IL&FS puts up commercial and residential properties for sale

The debt-laden IL&FS group has further put up its properties for sale to garner funds in order to settle loan dues. It has invited bids from interested buyers for properties (commercial and residential) in Mumbai and one in Kolkata, Properties on sale include a 1,376 square feet residential property located at upscale Malabar Hill beside three commercial properties in Mumbai and one commercial space in Kolkata. It has asked bidders to submit their bids on or before January 15. The Infrastructure Leasing & Financial Services (IL&FS) group has loans due of nearly Rs 91,000 crore. Earlier, it has invited bids to sell its various road, solar energy, and education assets to generate funds. The spree of defaults is continuing with the group, which until Friday said that the company would not be able to service its obligations in respect of the interest of non-convertible debentures due on December 29, 2018.

Source: Business Standard, Tuesday 1 January 2019

Apartment sales in Mum region flat at 3%: Report

Apartment sales in Mumbai Metropolitan Region (MMR) recorded a measly 3% growth in 2018 compared with 2017, stated a Knight Frank India Real Estate report released on Tuesday. Data shows 63,893 flats were sold in 2018 compared with 62,256 units in the preceding year. On the other hand, project launches shot up 220% to 74,363 in 2018 from 23,253 in 2017. The report stated that average property prices decreased 7% in the region in 2018. Among the eight cities surveyed—Mumbai, Hyderabad, Bengaluru, Pune, Chennai, Ahmedabad, Kolkata, and National Capital Region—the report found sales increased 6% in 2018 from 2017 even as 76% more flats were launched during the period. The report said 2018 was “historically the best performing year” for commercial office market with leasing at 46.8 million square feet. In Mumbai, though, supply was 6.5 million sq ft, denoting a 37% year-on-year decline from 2017.

Shishir Baijal, chairman and managing director, Knight Frank India, said, “Mumbai has seen a significant drop of 7% in average prices in 2018, which, coupled with reduced sizes of new launches, has brought down the average ticket size (of flats) in the city.” The number of unsold flats in MMR increased 9% to 1,26,434 in 2018 from 1,15,964 in 2017. “Some developers are tying up with strategic partners/brokers and are offering discounts in the range of 15-30% to clear their inventory,” stated the report. Interestingly, it was affordable houses that continued to drive sales in Thane and peripheral suburbs. Sales in pricier Greater Mumbai under the BMC jurisdiction grew only 1%. Western suburbs were the only market in the BMC region to record a sales growth of 9%.

Source: The Times of India, Wednesday 9 January 2019

Why reduced GST will prove costly for budget home buyers

The government’s plan to reduce 12% GST on the housing to a flat 5% without extending the benefit of an input tax credit (ITC) to developers will increase the price of apartments for low and middle-income groups in most cities. Besides, it could dent the Centre’s housing for all policy as a landed cost for the buyer might increase. However, it would help high-value apartment sales in cities like Mumbai and Delhi. The toll will be more on the affordable housing segment, which enjoys a lower output tax rate of 8% and the benefit of ITC. “Even if GST is slashed to 5%, denial of ITC will result in an increase in the selling price of affordable housing,” said Arun Excello CMD P Suresh, who is predominantly into the affordable housing segment.

Source: The Times of India, Wednesday 9 January 2019

SoBo flat owner evades I-T, in net

An attempt by a Cuffe Parade property owner to reduce the burden of income tax by declaring rent as low as Rs 25,000 has been dismissed by the Income-tax Appellate Tribunal (ITAT). The man rented out the posh property to a bank. ITAT upheld the department’s view that it was an income tax reduction device and also the addition of income of Rs 2 lakh per month as rent from the flat. Jaikishan Vaswani, a non-resident, received an interest-free security deposit of Rs 4 crore from Bank of America and reflected 25,000 as monthly rent during 2009-10, the year for which the matter was heard by ITAT. In an earlier year, the bank had paid him Rs 2 lakh per month as rent.

The I-T department held that Vaswani was compensated for a loss of rent by way of an interest-free security deposit from the tenant. It was merely an I-T reduction device. Also, the deposit was advanced interest-free to family members. Thus, no income was reflected against the deposit. Based on the facts of the case, especially as no plausible explanation was given as regards the drastic reduction in rent, ITAT in its order, dated January 3, upheld the action of the I-T officer concerned to consider Rs 2 lakh per month as rental income for the flat for 2009-10. Since many flat owners give their second home on rent and also seek a security deposit, it is essential to understand the related I-T issues.

Source: The Times of India, Friday 11 January 2019

A jewel in the city’s crown – Powai

Powai is a residential and real estate hub with immense potential. Very few areas in the country can boast of systematic development like Powai. Though it was always a well-known destination, thanks largely to the Indian Institute of Technology (IIT), with time, Powai became a residential and real estate hub with immense potential for further development. While other areas in Mumbai are facing the problem of overcrowding, congestion and burdened civic amenities, Powai offers a breath of fresh air with new residential complexes, growing commercial hub and a skyline dotted with amenities for the next generation. The turnaround in Powai took place following the completion of the Eastern Freeway in 2013, which established a congestion-free link between Navi Mumbai and CST. Then came the monorail, and soon, Powai received recognition as the best micro-market in the commercial capital.

The right mixIn terms of residential infrastructure, Powai is now witnessing frantic development by big names in the industry, which have put up upmarket gated communities full of modern amenities. To cater to the growing population, many important facilities such as educational institutions, hospitals, budget as well as luxury hotels, restaurants, shopping arcades have come up. Resultantly, Powai lake is now teeming with activities and people from all over, who visit the popular water body to enjoy the natural scenic beauty in the overly concretized city. Another important factor that has helped Powai maintain the balance of growth is its ability to attract good commercial development. Today, it is also known as the start-up hub of the city with many young entrepreneurs establishing their offices there. Noteworthy here is the fact that many of the start-ups have been established by IIT-B alumni. At the same time, the old and established, too, have not left Powai behind. So, when residents of Powai say that it is a city within a city, they are not wrong. Powai grew with Mumbai, but at some point of time, it became better.

Source: Times Property, Saturday 12 December 2018

Whose side is MahaRERA on?

In an unusual order, the MahaRERA chief on January 9 set aside the plea of 13 flat buyers who want to withdraw their investments from Bombay Realty’s Island City Centre project in Dadar, stating that a bulk withdrawal like this would jeopardize the completion of the project and impact 520 other flat buyers. The buyers are now contemplating approaching the tribunal. For the complainants, who booked flats in the project around 2012-13, several changes to the plan and reduced amenities proved to be the nail in the coffin. Speaking about the issues, one of the complainants said, “The issue with this ground-plus-65 story tower, which is almost ready, is different from other flat buyers’ contentions. In this case, the plan given to us was changed thrice. All the promises made at the time of booking the flat were not kept. For instance, we were promised a 300 sq ft balcony attached to our flat, and today, when the structure is ready, the balcony has been completely eliminated, and only a small window has been provided for ventilation. The shapes of the rooms are not the way they were assured either.”

Dejected with these broken promises, the buyers approached MahaRERA, where further disappointment awaited them. According to advocate Ramesh Prabhu, who represented six of the 13 flat buyers, each of the flats cost anywhere between Rs 7.5 crore to Rs 10 crore. He said, “MahaRERA chairman [Gautam Chatterjee] is of the view that instead of withdrawing from any project, people should stay on it and ensure that it gets completed. Even in this case, the order is very clearly asking flat buyers to stick to the project and allow the completion of the construction. However, the flat buyers are aggrieved. Hence, they approached MahaRERA seeking justice, but this order is unfortunate, and has not given any justice to the flat buyers.”

Source: Mid-Day, Tuesday 15 January 2019

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