CREDAI is committed to give back to society: Sandeep Mehta

We are in constant touch with the concerned authorities and working for a fast and efficient approval system, saysSandeep Mehta, newly elected President of Confederation of Real Estate Developers’ Association of India (CREDAI), Chennai. 

What are the issues you are going to focus as newly elected CREDAI, Chennai President?

As you are aware, today developers are going through a major challenge in getting approvals. My first and foremost priority would be to work with the authorities, like CMDA, DTCP, and see how best we can bring down the approval cycle to the minimum possible time. Approvals are taking six months or even one year, and the ultimate sufferers are the end users.  After all, developers are playing a role of middleman, wherein they accumulate various components like land, contractors, building materials to produce the finished product. As a project gets delayed, the cost of interest comes on it. This cost will finally pass on to the customers.

What about Corporate Social Responsibility of CREDAI?

CREDAI will be focused in this area largely in the coming days. We are in the process of meeting various government authorities. We are committed to give back to society in terms of, at least to start with, in civic areas. We will be approaching corporations and local bodies. As a developers’ community, we have  expertise in building parks, maintain them, building payments, making good bus shelters, and also engage leading architects to give basic common amenities for people. We are quite focused to take up this initiative and confident that the government would give us enough opportunities to work hand-in-hand, so that we can reach out to people in a big way.

Read full interview here...will be posting the video soon... check out!

http://property.sulekha.com/need-for-a-policy-change-in-affordable-housing_news-1415

Auto marketing helped us achieve success in real estate

The basic learning from the fiercely competitive Auto dealership trade made us to keep customers’ interest first and that has helped to achieve reasonable success in the Real Estate business, says Ajit Kumar Chordia,Managing Director of Olympia Group and Khivraj Estates, vice-chairman – Indian Green Building Council (IGBC) – Chennai and vice-president of CREDAI Chennai. 

Excerpts from an interview with KR Iyer.

Ajit Kumar Chordia

Your journey so far – From automobile business to a highly reputed multiple-business house in Chennai?

Like any other journey, my journey also had ups and downs. A large part of my business career has been spent in automobile business and when came an opportunity to expand I was fortunate to move into property development.  The basic learning from the fiercely competitive auto dealership trade made us to keep customers’ interest first and that has helped to achieve reasonable success in the real estate business.

Even today, we draw inspiration from the Auto marketing and try to use our learning in Real Estate.

Read Full  Article here.

Building eco-friendly homes with plastics

He is a man with difference. When the whole world is up against usage of plastics, he has different philosophy for using plastics. He says plastics can be useful to man if one puts his mind into it. He has developed a concept to use plastic pet bottles as brick to build houses. Waste management is his PET subject. Converting waste items into eco-friendly products is his favourite hobby. 

Meet the founder Chairman Dr. Patrick Sanfranceso of Non Profit Organization Samarpan Foundation who has launched their first pilot project in Chennai where the foundation is constructing a vocational training centre in Red Hills using plastic PET bottles. Excerpts…

Tell us about Samarpan Foundation?

Samarpan foundation was founded in 2006 in Delhi with a sole agenda that ‘whenever there is a need, we should attend to it’.  We started off doing social activities like slum development and child care and later started our own home for needy children. We now have our presence in Kolkata, Chandigarh, Chennai and Bangalore. Over the years, we have diversified our activities to areas involving socio-economic and environmental protection.

Read Full Article here.

Chennai real estate: Growth unabated

Chennai’s residential real estate is largely driven by end-users. This has made the southern metropolis one of the stable markets across cities in India even during the worst economic crisis in the past. Unlike Mumbai and NCR regions, the price upheaval is not wide-spread in Chennai but limited to only a few pockets within the CBT.

Known for their conservative mind-set, which has its impact on the residential property market trends, people buy properties in and around Chennai either for investment or residential purpose.  For instance, home buyers in Chennai generally used to give importance to location to any other considerations like infrastructure and amenities, and this had put limits on the demand and possibility for community living in the city.

“The growth in Chennai’s residential market can be attributed to the fact that it is primarily an end-user driven. Investor participation is long term in nature, thereby mitigating a speculative market scenario which is prevalent in Mumbai and NCR,” says Suresh Krishn, Secretary, Confederation of Real Estate Developers’ Association of India (CREDAI), Chennai.

Read full interview here.

Indian Real Estate: Uncertainty haunts developers

Amidst a global economic slowdown as a consequence of the US fiscal cliff and Eurozone debt crisis, India’s growth forecasts too have been revised downward over the last three quarters of the year. Even in 2013, it is unlikely that we will see a spurt in growth given the existing inflationary pressures and large fiscal deficit which could adversely impact the scope for policy stimulus in the country. Specifically in the real estate sector, despite the opportunities, the prevailing global and local market conditions have affected investor sentiment, experts feel.

Given the overall economic climate, coupled with the increased incidence of property prices, high interest rates and low sales, along with dismal corporate earnings growth, weak employment scenario in the sector and fluctuating rupee value are keeping investors at bay. Additionally, India hasn't really delivered since 2005 on the promise that it held as an investment destination. With exits difficult and returns less than half of those initially promised, international investors seem to be staying clear of property markets in the country.

According to Sachin Sandhir, Managing Director, RICS South Asia, “Across micro-markets, investor sentiment has been impacted due to inflationary pressures and rising interest rates through the course of 2012, which have only come down marginally with a few policy revisions by the apex bank in the second half of the year. Slower GDP growth rate projections; shortage to the tune of 85% in real estate and construction professionals available today, as highlighted by a recent RICS research and high debt burden of real estate developers have also impacted investor confidence in the residential sector.”

Read full article here

CREDAI Wants To Make Housing Affordable To All

Making self-sustainable buildings is not a marketing gimmick, but to give good quality of life to the residents. Though cost of these buildings is slightly more and can be recovered fully, these buildings are Eco-friendly and have hordes of features for comfort living, says Suresh Krishn, Secretary, Confederation of Real Estate Developers' Association of India (CREDAI) Chennai and Managing Director of Isha Homes.  

Excerpts…

What are the major areas CREDAI Chennai is presently working with the government?

One of the important areas we are working closely with the authorities is streamlining planning approval process. The authorities also understand our problems and working ways to speed up the approvals.  Now the planning approval process has been split into two sections – Site approval and Plan approval- to reduce the overall time taken to complete a project. In the earlier case, we have to make an entire plan and then approach CMDA for approvals. Now, the moment we buy a land we can go for site approval first and keep the site ready for construction. When architects finish the sketches, builders can seek plan approval.  This saves time. The government is now aggressively working on introducing computerized plan submission process, which will be introduced in a month. If that is in place, we can upload the drawings online directly through CMDA website and get the approval quickly. We are also working with the government to increase the FSI part for LIG and MIG projects. CREDAI wants to make housing affordable for buyers.

CREDAI has been advocating for transparency. But when it comes to giving guarantee in writing for the buildings against structural and material defects, builders generally get cold feet. Do you think giving guarantee to buildings is a viable option?

Asfor as CREDAI members, we always encourage them to include a clause called ‘defect liability’ which gives guarantee up to six months to one year against structural and material defects. All our members have to include this clause in the agreement itself. Apart from this, our members do give commitment in delivery date as well.  We, as a developer, have to deliver the home in time to safeguard the interest of customers. But builders face constraints like labour issue, erratic material price movement and statutory norms, which put hurdle on timely delivery. But to protect the consumer, we give commitment in writing on the approximate date of delivery. If we don’t deliver on time, we will pay compensation.

According to reports, in Tamil Nadu, the number of registration has come down drastically since April after the increase of guideline value. Do you think this will further dampen the growth of the realty sector in the state?

For any price rise, there will always be initial resistance, whether it is property price rise or guideline value rise. Anticipating this increase, thousands of registrations were already happened before April itself. When one sees the registration happened between January to March, it was much more than the figure of corresponding period last year. So, the registration, which should have been happened after April, had happened before itself. Suddenly there is exponential increase in registration since April, which has its bearings on buyers. So buyers also delay the purchase, which also becomes the reason for low registration. The other reason, of course, the sales have come down in the first quarter of this year till June due to economic condition. Though compared to other cities, we are better off, but macro-economic factors have its impact on the market as a whole. But I am sure, in the next quarter, the sales will pick up.

“Affordability” drives people to peripheral areas, which lack basic infrastructure like water, drainage, streetlight, roads etc. Most of your members have their projects in fringe areas of the city. How CREDAI can help?

I think the government has to step in hereand provide adequate infrastructure. Because, as developers, we pay charges to the government to improve infrastructure. We pay around Rs 30,000 per sq ft as infrastructure development charges. The government should invest heavily on infrastructure projects in fringe areas of the city. Good infrastructure would open up more growth opportunities in Chennai. Because of the bottlenecks in infrastructure, things are not moving. Government should give priority in providing water, road and sewerage in the peripheral areas of Chennai which has good connectivity with the central business district. Roads are bad in several areas and lots of civic works need extra attention. CREDAI will be giving a representation to the government shortly to take up these issues on priority basis.

As more and more high-rise apartments and villas are being launched in Chennai, What is your view on making buildings sustainable?

Making buildings sustainable is an important aspect for protecting natural resources. In fact, we encourage our members to make their projects self-sustainable and eco-friendly. Some of our members even launched solid waste management plan.  There is no point in blaming the local bodies for not disposing solid wastes. Now-a-days, we have seen great deal of awareness about ‘sustainability’ among customers. Many builders go for green-rated projects due to public demand. In fact, we are doing Chennai’s first platinum-rated villa project packed with good features. It is not a marketing gimmick, but for giving a good quality of life to residents. Though initial cost of these buildings would be slightly more, the quality of life in these buildings is better than the conventional ones.

As told to KR Iyer

Read Full Interview on Sulakha.com Here

Will The Real Estate Bill Protect Flat Buyers?

Chennai:  Property buyers in India have much to cheer as the Parliament in Budget session now is all set to discuss and pass the much-awaited Real Estate (Regulation and Development) Bill.

Will the Bill be beneficial to the buyers and protect their rights from the errant developers and fraudulent means of transactions?

“The Real estate Bill will protect buyers from errant developers,” says N.Nandakumar Managing Director, Devinarayan Housing & Property Developments Ltd and executive committee member of CREDAI, Chennai.

However, Nandakumar points out that the cost of administering the regulations by developers will lead to a significant increase in the price of the dwelling unit. “Even already compliant developer companies of repute who are self-regulated are compelled to take the additional admin of the regulatory bill compliances burden resulting in extended project tenure and costs thereof.”

According to property experts, a strong legislation would put a restrain on unethical and unscrupulous practices in the real estate industry, which from the outside looks very fascinating when the skyline of several Indian cities is changing.

“While the penal interest provision could hurt realty players; the Bill if it goes through would indeed in the interest of several buyers - especially the middle class, for whom purchasing a property has been a herculean task (due to skyrocketing prices) and unscrupulous practice adopted by some developers,'' said Ramesh Prabhu, a consumer activist.

The Bill has been framed under provisions dealing with "property transactions" in the concurrent list of the Constitution that applies to states, making the proposed legislation more than a model law.

Agreeing Prabhu’s view the Bill filter out the non-serious players in the industry, Nandakumar,  further said, “ It is also perceived that the challenges likely to be faced by developers in adhering to the regulatory bill, will dissuade entrepreneurs lacking core competency in the building industry to move away from this Industry, thereby leaving more room for serious long term players.”

Ruing that the Bill should have been passed a few years earlier, V Padmanabhan, an IT consultant in Chennai, says, “I bought a flat from a moderately sized builder who has his presence in west Chennai two years ago. Within one year, we have seen a lot of cracks on the walls of all six flats, all the bathroom fittings have turned rusty and seepages in two flats. On approaching the builder, he refused to entertain any of our grievances. Now, we have found that the sump too small and not properly built. As a result, stagnated water from the neighbouring vacant land gets leaked into the tank. We are now reconstructing the tank at our own cost. Had the bill be passed a few years ago, we could have approached the appropriate authority against the builder for redressal.”

The Real Estate (Regulation and Development) Bill has proposed the following, which intends to protect the interest of property buyers:

 -- Developers will have to disclose project and contractual details to ensure transparent, fair and ethical business practices. Hence, there could be model agreement which could reduce ambiguities in realty transactions, which buyers may not be familiar with.

-- Moreover, the regulation will make it mandatory for private developers to register all projects before they sell it to buyers. The property shall be registered with all necessary clearances from local authorities.

-- If a developer fails to declare the status of clearances, the Bill provides for levying a fine that can amount to 10% of cost of project or three years of imprisonment.

-- Also ensuring that the developer adhere to timelines, the Bill states that the realty player will have to park 70% of funds for the project in a particular bank account, thereby preventing the  money being diverted to other projects and thus safeguarding property buyers.

-- The Bill also enunciates that developers should sell a residential property on the basis of "carpet area", instead of the current practice of "super area", thereby ensuring that buyers get a better deal and transparency. People know the exact livable area in their flat excluding the common and plinth areas.

Article link is here.

All Amenities Within Affordable Limit Is Our USP

Real estate in India has been going through patches for the last few years. So, for developers, it is safer to operate in the present state/region where they feel comfortable and strong, feels Sandeep Mehta, Managing Director, Jain Housing and Construction Ltd.

You have been one of the leading construction firms in this region. What is your USP of success?

In South, we were the first among the few developers who had brought in the concept of ‘amenities’. We had introduced swimming pool, club house, gym and large sized complexes more than 15 years ago. From that point to till date, we have been doing projects of that size and volume providing full of facilities and amenities. We have always tried to give customers home within their budget with all the required amenities. That has been our Unique Selling Proposition (USP) -- ‘all amenities within the affordable level.’

Any plan to venture into other markets in future?

There is enough scope in south itself, which we want to explore fully. Having said so, we definitely have plans to go pan-India, when we realize that the market is conducive to do so. Real estate has been going through patches for the last few years. So, I don’t think this is the right time for any developers to look out for other markets. It is safer to operate in the present state where they feel comfortable as they know the market fairly well.

According to you, which are the emerging real estate markets in south India?

I would continue to say that Chennai has been very strong and still offers a lot of opportunity for real estate growth. Apart from Chennai, there are Tier II and Tier III cities coming up like Coimbatore, Madurai, Salem, Trichi etc. where the real estate growth has been reasonably good for the last few years. Though when compared to Chennai, these cities may not have such growth, still they are fast catching up the bigger cities. In Karnataka, Bangalore has been doing extremely well and has become a beautiful cosmopolitan city. We also could see reasonable development in Mangalore, Mysore etc. This is applicable for Hyderabad, Vizag, etc. So, tier II and tier III cities have more potential for growth in future. If you call these are the emerging markets then I think, these cities are opening up for bigger growth in the coming years.

What about Chennai and surrounding areas?

Chennai has been expanding rapidly. There was the time, when Tambaram was considered to be the city limit, now it has become part of city’s most developed areas. Today we have gone beyond the areas of Maraimalai Nagar and even Chengalpet, were people are commuting to city daily. Areas like Sriperumbudur, Kancheepuram or from OMR, Padur and Thiruporur are witnessing rapid real estate growth. As the land prices keep going up, people do not have option but to look for areas away from city where they can afford a house.

What is the impact of the present slowdown on Jain Housing?

Honestly, Jain Housing has not been affected due to slowdown in the market. As for as Chennai, we have been pretty strong so far, doing reasonably good sales. Hopefully, we will not be affected in the coming days too.

There are reports that property prices in Mumbai and NCR regions are overheated and look to go down in the coming days. What is the position in Chennai?

In Chennai, the prices have been fairly steady for the last four years. This is due to continuous supply of new stocks in the market matching to the growing demand. When the supply of stocks comes down, there will be a possibility of price correction to clear the inventory. But, I think that situation may not arise now. Areas like OMR and Sriperumbudur have adequate stocks and sales are pretty good there. So, according to me, as of now, Chennai real estate has not reached the stage of overheating.

As told to KR Iyer

Read  Interview here

N Nandakumar, President Of CREDAI - Interview On Luxury Housing In Chennai

N Nandakumar, President of CREDAI - Tamilnadu, Chairman of Committee on Affordable Housing - Credai National and Managing Director of Devinarayan Housing & Property Developments Pvt Ltd, speaks to K Ramanathan on various aspects of luxury housing in Chennai and real estate investment scenario in the southern metropolis.

Excerpts:

• What is the trend of luxury residential real estate in Chennai?

      The trend for Luxury Real Estate in Chennai is continuing to be on the ascent due to the fact that this segment has significant demand as against the qualitative and quantitative supplies currently available.  This trend is likely to continue with adequate patronage from the affluent section of the society who would like to live in the up market residential areas within CBD areas in Chennai.

• What are the ingredients of the luxury housing?

The basic ingredients for luxury housing shall be the prime locations, low density developments with world class specifications, features along with dedicated amenities coupled with hi tech security features.

• What is luxury housing - a builder's perspective? 

From a builders perspective luxury housing signifies lifestyle that is comparable with global standards at the same time the product shall make a statement for the end-user signifying an epitome of luxury to the buyer.

• What are the hotspots of luxury real estate in Chennai?

South Chennai is predominantly a preferred destination for luxury homes namely the areas such as Boat Club, OS Gardens, RA Puram, Alwarpet, Kotturpuram, Adyar. In Central Chennai certain pockets on & off Nungambakkam high road, such as Rutland Gate, Wallace Garden, Sterling Road, Haddows Road are established hot spots for luxury real estate.

• Are luxury housing projects more profitable than other types of homes?

Luxury housing projects are profitable ones compare to other residential projects because of high cost per dwelling unit and hire margins available in these products. However there are limitations on availability of large land parcels resulting in low-density big-ticket products, which may not provide scale and visibility to the developer as available in large-scale cluster housing developments.

• What do you think about the introduction of 2% registration charges for new homes in Tamil Nadu?

The two percent registration charges imposed by the Tamil Nadu government towards the construction agreement will bring in better title to the apartment buyers as against the present scenario wherein the buyer gets a registered document only for the UDS of the land. The overall title hygiene is better assured when both are registered documents. The additional cost as a result of this registration is a burden on the homebuyer. In a volatile economic situation this could be of adverse impact on the buyers purchase decision is something to consider about the timing of this act being brought in by the government.

• Is it the right time to invest in properties in Chennai?

Historically the South Indian Property Market has been a stable market for Investment. The major criteria being the absence of speculative investor layer in residential developments coming early into the project and cashing out when the project is nearing completion. Secondly, the demand supply position continues to be inverse as there is no adequate inclusive stock creation except for aberrations in the stocks catering to the creamy layer.

Affordable housing projects are at their nascent stage and in the sunshine phase in this part of the Country. Once the momentum picks up in such stock creation and when the gap between supply and demand narrows down, we will get the exact feel of any volatility from time to time.

Currently the pattern is not so and due to the sensationalisation of adversities in this sector by some vested interest and the media has created a pent up situation, which is not the actual position. If you may observe there is no drop in prices as because of the surging input costs and delayed decisions by prospective buyers will only lead to paying up more price for the same asset.

Therefore it is the right time to invest in the property market and there are chances for getting better deals from projects which are cash strapped and to enable better cash flows there could be some rebates etc to the advantage of the prospective buyer.

Read full interview on Sulakha.com here.

Regulatory Bill Should Make Everyone Accountable: Habib

Regulatory authority for real estate is a welcome move. But in the present form it would only tax the developers. Just because a few developers took the customers for a ride, it is not fair on the part of government to rate all developers in one scale. The Bill should bring realty brokers, financial institutions, agents, government authorities, consultants and even architects under the purview, says WS Habib, Managing Director, Ramky Wavoo Developers and Treasurer of CREDAI Chennai. Excerpts from an interview.

Read full article here.