Real Estate India

Domina Hotel Group Expands In India With 25 New Hotels: Overall Value 600.000.000 US$

2007-10-24T05:12:00.000-05:00

Domina Hotel Group expands in India with the realization and management of 25 new hotels. The project will be run by an equal joint venture with Shristi Holding, quoted in the Indian National Stock Exchange and part of Kanoria Group with offices in India, Germany and Russia. Shristi is one of the primary Indian Real Estate firms. Within 2012, the overall value of the hotel complex will amount approximately to 600.000.000 US$. The operation foresees the establishment of a joint venture divided in equal parts amongst the two groups that will control the management of the assets, whilst the real estate development will be realised by Shristi Corporation. The project is based on the creation of 4 star, medium-large scale, 100-200 rooms hotels and resorts, located in the main cities or holiday resorts in India (including destinations such as New Delhi, Mumbay, Calcutta, Puri, Hyderabad, Bangalore and Udaipur). The plan will be realized in the next 5 years and others structures will be added subsequently. The hotels will be constructed following eco-sustainable parameters (vanguard standard constructions in the observance of holistic precepts and Indian tradition), will be equipped with all comforts, hi-technology, body treatments and wellness services. The first hotels are already under construction and will be marketed with the new brand Vedic Domina Hotels & Resorts. "We are proud to announce the new expansion of our Group in the Indian market" says Ernesto Preatoni, Domina Hotel Group's Chairman. "We are the first Italian operator of the hotel sector to enter the Indian market proving one more time our pioneer component that has already made us invest in Egypt twenty years ago, in the Baltic Region in the '90s and recently in Russia. Throughout our development plans we have always been taking with us our portfolio of worldwide experiences, Italian style and all the fundamental elements to realize projects of success." says François Droulers, Domina Hotel Group's Vice President Director of Development and Acquistions. Domina Hotel Group has recently presented a capital increase of 10.000.000 EUR approximately and has registered a total turnover of 46.000.000 EUR for the 2006 financial year and anticipates that the 2007 financial year will be closed with revenues for 60.000.000 EUR. Source://sys-con.com

Pai Solebille moves into Indian real estate market

2007-10-19T00:37:00.000-05:00

Pai Solebille, driven by a bouyant Asian economic growth surge, is to move into real estate India and property consulting. Cambridge, 16th October 2007 - Pai Solebille was founded in 2006 at Cambridge (United Kingdom) and wishes to take a leading position in the IT contracting/outsourcing and the real estate market. With an active growth in the Asian economies including China and India, of over 9% per annum, Pai Solebille has always been actively seeking to move its interests into these economies. Real estate is one area that is seeing a huge growth in these economies, with returns averaging over 25% per annum. Places in India like Bangalore and Pune, which form the Information Technology hubs, have seen higher than average growth, due to the booming services industry. Infrastructure is one area that closely mirrors economic growth. Pai Solebille is actively engaging the major property developers in India, ensuring that investing in the real estate market remains stress free for our customers. The key areas of growth established are around Bangalore and Pune, in the south of India. Pai Solebille will be setting up offices at these two locations by the end of November 2007. Source://openpr.com

India's DLF To Raise $1.5B In Debt Abroad

2007-10-12T01:23:00.000-05:00

India’s largest land developer by market value, said Thursday it is borrowing up to $1.5 billion overseas to fund expansion. In a statement to the Bombay Stock Exchange, DLF said its board had approved raising loans through a wholly-owned subsidiary abroad. It will spend $750 million to further business in India and $750 million to buy shares in an initial public offering of DLF Offices Trust in Singapore. New Delhi-based DLF raised $2.27 billion in June in the country’s largest IPO. Its stock has risen approximately 75% since then, amid soaring investor interest in the real estate sector, which is growing at 30% annually. On Thursday, DLF shares rose 2.7% to 918.75 rupees ($23.50) on the Bombay Stock Exchange. Earlier this month, the company said it is collaborating with Dubai-based land developer Limitless Holdings to build a $15 billion township on the outskirts of Bangalore (See: “ DLF Surges On Township Deal With Dubai”). The township will be the company’s largest, spread over 9,000 acres. DLF, controlled by billionaire Kushal Pal Singh, has around 615 million square feet of land under development, about half of it in Delhi and Mumbai. With the economy humming, a fivefold increase in office space is expected over next five years, plus about 20 million new housing units and 50,000 new hotel rooms. The government now permits 100% foreign direct investment in large residential townships, and the last few months have seen significant interest from foreign investors. In the last 18 months, they have pumped about $4.5 billion into the sector, according to industry estimates. Earlier this week, New York-based Trikona Capital, an India-specific real estate fund, said it plans to invest about $10 billion over 10 years in India. It plans to raise money by listing either on the Indian markets or an international exchange. In 2006, Trikona raised around $500 million by listing its fund Trinity Capital on the London Stock Exchange’s Alternative Investment Market. Source://forbes.com

Real estate market to grow at 33 percent

2007-09-28T01:53:00.000-05:00

The real estate market in India is expected to grow at 33 percent between 2005-2010, and increase its worth from $12 billion to $50 billion.

Total housing spend is expected to grow at a CAGR of 18.60 percent from Rs 171,800 crore in 2005 to Rs 403,400 crore in 2010.

A seminar on "South India - the changing impact of the real estate boom," organised by the Indo-American Chamber of Commerce on Thursday portrayed a tremendous increase in real estate prices in southern cities like Bangalore, Hyderabad and Chennai.

This IT golden triangle makes them the most favourable location for IT/ITeS occupiers, with a capital flow into commercial real estate over the next three years estimated at more than Rs 23,200 crore. C Appaiah, senior executive at DTZ India, said that Bangalore had the highest absorption of land at 11.5 million square feet, and Hyderabad was a strong contender with Bangalore.

"Mysore is going to be a twin city to Bangalore like Mumbai and Pune and will help decongest Bangalore. Coimbatore will be similar to Mysore," he said. Southern states continue to lead in economic performance due to the IT industry.

He said that tier II cities were becoming popular for companies that were looking to expand but these places suffered from lack of infrastructure and smaller talent pool.

Mayank Saksena, assistant vice president of retail services at Jones Long Lasalle Meghraj, speaking on the changing impact of real estate boom on retail and hospitality sector, said that there was a huge opportunity for real estate retail because close to 95 percent of space was below 5,000 square feet. Delhi has 41 percent of the share in real estate retail, Mumbai 20 percent while Bangalore and other southern cities lag behind at below five percent.

Saksena said that the boom was putting pressure on retailers to reduce their store formats. “It will push budget hotels, hypermarkets and supermarkets to suburban locations and retailers will have to play a dual role of developers and retailers,'' he added. Source://newindpress.com

Brigade Enterprises files DRHP with SEBI

2007-09-17T03:32:00.000-05:00

Brigade Enterprises, a real estate Bangalore-based company focusing on the development of residential, commercial and hospitality properties, has filed its draft red herring prospectus (DRHP) with the Securities & Exchange Board of India to enter the capital market with its initial public offering (IPO) of its equity shares. The company proposes to issue 16,624,720 equity shares of Rs 10 each for cash, at a price to be decided through the 100% book building process. The issue comprises a net issue to the public of 16,524,720 equity shares and a reservation of up to 100,000 equity shares for eligible employees. There will also be a green shoe option of up to 2,493,708 equity shares. The equity shares offered through this issue are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India. At least 60% of the issue will be available for allocation to qualified institutional bidders on a proportionate basis, of which 5% shall be available to mutual funds only. Further, up to 10% of the issue shall be available for allocation on a proportionate basis to non-institutional investors and up to 30% of the issue shall be available for allocation on a proportionate basis to retail individual investors. The issue will constitute 16.87% of the fully diluted post issue paid-up capital of the Company assuming that the Green Shoe Option is exercised in full and 15.00% assuming that the Green Shoe Option is not exercised. The primary objective of the issue is to fuel the future growth plans of the company, including by way of acquisition of land, meeting construction and development costs in relation to the company’s ongoing and forthcoming real estate projects and general corporate purposes. The global co-ordinators and book running lead managers to the issue are J P Morgan India Private Limited and Enam Securities Private Limited and the co-book running lead manager is ICICI Securities Limited. Source://moneycontrol.com

Indiareit Plans to Raise up to $750 Million for Property Fund

2007-09-11T01:33:00.000-05:00

Indiareit Fund Advisors, the venture capital firm that counts 3i Group Plc among its investors, plans to raise up to $750 million overseas for what may become India's second-largest real estate fund.

The Mumbai-based company may begin tapping investors in the U.S., Europe, Middle East and Japan by year-end, Managing Director Ramesh Jogani said in an interview in Mumbai yesterday. The fund will invest in companies building apartments, malls and offices in India.

India, the fastest-growing major economy after China, may receive as much as $10 billion in overseas funds betting on real estate in the coming 2 1/2 years, Indiareit estimates. Housing Development Finance Corp., Infrastructure Leasing & Finance Ltd., and Kotak Mahindra Bank are among institutions raising money to invest in unlisted developers and projects.

``Demand for space in India seems unending,'' said Raja Seetharaman, associate director at Jones Lang LaSalle Property Consultants in Mumbai. ``Investors are looking for a big opportunity in India as the economy is poised to grow a minimum 7.5 percent over the next few years.''

Real estate funds focused on India have attracted about $3 billion so far, according to Indiareit, on optimism economic growth that averaged 8.6 percent over the past four years will power demand for offices, shopping malls and residences.

India's real estate industry may swell to $90 billion by 2015 from $12 billion in 2005, Moody's Investors Service said in June.

``All the signs are there that the momentum will be maintained,'' Jogani said.

Residential Boom

Indiareit, which raised $200 million from individuals and companies overseas last year and 4.3 billion rupees ($106 million) domestically, plans investments in projects in Mumbai, Bangalore, Hyderabad, Chennai and Pune. ABN Amro Holding NV and ICICI Bank Ltd. helped it raise the money.

London-based 3i Group, Europe's biggest publicly traded private equity firm, invested $40 million in the $200 million fund Indiareit closed in September last year.

Indiareit has earmarked about two-thirds of the amount raised for its real estate funds to residential projects, seeking to profit from rising demand for homes as salaries rise, Jogani said. India faces a shortage of 25 million houses, according to HDFC.

Housing Development Finance, India's second-biggest home mortgage lender, last month raised $800 million from overseas investors for a nine-year real estate fund, exceeding the $630 million drawn by SUN Apollo Real Estate Fund in January.

Kotak Real Estate Fund is raising $350 million from overseas investors in addition to the $500 million it raised locally to invest in houses, offices, hotels and warehouses, Vikas Chimakoorti, a partner at the fund, said last week.

IL&FS Investment Managers Ltd. and U.S-based Milestone Capital Advisors Pvt. plan to raise 10 billion rupees to invest in hotels, hospitals, warehouses, offices and houses.

Source://bloomberg.com

Plaza Centers to Invest 50 Billion Rupees in India

2007-09-03T03:26:00.000-05:00

Plaza Centers NV, the developer of malls controlled by Israel's Elbit Medical Imaging Ltd., plans to invest 50 billion rupees ($1.2 billion) in India to build entertainment and commercial centers.

Plaza will develop 50 properties in five to seven years, the Amsterdam-registered company said in a statement in Mumbai today. The company will construct the malls in cities such as Bangalore and Pune.

Plaza is investing in real estate India market as economic growth puts more money in the hands of Indians, fuelling demand for shopping malls and entertainment centers. The country's real-estate development market is forecast to increase to $90 billion by 2015 from $12 billion in 2005, Moody's Investors Service said in June, citing market estimates.

Earlier this year, Plaza acquired 50 percent of a development in the Kharadi district of Pune, Maharashtra, for an unspecified amount. The 14-acre site will be developed into a mall, offices and apartments, costing $175 million to build. Plaza also bought a 50 percent stake in a six-acre site in Koregaon Park, Pune, which is being developed at a cost of about $90 million.

Resource://bloomberg.com

Realty firms urge Dubai NRIs to invest in Chennai

2007-08-28T22:42:00.000-05:00

The recent emergence of Chennai as an Indian manufacturing hub for IT and automobile multinationals has fuelled a 50 per cent increase in the city's average property prices, say organisers of a property exhibition targeting Dubai NRIs.

Real estate companies participating in the HDFC India Homes Fair in Dubai say Chennai's economy has driven a major improvement in the quality and value of the city's property developments.

With Dubai NRIs originating from Chennai second only in numbers to Keralites, companies are targeting Dubai as a strong source of demand for their new projects, especially apartment complexes.

"Chennai is one of the fastest growing cities in India and the property market has done very well recently," said Vikram Goel, Dubai-based branch manager of Housing Development Finance Corporation (HDFC).

"Today the average cost of a property is about 4.5 million rupees, which is a 50 per cent jump since last October."

Goel said the price hike should not deter Dubai NRIs from investing in the property market. He claimed that prices are still competitive compared to other cities, but admitted that infrastructure improvements are struggling to keep pace with the rate of real estate construction.

"People are very comfortable investing in their own state and even today, the concept of real estate is not investment, but actual usage for their own need.

First-time buyers

"Most of the people at the exhibition are first-time buyers who will make purchases for their parents or for back-up when they return to India."

Industry estimates value the total expected investment into Indian real estate at $20billion over the next three years. However in some cities such as Delhi and Mumbai, property prices have cooled off in the last six months.

A.M. Haree, head of marketing at Chennai-based VGN Enterprises, said Chennai's real estate market is experiencing a slight slowdown due to a hike in interest rates, but expects the market to rebound before the end of the year and maintain more stable growth levels in the future.

"Dubai is a good market for us. We have many clients here and overall it represents around two per cent of our total sales," he said.

Goel said the last HDFC India Homes Fair to focus on Chennai attracted a footfall of 2,500, which resulted in around 200 sales during the event at an average of 3 million rupees per sale. Most sales were confirmed at a later date, he added.

This year's three-day exhibition started yesterday in the Hotel Renaissance in Deira and was inaugurated by Consul General of India, Venu Rajamony.

Source://gulfnews.com

Indian property builders targeting NRIs

2007-08-24T03:40:00.000-05:00

Imagine this, you are thousands of miles away from India. But with just a click of the button on your computer, you can own a property in a posh neighborhood in an Indian city at a reasonable price without ever stepping foot on the property. Well, you don’t have to imagine it anymore, thanks to KRC Horizon Real Estate.

The company specializes not only in providing residential real estate for Indians living outside of India, but also, in building a platform for international investors and property developers to come together. Just this past weekend, KR Capital Management, LLC (USA) and the company owned subsidiary KR RealTech Consultants PVT LTD (India), along with its Media Partner India Post, held its 2nd Horizon Real Estate Expo of the year in Los Angeles.

"The turn-out during our April Expo was pretty good; that encouraged us to have another expo in California," mentioned Honey Manchanda the Event Organizer, and wife of Pankaj Manchanda, the CEO of KR Capital Management, LLC. Together the husband and wife team brought builders and loan-providing banks to the Indian-Americans to allow them to gain more information about investment opportunities in India.

"It is a buyer’s market in India right now," stated Pankaj Manchanda, "the interest rates are so high that the local population refuses to buy, forcing the property owners to sell at a price demanded by the buyer." Although many predict that the Indian Real Estate market is going through a bubble waiting to burst, bringing the prices to rock-bottom, Manchanda believes it would be quite the contrary. "In a few months, banks will be lowering their interest rates.

The second the interest rate goes down by even a point, real estate will be selling by the seller’s price." Some of the most prominent property builders of India such as Hiranandani and Parsvnath were at hand, explaining the ins-and-outs of the property. Although, most of the builders were offering properties especially for the Non-Resident Indians (NRIs), most of the projects they had at hand were nearly sold out. ICICI bank’s Uma Shankar was also at the Expo describing the entire process of how easy it is for an NRI to own a property in India.

"In the past, owning a home in India was quite difficult, plus, it was a lengthy process. But now, an NRI with an income of US $30,000 or more can own a home with a simple application form," explained Shankar. KR Capital Management LLC is committed to providing a safe and comfortable environment for the buyers, "our goal is to bring the buyers directly to the developers and builders, eliminating the 3rd party in between which could be a cause for hesitation for many buyers," said Manchanda.

The next event KR Capital Management LLC holds will be an exclusive event. The parties who expressed serious interest in purchasing properties in India will be invited to have an in-depth conversation with the builders and developers. For more information about the Expo, you may visit the website at www.horizonexpo.net

Resource://http://indiapost.com

India- A New Land of Hope

2007-06-25T23:59:00.000-05:00

Driven by its booming economy and sheer volumes courtesy the world's largest middle class conglomeration, several leading Middle East real estate companies and property majors have made a beeline to India. Emaar Properties, Nakheel, Al Ghurair Group's ETA Star, Al Rostamani Enterprises' KM Properties, Dubai Properties have all unveiled major plans, investing in hotels, malls, healthcare, housing, IT parks and integrated townships in Mumbai, Delhi, Chennai, Bangalore, Hyderabad and other places. This week, Bahraini companies too joined the bandwagon with Khaleej Finance and Investment (KFI) partnering with Kuwait Investment Company (KIC) and Kuwait Finance House (KFH), also known as Baytak, to manage and promote a $200 million Indian private equity fund targeting a variety of activities in growing sectors, particularly India's real estate and industry. So much so, investments into India's vibrant property market from the Gulf region have crossed the $35-billion mark and the combined value of the various real estate projects being developed by them has been put at a staggering $37 billion. This accounts for about 10 per cent of India's projected infrastructure-spend of $350 billion over the next five years to give a fillip to its infrastructure. What more, the Gulf investment volume is poised to cross the $50 billion-mark by the yearend, say industry analysts. India began allowing cent per cent FDI under the 'automatic route' in the construction and development sector from February 2005, to spur investment in the vital infrastructure sector and pave the way for global real estate biggies into the country. It's real estate and construction sectors attracted foreign direct investments (FDI) to the tune of $3 billion in 2005-06, out of a total FDI of $19 billion. Analysts say the yield on real estate investments in India is between 15 per cent and 18 per cent making it a beehive for Middle East real estate majors, a fact that is reflected in Nakheel and Emaar MGF committing $22 billion between them towards property developments across India. Properties giant Emaar recently came out with projects worth around AED140 billion ($38.1 billion) for the coming four years, with AED115 billion spent outside Dubai, including a sizeable chunk in India. Emaar, the largest property developer in West Asia, floated a joint venture in India with Delhi-based MGF Developments - Emaar MGF Land Private Ltd - to develop SEZs, residential projects, hotels and malls and hospitals with an investment of $12 billion. Earlier this year, leading real estate developer DLF tied up with another property major Nakheel to develop two townships in the country at a cost of $10 billion. Similarly, Dubai-based developer ETA Star Properties announced its plans to develop a $923 million IT park at Chennai, taking the group's total investment value in India to $4.35 billion so far.Also on the anvil is the Gulf Finance House-promoted $395 million Energy City India on the lines of Energy City Qatar coming up on a 600-acre site in Navi Mumbai. ETA Star is developing a one million-square foot tech park in Chennai's IT corridor and a mall.The company also launched a 10-tower residential project in Bangalore besides a join venture vehicle with a Mumbai company to develop service apartments, residential buildings and a mall in upmarket Juhu area. The company is also foraying into Kolkata and Hyderabad.

Branded Realtors Debut in India

2007-06-18T05:32:00.000-05:00

The next time you go to your neighbourhood property dealer, don’t be surprised if he answers to LJ Hooker or Century 21 or Remax, instead of the usual Chawla Properties or Dubey land agency. For, after global realty consultancies, it’s the turn of brand realtors to make a beeline for India.

While Australia-based LJ Hooker has already set up its shop in the country by opening an office in Bangalore, Ray White (also from Australia) and US-based Century 21 and Remax too are toying with the idea of entering the growing Indian real estate market. Working on a franchisee model, these realtors cater mostly to individual needs and are not looking at a corporate client base.

With the international exposure comes transparency and ethics,” says Ramneek Bakshi, principal, LJ Hooker. The firm is planning to open one main office in every major city in India along with a large number of franchisees. Bangalore will see 4-5 franchisees opening up by the year-end.

As far as the functioning goes, unlike local brokers, branded realtors take fees only from one party (either the seller or the buyer) and the parent organisation takes commission from the franchisee (around 10%). Another area that these realtors specialise in is managing properties for absentee landlords.

• LJ Hooker has set up its shop in Bangalore. Ray White, Century 21 and Remax too want to enter
• These realtors cater mostly for individual needs and aren’t looking at a corporate client base

Source://FinancialExpress

Golf City in Lucknow By Ansal Properties and Fortis Medicity

2007-06-13T23:19:00.000-05:00

Ansal Properties and Infrastructure Ltd and Fortis Healthcare would soon sign an agreement for setting up Fortis Medicity in the real estate major's Sushant Golf City in Lucknow.

The Fortis Medicity in Lucknow would have multi-speciality hospital and medical colleges, sources said. This is in addition to the Ranbaxy-promoted company's plans for a medicity in Gurgaon, where they are believed to have already been sanctioned land from the Haryana Government.

Ansal API is the first real estate company to get the licence for development of a Hi-Tech City in Lucknow. Strategically located on the expressway connecting Lucknow Airport to Gomti Nagar, the proposed Ansal API Sushant Golf City is spread across 2,000 acres and would offer exclusive golf villas providing residential options.

Landscape expert Dr Martin Hawtree from the UK would design the 18-hole international championship standard golf course spread over 400 acres.

Besides the golf course, it would also include a tennis academy run by Wimbledon doubles champion Mahesh Bhupathi. The integrated Sushant Golf City would include residences, five-star luxury hotel, academic institutions, hospital and commercial complexes. The proposed township would also house `Ansal Plaza' multiplexes and malls.

Source://Moneycontrol

Israeli firm to invest USD 180 mn in Indian Real Estate

2007-06-11T00:59:00.000-05:00

Israel's Elbit Medical Imaging Ltd has signed a memorandum of understanding with an Indian real estate developer to build luxury apartments and commercial centres in Bangalore.

The two companies will acquire the rights to develop approximately 190 acres of land situated in a luxury neighbourhood of Bangalore, a local business daily reported. The unnamed Indian partner will transfer part of the development rights of 100 acre plot to the joint venture.

The Nasdaq listed company will invest USD 180 million for purchase of land for the venture and make an advance payment of USD 50 million for the land, a deposit that will be returned if the terms of the agreement are not met.

Elbit will offer 50 % of its shares in the venture to its subsidiary, Plaza Centres, with this, company's revenue is expected to exceed USD 3 billion, the daily said. The companies will build villas and luxury apartments, a hotel and 300-400 room apartment hotel, a shopping center, golf course, and various amenities including country club, swimming pool, sports facilities, and recreation areas in two million sqm of space, it said. The project will start within 12 months and will be executed in stages over a period of three to five years, the report said.

Source://Zeenews

Starwood To Invest Rs 750 cr. in Real Estate India

2007-06-05T23:39:00.000-05:00

Global hotel and leisure company Starwood Hotels and Resorts Worldwide Inc., on Wednesday announced setting up their chain of Westin Hotels and Resorts in India at an investment of Rs 750 crore. Starwood Hotels and Resorts Worldwide Inc, owners of St. Regis, Sheraton, Westin and Le Meridien brands, have tied up with Vatika Hospitality Pvt. Ltd., a subsidary company of Vatika Group. As part of the agreement, they will introduce their chain of Westin Hotels and Resorts in India with the launch of The Westin Bangalore and The Westin Sohna Resort. “It is a matter of pride for us to introduce the Westin brand to India. We will be developing three Westin properties in India with a collective outlay of Rs 750 crore. We will be introducing the first Westin brand in India with the Westin Resort in Sohna, scheduled to be launched in December 2006, followed by the Westin Gurgaon in 2007,” Vatika Group, Executive-Director, Gaurav Bhalla, said.

New Project in Navi Mumbai By Mariners Welfare Society

2007-05-30T23:59:00.000-05:00

Mariners Welfare Society is launching its new project after the successful completion of it’s first project ‘Mariners Home’, Gurgaon and now developing the 2nd project ‘Mariners Paradise’ in the Nehar Par area of Faridabad offering the best luxurious dwellings at the most reasonable prices, Mariners Welfare Society is planning to come up with a new project in Navi Mumbai to be started in the months of Oct- Nov which is at a very nascent stage at present. Real Estate interest is rising rapidly in Navi Mumbai being considered as the modern parallel city of Mumbai that has an efficient transport system covering all modes of transport. Khargar, one of the biggest nodes of Navi Mumbai is one of the most planned and best locations in the city that boasts of a number of ready and under-construction projects covering both the residential and commercial segments. It is situated very close to the proposed SEZ and the upcoming International airport where the six lane Mumbai-Pune Expressway also starts. Navi Mumbai International Airport offering world- class facilities is coming up at Panvel, which is going to be one of the ideal locations for the development of hotels, malls, multiplexes and other aviation related facilities as it also has the most important external railway stations of the region. These places are sure to attract the interests of the large developers for more investments on their part. Source://Indiaprwire

Incentives to developers will improve quality

2007-05-29T00:43:00.000-05:00

Incentives to developers will improve quality of development and real estate market in India. The steps taken here would professionalise the market and impact the demand side of the market. 1. Property Act: All mature markets have it and we need one as well. The objectives of this act should be :- (a)ensuring end users rights are protected (b) improving the level of professionalism in industry improves (c) increase transparency and ease of availability of market information. 2. Development of institution and individual link for investment: This step would do away with strata titles, reduce ownership issues and check inflow of unaccounted wealth in real estate. Each of these would improve quality of buildings, ease transfer of property and increase transparency levels. Introduction of Real Estate Investment Trusts (REIT) and/ or Real Estate Mutual Funds (REMF) would be the first step in this direction. 3. Incentives to developers to improve quality: The shell structure of almost all of India’s high rises is RCC and not steel. This is because steel’s costs is prohibitive and we don’t have enough trained human resources for this task! Another fact is: most buildings in India will not be able to stand the test of time. These constructions try to replicate the international look but the quality of construction, level of maintenance and finishing levels of the completed product don’t increase the life of the NCR office space absorption building. Capital incentives should be given various manufactures of building material to improve their products and to the developers to use better quality material. 4. Exit routes for global developers: Although FDI in real estate has been allowed, clarity is needed on various means by which international investors can take their capital out of these projects. The REITs and REMFs would boost confidence of retail and institutional investors. For India, we can learn a lot from experiences in western and Asian markets to determine which model would be best suited here. 5. Steps to maintain cost advantage: Over the past years the price of real estate had matched those in many western countries. However, due to the demand and supply equations India still has some micro-markets which provide building options at competitive rates. Forward planning is vital for MNCs and Indian firms expanding their footprint in India. Long-term planning is needed by the government to ensure that macro economic parameters allow Indians to maintain the cost gap compared to developed markets and BRIC nations. Source://Financial Express

Real Estate India Boom Attracts Investors

2007-05-25T00:41:00.000-05:00

A boom in the Indian real estate market has diverted the attention of investors these days. Because of high returns on investments they prefer investing in property rather than in other sectors. INDIA HAS certainly firmed up in the world business space forcing global business to sit back and take a fresh look. In spite of nature’s fury or other global shocks, the Indian economy grew well in last two years. India is fast establishing itself as an alternative to China. The most spectacular resurgence has been that of the real estate sector, which is back in business with a bang. New projects, superior quality products, new growth corridors, increased infrastructure spending, falling cost of interests on the loans are some of the key reasons behind the real estate boom. With stock market being highly volatile, investment in real estate has started looking more competitive with typical yields of 10-12 per cent per annum. Of course return is always linked to property specific factors, dynamics of real estate market and the overall economic performance. Real estate is fast turning out to be a compulsive investment bet as compared to other investment vehicles such as capital and debt markets, bullion etc. It attracts investors with a possibility of stable income yields, moderate capital appreciation, tax structuring benefits and higher security. Besides these prime factors there are several other micro factors responsible for good returns on the investments and these are location of the property in macro and micro context, the usage of property, the quality of tenant, the capital value and achievable rental, the prevailing structures of property tax and stamp duty etc. The government has opened up the real estate sector for limited foreign participation. It has allowed 100 per cent FDI for development of townships, including housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems and manufacture of building materials. The 2004-05 budget had provided a major thrust to the infrastructure and tourism projects. Over 13,000 kms of highways are being developed. Rs 100 crore is sanctioned for facelift of airports at New Delhi and Mumbai. Townships are being developed for the rapidly growing affluent urban middle class. City level infrastructure such as roads, bridges, IT parks, sanitation and water supply etc are in the process of up gradation. Overview of the market The property market in India was always seen as an unorganised market with fragmented growth. However, the past three years have seen a big shift in the fundamentals that drive the growth. This has attracted private equity players and other real estate funds from abroad. In addition, existing and new players in the development business are eyeing viable and profitable projects. The market continues to grow in all major markets of the country. In past few years cities like Mumbai, Delhi, Bangalore, Chennai and Hyderabad, attracted number of IT and ITeS companies, who are either setting up their bases or looking for expansion. The suburban localities in these cities are experiencing massive activity due to the easy availability of land for constructing big floors and building the infrastructure as per the requirement. With number of IT/ITeS companies are coming up in these suburban areas, a rise in the demand for rental space has also been noticed here. Hence it provides a good opportunity to investors to invest in the property for high returns. Investor’s profile The two most active investor segments are high net worth individuals (HNI’s) and financial institutions. Both these segments are particularly active in commercial real estate. While the financial institutions like HDFC and ICICI show a preference to commercial investment, the high net worth individuals show interest in investing in residential as well as commercial properties. Apart of these two categories, there is a third category of Non-Resident Indians (NRIs). They mostly invest in residential properties than commercial properties. The reasons could be their emotional attachment with the native land and the future security sought by the NRIs. As the necessary formalities and documentation for purchasing immovable properties other than agricultural and plantation properties are quite simple and the rental income is freely repatriable outside India, NRIs are showing more interest in investing in Indian real estate market.

Finmin drafts tougher foreign-loan norms

2007-05-21T23:48:00.000-05:00

India banned real-estate companies and others from raising funds overseas in its latest measure to curb capital inflows to fight inflation and halt the appreciation of the rupee, which is at a nine-year high. Real-estate borrowers will not be allowed to raise medium-term debt through external commercial borrowing (ECB), said a finance ministry statement. The peak interest rate on ECBs and other longer-term foreign debt has also been pruned, the statement added. “My first take is that the move is meant to channel money into sectors the Reserve Bank of India (RBI) considers eligible, and at the same time cut the flow to real estate sector,” said U. Venkataraman, head, treasury, IDBI Bank. The finance ministry announced that the maximum interest rate on overseas borrowings of a duration between three and five years will now be 150 basis points over the six-month London Interbank Offered Rate (Libor), down from the earlier level of 200 basis points. In the case of borrowings over five years’ duration, the peak interest rate will be 250 basis points over the six-month Libor, a reduction from the earlier level of 350 basis points. The current six-month Libor rate is 5.37%. “By reducing spreads over Libor, the ECB flows have been effectively moderated as smaller companies will not be in a position to raise money abroad,” said Venkataraman. “A more restrictive environment for overseas borrowing will probably reduce the magnitude of capital flows,” said Rajeev Malik, senior economist at JP Morgan Chase Bank in Singapore. “Lower inflation will shift the government’s focus to exporters’ woes owing to currency appreciation.” ECB inflows in 2006-07 were $5.09 billion, up from the previous year’s $2.92 billion, according to RBI. The surge in ECB flows, along with that of foreign direct investment, added to the money supply in the country, resulting in a rise in inflation. Wholesale inflation rose to a two-year high of more than 6.5% earlier this year. It slowed to 5.44% in the first week of May, the government said on Friday, as an appreciating currency, higher interest rates and import tax cuts helped ease price of manufactured goods. In April, the government disallowed real-estate firms from raising money through the issue of non-convertible and optionally convertible preference shares for regular residential and commercial projects. The changes announced by the government on Friday will become effective after RBI drafts regulations in this regard under the Foreign Exchange Management Act, said the finance ministry. source://Livemint

Indian Real Estate Slows

2007-05-19T00:26:00.000-05:00

The hike in home loans rates in India is having a slowing down effect on the property boom. In the last few years the interest rates on home loans has increased by about 3 percent. Recently the premier ICICI bank hiked its interest rates for new customers by 50 basis points (0.5 percent). This meant that the current floating rate stands at 11 percent. One and half years back it was 7.5 percent. For fixed rate loans currently it stands at 13 percent while it was almost 11.50 percent earlier. Coupled with the huge increase in property prices the effect of this is a slowdown in the residential market. This is seriously affecting the middle class buyer and his dreams of owning a home. Shivkumar Mani, Head Marketing, Dewan Housing Finance Limited which is a reputable home finance company expresses his opinion. “Higher interest rates in home loans have certainly impacted India’s property scene as it means higher EMI and therefore lower disposable incomes after servicing the loan. Currently the home loan buying process has slowed down as people are contemplating and some may even decide to wait before purchasing a new house.” He further states that those who had saved to buy their dream home would now be forced to purchase a smaller home in a cheaper locality. Many people are considering prepaying their loans. This is after they do the math and realize that their funds parked in a bank account offer a higher rate of returns. Moreover a buyer now has not only reduced buying capacity but also has a reduced eligibility to apply for home loans. A number of bankers believe that thought the housing market in financial terms has gone up by over 30 percent; the actual physical expansion has only been 3 percent. The supply has just not kept up with the increasing demand which has been a result of the booming economy and the rising purchasing power of the consumer. This was of course until now. The hike in interest rates has already slowed down the market and time will reveal how far down it will go.

Yatra Capital to invest Rs 120 cr in Indian real estate

2007-05-16T23:29:00.000-05:00

Real estate investment company Yatra Capital Limited today announced its foray in India with plans to invest 21.6 million Euro (around Rs 120 crore) in a joint venture firm. The JV company set up with Kolte Patil Developers will develop three residential sites in Pune, a company statement said. "The JV opens our investment account in India and is in alignment with our strategy of partnering experienced developers to create shareholder value for Yatra," Yatra Capital Chairman Nigel Broomfield said. Yatra Capital is an Indian property fund based in Jersey and is listed on Euronext, Amsterdam. In December 2006, Yatra had raised 100 million Euro to be invested in the Indian real estate market. Saffron Capital Advisors Limited has sourced, evaluated and advised on the joint venture, the statement said.

TCG plans $500-m PE fund for realty play

2007-05-14T23:40:00.000-05:00

NEW DELHI: The Chatterjee Group (TCG) is looking to set up a $450-500 million private equity fund for investments in real estate. The group, headed by Purnendu Chatterjee, which has investments worth $2.5 billion in several sectors, including technology, BPO and infrastructure, also has a stake in the $1.2-billion Haldia Petrochemicals. This will be the company’s first dedicated PE fund for its India investments. “The fund has already seen a first closing of $100 million and we should touch $450 million to $500 million by June end,” said a company source. The proposed fund, which has a mandate to invest only in real estate projects in India, will make investments in the top nine cities in the country, including Bangalore, Pune, Hyderabad, besides the four metros. “The proposed fund will make investments in hotels and commercial property. We may also look at finding synergies with the real estate development arm of the parent group,” said India Property Fund CIO Aanandjit Sunderaj. The fund is a joint venture with New York-based realty firm Vornado Realty Trust which manages over $33 billion of assets and TCG Real estate, the real estate division of the investment arm. TCG Real estate is a commercial real estate development company. Sources in the investment banking fraternity say while the fund is evaluating several projects, it has already zeroed in on two project worth $75 million and $50 million in the National Capital Region. Chatterjee Group’s India initiatives include Haldia Petrochemicals, an integrated petrochemicals facility in West Bengal. Mr Chatterjee who holds a 59% stake in Haldia Petrochemicals, is fighting a legal battle against West Bengal Industrial Development Corporation which owns a 36.88% over the induction of IndianOil as an equity partner in the company. TCG also has stakes in CA TCG Software — a joint venture with Computer Associates, Skytech Solutions, an IT joint venture with United Airlines, Lab Vantage, a boutique IT solutions provider focused on pharmaceutical and research industry. Biotechnology investments in India include Chembiotek Research International, ClinInvent Research, a clinical trials company, and SilicoGene Informatics – a cheminformatics and bioinformatics company. Source://Economictimes

Indian Property Show to begin on May 17

2007-05-11T23:59:00.000-05:00

The Indian Property Show, which generated deals worth $25 million last year, will return to Dubai this month. To be held from May 17-19 in Dubai Airport Expo's East Hall, the event will be a platform for Dubai residents to interact face to face with Indian property developers, financial institutions and legal advisors. "This show is an ideal opportunity for non-resident Indians (NRIs) and Persons of Indian Origin to meet and interact with many of the major developers in the Indian property market," said Sunil Jaiswal, CEO of organisers Sumansa Events. Jaiswal said real estate is one of the fastest growing sectors in India. The government of India's move to allow 100 per cent FDI in the real estate and construction industries in February 2006 has spurred unprecedented activity. In addition, market analysis pegs returns from realty in India at an average of 14 per cent annually with an upsurge in commercial real estate on account of the business process outsourcing boom, he said. Source://gulfnews

Indian, UAE realty firms join hands

2007-05-09T02:02:00.000-05:00

India-based Tata Realty and Infrastructure (TRIL) and the United Arab Emirates-based Jafza International have signed a memorundum of understanding (MoU) to set up a joint venture to develop and operate a chain of business and logistics parks across India, news website businessstandard. com reported Tuesday. The TRIL is an India-based Tata Group infrastructure and real estate development subsidiary and Jafza International is the global operations arm of Economic Zones World. Jafza International currently manages seven mega facilities in four countries and has 20 different projects at various stages of development. With the Tata partnership, the company is planning to expand its operations in India, the website said. Source: Xinhua

Merrill Lynch arm buys stake in Delhi-based realty major

2007-05-07T00:54:00.000-05:00

Leading global investment banking firm Merrill Lynch is betting big on Indian real estate. The firm's proprietary real estate arm has made its first move in north India, reports CNBC-TV18. There is no stopping the flow of foreign money in to Indian real estate. Merrill Lynch's India real estate investment arm, India Global Commercial Real Estate - has made its first investment in north India. The investment banking firm has picked up an equity stake in Delhi-based real estate development company, Business Park Town Planners' IT park in Gurgaon for close to Rs 218 crore. Both companies are tight lipped and did not wish to comment on the JV. However, sources said, the investment is a mix of plain and preference equity. The IT park is being built on the Gurgaon Expressway on five acres of land and will have a built up space of 6.25 lakh sq ft. The deal has been marketed by international property consultancy, Jones Lang Lasalle. Gurgaon has emerged as a favoured destination for IT/ITeS companies. However, supply of commercial space in Gurgaon is fast drying up and an A-grade IT development here will command a premium. Source://moneycontrol.com

Commercial property rent to fall in major cities

2007-05-05T00:01:00.000-05:00

A report by international property consultant, DTZ reveals that most major cities in India will witness a fall in commercial property rentals, reports CNBC-TV18. In the past two years, companies have had to curb their expansion plans owing to rising real estate costs. Now, a report by international property consultancy DTZ predicts an oversupply in the commercial property segment in the next one year. The report says that Pune and Chennai will be the cities leading the list with an expected oversupply of 68% and 66% respectively. The report predicts an oversupply in all major cities, except Mumbai, where demand will continue to exceed supply by 9%. Experts say, this may cause rentals in certain pockets to fall by up to 25%. Balaji Rao, Managing Director, Starwood Capital India Advisors said, “I think in Pune, it will be quite choppy in some IT known areas like Hinjewadi or Baner. You will see this happening in Bangalore in the Whitefield area. I feel a bit of it will happen in the OMR area, just the Old Mahabalipuram Road. I see there is a lot of supply that will suddenly come up in the next one-two years and there won't be enough demand off take to absorb this. This will result in prices becoming softer and properties taking a longer time to completely lease out.” According to the report, most of the anticipated supply will be in the IT/ITES segment. The seemingly insatiable demand from the IT sector led developers to go on an overdrive and build more space than was required. More supply will hit the market when SEZs finally take off and this may put pressure on developers of non SEZ IT space. Kishore Gotety, Dir-Real Estate Investment, ICICI Venture, said, “We are expecting that you will have to negotiate harder to get your non SEZ space leased out. We don't expect vacancy to prevail but rates will definitely be under pressure. But this oversupply situation may not be as drastic as it seems. Experts say only half of these projects will see the light of day and most of this supply will be built to suit. They expect the rest to be absorbed over the next few years.

Jaish investing in Indian real estate to raise funds

2007-05-03T00:33:00.000-05:00

Lending weight to India's stand that terrorists are infiltrating into businesses, a US report on terrorism has said pro-Pakistan Jaish-e-Mohammed (JeM) was investing in the commodity market and real estate to raise funds for its terrorist activities. The report titled, "Country Terrorism Report", prepared by the US State Department, said the JeM, led by Maulana Masood Azhar, who was released by India in exchange of hijacked passengers in 1999, had withdrawn funds from bank accounts in anticipation of asset seizures by the Pakistan government. National Security Advisor M K Narayanan, at a conference in Munich in February this year, had said the manipulation of stock exchanges was the new modus operandi used by terrorist groups to raise funds for their operations. The terrorist groups are involved in legitimate business enterprises like restaurants, real estate agencies and shipping and use part of their proceeds to siphon off funds for their terrorist activities, he had said.

Indian property hotspots 'close to best infrastructure'

2007-04-30T04:39:00.000-05:00

India's booming economy has seen the property market growing fast along with so many other things. With the country on the up it may appear that there is no limit to the prospects for growth.Certainly there are those who think so. Last week Hena Kishore, a property consultant for Sternon, said India was not only "emerging very strongly as a property market", but a completely risk-free market where the legal basis of buying property gave the buyer full protection and the strength of the economy was attracting buyers en masse. Hers was a thoroughly upbeat assessment.But which are the property hotspots? Ms Kishore said Mumbai and Goa were particularly popular because of their appeal to westerners, especially as holiday destinations. That, of course, is good news for the buy-to-let industry. But for more evidence of where the best prospects are for property investors, it is perhaps best to study where the money is going. According to a report today by Reuters, reproduced in Pakistan's Daily Times, the bulk of the investment is heading where the best roads and airports are. In the case of tourist destinations, which by their very nature make the establishment and maintenance of a good international airport a priority, this is perhaps a case of stating the obvious. However, the article goes on to suggest that problems remain with the development of infrastructure in certain areas due to what it calls "India's legendary red tape and ingrained political mistrust of privatisation", citing the comments of Sameer Nayar, the head of real estate for Credit Suisse in Asia, who noted delays in constructing a highway between Delhi and its airport. What Mr Nayar argues is that developers are gravitating to the locations where the infrastructure is best established, which the article's author suggests may create areas of property oversupply. Yet in the same article he also notes that in some cases the investors themselves are investing in infrastructure, such as better sewerage and more reliable electricity supplies. The investment intentions of different companies may, however, suggest that any pessimism is misplaced. Reuters in Hong Kong reported last week that Citigroup's property Investment arm was looking to plough $400 million (£200 million) into property development in India, with the city of Pune the target of a $125 million housing project, while the same news agency's Mumbai office reported yesterday that Kotak Realty Funds was raising $350 million for investment in various projects and partnerships. If the development of India is haphazard, it may be worth noting the comments on the country by the Foreign and Commonwealth Office, stating that: "Economic reforms, initiated in 1991, have placed India firmly on the path of sustained economic growth." It adds that these acts of liberalisation followed decades of the economy being closed. That being the case, it may not be unreasonable to think that the "ingrained political mistrust of privatisation" could in fact be a vestige of old attitudes, ones which recent governments are increasingly moving away from. Besides this, however, it is also maybe worth considering that in a country so large, so socially diverse and changing so rapidly, there are bound to be some problems along the way and some respects in which parts of the country develop faster than others. This may well lead to a situation where those looking to invest in property, including in the buy-to-let market, have to carefully cherry-pick their locations, but it may also smooth out in time to create the required balance and stability in the long run.

SEBI proscribes futuristic valuation of land by realty firms

2007-04-25T04:39:00.000-05:00

Mumbai: The Securities and Exchanges Board of India (Sebi) has asked real estate firms not to give futuristic valuation of land with them in their draft prospectus for public offers. Sebi has asked all merchant bankers associated with real-estate IPOs to rework valuations and strengthen their disclosures on 'land banks' in the draft red herring prospectus filed with the regulator. Sebi is currently working out the modalities of the disclosures "There should not be any disclosure of land values based on the future developed value of the land," Sebi said in a note on IPOs by real estate companies. Seven real estate companies have filed offer documents with Sebi as of February 14. These issues are expected to raise around Rs17,400 crore from the market. There is a tendency among real estate companies to ride a real estate boom to rise its huge fund needs from the market, the market regulator said. "While on one hand, a string of issues by real estate companies reflects on the ability of Indian primary market to support such huge need for funds, on the other hand, it also perhaps reflects on a tendency on the part of issuers to ride on the real estate boom, thereby pointing to need for overall caution," the note said. According to Sebi, disclosures by real estate companies show that there were no standards. At times, valuations include certain futuristic assumptions. While in some cases there are valuations, in some others there is no valuation. There should be some standards for disclosures, the regulator said, adding that it was in this context, Sebi felt there is a need for a closer scrutiny of disclosures by such companies, especially relating to land bank and its valuation. Among the seven prospective issuers, DLF has an IPO size of Rs12,000 crore, Omaxe Rs1,200 crore, Purvankara Projects Rs1,200 crore, IVR Prime Urban Developers Rs830 crore and Housing Development and Infrastructure Rs2,000 crore. The Sebi move if strictly implemented could affect the prospects of many of these realty IPOs.

Real Estate Prices May See Corrections

2007-04-19T00:17:00.000-05:00

The credit rating agency ICRA believes that the real estate prices might see correction in some pockets. These pockets are cities which do not enough economic activity to support the price boom there. Vikas Agarwal, general manager, head-real estate & construction, ICRA Ltd, said, “There might be some dipping in the real estate prices in some pockets with low economic activity, low income level needed to support the price.” The property prices in an area must be supported by the underlying growth story and towns without fundamentals will experience some correction, he added. Recently, property prices in Bangalore and National Capital Region (NCR) have seen a bit of correction. He pointed out that in the short run the high interest rate may create small hiccups but in the long term there is a strong demand for real estate & their prices are going to stabilise. He also cautioned against the mushrooming growth of small players, having low credibility, in the real estate business on the back of huge growth in last 3 years. He highlighted certain challenges before the industry in the form regulation, transparency and valuation. John Kriz, team managing director, Real Estate Finance, Moody’s Investor Service, said that globally there is a movement towards public real estate and by creating real estate investment trusts (REITs) the public property space can be strengthened. In India, the government is yet to conceptualise REITs. REITs are commercial vehicles which own property and issues shares to its members. Kriz also highlighted the factors while designing REITs. These are limits on leverage, management of property owned by REITs etc.

Sternon Group Into Mumbai Real Estate Market

2007-04-16T04:26:00.000-05:00

Sternon Group, Dubai-based real estate developers, builders and promoters, has entered Mumbai's booming real estate market with a Rs. 1,200 crore mega-project on the Mumbai-Pune Express Highway near the proposed New Mumbai International Airport in Panvel.

Spread across 400 acres, the project named 'Magic Hills' is a residential cum commercial township, of which the 250-acre residential portion offers row-houses and individual and twin bungalows, with world-class amenities as well as recreational, retail and educational facilities designed to meet the sophisticated tastes of NRIs worldwide. Sternon Group, which has customers in 28 countries, is marketing the project in international markets, including the Gulf, following an exclusive global marketing tie-up with Garnet Construction Ltd, a public listed Indian real estate developer. 'New Mumbai is a red-hot area for real estate investors for two reasons,' said Hussaini F. Nalwalla, Managing Director, Sternon Group. 'Firstly, New Mumbai has been hailed as one of the world's best master-planned cities, and secondly, the green-field New Mumbai International Airport is set to give a major boost to the area.' Sternon, which has developed and marketed high-end properties in different parts of the world, including the United States, the United Kingdom and the UAE, is working closely with Garnet Construction to offer investors homes with large airy rooms, good lighting and amenities that are standard in projects of this kind in other parts of the world. Sternon also anticipates high appreciation in the short-term and high rental values in view of the rising mortgage rates in India. 'Considering the robust real estate growth in New Mumbai in recent times, investors and home owners can expect appreciation of upto 70 per cent in two years. The area is already humming with construction activity as work on the New Mumbai International Airport has already begun,' Nalwalla added. Sternon Group has announced that it will invest upto US$ 3-4 million in the project. The Group is marketing the project for investors, holiday-seekers and Non-Resident Indian families through its offices in the United States (U.S.), the United Kingdom (U.K.), the Middle East and India. Garnet Construction, which is listed on the Bombay Stock Exchange, is to raise US$ 60 million by way of foreign currency convertible bonds or through preferential basis or through private placement among qualified institutional buyers to finance its new projects, including Magic Hills. The new international airport for Navi Mumbai is being built through public-private partnership, with the private sector partner holding 74% equity, while Airports Authority of India (AAI) and Maharashtra government (through City and Industrial Development Corporation or CIDCO) holding 13% each. The International Civil Aviation Organisation (ICAO) has already given techno-feasibility clearance to the airport.

U.S. Investors Bullish on Indian Real Estate

2007-04-09T04:22:00.001-05:00

Anoop Dave, a real estate consultant in Philadelphia, recalls a dinner conversation he had two years ago with a senior Goldman Sachs executive involved in the firm's global real estate investments. This executive swore he would never invest in India, adding that his determination had been cemented by impressions formed after a recent visit to the country. Times change. For about a year now, Goldman Sachs' Whitehall Street Real Estate Funds have been exploring the Indian market and checking out potential investment partners. In March 2005, the firm announced it planned to invest up to $1 billion over the next two years in Indian private equity, real estate, private wealth management, and other businesses in India for its institutional clients. A month later, California Public Employees' Retirement System invested $100 million in a $400 million real estate fund promoted by India's Infrastructure Leasing & Financial Services. At last count, international funds had reportedly invested some $2.5 billion in Indian real estate. Nearly two dozen domestic funds have raised another $3.5 billion for similar investments, including Wall Street powerhouses such as J. P. Morgan, Warburg Pincus, Morgan Stanley Real Estate Funds, Merrill Lynch, Lehman Brothers, Warren Buffett's Berkshire Hathaway, the Blackstone Group, Colony Capital, Starwood Capital, etc. Rising ReturnsAll these companies are encouraged by Indian policy changes in February 2005 that allow foreign investment of up to 100% in construction development projects with fast-track approvals. The real attraction is investment returns of potentially 25% and more in Indian projects that might be hard to come by today in the U.S. and Western Europe. India's urban office space market is tiny at about 60 million sq. ft., compared with New York City's 400 million sq. ft. or New Jersey's 175 million sq. ft. (Bangalore, in southern India, has 25 million sq. ft. of office and high-tech space, of which 9 million sq. ft. was built last year.) Investors could view that as a glass half-full or half-empty.Investors from Asia have been among the earliest to jump into India's construction development industry, firming up a presence established before the latest hreforms. Large Singaporean development companies that already have projects underway in India are Ascendas, CapitaLand and Keppel Land. In June 2005, Ascendas launched its $350 million "Ascendas India IT Parks Fund," with investments in two IT parks - the International Tech Park in Bangalore and the Vanenburg IT Park in Hyderabad. Keppel Land has stakes in several IT parks across the country. Indonesia's biggest conglomerate, the Salim Group, has proposed four investment projects in West Bengal - a "health city," a "knowledge city," a special economic zone and an express highway that will account for 1,500 acres. Enter the Developer Tishman Speyer is among the first U.S. developers to invest in India. In April 2005, the New York City-based firm formed a joint development company with ICICI Venture Funds of Mumbai that will have a war chest including leverage of up to $2.5 billion. Tishman Speyer and ICICI Venture Funds are bringing in $300 million each in equity and will invest equally in projects. Kishore Gotety, ICICI Venture Funds' director of investments, says the internal rate of return net of developer margins and fees could be between 25% and 28%. He says returns were "in excess of 100%" in some markets such as Devanahalli in Bangalore, where a new international airport is being planned. He believes returns could be equally high in other locations earmarked for large infrastructure projects.So far, the Tishman Speyer-ICICI Venture Funds company has signed memorandums of understanding for two ventures in India. One is a $200-million project for residential and commercial development on 42 acres in Bangalore's prime Whitefield suburb. The project is in the final stages of due diligence, and the Tishman Speyer-ICICI Venture Funds company has struck a deal to buy the land. Gotety expects to have the residential component ready for occupancy within two years. The commercial space is expected to be ready in five years. While it will initially be leased to tenants, plans are to sell it eventually. The second project is in Devanahalli, where Tishman Speyer and ICICI Venture Funds are buying a 25-acre lot whose final use has not yet been decided, says Gotety. An earlier plan for a development project in Pune, 100 miles south of Mumbai, has been shelved for now. Brokerage Deals While many U.S. investors are still testing the waters, real estate services firms with existing operations in India are on a roll. Anshuman Magazine, managing director of CB Richard Ellis (CBRE) South Asia based in New Delhi, joined CBRE in 1994 to launch its Indian operations - the first by a foreign brokerage firm. Today, he runs operations in 66 cities in India, Pakistan, Bangladesh, Sri Lanka and Nepal from his New Delhi base, with 600 employees in seven cities. It has property management contracts totaling 25 million sq. ft. in 14 cities, and has advised on construction projects of more than 10 million sq. ft. in just the last two years. Cushman & Wakefield of New York City entered India in 1997, and the firm has since grown to offices in four cities with 350 employees. Many of its global clients have significant operations in India, including HSBC, Verizon, IBM, Lucent Technologies and Boeing. Arshpreet Chaudhry, managing director of client solutions at Cushman & Wakefield in New York City, who oversees his firm's India strategy sees big gains around the corner. "Real estate and construction development in India will have availability of cheaper, long-term capital from international lenders," he says. "Foreign developers will encourage implementation of international best practices, and prices will get competitive for better quality."

Temple Wall Pulls Down Real Estate Prices

2007-04-09T04:22:00.000-05:00

MUMBAI: This is one wall that has brought property prices crashing down. Realty experts say the recently erected security perimeter around Siddhivinayak Temple at Prabhadevi has pulled down the prices of apartments in and around that area by 15-20 per cent. A couple of years back the property prices were hovering around the Rs15,000 per square feet mark. “Today the prices have come down to Rs12,000 per square feet,” property consultant Ashish Desai told DNA. “If the wall comes down the prices will increase to Rs17,000-18,000 per square feet.” Desai even claims that residents are “fed up” and are willing to sell their flats for less than Rs12,000 per square feet. Besides the wall, experts also point to other reasons for depressed prices around the temple “Compared to the residents in Bandra or Mahim, who face problems once a year for a 10-day festival, residents near Siddhiviinayak face problems every week. Any prospective buyer is going to be sceptical,” says Pranay Vakil, chairman, Knight Frank Property Consultants. “There is at least a 15 per cent difference in the prices of apartments in this area (in and around the temple) to those of other places around Prabhadevi,” says property consultant Atul Shah. “The particular buildings in line of Siddhivinayak temple face the maximum price problem.”Residents admit that enquiries for their properties have come down in the past year, despite their willingness to reduce the price. Amrish Mehta, who has been a resident of Silver Apartments for the last 25 years, is disappointed at the manner in which prices have slumped in recent years.“I bought this flat, behind Siddhivinayak, for Rs600,000 (Rs1200 per square feet) twenty-five years ago. In such an inflated market like Mumbai, we are not even getting buyers for Rs10,000 per sq ft,” says Mehta.Several local brokers say the flats in and around the temple do not command the price they deserve because the wall has completely blocked all the access points. A case in point is the Kakasaheb Gadgil Marg — the road that comes from Portuguese Church to Siddhivinayak – which has been cut off for last two years. Another is the scrapping of the bus stop outside the temple due to the wall.“Access to roads, public transport and the like determine the quality of life, which unfortunately has deteriorated because of the wall. So it isn’t really a surprise that real estate prices have dropped in the area,” says Vinod Desai, secretary, Citizens Forum. “After the wall came up, even our emergency gate has got sealed as the temple’s metal detectors are placed outside it.” Prabhadevi is known for its high quality educational institutions, like the Convent Girls High School, and that has been one of the attractions of the locality.“My friend who lived in Parel got admission for his daughters in Convent Girls’ High School. He was getting a flat in an upcoming building near the temple two years ago for Rs11,000 per sq ft. But seeing the traffic snarls he opted for a more expensive house in Shivaji Park,” Chetan Save, member of Parent-Teacher Association, Convent Girls’ High School, told DNA. Experts say the wall has blocked even emergency access to the buildings in the temple area. “Even Mumba Devi is in a crowded area and is the oldest temple of our city. But the fire brigade can reach it far easily than at Siddhivinayak. Why should anyone pay for lack of basic safety?” asks SG Maheshwari, former president of Real Estate Association of India.

Land prices look set to crash in Haryana

2007-04-06T23:49:00.000-05:00

With Reliance’s ambitious 25,000-acre SEZ project in Haryana hitting a limbo following the EGoM decision on special economic zones, land prices in the surrounding areas is likely to witness a major crash. Incidentally, ever since a major part of land and around Jhajjar was notified by the Haryana government for the Reliance SEZ project, early 2006, it resulted in a major boom in land prices. For land to be acquired by the corporate major, the state government had imposed a minimum floor rate of Rs 22 lakh per acre, which was about 7-8 times the then prevailing market price of Rs 3 lakh. The resultant effect was simultaneously felt in the adjoining districts, like Rohtak, Jind and Rewari, where in the last 12-15 months, land prices have jumped 6 times over, to more than Rs 15 lakh per acre. Real estate developers however are of the view that though there will be minor corrections as far as land price is concerned, there is no need to panic as far as a land price crash is concerned. Says Parsvanath CMD Pradeep Jain, “At best, land prices will be rationalised. Developers who have the vision for developing SEZ projects will go ahead with land procurement. The demand is sufficient enough to sustain the boom in land prices.” However, contesting this notion, an official of Rewari development authority said, “The land prices in our area are around Rs 8-10 lakh per acre, but we estimate a substantive downfall in the prices due to centre’s notification, which has caused problems in the land acquisition of Jhajjar SEZ. The prices may see a drop by around 40-50%.” According to Jharuhar development area officer, the areas in closest proximity to the RIL’s SEZ would be worst hit. “In anticipation that prices would rise in future, small time developers of the region bought land at very low prices, which could fetch them higher rates in future. Now, post notification, their land bank would be hit badly due to lack of takers,” he said. National Real Estate Development Council (Naredco) deputy director Sumit Jha is of the view that areas which did not deserve to be such highly rated, would now become realistic in terms of prices. “The areas would definitely have to go through a correction phase. But developers would definitely come and development of real estate is bound to happen in these areas too at realistic prices,” he said.

Property Expo in Coimbatore Is Another Huge Success

2007-03-29T23:46:00.001-05:00

The third property expo held in the city of Coimbatore provided the property developers with excellent prospects. It also offered a chance to common man to be abreast with energy efficient and environment friendly buildings.

This recently concluded fair was jointly organized by Association on Consulting Civil Engineers India (ACCE), builder’s Association of India (BAI), and Coimbatore District Small Industries Association (CODISSIA). The fair is believed to have generated around Rs. 100, 00,000 business.

T.R Baalu, Union Minister for Shipping Road Transport and Highways, inaugurated the fair. Many famous personalities who graced the fair with their presence include the prominent names of Pongalur N. Palani, Minister for Rural Development, Government of Tamil Nadu and Professor M. Naganathan, Deputy Chairman, State Planning Commission. The fair was attended by around 1, 25, 000 visitors who passed through the portals of this Fair that concluded on 29th January with a valedictory function presided over by Coimbatore Mayor, R. Venkatachalam.

Karnataka Government Cautious on SEZs

2007-03-28T00:36:00.000-05:00

BANGALORE: The Karnataka Government is cautious on granting approval to Special Economic Zones obviously after what has happened in West Bengal. Minister for Industries Katta Subramanya Naidu replying to questions of N.H. Shivashankar Reddy and others during Question Hour in the Legislative Assembly on Monday said the State Government would not be a party to acquiring land for the SEZs. It was for the promoters of SEZs to acquire the land and approach the Government for approval. This meant that the promoters had to pay market price to the landowners. He said approval for new SEZs had been kept on hold by the Centre for the last six months pending report of the Group of Ministers (GoM). There was lacuna in the rules framed by the Centre on SEZs, which permitted real estate development. The Minister said the State Government was keen on forming SEZs on its own, particularly in Gulbarga and Bidar. Among the 29 SEZs approved for the State so far, the Karnataka Industrial Area Development Board had obtained permission for one SEZ for the IT sector on 203 hectares of land with an investment of Rs. 49 crore, another SEZ for the automotive sector to come up at Shimoga on 169 hectares of land and with an investment of Rs. 38.61 crore and a third for the food processing sector in Hassan on 15.73 hectares of land with an investment of Rs. 534.58 crore. He said three of the 29 SEZs approved so far had started functioning. Of the 29 SEZs, 19 were in Bangalore Urban District, two each in Mangalore and Bangalore Rural district, three in Hassan and one each in Shimoga, Belgaum and Mysore. The anticipated investment in the 29 SEZs was over Rs. 14,000 crore of which the domestic investment alone was Rs. 13,300 crore. Thus, the foreign direct investment in the SEZs was not more than 10 per cent of the total anticipated investments. The SEZs were expected to provide job opportunities to nearly 10 lakh people. To another question of R. Roshan Baig, the Minister said the KIADB had sanctioned 1,183 acres of land to the multinational companies in the industrially developed areas adjoining Bangalore.

Valuation to be based on development plans

2007-03-26T23:32:00.000-05:00

Valuations of real estate companies waiting to hit the capital market is likely to be based on their development plans and not on their land banks, in the wake of Sebi tightening norms on real estate IPOs in future. Experts say with the measurement parameter likely to change to development plans, a sharp fall in the valuation of real estate companies is a possibility. “If real estate companies are valued on the basis of their development plans and not land banks, the fall in the valuations could be anywhere between 30-50%,” said National Real Estate Development Council deputy director Sumit Jha. Analysts have already started re-rating real estate companies. A research report released by Macquerie on Friday has this to say about IVR Prime Urban, the real estate subsidiary of infrastructure major IVRCL: “We have reduced the valuations of the real estate business. Our valuations of the real estate subsidiary are now based on development plans instead of the land bank. As a result, we value the subsidiary at Rs 80 of IVRCL vs the previous Rs 147. The large proportion of land aggregated under joint development and contractual agreements is a key reason for the downward revision in our valuations.” DLF, which is looking at raising an ambitious Rs 13,000 crore from the capital markets, however, say that its valuations will remain uneffected. The company’s executive director Rajeev Talwar said, “For us, landbank was anyway not the parameter for projecting our valuation.” Industry experts point out that development projects where companies have entered into memorandum of understanding with farmers, will not be taken into account while calculating the valuation.

Indian Real Estate Doesn’t See Fall in Price

2007-03-19T03:18:00.000-05:00

A recently survey conducted by Federation of Indian Chambers of Commerce and Industry (Ficci) said that a major chunk of real estate firms believe that the rising price in Indian real sector is here to stay. The survey, which is based on the findings from the 24 leading real estate consultancy firms, developers, construction companies, builders and financial institutions, came out with the fact that 67 percent respondents did not foresee a sudden collapse in the property rates in India. Around 80 percent of the respondents were of the opinion that rise in prices was believed to be in the commercial and residential segment of Tier-II cities. The survey also said, that 41 percent of the respondents felt that the residential sectorwas more profitable as compared to the commercial sector. And 50 percent of the respondents felt rise in the home loan rates by banks will decrease the sale of residential property india. Residential segment has emerged out as the most preferred investment opportunity for the real estate developers said the survey. The second best place to invest for real estate developers turned out to be commercial sector followed by retail sector. Surprisingly, SEZs as an investment option was least preferred.90 percent of the respondents were of the view that IPOs would help in making the sector more organised, which will bring higher accountability and transparency and around 60 percent of them believed that it will give more credibility to the Indian retail sector.

Mall Management: A Challenge for Indian Retail Industry

2007-03-14T22:51:00.000-05:00

Mall mania that has gripped the Indian real estate has some challenges for the malls owners that need to be taken care of. A study done by ICICI Property Services-Technopak, on Indian retail sector, said that mall management is going to be a major challenge for the retail industry. So far, the trend is that some property developer develops a mall and then, he sells it to some investor, who then leases it out to retailers and this whole process creates ownership issue, which creates problems in maintaining the malls. The report said such malls are owned neither by developers nor by the retailers but are slowly owned by individual financial investors, which create unplanned and haphazard developments for the malls and eventually it depreciates the rental value of the malls. The report suggested that mall owners and developers need to keep in mind the importance of controlling and managing their malls in order to capitalize on their investments. Lack of differentiated offerings was termed as one the major shortages in the Indian retail industry. As of now the trend is that most of the mall developers offer the same kind of malls which have spaces for shopping, food and films, but as the number of malls will increase people will look for malls location and what new it’s offering that will become a major factor in raising or lowering its asset value. According to the report, mix retail planning and tenant selection will be one of the key factors for the success of malls and the real estate developers in India. It will be required to renegotiate the lease that comes up for renewal on specific transparent performance measures. Last but not the least, the study said, before going for malls development, issues such as facilities management, utilities management, market and promotions, event management, and hospitality should be taken into account. Source:indianrealtynews

Gurgaon Waking up to Specialty Malls

2007-03-13T00:43:00.000-05:00

The old adage “The more the merrier” seems apt for the fast flourishing cyber city of Gurgaon that already has scores of monumental malls. Adding to its mall culture are coming specialty malls like wedding malls, festival city, boutique malls and the glittering gold souk. Work on wedding mall is already under way whereas the construction work for two boutique malls and a festival city are expected to commence soon. Not only this, there is one company, which is coming up with a theme destination mall in Gurgaon. It plans to invest a whopping Rs 300 crore and assures to offer world-class retail stores, entertainment, leisure experience and even an IMax theatre for the movie buffs. The company spokesperson informed that the malls the firm is planning will be among the biggest malls of the city and will spread over an area of two million-sq ft. He added that besides environment friendly design with large open sky spaces, the company will take care for the safety of kids, elderly people and the disabled people.His company is not restricting itself to Gurgaon. It is even branching out to Ludhiana and Punjab too, where it is planning to set up boutique malls. Do these malls attract genuine buyers or have they just turned out to be a place to do window shopping? Commenting on this, another official said, specialty malls are in vogue these days. Unlike other malls, where people are offered various things under one roof, here in specialty malls which will get one particular thing in one mall. This will attract only genuine buyers in that mall. However, he sounded optimistic stating that NCR region is expanding rapidly which means the purchasing power has gone up and that will definitely have an impact on the mall business too. Source:indianrealtynews

Haryana - The Ultimate Hub for Entrepreneurs

2007-03-07T23:51:00.000-05:00

Tireless efforts of Bhupinder Singh Hooda have brought to fruition a high growth wave for the state of Haryana. Government during its initial less than two years tenure, has made Haryana a hub of industrial investment and a land of special economic zones (SEZs). The progressive and visionary policies pursued by the Haryana Government, have enabled the state to attract handsome investments, both domestic and international. The demand for industrial plots has spiraled in Haryana. This is what has encouraged the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) to draw up plans to get hold of 1,700 acres of land in different parts of the state to develop more industrial parks. With loads of pressure and agricultural production peaking, industrial development can alone put Haryana in the high growth orbit and offer exclusive job prospects to thousands of people. Mr. Hooda took commendable initiatives to bring industrial revolution in the state even before taking over reins of the Government in March 2005. His government designed a new industrial policy-2005, targeting to achieve three pronged objectives: setting up high quality infrastructure base, opening fresh avenues of employment and bringing great industrial development by offering a conducive environ for potential industrial investors. After seeing the developments running so rapidly in Haryana, there is no doubt left regarding the state government hitting the bull’s eye. HSIIDC allotted as many as 1,425 industrial plots in different estates for projects which would be catalyzing domestic and foreign investments over 4,000 crore. Prominent names among these allotted lands include Suzuki Metal India ltd., Johnson Matthey (India) Pvt. Ltd., Nerolac Paints, Stanley, Mitsubhishi Electricals, and more. The Government has also allotted 600 acres of land to Maruti Udyog Limited for its expansion project at IMT Manesar. Source:indianrealtynews

Budget baffles builders

2007-03-05T23:13:00.000-05:00

The booming real estate sector had hoped that Finance Minister P Chidambaram would brandish his magic wand and unleash slew of sops, which would enable the common man buy the dream house at an affordable cost. Booming economy, marred by upward curve in the inflation, might have cautioned the Finance Minister in the aam admi government to concentrate more on roti than on makaan in the Budget 07-08. While, the Finance Minister has cleared reverse mortgage scheme for senior citizens, confusion prevails on small apartments, as silence on the much-expected Income Tax provision of 80 IB (10) has evoked mixed interpretations. Small apartments Under the section income earned from the construction of small apartments of the size of 1,000 square feet and less in Delhi and Mumbai and 1,500 sq ft and less in other cities, could avail 100 per cent IT exemption on profits (which ranges between 30 and 50 per cent). But the provision is to lapse from March 31, 2007. Delhi-based developers like Pradeep Jain of Parsvanath Group and Ajay Khanna, director of DLF group, interpret this in a negative way - the Centre has not taken a decision to extend the benefit. “Though there are only a few developers constructing small-sized flats, the move to take away the incentive will rather discourage them to continue building them. This will affect the supply of such flats. It will affect property prices which will increase sooner or later,” says Niranjan Hiranandani of Hiranandani Developers. Analysts were of the view that input cost in construction of small apartments is 15 per cent higher than for premium segment apartments. Per square foot price of premium apartments is higher than that of smaller ones. So, developers would obviously prefer to construct premium segment apartments. Clarity on this aspect by the Finance Ministry would rekindle many to opt to buy their dream homes, already hit by rising home loan interest rates. But, they may have to bear with the differential excise duty on cement. Commercial rent G. P. Savlani of the Confederation of Real Estate Developers Association in India says the levy of service tax on rental commercial premises, wherein the owner of the premises does not provide any service, is uncalled for. He only provides the vacant premises and the lessee carries out interiors, etc. on which, in any case, he pays the service tax. There is already a short supply of office space and currently the demand and supply is a total mismatch. Levy of service tax will make rental premises more expensive, which will ultimately be a burden to the customer. This will lower the owner’s yield and an investor may turn away from real estate. The domestic real estate venture capital funds, which have already put money into income yielding assets, will suddenly find the income going down by 12.5 per cent,” he says. Source:tribuneindia

Increasing FAR will lower apartment prices

2007-03-01T00:17:00.000-05:00

What will happen if the floor area ratio (FAR) in Delhi is increased beyond 400 from the present 200? The city grow vertically and realty rates will remain under check! Property experts feel that such a step would not only transform Delhi into a skyscraper city, but will also bring down the prices of apartments by as much as 35%. However, the prices of land - which can now sport upto 40 floors—can go up by 15%. Such a measure can make an extra 2.2 million 2 bhk apartments available, which will house around 10 million people. Says Deepak Bhavsar of Trammel Crow Meghraj Property Consultants, “The first effect of such huge space that will be available for development will be on the property prices. They will get stabilized and the exodus that had taken place to real estate Gurgaon, might stop. In fact,Delhi is always the first choice for many.” The Union urban development minister, S Jaipal Reddy, made this announcement while speaking at a symposium on “Delhi: Stepping towards Re-construction” at the Delhi Legislative Assembly premises on Monday. Reddy also said Delhi will soon have a statutory regulatory authority to monitor construction activities in the national Capital. “High-rise structures are needed in Delhi but in a modest and modern way. The MPD 2021 did not regularize everything but went by ground reality. Norms were relaxed for the poor, old areas and unauthorized colonies,” he added Encouraging vertical growth will act as a big boost for the housing sector in the city. However, city-based developer Amol Arora feels that the effect will take about six months to trickle down. “Property prices are expected to stabilize in the long run. But if the government does not provide for proper and adequate infrastructure, such policies will prove to be a death-knell for the city. Ultimately, they will stabilize in the next 2-3 years,” he said. Source:financialexpress

villa / appartment in bangalore , india

2007-02-25T23:37:00.000-05:00

Villa: Lifestyle worthy of the privileged few, Sylvan offers to its discerning patrons, designer villas off Electronic City, Hosur Road, Bangalore. A private place where peace and tranquility reign amidst pastoral environs. Sylvan View covers 60 acres with more than 800 villas; the first phase offers 205 independent designer villas spreading across 12 acres of land. All the houses are vastu-compliant designs and boast of carefully crafted floor plans ranging between 1746 and 2267 sqft. Abundant space is what Sylvan View promises, it has thus earmarked 50 % of the project area for open spaces, landscaped gardens and tree-lined avenues! Appartments: Midway City is a complex of 196 well-designed 2 & 3 Bedroom Apartments that sprawl across 8/9 floors, with top of the line amenities and facilities and a total land area of 5.1 acres.Concorde Midway City is situated just 400 meters away from Hosur Road on the way to Electronic City. One of the top contractors of India is our constructor for this project, and for landscaping we have deployed some very well known international architects from Singapore. The surrounding area of the project is a priority zone for development. A 9 km elevated road project to reduce congestion from Silk Board Circle to Electronic City has already commenced in the area. Work on a Peripheral Ring Road connecting ITPL at Whitefield, embracing IT corridor around Hosur Road, and joining Mysore corridor Road has also begun here. The project has been approved by the Bangalore Development Authority and by all major Banks for Home Loan purposes. Source:kijiji.in

Sebi imposes Rs 1 cr fine on DLF arm

2007-02-21T00:04:00.000-05:00

Market regulator Securities and Exchange Board of India (Sebi) on Tuesday imposed a fine of Rs 1 crore on DLF Commercial Developers (DLFCD), a subsidiary of real-estate india major DLF Universal. The company has been penalised for dealing in Bhoruka Financial Services scrip at the de-recognised Magadh Stock Exchange in Patna. In its order against the DLF entity, Sebi said Magadh SE's application for renewal of recognition as a stock exchange was at a proposal stage when (between August 1 and August 12, 2005) the DLF group company carried out the said transaction. The bourse was granted recognition on December 11, 2005, the order mentioned. The Sebi order said that the promoters of Bhoruka Financial held nearly 2 lakh shares in the company, constituting 98.73% of its equity. They sold the entire stake to DLFCD for about Rs 90 crore, at Rs 4,490 per share. On the Magadh SE, the transactions had taken place under the 'permitted to trade' category based on an application by its member-broker Rajat Share & Stock Brokers, while Bhoruka Financial was listed on the Bangalore Stock Exchange. Apart from DLF Commercial Developers, Sebi also imposed a combined fine of Rs 1 crore on 11 others on a similar charge. These entities included promoters, directors of Bhoruka Financial, and their related entities. Interestingly DLF Universal, which is in the process of listing its shares on BSE and NSE through an IPO, has mentioned in its draft prospectus that it could face a fine up to Rs 1 crore for its dealings related to Bhoruka's shares. "There is pending litigation under securities laws against Bhoruka Financial Services, one of our subsidiaries... be liable to a penalty which may extend up to Rs 10 million," the company said in its IPO draft prospectus.

Tatas join realty rush with Rs 4,500-cr fund

2007-02-15T23:55:00.001-05:00

Better late than never. Even as most of the big industrial houses have set up their realty funds to invest in India's hottest business - real estate, India's oldest and largest industrial house, the Tata group has now suddenly woken up to the opportunity. It has decided to throw in its hat in the ring with a staggering corpus of Rs 4500 crore. Modelled on the lines of Kishore Biyani promoted Future group's Kshitij, which invests in real estate,Tata Realty & Infrastructure - a newly created company - will invest in infrastructure and real estate projects, a source familiar with the plan told TOI. Bombay House, the group's headquarter is drawing out a blueprint for its new business. Unlike in the past, where the group was not too hot on the realty sector, the changed scenario is now ensuring that the group is betting big on this sector. The Ambani brothers - Mukesh and Anil - also have interest in private equity funds. Recently, Morgan Stanley Real Estate fund invested approximately $152 million (Rs 675 crore) for a 10.75% stake in Oberoi Constructions, making it the largest deal in the brick and mortar space. Tata Sons director RK Krishna Kumar is driving the initiative. Kumar has brought on board Dinesh Chandiok, the former CEO of Ansal Properties to head Tata Realty. Apart from the Tatas, foreign investors too would be sponsors of the fund. There would be different fund schemes for different projects in phases, the source added. International Consultancy firm KPMG has been involved in strategising the Tata's real estate business. Tata Realty would look at investing in housing complexes, special economic zones, construction of bridges, ports and airports. It is not the first time Tatas are dabbling in real estate. Set up in 1984, THDC has put up several residential projects in Mumbai, Pune, Goa and Bangalore including the high-profile Petit Towers in Mumbai's upscale Kemp's Corner. In the early 2000s, Tatas were looking to exit from the company and had held discussions with Shapoorji Pallonji group. Things did not fructify and now, THDC has been given a fresh lease of life. It has set the target to achieve a turnover of Rs 2,010 crore by 2010. It is currently developing housing and commercial projects in East, South and North India. Like other developers, THDC would also join hands with other investors to achieve financial closure of these projects. The group is sitting on land assets worth crores of rupees in different parts of the country. //Source: timesofindia

Rise in CRR rate to affect real estate

2007-02-15T23:55:00.000-05:00

CITY BUILDERS aren’t sure when the high tide of the home loan india is going to ebb in the coming months. And it is certainly not good business for them during the next six months as middle class aspirations for a housing unit would die out — at least for the next six months with equated monthly installments (EMIs) on loans becoming a bit to uncomfortable to deal with for the salaried class. With nearly 1,200 flats under construction in Gomti Nagar locality itself and another 1,000 flats spread across the city’s landscape expected to be ready for possession from 2008-09, the builders feel the rise in CRR rate by the country’s apex bank, the Reserve Bank of India (RBI), to cut inflationary conditions in the country economy would serve as a temporary setback to the pace at which housing units were being booked by the middle class in the past one year in the State capital. “The lending by housing finance companies are already down by almost 20 to 25 per cent across the country.If the CRR becomes chain reaction with upward movement in home loan interest rates, it is bad news for the entire real estate sector. However, this is unlikely to happen in the long run,” commented Manish Khemka, promoter of Investmania Properties. He said that the middle class is likely to hold back their home purchase plans for atleast a few months. “Any hike in CRR is bad news for the entire real estate sector as well as banks and other lending institutions. Why just Lucknow? You could feel the heat of rising interest rates even in Agra or Kanpur,” commented a prominent builder who preferred not to be quoted. He said that RBIs attempt to cut inflation was in the right direction but signalled a slowdown in the economy which would impact the real estate sector in the coming months. “When people do not have the buying power who would purchase housing units?”, the builder stated. The estimated cost of the real estate projects under construction in Lucknow is estimated at Rs 3,000 crores with major construction activity in Sultanpur, Faizabad and Rae Bareli road localities besides the posh Gomti Nagar, where the builders feel the investment would be almost 50 per cent of the entire value of the projects coming up in the State capital. On Thursday, the Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BoI) and HDFC already decided to raise home loan interest rates immediately while ICICI Bank had decided to adopt a “wait and watch” policy. Source: //hindustantimes

Loan curbs may spell end of India's property boom

2007-02-12T22:53:00.000-05:00

SHARES of Unitech Ltd, India's largest real-estate developer by market value, soared 26,869 per cent during the past three years. Anant Raj Industries Ltd, a competitor, leapt 39,548 per cent. Both have dropped at least 5 per cent from peaks in November and December and further losses may lie ahead. The highest interest rates in four years, tighter lending requirements and seven share sales this year are hurting real-estate stocks. Those companies had rallied as a property boom pushed apartment prices in southern Mumbai to near-Manhattan levels. "Property stock valuations are approaching bubble territory," said Parameswara Krishnan, who manages US$150 million (US$1 = RM3.50) at DNB Nor Asset Management in Chennai, India. "We should see some correction".He said he is avoiding real-estate shares. Real estate-related stocks last year accounted for six of the top 10 performers in the BSE-500 index, the broadest measure of India's stock market. Three of the six are down this year and just one is among the top 10. Three, Mahindra Gesco Developers Ltd, Parsvnath Developers Ltd and Peninsula Land Ltd, are in the 10 worst. Unitech has declined 13 per cent from its November 23 peak, while Anant Raj has lost 5 per cent since its December 12 high. The shares are down 0.2 per cent and 0.3 per cent respectively last Friday. Indian developers are among the BSE index's most expensive members on a price-to-earnings basis. Unitech trades at 31 times expected earnings, while Anant Raj, a New Delhi-based developer in which billionaire George Soros bought a stake last year, is at 67 times. That compares with 21 times for the BSE-500 and 19 times for the eight stocks in Bloomberg's Asia-Pacific Home Builders Index. Average home prices tripled over the past three years, buoyed by the world's second-quickest growth rate among major economies after China. Prices rose 50 per cent to 100 per cent over the past year in cities such as Delhi, Bangalore and Hyderabad, property consultant CB Richard Ellis said in a report for the quarter ended December. A six-bedroom duplex apartment in the Malabar Hill area in South Mumbai, where Bollywood actor Vinod Khanna and Citigroup Inc's India head Sanjay Nayar reside, sold for about US$5.7 million, according to the buyer, Rakesh Jhunjhunwala. Jhunjhunwala, a Mumbai-based private investor with about US$250 million in Indian equities, bought the property in india June of last year. A comparable apartment on the Upper East Side of Manhattan would cost between US$6.5 million and US$8 million, said Jonathan Miller, president of Miller Samuel Inc, a real-estate appraisal firm in New York. India's developers also look expensive when their share prices are measured against the value of the land they own for construction, Jhunjhunwala says. Though he bought an expensive apartment to live in, he's avoiding real estate stocks. "Land bank valuations by developers are unrealistically high," he said. The valuations may not be justified because the projects will take five or six years to complete, he said. Rising incomes and easy financing have driven demand for housing among India's 1.1 billion people. Average salaries in India rose 13.8 per cent last year, the fastest growth in the Asia-Pacific region. They may rise as much as 15 per cent this year, according to Hewitt Associates Inc, a human resources company based in Lincolnshire, Illinois. Demand for office space is expanding in downtown Mumbai and other cities in India as banks such as Lehman Brothers and Credit Suisse set up shop. They join such technology companies as International Business Machines Corp and Dell Inc. The central bank is moving to cool the market. The Reserve Bank of India on January 31 raised its overnight lending rate for the fifth time in a year to 7.5 per cent and asked lenders to double provisions for commercial real estate loans to 2 per cent in an attempt to curb defaults. Housing Development Finance Corp, the country's second-largest mortgage lender, raised its rates four times over the past year to 9.5 per cent. "The continued high credit growth in the real estate sector, is a matter of concern," the central bank said. Colliers International India Property Services says average property prices across the nation may drop as much as 20 per cent over the next two years as more homes are built. Still, demand for homes and offices mean any drop in property stocks will probably be a correction and not a rout. Source: //btimes

Indian real estate holds great potential

2007-02-11T23:22:00.000-05:00

Direct investments in the Asian real estate sector has the potential to grow robustly in the long term, but infrastructure and lack of transparency would pose a challenge for the global investors, especially in India, a study said. "With an asset base directly exposed to the macro growth story that draws so many institutional investors to the region, real estate india offers a gamut of possibilities at every stage, from nascent market to mature developed economy," an Asian venture capital journal report on Asia real estate sector said. However, the sector's progress is hindered by volatility, immaturity and market opacity, which could act as a deterrent to the potential investors from entering the markets, the report said. "At the moment we've got about USD 800 billion market cap of real estate stocks in this region," world's leading real estate services and money management firm, Jones Lang Lasalle CEO - Asia Pacific Peter Barge said. Barge said rising GDP in the region is spurring trade, which in turn is a key driver for infrastructure, logistics, warehousing, research and development parks. "Equivalent trends appear in office assets, and above all residential and retail, playing to the urbanisation and consumer growth stories," he said. Source: //zeenews

"Master Plan to increase commercial spaces"

2007-02-09T06:04:00.000-05:00

`New buildings would now be able to come up without height restriction' `There is scope for private participation in the construction activity' -------------------------------------------------------------------------------- NEW DELHI: Union Urban Development Minister S. Jaipal Reddy on Thursday said the new Master Plan for Delhi-2021 notified on Wednesday seeks to increase commercial spaces and provides incentive for redevelopment of old places. Height restriction He also announced that the public document would be available on the Government website from Friday morning. The Minister said new buildings would now be able to come up without height restriction. But the floor area ratio should not exceed 33 per cent despite the existing being 100 per cent in many places. "We thought how can Delhi look like a really modern city and came up with this redevelopment plan. In my view this will give a huge and welcome facelift to Delhi.'' Stating that a lot of emphasis had been laid on multi-level parking blocks both on public and private land, Mr. Reddy said this would address a major problem of Delhi. Farmers "Also farmers can develop their land for housing provided they fulfil the societal obligations of providing common facilities and giving 15 per cent of their FAR for the weaker sections at their own cost. It is a win-win situation for all," he added. The issue of housing for slum-dwellers, he said, would be addressed through in-situ or in-situation redevelopment wherein the land would be given to builders through tenders and they would be required to create a housing pool, having units of about 300 square feet each, for the economically weaker sections that would be handed over to the Delhi Development Authority for allotment. The builders would recover their costs and profits through development of housing for the rich and commercial spaces on a percentage of the plot. Weaker sections The Minister said the policy was now clear. "Wherever housing is encouraged, the same area must have apartments for weaker sections. There will be no exclusiveness for rich and service providers will be accommodated in vicinity as this also reduces burden on public transport.'' Moreover, no more plotted development will be allowed in Delhi and only group housing will take place. He hoped more housing would help in moderating prices as well. Technology sectors Mr. Reddy said as Delhi despite being the Capital city was now known for high technology sectors, information technology and bio-tech parks would be developed. "We are also providing for conversion of industrial area into commercial ones on roads that are at least 80 feet wide. Instead of sealing and demolishing these structures, we would charge them and allow commercial use.'' Green area The new Master Plan also allows commercial use of inter-state bus terminals, bus depots and other bus terminals by permitting economy hotels to come up thereon. Besides, commercial activities on ground floor have been permitted in all DDA colonies. As for the green area, the Minister said 11,000 hectares along the border would remain green. "Delhi is known for its large green areas and so we would not sacrifice them and strike a balance between environment and galloping real estate development.'' Nevertheless all activities would be permitted in these green areas. "We will have farmhouses there where functions will be allowed. But there will be no construction.'' On the issue of sewerage, water and power, the Minister made it clear that it was for the Delhi Government to make those arrangements. Source: hindu.com

Real Estate India Earthquake Safety

2007-02-06T22:13:00.000-05:00

With the recent real estate india boom, property prices have reached stratospheric heights and that of Mumbai are about to touch the Ionosphere. A 2, 3 or 5 Crore 3BHK flat or more has become a reality in all metropolitan cities, and as per a recent news report a penthouse in Mumbai is being quoted at 125 Crores. Some of the builders/ developers offering premium luxury apartments in Delhi, Noida, Gurgaon, Greater Noida, Faridabad, Mumbai and Bangalore are DLF, Emaar MGF, Unitech, Ansals, Parsvanath, Omaxe, Vatika, Vipul, Hiranandani, Rahejas, Mahindra Gesco, Kalpataru, RNA, Runwal, Purvankara, Prestige, RMZ and Brigade Group. Earthquake Protection of buildings is categorized into three groups. The first being “Earthquake Resistant (Fully operational)”, hospitals and other lifeline buildings which need to be operational at all times are in this category. This is also the highest level of earthquake protection possible. The second category is “Earthquake Resistant (Immediate Occupancy)”. The building so protected, has installed energy dissipation devices/dampers that there is minimum non-structural damage and no structural damage to the building and so it is safe for occupancy and use even immediately after a major earthquake. The third category of earthquake safety is called “Earthquake Resistant (Life Safety)”. This is the lowest level of earthquake protection and is also the minimum that the Indian Government recommends. Life safety implies that in case of an earthquake the total collapse of the building will be prevented so as to minimise casualties. However the building will sustain structural damage and on most occasions will have to be demolished and rebuilt. The use of dampers/ energy dissipaters in buildings can add approx Rs. 150 to 200 per square foot to the costs; however, by using these devices which are designed for absorbing the earthquake energy, the Earthquake Protection of a building can be brought to “Earthquake Resistant (Immediate Occupancy)” standards. It is strongly advised that high end properties should not be bought unless a minimum protection of “Earthquake Resistant (Immediate Occupancy)” is provided. Such devices come with a written guarantee of 35 years which is further extendable by another 20 years after the devices are tested. All buildings designed/built before the year 2002 do not even meet the minimum earthquake protection standards and are considered dangerous during an earthquake as they are likely to collapse. A large number of such buildings exist in Mumbai. These buildings can also be seismically upgraded by using seismic dampers. In case the building is to be upgraded to “Earthquake Resistant (Life Safety)” standards the cost would be in the range of Rs. 50 to 75 per square foot. If the building is to be upgraded to near “Earthquake Resistant (Immediate Occupancy)” levels then the costs should be in the region of Rs. 150 to 200 per square. Source://newswiretoday

Gurgaon: World’s Largest Mall

2007-02-05T00:48:00.002-05:00

Unfazed by a decrease in footfalls at Gurgaon malls and virtual halving of rental rates, DLF Universal has drawn up an ambitious plan. It is going to build what could be the biggest mall in the world, as far as the claim goes. The location will still be Gurgaon. Called the Mall of India, this is set to be a humungous 40-lakh sq. ft. sprawling property spread over 32 acres of land. The average size of malls here is 2.5 lakh sq. ft. This one will be 16 times bigger. Parking space will be available for 10,000 cars. DLF believes that Gurgaon, where so many malls have sprung up, has the potential to become a mega shopping district in the NCR region. Will it really be the biggest mall in the world? According to a DLF spokesperson, Kajal Aijaz, the world’s largest at present is Mall of America in Minneapolis, USA, which has a covered area of 38 lakh sq ft, followed by a mall in Shanghai with 30 lakh sq ft. The Mall of India would leave these two behind in so far as size is concerned. The mall – located on the Delhi-Jaipur highway – has been designed by Jerde Partnership, which also did the job in Minneapolis and Shanghai. The construction work is expected to be over by 2007. The cost, property consultants estimate, may be in the region of Rs 1,500 crores. Source: realtyplusmag

20 FVCI realty plans stalled by RBI

2007-02-02T22:25:00.000-05:00

Alarmed by the foreign funds flowing into the Indian realty sector, the Reserve Bank of India (RBI) has pressed the panic button and is believed to have put on hold applications of nearly 20 foreign venture capital investors (FVCIs). These intend to invest an estimated $2 billion (around Rs 9,000 crore) in the domestic real estate sector. Some of the funds whose applications are pending with the RBI are: TS Mauritius, India Property Fund Mauritius, India Real Estate Fund Ltd, Primary Real Estate Investments Ltd etc. Interestingly, all the applicants have prefered to enter Indian real estate sector through Mauritius. Applications of nearly 20 FVCIs, which intend to purely invest in real estate India, have been cleared by the Securities and Exchange Board Of India (Sebi). Interestingly, RBI has already cleared around three applications approved by Sebi in the second half of 2005. These are: Dynamic India Fund III, Dynamic India Fund IV and Ascendas Property PTE Ltd. When contacted, senior Sebi officials declined to comment on the matter. But an informed source said, since it involves foreign money, it is the RBI which has to give the final approval. The total investment by such funds in the real estate sector in 2006 was registered at more than Rs 2,000 crore. RBI is concerned that if fresh applications are approved, it would add to the bubble in the sector and would encourage more such funds to come in. As per recent notification by Commerce Ministry, Foreign Direct Investment(FDI) in the real estate sector is now permitted through “automatic route”, ie., without requiring the additional approval of the Foreign Investment Promotion Board (FIPB). In spite of this, many foreign players are coming through the venture capital route because of the liberal rules and regulations governing the venture capital funds in India. As per domestic rules, venture capitalists enjoy parking their money anytime and their subsequent withdrawal at their will, which is otherwise not possible through the FDI route. Source: financial express

High net worth NRIs go long on realty

2007-01-31T00:47:00.000-05:00

What could a mall in Ahmedabad, an office complex in Hyderabad and a residential township in Baroda have in common? Answer: All three are being built courtesy funds put together by rich NRIs. Real estate sector analysts said that given the returns offered by Indian real estate, investments through informal funds floated by such NRIs are on the rise. Around $600 million may have come in through such investments in the last calendar year, analysts said. Investments through the formal channels will easily be many times more, though exact estimates are not available, they said. Said Akhil Hirani, managing partner at Majmudar and Co, a Mumbai law firm, "We get around five or six such enquiries every week, mostly from NRIs who want to put together a fund to build a property, stay through the stipulated lock-in period and then sell and exit." The investment is usually $10-25 million, with most of the funds being sourced from the extended NRI clan and friends, Hirani said. Most of the investors, he said, were interested in projects in their native cities where family or close friends could oversee the investment. Several such investments have taken place in smaller cities like Jaipur, Hyderabad, Vijayawada, Ahmedabad, Baroda and Surat where there are large NRI communities. Most of the investments are routed through Mauritius, to leverage double tax treaties. Typical investments take place in projects in which the costs are low. Both developer and investor gain, the former by easy access to capital, the latter from an attractive return on investment. Investment in Indian real estate has grown rapidly over the past three years, with annual average returns in the smaller cities going up to 50 per cent. A recent study by Jones Lang Lasalle, global real estate consultants, estimated that $ 8 billion of private equity could flow into the Indian real estate over the next 18 to 30 months. An Associated Chamber of Commerce study estimated that around 25 million NRIs in 125 countries were investing in immovable property in India. NRIs have been keen to invest in residential properties rather than commercial properties, the study said Source: business-standard.com

Surya Roshni to invest Rs 100 mn in real estate business

2007-01-29T04:40:00.000-05:00

Surya Roshni has got the board`s approval for the expansion of CFL project at a total cost of Rs 200 million. The board has also approved the incorporation of a separate segment and investment in india up to Rs 100 million in the real estate business. The above decisions were taken by the board of directors of the company at its meeting held Jan. 27, 2007. Incorporated in 1973, Surya Roshni is the manufacturer of lighting products in India. The product range includes fluorescent tube lamps, GLS lamps, energy efficient lamps and sodium and mercury vapour lamps. The company has manufacturing units at Bahadurgarh in Haryana, Kashipur in Uttar Pradesh and Malanpur in Madhya Pradesh. Shares of the company were last trading up Rs 0.80, or 1.19%, at Rs 67.85 at the BSE. (12.27 pm, Monday). The volume of the shares trading at the BSE was 27,925. Source: myiris.com

Retail, real estate plan to shop big at IIM placements

2007-01-24T04:49:00.000-05:00

After lining up investment plans of over thousands of crores in the booming Indian retail sector, corporates are preparing for the next big step, hiring the 'very precious' talent, true in every sense of the word. Retail biggies like Reliance Retail, Bharti-Wal Mart, Essar, RPG and London-based Tesco are drawing up plans to tap the top Business school campuses, which is likely to make things tough for regular big-time hiring companies belonging to finance, IT and consultancy and is certain to push up hiring costs. "Almost all major retailers, including Reliance Retail and Bharti Wal-Mart, have evinced interest in recruiting from the campus when the placement process starts in March," IIM Indore student placement secretary Shreyan M L said. The increased demand is going to give a big push to the average salary of the graduates. As Shreyan puts it, "these companies have expressed their interest in recruiting large number of graduates and this is going to push the salary offered by as much as 40-50 per cent, since finance and IT sectors would also be vying for the same graduates." And not only are Indian retail companies coming to the campuses, foreign retailers like Tesco are equally bullish on the Indian brains to manage their operations. The London-based retail giant, which is considering to enter the Indian real estate market, has already set eyes on the B-school campuses and has confirmed its participation in the placement process at IIM Calcutta, IIM Bangalore and ISB Hyderabad. The company has also made a presentation at the top-notch Indian Institute of Management, Ahmedabad, and is believed to be gearing up to participate in the recruitment process there as well. Source: http://economictimes.indiatimes.com

Banks woo NRIs

2007-01-16T04:12:00.000-05:00

NRIs are investing increasingly in real estate India. This is the holiday season abroad and so a number of NRI families are in India holidaying and investing. Smart banks have put up hoardings welcoming the NRIs to Homecoming Festivals. This is the time when banks see the maximum number of NRIs and get positive queries on NRI home loans and housing schemes and sure enough, they want to make hay while the sun shines! In Kerala, the NRI population from the Middle East gives banks and real estate agents great business during the Christmas season. Festival Banks are welcoming NRIs to open accounts and avail of the facilities. Loans up to 40 lakhs are being sanctioned by most banks (depending on the pay packet of the individual of course). The majority of the loan seekers are from the US, UK and the Middle East. The demand for property in India is so high that some banks are even opening up branches overseas to cater to this ever-increasing segment. There is however a definite risk factor in granting loans to NRIs because of the distance! //Source: sitagita.com

Diaspora raring to invest in homeland

2007-01-12T04:28:00.001-05:00

The NRIs from Punjab are eager to invest in the state in a big way, provided the Central government makes laws more investor-friendly. A section of the NRIs now living in the US and the UK agreed that situation in India with regard to setting up business has improved, but more transparency and a continuity in the policy was needed. “By the time we finalise business with one government, a new government takes over, which invariably scraps the earlier project or does not show interest. The NRIs then are left in a lurch in the absence of continuity of policies and programmes. Change of government should not change some basic investor-friendly policies. No wonder many NRIs investing in this country,” said an NRI. His views were echoed by many others. Talking to The Indian Express on the sidelines of the global investors’ conference for infrastructure development in North India at the 4th Parvasi Punjab Divas-2007 organised here today, Bobby Rekhi of Principal Cornerstone Venture Partners, California, said capital funding was lacking in North India. “In Bangalore and Hyderabad, for example, the investors do not feel this problem. But in Punjab, they are faced with capital funding. Red-tapism has decreased over the years, but it exists,” Rekhi said. Rekhi said the Punjab government should encourage NRI investors by offering to put money in projects which could be equally matched by the investors. Ali Busheri from the US said more NRIs would invest in Punjab if there was more capital venture fund available in the state. Mohinder Singh Jaspal from the UK said the Punjab government should come out with more sops and subsidies to encourage investors to come to the region. “The government should take better care of the NRIs to make them invest more here,” he added. //Source: http://cities.expressindia.com

NRIs look to emerging markets

2007-01-02T06:09:00.000-05:00

In 2007, where can NRIs get the best returns for their investments in stocks? The quick answer is, in the Bric (Brazil, Russia, India and China) countries away from the traditional markets of the US, Britain, Japan and Europe that offer more security but lower returns. In 2006, the highest returns were from the Bric countries; the other three Bric countries had higher returns than those from India! Since these four economies are on sound growth path, it is reasonable to assume that their stock markets, barring any catastrophe, will keep growing in 2007. Since money flows instantly to obtain the best returns, the entire telecom-linked globe is one investment market today. So bankers and financial advisors keep tracking every economy for best investment returns. Some developing economies such as Hong Kong, Singapore and Mexico also offer healthy returns. In this scenario, 25 million NRIs living in over 110 countries have to be alert where their funds can get the top returns. "A crucial factor is the period of staying invested," he said. "An analysis of historical data shows that the probability of losing money diminishes greatly as we increase the investment horizon. What is risky over a one-year period may not be so risky over a five-year period." "The negative return in a given year is averaged out by positive returns in another year. But the time horizon of investment must be looked into within the overall economic scenario. Equity investments over a short period are always risky and one could lose or make money depending on when one exits. 'Finally, does the NRI investor have the time to research the markets and the stocks he should be investing in?' asks Durgan, who specialises in mutual fund investments for NRIs. //Source:http://www.gulfnews.com/business/

India property exhibition explores new destinations in the Gulf

2006-12-26T03:52:00.002-05:00

The Confederation of Real Estate Developers Association of India (CREDAI) and Maharashtra Chamber of Housing Industry (MCHI) have organised an exhibition on Indian property in Dubai at the Dubai Renaissance Hotel from December 7-9, 2006. India Property - 2006 Gulf aims at providing accurate information to NRIs on real estate investment options back home in India. Leading developers from places, like Mumbai, Navi Mumbai, Pune, Delhi, Bangalore, Kolkata, Gurgaon, Goa are participating. There are an estimated 1.5 million Indians residing in the Gulf countries of Oman, Bahrain and UAE with a sizeable NRI population consisting of professionals such as doctors, engineers, bankers, finance experts, managers. Many hold middle or senior management positions in the corporate sector. Today, NRI’s in the Gulf have a high per capita income but with limited investment options. Indian Real Estate is one sector that offers high potential. Mr. J.S. Augustine Co-Chairman, International Exhibitions said, “The entire Gulf region is waiting to be tapped. Now we have begun with Oman and Bahrain and will soon be looking at Saudi Arabia, to provide a platform for NRIs to make their choice of a home back in India”. Augustine adds, “The basic idea of staying far away from India to earn is to provide a good house and a contemporary lifestyle to their families. We are providing NRIs an opportunity to realize their aspirations.” Sharing his views on India Property 2006, Gulf, Mr. Nainesh Shah, Chairman, International Exhibitions, MCHI, said, “Indians in the Gulf have a high per capita income and a strong propensity towards saving and investments. But opportunities for Investments in Gulf real estate are constrained. Hence NRI’s find it safer to invest in real estate back home. India has a high GDP growth rate, making it one of the best investment destinations in the world.” “Indians living in the Gulf generally have a dream of buying a property back home and are looked upon and respected for their hard working nature and sense of enterprise. This properly exhibition gives them the perfect platform of fulfilling their dreams as well as making a sound investment decision” added Mr. Shah. Adding further Mr. Zubin Mehta, CEO, MCHI, said, “The real estate sector in India is booming which has a direct impact on the infrastructural development of the country. Investments in real estate has dual benefits for the investor as his investments appreciate over a period of time, giving him the best returns possible, and also helps in the overall development of the country. //Source:http://www.cybernoon.com/

Rockman Projects plans Rs 6k-cr SEZs

2006-12-18T01:01:00.000-05:00

Delhi-Based real estate group Rockman Projects is planning to set up three SEZs in the northern region with a proposed investment of Rs 6,000 crore. The company has tied up with Ernst & Young, CB Richard Ellis and Jurong International of Singapore for technical collaboration. The company is slated to float an IPO by March next year to raise funds for investment. With all clearances got, the company plans to set up a multi-product SEZ at Jaipur, a multi-service SEZ at Gurgaon and a textile cluster in Ludhiana. Jurong International will look into the set up design and master plan of the three SEZs. While nothing is finalised the company is in talks with Jurong International for picking up a stake in one of the three ventures. Ernst & Young will provide advisory services to the firm on the professional management of the SEZs and will also help the projects seek participation from other players. On the other hand CB Richard Ellis will look into the financials of the project including the feasibility study and raising funds through both foreign and Indian investors. So far the company has invested Rs 600 crore in the acquisition of land in the three states. While the land has been fully acquired in Gurgaon, the transfer formalities for Jaipur and Ludhiana are yet to be done. The SEZ in Jaipur will be spread over 1,012 hectares and will be a located on NH8. The Gurgaon SEZ will be spread over 1,615 hectares and will also be located on NH8, while the Ludhiana SEZ is comparatively smaller with a spread of 850 hectares. Most of the land purchased has been from individuals and is wasteland. The company has got all the requisite 36 approvals for the three SEZs and is likely to start development work by March next year.

Stamp duty to pinch less in property

2006-12-11T00:35:00.000-05:00

Stamp duty on sale of properties may come down significantly with the central government proposing that the levy should be imposed only on capital appreciation. If the proposal is accepted, buyers will pay stamp duty only on the difference between the transaction value and the previous sale of the property concerned. As of now, stamp duty is paid on the entire value of the property concerned. The proposal is likely to be taken up by the Cabinet shortly. If implemented, stamp duty on properties could be imposed only on a “value-added basis”. This will ensure that transaction costs are not too high, providing no incentive for evasion. However, implementation of the proposal will depend on its acceptance by the state governments. If a developer buys a piece of land worth Rs 10 lakh and constructs a house on it and sells it for Rs 25 lakh, the stamp duty — according to the proposed policy — will only be on Rs 15 lakh, which happens to be the difference between the current transaction and the purchase value of the land. The move is part of the National Housing and Habitat Policy, which is to be considered by the Cabinet soon. “The policy will favour group housing needs in a big way, as stamp duty will be imposed on a value-added basis at the stage of raw land and first sale,” said a senior government official. The government feels the policy will go a long way in addressing the inadequacies which dog real estate transactions. At present, due to the absence of any rules guiding the property transaction, developers charge stamp duty from end users according to their whims and fancies. In the past, confusion over stamp duties was rampant, particularly in the development of housing colonies in Dwarka and Gurgaon. Around that time, various consumer groups had raised a strong demand for rationalisation of stamp duty in case of resale of properties. Developers said the move was welcome and it will help in checking evasion of stamp duty. “The move will prompt group housing societies to put a stop on misdeclaration of property value, which is being done by developers in collusion with government agencies,” said DLF director Rajeev Talwar.

'India Property' show unveils real estate options back home

2006-12-03T22:51:00.000-05:00

India Property-2006 Gulf, the three-day official real estate exhibition from India, was inaugurated yesterday at Sheraton Hotel by Ashok Kumar Attri, Indian ambassador to the Sultanate. The exhibition, featuring over 15 leading real estate groups from Mumbai, Navi Mumbai, Pune, Delhi, Bangalore, Kolkata, Gurgaon and Goa, hopes to tap the pockets of the non-resident Indians living in the Gulf region. The Indian ambassador also released the exhibition catalogue — India Property — on the occasion. The exhibition, according to officials, aims at providing accurate information to NRIs on real estate investment options back home. Organised by the Confederation of Real Estate Developers Association of India (Credai), the official body of the Indian real estate industry; and Maharashtra Chamber of Housing Industry (MCHI), India Property-2006 Gulf exhibition will also be held in Bahrain and Dubai in the next few days. Speaking to the Times of Oman, Zubin Mehta, chief executive officer of Maharashtra Chamber of Housing Industry, said that Credai had organised a similar exhibition in 2003 which had received a very good response. Based on the past success story and recent real estate trends in India, Credai decided to organise this second exhibition here, informed Zubin. "This is the right time for people for Indians to buy property as the market is good. Apart from the first timers, those who are looking for a second and third home as well as those who are looking for weekend retreats or even just as an investment, can find many retail properties in this exhibition," says Zubin. "As the second largest sector after agriculture in India, the real estate sector is a major contributor to Indian economy and with falling interest rates, it is as good a time as any for the domestic investor," says Zubin. According to Zubin, Credai also has checks and balances to prevent any real estate fraud like delay in possession or possession not given. Among the exhibitors is Akar Creations Private Limited from Goa, the tiny and beautiful coastal state located just an overnight road journey from Mumbai. Akar Creations, which has been in the real estate business since 1982, is exhibiting its Aquamarina project, worth approximately RO3.4 million and located at Colva in the southern part of this state. Talking about the property, Avinash Borkar, managing director, said that the project consisted of two apartment buildings, 31 row villas, nine independent villas and 20 shops set in 13,500 square metres of land close to the beach. "There has been a lot of demand from Goans in the Middle East and Indian citizens from Bangalore, Mumbai and Delhi," informs Borkar. The properties range from RO18,000 for a single bedroom apartment to RO63,000 for an independent villa. //Source: menafn.com

Mall space dealers reap sealing profits

2006-11-27T01:12:00.001-05:00

Jaswinder Singh Chauhan’s face breaks into a broad smile as he greets potential clients coming in thick and fast to his real estate firm in South Extension and willing to pay more than ever. The despair of traders struggling to save their illegal establishments from being sealed can only be matched by the delight of those selling floor space in malls to those who have given up the fight. “Malls in and around Delhi have never had it better,” Chauhan said. Floor space in malls in Gurgaon now costs more than two times it did four months ago. Before the sealing drive began in July, a square foot in a Delhi mall cost between Rs 10,000 and 12,000, depending on which floor the slot was on and the proximity to escalators. Now it costs between Rs 25,000 and 30,000, said Ranjeet Kumar, a Gurgaon-based real estate agent. As the sealing began, the rates rose slowly, climbing to Rs 15,000 a square foot by August. With the Supreme Court appearing to allow the Centre’s attempt to stop sealing through the Delhi Special Laws Act, a brief period in August saw a fall to the old rates as traders stayed away from the expensive malls. However, the court later made it clear that it would not allow the illegal establishments to continue . The capital, the Municipal Corporation of Delhi has told a series of committees, has commercial complexes to accommodate one lakh est-ablishments. But at least two lakh traders were illeg-ally operating out of resi- dential areas. So malls — both existing and upcoming, like the one in the south and another in the west — are the only option for those looking to shift. “The sealing started with big traders in posh A and B category colonies. These are also the people who can afford to shift to malls,” Chauhan said. Many who bought space at one or the other of the eight malls in Delhi at comparatively cheap rates when they came up — around Rs 8,000 a square foot a year ago — are now selling their slots for three times the money they had paid. But not all mall owners are happy. Randhir Rajput, who wants to sell his 40-square-foot space in a Saket mall, fears his business prospects may be hit by the “threat from the east”. He is not referring to China but to the east of Delhi in Noida, where five malls are coming up, offering space much cheaper at Rs 10,000 a square foot. People who have to shift offices, and not shops, and do not mind the extra travel, may move to Noida, he worries.

Sealing at M-G Road, traders go for distress sale

2006-11-20T01:41:00.001-05:00

MCD sealing squads today cracked down on commercial properties flouting land use norms in the high-profile Mehrauli-Gurgaon road, where fashion malls MG-1 and MG-2 were demolished in February this year. All the furniture showrooms, factory outlets of various sports and clothing brands on the road were sealed as part of the drive. Seeing the squads approach, shopowners went in for distress sales right outside their establishments. Customers who turned up during the sealing said they managed to get great bargains. "We got two beds and a dressing table at a discount of Rs 3,000,'' said Vishwajeet Thakur, a Gurgaon resident. At an interior accessories showroom, tiles and bathware being sold at a 50 per cent discount and many a policeman was seen buying them. "We haven't looked up another shop. All this material will go waste if not sold now,'' said an employee of Regency Lite and Bath. MCD sources said 261 units were sealed on the stretch between Sultanpur village and Ayanagar. Shops targeted include CRC Furniture, Red Correl, the Nasha pub, a DSIDC shop, an artifacts showroom, a restaurant, and the outlets of Reebok, Adidas, Lacoste and Nike. Two MCD squads, aided by high security, had started sealing together from two end of the road - one from Sultanpur to Gurgaon and the other from Ayanagar to Mehrauli - leaving no opportunity for the shopowners to congregate and protest. But traffic on both lanes was held up for most part of the day. Trucks carrying security personnel and furniture from shops added to the chaos. In a separate sealing drive, the MCD today sealed two properties in Qutub Institutional Area for the Delhi Development Authority (DDA).

DLF Plans IPO in First Quarter of 2007 After Resolving Dispute

2006-11-13T02:28:00.000-05:00

Indian billionaire Kushal Pal Singh's DLF Ltd. plans to revive its stalled initial public offering in the first quarter of next year after resolving a dispute with some shareholders, people involved in the sale said. DLF may raise between $2 billion and $2.5 billion, the three bankers said, asking not to be identified because details are confidential. The New Delhi real estate developer in August shelved a planned December IPO after regulatory documents lapsed. Regulatory delays, following a complaint by shareholders, and investor concerns about DLF's valuation hindered plans to complete this year what the company hoped would be India's biggest share sale, the bankers said. DLF is betting a rally in India's benchmark stock index to a record and a more optimistic outlook for projects will lure investors. ``I don't see a problem in terms of valuations,'' said Dipak Acharya, who helps manage the equivalent of $28 million at BOB Asset Management in Mumbai. Real estate and construction companies are doing well.'' DLF said New York-based Cushman & Wakefield, the world's third-largest commercial real estate broker by revenue, valued 228 million square feet of land owned by the company in 64 locations at as much as 1.07 trillion rupees ($23.9 billion). DLF is confident of attracting investors as it has more projects on hand than in May, when it filed the share-sale document, said Saurabh Chawla, DLF's senior vice president for finance. Liquidity ``There is no dearth of liquidity in the world market as of now, especially for India,'' Chawla said in an interview last week. Real estate is a ``must-own'' asset for most funds worldwide, he said. He declined to say how much the company is seeking to raise from the sale of shares. India's key Sensitive index has surged to a record, gaining 41 percent since the start of the year. Raising as much as $2.5 billion would value DLF and its subsidiaries at about $20 billion and investors would pay $450 million for every dollar of profit. DLF had net income of 1.99 billion rupees in the year ended March 31. ``The sector is interesting but maybe this company is not the one, it's not cheap,'' said Jon Thorn, who manages $250 million of assets at India Capital Fund Ltd. in Hong Kong. ``How do you value a property company in a market that doesn't have any large property companies to value it against? There are just too many questions.'' Sale Managers DLF hired Merrill Lynch & Co. and billionaire Uday Kotak's Kotak Mahindra Capital Co. to manage the share sale. UBS AG, Morgan Stanley, Enam Financial Consultants Ltd., ICICI Securities Ltd., Citigroup Inc. and SBI Capital Markets Ltd. will also help sell the shares. Investors would pay about $51 million for every dollar of profit in Parsvnath Developers Ltd., a real-estate developer based in New Delhi that plans to raise as much as 9.96 billion rupees selling shares this month. Parsvnath had net income of 1.07 billion rupees for the year ended March 31. Some minority investors said they missed the chance to buy convertible bonds as they didn't receive notice from DLF. The company, previously known as DLF Universal Ltd., will meet shareholders in an extraordinary general meeting tomorrow to allow the investors to subscribe to debentures offered in December last year, according to a notice on the company's Web site. The shareholders can convert the debentures into equity, which will entitle them to bonus shares. DLF plans to submit offer documents with regulators in December after getting the necessary approval, said Chawla, who is based in Delhi. Issues Resolved Some shareholders, including Kishor Ghiya, filed a complaint with the market regulator on June 6 that they weren't informed about the debenture offering last year, depriving them of an opportunity to own more stock when DLF converted the bonds into shares in March. ``Our issues have been resolved,'' Ghiya, who owns 3,287 shares in DLF, said in a phone interview from Rajkot in Gujarat. ``I don't see any reason for any problem with the share sale.'' According to a document filed with the regulator in May, DLF planned to sell 202 million shares, of which 187.1 million were new stock. It had planned an additional 17 million on demand, bringing the sale to a 12.77 percent stake. The company may change the number of shares it will offer after Nov. 14, the bankers said. DLF has yet to make a decision on the size of the offering, Chawla said. DLF's share sale may exceed the 105 billion rupees ($2.3 billion) raised by the Indian government from the sale of a 10 percent stake in Oil & Natural Gas Corp., the nation's biggest explorer, in March 2004, DLF's Chief Financial Officer Ramesh Sanka said on April 20. Singh, his family and holding companies it controls own 98.66 percent of DLF, according to the documents filed in May. //Source: www. bloomberg.com/apps/news?pid=20601087&sid=aJD31aiY.AHc&refer=house ---------------------------------------------------

Personal, real estate loans will be dearer.

2006-11-02T04:59:00.000-05:00

In the Monetary Policy Review on Tuesday, the Reserve Bank of India (RBI) raised the repo, the rate at which it lends to banks, by 0.25 per cent to 7.25 per cent, while keeping the reverse repo, the rate at which it borrows from banks unchanged at 6 per cent. " Banks having liquidity problem may charge a higher price for personal loans, real estate, equity market, consumer goods loans," Oriental Bank of Commerce Executive Director, Allen C A Pereira, said. Welcoming RBI's policy stance, he said repo rate hike signals that productive sectors should get sufficient credit while non-productive sectors should pay a little more. Those banks having less liquidity will have two options before them -- to mobilise resources from public through deposits or borrow from the Reserve Bank. Many weaker banks borrow from RBI as it is not easy to mobilise adequate funds from public due to competition with bigger banks and the hike will increase their fund cost. Punjab National Bank Executive Director K Raghuraman said RBI's repo rate hike is a caution about credit growth, specially for banks who are aggressive toward market. " Those banks borrowing from RBI to meet liquidity demand may jack up interest rates," Raghuraman, said. Both PNB and OBC said they see stable interest rate scenario and may not raise lending rates as they are comfortably placed liquidity wise. State Bank of India on Tuesday said the central bank's mid-term credit policy review would help keep interest rates stable, which in turn would benefit the crucial infrastructure sector. " We are very happy with the fact that interest rates will remain stable for some time, which will enable the infrastructure sector to take off," SBI Managing Director T S Bhattacharya, said. Bhattacharya also hailed the RBI's move to increase the External Commercial Borrowings (ECB) limit by $250 million, which would help the infrastrucuture // Source: timesofindia.indiatimes.com //

SEZs enter crucial phase

2006-10-30T03:51:00.000-05:00

WITH MORE than 230 of them sanctioned so far, special economic zones (SEZs) are no longer points of academic discussion in India. The implementation stage was always expected to be contentious, much more than the controversies surrounding the conception of SEZs. This certainly catches NRIs eye to jump in india investment and make real time money in real estate boom. Land acquisition for the zones was always expected to pose problems but the magnitude of protests seems to have caught the authorities by surprise. Besides land, there are other contentious issues connected with the SEZs. These include preferential tax treatment (leading to revenue loss for the exchequer) and the fear that they may accentuate existing regional disparities. The case for a uniform land acquisition policy, with resettlement and rehabilitation aspects thrown in, has never been stronger than now. But coming under State jurisdiction, formulating, leave alone implementing, such a policy by the Centre becomes impossible. Acquisition of farmland, especially for the purpose of developing SEZs (or for that matter any large industrial unit), is bound to be an emotional issue. ------------------------------------------------------ Source://The Hindu//

Indian real estate rush lures foreign investors...

2006-10-06T23:03:00.000-05:00

India will have at least 50 property-related initial public offerings in the next year as the real estate industry booms, according to Anish Jhaveri, the head of equity sales at HSBC Holdings in India. "With the opening of the real estate sector, there's a lot of need for funds," Jhaveri said in a recent interview in Hong Kong. "The government has been giving very proactive support to the whole sector." The real estate market in India is worth about $12 billion and is growing at about 30 percent a year, Ernst & Young said in a report last month commissioned by the Federation of Indian Chambers of Commerce and Industry. Rising incomes, easy financing and population growth are driving demand for housing and luring overseas investors. "The appetite for real estate IPOs will be there," K.K. Mital, chief investment officer at Escorts Asset Management in New Delhi said a phone interview Friday. "The young work force is looking for real estate investment, and the financing is available - the banking system is supporting this growth." Jhaveri said that venture capitalists and overseas investors were poised to invest over $5 billion in the Indian real estate sector, without providing more details. "People are seeking more clarity" on possible changes to property regulations before investing, he said. His forecast takes into account the possibility that India could allow real estate investment trusts, or REITs, to invest in the nation's property industry. Still, of the 50 real estate related IPOs that he predicted would take place in the next year, he only expected a "small" number to be REITs. In the past year, India had eight initial share offerings by engineering and construction companies, which raised $478 million, according to Bloomberg data. That compares with the six initial public offerings raising $304 million in the previous 12-month period. Indian billionaire Kushal Pal Singh's real estate company, DLF Universal, is seeking to revive the biggest Indian share sale once regulators decide on a complaint by shareholders. The New Delhi-based company plans to submit offer documents to regulators, paving the way for an offering by early December, Saurabh Chawla, the finance vice president of DLF, said in a phone interview Friday. India is short of 20 million housing units, according to a study by Housing Development Finance. That shortage will get worse, according to UBS analysts, citing the growing population and increasing affluence. Asia's fourth-largest economy grew 8.9 percent in the three months to June from a year earlier. ------------------------------------------------------------------------ Source://International Herald Tribune

How to buy a mall...

2006-09-11T22:16:00.000-05:00

A year ago, Pune-based Manish Sahni was scouting for opportunities to invest in real estate. After weighing various options, he bought 60,000 sq ft in Nucleus Mall by Vascon Builders, at Rs 4,500 per sq ft. At Rs 40 per sq ft per month, a big retail chain pays him an annual rent of Rs 2.88 crore. His annual return on investment: 10.7 per cent. Since his ground floor space has been leased for 10 years, Sahni feels he has made an investment that will earn him steady long-term returns. Sahni’s scale may be out of reach for most investors, but his returns aren’t. Its sure short real estate india boom and the winner is the one who make the right decission According to DTZ Debenham Tie Leung, a real estate consultancy, the number of malls is set to rise from the current 50 to 500 by 2010. An estimated 50 million sq ft of organised retail space will be added over the next five years. This will largely be led by young and affluent consumers across the country preferring to shop in an organised retail environment. For high net worth investors, therefore, malls present an attractive investment opportunity. But with rates ranging from Rs 5,000-30,000 per sq ft in different cities, your net worth needs to be really high, though smaller spaces are available too. Income, appreciation, or both? Before investing, ask yourself whether you are looking for capital appreciation or regular rental returns. According to Suryavir Singh, Assistant Chief Manager, Sahara Infrastructure and Housing, “If you are looking for quick capital appreciation, invest in land in upcoming suburbs and townships. But if you are looking for regular, long-term rental returns, malls are a good option.” Sahara developed one of the first malls in Gurgaon and has recently launched another in Lucknow. According to a report by real estate consultancy Jones Lang Lasalle, rental yield from malls is in the range of 10-12 per cent across the country. This is comparable to the return from office space (9.5-11 per cent), but is much higher than the rental return from residential space 4.75-6 per cent. In addition to the returns, another advantage of an investment in malls is that the lease agreements are long-term ranging from three to nine years. If you buy space in a high-quality development and manage to lease it to a good brand, you have locked in your returns. Usually, lease agreements also stipulate a 15 per cent escalation in rental every three years, which improves your yield on money invested. However, not every mall will be a winner. In many, shops will remain vacant, footfalls will be low, and sales abysmal. As an investor, you need to do your homework so that the mall you invest in is a winner. Which mall? Whether a mall will do well is closely linked to the population of its catchment area (the area from which it expects its customers), per capita income, how this income will grow in the coming years, and what percentage of this income will be spent on retail and entertainment. These factors determine how much retail space, and hence how many malls, the area can support. Make sure the mall you invest in is situated in a market where retail expenditure exceeds the amount of retail space developed so far. Usually, early movers do well. They corner the best brands, and hence attract the most customers and sales. Avoid saturated markets, say, where there are 10-12 malls within a 4 km radius. Sometimes, a clustering of two or three malls at one place can be an advantage. The whole area begins to be perceived as a ‘shopping destination’ and attracts higher customer traffic. But if the number of malls rises beyond a critical point, the same brands open stores in neighbourhood malls. (That’s because the number of retail brands is limited.) In that case, one mall merely cannibalises the sales of another. Take New Delhi’s Saket. Here, there are three malls being built, one each from DLF, Select and MGF. Says Pranay Sinha, CEO, Select Infrastructure which is developing Select Citywalk: “Most malls have so far been developed in the suburbs, but not in south Delhi or south Mumbai, where purchasing power is among the highest in the country.” The first few players who begin operations in south Delhi are likely to do well. Similarly, Sahara group’s mall in Lucknow, Sahara Ganj, which began operations in November 2005, has done well because it is the first large mall in the city. It also enjoys the advantage of being situated in East Hazratganj, Lucknow’s prime commercial area. According to Singh of Sahara, with markets in grade A cities and their suburbs getting saturated, grade B and C towns might offer good options to mall investors. Who’s your customer? Even if you get the location right, whether buyers throng your mall will depend on another crucial factor its retail mix or the selection of brands in that mall. As Sinha of Select says, “This determines who walks into your mall.” The mall developer must be clear about who are his target customers, what those customers buy, and then get those brands into the mall. Says Aditya Sikri, CEO of Spiceworld, a Noida-based mall: “The process must be very research driven.” Before deciding on its retail mix, Select Citywalk surveyed the women of south Delhi to find out where they shop. One of the retailers whose names appeared frequently was L’Affaire, a saree shop in GK, to which even NRIs flock during their visits to India.So Select invited L’Affaire to set up a shop in their mall. A common mistake investors make is to buy the property or space at the mere announcement of a project. When space is sold, the mall loses control over its retail mix, which hurts the investment post handing over. Says Manoj Motta, GM of Mumbai-based Inorbit Mall, Malad (W): “Selling off space creates a fixed brand mix, which in turn creates monotony and staleness.” Is the builder interested? Another factor that determines whether a mall will succeed or not is the revenue model that the developer follows. Says Pankaj Dayal, CEO, NAI Collaborators, “Find out if the builder wants to sell space and exit the day the mall becomes operational. Or will he take responsibility for running the mall?” Adds Sujit Kumar, CEO, Aeren RJ Group which is developing a 2 million sq ft mall, one of the largest in the country, at Ludhiana: “Fragmented ownership can sound the death knell of a mall.” There are two reasons for this. One, once space is sold the developer cannot control who sets shop in the mall. Two, if the developer makes an early exit, there is no central entity that will take responsibility for maintenance and promotion of the mall. Together, these factors play a big part in ensuring the success of the mall. Some malls like Aerens’ Festival City Mall in Ludhiana are only leasing space and have entered into a revenue-sharing arrangement with retailers. However, since developers need early returns on their investments, sale of space does happen. A number of models have emerged by which developers try to get capital without fragmenting the ownership too much. Says S.P. Nair, vice president of Pune-based Vascon Builders: “We struck a joint venture with the landowner so that he became part investor in our project.” Mumbai-based Satra Properties, which will open its first mall at Vile Parle near Diwali and whose three other malls will be operational by end-2007 has opted for a mixed 50:50 lease and sale model. Says Praful Satra, CMD: “Outright sale allows us to recover our investments to some extent, while leasing allows us to change the brand-mix as and when we desire.” Some developers, after leasing out the mall fully and making it operational, exit by selling to a single investor. Once real estate mutual funds (REMFs) become operational, they will buy up entire malls, offering developers another exit option. As an investor, appreciate the importance of centralised control, and enter into malls where ownership is not highly fragmented. What’s his track record? Before investing in a mall, visit the developer’s earlier projects to see how much acumen he has at developing malls. As Motta of Inorbit says, “Verify the credentials of the mall developer and that of the management.” Make enquiries about the developer’s record for timely deliveries, and whether the final product meets promised standards. In addition, make sure the builder has complete and unencumbered title to the land on which the mall is being developed. Says Singh of Sahara Infrastructure and Housing: “The developer should have transferred the land to his own name before he begins sale of space.” When should you buy? Should you invest early, when the developer has just announced his mall, and very little is known about it? The only basis you have then for making the investment is the builder’s track record and your knowledge of the location. The retail mix is not clear, so your investment risk is greater. But at early stages, prices tend to be lower, so the return on investment, if the mall does well, would be high. On the other hand, if you delay your purchase and enter closer to the day of launch (by when most the space would be leased out), then you are making a more secure investment. But since your purchase price will be higher, your returns are likely to be lower. Your risk appetite should determine at which stage you choose to make the investment. Also, stay out of markets where speculation has driven prices too high. Remember, the more you pay for the asset, the longer it will take you to recoup your investment (through rentals). How risky is it? Finally, investing in a mall is not a sure-fire recipe for high and assured returns. For your investment to do well, enough customers must travel to the mall, and walk-ins must translate into sales. On this count, the decline in many malls has already begun, where retailers, after a year or two, have shut shop and moved out. And investors are left holding empty spaces. ----------------------------------------------------------------- Source://http://www.expressestates.in/full_story.php?content_id=73582

Foreign Investment’s Role In Indian Realty

2006-08-29T23:58:00.000-05:00

The question of the entry of foreign investment in Indian real estate has assumed importance. Government relaxation of norms in this regard notwithstanding, there are doubts whether everything is going fine. Dr BP Dhaka, COO, Parsvnath Developers Limited, Sushil Mantri, MD, Mantri Developers and Ramesh Sanka, Group CFO, DLF Universal Ltd, elaborates their views on the future prospects, good or bad, of FDI in this area of activity or about the kind of impediments that still prevail. Q. How conducive is Indian real estate market today for foreign investment? BPD: India is in the midst of a real estate boom. The sector has witnessed significant transformation in the past decade from small unorganized family-owned realtors to large scale organized real estate developers and urban infrastructure conglomerates. Real estate companies are tying up with the big business entities in retail, entertainment, hotel, and service industries like BPO and technology parks. Customer awareness reflected in preferred style of living, the inclination of large number of corporate houses to enter the realty market and policy support by the Centre makes environment just appropriate for FDI to pitch in. SM: I feel the Indian market is still not ready because, after the closure of our deal with Morgan Stanley which made foreign investments worth Rs. 300 crores in our firm following government relaxation of norms relating to FDI, no other such deal has taken place at the company level in the entire country. It is only for specific projects that a few deals have been made. I think it may take some time for developers to enter into similar deals, as much transparency is required in the entire procedure. I think our Indian real estate companies are not yet ready for that because every real estate company operates with several companies, and all this reorganizing and restructuring may take some time and only then will companies opt for FDI. The future doesn’t look bright for small or even medium players in the market. Only the big ones will survive. Medium players will need to go in for tie-ups with one another in order to exist. We were also looking at this opportunity of becoming a larger entity and had two options --- either go in for strategic partnership with some foreign developer or opt for financial assistance. Confident that we had enough strength to execute the managerial capacities, we chose the second path. RS: India’s real estate market today for foreign investment is very conducive. The transparency level has improved. Today, more and more players, like Infosys, are foraying into this sector. Now the market is in an organized form. Real estate has got recognition as an industry. The change and the transparency brought in by the government in foreign investment policies has opened doors for NRI to invest in the indian realty market. ------------------------------------------------------------------------- source://http://realtyplusmag.com/interactive_fullstory.asp?interactive_id=26

ULCA: Need for Repeal

2006-08-21T06:23:00.000-05:00

While the Urban Land Ceiling Act (ULCA) has been scrapped in most states in India, Maharashtra continues to follow the archaic laws that developers around the state feel should be scrapped as soon as possible. The Act was enacted in 1976 to impose a ceiling limit on vacant land with private holders and use it to house the poor in urban areas. According to this Act, an individual could not own more than 500 sq. metres in a Grade A city, and not more than 1,000 sq. metres in a Grade B city. The intent was that the government would acquire all the surplus land at Re 1 per sq ft and would use it for public purposes. But most of the surplus land is stalled in litigation, and over a span of 27 years since the enactment of the legislation the government was able to acquire barely two to three per cent of all the land it seized. People with influence got the seized land exempted under various provisions. Since so much land was tied up in litigation, there was a shortage of land and property prices went up drastically. The excess land is taken over by slums and corruption and malpractices are the order of the day. Developers across the state feel that once the act is scrapped, the state will have several benefits; a large quantity of land held up shall be freed for development, property prices will stabilise, and this in turn will help increase the housing stock. The revenue due to increased development will be available to the government and so on. Rohit Gera, Executive Director of Gera Developments in Pune says, "No one is benefited from this act - neither the developer nor the buyer. Instead, these days the rates are so high, a common man cannot afford to buy the properties in good locations." Once there is adequate supply of land, the property prices will automatically stabilise. " He says, "If the act is repealed there are possibilities of property prices reducing by 10 per cent to 15 per cent (depending on the area) in Pune." According to Sunil Mantri, Chairman, Mantri Group , "Initially when the act was passed in the parliament, the intention was to provide low-cost housing for common people with the surplus land to be handed over to the government for public purposes. However the purpose of the act was never followed." However, Sanjay Deshpande, Joint M.D of DSK group in Pune feels, "The ULC Act should not be scrapped totally. Instead there is a need for minor modifications in the present act. Once the act is scrapped there will tend to be a monopoly in the market that will affect the property prices. Instead of scrapping the whole act there is a need for a small correction. Most developers feel the ULC Act should be repealed in the state. The question is, How soon will the government act? Source://http://epaper.timesofindia.com/Daily/

Smart and compact

2006-08-21T06:06:00.000-05:00

Today kitchens are as important a part of the house as the living or the bedrooms; they were at one time treated as leftover spaces and done up with little or no imagination. Easy accessibility to every function and making the optimum use of the available space with lots of storage are always the key elements to this domain. Several options are possible if the available space is large enough - like an "U " type or an "L" type counter space or altogether an "island kitchen' - either opting for the custom-made conventional type or going in for a modular one with a configuration of different modules. Other than that it could be plainly be a mix-and-match of both. While accessories and gadgets ranging from hobs, dishwashers to dispensers always form part of a modern house, the right placement of these, each within reach, are important factors in designing and planning a kitchen. With modern technology becoming a part of our daily lives and ever- increasing space constraints with room sizes shrinking, the real challenge comes in designing smaller spaces which meets the requirements of the end user. Development of newer kitchen concepts where one can outright buy a readymade kitchen of the individual's choice in a jiffy without going through the laborious chores of constructing one has opened up a new arena for the consumers. To give an example of one such innovative kitchen that is yet to hit Indian homes - especially designed for studio or single room apartments - is the 'Compact Smart Kitchen', which can be tucked away in any corner of the living or dining room. Circular in plan it measures 1.8m in diameter approx and 2.30m in height. This compact unit houses practically all the electronic gizmos and gadgetries ranging from microwave, a cooking range to a small built-in refrigerator plus a series of shelves and closed compartments for storage of bottles to jars and bowls plus an enclosed dish rack. Finished in laminate the circular counter top also accommodates a small sink. When not in use the circular kitchen can be closed with a sliding mechanism almost to look like a piece of furniture to complement the décor of the room. The time is not far when this latest rage will appear in our Indian homes.

3i in talks to invest in Piramal fund

2006-08-02T06:53:00.000-05:00

3I GROUP, the UK-based private equity player with holdings in more than a thousand companies all over the world, is in advanced stage of negotiations to pick up an equity stake in the Ajay Piramal group's realty fund Indiareit, according to sources in the company. Indiareit is a close-ended domestic venture capital fund. 3i is in advanced talks to pick up stake in Indiareit, and a formal announcement is expected shortly, say sources. Private equity funds have been showing an appetite for investing in real estate venture capital funds. Morgan Stanley has recently picked up stake in a Delhibased real estate venture Al pha G Corp for Rs 292 crores. 3i's investment would mark the private equity firm's entry into the real estate segment. The value of 3i's investments and the quantum is not known. 3i officials were unavailable for comments. Real estate venture capital funds are instruments whose objective is to invest in projects within the ambit of real estate, focusing on long-term capital appreciation. The fund will participate by means of equity instruments of unlisted companies such as special purpose vehicles for specific sources. Indiareit will invest in projects typically within Rs 30 to 60 crore with an average maturity of three to five years within the fund life of seven years. 3I GROUP, the UK-based pri- vate equity player with hold- ings in more than a thou- sand companies all over the world, is in advanced stage of negotiations to pick up an equity stake in the Ajay Pi- ramal group's realty fund Indiareit, according to sources in the company. Indiareit is a close-ended domestic venture capital fund. 3i is in advanced talks to pick up stake in Indiareit, and a formal announcement is expected shortly, say sources. Private equity funds have been showing an appetite for investing in real estate venture capital funds. Mor- gan Stanley has recently picked up stake in a Delhi- based real estate venture Al- pha G Corp for Rs 292 crores. 3i's investment would mark the private equity firm's en- try into the real estate seg- ment. The value of 3i's in- vestments and the quantum is not known. 3i officials were unavailable for com- ments. Real estate venture capi- tal funds are instruments whose objective is to invest in projects within the ambit of real estate, focusing on long-term capital apprecia- tion. The fund will partici- pate by means of equity in- struments of unlisted com- panies such as special pur- pose vehicles for specific sources. Indiareit will invest in projects typically within Rs 30 to 60 crore with an aver- age maturity of three to five years within the fund life of seven years. Source://epaper.hindustantimes.com

India’s bankReal Estate: An investment opportunitying sector aid Real estate growth

2006-06-29T01:35:00.000-05:00

Banking in India is undergoing a stage of metamorphosis as the economy of the country takes a giant leap from being a hard-core manufacturing sector inclined economy to a burgeoning service sector economy. And along with the changing economy has evolved the new genre consumers who are opting for innovative financial products and customization of services making the banking sector sit on the edge. Innovative offers and promotion nowadays are no longer for competitive advantage but a norm. Analyzing the status of finance in India, it has been found that the majority of the players in the banking and finance sector are concentrating more on the Retail sector as it is considered to be a potential goldmine which is expected to grow at a rate of 30%. Also, the real estate boom has opened up doors for banking in India. As competition intensifies between financial institutions like ICICI and HDFC which focused mainly on the banking and insurance sectors of the country and are now turning to more lucrative opportunities for investment targeting on the basic need for modern real estate. This has brought about an array of investment opportunities for buyers and developers who would want to capitalize on this growing opportunity. And as funding for property investments becomes easier with sector of finance in India becoming more liberal, India is currently one of the most exciting countries when it comes to real estate investments and is fast becoming the hottest country in Asia to invest in. As investments continue in both residential and commercial sectors, the housing finance industry in India is growing for the past few years. While financing through the organized sector continues to account only for 25% of the total housing investment in India, commercial real estate brokers are now playing a major role in coordinating finance options with investors and the banking sectors. In the recent times, the upsurge in the real estate market opened the doors for a host of realty funds from financial institutions but there are still concerns related to availability of funds and mortgage options. Although loan mortgage is evolving as a lucrative option, and a significant change in the structure of the mortgage industry is being marked in the recent years, the mortgage to GDP ratio in India in 2001 was 2.5%. With the advent of organized finance in India, decrease in housing loan interest rates and increase in disposable income; real estate investments in India have become easier and this has proportionately helped in the growth of banking in India. source://www.netterweb.com/search/fllartclvw.asp?ID=70385

Delhi: An investment hub

2006-06-19T22:54:00.000-05:00

The real estate industry is one of the major contributors in the growing Indian economy. Real estate has evolved as a huge industry in past few years and as per industry sources this boom will continue for a good time to come. Indian government is also making huge revenues by selling the land to builders for various development projects. On the other hand, government is also contributing by way of providing the infrastructure support and promoting the investment in real estate sector. Certain policies have been formulated to facilitate the real estate transactions and make the system more transparent. Allowing Foreign Direct Investment (FDI) and encouraging NRI investment in the real estate market of India has provided major boost to the industry. Delhi has emerged as a great investment hub and thus, provides a whole world of opportunities to investors. There is a phenomenal rise in consumerism in this region which has resulted in a steep growth of real estate and retail business. People have purchasing power like never before and banks & financial institutions are also providing easy finance. One should realize the potential and invest the money wisely to enjoy the returns in the long run. --------------------------------------------- By Tony Braig

IMPACT OF SAFTA ON INDIAN TEXTILE INDUSTRY

2006-06-13T00:44:00.000-05:00

A strong need exists for the liberalization of the textile sector, noting that protection through high tariffs and small scale reservations had hindered its competitiveness. Indian textile industry can be affected by SAFTA in following ways, • Quality of Textile Products • India’s Huge Consumption • Severe Competition in the region • Inexpensive, abundant and skilled labor force in India • Price Competition • Economies of Scale and Productivity • WTO: Will already be in action in 2005 1.Quality of Textile Products Internationally, Quality of Pakistan’s Textile and clothing is considered to be good than India, therefore after implementation of SAFTA and WTO, Possibly Pakistan will gain more orders from international world. India needs to give a considerable attention in improving the quality of its textile and textile products. 2.India’s Huge Consumption India’s population is much greater than Pakistan, so most of the products are consumed by their home population, leaving lesser amount for export. Some times they have to import from other countries. On the other hand Pakistan being a rich country in the field has quantities spare after its home consumption thus exports to other countries and earns a lot of foreign exchange reserves. India instead of importing far away from other countries, should import from Pakistan. But this thing is possible only when the trade environment is friendly between both the countries. 3.Severe Competition in the region All the member states have opportunities to grow.Entrance and improvement of these LDC’s in the Textile may also make the competition severe in the region. Some of them are already trying to get a respectable place in Asia as well as world. 4.Inexpensive, abundant and skilled labor force in India India's strengths in textile production include inexpensive, abundant and skilled labor force that is suited for labor intensive apparel exports, sufficient raw material supplies because India is third largest producer of cotton with highest area under cotton cultivation in the world. It is still maintaining the position of second-largest textiles producer in the world having a long and deep routed tradition in textile production. 5.Price Competition The threats posed to India include decline in unit values given decrease in prices as this is the key economic rationale for the developed countries to open their markets - welfare gains for their citizens through lower priced goods. 6.Economies of Scale and Productivity Indian industry needs to invest significantly in building scale and upgrading its resources. Moreover, India needs to get rid of its own weaknesses such as lack of economies of scale, low productivity and weak quality control and severe technological obsolescence. 7.WTO will already be in action in 2005 In 2005 WTO will be implemented, making the ways clear for the success or failure of the SAFTA for all the member states. Moreover situation will become clear as to which of these two countries is in a better position to win more orders. WTO can be helpful in successful implementation and administration of SAFTA. Source:R&D Department

Unitech wins largest land deal in 'Noida Express City'

2006-05-29T23:49:00.000-05:00

Unitech Ltd, a leading real estate developer in the country announced it has won the largest land deal for the development of Noida Express City in partnership with the Uttar Pradesh Government. Unitech is the highest bidder in the tender for the development of Express City which is a milestone project in the real estate development industry which has been experiencing significant growth. The company's past experience in the development of world-class infrastructure and building capabilities will help it to contribute towards making Noida a truly global township, a release said. The Express City will be at par with international standards, the release added. source:http://news.webindia123.com/news/Articles/Business/20060523/342769.html

Retail lending to go up

2006-05-15T22:36:00.000-05:00

BANK RATE 6% REV REPO 5.5% REPO RATE 6.5% CRR 5% IF IT ain’t broken don’t fix it, seems to be the message coming out of Mint Street. Balancing of growth imperatives while dealing with inflationary pressures seems to have taken the Governor’s time. In an endeavour to create an environment that enables continuation of the growth momentum consistent with price stability, the Reserve Bank of India (RBI) has left the interest rates untouched. More significantly, the central bank made an upward revision of real GDP growth to 7.5-8 per cent for 2005-06 up from 7.5 per cent. The markets reacted positively and, on the back of TCS’s 1:1 bonus announcement yesterday, flared up for the second successive day, closing 282 points up. While announcing the credit policy on Tuesday, RBI Governor Y.V. Reddy decided to keep the bank rate, reverse repo rate, repo rate and cash reserve ratio (CRR) unchanged at six per cent, 5.5 per cent, 6.5 per cent and five per cent, respectively. However, RBI Governor stressed the need to focus on credit quality and financial market conditions to support export and investment demand in the economy for maintaining macroeconomic, and in particular, financial stability. To check the quality of exposure, the RBI has increase the risk weight on commercial real estate loans to 150 per cent from the current level of 125 per cent. This, in turn, means if a bank is giving a loan against commercial real estate (not residential real estate), it needs to increase its provisioning marginally. This will increase the cost of funds for the banking sector for commercial real estate. In addition, RBI increased the general provisioning requirements on standard advances i.e. personal loans, loan and advances qualifying as capital market exposure, residential housing loans beyond Rs 20 lakh and commercial real estate loans from present level of 0.4 per cent to one per cent. This will obviously put pressure on the retail lending rate, which in any case has seen a spike in recent times, revising upwards twice. It has brought investment in venture capital by banks under the purview of capital market exposure. A bank’s total exposure to venture capital funds will form a part of its capital market exposure and banks should assign a higher risk weight of 150 per cent to these exposures. Bankers argue that the RBI has made an attempt for a lower interest rate regime which might propel investment still further. In 2005-06, the credit offtake of scheduled banks was upward of 30 per cent. The Reserve Bank of India stating that it would respond swiftly to evolving global developments clearly indicates that the central bank would revisit the interest rate scenario after the US Fed increases its interest rate once again, reckon bankers. Since the US Fed rate is expected to increase by 50 to 75 ba sis points in the medium term, it will have an impact on global liquidity. And that will force the RBI to, perhaps hike the interest rate in India, argue bankers. The other risk pointed out by the central bank is the oil spike which has begun its northward journey yet again. CREDIT POLICY 2006-07 The basic message that we are trying to give is we are having good times now.

One Ground Indian Ground...

2006-05-05T00:34:00.000-05:00

Moving overseas is one gesture that is shown by most of the people to a desired location with respect to their choice. I was just going through CNN.com news money section when i came to know that about 40,000 Americans have moved to live outside the local geographical area. The information technology by its virtue affecting all the domain in direct or in indirect form. Today where ever you are you are still connected to your family and relatives by Internet. This is what that has given people a choice to move overseas and settle with the place they have been in their mind. The most wanted destination is non other than India. Research done by NGO on NRI promotion to Indian Ground reflects a stats that is just unbelievable. There is 40% people searching for Real Estate India and has managed to successful moving to places like Delhi,Mumbai,Kolkatta,Chennai,Gurgaon,Bangalore,Hyderabad,Noida,Pune which are roaring high in properties investment by foreign players. The most important role was played by approval of new Foreign Direct Investment Policy in India which brought India into the top real estate booming ground. ---------------------------------------- By Tony Braig.

Escalating land prices hit budget hotels

2006-04-17T23:33:00.000-05:00

Budget hotels are finding it difficult to make their way into the metro cities thanks to rising real estate prices.Many hoteliers, who had earlier planned to develop no-frill basic hotels in A class cities like Mumbai, Delhi, Bangalore, are now taking a re-look at their plans. They are either modifying their plans to focus on the mid-market 3-4 star categories or taking their budget property plan to the secondary cities.French Hotel major Accor, for instance, does not see a potential for its world famous budget brand 'Formula One' in India. "The challenge is to actually find suitable land at a price that makes sense. At the moment, we are not bringing our lowest price brand in India," said Michael Issenberg, President (Asia Pacific), Accor Hotels Group.High expectationsOthers say that it is difficult to offer low hotel rates because the overall expectations of Indians have increased and they are increasingly seeking international standards."India is globalising. Their expectations are the same as everywhere else in the world. We should hence not look at 'Indifying' our hotels," said Stephen Ford, VP, Starwood Asia Pacific Hotels & Resorts.However, analysts say that the potential for budget hotels continues to be good enough in secondary and tertiary cities."In general, there has been a significant increase in capital value of land. Capital value moves differently in different cities depending on the infrastructure. As infrastructure increases, land prices go up," said S Sriniwasan, ED, Realty Fund, Kotak Mahindra Investments.As land costs soar, companies planning to set up low cost hotels find their projects trapped. ------------------------------------------------ For More Real Estate News visit http://www.indianground.com/news.html source:\\http:\\www.ndtvprofit.com

Balle Balle From World To India

2006-04-10T23:54:00.000-05:00

India is standing on the first list of NRIs to get settled with money talking their way. The real estate industry is producing benefits which one never would have thought of. Mr. A.K.Sinha a NRI who purchased 40000sqft plot in gurgaon and Delhi 4 years back. He was almost regretting for what he has done but today when you meet him, he proudly discuss about the strategize planning for buying the property earlier. He now has the very property that worth 40% extra. The FDI after revision had opened the doors for the foreign investors in India to real estate their dreamz.. The one market that people are sure to reap them profit is real estate. If you just go on for looking for agents and brokers to buy, sell, mortgage, lease, rent etc.. You will find numbers of brokers in a row of your street. The Real Estate is a growing child and as you feed him so strong will be the development. I think the more you invest the more you profit is the Real Estate slogan that is rhymed by the brokers and agents…. ----------------------------------------------- By Tony Braig One Web Site I found informative with business and information point of view is just one click away...www.indianground.com/real_estate_fdi.aspx

Real Estate And India:

2006-04-07T05:06:00.000-05:00

Real estate continues to be a robust story with serious players from the Middle East and Europe building concrete investments in India. Kuwait based India Fund is planning to buy land in Chennai and Bangalore with an initial investment of Rs 70 crore.Under the plan, two companies have been formed with the specific objective of diversifying investments in India. The companies will own stocks of Indian companies to invest in real estate and in private equity.Funds being floated The emerging trend is clear and real estate could be the big cash cow after equities. Interestingly, it is not just the Middle East but even Europe is bullish. UK based Trinity Capital plans to raise up to 250 million pounds to focus on commercial development sites, retail, hospitality and construction.With such international funding interest, going by India's hunger for development, even local players are taking the cue. TCG group's Purnendu Chatterjee is now floating a half a billion dollar realty fund.While it is still unclear as to how local investors can be a part of the funds that are being floated, the bullishness is visible even through the stock markets. In the first three months of 2006, three large infrastructure mutual funds have hit the markets. ------------------------------------------ By Tony Braig. source:http://www.ndtvprofit.com

NRIs New Destination...

2006-04-04T00:19:00.001-05:00

India "The Golden Bird" is once again ready for its flight to fathom the heights of the skies. The whole world wants to be a part of Indian versatility. NRIs have start investing for Indian grounds for their respective interests, may it be for personal or business oriented. They are now looking for different parts of India for a asset. The Real Estate market of India is taking a new turn in the international market. The places in India getting the most of the popularity are Delhi, Gurgaon, Pune, Calcutta/Kolkata, Bangalore, Chennai, Hyderabad, Chandigarh, Mumbai. NRIs investments in Real Estate is not new in the market scenario but what has changed is the vision to look India as the best place to make their investments. Foreign Direct Investments( FDI) in India has contributed most in the Real Estate market to get open to the NRIs after its last review where permission for construction and development of housing townships, commercial office space, hotels and resorts, hospitals, educational institutions, recreational facilities, Infrastructure are granted. ------------------------------------------- By Tony Braig

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