DLF plans to make affordable homes

New Delhi: India’s largest developer by market value, DLF Ltd, will now build apartments worth Rs30-50 lakh, a senior official said.

The realtor plans to launch 3-4 million sq. ft of what it called value housing in the current fiscal to March, Saurabh Chawla, senior vice-president, finance, told analysts on a conference call on Friday.

The projects will be located in Chandigarh, Gurgaon on the outskirts of New Delhi and on the fringes of Bangalore, Chennai and Hyderabad.

“Pricing will depend on the location and city, but we are largely looking at this price band (Rs30-50 lakh),” the company executive said on condition of anonymity. “You can’t compete in the market if your products cater only to a certain segment,” the official said, referring to DLF’s product portfolio that largely comprises houses in the Rs50 lakh plus range.

“Value housing will offer a smaller sized unit at prices lower than the premium segment of housing,” said its vice-chairman Rajiv Singh. “It is a lower extension of premium housing… We expect reasonably good money from this segment even when compared with premium housing.”

DLF’s rival Unitech Ltd recently launched a new brand, Uni Homes, which will offer homes in the Rs10-15 lakh range. Other developers such as Puravankara Projects Ltd also have separate brands for so-called low-cost housing.

DLF expects to make a margin of 25-30% from value housing, compared with 30-40% from its other projects.

“Some of the larger developers, who are sitting on land bought at an historical cost, have a competitive edge in the market, which offers them the flexibility to develop products according to the market needs,” said Anshuman Magazine, managing director of real estate consultancy firm CB Richard Ellis.

DLF expects to launch 12 million sq. ft of residential space, including lower priced housing in the second half of this fiscal. In the first half, the firm had launched around 5 million sq. ft of homes.

According to a presentation available on its website, DLF’s net debt has increased from Rs11,686 crore in the three months to June to Rs12,135 crore. In the September quarter, DLF repaid Rs394 crore and borrowed Rs183 crore. The firm added Rs165 crore of debt due to consolidation of land.

DLF Assets Ltd, which buys and holds completed commercial assets of the developer, still owes around Rs2,500 crore to DLF, Chawla said. In the second quarter, DLF Assets would have contributed around 10% to DLF’s revenue, he added. Till December last year, DLF Assets was contributing around 40% of the firm’s revenue.

Source:http://www.livemint.com/2009/10/30223329/DLF-plans-to-make-affordable-h.html?h=B

Royal Palms Launches 4 More Affordable Housing Projects

Royal Palms Estates, Mumbai’s leading developer, has made the festive season even more cheerful by launching 4 more affordable housing projects at Goregaon East with completion dates of 24 months. The move comes in the wake of the tremendous response to the sale of ready possession properties last month with those who were left out urging the company to launch more such projects. In August 2009, the company had announced a sale of ready possession properties – both residential and commercial – @ Rs 3,999/- which had generated sales of over 350 ready possession units worth Rs 90 crore in a span of 9 days.

Royal Palms Estates is a sought after destination in view of the greenery it offers and the close connectivity with Powai and Western Express Highway. The township has developed into a bustling mini-city with not just the golf course for which it has always been known, but also a health spa, recreation club, a lake, a man-made beach, a shopping mall, restaurants, a cafeteria, a shopping village, 5 star hotels, offices and IT parks. All this is in addition to residential properties that also include studio apartments, villas, bungalow plots and row houses. Having delivered close to 1600 residential flats and the same number of offices in its sprawling 240 acre complex, Royal Palms is set to achieve a critical mass of 2500 residential flats and 2500 offices by 2012 which will turn it into one of the most promising locations for stay, leisure, recreation, entertainment, shopping and business.

Says Dilawar Nensey, Jt Managing Director, Royal Palms Estates, “Given the repeated requests by those who felt they had missed giving their families the perfect home during our previous offerings, we have launched four new residential buildings @ Rs 3,999/- per sq ft.”

The new projects are: Ruby Isle Apartment, Diamond Isle Apartment, Crystal Isle Apartments and Palms Island Apartment 4. Between the four projects, the prospective buyer can choose between 1RK (Condos) from Rs.13.19* lacs, 1 bhk from Rs.21.75* lacs, 2 bhk from Rs.31.91 * lacs and 3 bhk from Rs.43.26* lacs depending on the budget. The biggest plus point in these projects is the low ratio of carpet area to the saleable floor space. So effectively, one will find the 850 sq ft to be more spacious when compared to similar offerings in Mumbai. The four projects – having beautiful views – offer a home with all natural advantages and modern infrastructure at a price never before heard of.

Adds Nensey, “Royal Palms is the ideal example of making available modern infrastructure and amenities without disturbing the environment. In fact, with each new project the management at Royal Palms invests more in greenery and environment and ensures a bigger green cover. What’s more, the affordability factor makes it possible even for the middle class to live amidst world class amenities – something which they could only dream of in the past.”

For the harried Mumbaikar, the cool, silent environment is the beginning of the ideal lifestyle which brings everlasting happiness in their lives. The location of Royal Palms at Aarey Road, adjacent to the Sanjay Gandhi National Park makes it an ideal abode as well as a quick getaway for the stressed out Mumbaikars looking for solitude and serenity amidst natural and unpolluted environment.

Source:http://www.equitybulls.com/admin/news2006/news_det.asp?id=62352

BPTP sells Rs 1,600 cr worth housing projects in six months

NEW DELHI: Real estate firm BPTP has sold properties worth Rs 1,600 crore during the first half of the current fiscal from its three housing  projects in Faridabad in the national capital region.

On the back of improved sentiment in the property market, BPTP has sold nearly 7,000 units in these three projects, part of a 1,900 acre integrated township ‘BPTP Parklands’.

“All the three projects are completely sold out. We have sold more than 6,000 independent floors since April in two projects. The company has also sold about 800 premium flats,” BPTP Director Sudhanshu Tripathi said.

The company has earned revenues to the tune of Rs 1,600 crore by selling these units, he added.

Asked about investment on these three projects, Tripathi said it would be close to Rs 1,000 crore. The company would complete these projects within two years.

He said the end-user demand for affordable housing have increased over the last six months and this reflects in the number of units that company has been able to sold between April and September.

“Developing independent floors is cheaper by about 40 per cent than constructing high-rise buildings, which we passed on to the customers,” Tripathi said.

Besides, he said the Haryana government’s recent decision to allow separate registration for independent floors resulted in higher sales.

Other real estate developers, including DLF, Unitech, Jaypee Greens, have also reported robust sales in their housing projects.

Source : http://economictimes.indiatimes.com/markets/real-estate/news-/BPTP-sells-Rs-1600-cr-worth-housing-projects-in-six-months/articleshow/5136168.cms

Low-cost flats to boost demand in real estate sector

Affordable housing seems to be the flavour of the day. This is not just among salaried class, real estate players on the ground too visualise fortune in building low cost flats.

A survey on current scenario on country’s real estate sector reveals that 34 per cent of demand in residential segment is in the price bracket of Rs 5-15 lakh; 26 per cent in the bracket of Rs 15-25 lakh; 22 per cent in the range of Rs 25-40 lakh; 12 per cent in the range of Rs 35-50 lakh. In luxury house segment with properties costing above Rs 50 lakh the demand level is just six per cent, the Ficci survey shows. Interestingly, the survey reveals that parking funds in affordable housing projects has emerged as safest bet for developers followed by developing demand based commercial spaces. Special Economic Zone (SEZ) and retail segment are expected to be the least preferred asset class to drive the sector towards recovery. Although real estate sector has started to show some signs of revival a majority of the industry experts expect the residential segment to recover by the end of 2009 with a 25-30 per cent renewal in demand. The commercial segment expected to pick up after the third quarter of 2010.

Realotrs believe that retail segment will revive only marginally by end of 2009 by approximately 10-12 per cent rise in demand and will recover only by the last quarter of 2010. Developers now seem to concentrate on high volumes and lower margins as against low volumes and higher margins and have shifted focus towards affordable housing segment, the survey reveals. As per the findings the stimulus packages and interest rate cuts have to an extent eased accessibility for bank finance for the developers. However, banks are still cautious in lending and prefer lending for projects nearing completion to lower risk.  Most respondents feel that there is an urgent need for a real estate regulator (RER) that would not only act as a nodal agency for all real estate developments but also quell the concerns of consumers as well as the real estate industry as a whole.

The Ministry of Urban Development has already floated a Discussion Paper in the public domain on the need for setting up a RER.

Source:http://www.deccanherald.com/content/29872/low-cost-flats-boost-demand.html

Omaxe to invest Rs 15 billion on new projects; decides on price rise

New Delhi:Real estate developer Omaxe Ltd. is set to launch its four new projects over the next two months and may also raise the prices this fiscal year.

The demand of the real estate is on rise but omaxe is hell bent on price hike. The company will invest Rs 15 billion on the new projects. The revenues expected from the project hovers somewhere around Rs 23 billion over 30 months. India’s real estate market has registered a sharp from earlier this year.

Much of the demand is hoped to come from middle-income and affordable housing.

Source:http://www.samaylive.com/news/omaxe-to-invest-rs-15-billion-on-new-projects-decides-on-price-rise/659463.html

Builders use flexi model to sell homes

Bangalore: Real estate developers are learning the virtues of flexibility as they slow down large residential and commercial projects to assess consumer response and make adjustments accordingly, instead of trying to finish the work as quickly as they can, as was the norm during the real estate boom.

Reducing risk: An artist’s impression of an Indiabulls project in a tier II city. Analysts say that developers are experimenting with the affordable housing model after some projects garnered big sales in recent times.

Reducing risk: An artist’s impression of an Indiabulls project in a tier II city. Analysts say that developers are experimenting with the affordable housing model after some projects garnered big sales in recent times.
This is especially true of the affordable housing projects that have led the real estate revival after the high-end residential property market crashed because of the economic slowdown.

Tata Housing Development Co. Ltd is a case in point. Its low-cost Shubh Griha brand of homes at Rs3.9-6.7 lakh in Boisar, 60km from central Mumbai, was a sell-out, with only 45 units having no takers out of the 1,500 that were opened to buyers.

Buoyed by the response, four months after the launch in May, the developer is now launching more expensive homes in the 67-acre plot, out of which only 15 acres are devoted to low-cost housing. The new set of bigger Boisar apartments, still in the affordable bracket, is priced at Rs12.73-27 lakh. The developer also plans to throw in row houses, smaller offices and retail space in the area, but only at a later stage, when demand picks up.

Brotin Banerjee, managing director and chief executive of Tata Housing, however, puts it differently. “The idea behind this is to do a mixed-income product, so that we can bring different kinds of buyers. But we will launch only when we think it is the right time for a particular product,” Banerjee said in an interview to Mint earlier this month.

As real estate projects passed through a rough patch in the past few months with declining sales and growing delays, many developers had ended up changing project formats from luxury to affordable homes, or office spaces to homes, even after construction had begun.

Developers, with a clear focus on cash flow and quick sales, now want to build what they can sell and thereby cut risk.

Indiabulls Real Estate Ltd, the country’s third largest developer by market value, is planning to launch similar affordable housing projects in tier II cities such as Indore, Madurai, Hyderabad, Navi Mumbai, Vadodra and Ahmedabad at a price band of Rs2,500-3,500 per sq. ft to begin with. The rest of the project will be finalized in tune with demand. The parcels vary from 7 acres to 36 acres each, and are mostly near a city centre.

“What we build will depend on customer preference and on market cycles. If affordable sells well, we’ll do more of that or something else that will perform, depending on demand,” said Vipul Bansal, chief executive and joint managing director of Indiabulls Real Estate, which has targeted nearly 20 million sq. ft of such large developments, with a focus on budget housing.

Bansal stressed that developers can’t just build on their own, and need to react to the market cycle and changes.

Sanjay Puri, principal architect of Sanjay Puri Architects Pvt. Ltd, who has designed many large townships, said that the aim now is to launch partially, see how it fares, and then proceed with the rest of the project.

“Earlier, developers would typically have a uniform format catering to a certain segment of buyers unless it was a 100-acre township. But now, they are introducing different components to cater to customers with different needs,” said Puri.

Puri cited the example of a large township project on the outskirts of Mumbai where the builder started with the one and two BHK, or bedroom-hall-kitchen, format, at entry price points, and then gradually introduced more expensive homes.

Analysts say that affordable housing is still at a nascent stage in the country and developers are experimenting with the model after some projects garnered big sales in recent times. So, once the developers get a good response for affordable homes, they introduce more expensive homes in the same location.

“Developers are using affordable housing as a litmus test for buyers to come into a new project. Once they attain critical mass in a location, they will introduce other products at higher rates,” said Akshaya Kumar, chief executive of Parklane Property Advisors, a property consultancy.

Kumar elaborated that with commercial and retail business plans on the back burner, developers are banking on residential demand. However, they will slowly introduce the other components as and when the project gains momentum.

North India-focused developers such as Parsvnath Developers Ltd are keeping under-construction projects as flexible as possible. Parsvnath prepares a master plan to obtain at least 10 different approvals, after which it tweaks the project details to suit market demand.

“Builders should be able to introduce a new format or change the old one even if it was not included in the conceptual stage if we feel that it will work in favour of us,“ said Pradeep Jain, chairman of Parsvnath Developers.

Source:http://www.livemint.com/2009/09/27211107/Builders-use-flexi-model-to-se.html

Citys affordability index soars

Bangalore: Is it actual demand or pent up demand or just plain affordability Call it what you may, theres literally a slugfest now in the affordable housing market, homes priced between Rs 12 lakh and Rs 30 lakh.

The big daddy of the Indian real estate market, DLF, is looking to enter the affordable home market and Bangalore could well be its launch pad.

According to sources in the know, DLF is looking to attract buyers with annual household incomes of Rs 3 lakh to Rs 5 lakh per annum. This income group would be able to afford homes that cost between Rs 9 lakh and Rs 15 lakh, said a source. The company is said to be initiating a national market survey to find out what exactly buyers are looking for in an affordable home.
Since Bangalore is seeing a lot of action in the affordable housing space as compared to other metro markets, DLF would look at a roll out in Bangalore first, said a source. A point that can be corroborated by the number developers in the city who have launched projects in the Rs 12 lakh to Rs 30 lakh bracket.

In the last seven months, Puravankara, Confident, Mantri, CSC, Ozone, Nitesh Estates and Shriram Properties have all launched such homes. P Dayananda Pais Century Group has just announced its foray into this segment. The company launched Century Indus, located in Rajarajeshwari Nagar, comprising of 2 BHK (850 sqft to 950 sqft) and 3 BHK (1,120 sqft to 1,135 sqft) apartments in the price range of Rs 22 lakh to 30 lakh.

The Prestige Group is believed to be looking at launching homes in the Rs 25 lakh to Rs 40 lakh price band in Electronics City. Brigade Group has already spelt out plans of foraying into the affordable space early next year. Silverline Group too is looking at unlocking its land bank by developing affordable homes.

According to Cushman & Wakefield India, demand for housing in Bangalore is likely to be about 570,000 units over the period 2009-2013 , with a compounded annual growth rate of 14%. The affordable and mid segment housing category are likely to be the primary focus of most developers , says Anurag Mathur, MD of the real estate consultancy firm.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=TOIBG&pubLabel=TOI&pageid=17&mydateHid=24-09-2009

Govt plans regulatory reform for housing sector

The central government is working on a model real estate regulation bill to provide guidelines to facilitate growth and promotion of healthy and  transparent, efficient and competitive real estate sector in the country, said the housing and urban poverty alleviation minister Kumari Selja.

This is a welcome move and will help the sector in becoming efficient and competitive. However, developers feel the government should form a separate regulator on the lines of Securities and Exchange Board of India (SEBI) to regulate the sector.

Addressing a conference on real estate, the minister said Indian real estate market is unorganised and fragmented and that most of property transactions are based on certain perceptions and not necessarily on sound business principles. In this, customer satisfaction is low and redressal procedure is long and cumbersome. This has created problems for both buyers and developers. As end users are not sure of delivery of a house by builders on time, they dont want to risk a purchase by taking a loan from the bank.

Apart from this, many buyers are not even sure of the specifications, which developers promise while selling them the houses/flats. Worse still, when developers do not deliver on time or stick to the promised specifications while selling, buyers do not know where to for redressal.

Going to a court is not only time consuming but also expensive. This has forced buyers to either defer their purchase or to go for completed projects. But, this apprehension of end users has affected genuine developers as well, which have a plan and required finances to complete a project. However, in the last couple of months, end users have started showing interest in buying new projects. But, they want to buy in the projects of reputed developers alone. This has created problem for the new but good developers.

A senior developer says if the sector is well regulated, the role of brokers and investors can be reduced. In most of the cases, investors, who have better understanding of the sector and who can invest time and money to know about developers, invest at the early stage of implementation of a project and make easy money by selling them to end users at high prices when the project comes to a close. The end users, on the other hand, are comfortable in buying a house when projects are close to completion, hence making the sector over dependent on investors.

Consequently, in the last one year of market downturn, the entire real estate sector came to a screeching halt as investors disappeared from the market. But, had the sector been well regulated, end users would have been bold enough to buy at the early stage of project implementation. This would have helped developers also.

However, another problem in regulating the sector is that it comes under the state subject as well. Thus, a senior official says nothing much can be done unless state governments show interest. Haryana Government has already passed an act to regulate the sector. But, the results are not encouraging, thus far. It was assured all the stakeholders that the government will accord full cooperation and support to encourage affordable housing.

She said the housing sector in India holds tremendous potential and has positive impact on the social and economic development of the country. In

2006-07 the sector was about 4.5% of country’s Gross Domestic Product and comprised approximately 7% of the total urban workforce. Housing is the largest component of the construction sector and central to economic growth.

However, provision of affordable housing for all is a complex problem with challenges emerging from many facets of urban sector. The minister said there are many impediments to the growth of affordable housing land and capital being the two key constraints.

To increase the stock for affordable housing the focus has to be on augmenting land supplies. Kumari Selja said the issue is a critical one and requires a number of measures such as alternative methods of land assembly, development and disposal to be pursued, check on prices of urban land, encouraging public-private partnership, promoting intense use of land-higher densities, revision in Floor Area Ratio or Floor Space Index and change of norms to suit local situations, discouraging speculation in land development, and allotment or disposal process to check rising prices of land.

http://economictimes.indiatimes.com/Markets/Real-Estate/Policy-/Govt-plans-regulatory-reform-for-housing-sector/articleshow/5025022.cms?curpg=2

Cabinet may discuss 1% subsidy on home loans

New Delhi: In a move to boost the affordable housing sector and support middle income groups, the Union Cabinet on Thursday is expected to approve a proposal for 1% interest subsidy on housing loans upto Rs 10 lakh. At a time when low cost is the buzzword in the real estate sector, the scheme envisages providing 1% subsidy on homes loans upto Rs 10 lakh on houses costing not more than Rs 20 lakh. The subsidy will be paid from the governments kitty.
Finance minister Pranab Mukherjee, in his reply to the discussion on Finance Bill, had announced the interest subsidy scheme. The proposal , which is expected to cost around Rs 1,000 crore, was widely welcomed by realty players and also homeloan companies. The move, however , will mainly boost affordable housing projects in Tier II & III cities. In the metros, cost of houses has spiralled much beyond Rs 20 lakh.

According to sources, the interest rate subvention will be routed through scheduled commercial banks and housing finance companies. However , an official said banks were concerned about finding ways to deal with change in EMI after the first year as the government subvention of 1% on interest rate is available only for a year.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?pageid=11&pagesize=&edid=&edlabel=TOIH&mydateHid=10-09-2009&pubname=&edname=&publabel=TOI

Making affordable housing workable

At the ‘Housing for All’ seminar, the emphasis was on involving the private and cooperative sectors in developing housing with land made available by the public sector.

A focussed policy is needed to lower cost of housing and encourage public-private partnership to bring land available with the public sector for development by the private sector, said Mr D. P. Yadav, Managing Director, Tamil Nadu Housing Board.

Addressing a seminar on ‘Housing for all’ organised by the Confederation of Indian Industry – Chennai Zone and the State chapter of Confederation of Real Estate Developers Association of India (CREDAI), he said State governments need a policy approach to address the housing needs of the economically weaker sections and the low-income groups. Some States such as Gujarat, Karnataka and Punjab have moved towards making available land to the building industry to set up affordable housing.

Transport bottleneck

Transport infrastructure gap was another important cause for the bottleneck in supply of affordable housing, he felt. In the 1960s and 1970s, the TNHB had developed suburban areas which were now a part of the city. But areas more to the periphery could not be developed because transport was not available for people to move efficiently at affordable cost. Even now the city could grow and affordable housing supply increased if adequate transport was available to tap the land in the peripheries.

Mr Surjit Chaudhary, Secretary, Housing and Urban Development, Tamil Nadu, said that it was ironic that developers focussed on the creamy layer of the market while 98 per cent of the market demand was in the middle- and low-income groups, which need affordable housing. Builders need to shift their focus to the segment where there is demand.

Mr Vikram Kapur, Member Secretary, Chennai Metropolitan Development Authority, said that the Centre’s National Urban Housing and Habitat Policy 2007 highlights that 99 per cent of the housing shortage was in the economically weaker and low income segments.

The shortage of 26 million residential units would involve an investment of over Rs 3.61 lakh crore to bridge. Chennai alone would need over 1.23 million dwelling units, but the current supply was about a fifth of that.

The Centre has provided for subsidies under the JNNURM for increasing supply of housing to the economically weaker and low income segments. The State Government has provided for additional built-up space for builders to cater to these segments.

If land could be made available by the public sector, then the private and cooperative sectors could be involved in developing housing. Some element of cross subsidy could also be enabled by allowing middle income housing and commercial development and make the project attractive to the builders.

Builders’ view
According to Mr R. Kumar, Managing Director, Navin Housing and Properties (P) Ltd, the options available for builders to bring down prices was by cutting down on the size of residential units and introducing modern technology. But significant reductions could be achieved if land cost could be controlled, the time taken to obtain statutory clearances reduced and taxes and levies brought down for the benefit of the buyers.

For a project within city limits, these costs alone worked out to over Rs 8,100 a sq.ft and in the suburbs to about Rs 3,800. Under these conditions, housing supply could never be affordable anywhere in the vicinity of the city.

Mr Prakash Challa, President, CREDAI – Tamil Nadu, proposed the development of Special Residential Zones, a concept being suggested by the builders’ body.

Along the lines of the Special Economic Zone for industry, such residential zones could be promoted to encourage affordable housing. Costs could be brought down through incentives and land made available by the Government.

Source : http://www.thehindubusinessline.com/iw/2009/09/06/stories/2009090650711500.htm

Real estate prices won’t rise around festive season

Property prices are unlikely to rise sharply during the festive season as buyers have become very price sensitive and are not ready to pay premium on flats.

Talking to Hindustan Times, Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM) said, “Developers have realised that they can no longer increase the prices at will as the customer will just not buy the product,” said Puri.

He added that since consumers had returned to the market after a lull, developers were not keen to alienate them by quoting high prices.

Puri said that the current market rates were similar to that of mid-2006 levels when the market was just picking up and said that it was the best time to buy.

However, unlike the last few years, this year, the festive season will witness fewer number of new project launches, falling by approximately 35 percent. Though major builders like Hiranandani (Goregaon), Supreme and RNA (Chembur) and Matoshree (Parel) will launch some projects around Diwali, many others have deferred their projects.

“During the last one year we have faced a lot of problems and we have recovered. Our focus is to complete our existing projects and only then will we think of launching new ones,” said Anand Gupta, General Secretary, Builders Association of India, an apex body of the construction industry.

Some developers are even adjusting their projects to suit low cost buyers.

Last week, Nahar Builders launched an affordable housing scheme at Powai at Rs 5,900 per sq ft in a complex where the going price was Rs 7,000. “The buyers of affordable houses will have smaller houses and less amenities,” said Sukhraj Nahar, director, Nahar Builders.

Pujit Agrawal, managing director, Orbit Corporation Limited also thinks that people are no longer inclined to pay a premium.

Source : http://www.tradingmarkets.com/.site/news/Stock%20News/2514190/

SAS Arcadia Independent floors, Independent floors in Gurgaon.

Affordable Independent floors in Gurgaon by SAS Arcadia. Independent floors in gurgaon starting from Rs 24 Lacs at sector- 83 & 84. Arcadia Independent floors in gurgaon +Arcadia Independent floors in grugaon

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Location:
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Twin Advantages – Unmatched in NCR

LOCATED AT CONVERGENCE OF 2 METROLINES
1st – Proposed Gurgaon line from South Delhi
2nd – Proposed metro line from Dwarka

LOCATED AT THE JUNCTION OF 2 EXPRESSWAYS
1st – Existing eight lane expressway-NH-8
2nd – Proposed Dwarka 8 lane expressway with 150 meters wide northern periphery road.

Sizes and Prices

ARCADIA – PINE ( 240 Sq yds )

3 BR + KIDS BR – GF Ground Floor- 1128 sqft (Built up area) 1575 sqft (super area)  35.00 Lacs
3 BR + KIDS BR – FF First Floor -1128 sqft (Built up area) 1575  sqft (super area) 31.50 Lacs
2 BR + KIDS BR – SF Second Floor- 871  sqft (Built up area) 1214 sqft (super area) 24.50 Lacs

ARCADIA – EBONY ( 300 Sq yds )

4 BR -  GF Ground Floor- 1366 sqft (Built up area) 1907 sqft (super area) 45.00 Lacs
4 BR -  FF First Floor – 1323 sqft (Built up area) 1847 sqft (super area) 38.00 Lacs
3 BR -  SF Second Floor -1091 sqft (Built up area) 1522sqft (super area) 29.00 Lacs
* Unit Sizes may vary +/- 10 %
* The prices can be revised any time on the sole discretion of the management .
* The above cost is inclusive of one dedicated surface car parking , EDC/IDC (Existing ) .

For more details for the project, please click on following link:
http://www.propjunction.com/advcontactus.aspx?project=Ge …

SAS Group:
The vision that drives the SAS Group of companies is a dogged determination to build lasting businesses that create enduring value for all its stake-holders.This is perhaps the key to its continued success – a firm belief in building for the long-term, in every sense of the word, combined with the necessary patience and grit to work towards achieving the most challenging goals.

The SAS Group of companies has over twenty years of experience in conceptualizing, initiating and implementing, operating and then successfully sustaining continued growth, in the businesses they have undertaken.

SAS Group is now a conglomerate which has its diversified interest ranging from Hospitals, Hospitality, Telecom, Real Estate, Facility Management, Micro Finance Etc.

Source : http://www.prlog.org/10325272-sas-arcadia-independent-floors-independent-floors-in-gurgaon-call-9990444500-for-independent-floor.html

Developers witness revival of big ticket residential deals

The wealthy and elite across the country are scouting for good deals in the real estate sector. And in their kitty are a few crore of rupees to buy Land as investment the home of their choice. The concept of bigger, better and more luxurious has caught on. So is the demand in the Rs 5 crore plus housing seeing a revival?

Says Anuj Puri, chairman & country head of global real estate consultancy Jones Lang LaSalle Meghraj (JLLM), “Our Homebay residential agency has concluded several high-ticket residential transactions over the past three to four months, and we can vouch for a significant sea-change in how the luxury home market is being perceived. High networth individuals (HNIs) have begun to show renewed investment sense of purchasing luxury properties in prime locations of leading metros, realizing that supply in such locations is limited.”

But some feel that this demand is primarily coming from existing projects. Shveta Jain, national head, marketing & investment, residential, Cushman & Wakefield (C&W) India, says there already are significant amount of existing projects in the luxury segment that have not been fully absorbed. The demand, thus, is not significant enough to warrant key new luxury project launches, she feels.

At a time when affordable is the buzz in the real estate sector, are developers looking at new luxury launches? Manu Goswami, head, business development and strategic planning, Jaypee Greens, says although they have not launch anything over the last 10 months, they do have plans of launching luxury projects in mid September.

“The demand has turned around over the last few months. But people are more choosy now.” The developer has Estate Homes in Greater Noida which are priced at an upwards of Rs 8 cr and about 50% of their inventory has already been sold.

During the boom time in 2007, real estate developers were mainly concentrating on luxury projects. The margin for a developer in luxury housing would be at least 15-20% higher than say an affordable housing project. So for many, this seemed as a more attractive proposition in earlier times. But developers defend this logic.

“The absolute margins may be higher for a luxury development but the profitability also accrues over a much longer period of time vis-a-vis affordable housing which gets sold much earlier,” adds Goswami.

However, there are some developers who are not launching any new projects in this category at the moment. BPTP, for instance, is focusing on the affordable housing segment. But they agree that activity has started happening in the luxury segment. “The elite who were earlier waiting for the right investment opportunity have now started buying property. There has been an increase in demand for luxury housing,” says a BPTP spokesperson.

Raheja Developers too has an upcoming project — Raheja Atlantis, a ready-to-move-in luxury housing project. Located on NH-8 in Sector 31, Gurgaon, villas and presidential suites are primarily available for sale. It’s priced at Rs 6,600 per sq ft.

Harinder Dhillon, GM, marketing, Raheja Developers, says the demand has been quite encouraging. “In Atlantis we have had over 30 bookings in the last three months at Rs 1.50 cr onwards per apartment. The demand for luxury housing is making a comeback, provided it is ready to move in and at a good location.”

Most of the demand in the apartments segment is being seen for ready-to-move-in apartments. “We are witnessing enhanced demand for completed Land as investment projects or those nearing completion,” says Rohtas Goel, chairman National Real Estate Development Council and CMD of Omaxe. He says developers across the board are noticing this trend and focusing on completing existing projects and speeding up delivery.

Puri of JLLM too seconds the view. “The highest demand is for ready-to-move luxury properties, since the ability of developers to complete projects is generally not being viewed with much enthusiasm at the current time.

However, there are serious purchase inquiries for under-construction projects by highly reputed developers, especially in locations where there is very little potential for future supply.”

Real estate investment advisers such as Ashok Kumar find that the bulk of revival in Delhi has been in the heart of the city in premium areas such as Defence Colony and Greater Kailash where the supply is limited. So deal hunters are now picking up plots for between Rs 12-19 crore to redevelop old properties. And the buyers? CEOs, professionals and HNIs.

Buyers today are willing to spend to get the home of their choice. But the last economic downturn has showed them that long-term investments are counter-productive. Projects are behind schedule by one to two years and there is no guarantee that buying at premium rates fetches you better returns. Therefore buying a near-complete apartment is seen as mitigating the risk.

Though developers too have started to build in the affordable segment in keeping with the thrust of the government and the incentives offered to developers as well as buyers, few have exited the luxury segment. But with an increased interest shown from buyers, it seems that luxury housing is ready for a grand comeback.

Source : http://economictimes.indiatimes.com/News-by-Industry/Realty-sees-revival-of-big-deals/articleshow/4949705.cms

Puravankara, Mexico’s Homex talk JV

Bangalore: Realty major Puravankara Projects is in talks for an alliance with Homex, a Mexican company that specialises in affordable housing.

The idea is to give a boost to its affordable housing subsidiary Provident Housing.
Ashish Puravankara, director, Puravankara Projects, said, “We are holding discussions with Homex as they have build a large number of affordable homes. They like our business model and are very keen to tie up.” He did not divulge the nature of the alliance.

Homex is vertically integrated home development company focused on affordable-entry level and middle-income housing. It is also the largest home builder in Mexico, based on the number of homes sold, revenues and net income. It has so far delivered around 270,000 homes.

Its affordable entry-level housing ranges between 452 sq ft and 818 sq ft in size and its middle-income apartments are typically 818-1,851 sq ft.

Homex has operations in 32 cities located in 20 Mexican states as of December 2008.
Homex integrates aluminum moulds into its construction process. With this method, the shell of an entire home can be constructed from concrete poured into as many as 1,000 interconnected pieces of aluminium moulding for an affordable entry-level home.

Once the concrete hardens, the moulds are disassembled for use on another home. Each mould can be used as many as 2,000 times. The method also generates less waste, reducing materials cost. Most importantly, the mould system reduces the average time of construction.

Provident Housing has roped in SBI Capital and Housing and Urban Development Corp to raise funds for it affordable venture. The firm is currently at an advanced stage of talks with private equity investors for diluting stake on a project level and hopes to close the deal soon.

It has already launched two projects in Bangalore and Chennai and is in the process of launching its second project totalling 6 million sq ft in size in Bangalore with an investment of around Rs 900 crore.

The project is expected to have 6,000 apartments. It is currently waiting for sanction to kick start the project.

The real estate player will invest Rs 1,900 crore by 2010 on three affordable housing projects in Bangalore and Chennai. The three projects, slated to be ready by 2010-11, will house 15,000 units.

The one, two and three bedroom flats will be priced at Rs 10 lakh, Rs 15 lakh and Rs 20 lakh respectively spanning from 750 sq ft to 1,100 sq ft.

Provident Housing will also roll out the concept to other cities like Hyderabad, Coimbatore and Mysore in the Phase I. In Phase II it will set up properties in Delhi, Kolkata, Kochi, Jaipur, Pune and Nagpur.

Source : http://www.dnaindia.com/money/report_puravankara-mexico-s-homex-talk-jv_1284925

Want to buy a home? Shift to a less costly city

A  study of households with an annual income of Rs 3 lakh (Rs 300,000) to Rs 10 lakh (Rs 1 million) in seven cities shows substantial variations in the type of houses they can afford to buy.

The study on affordable housing, done by property consultants Knight Frank, says the Rs 8-10 lakh (Rs 800,000-1 million) income category in Chennai can afford houses up to Rs 45 lakh (Rs 4.5 million), while the same group can afford houses up to only Rs 38 lakh (Rs 3.8 million) in Mumbai [ Images ] and Rs 37 lakh (Rs 3.7 million) in Bangalore. The same category in Hyderabad, Kolkata [ Images ] and Pune could afford between Rs 40 lakh (Rs 4 million) and 43 lakh (Rs 4.3 million).

In terms of apartment sizes, the Chennai households can afford up to 1,200 square feet, while those of Pune and Mumbai can only afford 800 sq ft and 950 sq ft, respectively.

In terms of affordable rates per sq ft, Pune can afford up to Rs 5,900 a sq ft and Bangalore only Rs 3,600 a sq ft, the study said.

“Mumbai’s high cost of living, coupled with the generally higher maintenance lifestyle, has adversely affected the affordability of households in the city. For instance, middle class households in Kolkata, Chennai and Hyderabad can afford houses valued at Rs 14-45 lakh (Rs 1.4-4.5 million), whereas households of similar stature in Mumbai can afford houses valued at Rs 12-38 lakh (Rs 1.2-3.8 million),” the study said.

“Affordable rates are higher if sizes are smaller. If buyers can compromise on size, they can afford higher priced apartments,” said Samantak Das, national head, research, Knight Frank.

The study assumes significance, as top real estate developers such as DLF, Unitech and Parsvnath have shifted their focus towards the Rs 20-60 lakh (Rs 2-6 million) income category in many cities, with the premium housing segment seeing sharp decline in sales after the economic slowdown and stock market decline impacted home buyers.

The report states that not all of the so-called affordable housing projects in the country are really affordable; they are way beyond the means and preferences of buyers.

“Although preferred unit sizes are less than 1,200 sq ft, many projects are offering greater sizes that are unaffordable. Based on consumer preferences, house property beyond Rs 5,900 a sq ft would be unaffordable across all cities covered,” it said.

The consultancy thinks it is premature for developer to raise prices now.

“It is too short a period for developers to increase prices. It is just euphoria after elections and a stable government and not supported by fundamentals,” said Gulam M Zia, national director, research and advisory services, Knight Frank.

Source : http://business.rediff.com/report/2009/aug/13/shift-to-a-less-costly-city-to-buy-a-home.htm

Unitech to pump Rs 600 cr into affordable housing

New Delhi: Unitech Ltd, India’s second largest real estate developer, is looking at investing Rs 600 crore to develop and launch affordable houses under its Uni Homes brands across seven cities in the country.

The developer would launch these homes in the price range of Rs 10-30 lakh in Noida, Greater Noida, Chennai, Kolkata, Rewari, Bhopal and Mohali.

The total area in the phase one of the launch would be about 4.5 million square feet with about 5,000 flats. The company would fund the development with a combination of debt and internal accruals.

The developer had earlier said it would launch 30 million sq ft of development of commercial and residential properties in the current fiscal, which included 20 million sq ft of residential projects. By August it has been able to launch 17 million sq ft of projects, mostly in the affordable housing segment and has already sold 6,000 flats.

However, analysts covering the company believe that Unitech’s margins would go further go down with its concentration in the lower-margin affordable housing segment.
“We expect the profit margin to reduce going forward as affordable and mid housing are low-margin segments compared to commercial, retail and luxury housing segments,” K R Choksey analysts said in a note to clients.

The company plans to launch 40 projects, and would develop 35 million sq ft properties in the next two years. The company may require Rs 6,000 crore over the next two years for funding the expansion, and would use the cash generated from two qualified institutional placements (QIP) of shares, asset sale and internal accruals.

The developer has already raised about Rs 4,410 crore through QIPs. It is also looking to raise Rs 500 crore by selling about 20-25 hotel land parcels as its hospitality expansion plans have been deferred due to low demand.

The realtor currently has debt of around Rs 7,000 crore, which is expected to go down to Rs 4,000 crore by the fiscal end.

Source : http://www.dnaindia.com/money/report_unitech-to-pump-rs-600-cr-into-affordable-housing_1281927

Affordable housing is realty’s new bait

Mumbai: It’s fashionable to be in ‘affordable housing’, particularly after the downfall of medium, premium and luxury housing, wherein real estate companies severely burnt their fingers. Besides, it’s now perceived to be new bait for attracting institutional funds thereby easing off the cash crunch situation most realty companies got themselves in.

A recent private equity update by Four-S Services described the underlying scenario: “PE funds, which around a year back were looking at only iconic towers and exclusive homes projects, are now seeing a new survival mantra in affordable housing. While developers see the segment important to gain quick liquidity and a possible real estate recovery, PE Players see it an opportunity to re-enter domestic real estate.”

The first half of 2009 saw three such investments where in realty-focused funds invested $275.7 million.

However, industry experts feel there isn’t much clarity on the concept itself. For instance, realty companies are positioning their developments located in the extended outskirts of a suburban metro as affordable housing. Some others have launched projects in locations where accessibility is a problem and there is no social infrastructure around it.

Ved Prakash Arya, managing partner, Milestone Capital, said, “I have seen people talk about affordable housing projects quoting prices between Rs 30-50 lakh, while others try to position their ‘match-box’ developments as affordable. Our understanding is that units ranging from 600-1,200 sq ft and priced at Rs 10-20 lakh fit the affordable housing definition.”

The opportunity in low-cost or affordable housing is humongous, according to Knight Frank India. The property consulting firm pegged the market for affordable housing segment in India to be approximately Rs 3.3 lakh crore by 2011.

“Housing requirement for the Rs 3-10 lakh income group across the seven cities being tracked by our team indicates demand for approximately 20.6 lakh units by 2011,” said Samantak Das, national head-research, Knight Frank India.

The irony, is that despite ambitious affordable housing announcements, till date work on just 10,000 units has reached the ground breaking stage. “It’s very premature to say how much of it will actually happen,” cautioned Gulam Zia, national director, research and advisory services, Knight Frank India.

Source : http://www.dnaindia.com/money/report_affordable-housing-is-realty-s-new-bait_1281939

Affordable Housing Market Size can be Rs300,000 cr by 2011- Knight Frank

Leading real estate consulting firm Knight Frank on Wednesday released a research paper on ‘Affordable Housing’ in India, saying that this segment has a potential market size of Rs300,000 crores in India by 2011. The affordable housing segment of the real estate industry is expected to see requirement of over two million units by 2011. The report was unveiled by Pranay Vakil, Chairman, Knight Frank India.

While the Rs3-10 lakh income group would drive this demand, the research findings further indicate that the largest contributor to this market size is expected to be the group earning Rs3-6 lakh income annually. Pranab Datta, Vice Chairman and MD, Knight Frank India said, “We have witnessed a tumultuous situation in the real estate sector and the shift today is clearly towards Affordable Housing. The findings of this report clearly indicate a huge demand in a segment that should encourage developers to take increased notice.”

Although a number of affordable projects have been announced, the locations do not have adequate social infrastructure which is of utmost importance for the proper development and successful implementation of affordable housing, says the Knight Frank report. The report reveals that good connectivity to work places is the most important factor influencing the buyers decision in selecting the location of their residence. The Knight Frank survey took a sample size of 1,400 households across the seven cities. The respondents were mostly tenants, without tenancy rights under the rent control act, and had a strong intention to buy a house within the next two years, the report said.

Source : http://www.indianrealtynews.com/real-estate-india/affordable-housing-market-size-can-be-rs300000-cr-by-2011-knight-frank.html

Hiranandani may tie-up with Maha govt for affordable housing

Real estate developer Hiranandani Constructions is looking to enter the affordable housing segment and may enter into a public private partnership (PPP) with the Maharashtra Government for the same, a top company official said.

“We are certainly looking at opportunities in cluster/rental housing. Although we haven’t started talking to MMRDA (for public private partnership) for low-income housing, internally we have started making plans,” Hiranandani Constructions Managing Director Niranjan Hiranandani told reporters on the sidelines of a conference here.

The company is also exploring the markets of Bangalore, Nashik, Panvel, Thane and Pune among other cities for the affordable housing project, he added.

The State Government is focusing on the rental housing model and aims to have three lakh flats/tenements ready in the next three years through the PPP model, Government of Maharashtra, Additional Chief Secretary and Mumbai Metropolitian Region Development Authority (MMRDA), Metropolitan Commissioner, Ratnakar Gaikwad, said.Hiranandani said he does not foresee real estate prices picking up at least till about a year.

“I don’t see prices rising in the next 3-12 months. Housing demand is expanding rapidly but prices right now are stagnant,” he said.

Prices may increase steadily after a year as the market takes away ready products, he said.

“In five years, there would be a 100 per cent jump in demand over that which existed during peak times before the meltdown,” Hiranandani added.

Source : http://www.business-standard.com/india/news/hiranandani-may-tie-upmaha-govt-for-affordable-housing/70001/on

Props for affordable housing

After an “uneventful” Interim Budget and the Union Budget 2009-10 for real estate, the Finance Minister surprised home buyers and builders while replying to the debate on the Finance Bill, 2009, in the Lok Sabha earlier this week.

Relief came in the form of interest subvention of 1 per cent for home loan borrowers in the affordable housing segment, and a one year extension of tax holiday to housing projects approved in FY’08.

Mr Rajiv Talwar, Group Executive Director of DLF, says the Government has sent out a clear message to builders — “give us smaller affordable houses and you can have benefits”.

These incentives will certainly lift the market mood, he says.

The Finance Minister has talked about an interest subvention of 1 per cent for a year on all housing loans up to Rs 10 lakh to individuals, on houses not exceeding Rs 20 lakh. The sunset clause for the Industrial Park scheme was extended up to March 2011.

Prior to this, Section 80-IA (4) (iii) of Income-Tax Act provided for tax holiday on profits from development, operation and maintenance of an Industrial Park completed before March 31, 2009.

On tax holiday for profits

Moreover, the Centre has also decided to amend Section 80IB(10) of I-T Act to allow the tax holiday for profits derived from projects approved between April 1, 2007 and March 31, 2008, and completed before March 31, 2012. The tax deduction to developers under this section was initially available for projects approved before March 31, 2007. The Finance Minister has now extended these benefits by another year.

Spur for demand

Builders are all considering affordable housing projects and the latest measures are expected to fuel the demand for houses priced in the Rs 12-14 lakh range.

Dewan Housing Finance Corporation Ltd (DHFL) — where loans up to Rs 10 lakh account for nearly 65-70 per cent of the loan portfolio — sees the scheme coinciding well with the current thrust on low-cost housing projects at the periphery location of cities. “We are awaiting the detailed guidelines to be issued by National Housing Bank, the nodal agency. But back of the envelope calculations peg the savings for a borrower at about Rs 8,000, for a one-year period,” says Mr Kapil Wadhawan, Managing Director of DHFL.

A senior Unitech official says, the interest subvention will drive demand for affordable housing. A 1 per cent interest subsidy may not seem much, but it can spur those waiting for the home loan rates to come down, he says. Unitech recently launched a new home brand, ‘Uni Homes’ for affordable housing projects where the units will be priced Rs 10-30 lakh. The company feels the bulk of its projects under this category would get a leg-up from the scheme.

However, reactions are somewhat mixed when it comes to the incentive pertaining to tax holiday under Section 80 IB (10). Some feel that its impact may fall short of expectations, as the benefits are restricted to projects approved within a specific timeframe. “The provision comes with a retrospective effect, and so the industry cannot initiate any action. Only those projects that were approved in the given timeline could be speeded-up,” says an industry watcher, adding that it will not significantly increase the fresh supply in the market.

Omaxe’s Chairman and Managing Director, Mr Rohtas Goel, points out that the conditions under this section (built-up area, as well as the plot sizes) were meant to encourage the construction of houses for low and middle-income households.

“Just how many projects approved during that period will actually fall within the definition of affordable housing? Remember, the thrust then was not so much on affordable projects.”

CREDAI Disappointed

Our Chennai Bureau adds: The Confederation of Real Estate Developers Association of India (CREDAI) has welcomed the subsidy on home loan interest rates and extension on tax holidays but feels these are inadequate. The incentives should at least be doubled, it says.

A release quoting Mr Santosh Rungta, President, CREDAI, says that extending the tax holiday under Section 80IB (10) for just one year to projects approved by March 2008 will will create an imbalance. Most developers would be affected since projects approved after March 2008 will not be entitled to draw any benefits.

The Government should extend the dateline to March 2012 irrespective of the date of approval. This will encourage developers to take up new projects and expedite ongoing projects.

CREDAI feels even the proposed interest subsidy of 1 per cent to home loan borrowers up to Rs 20 lakh is small.

The government should take into account the escalation of construction cost subsidise at least 2 per cent for houses up to Rs 30 lakh.

http://www.thehindubusinessline.com/iw/2009/08/02/stories/2009080250701500.htm

Omaxe scales New Heights

Omaxe Ltd has launched Omaxe New Heights, a residential project in Sec 78 Faridabad. Prices start from Rs 16.18 lakh and go up to Rs 25.23 lakh a unit to cater to the growing demand in the affordable housing segment, according to a press release.

Omaxe New Heights is a multi-storeyed Group Housing complex to be completed within 30 months from the commencement of construction.

Omaxe New Heights comprises of 2BHK (bedroom-hall-kitchen), 2BHK + study and 3BHK + study ranging from 850 sq.ft to 1,100 sq.ft and 1,350 sq.ft. Omaxe will offer free club membership, power back-up, and an inaugural discount to first few buyers.

Faridabad is central to Gurgaon, Noida and Delhi with the proposed metro rail connecting residents to the capital city and satellite towns, the release said.

The Royal Institution of Chartered Surveyors (RICS) has welcomed the Real Estate Regulation Bill (Promoters and Builders – Regulation and Control of Activities Act) but finds it falls short on accountability of State Government agencies involved in clearing projects.

According to a press release from the RICS, it has represented to the Ministry of Housing and Urban Poverty Alleviation that the draft real-estate regulation Bill, which is to be a ‘model’ for States to follow, is a step in the right direction. It clearly spells out the liabilities of the promoter, builders and agents and provides for suitable action for not fulfilling these liabilities and for violating clauses under the proposed legislation. It takes into account appropriate checkpoints and stages of a property transaction where regulation is most required.

The Bill will provide customers with a recourse in case of delayed deliveries, non-execution of conveyance deed, substandard quality of construction or any other deviances from the specifications agreed upon in the purchase and sale agreement.

The Bill makes the purchase and sale agreement mandatory and specifies the contents — this would remove ambiguities and make the transaction transparent and developers accountable, the release said.

While the Bill provides for stringent action against developers for any violation or delays in delivery, the State government agencies or local development authorities are, however, kept out of the purview of the proposed Act.

This could result in the developers being penalised for delays in clearances from approving authorities. The Bill ignores the accountability of local development authorities by not acknowledging the delays in project clearances; by keeping them out of the purview or regulation under this Bill and by not making appropriate provisions to make these authorities also accountable for delays.

An apex statutory or autonomous body preferably with quasi-judicial powers should oversee the functioning of the State-level bodies. The role of the regulatory body should be comprehensive to ensure that policy reforms are undertaken at the State level; the body should promote best practices, e-governance and skill development initiatives and monitor the ‘affordable housing for all’ agenda.

The regulatory body should be responsible for a wide range of activities such as improvement in regulatory framework with respect to modifications in antiquated land laws, duty rationalisation, single window clearance and computerisation of land records, setting up of minimum quality standards of registration of builders, setting up of reliable industry wide database, adoption of uniform valuation practices and improvement in accounting quality, setting standards and sharing best practices to meet housing policy objectives.

According to RICS, pending an enactment of the law by the State governments, an ombudsmen be appointed in the interim period.

RICS is a professional body in land, property and construction with over 150,000 members in more than 146 countries practicing in a wide range of specialisations. RICS is governed by a Royal Charter approved by the UK Parliament which requires it to act in public interest rather than simply advancing the interests of its members.

JLLM expands services

International real-estate consultant, Jones Lang LaSalle Meghraj, has ramped up its presence in Ahmedabad. The office was provisionally established in 2008 and is fully functional to meet business demands, according to a press release.

The office will also service the business requirements of clients in other areas of Gujarat, such as Rajkot, Bhavnagar, Vadodara and Surat. “Most retail and finance business is based in Mumbai, while Ahmedabad has the developer and investor bases,” the release said, quoting Mr Ashutosh Limaye, Associate Director – Strategic Consulting, Jones Lang LaSalle Meghraj.

This office links the two and allows JLLM to service Gujarat’s strong NRI community, the release said.

It has put strategic consulting staff in place at the Ahmedabad office as this is the first step in any real estate or infrastructure development project. There is a lot of thrust on infrastructure development in Gujarat, which is among the States that puts in infrastructure and then effects planned development.

Source : http://www.thehindubusinessline.com/iw/2009/07/26/stories/2009072650651500.htm

Surge in demand for office space good for economy

The real estate market has shown a clear sign of revival following the formation of Congress-led UPA government with a clear majority at the Centre.
Apart from the affordable housing sector, which has witnessed a surge in demand, office space too has registered fresh demand, which was almost dormant for last one year, ever since the global economy went into a tailspin.

Commenting on the latest biometrics of the real estate sector in the country, Anshuman Magazine of CB Richard Ellis (South Asia) said, “In the 1st quarter of 2009, confidence and sentiment was low in the real estate market. The formation of a new government has improved market sentiment, while the global economic decline appears to be bottoming out. This has resulted in an improvement in the velocity of office space offtake, especially in the small to medium segments . This is further supported by a substantial decline in rentals in the past one year.”

Surge in demand for office space is a good sign for the economy, and also for the real estate sector. The opening of new offices means investment is likely to pick up, which will help revive the economy. At the same time, it also leads to creation of new jobs, which drives the demand for residential real estate. Normally, the demand for residential space increases by a factor of ten to that of office space.

Because of tough market conditions , coupled with a global slowdown, investments in the economy got badly hit. This resulted in a slowdown in demand for office space all of a sudden, in the last one year. But, the fresh supply of office space continued as buildings launched earlier to meet the expected strong demand for office space were completed during the period, even as the global economy was facing what may be billed as the second worst recession in the last hundred years.

This put pressure on rentals and capital value of office space in the country. In fact, this led to correction in rental rates and brought them down, closer to a more realistic level. CBRE report on office space said rentals in the secondary business district (SBD) of Nehru Place came down to more realistic levels with a correction of around 11% over the last quarter, to Rs 160 per sq ft per month.

Saket, another emerging market in the NCR, received minimal interest from the prospective office space occupiers. But as a huge supply of office space deluged markets in the last three months, the vacancy level in Saket rose to 35% and rental values corrected by around 22%, to Rs 140 per sq ft per month, over that in January-March 2009 quarter.

At Jasola, another promising SBD in the NCR, rental values fell by around 20%, to Rs 110 per sq ft per month due to a huge supply, 1.3 million sq ft during the period. Jasola is likely to benefit from a proposed fivestar hotel, multi-level parking facility and Metro-connectivity.

However, rentals in Gurgaon have not declined much in the last three months as they had already fallen substantially in the second half of 2008. In fact, corrections in the rentals have also helped in reviving demand for office space.

The report says Gurgaon witnessed an increase in the transaction activity, assisted by attractive leasing packages offered by most developers. Companies, the report says, which had postponed their expansion/relocation decisions due to negative sentiment are now ready to take advantage of the softened market and the options available for a phased take-up.

The report says Noida office market suffered heavily as rentals fell by 21%, to Rs 30 per sq ft per month, due to high vacancy levels at around 25-30 %. In fact, in the last one year, rentals in Noida dipped by almost 33%.

However, the positive aspect to all this is that leasing volume has increased by 3-4% in the NCR during the second quarter of 2009. The report says the increasing levels of corporate confidence should help this region and the momentum should be maintained in the second half of the year.

However, rentals in the commercial space market will continue to face challenges due to a large supply of new space, and till the time that the global economy gets back onto the path of recovery, opines Magazine. As rental values declined, the capital value of the property also suffered.

The fall in the capital values, however, has encouraged an increasing number of companies to explore and evaluate opportunities for an outright buy-out rather than leasing the required space. Though there is an improved level of activity in the sector, the markets are expected to remain soft in the short to medium term.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Surge-in-demand-for-office-space-good-for-economy/articleshow/4791799.cms

Property, Real Estate and Peace of Mind

Jaypee Greens Kosmos: Jaypee Noida coming up with a new affordable housing

Noida, India 13th July 2009, With the usage of effective and efficient space planning techniques measures Jaypee Kosmos are built to create vibrant place to live in. It has facilities and amenities which match any premium residential project. These residential will suits those buyers who have dream to buy a premium home in an affordable price. Its location is strategic. It is on the vantage point of Greater Noida Road and Faridabad-Noida-Ghaziabad (150m wide), Link Road along Yamuna River, Noida-Greater Noida Expressway, NOIDA Toll Bridge, Greater Noida – Mathura – Agra Expressway, and Rail Link.

(live-PR.com) – About Projects: Jaypee Greens new residential project Jaypee Greens Kosmos Jaypee Noida on Noida – Greater Noida expressway has received tremendous response from the market. A total of >3000 apartments that had been introduced in the market, have already been booked in few hours. This is due to the strong belief that the pubic has in Jaypee Greens, Noida and the strong value system of the company.

Common Amenities of Jaypee Greens Kosmos

Shopping Arcade, Temple, Schools, Medical facility, ATM, Banks, Transport to City Centre, Landscaped Green Area, Children play area, Ample Parking Area, Community Hall, Party Hall, Clubhouse, Solar Water Heating, Water Treatment Plant, Power Back-up for Utilities, Round the Clock Security, Fire fighting system, Gymnasium, Swimming Pool, Tennis Courts

About Builder: The Jaypee Group is a well diversified infrastructural industrial conglomerate in India. Jaypee Greens Wish Town Klassic is one of the best property provided by Jaypee Group in noida.Over the decades it has maintained its salience with leadership in its chosen line of businesses – Engineering and Construction, Cement, Private Hydropower, Hospitality, Real Estate Development, Expressways and Highways. The Jaypee Group is synonymous with creating premium lifestyle experiences through exclusive golf-centric real estate. The existing 452-acre development at Jaypee Greens, Greater Noida integrates homes with landscaped greens, resort living and commercial developments amidst an 18 hole Greg Norman golf course. It is a complete lifestyle destination offering individual homes and luxury apartments.

Source : http://www.live-pr.com/en/property-real-estate-and-peace-of-r1048298866.htm

Buying a house becomes cheaper since 2007

The average cost of buying a house has decreased by two percent in a period of last four years.

Whereas back in 2005, the average cost of house was 4.6 times that of average annual earnings, today it has decreased to 4.5 times that of average annual earnings today.

In 2007, the affordability factor increased to 5.1 percent, reasoned by the sharp rise in real estate prices.

Affordability is based on annual income of the borrower. If the loan cost is 4.5 times the annual income, the average EMI is 50 percent of buyer’s income on a loans of 15-year tenure.

The improved affordability has led to increase in sales, as reasoned by Renu Sud Karnad, joint MD, HDFC, -”in this quarter, we have seen good increase in demand compared to January March 2009. We expect demand to improve over the next couple of quarters as the total cost of acquiring property has come down substantially.”

Realizing the need and demand, many real estate developers in India have started working around the ‘affordable housing’ projects.

Recently, Tata Housing Finance launched its low-cost affordable housing project named the Shubh Griha.

The lowering of the interest rates coupled with special mortgage schemes launched by banks like SBI have increased demand for housing finance.

Bankers however do not expect interest rates to lower further.

With increase in affordability, the demand and correspondingly the prices are expected to pick to in near future.

The union budget 2009-10 has proposed allocation of Rs. 2,000 crore to the National Housing Bank for funding low cost housing projects to provide boost to `affordable housing.’

http://www.rupeetimes.com/news/home_loans/buying_a_house_becomes_cheaper_since_2007_2658.html

In realty, the worst is over

Moumita Bakshi Chatterjee

The near lull in the housing sector just months ago has been replaced by a slew of project launches touting affordable price tags, and a fund-raising spree by leading realtors. Developers are keeping their fingers crossed that sustained improvement in consumer sentiments – coupled with Government’s thrust on urban housing, a bigger Jawaharlal Nehru National Urban Renewal Mission (JNNURM) outlay, and the Union Budget for 2009-10 – would speed up the recovery in the sector and drive up demand for property.

Business Line spoke to Mr Kumar Gera, President, Confederation of Real Estate Developers Association of India, and Chairman & Managing Director, Gera Developments, on issues relating to recovery, challenges, and expectation from the Government.

Real estate companies are claiming that housing sales have picked since March-April. In your view, is the worst behind us and have the prices bottomed out?

Yes, I do believe that the worst is behind us and sales will now be inching forward in terms of velocity and price. My reason for saying this is largely due to the change in sentiment that is being witnessed, which seems to be related to the growth of the economy being at a healthy 6-plus per cent.

But is the demand restricted to specific segments of the property market, primarily the affordable housing space? In your opinion, are real estate players catering adequately to this segment ?

Currently revival is seen mainly in the residential sector, albeit at lower price points, and in the less-than-1,500 sq.ft segment. Real estate development often sees a herd mentality among developers.

The current mantra seems to be affordable housing and it is this segment where maximum sales are happening while commercial sales and residential units with price tags in crores of rupees are sluggish, at the moment.

Meanwhile, the improvement in the secondary housing market is not as obvious as is the case in the primary market – this is because the drop in prices in the secondary market has generally been less than the drop witnessed in the primary housing market.

Has the cash crunch, for players, eased over the last quarter. Do you expect the cash flows to improve in the coming months?

The cash crunch has eased to an extent as a result of offloading inventory at low prices, disposal of NPAs, reduction of land banks, arranging finance through private investors, holding back or delaying new launches, and so on. It is expected that the overall liquidity in the markets will see improvement, going forward. But there still are challenges.

These relate to depressed prices and low sales velocity, which though better than March-April levels, are far lower than those witnessed in the year-ago period.

For instance, if the prices dropped by, say, 35 per cent in the period October to December 2008, and increased today by a mere 10 per cent, the actual rise is still a fraction of the previous levels.

The impact is bigger when you see the fall and the relative rise in the context of the slow sales velocity. We still have a long way to go to recover the earlier growth rates.

The Parliamentary Standing Committee on urban housing, in its latest report, has taken note of the benefits of having Special Residential Zones (SRZs) and has asked the Centre to consider such programmes. Do you think the concept of SRZs is even more critical, in the wake of the current affordability push?

Yes, setting up SRZs could be the answer to issues of affordability and kick-starting the economy. The Government can stipulate the minimum size of the land – say, 50 acres and above – and have these SRZs bonded by compound walls just like an SEZ.

In this model, the Government should not get into land acquisitions, and the same can be done directly by the private sector.

SRZs would be areas that are excluded from domestic taxes and levies, with specific rules to promote large-scale affordable housing. For instance, each SRZ could have 3,000-4,000 affordable dwelling units.

Government support to development of these zones through concessions means that these fiscal benefits will bring down the cost of the units that are located within these SRZs. I think creation of SRZs is the need of the hour, more so in the current context.

Could you outline specifically the three most important things that industry wants from the Government?

We would like to see the three categories — affordable housing-projects with over 100 units, below 90 sq.mt of space each; integrated townships -any development that is over 20 acres; and SEZs — being accorded infrastructure status.

Secondly, we are hoping that the Government would raise deduction permissible on interest repayment for housing loan from Rs 1.50 lakh to Rs 3 lakh.

Thirdly, exemptions should be provided for affordable housing projects below 90 sq.mt on the lines of the erstwhile 80Ib (10) scheme.

Source : http://www.thehindubusinessline.com/iw/2009/07/05/stories/2009070550581500.htm

Is it low-cost or just affordable housing?

Affordable housing has been in the picture for the past few months since recession hit the economy . Developers who were busy profiting from  high-end and luxury projects, were suddenly struck by a liquidity crunch when they realised that the global economy has come crashing down. That is when the concept of affordable housing came into being in India. Till some time ago, it was hard for the common man to buy a home for himself. Today , it probably cannot be said that it is easy, but there certainly is hope for the many.

But what is the range of price for affordable housing anyway? Raminder Grover, CEO, Homebay Residential (A subsidiary of Jones Lang LaSalle Meghraj) explains, “Affordable housing is budget housing which offers quality homes at affordable prices, roughly in the range of Rs 18 lakh to Rs 40 lakh, depending on the size and location.” Turns out, that the affordable housing mantra because it isn’t just a few of the developers who have entered the arena, its number is quite large. Bhim Yadav, CEO, Falcon Realty Services Pvt Ltd explains, “Rates differ from one developer to the other, and location to location. But the current trend suggests that the individual unit prices under the affordable housing projects in India are touted to be around Rs 5 to 10 lakh for a one bedroom unit, Rs 11-25 lakh for two and three bedroom units, Rs 27 to 40 lakh for four bedroom units. The range from five lakh to 20 lakhs is what is honestly affordable. Anything beyond Rs 20 to 25 lakh for a three bedroom house is the affordability of a few only.”

Affordable housing has not only proved to be the saviour for the developers, it has brought opportunities for many to buy their dream home. Most developers are rather happy about the kind of response they have received during the booking time. Manu Garg, Director, Landcraft Developers exclaims, “We are providing all the modern facilities that are needed for contemporary living, like club, parking, parks, common security , just to name a few and the booking has already started and the response is very good.”

Affordable housing does not necessarily serve the purpose of the Economically Weaker Sections (EWS) of the society such as the Low Income Groups (LIG) and the Medium Income Groups (MIG). For them it is the low-cost housing that needs to be pushed further . “Low cost housing comes under the range of below Rs 10 lakh while offering one to two bedroom units,” explains Grover.

But why is it that affordable housing costs more than low cost housing projects? That is because affordable housing does not mean the bare minimum , it means the bare minimum facilities that can be provided for the price the buyer is ready to pay. Navin M Raheja, managing director, Raheja Developers says, “We provide all the basic amenities including community facilities and services , shopping area, parking, play areas and schools for children . Wherever there is a need for power back-up , we provide that too apart from other basics .” But that’s not it. Some of the affordable housing projects provide a facilities like, gymnasiums , swimming pools, multipurpose jogging tracks and more. However, it doesn’t seem that the EWS would actually need all these facilities. Instead, all they probably need is a home of their own. In the past few months, developers have realised that the majority of demand comes from affordable housing and they can’t only sustain with the high-end projects. So, now they are adopting a mix of affordable housing and high-end projects. Also, government has introduced a series of fiscal measures , including reduction of stamp duty rates, registration charges and income tax benefits for developers engaged in low-cost housing, which shall keep them interested in lowcost housing.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Is-it-low-cost-or-just-affordable-housing-/articleshow/4705291.cms

‘Affordable housing is a misnomer’

MUMBAI: Suddenly, affordable housing is the buzzword in India’s real estate sector. Almost every developer who got hit badly in last year’s market  meltdown is talking of getting into this segment that involves putting up houses for the masses.

Not everyone, however, is impressed. Deepak Parekh, chairman of HDFC, the company credited with setting up the housing finance market in India from the scratch, feels that in its present form, affordable housing is a `misnomer’.

In his letter to HDFC shareholders, Parekh said that although developers are now reintroducing one-bedroom apartments and, in the current falling interest rate scenario, buyers are making a comeback, the real issues are not being addressed.

“Affordable housing is not about box-sized, budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure,” Parekh wrote. “Affordable housing has to be able to cut across all income segments and has to make economic sense in terms of proximity to work place. The agenda for affordable housing requires a combined public-private collaboration and a strong political will to enforce change,” Parekh wrote.

There is serious shortages of urban land at affordable prices in India, where encroachments, irrational land use and absence of urban spatial plans are the norm. The total urban land stock in India is 2.3% of its geographical area and it houses 30% of the country’s population, Parekh wrote. So, for the regular expansion of urban land area, “the process of land acquisition and conversion of agricultural land for urban use need to be simplified”. Secondly, the floor space index (FSI) should be increased–even if it means imposing an impact fee on those benefiting from higher FSI. And above all, with higher FSI, urban infrastructure also needs to be upgraded.

Parekh also called for the revival of state housing boards. He pointed out that the recent success of mass housing projects by MMRDA in Mumbai and DDA in Delhi proved that there is huge demand for good housing, provided the price is realistic and within the common man’s reach. “One is hopeful that state housing boards will reassess their role and performance. In the recent period, many housing boards have shifted their focus to merely selling land for profit and sitting on cash surpluses. Such profits should be mandatorily ring fenced and deployed only for affordable housing,” Parekh wrote.

Acknowledging that the housing agenda is a daunting task for the new government, Parekh said the challenges of rural housing are very different from urban housing and hence solutions are also different. “For instance, key reforms such as permitting mortgage of agricultural land for residential purposes and introducing title insurance could give rural housing the much-needed thrust,” he wrote. “One is hopeful that this government will be more sensitive to both the rural and urban housing needs of the aam aadmi (the common man).”

The HDFC chief also looks forward to a real estate regulator. “There is such a compelling need for state level real estate regulators whose role would be to oversee and monitor the affordable housing agenda, promote real estate reforms, ensure transparency, especially by mandating that flats be sold only based on carpet area, and, most importantly, act as a platform to protect buyers from real estate fraud,” Parekh wrote to his shareholders.

Parekh also brought to notice a growing trend of developers asking homebuyers for full upfront payment on start up housing projects “under the guise of offering a substantial discount”. Calling them “hawa mahal (castles in the air)”, Parekh said, “There are instances where homebuyers have made the entire payment despite the developer not having commenced construction at all.” He warned that this seemingly attractive proposition could come with high risk.

Although real estate prices have come down, Parekh feels it could fall further. “Some correction in prices has happened but real estate prices are still high,” the HDFC chairman wrote.

Source : http://timesofindia.indiatimes.com/Business/India-Business/India-Business/Affordable-housing-is-a-misnomer/articleshow/4694225.cms

Punjab GOVT comes up with Stimulus to Boost Real Estate and Affordable Housing

Keeping in view the slowdown and recession in economy, the Punjab government has come out with an economic stimulus package to give boost to affordable housing and real estate sector. Disclosing this here Thursday a spokesman of the Punjab government said that the Confederations of Real Estate Developers Association of India (CREDAI) and National Real Estate Development Council (NARDECO) had recently submitted a memorandum to the Punjab Chief Minister Parkash Singh Badal and Deputy Chief Minister Sukhbir Singh Badal separately urging them to immediately announce some incentives/concessions to real estate developers in order to put the real sectoral growth back on the track on one hand and to encourage group housing for weaker sections on the other.

The spokesman further said that the stimulus package included waiver of Change in Land Use (CLU) charges for industrial land use in entire Punjab, moratorium on payment of External Development Charges till December 31, 2009 and promoters who make prepayment of EDC installments would be entitled for discount of 5%. Reduction in penal interest on over due charges from 18% per annum to 3% per annum over and above the normal interest @10% compound per annum w.e.f. September 19, 2007. Wherever Zonal/Sector Plan have been notified, the minimum area for developing a colony would be 25 acres. In low potential zone, the minimum area for residential colony would be reduced from 25 acres to 10 acres. However, no minimum area norm would apply in case of the left over pocket, i.e. where on all the sides construction had already been taken place.

The spokesman further mentioned that to promote affordable housing, it was also decided that in the earmarked industrial land use zones in the master plans across Punjab, the affordable housing as envisaged under JNNURM mission of Government of India shall be permissible and it was decided to waive CLU charges, External Development Charges and license fee/permission fee for financially weaker section houses. Stamp duty / Registration fee / Social Security cess on purchase of land for such houses would also be exempted. The stimulus package further stipulated if any promoter creates any infrastructure with prior permission of concerned Urban Development Authority outside his project that falls within the definition of external development and then he would be given credit at PWD rates. Phasing in the super mega projects has also been allowed as already permitted in other projects.

In case of Group Housing Projects outside GMADA (Greater Mohali Area Development Authority) area, the minimum area for projects would now have been reduced from 10 acres to 5 acres. In case of housing for financial weaker sections, as notified in the policy of Local Government in November, 2008, this minimum area would be 2.5 acres. It was also decided that in case of commercial pockets within municipal committee/ Corporation limits (excluding GMADA), the norms for minimum area would be the same as notified by the Department of Local Government. However outside municipal committee/ Corporation limit (excluding GMADA region), the minimum area norms would be reduced from 2 acres to 1000 sq. meters. Such plots must have a front of at least 20 meters.

The state government also decided that in case of parking for commercial projects, having no multiplexes, the minimum parking norms would be 2 ECS/100 sq. meters area. In case of commercial projects having multiplexes/ cinemas/ theatres, the minimum parking required would be 3 ECS/100 sq meters of covered area in respect of multiplexes/ cinemas/theatres component + 30% of total covered area of that component and 2 ECS/100 sq meters of covered area in respect of the balance commercial component + circulation area. Parking norms within Municipal Committee limits shall be the same as notified by the Department of Local Government. Similarly parking norms in case of group housing shall be reduced to 1.5 ECS/ 100 Sq meters from existing 2.0 ECS / 100 Sq meters. In case of any excess payment paid by any promoter to any Urban Development Authority, the authority would pay interest to the developer at the rate fixed by State Bank of India for Fixed Deposit of 180 days, as on 1st April of that financial year, the spokesman added

Source : http://www.indianrealtynews.com/real-estate-india/punjab-govt-comes-up-with-stimulus-to-boost-real-estate-and-affordable-housing.html

Jaipal Reddy favors cheaper housing loans to poor

(RTTNews) – India’s Urban Development Minister Jaipal Reddy pitched for affordable housing to the poor at 6.5 percent interest to help revive the ailing real estate industry which generates considerable employment opportunities. In a pre-budget meet with the finance minister Pranab Mukherjee, he favored cheaper loans for buying houses in the below Rs.5-lakh category and sought the extension of 7.5 percent interest scheme presently available for flats up to Rs.20 lakh to those priced at Rs.30 lakh in cities.

Additionally, he urged the finance minister to increase the income-tax limit exemption on rental income from house to 50 percent, sought more budgetary provisions for the 2010 Commonwealth Games projects and requested to sanction more money for extension of the Metro network in the national capital, and for projects under the Jawaharlal Nehru National Urban Renewal Mission, the flagship program for developing basic urban infrastructure and urban slum development.

Source : http://www.rttnews.com/ArticleView.aspx?Id=981422&SMap=1

Developers build on low margins, high volumes

Does low-cost housing make economic sense? It seems to. Developers believe the loss in margins (20 per cent in affordable housing, against 50-300 per cent in case of premium housing) can be made up somewhat by the sheer volumes of sales. Rajeev Talwar, group executive director of DLF, says: “Every group has to chart out its strategy. We have decided to take on the market by pricing our products 30 per cent lower than others, even if it means less margins.”

In any case, as Rashesh Shah, chairman of brokerage firm Edelweiss points out, the days of making a killing are over. “Sales weren’t happening anyway and developers have finally realised that they would survive only if they brought prices down,” Shah says. That realisation has prompted developers to tweak their strategies and reduce apartment sizes to attract home buyers. For instance, Unitech has stopped giving modular kitchens and is laying vitrified tiles instead of expensive marbles in its affordable housing projects, apart from cutting parking and basement space. It also restricts the total floors in a building to three-four to save on construction costs.

“The average cost of our land is Rs 200 a sq ft and construction cost varies from Rs 900-1,500 a sq ft. In affordable projects, we keep construction cost to the bare minimum. We design our buildings and use materials accordingly,” says a Unitech official.

Besides, Unitech has reduced the size of its apartments to 800-1,000 sq ft, on an average, from 2,000-2500 sq ft a couple of years ago, even as the price per sq ft has come down to Rs 3,000 from Rs 4,500 a sq ft earlier.

DLF, too, is changing its housing designs in Gurgaon to squeeze in more two-bedroom units. Scores of property developers, such as Akruti City and Parsvnath Developers, use pre-fabricated slabs in their buildings, which help them save 15-20 per cent in costs against manually-laid slabs in their buildings. While others, such as Unitech, Ansal API and Omaxe, import sanitaryware and fittings from countries such as China, Malaysia and others, as these are 10-15 per cent cheaper than Indian products.

Most developers are also focusing on completing their housing projects in 30 months instead of the earlier 36 months, using advanced technology.

Tata Housing, which is building 15,000 low-cost homes in the country, is keeping construction cost to about Rs 700 a sq ft by sharing returns with the land owners, according to Managing Director Brotin Banerjee.

The company is in advanced stages of talks with the Delhi-based Raheja Developers (which owns the land) to initiate a similar low-cost project at Manesar near Gurgaon. The apartment size will range between 283 sq ft and 465 sq ft each. Plans are on the anvil to start similar projects, called Shubh Griha, in Chennai and Kolkata and, subsequently, in other Tier-I and Tier-II cities.

What also helps are the measures announced by the government — special interest rates for sub-Rs 20 lakh home loans. Public sector banks charge a maximum interest rate of 8.5 per cent for loans below Rs 5 lakh and 9.25 per cent for those between Rs 5 lakh and Rs 20 lakh. A marginal part was also played by the lower input costs of steel and cement, which has seen some softening in the last 12-18 months.

All’s not over for premium
Unitech’s GM (Corporate Planning) R Nagaraju could have been exaggerating when he said premium housing had become extinct. The fact is quite a few companies are still operating at different price-points and the real estate market has got segmented,though with a bias towards low-cost projects.

For instance, just seven days after Tata Housing announced its Shubh Griha project, group company Tata Realty announced a high-end residential project in the Chennai special economic zone. At Rs 13,000 a sq ft, the price tag for the smallest apartments would be Rs 2.6 crore and the largest Rs 3.9 crore.

The complex would have about 180-200 apartments and is getting an encouraging response. For Tata Housing, too, Shubh Griha is just one of the eight projects the company is taking up. But, going forward, the company expects low-cost housing to have a 20-25 per cent share in the total mix, while another 25-30 per cent would be accounted by mid-income homes, with high-end products taking up the balance.

Abhishek Lodha, director of the Lodha group, says the company would build premium housing for margins, and mid-income housing for volumes.

The company has launched five mid-income housing projects in Mumbai and an equal number of high-end projects in South Central Mumbai. The Lodha Bellissimo in Mumbai’s Mahalaxmi area, for example, is offering super-luxury apartments spread across 48 floors.

Or, take Emaar MGF, for example. The company recently launched ‘The Terraces’ with an aim to cater to the growing mid-market segment. Phase-I of the project is expected to be completed by 2010, with units priced at Rs 36 lakh onwards. It would house three independent dwelling units, with the ground floor priced at Rs 46 lakh, first floor at Rs 38 lakh and the second floor at Rs 36 lakh — not exactly low-cost, but affordable for the mid-income population. The company, however, is also operating at a much higher price-point too — Commonwealth Village, for example, despite the temporary hiccups.

Many also say it’s just a matter of time before the premium housing market comes alive. Aditi Vijayakar, executive director (residential), Cushman & Wakefield, says: “In the future, as the demand for luxury projects gains momentum, big players will once again change their portfolio to high-end apartments.”

Then there are, of course, recession-proof areas, like Mumbai’s Bandra or Santa Cruz. Prices continue to rule high at Rs 20,000-40,000 a sq ft, mainly because of the demand-supply mismatch and the aspirational value. Real estate developers all over the country must be hoping the tag extends to many other areas as well.

Source : http://www.business-standard.com/india/news/developers-buildlow-margins-high-volumes/360489/

Realty firms focus on ‘affordable’ homes to boost sales, profits

Unitech launched its new initiative branded Uni Homes, which will have apartment sizes starting at 660 sq. ft

New Delhi: To boost slowing demand in the realty sector and tap the growing market for affordable housing, realty firm Unitech Ltd will build 20,000 homes this year, priced between Rs10 lakh and Rs30 lakh, launching its first such project in Chennai this month.
India’s second largest property developer by market value on Tuesday launched its new initiative branded Uni Homes, which will have apartment sizes starting at 660 sq. ft.

The realty firm said its second such project will be constructed in Manesar in Haryana, on the outskirts of New Delhi. The apartments in Chennai would cost around Rs10 lakh and those at Manesar around Rs15 lakh, it said.

Faced with falling sales on the back of an economic slowdown, India’s realty companies have been launching what they call affordable housing because they say there is robust demand in this segment.
Earlier this year, Unitech had launched a project in Gurgaon, south-east of New Delhi, where apartments are priced between Rs28 lakh and Rs40 lakh. All 750 homes were sold in 45 days, the firm said. Encouraged by the response, it launched another project, also in Gurgaon, with prices at Rs35-45 lakh. It has so far sold 180 of the 200 flats in that project.

In May, Mumbai-based Tata Housing Development Co. Ltd launched a low-cost housing project branded Shubh Griha in Boisar, around 50km north of Mumbai. The apartments of 283 sq. ft, 360 sq. ft and 465 sq. ft would cost between Rs3.9 lakh and Rs6.7 lakh, the company said.

In March, Mumbai-based developer Lodha Group launched Casa Bella, an integrated township project in Dombivalli, a Mumbai suburb, where apartments would cost between Rs11.7 lakh and Rs24.3 lakh.

In August, Bangalore-based realtor Puravankara Projects Ltd launched a unit called Provident Housing and Infrastructure Ltd to construct apartments priced at Rs10-20 lakh in cities such as Bangalore, Chennai, Hyderabad, Coimbatore and Mysore.
In May last year, Omaxe Ltd, another New Delhi-based developer, set up a subsidiary called National Affordable Housing and Infrastructure Ltd to build homes in the Rs3-15 lakh category in smaller cities such as Sonepat in Haryana, and Nimrana and Bhiwadi in Rajasthan.
“There is a demand in the affordable housing segment. Interest rates have come down and that helps because people can take loan at a cheaper cost,” said Anshuman Magazine, managing director of CB Richard Ellis, a real estate consultancy firm. “There is also a renewal of confidence among buyers.”

Unitech expects to start its Uni Homes projects in Hyderabad, Bangalore, Kolkata and Lucknow.

The company said these projects will all be well located. “The project in Chennai will not be very far away from the city.”
Unitech plans to invest Rs1,700 crore this year to build these homes.
“This is just the construction cost,” the spokesperson said. “Land for the projects has already been paid for,” the spokesperson said.
The real estate company says it owns around 8,000 acres of land in various cities, on which it can develop some 500 million sq. ft of residential and commercial space.

Source : http://www.livemint.com/2009/06/10004958/Realty-firms-focus-on-8216a.html?h=B

Unitech launches Uni-Homes in Sector-117,Noida

Unitech Uni-Homes Project
Unitech Group Soon Launching New Affordable Residential Housing Project Uni-Homes Sector 117 FNG Express Highway Noida. Apartments ranging 2BHK around 23 Lacs, 3BHK around 31 Lacs Rs pre register your self not to miss life time opportunity. Unitech Uni-Homes is beautiful well planned Housing Township in Delhi NCR and is spread over 25 acres of land. Uni-Homes are luxury Affordable Residential Housing Apartments with all Modern Amenities.
Location of Unitech Uni-Homes Sector – 117 FNG Expressway Noida, Well connected to Delhi, 10 Minutes drive to nearest Metro Station in Sector 32, 2 Minutes drive from FNG Express Highway, 12-15 Minutes drive from Atta Market Sec 18 Noida, 7-10 Minutes drive to Fortis Hospital, 35 Km from Indira Gandhi International Airport, 10 Minutes drive from Shipra Mall Common Amenities of Unitech Uni-Homes Shopping Arcade, Temple, Schools, Medical facility, ATM, Banks, Transport to City Centre, Landscaped Green Area, Children play area, Ample Parking Area, Community Hall, Party Hall, Clubhouse, Solar Water Heating, Water Treatment Plant, Power Back-up for Utilities, Round the Clock Security, Fire fighting system, Gymnesium, Swimming Pool, Tennis Courts
Types———–Size————Price
1BR-1T————580————2146000
2BR-2T————776————2871200
3BR-2T————951————3518700
3BR-2T————990————3663000
Booking Amount of Unitech Uni-Homes
Rs 2 – 3 Lacs
About Developer
Unitech Group is one of the major township planning and real estate development companies in India. Unitech entered civil engineering in 1974 with its sights firmly set on the future. It has an impressive mélange of heavy construction, leisure and entertainment projects, hospitality business and development of mini cities/townships construction of residential and commercial complexes, including shopping malls and various types of dwelling units. Unitech commands strong brand equity as also a pan India presence with focus on residential development – the most profitable real estate segment.
Loans & Property Curry

116-B, Shahpur Jat,
Khelgaon Marg, Delhi-110049,

Source : http://www.pressreleasepoint.com/unitech-launches-unihomes-sector117noida-9999432002-9873333348

Affordable Housing Picks up Market in Delhi- NCR

After a bad year for the property market sales for affordable houses finally seem to be picking up in Delhi-NCR and right pricing and location seems to be doing the trick. Two housing projects in Delhi-NCR have been fully booked within days of launch. According to data available, 3300 flats in Jaypee Greens new project ‘Aman’ on Noida-Greater Noida expressway were booked on day 1. These flats were priced at Rs 2100 per square feet. Last year Jaypee had launched flats in the range of Rs 4500-6000 per square feet along the same expressway. Also, 1000 independent floors in BPTP’s project Park Elite in Faridabad were over subscribed. BPTP received 3700 bookings worth Rs 80 crore for the project. Analysts say that builders have finally come around to target middle class customers with more liquidity being made available and interest rates going down further.

Santosh Kumar, CEO of operations at JLLM, said, “Prices are realistic, which is basically the developer making a 25-40 per cent margin. Secondly the new government is focusing on infrastructure, so there’s also an indication that interest rates may go down again.” However, it’s not only end users who have started queuing up for affordable houses. Reports suggest atleast 30 per cent of these flats have been booked by investors and brokers. Anuj Sharma, a real estate analyst said, “Investors have made a lot of bookings and in future they will get a good premium out of it say 10-15 per cent.” Well, the apprehension that real estate prices have approached the bottom has finally seen demand picking up for affordable projects. But the big question is whether these projects will be completed on time.

Source : http://www.indianrealtynews.com/real-estate-india/affordable-housing-picks-up-market-in-delhi-ncr.html

Now, affordable housing in NCR

After a bad year for the property market sales for affordable houses finally seem to be picking up in Delhi-NCR and right pricing and location seems to be doing the trick.

Two housing projects in Delhi-NCR have been fully booked within days of launch.

According to data available, 3300 flats in Jaypee Greens new project ‘Aman’ on Noida-Greater Noida expressway were booked on day 1.

These flats were priced at Rs 2100 per square feet. Last year Jaypee had launched flats in the range of Rs 4500-6000 per square feet along the same expressway. Also, 1000 independent floors in BPTP’s project Park Elite in Faridabad were over subscribed. BPTP received 3700 bookings worth Rs 80 crore for the project.

Analysts say that builders have finally come around to target middle class customers with more liquidity being made available and interest rates going down further.

Santosh Kumar, CEO of operations at JLLM, said, “Prices are realistic, which is basically the developer making a 25-40 per cent margin. Secondly the new government is focusing on infrastructure, so there’s also an indication that interest rates may go down again.”

However, it’s not only end users who have started queuing up for affordable houses. Reports suggest atleast 30 per cent of these flats have been booked by investors and brokers.

Anuj Sharma, a real estate analyst said, “Investors have made a lot of bookings and in future they will get a good premium out of it say 10-15 per cent.”

Well, the apprehension that real estate prices have approached the bottom has finally seen demand picking up for affordable projects. But the big question is whether these projects will be completed on time.

Source : http://profit.ndtv.com/2009/06/03234043/Now-affordable-housing-in-NCR.html

PEs homing in on affordable buys

NEW DELHI: The new wave of launches in the affordable housing segment is attracting the attention of private equity (PE) players, which had for  more than a year shunned the real estate sector struggling with diminishing sales, tight credit and clouded economic forecasts.

Although PE firms are yet to strike any fresh deal in the realty space, which hit a downturn last year, funds such as Red Fort Capital Advisors and Kotak Realty Fund are scouting for opportunities in low-cost and mid-income housing projects.

“The top-end category in the real estate space is saturated. Several firms are coming up with affordable housing projects ranging from Rs 3 lakh to Rs 10 lakh across India and we are keen to invest in them,” said Red Fort Capital Advisors director GB Singh.

The firm plans to invest 75% of its Rs 400-crore corpus in affordable housing over the next two years and is close to clinching two deals in the NCR region.

Red Fort Capital’s current portfolio includes investments in Prestige Group (Bangalore ), Godrej Properties (Kolkata) and Indu Group (Hyderabad). Kotak Realty Fund CEO S Srinivasan is looking to close some deals in low-cost and mid-income housing projects over the next few quarters.

Mr Srinivasan, who manages $800 million in asset, struck his last transaction 16 months ago. “Now the valuations have come down and the gap between developers’ and our expectations has narrowed,” he said.

The four-year realty boom ending in 2007 saw demand for houses, offices and mall spaces surge as companies expanded and consumers, encouraged by rising incomes and easier access to credit, bought homes. A strong demand also saw home prices going up almost three times and developers shifting focus to high-end homes lured by higher margin.

But a downturn, caused by poor investor sentiment, sky-high property prices and high interest rates, has forced developers to focus on low-priced homes.

“Private equity players are interested only in affordable housing these days. No one wants to invest in high-end housing projects or commercial projects these days,” says Unitech MD Sanjay Chandra, who has been negotiating with a couple of PE funds for middle-income housing projects.

Recently, Tata Housing’s launch of low-cost residential project near Mumbai received tremendous response. Many other players, including Raheja Developers, Unitech, Omaxe, Gaursons and BPTP have either launched low-cost housing projects or are in the process of launching them.

Source : http://economictimes.indiatimes.com/Real-Estate/PEs-homing-in-on-affordable-buys/articleshow/4578227.cms

Affordable Housing- The New real Estate Mantra

Hit hard by the slowdown, real estate players are now going innovative and trying to partner with the government to beat the low demand. Real estate players are looking to tap the 4.33 lakh people, who were not allotted houses in the MHADA scheme and have approached the government with a proposal where they can cater to these potential buyers. The Builders’ Association of India (BAI), which includes 10,000 real estate players throughout India, has written to the chief minister of Maharashtra requesting him to appoint MHADA and CIDCO as the nodal agencies for carrying out projects under the controversial Slum Rehabilitation Authority (SRA) scheme. Only 3,683 of the 4.33 lakh applicants were allotted houses in the random selection on Tuesday.

In a letter, a copy of which is with ET, BAI asked for MHADA and CIDCO to be appointed as the “official agency for development” for executing SRA projects. “These agencies could offer free rehabilitation component houses to slum dwellers by constructing multi-storied building as already provided in the SRA,” the letter added. “While, on one hand, there is a low demand due to the slowdown, there are over four lakh buyers, who are willing to shell money to buy houses,” said Anand J Gupta, general secretary, BAI. Under the BAI proposal, the government and the real estate players can come together and form a JV and accommodate these potential buyers. If the proposal is accepted, it is believed that the real estate players, who are going through quite a rough patch for a while now, would tend to benefit.

The agencies can outsource the construction work to the real estate developers and also stand to get a ready market for the houses from those who had applied under the MHADA scheme, the BAI says. “It is a win-win situation. We get business because we will be constructing the buildings, while the MHADA is able to satisfy the growing number of people interested in affordable homes,” says a builder.”

Source : http://www.indianrealtynews.com/real-estate-india/affordable-housing-the-new-real-estate-mantra.html

Realtors eye state’s affordable housing plans

MUMBAI: Hit hard by the slowdown, real estate players are now going innovative and trying to partner with the government to beat the low demand. Markets cheer election results
 
Real estate players are looking to tap the 4.33 lakh people, who were not allotted houses in the MHADA scheme and have approached the government with a proposal where they can cater to these potential buyers.

The Builders’ Association of India (BAI), which includes 10,000 real estate players throughout India, has written to the chief minister of Maharashtra requesting him to appoint MHADA and CIDCO as the nodal agencies for carrying out projects under the controversial Slum Rehabilitation Authority (SRA) scheme. Only 3,683 of the 4.33 lakh applicants were allotted houses in the random selection on Tuesday.

In a letter, a copy of which is with ET, BAI asked for MHADA and CIDCO to be appointed as the “official agency for development” for executing SRA projects. “These agencies could offer free rehabilitation component houses to slum dwellers by constructing multi-storied building as already provided in the SRA,” the letter added.

“While, on one hand, there is a low demand due to the slowdown, there are over four lakh buyers, who are willing to shell money to buy houses,” said Anand J Gupta, general secretary, BAI.

Under the BAI proposal, the government and the real estate players can come together and form a JV and accommodate these potential buyers. If the proposal is accepted, it is believed that the real estate players, who are going through quite a rough patch for a while now, would tend to benefit.

The agencies can outsource the construction work to the real estate developers and also stand to get a ready market for the houses from those who had applied under the MHADA scheme, the BAI says.

“It is a win-win situation. We get business because we will be constructing the buildings, while the MHADA is able to satisfy the growing number of people interested in affordable homes,” says a builder.”

Source : http://economictimes.indiatimes.com/News-/Realtors-eye-states-affordable-housing-plans/articleshow/4567553.cms

Tata Housing eyes Rs 700 cr from low-cost projects

Tata Housing Development Company, a unit of Tata Sons, expects to earn Rs 700 crore in revenue from low-cost housing in the next four years, a top company official has said.

Tata Housing is launching over 1,000 low-cost houses under the brand “Shubh Griha” priced between Rs 3.9 lakh and Rs 6.7 lakh in Bhoisar, on the outskirts of Mumbai, and plans to launch around 4,000 such houses across other cities in the next four years, mainly targeting industrial workers and other low-wage earners.

The company is targeting Rs 15,000 crore revenue by FY13 from its projects, covering an area of 20 million square feet. It plans to build 10,000-13,000 homes by then. The company aims to earn 5 per cent of its revenue from low-cost houses.

“Low-cost projects have more velocity and can be completed in two years. We see huge opportunity in this space, especially in industrial belts,” said Brotin Banerjee, managing director and chief executive of Tata Housing.

The company is launching two-three such projects in Bangalore and the national capital region in this fiscal and plans joint development with land owners, wherein it will share a percentage of revenues with the owners of the land, and outright of purchase of land in other cases, according to Banerjee.

A host of companies such as Omaxe and Ansal API have launched low-cost apartments to target the low-wage earners and generate cash in the downturn. While New Delhi-based Omaxe has launched 5,000 apartments in Rs 5.99-8.99 lakh range at Mayakhedi in Indore, Ansal API has launched 4,000 low-cost apartments in Jaipur, Jodhpur, Agra and Meerut.

“Our revenues are doubling every year and we hope to continue by being present in different categories and launching innovative products,” said Banerjee. Currently, the company has more than 10 million square feet under development.

Banerjee says more land is now available for developers and land prices have come down to realistic levels. “Earlier, land prices used to escalate within a month. Prices have hit their bottom and I expect them to remain sluggish for the next eight-nine months,” he said.

Source : http://www.google.com/url?sa=X&q=http://www.business-standard.com/india/news/tata-housing-eyes-rs-700-crlow-cost-projects/357607/&ct=ga&cd=IKkcjF1VKlg&usg=AFQjCNFRhGsdR8mKdu4SCTncXKC8v_Ye1Q

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

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/

Rajkot: Forging ahead with affordable houses

Once the capital of princely state of Saurashtra, Rajkot has now become one of the fastest growing property markets in Gujarat. While slowdown has  hit the city’s premium segment hard, the affordable housing segment has picked up pace now.

Located on the banks of Aji river, the largest city in the entire Saurashtra peninsula is now trying to satiate the increasing demand for affordable housing from middle-class families. “Most of the affordable housing projects are coming up on the Jamnagar road where land prices are relatively cheaper. At present, there are at least 1,500 residential units that are under construction and many more have been planned,” said a leading city-based developer Mukesh Seth.

“The developers who were constructing four bed-room luxurious flats and bungalows just a year ago, are now concentrating on building two- and three-bedroom flats,” Mr Seth said. “Owing to the slowdown, people have become more cautious in buying luxurious property. Though most of them (including NRIs) have the monetary resources, they are waiting for the prices to fall in the premium segment. However, on the contrary, there is a lot of demand in the affordable housing segment,” he added.

The land prices in and around Rajkot have fallen by 5-10%, while the rates of commercial and residential properties have come down by about 15% since November 2008.

“The correction in Rajkot’s realty market is not as big as that in Ahmedabad, Mumbai or Delhi. Moreover, the demand for residential property has not slipped in the city. Though the real estate market in Rajkot is not as big as that in Ahmedabad, the upper middle class and rich families living in smaller towns and villages in the regions surrounding Rajkot consider it a status symbol to own property in the city,” Mr Seth said.

The city, founded as a small fortified town in 1608 AD, is very important socially and culturally in the region. It was to become the capital of the then Saurashtra state from April 1948 to October 1956, before getting merged into the bilingual Bombay state on November 1, 1956. It later became part of Gujarat, when a separate state was carved out on May 1, 1960.

“Apart from being a hub for automobile ancillaries, machine tools, diesel engines, Rajkot has also become a centre for education and medical services,” he said, adding that big corporate hospitals such as Wockhardt and Sterling had set up base in the city.

Currently, the residential properties cost between Rs 1,100 and 1,500 per sq ft in the city outskirts, while those on prime locations within the city, for instance the Kalawad road, cost between Rs 2,500 and 4,000 per sq ft. Similarly, the commercial properties are priced between Rs 3,000 and 13,000 depending on the locations within the city.

The developers too feel that the city will continue to grow on the realty map of the country. Every year about 50,000 people get added to the population of the city. “To cater to this demand, the developers in the city construct about 12,000 residential units annually. This demand is expected to grow further,” said Mr Seth whose company has been in the construction business for the last 35 years.

In the past few years, the real estate market in Rajkot has seen a steady growth after major players such as Sahara, Rahejas, DLF, Parshvnath and others put Rajkot on their expansion radar. The city’s realty market currently has a ratio of 30:70 in favour of residential property. In the coming months, this ratio may undergo a change and move to 40:60, feel real estate developers.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Property/Rajkot-Forging-ahead-with-affordable-houses/articleshow/4390442.cms

Mahindra Lifespace plans affordable homes in Nagpur

Mumbai: Real estate firm Mahindra Lifespace Developers Ltd, a subsidiary of auto maker Mahindra and Mahindra Ltd, is the latest to join the so-called budget housing bandwagon as more buyers shun pricier projects for affordable homes.

The firm, known more for its of high-end projects, particularly in Mumbai, is building 1,500 apartments in a special economic zone (SEZ) in Nagpur, with price tags of less than Rs3,000 per sq. ft, said Pawan Malhotra, chief executive of Mahindra Lifespace.
The SEZ is part of an international airport that would function as a cargo hub, and includes a 25-acre residential project. SEZs are economic enclaves that enjoy tax holidays and other financial incentives.

The venture with BE Billimoria and Co will see an investment of Rs500 crore in the next 4 years
Property prices in and around Nagpur, Maharashtra’s third largest city by population, are typically in the range of Rs1,600-2,600 per sq. ft, a consultant at property advisory Jones Lang La Salle Meghraj said, requesting anonymity.
“The idea to provide housing that would give the target buyers good value for money. The SEZ and the airport will demand at least 1.5 million sq. ft of development once all the industries come up,” Malhotra said.
The Nagpur residential project, a venture of Mahindra Lifespace and BE Billimoria and Co., will see an investment of Rs500 crore in the next four years.

Mahindra Lifespace also plans mid-segment apartments starting at Rs3,000 per sq. ft alongside more expensive villas in its Chennai SEZ.
In the past eight months, as the Indian realty market began slowing following a global slump, developers such as Puravankara Projects Ltd, Omaxe Ltd and Ansal Properties and Infrastructure Ltd have leant towards more affordable housing projects. Others such as DLF Ltd and Sobha Developers Ltd have cut prices by 15-30% in some of their projects.
But at a time when developers are struggling to generate liquidity, Malhotra says Mahindra Lifespace has Rs260 crore in hand. Its standalone revenue for the year ended December rose 28% to Rs55.7 crore.

Formed in 2001, Mahindra Lifespace, earlier known as Mahindra Gesco, has nearly 4 million sq. ft of development in various cities.
The company stopped buying land nearly two years ago and is now pursuing joint development projects. A 10 February report by brokerage Motilal Oswal Securities Ltd says the firm has no major borrowings against land it has bought.
Macquarie Research, an arm of Australia’s Macquarie Bank Ltd, says in a February report that Mahindra Lifespace has low debt levels, primarily due to its conservative management style, and relatively slow pace of acquiring land and launching few projects in the past three years.

The company’s gearing, or debt as a percentage of equity capital, is only 0.2%, says the report. In comparison, rival Unitech Ltd’s gearing is at 34%, it says.
“The company has been conservative and restrained during times when liquidity was available with multiple debt options and other developers availed of them,” said Unmesh Sharma, an analyst with Macquarie Research.

Mahindra Lifespace shares have fallen 75% from Rs665.10—its 52-week high reached last May—to Rs161.95 at close on Monday. The markets were closed on Tuesday.

Source : http://www.livemint.com/2009/04/07215720/Mahindra-Lifespace-plans-affor.html

Pune’s growth key to cheap housing’

PUNE: In a market bedevilled by high prices and low availability of housing units, there is a need to segregate the approaches to “affordable  housing” and “housing for the economically weaker sections”, the city’s leading real estate players said on Wednesday.

Participating in a round table debate on the present housing scenario in Pune, hosted by the Times of India Group of publications, the developers also stressed upon the need to facilitate both horizontal and vertical growth of the city so that more housing stock can be created and prices brought under control.

Admitting that the present pricing structure of houses in Pune and surrounding areas is beyond the reach of the middle class, D S Kulkarni, the DSK Developers Limited’s chairman and managing director, said it is a misnomer that the demand for one bedroom homes is on the rise. “Aspirations and needs of the middles class have changed drastically and people try to stretch their budgets to buy at least a two bedroom apartment so that they can pursue a certain lifestyle,” he said.

If the government follows a practical approach towards houses for economically weaker class, it will have to offer liberal tax relief to bring down the input cost of such housing, he suggested. If city can be expanded upto 80 to 100 km on all sides and the government provides basic infrastructure such as roads, efficient public transport, water and electricity, it is possible to offer houses at the rate of Rs 1100 per sq ft, Kulkarni said.

Agreeing with Kulkarni, Anand Jog, director, Darode Jog Properties, said approaches such as limited height buildings, quick possession and appropriate unit sizes will bring the total ownership cost of homes within the reach of everyone. He also pointed out that those who are aspiring to buy homes in the Rs 10-15 lakh bracket are finding it difficult to get loans from banks and financial institutions as these institutions are following the approach of processing cost per loan. “They prefer to give one loan of Rs 30 lakh instead of giving three loans of Rs 10 lakh each,” he noted.

According to Satish Magar, managing director, Magarpatta City Development Corporation, a number of input cost such as development charges and premiums recovered by the municipal authorities are beyond the control of the developers. The extent of such costs in the total cost of houses is very high, he said. If rules are modified to allow high density housing, the land cost will be shared over a number of units, he added.

Rajesh Sankla, director of Siddhivinayak Developers, said that the land prices on the outskirts of Pune are still fairly reasonable and don’t carry the burden of high municipal taxes and charges. The difference in the local levies can be enough to create infrastructure like roads and street lighting, he observed.

A separate thought process should guide slum redevelopment or housing for economically weaker sections, the participants felt. Kulkarni said the government should build low rise houses and allot itself the transfer of development rights for such construction. The builders can purchase this TDR and replenish the government expenditure, he said.

MHADA chief Ankush Kakade said his organisation is now following the concept of integrated housing and offer the residents a complete planned residence. These colonies will be self sufficient in many respects and offer homes of varied sizes according to needs of the buyers. All the participants, however, concurred that the city lacks efficient mobility options which has led to reluctance on part of buyers to consider projects away from the city.

Source : http://timesofindia.indiatimes.com/Pune/Punes-growth-key-to-cheap-housing/articleshow/4352125.cms

Godrej to set up Rs 5,500 crore housing plan

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

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

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

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

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

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

Slowdown force developers to look for affordable housing

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

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

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

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

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

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

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

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

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

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

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

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

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

Developers Target the Bottom Segment to Generate Liquidity

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

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

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

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

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

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

Strong growth in small homes

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

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

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

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

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

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

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

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

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

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

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

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

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

20 March 2009 Business Standard

Demand for affordable housing in India is still far outstripping supply

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

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

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

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

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

About Property Abroad

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

Source : http://www.pr-inside.com/demand-for-affordable-housing-in-india-r1129734.htm

Now, DLF homes for the ‘aam aadmi’

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

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

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

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

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

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

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

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