Archive for March, 2009

Godrej to set up Rs 5,500 crore housing plan

Posted by paragjani on March 30, 2009

AHMEDABAD: With the burgeoning aspirational Indian middle class looking at affordable housing in and around mega cities and tier I-II,

Godrej Group is set to invest a whopping Rs 5,500 crore on affordable housing scheme in Ahmedabad.

Having signed a Memorandum of Understanding with the Gujarat government during the Vibrant Gujarat Global Investors’ Summit 2009,Godrej Properties, the real estate arm of the FMCG major, will set up the mega residential cum commercial project between Ahmedabad and Gandhinagar, said the chairman of the company Adi Godrej during a visit to the city.

He was the chief guest at the 7th Convocation of Nirma University of Science and Technology on Saturday. “We will invest $1 billion on affordable housing project in the state that would come up between Ahmedabad and Gandhinagar. The project spread over 30 million square feet will have close to 30,000 units priced around Rs 25 lakh. We would also have certain commercial units in the same project,” he said, adding that the project would commence soon, he added.

As per the MoU, the project expects to generate employment for 1000-odd people in the state. Mr Godrej said the company has been working on multiple affordable housing projects across Maharashtra, Karnataka, Tamil Nadu, West Bengal, NCR and Punjab. “With mortgage rates likely to come down in future, the demand for affordable housing would pick up across cities,” he said. Godrej Group expects to record a turnover of Rs 10,000 crore in 2008-09, 20% more than the last fiscal, he added.

http://economictimes.indiatimes.com/Godrej-to-set-up-Rs-5500-crore-housing-plan/articleshow/4328910.cms

Posted in Ahmedabad, Builders/ Developers, New projects | Tagged: affordable housing, Ahmedabad, Gandhinagar, Godrej Group | Leave a Comment »

Realty companies on go-slow mode

Posted by paragjani on March 30, 2009

Promised delivery in September 2007, Pavan Nagaraj saw his dream home turning into a pipe dream. The 30-year-old Bengaluru-based professional had paid Rs 29 lakh for an apartment in Ittina Abha, developed by Ittina Properties near the IT corridor.

When his queries about the status of the apartment went unanswered, Nagaraj petitioned the Consumer Disputes Redressal Commission, which, on February 20, 2009, ordered the developer to hand over the flat in three months along with interest on the money paid and costs of litigation. Till date, there are no visible signs of any activity at the project site. When contacted, Mahabaleshwarappa, Chairman, Ittina Properties, refused to answer BT’s queries.

This is not an isolated case, but one that is symptomatic of the troubles encircling the real estate sector across India as developers get hot under their collars in the ongoing meltdown.

Up north, as one drives down the Gurgaon-Sohna Road in NCR, the irony of the times is unmistakable. It’s a neighbourhood littered with underconstruction projects. A year ago, they were abuzz with activity. Today, most of them are abandoned sites. Says Rajeev Talwar, Executive Director, DLF Group: Projects which are on the drawing board will be reassessed if there is demand, we will certainly go ahead.

DLF, in fact, is also doing soul-searching on its retail projects. Talwar says DLF’s grandiose Mall of India in Gurgaon is having its design reworked to possibly include an office complex.

Unitech, the other major Delhibased developer, is faring no better. It has officially forbidden its employees to speak with the media. The firm’s Karma Lakelands Project, spread over 272 acres on NH 8 and offering independent villas at a starting price of Rs 6.6 crore, is currently an amalgam of unfinished houses and foundations, and the labour force is down to less than a third of the original. This is a far cry from the smug attitude many realtors flaunted not too long ago when the real estate market was booming.

As the virus spreads, realty markets across Mumbai, Chennai and Hyderabad, too, are checking into the sick bay with several stalled or go-slow projects. Points out Sanjay Dutt, CEO, Jones Lang LaSalle Meghraj: There is at least 15 million square feet of commercial real estate blocked across Mumbai and Thane. In the retail space, we estimated that work on around 2-3 million square feet of space has been stalled while residential projects are in go-slow mode.

So, will these houses ever become homes and will these pits see their projects to fruition? It’s a multi-crore question that real estate developers cannot answer right now. If the slowdown gets worse, real estate could be in the pits for some time to come.

Delhi NCR

Mall of India

Type of project: Retail
Developer: DLF
Launched in: 2005
Original completion date: 2009-10
New completion date: 2011-12
Reason for delay: Finalisation of design, according to the company Anybody travelling from Delhi to Gurgaon on NH 8 will find it impossible to miss this gigantic crater located just past the first toll booth on the Expressway.

Hyped as the largest mall in India, this 4 million square feet space is being developed by DLF at an estimated cost of Rs 1,500 crore. But over three years after it was kicked off, Mall of India is nowhere near completion. While the BT team found no signs of any construction activity when it visited the site recently, the company claimed that construction was very much on. In truth, the lot has remained like this for the past year-and-a-half.

There is currently a rethink within the company on the composition of the project. That is, of course, whenever it takes off.

Parsvnath Palacia

Type of project: Residential
Developer: Parsvnath
Launched in: April 2007
Original completion date: 2010
New completion date: N.A.
Reason for delay: Shortage of funds; company claims it’s on schedule From the looks of it, this seems to be a project that was abandoned before it got off the ground. Located at Plot no: 5 in Sector Pi-1 and 2 in Greater Noida, this 9.5-acre area is being developed by Parsvnath at a cost of Rs 200 crore.
Staff at the site claimed that construction for the residential project, which will house 382 units of two and three bedrooms, had been stalled, but only for two months.

However, a visit to the site by BT in November 2008 found construction had already ceased. The company claimed work would restart in March. However, this still hasn’t happened. Lack of funds is what officials on the site attributed the delay to.

Unitech Grande

Type of project: Residential
Developer: Unitech
Launched in: July 2007
Original completion date: 2010 (first phase of 422 apartments)
New completion date: 2012
Reason for delay: Financial crisis Unitech’s brochure quotes Jonathan Swift, who once said: Vision is the art of seeing things invisible a rather prescient quote, considering their current flagship project has made no headway. According to the company’s site office, digging work for seven towers out of a possible 45 is complete, though the BT team could find no evidence to support this claim.

The site office maintains that the project is only slightly delayed with the completion of the first phase now scheduled for early 2012. The company’s external communications agency pleaded a media gag due to a bit of a crisis .

Mumbai

DLF Towers A, B and C

Type of project: Retail-cum-IT park
Developer: DLF
Launched in: 2005
Original completion date: 2011
New completion date: Uncertain
Reason for delay: Change in the original plan
In 2005, realty major DLF acquired Mumbai Textile, a defunct National Textile Corporation (NTC) mill, for an astounding Rs 702 crore. Now, three years on, there is no work happening on this massive 17.5 acre area in Lower Parel. Rajeev Talwar, Executive Director, DLF says: We are going to develop this property as a high-end commercial and retail project and if we give any timeline, it would be very speculative. The plans have changed to include retail with commercial office space.

DB Tower

Type of project: Hotel-cumresidential
Developer: DB Realty
Launched in: 2008
Original completion date: 2011
New completion date: N.A.
Reason for delay: Company officials claim no delay (work is ongoing) With a built-up space of 9 lakh square feet, and a panoramic view of the Arabian Sea, Neelkamal Realtors (a part of DB Realty Group) is coming up with a 75-storey hotel-cum-residential tower in Charni Road.

The building, scheduled to be completed in 2011, is expected to cost Rs 1,100 crore, and will be managed by Park Hyatt. According to a company spokeswoman: The site work is going on. However, a visit to the site shows that the ground has only been excavated and there is no construction activity yet.

The group is also coming up with a second project Orchid Ozone Mall in Dahisar and this, too, is delayed. The mall, being built on 2.5 million square feet of land at a cost of Rs 700 crore is far from being complete. The reason? The project is being re-planned with residential development being introduced, says a company spokesperson.

Property fair in Mumbai

Posted by paragjani on March 30, 2009

The Maharashtra Chamber of Housing Industry (MCHI), the association of real-estate builders and developers are to conduct Property 2009, touted as the largest property exhibition of the season in Mumbai between April 9 and 12.

According to a press release from MCHI, the fair will offer the best opportunity for every home buyer. This mega exhibition will be on at the MMRDA Grounds, Bandra Kurla Complex, between 11 a.m. to 8 p.m.

Property 2009 will be a one-stop destination offering a wide range of affordable properties to suit all budgets. Lifestyle residential properties, budget homes, second homes, commercial properties ranging from Rs 5 lakh to Rs 5 crore along with various home loan options from leading financial institutions, the release said.

Property 2009 is an ideal option to reach out to the end-users all across Mumbai with properties from Island City, Western/Central Suburbs and beyond, including Thane, Mira Road, Vasai, Virar, Kalyan, Dombivli, Navi Mumbai, Panvel, Karjat, Pune, Lonavala and other cities such as Bangalore, Nagpur, Nasik and Goa, the release said.

MCHI was formed in 1982 brings together real-estate developers to address issues facing the industry. Members of MCHI account for 80 per cent of new residential accommodation in Mumbai and its vicinity. With over 400 member builders and developers, MCHI is affiliated with leading industry associations such as FICCI, IMC and CREDAI.

Mumbai suburbs taking centre-stage

Suburbs in Mumbai continue to see significant development with new areas set to take centre-stage in the real-estate market. The international property consultant Jones Lang LaSalle Meghraj points to the prevailing trends.

In Mumbai’s real estate scenario, the suburban landscape has its stars as well as bit players that are gearing up for centre-stage.

Among the stars, in Bandra (W), the rates range around Rs 15,000 to 45,000 a sq.ft in the area which has been an attractive destination, thanks to its high-end properties, sea link connectivity, good shopping and lifestyle embellishments such as restaurants and recreation facilities, and schools and colleges

Kandivali (W) costs around Rs 4,000-6,000 a sq.ft; Kandivali (E) Rs 5,500-7,000 and Borivali Rs 4,000-6,000. These areas are increasingly favoured because of their pricing and the convenience of shopping malls, educational and healthcare facilities and train connectivity.

Mulund and Vikhroli are also budget locations that are relatively less congested than areas of Mumbai.

They have the advantages of good road and rail connectivity to the hinterlands and also town-side, as well as a suitable bouquet of shopping malls and hospitals. Rates per sq.ft: Mulund — Rs. 4,500-7,500; and Vikhroli — Rs 5,500-7,500.

Thane ranks high on general infrastructure, affordability in terms of properties by reputed developers, and the fact that it is its own workplace catchment on many levels. The rates: Rs 3,000-6,000/sq.ft.

Navi Mumbai is a planned city with good infrastructure and its own distinct culture and lifestyle. Property rates are favourable, and there is a good range to choose from. Vashi — Rs 3,500-5,500/sq.ft; Kopar Khairne — Rs 3,000-3,500; Airoli — Rs 2,500-3,500; Sanpada — Rs 3,000-4,000; Nerul — Rs 3,000-4,000; Kharghar — Rs 25,00-40,00; Kalamboli — Rs 2,000-2,400; and Panvel — 2,000-3,000.

Mumbai’s suburban growth potential does not end with the currently established locations. The area beyond Panvel is developing rapidly, with a hallmark being Reliance’s Maha Mumbai mini city project.

There are also many other developers in the fray, and this area is eventually bound to emerge as a suburb in its own right. Kalyan and Dombivili are increasingly becoming connected to the rest of Mumbai and will figure high on the radar before too long. Bhayander, Nalasopara and the Vasai-Virar region are also ramping up to become extended suburbs of Mumbai.

Rates per sq.ft: Dombivali — Rs 2,500-3,200; Kalyan — Rs 2,500-3,200; Bhayandar — Rs 2,200-2,800; Vasai — Rs 1,500-2,500; and Virar — Rs 1,800-2,400.

OUR CHENNAI BUREAU
Source : http://www.thehindubusinessline.com/iw/2009/03/29/stories/2009032950561500.htm

Posted in General postings, Mumbai | Tagged: MCHI, Mumbai, Property Fair | 1 Comment »

PLR and home loan rate

Posted by paragjani on March 30, 2009

It is a benchmark rate of interest at which banks lend to their creditworthy customers. This rate is used as a yardstick to compute interest rates for other borrowers.

When does PLR change?

Apart from the bank’s own policy, PLR is also dependent on how the Reserve Bank of India (RBI) toggles its key rates like the cash reserve ratio (CRR) and repo rate. When the PLR is increased or decreased by the lender, it translates into more or less outflow for the borrowers.

Relation between PLR and home loan interest rates

PLR is a benchmark that varies from lender to lender. The rate of interest charged by a bank could be half a percent more than the benchmark PLR. A cut in the bank’s PLR will reduce the interest burden for borrowers.

Impact of key policy rates on PLR

The RBI toggles its key policy rates to bring certain volatile situations under control. For instance, the RBI may take measures to draw out excess money from the system, rein in inflation, invigorate a slumped economy, infuse liquidity or control a spiraling price rise.

CRR is the portion of funds that banks have to retain with the RBI. Repo rate is the rate at which banks borrow money from the RBI. If the RBI reduces the repo rate, it will be cheaper for banks to borrow money. Lowering the CRR and repo rate will infuse more liquidity into the system . This could translate into a less expensive cost of borrowing .

Source : http://economictimes.indiatimes.com/Features/Financial-Times/PLR-and-home-loan-rate/articleshow/4329392.cms

Posted in Home loans | Tagged: Home Loan rate | Leave a Comment »

Govt to buy Flats from Emaar MGF

Posted by paragjani on March 30, 2009

The government will buy up to 1 billion rupees ($20 million) worth of flats from real estate firm Emaar MGF Land, the Business Standard newspaper reported on Sunday, citing a senior ministry official. Emaar MGF, a joint venture between Dubai’s Emaar Properties and India’s MGF Developments Ltd is developing the Commonwealth Games village project to be held in 2010 in New Delhi, and planned to use proceeds from selling these flats to finance the construction, the paper said.

M. Ramchandran, secretary at the Ministry of Urban Development, has asked the Delhi Development Authority to examine the possibility of allowing it to buy flats to provide liquidity support to the firm, the paper reported. The amount is a third of what the real-estate firm initially sought, and a committee set up by the ministry is analysing the actual price of the flats, the paper said, citing Ramchandran.

Source : http://www.indianrealtynews.com/real-estate-india/govt-to-buy-flats-from-emaar-mgf.html

Posted in Builders/ Developers, Delhi, New projects | Tagged: Emaar MGF Land, New Delhi | Leave a Comment »

Slowdown force developers to look for affordable housing

Posted by paragjani on March 30, 2009

To beat slowdown in the economy, which has affected the demand for premium segment houses, developers have shifted focus to affordable apartments in the range of Rs 16 lakh to Rs 30 lakh in the National Capital Region of Delhi. This, combined with fall in interest rates, has lowered the cost of ownership of a house considerably.

The current trend has given a good opportunity to middle-income endusers to buy a house. Developers have also launched a number of projects in the affordable price range in areas like Indirapuram, Vasundhara, Vaishali, Crossings Republik on National Highway 24, Raj Nagar Extension on NH-58 in Ghaziabad, Nahar Paar area in Faridabad, Greater Noida and Gurgaon.

In Raj Nagar Extension on NH-58, in particular, condominiums have been launched where two-bedrooms apartment of 1,000 sq ft are being offered in the price range of Rs 16 to Rs 20 lakh. At the current home loan rate of 8%, the EMI on a loan of Rs 15 lakh for 20 years will work out to Rs 12,500.

Similarly, in other areas also, apartments are being offered at Rs 2,000 to Rs 2,500 per sq ft. To make houses affordable, developers are now building two-bedroom apartments of the size of 800 sq ft to 1,000 sq ft. Until some time ago, the base model of a two-bedroom apartment used to be of 1,200 sq ft to 1,500 sq ft floor area.

The reduction in size of the apartment led to substantial fall in the cost. In fact, the net cost of a two-bedroom has declined by almost 50% because of the combined effect of reduction in per sq ft price and the size of the apartment. Earlier, the cost of entrylevel two-bedroom apartment of 1,200 sq ft at Rs 2,800 per sq ft used to be around Rs 33 lakh. But, now, a similar apartment is available for Rs 16 lakh.

Till the first half of 2008, builders used to sell two-bedroom apartments on the outskirts of NCR in the price range of Rs 2,800 per sq ft to Rs 3,500 per sq ft. The prices of new projects in the same area have fallen to Rs 1,800 per sq ft to Rs 2,500 per sq ft.

At the same time, as interest rates have also fallen from 11% to 8%, the EMI on similar apartments, which could be taken as cost of ownership, has come down from Rs 34,000 to Rs 13,400 only. However, new apartments will certainly not have similar specifications like marble flooring and modular kitchens, which were being offered in the earlier apartments.

But, the reduction in the specification has improved the affordability of a buyer. Experts say such specifications could be added in the apartments later also, when one can afford them easily.

Apart from this, many builders have offered special schemes to improve the affordability of buyers. A number of developers are asking for only 15% to 20% as down payment and asking the buyer to pay the rest of the amount after two years when possession of the house will be given. Such schemes save buyers from simultaneously paying rentals of their existing houses and EMIs for their new houses.
Many people are still not buying houses because of the uncertainty in job market. Because of the slowdown, many companies are resorting to job cuts. This has worsened the situation. Developers are trying to address this problem also. To counter this, some real estate companies have offered to pay EMI for six months to buyers, if the buyer or his/her spouse were to lose his/her job. The logic for this is that within that period the buyer/spouse may get another job.

As inflation slips down further, the chances of interest rates too falling further are high. Besides, to revive the demand in economy, government is determined to bring down interest rates in the system.

In fact, interest rates have fallen to an all-time low in developed economies. The trend is likely to continue for some more time. Therefore, it is advisable for a buyer to go for floating rate interest rates to benefit from the fall in interest rates in future. However, they should remain alerts and as soon as interest rates start to firm up, they should shift to fixed rate of interest rates.

In the present scenario, consultants say the endusers instead of waiting to buy at the lowest level, should take a plunge if they get a good bargain. Instead of waiting for the so called ‘right time to buy’, which is almost impossible to catch, buyers should bargain for a ‘right choice’.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Slowdown-force-developers-to-look-for-affordable-housing/articleshow/4328263.cms

Posted in Builders/ Developers, New projects, Noida | Tagged: affordable housing, Faridabad, Ghaziabad, Greater Noida, Gurgaon | Leave a Comment »

Biba plans 20 more stores in a downturn

Posted by paragjani on March 30, 2009

Capitalising on falling raw material prices and real estate rentals, domestic apparel brand Biba is hopeful to open at least 20 stores, mostly on high streets, in the next one year. Biba is planning to open at least 100 new stores in the next three years.

With a present turnover close to Rs 130 crore, the company is eying a sales of Rs 500 crore by 2011.

“In the last four months, several factors have worked in our favour. We have been able to reduce the cost of raw materials, logistics and rentals. At present, we do not have stores in high streets, as rentals were very high till about six months’ back. Now, with rentals falling, we plan to open stores not only in malls, but also in locations like Banjara Hills in Hyderabad and Greater Kailash in Delhi,” said Siddharath Bindra, managing director, Biba.

Retail rentals have reduced by almost half in most plush locations of metros like Delhi and Mumbai, according to Bindra.

While the company is hopeful of a turnover of Rs 130 crore this fiscal, and Rs 200 crore next fiscal, it expects slight decline is its EBITDA margin, which was 15 per cent last fiscal.

“We are a very product oriented company, and have been able to maintain an efficient supply chain. We mostly source raw materials from textiles centres like Surat, Ahmadabad and Jaipur,” said Bindra.

Source : http://www.business-standard.com/india/news/biba-plans-20-more-stores-indownturn/57449/on

Posted in Delhi, Hyderabad, New projects, Retail/ malls | Tagged: Biba, Delhi, Hyderabad | Leave a Comment »

Kolkata retail demand down, new projects on hold

Posted by paragjani on March 30, 2009

Kolkata: About 100 small and large retail and real estate projects in Kolkata are being delayed or defered due to the financial credit crunch.

According to analysts and industry insiders, increased retail development in Kolkata and in its suburbs had nearly doubled real estate prices over the last few years. However, although 40-50 projects are lined up in the city currently, around 100 projects are delayed or defered due to credit crunch as well as because of uncertainty over projects’ viability and sustainance.

Projects like City Centre II, Lake Mall, Terminus Mall, Axis Mall and Avani Riverside mall in Howrah, are already running behind schedule.

As retail sales are down by 50 per cent, depending on discount or lifestyle retail categories, and consumers’ discretionary spends are also down 15-20 per cent, developers are now cautious about new projects.

Real estate prices in Kolkata are also down 15 per cent, and a further correction of 10 per cent is expected, on the back of slowed retail activities and consumers going into savings mode.

According to Mayank Saksena, head of transactions in Kokata, Jones Lang LaSalle Meghraj, around 40-50 projects are lined up for Kolkata while around 100 have been delayed.

On an average, each of these projects is of approximately 2 lakh square feet, priced at an average of Rs 3,000 per sq ft.

“The best performing local developer is currently Bengal Ambuja. Local developers deliver very satisfactory products at lower prices. For instance, Bengal Unitech is charging Rs 3,200 per sq ft in Rajarhat, while other local developers charge Rs 2,500 per sq ft for comparable projects”, Saksena added.

Due to increased retail development, real estate prices had increased till the better part of 2008, and this includes the suburbs. Right now, the situation is doubtlessly in stagnation, but the downward movement is minimal.

In the suburbs of Durgapur, Asansol, Bardhhaman, Siliguri, Guwahati and Bhubaneshwar, demand movement was upward because of an increasing retail presence and all the associated boosts to these markets. Retail rentals started at Rs 50 per cent sq ft in these areas and are even now at approximately Rs 100 per sq ft, Saksena informed.

Kolkata’s real estate prices are generally lower than in the other metros.

It is an emerging market that took off only 2000 in terms of residential. Retail development followed in 2003 when the first mall was launched.

“It is still a young market, but is nevertheless all about appreciation,” Saksena added.

Rates started with Rs 1,000 per sq ft and are now at 5,000 sq ft.

Also, the average real estate price drop in Kolkata is the lowest in India at 15 per cent, pointed out Jones Lang LaSalle Meghraj.

“Right now consumers are deferring real estate purchase decisions and the upper budget limit has sunk to Rs 20-40 lakh in the last six months from the earlier budget of upto Rs 60 lakhs,” Saksena said.

Prices are likely to come down by another 15 per cent, mainly in developing areas such as Rajarhat, Salt Lake, Howrah and the CBD zones of Park Street, Camac Street and Elgin Road.

Rates have appreciated unreasonably in these areas and there is now a deadlock in transaction in these locations.

The deadlock has resulted in several store closures in these developing areas.

For instance, the 3,500-sq ft flagship Adidas lifestyle store on Camac Street that had opened less than two years ago, has been closed, on grounds of ‘irrationally high’ rentals. Bangalore-based Primus, the franchisee of the Adidas lifestyle store on Camac Street, had reportedly sought a 25 per cent reduction in rent but the landlord did not agree. High rentals, coupled with ‘hardly any’ sales, had made Adidas on Camac Street ‘non-viable’. Primus has also closed its Adidas, Nike, Levi’s and Reebok factory outlets on VIP Road.

The Adidas store in Mani Square has been temporarily shut and negotiations with the mall management on rentals is ongoing.

RPG Group’s Spencer’s Retail has also taken a hit, especially at its large-format store in Mani Square.

Another large-format retail address — Khadim’s 28,000-sq ft departmental store Egaro — is on the brink of closure.

It has been running a 75 per cent ‘clearance sale’ for over two months now.

Other bleeding retailers in the city include British retailer Marks & Spencer, The Body Shop, Guess, Next and Accessorise, both at Avani Heights near the Exide crossing and in South City Mall.

E-mall, the electronics market on CR Avenue, has seen Future Group’s Depot, the stationery and gifts store, shutting shop, as has the Kodak outlet.

Source: Business Standard

Posted in Builders/ Developers, Kolkata, New projects, Retail/ malls | Tagged: Jones Lang LaSalle Meghraj, Kolkata, Unitech Ltd | Leave a Comment »

Interest rate cuts, offers bring first-timers to housing market

Posted by paragjani on March 30, 2009

Renu Sud Karnad, joint managing director of HDFC, the country’s largest mortgage player, said she saw “increased interest” from first-time house buyers, courtesy the correction in property prices, interest rate cuts and developers introducing affordable housing by resizing the offered areas.

Property developers agree.

Consider this:

- HDIL Ltd launched a housing project at Kurla, a central suburb of Mumbai, in February, at a price 30 per cent lower than market rates. More than half its sales came from first-time home buyers. Of the 756 units on offer, the developer has already sold 575.

- About 85 per cent of the 500 flats at DLF Westend Heights in Bangalore have already been sold. The project was aimed at information technology professionals and the flats were priced 24 per cent less than market rates. DLF says about 60 per cent of the buyers are first-time house owners.

- Unitech, which launched Uniworld Gardens–II at Sohna Road, Gurgaon, and cut prices by more than 20 per cent, has sold more than half the flats. It now plans to launch affordable housing projects in the Rs 5-10 lakh range in Chennai, Kolkata and other cities.

Bankers also see a sharp rise in enquiries from first-time buyers, after an 18-month hiatus. Bank of India Executive Director M Narendra said many first-time buyers were coming to the bank for loans as the availability of affordable projects had increased.

Cuts in interest rates and property prices have improved affordability. First-time buyers have been a huge beneficiary of the former. Every 0.5 per cent increase in the interest rate reduces home loan eligibility by about 7 per cent, shows a study by Liases Foras, a real estate rating & research agency. Liases said real estate would attain the 2005 efficiency if home loan rates came down to 7.5 per cent and property prices fall by 5 per cent. The risk spread in the real estate sector would then be negligible.

First-time home buyers have stayed away from the market ever since developers, in a bid to cash in on the market sentiment, focused on launching luxurious projects, bigger in size and priced beyond the reach of average buyers.

Property prices across India more than tripled from 2003-07, owing to rising incomes, mortgage availability at inexpensive rates, higher tax benefits and speculators flocking to the market.

As a result, inventory levels of property jumped to 40 months of equivalent sales, compared with eight months or lower a few years ago, said Pankaj Kapoor, CEO of Liases Foras.

However, some analysts and experts said it might be difficult to sustain the momentum as several genuine buyers were expecting a further drop in prices and uncertainty in the job market might make matters worse.

Source : http://www.business-standard.com/india/news/interest-rate-cuts-offers-bring-first-timers-to-housing-market/353164/

Posted in Builders/ Developers, Delhi, Home loans, Mumbai, New projects | Tagged: DLF Ltd, HDFC, HDIL Ltd, Home loan interest rates, Unitech | Leave a Comment »

Properties in Mumbai Remain Unsold Despite Low Price and Discount

Posted by paragjani on March 30, 2009

Property prices across Mumbai have dropped by 30-40 per cent from its peak rates. Realty research figures indicate that the average property prices in Mumbai, Thane and Navi Mumbai (Mumbai Metropolitan Region) have come down from its peak of Rs 8,136 a sq ft in June 2008 to Rs 4,607 a sq ft in March 2009. With 420 ready and 1,349 under-construction projects in the MMR, the mounting inventory has led to a more pronounced price cut in the latter category.

Eager to tide over the absolute slack, several developers are advertising limited time discounts. HDIL has done the same at its Kurla and Andheri projects, Nirmal Lifestyle at its Mulund project, Lodha at its Dombivli project as well as a slew of others with big-sized projects in Thane and Navi Mumbai. They urge buyers to go in for a panic buying till the offer lasts, claiming that there will only be an upward movement in prices hereafter. This is a far cry from the initial days of the slump, when developers dangled sweeteners like stamp duty waivers or a free car and electronic goods, ruling out any reduction in rates.

However, realty players say that with banks tightening the noose around developers, the fate of many under-construction projects is unsure. Real estate rating agency Liases Foras estimates that about 50 per cent of the ongoing projects are doomed to either get stalled or get deferred. “All these projects that claim to offer flats at discounted rates for limited time only, are nothing but attempts to scare the buyers into buying their projects. Property rates are bound to fall up to 60 per cent. Not only are the developers starved for money, the buyers also have no money to spare. Also no buyer wants to put his money or risk taking a loan for buying an under-construction flat,” said Yashwant Dalal, president of Estate Agents Association of India.

He said the rates of even plush flats in prime areas such as Peddar Road have come down from a staggering Rs 1 lakh a sq ft to a range of Rs 60,000-35,000 a sq ft. In Bandra, it has dropped from Rs 25,000 a sq ft to Rs 14,000 a sq ft.” The prices in the area have fallen by 35 per cent from the peak rates of Rs 35,000-40,000 a sq ft.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai/properties-in-mumbai-remain-unsold-despite-low-price-and-discount.html

Posted in Builders/ Developers, Mumbai, New projects | Tagged: HDIL, Lodha Group, Mumbai, Navi Mumbai, Nirmal Lifestyle | Leave a Comment »

Developers Target the Bottom Segment to Generate Liquidity

Posted by paragjani on March 30, 2009

Unitech, Omaxe, Raheja, Tata Housing and Ansal API are planning new projects in the suburbs of satellite towns or smaller cities to target the bottom segment, to generate more cash. New Delhi-based Unitech and the Raheja group are planning to build single-bedroom homes in and around Gurgaon. While Unitech is busy conceptualising the project, Raheja has announced plans to construct 10,000 flats in the Rs 5 lakh range at Gurgaon, the satellite town bordering New Delhi. Tata Housing Development, too, is working out the feasibility of a sub-Rs 5 lakh housing project. Unitech plans to launch mid-segment residential projects in the Rs 5-10 lakh range in metros like Chennai and Kolkata, and suburban cities like Gurgaon, over the next few months.

Another developer, Omaxe, is planning a sub-Rs 4-10 lakh project at Peetampur and the Dewas industrial area near Indore to target workers. In the first phase, to be launched in the next 10 days, Omaxe would launch 5,000 flats and in the second phase, 5,000 more flats, the company said. “The inspiration to develop smaller and cheaper apartments comes from the Nano, which is eliciting a tremendous response. I am sure our project will see a similar response, given the fact that we will come up with such low-cost apartments near metros,” said Nagaraju. “Many industries around Udyog Vihar and Manesar are looking for houses for their workers. Our demand survey has shown tremendous interest among such firms to provide houses for their employees in the vicinity of the workplace. The new project will take care of their interest,” said Navin M Raheja, managing director, Raheja Developers.

“Nothing is selling today, as people do not have money. When both large and mid-income projects are not selling, developers have to come up with smaller projects, though they cannot earn the 30-50 per cent margins that they used to make earlier,” said Akshaya Kumar, chief executive of Park Lane Property Advisors. Developers are battling slowing sales since the beginning of 2008. Higher property prices, which more than doubled in metro cities during 2004-07, and high interest rates have made property buyers stay away from new purchases. Despite a nearly 30 per cent fall in property prices and a cut in loan rates from 11 per cent to 8.5 per cent in recent months, property sales have fallen 70 per cent from their peak last year.

DLF, Unitech, Parsvnath and all other major developers have entered the Rs 20-40 lakh segment to generate liquidity, even as their top line fell as much as 80 per cent in the last quarter. But property experts believe sub-Rs 5 lakh projects have few takers, even in smaller cities like Indore. “Even a good wage earner wants to stay in a comfortable home, which costs between Rs 8 lakh and Rs 10 lakh in smaller cities and Rs 18 lakh and Rs 20 lakh in the metros,” said a top executive of a New Delhi-based realty firm who did not wish to be quoted.

“At such as a price (sub Rs 5 lakh), either the houses have to be small or not in a good location. Prices should at least be in the range of Rs 10-15 lakh (per flat) for a project to make profit,” said Kumar of Park Lane Advisors. But developers are still launching projects to generate cash. Ansal API has launched 4,000 apartments in Jaipur, Jodhpur, Agra and Meerut. “We have priced these apartments in the range of Rs 5-10 lakh per unit, keeping in mind customers who are ready to buy small apartments. The size of a one-bedroom apartment is 500-550 sq ft, while a two-bedroom apartment has an area of 850-900 sq ft,” said a company spokesperson. The company will launch another 6,000 apartments in the coming months.

http://www.indianrealtynews.com/real-estate-developers/developers-target-the-bottom-segment-to-generate-liquidity.html

Posted in Builders/ Developers, Delhi, New projects | Tagged: Gurgaon, Unitech, Omaxe, Ansal API, Tata Housing, Raheja, affordable housing | Leave a Comment »

DLF cuts prices of Gurgaon apartments

Posted by paragjani on March 27, 2009

The 20% discount on New Town Heights property is structured in a complicated way; has no clear exit plan

New Delhi: After slashing prices in Bangalore, Hyderabad and Chennai, DLF Ltd, India’s largest developer by market value, is offering a discount of 20% on apartments in its New Town Heights project in Gurgaon, on New Delhi’s outskirts, for both existing and new customers.

Wooing customers: A DLF project in Gurgaon. The firm said the price cut was to pass on the benefit of lower material costs to the buyers. Harikrishna Katragadda / MintDLF sent a letter to its customers on Wednesday announcing the price cut. But, unlike the flat cuts on DLF’s projects in the three south Indian cities, the discount on apartments in New Town Heights is structured in a complicated fashion and comes with caveats.

In February, DLF cut prices of some projects under way in Bangalore, Hyderabad and Chennai by about 20-30%. That price cut was for both existing and new customers.

Real estate developers are cutting prices to retain and attract buyers after a property market slump in the face of slowing economic growth caused land and apartment valuations to drop sharply, dampening demand.

New Town Heights is a 23-acre project consisting of three- and-four-bedroom apartments in Sector 86, 90 and 91 of Gurgaon. The apartment size ranges from 1,760 sq. ft to 2,505 sq. ft, priced between Rs2,250 and Rs2,350 per sq. ft.

DLF said in the communication to buyers that the price cut was to pass on the benefit of lower raw material costs to them.
DLF has given a 5% discount on the basic sale price of the property. The company has also said that it will increase the area of the property by around 5% free of cost which would decrease the cost of the apartment by 5%.

It is not clear whether the increase in the area would be in the super-area or the carpet area of the apartment. While super-area is the entire area of the building including the common area such as the lobby, carpet area refers to the actual usable area within the apartment.

DLF has also promised a 10% rebate on timely payment by customers.

This rebate will be on the sale price and will be credited to the buyers’ account in the last instalment if the payments are made on time.
The developer has also changed the payment plan for some customers from a time-linked plan, under which customers have to make payments in line with a pre-set schedule. Those who have paid 35% of the sale price would now be allowed to pay the remainder according to progress made in the construction of the project.
Customers who have not paid 35% of the sale price will get the benefit of the construction-linked payment plan only if they pay the balance payment before 25 April, the letter says.

“I am not happy with the discount,” says a customer, Rahul Bhambri, 32, who bought a 1,760 sq. ft apartment in the project by making a down payment of Rs42 lakhs in July. “The discount has been structured in a very complicated way…also prices have gone down in Gurgaon by 30-40% and they have only given an effective discount of 5%.”

Bhambri is a member of the online forum of New Town Heights buyers on Yahoo Groups. The forum has around 500 members.
Though, unhappy with the discount, Bhambri has decided to stay invested in the project. “I have taken a loan from HDFC and I am paying an interest on that and even if I exit, DLF will charge me a penalty, so I will lose money if I exit,” he says.
DLF has, however, steered clear of talking about an exit plan for its buyers. “The deal has been structured with a bias towards compelling people to stay in the project,” says Sanjay Sharma, managing director of Gurgaonscoop.com, a real estate portal on Gurgaon. “What is also missing is explicit terms and conditions for exit… There are lots of people who want to exit but DLF has been non-committal on this.”
DLF is offering buyers other benefits. The developer is giving its customers so-called price protection, which means that if the basic sale price is reduced by the company before handing over possession of the property, existing buyers will get the benefit of the reduced price.

DLF has also doubled the compensation in case of a delay in handing over possession of the apartment from Rs5 per sq. ft per month to Rs10 per sq. ft per month. The same amount would also have to be paid by buyers if they delay in taking over possession of the apartment.

Source : http://www.livemint.com/2009/03/26232827/DLF-cuts-prices-of-Gurgaon-apa.html

Posted in Builders/ Developers, Delhi, New projects | Tagged: DLF Ltd, Gurgaon | 3 Comments »

SBI goes ‘green’ with its home loans

Posted by paragjani on March 27, 2009

Mumbai, March 26 State Bank of India has introduced a new home loan product that will make other banks go green with envy.

By launching ‘Green Homes’, the country’s largest bank wants to support rated environment friendly residential projects by offering concessions – reduced margin, softer interest rate, and zero processing fee – on home loans to discerning buyers.

In case you are planning to buy a house with a loan from SBI in an environment friendly residential project, which has been rated by the Indian Green Building Council (IGBC), then the bank is willing to woo you with concessions.

The concessions: the upfront margin that you will have to stump up will be lower at 15 per cent of the loan amount instead of the normal 20 per cent; interest rate on the loan will be 25 basis points lower than the card rate; and no processing fee will be charged.

A ‘Green Building/ Home’, according to the IGBC, is one that uses less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building. The council is a part of the Confederation of Indian Industry – Sohrabji Godrej Green Business Centre.

“As part of our endeavour to promote rated eco-friendly residential projects, we have announced easy loan terms for prospective home buyers. Our move will also encourage builders to come up with such projects,” said a senior SBI official.

The bank, which introduced the ‘Green Homes’ product a couple of months back, is currently supporting ‘green’ residential projects by Tata Housing and Mahindra’s.

“Today, home buyers are ready to shell out extra money towards amenities such as swimming pool, club house and joggers’ park. Frankly, these are only ‘theoretical’ benefits which a majority of the residents hardly use. In the case of eco-friendly homes, owners will actually realise tangible as well as intangible benefits.

Hence, buyers should shed their reluctance to pay that extra, which can be recouped in 2 to 3 years, for buying a house in an eco-friendly project as they stand to gain via savings in terms of energy and water,” the official said.

Owners of ‘green homes’ can hope to reap tangible benefits in the form of 20-30 per cent energy savings as the apartments are designed in such a manner that they can enjoy ample natural light throughout the day.

The construction material used in such homes ensures adequate thermal storage mass for retaining heat energy thereby keeping the interiors cool despite the heat outside.

Further, water savings, anywhere between 30 and 50 per cent, can be made on account of rain-water harvesting and recycling.

Source : http://www.thehindubusinessline.com/2009/03/27/stories/2009032752100100.htm

Posted in Home loans | Tagged: Home loans, State Bank of India | Leave a Comment »

Falling property prices fail to lift sales

Posted by paragjani on March 27, 2009

Mumbai Buyers tread cautiously even as developers offer discounts
Prabhadevi-based garment exporter Hashmukh Kapadia has been looking for a two-bedroom flat for more than a year now. The prices in the area have fallen by 35 per cent from the peak rates of Rs 35,000-40,000 a sq ft.

“I want to buy a new house as my family is growing and we need more space. But I find the rates for the completed flats still unaffordable. I can get a flat much cheaper in under-construction projects. However, it is too big a risk as you never know for how long the project can get delayed in these days,” the 73-year-old said.

Kapadia is among those home buyers who are treading cautiously despite a slash in property rates. On a steady descent, the property prices across the city have dropped by 30-40 per cent from its peak rates. Realty research figures indicate that the average property prices in Mumbai, Thane and Navi Mumbai (Mumbai Metropolitan Region) have come down from its peak of Rs 8,136 a sq ft in June 2008 to Rs 4,607 a sq ft in March 2009. With 420 ready and 1,349 under-construction projects in the MMR, the mounting inventory has led to a more pronounced price cut in the latter category.

“All these projects that claim to offer flats at discounted rates for limited time only, are nothing but attempts to scare the buyers into buying their projects. Property rates are bound to fall up to 60 per cent. Not only are the developers starved for money, the buyers also have no money to spare. Also no buyer wants to put his money or risk taking a loan for buying an under-construction flat,” said Yashwant Dalal, president of Estate Agents Association of India.

Source : http://www.expressindia.com/latest-news/falling-property-prices-fail-to-lift-sales/439722/

Posted in Builders/ Developers, Mumbai, Navi Mumbai, New projects | Tagged: Lodha Group, Mumbai, Navi Mumbai, Real Estate price in Mumbai | Leave a Comment »

DLF says west Delhi apartment project on despite lower demand

Posted by paragjani on March 27, 2009

The realty firm’s Shivaji Marg project will have around 500 flats priced between Rs78 lakh and Rs99 lakh

New Delhi: Undeterred by a slowdown in demand for homes in urban India, DLF Ltd, India’s largest developer by market value, is likely to launch a residential project by the end of March on one of the country’s most expensive patches of land in west Delhi.

The pricing of the apartments on Shivaji Marg is likely to be set between Rs6,500 and Rs7,000 a sq. ft translating into purchase prices of flats to just under Rs1 crore.

Upbeat: The DLF corporate headquarters in New Delhi. DLF plans to erect an integrated township. Ramesh Pathania / MintDLF Shivaji Marg project will be a ground plus 18-floor structure consisting of at least 500 flats of two- and three-bedroom apartments. The size of the apartments will vary between 1,200 sq. ft and 1,525 sq. ft, which means the flats will be priced between Rs78 lakh and Rs99 lakh. For the locality the project is in, the prices are considered competitive.
In August 2007, DLF had acquired 38 acres of land from DCM Shriram Consolidated Ltd, or DSCL, and the Lohia family of Indorama Group of firms for Rs1,675 crore, in what was then seen as the most expensive land deal in India surpassing second-ranked realty rival Unitech Ltd’s acquisition of 300 acres of land in Noida for Rs1,582 crore.

BPTP Ltd’s acquisition of 95 acres of commercial land in Noida, a satellite town east of capital New Delhi, for Rs5,000 crore followed in March 2008, ranking the most valuable land deal in India.
The purchase of the Shivaji Marg property was also the first major land deal at DLF after its initial public offering in June 2007. DSCL and the Lohias had a 50:50 right on the property, better known as Swatantra Bharat Mills and DCM Silk Mills.

DLF plans to erect an integrated township on the land including 3 million sq. ft. of office space, 2 million sq. ft. of retail space, and around 5 million sq. ft. of residential units. Earlier, DLF had planned to develop high-end residential units in the township but with demand for luxury homes contracting, DLF now plans to develop mid-income homes.

In February, DLF reduced prices of some of its residential projects in Bangalore, Hyderabad and Chennai due to slowing demand for apartments. The price cut was between 10% and 25% in these cities.
DLF has initiated market research to determine the price of the apartments. “We have let our brokers research the market,” Rajiv Talwar, group executive director of DLF, said. “The idea is to leave plenty on the table for buyers…brokers are in the market to find out at what price point people will invest in the heart of the city.”
The company is trying to position the Shivaji Park development as a mid-income housing project. “We want to build typical middle-class housing for people who use the Metro for conveyance,” Talwar said.
The final price will eventually depend on the response from the market, Talwar clarified. “Although, the project is equidistant from the Commonwealth Games Village, we are willing to launch it at half the price of flats in the Games Village,” he said.

Apartments in the Games Village, being developed by realty firm Emaar MGF Land Ltd, are priced at at least Rs12,000 per sq. ft.
An analyst said the new DLF apartments were competitively priced but sales may be slow in taking off. “The only drawback is that people will still have to be comfortable with the fact that it is not a ready apartment…so while the project will get people interested in it, the interest may not translate into actual sales,” said an analyst with a brokerage firm, who asked he and his employer not be identified.
The business community is more likely to be interested in such a project rather than the salaried class, he added.

Source : http://www.livemint.com/2009/03/25230715/DLF-says-west-Delhi-apartment.html

Posted in Bangalore, Builders/ Developers, Chennai, Delhi, Hyderabad, New projects, Noida | Tagged: Bangalore, BPTP Ltd, Chennai, Delhi, DLF Ltd, Hyderabad, Noida | Leave a Comment »

Strong growth in small homes

Posted by paragjani on March 27, 2009

Real estate may be a slump and banks may be licking their past wounds, but the shift to affordable housing – a win-win combination for cash-strapped realtors and first-home seekers, is bearing fruit.

Public sector bank executives say the demand for sub-Rs.20 lakh mortgages is reviving, with strong appetite in Tier II cities, where the needs are strong but budgets low.

Aided by government initiatives under its stimulus plan, home loan rates for the sub Rs 20 lakh level is below 10 per cent and that is aiding the trend.

While early last year, there was sound demand for home loans for upto Rs 1 crore with the real estate sector booming across the country, including the big metros, a change is now visible

Reserve Bank of India data reveals that credit towards housing in the April to December period of 2007-08 registered a growth of 14.6 per cent at Rs 31,780 crore while in the first nine months in current fiscal it is 21,989 crore, marking a deceleration of growth at 8.8 per cent.

Bankers suggest that since January, each PSU has given Rs 50 –150 crore towards the housing sector.

“After October last year, there no demand for housing loan but from January, things have started to look up,” JM Garg, chairman and managing director, Corporation Bank said.

Bank of Maharashtra’s chairman Allen Pereira pointed out that high net worth individuals, however are still wary of availing credit.

“Demand is definitely picking up and it is the middle class which is more open to credit. We hope to see a more vibrant credit growth in the coming months as sentiments are improving. However demand for loans upward of Rs 40 lakh is nil even today,” Pereira said.

“There is ample liquidity in the system and banks are ready to lend but until now there was little demand in the economy,” the official added.

Source : http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=b3c2c880-7d38-4a42-975e-8204644d3cdd&Headline=Strong+growth+in+small+homes

Posted in Builders/ Developers, New projects | Tagged: affordable housing, Real estate in india | Leave a Comment »

Luxe, but deserted

Posted by paragjani on March 27, 2009

High-end luxury malls were expected to command huge rentals, which in turn would have helped malls cover high overheads and translate into high margins. But the economic slowdown has changed all that

By Priyanka Dasgupta Brahma & Shilpa Shree They were touted as the Golden Goose of the retail world. Luxury malls, housing high-end and designer brands, were looked at as one of the most promising segments in retail real estate.

These complexes were expected to command high rentals, which in turn would help the malls cover the high overheads and also translate into huge margins.

However, many of the prominent luxury malls across the country are wearing a deserted look these days. The economic recession broadly hurt the real estate business. Rentals have crashed and to make matters worse, these malls are recording very few footfalls, which again is not converting into purchases that much. It’s a vicious circle.
According to property consultants, high street rentals across the country are seeing corrections from 16 per cent to a whopping 44 per cent.

While Connaught Place, Karol Bagh and Basant Lok in New Delhi have seen a 16 per cent correction in rentals, the Mumbai market has seen corrections of up to 41 per cent on Kemps Corner and Breach Candy and 44 per cent on Linking Road.

Although mall owners are tight-lipped about the dip, according to Mumbai brokers, Palladium, the luxury part of High Street Phoenix, a mall in Central Mumbai, is quoting only around Rs 300-350 per sq ft. Palladium officials refused to comment.
“Malls and strips housing designer and high-end brands used to quote sky-high rentals. In the metro areas, this has dipped from around Rs 900 per sq ft to around Rs 250 per sq ft,” said a real estate consultant, who did not wish to be identified.

A recent Macquarie research report on the Indian real estate sector states, “Mumbai’s (and potentially India’s) most prominent mall, The Atrium, remained 30 per cent vacant. This is a product more of design issues rather than market conditions. However, it serves as a case study of how important mall design is for the industry.”

Contracted retail rents are coming down, the report said. “Forecasts regarding footfalls and retail mix are not materialising, leading retailers to seek rental abatements. The Oberoi Mall in Mumbai has seen a substantial number of closures,” the report added.
Another issue that crops up is that when the market becomes difficult, design problems come to the fore. More than one developer said that many malls are not designed well and hence will need capital, which isn’t there at the moment, to improve them. “Some may be converted to warehouse-style retailing,” the report said.
In Bangalore, liquor baron Vijay Mallya had set up UB City, in joint venture (JV) with Bangalore-based real estate developer Prestige Group.

The luxury mall houses designer brands from Cavalli to Paul Smith, has a food court and a club, Shiros, but local real estate analysts say rentals have dipped and most of the space is lying vacant. “We know for sure that a couple of floors still have spaces vacant, although they were expected to be completely occupied within six months of the launch. The mall is quoting only around Rs 250 per sq ft,” said a Bangalore-based real estate consultant who did not wish to be identified. In fact, some brands are rethinking their Bangalore-centric expansion plans.
“The situation of UB City puts a question mark on the viability of a luxury mall in Bangalore. That’s why we are rethinking when it comes to opening our stores there. We are going ahead with our plans to open stores in Delhi and Mumbai. But Bangalore, we really want to wait and watch” said a senior official of a retail major, which is yet to roll out its stores formed out of a JV between some prominent Italian luxury brands. However, the company says this is a good time for expansion, considering the fact that rentals are correcting everywhere in the high streets at the rate of 35 to 50 per cent.

With retail companies struggling at the moment, expansion plans have been put on hold. The previous model of aggressive store openings with an intention to sell the business 3–5 years post-expansion is a thing of past. Profitability, not market share, has become the key driver at present.

During an economic slowdown, luxury items don’t sell. “So, generally the malls and high street, which are selling luxury items, are seeing downward correction in rentals. In some cases, they are down 50 per cent,” said Bappaditya Basu, associate director of retail services, Jones Lang LaSalle Meghraj (JLLM).

Luxury retail still forms a small part of the total retail business in India. According to property experts, the segment is expected to grow at the rate of 5 per cent due to the slowdown.

Rentals have crashed even on the high streets of Mumbai, such as Linking Road and Colaba Causeway. “This is happening in Mumbai all the more because rentals had shot up here to unrealistic levels. The demand was very high because high streets give luxury brands the prominence that they deserve,” said Sanjay Chugh, national head, business drive, retail services, JLLM.

According to Shailesh Chaturvedi, chief executive officer, Tommy Hilfiger Apparel India, rentals have indeed added to the problems of premium and luxury brands. “It should correct or else, it puts a pressure on the bottomline” Chaturvedi said.

http://www.mydigitalfc.com/real-estate/luxe-deserted-097

Posted in Bangalore, Delhi, Mumbai, New projects, Retail/ malls | Tagged: Bangalore, Delhi, Jones Lang LaSalle Meghraj, Malls, Mumbai | Leave a Comment »

Not all banks have stopped lending, says PNB chief

Posted by paragjani on March 26, 2009

Mumbai: Punjab National Bank chairman and managing director KC Chakrabarty was at its witty best at the Confederation of Indian Industry’s (CII) conference on Monday. He took a dig at almost everyone — from the CII to bankers and from technology companies to economic predictions.

“The downturn has made it difficult for banks — everyone has become an expert and is giving suggestions. Each day there’s a new update on a downturn; even the CII booklet predicts a recession,” he quipped on the CII reportnamed: ‘Managing Recession’: Key Recommendations.’

Urging everyone to be positive he called the downturn a once-in-a-century event which he hoped he won’t see again.

Chakrabarty said FY10 is going to be a cautious year for his bank with credit growth expected to fall to 20%, from 38% in 2008-09. He expects deposits to grow at 18%.

The PNB chief lashed out at people who say that banks are not lending. “You say banks are not lending but you don’t say which banks. You are not saying that these were the same banks that got the best-bank awards year after year.”

“My credit growth is 38% and my lending rate is 100 basis points lower than the largest bank and 300 bps lower than the second-largest bank in the country,” he said.

“I have to give loans at subsidised rates for exporters at 8% home loans at 10% and agriculture loans at 7%. If I don’t give the rest of the loans at PLR, the banking sector will collapse,” he said.

Chakrabarty, who is also the front runner for the deputy governor’s post in the Reserve bank of India, said that unless the US economy improves India can’t expect to do better.”Meanwhile, we have to look internally and create domestic demand.

This is an opportunity for IT companies to create software products for Indian companies and banks. If we can take products to the poor it will be the best stimulus. Economic and monetary stimulus (alone) won’t work,” he said.

PNB is planning to increase its no-frills accounts to 10 crore from 47-48 lakh within five years.

Source : http://www.dnaindia.com/report.asp?newsid=1241950

Posted in Home loans | Tagged: Punjab National Bank | Leave a Comment »

HDFC rate cut to benefit 9 lakh home loan borrowers

Posted by paragjani on March 26, 2009

OUR SPECIAL CORRESPONDENT

Mumbai, March 24: HDFC — the country’s largest housing finance company — has cut its retail prime lending rate (RPLR) by 50 basis points. The rate cut will benefit its nine lakh home loan borrowers across the country.

The existing borrowers can now look forward to paying lower equated monthly instalments (EMIs) from their respective reset dates.

HDFC follows a three-month reset cycle for its floating-rate loan customers.

The cut in the RPLR means that EMI will come down by Rs 34 per month per lakh for a home loan with a 20-year tenure.

Observers say the lower cost of funds can be a key factor behind the rate cut. However, tough competition from banks may have also played a role. Nationalised banks such as the State Bank of India have turned aggressive in housing finance.

In February, the SBI announced that it would provide home loans at an interest rate of 8 per cent for one year and that the originally contracted rate would be applicable after the one-year period. SBI’s scheme has been successful and it has sanctioned Rs 1,300 crore in the first month of the offer.

Other public sector banks such as Canara Bank followed the SBI in offering such attractive packages. Canara will provide home loans at a fixed rate for the first five years and, thereafter, charge a floating rate that will be 200 basis points below the benchmark prime lending rate prevailing at that time.

According to HDFC, the revised RPLR at 14 per cent will be effective from March 25. This is the second time in three months that the corporation is bringing down its RPLR. The rate has been brought down by 100 basis points since December 2008.

Renu Sud Karnad, joint managing director of HDFC Ltd, indicated that the revision was a result of lower costs. “We have been able to bring down our costs due to improved operational efficiency and good quality portfolio. HDFC continues to efficiently manage its liabilities and reprice its debts,” she said.

Karnad added that the marginal cost of borrowing (fresh borrowing) had come down earlier this year and this was passed on to its new customers through a special limited period offer at a rate beginning at 9.5 per cent.

“We are now seeing a reduction in the costs on a portfolio level and, as in the past, HDFC has ensured that the reduction in cost is passed on to existing customers by way of a reduction in RPLR,” she said.

According to Karnad, there has been an increased interest from first-time home buyers over the past few months.

HDFC said the RBI’s recent cuts in policy rates had created adequate liquidity in the banking system, which had a positive impact on the cost of funds.

Source : http://www.telegraphindia.com/1090325/jsp/business/story_10720047.jsp

Posted in Home loans | Tagged: HDFC Bank, Home loans | Leave a Comment »

Forest land: Relief may cover more homes

Posted by paragjani on March 26, 2009

MUMBAI: All those who commenced construction on forest land between June 22, 2005-when the Bombay high court passed its judgment on the forest land case-and June 22, 2006, may get relief from the Supreme Court.

The Central Empowerment Committee (CEC) of the SC plans to recommend to the apex court “extension of relief” to residents and builders by a year.

In the past, the CEC was primarily looking into the case of affected citizens who were staying in houses built prior to June 22, 2005, and builders who started their projects before June 2005. It had decided to recommend relief for them. Now, the CEC may recommend it for all affected parties up to June 22, 2006.

Thousands of middle-class families have bought flats on plots that may be on forest land and are keenly following the legal developments.

Said Anmol Bhushan, a petitioner from People’s Power of Nation, “The CEC has taken a sympathetic view of both citizens and builders. It is recommending relief on payment of afforestation charges, which are Rs 7-Rs 8 per sq ft for residents and 10 times for builders. The CEC may also recommend complete exemption to a farmer in case the farming land is located in forest area.”

Bhushan said the CEC would also hear the grievances of people living in slums situated on forest land in Mumbai and Thane. “They will decide if they want to recommend relief for slums. If that is the case, what kind of afforestation charges should be levied on the slumdwellers?” he added.

Prakash Padikkal of the Hillside Residents’ Association said he has been asked by the CEC to submit a list of all affected properties in Mumbai and Thane.

Source : http://timesofindia.indiatimes.com/Mumbai/Forest-land-Relief-may-cover-more-homes/articleshow/4311676.cms

Posted in Legal questions, Mumbai | Tagged: Forest Land, Mumbai | Leave a Comment »

3 Year Lock-in for Foreign Investment in Real Estate

Posted by paragjani on March 26, 2009

Foreign investors in Indian real estate cannot sell their stakes to another foreign investor before three years, the Foreign Investment Promotion Board (FIPB), the body that clears such proposals, has said. With this, FIPB has overruled a provision in FDI policy that exempts foreign players from the rule in cases where fund transfer is from one non-resident to another. Till now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.

The FIPB view is contrary to the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can repatriate funds if it offloads its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change. “Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” an official in the commerce & industry ministry said.

The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments. The company had sought approval for transferring 1.9 crore shares in the Indian real estate company to the Mauritian company. According to the company’s proposal, the fund transfer involved no repatriation of funds but physical transfer of shares from one investor to another.

Though Dipp had recommended giving permission for sale of 2I Capital’s shares to ICP Investments, FIPB rejected it. Dipp argued the sale of shares was permissible between two non-residents within the lock-in period , but FIPB rejected it. In a missive to FIPB, ICP Investments said it has already invested $45 million in Uppal Housing and has plans to make substantial investments. However, if 2I Capital is not permitted to transfer its shares to ICP, Uppal Housing’s projects may be jeopardised, the company has stated. The joint venture between Uppal Housing and 2I Capital has been terminated and the company still holds its shares, given the policy logjam.

Source : http://www.indianrealtynews.com/fdi-india/3-year-lock-in-for-foreign-investment-in-real-estate.html

Posted in FDI | Tagged: FDI | Leave a Comment »

Sulekha survey reveals paradigm shift in real estate preferences

Posted by paragjani on March 26, 2009

The real estate market in India is one of the most volatile and keenly watched segments of the Indian economy. It plays a significant role in the country’s economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Five per cent of the country’s GDP is contributed to the housing sector. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. (Source: IBEF – India Brand Equity Foundation )

Moreover, the real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc. A study by rating agency ICRA shows that the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times. If the economy grows at the rate of 10%, the housing sector has the capacity to grow at 14% and generate 3.2 million new jobs over a decade.

The real estate sector in India has observed a quiet revolution over the past decade thanks to India’s booming economy which has led to an increased demand for both commercial and residential space. But today, with the economy in a topsy-turvy state all over the world, the aspiration to own a property or a flat has seen a backseat.

With the aspirations of the common man taking a severe hit on account of the prevailing economic slowdown, the most active and booming industry of developing India has seen a slump after a long time. Acording to Sulekha.com, India’s largest online & mobile classifieds and yellow pages portal, with the tightening of purse strings amongst property buyers, the real estate industry has been the most affected segment world over and especially in India.

In the survey conducted by Sulekha.com over a period of 6 months from October 2008 to March 2009, the trends observed in the real estate market in terms of buying & selling property and rentals show significant disparity on account of the currently prevalent public sentiments of job insecurities, savings and cost trimmings.

The real estate markets in the cities of Mumbai and Delhi have always seen an up market swing before the recent economic crisis.

With square feet prices in the main metro cities being higher, 51% of buyers opting to buy property of 1BHK in Bombay in the months of October, November and December has seen a dip of only 5% in the next quarter with a corresponding increase of 9% for 2BHK houses from OND-08 to JFM-09. Though for 3BHK houses we have witnessed an high of 2% in the search results.

With the Delhi/NCR region being the hub of all major multinational companies and the city expanding to the outskirts, an interesting trend has been witnessed in the real estate market with 43 per cent preferring to buy a property of 2BHK as compared to a 1BHK/3 BHK in OND-08. This has just seen a upward trend and reached close to 55% in the coming quarter.

The IT hub of the country, Bangalore had buyers opting for prime property in the city, 60% opting to buy property of 2 BHK houses in OND-08 which even remained constant for the coming quarter. However with regards the 1BHK and 2BHK house the trends have just been vice versa – A 26% search for 1BHK (OND-08) dropped to 2% in the next quarter and a mere 15% search in 3BHK heightened to 33% in the JFM-09 quarter.

A similar kind of trend as Bangalore has also been observed in the city of Hyderabad. This can simply be attributed to the fact that even in hard times of recession, real estate prices have been luring these users and thus the search results.

On the other hand, Chennai, a city experiencing a major real estate makeover and shooting up of land prices to levels unimaginable, has now taken a backseat. All those who earlier opted for 1BHK house are now opting for a 2BHK house and more with low budget criteria.

Key Findings
Mumbai continues to dominate as 1BHK market. Buyer’s mentality has not changed too much even with the correction in the real estate prices
User’s preference has changed drastically in tier-ii cities. They expect the property dealers to meet their demands with a 35-40% correction in the prices
Metros have witnessed a serious downward trend in buyer’s opting for 1BHK house in 2009

We have witnessed that close to 46% of deals which gets closed for a 1BHK house are from Mumbai. The only other city closely following it is Pune with 30% buying 1BHK house on Sulekha.

While seeing the Chennai buying trend it is quite apparent that 65% of the users bought a 2BHK house with only a mere 9% buying a 1BHK and 22% a 3BHK apartment. This was the result of the IT boom in the city which has increased the spending power of the users.

A 3BHK and above has always been reserved by the ‘A’ class community. It is quite astonishing to note that 36% of the deals in this category where closed in Ahmedabad justifying the income and the concept of joint family prevalent in the city.

With the current meltdown, users have overestimated the correction in real-estate prices and on an average are expecting close to 25%-30% drop in prices. On the other hand property dealers are not able to justify their fixed costs incurred based on the market conditions and are ready to meet the buyer’s demand. Below is a chart showing change in the budget preference cited by the users while looking for a 2BHK house in major metros:

RENTALS SCENARIO IN THE MAIN METROS

With the economic downturn, cost cutting and stringent budgets being the catch words of the new year the conscious Indian consumer is now opting for the rentals when compared to owning a piece of land.

With less capital investment and an already existing structure, it is now considered a wise move to rent an apartment for a lesser cost.

Chennai augmented by 62% in the JFM-09 quarter. Closely followed by Bangalore with a steady increase of 41%. All in all the cities in the South witnessed a complete make over from real estate to rentals.

Mumbai did not show a drastic shift as the common man mentality over their has always been a 1BHK house on rentals/real estate. Though it did show a spurt of 22% in 2BHK and 34% in 3BHK as people thought it was more economical beginning this new year.

Even Delhi maintained a quite subtle growth in rentals with an average increase of 30% in all the categories (be it 1, 2 or 3BHK) Though it was quite astonishing to note that the search for 4BHK house went up by 172%. This can be attributed to the following reasons:

a. Dealers and individuals started to give out their house on rent since they ceased to find a prospective buyer who would take it on ownership in these times
b. People were able to get bigger property on rent in less prime locations within their same budget

Source : http://www.indiainfoline.com/news/innernews.asp?storyId=97302&lmn=1

Posted in Ahmedabad, Chennai, General postings, Kolkata, Mumbai | Tagged: Ahmedabad, Chennai, Delhi, Mumbai, Real estate in india | Leave a Comment »

DLF’s Gurgaon mall project back to drawing board

Posted by paragjani on March 26, 2009

The developer is exploring options such as reducing the size of the mall or building a hotel and office space besides the mall

New Delhi: The country’s largest developer by market value, DLF Ltd, has put its ambitious Mall of India project back on the drawing board after cash-crunch and falling rentals forced the company to shelve the 4.5 million sq. ft project in Gurgaon, on the outskirts of New Delhi.

Mall of India was proposed to be the biggest mall in the country.
Weakening demand: DLF’s City Center Mall in Gurgaon. Four of the developer’s malls are expected to be ready before Diwali in October. Harikrishna Katragadda / MintDLF is now reworking the project dynamics. The developer is exploring options such as reducing the size of the mall or building a hotel and office space besides the mall.
“Construction is on at the project, but at a very slow pace,” a DLF official said on condition of anonymity. “It is now back at the drawing-board stage and we are looking at many options for the project. We need to utilize the land somehow.”

Excavation was on at the site when DLF decided to defer the project.
The developer is also exploring private equity investment for the project. Mall of India was to be built at a cost of Rs1,500-2,000 crore.
“Earlier, we could have completed the mall project with our internal accruals but now we might have to look at funding from private equity investors,” the official said.
Weakening demand for retail space is prompting mall developers to stall projects. In its third quarter analyst presentation, DLF had said that the company has stalled construction work on 16 million sq. ft of office and retail mall space out of the 62 million sq. ft of space under construction till project financing gets arranged.

Currently, DLF has eight operational malls in New Delhi and its suburbs. Four malls that were under construction in New Delhi, its suburbs and Mumbai are expected to be ready before Diwali in October, Arvind Nair, managing director, DLF Retail Developers Ltd, said on the sidelines of a conference on Tuesday. Rentals in the new malls will be less, Nair said. Mall rentals have fallen by 15-20% in New Delhi and its suburbs of Gurgaon and Noida.

DLF is, however, not renegotiating rentals with its tenants in its existing malls, Nair said. “We have not resorted to any renegotiations in our operational properties.

Terming footfalls as normal, Nair said developers are focussed on prioritising to avoid the slowdown. “Therefore, we have put our focus mostly on the metro cities,” he added.

Source : http://www.livemint.com/2009/03/24153204/DLF8217s-Gurgaon-mall-proje.html

Posted in Builders/ Developers, Delhi, Hotels/ resorts, New projects | Tagged: Delhi, DLF Ltd, Gurgaon, Mall Project | Leave a Comment »

More malls despite the slump

Posted by paragjani on March 26, 2009

CHENNAI: The slowdown may have stalled construction projects across the country, but Chennai is set to get six to eight new malls in the next couple of years, replete with food courts, cinema theatres, gaming arcades and shops.

“In another two to three years, about six to eight malls are expected to become operational. Two will be functional by this year: Ampa mall in Aminjikarai will be ready by the first half of 2009 and Express Avenue on Whites Road by the end of the year,” said Sanjay Chugh, national head of business development, retail of Jones Lang LaSalle Meghraj (JLLM), a leading real estate services firm.

According to a report by Cushman and Wakefield, another well-known real estate solutions firm, 14 malls covering 6.2 million sq ft were to come up in 2010 and 2011, mostly in the southern and western parts of Chennai, but many are now on hold. “Though there are quite a few projects listed on paper, only three or four malls will probably become operational in two years,” said Rajneesh Mahajan, executive director, retail services at Cushman and Wakefield. “There is limited spending on the ground and construction activity has slowed down. It is hard to tell exactly how many projects will stick to schedule,” he said.

Though many projects are stalling due to the slump in business, those already underway will continue according to plan. For instance, Ampa Mall, under construction for more than two years, is now nearing completion. “None of us expected a slowdown to hit us,” said Ampa Palaniappan, owner and developer of Ampa mall. “But since we’ve already weathered the storm, we can only expect growth now.” He said Ampa mall will be the first hyper market (a hyper market covers roughly about 60,000 sq ft and has both supermarket and departmental stores) in the city. “We have retained most of our clients due to reasonable rentals,” added Palaniappan, through whose mall PVR Cinemas will also be entering the city.

Many maintain that the recession has not made a dent in the retail market except for high streets like Khader Nawaz Khan Road, Nungambakkam High Road and Cathedral Road-RK Salai. Unlike other cities, Chennai has only two big malls and faces a huge demand-supply mismatch when it comes to organised retail, and retailers too need more space which is why the new malls are expected to be a hit.

According to JLLM, the share of organised retail space in Chennai is under 5% as compared to 35% in Delhi NCR and 17% in Mumbai, respectively. But what the slump has brought about are revised business strategies and models, and more practical rental rates. “According to the earlier model, rent-revenue ratio would be as high as 40%, which was unrealistic. But now the rates have been revised, say for a smaller store (1,000-2,000 sq ft) it would be about 18% of the gross sales,” said Chugh. “The upcoming malls are in different corridors, so even if there is some delay, there is a definite demand,” he said.

Source : http://timesofindia.indiatimes.com/Cities/More-malls-despite-the-slump/articleshow/4311674.cms

Posted in Builders/ Developers, Chennai, New projects, Retail/ malls | Tagged: Chennai, Jones Lang LaSalle Meghraj, Malls | 1 Comment »

Houses in the Range of Rs 5-10 Lakh to be Developed by Unitech

Posted by paragjani on March 24, 2009

Unitech is planning to launch mid-segment residential projects in the range of Rs 5-10 lakh in metro and suburban cities like Gurgaon, Chennai and Kolkata over the next few months. “We are amazed at the success of our recently launched projects and have realized that in today’s market, a project within the right price range will sell,” said Mr. R Nagaraju, General Manager, Corporate Planning, Unitech, said. Currently, the company is charting a strategy to come up with such low-cost apartments. “The inspiration to develop smaller and cheaper apartments comes from the Nano car, which is eliciting a tremendous response. I am sure our project will see a similar response, given the fact that we will come up with such low-cost apartments in metro cities,” Mr. Nagaraju added.

20 March 2009 Business Standard

Posted in Builders/ Developers, Chennai, Kolkata, New projects | Tagged: affordable housing, Chennai, Gurgaon, Kolkata, Unitech Ltd | Leave a Comment »

No Property Tax To Be Charged On Small Apartments in Mumbai

Posted by paragjani on March 24, 2009

The state legislative council has approved the new bill to evaluate property tax on capital value instead of rateable value in Mumbai. This decision will benefit residents of flats that have a carpet area of up to 500 square feet. As per the new system, these flats are free from property tax for the first five years. For the next five, there is a cap of 8% on annual increases. The rateable value refers to the rent a property is likely to fetch. Currently, property tax on old buildings in the island city is a pittance though capital values are very high. That is because rents in South Mumbai, especially in older buildings, have been frozen at 1940 levels.

20 March 2009 DNA Money

Posted in General postings | Tagged: Mumbai, Property Tax | Leave a Comment »

Mumbai resi prices fall by up to 40%

Posted by paragjani on March 24, 2009

Premium residential property prices built by major developers in Mumbai, till now relatively shielded from the recession, have fallen by 25-40%.

Large builders and developers including HDIL, Mahindra Lifespaces and Runwal Group are now ready to renegotiate prices, and throw in a few goodies in the bargain.

Mahindra Lifespaces, the real estate and development arm of the Mahindra Group, is offering 10% flat discounts on its property in Bhandup, an upmarket Mumbai suburb.

The company, which has close to 500 apartments in the housing complex, has also tied up with celebrity interior designers, at a fee that is ‘negotiable’, the company’s president, Pavan Malhotra, told Hindustan Times.

Source : http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3136851&c=1

Posted in Builders/ Developers, Mumbai, New projects | Tagged: HDIL, Mahindra Lifespace, Mumbai, Runwal Group | Leave a Comment »

SBI home loan scheme has hit the right note

Posted by paragjani on March 24, 2009

According to the sources, State of Bank Of India, India’s leading public sector bank, has fixed the interest rates for the loans up to Rs 20 lakhs for a period of one year. However, the offer rate can be availed only till April, 2009.

PEOPLE CAN apply for the home loan scheme launched by the SBI from the period of February to April. Sources have revealed that loans up to Rs 1300 crores have been sanctioned by the SBI in the month of February. A senior SBI official has said that the figure can grow higher in the coming two months and the banking authorities are getting excellent responses from the borrowers.

The officials further revealed that SBI will very soon reach the pinnacle by becoming the ace player in home loan lending field. The officials further added that they will soon overtake the HDFC and ICICI banks, that are currently holding the number one position in the home loan market.

Other major banks are also going on the steps of the SBI and they have also come up with many such schemes of offering discounted rates to the borrowers. Canara bank has also launched a scheme like this offering the borrowers fixed rates up to five years on loans up to Rs 30 lakhs.

The people can avail the Canara bank scheme only till December. According to this scheme, bank would ask the users to pay interest rate of 8.25 per cent for the first year, between the period of second and fifth year the bank will charge 9.25 per cent interest rate and for the rest of the tenure it will charge prime lending rate minus 2.5 per cent. Financial experts feel that the banks should come up with more such schemes in the coming days to maintain the momentum.

Source : http://www.merinews.com/catFull.jsp?articleID=15753905

Posted in Home loans | Tagged: Home loans, State Bank of India | Leave a Comment »

Retail and Commercial Sector Feels the Heat of Recession

Posted by paragjani on March 23, 2009

The meltdown in the residential segment of real estate is known but the situation is no better in the retail and commercial space as well. Many projects across the country have been badly hit and industry analysts feel that there is a huge over supply of retail and commercial space. In fact, there’s nearly 90 million sq ft of grade A commercial space that is blocked (lying unconstructed) across the top seven cities and more than 25 million sq ft of retail space that is similarly blocked. In the star category hotel segment, 3,000 rooms were expected to be opened for the market in the first six months of 2009, but only 1,000 of these will actually come up.

Says Sanjay Dutt , CEO, Jones Lang LaSalle Meghraj:” The reasons for so much property lying unconstructed is a drop in overall demand, a severe liquidity crunch, generalised uncertainty in the market and the non-viability of many projects, deriving from the fact that some developers bought land at high prices and now are unable to sell at cheaper prices and are now stuck. In the hotel segment, 3,000 rooms were expected to be opened for the market – however only about 1,000 of these will actually materialize. Residential projects, though not actually stalled, are in go-slow mode as developers are re-working their original plans to make these projects more affordable.”

There are at least 15 million sq ft of commercial real estate blocked across Mumbai and Thane district. While in NCR region more than 12 million sq ft of space has been blocked and one million sq ft each in Chennai and Kolkata markets. There were about 0.5 million housing units that came up in Q4 of 2008 in the same period in 2007 0.8 million housing units came up. Now many projects will be shelved or will face delayed completion. The possibility of projects being shelved is the lowest in the residential asset class as compared to commercial and retail space. In many cases the residential projects might undergo some construction changes in terms of configuration, pricing and size.Many in the industry believe that there has been an over supply of retail and commercial space. This has resulted in many developers, who till sometime back were not ready to even negotiate prices, now offering discounts and freebies to attract tenants. Majority of the developers across the country have lowered the common area maintenance charges that include facilities like air-conditioning, toilets and general space upkeep. In fact, this itself constitutes almost half of the rentals paid. Says Kishore Biyani, CEO of Future Group:” It is just a mis-match of demand and supply in the real estate business. We feel that now is the time where the developers should rework the entire gambit of the business. Till such time the retail market does not pick up it would be very difficult to absorb such kind of space. In the near future the market has to stabilise as far as the rentals are concerned. Productivity is a key factor for any retailer to operate efficiently in a mall, in case of a leased deal.”

However, in certain micro-markets many retail spaces saw conversion into office space for quick revenue returns due to continued and increasing demand for office space in certain micro markets. This particular trend is expected to continue in the coming few quarters too.

Source : http://www.indianrealtynews.com/retail-market/retail-and-commercial-sector-feels-the-heat-of-recession.html

Posted in Chennai, Kolkata, Mumbai, Serviced apartments/offices | Tagged: Chennai, Jones Lang LaSalle Meghraj, Kolkata, Mumbai, Thane | 1 Comment »

Home, sweet home from Abodes India

Posted by paragjani on March 23, 2009

The easy to use abodesindia.com is helpful for those who want to buy, take or sell a residential property on lease. It gives a free listing of properties in as many as 300 cities across the country and here you can search for residential properties..

IF YOU need to go about searching residential properties in India, you have come to the right place when you typed abodesindia.com in your address bar of your computer and hit the ‘go’ button. The most salient features of abodesindia.com are that the site gives a free listing of properties in as many as 300 cities across the country and here you can search for residential properties of your choice from a wide variety of options.

Abodesindia.com is dedicated to help you in any capacity you choose, whether you want to buy a residential property or take a lease on it or you are planning to sell your property or lease it out to some tenant. The database of abodesindia.com is extensive and is specially suited for your purpose as it gives you the name of almost one lakh properties all over India, besides a list of approximately 10,000 buyers, 2500 brokers and 1000 builders which can be narrowed down by going to the residential section.

The easy to use abodesindia.com is very helpful for those who want to buy or take a residential property on lease as the search can be made on pin-point basis by mentioning whether one wants the listing of prospective properties to come under the heading of direct owners, brokers, builders or investors.
Moreover, new constructions that are coming up and resale properties are also given a separate listing by the site which facilitates the search to a great deal. By mentioning the type of property that one is planning to get, an apartment, bungalow, chawl, duplex, farmhouse, outhouse, penthouse, row house, service apartments or weekend homes, not only the search gets easier and user-friendly, but also speaks volumes of the careful listing made by abodesindia.com in uploading useful information in such a manner. Moreover, by mentioning the budget one intends to spend for the home, sweet home, abodesindia.com gives the icing on the cake for now you can know every detail by logging on this site and get information from all over the country without needing to visit every place in search of information. For those who want to sell or lease out residential properties also, search is facilitated by the extensive resources at abodesindia.com in terms of location and property type.
So, log in abodesindia.com today and look for residential properties with help from the site’s database and easy to use search options that are tailor-made for your needs.

Source : http://www.merinews.com/catFull.jsp?articleID=15755960

Posted in General postings | Tagged: Abodesindia.com, Real Estate Website | Leave a Comment »

Home loan rates may drop again, say analysts

Posted by paragjani on March 23, 2009

Home loan interest rates, especially on new home loan accounts, started softening from the beginning of this year when the Reserve Bank of India

(RBI) announced sharp cuts in the repo rate and cash reserve ratio (CRR). The RBI started slashing the key policy rates since October last year, after taking into account the worsening liquidity situation of banks here. The central bank has reduced its key policy interest rates (repo and reverse repo) and reserve ratio (CRR) four times in the last six months.

The cut in the repo rate meant commercial banks would have funds available at a lower cost. On the other hand, the cut in the CRR meant banks would have to keep less money with the RBI and hence they had more money to lend. Analysts believe that interest rates have not yet bottomed out and there will be further cuts in borrowing rates over the next few months.

These are some of the factors that are expected to bring the interest rates on home loans further down:

RBI moves

Analysts believe that banks have not yet passed on the entire benefits of lower interest rates (especially to existing home loan borrowers). This is because banks fix the interest rates based on the concept of net interest margin (the difference between average yield on advances and average cost of deposits). Usually, banks like to keep this spread (net interest margin) above three percent.

Banks are locked-in with higher interest rate deposits from the public for certain maturity periods and these deposits cannot be terminated in view of the prevailing market conditions . Therefore, the interest rates on existing loans cannot be lowered immediately. Meanwhile, the RBI and government are pressurising banks to slash the interest rates on existing loans as well.

Liquidity

The consumer sentiments have dropped drastically due to the global slowdown. The RBI encouraged banks to increase the credit inflow to the economy by increasing the bank credit target to 24 percent from 20 percent in the recent policy reviews.

The RBI also increased the money supply target to 19 percent from the current 16.5 to 17 percent levels. This will help increase the liquidity in the market, and also help in easy availability of loans.

Inflation rate drop

The inflation rate has come down drastically to around 2.3 percent for the week ended February 28 from its peak of 12.9 percent recorded in August last year. Analysts believe the inflation rate will go down further and may end up lower than two percent by the end of this month itself.

Some analysts believe there might be a negative inflation rate in a couple of months if the market conditions remain bad due to the higher base Tips for home loan borrowers
Home loan: Documents you need
Tax deduction on home loan
effect of last year. It will prompt the RBI to cut the policy rates further and that will have a direct influence on home loan interest rates.

Go for it

Borrowers should take note of these factors to track the movement of home loan interest rates. However, it is not prudent for all to keep waiting with their fingers crossed. Many banks have recently announced home loan rate cuts and people should not expect another rate cut in the next few weeks again. There are many attractive deals available for new home loan borrowers in the market. People who have already finalised on a property can choose from these available home loan offers.

A borrower should analyse the various aspects of home loans first. You should gather as much information as you can about the home loan product and lender you choose. You can consult those who have already taken a loan and gone through such an exercise.

Here are some important factors borrowers should analyse while going in for a home loan:

Charges

Understand the various charges, fees and penalties that the bank will charge at the beginning of the loan, during the loan tenure and at the time of termination of the loan. Some banks push for home loan insurance cover. You should weigh your risk profile carefully before choosing the insurance product .

Track record

Since a housing loan is a long-term relationship with the bank, you should look at the track record (trigger and frequency) of revising the home loan interest rates, in the last few years.

Flexibility
You should also look at the flexibility of charges on EMI revisions, part-prepayments and foreclosure of your home loan.

Source : http://economictimes.indiatimes.com/Features/Financial_Times/Home_loan_rates_may_drop_again_say_analysts_/articleshow/4298688.cms?curpg=2

Posted in Home loans | Tagged: home loan, Home loan interest rates | Leave a Comment »

Furnished offices flourish amid gloom

Posted by paragjani on March 23, 2009

Corporate revenues have shrunk, expenses curtailed and manpower numbers trimmed.

But amid this depressing scenario, the furnished offices business appears to be looking up, accommodating new clients who otherwise would have gone in for traditional space.

One-stop solution

Furnished offices provide a one-stop solution to companies and entrepreneurs, offering services such as executive offices, Internet connectivity, videoconferencing, wireless access, telephone and fax lines, receptionists and client service representatives, apart from on-site executive assistants, and meeting/board rooms on pay-as-you-use basis.

Such offices also offer a prestigious address for executives to print on their business cards.

Charges are competitive and substantially lower than traditional office space.

Ms Meenal Sinha, General Manager, Imperial Servcorp, says business is up 30 per cent in the last few months as multinational corporations and domestic players are looking at furnished office accommodation for convenience and cost-savings as team strength and expense sheets have been cropped. Occupancy rate, she said, was as high as 85 per cent.

Imperial Servcorp has a total of 50,000 sq.ft of office space in Mumbai and Hyderabad with the client list that includes MNCs as well as start-up firms. Imperial Servcorp is a joint venture between real estate major K. Raheja Corp and Australian serviced office provider Servcorp.

On expansion mode

Regus, which has over 2.25 lakh furnished space across the country, is looking to expand operations. “We are looking at strategic locations where we do not have a presence, said Mr Madhusudan Thakur, Regional Vice-President.

Globally, the Regus Group operates over 950 centres across 400 cities in 70 countries. The company said clients such as Google, GlaxoSmithKline and Nokia outsource their office and workplace needs to the group.

Mr Thakur said 40 per cent of the new large clients were those who owned offices before and the balance were new, who would have either gone in for traditional space or those who preferred to tread cautiously in current economic scenario.

Typically, clients need to sign a one-page agreement to move in almost immediately. On an average it costs Rs 20,000 to accommodate one person for a month in Mumbai.

Mr Thakur says his client mix include IT (25 per cent), project driven clients such as consultants (15 per cent), manufacturing companies (23 per cent), research and development (15-20 per cent) and financial institutions (20 per cent).

Occupancy rate is 85-95 per cent. About 75 per cent of the clients stay put for eight to nine months in general.

The slowdown has, however, not left the service providers unscathed. “Charges are a function of the rentals and today it is lower by 25-30 per cent than the year ago period,” he said.

Source : http://www.thehindubusinessline.com/iw/2009/03/22/stories/2009032251031500.htm

Posted in Builders/ Developers, Hyderabad, Mumbai, Serviced apartments/offices | Tagged: Hyderabad, K Raheja Corporation, Mumbai | Leave a Comment »

12,000 flats up for sale on EMI defaults

Posted by paragjani on March 23, 2009

Mumbai: If you go to Paragon Apna Ghar Society in Andheri’s Lokhandwala complex, you will see a demand notice pasted by the State Bank of India on a ground floor flat. It’s owner, Deepak M, obviously could not pay his EMIs on the housing loan. At Borivli’s Gautam Rushivan project, Shiela P’s door has a similar notice pasted on it. She, too, was probably unavailable when the bank’s agents turned up to serve the notice.

These are just the first stages in a long process that separates home loan borrowers from their homes, leading ultimately to a public auction. In Mumbai and its suburbs, an estimated 12,000-20,000 flats and homes are in the process of being notified, seized and auctioned off as home loan borrowers stop paying their monthly EMIs in a downturn. Dreams of owning a home have gone sour for thousands of families.

Rajesh Govil, 39, who had taken a loan four years ago for an under-construction property in Kalyan (West), a Mumbai satellite town, has no home to call his own anymore. He was unable to service his loan with a large private bank, and had to give up his property when a third legal notice arrived. His property is all set to be auctioned by the bank.

From private sector institutions like ICICI Bank and HDFC to public sector banks such as Bank of Baroda and State Bank, all are seizing one- and two-bedroom flats in Mumbai’s peripheral cities of Kharghar, Navi Mumbai, Kalyan, Dombivli, Nerul, Karjat, and Thane. These are the towns the middle classes flocked to when Mumbai became unaffordable, but the downturn has obviously upset even these dreams.

“In Mumbai, there are some areas like Thane, Goregaon and Mira Road which witnessed a construction boom and there defaults are rising. Also, there are people in the financial services who made a lot of money through bonuses. Now that these bonuses are not there, they can’t afford the loans,” said Pranay Vakil of Knight Frank, a real estate consultancy.

As you read this, property brokers estimate that over Rs 3,000 crore worth of flats in these satellite towns are in various stages preparatory to auction by banks.

But it’s not borrowers alone who are biting their fingernails. Analysts spoken to by DNA say that the downturn has hampered the ability of banks to get rid of these properties and recover their loans. At a time when property sales are just not moving, the addition of seized properties to the real estate inventory in Mumbai and its surrounding areas has not helped matters.

DNA spoke to 10 brokers across the suburbs, and at least four of them agreed that properties coming back to banks had increased drastically. A Kalyan broker said: “The properties coming to auction are four to five years old where the buyer could not service the loan. But there are few takers!”

A senior official from Bank of India says his bank has seen a rise of Rs 70 crore in bad home loans since September, 2008. “Till September, the figure (of bad loans) was merely Rs18 crore, but by February, 2009, it had shot up to around Rs90 crore,” said the official, part of the bank’s special asset recovery cell. The bank is, however, trying to help borrowers avoid defaults by rescheduling loan “in genuine cases”.

A senior official from Federal Bank in Mumbai said: “Sales are not substantial. Auctions are failing as buyers are still waiting for prices to come down and banks are unable to fetch market rates for these properties.”

Source : http://www.dnaindia.com/report.asp?newsid=1241110

Posted in General postings, Mumbai | Tagged: Mumbai | 2 Comments »

Demand for affordable housing in India is still far outstripping supply

Posted by paragjani on March 23, 2009

The growing middle class and services sectors continues to generate demand for affordable housing, which is in short supply to meet it, according to Property Abroad’s director, Les Calvert, he said:

“The [Indian] middle class continues to grow, new industries like graphic design continue to see massive growth, and millions of university graduates are finding jobs or starting businesses and looking for affordable housing to buy and rent”.

“Previously the luxury housing market in India was where the big money was to be made, and most developers focused their efforts there, now, those developers are struggling, and the ones that are able to survive are turning their attention to more affordable developments where there is the greatest need for more affordable housing.”

Affordable housing in emerging market economies, well those still emerging and not declining, is thought to be one of the only property investments worth recommending for 2009. India is most certainly still emerging. Though it has suffered badly from the global downturn, unlike other economies that are falling into recession, India is expected to see between 4 and 6 percent economic growth in 2009, which is to pick up in Q4 2009 and beyond.

Property Abroad are currently advertising dozens of properties for sale in India, including an affordable housing development in Poladpur. The Hill View development offers 1 bedroom apartments from £25,000, just 5km away from the Poladpur Special Economic Zone; an area of great potential growth and great demand for such affordable housing. The development offers 7% guaranteed rental yield for the first five years.

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/demand-for-affordable-housing-in-india-r1129734.htm

Posted in Builders/ Developers, New projects | Tagged: affordable housing, Real estate in india | Leave a Comment »

South or suburbs, one rule for assessing property tax

Posted by paragjani on March 23, 2009

Mumbai Residents of South Mumbai will now have higher property tax assessment while those in the suburbs will see a reduction in taxes following the passing of the Bill to allow the Brihanmumbai Municipal Corporation to collect taxes based on the capital value of properties. Mumbai will finally switch from the rateable value-based collection of property tax, under which tax is assessed on the rent a property can earn.
The reforms are expected to finally rationalise property tax collections — South Mumbai, where rents are frozen by the Rent Control Act, has until now paid comparatively lower property tax than suburban residents. If approved by the Brihanmumbai Municipal Corporation, the new rules will come into force by July.

However, for the next five years, properties smaller than 500 sq feet will enjoy an exemption from the new system. There will also be relief for properties owned by the physically handicapped, women and senior citizens. Revisions in this structure will be carried out after five years when exemptions are withdrawn and all properties assessed at par based on their capital value, while also factoring in points like the age of a building, land use purpose, etc.

It is estimated that commercial properties will pay three times the existing taxes. Those South Mumbai properties that currently pay the lowest tax may see a 100 per cent rise, while suburban residents could see a 20 pc to 25 pc fall in tax bills.

The bill, which was introduced in the state legislature in 2006 and finally cleared by the lower house in 2008 was finally approved by the upper house on Thursday. The Mumbai Municipal Corporation Act will now be amended to make way for the reforms.

Additional Municipal Commissioner Anil Diggikar said the civic administration would immediately initiate the process for implementation of the capital value based system, which is expected to double property tax collection for the BMC coffers. “In the next two months, the guidelines and rates proposal will be placed before the Law, Revenue and General Purposes Committee, the Standing Committee and the General Body for final approval,” he said.

The civic administration will also release a set of ‘Business Rules’ that will list around 65 types of properties that assessed properties will be categorized into. It will also prepare a draft for the rates at which property tax will be calculated. However, it will be corporators in the Sena-BJP controlled BMC who will approve the rates of taxation for the island city and suburbs.

Under the new system, tax will be based on the market rates of property in that area as designated by the Ready Reckoner.

Some elected representatives, especially those elected from South Mumbai, continue to oppose the new system. MLA Mangal Prabhat Lodha, also a builder, said: “This is injustice to the people staying in South Mumbai and residents will move court against this bill.”

Sena MLA Diwakar Raote said the Ready Reckoner rates, till now used by the government only for calculation of stamp duty, cannot be used for property tax assessment. The use of the Ready Reckoner rates could be subject to litigation, he said.

Then & Now
* Before the Rent Act came into force (until 1946), tax for the entire city was calculated at 11 per cent of rateable (rent-earning) value. After 1947, when rents were frozen, the BMC kept on hiking tax rates to increase its revenue.
* Rates have jumped from 11 per cent to 112.5 per cent (for commercial properties) and 83.5 per cent (for residential properties) of rateable value.
* Since suburban rents were not under Rent Control, the result is a disparity between the tax assessment in the island city and that in newly formed suburban areas.
* Experts believe the new tax system will be transparent and bring in a uniform structure, without differentiation between the people of South Mumbai and those of the suburbs. President of the Property Lessors Association Rajendra Mehta said the new system will bring in ‘rationalisation’. “There was irregularity in the tax system as there were a few paying more than others and a few paying less. Now the system will be same for everyone and will be more affordable to the middle class,” he said.

Source : http://www.expressindia.com/latest-news/south-or-suburbs-one-rule-for-assessing-property-tax/436798/

Posted in General postings, Legal questions, Mumbai | Tagged: Mumbai, Property Tax | Leave a Comment »

Investing in Land, its is the safest thing yet says AbodesIndia

Posted by abodesindia on March 22, 2009

You can never lose money in uncertain times by investing in land. Other asset classes like equities, bonds , currency, commodities will show extreme price volatility while land prices are normally less liquid and therefore less volatile. Logically, as India’s population expands, we will need more houses and cities will expand to accommodate that. As there is only a certain amount of land available on the outskirts of the city, supply restrictions and rising demand will force an upward price spiral. There are however many challenges in buying land and it is very difficult for the lay man to understand the risks involved.

This article tries to highlight several common problems one faces in investing in land which are often overlooked in the haste to make a quick buck. What is the easiest way to make a fortune in real estate investing Land at the outskirts of cities often have a low FSI ( build to land ratio and this helps the acquirer get the land cheap. As the population of the main city increases year on year, the city gradually expands and the “outskirts” now come inside the city Municipality limits. Land with FSI as low as 4% suddenly gets upto 100% FSI and the land value skyrockets over 25 times.

Hurdles in buying agricultural land

According to Ramesh Gulati, VP, AbodesIndia.com, , ” The best way to invest is to buy cheap land on the outskirts of cities. The primary hurdle in acquiring land on the outskirts of cities is that most regions have protective regulations for farmers and allow only farmers to hold and trade such land.”.

Identify pockets which have a potential to appreciate quickly based on a review of the Town Planning maps for the city that you reside in is the first step towards finding out the exact location where one can invest. Having done this one needs to get a deep understanding of building regulations based on the development Control Regulations prevalent in the city.

Land records in India are yet to be completely digitized and this proves to be a fresh challenge in buying land. Often the original seller has sold the same land to multiple buyers as there is no transparent “exchange to buy and sell land”. The title on land is the most difficult thing to establish as legal documents made by historical buyers of the same property have to be all correctly drafted to ensure that your current purchase transaction is not rendered null and void. This involves a elaborate legal search process to establish the historical transfer of title. A new buyer can protect himself by acquiring land that has not be too frequently traded.

Land transactions in India have a high degree of “cash payments” as people try to avoid paying the high stamp duty rates charges in many states that can go as high as 15-18% and therefore understate the value of the property on the sale agreement. This practice results in your having to pay a higher capital gain tax at a future date at the time of sale. An innovative method to reduce stamp duty incidence is to buy the property inside a company and sell the property through the transfer of the company’s shares. This reduces the stamp duty incidence to just 0.5% any where in India.

Can I leverage my capital?

Leveraging is often difficult as Lenders don’t give home loans for land purchases . However there are many innovative ways to leverage one’s capital that are often practiced by the seasoned investor. One of the most frequently used methods is called ‘Seller’s Credit” in which the Buyer convinces the Seller to accept partial upfront payment for the land and then take the balance over a period of 2-3 years. In the mean time the buyer through a legal document takes the full rights to transfer the land at a profit to another buyer at a higher price, without actually paying the original seller the full price of the property. This however can be only be done in a rising real estate market .

How much should I invest and what should be my investment horizon?

Land investments are very illiquid and one must take at least a 5-10 year horizon in investing. As the city expands over time real estate appreciation is also going to take time. For a young person, 25-35 of age, not more than 25-30% of his net worth must be invested in illiquid real estate assets. Clearly land investing is your best bet for retirement as land and equities have historically given superior returns compared to investing in fixed deposits, gold and commodities. Land investing requires patience and the legal expertise to ensure that the title of the land is secure. Companies like Albertsville Enterprises Pvt. Ltd. are pioneers in land investing advisory services in India and have their product offering on www.AlbertsvilleAMC.com

The author is a VP with AbodesIndia.com,

India’s Largest Real Estate Network

Posted in General postings, Investment proposals, NRI Center, Venture funding / P.E | Tagged: land investing in india, real estate investing | Leave a Comment »

DLF begins refunds to some buyers of Chennai property

Posted by paragjani on March 20, 2009

Buyers say around 561 people have sought to exit the property; DLF didn’t expect more than 100 to opt out

New Delhi/Chennai: India’s largest real estate developer by market value, DLF Ltd, has started issuing refund cheques to buyers who bought apartments in an under-construction project in Chennai when prices were significantly higher than today.

DLF has reduced sticker prices on the Chennai development, as also at projects in Hyderabad and Bangalore, but customers who booked apartments in Garden City on Old Mahabalipuram Road, on the outskirts of Chennai, are demanding that the developer cut prices by at least 25%.

Overcast outlook: A DLF project in Gurgaon. India’s property market is experiencing a downturn that has seen a 20-40% drop in valuations. Harikrishna Katragadda / MintSome 561 apartment buyers have sought to exit the project in what could be the biggest exodus from a property development in India, according to a grouping of buyers. DLF had earlier said that though it had received 100-150 letters from buyers wishing to exit, the company did not expect more than 100 buyers to opt out.

The refund has been made so far to four buyers who are part of the core group of DLF’s Garden City buyer forum on Google Groups, a group run by the Internet search engine Google. Three more refund cheques are ready, but the buyers have not yet collected them, according to group members, who asked not to be named.
“I collected a refund of the booking amount I had paid, which is around Rs5.21 lakh, on Saturday,” said a design engineer who is part of the group. “DLF has given me full refund but the cheque was made in the name of Dream Castle, a direct selling agent of DLF,” he said. The refunds are being processed through DLF’s direct selling agents such as Dream Castle, buyers said. The buyer decided to exit from the project because, according to him, DLF had not reduced the price of the apartments to reflect market conditions.

As economic growth slows and bank loans become tougher to get, India’s property market is experiencing a downturn that has seen a drop of between 20% and 40% in valuations, ending a nearly four-year real estate boom.

DLF has said it will refund all buyers who seek to exit Garden City, a 3,493-apartment project, of which 1,800 apartments have been booked so far, buyers said. Buyers of the project say they have several issues with Garden City, top of which is a demand that DLF scale back prices of apartments.

The company’s move is being interpreted as one prompted by pending approvals DLF denies it is refunding all the buyers who have submitted exit letters. “We are not refunding as such but are just swapping existing sales with new bookings,” a DLF spokesperson said.
“We see the genuineness of the customers and then consider this option. Some people have lost their jobs and some people have got pay cuts. We verify with their employers and then consider it, if we find it true,” said DLF’s spokesperson. He said that bookings of five-six people have been swapped with those of new buyers.
When asked if this option would be given to all the people who have sent exit letters, he said, “This is not a current account that you put in the money and withdraw whenever you want to. There is nothing general or in-principle about this move. Being a big company, we emphasize on customer relationship and on humanitarian grounds, we consider their (buyers’) requests.”

An expert interpreted DLF’s move as one prompted by pending approvals for the project. “I think the only reason for developers buckling is because they don’t get approvals,” said Aditi Vijayakar, India executive director for residential services at realty consultancy Cushman and Wakefield.
“Had they got the approvals, I don’t think the stand would have been the same. A lot of developers started selling even before they got the approvals while they should have started marketing after they got the approvals. This was the industry norm during the boom time,” Vijayakar said.

The DLF spokesperson said that the company had received all approvals, the last on 13 February. DLF had started selling apartments in the project at the beginning of 2008, before it had all the approvals in place.

In March 2008, buyers of DLF’s Garden City project came together on Google Groups to negotiate with the developer on several issues. The group now has around 950 members, including a core group of around a dozen who negotiate with DLF.

On 23 February, DLF announced a price cut of 10.5-18% on the apartments from Rs2,800 per sq. ft to Rs2,500 each, from Rs3,000 to Rs2,550, and from Rs3,200 to Rs2,600 per sq. ft depending on which stage the buyer comes in. The firm is also offering a special price of Rs2,650 per sq. ft until 1 May, after which it will be revised upwards by Rs100 each sq. ft.

Many buyers, however, felt that the price cut did not go far enough and decided to exit from the project. According to a poll taken by the buyers’ forum, 561 buyers have submitted letters to DLF to exit from the project. “The number of buyers who want to exit could be much more…it could be close to 800 people,” said a second member of the core group. He, too, requested anonymity.
Members of the core group say they will continue to be a part of the buyers’ forum even after receiving their refund and that the group will not disintegrate till all the issues are addressed and people who want to exit get their refund. “We will nominate new members to lead the group but we will continue to advise them,” said the second member of the core group.

Balanathan Seetharaman, another buyer, who had booked his apartment in March 2008, says that arrangements are being made for people living overseas who have booked their apartments and wish to exit, to receive their refund amount.

Source : http://www.livemint.com/2009/03/19214909/DLF-begins-refunds-to-some-buy.html

Posted in Architects/ Designers, Chennai, General postings | Tagged: Chennai, DLF Ltd | Leave a Comment »

Realty check: 53% homes built in metros since ‘07 unsold

Posted by paragjani on March 20, 2009

Mumbai: More than half the houses built in six major cities over the last two years are lying unsold, estimates a leading real estate research agency.

Just about 3.86 lakh homes out of the 8.21 lakh built in the last two years in the Mumbai Metropolitan Region (Mumbai, Thane and Navi Mumbai), National Capital Region (Delhi, Faridabad, Gurgaon, Noida, Greater Noida and Ghaziabad ), Bangalore, Chennai, Hyderabad and Pune found buyers, says a report by the Mumbai-based Liases Foras. The agency surveyed 5,810 new residential projects in these cities in December and January.

The 53 per cent unsold inventory (4.35 lakh homes) translates into no takers for 50 crore sq ft of a total 94 crore sq ft of living space. Pankaj Kapoor, CEO of Liases Foras, said the inventory of unsold houses across cities has doubled over the past year. In Mumbai, it has increased nearly five times between 2006 and 2009 — from 1.68 lakh sq ft to 8.08 lakh sq ft.

Kapoor attributed the absence of buyers to the mismatch between prices and affordibility. According to the report, prices started to go up in 2006, when supply was limited. Over the next two years, they shot through the roof as money poured into real estate firms from IPOs, FDI and cash-laden investors. Stocks piled up as developers shifted focus from selling homes to getting financial valuations done to attract more investment.

This, Kapoor said, is evident from the fact that Chennai, which has a conservative realty market with little involvement of equity players, has only 42 per cent unsold flats ¿ less than Mumbai and Delhi and the IT hubs of Bangalore, Pune and Hyderabad, where over 50 per cent of the stock remains unsold.

The supply glut, and the fact that investors and private equity firms are largely out of the realty market, signals good times for buyers, the report says. Firms like DLF have announced price cuts ranging from 18 per cent (Chennai) to 30 per cent (Bangalore).

“Battling mounting debts, developers are left with little option but to find end-users to sell their flats. The gap between affordability and pricing is narrowing,” Kapoor said.

Source : http://www.indianexpress.com/news/53-homes-built-in-six-metros-since-07-unsold-realty-check/436827/

Posted in Builders/ Developers, Chennai, Delhi, General postings, Hyderabad, Mumbai, Pune | Tagged: Bangalore, Chennai, Delhi, DLF Ltd, Hyderabad, Mumbai, pune | Leave a Comment »

Agni Property launches the next paradigm in Business of Property in Indian Market

Posted by paragjani on March 20, 2009

Agni Property today formally unveiled the next paradigm in the business property in Indian market in the presence of its board of directors Mr. Pranav Ansal, MD and Vice Chairman, Ansal API Group of Industries, Mr. Sunjay J. Kapur, Vice Chairman & M.D, Sona Koyo Steering Systems Ltd, Mr. Rishi Khosla, CEO, Copal Partners, UK and Mr. Samarjit Singh, MD,

Agni Property & President APP in New Delhi.

Part of the Agni Group which has offices in India, London and a presence in Dubai, Agni Property is a one-stop real estate avenue offering an entire range of property related services which include buying, selling, renting, home loan and financing options, legal services and other value added services with a clear agenda for serving the purpose of the consumers.

At the launch of Agni Property, Managing Director, Samarjit Singh said, ‘Clients enjoy total peace of mind when buying, selling or leasing through Agni Property, since we undertake due diligence on every property to make sure there are no loose ends or unwanted surprises later on. What’s more, we treat all clients on par, be it an individual with a one-off sale or purchase requirement or a corporate with multiple requirements and repeat requests.’ He added furhter, ‘Currently, approximately 70 per cent of the Company’s equity vests with the promoters and management, while investors hold 30 per cent stake’

India’s first truly professional Property Broking Company, Delhi-based Agni Property is making its presence felt through planned offices in Mumbai (three), Delhi (two), Bangalore (two), Jaipur, Lucknow, Ahmedabad, Indore, Pune, Mysore, Chennai, Kolkata, Goa, and Hyderabad. Currently with four offices, in New Delhi, Gurgaon, Noida and Chandigarh, it will now open offices in the Western region in the first quarter of 2009-10 and, thereafter, the Southern region in the last quarter of 2009-10 at a total investment of approximately Rs60 crore across target regions. Following the hub-and-spoke model, the Company then plans to expand into tier II and tier III cities.

With offices in London as well as a presence in Dubai – which includes formal tie-ups with leading developers – international sales also contribute to the Company’s revenue, particularly considering the sizeable NRI (non-resident Indian) and PIO (person of Indian origin) population in these two cities.

In a short span since inception, Agni Property has more than 500 registered users and more than 100 completed transactions. The Company is already close to breaking even within 11 months.

To facilitate faster turnaround in deals and real-time responses across multi-city offices, Agni Property uses the latest technologies Agni Goldmine and Agni Magic. Whether a client is looking for the best commercial or residential deal, the company’s vast database, Agni Goldmine, comes up with multiple options at the click of a mouse. Agni Goldmine also includes a photo bank of all its available property listings as well as step-by-step 3D walkthroughs for a proper look and feel of the place. Even before a customer actually sets foot on a property, he can ascertain whether a property matches his personal yardsticks or not. This facilitates a client’s speedy decision on property purchase, within hours if required, where it once took weeks, months or years of often fruitless search.

With membership in NAR India (National Association of Realtors) and APP – Delhi NCR (Association of Property Professionals), Agni Property ensures that global best practices are followed internally, while simultaneously leading the way with other stakeholders such as the Gorvernment to usher the necessary regulations in the realty sector.

Source : http://www.pr-inside.com/agni-property-launches-the-next-paradigm-r1123840.htm

Posted in General postings | Tagged: Agni Property | 1 Comment »

Lodha to Develop Mumbai Township for $185 Million

Posted by paragjani on March 20, 2009

March 18 (Bloomberg) — Indian developer Lodha Group plans to invest about 9.5 billion rupees ($185 million) to develop a township in a Mumbai suburb targeted at middle-income buyers as the slowing economy reduces demand for luxury apartments.

The Mumbai-based real estate developer aims to build 6,300 homes priced between 1.2 million rupees and 2.4 million rupees over 125 acres of land in Dombivali in north Mumbai over three years, said Abhisheck Lodha, a director at Lodha Group.

“There is a huge shortage of good quality middle-class housing in Mumbai,” said Lodha from his central Mumbai office today. “We are targeting households earning up to one million rupees a year, who form 40 percent of Mumbai’s population.”

Developers including DLF Ltd. and Mumbai-based Housing Development and Infrastructure Ltd. are cutting prices and increasing focus on cheaper homes to lure buyers. Property prices in some localities in Mumbai and New Delhi doubled in three years from 2005 as the economy and stocks posted record gains.

The Sensex index halved in 2008 as overseas funds withdrew from local stocks following the global financial crisis.

India’s $1.2 trillion economy may find it tough to achieve its 7.1 percent growth target in the year to March 31, former finance minister P. Chidambaram said in Mumbai earlier this month. The growth will be the slowest since 2003.

Source : http://www.bloomberg.com/apps/news?pid=20601091&sid=aOW4MtonLPnE&refer=india

Posted in Builders/ Developers, Mumbai, New projects | Tagged: Lodha Gropu, Middle-class housing, Mumbai | Leave a Comment »

Sunil Mantri plans to raise Rs1,000 crore

Posted by paragjani on March 20, 2009

Realtor says funds needed to develop land bank; Malaysia project faces 1-year delay but plans for India on track

Mumbai: Unlisted property firm Sunil Mantri Realty Ltd plans to raise at least Rs1,000 crore from private equity, or PE, funds this year as it seeks to enter new markets and develop part of its 1,500- acre land bank.

Bucking the trend: Sunil Mantri says his firm, which sold stake to HT Media and BCCL in ’08, will not go in for dilution of holding this time.In June, the Mumbai-based developer sold 0.65% stake for Rs20 crore to HT Media Ltd in a transaction that valued the company at Rs3,076 crore. In April, Bennett, Coleman and Co. Ltd (BCCL) paid Rs60 crore for an undisclosed stake in the firm.

HT Media, publisher of the Hindustan Times and Mint, competes with BCCL, publisher of The Times of India and The Economic Times.
“This time, we are planning to raise funds strictly at project level and don’t want to go in for dilution of stake or funding at company level,” said Sunil Mantri, founder of the eponymous firm. “We have also been talking to different PE funds and will finalize (a deal) in some time.”
The fund-raising plan comes at a time when most real estate developers are scurrying for finances to finish under-construction projects amid an economic downturn that has dented real estate demand and valuations. Many property firms are being offered a lifeline by PE funds, which see potential profit opportunities in the sector.

Sunil Mantri Realty, an eight-year-old company, has around 10 million sq. ft under construction. Over the years, it has acquired a 1,500-acre land bank spread across the country.
A global downturn in the realty market has delayed by a year the company’s first international venture—to develop, fund and market the MSC Malaysia Cyberport jointly with MSC Cyberport Sdn. Bhd.
“Currently, the master planning and land consolidation process is going on,” said Mantri. Sunil Mantri Realty plans to invest $100 million (Rs514 crore now) in the project in three phases over a period of eight years.

On home ground, however, the company says it is proceeding according to plan.

Three weeks ago, the company bought three sick textile mills from Maharashtra State Textile Corp. Ltd for Rs68 crore. It plans more such acquisitions in the coming months.

The mills, located in Nagpur, Solapur and Kolhapur, will be converted into residential and commercial properties, even as a portion would be retained as a textile unit.
The company has re-entered the Karnataka market in which Sunil’s younger brother, Sushil Mantri, runs his own company, Mantri Developers Pvt. Ltd.

Sunil Mantri now wants to develop projects not only in Bangalore but in other parts of the state such as Belgaum and Hubli where it has already acquired land. After an initial investment of Rs500 crore towards its Karnataka plans, it is planning to use some of the funds it will raise for various projects in the state. A 206-apartment project is coming up on Kanakpura Road in the technology capital, and more projects are under way.
Mantri Developers has nearly 12 million sq. ft under construction in Bangalore, Hyderabad and Chennai, but the elder Mantri is confident there won’t be any overlap of interests.
“There is plenty of business in Bangalore, which is a mature market, and there are business opportunities for all. But the client here is much more choosy than anywhere else, so developers have to cater to that,” said Farook Mahmood, president of the Bangalore Realtors Association and chairman of Silverline Group.
Sushil Mantri said his elder brother had been planning projects for a while now and only when they take shape would he comment on any likely clash of interests.

Source : http://www.livemint.com/2009/03/18222459/Sunil-Mantri-plans-to-raise-Rs.html

Posted in Bangalore, Builders/ Developers, New projects | Tagged: Bangalore, Sunil Mantri Realty | Leave a Comment »

Lodha Group Launches ‘Casa Bella’ – First Phase of the Largest Project in Dombivali

Posted by paragjani on March 20, 2009

CASA BELLA, the largest and most ambitious integrated township project in Dombivali, by Lodha Group, India’s premier luxury real estate developers was launched today. Catering to the aspirational needs of the Indian middle class, the township will be spread over 125 acres of land and CASA Bella will be built over approximately 40 acres of land as an integrated residential township with 3500 residences under the first phase of development. The residential development will comprise of 11 clusters. CASA BELLA is planned with over 86% of open space. The residences will be available in 1, 2 and 3 BHK luxury. The apartments will be priced at 11.7 lac onwards for a 1 BHK, 14.9 lac onwards for a 2 BHK and 24.3 lac onwards for 3 BHK.

CASA, a sub brand of Lodha group has already made a mark for itself by selling over 1000 units under its multiple offerings, CASA Univis, Royale and Ultima within a couple of months. The focus of CASA brands is to provide optimal & best value by providing luxury living for middle income segment which has been unheard of. Gated communities, open spaces, parks, club, gym are just some of the initiatives to mention that have been provided through the brand CASA.

Commenting on the launch of CASA Bella, Mr. Abhisheck Lodha, Director – Lodha Group, said, “CASA Bella will bring combination of the quality, luxury and value to Dombivali. It will change the skyline of Dombivli and redefine the standards of living of its residents. It will be a mini city with all conveniences and utilities one can imagine all available within an integrated residential township. Project in Dombivali is the largest initiative by the Lodha group and will see planned development of 9000 acres. The township will be a complete self sustaining eco-system with a residential & commercial hub and world class amenities & infrastructure.”

‘CASA Bella – the city of dreams’ is the largest ever development project taken up in Dombivali and several major initiatives taken around the project will make Dombivali the destination to be in. Located in Dombivali, on the 4-lane Kalyan Shil Road, CASA Bella is only 25 minutes drive from Thane and 15 minutes from Navi Mumbai, 6kms from Dombivli station and around 20 minutes drive from the proposed location of the new international airport. The Usarghar station is located within the site which provides regular train service on the Central Line through connectivity to Diva Station on the Diva-Panvel line. In the future, it is proposed that the station will have direct connectivity upto VT.

Mr. R. Karthik, Senior Vice President-Marketing, Lodha Group said, “CASA Bella employs the expertise of the world’s best architects, designers and engineers to create lavishly proportioned homes of unparalleled comfort and lifestyle for all its residents within its universe. With state-of-the art medical facility, power supply for 24 hours, security systems with cutting edge technology, transportation facilities, Mumbai’s largest clubhouse spread over 50,000 sq. ft, retail mall with multiplex and school, the project in Dombivali will stand unrivaled in value it delivers and create an entirely new category of luxury homes within easy reach of the aspiring India.”

According to Mr. Kapadia, Director, Kapadia Associates, “CASA BELLA is a self contained, Integrated and a Lifestyle oriented township where people will feel proud to live in. It aims to be the most sought after property in the vicinity with excellent connectivity, concentration on social infrastructure, max utilization of space in a unique manner and contemporary architectural language to establish an identity for the project. The master plan has laid emphasis on open spaces, green clusters, recreational facilities and pedestrian friendly development with major amenities being located within a 7-10 min walking distance from the residential units.

The vision of Lodha group is to create an iconic urban development in Dombivali which will provide its residents all the comforts at their fingertips. From playschool to international universities, medical centres to multi specialty hospitals, gardens to golf courses, small business offices to SEZ’s this development will have it all.

About CASA
CASA – meaning ‘Home’ in Spanish earmarks a residential revolution in the mid-income segment benchmarking facilities that spell luxury available at benchmark pricing. As the leader in innovation in real estate, Lodha recently launched its sub brand ‘CASA’ to cater to the needs of the mobile, aspirational middle-class to have the best in life for themselves and their families, while ensuring security, comfort and value for money. With this brand, Lodha Group makes foray into creating the best quality and value realty in the mid- income segment by providing comprehensive housing solutions with high intrinsic value.

The first project through the sub-brand CASA is Univis at Ghodbunder Road. After the overwhelming success of CASA Univis, the Lodha Group launched a series of successful mid income luxury projects; CASA Royale, CASA Ultima at Thane and CASA Essenza at Dahisar.

About Lodha Group
Established in 1980, Lodha Group is a premier real estate developer headquartered in Mumbai. The Group is currently developing in excess of 27 million sq. ft. of prime real estate over 30 projects in and around Mumbai, from Nepean Sea Road to Dombivli, making it the largest developer in Mumbai and one of the largest in the country. The group is now expanding into Western and Southern India and recently kicked off their geographic expansion by launching Lodha Bellezza, an unparalleled super luxury residential project in Hyderabad and is soon expected to launch its first project in Pune.

In 2007, the Lodha Group received the largest ever FDI in the real estate sector in India. In addition, it works with leading financial Institutions, designers and product manufacturers to bring together the most premium offerings for its customers. The Group focuses on development of residences and office spaces in various formats including standalone projects, IT campuses, weekend retreats, townships and SEZs. From luxury garden residences in South Mumbai to large integrated townships in the suburbs, the group caters to diverse consumer needs across all segments. The Group currently employs over 1300 professionals. With a vision to build better lives, Lodha exceeds the expectations of customers through innovative, world-class solutions, thereby creating value and at the most opportune moment.

Source : http://www.newswiretoday.com/news/48108/

Posted in Builders/ Developers, Mumbai, New projects | Tagged: Dombivali, Lodha Group, Mumbai | 1 Comment »

Private builders will get to redevelop cessed buildings in Mumbai

Posted by paragjani on March 20, 2009

MUMBAI: The Maharashtra government recently cleared a guideline that will open up a huge business opportunity for redevelopment in South and Central

Mumbai, considered to be among the few of the most expensive real estate markets in Asia.

In a notification that clears the modified Development Control Regulations (DCR) 33(7) and 33(9), the government has paved the way for redevelopment of about 16,000 cessed buildings in south and central Mumbai and also allowed private developers to redevelop properties with a size of 43,000 sq ft in joint ventures with Mhada, or tenants/owners.

Earlier, this clause under the DCR was allowed only to Mhada and the BMC. This implies that developers, including Orbit Corporation, Housing Development and Infrastructure, Akruti City, Lok Housing and Unity Infra Projects, can now join hands with the state’s housing authority, or their tenants and owners, to develop the properties.

The prospects for such developers are also better as in a redevelopment project, the investment is comparatively low and the saleable area is about 50% of the project. In particular, Orbit Corporation, HDIL and Akruti have developed their business models focusing on redevelopment projects.

Cessed buildings are typically old constructions wherein the tenants pay a predetermined amount to the BMC.
The notification also stipulates an increase in the applicable floor space index (FSI) to four (from 2.5), thereby giving developers more space develop.

Said Cess Properties Developers Association president Kishore Aversekar: “The modified DCR is aimed at providing an incentive for accelerated development through the cluster approach in the urban renewal scheme and encourages development of projects through joint ventures with the Maharashtra Housing and Area Development Authority, tenants and landlords and private developers.”

The modified DCR has also increased the threshold of the minimum area to be allotted to the tenants/occupants of the cessed building to 300 sq ft carpet from 225 sq ft. “It’s a huge opportunity for us,” Ram Yadav, finance director of Orbit Corporation, said.

“The change in DCR 33(9) would allow us to develop at least 20 to 25 new housing societies. We are already in talks with various housing societies and tenants at the moment.” Other redevelopment-focused developers, such as Shapoorji Pallonji, the Rohan group, Lodha and RNA, have initiated steps to tap the opportunity as well.

The initial investment in the average redevelopment project is about 30-35% of the total development cost that needs to be paid to owners and tenants. Other costs for a middle-class redevelopment project include transit rentals and construction costs.

The government has also applied the eligibility criteria on the lines of the Maharashtra Slum Area (Improvement and Clearance of Redevelopment) Act, 1971 for developers and has made it compulsory for private developers to obtain the consent of at least 70% of the occupants.

Source : http://economictimes.indiatimes.com/News/Economy/Infrastructure/Private-builders-will-get-to-redevelop-cessed-buildings-in-Mumbai/articleshow/4284632.cms

Posted in Builders/ Developers, Mumbai, New projects | Tagged: Akruti City, Cessed Buildings, HDIL, Lok Housing, Mumbai, Orbit Corporation, Unity Infra Projects | Leave a Comment »

Now, DLF homes for the ‘aam aadmi’

Posted by paragjani on March 20, 2009

An economic recession sometimes has its advantages like pushing luxury realty developers to make houses for the middle class.

Well, DLF, India’s largest real estate company is looking to set up a residential complex in West Delhi with a very aggressive pricing.

The complex will be set up in the Swatantra Bharat Mills compound, a property that DLF bought from DCM Shriram in 2007 for Rs 1,675 crore. The developer plans to attach a competitive price tag of Rs 7,000 per square feet—a price that may spur a price war in the capital as a minimum area for a two-bedroom hall kitchen is about 1,200 square feet.

Anuj Puri, MD of Jones Lang LaSalle Meghraj, said, “The country’s largest developer launching a project in this kind of a market will definitely help revive sentiments. The fact that the project is being launched at quite an affordable price will attract lot of consumer interest.”

This is expected to be compared with Emaar MGF’s Commonwealth Games Village project, which has priced flats at nearly double than that of DLF’s at Rs 12,750 a square feet.

However, real estate experts say that an aggressive pricing by a leading developer might force other realtors to reduce rates.

It looks like finally DLF is targeting middle class people, who always save and hardly spend. But survival in a depressed market, where access to funds is getting increasingly difficult, is also another reason for big developers to lower prices and construct affordable houses.

Source : http://profit.ndtv.com/2009/03/18223523/Now-DLF-homes-for-the-aam-aa.html

Posted in Builders/ Developers, Delhi, New projects | Tagged: affordable housing, Delhi, DLF Ltd, Emaar MGF, Jones Lang LaSalle Meghraj | 1 Comment »

Developers may get to buy back built-up space in STPI

Posted by paragjani on March 20, 2009

NEW DELHI: The department of industrial policy and promotion (Dipp) is examining a proposal to allow real estate developers to buyback built-up area Home loan rates may drop shortly
sold in software technology parks of India (STPI) units and lease out the same to other businesses. As the STPI benefits are expiring in 2010, the government has observed that builders are not expanding in such units rather than carrying out the same business at other special economic zones (SEZs), a senior official in the Dipp told ET.

The issue came up in the last meeting of foreign exchange promotion board (FIPB), when the board took up real estate company Information Technology Park’s request for a clarification whether it could buyback builtup space constructed by ITP itself and lease out the same to other businesses.The company has set up an information technology park under the industrial park policy. The park has a total built-up area of two lakh square metres, out of which, 57,000 sq m space has been sold to various customers in STPI units.

The STPI policy entails exemption from income-tax for IT companies for a period of 10 years for setting up IT units. The tax benefits are expiring in 2010. There are around 6,000 IT units across the country registered under the STPI scheme.

The company has informed the board that as the STPI benefits would expire in a year, most of these units are not expanding and consolidating in SEZs. hence, these units have offered to the company to buyback the built up space sold by the company to them. The company has now sought clearance from the board whether it could buy back the built-up space and lease out to other business units.
The Dipp has now been directed by the FIPB to examine ITP’s proposal in detail, the Dipp official said. The government’s decision on this issue is being watched the industry in general, as many real estate developers have sold spaces in IT parks under the STPI scheme and the scheme ends in 2010.

STPI scheme is a 100% export oriented unit scheme for the development and export of software using data communication links or by physical media or by on-site Consultancy. STPI supports new companies by providing incubation infrastructure with all facilities such as Internet, telephone, fax and power back-up.

The Dipp has now been directed by the FIPB to examine ITP’s proposal in detail, the Dipp official said. The government’s decision on this issue is being watched the industry in general, as many real estate developers have sold spaces in IT parks under the STPI scheme and the scheme ends in 2010.

Source : http://economictimes.indiatimes.com/News-by-Industry/Developers-to-buy-back-space-in-STPI/articleshow/4284618.cms

Posted in Builders/ Developers, General postings, SEZ | Tagged: SEZ | Leave a Comment »

For developers, customer is king once again

Posted by paragjani on March 20, 2009

The persistent fall in property prices across the country, aided by RBI measures to slash key rates and spur demand, seems to be reviving interest among home buyers.

“Site visits have gone up almost 10 per cent in past 2-3 months. This can be attributed to the price cuts and to RBI announcements, which have made home loans cheaper,” says Harsh Nair, real estate consultant based in Chennai.

Customers have become far more discerning following the global economic meltdown and do not betray the recklessness that characterised the period of realty boom.

During the real estate boom, buyers, flush with funds, were willing to pay any amount. Developers were offering housing opportunity using themes, promos and freebies. Now, the emphasis is on “value for money” projects.
“We are emphasising on our USP, which we believe is quality control. We are showing prospective customers how we do not compromise on quality in terms of all the aspects of our units, whether its fittings or architectural design or raw material,” says Keshav Pandey, executive director, Sobha Developers.
Developers had gone out to woo young professionals, and double-income couples who earned handsome salaries. However, with the recession in the US and Europe, order books have thinned. As such salary increments in the IT sector have been rather poor and software companies are even resorting to layoffs to cut costs and stay afloat.
“Now, there is no specific age bracket for the prospective buyer. Buyers are looking for good home loan rates and a good home that they can buy within their allotted loan limit,” a senior banking official
told FC Estate on conditions of anonymity.

Given the price corrections in the realty market, NRI buyers are looking at taking advantage of the situation by buying multiple housing units in India. The sharp decline of rupee against the dollar has also made the sector that much more attractive.
Industry watchers advise that prospective buyers should have a multi-point checklist before they purchase a property.

According to Shreyans Chopra, CEO, Suksh Technologies, the parent company of realty portal www.100floors.com,“If you want to buy a house, location should be a key consideration. Identify pockets that have a potential to appreciate quickly, and a profitable situation will be to even out your rentals with EMIs. As a thumb rule, if rentals account for 10-12 per cent annually on actual value of home, it is better to consider buying one.

Even if property rates do not appreciate, it is a profitable deal; you have an asset to bank on even as you pay EMIs that equal the money you pay as rent. Considering a long investment horizon (10 years), this is always a good option.”

Good localities have planned infrastructure development around them such as metros, shopping malls, offices and airport.
A home on or near the main connecting roads rather than in the interiors will bring in more returns in the long run. A well-decorated, well-furnished house, but in the interiors, would fetch lower valuations when you want to resell the property.

http://www.mydigitalfc.com/real-estate/for-developers-customer-king-once-again-577

Posted in Builders/ Developers, Chennai, NRI Center, New projects | Tagged: Chennai, NRI, Real estate in india, Sobha Developers | 1 Comment »

Greater Noida records 8th highest rental growth in the world: Report

Posted by paragjani on March 20, 2009

Greater Noida in the National Capital Region (NCR) saw the 8th highest annual growth in rental values in the world in December 2008, according to real estate consultant, Cushman & Wakefield’s report Industrial Spaces Across The world 2009. NCR’s Greater Noida area, which has been developed to attract medium to large scale industries, recorded an annual growth of 25 per cent in industrial rental values in 2008. The location is particularly promoted for campus development and has in recent past not received much supply.

Peenya Industrial area and Bommasandra Industrial Areas in Bangalore recorded the 12th and the 16th highest annual growth in rental values respectively, the report added. Peenya Industrial Area (19 per cent) and Bommasandra Industrial Area (11per cent) around Bangalore also recorded healthy growth in rental values in 2008. These established industrial locations around the IT city of Bangalore witnessed demand from small and medium scale industries.

Mumbai’s Thane – Turbhe Creek, which had recorded the highest growth last year and had finished on the 26th position as the most expensive industrial locations , slipped eleven places to settle on the 37th spot, said the report.

Meanwhile, London’s Heathrow retained its top position in the report as the most expensive industrial location for the eighteth year. Tokyo and Dublin switch places to settle at 2nd and third positions respectively.

According to the report, industrial areas in India saw the highest growth in rental values amongst the locations in Asia Pacific. Greater Noida , Peenya Industrial Area, Bommasundra Industrial Estate and Jigani Industrial took the top 4 positions in the Asia Pacific region.

Harleen Oberoi, executive director, industrial services, Cushman & Wakefield, said “Traditionally expensive industrial locations like Mumbai (Thane Turbhe Creek), Pune (Talegaon, Chakan, Ranjangaon), Chennai (Sriperumbudur), have seen a slowdown due to high price points and large scale development in recent years.”

‘‘Slowdown in the economy has affected the general uptake of industrial spaces especially by large multi-national corporations who were in the past few years keenly looking at India. However, the demand from indigineous industrial sector, including medium to small operations, has not decreased that rapidly and therefore new locations and locations providing smaller industrial sheds continued to grow in 2008,“ he further added.

— IndiaRetailing Bureau

Source : http://www.indiaretailing.com/news.aspx?Id=3500

Posted in Bangalore, General postings, Serviced apartments/offices | Tagged: Cushman & Wakefield, Greater Noida | Leave a Comment »

Commercial real estate rates crash in Bangalore

Posted by paragjani on March 20, 2009

It was one of the most promising markets in south and among the top three in the country for commercial real estate. But hit by slowdown and gross overvaluation, commercial real estate in Bangalore dwindled considerably.
“The main reason why commercial real estate in the country’s IT capital boomed was because of influx of IT and ITeS companies, both domestic and MNCs,” says Harmeet Singh, a Bangalore-based real estate consultant.

According to Jones Lang La Salle Meghraj, capital values in the central business district (CBD) area ranges between Rs 10,000 and Rs 14,000 per sq ft; in the suburban business district (SBD) it is between Rs 4,500 and Rs 7,000 per sq feet and in peripheral business district (PBD) Rs 2,500 and Rs 4,000 per sq ft. Rents in these areas range between Rs 75 and Rs 90 per sq ft per month for the CBD, Rs 45 and Rs 60 per sq ft per month for SBD and Rs 24 and Rs 35 per sq ft per month for PBD.

Commerical rates, which had been rising in value by as much 37 per cent has come down to 18 per cent. Brokers and consultants in Bangalore city say that though they may not admit it, office space has been lying vacant in some areas for more than 5 to 6 months. They say that as part of their cost cutting exercises, major IT and ITeS offices slowed down their expansion plans. Smaller players shifted to less expensive areas and a handful had to even shut shop.
“There are shell offices in all the prime business areas in the city, which have not only witnessed a drop in rentals, but also have had people moving out. Vacancy rates are hovering around 3 to 10 per cent, though real estate developers in the city would be the last ones to admit this,” says M Raj, a broker in the city.

Consultants say that cost-cutting will be a major factor in price correction in these areas. “Officers who have taken up space in CBD in the last two years at higher rentals will consider renegotiation of rentals or move to cheaper destinations in SBD areas, depending on their business profiles,” says Karun Varma, managing director at JLLM, Bangalore.
Prime office or commercial real estate in Bangalore is concentrated around CBD, SBD and PBD areas of MG Road, Whitefield, Electronic City, Bannerghatta Road, Outer Ring Road and other areas of southern Bangalore.

Congested infrastructure in main Bangalore city had even caused the boom to spill over to the neighbouring districts of Mangalore and Mysore, pushing up land and rental rates in these areas.

Around 2 million sq ft of grade A office space was added during the boom period even two years ago. Overvaluation pushed rates in these areas of Bangalore. Though the rates have seen correction, experts say that there is still disparity between demand and supply and the rates charged.

http://www.mydigitalfc.com/real-estate/commercial-real-estate-rates-crash-blore-579

Posted in Bangalore, Builders/ Developers, Retail/ malls, Serviced apartments/offices | Tagged: Bangalore, Commercial Real Estate rates | Leave a Comment »

Good time to take loan against property

Posted by paragjani on March 18, 2009

NEW DELHI (Reuters) – You need a loan and you need it quick. In these uncertain times, getting a loan is not an easy task.

The Indian economy is slowing down. GDP growth in the December quarter has dived to a six-year low. Certainly not the best time to be desperately seeking a loan.

But it helps if you own property and can take a loan against it.

While the government is keen to increase spending by lowering interest rates, loans taken against property are cheaper and more feasible than personal loans.

As the name suggests, you can take a loan if you own property and would like to leverage it without selling or giving it out on rent.

“It is an ideal product for debt consolidation, it’s a bigger higher tenure loan and it’s available for multiple uses and it can help finance most of your personal requirement” says S. Krishnan, General manager and Head of Mortgages at Standard Chartered Bank.

Since personal loans or loans on credit cards are more expensive, it makes more sense to go in for a loan against property.

Interest rates for these kinds of loans vary between 13 and 14.5 percent, depending on the scheme you prefer.

With the severe squeeze drying up most sources of credit, firms are scanning the market for options.

“With meltdown of property prices and high volatility, loan against property is a risky proposition for lenders, however borrowers may exercise this option provided interest rates are not exorbitant and tenure is not too long,” says Anil Kumar Chopra, Group CEO of Bajaj Capital Ltd.

ADVANTAGES

– Loan against property can be availed against both residential as well as commercial property but some banks prefer the former.

– The loan amount varies from lender to lender depending on the value of property.

– One can borrow up to 70 percent of the market value of the property, depending upon loan tenure, its value and the borrower’s age.

– Loan tenure can be up to 15 years. Equated monthly installments could well be within your reach as the rate of interest on loan against property is lower than in personal loans.

– Expense incurred on education has risen over the years and a loan taken against property could help secure your child’s future.

– The loan is usually taken on a daily or a monthly reducing balance method.

– Also, part or full prepayment is allowed by most lending institutions. Many do no levy extra charges on prepayment.

– Some banks also provide overdraft facility. But do double check processing charges and penalties.

DOCUMENTS REQUIRED

Documents required vary from bank to bank but here are the basics –

– Identity Proof

– Proof of residence address (passport, electricity bill, voter ID card, etc.) and proof of age (birth certificate, passport, driving license, etc.)

– Salaried individuals must submit their latest acknowledged IT returns or bank statements for the last three months.

– Self-employed individuals can submit computation of income for the last two years certified by a charted accountant.

– Photocopies of the property documents should be handed over before the loan is sanctioned.

– The customer also needs to give a declaration stating the loan amount would not be used for any illegal or speculative activities.

– A valuation report of the flat from the professional valuer appointed by the bank and the property should be free from any dispute.

– One needs to be at least 21 to avail of the loan. The maximum age limit is 65 but again this could vary from bank to bank.

(Kshitij Anand is a Reuters journalist. The views and opinions expressed are the writer’s own and not those of Reuters. The article above is not intended to be a financial advisory. Readers must seek specific advice from experts before making investment decisions)

Source : http://in.reuters.com/article/personalFinance/idINIndia-38546120090317?pageNumber=2&virtualBrandChannel=0

Posted in Home loans | Tagged: Loan against property | Leave a Comment »

See realty turnaround by 2010 end: Cushman & Wakefield

Posted by paragjani on March 18, 2009

The real estate sector continues to remain under duress. While there may be sporadic signs of a turnaround with on-ground residential sales being reported, is the beleaguered sector out of the woods yet?

Responding to the query, Executive Director of Cushman & Wakefield, Kaustuv Roy, a real estate consultancy, said that even as real estate booms and busts were cyclical in nature, “we expect this downward trend to continue till then end of this year or so. Then, as prices stabilise by the year end or 2010 start, things would have recovered by end of 2010,” he said. He, however, added, “A lot depends on how the economic changes are and that is when it will kick-start corporates to actually start taking up space, giving job confidence to employees and subsequently employees getting back into purchasing, having the ability and the confidence to go in and make an investment with loans.”

Research Analyst – Infra & Realty, Angel Broking, Sailesh Kanani, said the house view on the sector was still negative because of liquidity concerns. “There has been a dramatic change in the business dynamics by itself because of risk aversion by end users. Now, developers have to fund their own projects through their internal accrual. That we think is going to impact growth, which would see only large companies going for expansion and sustaining and coming out of this,” he said. “So, there is going to be a cut on the expansion spree, growth would be curtailed and therefore the view on the sector as such is negative at least for the next four to six quarters.”

Here is a verbatim transcript of Kastuv Roy and Sailesh Kanani’s exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: What are the telltale signs you are getting from the various cities? Are you seeing any improvement in the housing sector and are you seeing any fall in the fortunes in the commercial sector or is the bottom still to reach?

Roy: In the residential segment, developers who have launched affordable housing projects in the last one month have been able to get some amount of success while developers who have reduced pricing are still to find end-users willing to bite. I guess the expectation is that the prices will fall a bit further and that’s the point of time when they’ll pick up the projects.

On the commercial side, demand is pretty much down quite a bit and it has been sliding since quarter four last year. We expect it to be subdued. We might see some movements in the bigger cities of Mumbai, Delhi and Bangalore but the smaller cities are definitely going to through a bit of a downturn over there.

Q: You must have certainly gone through the trajectory of the previous fall as well in real estate prices especially in Mumbai. Starting perhaps from 1996 and thereabouts and we didn’t see them recover up until 2003-04 and if I remember right what peaked off in 1995 actually bottomed out as late as 2001-02. I may be wrong maybe a year or two, you should correct me on the detail, but how long do you think this downturn can go and how much further in terms of percentage prices first for the housing and then for the commercial?

Roy: What we saw is actually if we see the run from 1991 onwards — 1991 to 1995 — was a bull run over there and we saw prices go up by at least 300 per cent–400 per cent and then it fell down from 1996 to I would say till 1998 or 1999 when it was a continuous fall and after that it kind of steadied out and then picked up in 2001-02 or so.

Over here, what we found is that in terms of the cyclical nature: yes, it is cyclical but the tenure is getting shorter. Over the last two years, where we saw the bull run from 2006 to 2007 and part of 2008, we expect this downward trend to continue till then end of this year or so. So we are expecting maybe one year downward trend and then possibly as prices stabilize by the year end or 2010 start, things would have recovered by end of 2010.

Q: When we were talking about 2000, most of the investors were individual investors buying into 30-40 per cent returns. This is a very different ballgame. You’ve got these FIIs who’ve invested significant amounts into projects, the FIIs and institutional investors themselves have wrapped up. How do you look at this situation and I am not talking so much about demand because affordable housing can only do so much? I am talking about liquidity. These are massive projects that are just pretty much in the middle. What happens here because there is a lot of un-built inventory or not completed inventory? How much is it, and how much pressure can it bring in the next two-three years?

Roy: You’ve hit the nail on the head because there is a huge quantum of: one, completed inventory, which is not picked up and second, what is in the pipeline — in the office sector or residential or in retail sector.

A lot depends on how the economic changes are and that is when it will kick-start corporates to actually start taking up space, giving job confidence to employees and subsequently employees getting back into purchasing, having the ability and the confidence to go in and make an investment with loans.

Q: My question relates to the kind of return to the old prices, which is for some of the big guys like HDIL in Mumbai, Sobha Developers down in Bangalore, Unitech, DLF, perhaps Puravankara. What is the outlook for these guys because there are massive landbanks, even more massive unfinished projects? Where is the money going to come from, when are these going to get over and what is the impact on the stock price?

Kanani: Our view on the sector as such is negative because the reason, as you said, is on the liquidity front. What we are witnessing is that there has been a dramatic change in the business dynamics by itself because of risk aversion by end users. Now developers have to fund their own projects through their internal accrual. That we think is going to impact growth, which would see only large companies going for expansion and sustaining and coming out of this.

So, there is going to be a cut on the expansion spree, growth would be curtailed and therefore the view on the sector as such is negative at least for the next four to six quarters.

Q: Is there any relative outperformer or underperformer in this entire list? What is Angel’s view on the bunch of listed real estate stocks?

Kanani: As a house, we are quite negative on the real estate sector because of the reasons mentioned. Apart from that, what factors we are looking out for is that the interest rates, which were in the 7-8 per cent range in 2002 which brought the boom in the real estate sector. They are still high and in the 8-9 per cent range right now.

Apart from that, affordability is still high because if you take an average housing loan, the ticket size is around Rs 15 lakh for the largest home financier, HDFC. Prices for 2 bedroom-hall-kitchen (BHK) flats are in the Rs 45-80 lakh range. So there is a disconnect there.

What we are seeing is that overall demand is going to be down. Further price reductions have to be done by developers but they are for projects that are under construction.

Q: I wanted some details from you. When you talk about real estate, the number of sectors and the size of the country makes the whole discussion very fuzzy. So let us stick to one area, say Lower Parel [in Mumbai]. We have seen a lot of retail of commercial development in this area. Give us a perspective of where rents were say at their peak, where rents are now, where do you see them going and when is the recovery in some numerical terms?

Roy: If one were to take last one year — from 2008 onwards — we saw rents actually go up to around Rs 350-400 per square foot per month. What we are of course finding today is that the rents in the same places or the same developments have come down to say between Rs 250-280 per square foot per month and some of the projects, which are under construction, we are seeing rentals in the range of Rs 150-200 per square foot per month, which is the typical range. I think there will be further softening in the next six months or so.

Q: From an institutional perspective, private-equity, real estate funds, most of these gung-ho guys have walked off. The only ones interested are in affordable projects. The yields they were getting used to be 25-40 per cent. That is what they promised their investors. What is the real estate yield now, especially if you were looking at ‘REITable’ kind of a project where you are going to lease it out and going to get X amount? What is the vacancy rate and perhaps if you could shed some light on two cities’ – Mumbai and Bangalore — commercial retail?

Roy: In terms of yields, they should be around 15-16 per cent or so though the expectation is much higher but at the same time, given developers are looking at 12-13 per cent, it will land up somewhere around 15-16 per cent. Now if you were to look at vacancy rates in Mumbai in the commercial sector, they have actually crossed around 10-12 per cent or so. Even with smaller segments like Nariman Point, vacancy rates have gone up to 16-17 per cent.

Source : http://ibnlive.in.com/news/see-realty-turnaround-by-2010-end-cushman–wakefield/87882-7-p2.html

Posted in General postings | Tagged: Cushman & Wakefield, Real estate in india | Leave a Comment »

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