In the new budget, the Finance Minister introduced service tax on real estate complexes unless the entire consideration for the property is paid after the completion of construction, that is, on obtaining the occupation certificate from the concerned authorities.
Service tax will now also be levied on additional services provided by a builder to buyers for extra charge like preferential location, internal and external development of complexes.
Service tax on the activity of construction would mean buyers paying higher price for property which is under construction.
Monday, March 15, 2010
Lanco Hills Ugadi Offer
Lanco Hills is offering apartments at Rs. 3000/- per sq. ft for bookings before March 31st. The advertisement says conditions apply. Not sure what the conditions are.
Wednesday, March 3, 2010
Hyderabad is not Mumbai - why so many highrise apartments?
Mumbai is a city which is geographically restricted and there is a scarce availability of land. Hence, there is only space to grow vertically into the sky. In Hyderabad that is simply not the case. Then why would you have so many of these propping up suddenly -> Lanco Hills, Lodha Bellezza, Aparna Sarovar, Aliens Space Station, etc.
The recent fire episode in Bangalore was a wake up call for people who live in High-rise apartments. High-rise structures pose particular design challenges for structural and geotechnical engineers, particularly if situated in a seismically active region or if the underlying soils have geotechnical risk factors such as high compressibility or bay mud. They also pose serious challenges to firefighters during emergencies in high-rise structures. New and old building design, building systems like the building standpipe system, HVAC systems (Heating, Ventilation and Air conditioning), fire sprinkler system and other things like stairwell and elevator evacuations pose significant problems.
Some of these High-rises have helipads on top of them so that people can be evacuated using helicopters in the event of an emergency. How fast can the fire department or the police arrange for helicopters that can evacuate hundreds of people from the rooftop? No prize for guessing this question!
The International Conference on Fire Safety in High-Rise Buildings defined a high-rise as "any structure where the height can have a serious impact on evacuation".
The recent fire episode in Bangalore was a wake up call for people who live in High-rise apartments. High-rise structures pose particular design challenges for structural and geotechnical engineers, particularly if situated in a seismically active region or if the underlying soils have geotechnical risk factors such as high compressibility or bay mud. They also pose serious challenges to firefighters during emergencies in high-rise structures. New and old building design, building systems like the building standpipe system, HVAC systems (Heating, Ventilation and Air conditioning), fire sprinkler system and other things like stairwell and elevator evacuations pose significant problems.
Some of these High-rises have helipads on top of them so that people can be evacuated using helicopters in the event of an emergency. How fast can the fire department or the police arrange for helicopters that can evacuate hundreds of people from the rooftop? No prize for guessing this question!
The International Conference on Fire Safety in High-Rise Buildings defined a high-rise as "any structure where the height can have a serious impact on evacuation".
Square footage - Carpet Area vs Super Area
Many people are unaware of what actually is the square footage that realtors quote. The square footage that is usually quoted is the super built up area square footage, which is -> "`Super Built-up Area’ refers to the plinth area of an apartment or a commercial unit as added by the balconies and other common areas like corridors, staircase, lift room, motor room, security room, meeting hall, gymnasium and an area reserved for indoor games."
The area you need to be concerned about is the carpet area -> "`Carpet Area’ refers to the total usable area within the four walls of an apartment or a commercial space, as the case may be. In other words, it refers to the area for which a carpet can be laid if required by the owners."
There is no set ratio of carpet area to super built-up area. For example, in Boulder Hills Excelsior the super built-up area for an apartment is 2600 sft, whereas the carpet area is only 1600 sft [so only 60%]. For Green Grace and Golf View, the carpet area is 80% of the super built up area.
Be aware of this! Otherwise you will end up getting a lot less living space for a lot more of your hard earned money.
The area you need to be concerned about is the carpet area -> "`Carpet Area’ refers to the total usable area within the four walls of an apartment or a commercial space, as the case may be. In other words, it refers to the area for which a carpet can be laid if required by the owners."
There is no set ratio of carpet area to super built-up area. For example, in Boulder Hills Excelsior the super built-up area for an apartment is 2600 sft, whereas the carpet area is only 1600 sft [so only 60%]. For Green Grace and Golf View, the carpet area is 80% of the super built up area.
Be aware of this! Otherwise you will end up getting a lot less living space for a lot more of your hard earned money.
Separate statehood movement has put a crimp on Hyderabad real estate
The Telangana statehood issue has become a major dampener on real estate in Hyderabad. No one will admit to this but looking at the number of transactions and the uncertainty in realtors, this is the reality. Housing projects that have come to completion now are quoting boom time prices and are unable to sell. They have cut some of their prices but still the prices are unrealistic in the current environment. Investors are waiting on the sidelines to see the outcome of the statehood issue. One thing is certain, the damage has been done to Hyderabad. Investment is fleeing to other states.
Monday, March 1, 2010
Lodha Bellezza - Good product Wrong location!!!
Lodha Bellezza kicked off their project during the Hyderabad real estate boom time with a lot of hype. At the beginning, It was invitation only to a select group of individuals from the elite of Hyderabad. Slowly that started becoming a broader group and finally anyone could get an invitation to see these Skyvillas.
Lodha group really screwed it up with the choice of location for their project. Kukatpally is a lower/upper middle class neighbourhood of Hyderabad. Why the heck would any of the elite class want to live in the most expensive property in the city located in one of the possibly lowest cost housing boards in Hyderabad??? Time will only tell.
Lodha group really screwed it up with the choice of location for their project. Kukatpally is a lower/upper middle class neighbourhood of Hyderabad. Why the heck would any of the elite class want to live in the most expensive property in the city located in one of the possibly lowest cost housing boards in Hyderabad??? Time will only tell.
New apartment ventures in Hyderabad - Gachibowli/Nanakramguda
- DLF New City Heights on Outer Ring Road, near Narsingi Junction - Price being quoted now is Rs. 2500/- per Sft.
- Golf View apartments near outer ring road junction at Nanakramguda. - Price per sft = Rs. 2800/-
- Greengrace apartments near outer ring road junction at Nanakramguda. Rs. 3200/sft
What's the deal with Emaar MGF Boulder Hills in Gachibowli?
I heard about Emaar MGF Boulder Hills project through a friend. I was shocked at the prices they are quoting. Rs. 6000/sft on the ground floor that is facing away from the golf course!!! Why would anyone pay such a high amount for the privilege of staying next to the golf course. The rates increase steeply the higher you go and go much higher if you want a golf course view.
What was really shocking is the super built-up area allocation that they quote. For a carpet area of 1570+ sq ft, the super built up area is 2600+ sq ft. So you have to pay a steep rate of say Rs. 8000/- for a 6th floor golf course view apt for the entire 2600 sq. ft when you actually use only 1570 sft.!!!! Most apartments the super builtup area is only 20% of the total area. Here it is about 40%!!! . The fact that they scaled down their project development plans from 10 towers to 4 towers tells you that the demand for their apartments is not what they expected it to be. Only people who are either flush with money and don't know how to burn it or people who really love looking at a golf course all their life and can afford to sink in their life savings might buy a property at this place!!!
They have some villas on the golf course, but all of them were sold. When I did some research, I found out that they were sold/given away to politicians and their henchmen at throw away prices. No one at the Boulder Hills office talks about the villas and what their status is. They are quite hush hush about it. These villas are right smack in the middle of the golf course. I saw some massive 3 story villas being built. If any paranoid politician gets hit by a golf ball or has a window pane broken by one, you can imagine the fuss they would create. Goodbye golf course! Upon doing further research, I found out that Emaar MGF does not own the golf course. They just have a lease on it and the government can change the lease at any time in the future. Emaar MGF only owns 120+ acres of the land which is where they are building the apartments, villas, shopping mall, hotel etc.
I was able to find some really useful information, about the Boulder Hills project, in Emaar MGF's Draft Red Herring Prospectus here -> http://www.db.com/india/download/Emaar_MGF_Land_Limited_DRHP_FINAL.pdf. I suggest that anyone who is interested in buying a property in Emaar MGF read this document.
Did you know that Emaar MGF owns a massive amount of land bank and a lot of it is agricultural!!! According to India's FEMA rules, no foreign company may own/procure agricultural land!!! Now, how the heck did Emaar manage that??? Infact the Enforcement Directorate took notice of this fact and conducted raids on Emaar. Here is a statement from an ED official -> "The company has about 12,800 acres of land bank, out of which 8,700 acres of land is agriculture land. Most of this farmland has been acquired out of FDI, which is a violation,” the statement said. The ED claimed that the MD of the group “admitted that the FDI funds were used for purchasing agricultural land.” About the search operation, the group said it was “routine.” An Emaar MGF statement on Thursday said, “There was a routine search operation. We have fully cooperated with the investigation.”
Here is a link to the article on the Enforcement Directorate raid on Emaar MGF -> http://www.business-standard.com/india/news/ed-claims-evidencefdi-law-violations-by-emaar-mgf/378636/.
There is a pending litigation on this project -> " In respect of our Boulder Hills project, a writ petition has been filed before the Andhra Pradesh High Court for a declaration that the action of the respondents, including the State of Andhra Pradesh and the Andhra Pradesh Industrial Infrastructure Corporation Limited, in allotting certain land in Manikonda village in Andhra Pradesh to certain private parties, including certain land in favor of Emaar, our Promoter, was illegal and arbitrary. The petitioner has claimed that this land had been notified as “wakf land” under the Andhra Pradesh Wakf Act, 1955, and is reserved for specified religious purposes. A portion of this land forms part of our Boulder Hills project, which we propose to develop over an area of approximately 510 acres. As of the date of this Draft Red Herring Prospectus, there is no court order restraining Emaar from developing the Boulder Hills project."
Another interesting piece of information in the Red Herring Prospectus is the price that was paid for the villas. On page 89, the average price/sft for Excelsior [the apartments] is stated as Rs. 7,080/-. The villas on the other hand were sold for Rs. 556/- per sqft!!!! WHOA!!! Can you smell a rat??? According to the information there are 77 villas and all of them are booked. There are plenty of apartments available as of 31/8/2009 -> 149 out of 266. More than 50% are available!!!
Watch out before buying an apartment in Emaar MGF Boulder Hills!!! Do your research. Don't get blown away by their sales pitch and the model apartment. Ask them questions about what the actual carpet area is, if the golf course will be maintained by them for the foreseeable future, if they own it, etc.
What was really shocking is the super built-up area allocation that they quote. For a carpet area of 1570+ sq ft, the super built up area is 2600+ sq ft. So you have to pay a steep rate of say Rs. 8000/- for a 6th floor golf course view apt for the entire 2600 sq. ft when you actually use only 1570 sft.!!!! Most apartments the super builtup area is only 20% of the total area. Here it is about 40%!!! . The fact that they scaled down their project development plans from 10 towers to 4 towers tells you that the demand for their apartments is not what they expected it to be. Only people who are either flush with money and don't know how to burn it or people who really love looking at a golf course all their life and can afford to sink in their life savings might buy a property at this place!!!
They have some villas on the golf course, but all of them were sold. When I did some research, I found out that they were sold/given away to politicians and their henchmen at throw away prices. No one at the Boulder Hills office talks about the villas and what their status is. They are quite hush hush about it. These villas are right smack in the middle of the golf course. I saw some massive 3 story villas being built. If any paranoid politician gets hit by a golf ball or has a window pane broken by one, you can imagine the fuss they would create. Goodbye golf course! Upon doing further research, I found out that Emaar MGF does not own the golf course. They just have a lease on it and the government can change the lease at any time in the future. Emaar MGF only owns 120+ acres of the land which is where they are building the apartments, villas, shopping mall, hotel etc.
I was able to find some really useful information, about the Boulder Hills project, in Emaar MGF's Draft Red Herring Prospectus here -> http://www.db.com/india/download/Emaar_MGF_Land_Limited_DRHP_FINAL.pdf. I suggest that anyone who is interested in buying a property in Emaar MGF read this document.
Did you know that Emaar MGF owns a massive amount of land bank and a lot of it is agricultural!!! According to India's FEMA rules, no foreign company may own/procure agricultural land!!! Now, how the heck did Emaar manage that??? Infact the Enforcement Directorate took notice of this fact and conducted raids on Emaar. Here is a statement from an ED official -> "The company has about 12,800 acres of land bank, out of which 8,700 acres of land is agriculture land. Most of this farmland has been acquired out of FDI, which is a violation,” the statement said. The ED claimed that the MD of the group “admitted that the FDI funds were used for purchasing agricultural land.” About the search operation, the group said it was “routine.” An Emaar MGF statement on Thursday said, “There was a routine search operation. We have fully cooperated with the investigation.”
Here is a link to the article on the Enforcement Directorate raid on Emaar MGF -> http://www.business-standard.com/india/news/ed-claims-evidencefdi-law-violations-by-emaar-mgf/378636/.
There is a pending litigation on this project -> " In respect of our Boulder Hills project, a writ petition has been filed before the Andhra Pradesh High Court for a declaration that the action of the respondents, including the State of Andhra Pradesh and the Andhra Pradesh Industrial Infrastructure Corporation Limited, in allotting certain land in Manikonda village in Andhra Pradesh to certain private parties, including certain land in favor of Emaar, our Promoter, was illegal and arbitrary. The petitioner has claimed that this land had been notified as “wakf land” under the Andhra Pradesh Wakf Act, 1955, and is reserved for specified religious purposes. A portion of this land forms part of our Boulder Hills project, which we propose to develop over an area of approximately 510 acres. As of the date of this Draft Red Herring Prospectus, there is no court order restraining Emaar from developing the Boulder Hills project."
Another interesting piece of information in the Red Herring Prospectus is the price that was paid for the villas. On page 89, the average price/sft for Excelsior [the apartments] is stated as Rs. 7,080/-. The villas on the other hand were sold for Rs. 556/- per sqft!!!! WHOA!!! Can you smell a rat??? According to the information there are 77 villas and all of them are booked. There are plenty of apartments available as of 31/8/2009 -> 149 out of 266. More than 50% are available!!!
Watch out before buying an apartment in Emaar MGF Boulder Hills!!! Do your research. Don't get blown away by their sales pitch and the model apartment. Ask them questions about what the actual carpet area is, if the golf course will be maintained by them for the foreseeable future, if they own it, etc.
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