Norm on 70% money in escrow to hit realtors' cash flow to hit realtors' cash flow

 

Normally, developers presell their apartments at lower price points to buyers before obtaining approvals to part-fund land acquisitions

 

WASHINGTON, Dec. 18, 2015 /PRNewswire/ -- A significant piece of tax legislation is now on its way to the President's desk, and the bill includes the extension of a number of expired tax provisions important to supporting homeowners and real estate investment.

Tom Salomone, National Association of Realtors® president and broker-owner of Real Estate II Inc. in Coral Springs, Florida, praised Congressional leaders today after the House and Senate passed a tax extenders package that includes many provisions supported by NAR.

 

"These tax extenders offer critical support for consumers, homeowners, commercial property investors and small businesses alike," said Salomone. "A strong economy requires certainty, and this proposal gives a healthy dose of it to millions of American taxpayers."

Salomone highlighted the decision to extend tax relief for mortgage debt forgiveness as a win for Realtors®. This provision protects underwater homeowners from incurring a large tax bill on phantom income in connection with a workout or a short-sale. Since 2007, this tax relief has strengthened individual communities and the broader economy as more distressed homeowners were offered the flexibility to responsibly address an underwater mortgage. The tax extenders deal offers an additional two years of protection covering tax years 2015 and 2016.

The bill also includes a permanent extension of a 15-year cost recovery period for the depreciation of qualified leasehold improvements. This provision ensures that a commonsense cost-recovery period remains permanently in place for improvements made to nonresidential commercial property.

Real-estate related provisions also include the renewal of certain incentives to promote energy efficient commercial and multifamily buildings. Similarly, an expired tax credit of between $1,000 and $2,000 for energy-efficient new homes is extended for an additional two years under the bill.

The legislation also permanently extends rules allowing small–and mid–sized businesses to immediately expense business equipment, rather than depreciate the equipment over several years.  This is important to Realtors®, who purchase new computers, copiers, cameras and even vehicles in the course of doing business.

Finally, the tax bill also includes changes to the Foreign Investment in Real Property Tax Act (FIRPTA) that will ease restrictions on investment in commercial real estate.

NAR sent a letter to House and Senate tax-writing committees as the final package was being developed to ask for support on maintaining these key provisions. Salomone thanked members on the committee for their leadership and attention to Realtor® concerns.

"We're grateful for the leadership shown on this important piece of legislation and look forward to continuing our work in support of homeownership," said Salomone.

The bill is expected to be signed quickly into law by the President.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

National Association of Realtors® Applauds Passage of Tax Extenders Package

WASHINGTON, Dec. 18, 2015 /PRNewswire/ -- A significant piece of tax legislation is now on its way to the President's desk, and the bill includes the extension of a number of expired tax provisions important to supporting homeowners and real estate investment.

Tom Salomone, National Association of Realtors® president and broker-owner of Real Estate II Inc. in Coral Springs, Florida, praised Congressional leaders today after the House and Senate passed a tax extenders package that includes many provisions supported by NAR.

 

"These tax extenders offer critical support for consumers, homeowners, commercial property investors and small businesses alike," said Salomone. "A strong economy requires certainty, and this proposal gives a healthy dose of it to millions of American taxpayers."

Salomone highlighted the decision to extend tax relief for mortgage debt forgiveness as a win for Realtors®. This provision protects underwater homeowners from incurring a large tax bill on phantom income in connection with a workout or a short-sale. Since 2007, this tax relief has strengthened individual communities and the broader economy as more distressed homeowners were offered the flexibility to responsibly address an underwater mortgage. The tax extenders deal offers an additional two years of protection covering tax years 2015 and 2016.

The bill also includes a permanent extension of a 15-year cost recovery period for the depreciation of qualified leasehold improvements. This provision ensures that a commonsense cost-recovery period remains permanently in place for improvements made to nonresidential commercial property.

Real-estate related provisions also include the renewal of certain incentives to promote energy efficient commercial and multifamily buildings. Similarly, an expired tax credit of between $1,000 and $2,000 for energy-efficient new homes is extended for an additional two years under the bill.

 

The legislation also permanently extends rules allowing small–and mid–sized businesses to immediately expense business equipment, rather than depreciate the equipment over several years.  This is important to Realtors®, who purchase new computers, copiers, cameras and even vehicles in the course of doing business.

Finally, the tax bill also includes changes to the Foreign Investment in Real Property Tax Act (FIRPTA) that will ease restrictions on investment in commercial real estate.

NAR sent a letter to House and Senate tax-writing committees as the final package was being developed to ask for support on maintaining these key provisions. Salomone thanked members on the committee for their leadership and attention to Realtor® concerns.

"We're grateful for the leadership shown on this important piece of legislation and look forward to continuing our work in support of homeownership," said Salomone.

The bill is expected to be signed quickly into law by the President.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Hyd Park‎ to In conversation with Sri K T Rama Rao (KTR)

 

 

Welcoming all citizens of the twin cities for this fascinating conversations on all things Hyderabad with Mr. K T Rama Rao (KTR) at 6.30 pm today at Rock Heights, Shilparamam.

Looking forward to seeing you there. The event is FREE and OPEN to all of us.

Realtors upbeat over easing of FDI norms

 

Real estate industry expects inflow of foreign capital in the sector to be more than 15 per cent after the government eased FDI norms, a survey by industry body FICCI said.

With the real estate industry facing a huge slowdown for the past 2-3 years, the government last month relaxed foreign direct investment (FDI) norms in construction sector by removing two major conditions related to minimum built up area as well as capital requirement.

“According to FICCI survey, industry is happy and satisfied with current FDI reforms in construction development sector and has shown high level of confidence and optimism towards future flow of foreign capital into realty sector,” the industry chamber said in a statement.

The survey amongst various stakeholders comprising developers, investors and consultants was conducted to assess the mood of real estate industry and their perception on relaxed FDI norms for the real estate sector.

“Respondents were optimistic and felt that FDI reform measures will certainly increase flow of FDI into realty sector in coming months.

According to DIPP, Indian real estate has attracted about $24.16 billion FDI in construction development sector during April 2000 to September 2015.

However, FDI in construction development sector has been declining over the past few years due to regulatory issues and slowdown in Indian real estate, FICCI said.

Majority of the respondents fell that the commercial and retail sector would receive maximum foreign capital followed by the residential sector.

Almost all respondents felt that the easing of exit norms would cheer foreign investor community and have a major impact on attractiveness of Indian real estate going forward.

To attract FDI in realty sector, the industry has suggested that states should put in place a more efficient approval process system of projects.

The states should ensure better governance through measures such as single window clearance, time bound clearances, quicker legal remedies for investors and faster resolution of consumer woes through regulations such as state real estate regulators, among others, it said.

Godrej Properties sells 300 apartments in a week

Mumbai-based real estate developer Godrej Properties announced that it has sold 300 apartments within one week at The Trees, its flagship project in Vikhroli, Mumbai. This represents more than 80 per cent of the 374 apartments it opened for sale in the first phase of this project. The value of apartments sold is in excess of Rs700 crore making this Godrej Properties’ most successful ever launch in terms of value of real estate sold. This is also one of the country’s most successful recent launches.

The Trees mixed-use development contains a commercial precinct spread across 9.4 acres, which houses Godrej One, the Godrej Group’s global headquarters. Commenting on the development Pirojsha Godrej, Managing Director & CEO, Godrej Properties, said, “We are thrilled with the customer response to the launch of The Trees in Vikhroli. We will do everything possible to ensure we deliver our customers an outstanding and innovative project.”

Housing.com to get $50 million from Japanese bank

Japan’s SoftBank is set to offer $50 million funding to housing.com. The Mumbai-based start-up, which is backed by SoftBank, Falcon Edge Capital and Nexus Venture Partners, has already raised $100 million.

According to a senior executive from Housing, SoftBank would be investing $50 million in the start-up in “December or latest by January”.

In August, Housing trimmed its verticals and laid off 160 people as part of its growth strategy. Another round of lay-offs was effected in November and the company was able to reduce its burn rate.

The start-up, founded in 2012, has also brought together its sales and marketing division to strengthen it and form “better synergy with monetisation and focus on core fundamentals”.

Of its five verticals — rent, buy, land, short stays and commercial — Housing has decided to focus only on the buy-sell segment.

Mumbai, B’luru to lead in Grade A office stock

Mumbai and Bengaluru are expected to lead the country in terms of total operational Grade-A office stock of 100 million sqft and about 93 million sqft, respectively, by the end of 2015, according to a study.

Strong demand from IT occupiers for relatively larger spaces is helping Bengaluru to build more, which will gradually narrow down the gap in operational stock of both these cities, the study said.

The study titled 'Housing for All: Catalyst for development & inclusive growth,' was conducted by The Associated Chambers of Commerce and Industry (ASSOCHAM) jointly with property advisory firm JLL.

Amid tier-II cities, Pune is expected to lead the market in constructing new office spaces thereby adding about 45 million sqft space, it said. According to the study, the total stock of Grade-A office space across top seven cities is likely to settle at 440 million sqft by end-2015.

Robust take-up of about 31 million sqft is projected for 2015 while a total of about 34 million sqft of office space is expected to become operational.

“Over the past few months, an improvement was seen in occupiers' sentiment in commercial real estate”, said D S Rawat, secretary general of ASSOCHAM while releasing the findings of the study.

“With a pro-business government at the Centre, the office sector is expected to see a lot more traction and various multi-national (MNC) occupiers and investors entering the country”, said Rawat.

During the second half of 2015, an improvement in business sentiment will likely result in greater confidence and implementation of expansion plans will result in an increase in net absorption, the study said.  — Agencies

Reading-Berks Association of Realtors installs 2016 officers, directors

 

Reading Eagle: Jeremy Drey | The Reading-Berks Association of Realtors installed its 2016 officers and board members Dec.18 during a dinner at the DoubleTree by Hilton, 701 Penn St. Seated, from left, are: Jack Evans, director; David Mattes, past president; Angela Tolosky, director; and Sharon Kehres, president-elect. Standing, from left, are: Craig Stringer, director; Jaime Perez, director; Kate Steffy, director; Eva Eisenbrown, president; Mark Mohn, director; Merlin Weaver, vice president; Glenda DeLillo, secretary and Jerry Buffa, treasurer

Marvel Realtors buys German Consulate's land in Pune for Rs 168 crore

MUMBAI: In the most expensive land transaction in Pune, realty developer Marvel Realtors has acquired a 3-acre land parcel auctioned by the Federal Republic of Germany for Rs 168 crore. The developer has paid Rs 56 crore per acre price for the land parcel at Pune's Boat Club Road, a prime location in the city.

Around 10 real estate developers from Pune and Mumbai had shown initial interest in the property that used to house hostel for students of Goethe-Institut Max Mueller Bhavan, Pune. However, the hostel has been shut for more than five years now.

The land parcel was put on the block nearly six months ago by the Consulate General of Germany. Out of the initial 10 entities, five were shortlisted and were asked to send in their revised closed bids.

"We are planning to develop a luxury residential project on the land parcel and with total development potential of 3.80 lakh sq ft, it will offer us revenue worth Rs 800 crore over the next four years," Vishwajeet Jhavar, CEO, Marvel Realtors, told ET. The company is aiming to complete the project in four years after receiving the approvals that are expected in the next six months, he said.
The developer has partnered Piramal Fund Management for the project and both the entities will hold  ..

"We are pleased to deepen our ties with Marvel in Pune and are even more pleased to have secured an attractive and extremely well located development site. We constantly endeavor to deepen our funding relationships with existing partners and Marvel has delivered on our expectations across previous investments," said Khushru Jijina, Managing Director, Piramal Fund Management. "We are happy that we are Marvel Realtors' strategic partner not only in land acquisition but also in project related deci ..

This is Piramal Fund Management's fourth equity transaction in Marvel Realtors' projects over the past three years. Since February 2013, the fund has invested more than Rs 430 crore in the developer's projects including this investment.

While Marvel Realtors emerged as the highest bidder, the deal was concluded on Tuesday following an approval from the Parliament of Germany. India's ministry of finance has also approved the transaction.

Currently, Marvel Realtors' has a total of 15 million sq ft under construction in Pune and this will be the developer's ninth project in Boat Club Road and Koregaon Park locality of Pune. It also has few projects in Bengaluru and Goa.

HDIL sells Mumbai land parcel to DK Realtors for ₹649 crore

Listed real estate player Housing Development and Infrastructure Ltd (HDIL) has sold a land parcel in Kurla, a Mumbai suburb, to DK Realtors for ₹649 crore.

Sources close to the development said the company has sold the four-acre plot to the Dheeraj Realty subsidiary, which is planning a residential project there.

Sources in Dheeraj Realty said that the residential project will have 8 lakh sq.ft of saleable space.

HDIL’s Vice-Chairman and MD Sarang Wadhawan had earlier said the company was looking to pare debt by 15 per cent by selling its non-core assets. Its debt as on September 30 stood at ₹2,908.11 crore.

Non-core assets

“We are looking to achieve debt reduction by largely selling non-core assets. We have put land banks outside Mumbai for sale. And, we hope to close some transactions in Mumbai soon,” Wadhawan had said.

The company had also spoken of plans to sell land parcels in Vadodara and Hyderabad as part of the strategy.

The company is investing about ₹150 crore in the first phase of its upcoming affordable housing project at Virar in Mumbai. The project is spread over 550 acres.

The real estate company had reported a 7 per cent decline in its consolidated net profit to ₹57.79 crore for the quarter ended September.

Realtors find new home in Vancouver

For nearly 30 years, Windermere Stellar's Vancouver office was housed among the historic buildings of Officers Row at Fort Vancouver.

That changed recently, when the firm packed up and moved its 44 real estate brokers, along with staff and managers, to a new home in the former Vancouver City Hall building at 210 E. 13th St. That building has been completely remodeled and now features an open floor plan and plenty of natural light thanks to floor-to-ceiling windows.

There are also private offices and a cafe area that brokers use as a gathering spot.

Windermere occupies the entire first floor, though there is room for additional brokers to join as needed. Stewart Title is on the second floor of the building and Penrith Home Loans, Windermere's mortgage arm, also has an office within Windermere's new home.

“We couldn’t be more excited about the synergy this office will bring to the team. While we loved our charming former setting, we were divided between two buildings,” said Gerry Dowdy Latshaw, managing principal broker of Windermere Stellar’s Vancouver Metro, in a release.

“The location connecting us to downtown is a plus for brokers who are endlessly on the go.”

Traders, realtors seek reduction in Collector’s rates

Representatives of traders, industrialists and property consultants on Thursday urged Deputy Commissioner Ajit Balaji Joshi to immediately reduce the Collector rates in Chandigarh.

The Deputy Commissioner, along with Assistant Estate Officer Prince Dhawan had called the meeting of various associations representing traders, industrialists and property consultants for discussions and seeking their suggestions on reduction of Collector rates in Chandigarh.

Kamaljit Singh Panchhi, president of the Chandigarh Traders’ Association, Sector 17, said, “Traders, industrialists and residents of Chandigarh have been demanding for long to reduce the Collector rates in Chandigarh as the existing rates were not in sync with the actual market rates. “In fact the rates in the adjoining areas are much below the rates in Chandigarh which is evident from the revenue receipts during the last three-four years,” he pointed out.

LC Arora, general secretary of the Chandigarh Traders’ Association, Sector 17, said in Chandigarh, the Collector rates were increased by 10 per cent in September, 2012. However, the increase to the extent of 50 per cent in August, 2013, shooting the rates up from Rs 54,912 per square yards to Rs 82,368 per square yard was “unwarranted and much higher than the market price”.

Panchhi further said, “We would like to put on record that Panchkula, Mohali and Zirakpur had decreased the Collector rates after experiencing downfall in the registration of properties. The UT Administration must not delay the revision and reduce the rates to the extent of 40 to 50 per cent in the larger public interest,”

The Deputy Commissioner assured the meeting that the suggestions would be considered and decisions would be taken accordingly

Realtors rush to drawing board to plan townships

Major city developers have rushed to the drawing board to plan suburban townships following a state urban development department notification that offers various concessions to such projects on land parcels of 50 acre or more.

"We were waiting for a policy on land in excess of the 24.2-acre ceiling. The new township policy has clearly outlined what needs to be done. This is a great opportunity for developers focused on affordable housing segment.We have begun evaluating opportunities towards Kalyani Expressway," said Siddha Group managing director Sanjay Jain.

Apart from the minimum 50-acre stipulation, the policy states that 75% of the land must be used for residential units and rest can be developed commercially to set up markets, hospitals, schools, offices etc. Of the 75% earmarked for residential, a quarter has to be earmarked for houses for economically weaker sections (EWS) and another quarter for a socio economic activity like healthcare or sports infrastructure or any theme for that township. The remaining half of this pie can be used for MIG and HIG housing.

The policy allows a single party to procure land after procuring prior permission from the government or aggregation of land parcels by multiple land holders. It also allows purchase of land by a company with a declaration that no force was used to procure it. The policy also allows inclusion of vested land on long-term lease.

The state government itself plans to auction government land for development of such townships by private firms. "The state government has identified 447 acre for six theme-based townships in Kalyani, Bolpur, Dabgram, Asansol, Dumurjala and Baruipur.Tenders have already been floated for 'Uttam City' in Baruipur," an urban department official said.