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While on a house-hunting spree, prospective buyers do a great amount of homework before identifying their dream home - the location, property rates in the vicinity, carpet area, developer?s reputation, proximity to the railway station/bus stop and so on.
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Country’s largest realty firm DLF has sold 150 plots, garnering more than Rs 500 crore, in a township project at Gurgaon, PTI reported, citing sources. DLF launched a 100-acre township ‘Alameda’ in Gurgaon. In the first phase, it released 150 plots at Rs 60,000 a sq yard with inaugural discount of 10 per cent and they were sold within a few hours of the launch, sources said. The plots are available in two sizes — 540 and 700 sq yards.
DLF has launched plots in Gurgaon after a gap of few decades, although it has been developing many group housing project there. The company achieved a sales realisation of more than Rs 500 crore, with an average price for each plot at about 3.5 crore, sources said, adding that it received more than 150 applications.
DLF spokesperson could not be reached for comments. DLF would launch another 200 plots in the township, where it plans to develop shopping centre and provide facilities like healthcare and recreational facilities for the residents. At present, the company has 406 million sq ft develop-able area in-hand, out of which construction is under way in 57 million sq ft of area.
Religare Enterprises is close to buying 85% of the Ajay Piramal Group promoted real estate fund Indiareit Fund Advisors, valuing the entire fund at around Rs 250 crore, two persons directly involved in the transaction said. The deal is expected to be announced by the end of December, they said. Indiareit managing director and chief executive officer Ramesh Jogani and his team of 20 employees will hold the rest. The fund, started in 2006, is currently managing three domestic and an offshore fund with assets totalling around Rs 2,850 crore, and is planning to launch two more funds to raise Rs 1,350 crore. It also advises the London-listed Trikona Trinity Capital that manages a Rs 1,200-crore fund in India.
The Ajay Piramal Group is exiting from the fund because of a likely conflict of interest as the group is now focused more on land acquisition and development. “There is an inherent conflict in fund management and the real estate business. The realty fund is a small business (compared to realty) for Piramals and there is no reason for exiting this business other than focus on the land acquisition business,” said a real estate industry official. Realty constultancy firm DTZ is acting as the advisor for the transaction. IL&FS Investment Manager and Blackstone were also believed to be in talks for acquiring stake in the realty fund but have been edged out by Indiareit. Indiareit’s Jogani declined to comment on the story. Mr Piramal, when contacted, said he was in a meeting and will not be able to respond immediately.
Religare in its email response said: “Religare constantly evaluates opportunities of inorganic acquisition of various assets across the globe. As on date, Religare has not signed anything with respect to Indiareit as is being discussed and reported by certain section of the media.” Last week, Religare Enterprises announced a pact to acquire a 55% stake in Landmark Partners for $171.5 million. Landmark is a private equity and real estate fund-of-funds asset manager, focused on secondary transactions with more than $8.3 billion of committed capital. On Monday, shares of Religare Enterprises closed at Rs 482.95 on the National Stock Exchange , down 1.9% from Friday’s close.
Six real estate companies, all set to raise over $2.9 billion or Rs 13,000 crore through the capital market, have postponed their plans till the middle of next year. Industry experts have blamed the LIC scam for bringing down the interests of foreign and domestic institutional investors in public offers. For some, the government and market regulator the Securities and Exchange Board of India (SEBI) played spoilsport.
Developers such as Embassy Group, Lodha Developers, Emaar MGF and Raheja are not risking their initial public offerings (IPOs) and would be hitting the market only mid next year, sources say. While controversies do not seem to be ending for Sahara Prime and Lavasa whose IPOs, if they see the day of light, will only be able to raise liquidity through the primary market by next year middle. The total amount to be raised by these developers amounts to R13,000 crore. No developer, however, acknowledged that the delay was due to controversies surrounding the sector.
“Yes we had plans to raise funds by December but SEBI has still not given us the permission, and even if they do, we will only be able to raise money by December. We will be coming out with our IPO around March next year,” said Sandeep Subramanya, general manager, corporate finance, Embassy Group. The Bangalore-based realty group had plans to raise R2,400 crore of which a substantial part was to be raised through pre-IPO placement. However, domestic investors and some high net-worth individuals with whom the company was negotiating, has asked for some time till “the volatility reduces”, a person familiar with the development said. According to investment bankers, institutional investors are adopting a cautious approach when it comes to real estate.
“Investors will stay away from realty IPOs for at least three months, unless one more scam is unearthed. We hope that the appetite for the sector will improve next year, but that too cannot be generalised for all real estate firms,” said an investment banker with a multinational bank. “The market condition was volatile and we have decided to wait till the situation stabilises. Although we have never announced when we will hit the capital market, so there is no question of postponing the IPO,” said Abhisheck Lodha, managing director, Lodha Group. Lodha Developers is looking to raise R2,800 crore.
Emaar MGF, the joint venture between MGF of India and Emaar Properties of Dubai, too has postponed the issue, and reportedly reduced its issue size by around 40% to R1,600 crore. Hindustan Times had recently reported that the company was forced to postpone its hospitality expansion plans. The company did not respond to queries about its IPO. However, given the situation inside the company and outside in capital market, it would be tough for the company to raise the amount at least by mid next year, said a person close to the development. For many developers liquidity is going to be a problem. After the LIC scam, banks have tightened the loan outflows. And as capital market too is not a favourable place for some time, developers may opt to reduce prices of their properties to improve cash flows. “Its’ not just about FIIs and DIIs, even the retail investor will stay away from realty IPOs,” said the banker.
With the ‘bribe-for-loan’ scam casting a shadow over builders’ access to bank lending, real estate funds and private equity (PE) players now sense a business opportunity. They are actively scouting the deal street for bargains, hoping that the loan scam will put more equity transactions on the table and prompt “realistic” valuations in deal signing. Real estate private equity fund Red Fort Capital says it plans to be aggressive and step up investment activities in India, as more and more developers eye the PE route for funding projects in coming months. Another realty fund, Fire Capital, is rolling up its sleeves to deploy nearly $100 million into the real estate market, and expects to snap up 5-10 deals in the next one year.
“The main sources of capital for real estate industry are bank funding and capital markets. With those two options now seen slowing down, it is inevitable that they will look more towards PE for funding,” Mr Subhash Bedi, Managing Director of Red Fort Capital, said. “We are known to be bullish on the real estate sector. So as a result, when others become more cautious , we get more aggressive in funding. In this market, we are stepping up our investment activities,” Mr Bedi pointed out. Fire Capital Fund CEO, Mr O.M. Chaudhary, also agrees that bank loan scam will tip the scale in favour of private equity deals. “From a PE standpoint, it means more deals will come our way than before,” he said.
A senior official of a dedicated real estate fund, who did not wish to be named, felt that the scam-triggered scrutiny of loan disbursements would turn valuations “more realistic” in the sector, and allow PE players to drive a harder bargain. But Mr Chaudhary opines that despite the bargaining power, he would be careful not to push for terms that are unsustainable. “We do not want to negotiate deals which do not give builders a chance to do well. Also we would not like to do too many deals as the execution can then become a challenge,” he added. However, Mr Abhijeet Bhalla, Managing Director with Millennium Spire Asset Management, adds a word of caution. “While it is true that any liquidity pressure in the market will throw up more opportunities for PE, it may be just too early to comment on how much of it will materialise into actual funding,” he points out.
The year 2010 will probably go down in India’s history as the year of scams. As always, the authorities swing into action after the event. Regulations and compliances notwithstanding, scamsters continue to devise and leverage the loopholes. Unregulated sectors, such as real estate, which is in acute need of regulation, probably demonstrate best the investors’ predicament. The real estate sector probably has the highest rate and volume of investments and the largest number of investors. Contrasted with the various SEBI regulations which aim to protect the capital market investors, real estate development regulation has been sadly neglected, though there is a draft Bill on the anvil.
Currently, the Indian promoter-developer buys the land from villagers and “obtains” clearances from the competent authorities for the building and layout plans. The predevelopment clearances required range from non-agricultural orders by way of Government permissions for the proper use, as for example conversion of land earmarked for agricultural purposes only. Building and Floor plans are approved by local municipal or state urban development authorities, depending on location. In addition, a no-objection certificates are to be obtained notably from the state pollution boards, water supply and sewerage authorities, properties and respective state and central authorities such as the Archaeological and Airport bodies in order to rule out attendant risks the development may pose to the existing structures and operations.
In practice, these approvals are taken at a much later point of time. Because of the tight demand and supply situation, booking and collection of a large chunk of consideration from prospective buyers are concluded well before these clearances are obtained. The buyers have no choice but to sign on the standard contract formats, without the right to negotiate, leaving customers and investors to the mercy of unscrupulous promoters and subjected to various unfair trade practices, with cavalier disregard for compliances. The contracts which the buyer is induced to execute have clauses which are onerous and one-sided, with loopholes for the developer to get away with delays, random cost escalations, exorbitant penal interest, to name a few. The Developers ensure that they are fully insulated from all future liabilities, which are passed on to the buyers at a later point of time, when they become aware that their rights to ownership, super areas, common areas and facilities are very different from what was represented.
The buyers’ recourse so far has been to the Consumer Courts. The National Commission in 2007 dismissed DLF”s appeal from the complaint filed by one Kamal Sood to hold that the builders’ practice of collecting money from prospective buyers without obtaining the required permissions amounted to an unfair trade practice, and the builder is dutybound to obtain the requisite permissions in the first instance, and thereafter, recover from the buyer. It further held that if there is any express promise that the premises would be delivered within a stipulated time-frame, the builder has to bear the escalation costs. Even then the developer’s deep pockets, and rounds of appeals are often a deterent for mostinvestors.
A case in point is that of DLF Park Place in Gurgaon, which was represented to be constructed in 22 million square feet in 13 blocks of one floor, to be completed by fiscal 2010. The delay was caused by DLF departing from the original project, in getting approvals for 29 floors with the plot area being substantially reduced, in breach of the Haryana Urban Development Act the Haryana Apartment Ownership Act, 1983. Additional charges were taken for stilted parking spaces, which the Supreme Court in its Judgment of August 2010 in the matter of Nahalchand Laloochand (P) Ltd. vs. Panchali Co-op Housing Society has held to be illegal.
With the change in law bringing such cases in the ambit of the Competition Act, the Apartment owners Association, in this case approached the Competition Commission (CCI) for abuse of dominant market position, after certain allotments were priced much higher than initially projected. The Competition Commission has restrained DLF from cancellation of the allotments and also creating third party rights. The CCI has also referred the matter to the Director General – Investigations for further investigation.
If the CCI can deliver fast, and with the appeal lying only to the Supreme Court, the process should be quicker. In the meanwhile, the builder lobby is trying its best to scuttle the Bill, which requires preregistration with the Regulator before the property can be marketed. The Regulator is to scrutinise all advertisements, which are mandatorily displayed on the developers’ website. Unilateral cancellations are subjected to stringent conditions, permitting withdrawal by the investor with full refund and interest thereon. Given the above, this Bill needs someone like Aruna Roy to fast forward it.
The higher EMI burden is the result of a series of hikes in policy rates announced by the Reserve Bank of India this year as part of its efforts to tame inflation.
Godrej Properties Limited (GPL), a real estate arm of Godrej Group , on Thursday said it would develop a residential housing project at Mohali in Punjab, which could involve a capital outlay of Rs 450 crore. Besides, the company would also focus on several cities, including NCR , Mumbai , Bangalore , Pune, Chennai and Chandigarh for developing a slew of residential projects in line with its plans to cash in on the growing demand for housing from urban sector.
“We are looking to develop a residential project in Mohali with a minimum land of 20-25 acres…we are in talks with certain land owners here for (entering into a) joint venture in this project,” the company’s MD Milind Korde told reporters here today. Though investment is not a constraint for the company for the upcoming project at Mohali, yet the estimated capital outlay in this project may be around Rs 450 crore, including the land cost, he said.
GPL is already in the process of developing its first Rs 400 crore commercial project in Chandigarh, which will be spread over 4.04 acres with a development size of 6.80 lakh square feet. “This project is going to complete by September next year,” he said. Company’s focus towards growing real estate sector of northern region could also be gauged that it has set up a 3,500 square feet office here which will take care of its projects in northern region.
GPL, having presence in 11 cities across country, is developing 83 million square feet of area which would be done in a span of next 8 to 10 years. “After a gap of three years, we will develop 10 million square feet of area each year,” he said. Godrej Properties is also keen on redevelopment of real estate projects particularly in Mumbai. “We will go into redevelopment of areas like old buildings, cooperatives society houses and slum area in Mumbai,” he said. The company’s other projects are in Gujarat, Managalore, Kochi, Chennai, Gurgaon, Pune, Bangalore, Hyderabad.
Baring Private Equity Partners (BPEP), the global PE major, will begin investing in Indian real estate in the next six months, according to a top executive of the fund. BPEP India was looking at investing from its $650 million Baring India Private Equity Fund III, said Varun Batra, partner, BPEP India. BPEP India invested in information technology, healthcare and financial services sectors from its first two funds. The companies included business process outsourcing firm Mphasis and consumer goods company Jyothy Laboratories.
“FDI in real estate has been allowed for the past five years and the market has been through one learning cycle” said Batra, who was with Citigroup before joining Baring. BPEP has been investing in India since 1998. The foray comes at a time consolidation is taking place in the real estate PE space. Global PE firm Blackstone has taken over the management of $4 billion (Rs 18,000 crore) worth of BoA-Merril Lynch’s Asian real estate business, which includes $500 million (Rs 2,250 crore) Indian assets. Also, home-grown IL&FS Investment Managers has acquired realty fund manager Saffron Asset Advisors.
Apart from consolidation, overseas property funds have either pulled out or become dormant in the Indian property market in the aftermath of the global economic slowdown. For instance, investors such as Goldman Sachs, Landas Banki and Carval have pulled out from the Indian realty market, while others such as Morgan Stanley, AIG and Wachovia have become dormant.
Pranay Vakil, chairman of Knight Frank India, says larger funds make sense in the current market scenario. “You will never find a Rs 10,000-crore fund to sell out. Large funds can invest in small projects but smaller ones cannot put money in large projects,” he said. Baring will look at residential and commercial properties in top seven cities. The ticket size would be Rs 100-Rs 250 crore, Mehra said.
Batra said BPEP would examine structures with preferred return and downside protection. Batra said a possible delay in disbursal of bank loans due to the recent loan scam might offer PE funds more investment opportunities.
The India Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India’s Real Estate industry.
Of all the countries whose real estate sectors are reviewed by BMI, few are experiencing economic conditions quite as promising for real estate companies as India. Thanks in part to a favourable monsoon, economic growth is accelerating. Lending by banks is increasing. Investment in infrastructure will, or at least should, facilitate urban development.
BMI interviewed in-country sources at the beginning of 2010 and again in the middle of the year. In early 2010 in spite of widespread optimism about the prospects for 2011-2012 it was clear that India’s developers faced difficulties. Across the five cities where they interviewed in-country sources Mumbai, Gurgaon, Chennai, Hyderabad and Bangalore rentals slumped in 2009. In some cases this was because of the perceived risk of a recession in India (or, in the case of Bangalore, a real recession in the export markets served by businesses in that city). In other cases, contradictory government policies posed additional problems.
India's LIC Housing Finance said on Monday loans worth 3.89 billion rupees ($85 million) issued by it were under probe by the federal investigative bureau in a financial bribery scandal.
Govt said the housing finance racket unearthed by CBI, leading to the arrest of the CEO of LIC Housing finance is a bribery case and not a large-scale scam.
Bangalore-based real estate developer Embassy Property Developments (EPD) today said it will raise Rs 2,400 crore through an initial public offer. “The company filed the draft red herring prospectus with the market regulator SEBI in July this year, and is now awaiting a nod,” Embassy Property Development (EPD) Managing Director Jitu Virwani told reporters. We expect the IPO to hit the capital markets by this month end, he said.
“The IPO proceeds shall be used to finance the construction of ongoing projects, repayment of debt and shall be used for general corporate purposes,” Virwani said. “We shall use Rs 1,500 crore for financing the ongoing projects, Rs 430 crore for repayment of debt and Rs 470 for general corporate purposes,” EPD General Manager Corporate Finance Sandeep Subramanya said. The company has debt of Rs 1,500 crore, of which Rs 1,100 crore is linked with the rental income inflows from lease of commercial space in IT parks to niche software giants like IBM, Microsoft and others, he said.
EPD, with a land bank of 1,300 acre is developing four IT-SEZs in India. It has presence in Pune, Coimbatore, Cochin, Chennai and Corg in South Karnataka, besides projects in Malaysia and Serbia. The company has forayed into residential housing segment. It plans to construct 5,000 units in Bangalore on a pilot project using expertise of its Malaysian counterpart. The company turnover was at Rs 380 crore in February 2010 and it reported a loss of Rs 6 crore.
Credit Suisse on Friday downgraded India’s DLF to underperform from neutral, citing continued weak operating performance in the September quarter.
On Wednesday, the country’s top-listed real estate firm reported quarterly net profit fell 5 percent from a year earlier due to increases in land and construction costs. DLF shares had dropped 4.4 percent on Thursday, while the main stock index shed 1.4 percent.
Real estate brokerage firm Agni Property today said it has raised USD 12 million (around Rs 53 crore) by selling minority stake to venture capital firms Foundation Capital and Helion. US-based Foundation Capital and domestic firm Helion have invested USD 6 million each in the company, Agni Property Managing Director Samarjit Singh told reporters here.
He, however, declined to divulge the stake it has sold to the two firms. “This is the first time that private equity investment has happened in real estate service sector. The funds will be utilised for our expansion plan,” Singh said, adding that the company will set up offices in three more cities — Chennai, Pune and Hyderabad — in India, and one in UK. Agni Property has nine offices in six cities and caters mainly to individual customers in primary property market. It is expecting to touch Rs 100 crore revenue in the 2011-12 fiscal.
Singh said the company plans to set up 30 offices in 20 cities and generate a revenue of Rs 500 crore by 2015. However, he did not share the current revenues of the company. The officials of both Helion and Foundation Capital said they have made an investment in Agni because its an emerging player growing at a fast rate. “We are happy to partner Agni Property which is well poised to capture a significant share of the Indian organised realty transactional services space over the next five years,” Foundation Capital’s Venture Partner Ashu Garg said.
Mumbai, India’s business capital, has been ranked as the fourth most expensive market in terms of office space rentals in the world by global real estate consultant CB Richard Ellis. New Delhi is placed at the 11th spot in the list, which is topped by London (West End), according to CBRE’s semi-annual Global Office Rents survey.
“While the rankings of Mumbai and Delhi have not changed globally since May this year, what is notable is that rentals of prime office space have risen… as across most of the markets in the world,” CB Richard Ellis (South Asia) Chairman and Managing Director Anshuman Magazine said.
Other places in the top five are Hong Kong (Central CBD) at the second spot followed by Tokyo (Inner Central). At the fifth position is Moscow. The rankings are based on occupancy costs for prime office space in 175 cities worldwide. Occupancy costs represent rent, local taxes and service charges.
As per the survey, Mumbai has an occupancy cost per square feet per annum of $130.41 while that of New Delhi is $101.21. The report noted that global rents have started to stabilise and so far, have seen a fall of 1.3 per cent from a year ago.
In what is being called the biggest real estate deal in Delhi after the 2008-09 slowdown, Parsvnath Developers on Thursday bagged a 38-acre plot auctioned by the Rail Land Development Authority (RLDA) in Sarai Rohilla for R1,652 crore. At R43.4 crore per acre, this deal is second only to DLF’s pre-slowdown deal of R44.1 crore per acre, when it acquired 38 acres near Moti Nagar for R1,675 crore from the DCM group.
“This property is going to change the skyline of Delhi, especially in terms of luxury houses, a school, hotel and luxury club,” Parsvnath chairman Pradeep Jain told HT. The plot is 5 km from Connaught Place, 3 km from New Delhi railway station and 2.5 km from Karol Bagh. While 19 bidders were shortlisted, only two put in the financial bid — Parsvnath and IndiaBulls, which quoted a price of R1,257 crore or R33.1 crore per acre.
As per the terms of the sale, on 10 acres, Parsvnath will develop — for free — 500,000 sq ft of residential premises for railway employees, who are already staying there. On the remaining 28 acres, it will develop 23,00,000 sq ft of residential space, 335,000 sq ft of shopping, office and retail complexes and 100,000 sq ft of institutional area for schools and hospitals. “This is the biggest real estate deal when you consider the fact that 750 railway quarters are to be redeveloped free of cost,” said Anil Gupta, general manager (projects), RLDA, the nodal agency developing railway land across India.
The 10:90 bubble’s going phut, contrary to the view of developers who were convinced that the innovation was a perpetual goldmine. The scheme, under which a real estate buyer paid only 10% of the property cost at the time of booking and 90% at the time of possession, was the buzz during the festival season.
However, it was felt that such loans were risky for banks and so the Reserve Bank of India (RBI) stepped in and tightened the provisioning norms for such loans. Bank approval rates for these loans have fallen steeply since then, because of which it is the builders who are now staring at possible cancellations.
Builders such as Indiabulls Real Estate (IBREL), Lodha Group and Nahar Group are among those to have floated this scheme. Analysts said banks were rejecting loans because buyers failed the eligibility norms. Less than a sixth of the loans for such projects were getting passed, an analyst said.
“Such buyers are cancelling their bookings,” he said. Another Mumbai-based analyst with a foreign brokerage said some top builders stopped this scheme two-three weeks back. The RBI intervention would not have an impact on its sales since loans are yet to be sanctioned, he said.
Many developers are charging Rs23,600-28,000 per square feet for these properties, he said, adding, “When oversupply brings down prices and buyers default on payments, banks will be forced to sell these properties at big discounts, which will burst the bubble.”
Lodha Developers has sold 70 of the 100 flats it had put up for sale under this scheme, said R Karthik, senior vice-president - marketing, Lodha Group. The average cost of the 3000-4000 sq ft flats was Rs10 crore and a tenth of the buyers did not opt for the 10:90 scheme. “Our buyers have tied up with Axis bank, IDBI, HDFC and SBI. It was a short-term scheme to get people like CEOs and financial services professionals into this segment,” said Karthik.
An official spokesperson of IBREL said the company has 300 bookings for its projects including SkySuites and Sky Forest, of which 100 clients have received loan sanctions, while 7 applications were rejected.
A senior official of State Bank of India, the biggest home loan provider, said, “One developer had come to us, but we need a margin of 15%, corporate guarantee of the mortgage of the property and 25% equity for home loan. They had already tied up for mortgage with other consortiums so we did not tie up for this scheme. And we give loans in a 25:75 ratio and in some special cases at 15:85, but not beyond that.” That ruled out the 10:90 schemes.
Banking sources said, “The agreement is clearly between the bank and the buyer, so if the developer tomorrow doesn’t pay or defaults, it is the buyer who has to pay up. Also, the sanctions have been very few as banks are becoming strict and only 10-15% sanctions have come from ICICI; HDFC’s sanctions are even lesser.”
An analyst from another domestic brokerage said, “Some builders are giving loans through their non-banking finance company under this scheme. But what happens if cancellations start happening as loan approvals are so few? The revenue that they have already booked for the second quarter will go for a toss.”
The problem with the 10-90 scheme is also that developers agree to pay interest only till the construction is completed. A buyer, on the other hand, gets possession only after the civic authorities give the occupancy certificate, pointed out an analyst with a foreign real estate consultancy.
“So you have this one-year gap because OCs normally take that much time after the construction is complete. That would mean buyers will have to foot the interest bill for the period.”
“If the developer is selling property claiming it would undertake interest subvention for that period, then the buyer should ensure that mentioned clearly in the agreement,” the aforesaid consultant said.
Ambar Maheshwari, director of investment advisory services, DTZ, another consultancy, said, “The scheme has many fallacies right at the beginning. It’s the buyer who will have to pay if the developer defaults or delays the construction schedule. Also, here, the bank is taking the risk to fund such a project, which is generally bought out by investors.”
Banks have also become wary of giving out such loans because their regulator, the Reserve Bank of India, looks down upon such lending practices. “So our management is not going to roll out the schemes in a huge manner,” said the official of a top public sectorbank.
Most global investors think China is experiencing a real estate bubble, even as they say the world’s fastest-growing major economy offers the best opportunity for making money over the next year.
Two-thirds of the people surveyed in the latest Bloomberg Global Poll say a bubble is inflating property values in China, where the economy grew at a 9.6 percent annual rate in the third quarter. Still, when asked to identify one or two markets offering the best opportunities in the next year, 33 percent of investors cite China, more than any other country. Brazil ranks second at 31 percent, followed by India with 29 percent and the U.S. at 23 percent.
Only 10 percent of respondents describe China as cooperative and willing to compromise. Almost nine of 10 say the Asian superpower pursues its own interests, even at the risk of creating tensions with other countries, in the quarterly poll of 1,030 analysts and traders who are Bloomberg subscribers.
China “has definitely taken advantage of the fact that it is the big player on the global scene,” said poll respondent Will Aston-Reese, vice president for money-market sales at Tradition Asiel Securities Inc., in New York. “Seeing China act less cooperatively and more in its own self-interest would be a natural byproduct.”
India’s largest realty firm DLF Ltd today said it expects to generate Rs 2,000 crore from the sale of non-core assets, including hotel plots, in the next 12-18 months. Against the medium-term target of Rs 5,500 crore, the company has raised Rs 2,507 crore in the last 18 months, DLF told investors in an analyst presentation. The company has decided to retain its wind-power venture, which was valued at Rs 1,000 crore. In the first half of the current fiscal, the wind power arm of the real estate major garnered Rs 707 crore.
In the presentation, DLF said: “Total funds expected to be garnered over next 12-18 months is about Rs 2,000 crore.” The proceeds would be raised from land bank rationalisation and refunds from state government authorities. Meanwhile, in a conference call with analysts, DLF Executive Director (Finance) Saurabh Chawla said the sale of non-core assets would take place in new Gurgaon, where the company has surplus scattered land parcels.
DLF said its net debt had reduced to Rs 19,913 crore as of September 30 from Rs 20,107 crore at the end of the first quarter. “Our continued focus on de-leveraging will continue with funds coming from operational cash flows and non-core asset investments,” DLF said. Stating that the current average cost of debt is 10.5 per cent, DLF said its debt-equity ratio currently stands at 0.73. Going ahead, the company said it will continue to use all free cash flows to reduce debt on an accelerated basis, as well as improve the tenure and quality of debt. It will also explore other possibilities for further reduction of debt costs.
DLF hopes to achieve a net cashflow of Rs 750-1,000 crore each quarter from operations and recoveries. Chawla said the company expects rental inflow to amount to Rs 1,700 crore by the end of this fiscal. In the last two months, the company has leased out 2.5 million sq ft of area and expects to find takers for another 4.5 million sq ft by March, 2011. The company will launch more projects, including plotted development, in Gurgaon and Chandigarh in the coming quarters, he added.
Country's largest lender SBI today said teaser rate home loans are the "best product and the most sought-after" in the market today, a comment that comes on the heels of RBI expressing concerns over such offerrings.
RBI has taken three steps that will adversely impact prospective homebuyers who are dependent on home loans. Read
HM Constructions, one of Bangalore’s leading real estate companies, will soon be opening one of its prime retail buildings in the heart of Bangalore’s shopping hotspots – Jayanagar IV Block. The shopping complex is expected to be operational in another 2-3 months time. For all the retailers, who are looking to set up their base in this locality, this complex can be a very viable option. Comprising Ground + three floors, HM Group is offering 15,500 sq ft of space in full or flexible floor plate options, thereby converting every sq ft to more footfalls per day relating to more business per day.
Speaking to Property Pulse, Manjusri, DGM –sales & marketing, HM Group, said: “Visibility in a prime location is the key to success of any brand. In today’s times, the retailers are hard pressed with declining margins and high competition to offer the best to the customers, hence it becomes imperative to be present in the most happening business location. Understanding this need, HM has constructed a stand-alone building in Jayanagar, IVth block, which is considered as the heart of Jayanagar.”
The key highlight of this retail destination is that it is located in a business street where every domestic, national and international brand would love to be. Right from jewellery brands to cosmetics, apparel to eating joints, electronics to books, one can find just everything in this retail hotspot.
Mumbai-based Oberoi Realty is in talks with premier hotel chains worldwide to introduce the concept of luxury branded residences for a 1.5 million square feet project at Annie Besant Road in Mumbai’s Worli area. “This will be along the lines of luxury serviced apartments available in India. But it will give buyers like NRIs an opportunity to own a luxury residence and have it cared for by the best hotel brands in return for a fee,” Saumil Daru, group CFO of Oberoi Realty told Financial Chronicle.
So far, Hyatt, Lalit and the Taj have operated luxury serviced apartments in Mumbai, which are all available for long-staying guests. Luxury branded residences combine the convenience of an apartment with the comfort of hotel staff. In a serviced apartment, it is the hotel owner, and not the guests, who own the apartment. “We are talking to marquee brands for luxury branded residences like St Regis Residences, Mandarin Oriental Residences and Ritz Carlton Residences for our Worli project. We believe that once a brand is finalised the value of the project will rise,” said Vikas Oberoi, chairman and managing director of Oberoi Realty. Oberoi will share a part of the sale proceeds with luxury hotel operators in return for the right to use the brand name. On an annual basis, the apartment owners may also have to pay the hotel chain a fee for the services provided.
Home loan are set to get costlier and there could be some moderation in loan demand, with the RBI asking banks to keep more money aside for offering teaser home loans, research firm Crisil said.
PBEL Property Development (India) Ltd on Wednesday outlined plans to develop an integrated housing-cum-commercial township project in Chennai along Old Mahabalipuram Road. PBEL is a venture between Property and Building Corporation Ltd (PBC), a subsidiary of Israeli conglomerate IBD group, Electra Real Estate Ltd, a subsidiary of Elco Holdings Israel, and Hyderabad-based Incor, with the first two firms holding 45 per cent equity apiece and Incor (10 per cent).
The executive director of PBEL Property, Anand Reddy, said that the project will come up on 42-acre that the company has acquired. Of this, about 30 acres would be earmarked for residential and the rest of the 12 acres will be for commercial use, which would include large office and retail area too.
“The first phase of the project will see an investment of Rs 150 crore with a built up area of 4.5 lakh sq ft of residential area. We plan to construct about 1,600 apartments and commercial space with a total outlay of Rs 1,400 crore over the next four-five years,” Reddy at a press conference.
Director and founder of PBEL, Mark Boukris, said that the real estate market in the country has come out of the dull phase. “The company is currently executing a residential township project on the road leading to the new international airport at Shamshabad. The first phase of 363 apartments on two towers of 20 floors each, now under development by L&T will be ready by middle of 2011. We plan to take up works on the second phase of the project by January 2011,” Reddy added.
Bangalore-based Hoysala Projects has launched a commercial-cum-residential project, Hoysala Corpus, in the upcoming hub of Devanahalli. Hoysala Corpus is located on the six lane highway at the junction of Devanahalli bypass and Nandi Hills road and is minutes away from all city landmarks.
Built on eight floors with residential units featuring from the third floor, Hoysala Corpus offers two bedroom flats with size starting from 1,250 sq ft. There will be 40 flats in the residential part of the project. Price per unit will begin at Rs 40 lakh. The project is scheduled for completion in December 2012.
T S Sateesh, managing director, Hoysala Projects, said, “With the city expanding in all four directions and vehicular traffic quadrupling, residents of Bangalore are increasingly looking at residential units close to the workplace as well as shopping centres.”
“While this would considerably reduce the quantum of daily commuting, consumers are certainly not averse to the idea of having all these in one complex, like an integrated enclave. Thus, the concept of work-live-play is a trend that is fast catching up and what is presently lacking is developments offering such a concept,” Sateesh added. Amenities in the project will include club house, swimming s pool, full power backup and 24 hour security manned by an a advanced security system.
Tata Housing Development Company, a subsidiary of Tata & Sons, is keen to adopt public private partnership (PPP) route to develop integrated residential township projects across the country. While an MoU has already been signed with the Assam government for affordable homes through the PPP route, the company is in talks with a few other state governments. Tata Housing is also planning to adopt this concept for its overseas foray.
“We are very close to signing an agreement, through a third party, with another country. However, we can’t disclose the name of that country at this point,” Brotin Banerjee, managing director and CEO, Tata Housing told reporters. While speculations are that the project might come up in Sri Lanka, company officials remain tightlipped.
“We are in talks with a few state governments in the country. While the governments will be able to bring in the land and ensure associated resources required for the township, we will use our expertise to plan and implement an integrated project with all basic amenities and facilities,” said Banerjee.
According to Banerjee, private developers usually run into issues such as acquisition, conversion and approval leading to project delays. Government comes into the project, it cannot only ensure availability of land with clear title, but also open the opportunity to develop affordable homes for the needy. The state housing boards that were formed for such initiatives have off-late lost their focus, he added.
World’s top hotelier, IHG (InterContinental Hotels Group) and New Delhi-based leading real estate firm Amrapali Group has signed a series of contracts for the management of six new hotels in India. This strategic relationship marks the launch of Holiday Inn Express in India — one of the fastest growing hotel brands in the limited service category, opening on average two hotels a week globally. There are now 2,101 Holiday Inn Express hotels opened and 501 hotels under development globally. It also expands the growing network of Holiday Inn hotels and debuts the Holiday Inn Suites in India.
IHG and the Amrapali Group will develop six hotels between the Holiday Inn Express and Holiday Inn brands in the next three to five years, comprising the following hotels: • Holiday Inn Express Noida Extension: 200 rooms, scheduled to open in 2013 • Holiday Inn Express Indore Pithampur: 150 rooms, scheduled to open in 2013 • Holiday Inn Express Jaipur Hitech City: 200 rooms, scheduled to open in 2014 • Holiday Inn Express Kochi Aluva Junction: 150 rooms, scheduled to open in 2015 • Holiday Inn Patna: 150 rooms, scheduled to open in 2014 • Holiday Inn Suites Noida Sector 76: 150 rooms, scheduled to open in 2013
Jan Smits, Managing Director, IHG Asia, Australasia said: “With strong economic growth, an expanding middle class, demand for the mid-market and limited service segments will grow exponentially. Holiday Inn and Holiday Inn Express will address the need for branded, high-quality and value-based hotels in these segments. These six hotels add momentum to our India pipeline, which now stands at 45 hotels. Close to 70 percent of this pipeline is with the Holiday Inn brand.” IHG currently operates 12 hotels in key Indian cities and is set to triple its presence in India by 2015. Upcoming IHG hotels will be primarily located in India’s major metros and key secondary cities, which are well positioned to drive growth and continued investment opportunities including New Delhi, Bangalore, Chennai, Cochin, Kolkata, and Pune among others.
Anil Kumar Sharma, Chairman and Managing Director, Amrapali Group, said, “India’s need for world-class hotels consistent with rapid economic growth make this an opportune time for us to expand our hospitality portfolio. IHG, with its well-recognised and profitable brands, offers us a strong foundation to deepen our focus in hotel development. We look forward to introducing the fast-growing Holiday Inn Express brand that offers an ideal mix of convenience, comfort and value.” The agreement for four Holiday Inn Express and two Holiday Inn hotels further reinforces IHG’s existing relationship with Amrapali Group. IHG now has a total of seven hotels under development with Amrapali Group, including a Crowne Plaza in Udaipur, scheduled for completion by the end of 2014.
Rentals for office space in top Indian cities are firming up due to increased demand, as per an industry study that suggests revival in one of the few real estate segments yet to come out of a slowdown.
There has been moderate quarterly rise in office rentals across Grade A projects in the central business districts of Delhi (4%), Mumbai (3%), Bangalore (3%) and Pune (4%) with Kolkata clocking the highest increase (10%), according to a report by commercial real estate services firm CB Richard Ellis India .
The study for the three months ended September that covered top office space rentals across Delhi NCR , Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata found rentals in Chennai and Hyderabad remained static compared with the quarter ended June.
“A large number of companies are reviving their expansion plans, while demand is also increasing for SEZ office space. This is indicative enough of a revival of demand and substantial improvement in the market activity across the country,” stated the report.
There has been considerable increase in the transaction volume in almost most metros, including Pune and Kolkata. Hyderabad is expected to witness higher rentals because of increased demand for commercial office space by year end, added the report. Anshuman Magazine, managing director at CB Richards Ellis said, “Rental increase will remain in check in the medium term due to the ongoing supply.”
In the top cities, occupiers and companies look to shift to secondary markets and alternate locations for several reasons such as location advantage, metro connectivity, quality construction and infrastructure, more efficient buildings and competitive rentals. “It is imperative for developers to take a cautious approach towards rental expectations during this rising yet fragile market,” the report added.
Indiabulls Real Estate Ltd said profit in the second quarter jumped almost 11 times as home sales climbed.
Net income rose to 508.6 million rupees ($11.5 million) in the three months ended Sept 30 from 46.9 million rupees a year earlier, the Mumbai-based developer said in a statement to the Bombay Stock Exchange. Sales climbed more than fourfold to 3.24 billion rupees.
Accelerating growth in Asia’s third-biggest economy, rising salaries and the biggest rally in stocks in 18 years is boosting demand for homes. Salaries in India may grow an average 10.6 percent in 2010, the fastest pace in the Asia-Pacific, according to Lincolnshire, Illinois-based human resources adviser Hewitt Associates Inc.
Indiabulls Real Estate’s board discussed a proposal to restructure its power and infrastructure businesses, which could include separating the units, according to the statement
The developer’s shares, which have declined 8 per cent this year, climbed 2 per cent to 209.35 rupees in Mumbai trading on Wednesday.
Thai real estate developer Pruksa Global plans to invest Rs 1,000 crore in projects in India and launched its first residential project in the country at Bangalore on Wednesday. The company has incorporated a wholly-owned subsidiary in India, Pruksa India Housing, which announced a 26-acre villa and row house project in Bangalore.
“Continuing our growth in Thailand, we want to invest in opportunities in other countries too. And India will be our first country outside Thailand,” said Thongma Vijitpongpun, CEO, Pruksa Real Estate.
The project, located at Budigere, off Old Madras Road, will develop 438 units in all — 238 villas and 200 row houses. Villas of about 1,632 sq ft will be priced Rs 59 lakh onwards, while row houses ranging between 1,232 sq ft and 1,249 sq ft will be available from Rs 39 lakh onwards. As an introductory offer, the company announced a Rs 2 lakh discount on the base price, and the offer will be available till November 14.
The company plans to launch 5-6 projects in Bangalore over the next four years, and is also planning launches in Chennai and Mumbai. It would enter into joint-venture agreements with developers in Chennai and Mumbai, company officials said.
Real estate firm from the NCR, Supertech has chalked out its plans to launch a Rs 2500 crore IPO in the next 12-15 months. According to RK Arora, CMD, Supertech, Knight Frank has already been hired for the valuation of the company and it is expected to file DHRP with SEBI in about six months.
An ISO 9001:2001 company, Supertch propose to use the proceeds of its IPO for future expansion. The company has drawn aggressive expansion plans with its newly introduced corporate logo that symbolizes strong commitment for project delivery and strengthening partnership with its customers.
Supertech has been involved in building residential, commercial property besides constructing townships, IT Parks and hotels in Delhi-NCR region, especially in newer urban settlements of Meerut,Moradabad, Haridwar and Rudrapur.
The company, as claimed by it, is currently present at 35 locations and has completed 23 million sq ft of developments including 20 lakh sq ft commercial space and 7,000 apartments. As much as 70 million sq ft of area is under development with projects worth Rs 10,000 crore in the pipeline.
Elaborating on its expansion plans, Arora told Property Pulse that the company would foray into Gurgaon besides launching projects worth Rs 500 crore in Mumbai and Rs 200 crore in Bangalore.
As part of its hospitality plans, Supertech, according to Arora, will invest Rs 65 crore for developing budget hotels.”We are revamping our partnership with Carlson Group of Hotels and our Radisson brand hotels will come up in Rudrapur, Haridwar and Meerut by March
2011″.
Supertech will be funding its expansion through the proposed IPO which would dilute company’s equity by 20 per cent. Arora also informed that they are tying up with PE companies to raise Rs 500 crore.
For funding current projects involving Rs 2,500 crore of investment, Supertech, according to Arora is raising Rs 1,200 crore of bank debt besides financing through internal accruals and customer bookings.
Sunteck Realty, one of Mumbai’s premium based real estate developer, has announced the launch of a brand new luxury residential tower - Signia High. Located in the heart of Borivali (East), the highly acclaimed Signia High project is set to redefine high end living for the residents of western suburbs.
Signia High is an exclusive and unique edifice comprising of 96 lavishly planned apartments and sky villas which are incomparable in beauty and elegance. The high end lifestyle amenities and world class designs offer all the essentials of gracious living and self-contained luxury for the residents.
Commenting on the Group’s latest offering, Mr. Kamal Khetan, Chairman and Managing Director, Sunteck Realty said, “The demand for luxury living propositions is increasing in the western suburbs due to the growing income of an individual and younger generation’s rising aspirational needs. With the launch of Signia High, we cater to the potential market segment that is looking for lifestyle and luxury housing. We at Sunteck Realty, aim to continue setting benchmarks of creating lifestyle products with exemplary design, style and luxury”
Peninsula Land Ltd., an Indian real- estate developer backed by Franklin Templeton Investments, and Samira Habitats, a Mumbai builder, will develop a coastal township near the city to tap demand from the nation’s wealthy. Peninsula and Samira will build the township in Alibaug, about 30 kilometers (18.6 miles) south of Mumbai. Three fourths of the project will consist of luxury residential villas and condominiums, the companies said in a joint statement today.
Demand for luxury apartments in India is rising as record overseas fund inflows drive Indian stocks to a 2 1/2 year high boosting the ranks of the affluent in Asia’s third-biggest economy. India’s wealthy may almost double their assets to $6.4 trillion over the next five years as economic growth, forecast to expand at the fastest in three years, swells the ranks of the rich, Credit Suisse Group AG said in its global wealth report.
Peninsula shares, which have declined 15 percent this year, slid 0.8 percent to 65.75 rupees at the 3:30 p.m. close in Mumbai today. Peninsula and Samira will invest 2 billion rupees ($45 million) to develop the 2 million square foot township that will include a hotel, the companies said. Franklin Templeton Investment’s funds own 13.9 percent as of Sept. 30, according to a Peninsula filing to the Bombay stock exchange.
Leading realty player, the MAN Group, on Wednesday said that it has launched its premium residential project near the Dahisar check-naka, called MAN Opus. The project that comprises 23-storied six towers along with separate parking facilities for each is expected to set a new benchmark in privileged living, a press release issued here stated.
The project is located on the Western Express Highway near suburban Dahisar check naka. It is also in very close proximity to Dahisar and suburban Mira Road railway stations (3-kilometres each) and within the range of 25-minutes from the domestic and international airports. The upcoming metro railway station is just two kilometres away from the project site.
On the backdrop of festival season and an overall boom in the real estate market, the MAN Group has received an overwhelming response from buyers, registering 45 per cent of total sales during the pre-launch offer. Commenting on the launch, MAN Infraprojects’ Director, Nikhil Mansukhani, said, “Mumbai has barely any land left for development and demand for housing is increasing. Developers of the city will have to expand their horizon beyond mere construction and look for opportunities on the outskirts, where there is availability of land for mass housing with greater facilities and lifestyle coupled with the developing infrastructure facilities. Taking this thought forward, MAN Group has launched MAN OPUS near the Dahisar check-naka.”
Travel and hospitality company BirdGroup has announced plans to invest up to $500 million (Rs 2,200 crore) in the next six years on developing six luxury hotels across the country. The company said it had entered into a 50:50 joint venture (JV) with Thailand-based Dusit Hotels for foraying into the hospitality sector. It expects to open its first hotel next year under the brand ‘Dusit Devarana’.
The hotels, which will have a total capacity of around 800 rooms, will be managed by the JV -Dusit Bird Hotel. “We are developing six properties across the country. The total investment will be around $400-500 million. The first one will come up in Delhi, near the airport,” BirdGroup executive director Ankur Bhatia said.
The investments would be funded through internal accruals, he added. The group plans to open one hotel every year and has already scouted for locations across the country, including Jaipur, Goa, Rishikesh and Cochin. “Two properties are already under construction. The second one will come up in Jaipur in 2012,” Bhatia said, adding each hotel would have around 50 luxury rooms.
The housing regulator plans to tighten the rules governing affordable housing as it looks to ensure that projects built on subsidised priority loans are actually delivered. The National Housing Bank is working on a proposal that seeks to make it mandatory for such projects to get rated by credit rating agencies such as Crisil and CARE . “We are yet to work out the details,” said RV Verma, chairman and managing director of National Housing Bank, a housing finance institution owned by the Reserve Bank, which also functions as the sector regulator.
“We will hold discussions with the real estate industry, financial institutions, government bodies and other stakeholders before finalising the guidelines,” he said. There are over 25 developers across seven states in urban India, which offer good-quality low-cost housing in the range of Rs 3-7 lakh.
The move to get ratings is aimed at bringing in transparency and discipline into the market and enhancing allround confidence. “Better and credible information will be available in the market, which will benefit all stakeholders,” Mr Verma said. If the proposal sails through, the financing institutions will be in a better position to provide lending to real estate projects, both directly and indirectly.
“Ratings will provide us with the comfort that loan to such groups or buyers in that project will not turn into non-performing assets,” said a senior official with the country’s largest lender, State Bank of India . The ratings will also be a useful indicator of the quality of the project and the developer. It will also provide information on the current standing of the project. The move has also found favour with other government arms. According to an official with the ministry of housing and urban poverty alleviation, credit rating will encourage builders as they’ll also be sure of credit being made available to them.
As negative factors impacting the commercial realty segment fade away, it could well be an indication that the sector is set for renewed growth. If we consider that fewer negative factors implies a positive scenario, then, the commercial real estate sector in the country could well be on the verge of a comeback. It is widely believed that 2010 will be the year, when commercial real estate bounces back.
According to various reports by global property consultants, the segment had ended 2009 with a 29 per cent decline in space absorption, as compared to the previous year (2008). The total absorption of commercial space across major Indian cities stood at 26.3 million sq ft in 2009, as against 37 million sq ft in 2008. This dip was primarily because of a conservative leasing approach, adopted by the IT/ITeS sector. This sector accounts for a majority of the commercial office space taken up (estimated at 60 per cent), in the country. This year (2010) has been different, wherein the decline has slowed to almost zero and new projects have been announced.
The outlook, for 2010, is positive. The gradual economic recovery has meant that the demand for office space has increased in the second half of 2010, say experts. Across India, about 4.6 million sq ft of pre-commitments for space, due to be absorbed over 2010-2011, have been logged.
Industry experts add that Indian corporates had been cautious about their expansion plans, in 2009, because of the recession and also because of falling office space rentals. Most micro-markets across the country witnessed 15-25 per cent decline in rentals in 2009, as compared to 2008. However, in 2010, we are witnessing stabilisation and in some locations, even an upward movement. The last quarter (Q3) has seen rentals stabilising, except in a few locations where there is a perceived oversupply.
Though 2009 saw a drop in expected supply, major cities recorded 51.8 million sq ft of new office space supply and it is expected that the figures, in 2010, will be better. With corporates once again beginning to lease large spaces, this new supply is expected to be absorbed, by Q2, 2011. “Clients are starting to talk positive,” says commercial real estate consultant, Prashant Puri. Industry experts see a revival of rentals across all markets in the second half of 2010.
“Corporates, too, are realising this. This is the right time to buy or lease property, as rentals and capital values are still at their lowest,” maintains Puri. On the developer’s side, the positive news is that stalled commercial and office projects are being restarted. “2009 was a tenant’s market. In 2010, things have started to turn around. By all indications, by the end of 2010, commercial real estate should bounce back,” concludes Puri.
With the country’s real estate sector starting to look up post downturn, and equity markets scaling new highs, private equity (PE) firms have begun focusing on the property turf yet again. These days they are cherrypicking home and office space assets only. Industry estimates suggests India Inc saw over 150 major deals in the first half of 2010. Of this, a little over 10% were in the real estate sector alone. The current period has also seen a distinct rise in domestic real estate private equity funds, vis-a-vis mainly offshore real estate private equity capital in 2006 - early 2008.
Real estate consultancy firm, Jones Lang LaSalle chairman & country head Anuj Puri, told ET: “The PE firms expect a return of 20-25 % post tax — which is nearly the same as what they were before the downturn. The structure, however, has changed as the funds are looking more at capital protection —meaning lower risk even if that means slightly lower returns. Currently, the proportion is heavily skewed towards residential. This can be attributed to the fact that the residential sector is correctly seen as a self-liquidating asset class, while commercial and retail real estate have exit-related concerns due to unavailability of REIT/REMF (real estate mutual fund) vehicles in India.”
Niranjan Hiranandani, managing director of Hiranandani Constructions, seconds his views. He feels the focus is clearly on residential space and not retail and commercial. “Post downturn, the developer’s land bank is not the only criterion being weighed by PE firms for investing. They have begun concentrating on the project, its implementation process as well as on the overall performance of the real estate company and are expecting a return of 15-20 % per annum through their realty investments,” adds Mr Hiranandani.
The real estate private equity investment market has become more focused in terms of geographies, asset class preference , deal structures, etc. “Institutional fixed income investments and domestic capital are trends which will emerge stronger going ahead. In short, there are distinct signals of a bottoming out of the investment activity curve and an uptake in activity in 2011,” said Mr cycle are fewer unless backed by robust demand,” said Mr Hosangady.
“It first seemed as though a majority of the PE funds were being channelled into the primary cities. However, it emerges that they have also chosen to invest into large residential projects in tier II cities, since they perceive that the demand for residential spaces in those cities is enough to justify quick absorption. In the end, what matters most is returns on investment ,” Mr Puri said. Manish Aggarwal, executive director, investment services (India), Cushman & Wakefield.
Vikram Hosangady, who is executive director of KPMG, feels the PE funds largely continues to focus on the top seven cities. “We have also noticed that some of the consummated deals were structured, with the private equity firms taking limited exposure on project. Investments in large real estate projects which were sought after during the last.
Property prices are sky rocketing in Ahmedabad, leading to a dearth of affordable housing. And Pirojsha Godrej, executive director of Godrej Properties, opines that the government needs to step in, by giving incentives to developers for building affordable houses. Godrej was in Ahmedabad for the formal inauguration of Godrej Garden City on Sunday, and that is where he voiced his thoughts on the present real estate scenario in the city. Godrej feels that volume of housing is proportional to how affordable it is, and that is why Godrej aims to grow on the basis of volume. “If the government can give incentives for building IT parks, it should also give incentives to real estate developers for building affordable houses in the city,” he said.
Adi Godrej, chairman of Godrej Properties, demanded a higher Floor Space Index (FSI). He also said that there must be single-window clearance for townships, wherein the developer need not take multiple clearances, from various authorities. “It will make the process faster and will ensure early implementation of projects,” he said. Godrej also stated that India, on the whole, has a low FSI. “The government should create a better support system, for growth of real estate in the city,” he said. Godrej Properties had announced the inauguration of its ‘Godrej Garden City’ at Jagatpur much earlier. However, the formal inauguration ceremony was completed on Sunday, in presence of chief minister Narendra Modi. The company has already sold more than 1,000 units in two phases of booking, before the formal inauguration of the township.
Now, the third phase of the booking, with around 2,000 units on offer, will open very soon. The whole township is spread across 250 acres of land. The company plans to build around 13,000 flats and villas within the next 10 years. Speaking about the delay in the formal inauguration of the township, Godrej said that the Gujarat government changed their township policy, and hence they needed to make modifications accordingly. He also accepted that there were some problems in getting the township approved, but those were resolved and the approval was obtained.
Milind Korde, managing director of Godrej Properties, said that the company had earlier aimed to bring in an integrated township, but it will now be a residential township. Godrej marketed its townships in foreign countries such as the US, UK and Australia along with African countries, through a brokers’ network.Godrej also said that they will explore the option of redevelopment of slums in Ahmedabad and also explore the real estate market in Surat.
UPA-II’s ambitious programme to make the nation slum-free within five years is all set to take off as the housing and urban poverty alleviation ministry has finalised the scheme, and how now sent it to finance ministry for approval. Last year, the government had announced the launch of Rajiv Awas Yojana (RAY) aimed at making cities slum-free, addressing the problems of slum-dwellers and urban poor in a definitive and holistic manner. With the sanctioned budget of Rs 1,270 crore for the current fiscal, the ministry has given final shape to other crucial aspects like financing pattern, contribution of the Centre, states and the model for PPP.
Prior to unveiling the scheme, the ministry had asked the state government to chalk out an action plan for slum-free cities, and sanctioned Rs 120 crore for it. Besides, slum-free city planning, the states were asked to frame legislation to accord property rights to slum-dwellers, and also formulate detailed project reports for the release of funds. The ministry has re-drafted the RAY scheme to focus on upgrading slums, redevelopment, rehabilitation and constructing new houses after factoring in the views of concerned stakeholders, states and the expert committee, which is headed by Deepak Parekh.
The ministry constituted the expert panel to estimate “reliable” urban slumpopulation. As per the committee’s findings, around 93.06 million people will live in slums in cities by next year. Faced with funds crunch, the ministry has sought supports of banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of houses for urban poor. “There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realize the vision of slum free India,” housing and urban poverty alleviation minister Kumari Selja said.
While stocks and bonds have held their position as traditional investment instruments, investors are increasingly looking for alternate investments such real estate, hedge funds, private equity and exchange-traded funds (ETFs) to engineer an overall enhanced performance of their portfolios. Improving construction quality, enhanced market transparency, and availability of suitable options have made real estate a good asset class to invest in. It provides a stable and predictable income yield along with a possibility of capital appreciation. While residential markets in India have already witnessed a rapid bounce back, commercial markets had touched a cyclical low and are expected to recover.
The market value of investment-grade real estate in India under construction has increased from USD 69.4 billion at end-2006 to USD 101.3 billion by end-June 2010, which is 8.2 percent of India’s nominal GDP for 2009. A significant portion of this market value is costs of construction and development of these real estate assets. The costs have been assessed to be USD 48.5 billion over a period of 2-3 years.
The market value of commercial (office and retail) real estate under construction is USD 34.8 billion. Commercial office space under development contributes 74 percent of the estimated market value being developed in the commercial sector. As of the second quarter of 2010, Tier I cities of Bangalore , Mumbai , and NCR-Delhi contribute to 70 percent of the market value of commercial office space under construction , while Tier II cities of Chennai, Pune, Hyderabad and Kolkata contribute to 21 percent of the pie. Other investment-grade developments in Tier III cities contribute to a mere nine percent of the pan-India market value being developed in India today.
However, with infrastructural developments and lower real estate costs, the share of Tier III cities is likely to grow in future. While the Tier I cities contribute to 62 percent of the commercial retail space under development, 27 percent is supplied by the Tier II cities. The residential sector has been the most resilient one in the recent downturn, aided by the high demand for housing in India. While residential property prices slumped in the first half of 2009, their rapid recovery in the second half of 2009 and first half of 2010 was accompanied by a slew of launches across India.
As of the second quarter of 2010, the market value of residential properties under construction is USD 66.5 billion , contributing 66 percent of the value of total real estate under construction in India. While the premium segment comprises only four percent of the saleable area being developed, it contributes to 24 percent of market value. While NCR-Delhi leads in terms of volume of residential properties being developed, Mumbai contributes a larger share to the market value. Foreign direct investment (FDI) in housing and real estate in India increased steadily from USD 0.04 billion in 2005-06 to USD 2.18 billion in 2007-08 . Since 2007-08 , a total FDI of USD 7.82 billion has been put into housing and real estate in India. Considering an average construction period of three years for properties, this comes to 7.7 percent of the market value of investment-grade real estate under construction as of the second quarter of 2010.
Pune-based real estate firm Vascon Engi¬neers in association with Balakh Realtors, an Israeli firm, is investing Rs 2,000 crore to develop a 105-acre township at Oragadam, a town and industrial area located in the outskirts of Chennai. “The company is developing around 10 million sq ft in four phases, over a period of six years with an investment of Rs 2,000 crore,” the company said in a filing to the BSE. Vascon Engineers, who will invest into developing and constructing the mega project, has entered into a revenue sharing agreement with Balakh Realtors, who own the land, D Santhanam, chief financial officer, Vascon Engineers, said.
The project will be located at Oragadam, touted as Chennai’s largest and most developed industrial belt. “It is well-connected via road and rail and the presence of automobile giants such as Renault-Nissan and Ford has triggered growth in and around Oragadam,” R Vasudevan, managing director of Vascon Engineers, said in a statement. “With over 22 Fortune 500 companies, of which six are global car manufacturers, the Sriperu¬mbudur-Oragadam belt has seen tremendous industrial growth. We see great real estate potential in Oragadam,” he added. He said real estate development in Chennai had seen huge transformations over the last four-five years, resulting in residential and shopping demands.
LIC HOUSING Finance has reported a net profit of Rs 234.2 crore for the quarter ended September 2010 - an increase of 37% over Rs 171 crore in the corresponding quarter last year.
With a view to curb unethical practices, the Maharashtra Chamber of Housing Industry (MCHI), the apex body of real estate business in the state, has directed all its members not to book flats without receiving the commencement certificate (CC) from the authorities. MCHI secretary Sunil Mantri told TOI: “Apart from giving this instruction to our members, we have also decided to let builders have stalls in our exhibitions only if they have the CC of their projects.” He noted that this is a statutory requirement under the Maharashtra Ownership Flats Act (MOFA) and that it will be implemented strictly.
MCHI treasurer Ashok Mohanani said, “This step will benefit flat buyers in a big way. People take housing loans of lakhs of rupees and hence it is necessary to protect their interests. This move will ensure that people buy flats only in approved projects.” The MCHI has also asked its members to sell flats as per their carpet area and not on the built-up and super built-up basis, Mantri said. Following a public outcry against the sale of as high as 40% of built-up area, the state government had warned builders of action if they do not sell flats on the basis of their carpet area. Housing law expert D S Wader said, “There is a specific provision under the MOFA that the sale agreement should specify only the carpet area. But most builders do not follow that rule. It is good if the MCHI has decided to implement it.” In fact, some of the builders have already started selling their flats on the carpet area basis.
Builder Atul Shirodkar, who has several projects in Mumbai and Nagpur said: “I have made it clear in my brochures and advertisements that the flats will be sold strictly on carpet basis. In fact, I am asking the buyers to themselves measure the area of their flats before making the final payment.” He added that several builders had called him up and “accused him of spoiling the real estate market”.”But I have decided to strictly follow the law, Shirodkar said. Housing activists have suggested that cheating cases be registered against builders who don’t sell flats on carpet basis.
Mantri said the MCHI has also asked its members to specify in writing the costs involving stamp duty, registration charges and any additional facilities. “This will ensure that there are no hidden costs. We want to introduce greater transparency in all flat dealings,” he said.
The government will drop a key rule from the new international accounting norms Indian companies have to follow from next year to permit real estate companies to book revenues as they build a property, allowing them to maintain a healthy profit and loss account. A recent meeting of the expert group of the ministry of corporate affairs favoured the existing ‘percentage completion method’, even as the country prepares to align its accounting practices with the globally recognised International Financial Reporting Standards (IFRS), which allows developers to book sales only when the project is complete.
The current move, which was cleared by the National Advisory Committee on Accounting Standards (NACAS), is expected to bring some relief to the country’s real estate sector, which is yet to recover fully from the impact of the economic downturn. A change in accounting practices would have weakened the position of real estate firms while dealing with investors and lenders. Real estate firms welcomed the move, calling it a step in the right direction.
“It will reflect the real picture as regards the execution and marketing capabilities of a real estate company as well as its cash flow,” said Manoj Goel, vice-president of Raheja Developers . Real estate projects take several years to complete, therefore they are allowed to follow what is known as the percentage method wherein they proportionately show revenues in their books of account as projects are executed. “Any lack of visibility on performance and reported earnings, lenders and banks could be more stringent in lending to this sector,” industry body National Real Estate Development Council (NAREDCO) had said in a representation to the ministry of corporate affairs.
“This can also adversely impact investments by mutual funds with focus towards regular return to unit holders,” it said. Under IFRS, real estate accounting is based on ‘completed contract method’, wherein revenue is recognised only when the project is completed and the ownership is transferred. The reworked move expected to shield the sector from the adverse impact of sudden slumps in demand. “With the NACAS clearing the proposal, it is just a matter of time before the government issues a notification to clarify this aspect,” said an official with the ministry of corporate affairs who asked not to be named.
“While the move will not see any change in the annual margin of corporates, revenues will be recognised on a quarterly basis,” said Suneel Sehgal, deputy director general of NAREDCO. Accounting experts also welcomed the move, saying it suits the way the real estate business works. “Given the nature of realty business which follows an extended approach (for completion of projects), the move is appropriate,” said Jamil Khatri, head of accounting advisory services at consulting firm KPMG . Varun Gupta, director finance in Ashiana Housing Ltd , welcomed the moved but cautioned that the change could make comparison between firms difficult if they are provided with an option to follow either of the two accounting formats.
In a sign of change, home-loan products having been sold through the abused tactic of unsolicited calls, HDFC Bank will soon be acquiring customers through an interactive web chat.
Real estate developer DLF has run into a controversy in Punjab for seeking common village panchayat lands to develop parks and buildings. However, the panchayat is adamant and has said the villagers would not part with the land. Residents of Chahar Majra village, about 5 kilometres from Chandigarh, have no land to cremate their dead. Villagers have been requesting the government to allow them to use the common panchayat land, but the government has not responded. And the reason behind this denial is that private developer DLF has proposed to come up with a mega industrial park.
Khwaja Khan, village head said, “We do not want to give our land for work that is not in the benefit of the village.” Mohammad Sadiq, a villager said, “We do not want that anyone should take possession of our land.” Meanwhile, the government has washed off its hands over the controversy on land whose current value is almost Rs 1.5 to 2 crores an acre.
Punjab Chief Minister Prakash Singh Badal said, “We will take a decision only after forming a committee of the district DC and villagers.” Caught in between the government and the villagers, DLF has run into trouble not only in this village but also in Gurgaon Cyber City where the Punjab and Haryana High Court has quashed the Haryana government’s acquisition of more than 19 acres of land to be handed over to DLF.
Rentals for office space in top Indian cities are firming up due to increased demand, as per an industry study that suggests revival in one of the few real estate segments yet to come out of a slowdown. There has been moderate quarterly rise in office rentals across Grade A projects in the central business districts of Delhi (4%), Mumbai (3%), Bangalore (3%) and Pune (4%) with Kolkata clocking the highest increase (10%), according to a report by commercial real estate services firm CB Richard Ellis India.
The study for the three months ended September that covered top office space rentals across Delhi NCR , Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata found rentals in Chennai and Hyderabad remained static compared with the quarter ended June. “A large number of companies are reviving their expansion plans, while demand is also increasing for SEZ office space. This is indicative enough of a revival of demand and substantial improvement in the market activity across the country,” stated the report.
Seeking viable solutions to make India slum-free, Government on Monday invited banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of affordable houses for urban poor. “There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realise the vision of slum free India,” Housing and Urban Poverty Alleviation Minister Kumari Selja said here on the occasion of World Habitat Day.
“I invite all the stakeholders particularly the banks, financing institutions and the real estate sector to come forward to make use of the opportunities offered by our schemes such as Interest Subsidy Scheme for Housing the Urban Poor and the Scheme for Affordable Housing in Partnership and to work hand-in-hand to find viable solutions which make a positive lasting impact on our cities,” she said.
Urban population is expected to increase manifold in the next two decades. In the absence of proper homes, people are forced to reside in inhabitable and often unsafe places. According to the ministry, the total urban housing shortage was 24.71 lakh as on 2007.
Seeking ways to deal with housing shortage, she said, “the housing deficit cannot be addressed only by government programmes. A strategy is required which converts the housing shortage into a market opportunity and mobilises private investments.” Lamenting that urban poor face financial exclusion, she said, “financial institutions are reluctant to lend to the lower income segments in view of perceived credit risks, lack of credit history and difficulties in foreclosure of loans. This outlook requires a change.”
Actor-turned-producer Ajay Devgan has now ventured into real estate and plans to develop a residential and commercial complex in the metropolis. Devgan has allied with the Roha Group , which has been in the sector for the last seven years, for its expertise in the segment. “I am a regular investor in this space. I felt there is a huge scope for coming up with branded products and was waiting for the right associates. Roha Infrastructure (a group company) brings in seven-years of experience in realty sector and so the alliance came into place,” Devagn told reporters on the sidelines of a real estate event here.
The company, Ajay Devgan Infrastructure (ADi), will be developing two projects — one residential and other commercial under the brand of ADi in Mumbai. The residential complex — ADi West Coast — would come up at Versova while the commercial building — ADi EGO — will be constructed at Vile Parle (East) on the Western Express Highway. While the residential complex is spread across 60,000- 70,000 square feet of area, the commercial complex would be set up over 20,000 square feet, a company source said. ADi West Coast will have a ground, five podiums and 12 floors. “The residential complex will cater to the luxury segment. Each floor will have only one flat of around 5,000 square feet,” he said, adding that the flats would be sold only by invitation.
Mahindra Lifespaces Developers Ltd, the real estate and infrastructure arm of the Mahindra Group, has bought two plots in suburban Mumbai from group companies to build homes. The firm bought 150,000 sq. ft of land in Kandivali previously used as a warehouse by the group’s tractor factory. In Ghatkopar West, it bought 225,000 sq. ft of land.
“We will keep looking at such opportunities whenever they are available,” managing director and chief executive Anita Arjundas said, without disclosing the purchase prices. Property analysts peg the estimated revenue from the properties at around Rs.338 crore, based on an average market price of Rs.9,000 per sq. ft. They estimated the land cost of the two parcels at Rs.4,300 per sq. ft.
Internal land purchases such as these benefit both the buyer and the parent firm. Groups such as Mahindra and Godrej have land assets that can be monetized through real estate developments. The realty arms get easy access to land at competitive rates. Godrej Properties Ltd, a unit of Godrej Industries Ltd, has monetized land that belonged to Godrej Agrovet Ltd and Godrej and Boyce Manufacturing Co. Ltd through joint ventures.
In June, Mahindra Lifespaces bought 23 acres in Pimpri, Pune, from Mahindra Engineering and Chemical Products Ltd at an estimated Rs.100 crore for a residential project. Mahindra Engineering’s manufacturing facility at the site will be shifted out. “Internal land buys like these from group companies need to make business sense and fit the profile of the developer though they may not necessarily be cheaper land available,” said Gulam Zia, national director-research and advisory services, Knight Frank India Pvt. Ltd, a property advisory.
Mahindra Lifespaces has followed an expansive land acquisition policy across locations, typically looking at large format projects under its Mahindra World City concept. The company is in an aggressive land buying mode and is in the process of acquiring around 3,000 acres in Pune and 1,000 acres in Chennai for two special economic zones. To strike a balance, it is also developing smaller, more niche residential projects in cities such as Mumbai. It is already developing residential projects in Goregaon and Bhandup in suburban Mumbai.
In a report to Mumbai Police, the Intelligence Bureau (IB) has warned that the India’s most wanted man — Dawood Ibrahim — is preparing a blueprint to expand his business in Mumbai. The intelligence report says the underworld don is preparing to enter real estate business instead of extorting money from the builders. He is investing more than Rs 19 crore in real estate, the report says.
The report mentions alleged extortionist Ahmed Langra as Dawood’s man who takes over land where he can invest. Asif Sheikh, brother-in-law of Dawood’s key aide Chhota Shakeel, reportedly looks after D-company’s real estate work. He manages real estate accounts and shares profit with Dawood, the IB report says.
The IB is particularly worried about one Mubasir who has been described as a mediator for anybody, including those belonging to terror organisations like Lashkar-e-Toiba (LeT), who want to get in touch with Dawood. But Dawood still needs to clear the turf before he can reclaim Mumbai. For that, the IB report says, he has hired 19 shooters to eliminate his rival Chhota Rajan. Alleged gangsters Bharat Nepali and Bunty Pandey — Rajan’s former aides, have reportedly been entrusted with the task of killing him in two months. All those named in the IB report are now under the Mumbai Police scanner.
Seeking viable solutions to make India slum-free, Government on Monday invited banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of affordable houses for urban poor . “There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realise the vision of slum free India,” Housing and Urban Poverty Alleviation Minister Kumari Selja said here on the occasion of World Habitat Day.
“I invite all the stakeholders particularly the banks, financing institutions and the real estate sector to come forward to make use of the opportunities offered by our schemes such as Interest Subsidy Scheme for Housing the Urban Poor and the Scheme for Affordable Housing in Partnership and to work hand-in-hand to find viable solutions which make a positive lasting impact on our cities,” she said. Urban population is expected to increase manifold in the next two decades. In the absence of proper homes, people are forced to reside in inhabitable and often unsafe places. According to the ministry, the total urban housing shortage was 24.71 lakh as on 2007.
Real estate consultants from Gujarat have invited their colleagues from all over the country to Ahmedabad ahead of Vibrant Gujarat. Ahmedabad Realtors Association and Vadodara Realtors Association have convened National Realtors Association India’s meeting in the city on October 28, 2010.
“We have invited around 7,000 to 8,000 real estate consultants across India to come to Ahmedabad and know about the market and government’s real estate policy in the state, so that they can bring in their big clients to the city,” said Sachin Shroff, the president of Vadodara Realtors Association. He said that they want to project Ahmedabad as a realty destination. The realtors’ meet is also aimed at providing education to the real estate brokers to take them on the path of professionalism. Moreover, NAR-India has also organised five road shows in various cities including Ahmedabad, Rajkot, and Surat.
Pravin Bavadiya, the president of Ahmedabad Realtors Association, said that the aim of such shows is to create awareness among realtors about activities carried out by NAR-India. The meet will provide a platform to local realtors to have interaction and network with the fraternity in the other cities. “We need to unit the entire realty consultant fraternity to combat multi-national companies entering into this business,” said Bavadiya.
Moreover, the association has also invited NAR-USA’s trainer, Marcus Walley, who will conduct a workshop on sales and marketing of property. NAR-India is also mulling to get accreditation from real estate developers body such as Confederation of Real Estate Developers Association of India (CREDAI) for their members.
Banks are likely to raise the interest rates for home, auto and corporate loans in first quarter next year, owing to possible high cost of deposits.
Realty firm Vipul Ltd expects sales realisation of Rs 255 crore over the next three years from its new housing project in Gurgaon. “Christened as ‘Lavanya Apartments’, the project is spread over 10 acres and will carry a realisation value of Rs 255 crore,” according to a company press release.
Speaking on the occasion, Guninder Singh, chief executive, Vipul Ltd, said, “We have already created a niche for ourselves particularly in Gurgaon by delivering high quality realty projects and we aspire to further strengthen this presence in the region. We have designed Lavanya Apartments to suffice the huge demand for quality housing at affordable rates in Gurgaon.”
The project, expected to be completed by 2013, will have a built up area of nine lakh sq ft comprising 470 units. The apartments will be sold at Rs 3,250 per sq ft. The sample apartment for Lavanya Apartments will shortly be available, the press release added.
The Gurgaon-based firm has so far delivered about 6.75 million sq ft (including JV’s) and is at present working on an area of about 10 million sq ft. The company has a land bank of more than 1,400 acres.
The city-based Emami Group of Companies, with core competence in personal and healthcare consumer products and FMCG (fast moving consumer goods), is making a foray into the real estate segment, hoping to cash in on fresh buoyancy in the brick-and-mortar domain. “We are looking at investment in property and valuation thereof in a band of Rs 4,000 to 8,000 crore across the country over the next five years. The thrust will be on the residential segment,” R S Agarwal, joint chairman, Emami Group of Companies, said.
The group is in the process of formalising its joint-sector housing outfit with the West Bengal Housing Board, and is preparing to roll out 6.5 million sq ft of built space by 2015, the cross-subsidy model alone accounting for 4 million sq ft. “We will develop a 1 million-sq ft project in Rajarhat comprising LIG, MIG and HIG apartments with Hafeez Contractor as our architect, and another 1.9 million sq ft housing complex on Jessore Road,” said Rajesh Bagaria, the managing director of Bengal Emami Housing Ltd.
Emami Realty, the real estate arm of the group, which is already part of large-scale consortium projects in the city like South City, Rosedale and the forthcoming upscale Urbana, is ramping up its presence in the high-end condo segment and commercial real estate. A large-format mass-housing project is coming up on Mumbai Road, while two IT parks planned in Sector V and the Rajarhat IT corridor, with a combined leasable space of 500,000 sq ft.
The group — also having interest in paper and newsprint, writing instruments, edible oils, bio-diesel and contemporary arts, and with a current market cap of Rs 7,000 crore - is scaling up its pan-India presence in real estate, with a clutch of high-end residential projects lined up in various cities. “We are doing a Rs 2,000-crore, 1 million-sq ft condo complex in Mumbai and high-end residential projects in Hyderabad and Coimbatore. We are also developing a 1 million-sq ft mixed-use project in Adityapur and have a 375-acre land bank in Jhansi,” added Girija Choudhary, the CFO of Emami Realty.
The Emami Group, which is pondering a public issue, is also scaling up its presence in healthcare, lining up investment of Rs 2,000-3,000 crore in the next five years, including its upcoming mother-and-child hospital in Mukundapur, off the Bypass in Kolkata.
Realty major DLF is in dialogue with various builders for a collaborative CSR initiative that aims to provide education, healthcare and vocational training in villages within a radius of 15-20 km of major building projects. “DLF has approached other fellow builders across the country to join hands in a movement to reach out to the people living in villages within a radius of 15-20 km of any major building activity, in order to provide basic education, healthcare services and vocational training,” DLF chairman, K P Singh, said.
He was speaking at an event to mark the birth centenary celebration of DLF founder, Raghvendra Singh. “I have personally spoken to several of my fellow-builders and the response has been very positive and enthusiastic,” the DLF chief said but did not divulge the name of builders that the company was talking to. The initiative would be spearheaded by DLF’s existing philanthropic institution ‘DLF Foundation’, he pointed out. Speaking to reporters on the sidelines of the event later the DLF chairman said that the initiative would also be driven through various industry chambers.
“I believe this will be a new and novel concept of development in the country which will empower those who are displaced by rapid urbanisation, construction workers and millions who live in villages in the vicinity of major housing and infrastructure projects. It has the potential to grow into a national movement,” he said. “Funds are not a constraint…There is no limitation of money, it is just the organisational ability to do it. We want to make a dent and hasten the process of inclusive growth,” he added.
Besides Delhi NCR, DLF Foundation’s philanthropic activities are currently spread across DLF projects sites in Maharashtra, Tamil Nadu, Punjab, Andhra Pradesh, Kerala, and West Bengal among others.
Having burnt their fingers during the economic slowdown of 2008-09, foreign private equity (PE) funds continue to stay away from Indian real estate, even as domestic funds have taken the lead in property investments. While domestic funds have put in $864 million (Rs 3,950 crore) in 22 realty deals since January this year, foreign funds have invested a mere $126 million (Rs 575 crore) in only three deals, according to data collated by Venture Intelligence, which tracks PE and merger and acquisitions in India.
During the property boom of 2004-2008, foreign funds put in millions of dollars in realty projects, expecting huge returns. Their investments peaked in 2007, when they put in around $5.73 billion (Rs 26,100 crore) as against $ 4.05 billion (Rs 18,500 crore) put in by their domestic counterparts. But the global economic slowdown of 2008-09, which led to lower home sales and redemption pressures on PEs, spoilt the party. Indicating poor risk appetite, foreign funds invested $183 million (Rs 835 crore) in Indian real estate in 2009, while domestic funds put in $665 million (Rs 3.030 crore).
“Most foreign funds are sitting on pre-crash investments which are terribly under water. Limited partners (investors in funds) have lost badly in the downturn and their current focus is more on salvaging investments than taking fresh exposure. Moreover, they still believe that India is overpriced,” says Jacob Matthew of Mape Advisory.
Says Ashish Joshi, managing partner, real estate, IL&FS Milestone Fund: “Foreign investors are playing safe and are sceptical. Since one of the biggest reasons for the economic crisis was real estate, there is a rub-off impact and overseas PE funds are staying away.” But why are domestic funds continuing their investments? For instance, during the first half of this year, the deal flow of domestic funds and amount invested have gone up by 36 per cent and 240 per cent, respectively, compared to last year. “Domestic funds can gauge the pulse of Indian real estate. Moreover, they can invest in any project of any size, unlike foreign funds whose investments are governed by FDI norms,” says a managing director of a domestic PE fund.
A number of Indian fund managers such as Indiareit, Aditya Birla Financial Services and ICICI Venture are raising or are in the process of raising around Rs 6,000 crore from domestic institutions and high net worth individuals. But non-property investments by PEs are still booming. In the first half of calendar year 2010, total PE investments touched $4.571 billion (Rs 21,380 crore) across 138 deals. This was a three-fold jump over the $1,508 million (Rs 7,000 crore) invested in 111 deals during the same period last year, according to Venture Intelligence data.
“The Indian market is not cheap. They have the option of investing in other geographies where the market is cheaper,” said Vikram Hosangady, executive director-advisory transaction services, KPMG.
An old bungalow property in the exclusive residential enclave of Carmichael Road in south Mumbai is believed to have been sold for around Rs 300 crore. Villa Nirmala, an over six-decade-old property, has been jointly purchased by Peninsula Land, which is part of the Ashok Piramal Group, and developer Khemchand Kothari. Sources said the transaction involved a payment of Rs 240 crore plus 15,000 sq ft of space for the occupants of the bungalow once it was redeveloped. The bungalow, which has a garden at the back and occupies about half-an-acre, may give way for a skyscraper in the otherwise low-rise Carmichael Road, a declared heritage precinct.
The only high-rise on this road is the 24-storey Usha Kiran which came up in the mid-1960s. Buildings in the area command prices ranging between Rs 40,000 a sq ft and Rs 90,000 a sq ft. However, sources close to the Villa Nirmala deal said it was too early for the developers to divulge details about the project. ”We are working on it,” they said. The ground-plus-two-storey bungalow once belonged to Maharaj Kumar Khanderao Shivajirao Gaekwar and subsequently came into the possession of two families, the Wagles and Lalvanis.
Sahara India Pariwar’s latest move of putting in $2 billion bid to buy Hollywood-based film production and distribution major, Metro-Goldwyn-Mayer (MGM) Inc, is a part of its larger plans for film production and distribution including setting up of a hi-tech Film City at Aamby Valley.
Speaking exclusively to Realty Plus, Subrata Roy, managing worker & chairman of Sahara India, informed that the group has chalked out mega plans in the film business that include developing a world-class Film City and distribution of films through satellite. “Our upcoming Film City at Aamby Valley will be the first of its kind with hi-tech facilities for indoor and outdoor shooting, besides massive pre-productions and post-production facilities,” added Roy.
Elaborating on the concept of Film City, Roy said, “For indoor shooting, the Film City will have four huge air-conditioned domes. One of the domes will be like a city, complete with roads, street lights, houses etc., suitable for a specific city-location shoot. Likewise, one of the domes will depict a sea shore. The best part is that the skyline of the dome can be changed so that you can have the sea shores of Mumbai, New York or any other city you want.
The dome with snow and changing skyline will provide an opportunity to film makers to shoot snow fall scenes of any Indian or foreign locale. Then there’s this dome complete with forests. We will also have a huge pond, similar to the one which was used for shooting the movie, Titanic. We are already in the process of seeking details from global studios for setting up these domes.”
The studios at Film City, according to Roy, will have all pre and post-production facilities. “The whole concept is such that a film maker enters the studio with an idea and comes out with a finished film. With the modern and hi-tech facilities at the Film City, film makers would be able to complete a film in just a month’s time. Moreover, Aamby Valley provides excellent living accommodation and superb climatic conditions ideal for outdoor shooting.
Speaking about Sahara’s plans for film distribution, Roy told Realty Plus that they would modernize film distribution by replacing the old system of physically sending film prints to movie halls with the new system under which film prints would be distributed through a satellite link to cinema screens across the country. In a related development, Sahara is setting up 3-screen multiplexes across 217 townships planned by it which in turn will be linked to its upcoming Film City.
Sahara Group with its assets totaling over $13 billion has diversified business interests that include financial services, real estate, infrastructure, print and televisions media, film productions, sports, healthcare, hospitality, etc. And if Sahara’s recent initiatives meant to revamp its operations in media and entertainment domains come through as planned, these will completely change the face of film production and film distribution in the country.
Realty firm Ansal Properties and Infrastructure (Ansal API) plans to invest about Rs 4,500 crore to develop the second phase of its 2,500 acre hi-tech city adjoining Greater Noida. According to sources, the company would soon launch the second phase of its integrated township ‘Megapolis’ at Dadri covering 650 acre of area where it would offer 1,900 plots and build nine million sq ft each of housing and commercial space. The project cost for the second phase would be around Rs 4,500 crore and the company expects to realise nearly Rs 7,500 crore in the next three-four years, they added.
When contacted, Ansal Hi Tech Townships chief operating officer Rakesh Kaul said: “The company would soon approach the Uttar Pradesh government for signing the development agreement for the second phase of Megapolis and the project would be launched only after that”. Kaul declined to give further details about the project. In mid-2008, Ansal API had bagged a hi-tech city project from the UP government spread over 2,500 acre, which can be extended to 9,000 acre.
The company had then announced an investment of Rs 13,000 crore to develop this township at Dadri near Greater Noida. It had also expected revenue to the tune of Rs 26,000 crore from the township, which would be completed by 2016. Ansal API had raised Rs 225 crore from HDFC AMC through dilution of 8.5 per cent stake in the project. Sources said the company had sold so far about 80 per cent of its total saleable area in the first phase comprising 500 acres. The hi-tech city would have an education city, a medicity and one 18-hole signature golf course designed by Nick Faldo, apart from polo and equestrian facilities.
The company would construct four hotels in three and five star categories, comprising about 250 rooms in each hotel. It would also house five shopping malls.
The IT and ITES segment appears to have recovered sufficiently for developers to venture again into it. Pune-based Kumar Urban Development will build an IT-SEZ project on 13.5 acres near the first phase of the Rajiv Gandhi Info Tech Park there. Another 13.5 acres have been earmarked as non-processing at the same location. The entire project entails an investment of Rs 1,000 crore and in the first phase the company will invest about Rs 400 crore. All clearances for the proposal have been received.
In the first phase, about 1.8 million sq ft will be developed, of which 4 lakh sq ft will be operational by Q3-2011. Kumar Urban was keen to make the SEZ cost-efficient for its clients, said Lalitkumar Jain, chairman and managing director of Kumar Urban. The LEED certified project hopes to create a work environment for 18,000 people and has been planned on the lines of successful tech parks abroad. On project funding, Jain said he had tied up with local financial institutions for the construction component.
Asked whether the business environment was conducive for an IT park, given that quite a few leading developers had sometime back sought de-notification of their IT-SEZs fearing slump in demand, Kumar said Pune had seen about 2 million sq ft of IT space being leased out in the last six months. The project will be part of a 120-acre land parcel which the company owns. Further expansion will depend on demand, he said.
Loans for corporates and individuals are set to be costlier soon while deposits may yield higher returns as the Reserve Bank of India, or RBI, raised interest rates higher than expected to tame inflation.
Commercial real estate projects, including office and retail space, have started seeing increased demand after suffering poor sales during the economic slowdown, as firms and retailers revive expansion plans. In eight cities, including Delhi-National Capital Region (NCR) and Mumbai, firms leased out or sold 9.2 million sq. ft of commercial space in the three months ended 30 June, up 58% from 5.8 million sq. ft in April-June 2009, said Ravi Ahuja, executive director for development services at consultants Cushman and Wakefield India.
Some 16.4 million sq. ft of retail space is expected to be available in 2010, against 6.3 million sq. ft last year. Consultant Jones Lang LaSalle Inc. has predicted 8.9 million sq. ft will be absorbed this year, compared with 4 million sq. ft in 2009. “The commercial real estate space is again active with inquiries and transactions,” said Supreet Suri, director, The Three C Universal Developers Pvt. Ltd. The company is planning to launch a 12.5-acre commercial project in Noida, on the outskirts of New Delhi, by October. “We are getting inquiries for our Noida project, which is still in the planning stage,” Suri said.
Developers such as BPTP India Ltd, Assotech Ltd, Anant Raj Industries Ltd and Wave Inc. have also reported improving property demand. Metros have witnessed a large number of investment deals in office space development at information technology (IT) and corporate parks during April-June, according to a report by the Royal Institute of Chartered Surveyors. “While improved corporate profits seem to be the demand driver for office property, retail property has also seen an upswing, as a result of improved economic climate within the country, making it an attractive market for global retailers as well,” says the report.
Leasing and sale of office space in Mumbai and Delhi-NCR rose 69% and 18%, respectively, according to another consultancy, DTZ International Property Advisors. The report says 70% of transactions in Delhi-NCR have been recorded in Gurgaon, Noida and Delhi’s south business district. In Mumbai, most commercial realty projects are coming up in peripheral areas. Noida has attracted large multinational corporations from IT and the banking, financial services and insurance (BFSI) sectors who want to set up back offices, says an office market report from BNP Paribas Real Estate.
Mumbai’s Bandra Kurla Complex adjoining Santacruz, Andheri, Powai, Vikhroli and Vile Parle has also attracted buyers, says the BNP report. Consultancies say capital and rental values will remain stable in the near term as new projects inundate the market in the next few quarters. “Rental and capital values will remain stable as the markets will witness huge supply in coming months,” said Priyankar Bhikshu, head of research for India at DTZ International Property Advisors. “Increased absorption and reduced vacancy are likely to take place in most Indian cities by the end of this year. However, a complete revival of the rental market is unlikely until mid-2011,” Bhikshu added.
But deal sizes are getting smaller. “Multinational firms are looking for central locations in big metro cities. Since rental cost in these areas is still higher, the space occupied is smaller in comparison to the ones that were occupied during 2008,” said Rajesh Goyal, chairman and managing director of the Delhi-based developer RG Group. “In doing so, the occupiers have the dual advantages of cost saving and central location.”
Hotels group Zuri has recast its six properties into three niche brands and says it plans to add 10-15 hotels globally, either as new hotels or through management contracts in the next five years. Zuri Group Global, which started building its own luxury brand two years ago, would invest an estimated Rs 500 crore on two or three new hotels planned in the country. It was discussing with many players in different places, including in Bangalore, for taking up existing properties on management basis and rebranding them as Zuri, its managing directors, Bobby Kamani and Abhishek Kamani, told a news conference.
“We have a multi-pronged strategy to expand our operations. After setting up Greenfield projects, we are also looking at inorganic growth through management contracts,” Abhishek Kamani said. “We are in advanced stages of talks with a few private owners in the southern and eastern markets [for management contracts]. We are still not present in key markets such as Mumbai, Delhi, Chennai.” The group, with a fiscal 2009-10 turnover of Rs 250 crore, may tap the public issue route or private equity players to raise part of the funds and the plans were at an early stage, Abhishek Kamani said. It has invested Rs 750 crore so far on existing businesses.
Bobby Kamani said the profile of the hotel planned near the Devanahalli airport was being decided while another premium hotel in Nairobi would start shortly. Other locations in Africa, West Asia and India were being considered. He said, “We have taken a rather bold step to restructure our hospitality business at this early stage. While several brands have adopted this approach at an advanced stage of their existence in the market, we believe a restructuring at this stage will definitely help build a strong identity for our guests…. Considering the dynamic nature of our industry, we are required to compete in the global marketplace which demands bolder and clearer brands.”
The six properties would be branded as premium Platinum, the intermediate Lifestyle and the more affordable family category of Comfort, according to Priti Chand, assistant vice-president, PR & Communications. Zuri has a business hotel in the IT hub of Whitefield; a resort and spa in Kumarakom, Kerala; the White Sands Resort and Casino and the Portuguese style Retreat, both in Goa; it has one in the UK and a beach resort in Mombasa, Kenya. Domestic operations account for Rs 100 crore of the turnover.
Mantri Developers is setting up its first residential property, Mantri Celestia, in Hyderabad. The 24 floors apartment project, comprising 1,152 flats, is expected to be ready by 2011. The apartment, that spreads across 11 acres, is coming up in Gachibowli, which is Hyderabad’s IT corridor. Mantri Celestia will offer 2 and 3 BHK flats with prices starting at Rs 3, 440 per sq ft. The apartment will have six towers of 24 floors each. Mantri Developers claims that it is going to be the tallest residential complex in Gachibowli. According to the company, the project will see an investment of about Rs 350 crore. Funding will be done through debt, internal accruals and advances from customers.
To boost sales, Mantri Developers has also launched a no EMI scheme till delivery of the flat. Under the scheme, potential buyer can book a flat by paying Rs 3.5 lakh upfront. The consumer need not bother about installments till the delivery of the possession. Concessions will also be offered for apartments less than 1,200 sq ft. According to Mantri Developers, as per Andhra Pradesh government regulations, apartments having sizes less than 1,200 sq ft attract no stamp duty and concessional registration charges at 2.5 per cent. All flats in Mantri Celestia are under 1, 200 sq ft and hence the benefit accrues to the customers.
Snehal Mantri, director of marketing at Mantri Developers said, “Mantri Celestia is the project designed for the age category of 25 to 30 years, who just started their career and want to own their dream home with all modern luxuries at value for money. Located at Gachibowli, a fast developing IT hub that has attracted many global & Indian IT heavyweights, Mantri Celestia offers the advantage of the globally popular concept of “Walk to Work”.” Mantri Celestia offers amenities such as gymnasium, health club with sauna, aerobics hall, Squash court and Billiards rooms besides salon for men and women. Outdoor amenities include swimming pool, paved garden walk, activity pool, tennis courts, jogging trail, promenade, senior citizen’s area and basketball post.
The Hyderabad-based IVRCL Assets & Holdings Ltd has launched a 700-acre township with an 18-hole championship golf course near Chennai. Announcing the plans at a press conference, Sunil Reddy, group vice-chairman, IVRCL, said that the township — Aavisa — is to come up at Sriperumbudur, off the NH-4 to the west of Chennai. While the modern golf course is a unique part of the project, the residential portion targets a wide spectrum of the market, with independent houses priced between Rs 30 lakh and Rs 2.5 crore.
Aavisa is promoted through a special purpose vehicle, IVRCL Resorts & Hotels. Kotal Realty Fund has a stake in the project. The master plan for the township is by Townnland, Hong Kong. The golf course is to be designed by Golf Plan of the US. The township will be a LEED-accredited green project, said Reddy. In the first phase, the company will invest Rs 270 crore on a 52-acre gated community, called Samten, to develop 239 villas and a 9-hole golf course.
The project would be completed in 5-7 years, he said. The golf course would be suitable for beginners and champions, and have a golf academy and driving range. With 14 water bodies spread across the course, it will be one-of-a-kind facility, he said. Its location on the Chennai-Bangalore route and in the heartland of the industrial belt — including global automobile and components manufacturers, electronic and telecom hardware production units — makes it a hot spot for development.
Aavisa will offer over 180 acres of green space, 80,000 trees, 30 km of roads lit by over 10,000 solar power lights. In Samten the houses would range from 1,503-1,980 sq ft and be priced at Rs 2,500-3,200 a sq ft. The land cost is about Rs 900 a sq ft. This phase has obtained all clearances, said Reddy.
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Making a strong case for FDI in India’s multi-brand retail, Indian Commerce and Industry Minister Anand Sharma has said that entry of global retail giants would help create millions of jobs and not weaken the unorganised sector as feared. Dismissing “septics and scare mongers” who say FDI in the sector would lead to job losses, Sharma said “it (FDI) will generate millions of jobs from sorting to processing to packaging to marketing”.
“I do not see a situation where the unorganised retail sector will be weakened (by allowing FDI) because they are also moving, modernising and competing,” he said. He was here to participate in the ‘India Show’organised by industry body CII. The Department of Industrial Policy and Promotion (DIPP), under Sharma’s charge, had floated a discussion paper on FDI in the sector and is in the process of formulating a policy.
Scores of trader bodies, including Confederation of All India Traders, which represents the unorganised sector, have expressed concerns that millions of livelihood would be at stake if foreign investment is opened in multi-brand retail. However, Sharma argued that “what is produced today by the organised retail industry is sold by the unorganised retail. So organised retail will still remain a much smaller percentage than unorganised retail in villages and small towns”. India does not allow FDI in the politically sensitive multi-brand retail sector, dominated by mom and pop stores but permits 51 per cent foreign investment in single brand retail and 100 per cent in wholesale cash-and-carry business.
In the wake of over Rs one lakh crore annual losses of fruits and vegetables due to lack of proper infrastructure, Sharma said India needs huge investments in warehousing and cold storage chains. He said that with proper infrastructure in place, farmers would get higher prices as the produce would be picked up directly from their doorsteps. Retail giants like Carrefour and Wal-Mart have expressed keen interest in India. When asked by when a decision on permitting FDI in the sector is expected, Sharma said: “All the inputs (on discussion paper) have come. We will have those put together and a core group will look into the recommendations and take a view.”
Insurance major Life Insurance Corporation of India (LIC) today said that will invest a sum of Rs 1,000 crore to develop a mall-cum-office complex at Mohali. “The expected investment in developing a mall-cum-office complex in Mohali will be Rs 1,000 crore and it may be ready within one-and-a-half to two years,” a senior LIC official, who declined to be identified, told reporters here.
On 9.6 acres of land LIC has proposed to build 6 lakh square feet of area for this project. “Three lakh square feet will be developed for shopping and a mall while remaining 3 lakh square feet area will have offices,” he said. Currently, LIC is in the process of hiring an architect for this ambitious real estate project. Consultancy agency IL & FS has also submitted its report on how to go about this project, he revealed.
LIC had bought 9.6 acres of land at a prime location through auction, which was conducted by Greater Mohali Area Development Authority in 2008 by shelling out Rs 465 crore. Interestingly, throughout the auction, LIC remained the sole bidder for this project and paid just over Rs 1 lakh per square yard, which was the highest ever rate in the region at that point of time. LIC has already developed real estate projects in Mumbai and Bangalore. “LIC has also plans to develop a shopping mall in Kolkata where it possesses 5 acres of land,” he further said.
DLF, India’s largest real estate company, has put on hold its plan to sell its non-core assets including ultra-luxury hotel chain Aman Resorts and wind energy business for the next three quarters, said Rajeev Talwar, MD at DLF Developers In July, the realtor had indicated that it plans to raise around `2,500 crore in the next 15-18 months by selling its non-core assets. The firm had raised around `290 crore for the quarter-ended June through sale of land parcels.
“Properties assume different prices at different times. Since prices in the real estate sector have started firming up, we have deferred our divestment plan for three quarters. We will rather wait for the right market condition,” said Mr Talwar. Reasons for holding onto the two business are different. “The valuation of our wind energy business was high so we decided to wait. In case of Aman, we want to check how the travel industry fares before selling our stake in it,” he said. DLF saw improved cash flows from operations in the past few months in the backdrop of recovery in the realty space. With commencement of construction of many projects, the cash flows are expected to improve further. The builder saw its total debt increase 25% to `18,463 crore during the June quarter due to the acquisition of debt-laden DLF Assets.
For DLF, the average cost of debt came down to 10.5% in June 2010 from 11.9% in December 2008. The firm said it will continue to use all free cash flows to reduce debt. Recently promoter billionaire KP Singh picked up 92% stake in its wholly-owned retail subsidiary DLF Brands through fresh issue of shares for around `92 crore, by which DLF Brands ceased to be a subsidiary of DLF.
Abus Security Center, a wholly owned subsidiary of Abus Group of Germany plans to tap India’s booming realty and hospitality sectors. The mechanical and electronic security technology company has already tied up with Bengal Peerless Housing Development Company and Calcutta Medical and Research Institute (CMRI) for providing security solutions, said Philippe Bremicker, managing director, Abus Security Centre.
“The complete security solutions market in Germany alone is estimated to be Euro 2.6 billion. Given India’s population, particularly the size of its middle class, we expect this market in India to be much larger,” he said.
Abus products include video and IP cameras, digital recorders, PCI monitoring cards and wireless alarm systems. The company has tied up with Eastern Institute of Integrated Learning in Management for market research and product rollout. Bremicker said the company is starting its Indian journey from Kolkata but would soon spread wings across the country.
BPTP has announced the launch of its new residential project — Park Arena — in Faridabad. Starting at a base price of Rs 2,750 per square feet, Park Arena is spread over approximately 10.5 acres of land, and is a sports theme based group housing offering a range of 2 BHK, 3 BHK and 4 BHK (Duplex) apartments, according to a company press release.
Park Arena is located in Parklands — the signature BPTP integrated township in Faridabad spread over approximately 1,415.49 acres of land with saleable area of 57.99 million sq ft. Parklands comprises residential plots and independent floors, villas, high and low rise group housings, convenience commercial complexes, IT park, IT SEZ along with other social infrastructure like clubs, hospitals, schools, police post and places of worship. The project is in proximity to the existing NH-2 (Delhi-Agra) as well as the upcoming Faridabad-NOIDA-Ghaziabad expressway which will connect Faridabad, Noida and Ghaziabad.
Commenting on the launch, Amit Raj Jain, senior vice president (marketing), BPTP Ltd, said: “As modern lifestyles change, consumers are consistently seeking newer and better experience. This reflects in every aspect of their lives, most importantly in their choice of homes. Park Arena is our latest innovative product for our customers and will usher in the concept of theme based housing in the NCR region.” Park Arena features sports shops with modern equipments, a gym, spa, indoor and outdoor pool and a health food outlet. Park Arena also features a tennis academy with tennis court, cricket nets, multiple golf putting range and basketball courts.
Ahmedabad-based Dharmadev Infrastructure is planning to foray into commercial realty market in Mumbai. The company will come up with ‘Swaminarayan Mall’ in Malad. The company has already acquired land for the mall and is in the process of acquiring various permissions, according to a report published in DNA. “This is a commercial complex-cum-mall, which will be developed on 2 lakh square feet land,” said Umang Thakkar, chairman and managing director of Dharmadev Infrastructure.
The proposed mall will be located just outside Malad station. “We want to develop it purely as a commercial centre without mixing it with entertainment and other things,” he said. One of the most important features of the mall will be parking space. The company plans to allot two floors in cellar for parking. Dharmadev Infrastructure is planning to invest around Rs 50 crore in this project. The construction work is expected to commence within two months and it will take around two years to complete the project.
Comparing the real estate market in Ahmedabad and Mumbai, Thakkar said the two markets are completely different and hence, they have forayed into Mumbai’s commercial property market. “In Ahmedabad, residential sector is booming, while in Mumbai both segments, residential as well commercial, are witnessing good growth and it is likely to continue in the future too,” he said. Dharmadev Infrastructure is a well-diversified group with its presence in residential, commercial, industrial property development as well as hospitality sectors.
Sobha Developers announced the launch of a super luxury project — Sobha Classic — on Sarjapur Road in Bangalore, that would develop 243 units across 6.9 acres. The apartments will range from 1,752 sq ft to 2,070 sq ft priced between Rs 76.71 lakh and Rs 90.10 lakh, a company press release said.
The project is expected to be complete by December 2013. The project will include amenities such as a fully-equipped clubhouse with gyms for weight training and cardio, swimming pool, steam room, billiards, table tennis, carrom, jogging track, half basket ball court, rappelling wall, meditation room and two community halls (indoor and outdoor), it added.
After the grand success of Ocus Technopolis, located on the Golf Course Road in Gurgaon, Ocus Group has announced the launch of Ocus Technopolis2 — Gurgaon’s first ultra efficient commercial project. Spread over 2.43 acres in Sector 51, Gurgaon, Ocus Technopolis2 is slated to become the location of choice for all retail and commercial needs, claims the company. This commercial edifice will have a range of office blocks/ business suites overlooking the wide and open expanses of Sector 51, giving a clear and unobstructed view of the Gurgaon skyline, along with an open sky retail piazza to satisfy everyday as well as exquisite needs.
With a fascinating and diversified landscaping, Technopolis2 aims to fulfill the desire of those who want to “live their work life,” with serene natural surroundings and modern and premium amenities at their fingertips. Several on-site and nearby amenities in and around Technopolis2, add a unique appeal to the address. It will boast of flexi offices, furnished business suites, business centre, several fully-equipped conference rooms, F&B outlets, multi-cuisine take-away & a world class retail arcade among other facilities.
With easy accessibility to the National Capital with the City Centre Metro station in close proximity and direct access to NH8 & golf course road, Technopolis2 seeks to contribute to the growth and beauty of Gurgaon.
After a gap of two years, mortgage leader HDFC has increased its retail prime lending rate (RPLR) by 50 basis points to 14.25 per cent. Significantly, the lender has not said anything on the continuation of its “teaser rates loans”, launched late last year and which was supposed to end yesterday.
“This (the hike) is in line with the current rates of interest in the economy, which have hardened in the last few months due to rising inflation and tightening of liquidity in the domestic market,” HDFC said in a statement, adding that the new rates will be effective from tomorrow.
This is the first hike since August 2008 by the largest mortgages player. HDFC follows a three-month reset cycle for its floating rate loans and hence the change in RPLR will impact all existing customers over the next three months, depending on their date of first disbursement, it said.
However, loans up to Rs 30 lakh will bear an effective interest of 9.25 per cent, while those in the Rs 30-50 lakh bracket, will carry an interest of 9.5 per cent. For loans above Rs 50 lakh, interest will be 9.75 per cent, the company spokesperson said, adding the above rates are irrespective of tenure of the loans.
A host of lenders like the State Bank, ICICI Bank and others have raised their benchmark lending rates in the last few weeks following the Reserve Bank hiking its key short-term lending and borrowing rates (repo and reverse repo) by 0.25 per cent and 0.50 per cent to 5.75 and 4.5 per cent respectively in the Q1 credit policy review on July 27.
Under the teaser rate scheme, which was innovated by SBI in early 2009, HDFC charges 8.25 per cent up to March 31, 2011, 9.25 per cent for the period between April 1, 2011 and March 31, 2012 and the applicable floating rate for the remaining term of the mortgage.
The Government of Singapore Investment Corporation (GIC) has hired Kishore Gotety, who was most recently at RREEF, as country head for India real estate. GIC confirmed the appointment of Gotety as head of real estate for India but declined to comment further. However, the hire suggests GIC believes the opportunity is ripe to start investing in real estate in India.
Gotety was earlier with RREEF Alternative Investments, the global alternative investments business of Deutsche Bank’s asset management division. Real estate is one of RREEF’s core businesses. Gotety joined RREEF at the end of 2007 as head of Deutsche Asset Management’s real estate and infrastructure investment advisory services in India and was widely expected to spearhead the firm’s expansion there.
In January 2008 Gotety closed the first real estate deal for RREEF in India, a $70 million investment in Golden Gate Properties. But the credit crisis caused RREEF to take a pause in its India investments and consequently Gotety was transferred to Hong Kong last year as head of portfolio management for Asia-Pacific in RREEF’s global opportunistic investments team.
He joined RREEF from the ICICI group’s private equity firm ICICI Venture where he was director of investments, heading the real estate investment and funds management business. In this capacity he closed more than 10 real estate investments for ICICI Venture.
Gotety is the most recent in a series of high-level departures from RREEF in Asia. Early this year, Hong Kong-based chief investment officer Mark Fogle, who had been with RREEF since 2007, left to become chief executive officer of investment fund Amur Capital Partners. Media reported that Amur has been backed by some wealthy Hong Kong-based families.
Around the same time, Brian Chinappi, a RREEF veteran who had been with the firm since 1999 and who was head of acquisitions for Asia ex-Japan, left to join Standard Chartered as global head of real estate investment. A specialist not connected to the developments said the departures could have been precipitated by the fact that, on a relative basis, property valuations in Western markets currently seem cheaper than those in Asia, and global real estate investors are thus putting less focus on Asia.
But GIC, which manages in excess of $100 billion, obviously has the resources and management bandwidth to spread its real estate investments across the globe and, with its headquarters in Singapore, Asia is an obvious place to scout for investments. GIC said last year that it intended to increase its allocation to real estate. In hiring Gotety, the firm has found someone well-suited to identify and close investments in a new market, namely India.
The Consumer Affairs Ministry has given the green signal to allow 49 per cent FDI in multi-brand retail. It has written a letter to this effect to the Commerce Ministry. India currently allows 100 per cent FDI in cash-and-carry operation and 51 per cent in single-brand retailing. Foreign investors are barred from investing in multi-brand retail. Additionally, the Ministry also sought that a model law be first put in place at the State-level to protect mom-and-pop stores from the impact of the ‘Big Boys’ of retail.
“Multi-brand retail should be permitted with a cap of 49 per cent. A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing,” the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion in June on allowing 100 per cent FDI in multi-brand retail.
A senior government official said the Consumer Affairs Ministry has sought the enactment of the National Shopping Mall Regulation Act to regulate the fiscal and social aspects of the retail sector, besides allowing mom-and-pop stores to become franchises of multi-brand retailers. “This will help grow not just the business but also in setting up back-end infrastructure which is much needed for the evolution of the retail sector,” the official added.
According to an ICRIER study, commissioned by the Commerce Ministry in 2007, “the retail business, in India, is estimated to grow at 13 per cent each year from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganised retail sector is expected to grow at about 10 per cent a year from $309 billion 2006-07 to $496 billion in 2011-12.”
In an attempt to cash in on the peak winter season and the improved economic scenario, “Hoteliers are planning to increase the average room rates (ARRs) by 10-15 per cent from September 2010 as they expect tourist traffic to improve,” says a report by domestic brokerage Angel Broking.
Although, the report didn’t talk about their plans for the upcoming Commonwealth Games, it is expected that tariffs will increase from October 3-14 on the back of strong demand. Last two years proved dull for the hotel companies as they were forced to slash average room rates by 25-30 per cent due to terrorist attacks in the country that led to lower occupancy levels as people were apprehensive to travel, the report said.
Hotel industry, which is inextricably linked to the tourism industry and its growth, increases rates before the crucial winter season every year. Reflecting a sign of improvement over last two seasons the hotel industry is inching closer to the benchmark 2008-09 levels in terms of booking volumes. Although, demand in the leisure travel segment may take longer time to revive but demand from the business segment, besides local tourists, is likely to push up occupancy rates.
While occupancy rates are expected to rise to 70 per cent during the upcoming season (October 2010-March 2011), thereby providing opportunity to hoteliers to firm up their average room rates. On an average, the room tariff in a premium hotel in metros hovers around Rs 8,000-Rs 10,000 per day. But from September, you may have to pay in the range of Rs 9,200-Rs 11, 500. And going by the government estimates, in December, which is the peak tourist season, rates often go up to USD 500 (around Rs 23,300) in the five-star category hotels in Delhi.
Commenting on the tariff hike Taj Group of Hotels Senior Vice-President (Sales and Marketing) Ajoy Misra had said:”The tariffs will go up marginally…Fortunately the hotels industry has seen occupancy going up in the last two quarters…With demand going up now,from September onwards there will be an upward revision in hotel charges.” The Indian hotel industry had witnessed a tremendous growth in 2008. Experts feel that this year, the hotel industry will make a comeback after the sluggish performance last year, driven by the boom in the overall economy and high growth in sectors like information technology, telecom, retail and real estate among others. Besides, rising stock market and new business opportunities are also attracting foreign investors and international corporate travellers to look for business opportunities in the country.
Fascinated by the lure of real estate, owners of fuel refilling centres in the city have long started dreaming of giving up their current business and jumping into the land development bandwagon. Some of them, in fact, have already got the civic body’s permission to change the usage of the land. However, the state government has recently issued a directive to Brihanmumbai Municipal Corporation (BMC) not to allow petrol pump owners to change the designated use of the land. Out of the 257 petrol pumps in the city, 40% are on lease land.
“Although the civic body had earlier decided not to extend the lease, with this government order it would now extend the lease on the condition that the owner would not change the land’s usage,” said a civic official from the Building Proposals department. To cash in on the rising property prices petrol pump owners have been submitting development proposals to the BMC. But what is worrying is the huge disparity in the ratio between petrol pumps and number of vehicles in the city limits.
Many social organisations had also requested the government not to allow any change on petrol pump land. The Mumbai Taxi Association had filed a writ petition in the Bombay high court on the same issue. It is, in fact, following the judgment on the writ that the government decided that the land of petrol refilling stations should be used only for the designated purpose.
Federation of All Maharashtra Petrol Dealers’ Association president Ravi Shinde said that the demand was only for Mumbai, but the state government issued the notification all over the state. “Only Mumbai is facing acute shortage of land and the land prices are booming. In other cities there is no such situation. So, the government should rethink on it,” said Shinde.
Six real estate projects in Chennai have got top ratings from Crisil, which has, for the first time, has come out with a product to provide city-specific all round assessment of real estate projects.
Addressing a gathering got up to announce the award of 7-Star rating to Abode Valley and 6-Star rating to Central Park — couple of projects promoted by Lancor Holdings — Lodd Rajendra, Head of Business Development, Crisil Ratings, said Crisil was now working on two more mandates from the realty sector. He said Crisil had thus far rated 21 real estate projects.
Detailing the salient features of the two Crisil rated projects, Mallika Ravi, CEO, Lancor Holdings, said that Lancor was “committed to quality and transparency in our dealings with our stake holdings.” Of the six Crisil-rated real estate projects in Chennai, two are promoted by Lancor. The remaining are by Akshaya Group. According to Mr. Rajendra, the rating will address two critical needs in the realty sector — improved transparency and objective bench-marking of projects.
Crisil Real Estate Star Rating (CREST), a product launched early this month, is intended to help flat buyers benchmark and identify quality projects within a city. Such ratings, it is claimed, will provide a comprehensive evaluation of all project-specific risks, which could impact the quality of the project.
Reflecting improved investor confidence, investment in commercial real estate globally is expected to witness a “healthy” growth of 40-50 per cent to $300 billion in the current year, says a report. According to the report by global real estate services firm Jones Lang LaSalle, the first half of 2010 saw investment worth $130 billion in the commercial real estate globally and is likely to touch $300 billion in the full year, representing an increase of 40-50 per cent from 2009.
“The first half of the year showed that confidence has improved and momentum has increased. While markets across the globe are strengthening, the last few weeks have shown that regional markets are moving with different dynamics,” the report noted. In the commercial real estate market, the quickest recovery was seen in the Asia Pacific. Europe lagged behind, where the investors still seem more hesitant, due to sovereign debt and austerity packages concerns, followed by the US, which had a slow start to 2010, but investment markets are picking up with the stabilised market fundamentals.
While, the rental markets are still to catch up in Asia with the improved market sentiment, the rental growth is expected to make a comeback in few European markets over the second half of 2010 and 2011.
JP Morgan is positive on India despite the global environment being quite uncertain, JP Morgan Asset Management’s Investment Manager and India Country Specialist, Rukhshad Shroff, told reporters here. JP Morgan Asset Management is a leading global asset management company providing world-class investment solutions to clients. “We are positive on emerging markets. We remain very positive on India and if you take a slightly medium-term view, there are ample reasons to be cheerful and optimistic on the Indian market,” Shroff said.
India has achieved an eight per cent GDP growth despite the global economic uncertainty. The country also attracted FIIs inflow this calendar year of around $11-12-billion till date, in an extreme risk-averse global environment, he said. In the short-term, there may be volatility and hiccups but, generally speaking, “we have got all the ingredients for a reasonable market in place,” he said. Shroff pointed out that the BSE Sensex remained positive in 23 out of 31-years and gave 60 per cent returns in five-year period. It has given 30-60 per cent returns in 7- years and registered a 50 per cent decline in only one-year.
Indian corporates’ fundamentals and earnings are good, though valuations may be slightly on the higher side of long- term averages but that was the case even six-months ago and the markets held up, which means the markets digesting these valuations allowing earnings to come through, he said. Accelerating investment in infrastructure, industrial and real estate sectors are expected to drive growth in FY 10 and the EPS could double in next 3-4-years period, Shroff said.
In fact, JP Morgan expects equities to provide better returns than other asset classes over the medium-term. “We expect equities to provide better returns than other asset classes over the medium-term, but are tactically cautious near-term, waiting for a better entry point,” JP Morgan’s Vice-President, Head of Investment Services, Geoff Lewis, said. The global stock markets retreated in May and June, but bounced back strongly in July. The emerging market economies have recovered quickly from the global recession, showing a surprising degree of resilience and economic decoupling, he said.
Commenting on the outlook, Lewis said, the US growth will moderate towards sub-par but positive levels, rather than dip back into recession. Disinflation not deflation in the US economy is the most likely outcome in 2011, he said. Global equities offer sizeable risk premia over Government bonds. Investors should be overweight with a strong bias towards emerging markets, Lewis said
The $2.5-billion Godrej group plans to make its property development arm Godrej Properties (GPL) the largest business within the group in 5-10 years. “This is the fastest growing and capital intensive business and does not entail competitive pressures as other businesses have. In turn, most of this company’s growth will be from the affordable housing segment,” group chairman Adi Godrej said.
Godrej Properties will be raising Rs 500-1000 crore within two years through a qualified institutional placement. “The promoter holding in the company is around 83%. We can dilute up to 10% equity to raise money depending on project requirements,” he said. The company, which has a debt-equity ratio of 0.6:1, had raised around Rs 550 crore in January through its initial public offering.
The company has lined up residential and commercial projects in Ahmedabad, Bangalore, Mumbai, Hyderabad, Chandigarh and Kolkata. In Hyderabad, it will develop 7.5 million sq ft in the outskirts of Moosapet and Patencheru, targeting the affordable housing and the retail segments. It is currently developing properties of around 90 million sq ft across 25-30 projects. GPL is also developing residential property of around 15 million sq ft. “Affordable segment, what we define is an apartment costing less than Rs 25 lakh, has better growth propositions as it is easily accessible to the larger parts of population,” he said.
The group is also looking at inorganic growth options in the FMCG segment and may acquire companies in the haircare and household insecticides segment, which contribute to a chunk of the FMCG business. Recently it had acquired a household product company in Indonesia, a soap company in Nigeria and haircare company in South America. “Our first choice would be India. However we are open to buyouts internationally too,” Godrej said.
He further added that interestingly, the per capita sales in Indonesia, Argentina and South Africa is higher than in India. On the other hand, the group hopes to chart a 25-30% growth, of which organic growth would contribute 15-20% and the rest from the inorganic route. “While we haven’t earmarked any funds, we would use funds in the cash reserves and then go for debt or equity,” he said.
ITC on Tuesday said it expects to have up to 60 new hotel properties operational in the next 3-4 years as it expands to tap the growing potential of the Indian hospitality sector.
The company, which currently has about 40 hotels at various stages of construction, will start work on another 15-20 new in the next one year. “So in the next 3-4 years ITC will have up to 60 new properties operational,” ITC chief executive of Hotels Division, Nakul Anand said. “Room capacity will vary from 40-60 to up to 600 depending on the type of property,” Anand said.
ITC would prefer to invest in high-end, seven star super luxury hotels. ITC operates its hospitality business under the brands — ITC Hotels Luxury Collection, WelcomHotels, Fortune Hotels (budget hotels), and WelcomHeritage (chain of palaces, forts and havelis.
In a bid to create housing stock jointly with owners having large tracts of land and to meet the increasing demand for affordable housing in Chennai metropolitan area (CMA), the Chennai Metropolitan Development Authority (CMDA) has framed a new set of guidelines for implementation of the Public Private Partnership (PPP) scheme.
The guidelines comes in the wake of Minister for Slum Clearance and Accommodation Control Suba Thangavelan’s announcement in the Assembly in April that the Housing and Urban Development Department would implement PPP for housing projects in the CMA.
According to these guidelines, landowners or group of individuals or companies or trusts or cooperatives or local bodies holding more than 100 acres of land can participate in the joint venture development with the CMDA to create housing stock. The guidelines also state that landowners shall enter into a memorandum of understanding with the CMDA with a registered agreement supported by general power of attorney with specific clauses enabling the authority to hand over lands earmarked for open space and roads to the local body along with the power to re-allot the developed land to other beneficiaries.
Besides, the agreement shall be provided with the required grievance redressal mechanism, including provision for arbitration and to settle the disputes in jurisdiction courts. But, real estate experts like Marg Properties Advisor and former chief planner of CMDA Subash Chandra, while hailing the scheme, feel that the plan has a limited scope. “Under CMA, getting 100 acres is quite difficult. However, in Kancheepuram and Tiruvallur, such lands are available,” Chandra said.
He feels since it is a pilot project, the government may later reduce the extent to 50 acres or 25 acres. Some realty experts feel that the Directorate of Town and Country Planning in Tamil Nadu should be made the agency to implement the plan as the CMDA doesn’t have any say over the region outside the CMA.
In an indication of continuing differences over the new foreign direct investment policy, the central bank has proposed changes in the provisions relating to private banks that will make it difficult for them to attract foreign investment if they have insurance ventures. Also, private banks that have sizeable foreign investment will find it difficult to float insurance ventures with foreign partners.
The Reserve Bank of India has proposed that foreign direct investment, or FDI, proposals of private banks that have an insurance joint venture or subsidiary should seek approval of the RBI and insurance regulator IRDA. The central bank has suggested these changes to ensure that 26% foreign investment limit in insurance sector is not breached even indirectly.
“The new rules will ensure that there is no violation of the current (sectoral limit) guidelines for future players,” said an RBI official, adding that the central bank was not decided on the existing insurance ventures of banks that have sizeable foreign investment. This will also mean that private sector banks that have substantial foreign investment will need permission from the two regulators for new insurance ventures.
“Some of these (private) banks have not yet made a foray in the insurance sector. In any case, entrants have to seek permission from their respective regulators,” said a finance ministry official, adding that the ministry supports the RBI move. As per the new FDI guidelines, all downstream investments by a majority Indian-owned and/or controlled by Indian company are considered as Indian investment.
In the case of banks, the policy allows 49% FDI through automatic route and a further 25% through approval of the foreign investment promotion board, taking the total to 74%. Currently, a majority Indian-owned-and-controlled bank can set up an insurance venture with 26% foreign stake. But it would be violating the sectoral limit as its foreign investors will also have a proportionate stake in the downstream insurance venture.
The RBI is keen to preclude such investment beyond the sectoral limit and the proposal underscores the conservative approach of the central bank. In its discussion paper on new banking licences, the central bank has suggested lowering the foreign investment limit in new private sector banks to below 50%. In its paper, the RBI had mentioned that since the objective is to create strong domestic banking entities and a diversified banking sector, the aggregate non-resident investment, including FDI, NRI and FII, could be capped at a suitable level below 50% and locked at that level for the initial 10 years. The suggestion goes against the spirit of the new foreign direct investment policy that has done away with the concept of indirect calculation of foreign investment.
Buoyant over the success of its multi-utility commercial property projects City Centre-I (at Salt Lake) and City Centre-II (at Rajarhat), Ambuja Realty has now come up with its third City Centre, this time round at Siliguri, on the foothills of the picturesque of Darjeeling district. More importantly, it has lined up three more City Centres — all beyond Kolkata and in fact two of them are outside West Bengal.
Harshavardhan Neotia, chairman, Ambuja Realty, said that while City Centre at Siliguri has come up with a capital outlay of Rs 280 crore, the three other City Centres at Haldia, Raipur and Patna would involve an investment of close to Rs 550 crore. Patna City Centre will be ready by the end of the current year, Raipur City Centre will be ready by December 2011 and City Centre Haldia will be up and running by 2012, he said.
Ambuja Realty has already teamed up with leading chains and leading brands like Shoppers Stop, Spencer’s, Big Cinemas, Max Lifestyle, KFC, Hangout — the Food Court, Lilliput World, Planet Fashion, Subway, Crossword, Timezone, Adidas, Aawrun, Bata, Biba, Café Coffe Day, Gini & Jony, Converse, Golden Tips, Hoffmen, Jockey, John Players, Levi’s, L’oreal, Metro, Music World, Moustache, Nike, Peter England, Planet M, Prapti, Samsonite, Tea Junction, Success, Titan, Turtle, Wills Lifestyle, to mention a few. And Neotia’s enthusiasm stems from this.
“Some of them are coming for the first time while others are already there with the existing City Centres. Siliguri, by and large untapped, has tremendous potential as a retail hub. Siliguri is not just a major trading zone; it is also a gateway to the hills of Darjeeling, Sikkim and the Northeast. We are tapping all by offering this new plush retail platform,” he said.
Located in Uttarayon at the city’s Darjeeling Mor, City Centre Siliguri is spread on a sprawling 8 lakh sq ft are, incidentally is the biggest of all the City Centres (existing and upcoming ones). City Centre Salt Lake and City Centre New Town are spread across 3 lakh sq ft and 3.52 lakh sq ft, respectively. “In City Centre Siliguri, we have tried to create an offering that appeals to every aspiration and need of the residents in and around Siliguri. We sincerely hope that City Centre Siliguri with its entire bouquet of offering makes a positive difference to the lives of residents of Siliguri and beyond. We hope it will truly become a family destination,” said Neotia. The developers are in fact extremely bullish about the City Centre-Siliguri and Neotia hoped that it would generate overall business turnover of over Rs 300 crore in the first year itself.
The other advantage is that it is coming up at the entrance of ‘Uttorayan’, the 400-acre modern and integrated township developed by the group. City Centre Siliguri, the first phase of which will be thrown open in December, this year, will house departmental stores, a 4-screen cineplex with a seating capacity of 1,000, food courts, banqueting facilities, fine dining restaurants, gaming zone, kiosks, business centre with state-of-the-art office spaces and over 200 branded and unbranded shops.
“It will also boast of 75,000 sq ft of atrium lobby and an open air entertainment area called ‘Celebration Square’, which promises to be a perfect venue for get-togethers and hangouts. It will also be pulsating with regular events and promotions, designed and executed by our in-house dedicated division and is sure to cater to a large footfall,” said Neotia.
Spread over 10.5 acres, City Centre Siliguri will comprise the mall, office space and a five-star hotel. “While a large part of the mall will be opened in December, it will take another 12 months for the rest of the mall, the hotel and the office space to be fully functional,” said Neotia. The new City Centre will be architecturally similar to the Salt Lake and New Town ones, which means it will also house AC and non-AC spaces, seamless connectivity and a hangout zone called Celebration Square inspired by the popular kund area.
With an investment of Rs 200 crore, Ambuja Realty is eyeing an annual turnover of more than Rs 300 crore from City Centre Siliguri. The mall is likely to bring a number of international and national brands to the parched Siliguri shopper. With Shoppers Stop to Subway, KFC to Big Cinemas set to open doors at City Centre Siliguri, it is positioning itself as the one-stop retail and entertainment destination. Ambuja Realty will next have City Centre malls at Haldia, Raipur and Patna.
Two of the world’s top retailers, Wal-Mart and Carrefour, vying for a cut in India’s organized retail pie, have asked the government to allow up to 51 per cent foreign investment in multi-brand retail. India allows 51 per cent foreign direct investment (FDI) in single-brand retail and 100 per cent FDI in cash-and-carry or wholesale trading.
Wal-Mart has partnered Bharti Group to operate cash-and-carry wholesale stores and intends to continue the tie-up for multi-brand retailing. Bharti Wal-Mart believes that FDI in multi-brand retail should be permitted without any restrictions. They believe it will create conditions for greater flow of investments to the back-end with related benefits for farmers, small businesses and consumers.
Carrefour, which is also drawing up plans to roll out wholesale formats, also supports a more relaxed FDI policy. It feels any cap or restrictions on FDI in this sector may result in potential loss of opportunities of inclusive growth for the retail sector and that the cap should be such that a foreign retailer is entitled to make a minimum of 51 per cent investment with rights to manage the company and bring about efficiency in operations and induct the best industry practices.
Given the state of the supply chain in India, much of the investment in the back-end would be up-front, particularly in the initial years. A fixed percentage of investment on the back-end could therefore, leads to a misallocation of resources and takes away from where they are most needed to create efficient supply chains. Any stipulation for minimum investment of any fixed percentage in the back-end infrastructure, beyond what the foreign retailers are planning to do, would put undue and additional pressure on the profitability margin expected from retail operations and negatively influence the viability of the operations.
The Prestige Group has launched a premium residential project — Prestige Silver Oak — in Whitefield, Bangalore. Spread across 17 acres, the project comprises 146 independent villas and 32 low-rise apartments and is set amidst scenic landscapes. According to the company, the project is all set to give a new meaning to luxurious living in the city and poised to become the next premium luxury destination in the Bangalore city.
Irfan Razack, chairman and managing director of Prestige Group, said, “The Prestige Group has always attempted to create landmarks in Bangalore through our commitment to international quality and design. Over the years, we have created a niche for ourselves in the luxury residences category and Prestige Silver Oak promises to be yet another milestone for the company in this segment. The development reflects an introduction to a popular West Asia type architecture with spatial designs which combines fantasy with the practicality of modern day lifestyle.”
The project promises a unique blend of opulence with signature qualities and is set to become one of the company’s landmark projects, Prestige said in a statement. The Independent bungalows, ranging from 3,606 sq ft to 5,091 sq ft are double-storied edifices ensconced in their own private gardens. Eight different models of these elegant villas are available, each including four palatial bedrooms.
The apartments spread across four floors, with areas ranging between 1,851 sq ft and 2,411 sq ft have been designed on an outward looking plan to maximise the views to the surrounding serene greenery. Keeping in mind the recreational needs of their residents, Prestige Silver Oak also provides an exclusive clubhouse, which comes with all the required amenities that is a necessity for modern day premium lifestyle. The development has been designed to accommodate only 178 units in order to provide a sylvan haven to its residents. The land coverage is only 30 per cent to provide extensive landscape areas, Prestige said.
ETA Star, an offshoot of ETA Ascon Group, in association with the state-owned Tidco, has launched — Globevill, which is said to be the largest integrated township development in Tamil Nadu. To come up on the Chennai-Bangalore National Highway and located close to Sriperumbudur, the hottest industrial hub around Chennai, Globevill is spread over 350 acres.
Besides, residential and commercial space, the Globevill township plans to offer a hospital, restaurants, a business hotel, retail and recreational spaces as well as a full fledged school. ETA has tied up with Ryan International School to house the school within the spatce of the project.
ETA plans to develop the Globevill project across phases, extending over five years The first phase of development, involving around 82 acres of land, will offer nearly 2,000 residential apartment units, ranging from 1 BHK, 2 BHK and 3 BHK units to even villas. The residential apartments will come in the range of 600-1,200 sq ft.
“The first phase development will be completed in about 18-24 months. We have now started taking bookings for the first phase and we have announced an inaugural price of Rs 2,200 per sq ft for the residential apartments,” Ahmed Shakir, managing director, ETA Star, said.
According to him, Globevill, situated very close to the Sipcot Industrial Estate that houses the manufacturing units of some of the leading multinational companies, will target the over three lakh employees working in the region.
“Once completed, Globevill is bound to become a landmark in construction and design standards for the industry and is surely going to start a new trend of developing more integrated townships in Tamil Nadu,” says Fayaz Ahmed, director, ETA Star. “Our township will be setting a new trend in the lifestyle patterns for people in and around Chennai,” he added.
ETA Star, which hit the limelight among the property developers in Chennai with the launch of its Citi Centre Mall, has since then moved on to develop residential projects. While it has already completed one project near Poonamallee, another project is under development on OMR, Chennai’s IT Corridor.
Indospace Logistics Fund, part of the Sameer Sain-promoted Everstone Capital that invests in logistics and industrial real estate, plans to spend around `500 crore in developing an integrated logistics park in the National Capital Region, according to people familiar with the development.
Indospace Logistics is currently talking to FWS, a Delhi-based logistics developer, to build the facility which will have large warehouses which can be used by retail and consumer goods companies. The proposed implementation of the Goods and Services Tax, or GST, is expected to create the need for large warehouses that will replace the current practice of smaller stockyards in multiple states. This is done to avoid duplication of taxes but will not be required once the GST regime is in place.
If the logistics plan fructifies, this will be one of Everstone Capital’s largest investments after being spun off from Kishore Biyani’s Future Capital earlier this year. Both Everstone and FWS declined to comment for this story. DTZ, a real estate consultancy, is advising FWS on the deal.
“Indospace has been following a model of buying land and developing industrial real estate projects,” said the people cited earlier. “This current deal would be part of that focus,” they added. Everstone Capital was formed after Sameer Sain parted ways with Kishore Biyani, the owner of Pantaloon, in January 2010. Mr Sain formed Everstone Capital along with Atul Kapur, who had worked along with him at Goldman Sachs. Everstone’s Indospace is a $250-million fund that also has a joint venture with Realterm Global, a US-based industrial real estate investment firm.
The fund already has projects underway in Pune and Chennai where it is building warehouses, distribution and storage spaces for use by automotive companies such as Volkswagen, Tata Motors, Mahindra, Daimler and Bosch. FWS is a logistics developer, promoted by Delhi-based businessman Vikas Yadav, that has already leased about 1.5 million square feet of logistics space across the NCR. Its clients for warehouses include companies such as P&G, DHL and the Future Group.
The need for large warehouses is likely to rise once the government’s proposed GST is fully implemented, as the new legislation will have a uniform tax rate. Companies now have to deal with a central sales tax and a state sales tax, which leads to a higher levy as firms with a manufacturing presence in one state have to resort to accounting jugglery to avoid paying dual taxes for sale in a different state.
The GST will encourage companies to sign supply and distribution management contracts with logistics companies. Companies have started to negotiate with large logistics companies to manage their costs. While the government has targeted to introduce GST by April 2011, the schedule is likely to get delayed by a year due to lack of consensus among all states.
The government may soon allow foreigners to set up limited liability partnerships in sectors where 100% foreign investment is allowed, taking a decisive step after much flip-flop over funding guidelines for this form of business organisation, favoured globally for its flexibility.
The department of industrial policy and promotion (DIPP), the nodal agency for foreign investment policy, has written to the finance ministry giving the broad contours of the proposed foreign investment framework for LLPs. It has suggested that foreign investment be allowed in LLPs with prior approval.
“This will give foreign investors flexibility to operate in a simpler environment with minimal compliances and yet be tax efficient,” said Akash Gupt, executive director of consulting firm PwC. LLPs share many of its features with normal partnerships, but partners will have reduced personal responsibility for its business debts as the partnership itself is responsible for such liabilities.
A discussion paper is expected to be put up in public domain soon, said a government official privy to the discussions. This would be third in the series of discussion papers released by the DIPP. The earlier ones were on foreign investment in defence production and multi-brand retail. DIPP had, after initial discussions earlier this year, taken a view against opening up this form of business organisation to foreigners. During those discussions, the Reserve Bank of India had favoured FDI up to 49% in LLPs in select sectors, while the finance ministry was in favour of a more liberal regime, but with prior approval.
As per the policy proposed by the DIPP, foreigners will not be allowed to set up LLPs in sectors such as real estate where conditions such as minimum capitalisation and lock-in period are applicable. It also bars foreigners in sectors where FDI is prohibited or restricted with caps on investment.
Indian companies having foreign investments will not be eligible to make investments in LLPs. Similarly, LLPs having foreign investment will not be allowed to make downstream investments or raise overseas debt, said a senior government official. LLPs incorporate the features of companies and partnerships. The liability of partners is limited to the extent of their stakes in the entity. It also has various advantages over present corporate structures. Unlike private limited companies where number of shareholders is limited to 50, an LLP can have unlimited number of partners.
Compliances relating to meetings and maintenance of statuary records are not applicable for LLPs. Currently, FDI is not permitted in partnerships firms, but is allowed in companies depending on sectoral cap. FDI is allowed up to 100% in a number of sectors such as manufacturing through the automatic route.
Sole proprietorship firms can get non-resident investment on a non-repatriable basis. Globally, 100% foreign investment is permitted in LLPs though they are not allowed to undertake certain sectoral activities in some countries.
RBI has said if lending rate is higher than base rate, banks do not need to charge higher rate.
Sobha Developers Ltd., the best performing stock on the Bombay Stock Exchange Realty Index this year, plans to start a 5 billion rupee ($107 million) project in a New Delhi suburb to build luxury homes as the economy expands. “We are entering the golden era in real estate now,” J.C. Sharma, managing director of the company said in an interview. “Residential houses are showing signs of robust recovery. The growth phase has started now.”
The project, located in Gurgaon, on the outskirts of New Delhi, is spread across 150 acres (61 hectares) and will start by March, Sharma said. The government’s focus on building roads, ports and airports, a growing middle class and a rise in factory output are leading to higher economic growth and stoking demand for homes, Sharma said. India’s economy has grown an average 8.5 percent every year during the past five years, doubling per- capita incomes in the period.
Sobha rose 4.3 percent to 387.60 rupees, the highest in more than two years, at the 3.30 p.m. close of trading in Mumbai. The stock, the best performer today on the 13-company Realty Index, has climbed 58 percent this year outperforming a 5.4 percent advance by the benchmark Sensitive Index.
The rich rarely admit when they lose money. Often it’s too little to matter. More often, they are too proud to tell the world how wrong they were. A client, who asks a private wealth manager to handle Rs 50 lakh, may change her banker if the man fails. But she is unlikely to write a letter to the editor, or drop a mail to regulators — things that angry mutual fund investors often do. Better known as HNIs, these investor’s fish for ‘sophisticated’ products that appear smarter than stocks or bonds.
Over the last four years, more and more of them have been drawn to properties. They don’t get into cash deals, broker-dealings and paper work — the messy side of real estate transactions. Instead, they ask real estate fund managers to grow their money. Their message to fund managers is simple: “first, don’t buy listed stocks, go for unlisted builders; second, pick those property firms with projects in Mumbai and Delhi, the hottest markets.” Around 15 local real estate funds are today managing Rs 10,000-12,000 crore. That’s as big as the portfolio management business of stock brokers.
Like PE players, their more glamorous neighbours, the property firms offer a hurdle rate of return to investors. Simply put, this means that the fund has to generate a floor return, that varies from 8-11%, before it can claim a slice of the profit. This return (which isn’t guaranteed) goes to investors and anything above it is shared in a way where the fund keeps 20% of the profit and the balance 80% goes to investors. Say, the hurdle rate is 8%, and the fund generates 15%.
The extra 7% over the hurdle rate is split, with investors receiving 5.6% and the fund keeping 1.4%. One of the funds, backed by a blue-chip institution, has been clever enough to raise money before Lehman, sit on the cash for a year and invest it after the meltdown. But not all have been lucky; and a few missed the bull run. The four-year old party is slowly beginning to get a little crowded. Corporates, professionals, builders and brokerage firms are floating funds. And none of them has a problem in raising money.
What’s helping is a near stagnant mutual fund industry. Very little new money is flowing into mutual funds, which can no longer use investors’ money to pay brokers and banks who have so far helped them mop up funds. But real estate funds, away from the regulator’s glare, have no such curbs. They are paying as high as 3-4% commission to whoever is interested to raise money for them.
It’s not Indians alone who are monitoring the real estate market here. More and more money is being pumped into India’s housing sector from abroad. And this, despite the recent downturn. Foreign direct investment (FDI) in India’s booming real estate and housing market jumped 80 times between 2005 and 2010. Figures obtained by TOI show that in 2005, FDI in real estate was a mere Rs 171 crore. That soared to Rs 13,586 crore in 2009-10. In April and May this year, Rs 737 crore in FDI was pumped into the sector.
It is no surprise that the largest number of building projects where FDI is in play are in the country’s commercial capital, Mumbai. Of the total 1,614 projects in which foreign investors have put in money since 2005, 422 were cleared by the Reserve Bank of India’s Mumbai office, followed closely by 316 in Delhi. Other big cities like Bangalore (225 projects), Hyderabad (105 projects) and Chennai (68 projects) also enjoyed considerable attention of foreign real estate developers.
Interestingly, given the booming property market across the country, FDIs are not confined to metros and big cities alone. Thus since 2005, various real estate projects have been given a green signal by RBI’s offices in Bhopal, Kanpur, Kochi, Jaipur and Panaji, amongst other places. The largest FDI in the last five years remains in the construction of a technology park at Bandra Kurla Complex in Mumbai. In this case, $372 million has been brought in through a foreign collaborator based in Mauritius.
Although the FDI has come from as many 34 countries and destinations as diverse as the Netherlands, USA, Saudi Arabia and even Sudan, data available with TOI shows that in last five years the largest number of foreign collaborators working with Indian real estate firms were based in Mauritius. Technically speaking, the Foreign Exchange Management Act or FEMA, prohibits foreign investment in real estate and construction of farm houses. However, the definition of “real estate business does not include development of townships, construction of residential or commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure”.
The International Finance Corporation is in talks with several real estate developers to create large affordable housing projects in India. “IFC has been talking with everybody; there have been discussions with the Tatas and with other corporate groups on this,” said Mr Paolo Martelli, Director, South Asia, IFC. “Everybody” includes both real estate developers and housing finance companies, he said.
“We are working on this and we hope one of these projects will be developed in the next six months,” he said. If the estimated housing deficit in India is 25 million units, then such a large requirement cannot be tackled completely from a real estate point of view, according to Mr Martelli. IFC can help the Indian sector with advice on how affordable housing has been tackled in other countries such as Mexico where “literally, they are building cities at a time, 15,000 to 20,000 homes, costing between $7,000 to $15,000”. (The Corporation is also in talks with home builder Homex in Mexico for such projects here in India.)
But both the real estate and financial sectors here must understand the underlying concept – that such projects will not entail speculating on land. “I mean if you had to sell 15,000 houses, you cannot speculate on the price of land,” said Mr. Martelli. With respect to the financial sector, one “cannot look at affordable housing with the same concept as mortgage,” he said. “I try to help build institutions that can finance or build, say five million homes. We are trying to show the market what has been done in other countries. We are talking with private players here. Low income housing has a multiplier effect – as low as four times and as high as seven-eight times. It can have tremendous impact on the growth of the country,” said Mr. Martelli.
In India, IFC continues to go by its mandate: its three-pillar strategy of inclusive growth, climate change and regional integration, said Mr Martelli. With respect to micro-finance, Mr Martelli pointed out that 75 per cent of the industry in India is still in the four southern states. IFC is increasingly trying to focus on the low income States, said Mr Martelli. A special point of interest for IFC is the non-banking financial sector.
“We have basically tried to support the transformation of NGOs into development institutions and to help them scale their operations, and to operate in these other low income parts of India.” In India, climate change, trade finance, creation of wind, solar and other types of renewable energy, micro finance, micro-insurance, development of infrastructure such as power, cold chains and the likes have been IFC’s areas of interest.
For both FY-09 and FY-10 (fiscal year ending June 30), IFC’s highest exposure has been in India. Out of the $3.5 billion that IFC has committed in India, $2.5-2.6 billion have been disbursed. IFC will continue to invest roughly $1 billion in India every year for the next two or three years, said Mr Martelli.
Multiplex chains are expected to add over 200 screens before March 2011 as some of the mall projects that were delayed due to the downturn in the real estate sector are being completed now. Many of such projects were pending due to lack of demand for space from retailers as well as funds with property builders to complete construction due to the economic slowdown. Although some see it as an early sign of a recovery for the retail segment of real estate, others believe multiplex owners will face fresh hurdles to expansion in the next two years as developers are still cautious in initiating new mall projects as retailers are not expanding so furiously.
Rajeev Talwar, executive director at DLF said: “It will take another successful festive season and monsoon to assure developers to expand their retail business further, which is expected to happen in the next fiscal.” Although this has not stopped top multiplex players including Big Cinemas, PVR and Inox Leisure from chalking out big expansion plans, Milan Saini managing director of Mexican firm Cinepolis, one of the recent entrants to the business said the future looks tough. “Going by the cautious approach of developers to take on new mall projects we are not sure if our targets of adding screens would be met at the pace we would like it to be,” he said.
The largest multiplex operator Big Cinemas plans to add 60 screens in India this year to its existing 263 screens . Tushar Dhingra, COO at Big Cinemas said, “The multiplex industry could face a mismatch between supply and demand in the next 24 months due to paucity of fresh mall development.” Recovery in the retail segment of real estate is dependent on two factors: availability of space at competitive rates and improvement in consumer sentiment. With improving job opportunities, consumer spending has already perked up with sales of cars and other big ticket items like LCD televisions growing at high double-digit rates.
Fresh supply of space in malls went up by as much as 54% to 4.17 million square feet in the first half of this year largely due to real estate firms chalking out expansion plans to complete their pending projects, as per estimates of real estate consultancy Cushman & Wakefield. The company’s managing director Anurag Mathur said, “Retail real estate has picked up but it has not reached the same frenzy of the boom period of 2006-07.”
After the economic slowdown led to sharp correction of asset prices, realty firms had shifted focus to affordable housing category over the last two years. Although sales in residential segment have recovered, demand for commercial and retail real estate is yet to perk up significantly as companies are cautious on expanding.
The 36 acres of prime land that Godrej Industries owns in Mumbai are finally being developed and the master plan is almost ready. The first phase of the plan will be 6.5 lakh square feet of commercial space, of which half will house the group companies like Godrej Consumer Products Ltd (GCPL) and Godrej Properties and the other half will be leased out with expected revenues of over Rs. 350 crore annually.
The first part of the project will start in February or March of next year and will be completed within 30 months. The total amount to be developed over 36 acres is 3 million square feet over 3-4 years which will be a mix of residential, commercial, retail and hospitality development. Analysts have been waiting for the value unlocking of the Vikhroli land – a project being spearheaded by Adi Godrej’s son Pirojsha.
“I think value unlocking for Vikhroli is very important because it will be a cash cow for the company. I believe there will be a lot of demand for their product that they build on that land,” said Bharat Sheth, president-institutional sales at Techno Shares and Stock Broking. Godrej Properties has outperformed the real estate sector after its listing in January and so far the joint venture model seems to be working for the group.
State-owned Punjab National Bank today announced a festival bonanza offering home loan at 8.5 per cent, a teaser rate to attract new customers.
India?s home loan market is expected to see increased competition over the next few months thanks to a constant trickle of NBFCs looking to get a toe-hold into the market.
The revised rate will rate will be effective from August 18, 2010, ICICI Bank said in a statement.
Home, auto and education loans from a host of banks have become costlier for existing borrowers by up to 75 bps, after lenders hiked interest rates.
The Reserve Bank asked banks to put in place a suitable mechanism to provide the benefit of the 1% interest subsidy granted by the government on home loans to buy a house of up to Rs 20 lakh.
Some people are just born with the tact whereas some have to work on their skills to get the right buy at the right price.
heck out EMI Schedule of Floating Rate Home Loans.
Check out EMI Schedule of Fixed Rate Home Loans.
Borrowers with home loans linked to the prime lending rate may soon receive an attractive offer from banks to get them to agree to the base rate as the new benchmark.
All banks announced their respective fixed rates from July 1, 2010, which will act as their benchmark rates for future loans. Home buying: How to raise margin money
The state-run IDBI Bank on Thursday said it will merge its Pune-based wholly-owned home-loan subsidiary IDBI Homefinance with itself to consolidate its home loan business and gain more market share.
Indiabulls Financial Services on Friday launched a 8.25 per cent teaser rate home loan, a week after rivals HDFC and SBI extended their special schemes.
State Bank of Hyderabad on Wednesday announced the extension of special interest rates for home and car loans.
The new home loan product offers borrowers a fixed rate of 8.25% till March 2011 and 9.25% for the next 12 months. Will 'base rates' give a fillip to home loans?
State Bank of India, the country's largest lender, said on Wednesday it is leaving the terms of its special home and car loan schemes unchanged till Sept 30, even after a move to the base rate system from July 1.
Mumbai, India, April 02, 2008 - Era Infra Engineering Ltd has announced that the Company has secured an order valued at approximately Rs 4 crore from Jeet builders Pvt Ltd for supply of Ready Mix Concrete (RMC) for the construction of multi storied residential complex at Greater Noida.
New Delhi, India, March 31, 2008 - GMR Infrastructure Ltd has informed BSE that Delhi International Airport Pvt Ltd (DIAL), subsidiary of the Company has selected Indraprastha Apollo Hospital to provide medical facilities in line with its commitment to providing superior medical facilities to air passengers and employees at Indira Gandhi International (I.G.I) Airport.
Gurgaon, India, March 25, 2008 - BT today announced the opening of its Global Operations Centre at Gurgaon, India, in presence of Sir Mike Rake, Chairman, BT Group and Ben Verwaayen, CEO - BT Group among other BT executives.
New Delhi, India, March 12, 2008 - Ansal API in its endeavour to provide the best real estate solutions and redefining lifestyle standards in Kurukshetra has introduced one of its kind, truly luxurious and epic township- “Sushant City- Kurukshetra”. Located strategically on the NH-1, the township is spread over an area of 200 acres with, malls, local shopping centres, schools, hospitals, jogging tracks, parks, club, community centre etc.
New Delhi, India, February 28, 2008 - Parsvnath Developers Ltd on February 28, 2008 has announced the start of construction of 'Parsvnath Preston' a high-end group housing residential project, in Sonepat, Haryana. The expected realization from the project is over Rs 500 crore in next 3 years including this financial year. The project is spread over a saleable area of 2.2 million sq. ft.
New Delhi, India, February 21, 2008 - Parsvnath Developers Ltd on February 21, 2008 has announced the beginning of construction of its prestigious Mall at Rohini christened as "Parsvnath Mall". Parsvnath will invest approx. Rs 280 crores in the project. The Company performed the earth-breaking ceremony today.
New Delhi, India, February 07, 2008 - Indiabulls Real Estate Ltd has announced that Indiabulls Infrastructure Ltd ("IIL"), a subsidiary of the Company, has acquired 100% shareholding of Catherine Builders and Developers Pvt Ltd ("Catherine") from DLF Home Developers Ltd.
New Delhi, India, February 02, 2008 - GMR Infrastructure Ltd has announced that Delhi International Airport Pvt Ltd (DIAL), a subsidiary of the Company, has acquired state of the art runway de-rubberizing equipment, called the TrackJet. This ultra modern equipment utilises a revolutionary hi-pressure water jet technology to clean up rubber deposits on the runway's surface.
Gurgaon, India, January 25,, 2008 - Parsvnath Developers Ltd has announced that in a commendable development, the Company has obtained the completion and occupancy certificate from Director, Town and Country Planning, Haryana for 228 units of Parsvnath Greenville, the residential project located on Main Gurgaon Sohna Road. The units for which the completion certificate has been received are categorized as 2BR and 3BR apartments in low-rise building.
New Delhi, Indian, January 22, 2008 - Vishal Retail Ltd has announced that the Company has opened two new Showrooms in New Delhi and in Gurdaspur, Punjab.
New Delhi, India, January 21, 2008 - SVP Builders India Ltd., a 2000-crore real-estate development company based out of Ghaziabad, National Capital Region, has announced that they are planning to invest Rs. 500 crores within the next 2 years to provide over 3100 flats across commercial and residential and also foray into healthcare industry by means of a multi-specialty 300-bed hospital in Faridabad.
New Delhi, India, January 21, 2008 - Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) has announced the opening of its first Westin property in India, The Westin Sohna Resort. Close to both Delhi and Gurgaon, the new resort offers a restful, rejuvenating guest experience enhanced by superior recreational facilities, naturally-lit meeting space, an array of world-class cuisine and the full range of Westin's renowned signature amenities.
New Delhi, India, January 21, 2008 - Trikona Trinity Capital PLC (AIM: TRC), a fund created for investing in real estate and real estate related entities across India, has announced that the Board of Approval in India conferred IT Special Economic Zone ("SEZ") status upon the Company's Uppal IT Park "Tech Oasis" (Development Project 1) on 16th January 2008.
