SEMiNAR ON REALTY 2012

OCTOBER 2012

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CHENNAI PROpERTY
Published on 1st and 16th of every month

INDiA PROPERTY SHOW

DECEMBER 2012

DOHA QATAR
Contact: Tel. 9176627139 email: priyapublications@gmail.com

September 16 - 30, 2012

Volume 2 Issue 9 Rs.10

LAND iNvEsTMENT

DEMANd FOR PLOTS STABLE

There has been a consistent demand for plotted development projects in Chennais suburbs, says V Nagarajan
nlike in other cities globally, Chennaiites are betting on investment in land as it appreciates much faster than other assets. Those who have wisely invested in areas like Singaperumal Koil, Oragadam and Sriperumbudur have seen their investments doubling in a span of four years, according to industry sources. This is one reason for the sudden surge in the number of land promoters and projects in suburbs. Industrial development, impending large township projects, improved connectivity levels, infrastructure development and transport network have significantly contributed to the spurt in land prices in

suburbs and peripheral areas. At the same time this has brought in unscrupulous elements in the society to grab prime lands

through dubious methods. But for the timely intervention of Chief Minister J Jayalalithaa, this menace would have gone unchecked across the state. There has been a consistent demand for developed plots in and around Chennai, according to land

developers. A number of projects coming up in suburbs have seen the prices doubling in a span of just four years in select areas. Despite the stringent norms for plot loans, investors are pooling resources from other avenues to deploy in plotted development projects as they are convinced that land appreciates much faster than in suburbs. continued on page 2

RENTALS STABILISE
hennais office market is likely to record absorption of close to 2.7 million sqft space at the end of third quarter this year. As of now the market is said to be flat and there is no further increase to last years activity levels. The market predominantly driven by the demand from IT/ITES sector as only this sector requires office space beyond 30,000 sqft per floor plate. For start-up companies, typically the requirement revolves around 5,000-20,000 sqft depending on the type of sector like banking, financial institutions or insurance. According to property consultants, vacancy levels are reducing now and rentals are either stabilising or inching high in select areas. Yield to investors remain the same and range from 8 to 11 per cent per annum depending

OFFicE MArT

DEMANd FOR PLOTS STABLE

There is another reason for this sudden shift in trend. With the urban land, input and labour cost soaring, mid-segment people are unable to invest in housing. In order to overcome the spiraling prices and inflationary pressures, investors are convinced that land as an investment would be a best bet in the long-run for reinvestment in housing at an appropriate time. In plotted development projects, location plays a key role while opting for such investments. The DTCP approved plots are always priced higher than Panchayat approved plots due to flexible norms in the latter in suburbs. This has also aggravated the unhealthy competition in the market where there is fierce competition among hundreds of small time operators. Prices for DTCP approved plots range from Rs 500 per sqft and above in areas like Sunguvarchathram, Padappai, Wallajabad, all 60 km away from the city areas. Land promoters are nowadays offering a combination of services including resale and property maintenance services. This has encouraged NRIs and others migrating to other cities due to work related assignments to invest in developed plots. A few land developers have diversified into construction activities as well which in turn has prompted land owners to build houses. Those looking for long-term investment should focus on land investment as the appreciation depends on a combination of

continued from page 1

Sept 16, 2012

n Chennais office market is likely to record absorption of close to

2.7 million sqft space at the end of third quarter this year

(A fortnightly publication)

C P Bureau

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on the project size, tenant and lock-in period. Investors preference continues to be for projects where vacancy risk will remain low. On the infrastructure front, the industry is expecting improvement through metro rail, discussions on mono rail and improvement to connectivity levels in suburbs and peripheral areas. This will further improve the overall growth of the real estate sector in the city. The commercial property sector is keenly awaiting the green signal from the government to allow usage of IT space

for non-IT sector as the appropriate authorities have already recommended easing the norms to the government for the ailing sector. Once approved, it is expected that vacancy levels will further come down and developers will start generating income from their assets. On the flip side, no new commercial development is forthcoming across the city which is considered as a distressing situation by the industry watchers. There should be a mixed development which will enable diverse sectors to firm up their requirements, said a senior executive with a property consultancy firm in the city. In fact cities like Bangalore have already allowed mixed use developments in select areas across the city. The next wave of demand will be driven by corporates who are consolidating their requirements or relocation or moving into their own BTS premises.

For the first 25 words - Rs 200, Rs 10 for every additional word. Chennai Property is published on 1st and 16th of every month. For enquiries, contact: 26/21 South Mada Street, Sri Nagar Colony, Saidapet, Chennai 600015. Tel. 42043857, 91766 27139, Email: chennaiproperty2011@gmail.com Published by : N Bhanumathy. Editor: V Nagarajan

Chennai Office Mart Rental Indicators

Key Precincts Rentals Capital Value (Rs per sqft/ (Rs per sqft) month) 60-90 9,000 15,000

Mount Road Dr Radhakrishnan Salai Pre-toll OMR Post-toll OMR Guindy Ambattur

70-100 10,000 15,000 35-55 5,000 6,500 25-35 3,500 5,000 40-55 6,000 8,500 25-35 3,250 4,500

Source: Jones Lang LaSalle

Attention : NRIs

Those who would like to receive the tabloid edition may contact : chennaiproperty2011@gmail.com

PRICES FOR DEVELOpED pLOtS IN SUBURBS

Location Singaperumal Koil ECR (Opposite Crocodile Park) Trivellore Acharapakkam
factors, says S Elango, Managing Director, ABI Estates. However, stringent plot loan norms have deterred many investors to enter the market. Leaving the initial period of four years, investors can certainly look forward to an average annual growth rate of not less than 15 per cent per annum from fifth year onwards, says Dinesh Babu, .. The DTCP provides through their websites details of plotted development projects approved and those pending for approval. An investor cell at CMDA provides free advisory services on land related queries on submission of basic data. According to legal experts, all lay outs are required to be approved only by the Town and Country Planning Department. The panchayat does not have the power to approve lay outs. So, any plotted development, without the sanction of DTCP is technically and legally unauthorised. Its not advisable to buy unapproved plots including those that are approved by the Panchayat only, according to a leading lawyer and columnist. While NRIs can invest in approved plots,

Price (Rs per sqft) Price (Rs per sqft) (March 2012) (September 2012) 700 1,000 1,000 975 145 300 525 500 650 400 900 600 950 850 600 700 600 1,000 1,200 1,200 395 500 1,200 250 400 600 700 800 500 900 700 950 850 1,300 800 900 600 - 800

ECR (Beyond Mahabalipuram 30 km)

Sriperumbudur (Near Rajiv Gandhi Engineering College) Sunguvarchathiram Wallajahbad Padappai Oragadam belt Maraimalai Nagar Behind Queensland Tandalam

Note: Prices are indicative only and for DTCP approved plots. They may vary depending on the location, developer and amenities offered in the project.
they are prohibited from buying agricultural land, plantation properties and farmland/ farmhouse except with the prior permission of the Reserve Bank of India. However, they can inherit such properties, sell and repatriate the sale proceeds subject to compliance with the prescribed conditions.

n Through Automated Planning Permission Application Scrutiny

(APPAS) software , complicated drawings will be surveyed in a matter of 30-40 minutes. For the simple drawings, it will hardly take 5 minutes

DC NORMS

SIMpLIFYING BUILdING AppROVAL PROCESS

CMDAS APPAS WILL HERALd A NEW ERA

he Chennai Metropolitan Development Authority (CMDA) receives on average 5-6 applications for special buildings and one application for multistoried building every day. While the developers complain of inordinate delay in the approval process, the authorities counter stating that on many occasions complete documentation do not accompany the application in order to catch the deadline for submitting the application. After a series of meetings with the developers, the CMDA has now come out with a unique software to simplify the planning approval process. In a related development Pune Municipal Corporations e-governance drive has already automated the building plans on similar lines for the past five years. They visited CMDA and demonstrated a few years ago on how the system worked which would be beneficial in saving time, manhours and commuting by the developers. As the software is not readily available and application software has to be built to suit local requirements, CMDA has to outsource it by inviting bids. There are more than 1,000 rule parameters which are to be broken into sub-modules. It took time to understand the complexities involved in the whole system, says official sources in CMDA. They are still trying to fine-tune the software. Basically it works on the colour codes and text. Users manual has already been uploaded on the site which

explains the aims and objectives of the software. Though the colour codes have been reduced to 40 now, efforts still continue to reduce it further as there is scope for further improvement, according to CMDA officials. All that the users should do is to follow the colour codes and texts in the prescribed format including font type and size. A few architects have already tested the software and found it user friendly. The software developed to simplify the planning approval process will continue to run and efforts will continue to make it more user friendly in the months ahead. The moment a CD is submitted by the developer in the prescribed pre-DCR format, it is for the system to determine whether the data is upto the requirements prescribed by the authorities. And DC, OCR calculations will be automatically done by the system. A password will be provided to the users so that they can go the website, download it and use it. They can access the site any time to ascertain the status of their application. If correction is needed, it can be done immediately. The CMDA is still studying the security aspect of it as well. The consultant is in the process of fine-tuning the security aspects for uploading it on the website.

In a major drive to simplify the building approval process, CMDA has introduced a software that will ease the hardship faced by developers so far while submitting applications, says V Nagarajan
prescribed FSI norms. This is considered as the most crucial part in the software as only this task takes considerable time. The CMDA has ensured to go live with the files after trial run of over 100 CDS with timings and drawings. Initially there was no pick up as developers did not submit the drawings in the prescribed format for the test run. In order to train the developers representatives, in-house training has been imparted and four batches have so far been completed. As a follow up exercise, CMDA will now approach the Institute of Architects to arrange for a similar training exercise. After the test run is over, CMDA will formally launch the APPAS software which is likely to take another 1-1.5 months. However, developers can submit the applications even now in the new software format. The CMDA feels that considerable time, man-hours and commuting to the authorities would be saved once the implementation is successful.

According to official sources, the moment a CD is submitted it will go for a two way system and even complicated drawings will be surveyed in a matter of 30-40 minutes. For the simple drawings, it will hardly take 5 minutes. The developers will have to adhere to the prescribed format and terms and conditions for computing FSI eligibility. In fact more than 60 files submitted earlier for special buildings and MSB have been checked by the CMDA and it tallies with the

<< SNAPSHOTS >>

CMDAS E-GOVERNaNcE DRIVE In a major drive to simplify the planning approval process, CMDA has embarked on a training exercise to familiarise the users about the APPAS (Automated Planning Permission Application Scrutiny) software. The in-house training has been completed and developers representatives training is ongoing on how to use the software. So far four batches have been completed. The Institute of Architects will be contacted to involve the architects in the training exercise prior to formal launching of the software APPAS system. $1.2 TRILLION INVESTmENT NEEDED fOR SmaRT CITIES It has been estimated that $1.2 trillion capital investment would be required over the next 20 years to meet projected demand in Indian cities. By 2050, it is estimated that 70 per cent of the global population would live in cities as people migrate to urban areas for better opportunities. This would mean that cities need to be planned in a way to effectively handle the situation. Technology can be used to support the system and transform the cities. RETaIL REaL ESTaTE TO HIT US$180bN bY 2020 According to Jones Lang LaSalles global retail real estate report, annual investment volumes in retail real estate could hit US$180billion globally by 2020 due to increasing cross-border activity, showing growth of around 50 percent on the projected volumes for 2012 (US$110-125bn). Retails overall contribution to real estate investment is expected to sit at close to 30 percent over the remainder of this decade, an increase from the 24 percent last decade. Growth markets are projected to account for around one-quarter of global retail investment by 2020, compared to less than 10 percent today. By contrast, established markets will decline from 83 percent to just above 60 percent. China and India top Jones Lang LaSalles Retail Real Estate Momentum Index which identifies the top 20 countries with the strongest momentum in retail real estate globally. SUpREmE COURT JUDGmENT IN SaHaRa INDIa REaL ESTaTE CORpORaTION LTD The Supreme Court in its most anticipated judgment of recent times has directed the Sahara Group and its two group companies Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) to refund around Rs 17,400 crore to their investors within three months from the date of the order with an interest of 15%. The Supreme Court while confirming the findings of the SAT has further asked SEBI to probe into the matter and find out the actual investor base who have subscribed to the Optionally Fully Convertible Debentures (OFCDs) issued by the two group companies SIRECL and SHICL. BUILDER LIabLE fOR waTER SEEpaGE pRObLEmS Builders very often carry out sub-standard construction work. As a result, there are leakages seen in building(s). When a flat buyer complains about the leakage, builders not only avoid taking remedial action, but even try to blame the buyer, saying the leakage is due to damage caused while carrying out the interior designing of the flat by the buyer. In a recent judgment, the National Commission has held the builder cannot escape his liability by coming up with such excuses. (Source: Business Standard)

SEMINAR ON REALTY 2012

OCtOBER 2012
A 1-day seminar on realty scenario, government policies, market outlook, project funding, growth areas, potential sectors, marketing abroad and tax planning. For details regarding sponsorship and participation contact Priya Publications.

Organised by:

Priya Publications, Chennai

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Sept 16, 2012

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A CATALYST FOR RETAIL GROWTH

he recent decision by the Government to allow foreign direct investment in multi-brand retail is understandably the talk of the town. There are various points of view regarding the impact it will have on the retail sector in specific and the Indian economy in general, but the decision is a big step in the direction of strengthening organised retail in the country. To get the complete picture, it is important to understand the situation which exists currently and how the new regulations are going to change the retail landscape. Till recently, FDI in retail (except under single-brand product retailing, with conditions) was not allowed in India. In other words, for a company to be able to get foreign funding, products sold by it to the general public needed to be of a single-brand. The government has now opened a gateway for foreign funding into the sector. In 1997, FDI in cash-and-carry (wholesale) with 100% ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51% investment in a single-brand retail outlet was also permitted in 2006. FDI in multi-brand retailing was prohibited in India. This was changed to increases FDI in single-brand retail to 100% while creating a path for FDI in multi-brand retail to the tune of 51%. Cities with populations of more than 10 million are eligible for this. With the recent announcement, 51% FDI has been permitted in multi-brand retail - with certain caveats, and also subject to final the approval from respective states to allow implementation within these states. There are still some apprehensions on how this policy will be implemented due to the given caveats. However, it does signify a strong positive outlook for this sector. The retail sector in India has been plagued with problems at all the areas of its life cycle back end, technology, supply chain, real estate and human resources. There has been a lack of investment in all of these areas. Consequently, the retail sector has not been able to match the pace of other growing sectors in India. There has been a lack of investment in the logistics of the retail chain, leading to an inefficient market mechanism. Lack of storage

FDI iN RETAiL

FDI in retail will open up immense opportunities in the medium and long term, as the demand for quality real estate will rise leading to better storage and transportation infrastructure, technology and supply chain operations, says Pankaj Renjhen
of Indian producers in all the segments. In the light of above, it would be prudent to encourage FDI in retail further. Of course, sufficient consideration should be given to the interests of SMEs, farmers and consumers while finalising this decision. With this move, along with the caveats, the government has indeed taken an important step. From a retail real estate point of view, it will open up immense opportunities in the medium and long term, as the demand for quality real estate will rise. Currently, some retailers are cash-strapped and this will provide a sort of bail-out option to them. Overall, the investment by local and new international retailers that are likely to flow into the sector will definitely also take the form of investments into real estate at the front end in terms of retail store spaces and of the back end in terms of better quality warehouses. The new international entrants will be willing to take longer term bets and invest in stores which will be sustainable over the long haul. Competition will increase as Indian retailers shape up and intensify their expansion plans - which had been fairly low over the past few years. Also, it will increase the interest and confidence level of real estate developers to set up quality shopping centres. They now have reason to set behind them their experiences post 2008 and can once again consider investing in this asset class with a clear vision to long-term profit.
Mr Pankaj Renjhen is Managing Director - Retail Services, Jones Lang LaSalle India

LISt OF ONgOINg RESIDENtIaL pROJECtS IN COImBatORE (COmFORt hOmES)

Developer Location Type of property IT Corridor, Opp. Kumaraguru College, Atthipalayam road, Off Sathy road 3 BHK luxury apartments (112 nos.) 2040 - 2140 sqft. Price: Rs 59.50 lakh for 3 BHK 2040 sqft. Price: Rs 60 lkh for 3 BHK 2140 sqft. (Includes registration, deposits, corpus fund, infrastructure fees, service tax and covered car parking). Ayyappanthangal Near Porur Saibaba Nagar Pallikaranai 2 BHK (Rs 32 lakh onwards) 3 BHK (Rs 40 lakh onwards) 2 BHK (Rs 34 lakh onwards) 3 BHK (Rs 45 lakh onwards)

Sreevatsa Real Estates Pvt. Ltd. Phone: 94433 41901, 94430 57285 www.sreevatsa.com

Sept 16, 2012

n The country will flourish in terms of quality standards and consumer

expectations, since the inflow of FDI into the retail sector is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments

REALTY DATA
ChENNaI RESIDENtIaL PROpERtY PRICES SUBURBS Location Apartment price (Rs per sqft) Ambattur / Thirumullaivoyil 3,300 3,400 Injambakkam (ECR) 4,850 Medavakkam 3,000 - 4,200 Porur Gardens 4,450 Manapakkam 6,300 Gerugambakkam 5,200 Chrompet 3,900 4,000 Gudavancheri 3,000 - 3,300 Porur 4,500 (for apartments) 6,200 (for villas) Kattupakkam (Near Porur) 2,900 Royapuram 6,850 Oragadam 2,200 Madipakkam 4,000 4,800 Velachery 7,500 Vandalur 2,500 Jameen Pallavaram 3,800 Mogappair West 4,000 ChENNaI RESIDENtIaL PRICES IT CORRIDOR (OMR) Location Apartment price (Rs per sqft) Kelambakkam 3,200 Karapakkam 7,200 (for villas) Thaiyur 3,300 Egattur 5,100 - 5,700 ChENNaI PROpERtY PRICES CItY aREaS Location Apartment price (Rs per sqft) T Nagar 15,000 Note: Prices quoted above are indicative only and for select ongoing residential projects in specified areas. They may again vary depending on the developer, location, specification and amenities offered in the project.

infrastructure has been one of the most alarming of these infrastructure gaps. The technology being used in Indian retail is largely obsolete and does not meet international standards, resulting in poor efficiency at the supply side and average consumer experience on the demand side. Intermediaries often bypass the mandi norms and their pricing lacks transparency. The public procurement and distribution system calls for a lot of improvement. In spite of heavy subsidies, overall food based inflation has been a matter of great concern. FDI will be a powerful catalyst to the required growth in the retail industry and, in long term, will prove beneficial to all the major stakeholders. The new policy can benefit both foreign retailers and their Indian partners. The benefits to foreign players will be access to local market knowledge and an increased consumer base, while Indian companies will benefit by global best management practices and technological know-how. There will be investment in storage and transportation infrastructure, technology and supply chain operations. The increased flow of capital, if used effectively, will benefit both the farmers and the consumers. Farmers will benefit from the better price indexing and direct selling to the retailer. The consumer, in addition to having a better shopping experience, will benefit from the competition and the resultant reduced prices. The real estate retail industry will benefit immensely due to increase in demand and increased investor confidence. We can also expect increased transparency in the retail real estate sector. Additionally, the country will flourish in terms of quality standards and consumer expectations, since the inflow of FDI into the retail sector is bound to pull up the quality standards and cost-competitiveness

LISt OF ONgOINg RESIDENtIaL pROJECtS IN ChENNaI

Developer Location Red Hills Kolathur Phone: 044 26748888/9898 Email: marketing@rcp192.com www.rajarathnamconstruction. com Type of property 2, 3 BHK villas; 75 units Apartments; 3, 4 BHK exemplary flats

Ambattur Ultramodern exclusive 3 BHK apartments (Thirumullaivayal) 140 units.

Rajkham Builders Pvt Ltd. Tel. 23727954 / 24724113 Email: marketing&rajkhambuilders.com www.rajkhamakashganga.in

n According to Jones Lang LaSalle, annual investment volumes in retail real estate

could hit US$180billion globally by 2020 due to increasing cross-border activity, showing growth of around 50 percent on the projected volumes for 2012

LISt OF ONgOINg RESIDENtIaL pROJECtS IN ChENNaI

Developer Location Padmalaya, near Siruseri Offer Price: Rs 3,056/sqft Type of property Apartments - 2 BHK (915 - 990 sqft) Apartments - 3 BHK (1120 - 1175 sqft) 1071 flats in 5 blocks Basement + Stilt + 12 floors 21,000 sqft Clubhouse.

LISt OF ONgOINg RESIDENtIaL pROJECtS IN ChENNaI

Developer Location Type of property

Poonamallee High Road (36 Carat) Luxury apartments (Crisil rating: 6 star) Tel. 24968811 / 42008811 Email: marketing@akshaya.com Maraimalai Nagar (Metropolis) OMR (January) Urapakkam (The Belvedere) Coimbatore: Orbit 11 Apartments (Crisil rating: 4 star) Apartments (Crisil rating: 5 star) Apartments (Crisil rating: 6 star) Apartments

Phone: Mobile: 7299449933 Tel. 044-66343536 Email: info@realvalue.in www.realvalue.in

Neelkamal, OMR, on the Apartments - 2 BHK (885 - 940 sqft) main road, Opposite 559 flats in 5 blocks. Siruseri SIPCOT IT Park Stilt + 19 floors. Price on request. Few flats available in Phase II.

Mount Poonamallee Road, Porur

Apartments: (1, 2, 3 & 4 BHK) 20 residential towers comprising 33 blocks (G+16 floors).

Prestige Estates Projects Ltd. Tel. 28154088 / 28154090 Call: Sony Dhiraj on 9840055371 Email: sales@kgbuilders.com

200 byepass road Luxury apartments; Phase 1 sold out; Phase 2 (Off Poonamallee open for booking. 2 BHK: 925-1000 sqft. High Road) 3 BHK: 1085-1400 sqft. Sriperumbudur Luxury service apartments (Behind Hyundai) Poonamallee 2, 3 BHK apartments Velachery Villa apartments 3 BHK Medavakkam Mogappair 2, 3 BHK luxury apartments 2, 3 BHK apartments

Kelambakkam Villas (42 units); Rs 3 crore Pudupakkam Highrise apartments (612 units); Siruseri IT Park Rs 3,400 per sqft. Model unit ready. Housing Board, Korattur Apartments; 156 units, Rs 8,500 per sqft.

Phone: 044 42113461/71/81 www.greentree.com

Near Ambattur bus stand IT Business Park On 200 ft road in Ambattur (1.5 lakh sqft.) Office, retail.

Polivakkam, Tiruvallur Lowrise houses; 180 units approx. Rs 2,000 per sqft.

RAGHAV REALTY offers

Tel. 42043857 / 91766 27139 Email : raghavrealty@gmail.com
Location BANGALORE Near KR Puram Luxury and superluxury Type A: Plot area: 6300 sft SBA: 7000 sqft Australian style villas. Type B: Plot area: 3300 sqft; SBA 5100 sqft. Old Madras Road (4 km from 74 apartments with Indiranagar and 10 minutes drive commercial space and away from ITPL in Whitefield) modern amenities Type of property Area (in sqft)

Phone: 044 2499 7890 - 94 email: antony@puravankara.com

Kelambakkam Swan Lake Residential Community on 10.5 acres S+14 floors Pallikaranai Windermere Residential community on 55 acres S+7 floors

2 BHK (1275 - 1330 sqft.) 2 BHK + Study (1549 / 1579 sqft.) 3 BHK (1698 - 1805 sqft.) Apartments. 3 BHK-Regular (1922 1944 sqft.) 3 BHK-Large (2126 2162 sqft.) 4 BHK (2691 2712 sqft.) Apartments.

Sobha Developers Ltd. Tel. 28331901 / 02 HYDERABAD Kompally Ultra luxury villas with 4, 5 BHK with swimming pool, a range of amenities in childrens play area, party area, etc. a gated community development

Near Ramachandra Luxury apartments: Hospital, Porur 1 BHK 595 to 605 sqft 2 BHK 1311 to 1542 sqft 2 BHK+study 1368 to 1522 sqft 3 BHK 1575 to 1735 sqft Near Chettinad Hospital, Luxury apartments Kelambakkam Block 1: 3 BHK (SL) 1945 to 2163 sqft (52 nos.) Block 2: 3 BHK (L) 1655 to 1775 sqft (156 nos.) Block 3: 1 BHK (L) 536 to 549 sqft (140 nos.) Block 4: 2 BHK (L) 1336 to 1402 sqft (104 nos.) Block 5: 2 BHK (L) 1336 to 1402 sqft (104 nos.)

Readers are recommended to make appropriate enquiries and obtain professional advice before entering into any commitment with regard to any advertisement published in this publication. Priya Publications does not vouch for any claims made by the advertisers. The editor, publisher, printer and owners of Priya Publications shall not be held liable for any consequences arising out of such claims not honoured by the advertisers.

DISCLAIMER

Ramky Wavoo Developers (P) Ltd.

Kelambakkam Luxury apartments (CRISIL rating : 5 star) 3 BHK; 1350 sqft. only 96 apartments. Vedanthangal Farmhouse plots - 1/4 acre Rs 150/sqft. Nungambakkam 3 BHK, only 11 apts. Ready for occupation.

Sept 16, 2012

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SUCCESSION PLANNING

IF THERE IS A WILL, THERE IS A WAY

If you do not make a Will, the rules of succession of your community determine the laws of inheritance, says Vatsala Dhananjay
administration is similar. It establishes conclusively the validity of the will and of its execution by the testator without force, fraud or undue influence and of the testamentary capacity of the testator. Where a competent court of the country of domicile of the deceased testator has granted probate or otherwise given a decision on the validity of the will, then letters of administration may be granted in India if a properly authenticated copy of the will is produced. A prima facie proof that some foreign court has adopted the document is sufficient. It does not matter that the form of approval should be the same as that of ones own country. It serves as an ancillary grant in order to give efficacy to the grant already made. Registration of Wills: A will is not a compulsorily registerable document. Registration of a will with the sub registrar is purely optional, with one exception. When a Non - Hindu having close relatives wishes to bequeath his property to any religious or charitable institution, he should a) survive for at least 12 months after making such a will and b) the will should be deposited (not registered) within 6 months of its execution with the concerned sub registrar. Otherwise the bequest to charity will not take effect. Muslim Wills: Any Muslim of sound mind he following are the rules governing the making of a will, probate, interpretation, etc. for different communities in India. Every testator (the only exception being Muslim testators) shall comply with the following requirements of a valid will. (1) It should be written but no specific format is required. (Oral will or Privileged wills are allowed only for soldiers / airmen in warfare, and mariners and Muslims) (2) It should be signed by the testator (or signed by someone else under his direction along with the mark of the testator) and (3) attested by two witnesses who have seen the testator sign/ mark the will. The bequest should not contravene the rules against perpetuity, accumulation and the residuary rule pertaining to unborn person. An impossible condition or an illegal or immoral precondition will also make the bequest invalid. In the event of any mistake or ambiguity in the will, the intention of the testator and the whole of the document are taken into account by the courts. The rules of interpretation of wills take up a large part of the Act. I have chosen not to deal with contingent bequests, onerous bequests, conditional bequests, and directions on enjoyment as I have not commonly seen them in practice. The current position is that probate of wills is required only for a) wills made by Hindus in respect of properties situated in the former territories which used to be governed by the Lieutenant Governor of Bengal (present provinces of Bengal, Bihar, Orissa and Assam) and the local limits of the (original civil jurisdiction) High Court of Bombay and Madras (now Chennai), i.e. the towns of Bombay and Madras and b) for wills made by Parsis. No probate is compulsory any longer for Christian wills and for all other wills made by Hindus and other communities in India. The requirement for probate for Christian wills stands amended by Parliament in 2002. Wills made by Christians need not be compulsorily probated anymore. It may be noted that a large number of wills are made without appointing executors or administrators in India. Letters of Administration: If a necessity is felt to appoint an administrator for the estate in some cases 1) where the testator has died without leaving a will or 2) where no executor was appointed in a will or 3) where the executor so appointed refuses to act, (the functions and duties of an administrator being more or less similar to that of an executor) then an application may be (optionally) made to the competent court. The power of the executor is derived from the will while that of the administrator is derived from the court. Also, probate is granted to an executor appointed in the will but letters of administration can be granted to anyone of the beneficiaries or legatees of the testator (again depending on the community to which the deceased belonged) or to a creditor to whom the deceased owed money. Application for probate or letters of administration can be made within three years after the testators death, though delay after this cannot be an absolute bar of limitation and must be explained. The effect of granting probate and letters of (in some sub sects, even a minor who can ratify the will on attaining majority) can make a will; Only 1/3rd of the estate of a Muslim can be the subject matter of his will. The balance 2/3rd must be distributed according to the rules of succession. It should be noted that only a bequest to a non heir up to 1/3rd of the total estate, is valid. A bequest to an heir to the extent of 1/3rd share cannot be upheld unless the other heirs consent to it. When a Muslim makes his will in writing it needs neither signature nor attestation. However as long as the provisions of The Indian Succession Act, 1925 are not in conflict with the recognized canons of Muslim law, the Act shall apply to wills made by Muslims. It must be noted that any Muslim who has got his marriage registered under The Special Marriage Act shall come under the binding requirements of The Indian Succession Act and the rules of Muslim law as found in religious Muslim texts will not be applicable in such a case. P.I.O. and N.R.I.: Bequests made to Non Resident Indians (N.R.I.) and Persons of Indian Origin (P.I.O.) pertaining to property in India (not being a farm land or agricultural land or plantation property) is valid and binding and no restrictions are imposed and their status is on par with Indian citizens. People who cannot own property in

Sept 16, 2012

n A Will can simply be revoked by destroying it and a new Will or codicil

can also be made revoking the former. A registered will may be revoked by a registering a fresh Will or by revocation

India: Citizens of Bangladesh, Sri Lanka, Pakistan, Afghanistan, China, Iran or Bhutan cannot acquire property in India except by way of lease not exceeding five years without prior permission of the Reserve Bank of India. Other Foreign nationals can acquire immovable property in their individual capacity only by a) way of inheritance or b) if they are residents in India and not otherwise. Separate rules on owning immovable property apply to corporations, partnership firms and other such entities, which are outside the scope of this article. Maintenance of wife, children, parents: In the case of a Hindu male, an obligation is cast to maintain aged / infirm parents, minor sons / unmarried daughters and widowed daughter in laws (and now a live in female partner can also claim maintenance according to the recently passed Domestic Violence Act) and it is a statutory obligation as per the Hindu Adoptions and Maintenance Act, 1956. If one of the dependents inherits the property of a Hindu male to the exclusion of the other dependents, then the obligation to maintain such excluded dependents falls upon the beneficiary who takes the estate. Revocation of Will: A will can simply be revoked by destroying it. A new will or codicil can also be made revoking the former. A registered will may be revoked by a registering a fresh will or by registering its revocation. A will made by Christian will automatically stand revoked in the event of his marriage subsequent to making of the will. This rule does not apply to other communities in India. Revocation results not only from the first marriage but any subsequent marriage. In general since there are no taxes on properties inherited by a will or by way of gift or by succession. Indians do not resort to creation of trusts / estate planning to avoid tax. If an Indian does not make a Will, then in general, the rules of succession of his community determine the laws of inheritance.

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PBR Associates, a leading law firm in Chennai, will answer readers queries on legal issues. Readers should be brief while sending their queries by email to chennaiproperty2011@gmail.com
including those that are approved by the Panchayat only. I invested in a real estate development company floated by my friend and we have terms of agreement between both of us. There is now difference of opinion and I would like to exit the project. What is the best way to opt out of the partnership? There is no arbitration clause included in the agreement? R Udhya, Besant Nagar Though you have mentioned that you have terms of agreement between you and the other party, you have not stated if it is in writing and whether its a partnership deed duly registered with the Registrar of Firms. You are bound by the terms of your agreement and if any exit option is available you are at liberty to exercise it. If not, you need to work out an arrangement whereby you give up or release all your rights for any mutually agreeable terms and exit the business and such an agreement can be reduced to writing also.

What is the difference between DTCP approved plots and Panchayat approved plots while investing in plotted development projects? Does it mean that we should avoid Panchayat approved plots? What are the inherent risks involved? Kindly clarify. R Muthuraman, Teynampet All lay outs are required to be approved only by the Town and Country Planning Department. The panchayat does not have the power to approve lay outs. So, any plotted development, without sanction of DTCP is technically and legally unauthorised. Its not advisable to buy unapproved plots

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n Adapting simple methods like placing lotus urns or painting will enhance
the feel of living space and in turn make the mind receptive to the cosmic forces or unseen energies which maybe mystic but for sure work wonders in our lives

FENg sHui

WHAT MAKES LOTUS TICK?

Lotus flowers bring out the softer virtues of mankind, create an ambience and harmony and usher in gentle good energies into the home, says S BS Surendran
ard work, intelligence and dedication are the main factors which one could attribute for success in all that we do, hence many do not believe in luck. Quite a few get worked up even when someone comments or compliments them by saying You are lucky as it makes them think how my success can be attributed to a factor called luck when I have worked so much. On the other hand believing in luck frees a person from worrying about things which are beyond control and opens the mind to a vast cosmic force which one cannot always understand easily. In short believing in luck believes that life is a series of opportunities that are not necessarily there for the reasons we think they are. You miss a flight or a business opportunity and you may say it was bad luck or improper planning but may be it happened for another reason, perhaps on the next flight you may encounter someone who changes your life for better. To enhance the possibilities of good

happenings in our life and activate a flow of positive chi around our living space, we can have lotus flowers in urn or ponds as lotus is the worlds most popular flower and is strongly associated with good Feng shui. In Japan viewing lotuses in full bloom during the fall has been a favorite pastime. Autumn is the time of the lotus in many parts of China and Japan and this is the season when these flowers can be seen across mountain lakes, domestic urns, rice fields and parks. Lotus flowers bring out the softer virtues of mankind, create an ambience and harmony and usher in gentle good energies into the home. Known as Nelumbo Nucifera, lotus flowers especially in colours of pink and white are considered sacred too. Hanging a painting of lotus in the living area of the home except in bedrooms is considered a potent energiser. It supports and brings resilience to the family and despite hard times in a persons life, the family is said to thrive with the presence of the lotus. Numbers

do have significance and hence having at least three stems of bloomed lotus is considered good. The number three is mystic in its own way. Three represents past, present and future; it also signifies mind, body and spirit no doubt during celebrations we often say three cheers. The Chinese believe that the third day of the new moon is a lucky day and the moon which symbolises many things in esoteric studies has three phases, the waxing, waning and full moon each with its own plethora of meaning and luck cycles. Taoist Feng Shui also mentions about lucky money, wherein carrying a coin minted in a

leap year which has come to your possession during the process of circulation is said to activate good luck in financial matters and is considered a lucky charm. One could pass it off as a superstitious belief and some could find it to be a potent good fortune enhancer, but adapting simple methods like placing lotus urns or painting for sure will enhance the feel of your living space and in turn make the mind receptive to the cosmic forces or the unseen energies which maybe mystic but for sure work wonders in our lives.
Mr Surendran is an accredited master Feng Shui consultant and traditional Vaastu practitioner.

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ith the continuous innovation in providing a range of amenities reaching a new high in housing development, it doesnt take much time nowadays to build swimming pools in your own courtyard. Even sprawling apartment complexes can have it on their terrace to beat the high summer heat in Chennai and the inmates can enjoy a healthy lifestyle even in the midst of growing urban agglomeration. The novel concept developed by Australian entrepreneurs is being introduced in India lately. On the safety front, it has been designed in such a way to prevent kids and children from falling into it, a vital factor that is assuming prime importance nowadays. In todays scenario, installation of a 500sqft concrete pool costs anywhere between Rs 10 lakh and Rs 12 lakh with all the lteration equipment, whereas these portable Australian

There is good news for tness freaks as portable swimming pools can be now built in just three days in the courtyard, dismantled and assembled elsewhere, reports V Nagarajan
swimming pools? The swimming pools can be built in just three days. Sounds incredible but it is true. One can swim on the fourth day with all the comforts that go with a normal swimming pool. What is more they are also portable and one can dismantle and assemble June is 1, 2012 it elsewhere. That is not all. There more continued on page 2

Volume 2 Issue 3 Rs.10

pools going by the market name Stern Pools cost just half the amount ranging from Rs 4.5 lakh to Rs 6 lakh with all the associated equipment. What is the lead time involved to build such

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DEVELOPMENT CONTROL NORMS

RESIDENTIAL DEVELOPMENT

REALTY SECTOR HIT AS GUIDELINE VALUES SOAR

The real estate sector is caught in a quagmire due to sudden and abnormal hike in guideline values and the worst hit sector will be affordable housing segment, surveys V Nagarajan
t a time when land values started stabilising in and around Chennai, the Tamil Nadu government has increased the guideline values for land registration purposes by hiking the values from 60 per cent to 300 per cent effective April 1. This has sent shock waves among the industry and the land owners and property developers are at cross roads now. absorb the hike in stamp duty. In vibrant commercial areas like Whites road, the guideline value soared to Rs 16,000 per sft which is well above the market value bringing stiff resistance from the buyer, say property consultants. In other city areas like Abhiramapuram, the value for residential area is more than the commercial value (see table). The state government in their anxiety to curb the unaccounted money in real estate transaction has sent a wrong signal to the market which will adversely impact the overall housing development. Land transactions are not happening nowadays not because of the steep hike in guideline values alone but due to the cascading impact of RBI restrictions on bank funding to realty sector, uncertainty in FDI investment, global meltdown, higher expectations of PE funds and soaring land value, according to industry sources. What has aggravated the whole scenario further is the sudden hike in guideline values. The

Land transaction and impact of guideline values

Land transactions will come down and property prices will go up. Affordable housing segment will be hit as there is no encouragement for developers with reduced margin and lack of infrastructure facility. The worst hit are middle and small level developers who have been made to fend for themselves with a few options for development. Citing the hike in guideline values, landlords are demanding higher land prices. In certain locations, guideline values are more than the market values. continued on page 2

CMDA TO ALLOW MULTILEVEL PARKING IN HOUSING COMPLEX

In order to ease vehicle congestion, CMDA has suggested to the government for car parking in the upper oors for non-IT buildings, says V Nagarajan
hennaites are increasingly facing the problem of parking and even roads are not spared for use as parking slots in city areas. On a representation from the Credai to modify development control regulations, the CMDA has recommended to the government for allowing car parking in the upper oors for non-IT buildings. So far parking in the upper oors above stilt oors was permitted in the case of IT buildings and hence the need to amend the development regulations. At the same time the authorities prefer to prevent unauthorised conversion of parking space for other purposes either by way of collecting security deposit or any other means. There are advantages while permitting parking space in the upper oors. The cost of construction may be reduced when compared to the construction of basement oors apart from limitations in digging. In some areas, the water table may be very high that will act as a barrier for construction of basement any deviations/violations, the sanctioning/ enforcing authority has the powers to dispose the handed over portion by way of auctioning. A certication for the designs to withstand the earthquakes, for the upper parking oors from the Class I structural engineer may also be insisted since Chennai happens to be in seismic zone III. Industry sources say that this will go a long way in easing the vehicle parking congestion in residential complexes as well make way for the vehicular movement on roads in residential localities. The plan will have to be now approved by the government before amendment to DC rules.

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According to ofcial sources, though the INDIA revenue for the two month period was up by Rs 100 crore, the volume of transaction PROPERTYhas come down drastically. Industry sources say that city area transactions fell through SHOW due to reluctance on the part of buyers to

The governments reduction in stamp duty by 1 per cent has not gone well with the industry when the guideline values were raised to abnormal levels.

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SURGE IN NRI DEMAND

Rupee volatility, competitive lending rates abroad and favourable exchange rates have all nudged NRIs to plunge into real estate investment in Chennai, surveys V Nagarajan
he rupee volatility against US dollar and other linked currencies, overseas institutions lending at 4 per cent and favourable exchange rates have all convinced NRIs/PIOs to take advantage of the instant opportunity and plunge into real estate investment in Chennai. In a nutshell it has become 20 per cent more affordable for NRIs/PIOs due to rupee parity rates alone further aggravated by a combination of factors

RESIDENTIAL PROPERTY

crore. This is apart from the surge in demand for developed plots and villas in and around the city. However, leading land developers do not agree with the view and see no perceptible shift in trend for demand. The quantum of enquiries from NRIs alone for investment in apartments is up by 20-30 per cent over the past 3-4 months. Most of the enquiries are from US, Gulf and Far Eastern countries. Due to the impending holiday season in July and August, most of the enquiries would get translated into sales during the coming months, said continued on page 2

at home, thanks to our babus at the ivory towers of Delhi. Leading developers have reported a quantum jump in the number of enquiries over a period of 3-4 months. According to industry sources, most of them prefer built units for ready occupation of their parents or relatives and some are looking for periodical return on investment. They are willing to pay the extra premium to get the built units over ongoing projects in and around the city. The preferred price range for apartments varies from Rs 30 lakh to Rs 1

oors. The CMDAs monitoring committee of the regulatory authority while approving the suggestion felt that a charge shall be made by the developer/owner for the undivided share of the land/premises transferred by way of sale deed or lease deed executed. The covered car parking may be allowed upto ground plus three oors above ground level in cases of residential and commercial developments and the same shall not be included in the computation of FSI and coverage. A parking security deposit at Rs 500 per sqm will be collected and refunded after three years of occupation of the building. MULTILEVEL CAR PARKING Before issuing planning permit, the applicant shall furnish a RULES FOR COMPLIANCE notarised afdavit that a charge will be made in the sale deed of ats by the land owner or the GPA holder as the case may be, that parking spaces provided in the premises shall not be converted into any habitable space at any point of time. Otherwise the building will be liable for enforcement action by CMDA or the agency designated by it as per the provisions of Tamil Nadu Town and Country Planning Act. For effective enforcement, the Hyderabad Building Rules may be followed. It provides for handing over of ground oor area or rst oor or the second oor area as the case may be or 10% of the total built up area, whichever is less, to the sanctioning authority by way of notarised afdavit after the setbacks and open spaces are demarcated on site and if there are

April 1, 2012

Volume 1 Issue 22 Rs.10

HOME LOANS BECOME COMPETITIVE

There is good news for homebuyers who are already reeling under the hike in guideline values for registration and service tax due to reduction in lending rates by select banks, reports V Nagarajan
bonds which provides renance to housing nance companies. The external commercial borrowings have been allowed for low-cost housing with the result developers will be able to lower their interest costs now as there is a signicant difference in the interest rates between India and other countries. Further the extension of 1% interest subvention scheme for home loans upto Rs 15 lakh for affordable housing continues for another year which will benet homebuyers in the unit prices upto Rs 25 lakh.

HOUSING FINANCE

ith the soaring property prices aggravated further by the Tamil Nadu governments recent hike in guideline values for registration and the Union Budgets hike in service tax from 10.3% to 12.36%, homebuyers can now breathe easily. There is some consolation by way of reduction in home loan lending rates not only for the new borrowers but also for the existing borrowers. A number of banks have reduced the home loan lending rates by 25 basis points to 75 basis points depending on the loan amount and repayment tenure. The move triggered by the countrys largest bank, State Bank of India, has made other banks to follow suit. In fact SBI has decided to allow existing borrowers to reprice their loans at lower rates but the switchover will be subject to payment of a small fee at one per cent of the outstanding loan amount. A signicant development is that there is no cap set on the loan tenure or the amount of the loan to reprice their loan to a lower rate nor is there any prescribed time limit set for the switchover to the new option. Even a general rate reduction is anticipated at any time, according to banking sources. Following SBI, IDBI Bank has reduced its

oating home loan rates on new loans upto a maximum of 75 basis points. The reduction in lending rates depends on the loan amount and it is higher for larger loan amounts. Canara Bank has slashed home loan rates ranging from 25 basis points to 75 basis points depending on the repayment tenure. It will charge from 10.75% to 11.25% per annum for all tenures and any quantum. There will not be any prepayment penalties. Incidentally, Canara Bank has also waived additional interest of 25 basis points charged earlier for those acquiring a second home. The saving will be Rs 4,606 for a Rs 50 lakh loan and Rs 6,910 on a Rs 75 lakh loan with tenure of 25 years. The revised rates will come into effect from April 2. It is expected that more banks would follow the rate reduction in the coming weeks. While some of the banks may await RBIs annual policy statement on April 17, others may join the bandwagon to stop the exodus of existing customers to other institutions, say industry sources. As regards housing nance companies, there is no immediate conrmation from the leading players who are considering the market movements in view of the erce competition prevailing at present. The Union Budget for 2012-13 has already provided sops that would give a boost to the home loan sector. The National Housing Bank has been allowed to raise Rs 5,000 crore through tax free

A DAiLy NEWspApEr HoLDs THE ATTENTioN oF THE rEADEr For NoT MorE THAN AN Hour or TWo. THE ONLiNE viEWEr is A virTuAL BuyEr. HE NEEDs To BE rEAssurED AND sEEKs iNForMATioN AND cLAriTy FroM HArD priNT. CHENNAi PropErTy givEs you A coNFirMED rEADErsHip oF poTENTiAL propErTy BuyErs AND iNvEsTors. AND BEsT oF ALL. IT is rEAD THrougH THE WHoLE ForTNigHT. THiNK oF iT As THE REcALL VALuE BuiLDEr. IT is TiME To RELooK AT your MEDiA pLAN MAKE AN iNTELLiGENT CHOiCE. CALL 91766 27139

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Sept 16, 2012

RNI No. TNENG/2011/41336

8
J

TAX PLANNING SIMpLIFIEd

g R N Lakhotia and Subhash Lakhotia ust as rules are important for good living so also there are some golden rules of tax planning. The simple yet effective golden rules of tax planning are: Take full advantage of tax deductions: Various tax deductions are available under the Income Tax law. One should try to avail of the benefit of these deductions for each and every member of the family. The various in vestment options that offer tax rebates should be reviewed keeping in mind various aspects like the age factor, etc. A check-list should be prepared of the various deductions permissible under the Income Tax law. Check whether each and every tax paying family member is claiming these. If special care is taken of this aspect, then it is legally possible to save a lot of income tax. It is suggested that a chart be prepared of tax, deductions and exemptions for every family member of purposes of overall tax planning of the family. It would be worthwhile if a group tax chart is prepared containing details relating to income tax, tax deductions, net taxable income, tax deducted at source, rebate of tax, and, finally, the net amount of income tax paid in the case of each family member. With the help of this one simple chart, you can achieve substantial tax planning, as it will show up those who have not made optimum use of tax deductions. Exempted incomes: There are innumerable incomes under the Income tax law which is exempted from the purview of tax. These incomes are known as exempted incomes. For example, interest income from tax free bonds and any income from agriculture are some items of exempted incomes. There are other exempted incomes also which are discussed in the book. Proper planning of your investments in a way so as to generate tax exempt incomes is another golden rule of tax planning. Dont overdo it Keep tax planning simple: Easy, simple, hassle-free should be the objectives of your tax planning approach. The message which we want to bring to you is that you should adopt tax planning but never overdo it; just remember the key points highlighted in this book which will help you fulfill your tax planning mission without going overboard. Saving tax legally is a reality but only for those who plan their taxes based on such principles. This would also result in avoiding all the worries and tensions as all their incomes, assets and investments are duly accounted for from the point of view of taxation.
This is the concluding part of the article. Courtesy: The Professional Investor

TAXATioN

Owned and published by N. Bhanumathy from No. 26/10, South Mada Street, Sri Nagar Colony, Saidapet, Chennai - 600015 and printed by S. Subburaj at SPS Offset Prints, No.1A, 1st Street, Gopalapuram, Chennai 600086. Editor: V. Nagarajan

Sept 16, 2012

n Check whether each and every tax paying family member is claiming
deduction and if special care is taken of this aspect, then it is legally possible to save a lot of income tax

DOha qatAR - Dec. 2012

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