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Wednesday, January 28, 2015

State will bring out a new TDR policy, says housing minister

State will bring out a new TDR policy, says housing minister
Sudhir Suryawanshi @ss_suryawanshi


Mumbai: Maharashtra has decided to put the proposed uniform Transfer of Development Right (TDR) policy draft on hold and will issue a revised one shortly.
Housing minister Prakash Mehta said that the government will re-look the draft of the revised TDR policy.
“If we continue with the proposed policy, redevelopment of Mumbai will stop. The proposed policy has several flaws,” Mehta said.
“Once the chief minister returns from Davos, we will issue a final draft for suggestions and objections,” Mehta said.
dna, in its edition dated January 19, 2015, had reported that Mumbai needs a separate TDR and a uniform policy for the state was not in anyone’s interest. Among the many other flaws in the policy was the linking of TDRs and road width.
Under the new policy, developers will not be able to upload TDR if the width of the abutting road in the project is less than 9 metres.
As per the earlier draft, 0.75 TDR along with an FSI of one was proposed for a road width between 12 to 18 m. For a road width of 18 -24m, 1 TDR was proposed, and for a road width of 24-30m, 1.25 TDR, and for a road width above 30m, the TDR proposed was 1.5.
In Mumbai, there are only a few roads like SV Road and Link Road, which are more than 30 metres wide. Most of the proposed redevelopment projects involve roads which are less than 9 metres wide. This would have meant redevelopment of 80% of Mumbai’s old and dilapidated buildings would not take place.
will bring out a new TDR policy, says housing minister
Sudhir Suryawanshi @ss_suryawanshi

Mulund’s Nirmal Lifestyle to shut

Mulund’s Nirmal Lifestyle to shut
Nauzer Bharucha,TNN | Jan 23, 2015
MUMBAI: Mall business may no longer be as lucrative because of high gestation and high investments, maintenance costs and low returns.

The latest casualty is one of Mumbai's oldest and biggest malls, Nirmal Lifestyle in Mulund (West), which is shutting down. The five-lakh-square-foot mall, which opened in 2003, is now in a virtually decrepit state with most shops shut except for a few retail stores, a multiplex and eating joints. Sources said they have been asked to vacate once their leases run out. At its peak, the mall employed around 5,000 people.

"It has become unviable to run the mall," said Nirmal Lifestyle head Dharmesh Jain. "It is difficult to sustain and run it because of rentals and maintenance charges," he added.
Property market sources said mall promoters plan to convert the space into a residential complex, where cash flows are instant. Jain, though, said his firm has still to decide how to redevelop the property. "We are contemplating on what to do," he said.

Shubhranshu Pani, regional director, retail services, JLL India, said: "It is stressful to make a mall because the wait can be as long as three years. Retail is not the best option." In comparison, cash flow for a builder in a residential project is instant as people start booking apartments in the construction stage itself, he added. Pani, though, said Mulund still has a highly affluent catchment for retailers.
A Cushman & Wakefield report said increasing vacancy levels and lower quality of availabilities in Mulund led to rentals correcting by 9% in this eastern suburb during the previous year.

Several malls have been struggling to survive, especially when bigger, better ones come up in the neighbourhood. Kandivli's Raghuleela Mall is on the verge of shutting down. Several shops have moved out and the electricity was also cut in recent past. Bhandup's Dreams Mall is almost shut and so was Santacruz's Milan Mall sometime ago. Recently, Navi Mumbai's oldest mall Centre One announced its impending closure.

At Worli, the Atria mall is undergoing a revamp with new anchor tenants. A couple of years ago, its owners were thinking to sell the property. In Thane, Eternity mall took a hit when a new mall opened in the vicinity.

A 2013 Associated Chamber of Commerce and Industry of India survey showed up to 52% malls in Mumbai are lying vacant—a figure second only to Delhi. Experts said a majority of failures were because of faulty designs or lack of strong brands.

Mumbai's high real estate cost along with poor location, bad parking facilities and competition from malls with multinational brands were some of the other factors cited by experts in the retail industry. A builder said another negative factor is that mall operators have to pay property tax even when the premises are vacant.

The Cushman & Wakefield report said transaction activity in Mumbai malls are limited during the year due to lack of quality space. "Occupancy levels in quality malls remain high while the majority of the vacancy is concentrated in lower quality malls. Despite no new supply during the year overall mall vacancies increased 0.1 percentage point in the last one year to 15.4%. This was due to rising vacancy levels in few lower quality malls in Andheri, Mulund and Thane where existing vacancy levels were high and had low preference amongst retailers," it said.

In the US, more than two dozen enclosed shopping malls have closed since 2010, and an additional 60 are on the brink, said a New York Times report, quoting Green Street Advisors, which tracks the mall industry.

Maharashtra to be most attractive business destination in India: Devendra Fadnavis

OMEBUSINESS
Maharashtra to be most attractive business destination in India: Devendra Fadnavis
PTI | Jan 24, 2015

Maharashtra chief minister Devendra Fadnavis.
Text resize:AAA
DAVOS: Looking to attract foreign investors to Maharashtra, chief minister Devendra Fadnavis has promised them easier business environment and faster clearances as he works towards making his state the most preferred destination within India for investors. 

"On one hand, we are improving the entire business atmosphere, on the other hand we are giving 24X7 electricity and water. 

"I feel that in the changing environment, Maharashtra will be the most preferred destination for investors," Fadnavis told PTI in an interview here at the World Economic Forum (WEF) annual meet. 

Fadnavis, who was here for three days to promote Maharashtra among investors and held a series of meetings with business and government leaders from across the world, said the entire atmosphere in India has changed since Narendra Modi became Prime Minister. 

"Now states are becoming more and more competitive. Following Make in India initiative of the Prime Minister, every state today wants that there should be 'make in their own state'. 

"I have also announced 'Make in Maharashtra'. We are trying to improve ease of doing business so that investors get an ecosystem where this entire license-raj is done away with," he said. 

"We have started in Maharashtra certain land reforms, reforms in giving permissions, we have automated certain licenses," Fadnavis said. 

The chief minister said that earlier, if a person wanted to set up an industry in Maharashtra it used to take him from 1-3 years, now it will be only few months. 

"We have brought down the number of permissions required, we are bringing everything on a single IT platform. 

"There are certain permissions that have been put on automated route wherein if a person does not get the permission in three days, it would deemed to be given," Fadnavis said. 

OPTIMISTIC OVERTONES FOR 2015

OPTIMISTIC OVERTONES FOR 2015
Ravi Sinha Tpmfeedback


With 2014 behind us, 2015 seems to be the ideal year where the real estate sector of the country can finally hope for better times, with many positive reforms in the pipeline
The year 2014 may have been a below-average year from the market transactions standpoint, it has, nevertheless, given reasons for the real estate community to look forward to better days ahead in 2015. Weathering a year of roller-coaster emotions where the bearish sentiments turned bullish, only to realise that the year ended on a much less than expected note, the sector has carried home the point that the policy makers now understand their point-of-view. More importantly, the government is tweaking the rules and regulations to facilitate the sector in its functioning and funding solutions and hence, 2015, is expected to be a turnaround year.
Fundamentals of the Indian economy too, seem to support this overt optimism.In September 2014, Standard & Poor's raised the outlook for India's `BBB-minus' rating to `Stable (Investment Grade)' from `Negative', saying the country's government mandate and improved political setting offered a conducive environment for reforms. To add to it, the steps being taken for real estate are encouraging and many of the steps (like launch of REITs, relaxation of FDI, etc.,) and policy measures (modifications in new land acquisition act, real estate regulatory bill, etc.,) are set to push India's real estate sector into a confident business climate.
Everyone within the built environment of Indian realty, seems to believe that the year 2015 would be the turnaround year for the sector; a year which will also pave way for long-term reforms in the sector.Anuj Puri, chairman and country head, JLL India, says the year 2014 has been quite fruitful for the real estate sector in terms of business sentiment, although the real effect of many of the policies and amendments announced in 2014 will take effect only in 2015. “Starting with the Union Budget FY2014-15, where affordable housing was considered at par with infrastructure, to relaxation of rigidities in the land acquisition and the Real Estate Regulatory Bill, India's new prime minister has been offering the India real estate sector, a consistent dose of energy. The winds of change are now blowing more perceptibly . Inflation, including the house price component, has now been reduced to the lowest level in recallable history. Property buyers are back in force in most cities as enquiries have rebounded, and developers are finally reading the writing on the wall more accurately and coming in with the kind of supply that is relevant to demand,“ says Puri.
Ravi Saund, COO, JMS Buildtech, maintains that with the economy showing slow signs of revival, real estate will continue to show signs of weakness in line with other sectors and asset classes, at least in the first quarter. However, things will change in the second quarter.The RBI anticipates GDP growth to 6.5 per cent in FY2015-16. Multinationals and India Inc., will hire more human resources to keep up with the heightened business activity. This will have a positive impact on both, residential and commercial asset classes. “Lower borrowing rates, declining inflation and stable government, will encourage the end-user to invest. With property prices staying stable and the investor-friendly market to gether, will give confidence to the investors to take the plunge. The second quarter looks promising, not just for the sector but the economy, in general, and will benefit from the changed political scenario. Demand in the affordable housing sector will continue to drive growth,“ says Saund.
2015 looks positive to Mohit Goel, CEO, Omaxe, as well. Most of the steps taken by the government are expected to show results from the second quarter. Interest rates too, are expected to be cut in the RBI's next policy. The next budget will play a crucial role in defining the government's vision for the economy and the way in which it envisages to achieve its goals. The `Housing for All by 2022' mission of the government, along with the policy on smart cities augurs well for real estate sector. “Towards the end of the year, the leasing activity in the commercial space began to rise and the residen tial space also witnessed some uptick but it was still far away from any level of comfort for the real estate companies. The unanimous view among the developer community, has been that there needs to be a reduction in interest rates. The borrowing cost for developers and buyers is high and the prevalence of such a scenario for a long period of time, can erode a company's profitability and keep the buyers away from the market,“ says Goel.
Prashant Solomon, MD, Chintels India, anticipates 2015 to be a better year for the construction sector with the country seeing increased economic growth, and the removal of barriers to foreign investment increasing demand for construction. “Reports predict the major growth area to be in the residential sector as housing continues to be a favoured investment asset among Indian households. REITs will also further ensure easy flow of FDI and raising funds for developers,“ says Solomon. P Sahel, vice-chairman, Lotus Greens Developers, asserts that a new beginning brings new hopes, so will the year 2015 for the sector. “Being a part of the country's continuous growth process, the sector now deserves better attention from government in the form of policy and budget reforms. Incorporation of land and the real estate regulatory bill, provision of putting in place a single-window clearance system, widening of the ECB and granting an infrastructure status will boost the sector. Over the next five years, the Indian real estate market is expected to grow at a CAGR of 20 per cent, driven by 18-19 per cent growth in the residential segment, 55-60 per cent in retail real estate, and 20-22 per cent in commercial real estate,“ says Sahel.
What the sector now expects is the lowering of borrowing rates and declining inflation; the political stability and the intention of the government is set to be the icing on the cake. It is generally anticipated that the end-users will come out in the market in the year 2015.
More importantly , with the macro-economy improving and the hurdles in project clearances getting settled, it is expected that the focus of the developers will also shift to the volume game of mass housing.
This is where the market really exists in India, and 2015 is set to put the record straight, including setting track record of housing right for the country.
QUICK BYTE
INCORPORATION OF LAND AND THE REAL ESTATE REGULATORY BILL, PROVISION OF PUTTING IN PLACE A SINGLE-WINDOW CLEARANCE SYSTEM, WIDENING OF THE ECB AND GRANTING AN INFRASTRUCTURE STATUS WILL FURTHER BOOST THE SECTOR. OVER THE NEXT FIVE YEARS, THE INDIAN REAL ESTATE MARKET IS EXPECTED TO GROW AT A CAGR OF 20 PER CENT, DRIVEN BY 18-19 PER CENT GROWTH IN THE RESIDENTIAL REAL ESTATE SEGMENT, 55-60 PER CENT IN RETAIL REAL ESTATE, AND 20-22 PER CENT IN COMMERCIAL REAL ESTATE.




Mall Malfunctioning in India and America By Dr Sanjay Chaturvedi

Accommodation Times News Services

The Mall current is all over. The honeymoon period of Malls are coming now for commitments. With total 1036 Mall operational in India till 2014, more than 50% are closed or changed the use. 90% of existing malls are defunct and struggling for business.
All across America, once-vibrant shopping malls are boarded up and decaying. Traffic-driving anchors like Sears and JCPenney are shutting down stores, and mall owners are having a hard time finding retailers large enough to replace them.
About 15% of U.S. malls will fail or be converted into non-retail space within the next 10 years, according to Green Street Advisors, a real estate and REIT analytics firm. That’s an increase from less than two years ago, when the firm predicted 10% of malls would fail or be converted. JCPenney, Macy’s and Sears have all recently announced fresh rounds of closures and layoffs. JCPenney is closing 33 stores, Macy’s is closing five, and Sears is closing its flagship in Chicago - the latest of about 300 closures Sears has made since 2010.

Sea-facing mall boasting high-end brands and an unmatched shopping experience at Navi Mumbai or Milan Mall in Santacruz or many such examples in India shows the dying trend of Mall culture. A nightmare for the owner, Bhumiraj Group, when brands started pulling out of Full Stop Mall on Palm Beach Road, the Marine Drive of Navi Mumbai, it all over now.

Same is the case with Gold City Mall in Navi Mumbai’s premier Vashi area; it is now an office complex teeming with people who bear no resemblance to the inveterate mall hopper.

In Thane, mall culture has almost died. Malls converted in office spaces. Leading Phonic City Mall at Kurla is also showing poor quality goods and economical purchase since foot fall from locals do not allow occupants to show high end products. Oberoi Mall, Hyper City and other malls are now selling groceries more rather than life style goods.

In Delhi, Star City Mall in Mayur Vihar had hoped to capitalise on the rush of people who would walk in and out of the bustling metro station nearby. That was not to be and the management decided to lease the place out to corporates to set up their offices and to some banquet hall owners to rent it out for weddings and other functions.

Highest operational cost and plenty of options with occupants made the Mall lease option worst. On-line shopping portals have added more worst to the situation. The share in organised retail sector, these portals are aggressive and reaching on to palms of the purchasers.

Malls in India and in USA, finding it difficult to survive as occupants like McDonald asking royalty from mall owners to occupy their mall space so that more foot fall will be there, forget the rent. In all, there are less than hundred brands which exhibits in malls. Each has options and hence bargaining power which is killing viability of Mall owners.

INCREASE IN READY RECKONER RATES: IS IT FAIR?

INCREASE IN READY RECKONER RATES: IS IT FAIR?
Vibha Singh Tpmfeedback


The consensus in the real estate industry is that the increased ready reckoner rates in Maharashtra, will negatively impact the market, especially buyer sentiment, which is already sluggish due to a number of factors
The year certainly hasn't started on a happy note for real estate buyers in Maharashtra. Not only has the state government increased the ready reckoner (RR) rates by up to 15 per cent, on an average, with some areas witnessing a hike of up to 40 per cent, with effect from January 2015. This move will lead to an increase in the base value of residential properties. Any escalation in the rates result in higher property prices and as a result, in higher stamp duty and registration charges.
Dharmesh Jain, president-elect, MCHI-CREDAI, explains that “In wake of the current hike in the RR rates, Mumbai's realty market will be adversely affected, which is already reeling from the aftermath of the slowdown. This move will actually not lead to higher revenue for the state government as sales will be stagnant due to this increase in the rates. This move would also be a setback for affordable housing projects, which can rekindle the hope of owning a house in a common man.“

The ready reckoner is a guide published by the state government, which mentions the area-wise minimum rate at which property transactions will be taxed. RR rates are also used as a reference point for various land deals, acquisitions and property-related matters. The government updates these rates every year. Om Ahuja, CEO-residential services, JLL India, says, “Unfortunately, this step will further increase the costs and homebuyers are at a disadvantage in Maharashtra. Over the last few years, the buyers have dealt with the introduction of service tax and VAT, which have increased apartment costs, in addition to stamp duty and registration becoming a sizable portion of the total budget. Developers are going out of their way to offer attractive payment flexibility schemes to buyers to improve sales velocity, but with increased ready reckoner rates, the sales velocity in Mumbai will get impacted. The possibility of a significant price correction in the Mumbai real estate market has now become a distant dream, as the possibility of any new launches being launched at prices lower than RR prices is remote.“

Lalit Kumar Jain, CREDAI chairman and CMD of Kumar Urban Development Pvt Ltd, says, “Any increase in the RR will further escalate the property costs, thereby, making housing units unaffordable for many prospective buyers. It will also make it difficult for builders to get rid of an increasingly bloated inventory.There has been a revival in the real estate sector over the last few months, and now, this hike will certainly hamper that positive sentiment. A homebuyer's outgo will increase now and will impact sales absorption further. The slow sales are also aggravated by the Reserve Bank of India's hawkish stance on rates, making borrowing expensive. Any increase in the rates will have to be passed on to homebuyers. This will lead to a decrease in demand for housing. Also, there will be a complication with respect to section 43C of the Income Tax Act where if ready reckoner prices are higher than the transaction value, then both parties have to pay income tax on the differential amount.“

Traditionally, the RR rates have been very helpful in reducing the asymmetry of information in housing prices among all stakeholders.However, the current situation is such that the RR rates haven't kept pace with the prevailing market conditions. RR prices are higher than the actual on ground realistic prices. Experts feel that any hike will further prolong the recovery process of the real estate sector as a whole. Rohit Poddar-MD, Poddar Developers Ltd, says, “Generally, the rates have been increased by 10-15 per cent across the board. In my opinion, in some areas, there will be no impact on buyers or developers as the market rates are higher than the RR rates. However, in certain areas, there will be an adverse impact as the new rates would be higher than the prevalent prices and this would further reduce the transactions in an already sluggish market.“

Further, these high rates will translate into higher stamp duty (5 per cent of transaction value) and registration (1 per cent) for homebuyers, which will take a further toll on demand and similarly that of developers. According to Anand Gandhi, director, Sugee Group, “With respect to developers, the stamp duty has increased; so buying land to start a project will cost a little higher. There will be more BMC charges including all the premiums that are to be paid e.g. the staircase premium will increase so, the cost for the project will also increase. There is already a lot of burden which includes the sales tax, VAT, taxes or the duties for the construction material, octroi and local corporation taxes.“

Rajesh Prajapati, MD, Prajapati Constructions Ltd., seconds this opinion. “Any increase in RR rates will indirectly burden the consumers since many of the charges like fungible FSI, various fees payable during the approval of plans increase, thereby, increasing cost of project. All these costs will have to be borne by the consumer, thereby, impacting the industry negatively“ he explains.

However, experts like Gulam Zia, executive director -advisory, retail and hospitality, Knight Frank India, are of the opinion that there is nothing wrong in these rates going up. “These rates are directly reflecting the market reality. If the market rates have gone up, that might as well be reflected in RR values. The main question, at present, should be that why should property rates be going up in a city like Mumbai. The rates are increasing because the infrastructure is not developing in the city. The land rates would not have gone up if the government would have invested the money in infrastructure. The biggest culprit is the valuation of the land. Land prices contribute the maximum to the overall price of housing units. If land prices could be brought down by at least 30 per cent in the RR, then considerable relief in housing unit prices could be passed on to homebuyers.In fact, the government shouldn't view it as just a source of revenue but also as a tool to spur growth and spending,“ he concludes.



10 tips for email etiquette

10 tips for email etiquette


The digital age has made communication much easier and more hassle-free, what with several apps available for mobile phone chat. 

However, people often forget that they have to use a different, more formal tone for official email correspondence, and end up peppering their emails with too many emojis and abbreviations. Here are a few tips to keep in mind when you're sending out a work email.

1. INTRODUCTIONS ARE IMPORTANT:Always introduce yourself if you are writing to someone you don't know or haven't corresponded with previously. If you've got the sender's address from a mutual friend, mention that in your email. Introducing yourself is especially important if you're sending out a survey or questionnaire to people whose addresses you have got from a database.

2. ALWAYS RUN A SPELL-CHECK: It's important to run a spell-check for official correspondence, especially if you're sending an email from your phone. You don't want the auto-correct feature to backfire on an official email, after all. Ensure your grammar and punctuation are correct as well.

3. USE THE REPLY-ALL FEATURE SPARINGLY: Only use the reply-all feature for an email that really needs it. If the reply is meant for only one person, just reply to him/her. And don't use it to reply to a sender's greetings for the festive season — you could find yourself being blamed for starting an unnecessary email thread.

4. USE BCC FOR GENERIC MAILS: Use the Bcc field for when you are sending out mails to a very large number of people who may not all know each other. It's also a way to ensure that all your contacts' addresses are not out there for people unknown to them to access.

5. RESTRICT THE NUMBER OF ATTACHMENTS YOU SEND: Send heavy files via file-hosting services so that you don't clog the recipient's inbox. You could also zip files or resize pictures. If you know you're sending an email to someone who accesses his/her inbox on the phone, don't send several attachments with it.

6. DON'T OVER-ABBREVIATE: Don't use too many abbreviations or in your email, like FYI, PFA, PDF or FYR. It may confuse the recipient, who may also get the impression that you don't have the time to type out a proper email. If you must use them, restrict it only to the subject line.

7. FORMATTING FUNDAS: Do not use all caps and bold fonts as this will give the recipient the impression that you are shouting at him/her. The same goes for underlining in the middle of a lot of text. Don't use fancy fonts or multiple font colours either.

8. WATCH YOUR TONE: Always be careful about how your email sounds. It may be an official email, but it should not sound too abrupt. You shouldn't sound over-friendly either, especially if this is the first time you are corresponding with the recipient. Moreover, don't send out an email if you're upset. Save it as a draft and re-read it when you're calmer.

9. FIX YOUR FORWARDS: Make it a point to clean up forwards before you, in turn, forward them to other people. Not only does this make the email look cleaner, but it also ensures that you don't give away anyone else's email addresses.

10. CHECK WHO YOU'RE SENDING AN EMAIL TO: Always check the To field of an unsent email before you send it. You don't want the wrong email being sent to the wrong person.

What every official email should contain

Subject line: This is the first thing that recipients will see in their inboxes and it will determine whether they will read it or not. It should be clear and direct.

Salutation: Always start an email by greeting the recipient by using the word 'dear' followed by his/her name. If you aren't on a first-name basis with the recipient, use a title and a surname.

Concise body: Get straight to the point. If you have more than one issue to address, start with the most important, and list the rest point-by-point.

Sign off: Always sign off on your emails. Phrases like 'Yours sincerely' and 'yours faithfully' are acceptable for formal emails. 'Best regards' or 'kind regards' work in most other situations.