Real
estate values depend on various considerations. There is no set formula to
determine land and rental values.The Guidance Value(GV) approved by Government
from time to time is not based on considerations mentioned in this article, but
is fixed without proper study. The registered values of properties furnished by the sub-registrars for various locations are increased by Government to get
more revenue from registrations.In spite of this, GV approved is found to be less than the market values (MV). The sellers receive
the difference amounts by cash. The is the general practice and every one knows
about it.Law abiding sellers insist on full cheque payment. The various
considerations to determine land and rental values are explained hereunder:
Authorized Site:
An
authorized site will fetch more land / rental value compared to unauthorized
site(revenue site).Agricultural land is converted into non-agricultural land
under the provisions of the Karnataka Land Revenue Act, 1976. In Bangalore urban
area, the Deputy Commissioner of the district is the competent authority to
approve conversion of the agricultural land. In addition to the village
records, other documents verified for conversion are; that the land should not
be under acquisition for any public purposes by BDA, KIADB, KHB, Karnataka Slum
Development Board (KSDB), PWD, etc. If there is no acquisition, the proposed
purpose of conversion should conform to the land use reservation of the Master
Plan. For example, if the land is reserved for public use in the Master Plan, the request for conversion to
residential/ commercial/ industrial, or other urban uses are rejected by the
Deputy Commissioner. The Deputy Commissioner obtains opinion of the development
authority like BDA about acquisition for its schemes, and land use proposed in
Master Plan before taking decision on conversion.
After
conversion of the land under the Land Revenue Act, the land owner has to obtain
approval to the layout/ development plan from BDA. The site in the approved
converted land, and approved development plan for the same purpose is the
authorized site.Building plan for sites in approved layout should be
sanctioned by the concerned local authorities like; BBMP/city Corporation /
municipality, and village panchayat. Regular
municipal sites are authorized sites and will have no problems other than legal
title. The sites on lands without
conversion of the land under the Land Revenue Act, and in layouts not approved
by the development authority like; BDA, BMRDA, etc are unauthorized sites, also
called as revenue sites.
Location :
Real
estate values in posh localities like;
Palace Orchard, Lavelle Road, Palace Road, Jayamahal , etc are high
compared to sites of in other localities. Real estate values in congested and un-hygienic localities
will be much less.
Land use conformity :
Lands/ properties which are conforming to the
land use zone proposed in the Master
Plan will fetch more values as no change in land use from the BDA/ planning authority is
necessary.
Importance of road :
Properties
on important roads like; M.G. Road, Brigade Road, Commercial Street, St. Marks
Road, K.G. Road, Residency Road, Palace Road, Infantry Road, etc will fetch more real estate values.
Road width :
Wider
roads for which higher Floor Area Ratio (FAR) is permissible according to the
zoning Regulations and Building Bye-laws will get higher values. Higher FAR means that
more built up area is permissible enabling good returns on investments. Sellers
mention this to demand their expected
values. Properties on wider roads therefore fetch more land values.
Parking spaces ;
Availability
of reserved parking space will attract the buyers/tenants to consider higher
values. It is not safe to park the vehicles on roads in front of their
residences/apartments. In many cases, even road spaces may not be available due
to high vehicle ownership.
Civic amenities :
Real
estate values will be more in localities with the required civic amenities
like; market and shopping facilities, good convents, park and play grounds ,
etc. Some type of religious buildings in
an area attracts religious minded people to buy properties around them.
Connectivity :
If
the area has good connectivity from bus terminals, mass transport routes ,
local railway stations which may later
become proposed suburban railway stations, and metro stations will attract
buyers as there is acute traffic congestion risk for
use of their own vehicles. Zoning regulations provide higher FAR for the
properties along the Metro routes to enable better usage of Metro Rail.
Apartments :
People
of higher middle income and higher
income groups prefer convenient
apartments well maintained with landscaping, play spaces, etc. In addition to nearness to civic amenities, flat designs, balconies with sit-outs,
privacy ,etc are preferred by buyers / tenants.
In
group housing projects, which are called
gated communities, the flats which face open spaces for morning walk and exercise, children’s play facilities, meeting
of house wives, etc will have more demand than those facing traffic roads with
dust and noise nuisance. Lower floors which occupiers can climb during
power cuts are preferred. Availability of diesel generators in tall buildings
for use of lift, and general lighting will have better demand.
Space
In commercial complexes facing important main roads will have demand. It is
observed that business in ground floor shops is better than shops inside
the building. This is the experience in
most of the complexes including shopping malls like Sigma Mall on Cunningham
Road. Offices facing the main roads,
especially those requiring publicity, will have more demand as the traffic moving
on the main roads will be able to see the name boards of such offices.
It
is very difficult to get tenants for very big offices. We see everywhere, ‘To-Let’
boards for months together. One such case is the space vacated by ‘Reliance
Times Out’ in Prestige-Feroz building on Cunningham Road. Moderate and smaller
size offices are in demand as most of the private enterprises require 500 to
1,000 sq. ft. offices. Similarly, it is
very difficult to get tenants for luxury
apartments like Mantri Apartments near Cubbon Road. Most of the flats in this building are vacant. The club houses, gym, swimming pool,
etc in such luxury apartments are not able
to support these facilities with very few people.
Areas
nearer to well known companies like Wipro, and Infosys have more land and
rental values. Ancillary units, and private sector enabled services like to be
around such companies. Properties along Bannerghatta
Road, Hosur Road, Sarajapur Road, HAL Airport Road, White Field Road, Old Madras Road, BIA Road and Bellary Road,
are in demand. Apartments in these areas are in demand as employees of well
known companies and multi-national offices with
higher salaries like to live nearer to their offices.
The real estate values on one way roads are less than two way roads. Values reduce
on roads where new one way restrictions are introduced as it is not convenient
to approach the properties. Even business is affected on these roads for this
reason.
Conclusion :
Buyers/investors/ tenants can consider all the above
points while purchasing residential/commercialproperties.
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