road, Jaipur 302015, Tel: +91 141-2741375, 5108651

Uttrakhand officeReal Estate Development Council Uttrakhand (REDCO Uttrakhand)P2/135, Deep Ganga Complex, Sector - 5A, SIDCUL, Haridwar - 249403 (UK), Tel: +91 1334-239338

Haryana officeReal Estate Development Council Haryana (REDCO Haryana)O-149, 1st Floor, Shopping Mall, Arjun Marg, DLF City Phase I, Gurgaon 122002, Tel: +91 124-4055124

Hyderabad officeNAREDCO APPlot No. 43-A, Journalist Colony, Road 76, Jubilee Hills, Hyderabad - 500033, Tel: +91 40-65572184

Telangana officeNAREDCO TelanganaPlot No. 43-A, Journalist Colony, Road 76, Jubilee Hills, Hyderabad - 500033, Tel: +91 40-65572184

Odisha officeNAREDCO OdishaPlot No. 84, Satyabadi Enclave, Gayatri Vihar, Chadrasekharpur, Bhubaneshwar- 751024, Tel: +91 674-2740103

Goa officeREDCO Goa310, Gera Imperium 1, Patto, Panjim, Goa, Tel: 0832-2438215

Printer, Publisher & Editor-in-ChiefCol. (Veteran), Prithvi Nath, VSM on behalf of NAREDCO

Associate EditorMeenakshi Sharma

Deputy EditorSuneel Sehgal

Marketing (West & South)Viresh Pandey

Advertising & CirculationYogesh Kumar and Asad Mubin

Content Management & Editorial AssistanceResurge Management Consultant Pvt. Ltd.E-mail: [email protected] / [email protected]

RNI No.: DELENG17455/29/1/2009-TC

Published fromNational Real Estate Development Council,First Floor, 8 Community Centre, East of Kailash, New Delhi 110065

PrinterNaveen Printers, F-11/B, Okhla Phase- 1, New Delhi 110020

V o i c e o f R e s u r g e n t I n d i a

National Real Estate Development Council (NARED-CO), is an autonomous, self-regulatory body, under the patronage of Ministry of Housing and Urban Poverty Alleviation, GoI. As a government supported apex body, NAREDCO provides a platform for stakeholders of Real Estate to discuss various problems and opportunities. NAREDCO Women Realty Awards 2015 recognizes the contribution of women professionals engaged in various fields of Real Estate. The award felicitates women pro-fessionals for their outstanding achievements in various categories of Real Estate. The winners of the awards shall be determined by an independent panel of eminent jury from a list of shortlisted nominees in each category.

WOmEN EmPOWErmENT gETs A BOOsT WITh ThE ANNOuNCEMENT FOR NOMINATIONS FOR THE NAREDCO WOMEN REAlTy AWARDS 2015.

WOMEN AWARD CATEGORIES 1. Architect : Recognizes the contribution

of an individual in the field of architec-ture from Real Estate sector

2. Most significant contribution: Land-scape Architect : Recognizes the con-tribution of an individual in Real estate and landscape Planning

3. Most significant contribution: Interior Designing: Recognizes the contribution of an individual in the field of Interior Design

4. Most significant contribution: Civil & Structural Engineering: Recognizes the contribution of an individual in the field of civil and structural engineering

5. Most significant contribution: Project Management Consultancy (PMC): Rec-ognizes the contribution of an individual in the field of Project management Con-sulting

6. Most significant contribution: Real es-tate consultant (Brokerage) : Recognizes the contribution of an individual in Real estate as property consultants (brokerage)

7. Most significant contribution: Facility Management: Recognizes the contribu-

Women Awards

tion of an individual in facilities man-agement in Real Estate Sector

8. Most significant contribution: Utili-ties : Recognizes the contribution of an individual in the field of Utilities

9. Most significant contribution: Real Es-tate Journalist – Print Media : Recogniz-es a Real Estate Property Journalist that gives the most up to date information, creative articles and property listings.

10. Most significant contribution: Real Es-tate Journalist – Electronic Media: Rec-ognizes the real estate journalist in the electronic media space.

11. Most significant contribution: Digital Space: Recognizes contribution of an in-dividual in the digital space (RE portals) for Real Estate sector

12. Most significant contribution: Finish-ing items (Paint, Artifacts, Sculptures) : Recognizes the contribution of an indi-vidual in the field of Finishing Items

13. Most significant contribution: Eleva-tors and Escalators : Recognizes the con-tribution of an individual in the field of Elevators and Escalators

14. Most significant contribution: Academ-ia and Research: Recognizes the contri-bution of an individual in the field of Real Estate academia & research

15. Most significant contribution: Legal : Reognizes the contribution of an indi-vidual in Real estate as legal advisor / professional

16. Most significant contribution : Private Equity: Recognizes the contribution of an individual in the field of Private Eq-uity in real estate

17. Most Significant Contribution : NBFC / Housing Finance : Recognizes the con-tribution of an individual in the field of NBFC / housing Finance sector.

18. Most significant contribution: Bank-ing : Recognizes the contribution of an individual in the field of banking sector for Real Estate

19. Most significant contribution: Human Resource : Recognizes the contribution of an individual in the field of hr in real Estate

20. Most significant contribution: PR : Rec-ognizes the contribution of an individual

in the field of Public relations

21. Most significant contribution: Sales & Marketing : Recognizes the contribution of an individual in the field of sales and marketing in Real Estate

22. Special Recognition Award – CSR con-tribution: Recognizes an individual for their significant contribution made towards community and environment (both ecological and social) from Real Estate sector

23. Most Significant Leadership : Chair-men, MD’s, CEO’s & Senior Execu-tives : Recognizes the leadership of the women in real estate on most senior level

you are requested to encourage women pro-fessionals / members of your organization to nominate themselves / colleagues / friends in Real Estate sector, in the appro-priate category as per the attached list and submit the same by April 25, 2015. The Cat-egory list, Application Form and details of Rules & Regulations are attached here with and the same can also be downloaded from NAREDCO website http://naredco.in

NAREDCO CELEBRATES THE STRENGTH OF A WOMAN WITH WOMEN REALTY AWARDS 2015

6 7 National Realty | April 2015 National Realty | April 2015

AS PER PROPINDEx-JAN-MAR 2015, THE NPI (NATIONAl PROPERTy INDEx) HAS rEmAINEd sTABlE sINCE ThE PrEvIOUs qUArTEr. CITy INdICEs rECOrdEd A mIxEd TrENd IN ThE JAN-mAr 2015 qUArTEr WITh NOIdA rEgIsTErINg ThE hIghEsT rIsE OF 9 PEr CENT WhIlE mUmBAI rECOrdEd ThE hIghEsT drOP OF 6 PEr CENT. OThEr

CITIES THAT RECORDED A DROP IN INDEx VAluES WERE ChENNAI (-4%) ANd ghAzIABAd (-3%).

Propindex

A clear shift was seen towards larger housing units. While demand grew for 3BhK units, it dropped for 1 and 2BhK units across all cit-ies except in Coimbatore and Vadodara. A rise of 3-10 per cent was noted in the demand for 3BhK units across different cities.

Preference for larger housing units was also reflected in the increased demand for residen-tial houses and plots over apartments. Demand for apartments dropped by up to 10 per cent across all cities. Supply trends in the three prop-erty types remained almost unchanged. Even though buyers were actively searching for larg-er properties they seemed unwilling to extend their budget for a larger home. Across cities mid-segment properties priced at Rs 40 lakh-Rs 1 crore were most preferred. Supply in the market was inclined towards premium prop-erties priced above Rs 1 crore. At the national level the rs 30-50 lakh category remained the preferred range.

Rental markets were upbeat across all cities tracked. It was particularly upbeat in cities such as delhi, mumbai and Pune. Over 60 per cent localities across the city recorded a rise in the average rental values. Bangalore and Kolkata continued to clock the highest rental returns in the country.

Buyer preferences shift towards larger yet

value-for-money homes

by Magic Bricks Bureau

HigHligHts of tHe report (Jan-Mar 2015 quarter) y Property buyers are actively searching

for houses – especially bigger units with-in the same budgets

y In key real estate markets such as Delhi, mumbai and Pune, over 60% localities have witnessed a rise in asking values. This follows a drop in values over the previous two quarters

y In line with the previous quarter, de-mand for apartments dropped by up to 10% across cities except Bangalore, Coim-batore and Chennai to give way to rise in demand for plotted units and independ-ent houses

y demand for 3BhK units has gained mo-mentum in stark variance to the previous quarters where 1 and 2BhKs had been in demand

y Supply has remained stable across cities y Rental markets remained robust

Across All ciTies, mid-rAnge properTies were preferred even Though demAnd shifTed from 2 To 3BhK uniTs. There wAs Also An enhAnced

preference wAs noTed for residenTiAl houses And ploTs over ApArTmenTs

City-wise analysis In Ahmedabad no major change was reg-istered in the residential supply. The City Index recorded a marginal rise of 1 per cent. Except Prahalad Nagar and SP Ring Road, no other locality noted a significant rise or drop in the supply. Over 55 per cent of the residential inventory consists of apartments priced at rs 3,000-5,000 per sq ft.

Almost equal number of localities in Ben-galuru recorded a rise or drop in the aver-age capital values.

Whitefield, sarjapur road, Electronic City, Kankapura road and Bannerghatta road contributed to almost 30 per cent of the total residential supply. The average apartment values along these corridors saw a marginal change of -2 to 3 per cent.

Coimbatore recorded a rise in average property values by 2-9 per cent, except in Trichy Road and Saibaba Colony pushing up the City Index value by 5 per cent and the listed Price monitor by 3 per cent.

Nearly 45 per cent localities recorded a drop in the average capital values in Chen-nai resulting in a 4 per cent drop in the City Index value. The rental market showed an upward trend. Nearly 75 per cent of the tracked localities noted a rise between 1-10 per cent in the average rental values.

Delhi City Index rose by 3 per cent and the listed Price Monitor by 5 per cent. Almost

60 per cent of the tracked localities recorded a rise in the average capital values. Rental market outperformed the capital market. Close to 80 per cent localities noted a rise in the average rental values.

Close to 50 per cent of the tracked locali-ties in Ghaziabad witnessed a drop in the average capital values by 0-4 per cent. As a result, the City Index dropped by 3 per cent.

In Gurgaon, a drop in the average capital values cross localities arrested the growth of the City Index. Majority of the localities noted a rise or drop in the average capital values between -3 to +3 per cent.


Close to 60 per cent of the tracked localities exhibited an increase in the monthly rentals in Hyderabad. madhapur, Kondapur, Ban-jara hills and gachibowli offered the high-est number of apartments on rent. These are also among the top ten preferred localities in the city.

A drop of 1-2 per cent was noted in the sup-ply of properties in Kolkata. Almost equal number of localities recorded rise or drop in the average capital values. This led to a small drop of 1 per cent in the City Index value and 2 per cent in the listed Price monitor. Over 65 per cent localities record-ed a rise in the average rental values.

Over 60 per cent tracked localities in Mum-bai noted a rise in the average capital val-ues. Mumbai recorded the maximum rise or drop in average capital values between -9 to +7 per cent.

Over 40 per cent localities in Noida record-ed a rise in average capital values between 1-8 per cent. This coupled with increase in supply led to a 9 per cent rise in the City Index.

Jaypee Greens Wish ToWn noiDaLove of Golf

Jaypee Greens the real estate brand of the Jaypee Group, has since its inception, been creating golf-centric, mega townships and cities.

Jaypee Greens Greater Noida Township is the first Golf centric premium township, spread over an area of 452 acres. 80 per cent of the launched units are booked with over 300 families already enjoying the impeccably finished amenities of unique lifestyle. Now the second township, sprawling over 1100 acres (approx) - “Jaypee Greens Wish Town Noida” is coming to life. Over 73 Million sq. ft of space is being constructed, comprising of Residential, Commercial, Institutional, Community and Healthcare facilities.

The township is taking concrete shape with 92 per cent of plots which have been offered possession along with 13 per cent of the residential apartments been ready for possession. Jaypee Greens has recently welcomed its first set of 70 families at Pavilion Court Apartments. Within next 6 months another set of 4000 apartments at Kalypso Court, Kosmos and Klassic are duly ready for possession.

Over 34 k residential dwellings units are being created in Wish Town, Noida across various categories offering a mix of world-class residences that range from low & mid-rise apartments to hi-rise skyscrapers of 1/2/3/4 BHK and penthouse units along with independent options of Town Homes and Residential plots ranging from 153 sq yd to 500 sq yd. A large part of the township is master planned around the 18+9 Hole Signature Golf course designed by Graham Cooke which is ready for being operational soon. 18 Hole course has been developed on an area of 79.74 Acres with 9 Water bodies and 62 bunkers while the 9 Hole course is on an area of 29.13 Acres with 3 Water bodies and 18 bunkers offering a serene and refreshing view to the residents. There are 33 club houses with both outdoor and indoor sports facilities planned across Wish Town for its residents along with the Boomerang Club which will be an ideal place for relaxing out in the open and will be overlooking the glorious views of the golf greens. This Members exclusive club spread over 50,000 sq. ft (approx) will be ready by 2016 and has over 800 registered members.

Wish Town Noida also offers high street retail, commercial spaces including malls with multiplexes, art galleries, restaurants and cafes. Once completed it would be an iconic development, unlike anything that Noida has seen till date.

Almost equal number of localities in Pune recorded a rise or drop in the average capi-tal values and merely 5 per cent recorded a drop in housing stock, keeping the City Index unchanged. In the rental market, over 80 per cent of the tracked localities noted a rise in average values.

Majority of the localities in Vadodara re-corded a rise in the average capital values with a small drop in supply. This led to a marginal increase in the City Index by 1 per cent. However, the listed Price Monitor re-mained unchanged. In line with the capital market, rental market also saw a rise. Over 90 per cent localities registered increase in values between 2-10 per cent.

Thus, at end of the first quarter of the year, it seems people have started searching for properties but are not actively buying. They are using this low period to get a better deal while pursuing larger units within their limited budget.

propindex-JAn-mAr 2015 quArTer, displAyed A cleAr preference for lArger homes on The

Buyers’ BehAlf. equAlly inTeresTing wAs The fAcT ThAT Buyers did noT seem Too eAger on increAsing

Their BudgeT To Acquire A lArger home.

Propindex

10 National Realty | April 2015

BrAnd vision, reAlTy exchAnge And gurgAon governAnce seminAr And conclAve All focus on uniTing

sTAKeholders And creATing A hArmonious diAlogue.

infrastructure of schools and hospital to ensure sustainable growth for Gurgaon.

The second part of the seminar focused on the Realty Exchange which dwelt on the need for trust to nurture symbiotic relationships between the developer and the broker. Deepak Mahajan from Harbans mahajan, KJ singh from ACrI and PK Tripathi from unitech, everyone agreed that there is a need to give ethical consultants the credit for carrying on an effective interface with the customers. The session which was effectively moderated by remax ensured everyone got an opportunity to express their point of view.

The defining feature of the Brand vision was the association of National Realty as Knowledge Partner and the support of HDFC Home loans, Raheja Developers, Gupta Promoters limited as well as IT Partner PropChill.com.

The 16th Council meeting of rEdCO Haryana held on March 28 became a Gurgaon Governance Conclave with Deputy Commissioner, Mr. T l Satyaprakash in the chair along with Senior Town Planner, Mr. S S Chauhan and the active participation of Joint Action Forum of rWAs (JAFrA), Block Residential Committees and Civil Society.

Seminar & Conclave

Brand Vision Gurgaon

(L to R) Brig. R. R. Singh DG NAREDCO, P.K. Tripathi President UNITECH, T L Satyaprakash DC, Rohit Malik Director DEDL & President REDCO Haryana , Col. Prithvi Nath VP and SG REDCO Haryana

(L to R) Col. Prithvi Nath- VC, SG REDCO Haryana, Chairman RIRM, T L Satyaprakash- DC, Brig. R R Singh- DG NAREDCO, , Rohit Malik Director DEDL & President REDCO Haryana, Dr. P S Rana- Chairman CIDC, P.K. Tripathi President UNITECH

(L to R) Prabhat Aggrawal –GBRC, Brig. R R Singh- DG NAREDCO, Sudhir Kapoor- SG DLF CITY RWA, T L Satyaprakash DC, Manoj Kapoor- Sr. Vice President Raheja Developers, Col. Rattan Singh- Chairman JAFRA

rEdCO haryana’s “Brand vision gurgaon and Realty Exchange 2015 on February 21, 2015 united industry stakeholders to create a harmonious dialogue between the Developers, Real Estate Consultants, RWAs and Civil Society with the Gurgaon Administration. The presence of the deputy Commissioner and other officials of the administration along with leading developers and property consultants reviewed the Brand Compass gurgaon created in 2010 and prepared a Blueprint for Gurgaon’s future of Public- Private- People Partnership, actively supported by the government. The seminar began with release of National Realty Jan-Feb Issue by Mr. T l Satyaprakash, IAS, Deputy Commission, Gurgaon followed by the review of Brand Compass gurgaon.

The Round Table began a dialogue between Col. Rattan Singh of Joint Action Forum of rWAs (JAFrA), sudhir Kapoor, General Secretary of DlF City RWA and Prabhat Agarwal, founder Aravali Scholars resulting in a decision to form a Central Council that was ratified later on march 28 Global Gurgaon Governance Conclave. The seminar reviewed physical requirements of roads and transport as also the social

The growth of Gurgaon is an unmatched phenomenon and the Real Estate industry in Gurgaon has undoubtedly played a dynamic role in its growth and development. REDCO Haryana was instrumental in organizing events like the seminar and conclave which resulted in the uniting of the Real Estate industry on an ethical platform thus creating a dialogue between the Gurgaon Administration and the stakeholders like Developers, Realtors, Investors, Urban Local Bodies, RWAs and the Civil Society.

Shri T l Satyaprakash, IAS, who chaired the Global Gurgaon Governance Conclave of REDCO Haryana, announced the formation of Greater Gurgaon Arbitration Council for resolution of a large number of disputes by the Public-Private-People Council of REDCO Haryana.

The council has eminent citizens on the panel which include Senior Town Country Planner of MCG, REDCO Institute of Real Estate Managemet Faculty which comprise of a Former Commissioner of Haryana who is presently enquiry officer, department of vigilance, an erudite professor, a specialized RE Chartered Accountant, an IT professional and the President of ACRI. Mr. T l Satyaprakash, Chairman of Arbitration Council said that a quarterly review will be held for reviewing the progress made in addressing the present disconnect between citizens, private and public builders and municipal corporation. He added, “Self regulation implies the isolation of fly by

night operators who tar the image of ethical private and public developers. We need to collectively stand against corruption and boycott them through creation of peer pressure.” Commending the social work of REDCO Haryana he suggested that open areas and park be converted into sports grounds where people from different strata of society can play together- this will give special space underprivileged. In a similar vein, Municipal Commissioner Gurgaon Vikas Gupta added, “We need to share experiences to develop Gurgaon. We have undertaken maintenance of national highways and look forward to providing quality living in Global Gurgaon.”

The Conclave was preceded by two day rIrm 23rd certificate linked course where President REDCO Haryana Rohit Malik, s s Chauhan (sTP,mCg), Col. K J singh (President ACrI), Prof m r Kulkarni and Col. Prithvi Nath awarded certificates to participants.


The first game changer in urban develop-ment was the opening up of the Housing and Construction Sector to private sector in 1980s when Delhi moved Southwards to Gurgaon with private developers opting for gurgaon as the financial and cultural capital of the country after the monopoly of public sector DDA and the inconsistencies of urban land Ceiling Act drove it out.

The second game changer is the opening up of 748 meter long three lane Sikanderpur Flyover and 364 meter long two lane Un-derpass on Mehrauli Gurgaon (M G) Road on April 11, 2015 by the Haryana Chief Min-ister shri manohar lal Khattar that signals the entry of private sector in the creation of world class infrastructure through Public-Private Partnership. Hailed as Asia’s lat-est five level road to future, the top level is Delhi Metro, the second one right beneath is the Rapid Metro line, the third being the Sikanderpur Flyover, the fourth the surface road and the fifth the underpass that links the DlF Mega Mall.

Honorable Chief Minister of Haryana, shri. manohar lal Khattar inaugurated the dlF-hUdA flyover at sikanderpur and the Cyber-City underpass today. Shri. Rao Nar-bir Singh, Hon’ble Minister PWD & Public Health, Rajiv Singh, Vice Chairman, DlF ltd, Mr. Rajeev Talwar, Group Executive Director, DlF ltd, Shri. Ram Villas Sharma, Education Minister, Government of Hary-

ana, Mr. Rohit Malik, Director, DEDl (De-velopers Estates DlF ltd) along with the other officials of dlF and hUdA were also present on the occasion.

The address of the Cm manohar lal Khat-tar and its response by DlF Vice Chairman will go down in history of urban develop-ment as the 21st Game Changer as he said, “70 years ago Ch. Lal Chand, the father of Ch. Raghvendra Singh gave the nation a DLF Colony in Rohtak, today the fourth generation Rajiv Singh gives Gurgaon a world class rail road infrastructure. DLF has been an integral part of Gurgaon’s development, its contribution to the up gradation of city’s infrastructure is commendable. I congratulate the group for the inauguration of the underpass and flyover and at the same time request you to continue your services to the people of Gurgaon and reach out to the whole of Haryana as well”.

INAUGURATION OF SIKANDERPUR FLYOVER IN GURGAON

Salient features of the flyover:• 740m long and 11 m wide (3 lanes,

one-way).• The flyover to accommodate traffic

from Mehrauli (M G Road).• Provision of lEd lighting

throughout the flyover.• Around 5000 grown trees planned

to be planted within corridor with world class landscape.

• dedicated Corridor for underground utility services.

• Fully integrated with rapid metro alignment.

THE INAUGURATION OF THE 748 METER LONG THREE LANE SIKANDERPUR FLYOVER AND 364 METER LONG TWO LANE UNDERPASS ON MEHRAULI GURGAON (M G) ROAD ON APRIL 11, 2015 BY THE HARYANA CHIEF MINISTER SHRI MANOHAR LAL KHATTAR SIGNALS THE ENTRY OF PRIVATE SECTOR IN THE CREATION OF WORLD CLASS INFRASTRUCTURE THROUGH PUBLIC PRIVATE PARTNERSHIP.

The opening up of The housing And consTrucTion secTor To privATe plAyers in The 1980s when delhi moved souThwArds To gurgAon wAs A gAme chAnger in urBAn

developmenT wiTh privATe developers opTing for gurgAon As The finAnciAl And culTurAl cApiTAl of The counTry

AfTer The monopoly of puBlic secTor ddA And The inconsisTencies of The urBAn lAnd ceiling AcT.

Vice Chairman responded, “I really appre-ciate the Government of Haryana for sup-porting us in upgrading the infrastructure of gurgaon. We will surely fulfill the expec-tations of our Chief Minister and the citi-zens of Gurgaon. It is our privilege to serve the entire state” - Rajiv Singh

A part of 16 lane dlF- hUdA sector road that combines the extension of Rapid Metro to sector55/56, the flyover benefits 1.5 lakh commuters from outside Gurgaon who work in the city housing many multi- na-tional companies, cutting their travel time between M G Road to Cyber City to three minutes.

This junction is part of 16 lane multi level DlF- HuDA Expressway being built at a cost of over rs. 600 Cr will transform gur-gaon rail-road infra into the finest in the world.

A Real Estate Game Changer


Regulatory Bill

THE INTRICACIES OF THE REAl ESTATE SECTOR lARGEly ARISE FROM THE FACT ThAT dIFFErENT AsPECTs ArE rEgUlATEd By dIFFErENT lEvEls OF GOVERNMENT. THE STATE GOVERNMENT REGulATES REAl ESTATE PROJECTS: THE STATES’ TOWN AND COuNTRy PlANNING ACT REGulATE lAND uSE AND DEVElOPMENT WHIlE THE OWNERSHIP OF APARTMENTS ACT rEgUlATEs INdIvIdUAl OWNErshIP OF APArTmENTs IN BUIld-INGS WITH MulTIPlE APARTMENTS. APPROVAlS FOR REAl ESTATE PRO-JECT CONSTRuCTION ARE REGulATED AT THE lOCAl AND STATE lEVEl WhIlE CErTAIN ENvIrONmENT ClEArANCEs ArE gIvEN By ThE CEN-TRAl GOVERNMENT. CONSuMER GRIEVANCES ARE DEAlT WITH uNDER THE CONSuMER PROTECTION ACT THROuGH THE CONSuMER FORuMS WhIlE ANTI-COmPETITIvE PrACTICEs ArE dEAlT WITh By ThE COmPE-TITION COMMISSION uNDER THE COMPETITION ACT.

ments require registration. The Cabinet amendment provides for applicability to commercial real estate. Ongoing projects which have not yet received all requisite approvals and commencement certifi-cate before the Act’s commencement will also require to be registered within three months. Promoters cannot offer these projects for sale without registration. On-going projects who have not yet received completion certificates are also covered. On registration, the promoter is required to upload project details including land status, site, layout plan, stage-wise sched-ule for project completion, including pro-vision for water, sanitation and electricity, status of statutory approvals, proforma agreements and names and addresses of real estate agents, contractors, architect and structural engineer. It may be noted that projects for the purpose of renova-tion or repair or redevelopment which do not involve re-allotment and marketing of the project will not require registration.

* Registration of real estate agents: Real estate agents are also required to register in order to facilitate real estate transac-tions. Without registration, real estate agents cannot facilitate sale or purchase of any plot, apartment or building.

* Consumer consent: In case the pro-moter needs to change plans/structural designs, he will need the consent of two-thirds of the consumers of the project to such change.

* Deposit of amount in separate bank ac-count: Promoters are required to compul-sorily deposit 50% of the amount collect-ed from consumers in a separate account in a scheduled bank within fifteen days to cover the cost of construction. The origi-nally tabled Bill provided for deposit of 70% of the amount collected from con-sumers. This provision seeks to restrict the developer from diverting the funds elsewhere so as to enable better comple-tion of projects, while taking into account the cost of land to be acquired.

* Authorities: One or more Real Estate Regulatory Authorities (RERAs) will be set up in each State and union Territory or one Authority for two or more States or union Territories by the concerned Governments. These RERAs will co-ordinate efforts for development of the real estate sector and provide necessary advice to the appropriate Government

to ensure the growth and promotion of a transparent, efficient and competitive real estate sector.

* Dispute Settlement: For fast track dis-pute settlement, one or more adjudicat-ing officers will be appointed to settle disputes and impose compensation and interest. Appeals against adjudicating officer and regulatory Authority will lie with the Appellate Tribunals to be set up and final appeals will lie only with high Courts.

* Penalty: In case of non-registration, the penalty includes payment of 10% of pro-ject cost with a further 10% of project cost or three year imprisonment or both if still not complied with. In case of wrong dis-closure of information or for not comply-ing with the disclosures requirements, a penalty of 5% of project cost may be im-posed. In case of persistent violations, the Regulatory authorities will also have the power of cancellation of registration and decide on the further course of action re-garding completion of such projects. Real estate agents are now made punishable for non-compliance with the orders of the Regulatory Authority and Appellate Tribunal.

* Implementation: To facilitate implemen-tation, a web based online system for submitting application for registration is to be introduced within one year of the establishment of the Regulatory Authori-

ties and the Regulator will need to decide cases within 60 days. The state govern-ments will have to make rules within one year.

Through its provisions that call for transparency and accountability, this Bill is a step forward in the evolution of the real estate sector. These proposed regulatory developments now call for a focus on issues related to recognition of the real estate sector as an industry, financing options for real estate projects, systems for single-window clearance and for timely delivery of infrastructure and development services.

Real Estate Regulationby sarita d souza

In 2009, the Ministry of Housing and Ur-ban Poverty Alleviation published a Model Real Estate Regulation and Development Bill which provided a legislative frame-work which state governments could adopt while enacting their own laws. Given the scale and size of litigation on questions about the real estate sector, Parliament set up a Committee on Streamlining Approval Procedures in the Real Estate Sector. In 2013, this Committee recommended mak-ing the sector more transparent by pro-viding information on real estate projects and strengthening the grievance redressal mechanism for non-compliance with build-ing standards or contracts.

Introduced in the Rajya Sabha in August, 2013, the real Estate (regulation and de-velopment) Bill, 2013 seeks to regulate con-tracts in real estate and transfer of property, which are included in the Concurrent list of the Seventh Schedule to the Constitu-tion. The Bill provides for registration of real estate projects and of real estate agents with the Real Estate Regulatory Authority; functions and duties of promoters and al-lottees; Real Estate Regulatory Authority; a fast track dispute resolution mechanism through adjudication; establishment of a real Estate Appellate Tribunal and offences and penalties. On 7th April, 2015, the union Cabinet approved amendments to the Bill. The highlights of the Cabinet Amendments include:

* Applicability to commercial real estate: Real estate projects that involve devel-opment of land area of more than one thousand square metres or involve the construction of more than twelve apart-

inTroduced in The rAJyA sABhA in

AugusT, 2013, The reAl esTATe Bill, 2013

seeKs To regulATe conTrAcTs in reAl

esTATe And TrAnsfer of properTy, which Are included in The concurrenT lisT of

The sevenTh schedule To The consTiTuTion.


NeW ReCOMMeNdATIONS ON THe ReAl eSTATe ReGulA-TORy BIll WeRe MAde By THe MINISTRy ANd SeNT TO PMO fOR APPROvAl, ANd THe CABINeT HAS NOW AP-PROved IT. NexT, IT WIll Be TABled IN THe PARlIA-MeNT fOR PASSING THe BIll ANd MAKING IT AN ACT. IN eSSeNCe, ReduCTION Of MINIMuM BAlANCe TO Be MAINTAINed IN THe eSCROW ACCOuNT Of A PROJeCT HAS BeeN ReduCed fROM 70% TO 50%. THIS AMOuNT fROM THe MONIeS COlleCTed fROM THe BuyeRS MuST Be PlACed IN AN eSCROW AC-COuNT WITHIN 15 dAyS.

This provision will effectively allow devel-opers to continue their practice of diverting funds collected for a project towards land acquisition or other projects, and will work in their favour by also allowing them to grow their land and/or project portfolio. However, the 50% mandate will still place enough restriction on developers to divert funds elsewhere and ensure better comple-tion records.

For the buyers, the concerns regarding funds diversion will be higher now. The end result is that the bill will be slightly less pro-tectionist towards buyers. Other revisions include bringing in commercial projects un-der the purview of the bill, which will pro-vide protection to investors of commercial assets, as well.

The Bill now covers commercial real estate, as well; also, brokers and agents have been now been included under its purview as well, and are effectively rendered punish-able in case of non-compliance with the authority’s and tribunal ruling. All under-construction projects have to be compul-sorily registered within three months of setting up of the regulator, and developer cannot make changes to original plans or the structural design unless he gets the con-sent of 2/3rds of the customers. The states have to set up the regulatory bodies within one year of the Bill’s enactment while also setting up a web-based online registration facility within a further period of one year from setting up of the bodies.

Failure to register a project will cause the developer to attract a penalty of 10% of the overall project cost, and an additional penal-

ty of 10% penalty and/or a three-year prison term in case of continued non-compliance. Incorrect or incomplete disclosures will at-tract a penalty of 5% of the project cost. Pro-ject cancellation has been stated as possibil-ity in case of continued non-compliance.

One issue pointed out in the bill by stake-holders was that it aimed to place itself as the sole course of action for redressal of grievances by customers, with no recourse to other consumer forums. It was correctly pointed out that such a stance could lead to pressure on this regulatory body in terms of an increased log of cases, though it would certainly reduce instances of multiplicity of suits. This clause has been done away with in the version that the cabinet has cleared, so customers can now seek recourse with consumer courts and forums as well. All projects which have not received their com-pletion certificates will also be now covered under the bill, so it now allows bigger um-brella coverage for buyers and investors.

The Bill will provide a renewed boost to transparency levels in the Indian Real Es-tate sector. India which lies in the middle in a survey of 90 countries for the Jll Trans-parency Index will make further progress up the rankings. This will instil more confi-dence among global investors, thus provid-ing better access to structured capital for this sector. However, though, the new amended Bill reads very positively for inducing trans-parency and better governance, the contin-ued non-inclusion of government agencies whose slow approval processes are a major contributors to project delays, remains an issue and needs to be addressed.

Regulatory Bill

Real Estate Regulatory Bill: Close To The Finish Lineby arun chitnis

The Bill will provide A renewed BoosT To

TrAnspArency levels in The indiAn reAl esTATe secTor. This will insTil

more confidence Among gloBAl invesTors,

Thus providing BeTTer Access To sTrucTured

cApiTAl for This secTor. however, Though, The

new Amended Bill reAds very posiTively for

inducing TrAnspArency And BeTTer governAnce,

The conTinued non-inclusion of governmenT

Agencies whose slow ApprovAl processes Are A mAJor conTriBuTors To proJecT delAys, remAins An issue And needs To Be

Addressed.


by prithvi nath

Regulatory Bill Retail

Regulating

REAlTy

IN A lANdMARK deCISION ON APRIl 7, 2015, THe uNION CABINeT APPROved THe SeTTING uP Of A ReGulATOR fOR THe ReAl eSTATe SeCTOR. WITH PROvISIONS lIKe A JAIl TeRM Of uP TO THRee yeARS fOR eveN PuTTING uP MISleAdING AdveRTISeMeNT ABOuT PROJeCTS, THe ReAl eSTATe (ReGulATION ANd develOPMeNT) BIll PROvIdeS fOR uNIfORM ReGulATORy eNvIRONMeNT IN THe SeCTOR. THe BIll AlSO MAKeS IT MANdATORy fOR develOPeRS TO lAuNCH PROJeCTS ONly AfTeR ACquIRING STATuTORy CleARANCeS fROM RelevANT AuTHORITy.

In the mean time, the Ministry of Housing and urban Poverty Alleviation is planning to bring all projects under a single window clearance. While Airports Authority of India and Municipal bodies have come on board, the objections of the Environment Ministry are being addressed.

While state regulators will be appointed by the state government, DDA is likely to be made the regulator in Delhi. The Regulator will also be the appellate authority in cases of dispute in a provision that will save parties the hassle of running around to different authorities for addressing their concerns.

The bill has an important provision with regard to Group Housing, where developers will have to specify the common area in the society of Group Housing Apartments. The term ‘apartment’ has been specified in the bill and will also include the space to be provided for a garage. It will be mandatory for builders to clarify the carpet area of flats, thus, making the concept of super area, virtually nonexistent.

The real Estate (regulation and development) Bill was first introduce by UPA government in the rajya sabha in August 2013 and was then referred to a Parliamentary standing Committee, which had submitted its report in February 2014. The NDA government has made some important changes to the original legislation. While the earlier bill mandated that a developer put 70% of the buyer’s investment into an ESCROW account to be used only for the construction of that project, the Housing Ministry has brought this down to 50%. The other major change is to bring the commercial segment of the real estate sector under the ambit of the bill while the earlier one limited the regulation only to the residential segment. The bill also includes a condition prohibiting a developer from changing the plan in a project unless 2/3rd of the allotees.

land being a state subject, The real Estate (regulation and development) Bill is an enabling central legislation providing guidelines to states for its implementation. Accordingly, the states have a vital role in encouraging ‘self regulation’, the main stay of ethical functioning of this vital sector.

The Business Proposition Of Food CourtsFood is a major footfall driver, and food courts give single customers and entire families the option of partaking of a variegated choice of cuisine. As such, they are often a primary reason for people to visit malls in the first place. since they are usually on the top floor, customers are required to pass all floors below to access them. This increases the opportunities for impulse shopping. Food courts also boost overall sales because they offer panoramic views of what is available at the lower levels, thereby raising aspirational levels. By virtue of being open format, a food court is able to meet entire families’ tastes simultaneously, with price points that are a draw for all categories of mall visitors.

Food court space is usually immediately absorbed in malls. Many visitors now see malls primarily as a repository of cost-effective multi-cuisine food and entertainment. In other words, food courts (along with multiplexes) represent a completely separate set of retail with its own dedicated clientele. The conversion rate in food courts is always extremely high, since they generate multiple sales simultaneously. This is not the case in conventional retail outlets.

Food courts are universal revenue generators. No matter how badly a mall is doing, food courts will pull crowds on their own steam. For this reason, there is no likelihood of rentals for food courts increasing. Along with anchors, these represent the factor that brings in assured footfalls, and no mall owner would risk making food court occupancy less tenable and attractive by increasing rentals.

Achieving The Right F&B Equation In MallsHow food courts are positioned in malls depends on the format in question. sometimes, entire floors are dedicated to food outlets because they are such big draws. In luxury malls, the accent on food is highly exclusive, subdued and status-oriented, so a food court is less viable than a carefully calibrated selection of fine dining restaurants.

Ideally, mall operators should aim at achieving a ratio of at least 15% or higher for food courts in context with the entire development. With the pressure on retail because of the onslaught of online shopping, food and entertainment are going to increase in their role as foot fall drivers in shopping centres.

Eating Out Is ‘In’food Courts and

fine Dining in MallsFood and beverages have evolved from being retail’s poor cousin to being the

sector with the dominating edge. From once a month, the number of times young Indians and their families eat out has risen to as much as once or even twice a week. Indians are also more amenable to experimenting with various

cuisines and have developed ‘global palates’. On the heels of these changes in mid-set and demand, F&B in malls is no longer restricted

to fast food options and now encompass fine foods and multi-cuisine options under a single roof.

while sTATe regulATors will Be AppoinTed By The sTATe governmenT, ddA is liKely To Be mAde The regulATor in delhi. The regulATor will Also Be The AppellATe AuThoriTy in cAses of dispuTe in A provision ThAT will sAve pArTies The hAssle of running Around To differenT AuThoriTies for Addressing Their concerns.

food courTs Are universAl revenue

generATors. no mATTer how BAdly A mAll is doing, food courTs

will pull crowds on Their own sTeAm. for

This reAson, There is no liKelihood of renTAls for food courTs increAsing.

Along wiTh Anchors, These represenT The

fAcTor ThAT Brings in Assured fooTfAlls, And no mAll owner would

risK mAKing food courT occupAncy less TenABle

And ATTrAcTive By increAsing renTAls.

by shuBhranshu pani

SHUBHRANSHU PANIREGIONAl DIRECTOR

- RETAIl SERVICES, Jll INDIA


Retail

Typical food courts in India are between 15000-25000 sq. ft., with a majority of them averaging at 15000 sq. ft. A proper food court needs to have at least 13-15 kiosks and food counters in order to be viable. Because of FSI constraints and the cost of real estate, food courts in India have been limited to this size, which is the bare minimum required by a food court in a decent sized mall with good footfalls.

Food courts are typically leased, either to a single food court operator or to various counter operators, with the mall managing the overall food court. The rentals in the food court segment are usually stabilised and based on what the operators can afford to pay. In some cases, food court space may be sold for a lump-sum, with the price based on the occupied square footage. Common area maintenance charges for food courts are higher than for other retailers, since the CAM costs encompass common seating and air-conditioning, which are added and apportioned on the food court counters.

Some malls charge a higher proportion of revenue towards food court rentals, and this invariably results in a reduction in margins and consequently reduction in quality of the operators. As a rule, this needs to be avoided. Mall developers should also make sure that the quality of food being turned out in their food courts is checked, monitored and maintained to highest standards of quality and hygiene to ensure that the food court performs and attracts well.

Hitting The High Notes With Fine DiningAs a vital sub-category of food retail in malls, fine-dining restaurants offer a controlled operating environment atmosphere and provide parking, which is a very essential factor to any retailing establishment’s success. Also, because they are juxtaposed with other and often lower-grade eating establishments, they offer the opportunity of displaying a visible degree of class differentiation. mall developers consider fine-dining restaurants very important to their overall tenant mix because they help the establishment to attain a degree of exclusiveness and give customers a more holistic experience.

Over the last couple of years, fine dining restaurants have been on the rise in India, and many operators are coming up with novel concepts. The upwardly mobile Indian customer has lapped it all up, and there is a significant increase in interest by mall operators to include fine dining options. There is a lot of space for more brands in the ecosystem, and this market is bound to grow astronomically over the next 3-5 years.

Where Indian F&B Still Falls ShortIndia still lacks the depth of F&B operators and categories seen in other countries. The quality of operators – and their ability to expand, given the crunch in funding and manpower - continues to be a challenge. The period between 2012–‘14 saw a boost in the funding environment, but Indian F&B still has a long way to go but in terms of operation and management. Also, though the eating-out trend in India has grown, it has not yet matched the levels seen in South Asia, Europe and the uS.

A fairly large ongoing issue in the Indian F&B industry arises from the multiplicity of licences that is needed to operate a restaurant or food court. Operation timings are another major hindrance – many cities restrict time of operation to 11.30 Pm, and this seriously restricts the ability of F&B operators to cater to customers, resulting in lower rotations.

Encouragingly, some of the more proactive state governments are now looking at increasing the time to 1.30 Pm. Apart from taking into account the evolving needs of Indian consumers, such policy-level initiatives will boost to the profitability of operators by as much as 25-30%, and this also will favourably impact their ability to pay their dues to the government exchequer.

food And BeverAges hAve evolved from Being re-TAil’s poor cousin To

Being The secTor wiTh The dominATing edge. from once A monTh, The num-Ber of Times young indi-

Ans And Their fAmilies eAT ouT hAs risen To As much As once or even Twice A weeK. indiAns Are Also

more AmenABle To experi-menTing wiTh vArious cui-sines And hAve developed ‘gloBAl pAlATes’. on The heels of These chAnges in mid-seT And demAnd,

f&B in mAlls is no longer resTricTed To fAsT food

opTions And now encom-pAss fine foods And mul-Ti-cuisine opTions under

A single roof.


Project

ConstruCtion Delays – By Developer or By approval autHority?Technically speaking, the time consumed in obtaining all approvals adds to the total time expended in completing the project. Any approval which is needed between the launch to the actual start of construction up till handover of the apartments to the buyer will be an additional time factor. Delays here will cause cascading delays in deliver-ing the project as per the promised time.

Before a project is officially launched in the market and offered to buyers, there are myriad approvals that a developer needs to obtain from the state and central agencies and ministries. In any business, the longer raw material is held, the higher is the hold-ing cost – which, in addition to interest costs in case of borrowed funds, causes an increase in the overall price of the finished product.

This analogy, when extrapolated to the real estate sector, considers land as the basic raw material for real estate development, with

construction materials being the variable costs. The longer a developer has to hold his land without getting any receipts through the sale of proposed apartments, the higher his project costs escalate.

This can, in fact, be a very costly proposi-tion all around. In the current scenario, obtaining the 57-odd permissions to begin construction of a project can take as much as two years. During this time, the cost of ac-quisition or even just holding the land for a project rises. Builders already have to cover external and internal development charges, license costs and often charges for change of land use from various departments, which have also risen. Cost of construction has gone up by more than 50%, as well.

However, this is only one side of the picture. Many developers intentionally undertake a slower pace of construction if sales in their project are sluggish or a larger part of the project is unsold. They may have diverted a sizeable chunk of the revenue generated from pre-launch sales to another project, or utilized it to pay off a pressing bank debt. At

other times, the authorities can be blamed for not granting timely projects approvals.

proJeCt quality anD DeviationsA major concern has been the difference in the promised quality and actual delivery status of the apartment, which remains a concern for real estate buyers. A change in the apartment area after buying from the developer can occur if a change in project plan is necessitated due to a design or ap-proval issue. A deviation of up to 10% is usually acceptable – for a higher devia-tion, a customer must definitely seek legal recourse. That said, project deviations can also happen because of structural deficien-cies of the overall system, wherein rules are being made by the governing authorities in a reactive manner rather than on a proac-tive basis.

There are readily recallable examples of how abrupt changes in regulations gov-

erning real estate development can work against both developers and buyers. The revisions made in the DCR regulations in the Mumbai Metropolitan Region a couple of years ago caught the industry unawares, and added to development costs by about 15%. This included the fungible premium payable if the builder opted to take the ad-ditional 35% FsI option. These cumulative-ly accounted for a 20% hike in construction cost. This move has led to an increased pres-sure on the developers’ margin - which, in turn, resulted in price increases across most projects in MMR.

The fact that developers had to re-work their project specifications (upcoming as well as on-going unapproved projects) resulted in significant project delays. The result was an exacerbation of the cash-crunch on develop-ers, and an outcry from their buyers.

This is not to say that developers do not tamper with overall project quality or make arbitrary changes in their project designs

Avoiding Delays and Deviations

ANUJ PURICHAIRMAN &

COuNTRy HEAD Jll INDIA

Reams of newsprint have been dedicated to discussing the sufferings of consumers in the Indian real estate sector. Particularly, homebuy-ers’ woes related to late delivery of projects, deviation of housing projects from promised quality, additional payments due to change in apartment area and inadequate protection of their rights have been well-documented.

The question that invariably arises is whether the developer is at fault, or whether larger market forces beyond the control of developers are at play.

with a clear intent to maximize profit. By pinching off space from designated open spaces, children’s play areas, compound perimeters and guest parking areas in an originally approved plan, an unscrupulous developer can make a limited plot yield more saleable space.

reCourse for ConsuMersRegardless of what causes delays or abrupt changes in project blueprints, consumers must be able to get justice. Many examples of customers obtaining favorable decisions upon approaching consumer courts exist, and the power of these forums should not be under-estimated. However, the larger and less wholesome truth is that the current legal dispensation is ill-equipped and un-der-regulated to offer complete consumers protection in matters related to real estate.

The Real Estate Regulation and Develop-ment Bill - long languishing on the policy drawing board and still under considera-tion by the government – was intended to offer vastly enhanced protection to buyers. However, after the most recent revisions to RERA, it seems that it will in fact now be less protective towards buyers. While the bill aimed at providing an alternate re-dressal mechanism, the new provisions are talking of no recourse to other consumer forums. This can, in fact, lead to pressure on this regulatory body in terms of an in-creased log of cases, though it will reduce instances of multiplicity of suits.

Consumers should be aware that a certain degree of due diligence and awareness about their rights can protect them against unscrupulous practices by developers. In the first place, due attention should be paid at the time of drafting the sale agreement. A property buyer should fully understand the contents, if necessary with the help of a lawyer, and make a clear note of what the developer has agreed to deliver.

Developer’s sales team will usually present a buyer with a readymade agreement for-mat, and a buyer must ensure that this cap-tures every relevant detail. If it does not, the buyer is fully entitled to ask for missing de-tails to be included and potential grey areas to be clarified. A copy of the final agreement must be retained under any circumstances, as this will serve as the primary evidence in a legal action filed for agreement violations.


NAREDCO

Addressing the Post Budget session organ-ized by NAREDCO on 11 March 2015 at India International Centre, New Delhi, Sub-hash lakhotia, Tax and Investment Consult-ant commented on the proposal to amend the Income Tax Act to prohibit acceptance or payment of an advance of Rs 20,000 or more in cash for purchase of immovable property not being the most appropriate method to curb black money. He observed that reducing the rate of personal income tax by 5per cent and abolishing dividend distribution tax, Securities transactions tax, alternate minimum tax etc would lead to substantial reduction in black money in the economy. As far as the proposal to abolish Wealth Tax is concerned, he felt that HNIs will find property for investment attrac-tive. There is also an opportunity to invest in Real Estate Investment Trusts(REITs) and Infrastructure Investment Trusts and stated that with a contribution of Rs 1crore each by 100 investors, a REITs can be set up and the smart cities offered a good opportu-nity of investment.

Commenting on the topic of indirect tax proposals, saurabh Kanchan, director, Bmr and Associates stated that while the service tax rate has been increased to 14%, the education cess have been subsumed in the service tax and excise duty. The effective rate of service tax on works contract would be 5.4%and 3.5%/4.2% for construction of complex including transfer of land. An im-portant issue for developers to consider is the point of taxation which has to be based on timing of invoice raised to determine the tax payable.

The more significant point for consideration of NAREDCO relates to issues arising out

of the decision to implement gsT effective from 1 April, 2016. These should be taken up with Empowered Committee of State Fi-nance Ministers.

Another announcement of generic applica-bility of excise and service tax relates to sim-plified registration and electronic invoicing and digital invoices to be applicable. Finally the service tax exemption on construction for Govt., port/ airport stands withdrawn, thereby increasing the cost of these projects.

Vishwas Panjiar, Director, Walker Chandiok & Co llP highlighted the implications of the Finance Bill, 2015 with respect to rEIT by stating that the endeavor of FM has been to facilitate REIT as a means to monetize

rental assets in Commercial Real Estate. Ac-cordingly no capital gain arises on the ini-tial transfer of shares of the SPV to a REIT by the sponsor. The rental income arising to REIT from real estate assets directly held by REIT would be eligible for pass through status. Accordingly such income will be ex-empt in the hands of REIT.

santosh Kumar, md , Jll presenting an over view on the budget and the emerg-ing environment for realty observed that the budget has given a push to growth of the economy which shall benefit real estate sector as well. There is encouraging absorp-tion of Commercial Real Estate by IT, Retail, supply chains and offices.

In the Photograph (left to right ) Vishwas Panjiar, Director , Walker Chandiok & Co LLP ; Subhash Lakhotia, Tax and Investment Consultant ; Anil Suri, , GC Member , NAREDCO ; Saurabh Kanchan, Director, BMR & Associates and Brig (Retd) R R Singh, DG NAREDCO.

Post Budget Session11 March 2015

Smart Cities: The New Age ConceptThe smart cities concept may not be a novel one, but in the Indian context it is definitely an idea whose relevance couldn’t have been better timed. The government has provided the thrust towards development of such cit-ies, and needs to be now backed by a holis-tic concept. It aims to take in to account not only the infrastructure development and as-sociated real estate growth but the assimila-tion of technology to increase the efficiency of the public service systems as well. Three critical elements are essential to act as ena-blers for creation of smart cities. These are Smart Technology, Smart users and Smart Governance.

Getting Intuitive About Smart Cities In India

Smart Cities

WhIlE ThE BUdgET hAs gIvEN A PUsh TO ThE grOWTh OF ThE ECONOmy ThrOUgh AN ENCOUrAgINg ABsOrPTION OF COmmErCIAl rEAl EsTATE By IT, rETAIl, sUPPly ChAINs ANd OFFICEs, ThE ABOlITION OF WEAlTh TAx Is POIsEd

TO BrINg TrANsPArENCy IN rEAlTy. by suneel sehgal

Necessity For Improved Local GovernanceCreation and management of a smart city perhaps lies in local (city) agency domain since local governance is their mandate and it is in their hands to demonstrate smart governance. This means that development and long-term vision regarding technology-driven public utilities and their acceptance by the public becomes the responsibility of the local government agencies. The current municipal operations need to undergo a systemic overhaul to get around creating a ‘sustained smart’ city architecture. This re-quires not only acceptance of technology as a means to regulate public services and city infrastructure but also requires a sustained

investment environment in to such techno-logical platforms.

Capacity building in municipal govern-ance and local self-government depart-ments is needed across all levels. How the local bodies can invest in such technology is through encouraging private enterprises which have such platforms ready for inte-gration at a city level. Implementation and running costs need to be covered through an efficient tax collection system and inno-vative fund raising to ensure long-term in-vestments and relevant upgrades.

The role of the local agencies hence becomes paramount in this regard. Swifter decision making, cutting across time delays and de-fining roles and responsibilities of involved stakeholders becomes an evident need. Similarly, training of personnel and main-taining the technology platforms through continuous engagement also rests on the shoulders of the municipal agency. Creating long-term technology infrastructure to en-able real-time data availability and analysis and enabling redundancies to create multi-ple neural networks which devolve in to the master network also becomes paramount.

The fund allocation and systematic deploy-ment of resources also falls in the purview of these agencies. Creating smarter city lev-el infrastructure across roads, sewage, wa-ter, transport, traffic, waste management, power, energy savings, air quality monitor-ing and information availability are all do-mains which require an increased level of participation, understanding and expertise in our local government framework.

by rohan sharMa


Smart Cities

Technology As An EnablerTechnology forms the backbone which pro-vides the structure and form to a smart city. Creating interactive and online platforms to encourage innovation and participation of all stakeholders and engaging with private enterprises who are leaders in technology-driven solutions is essential to bring about a sustained change in the liveability of a city. Transformative possibilities abound with utilisation of big data and analytics instead of using the same looking glass of treating information in discrete compartments.

The need is to create a system of systems, in to which is funnelled the data that is col-laborated from the different agencies. In-novations such as Cloud-based solutions and predictive analytics are great value en-hancers which today allow a city to devise forward-looking solutions and enable crea-tion of a sustainable city environment and its resources.

Investing in such technologies along with the current increase in mobile data analyt-ics and social media participation to involve the citizens will allow a synergy of efforts which the main system will be able to utilise effectively to bring about definitive changes as to how we will live in our cities.

While technology has pervaded all aspects of our lives, the next inevitable step is to in-crease its penetration across all sections of the demography. user sensitization towards

use of technology and contribution towards it stems from making them conversant and comfortable with the technology platforms so using them becomes a second nature to them. Technology has the ability to enable convergence between the various stakehold-ers to create a modern, dynamic and throb-bing living ecosystem in our cities.

Better People InterfaceThe last but not the least critical component is the users. The contribution of education, training and a yearning to learn and con-tribute actively towards their living condi-tions, is what allows a smart city to live and sustain through its citizens. As citizens, we need to be more accepting of diversity and new technology to make a big contribution towards making our cities smarter.

As technology changes the way we live, utilising social media as a change driver, being self-aware and participating through interactive solutions and assimilating tech-nology into the way one lives becomes cru-cial in defining one’s living environment. Embracing new changes and innovations and contributing towards fostering open-

mindedness through evolving thought is the duty of citizens and without this change in psyche, implementation of smart cities will not be complete.

A smart city by inference will thus allow for efficient use of infrastructure and the city’s resources. An increase in transparency levels across decision-making, polity, resource allo-cation and citizen rights and responsibilities will inevitably result and enable weeding out of red tape and corruption which act as impediments to maintaining the balance be-tween sustainability and development.

An Indian ExperimentIn the Indian context, the current govern-ment has announced its intention of setting up 100 smart cities. This importantly seeks to create a smarter city on the existing cities’ framework. Improving the existing cities is definitely a step in the right direction. In-tensive capital budgeting is required for im-plementation and setting up of such smart cities in the country.

As the engine of economic development chugs along, cities are the real growth ena-blers which act as magnets for employment and investments. Creating a sustainable living environment, which will make cities grow in a better and planned manner while bearing the strain of urbanization, thus be-

comes imperative. It is essential that a clear implementation roadmap which outlines the objectives, the various stakeholders and most importantly identifies the funding mechanisms is put in to place.

It also becomes crucial that this opportu-nity is not interpreted as only real estate led development of commercial offices and housing projects; in fact real estate is both the cause and result of smart cities in a way. While, economic drivers are paramount for the city’s sustainable growth, the focus should be on creating the required physi-cal infrastructure and implementing tech-nology driven platforms which will allow a seamless interchange of information and management of the city’s resources.

Along with this, using better technology to create a more seamless, clean and integrat-ed living environment is the real result that should be derived from development of smart cities. A better quality of life in a city which fosters economic growth, innovation while creating a sustainable model of de-velopment and facilitating interactive con-vergence between the citizens and the local government should be the desired outcome.

What Lies Ahead?Smart cities by themselves are not isolated islands of excellence. Nor do they focus

only on a seamless services network and technology-driven solutions. A smart city, by efficient allocation and utilisation of re-sources, will enable tangible solutions to-wards creating quality housing for all. This will be possible by treating land as a viable commodity, the value and productivity of which can be enhanced by prioritising the optimum utilisation of land.

This will not only allow for developing housing solutions but by use of smarter technology, will also result in quality hous-ing. Design, construction and ancillary in-dustries will benefit from the use of better technology while sustainability will ensure that environment preservation goes hand in hand with economic growth.

A smart city is ultimately a city that is ca-pable of handling the increased pace of urbanization in the best way possible. It does so by creating a living environment that is physically robust, technologically strong, driven by innovation with predic-tive algorithms to drive the city forward in its growth while also ensuring that it is aesthetically pleasing and environmentally sound to provide a holistic state of mental and physical wellbeing to its citizens.

A smArT ciTy, By efficienT AllocATion And uTilisA-Tion of resources, enA-Bles TAngiBle soluTions

TowArds creATing quAliTy housing By TreATing lAnd

As A viABle commodiTy

smArT ciTies By Themselves Are noT isolATed islAnds of excellence. nor do They focus only on A seAmless services neTworK And Technology-driven soluTions. A smArT ciTy, By efficienT AllocATion And uTilisATion of resources, will enABle TAngiBle soluTions TowArds creATing quAliTy housing for All. This will Be possiBle By TreATing lAnd As A viABle commodiTy, The vAlue And producTiviTy of which cAn Be enhAnced By prioriTising The opTimum uTilisATion of lAnd.


Finance

Buoyed by their petro dollars, Iran and Saudi Arabia delinked their currencies from dollars in 1975 and switched on to SDRs followed by other monetary nations. As the super power status of USA guaranteed credibility of dollar standard and the convertibility of SDRs, China joined Japan and other nations to form the mainstay of US $ through accumulation of US $.

Four decades after the death of Mao Zedong and the arrest of Gang of Four in 1976, the political value system changed with China discarding Maoism and embracing capitalism/Socialist Market Economy through a single communist party rule, while Indian political system floundered under the socialist pattern of society aligned to Communism of Mao Zedong, that China had discarded.

new eConoMiC orDerThe results of General Elections in 2014 have thrust India on the global center stage through the market driven economy of BJP under the leadership of Narendra Modi. It is necessary for the two Asian giants competing for a dominant super power status to realize that a favorable monetary order will be dependent upon their capability in developing human, natural and technological resources.

let us see as to how did China’s one billion people rid themselves of poverty after Mao’s disastrous policies to reach the present dominant position? The emergence of private initiatives of individual households, collective enterprises, joint ventures with foreign enterprises and wholly foreign invested enterprises changed the character of closed Chinese economy.

Chinese export oriented economy depends largely on rapid industrialization and massive investment in urban infrastructure. Urbanization has been accompanied by rapid flow of migration from rural to urban thereby creating a huge reservoir of surplus

labor, while housing reforms have guaranteed households freedom of choices and adjustment of housing needs by way of renting or purchase of housing units. A mix of public and private housing accompanied by affordable housing in public and private sectors has been the mainstay of Chinese economic growth.

tHe inDia suCCess story Volatility has returned to Indian currency due to the falling dollar index (dxy) rising from 79 in 2012 to 85 in March 2015 and a further expected rise to 95-96. reserve Bank of India has seen the writing on the global monetary wall and purchased dollars from the open market towards end of March 2015 to prevent appreciation of rupee. Foreign exchange reserves rose by $1.4 billion to touch $34 billion while the reserve position with the International Monetary Fund during this time rose by $8.5 billion to touch $1.9 billion.

India success story has begun with the government announcing a nation-wide program up to district collectors for a rapid rise in housing units linked with affordable housing as also infrastructure through private- public- people partnerships.

The Big Money

WhEN ThE BrETTON WOOds AgrEEmENT OF 1944, EsTABlIshINg ThE gOld sTANdArd OF $43 TO AN OUNCE OF gOld lAPsEd IN 1968 WITh UsA gETTINg PrICEd OUT By INTErNATIONAl CUrrENCIEs, BIg mONEy WAs rEdUCEd TO $99 BIllION OF CENTrAl BANK hOldINg $37 BIllION gOld CONTENT, $49 BIllION ‘CONvErTIBlE’ CUrrENCIEs, $6 BIllION sPECIAl drAWINg rIghTs( sdrs) ANd $7 BIllON OF ImF rEsErvE. By 1971, ThE Us $ ANd EUrO$ dEFICIT BECAmE AsTrONOmICAl rEsUlTINg INTO A mONETAry ExCHANGE WAR WITH JAPAN AND OTHER EuROPEAN ECONOmIEs PIlINg ANd BUyINg BIllIONs OF dOllArs TO AVERT uP -VAluATION. by prithvi nath


FDI Policy

by trupti daphtary & anirudh hariani

The depArTmenT of indusTriAl policy And

promoTion (dipp), minisTry of commerce & indusTry, governmenT of indiA hAs recenTly

provided A clArificATion To press noTe 10 of 2014 on fdi policy in The consTrucTion

developmenT secTor.

The Clarification has been provided with a view to mitigate the ambiguities, and includes the following explanations :

No new FDI if no minimum capitalization of USD 5 million within 6 months : The Press Note stipulates minimum FDI capital of uSD 5 million is to be brought in by the investee company within six months of commencement of the project. The DIPP has now clarified that no new FdI can be brought in the project if the minimum capitalization of Usd 5 million has not been achieved within six months of the commencement of the project. However, it is not clear whether the project may continue to utilize the FDI, even if the minimum capitalization of USD 5 million has not been achieved within 6 months. In other words, is the original FDI required to be repatriated or will it remain invested in the project until completion of the project (or trunk infrastruc-ture, as the case may be). Providing a time period for bringing in FDI seems to be a dampener for the real estate sector as new FDI for the project is not allowed if uSD 5 million is not brought in within 6 months. developers would be left high and dry for want of capital even though the project has commenced.

Reckoning Date / Commencement of the project : As mentioned above, FDI of uSD 5 million is to be brought in by the investee company within six months

of commencement of the project. The Press Note stated that commencement of the project will be the date of approval of the building plan/lay out

plan by the relevant statutory authority. The DIPP has now clarified that the reckoning date for the commencement of the project means

the first approval of the building plan/layout plan, and further approvals are just addendum/modification to the first

approval. In India, rules relating to sanction of building plans/layout plans vary sig-nificantly in various jurisdictions. since the first approved building plan/layout plan could be modified and/or amended, as per the clarification, only the first approval will be considered.

Exit even prior to completion of project or trunk infrastructure on case to case basis : The Press Note pro-vides that the investor will be permitted to exit on completion of the project or after de-velopment of trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage and the Government may, in view of facts and circumstances of a case, permit repatriation of FDI or transfer of stake by one non-resident investor to another non-resident investor, before the completion of project. The dIPP has now clarified that exit is permitted only with Foreign Investment Pro-motion Board (FIPB) approval on case-to-case basis even before completion of the project or development of trunk infrastructure. The Inves-tor can exit automatically i.e without FIPB ap-proval if it has completed trunk infrastructure even if the project is not completed, Similarly,

if the project is completed the Investor can exit automatically i.e without FIPB approval.

On whether or not ongoing pro-jects will be subject to the relaxed conditions under Press Note 10 of 2014 : It was earlier unclear how the government would treat ongoing projects which have already commenced under the older Policy, as the Press Note 10 of 2014 did not address this ambiguity. Now, the DIPP has stated that the Press Note 10 of 14 su-persedes the earlier FDI policy contained in the FDI Policy Circular of 2014. While this is fairly evident, the explanation does not state whether the Press Note 10 of 2014 applies prospectively or retrospectively. For example, under the Press Note, the investor will be permitted to exit on completion of the pro-ject or after development of the trunk infra-structure, however, under the earlier Policy; the original investment could not be repat-riated before a period of three years from completion of minimum capitalization. Thus, for projects which commenced under the earlier Policy, it is still unclear whether the investor can exit after trunk infrastruc-ture is completed or whether they need to

Clarifications on FDI Policy

in Construction Development sector


FDI Policy NAREDCO’s Workshop

remain invested until three years after com-mencement of the project. The clarification issued by the DIPP in this regard is obscure. In order to not render the revised Policy nugatory with respect to ongoing projects which had com-menced earlier, a more detailed/explicit clarifica-tion is required.

Certification of completion of trunk infrastructure : under the Press Note, the investor will be permitted to exit on completion of project or after develop-ment of trunk infrastructure (defined as “roads, water supply, street lighting, drain-age and sewerage”). A question remained as to which authority would decide when the trunk infrastructure is complete. Now, the dIPP has clarified that a certificate from an architect registered with the Council of Ar-chitecture certifying the completion of develop-ment of trunk infrastructure would be sufficient to prove that the trunk infrastructure develop-ment is complete. This ambiguity has thus been cleared.

Unusable/ idle parcels of land; disposal only with prior permis-sion of FIPB : The Press Note provides that an investor may exit on completion of the project or after development of the trunk infrastructure, and that the Govern-ment may permit repatriation of FDI or transfer of stake by one non-resident inves-tor to another, before completion of a pro-ject, on a case-to-case basis. The DIPP has now further clarified, if unused land is part of the project and the trunk infrastructure has not been developed on the same, then exit may take place only with the prior approval of the FIPB.

Minimum capitalization is pro-ject specific : The Press Note stipulates that the investee company will be required to bring in minimum FDI of uSD 5 million within 6 months of commencement of the project. The DIPP now has clarified that this minimum capitalization is project-specific, and not company-specific. Thus, in each project, a minimum of uSD 5 million needs to be brought in within 6 month of commence-ment of the project (“commencement of the project” means the date of the first approval of the building plan/layout plan by the rel-evant authority, as explained above).

FDI permitted in competed pro-jects if not in “realm of Real Es-tate Business” : The Press Note permits FDI in completed projects for operation and management of townships, malls/shopping complexes and business cen-tres. The term “business centres” was not defined in the Press Note. The dIPP has clarified that “business centre” includes where multiplicity of businesses of the same or different nature are being carried out from a particular building. Thus, it ap-pears that any building which has commercial user and houses multiple businesses would fall under this definition. Therefore, it appears that 100% FDI under the Automatic route is permit-ted in completed projects for operation and man-agement of commercial buildings from which there are a number of businesses operating. The dIPP has further clarified that FdI in completed projects for operation and man-agement of townships, malls/shopping complexes and business centres is permitted, only as long as it is not in the “realm of real estate business”. Real estate business means the definition under FEmA Notification No. 1/2000-rB dated 3 may 2000 read with rBI

To sensitise the stakeholders, engased in real estate development, a workshop was organized by NAREDCO in Delhi on ‘use of Green Technologies in Real Estate’ in all future constructions. The objective of the workshop was to create awareness of green materials and technologies for sustainable and economical real estate development. It was also to sensitize architects, engineers, consultants, developers and individual owners about its benefits and apprise about the relevant technologies, materials and standards.

Green Technologies and Future

ConstructionSpeaking at the inaugural session of the workshop, mr. KK Jaodder, Chief Town & Country Planner, Ministry of urban Devel-opment, Government of India stated that the model building bylaws are being codi-fied at the National level where green devel-opment will be given due importance. Dr PC Jain, Chairman, Indian green Building Council (IgBC) stated that three more India will have to be created in terms of construct-ed space footprint, between now and 2050, to meet the demand of growing population

and urbanisation, which would consume most of our natural resources if we do not wake up and start using renewable energy sources, do water harvesting to recharge water table and construct buildings which are energy neutral.

Mr. Navin M Raheja, Chairman, NAREDCO suggested that sustainable building prac-tices should start from the planning stage itself and proposed “metering” at the RWA level to measure waste water discharge. He

by Brig rr singh

Master Circular, i.e. “the dealing in land and immovable property with a view to earning profit or income therefrom and does not in-clude development of townships, construc-tion of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships”. However, FDI in completed projects for operation and management of townships, malls/shopping complexes and business centres naturally does involve “earning profit or in-come”. Thus, on perusal of the above definition, the question of whether or not “operation and management of townships, malls/shopping complexes and business centres” by defini-tion is in the “realm of real estate business” is unclear.

While the DIPP has provided some expla-nations as above, several other ambiguities still remain in the Press Note, as we had re-ported in our newsletter dated 4 February 2015 titled ‘liberalizing the Construction-Development Sector: Comprehensive Con-cessions in the FDI Policy’. Further, some of the explanations given are incomplete and may not resolve the issues contained in the Press Note.


further stated that it is high time the build-ers and developers gave proper attention to sustainability.

Climate suppleness related to green build-ings, rating systems for green buildings, use of local materials for sustainable housing, architectural & design considerations for minimum energy consumption, managing sustainable green design in building con-struction, performance of green rated build-ings, zero energy buildings, emerging green technologies and marketing of green pro-jects etc were discussed by eminent speak-ers in different sessions.

Integration of Green Technology in Real Es-tate & Smart Cities was emphasised. Case studies bought out that sustainability is more cost effective if it is incorporated at the design stage itself, as it helps to reduce capital expenditure. Many solutions which are cost neutral or have reasonable payback periods were discussed. By leveraging cost, a product can be made cost neutral upfront.

To promote construction of green buildings, need for certain immediate policy interven-tions in terms of changes in UlB by-laws for use of green materials, water harvesting, sewage treatment and recycling, use of so-

NAREDCO’s Workshop

low interest rates for green projects and for energy generation using renewable sources like sunlight, wind and water was also rec-ommended.

The workshop conclusion was that archi-tects, planners and builders must duftail green building concept and integrate green technologies into their projects at design stage itself. use of renewable energy from sun, wind and domestic wastes and en-ergy efficient appliances is necessary to reduce depletion of natural resources and minimize energy consumption. Initially, incentives to material & machinery manu-

factures, builders and consumers are also required besides twicking policies to make green construction feasible and acceptable. There is also a need to sensitize people and make them aware about the efficient use of energy and water, waste and sewage treat-ment and management, sewage recycling, water harvesting and use of energy efficient appliances. A combined efforts from all can change the picture and save the environ-ment.

The consTrucTion AcTiviTy is no differenT As iT impAcTs The eArTh surfAce, florA And fAunA, wATer, energy And so on. lATely, we hAve sTArTed reAlising imporTAnce of green And susTAinABle Buildings And, As of now, indiA hAs ABouT 2.1 Billion sq fT of green Buildings And more ThAn 50% of ThAT is in residenTiAl segmenT.

lar water heaters, roof top solar panels for electricity generation, waste composting, recycling of construction and demolition waste, introduction of Energy Conserva-tion Building Codes(ECBC), taking out green building projects from the preview of environmental clearances and incentiv-izing green building development with additional FAR/FSI were highlighted be various speakers. It was also opined that green building material and plant manu-facturers will need subsidy to keep material and plant cost low with a view to promote green technology. Financial institutions help through special discount in terms of


Successful Sales

Proverbs really do tell a story. Just as it is commonplace to say ‘clever as a fox’, it is equally natural to link persuasion and convincing skills with salespersons! Sales is the foundation of revenue genera-tion and yet so few people have the self belief that they can do success-ful sales.

leaDs anD prospeCtsBefore one sets out to get one’s prospects or the potential client or customer, one needs to ask of each lead, “Who would benefit most from this?” Next one looks for ways to make contact with those people. To make an informed decision about which prospects to approach, do some research about any pro-spective client. Making initial contact may be a challenge but is a worthwhile exercise to understand the market dynamics also.

In selling, qualifying your prospects means finding out not just who they are but also what they do, what they have, and what they need in order to confirm that your product or service is a good fit and that they have the resources to invest in it. you can understand why the car dealer is happier when spouses are both on the lot car-shop-ping together: It is a waste of time to spend too much time selling to someone who’s not in position to make the buying decision.

plan anD prepare Preparation is the key to successful sales and this preparation includes both the re-search and analysis of the potential person or organization as well as fine tuning the sales pitch. People have a natural tendency to mirror behaviour so if you approach your customers with a spring in your step and a smile then guess what – they will recipro-cate your behaviour. understanding the ob-vious and latent needs of a customer comes next and for this one needs to be not just a good listener but also ask the right ques-tions. These questions can be open, closed or rhetorical. It makes sense to consider the kind of questions which will help you un-derstand the requirement better and impro-vise o the solutions to be offered.

“People don’t care how much you know but they know how much you care by the way you listen,” said someone who knew that the real value of communication was not just in

TECHNIQUES AND TRENDS

the speaking but in the listening. undoubt-edly, good listening is the key to effective sales and requires the additional qualities of empathy and assertiveness to get your way in sales. A conscious effort to ‘summarise and Confirm’ customer needs by detailing it to them in a way that the information is brief and highlights the main points makes the customer feel acknowledged and reas-sures him that you are taking an interest and that you consider the customers comments important to you. By physically ‘nodding’ and verbally we are looking using words like ‘yes’ and ‘sure’, and following up with a closed question like ‘Is that OK?’ you can control this part of the sales process and move onto the next step.

powerful presentations your presentation of your product, service, or idea requires the most preparation. In your preparation, practice your answers to common questions with a family member or fellow salesperson. Make a list of the ben-efits you think are your strongest persuad-ers in placing your product. Then figure out a way to work those points into responses to the common questions that potential cli-ents ask.

Once we receive all the necessary details from the customer and we have confirmed that we have understood correctly, we are able to form a picture of which system will suit them and must match their needs! Not only must we be able to positively recom-mend a but also ensure that the benefits are linked to their needs. This selling tool is called Feature Action Benefit (FAB) in which while stating the feature the salesper-son also details the benefit so that the cus-tomer sees a point in buying. It is advisable to add the unique selling points, or uSPs during the matching process so that it is clear what sets you apart from the competi-tion at this point. This is the system that you are recommending and people will ‘buy in’ to the sale when they see the product actu-ally performing their needs.

Sometimes the customer can’t even iden-tify his needs and if you can deduce them and devise a solution, you’re probably half-way toward landing a sale. For example, if

Whether a sale is an art or a science, you need to ace it to be successful in busi-ness. While some believe sales people are born not made, others insist it requires skill and technique to ace the process of sales and can be learnt. We demystify sales through a step by step process.

wheTher A sAle is An ArT or A science, you need To Ace iT To Be success-ful in Business. while

some Believe sAles people Are Born noT mAde, oThers insisT iT

requires sKill And Tech-nique To Ace The pro-cess of sAles And cAn

Be leArnT. we demysTify sAles Through A sTep By

sTep process.

by Meenakshi sharMa


Successful Sales

purchase. Coax out every objection they have until the well is dry and address every single one. As you move towards the close of the sale, you are practically moving to-wards the conclusion that, except for these three (or four or five) objections, which we can iron out, we have a deal!

Close tHe saleClosing should follow naturally and smoothly after you address your prospect’s concerns. In fact, getting your prospect’s business can be as simple as saying, “How soon do we start?” At this point, if you’re confident about being able to give her what she needs, you should begin taking verbal ownership of your future business rela-tionship with assumptive statements and questions. While closing a sale sounds like utter common sense, many people forget to do this step: you have to ask for the or-der. Close early and close often. Typically, a nice, crisp handshake signals a done deal and the end of negotiations. In this age of cell phones and text messaging, sometimes you need to be clear and confirm if the deal is done and the advance or the full payment can be made.

As a non-renewable resource, Land often constitutes the fulcrum of discussions on growth and develop-ment. The conversations on land acquisition are currently dominated by the recent legislative develop-ments. An understanding of these developments will enable us to participate in and contribute to these conversations.

In 2013, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (2013 Act) was passed. An Ordinance was promulgated on 31st December, 2014 to amend the 2013 Act. On 10th March, 2015, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill 2015 was passed by the Lok Sabha to replace the 2014 Ordinance. Both Houses of Parliament were adjourned on 20th March, 2015. Following the prorogue of the Rajya Sabha by the President on 28th March, 2015, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance 2015 was promulgated on 3rd April, 2015.


LAND ACQUISITION: Regulatory Update

tHe online trenDIn todays day and age, your website, Fa-cebook page, linkedin profile and Twitter handle are even more important than your own image. Clearly they need to mirror you and align with your overall goal even as they follow the selling cycle through in-teractive experiences and well thought out sales strategy.

Spend time with your service provider to ensure your website and social media pages reflect the company vision and make sure that the value systems of each of these so-cial media create the same experience so that the customer understands the advan-tage of associating wit you. While you may use any of these media, you are and will be your best sales person so keep building that repertoire to ace the sale,

Be it your professional or your personal life, the importance of maintaining relation-ships cannot be over emphasized. So once your selling cycle is complete, remember to provide the best service and ensure repeat customer and plenty of referrals. Happy Selling

The increAsing humAn requiremenTs And level

of economic AcTiviTy plAce increAsing demAnds on lAnd.

iT is imperATive ThAT our conversATions

AdequATely Address The conflicTs AssociATed wiTh lAnd And seeK To Achieve effecTive And

efficienT use of lAnd As pArT of An inTegrATed

lAnd mAnAgemenT sysTem, if we seeK To meeT our

counTry’s requiremenTs in A susTAinABle mAnner.

a wholesale customer had huge amounts of cash tied up in inventory, offer them fi-nancing for a year would help solve their biggest problem and they would be likely to give you more opportunities as a result. If cash wasn’t an issue, however, then of-fering them financing wouldn’t be such an inducement and you’d have to find some other hook. The key is to identify what causes heartburn for your client and to help remedy it.

antiCipate anD HanDle oBJeCtionsThe best way to handle negative comments or concerns your prospect may raise is to answer in simple, unemotional terms and have recommendations in mind. If you’ve already seen and addressed the objection before the prospect brought it up, you are closer to the sale.

At all stages, ensure you are speaking to the right person who is in a position to

DATE LEgISLATIVE EVENT

27th september, 2013 2013 Act

31st December, 2014 2014 Ordinance to amend the 2013 Act

24th February, 2015 2015 Bill to replace the 2014 Ordinance tabled in lok sabha

9th March, 2015 Amendments to 2015 Bill proposed

10th March, 2015 2015 Bill passed in lok sabha

20th March, 2015 Both houses of Parliament adjourned

28th March, 2015 Rajya Sabha prorogued by President

3rd April, 2015 2015 Ordinance promulgated

LEGISLATIVE DEVELOPMENTS AT A GLANCE

Be iT your profession-Al or your personAl

life, The imporTAnce of mAinTAining relATion-ships cAnnoT Be over emphAsized. so once your selling cycle is

compleTe, rememBer To provide The BesT ser-

vice And ensure repeAT cusTomer And plenTy of

referrAls. by sarita d souza



The Ordinance reflects the amended Bill passed by the Lok Sabha and includes the following: y Private Entity: While the 2013 Act ap-

plied to acquisition of land for private companies, the 2015 Ordinance changes this to acquisition for ‘private entities. A private entity refers to an entity other than a government entity and includes a proprietorship, partnership, company, corporation, non-profit organisation like a society or trust or other entity under any other law.

y Acquisition under 13 other laws in con-sonance with the 2013 Act: While the 2013 Act exempted thirteen laws from its purview (Coal Bearing Areas Acquisition and Development Act 1957, the National highways Act 1956, land Acquisition (Mines) Act 1885, Atomic Energy Act 1962, the Indian Tramways Act 1886, the Railways Act 1989, the Ancient Monu-ments and Archaeological Sites and Re-mains Act 1958, the Petroleum and Min-erals Pipelines (Acquisition of Right of User in land) Act 1962 and the damodar Valley Corporation Act 1948, Electricity Act 2003, requisitioning and Acquisition of Immovable Property Act 1952, the Re-settlement of Displaced Persons (land Acquisition) Act 1948 and the Metro Rail-ways (Construction of Works) Act 1978), it provided that the compensation, reha-bilitation and resettlement provisions of these thirteen Acts be aligned with the 2013 Act within a year of its enactment (i.e. by January 1, 2015). The 2015 Bill and Ordinance brings the compensation, re-

The 2015 Ordinance permits the Govern-ment to, by notification, exempt from these provisions, projects in the categories of (i) defence, (ii) rural infrastructure, (iii) afford-able housing, (iv)industrial corridors set up by the appropriate Government and its un-dertakings (in which case the land shall be acquired up to one kilometre on both sides of designated railway line or roads for such industrial corridor);and (v) infrastructure projects including PPP projects where the government owns the land. Before the is-sue of such notification, the government is required to ensure the extent of land for the proposed acquisition keeping in view the bare minimum land required for such project.

y Survey of wasteland: The Ordinance re-quires the Government to conduct a sur-vey of its wasteland including arid land, and maintain a record containing details of such land, as prescribed by the govern-ment.

y Return of unutilised land: The 2013 Act required land acquired under it which re-mained unutilised for five years, to be re-turned to the original owners or the land bank. The 2015 Ordinance states that the period after which unutilised land will need to be returned will be: (i) five years, or (ii) the period specified at the time of setting up the project, whichever is later.

y Rehabilitation and resettlement: under the 2013 Act, the rehabilitation and reset-tlement award for each affected family in-cluded employment for at least one mem-ber of the family. The Ordinance changed this provision to ensure compulsory em-ployment to at least one member of such an affected family of a farm labourer.

y Hearing of Authority: The 2013 Act pro-vided for the establishment of a land Acquisition, Rehabilitation and Resettle-ment Authority who may be approached in case a person is not satisfied with an award under the Act. The Ordinance provides that this Authority must hold its hearing in the district where the land acquisition is taking place, after receiving a reference from the Collector and giving notice of this reference to all concerned parties.

y Retrospective application: under the 2013 Act, the land Acquisition Act, 1894 will continue to apply in cases where an award has been made under the 1894 Act. However, if such an award was made five years or more before the 2013 Act, and the physical possession of land has

not been taken or compensation has not been paid, the 2013 Act will apply. The 2015 Ordinance states that in calculating this time frame, any period during which the proceedings of acquisition were held up: (i) due to a stay order of a court, or (ii) a period specified in the award of a Tribunal for taking possession, or (iii) any period where possession has been taken but the compensation is lying deposited in a court or any designated account, will not be counted.

y ‘Public purpose’: The 2013 Act excluded the acquisition of land for private hospi-tals and private educational institutions from ‘public purpose’. While the origi-nally tabled bill sought to include acqui-sition of land for private hospitals and private educational institutions within the scope of ‘public purpose’, the amend-ments to the Bill and the Ordinance now provide that acquisition of land for pri-vate hospitals and private educational in-stitutions is no longer included in ‘public purpose’.

y Offences: The 2013 Act stated that if an offence is committed by a government of-ficial, the official would be deemed guilty unless he could show that the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence. The Ordinance provides that if an offence is committed by a government official, he can be prosecuted if the procedure laid down in Section 197 of the Code of Crimi-nal Procedure, 1973 is followed.

On 13th April, 2015, the Supreme Court sought the Government’s response to a Public Interest litigation which challenged the constitutionality of the President’s power to re-promulgate an ordinance on the ground that it subverted legislative pro-cess, since the Bill had already been passed in the lok Sabha. The Court has given the Government four weeks to respond. If the rajya sabha passes the 2015 Bill once it re-convenes on 23rd April, this PIl could be rendered redundant since the fundamental premise on which it was based no longer exists.

The increasing human requirements and level of economic activity place increas-ing demands on land. It is imperative that our conversations adequately address the conflicts associated with land and seek to achieve effective and efficient use of land as part of an integrated land management system, if we seek to meet our country’s re-quirements in a sustainable manner.

on 13Th April, 2015, The supreme courT soughT

The governmenT’s response To A puBlic

inTeresT liTigATion which chAllenged The consTiTuTionAliTy of

The presidenT’s power To re-promulgATe

An ordinAnce on The ground ThAT iT suBverTed legislATive process, since The Bill hAd AlreAdy Been pAssed in The loK sABhA. The courT hAs given The governmenT four weeKs To respond. if The rAJyA

sABhA pAsses The 2015 Bill once iT reconvenes on

23rd April, This pil could Be rendered redundAnT since The fundAmenTAl

premise on which iT wAs BAsed no longer exisTs.

habilitation and resettlement provisions under these Acts in alignment with the 2013 Act with effect from 1st January, 2015.

y Exemption of five classes of projects from Consent, Social Impact Assess-ment provisions: The 2013 Act required the consent of:(i) 80% of owners of land acquired for

private projects, and

(ii) 70% of land owners obtained for PPP projects.

The 2013 Act required a social Impact As-sessment to be conducted to identify af-fected families and calculate the social im-pact when land is acquired. It also placed a restriction on acquisition of irrigated land.


INCREASED CONFIDENCE LEVEL IN INDIAN PROPERTIES AND BRANDS SEE GUESTS PREFER TO GO A TAJ OR AN OBEROI WHICH

HAS SHOWN CONSISTENCy AND qUALITy AS PROPERTIES GO THROUGH A REBRANDING. by teaM nr

Hospitality and Real Estate

Known for its ability to understand customer requirements to the maximun extent possible, the hospitality industry today has expanded far beyond the typical hotel room scenario where a weary traveller trooped in to sleep and was out at the crack of dawn. Today, a hotel is a showcase of the culture and hospitality of that country, region and brand and hoteliers take pains to give a complete experience to the traveller who need not even leave the property to understand the culture of that place.

In its quest for customer satisfaction, the hospitality industry today has probably come of age and reached a tipping point in its learning and business development curve. The economic slowdown and uncertainty of the past have now been

put aside as India stands at the cusp of a hospitality and rebranding boom.

The rebranding initiative saw leela bidding adieu to the geneva based Kempinski, Pallazzio Hotels and leisure ended its relationship with hong Kong based shangri la International Hotel Management and the Zurich based hospitality chain, Swissotel Hotels and Resorts parted ways with Bengaluru’s Convention.

This rebranding trend is indicative of an increased confidence level in Indian properties and brands. They now prefer to go the Taj or the Oberoi way to showcase hospitality and are more inclined to chart their own course and growth independently. The desire to remain profitable in an uncertain economic scenario would see

the trend of increased brand conversion and consolidation as less successful hotel businesses look at mergers and acqusitions or seek alternate business solutions.

The unique complexities of the hospitality industry need a constant assessment, re-assessment and balancing of operational business property issues, Return of Investment (ROI) driven capital invbestment decisions, customer satisfaction and diversification solutions. All categories, whether franchise affiliated full and limited services hotels and resorts, independent boutiques, conference centers and venues, spas, gaming, golf and

‘At Your Service’Hospitality Trends

destination resorts, fractional ownership and timeshare properties and mixed use realty developments with a hotel component, infuse and blend into each other to satisfy a discerning customer’s diverse needs.

Competition in the hospitality sector has intensified manifold with the entry of new international players and the extant older hotel management firms have now woken up to the fact that they too need to update their Standard Operating Procedures (SOP), business conducting methids and revenues to stay relevant, competitive and in the hunt. This informed business savviness

in iTs quesT for cusTomer sATisfAcTion, The

hospiTAliTy indusTry TodAy hAs proBABly

come of Age And reAched A Tipping poinT in iTs

leArning And Business developmenT curve. The

economic slowdown And uncerTAinTy of The pAsT hAve now Been puT Aside

As indiA sTAnds AT The cusp of A hospiTAliTy And

reBrAnding Boom.

has in turn, translated into better deals for the customers who now wield a far greater bargaining power than hitherto in consonance with the vast variety of available brands.

The increased viability of the Bed and Breakfast concept courtesy the Common Wealth Games, the conversion of old havelis into boutique hotels, the transformation of large plotted area residences into workable guest houses and the advent of home stays has also served to bring about a change in mindset in the outlook of hotel operators and brands. Customers, to their delight, find the brands more open to negotiations and compromises on the business front with the catch word becoming value addition instead of remaining cash centric. These changing dynamics in the hospitality real estate space coupled with trending mindset changes and business models are clearly indicative of a maturing industry and augurs well for the future. literally, the world is the customer’s oyster as he looks out for good bargains and hospitable stays – on work or while at play.

This rebranding trend is indicative of an increased confidence level in Indian properties and brands. They now prefer to go the Taj or the Oberoi way to showcase hospitality and are more inclined to chart their own course and growth independently. The desire to remain profitable in an uncertain economic scenario will see the trend of increased brand conversion and consolidation as less successful hotel businesses look at mergers and acqusitions or seek alternate business solutions.


Role of Market Conditions

For home buyers, the best time to invest in a property is when it is a buyer’s market. A buyer’s market is defined as an environ-ment where there are more homes ready to be sold than the actual number of cus-tomers. Competition among sellers brings down the prices to favorable ranges, and sellers would also be more open to nego-tiations, concessions and waiving some of the additional charges related to residential property purchase, such as stamp duty and registration charges. A higher number of available properties will also give buyers the added advantage of a wider range of choice.

A seller’s market, on the other hand, is one where a significant numbers of buy-ers would be looking at a lesser number of properties. This gives the seller an upper hand, and buyers are sometimes open for a bidding war for the home of their choice. Obviously, property sellers earn the maxi-mum profit in such a case.

The Role of Market Conditions in Real Estate InvestmentHome buying is one of the most significant financial investments, and it is natural that one would be con-cerned about the worth of this investment. Consequently, one should take one’s time to do proper research when one is purchasing a property. Hurried decisions on this front invariably result in paying more than one should, and this has an impact on how the property performs as an investment asset.

A significAnT clue To The worTh of A properTy

would Be The locATion. nexT Are The mArKeT

condiTions prevAiling in The locATion where one

is plAnning To invesT. furTher, one will hAve

To esTimATe wheTher The properTy vAlue will increAse in ThAT specific locATion, And if so, Then By how much. locATions

ThAT Are considered populAr now mighT noT remAin so in The neAr fuTure, And vice versA.

Market conditions are determined by a va-riety of factors like the general state of the economy, shares/profits and losses of ma-jor players/employers/companies in an area, changes in community fabric (such as infrastructure changes), construction of new homes, and natural calamities. Mar-ket conditions are also influenced by policy-level changes, such as revisions in interest rates and incentives given to developers, property buyers or both.

Experienced and savvy real estate inves-tors know their way around market condi-tions and will be able to identify if it is the best time to make property purchases. If a wait of a few months can save you a good amount of money, why hurry?

However, normal home buyers cannot think and operate like investors. For them, the primary concern is whether they are obtaining the best value for their capital expenditure, or whether waiting for a few months could result in significant savings.

They are often puzzled by the multiple in-puts about the existing market conditions that they get from media stories. It is hard for them to make an independent decision, and the various viewpoints provided by friends, relatives and colleagues – many of whom consider themselves ‘experts’ – do not help.

One of the most reliable ways for a nor-mal middle-class home buyer to ascertain whether market conditions are optimal for property purchase is to study the findings of reputed, independent research agen-cies. Additional inputs can be sought from reputed brokers, but finally there is no re-ally ‘fool-proof’ strategy. Apart from being a financial decision, home purchase is also a decision based on one’s own perceptions and desires. Often, the best way to reach a decision on buying a home is not guided so much by market conditions but one’s own readiness to go in for home ownership. De-cisions reached on this basis are usually the most satisfying and fruitful.

by arvind jain


Pre-approved Home Loans

wHat is tHe DifferenCe Between loan pre-qualifiCation anD pre-approval?Pre-qualification for a home loan is more or less like an educated estimate provided by the lending company. They will be let-ting you know the type of loan you could qualify for, and the maximum amount. The estimate is usually based on your financial history, loan eligibility and buying power. A pre-approval, on the other hand, is a written confirmation by the lender.

Before handing over the pre-approval cer-tificate, loan officers will completely access your employment and remuneration infor-mation and do a complete ‘credit-worthi-ness’ check. This involves collecting all the data related to your past and current debts, repayment history, disposable income, cred-it card record, etc. and running it through software that will calculate whether you could be a likely candidate for approval.

How to seCure a pre-approveD HoMe loan?While seeking to become pre-approved, it is always best to approach a lending com-pany that you know or can be referred to by a friend, colleague or family member. The lender needs have the assurance that you are a credible borrower. However, do not stop searching after you have met the first possible lender.

Ask around and look for the lending institu-tions that that provide the most competitive interest rates and are known for their help-ful customer service. The loan officer from the identified lending institute will then pay you a visit and help you streamline your financial statements so that you become ready to discuss your bank statements, in-vestments, holdings, salary slips, income tax returns and other information related to your finances. This basically starts the pro-cess which will end with you becoming a pre-approved borrower.

wHat gooD will a letter of pre-approval Do?Firstly, a pre-approval letter lets you know the exact budget range you should be searching in. This helps you stay in sync with your financial reality and keeps you from allowing your focus to stray to prop-erties that you cannot afford. secondly, hav-ing a pre-approval letter means that you can grab an offer immediately when it comes across and is in your budget range.

The letter states that the finances are ready when you choose to ask for them. Impor-tant Note: it is highly advisable to work with lenders who have the ability to pro-vide customized pre-approval letters, inclu-sive of the maximum purchase price. Sellers could get greedy if they see a greater loan amount than their quote.

Getting pre-approved for a home loan is a crucial step that can put you in the best pos-sible position in the home buying process. It will give you both peace of mind and keep you focused on what what to look for and what to avoid in terms of affordability.

Be A Smart Property Buyer With A Pre-approved Home LoanHome buyers, and especially first-time buyers, would like to be in the best position to make their purchase once they have identified their dream home. The most challenging aspect of home ownership is invariably financing. Questions like which lending institution to approach, what loans should be applied for, how much loan to be ap-plied for and how much time will it take for approval need to be answered.

The BesT ‘Be prepAred’ move on This fronT is

To Become pre-Approved for A home loAn. doing

so meAns ThAT This TricKy And Time-consuming

AspecT of home purchAse hAs AlreAdy Been deAlT

wiTh, And ThAT one cAn enTer The mArKeT

focused squArely on The BesT opTions. geTTing

pre-Approved Also puTs you in The sTrongesT

possiBle plAce when iT comes To negoTiATing The

BesT deAl.

by anil pharande


Real Time Ethics

The fact is, unethical practices in real estate are the product of a short-term, mercenary approach to the business. This phenomenon is most evident in smaller brokerages, which often have no more than a single dealing with many of their customers.

I’m not saying that all small brokerage houses are unethical (I person-ally know a number of small operators whose business methods are completely above reproach. They know that good ethics equals good business). What I’m saying is that a professional real estate company that takes ethics seriously, views and treats every new prospect as po-tential long-term client. When every real estate deal is regarded as the first of many to follow, ethical conduct tends to become a natural by-product.

An ethical mind-set cannot be enforced. It comes as a result of a higher awareness of how business works best in the current times. The In-dian real estate market was notorious for its lack of transparency, but that is changing rapidly. The larger property consultancies are han-dling a number of international clients now – clients who are eager to enter or expand operations on the Indian subcontinent. Such clients have high standards in terms of service quality and clarity, and are often justifiably worried about being taken for a ride by unscrupulous operators. All they initially have to depend on is the tangible, verifi-able ethical approach of their real estate partners on this end.

So, what constitutes ethical real estate business practices in real time? I can’t cover all facets of ethical business conduct here; some pertain to clients, others to employee conduct and yet others to Government authorities. However, it is the way in which one deals with clients that makes or breaks vital business relationships. To be brief, I’ll focus on this aspect here.

Among other things, a ethical real estate company ensures that all business information is honestly and accurately recorded and report-

ed in compliance with applicable laws. It also has strict rules against bribes, kickbacks and bartering arrangements, or any other incentives offered to obtain or retain busi-ness. In addition, it scrupulously avoids all improprieties or conflicts of interests, and has a strong policy against insider trading.

Ethical business practice also means that a real estate company does not separate the purchaser and the buyer to create addition-al business advantages. likewise, it will not attempt to pressure a client into making a decision, or provide any kind of misleading information to prompt a desired decision.

I think it’s clear that this narrows down the field quite a bit – such parameters, when adopted and enforced, certainly eliminate a lot of options for unscrupulous profiteering.

However, ethics must often go beyond the requirements of clients. After all, there are always elements that seek to recruit pro-fessional help in exploiting the immense

REAL-TIME ETHICS In The Real Estate Business

potential of Indian real estate without necessarily adhering to ethical business standards. I would be the last to deny that, even with the new spate of guidelines and legislative amendments in place, there are enough loopholes and inconsistencies in the system to make that possible.

“I do not believe maximizing profits for the investors is the only acceptable justifica-tion for all corporate actions. The investors are not the only people who matter. Corpo-rations can exist for purposes other than simply maximizing profits.” - John Mackey

A real estate company does not only have a responsibility to its clients – it is also ac-countable for the state of the market it op-erates in. Is this important? For long-term players with a clear view of the future, it certainly is. After all, unethical business practices contaminate and weaken the mar-ket, and in the long run harm business for everyone.

whAT consTiTuTes eThicAl reAl esTATe Business

prAcTices in reAl Time? i cAn’T cover All fAceTs of eThicAl Business conducT

here; some perTAin To clienTs, oThers To

employee conducT And yeT oThers To

governmenT AuThoriTies. however, iT is The wAy

in which one deAls wiTh clienTs ThAT mAKes or BreAKs viTAl Business

relATionships.

We keep talking of ethical real estate busi-ness. Is a ‘code of ethics’ just a fancy mani-festo you put on your office wall? Does it mean that the company merely steers clear of illegal dealings? If that was all there was to real estate ethics, it wouldn’t be saying much. After all, thanks to India’s rather unclear legal system, it is possible to follow the path of dishonesty and self-interest with-out actually doing something illegal. I have always thought that in real estate, the legal way can often be the lowest standard.

by anuj puri


by prithvi nath

NArEdCO CElEBrATEs ThE FIrsT ANNIvErsAry OF NArEdCO OdIshA WITh ITs gOvErNINg COUNCIl AT KONArK TEmPlE, JAgANNATh PUrI

Koh-i-NoorPower of Planet

A year ago in 2014 AD, humans discovered me on Franco-swiss Border in a deep tun-nel by replicating the Big Bang and human science identified and named me as god’s Particle higgs Boson. From a weightless universe of nothingness has been born a liv-ing one with a blazing Sun in the center and seven planets going around it.

Only one out of these, Planet Earth is now my laboratory for the greatest experiment of all times- the evolution of humanity. It was over five million years ago that the tectonic plates on which the Planet Earth rested, clashed creating continents. For mil-lions of years, life in various forms devel-oped from insects to animals culminating in mammals that roamed the planet. They became extinct as they could not keep pace with the changes in the environment.

It was 10 million years ago that Eurasian and Australasian tectonic plates collided thrusting upwards the highest Himalayan Mountain Chain on top of the world be-tween mount Everest and mount Kailash. Surrounded by the emerald lake of Man Sarovar, this heaven on earth became the evolution point of humans from the great apes who walked in erect position on two legs and had manual dexterity.

Thus came to an end the Golden Age of Ani-mals, Apes and early humans living natu-rally without the most complex of my be-ing – the human brain. The entry of humans wiped out any difference between the god and Humans with me entering the Earth as Adam and Eve on this Heaven on Earth to begin human evolution. It has taken me 50,000 years through four ages- Golden of animals, apes and early humans, Silver of the evolved setting standards of sublime, Brass of my entry and Iron- the shortest swinging like a pendulum back to Brass to finally reach the Age of Transformation that is the last and ultimate part of my jour-ney reflected in Koh-I- Noor- the Power of Planet.

Then, began the epic of the evolution script-ed by men of intellect in the second Human Age-Silver when they established stand-ards of living approaching the sublime. I descended on the Planet Earth during the third age-Brass iwith full power of the sun as the energizer reflected in a rare gem Koh-I-Noor to determine the future of Planet.

Dwaapar marks the end of Iron Age and the beginning of Dwaapar, when all human be-ings realize that they are born of God’s Par-ticle- higgs Boson.

Last Word

The human universe began 50,000 year ago and on the end of the Iron Age, we have en-tered the Brass age (dwaapar) the ultimate in Human Evolution. What began with the God’s creation of humanity in His/ Her im-age is reaching the climax with every hu-man transforming into God. What does it mean? It means that all humans are equal and humanity of over seven billion has NO difference based on Caste, religion, Belief, Race or Nation.

52 National Realty | April 2015

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