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Mixed response to building rule modifications

July 22nd, 2010

The decision of the State government to modify some of the amendments made to the Kerala Municipal Building Rules, 1999, a few months ago has brought some relief to property developers in Kozhikode.

A few restrictions on constructions of buildings close to roads have been relaxed indicating that builders will revive some of their stalled projects as well as launch new ones in the city. The revisions have been in the access width for high-rise buildings, which normally is more than 15 metres from the ground (or over four floors).

The required access width of roads to multi-storey buildings, both residential and commercial, in the past was only five metres. But it was amended based on number of the units — a building with 25 flats should have a minimum access width of seven metres; 50 flats, nine metres; 75 flats, 12 metres; and 100 units or more, 15 metres.

Now the access width has been reduced on all categories and the total space of the buildings, whether small, medium or industrial, will also be considered.

The parking areas have also been reduced considerably by 15-30 per cent. “The revised rules are quite reasonable enabling the builders to go ahead with projects,” says M.A Mehaboob, secretary, Confederation of Real Estate Developers Associations of India (CREDAI), Kozhikode chapter.

A parking lot for two flats each below 100 sq.m and one for each unit above 100 sq.m is acceptable. Earlier, the rule insisted on having two parking lots, one for guest parking, for any single unit in an apartment.

Another is concerning the digging of ground for construction of basements. The amended rule maintained that a builder should obtain a no-objection certificate (NOC) from the neighbour if the depth is 1.5 metres or more or the measurement exceeds the length from the boundary wall.

Mr. Mehaboob says the rule of getting an NOC for digging purpose has been dropped and instead a committee constituted by the Corporation or civic body will look into complaints, if any.

However, a new provision has been brought in regarding the construction of a dedicated road inside the premises of high-rise apartments for fire tenders. The rule, applicable for commercial and housing buildings, has to be enforced even if a public road exists. Besides at least five metres should be left vacant on all sides of the high-rise buildings.

FAR

The Floor Area Ratio (FAR) has been left unchanged (If the floor area of a house is 2,000 sq.ft and land area is 3,000 sq.ft, FAR is 0.66).

The new rule says that builders can increase the FAR only up to 2.75, after remitting an additional fee. It will be Rs.500 per square metre for FAR between 1.5 and 2, and Rs.1,000 per square metre for between 2 and 2.75. Earlier, FAR for residential buildings was 3, giving property developers a wide option in planning buildings.

The coverage of high-rise apartments has also been considerably reduced.

Only 60 per cent of the land available should be covered by buildings having six to 50 units. Only 55 per cent of the land can be used for building having units between 51 and 100; 50 per cent for buildings having 101 and 200 units. The construction should be restricted to 45 per cent for apartments having 200 units and above.

Builders say that overall the new rules will support the construction industry but only to a limited extent as the amended FAR has been left untouched.

Several new projects in the city and the suburbs have been put on hold following the new rules. “The concept of affordable housing will only remain on paper if the government does not further revise the FAR rules, ” Mr. Mehaboob says.

Already builders are thinking of increasing the rates by Rs.250-500 per square foot from the existing rates. The new rule will increase expenditure for builders.

Even so builders can rejoice as the government has reduced the stamp duty. The effective rate of stamp duty, surcharge and registration fee in Corporation areas is now 11 per cent; in municipality, township and cantonment areas to 10 per cent; and in grama panchayat areas to 9 per cent.

A further reduction in stamp duty has been provided for environment-friendly housing projects.
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Stamp duty cut wins wide applause

March 16th, 2010

Property developers in Kozhikode city are happy about the proposals in the State Budget presented by Finance Minister T.M. Thomas Isaac in the Assembly last week.

One of the major proposals is to reduce the stamp duty and abolish the surcharge on stamp duty. “It is generally felt that stamp duty prevailing in Kerala is on the higher side,” Dr. Isaac said in his speech.

Repeatedly, builders have been demanding a cut in the stamp duty, which was the highest in the country. Now the proposal is to bring the effective rate of stamp duty, surcharge and registration fee in Corporation areas to 11 per cent; in municipality, township and cantonment areas to 10 per cent; and in grama panchayat areas to 9 per cent.

The existing stamp duty in Corporation areas is 13.5 per cent; municipalities, 12.5 per cent; and in the grama panchayat limits, 10 per cent. This apart, a 2 per cent charge is levied for registration.

Builders are also elated over the prospect of bringing down the stamp duty charge on flats and apartments to five per cent. “Surely, this is a radical proposal that will benefit the end-user. Moreover the budgetary proposal will give an impetus to the construction industry,” says Nityanand Kamath, Chairman, Confederation of Real Estate Developers Associations of India (CREDAI), Kozhikode chapter.

Clients who booked apartments and flats in Kozhikode have not registered the units because of the high stamp duty rates prevailing in the State. Many had kept in abeyance the registration even after occupying the flats. The proposal will make them register their property and bring revenue to the State exchequer, he says.

Reduction in stamp duty has been provided for environment-friendly housing projects. Apartment complexes having facilities for harvesting rainwater, energy- saving electrical appliances and solar panels for lighting and water heating will need to pay four per cent stamp duty. A chartered engineer should certify such projects. This concessional rate shall apply only if the transfer takes place within six months from the date of allotment of house number by the civic bodies.

Dr. Isaac said, “I feel that the construction industry, which is being badly affected by recession, needs a helping hand from the government.”

However, realty experts feel that the stamp duty needs to be reduced further in the range of 7-8 per cent to make the rates uniform with other States. Eventually, future governments will be compelled to buy this argument in the wake of the implementation of the fair value of land in the State, Mr. Kamath says.

The budget has already made a proposal that the fair value of land fixed on the basis of 15 categories will come into effect on April 1, 2010. “It was insisted that the fair value of land should not exceed 50 per cent of the market value. There may be some practical difficulties in implementing fair value. In order to resolve such difficulties, District Collectors will examine and redress such anomalies relating to valuation,” Dr. Isaac said.
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Builders see bright prospects for 2010

December 31st, 2009

Next to the information technology industry, it was the housing and real estate sector that was the talking point of 2009.

The long-term players in the field took a wait-and-watch approach, and they believe that it was worth waiting.

The prospects for 2010 look bright, say the builders in unison. As the heady prices of the boom period came down, people heaved a sigh of relief. It was good because a market correction was necessary, says K. Lava, managing director, Skyline SFS.

A fair price range is important for the market, he adds. And the way the market had boomed, the sector had become a playfield for all comers out to make some easy money. Now that the mad rush has died down over the last one year, only the strong players who have solid finances and a record of timely completion of projects continue in the field.

The white-collar workforce in the country looks at a car as the first priority and then comes housing, Mr. Lava says. The automobile industry started picking up by mid-2009, while the housing sector saw good momentum by October this year, he adds.

The Union Finance Minister has said that there has been a good growth during the year, surpassing the estimates. This reflects all-round growth, Mr. Lava says.

The property sector, one of the major contributors to growth, cannot be left behind. This is not a sector people can ignore, says M.D. Jairaj, managing director of Jairaj Builders.

Lessons

Some important lessons that the builders have learnt is the pricing of property. There is definitely more demand for houses with areas between 800 sq ft and 1,500 sq ft that cost between Rs.20 lakh and Rs.35 lakh. Many builders have turned to make more offerings in this category.

There is more movement in smaller size homes, but an all-round demand for all categories of houses was experienced in the latter part of the year, Mr. Jairaj says.

More demand will automatically come through by March when stocks will finish by the end of this financial year, says George E. George, managing director, Infra Housing.

The recession has brought down the prices to an affordable level, perhaps. These prices are likely to continue into the next year. Prices have become steady and the better prospects in store are not likely to raise them, Mr. George says. The recessionary trend has been good in the sense that there is more stability in pricing compared to the boom period when prices had gone up sky-high. The builders see the growth in metropolitan cities such as Delhi and Mumbai as a benchmark for better prospects for the property market in the coming year. They are on the upward track in the two cities and Bangalore has also started reflecting the same momentum. So, the effect on smaller cities such as Kochi is also expected to be on the same track, Mr. George says.

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Posted in Kerala Real Estate, Real Estate

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A closer look at repayment options

December 15th, 2009

Housing loan seekers must analyse whether the special repayment options offered are beneficial. 
For many customers of home loans, the EMIs (equated monthly instalments) remain constant throughout the tenure. For example, if a loan of Rs.20 lakh is taken at nine per cent interest and the tenure fixed is 15 years, then the EMI will be Rs.20,286 throughout the tenure if the interest rate is not altered.

However, these days, banks and home finance companies offer a number of repayment options, which are a bit complex. Here is an effort to analyse them.

SURF

If you are a professional seeking a home loan and having good employment, no bank or home finance companies will like to lose you as a customer.

They will lure you with a higher loan amount by offering a telescopic repayment facility, also called as the step-up repayment facility (SURF), under which the EMIs will be less initially and will gradually increase over fixed intervals.

Let us suppose you are eligible for a loan of Rs.20 lakh under the regular scheme with EMIs of Rs.20,286 for 15 years at nine per cent interest. Under SURF, you will be eligible for Rs.25 lakh for the same tenure and interest, but the EMI will be Rs.18,750 for the first 24 months, Rs.25,357 for the next 60 months and Rs.29,325 for the balance 96 months.

On the face of it, it looks attractive. For a higher loan, the initial EMIs are less. But it is beneficial to the lender and not you, as in the first two years, the lender will be collecting only interest. As a result, the total interest payable over 15 years will be 10 per cent more than in the normal scheme.

For a loan of Rs.25 lakh under the regular scheme, the total interest payable will be Rs.2,064,133 in 15 years, whereas in SURF, the total interest payable will be Rs.2,286,608, an additional interest of Rs.2,22,475. Hence SURF scheme is not advisable.

FLIP

If you are applying for a home loan with your father/mother who is left with less service (or if your service left is less than 15 years and your wife has more service left), in the regular scheme, your loan eligibility will be less as the tenure offered will be restricted to the service left for the elder applicant.

Under these circumstances, the flexible loan instalment plan (FLIP) comes in handy. It works the exact reverse of the SURF scheme. In the initial years (up to the retirement of elder applicant) EMIs will be higher and for the balance period, the EMIs will be much lesser.

For instance, a man is left with five years of service with a salary of Rs.40,000 a month and his wife has 12 years’ service and her salary is Rs.25,000 a month. In the normal scheme, the couple will be eligible for a loan of Rs.12.5 lakh for five years’ tenure, considering 40 per cent of the combined income towards EMI and interest rate of nine per cent. If you opt for FLIP, the eligibility will get enhanced to Rs.16.5 lakh. For the first five years, the EMI will be Rs.26,000 approximately, and for the balance seven years, it will be Rs.10,000.

This scheme is advisable as applicants will get a higher loan amount and end up paying lesser interest compared to regular schemes.

Home saver account

In the regular home loan, you go on paying EMIs comprising interest and principal amount. It is a non-transactional account. In the home saver account, the home loan account is made transactional by connecting it to a current account. It works like an overdraft facility and the borrower can park his surplus savings in the home saver account and can withdraw the surplus as per his needs.

Till the surplus (other than EMI) amount is lying in the account, it will earn same interest as that of loan. Such interest earned is accounted as principal loan amount repaid on a daily product basis. In this scheme, one can save a lot of interest payable on home loan as tenure reduces considerably. The scheme is ideal for business class applicants, who will have a current account for their business deals, which earns no interest and will have a high turnover on daily basis. The scheme can be opted for by high net-worth individuals who can keep surplus funds parked in their home loan account.

Accelerated repayment

Under this scheme, the borrower is allowed to increase his EMIs as and when his income is increased and he can pay lumpsum amounts, which will be apportioned to the principal loan outstanding. In this scheme, the loan gets repaid faster resulting in a lot of savings in interest payment and the long-term debt closes much earlier.

This scheme is good for salaried class borrowers, as whenever they get an increment, or disposable income is increased, they can use it for increasing the EMI amount or use it for part prepayment.

The banks and the home finance companies will try to lure you by offering many special schemes, saying that the scheme is custom-made for you and will try to push you to seek a higher loan amount. This is because there is surplus credit available and fierce competition among banks and home finance companies is making it difficult for the lenders to attract good customers.

Hence, before finalising the option, the customer needs to thoroughly analyse whether the special repayment option offered is really beneficial.
News Published Under:  The Hindu

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Posted in Kerala Real Estate, Real Estate

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Meeting the aspirations of the budget buyer

December 5th, 2009

The recessionary phase has, perhaps, made the builders change strategy and think of offering projects to people on the lookout for budget homes.

For this segment, a rather big one, the priority is owning a house and luxuries such as a swimming pool or a spa are low on the agenda. The builders here had not addressed this need well earlier.

Their target had been mostly the non-resident Indians who had funds to invest in property. But with the recession making this section delay new investments, the builders seem to have found a new market in the budget section.

Late entry

“It is not really true that builders have ignored the budget segment,” says Jayanthan Namboothiri, managing partner of Lotus Properties. The concept of flats has made a late entry into Kerala.

The upper segment of society readily accepted it and the builders were ready to meet the requirements of this section with luxury amenities.

These include anything apart from the basic flat and facilities.

What adds to the cost are facilities such as swimming pool, a Jacuzzi, a jogging track, a private jetty if it is a waterfront project, a health club, a spa and so on.

The budget buyers have looked upon living in flats as a luxury which they cannot afford.

The budget and low-budget flats have made a mark during the recessionary period. A major problem during the boom time has been the skyrocketing prices of land, Mr. Namboothiri says. Many people are interested in buying flats with areas of about 1,000 sq ft and prices in the range of Rs.25-30 lakh. Rajeev Kumar Cheruvara, director, Apple a Day Properties, says that there is a large segment for whom housing is a need and not an investment. The construction sector has failed to address the needs of this segment, he says, as most builders were not offering products that the end-user really needs. In many other industries, the profit margins range from 20-50 per cent, perhaps, but in the construction sector, the boom time has given builders 200-300 per cent margins, he adds.

Corrective measure

The recession is actually a corrective measure so that there are houses available at affordable prices, Mr. Cheruvara says. A good number of families have combined annual incomes ranging between Rs.4 lakh and Rs.6 lakh each.

A sum of Rs.25 lakh is the maximum that they can afford for a house.

Builders should have products with prices ranging from Rs.6 lakh to Rs.1 crore so that it can cater to all segments. There needs to be products that range from the popular to the premium in the housing sector, he adds.

A large number of people in the lower segment of society continue to build houses themselves on small plots of land.

Mr. Cheruvara says that one-bedroom villas at affordable rates will attract that segment.

A person who likes to build a house on three cents of land will be attracted. All these need to be without frills as people in this segment are looking for shelter and not luxury.

Though food, clothing and shelter are the basic needs of man, shelter has become rather speculative, he says. This is because the product is being designed for speculation.

Such affordable housing is usually found a little away from the city, maybe 6 km to 10 km away or even more. But some builders have started offering budget flats even in prime locations.

Anil Gopinath, marketing manager of Galaxy Homes, says, “We have found a good demand for two-bedroom apartments for Rs.10-15 lakh going up to a maximum of Rs.30 lakh. Two-bedroom flats with areas of 600 sq ft each have a good demand if built in the city. The location and price both have to appeal to the customers.”

These flats will have basic facilities and security but will be devoid of luxury amenities. Such housing will be a relief to a large number of people who find it difficult to build a home.

Low awareness

Mr. Namboothiri believes that awareness of living in flats is low in villages. This can be one reason that people feel reticent about approaching the builders.

It is people in urban areas who have picked up flats built in panchayat areas.

A change in attitude is, perhaps, round the corner and the builders catering to the segment believe that the demand in this segment is bound to increase slowly.

Mr. Cheruvara says that if affordable property is built, there will definitely be a buyer.
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Kochi eco-township project evokes interest

November 21st, 2009

Nearly 15 firms have responded to the international competitive tenders floated by the Kerala State Housing Board in August to find a consultant for the technical and commercial evaluation of the eco-township project proposed on its prime land at Marine Drive in Kochi.

The firms have been told to submit expressions of interest, along with the technical and the commercial bids. The project, together with those in Thiruvananthapuaram and other locations, is expected to take the board’s growth into a new direction.

A. Rahmatulla, Chairman of the board, told The Hindu that the valuation of the bids would be completed in about a fortnight’s time. The project would come up on 17.9 acres (one acre = 0.4 hectare) of land under a joint venture or a public-private partnership through a special purpose vehicle.

Feasibility study

The consultant will prepare a techno-commercial feasibility study for the development and the commercial exploitation of the property. The board expects an upfront fee of at least Rs.260 crore and a minimum investment of Rs.1,000 crore.

The consultant is expected to do a market study and a demand assessment, prepare a conceptual design conforming to the rules and regulations, form the special purpose vehicle and select development partners through an international competitive bidding.

Mr. Rahmatulla denied the allegation that the project would harm the environs of the Mangalavanam bird sanctuary, saying the property is further away from the sanctuary than many other high-rise buildings that had come up in its proximity.

The board, he said, has made it amply clear in the call for expression of interest that the developer should consider the ecological aspects of the project as a priority.

The invitation for expression of interest said: “The development shall be with utmost consideration for the ecology of the Mangalavanam Bird Sanctuary.”

The board has said that there are several high-rise buildings, many with more than 10 storeys, in the vicinity of Mangalavanam and objecting to the board’s project alone sounds harsh.

Mr. Rahmatulla said the work on the project would begin only after the mandatory clearances were obtained.

M.K. Prasad, environmentalist and former president of the Kerala Sastra Sahitya Parishad, has said that the project will be detrimental to Mangalavanam, considered the lungs of Kochi.

The combine of trade unions at the board has said that the board is aware of the concerns expressed in the media and the ecological aspects of the project will be considered.

In a press statement, the trade union leaders alleged that vested interests might be behind spreading unfounded concerns over the project.

They drew attention to the board’s services in providing affordable houses to the poor. However, the board had run into financial difficulties for various reasons, such as the recent writing off of the dues. Strengthening of the board was imperative to meet the housing requirements of the economically weaker sections.

With this view, they said, the State government, in the budget for 2009-10, proposed a project on the Marine Drive property and such other lands. Sufficient thought has already gone into the ecological aspects.

The project is among the several envisaged by the board, which is looking to revive its fortunes.

The proposal is for the development of around 100 acres of its land spread across the State. The projects are envisaged to bring in investments of more than Rs.2,000 crore.

The projects include those planned at Kaloor in Kochi, at Akkulam, near Thiruvananthapuram, in Kozhikode and in Thrissur.
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Posted in Cochin Real Estate, Infrastructure Development, Kerala Real Estate

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Scepticism persists in the area of affordable housing

November 21st, 2009

If the global recession forced IT firms to cut down on their expenditure, renegotiate or cancel their deals, reduce employees’ intake and office space as well, it made real estate developers to come out with affordable housing for those in the bottom end of pyramid.

Soon affordable housing became the industry’s buzzword and houses in the price range of over Rs.40 lakh were described as affordable.

But investors started to quiz about those in the Rs.25-40 lakh brackets.

At a recent meeting on “South India real estate – the way ahead” organised by Confederation of Indian Industry, the end-users said that there was hardly any drop in the housing prices and sought the reason from the developers for selling land at abnormally high costs, even though it was procured at cheaper prices.

To this, the developers said that the land resources was limited and the prices were fixed based on the demand-supply factor.

Since there has been a mismatch, the prices were on the rise. But, the end-users were not convinced. As a next step, the developers urged the State government to allocate lands to them at low cost for development.

Vikram Kapur, Member Secretary, Chennai Metropolitan Development Authority (CMDA), said that Government lands were not available for housing in Tamil Nadu, particularly in Chennai.

On the flip side, the CMDA planned to develop large parcels of land by partnering with farmers to avoid legal tussles.

The developed land would be given to public sector for development of housing on a large scale.

Kumar Gera, Chairman, Confederation of Real Estate Developers’ Association of India (CREDAI), attributed the high land cost and taxes as key factors that impacted the development of affordable housing.

Extend boundary

R. Sellamuthu, Additional Chief Secretary and Housing Development Commissioner, Tamil Nadu, said that to avoid people migrating to city and to meet the ever-growing metropolitan needs, it was planned to extent the boundary of the Chennai Metropolitan Area to 1,500 sq.km from the present 1,182 sq.km.

After a decade or so, this boundary line would be extended to 2,000 sq.km.

The boundaries of other cities in the State will be expanded. Besides, total transport mobility will be in place in the next five to six years to offer better, cheaper, safer and quicker transportation.

Immediately, the topic changed to affordable office space. R. Siddarthan, Centre Head – Infrastructure, Tata Consultancy Services, mentioned that the company closed down their facility in Vadapalani and moved people to its premises on Rajiv Gandhi Salai.

It was unthinkable in other times as people would have simply refused to move. “It was a wrong way of long-term planning to meet the infrastructure needs. For the Q2 2010, our net addition to manpower was 1,692 or 1.21 per cent and office space was 76,140 sq.ft or 1.21 per cent. We haven’t thought about 2010 graduates,” he said.

To meet the space requirement, his suggestions were: reduce flexibility, but remain agile; change the way of long-term planning to meet infrastructure demands, look for more options; revisit or re-do the contracts; consolidate space requirements and improve efficiency.

Today building value and rentals are done based on current market conditions rather than the past transactions and there was a likelihood of being overvalued in a downturn. Developers will have to adjust to new market conditions, if they have to survive, the speakers said.

Ramesh Nair, Managing Director, Jones Lang Lasalle Meghraj, said that a study of Singapore market revealed that upward trend lasted for three-four years and downward trend for two to three years.

“Recession had impacted every single market in the world. The worst is over and recovery would start by mid-2010 and it will be stable during 2011 and 2012,” he said.

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Commercial spaces in high demand

November 10th, 2009

The recovery in the realty sector nationwide is leading to an upward trend in urban rental values. For almost a year, the economic slowdown had a negative impact on the growth prospects of commercial spaces.

Today, for instance in Kozhikode, the scene is vibrant with more commercial buildings coming up even on the outskirts of the city. The shortage of commercial spaces has forced builders to set up projects in new areas, such as the mini bypass and the n ew Ramanattukara-Malaparamba bypass. Some have already drawn up plans to establish hotels and business-related ventures on the upcoming stretch from Malaparamba to Vengalam.

Property developers say the Vengalam-Ramanattukara bypass will witness a big growth in terms of commercial and residential projects. The availability of space will give the stretch a boost to real estate business. Besides, the place will be free from traffic chaos.

Builders say that land is not available in the centre of the city for constructing shopping malls. So, they are forced to develop new commercial sites on the bypass. A multitude of projects ranging from star hotels, showrooms and supermarkets are coming up from Thondayad to the Malaparamba junction. This is a strategic location and has good connectivity.

The ‘hi-lite’ group is coming up with ‘hi-lite’ Hills, a commercial and residential project. The ‘hi-lite’ Plaza will have office spaces in two towers with over 10-lakh sq ft of built-up space. The towers, each of eight storeys, will be equipped with all amenities and a corporate ambience suited for all kinds of commercial enterprises. Among the advantages is a peaceful working environment.

It will have 100-plus office spaces with areas starting from 750 sq ft. The first tower will be completed in July 2011. The selling rate is Rs.4,500 a sq ft.

The company hopes that the area will accommodate information technology parks, multi-specialty hospitals and star hotels. One of the reasons for such expectations is that Kozhikode accounts for a large volume of remittances from Non-Resident Indians. Further, the city is known for its strong trading class.

Back to investing

People who have made a fortune in West Asia have forayed into new ventures here. Many have started investing in businesses in new regions. The recession in Dubai and Kuwait has made many invest in shopping complexes here. Business enterprises are not so risky in the State. Moreover, it offers a steady income. Banks are also willing to finance new projects, they say.

The slowdown has forced many multinational companies and retail giants to stop business in the city almost a year ago. But now they are retuning to reinvent their businesses. The businesses run by local companies might have had gone through a rough patch but they have emerged stronger.

Today, the rental rate quoted at shopping malls in the heart of the city ranges from Rs.200 to Rs.300 a sq.ft. This is high even in comparison with the rates prevailing in the market during the real estate boom in 2007.

However, commercial spaces are available at nominal rates in the range of Rs.15 to Rs.50 a sq ft in areas such as Malaparamba, Nadakkavu, Karaparamba and West Hill. The rental rate at prime locations such as Mavoor Road is above Rs.100 a sq.ft. It is also high near Malabar Christian College Road, Arayadathupalam, YMCA Cross Road, Railway Station Link Road, Eranhipalam and Annie Hall Road.

The rates are soft in residential areas such as Chinthavalappu, Chalappuram, Karikkamkulam, Bilathikulam, Mankavu and East Hill. Warehouses are available at cheaper rates in areas adjoining the main junctions on Beach Road or at West Hill.

A year ago, many private banks, financial institutions, insurance companies and telecom players have started looking for commercial spaces away from the din of the city. Most did not want to remit high floor rates. Others wanted locations close to residential areas. Today, they believe their strategy has worked. House owners having plots adjacent to National Highways, especially on Kannur Road (National Highway no.17), try to sell their land to developers or construct office spaces. The trend is seen in other parts of the city as well. They hope that the positive outlook will spur growth and end the shortage of commercial space.
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Township projects back in vogue in Kozhikode

November 5th, 2009

Townships are back in vogue. With the property market recovering, builders are again focussing on this concept in Kozhikode. Many of them offer townships within the city as a unique selling proposition.

The Chennai-based Prime Realty has come up with a villa project in a sprawling locale at Kuttiyilthazham close to the proposed Cyber Park. There will be 26 villas on 2.5 acres of land, near the proposed link road connecting the Ramanattukara-Thondayad bypass and the Meenchanda mini bypass.

“The current market scene has made builders stress new models. Buyers will not simply be tempted to choose a villa or flat with regular features,” says M. Rajeevkumar, director of the project.

Each villa has an area of approximately 2,000 sq ft, bound by a compound wall, on 5.5 cents to 8 cents of land. A tennis court, a children’s park, a playground, a swimming pool, a clubhouse, a multi-gym and a common parking area for visitors will come up on an acre of land. Round-the-clock security will be provided.

“Each villa will be fully furnished. An LCD TV will be provided. Customers can just walk into their dream home,” Mr. Rajeevkumar says.

The priced will be about Rs.50 lakh. There are different modes of payment. Either the land will be registered in the buyer’s name initially or the client will have the option to make payments in instalments during the various stages of the project, Mr. Rajeevkumar says.

“Townships have successfully gained acceptance in major metros. Earlier, housing projects were focussed in areas near hospitals and schools. Now, it is done in a better fashion with modern amenities,” he says.

Flats and villas

The Calicut Landmark Builders has launched a project at Methottuthazham Junction, near Pottammal, close to the proposed Cyber Park.

There will be 40 villas and 200 flats on six acres of land. The flats will be in two towers — one 11-storeyed and the other 17-storeyed.

The luxury villas and apartments will have amenities such as a swimming pool, a modern and well-equipped gymnasium and a walkway, says K. Arunkumar, managing director, Calicut Landmark Builders.

“The timely completion of our earlier township project near Kanndaikkal has given us the confidence to go ahead with the new township,” he says.

Townships help working couples.

“However, our target group belongs to all categories of people, including non-resident Indians and business executives. Owning a dwelling unit in a township is also a good investment,” he says.

The villas are priced at Rs.3,500 a sq ft. Mr. Arunkumar says the units can be customised according to the taste of the buyers. The minimum space is 1,800 sq ft.

Affordable concept

The apartments are based on the idea of affordable homes. These are priced at Rs.1,850 a sq ft. There will be three categories of apartments depending on the areas and the number of bedrooms. A one-bed room flat will have a space of 550 sq ft. The other two types are in the range of 615 sq ft and 940 sq ft, he says.

He says the township project on the Kannadikkal-Paroppadi route with 17 villas and 54 apartments have been a fresh concept in Kozhikode when started in 2006-end. Initially, each villa was priced at Rs.40-45 lakh and flat, Rs.1,300 a sq ft.

The area is in the fringes of the city and close to Silver Hills Public School and Silver Hills Higher Secondary School. Besides, the residents have proximity to major hospitals in the city and connectivity to the Kozhikode-Wayanad Road (National Highway 212) and the Ramanattukara-Thondayad Bypass.

The Kozhikode-based Apollo Build-Tec recently launched a villa project at Ramanattukara. There are 32 villas on 3.5 acres of land. The villas will have areas between 2,000 sq ft and 2,500 sq ft and the launching price is Rs.2,750 a sq ft.

Spring Dale Villas of ‘hi-lite’ Builders at Palazhi is another township project. The villas are priced at Rs.3,500 a sq.ft.

The area of a villa will be 2,200 sq.ft. Thirty-five of the 110 villas have so far been sold, marketing officials say.

News Published Under:  The Hindu

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Posted in Infrastructure Development, Kerala Real Estate

RBI policy a breather for home buyers

November 5th, 2009

The recently announced credit policy of RBI has not made any changes to the interest rates and the home buyers, at least for the time being, could heave a sigh of relief.

But the decision to hike the amount that banks have to keep aside for advances to commercial realty sector from 0.4 per cent to one per cent with a view to build a cushion against likely non-performing assets (NPAs) in the sector could hamper funding to the sector.

However, the developers and other players welcomed the apex bank’s intention behind the move to prevent asset bubbles in the segment.

“I am fully for preventing asset bubbles but the increase in provisioning now sends a negative signal. The commercial real estate sector needs a push–the country needs IT and commercial space and the increase in provisioning could impede bank funding to the sector,” Sunil Mantri, Realty’s Chairman and Managing Director, said.

Mr. Niranjan Hiranandani, a developer, described the RBI action as “an ad hoc measure.” — PTI

News Published Under:  The Hindu

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Posted in India Real Estate, Kerala Real Estate

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