PNB loans to turn cheaper

New Delhi, Jan. 30: Punjab National Bank today slashed its benchmark prime lending rate to 11.5 per cent — the lowest in the country.

The State Bank of India, the biggest lender, charges 12.25 per cent. The prime lending rate of most state-owned banks is in the range of 12 per cent to 12.5 per cent, while for foreign and private banks it ranges between 14.25 per cent and 16.75 per cent.

“We have decided to cut the prime lending rate by 50 basis points, beginning next month,” PNB chairman and managing director K.C. Chakrabarty said, while announcing the bank’s third-quarter results.

PNB will cut interest rates on home, car, education and personal loans by up to 50 basis points from February 1.

With this revision, the fixed-rate housing loan will range between 9.25 per cent and 11 per cent depending upon tenors and amounts.

Similarly, the revised floating-rate housing loan will vary between 9 per cent and 10.25 per cent.

The revised floating rates on housing loans will be for both existing and new accounts.

Chakrabarty said deposit rates would also come down by 25-100 basis points across various maturities.

PNB has reported 85.76 per cent growth in net profit at Rs 1,005.82 crore for the third quarter ended December 31, 2008.

The country’s No. 2 lender among PSU banks posted a net profit of Rs 541.45 crore during the December quarter of 2007-08.

Total income rose 51.47 per cent to Rs 6,239.91 crore during the reporting quarter from Rs 4,119.57 crore in the same period last fiscal. Net interest margin stood at 3.85 per cent at the end of December 2008.

During the nine months ended December 31, 2008, PNB reported 48 per cent growth in net profit at Rs 2,225.31 crore.

Source : http://www.telegraphindia.com/1090131/jsp/business/story_10465673.jsp

Developers in India have been forced to drop the price of their off-plan apartment developments

“In my view the current global financial situation has led to one of the greatest bargains in overseas property investment presenting itself in India. The Orchard View development in Rudrapur, India, where the formation of a Special Economic Zone led to the development of some 400 factories in a massive industrial estate right by the development. This was to bring hundreds of workers into the area looking for rental accommodation, of which Orchard View was to help with the under-supply. Now, many of the factories who took plots on the estate have either trimmed their production, or closed their factories altogether and prices have dropped significantly.

“However, no one investing in property now is doing so to make immediate capital gains, or even make gains during the current financial situation, but are investing with the view to making long-term gains. Buying property like this below its market value, is an incredible mid-long term investment opportunity, because they will appreciate massively throughout India’s economic recovery, and the re-birth of the industrial estate, during which time the apartments are also set to make impressive rental yields.”

The Orchard View development offers 1, 2 and 3 bedroom luxury apartments just outside the Special Economic Zone (industrial estate) from just over £30,000. It is a securely gated 6 acre community, with manicured professionally designed grounds maintained by a professional gardener. The apartment building and apartments are finished to a high standard with marble throughout. The complex, which is close to all amenities, comprises its own commercial centre, restaurant, swimming pool, gymnasium and recreation centre.

Property Abroad has many other properties in India, most of which are priced below their market value and as such excellent investment properties. Find out more by visiting the site.

About Property Abroad

Property Abroad is rapidly growing into one of the best known, trusted and most successful overseas property portals in the U.K. With a slick dynamic site and very reasonable rates Property Abroad currently has among the most extensive worldwide property listings on the net.

Source : http://www.pr-inside.com/developers-in-india-have-been-forced-r990182.htm

Gujarat clears The Special Investment Region(SIR) ordinance

Gujarat has again pioneered and laid down the road map of robust and fast track economic development of the State and the country. On 6th January, 2009, the State Government promulgated a legal framework – The Gujarat Special Investment Regional Ordinance, 2009. The Ordinance gives indication of the commitment of the state Government to set up world class hubs of economic activity on the lines of fast growing countries of the world.

The State Government is very keen to create large size investment Regions and Industrial Areas in the State of Gujarat; and to specially enable their development as global hubs if economic activity supported by world class infrastructure, premium civic amenities, centres of excellence and pro-active policy framework; and to set up an organizational structure with that purpose. The SIR Ordinance provides for the development of such economic hub(s) with global standards. The State has already identified six potential locations to be developed as SIR which include (1) Dholera-Ahmedabad Inbvestment Region (2) Vadodara-Ankleshwar Industrial Area (3) Palanpur-Mehsana Industrial Area (4) Bharuch –Dahej Investment Region as PCPIR (5) Surat-Hazira Industrial Area and (6) Valsad-Umergam Industrial Area.

India is emerging as a major economic power in the world. The competitive advantage of India include a vast market, a large pool of talented human resource who are mostly in the working age group, vast areas of waste land and a variety of natural resources. Gujarat is placed very well to play this role of taking India on a high growth trajectory. Gujarat already contributes a substantial part in India’s industrial production, capital formation and exports. In several products, it is in fact, a national leader and in certain others, a global player. Gujarat has thus emerged as the growth engine of India. However, the potential is still very large and Gujarat must exploit the same for its own development and for growth of the country.

One of the main reasons of economic progress of several countries has been the creation of huge industrial corridors and mega manufacturing and commercial hubs including in Japan, China and South Korea. It is particularly observed that size of such hubs does matter. This helps in the economies of scale particularly in creating and providing robust infrastructure which is uniform and available to all users. In this background, if the State and the country have to achieve a higher growth, a similar pattern may have to be followed. With that objective, the State Government has passed the SIR ordinance particularly to create large size Investment Regions and Industrial Areas in the State of Gujarat; and to specially enable their development as global hubs of economic activity supported by world class infrastructure, premium civic amenities, centers of excellence and pro-active policy framework; and to set up an organizational structure with that purpose.

This strategy of the State Government is complimented with the strategy of the Government of India. Government of India has proposed a project of Dedicated Freight Corridor (DFC) between Delhi and Mumbai. The area of 150 kms on both sides of the DFC will be developed as the Industrial Corridor. 38% of the length of the DFC is falling in Gujarat. As part of this Delhi-Mumbai Industrial Corridor (DMIC), six mega industrial nodes (four industrial areas and two investment regions) have been proposed for the State of Gujarat. Almost one third of the proposed investments of about 90 billion US dollars in DMIC is expected to take place in Gujarat alone. As part of the DMIC project, identified industrial nodes have to be developed as Global Manufacturing and Commercial Hubs. All kinds of infrastructure both within and outside the nodes also have to be developed with global standards; Government of Gujarat has not only given its full commitment for the DMIC project but has been actively working with the Government of India on the same. Even Government of India has suggested to the State to put in place a legal frame work and a dedicated organizational structure for setting up world class industrial nodes.

All this will lead to enhanced economic activities in the State and in the country and will particularly, result into generation of employment for the people on a massive scale. The objective also includes putting to use large tracts of uncultivable land for industrial and other productive purposes and to develop robust infrastructure linking the industrial nodes, our ports, the DFC and other important locations. This will result into enhanced production and productivity, wealth creation and welfare of the community. To achieve this mammoth task, it was imperative for the State to put in place a legal framework and organizational mechanism with such powers and functions, which steer the development of mega investment regions and industrial areas faster and smoother. In the present global economic scenario, the SIR in Gujarat is expected to be a sound global centre of attraction for the investors.

The Ordinance mainly proposes to provide for following matters :

1. The Ordinance enables to establish, develop, operate and regulate the Special Investment Regions in the State.

2. The State Government is empowered to declare Investment Region or Industrial Area and designate them as Special Investment Region (SIR) by notification;

3. An Investment Region will be developed in an area of more than 100 sq. kms and an Industrial area will be developed in an area of more than 50 sq. kms.

4. The Ordinance provides for establishment of a four tier administrative mechanism for establishment, operation, regulation and management of the SIRs. The structure will comprise of an Apex Authority, a Regional Development Authority (RDA) for each region, a Project Development Agency and project specific SPVs. The Apex Authority and Regional Development Authority will make provisions for development, operation, regulation, management, planning and to grant permission and approval for any economic activity or amenity to be established in the Special Investment Region;

5. The Ordinance empowers the State Government for setting up of Project Development Agency and Nodal Company in the form of a government company and assign them the functions like conceiving and detailing of the project, assessing the techno-commercial and economic feasibility, financial structures of projects, environmental issues and solutions, implementing the projects or awarding them to other developers or entities, promoting private sector participation in projects etc. Government has already approved formation of such a project development company in the name of “Gujarat Industrial Corridor Company” (GICC).

6. The Ordinance provides for effective internal dispute settlement mechanism by setting up a three tier system.

7. The ordinance also provides for a single window clearance system. The Apex Authority- the GIDB will be the point of contact for establishing an economic activity, infrastructure or amenity in the SIR.

In the Global Investors’ Summit – 2009, a seminar is also organised on the development strategy of the SIR. Gujarat is the first State which came out with such a unique legal framework. This shows its commitment to strengthen the economy of the State and of the Country.

Source : http://deshgujarat.com/2009/01/08/gujarat-clears-the-special-investment-regionsir-ordinance/

Tier 3 Offers Good Real Estate Opportunities

Despite the global economic downturn eating into India’s real estate markets, Jones Lang LaSalle said the country’s third tier markets would provide attractive future returns. The real estate services firm added that Ahmedabad, Chandigarh, Kochi, Jaipur and Nagpur were among the most attractive. The investment case for India’s third tier cities is still strong despite the financial turmoil being felt in the country, according to property services firm Jones Lang LaSalle. India’s economy has suffered amid the global deleveraging with general repricing across real estate markets and predictions the country’s gross domestic product will fall from an average rate 8.9 percent to 6.2 percent for 2008/2009.

However Jones Lang LaSalle said in their “India30 Real Estate Opportunities in Tier III Cities” report, that the country’s tier three cities are well placed to weather the storm. Highlighting 30 cities, the firm said these locations would “set the benchmark by which other [tier three] cities will be measured.” Assessing the investment potential of the cities by “size, market reach and connectivity”, Jones Lang LaSalle said the most attractive investments would be found in Ahmedabad. Chandigarh, Kochi, Jaipur and Nagpur. Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj said these cities “offer the strongest real estate potential combined with the lowest market risk.”

According to the report: “The [30 cities highlighted by the report] still account for a relatively small proportion of real estate activity (21 percent of modern offices and 34 percent of shopping malls), but with 41 percent of the country’s wealth, the potential of these tertiary markets is clearly evident” “Domestic players continue to expand rapidly into tier three cities, and whilst foreign players are currently adopting a cautious approach in today’s uncertain global economic climate, over the longer term we anticipate the India30 will offer new opportunities for both domestic and foreign real estate investors, developers and occupiers,” he added in a statement.

Source : http://www.indianrealtynews.com/real-estate-india/tier-3-offers-good-real-estate-opportunities.html

2,500 flats on sale, but no buyers

MYSORE: The recession here is not as bad as it is in metropolitan cities like Bangalore. The real estate, which started booming five years ago, has  now almost reached its nadir. In 2004, when real estate business took off in the city, realtors were on cloud nine with the demand for houses, especially the apartments, increasing manifold.

Today, with world economy sliding down and firms resorting to downsizing, the real estate businesses are struggling hard to survive.

According to developers, presently, there are more than 2,500 flats for sale with no takers. This excludes individual houses built by developers and private owners. On the other hand, the sale of sites has come to a grinding halt. Neither there are buyers nor sellers.

If Mahesh, a real estate agent, is to be believed, in Mysore, many have invested in sites, but they do not want to sell at a lower price. “They want to adopt a wait-and-watch policy,” he said, adding the site prices in the city have come down by almost 30 per cent. “Only people who have urgency are selling the sites as buyers also want to wait for some more time, hoping the prices will further fall,” he added.

If this is the situation of real estate agents, worst affected are the builders and developers. BAI Mysore chapter president S R Swamy admits the decline in the rates of flats and houses, but he is optimistic the NICE road and opening of airport in March would improve the situation. “As of now market is down and there is a 20% cut in the rates of flats and houses, but rates will not slump further though developers or builders are ready to forfeit their profits, but not lose the principle amount,” he added.

Another builder Naga Kumar of the premier properties was critical of the builders making false promises to buyers. “In reality, honest builders are only passing on their profits to buyers to keep their business running, but what some builders are saying of 35% cut in prices of apartments is not correct as they are jacking up the prices to reduce them to show the buyers that they are giving huge concessions,” Nagakumar alleged, adding that banks’ brakes on fresh loans to IT and other sectors has affected their business.

Another builder, on condition of anonymity, blamed the media and banks for the present situation. While media exaggerated the recession, the banks stopped lending to employees of various sectors, including IT sector. The ultimate sufferers are the builders and developers. With this grim scenario, there are no fresh plans in the pipeline. “With what hope can we take up new projects?” Suresh, a builder-cum-contractor asks, adding there is no dearth of people inquiring about houses, but real buyers are scant.

Reality check

Last week, a developer carried out a campaign. Over 200 persons inquired, but only 10 turned up and were serious about buying apartments. Finally, only two were sold.

- A house builder has about 10 houses on sale. Inquiries galore, but no real buyers are forthcoming.

- A builder, who quoted Rs 44 lakh for a fully furnished house on 30×40 site in the city’s prime area, sold it for Rs 36 lakh. He not only lost the profit, even his labour cost.

- Most of the high-end apartments constructed by big developers are lying idle.

- Private realtors have no buyers. “We have property worth in crores, but no liquid cash to maintain our establishments,” says a developer-cum-politician.

- In newly developed MUDA-approved Journalists Colony, the individual sellers who quoted between Rs 800 and 1000 per sqft three months ago are now ready to dispose of for Rs 600 a sqft. Yet there are no takers.

Source : http://timesofindia.indiatimes.com/Mysore/2500_flats_on_sale_but_no_buyers/articleshow/4043214.cms

Rentals fall by 30% in Bangalore

BANGALORE: Residential rentals in Bangalore have fallen by close to 30% in the last six months alone.

So, if you are looking to rent a house or ink an extension in your contract, make sure that the owner drops the rental in line with the current market rates. The economic turmoil, which has led to job cuts and lower pay hikes, has forced many to either vacate their homes or go in for more affordable rentals. This, combined with an increase in brand new flats, has created a huge supply in the market and left landlords with no choice but to drop prices.

Three days ago, a two-bedroom flat in an apartment in Kodihalli 1st Main, near Indiranagar 2nd stage, went for a sweet Rs 12,000 a month as rent inclusive of maintenance. Barely four months ago, the same area commanded a rental of Rs 18,000 exclusive of maintenance per month for a two-bedroom apartment.

In Whitefield, a two-bedroom flat is going for just Rs 12,000, and there are still no takers. Just eight months ago it would have fetched a price anywhere between Rs 25,000 and Rs 35,000.

Even villas in Adarsh Palm Meadows in Whitefield at Rs 75,000 a month have no takers. And this was a project where monthly rentals started at Rs 2 lakh onwards just a year ago.

“The market has dropped by a minimum of 25% due to the overall economic gloom. People are not able to pay those exorbitant rentals with no pay hikes happening and the constant fear of being asked to leave their job,” says Feroze Abdulla, MD, Feroze’s Estate Agency.

According to Farook Mahmood of Silverline Realty, one of the city’s leading real estate agents, “many people in the city have already started serving their notice period to home owners. This has forced owners to renegotiate the contracts and lower prices.” In the last one month, Silverline Realty has closed about five deals, all of which saw owners dropping their rentals by 20%. “We have told our clients that if they want takers they have to drop prices,” says Mahmood.

Source : http://timesofindia.indiatimes.com/Bangalore/Rentals_fall_by_30_in_Bangalore/articleshow/4045089.cms

Price rise options open for realtors

Hit by vanishing sales, developers may be cutting property prices – but they are leaving a window open to hike the rates later.

Despite guaranteeing ‘ escalation- free’ prices, most developers are working in a weasel clause which gives them the right to hike prices at any point till the final installment is paid and the property actually handed over.

Buyers are often forced to pay an increased amount before the receiving possession of the property. The escape clause is worded more or less similarly in all purchase agreements, and is usually tucked away in the fine print towards the end of the contract.

Mail Today has copies of the agreement forms issued by several builders like BPTP, KLJ and Jaypee. The clause states that the basic sale value is ” subject to revision/ withdrawal, without notice at the sole discretion of the company, if there is an increase in the prices of raw materials like steel, cement etc or any other cost or any other charges etc.” This effectively gives the builder to increase the price at any time, using any pretext like a rise in input costs etc.

However, the real aim is to be free to charge more in case the market recovers and prices start moving up again.

BPTP and KLJ are developing residential projects, Parklands and KLJ Greens, respectively in Faridabad while Jaypee Group is coming up with its massive integrated township Jaypee Greens in Noida.

In all agreements, this clause is loaded in favour of the developer.

The clause also says the company’s decision is “final, conclusive and binding on the intending allottee(s).” There is no mention of how input prices are calculated, and which particular price shall be used for purposes of calculating the socalled escalation.

Amit Raj Jain, vice- president marketing- BPTP Limited, tried to play down the significance, saying that it was just legalese. “This kind of clause in the application is just mentioned and is not enforceable under any circumstances. It never actually happens. But in general if a developer raises the basic sale price, it is increased by two to three per cent stating various reasons like escalation in the input costs.” But builders are using it to hike prices post- sale. One such escalation has been observed in Wembley Estate, a premium residential project located Guragon- Sohna Road in the Rosewood City being developed by Eros Group. The company has sent letters to allottees demanding more money saying that there is an increase in the input cost.

An allottee of Wembley Estate who received such a letter from Eros Group said, “The project has been delayed by eight to nine months. The company was supposed to hand over the possession by March 2008. But then, the company issued a letter asking to pay more.” Commenting on the plight of such applicants, a Noidabased realtor said, “Actual users are not in a position to fight legal case with the developer, as they fear of losing the money spent on the property till date. Developer on the other hand escalates his prices when the project is in the final phase of completion. By this time, the project’s reputation in the market improves. The project sells because the structure is ready and can be seen.”

Source : http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=9910&sectionid=4&issueid=48&Itemid=1

Disha Direct’s Investment Square bucks current trends, reports over 180 confirmed bookings for its latest projects

The onset of global recession, compounded by the financial turmoil and collapse of MNCs in the US and Europe, set the stage for negative sentiment and fall in consumer demand that is affecting every sector of the economy. Experts speculate that the reversal of this sentiment will take time: anywhere between two to four quarters of the current calendar year. In India, the real estate sector stands the worst affected, as plummeting demand causes cash flow problems for developers and projects are brought to a standstill or postponed indefinitely.

The above factors coupled with the continuous negative reports on the economy in the media, these factors are causing real estate buyers to postpone their buying decision for better times and in anticipation of further fall in property prices in the near future.

However, Investment Square- the real estate advisory wing of Disha Direct that specializes in offering risk-mitigating options to real estate investors- shows that there is another side to the story. Extensive research and the response to the projects promoted by Investment Square clearly demonstrate that investors are willing to invest, provided reliable and attractive options come their way.

For instance, Investment Square promoted an innovative option when it launched new investment opportunities comprising of proposed developed plots at New Mahabaleshwar near Satara and Kasgaon near Shahapur in December 2008.

The plots are priced extremely reasonably not only to attract investors but also to fulfil their need to earn an assured return in future. The projects received an overwhelming response right from the outset, considering the scope for future development in the areas around the projects and the attractive pricing which virtually guarantees significant appreciation.

With a minimum investment of just Rs.3 Lacs, the projects offer a very attractive low entry point belying the perception that investment in real estate entails huge sums of money. For those investors who are still apprehensive, there is a ‘Buy-back’ option that can be exercised 24 months after making the initial investment. All investments are secured by a Memorandum of Understanding (MoU) on a stamp paper acknowledging the investment and duly allotting the area of land against the amount paid by each buyer. The investors choosing the buy-back option are assured of the buy back price with a post-dated cheque and still retain the right to retain the plots in future, in which case they will simply have to return the post-dated cheque.

As of this date, this novel property investment proposition has received over 180 confirmed bookings, with the marketing team at Investment Square expecting the figure to reach much higher.

“The products offered suit the cut-back budgets of plot buyers and investors. They also put to rest any apprehensions that investors or property buyers may have as regards price fluctuations, because of the attractive and reasonable pricing,” comments A. Shyamsunder, CEO – Investment Square. “Disha Direct, with its reputation for offering innovative real estate products backed by high-class customer service and a commitment to deliver its promises, has got property buyers back to the market with its latest offering. The great response to these projects marks the beginning of the reversal of the negative sentiment. This will be the case with any true ‘value for money’ offering.”

Source: http://www.indiaprwire.com

JLLM Releases ‘India30 – Real Estate Opportunities in Tier III Cities’

With the release of ‘India30 – Real Estate Opportunities in Tier III Cities’, Jones Lang LaSalle Meghraj decisively answers the recurring question in investor circles today – Is the Tier III city story over, or is there comeback sequel?

The answer is a resounding ‘Yes!’ This latest report from Jones Lang LaSalle’s World Winning Cities Research sets out to provide fresh insights into the long-term real estate opportunities and risks across India’s Tier III cities.

What makes these cities tick, and what will keep them ticking when others are facing the prospect of a protracted period of stagnation?

“This is not a simple question to answer, but we have attempted to do so in this report,” states Anuj Puri, Chairman & Country Head, Jones Lang LaSalle Meghraj. “In any given city, the factors that influence real estate growth are diverse and complex. To arrive at a uniform and non-ambiguous model of ‘real’ time potential, we arrived at three control points for this study – infrastructure, human capital and governance. These factors are best suited to reflect growth amongst any city.”

‘India30 – Real Estate Opportunities in Tier III Cities’ showcases 30 cities – the India30 – which Jones Lang LaSalle Meghraj identifies as the focus of new real estate activity outside of India’s major metros over the next decade. The India30 will set the benchmark by which other Tier III cities will be measured.

Included in the report is a unique Real Estate Opportunity Map, which provides a high-level summary of the research and analysis of macro-economic parameters, real estate fundamentals, future growth drivers and risk profiles across the India30.

“We have short-listed 10 Tier III cities which offer the strongest real estate potential combined with lowest market risk”, states Mr. Puri. “Five cities stand out – Ahmedabad, Chandigarh, Kochi, Jaipur and Nagpur. This group already have rapidly growing real estate markets due to their city size, market reach and connectivity.” A second group of mainly southern Indian cities – Coimbatore, Mangalore, Thiruvananthapuram, Visakhapatnam and Goa – also score well and have growing consumer markets.

With ‘India30 – Real Estate Opportunities in Tier III Cities’, Jones Lang LaSalle makes a strong case for these cities which, led by proactive visionary governments which invest in infrastructure and education, will be best positioned to succeed in the immediate and long-term future.

Source : http://propertybytes.indiaproperty.com/?p=3247

Dholakia group to invest Rs 200cr in hotel business

Despite the ongoing slowdown in the real estate and hospitality sectors, Mumbai-based Dholakia group plans to launch 12 new business class hotels over next three years at an investment of Rs 200 crore.

The group, which already operates two hotels in Mumbai under the brand ‘Orritel’, will have operations in the rest of Maharashtra, Gujarat and Karnataka over the next three years.

Speaking to Business Standard, Dholakia group managing director Amit Dholakia said, “We plan to provide four-star category hotel services at three-star rates. The combination of a hotel, a spa and a fashion boutique will help us attract more visitors.”

The group had recently launched its new hotel Orritel at Hinjewadi, the information technology hub of Maharashtra, in Pune.

The hotel has 60 executives rooms, 12 suites and three grand row houses along with a spa and other facilities.

“We are looking at Ahmedabad, Mumbai, Pune and few other locations in Bangalore to set up new hotels. Rudra is a popular spa chain in Mumbai and we plan to extend it on a franchisee basis to a number of cities in north India,” Dholakia added.

http://www.business-standard.com/india/news/dholakia-group-to-invest-rs-200cr-in-hotel-business/10/48/347150/

Ansal Properties eyes sale of 10000 affordable units

New Delhi: Real estate developer Ansal Properties and Infrastructure Ltd said that it expects to sell 10,000 dwelling units in the affordable housing segment this year, but has put on hold plans to build 30 hotels.

The affordable dwelling units are being sold in two categories – Rs 2.5 lakh for 200-sq ft unit and Rs 9.50 lakh for 850-sq ft unit. This means that the average cost for the buyer works out to between Rs 1,120 and Rs 1,250 for every sq ft as compared to Rs 1,700 to Rs 2,000 a sq ft for mid-income housing. The construction cost for the company for these projects is expected to be between Rs 500 and Rs 550 a sq ft.

Ansal Properties – which derives nearly 70 per cent of revenue from mid-segment housing – has already launched the affordable housing projects in UP and Rajasthan and has sold 2,000 units. It is targeting a sale of 10,000 such units this year.

Ansal Properties to invest Rs 500 cr on low cost housing

“These projects are coming up in Lucknow, Meerut, Agra, Jaipur, Jodhpur and Ajmer and also in Bhilwara as part of our townships,” said Pranav Ansal, Vice-Chairman and Managing Director of Ansal Properties and Infrastructure Ltd.

Ansal Properties signs MoU with BSI Management

“There is a strong demand for affordable housing projects, as banks have announced attractive rates for loans up to Rs 5 lakh and up to Rs 20 lakh. Beside this, we are also talking to the States and urging them to bring down the stamp duty for affordable housing projects,” Ansal said.

Now, the stamp duty in UP is pegged at 8 per cent and in Rajasthan it is 8.5 per cent.

The total cost of these projects would be close to Rs 400 crore spread over the next two years. This includes investment for land.

Cash Flow

Ansal said the company’s investment requirement for the ongoing projects would be Rs 1,500 crore in the next two years, and claimed that a significant proportion of this would be supported via internal accruals. “Our debt requirement will be only Rs 100-200 crore,” he said.

The company is planning an engineering industrial SEZ in Murthal (near Sonepath); and two IT SEZs in Greater Noida and Gurgaon.

While HDFC has come in as equity partner (33 per cent) for the Greater Noida project, IL&FS has committed a 49 per cent equity holding for the Gurgaon project, Ansal said.

The company had initially planned a follow-on public offer for 2008 but ruled it out after the markets plummeted.

Hotel plans

The lacklustre demand in the hospitality business also seems to have taken a toll on the company’s elaborate plans to come up with 30 hotels.

“The hospitality plans are on hold. We are not pursuing it aggressively. For all the 30 hotels that we had planned, we already have land. But due to the slowdown in the market, we are not looking at developing them. We may evaluate our plans in one years’ time,” he said, adding that bulk of these hotels were in the three-star and four-star categories.

Source : http://sify.com/finance/equity/fullstory.php?id=14844913

Indu City’ to create new benchmark for residential projects in city

Ultra-modern project designed to detail Coming up in a 90-acre parcel; Set to transform the topography of Bachupally; Value-for-money apartments and villas.

After successfully launching two mega residential ventures, Indu Fortune Fields (Kukatpalli) and Indu Aranya (Nagole), infrastructure major, Indu Projects Limited, today announced the launch of its third mega residential project, Indu City, coming up in Bachupally, Hyderabad, a short drive from Hitec City.

Designed by the world renowned design and consulting firm, Belt Collins of US, this world-class mega residential project is being developed in joint venture with Red Fort Capital and it will be formally launched on January 24, 2009. The project is scheduled to be completed by 2011, and it will have more than 2,000 residential units that suit every budget. Work has already commenced at the site.

One of the special features of this project is that it is being created in a green landscape amidst natural, undulating terrain and water bodies, as an ideal balance between nature and high quality living is conducive to those who seek quality life.

Planned on the theme ‘Designed with Detail,’ the project is expected to cost over Rs 1,650 crore and it will have several features that make the residential community very different, adding convenience to living by having more open spaces and creating a new lifestyle that customers yearn for. Several creative as well as utilitarian features like zigzag balconies, standing balconies, theme gardens, choice of elevations, multiple layers of greenery and podium gardens will be the highlight of the new generation apartments.

The proposed gated community is planned for 1715 apartment units ranging from 750 sft to 3150 sft, and a range of 318 villas ranging from 325 sq yards to 600 sq yards. All lifestyle amenities like club house that includes tennis, swimming pool, squash courts, shuttle courts, billiards, spa, restaurant, beauty salon, pool-side bar, and lots more will be spread across the township giving a new meaning to life. A crèche will also be developed. Other added features are an international school on a 5 acre plot, and a commercial center, which will make the project an integrated self contained development.

Speaking on this occasion, the Chairman & Managing Director, Indu Projects Ltd., Mr I Syam Prasad Reddy said: “As part of our continuing efforts in creating value for customers in today’s challenging environment, we have done everything possible, based on the feedback from our old and prospective customers, to make this new venture unique in many respects. The Design with Detail is the inspired result, which is not only a technological showcase but also a breakthrough in sophistication and design.”

He said this project scores on functionality, aesthetics, and convenience, and offers a great community experience. “This apart, we are the first developer to launch this project after the new G.O. was issued recently offering 5% rebate in stamp duty for apartments under 1200 sft. We are committed to delivering this project by the stipulated period to ensure that our customers in this category benefit from the G.O.” Mr. Syam stated.

Mr Subhash Bedi, Managing Director, Red Fort Capital, said: “Internationally and historically, developers have differentiated themselves on timely execution and resident-centric projects that are in line with customer requirements. In the current market environment, customers need to take these into consideration when making purchase decisions. We are proud to have the Indu Group as our valued partner. Indu City will be a landmark project in Hyderabad that will provide customers with a gainful purchase opportunity and an unparalled living experience.”

Source : http://propertybytes.indiaproperty.com/?p=3241

Best real estate investment in this slowdown

In this slowdown it is best to invest in low cost high return yielding properties. The prices have come down in metropolitan and cosmopolitan cities. It makes sense to take a look at tier II and tier III cities with good infrastructure.

IN THIS economic slowdown it is very difficult for investors to make a decision on investing in real estate. The prices have come down in metropolitan and cosmopolitan cities. It makes sense to take a look at tier II and tier III cities with good infrastructure and proximity to airports and other destinations.
Places like Gurgaon, Mysore, Hosur may be the places to look at.

Hosur seemingly is best suited due to proximity to Bangalore and its climatic conditions. Hosur is just 40km from Bangalore and it would be an extension of the Bangalore Electronic City. Tamil Nadu government has announced four Special Economic Zone (SEZ) in this town.

They are aeronotical SEZ promoted by Tanuja Aerospace, floriculture SEZ promoted by Tanflora, IT SEZ promoted jointly by Tamil Nadu Industrial Development (TIDCO) and Electronic Corporation of Tamil Nadu Ltd (ELCOT) and last but not the least is the dream project of Hosur, the 3300 acre multiproduct SEZ promoted jointly by GMR Group and TIDCO.

Keeping all this in mind, it would be best to invest in Hosur, where the prices are affordable and would fetch a high return in the future.

You may look at Eco Vista which is a DTCP approved project located adjacent to the multiproduct SEZ. The prices are very attractive and has got all amenities like wide roads, drainage, security, water supply and luxury amenities like clubhouse and a swimming pool. It is also approved by ICICI Bank for site loans.

Source : http://www.merinews.com/catFull.jsp?articleID=157210

Navi Mumbai’s first luxury hotel by Abil Group

Pune:City-based Metropolis Hotels has bagged a contract to build Navi Mumbai’s first five-star hotel.

The hotel, to be built on a 47,000 sq m plot off Palm Beach drive, was auctioned by City and Industrial Development Corporation (CIDCO). The net deal is around Rs.2.83 billion, the biggest ever plot CIDCO has auctioned.

The hotel is to be built at a whopping Rs.60,085.15 per sq m.
Metropolis Hotels is a joint venture company owned by Pune-based Avinash Bhosale Group (ABIL), engaged in the business of hospitality and real estate and infrastructure and Sun-n-Sand.

We are jubilant at this success and plan to bring in a wellknown international brand to run the proposed 500-room hotel, expected to be completed in three years,? Bhosale said.

The plot is strategically located at a distance of just 6 km from the new proposed international airport and approximately the same distance from the Trans-Harbour Link connecting South Mumbai to Navi Mumbai. The site has access to CIDCO’s golf course.

Source : http://www.abilgroup.com/

Secondary real estate market offers a good bargain

With most developers trying to revive the sagging realty market by offering discounts and affordable housing, its the best time to go for your dream  home. But it’s not just the primary market that can fetch you great deals. In fact, the secondary real estate market too can offer you a good bargain. A correction of 15-20% or even higher has taken place in the secondary market, according to experts. But don’t rush in. Make sure that a thorough check has been done before the property gets transferred in your name.

GET THE PAST CLEAR

While buying from this market may be profitable right now, there are certain aspects that one must be wary of. Raminder Grover, CEO (Homebay Residential) of Jones Lang LaSalle Meghraj (JLLM), highlights some significant pointers that need to be kept in mind. He says that firstly one must understand that since it is a secondary market, one is talking of older structures which usually bring with them inherent problems in terms of maintenance, overall stability etc.

Obtaining a home loan may be a problem if the building is too old as many banks do not grant home loans for units older than 15 years, while certain financial institutions grant mortgage loans of only 50% of the property value. Secondly, he warns against encumbrances on the property in the form of services or utilities dues, via a mortgage or personal loan, and other financial liabilities as not everyone will disclose such faults.

The legal status of the property may have also been compromised. The title may not be clean and adequate. It thus becomes necessary to check the legalities involved. Lastly, there is a complete lack of accountability for flaws detected at a later stage. One, undoubtedly, has to be more vigilant when buying from the secondary market.

WHERE TO BUY

So how lucrative is it to buy from the secondary market in the present context? Are there any lucrative deals that have been driving the sales in this market? JLLM offers a citywise snapshot. According to JLLM, in Mumbai the secondary market is buoyant in Bandra, Khar, Santacruz and Andheri and there are some good bargains available currently. In Bangalore, the secondary market does not presently offer much to a window-shopping buyer — investors dealing in the secondary market only deliver good offers on the negotiation table to those who actually show a firm commitment to buy.

In Delhi NCR, Gurgaon, Indirapuram and Noida are rife with secondary market opportunities, while developers in South Delhi are making some good offers on building floors. In Kolkata, there are resale homes available throughout the city. However, there is now a rather significant secondary market in Rajarhat and along the Eastern Metropolitan bypass. These previously promising areas were driven by investors, who had blocked numerable apartments over the past two to three years and are now looking to offload them.

Rajiv Sahni, partner, real estate and infrastructure, Ernst & Young India, feels the secondary market may offer a better rate in comparison to  the primary one. “Most of the real estate developers have held their rates steady, but in the secondary market a correction of 15-20% or even higher has taken place. However, the buyer should carefully conduct a due diligence of the property while buying from the secondary market.”

STEAL A DEAL

Some also feel that the distress sales currently being observed in this market can be of help to a potential buyer. So while a limited number of smaller developers, in dire need of liquidity, are selling off their properties below par, no official announcement of such activities is usually made. Such properties are sold off discreetly at lower rates and the existence of such sales mostly spreads by word of mouth. “The global economic slowdown has hit real estate prices in the last few months, forcing people to either hold on to their properties or sell it off at the earliest to cut losses! This is particularly true for markets in and around major metros. If one patiently looks around, one can definitely find a good deal as there exist a very small number of buyers compared to sellers in the market today,” says R K Mittal, CMD of CHD Developers.

Agrees Vijay Jindal, CMD of SVP Builders India. He says one can end up saving a lot of money if one bags a good deal from the secondary market. And if one can trace a person who is distress selling, than it is better to crack the deal.

Whether you buy from the primary or secondary market, doing a comprehensive check of the documents needed will hold you in good stead. Buying a home in the secondary market can be beneficial as long as it has a long shelf-life in terms of construction quality, presents no financial or legal loopholes and shows a definite cost arbitrage over primary market rates.

Be buyer smart even if it is bargain that’s on your mind. Make your ‘second’ best choice, after an exhaustive inspection of all possible aspects. Be an informed house hunter, not a negligent one.

Source : http://economictimes.indiatimes.com/Features/The_Sunday_ET/Property/Secondary_real_estate_market_offers_a_good_bargain/articleshow/4027997.cms?curpg=2

LIC Housing Finance to launch new financial services subsidiary

LIC Housing Finance (LICHFL) plans to launch a financial services subsidiary in this quarter to strengthen its distribution.

The company believes that launch of its financial services subsidiary called LIC Housing Finance Financial Services, will help it to improve its disbursement of loans and other financial products.

The first office of the new firm is expected to be operational in Mumbai by mid February.

After launch of first office, the company plans to open more offices with pan-India presence.

Presently, the state-owned LICHFL disburses loans through agents and around 7,000 marketing intermediaries. The firm has registered a net profit of Rs 134.33 crore in Q3 FY 09, a growth of 27 per cent as against Rs 106.62-crore in the year-ago period.

Source : http://www.stockwatch.in/lic-housing-finance-launch-new-financial-services-subsidiary-21711

Ansal to invest Rs 500 cr in low-cost housing

Ansal API on Thursday announced an investment of Rs 500 crore in the next l8 months to develop 10,000 affordable homes, which are expected to be priced between Rs 2.5 lakh to Rs9.51akh.

The housing projects are coming up in the states of Uttar Pradesh and Rajasthan in places like Lucknow, Agra and Meerut in UP and Jaipur, Jodhpur, Ajmer and Bhilwara in Rajasthan. Ansal API has sold about 2,000 such units that were launched in November last year in these two states. Pranav Ansal, vice-chairman, Ansal API, said, “We plan to develop and sell 10,000 affordable houses in one-and-half year.” Ansal added that banks are also offering lower interest rates for homes below Rs 20 lakh.

Ansal said, “Margins will be low at about 20% considering the present input cost.”The size of the flats would vary from 200 sq ft to 850 sq ft and the construction cost would be Rs 500-550 per sq ft. The Delhi-based realty company is talking to other north Indian states for reducing the stamp duty on affordable houses so that similar projects can be launched.

Funding for the project is going to come mainly from internal accruals. Debt will be raised as and when required.

Source : http://propertybytes.indiaproperty.com/?p=3233

Banks, FIs step up property buys

With real estate prices moving southwards, several banks and financial institutions are buying their own properties and shifting from rented and leased premises.

While the country’s largest financial institution, Life Insurance Corporation of India (LIC), has already bought land and built-up properties during this financial year, the country’s thrid largest private lender Axis Bank is scouting for up to 5,00,000 square feet of space in areas such as Bandra-Kurla Complex (BKC), Worli and Parel.

“Property prices have fallen to attractive levels now. As we intend to expand our network, we will buy our own properties instead of taking commercial spaces on rent or lease. During the first half of this year, we have bought properties worth over Rs 511 crore across different cities,” said LIC Managing Director Thomas Mathew T.

According to brokers, real estate prices in the country’s commercial hub have fallen 30-40 per cent in the last one year. “ Land at BKC is now available at just Rs 30,000 a square feet now from Rs 40,000- 50,000 a year back. At Worli and Parel, properties are mostly sold on the basis of down-payment. If a buyer agrees to pay within a week or so after identifying a property, the seller offers lower rates. So far, these areas were being mostly offered on lease or rent,” said Mehta, who deals in real estate in Mumbai.

“We have been planning to buy an office space of 3,50,000 – 5,00,000 square feet somewhere in BKC or Worli. As the real estate prices have come down significantly, it is the right time to buy our own property for expanding further, instead of looking for lease and rent options. We are close to finalising such a commercial space,” said a senior executive at Axis Bank.

In November last year, foreign lender Standard Chartered Bank had bought about 250,000 square feet of space in BKC for Rs 750 crore. Standard Chartered purchased the property from PD Developers at around Rs 30,000 a square feet, a rate which is over 30 per cent lower as compared to Rs 45,000 about a year back.

LIC intends to buy land and properties worth Rs 1,000 crore this financial year to accommodate its upcoming new branch offices.

The insurer, which currently has 2048 branches and 108 divisional offices, plans to open 500 new satellite offices this year.

Source : http://www.business-standard.com/india/storypage.php?autono=346863

Second relief package to prop up real estate sector

NEW DELHI: The government is considering a second relief package for the real estate and housing sector, which is crumbling under liquidity crisis  and a slowdown in demand. Apart from giving real estate an infrastructure status, the measures being looked at include reduction in interest rates from 9.25% to 7.5% for home loans up to Rs 30 lakh, an official in the department of industrial policy and promotion (DIPP) has said.

The ministry may also consider a proposal for doubling of income tax rebate on home loan interest to Rs 3 lakh from Rs 1.5 lakh and raising of income tax exemption on rentals from 30% to 50%. Finance secretary Arun Ramanathan is learnt to be finalising a note on required measures for easing liquidity in the housing and real estate sector for the consideration of the Committee of Secretaries (CoS).

“The finance ministry is considering demands of the real estate industry which could not translate into reality in the first fiscal package of the government,” a senior DIPP official told ET.

The official added that in the meeting of the CoS on economic crisis, held last month, Mr Ramanathan had pointed out that the recommendations made by real estate industry body Confederation of Real Estate Developer’s Associations of India for stimulating the real estate sector, including the housing sector, need to be considered. The recommendations made by the association were forwarded by the urban development ministry to the CoS.

Cabinet secretary KM Chandrashekhar had observed that construction activities need to be stimulated as this sector has considerable employment potential.

The first stimulus package had left realtors unhappy. They complained that the existing stock of unsold homes cost much more than Rs 20 lakh, so that the interest rate concession on loans up to Rs 20 lakh would not help their sale.

Public sector banks are now offering homes loans up to Rs 5 lakh at a rate of 8.5% and up to Rs 20 lakh at 9.25%. Urban development minister Jaipal Reddy has also urged Prime Minister Manmohan Singh for taking steps to rev up the real estate sector.

He sought an equal commitment from the sector in the form of price-cuts. “The commitment from the realty sector may include lowering of prices for houses and more and more investments in affordable housing,” Mr Reddy had written to PM.

Source : http://economictimes.indiatimes.com/Economy/IInd_package_to_prop_up_real_estate/articleshow/4019432.cms

Haryana beats global slowdown by attracting 3,000 cr industrial investment

Despite the current global economic meltdown, the industrial investment in Haryana has shown an upward trend with the state attracting capital investments of over Rs 3,000 crore in last six months.

Since September last when  the first signs of economic slowdown became evident in the international and domestic markets, the Haryana State Industrial and Infrastructural Development Corporation ( HSIIDC) has allotted more than 100 industrial plots  for projects involving capital investment of more than Rs 30 crore each, according to HSIIDC Managing Director Rajeev Arora. These projects are located at Integrated Modern Township( IMT) Rohtak, Growth Centre Bawal, IMT Manesar, Industrial Estate Barhi, Industrial Estate Kundli and Udyog Vihar Gurgaon.

One of the major investor has been allotted 20 acres of land to M/s ZF India Pvt. Limited, a subsidiary of ZF Friedrichshafen AG, a German multinational company, for setting up auto components manufacturing project at Bawal with an investment of Rs.250 crore.

The other  prominent allottees include ancillaries of Asian Paints, Hi-tech Plast Ltd. and Sai Baba Polymer Technologies, SHV Energy Pvt. Ltd., Block Packaging India Ltd. in IMT Rohtak; Crew B.O.S. products Limited, Nippon Audiotronix, Steca Bergen Solar Products Pvt. Ltd., Rockman Industries Ltd. (a units of Hero Honda Group), Sandhar Components, R S India Wind Energy Pvt. Limited, Prasha Technologies, Sun Vacuum Formers (P) Limited, Jai Nikki, Jay Ushin, G. Star Enterprises, Kafila Forge Limited, Real Drugs Limited, Kanodia Technoplast Pvt. Limited etc.

These projects would catalyse an investment of more than Rs.8000 crore over the next three to five years, said Arora.

In addition, the HSIIDC has drawn up ambitious plans to develop new Industrial Estates and for expansion of a number of existing Industrial Estates. Four new IMTs were being set up at Rohtak, Kharkhauda, Faridabad and Jagadhari. The IMT at Rohtak had already attracted investment from Asian Paints Limited, which was being implementing the largest manufacturing plant in Asia over an area of 160 acres involving an investment of Rs.600 crore. The project was scheduled to go on stream by January 2010. The development plan for IMT Faridabad, had been finalised and notification for acquisition of land for the other two IMTs had been released.

Arora said that apart from these IMTs, a new Industrial Estate is also being planned at Sohna in Gurgaon district over an area of 1500 acres. A Petrochemical Hub was also being developed at Panipat for the downstream industries of the Panipat Refinery. The hub was to be developed under the PPP model, in two phases over an area of 2000 acres and will have state-of-the-art infrastructure. 900 acres land had already been acquired for the project so far. Expansion plans were also afoot in IMT Manesar, Saha, Bawal, Barhi Phase III and Kundli, he added.

Source : http://indiatoday.digitaltoday.in/index.php?option=com_content&task=view&id=25945&sectionid=4&issueid=89&Itemid=1

Twists and Turns in the Bangalore Real Estate

Are you planning to set up your dream home here? It’s an excellent time, because prices are down and promotions are up. But it will help to have the cash, because loans are hard to come by in this age of recession. Real estate developers in the Karnataka capital are bending over backwards by offering cars, some even plots, for either buying a flat or booking one. The flip side is that many who had paid for their dream homes may have to wait a bit longer as several developers have stalled their projects for lack of funds.

“The past six months have been quite dramatic for Bangalore’s real estate sector. Considered the city’s fastest growing industry, after Bangalore’s IT revolution, the global economic slump has almost grounded the real estate sector,” said Girish Jain, branch manager, Jain Housing and Construction Limited. “The effect has been so huge that many developers find themselves in a lurch and customers desperately wait for the completion of their dream homes,” Jain told IANS.

Bangalore’s IT boom and corresponding growth of the economy have seen a large-scale increase in the city’s population, mostly due to migration from across India as the city has turned into a goldmine for young job hunters. According to official figures, Bangalore’s population has grown 35 percent in the last six years. With Bangalore’s current population at 8,084,676, the directorate of economics and statistics estimates that it is expected to touch 10 million by 2012.

The steady increase in population has meant a demand in housing facilities and real estate developers seized the opportunity to cash in on the boom. In the past five years, the northeast, east and southeast parts of the city, covering areas like K.R. Puram, Marathahalli, Sarjapur, Bannerghatta Road, Kanakapura Road, J.P. Nagar and Jayanagar, have seen maximum growth in real estate development. Be it residential, office and retail, the city has never experienced such fast growth in its real estate scenario.

However, the past six months changed all that. The growth rate has been almost reversed. “No survey has been done so far to estimate the exact number of unsold flats. But it could be in hundreds,” said Raj Menda, president, Confederation of Real Estate Developer’s Associations of India (CREDAI), Karnataka. “Such is the effect of global economic recession on the city’s real estate market,” he said.

CREDAI is the apex body of the organised real estate developers and builders across India. “The ripples of global economic recession have made the developers put on hold many ambitious new plans and delay those which were already under construction. Moreover, decline in demand has also severely hit the sector,” said a member of CREDAI who did not wish to be named. “In order to attract buyers in this gloomy economic scenario, many developers have come up with new strategies. Along with offering discounts as high as 10 percent on each project, developers are also lowering the price, by scrapping extra amenities, like swimming pool,” he added.

A few developers are offering gifts to attract buyers but have not met with much success. “In order to attract buyers, developers are doling out several gifts, in the form of deluxe cars, land and other premium benefits. But still builders are finding it hard to get customers,” said another member of CREDAI. While the tightening money flow has hit the industry badly, analysts say the downward trend started with the Reserve Bank of India (RBI) increasing the risk weightage for the real estate sector a few months ago. “The high risk weightage to real estate sector essentially meant a cut-down on lending to the sector – both to developers and buyers by the lending agencies,” said T. Venkatesh Babu, senior manager, market research, at Nitesh Estates. “Funds to the sector are choked as both the developer and the buyer find it difficult to secure loans. Several families have also postponed purchases. This has contributed to reduced sales, affecting project funding,” he added.

CREDAI members are, however, hopeful that the slew of measures undertaken by the central government in the last three months to ease the credit flow to various sectors of the economy would bring back buyers. The CREDAI held a two-day expo Saturday and Sunday in the city to showcase the real estate projects on offer with the slogan ‘Right Time, Right Place, Right Price’. Around 35 developers took part. “Several hundred people visited the expo and made enquiries. We are hopeful of converting many of them into buyers,” said a participant.

Source : http://www.indianrealtynews.com/real-estate-india/bangalore/twists-and-turns-in-the-bangalore-real-estate.html

Real Estate Slowdown Hits Cement Industry

The slowdown in real estate sector (residential and commercial), which accounts for about 65 per cent of the total cement consumption in India, affected the cement sector. Since most builders are facing a severe cash crunch, it is unlikely that too much real estate development will take place in the near future. The IT/ITES segments account for three-fourth of the office space across India and lower growth in employee recruitment for the sector shall translate into muted demand for cement.

Cement exports, too, have declined from 10 million tonne (mt) in FY05 to 2.1 mt between April-December 2008 on account of additional capacity addition and real estate slump in the Middle East region, which is the main export market of Indian cement producers. Demand for cement can be gauged from the country’s economic performance, with demand typically averaging 1.2 times the GDP growth. Assuming that India’s GDP will grow at 6.5 per cent and 6 per cent in FY09 and FY10 respectively, analysts expect demand for cement to grow at 7.8 per cent and 7.2 per cent in the mentioned two years, respectively. Additional capacity to the tune of 90-95 mt is expected to be added by the end of FY11. This would result in a surplus of about 10 mt and 35 mt in FY09 and FY10, respectively. “We believe with over capacity scenario inevitable and demand slowing down on account of real estate slump, further price cuts will happen post FY09,” feels Mihir Jhaveri, analyst, Religare Hichens & Co. All India average cement prices during December 2008 declined to Rs 234 per 50 kg bag (Rs 238 in November 2008). Analysts have factored a marginal decline in realisations during Q4 FY09, followed by a 5-10 per cent decline in prices during FY10.

Source : http://www.indianrealtynews.com/real-estate-india/real-estate-slowdown-hits-cement-industry.html

The Leela Palaces & Hotels & Resorts join the chain leaders at IH&RA

GENEVA – Dr. Ghassan AIDI, president of International Hotels & Restaurants Association is happy to announce that The Leela Palaces and Hotels and Resorts join IH&RA during the board meeting of Global Hotels Alliance in Leela Bangalore today. The Leela Palaces and Hotels and Resorts is one of India’s finest luxury hotel groups with properties in Mumbai; Bangalore; Goa; and Kovalam, Kerala and provides discerning business and leisure travelers a warm, memorable, and relaxed stay with 5 more properties to be opened this year and next year.

“We are proud that this year Leela joins us and joins chain leaders at IH&RA. With their properties, in addition to Hotels Association of India and two other institutes and Hospitality Colleges, India now is well represented at IH&RA. Leela is a synonym for luxury in India,” said Dr. Aidi.

The Leela Chain of Hotels under the leadership of its chairman Captain CP Krishnan Nair and the vice-chairman Mr. Vivek Nair has a philosophy in the management of their hotels where they consider that their guest is God. Taking a leaf from the Indian ancient Vedic scriptures, The Leela Chain is improving their services and facilities to serve their guests in the best way and providing luxury properties and personalized services to meet the demands of 21st-century guests.

International Hotels and Restaurants Association is working actively this year to start certifying its hotels members for sustainable development and Leela Management recognizes the need for responsible energy management and is committed to improving efficiency and protecting the environment. Their initiative has won them various national and international awards.

Vivek Nair, Leela’s vice-chairman, said, “Our Economy will continue to expand, albeit more slowly in the next couple of years, and just like the United States, we will bounce back very quickly from the last events in Mumbai.”

The International Hotels&Restaurants Association (IH&RA) is the only private association representing the private sector since 1945. Recognized by the United Nations as “the voice of the private sector in hospitality” and established in Paris in 1946 then moved to Geneva in 2008, IH&RA is moving towards the next generation. Its members include more than 200,000 hotels and millions of restaurants worldwide.

Source : http://www.forimmediaterelease.net/pm/2166.html

Indian real estate developer keeps faith in luxury real estate

Gated homes appear ever-popular with Indian real estate buyers, as a developer reports considerable interest in a scheme near New Delhi.

Jaiprakash Associates is seeing strong attention for Wish Town Klassic, at Jaypee Greens, Noida.

The township is one of a series of luxury homes schemes being developed by the firm, with all apparently bucking an emerging trend towards more modest homes.

According to the Economic Times, the group is pushing on with a number of upmarket real estate schemes despite a general slowdown in the market.

The paper says the group is also implementing

“a number of luxurious residential projects like Pavilion Court, Pavilion Heights”

all of which involve high-specification homes.

Many real estate firms are following a trend which developed in the UK, with owners looking to rent out homes instead of sell in the slowing market.

The Times adds Atul Khanna of brokerage firm Khanna Properties said:

“We are depending on the rental market to keep our business going.”

Many middle-class families have ended up renting instead of buying thanks to a proliferation of more luxurious homes.

A squeeze on lending and high interest rates has also hit the Indian real estate market.

Source : http://www.offplanpropertyexchange.com/news/2009/01/indian-real-estate-developer-faith-luxury-real-estate/645

Leading Developers Target Patna

As an endeavor to provide professional real estate solutions to its clients in Patna, MoneyBag, the strategic business unit of InvestCare, in association with Century 21, India launched ‘Real Estate Enabling Services (REES)’ on 17th January 2009 at Chanakya Hotel. In association with Century 21 India (Part of Worlds largest Real Estate Sales Organization) MoneyBag brings best of projects and structured deals to the doorsteps of Patna where the services are introduced. Now individuals seeking investment option across India will have a single window service to meet their real estate requirements from identification, diligence, financing to post sales documentation backed by professional team, unbiased opinion and constant update on investment through the local office of MoneyBag/Century 21 India.

Leading real estate developers like DLF, Emaar MGF, Assotech, Mapsko and Spire Edge work closely with this association. MoneyBag and Century 21 India will equip investors to expand their commercial and residential real estate portfolio, while ensuring trust and transparency in the transaction. Given the unstructured market scenario, lack of benchmark process and almost non existent number of organized players at the local level, the partnership seeks to empower citizens with access to opportunities in emerging metro markets. Besides opening up the buyer-seller platform, the services aim at reducing resource wastage of time and money by providing a qualified professional to assist you in all your Real Estate needs. A touch point for Developers and customer, the services will close the gap between global players and the local demographics of the city.

The association will act as a facilitator to client needs varying from buying and selling of residential and commercial properties, lease in and out of residential and commercial premises and timely update on property appreciation and scope of development. The bouquets of projects are designed to suit a wide range of investors starting from a minimum ticket size of Rs 25 lakh.

Source : http://www.indianrealtynews.com/real-estate-india/leading-developers-target-patna.html

Real Estate Slowly Becoming Buyer’s Market

Is real estate gradually becoming a buyer’s market from being a seller’s market? More than 50 of the 220 people who booked plush flats at the Seawoods NRI Estate in Nerul have stopped paying their monthly instalments. And, the developer of the two projects, City and Industrial Development Corporation (Cidco), is running after them and offering them all sorts of enticements to retain them; among the enticements is an offer to delay payment of the instalments by up to six months instead of three months. But not too many are ready for the bait.

Seven persons, who booked flats recently, withdrew their claims. Even the fact that by doing so they stand to lose between Rs 10 lakh and Rs 15 lakh has not made a difference. Cidco has deducted the earnest money deposit of between Rs 6 lakh and Rs 9 lakh on each flat and 10% of the installments they have already paid. That loss-and the scenic creek area, the Palm Beach-have not been able to convince buyers that the property is still worth Rs 7,500 a square foot.

Cidco marketing official R More said the development corporation had even brought down the interest on delayed installments to 10% (from the earlier 16%). Flat owners were also promised a 10% discount if they paid the balance immediately. However, nothing seems to be working. More bad news on the development front comes from the same zone; L&T Infrastructure has asked for permission to go slow on the ambitious Rs 6,000-crore Seawoods station development programme. L&T had won the bid to acquire the Seawoods station and land at a record Rs 1,884 crore.

Cidco IT and special projects general manager D L N Murthy admitted that L&T had requested the government to go slow on commercial development proposed on 60 lakh square feet. L&t will be developing a dolphin-shaped station complex, parking facility for over 12,000 cars, terminals and office space for Cidco and Central Railway, plazas, malls, theatres and recreational zones. The design of the station recently won an award from the Developers’ and Builders’ Association of America.

Source : http://www.indianrealtynews.com/nri/real-estate-slowly-becoming-buyer%e2%80%99s-market.html

Slowdown signs – Real estate investment plunges by 82%

According to an ASSOCHAM Investment Meter study, the real estate sector investment plans slumped drastically from INR 1,15,326 crore in Q1 FY 208-09 to meek INR 22,482 crore in the Q3 of the fiscal. Owing to tighter credit and a steep decline in demand, CAPEX announcements of the sector plummeted 82% between the first and the Q3 of the fiscal.

The real estate sector investments declined from INR 115,326 crore in Q1 FY 2009 to INR 36,400 crore in the Q2 owing to the aftermaths of monetary policy stance which kept interest rates higher to cool off then soaring inflation. The spike in interest rates led to a fall in housing and commercial demand for the sector. During the period the central bank raised its repo rate by 75 basis points to 8.5%.

During the Q3, a sequential decline of 38% in the CAPEX announcements of the sector, to INR 22, 482 crore from the previous quarter could well be attributed to the buoyant call rates in the money market. With the banking sector’s increased reluctance to lend, the freezing credit situation had its share in drying up the sector’s investment plan.

Despite a huge shortage in the housing sector requirements, the demand has declined due to higher interest rates and economic slowdown. According to an Assocham study “Reality check on Real Estate”, India has a housing shortage of about 19.4 million units. It is also estimated that an additional 45 million units would be required during the 11th plan. The slowdown in the housing sector demand is adding to the pains of the sector as it constitutes almost 80% of the Indian real estate development.

Mr Sajjan Jindal President of ASSOCHAM in Real estate sector investments: Assessment & Outlook said that “Even as the economy face major shortage of housing and commercial space, the subdued demand due to high interest rates, credit tightening and global financial crisis have dampened the real estate investment plans. The capital expenditure announcements in the sector have witnessed a sequential decline of 68% and 38% in second and Q3 of the fiscal so far.”

Mr Jindal said that “Even though the real estate sector investment plans have dried up considerably, the swift policy actions announced by the government and the RBI are likely to act positively in reviving the demand and address the funding problems of real estate players.”

The sector witnessing a plunge in demand by up to 50% leading to a drop in prices by 15% to 20% has dampened the investment announcement in the sector during the first three quarters of the fiscal.

The number of projects announced by the domestic real estate companies also declined from 16 in Q1 to 10 in Q2 and 11 in Q3 FY 2008-09. Among the top 5 investment announcements for the sector, In May 2008, Omaxe had announced the biggest CAPEX plan worth INR 80,000 crore to develop 10 lakh affordable homes in Haryana & Rajasthan during next 5 years.

On the outlook for the sector the study stated, with the concentrated efforts of the government and the central bank to heal the Indian real estate sector which is crippled by credit freeze and falling demand, the stimulus packages for the sector along with the lowered interest rates are expected to revive the sector; provided the lending to the sector is made smooth and consistent. Meanwhile, the main challenge as to remain on demand side, with demand of commercial property in doldrums because of the sinking business confidence, the residential demand could improve due to lower interest rates. The swift policy actions like cheaper home loans up to INR 20 million may push up the demand

Source : http://steelguru.com/news/index/2009/01/19/NzkwNjg%3D/Slowdown_signs_-_Real_estate_investment_plunges_by_82%2525.html

More cuts in home loan rates expected

At a time when the equity markets are being bombarded with bad news, borrowers have been having a good time. The interest rates have been coming down steadily and more banks have come out with home loan interest rate cuts. As a result, home loans of most banks have slipped below the 11 percent level and indications are that the stage is set for the next round of rate cuts.

If the interest rates are showing a negative bias, it is largely due to the changes in the macroeconomic factors. As you would have noticed, inflation, which pushed the central bank to tighten the monetary situation has eased considerably and is well within the manageable range of six percent. The outlook for interest rate is even better with the general expectations of a further fall in the index. In fact, economists have been vocal that the inflation rate could slip to 3-4 percent in the coming two quarters.

While such a forecast looked unthinkable 2-3 quarters ago, the change in scene has been a result of a combination of various factors and crude oil price dropping has been the primary driver. The fall in crude oil price has been more dramatic than its rise to above USD 140 a barrel during the last year. The general weakness in the global economy has pushed the prices further down. The effect of crude oil price dropping has been significant on commodity as a sector. The price fall has been sharp in the last quarter in all metals. Barring gold, most commodities have fallen by 30-40 percent and this augurs well for the interest rate scenario as it ensures inflation remains under check.

For the borrower, that should be good news as lower inflation would enable the banks to lower the home loan interest rates. Since the downtrend has affected the borrowing sentiment to a great deal, banks are likely to step up their efforts to push lending. At present, however, banks have been wary of lending but the deposits they mobilise will have to find their way into loan books as lending is an integral part of financial services.

It is in this background that the individual borrower has to work out his borrowing strategy and should go back to the days of the floating rate option. As you are aware, even during the early part of this decade, interest rates had touched a peak of 16-18 percent and fell sharply to a 9-11 percent range. The sharp fall was more in the case of home loans as that was a preferred asset product for many. However, there is a small difference in the current scenario as interest rates have begun their downward journey before testing the seven-year old levels. More importantly, the size of the market – both for property and loans – has quadrupled in less than a decade. As a result, the average size of the loan which was in the range of Rs four lakhs at the beginning of the decade is in double digits and average ticket size has gone up to Rs 15-20 lakhs in metros. That is also the reason why the benchmark for concession is pegged at Rs 20 lakhs.

Such measures are likely to redefine the property market in the short to medium terms and you already see plenty of action in the mid-price property segment . Since there is also a good demand-supply gap in the mid-sized properties, this could lead the market recovery in the coming days.

Source : http://economictimes.indiatimes.com/More_cuts_in_home_loan_rates_expected/articleshow/3995809.cms

Hyatt Corp in JV with Emaar MGF to build hotels in India

NEW DELHI: US-based hotel chain operator Global Hyatt Corporation announced a 24:76 joint venture with property developer Emaar MGF for buildingsix hotels in India by 2013. The two partners will jointly invest about Rs 1,000 crore(~$200 million) to build these hotels under the mid-market brand Hyatt Place.

Besides picking a minority stake in a JV with Emaar MGF, Global Hyatt has signed management contracts with different individual property developers for another 14 hotels under its premium brands-Park Hyatt, Grand Hyatt and Hyatt Regency. Under the management contract, the real estate developer sets up the hotel and the hotel operator charges a management fee from the real estate developer to manage the hotel.

Global Hyatt Corporation global head-real estate & developments Steve Haggaerty said, “We will spend about $ 200 million on six hotels jointly with Emaar MGF. This investment would be a mix of equity and debt and we are in the process of raising the debt component.”

He added that Global Hyatt Corporation on its own will invest $20-25 million as equity into the six hotels to be located in Gurgaon, Hyderabad, Mysore, Lucknow, Indore and Mangalore. These hotels will add upto 950 rooms with the first hotel planned to open by 2011.

“We have also entered into management contracts with several local real estate developers to open 14 hotels with an inventory of over 3,000 rooms by 2013,” said Global Hyatt Corporation senior vice president-South Asia Ratnesh Verma. These premium hotels will be build in cities such as Kolkata, Hyderabad, Mumbai, Chennai, Goa and Pune.

Talking about the impact of the global economic slowdown, Mr Haggerty said that occupancies and demand has softened at its existing five hotel properties in India.

“There are concerns about how several real estate players that entered the hospitality sector have scrapped their plans and delayed their projects. However I would like to assert that under our JV with Emaar we have already acquired land for the six hotels and construction for the other 14 hotels is in various stages,” he added.

Source : http://www.indiarealestateblog.com/?p=2333

Investing companies keen to invest in mid market and budget segments

The global economic slowdown has seen its effects on the Indian hospitality sector as well due to which the industry overall is observing a lack of fund inflow especially, equity. Gathering a perspective from the investors with the point of view on returns, Hotel Investment Forum India (HIFI) conducted a panel discussion moderated by Eric Levy, Managing Director, Tourism Solutions International Pte Ltd The panellists included Balaji Rao, Managing Director, Starwood Capital Group; Rahul Nair, Executive Director, Future Capital Real Estate, Louis Klein, Managing Director, IREO and Dilip Puri, CEO, Duet India Hotels Limited.

One common view emerging from all the investing companies remained that they wanted to focus on the mid market and the budget segment hotels. Starwood Capital Group is a billion dollar global hospitality fund while Future Capital Real Estate has dedicated about USD 200 million for its hospitality portfolio. Klein adds that its USD 1.1 billion equity fund will focus on large scale mixed use development projects.

Source : http://www.hospitalitybizindia.com/detailNews.aspx?aid=3213&sid=1

India Government approves Modern India warehousing SEZ

Projects today reported that Modern India Free Trade Warehousing, a flagship company of Modern India has received an in principle approval from the Union government for its warehousing SEZ planned at Panvel in Raigad district of Maharashtra.

The planned SEZ is 18 kilometer away from Jawaharlal Nehru Port Trust and 9 kilometer to 10 kilometer away from the new international airport. The SEZ entailing an investment of INR 375 crore will spread over 40.47 ha.

Modern India has to acquire land for the SEZ and start the process of financial closure. It is in discussions with logistic companies in Japan, West Asia and China to enlist them as partners in the project. In the warehousing SEZ, people can import, repair, repack and export products from the zone itself.

As per report, it has also received approval for setting up an IT SEZ in Khopoli. The real estate company will invest around INR 1,100 crore, of which INR 450 crore will be debt and the remaining will be equity. It will create infrastructure for both hardware and software industries in the upcoming IT SEZ.

Source : http://steelguru.com/news/index/2009/01/18/Nzg5ODA%3D/India_Government_approves_Modern_India_warehousing_SEZ.html

Affordable Housing Sees High Demand in Mumbai

The unprecedented rush for flats constructed by the Maharashtra Housing and Area Development Authority (MHADA) has proved that even in times of recession there is a huge demand for affordable housing in Mumbai. Mhada’s affordable housing scheme for the economically weaker, lower, middle and higher sections of society has seen upto 1.89 lakh application forms picked up till Tuesday evening. All this for only 3,863 flats. The surge from potential home buyers for Mhada flats comes at a time when private developers are struggling to sell their apartments, mainly high-end ones that are out of the reach of the average Mumbaikar. Despite the stagnant property market, most developers are resisting lowering their rates, although some have reduced them marginally by 10% to 15%.

“Builders should realise that their days of profiteering are over,’’ said former bureaucrat and real estate consultant Zafar Iqbal. Reacting to the phenomenal demand for Mhada flats over the past two days, Iqbal said the housing recession is only for the “crazy fellow’’ willing to shell out over a crore of rupees for a flat. “I have always maintained that there is a huge demand for housing in the range of Rs 20 lakh to Rs 30 lakh,’’ he added. Iqbal, who was in charge of land acquisition under the now abolished Urban Land Ceiling (Regulation) Act more than two decades ago, said private developers are not catering to home buyers in this category. “They are running their businesses like a glamour show, catering only to big names,’’ he said. According to him, the city will soon implode because of lack of public housing. “People will begin to move out of the city,’’ he predicted.

Builder Niranjan Hiranandani said the response to the Mhada housing scheme “vindicated’’ his claim that there will always be a huge demand for homes. Asked whether private developers should reduce their prices, Hiranandani said this has got nothing to do with property rates. “If there is adequate land with permissions and if banks and financial institutions start lending money to home buyers and builders the way they should, the market will revive,’’ he said. Jaidev Mody, chairman of Delta Corp Ltd, a real estate, hotels and gaming company, said the segment of home buyers who rushed for low-cost Mhada flats was never affected by the recession. “I am not surprised. Builders should now focus on low-income housing because there is a shortage of such units,’’ he observed.

Former Mhada president and housing activist Chandrashekhar Prabhu said the middle class in Mumbai finds itself marginalised today. “On the one hand, it cannot afford flats put up by private developers and, on the other hand, they are not law breakers who will squat on public land,’’ he said. Architect and housing activist P K Das said builders have never built houses for the poor.

“There is a clear disconnect between the hype that there are no sales of flats and the pent-up demand for Mhada’s housing projects. I have always argued that it is the government’s responsibility to provide mass housing. It cannot be left to the developers alone,’’ he said.

In Mumbai, 60% of the population lives in slums, 5% live on pavements, 15% are tenants living in old cessed buildings and about 5% live in rental housing. “Barely, 15% of Mumbaikars live in private houses,’’ Das pointed out. Prabhu,however, blamed Mhada for abdicating its role in setting up mass housing. “Under pressure from politicians, the housing authority, over the years has transferred land to private developers,’’ he alleged. According to government sources, many politicians have huge stakes in slum redevelopment on Mhada land. “A politician lets his cronies encroach on a Mhada plot by setting up shanties. Soon, a frontman of the elected representative approaches Mhada officers for permission to redevelop the slum,’’ explained a source. For over a decade, hundreds of plots in the city have been arbitrarily allotted to societies or trusts, many of which are reportedly controlled by politicians or their kin.

Source: http://www.indianrealtynews.com

Luxury real estate market takes a hit

NEW DELHI: The luxury sector may have been perceived as recession proof. But there is a visible dip in demand that is now being seen in the luxury Real estate: A good hedge

SundayET’s survey with global real estate consultancy Cushman and Wakefield (C&W) revealed that average capital values of luxury properties in posh localities across major metros have taken a dip of 10%-20% during the last three months.

Residential rental values for the same segment have also been impacted, with some locations witnessing a drop as high as 20-25%.

Take the case of Delhi, for instance, where residential capital values of high-end properties such as Shanti Niketan, Westend and Vasant Vihar, GK I and II and Maharani Bagh have dropped to 10% over the last three months. Rental values have also followed a similar track and have seen a 6% drop over the same period.

Rajeev Talwar, executive director, DLF agrees to the fact that there has been a genuine drop in this segment.

“A 25%-30% drop has been seen in capital values for these luxury properties. Luxury buyers also plan their investment cycles, hence it is only natural for them too to cut down on spending. Sales are currently going on even in the luxury sector…no segment is unaffected by recession which is a worldwide phenomenon.”

The case is similar in other swanky localities in metros. Areas in South central Mumbai such as Altamount Road, Carmichael Road, Malabar Hill, Napeansea Road and Breach Candy have seen a drop of 7% in average capital values during the last three months.

The impact has been more visible in the rental values in these areas where a drop to the tune of 19% is being witnessed whereas locations in South Mumbai such as Colaba, Cuffe Parade, Nariman Point and Churchgate have seen a drop of 12% in rental values over the same period.

Niranjan Hiranandani, MD of Mumbai-based Hiranandani Developers feels that there has been a temporary respite in demand in this segment. “Demand has not taken a dip…it is a temporary phenomenon. There has been a drop of 10-20% in capital values for luxury buys. People are basically postponing their buying decisions and waiting for liquidity conditions to improve.”

Kolkata, however has seen more of a drop in residential rental values in the high-end segment. Areas such as Southern Avenue and Dover Lane in South Kolkata have seen a sharp drop of 20% during the last three months.

While sought after locations such as Ballygunge, Queens Park and Gurusaday Road have seen a drop of 12% during this period.

The drop has been slightly more in South West locations like Alipore Park Road, Ashoka Road and Belvedere Road which are seeing a drop of 22% in rental values. Average capital values, though, have not seen much of a change during the same period.

On the contrary, down south in Bangalore, it is more of the capital values in the high-end segment that have taken a beating. Sought after areas such as Lavelle Road and Richmond Road in central Bangalore have gone down by 9%. Residential rental values for the high-end properties in the same locations have however not been affected during this period.

Hyderabad is seeing more of a decline in residential rental values in the previous three months. While posh Banjara Hills in central Hyderbad has seen a marginal drop of 4%, other locations such as Jubilee Hills also in central Hyderabad have seen a drop of 5%. Average capital values have, on the other hand, increased by 5% in these locations.

Residential capital values for the high-end segment in Chennai have seen a drop of 7% in R. A. Puram in South Chennai while it has been only 1% in Boat Club. There has been no change in rental values for the same period.

Similarly, Pune’s capital values have remained unaffected in most desired locations such as Koregaon Park and Bundh Garden in North East Pune.

Source : http://economictimes.indiatimes.com/Market_News/Luxury_real_estate_market_takes_a_hit/articleshow/3995443.cms

Prices Down but Buyers Not Interested

Residential properties in areas such as Dahisar, Mira Road, Vasai and Virar are slowly becoming affordable for the middle-class, as real estate developers, for the first time, have started bringing down property rates. “The prices have come down by 10-15%, and most developers are willing to bargain for a cheaper rate,’’ admits a real estate developer, who was participating in the three-day property exhibition in Kandivli that began on Saturday.

Real estate in places beyond Dahisar did not enjoy the same boom that swept Navi Mumbai over the last five years, mainly because of lack of infrastructure, water supply and power shortages. “But over the last two years, prices rose due to the boom in the economy, and even in areas like Virar and Vasai the property rates went up by 25-30%,’’ said Sanjay Thakker of Aangan properties. But though this trend has begun to reverse, few people are biting. Buyers are opting for the wait-and-watch approach. “We feel that property prices, especially in areas like Borivli and Kandivli are still very high. Developers should realise that the economy has slowed down, and if they want to sell their flats, they need to reduce their rates,’’ said Borivli resident Pradeep Kumar who was one of the few visitors at the fair.

In an attempt to woo potential buyers, developers are giving away freebies like cars, LCD TVs, modular kitchens, refrigerators and washing machines along with sale of every apartment. “We are giving buyers the option of taking home a car, or alternatively, offering a reduction of Rs 200 per sq ft for the sale of every flat at the residential project that near Thakur Mall, Dahisar,’’ said an official with Chamunda Developers. Virar-based builders, Tirupati Constructions, are offering free stamp duty and registration, a modular kitchen and an LCD colour TV to the first 25 buyers, at its upcoming project in Virar. “We have kept the rates at around Rs 17.30 lakh for a two BHK flat,’’ said an official with Tirupati Constructions.

Market watchers welcome the move. “In such times, builders should think out of the box as regular pitches may no longer work. They should provide better amenities, and sweeten the deal with competitive rates,’’ said Anuj Puri, chairman, Jones Lang Lasalle Meghraj.

Source : http://www.indianrealtynews.com/property-prices/prices-down-but-buyers-not-interested.html

9 SEZs Get Govt Approval

The government today approved nine special economic zone proposals, including the Navi Mumbai SEZ promoted by Reliance Industries Chairman Mukesh Ambani’s close aide Anand Jain. The Board of Approval in the Commerce Ministry gave seven ‘formal’ approvals, while two were given ‘in-principle’ clearances. The BoA, chaired by Commerce Secretary G K Pillai, considered 12 proposals in all. Formal approval was given to the Navi Mumbai SEZ, JSW Aluminium SEZ, agro-product SEZ by Anand Agrochem India, and Kerala Infrastructure’s IT project, since the promoters of these have land.

Larsen & Toubro’s proposal for an IT SEZ was deferred “because there was no clarity on land,” Pillai told reporters after the BoA meeting here. The Anand Jain-promoted Navi Mumbai SEZ is promoting different tax-free enclaves. There is a ceiling of 5,000 hectares on a single SEZ. In-principle approvals were granted to Lepakshi Knowledge Hub Pvt Ltd’s multi-product tax-free enclave in Andhra Pradesh and Karaikal Port SEZ. The government has so far given formal approvals (those possessing land) to 552 projects, of which 278 have been notified and 87 are operational.

Source : http://www.indianrealtynews.com/sezs-india/9-sezs-get-govt-approval.html

ING Real Estate to Invest in India

Dutch property manager ING Real Estate plans to invest in India, Turkey, Europe and the Americas to meet demand and benefit from relatively high returns. The real estate unit of financial services division of ING Group, which managed 94.4 billion euros ($130.2 billion) in property globally as of March 31, plans to invest 0.5 to 1 billion euros in these two countries by early 2008.

Returns in India and Turkey are expected to be higher than the 4-7 percent generated in Western Europe and North America. Increased demand from customers is another reason for ING Real Estate’s expansion into these two markets. ING Group desires to participate in markets that grow. This is also a reason why they started investing in Scandinavia in 2005 and central Europe in 1993. ING has been in China since the early 1990s.

ING Real Estate, which last year bought Canada’s listed Summit Real Estate Investment Trust, does not plan to take over local companies in India or Turkey. The company is also eyeing investments in Western Europe and the Americas via its Atlas Infrastructure Fund, set up earlier this year. This is the market where investors want to be now.

Today, one should think of returns between 12 and 14 per cent on infrastructure projects. Therefore, ING Real Estate would not quickly make investments in East European countries such as Ukraine and Russia, as they lack sufficient availability of investment grade property, transparency, and a stable legal system, thereby making investment returns not very attractive.

Source: www.mybangaloreproperty.com

Luxury hotel brand plan major thrust in India news

The hotel industry has been bucking the recesionary fears of its global counterparts, with luxury hotel brands announcing aggressive expansion plans.

Though there has been a sharp decline in occupancy rates, the expansion trend seems to indicate a growing confidence in the sustainability of India Inc. On an average hotels need a 54-per cent occupancy to break even.

The new investment in the hotel industry has been spurred by the government’s decision to bring in hotels under the infrastructure category, with a five-year holiday from holiday from income tax for two- , three- and four-  star hotels as well as for convention centres with a seating capacity of 3,000 plus capacity in the National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar constructed between 1 April 2007 and 31 March  2010.

Three international hotel chains have announced expansion plans in India in the last few days.

Marriot International
Marriot International has unveiled a plan to triple its hotel portfolio in India by 2012. The US-based hospitality chain manages more than 2,800 properties (130,000 rooms) across the world under brands like Ritz-Carlton, JW Marriott, Renaissance, Residence Inn and Courtyard.

Of the scheduled seven Marriott hotels, one will be JW Marriott luxury hotel and Marriott Hotel & Convention centre and the rest will be set up as Courtyards, a mid-market hotel brand by the multinational hotelier.

Hilton group
The Rs140-crore real estate company JMD Group has enterd into the hotel business in India by roping in the US-based hospitality group Hilton Hotels’ Doubletree brand of luxury hotels.

The Delhi-based company will spend around Rs150 crore over the next two years to establish three hotels.

A 187-room hotel will open in Gurgaon in March next year ahead of the Commonwealth Games. Forty five per cent of the work has been completed.

Besides, Gurgaon and Ludhiana will have one four-star hotel each, consisting of between 125-140 rooms.

Hotel Leelaventures
Hotel Leelaventure, a luxury hotel chain operator will invest Rs2,500 crore to set up three new luxury hotels in different cities over the next 18 months.

With the addition of new capacities, the company aims to double its turnover to Rs1,000 crore by end of FY10 from Rs514 crore posted during the last financial year ended 31 March 2008.

New Leelaventure hotel properties will come up in Chennai, New Delhi and Udaipur, increasing its room inventory to almost 2,000 rooms from 1,125 rooms at present.
The company plans to tap into funds raised through FCCBs for the expansion.

The New Delhi property will be located in the Chanakyapuri area, which will serve the Commonwealth Games also to be hosted by the national capital in 2010.

Investments prove negative forecasts wrong
In December accountancy firm PricewaterhouseCoopers forecast US demand for hotels in 2009 to fall by 2 per cent which, when coupled with an increase in supply, would reduce occupancy levels to 58.6 per cent — the lowest since 1971.

This represents the first consecutive two-year RevPAR decrease since the 7.0 per cent and 2.7 per cent decrease in 2001 and 2002, respectively.

According to the PwC forecast, 2008 RevPAR would decrease by 0.8 per cent, primarily due to a 3.7-per cent decrease in occupancy, the highest annual decrease in occupancy since 2001. In 2009, it projected a demand forecast decrease of 2.0 per cent, which, when coupled with a 1.6 per cent increase in supply, is expected to further reduce occupancy to 58.6 per cent, the lowest since 1971.

As a result, hotels are expected to continue to lose pricing power, resulting in an ADR decrease of 2.4 per cent, which, coupled with a 2.1 point drop in occupancy, is expected to decrease RevPAR by 5.8 per cent, the greatest annual decline since the 7.0 per cent drop in 2001.

PwC’s revised forecast reflects recessionary economic forecasts by Macroeconomic Advisers, LLC, of three consecutive quarters of declining GDP, beginning with the decline in the third quarter of 2008, and resulting in forecasted GDP growth of just 0.2 per cent for 2009 overall.

Despite the slow growth projections, the Hilton group is upbeat on India. It has 20 hotels with a combined capacity of with 3,500 rooms in various stages of development, with the first two scheduled to open in Delhi and Chennai this year.

Martin Rinck, who took over as the president Asia Pacific of Hilton Hotels Corporation a few months back, told  the Business Standard in an interview that of the 120,000 rooms in India only 39 per cent were branded properties. “This means that the whole of India has less branded rooms than Manhattan Island,” he said.

Rinck said that the unprecedented slowdown did not alter the underlying potential for growth in India, especially in business hotels as tourist arrvals in India were expected to double in the next five or six years from the five million arrivals in India recorded in 2008.

“With the growth in domestic travel, the demand for branded accommodation will only grow,” he told the busines daily.

Even though as a core brand Hilton would be the key driver for growth , Rinck told the business daily, the group planned to bring other brands  such s Hilton Inn Garden, Doubletree by Hilton, Homewood Suites by Hilton, Hampton by Hilton.

“We have a JV with DLF that’s job is to secure the land and develop the projects; the JV in turn has a management agreement with Hilton. We have a franchise deal with Marigold Hospitality for 16 Hampton hotels. We have an agreement with Shiva to develop 2,000 rooms, and on Wednesday, we signed a deal with JMD to develop 160-room Doubletree hotel in Gurgaon.

The long term potential is very strong. We intend to have 50 hotels in India by 2015, when India could account for 15-20 per cent of our Asia-Pacific revenues. The other statistic that shows India’s potential is that 17 per cent of Hilton’s new projects in Asia-Pacific are coming up in India, next only to China (63 per cent). There’s no so much underlying demand for branded hotels…”

Source : http://www.domain-b.com/industry/Hotels/20090116_luxury_hotel.html

HDFC Deducts Interest Rates on Home Loan for New Borrowers

Housing Development Finance Corp (HDFC), the largest home loan lender is cutting interest rates on home loans. This comes after it cut rates in mid December by 0.5 per cent. It says it is looking to reduce home loan rates for new borrowers.

HDFC Says, new home loans upto Rs 30 lahk to be available at 9.75 per cent and home loans above Rs 30 lakh to be available at 10.75 per cent. Decision of home loan rate cut is to be formally announced on Monday. In December HDFC had reduced interest rates by 0.5 per cent. For Rs 20 lakh loan interest rate was cut to 10.25 per cent while loans above Rs 20 lakh, rate was cut to 11.25 per cent.

Source : http://www.indianrealtynews.com/home-loans/hdfc-deducts-interest-rates-home-loans-for-new-borrowers.html

Affordable homes are back

HOUSING: Developers are working around the Rs 20-lakh figure.

Winds of change are sweeping across the real estate sector. After creaming the top end of the market for some years, reality has finally sunk in and builders are now flooding the market with affordable homes.

Ever since the government announced that state-owned banks will provide home loans up to Rs 20 lakh at not more than 9.25 per cent for the first five years, real estate developers have started working their prices around the Rs 20-lakh figure.

Dozens of real estate developers have announced homes at below Rs 25 lakh in the National Capital Region of Delhi. Till some months ago, such prices were totally out of fashion. Developers blamed high prices on the astronomical cost of land and the ever-rising prices of steel and cement.

The correction started happening around Diwali in October when developers, faced with large unsold inventories, started throwing in hefty discounts and freebies like cars. Prices have now fallen back to their 2004-05 levels.

Huge auction of government-built flats in Delhi and Mumbai too has played a role in this. While the Delhi Development Authority has built some 5,000 flats, the Maharashtra Housing and Area Development Authority earlier this week threw open booking for 3,865 flats. The response was tremendous — people queued up in front of bank branches at 4:00 am!

Non-metro cities across the country too have on offer ready-to-possess flats well below Rs 20 lakh. For instance, a recent scheme launched by Ansal in Lucknow is learnt to have been hugely oversubscribed.

At a property exhibition in Delhi last week, city based real estate players like SG Estates, Assotech, KDP Infrastructure, Shreya Developwell and others displayed over a dozen ongoing and future housing projects in the Rs 20-lakh range. IDBI Bank officials, who organised the exhibition, said the customer interest in the projects was encouraging against the general slump and over 300 potential customers registered for loan queries.

99acres.com, a leading online portal says that over the last two months, it has seen a growing interest among visitors to search for houses in the mid-price range (Rs 15 lakh -Rs 25 lakh). “Almost 50 per cent of enquiries that reach the portal are for this segment,” Vineet Singh, business head, 99acres.com says.

“The government’s initiative will definitely encourage more affordable housing projects, though it will mostly be in the non-metro cities of the country,” Rohtas Goel, chairman and managing director of Omaxe, says.

A Mumbai-based official with the State Bank of India’s personal loan section says the excitement of the offer is already visible among the customers and real estate players: “We need to wait till the end of the offer period (June 2009) to quantify the number of home loans that are sanctioned under the concessional scheme, but there is tremendous interest. The customers are in the process of enquiring before they can approach the banks for home loans.”

While the real estate players in the metros are restructuring their new projects to accommodate the interests of the sub-Rs 20 lakh housing customers, other cities are finding sudden demand for their existing properties.

“Even before the stimulus package, we had several projects that came within the parameters of affordable housing. The demand for such homes has increased since then,” C Shekhar Reddy, the president of Andhra Pradesh Builders Forum, says.

Prakash Chella, the chief of the Tamil Nadu chapter of the Confederation of Real Estate Developers Association, adds: “Real estate prices had not appreciated in smaller cities as it had in metros. In southern states, flats within Rs 20 lakh are available.”

Terming it as the birth of affordable housing, real estate consultancy JLL Meghraj anticipates more national players to launch affordable housing projects in 2009. “However, since different cities will have different costs for land and construction of such homes, developers will have to define ‘affordable housing’ on a city level,” a JLLM report says.

This augurs well for the economy. The task force on affordable housing headed by HDFC Chairman Deepak Parekh had in its report noted that alleviating the urban housing shortage could potentially raise the rate of growth of GDP by at least 1-1.5 per cent and have a decisive impact on improving the quality of life.

The 11th Five Year Plan estimates the urban housing shortage at the commencement of Plan period at 24.7 million units, with 99 per cent of this shortage pertaining to the economically weaker sections of the society.

Source : http://www.business-standard.com/india/news/affordable-homesback/00/40/346319/

Office rentals falling in Indian cities: Report

New Delhi, Jan 15 (IANS) Office space rentals in India’s metros and larger cities have been falling since the last financial year, according to a report released Thursday by global real estate consultancy CB Richard Ellis. The India Office Market View report on office spaces in major cities said vacancy levels have increased and rentals were corrected because of dampened demand.

While the office markets of Chennai recorded the least correction (6 percent) in the third and fourth quarters of 2007-08, the maximum (30 percent) was experienced in the Extended Business District of Mumbai.

In terms of rental values, the peripheral markets of Gurgaon and Noida witnessed a drop of approximately 12 percent and 16 percent respectively in the fourth quarter of 2007-08, as compared to the previous quarter.

The NCR Real Estate Market is fast changing from a “sellers’ market” to a “buyers’ market”, it said, adding that India’s technology hub Bangalore witnessed about 30 percent vacancy with IT firms slowing down fresh acquisition plans.

“The office space demand which moderated in the first two quarters, tapered off by the end of the year. Fresh commitments and pre-leasing of under-construction developments underwent a noticeable drop a fact stemming from the US financial crisis,” the report said.

Observed Anshuman Magazine, chairman and managing director of CB Richard Ellis (South Asia): “The real estate sector in India has mirrored the global economic conditions that are unfurling. The next few months are likely to be a time of subdued demand.”

Source : http://www.thaindian.com/newsportal/uncategorized/office-rentals-falling-in-indian-cities-report_100142883.html

USEL plans Rs 87,000 cr investment

Singapore-based Universal Success Enterprises Ltd (USEL) signed three MoUs with the Gujarat government at the ‘Vibrant Gujarat Global Investors’ Summit 2009, committing to invest close to Rs 87,000 crore in the various infrastructure projects in the state over the next 10 years.

According to the company officials, this is one of the largest investments committed by any single corporate house in the country at this year’s Vibrant Gujarat summit.

The investment would be made primarily in the area of thermal power generation, sea ports and industrial and urban infrastructure development and is expected to generate employment for more than 50,000 people across the state.

Announcing this investment, Prasoon Mukherjee, chairman Universal Success Enterprise Limited (USEL) said, “We had initially planned a small thermal power project but the state leadership convinced us within four months for the outlay that we have committed.”

As a part of the MoUs, USEL would be setting up a 10,000 mw thermal power plant with an investment of about Rs 50, 000 crore. The company, still in process of identifying a suitable location, said that 5,000 people will get employment in this project.

The project would use imported coal from group owned captive mines as fuel and will have a dedicated port terminals for import of the coal. The port project involves the development of port terminals and related infrastructure initially for bulk cargo for the power plants and gradually will be upgraded as a commercial port for all kinds of cargo.

The development of the port terminals and related infrastructure is expected to cost about Rs 7,000 crore for which port land and shorelines are currently being identified. Besides the above, the other major investment includes the mixed use industrial and urban infrastructure development, at Dholera SIR near Ahmedabad. This project will be constructed on an initial area of 5000 acre with an investment of about Rs 30,000 crore. This project alone will generate a employment opportunity for 50,000 in the state of Gujarat.

Mr Mukherjee added that, “USEL’s expertise lies in developing end to end large scale infrastructure projects and we would partner with world’s best infrastructure con­sultants to maintain high standards and meet the set time lines for execution.”

The company entered India in 2003 and started its Indian operations with large investments in the state of West Bengal where it is developing New Kolkata International Development (NKID) which involves construction of a 130 km express highway and a 3.5 km bridge across the river Hoogly to connect Kolkata and Haldia. The project involves the development of PCPIR in Nayachar island besides integrated Industrial commercial and residential township projects, besides a health city and knowledge city.

Source: The Economic Times

Doubletree by Hilton signs first hotel development deal in India

Hilton Hotels Corporation today announced that it has signed a long-term management agreement with JMD Ltd., a leading property developer, for a Doubletree by Hilton hotel in Gurgaon, India. This not only marks the first Doubletree by Hilton development deal in India, it also marks the foray of JMD Ltd. into the hospitality business. The 182-room, new-build Doubletree by Hilton Gurgaon is scheduled to open in 2010 in this fast-emerging commercial hub in the National Capital Region.. Gurgaon is a prime investment destination for Information Technology and IT-enabled services and continues to develop what is becoming a leading commercial district during the next several months.

Martin Rinck, President Asia Pacific Hilton Hotels Corporation, commented, “India’s hotel market has enormous potential, due to its low penetration and the combination of a growing trend for travel and increasing socio-economic development. We believe the contemporary and relaxed style of the upscale Doubletree by Hilton brand will prove to be popular with travellers in India and from abroad.”

As one of the upscale hotel brands in the Hilton Family of Hotels, Doubletree by Hilton will introduce business travellers and tourists in India to the brand’s longstanding tradition of distinctively designed hotels that reflect the destination and surrounding area. Other Doubletree by Hilton characteristic qualities include the warm worldwide welcome of the brand’s legendary chocolate chip cookie to every guest at check-in, the rewards of the prestigious Hilton HHonors® loyalty programme and a unique and caring commitment to the communities in which they operate.

“We are delighted at the international momentum we have gained behind development of the Doubletree by Hilton brand. With more than 200 hotels in some of the most desired business and leisure destinations worldwide, our entire brand team looks forward to expanding our brand to India by building a collection of fine hotels that share the same core attributes, impeccable service and a sense of contemporary style and individuality,” said Dave Horton, senior vice president – brand management for Doubletree Hotels.

Doubletree by Hilton Signs First Hotel Development Deal In India 2-2-2-2

The Doubletree by Hilton Gurgaon will be situated along a major highway, running through some of the prime and up-market areas of the district, which are home to several IT businesses. Amenities and services at the Doubletree by Hilton Gurgaon will include over 860 square meters of meeting space including a ballroom and a business centre featuring the latest technology to facilitate seamless business meetings and global communication. Guests will be able to relax and rejuvenate at the hotel’s Doubletree Fitness by Precor fitness centre, and its spa and swimming pool.

An all-day dining restaurant will serve an array of local Indian cuisine and international fare. The hotel will also have a lobby lounge and bar and a speciality restaurant. Retail outlets and a car park within the property will ensure guests a stay of comfort and convenience.

Mr. Sunil Bedi, CMD JMD Ltd, commented, “This is the first time that JMD Ltd has ventured in to the Hospitality industry. JMD is renowned name in the real estate arena and has always strived to deliver only the best both in terms of construction quality and property location. In order to carry on this legacy of defining quality JMD wanted to go with only the best for its hospitality venture. Given Hilton Hotels Corporation’s track record and renowned worldwide brands, it was not only the obvious choice but the only choice for us. We are extremely glad to introduce the successful Doubletree by Hilton brand here.”

In addition to being a major business travel destination, New Delhi has a host of historic and cultural tourist attractions including The Qutub Minar, The Red Fort, Jantar Mantar and Humayun’s Tomb. It is also the gateway to Agra (home of the Taj Mahal), Jaipur, Udaipur and other cities of Rajasthan.

About Doubletree Hotels

With a growing collection of contemporary, upscale accommodations in more than 200 gateway cities, metropolitan areas and vacation destinations worldwide, Doubletree by Hilton hotels and resorts are distinctively designed properties that provide true comfort to today’s business and leisure travelers. From the millions of delighted hotel guests who are welcomed with the brand’s legendary, warm chocolate chip cookies at check-in to the advantages of the award-winning Hilton HHonors® guest reward programme, each Doubletree by Hilton guest receives a satisfying stay wherever their travels take them.

Doubletree features a collection of more than 45,000 rooms in more than 200 locations worldwide, predominantly in the United States to date. A rapid worldwide expansion of the Doubletree by Hilton brand has included an aggressive opening plan of upscale, full-service hotels and resorts in Canada, China, Costa Rica, Peru, the United Kingdom, India and now India, with additional hotels and resorts in Panama, Peru, Russia, Slovakia and Thailand anticipated to open during the next several months.

To make reservations at any Doubletree by Hilton hotel, travelers may visit our website at www.doubletree.com.

About Hilton Hotels Corporation in India

Doubletree is part of Hilton Hotels Corporation, the leading global hospitality company with more than 3,000 hotels and 500,000 rooms in 74 countries and territories, with more than 135,000 team members worldwide. The company owns, manages or franchises some of the best known and highly regarded hotel brands including Hilton®, Conrad® Hotels & Resorts, Doubletree®, Embassy Suites Hotels®, Hampton Inn®, Hampton Inn & Suites®, Hilton Garden Inn®, Hilton Grand Vacations™, Homewood Suites by Hilton® and The Waldorf=Astoria Collection™.

Hilton Hotels Corporation has a joint venture with DLF Limited in India, with the strategic goal to build and develop an extensive network of hotels in India, comprising 3500 rooms. All these projects projects are in various stages of development and construction and will be managed by Hilton under its Hilton Family brands: Hilton, the upscale full service brand; Hilton Garden Inn, the business traveler focused service brand and the Homewood Suites, an extended stay hotel product by Hilton brand.

In April 2008, Hilton Hotels Corporation entered into an agreement to franchise its Hampton by Hilton™ brand to Marigold Hospitality Limited in India. Marigold Hospitality aims to franchise 16 hotels (approximately 2,000 rooms) under the Hampton by Hilton brand in India.

In addition, Hilton Hotels Corporation has signed management contracts under the Hilton Brand with independently owned in Shillim, Bangalore, Hyderabad and Chennai:

In October 2008, Hilton Hotels Corporation announced the first Doubletree by Hilton hotel which will open in Gurgaon, New Delhi, in 2010.

About JMD Group of India

JMD Limited is one of the leading property developers in the country. Headquartered in Gurgaon, JMD today has operations in many parts of India including cities like Delhi/NCR, Goa, Ludhiana, etc. Started in the year 1989 as a real estate solutions provider, the initial decade saw JMD getting used to market trends, understanding realty and dealing with Bear and Bull Runs. 1998 saw the launch of JMD’s flagship project JMD Regent Square, the first commercial complex on M.G. Road Gurgaon. Today with a staff strength of over 300 dedicated professionals and activities in every sphere of real state development including IT/SEZ, Commercial, Residential, and Retail & Hospitality. In fact JMD currently has over 20 million square feet under construction in these sectors. In 2008 the company established a special JMD Offshore Wing to proactively explore overseas markets, and to identify ideal locations for future projects. Already several prime international properties are in the JMD fold.

Source : http://www.indiaprwire.com/pressrelease/leisure-travel/2009011418011.htm

Zoom Developers mulls Rs 1,000 crore investment in hospitality projects

Real estate developer, Zoom Developers, has chalked out a Rs 1,000 crore investment plan to develop hotels in various cities in India. The realty major plans to develop 35 hotels across India by 2011.

The 35 hotel projects will be spread across Jaipur, Jalandhar, Itanagar, Ranikhet, Ooty, Kochi, Katra, Amristar, Bhowalil, Bhatinda, Indore, Danta, Alwar, Patiala and Pushkar. Construction has already begun in a few locations that include Itanagar, Ranikhet and Patiala. These properties are expected to be complete before the Commonwealth Games in 2010.

Source : http://www.travelbizmonitor.com/zoom-developers-mulls-rs-1000-crore-investment-in-hospitality-projects-4642

Omaxe to launch 10,000 homes in Indore at Rs4-10 lakh

New Delhi: Realty firm Omaxe on Wednesday said it will launch 10,000 low-cost homes in Indore in February, which would be developed at about Rs1,000 crore.

The company will launch the flats in the range of Rs4-10 lakh.
“We will launch 10,000 affordable houses in February at a 200-acre township in Indore,” Omaxe chairman and managing director Rohtas Goel told reporters on the sidelines of an Assocham function on real estate.

Asked about the investment, he said the project cost would be about Rs1,000 crore and the size of the flats would be 350 square feet upwards. Construction would be complete in 18 months.
Goel noted that the company would sell these units at a margin of 10-15%.

In May 2007, Omaxe had announced that it would develop 10 lakh affordable homes for low-income consumers in five years at Rs80,000 crore. To take its plan forward, it would launch similar projects in Raipur, Rohtak, Sonepat, Chandigarh, Bhiwadi and Ludhiana.

While Omaxe would develop affordable housing in North India, in the south, Mumbai and Ahmedabad, such projects would be launched by a group company ‘National Affordable Housing and Infrastructure Ltd´, Goel said.

Omaxe would soon launch housing projects at Rs12-19 lakh at Faridabad, Greater Noida and Ludhiana, he added.
On correction in property prices, Goel said the rates have declined by 10-40% across the country and there is no further scope for reduction.

Stating that sentiment in the market has improved after the stimulus package, he said states should also pitch in to boost housing by reducing stamp duty to 2-3% for the next two years, raising the density norm and offering interest subsidy to buyers.

Source : http://www.livemint.com/2009/01/14162729/Omaxe-to-launch-10000-homes-i.html

DLF staggers SEZs on fund crunch

DLF, which recently asked the government to cancel the approval for an IT special economic zone (SEZ) near the capital city, may start five of its other SEZs after 2010 on an expected revival in demand for real estate, according to sources in the company.

The proposed SEZs are in Khurda district in Orissa, Kancheepuram in Tamil Nadu, Kolkata in West Bengal, Sonepat in Haryana, Gandhinagar in Gujarat among others, according to the list of SEZs notified by the government.

“It is not feasible to start all the SEZs at one go, since it involves a lot of investment and time. We will do it in a phased manner. We will complete the already started SEZs in 2010 and then look at others,” said a DLF spokesperson.

DLF is already developing five SEZs — Gurgaon (two), Hyderabad, Chennai, Nagpur — expected to be completed by 2010. The company is planning to make a total investment of Rs 40,000 crore in its 10 SEZs.

Developers need to operationalise their IT SEZs within three years after the project is notified. While the already started SEZs got notified between December 2006 and April 2007, most of the yet-to-be-launched SEZs got notified in 2008. Recently, DLF asked the commerce ministry to denotify an SEZ at Shivaji Mart near Delhi for lack of interest from companies for IT space. Instead of leasing space, the company now plans to build office space and sell it, sources added.

However, analysts have concerns about sufficient demand for SEZs in the coming years as the economy slows down and companies, mainly IT firms, go slow on their expansion plans.

“If the economy weakens further, they may have to defer the launch of new SEZs. If there is no demand, there is no point in launching new projects,’’ said an analyst with an international brokerage, who did not want to be identified.

But a DLF spokesperson denied any impact of the slowdown on their plans, “If there was no demand, we would not have continued with our existing plans. If we are going ahead with them, it means we have enough demand for those projects. We have understanding with 70-100 Fortune 500 companies, who will follow wherever we launch our new projects,” he said.

Source : http://www.business-standard.com/india/news/dlf-staggers-sezsfund-crunch/00/51/346213/

Cushman ties up with Technopak for retail services

Cushman and Wakefield, leading real estate services firm, today tied up with Technopak, India&aposs premier management consulting firm in retail, to establish an integrated platform of end-to-end retail services.

The partnership serves to deepen Cushman&aposs capabilities for its clients in the retail industry by accessing Technopak&aposs retail strategy and consulting services, a release said.

For Technopak, the partnership would enable its clients to access Cushman and Wakefield&aposs global platform of real estate market intelligence, management expertise and a broad range of real estate services, it said.

Cushman and Wakefield and Technopak would collectively have a market share to over 50 per cent in the retail services sector and the alliance will assist both the companies to gain greater market control and provide their clients a platform of knowledge-based advice backed by execution capabilities.

” This partnership also forms a key component of our long-term strategy to further expand our retail services and strengthen our real estate portfolio in India”, said Sanjay Verma, Executive MD, South Asia, Cushman and Wakefield.

Source : http://www.indopia.in/India-usa-uk-news/latest-news/476741/Business/4/20/4

Rush for affordable mhada housing

MUMBAI: The unprecendented rush for flats constructed by the Maharashtra Housing and Area Development Authority (MHADA) has proved that even in  times of recession there is a huge demand for affordable housing in Mumbai.

Mhada’s affordable housing scheme for the economically weaker, lower, middle and higher sections of society has seen upto 1.89 lakh application forms picked up till Tuesday evening. All this for only 3,863 flats.

The surge from potential home buyers for Mhada flats comes at a time when private developers are struggling to sell their apartments, mainly high-end ones that are out of the reach of the average Mumbaikar. Despite the stagnant property market, most developers are resisting lowering their rates, although some have reduced them marginally by 10% to 15%.

“Builders should realise that their days of profiteering are over,” said former bureaucrat and real estate consultant Zafar Iqbal. Reacting to the phenomenal demand for Mhada flats over the past two days, Iqbal said the housing recession is only for the “crazy fellow” willing to shell out over a crore of rupees for a flat. “I have always maintained that there is a huge demand for housing in the range of Rs 20 lakh to Rs 30 lakh,” he added.

Iqbal, who was in charge of land acquisition under the now abolished Urban Land Ceiling (Regulation) Act more than two decades ago, said private developers are not catering to home buyers in this category. “They are running their businesses like a glamour show, catering only to big names,” he said. According to him, the city will soon implode because of lack of public housing. “People will begin to move out of the city,” he predicted.

Builder Niranjan Hiranandani said the response to the Mhada housing scheme “vindicated” his claim that there will always be a huge demand for homes. Asked whether private developers should reduce their prices, Hiranandani said this has got nothing to do with property rates. “If there is adequate land with permissions and if banks and financial institutions start lending money to home buyers and builders the way they should, the market will revive,” he said.

Jaidev Mody, chairman of Delta Corp Ltd, a real estate, hotels and gaming company, said the segment of home buyers who rushed for low-cost Mhada flats was never affected by the recession. “I am not surprised. Builders should now focus on low-income housing because there is a shortage of such units,” he observed.

Former Mhada president and housing activist Chandrashekhar Prabhu said the middle class in Mumbai finds itself marginalised today. “On the one hand, it cannot afford flats put up by private developers and, on the other hand, they are not law breakers who will squat on public land,” he said.

Architect and housing activist P K Das said builders have never built houses for the poor. “There is a clear disconnect between the hype that there are no sales of flats and the pent-up demand for Mhada’s housing projects. I have always argued that it is the government’s responsibility to provide mass housing. It cannot be left to the developers alone,” he said.

In Mumbai, 60% of the population lives in slums, 5% live on pavements, 15% are tenants living in old cessed buildings and about 5% live in rental housing. “Barely, 15% of Mumbaikars live in private houses,” Das pointed out.

Prabhu, however, blamed Mhada for abdicating its role in setting up mass housing. “Under pressure from politicians, the housing authority, over the years has transferred land to private developers,” he alleged. According to government sources, many politicians have huge stakes in slum redevelopment on Mhada land. “A politician lets his cronies encroach on a Mhada plot by setting up shanties. Soon, a frontman of the elected representative approaches Mhada officers for permission to redevelop the slum,” explained a source.

For over a decade, hundreds of plots in the city have been arbitrarily allotted to societies or trusts, many of which are reportedly controlled by politicians or their kin.

Source : http://timesofindia.indiatimes.com/Mumbai/Rush_for_affordable_mhada_housing/articleshow/3974696.cms

JMD group forays into hotel business

NEW DELHI: There is sudden activity in the hospitality and real estate businesses, despite the slowdown in this space. The Rs 140-crore real estate  company JMD Group has forayed into the hotel business in India by roping in the US-based hospitality group Hilton Hotels’ Doubletree brand of luxury hotels. The Delhi-based company will spend around Rs 150 crore over the next two years to establish three hotels.

“This is our maiden foray into the hospitality sector and makes us the official franchisee of the Doubletree brand in India,” JMD Group chairman and managing director Sunil Bedi told ET. “A 187-room hotel will open in Gurgaon in March next year ahead of the Commonwealth Games. Forty five per cent of the work has been completed.” Besides, Gurgaon and Ludhiana will have one four-star hotel each, consisting of 125-140 rooms.

The Indian hotel industry has witnessed a double whammy, thanks, in equal measure, to the Mumbai terror attacks and general economic slowdown. Hotel occupancies have dipped by nearly 50% in the past few months, triggering a fall in tariffs. Perhaps, the next year’s Commonwealth Games will revive the battered industry.

The real estate slump has impacted JMD too. “The general economic slowdown has forced us to lower the rentals by 15%-20%. The prices of our properties have dropped by 10%-15%, depending on the locations,” says Mr Bedi.

The group has 20 mn square feet of land under construction across the country. It will benefit from the five-year tax break announced by the government last year for developers of two, three and four-star hotels, a move that attracted investments of nearly Rs 34,000 crore by 25 realtors in all.

Doubletree Hotels is a brand of upscale accommodation, belonging to Hilton Hotels Corporation. Spread across 150 cities in the US, Canada and Latin America, it has formats ranging from hotels and guest suites to resorts and club hotels.

Source : http://economictimes.indiatimes.com/News/News_By_Industry/Services/JMD_group_forays_into_hotel_business/articleshow/3974764.cms

HCC to invest Rs 41,500 crore in Gujarat luxury township

Ajit Gulbchand’s Hindustan Construction Company (HCC)  has signed two agreements with the Gujarat government to develop a waterfront city at Dholera and a water pipeline projects at a total investment of Rs 41,500 crore.

The waterfront city project will be spread over 4000 acres at the Dholera Special Investment Region (SIR) on the lines of Lavasa, India’s first and largest man made Hill City being built by HCC near Pune, at a cost of Rs.40,000 crore.

Dholera, on the Delhi-Mumbai Industrial Corridor (DMIC), is located at the Gulf of Cambay about 129km from Ahmedabad.

The water pipeline projects are with Narmada water resources, water supply and Kalpasar department to develop three water pipeline worth Rs1,500 crore.

The three water pipelines project envisages inter basin transfer of water from N M C to various reservoirs such as the reservoirs based inter basin transfer of water, to Dharoi reservoir in Mehsana district, Sipu  and Dantiwada reservoir in Banaskantha district.

”The concept of new urbanism is gaining momentum globally and we are happy to initiate this modern and sustainable WaterFront City in Gujarat, based on this model,” said Ajit Gulabchand, chairman and managing director, HCC.  “We are confident of replicating our successful Lavasa business model which has already established a large network of business partners. The innovative nature of this project is matched only by the Gujarat government’s keen interest to develop world-class infrastructure in the state.”

HCC says it will will fund the first phase of the project through private equity and debt, a part from it’s own investment while the balance through the self cash generating route.

The actual construction work will start after various regulatory approvals like detailed project report, Environmental Impact Assessment (EIA) study and after development of the master plan of the region.

The initial phase is expected to be ready in the next three years and the entire project is due to be completed in 8-10 years time. The new Water Front City at Dholera is expected to employment around 50,000 workers.

HCC’s 15,000-acre Lavasa township has a 20sq-km man-made lake, and is India’s first man-made hill station.

The township itself has been master-planned by Hellmuth, Obata + Kassabaum to develop into a world-class, integrated urban and economic centre providing an aspirational lifestyle and facilities where the people can live, work, learn and play, in harmony with the highest environmental ideals.

The company has already established tie-ups with international as well as domestic institutions such as ITC Hotels (Fortune Select) and Accor (Pullman, Novotel and Grand Mercure) in the field of hospitality, Oxford University (Said Business School), Girls’ Day School Trust (UK), Ecole hotelier de Lausanne (Switzerland), Symbiosis (Pune) and Christ University (Bangalore) in the field of education and Apollo Hospitals in health and wellness.

Through its subsidiary HCC Real Estate, the company owns 60 per cent of the Lavasa township venture, which has already won some of the world’s most prestigious planning awards from The Congress of New Urbanism, in the US and The American Society of Landscape Architects – the only development in India to have qualified for this  recogntion.

Source : http://www.domain-b.com/industry/Real_estate/20090113_hcc.html

Home loan rate fall benefits existing customers a bit late

MUMBAI: RBI rung in the new year with a cut in key policy rates for the fourth time in as many months. This signals softer interest rates in days  to come. Every time a bank cuts lending rates, existing home loan borrowers complain that they are still stuck with higher rates, even as new borrowers walk away with the best deal. Bankers say old customers will definitely witness reduced rates, albeit with a lag.

“Now, when the interest rates are going down, new customers benefit by lower rates with immediate effect. That’s called the placement rate. But this rate cut becomes applicable to existing customers only in the next quarter,” said Kamlesh Rao, vice-president and business head, personal finance, Kotak Mahindra Bank.

If Kotak Mahindra lowered rates in January, they will be effective for existing customers only from April. Hence, the bank doesn’t send an official communique to existing customers immediately as there may be another rate revision by then.

“We wait for some stability in rates before we send out official communication to existing customers. The portfolio rate becomes effective only after every quarter when the latest effective rates are factored in for existing customers. This time lag of one to three months and the discrepancies apply both in case of a rise/fall in interest rates,” Mr Rao adds.

Other industry experts attribute this differential treatment to an absence of an independent external benchmark rate (unlike in developed economies), which leads to transparency issues in the home loan market. Harsh Roongta, CEO of apnaloan.com, says: “Some banks even have a home loan reference rate (HLRR) to which the effective rates are linked.
This is different from prime lending rate, on which other lending rates are pegged.”

If the HLRR is 15%, the effective rate may be pegged at 13%. So the bank maintains a margin of 2%. Now, even if the bank were to slash rates, it may not actually tinker with the HLRR. Consequently, the home loan rates remain at 13%.

But, when it comes to new customers, they have to drop the rate to 12% or in line with the market rate. Otherwise, they wouldn’t acquire any new customers. So at any point you may find a difference of 1-1.5% in floating rates charged to a new and an existing customer, Mr Roongta added.

Another retired banker who practices as a counsellor says every bank computes benchmark rates internally. Even the formula for computation is neither standardised nor has the RBI or National Housing bank (NHB) given any such mandate. Some banks like Kotak Mahindra Bank offer 1-year FD linked rate home loans.

However, local bankers argue the benchmarks linked to the consumer market cannot be linked to a corporate bond/ government bond market yield. “There should be an independent body which creates a basket of rates collected from different banks. They can calculate an average of those rates and arrive at a benchmark rate as the local banking industry has vintage data,” says Sujan Sinha, senior vice-president (retail assets), Axis Bank.

The concept of external benchmark rates is prevalent globally. In Australia, for example, the benchmark rate for home loans is referred to as the average annual percentage rate (AAPR). The AAPR includes interest payments and fees and expresses all these costs as one rate thereby reflecting the total annual cost to a borrower.

In the UK the mortgage rate is linked to the London Inter-Bank Offered Rate (LIBOR), which is reviewed on a regular basis. However, the situation in China is no different from India although the monetary authority has asked the banks to follow composite rate as the benchmark for home loans.

Source : http://economictimes.indiatimes.com/Personal_Finance/Loan_Centre/Home_loan_rate_fall_benefits_existing_customers_a_bit_late/articleshow/3970360.cms