Hiranandani Group invests Rs 1,000 crore to develop commercial space in Thane

 3 July 2021

While Quantum tower spread across 0.6 million sq ft is ready to be leased out, Centaurus tower spread across 2 million sq ft will be ready by December 2022.

NEW DELHI
Hiranandani Group has invested nearly Rs 1,000 crore to develop 2.6 million sq ft commercial real estate space in Hiranandani Estate township spanned across 350 acres on Ghodbunder Road, Thane, the company said in a media release.

While Quantum tower spread across 0.6 million sq ft is ready to be leased out, Centaurus tower spread across 2 million sq ft will be ready by December 2022.

The company claims that both the commercial towers will offer ‘walk to work’ lifestyle.

"The consequential benefit of office spaces moving closer to employee homes will lead to carbon neutrality, enhanced productivity and increased employee retainability: tuning in perfectly to the long-term sustainable business goals," said Niranjan Hiranandani, founder & MD, Hiranandani Group.

ADIA-backed Lake Shore in talks to acquire Viviana Mall

 01 July 2021

The proposed deal assumes significance as it indicates global investors’ unabated interest in Indian mall developments and confidence that retail consumption will rebound once the Covid-19 pandemic is over.

The Abu Dhabi Investment Authority-backed Lake Shore India Advisory is in talks with realty developer Ashwin Sheth Group and Singapore’s sovereign wealth fund GIC to acquire Viviana Mall in Thane for around Rs 2,000 crore, said persons with direct knowledge of the development.

The proposed transaction will be the largest ever single and operational retail property acquisition in the country.

“The discussions between all three entities have reached an advanced stage and the transaction is expected to be completed soon as the terms are being finalised now,” said one of the persons mentioned above.

The proposed deal assumes significance as it indicates global investors’ unabated interest in Indian mall developments and confidence that retail consumption will rebound once the Covid-19 pandemic is over.

Viviana Mall is spread on a 13-acre land parcel on Thane’s on Pokhran Road and has total lease area of 1.7 million sq ft. It houses one of the largest multiplexes with 14 screens including Imax experience.

GIC had picked up 49% stake in Viviana Mall from Sheth Group in early 2016.

ET’s email queries to GIC and Lake Shore remained unanswered until the time of going to press.

"Based on the speculation, the management at Viviana Mall strongly denies any such developments. We will proceed to updating all our stakeholders and media if any announcement has to be made,” said Viviana Mall’s spokesperson.

ET had reported earlier that the Institutional investors including Blackstone Group, Warburg Pincus, ADIA-backed Lake Shore and Canada Pension Plan Investment Board (CPPIB), through their joint platforms or Indian partners, had shown interest in picking up the property.

Given the increased residential development in and around Thane, the city has also emerged as a major hub for retail consumption, prompting the rise in interest among major retail property developers.

Private equity major Xander Group’s retail arm Virtuous Retail South Asia (VRSA) has acquired a nearly 20-acre prime land parcel in Thane from textile major Raymond for $100 million, or over Rs 710 crore. It is planning to invest an additional $240 million, or over Rs 1,700 crore, to develop the site, taking its total investment to over Rs 2,400 crore.

VRSA is planning to build a 3.7 million sq ft mixed-use city centre project anchored by a 2.4 million sq ft VR retail flagship development. The proposed 2.4-million-sq-ft VR flagship retail mall will offer retail, dining, lifestyle, and entertainment options.

Ashwin Sheth Group is looking to set up a strategic platform to develop and operate retail malls across the country.

In December, the developer entered into a joint venture with Nagpur-based Sethi Group to develop 1 million sq ft mall, Viviana Nagpur, in the city’s south western region near Pratap Nagar.

Recently, GIC also entered into a strategic partnership with The Phoenix Mills to set up a joint venture to develop, own and operate retail-led mixed-use developments in India.

In 2019, Lake Shore had bought a majority stake in a retail mall project in Hyderabad from the city-based Phoenix Group for around Rs 1,000 crore, inclusive of construction funding.

How is money refunded when a property deal is cancelled

Februay 2020

What are the financial and income tax consequences that follow, if a property deal is called off or cancelled? We examine

Property deals need not always culminate in the execution and registration of an agreement. Sometimes, the deal may not go through and may be abandoned halfway, after the payment of token money or even after some of the payments have been made. The deal may be cancelled by either the seller or the buyer, for any reason.

Credits : pexels.com

In case of deals for the purchase of any real estate, the buyer generally pays some amount as token money, when the other terms and conditions for the transfer of the property are agreed upon. The amount of token money may vary, from being merely a token to a substantial percentage of the value of the property.

If the seller backs off from his commitment to sell his property, there are no immediate financial implications, except that the buyer gets a right to file a suit for specific performance in the courts of law. However, this is generally not resorted to.

If the buyer backs out from the deal, the seller has the right to forfeit the token money paid. With respect to such forfeited token money, the buyer cannot claim any income tax benefit, as this is treated as a capital loss under the tax laws. However, the advance money/earnest money that is forfeited, becomes an income of the seller in the year in which the deal is called off. Such forfeited earnest money is taxed under the head ‘income from other sources’ and not under the head ‘capital gains’, even though the income is received with respect to a capital asset.

Before the amendment of the law in 2014, the amount of forfeited earnest money was required to be deducted from the cost of acquisition of the asset with respect to which it was received, in the year in which the asset, which is the subject matter of the deal, was sold.

​​Refund of stamp duty paid

Generally, for all property transactions, the buyer has to pay certain amount as stamp duty. This is either a fixed amount or a percentage of the property’s market value. You also have to pay registration charges, for registration of the agreement.

The stamp duty rates and registration charges payable, are determined by the respective state governments. So, the rules for refund of stamp duty that is paid for property transactions, would vary from state to state. You are required to pay the stamp duty before the execution of the document.

In Maharashtra, you are entitled to claim refund of the stamp duty, within six months from its payment, in certain situations. You can claim the refund of stamp duty paid on such instrument, if the same has not been executed. The government deducts 1% of the stamp duty, subject to a minimum of Rs 200 and a maximum of Rs 1,000 of the stamp duty paid.

In case of cancellation of a deal for the purchase of a property and for which the agreements have already been registered, the Maharashtra government allows a longer period of two years from the date of the agreement, for claiming the refund of the stamp duty, subject to certain conditions.

This refund is allowed, only if the developer fails to hand over possession of the property booked and this fact, as the reason for cancellation of the deal, is mentioned in the cancellation deed. The rules also provide that the cancellation agreement should be registered.

The buyer of the property can get a refund of 98% of the stamp duty, if an application is made for a refund of the stamp duty. With the refund application, you are required to attach the original agreement, as well as the original cancellation deed, with both the documents being registered. However, you will not get a refund of the registration charges.

Refund of GST (Goods and Services Tax)

When you book an under-construction property, as per the existing laws, the developer levies a GST on the agreement value, at a certain rate. This rate will depend on whether the property falls under the ‘affordable housing’ category or not and also on whether the developer is availing of the GST. For any reason, if you want to cancel the booking and thus, surrender your rights over the under-construction property, the builder may agree to refund the booking amount and instalments paid, or even agree to pay a higher amount to you, depending on the demand and supply dynamics at that time.

Although the developer may have collected GST from you, he may or may not agree to refund this amount, as he may have already deposited the amount to the credit of the government. The builder will not be entitled to claim any refund with respect to the GST, as he has already rendered services to you.

In case you enter into an agreement to transfer your rights in the under-construction property to a third party, with the developer being the confirming party, your sale price would be inclusive of the GST and you will not be able to separately recover or charge any GST on such transaction.

While computing the capital gains, the GST that is already paid by you, will form part of the cost of acquisition. The capital gains will be taxable as long-term, if your holding period has been three years, or else, the profits, if any realised, will be taxed as short-term capital gains.

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Should you choose under-construction, ready-to-move or resale property?

Februay 2020

Unsure whether you should buy an under-construction, or ready-to-move-in, or resale property? We analyse the pros and cons of each option, to help you get clarity

The purpose for which a residential property is purchased, is crucial when it comes to deciding between an under-construction, ready to move (new property), or a resale property. You may buy it for occupancy as an end-user, or for investment purposes, or to keep it as a second home.

Credits : pexels.com

What factors to consider when choosing between Under-construction vs ready-to-move-in vs resale property?

Experts suggest that for under-construction properties, the buyer should ensure that the developer has taken all the approvals, that the project should be RERA-registered and that it is being developed as per the development plan. There should be no financial stress on the project and the developer should have a good track record and the capability to deliver the project.

In case of ready-to-move-in projects, the buyer should ensure that all the property papers and approvals are in place and there is no financial liability on the project. The amenities and utilities promised by the developer should be in place and functional.

While buying a resale property, the buyer should check the age of the property, repair costs (if any) and encumbrances related to electricity, water, society bills, etc.

	Resale	Under-construction	Ready-to-move-in
Price	At market price, or lower if the seller is needy.	Discount over market rate	At a premium over the market rate
Risk level	Secure	Risky	Secure
Possession delay	No	Possible	No
Social infrastructure	Present in most cases	May not be present	Present in most cases
Physical infrastructure	Present in most cases	May not be present	Present in most cases
Return on investment	Low	High	Moderate
Suitability	End-use	Investment	End-use/investment
Loan facility	Available	Depends on papers and legal clearances	Available
Possession time	Immediate	Depends on project completion	Immediate

​​Who should buy under-construction properties?

An investor would always invest in an under-priced project with upside potential. During construction, the developers start with competitive pricing to attract buyers. As the project matures in construction and occupancy, the demand rises, leading to an increase in prices.

“An investor will always find it attractive, to invest during the early stages of project development. Under the guidelines of the Real Estate (Regulation and Development) Act (RERA), a developer cannot launch a project without obtaining the requisite permissions. Therefore, there is no pre-launch stage now. It is always advisable to invest, after thoroughly understanding the project, including the permissions obtained, government dues, project plan, etc.

All these details are better known upon official launch,” says Amit Chawla, director, valuation and advisory services, at Colliers International India.

Investing in resale property could be a costly affair because the existing buyer would have already paid stamp duty on it, and the investor has to again pay the stamp duty for such property. So, the cost of the ownership escalates by the value of stamp duty. The existing property owner may also add some premium on the price of the property, increasing purchase cost.

For example, if the stamp duty and the registration cost at a particular location is 8%. So, each time a property changes hands from one owner to another, the price will increase by at least 8% due to the stamp duty and registration thereof.

Who should buy ready-to-move-in properties?

People who are living on rent, may find it challenging to manage the EMI and rental outgo at the same time. The situation may become more complicated, if the possession of the property possession is delayed. Hence, such buyers should prefer ready-to-move-in properties over under-construction properties. 

“First-time buyers are usually end-users, who need a place to live and therefore, prefer ready-to-move-in flats, as they generally do not plan to sell the property for a long time,” opines Rituraj Verma, partner at Nisus Finance.

A ready-to-move-in property allows the buyer to understand the quality of construction, infrastructure support and locality. Moreover, the end-user can immediately leave the rental home, to save on the rental money. With a ready-to-move-in property, a buyer can also have a look and feel of the property and can compare it with other projects more effectively.

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How to buy a home that delivers long-term ROI

The decision to buy a property, should be based purely on the needs of the individual and the inherent value of the unit. We look at how home buyers can ascertain this, to choose a property that provides good returns on investment

With the Real Estate (Regulation and Development) Act (RERA) coming into force, as well as various other policy initiatives such as the Benami Transactions Act and the government’s push to affordable housing, we are seeing increased activity in the residential property market in the larger cities. After the dampener of demonetisation in 2016, the positive buyer sentiment visible now is especially significant. Consequently, builders are determined to capitalise on it, via increased marketing efforts. Given that there is already a lot of supply in the residential market – a lot of it for ready possession – fresh launches have been curtailed, so that the existing inventory can be absorbed. Much of the intensified marketing efforts are centered around special deals and offers.

How to ascertain the real value of a home

While this may be advantageous for property buyers, they should be judicious while evaluating offers and schemes and base their purchase decisions solely on the real value of the home. Freebies such as gold, cars and household goods, have an undeniable attraction but they are fundamentally frivolous in nature and do not add to the value of the home.

The price of a home is obviously an important consideration for middle-class property buyers. However, the strategy of looking for the cheapest options on the market, does not make much sense because it is quality that determines value. In the case of residential property, the quality of an offering depends on three aspects:

1. The quality of the location.


2. The brand value of the builder.


3. The availability and quality of facilities and amenities in the project and in individual units.

​​The importance of location in a property’s value

Central locations are traditionally the costliest, as they offer great access to many important parts of the city , such as the CBD (central business district) and SBD (secondary business district). These areas tend to host the offices of high-profile companies and offer a vast cross-section of jobs, from highly-paid management to more modestly-paid support staff jobs. Even the second category of jobs is attractive, because the growth prospects in high-profile companies, are usually very good. This is what makes living in central locations very desirable and from a real estate pricing perspective, very expensive.

In India, this mantra held true for a very long time, until the advent of the infotech culture. The IT/ITeS industry, tends to offer very good salary packages but is not focused on high-value locations. Quite to the contrary, such firms prefer to set up shop in peripheral locations, so as to save on the real estate costs. As a result, many cities’ outskirts have become very desirable places for home buyers and they are far less expensive.

For IT professionals and industrial employees, as well as property investors, buying a home in a peripheral location that connects to an IT hub and/or manufacturing belt, makes perfect sense. Unfortunately, such locations attract all kinds of developers – from those who have a reputation for creating true lifestyle value offerings, to those who specialise in constricted, ‘pigeon-hole’ homes. This is where the brand value of a developer plays a significant role.

Correlation between brand value and quality

With a lot of housing supply available in the new growth corridors, buyers are spoilt for choice. The cost of a flat is obviously important but one still only gets what one pays for. Ultimately, a home is not just an asset but one which performs the very critical functions of offering refuge, comfort and security. Buyers must look for options, which offer them these three advantages to a satisfactory level. Branded builders provide these as part of their standard value offering, because their reputation demands it.

Facilities and amenities that add value to a property

Urban life today, places a lot of stress and demands on us. Consequently, our homes cannot be mere places of refuge but must also provide healing and rejuvenation. A clubhouse, swimming pool and children’s park, are no longer luxuries but the bare minimum that Indian home buyers can and should expect. Nevertheless, even projects without such offerings will find buyers because of their lower prices. While short-listing prospects for home purchase, it is important to ensure that the final selection provides a decent lifestyle and not just an abode.

If one looks at the supply in the residential property market from this perspective, the choice of options automatically narrows down to a more manageable and comprehensive level. Buying the right home is not just about present and future comfort, but also about investment growth. Homes in good locations, built by reputed developers with a good saturation of amenities and facilities, will always yield better capital appreciation, as well as potential rental income for property investors.

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A guide to creating wealth with Residential Real Estate Investment

How does an investor make the most of a property investment? We get the experts’ views on the factors and the regions that residential home buyers should consider

For any investment in residential property to provide effective returns, the chosen location should have good social infrastructure, adequate public transport and sufficient economic activity to sustain development and growth. These parameters apply to investments in non-agricultural land approved for residential development, as well as flats in residential projects.

However, to mitigate risks, one should stick to tier-1 and select tier-2 cities only. It is also prudent to invest in properties, where the prices range between Rs 2,500 and Rs 5,000 per sq ft, as this will provide protection against capital value erosion. Simply put, this is a safe price segment and almost guarantees capital appreciation.

Guidelines, to make the most of your property investment:

• Understand the property cycle, to identify the best entry point.
• Leasehold titles issued by the government must be fathomed.
• The investor needs to have a clear comprehension of unearned increase or capital gain and quantum of stamp duty that needs to be paid.
• Check the quality of the development because poor design and construction are common when the markets are depressed.
• The project’s development plans and all statutory approvals, should be in place. If the approvals are not yet in place, the investor should monitor them closely during the investment cycle.
• Check the credibility and track record of the developer and his arrangement for finance to complete the project, as even reputed developers have failed to deliver under the current market conditions.
• Enlist a reputed legal firm to carry out the due diligence on the property’s title. One can no longer rely solely on the due diligence of home loan firms, as they have targets just like developers.
• Understand the implications of the size and dimensions of the plot/apartment. Small plots or apartments may cost less but they may be difficult to sell.
• The location of the project may be important but so is the location of the plot or the apartment within the complex. Investors should avoid buying flats on the top floors of high-rise buildings, as the floor-rise charges will add to the cost.
• The price of the development, should be lower than the last peak (in 2008). However, exceptions can be made for quality, delivery date and location.
• The time frame for getting possession of the property and conveyance of land, must be explicitly clear. The penalties in case of delays, must be well understood.
• The investor must know the difference between soft launch, launch and current price of the developer. The resale price in completed projects, may be actually cheaper.
• The investor must understand all the clauses in the sale agreement along with the transfer charges that may applicable, in case he wishes to sell the apartment during its construction. He should also establish whether the agreement value includes the cost of all amenities, parking, etc., or whether these are to be paid separately.
• The investor should compare the project with others, based on its carpet area rate.

If all the above precautions have been taken, the property should ideally appreciate at a consistent rate of 15% per annum for three years. It is important to remember that one can almost never sell at the peak, just as it is impossible to always catch the lowest price.

​Best cities for residential property investment

• North India: National Capital Region, Lucknow, Chandigarh, Jaipur and Dehradun.
• East India: Bhubaneswar, Kolkata, Guwahati and Ranchi.
• West India: Ahmedabad, Mumbai, Pune, Nashik and Nagpur.
• South India: Hyderabad, Bengaluru, Chennai, Coimbatore and Vijaywada.

These cities offer the potential for higher capital value appreciation, depending on the demand and supply dynamics of their micro markets, the quality of the development, the reputation of the developer, location of the project and its timely completion.

Also read: Investment Tips: How To Buy A Home That Delivers Long-term ROI

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Co-living spaces versus hostels and PG accommodations: What should students choose?

Co-living spaces and student housing have emerged as viable alternatives for those looking for rental spaces in metro cities. We look at the factors that students should be aware of, before choosing such accommodations

With the growing migrant population across the country, the idea of shared living is finding many takers. Such accommodations are particularly useful for students, who head to cities to start their college life. While, earlier, hostels and paying guest accommodations were the available options, modern concepts for students include co-living spaces or student housing.

Concept of co-living spaces

“The concept of co-living involves having a common kitchen, a utility space and a lounge area, along with a common study zone that the students can use. This is apart from the private bedroom and bathroom that each resident has. It is a modern form of housing, wherein students stay in a common apartment or building, while sharing common facilities. Similar to how serviced apartments evolved, owing to the need for greater flexibility and freedom as compared to hotels, co-living has taken shape, owing to the need for a cost-effective, flexible and hassle-free lifestyle, as compared to traditional rental accommodations,” explains Divya Seth Maggu, senior associate director, valuation and advisory services at Colliers International India.

​Benefits of co-living spaces, over hostels and PGs

The main benefit of a co-living space, is that one need not compromise on comfort, when living away from home. The facilities available, such as utilities and maintenance, are at par with what is available in one’s house. Although co-living may not be as cost-effective as a hostel, it does offer more benefits over the latter, at a slightly higher cost. Experts point out that hostels and PGs are mainly about lodging and boarding, while co-living provides an elevated lifestyle, with opportunities to interact and cohabit without the overbearing scrutiny and rules.

“Co-living spaces offer flexible lease periods that can range from short-term to long-term. Several co-living spaces also hold events like yoga, festival nights, movies, sports tournaments, etc., which takes care of the leisure activities within the complex. Also, hostels and PGs may have conditions, in terms of visitors, deadlines for returning home, etc., which can hinder flexible working hours,” adds Abhishek Kulkarni, chairman and managing director of Million Sqft Realty Pvt Ltd.

How does a co-living setup operate?

Companies in the co-living segment lease properties on a long-term basis from building owners, for a period of three to seven years. They revamp the interiors, to suit the requirements of students before renting it out. They also hire housekeeping staff and security guards, for property management and are overall responsible for providing the facilities. Students then sign the agreements with the co-living operators. Kulkarni explains: “The agreement includes details pertaining to the rental amount, the period of the lease and verified personal details of the person on rent. The responsibilities of the co-living operators include maintenance, cleaning, collecting rent, etc., thereby, eliminating the multiple levels of operations that exist in renting out a residential property.”

Before signing the agreement for a co-living space

It is important to establish one’s budget in advance, to ascertain the budget that you can pay every month, before starting the search. The next step is to align your requirements from the co-living space, with the budget. Finally, students should look for properties that meet their expectations, as well as budget.

Things to keep in mind, when opting for a co-living space

• Check the time frame of the agreement and the duration of your education.
• Verify the facilities and utilities available and the distance of the co-living space from the place of education.
• Explore various rental options, to ensure that the co-living space is at par with industry rates and not overpriced.
• Check on the privacy available, as a co-living space should offer a conducive environment for studying.
• Check the security in the place.

Also read: Dos and don’ts for relocating a house

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