Wednesday, 31 July 2013

Tips for buying apartment

The demand for property is rising day-by-day. Buying an apartment from reputed dealer or developer offers you or its residents the convenience of lifestyle facilities like a clubhouse, swimming pool, gymnasium etc. Buying property is the decision of a lifetime and you need to be equipped with the right know how. It’s important to learn of the origin of the property, continuous flow of the title and present status of the property before buying the property. Buying a property for self occupation or investment is perhaps one of the biggest investments made by a person during his lifetime. A landmark decision like purchasing property need a well thought out.

Tips for Buying an Apartment : A lot of care is needed while buying new flat to avoid legal hassles. If proper planning is not done prior to property buying, your property can turn into a nightmare. A well thought out helps you to avoid future problems and buying an apartment that meets your requirement. Following tips helps you to buy an apartment or property.

Define your requirement : This is first and important thing you need to consider for buying an apartment or property. Requirement of home buyers differ from one buyer to another depending on their lifestyle, family size, preference, usage etc. Defining your preference or requirement helps to save time on unyielding and time consuming deals for inappropriate properties. It will also help your real estate agent to come up with the right property faster. You will have to focus on factors like financing, real estate service providers, paperwork involved and other legal and regulatory issues.

Legal aspects of property : Once your requirement is defined and you found right property, check the legal aspect of the property. Be sure that the developer has acquired approvals and No-Objection-Certificate (NOC) from the Municipal Corporation, Area Development Authorities, Electricity Boards, Water Supply & Sewage Boards and concerned authorities. Ensure that the developer has entered into proper development agreements and property has clear titles. Every bank conducts a legal check on your documents to validate their authenticity before sanctioning Home Loan. As a buyer, it gives you confidence that your property has been inspected by experts and your property is legally clear and technically sound.

Property under construction : A home buyer books the property when builder or developer launches new project or property under construction. For a project under construction, you should ask for the allotment letter and development agreement. The development agreement is linked between the builder and the landowner and contains details regarding the terms and conditions on which the landowner has permitted development of his property. In case of constructed properties, you should ensure that the seller has the title and possession of the property as well as the right to transfer the property. Check whether dues such as property tax, society, water and electricity bills, etc. have been paid in full. Make sure to take possession of all relevant documents.

Duties and Taxes : Understanding Government policy and other legalities Stamp duty, Service tax etc will be extremely handy in making an informed choice of property. The stamp duty is usually a percentage of the transaction value levied by the state government, on every registered sale. The final sale deed should be stamped and registered at the appropriate local area office. The service tax will be charged on those payments made on residential projects which are still under construction.
A lot of care is needed from the beginning right from site visits till the registration of flat. Check the distance from facilities like schools, work place, colleges, transport facilities, markets, hospitals, etc. Check on amenities provided in the building and if any additional cost is involved for the use of these amenities. If the building is under construction, confirm tentative time for completion and enforce suitable penalty in case of delay. Visit the developer’s earlier projects to check out the quality of the construction, landscaping, and other amenities.

Before buying property, it is advisable to appoint a solicitor to inspect the original title documents of the property being purchased. It is advisable not to secure any property in a hurry and without subjecting all the property documents to rigorous legal scrutiny.
Find out any minor claims, court litigations, government acquisition proceeding, zonal regulations and other subsisting charges on the property. You should approach  a financial institution in order to check if they would provide a loan for that particular property. Planning will help you be out of the panic mode and keeps you on your toes for unplanned emergencies. Do your homework well before buying apartment or signing any agreement to buy the property.

Saturday, 20 July 2013

Serviced apartments catching up

With no or limited entry barriers, several individuals, with some cash on hand, too joined the serviced apartment bandwagon, which was once considered to be a poorer cousin of large hotels.

The concept of serviced apartments, where guest stay for a longer period against regular hotels, has been around in India for close to a decade. With the ushering in of economic reforms resulting in large scale FDI into manufacturing sector in the mid-to-late 90s, as well as the subsequent IT boom spawned this concept as a new age business opportunity.

With no or limited entry barriers, several individuals, with some cash on hand, too joined the serviced apartment bandwagon, which was once considered to be a poorer cousin of large hotels. Taking a few apartments on lease and fitting and furnishing them was all one needed to foray into this emerging business segment.

As the flow of FDI increased and a wider base of MNCs entered India, they started demanding still better facilities and amenities on par with star-rated hotels. While smaller players found it difficult to cope with increased demands, this also led to the entry of global serviced apartment chains that normally manage such facilities.

“In India, the serviced residence industry is still in its nascent stages. There is a limited supply of international standard serviced residences. However, demand for serviced residences is expected to grow as FDI into India is increasing and the IT, auto and manufacturing industries continue to grow,” said Ajit Kaushik, area general manager – India, Ascott International Management.

The company claims to have pioneered the international-class serviced residence concept more than 28 years ago when it opened its first property in Singapore in 1984. Today, it has more than 30,000 apartment units across over 70 cities in 21 countries. In India, it has already opened its two properties with a total of 283 units in – Somerset Greenways Chennai (187 units) and Citadines Richmond Bangalore (96 units). Ascott has five other serviced residences with more than 1,100 apartment units under development in the country.

“Often, the executive traffic of many MNC and domestic companies is too erratic to justify a stand-alone company guesthouse. Also, the needs of such business occupants are very different from those of the usual hotel occupants. Service apartments, which invariably offer a suitable four-star service and facilitation level, are the natural choice,” says Sudeep Jain, executive vice-president – Jones Lang Lasalle Hotels (India).

According to him, serviced apartments offer business travellers fully-equipped kitchens with self-catering facilities and various bedroom choices, and are far more cost-effective than hotels in the vicinity of workplace hubs “Today, it works very well in the metros and larger tier-II cities, where starred hotels are notoriously overpriced and are the emerging trend in the corporate hospitality sector,” says Jain.

But T Raghunandana, managing director of Chennai-based Updater Services (UDS), the country’s one of the largest fully integrated facility management player, has a different view. “The concept of serviced apartments, as it existed in the past, has died because the players changed it to the hotel model. With large hotels themselves offering hefty discounts on their room rates, the scenario became much more hostile to independent players,” he pointed out.

According to him, over three to four years, the market was very good and the demand too was at its peak. “With hardly any entry barriers, anyone with about Rs 25 lakh could enter the serviced apartment business by taking a few apartments on lease and furnishing them. While this led to a glut in the market, the subsequent global recession only added to the trouble,” Raghunandana says.

Earlier, in a city like Chennai, the IT/ITeS companies entered into long term deals with service providers, who had to “make up the place as per the company’s specifications”. Sub­sequently, the companies only insisted on the specifications, but did not guarantee occupation and adopted “pay when used” model. “Already, the large companies had their own premises. And serviced apartment operators had to depend only on smaller companies. With them adopting the ‘pay when used’ model, there was yawning gap in the revenue flow and soon several independent operators either folded or moved out of business,” he said.

In the case of Kolkata, it is a different story, where the concept of serviced apartments started picking up three to four years ago and a number of leading realty players decided to join the bandwagon. Buoyant over the prospects of Rajarhat, the new happening destination in the eastern fringes of Kolkata, quite close to the international airport, many developers came up with service apartment projects in and around that area. And more so with a large number hotels, banks, IT offices, convention centres fast beginning to come up there.

Sureka Group decided to put up a full-scale service apartment project at Rajarhat. Bengal Peerless Housing Development Company decided to keep part of their upcoming projects in the new township reserved, which would eventually be converted into service apartments, mostly for the employees of the IT companies. Neither Rajarhat came up the way it had originally been envisaged, nor was the response to these service apartments so encouraging, that developers will replicate the model.

“With the passage of time one needs to innovate and move up on the value chain. Service apartments se­ems to be passé, studio apartment is in. Studio apartment is more than a service apartment and you can actually own it,” says Sanjay Jain, joint managing director, Siddha Group, that is developing “country’s first ‘New York-style one-room multi-facility studio apartments, called Xanadu”.

While the first movers in the segment may not have come with their second such project, Siddha Group is still bullish. “We aspire to take this novel concept beyond Bengal to the rest of India” Jain, said. Competition and a slowing economy seem to mock at serviced apartment providers in Pune too. “Just like the real estate business, service apartment business is cyclical in nature with the singular advantage of it being used for long stay between two weeks to six months in the city,” Hemant Naiknavare, director at Pune-based Naiknavare Developers. The company runs “Seasons”, a 50-service apartment property at posh Aundh area, close to bustling Hinjewadi IT Park and the Express Highway to Mumbai.

But the developer has put on sale its 27 one-two BHK service apartments and suites in Koregoan Park area, close to the airport as well as the railway station, due to lack of business. “With high competition specific to this locality, there’s no decent business and hence, we have decided to disband service apartments and sell them,” Naiknavare said.

Another builder Mon Vert Associates, who is completing construction of its 87 one BHK units to be launched as service apartments in December this year, said builders in the last two years were cautious to the concept of service apartments due to the sluggish market. “It all depends on location in the city and the brand operator, who will manage the property,” Jayant Kaneria, managing director at Mon Vert Associates. Since his property would be managed and operated by Starlit, a national brand, the company is not worried about lack of business.

On the other, the focus in Hyderabad is on offering high-end service apartments. For instance, luxury hotel, Park Hyatt, which started operations recently in Hyderabad, has 42 service apartments. According to Olesya Ostapenko Majid, director (rooms), the service apartment segment in Hyderabad has a lot of potential. What the city has seen so far is the initial concept. In days to come, the focus will be on offerings.

Hyatt has service apartments in three sizes 1BHK, 2BHK and 3BHK to suit guests coming solo or with families, with monthly rentals ranging from Rs 2,50,000 to Rs 4,50,000. The guests coming here have a varying stay at the service apartments- from one month to sometimes extending to a year, she said, adding that guests with longer stay will be able to get better prices.

They could prefer to use the restaurants, spa and other facilities of the hotel. They can also request a personal chef to suit their tastes even as they can buy the required groceries, which will be priced in the same way like in a super market, she said.

Before commissioning the service apartments at Hyatt in Hyderabad, her team conducted a survey to assess the market situation. “The prevalent understanding of service apartment was limited to provision of breakfast and housekeeping. What we offer is all five-star hotel standards,” she said adding that Hyatt offers a private parking to the guests.

According to Pochendar S, CEO, Lanco Hills, the mixed development project coming up in over 100 acre in Hyderabad, too has drawn up plans for 120 luxury service apartments in the project. This will be adjacent to the hotel coming up in the premises. He said the company has been studying the market conditions and for now is going slow with the serviced apartment projects. “The service apartments we are planning will be for the niche segment. They will spell luxury,” he said adding that service apartment segment has seen good growth in Hyderabad mainly due to the IT sector. However, there needs a further development of the IT segment that will fuel the demand for luxury serviced apartments.

On the whole, the serviced apartment concept, which is just about a decade old in the country, is still evolving. The potential is there. But, the players may have to tread a long path before they can have a sense of accomplishment.

Wednesday, 17 July 2013

Eight new residential clusters around Bangalore

 Eight new residential and industrial clusters will come up in and around Bangalore to Decongest the city and the Rs 2100 crore project will be taken up by the State Government with financial assistance from the Asian Development Bank 

The townships will be linked by rail and road and is expected to be completed in a few years although the preliminary discussions with the ADB are just underway, of the Rs 2100 crore required, the ADB is expected to provide Rs 1400 crores.

The clusters will include the industrial areas preseintly in their vicinity. The eight clusters are Ramanagaram – Channapatna, Kanakapura – Nelamangala, Dobbespet – Peenya, Doddaballapur, Anekal – Jigani – Attibele, Devanahalli – Vijaypura, Magadi and Hoskote - Krishanarajapuram

The Karnataka Urban Infrastructure and Finance Corporation and the Bangalore Metropolitan Region Development Authority have conducted a study on the clusters based on the population ( as per 2011 census ) in the outlying areas of Bangalore. While the present population is 1.01 crore, it is expected to be around 1.80 crores in 2030 and consequently will be the demand for housing.

The cabinet also approved upgradation of the existing highway between Hubli – Dharwad to a six-lane experessway at a cost of Rs 82 crores and the project is scheduled to be completed by January 2015. The public-private partnership project is part of the Bust Rapid Transit System between the two cities.

Sunday, 14 July 2013

India realty space to see $4—5 bn foreign inflows in 2 yrs

India’s realty sector is set for robust inflows of USD 4—5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourites, global real estate consultancy giant Jones Lang LaSalle has said in Devos.

“The early foreign investors in India, who came in around 2006—07, did not have very good experience, partly because of their inexperience in doing business in India and partly because of global financial crisis,” JLL Asia Pacific CEO Alastair Hughes said here.

“However, foreign investors are now looking with a renewed interest at India, given its still robust economic growth rate as that bodes well for good returns to their investments,” Hughes said.

Hughes, who was here to participate in the World Economic Forum Annual Meeting, said foreign fund inflows were expected to pick up in the Indian realty sector going forward.

He added: “They (investors) are now looking much more closely at India to put in their funds into Indian real estate sector. They had come in between 2006—2007 and first half of 2008, but they completely went away in 2009 and have been mostly away since then.

“The overseas investors are now looking to come back and what they are looking for right now is good partners in India, because it is a difficult place to do real estate business because of various reasons.”

Right now, many Indian developers and fund managers are seeking to get international money and that is much more likely to come in, Hughes said, adding that there is more international money today waiting to be invested in India than any of the last five years.

Overseas investors have invested USD 14 billion into the Indian real estate sector over the period from 2006 to 2012.

In the last two years, foreign investment into Indian real estate has been around USD 1.2 billion per annum.

Around half of all transactions were invested in residential property, a quarter in the offices sector and the remaining quarter was split among the other sectors. 

Regionally, half these investment come from US with rest coming from the Middle East, Singapore, the UK, Hong Kong and Germany, Hughes said.

Terming the next two years as much more promising, Hughes said that 2013 and 2014 will have a total of USD 4—5 billion come into the sector, mainly to buy income yielding SEZ assets at a capitalisation rate of 10.75 per cent.

“We expect interest from global and US investors to maintain. Favourite location foreigners will be Bangalore, New Delhi and Mumbai,” he added. (Source PTI).