Builders resided in Greater Noida, Noida, and Yamuna Expressway are at ease as the Uttar Pradesh government has reintroduced the zero-period policy to deal with delayed real estate projects in the area. Under this policy, the government has decided not to accept the penal interest and other dues on contractors for the period during which their projects were delayed due to action over land grant matters. But, the advantage is only applied to builders who give a lettered pledge that they would finish their projects by June 2021. The benefits will ultimately trickle down to homebuyers. Not only will the policy guarantee quick delivery of housing projects that are held for years, contractors are also expected to pass on the interest benefit for the zero periods to buyers. You may be wondering how the zero-period policy will benefit you. To put in laymen terms, during a ‘zero period’, no interest is levied on land allotment charges. Developers in Uttar Pradesh generally buy group housing land by paying 10% of the total land cost and the rest 90% is paid in installments. These funds have to be repaid at a specific rate of profit. If the project gets stuck and the builder defaults on payments due to liquidity crunch or lack of funds, then additional penal interest is levied on the installments delayed. The zero-period policy defines that if housing project was delayed due to the order by a court or if the Real Estate Regularity Authority (RERA) or the National Green Tribunal (NGT), delayed settlement of agreement fulfilling, then the affected period would be granted as ‘zero’. The policy also includes a situation wherein a developer could not start the production due to the lack of an access road or the authority’s negligence to obtain land at the period of handover. Real estate developers are spared from penal interest and dues with few conditions. A developer cannot charge interest from consumers for the zero-period privilege given by the government. The zero-period policy was initiated in 2011-12 in Greater Noida to support the developers whose projects were affected owing to the farmers’ agitation. The zero-period policy is likely to revive projects of many builders who have been categorized as defaulters due to the pile-up of interest. Entering the debtor category implies a contractor cannot get a new construction loan from banks, which affects the fulfillment of housing projects. Under the zero-period policy, the penal interest is dismissed and builders are capable to restructure their investments. It is will help projects become net worth positive to qualify for the Rs 25,000 crore alternative investment fund announced by the central government recently.
Supertech – a well known real estate group will invest approximately Rs 800 crores this year in order to complete various construction projects to achieve the target of delivering 10,000 flats in the next fiscal year, according to a top company official.
MD Mohit Arora said that Supertech is also looking forward to its sales booking to increase to Rs 3000 crore during the 2018-19 fiscal because of the increase in demand in real-estate, distinctively from ready-to-move-in flats.
In the last 30 years, Supertech has delivered 40,000 apartments and is aiming to deliver 60,000 flats across different ventures, most notably in Noida, Gurugram and Greater Noida.
In ‘Supernova’, a project by Supertech, the company has built 575 units in its 2 towers. A tower for commercial purpose with a massive area of 10 lakh square feet will be completed by end of this year.
The biggest highlight of Supernova will be an 80-storey tower which will comprise of 250 flats and 600 studio apartments. Another tower will have 80 Armani-residencies and 250-rooms hotel.
Supertech Chairman is aiming to deliver 10000 units in the 2018-19 fiscal year.
Supertech is aiming to raise more funds for executing its projects. In December a year ago, it raised Rs 430 crore from Altico Capital to fund its current housing project in Noida and reimburse debt. In September last year to complete its Eco-Village residential project, it had raised Rs 350 crore.