Monthly Archives: Dec 2019

Infrastructural development Real Estate Real Estate News Smart Residential Living

Chennai’s George Town To Be Redeveloped Soon

Dec 21,2019 / By / No Comment
Chennai's George Town going to be redeveloped soon

Highlights:

  • Chennai Metropolitan Development Authority (CMDA) will launch a year-long survey to redevelop one of Chennai’s most densely populated and disorganized areas “Geroge Town”.
  • Most of the buildings in George Town have architectural violations and are not considered safe.
  • An initial survey conveyed by the Chennai Metropolitan Development Authority (CMDA) exposed that over 99% of the buildings in the town had violated the construction standards.
  • The Authority would analyze all major features of wider roads, public open spaces, better ventilation, improve physical and social infrastructural facilities to fulfill better living conditions in the city.
  • The Madras School of Economics will provide direction in the development of business and economic profile of the George Town area.
  • To start this project, an amount of Rs 40 lakhs was issued in the month of September and by March 2020 this project.

The city of Chennai could add one more feather to its cap as in a major announcement, the oldest quarters of Chennai, George Town is all set to be redeveloped soon. Chennai Metropolitan Development Authority (CMDA) will launch a year-long survey to redevelop one of Chennai’s most densely populated and disorganized areas.

An official from the housing and urban development department said the purpose of the study was to redevelop the area without displacing the local population.

The Authority would analyze all major features of wider roads, public open spaces, better ventilation, improve physical and social infrastructural facilities to fulfill better living conditions in the city. Apart from that, the authority will also survey the volume of sewage discharged by the households and the amount of water supply in the area.

In 2014, a survey was conducted by Chennai Corporation and found that of the 11,300 buildings on roads that are less than 9m wide, only 72 were constructed as per the planning permission. The report submitted to the Madras High Court said that more than 99% of buildings in George Town were constructed either without an approved plan or in violation of rules.

An initial survey conveyed by the Chennai Metropolitan Development Authority (CMDA) exposed that over 99% of the buildings in the town had violated the construction standards. Some of these do not even have the approved plan. The current survey conducted by the authority will principally focus on the repair of buildings in adherence to the Tamil Nadu Combined Development and Building Rules (TNCDBR).

Two locations from Chennai have been selected for the pilot project, 2nd being 151 hectares of Agaramthen Village which falls under the jurisdiction of St Thomas Panchayat Union.

Most of the buildings in George Town have architectural violations and are not considered safe.

More than 60% of the buildings in the area are over 50 years old. As a result, immediate consideration is required to assure safety.

The George Town area named for the pilot town planning scheme is surrounded by Wall Tax Road on the West, Basin Bridge Road on the North, North Fort Road and Periyar EVR Salai on the South, and Rajaji Salai on the East.

As per the 2nd Masterplan Land Use Map, the area preferred for the pilot project is listed under various land-use zones which include primary residential, mixed residential use zone, institutional and industrial use zones.

The Madras School of Economics will provide direction in the development of business and economic profile of the George Town area.

Sources said a business and economy profile of George Town will be made to identify town planning interventions needed for business growth and expansion.

This may add the development of a logistics park or a financial hub to provide banking, insurance, and legal sectors.

The research was previously approved by CMDA to form guidelines and unfold effective means to implement redevelopment projects in Chennai Metropolitan Area.

The guidelines are usually for the area redevelopment which includes demolition and reconstruction of private and government properties including reconstitution of plot and better circulation by means of new roads.

On 30th November 2019, for the development of George Town, as a part of the pilot local area plan and implementation of the pilot town planning scheme at Agaramthen Village under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the center has approved an amount of Rs 2 crore.

It must be considered that 150 hectares in George Town would be redeveloped and the town planning scheme would be implemented in 151 hectares of Agaramthen. To start this project, an amount of Rs 40 lakhs was issued in the month of September and by March 2020 this project would be completed.

Chennai is among the 25 cities selected for the above-said pilot project. As TUFIDCO has not issued the funds to CMDA or Chennai Metropolitan Development Authority which is the nodal agency, the funds issued by the center is yet to be utilized.

About George Town:

In 1911, during the colonial period, the area in and around Muthialpet in Madras was renamed as George Town by the British. In honor of King George V when he was honored Emperor Town make larger approximately from Chennai Central railway station and People’s Park in the west to the Bay of Bengal in the east. To the north is Basin Bridge and Royapuram while Fort St George bounds it on the South

Image source: New Indian Express

 

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Real Estate Real Estate News Smart Residential Living

Real Estate Investment in India Bounce Nearly 9% in 2019

Dec 20,2019 / By / No Comment
Real estate investment in India

Highlights:

  • Investment in India’s real estate market surged nearly 9% in 2019 compared to 2018 and reached $6.2 billion (Rs 43,780 crore).
  • The foreign funds estimated for nearly 78% of the overall investment in 2019, the highest share ever.
  • Office properties pulled 46% of the total inflow and raised nearly Rs 20,000 crore this year.
  • Bengaluru emerged to the 2nd place overtaking Delhi-NCR in terms of collecting investments with inflows of Rs 4,650 crore ($655 million) in 2019.
  • Mumbai managed the investments with a 25% share of the influx in 2019 and remains to be the most attractive investment destination in the country.

According to global property consultant colliers, investment in the Indian real estate market is estimated to jump by nearly 9% to Rs 43,780 crore during this calendar year on higher inflow from foreign private equity (PE) investors, including pension and sovereign funds, infused money despite the economic slowdown. The research shows that the foreign funds estimated for nearly 78% of the overall investment in 2019, the highest share ever.

Office properties pulled 46% of the total influx and raised nearly Rs 20,000 crore this year.

Colliers predicts that there is more growth ahead in 2020, admitting at a slower pace and investments inflows would total Rs 46,170 crore ($6.5 billion) or growth of nearly 5%.

The Rs 43,780 ($6.2 billion) investment in 2019 is however lower than what the Indian realty market received in 2017 i.e. $8 billion. Considering 2008, India’s real estate sector registered overall inflows of Rs 4,10,000 crore ($56.6 billion), according to Colliers. “After 2014, a bundle of reforms added such as the implementation of the Real Estate Regulatory Authority (RERA), the introduction of the Goods and Services Tax (GST), the rise of the Insolvency and Bankruptcy Code (IBC), and relaxation in foreign direct investment norms. These all reforms together have encouraged investor engagement in Indian real estate,” the firm says.

Global property consultant Colliers suggests investors look at opportunistic assets including under-construction office assets supported by strong demand signals in IT-influenced markets such as Bangalore, Pune, and Hyderabad giving enough possibilities to investors, said Managing Director and Chairman at Colliers International India, Sankey Prasad.

Office assets accounted for 46% of the total inflows during 2019 totaling Rs 19,900 crore ($2.8 billion) with the sector supported by strong demand signal and rental appreciation. The experts assume investors to remain focused on taking commercial office assets over the next 3-years supported by robust occupant demand and rental appreciation.

Besides Mumbai and Delhi/NCR, Bangalore should continue to rank among the most attractive commercial office markets. Bengaluru emerged to the 2nd place overtaking Delhi-NCR in terms of collecting investments with inflows of Rs 4,650 crore ($655 million) in 2019. And the consultant firm noted that the strong appetite for commercial office assets propelled Bangalore’s place to the 2nd in 2019 and believe that it should continue to be among the top 2-most attractive markets for investors over the next 2-years as funds continue to remain strong in commercial office assets

The consultant firm states that Mumbai managed the investments with a 25% share of the influx in 2019. The city of Mumbai remains to be the most attractive investment destination in the country by reason of an extensive range of asset classes, giving diverseness to investors’ portfolios.

Throughout 2020-2023, an annual average gross absorption at 52 million sq.ft. across the top 7-cities, exceeding the gross absorption of the past 5 years by 12%, projected by Colliers.

The report further said that there is a flurry of commercial investment activity in 2020 and 2021 as funds total assets to list them as real estate investment trusts (REITs).

While the commercial office sector is registering strong growth in investments, India’s residential real estate is undergoing a continued slowdown in investment size, considering only 9% of the total investments in 2019.

Colliers expects investments in the residential sector to continue soft during 2020, as money matters in non-banking financial companies (NBFCs) continue.

The firm also suggests that residential developers, including those with weak credit marks, were heavily dependent upon NBFCs to finance their projects over the last few years. And they believe that investors should continue to choose a conventional way towards residential assets, excluding a few top-tier developers, as the demand in the sector has not fully recovered yet.

 

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Property tax Real Estate Real Estate News Smart Residential Living

Property Tax Collection in Mumbai Dropped by 34%

Dec 19,2019 / By / No Comment
Property Tax in Mumbai

Property Tax in Mumbai

Almost 3-quarters down the fiscal, property tax collection in Mumbai displays a 34% shortfall compared to last year as the Brihanmumbai Municipal Corporation (BMC) has issued no residential bills in the middle of confusion over a waiver policy for homes under 500 sq.ft.

Property tax collection in Mumbai was Rs 1,637 crore till 13th December 2019, while last year BMC had collected Rs 2,495 crore till the same date.

Property tax in Mumbai is the largest revenue source for BMC. This year, tax collection has been executed only from commercial firms since the civic body has issued no residential property tax bills at all this year as it has not updated its software and other systems to reject living units under 500 sq.ft while making bills.

The software update has been kept waiting as there is a lack of clarity on whether residential units under 500 sq.ft are to be charged nothing at all or given only a base amount waiver while being asked to pay the other, smaller components of the bill like the various cess on it.

In a recent meeting with the new Chief Minister of Maharashtra Uddhav Thackeray, the civic administration flagged the issue of fund crisis at a time when the BMC plans to take up many big ticket-size projects such as Goregaon-Mulund Link Road and 29.2 km long Coastal Road project.

As per critics, BMC may not touch even half of property tax target

The Shiv Sena, the party which rules the BMC deliberative wing, and is headed by CM Uddhav Thackeray had in its 2017 civic poll manifesto promised property tax waiver for residential units under 500 sq.ft in area.

The BMC also drastically increased its collection target to Rs 8,300 crore this year from the Rs 5,000 crore it used to set itself before now. Critics are skeptical about the Municipal Administration reaching even half of its target.

BMC officials said that the corporation estimates around 4 lakh properties every year. Though the BMC would issue property tax bills amounting to over Rs 5,500 crore every year, the collection target used to be set at only about Rs 5,400 crore.

As outstanding property tax before the beginning of the fiscal was over Rs 10,000 crore, the collection target was improved this time.

A BMC official said, “This time our target for collection is estimated at Rs 8,300 crore keeping in mind the fact that Rs 10,000-crore plus is the outstanding property tax demand of every year that is carried forward on average and we should begin recovering it”

The pending software upgrade and delay in sending out bills were obstructing a significant revenue source, said Asif Zakeria, a Bandra Corporator.

It is expected that the collection will rise once the clarity on the waiver is achieved and bills are issued, said BMC official. They further said that many companies pay property tax in the last month. Therefore, the tax collection in March month always the highest.

The poor collection was due to offering rebates for garbage segregation by BMC, allocating large sums to the cash-strapped BEST Undertaking and commencing infra projects. “I am going to demand a financial white paper,” said Samajwadi Party Leader in the BMC Rais Shaikh.

How to calculate property tax in Mumbai?

The property tax is a %  of the capital value of the property.

Property Tax = Tax rate * Capital Value

Here Capital Value = Rate of base value * Total carpet area/area of land in case of vacant land * building type * age factor * usage factor * floor factor

Property tax payment due date and penalty

Due Date: 30th June

Penalty: It is charged at 2% per month in case of a delay in payment beyond the due date on the outstanding amount.

How to pay property tax in Mumbai?

Property tax can be paid both online and offline.

Online payment

BMC/MCGM

  1. Visit BMC online portal i.e. https://portal.mcgm.gov.in/irj/portal/anonymous
  2. Under the “Online Services” tab click on “Pay Property Tax”
  3. Enter your property account number and choose whether you need to view “outstanding bills” or view “receipts” or “make payment” and click accordingly

Navi Mumbai/NMMC

  1. Visit NMMC online portal i.e. https://www.nmmc.gov.in/navimumbai/
  2. Under “Online Service” click on “Property” and enter you “Property Code” and click “Search”

Offline Payment

If you want to pay manually, it can be paid at the nearest assistant revenue office or BMC helps centers or citizen facilitation centers at all ward offices.

Who are applicable to get concession/exemption on payment of property tax?

  • Flats/houses measuring less than 500 sq.ft are exempt from payment of property tax.
  • A concession of 60% for houses/flats measuring between 500 to 700 sq.ft.
  • Property particularly used for public worship/charitable purposes.
  • Properties belong to the Diplomatic or Consular Mission of a foreign state as specified by the government.

 

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