Marg Savithanjali - OMR

Marg Savithanjali - OMR Road, Chennai MARG – Savithanjali is located on Old Mahabalipuram Road, near SSN College next to Kelambakkam Junction.Savithanjali is all about luxurious living, living in the open. Savithanjali is designed in a way to allow maximum sunlight and air into the building, Savithanjali is a premium residential project by Marg which offers tech savy smart homes. Savithanjali uses technology to the maximum to offer best possible safety, convenience and cost efficiency with some of the unique features are: Video door phones, mood lighting, access control, centralized monitoring, energy conservation features and many more.


Location: Kalavakkam, OMR, immediately after Kelambakkam junction.

Apts: 702 apartments in 5 Blocks.

Structure: Stilt + 18 Floors.

Price Range: 35-55 lacs

Completion Date: September 2012.

Launch Price: 2799/ sq ft

Salient Features

Amphi theatre, Tennis court, Badminton court, Basketball court, Swimming pool, Toddlers pool Jogging track, Meditation hall, Children’s play area, Club house.

Government has announced the establishment of new IIT in a close proximity.

Close by to KRISP IT park.

Residential allotment for all international embassies in that area is also announced by the Government.

Type	Size(sft)	Rate(per sft)	Base Cost
2 BR 2 T	1157	2799	32,38,443/-
2 BR 2T 1 Study	1285	2799	35,96,715/-
3 BR 3T	2799	2799	45,79,164/-

* Other charges extra as applicable. Prices as of launch.
http://www.margproperties.com/savithanjali/

Price last heard: Rs. 2900 per sft

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Does a Apartment Price Depreciate?

Most of us have thoght that the value of a plot appreciates more than a flat. Is that true?

The answer in short is - It Depends.

Yes, It depends on a lot of things. Getting a plot in a area that would not develop in the next few years is wose than getting any stupid apartment in good locality.

More so, it depends on these qualities of the flat:

Builder	Flats/apartments by good builder and promoters demand a higher valuation.
UDS	Some flats come with a higher UDS – those are helpful when the flat is sold. Older the apartments, UDS is more important.
Locality	A flat is bought in second hand mainly due to this – they like the locality. So, if there are schools nearby, bus facilities to the office they need to travel to, the buyer is interested. Anything from Water logging to sewage/water facilities should be considered.
Maintenance	Keep your home well, it gets a better price. This is true for the community and the building as well. better it looks, better it would last – more you can sell it for.
Parking	This is essential for the sale-ability of the apartment. People need to park their cars/bikes – so make sure your apartment has enough.
Internal Layout	Buyer needs to like the layout before he/she buys it.
Transportation	Bus/train facilities and good roads around the flats when you sell fetch you better value for the investment
Lift	I guess this is obvious, people like comfort – lift becomes essential in a few years from now.
Security	Gated communities sell at 15-20% premium
Rental income	A lot of people buy homes in the same place in which they were living rented. So, instead of paying more rental income, they own home in the locality they are used to. A lot of others buy to rent the home – Here, rental income is very important
Facilities	Gyms, Tennis courts, Swimming pools, parks, walking areas, halls to rent, shopping areas – all this helps in its own way.

The last thing I want to say is, If you are selling a apartment in good shape - you can sell at 20-25% below new apartments selling in the same area.

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Metrozone @ Anna Nagar

Residential project with Mall, multiplex, hotels etc. located at Anna Nagar (off Jawaharlal Nehru road). Tennis courts, basket ball courts are a plus. Expected cost is Rs. 2500 Cr. Set in a area of 42 acres. 1700 apartments in 29 towers are planned.

2BR/3BR/4BR/Townhouses/Penthouses. Possession has been promised by October 2011 and construction is in progress.

ground + 16 floors
64 flats per building
basement car park
2 carpark space for 4 bedroom and above
there are also some service apartments

There are some legal issues which may delay the project.

1)    The land was originally with a Company Krishna Tiles, which tried to promote a project sometimes in 2000. For some reasons, then promoters did not get the CMDA approval and refunded the booking amount taken by them for the apartment booking, after 3-4 years.

2)    Ozone bought the land sometimes middle of this decade and managed to get the CMDA approval after about 3-4 years - I am told they had to spend heavily (bribes ?) to get the approvals. I am not fully familiar with all disputes surrounding the land, but could dig out the following info:

a) HR & CE claims ownership of at least some of the land - this was apparently gifted long back by the original owners to build a temple. Ozone salesperson told me that the land in dispute only effects Phase III of the project, which has not yet been launched. They claim to have won the case in Madras High court and an appeal by HRCE is pending in the Supreme Court.

b) One of the minority owners of Krishna Tiles (probably a family member of original owners) has filed a case claiming the land was sold without his consent. Ozone salesperson told me that this guy has only a 4% stake in Krishna Tiles and his consent is not required to sell the land.

c) About a year back, some people took out ads in newspapers claiming that the land belongs to them and cautioning public against booking in the project. I have no idea who these people were - but talk is that they belong to the family that owned Krishna Tiles. After this ad was taken out, new bookings stopped completely and the builder dropped the price from 6000 to 5300 to attract investors.

One good thing is that CMDA approval is in place now- I guess, subject to outcome of the case in Supreme court. Prospective buyers should do a detailed investigation into the above matters before buying. Otherwise, it seems a great project at an attractive price, despite proximity to Cooum

http://docs.google.com/leaf?id=0B0kfAImTou94M2I3ZTU2ZDktY2VjYy00NDMyLWI0YjMtZjg2NDhjNWUxMGFm&hl=en

Cost

Base price starts at 85 Lakhs (for 1555 sqft).

Soft launch cost (Apr 07) was Rs. 4500 per sqft. Went up to Rs. 6500. Now down to Rs. 5500 to 6000 per sqft.

Ambience

Site address is 44, Pillayar Koil Street (Jawaharlal Nehru road), Anna Nagar, Chennai – 40. Anna Nagar is a well sought after residential location.

Schools like SBOA, DAV are near this location. Hospitals like Sundaram Medical Foundation, Anna Hospital are very near as well.

Koyambedu bus terminus is very near as well. http://www.wikimapia.org/#lat=13.081161&lon=80.195088&z=17&l=0&m=a

Travel

With 100 ft road nearby and very good bus facility, travelling to work/shopping is very easy. Things become when Anna Nagar gets its METRO facility.

Company/Builder

Ozonegroup is a Bangalore based real-estate company which is promoting this in partnership with HDFC and Urban Infrastructure Opportunities fund (Anan Jain, a close associate of Mukesh Ambani). Not a well-known developer though.

Common Amenities

STP/Water treatment, security system, tennis and basket ball courts.

Interior

Granite for kitchen, paneled doors, wooden flooring in master bedroom, vitrified tiles. Wall tiling up to ceiling in bathrooms.

Hidden Costs

Approximately Rs 4600/- per month for the Maintenance for 1550 Sq ft home.

Do add your comments if you think project has hidden costs involved.

Penalty cost – 15 per sq ft every month as penalty

Engineering

RCC with seismic zone 3 compliance. RCC walls or concrete solid block walls.

Resale-ability/Rent-ability

Given the location I see great opportunity

My rating

A+ for peace lovers
A+ for action lovers
B- for bachelors (if you work in OMR, NH45 and it is heavy cost)
A+ for family (nearby school, crèche, hospitals, great shopping)
A+ for shopping freaks

A+ for party goer
A for aged (Place to walk, hospitals nearby, but heavy noise and traffic outside complex)
A- for investors (not sure of builders)

All this is in case the litigations go in favor or Ozonegroup.

Links

Master plan

Official Site

Location Map

NDTV property

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Deferred EMI

To offset the slowdown in sales, many developers have lately introduced no EMI or deferred EMI offers. The thought of not having to pay interest, especially in this high interest rate environment, is certainly tempting. However, despite such offers, only some of these projects are attractive investment options. In this blog post, I will describe the steps you need to go through, as an investor, to analyse the attractiveness of such offers.

What is deferred EMI option?


A slowing real estate market has led developers to think up creative solutions to offset a declining top line. Under the deferred EMI option, developers tie up with leading home loan institutions and agree to absorb the interest component of the EMI on behalf of buyers. Depending on the offer, EMI’s may be deferred for a period of 12, 15 or 18 months. As yet, I have not seen developers offer deferred EMI option beyond 18 months. Of course, the longer the EMI deferment, the more advantageous it is for you as an investor.


How to analyse deferred EMI offers?


To determine suitability of a deferred EMI offer, I will make a specific comparison between a deferred EMI option and an apartment from the resale market. Both projects are in Gurgaon, are comparable in quality, location and builder reputation. At first, let’s evaluate the deferred EMI option:


Deferred EMI option-Unitech Harmony in Nirvana Country


1.Determine the total cost and size of apartment. For simplicity, I have assumed total price of apartment to be price multiplied by size of apartment (I have not included extras such as car park, EDC, IDC, etc.)
2.As of this writing, the offer price on Harmony apartments by Unitech is Rs.4700 psf. Let’s assume a size of 1750 sq ft. Therefore, price is Rs.82.25 lacs (Rs.4700 X 1750)
3.Under the deferred EMI plan, the bank/developer will ask the buyer to pay 10% of the amount upfront before the bank makes the balance 85% payment.
4.Therefore, as a buyer you will be required to pay Rs.8.23 lacs (10% of Rs.82.25 lacs)
5.The bank will pay 85% to the developer (Rs.69.91 lacs) and the balance 5% will need to be paid by you at the time of possession of apartment (24 months from now).
6.In the above example, the amount of interest that the developer will have absorbed on your behalf is Rs.11,53,515 (Rs.69.91 lacs @11.00% for 18 months).
This is the point where everything becomes fuzzy. On the face of it, it looks great to know that Unitech is going to absorb Rs.11.54 lacs on the buyers behalf towards interest. Prima facie this appears to be a discount on the sticker price of Rs.82.25 lacs. However, this would be the wrong way of analyzing this offer. This offer needs to be analysed in comparison to other deals available in the market.


Firstly, in deals available in the resale market, you are not required to pay 95% (10%+85%) of the payment in 30 days. Such an amount is paid over a longer stretch of time-normally 24 months. Therefore, the gainer in such an arrangement is Unitech and not the buyer since in reality buyers are not required to pay the entire amount upfront in a construction linked plan. Therefore, if buyers were paying interest on their own, they would not pay interest on 85% from Day 1. This offer is somewhat akin to buying a car with a gold steering wheel and gold music system while you don’t need either of them. The seller of the car then gives you a 50% discount on the sticker price but in the end the car is still 25% more expensive than other cars in the market! In summary, you are being made to feel good about something you don’t really need.


Resale market option-Vatika Jasminium in Vatika City


1.Possession of this apartment building is expected by December, 2009.
2.As of this writing, Vatika Jasminium apartment in Vatika city is available for Rs.3500 psf.
3.Total cost of a Jasminium apartment will therefore be Rs.61.25 lacs. (Rs.3500 X 1750 sq ft)
4.Assuming you take a home loan, the bank will ask you to pay 15% of cost of apartment before they start making payments. This would be Rs.9.19 lacs. (15% of Rs.61.25 lacs)
5.As of this writing, approximately 50% payment towards this apartment has already been made i.e. Rs.30.63 lacs. Of this, Rs.9.19 lacs will be your contribution and the balance will be by the bank i.e. Rs. 21.44 lacs.
6.Since this is not a deferred EMI plan, you will be required to pay interest on this amount of Rs.21.44 lacs from Day 1.
7.Total interest to be paid on Rs.21.44 lacs over 18 months @ 11% p.a. will be Rs.3,53,760 (A)
8.Additionally, over the next 18 months period the developer will ask for more payments, say another Rs.24.50 lacs.
9.Rs.24.50 lacs is not the average over 18 months but the total amount paid. Let’s assume the average during this 18 months period is Rs.20 lacs. Therefore, interest cost on Rs.20 lacs @ 11% p.a. over 18 months is Rs.3.30 lacs (B)
10.Therefore, total interest cost incurred over 18 months period will be (A) + (B) =Rs.6,83,760
11.Total cost of apartment is Rs.68.09 lacs (Rs.61.25 lacs + Rs.6.84 lacs) at the end of 18 month period.
Prt ima facie the deferred EMI plan may appear very attractive. However, on close examination, buying the apartment in resale markets is clearly a better option. This may not always be the case in all comparisons. In the above example, I have simply highlighted a methodology. You may apply this approach and methodology to evaluate any deferred EMI option with other available options in the market.


There are two very dangerous aspect hide out under deffered EMI option.


Firstly, under this scheme developers gets 95% of the flat value in his pocket and bank gets the upfront interest for the 18 months on NPV basis.The only loser in this case is the customer. It is the customer who loses the cash down discount because under this scheme developers never offer the cash down discount to the customer inspite of the fact that they received 95% of the flat value upfront. In other words, It is the customer who is paying upront interest to the bank routed through builder.


Secondly, in case of the delay in the custruction of the project and possession got delayed by more than 18 months. Bank will start taking the EMI after 18 months.This is the hide out aspect of this scheme which is never explained to the customer.


So My sugeestion are:


1. The customer go for custruction linked plan both under resale or direct allotment deal. Your funds are safe in case of delay of project and you will pay the interest only on the drawdown amount from the bank


2. If you are brave enough to go for the cash down payment to builder in current scenario then instead of going for the Deffered EMI scheme plan, one should raise the loan upto 85% of the flat value and avail the cash down discount (which is normally 8-10%) from the builder and start paying the EMI to the bank (provided you are comfortable in paying the EMIs)


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