Making Property Investment Simpler for Non-Residents

As property markets fall world-wide, one of the few consolations for real-estate investors is that some governments have become more open to nonresident property owners. A growing number of them are considering loosening or temporarily suspending foreign property-ownership restrictions in a bid to stimulate their real-estate markets. In January, for example, Beijing issued a one-year suspension of a one-year residency requirement for foreign nationals buying a house. The Cayman Islands and Australia have also recently loosened their rules. Meanwhile, the issue is being discussed in numerous other countries, including the Philippines. Loosening foreign-investment restrictions isn’t new. Governments have been attempting to stimulate foreign investment for years in response to swelling interest from international investors. In 2005, India began letting foreigners invest directly in Indian residential and commercial real-estate development. And in late 2006, the government lifted a required 10-year lock-in period on repatriating property sale proceeds, although it’s limited to $1 million a year.

Slumping property sales has given the issue renewed urgency, as countries strive to find ways to stimulate local economies. Last month, the historically foreign-investment-friendly government of the Cayman Islands temporarily lowered rates on their real-estate transfer “stamp duty” taxes, including a reduction to 5% from 7.5% on waterfront property. At the same time, the country’s real-estate brokers group, Cayman Islands Real Estate Brokers Association, announced a 20% rebate on commissions. The discounts last through Sept. 30. Restrictions on foreign ownership exist mainly in emerging property markets. Most Western European countries, including the U.K., France and Italy, don’t restrict foreign nationals from owning real estate. (Notable exceptions are Switzerland and Austria, which have established some foreign-buyer quotas to keep prices down in some ski towns.) The U.S. doesn’t restrict foreigners from buying property.

Ways to restrict foreign investment aside from outright bans include high transfer taxes and limits on when and how much money investors can repatriate. Rules can differ depending whether the purchase is a residence or an investment. To be sure, not all countries are choosing to loosen regulations. Some may crack down on foreign investment, blaming it for driving prices to unsustainable levels, says Danny Bance, managing partner of U.K.-based International Property Investment Network, a research and investment services provider for investors. But many governments believe that foreign investment spurs infrastructure development, which spurs economic opportunity, says Mr. Johnson, 59 years old, of Detroit, who got his start developing luxury property in Michigan, including a large Lake Michigan resort. He says he helped convince the British Virgin Islands government to loosen curbs on foreign investment partly through his willingness to hire local residents for senior management positions.

Source : http://www.indianrealtynews.com/nri/making-property-investment-simpler-for-non-residents.html

Nano Pushes Housing Sales in Kolkata

Nano has turned out to be a freebie option for real estate developers lookingto perk up housing demand. One Kolkata-based real estate company has decided to give the car “free” with a flat for its first 50 buyers. RDB Developers has booked around 50 Nano cars with Tata Motors for giving it free with flats in one of its residential projects in Sonarpur, South 24-Parganas. The realty firm has sold 24 apartments in the last two days, said Ravi Pincha, director, RDB Industries. “We have seen an overwhelming response for the the apartments, and have received more than 130 enquiries in the last two days,” he said. The company might place orders for more Nanos, said Pincha.

Spread over 50 acres, the first phase of the RDB project at Sonarpur will be over by December this year. With a project cost of around Rs 50 crore, the company is selling flats at about Rs 1,755 per square feet, with a 918 square feet flat costing about Rs 17 lakh. The highest price of the apartment is close to Rs 26 lakh, spread over 1,430 square feet. The price is higher than the prevailing prices in Sonarpur, which are varying between Rs 800-1,000 per square feet at present. RDB has put about 176 apartments in six blocks for sale in the first phase. In the months of October-November last year, several property developers had started advertising freebies to attract customers. However, with the sale of residential projects gradually picking up, not many developers are offering add-ons to attract customers.

Eden Realty, which is developing one of the largest housing project in south Kolkata, tried to woo customers by offering free car parking space with flats few months back. However, the response to the offer was lukewarm, and the realty company was no longer in a position to offer the scheme, admitted Sachchidanand Rai, managing director, Eden Realty. “We expected selling about 100 flats through the scheme, but could sell about only 32. Now things have started improving and customers’ interest has gone up significantly, which is also translating into sales,” said Rai. Property prices in Kolkata and its fringes has seen a correction of almost 25 per cent in the last six months.

Source : http://www.indianrealtynews.com/real-estate-india/kolkata/nano-pushes-housing-sales-in-kolkata.html

Tulip Infratech to invest Rs 100 cr in Gurgaon housing project

Real estate firm Tulip Infratech will invest Rs 100 crore over the next three years to develop 400 apartments in Gurgaon.

“Seeing the demand for affordable housing project, we are coming up with 400 flats in first phase at Gurgaon-Sohna road. The basic selling price of the three-bedroom apartment has been fixed at Rs 25 lakh,” Tulip Infratech Chairman and Managing Director Praveen Jain said.

When asked about the project cost, Jain said the investment will be about Rs 100 crore, including land.

The company has land and the construction cost would be funded through customers advances and debt, he added.

Jain said the project ‘Tulip orange’ has been launched and the construction work is expected to start by August. The project will be completed within three years.

At present, Tulip Infratech is developing three housing projects, comprising 1,200 apartments, at a total investment of Rs 500 crore. The two projects are located in Gurgaon and Sonepat.

The company would start delivering the flats in Sonepat, where it has sold 50 per cent of 640 flats, by the end of this year, Jain said.

About Gurgaon projects, he said the mid-income housing project would get completed by the end of next year, but there would be some delay in the premium residential project as only 20 per cent out of 252 apartments has been sold so far due to significant fall in demand for high-end products.

Source : http://www.business-standard.com/india/news/tulip-infratech-to-invest-rs-100-cr-in-gurgaon-housing-project/59754/on

Unitech Likely to Pull Out its Rs 211 crore Project From Orissa

Real estate major Unitech is likely to pull out of its proposed Rs 211 crore residential cum commercial complex which was to be developed over an area of 11 acres in one of the prime locations of the city. Sources familiar with the development said, “Unitech had sought an extension of about two years from the Bhubaneswar Development Authority (BDA) for its proposed residential cum commercial complex in the city as its cash position was not comfortable. However, BDA turned down Unitech’s proposal as a result of which the real estate player was mulling to pull out of the project.”

It may be noted that DLF, India’s biggest real estate developer was also contemplating a pull-out of its proposed Rs 1,000 crore Infopark project. Asked on the status of Unitech’s project, a senior BDA official said, the BDA is yet to take any decision on Unitech’s proposal for extension and a decision is expected to be taken after the elections. “Unitech which had paid Rs 52.7 crore in March 2008 for the plot had sought a period of three months for paying the balance amount as a lump sum. However, the company had defaulted in paying the requisite amount as its cash position was not favourable”, added sources.

As such no deadline has been imposed on Unitech by BDA for paying the pending amount for the plot but if Unitech chose to pull out of the project, then the company would forfeit Rs 52.7 crore which it had paid initially. As per the terms of agreement between Unitech and BDA, the real estate player was to develop the 11-acre plot by the end of 2010. In April 2007, Unitech had emerged as the highest bidder for the 11-acre plot auctioned by the BDA. Unitech had agreed for a price of Rs 20 crore per acre and DLF which had offered a bidding price of Rs 11 per acre was the second highest bidder.

Source : http://www.indianrealtynews.com/real-estate-developers/unitech-likely-to-pull-out-its-rs-211-crore-project-from-orissa.html

Downfall of Bengaluru Real Estate

Real estate activity contributes significantly to the overall economic output in India, as it does in most economies across the globe. The sub prime crisis in the US, triggered by the high default rate of sub prime home loan borrowers, has snowballed into an economic crisis that has pulled most of the world into its grip. The co-relation and co-existence of a flourishing real estate sector with a healthy economy has never been more obvious than it is now. Here’s a reality check on the situation in Namma Bengaluru. The ascent of the real estate industry in Bengaluru started much before the city became the focus for all things IT. If you speak to local real estate czars who have traced Bengaluru’s real time growth history, they will vouch that there was a bullish sentiment about the city’s prospects from as early as 1993. After the Indian economy was liberalized, Bengaluru – like other metros in India – witnessed a hitherto unseen appreciation of real estate prices. Also, with Hong Kong being handed over to China, a large number of expat Indians headed home, especially towards Bangalore, thus causing a demand spurt. This, coupled with the then state government’s policies to encourage IT growth in the state and city, brought Bengaluru under the real estate spotlight.

Seasoned businessman Prakash Gurbaxani, MD and CEO of QVC Realty, India’s first venture capital funded realty company, says, “During 1994-96 the Karnataka government gave a major boost to the IT industry with its policies and announced development of ITPL and the Whitefield area for the purpose.” Though the IT industry was in its infancy, Bengaluru held out a certain economic promise. There was huge investor interest and the optimism led to the city seeing property prices increase at an incredible rate. Of course this unnatural growth, had to tone down. “The appreciation in property values was driven by speculation without too many serious transactions that resulted in projects. In 1997, when the markets crashed, the areas to suffer the most were the suburban regions in Bangalore which had seen speculative growth,” states Gurbaxani.

In the first half of this decade, India became a crucial and lucrative global economic destination and Bengaluru was at the centre of attention from the global business world. Analysts from multinational real estate services firm, Jones Lang LaSalle Meghraj (JLLM) say that “the investments pouring into Bangalore resulted in creating a solid demand for quality office space, thus re-defining the real estate market in Bangalore.” Bengaluru’s real estate demand has been, and continues to be, driven by IT / ITES and the banking and financial services sectors. Symbiotically, the economic changes in the nation shaped the real estate industry in Bengaluru, as it did in other key metros of the country. “The industry moved from being an unorganized business to getting organized and professional. For the most part of its history, real estate raised funds from unorganized sources. However, in the last five years, major players in the market have begun tapping organized sources like capital markets and private equity funds. Liberalization of foreign direct investment norms for real estate has made foreign funds available to developers,” says Gurbaxani.

People from the industry attest that the economic growth resulted in growth of high disposable income groups, which in turn fuelled the scaling up of residential projects in Bengaluru. Villas and premium category apartments became the fad. Attractive tax rebates on home loans and reasonable home loan rates took the real estate market to the next level. Infrastructure wise, Bengaluru grew in this period and the city became home to many campus styled IT parks, Special Economic Zones (SEZ’s) and Software Technology Parks of India(STPI’s) in the IT belt of Whitefield, Hosur and Electronic City. Outer Ring Roads (ORRs) in the city have since become a hotbed for IT campuses. Seasoned economists argue that it’s easy to spot the signs of a looming downfall after a boom. This unprecedented boom too had its signals, only nobody wanted to stop and take notice. Land prices climbed to ridiculous heights, everybody who were anybody began venturing into the real estate business greedily eyeing the high returns as prices assumed dizzying proportions. And then the inevitable happened.

The fall in the US financial sector had a domino effect on global economies including Indian economy. Realty companies that had raised funds through the capital markets and private equity funds suddenly started finding themselves in a soup. Funding options began to dry up. Asset values fell. Stock markets took on a bear run. Stock valuations of realty companies plunged and inflation reached alarming proportions. The RBI raised key rates to curtail money inflow in the system. Banks hiked consumer loan rates as also home loan rates. Corporates waking up to pressure on expenditure began to announce lay offs, salary cuts and many such cost cutting measures. Cautious consumers battling multiple whammies began to put off home buying decisions. Demand has since stagnated and fallen drastically.

Source : http://www.indianrealtynews.com/real-estate-india/bangalore/downfall-of-bengaluru-real-estate.html

Further Correction of 20-25% Expected in Property Prices

Property prices have been on a slow but steady decline over the past year-and- a-half. Experts predict that this trend will continue and one can expect a 20-25 per cent further drop in prices in the next year or so. While interest rate cuts by banks have been comparatively faster in being implemented, largely through the consistent efforts of the Reserve Bank of India [Get Quote], the builder community has been reluctant to follow suit with ready price cuts, even when the uncomfortable truth remains that there is no choice in the matter. Though the initial interest rate cuts and a discounted interest rate for the initial year introduced by some banks resulted in a lot of loan transfers, new loans did not pick up pace on the expected lines.

Another fact that contributed to this factor is the prevalent grim mood of the job market. People are wary of taking on new debt liabilities while struggling to meet their existing commitments. Builders who had been concentrating on high income groups and premium housing needs are now stuck with incomplete projects and lack of funds. The builders, sensing the buyer’s mood, slowly started to relent and made attempts at slashing property prices. Prices have definitely started to slide in favour of the buyer. However, there have been several instances where there have been compromises over the square feet area of the house.

For example, balconies have disappeared from floor plan, 1,000 sq. ft homes are being converted to 850 or 900 sq. ft. in a bid to make space for more apartments in a block, 544 square feet, single bedroom apartments which had practically disappeared are making a come back! So, there have been a lot of cutbacks from the offerings of several builders to enable slashing of prices and yet not make deep dents in their profit margins. On the other hand, builders have also entered into tie-ups with banks to offer discounts in the former of special lower interest rates, waiving off the processing fee, slashing the down payment rates, et cetera apart from other discounts of 10-25 per cent on the actual property from their side. Market reports are suggesting a slew of new launches announced have a price correction of nearly 30 per cent in and around Mumbai and Chennai.

Source : http://www.indianrealtynews.com/property-prices/further-correction-of-20-25-expected-in-property-prices.html

Some builders bring down ceiling height

BANGALORE: ‘Watch your head’. That could well be the caution sign you would have to sport at the entrance of your home in the future. In an effort  to cut construction costs, some in the real estate industry are said to be looking at reducing the height of apartments by 6 inches or even by a foot. This would still be within prescribed norms.

As per the National Building Code, the minimum floorto-floor height in a residential apartment should be at least 9 feet. Till now, developers across the country have been maintaining an average floorto-floor height of 9.5- 10 feet.
In metros like Bangalore and Chennai, which have traditionally had bungalows with high ceilings, the floor-to-floor height of apartments were even as high as 15 feet.

Now, many are looking to make use of the minimum height of 9 feet, thereby lowering the apartment height by 6 inches to a foot, say leading construction companies and architects. This trend, they say, will be prominent in new project launches as well as in the upcoming low-cost housing market.

“Developers are looking to trim their construction costs by way of reducing the floorto-floor height,” says B K Dhar, CEO of Mfar Constructions.

For every foot or half a foot less, builders would be saving a substantial amount on material costs. The reduction in costs depends upon a range of factors that include number of floors, number of apartment blocks and so on, and the saving could be anywhere between 2% and 5% on the cost of construction.

“So far we have had no builder ask for floor-to-floor height specifications less than 9 feet,” says Arunjot Singh Bhalla, associate director in RSP, one of the leading architectural firms in the city.

Industry sources add that a few tier II builders are said to be looking to reduce the floorto-floor height in apartments to as low as 8 feet 6 inches, even though the stipulated norm is 9 feet. It’s not just the height that is being tinkered with. “With the correct use of alternative materials and a few structural design changes the cost of construction of a building can come down by 20-25 %,” says Dhar.

The use of hollow concrete blocks instead of clay bricks, composite concrete frames instead of wooden frames for doors and windows or metal frames, reducing thickness panels, changes in external and internal paint specifications (distemper for internal surfaces, snowcem for external surfaces), and cement flooring/mosaic tiles in place of vitrified tiles are the other cost-effective construction methods that developers are adopting.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Some-builders-bring-down-ceiling-height/articleshow/4457613.cms

RDB Developers offers free Nano to push housing demand

Nano has turned out to be a freebie option for real estate developers lookingto perk up housing demand.

One Kolkata-based real estate company has decided to give the car “free” with a flat for its first 50 buyers.

RDB Developers has booked around 50 Nano cars with Tata Motors for giving it free with flats in one of its residential projects in Sonarpur, South 24-Parganas.

The realty firm has sold 24 apartments in the last two days, said Ravi Pincha, director, RDB Industries.

“We have seen an overwhelming response for the the apartments, and have received more than 130 enquiries in the last two days,” he said.

The company might place orders for more Nanos, said Pincha.

Spread over 50 acres, the first phase of the RDB project at Sonarpur will be over by December this year.

With a project cost of around Rs 50 crore, the company is selling flats at about Rs 1,755 per square feet, with a 918 square feet flat costing about Rs 17 lakh. The highest price of the apartment is close to Rs 26 lakh, spread over 1,430 square feet.

The price is higher than the prevailing prices in Sonarpur, which are varying between Rs 800-1,000 per square feet at present.

RDB has put about 176 apartments in six blocks for sale in the first phase. In the months of October-November last year, several property developers had started advertising freebies to attract customers. However, with the sale of residential projects gradually picking up, not many developers are offering add-ons to attract customers.

Eden Realty, which is developing one of the largest housing project in south Kolkata, tried to woo customers by offering free car parking space with flats few months back. However, the response to the offer was lukewarm, and the realty company was no longer in a position to offer the scheme, admitted Sachchidanand Rai, managing director, Eden Realty. “We expected selling about 100 flats through the scheme, but could sell about only 32. Now things have started improving and customers’ interest has gone up significantly, which is also translating into sales,” said Rai. Property prices in Kolkata and its fringes has seen a correction of almost 25 per cent in the last six months.

Source : http://www.business-standard.com/india/news/rdb-developers-offers-free-nano-to-push-housing-demand/356451/

Tatas keep Rajarhat housing project on track

The Tatas had originally announced plans to execute the housing project near Kolkata virtually in tandem with its one-time ambitious plans for Singur.

When Ratan Tata announced the Nano pullout from Singur last October, he had promised that other greenfield Tata projects in West Bengal would not be hurt. He has not reneged on his promise. For starters, the much awaited Tata housing project in the upmarket tech zone Rajarhat is about to take off, ending all speculation of the project biting the dust in the aftermath of Singur.

The Tatas had originally announced plans to execute the housing project near Kolkata virtually in tandem with its one-time ambitious plans for Singur. Though Tata Motors was compelled to shift the Nano project to Sanand, Gujarat, after Mamata Banerjee refused to play ball, the housing project in Rajarhat remains on track.

The project will be executed by Tata Housing Development Co, a Tata group firm in which Tata Sons holds 97.5%. The residual 2.5% is held within the group. The project – christened Eden Court – will be the group’s maiden housing project in West Bengal. Shapoorji Pallonji & Co will handle construction.

Information trickling in from property circles suggests the housing company will do a soft launch on May 1 and construction will get underway by end-May. Though a precise project tenure is not available, it is slated for completion sometime in calendar 2011.

The Tata Group company has set up similar residential projects in Mumbai, Bangalore, Goa and Pune. It is also into development of commercial space, IT Parks and shopping malls.

The project in West Bengal has been planned over nearly five acres with three striking towers. The towers will comprise 2BHK and 3BHK apartments . ET had sent a detailed questionnaire to the company on April 16 to get a fix on the scale of the project. But even 10 days after the mail was sent, the company did not to respond to the queries.

Tata circles, however, unofficially acknowledged that Rajarhat was well known as a premier IT hub where some of the leading names in the IT spectrum had set up shops.

“The West Bengal government, along with some private and public sector companies, is working to provide the township with latest infrastructure and amenities to make it an ideal and happening industrial and residential township,” said a senior Tata executive, who did not wish to be named.

In so far as the apartment stats go, the twobedroom flats, which are in the 970-sq-ft category, will be priced at Rs 26.76 lakh. The three-bedroom flats will be in two variants – 1,260 sq ft and 1,421 sq ft.

The company has fixed the price tag for 1,260 sq ft apartments at Rs 34.65 lakh, while the price tag of the 1,421 sq feet version has been kept at Rs 39.07 lakh.

The inaugural price for the project has been kept at Rs 2,750 per sq ft. The booking amount for the 970-sq-ft apartment is fixed at Rs 2 lakh. For the 1,260-sq-ft flat, it is Rs 3 lakh and Rs 4 lakh for the 1,421-sq-ft version.

Tata Housing has tied up with a clutch of banks, including HDFC Bank, ICICI Bank, State Bank of India and Axis Bank for providing housing finance to prospective buyers.

Source : http://www.indiainfoline.com/news/innernews.asp?storyId=99996&lmn=1

Zamanzar.com Introduces ZamEstimate™ for Online Property Valuation in India

NewswireToday – /newswire/ – New Delhi, India, 04/25/2009 – Indian property buyers and sellers can now check property rates and get an online value estimate ZamEstimate™ for an Indian residential or commercial property within seconds with a new online tool released by Zamanzar.com.

Real estate buyers and owners who need to find current value of property and real estate rates in India can now do so online from the comfort of their home or office. Zamanzar.com is the first Indian real estate portal to release an online tool that lets anyone calculate a property value estimate (ZamEstimate™) within seconds for properties in Delhi NCR, Mumbai, Ahmedabad, Pune, Jaipur, Lucknow, Bangalore, Hyderabad, Chennai, and Kolkata. You can go to Zamanazar’s online property valuation tool given below right now, fill out a small form, click the Submit button and get an online property value estimate.

The ZamEstimate™ gives you a price estimate as well as links to the TOP 5 most similar properties currently for sale on Zamanzar.com.

Viewing these similar properties allows you to use human judgment to understand the basis of the ZamEstimate™ calculation. It also shows you an accuracy percentage, with which you can understand the extent of accuracy of the estimate given. Zamanzar.com also offers an offline, manual property valuation service for a fee where you get a written property valuation report signed by a licensed property surveyor.

A buyer who used this feature said, “I think this is a quick and easy way to find what the prevailing property rates are in any area. The ZamEstimate™ for a 3 bedroom apartment, 1500 sq ft in Defence Colony, New Delhi came out to Rs. 2.80 Cr +/- 1.73%. This estimate was in the price range quoted to me by a local real estate agent.”

“The ZamEstimate™ tool is part of Zamanzar.com’s vision to provide a real estate information platform for all stakeholders in the Indian real estate industry. We continue to work towards more online and offline innovations that will empower real estate consumers to make better real estate decisions”, said Nisheeth Ranjan, Founder/CEO of Zamanzar.com. “The tool is currently in Beta mode and we will continuously improve it to add many more parameters based on user feedback”, he added.

Zamanzar.com is currently ranked within the TOP 10 real estate portals in India according to Alexa traffic rank. The company was started in 2007 by Nisheeth Ranjan, a graduate of Cornell University and Stanford University, after having worked in Silicon Valley, California for more than 10 years. Zamanzar.com provides an end to end solution for buying/renting/selling residential or commercial real estate across India. The real estate portal has more than 200,000 property listings and offers online and offline services for buyers, renters, owners, agents, and builders. These services include online marketing, property tours, property appraisals, title checks, financing, negotiation, legal paperwork, property registration etc.

Source : http://www.newswiretoday.com/news/49806/

Alila Hotels & Resorts to open 12 hotels in India by 2015

Singapore-based Alila Hotels & Resorts plans to foray into the Indian market with its first property in Goa, Alila Diwa Goa by September 2009 and another property in Bengaluru by July 2010. These properties will be managed by Alila Hotels & Resorts. The company plans to open 12 hotels in India by 2015, focusing on getaway destinations. It is in discussion with developers to manage properties in Calicut and Kochi, Kerala.

Speaking exclusively with Hospitality Biz, Mark A Edleson, President, Alila Hotels and Resorts says, “We will focus on key destinations to open resorts and hotels that target business and leisure clients. India is a major target country and we see huge opportunity and potential in this market. Since, we are launching our hotel in a new country we need to understand the market, human resources and clientele. We are also looking for properties in Bengaluru and Jaipur.”

With the Alila Diwa Goa, property owner Parekh Group has announced its foray into India’s hospitality sector. Located in South Goa,

Source : http://www.hospitalitybizindia.com/detailNews.aspx?aid=4533&sid=1

Developers to launch green residential projects

The concept of green buildings has influenced real estate developers to the extent that a number of developers are planning green residential projects.

Among first to announce the green residential projects is the 3C Group, with two green residential projects in Noida this year at a cost of Rs 2,600 crore.

According to Vidur Bharadwaj, director, 3C Group, the first project includes an affordable luxury homes spread in 40 acres in Sector 100 of Noida, with an investment of 2,000 crore, project will be launched in July and will offer 500 flats. The second green residential project will be a 57 acre luxury development with a 9-hole golf course and a health spa in Greater Noida, which will be launched in the fourth quarter of 2009. It will offer 100 luxury villas of 1,000 yds to 3,500 yds area.

Puravankara aims pan-India presence
Puravankara Projects, the Bangalore-based realtor, is planning to develop projects across the country. The Group is looking at acquiring lands in other parts of the country for Provident Housing and Infrastructure, its mid-income housing subsidiary.
Ravi Ramu, director, Puravankara, announced, “We are looking at new regions and evaluating projects. We have learnt that valuation of the land is 30-40 per cent cheaper than last two years’ prices. Even the payment terms are better, which is making the deals feasible.”
The developer is all set to launch a project in Bangalore under the Provident brand, for which approvals have been obtained and the price will be in range of Rs 20 lakh.

Unitech gets into sub-Rs 10 lakh segment
Unitech Ltd, the country’s second largest developer, has planned to launch over 40 new projects, mostly in the housing sector in sub-Rs 10 lakh residential segment.
These projects will be spread across all the major cities and will be launched in next 12 months
The company has a debt of over Rs 8,400 crore in its book. “Regardless of massive challenge, we are ready to raise funds for projects. Also, the presales would meet project costs,” said a company official.

Market looks sanguine now: Pune builders
The Promoters and Builders Association Pune (PBAP) has expressed that due to improved interest among home buyers and the softer approach of banks and financial institutions towards financing projects, the realty market has started looking positive now. Satish Magar, the newly-elected president of PBAP said that the organisation’s members have seen bookings in new projects rise by at least 20 to 30 per cent since February. He said that the new projects are attracting more customers, which shows that even, demand exists at the right price and buyers are willing to purchase. “Prices have rationalised and interest rates have also gone down, which has also renewed the buyers’ interest,” he said.

Source : http://www.expressestates.in/full_story.php?content_id=93765

Housing sector shows signs of Life

India’s housing sector is showing stirrings of growth with a marked increase in the number of transactions for the last quarter of 2009, as the interest rate cuts on housing loans announced by various banks begin to take effect.

The number of residential transactions went up 12-15% for the quarter ended March 31, 2009, over the previous one, according to global real estate consultancy Jones Lang LaSalle Meghraj (JLLM). Leading realty players that SundayET spoke to confirmed there indeed was an uptick in demand in the last couple of months, especially in March.

DLF, India’s largest realty player, managed to sell all 1,400 apartments in its upcoming project in West Delhi within 24 hours at a discounted price, says Rajeev Talwar, group executive director, DLF.

Unitech, which launched two of its affordable projects last month in Delhi NCR and Chennai, too saw an enthusiastic buyer response, according to a company spokesman. The developer sold off 750 apartments in Uniworld Garden II in 45 days of its launch. Another project, Ananda, launched in Chennai and priced at Rs 20 lakh onwards saw 500 apartments being sold off in 10 days, claims the Unitech official.

In Mumbai, more than 2,500 apartments have been sold in the last 40 days, according to Niranjan Hiranandani, MD, Hiranandani Developers.

Reflecting this market movement, banks too confirmed increased activity in the home loan segment. Leading banks that SundayET spoke to said that business from this segment clocked an estimated growth of 10-15% in Q4 against the previous quarter.

Source : http://www.indianrealtynews.com/real-estate-india/housing-sector-shows-signs-of-life.html

Builders, politicians cheer affordable homes in India

MUMBAI, April 28 (Reuters) – A recent state government lottery for about 4,000 low-cost apartments in Mumbai drew more than 430,000 applications, underlining the need for affordable housing in a country where housing is also a top election issue.

Political parties of all hues have seized on affordable homes as a vote getter in India’s ongoing general election, plugging in to the frustration of millions priced out of a real estate boom fuelled by a robust economy and a six-year bull market.

Developers too, stung by the credit crunch and sagging demand for offices and premium residences, have turned to a middle class segment that may be more immune to the economic slowdown.

“For the government it makes sense from a vote bank perspective,” said Anuj Puri, managing director of real estate consultancy Jones Lang LaSalle Meghraj.

“For builders, this slump may last two to three years. How do they pay salaries, keep their lenders happy? This is the option.”

Parties have been quick to seize the opportunity in a country where home ownership tops every wishlist, and is part of the trio of basic amenities alongside electricity and roads promised by every politician to mostly rural voters.

The Congress party-led government has recently encouraged states to release land for affordable homes, invited private partnerships and stepped up funding of rural housing.

The Congress government in Maharashtra state — home to Mumbai — has declared 2009 as the year of “Housing for the Common Man”, with a plan to build 1 million affordable homes, while the Congress government in Delhi held a lottery for 5,000 flats that got 500,000 applications.

The Hindu-nationalist opposition Bharatiya Janata Party has vowed to build 1 million homes every year in its manifesto.

AFFORDABLE HOUSING IMMUNE TO CREDIT CRUNCH

But it is not just politicians taking an interest in votes.

Investors stung by a slump in the wealthy real estate sectors are increasingly looking at investment in affordable housing.

This kind of housing is “seriously undersupplied” in India, according to a Goldman Sachs report. More than 30 million units are needed because of growing urbanisation.

Mumbai, long a magnet for migrants from poor states, is home to one of the 10 most pricey residential neighbourhoods in the world, yet more than half its 17 million residents are homeless.

Demand has also stayed robust because these buyers do not depend on bonuses or stock-market gains said Puri, who defines an “affordable” home as costing no more than five times the buyer’s cumulative salary, or 2.2-3.5 million rupees ($44,000-$70,000) for an average middle-class family in India.

This segment of buyers appears relatively insulated from the credit crunch, as is evident from robust motorbike sales and the record number of new mobile phone users being added every month.

“Ironically, the sector which was one of the principal causes of the financial market meltdown in the U.S. may just offer downside protection in India — the fortune at the bottom of the pyramid,” said the Goldman Sachs report.

Since India eased rules on property investment in early 2005, foreign investors such as Citigroup (C.N) and Morgan Stanley (MS.N) have piled in, causing land prices to double in major cities.

But as the credit crisis spread, it put the brakes on several big projects; affordable housing on the other hand, is relatively insulated as there is little foreign funding.

Top developers such as DLF (DLF.BO), Unitech (UNTE.BO), Omaxe (OMAX.BO) and Parsvnath (PARV.BO) are targeting the segment now, with about two dozen projects in Mumbai’s suburbs alone, even as high-ticket commercial and residential projects have stalled.

The Mumbai draw was more keenly awaited than the election.

“I didn’t want to regret later that I didn’t even make an attempt at getting an apartment 30-40 percent cheaper,” said Jitendra Patil, 29, an advertising executive. (Editing by Alistair Scrutton)

Source : http://www.reuters.com/article/marketsNews/idUSBOM42676620090428?pageNumber=2&virtualBrandChannel=0

Property buyers begin value picks

MUMBAI: Falling real estate prices coupled with lower booking amounts are helping developers sell new properties in cities such as Mumbai and EMIs and tenure

Chennai. A recent report from Nomura Securities said that there has been a correction of as much as 30% in prices of projects that have just been announced.

“While there has definitely been a correction in prices, it is patchy and not yet complete in many cases. Most correction is around the 10-15% mark with some projects having corrected by almost 30%. A large amount of correction seems to have taken place in and around Mumbai in areas such as Thane, Mulund, Virar and Mira Road,” the report said.

Over the past one month or so, several developers launched new projects at lower prices that were adjacent to their ongoing projects. Often, they have lowered prices in their existing projects to woo prospective buyers. “While there is no mad rush to buy homes at the right price, deals will happen. Both buyers and builders have realised that,” said Akshaya Kumar, MD, Parklane Advisors, a real estate consulting firm.

A case in point is that of Nirmal Lifestyle. The company launched new projects in Mulund and Kalyan at special prices and now claims to have sold over 700 flats. “While the price in November was Rs 7,000 per square foot, the flats in the new project in Mulund are being offered at Rs 4,800 per square foot,” said Nirmal’s MD, Dharmesh Jain.

Several other developers like Akruti in Mira Road has sold 300 flats within days of its launch. HDIL, another builder, has offered properties in Mumbai’s suburbs, such as Andheri and Kurla, for which the response is said to be good.

Chennai, too, has seen a correction in prices with several builders dropping prices by 10-30%. “Some genuine builders are ready to pass on the cost benefit to people, who booked earlier. This could be in the form of more area for the same price or just more freebies,” said a property dealer in Chennai.

A leading builder in the city is offering a discount of Rs 200 per square foot, if the payment is made upfront. This gives a good opportunity to cash-rich investors.

In Mumbai, Neptune Builders for its Bhandup project, has asked for a booking amount of just Rs 51,000 for a two bedroom apartment. Since most buildings take about 2-3 years for completion, the balance payment can be staggered.

“Definitely, when compared to the first three months, there is larger number of transactions taking place, though the exact situation will only be known in a couple of months when the next installment needs to be paid,” said a senior official at a real estate mutual fund.

Source : http://economictimes.indiatimes.com/News-by-Industry/Property-buyers-begin-value-picks/articleshow/4452557.cms

Banks ease loan riders for homeloan takers

Bangalore: Banks have turned considerate in terms of homeloans, with some banks enabling the recession victims to retain their homes by restructuring their loans beyond the set deadline of March 31st. One of the country’s top notch bank, State Bank of India (SBI), has extended its offer on new homeloans till September, whereby, the interest rate during the first year of the loan is fixed at eight percent.

“We restructure loans based on our internal guidelines and regulatory requirements. Decisions are taken based on the merits of the case,” added Ravi Subramanian, Head, Consumer Assets, HSBC India. Debt restructuring packages include extending the loan tenure, waiver of part-interest or allowing an EMI holiday to help overcome a temporary crunch. However, banks take pains to ensure the authenticity of the distressed borrowers’ claims and grant relief on a case-to-case basis. “If the borrower cant pay three EMIs (three monthly installments), the bank will restructure the loan in a way that the interest accrued for that period is added to the outstanding principal amount. The repayment schedule is worked on the new principal amount. But we check the borrower’s rating with CIBIL and his/her repayment behavior with other banks before arriving at any such decision,” said Sujan Sinha, Senior Vice-President for retail banking, Axis Bank.

SBI also said that top-up loans for home loan customers that are disbursed up to September 2009, cost eight percent in the first year. “Under the special home loan scheme, we have sanctioned loans worth Rs.2,500 crore to over 20,000 customers,” said Nanda Kumaran, SBI’s Chief General Manager for retail banking.

Source : http://www.siliconindia.com/shownews/Banks_ease_loan_riders_for_homeloan_takers-nid-55731.html

Price negotiations begin as commercial rents tend southward

The move comes as demand for commercial space across India, and especially in central Mumbai has shrunk, resulting in a fall in prices

Bangalore / Mumbai: After two failed attempts to pre-sell its Hafeez Contractor House development in central Mumbai over the past two years, real estate developer Orbit Corp. Ltd has decided to build premium residences instead of corporate offices on the 250,000 sq. ft property.

Central business districts have been hit most, say property consultants. The move comes as demand for commercial space across India, and especially in central Mumbai has shrunk, resulting in a fall in prices.
“There would be no takers for expensive commercial property in Lower Parel in such a negative scenario, so we had to think of a different format. Also, we realized that demand in the residential segment is more than (in the) commercial space,” said Pujit Aggarwal, managing director of Orbit.

Property prices and rents for commercial space have dropped hard—between 25% and 35%—in the first quarter of 2009 across seven Indian cities, including the metros, primarily as financial and technology firms pare real estate expansion and give up excess space to curb expenses, realty services firm CB Richard Ellis says in its April report.

The fall in commercial property prices is also because of a fresh supply of 11.5 million sq ft. of space in the same period, outstripping absorption of 5.78 million sq ft., property advisory Cushman and Wakefield India says in its April report, based on a survey of eight major cities. “Liquidity for the real estate sector is not going to improve for the next two-three quarters and commercial properties will be battered the most,” said Sunil Rohokale, executive director of ASK Investment Holdings Pvt. Ltd, which is raising a Rs500 crore domestic real estate fund.
And central business districts have been hit the most, say property consultants.
Connaught Place in New Delhi, the city’s central business district, saw a rise in vacancies as tenants relocated to cheaper properties in the city. And in Mumbai, around 350,000 sq ft. of space is going abegging in premium buildings such as Free Press House and Maker Chamber VI in Nariman Point, the country’s oldest business district.
Other parts of Mumbai haven’t been spared either. Lower Parel, also the heartland of Mumbai’s defunct textile mills, has seen the sharpest quarter-on-quarter fall in rents for office space—37% in the first three months of this year —Cushman and Wakefield says in its report.
Office rentals in Worli and Bandra-Kurla Complex (BKC), two other business hubs in the city, fell by 37% and 29%, respectively, during the period, adds the report. And the National Capital Region that includes New Delhi recorded its highest fall of 17% in rentals in three years.
“As rents keep going southwards, in the coming quarter, we will see tough negotiations between tenants and developers to bring down rents further,” said Kaustuv Roy, an executive at the tenant strategies and solutions practice at Cushman and Wakefield. While rents in the commercial sector were declining since the last quarter of 2008, Roy forecasts a further 15-20% fall over the next six-eight months as more office space becomes available. The first quarter primarily saw companies renegotiating prices, deferring taking up space and re-evaluating their expansion plans, he added.
“Negotiations are on rental, property tax, maintenance cost and car parking,” said the head of a financial services firm, asking not to be named. As new tenants negotiate prices, existing tenants will want to renegotiate prices, said an expert.

Source : http://www.livemint.com/2009/04/23221339/Price-negotiations-begin-as-co.html

Indian Hotels in talks to acquire Sea Rock

BANGALORE | MUMBAI: Indian Hotels Company (IHCL), owners of the Taj group of hotels, is in negotiations to acquire Mumbai’s Sea Rock hotel in a deal estimated at Rs 650-700 crore, banking sources said. IHCL, through one of its associate entities, is arranging a debt facility, which, along with some internal accruals, will fund the transaction that has been in the making for a few months now. IHCL will acquire Sea Rock from the Delhi-based Claridges group, which had bought the hotel in 2005.

“In January 2009, Indian Hotels Company entered into a strategic arrangement with Delhi-based Claridges group, which owns Sea Rock, to provide technical and management expertise for restoration and operation of the hotel, when the redevelopment of the property is completed,” said the spokesperson of IHCL. “We do not wish to comment on any further speculation,” the spokesperson added.

A source familiar with the matter said the deal was synergistic for IHCL and the Taj brand, given that the Taj Land’s End in Bandra is located across the road from Sea Rock. Post-deal, IHCL is believed to be working on an integrated complex at Taj Land’s End. The resulting structure might eventually be similar to the iconic Taj Mahal Palace and Towers at the Gateway of India in Mumbai.

Once the acquisition is completed, the Taj group will overhaul the existing Sea Rock property and build it into a luxury asset leveraging its vantage location. Searock is closer to the sea and it has a better view than the existing Taj Land’s End, said the source. The Searock a well-known Mumbai landmark had more than 400 rooms while Taj Lands has 368 rooms.

Its fortunes suffered a precipitous decline after it was badly damaged in the 1993 bomb blasts. It never reopened, largely because of disputes between its owners. In 2005 it was acquired by the Delhi-based Claridges group, owned by the Delhi-based industrialist Suresh Nanda, which is refurbishing the property.

Earlier this year the Taj entered into an arrangement with the Claridges Group to operate the property after it was refurbished. If the acquisition goes through the Taj will have 4 properties in Mumbai, the others being the Taj Mahal Palace and Tower, the Taj Lands End and Taj President.

Source : http://economictimes.indiatimes.com/News-by-Industry/IHCL-in-talks-to-acquire-Sea-Rock/articleshow/4437149.cms

Sobha plans to launch high-end apartment project in Bangalore

Even as the demand slump is forcing leading property developers across the country to prefer affordable housing in place of high value apartments, Bangalore-based Sobha Developers is firming up plans to launch a high-end apartment project in the city. The project, which would carry a price tag of about Rs 6,000 per sq ft, will be the first luxury apartment project from Sobha after crisis hit the Indian real estate sector.

According to sources, the J P Nagar project, to come up on 36 acres of land in J P Nagar in the south of the city, will be announced during the present year.

The company also plans to enter the affordable housing segment by announcing apartments in the Rs 25 lakh to Rs 30 lakh range in Coimbatore, Tamil Nadu.

Sobha’s move is in line with the industry trend to announce new launches in select areas and chosen price bands in the residential real estate segment. Availability of bank loans makes residential projects a safe bet for cash-strapped real estate developers.

Unlike other players who have lined up dozens of such project launches during the year, Sobha has decided to test the waters with just two launches in 2009-10.

“We are not in a hurry to announce future projects as our priority is to sell the ones nearing completion. Of about 2,000 flats / villas that are under various stages of construction across the country, Sobha has been able to sell about 50 per cent until now. The company expects to see the balance being sold off by the time the projects get completed within the next two and a half years,” a senior Sobha official said. He added that their projects in the neighbouring states of Kerala and Tamil Nadu are in greater demand than the ones in Bangalore.

Sobha’s plans for new investments come amidst its struggle to manage its Rs 2,000 crore debts. Company officials said the debt repayment plans are going ahead and the company will have no problems in funding the new projects.

“Of the total debts, about one-fourth has to be repaid this year. We are exploring various options, including issue of preferential shares and sale of land to generate the required amount,” company official said.

The company is also expecting a 25 per cent increase in its revenues from contract works for corporates like Infosys.

Source : http://www.business-standard.com/india/news/sobha-plans-to-launch-high-end-apartment-project-in-bangalore/356069/

Realtors slash new project rates by 30% to woo buyers

MUMBAI: A scenario of falling real estate prices coupled with lower booking amounts are helping developers sell new properties in centres like

Mumbai and Chennai. A recent report from Nomura Securities says that there has been a correction of as much as 30% in projects that have just been announced.

“While there has definitely been a correction in prices, it is patchy and not yet complete in many cases. Most of the correction is around the 10-15 % mark with some projects having corrected by almost 30%.

A large amount of correction seems to have taken place in and around Mumbai in areas like Thane, Mulund, Virar and Mira Road, adds the report. Over the last one month or so, several developers launched new projects at lower prices which were adjacent to their ongoing projects.

Often, they have lowered prices in their existing projects to woo prospective buyers . “While there is no mad rush to buy homes at the right price, deals will happen. Both buyers and builders have realized that” , says Akshaya Kumar, MD, Parklane Advisors, a real esate consulting firm.

A case in point is that of Nirmal Lifestyle. The company launched new projects in Mulund and Kalyan at special prices and now claims to have sold over 700 flats. “While the price in November was Rs 7000 per square foot, the flats in the new project in Mulund are being offered at Rs 4800 per square foot,” said Nirmal’s MD, Dharmesh Jain. Several other developers like Akruti in Mira Road has sold 300 flats within days of its launch. HDIL, another builder, has offered properties in Mumbai’s suburbs like Andheri and Kurla for which the response is said to be good.

Chennai too has seen a correction in its prices with several builders dropping prices in a 10-30 % range. “Some genuine builders are ready to pass on the cost benefit to people who booked earlier. This could be in the form of more area for the same price or just more freebies ,” says a property dealer in Chennai.

A leading builder in the city is offering a discount of Rs 200 per square foot if the payment is made upfront. This gives a good opportunity to cash rich investors. In Mumbai, Neptune Builders for its Bhandup project, has asked for a booking amount of just Rs 51,000 for a two bedroom apartment. Since most buildings take about 2-3 years for completion, the balance payment can be staggered.

‘When compared to the first three months, there are larger number of transactions taking place though the exact situation will only be known in a couple of months when the next instalment needs to be paid,” says a senior official at a real estate mutual fund.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Realtors-slash-new-project-rates-by-30-to-woo-buyers-/articleshow/4447394.cms

FDI inflows in FY10 may cross FY09 figure

At this level, FDI inflows this fiscal will be marginally higher than the preliminary estimates of $27.5 billion for 2008-09. The government had fixed an FDI target of $30 billion for 2008-09.

“The investments may be delayed but the investor outlook remains optimistic,” said Gopal Krishna, joint secretary, Department of Industrial Policy and Promotion (DIPP), on the sidelines of a function organised by global consulting firm Booz & Company and the American Chamber of Commerce (AMCHAM).

If foreign firms reinvesting their profits in India are also taken into account, the total FDI inflow will touch the $40 billion mark in the current fiscal, the same level expected in the just ended financial year.

Though the ministry is optimistic of attracting more foreign investments in the current fiscal, the latest FDI numbers showed a sharp decline. FDI inflow is expected to decline to about $2.5 billion in March, compared with $4.4 billion in the year-ago period.

Commenting on the new press notes on FDI, he said it was an effort to simplify the complex foreign investment procedures, adding that investment through the automatic route had increased to 90 per cent in the last fiscal as against just 16 per cent in 2000.

The resilience of the Indian economy makes it a favourable destination for private equity by foreign investors, even as the financial crisis is leading to a global slowdown, said Atul Singh, president (India and South West Asia), Coca-Cola.

Source : http://www.business-standard.com/india/news/fdi-inflows-in-fy10-may-cross-fy09-figure/356222/

Retail and Real Estate Projects on hold in Kolkata

Around 100 small and large retail and real estate projects in Kolkata are being delayed or deferred 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 to 50 projects are lined up in the city currently, around 100 projects are delayed or deferred due to credit crunch as well as because of uncertainty over projects’ viability and sustenance.

As per report, projects like City Centre II, Lake Mall, Terminus Mall, Axis Mall and Avani Riverside mall in Howrah, are already running behind schedule. According to Mr Mayank Saksena head of transactions in Kolkata, Jones Lang LaSalle Meghraj, around 40 to 50 projects are lined up for Kolkata while around 100 have been delayed. On an average, each of these projects is of approximately 200,000 square feet priced at an average of INR 3,000 per sq ft. Mr Saksena added that “The best performing local developer is currently Bengal Ambuja. Local developers deliver very satisfactory products at lower prices. For instance, Bengal Unitech is charging INR 3,200 per sq ft in Rajarhat, while other local developers charge INR 2,500 per sq ft for comparable projects.”

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

Source :  http://www.indianrealtynews.com/real-estate-india/kolkata/retail-and-real-estate-projects-on-hold-in-kolkata.html

Banks Ease Home Loan Repayment Norms for Job-Loss Victims

Banks are taking a considerate view on home loan repayment by job-loss victims, thereby helping borrowers retain their homes. Although the March 31 deadline set by the Reserve Bank of India for receiving loan restructuring applications has expired, banks continue to consider such proposals from home loan borrowers. The relief offered by banks include granting EMI holidays to borrowers faced with job losses and pay cuts. “We are open to such restructuring proposals, including EMI holidays, even now and are mulling other options,” confirmed a senior official with a leading private bank, on condition of anonymity.

“We restructure loans based on our internal guidelines and regulatory requirements. Decisions are taken based on the merits of the case,” added Ravi Subramanian, head, consumer assets, HSBC India. Once the borrower approaches his / her bank spelling out the difficulties in repaying the loan, the bank works out a mutually-agreeable repayment solution. Debt restructuring packages include extending the loan tenure, waiver of part-interest or allowing an EMI holiday to help overcome a temporary crunch. However, banks take pains to ensure the authenticity of the distressed borrowers’ claims and grant relief on a case-to-case basis. “If the borrower cant pay three EMIs (three monthly instalments), the bank will restructure the loan in a way that the interest accrued for that period is added to the outstanding principal amount. The repayment schedule is worked on the new principal amount. But we check the borrower’s rating with CIBIL and his / her repayment behaviour with other banks before arriving at any such decision,” said Sujan Sinha, senior vice-president for retail banking, Axis Bank.

“We intend to cross check with the borrower’s employer to ascertain whether a job loss / pay cut has actually occurred and the borrower is not taking advantage of the restructuring option being available now. We also ask borrowers for a copy of the official letter that mentions the pay cut / retrenchment, if required,” added another bank official. As a consequence of this empathy on part of the banks and increase in awareness among borrowers, the resolution rate at credit counselling centres has gone up. “In several cases, we have seen that banks do reschedule loans if they are convinced that the borrower’s predicament is genuine,” informed Madan Mohan, credit counsellor at the ICICI Bank-supported Disha Financial Counselling. And it’s not just the borrowers who stand to gain from this arrangement. Accepting such proposals would enable banks to cut down on litigation and recovery-related expenses. “Logically, banks do not stand to lose if they have to wait for even six months because the process of seizing the mortgaged asset, putting it up on sale and realising the proceeds would be equally time-consuming,” pointed out VN Kulkarni of the Bank of India-backed Abhay Credit Counselling centre.

Source : http://www.indianrealtynews.com/home-loans/banks-ease-home-loan-repayment-norms-for-job-loss-victims.html

SBI Extends Home Loan Discount till September

State Bank of India, the country’s largest lender, has decided to extend the special offer for auto and home loans till September. Under the scheme, which was earlier valid till the end of April, the bank had frozen the interest rate on new home loans at 8 per cent during the first year, while the cost of auto loans was fixed at 10 per cent during the first year. Subsequently, the interest rate was to be revised to the prevailing rate. Extending the scheme by five months, the bank also said today that top-up loans for home loan customers that are disbursed up to September 2009, would cost 8 per cent in the first year. SBI reiterated that the special rates were aimed at stimulating demand. When it had first announced the special rate schemes, its rivals – including HDFC, the largest mortgage player – had termed the move as a teaser offer and had said that it would only result in borrowers shifting their accounts.

Subsequently, HDFC executives said that the move has not resulted in too many customers shifting to SBI to avail of the special offer. But the housing finance company responded by reducing its prime lending rate to enable its existing borrowers to avail of the lower interest rate regime. While SBI has lowered its benchmark prime lending rate by 150 basis points since November, it has not participated in the latest round of rate cuts by public sector banks. Instead, it has come up with special loan schemes aimed at housing, auto and small and medium enterprises.

When contacted, Nanda Kumaran, SBI’s chief general manager for retail banking said the bank has sanctioned loans worth Rs 2,500 crore to over 20,000 customers under the special home loan scheme which was announced in February 2009. Similarly, in case of the special auto loan scheme, he said, the response was good. Most auto loans disbursed through the scheme have been availed of by individuals purchasing entry-level models from Maruti, Hyundai and Tata Motors. These loans do not include the bookings for Nano, which opened last week. “We have received a good response to the schemes and the extension by five months is expected to help boost the demand in the economy,” Nanda Kumaran added. Executives at private sector banks said that SBI was among the most aggressive players in the car finance business at present and was among the highest loan disbursing lenders along with HDFC Bank. Many of the bigger players, such as ICICI Bank, Citi and Standard Chartered, have reduced the scale of operations in the auto loan market due to rising delinquency levels.

An SBI executive said that the country’s largest bank had managed to increase the outstanding retail credit portfolio to above Rs 1,00,000 crore at the end of March 2009, partly aided by the special offers and aggressive pricing of retail loans. It is targeting a 30 per cent growth in its retail portfolio during the current financial year. As of December 2008, SBI’s auto loans portfolio was estimated at Rs 8,970 crore, 32.14 per cent higher than the Rs 6,788 crore it had disbursed till December 2007. Similarly, during the period, its home loan portfolio grew 21.56 per cent to Rs 52,062 crore, while the residual retail loan book was estimated to have increased by 30.82 per cent to Rs 37,077 crore.

Source : http://www.indianrealtynews.com/home-loans/sbi-extends-home-loan-discount-till-september.html

Decline in Office Rentals continues

Office markets across the country continued to show a downward trend as most markets recorded negative growth in rental values after supply across eight major cities in India outstripped absorption by 45 per cent.

Mumbai, the financial capital of India, witnessed the sharpest decline in rental values in the first quarter of 2009 while the National Capital Region witnessed significant decline in rental values in central business district in the first quarter of 2009, according to Cushman & Wakefield’s latest office market report.

Micro markets of Mumbai including those of Lower Parel and Worli recorded drops of 37 per cent and 29 per cent respectively from a three per cent and 13 per cent drop respectively in the preceding three months. Rentals in central business district of Nariman Point fell by 13 per cent in the first quarter of this year compared to 20 per cent in the previous quarter.

Rentals in NCR’s CBD, mainly Connaught Place dropped by 17 per cent, the highest in the last 3 years, the property consultant said in the report. The drop comes after a 14 per cent decline in the previous quarter. Bangalore rentals fell in the manageable range of three to seven per cent in key markets.

“The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India as compared to a similar period for the last 2/3 years,’’ said Kaustuv Roy, Executive Director, Cushman & Wakefield.

Bangalore witnessed the highest new office space supply of approximately 2.81 million square feet and also the highest demand of 1.29 million square feet. NCR and Mumbai witnessed fresh office space supply of 2.6 million square feet and 2.47 million square feet respectively and absorption of 0.8 square feet and 0.9 square feet respectively. Chennai, which had been reeling under over supply pressures saw moderate supply 0.98 square feet and absorption of 0.9 square feet. Hyderabad and Ahmedabad saw no addition to the current stock.

Vacancy levels had remained largely consistent to last quarter with most IT/ITeS destinations witnessing high vacancy levels. Chennai’s peripheral location (Rajiv Gandhi Salai) recorded the highest vacancy of approximately 42% while the city average was at approximately 18%. The lowest vacancy was recorded in Ahmedabad at five to six percent due to limited leasing activities and no new supply in the market.

Mumbai recorded a vacancy of approximately 11-12 per cent while vacancy levels in NCR stayed at a manageable 8 -10 per cent. Bangalore, Pune and Kolkata remained at an average of 16 -18 per cent. Hyderabad saw some slackness in activities and therefore recorded a reasonably high vacancy of 23% of which prime suburban region comprising of Banjara Hills and Jubilee Hills recorded a higher 35% vacancy.

‘’Re- negotiations and migration to more cost effective locations has been the norm for the cautiously advancing corporate sector. However going forward we are likely to see supply contraction,’’ said Roy.

‘’Acutely affected areas like IT/ITES and certain corporate office destinations will see deferment of projects to bridge the gap between supply and demand. While rental values are expected to be under pressure in short to medium term, going forward lower rentals are likely to have a more positive impact on the absorption numbers,’’ he added.

Source : http://www.indianrealtynews.com/real-estate-india/decline-in-office-rentals-continues.html

Thane: Take the plunge in City of Lakes

Not too long ago, Thane was considered inaccessible and to put it simply — just a sleepy town. An efficient municipality (Thane Municipal  Corporation) and good infrastructure are just some of the factors that made Thane a location which a lot of Mumbai residents are taking to in more ways than one.

The area plays host to over 1.26 million inhabitants which is steadily increasing. If Mumbai suffered from a paucity of space and greenery, Thane has offered a decent alternative. It has as many as 30 lakes and is quite appropriately called the “city of lakes.” That coupled with the surrounding hills and a host of other picturesque locations have facilitated the metamorphosis of Thane.

“Thane combines the best of both worlds — tradition and modernity,” says Niranjan Hiranandani, managing director of Hiranandani Group, a developer who placed his faith in this town over a decade ago and today offers large townships like Hiranandani Estate and Hiranandani Meadows.

Joining the Thane real estate story are other property developers like Lodha, Kalpatru, Dosti and Runwal, all with a healthy client base. For a long time, access to Thane was an area of concern. That seems to have been corrected to a large extent.

“Thane was once viewed as the last possible means for the common man to own a home within his means in Mumbai. That is changing because of the large-scale construction and development going on there,” explains Ashutosh Limaye, associate director — strategic consulting at Jones Lang LaSalle Meghraj, a property consultant.

Limaye is convinced that the area has moved up in the pecking order of good locations. Today, Thane is connected to the Western suburbs (this eventually leads to key destinations like Surat and Ahmedabad) apart from the eastern express highway that leads to key parts of Central Mumbai like Sion and Dadar.

With the influx of more people, Thane has evolved as a cosmopolitan location. Today, it has a slew of schools, shopping malls, multiplexes, recreation centres and restaurants. “The proposed ring railway, availability of adequate water supply and good road infrastructure are just some of factors working in Thane’s favour,” says Hiranandani. He adds that the proportion of slums in Thane is 10% compared to a 60% in Mumbai.

However, the boom that Thane saw in the last few years (rise in average residential prices from Rs 1,700 per sq ft to over Rs 6,000 sq ft) was over a four-year period and has been affected by the real estate slowdown.

Both residential and commercial rates have dropped quite significantly. Industry experts place it at 20-25% in the case of residential and 25-30% in the case of commercial. Of course, for a lot of people, this situation is also a great opportunity to buy. “The property market in Thane now presents some very good bargains and the long-term outlook for such purchases is very good,” thinks Limaye.

Interestingly, Thane has been largely known as an industrial base with companies like Raymond and Cadbury still having significant operations here. All this has changed over time. According to Hiranandani, while industrial development has dropped, there is a silver lining.

“This has been compensated by a surge in service-based employment like IT and ITES,” he adds. If the evolution of sunrise sectors is a parameter of growth, Thane has passed muster on that one.

The question coming up in the slowdown relates to the best time to buy. Limaye says “Thane remains among the most affordable locations in Mumbai. Despite the current slowdown, there will be a gradual rise in rates as development catches up with the planning and existing supply is absorbed,” he says.

There are also a number of infrastructure projects planned in Thane. Three flyovers are proposed on Ghodbunder Road, connecting Thane to the western suburbs of Mumbai. “Driving time from Thane to South Mumbai will reduce once the other flyovers (including Sion, Chembur and Mulund) are ready,” he adds.

Agrees Limaye who outlines road connectivity as a key factor. “Thane is in the process of gaining equal desirability status with areas like Malad and Goregaon (suburbs in western Mumbai),” he says. The next round of Thane’s story has just unfolded.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Consumer-Life/Thane-Take-the-plunge-in-City-of-Lakes/articleshow/4419236.cms

Ahmedabad rentals down

With property prices in Ahmedabad buckling under recessionary pressures, residential rental rates are also on a downward spiral.

The year 2009 will see consolidation in residential rentals and investors should brace themselves for it, says Mr Pratik Gajjar, Chief Executive Officer, Residential Rental, Space Management.

The residential rentals in the up-market Western part of the city peaked in 2008, and have fallen by nearly 25 per cent in the last six months. Short-term investors are being replaced by players who are in it for the long haul.

A five-to-six year lock-in on a property has become the norm and investors are buying a property with a view to retaining it for some years. This was not the case previously, when investors used to keep a property for an average of two years. This can be seen as an outcome of declining Returns on Investments, which have fallen to as low as 3.5-4 per cent this year, after hovering at 6-8 per cent in 2004-05, according to Mr Gajjar.

More bargaining power

In such a scenario, tenants have the upper hand and more bargaining power. This time, when the leases come up for renewals, the tenants are unwilling to pay hiked rentals and are, in fact, asking for discounts within their existing contracts.

Mr Gajjar and his team at the professional estate agency Space Management have been advising investors to comply with these demands and stick to their existing tenants.

“We are telling our clients to not let go of the existing tenants because it is difficult to find new tenants right now,” he said.

The market in Ahmedabad for rented residential accommodation is highly fragmented with very few one-BHK apartments, double categorised two BHK apartments, ambiguous three BHK ones (of 1,400 sq.ft to 3,600 sq.ft) and the premium four BHK ones (2,500 sq.ft to 4,000 sq.ft and above). The visible residential rental segment of Ahmedabad is largely in Western or new Ahmedabad. The Eastern or old city is mostly run by individual or unorganised brokers with most deals happening through word-of-mouth route, according to Mr Gajjar.

The current rates governing the visible segment in the two BHK space are ranging between Rs 4,500 and Rs 7,000 per month in the lower segment and Rs 6,500 and Rs 17,000 for fully furnished apartments in the upper segment. The two BHK segment has not seen a decline in rentals and is bucking the trend of declining prices. As monthly rentals in other segments are declining, those in two BHK and niche high-end segments are holding firm. The demand in this segment has outstripped supply and hence the rates are holding steady. The main reason for this is that, in the last three years, not many two BHKs were built in the city, according to brokers in Ahmedabad.

“The real-estate business is investment driven. Not too many two BHKs were built and there was a dearth of such properties. There was pressure on rentals but due to the demand-supply gap, rentals in this segment have remained the same and are not falling,” says Mr Gajjar.

He adds that though the rentals in the niche segment have not fallen yet, it is expected that they will fall soon. One BHK flats are considered as a sub-set of the two BHK ones and for an executive, staying in the city for a few years, it can cost anywhere between Rs 7,000 to Rs 9,000. Meanwhile, the three BHK apartments have seen a drop of 10 to 20 per cent in rates in the past six months and have now settled between Rs 12,000 and Rs 15,000 for the first category and up to Rs 1,00,000 in its fully furnished premium category. In this segment, currently, there is an oversupply situation which is threatening to penetrate to the other segments as well. Meanwhile, the four BHK apartments cost anywhere around Rs 20,000 and Rs 1,50,000 per month.

Bungalows upstaged

A notable change in trend here is that Ahmedabad, which attracts a lot of expatriates, used to pride itself on its bungalows which were favoured by visitors who stayed for a couple of months every year. But of late, the expatriates have been choosing apartments over bungalows. Mr Gajjar attributes this trend to the new constructions that are being built in a style catering to the requirements of the NRIs. “When NRIs go to Mumbai or Delhi, they stay in apartments, so the builders thought ‘why not provide them with good and premium quality apartments here too’ and thus has started this trend,” he says.

The recession is playing a spoiler to the real-estate boom that Ahmedabad was beginning to see, admits Mr Gajjar but he does not want to predict beyond a six-month period. “The current rates are dissuading investors from leasing out residential properties but if the situation worsens, rentals will come down and that will further bring down the property rates at a faster pace. It is difficult to predict anything right now,” he says.

As of now, he would only like to advise his clients to look at rentals at a much lower level than last year and wait out the current market situation with older tenants.

Sourc : http://www.thehindubusinessline.com/iw/2009/04/19/stories/2009041950551500.htm

Real estate down but not out

NEW DELHI: If you go to a property broker as a buyer, he’ll quote high. But haven’t prices fallen? Nah, he’ll say, only marginally. Go to him as a  seller and he’ll tell you it’s a depressed market and quote a ridiculously low price. So, which is true?

A bit of both, actually. Property prices are down but haven’t really crashed. Not yet and not at least in metros such as Delhi and Mumbai. But new properties on a city’s periphery are going relatively cheap — often by as much as 25-30% than the asking rate three months ago.

Developers are throwing in sops other than lower prices to get buyers interested. Some are even offering the undertaking of another rebate if prices fall further. They say the fish is finally beginning to take the bait – buyers have started coming in the past couple of weeks.

So, can prices fall any further? Perhaps, by another 5-10%, but there’s no crash coming. At least, that’s what real estate consultants say.

Anshuman Magazine, managing director of CB Richard Ellis, South Asia, says, ‘‘Actually, the property market could be bottoming out, particularly for new apartment projects”. But how are developers able to cut prices? Partly by cutting the fat profit margins that the real estate industry had got accustomed in the last four years and partly by sleight of hand. Market trends in the last couple of weeks suggest there is demand if developers sell their apartments for 25%-30% less than the going rate in the area.

Source : http://timesofindia.indiatimes.com/Business/India-Business/Real-estate-down-but-not-out/articleshow/4419198.cms

BPTP to develop build-to-suit corporate office for MNC

NEW DELHI: Real estate developer BPTP is in serious discussions with a third party to develop a build-to-suit corporate office for a leading  multi-national company (MNC) in the first phase of its Noida project. Spread over 3 lakh square feet, the nature of the building is expected to be a green rated one.

The developer, however, refused to divulge any further information about the MNC. “The discussions are still on. We will not be able to offer any more details on it right now,” said Sudhanshu Tripathi, director, BPTP.

Apart from this complex, the developer has plans to build an office space spread over 3 lakh sq ft for sale in the market. “This complex will be built by us and sold in the domestic market. The corporate office building will be leased to various insurance and telecom companies. The cost of construction for this complex will be roughly Rs 60 cr to Rs 80 cr,” Mr Tripathi added.

The developer had earlier announced plans of building a five-star hotel on the plot in the first phase. Besides the hotel and the office spaces, a high-end mall covering 1.5 lakh sq ft will also be coming up to meet the retail requirements of the hotel as well as the commercial complex.

The mall is expected to house top brands and a revenue sharing model will be operational here.

Both the office complexes in the first phase are expected to be completed by mid 2011 with a total cost of construction around Rs 700 cr. The second phase of the project is currently in advance stages of negotiation. The developer had retained 25% of the 95-acre commercial plot in Noida that it had won in a bid in 2007. It now owns 22 acres of the said land.

Source : http://economictimes.indiatimes.com/Economy/BPTP-to-develop-build-to-suit-corporate-office-for-MNC/articleshow/4419288.cms

Pune’s eastern belt making a mark

The eastern section of Pune has been slow to develop compared with the west, but in terms of potential, this section is coming into its own, say developers.

The Mula Mutha river cuts Pune into two equal halves, with the western part comprising Aundh, Baner, Pashan, Balewadi and Bhavdhan, and the eastern belt, Kalyani Nagar, Vimana Nagar, Nagar Road and Kharadi.

Residential demand

With the creation of IT corridors, the western quadrant has emerged as an IT hub. This, in turn, has been driving the residential demand in the past few years, and the trend is expected to continue.

With the development of the World Bank-funded Nagar Road, residential demand is expected to grow further.

However, the eastern section too is making its mark. According to Mr Ravi Varma, President, National Association of Realtors, India, the eastern corridor of Pune has been witnessing gradual development over the years.

The locations such as Kalyani Nagar, Viman Nagar, Kharadi have been attracting investors, both in the commercial and residential segments, over the past few years. “The fast-paced development in Kalyani Nagar began in 2001 when about 1.2 million sq.ft was taken up by HSBC for its operations.

“This was soon followed by Marigold, a residential retreat,” he said.

Kalyani Nagar is a well developed multi-user locality. Viman Nagar will catch up in the next couple of years and is following the development pattern of Kalyani Nagar.

The development is happening both in the commercial and residential space and a few malls are also coming up.

“Kharadi will take another five years to develop like its other counterparts,” he noted. Kharadi was a small town with 50-60 houses.

First expansion plan on this side of town started with Chandan Nagar.
Upcoming area

Key developments in Kharadi started about five years ago. Basic developments such as roads, electricity and water supply is happening, though more needs to be done. Most of the land in Kharadi has been purchased by builders and hardly 20 per cent is currently available with local farmers.

According to the industry, Kharadi is an upcoming and promising area in Pune as it is the access to Hadapsar, Koregaon Park and Mundhwa. In short, Kharadi is becoming a central location of the east zone. IT companies, special economic zones and availability of plots are some of the factors that are attracting builders towards Kharadi.

Most of the builders have already built up their land banks and as soon as the demand for buildings arises, the builders will begin construction, they said.

Mixed development

Mr Atul Goel, Managing Director, Goel Ganga Group, pointed out that the development in the eastern belt of Pune is a mix of commercial and residential complexes.

Looking at the current rates in these locations, Mr Ravi noted that in Kalyani Nagar, the rates range from Rs 4,000 to Rs 9,000 per sq.ft for residential, and from Rs 10,000 to Rs 15,000 for commercial.

In Viman Nagar, it is Rs 2,200-3,300 per sq.ft for residential and Rs 6,000-12,000 for commercial.

In Kharadi, the residential rates are Rs 2,200-3,000, but one could also buy a bungalow for Rs 1 crore.

Source : http://www.thehindubusinessline.com/iw/2009/04/19/stories/2009041950571500.htm

Mumbai-based Litolier opens Five-Star Hotel in Delhi

Mumbai-based Litolier Group, which opened a boutique hotel ‘Ramada Plaza’ here Friday, said it would enhance its presence in the hospitality sector by building two more five-star properties in next few years. The group will develop two hotels in Mumbai and Goa under a joint venture with a foreign hospitality major. “The Mumbai hotel will be on the Andheri-Kurla road near the airport,” Litolier Group director Ashok Mittal told reporters.

“We are in talks with several foreign five-star chains, but nothing is finalised yet. The land for the Goa property has already been acquired,” he added. The group plans to build both properties under an equal-partnership agreement. The 419-room Ramada plaza, built at a cost of over Rs.100 crore, stands where the erstwhile Ashok Yatri Niwas stood-once owned by India Tourism Development Corp (ITDC). The property was divested by the government in May 2002 and purchased by promoters of Litolier group for Rs.45 crore. The Ramada brand belongs to Wyndham Hotels, one of the world’s largest lodging franchiser.

Source : http://www.indianrealtynews.com/hotel-industry/mumbai-based-litolier-opens-five-star-hotel-in-delhi.html

Realty projects in NCR to be delayed due to sluggish rentals

NEW DELHI: A host of under-construction projects in the capital and the NCR are likely to get delayed by over an year or may be ceased completely  due to drop in rental demand, global real estate consultant CB Richard Ellis said on Sunday

“Several under construction projects are expected either to be delayed by over 12 months or halted for lack of leasing,” a CB Richard Ellis report said.

The year 2009 is expected to be challenging with credit turning tight, buyers disappearing, higher expectations in terms of ‘better deals’ and sluggish business models across sectors, the report said.

The Central Business District (CBD) of Connaught Place witnessed enhanced levels of second hand space as a result of tenants relocating to more cost- effective destinations, it added.

The average rental in CBD has declined to Rs 285 per square feet from December 2008 to Rs 245 per square feet in March 2009.

The report observed, with more malls becoming operational in the Saket District Centre, basic infrastructure, which was already undeveloped in the first place, is getting increasingly stretched due to enhanced traffic flow, poor access roads and insufficient parking space, all have added to the infrastructure woes. MORE

With the IT and financial sector facing the heat of the economic downturn, the real estate activity in Gurgaon continues to be slow. Gurgaon is a hub of IT companies.

Noida, another suburb of Delhi has been hit with low transaction activity.

The CBD of Nariman Point, Mumbai has witnessed a significant correction in rentals over the last 6-9 months, taking the vacancy rate to around 15 per cent, it said.

Further, the ongoing Mumbai Metro project and ensuing traffic congestion has further subdued client sentiments, thus lowering the attractiveness of this location for corporate occupiers.

The low demand levels in the Mumbai suburbs are expected to ensure that values in this micro market remain under substantial pressure.

With the general slump in demand and an increasing number of organisations exploring alternate locations, the vacancy levels (filling up of commercial space) are likely to increase in the medium term with further expected decline in rental values, the report added.

The report predicts a similar market outlook as Mumbai for the Bangalore city, “In line with the major cities across the country, demand levels are not expected to improve appreciably in the near term and a further drop in rental and capital values may be expected.”

The suburban and peripheral micro markets in Chennai are expected to witness further pressure on rentals in the coming quarter, the rental values are expected to undergo further correction, the report said.

The gap between demand and supply is expected to remain wide over the next few quarters and all relevant micro markets are expected to further correct in the short to medium term.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Realty-projects-in-NCR-to-be-delayed-due-to-sluggish-rentals/articleshow/4421261.cms?curpg=2

Oversupply may bring down Mumbai office rentals

NEW DELHI: For the first time in the past five years, Mumbai’s commercial real estate market is headed for an oversupply with a total of 16.02  million sq ft of new commercial office space expected to enter the market in 2009. However, demand has been dipping steadily.

According to property consultancy Jones Lang LaSalle Meghraj (JLL-M), the demand for office space has dropped 60-80% compared to the peak period from late 2005 to early 2008.

Some parts of the city had seen rental appreciation of over 100% during the period on the back of demand from the banking, financial services and insurance (BFSI) and IT/ITES sectors.

“Rentals are set to go down a further 20-25% in Mumbai owing to the mismatch in supply and demand. BFSI, which generated the most demand for the Mumbai market, has been hit the most in the recent times,” said Vivek Dahiya, CEO of property consultancy GenReal.

A JLL-M report ‘The Slope of Descent’ says: “The BFSI and IT/ITES sectors — the most prominent office space occupiers in the country — have been adversely affected in the economic downturn. The BFSI sector suffered globally with the collapse of major US and UK banks resulting in many financial corporates putting their expansion plans on hold. BFSI demand for office space in India’s business districts fell in 2008, and it is projected to remain sluggish in the short term.”

The mismatch for many years has been on the supply side that has been reversed now. Throughout 2006-08, Mumbai thrived on new companies coming in. A number of investment banks, management consultancies, private equity firms and others, who entered the Indian market, wanted to take up space in the financial capital of India, mostly south Mumbai. “The only demand that is there in the market today is from the non-BSFI corporate segment,” said Kaustuv Roy, executive director at Cushman & Wakefield.

The first quarter of 2009 saw a total supply of 2.47 million sq ft of new space in Mumbai, of which the total absorption of space is only 35%. The total absorption was only 896,454 sq ft. Rentals have been steadily falling in most major micro-markets of Mumbai.

Rentals in Nariman Point are down 13% compared to last quarter and about 30% down compared to a year-ago.
Worli, Lower Parel, Bandra Kurla Complex and Andheri-Kurla are the worst-hit, with rentals declining by 38%, 39%, 27% and 33%, respectively, over the last one year.

This is the best time for businesses to relocate to locations that offer lower rentals and bring down operating cost. “There is some leasing activity going on, but only for the price conscious that is mainly for relocation. The business expansion demand has completely dried out in the city,” said Aniruddh Wahal, national head, strategic occupier services at JLL-M.

Source : http://economictimes.indiatimes.com/Personal-Finance/Oversupply-may-bring-down-rentals/articleshow/4411981.cms

Homebuyers seek discount up to 35%

MUMBAI: Stamp duty and registration waivers, free lifestyle home or modular kitchen, or free parking are all passé. An average reduction of 20-35% from the peak property prices has become the order of the day. Buyers are no more interested in freebies. Unless developers are willing to reduce prices to affordable levels and promise timely delivery, homebuyers are likely to be nonchalant towards the sector.
Maharashtra Chamber of Housing Industry (MCHI)’s recently held four-day property exhibition in Mumbai saw 17% increase in footfalls compared to the response last year. This shows that there is enough demand still lying to be tapped. “We are highly encouraged by the overwhelming response to the exhibition. The attendance of quality home seekers on all four days and their interest in the property show indicates the unsatiated demand for housing in Mumbai and the state,” said Pravin Doshi, President MCHI.

Altogether 1,200 properties by over 80 real estate developers were put up for sale with 15 housing finance companies present to meet buyers’ needs. Most of the projects offered were in the mid housing segment and located mainly between Bandra-Borivali and Thane-Mulund. One must not forget that such exhibitions are not really the point of sales for something personal like a home.

Out of the total projects on offer, most of them were 2 BHK flats, that too in Bandra-Borivali region. Almost all 1BHK flats were located either beyond Borivali or in the Thane-Mulund region. In fact, not many 1 BHK flats were being constructed in the area between Borivali and Bandra. Even if they are being built, customers are shying away from under construction projects.

However, affordability continues to be the main concern. It was observed that flats in the range of 550-750 square feet priced between Rs 20-50 lakh had huge customer interest.

Source : http://economictimes.indiatimes.com/Homebuyers-seek-discount-up-to-35/articleshow/4409185.cms

Metro rail, realty attracting maximum investment: Assocham

New Delhi (PTI): Metro rail, sewerage and real estate are the top areas attracting maximum investment in the infrastructure sector in metros across the country in the last six months, industry body Assocham said.

In the last six months metro rail attracted investment worth Rs 34,038 crore followed by sewerage (Rs 21,434 crore), real estates (Rs 15,170 crore), hospitality (Rs 13,010 crore), SEZs (Rs 10, 500 crore), transport (Rs 6,283 crore ), roadways (Rs 5,819 crore) and water supply (Rs 5,757 crore), it said.

Construction of metro rail is being carried on three cities including Bangalore (Rs 6,395 crore), Delhi (Rs 8,118 crore) and Mumbai (Rs 19,525 crore), it said.

Mumbai has attracted the highest amount of investment of Rs 16,694.67 crore in the sewerage segment followed by Chennai (Rs 1,588 crore) and Bangalore (Rs 1,354 crore), the chamber said.

Assocham President Sajjan Jindal said the Indian metros continue to be the favourite destination for real estate development.

Bangalore is the frontrunner in terms of real estate projects planned for the metros with the investment estimated at Rs 7,990 crore, it said, adding that Hyderabad with projects worth Rs 4,050 in the realty space in the second spot.

Source : http://www.hindu.com/thehindu/holnus/006200904162031.htm

PE investors eyeing distressed property deals

MUMBAI: Foreign private equity investors are eyeing the Indian real estate market to buy properties from small and mid size developers badly hit by EMIs and tenure

A clutch of big investors from the EU and Middle East are expected to invest $400-500 million in distressed land deals. These include Spain’s Nova Capital; Germany’s SachsenFonds, Qatar based Barwa International and Al Aqueela, UK’s Matrix Partners and Aberdean International.

“In the next six months, we will see lot of distressed real estate deals in India. Small and medium developers with turnovers in the range of Rs 50 crore-Rs 250 crore will be forced to go for distress sales to sustain themselves in the economic downturn,” said YEN Management Consultants managing director, Sunil Shirole, who has been approached by such developers.

Small and medium size developers across the nation are said to be stuck with 5-6 projects on average as demand has been sluggish. They plan to sell 40 per cent of the existing projects at a discount of 25-40 per cent of the original price to fund rest of their projects.

Shirole said, “We could see 50 per cent of total real estate market coming under distressed deals. As foreign PE players have the liquidity and staying power, after buying such properties, they can wait 4-5 years or till such time the property market rebounds to sell them at higher price.”

However, the outcome of general election can play spoilsport. “A stable government is a prerequisite to these foreign investors. If there are frequent changes at the Centre, they might turn their back for another five years,” cautioned Arun Goel, CEO, DHFL Venture Capital India.

Source : http://economictimes.indiatimes.com/PE-investors-eyeing-distressed-property-deals/articleshow/4413577.cms

Real estate investments picking up in metros: ASSOCHAM

ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development

Even though real estate has been the worst victim of high cost economy, especially after the meltdown set in, yet it’s share in total private sector infrastructure investments in the metros in last six months works out to be 12%, followed by 10.26% in hospitality, says an assessment of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

However, metro rail projects accounted for maximum of 27% share in total money injected in metro cities for infrastructure development under central, state, local government including corporates. Sewerage and solid waste management investment in the Tier I cities constitute the major chunk of investments, specifically via government mode. Mumbai (Rs166.94bn), Chennai (Rs15.88bn) and Bangalore (Rs13.54bn) are the major recipients of sewerage related investment. In percentage terms, it works out to be 16.90% of total infrastructure investment.

In a statement, ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development. The real estate projects constituting residential as well as commercial projects, have pocketed investment worth Rs157.10bn. The southern twin cities of Bangalore and Hyderabad have enjoyed maximum attention of the real estate developers.

The Karnataka capital, Bangalore is the frontrunner in terms of real estate projects planned for the metros with the investment estimated to be  Rs79.90bn. Hyderabad at second place among all the cities, has bagged projects worth Rs4050 in realty space. With India being placed as versatile tourist destination across the world and steep rise in tourists arrival in India in past few years, hospitality has been considered as a crucial part of a well-developed infrastructure for the metro cities.

Chennai has come into front run in terms of funds directed towards construction and renovation of hotels. Investment of Rs40bn is being planned to infuse in constructing a five star hotel by ITC Industries in Chennai. Jindal said that as the Tier I cities in India are working out hard to offset the huge pressure on their existing infrastructure, it is the metro rail projects which have been the key driver of the infrastructure investment in these cities with metro projects costing Rs340bn.

The Study is based on the ongoing projects of central and state governments and those announced by private sector in last Six months. Six metro cities taken in the study included Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. The key challenges faced in the metros include transportation and water supply.

In transportation sector, other than metro rail, Rs62.83bn are being pooled in, accounting for 5% share. Roadway projects in the Tier I cities which include bridges, ROBs, highways and expressways, have been allocated Rs58.19bn. Water Supply projects, primarily being undertaken by the central government under Jawaharlal Nehru National Urban Renewal Mission, have absorbed Rs57.57bn investment with 4.54% share.

Source : http://www.indiainfoline.com/news/innernews.asp?storyId=98942&lmn=1

Leela Open First Hotel in Northern India

One of India’s finest luxury hotel groups, The Leela Hotels, Palaces & Resorts recently marked the soft opening of its first property in northern India. Part of an upscale, mixed-use development in New Delhi’s newest satellite business and shopping district, The Leela Kempinski Gurgaon, Delhi (N.C.R.) has 322 luxuriously-appointed guest rooms and suites and will soon open 90 one-, two- and three-bedroom Residences.

A showcase of Indian contemporary art matched with all the latest advanced technology, the property has four restaurants – one boasting six open kitchens – serving Indian, Italian and international cuisine, a 20,000-square-foot spa offering Ayurvedic treatments, a state-of-the art fitness center with yoga and aerobic studios, a large heated outdoor pool, 26,900 square feet of banquet and meeting space, a Cigar Lounge and a 24-hour business center. Curator Rajeev Sethi has filled The Leela Kempinski Gurgaon with striking sculptures, modern photography and paintings by contemporary Indian and international artists under the theme “evolution.”
A 15-minute drive from the Indira Gandhi International Airport and just over the Delhi-Gurgaon border on the edge of the Rajokri green belt, the hotel adjoins a luxury shopping and entertainment center, the largest in India. Nearby are business parks with tenants such as General Electric, IBM, Oracle, Microsoft, Siemans and American Express. Leela’s first managed property is the only one in the region offering comprehensive solutions for today’s luxury living.
The Leela Kempinski Gurgaon was designed by the internationally-acclaimed Hirsch Bedner & Associates in a modern minimalist style. The expansive rooms (484 to 559 square feet) and huge suites (818 to 3,616 square feet for the Presidential Suite) have LCD televisions with Blue Ray players, Bose iPod docks, high-speed Internet with 6mbps, Wi-Fi, IP phones and advanced security systems. King and twin beds come equipped with ergonomic mattresses, the marble baths are outfitted with large soaking tubs and rain showers and some rooms have terraces. The Royal Club offers its guests a private lounge and personalized butler service on two floors.
Commenting on the management collaboration, Capt. C.P. Krishnan Nair, chairman, The Leela Palaces, Hotels and Resorts said, “It is a momentous occasion for us to have the first Leela hotel in north India. Our management alliance with Ambience Group, headed by the well-known Raj Singh Gehlot has been an important milestone in the group’s expansion plan. At The Leela Kempinski Gurgaon, Delhi (N.C.R.) our patrons and guests will experience the same distinguished hospitality as experienced in other Leela hotels.”
The Leela Palaces, Hotels & Resorts has an ambitious expansion under way. With five properties operational, three more hotels opening this year and next, and plans for three more, The Leela aims to be a major force in the Indian hospitality industry with a presence in the country’s major resort and business destinations.
At the opening, Raj Singh Gehlot, chairman, Ambience Group said, “we are delighted to join hands with The Leela and to bring the experience of the foremost Indian hotel group to the city of Gurgaon. The hotel is among several other key luxury projects at Ambience Island. The addition of The Leela Kempinski is an integral part of this mixed-use complex, qualifying the Ambience Island as a luxury destination for residents, visitors and guests.”

About The Leela Palaces, Hotels and Resorts
Hotel Leelaventure Ltd. operates The Leela Palaces, Hotels & Resorts in Mumbai, Bangalore, Goa, Kovalam (Kerala), Gurgaon and soon Udaipur. Located in key business and leisure destinations, and charting a pan India presence in the near future, The Leela Palaces, Hotels & Resorts are a blend of aesthetic sensibility, modern amenities and truly reflect the essence of India. New hotels will soon open in Chennai (2010) and New Delhi (2010); with future plans to develop hotels in Agra, Hyderabad and Pune. The group has marketing alliances with Germany based Kempinski (Hoteliers since 1897); US based Preferred Hotel Group and are members of Global Hotel Alliance based in Geneva, Switzerland.

Source : http://www.travelvideo.tv/news/uncategorized/04-15-2009/leela-opens-first-hotel-in-northern-india

Kolkata residential projects back in demand

The real estate sector is finally showing signs of revival, on the back of an increasing investment in the residential segment.

Property developers are of the view that there has been a significant improvement in demand in the last couple of months, and at lease one has increased prices in the last one month.

Pradeep Chopra of PS Group, said he had increased prices for one of its projects by Rs 200 per square feet to Rs 1,899 per square feet in the last one month.

Several real estate developers are also planning to launch new projects, which they have been holding for the last six months, which could be seen as a manifestation of demand revival.

“The demand for residential projects has started picking up, and the worst is probably over for the real estate sector. Property prices should look up in the coming months,” said Chopra.

P S Group is planning to launch two new residential projects in Narendrapur and Rajarhat by May this year.

Harshvardhan Neotia, chairman, Ambuja Realty, also agreed that demand for housing projects had started picking up since last month.

Property prices in Kolkata and its fringes has seen a correction of almost 25 per cent in the last six months.

Santosh Rungta, president, Confederation Of Real Estate Developers Association Of India (Credai), said, “The real estate scenario is now taking a turn for the better, not only in the eastern part, but across the country. For instance, in Mumbai, there are reports that one developer could sell 700 flats in just two days.”

However, the demand for commercial and retail projects are yet to see a pick-up, and the segments are still reeling under the pressure of economic meltdown. Also, rising cost of cement has been a cause of concern for the developers, though the rise has been partly set-off by falling metal prices.

Pradeep Sureka of Sureka Group said, “In the last two months, demand has significantly picked up in the property market. There is no scope for further price correction, as certain raw material prices are still on the higher side. “

Cement prices have gone up by 20 per cent in the last one year, Sureka added.

In the months of October-November last year, several property developers had started advertising freebies to attract customers. However, they are no longer pursuing the strategy.

Eden Realty, which is developing one of the largest housing project in south Kolkata, tried to woo customers by offering free car parking space with flats few months back.

However, the response to the offer was lukewarm, and the realty company was no longer in a position to offer the scheme, admitted Sachchidanand Rai, managing director, Eden Realty.

“We expected selling about 100 flats through the scheme, but could sell about only 32. Now things have started improving and customers’ interest has gone up significantly, which is also translating into sales,” said Rai.

Sensing the need for easier finance, rather than freebies, developers are now focusing on pragmatic tie-ups with banks.

Thus, while earlier, many developers were paying pre-equated monthly installments (EMI) to banks for the customers, under interest subvention scheme, they were now refraining from paying the entire pre-EMI.

Recently, Eden has tied-up with four banks– State Bank of India (SBI), IDBI, Bank of Baroda and HDFC– under its “Empowerment ” scheme.

“The scheme is a refined version of the interest subvention scheme, in keeping with the concerns of the banks as well as customers,” said Rai.

The scheme, though not much different from the interest subvention scheme, involves a15 per cent down payment of advance by the customer, against which Eden would receive the sanctioned home loans in tranches, based on actual completion of the project. This would reduce the burden of the pre-EMI on developers, as payments would be based on the project completion, Rai said.

Chopra of P S Group also said, “Pre-EMI was not a profitable option for developers, as pre-EMI sometimes constituted even up to 70 per cent of the EMI, which was payable only when the project is up for possession.”

Source : http://www.business-standard.com/india/news/kolkata-residential-projects-back-in-demand/355217/

Luxury fails to sell

Developers are finding it difficult to push high-end apartments, villas and stand-alone bungalows; even enquiries have dropped by over 60 per cent

Demand for luxury and high-end residential projects, which were the business drivers for developers during the real estate boom, have taken a beating, due to the economic slump that has hit the sector.
Luxury homes come as apartments or villas with golf courses, swimming pools, Jacuzzis, terrace gardens and personal plunge pools. Such houses are priced at a minimum of Rs 2-3 crore, and could go up to as high as Rs 10-15 crore, depending on the location. They generated healthy profit margins for developers when the real estate sector was booming. But after the slowdown, developers are finding it increasingly difficult to push the luxury lifestyle units. Moreover, enquiries for premium homes have plummeted by more than 60 per cent.
“Industries across sectors have witnessed a slowdown. The real estate sector is no exception and there has been a cascading negative impact on customers’ sentiment, forcing them to either defer investment or reduce the investment bracket, given the present liquidity positions. This has, in turn, led to a paradigm shift in customers’ attitude – they prefer basic amenities to luxury,” says Pradeep Jain, chairman of Delhi-based Parsvnath Developers.

Sector watchers say the overheated real estate bubble actually burst because of speculation by developers over the demand for luxury, premium products.

Says Avneet Soni, adviser to chairman and managing director of another Delhi-based developer Omaxe, “Investors, who were cashing out ahead of a possible softening, have exited the market. The segment is now seeing only genuine buyers.”
Some feel that though the numbers have come down, demand is still there.
“The need or want to upgrade is still there, but market sentiment in this segment is weak. Consumers are still waiting for prices to drop in this bracket,” says Kumar Gera, president of Confederation of Real Estate Developers Association of India (Credai).
After the slump, real estate prices have corrected by an average of 25-30 per cent across segments.
Demand for housing in India is expected to touch 7 million by 2012-2013. The affordable housing segment is expected to account for 80 per cent of this demand.

Affordable mantra

As the luxury segment is not generating enough business and the industry is reeling under liquidity crisis, developers have entered the affordable housing sector to push up volumes. So much so that even themed premium projects are being included in this new segment. Even top developers such as DLF and Unitech, who had planned to spruce up their bottom lines through sale of luxury properties, have all jumped on to the affordable housing bandwagon.

Offering sops

Meanwhile, in order to push sale of luxury homes, developers are offering freebies and organising property fairs to liquidate stock. Though most developers are unwilling to go on record admitting the extent of slump in this segment, property consultants say that the high-end units would have to be pushed. “Lowering the bar for entry-level players has definitely resulted in more interest in the segment,” says K Sudarshan, chief operating officer of Bangalore-based Ozone Group.

Adds Anuj Puri, country head and chairman of Jones Lang LaSalle Meghraj (JLLM), “The residential market should recover by mid-2010 although near-term demand is expected to be muted, given a weak job market. Offtake for new launches, priced at Rs 2,000 per sq ft levels, remains one of the key data points to watch out for, over the next few months.”

Developers are now eyeing high net worth individuals (HNIs) and non-resident Indians (NRIs) to push the segment.
“HNIs are still interested. The dollar-rupee ratio plus lower rates for the premium segment make it an attractive proposition for NRIs,” says Farook Mahmood, president of National Association of Realtors. For NRIs, the “international look” and privacy offered in scenic settings is still a crowd puller, he added.
“Having projects in locations that are attractive for NRIs is the key,” says Ravi Ramu, director of finance at Bangalore-based Puravankara Developers.

However, according to Credai officials, the premium residential segment would pick up once customer confidence returns and that could happen in the next six months.
Other developers are pinning their hopes on the shortage in housing expected in the future. Says Kumar Mordani, director of Man Infraprojects, which recently launched a high-end residential complex in Mumbai, ”Right now, projects are on hold due to financial constraints faced by developers. This will lead to shortage by 2011. By that time, our project would be completed and we expect units to move.”

Source : http://www.mydigitalfc.com/real-estate/luxury-fails-sell-819

IndiaProperty launches IndiaPropertyBase.com

IndiaProperty.com, India’s No.1 property portal from Consim Info (formerly known as BharatMatrimony Group) today launched IndiaPropertyBase.com – a comprehensive builder directory featuring over 1000 renowned builders across the country.

Being the first property portal to launch this builder’s directory online, it offers a unique opportunity for customers to know about the builders and their projects. IndiaPropertyBase offers all the information customers would like to know about the builder starting with complete builder profile, complete builder history, verified contact details, interviews & videos and project details of the past and present.

Mr. Murugavel Janakiraman – Founder & CEO Consim Info, says,” We at IndiaProperty conduct researches at regular intervals to understand the need of our customers. Knowing about the builder is one of the most critical factors influencing their decision in buying property. Based on this insight we have launched IndiaPropertybase.com, which provides reliable and relevant information on properties. IndiaPropertyBase will highlight every minute detail in the real estate sector and will serve as a perfect guide to our customers”.

Source : http://www.webnewswire.com/node/451376

CREDAI to Appeal for Removal of Service Tax on Rentals

Confederation of Real Estate Developers’ Associations of India (CREDAI) clarified its outlook and vision for the Indian real estate sector, at a press briefing held recently. The veterans of the real estate sector discussed various issues, like ‘affordable housing’, ‘public-private partnership and infrastructure development’, ‘finance and banking’, ‘state reforms’, ‘taxation issues’, ‘need to educate home buyers’, having impact on real estate development in India. Credai will recommend the government to remove service tax on rentals of commercial properties, which ultimately add to the burden on consumers. It also proposes to initiate public-private partnership in low-income housing wherein land bank available with the government may be provided to the developers.

Credai intends to form a legal committee, which shall oversee all legal issues pertaining to the real estate sector. The body would pursue the introduction of Value Added Stamp Duty (VAS) for the housing industry, wherein, any stamp duty paid towards the purchase of land will be adjusted from the stamp duty paid at the time of sale of the property. CREDAI also said that it would also continue its endeavour to educate homebuyers and ensure greater transparency and professionalism in the sector. Present on the occasion were members of CREDAI’s newly elected executive committee for 2009-2011. This included Kumar Gera, chairman, Santosh Rungta, president, vice presidents Lalit Kumar Jain, C Shekar Reddy, Prakash Challa, Dharmesh Jain and Getamber Anand, Nainesh Shah, secretary; joint secretaries- Mukesh Sheth and Mohammed Moquim and G P Savlani, resident director, CREDAI.

http://www.indianrealtynews.com/real-estate-developers/credai-to-appeal-for-removal-of-service-tax-on-rentals.html

SEZ developers need time to complete their projects

NEW DELHI: Faced with a severe financial crunch, several SEZ developers have approached the Commerce Ministry seeking more time to complete their projects.

“Some companies have asked for extension of time,” said the Commerce Secretary Mr G K Pillai. Mr Pillai heads the inter-ministerial Board of Approval which clears the proposals for setting up of special economic zones (SEZs) where units are given tax ex emptions.

Export Promotion Council for export-oriented units (EOUs) and SEZ Units Director General Mr L B Singhal said, “It is natural because of the current economic slowdown … demand for space has also come down.”

After each stage of approval – in principle and formal – the developer is given time to proceed and return to the government for final notification. Even after final notification, the promoter gets time to make the SEZ functional.

While Mr Pillai did not disclose the companies approaching the Commerce Ministry for extension of time, sources said developers, mainly from the real estate sector, have put their SEZ plans on the back-burner.

The real estate majors such as DLF, Parsvanath Developers, Rahejas and Emmar have received formal approvals for tax-free enclaves. Several of these projects have been deferred. – PTI

Source : http://www.thehindubusinessline.com/blnus/03141921.htm

Residential Sector likely to witness oversupply

The residential sector, which has already seen a 15-20% price correction in markets across the country this year, is going to witness a significant residential supply over the next 12 to 18 months in two key markets Mumbai and Gurgaon (NCR).

The direct implication of the over supply will be that the rentals will come down drastically which could lead to a further price correction over a prolonged period of time (one to two years).

Says Niranjan Hiranandani, MD, Hiranandani Developers:”There is no over supply in the Mumbai market. In last one month there has been a good sale of apartment as far as Mumbai market goes. There was a short phase and thing are changing. There has been softening of prices, but things will look up from May onwards. This is all a temporary slowdown and the market will pick up.”

Morgan Stanley Research Asia Pacific reveals that in the next few months mid Mumbai micro market will get six to seven lakh million sq ft of residential space as compared to negligible delivery over the last couple of years. In fact the Mumbai market has seen a 50% rental correction in prime areas from Rs 2 lakh for a three BHK in 3Q 2008 to Rs 1.1 lakh now.

Rohtas Goel CMD, Omaxe Group & president Naredco said: “The low sentiments majority of buyers are in wait and watch policy. After the recent price cut by the developers by squeezing their margins to the minimum level and interest rate cut by banks, we don’t foresee any further price correction in the real estate.”

In fact, in many markets, the level of transactions have gone down drastically, which has resulted in this dip. This is also because residential capital values in some micro markets in the metros have shown a negative growth in the last one quarter.

Says Santhosh Kumar, deputy CEO of Jones Lang LaSalle Meghraj (JLLM): “In the current real estate scenario, what is being observed is a stabilization of select markets. A consistent upswing is not possible in any market. When a large level of supply is in the offering. Real estate markets have observed high growth levels in the recent past. However, in certain areas, market stabilization has been observed. This indicates that there are not many buyers for the prices quoted for various real estate typologies at this point of time.”

In various markets, despite a slowdown in demand, essentially from the end-user and speculative investors, developers have refrained from reducing rates. But both in Mumbai and Gurgoan now developers are offering 25% to 30% discount on the market rate. Sales in secondary markets have also taken a beating with very few transactions taking place at relatively lower price points than market expectations.

Source : http://www.indianrealtynews.com/real-estate-india/residential-sector-likely-to-witness-oversupply.html

Slowdown heat melts realty prices in Mumbai

MUMBAI: The heat of global financial slow down seems to have melted the real estate prices in the financial capital of the country, as the developers slashed the prices of properties to a record low.

During past few years, the real estate prices had swelled up to the maximum levels in metros and several other cosmopolitan cities. However, according to experts the price rise was artificial and temporary. The boom in the real estate sector caused immediate spurt in the prices of the construction related commodities including cement, steel and ceramics. But with real estate prices cooling off in recent times, the cascading effect was seen in the construction related commodities.

However, in the wake of the general election, the government infused huge funds for infrastructure development projects in the country. This gave some strength to the falling commodity prices, but the government support could not give a hold to the falling realty prices in the metros.

In an exhibition held at Mumbai by Maharashtra Chamber of Housing Industry (MCHI), the developers were offering apartments at 25-35% lower prices than the peak price. More interestingly, few developers were also selling residential apartments at 30% lower than the peak prices which were nearing completion.

In the commercial office space as well, few developers were offering at price points which were 25% lower than the peak prices.
There was a consensus that in the last 2 months volumes have improved due to new project launches at competitive prices. However, we believe this could be called a trend reversal (in terms of volumes and not pricing) if such encouraging volumes continue for the next few quarters as well.

However, developers opined that there had been better response than the in October 2008.

Amongst the listed space, DLF, Unitech and HDIL have launched residential projects at competitive prices in the last two months. With loan restructuring for most of the companies now over, investors will focus on the interest servicing capabilities of the companies.

However, leading realty stocks witnessed a steady rise in the stock prices. DLF Ltd and Unitech Ltd gained by over 40% during past one month, while HDIL Ltd surged by whopping 53% from its monthly low of Rs.63.45 during mid-March to Rs. 137.65 recently.

Source : http://www.commodityonline.com/commodity-stocks/Slowdown-heat-melts-realty-prices-in-Mumbai-2009-04-14-16883-3-1.html

Housing Expo: high footfalls, few takers

Mumbai Buyers say prices too high, wait for a further correction in rates Going by footfalls — around 50,000— at the four-day property exhibition of the Maharashtra Chamber of Housing Industry (MCHI) that concluded on Sunday, it was a success. But the actual transactions were not encouraging.

Over 57% of projects displayed by 80-odd developers at the largest housing exhibition in the country, were that would be ready only after March 2010, states a report by the stock broking company Centrum Research Estimates.

It says, “Although each stall got a high number of enquiries, buyers were reluctant to go ahead with any purchase owing to prices remaining unaffordable and possession dates of comparatively lower-priced projects ranging from 24 to 36 months.”

In an opinion poll by the company at the exhibition, most people said that in view of job insecurity and salary cuts they are waiting for a further 20% price correction. The report terms the Mumbai real estate market as the ‘slickest’ as compared to the National Capital Region, Bangalore and Chennai which have seen prices plummet by 30-40%, property prices in Mumbai have fallen only by 15-20%. “The common refrain was that developers were holding on to unrealistic prices. Around 70% of buyers said they would wait for another correction of 20% before buying.”

Another interesting trend observed is that 75% of the projects at the exhibition were offered at an earlier exhibition in October last pointing to little or no off-take in residential volumes since then. It predicts that a further 15-20% correction until June 2009 is imminent and that that transaction volumes in Mumbai will pick up from October 2009.

Only select projects are attracting buyers until then. These include that by developers such as HDIL and Ajmera Realty, which are priced 30% lower than the market price. HDIL claims that flats in lucratively priced projects such as Metropolis Residences at Andheri and Premier Residences at Kurla have almost all sold out within a month of launch. Its latest project Galaxy Apartments at Kurla offers 1BHK and 2BHK apartments at Rs 28 lakh and Rs 39 lakh respectively. Similarly Ajmera Realty’s ready-for-possession Bhakti Park project at Wadala is priced at Rs 7,000 per sq ft, which is equal to the rates of flats in the Goregaon-Borivali belt.

The concept of affordable housing is still alien to Mumbai as barely 29% of the projects at the Expo were priced below Rs 40 lakh. Flats in areas like Kurla-Mulund and Bandra-Borivali belt continue to remain high with the average being over Rs 70 lakh. The majority of affordable homes in far-flung suburbs in Thane, Dombivli, Kalyan, Mira Road and Virar. The report states since these areas suffer from power and water shortage, many buyers have said that they would have “to consider more affordable options cities such as Gurgaon, Bangalore, Chennai and Kolkata if prices are not corrected further.”

Drop in residential prices across key micro-markets (in %)
* Napean Sea Road: 18
* Mahalaxmi: 20
* Lower Parel: 15
* Bandra: 20
* Andheri: 14
* Kandivli/Borivli: 13
* Goregaon/Malad: 15
* Navi Mumbai: 30
* Thane: 23
* Pune: 20
* Vasai Virar: 33
* Kalyan:25

Source : http://www.expressindia.com/latest-news/housing-expo-high-footfalls-few-takers/446987/

99acres Introduces Property Search on Mobile

New Delhi, Delhi, India, Tuesday, April 14, 2009 — (Business Wire India)

In an endeavour to ease property search and to make the site device agnostic, 99acres.com, India’s No.1 property portal, has introduced property search on mobile. Launched in partnership with Mobisoc Technology, 99acres.com offers a WAP application for property search that allows users to search properties via mobile. Builders and brokers can check their account and track responses on properties uploaded on 99acres.com.

“We understand that time is of critical value today and responding real time is imperative. Our users, builders and brokers are on the move all the time, which makes it difficult for them to be connected to their PC or laptop. We want to be sure that users can connect to 99acres anywhere anytime and endeavour to make property search effortless and time efficient.” said Vineet Singh, Business Head, 99acres.com.

The advantages of the application are manifold. When users are on the move for house hunting and exhaust the options that were shortlisted, they can connect to 99acres.com through their handsets and search for more properties in that area, thus, saving on time. Listings contain not only the address and specs of the property, it also lists the phone number of the broker/builder thus enabling users to contact and close transactions quickly. Property builders and brokers can access their 99acres.com account on mobile, check responses and can contact prospective buyers/tenants without losing time to get connected to a PC.

Commenting on the launch, Vinish Kathuria, President – Strategy & Business Development, Mobisoc said, “We are excited to partner with 99acres.com to bring Rich Internet Experience to its customers. With 310 million plus Mobile users in India and growing every month, applications like 99acres.com make it convenient for an average user to do some of the things better, especially when he/she is on the move”.

The application is simple and easy to use. To get the application on mobile handsets, users need to sms ‘99’ to the short-code 56300. Alternately, users can feed their mobile number on the link – http://mobile.99acres.com. Within seconds they would receive a sms with a link. Through GPRS connectivity of any cellular services provider mobile users can connect with the link, download the application and get going.

Once installed, users can access the application from ‘Applications’ or ‘my own’ folder on their mobile. The application opens the Main menu screen, which allows users to select an option between search/check/post properties. Users can search for properties on rent and sale by city, budget and property type and select any listing to view property details. Further, a user may call a contact via the application. Builders and brokers who have an account on 99acres.com, can check their account and track responses on properties posted by them.

Soon, the application will also allow builders and brokers to upload properties through the application.

About 99acres.com

99acres.com is the no.1 property portal in India. It was launched by Info Edge, in September 2005, as a gateway to the country’s property bazaar, and an information ‘exchange’ for buying, renting and selling of all types of residential and commercial properties anywhere in the country. The website enables easy access to a huge property bank for netizens and allows for direct connect with brokers/builders in cities in urban and remote parts of India. With properties of almost 8000 builders, 60,000 brokers and 1,00,000 individuals, the portal lists over 300000 properties. The website has a registered database of 3,00,000 users.

About Mobisoc

Mobisoc is a global product company in the Mobile Internet space. It was launched by Spice Group to bring in a revolution in the mobile communications arena. Its technical platform, Mitr, allows for ease of Mobile Application Development across multiple phones, offering Consumer Brands and Enterprises ability to extend the reach of their internet offerings in the Mobile arena.

Source : http://www.businesswireindia.com/PressRelease.asp?b2mid=18685

Irish investors hit by delays in Indian property scheme

HUNDREDS OF Irish investors may be affected by an Indian property scheme that has become mired in delays and confusion.

It is believed that 245 Irish investors bought a total of 294 apartments in two off-plan developments near Delhi in India through Dublin-based investment company Kuvera in the last two years, paying between €34,000 and €42,000 per unit.

According to sources the properties have not been completed and investors have been unable to get clarification as to the whereabouts of their money and whether or not they will get a refund.

Kuvera (which is the name of the Hindu god of wealth) is run by former stockbroker Kieran Murphy. There was no response yesterday at Kuvera’s Dublin offices, and Mr Murphy did not respond to a request for further clarification on the issue.

However, yesterday afternoon he issued a statement to investors to update them on the controversial Orchard View and Mountain View apartment developments in Rudrapur, India, “as far as I can”.

In the statement, he said Irish investors had contracted directly with the local Indian developer, VG Buildtech, when purchasing their properties. “At no time has there been any contractual relationship between the investors and Kuvera (Irl) Ltd,” he said.

He said that Kuvera Properties (India) Ltd is “the management company based in India to oversee the progress of the development and the financing of the development”.

“While in-depth queries have been raised by Kuvera (Irl) Ltd, the required information and clarifications have not been either forthcoming or satisfactory from VG Buildtech or Kuvera Properties India,” he said.

Information currently posted on www.kuvera-india.com describes Kuvera (Irl) as the “sales agent” for VG Buildtech. However, in 2007 it was widely reported that Kuvera had bought a 50 per cent stake in the building company.

Mr Murphy ran the equity sales department of BCP Stockbrokers until 2003 when he co-founded stock market training company Invest Like The Best. He later sold his share in this company to co-founder Rory Gillan, and set up Kuvera.

Last year Kuvera joined the Association of International Property Professionals, the industry watchdog for the international property market, but its membership lapsed in February of this year.

According to one investor who contacted The Irish Times, and who paid €34,000 to Kuvera for an off-plan two-bedroom apartment, it has proved extremely difficult to get any updates on the Indian development in recent weeks, and he feels that he is in a “legal limbo” at the moment.

A meeting of Kuvera investors took place last night in Citywest Hotel, Saggart.

Source : http://www.irishtimes.com/newspaper/finance/2009/0415/1224244720137.html

BPTP is planning to build five-star hotel on Noida property

The plan is to build the hotel before the Commonwealth Games (in 2010) to make use of the tax benefits

New Delhi: Real estate developer BPTP Ltd plans to build a five-star hotel on the land it retained after surrendering a commercial plot in the New Delhi suburb of Noida to the New Okhla Industrial Development Authority, or Noida.

New project: A BPTP construction site in Faridabad, Haryana. Rajkumar / MintThe company is in talks with leading hotel chains for managing the property. The hotel will have 500 rooms and will be priced at “very competitive” rates, said a company official, who didn’t want to be named.
“The plan is to build the hotel before the Commonwealth Games (in 2010) to make use of the tax benefits,” the official said. The deal is expected to be sewn up in two-three weeks.
While the official declined to name any hotel chain, an analyst at a brokerage firm said the company is believed to be in talks with chains such as Marriott International Inc., Radisson Hotels and Resorts, and Intercontinental Hotels and Resorts. The analyst didn’t want to be named.

In March 2007, BPTP won a bid for a 95-acre commercial plot in Sector 94 of Noida, beating rivals including DLF Ltd and Omaxe Ltd. In February this year, because of a financial crunch, the company surrendered the land to Noida, retaining the portion it had already paid for.

BPTP, which had paid about Rs1,300 crore, applied to Noida for retaining about 25% of the land.

BPTP now owns 21.7 acres of land. In the first phase, the company plans to develop 6 acres, which will include the hotel.
“We will invest around Rs600 crore in the first phase of the project,” the company official said. He did not say how the company planned to raise funds for the project.

Source  : http://www.livemint.com/2009/04/13211046/BPTP-is-planning-to-build-five.html

Roadshow by Realtors to woo NRI Bengali’s

City realtors are set to woo the non-resident Bengali community in recession-hit North America with their first “comprehensive” real estate roadshow in that part of the world.

Credai Bengal, the state chapter of the national umbrella body of real estate developers, will hold the realty expo during the North American Bengali Conference (NABC), scheduled for July 2-4 in San Jose.

“We have been going to the NABC every year in bits and pieces, and we felt that doesn’t do justice to the real potential of the city as an investment destination and the wide array of real estate products now available here. Hence the decision to stage a full-fledged show,” says Pradeep Sureka, the president of Credai Bengal.

With fears of job loss and pay cuts casting a pall of gloom over the US economy, many NRIs are seriously contemplating returning to their roots sooner than they had envisaged and this has fuelled demand for flats back home, feels the realtors’ body.

“The NABC is a great opportunity to reach out to the large number of Bengalis settled in the US. More so, since the location is the Silicon Valley this time, a traditional bastion of Bengali IT professionals,” says Santosh Rungta, a senior city developer who has taken over as the president of Credai’s national committee.

Around 10 developers have confirmed participation with a basket of a dozen-odd products, and the Credai Bengal brass is hopeful many more will join the Silicon Valley roadshow, once the marketing for the July event gathers momentum.

“Besides the residential segment, we are also anticipating a large participation from IT infrastructure providers, simply because the show is in Silicon Valley,” adds Sureka. Efforts are on to convince Writers’ Buildings to use this opportunity to underline some of the “core strengths” of the state to the NRI Bengalis in the US.

“Around 4,000 visitors enquired about Indian properties on show at the Dubai realty expo last year. Here, we can reach out to 10,000 NRI Bengalis focused on buying properties in Calcutta,” says Pradip Chopra of the PS Group, the past secretary of Credai Bengal.

Source : http://www.indianrealtynews.com/real-estate-india/roadshow-by-realtors-to-woo-nri-bengali%e2%80%99s.html