DELHI, HARYANA, BENGAL PLAN TO INSURE LAND TITLE

Delhi, Haryana, West Bengal, AP and Orissa are planning to insure land titles in their respective states. Land title insurance is an indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is meant to protect an owner's or lenders financial interest in real property against loss due to title defects, liens or other matters.

A one-time premium in this regard will be shared by the state governments and the primary lending institutions to provide land title insurance. According to industry analysts, many land deals fall through and many result in disputes due to unclear and defected land titles. Apart from companies, foreign investors are also wary of investing in Indian real estate due to the same reason. Insurance of the land titles will remove one of the major hurdles faced by investors in this sector. The move is expected to give a boost to FDI flow into the sector.

The product will act as a defence if there is a lawsuit attacking the title by providing reimbursement of the insured for the actual monetary loss incurred. It is available in many countries but it is principally a product developed and sold in the United States.

"At present, we do not have title insurance companies in India, but the same technique can be employed by banks and financial institutions and housing finance companies in association with the state governments," an official in the urban development ministry said. According to government officials, the move is set to boost confidence among the realty players and property buyers as the government itself will guarantee the validity of land titles.

According to experts, the land title insurance would only succeed if states take an active initiative in computerization of land records. Many states have started computerizing land titles and also get them audited to avert property disputes and to make property transactions transparent. In fact, there is a provision under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for the states to computerize land records and titles for availing funds under the scheme for infrastructure development. Nonconformity would mean the deferment of central funding to the state. "Many states have started maintaining databases of land records and updating it from time to time," the official said. Land title certification begins at the village level itself.

RLYS TO SEEK BIDS FOR DEVELOPING VACANT LAND

Indian Railways plans to invite bids from real estate developers to set up commercial complexes on its vacant land, as part of efforts to increase revenue. In a written reply to Parliament, minister of state for railways R Velu also said private investment would be sought to modernise 26 major stations. The ministry has set up Rail Land Development Authority for commercial development of vacant railway land for generating revenue. "As per current thinking, railway land is to be given to developers for commercial development through transparent bidding process on long term lease basis for development work without any budgetary resources," he said.

                                                                                    Courtesy: ET dtd.25-04-2008

THE LAND BANK AGAIN, AND THE BENEFICIARY'S SHREE PRECOATED

The counter of Shree Precoated is witnessing sustained investment-based buying by investors. The buzz is that the company is going to register good numbers. Analysts say the company is expected to report a PAT of about Rs 240-250 crore on revenue of Rs 2,000 crore for FY2007-08. The company is looking to develop its 67 acres Kanjuurmarg property, which it had acquired for Rs 42 crore about 30 years ago. The current market value is estimated to be about Rs 4,000 crore. The total cost of the project would be to the tune of Rs 5,000 crore and would generate a revenue of about Rs 1012,000 crore over five years. It is already developing its Bhakti Park project in Mumbai. Analysts expect the company to achieve a total topline of about Rs 3,000 crore with about Rs 500 crore bottomline for FY 2008-09.s This is largely due to low land acquisition cost and low debt. When contacted, company officials refused to comment on the same. The stock closed at Rs 195, down about 4% on Thursday.

                                                                                    Courtesy: ET dtd.25-04-2008

Tidco, DLF Ink MoU for IT Zone

                                                                                                Courtsy: BS April 24, 2008

'SPRINGDALE' EXECPTIONALLY DESIGNED ITALIAN HOMES IN WAGHOLI, PUNE

Chennai the Tamil Nadu Indusstrial Development Corporation (Tidco)and New Delhi-based real estate developer DLF Building  India signed a memorandum of understanding (Mou) in Chennai on Wednesday to develop an IT SEZ at suburban Taramani at a cost of Rs1,500 crore. According to a state government release on Wednesday, the new SEZ will generate employment opportunities for Rs 45,000 people directly, while another 10,000 jobs will be created indirectly. The new SEZ is expected to come up in an area of 45 lakh sq. ft. The first phase of the constructon work on the scond phase (over 20 lakh sq ft) would be completed by 2011, the release said. Tidco officials were unavailable for comment.

                                                                                                Courtsy: BS April 24, 2008

MLD TO INVEST $4.5 B IN RESIDENTIAL PROJECTS

Mahindra Lifespace Developers (MLD), the real estate arm of $4.5-billion Mahindra Group, would invest close to Rs 800 crore in its six upcoming residential projects in Mumbai, Pune, Chennai, Delhi and NCR over the next 2-3 years, reports Pramugdha Mamgain from New Delhi. With the launch of its residential project in Faridabad recently, the company entered the real estate market of North India. The real estate firm is targeting a turnover of Rs 1,000 crore in the next five years against Rs 163 crore in 2006-07. So far, the company has completed projects in Mumbai, Pune and Chennai and is now entering the northern region. "With the launch of Chloris, the residential project in Faridabad, we made our presence in real estate market of the North. We are coming up with a similar project in Delhi spread over 17 acres," said MLD CEO Pawan Malhotra. He added the company is looking at expanding into other areas of the region including Chandigarh and Himachal Pradesh. Asked about funding plans for the projects Mr. Malhotra said, "We would be expanding in a phased manner. Initially, the funding would be primarily through internal accruals. It's only when we go about de-veloping the land further, we may resort to loans and private equity." While work on the Faridabad project has already commenced, construction of the project in Delhi is yet to begin. Work on the two projects coming up in Mumbai and one each in Pune and Chennai are also yet to commence. Currently, MLD has a land bank of 3 million square feet for residential projects

L&T GETS LAND FOR RS 3500 CR MUMBAI PROJECT

The property division of engineering and construction company Larsen & Toubro was on monday given possession of the land for commercial complex of seawoods Darave railway Station at Navi Mumbai the venture with the ity and industrial development corporation of maharshtra cideco, o ver 40 acres is estimated at the 3500 cr is to be develk9oped over thre yesra. This involes developing between foru and ive million saft of commercial space of office complexeds shopping malls star-hotels, multiplexes and service apartments. l&t baged the development rights for rs 1,809 crore in feb this year, outbidding other biggies such as DLF and Indiabulls

LEGAL OPINION SAFEGUARDS FROM DISPUTES

ISSUES THAT A LEGAL OPINION COVERS IN PROPERTY TRANSACTIONS

Getting a legal opinion is important during acquisition of any property. This is an integral part of the property acquisition process. The purchase of property is a complicated process. This is compounded by the fact that each State has its own systems of acquisition and transfer of property. The land records are generally in the local language. Going through the property documents is not easy.

You need to go through a host of documents to trace out the ownership of the property. Although the purchaser can do an initial review of the documents, it is always advisable to have these documents vetted by a legal expert. The legal experts are in a much better position to review and give their opinion on the status of the property. They are generally much more aware of the local laws, and rules and regulations.

A legal opinion should cover the status of the property:

Ø      Who is the owner of the property? 

Ø      What has been the chain of holding and transfer of property over a period of time? 

Ø      Is the property free from encumbrances or has it been already offered as a security for a loan

Ø      Is there any dispute on the ownership of the property whether the transferor or seller has complied with all the requirements to get the ownership of the property

Ø      Whether the transferor or seller is competent to transfer the property

The legal expert may prepare a search report. The search report traces the history of the property - who was the original owners of the property and how it has moved over a period of time before reaching the present seller. Also, it traces out any charges or encumbrances created on the property and their present status—whether the charges have been cleared and the property has been released or if there are some charges pending to be cleared. This search on the title of the property is taken for a period of the past 30 years. It is mandatory for the seller to annex a copy of these reports with an agreement to sell with the intended purchaser of a flat. These documents would state whether the title to the property is clear, marketable and free from encumbrance. In other words, it would state whether or not there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely. In order to avail a housing loan one of the preconditions is that the title of the property should be clear and marketable. 'Clear and marketable' means the seller is genuine and the actual owner of the property. Further, the property should not be under any dispute or litigation. The search report traces this history of the property. The title certificate would state whether the property is unencumbered and has a clear marketable title. This search report and title certificate can be obtained from the advocate who will conduct a survey of the title of the property at the office of the registrar.

PROPERTY DOCUMENTS YOU NEED TO CHECK

Documentation is an essential and complicated part of a property acquisition process. Different states have different requirements. There are many laws that govern the process. However, you should have a checklist of documents to be verified before deciding on purchasing a house. These documents should be scrutinised before giving any advance to the seller. It is always advisable to have these documents vouched by a legal expert.           

Here are some documents you need to have checked:

Purchase of freehold residential plot or house  

The main documents to be verified in such a case are: 

Copy of the sale deed through which the seller got his title to the property Copies of all earlier sale deeds - to verify the chain of past owners of the property  

Registration details of the sale deed Agreement to sell the property Receipts of payments made by the purchaser to the seller Copy of the sale deed for registration purposes  

Purchase of property from original allottee of a government development authority (for example BDA)  

The main documents to be verified in such a case are:  

Allocation letter Allotment letter Possession letter Receipts of payments made to authority  

Purchase of property from power of attorney (POA) holder of original allottee of a government development authority

The main documents to be verified in such a case are:   

Allocation letter from the authority Allotment letter from the authority Possession letter Receipts of payments made to authority Permission to mortgage Authorisation letter signed by the seller Receipts of payments made by purchaser to seller Verification of signature of seller from his bank General power of attorney Special power of attorney Will Agreement to sell the property

Purchase of flat in a group housing society from a original member of the Society

The main documents to be verified in such a case are: 

Share certificate issued by the society Lease deed of society Registration details of the society Bye-laws of the society No objection certificate from the society Approved building plan Title of builder Undertaking from society Allocation letter Allotment letter Possession letter Receipts of payments made to authority Permission to mortgage Authorisation letter signed from seller Receipts of payments made by purchaser to seller Verification of signature of seller from his bank

Purchase of flat in a group housing society from a power of attorney (POA) holder

The main documents to be verified in such a case are:   

Share certificate issued by the society Lease deed of society Registration details of the society Bye-laws of the society NOC from the society Undertaking from society Allocation letter Allotment letter Possession letter Receipts of payments made to authority Permission to mortgage Authorisation letter signed from seller Receipts of payments made by purchaser to seller Verification of signature of seller from his bank General power of attorney Special power of attorney Will Agreement to sell the property.

CITI REALTY ARM TO BUY 10% STAKE IN GOLDEN GATE FOR RS 400 CRORE

Citigroup's real estate arm is set to invest around Rs 400 crore ($100 million) in Bangalore-headquartered Golden Gate Properties for about 10% stake, sources said. The deal is expected to value the tier-II real estate firm at a little over $1 billion. This marks Citigroup's back-to-back deals in the domestic real estate space in the last fortnight. Early last week, the global financial giant unveiled $160 million play in Delhi-based BPTP.

Golden Gate is primarily into residential market with about 20,000 units under development totaling 23 million sq ft across southern cities such as Bangalore, Chennai and Hyderabad. The company also has substantial land holdings extending into emerging centres like Mysore and Mangalore. Besides, Golden Gate is believed to be foraying into SEZ and mixed use development.

In January this year, Deutche Bank investment unit RREEF closed $70 million transaction picking up under 10% stake in the company. The private equity juggernaut is now increasingly open to investing in tier-II or even in start-up realty firms, as the sectoral transparency issues are clearing up to an extent.

Citi's fresh investments are coming in when it was expected that the largest banking group in the US, reeling under $18 billion write-offs due to the subprime crisis, may go slow in ploughing more money into the realty sector in India. Several global banks have booked massive losses as the financial crisis that kicked in with the meltdown in the US housing market gained speed in the last two quarters. However, more realty firms are now opening up to private equity as their fund raising plans in the capital markets have run into trouble. For instance, several firms, including the biggest domestic player DLF, have been eyeing REIT listing on the Singapore Exchange, but are forced to delay the plan in the wake of market turbulence.

GROWTH OF INDUSTRIAL RENT HIGHEST IN MUMBAI

Mumbai has witnessed the world's highest (94.4%) increase in rentals of industrial space in 2007 from Rs 18 per sq ft per month to Rs 35 per sq ft per month ($10.88 per sq ft per annum). With this, the financial capital of the country leaped 11 positions to be 26th most expensive industrial locations in the world, said a global report on industrial space by real estate consultancy firm Cushman and Wakefield.

The rise in rentals of industrial space at Ranjangaon in Pune and IMT Manesar in the National Capital Region is fourth and sixth highest in the world. In Ranjangaon, the rentals went up from Rs 12 per sq ft per month in December 2006 to Rs 18 per sq ft per month in December 2007. In IMT Manesar, the rentals went up by 30% to Rs 13 per sq ft per month from Rs 10 per sq. per month. Rentals in prime area like Delhi's Okhala Industrial Area also went up by 28.57% to Rs 45 per sq ft per month from Rs 35 per sq ft per month ($14 per sq ft per annum).

Rentals in other areas in India have also gone up sharply. According to the report, rentals of industrial space in Hinjewadi in Pune has gone up by 18.75% to Rs 38 per sq ft per month, in Sriperumbudur in Chennai by 18.5% to Rs 32 per sq ft per month.

Within Asia-Pacific, Singapore came at third after Mumbai and IMT Manesar in annual rent growth and was followed by Pune and Chennai in the top five.

Bangalore-Bommasandra area came at sixth, while Bangalore-Jigani saw the ninth biggest rental rise in the region.

London retained its title as the world's most expensive industrial location in the world with total occupancy cost at $28.91 per sq ft per annum followed by Dublin, which jumped two places in the global ranking of occupancy costs to second place and Tokyo at third place. Occupancy cost in Dublin is $ 21.81 per sq ft per annum and in Tokyo $ 19.51 per sq ft per annum.

Okhala Industrial Area, with occupancy cost of $14.50 per sq ft per annum, is costlier than industrial space in Moscow, Frankfurt, Hong Kong and Beijing. The occupancy cost in Beijing is $ 7.31 pr sq. ft per annum

LODHA LAUNCHES LUXURY RESIDENCES

While there is talk of a demand crunch hitting the real estate industry developers still see prospects ahead, men for luxury Projects. Mumbai-based developer Lodha Group has launched luxury residences branded Lodha Marina at Mumbai's harbour zone of Sewri. With close proximity to Worli, Prabhadovi and Lower Parel, easy connectivity to 'Nariman Point, and Bandra-Kurla Complex business districts, Lodha Marina is positioned at the higher and of the market.

UNITY BAGS TWO ORDERS WORTH RS.221

Unity Infra-projects Limited has bugged Live orders worth Rs 221.85 Crore to build a mall-hotel-multiplex project at Pune for Vamona Developers Pvt. Ltd. at an estimated value of Rs 133.89 crure. In Hyderabad, Unity is building five towers with a basement and a podium at Kondapur for Kondapur Tower Pvt Ltd. The contract is worth about Rs 88.26 Crore. 

HIRCO'S CHENNAI PROJECT REPORTS ROBUST REVENUES

Hirco PLC, the investment vehicle of Mumbai-based Hiranandani Developers, has announced that sales of residential units in Phase 1 of its Hiranandoni Palace Gardens township development in Chennai continue to be robust both in terms of volume of units sold and the level of pricing achieved. As of March 31, sales revenues have been received on proximately 15.62.820 square feet at on overage price of RS 3,906 per square foot.

OMAXE INCREASES AD BUDGET TO RS 100 CRORE

Relieving its budget allocation for the financial year 2008-UH Delhi-based realty player Omaxe Ltd. has outlined its new budget amount for the New Year. The developer plans to push up its ad spend to Rs 100 crore from Rs 80 crore. Hath print and electronic media will be covered by the budget, which could be aimed at boosting demand amid a period of correction in the industry and inflationary pressures in the economy

CLERIDGS HOTELS

Cleridges will construct 1500 New Rooms at a cost of Rs.200 crore Group CONDERING TO OPEN HOTELS AT SEVEN PLACES with the entry into foreign markets and planning to expand in few cities of the country, cleridges Hotel Pvt. Ltd. will ad 1500 new rooms in its Hotel by investing Rs 1200 crore within next five years. Cleridges Hotel MD and CEO Peter J.Letgrb told the correspondent here "for investing in property we have a capital of 30 crore dollars. We are planning to open hotels at seven places so that the number of rooms may become from 1000 to 1500.

Letgeb said that for expansion of market, company is considering all types of alternatives. It includes organic and inorganic methods, shares, long term agreement for expansion etc. however, the company is not in favour of giving franchisee. He told that where the company is planning to open hotels in the country includes Hyderabad, Chennai, udaipur, Pune, and Keral. Letgeb said "we are in search of important areas in India and neighboring countries where hotels can be constructed." He said that company is at present talking to the parties of Chennai and udaipur respectively for opening the resort and business hotels. The company is going to open premium business hotel in Pune.

With regard to open hotels abroad, he said that company is planning to open hotels in Maldives and Middle East. In Maldives Company will construct a resort whereas a hotel consisting of 140 rooms will be constructed in Meddle East. On query about hotel place in Arabian countries Letgeb told that hotel can opened around Saudi Arabia and company is also talking to builders for it" cleridges is getting constructed hotels at three places in India which includes New Delhi, NCR and Mussoorie. This Delhi based company is constructing two hotels in Surajkund and Mumbai which will be opend by 2008 and 2010 respectively. The Cleridges Group told that company's income during 2007-2008 has reached Rs.90 crore with a profit of 40%

Sky-high property prices

For two small shops of 6000 square feet each, shopkeepers now pay something between Rs 1.5 and Rs 2 lakh per month. According to the tenants, there has been an increase of 10-15 percent in the property rates here once the Metro line is ready; landlords say property pries will rise further.

“We did not get any rents for about two years. Now that desealing has taken place, it is natural that property prices are going up,” said Vijender Kumar Lohia. But the landlords are also worried about the future.

“What if the shops are sealed again? May be this is a temporary sop in an election year (Delhi Assembly elections are due later this year), “said Lohia.

Some shopkeepers still prefer to pay the increased rents then shifts from MG Road. “I have invested lakhs in furnishing this showroom and if I have to remove all this, my investment would go waste,” said Deepankar Chaudhary, who runs a shop selling carpets.

Many have hiked the prices of good to cover the high rent.

LEHMAN BUYS 40% IN IT PARK

Global investor Lehman Brother has picked       up a 40 per cent stake in the upcoming IT Park project of property developer Peninsula Land (PLL) in Hyderabad. Lehman is expected to hold the remaining 50 crore into the project. PLL is expected to hold the remaining 60 per cent.

The initial cost of the project, including land, is Rs 125 crore and the development cost is nearly Rs 1,400 crore. The company is planning to fund the project through debt and draw more funds from Lehman if required, sources said.

First priority

CITI ARM PLANS $160M BPTP INVESTMENT

Hong Kong-based Citi Property Investment, the real estate investment arm of Citibank, is investing $160 million (Rs 650 crore) in Delhi based realty major BPTP to develop four special economic zones in Noida, Greater Noida, Faridabad and Gurgaon, BPTP sources said.

According to sources, a special purpose vehicle has been formed for the purpose. Citi Property Investment holds 40 per cent in the SPV, while the remaining 60 per cent is with BPTP. However, this is not Citi Property Investment's first investment in BPTP. In 2007, the Citi arm picked up 5.89 per cent in the company for Rs 322.50 crore.

BPTP has been in the news recently for bagging the country's largest land deal worth Rs 5006 crore to develop commercial projects over 94 acres in Noida.

The four InfoTech SEZs developed by BPTP total up to 206 acres. The company plans to develop six million sq ft. of area, out of a total area of 20 million sq ft in the first phase. "The investment by Citi Property Investment shows the tremendous goodwill and investor confidence that the company has earned in the market in such a short time," a BPTP executive said

SYSTEMA TO INVEST UP TO $200 M IN REALITY SECTOR

MOSCOW: Eyeing huge potential in India’s construction and reality market ahead of the 2010 Commonwealth Games, Russian Conglomerate Systema on Tuesday announced plans to develop hotel offices and residential complexes in major cities with an initial investment of $10-200 million. The Russian giant has partnered with Syam Group, which has dievested 51% stake in its telecom enture in faour of Sistema, said Yevgeny Kolodkin, vicepresident (strategy and business development) of Sistema’s construction subsidiary. The Systema- Shyam JV would be developing a 22-acre plot in Gurgaon , on the outskirts of Delhi, he said, adding that the land bank is owned by Shyam Group promoter Rajiv  Mehrotra  and the ratio of investment between the Russian and Indian partner is being negotiated.