Reliance – Focus on SEZ Land Acquisition

As stated in the economic times, there is a report that in a major shift in strategy on special economic zones (SEZs) in Maharashtra, the Mukesh Ambani, the leader of Reliance group has decided to buy land outright from farmers, instead of involving any government agency to acquire it. So far the debate on the setting up of special economic zones has been about the role of the Government. Typically a state agency acquires land and then transfers it on first lease to the developer.

Reliance has now begun to buy land directly from farmers. The economic times reports that nearly 80 purchase deeds have been registered in the last few days in Raigad district. The company has paid a stamp duty of around Rs 60 lakh on these registrations. This is an additional cost for the company, which is understood to have paid farmers three times the government-listed rates on direct purchase of land. As per the earlier plan, the Maharashtra government was to acquire land spread in 45 villages for Reliance SEZs at government rates, which comes to a couple of lakhs per hectare, against the market rate ranging Rs 40-Rs 75 lakh per hectare, depending on the location.

The Reliance Group was planning two mega SEZs in Mumbai —Navi Mumbai SEZ and Maha Mumbai SEZ. There are apparently 72 SEZ proposals in Maharashtra alone the fate of which remains unknown due to lack of clarity on land acquisition norms. The delay in the passage of the Maharashtra State SEZ and Designated Areas Act, concerns raised by Congress president Sonia Gandhi on land acquisition and — most importantly — widespread agitation at Singur and Nandigram over forced acquisition of agricultural land by the West Bengal government have resulted in the state government going slow on the plans.

Rent Laws - In Metros

With high-income professionals aspiring for the quality lifestyle, homes that match their refined tastes are hard to come by in cities like Mumbai and New Delhi.
Mumbai and New Delhi have seen rents surge by as much as 30% in the last quarter in up market residential areas. Bangalore registered a 50-60% increase in the last 6 months, but has settled down to 15% since.
Rents in Mumbai city follow a curious pattern. Archaic tenancy laws which favour the tenant have resulted in prime property in South Mumbai in the possession of tenants paying rents at 1940 rates. On the other hand, compact 2-bedroom apartments command rents equivalent to rates in New York and Tokyo. The situation can improve once rent laws change, and premium land becomes available for new construction. Strangely enough, properties commanding the highest rents in South Mumbai are characterized by creaky, termite ridden wooden stairs and antiquated lifts!
The northern suburbs in Mumbai are attracting attention, as they have more to offer in terms of quality lifestyle. However, poor connectivity with South Mumbai, which still houses a majority of the commercial establishments, is deterrent. Real estate experts believe commuters would be willing to travel that extra mile had infrastructure been better.

With the shining of 2007, Realty sector also Shining

First of all
A Very Happy New Year

Realty sector in India is shining rightnow. Year 2006 is really good for the real estate investors.The industry is really happy with the way it is growing; prices are rising and sales are superb. It’s a great time.” It was on this positive note that renowned architect Hafeez Contractor began the ‘ET THINK TURF - PRE BUDGET FORUM 07- REAL ESTATE SECTOR’. Of course, he immediately switched to a more serious issue by talking about the other side of the story - the growing slums in Indian cities and inadequate infrastructure. “Why is it that our cities cannot finance infrastructure? Why is it that our cities cannot house these millions of people living in slums? Why is the existing infrastructure crumbling? Why is it that we are not able to take into account new taxation policies?” These were some of the very pertinent questions that he raised before he turned to his favourite topic of FSI. He said that increasing FSI was one of the important issues that the Budget needed to highlight. “We have to think about how we are going to house the millions of our growing population” he said and suggested that a higher FSI could be one of the solutions to the housing problem.
It was very important for the real estate industry to plan for the future rather than for the present. “The biggest concern has been the sharp increase in prices of real estate. The only way which I feel has worked everywhere and I am sure will work out here is to ensure that supply grows at a pace that is faster than demand. That’s what happened in China, that’s what people have worked towards in different economies and that’s what we need to do here.” He also discussed the overall nature of the industry and the way it functioned. “The amount of approvals that you need to take, the amount of legal hassles that you need to go through to become a real estate developer means that it’s a reserved category for select people who can manage this whole thing. What we need to do is change that. We need to ensure that this whole process is quite transparent wherein different people can get into this. He also said that it was very essential for the growth of the industry to get organised finance apart from becoming more transparent.