DLF plans to make affordable homes

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

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

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

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

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

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

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

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

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

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

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

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

Omaxe to launch four housing projects

NEW DELHI – With the housing market slowly picking up, realty major Omaxe Ltd is planning to launch four projects shortly, a top official said here Tuesday.

“We are planning to launch four projects in the next two to three months with an investment of about Rs.1,500 crore,” Rohtash Goel, chairman and managing director of Omaxe, told reporters on the sidelines an event here.

“The company is planning to raise about Rs.2,500 crore from these projects,” he said.

The projects will be launched in Faridabad, Indore, Allahabad and Chandigarh. The company has already acquired land for construction.

All these projects will be completed in 30-36 months, depending on clearances.

“Last year was really painful, but this year the demand is improving. Buyers are returning to the market and we are expecting good sales this Diwali,” Goel said.

http://blog.taragana.com/n/omaxe-to-launch-four-housing-projects-180596/

Sarovar Hotels to have 60 properties in India by end of next year

With an aim to expand its hotel portfolio in the country, Sarovar Hotels plans to have 60 hotels by end of 2010. The hotel chain currently operates 36 properties across 29 destinations in the country. Plans are in the pipeline to open five properties by end of 2009.

Though the hotel chain has franchise rights to develop Carlson Hotels Worldwide’s Park Inn and Park Plaza brand in India, it is currently focusing on developing its own brands. “Of the 31 properties currently under development, we have nine properties branded as either Park Plaza or Park Inn. The rest will be under the Sarovar Premier, Portico or Hometel brands,” informed Anil Madhok, Managing Director, Sarovar Hotels Pvt. Ltd.

In the first three quarters of 2009, the chain launched 50-room Renaissance Sarovar Portico, Hosur (Bengaluru); 70-room Pak Inn, Jaipur; 50-room Park Inn, Gurgaon (Civil Lines) and 50-room Peerless Sarovar Portico, Port Blair. By March 2010, the hotel will launch 49-room Sarovar Portico in Ludhiana; 65-room Sarovar Premiere in Siliguri; 118-room Hometel in Chandigarh; 134-room Ole Sereni in Nairobi; 80-room Sarovar Premiere in Gurgaon; 90-room Park Plaza in Ahmedabad; 70-room Sarovar Portico in Faridabad; 60-room Park Inn in Shahdara (Delhi); and 85-room Hometel in Hari Nagar (Delhi).

Talking about the marketing strategy of the company, Ajay Bakaya, Executive Director, Sarovar Hotels Pvt. Ltd. informed “Our marketing strategy is hotel and brand specific. This is continuously evolving in view of the prevailing market conditions locally, across India, and globally. We will continue to design and adapt strategies to the changing requirements.”

Source:http://www.travelbizmonitor.com/sarovar-hotels-to-have-60-properties-in-india-by-end-of-next-year-8361

Real estate survey shows silver lining for market

CHANDIGARH: Presently facing a downward trend, the real estate market is likely to recover by 2010 with increase in demand for residential segment driven by improving affordability, steady economic growth and greater liquidity. These are the findings of a survey carried out in 10 cities, including Chandigarh, by the Crisil Real Estate Research Group.

The report says, “Demand in the residential market is expected to turn positive in 2010 due to these factors, however, a decline in the currently over-priced capital values of all the three real estate segments – residential, commercial and retail would persist through 2009.” “The commercial and retail markets would continue to witness erosion in lease rentals through the next two years,” it states.

The report provided information and analysis of more than 400 acres of land across 88 micre markets in 10 cities – Ahmedabad, Bengaluru, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Mumbai and Pune.

The report indicated that capital values for residential sector and lease rentals for commercial and retail properties have substantially corrected till March this year, due to slowdown in both the domestic and global economies. Cities such as Kochi, Chandigarh and Pune, which have greater investor presence as against end-users, witnessed a greater fall in capital values compared to other cities, the report revealed.

However, Crisil believes that demand for houses would improve in 2010, backed by lower home loan interest rates as well as better job security owing to higher growth in the economy.

Expressing confidence in the report, a leading real estate agent of the city, Sunil Kumar, said, “Apart from the low interest rates on housing, another important factor for the rising demand in 2010 would be the upcoming international airport in Chandigarh. The direct Dubai flight from Chandigarh would also add to arrival of many big business houses here.”

Kumar insisted that these factors would compell more and more tricity tenants to go for owning a property of their budget and choice. “The demand for residential properties would be more in the neighbouring areas like Mohali, Panchkula, Zirakpur, villages across the city and even far-off areas like Derabassi, Kharar and Kurali,” said Kumar.

Source : http://timesofindia.indiatimes.com/NEWS-City-Chandigarh-Real-estate-survey-shows-silver-lining-for-market/articleshow/4770363.cms

19 Indian realty firms showcasing projects in London

London, June 28: Nineteen Indian realty developers are showcasing their housing projects to NRIs here at a two-day ‘India Homes Fair’, which began on Sunday.

The realty firms participating in the event include Ansal Properties and DLF Home Developers. The 19 developers showcasing their projects are from the Indian cities like Bangalore, Chandigarh, Chennai, Hyderabad, Jaipur, Mumbai and New Delhi.

“Almost all major developers from India are participating in the fair attracting good response from the NRI investors,” Renu Sud Karnad, joint Managing Director of India’s leading housing finance firm HDFC, the organiser of the event, said.

The price range of properties being showcased at the fair vary from Rs 21 lakh to a couple of crores, Karnad said.

“Through this event, we are bringing NRI home-seekers and leading developers from major cities across India together under one roof.

“We hope to provide a platform where both of them can interact freely so that the developers are exposed to the NRIs, their needs and preference,” she said.

M Subhashini, Minister, Press and Information in the High Commission of India to the UK, inaugurated the fair.

Source : http://www.zeenews.com/news542821.html

In real estate slump, developers pin hope on service apartments

Chandigarh After being launched in cities like Delhi, Bangalore and Pune, service apartments will soon be a reality in Tier II and III cities.

Considering the growing number of corporate honchos visiting the tri-city, Ludhiana and Amritsar, real estate developers will soon introduce service apartments in these cities.

Another reason that has evoked developers’ interest in service apartments is the slump in the real estate industry.

The negligible sale of apartments in the tri-city has forced them to convert these into service apartments.

Service apartments, which are fully-furnished with all facilities, are an alternative to five-star hotels. Unlike a normal apartment, a service apartment is given only on lease or rent and is a good option for travelling professionals and nuclear families.

Soon, Omaxe will launch a few limited service apartments in Omaxe Royal Residency on Pakhowal Road, Ludhiana. These apartments, with an area of 650 square feet each, will be launched in July.

“Ludhiana has marked its presence in India as a commercial city. It has many industries, which result in a number of corporate heads visiting this city. These apartments will offer them a nice and cheaper accommodation compared to hotels,” Avneet Soni, director of Omaxe Limited, said.

Manoj Kashyap, regional director of JLL Meghraj, added: “As there is no movement in the real estate market for the last many months, developers are trying various options keeping in mind the demand. The firm is working on the modalities and research on behalf of several national developers eager to launch service apartments in the region.”

Developers plan to launch service apartments in other cities in the region too. “The company is in the process of launching these apartments in Chandigarh, Faridabad and a few other cities in the near future,” Soni said.

Real estate experts feel since there is a demand, the concept of service apartments will soon be adopted by other developers.

“Many nuclear families like mine would prefer to stay in a serviced apartment while looking for a house in a new city,” Sanjay Rai, manager in an IT company in Chandigarh Technology Park, said. “They are good for those seeking transit accommodation as they have all facilities. And it feels much like living at home.”

Omaxe has, meanwhile, tied up with a leading hospitality management company in the National Capital Region to maintain these apartments.

Explained Service apartments
* A service apartment is given only on lease or rent
* Like hotel rooms, these apartments are fully-furnished and come with a host of ready facilities and services
* These apartments are maintained by hospitality management companies
* They are a better and cheaper alterative to five-star hotels

Chandigarh to provide houses for urban poor in Sector-63

Chandigarh: Chandigarh Housing Board (CHB) will play the role of facilitator for effective implementation of the Government of India, Ministry of Housing & Urban Poverty Alleviation formulated scheme “Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)”. The Scheme aims to provide cheap home loan with Central Govt. Subsidy to Economically Weaker Sections (EWS)/ Low Income Group (LIG) for acquisition or construction of house to such beneficiaries who do not own a house in his/her name or in the name of his/her spouse or any dependent children. With the assistance of NHB and HUDCO, CHB will pass out the benefits envisaged to the EWS/LIG beneficiaries in forthcoming housing plan under the said scheme in Sector-63, Maloya and Dhanas. The economic parameters for eligible EWS beneficiaries as per the scheme are households having an average monthly income up to Rs. 3300/- and that for LIG beneficiaries are households having an average monthly income between Rs. 3301-7300/-. The subsidy will be 5% p.a. on interest charged on the admissible loan amount for EWS and LIG, over the full period of the loan for construction or for acquisition of a new house. A high level meeting to sensitize all States/ UTs about the various aspects of the scheme and to ensure smooth passage of benefits under the scheme was conducted by Government of India. The meeting was attended by UT Finance-cum- Engineering Secretary, Mr. Sanjay Kumar along with officers of CHB. He said that the GoI Scheme is an effort to create an enabling & supportive environment for expanding credit flow to the Housing Sector and for increasing Home Ownership in the Country under its important policy agenda for providing ‘Affordable Housing for All’. Mr. Kumar apprised that the scheme will provide a housing loan, with subsidized interest, for a period of 15-20 years with a maximum limit of Rs. 1.00 lac to an EWS individual for a house of at least 25 Sq. Mtrs. Additional loan, if needed will be at unsubsidized rate of interest. Furthermore the scheme lays down that for a LIG individual the maximum loan amount admissible will be Rs. 1.60 lac for a house of at least 40 Sq. Mtrs. However, subsidy in rate of interest will be permissible only up to loan amount of Rs. 1.00 lac only. The additional loan will be at unsubsidized rate of interest. Under the scheme, the borrowers may choose fixed or floating rates of interest. In case the borrower chooses a fixed rate loan than Banks/HFCs will be permitted to charge an additional 1% p.a. rate of interest which will be subject to reset after a minimum period of 5 years. The Government has appointed National Housing Bank (NHB) and Housing and Urban Development Corporation Ltd. (HUDCO) as Nodal Agencies for implementation of the scheme. The Subsidy will be released by the Government to Nodal agencies who in turn will pass on the same to the Banks and Housing Finance Companies for disbursement of the housing loan. The scheme further envisages that primary security for the housing loan will be mortgage of the dwelling unit and there will not be any other collateral security/third party guarantee for loans up to and inclusive of Rs. 1.00 lac and no prepayment charges would be levied by the Banks/HFCs under the scheme. Source : http://nvonews.com/2009/05/25/chandigarh-provide-houses-urban-poor-sector-63/

Luxury Homes a Nightmare as Realty Undergoes Worst Phase

When the rich get less rich, lavish lifestyles turn into a bad dream. Wide-ranging influences, from shock at sudden economic strains to the rise of simpler living, have shrunk blue-ribbon realty consumption. Million-dollar realty transactions, which used to be routine in big cities such as Mumbai and Delhi, have all but disappeared. Property brokerage firms point out that the once-tony suburbs of the Capital have been hit the hardest. “Million dollar transactions or deals worth Rs 5 crore are seeing a dip of around 50% in Noida and Gurgaon due to very limited supply,” says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm. But according to property brokers, swish locations such as Vasant Vihar, Shanti Niketan and Anand Niketan are still holding up due to the pent-up demand for independent floors. “Over the last two quarters million dollar transactions in these locations have seen a spurt of around 20%,” adds Jain.

He also points out that cash rich cities such as Chandigarh are seeing only a few such transactions in prime areas like Panchkula and Mohali. “The dynamics of the Chandigarh market are very different. The holding capacity of these areas is quite good. However, owing to the tight supply, only a few transactions are being witnessed in this value,” he mentions. Even Mumbai, which boasts some of the most costly addresses in the country, is not faring any better. Other than a slim demand in areas such as Cuffe Parade, Lower Parel, Bandra and Worli, million-dollar real estate transactions in the City of Dreams are now far and few. “The supply is always limited, with only a few choosing to go for this segment,” says Rajeev Talwar, executive director of DLF.

Agrees Niranjan Hiranandani, MD of Hiranandani Developers, who feels that the mid and lower rung segments are in the limelight now. “There are not too many such big ticket transactions happening in Mumbai as of now,” he reiterates. “It’s a high price zone and the market for that is limited in the current scenario.” And down South, demand for $1m houses is also rather low. Says Anshuman Magazine, CMD, CB Richard Ellis, South Asia: “Jubilee Hills and Banjara Hills in Hyderabad are seeing an overall decline in such transactions. Similar is the case with Chennai in areas such as Boat Club and Poes Garden.” According to Mr Magazine, it’s also the nervous sentiment that is persuading buyers to postpone their purchase. “Since a lot of the demand in Hyderabad comes from senior IT executives, they are holding back due to uncertainty in the job market,” he adds.

Also, in Chennai, for instance, many independent houses that would roughly cost Rs 5 cr and above are owned by people who have inherited either the land or the entire property. In Bangalore, demand for such luxury apartments is also low owing to the erosion of demand from the market. However, according to Cushman & Wakefield, Bangalore is more important than Chennai and Hyderabad in the South for investment or purchase of property tagged at million dollars due to stronger economic fundamentals. The trend in Kolkata too is no different. Brokers say the million transactions in the City of Joy are to the tune of 1-2% in areas like Ballygunge and Alipore with a buyer profile mainly consisting of businessmen. “Kolkata is no Delhi or Mumbai. The fastest selling price bracket in the city is in the range of Rs 25-40 lakh. Areas such as Alipore and Ballygunge are saturated now. Fresh development in these areas is impossible,” says Venugopal Sampath, Eastern India head of allCheckDeals.com, a realty brokerage firm.

So what all can a million dollars do for you? While it will offer an independent residence for you in posh locations in Chennai, Hyderabad and Bangalore, metros such as Mumbai and Delhi will mean living in upper class suburban locations if you don’t prefer build-up floors. As per C&W, while locations like Lower Parel, Mahalaxmi, Prabha Devi and even further north in areas such as Juhu and Bandra have the potential to offer residential units costing roughly $1mn. In NCR many ‘gated community’ projects in the peripheral locations of Gurgaon and Noida are available in this bracket. However in Chennai, residential units with a price tag of $1mn will help you snap up luxury residences such as free hold bungalows and high-end condominiums in sizes varying from 4,500 sq ft to 6,500 sq ft in locations such as R A Puram, East Coast Road and Poes Garden among others. In Bangalore, some new high-end residential projects would be available at this cost in areas such as Richmond Road, Lavalle Road and Sankey Road. These apartments would range from 3,700 sqft-6,000 sq ft, with 3-4 bedroom units. So now you know where to make the most out of your million dollars.

Source : http://feedproxy.google.com/~r/Indian-Realty-News/~3/Ey_JCou5_F4/luxury-homes-a-nightmare-as-realty-undergoes-worst-phase.html

Indian Retail inches up as preferred destination

India has moved up from 44th spot last year to 39th in terms of being the preferred designation ranking, according to global real estate consultant CB Richard Ellis (CBRE), which also adds that the ranking, does not justify the size of the country’s economy.

UK tops the global list while China is numero uno for the Asia Pacific region followed by Japan; India earns the 11th spot, Chairman and MD Anshuman Magazine  of CBRE reportedly said in a statement.

He said even China has moved to the 6th position globally from 10th place last year. Among the Asia Pacific countries too, India is behind the smaller countries like Singapore and Indonesia.

“This ranking is not only because FDI in retail is not allowed but also due to relatively lower purchasing power, cost and availability of real estate, besides infrastructure and supply chain management issues,” Magazine said.

However Magazine cautioned the retail business corporations outside India that adding a market like India could be not ignored too long and it would continue to move up in the ranking and attract more and more international players.

Addition to the organized retail will be a boom in disguise to the wine industry as it will increase the availability and ease the distribution blockages existing at the present moment. It is expected that states like Delhi will soon follow the example set by Maharashtra, Karnataka, Haryana, Punjab and Chandigarh

Source : http://www.indianwineacademy.com/item_4_300.aspx

Depleting NRI Interest Force Developers to Put Projects on Hold

Real estate majors, who had lined up projects in Punjab to woo non-resident Indians, have put on hold their plans indefinitely with most NRIs no longer keen to invest in these properties. These players had planned integrated townships and shopping complexes in towns including Mohali, Jallandhar, Bhatinda, Patiala and Amritsar for the NRI customers. But with dwindling incomes across the globe, NRIs too have tightened their purse strings. Among those who have put their plans on hold include DLF, Emmar MGF, Zoom Developers Private Limited and Omaxe Limited.

Zoom Developers president and chief executive officer Rumneek Bawa said the company was going slow on its investments in Punjab. The company, which announced an investment of Rs 600 cr across Amritsar, Patiala, Jallandhar and Bhatinda for constructing housing complexes, hotels and shopping malls in 2007, has till now invested only 30 crore. “A housing complex with 100 expandable villas on 225 yards each at Patiala was in the pipeline. The villas, which were proposed to be ready in 18 months, may now take longer as the buyers are not as aggressive as were expected to be,” he said.

Similarly, Emmar MGF was to invest Rs 16,000 crore in housing and infrastructure projects in Punjab. It proposed an integrated township project in Mohali on 3,000 acre and also announced that it would launch other integrated township projects in Jalandhar and Ludhiana. Each project was be spread over 400 acre. DLF Limited, on the other hand, had planned to set up two integrated townships each in Mohali and Chandigarh besides commercial projects. A company official said they were going slow on projects where they had not made any commitments. He added that the shopping mall in Jallandhar will be operational on schedule.

Source : http://www.indianrealtynews.com/nri/depleting-nri-interest-force-developers-to-put-projects-on-hold.html

High Rentals Low Sales Force Retailers Out of Chandigarh

With the global meltdown affecting the business of retailers, high rentals for their stores in Chandigarh are forcing the loss-making multi-specialty retail chains to move out of the city. In an exception to the realty slump witnessed throughout the country due to the slowdown, Chandigarh continues to rule the entire region when it comes to commercial rentals. As a result, while many retail outlets have already downed shutters, all plans to open new stores have been shelved. The companies have redrafted their expansion plans by shifting business to suburban and rural areas, hoping to breakeven and earn profits.

“There is limited supply in Chandigarh with almost no option available for sale and purchase in flourishing sectors like Sector 17, Chandigarh. Hardly any owner is ready to sell his unit. A showroom can easily fetch even Rs 40 crore,” said real estate consultant Mangat Rai Baboota. 6Ten, a Kolkata-based national store chain owned by REI Agro Limited that opened with more than a 100 outlets in the tricity a year ago, is left with only 28 at present — 11 in Panchkula and 17 in Chandigarh and Mohali. Though the company has plans to expand its operations in the region, the tricity is not on its map any more. It is now focusing on the suburban and rural areas of Punjab, Haryana and Himachal Pradesh. “Chandigarh is the most expensive city in the entire northern region as far as commercial rentals are concerned. The prevailing rentals are way higher than the actual value of the property. When we compare the profits earned by our stores in Chandigarh with those in Faridabad or even Gurgaon, the figures don’t match up to the exorbitant rentals,” said Rajesh Sharma, the zonal in-charge of Haryana and Himachal Pradesh.

Of the two stores recently shut down in Chandigarh, one was in Sector 46, a location with “low viability and proximity” where the company was paying a rent of Rs 1 lakh per month for a space measuring around 1,000 sq ft, as compared to Rs 80,000 in Panchkula’s Sector 20, which is a location with “higher viability and proximity”. “While the rent in Himachal or other states for around 1,700 sq ft is Rs 20,000 per month, the sales reported are above Rs 30,000 per day. We requested the property owners in Chandigarh to reduce the rentals by 25-40 per cent so that we can restart our operations, but to no avail,” said Rajesh.

Another multi-specialty retail chain, Vishal Mega Mart, which has only one store in Chandigarh, too, is facing loss of business. The Delhi-based company with a total of 180 stores across the country has no plan to expand its operations in the city in the near future. The company is paying Rs 3 lakh per month for the store in Sector 5, which has a total area of 25,000 sq ft with three floors and a basement. “The sales have been affected by the downturn. Especially, corporate buying has reduced,” said store manager Rakesh Singh. The retail space in the malls in the tricity, too, fails to find takers. The only footfall the malls are generating is through multiplexes.

Source : http://www.indianrealtynews.com/retail-market/high-rentals-low-sales-force-retailers-out-of-chandigarh.html

Tier 3 Offers Good Real Estate Opportunities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lemon Tree Dials in for Expansion

The mid-scale hotel chain Lemon Tree plans to add 11 more properties across the country in the next two years, taking the total number of hotels and resorts to 20 with an investment of Rs. 12 billion across 15 cities in India, not including the possibility of handling a 9-hotel project with DIAL for which it has bid recently

“The group would add an inventory of 1,700 rooms in the 11 new hotels to take the total room strength to 2,500 from the existing 800 rooms,” Lemon Tree Hotels Chairman and MD Patu Keswani said.

“The Current economic turmoil and ongoing slowdown of the Indian economy is short term in nature. Reduction in demand for hotel rooms is therefore fundamentally temporary. Demand for rooms will rebound by 2010. At the same time, new supply of hotel rooms will be significantly below that which was envisaged just 6 months earlier due to this deflation in demand and the tight liquidity conditions in the market,” said Keswani in a release.

After the recessionary bells started ringing, the hotels have generally maintained a low profile with realtors postponing or cancelling almost all the new projects.

The company plans to invest Rs. 12 billion in 15 major cities in India, including South Delhi, Gurgaon, East Delhi, Pune, Goa, Alleppey, Indore, Aurangabad, Mumbai, Bengaluru, Hyderabad, Chennai, Jaipur, Chandigarh, Shimla and Ahmedabad

It has opened three new hotels at Ahmedabad, Aurangabad and Indore with a total inventory of 300 rooms since October, 2008. with an investment to the tune of Rs 830 million. It already had two hotels in Gurgaon, one in East Delhi, a resort each in Goa and Kerala and a hotel in Pune.

It will open its first Red Fox brand of economy hotels in Jaipur in October 2009 to be followed up with properties in Delhi in December 2009, and Hyderabad in April 2010.

Lemon Tree was one of the four bidders for the Delhi International Airport (DIAL) project, involving commercial development of 12 plots spread across 45 acres of land , including nine for hotels around the Delhi airport. Big real estate and hotel companies have not participated due to low business sentiment. US-based real estate investment fund Starwood Capital, which has invested in some hotel projects in the country, is the lone financial investor to have participated in the auction.

Source : http://www.indianwineacademy.com/item_7_275.aspx

Lemon Tree plans to invest Rs 1,200 Crore

Lemon Tree Hotels is mulling over an investment plan of Rs1,200 Crore to set up a pan-India chain of hotels. As per the capex plan, the company intends to have 20 hotels aggregating 2,500 rooms by 2011. There will be hotels coming up in 15 major cities in India, including South Delhi, Gurgaon, East Delhi, Pune, Goa, Alleppey, Indore, Aurangabad, Mumbai, Bengaluru, Hyderabad, Chennai, Jaipur, Chandigarh, Shimla and Ahmedabad. The funding for these projects will be a mix of equity and bank debt.

Currently, Lemon Tree Hotels has nine properties across India in the mid-price segment and the other ten properties are under development. The Chennai hotel will open in February 2009 while the two hotels in Bengaluru, one in Electronic City and the other on St Johns Road, will open by end-2009 and by June 2010 respectively. The hotel at Hyderabad will open in 2010.

Source : http://www.hospitalitybizindia.com/detailNews.aspx?aid=3054&sid=1

Unitech Plans to Invest 2,500 Cr in Hotel Industry India

Realty major UNITECH LTD (BSE:507878) plans to invest about Rs 2,500 crore (US$508 million) to develop 35 hotels across India over the next seven years. Unitech managing director Sanjay Chandra said the firm would develop 35 hotels in the next six to seven years and already had land in many cities at prime locations.

The hotels would be located in the national capital region (NCR), Kolkata, Chennai, Goa, Mysore, Bangalore, Hyderabad, Chandigarh, Siliguri and Assam.Of the total planned hotels, about 50 per cent would be located in Kolkata and the NCR, Chandra said.

Source :  http://www.indianrealtynews.com/hotel-industry/unitech-plans-to-invest-2500-cr-in-hotel-industry-india.html

Small Cities Witness 35% Drop in Property Prices

As many realtors deferred their projects due to higher borrowing costs, the demand for real estate in smaller cities and towns has declined by nearly 35 per cent in the first seven months of the current fiscal. The sharp decline in demand for property has been witnessed in Tier II and Tier III cities including Pune, Chandigarh and Bhopal. “Nearly 35 per cent fall in demand of purchase of properties in most of Tier II and Tier III cities has been noticed in the first half of current fiscal due to high cost of borrowings,” industry body Assocham said in a report. The buyers of dwelling units have also not been able to make payments as higher interest rates and also still higher inflation have come in to partly dampen their enthusiasm and eroded their budget, Assocham noted. The report has been prepared on the responses from real estate firms based in tier II and tier III cities such as Meerut, Bulandsahar, Muradabad, Bhiwadi, Dehradun, Rudrapur, Chandigarh, Sonepat, Panipat, Manesar, Pune, Nasik, Bhopal and Indore.

Source :indianrealtynews.com

Malls not well

The mall culture that has swept over metros like Delhi NCR and, in a way, started showing signs of subsiding, is yet to take off in Tier II cities like Chandigarh. Developers and investors are waiting for commercial malls and multiplexes to generate, if not more than, at least the expected response.

Chandigarh was introduced to the concept of multiplexes with the conversion of Dhillon Theatre in Mani Majra into Fun Republic Multiplex more than five years ago. Recently, two multiplexes were opened in the heart of the city. However, they have so far failed to attract much of the brands and consequently the footfall. As many as 16 new malls and multiplexes are coming up in the tri-city in another year’s time. It will be worth taking note of how this swarm of malls will be able to survive with such a huge number competing for a slice of the same pie.

“We celebrated the fifth anniversary of the mall on November 28. In all these five years we have generated very good business as we were the pioneers of introducing the mall concept to the people of Chandigarh. After the lake and Sector 17 shopping plaza, people were exposed to the concept of shopping with entertainment,” said Chaman Sharma, assistant manager at Fun Republic.

No takers yet
Against much of the anticipation among developers at the time of the recent launch of Uppal’s Central Mall in the Industrial Area and DLF City Centre in IT Park Chandigarh, both these multiplex-cum-malls are still looking for takers. The modest footfall which these two malls are able to generate is mainly due to the multiplexes. DLF City Centre is benefiting from its location, being in the IT Park and right opposite to companies like Infosys, Tech Mahindra, Net Solutions, IBM, Daksh and Winshuttle. This makes it easily accessible for some 10,000 young IT professionals working in these companies.

The footfall and the brands occupying space in a mall, which are related to each other, cannot survive just on the multiplex. Where the developers are claiming that most of the space has been sold and leased out both in the existing as well as under construction sites, it is yet to see how this huge inventory of commercial space waiting to be launched in the tri-city would be able to generate demand. At malls where space is usually available with a mix of lease, rent and sale, the rate varies from Rs 16,000 to Rs 25,000 per square foot, depending upon the floor and the location.

Developers hopeful
“The mall, which with a total built up area of 1.10 lakh square feet is fully constructed and operational, has at present a total of 14 brands running in the mall. Around seven will be starting their operations in the next month. We are hopeful that within a few months we would be able to lease out and sell all the available built-up space in the mall,” said B S Arora, Head Sales Uppal’s Centra Mall.

“The existing debacle in the market that has resulted from the subprime crisis in the US, coupled with the economic slowdown the world over, had a cascading effect on the world markets including the real estate sector. However with the US government stepping in in a big way and rest of the world, including India, also taking measures, confidence is returning and the markets are showing signs of stabilising,” says Khair Ull Nissa, general manager (sales and marketing) Paras Build-Call Pvt Ltd.

Similar is the condition of the other mall, DLF City Centre, which has the maximum built-up area lying vacant for companies to take up.

An overdose?
At the same time there are around 17 such malls that are under construction in the areas like Chandigarh, Mohali, Panchkula and Zirakpur. Among these, a few like Shalimar Mall in Panchkula and Paras Downtown Square Mall in Zirakpur are on the verge of completion and inauguration. Where two malls are coming up in Sector 17 itself, one is coming up in the Induatrial Area in Chandigarh.

Though the developers of these upcoming malls sound to be skeptical about the future of commercial real estate in the region, they are at the same time hoping to capture the potential in the region.

Recession-hit
“The current recession in the real estate industry is definitely going to impact future mall developments in the region. The lean phase compounded by the global economic recession has proved detrimental to the real estate sector. But at the same time we are hopeful that a lot of potential exists in the tri-city that would generate demand for the malls,” said Pradeep Rai, brand manager, Paras Build-Call Pvt Ltd, over the phone from Gurgaon.

The company is constructing one of the largest malls in Punjab — Paras Downtown Square on the national highway at Zirakpur — with a build-up area of 3.5 lakh square feet.

“As we all know, quality always has its takers, and we should see robust growth coming back to the real estate business over the horizon of one to two year’s time. As far as our commercial projects are concerned, the basics are right (quality construction, location advantage, reasonable pricing, etc), therefore though the impact of the global meltdown is there, it is not very severe,” she adds. Speaking on the company’s new venture and the logic behind it, Nissa says, “We had anticipated the demand for commercial and retail space a few years back. We have designed this mall keeping in mind the future trends as well as the demands of the buyers. Our aim would not only be to tap maximum footfall but to convert this footfall into regular customers. We are hopeful that the mall concept would soon be very popular in the region.”

What remains to be seen is that at a location where malls have not generated satisfactory response, despite being right in the centre of the city, how Paras’ mall and many others on the outskirts of the city would perform in the coming months.

Further, developers are under the belief that a lot of potential exists in Chandigarh as the residents are exposed to shopping in malls in areas like Gurgaon and Delhi but not in the tri-city. They are waiting for the mall culture to take up in the region too.

Commercial demand
Surprisingly, where these malls are finding it hard to attract brands and prospective buyers, there is a huge demand for commercial space in sectors like Sector 17, which is the hub of commercial and other cultural activities. The place can be seen buzzing with crowds. Through the day, shoppers come to this area from not only Chandigarh, but from other states like Punjab, Haryana and Himachal Pradesh as well. The place is still the first choice for shoppers.

This sector has showrooms that have rentals somewhere ranging between Rs 12 and Rs 16 lakh per month. Where commercial malls are finding difficult to attract brands, one can not only find all the major international brands here, but also more than two showrooms of the same brand in the same market.

According to the local property consultants, the benchmark for rentals in Sector 17 has increased manifold over time. The trend has been that the rentals increased by almost 100 per cent in one year.

Source : http://www.expressestates.in/full_story.php?content_id=93635

Malls under construction, developers pray Delhi-like culture sweeps region too

Chandigarh: Even as two recently-opened multiplexes fell considerably short of footfalls, as many as 16 new malls and such complexes will hit the tricity in a year’s time.

Against much anticipation among the residents and the developers at the time of the launch, Uppal’s Centra Mall in the Industrial Area and DT Mall at IT Park Chandigarh, are still looking for takers. Maximum number of visitors here comprise of cine-goers.

“The recession in the real estate industry is definitely going to impact the future developments of malls in the region. At the same time, we are hopeful that a lot of potential is there in the tricity to generate demand for malls,” said Pradeep Rai, brand manager, Paras Build-Call Pvt Ltd, Gurgaon. The company is constructing one of the largest malls in Punjab with a built-up area of 3.5 lakh square feet — Paras Downtown Square at Zirakpur.

While developers claim most shops have been sold and leased out both in the existing as well as under construction sites, experts are keen to know how this huge inventory of commercial space waiting to be launched in the tricity will generate demand. The malls, where space is usually available with a mix of lease, rent and sale, the rate varies from Rs 16,000 to Rs 25,000 per square feet, depending upon the floor and the location.

At present, 14 brands are located in the mall with a total built-up area of 1.10 lakh square feet. Around seven will start operations next month,” said B S Arora, sales head, Uppal’s Centra Mall.

Sixteen malls are, meanwhile, under construction in cities like Chandigarh, Mohali, Panchkula and Zirakpur. These include the Shalimar Mall in Panchkula and the Paras Downtown Square Mall in Zirakpur, which are on the verge of completion and awaiting inauguration.

Developers, meanwhile, are banking on the “potential in Chandigarh as residents are exposed to shopping in malls in areas like Gurgaon and Delhi”. They have crossed fingers for the tricity, hoping the mall culture will sweep the region too sometime in the near future.

Source : http://www.indianexpress.com/news/Malls-under-construction–developers-pray-Delhi-like-culture-sweeps-region-too/392643/

What will real estate cos do now

Following an appeal by finance minister P Chidambaram to the entire real estate industry to cut prices and make houses more affordable to the
buyers, the developers’ associations — National Real Estate Development Council (Naredco) and Confederation of Developers Associations of India (Credai) — both responded with appeals to their members to come up with whatever cuts that are possible.

So have developers cut prices and what does this mean for the end user buyer who had been priced out of the market during the boom years?

Rohtas Goel, Naredco chairman and CMD of Omaxe, says his company is offering 1-5% discounts to existing clients who have not defaulted on any payments. The discount is applicable for the Noida and Greater Noida projects. This discount would be offered on the balance amount to be paid. The discount would be applicable for about a year or according to market conditions.

Future projects in Noida, Faridabad, Ludhiana, Indore and Chandigarh, which are to be launched in 25 days or so, have discounts of between 5% and 10%. Affordable housing projects, the first of which is to be launched in Indore on January 26, come with a 15% discount.

Explains Prodipto Sen of Alpha G Corp, “We have not cut prices per se. But even before the FM’s appeal, we had launched a special category in our Karnal project where defence officers and public sector undertaking employees had been offered price discounts. This worked very well and we were overwhelmed by the response to our offer. So the price discounting is often market-linked rather than because of a specific appeal. After all, the developer has to factor in the cost of land, debt servicing and construction.

The appeal by the developers’ bodies has evoked mixed response across the board. Explains Pradip Jain of Parsvanath Developers, who is also a part of Credai, “We have not specified who has to cut how much. Some may have already cut prices according to market conditions. We can’t force them to cut prices again.” Jain maintains that he feels it is difficult for developers to drop prices on existing projects. New projects with lower specifications, sizes or facilities can be launched at lower prices.

“In our Greater Noida project, for instance, we had launched premium projects with high-end specifications. To suit the clients’ affordability today, we will launch the next round at lower prices with lower specifications such as tiled or stone floors instead of Italian marble floors.”

Kumar Gera, chairman of Pune-based Gera Properties and chairman of Credai, says it is important to understand what the association had issued in its appeal. “We had talked about five agencies that need to cooperate to bring down prices — the developer, government, material suppliers, service institutions and financial institutions. Simply dropping prices does not trigger sales. The fence-sitting buyer then waits for prices to fall further. The decisions to tinker with prices are largely on a project to project and location to location basis. The only reason for cutting prices is to impact the sentiment in the market and change the mood which will trigger buying.”

Suresh Jain of Vijay Shanti Developers in Chennai says prices had come to realistic levels even earlier because of market corrections about three to four months ago. Properties on the outskirts of the city that had been launched at about Rs 2,600/sq ft and progressively raised to Rs 4,300 per sq ft have come back to the launch price. This is a realistic value. However, if the government too can match this realism with a reduction in stamp duties and service tax that would help trigger sales.

Says Jain, “We are a group that has traditionally focused on the mid-segment buyers. That consumer is still worried. Earlier, getting a loan was not a problem for him. Today, even when loans are expected to be in the range of 85% of the published prices, many banks are only lending about 60% of the value. That leaves a deficit of 40%. If the government agencies can match the developers’ efforts with some financial trigger, it would help boost the markets.”

A West India-based developer who did not want to be quoted said they were reducing rates on a case to case basis. “Where the project had already sold almost 90%, we do not reduce rates but if a project is just being launched we have offer discounts between 2% and 15% according to the merit of the project, the location and various other factors.”

Ultimately, the rate cuts are not altruistic at all. The developer needs to cut rates to trigger sales as much as the government wants them to do so. However, policy measures to boost finance to the sector too may be required before the reluctant consumer is converted into a buyer.

Source : http://economictimes.indiatimes.com/News_by_Industry/What_will_real_estate_cut_prices/articleshow/3774578.cms

Buyers hesitant to take the plunge

A weak sentiment and constant negative commentary have aggravated the problems of affordability and high mortgage rates in real estate, according to Motilal Oswal Financial Services Ltd.

A report by the company, based on an interaction with international property consultants, states that buyers are shying away from new projects and those under construction if delivery times are more than a year away. They feel that prices could drop further in the medium term and they are not sure if the developers would have the ability to stick to schedules. So presales, an important source of funds for developers to meet construction cost, is under threat.

List prices are no longer relevant as developers with projects in the pipeline and those that have been announced offer discounts of 30-50 per cent on listed price. They do not lower prices officially because they do not believe this would attract more buyers but would only aggravate the situation by making people wait for a further cut. A few leading developers such as Orbit Corporation and Oberoi Construction have dropped list prices, according to the report.

Property consultants felt that the outlook for real estate companies has worsened in the last few months along with their financial condition and were hesitant to give estimates of the possible time for recovery. But it is possible that the residential businesses could stabilise by March 2009 with some deals happening then.

The residential real estate prices are likely to realign with the present market situation by then and stimulate demand from end-users.

The property consultants expect demand to start improving first in Mumbai, Bangalore, Hyderabad, Delhi as the pent-up demand is higher in these cities. This will be followed by strong Tier II and Tier III cities such as Ahmedabad. However, any significant improvement in demand is not expected in the next few quarters.

Financial year 2009 is likely to be one of consolidation with industry leaders differentiated from peers. Developers with staying power will utilise this consolidation phase to emerge stronger and position themselves in an advantageous manner to capitalise on the growth phase post-consolidation. Focus should be on companies with high visibility on monetisation of assets over the next 3-5 years; low leverage and robust financials; and strong execution track record.

Tier II/III cities hold potential

Pension funds can exploit the relatively stable realty markets in India to park their funds, according to Jones Lang LaSalle Meghraj.

A report by the international property consultants says that with $20 trillion in assets, pension funds worldwide are the largest category of any investments. These can look at realty investments in India where the market is less volatile and property consistently priced making it an ideal investment option for prudent investors.

India’s Tier II and III cities rank higher than those of China’s, indicating less diversity in transparency within India. This is a reassuring factor for investors seeking to enter India’s secondary and tertiary cities.

The levels of transparency in Tier II cities are only marginally below Tier I cities. In the Asia-Pacific region investors may find greater reassurance in investing in smaller cities in India than in other countries.

According to the international property consultant, of the total domestic and foreign investment of $6 billion announced in India in the first half of 2008, over 63 per cent is in Tier I cities and 33 per cent in Tier II cities and the balance in smaller location. In 2007, Tier I cities accounted for over 95 per cent of the total investments.

In Tier III cities there have been investments in IT parks and SEZs in Nagpur, Kochi and Jaipur; retail in Ahmedabad and Chandigarh; hotels in Goa and Jaipur; and mixed development in Indore and Visakhapatnam. — Our Bureau

Source : http://www.thehindubusinessline.com/iw/2008/11/30/stories/2008113050691700.htm

Fall in demand for purchasing property: Assocham

High cost of borrowing has resulted in nearly 35 per cent fall in demand for purchase of properties in most of Tier II and Tier III cities during the first half of the current fiscal year, according to an assessment by The Associated Chambers of Commerce and Industry of India (Assocham).

Assocham assessment reveals that over 2 crore people in about 25 Tier II and Tier III cities are the claimant for buying of dwelling units who are unable to make purchases as higher borrowing cost have compelled most of real estate developers to defer their projects.

The buyers of dwelling units have also not been able to make payments as higher interest rates  and higher inflation have come on their ways to partly dampen their enthusiasm and eroded their budget.

The assessment has been arrived at the Chamber in its latest exercise about as to what has been happening in purchase of properties in Tier II and Tier III cities in first 7 months of current fiscal in which the properties purchases had registered a growth of over 25 per cent between April-October in the last year.

The analysis of Assocham is based from the feedback received from  well known real estate members like Parsavnath Developers, Omaxe, DLF, Unitech, BPTP among others that are developing real estate projects in number of tier II and tier III cities which include Meerut, Bulandsahahr, Muradabad, Bhiwadi,  Dehradun, Rudarpur, Chandigarh, Sonepat, Panipat, Manesar, Pune, Nasik, Bhopal, Indore and many other such cities and towns in Southern and other parts of the country.

Source : www.business-standard.com

Realty demand drops 35% in small cities

The demand for real estate in smaller cities and towns has plunged nearly 35 per cent in the first seven months of the current fiscal, as many realtors deferred their projects owing to higher borrowing costs.

The sharp decline in demand for property was witnessed in Tier II and Tier III cities including Pune, Chandigarh and Bhopal.

“Nearly 35 per cent fall in demand of purchase of properties in most of Tier II and Tier III cities has been noticed in the first half of current fiscal due to high cost of borrowings,” industry body Assocham said on Wednesday in a report.

These cities had witnessed a 25 per cent surge in property demand in the first seven months of last fiscal year.

According to the report, more than two crore people in such cities are unable to buy property since higher borrowing costs have compelled most of the real estate developers to defer their projects.

The buyers of dwelling units have also not been able to make payments as higher interest rates  and also still higher inflation have come on their ways to partly dampen their enthusiasm and eroded their budget, Assocham noted.

The report has been prepared on the responses from real estate firms based in tier II and tier III cities such as Meerut, Bulandsahar, Muradabad, Bhiwadi, Dehradun, Rudarpur, Chandigarh, Sonepat, Panipat, Manesar, Pune, Nasik, Bhopal and Indore.

“… not only the cost factor has compelled, the promoters of property makers to indefinitely defer their real estate projects but non-availability of inputs such as bricks, cement, steel and availability of quality power and delays in obtaining water connections have caused inordinate delays for developers to stick to their schedules,” the report said.

Source : profit.ndtv.com

Real estate cos offer discounts to prop up sales volume

Amidst the global economic slowdown, builders are charting out plans to start construction of premium 2 and 3 BHK apartments and offer the apartments directly to end-buyers, instead of investors, at affordable 25% price reductions in metroes by 2011.

DB Realty—a Dynamix Balwas Group company—is planning to launch four premium residential projects in Mumbai. Nabil Patel, director, DB Realty said, “ We are soon starting construction of premium residential project, ‘Orchid Suburbia’ with 2 and 3 BHK apartments in Kandivali, Mumbai which is scheduled to be completed by 2011. The apartments will be sold to end-buyers, instead of investors, at Rs 5,500 per sq ft at an affordable 25% price deductions (between Rs 48 and Rs 80 lakh). This is because; we are able to buy land at lower rates.“

Industry experts believe that the levels at which land rates will sink in suburbs, will be higher as compared to that of South Mumbai.

Competitor, Ajmera Group which offers 95% of its apartments to actual buyers and the remaining to investors has recently started construction of 2 and 3 BHK apartments in Borivali, Mumbai, scheduled to be completed in the next two years. According to Dhaval Ajmera, managing director, Ajmera Group, “We will be offering 2 and 3 BHK apartments to actual buyers at competitive prices, despite slowdown in demand.“

Mumbai-based K Raheja Property is planning to enter the East, especially, Kolkata to set up high rise premium 2 and 3 BHK apartments apart from other Tier II and III cities.

Meanwhile, Puravankara Projects is in the process of setting up 2 and 3 BHK premium apartments which will be offered at affordable prices to actual buyers, according to Ravi Ramu, director, Puravankara Projects Ltd. Emaar MGF is currently building housing between Rs 30 lakh and Rs 40 lakh targeted at the mass market in Delhi and Chandigarh. The company sources said, “ We are also planning to build premium homes once the demands for mass housing market are met and land prices drops so that we can offer premium 2 and 3 BHK at affordable prices.“

According to Pankaj Renjhen, MD, Jones Lang LaSalle Meghraj “We expect many developers to reduce prices by next quarter, since their capacity to hold on to their initial rates will have depleted by then. However, buyers are awaiting reductions in both property rates and loan rates, so the RBI will have to make its own contribution on thefront

Source : www.financialexpress.com

Bharat Hotels to spend Rs1,200 crore on expansion

New Delhi: The family of Lalit Suri, a home-grown Indian hotelier who died two years ago, plans to invest Rs1,200 crore in adding 10 hotels to its chain and refurbishing seven properties over three years after a franchisee deal with InterContinental Hotels Group Plc. ends for its Delhi and Srinagar properties in 18 months.
Bharat Hotels Ltd, the family-controlled firm, has re-branded its properties here The Lalit, a name that will be used for the company’s hotels in Mumbai and Goa after the contract with Intercontinental expires, Jyotsna Suri, chairperson and managing director of the firm, said here at a press conference on Wednesday. The Suri-run firm has hotels in Bangalore, Udaipur and Khajuraho, which too have The Lalit branding.
The chain has 10 hotels that are currently under development in Kerala, Kolkata, Jaipur, Chandigarh, Ahmedabad, Amritsar, Noida, Dehradun, Dubai and Thailand that are expected to be operational between 2009 and 2011.
The Delhi property is being renovated and will be ready by March-April next year.
“We are continuing with our development as scheduled and there has been no slowdown whatsoever on the development front,” Suri said, adding the Rs1,200 crore spending will be funded equally through internal accruals and borrowings. An initial public offer is not on the cards in the next two to three years, she added.
Hotels in larger cities, are experiencing lower occupancy as businesses cut back on travel. Suri said Bharat Hotels was open to acquiring properties and was “waiting for the rates to drop further”.
Well-capitalized hotel firms such as Bharat Hotels will move ahead decisively with their expansion plans, one expert said. Such firms “recognise the opportunity and are probably looking at a long term view and building right now so that when the economy turns around, which it will, they will be on their feet,” said Sudeep Jain, executive vice president and hotels country head at the Gurgaon office of real estate consultancy JonesLang LaSalle Inc.

Source : Livemint.com

REALTY BITTEN BY SLOWDOWN BUG

How has the meltdown impacted one of country’s hottest realty destinations, the great Gurgoan? Going by the steep fall in the number of applications from developers in the year 2008, one could say the countdown may well have begun. Against 3,038 applications received for group housing in Gurgaon in the year 2007, the figure is a mere 403 in 2008. Also, against 1,016 applications for commercial projects in 2007, the number this year has plunged to 363, according to figures of the Haryana Country and Town Planning Department.

While it has also to do with area available for high-rise group housing and commercial projects under the new Gurgoan-Manesar master plan nearing their earmarked limits, the spell of hectic construction activity in Gurgaon is likely to continue in the years to come. In fact, the number of licenses granted for group housing, plotted colonies, information technology parks and commercial projects in the Gurgoan-Manesar belt this year itself is a whopping 134 even as some out of a total of 237 licenses issued ever since the realty highpoint of 2005 have still to come on ground.

The slowdown
However, the demand slowdown and liquidity crisis has resulted in developers not being in a hurry to get layout and building plans approved and being content at holding on to their land banks.

“Developers are adopting a wait-and-watch approach. The projects may take off once the liquidity and demand scenario seems favourable,” says S S Dhillon, director, Haryana Town and Country Planning Department. dhillon adds that the real impact of the slowdown will only manifest itself once there is no progress in projects which have been granted licenses.

Also, against the norm earlier, when there were a large number of smaller players in fray, it is now only the bigger ones with some resilience.

Rajeev Talwar, group executive director of DLF, marks this as the worst financial crisis to hit India which is “affecting every sector in the country, not just real estate”.

“This situation is a wake-up call and the government needs to do a lot more than what it has done so far. Mere cuts in SLR and repo rates are not going to lessen the threat of massive closures and huge layoffs.” He proposes two ways of alleviating the current downturn in real estate. “Empower the home loan buyer by lowering interest rates and give real estate level a level playing field. All projects should at least be judged on the basis of merit,” he said.

Faridabad
In the case of Faridabad, Haryana’s next realty hotspot, the boom has finally gone bust. Against 180 applications for group housing in 2007, the figure this year is just 43 while in the case of commercial projects, the number has plunged from 75 in 2007 to nil in 2008. Even in case of plotted colonies, the applications received are a mere 40 against 468 last year. Even the fate of many out of the 62 projects (group housing, plotted colonies, IT parks and commercial projects) granted licenses in Faridabad since 2005, including 13 projects this year, now seems uncertain.

Chandigarh
While land prices in Chandigarh have been recording a new high with every government auction the huge number of private luxury housing projects that have come up in and around the city in the last three years, are finding few takers.

The most hyped luxury project, Pride Asia, a joint venture luxury project of Parsvnath Developers and the Chandigarh Housing Board, is also in trouble with no jump in its sales figure in the last few months and just over 10 per cent of its total dwelling units have been sold so far.

Aimed to cash in on the information technology industry (it is in the IT Habitat area of Chandigarh) and rich Punjabi diaspora, its luxury Rs 6-crore villas and Rs 4-crore penthouses have failed to attract buyers while its one/ two/ three/ four and five-bedroom apartments in the price band of Rs 52 lakh to Rs 3.8 crore are the only ones to be sold off.

Uppal’s high-end Rs 1.6 crore to 1.75 crore luxury flats in Chandigarh have also got a lukewarm response, while big names such as Emaar MGF, TDI, Unitech, Pearls Infrastructure, Ansals and Westend Group which have rolled out high-end projects in Mohali are all been hit by slowdown in demand.

The worst hit, however, are small developers with projects in the periphery areas of Chandigarh such as Zirakpur, Dera Bassi and Kharar. From distress sale of flats to defaults forcing banks to recover property, the crisis has hit both builders and buyers alike in these areas. Many projects are running behind schedule and deadlines for handing over of flats are being extended.

“Many had booked as many as five flats to cash in on the realty boom of 2005-06 but now flats in these areas are available even below their cost to the builder in these areas now,” says the Punjab Builders and Colonizers Association.

“In case of Zirakpur and Kharar and the new sectors of Mohali, there were more investors than end users. Since investors try to wriggle out when real estate markets crash or liquidity crisis worsens, prices of flats crash too. The meltdown has just begun and not only buyers but also many end users may sell off their properties due to high bank interest rates and salary and job cuts,” says Sanjay Arora of Chandigarh-based property portal 123yards.com.

But amid the lows and ups, property prices within Chandigarh have been able to weather the storm. “Chandigarh property prices have not been hit by the recession due to limited availability of land and the good withholding power of its people. They will not sell property till the price is good. Also, those purchasing property here are mostly end users willing to shell out the market price knowing its not going to fall anytime soon, maybe just get higher,” adds Arora.

Source : www.expressestates.in

Pune to become 7th metro city in India : Assocham

New Delhi: Pune will soon acquire the status of being a metropolitan city in India. According to an Assocham report on ‘The 7th emerging metro city in India’ it owes its upgradation to a fast development pace in the area of infrastructural facilities, friendly business environment, education avenues and employment opportunities.

Contributing factors include the high real estate prices and a large population base as compared to other upcoming cities. The study was carried out in four tier II cities including Pune, Ahmedabad, Lucknow and Chandigarh ranking them on eight parameters necessary for a metro city. They included social infrastructure, infrastructure availability, real estate cost and availability, transportation facility (connectivity), presence of quality educational institutes, employment opportunity, facility of financial services and business environment.

Pune occupied first position overall though it needs to improve on transportation, social infrastructure and financial services. Ahmedabad was the second most potential city providing good infrastructure and facilities and connectivity. Lucknow was placed with third rank as it needs to pick up on infrastructure, business environment and social infrastructure.

Chandigarh, the smallest city among the four in terms of area size and population was ranked at the fourth position though it was ranked foremost in financial services and business environment.

Among the four cities, Ahmedabad occupied first rank on the parameter of social infrastructure. The city with literacy rate of 79.89% has high-grade institutes like IIM, NID, NIFT, EDII etc. The city of Nawabs, Lucknow with a literacy rate of 83.5% and presence of quality educational institutes including IIM, SGPGIMS etc was placed at second position. Both Pune and Chandigarh were assigned 3rd positions respectively on the social infrastructure parameter.

Pune has a literacy rate of 80.73% and skilled population, the city is a place of high grade institutes including NIBM, NIC etc. However, 81.9 per cent is the literacy rate in Chandigarh with prominent institutes being Institute of Microbial Technology (IMTECH), Centre for Defence and National Strategic Studies (CDNSS) etc.

The infrastructure parameter rank cities on the basis of sub parameters including number of entertainment avenues, malls and multiplexes along with the presence of star category hotels.

The Queen of Deccan, Pune with maximum number of malls and multiplexes (26) and star category hotels (25) notched the top position. The second rank was occupied by Ahmedabad, with the city having 25 malls & multiplexes and 17 star category hotels.

Chandigarh and Lucknow was placed at 3rd and 4th position respectively. The favourable location and smoothen process of acquiring land along with the high property prices are few sub parameters of real estate cost and availability that attracts corporate sector to expand their business.

Pune has outpaced the other three cities on the parameter of real estate prices and availability. After Pune, Chandigarh is considered to be the next emerging real estate market. Ahmedabad occupied 3rd rank while Lucknow at the bottom position was considered as most time consuming city in terms of process for acquiring land.

On the employment parameter, among the four upcoming tier II cities, Pune carved the maximum share of 32.74% in the total jobs tracked for the period January-June 2008. The prominent sectors attracting large number of aspirants include IT, manufacturing, engineering and academics among others.

The four cities are ranked on the parameter of financial services, taking into account the sub parameters including number of offices of scheduled commercial banks (as on march 2007), density of offices of scheduled commercial banks per population, number of accounts of the scheduled commercial banks per population, presence of brokerage firms, presence of stock exchange, transparency in trading system.

In terms of providing financial services facility to the natives of the city in respect of above parameters, Lucknow occupied first position. The second rank was grabbed by Chandigarh. However, both Pune and Ahmedabad occupied third rank.

Source: http://www.livemint.com

Real Estate Developers Suffer Reality Bite

With Diwali having come and gone and no increase in sales in the real estate sector, it now seems certain that developers will be forced to reduce prices at least in the residential segment. The biggest reason for concern for all real estate players is that a number of private equity deals did not materialise.

This is coupled with isolated or barely any property changing hands this festive season. In fact, many desperate developers had offered major freebies — ranging from consumer durables to luxury cars — but it seems nothing worked. And now developers who had taken huge loans from banks would be forced to reduce the prices so that the end users come back to the market.

In fact, in various markets, despite a slowdown in demand, essentially from the end users and speculative investors, developers will be looking at reducing rates further by 10-15%. Some have already started offering the lower rates.

“All the developers have tried to use the freebies route but nothing has paid off. In many residential projects not a single apartments has been sold. We may have to offer a 10-15 % discount soon to bring the end users back to the market,” feels CMD of a leading real estate company on the condition of anonymity.

Sales in secondary markets have also taken a beating with very few transactions taking place at relatively lower price points than market expectations. Says Anuj Puri, chairman & country head of Jones Lang LaSalle Meghraj: “It was unreasonable for the promoters to hope that the Diwali season would somehow pull the real estate market out of the doldrums. The situation is a result of deeper economic issues. Currently, the equity markets in India are in a rather low phase and credit is extremely tight, resulting in the Indian real estate sector taking an unprecedented body-blow. We expect domestic demand to sink by another couple of degrees and international interest to remain at cautious levels before the situation gets better.”

Industry sources, in fact, say that across all metros and tier II cities such as Mohali, Pune, Kundli (Sonipat), Chandigarh, Jaipur, Lucknow, Indore, Surat, Ahmedabad and Cochin there has been an estimated 80-90% drop in the number of deals. The situation is so bad that there are no buyers for any kind of residential real estate in these markets.

Many feel that it will take at least couple of years before the realty market witnesses a turnaround. Says Sanjay Verma, executive MD, South Asia, Cushman & Wakefield: ”Once real estate prices sink to more realistic levels, the watch-and-wait stance currently evident on both the domestic and international investor fronts will give way to cautious forays and eventually to steadily increasing market recovery. The turnaround phase should come in another 18 months to two years.”

Source : Indianrealtynews

Chandigarh is fourth emerging metro: study

ASSOCHAM study says city fares well in real estate prices, business environment but lags behind in other parameters necessary for a metro city

Chandigarh comes a close second in real estate prices, financial services and business environment, but lags behind in other five parameters necessary for a metro city, says the ASSOCHAM Eco Pulse Study. The study ranks four tier-II cities — Pune, Ahmedabad, Lucknow and Chandigarh — as the most likely contenders for a metro status after Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad.

They were assessed on eight parameters necessary for a metro city, such as social infrastructure, infrastructure availability, real estate cost and availability, transportation facility (connectivity), presence of quality educational institutes, employment opportunity, facility of financial services and business environment.
According to the analysis, Pune occupies the first position, though it needs to improve on transportation, social infrastructure and financial services. Ahmedabad is the second city with most potential to be a metro, as it provides good infrastructure facilities and connectivity. The study puts Lucknow in the third place as it needs to pick up on infrastructure, business environment and social infrastructure.
Chandigarh, the smallest of the four in terms of area and population, ranks fourth though it fares well in real estate prices, financial services and business environment. At 9.21 per cent, it is the least employment-generating city among the four emerging metros.

Real estate cost and availability

Chandigarh is considered to be the next emerging real estate market after Pune. With the maximum population among the upcoming cities, the Maharashtra town has outpaced the other three cities on this parameter.

Social infrastructure

Chandigarh ranks third on social infrastructure with 81.9 per cent literacy rate and due to the presence of prominent institutes like Institute of Microbial Technology (IMTECH), Centre for Defence and National Strategic Studies (CDNSS). Ahmedabad occupies the first rank with a literacy rate of 79.89 per cent and high-grade institutes Indian Institute of Management (IIM), National Institute of Design (NID), National Institute of Fashion Technology (NIFT) and Entrepreneurship Development Institute of India (EDII).

Employment

At 9.21 per cent, Chandigarh is the least employment-generating city. The sectors offering maximum employment are IT, banking, insurance and retail, while Pune has the maximum share of 32.74 per cent in the total jobs tracked by ASSOCHAM Placement Parameter for the period January-June 2008.

Presence of quality educational institutes

Chandigarh occupies third position as the city has a university and eight Government colleges, 13 prominent higher learning institutes and one Government recognised resource and development centre while Pune and Luchnow rank first and second.

Infrastructure

Pune notches the top position when it comes to sub-parameters like entertainment avenues, malls and multiplexes and star hotels. Chandigarh is placed third in this category.

Source : Indianexpress

Developers started to offer discounts on homes in range of 10% and above

With the worldwide financial crisis playing havoc in the US and European markets, India too is keeping its fingers crossed. Tremors are being felt everywhere – from the stock markets to the rupee exchange rate, and from the spiralling inflation to homeloan interest rates. People don’t seem to have any idea, especially on the eve of a most important festive season. This festive season, owing to the market meltdown, property developers are offering a lot to by way of special discount bonanzas, which include free covered parking space or exemptions from preferential location charges even free cars.

Looking at the market mood, developers have resorted to more innovative ways. For example, discounts are given on the rate per sq ft of the property, reducing its cost. Main discount offers have come up for corporate employees where the developer has their tie-ups. Recent example for the same is SVP group who has started to offer Rs 40 per sqft discount or 10% discount in booking amounts.

The other offerings by the SVP group are 50GM gold coins, Holiday EMIs, No EMI till possession etc.

Payment of stamp duty and registration fee: Depending on the state in which the property is being registered, stamp duty and registration fee account for 4-10 % of its cost. A sop has been built around these expenses as well. Some developers bear the registration cost either partly or fully. Some developers subsidize a certain per cent of their customer’s electricity bills for some years.

Though the property boom is cooling off in select pockets and builders are offering all kinds of freebies to hook customers, the prospective buyers must be careful about these baits. Freebie discounts can amount to a net worth of 5-10 % in Tier-I cities like Mumbai and Delhi. These tacts are being used as a marketing tool mostly by developers in Delhi, Mumbai and Chandigarh. The trend is likely to continue till the interest rates come down to a moderate level and capital values cool off. But, do we feel that these discounts will actually benefit to us in terms of money paid for homes.

The biggest challenge today is the interest rate on home loans. It has gone up from 7.5% to more than 12% and this has obviously shocked the homebuyers whose budgets have gone haywire. As a result, the buyers are going in for smaller tenements or waiting for interest rates to fall.

In current scenario many developers and industry experts feel that this might be the best time to invest in the real estate but do we feel that it will so? Before one year, we all know that real estate was booming and the rates are on their peak but in present these are going marginally down. In point the recent changes many investors are waiting for correction in market. Till the time we can say that the recent crunch has given a good opportunity to exisiting buyers in terms of cash discounts, freebies, free cars, free car parking, No PLC, No EMI till possession etc.

Americanchronicle.com

Choice Hotels to invest Rs 1,500 crore in new properties

Choice Hotels is planning to invest Rs 1,500 crore over the next two years to double the number of its hotels from the present 25 to 50 across India. The company has already started construction of 21 more hotels and has tied up with Amrapali Group for three hotels, Mittal Group for two, Asterix Group for two and Sabri Group for developing four hotels. The new properties are to come up in New Delhi, Amritsar, Hyderabad, Pune, Chandigarh, Manesar, Gurgaon, Goa, Bangalore, Chennai, Ludhiana, Noida and Bathinda.

The Group, which has around 5,500 hotels around the world under ten brands, has 25 in India under the brands ‘Sleep In’ (accommodation based three-star), ‘Comfort’ (restaurant-cum-accommodation three-star), ‘Quality’ (full service four-star) and ‘Clarion’ (entry level five-star). Currently, it has an inventory of 2,000 rooms and plans to add 1,800 more in the new hotels.

Source : Travelbizmonitor.com

BUY NOW AND GET A PARKING LOT FREE

Traditionally, Indians prefer to buy or move in to a new place either on an auspicious day or during a festive season. Developers across the country are aware of this cultural pattern of ‘date the deal’ and so, they try to woo home seekers during various festivities with lucrative offers including discounts, freebie, value additions, waivers, gifts etc. However, due to a slow down in the real estate market since January 2008 and buyers adapting to “wait and watch” approach, the developers are now worried and are crossing their fingers with optimism to see the same magic of festive-time business even this year. For the first time, festivities discount this year has touched a high of 15 per cent —officially.

The timing
Usually buyers in north India including Delhi, Chandigarh etc strike a deal during either Baisakhi or Dussehara and Diwali, while people in the western parts of India including metropolitan cities like Mumbai, Pune, Ahmedabad, Baroda, Nasik etc would target the period from Gudi Padwa (new year of Maharashtrians) to Akshaya Trutiya (another auspicious day and the beginning of a new year for Gujaratis). South Indian cities like Bengaluru, Chennai, Hyderabad, Kochi etc would either prefer Onam or Vijaya Dashami (Dussehara) for a new beginning at a new place. Towards the east, mainly in Kolkata,people celebrate their Gruha Pravesh mainly during Durga Pooja and Diwali.

Every year most incentives are offered to attract the customers during Navaratri-Dussehara and Diwali as that is the most auspicious and widely celebrated festival across the country. In fact, most developers also inaugurate their new projects or even time the possession during this period. However, this year is a testing time for the industry.

In the tier II and III cities the situation seems to be challenging for most developers this year. Mathura based Shri Group, MD, Sudeep Aggarwal, says, “The rates in these cities are lower than the metros. And there is no room for further discounts. Small developers usually offer discounts when the buyer is paying the down payment or the developer has launched a new project. Such projects have inaugural offer. In such cases, the percentage of discount is in the range of five per cent to 7.5 per cent.”

The current hitch
Apart from certain builders pretending `all is well’, most of them have agreed that the real estate market is experiencing a slow-down. Despite high demand, transactions are not happening. Liquidity crunch has engulfed the sector and cash starved developers are trying to come out of the situation at the earliest without losing their good will. Instead of launching new projects, most are focusing on completing the unfinished ones. In order to raise fast money to meet their commitments to banks, financiers, investors and buyers, they are looking at aggressive sales. But most home buyers are waiting for the property prices to fall. They are expecting corrections.

It is a catch-22 situation. Many are not officially reducing the per sq ft price as they may not be able afford it. But even those who can afford it may still not do it as it will send a wrong signal for his reputation and for the state of property market. The stigma attached to the property price reduction in the Indian market coupled with an on going slow-down may result into stagnancy. Considering that the sentiment may worsen further, choking the cash flow, he may opt for discounts to push sales in the current sluggish market. Most developers are now offering the reduced price under the disguise of incentives. Those shying away from accepting the correction are labeling it as ‘Festival-discount’. Those who are not yet open to this idea are giving away the discounts to the customers on the negotiating table.

However, most discounts have strings attached. Firstly, all incentives are not offered together. Secondly, many of them have a time limit. Another condition is that the offers are not for all the projects but for a few selected ones. It is usually for those projects which are either slow moving or at the very primary level when developer would need funds to carry on further. Many a time the direct reduction in price is applicable only for those who are going for a full down payment. Sometimes there are other limitations and discretionary conditions as well.

On the home loan front
Despite being an inevitable part of most property purchased, lending statistics have declined as banks are also hit by the slow down. High rate of interest has added to low turn out at the home loan counters. Now, a few banks have also joined the incentive band wagon. Many nationalised banks are charging 1 per cent less interest during the period of festivities and for selected projects only. Many are waiving off the 1 per cent processing fees as well. Some banks such as State Bank of India (SBI) have tied up with some developers to offer ‘Interest Subvention’. This means the buyer will be paying 2 to 2.5 per cent less interest on the loan taken during the first two or three years during which the construction is going on. SBI has already announced interest rate of 11 per cent and further declared 0.25 per cent reduction for selected projects for stipulated period of festivals.

On offer
In the Delhi-NCR region, many developers have started to consider offering such discounts. Although Delhi based developers starting to gather under the banner of property shows like the ones organised by Services (India) Pvt Ltd, many are yet to start the ‘festive discount’ scheme. Apart from real estate major DLF, nearly 25 small and big developers are presenting their projects and offering discounts at the show. The show will last till October 12.

Even Omaxe is organising a Home Loan Mela at Omaxe Palm Green, Sector MU, Greater Noida. The show will last till October 12. Rohtas Goel, managing director, Omaxe says, “We are inviting dealers, direct customers and prospective buyers to the event. Many bankers would be present for on-the-spot approval of loans to the eligible customers.” He further added, “Looking at the overwhelming demand for all our projects, we are also giving gifts to our customers for their association with us. Looking at the present scenario where demand has shifted from investors to end-users, who look for freebie and discounts while making purchase decisions, we have also announced schemes for this festive season to perk up sales.”

Developers like Pasrvnath, Emaar MGF have not yet decided whether they will offer any discounts. An industry expert says, “Discounts are usually offered in projects which are not selling. But this is not an indicator of a negative response for the project. Developers usually bring down rates in their overpriced projects to an affordable level.”

ING Vysya Bank, one of India’s leading private sector banks is also organising a two day, Property Mart on October 11-12 at Pragati Maidan in Delhi. The Property Mart will showcase the new and upcoming projects around the Capital. The properties on sale would range from Rs 25 lakh to Rs 2.5 crore.

However, in Mumbai and around, many developers have declared various incentives. Sunil Mantri Realty Ltd is offering ‘No Stamp Duty’ for its project Mantri Park at Goregaon (east), Ravi Group is offering assured tax free benefits worth up to Rs 15 lakh if one books a flat in any of its Mira Road projects. Lok Group is planning a rebate for their up coming project while the Runwal group is planning to offer customisation of the flat as per the buyer’s taste.

The second home buyers in Mumbai are not lagging. The benefits include price reduction by Rs 400 per sq.ft, free accessories worth Rs 2.5 lakh, free club membership and surprise gifts on spot booking.

The other side
It is interesting that many big players such as Evershine, Raheja, Hiranandani, Sheth Shah etc developers are missing on the incentive-caravan. According to Niranjan Hiranandani, MD, Hiranandani Constructions, “Offers don’t get you more bookings or help you overcome a sluggish market as buyers don’t change their decision due to discounts. In fact, in Mumbai and Pune, a good project will need no special offer to push the sell. Any decent project will sell anyway.”

However, there are developers who wish to sell off their product but are not in the list just because they can not afford to give any discount as they have purchased the property at a very high price during the boom.

The flip side
There are chances that the developer giving the discount is not disclosing the earlier rate and so, the buyer may pay the prevailing market rate or even more after the so called discount. Many a time hidden costs are not revealed up front and buyer may have to pay more than what he thinks he has saved on the discount. There are so many conditions applied that at some point of time one may feel the offer is not fair deal. The main limitation of these offers is that they are only for specific projects and for too a small period. One may feel pushed to take a call in a very short span of time regarding life long issue.

The last mile
Despite limitations and flip side, slump in the real estate market is always a good time to buy a house if one is ready with criteria and fund arrangement. The buyer must study the track record of the developer before falling for the discounts. Make judicious decision and bargain well. The good product with discount, will sell fast. In the current situation, one should try to buy a ready possession flat with discount instead of under construction as one can not be sure of future.

According to Pranay Vakil, chairman, Knight Frank, India, about 70 per cent of deals are struck during the period of October to March. In 2007, the real estate market witnessed around 100 per cent rise in the sales and enquires as compared to the previous year. The developers are expecting at least 20 to 30 per cent rise in the sales and enquires this year but according to Vakil, the rise this year would be marginal despite discounts.

Source : Expressestates.in

Hansa group to set up industrial park in Punjab

Chandigarh-based Hansa Group of Industries has diversified into real estate development and is setting up an industrial park in Derabassi (Punjab) near Chandigarh. The proposed park will be spread over 80 acres and attract an investment of Rs 132 crore. The group has been granted approval for change in land use by the Punjab government for setting up the park.

Group Director Atul Gupta said, “The industrial park is ideally located on the Derabassi-Barwala Road, which is a state highway. The proposed industrial park will be the first ever in Derabassi and the second one in Mohali district. We will develop this park in accordance with international standards over 80 acres at an estimated Rs 132 crore. It will have basic amenities like wide road links, water supply, a sewerage treatment plant, and street lights.”

“As many as 500 freehold industrial plots will be available for entrepreneurs. The plots are in sizes of 166 square yards, 250 square yards, 500 square yards and 1,000 square yards. In the first phase, the company will offer 400 plots to the entrepreneurs at the pre-launch price of Rs 7,000 per square yard. Entrepreneurs would prefer to set up their base at the park as they could purchase land at one-tenth the prices prevailing in Chandigarh and one-fourth the rates prevailing in Mohali, he added. Also, the group has presented a 500 square yard plot to the Derabassi Industrial Association for the construction of a three-storeyed exhibition-cum-convention centre at the park. Commenting upon the benefits, he added, “The entrepreneurs won’t have to pay registration fee for purchasing land. They will also be exempted from 50 per cent duty upon availing electricity connections for five years.”

Sourece : Indianrealtynews

Metro: Whose line is it anyway?

New Delhi, October 3: After Delhi, Mumbai and Hyderabad, six more cities—Chennai, Kochi, Bangalore, Ahmedabad, Chandigarh and Pune—are expected to launch metro rail systems in the near future. But the stir created by Delhi Metro Rail Corporation (DMRC) chief Ellatuvalapil Sreedharan’s missive to the Centre over perceived risks stemming from the Hyderabad project being awarded to a private developer could throw a spanner in the works.

With an estimated $13.5 billion required to construct the five metro rail systems in Delhi, Bangalore, Kolkata, Hyderabad and Mumbai, the question of how these projects should be financed has become a bone of contention between the urban development ministry (the nodal department for metro projects) and the Planning Commission (which advises the Government on infrastructure projects).

The differences centre on whether or not private players roped in for metro projects should be allowed to develop real estate along metro lines to help pay for the overall project and keep passenger costs low. Though all concerned, including the finance ministry, agree that the ultimate decision lies in the hands of the respective state governments, the urban development ministry seems to favour a Centre-state partnership as that would ensure better service quality. It also feels that lack of resources should not be the only consideration.

While Delhi, Bangalore and Kolkata are being taken up on a joint-ownership pattern with the Centre and concerned state as project promoters, the metro projects in Mumbai and Hyderabad have been taken up on a PPP basis. Chennai is also hoping to go the DMRC way. But the Planning Commission is pushing to award the project to a private bidder and is making a similar case for Kochi.

Chandigarh developers to sell land to cope with slowdown

As the real estate sector in Chandigarh is witnessing a slowdown, realtors are even planning to sell their land, which they had bought out of the profits they earned from the earlier projects, to fund their ongoing projects. The multiple interest rates coupled with inflation have slowed down the residential sales around the city, worsening things for realtors who are grappling with financial crisis. The realtors of the area are bearing the brunt of the liquidity crisis and are not able to fund their existing projects.

“Last few months have not been good for the market. The liquidity cannot be generated through the stock markets and even the banks have got strict over loans. In order to generate liquidity many developers around Chandigarh are ready to sign off their land holdings to generate liquidity for their ongoing projects,” General Manager of Berkley Realtech Kamal Jindal said. Explaining the cycle, Jindal said that when the real estate market was in a boom most developers with the huge profit margins created land banks around Chandigarh. But as the real estate entered into the correction phase, liquidity became an issue for the developers who are ready to sign off their land holdings in order to clear the debts and fund their existing projects.

DLF to Invest Rs.1000 Crores in Multiplex Business

Real estate giant DLF is likely to invest about Rs 1,250 crore on expanding its multiplex business, DT Cinema, by adding about 500 screens in the next four to five years.

Currently, DLF is at a pre-operative stage with about seven screens. In another four to five years time, the target is to have 500 screens across India. By September this year, two DT Cinema complexes in Delhi and one in Chandigarh would be operational and 35 screens are expected to be functional in the next seven months.

Once these initial projects start, the mid-term aim is to have about 150 screens operational within two years. Apart from north Indian cities, DT Cinema plans to set up multiplexes in Hyderabad, Chennai, Kochi, Bangalore, Mumbai, Pune, Ahmedabad, Goa and Kolkata.

The size of each multiplex could be between 35,000 sq ft to 90,000 sq ft. DLF believes that the multiplex business offered a big opportunity as there is a shortage of nearly 40,000 screens in India.

Tier II Cities Like Chandigarh -The Next Preferred Destination For Realtors

Realtors have now shifted their focus to tier II cities, considering the saturation in metros and major tier I cities. Chandigarh has been overwhelmed by the response it has got from the realtors, who are keen to start construction activities. The city is going through major commercial development. Currently, there are three operational malls in the city, Fun Republic, Uppal’s Centra Mall and DLF City Centre. Other malls that are likely to be operational within the next few years are TDI Mall and City Emporio Mall. Also, the Paras Downtown Square mall-cum-multiplex at Zirakpur is expected to be operational this year.

IHC to spend $1 bn on buying Hotels

Indian Hospitality Corporation (IHC), a joint venture of Gordon House Hotels, Mars Restaurant and SkyGourmet Catering formed last year, plans to spend as much as $1 billion to acquire hotel groups and restaurant chains.

The company has hired Ravi Deol as chairman and chief executive of Mars Restaurants, the hotel and food services division of IHC, to initate acquisitions. Deol is the former managing director of Barista and ex-chief executive of FieldFresh Foods.

“We are looking to add 2,000 hotel rooms across 17 cities, including metros and towns such as Lucknow, Amrtisar, Raipur, Chandigarh among others. We may acquire hotel groups having 5-7 properties. We are also looking at acquiring restaurants or restaurant chains and then take them to the leadership position,” Deol told Business Standard.

All these acquisitions will be done by Mars Restaurant. “We may go for a rebranding of an existing hotel chain as and when we acquire them,” Deol said.

IHC has formed a $200-million ‘hospitality opportunity fund’ and $220 million worth of warrants to be converted into equity. The balance amount will be raised by selling equity or through borrowings, IHC executives said.

Mars Restaurants has brands Such as Tendulkars’ (a 50:50 joint venture with cricketer Sachin Tendulkar), China Joe, The Pizzeria, Dosa Diner among others, while Gordon House is a venture of Mars Restaurants and currently has three properties in Mumbai and Pune. The acquisitions will add to the portfolio of Gordon House hotels.

The Indian leisure and hospitality industry is set for high growth, according to the World Travel and Tourism Council. According to industry estimates, the Indian hotel and hospitality industry generates foreign exchange earnings of Rs 35,000 crore each year in addition to Rs 10,000-12,000 crore generated from Indian customers.

The market size of branded fast-food and dine-in restaurants is estimated at over Rs 600 crore. This segment is grwoing in double digits annually attracting players like IHC, industry experts said.

According to sources, popular north Indian restaurant chain Nirulas along with Clarks hotel chain may be on the radar of IHC for acquisition and subsequent re-branding.

On the air-catering front, IHC is looking to expand SkyGourmet to 11 cities from six metros at present. SkyGourment will soon set up its air catering facilities in Kochi, Jaipur and Amritsar among other cities.

“We will also expand our air catering services globally when Kingfisher goes international. We are already catering for Jet Airways, Kingfisher Airlines, Air India Express, Indian Airlines, Malaysian Airlines and Air France. We are looking at providing catering to Emirates and Lufthansa too,” Deol said. SkyGourmet was incorporated in 2002 and is headquartered in Mumbai and employs about 1,150 people.