The cash-strapped national carrier Air India has sold a 1.3-acre land on Chennai’s Mount Road to the external affairs ministry for Rs 97 crore as part of its efforts to reduce debts. The property is located opposite to SIET Women’s College, close to Teynampet.
It was an internal transaction, worked out by the two government departments and effected on Monday, those in the know of things said. The property was put on the block close to two years ago. Efforts to sell it last year failed as the prospective buyers – investors and developers from Chennai – could not match the expectations of the Air India management.
The property has been valued at a little more than Rs 4 crore per ground. “Given the slump in the real estate market in the city, it is a win-win deal for both the seller and the buyer,” said a realty consultant.
Air India has a few more high-value properties in the city, – an office building in Egmore and about 26 acres near the Chennai airport – no plans are afoot to sell them though. The AI management had sold a one-acre plot in Coimbatore to National Buildings Construction Corporation Limited for Rs 20 crore two years ago.
The Teynampet property is the second high-value transaction in the city in recent times. In December, a 2.3 lakh IT park in Perungudi was purchased by a hospitality and jewellery group based in Chennai for Rs 216 crore.
Meanwhile, AI has put up its prime Pali Hill plot in Mumbai for auction with a reserve price of Rs 200 crore. The half-acre plot with a building having 14 apartments is probably the most lucrative real estate that Air India has been trying to sell to shore up its losses, estimated to be around Rs 50,000 crore.
But property market sources told TOI that its auction “flopped’’ last year and the airline was putting it back on sale. “The last time, builders backed out when they found out that the land falls under coastal regulation zone (CRZ) II,’’ said a Mumbai-based developer, who was interested in buying the property.
It is learnt that one of the interested clients for the Pali Hill plot was a top Bollywood actor, who is believed to have offered Rs 150 crore at the last auction. But since the offer was way below the reserve price, it remained unsold. The actor has been scouting for land in Bandra for several years to build a bungalow.
The apartments were built for Air India employees. Recently, the airlines sold six flats in Sterling Apartments at Pedder Road in Mumbai for Rs 132 crore to State Bank of India. Four apartments were sold in the first phase, fetching Rs 88 crore, and another two for Rs 44 crore in the second phase.
Sixteen more apartments in Mumbai will be auctioned with a reserve price of around Rs 60 crore. AI earns an annual rent of Rs 80-90 crore from properties in Mumbai. The airline also plans to sell two flats in Hong Kong for around Rs 110 crore, sources said.
The rapid growth of Indian cities combined with unclear land ownership is increasingly triggering legal disputes, analysts said, while rights groups report violent evictions of poorer communities.
India’s urban population is set to grow by more than 400 million – more than the population of the entire United States – to 814 million by 2050.
As land is sought for offices and homes, developers and officials face multiple ownership claims and unclear titles.
“We have very few records for urban lands, as they were not a priority before,” said Deepak Sanan, a senior advisor at the New Delhi-based National Council of Applied Economic Research.
“Land was only measured and recorded in the rural areas in the pre-colonial and colonial times, as they were considered valuable and taxed.”
Many marginalised communities have been built on disputed land, and the advocacy group Housing and Land Rights Network said some evictions have been violent and took place without proper consultation, consent, compensation or advance notice.
About 31 percent of India’s 1.3 billion population lives in cities and towns, according to census data. But analysts say the figure goes by a decades-old definition of urban areas, and that the real number is close to 60 percent.
So-called peri-urban spaces have grown in the intersection of urban and rural areas, with lands once earmarked for agriculture being used for homes.
Meanwhile, India’s rank for registering urban properties fell to 154 from 138 on the World Bank’s Doing Business Index for 2018.
“We only have a presumptive titling system – it neither verifies that the seller or buyer is the indisputable owner, nor does it guarantee that the property is free from disputes,” Sanan said.
“So everything ends in litigation.”
Matters related to land and property make up about two-thirds of all civil cases in India, according to a study by legal advocacy group Daksh.
Land records are gradually being updated and digitised as India moves towards a conclusive land titling system. Several states are using blockchain technology to record land deals.
Rajasthan set up an independent authority to verify and guarantee land titles in its cities, the first state in the country to do so.
But other authorities remain focused on rural areas, said Frank Pichel, interim chief executive of the Washington DC-based Cadasta Foundation, which develops digital tools to document and analyse land and resource rights information.
“There is certainly a growing demand for mapping urban lands with the rising value of these lands and the potential for conflict. But for now, the focus remains rural,” he told the Thomson Reuters Foundation at a land conference in Delhi.
Punjab Chief Minister Amarinder Singh on Tuesday ordered a strict action against any further illegal colonisation in the state, an official spokesperson said.
He directed the concerned departments to ensure that genuine buyers of plots in legal colonies do not face any harassment.
The chief minister has issued the directives aimed at streamlining urban development and eliminating illegal construction to the state government as well as the Department of Housing and Urban Department, the spokesperson said.
He has also instructed the chief administrators of the development authorities to send updated lists of illegal colonies in their respective jurisdiction as well as within the municipal limits to the concerned deputy commissioners.
All steps should be taken to ensure that there is no harassment to the genuine buyers of plots in legal colonies, the chief minister has directed, the spokesperson added.
The spokesperson further said that the CM has requested his colleagues in the cabinet sub-committee examining the draft policy on this subject to deliberate and give their recommendations to the council of ministers in its meeting to be held in March.
The sub-committee has already held two meetings on this issue.
There are at present 7,301 illegal colonies in the state as per the latest survey. Of these, 2,906 are within municipal limits and 4,395 are outside municipal limits, the spokesperson said.
Residents of Saraswati Vihar have secured a stay order from the Gurgaon civil court on the proposed e-auctioning of a 553.67-square yard plot in the society for residential purpose by the state housing board.
The residents claimed that the plot was earmarked for a park and the housing board had already encroached upon it as well as other open areas in the society. As per rules, a township should have 45% open space.
On February 1, the housing board had issued a notification to auction the plot at a reserved price of Rs 5.5 crore for residential purpose. The bidding had been scheduled for February 21. But Gurgaon Citizens’ Council (GCC) filed a petition in court, seeking a stay on the proposed auction. On Monday, the court issued an order, “restraining” the housing board from auctioning the plot.
According to residents, the colony was developed as per Haryana Housing Board Act, 1971, and licensed by the director of town and country planning department. Currently, over 25,000 residents live in nearly 3,500 houses in the colony.
R S Rathee, GCC president and councillor of ward 34, said in 1988, the government decided to follow norms and standards prescribed under the urban areas Act. He said, “Normally, 55% of the area of any licensed colony can be used for residential purposes and 45% has to be kept for community facilities, including roads, street lights, parks and other utility services. But in this colony, more than 75% of the land has been already used for housing purposes.”
According to residents, the plan to auction the plot is technically illegal and against the urban areas Act.
“This area had to be utilised for a park or other community facilities under the 1988 norms,” said Gaurav Singla, a resident.
“Already, more than 75% of the society is being used for housing purposes and community facilities are lacking. Basically, all major infrastructure players got their licences during 1981–87. Till then, there were no defined norm for community facilities. It was only in 1988 that the government made provisions for the same. While private players follow these norms, it is ironic that a government body isn’t doing so. We don’t even have a community centre here,” he added.
The colony RWA had also written to the chief administrator of the housing board in Panchkula earlier this month to register their protest against the proposed auction.
Mortgage major HDFC has disbursed Rs 2,800 crore loans to 14,290 home-buyers under the Pradhan Mantri Awas Yojna (Urban) so far, which entails a Central subsidy of Rs 302 crore.
The Modi government had launched the housing for all by 2022 in June 2015 and the disbursement is from that period.
While the lender has provided home loans worth Rs 1,728 crore under PMAW’s credit-linked subsidy scheme (CLSS) to the economically weaker section (EWS) customers and low- income group (LIG), it has disbursed loans worth Rs 1,067 crore to 3,526 customers from the middle income group (MIG), it said in report today.
The EWS comprises people with an annual household income up to Rs 3 lakh, while LIG include those with income greater that Rs 3 lakh and up to Rs 6 lakh.
Government launched its flagship PMAY(U) scheme on June 25, 2015 to provide housing for all by 2022. Since then, it has taken several steps such as inclusion of the MIG category under CLSS, increasing the loan tenure to 20 years, extending the MIG scheme till March 2019, increasing in the carpet area of houses under the CLSS for MIG, etc, to increase the scope of PMAY.
It also announced in the Budget 2018 that about 31 lakh homes are to be built in urban areas in FY19, and 51 lakh in rural areas.
“This has renewed the interest of home buyers in the real estate sector and allowed first-time home-buyers to avail more benefits to own a house,” said Renu Sud Karnad, managing director at HDFC.
HDFC had disbursed 39 per cent of home loans in volume terms and 20 per cent in value terms to customers from the EWS and LIG segment during the nine months to December 2017, said the report.
The lender on an average has been approving 8,000 loans on a monthly basis to the EWS and LIG segments, with monthly average approvals at about Rs 1,300 crore, it added.
In value terms, home loans to the EWS and LIG segments grew 32 per cent and 39 per cent, respectively, during the April-December 2017 period.
The average home loan to the EWS and LIG segment stood at Rs 10.24 lakh and Rs 17.38 lakh, respectively.
Till date 4,452 towns have been notified as statutory towns under the housing for all mission and properties located in these towns are eligible for subsidy, according to the report.