Govt orders special audit of DLF

NEW DELHI: The government informed Parliament that it has ordered a special audit of the accounts of the real estate giant DLF Ltd and would take necessary action after scrutiny.

"A special audit under section 142(2A) of the I-T Act has been ordered in the case of Delhi Lease and Financing Ltd, also known as DLF for the assessment year 2006-07", Minister of state for finance S S Palanimanickam said in a written reply in the Lok Sabha.

The audit report, the Minister said, "is being examined during the scrutiny proceedings, for taking necessary action..."

When asked whether some housing companies had misled the Income-Tax department regarding their income and profits, Palanimanickam said "Yes" and added that the details, which are being collected, would be tabled in the House shortly.

The Minister also clarified that the government has not ordered a special audit of the accounts of the Darbari Lal Foundation.

The income-tax department can order a special audit of the accounts of a company or individual under Section 142 (2A) of the Income-Tax Act in the interest of revenue.


Soruce:http://timesofindia.indiatimes.com/Business/Govt-orders-special-audit-of-DLF/articleshow/4189734.cms

DDA likely to give itself a clean chit

NEW DELHI: The DDA internal inquiry report on alleged irregularities in the draw of lots for housing scheme 2008 is finally ready. It was submitted to lieutenant governor Tejendra Khanna and the Union urban development ministry on Friday. Though authorities remained tightlipped about the contents of the report, sources said it was expected to give the authority a clean chit.

On January 5, the urban development ministry had directed DDA to set up a three member committee to carry out an inquiry in the alleged irregularities.The report which was first sought within three days went through a number of deadline extensions before finally making its way to the L-G's office on Friday. According to sources, the report indicates that there were no irregularities on the part of DDA as far as the draw of lots was concerned. However, the contents of the report will only be made public later.

Meanwhile the economic offences wing of Delhi Police, which has been probing the alleged scam in the allotment process, is still in the midst of verifying the same and identity of every allottee. If indeed the internal report gives DDA a clean chit, then it will be a report on expected lines. Ever since th process came under the scanner, DDA has stoutly denied any wrongdoing on its own part.

The three member committee included DDA finance member Nand Lal as chairman, director vigilance Alok Swarup and deputy chief legal advisor Gupta as members. The UDM at the time of ordering an inquiry had said no one involved in the draw should be a part of the internal inquiry. However, sources indicated that Swarup was very much present at the time of the draw, putting a question mark on the fairness of the report.

Meanwhile, additional commissioner of police (EOW), SBK Singh, said he had no information about the DDA report.

While ordering a high-level inquiry by DDA officials into the alleged scam, the Union urban development ministry in January had also asked DDA not to issue allotment letters to successful allotees. "When there is widespread suspicion about the draw of lots, it is better to clear it through an inquiry. Till the inquiry is complete, physical possession of flats will be not be given," Union urban development minister S Jaipal Reddy had said.

Soruce:http://timesofindia.indiatimes.com/Cities/DDA-likely-to-give-itself-a-clean-chit/articleshow/4163404.cms

Realty funds go slow on raising money

MUMBAI: It's not the best of times for real estate funds. Given the slowdown, they are going slow on raising money from investors - a process referred to as the drawdown option, on account of paucity of investment opportunities.

Typically, a real estate fund works on a commitment from its investors for the amount to be raised. Initially, the fund collects about 20-25% of the committed amount. As and when investment opportunities crop up, funds make a drawdown on investors. Under normal practice, investors get about a month to pay such drawdowns.

Funds are now realising that it has become difficult to deploy money in the current market. This has resulted in a slow down in calling for drawdowns. Over the past 2-3 years, several companies, including India REIT, Milestone Capital Advisors, HDFC and Kotak, raised money from local as well as overseas investors. The ticket size for the domestic funds was between Rs 25 lakh and Rs 5 crore.

Anand Jain-promoted Urban Infrastructure Fund, which had a minimum ticket size of Rs 1 crore, closed its first fund in a year-and-a half. After the rights issue in May last year, the fund has not exercised the drawdown option. In case of Kotak India Real Estate Fund, launched in July 2007 with a ticket size of Rs 5 crore, only 47% of the committed amount has been drawn down.

“We have not asked for any money in the past nine months, since we do not find any suitable investment opportunities,” said a fund official requesting anonymity. India REIT’s case is similar. It has two domestic funds with a corpus of Rs 430 crore and Rs 550 crore, respectively. “Though we completed the drawdowns six months ago, only 75% of the funds have been deployed,” Ramesh Jogani, MD, India REIT Advisors, said.

Bucking the trend is Milestone Capital Advisors, which thinks it is the right time to invest in real estate. It chose to make a drawdown option on investors in its fund, Milestone Domestic Scheme II, a month ago. “There have been some requests from investors asking for extensions, but such cases are few and less than 10%,” Ved Prakash Arya, CEO, Milestone Capital Advisors, said.

Soruce:http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-funds-go-slow-on-raising-money/articleshow/4152551.cms

Correction in real estate is bound to come: Parekh

NEW DELHI: Expecting correction in real estate prices, country's largest housing finance company HDFC Ltd today said it would cut interest rates in case costs of fund comes down.

"Where flats are more expensive, the drop will be sharper than where the flats are cheaper... correction is bound to come," HDFC Chairman Deepak Parekh told reporters here.

Asked whether HDFC would cut interest rates, he said, "if the availability of money...if our cost of fund comes down, we will certainly reduce rates."

HDFC last relaxed its housing loan rates in December 2008, cutting down rates for home loans above Rs 20 lakh by 50 basis points.

The rate for loans above the said category was reduced to 11.25 per cent from 11.75 per cent earlier.

It also introduced a new slab of housing loan below Rs 20 lakh with interest rate of 10.25 per cent.

Following the easing of benchmark rates, the Equated Monthly Installment (EMI) for the existing and new borrowers would come down.

On the policy rate cut, Parekh said, since inflation numbers are down RBI may take some measures after few weeks.

"RBI would take some steps, may not be immediately but may be after a few weeks," he said.

Source:http://economictimes.indiatimes.com/Markets/Real-Estate/articlelist/1058830.cms

Geojit launches Property Services Division

MUMBAI: Geojit Financial Services on Wednesday launched its property services division, which will offer investors and builders a single transparent platform to buy/sell office and commercial spaces and residential apartments/flats.

The new division will start operations in Kochi, and will gradually cover the other major locations in the state. In the next phase, the other states in South India will be covered followed by the rest of India. The company also aims to tap the large NRI populations in the Gulf to meet their property investment needs by leveraging its presence through joint ventures in UAE and Saudi Arabia.

Said C J George, managing director, Geojit, “Real estate has emerged as an important asset class for retail investors. Through this initiative, Geojit plans to move up the service-value ladder to include new asset classes that require advice and service.”

For the service the company has tied up with some realtors like Abad Builders, and RDS Project. Further, Geojit inked an agreement with HDFC Bank for selling home loans and in the process of signing the same with ICICI Bank shortly. Joseph Nivin will head the new division.

Source:http://economictimes.indiatimes.com/Markets/Real-Estate/Geojit-launches-Property-Services-Division/articleshow/4149694.cms

Posh South Mumbai apartments yet to revert to owners

MUMBAI: World War II may have ended more than six decades ago, but for 75 Mumbai-based families the battle hasn’t ended. They are fighting to get back their sprawling flats their fathers and grandfathers had rented out to naval authorities then.

Over the years, some died and now their children are fighting to get back the flats, each costing a few crores even in today’s downcast real estate market condition.

Between 1940 and 1945, the British navy based in Mumbai rented these flats, mainly in south Mumbai, to house sailors and other personnel. Over 250 flats in prime localities like Cuffe Parade, Colaba, Churchgate, Marine Drive, Napean Sea Road and a few in Bandra and Vile Parle were rented out by their owners for a princely sum of less than 10 paise per square foot.

Interestingly, there were no written agreements when these flats were given out, but only verbal assurances that the properties would be handed back once the war ended.

However, the Indian Navy which took over these flats after Indpendence, has been diligently paying the rent and getting receipts from the owners every month. For instance, a 2,000 sq ft flat in south Mumbai fetches a rent of barely Rs 800 a month.

"Most of these flats are huge, their bathrooms are as big as some of the bedrooms in modern constructions," said J Patel, one of the aggrieved flat owners.

Of the 250 flats, there are 75 flats which the Navy is still occupying. These flats could be collectively worth over Rs 200 crore if you taken a conservative Rs 3 crore per flat," said another owner, not wishing to be identified.

Source: http://economictimes.indiatimes.com/Markets/Real_Estate/News_/Posh_South_Mumbai_apartments_yet_to_revert_to_owners/articleshow/4115913.cms

Property prices may come down by another 20%

MUMBAI: Real estate developers are likely to cut home prices by an additional 20% in a bid to lure purchasers and customers who might otherwise shift to other financial commitments, as the current fiscal draws to a close in March.

With banks also starting to cut home loan rates, people close to the development say that the first quarter of the next fiscal could see a substantial jump in home sales.

Property rates across the country have fallen by about 15-20% with the decline in the economic situation.
According to analysts, the impact from the ongoing financial crunch and mounting pressure from various other circles, could peak by the end of March. That’s when many developers will be forced to sell unsold stock at a much cheaper price, said one executive with a leading developer.

Currently, a lot of real estate developers are rushing to clean up their highly leveraged balance sheets. “In their last attempt to save diminishing margins, we could see some developers make their moves in the last quarter of FY09. To boost sales, a further cut in prices are unavoidable,” said an analyst from a leading investment bank.

India’s property market has been among the hardest hit by the global financial turmoil, as high interest rates and gloomy economic prospects have driven out buyers and squeezed funds for real estate developers.
DLF vice-chairman Rajiv Singh, India’s largest real estate company, has already gone on record to say that prices could crash by another 15%.

Real estate consultants have factored a sharp reduction in rates. “Past experiences show that if the rates range between 7-8%, sales volumes jump substantially,” said Knight Frank India chairman Pranay Vakil, a property consultancy firm.

“After SBI, ICICI Bank and HDFC Bank cut rates, I expect a jump in sales volumes. Developers are also under mounting pressure to meet their interest payment deadlines. It seems, they are also ready to cut the prices further,” he added.

Source: http://economictimes.indiatimes.com/Markets/Real_Estate/News_/Property_prices_may_come_down_by_another_20/articleshow/4072643.cms

Noida: Meltdown hits mega project

NOIDA: So badly has Noida been hit by the economic meltdown that its most ambitious commercial area project, to be built on 3.82 lakh square metres in Sector 94, may not come through as the consortium concerned is unable to pay for the land as agreed.

The builders consortium, Business Parks and Town Planners (BPTP), is learnt to have written to New Okhla Industrial Development Authority to say that it is unable to pay it at the agreed rates. The consortium had beaten some major developers in an open bid for constructing a commercial and business complex in Sector 94 on March 11 last year. It had bid for the land at the rate of over Rs 1.30 lakh per square meter. And, while the consortium made an initial payment of more than Rs 1,300 crore of the Rs 5,000 crore at the time, as registration money and allotment money, it was unable to make any more payments.

Confirming this, NOIDA chairman, Lalit Srivastava, told this correspondent , '' The government had recently announced a policy to deal with just such things in times of recession. The consortium will have to pay 10 per cent of the amount so far paid, to NOIDA, as penalty. It will also keep the land it has already been able to pay for. The rest of the land will be forfeited. Such defaulters have been asked to submit their proposals by June. But, this case is coming up for discussion in the NOIDA board this Friday.''

A senior BPTP official said: '' It is true that we are not able to pay for the land, but the turmoil in the global market is doing this to so many companies. This is why we have written to NOIDA to tell them that we would like to avail of the schemes the state government has announced for such cases. We are waiting for their reply.''

Meanwhile, the number and value of land transactions in Noida, including Greater Noida, have gone down sharply. Sub-registrar Tej Singh Yadav told TOI: '' We have been able to meet only 30 per cent of the target set for revenue recoveries in January. Last January , we met 47 per cent of the target. The number and total value of the registries done in the first 11 months of 2008 was about half of that of the corresponding period in 2007. It was only in the last 15 days of December that about half of the calendar year's registries were done, in terms of both value and number.

This was because in the last half of December people somehow got the mistaken impression that the state government was going to raise the property and rent agreement registration rates very soon.''

Meanwhile, said a senior revenue official, sale and purchase of land and buildings have almost come to a standstill in Noida as well as Greater Noida. People are waiting for prices to fall further, before they make a move. Srivastava agreed that the situation was grim.

Source: http://economictimes.indiatimes.com/Markets/Real_Estate/Noida_Meltdown_hits_mega_project/articleshow/4074035.cms

Key financier of DDA scam surrenders

NEW DELHI: Vijay Patanjali, one of the alleged main financiers of the fraudulent applications that led to the Delhi Development Authority (DDA) flat allotment scam, surrendered in a district court on Monday.

Patanjali, a resident of Shalimar Bagh in northwest Delhi, has allegedly provided money for a large number of applications made with forged documents, according to the Economic Offences Wing (EOW) of Delhi Police that had raided his premises.

Soruce:http://timesofindia.indiatimes.com/Cities/Key_financier_of_DDA_scam_surrenders/articleshow/4063922.cms