Hyderabad Real Estate Radar

Babus, politicos got prime Emaar plots

2010-08-13T08:14:00.000-07:00

From Times of India - Aug 13, 201o

Is the controversy over the Emaar-APIIC land deal rooted in the promise of free or heavily discounted villas to select sarkari babus and politicians? If sources are to be believed, about 15 of the 125 odd 'Boulder Hills' plots, earmarked for villas, were allotted to bureaucrats and senior leaders from the state who were either 'gifted' this land or given a hefty discount for buying them. Sources, however, say that these 'deals' (with the babus) were struck not by Emaar but a third party — a developer who was given the 'selling rights' of the villas by Emaar way back in 2005. Some of the netas and babus however agreed to take the largesse not in their name but in the name of relatives, claim these sources.

These villas which would be worth Rs 25 crore (approx) when constructed as per market estimates, were 'sold' to some officials for as little as Rs 20 lakh, sources say. In fact some reports even claim that a disgruntled senior bureaucrat landed at the Emaar MGF office in New Delhi to claim his villa, which is yet to be constructed. The villas were to be built by Emaar Hill Township (P) Ltd, the company executing the project. Why the villas had to be offered at heavy discount to netas and babus is not quite clear (You got to be kidding me, right? :-) Why else, to look the other way while Emaar keeps selling away land and taking away government property) . Emaar MGF's CEOShrikant Joshi when quizzed about this preferred not to comment on the matter.

On Thursday evening, there was also news of a quarrel breaking out at the Boulder Hill golf club, between MGF officials and customers of the township. "I do not know of any trouble, but I would not be surprised if it happened," said a member of the club adding, "The customers are an agitated lot as no work has taken off at the site yet. This despite each of them having paid over a crore each." As of now, not a single apartment or villa has been completed by the developer. Other than four model homes, there has been no other construction activity at the township site till date. Apart from 125 villas, 350 apartments were supposed to be constructed. But other than the golf course and a central club house, nothing else has come up.

Worse, MGF is now believed to have shelved its plan to build some amenities initially promised to its customers. "They were supposed to build a club house in each apartment block but have now decided against it. Had it not been for certain clauses in the agreement they would have dragged MGF to court," a customer told TOI.

Meanwhile, Emaar MGF officials claimed that the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) was well aware of Emaar MGF's inclusion, as co-developer, in the Emaar-APIIC joint venture project. Denying APIIC's claim about Emaar Properties PJSC 'illegally' selling its stake (in the APIIC-Emaar joint venture, Emaar Hills Township Pvt Ltd) to its sister concern Emaar MGF, they said that the decision to involve MGF in the venture was "in compliance with all its (Emaar's) agreements with the state APIIC's vice-chairman and managing directorB R Meena had shot off a notice to Emaar on this matter kicking off a controversy. Emaar has replied to this missive.

"There is proof of official communication between Emaar and APIIC regarding the inclusion of MGF in the project wherein APIIC has given its nod to the proposal," said Shrikant Joshi adding, "In fact, following APIIC's approval, the department of information technology and communication as well as the Union ministry of commerce & industry issued a no-objection certificate to the deal."

Referring to a clause in the collaboration deal, signed between Emaar and APIIC in 2003, Joshi said, "The clause clearly states that the 'developer' (Emaar in this case) can at its discretion assign its rights towards development, management and operations of the integrated project to other parties....with an in-principle approval by APIIC, not to be unreasonably withheld." Joshi added, "When APIIC representatives were on the board of the joint venture, it is understood that the body was aware of the MGF deal."

Read more: Babus, politicos got prime Emaar plots? - Hyderabad - City - The Times of India http://timesofindia.indiatimes.com/city/hyderabad/Babus-politicos-got-prime-Emaar-plots/articleshow/6302399.cms#ixzz0wV1Ko0np

Emaar MGF Boulder Hills - Big Scam - Buyers BEWARE!!!

2010-08-11T19:51:00.000-07:00

As I suspected, Emaar Boulder Hills is a stinker. I had written about Emaar and the various issues in my first post in March -> http://hyderabadrealtyradar.blogspot.com/2010/03/whats-deal-with-emaar-mgf-boulder-hills.html

Emaar Boulder Hills is turning out to be a big scam. The state government is claiming that Emaar defrauded them by taking away the entire share from the government. Essentially, the government did not make a penny from the land that was given to Emaar. This could not have been done without the connivance of politicians who have most of the villas in Emaar. The entire project is in jeopardy. People who ended up buying the apartments will be the ones affected without any recourse. Read related reports here:

http://timesofindia.indiatimes.com/city/hyderabad/Next-board-meet-to-take-final-decision-on-Emaar-properties-misdoing/articleshow/6295608.cms

http://timesofindia.indiatimes.com/city/hyderabad/APIIC-loses-prime-land-in-blind-deal/articleshow/6290374.cms

http://www.deccanchronicle.com/hyderabad/congress-mlas-demand-emaar-probe1-821

Emaar issue snowballing into a major controversy

Wakf Board says APIIC-Emaar deal void

As good as Emaar Boulder Hills may sound, with their reduced pricing and all, stay away from it until all these issues are resolved. Seems to me that Emaar will sell the apartments and get out of this project. They have reduced the scale to cut down their losses.

TELANGANA POLL RESULTS PUT A NEW DAMPER ON REAL ESTATE IN HYDERABAD

2010-07-31T21:00:00.000-07:00

TRS and BJP swept the by-polls and the people's mandate is clear - "We want a separate Telangana State". In the short term, real estate prices will be affected negatively in Hyderabad. People who already put some money down on apartments have canceled and taken their money back.

Legal Action Being Initiated Against EMAAR on Boulder Hills

2010-07-07T05:19:00.000-07:00

July 7th, 2010 - Deccan Chronicle
http://www.deccanchronicle.com/hyderabad/cmo-seeks-info-emaar-deal-817

CMO seeks info on Emaar deal

The government has asked the AP Industrial Infrastructure Corporation (APIIC) to protect the interests of the state at any cost.

Reacting to a news item published in these columns, the Chief Minister’s Office (CMO) on Tuesday sought details from the APIIC on the changes made in the agreements by the Emaar Hills Township Pvt. Ltd. (EHTPL) and its impact on the APIIC’s revenues. “We have asked for a detailed note on the violations,” sources in the CMO said.

The major industries minister, Mr Kanna Lakshminarayana, also convened a meeting with the officials of the industries and APIIC and discussed the issue.

Sources said the officials briefed the minister about EHTPL entering into an agreement with Emaar MGF without informing the APIIC.

The officials also explained about the legal action being initiated against Emaar. The minister asked them to take all steps to protect the corporation’s interests.

On Monday, it was reported that APIIC accused its partner Emaar of defrauding the state in the Emaar integrated township and golf course project at Manikonda.

More trouble for EMAAR Boulder Hills - Beware!!!

2010-07-05T20:02:00.000-07:00

The following is from Deccan Chronicle, July 6th 2010:
http://www.deccanchronicle.com/emaar-township-gets-red-card-apiic-434
Emaar township gets red card from APIIC

The prestigious Emaar integrated township and golf course project at Manikonda has run into trouble with the co-promoter, Andhra Pradesh Industrial Infrastructure Corporation (APIIC), accusing its partner Emaar of defrauding the state.

APIIC has hurled the allegation after Emaar Hills Townships Pvt Ltd, the joint venture company, entered into a development agreement-cum-general power of attorney with Emaar MGF without its approval.

With this agreement, the majority of sale proceedings will go to the Emaar MGF and not the JV which developed the project.

Sources said APIIC served a legal notice on its partner for violating the rules and conditions of the collaboration agreement.

It also urged the government to prohibit registration of any transaction pertaining to the township.

“The agreement with Emaar MGF is against financial interests of the state and APIIC since it purports to transfer huge share of profits by way of revenue share to Emaar MGF,” said the APIIC.

APIIC added that the agreement with Emaar MGF was nothing but a sham device for “siphoning of funds” out of township project and to deprive the shareholders, particularly the corporation, its due share in profits.

Check legal documents and ownership clauses before buying an apartment

2010-05-10T23:33:00.000-07:00

There are many instances of people squandering away their hard earned money by investing in an apartment where the clearances have not been obtained or the land title is not clear. Worse still are instances where the builder still owns the land on which the apartments have been built and only the apartments are sold to the apartment owners. There are even instances of apartment complexes where the builder keeps ownership of the roof and has exclusive amenities such as a rooftop swimming pool, garden, tennis court, etc. You may end up paying maintenance charges for your builder's amenities which you never can/will use. There are instances of builders having penthouses and exclusive use solar water heaters which are filled using the common water tank. You will end up paying for the builder's extensive use of the lift. There are many instances of builders having penthouses as party pads and having a party every weekend.

Consider the following factors before buying an apartment:
1. Does the builder have legal possession of the land?
2. Does the project have appropriate local body clearance - (For ex: GHMC in Hyderabad)?
3. Do you have ownership of the land [equivalent to your share in the apartment complex) and is this clearly mentioned in the documents?
4. What are the common areas in the apartment complex (Rooftop garden, tennis court, swimming pool, etc.)?
5. Will there be a society in the apartment complex? Will the builder have the majority share in the society - [Beware of this situation as you and other owners will be marginalized]?
6. What will be the maintenance charges and who decides the maintenance charges? Will the amenities be available to both the apartment owner and tenant [in case you rent out the building]? You may be shocked to know that some complexes have owner only clauses.
7. What are the restrictions, if any, for renting out your apartment?

The foul play in super-built up constructions - (Source: Moneylife India)

2010-05-10T23:30:00.000-07:00

Sourced from Moneylife India - Original Article at http://moneylife.in/article/8/5236.html

Written by: Pallabika Ganguly

Developers are busy constructing six feet wide flower-beds in their properties for hiking FSI

Developers in Mumbai are vigorously using the super-built up area and misleading consumers. In November 2008, the Maharashtra government came up with a housing policy which stated that sales of all properties should be done on carpet area basis. However, developers still do not sell the properties on carpet area basis because they get a chance to play with the free Floor Space Index (FSI) areas by including it as part of the super built-up area and they charge the consumers for the same.

The regulation was supposed to become a law within three months of the draft legislation. By March 2009, it should have been a law, but it is not being followed. Builders are still constructing properties on super built-up basis without passing on the benefit of the free FSI to consumers.

“The Brihanmumbai Municipal Corporation (BMC) only allows four feet flower beds,” said Pranav Desai, a Mumbai-based architect.

Most new properties have huge spaces dedicated towards flower beds, which are given to the developers free of FSI. “Today developers are talking of flower beds, which are 12 feet wide—how can you call it a flower bed? Developers are bucking the system openly and blatantly and no one is telling them anything,” said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.

If you glance through the brochures of various developers, you will come across a common feature—they mention the super built-up area, built-up area and (in brackets) the carpet area. They are following the law, but only indirectly. One high-rise at Peddar Road, south Mumbai, has not received the occupation certificate because all the balconies are flower beds, which are approximately six feet wide.

An industry expert pointed out that after the law was passed, all the properties have to be sold on a carpet area basis. However, a few developers have cleverly converted the total built-up area into carpet area, which has eventually raised the price of the property. It has not made any difference to the developers, but consumers have had to suffer.

“Developers have drastically raised the super built-up area of the new properties. From 50% super built-up area, it has almost reached 100%,” said Pankaj Kapoor, founder, Liases Foras.

However, with the increase in super-built up area, the cost of properties has also doubled over a period of time. Consumers are getting lesser space at a higher cost. For example, if an apartment of 1,000 sq ft carpet area had a saleable area of 1,400 sq ft in Kandivali (a Mumbai suburb) in 2005, at that time, the apartment was priced at Rs2,500 per sq ft. The total cost came to Rs25 lakh. But now, an apartment of 1,000 sq ft is quoted as 2,000 sq ft saleable area. Taking the current cost into consideration, it is priced around Rs8,000 per sq ft. The total cost of the apartment has jumped to Rs1.60 crore.

Negative Effect of new tax policy on Real Estate

2010-03-15T21:11:00.000-07:00

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.

Lanco Hills Ugadi Offer

2010-03-15T21:05:00.000-07:00

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.

Hyderabad is not Mumbai - why so many highrise apartments?

2010-03-03T01:56:00.000-08:00

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".

Square footage - Carpet Area vs Super Area

2010-03-03T01:42:00.000-08:00

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.

Separate statehood movement has put a crimp on Hyderabad real estate

2010-03-03T01:37:00.000-08:00

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.

Lodha Bellezza - Good product Wrong location!!!

2010-03-01T07:15:00.000-08:00

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.

New apartment ventures in Hyderabad - Gachibowli/Nanakramguda

2010-03-01T04:17:00.001-08:00

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?

2010-03-01T04:02:00.000-08:00

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.