Property prices likely to go up in December

If you are looking to buy a house in Mumbai or in the National Capital Region be ready to take a big hit on your pocket. But south India may still hold a bargain or two, reports CNBC-TV18’s Sunanda Jayaseelan.

Real estate developers have started hiking prices of their residential projects in Mumbai and the National Capital Region. So, if you are in the market to buy a home, you may want to look elsewhere like South India, for instance. Experts say prices in this region are still stabilising and in some cases, even correcting.

Let’s take a look at price movements in the last quarter. Residential property prices in Mumbai rose 3-6% across developers. While NCR saw prices rise between 2% and 19%. Hyderabad, on the other hand, saw no hikes, while property prices in Chennai and Bangalore saw a dramatic correction. In some pockets in Bangalore, prices have fallen by as much as 5%.

Bangalore-based Sobha Developers has seen sales this quarter come in 57% higher that the previous quarter. It expects to have sold 2 million square feet of residential space by the end of this fiscal, and says volumes, rather than price hikes, will help it maintain margins. JC Sharma, MD, Sobha Developers, says, “As far as Sobha is concerned, we have good inventory. We don’t see need to hike prices. I see us maintaining prices going forward.”

But analysts say this trend may not last long. Anurag Mathur, MD – India, Cushman & Wakefield, says, “Prices are expected to go up by December. Not sharply, but it will still go up. I anticipate that happening at least in prime projects.”

So, if you are in the market for a house, you will have to hurry. Industry experts say that developers are actually just adopting a wait-and-watch policy with regard to price increases. DLF, for example, has already announced a marginal hike in prices in Bangalore. Experts point out that this could just give other developers the impetus needed to start price hikes again.

Source : http://www.moneycontrol.com/news/cnbc-tv18-comments/property-prices-likely-to-go-updecember_426649.html

Residential property prices in north India inching up

Demand in the real estate sector has returned . And, with it, developers have raised prices of their products in most of the markets in north India.

However, prices in cities in south India have stabilised, with the exception of Bangalore, which is still witnessing a slight correction , according to a new report prepared by realty consultant Cushman Wakefield. Even after all this, prices are still lower than what they were a year ago. As the market has revived, a large number of developers have jumped in the fray with new launches.

This is expected to put some downward pressure on price points. However, with cash flow improving, developers may not go for distress selling soon.

According to the report, NCR and Mumbai have seen values climb up with the return of investors and an end users interest in the realty market in the third quarter ending September 2009. Certain suburban markets like Noida and Gurgaon witnessed even higher growth due to heavily discounted prices in the previous quarter ending June – particularly in the new launches.

After a sharp decline in the last few quarters, capital values have started to strengthen and register marginal appreciation across most micro-markets . Cyclical demand with festive season has resulted in strengthening of prices. The launch of new projects catering to the mid-segment witnessed heightened activity resulting in price escalation. Gurgaon and Noida are the key locations to witness this activity and registered the highest growth, 19% and 16%, respectively, during the quarter.

Gurgaon witnessed the highest growth in capital values in the mid-segment over the last quarter. By September quarter, capital values of apartments in the suburban city are quoting in the range of Rs 4,000 to 6,500 per sq ft. In the periphery of Gurgaon, the prices are as low as Rs 2,400 per sq ft.

After Gurgaon, Noida witnessed the sharpest appreciation in the prices at 16%. This is essentially due to the increase in purchase activity in the new projects catering to the mid-segment , said the report. At present, the prices are in the range of Rs 3,200 to Rs 5,500 per sq ft.

However, values are still below their all-time highs by about 5-12 % in NCR, 10-20 % in Bangalore, 6-18 % in Mumbai, 10-30 % in Pune, 6-12 % in Chennai, 7-20 % in Hyderabad, and 5-15 % in Kolkata.

Aditi Vijayakar, executive director (residential services) at Cushman & Wakefield said, “The price and the buyer’s sentiment are critical in the current market as key parameters influencing sales. Capital values in select locations in NCR, Pune and Mumbai are likely to see growth in the coming months. However, if prices increase too much too soon, there is a likelihood of them correcting again shortly; the ideal graph representing recovery should be gradual and in line with the demand that calls for a period of considerable stabilization before the hike. In the present scenario, the affordable housing segment holds the largest share of the demand pie and hence, any significant price increase in the high- and mid-segment would lead to another phase of corrections”

The appreciation of the rental values in the high-end residential locations of Delhi in the range of 8-12 % stands testimony to the increase in leasing activities in the region, the report points out. The rental value in suburban locations such as Gurgaon and Noida stabilized over the quarter despite addition of new stock due to latent demand in the region.

Source : http://economictimes.indiatimes.com/Residential-property-prices-in-north-India-inching-up/articleshow/5253761.cms

Corporates Strike Realty Deals In Bangalore

DLF, Embassy & Prestige have divested land and property assets in the city.

After a long slumber, Bangalore’s real estate market is ticking with big-bracket property deals. Corporates appear to be leading this trend of buying land and property assets from developers, who may be looking at such divestments to generate more liquidity into the system.

At least three deals in the Bangalore landscape have been struck or are in advanced stages of closure.

Realty major DLF is understood to have sold a 15-acre patch of land in Whitefield, one of Bangalore’s IT suburb in the east, to NetApp India, the arm of US-based data storage equipment maker NetApp Inc, in a deal valued at Rs 120 crore, said a source familiar with the transaction.

Prestige Group has, through an SPV, sold 60,000 sq feet prime property on Brunton Road in downtown Bangalore to Sun Network family for a consideration of Rs 60-crore deal. This transaction, which was in the making for some months, was clinched in recent weeks, with the buyers expected to use the property as a corporate office for Sun Network.

And, Embassy Group is close to divesting a prime patch just off Kasturba Road, in close proximity to UB City and Bangalore’s lungs-Cubbon Park, in favour of HDFC Realty Fund for a sum of Rs 60-70 crore. HDFC Realty Fund may be roping in a local developer for constructing a high-rise residential project of approximately 1 lakh sq feet, on the 36,000 sq ft property, overlooking the city landmarks. Earlier, Embassy Group, which has developed some of Bangalore’s landmark office buildings, had similar plans.

While Prestige Group chairman Irfan Razak confirmed the deal to VCCircle, mails sent to NetApp India president Vikram Shah and spokespersons of DLF and HDFC elicited no response at the time of posting the story.

NetApp India may be looking at a huge office space development in Whitefield. In earlier media reports in 2008, NetApp had said, it would hike its head count in India to 2,000 (from 750 at that time) and would look at investing up to $300 million in the country.

A realty consultant, requesting anonymity, said, that there is a heightened trend towards buying assets by corporates. “There is lot of interest. In recent weeks, I have been swamped with calls,” says L J Hooker chief operating officer Chaitanya Manohar. But, it is still early days yet and till deal closures take place, we can only call it increase in interest, says another tracker.

A few days back, VCCircle reported on Oracle’s talks to buy one million sqft office space in one of the upcoming projects of Brigade Enterprises for Rs 500-550 crore. This deal, if it goes through, will be one of the biggest office space acquisitions in India recently. Industry trackers said these transactions signal an upturn in the market sentiments, with realty firms like Brigade, Embassy and Prestige cashing in on the early signs of revival.

Source:http://www.vccircle.com/500/news/corporates-strike-realty-deals-in-bangalore

Brigade plans budget housingBrigade plans budget housing

Brigade group, Bangalore-based real estate developer, is testing the waters of affordable housing with ‘Brigade Value Homes’ which it plans to launch in Bangalore. The company is looking to invest Rs 2,000 crore on building compact residential properties in the next four years.

The company will build low-cost residential projects on Kanakapura Road, Devanahalli Town, Mysore Road and K R Puram in Whitefield, totalling 10,000 homes with a base price in the range of Rs 10-26 lakh, of which 2,500 units will be available for registration in the first phase.

A one BHK flat of 500-550 sq feet costs around Rs 10 lakh to Rs 13 lakh. Two BHK with 850-900 sq feet is priced in the range of Rs 17 lakh to Rs 21 lakh while three BHK with 1,050-1,100 sq feet is priced at Rs 21 lakh to Rs 26 lakh. The company plans to launch the properties in the next 6-12 months.

“To a certain extent, the compact home project is a way to ascertain the demand for a specific location or a type of apartment. There is a huge demand at the bottom of the pyramid. With urban population expected to double in the next few years, we expect the demand for affordable housing to go up,” said M R Jaishankar, chairman and managing director, Brigade Group.

Funding for the new initiative will come through 1ô3rd each from internal accruals, customer advances and institutional funds. While the company has no plans to set up a subsidiary for low-cost housing, the Devanahalli project will be operated as an SPV with BCV Developers, a joint venture of Brigade Group and Classic Valmark. Other cities being looked at for future expansion under the affordable housing initiative are Mysore, Mangalore and Chennai. At Mangalore, the company has soft launched a residential project ‘Brigade Sparkle’ which will offer 230 units priced between Rs 18 lakh and Rs 25 lakh.

The Brigade group, with interests in residential, commercial property as well as hospitality is developing projects in these sectors and is expecting to get approvals for nearly 12-15 projects by March 2010. This includes projects in Hyderabad, retail property and business hotel in Chennai and SEZs in Mangalore and Kochi. It is developing close to 35 million sq feet presently and is looking to develop 12 million sq feet in the coming months.

Early this year, the company had spoken about diluting the stake of its wholly-owned susidiary, Brigade Hospitality Services (BHSL) for raising capital. Jaishankar said JP Morgan had been mandated for the purpose and that the company could look at a dilution of 25-30 per cent by the 1st quarter of 2010.

For projects in its hospitality sector, the company may look to raise Rs 300 crore to Rs 500 crore.

Source:http://www.business-standard.com/india/news/brigade-plans-budget-housing/376742/

DLF Developer Bangalore:DLF Westend Heights Bangalore

DLF Westend Heights Projects:
DLF brings its new residential project Westend Heights New Town in Bangalore. DLF Westend Heights New Town offers 2 & 3 bedroom apartments ranging from 1085 to 1820 square feet. It is G+19 storeys with excellent amenities. DLF New Town is a premium residential township with a appending Spanish style of architecture against a backdrop of fabulous gardens. It features an open-layout with buildings being placed in a manner that there is no overlooking and most of the apartments enjoy the views of structured landscaping.

Location of Westend heights
3.5 km from Apollo Hospital, 4 km from IIM-B, 6.5 km from Jayadeva Flyover, 8 km from Electronics City, 9.5 km from Forum Mall, 13 km from MG Road, 16 km from Railway Station / Bus Stand, 50 km from Airport

Common Amenities of Westend heights
Gym, Swimming Pool, Banquet Hall, Cctv, Spa, Restaurants, Beauty parlor, Healthcare Centre, Shopping Complex, Play Ground, Iptv, Intercom facility, Earth Quake Resistant, 24 hrs power back up, 24 hrs water supply, Water treatment plant, Municipal water and Rainwater harvesting.

About DLF Developer
DLF is the largest real estate company in India. The group has over 224 million sq. ft. of existing development and 751 million sq. ft. of planned projects. DLF is committed to quality, trust and customer sensitivity, and deliver on promises with agility, financial prudence and in tune with the highest global standards. The company has also entered into several strategic alliances with global industry leaders.

About Affinity Solutions (P) Ltd
Affinity Consultant is a Real Estate Consultant in India operating since last 10 years. Affinity Solutions have a team of dedicated professionals with more than 10 yrs of experience in real estate services handling the entire project in India. Affinity Solutions (P) Ltd. is a paramount name among Indian real estate consultants and service providers with all leading brands likes DLF, Unitech, Jaypee, Ansal, BPTP, Parsvnath, Mahagun, Omaxe, Emaar MGF, Eldeco, Indiabulls, Amrapali, Mantri, Lodha, Indu, Kolte Patil, Ramprastha, TDI, Uppals etc.

http://www.bignews.biz/?id=823430&keys=DLFgroup-DLFRealEstatesinBangalore-DLFprojectsBangalore-WestendHeightsprojects

Bangalore realty sector fails to benefit from low-cost housing

Bangalore: Bangalore’s real estate market continues to groan under the burden of unsold property and sluggish demand, even as a revival in property sales in other cities has encouraged developers to launch a slew of projects.

Nearly one in every five homes scheduled for completion by the end of this year remains unsold, according to a report released last week by DTZ International Property Advisers Pvt. Ltd and Indiareit Fund Advisors Pvt. Ltd, a private equity fund. For projects scheduled for possession in 2011, this figure jumps to 56%.

DLF Ltd, Unitech Ltd and Housing Development and Infrastructure Ltd have started launching projects in Mumbai and New Delhi, particularly in the “affordable category” that has residences priced under Rs30 lakh.

The recovery may take longer in Bangalore, the country’s third largest realty market, where big technology firms such as Infosys Technologies Ltd and Wipro Ltd are headquartered.

“Bangalore has continued to witness a correcting trend as the investor community hasn’t quite revived activity yet,” said Aditi Vijaykar, executive director, residential services, at property advisory Cushman and Wakefield.

While the growth in Mumbai and New Delhi is driven by multiple sectors, growth in Bangalore is largely dependent on the technology sector, she pointed out.

Interestingly, lower prices, to the tune of 25-30%, hasn’t pushed up demand in the city, both developers and analysts said. For instance, Whitefield, a suburb in east Bangalore and close to a prominent information technology (IT) hub, saw sluggish sales even after prices corrected by nearly 30%.

“The affordable concept didn’t work as much in Bangalore as it did in Delhi or on Mumbai’s outskirts,” said Prakash Gurbaxani, managing director of QVC Realty Ltd, a property developer. “Prices in Bangalore are lower but home sales and office sector take a direct hit when IT firms stop expanding and the sentiment is negative.”

Unlike Bangalore, where prices are still falling, realtors in Mumbai, New Delhi and Gurgaon have already raised prices between 5% and 10% on the back of rising sales.

Starting July, Lodha Group increased prices by 10% and Unitech by a flat 2% after the latter sold 4 million sq. ft in three months and Lodha’s mid-income flats got good customer response.

“Restricted supply has boosted demand in Mumbai in the past months, price checks and mid-income projects by big developers have worked for Delhi,” said Kumar Gera, chairman of Confederation of Real Estate Developer’s Association of India, an industry lobby. “Bangalore will see a revival only by 2010.”

Bangalore also has a problem of over supply, which doesn’t bother metros such as Mumbai and Delhi. According to the Indiareit-DTZ report, there are around 51,470 residential units across 193 projects coming up in east and south Bangalore, where 66% of under-construction projects are located, which would take the total stock to 122,431 homes by 2011.

Besides a few low-cost projects, larger developers in Bangalore such as Sobha Developers Ltd and Puravankara Projects Ltd have stayed away from fresh launches and are focusing on selling inventory.

After a hiatus of 18 months, Sobha is only now planning to launch a residential project in the next two months, and Puravankara doesn’t have any Bangalore launch in the pipeline after launching its mid-income project in Chennai.

Growth corridors such as areas near the new international airport also haven’t really turned out as expected. Although most developers have picked up land parcels in the area, few projects have been launched.

Tangible effects of the slowdown in construction activity would be visible in 2010-11, the report said.

source:http://www.livemint.com/2009/11/11222710/Bangalore-realty-sector-fails.html?h=B

Builders in IT hub to focus on middle, upper middle segments

After almost a year of lull due to the economic downturn, the real estate sector in the country’s IT capital is slowly picking up and is all set to focus on the middle and upper middle segments, where it envisages huge potential.

Customising their offerings, builders are keen to capture these segments, which are witnessing increasing demand.

For Mantri Developers Pvt Ltd, “the recession for all practical purposes is over as far as the real estate sector in the city is concerned”.

The Bangalore-headquartered group, which has been in the business for over 10 years, admitted that there was “slackening in demand from October 2008 to 2009. Prices had hit rock bottom and customers were holding back, anticipating further slash in rates”.

But post-April, there has been a surge in sales in the industry as customers realised that “there would be no further decrease in prices”, an official of the firm said on condition of anonymity.

The firm, which is looking at the upper middle class and high-end segments, sees a rise in demand in both, more so in the upper middle category.

“However, despite the slowdown, demand never slackened in the high-end segment”, the official said.

The firm’s two ongoing projects, one in the high-end (ranging from Rs one crore to Rs 10 crore) and two in the upper middle class segments (priced at Rs 35-70 lakh) will be completed in another six to eight months.

“Thanks to the slowdown, it is the genuine buyer who is coming forward now instead of the investor. These buyers want the reassurance of reputed brands which are cash flow positive and the pace of progress is visible”, the official said.

The firm, which has also taken up projects in Chennai and Hyderabad, rates the Bangalore market as the “best”, compared to Hyderabad where is it is “reasonably good” and Chennai where it is “picking up”.

Shahwar Pasha, Assistant General Manager, Business Development, Prestige Group, echoed similar sentiments about a resurgence in the market. “It is the end-user, the actual buyer who is ready to buy now”.

The Group, which was earlier targeting only the luxury market (Rs 75 lakh- Rs six crore) is now “seriously looking at the middle and upper middle segment as enquiries are for affordable homes”.

Pasha, who feels the “demand for the high-end is a little less”, hopes the market will be vibrant by the middle of next year.

Expressing a slightly different view, Pradeep Jacob, Marketing Manager, Confident Group said “demand for apartments has bottomed out in the last nine months. The demand for apartments is flat now”.

The four year-old group, he says, has been successful because they have focused on plots, townships and low-budget (Rs 17-20 lakh) and middle category flats (Rs 30-40 lakh).

“Our low budget and middle segment flats’ sales have been good because they are within a 10 km radius of IT companies”, Jacob said.

The group, which has catered to a “diversified segment,” including the high-end in the form of villas, says it has “not witnessed any decrease in demand for villas”.

Suresh Goel, who handles marketing for Salarpuria, the Kolkata-headquartered firm which has been in Bangalore for the past 19 years, says the firm intended to take more projects for the middle segment as it sees “a growing demand” there.

The firm, which has two middle category projects in Bangalore North has witnessed “maximum sales in those”, he added.

Source:http://www.business-standard.com/india/news/builders-in-it-hub-to-focusmiddle-upper-middle-segments/78014/on

IHC to set up new hotel in Bangalore

London-listed hospitality and leisure company India Hospitality Corporation (IHC) will set up a new hotel in Bangalore next year and is close to raising funds worth Rs 1,000 crore for expansion of its hotel business.

Ravi Deol, managing director – IHC, said, “In the next 12-18 months, we will be focusing on expanding our hotel business in tier II cities. We will be opening a new hotel in Bangalore by July 2010.”

According to media reports, the company is also readying a Rs 1,000-crore property fund for expanding its hotel business in the country. The firm has already invested Rs 200 crore in the hotel business through its wholly-owned subsidiary Gordon House Estates.

“We are building a Rs 1,000-crore property fund which would be utilised in expanding the hotel business in the country. A host of foreign investors have shown interest in the fund and we expect the fund closure in the next 3-4 months,” Deol added.

IHC, which currently operates its hotel chain under the brand “Gordon House,” has three hotel properties in the country – two in Mumbai and one in Pune.

Regarding the company’s acquisition plans, IHC president and COO Sandeep Vyas said, “We are looking at opportunities for both organic and inorganic growth in the country. Hospitality sector is poised for a boom and we are hoping to cash in on that.”

In 2007, IHC acquired Mars Restaurant, the hotel and restaurant company that manages ‘Not Just Jazz’, ‘By The Bay’ and ‘Pizzeria’ chains. As part of the deal, it also got the control of the airline catering business SkyGourmet and Mars Catering Services.

Earlier this week, the firm signed an agreement to manage 10 hotels of realty firm Entertainment World Developers (EWDPL), which would come up by 2011.

Further, as part of the pact, the firm will acquire the franchisee rights for Pizza Hut in central India, from EWDPL.

Source:http://www.fnbnews.com/article/detnews.asp?articleid=26429&sectionid=1

Bidadi township rises from ashes

After killing an infrastructure project in Ramanagaram, the government is reviving another one in Bidadi, that was virtually dead.

After DLF washed its hands of the mega Rs 60,000-crore Bidadi Integrated Township Project (BITP) on the outskirts of Bangalore, the government is set to revive it. A proposal by Bangalore Metropolitan Regional Development Authority (BMRDA) is lying before the cabinet for fresh tenders.

In a setback to infrastructure development, the state government last week withdrew the 1,620-acre Institutional Area Township project, proposed at Ramanagaram. The withdrawal of the project came at a time when the government is talking big on developing infrastructure for the proposed Global Investors’ Meet, scheduled in June 2010.

In the event of the global meltdown and tough economic environment for the real estate sector, the upcoming Request For Qualification (RFQ) document is said to be investor-friendly, and simplified to attract more global investors.

As DLF withdrew from BITP, the government refunded its deposit investment of Rs 400 crore on April 24 this year. “Given the current downturn in the real estate sector, DLF did not want to park its funds in a project that has not moved,” government sources said.

The JD(S)-BJP coalition government in October 2006 approved the development of five integrated townships in Bangalore metropolitan region by BMRDA and identified BITP as the first to be developed on 10,000 acres (of these, 2,200 acres are government land), perhaps one of the biggest projects in the country, on the outskirts of Bangalore.

A documentation committee under the chairmanship of the principal secretary of the urban development department was constituted for finalization of the RFQ document and Crisil Ltd was appointed as consultants to BMRDA to prepare a bid document and bid-process management. DLF-led consortium, comprising Limitless Holdings Ltd and Limitless Hoysala Inc, was chosen to develop the project.

The consortium made a commercial offer of Rs 57.50 lakh per acre of land, in addition to land acquisition cost, rehabilitation and resettlement cost, amounting to Rs 1.25 crore, to the government kitty. The government expected Rs 3,400 crore from the whole project, which could have been usefully channelized for urban development and infrastructure projects and initiatives in the Bangalore metropolitan region. An official order to hand over the letter of intent to DLF was issued during the last days of the Kumaraswamy government, on October 10, 2007.

Source:http://timesofindia.indiatimes.com/city/bangalore/Bidadi-township-rises-from-ashes/articleshow/5207818.cms

Investment in a second home

According to a study conducted by Kapston.com, a Bangalore based e-business consulting firm, the sales of ’second homes’ in India increased by 50

per cent from 2002 to 2007, before the slump in the market brought the figures down to negligible. “Although the concept of second homes was accepted by the Indian audience, as the figures show, everything crashed during the downturn . In the last one year, there have hardly been any takers for this segment .

The market is stagnant as of now,” says Raminder Grover, CEO, Homebay Residential, Jones Lang LaSalle Meghraj.

There are two types of buyers, in the second home market, explains Grover. The first category consists of the affluent buyers who purely look at luxury and the second category is the middle and upper class, which looks at second homes as an investment option. “The first category has started showing interest, in the last coupe of months, but the second category of buyers is still playing the waiting game,” he adds.

As the demand for second homes dropped, even developers put their projects on hold and only now, are builders completing their pending projects. This trend, says Grover, is not surprising, as projects within the city are the ones that give developers immediate returns and so, most developers concentrated on completing these first. “With DLF launching their luxury home segment in Goa, other players, I believe, will soon join the fray,” he expects.

“The industry is still at a nascent stage and those who are planning for second homes, should look at it purely as an instrument of ‘value appreciation’ . Investors should look at it, in terms of growth, over the next two to five years,” says Hemant Shah, chairman , Ackruti City. Investment in the right property will always appreciate in value and with the younger generation earning well and investing intelligently , the second home market has good scope in India, says Abhishek Lodha, director, Lodha Develoers.

Second homes are sought, primarily as a means for a getaway from the city. However, for the larger Indian market, it is also an investment for post-retirement days. Real estate is always an asset and today’s generation wants the option of having a home by a hill or a riverside and this is why places like Devnahalli in Bangalore, Coimbatore, Ooty and Kasauli, are springing with second homes. “There is a lot of demand for properties between Pune and Panvel. Even the four main metros and its peripheral areas are in demand, for second homes,” reveals Tushar Khatri, GM (sales and marketing), Arihant Universal .

Apart from these, the other hotspots for second homes are hubs in Noida, Hyderabad, Jaipur, Kerala, and Gurgaon. Mumbai is also one of the preferred locations, with Royal Palms being the only second home provider within city limits. The 240-acre Royal Palms Estate is situated in the midst of Mumbai’s only green belt and surrounded by a further 20,000 acres of the Borivali Sanjay Gandhi National Park.

Source : http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Investment-in-a-second-home/articleshow/5198311.cms

Home prices up in 15 cities, shows Residex

The new index of residential price movement – Residex, released by the National Housing (NHB), shows a mixed trend among 15 major cities.

As many as nine out of 15 cities, covered by Residex across the country, have witnessed hardening of residential property prices. Prices of homes have recorded a decline in cities such as Delhi, Bangalore and Bhopal, between December last year and June, but the same went up in cities such as Mumbai, Kolkata and Chennai, among others.

Prices of residential property in Mumbai have increased by 5.98 per cent between December and June, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices of residential property in Ahmedabad increased by 27 per cent in the same period and during the same time, Faridabad, the neighbouring city of Delhi, reported price hardening to the extent of a whopping 36 per cent.

Other major cities that witnessed price hardening include Lucknow, Pune, Surat and Patna.

On the other hand, the National Capital registered a fall of 7 per cent in prices of residential properties, while Bangalore and Hyderabad witnessed a correction of 24 per cent and 29 per cent respectively. Other cities where prices fell are Bhopal, Jaipur and Kochi.

NHB, a 100 per cent subsidiary of the Reserve Bank of India, comes out with pricing index of residential properties across 15 major cities in the country twice a year.

http://www.mydigitalfc.com/news/home-prices-15-cities-shows-residex-714

Mall vacancy in southern cities drops in July-Sept

The average mall vacancy in the southern cities of Chennai, Hyderabad and Bangalore dropped to 5.7 per cent in the third quarter (July – September) of 2009 from seven per cent in the second quarter.

However, supply in these three cities increased by one million sft, up 33 per cent from the second quarter, according to Cushman & Wakefield, a commercial real estate services and research firm.

Alongside this development, rents stabilised in these markets in the third quarter as against the corrections they had witnessed in the last six to seven months.

Rents in major cities and markets are expected to remain stable in the coming few months. Over 60 per cent of the anticipated supply during the quarter was delivered, a marked improvement from previous few months, it said.

There was no fresh mall space in Bangalore. Though leasing activities remained low, vacancy rates dropped as there was no additional supply in the city. The average rentals stabilised indicating a revival of interest in the city’s organised retail space.

However, the Garden City anticipates supply of one million sft in six months, 80 per cent of which is expected to come up by this year end. Bangalore’s suburban zone will see more than 60 per cent of the total new supply and the rest will come up in peripheral micro markets.

Hyderabad, till September, witnessed an additional mall supply of 650,000 sft at Madhapur and vacancy dropped to 14 per cent from 17 per cent till June. Rentals are likely to remain stable till March next year.

The mall space in Chennai increased 28 per cent with Ampa Skywalk mall becoming operational.

Food and Beverage outlets continued to be the main driver for retail space and are expected to remain so in the future. Retailers preferred to expand within city limits and refrained from venturing into the peripheries, it said.

Source : http://www.business-standard.com/india/news/mall-vacancy-in-southern-cities-drops-in-july-sept/375173/

Builders revive stalled commercial projects on early signs of recovery

Bangalore: Realty firms, encouraged by early signs of a revival in the market, are dusting off shelved or deferred projects and testing their financial viability to gauge which of these can be resurrected.

Solid foundation: A commercial complex under construction at DLF Cybercity, Gurgaon. Developers who had shifted focus from commercial projects to residential sales during the slowdown are restarting them. Rajkumar / Mint

DLF Ltd and Unitech Ltd, India’s top two developers by market value, which had suspended most of their commercial projects earlier this year, said they are in the process of redeveloping them because of a return in demand.

Unitech, which is more upbeat about the potential of commercial development, said on Monday that it has started developing many projects which had been suspended before. DLF, however, plans to remain cautious and wants to launch only in selective markets such as New Delhi and Hyderabad that it thinks have revived faster than others, a senior DLF official said on condition of anonymity.

Large developers such as Housing Development and Infrastructure Ltd (HDIL), Orbit Corp. Ltd, Ozonegroup and Prestige Estates Projects Pvt. Ltd are also launching or firming up plans to build offices and shopping malls.

“This is a good time because most of us have repaired balance sheets and can afford to start construction and can hold on if needed,” said Hari Pandey, vice-president of finance and investor relations at HDIL. “We are also observing a rise in interest from healthcare, financial services and IT (information technology) companies.”

HDIL, the country’s third largest developer by market value, in September and October launched 3.5 million sq. ft of commercial and retail development projects in two Mumbai suburbs that were initially scheduled for a 2010 launch. HDIL’s capital outlay for these projects is Rs600-700 crore over the next four years.

Improved cash flows from sales and a rise in the so-called transfer of development rights (TDR) rates, too, propelled the company’s decision to start building these projects. Slum TDR is a tradable paper issued by state governments in exchange for free development of slums by builders. They, in turn, use the paper to develop other sites.

Analysts, however, remain sceptical and say the commercial and retail segments, unlike residential housing, may be far from a turnaround. Real estate consultancy Cushman and Wakefield said in a 27 October report that the estimated absorption of office space in the first three quarters of 2009 was 4 million sq. ft and is expected to be 5 million sq. ft for the entire year—a 50% drop from the 10.36 million sq. ft sold in 2008.

Developers had shifted their focus from commercial, retail and hospitality projects to residential sales during the slowdown. DLF and Unitech led the way, saying they would concentrate on mid-income homes, and suspended other projects. While a Unitech official said on condition of anonymity that the company has changed its stand and gotten back to commercial development, DLF is also developing about 2.5-3 million sq. ft of commercial space.

Overall, DLF is trying to clean up whatever commercial space was launched by beginning construction as well as delivering what was promised, said a DLF official, who also did not want to be identified.

“The revival of the commercial sector will be a slow process, and the initial trends emerging after the lull include the gradual return of demand from non-IT companies as well as from investors,” said Anshuman Magazine, managing director at property advisory CB Richard Ellis.

Bangalore-based Ozonegroup is back at the drawing board, deliberating the format of its Urbana project—a 162-acre sprawl in Bangalore. The company, which had earlier considered building an IT special economic zone (SEZ) here, may instead build a large IT park with retail spaces.

Similarly, Orbit, after turning its premium commercial projects into residential formats, plans to launch two commercial projects in the coming months in the Bandra-Kurla Complex and Andheri, both Mumbai suburbs.

“The launches are in anticipation of demand picking up as companies begin to expand again,” said Pujit Aggarwal, managing director of Orbit.

India’s retail property market has recorded the highest correction in the world, according to a 22 September report by Cushman and Wakefield. The biggest fall in rentals globally was in Colaba Causeway, a high street in Mumbai, where rentals fell by 63.5%.

In the past couple of months, many mall developers have restarted projects they had given up on.

A Bangalore-based developer, requesting anonymity, said he is redesigning a 2 million sq. ft mall off Bellary Road in north Bangalore, which he had shelved late last year. “We had even dissolved our entire retail team but now we are again at it, though we have to rethink our mix of retailers, etc.,” he said.

From the complete silence that reigned in the retail sector in the past two quarters, sign-ups have started though retailers are more demanding this time, said two retail analysts.

“The current set of mall developers are long-term players and are more cautious because retailers want to see that construction has begun, unlike earlier,” said Susil Dungarwal, founder of Beyond Squarefeet Advisory Pvt. Ltd, a mall advisory.

Retail investors, too, are hopeful of seeing more movement in an otherwise dull sector. Ivanhoe Cambridge Investment Advisory (India) Pvt. Ltd, a Canadian retail-focused fund, is close to signing a joint venture with a leading developer, almost a year-and-a-half after it announced its India plans.

“We see India as a long-term strategy, and the recent economic downturn has not impacted our interest in investing in quality shopping centre projects with competent local partners,” said Phil McArthur, senior vice-president, India, Ivanhoe Cambridge.

Source:http://www.livemint.com/2009/11/02214640/Builders-revive-stalled-commer.html

Matrix Partners India invests Rs 47.34 cr in Siesta Hospitality

Mumbai-based venture capital firm Matrix Partners India has invested around Rs 47.34 crore in Bengaluru-based Siesta Hospitality Services Ltd. Rishi Navani, Co–founder and Managing Director, Matrix Partners India said, “Siesta Hospitality has an innovative business model to address the hospitality needs of corporations.”

Ashok Chattaraj, Co-founder of Siesta Hospitality declined to disclose the stake acquired but said it was a minority one. E&Y advised Siesta Hospitality on the deal.

According to a report in livemint.com, Siesta Hospitality, set up in 2005, provides customised serviced apartments for travelling executives, based on specific requirements. The firm, which owns at least 500 rooms across 14 cities and counts Barclays Bank Plc, Citibank N A, and Nokia Siemens Networks Pvt Ltd, among others, also customises the apartment according to client specifications.

Source:http://www.hospitalitybizindia.com/detailNews.aspx?aid=6586&sid=1

Patel Smondoville Project Bangalore: Property in Bangalore

Patel Smondoville Project
Patel Realty Comming With Their New Residential Project Smondoville, Bangalore is a 120 acre integrated township comprising of three residential precincts, a business precincts, a tech icon precinct, hospitality and leisure precinct and an educational precincts. It has a beautiful natural lake within the township and is very conveniently located in electronic cityphase-I. We are commencing the project by launching our residential precincts SMONDOVILLE very shortly. Smondos are smart homes designed for distinct comfortable living at a smart price. They are designed for optimum efficiency for comfortable living. I will come back very soon on the pricing and other details. We are in the process of signing up with the Channel partners and would be delighted to have you on board. I am sending a brochure for your evaluation. Do get back with your confirmation for a great partnership ahead!

Patel Smondoville Type Size & Price
Type——-Size(Sq.Ft)—-Price INR(sq.ft)
Studio——–360————-1885
1 BHK———635————-1885
2 BHK———865————-1885

About Patel Realty
Patel Engineering Ltd. a listed company in BSE & NSE has successful track record of completing over 350 Projects over six decades and has a global presence in USA, Greece, Indonesia, China, Chile, Eritrea (Africa), Qatar, Nepal, Mauritius, Sri Lanka & Bhutan. The company currently employs over 2500 people and has a market capitalization of 2900 crores and an annual turnover of 2500 crores.Apart from successfully completing and executing 78 dams, 40 hydro power projects, over 30 Micro tunneling projects & 175 Kms of tunneling works. Patel has in the past been involved in development up of landmark buildings all over the world, including the Centaur Hotel a 5 star hotel located in – Juhu, Mumbai, Quantum Park a high end residential building in Bandra Mumbai, The General Post office building in Doha Qatar and the Convention centre cum Secretariat of Bhutan to name a few. Currently Patel is developing One Million Sq.ft. of prime commercial space in Mumbai, Two Million Sq.Ft. of residential community in NOIDA, and has recently completed a landmark commercial building of 1 lac Sq.Ft. in Mumbai.

About Affinity Solutions (P) Ltd
Affinity Consultant is a Real Estate Consultant in India operating since last 10 years. Affinity Solutions have a team of dedicated professionals with more than 10 yrs of experience in real estate services handling the entire project in India. Affinity Solutions (P) Ltd. is a paramount name among Indian real estate consultants and service providers with all leading brands likes DLF, Unitech, Jaypee, Ansal, BPTP, Parsvnath, Mahagun, Omaxe, Emaar MGF, Eldeco, Indiabulls, Amrapali, Mantri, Lodha, Indu, Kolte Patil, Ramprastha, TDI, Uppals etc.

Source:http://www.bignews.biz/?id=820950#at

DLF Likely To Scrap Bangalore Row House Project

DLF Ltd is reconsidering its decision to set up 270 row houses spread over 38 acres, a part of the firm’s large development project coming up in Jigani Industrial Area. Each row house was supposed to cost somewhere between Rs 70-80 lakh. Now, the company has changed its plan to exploit potential in mid-segment housing that is sensing strong demand. The main focus will now be on mid-income homes and commercial complexes, with deferment of high-margin launches in luxury homes and retail space, the company said in a statement released in the beginning of this year. However, unlike Bangalore, in Mumbai, the premium housing segment is witnessing enough traction. Mumbai-based realtor, Indiabulls Real Estate sold all the slots that were open in the first phase of its residential project Indiabulls Sky at Elphinstone Road. The company has launched three residential projects next to its commercial vertical, One Indiabulls Center.

Source : DNA Money

Mumbai’s super-rich back to house-hunting

Mumbai, Oct. 24 Luxury homes are back in the reckoning and it appears that the days when sales are complete before the shovel is put to earth is not too far off.

A niche Mumbai expo, with just seven developers show-casing their high-end offerings in the price Rs 4.5-22-crore price range, attracted substantial high net worth individuals’ interest, with the sponsor, Deutsche Bank AG, stacking up a large number of applications for funding.

Total Environment Building Systems, Bangalore, is looking to sell 180 duplex apartments in Whitefield, near Bangalore, priced around Rs 4.5 crore each. Mr Alexander John Kurian, Assistant Vice-President, Marketing, says the company has already sold 73 villas, also in the same price line, in the same area. Unlike six months ago, today, enquiries today are translating into sales, he says.

Total Environment provides customised furnished homes. Another of its other properties in south Bangalore priced upwards of Rs 1.8 crore has been sold out.

Mumbai-based Ahuja Constructions has on offer Rs 20-crore-plus properties in central Mumbai. Ms Malvika Chandra, Head, Marketing, says the company has luxury apartments across Mumbai — from Bandra to Navi Mumbai — and has always been able to sell without much publicity.

From terrace gardens to private swimming pools with underwater lighting and central air conditioning, builders such as Hiranandanis, Sobha Developers, Kumar Developers and RNA Corp, had them all.

Brushing aside the numbers he logged in the opening hours of the ‘Millionaire Homes’ exhibition, Mr Sriram Kalyanaraman, Director and Head, Business Banking and Asset Products, Deutsche Bank, says it was primarily the profile of the customer and the access the event could provide that determined the bank’s participation in the programme. He said the overall sentiment was improving and the bank was getting good response for funding across all segments of the residential space. Though the bank wants to cap advances at Rs 5 crore an apartment, it could go higher in exceptional cases, he said.

Mr Sunish Tom of Dun and Bradstreet, the event organiser, says D&B has identified in Mumbai one lakh HNIs who intend buying property, either as an investment or a second home across the country. About 3,000 such HNIs were short-listed and invited to the expo, he said.

Source:http://www.thehindubusinessline.com/2009/10/25/stories/2009102550880100.htm

Foreign hotels jack up star value in India

Premier Inn, the UK’s largest hotel chain, is popular among international travellers as a budget hotel. But in India, where it will Hotel open its first hotel in Bangalore early next month, Premier Inn is pitching itself as a value-for-money mid-market brand.

“In India we realised that the consumers’ connotation of a budget hotel means something that might not offer quality. So we decided to term ourselves as value for money mid-market hotel brand,” says Aly Shariff, managing director of Premier Inn, which plans to build 80 hotels across the country for an investment of 300 million pounds.

It’s not an exception, though. As a rule, most international hotel chains are positioning themselves higher than their global equity in India, thanks to the country’s peculiar business model for building and running hotels that just can’t survive here without restaurants and banqueting facilities. For example, Park Inn, an international three-star hotel chain belonging to the US-based Carlson Hotels Worldwide, is branded as four-star hotel in India.

“Mid-market hotels in the western countries do not have elaborate food and beverages options or room service since people tend to be select service hotels. But in India, food and beverages contributes significantly to the overall hotel revenues and so most international mid-market brands tend position themselves as 4 star,” says Ajay Bakaya, executive director of Sarovar Hotels & Resorts that runs Park Inn and Park Plaza hotels in India under a franchisee agreement with Carlson.

In India, where the concept of ‘select service hotels’ does not exist, food and beverages account for about one-third of a hotel’s overall revenues, according to industry estimates. Total ancillary services in a 5 star hotel, which also include renting of banquet halls, spas and night clubs, could constitute as much as 45% of a hotel’s business here.

“In India, hotels are food and beverages destinations and host weddings unlike the western countries,” says Rajiv Menon, area vice president (India, Pakistan, Malaysia and Maldives) of Marriott International, a US based hotel company.

This has forced moderately priced brands like Courtyard by Marriott to offer elaborate in-house dining services, concept restaurants or banqueting services in India, while globally they have elaborate dining options outside the hotels, he says.

Another aspect that’s making hotels to upgrade their positioning is the high real estate costs, says Siddharth Thaker, executive director of hotel consultant HVS India. According to him, real estate costs in India at 35-40% of total project costs is double that of global average. “This leads most international hotel brands to position themselves higher than what they are branded globally so that they can become profitable faster.”

This trend, however, can confuse international travellers visiting India and Indians traveling abroad. It can even lead to cannibalisation of brands, warns Larry Malarkar, an independent hotel consultant.

The former Starwood Hotels regional director expects stricter branding standards in the future as most international hotel chains are now
Hotel introducing multiple brands in the country. “If international hotel brands do not work towards uniform branding, it could lead to cannibalisation of brands,” says Mr Malarkar.

Some hoteliers have started doing that, by realigning hotel brands to position them as per global markets.

For instance, ITC Maurya Sheraton in Delhi was recently rebranded as ITC Maurya-The Luxury Collection as the hotel offered far more facilities than what brand Sheraton offers globally. This made Starwood Hotels and ITC Hotels to rebrand the hotel, an ITC spokeswoman said.

Single-brand chains like Premier Inn may not be too bothered about such confusion, but the Carlsons and Marriotts may go the Starwood way as India steadily climbs to the top of the world.

Source:http://mail.google.com/mail/?shva=1#inbox/124844cdcdeb2131

UK’s Premier Inn to open its First Hotel in Bangalore

Premier Inn, the UK’s largest hotel chain, is popular among international travellers as a budget hotel. But in India, where it will open its first hotel in Bangalore early next month, Premier Inn is pitching itself as a value-for-money mid-market brand. “In India we realised that the consumers’ connotation of a budget hotel means something that might not offer quality. So we decided to term ourselves as value for money mid-market hotel brand,” says Aly Shariff, managing director of Premier Inn, which plans to build 80 hotels across the country for an investment of 300 million pounds.

It’s not an exception, though. As a rule, most international hotel chains are positioning themselves higher than their global equity in India, thanks to the country’s peculiar business model for building and running hotels that just can’t survive here without restaurants and banqueting facilities. For example, Park Inn, an international three-star hotel chain belonging to the US-based Carlson Hotels Worldwide, is branded as four-star hotel in India. “Mid-market hotels in the western countries do not have elaborate food and beverages options or room service since people tend to be select service hotels. But in India, food and beverages contributes significantly to the overall hotel revenues and so most international mid-market brands tend position themselves as 4 star,” says Ajay Bakaya, executive director of Sarovar Hotels & Resorts that runs Park Inn and Park Plaza hotels in India under a franchisee agreement with Carlson.

In India, where the concept of ‘select service hotels’ does not exist, food and beverages account for about one-third of a hotel’s overall revenues, according to industry estimates. Total ancillary services in a 5 star hotel, which also include renting of banquet halls, spas and night clubs, could constitute as much as 45% of a hotel’s business here. “In India, hotels are food and beverages destinations and host weddings unlike the western countries,” says Rajiv Menon, area vice president (India, Pakistan, Malaysia and Maldives) of Marriott International, a US based hotel company.

This has forced moderately priced brands like Courtyard by Marriott to offer elaborate in-house dining services, concept restaurants or banqueting services in India, while globally they have elaborate dining options outside the hotels, he says. Another aspect that’s making hotels to upgrade their positioning is the high real estate costs, says Siddharth Thaker, executive director of hotel consultant HVS India. According to him, real estate costs in India at 35-40% of total project costs is double that of global average. “This leads most international hotel brands to position themselves higher than what they are branded globally so that they can become profitable faster.”

This trend, however, can confuse international travellers visiting India and Indians traveling abroad. It can even lead to cannibalisation of brands, warns Larry Malarkar, an independent hotel consultant. The former Starwood Hotels regional director expects stricter branding standards in the future as most international hotel chains are now introducing multiple brands in the country. “If international hotel brands do not work towards uniform branding, it could lead to cannibalisation of brands,” says Mr Malarkar.

Some hoteliers have started doing that, by realigning hotel brands to position them as per global markets. For instance, ITC Maurya Sheraton in Delhi was recently rebranded as ITC Maurya-The Luxury Collection as the hotel offered far more facilities than what brand Sheraton offers globally. This made Starwood Hotels and ITC Hotels to rebrand the hotel, an ITC spokeswoman said.

Single-brand chains like Premier Inn may not be too bothered about such confusion, but the Carlsons and Marriotts may go the Starwood way as India steadily climbs to the top of the world.

http://www.indianrealtynews.com/hotel-industry/uk%e2%80%99s-premier-inn-to-open-its-first-hotel-in-bangalore.html

Mall developers rebuild their hopes on housing projects

With declining demand making commercial projects increasingly unviable, a host of  developers are busy converting mall projects into residential ones.

Rituraj Verma, director of retail services at Knight Frank India, a global property consultancy, estimates that  about 25 out of the 375 mall projects planned two years ago may see the light of day in the next four to five years. “Developers say they will get only half the value if they go ahead with malls instead of residential projects,” he adds.

That explains the rush among developers to convert their projects. For instance, Mumbai-based Orbit Corporation has decided to convert its 250,000 square foot (sq ft) Hafeez Contractor House in Lower Parel into a residential project. Its Andheri project will also be turned into a residential complex.

Mumbai is not the only city to see this trend. Prozone Liberty, the mall development joint venture between Provogue and UK’s Liberty International, plans to follow suit. Prozone is planning to convert a part of its mall projects in Jaipur and Indore  residential development owing to lower demand for mall spaces in smaller cities.

Bangalore is seeing the same trend. A month back, the TTK Group said in a notice to the Bombay Stock Exchange that it was changing its plan for a mall project on a 6.3 acre site in Dooravani Nagar, Bangalore, and was planning to set up a residential project instead.

Dhiraj Shah of West Pioneer Properties says the company initially wanted to build malls and lease them out. “We changed our plans after the slowdown in the retail sector,” Shah says. The London Stock Exchange’s AIM-listed company wanted to develop a 726,000 sq ft mall in Kalyan on the outskirts of Mumbai. The mall, built on a part of the land, is named Metro Junction but the company is now building Metro Residency as well on the remaining area.

Estimates by property consultant Jones Lang LaSalle Meghraj (JLLM) suggest that retail rents have fallen up to 50 per cent across the country in the last one year.

The country has a ready supply of 38 million sq ft of retail space and around 30 million sq ft is expected to hit the markets in the next two years. The absorption of retail space is 4 to 5 million sq ft every year leaving a huge supply-demand mismatch, JLLM says.

Real estate consultancy Cushman & Wakefield gives the break-up of the fall in retail rentals. Mumbai saw the sharpest decline in rental values for both malls (about 42 per cent in Mumbai suburbs) and main streets (about 38 per cent in locations such as Colaba Causeway).

In the National Capital Region, the main street location of Greater Kailash saw a 25 per cent decline in rental values, while mall rental values in Noida dropped 17 per cent. Ahmedabad saw a serious downturn in rental values in malls and main streets, with corrections ranging from 20 to 36 per cent over the last quarter.

Though the housing sector also took a few knocks, the impact was much less. In any case, demand has revived, with several developers cutting prices and interest rates looking more benign.

According to government estimates, the country is facing a shortage of 20 million units, especially in middle and lower income segments – which has caught the fancy of developers such as DLF, Unitech and Omaxe among others.

Costs have also played a part. Malls require a construction cost of Rs 3,000 a sq ft; residential projects Rs 1,500 to Rs 1,800 a sq ft.

Besides, developers pre-sell homes and finance their construction through these advances. Mall developers, by contrast, have to raise own funds and earn returns after they lease space.

http://www.business-standard.com/india/news/mall-developers-rebuild-their-hopeshousing-projects/373606/

FIRE Luxur launches township project in Bangalore

New Delhi, Oct 14 (IANS) Real estate major FIRE Luxur Developer has started developing the first phase of its Bangalore township, “The Empyrean”, the company said Wednesday.
FIRE Luxur, a joint venture between private equity fund FIRE Capital Fund and the city-based Nilgiris Group, will invest $350 million to develop the first phase of the project.

Sprawling over 210 acres, the township will be the largest low-rise residential development on the outskirts of the city.

Om Chaudhry, chief executive of FIRE Capital Fund, said: “Bangalore is a fast growing city where the real estate market is still in its nascent stage”.

The township will have multi-housing option including five spacious options of villas with sizes ranging from 2,095 square feet to 5,500 square feet, priced at an average price of Rs.2,250 per square feet.

The project will have a total 2,200 units, which FIRE Luxur plans to launch in different phases.

The first phase will be ready for possession in two years.

Source : http://www.thaindian.com/newsportal/business/fire-luxur-launches-township-project-in-bangalore_100260711.html

Attibele–the new low-cost housing capital

Attibele, Karnataka: This quiet town, 35km from Bangalore on the border of Karnataka and Tamil Nadu, could well be the lab where India’s next big real estate revolution is being incubated.

Value and Budget Housing Development Corp., promoted by Citibanker-turned-IT-entrepreneur Jaithirth Rao, Bangalore’s CSC Constructions Pvt. Ltd and Tata Housing Development Co. Ltd are among the companies that have either announced projects at Attibele or are looking for land there. The common thread that runs through their plans: affordable housing.

Zoning in: Attibele, 30km from Bangalore, has attracted attention from big developers such as Tata Housing, which is keen to buy a 100-acre plot there. Prices range between Rs70 lakh and Rs1.5 crore an acre. Hemant Mishra / Mint

Zoning in: Attibele, 30km from Bangalore, has attracted attention from big developers such as Tata Housing, which is keen to buy a 100-acre plot there. Prices range between Rs70 lakh and Rs1.5 crore an acre. Hemant Mishra / Mint Attibele would seem to have all that is needed to build affordable homes: land that isn’t priced out of the market and proximity to an industrial hub as well as to a big city.

Ramesh Ramanathan, another former Citibanker who runs citizen’s movement Janaagraha, has identified Attibele for his low-cost housing initiative that will sell 1,500 homes, developed on a 12-acre piece of land, for Rs5 lakh or less. Ramanathan, who is also a Mint columnist, says he was agnostic about the location for the project, but admits that Attibele met all his requirements. It is close to Electronic City, where firms such as Infosys Technologies Ltd, Wipro Ltd and Hewlett-Packard Co. are located. The four-lane road that connects the town to Bangalore passes by factories of firms such as TVS Motor Co. Ltd and Hindustan Granites Inc. Then there’s the cost: analysts and executives in the real estate business say land can be bought in Attibele for between Rs70 lakh and Rs1.5 crore an acre. That compares with around Rs1.5-4 crore an acre in Delhi satellite town Noida or Rs2-3.5 crore an acre in Bangalore suburb Whitefield.

“We were looking at other industrial hubs before we selected this location because we got a decent price,” says Pramod Kumar, executive director (operations) at Value and Budget Housing.

The company will spend Rs100 crore developing around 300-400 houses on 16.5 acres and will sell them at a sub-Rs7 lakh price tag. It hopes to see demand from people working in factories along Hosur Road or in firms in the Electronic City.

To be sure, the concept of affordable housing isn’t a new one. It is at least a few decades old, with the local development agencies of big cities being the original pioneers with their LIG (lower income group) flats. While a market for affordable homes never went away, large real estate firms started focusing almost exclusively on premium and luxury developments between 2004 and 2008 as the economy expanded rapidly and banks loosened their purse strings and issued loans to almost all loan seekers.
Since 2008, however, the bottom has all but fallen out of the real estate market and companies, even large ones, have turned to low-cost housing projects with a vengeance. In June, Unitech Ltd, India’s second largest real estate firm, launched its first Unihomes project in Chennai with flats on offer for between Rs10 lakh and Rs30 lakh.

“Affordable housing projects that have been launched in the last few months clearly brought back homebuyers and boosted sales. Not just price correction, developers launched projects at reduced price points,” says Shailesh Kanani, senior research analyst at Angel Broking Ltd.

Still, even these affordable housing projects are out of reach of most people. The existence of a market for extremely low-cost housing was proved by Tata Housing, among the first large real estate developer to enter the space. In May, the firm announced it would build and sell 1,500 houses at Boisar, near Mumbai, for between Rs3.8 lakh and Rs6.7 lakh.

There’s no telling whether such prices would be economically viable at Attibele. Ramanathan says that his low-cost housing initiative is a not-for-profit venture. The project also received a grant of $2 million (Rs9.3 crore) from the Michael and Susan Dell Foundation.

Typically, land accounts for around 30% of the cost of a housing project in a city like Bangalore, according to Praveen Kumar, chief executive (CEO) of One Third Earth, a Bangalore-based property advisory. However, in some premium areas in Mumbai, land costs sometimes touch a high of 40-50%, he says.

The boom-in-the-making in Attibele hasn’t escaped the attention of Tata Housing, which, according to two real estate consultants who didn’t want to be identified, is looking to buy a 100-acre plot there for its second low-cost project after the one at Boisar.

In an email response to Mint’s query, Brotin Banerjee, CEO and managing director (MD) of Tata Housing, says the company is in talks with a few landowners nationally. “We will announce our next project at an appropriate time.”

One low-cost project begets another, says a developer.

“The real estate has a herd mentality. If one developer shows a positive sign, then others follow too,” says P.C. Sukanand, MD of CSC Constructions. The company has several projects in Attibele and recently sold a chunk of a total 500 units, that were 250 sq. ft studio apartments for Rs5 lakh each. It is also developing around 4,000 homes on a 40-acre plot and plans to sell them for less than Rs10 lakh each.

That mentality is beginning to make itself evident in Attibele. Much of the area looks undeveloped, but some parts sport empty sites with billboards hawking projects in the making.

Attractive it may be to developers of low-cost housing projects, but Attibele isn’t the easiest place in which to acquire land.

It took Ramanathan almost two years to sew up a deal for his 12-acre plot. “Much of Attibele’s land is agricultural and needs to be converted to either residential or commercial for development and (this) is time-consuming,”?says One Third Earth’s Kumar. The two consultants mentioned in the first instance say the Tata Housing deal is stuck because of similar issues. Tata Housing didn’t respond to a separate email sent by Mint on zoning issues.
Such zoning issues that require conversion of land use mean that only large developers operate here because only they can afford to do this, says a senior executive at Vakil Housing Development Corp. Pvt. Ltd, which has sold around 100 acres around Attibele.

Interestingly, Boisar, despite being the location of Tata’s Housing project, hasn’t seen any other low-cost housing activity. Housing Development and Infrastructure Ltd does have 100 acres in the area, acquired over a period of time, but it is yet to announce any project in the area.

Source:http://www.livemint.com/2009/10/14003200/Attibelethe-new-lowcost-hou.html?pg=2

Indian Residential property prices rise 15%

Wonder why Indian realty woke up so late when the US realtors started this almost 3-4 months back and are about to wind up their campaigns as there aren’t anymore buyers left for them to lure at these prices. Is RE really getting better in India, let’s see. Residential property prices rise 15%

The upswing has begun. Not only have the sales picked up, but the prices of residential property too have increased 5-15 % in the last couple of months. With a long festive season ahead, realty experts believe property markets could see heightened activity, provided developers desist from increasing prices of residential space any further. “After almost a year-and-a-half, we see a renewed demand in the residential sector.

During the last three months, sales have picked up by almost 100%, and with a long buying season ahead, the property prices will definitely move up the graph,” says Sameer Sinha of Savvy Infrastructures Ltd. “In Ahmedabad, going by conservative estimates, the prices of residential property is expected to rise by another 25-30 % in the next one year”, Mr Sinha said adding that the prices in the city have already risen by about 15% since the markets bottomed out earlier this year.

The fresh demand in the housing sector has boosted the confidence of developers as well. Earlier this month, the city-based body of developers, GIHED (Gujarat Institute of Housing and Estate Developers) displayed about 500 projects worth Rs 3,000 crore at property show in Ahmedabad. “As the economy recovers and grows on a pan-India basis, residential demand is expected to grow along side. C&W Research estimated demand to be over 7.5 million units by 2013 across all categories such as Economically Weaker Section, affordable mid segment and luxury segment. The residential demand for NCR, Mumbai, Bangalore, Pune, Chennai, Hyderabad and Kolkata is estimated to be 4.5 million units by 2013”, Ms Aditi Vijayakar added.

Has the author actually gone to ground zero. If you walk around Wakefield/IT park in Bangalore, you will see 1000’s of flats in vacant position either to be sold or lent out with NO takers. In fact, you can easily find an apartment that is NOT even ready at this time being sold at a discount of upto 40% to what the builder is quoting.

For example, if the builder is quoting 50L for a 2 BR in wakefield, Blore, you can easily find the same sized flat on some of the RE websites where owners have put up theirs for sale at a whoppingly low price of 30L. Now that’s the kind of demand these analysts who write all “hypothetical stuff” are seeing. Sentiment is improving in Hyderabad is another article. Hindu Business Line article

Referring to the supply situation, Mr Agrawall said that while there is glut in the Rs 50 lakh to Rs 1crore apartment and villa segments, the supply in the affordable segment is inadequate. In the Rs 1 crore and above category too the number of builders and projects are very few, he added.

All these projects costing 1 crore are at least 10-15 Kms away from the city. Traveling within city, from one end to the other takes an easy 2 hours. One can only imagine the pain one would need to take to travel if they buy at these places that too at exorbitant prices. This is a trend that is way too familiar. Stock market rises 100%. Everyone blindly puts money in it. Makes ton of money. They now move to RE. RE picks up for a little bit. Folks start the “cat and mouse” chasing game and force the prices to go up. When the number of such folks are done. RE comes crashing down.

One can write up a program depicting this behavior and pattern in india and put it in a loop. Unfortunately, common man who may not have access to gory stock markets or higher salaires is the one that gets trapped in all this mess. Common man always gets inot the chasing game at the very end. Like folks who have bought stocks in the last month are trapped for a good 6months to 1 year before they could realize a profit. Similar is the case with RE too.

Coming to affordability, with Labor pains growing not many folks are out there who could a) afford to buy a house, b) qualify for a loan to buy a house. If US market is any clue, then Indian RE market too will go down further. At the current juncture the oversupply of units is hurting and NOT the demand. Demand is and will always be there in a country that is growing. However, unrealistic predictions got Realtors into building too many units when they did not need. Another case in example is Raheja builders who are stuck with a multi-crore residential project in Bangalore whose construction has been shut-down after almost 70% of it being complete. What we at SB would like to state is that do NOT get swayed by those analysts articles and get too pumped up.

Always do your own research before jumping into any ship. Internet is a great resource, make the most of it. We have gotten so many feedbacks stating that we are always on the pessimistic side rather than being optimistic. Please do realize that you switch on TV, everyone will say buy stocks, buy houses. There wouldn’t be anyone who would say do NOT buy. Because everyone has a vested interest. We do NOT and hence our analysis is unbiased and true to our knowledge. And truth is always bitter.

Source:http://www.marketoracle.co.uk/Article14114.html

Office rentals stabilise: CBRE Report

Office rentals, which dropped 40% from their peak in the middle of 2008, stabilised across the country in the September quarter as fresh bookings for office spaces partly reduced inventories, says a report by international property consultant CB Richard Ellis.

There was no change in office rentals in some of the major office locations in the national capital region, Mumbai, Bangalore, Hyderabad and Kolkata, while rentals at some others in Chennai and Pune fell by 5-6 % in the quarter ended June 30. In contrast, rentals in Connaught Place in Delhi and Gurgaon in Haryana registered an increase of 5-8 % in the last quarter.

The increase in demand is largely due to improving economic conditions, positive market sentiment and growing corporate confidence. However, it would take some time for the supplydemand gap to get bridged. Thus, both rentals and capital values are expected to remain stagnant or under downward pressure in the medium term, said Anshuman Magazine, chairman and managing director for south Asia at CB Richard Ellis. The rentals in Connaught Place increased marginally by Rs 10 per sq ft to Rs 230 per sq ft after having slipped 30% from its high in June 2008. Similarly, offices in Gurgaon attracted 8% higher rental at Rs 65 per sq ft after registering a decline of 33%.

While most locations in the national capital region saw no change in rentals compared to the preceding quarter, some locations faced significant vacant spaces which was highest for Jasola at 50% and Saket at 25%. In Mumbai, vacant spaces were high at 25% in Bandra Kurla Complex and 22% in Lower Parel even after corporates took up new office spaces. Mumbai is expected to witness an additional supply of 3.5 million sq ft by 2010 that may add to the vacancy level and keep rentals under pressure, says CB Richard Ellis.

Source:http://mail.google.com/mail/?shva=1#inbox/1243c34b4e87b665

Commercial property sector boom expected in India from 2010 to 2013

A surge in demand for office space in India is set to revolutionize the commercial property market by 2013, it is predicted.

According to an investment report from consultants Cushman & Wakefield, the pan Indian demand for office space is expected to grow to 196 million square feet.

Demand for retail space and in the hospitality sector is also expected to be high with analysts predicting growth of 43 million square feet in retail and a requirement for 690,000 room nights in the same time space.

‘Though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector to gradually return to the path of recovery and witness robust demand for real estate across sectors,’ said Anurag Mathur, Managing Director, India, Cushman & Wakefield.

The report, Survival to Revival – Indian realty sector on the path to recovery, also indicates that demand for residential property will be over 7.5 million units by 2013 across all housing categories of which 85% is expected in the mid segment and affordable housing segment.

Of the total demand expected across India, 60% would be generated in the country’s top seven cities. Mumbai is expected to witness the highest cumulative demand of 1.6 million units by 2013 whereas Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.

Total office space demand will be down in 2009, the report says, but from 2010 onwards the markets will experience a healthier demand.

The highest demand is expected in Bangalore with the need for 34 million square feet followed by Chennai at 27 million square feet.

This increase in demand is largely due to improving economic conditions leading to positive market sentiments and growing corporate confidence, the report adds.

In the retail sector Bangalore in likely to see the highest demand with approximately 6.8 million square feet needed and Pune is expected to record the highest compounded annual growth of 51% in the retail segment.

NCR and Mumbai are expected to see the highest increases in demand for rooms due to the higher volume of business travellers in these cities.

Various initiatives taken by the Indian government to promote commercial and tourism activity in these locations will add to growth.

Source : http://www.propertywire.com/news/asia/report-predicts-commercial-boom-200910063561.html

Demand for retail space on the rise

New Delhi, Sept. 28 After being virtually comatose for three quarters, retail real estate demand is showing some signs of revival as players in organised space begin to put their expansion back on track.

With same-store sales in April and May faring better than the preceding quarter, commercial markets in Delhi, Mumbai and Bangalore are seeing an uptick in enquires for additional space, say industry watchers.

According to a recent report by Cushman and Wakefield, Pune is expected to record the highest compounded annual growth of 51 per cent due to the current limited stock of operational malls and favourable demographic profile.

Bangalore, Mumbai and Delhi NCR are expected to see the highest demand, together comprising about 20 million sq ft (msf).

Mr Arvind Nair, Managing Director, DLF Retail Developers, agrees that the demand in the B2B space, that is, retail brand’s demand for space from property developers, had seen an improvement since May. “Brands are looking for larger space. National and international brands are more aggressive, while local brands are taking a more cautious approach,” he said.

Stabilisation period

According to real estate consultant CBRE, the first half of the year could be looked at as a period of stabilisation for the retail industry after a positive sentiment in the economy with the formation of the new government and the return of buoyancy to the stock market.

“This has allowed retailers to reassess the positions taken up by them across the country for expansion of their stores as rental values have rationalised and flexibility is being offered with regard to lease terms,” it added.

The report has pegged the cumulative retail demand across India at an estimated 43 msf by 2013, of which the demand in the top seven cities is expected to be nearly 34.6 msf.

Demand is expected to be concentrated in the Tier-1 cities, constituting nearly 46 per cent of the total estimated pan-India demand during the period.

Aggressive expansion

Fashion retailer Genesis Colors, which has a slew of luxury brands including Jimmy Choo under its ambit, said it was going ahead with expansion plans. “We will be adding at least 15,000 to 20,000 sq feet to scale up our presence. Last year, we were slow; but this year we will be aggressive in our expansion,” Mr Jyoti Narula, Managing Director, Genesis Colors, said.

Citing instances of demand revival, CBRE says that locations such as Khan Market and South Extension in Delhi have witnessed significant leasing activities with several food and beverage players such as Cafe Oz and Amici, and apparel brands such as Triumph and Adidas among others, entering the space.

“Prime high street and mall will continue to be our core expansion choices. We will be adding 55 new stores by the end of this fiscal,” the Reliance Digital President and CEO, Mr Ajai Baijal, said.

Source : http://www.thehindubusinessline.com/2009/09/29/stories/2009092951430900.htm

Residential property prices rise 15%

AHMEDABAD: The upswing has begun. Not only have the sales picked up, but the prices of residential property too have increased 5-15 % in the last Greatest ceilings
Make maximum use of office space  couple of months. With a long festive season ahead, realty experts believe property markets could see heightened activity, provided developers desist from increasing prices of residential space any further.

“The festive season (September-December ) has historically been a buying period, with a large chunk of overall sales being converted during this auspicious time. Some developers see as much as 30-40 % of the yearly sales taking place during the festive season,” says Aditi Vijayakar, the executive director (Residential Services, India) of Cushman & Wakefield (C&W ), a global realestate consultant. “Residential prices have increased by 5-15 % from the bottom it made in the first half of the year. If the developers continue to raise the prices then the renewed demand and interest that is being witnessed will start to abate,” she cautioned while talking about the upcoming season which is also a source of attraction for the cash-rich NRIs.

“The previous year has been a taxing one for the real estate industry and the initial signs of recovery are evident in the market, and as most of the sales happen during the festive periods, developers have to be cautious not to hike prices in projects and new launches as this will drive out the end users and prolong the revival in the residential space,” Ms Vijayakar remarked.

According to the expert, almost all cities are registering a rise in sale as transactions had frozen up during the start of the year. But now as the economy has stabilised and is back on the growth trajectory, there is a revived interest in buying homes by end users and this increase in confidence, better economy, favourable borrowing conditions, rationalised capital values amongst others which is promoting rising sales across India..

However, developers and builders are eyeing the renewed demand in the residential space as a huge opportunity. “After almost a year-and-a-half, we see a renewed demand in the residential sector. During the last three months, sales have picked up by almost 100%, and with a long buying season ahead, the property prices will definitely move up the graph,” says Sameer Sinha of Savvy Infrastructures Ltd.

“In Ahmedabad, going by conservative estimates, the prices of residential property is expected to rise by another 25-30 % in the next one year”, Mr Sinha said adding that the prices in the city have already risen by about 15% since the markets bottomed out earlier this year. The fresh demand in the housing sector has boosted the confidence of developers as well. Earlier this month, the city-based body of developers, GIHED (Gujarat Institute of Housing and Estate Developers) displayed about 500 projects worth Rs 3,000 crore at property show in Ahmedabad.

“As the economy recovers and grows on a pan-India basis, residential demand is expected to grow along side. C&W Research estimated demand to be over 7.5 million units by 2013 across all categories such as Economically Weaker Section, affordable mid segment and luxury segment. The residential demand for NCR, Mumbai, Bangalore, Pune, Chennai, Hyderabad and Kolkata is estimated to be 4.5 million units by 2013”, Ms Aditi Vijayakar added.

http://economictimes.indiatimes.com/articleshow/5064201.cms

Bangalore Emerging as Most Preferred Real Estate Destination

Bangalore has emerged as a clear preference for sectors like office and retail, while coming a close third in the residential and hospitality according to Cushman & Wakefield, a retail estate research firm. In its report Cushman & Wakefield GRI India Real Estate Investment report 2009: ‘Survival to Revival – Indian realty sector on the path to recovery,’ the firm said that Bangalore is expected to see the highest demand for office space in the period 2009 – 2013 with approximately 34 million sq.ft.

The expected recovery in the IT/ITeS sector would have a positive effect on the demand in Bangalore, the preferred location for many IT/ ITeS companies. The demand for retail sector is also expected to be the highest in Bangalore with approximately 7 million sq. ft. while demand for residential is expected to be approximately 570,000 units over 2009 – 2013, with the highest compounded annual growth rate at 14 per cent. The hospitality sector in Bangalore too is forecast to register the highest compounded annual growth of about 26 per cent in demand, followed by NCR at 24 per cent and Pune at 23 per cent.

The city of Chennai is expected to witness the second highest demand for office space in India between 2009 to 2013 with a projected cumulative 27.2 million sq ft and the city also holds the fifth largest demand share for retail and hospitality space demand in India. Anurag Mathur, managing director, India, Cushman & Wakefield said that the office market in Chennai has seen a renewed interest from the corporate sector, post the economic crisis. While demand will be visibly affected this year, “We expect the five-year horizon (up to 2013) to be upbeat for the commercial markets in the city. The retail and hospitality segments are also likely to see considerable demand in the coming years.”

Chennai is likely to witness the second highest demand for office space after Bangalore of approximately 27.2 million sq.ft. by 2013. Good infrastructure, high quality construction and competitive pricing would be the key reasons for the location to see high demand from corporate sector. Hyderabad is expected to witness office demand of 16.6 million sq. ft. over a five year horizon and records the highest compounded annual growth of approximately 28 per cent during 2009 – 2013 in the office sector along with Pune and Kolkata. The residential demand for Hyderabad is expected to be 290,000 units with the highest compounded annual growth of 14 per cent in the next five years akin to Bangalore.

Mathur, further added that though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector to gradually return to the path of recovery and witness robust demand for real estate across sectors.

http://www.indianrealtynews.com/real-estate-india/bangalore/bangalore-emerging-as-most-preferred-real-estate-destination.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

New ITC hotel blends garden and hospitality

Bangalore: ITC is all set to open the doors of its second luxury 5-star property in Bangalore . Situated at No. 1 Residency Road with an over arching view of the centuryold Bangalore Club, ITC Royal Gardenia is a 300 room, 11-storey high hotel.

A unique feature of the property, keeping in tune with Bangalores image of being a Garden City, is a lobby area that is adorned with vertical hanging gardens.

This opens out into a Lotus Pavilion in the central courtyard , reminiscent of Tipu Sultans Palace at Srirangapatna. The hotels Vertical Gardens are built on steel structures and irrigated by a drip irrigation system.

The water drips evenly and provides moisture to every plant along the entire length. It collects at the base and is recycled for use.
The entire vertical garden area has around 25,000 plants. It reaches up to the 12th floor.

According to Nakul Anand, chief executive, ITC Hotels Division , An eco responsible ethos is an inherent part of our system and in creating ITC Royal Gardenia, the challenge was to see how luxury and responsibility could be in harmony . Bangalore has always been Indias ultimate garden city and in our own small way, we hope to be able to give back to the city what time took away. The groups internationally feted Kaya Kalp Spa brand is part of the property, and so is ITCs other fine dining restaurant brands.

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

Super-luxury is back in the realty lexicon

The sales brochure offers you the opportunity to own Mumbai’s first managed private residences with a “lifestyle elevated up to the sky”. At Rs 28,000 per square foot plus other charges, Indiabulls Sky is also promising a 65-storey “marvel with opulent apartments, timeless luxury and impeccable butler service”.

Indiabulls Real Estate, which has sold one-third of the apartments since the Lower Parel project was launched in the last one month, now says it will be selective in selling the remaining apartments to create a “classy neighbourhood”.

Apartments boasting the tags luxury and super-luxury — the two words forgotten in the real estate world in the last two years — are back with a bang over the last three months. What has brought back buyers this time is the fact that prices are much more reasonable than in 2006-07, when the same kind of apartment would have had an asking price at least 30 per cent higher.

Orbit Terraces, a luxury housing project by realty developer Orbit Corporation, also in Lower Parel, saw around 300 buyers making enquiries for 75 to 80 apartments when it was launched last week. The apartments in the project, which include duplexes with attached terraces, cost Rs 3.3 crore to Rs 6.6 crore for apartments ranging from 1,500 sq ft to 3,000 sq ft.

A host of other developers are also cashing in on what they call the new-found confidence among buyers. Take Mumbai-based Lodha Developers. The company, which used to sell two or three luxury apartments a month in south Mumbai till December last year, now sells 15 to 20 units a month, a top company official says. It has several projects such as Lodha Bellisimo, Lodha Primero, Chateau Paradise, among others, in South Mumbai.

And despite raising prices at the Lodha Primero project in Mumbai’s Mahalaxmi area 30 per cent, the developer has been able to sell 90 per cent of the apartments in the last one month.

“The luxury market was hit hard during the downturn. But sales have definitely picked up since March as the economy is on an upswing,” says R Karthik, senior vice-president of marketing at Lodha Developers.

The rush for super-luxury isn’t restricted to the country’s commercial capital. In Hyderabad, for example, at least eight builders are developing multiple projects, under which each villa or a bungalow is priced around Rs 4 crore.

Sunish Tom, head of Dun and Bradstreet (D&B) Information Services India events and promotions, says there is a huge demand for exclusive, custom-built luxury houses.

D&B recently conducted Millionaire Homes 2009 in Hyderabad, a platform to introduce prospective buyers to property developers. At least 2,000 people have expressed an interest in evaluating luxury properties. Similar events have already been held at Chennai and Bangalore.

Ravi Sharma, deputy general manager (sales) of Lodha Group, which sold its luxury properties by invitation, says the company has identified 5,000 high net worth individuals in Hyderabad. “We do customer profiling before extending an invitation,” he said.

The group sold 108 units of the 120 built in Phase I, due delivery in July 2011. Each unit was priced between Rs 2.5 crore and Rs 3 crore. The group plans to begin its second phase in four months. “There is demand for luxury homes. Most buyers want to stay in them and not see them as mere investment channels,” Sharma said.

What defines luxury is changing rapidly. “Golf is the USP for us. There is a huge appetite for this kind of project,”’ said Masood, managing director, Dax Properties, a subsidiary of Country Side.

Dax is coming up with a golf-centric villa project at Shadnagar (on the Bangalore highway), about 50 km from Hyderabad, covering 300 acres. It will have villas and villa plots ranging from 5,000 sq ft to 15,000 sq ft. In all, it plans to construct 1,000 villas in three phases including 250 villas in the first phase.

“The project is approved and the construction will start shortly,” says Masood, adding that the project cost will be around Rs 500 crore.

Vipul Bansal, joint managing director of Indiabulls Real Estate, says the luxury segment was largely insulated from the economic slowdown. “The main reason for buyers staying away was that there was hardly any stock of high-end products in places such as south Mumbai,” he says.

But analysts say the segment is seeing traction once again only because of aggressive pricing by developers. “Basically, it’s a question of keeping something on the table for buyers who need the comfort that they are buying a property that has scope for a 30 to 40 per cent increase after two or three years,” says Raminder Grover, chief executive of Homebay Residential, a unit of Jones Lang LaSalle Meghraj, an international property consultant.

Some developers agree. “Though sentiment and pricing have improved, if you increase prices by 10 to 15 per cent, products cannot be sold as easily as you sell them today,” says Ramashraya Yadav, head of finance at Orbit Corp.

According to Aditi Vijayakar, director of residential services at Cushman & Wakefield, a real estate consultancy firm, self employed people and businessman form the major chunk of new home buyers. That may not be surprising, since increments for salaried people are still subdued in Indian companies.

Buoyed by the new-found demand, many developers are planning new luxury launches. Orbit is planning one in Lower Parel during Diwali and another one in Andheri after Diwali, while Lodha is planning two more luxury projects in Mumbai shortly.

Source : http://www.business-standard.com/india/news/super-luxury-is-back-inrealty-lexicon/370858/

MK Land eyes India project launch in March

Property developer MK Land Holdings Bhd expects the first phase of the affordable homes development project in India to be launched in March next year.

Its executive chairman, Tan Sri Mustapha Kamal Abu Bakar, said the project will be a replication of the successful model of Damansara Damai, a low-medium cost township developed by its subsidiary, Medan Prestasi Sdn Bhd.

“We are in the stage of planning and hope to launch the first phase in March next year because there is a pent-up demand for properties,” he told reporters after the start of construction works for a business terminal in Damansara Damai in Kuala Lumpur today.

MK Land via its subsidiary Ritma Mantap Sdn Bhd is in partnership with Embassy Group of India to develop and construct a 300-acre township in northern Bangalore, India.
With a total gross development value of RM3 billion, the project is being undertaken by Milan Gateway Sdn Bhd, where MK Land and Embassy Group each hold 47.5 per cent while MKN Embassy Development Sdn Bhd has 5 per cent.

Construction is expected to take off next year while completion will take about five years. It will potentially deliver 16,000 units of affordable homes and about 560 units of retail outlets. — Bernama

http://www.btimes.com.my/Current_News/BTIMES/articles/20090910145014/Article/index_html

Oman Fund Picks 50% Stake For Rs 620 Cr In Mangalore Project

Mangalore based real estate developer Mohtisham Complexes has diluted  50% stake in its 300-acre upcoming township Mohtisham Estates for Rs 620 crore, according to a report in Economic Times. Oman Sovereign fund has taken the stake in the project, which is an integrated township to be developed on the Mangalore-Bangalore highway.

The investment would flow into the project in a phased manner or a one time flow of the total amount, said the report.

The company plans to start the project in early next year and is likely to complete the same over eight years. The first phase of the project is expected to complete in three years. The township will have residential units, a mall, schools, hotel and a special economic zone. Mohtisham is a nearly two-decade-old realty player with presence in the Arabian Gulf.

India has seen a lot of interest from the gulf region in its real estate and infrastructure sector. In July 2008, Bahrain-based Khaleeji Commercial Bank has formed its investment fund, Global Logistix Navi Mumbai Investment Company, with a target capital of $430 million. The fund was established to invest in India’s first integrated logistics city project on a 400-acre site in Navi Mumbai.

Prior to that, in October 2007, Gulf Finance House committed $630 million for Energy City India, an infrastructure project being set up in Navi Mumbai, Maharashtra. In March 2008, Abu Dhabi Investment House (ADIH) also announced the launch of India Entertainment City (IEC) fund, which is financed through a $400 million Sharia-compliant fund.

source: http://www.vccircle.com/500/news/oman-fund-picks-50-stake-for-rs-620-cr-in-mangalore-project

Bolywood Actress Malaika Arora to Launch India’s First Rent-Free Malls

Mumbai, Sep 9: Entertainment World Developers Private Limited (EWDPL), a front-runner in developing shopping Malls, residential townships and hospitality projects, has just announced ‘Treasure Showcase’ – a concept that offers Indian manufacturers and emerging brands to virtually showcase their products / brands in a modern, world-class mall environment.

The most notable feature of Treasure Showcase is that it is a unique ‘no-rent, no cam, no deposit and no maintenance’, which will be featured in 20 malls in 11 states across India by 2011, offering one million square feet of international quality retail space on a revenue share basis. The cities include Agra, Amaravati, Bangalore, Bareilly, Bhilai, Chennai, Hyderabad, Indore, Jabalpur, Kolkata, Lucknow, Mumbai, Mohali, Nanded, Pune, Raipur, Thiruvanathapuram, Udaipur, Ujjain and Vadodara, featuring categories ranging from apparel, footwear, electronics, food, accessories, cosmetics, jewellery and home furnishings. ‘Treasure Showcase’, in fact, is the new face of Indian retail. It is an opportunity for every manufacturer / brand with a vision, to gain from modern retail and take their brand across the nation.

“With ‘Treasure Showcase’, the idea is to enable more Indian products and brands to benefit from modern retail practices, leveraging retail intelligence and a new business / revenue model. Here, emerging brands will rub shoulders with established brands under the same roof. Besides, it will also lead to an increase in footfalls, drawing in consumers, who are currently non-mall customers, offering them greater choice,” said Manish Kalani, managing director of EWDPL.

According to him, EWDPL has always believed that besides creating world-class retail infrastructure, its role is really to promote consumption, by providing emerging Indian consumers access to a wider bouquet of brands / merchandise / choice / price points. This will help modern retail create fresh demand and generate new revenue streams.

Keeping this in mind, EWDPL is creating Retailocracy and a level playing field between what is considered traditional retail and modern retail. The idea is to expand the market for modern retail by promoting consumption and innovating retail, thereby enabling emerging and aspiring manufacturers and brands to enter malls.

Kalani strongly believes that everyone should gain from the emergence of modern retail – manufacturers, brands, retail realty developers and most of all consumers. According to Kalani, while India’s aggregate consumption is set to quadruple by 2025, the emerging middle class in metros, cities and towns will significantly drive consumption across categories, thus creating the need for a whole new generation of brands that are young, trendy and affordable.

‘Treasure Showcase’ brings its partners, mall management experience, operational and retail expertise, trend spotting and an opportunity to be alongside the world’s best brands and reach customers directly. Further, management information systems and databases will be shared to ensure a profitable and efficient business, added Kalani.

Gaurav Marya, president of Franchise India, strategic partners for ‘Treasure Showcase’, said, “internationally, revenue sharing model is getting popular and we feel this will unleash a new era of retailing in India.”

The group expects to generate revenues of over Rs 500 crore by 2011 from Treasure Showcase. Nearly Rs 300 crore will be invested in creating and promoting Treasure Showcase, which would include the cost of real estate. The whole concept will be based on a transparent / pre-determined margin sharing revenue model, added Kalani.

“This concept would have a great impact on the real estate industry, as more realty players will formally join the fray, which will lead to market expansion for modern retail,” said Marya.

Kalani, Marya and others were present at the press meet that was held at Taj Land Ends, here on Tuesday September 8.

Source : http://www.daijiworld.com/news/news_disp.asp?n_id=65437&n_tit=Bolywood+Actress+Malaika+Arora+to+Launch+India%92s+First+Rent-Free+Malls++

Hospitality giant on land hunt for city address

KOLKATA: Zuri Hotels & Resorts a multinational conglomerate promoted by a consortium of investors from West Asia is scouting for opportunities in Kolkata. The company is open to contract management opportunities as well as setting up its own hotel in the city. The Zuri Group is into real estate, floriculture and hospitality with resorts and hotels in Kenya, the UK and India.

“The Zuri group sees tremendous potential in Kolkata and rest of the east. We are keen to be present in the hospitality sector here at the earliest. We are in talks with a couple of hotels on a possible management contract and use of the Zuri brand. If something does not work out within six months, we will look at a 1.5-2 acre plot in Kolkata proper to set up a 140-170 room business hotel. The investment will be around Rs 200-225 crore,” said Aditya Mata, general manager of the Zuri group’s flagship property in Kumarakom, Kerala. The group owns two other hotels in Goa and one in Bangalore.

The team currently camping in Kolkata to negotiate with potential partners is looking for a property with large banqueting facility to tap the marriage market. “Since marriages in Kolkata are elaborate, we want to get into the business. It’s a good money-spinner as well,” said Mata.

Incidentally, the company was looking for land in New Town and Rajarhat but developed cold feet after the Vedic land scam. “Land has become a hot potato. The thing that happened in Rajarhat was an eye-opener. We are now looking for a property in the central business district,” company spokesperson Priti Chand said.

Apart from Kolkata, the group is eyeing properties in Ahmedabad, Pune, Chennai, Nagpur, Visakhapatnam and Mysore. While three of the four hotels that the group has in India are resorts, the company is now looking at business hotels that have a shorter return on investment.

Meanwhile, city-based Gama Hospitality (GHPL) on Tuesday signed a master franchisee agreement with Global Franchise Architects (GFA) to launch four international brands Coffee World, Pizza Corner, The Cream & Fudge Factory and The Donut Baker in the eastern region. With an investment of Rs 52 crore, GHPL will focus on Kolkata in the initial phase this year.

“We intend to open 35 outlets in this part of the country in the next 18 to 24 months using up a cumulative floor-space of about 42,000 square feet. All the four brands should be in Kolkata by the end of this year,” Gama’s director Gaurav Agarwala said.

source :http://timesofindia.indiatimes.com/news/city/kolkata-/Hospitality-giant-on-land-hunt-for-city-address/articleshow/4988332.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

Office space rentals decline at slower rate

While there has been a drop in the rate of decline in office space rental rates in the country in the second quarter of the current fiscal, the absorption rate has shown an uptrend for the first time in four quarters. This is according to a recent research report — State of the Office Sector – by financial and professional services firm Jones Lang LaSalle Meghraj (JLLM). The report shows that the rate of decline, as a national average, has slowed to 8.3 per sent in the second quarter, compared with a dramatic drop of 18.8 per cent in the previous quarter. Nation-wide, rates had dropped sharply in the first quarter of this fiscal as compared with an 8.6 per cent drop in the last quarter of the previous fiscal.The report’s author, JLLM research head Abhishek Kiran Gupta has attributed slowdown in rate of decline of office space rental rates to four factors that have helped shape the Indian economy over the past six months. The factors pointed to are: Firstly, increased liquidity in the market due to fiscal measures taken by the government. Secondly, a sharp rise of 4,536 points in the Sensex in the first six months of this fiscal. The index has risen over 50 per cent after hitting a low of 8,451 points on November 20 of last year post the Lehman Brothers-led global financial crash. Thirdly, strengthened political stability with the UPA governments being sworn back into to power and sweeping the elections by a large margin. The government has also shown its resolve in boosting the economy with a string of fiscal measures as well as its decision to disinvest large public sector undertakings. And lastly, green shoots that are now being seen in the affordable segment of the residential sector. There has been a rise in the number of developers embarking on affordable housing projects across the nation. The study covers seven cities — Hyderabad, Mumbai, Delhi, Kolkata, Bangalore, Chennai and Pune. It, however, does not include Chandigarh. While only Hyderabad has shown a steady decline in office space rentals quarter-on-quarter — from (-)5.8 per cent in Q4 of the previous fiscal to (-)7.6 per cent in Q1 and a further drop to (-)10.4 per cent in Q2 of this fiscal — all other cities, except Pune, have shown a drop in the rate of decline. In Pune, the decline in office space rental rates has been witness to a gradual slowing down — from (-)17.3 per cent in Q4 of the previous fiscal, to (-) 12.9 per cent in Q1 of the current fiscal, to a weak (-)4.2 per cent in Q2. The country’s financial and political capitals — Mumbai and Delhi — have seen a drastic drop in rate of decline. Both cities have seen a near-13 percentage point drop in rate of decline of office space rentals. Gupta contends that the factors that led to the slowdown in decline, coupled with the gradual revival of opportunistic demand, have led to strengthening of absorption rates.

After decreasing since Q2 of the previous fiscal, absorption rate at the pan-India level has picked up for the first time in a year in Q2 of the present fiscal — inching from a low of 7 per cent in Q1 of this fiscal to 13 per cent in Q2. The JLLM study notes: “Net Absorption of office space in Q2 stood at around 4 million square feet, doubling from (the) previous quarter. About 1.8 million square feet of absorption in Q2 is contributed by pre-leased projects of SBD (small business development) Bangalore, which became operational in the quarter. Gupta, in the report, goes on to state that “considerable rationalisation of rents in the information technology (IT) as well as non-IT spaces (has resulted in) opportunistic demand led by domestic occupiers who have expanded their real estate portfolios in various Indian cities. Apart from IT/ITES and BFSI (banking, financial services and insurance) sector, other sunshine sectors -– like telecommunications, pharmaceutical and automotive — are leasing out office spaces in various Indian cities”.

The seven cities covered in the nationwide survey witnessed completions of 7.5 million square feet of office space in Q2 of the current fiscal, taking the total operational office stock to 200 million sq ft. “While vacancy in office space decreased at the country-level from 12.6 per cent in Q1 of the previous fiscal to 11.1 per cent in Q2 of the current fiscal — on account of completion of a few projects and better absorption — it has witnessed a year-on-year rise of 490 basis points,” says Gupta.

There are also chances of high vacancy levels in micro-markets through 2010. As total operational office stock continues to grow, the vacant space available in operational projects continues to augment itself to massive proportions.

Source : http://www.expressestates.in/full_story.php?content_id=93889

RE/MAX India Expand its Area of Operation in 7 More Regions

RE/MAX India, the master regional franchisee of RE/MAX International in India, has expanded its areas of operations in 7 more regions. The company has appointed regional owners for seven new regions which include Bangalore, North & South Gujarat, Rest of Tamil Nadu, Delhi NCR, Chandigarh and Pune. Mr. Samir Chopra, head of RE/MAX operations in India, will retain the Delhi/NCR region in order to maintain first hand experience with the trade. With this development, RE/MAX India is nine regions strong in India within a short span of 4 months into operations.

RE/MAX recently forayed in India with the mission of organizing the Real Estate brokerage industry. The company is rapidly expanding its presence and is planning to establish its operations throughout the country within the next few years. Expressing his delight on this development, Mr. Samir Chopra, CMD RE/MAX India said – “I’m extremely happy and excited about the way things are shaping up. We have found like minded people, who share our values and our vision.”

“RE/MAX India with its network of brokers, authentic information and world class standards of operations will certainly infuse transparency in this sector. The organization of the highly fragmented Real Estate sector will not only solve the woes of the consumers but would also generate many entrepreneurial opportunities in the industry,” Mr. Chopra added.

Source : http://www.indianrealtynews.com/real-estate-india/remax-india-expand-its-area-of-operation-in-7-more-regions.html

B’lore realtors scout Goa, Mumbai for new projects

MUMBAI: With the real estate sector story looking up in large parts of the country, Bangalore-based realty companies are now exploring options to  enter new markets. Among the interested players are Puravankara Developers, Sobha Developers and Nitesh Estates, three of Bangalore’s large real estate companies. It is learnt that these players are drawing up plans to invest in cities like Mumbai , Goa and Pune.

Provident Housing, a fully-owned subsidiary of the Puravankara Group, is said to be in talks with individual land owners in Mumbai to buy land in three locations for affordable housing projects. An industry tracker said Provident Housing is largely looking at western Mumbai for this venture. Ashish Puravankara , director, Provident Housing confirmed the plan to enter the Mumbai market through affordable housing projects though he declined to share details on locations. “We have not bought any land yet and are exploring options in Mumbai,” he said.

The cause for concern, according to analysts, comes from the fact that companies in the sector are highly leveraged. Purvankara , for instance, had a debt of Rs 582 crore on its books at the end of FY09 even as company officials maintained that the the debt-equity ratio at 0.56 was favourable.

Like Purvankara, Sobha Developers is also keenly looking at Mumbai and Pune. A source in the industry said that the company is close to sealing a deal with another developer for an affordable housing project. JC Sharma, managing director, Sobha Developers, when contacted said, “Mumbai is an attractive market and we are certainly interested in it though nothing concrete has been decided so far.” After a recent debt restructuring exercise, Sobha has reduced its debt from Rs 1,900 crore to Rs 1,450 crore. “We are at a comfortable position as far as debt is concerned,” he added.

Joining Purvankara and Sobha is Nitesh Estates which has already bought a large tract of land in Goa for a high-end project . “We would be developing higher end villas in Goa,” L.S. Vaidyanathan, Director, Nitesh Estates. The company is planning to raise around Rs 1,200 crore through an infusion of private equity (PE) funding and a planned public issue. Nitesh is also said to be interested in the Mumbai market.

The consensus is that money will not be easy to raise at a time like this. “It will be interesting to see how these companies arrange for the funds for these projects. While PE money is hard to come by, it will not be easy to take the capital markets route,” said a consultant at an international real estate firm.

Source : http://economictimes.indiatimes.com/News/News-By-Industry/Services/Blore-realtors-scout-Goa-Mumbai-for-new-projects/articleshow/4905366.cms

Changing Real Estate Scenario in Tier 2 and Tier 3 Cities

The demand fundamentals of the India story are now focused around all cities that have sufficient economic activity, be it industrial, service sector-driven or incentive-driven programs by the State Government. In Gujarat, which has seen considerable industrial progress, the key cities of Ahmedabad, Surat and Vadodara come readily to mind. Baddi in Himachal Pradesh and Pantnagar and Rudrapur in Uttaranchal attracted a lot of residential developers that met with success, thanks to proactive Government policies. In the South, Coimbatore, Vizag and Kochi emerged, either thanks to a large investor segment or as the outcome of sufficient economic activity. Towards the West, Pune, Nasik and Nagpur are noteworthy in this context. In all cases, developers positioned their development close to industrial hubs, targeting a totally different price segment and making the most of it.

This said, every developer was inspired to create a national footprint three to four years back. While this was a worthy ambition, it was poorly conceived as a plan since many of them did not factor in State Government-level regulatory challenges such as local municipal laws. They also did not consider that they may not have had the requisite financial resources, organizational depth and knowledge of the local markets to manage and execute projects in Tier II and Tier III cities. Nor had they accurately gauged the demand fundamentals of these locations. Such developers proceeded to enter into land acquisition on their own equity and were caught short-footed, not realising that the property cycles were then at their peak, and that there was bound to be a correction – if not a fall.

Major players are now going to re-align their positions vis-à-vis unexplored territories. There is now a very clear realisation that it is extremely difficult to become a genuine Pan India player in every geography and real estate segment. Moreover, developers today have woken up to the fact that there is only limited capital available to real estate players today – capital that is earmarked for residential projects, construction funding against achieved leases and signed contracts, or for cities displaying sufficient demand even in subdued market conditions. In the current context, it makes sense for developers to re-strategize and focus on their core geographies. For example, if a certain developer is extremely accomplished as a residential player in the South, having high credibility and sufficient brand recall in this region, such a company would ask itself how wise it is to experiment in the North or the West, and whether it would not make more sense to expand in the South.

Likewise, developers accomplished in IT projects would now concentrate on geographies that feature a healthy IT component, and avoid branching out into cities that lack a sufficient volume of such activity. Such developers would see the virtue of focusing on IT-centric cities such as Bangalore, Hyderabad, Chennai, Mumbai, Gurgaon and Pune, and re-think on plans to invest in cities that lack Information Technology activity. Tier II and Tier III cities still represent a great story, especially in terms of affordable housing for industrial workforces. However, this story may no longer be suitable for some of the larger developers. These are locations where the strength of regional players will come into play. There is at least one strong developer in every region. For instance, Panchshil Realty, Magarpatta, Paranjape Builders and Kumar Builders are very powerful local brands in Pune, with a company like Pharande Spaces practically spearheading the residential drive in Pune’s PCMC area. These brands have demonstrated that they understand their geographies better than any players who arrive from the outside to experiment on the Tier II / Tier III story.

The success of these local developers will inspire larger developers from beyond a region’s borders after the fundamentals of that area’s demand are captured sufficiently and the markets are sanitised in terms of municipal and financial market stabilisation. In the next one to two years, developers will have realigned their business strategies sufficiently to leverage the potential of Tier II / III cities that have sufficient market drivers or are witnessing considerable investor activity (such as Kochi, Surat, Mohali and Chandigarh).

Source : http://www.indianrealtynews.com/real-estate-india/changing-real-estate-scenario-in-tier-2-and-tier-3-cities.html

Realtors turn malls and office plans into homes

Mumbai: Residentials hot, commercial space not.

With developers forced to return to the drawing board to make projects financially viable, the landscape is, indeed, changing.

Look what TTK Prestige, the cooker-to-condom maker, said in a notice to the Bombay Stock Exchange last week.

In 2007, the company had entered into a joint development agreement with Kolkata-based Salarpuria Group to develop a 6.3 acre site in Dooravani Nagar, Bangalore.

The initial plan was to construct a mall to ensure recurring rentals. But the financial crisis has forced a change: residential blocks will be added to the project.

“Taking into account the ground reality, Salarpuria suggested putting up a residential-cum-office space. But a decision on this is yet to be taken,” said K Shankaran, director and secretary, TTK Prestige.

The management feels the new plan makes sense from a liquidity point of view.

Also last week, another firm, Sunteck Realty, said it was revisiting its project –a commercial complex on a 1.5 acre site between Kandivali and Borivali. “The project hadn’t even reached the drawing board when we closed the deal a few months back. However, taking into account the oversupply situation in Mumbai’s commercial space, we thought it prudent to develop a high-end residential complex instead, with a small portion of retail added to it,” said Sunteck Realty managing director Kamal Khetan.

Orbit Corporation, the south Mumbai realtor, decided convert its 2.5 lakh sq ft commercial development, called the Hafeez Contractor House in Lower Parel, into a residential project.

Pujeet Agarwal, managing director, Orbit, said the company is actually converting two commercial developments — the Lower Parel one and another in Andheri — into residential ones.

Realty analysts said oversupply and declining demand is making such commercial space development unviable.

“The government’s initiatives towards reducing borrowing costs is reflected in declining interest rates on home loans. This, coupled with realty prices getting more realistic are helping maintain the excitement in the residential space,” said Sanjay Dutt, CEO, business, Jones Lang LaSalle Meghraj, the real estate consultancy.

Revival in demand for commercial space, meanwhile, will largely depend on the global economic scenario.

“The only movement that I see is offices being relocated to more reasonably priced commercial developments thereby cutting costs,” said Dutt.

Investment bank Goldman Sachs in a recent report, said primary residential volume trends (year to date till May this year) indicated recovery in markets such as Mumbai and Noida.

“Inventory days in the two cities have fallen back to early 2008 levels or better. However, the overhang in Bangalore, Chennai, Gurgaon and Hyderabad remains significant with at least 15 months of inventory in the pipeline,” Goldman analysts Vishnu Gopal and Aditya Soman wrote.

With inputs from Pooja Sarkar in Kolkata

Source : http://www.dnaindia.com/money/report_realtors-turn-malls-and-office-plans-into-homes_1282909

Bangalore Property is on boom, taking place in India.

Bangalore Property is on boom, taking place in India. Keeping pace with this rocketing real estate market is the Bangalore Real Estate Market. The catapulted growth in the advent of IT and ITES sector in Bangalore has made it the leading choice of investors and builders alike.

The surrounding areas of the city such as Mysore Road, Chamarajpet, Basavanagudi, Whitefield, Rajajinagar, Malleshwaram, have also caught the eye of builders and are being developed extensively to cater to the growing demand of the investors in Bangalore Property.

A large part of the population of the city comprises of service class people staying in Bangalore to work in the  city. Due to this, it is a lucrative choice for them to purchase apartments and property and rent it out or sell it off at a higher price later on. The rate of appreciation of the properties in Bangalore is very high. Moreover, due to the multicultural population of Bangalore, the builders focus on constructing and developing apartments in Bangalore that meet the international standards of luxury and style.

For More Information about Bangalore:-
www.investinnest.com/properties/city/bangalore/bangalore_propert ..

Bangalore Property rates have been on the rise and have always manifested fantastic real estate opportunities. Bangalore proves to be a wise choice for people looking for investing for short spans of time as well as for people with long term investment plans, due to the high rate of appreciation of its Real Estate market.

Source : http://www.pr-inside.com/bangalore-property-is-on-boom-taking-r1433433.htm

Developers relaunch, resize luxury housing

Old projects are being tweaked; new and smaller homes at lower prices to attract buyers are being introduced font size

Bangalore/New Delhi: It has sold just around one in three villas in a project it launched in Bangalore late last year, so QVC Realty Pvt. Ltd has now introduced new, smaller homes in the same project at lower prices to attract buyers.

New packaging: A sketch of high-end residential project Lodha Aria launched by Lodha Group in Mumbai’s East Parel in March 2008.

The villas are still available for the asking—for Rs1.5-3.4 crore—but the new houses will cost far less, between Rs72 lakh and Rs94 lakh.

As demand trickles back into the property sector, particularly in the affordable housing space, bringing back buyers and pushing up sales, developers such as QVC Realty, Lodha Group, Unitech Ltd and Ajmera Group are trying various ways to revive their so-called luxury projects in Bangalore, Mumbai and Delhi. So while some are adding cheaper homes alongside villas to boost sales, others are relaunching their high-end offerings in the hope that there will be demand for them.

Prakash Gurbaxani, chairman and managing director of QVC Realty doesn’t think so, which explains his company’s decision to launch the smaller houses: “Given the current market dynamics, we recognized the need for a lower ticket size product. Buyers are eager to see prices for homes come down and this time it is end-users, and not speculators, driving the demand.”

The Rs150 crore project is the first development of Bangalore-headquartered QVC Realty Pvt. Ltd, the country’s first venture capital-funded realty firm, backed by IL&FS Investment Managers Ltd.

Still, other developers remain hopeful about the prospects of their relaunched offerings.

Lodha Aria in Mumbai’s East Parel area, a high-end residential project, was launched by the Lodha Group in March 2008. It was a limited soft launch, primarily for investors and the firm closed a couple of deals. In July, the project was launched again, this time for buyers. The project has 30 three-bedroom apartments, two on each floor, at 2,100 sq. ft each, with prices starting at Rs3 crore.

“It’s a good time to launch now after a dry spell last year because buyers’ interest is rising,” said R. Karthik, vice-president marketing, Lodha Group.

The launch, he added, was triggered by rising demand at the company’s other Mumbai project, where an 1,800 sq. ft apartment costs Rs3 crore. “What worked for us wasthe various sizes of apartments that buyers could pick from.”

Analysts second Gurbaxani’s assessment of the market and say demand is yet to return to the “luxury” segment of the real estate market and that there are several reasons why developers are relaunching such projects.

“First, luxury projects aren’t selling as much as affordable ones, so many projects have been reclassified from luxury to ‘upper middle class’. Developers are repositioning projects by cutting the size of apartments,” said Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, a real estate advisory.

And demand has returned to this segment in Mumbai, Puri added.

“Developers rationalized prices by reducing size of apartments by 25-45% and by offering price protection to buyers by telling them that if prices came down, they would be given the benefit of the price drop,” Puri said.

A Bangalore developer has chosen to go the other way.

In a recent auction of nine premium homes for Rs5.5 crore each in the Century Avalon project located at Jakkur in north Bangalore, not a single residence was sold. The builder, Century Real Estate Holdings Pvt. Ltd, has now decided to sell only two to three homes in the project and sell the rest once they are ready. Houses that are ready to move in typically fetch a higher price. The developer is changing part of the masterplan to make the houses bigger and is offering customized interiors.

Unitech recently redesigned its luxury project Unitech Grande on Noida Expressway. From penthouses and duplexes, the firm now plans to relaunch the project as an integrated township with high-rise apartments, villas and developed plots.

Unitech Grande was planned on 347 acres acquired by Unitech for Rs1,582 crore in May 2006 in what was then the largest land deal. Initially, 12 towers were planned, with 36-45 floors each, including duplexes and penthouses. Waning demand for luxury apartments propelled Unitech to redesign the project. This May, the firm launched residential plots, called The Willows, at the site. Around 200 plots have been sold, a company spokesman said.

“There is demand in the market but the pricing and the positioning of the product are important,” said Alexander Moore, managing director, L.J. Hooker India, a real estate agent that conducted the auction.

At the Ajmera Infiniti project in Bangalore’s Electronic City, the developer is now selling cheaper homes in the Rs20-27-lakh category three years after the project’s launch. After initially trying to sell houses for Rs40-72 lakh, the developer is revising the plan for the remaining part of the project and will now build 250 two-bedroom and 180 three-bedroom flats.

“We have seen huge demand in other projects in the same price category. We have got lot of enquiries since we made the change,” said Bandish Ajmera, the Ajmera Group’s managing director.

Source : http://www.livemint.com/2009/08/11215029/Developers-relaunch-resize-lu.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

Puravankara buys 62 acres in Bangalore for Rs 150 cr

MUMBAI: Provident Housing, a fully-owned subsidiary of the Bangalore-based Puravankara Group, is learnt to have bought a 62-acre land parcel in the  outskirts of Bangalore. The deal is believed to have been struck for a value of Rs 150 crore.

A person involved in the deal said the company is planning a low-cost housing project. The deal between Provident Housing and the seller, who is an individual, was signed earlier this month. “The price paid for the land is quite nominal,” the person added.

A senior official with the group confirmed to ET that the land had been bought, without revealing the size of the transaction. “The land parcel is located on the Mysore road around half-an-hour away from the heart of Bangalore,” he added. This is said to be an outright purchase with Provident Housing, scheduled to make the payment in two tranches. In the first stage, the buyer has paid a nominal token amount at the time of signing the agreement and the balance would be paid when the project is completed.

Recently, many real estate developers have been exploring opportunities in the affordable housing sector. The Puravankara Group will have these projects in Chennai and Bangalore and is negotiating deals in Hyderabad and Coimbatore. It is learnt that deals in Hyderabad and Coimbatore will be finalised in a month.

The affordable housing concept has gained ground with players like Tata Housing launching a project in Boisar, which is a two-and-a-half hour train ride from Mumbai. This project has come to be known as “Nano houses.” Typically, the definition of affordable housing is a price tag of Rs 45 lakh in a tier I city.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Puravankara-buys-62-acres-in-Bangalore-for-Rs-150-cr/articleshow/4849791.cms

Big-ticket land buys on realty radar again

With a boost in sales and better cash flows from the June quarter, the appetite for land has improved

Bangalore/New Delhi: With the first signs surfacing of a revival in the realty sector, several developers have resumed buying large plots of land for building luxury and budget housing projects as well as to enter new markets.

India’s largest residential developer, Hiranandani Group, Lodha Group, Indiabulls Real Estate Ltd, Provident Housing Ltd and Anant Raj Industries Ltd have purchased tracts of land in cities such as Mumbai, Kochi and Pune at lower valuations following a boost in sales and improved cash flows from the June quarter.

The Mumbai-based Lodha Group, which last year had kept away from land deals worth more than Rs50 crore, came out of its sabbatical in July when it bid Rs710 crore for the 10.4-acre defunct Finlay property in Mumbai, auctioned by National Textile Corp. Ltd (NTC).

NTC now plans to put the Kohinoor Mill No.1 property in central Mumbai on the block for Rs1,100 crore. The Lodha Group may bid for this property as well, said a top executive.

“We bid for Finlay because we are planning new supply, more projects,” said Abhisheck Lodha, director, Lodha Group. “We may buy more land if the deal is good. We would build high-end homes in one part of it.”

In 2005, when land prices were beginning to peak, Lodha had bought Apollo mill, another NTC property in Mumbai, for Rs180 crore.

“The appetite for land transactions has improved. And if that continues, we can say the market has revived,” said Hari Pandey, deputy general manager (finance), Housing Development and Infrastructure Ltd, or HDIL.

The economic downturn had pushed developers such as DLF Ltd, Unitech Ltd—India’s top two realty firms—and Sobha Developers Ltd to sell land and non-core assets such as hotels.

This lull in buying land, which began sometime in mid-2008, followed a three-year realty boom that saw a spate of expensive transactions and continuous land assembling by developers.

Realty firms say they are now buying land for specific purposes. Land prices have not climbed down on par with property prices, but have dipped by 10-20% in certain markets such as Mumbai, Pune, Bangalore and Chennai.

Hiranandani Upscale, founded by Surendra Hiranandani, managing director of Hiranandani Group, intends to buy land in smaller cities such as Pune and Kochi to build townships.

“We are in talks with four private equity players—three foreign and one domestic—to raise about Rs800 crore to develop these projects,” said Hiranandani.

The company also plans to launch three projects in Bangalore, Chennai and Hyderabad, where it already owns land.

Indiabulls Real Estate, the country’s third largest developer by market value, is set to buy land in the metros and large cities after selling small parcels in the past eight months, primarily non-core assets such as 2-3% of a 150-acre plot in Sonepat, Haryana.

“We want to buy land in the heart of the city and are looking at Mumbai, Delhi and Chennai. We are also interested in buying through the government auction route and are looking for attractive deals,” said Gagan Banga, chief executive, Indiabulls Financial Services Ltd, and group spokesman.

Developers are in a relatively better position to buy land after restructuring debt and offloading part of their inventory, said Ashutosh Limaye, associate director (strategic consulting), Jones Lang LaSalle Meghraj, a property advisory.

“We will now see a lot of developers roping in a partner to buy land. Developers will also tie up with private equity funds at the land buying stage, which was not very common earlier,” Limaye said.

As it became more difficult to buy land due to a severe cash crunch, many developers resorted to joint venture projects with landowners to cut costs. But many projects didn’t take off because the landowners demanded more money, he added.

Another set of developers is scouting for cheaper land parcels far from city centres for low-cost and mid-segment housing projects.

After launching two low-cost residential projects in distant suburbs in Chennai and Bangalore, Provident Housing, a subsidiary of Bangalore-based Puravankara Projects Ltd, is negotiating with landowners in Kochi and Coimbatore. Typically, Provident’s apartments are priced at Rs15-20 lakh, excluding taxes.

“We have restrictions in cost because we need to build the homes in a lower price bracket,” said Jayakar Jerome, managing director of Provident Housing, at the launch of the Bangalore project this week.

For other builders, the worst is clearly behind them. Anant Raj Industries, which has a land bank of 990 acres, has set aside Rs400 crore for buying land in prime locations as prices have fallen, Anant Raj is looking at launching houses near New Delhi in the Rs15-18 lakh range, said Amit Sareen, executive director.

http://www.livemint.com/2009/08/02214942/Bigticket-land-buys-on-realty.html?h=B

Karnataka tier 2,3 realty still down

BANGALORE: Despite Bangalore’s real estate market showing signs of recovery, properties in tier-2 and tier-3 cities across Karnataka are still down in the dumps. Demand for both residential and commercial real estate in these cities is down by up to 35% as buyers are opting for cheaper options in Bangalore.

Mumbai-based developer Sunil Mantri has been eyeing the tier-2 market in Karnataka but he says the recovery in these markets is not likely anytime soon.

Says Sunil Mantri, Chairman, Sunil Mantri Realty: “The tier-1 city is very cheap and property prices are very competitive. Particularly in the IT segment. There would be an impact on tier 2 cities; because if Bangalore can offer Rs 20 rental people would be reluctant to go Mysore which can offer a rental of Rs 15. That is the competition we are facing in Tier 1 vs Tier 2 cities.”

According to industry estimates, Mysore’s real estate market has seen demand drop by 25-35%, while Mangalore has seen demand drop by 25-35%. This trend is similar in other Tier-2 cities down south like Kochi and Coimbatore has seen demand dropped by 15-25%.

Analysts say new projects in Tier-2 cities have been put on hold as there is already oversupply in these markets.

Karun Varma, MD, JLLM – Bangalore: Correction can be anywhere between 10% and 40% and that’s what we’ve seen in tier 1 cities and that’s also happening in tier 2 cities especially on new projects which have been announced.

Analysts say the recovery in the Tier-2 and Tier-3 markets will happen only after the Tier-1 market get back on the growth track. Developers are looking to push sales by cutting down prices in tier one cities and are looking to cash out of smaller markets to reduce risks.

Source : http://www.utvi.com/utvilife/real-estate-market-news/27679/karnataka-tier-2-3-realty-still-down-.html

Mall owners focus on space fillers

AHMEDABAD: Mall vacancies in major retail destinations such as Delhi, Mumbai, Pune and Hyderabad climbed between 5% and 15% in June 2009, even as  developers rewire their strategies to sustain cash flows. During the past six months, developers juggling with various revenue models have discovered to their relief that certain “flexible” formats like ‘minimum guarantee’ and ‘revenue sharing’ have picked up steam.

“Riding on a 30-40% annual rental growth in 2006 & 2007, and strengthening consumerism, developers in India planned and began constructing malls in dozens. A rental correction of 30-35% from the peak in 2008 was not able to entice retailers, leading to several malls becoming operational in the first six months of 2009 at high vacancies,” says Abhishek Kiran Gupta, head — research of global real estate consultancy firm Jones Lang LaSalle Meghraj (JLLM). According to Mr Gupta, the mall vacancies have continued to increase between 5% and 5% in retail hotspots like Delhi, Mumbai, Pune, Bangalore and Hyderabad.

“Select malls like Inorbit and Forum Value Mall in Bangalore, along with Select City Walk in Delhi, have shifted to a combination of minimum guarantee and revenue sharing models, accompanied by a performance clause in the agreement. Depending on the format of the store and the tenant, the revenue-sharing terms are decided,” Mr Gupta says, adding, “Such flexible revenue models are highly acceptable to the retailers as the risk is shared between the real estate owner and the retailer. Also, it makes the developer more accountable for generating footfalls and conversion rates in the mall. For the developer, it reduces the risk of high vacancy in the mall while counting on the probability of better revenues in future.”

Similarly, developers like the Entertainment World Developers Pvt (EWDPL) are in the process of constructing 20 such malls based on the revenue-share model across India. Gaurav Marya, the president of franchise solution company, Franchise India Holdings, says, “The revenue sharing model, where developers don’t charge rent and accommodate more local retailers into the malls, including local brands, can encourage a seamless model benefiting all the stakeholders.”

Retail consultant, Mr Wahid Ravji chips in: “The revenue-sharing model existed on the international retail scene, but has come very late to India. Most of the big deals finalised between retailers and mall developers are now on the revenue-sharing model. This model works well for both. Retailers now do not wish to shell out more than 4-5% of sales as rent, compared to the 10-11% they used to pay till a year ago.”

According to Mr Ravji, the model will ensure that the mall developer continues to remain “interested” in the property and there are enough retailers in the mall to attract significant footfalls.

Source : http://economictimes.indiatimes.com/News/News-By-Industry/Services/Retailing/Mall-owners-focus-on-space-fillers/articleshow/4823854.cms

Developers Start New Projects Leaving Old Projects Midway

Home sales in India may be on the rebound, with real estate firms launching new projects to tap a revival in housing demand, but Ajay Jain remains an angry customer of DLF Ltd, the country’s largest property developer by sales. Singapore-based Jain, 49, who signed up in August 2006 for a four-bedroom apartment in DLF’s Belaire project in Gurgaon, a satellite town south-east of New Delhi, is upset that he has paid the developer at least 85% of the cost of the flat—Rs2.4 crore—but only half the work has been completed so far at the site. At the time of booking, Jain said, he was told that the project would be completed in three years—by August 2009. After paying two-three instalments, DLF gave Jain the buyer agreement in February 2007, which said that possession would be given within three years of signing the agreement.

“Though DLF has collected the money for this project, they are not bothered about completing it and instead, they keep investing in other projects,” Jain said in a phone interview with . Belaire is likely to be delayed by 15 months, say real estate consultants. Buyers such as Jain—those who bore the brunt of the downturn along with developers—are in plenty. Since mid-2008, projects of almost every developer across cities have been stuck, delayed or shelved. Average delays have ranged from six months to a year. But what irks buyers even more now is that while several existing projects are stuck mid-way, developers have started launching new ones. These projects, mostly in the budget range, promise possession to buyers within two years, yet there are few signs that the pace of construction at existing, delayed projects will be accelerated.

DLF declined to comment as it was in the mandatory silent period ahead of its first quarter results, likely to be released later this month. Since mid-2008, projects of almost every developer across cities have been stuck, delayed or shelved. In November, the company’s chairman K.P. Singh had said its assets under construction spread over hotels, residential and commercial projects were delayed because of lower demand and an industrywide liquidity crisis. DLF’s Belaire and Park Place projects in Gurgaon are likely to be delayed by 15-18 months, say consultants. Belaire was to be ready by August and Park Place by October. A visit to the sites showed that both projects are far from completion. At both sites, only the structure of the towers are ready. The DLF website reflects as much: Structural work is in progress both at Park Place and Belaire, it says.

With these projects lagging, DLF launched 2.8 million sq. ft of residential projects in the first quarter of fiscal 2010, compared with 2.1 million sq. ft launched during the first quarter of fiscal 2009, according to a July report by Motilal Oswal Financial Services Ltd, a brokerage firm. This is true of other developers, too, who have launched new projects—mostly in the budget or affordable housing category—to generate cash flows even as their existing projects await completion. According to Motilal Oswal, real estate developers, including DLF, Unitech Ltd, Indiabulls Real Estate Ltd, Puravankara Projects Ltd and Housing Development and Infrastructure Ltd, have launched 36 million sq. ft of residential space in the quarter gone by, compared with 2.6 million sq. ft in the year-ago quarter, across cities such as Mumbai, New Delhi, and its suburbs, Bangalore, Chennai and Hyderabad. Of this, developers have already sold 44%, or 16 million sq. ft, of homes.

Unitech’s Fresco, Escape and Harmony projects, all within a 300-acre township, Nirvana Country in Gurgaon, look delayed as well. According to Unitech’s website, Escape and Harmony are to be delivered in the January-March quarter of 2010 and the first phase of Fresco is expected to be completed by the last quarter of 2009. But during a visit to the Escape construction site last week, site workers said construction had just restarted after a lull and it would take at least a year-and-a-half to finish the project. At Escape, only the structure is ready, but the landscaping within the project is still not done. Arvind Panwar, a buyer at the project, is visibly worried. He had bought a three-bedroom apartment in Escape for around Rs1 crore in July 2006. He had opted for a down payment plan, paying 95% of the cost of the flat at one time in return for a 10-11% discount on the base price of the flat.

Panwar, 35, who works with a tech firm in California, US, feels weighed down by loan instalments of around Rs70,000 every month. “I am worried because I am paying my (loan) EMIs regularly, but there is no clarity on when the possession of the apartment will be given,” he said. Panwar’s buyer agreement says the flat would be delivered within three years—a deadline that matures next month. “The penalty for delay that they have said they will pay (Rs5 per sq. ft per month) is nothing compared with the EMIs I am paying,” he said. “I have been getting lots of emails from Unitech and brokers on the new projects they have launched. I get frustrated when I see those mails.” Unitech had not responded to’s queries on email and text messages until late Wednesday. In Mumbai, with five projects still at various stages of construction and far from completion, local realty firm Neptune Developers Pvt. Ltd has launched two more this year.

A 125-acre affordable housing project was launched in March near Kalyan, about 50km north of south Mumbai, and an upmarket, 30-storey twin tower project in Bhandup, a northern suburb of the port city, in April. The developer is clear about the urgency to do so. “One needs to run the show and for that, one needs to keep adding cautiously to one’s portfolio even when times are not that good. We are only launching projects that will sell and ensure cash flow,” said Nayan Bheda, managing director of Neptune. The firm has sold 2,000 of 2,100 apartments in its budget housing project at Kalyan, said Bheda, and expects the development at Bhandup, priced at Rs5,000 a sq. ft, to sell out,too. The quantum of sales at the Kalyan project could not be independently verified by . A realty consultant seconds Bheda’s candidness. “Some developers are launching new projects in a particular price category to ensure cash flow to fund construction of its delayed, existing projects even at a lower profit margin,” said Ashutosh Limaye, associate director (strategic consulting) at Jones Lang LaSalle Meghraj, a property advisory.

Construction at Neptune’s projects running behind schedule has picked up after slowing down, Bheda said, without giving any more details. It doesn’t help, as a spokesman for Parsvnath Developers Ltd said, that realty firms see further liquidity pressure as buyers at older projects default or delay their instalments due to the developer. Bangalore developer Brigade Enterprises Ltd has nearly 20 projects at different stages of construction, each of which is lagging behind by at least six months from completion dates expected earlier, M.R. Jaishankar, chairman and managing director of the company, said at a press meet earlier this month. The Brigade Gateway-branded luxury apartments project in north Bangalore, for instance, is at least 10 months behind schedule and several blog sites on the Internet are flooded with complaints on the delay from customers there. The company has plans to enter the budget housing segment.

Source : http://www.indianrealtynews.com/real-estate-developers/developers-start-new-projects-leaving-old-projects-midway.html

Go and grab your dream home

A house for Mr Surinder Sharma  will now cost less with markets correcting approximately 10-30 per cent in Delhi NCR, Mumbai, Bangalore and Chennai. The next three months, say real estate watchers, are the best time to close a deal.

Where property buying goes, the buzz is that it’s no longer the worst of times. For instance, real estate worth Rs 50 lakh six months ago, will now cost 40 lakh. And with interest rates down to 8 per cent from 13-14 per cent, what the consumer shells out effectively is Rs 32 lakh. In other words, this is the best time to buy.

Indirapuram based finance  professional  Rakesh Mishra  started his search for a house four months ago.  He zeroed in on a project which was launched last month. It’s at a prime location, and comes for a good price. “With the Navratra discount, the house cost me Rs 26 lakh,” he says.

Deals like this are bringing realty back to life again. “This is the right time to do your research and consider buying a  house at the right and real price. Developers are more than willing to give in to the demands of a serious buyer,” Dr. Devender Gupta CMD, Century 21 India. Many who aren’t buying are window shopping. Average buyer interest over the last two months has risen to 30-40 per cent. Experts anticipate an upward trend in the market between May and July. With prices rationalising in many pockets across the country, the dream house is looking affordable for a significant corpus of aspiring buyers. Those who have identified a suitable property and have the financial means to take the plunge should do so now. A deferred decision, say experts, might mean passing over the best bargains.

Developers are wooing customers like never before. “The buyers, chiefly end users are back into the market. There are realistic bookings happening today,” said Alimuddin Rafi Ahmad, managing director of prestigious ILD group. PK Jain,Executive Vice President,PNB housing finance Ltd agrees. “Developers this season are seeing a lot of inquiries, the phones have started to ring again and that is very encouraging. With interest rates dropping enough to take a home loan and prices correcting by almost 10-30 per cent, it’s a good time to get back to the market.”

Even top developers DLF and Unitech who focus on luxury apartments are now coming up with affordable housing projects. Rajeev Rai,vice president, Assotech group, says that the prices have corrected by almost 30 per cent. Developers are tailoring products according to customer needs across all segments, instead of the earlier stress on high-end housing.

Moreover, as Sunil Jindal,director, SVP group points out, “Besides the interest rates and prices moving downwards, consumer fatigue has also set in. How long will a buyer wait? He may as well come forward and buy.” The market is seeing a new movement because of the pent-up demand from end users —  people who typically plan to buy a property for their children and see a future in real estate, says an executive of Cushman & Wakefield. Those with a budget of Rs 20-30 lakh should seal the deal as any further correction is unlikely, points out Jindal.

According to Chaitanya Manohar, director & COO, L.J. Hooker India, Bangalore, “We have seen increased level of activity (enquiries) across Bangalore specifically in projects that are close to completion (possession in 6-8 months). There has been tremendous interest especially in the Rs 20-45 lakh range from first-time homebuyers.” Buyers today have plenty of choice; there are properties under construction for which possession is due in the next three to nine months. “He can expect reasonable returns as the market would be up and moving when he finally gets his house,” says Anil Makhijani of Mak Realtors of South Delhi.

So does that make it a bad time to sell? Well, perhaps. Rizwan, a senior manager with a job portal, recently sold his apartment in Faridabad for the same price at which he had bought it. “I had to dispose of the Faridabad house to take possession of my house in Indirapuram. The house cost me Rs 1,690 per sq ft two years ago. I did incur a loss in terms of the EMI and the foreclosure charges I had to pay the bank,” he said.The market is not favouring the seller, but he can use it to his advantage. He may be able to sell his house to move to a better location or upgrade from a two-bedroom house to a three-bedroom at the same price. A person who bought property more than 3-4 years ago may make a profit if he sells now

http://www.mynews.in/fullstory.aspx?storyid=22058