Real estate Sector

Bangalore National Highway 7 is now witnessing real estate boom with the proposal of Hyderabad Metropolitan Development Authority. HMDA, which is going to oversee planned growth in outskirts will formally come into being in a couple of weeks.It will replace the existing Huda. HMDA will cover an area of 6,856 sq. km spread over five districts such as Hyderabad, Ranga Reddy, Mahabubnagar, Medak and Nalgonda on the lines of National Capital Region of Delhi. Realtors are expecting huge construction activity in and around Kottur and Shadnagar of Mahabubnagar district in the next two years as state government is very keen on developing this area to de-congest the core the city.Realtors say Bengaluru NH-7 is the right place for investment with the proposal of textile park, apparel park, aero hub, star hotels, IT parks and industrial estates.

Connectivity to ORR project is an added advantage for this route. Suchirindia, Jaimata Di Villas Private Limited, JSR Real Estates, Vintage Avenue Private Limited, Hema Estates and several other Hyderabad real estate companies have already taken up various projects, anticipating future growth in the route. Suchirindia chief executive officer Lion Dr Y. Kiron says, "There is overwhelming response to our projects like TimberLeaf gated community in which 125 villas are being constructed near international airport. We feel Bangalore Highway is the future destination for real estate companies." Jaimata Di Villas executive director Mr Murali Retineni says: "After careful assessment, we have chosen Bangalore highway route for the construction of integrated townships in Shadnagar-Kottur area," he added.

Some real estate firms are keen on developing layouts after obtaining permissions from Huda and DTCP. According to realtors, per sq. yard is ranging from Rs 2,000 to Rs 10,000 in majority of the ventures. JSR Real Estates India Private Limited MD Mr Narayana Jadappalli says: "As per our assessment, the buyers of the plots will get good returns in just two years." "We fixed Rs 3,800 per sq. yard to benefit the investors of middle class sections also," he added. JSR Real Estates has developed ventures like Sri Sai Haritha Residencia and Sri Sai Lakshmi Residencia near Shamshabad airport. Hema Estates MD Mr J. Kishore says, "We have developed Dhathrri Township near Kottur JP Darga since it has better connectivity. Four lane road will always stimulate economic activity and provide employment to lakhs of people."Vintage Avenue Private Limited chairman and MD N.Venkateswara Rao anticipates, "Shamshabad, Shadnagar, Kottur and surrounding areas will be developed as another city very shortly as several new projects are being planned by both government and private companies." We started several ventures like Vintage Classic, Vintage Flora and Vintage Olympia in Bengaluru Highway after studying the development plans of the government," he added. Even realty majors like DLF has also acquired more than 500 acres of land in Bengaluru Highway.

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Cabinet approval for elevated metro project for the capital has cleared the way for the formation of a separate concessionaire company. It will have two directors from Hyderabad Metro Rail Limited (HMR) and the rest from the Maytas-led consortium including a new Managing Director.While HMR will closely supervise the overall work and functioning, the new company to be formed in about a month's time will construct and run the metro rail. The consortium has to register three names for the new entity with the Registrar of Companies and one will be chosen, informed HMR Managing Director N.V.S. Reddy on Monday.

Ownership rights

He was categorical that the ownership rights will continue to remain with the Government by virtue of having one ‘Golden Share' which will give veto powers on key issues and is equal to 26 per cent equity holding. The Government has already decided to have an equity participation of 11 per cent or Rs. 250 crore in the new company. The new company will have the right to lease the land or develop properties built over the three depots and over the parking/circulation areas of about 33 of the 66 stations for the concession period of 35 years. It cannot sell any of the land. At the end of the period, all the developed properties along with other metro rail assets would be handed over to the Government, he clarified.

Work on three corridors of 71.16 km will be taken up under the Design, Build, Finance, Operate and Transfer (DBFOT) basis and the technical specifications, performance criteria and safety standards are as per the Draft Concession Agreement, said Mr. Reddy.Construction and operation of the system will be supervised by an independent engineer to be selected through a global tender. The Maytas-led consortium was the lowest bidder for the Rs. 12,000-odd crore project as they did not seek any Government grant which was on offer to the tune of Rs. 4,800 crore and instead offered to make payments of Rs. 30,311 crore spread over the concession period.

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Research and Markets has announced the addition of the "Residential Real Estate in Hyderabad" report to their offering.

Introduction

The Indian economy has registered growth of 8.7% for FY08 and is expected to grow at the same level in next decade. Hyderabad contributes 15% to the State's GDP and 78% of its revenue is generated through services sector. Services include IT, hospitality and tourism, public and private transportation and banking and financial services.

Key Highlights of Report

-Younger population with higher income improves the affordability of property
- Greater connectivity to major destinations
- Efficient infrastructure in place
- Real Estate flourishes in all corners in Hyderabad
- Hyderabad offers value for investments
- Invest in gated community of 5 acres with long term investment horizon

Reasons to Buy

- Spot Investment opportunities
- Understand the factors which influence investments in real estate
- Reveals major competitors and their strategies
- Assess the various segments in Hyderabad Real estate market
- Analyses the factors influenced in making Hyderabad as fastest growing IT destination
The report covers the current status of Gross State Domestic Product and projected GSDP. It also talks about city economic information containing the contribution of the city in GSDP, prominent businesses and industries in the city, professional, educational institutes and expected employment levels, and affordability of residents of the city in terms of purchasing new assets. The report also states the infrastructure of the city and development of the same. The report analyses zone-wise development and growth prospects of the same. The report analyses the competitive scenario of Hyderabad to other growing cities both in commercial and residential space. It also talks about the regulatory requirement for investment in the Hyderabad residential real estate. At the end it talks about major players (builders) in the Hyderabad residential real estate industry.

Targeted Audience

Analysts, Consultants, Real estate companies, Infrastructure companies, Banks and financial, institutions, Investors, Students

Key Topics Covered:

1 Gross State Domestic Product Of Andhra Pradesh
2 Hyderabad - The Fastest Growing IT Destination.
3 Hyderabad Real Estate Market
4 Major Competitors Of Hyderabad
5 Major Players
6 Conclusions and Recommendations
7 References

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The development of townships will be taken up only by private infrastructure companies and foreign firms across the state, especially around the twin cities. The municipal administration and urban development is working on a policy for townships named ‘The Andhra Pradesh Rules for Promotion and Development of Integrated Townships in Private Sector, 2008'. The townships will be promoted on the lines of special economic zones with the private initiatives and foreign investments. The Hyderabad Urban Development Authority (Huda) has already proposed 22 satellite townships along the Outer Ring Road (ORR). Of the 22, two townships at Tellapur and Sri Nagar along the ORR are being taken up by private developers. Initially, Huda proposed to develop satellite townships along the Outer Ring Road. But in the wake of crititicism over land acquisition by Huda, the municipal administration has decided to promote townships under the public private partnership (PPP) only.

The townships policy will usher in a systematic development rather than haphazard growth around the cities, an official said. The Centre announced its policy on townships in 2004, allowing 100 per cent foreign direct investment (FDI) in the real estate sector. "We are studying the townships policies in the states of Uttar Pradesh, Gujarat and Maharastra. A workshop will be conducted to take the opinions of experts and the states which are implementing the policy," the official said. The township rules will be applicable to all urban development authorities, municipal corporations, municipalities and their surrounding gram panchayats areas. The existing rules, regulations of local authorities and urban development authorities are not applicable in the townships.

The townships will be broadly divided into three categories. One category will be minimum 100 acres which will be allowed in Huda area, Visakhapatnam and other urban development authorities. In the second category the minimum area will be 75 acres. These will come up in Tirupathi, Warangal, special development authority areas. Townships with minimum 50 acres will be allowed in municipalities and surrounding areas. The township should be integration of residential, commercial, educational, amenity spaces, health facilities, places for parks, playgrounds and public utilities. "Our plan is to encourage townships the combination of which will be workplace, residential and entertainment. The area could be IT or bio-technology or anything," a senior official of the municipal administration said.

The developer has to provide infrastructure facilities like roads, water supply, drainage, garbage disposal, power, open spaces and other conditions which are mandatory as per the environmental rules. The draft will also list exemptions to be given by the government like waiver of 50 per cent of conversion charges, non-agriculture charges, development charges reduction and property tax. The municipal administration and urban development department made similar attempts to bring about a special policy for townships in 2006. It took the opinions from the then Municipal Corporation of Hyderabad, Huda, director of town and country planning (DTCP) and other town planning experts but could not go ahead as the officials were dealing with preparation of new building rules 2006.

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The building penalisation scheme, which was introduced six months ago will come to an end on Tuesday. The Greater Hyderabad Municipal Corporation has made elaborate arrangements to cope with the rush at all circles on the last day. It expects to generate more than Rs 800 crore with the scheme as over one lakh owners have already applied for the regularisation of their houses and flats in Hyderabad.

The corporation on Monday defended its move to serve notices to applicants of the old building regularisation scheme. Owners who regularised their houses in the 1998 under Building Regularisation Scheme were also asked to apply for BPS. This created an uproar among the owners, as they were being asked to pay twice.

"It might have happened in one or two cases. But it should not be blown out of its proportion. The errors are common when a big scheme is being implemented in the interest of the public," said Mr K. Dhanunjaya Reddy, additional commissioner (project and planning). Officials indicated that the scheme would not be extended further since the ample time had been given for the submission of applications under BPS.

They felt that further extension of the scheme will lead to more unauthorised constructions in the Hyderabad. The GHMC had already taken steps for the demolition of illegal structures which have come up recently. It said that it was up to builders to prove that they had constructed the flats before the BPS was introduced.

In a bid to ensure better compliance, the government has relaxed rules for the submission of applications under the scheme. Applicants can pay only 10 per cent of the fee upfront. They can pay the remaining amount within six months.

Applicants need not worry about submitting documents at the time of application. The government has given permission to submit the documents in in due course.  The government relaxed the rules ahead of determining July 15 as the final deadline for BPS.The civic body has already issued a list of phone numbers of officials to be contacted in case applicants face problems with the BPs. Municipal administration officials have also advised the heads of government institutions to apply for regularisation of government buildings. Government organisations should take initiative to apply. They are not insisting that they pay penalisation fee, GHMC officials said.

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The Income-Tax Department here has unearthed tax evasion to the tune of Rs 110.70 crore, besides seizing incriminating documents, during a nationwide search operation conducted on the offices and establishments of a real estate group.

The raids were conducted recently across Mumbai, Hyderabad, Banaglore, Nagpur and Pune, a Directorate General of Income Tax (Investigation) release said here on Tuesday.

The search was conducted on July 9 and 10. "The search revealed that the Group had not filed returns of income for 2006-07 and no tax was paid, though substantial income had been earned as per the documents seized," the release said.

The Group had also not paid advance tax on the income earned during the financial year 2007-08, it said, adding "the evidence relating to undisclosed income, non-filing of income return and bogus share losses have been seized."

On basis of the documents seized, the Group (whose identity was not revealed), disclosed an income of Rs 110.70 crore for two years, it said."The Group was also found to be indulging in manipulation in share transactions and booking of bogus losses," the release said.

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The government has finally opened the gates for "planned and regulated" development along the 162-km Outer Ring Road by announcing a comprehensive master plan (CMP) for the corridor. The notification was issued by the urban development department here on Wednesday.

The CMP covers a one-km belt on either side of the corridor with a set of special development regulations that are intended to "promote planned growth and curb haphazard and ribbon development." The CMP is expected to give fresh impetus to economic activities along the stretch, one-of-its-kind in the country. The government cleared the plan after two years.The government is planning to announce special incentives to encourage major projects that would cater to a larger population and also provide better infrastructure, sources in the MAUD said. Special incentives will be offered to large integrated townships and educational institutions that come up on an area of up to 400 acres.

A special committee will soon be constituted to look into the development issues related to the corridor. A special unit is also being created for dealing with applications for permission to develop and undertake building construction in the corridor, the sources added. "We are working on a separate policy on the planning standards and public-private partnership models along the corridor," sources said. The government feels the CMP would boost development along the corridor besides encouraging construction activities. "All the hype near the corridor has so far only been speculative. But with the ring road work in full steam, the entire stretch will become a popular destination for investment," a senior official added.

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