Real Estate News Letter

13th

October 19th October, 2014

For private circulation only

CONTENTS

2. Interest Rates

3. Infrastructure

4. Industry News

5. Private Equity News

6. Regulatory Buzz

8. Land

9. Residential

10. Commercial/ Retail

11. Township

12. SEZ

13. Hospitality

14. Input Cost

7. Public Markets

1. Snapshot

Snapshot

Source : NSE

Source : NSE

Note : Data indicates inflation over previous years month Source : Ministry of Commerce and Industry

6.3%

7.7%

7.0%

8.6%

6.8% 6.8%

3.9%

2.2%

1.0%

3.0%

5.0%

7.0%

9.0%

Feb/14 Mar/14 Apr/14 May/14 Jun/14 Jul/14 Aug/14 Sep/14

Per cent

WPI-inflation data (primary articles)

0.3-0.3 -1.5

0.4

-1.7

-9.0

-0.5

0.8

-11.0-10.0

-9.0-8.0-7.0-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.0

13/Oct 14/Oct 16/Oct 17/Oct

per centTrends in Nifty and CNX realty index

Nifty CNX REALTY

26 25 29

42

32 31

36

53

20

30

40

50

60

13/Oct 14/Oct 16/Oct 17/Oct

Rs billionTrends of FII in equity markets

Buy sell

Interest Rates

No news in this section for the week

concessionaires to exit both ongoing and completed

highway projects by forming a new special purpose

vehicle. The policy was criticized and did not find

takers as it threw up legal and tax complications.

After taking the industrys feedback, the roads ministry began work on a fresh proposal in January to

allow developers to exit road projects through a stake

sale. It was this proposal that was moved in a cabinet

note in August and is currently being revised by the

roads ministry. The revised note is likely to reverse

some of the changes suggested earlier to provide

limited relief to road developers, said the second

roads ministry official. It is likely that the note will now permit developers to sell complete stake after

two years of project completion which is the same as

now but will extend this relief retrospectively to all old

road projects too, he said.

The move is expected to free up capital and speed up

execution of delayed projects. Earlier, a

concessionaire could exit only two years after the

start of commercial operations for contracts awarded

after 2009. The ministry, however, is yet to receive

the report from Deloitte and will incorporate that in

finalizing the draft. Exit policy should be practical and at the same time should not encourage reckless

behaviour from developers. Relaxing the exit policy

for concessions awarded pre-2009 is the right thing to

do as it removes the disparity with projects awarded

after that. The move will free up capital for re-

investment, said Abhaya Agarwal, a partner at EY who oversees the infrastructure practice at the

consultancy.

Live Mint,16 October 2014,New Delhi

60-km Metro loop to connect Noida,

Greater Noida

To ensure a smooth ride to commuters, the Delhi

Metro Rail Corporation (DMRC) has planned to

connect Noida and Greater Noida through a Metro

link. According to officials of the DMRC, the proposed

ring like Metro link of about 60-km- would first

connect Noidas City Centre Metro station with Greater Noidas

Infrastructure

Roads ministry reworking exit

policy for project developers

The roads ministry is reworking a proposal to provide

an early exit to project developers after an earlier

cabinet note was returned by the Prime Ministers Office, citing reservations. The ministry is likely to put

out a revised draft for comments from other ministries

in a week, said two government officials who did not

want to be named.

The exit policy for road projects has assumed

importance because the recent economic slowdown

led to a fall in traffic numbers, affecting revenue

projections from tolling road projects over the last two

years. Most road developers had bid for projects based

on these projections but the drop in traffic numbers

affected the viability of the projects. The industry has

since been demanding a bailout from the government,

and easing the exit policy is one of the key measures

being considered by the roads ministry to enable

stressed developers to exit.

The Indian economy slowed to 4.7% in the fiscal year

ended March after growing at over 9% for three fiscal

years from 2006 to 2008.The roads ministry, in a

cabinet note moved in August, had sought a change in

the existing exit policy to allow concessionaires of

ongoing or completed road projects to exit completely

at any stage by selling their stakes.

Both the finance ministry and the Planning

Commission opposed this change in policy.The roads

ministry then appointed Deloitte Touche Tohmatsu

India Pvt. Ltd, an audit and consulting firm, to study

exit policies for road projects followed elsewhere in the

world, after the finance ministry resisted its new policy

saying such a move was not permitted in other

countries. The finance ministrys basic reservation was that contract conditions should not be diluted to

concede any unfair advantage to road developers, said one of the two officials cited above.

The roads ministrys efforts to tweak the exit policy has seen a series of back and forths. The government had

approved a new exit policy for highway projects in

June 2013 that relaxed the exit norms by allowing

Infrastructure

Bodaki via Noida Expressway link from one side, while

another 30-km stretch of this link would be via Greater

Noida West area. The Metro link will have about 22

stations catering to sectors 50, 143, 144 and Greater

Noidas Pari Chowk among others.

The proposed Metro link will have two parts Greater Noidas Bodaki to Noidas City Centre via Greater Noida West and Greater Noidas Bodaki to Noidas City Centre via Pari Chowk. Officials of the corporation

said that the 60-km loop would consist of two separate

stretches, which would be built in next four-five years.

According to the DMRC and the Noida authority, work

on Noidas City Centre to Greater Noidas Bodaki, a 30-km-long link, is likely to begin by January next year.

Detailed project report (DPR) of seven-km-long link, a

part of 60 km rings second stretch- Noidas City Center to GreaterNoida West (Noida Extension)

crossing is being made.The DMRC spokesperson said

they would expedite the proposed Metro projects

connecting Noida and Greater Noida with Delhi or

other parts of National Capital Region (NCR).

The Noida Metro Rail Company (NMRC) is about to be formed. Also, MOU with the DMRC is likely to be

executed soon. Once the MOU is done, we will start

work on the 30-km-long link next year, said Rama Raman, chairman of the Noida and Greater Noida

authorities. The two authorities Noida and Greater Noida have allocated a budget of about Rs. 10,000 crore for four Metro projects to be completed in next

four-five years.

Hindustan Times,16 October 2014,New Delhi

festive season.

This festive season in overall market 15 and 25 percent sales have been improved. We are expecting

some more sales in the coming days, more positive

sentiment injected in the sector will help in converting

queries into sales, said Gupta. According to an informal survey of top property consultancies in India,

top corporate across sectors are looking to lease over

40 million sq ft of space in the top seven cities over

the next 12-18 months.

The Pioneer,13 October 2014,New Delhi

Gurgaon, Noida lead demand in

premium projects

Gurgaon has the third highest per capita income in

India and this reflects in the premium housing market,

which is seeing a greater influx of end-user

demand.The NCR will continue to see increased

investments in the superluxury housing space due to

strong demand in the region. The NCR regions today

sport a growth story that mirrors India's growth over

the last decade. Today, Gurgaon registering rapid

urbanization has the third highest per capita income

in India.

The elite class aspires to a luxurious lifestyle in the

company of like-minded people. Developers have

been quick to notice this demand with realty majors

like Sobha Ltd (International City), Saha Group, ATS,

BPTP, Puri Constructions, Homestead (Michael

Schumacher World Tower and Maria Sharapova

signature project), Raheja Group (Revanta), DLF

(Garden City), Supertech Ltd (Jade Jagger or Steve

Leung's distinctive styles luxurious projects), etc,

coming up with projects providing the perfect living

environment for the wellheeled citizens.

A report says that the luxury housing market of the

NCR regions, especially Gurgaon and Noida, is

currently seeing a greater influx of end-user demand,

in contrast to the previous trend of the investment-

driven purchases. The sale of luxury projects has

gone up by nearly 30% in the last few years with the

luxury homes in Gurgaon registering demand and

Industry News

Festival season fails to cheer real

estate sector

Festive season has failed to bring cheers to the real

estate market as despite attractive offers and

discounts developers are not getting sales they were

expecting.The festival season is considered auspicious

for home buying and real estate developers are always

keen to battle the inventory pile-up with a slew of

discounts. According to experts there are about nine

lakhs of unsold inventories across the country by the

end of the last week adding that developers are not

reporting sales as they were expecting.

The real estate market in the festival season has not taken off as expected because all developers are

offering discounts and gifts so buyers are confused

this time, Property Guru CMD, Vikas Sahni told The Pioneer. However, he added that Market has performed better than last year, This festive season has not been a time for new launches. Buyers are not

too keen and companies have a pile of unsold

inventory.

According to Liases Foras, the combined unsold

inventory as of June was 765 million sq ft, or

equivalent to 760,000 two-bedroom apartments, which

will take about 35 months to clear at the current pace

of sales. Builders, especially in areas where the pain is

greater (Noida, Greater Noida, Gurgaon, Navi Mumbai

and Thane), are offering schemes on existing projects.

Vatika, for instance, is offering ready apartments in

Gurgaon on a 20 per cent down payment and the

remaining after 18 months, with no EMI or rent in the

interim

But on the other hand there are developers who are

claiming good business. Gaursons Managing Director

Manoj Gaur said: We are doing pretty well as compared to last season, we have sold 1000 units till

now in affordable sections. We also are expecting sales to go up in coming months due to positive

sentiments, he added.Similarly Amit Gupta, Managing Director, Orris Infrastructure said, The market have started reviving. Both sales and queries have gone up.

Due to stable Government and some good news for

real estate sector has helped to boost the sales during

planned way and the infrastructure is very promising,

which is an attractive proposition for buyers as well as

investors.

Dwarka Expressway (Dwarka-Gurgaon Expressway)

is gradually developing as a hub for not only

commercial and residential properties but also

entertainment activities and will act as a new

business channel between Delhi and Gurgaon. Tata

Housing has recently launched a new ultraluxurious

residential project, Gurgaon Gateway, in Sectors 112-

113, on Dwarka Expressway in Gurgaon.

Located right off the expressway, and in close

proximity to the airport, this project boasts of

connectivity and strategic location. Aniel Kuumar

Saha, CMD of Saha Group, says: We are developing an ultra luxury , group-housing, residential proj ect,

Amadeus, in Sector 143, on Noida Expressway . The

project offers 300 units of 3and 4BHKs.

Wave Group has a superluxury project in Sector 32,

Noida. The superluxury segment is more or less recession proof. Buyers are typically celebrities or

businessmen and their appetite for luxury homes is

not governed by economic considerations. Club 51 at

Belleville Park, our signature, limited-edition project,

is a luxury and lifestyle project, Amar Sinha, executive director of Wave Infratech, said. Ambience

Group has launched Ambience Tiverton, a residential

apartment complex on 3.5 acre in Sector 50, Noida.

The Times of India,13 October 2014,New Delhi

New home launches rose 30 per

cent in March quarter: Assocham

Launches of new homes rose by 30 per cent during

January-March period of 2014 in anticipation of

recovery in the property market post-election,

according to industry body Assocham. The launches

of new homes amid slowdown in demand led to rise

in unsold inventory by nearly seven per cent, it added.

"After four consecutive quarters of muted launches,

such activities showed improvement at the country

level. Ahead of general elections, developers had

launched many projects to gain competitive

Industry News

value appreciation from end users, NRIs, etc, thus

creating a separate market.

Spurred by new product offerings, greater influx of

end-user demand, and an increasing upwardly-mobile

segment, luxury and ultra luxury housing projects, with

prices ranging between Rs 1.5 crore and Rs 15 crore

are evoking higher demand in the residential market of

Gurgaon like Dwarka-Gurgaon Expressway, NH-8,

Golf Course Extension Road, and Sectors 50 and 32 in

Noida, and Noida Expressway. Sobha Developers,

which has 88 real estate projects and 234 contractual

projects in more than 20 cities under its belt, has come

up with International City, a super-luxurious realty

project in Sectors 106 and 109 along Dwarka-Gurgaon

Expressway .

Well-planned infrastructure, high quality of

construction, and ample green and open spaces make

International City an aspirational residential destination

in the NCR. The project offers a modern clubhouse

and with just six villas per acre, International City is a

good example of low-density living. On the supply side,

some new superluxury project launches continued to

focus on cost-effective options in alternative markets,

particularly in Noida and New Gurgaon.

Developers largely focused upon luxury housing in

Gurgaon during the first half of 2013, while the second

half saw new launches, primarily in the high-end and

mid-end segments along the Dwarka Gurgaon

Expressway and New Gurgaon area. Even though

units in residential projects launched by established

developers attracted maximum buyer interest and

purchases, developers across segments continued to

adopt various strategies, including discounts and free

merchandise, to boost sales.

A Harikesh, senior vice-president (Marketing & Sales)

of Tata Housing, says: With an increasing number of Indian corporates and MNCs operating out of Gurgaon,

combined with limited availability of quality residential

space in Delhi, Dwarka Expressway is emerging as a

destination where real estate projects have swelled at

an exceptional rate. Its proximity to the IGI airport,

Delhi Aerocity, and the forthcoming Diplomatic Enclave

gives Dwarka Expressway an edge over other new real

estate destinations. The area is being developed in a

"Although the current sentiment score merely

breached the 50 mark in Q2 2014 (AprilJune), results for this quarter (JulySeptember) has risen to 63 which is attributable to the stakeholders' positive

perception regarding the economy, residential sales

and price appreciation compared to six months back,"

Knight Frank said in a statement. The Union Budget

2014-15 has laid considerable emphasis on the realty

sector and this has infused a positive sentiment for

the future, it added.

However, the report said the euphoria seen in the

housing segment about sales and launches during

the previous survey has been rationalised. The

optimism about housing price rise continues to hold

steady in this quarter. "Festival season have not

really kept up to the expectations in terms of housing

sales. Home buyers are on wait and watch mode

hoping that interest rates will fall and economy will

improve. We feel that in another 6-8 months, the

actual transactions will start picking up," Knight Frank

India Chief Economist and Director Research

Samantak Das said.

He noted that although enquiries have increased, the

actual buying is not taking place. The festive season

has not brought in the expected cheer to the realty

sector, with markets reporting "not so-encouraging"

housing sales over the past two weeks, the report

said. "Unlike the boom years, stakeholders this year

had resisted the temptation to launch new projects in

the season, focusing instead on reducing the

inventory that has piled up over the past few

quarters," it added.

The Financial Express,16 October 2014,New Delhi

Real estate sentiment index up

marginally

Real estate purchase sentiment index has improved

by almost 2.5 points to 32.3 in September this year

reflecting an improvement in consumer interest after

a long period of lull, says a survey. According to

ZyFin Research, the index improved by 2.5 points to

32.5 compared to 29.8 in August, suggesting a

recovery in consumer interest after the score

Industry News

advantage and, at the same time, anticipated a

recovery in market conditions post-polls.However, a

slump in demand led to buyers taking a cautious

approach. The number of unsold units rose 6.7 per

cent quarter on quarter because of the large number of

new launches amid a prolonged slump in sales. New

launches increased by about 30 per cent q-o-q in Q1

2014," Assocham said in a statement.

While there was an improvement in new launches,

sales continued to remain low despite developers

offering attractive pricing schemes and discounts to

attract buyers, it added. "Liquidity and high level of

leverage remain big issues with the real estate

developers. These two issues can ultimately get

resolved with pick up in the economy and a smart

recovery in demand for housing units," Assocham

Secretary General DS Rawat said.

"But there is a lag between improvement in macro

picture and its impact on the real estate market,

particularly in the residential segment which is highly

sensitive to the interest rates and the job market, which

needs to be robust for the demand rebound," he

added.

The Economic Times,14 October 2014,New Delhi

Housing demand to pick up in 6-8

months: Report

Housing sales have remained lower than expected so

far during the current festival season mainly due to

high interest rates and the demand is likely to pick up

only in the next 6-8 months, according to a report by

Knight Frank and Ficci.Property consultant Knight

Frank and industry body FICCI today released the

Real Estate Sentiment Index for Q3 2014 (JulySeptember) based on a survey of various supply-side

stakeholders including developers, private equity,

banking and non-banking financial firms.

The current sentiment index, for all asset classes and

all locations, surged by 12 points to 63 points, while

the future sentiments have also improved by 2 points

to 71 points.

Industry News

bottomed out in April this year.

This improvement in the overall index signifies that a larger number of Indian consumers are planning to

purchase homes within the next 612 months, ZyFin Research Chief Economist Debopam Chaudhuri said.

According to the survey of 4,000 consumers in 18

cities across the country representing urban

consumers, the improvement was led by stronger

confidence levels in the North and South India

compared to those in the East and West.

While the index in the North rose to 44.8 in September

from 40.2 in the previous month, in the South, the

score increased to 40.5 from 36.4. The index is at its

lowest in the East at 20.7, but this is also an

improvement over the previous months score of 19.1. The West registered a score of 27.5 in September, as

compared to 26.7 in August. Historically, the sentiment index has had a strong correlation with

actual sales of homes. With the festive season

coinciding with the recovery in sentiment, home sales

are expected to be better this season, as compared to

2012 or 2013, Chaudhuri said.

Of the 18 cities surveyed, Delhi, Bengaluru,

Hyderabad, Mumbai and Mangalore hold an optimistic

outlook on purchasing homes, the survey highlighted.

Of these, Bengaluru and Mumbai have turned

optimistic from pessimistic in the current month. While

Bengaluru posted a score of 62.5 in September, as

compared to 42.5 in August, Mumbai improved to 52.5

from 40.5. The remaining three, Delhi, Hyderabad and

Mangalore, have been consistently optimistic on home

purchase in recent months, the survey said.

The Hindu Business Line,17 October 2014,Mumbai

Private Equity News

IDFC Alternatives to launch $ 500m

funds in real estate

IDFC Alternatives Ltd, the private equity arm of IDFC

Ltd, has announced the close of its second

infrastructure fund, India Infrastructure Fund II, at

Rs.5,500 crore or nearly $900 millionthe largest private equity fund to be closed this year. The amount

comprises a commitment of $90 million from its parent

IDFC Ltd and the remaining $810 million from so-

called limited partners, the fund said in a statement.

In March, IDFC Alternatives had raised its maiden real

estate-dedicated domestic private equity fund of

Rs.750 crore. It is in the process of launching another

real estate fund where it plans to raise $200-500

million from the offshore market. Investors in India

Infrastructure Fund II include global institutional

investors from North America, Europe and the Middle

East. In November, the fund had raised $200 million

from the UK governments development finance institution CDC Group Plc. The commitment had

helped the second fund reach its first close of $644

million.

We are thankful to the existing investors in our first fund who have re-upped commitments to the second

fund and the new investors including some of the

largest global institutional investors for having placed

their faith in IDFC as their infrastructure fund manager

of choice and in Indias potential as an attractive investment opportunity in the infrastructure space, said M.K. Sinha, managing partner and chief executive

officer at IDFC Alternatives.

The second fund is the successor to IDFC Alternatives debut infrastructure fund, India Infrastructure Fund,

which closed in June 2009 with a fund size of $927

million, raised from Indian and international institutional

investors. The infrastructure fund will provide long-term

equity investment for both construction and operating

infrastructure projects across India. CDC is one of the

largest investors in Indian private equity funds with at

least $680 million invested and $1.1 billion committed,

supporting almost 300 companies in the country.

Live Mint,16 October 2014,Mumbai

buyer and the seller should be present before the

registering officer, along with their respective

witnesses, in order to admit the execution of the

documents. The buyer can authorize his

representative to execute the document. The seller

must be present and transfer the title by signing the

transfer deeds and all appropriate documents.

The parties may appoint a Power of Attorney (POA)

to represent them on their behalf and admit the

execution of the documents. The buyer should then

carefully preserve the receipt issued by the

registering office. After the prescribed period, the

buyer can collect the registered documents

personally or through a duly authorized agent, after

production of the original receipt at the registrar's

office.

Once the documents are registered, the buyer can

apply for an extract of the document from the office of

the sub-registrar of assurance. Under the Transfer of

Property Act 1882, the sale of property costing more

than Rs 100 should be registered. If the value of the

property is less than Rs 100, the registration of its

sale deed is not mandatory .So, effectively, all sale

deeds need to be registered.

The Times of India,13 October 2014,New Delhi

Sebi bars DLF, six senior officials

from market for 3 years

The Securities and Exchange Board of India (Sebi)

has barred real estate firm DLF, chairman KP Singh

and five key executives from accessing the securities

market for a three years for withholding material

information on the companys subsidiaries and legal cases against them in the prospectus it filed for its

initial public offering (IPO) in 2007. The order follows

a show-cause notice issued by Sebi in June 2013 to

the company and its executives in which it alleged

DLF had failed to disclose related-party transactions.

The capital markets watchdog has prohibited the

company and the executives from buying, selling or

otherwise dealing in securities, directly or indirectly.

The persons impacted by the ban are executive

Regulatory Buzz

Registration of sale deed is

mandatory

According to the Indian Registration Act 1908, the

purchase of a property should be registered at the

office of the registrar or sub registrar of the district

within whose jurisdiction it is located. The registration

should be done after the buyer and seller have

executed the documents. A sale agree ment should be

registered with the sub-registrar of assurances within

four months from the date of execution of the

document. In case this is not done within the

prescribed time limit, the document can still be

registered within a further four months after paying the

applicable fine. After eight months, the document

cannot be registered.

Before registration of a property, the final sale deed

should be prepared on stamp paper of appropriate

value (the prevailing rate of stamp duty in the state).

The documents should be executed by the seller and

buyer. Once registered, the seller cannot resell the

same property to someone else. In case the sale

agreement has not been registered, the buyer should

prepare and execute a Deed of Confirmation and

attach it with the original document, which earlier could

not be registered.

Thereafter, he should register the Deed of

Confirmation at the office of the sub-registrar of

assurances. Nowadays, many states have the

provision of a prior appointment through the internet.

On the given date and time, the buyer should approach

the sub-registrar's office along with the seller and two

witnesses. The document to be registered should be

presented in original.Similarly , in many states, e-

stamping has been started, where the stamp duty is

paid online through authorized representatives.

The documents should state the names of the parties,

buyer and seller, along with their full addresses, date

of construction of the building being sold, its area,

description, address, etc.Further, a copy of the

building's plan should be attached. In addition to the

stamp duty , the buyer should pay the applicable

registration fee, copying fee, and file charge. The

registering office will issue a receipt to the buyer. The

transactions needed to have been disclosed.

Sebis order noted that the process of share transfer of three subsidiaries of DLF in Sudipti, Shalika and

Felicite was through sham transactions as alleged in

the show-cause notice and that the noticees

employed a plan, scheme, design and device to

camouflage the association of DLF with its three

subsidiaries namely, Felicite, Shalika and Sudipti. I find that the case of active and deliberate suppression

of any material information so as to mislead and

defraud the investors in the securities market in

connection with the issue of shares of DLF in its IPO

is clearly made out in this case, the Sebi order noted.

The Financial Express,14 October 2014,Mumbai

Ministry says trusts can become

partners in LLPs

Any trust set up under the law governing the capital

markets regulator can become a partner in a limited

liability partnership, the government said on Tuesday.

Clarifications have been sought on whether a trust or a trustee representing a trust in the case of real

estate investment trust (REIT) or infrastructure

investment trust (InvITs) or such other trusts set up

under the regulations prescribed under the Securities

and Exchange Board of India Act, 1992, can become

a partner in an LLP, the corporate affairs ministry said in a statement.

On 27 September, the Securities and Exchange

Board of India (Sebi) allowed property funds to invest

in limited liability partnerships. The government has

also allowed boards of not-for-profit companies to

decide whether they will forfeit the security deposit of

Rs.1 lakh in case a person is not elected as a director

on the board of such a partnership. The government

has granted a years exemption to auditors from validating the effectiveness of the internal audit

systems of the company they are preparing the audit

report for. This exemption has been granted till 1

April.

The government has also given a relaxation in the

case of consolidation of accounts. While holding

Regulatory Buzz

chairman Singh, Rajiv Singh, vice-chairman, Pia

Singh, whole-time director, TC Goyal, managing

director, Kameshwar Swarup, executive director (legal)

and Ramesh Sanka, CFO. The violations relate to,

among other laws, the Disclosure and Investor

Protection (DIP) Guidelines and the PFUTP

(Prevention of Fraudulent and Unfair Trade Practices)

norms.

Rajeev Agarwal, whole-time member of Sebi, noted in

his 43-page order he was satisfied that the violations

were grave and had larger implications on the safety

and integrity of the securities market. In my view, for the serious contraventions as found in the instant case,

effective deterrent actions to safeguard the market

integrity. It, therefore, becomes incumbent to deal with

contraventions, digression and demeanour of the

erring Noticees sternly and take appropriate actions for

effective deterrence, Agarwals order read.

Among the transactions that drew the attention of the

regulator were those in which three of DLFs subsidiaries, DLF Estate Developers (DEDL), DLF

Home Developers (DHDL) and DLF Retail Developers

(DRDL) subscribed to the share capital of three

companies Sudipti, Shalika and Felicite to various extents and, subsequently, in November 2006,

sold these stakes to three persons, Madhulika Basak,

Niti Saxena and Padmaja Sanka.

These three persons were the wives of Surojit Basak,

Joy Saxena and Ramesh Sanka, respectively, all key

management personnel of DLF. However, even after

the sale of the entire shareholding in Sudipti, Shalika

and Felicite by the wholly owned subsidiaries of DLF,

there was no change in the composition of the board of

directors of these three companies.

The directors in Sudipti, Shalika and Felicite, who were

employees of DLF, continued to be the directors of

these companies even after the sale of shareholding.

The arrangement allowed DLF to control the boards of

these three companies. Sebi had alleged that in terms

of the Substantial Acquisitions and Shares and

Takeovers Regulations, the three companies were

controlled by DLF even after the date of claimed

dissociation. Therefore, Sudipti, Shalika and Felicite

were related parties of DLF in terms of AS-18 and the

seafronts would continue to get the same protection,

but at bays the construction restriction would be

reduced from 500m to just 100m. Early this year, the

MCZMA redefined the Mahim coast as a bay .Soon

enough, Hoary Realty (part of the Hubtown Group)

put in a proposal to get its plot removed from CRZ

and the 500m protection ring.

Hubtown cited a report from the Institute of Remote

MAHIM BAY ROW Sensing in Chennai, showing the

plot almost outside the 100m zone of the Mahim

coast.In May end, MCZMA approved the proposal.

When TOI reported on this case, the state

government stayed the MCZMA 's decision to declare

Mahim shore as a bay and the clearing of building

proposals near the coast, including the Prabhadevi

plot. Hubtown then approached the court against the

government stay and succeeded in getting a

favourable order.The developer's plot measures

21,475 sq m of which only 1,475 sq m falls within the

new 100metre rule. The court's ruling will now allow

Hubtown to fully develop the remaining 20,013 sq m.

We also find that in the petitioner's case the National Hydrographer Office in Dehradun has also certified

that Mahim Bay is considered as a bay and is also

depicted as bay on its official navigational chart. The

petitioner is therefore justified in contending that its

case is similar to the case of Deepak Rao,'' it said.

Rao is a developer whose slum plot was earlier

cleared under similar circumstances for development

near the Mahim shore.

The Times of India,16 October 2014,Mumbai

Regulatory Buzz

companies will continue to have to consolidate their

accounts with all their step-down subsidiaries, the

latter have been exempted from mandatory

consolidation of accounts with their own immediate

subsidiaries during the current fiscal year.

Further, joint venture and associate companies have

also been exempted from mandatory consolidation of

accounts with the parent companies till 1 April 2015,

provided the parent companies do not have any

subsidiaries. Ambar Maheshwari, managing director,

corporate finance at property advisory Jones Lang La

Salle India, said that with trusts being allowed to

partner in LLPs, it brings about much-awaited clarity on

a matter that was mired in uncertainty till now. Most domestic funds are structured as trusts that act on

behalf of its trustees but most of them couldnt invest in them and were looking to invest through other

structures such as private limited companies, said Maheshwari.

Live Mint,16 October 2014,New Delhi

Builders win as HC rules Mahim is a

bay

In a major victory for developers, the Bombay high

court has upheld the redefinition of Mahim shore as a

bay and allowed construction in an area which earlier

fell under the highly restrictive coastal regulation zone

(CRZ). A division bench of chief justice Mohit Shah

and Justice M S Sonak last week directed Maharashtra

coastal zone management authority (MCZMA) to issue

a clearance certificate to developer Hubtown for its

5.5-acre Prabhadevi plot within four weeks. After receiving clearance from the MCZMA, the municipal

corporation is directed to consider the petitione r's

application for development on the land which falls

outside the CRZ area,'' said the court order.

The high court order comes as a huge relief for

developers whose plots are located close to the shore.

Earlier, the development potential of these plots was

severely restricted because CRZ norms restricted

construction activity 500 metres from the sea's high

tide line. But the rules were qualified in an amendment

three years ago. The amendment stipulated that

affect DLF's future projects in the region, analysts

say.

An official at the Securities Appellate Tribunal said

DLF could try and ask for a stay on the order until the

appeal is heard. DLF declined to comment beyond the

statement it issued late on Monday. The company

said it would defend itself against the order passed by

SEBI. SEBI is embarking on a plan to standardise

corporate reporting in India, and chairman U.K. Sinha

has warned that non-compliant companies will be

punished.

INSUFFICIENT FUNDS

DLF's net debt stood at about 185 billion rupees ($3

billion) at end-March and its rate of interest was 12.08

percent, according to the company's annual report. Its

free cash flow for the fiscal year ended March 31 fell

to 5.18 billion rupees, the lowest in four years,

Reuters data shows.ICRA estimates about 59 percent

of DLF's total outstanding debt of about 224.11 billion

rupees at end-March to be bank-funded and the

remainder as non-bank, according to Rohit Inamdar, a

senior analyst at the Indian credit rating agency.

"In the short term, this is a big issue for DLF clearly

because there is a looming liquidity crisis in case the

sales velocity does not pick up," said V Krishnan, a

sector analyst at Mumbai-based brokerage Ambit

Capital. Ambit estimates that with about 57 million

square feet of projects under development, DLF

needs about 2 billion rupees a month towards

construction costs, and its interest outflow to service

debt is also about 2 billion rupees a monthly currently.

The company's operating cash flow of about 3 billion

rupees will barely cover its construction costs and half

its interest cost, given the slow pace of home sales in

DLF's primary market of Delhi and the surrounding

region, Krishnan said. "DLF will either need to slow its

pace of execution in under-construction projects or

monetise some of its assets at distressed valuations

to contain or improve its operating cash inflows," said

Krishnan, adding that it could look for term loans from

banks though that will not come cheap.

The Economic Times,16 October 2014,New Delhi

Public Markets

DLF Ltd faces tough choices after

fund-raising ban

DLF Ltd will be forced to sell assets, even unfinished

projects, to meet debt obligations, say bankers, after

India's biggest property firm was banned from the

capital markets for three years - the market regulator's

harshest penalty ever. The Securities and Exchange

Board of India (SEBI) ruling on Monday will cut off

DLF's access to the Mumbai stock market, Asia's

best-performing bourse this year. The company,

shouldering $3 billion of debt, will also be barred from

the bond market just as its free cash flow sinks to

multi-year lows.

The ban follows what SEBI said was DLF's failure to

provide key information on subsidiaries and pending

legal cases at the time of its record-breaking 2007

initial public offering. On Tuesday, DLF shares fell to

a record low at the market close, wiping out $1.2

billion in market value.The SEBI ban comes as

slowing home sales due to poor consumer sentiment,

high inflation and interest rates hit developers in

Asia's third-largest economy. Bankers and analysts

say the only option left for DLF, India's most indebted

property developer, is to divest assets, even half-

complete projects, if the SEBI order is upheld.

"That's the only practical option because the banks

are also very cautious in lending to the sectors like

real estate. So refinancing would not be that easy," a

banker with a large U.S. bank that previously worked

with DLF said, declining to be named as he was not

allowed to speak to the media about client-specific

issues. The ruling also adds to the regulatory

pressure and political scrutiny on DLF. DLF is facing a

probe from the antitrust watchdog and has been

accused by the media and political opponents of

entering into improper land deals with well-connected

businessman Robert Vadra. DLF and Vadra, the son-

in-law of opposition Congress party chief Sonia

Gandhi, have denied the allegations.

The SEBI ban also comes ahead of the state

assembly elections in the northern state of Haryana

on Wednesday. Any change in government could

Land

No news in this section for the week

received very good response from the market. It is a

good sign that the market is picking up, said Suresh Krishn, managing director of Isha Homes. The

company has announced an initial launch price of Rs

4,500 per sq ft for the project.

According to him, the response for the project also

indicated that the buyers will come forward, if the

location and the pricing is right. The project site is located close to four leading schools, besides large IT

parks and corporate offices. Further, the travel time to

the city from Kolapakkam is very little, Krishn pointed out. The project offers various amenities including a

multi-purpose hall, gymnasium, aerobics room, indoor

games, kids play area, jogging track, landscaped garden, power back up for common areas, STP, lift

for all the blocks, supermarket and an association

office. Each block is being built as stilt plus four

floors, in order to provide ample open space to

residents. While the construction has already started,

the project is likely to be completed and finished

apartments handed over to homebuyers by October,

2016.

Financial Chronicle,16 October 2014,Chennai

MLDLs second Happinest project in Maharashtra

Mahindra Lifespace Developers (MLDL), the real

estate and infrastructure development arm of the

$16.5 billion Mahindra Group, recently launched its

second Happinest project in Boisar, a suburb of

Mumbai. Currently, urban India has an estimated 19

million families either living in slums or in low income

neighborhoods on rent and this housing deficit is

likely to rise to 38 million by 2030. This project is

targeted at the large, under-served home ownership

market in India, the company said in a statement.

Our first Happinest project at Avadi near Chennai has received a very encouraging response in the first

month itself. Built on the three pillars of trust, better

living and affordability, the new project at Boisar

signals our continuous efforts to enable a larger cross

section of Indians to fulfil their dreams of home

ownership in a safe, secure and healthy

Residential

Assetz Property launches

residential project in Bangalore

Assetz Property Group, Singapore headquartered

property development group, has launched its project -

Assetz Marq, on the Whitefield -Hoskote main road,

Bangalore. This is a mix development residential project spread over 28 acres and offers a vibrant living

along with retail, entertainment and service zones at

the doorstep, said Ben Salmon, CEO Assetz Property Group.

Assetz Marq project comprise of 2,000 units, in a

combination of two bedroom (1245-1286 sq feet), three

bedroom (1457-1639 sq feet) apartments, duplex

(2267 sq feet) and pent house (3109 sq feet), which

will be completed in three phases. Each phase will

consist of six to seven towers with plenty of open and

green spaces.

The Hindu Business Line,16 October 2014,Bangalore

Isha Homes floats apartments in

Chennai

Isha Homes, a leading property developer with focus

on Chennai and Coimbatore, has recently announced

the launch of a residential apartment project at

Kolapakkam, a fast growing western suburb in

Chennai. The project Isha Gayatri is being developed over 2.88 acres of land and will offer 216

high-end apartments offering a choice of 2BHK

(compact), 2BHK, 2.5BHK and 3BHK units with sizes

varying between 590 sq ft 1,406 sq ft

The project is ideally situated between Manapakkam

and Porur. While the Chennai Trade Centre is just five

kms away from this, the Porur junction is around four

km. Several major schools, IT parks including the DLF

IT SEZ, colleges, hospitals, including Miot, besides

banks and supermarkets are all located closeby. The

Mount Poonamallee Road as well as the Porur Kundrathur Road are easily accessible from the

projects location.

We launched this project last Saturday and it has

thereby reducing on-site work and quality variation to

enable faster delivery to customers. Happinest,

Boisar, is a green building project that has currently

been pre-certified by the IGBC (Indian green building

council), Arjundas said.

Financial Chronicle,16 October 2014,Mumbai

Chintels offers premium residential

project in Dwarka

The Chintels Group, that is in the process of

developing over 600 acres of self-owned prime land

in and around Dwarka expressway bordering and

including Delhi, has announced the launch of its

premium residential project Chintels Acropolis in

sector 108 on the edges of Dwarka, Phase II, New

Delhi.

Spread over nearly 40 acres, Chintels Acropolis

would have 23 residential towers with 1,341 flats. The

size of the 3, 4, 5 BHK would range from 181.16 sqm

to 603.86 sqm (1,950 sq ft to 6,500 sq ft). The project

is surrounded by luxury farmhouses in Delhi on one

side and villas of the upcoming international city on

the other. It is positioned on a 75-metre wide road

with a wide frontage of 500 meters and would be built

according to green design standards, offering

contemporary architectural style residential

apartments.

At the launch, Prashant Solomon, managing director,

Chintels India, said, Chintels Acropolis is uniquely positioned amidst luxury farmhouses in Delhi and

villas of the international city. The project follows

green design standards to offer environment friendly,

healthy and cost-effective living standards to its

residents. The areas of New Gurgaon comprising sectors 109, 108 & 106 bordering Dwarka Phase-II

are expected to follow the same growth curve as

premium Gurgaon locations, he added. Chintels Acropolis is a part of Chintels Metropolis a self-sustained area development by the Chintels Group.

Chintels Acropolis will be equipped with a large and

luxurious state-of-the-art amenities.

Financial Chronicle,16 October 2014,New Delhi

Residential

environment, said Anita Arjundas, managing director and chief executive officer, Mahindra Lifespace

Developers.

Spread over 14 acres, Happinest Boisar will offer 1

RK, 1 BHK, and 2 BHK apartments in the range of 351

sq ft to 695 sq ft. The price of the apartments ranges

from Rs 9 lakh to around Rs18 lakhs, depending on

the size of the apartments. It is not only home to

Maharashtras largest Maharashtra PSU Industrial Development Corporation (MIDC) but also offers

seamless connectivity to Mumbai and Gujarat by local

and outstation trains. The proposed DMIC (Delhi-

Mumbai industrial corridor) will also be in the vicinity.

The project is also well situated with the railway

station, bus stands, hospitals, schools and colleges in

close proximity, said Sriram Mahadevan, the business

head of Happinest.

Happinest homes are focused on offering customers

safe and secure neighbourhoods with good transport

connectivity and addressing the cultural and social

nuances of the target customers lifestyle have been important elements of the design process, like the

provision of balconies, and community spaces, among

others. Designing of the project has been done in a

way which would help in energy conservation while

ensuring that these homes are equipped to address

the future lifestyle needs of the customers.

Units at Happinest will have provision for appliances

like air conditioners and washing machines. The

development will have 24X7 power backup for

common areas, elevators, open car park, an

amphitheatre, walking track, and there are plenty of

open spaces for senior citizens. Children of all ages

will be able to enjoy themselves in open areas ranging

from tot lots and toddler play areas to cricket grounds,

a volleyball court and a badminton court. A dedicated

community hall for festivals is aimed at fostering

community living within this safe and secure

environment, the company sattement said.

The key to deliver affordable housing is to keep costs

low without compromising on quality or speed of

execution. This has been made possible in Happinest

projects by focusing on innovations and value

engineering. Ready-to-fit components have been used,

rates rising in the range of 1215 per cent during the quarter. Similar demand trends also led to rental

appreciation in select developments along the IT

corridor in Hyderabad.

However, subdued demand and existing vacancy

pressures caused values to dip by 23 per cent q-o-q in Mumbai's Nariman Point and BandraKundra Complex. In NCR, the rentals maintained their

equilibrium over the previous quarters in most

prominent office developments in the Central

Business District (CBD) of Connaught Place. Similar

trends were noticed across commercial office as well

as IT/SEZ segments of Gurgaon and Noida. "Going

forward, rentals are likely to remain stable across

most markets due to a significant pipeline of under

construction projects," CBRE said.

The Financial Express,17 October 2014,New Delhi

Commercial/ Retail

Office space leasing up 31% in Jul-

Sep at about 8 mn sq ft

Office space absorption rose 31 per cent in the

country's seven major cities during the July-September

period at about 8 million sq ft on higher demand from

corporates looking for expansion, property consultant

CBRE said today. Absorption of office space stood at

around 6 million sq ft during the same period last year

in the seven major cities of the country - Delhi-NCR,

Mumbai, Kolkata, Chennai, Bangalore, Hyderabad and

Pune.

"Positive market sentiments and a gradual global as

well as domestic macro-economic recovery may finally

be signalling the beginning of a revival in India's

corporate real estate segment," CBRE South Asia Pvt

Ltd Chairman and Managing Director Anshuman

Magazine said in a statement. "Various corporate

firms, who had put their office space consolidation and

expansion plans on hold over the previous couple of

fiscals, finally began their transaction processes; and

many concluded the same during the penultimate

quarter of 2014," he added.

The consultant noted that the third quarter of 2014 saw

stable, yet significant demand for office spaces on a

quarter-on-quarter basis across the leading urban

centres, clocking a total absorption of about 8 million

sq ft. "On an annual basis, investment-grade office

space take-up also rose by around 31 per cent," CBRE

said.

New grade A office space addition, meanwhile, fell by

about 3 per cent q-o-q across key cities, to stand at

about 6.7 million sq ft, helping to balance out the

supply/demand dynamics in these seven cities. With

the expected increase in India's GDP growth, the

commercial real estate market is likely to witness

accelerated activity in forthcoming months.

"Rental values for commercial office space remained

stable for the most part across cities such as Delhi

NCR, Bangalore, Pune and Kolkata; while appreciating

across select micro-markets of Chennai and

Hyderabad," CBRE said. Sustained occupier interest in

prominent SEZ developments of Chennai led to rental

Township

No news in this section for the week

do the feasibility report. The port is planning to

promote the zone primarily for manufacturing

industries.

He said the Port had signed an MoU with the

Puducherry government on Wednesday to develop a

port in the Union territory. A special purpose vehicle

(SPV) will be floated shortly to promote the port, which

will have two or three berths to handle clean cargo,

containers and cruise. While the government will allot

the land, Kamaraj Port will invest in developing the

port, Bhaskarachar said.

The Kamaraj Port also held talks with the Tamil Nadu

Tourism Development Corporation to start a cruise

service from Ennore, about 45 km from Chennai, to

Kanyakumari via tourist destinations of

Mahabalipuram, Puducherry and Rameswaram.

Tenders will be opened for an operator shortly, he

said. On the ongoing projects at Kamaraj Port,

Bhaskarachar said the port would add three to five

berths in the next three years, including one for

container terminal (at a cost of over Rs 1,200 crore),

one for a multi-cargo berth and one for coal. While

these projects would be developed by private players,

the port would invest around Rs 220 crore during this

year in dredging of berths and to create other infra like

railway yards.

Business Standard,13 October 2014,Chennai

Govt plans to revamp SME, SEZ tax

regime

The government is getting down to business to boost

local manufacturing and create jobs and is working on

a series of measures, including revamp of the tax

system for the small-scale sector, ship-building and

special economic zones (SEZs).Work has also begun

on speeding up the system of clearances for the

mining and power sector, including allocation of coal,

after the government managed to rework the

environment and forest clearance mechanism that was

seen as a major hurdle for projects to take off. Senior

officials said with elections in two states out of the way

, the Narendra Modi government is expected to speed

up decision-making in the coming weeks.

SEZ

Govt to set up Rs. 1 lakh cr petro

SEZ in Bina, MP

The government on Friday announced it would set up

a Petroleum, Chemicals and Petrochemicals

Investment Region (PCPIR) near the Bina refinery in

Madhya Pradesh at a cost of around Rs. 1 lakh crore.

This would be the fifth PCPIR in the country and the

first in a land locked state.

PCPIR is usually a delineated area of around 250 sq

km for setting up manufacturing facilities for domestic

and export led production. In March 2007, the Cabinet

Committee on Economic Affairs had approved the

proposal to set up PCPIRs in four states Gujarat, Andhra Pradesh, Odisha and Tamil Nadu.

We have held two meetings with petroleum minister Dharmendra Pradhan and the state Chief Minister

Shivraj Singh Chouhan and we have decided to set up

a PCPIR at Bina refinery, between Gwalior and

Bhopal, said Ananth Kumar, minister for chemicals and fertilisers at the concluding day of the 4th Global

Investors Summit at Indore. This project cost will be Rs. 1 lakh crore, Kumar said. Till now government has announced PCPIRs in Dahej, Gujarat, Paradeep in

Odisha, Vishakhapatnam-Kakinada in Andhra Pradesh

and Cuddalore-Nagapattinam in Tamil Nadu. These

projects entail a cumulative investment of Rs. 7.6 lakh

crore.

Hindustan Times,13 October 2014,Indore

Kamaraj Port to develop SEZ or FTZ

on a 650-acre land

Kamaraj Port Limited (formerly known as Ennore Port

Limited) is planning to set up a special economic zone

(SEZ) or free trade zone (FTZ) on 650 acre in the

vicinity of the port. Speaking on the sidelines of the

Confederation of Indian Industry (CII) conference on

Approach to Integrated Maritime Systems in Chennai, MA Bhaskarachar, chairman and managing director,

Kamaraj Port Limited, said that the Port had acquired

around 650 acre from the salt department to develop

an SEZ or a FTZ. We will soon appoint a consultant to

SEZ

The revenue department has asked the commerce

department to come up with options related to SEZs,

an issue that is being discussed for over a year but has

seen no progress, a senior government officer told

TOI. At the same time, the finance ministry has made it

clear that all tax related proposals -such as those

related to restoration of minimum alternate tax and

dividend distribution tax exemption -will only be taken

up at the time of the Budget.

Similarly , discussions on a new policy for the small-

scale sector, including a reworked tax regime, have

also started with the cabinet secretariat stepping in on

Friday to work out steps that will boost the sector that

accounts for around 45% of the manufacturing activity

in the country and employs close to 6 crore workers.

A large section in the government believes that a push

to the micro, small and medium enterprises is critical to

boost job-creation and to check unnecessary

imports.The ship-building industry is seen to be a

significant employment generator, a key theme of the

`Make In India' campaign launched by the government

last month.

At the same time, the government realizes that there is

a need for a massive infrastructure creation drive and

is trying to make sure that procedures related to

getting mining approvals are eased at the earliest. In

fact, the project monitoring group in the cabinet

secretariat has already begun work on the issue and is

working with the private sector to remove bottlenecks.

A similar exercise has also been initiated for the power

sector, including work on how coal blocks and linkages

will be given to those setting up electricity generation

units.

Delay in approvals has held up investments of close to

Rs 20 lakh crore over the past few years, and even

impacted the financial sector.The government has

already started working towards solving the land

acquisition problems, another complaint of the industry

, to make the process simpler.

The Times of India,18 October 2014

Hospitality

No news in this section for the week

Input Cost

No news in this section for the week

Disclaimer

The information carried by the articles in this newsletter has been gathered from various reports published in

newspapers and magazines. ASK Property Investment Advisors has reproduced the articles and reports

verbatim. ASK Property Investment Advisors does not vouch for the accuracy of the information and is not

responsible for decisions that may be taken on the basis of the information.

This document is being communicated to you solely for the purposes of providing our views on current market

trends. This document is being communicated to you on a confidential basis and does not carry any right of

publication or disclosure to any third party. By accepting delivery of this document each recipient undertakes

not to reproduce or distribute this presentation in whole or in part, nor to disclose any of its contents (except to

its professional advisers) without the prior written consent of ASK Property Investment Advisors, who the

recipient agrees has the benefit of this undertaking. The recipient and its professional advisers will keep

permanently confidential information contained herein and not already in the public domain.

This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended

to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or

investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product

or service. The use of any information set out in this document is entirely at the recipient's own risk.

ASK Property Investment Advisors does not accept any responsibility for any errors whether caused by

negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this

document. The information in this document reflects prevailing conditions and our views as of this date, all of

which are subject to change. In preparing this document we have relied upon and assumed, without

independent verification, the accuracy and completeness of all information available from public sources or

which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to

future performance.

No reliance may be placed for any purpose whatsoever on the information contained in this document or on its

completeness. The information set out herein may be subject to updating, completion, revision, verification and

amendment and such information may change materially.