Godrej Properties may offer affordable housing at sub-Rs 15 lakh price points

Godrej Properties, the realty arm of Godrej Industries Limited is extremely bullish on the affordable housing market in India. The
company is mulling on the possibility of introducing housing facilities for the masses at price points below Rs 15 lakh per unit.

Godrej Properties executive director Pirojsha Godrej told ET, “We would like to take a push at prices below Rs 15 lakh. The demand in the sub-Rs 15-lakh (housing category) is unlimited. The opportunity there is very big.”

While Mr Godrej has been studying the low-cost or affordable housing segment in India, his company recently launched apartments in Kolkata starting at just below Rs 20 lakh and is now among several players including Tata Housing and Unitech that are concentrating on the rising demand for affordable housing.

The company has several residential projects in the offing with its latest coming up in Ahemdabad on 250 acres, which will also have sections catering to the affordable housing demand. The integrated township will have residential, commercial and retail spaces in approximately 14 million sq ft. Godrej properties has developed 23 projects, 60% of which are in the residential space; currently, 82 million sq feet of mixed use space is under development.

Making realty the fastest growing business for the Godrej Group, the company is concentrating equally on offering commercial space for the corporate.

Godrej Properties launched its first project in north India.

Godrej Eternia, a commercial space complex will come up on 4.04 acres in the industrial area of Chandigarh, equidistant from neighbouring cities of Panchkula (Haryana) and Mohali (Punjab). The company will invest Rs 200 crore for developing 6.8 lakh sq ft that will be rented out to large and small corporate houses based out of Chandigarh, large companies having offices spread across the city and industrial clusters like Ludhiana and Jalandhar that may have representative offices in Chandigarh. Godrej Properties has entered into a memorandum of understanding with Larsen and Toubro for developing of this project apart from its other future projects.

The company is scouting for more locations to expand its real estate business in the northern region including Mohali and Delhi NCR. Godrej

Properties has previously signed a MoU with group company Godrej and Boyce Manufacturing Co for using its available land bank of 75 acres in Mohali.
“We are evaluating our options to determine whether the Mohali site will house a commercial, residential or a mixed use project,” says GPL managing director Milind Korde. The MoU between the two parties is expected to become an agreement post GPL’s initial public offer which is estimated to hit the capital markets before the end of this calendar year. The Rs 600-crore that the IPO looks to mop up will be infused back in realty projects and partly to pay off incurred debt.

Source:http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Godrej-Properties-may-offer-affordable-housing-at-sub-Rs-15-lakh-price-points/articleshow/5240388.cms?curpg=2

Godrej Properties Ltd launches its first residential project in Kolkata

Godrej Properties Ltd launches its first residential project in Kolkata

Chennai, November 5,2009: Godrej Properties RELATED ARTICLES Let’s not think stimulus will be withdrawn at once: Govt
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Ltd. (GPL) has launched its first residential project in Kolkata. Named Godrej Prakriti, this project combines modern apartments with beautiful landscaping and ample open spaces.

Located in Sodepur on Barrackpore Trunk Road, the project has excellent rail and road connectivity and benefits from the fully developed infrastructural facilities around it such as schools, hospitals and educational institutions. The company has tied up with Larsen & Toubro for the construction of the project.

This complex is set in over 24 acres of greenery and has natural water bodies which the company plans to preserve.

Customers will have the options to choose from a range of 2, 2 plus study, 3 BHK and Duplex apartments with areas ranging from 900 – 1800sq.ft. Facilities such as Community Centre, Club House, Swimming Pool, Library, Gym etc. are also planned within the complex.

This is the third project by Godrej Properties in Kolkata. The company is already developing two IT Parks, Godrej Waterside and Godrej Genesis, in Sector V, Salt Lake.

Announcing the launch, Mr. Milind Korde, Managing Director, Godrej Properties Ltd., said “We are excited about launching our first residential project in Kolkata. Our endeavor is to offer homes and not just living spaces. We intend maintaining a healthy balance of natural elements within the complex so as to make Godrej Prakriti an address to be proud of.”

About Godrej Properties Ltd.:

Godrej Properties Limited was established as a Real Estate Development company within the Godrej Group of businesses. The company is developing Residential, Commercial and IT projects across cities like Mumbai, Pune, Bangalore, Kolkata and Hyderabad. Apart from consolidating in the existing cities, the company has entered into/ is entering into MoUs for expansion into other locations.

“Godrej Properties Limited is proposing, subject to market conditions and other considerations, a public issue of its equity shares and has filed a Draft Red Herring Prospectus with SEBI. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and the respective websites of the BRLMs at www.icicisecurities.com and www.kotak.com.

Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled “Risk Factors” of the aforementioned Draft Red Herring

http://www.mydigitalfc.com/corporate-releases/godrej-properties-ltd-launches-its-first-residential-project-kolkata-698

Home prices up in 15 cities, shows Residex

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

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

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

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

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

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

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

Hotel with a helipad beats New Town blues

An artist’s impression of the Shristi-Westin hotel

Rajarhat the hospitality hub scored a rare victory on Tuesday with the announcement of a Rs 800 crore five-star property, crowned with a helipad.

Shristi Hotel, an arm of Shristi Infrastructure Development Corporation Ltd, has joined hands with global hospitality major Westin Hotels & Resorts, for the 323-key address which hopes to welcome guests by end-2011.

The twin towers of the G+35 hotel, a “bionic structure”, will boast a rooftop helipad, “a first by an Indian hotel”, and a high-tech fire-fighting system with Israeli collaboration, geared to evacuate 150 people in eight minutes.

This is the second hotel project with an overseas partner announced in Rajarhat in recent weeks, with Ambuja Realty confirming the Swissôtel Group as its hospitality partner for the five-star mall hotel atop City Centre 2.

The Shristi-Westin alliance on the eight-acre sland parcel would be the first standalone deluxe five-star hotel in a Rajarhat rocked by lack of infrastructure and land-grab allegations.

Calcutta, languishing at a five-star room count of just over a thousand — about a ninth of Delhi’s — was promised an injection of at least 2,000 new star keys over a five-year timeframe. Going by today’s status, not even 20 per cent of that room rack will be ready by 2010.

DLF, which had pledged to bring three star hotels to Calcutta with a combined investment of Rs 1,000 crore, is yet to break ground.

Bengal Unitech Universal, committed to adding three properties in Rajarhat offering 500-plus keys among them, has only completed the foundation for the Marriott Courtyard in its IT park, with little signs of moving a step further.

Emaar-MGF, which made real estate history in Calcutta by quoting a record Rs 213 crore for a 6.24-acre plot on the Bypass, is also going slow on its double-header there — a JW Marriott and a Holiday Inn — with 250 keys each.

So why is the Shristi-Westin hotel taking the plunge? “The feasibility analysis by Deloitte has thrown up very encouraging potential for hotel rooms here,” said Sujit Kanoria, the managing director of Shristi Infrastructure Development.

Designed by the Spanish firm of Cervera & Pioz, which created the New York Stock Exchange and the Acropolis Museum in Greece, the star address is banking on “building with the bear and running with the bull”, says an industry veteran.

“Thanks to the small inventory size in Calcutta, there’s always room for more, despite the low energy. When the Shristi-Westin hotel will become operational, the overall economy would have turned the corner and the rest of the hotel projects would not be ready,” he added.

The hotel will have a wrap-around shopping and entertainment arcade with “an eclectic mix of live entertainment, fun and fine-dining outlets, speciality retail and state-of-the-art cinemas”.

Source:http://www.telegraphindia.com/1091028/jsp/calcutta/story_11664634.jsp

Indian Residential property prices rise 15%

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

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

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

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

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

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

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

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

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

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

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

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

Office rentals stabilise: CBRE Report

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

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

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

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

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

Despite Slowdown India to Add 40 mn sq ft Office Space This Year

With the economy regaining its momentum slowly, India will add up to 40 million sq ft of office space this year, which will be higher than many other advanced countries, but lesser than China. “Despite the slowdown, India will add highest ever office spaces this year. We will see 30-40 million sq ft of office space coming up in 2009,” global real estate consultant firm CB Richard Ellis Chairman and Managing Director (South Asia) Anshuman Magazine said.

The addition of office space will be more compared to many other advanced countries, except China, he added. Magazine, however, said demand has not picked up yet and the huge supply would lead to correction in rentals. “Prices can further fall in certain pockets depending on how much supply these places can absorb. In other places, prices have almost stagnated,” Magazine said, adding that some locations in Bangalore are likely to see decrease in rentals.

“After 2-3 years when supply will decrease and demand will increase, probably then we will reach at a stage of equilibrium,” replied Magazine when asked about the time by which office-space rentals could stabilise. Although office-space demand has increased in the first two quarters in 2009, Magazine said it would take time for “actual demand to pick up”.

“IT companies are responsible for 80 per cent of the total demand for office locations and these were the most impacted firms during the recession… But next year supply will dip by atleast 20 per cent,” he added. Of the total anticipated supply this year, Mumbai, Bangalore and the National Capital Region will house most of the spaces. “Chennai, Hyderabad, Kolkata and Ahmedabad will also see considerable addition of office spaces,” Magazine said.

Source : http://www.indianrealtynews.com/property-prices/despite-slowdown-india-to-add-40-mn-sq-ft-office-space-this-year.html

Milestone invests Rs 110cr in Godrej property in Kolkata

Milestone Real Estate Fund has invested Rs 110 cr into a residential project to be developed by Godrej Properties in Kolkota, a release from Milestone said.

Though Milestone did not disclose the percentage of stake picked by itself, it said that both iself and Godrej will jointly develop 3 million square feet of residential property, it said.

After a long lull in private equity deals in real estate, the action seems to be hotting up with recently Red Fort Capital saying that it has bought additional 4 per cent stake in Parsvnath’s premium project in Delhi.

Source : http://www.business-standard.com/india/news/milestone-invests-rs-110cr-in-godrej-property-in-kolkata/75029/on

Residential property prices rise 15%

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

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

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

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

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

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

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

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

Swissotel Hotels & Resorts Comes To Kolkata – India

For the first time, the international hotel chain Swissôtel Hotels & Resorts is to open a Swissôtel in India.
A management contract has just been signed between Bengal Ambuja Housing Development Limited Pvt. Ltd., one of the most reputed promoters in India, for a Swissôtel in Kolkata, which is due to open end of fourth quarter of 2009.

The new deluxe hotel will be part of City Centre – New Town shopping mall with shops, restaurants and a multiplex cinema, and has 147 rooms, each at least 32m² in size. Three restaurants, including a speciality restaurant and an open-air restaurant, a lobby bar and a poolside bar are available to guests. Facilities also include conference rooms offering 1261m² of space, a fitness centre and a rooftop swimming pool.

The management contract was signed with Bengal Ambuja Housing Development Limited Pvt. Ltd. (BAHDL), a company belonging to the prominent Neotia family, which has built up India’s largest cement business, before divesting the same few years ago. Since then the Neotia family has been focusing entirely on real estate business, the construction and operation of shopping malls, housing, commercial space and the hotel industry.

“India is the world’s second-largest nation; the numbers are on a gigantic scale,” says Meinhard Huck, President Swissôtel Hotels & Resorts. “India is set to become the world’s third-largest economy by 2020. Consumer demand is growing steadily, particularly in the cities, and the middle class, which is also growing rapidly, has ever increasing consumption needs. Against this background, we see great potential for our hotel chain and are delighted to have found in BAHDL a well-known partner that appreciates our Swiss values».

The new Swissôtel is being built in the new and developing city district of Rajarhat, which in the last few years has become home to numerous large IT and commercial companies (including  IBM, Philips, Wipro and Tata), as well as residences, schools, shopping malls, sports centres and cultural centres. The hotel is located 3km from Kolkata’s Netaji Subash Chandra (N.S.C.) Bose International airport.

Kolkata, capital of the Indian state of West Bengal, is a city of 6 million inhabitants, with a further 14 million people living in the metropolitan area, making it one of India’s five largest metropolises alongside New Delhi, Mumbai, Chennai and Bangalore. It is also the main financial centre in eastern India. The largest growth sectors are those areas that are prospering as a result of outsourcing, particularly by US companies, namely hardware and software manufacturing, call centres, publishing and healthcare. The country’s second-largest stock exchange, the Calcutta Stock Exchange (CSE), is also based in Kolkata.

Source : http://www.ftnnews.com/content/view/7105/26/lang,english/

Unitech Unihomes Kolkata : Unihomes Kolkata : Affinityconsultant.com

Unitech Unihomes Kolkata Project

Unitech Developers now moving in Kolkata presenting new stylesh affordable residential apartment Unihomes at Kona Expressway Kolkata. Unihomes offers 1 & 2 bedroom apartments that is suited for contemporary urban living. A desirable and contemporary place within the reach of your hard earned money. Apartments Price Starting at Rs.18 Lakh & above. You get all details on Real Estate website Affinityconsultant.com.

Unitech Unihomes Kolkata Location

Unitech Unihomes is located at Kona Expressway Kolkata. Just few K.M from Santragachi Railway Station, a hub of the South Eastern railway network. Lake Land Country Club and Botanical Gardens and much more away from few km.

Unitech Unihomes Kolkata Common Amenities
Gated community, Round the clock security, Convenience Shopping, Fire Safety Provisions, Limited Power Back-up, Landscaped greens Garden, Clubhouse, Banquet Hall, Swimming Pool, Gymnasium, Games Room, Sewerage Treatment Plant, Water Treatment Plant.

Type Size & Price
Types——-Size(sq.ft)—-Price INR(sq.ft)
1 BHK———562————–2190
2 BHK———800————–2190

About Unitech Developer
Unitech Group is one of the major township planning and real estate development companies in India. Unitech entered civil engineering in 1974 with its sights firmly set on the future. It has an impressive mélange of heavy construction, leisure and entertainment projects, hospitality business and development of mini cities/townships construction of residential and commercial complexes, including shopping malls and various types of dwelling units. Unitech commands strong brand equity as also a pan India presence with focus on residential development – the most profitable real estate segment.

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

http://www.bignews.biz/?id=814208&keys=UnitechUnihomesKolkata-UnitechDeveloperKolkata-UnitechKolkata-UnitechKolkataProjects

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

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

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

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

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

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

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

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

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

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

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

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

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

Hospitality giant on land hunt for city address

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

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

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

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

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

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

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

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

Cash discount catches fancy of home buyers

Freebies are no longer catching the fancy of prospective home buyers; instead they are seeking cash discount, as the real estate market shows signs of revival.

Since September-October last year, when the real estate market was in deep recession, several developers had started offering gifts like a car or a parking space with flats. For example, Kolkata-based real estate developer RDB Group had decided to give a Nano [ Images ] car with flats at its residential project in Sonarpur, South 24-Parganas.

The developer had promised to give first 50 home buyers would get a Nano free. It had in fact booked 300 Nano cars, thinking that the deal would sell like hot cakes.

Around 32 flats were sold under the scheme, but now only two customers want to stick to the deal and the rest want cash discount instead of the cars. In fact, RDB has changed the plan, and is now offering Nano on the basis of a lucky draw to customers at its retail outfit, with purchases above Rs 5,000.

“The response to the scheme was not very good, as due to factors like long delays in delivery, customers want now cash discounts rather than Nano,” said an executive from RDB Group, which might even look at scrapping the bookings for Nano with Tata Motors [ Get Quote ].

It is to be noted, in April-May, when the developer had launched the scheme, Ravi Pincha, director, RDB Industries [ Get Quote ], had said, “We have seen an overwhelming response for the the apartments, and have received more than 130 enquiries in the last two days.”

Earlier, Eden Realty, which is developing one of the largest housing project in south Kolkata [ Images ], tried to woo customers by offering free car parking space with flats few months back. However, the response to the offer was lukewarm.

Now, Eden Realty has devised a new scheme, whereby it is offering flats according to its location in the plot, instead of flat prices. Thus those with low budget pay about Rs 100-200 per square feet less than those availing premier locations.

Source : http://business.rediff.com/report/2009/sep/04/perfin-cash-discount-catches-fancy-of-home-buyers.htm

Puravankara, Mexico’s Homex talk JV

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

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

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

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

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

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

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

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

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

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

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

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

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

Office space rentals decline at slower rate

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

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

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

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

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

Real Estate boom in Rajarhat and New Town…!!

Rajarhat and New Town are the names of the new destinations for the ‘home seekers’ in Kolkata and its surrounding areas. Spread over thousands of acres, both Rajarhat and New Town are growing fast as residential and commercial areas, thanks to the real estate developers who are investing there heavily. While New Town has already turned into an IT hub with several reputed companies having their centers, Rajarhat is attracting companies that are in to the business of developing residential apartments.

If you take a car from Nicco Park or Nalban and head towards Netaji Subhas Chandra Bose International Airport, you will travel on a road that bifurcates the Rajarhat-New Town area and on its both side you will notice hundreds of real estate projects that are under way. Indeed Rajarhat-New Town is changing the cityscape of Kolkata very fast.

Located in the Eastern outskirts of Kolkata, Rajarhat-New Town is attracting increasing numbers of real estate developers everyday because of its vast area and its locational advantage. The international airport, the biggest transit point in the city is just minutes away from Rajarhat. Besides, Salt Lake, the biggest commercial area in this part of the city and Sector –V, the new working hub are also within the vicinity of Rajarhat-New Town.

For people who are financially sound, Rajarhat-New Town is certainly an ideal address. In the recent times, lots of people, who were originally inhabitants of different parts of Kolkata have shifted to Rajarhat and in the coming years, this modern city is certainly going to get more populated. Being located over a huge area and a little away from the bustling city, Rajarhat-New Town is a place where you can stay close to the nature and breathe in some fresh air. Sitting on the balcony or terrace of your house you can enjoy a panoramic view of a city which is growing up day by day.

With its steady growth, the Rajarhat-Newtown is slowly giving birth to a sophisticated society which will surely give a new identity to Kolkata in the future.

Source : http://www.bignews.biz/?id=810907&keys=RajarhatandNewTown-realestatedevelopers-NiccoPark-Theinternationalairport

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

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

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

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

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

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

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

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

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

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

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

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

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

Unitech to pump Rs 600 cr into affordable housing

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

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

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

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

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

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

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

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

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

Premium residential properties again on buyers’ list

There is good news — and it’s coming from above. Across the country, cities are reporting a revival of sales interest in premium residential Land as investment

properties. In many cases, this is happening, even though the values have remained mostly unchanged. A few cities, however, have attributed the revival to a marginal fall in prices.

In the premium segment, most of the interest revolves around main city areas and resale properties. “Yes there is a movement in the premium segment but it still stands lower than in the Rs 30-40 lakh segment. Part of the demand for premium buys is coming from the secondary market and partly from the under-construction properties,” says Anshuman Magazine, CMD of global real estate consultancy CB Richard Ellis.

In fact, this time round it is not speculators but end-users who are bargain hunting. An example is the COO of a leading multinational company in Delhi who had been looking for her dream home for three years within a budget of Rs 1.5 cr. But when she found the 3,000 sq ft apartment within her budget, she did not think twice about putting her money in.

Another buyer bought a property for Rs 18 cr in the upmarket Vasant Vihar area of the Capital for use by his family. This trend has kept realtor Ashok Kumar on his toes as he has done brisk sales in the Rs 3 crore per floor in premium South Delhi areas as well as the Rs 6 crore to Rs 30 crore sales in premium residential areas such as Vasant Vihar, Panchsheel Park, Greater Kailash and Defence Colony areas. In the suburban areas of Gurgaon, per sq ft rates of premium property is between Rs 3,000 and Rs 3,500 on Sohna Road to Rs 15,000 on the Golf Course Road.

The asking rates were about 10-15% higher during the boom. Realtor Ravi Pundir says in Noida, Sectors 93, 50 and 62 have apartments of 1000-9000 sq ft each by developers such as Jaypee, Unitech, Amrapali and Mahagun at Rs 4,400-8,000/ sq ft.

Harinder Dhillon, GM, marketing, Raheja Developers, also agrees that demand in this segment has picked up. “Our Atlantis project in Gurgaon is in the range of Rs 1.5-1.6 cr, which has been seeing a good response. The fact is that end-users have realised that the market has already bottomed out and the price movement from here will only be upwards.”

Brix Research, the research arm of magicbricks.com, has been conducting a series of multi-city surveys to assess the demand of premium housing in the country since December 2008. Multiple sources, including developers, realtors and consumers, have been contacted on a sustained basis to arrive at these conclusions. The survey has found that the premium luxury apartments and bungalow market of Rs 1.5 crore to Rs 3.5 crore and above, has witnessed a revival across India since May 2009.

In Mumbai sale of premium property in areas such as Cuffe Parade, Carter Road, Andheri East, Juhu, Film City Road, Bandra, Pali Hills, Four Bungalows and Juhu Road Versova side did take place, though at 10% rate of transactions at values upwards of Rs 25-30 crore each. Row houses in Bandra and Carter Road areas sold during the reported slump at Rs 2- 2.5 crore each and values are unchanged. A few villa projects in the Royal Challenge area by developers such as Oberois and Rahejas are finding takers at Rs 8-9 crore each. Less premium developers are finding buyers at Rs 6-7 crore each, according to Chandan Chowdhary, a leading city realtor.

In Bangalore, the slump in the market continues. Premium localities along the Ring Road such as Cox Town, Indirapuram and Koramangala, have witnessed sale at 10% lower prices. Transactions have risen from the near zero to about 30-40% of peak numbers at Rs 50 lakh to Rs 1.3 crore, according to city-based realtor Nadim Munjawar. However, in peripheral premium localities such as Whitefield, Electronic City and Sarjapur Road, prices have dipped by almost 30-40%.

In Chennai, in premium areas of Aryapuram, Besant Bagar, East Coast Road, Perungudi, Adyar, T Nagar, Ashok Nagar, KK Nagar and Boat Club prices Land as investment

range from Rs 50-60 lakh to Rs 5 crore and demand has dropped 95%. With values down by 10-15%, transactions have started picking up in luxury apartments, bungalows and individual houses. Local realtor Madhusudanan expects the situation to continue till 2010-11.
In Ahmedabad, luxury apartments of around 2,000 sq ft come at Rs 50 lakh to Rs 2 crore. The rate of transactions are rising. Premium localities include Prahlad Nagar, Science City Road, Vastrapur, Satellite, Mani Nagar, Shahi Bagh, in and around Lajpat Club and upcoming localities such as Sanathan. Major developers in this segment include Pacifica Builders, Goyal, Savvi Infrastructure, Bakeri and Saffal groups. Realtor Anand Varani maintains that premium buyers are not impacted by falling interest rates or dropping property values. Only those scouting in the main city areas are looking for bargains.

In Kolkata, premium properties that have been launched 3-4 months ago, are selling since May-June 2009. Transactions are at 75% of peak numbers, says realtor Sandeep Sen. Transactions in the Rs 70 lakh to Rs 3 crore for 2,000-2,500 sq ft, 3 BHK apartments are taking place. Premium projects are coming up in Ballyganj Circular Road, Guru Sadi Road and Maysir Road. The shine is back in the premium real estate market. So this may be just the right time for you to scout for a good deal!

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Property/Premium-residential-properties-again-on-buyers-list/articleshow/4794274.cms?curpg=2

Leela Palaces to invest Rs 2,200 cr by next year

NEW DELHI: Hospitality player The Leela Palaces, Hotels and Resorts is planning to invest Rs 2,200 crore by the next year as part of the group’s  plan to add seven new properties across the country by 2012-13.

The company will spend the amount for its upcoming hotels in Delhi and Chennai which will be ready for inauguration in 2009.

“We plan seven new properties across India by 2012-13, and as the first phase of it our group would be investing Rs 2,200 crore to complete two new hotels in Delhi and Chennai by the end of 2009,” Hotel Leela Venture Ltd Vice Chairman and MD Vivek Nair told reporters here.

He said that besides the properties in Delhi and Chennai, the chain is also going ahead with plans to set up hotels one hotel each in Udaipur, Pune and Hyderabad and resorts in Kovalam and Kolkata by 2012-13.

“We have managed to secure funds for the Delhi and Chennai properties with a mix of buy-back of 25 per cent of our Foreign Currency Convertible Bonds worth USD 100 million and Euro 60 million,” Nair said, adding that the buy-back was decided during the company’s board meeting on June 27.

Leela group’s board had also passed the enabling resolution for setting up properties in Agra, Hyderabad and Pune during the same meeting, though actual number of equity has yet to be decided upon, he added.

Source : http://economictimes.indiatimes.com/News/News-By-Industry/Services/Hotels-Restaurants/Leela-Palaces-to-invest-Rs-2200-cr-by-next-year/articleshow/4766743.cms

South Special: South City Projects in Kolkata

The latest landmark addition to bustling Kolkata, South City on Prince Anwar Shah Road, is a well-planned, ultra-modern mini township redefining the  essence of convenient living.

Spread over 31.14 acre (around 1,885 cottah), this integrated development offers beautifully designed, spacious, cross-ventilated well-lit premium apartments and a sprawling eco-friendly complex. The 1,672 apartments offer some extraordinary features that sets apart South City Projects from many other developments mushrooming across the city.

Its earthquake resistant towers with high-speed elevators, internal traffic and security management, modern fire fighting systems and best civic amenities make them quite unique.

The four 35-storied and one 15-storied residential towers have two, three and four-bedroom flats, duplex and penthouse covering an area of 1,140 sq ft to 3,175 sq ft and 2,700 sq ft to 3,500 sq ft, respectively. Priced between Rs 70 lakh and Rs 2 crore, these apartments are being handed over as and when they are being completed and company officials say by 2011, all 1,672 apartments would be given to respective buyers.

“South City Projects was conceptualised when there was a dearth of quality integrated development in the eastern region of the country. It has unique design, amenities, is structurally superior while its green and open space has already garnered attention of consumers from across India and abroad,” says Sushil Mohta, director, South City Projects.

He adds, “Though the project offers the largest mall in eastern India covering about 1 million sq ft of space and housing some 134 retail outlets, one of the largest food court and dining area in Kolkata spread over 75, 000 sq ft, an international school, multiplex and a multi-facility, resort-type club in a lush landscaped ambience, the apartment towers are situated in an exclusive demarcated residential zone with its own internal road network.”

It is also the first real estate project to be taken up by a consortium of realtors such as Sushil Mohta of the Merlin Group of Companies, RS Agarwal and RS Goenka of the Emami Group, JK Khetawat of the Rameswara Group, Pradeep Sureka of the Sureka Group, SK Todi of the Shrachi Group and RK Bachhawat of the JB Group.

While Dulal Mukherjee & Associates was the principal architect, international design consultants Smallwood Reynolds Stewart, Stewart & Associates from Atlanta, USA and Peridian Asia PTE from Singapore worked as the landscaping architects. Meinhardt (Singapore), PTE were the structural consultants.

Spurred by the project, the area witnessed several infrastructural developments in the area. In fact, the government has proposed a flyover connecting EM bypass after the traffic congestion in and around the area increased with the the opening of the mall.

Apart from the fact that the bus stand on the road has been relocated, the surrounding area also saw development of residential complexes like Merlin Manor, Merlin Residency, Merlin Cambridge, City High, Orbit Heights, Westwind, Hiland Park, Udayan, Bengal Shrachi, Orbit City, Sugam Park, Ekta Heights for the upwardly mobile. The popularity of South City Prince Anwar Shah Road project has made the consortium bring out two more premium versions, South City Garden and South City BEL–AIR.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/South-Special-South-City-Projects-in-Kolkata/articleshow/4767818.cms

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

Developers build on low margins, high volumes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kolkata, Chennai prices drop the least among major cities

Kolkata’s real estate market has historically remained far more stable than those in other large Indian cities

Kolkata: Real estate rates in Kolkata and Chennai didn’t rise as rapidly as those in Mumbai, Delhi and Bangalore in the heady years of the boom. Now, as prices plunge in these cities, rates in the two metros aren’t falling as much, say international property consultants including the local arms of Cushman and Wakefield and Jones Lang LaSalle Meghraj.

The reason: better balance between demand and supply.
Less volatile: A building under construction in Kolkata. Property prices in the city fell by 14%, against 35% in Mumbai and 24% in Bangalore. Indranil Bhoumik / MintBetween January and March, when real estate developers were reeling under the impact of the credit crunch and slowing demand, and property prices dropped sharply across the country, prices of new homes in Kolkata fell by up to 14% from September last year, whereas they fell by up to 35% in Mumbai and up to 24% in Bangalore, according to Cushman and Wakefield. In Chennai, too, the decline wasn’t as sharp—prices fell by up to 18% but only in some neighbourhoods; in others, there was no change at all.

In Chennai, according to the consultancy, buyers are more sensitive to design and functionality than prices because of which developers weren’t forced to offer hefty discounts—like they were in other cities.
And in Kolkata, the prices didn’t rise as high as they did in some other cities. “In markets such as Mumbai and Delhi, builders overestimated the demand for residential properties, especially in the high-income segment, or properties worth Rs1 crore and above,” said Kaustuv Roy, executive director of Cushman and Wakefield. “This led to an oversupply of such properties in these cities and prices crashed. But that didn’t happen in Kolkata.”
And during the peak of the real estate boom in 2006, prices of residential properties in the upscale Ballygunge area of south Kolkata were Rs3,200-5,500 per sq. ft whereas in comparable areas of Delhi such as Vasant Vihar, the rates were Rs12,000-14,000 per sq. ft, according to Jones Lang LaSalle Meghraj.

Kolkata’s real estate market has historically remained far more stable than those in other large Indian cities. According to a recent report by investment bank Goldman Sachs, even in 1996, when there was a major correction in property prices across the country, prices of residential and commercial properties in Kolkata fell only by 26% and 35%, respectively, whereas in cities such as Mumbai and Bangalore, the drop was at least 50%.
“There’s not been much speculative play in Kolkata properties, which is another reason why prices didn’t go up fast,” said Abhijit Das, joint managing director of Kolkata-based real estate broking firm Lemongrass Advisors Pvt. Ltd. “Also, Kolkata-based developers weren’t as leveraged as the leaders in the industry, who were forced to cut prices sharply when things weren’t selling.”
“The typical debt-equity ratio of real estate developers in Kolkata is 1:1, but for bigger developers, the ratio is much higher—even 4:1 or 5:1 in the case of some companies,” said Pradeep Sureka, director of the Sureka Group, a leading real estate developer in Kolkata.

Source : http://www.livemint.com/2009/06/09224724/Kolkata-Chennai-prices-drop-t.html?h=B

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

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

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

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

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

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

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

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

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

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

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

Big Malls Make a Comeback

The global financial meltdown and its concomitant effect on India’s real estate industry had forced developers to defer supply of mall space in 2008. However, in what could be seen as early signs of revival of retail real estate, as many as 100 malls, spread over 30 million sq ft, are expected to come up in 2009 and 2010, according to a report. Though this figure is much lower than what was projected a couple of years ago, analysts say this is finally a positive development, realtors are now more keen on matching supply with demand, placing themselves in strategic locations and offering greater differentiation. An additional 31,846,504-sq ft of mall space will be created across India, according to a report, Mall Realities India 2010, released by retail research group Images in association with the Shopping Centres Association of India, Jones Lang LaSalle Meghraj and Cushman & Wakefield (C&W) India.

The north zone would see the development of 14,790,000 sq ft, of which, Delhi NCR alone is expected to account for 7,645,000 sq ft of mall space. This translates into 45 malls expected in the north zone with 24 in Delhi NCR itself. “The NCR region is huge in terms of area, and residential areas give way to markets. Malls nowadays are not just about shopping. They are leisure centres, with cinema halls, restaurants, beauty parlours and other entertainment avenues. Only malls with a multi-faceted role to suit every pocket will survive,” says Rajeev Talwar, group executive director of New Delhi-based real estate firm DLF. West zone is expected to supply 7,438,504 sq ft through 47 malls. South and east zones would account for 29 malls over 5,865,000 sq ft and 13 malls over 3,753,000 sq ft, respectively.

Says Vikas Oberoi, managing director of Oberoi Constructions, “I think any mall above half a million sq ft will be the order of the day in future. On the outskirts of the city, the size could be over one million sq ft. The advantage of big size is that one can have everything under one roof — food, cinema, fashion, home wear and personal care. Customers would get a wider choice and they would consider it to be a destination mall.” In 2008, 54 per cent of expected mall supply was deferred to 2009-10. Of the proposed 74 malls at the beginning of first quarter of 2008-09, only 34 were delivered by the year-end. At 9.7 million sq ft, Delhi NCR had the largest share of this supply. The credit crunch hit the developers hard, forcing them to put their mall development plans on hold.

“Construction was put on hold because of lack of funding, but as long as there is demand for residential units, there will be a demand for malls. It’s all about the location and positioning of the mall,” explains Snehal Mantri, director (marketing) of Banglaore-based Mantri Developers. The country’s retail sector as a whole has been experiencing significant pressures in terms of cash crunch and depressed sentiments. “Lower or negative revenue growth over last year on same store basis and high rental costs of the stores added in 2007-08 have forced brands/retailers to take a re-look at their real estate portfolio. The main challenge for the sector over the past few quarters has been sustainability,” says Tanuja Pradhan, national head (research services), C&W. Malls across the country have seen a drop of 25-30 per cent in footfalls and 10-15 per cent dip in sales. Mall operators and builders are looking at various options to push profits.

Big retail companies are forging revenue sharing arrangements with mall owners and developers. This is expected to be the model of business relationships between organised retail and property owners in the future. Spencer’s of the RPG group, the People Store chain of the Aditya Birla group and independent retailer Vishal have been able to win over developers who have now agreed to lower rents in lieu of a part of store revenues. Others are looking at various marketing ploys to boost revenues. Automobile company Bhasin Group’s real estate arm has announced a theme mall by the end of March 2010 year in Greater Noida (Delhi’s NCR). The mall, The Grand Venezia is to be built at a cost of Rs 500 crore. It recreates the ambience of Venice with Italian gondolas sailing through a canal located in the heart of the mall with each shop having access to it. It will have a 1.5 million sq ft shopping mall, an office tower, 2-lakh sq ft commercial tower, a 5-star luxury hotel, lifestyle clubs, gaming zone, multiplex and an amphitheatre. In Kolkata, Ambuja Housing Development is planning a mall with a 1,000-sq ft butterfly park on the second level, housing 40 species of butterflies.

Besides, there would also be a 4-screen cineplex, entertainment and food courts, banquet halls, 1,500-car parking area and around 200 small and big retail outlets. The mall will also have a 3-4 star budget hotel with 150 rooms to take advantage of the proximity to the airport, although no brands have yet been finalised. The built-up area of City Centre New Town is 6.8 lakh sq ft and the expected date of completion is September 2009. C&W’s Pradhan advises those looking at the retail sector to focus on 5 Ps — positioning for the brand, pricing for the right tenant mix, packaging for design and interiors, product for the perfect merchandise mix and promotion for malls and brands within malls. Dharmesh Jain, managing director of Mumbai-based Nirmal Lifestyle, sums up the future of India’s mall growth, “At least 80 per cent reduction in mall space is because of slowdown and turmoil in real estate. People who want to enter the business will find it difficult to survive, because the existing ones want to grow bigger. However, I think there will be a shortage of mall space from 2011-12. The economies of scale will come in handy for big malls, the reason why people will be looking for big malls,” he says.

Source : http://www.indianrealtynews.com/real-estate-trends/big-malls-make-a-comeback.html

Drop in Rentals Lure Retailers towards Metros

With rentals dropping sharply, large retailers such as Aditya Birla Retail, Reliance Retail and Shoppers Stop, and food chains such as McDonald’s are looking at metros and mini-metros for expansion. Aditya Birla Retail and Reliance Retail had started their operations two years ago in Pune and Hyderabad, respectively, as realty costs were too high in metros. However, due to fewer footfalls and lower offtake from retailers, retail rentals have fallen by over 40 per cent in the last six-nine months in many cities, according to retailers and consultants. After they expanded steadily in cities such as Ahmedabad, Mysore, Indore, Vijayawada and Coimbatore, retailers are now all set to expand aggressively in big cities such as Delhi, Mumbai, Bangalore, Chennai and Kolkata. For instance, Aditya Birla Retail, which is setting up 60 supermarkets this financial year and 12 hypermarkets by fiscal 2011, is focusing mainly on Delhi, Bangalore and Mumbai.

“We need rentals lower than Rs 25 per square feet per month to make our business viable. Two years ago, metros were unaffordable. Now, as mall owners prefer to have hypermarkets in their malls, they are ready to come below the market price,” said a senior Aditya Birla Retail executive, who declined to be identified. “We will again look at Tier-II cities in FY11,” the executive said. Having established its value formats such as Reliance Fresh and Reliance Mart in the top 85 cities, Mukesh Ambani’s Reliance Retail is planning to establish its other formats in these cities. Spencer’s Retail is gearing up to open two hypermarkets in Bangalore, one in Chennai, one in Kolkata, two in Hyderabad and two in Pune.

Samar Shekhawat, Vice-President, Marketing, said: “Our stores are witnessing an increased demand as the economy is seeing a revival. Though marginally, we are growing steadily every month.” Shoppers Stop, the department store chain owned by the Rahejas, plans to open four stores in Bangalore, Ahmedabad and Hyderabad this financial year. It has also plans to open four stores each in the next two fiscals. The size of each store would be around 55,000 sq ft to take advantage of the fall in rentals, reversal of service tax and possible revival in the economy, Shoppers Stop Chief Executive Officer Govind Shrikhande said. McDonald’s is planning to open 40 new outlets across the country in FY10 — mostly in Mumbai, Chennai and Hyderabad — with an investment of Rs 120 crore. At present, it has 160 outlets.

But McDonald’s plans of opening new outlets may just be affected by the delays or non-completion of real estate projects due to the slowdown in the realty sector. “In the last 6-12 months, retailers have realised what went wrong and right. They have done many pilots in terms of formats, merchandise and offerings, and now have much better idea about what works and what does not,” said Anand Raghuraman, partner and director at Boston Consulting Group (BCG), a business consultancy. Besides fall in rentals, driving consumers to stores in metros was much easier compared to smaller cities. However, consultants warn against concentration of retailers in metros. “There is a big scope in Tier-II and III cities now as the first mover advantage and brand recall are high there. If shoppers get to first mover shops in these cities, they will stick to them for a long time,” said Susil Dungarwal, Chief Executive Officer of Squarefeet Consulting.

Source : http://www.indianrealtynews.com/retail-market/drop-in-rentals-lure-retailers-towards-metros.html

Ambuja Realty to invest Rs 1,000 cr this fiscal

Kolkata-based Ambuja Realty today said it plans to invest around Rs 1,000 crore in the current fiscal for developing malls, residential townships and IT parks in Kolkata.

“Our capex for this fiscal is around Rs 1,000 crore, which will be spent in developing malls and IT parks in Kolkata. The funding is from the group’s internal accruals. We have also raised some debt,” Ambuja Realty Development Chairman Harshavardhan Neotia told reporters here.

He said the group’s turnover for last fiscal was around Rs 250 crore.

The real estate company, at present, is developing four malls in Siliguri, Haldia and Raipur apart from an IT Park in Kolkata spread over 1 million sq ft, Neotia said.

“About one-third of the IT Park is ready. We are also developing a 150 room five-star hotel in Kolkata near the airport,” Neotia said.

The company is in talks with some international hotel chains and hopes to finalise a deal by July, he added.

“We plan to open the hotel in the January-March quarter next year,” he said.

Although rents and lease rates have shrunk by 10-15 per cent in Kolkata, there is not much reduction in the cost of raw materials, he said.

Source : http://www.business-standard.com/india/news/ambuja-realty-to-invest-rs-1000-cr-this-fiscal/63237/on

Jones Lang sees commercial rentals correcting further – report

MUMBAI, May 15 (Reuters) – Commercial rentals will fall faster in the second quarter of 2009 than the first, and some recovery should be seen by the end-2010, Jones Lang Lasalle Meghraj said in a report.

Oversupply across commercial space in cities are expected to increase in 2009 and vacancies are seen rising over 20 percent, in the year, the real estate consultant said in its May report.

The report covered Delhi, Mumbai, Bangalore, Chennai, Pune, Hyderabad and Kolkata, taking into account the first-quarter results of 2009.

Around 70 percent of India’s commercial projects announced in these cities for completion during the year are expected to be operational, it said.

“The rest will be delayed…We’ve only seen some isolated cases being shelved or converted. But it’s just a very small number and not in the major cities,” said Abhishek Kiran Gupta, Head-Research of Jones Lang LaSalle Meghraj.

About 146.6 million sq. ft. of space will come up in the next 11 quarters, according to the company’s estimates, as opposed to the total 172.9 million sq. ft. of commercial space announced for completion in the next 3-4 years.

The largest decline in commercial rents have been in Mumbai and Delhi, down 24 percent from the last quarter, followed by Kolkata, Hyderabad, Chennai and Pune, which were down 10-15 percent from the last quarter.

RETAIL

Total retail stock across the cities at the end of the quarter to March stood at 34.8 million sq ft while another 62.6 million sq ft of mall space is either proposed or under various stages of construction in the next 2-3 years.

Currently, Mumbai and Delhi account for about 72 percent of the retail space, but this is seen dropping to just under half the stock by the end of 2011.

Vacancies of retail space have increased to 14.5 percent as more malls in Delhi became operational.

Retailers are renegotiating on their rentals, looking for zero rental schemes, minimum guarantee and revenue sharing models, it said. (Reporting by Jasudha Kirpalani; Editing by Sunil Nair)

Source : http://in.reuters.com/article/domesticNews/idINBOM46805420090515?pageNumber=2&virtualBrandChannel=0

Mumbai, Kolkata, Chennai, Delhi-NCR see decline in rentals

Bangalore, May 12: Barring selective markets, most cities saw a fall in rentals in January-March 2009 as compared to October-December 2008, according to property report.

Delhi-NCR, Mumbai, Kolkata, Chennai saw a decline in rentals while Hyderabad saw a rise in rentals in January-March 2009 as compared to October-December 2008, the quarterly report on property prices trends, released by ‘99 acres Insite’, property portal, said here today.

Rentals were up in Bangalore in January-March 2009 across most localities compared to the previous quarter.

According to the report, Bangalore real estate saw a correction in property prices early last year continuing into the year. Some localities are now seeing revival in property prices. Hebbal, Sarjapur Road, Maleshpalaya, Kaggadasapura saw an increase in property prices by three percent.

“The trend in Janauary March 2009 is on expected lines. In majority of localities in Bangalore, prices seem to be averaging out at the current levels, making the market attractive o the price front. Lack of transactions in the market is just a reflection of the prevailing sentiment,” said Vineet Singh, Business Head, 99acres. com.

During Jan-March 2009, markets like Bangalore which had already seen a bottom, saw a comparative steadiness in prices in some of the localities, while markets like Delhi-NCR stabilised. Chennai and Hyderabad continued to see fall in property prices, however, not as sharp as the previous quarter.

Source : http://www.zeenews.com/news531219.html

Real Estate Sees Slow Recovery, Prices Pick Up

With sales gradually picking up in the real estate sector, developers are swiftly increasing prices. Tata Housing has emerged as the lead developer to have hiked property prices in the recent days. The company has increased prices of residential units at Eden Court, its first housing project in West Bengal, for the second time in the last one week, to Rs 2,900per square feet from the staring price of Rs 2,750 per square feet. “The rise in prices is in tandem with the demand, as almost 70 per cent of the residential units in the project have been sold out,” said sources at the authorised marketing agents for Tata Housing.

Tata Housing’s first real estate project in the state is not a low-cost housing project, like the one it recently launched in Mumbai. Widely applauded as a “Nano” in the housing sector,a 283 square feet flat in “Shubh Griha”, the company’s low cost housing projects in Mumbai, comes at about Rs 3.9 lakh. Whereas, at Eden Court, about a 1,000 square feet flat will not come at less than Rs 30 lakh. A spokesperson from Tata Housing, while confirming the price hike, said, “The housing project in West Bengal has been well-received.” When asked whether the company would launch a low-cost housing project in West Bengal, the spokesperson said, “Our managing director has indicated that we will have a pan-India presence. We are also considering Kolkata for the housing project. The project commencement will depend upon the availability of land in the state.”

Spread over 50 acres in Rajarhat, in Action Area II of New Town, the Tata Housing project would be a combination of residential, commercial and retail, and the first phase comprises the residential project. The company bought the land from the West Bengal Infrastructure Development Corporation (Hidco), the nodal agency for allotting land in New Town Rajarhat. The complex would be spread over five acres and would have three towers with two-bedroom and three-bedroom apartments. Two of the towers would have G+18 floors. The entire township project is expected to be completed in 2.5 years. However, not just Tata Housing, it appears that the real estate sector was showing signs of recovery.Kolkata-based P S Group, is also developing a housing project at Rajarhat, and selling flats at Rs 1,899 per square feet.

Pradeep Chopra of the P S Group said, his firm had increased prices by Rs 200 per square feet recently. “Even by selling at Rs 1,899 per square feet, our margin is close to Rs 300,” said Chopra. According to experts, the spurt in prices could be in view of the lack of supply, mainly because for more than last six months hardly any new project has been launched by developers in Rajarhat. With few ready-to-occupy flats available in the area, big real estate developers might have been leveraging from the imbalance in supply and demand, apart from the brandname, opined experts.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai/real-estate-sees-slow-recovery-prices-pick-up.html

Mumbai, Ahmedabad see steepest fall in mall rentals

AHMEDABAD: Once buzzing with a lot of business activity, shopping malls too are feeling the pinch of the slowdown. While mall rentals in retail  hotspots like Mumbai and Ahmedabad have seen a correction of 36-42%, other shopping destinations like Hyderabad, Pune, Kolkata and the NCR saw a drastic dip since January 2009.

The mall and main street rentals fell as much as 42% in Mumbai and 25% in the NCR in the January-March quarter, compared to preced-ing quarter, according to a report by real estate consultancy Cushman & Wakefield. Ahmedabad saw corrections in the range of 20-36% over the last quarter.

In the past one year, mall rentals in Ahmedabad alone have corrected by a whopping 33-55%. The correction in rental points to a waning retail sector in Ahmedabad. Be it stores of Indiabulls Retail, Spencer’s Retail or Subhiksha, the retail biggies have either shut shop (completely or partially) or have shrunk in size.

In Mumbai, main-street locations also saw rental correction with Colaba Causeway recording the highest correction of 38%.

Hyderabad recorded one of the highest mall rental corrections of 25-29% due to restrained demand from retailers. Main-street rentals also saw corrections in the range of 5-20%, largely due to renegotiations and restrictive demand.

In Kolkata, the Theatre Road and Elgin Road, two prominent street markets of the city, registered 10% correction on the account of exit of some prominent retailers. In Pune, the Bund Garden Road witnessed the steepest correction of 25%. MG Road remained stable on account of lack of supply.

Source : http://economictimes.indiatimes.com/News/News-By-Industry/Mumbai-Ahmedabad-see-steepest-fall-in-mall-rentals/articleshow/4488973.cms

Marlin Group Unveils New Residential Project in Kolkata

Kolkata-based real estate company Merlin Group has unveiled a premium residential complex called Merlin Cambridge. Coming up along the Prince Anwar Shah Road, the Rs 100 crore, high-end residential project spread over 1, 61,698 sq ft, is expected to be ready by 2011. Merlin Cambridge will have 92 dwelling units in three sizes – 1,840 sq ft, 2,078 sq ft and 3,910 sq ft. The price would range between Rs 97 lakh and Rs 2 crore, according to its top official. Demand for high-end houses is still there. Despite the economic crisis, there has been an increase in the number of double-income families, high-salaried people. Their high purchasing and borrowing powers and easy availability of home finance, have contributed significantly to the growth of luxury housing segment. We are targeting consumers who want to upgrade their lifestyle and living standard in terms of quality, infrastructure and world class amenities,” said Sushil Mohta, MD, Merlin Group.

Prince Anwar Shah Road is one of the most upcoming arterial roads of south Kolkata, well-connected to high-end residential area — Jodhpur Park, Southern Avenue, New Alipore, Alipore, Golpark, Ballygunje and Bhawanipore. It has high-end residential complexes, malls, departmental stores and other facilities. The locality hogged the limelight when the South City project, the tallest and biggest housing project in eastern India came up here last year. The complex housing a 23-storey building would have a landscaped rooftop garden, community hall, children’s play area and parking facility for 200 cars. “The Princeton Club would have a lounge bar, a multi-cuisine restaurant and banquet facilities,” Mohta added.

Source : http://www.indianrealtynews.com/real-estate-india/kolkata/marlin-group-unveils-new-residential-project-in-kolkata.html

Real estate prices declined further due to slowdown

MUMBAI: The failure of retailers to exploit the fall in real estate prices triggered by the economic slowdown, has led to a further correction in  property prices across major metros of India, real estate consultant, Cushman & Wakefield (C&W), has said in a report.

“Most retail micro-markets, both malls as well as main streets saw a further correction in rental values. Mumbai saw the sharpest decline in rental values for both malls (Goregaon -42 per cent) and main streets (Colaba Causeway38 per cent),” C&W said.

Mumbai witnessed the second-highest mall supply with an addition of 3,05,000 sq ft in Q1 09. However, it also recorded the highest mall rental correction, the report said.

Receding user-demand has severely curtailed uptake of space across most micro-markets, the report said.

“The trend of further correction is likely to continue in short-to-medium-time frame leading to further correction in both mall rentals as well as high-street rentals,” C&W India Retail Services, Executive Director, Rajneesh Mahajan, said.

Delhi’s National Capital Region (NCR) witnessed an up to 25 per cent decline in rental values, the report said.

“Increase in malls has impacted main street rental values, which have seen a downward trend especially in areas around South Delhi like Greater Kailash I M-Block market recording a correction of 25 per cent,” C&W said.

While the main streets of Bangalore saw much wider corrections in the range of 6-28 per cent, Hyderabad recorded one of the highest mall rental corrections between 25 per cent to 29 per cent.

Kolkata saw mall rental values shrink by 12-25 per cent due to delays in mall projects, while those in central Chennai were pulled down by 8 per cent, C&W said.

It noted that only 1.4-million sq ft of fresh mall supply was added in the first quarter of 2009, mainly in Mumbai and NCR and five other major cities.

The fresh supply was much below initial expectation largely due to the slowdown in uptake of space by retailers, which led developers to reduce the speed of construction in already-underway projects, it said.

“Estimated mall supply by end-2009 is calculated to be 17.66-million sq ft, approximately 11-million sq ft of the same has been carried forward from 2008,” C&W said.

Other developers, who are yet to begin construction of previously announced projects, may be reconsidering their retail mall plans, the report said.

“Most retailers are now renegotiating their rental commitments as per the actual business potential in the mall, thereby exerting downward pressure on the rental values,” Mahajan said.

“Many developers have now begun to support retailers by reducing the fixed occupancy cost, as well as offering revenue-sharing opportunity with retailers to promote increase in occupancy,” he added.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Real-estate-prices-declined-further-due-to-slowdown/articleshow/4487028.cms

Green Housing Complex Gaining Popularity

A New Delhi-based developer, 3C, has announced two green residential projects in Noida this year at a budget of Rs 2,600 crore. Siddha Group, a Kolkata-based realtor, is developing a green housing complex, Xanadu, in Kolkata. In Mumbai, Mahindra Lifespaces is developing a green project Mahindra Splendour in Bhandup. At a time when the real-estate sector is passing through a trough, the concept of green buildings is catching on among developers and buyers. This is because of two factors: growing environment consciousness, and lower cost of operation of these buildings. With the cost of energy rising, the demand for such buildings is expected to rise in future. Sachin Sandhir of the Royal Institute of Chartered Surveyors (RICS), a London-based realty institution that trains realty professionals, says, “With green buildings, real-estate professionals are helping to improve the quality of urban life in Indian cities.”

Green Data Center 5 Cost-Effective Steps to Building www.HDS.comGreen Building Insurance Green Commercial Property Insurance www.FiremansFund.comReal Estate India Buy/Sell/Rent Property in India. 99acres.com Ads by Google The 3C Group is developing two projects, the first consists of 500 luxury flats spread over 40 acres in Sector 100, Noida. The other green residential project will be a 57-acre luxury development with a nine-hole golf course and a health spa in Greater Noida, which will be launched in the fourth quarter of 2009. It will offer 100 luxury villas ranging from 1,000 to 3,500 square yards.

In Siddha Group’s project in Kolkata, energy-efficient equipment will be installed, as recommended by the West Bengal Green Energy Development Corp, a state government enterprise set up to promote environment-friendly construction. Xanadu will have 314 studio apartments, each with around 600 sq ft area. Located at Rajarhat, this showpiece township of the West Bengal government will have low-carbon emission as its unique selling proposition. About 15 per cent of the energy used in these apartments will come from renewable sources. Siddha Group’s joint managing director Sanjay Jain says they would install green energy equipment in the building following the guidelines of the Green Energy Corp.

Source : http://www.indianrealtynews.com/real-estate-india/delhi/green-housing-complex-gaining-popularity.html

RDB Developers offers free Nano to push housing demand

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

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

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

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

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

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

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

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

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

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

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

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

Tatas keep Rajarhat housing project on track

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Decline in Office Rentals continues

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

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

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

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

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

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

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

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

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

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

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

Kolkata residential projects back in demand

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Roadshow by Realtors to woo NRI Bengali’s

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

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

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

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

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

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

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

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

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

Kolkata retail demand down, new projects on hold

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Business Standard

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

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

20 March 2009 Business Standard

Retail and Commercial Sector Feels the Heat of Recession

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

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

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

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

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

Oversupply of retail space

As against 1 lakh sq.metres of shopping mall space in 2002, there are no fewer than 120 malls totalling 3.9 million sq.m today. The exponential growth of India’s retail sector is expected to continue until at least 2010, by which time the shopping centre stock could be as high as 8.25 million sq.m, says a report from realty services firm Jones Lang LaSalle Meghraj (JLLM).

While the numbers look staggering, on the flip side, the country is seeing a state of oversupply as far as the retail space is concerned. This, coupled with low sales for retailers, is forcing them to rethink their expansion plans. As a result, “demand for mall space has sunk by more than 50 per cent from the same time last year”, says Mr Shubhranshu Pani, Managing Director – Retail, JLLM. “Retailers have drastically slowed down on their expansion plans and are attempting to squeeze in maximum value on their deals with developers.”

With demand dipping, projects that have not taken off so far are being stalled, and developers are attempting to reinvent their intended malls into more marketable formats such as office and residential, depending on the demand.

Mumbai has seen a 30 per cent dip in demand, while it is a 40-45 per cent dip in New Delhi, around 80 per cent in Kolkata, and 70 per cent in Pune. “The retail situation in Bangalore and Chennai is muted, but transactions are going on at a more subdued level,” says Mr Pani.

Though the retail euphoria has died now, location-specific malls will still be in demand, says Mr K.S. Sudarshan, Chief Operating Officer, Ozonegroup, a Bangalore-based real-estate developer. Chennai, he points out, is supply-starved as far as retail space is concerned, for it is the only city that has not witnessed any price and demand correction.

This short supply scenario has encouraged the company to plan the launch of a 1.5-million-sq-ft mall in Anna Nagar, an upscale locality in Chennai, “where there are no competing malls in the vicinity,” says Mr Sudarshan. “We have already tied up with major brands for the retail space in the project, and are in talks with a few others too. We haven’t seen price and demand corrections now, nor do we anticipate any major correction in the future.”

What will work

There is still demand for quality space across the country, says Mr Susil S. Dungarwal, Founder and CEO, Squarefeet Management, a Mumbai-based real-estate consultant firm. It will be only the stand-alone shopping/retail spaces that would feel the pinch, feel industry analysts. A destination or integrated mall will always be in vogue, says Mr Sudarshan. There is a dearth of quality luxury space in India, “which is why luxury brands have no choice but to go to five-star hotels or high streets,” feels Mr Dungarwal. “With the FDI allowed in single brand retail, many luxury brands are still waiting for the luxury retail space availability,” he adds.

Besides, with two-thirds of the country’s shopping stock currently located in tier-I and tier-II cities, retailers and developers are also gradually shifting their focus towards tier-III cities, which are expected to have about 100 new malls that are to be developed in the country over the next five years, say analysts.

While new retailers in India (both domestic and international) are still focused on major metros, expanding retailers and mall developers are now selectively focusing on tier-III cities, says another JLLM report. These markets, including Ahmedabad, Chandigarh, Ludhiana, Jaipur, Lucknow, Kochi and Surat, are witnessing strong growth in income and, more significantly, changing lifestyles and aspirations along with a fundamental shift in the consumer mindset.

Rental and lease values

With the sudden increase in the supply of retail space, and a reduced demand, there is a correction in the price of rentals. “Now, retailers have an upper hand over developers, which was not the case till recently,” says Mr Dungarwal.

While mall rentals are said to have fallen by 20-30 per cent in most of these cities, the number could be even higher at 45 per cent in some cases, some say. “Tenants are now trying to re-negotiate rentals and are asking for about 20-30 per cent reduction,” says Mr Dungarwal. There has been correction where the mall has not been doing well and retailers have already left or are considering vacating the space.

Mr Pani says that almost all transactions now feature the revenue-sharing options rather than full rental, “since this is now the only way of getting retailers interested in occupancy”. Says Mr S. Raghunandan, CEO – Retail, Prestige Group, which owns and operates the Forum Mall in Bangalore, “Occupancy rates have to be made more affordable and this can only be done through the revenue-sharing rental model.” Prestige has followed the revenue-sharing model right from the beginning when it launched the Forum Mall five years ago. In Mr Raghunandan’s view, this works well for both the mall owner and the tenant “in both good times and bad times.”

The future

Most of the tier-III markets have also started to show signs of maturing and a shift in momentum, says the JLLM report. Demand for space by retailers is starting to slow in some markets as a result of a better understanding of local consumers and a realisation that standardised formats will not necessarily work in all markets. Developers in some of these markets now suffer from the effects of their overly optimistic assumptions on retail space absorption. Ahmedabad, one of the largest and most active retail markets, is currently suffering from a short-term oversupply of retail space, which has led to a dampening of market transactions and a correction of rental levels.

Mr Dungarwal agrees that the tier-II and tier-III cities did see an upsurge in rentals, but have been more stable on the rentals. “There is, however, a small correction of about 10-20 per cent in the new space availability,” he adds.

The JLLM report says, “While developers, occupiers and investors should be astutely aware of the shift in market momentum, we believe this to be a short-term phenomenon rather than a reflection of a broader long-term trend in tier-III markets.” But matters on India’s retail front will only look up after a convincing economic revival and return of confidence and positive sentiments, says Mr Pani. This could take anywhere between 18 and 24 months.

Source : http://www.thehindubusinessline.com/iw/2009/03/15/stories/2009031550661500.htm

In crisis, discount schemes for home buyers

Calcutta, March 14: Some city developers are offering to pay a part of the interest on buyers’ home loans to revive demand, hit by the economic slowdown.

Four leading developers have unveiled “subvention schemes” under which they pay their customers’ pre-equated monthly instalments (pre-EMIs) to banks or housing finance companies for an agreed period.

The pre-EMI represents only the interest on the loan taken. Unlike the EMI, which the buyer starts paying later, it does not include any component of the principal.

In two housing projects, the developers — Eden City and Ruchi Group — are offering to pay the pre-EMI from the time the buyer books the flat till he takes possession. With the average period for this being about 30 months, the scheme in effect offers the buyer a 10-12 per cent discount on the flat’s price.

A third project — Calcutta Riverside, an upcoming township at Batanagar — is offering to pay the pre-EMI for a fixed 12 months, the discount working out to 3 to 5 per cent.

Keppel Land, a Singapore developer, too has announced a one-year pre-EMI offer in addition to its older incentive scheme for buyers: free travel and lodging during a three night-four day trip to Singapore for two.

Several more developers are expected to come out with their own subvention packages. Developers in western and northern India have been offering such incentives but this is a first in Calcutta.

The sales slump in the city shows in Calcutta Municipal Corporation statistics: it sanctioned 941 buildings in October-December 2007 but only 225 in the same period last year.

“We are trying to create a buzz around the (subvention) scheme in the hope of reviving the market,” Indrajit De, managing director of Eden City, said.

Eden is offering its subvention scheme for 200 flats in its upcoming project at Maheshtala, after sales fell to a fourth of the early 2008 figure. The Ruchi Group is making the offer on its new project, Active Acres, off EM Bypass.

“It’s a limited-period offer. There are 450 units on offer now, but not all of them will get this scheme. We have to see how the market responds,” a Ruchi official said.

Ambuja Realty, owned by Harshvardhan Neotia, is planning a subvention scheme for its Uphaar project on EM Bypass, where 150-odd flats will be on offer. “We are yet to decide the tenure,” an official said.

“Subvention schemes are a better instrument to prop up demand than reducing the price, which only increases buyers’ expectation for more rate cuts, resulting in fewer sales,” said Abhijit Das, city head of the property consultancy, Jones Lang LaSalle Meghraj.

An HDFC official said the schemes made equal sense for the developers, buyers and housing finance companies.

While the builder sells fast, the buyer too gains, whether he is an investor who would later sell the flat or house, or an end-user who will live there.

For the end-user, the scheme amounts to a straight discount. “It will be of most benefit to those who now live in rented houses and find it tough to pay their monthly rent and pre-EMI simultaneously,” the HDFC official said.

Under a subvention scheme, an investor pays only 15-20 per cent of the property value when he books it. He then pays nothing till possession, waiting for a rise in prices to sell it. Without the scheme, he may be paying 10-12 per cent more to hold the flat.

Finance companies stand to gain because higher sales means more demand for home loans. Just to be safe, they plan to take the total pre-EMI from the developer at one go.

Pradeep Sureka, president of builders’ body Credai (Bengal), said the real estate market was keenly watching the development. “If they (developers offering the schemes) prove successful, others will surely follow,” he said.

The HDFC official, however, said housing finance companies would only work with top-notch developers. “Don’t expect the neighbourhood builder to offer such schemes.”

Source : http://www.telegraphindia.com/1090315/jsp/nation/story_10672472.jsp

Ambuja Realty to Start 3 New Projects in Bengal

Notwithstanding the slowdown, city-based developer Ambuja Realty plans to unveil three new real estate projects in West Bengal this year, a top company official says. The projects comprise a 150-room hotel, a mall and an IT park at Rajarhat on the northeastern fringes of the city. “We will invest Rs.250 crore (Rs.2.5 billion) for building the hotel and the mall, and Rs.300 crore (Rs.3 billion) for Ecospace,” Ambuja Realty chairman Harshavardhan Neotia said.

The construction work for the mall and the hotel started in 2006 and for the IT park, called Ecospace, in 2007. The IT park is being built in association with Bangalore-based corporate real estate developer RMZ Corp. “All these projects will be ready in another four to five months,” Neotia said. Asked how the company is planning to beat the current global economic slowdown, he said: “Metaphorically, by working hard. That’s the only thing one can do. There is no formula. There is no prior knowledge of how things will turn out.”

However, though the company is not dropping any project on account of the economic slowdown, it will go slow on new and upcoming projects, he said. “We can’t drop any project that is already under way. It will be suicidal. We have decided certainly not to do new projects till the downturn fades.” The company has put on hold plans for building three luxury hotels in the northern part of the state at Makaibari in Kurseong, Siliguri (both in Darjeeling district) and in Gorumara forest of neighbouring Jalpaiguri district.

“Now, the projects are on hold for two reasons. There are some political problems in the hills and also due to the economic crisis,” Neotia said. The hills are witnessing a political movement for a separate Gorkhaland state to be carved out of Darjeeling district besides parts of Jalpaiguri district. “The projects are on hold till we get a better sense of how the hill problems will be. As soon as we have a little clarity, we will take stock and proceed in that direction.” Ambuja Realty is engaged in construction in residential and commercial sectors, which includes IT parks, retail malls, special economic zones, theme parks, hotels and banquets, and education and healthcare centres.

Apart from these, Neotia said there are at least three projects – an IT park and hotels – for which the company has got the land clearances from the government. Regarding the long-term investment plans, which the company earlier put at Rs.5,000 crore (Rs.50 billion) for the coming five years, he said long-term investment plans would be reviewed. “As real estate and property prices have fallen, what was earlier targeted at Rs.5,000 crore may come down to Rs.4,000 crore (Rs.40 billion) now,” he said. The company is also building a retail and residential complex at Raipur in Chhattisgarh, townships in Amritsar and Mohali in Punjab, and near Nagpur in Maharashtra.

http://www.indianrealtynews.com/real-estate-india/kolkata/ambuja-realty-to-start-3-new-projects-in-bengal.html

Luxury residential market sees over 10% dip in prices

NEW DELHI: The luxury and high-end apartment market in the top metros is now feeling the heat of depressed sentiments. The capital values of all  high-end residential localities in major cities have witnessed a dip of 10% to 25% in the last three months.

The posh markets such as Golf Links, Amrita Shergil Marg,Vasant Vihar, Shanti Niketan,West End in Delhi, Napean Sea Road, Pedder Road, Breach Candy, Malabar Hills in Mumbai and Richmond Town, Lavelle Road, Cunningham Road in Bangalore and Alipore Park Road, Ashoka Road and Belvedere Road in Kolkata have witnessed a major dip in prices.

SundayET along with global real estate consultancy Cushman & Wakefield (C&W) did a study which has revealed that the demand in these micro markets witnessed a serious setback with constrained consumer spending in light of the downturn. Another study had earlier been done of the same markets in January 2009, which had shown a similar trend.

In fact, the prices in posh areas of Mumbai, such as Altamount Road, Napean Sea Road, Nariman Point and Churchgate, have gone down by 10% to 15%. But leading the pack is south Delhi which is seeing a major downturn in land values. In a recent transaction in Shanti Niketan, a 800 sq yd plot was sold for Rs 27 crore.

Earlier, the same plot could have fetched Rs 40 crore. At another upmarket area in South Delhi, Pansheel Park, a Rs 11 crore luxury apartment was sold at Rs 7.5 crore.

Says Shveta Jain, national head (marketing & investments, residential) Cushman & Wakefield India: “The beginning of 2008, saw a strong real estate market with luxury residential projects being launched by both established and new developers. In the last six months, demand witnessed a serious setback across markets in the country. Traditionally, these prime locations have been synonymous with superior social or economic status and immensely attractive for the address conscious community. But it seems that the demand in these markets has also witnessed a major slow down.”

In Bangalore, high-end projects in central locations of Lavelle Road, Off Palace Road, Off Cunnigham Road, Ulsoor Road, Richmond Road as well as Whitefield in the east recorded 15% to 20% drop in capital values. Prices in south central and south west Kolkata (Gurusaday Road, Alipore Park Road, Ashoka Road, Belvedere Road) have also dropped by 8% to 10% for premium projects in the last few months.

Says Vikram Sabharwal MD, SAB Infrastructure: “In the last five years, property prices in the posh area in metros increased by three to five times. Now there have been hardly any deals in posh areas in the price range of over Rs 5 crore. This is similar to the correction of 1996-97.”

Source : http://economictimes.indiatimes.com/News-by-Industry/Posh-markets-see-dip-in-prices/articleshow/4239929.cms

Emami Realty puts projects on hold, seeks bank, PE funds

A wholly-owned subsidiary of Emami Ltd Emami Realty has put on hold all projects and would look for financing primarily from banks and private equities once the market situation improves, a company official said.

The official said although the company had set aside Rs 100 crore for entering the real estate segment more funds would be required once the projects started to roll.

He said the company would primarily seek finance from banks and institutions.

“We will be also talking to private equity firms. But our first priority is bank finance,” the official said.

Emami Realty has land in places like Kolkata, Hyderabad, Coimbatore, Chennai, Ranchi and Jamshedpur.

In the present market conditions, no bank or institution would come forward to finance real estate projects, the official said, adding that what was more distressing was that there were no sales in the market.

Asked about the future outlook of the real estate development market,  he said it was very difficult to predict at the moment.  “Things will not improve immediately. It will take another 36 months.”

The official said the company was watching the market closely, at least for the next six months.

To a query relating to the future of real estate business of the Emami group, he no alternate plan had been chalked out so far.

The Emami group had been setting up IT parks, residential and commercial complexes at various locations where Emami Realty has land.

In Kolkata, the company has already set up the South City Mall and several premium residential complexes.

Source : http://www.business-standard.com/india/news/emami-realty-puts-projectshold-in-seeks-bank-pe-funds/14/33/56097/on

Free Gifts Fail to Lure Home Buyers

A recent survey by Delhi-based Makaan.com — a real estate portal run by the People Group — has revealed that 66% of Pune buyers have turned down the freebies. Called Me, My Home and Property Rates, the survey covered Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore and Pune. “Freebies do not sway a majority of home buyers. For them, the greatest value proposition is a lower per square foot rate than the prevailing one,” said business head of Makaan.com Aditya Verma. The study was conducted by Makaan.com from January 23 to February 10 by posting queries and searches on the website. Builders who offered hi-tech gadgets and other accessories to lure buyers agreed that the “gimmicks” have failed to pay off.

“Offers are not helping in any way as people are not interested in buying properties,” said Cubic Insignia and Krome Promoters and Developers managing director Nainesh Nandu. The company had announced a BMW worth Rs27 lakh, two kg gold or 0% interest on loan up to Rs2 crore with each purchase of its bungalow project on NIBM Road. Nandu said there has been a complete lull since this January. For Infrastructure Developers Engineers Builders (IDEB) from Bangalore with its project Springdale Properties at Wagholi, offers of gifting flashy cars has not worked.

“The response has not been encouraging,” said a sales manager at Springdale. The company had offered Hyundai Accent and Honda City with the purchase of flats and bungalows. Pune-based Mont Vert Developers too announced gifts like air-conditioned rooms and LCD televisions. Director of Mont Vert Homes Manish Kaneria agreed that the response was not encouraging given the current low sentiments in the market.

Last week, Vijaydeep Associates from Pune announced a Chevrolet car with every purchase of its 2BHK flats at their project Deccan Gold in Kharadi. The company also offered a 1BHK flat free at Ambarnath near Mumbai for the sale of a 3BHK at its Pune site. Home buyers in Pune have not only shunned freebies but have also made a shift towards affordable housing with a large chunk of people looking for homes below Rs30 lakhs (85% respondents as per the survey). Many are waiting for a massive price correction in the coming months.

While Delhi and Mumbai has about 67% and 68% buyers waiting for the rates to fall, Pune topped with 82% of buyers looking for a reduction in real estate prices. “Responses to price correction were levelled across categories, people are aware of a considerable price correction in the markets and are therefore hopeful that real estate prices will undergo some correction,” the survey said. Among the 82%, 32% buyers want the prices to drop in the next three months, another 39% expect the prices to fall over the next three to six months. The survey has shown a clear mismatch between what home makers are offering and what buyers want today.

“It is time that developers start re-working the price strategies and come up with houses which are below the Rs30 lakh bracket,” Verma suggested. In Pune, the demand for high-end housing has fallen with only 14% people looking for houses in the Rs30-60 lakh bracket. “There are absolutely no takers for houses above Rs60 lakh,” he said. President of Promoters’ and Builders’ Association of Pune (PBAP) Lalit Kumar Jain, said, “It was known that such offers would not work with buyers in Pune as they want clean transactions. That is the reason why several builders who announced such schemes have now pulled them back.”

Source : http://www.indianrealtynews.com/real-estate-india/delhi/free-gifts-fail-to-lure-home-buyers.html