Bangalore realty sector fails to benefit from low-cost housing

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CASA BELLA GOLD – By Lodha gets unprecedented response

The largest & latest project by Lodha does a record 400 bookings in just 2 days of launch!

Mumbai, 29th October, 2009 – Following the success of Casa Bella – which saw over 2300 families become a part of the City of Dreams since its launch in March 2009, Lodha Group now introduces Casa Bella Gold. The project, Lodha Group’s largest initiative witnessed an unprecedented response from consumers with over 400 bookings and over 1100 families visiting the venue within just 2 days.

‘CASA Bella Gold – City of dreams’, set to offer a world class lifestyle in Dombivali and with several major infrastructure initiatives taken around the project, will make Dombivali the destination to be in. Located in Dombivali, on the Kalyan Shil Road, CASA Bella Gold is only 25 minutes drive from Thane and 15 minutes from Navi Mumbai, 6kms from Dombivali station and around 20 minutes drive from the proposed location of the new international airport. Additionally, the township is also close to many leading IT parks such as Dhirubhai Ambani Knowledge City, Millenium Business Park and Airoli IT Park. The township will be spread over 117 acres of land with Casa Bella Gold being the 2nd phase of development. These are 1, 2 and 3 BHK air conditioned apartments. The apartments are priced at Rs. 12.99 lac onwards for a 1 BHK, Rs. 18.53 lac onwards for a 2 BHK and 28.55 lac onwards for a 3 BHK.

Commenting on the overwhelming success of CASA BELLA Gold, R Karthik Senior Vice- President, Marketing , Lodha Group said, “The response to Casa Bella Gold is a testimony of the trust earned by the group and it will inspire us towards consistently exceeding customer expectations.” Mr. Karthik further said, “The focus of CASA Bella Gold is to offer an international and hassle free lifestyle to the residents of Dombivali and all this at an unbelievable price.”

CASA Bella Gold, an superior experience in Luxury Township living, is designed in clusters of majestic towers having 8 and 18 stories. The spacious air-conditioned apartments are immaculately planned with marble flooring in the living room, wooden flooring in the bedrooms and Spanish sanitaryware in the bathrooms. All this with spectacular views of the grand central square of the complex, the sprawling golf course and the river beyond.

The grand clubhouse spread across 30,000 sq. ft. will be one of the largest in Mumbai with two pools, a gym, multipurpose courts and a cricket pitch keep you healthy. In addition, a yoga pavilion, a café and a world-class ICSE school provides a comprehensive living experience to all. In addition to all the luxuries, the township offers abundant 24×7 power and water supply. Usarghar railway station is close by and a medical facility managed by the Hinduja Hospital takes care of any medical emergency. The vision of Lodha group is to create an urban development in Dombivali which will provide its residents all the comforts of a modern township. From playschool to international universities, medical centres to multi specialty hospitals, gardens to golf courses, small business offices to SEZ’s this development will have it all. And with the successful launch of CASA Bella Gold engrains the fact that it is one of the most preferred residential destinations in Mumbai and its suburbs providing a perfect blend of quality, luxury and value.

About Lodha Group

Established in 1980, Lodha Group is Mumbai’s premier real estate developer providing comprehensive residential and office space solutions across real estate categories and diverse consumer segments – from luxury garden residences in South Mumbai to large integrated townships in the suburbs, from thoughtfully designed office environments to private villa retreats. Headquartered in Mumbai, the group is currently developing in excess of 29 million sq. ft. of prime real estate spread over 38 projects.

The group continuously strives to exceed the expectations of customers through innovative, world-class solutions leading to several innovative ‘firsts’ to its credit – be it Lodha Bellissimo – Mumbai’s first “By invitation only” project which is the only Indian residential project amongst the top 1000 landscapes in the world, Lodha Luxuria –Mumbai’s first “Fully Automated Township” or Lodha Aqua – Mumbai’s first water inspired township. The group uses ‘brand’ as a differentiator and has developed itself as a pioneer of branded realty, delivering consistent brand experience across customer touch-points. The group has extended this philosophy to office spaces as well, where it was one of the first in India to introduce the concept of branded office spaces through its unique offerings: Lodha Excelus – Signature offices catering to front office requirements of large corporates, iThink by Lodha – the ultimate IT destination for large back office needs and the recently launched, Lodha Supremus – Signature boutique offices, targeted specifically at mid-sized businesses.

The group has been responsive to changing market situations and has dynamically realigned its project portfolio anticipating demand-supply mismatches in the market. To explore the untapped potential in ‘affordable segment’, the group created an entirely new residential category – Mid-Income Luxury. A new sub-brand ‘CASA by Lodha’ was created for this category, with essential quality and luxury endorsement, providing ‘right sized’ and ‘right priced’ products in Mumbai’s sub-urban locations. The integrated planning of Casa Bella, Mumbai’s largest single phase township development has been selected by the United Nations as one of the ‘Good Practices’ for 2009, which is deemed to have made outstanding contribution to improving the quality of life in their cities and communities. The launch of the Casa brand has met with huge success and more than 3000 apartments have been sold in the last 6 months. The group has strong systems and process orientation, including research and benchmarking and uses advanced technologies to ensure optimized solutions.

Lodha collaborates with leading professionals and suppliers; partnering with Aedas, OveArup and Sasaki for architectural innovations; Poggenpohl, Duravit and Kohler for internal fittings; Bang & Olufsen for home entertainment; SAP for technology platforms and Johnson Controls for facilities management, to deliver excellence in every aspect of development. With a focus on building a world class organization, the group has attracted top talent from premier B-school campuses, hired professionals from benchmark industries and built a proficient management team.

The group’s strong brand & execution capabilities have attracted the best financial investors from across the globe. According to the JP Morgan Property Report 2008, Lodha Group was ranked second in the list of ‘most sought after for PE investment in the realty sector’. Also selected as one of India’s top 10 builders by Construction World, the group has consistently delivered luxury lifestyles through innovative solutions, not just by building structures but by building better lives.

Beyond being a real estate developer, the group has been a socially responsible corporate focusing on education as the best medium to enrich society. The group has recently expanded into Hyderabad with the launch of Lodha Bellezza, a super-luxury residential project.

Source:http://www.prlog.org/10393433-casa-bella-gold-by-lodha-gets-unprecedented-response.html

Developers Raise Property Prices- Plan to Give Discounts During Dussehra-Diwali

The last fortnight of Pitrupaksh, a period considered inauspicious for buying a new home, had few property transactions as usual but that did not stop developers from hiking their rates for projects under construction. Real estate players say this is a tactic to lure buyers with discounts during Dussehra-Diwali. “It is nothing but a strategy to make the festive pricing look attractive. Even new launches that were reasonably priced have seen a rise in prices,” said Pankaj Kapoor of the real estate research agency Liases Foras.

The 15-day Pitrupaksh phase ended Friday. “In North and West India, this period is considered inauspicious for buying a home or starting anything new. Sales normally pick up after Pitrupaksh between Dussehra and Diwali,” said Aditi Vijayakar, director of residential services at Cushman & Wakefield. Developer Sunil Mantri, vice president of the Maharashtra Chamber of Housing Industry (MCHI), ruled out substantial discounts during Diwali. He pointed out that prices have been rising anyway. “After a 30 to 40 per cent fall in rates, overall the market has stabilised and prices have been increasing since June. There might be festive period add-ons and marginal discounts on prices to attract sales, but nothing substantial,” he said.

Overall, between July and mid-September, prices of several projects including relatively affordable ones have been jacked up. For instance, the average rates at Rustomjee’s Global City in Virar, around Rs 1,900 per sq ft in July 2009, is Rs 2,750 per sq ft today. Flats at HDIL’s Premier Residences at Kurla, sold for about Rs 5,250 per sq ft in July, cost Rs 6,151 per sq ft today. Many other projects such as Kalpataru Aura at Ghatkopar, Lodha’s Casa Bella at Dombivli, Ackruti Greenwoods in Thane, to name a few, have each seen a rate increase of Rs 200 to Rs 1000 per sq ft.

Source : http://www.indianrealtynews.com/real-estate-trends/developers-raise-property-prices-plan-to-give-discounts-during-dussehra-diwali.html

Eastern suburbs to be Mumbai’s next commercial hub

Kurla is dotted with narrow, dingy bylanes and isn’t exactly considered a tony address in the commercial capital of the country. But that could change soon.

Kurla is set to add over 6 million square feet (sq ft) of swanky office space and around 3 million sq ft of mall space shortly. Leading the charge are developers such as Phoenix Mills, Kohinoor, HDIL and others.

This upcoming office space is three times the 2 million sq ft office space at Nariman Point, the city’s main office hub, and half of Bandra Kurla Complex, the secondary business district.

There’s more. R City, the biggest mall in the city covering 1.25 million sq ft, is up and running in the eastern suburbs of Ghatkopar, which houses global brands such as Marks & Spencer and Apple i-store, among others.

And the Vikhroli-Kanjur Marg belt, which is in close proximity to Hiranandani’s Powai township, has added nearly 5 million sq ft of office space, with new developments by Lodha, HCC, Akruti and others vying with each other for new clients.

Last year saw one of the biggest property deals in Mumbai when the National Stock Exchange bought 80,000 sq ft of office space from Unmesh Joshi-led Kohinoor City in Kurla, for Rs 120 crore (Rs 1.2 billion). NSE is expected to use the Kurla property for its operations, as its main office in BKC is not adequate for its operational requirements.

The hitherto low-profile eastern suburb of Mumbai, starting from Kurla to Thane on the Lal Bahadur Shastri Marg, is fast becoming the next commercial hub of the city with tony office complexes and new-age retail destinations, giving tough competition to its southern and western counterparts such as Nariman Point, Worli-Lower Parel and Bandra Kurla Complex, among others.

The reason: Easy accessibility from most parts of the city, a good road network, lower property prices than the western and southern suburbs and availability of large tracts of land from now-defunct mills.

“After 2003, the only region that saw rapid growth is the eastern suburbs because of land availability and cheaper property prices. In 2003, the average property price in the eastern suburbs was less than Rs 2,000 a sq ft, while the western suburbs fetched Rs 3,000 a sq ft,” Pankaj Kapoor, chief executive of Liases Foras, a realty research firm, said.

Lower property prices have played a major part in the growth of the eastern suburbs. The new office complexes in Kurla charge rents of Rs 100-150 per sq ft compared to Rs 300-325 at BKC, which is just a 15-minute drive from Kurla.

Outright sale prices at BKC are Rs 35,000 a sq ft, against Rs 10,000-15,000 in Kurla.

Though home prices in this belt have nearly doubled in the last four years, they are still 30 per cent lower than those in their western counterparts, property consultants said.

“Since many suburbs such as Powai, Bhandup, Mulund, Thane and others have come up very fast, it makes sense for companies to set up offices there. This belt is also becoming a destination for firms that want to move from BKC and Nariman Point for lower rentals,” said Pawan Swamy, managing director – West India, Jones Lang LaSalle Meghraj, an international property consultant.

Developers agree. Atul Ruia, managing director of Phoenix Mills said, “Where else in Mumbai would you get land to develop large-scale projects? I think this belt will become a hotbed for development projects.”

Ruia should know, as his company is investing around Rs 600 crore in its 25-acre Phoenix Market City project on LBS Marg in Kurla, which will see 1.7 million sq feet of office space, a 2 million sq feet mall and a 220-room hotel.

Lower property prices have played a major part in the growth of the eastern suburbs. The new office complexes in Kurla charge rents of Rs 100-150 per sq ft compared to Rs 300-325 at BKC, which is just a 15-minute drive from Kurla.

Outright sale prices at BKC are Rs 35,000 a sq ft, against Rs 10,000-15,000 in Kurla.

Though home prices in this belt have nearly doubled in the last four years, they are still 30 per cent lower than those in their western counterparts, property consultants said.

“Since many suburbs such as Powai, Bhandup, Mulund, Thane and others have come up very fast, it makes sense for companies to set up offices there. This belt is also becoming a destination for firms that want to move from BKC and Nariman Point for lower rentals,” said Pawan Swamy, managing director – West India, Jones Lang LaSalle Meghraj, an international property consultant.

Developers agree. Atul Ruia, managing director of Phoenix Mills said, “Where else in Mumbai would you get land to develop large-scale projects? I think this belt will become a hotbed for development projects.”

Ruia should know, as his company is investing around Rs 600 crore in its 25-acre Phoenix Market City project on LBS Marg in Kurla, which will see 1.7 million sq feet of office space, a 2 million sq feet mall and a 220-room hotel.

Though the suburb is connected by LBS Marg, the Eastern Express Highway along the way has improved connectivity significantly, experts said. The Rapid Bus Transit System, with its dedicated bus lines on the express highway, will ease the traffic on it.

Phase I of the Mumbai Metro project from Ghatkopar to Versova, scheduled to be completed by 2011, is expected to give a fillip to the connectivity of the eastern and western suburbs.

The subsequent phases, which will be completed in 2016, are expected to boost the accessibility of these suburbs. Phase II of the Mumbai Metro involves a 12.4 km stretch between Ghatkopar and Mulund and Phase III involves a 19.5 km stretch between BKC and the Kanjur Marg via Airport.

The plans of six-laning the Central Railway tracks from Chhatrapathi Shivaji Terminus to Thane is also expected to ease the train commute on the eastern suburbs.

Though developers are bullish about commercial rates shooting up soon, with demand for commercial properties coming back, real estate analysts are wary of the eastern suburbs going the way of the western and central suburbs.

“We expect rents to go up almost four times to Rs 400 a sq ft in the next three years. The rents would have gone beyond Rs 200 by now in places like Kurla but for the economic slowdown,” said Atul Modak, project Head, Kohinoor City, in Kurla, which will have 900,000 sq ft of commercial space.

“Commercial real estate is still a major concern because there is a huge commercial supply and demand has not picked up significantly as the economy is still not doing well enough,” said Pankaj Kapoor, chief executive of Liases Foras, a realty research firm.

Source : http://business.rediff.com/slide-show/2009/sep/11/slide-show-1-eastern-suburb-to-be-mumbais-next-commercial-hub.htm

Mumbai Developers Advise to Invest in Residential Property

Mumbai’s realtors claim this is the best time to invest in residential apartments as prices have touched the bottom of the curve. “Realty prices will only rise again and the best time to invest is between September and December,” Hiranandani Group of Companies managing director Niranjan Hiranandani said on Monday while addressing a real estate meet. It was organised by Times Property, which launched its annual property event that would come off from August 17 to 24.

Hiranandani said real estate was the best investment. “If you are looking at a five-year cycle and invest in real estate, then you are sure to make good profits,” he said. Lodha Group director Abhisheck Lodha agreed: “Prices will increase slightly but will stabilise and investing in property, especially from now to December, is favourable. The real estate sector is a tortoise but a stable tortoise.” The panelists felt that the effects of the downturn has not hit India that hard because of its resilient economy.

“A great deal of agility has come into the market now. We are banking on the around 60% of the population of Mumbai that do not own their own homes and who are looking out for their first homes,” said Amit Bhagat, CEO and managing partner ASK Property Investment Advisors.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai-developers-advise-to-invest-in-residential-property.html

‘Best time to buy real estate’

MUMBAI: Mumbai’s realtors claim this is the best time to invest in residential apartments as prices have touched the bottom of the curve. “Realty  prices will only rise again and the best time to invest is between September and December,” Hiranandani Group of Companies managing director Niranjan Hiranandani said on Monday while addressing a real estate meet. It was organised by Times Property, which launched its annual property event that would come off from August 17 to 24.

Hiranandani said real estate was the best investment. “If you are looking at a five-year cycle and invest in real estate, then you are sure to make good profits,” he said.

Lodha Group director Abhisheck Lodha agreed: “Prices will increase slightly but will stabilise and investing in property, especially from now to December, is favourable. The real estate sector is a tortoise but a stable tortoise.” The panelists felt that the effects of the downturn has not hit India that hard because the of its resilient economy. “A great deal of agility has come into the market now. We are banking on the around 60% of the population of Mumbai that do not own their own homes and who are looking out for their first homes,” said Amit Bhagat, CEO and managing partner ASK Property Investment Advisors.

Source : http://timesofindia.indiatimes.com/news/city/mumbai/Best-time-to-buy-real-estate/articleshow/4895369.cms

Developers relaunch, resize luxury housing

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A Bangalore developer has chosen to go the other way.

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

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

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

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

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

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

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

Big-ticket land buys on realty radar again

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Real Estate Developers have stopped Discounts on Properties

Developers in India have stopped offering discounts on properties and in some cases are even increasing prices as demand rises.

Rising sales are also prompting some developers to return to the luxury end of the real estate market which had stalled in the economic downturn.

‘Prices are likely to inch upwards in the coming months in some markets,’ said Kumar Gera, chairman of the Confederation of Real Estate Developer’s Association of India.

But he added that even an increase in prices will still leave many developments cheaper than they were at the peak of the market a year ago. He estimated that the property crash saw prices fall 25 to 30% but proposed increases in coming months would be around 10 to 15%.

The prices increases vary. Unitech has increased prices marginally, by some 2% in its Gurgaon projects but Mumbai based developer Lodha Group has upped prices by 10 to 15%. A Lodha spokesman confirmed that prices had gone up in luxury projects launched in March. ‘We have marginally increased prices every month for these projects since their launch. But the market is in a good spot and the response is still good,’ said director Abhisheck Lodha.

Bangalore-based firm Brigade Enterprises cut its prices by 15% in April but has now increased them by 3 to 5% and said that it plans to continue doing so at regular intervals. ‘We are hoping that in one year’s time, prices will be back to the peak levels of 2007 to 2008,’ said chairman and managing director M.R. Jaishanker.

However, discounts through brokers have not yet disappeared from the market. Developers have increased the commission offered to brokers from 3% maximum to 5 to 6%. Brokers in turn are offering a discount of 1.5 to 2% on the price of property to buyers.

‘These are the same measures developers and brokers adopted to create a price bubble during the boom years. Demand has not risen to an extent that it can fuel a price increase,’ said S.G. Maheshwari, a Mumbai-based property consultant.

Aditi Vijayakar, residential executive director at property consultants Cushman and Wakefield is not convinced the market will carry the price increases. ‘Right now it is a fairly confused market. Rates have more or less bottomed out but there needs to be substantial amount of sales before buyers are convinced price increases are justified. I think the real estate market will be flat for some time,’ she said.

Source : http://www.indianrealtynews.com/real-estate-india/real-estate-developers-have-stopped-discounts-on-properties.html

Realtors cash in on the great Indian affordable home rush

A fortnight ago, Jaypee Greens started bookings for its housing project — Aman — at the 70-acre residential township on the Greater Noida Expresssway. All the 3,000 flats, priced at Rs 2,100 a sq ft, were sold out by the first day. Exactly a year ago, the Jaypee Group company was offering flats along the same expressway for Rs 4,500-6,000 a sq ft.

Two days later, another Delhi-based developer, BPTP, announced that it had received bookings nearly four times more than its offer of 1,000 flats at its 1,500-acre township at Faridabad.

Welcome to the great Indian home rush at a time when the glitter of the premium segment has faded. Real estate companies are now going to the other extreme and falling over each other to offer affordable housing at a price range of Rs 5 lakh to Rs 50 lakh.

The varied pricing is a function of affordability being a relative term, depending on the location. For instance, a Rs 50 lakh apartment in Mumbai is considered affordable housing. In a city like Nagpur, the same price will qualify for premium housing. There is no confusion, however, with the huge target consumer base: 23 million Indians earning at least Rs 5,000 a month who do not own a house but aspire to do so, according to a study by Asish Karamchandani, CEO of Monitor India, a management consultancy firm.

That’s a good enough reason for Unitech’s GM (Corporate Planning) R Nagaraju to say the company would be “churning out affordable flats just like a factory produces goods”.

The country’s second-largest developer has shelved all premium housing projects for now. Poor response from buyers also prompted the company to recently convert its luxury project, Unitech Grande in Noida, to a mid-income project.

If Jaypee and BPTP hit the jackpot in the National Capital Region, others weren’t far behind. The Lodha Group, for example, has broken the sub-Rs 2,000 per sq ft price barrier in Mumbai by launching a 6,500 unit affordable home project at Dombivli at Rs 1,998 a sq ft. The integrated township will be spread over 125 acres with 3,500 houses.

The scene is the same elsewhere in the country. Bangalore-based CSC Constructions has launched three projects in the IT city, offering 2,000 apartments at Rs 5-13 lakh. Encouraged by the response, CSC has six more such projects in the pipeline.

Chennai hasn’t escaped the low-cost housing bug either. A subsidiary of Puravankara Projects, for example, sold 2,500 such homes in the Tamil Nadu capital within days and is now planning to develop 60 million sq ft of such properties over five years across five cities.

There are no firm estimate of the total number of such affordable flats on offer, but back-of-the-envelope calculations show top developers such as DLF, Unitech, HDIL and others are planning over 55 million sq ft of new launches this financial year, around 90 per cent of their total number of new projects.

According to a study by PropEquity Research, 74 per cent of residential apartment sales in Mumbai in the first quarter of 2009 came from the low-cost segment. The trend was the same in Gurgaon and Chennai, too, where the corresponding numbers were 60 and 58 per cent. In all these cases, the apartment sizes were reduced and the average prices corrected 15-25 per cent, PropEquity data show.

This shift towards low-cost or affordable housing started after home sales fell up to 70 per cent in the early part of this calendar year from their peak in 2007-08. “People were earlier going for aspirational houses, as their salaries were going by 20 to 25 per cent every year. But now they have realised that salaries are not going to go up any time soon and those who have reached the top levels have already bought houses,” said Anshul Jain, chief executive officer, India, DTZ International Property Advisors.

Source : http://www.business-standard.com/india/news/realtors-cash-inthe-great-indian-affordable-home-rush/360492/

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/

Signs of Revival for Real Estate India

When Mumbai-based developer Nahar Group of Companies opened booking for two new buildings at its Nahar Amrit Shakti project in Powai, a central suburb in Mumbai, it was surprised by the demand it received from buyers. Nahar says it managed to sell 150 of the 320 flats it had on offer on the second day of booking itself. “We have now sold close to 300 flats,” says Manju Yagnik, Nahar’s vice-chairperson. “We never expected so much demand.”

What worked in Nahar’s favour was what the developer calls “compact” houses of 925-975 sq. ft and payment terms that allowed buyers to pay one-fifth the cost of the flats on booking and 80% on possession. The houses were priced competitively at Rs52-58 lakh in an area where the average price hovers between Rs5,500 and Rs7,500 per sq. ft. Developers, who had frozen the launch of new projects till end-2008, have in the last few months launched several projects that suit mid-income budgets—clubbing them under an all-inclusive “affordable” housing segment. Realty firms say such projects are seeing good demand. The experience of top developers such as DLF Ltd, Unitech Ltd and Housing Development and Infrastructure Ltd, with have offered flats at prices lower than prevailing market rates in the past three months, suggests that demand is spreading to new projects.

DLF launched Capital Greens in west Delhi at an inaugural price of Rs4,500-5,500 per sq. ft and the project, consisting of 1,356 flats, has been sold out, it says. Similarly, Unitech launched Uniworld Garden II in Gurgaon, south-east of New Delhi, at prices between Rs28 lakh and Rs40 lakh a flat. The project of 750 was sold out in 45 days, the company says. Encouraged by the response, Unitech has launched another project, The Residences, also in Gurgaon, with prices at Rs35-45 lakh. It has so far sold 180 of 200 flats in that project. Parsvnath Developers Ltd launched a 510-flat project in Lucknow in March, pricing each flat between Rs12.5 lakh and Rs24 lakh; around 480 has been sold out, the firm says. A price cut of up to 30% by developers, launch of projects at key locations and a reduction in home loan rate seems to be attracting buyers for some projects.

R. Karthick, vice-president, marketing, of Lodha Group, a Mumbai developer, claims that his company has sold nearly 2,500 flats in five months. Lodha has launched five projects in suburban Mumbai, under the mid-segment brand Casa, priced at Rs30-35 lakh. Lodha, which is typically known for its luxury projects in Mumbai, launched this brand after seeing slow demand in the last few months of 2008. Puravankara Projects Ltd has said it has 600 flats in its maiden budget housing venture, Provident Cosmo City in Chennai, since its launch in March. Three-bedroom flats there are priced at between Rs16.9 lakh and Rs18.9 lakh. “The sales in the Provident project were so good that we are planning to launch 4,200 flats in the same category in north Bangalore now and expand further,” says Ravi Ramu, director, finance, at the Bangalore-based firm.

Some experts say though demand is slow to return to the market, it is likely to be more sustained this time because demand for housing is from buyers who intend to live in the flats rather than those buying them as investments. “The good news is that it is mostly end users who are buying,” says Shruti Gupta, head of real estate consultancy Hamptons International’s India unit. Lodha said it sold 600 units in 10 days in one of the projects, Casa Bella, in March in Mumbai’s Dombivali area. “There may be some investors, but 63% of the buyers are mid-management professionals and 7% are self-employed,” says Karthick. Anshuman Magazine, managing director of realty consultant CB Richard Ellis, says: “I will not say that sales are picking up, but the thaw has started to happen. A developer who has a project at a lower rate has been able to get buyers.” The first quarter of the calendar year has brought some relief for developers, who are finally seeing some demand compared with last year, when buyers had virtually disappeared.

Mumbai-based Akruti City Ltd told Reuters on 15 May that it has seen sales going up by 30% in the first quarter of the current fiscal after a near 80% fall in the last two quarters of the year to 31 March. Magazine agrees that it is the pricing and the location that are bringing back buyers into the market. “Developers have repositioned their projects,” says Magazine. “They are launching projects at good locations to halfway good locations.” Firms such as DLF, India’s largest realty company by market value, now plans to focus on city-centric and mid-income residential projects, and plans to launch 17-18 million sq. ft of residential projects in fiscal 2010. Earlier, most developers focused on developing luxury homes in far-off locations. Lower interest rates for housing finance—down from 12% in fiscal 2008 to 8% in recent months—have helped.

The fact that developers are offering construction-linked payment plans is a huge incentive for buyers, says Sanjay Sharma, managing director of Gurgaonscoop.com, a real estate brokerage. “Buyers now feel assured that they would not need to make payment if the construction is stalled,” says Sharma. A spokesman for mortgage lender Housing Development Finance Corp. Ltd said enquiries and applications for home loans have been increasing every month. In the fourth quarter of last fiscal year, “loan approvals have gone up by 21% and loan sanctions have increased by 16%” from the year-ago quarter, the spokesman said. “There is sporadic demand for projects though it is far from a revival.” HSBC Holdings Plc.’s India operations does not see a significant uptake in the home loans sanctioned in the last few months, according to Ravi Subramanian, head, retail assets and cards, at the lender.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai/signs-of-revival-for-real-estate-india.html

Thane: Take the plunge in City of Lakes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Properties in Mumbai Remain Unsold Despite Low Price and Discount

Property prices across Mumbai have dropped by 30-40 per cent from its peak rates. Realty research figures indicate that the average property prices in Mumbai, Thane and Navi Mumbai (Mumbai Metropolitan Region) have come down from its peak of Rs 8,136 a sq ft in June 2008 to Rs 4,607 a sq ft in March 2009. With 420 ready and 1,349 under-construction projects in the MMR, the mounting inventory has led to a more pronounced price cut in the latter category.

Eager to tide over the absolute slack, several developers are advertising limited time discounts. HDIL has done the same at its Kurla and Andheri projects, Nirmal Lifestyle at its Mulund project, Lodha at its Dombivli project as well as a slew of others with big-sized projects in Thane and Navi Mumbai. They urge buyers to go in for a panic buying till the offer lasts, claiming that there will only be an upward movement in prices hereafter. This is a far cry from the initial days of the slump, when developers dangled sweeteners like stamp duty waivers or a free car and electronic goods, ruling out any reduction in rates.

However, realty players say that with banks tightening the noose around developers, the fate of many under-construction projects is unsure. Real estate rating agency Liases Foras estimates that about 50 per cent of the ongoing projects are doomed to either get stalled or get deferred. “All these projects that claim to offer flats at discounted rates for limited time only, are nothing but attempts to scare the buyers into buying their projects. Property rates are bound to fall up to 60 per cent. Not only are the developers starved for money, the buyers also have no money to spare. Also no buyer wants to put his money or risk taking a loan for buying an under-construction flat,” said Yashwant Dalal, president of Estate Agents Association of India.

He said the rates of even plush flats in prime areas such as Peddar Road have come down from a staggering Rs 1 lakh a sq ft to a range of Rs 60,000-35,000 a sq ft. In Bandra, it has dropped from Rs 25,000 a sq ft to Rs 14,000 a sq ft.” The prices in the area have fallen by 35 per cent from the peak rates of Rs 35,000-40,000 a sq ft.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai/properties-in-mumbai-remain-unsold-despite-low-price-and-discount.html

Falling property prices fail to lift sales

Mumbai Buyers tread cautiously even as developers offer discounts
Prabhadevi-based garment exporter Hashmukh Kapadia has been looking for a two-bedroom flat for more than a year now. The prices in the area have fallen by 35 per cent from the peak rates of Rs 35,000-40,000 a sq ft.

“I want to buy a new house as my family is growing and we need more space. But I find the rates for the completed flats still unaffordable. I can get a flat much cheaper in under-construction projects. However, it is too big a risk as you never know for how long the project can get delayed in these days,” the 73-year-old said.

Kapadia is among those home buyers who are treading cautiously despite a slash in property rates. On a steady descent, the property prices across the city have dropped by 30-40 per cent from its peak rates. Realty research figures indicate that the average property prices in Mumbai, Thane and Navi Mumbai (Mumbai Metropolitan Region) have come down from its peak of Rs 8,136 a sq ft in June 2008 to Rs 4,607 a sq ft in March 2009. With 420 ready and 1,349 under-construction projects in the MMR, the mounting inventory has led to a more pronounced price cut in the latter category.

Eager to tide over the absolute slack, several developers are advertising limited time discounts. HDIL has done the same at its Kurla and Andheri projects, Nirmal Lifestyle at its Mulund project, Lodha at its Dombivli project as well as a slew of others with big-sized projects in Thane and Navi Mumbai. They urge buyers to go in for a panic buying till the offer lasts, claiming that there will only be an upward movement in prices hereafter. This is a far cry from the initial days of the slump, when developers dangled sweeteners like stamp duty waivers or a free car and electronic goods, ruling out any reduction in rates.

However, realty players say that with banks tightening the noose around developers, the fate of many under-construction projects is unsure. Real estate rating agency Liases Foras estimates that about 50 per cent of the ongoing projects are doomed to either get stalled or get deferred.

“All these projects that claim to offer flats at discounted rates for limited time only, are nothing but attempts to scare the buyers into buying their projects. Property rates are bound to fall up to 60 per cent. Not only are the developers starved for money, the buyers also have no money to spare. Also no buyer wants to put his money or risk taking a loan for buying an under-construction flat,” said Yashwant Dalal, president of Estate Agents Association of India.

He said the rates of even plush flats in prime areas such as Peddar Road have come down from a staggering Rs 1 lakh a sq ft to a range of Rs 60,000-35,000 a sq ft. In Bandra, it has dropped from Rs 25,000 a sq ft to Rs 14,000 a sq ft.” The prices in the area have fallen by 35 per cent from the peak rates of Rs 35,000-40,000 a sq ft.

“I want to buy a new house as my family is growing and we need more space. But I find the rates for the completed flats still unaffordable. I can get a flat much cheaper in under-construction projects. However, it is too big a risk as you never know for how long the project can get delayed in these days,” the 73-year-old said.

Kapadia is among those home buyers who are treading cautiously despite a slash in property rates. On a steady descent, the property prices across the city have dropped by 30-40 per cent from its peak rates. Realty research figures indicate that the average property prices in Mumbai, Thane and Navi Mumbai (Mumbai Metropolitan Region) have come down from its peak of Rs 8,136 a sq ft in June 2008 to Rs 4,607 a sq ft in March 2009. With 420 ready and 1,349 under-construction projects in the MMR, the mounting inventory has led to a more pronounced price cut in the latter category.

Eager to tide over the absolute slack, several developers are advertising limited time discounts. HDIL has done the same at its Kurla and Andheri projects, Nirmal Lifestyle at its Mulund project, Lodha at its Dombivli project as well as a slew of others with big-sized projects in Thane and Navi Mumbai. They urge buyers to go in for a panic buying till the offer lasts, claiming that there will only be an upward movement in prices hereafter. This is a far cry from the initial days of the slump, when developers dangled sweeteners like stamp duty waivers or a free car and electronic goods, ruling out any reduction in rates.

However, realty players say that with banks tightening the noose around developers, the fate of many under-construction projects is unsure. Real estate rating agency Liases Foras estimates that about 50 per cent of the ongoing projects are doomed to either get stalled or get deferred.

“All these projects that claim to offer flats at discounted rates for limited time only, are nothing but attempts to scare the buyers into buying their projects. Property rates are bound to fall up to 60 per cent. Not only are the developers starved for money, the buyers also have no money to spare. Also no buyer wants to put his money or risk taking a loan for buying an under-construction flat,” said Yashwant Dalal, president of Estate Agents Association of India.

He said the rates of even plush flats in prime areas such as Peddar Road have come down from a staggering Rs 1 lakh a sq ft to a range of Rs 60,000-35,000 a sq ft. In Bandra, it has dropped from Rs 25,000 a sq ft to Rs 14,000 a sq ft.”

Source : http://www.expressindia.com/latest-news/falling-property-prices-fail-to-lift-sales/439722/

Lodha Group Launches ‘Casa Bella’ – First Phase of the Largest Project in Dombivali

CASA BELLA, the largest and most ambitious integrated township project in Dombivali, by Lodha Group, India’s premier luxury real estate developers was launched today. Catering to the aspirational needs of the Indian middle class, the township will be spread over 125 acres of land and CASA Bella will be built over approximately 40 acres of land as an integrated residential township with 3500 residences under the first phase of development. The residential development will comprise of 11 clusters. CASA BELLA is planned with over 86% of open space. The residences will be available in 1, 2 and 3 BHK luxury. The apartments will be priced at 11.7 lac onwards for a 1 BHK, 14.9 lac onwards for a 2 BHK and 24.3 lac onwards for 3 BHK.

CASA, a sub brand of Lodha group has already made a mark for itself by selling over 1000 units under its multiple offerings, CASA Univis, Royale and Ultima within a couple of months. The focus of CASA brands is to provide optimal & best value by providing luxury living for middle income segment which has been unheard of. Gated communities, open spaces, parks, club, gym are just some of the initiatives to mention that have been provided through the brand CASA.

Commenting on the launch of CASA Bella, Mr. Abhisheck Lodha, Director – Lodha Group, said, “CASA Bella will bring combination of the quality, luxury and value to Dombivali. It will change the skyline of Dombivli and redefine the standards of living of its residents. It will be a mini city with all conveniences and utilities one can imagine all available within an integrated residential township. Project in Dombivali is the largest initiative by the Lodha group and will see planned development of 9000 acres. The township will be a complete self sustaining eco-system with a residential & commercial hub and world class amenities & infrastructure.”

‘CASA Bella – the city of dreams’ is the largest ever development project taken up in Dombivali and several major initiatives taken around the project will make Dombivali the destination to be in. Located in Dombivali, on the 4-lane Kalyan Shil Road, CASA Bella is only 25 minutes drive from Thane and 15 minutes from Navi Mumbai, 6kms from Dombivli station and around 20 minutes drive from the proposed location of the new international airport. The Usarghar station is located within the site which provides regular train service on the Central Line through connectivity to Diva Station on the Diva-Panvel line. In the future, it is proposed that the station will have direct connectivity upto VT.

Mr. R. Karthik, Senior Vice President-Marketing, Lodha Group said, “CASA Bella employs the expertise of the world’s best architects, designers and engineers to create lavishly proportioned homes of unparalleled comfort and lifestyle for all its residents within its universe. With state-of-the art medical facility, power supply for 24 hours, security systems with cutting edge technology, transportation facilities, Mumbai’s largest clubhouse spread over 50,000 sq. ft, retail mall with multiplex and school, the project in Dombivali will stand unrivaled in value it delivers and create an entirely new category of luxury homes within easy reach of the aspiring India.”

According to Mr. Kapadia, Director, Kapadia Associates, “CASA BELLA is a self contained, Integrated and a Lifestyle oriented township where people will feel proud to live in. It aims to be the most sought after property in the vicinity with excellent connectivity, concentration on social infrastructure, max utilization of space in a unique manner and contemporary architectural language to establish an identity for the project. The master plan has laid emphasis on open spaces, green clusters, recreational facilities and pedestrian friendly development with major amenities being located within a 7-10 min walking distance from the residential units.

The vision of Lodha group is to create an iconic urban development in Dombivali which will provide its residents all the comforts at their fingertips. From playschool to international universities, medical centres to multi specialty hospitals, gardens to golf courses, small business offices to SEZ’s this development will have it all.

About CASA
CASA – meaning ‘Home’ in Spanish earmarks a residential revolution in the mid-income segment benchmarking facilities that spell luxury available at benchmark pricing. As the leader in innovation in real estate, Lodha recently launched its sub brand ‘CASA’ to cater to the needs of the mobile, aspirational middle-class to have the best in life for themselves and their families, while ensuring security, comfort and value for money. With this brand, Lodha Group makes foray into creating the best quality and value realty in the mid- income segment by providing comprehensive housing solutions with high intrinsic value.

The first project through the sub-brand CASA is Univis at Ghodbunder Road. After the overwhelming success of CASA Univis, the Lodha Group launched a series of successful mid income luxury projects; CASA Royale, CASA Ultima at Thane and CASA Essenza at Dahisar.

About Lodha Group
Established in 1980, Lodha Group is a premier real estate developer headquartered in Mumbai. The Group is currently developing in excess of 27 million sq. ft. of prime real estate over 30 projects in and around Mumbai, from Nepean Sea Road to Dombivli, making it the largest developer in Mumbai and one of the largest in the country. The group is now expanding into Western and Southern India and recently kicked off their geographic expansion by launching Lodha Bellezza, an unparalleled super luxury residential project in Hyderabad and is soon expected to launch its first project in Pune.

In 2007, the Lodha Group received the largest ever FDI in the real estate sector in India. In addition, it works with leading financial Institutions, designers and product manufacturers to bring together the most premium offerings for its customers. The Group focuses on development of residences and office spaces in various formats including standalone projects, IT campuses, weekend retreats, townships and SEZs. From luxury garden residences in South Mumbai to large integrated townships in the suburbs, the group caters to diverse consumer needs across all segments. The Group currently employs over 1300 professionals. With a vision to build better lives, Lodha exceeds the expectations of customers through innovative, world-class solutions, thereby creating value and at the most opportune moment.

Source : http://www.newswiretoday.com/news/48108/

Lodha Group to invest Rs 500 cr in Mumbai suburban project

MUMBAI: Real estate developer, the Lodha Group on Wednesday said it will invest Rs 500 crore in the next 30 months for the development of 26 towers spread over 55 acres near a Mumbai suburb, Thane.

“We will invest between Rs 500-700 crore at our Thane property,” Lodha Group Director Abhisheck Lodha told reporters here. “The money will be raised through the sale of houses and bank finance,” he said adding that the company has tied-up with HDFC.

The Lodha Group helps in arranging finance for up to 90 per cent of the loan amount, he said. This is the company’s maiden entry into housing sector in the Rs 25-lakh plus range.

Earlier, it has been engaged in building houses costing more than Rs 50-lakh.

According to the company’s estimates, Mumbai and its surrounding areas have a demand of 17-crore sq ft each year for the next 10-years. Recently, Deutsche Bank had invested about $425 million in the Group. – PTI

Source : http://www.thehindubusinessline.com/blnus/27101905.htm

Builders now eye projects in Rs 20-lakh category

Mumbai: With the government announcing a Rs 20,000 crore fiscal stimulus package, including a package by PSU banks for home loan borrowers upto Rs 20 lakh, builders are conceiving more projects targeted at this segment.

The Lodha Group, for instance, is planning to launch two mid-income housing projects (between Rs 20 lakh and Rs 50 lakh) one each in Thane in Mumbai and beyond during the first quarter of the year 2009, Abhinandan Lodha, director, Lodha Group told FE. “Along with new development strategies, we will continue with the ongoing development of luxury residential projects as well,” he added.

Meanwhile, Mahindra Lifespaces is planning to enter into new land deals to launch mid-income housing projects (between Rs 20 lakh and Rs 40 lakh) in the suburbs in 2010. Pawan Malhotra, managing director & CEO, Mahindra Lifespaces said, “Since further drop in interest rates are expected and there is repeated change in markets scenario, we want to wait and watch and then launch mid-income housing package for home loan borrowers in categories over Rs 20 lakh.”

Niranjan Hiranandani, managing director, Hiranandani Constructions said, “We are now planning to develop affordable housing projects in Pune and Ahmedabad (between Rs 15 lakh and Rs 30 lakh for two and three BHK flats). Instead of Rs 20 lakh limit for home loan borrowers, PSUs should have had instead announced a package of Rs 30 lakh and Rs 50 lakh limit for the metroes. This is because in metroes, the target customer for mid-segment housing is in the income group of Rs 25 lakh and Rs 45.” Owing to the financial turmoil, developers such as Oberoi Constructions and DB Realty are offering new projects at 30% discounts. Nabil Patel, director, DB Realty told FE, “DB Realty has started a new premium affordable project at Kandivali West (in Mumbai) with an opening price of Rs 5,500 per sq ft, as compared to the prevailing market rate of Rs 8,000 in the area.”

Competitor, Oberoi too is offering new project at Goregaon East in western Mumbai for Rs 7,500 per sq ft, as compared to Rs 12,000 in ready flats. This indicates crash in prices to the tune of 35% to 40% in metroes.

Interestingly, developer Matheran Realty is soon announcing commencement of India’s first public private partnership for rental housing between MMRDA and Tanaji Malusar City TMC in Karjat.

Source : http://www.financialexpress.com/news/Builders-now-eye-projects-in-Rs-20-lakh-category/396472/

Lodha Group launches luxury villa project

Mumbai-Based realty player Lodha Group is now entering the residential seg­ment in Hyderabad. In spite of the ongoing slump in the real estate sector, the compa -ny is eyeing a turnover of Rs 900 crore from its first luxury villa project ‘La Bellezza’ in the dry.

The company also plans to expand into commercial and retail space in. two years. It has acquired land in the city to establish what it claims to be South India’s largest mall, which is expected to be launched in six months. Company officials however declined to share further details.

The company has tied up with HDFC, which will have a 40% share holding in the residential project.

“There is a huge appetite for dif­ferentiated projects for the top notch target audience. The down­trend in the realty sector will not affect us as our target audience comprises authentic buy­ers,” said R Karthik, senior vice-president (marketing), Lodha Group. The real estate developer acquired 12.9 acres in Cy-berabad in the city for Rs 280 crore in a government auction last year.

The first phase of the project will be complete by 2011-end. The initial phase includes 150 villas spread out across multiple towers of 45 floors each. A single villa of 4,761 sq ft, is likely to cost over Rs 2 crore. However, bookings for these villas are only by invi­tations. “We have done groundwork on the potential buy­ers that includes top level officials in Hyderabad.

The project is all about giving the best of socially interactive neighbours,” said Karthik. The Lodha Group has a land bank of 27 million square feet cur­rently under development in the country. The group has so far con­structed office spaces, IT campuses, weekend retreats, townships and SEZs in and around Mumbai.

Source:  The Economic Times

Lodha Group entering Hyderabad

The Lodha Group, a Mumbai-based realty company, is entering the Hyderabad market with an estimated Rs 800-crore ‘by invitation’ project. The focus would be on the luxury market segment.

Individual towers of 45 floors, with each floor housing one apartment of roughly 5,000 sq ft, would be offered to select people, said Mr R. Karthik, Senior Vice-President (Marketing). The Lodha Group had acquired 12.9 acres of land for the project in a Government auction in Cyberabad area, about six-seven months ago. This would be the first major initiative for the group outside Maharashtra, he told Business Line here.

About four towers with the very best facilities and green space would be created in the next few years. Though the present market is tough, there was good scope for a differentiated product, especially in the niche areas, he explained.

The Lodha Group has done a ‘by invitation’ project in Mumbai. The project would be implemented in a joint venture with HDFC. The Lodha Group is a privately-held company, which received about $410 million private equity funding six months ago from a consortium of investors led by Deutsche Bank, he said.

Source: The Hindu Business Line

As demand declines, realtors hold on to expansion plans

With the global economic meltdown taking its toll on the Indian real estate sector, the residential sector market has started witnessing a significant dent in demand, while demand for commercial properties nationwide, has started dipping by 70% to 80%.

Retail developers too are holding on to their expansion plans and are seeing a dent of over 50% in demand, according to international property consultants and developers.

Prakash Gurbaxani, founder and chief executive officer, QVC Realty said, “Oversupply of apartments in major metros coupled with the current market sentiments is getting badly impacted. Demand for IT parks too will remain dented for the next few months. With the result, the sales cycle will get elongated by the next 18 months.”

While demand for ownership of properties in Mumbai (which is available at Rs 40 lakh) has dipped with consumers preferring to stay on rental basis, NCR and Chennai too is witnessing a dip in demand for property being available at Rs 20 lakh, Ashish Bhalla, managing director, Millennium Spire Ltd (a private equity investment company) said.

Moreover, recent attempts by real estate developers to offer 10% to 25% discounts on residential properties prior to Diwali, has failed to attract home buyers as there is absolutely no demand by home buyers in the market, feels international property consultants. For instance, Swastik Developers are offering 12 months free home stay with no rentals and maintenance in Thane prior to buying a flat. However, they have not been able to woo any home buyer for the property so far, say company sources.

Akruti City, which displayed details of its new upcoming projects at the recently held Maharashtra Chamber of Housing Industry (MCHI) property exhibition, has witnessed a number of visitors. However, the projects are yet to attract actual home buyers as two new residential projects, each in Pune as Akruti Countrywood, and, as Akruti Gardenia in Mira Road in November will be formally launched in November, 2008 with prices hovering each at Rs 3,000 per sq ft.

Hemant Shah, chairman, Akruti City told FE , “We expect bookings to start only after the new properties are formally launched and after home buyers personally sees the properties.” Of the 4,000 visitors, which Kanakia Spaces witnessed at MCHI exhibition as one of the participants in four days here, the company has booked two home buyers, its vice president, Subhash Pillai told FE . This is a classic example to prove that there are hardly any actual home buyers left in the market currently.

However, Mumbai-based Lodha Group has not participated in MCHI exhibition this year, unlike last year. According to Abhinandan Lodha, managing director, Lodha Group, home buyers are more cautious in terms of home buying this year as compared to previous year as they are looking for wider range of good products at the right price. We too are currently facing a dent in demand from homebuyers. “Despite the inflationary trends, Lodha Group is offering any discounts to home buyers for the upcoming festival season.”

K Raheja Universal, which is offering discounts of up to 10% to its home buyers is only witnessing inquiries for new properties, as compared to actual home buying deals, as compared to previous corresponding period. Its officials said, “Due to Sensex crashing heavily, demand from investors for buying properties has dented drastically. In fact, they have started selling off their invested properties to large extent”.

As for commercial real estate sector, Indiabulls Real Estate is currently quoting a price of Rs 175 per sq ft for their commercial properties, whereas, HCC is quoting at Rs 80 per sq ft in Vakola. Developers too fear that the demand will further dampen post Diwali. Many commercial properties in city’s commercial hub, Bandra-Kurla Complex is lying 50% to 60% vacant with rent as high as Rs 300 to Rs 400 per sq ft. Delhi-based DLF Ltd spokesperson, Sanjey Roy too said, “We are not offering any discounts on any DLF properties.”

Industry experts also believe that in order to raise further debt for their long-term projects, builders may even look at selling their land and personal assets as well. Raja Kaushal, executive director and chief operating officer, AtisReal Redwoods (a BNP Paribas company), executive director said, “In order to waive off the debts, major listed real estate companies are in the process of selling off their land assets and personal assets as well.”

Pankaj Renjhen, managing director (Mumbai) Jones Lang LaSalle Meghraj opines, “The confluence of various negative market dynamics is largely responsible. Property purchase sentiments are currently depressed because of an all-round shortage of liquidity, relative unavailability of credit and free-floating rumors of large-scale corrections in the offing.” …

Already, sales of residential properties have slowed down dramatically, especially in key areas from Santa Cruz up to Andheri, Goregaon and Kandivali. There has been a 40% dip in sales since the slowdown began, and intending buyers are deferring their decisions until after November. The logic is that developers who are holding on to their asking rates will have to come down on them after the festive season. The rise in interest rates has compounded this scenario further, Renjhen explained.

Renjhen added, “The scenario is different in the Bandra-Khar area, where the cash-cheque component in transactions is far higher. The dip there has been to the tune of 25%. There have been no transactions in south Mumbai since the last four months, even though investors are now selling flats at cheaper rates than builder flats. In areas like Byculla and Prabhadevi, builders are asking for rates like Rs 35,000 to 45,000 per sq ft while investors are asking for Rs 28,000 to 35,000 per sq ft.”

Jai Mavani, executive director, KPMG India sums up, “Real estate market in India is due for correction. Due to credit squeeze, the pace of construction will get delayed. For starting new projects, developers will have to unlock liquidity and will have to reduce property prices.”

Source : Financialexpress.com

Amid grim outlook, realtors plan raft of launches during Diwali

Analysts estimate home sales in the NCR alone have slumped in the last six months by at least 30-40% and launches have been few

Bangalore: Beset by falling sales, delivery delays and whittled liquidity this year, realtors are readying to launch a slew of projects in the festive season starting October, hoping that sentiment would turn buoyant and boost demand for homes.

“Despite low sentiments, we are hoping that people will be in a mood to buy,” said Pujit Agarwal, managing director of Mumbai-based Orbit Corp Ltd. “Developers have been trying hard to offload existing stock in the past few months, postponing all launches till Diwali.”

Orbit is gearing up for an October launch of a gated beachfront property in Alibaug, a holiday destination on the coast close to Mumbai. The luxury project, which has US-based Turner Construction Co. as consultant, will cost between Rs2.5 crore and Rs20 crore for a villa.

Many developers—who have not offered new projects due to the real estate downturn that started this year—have lined up residential projects for launch in the next one month.

Analysts estimate home sales in the National Capital Region alone have slumped in the last six months by at least 30-40% and launches have been few.

Although bigger firms such as Unitech Ltd, India’s second biggest real estate developer, have been launching projects at regular intervals, mid-sized companies have burnt their fingers whenever they have launched projects this year.

Mayfair Housing Pvt. Ltd, a Mumbai-based developer that generally sells economically priced apartments in the city, managed to sell only one of the six apartments in a premium project in Juhu, launched in April. The company is now launching projects in the mid-price segment, hoping it will attract more sales this time round.

In Mumbai and Thane, most developers are launching projects in the suburbs and have priced homes starting at Rs4,500 per sq. ft—nearly the same price at which such homes were offered a year ago.

Smaller developers in metro cities have also played safe this year, keeping away from any launch fearing low conversion rates—the actual translation from enquiries to sales. For instance, Lodha Group is launching five housing projects in Mumbai after its last launch in March.

Prajapati Constructions Ltd, a Navi Mumbai-based developer, launched its last project in 2007 and now has a launch coming up in Hyderabad.

“We sold only five flats in Mumbai in September and are trying to sell off what we have built before launching any more,” said managing director Rajesh Prajapati.

Developers also say the focus of all these new projects—after a long time—will be the homebuyer. “There are no investors in the market, builders are not in a state to buy land or announce IPOs (initial public offerings),” said Nainesh Shah, executive director of Everest Developers Ltd, which is launching the fourth phase of Everest World, a residential complex in Mumbai. “Only homebuyers can bail them out in such a situation, which is why every builder will concentrate on product positioning, and those with serious funds crunch will offer more discounts.”

Unmesh Sharma, an analyst with advisory Macquarie Research said pricing will play a key role in how these new projects fare in the upcoming festive season. “With a lot of supply coming in at one go, builders would be careful about how they price their product and many of them would try giving out more freebies and maybe, discounts to attract buyers,” he said. “Ideally, they should launch projects in the mid-segment, at lower prices.”

Orbit’s Agarwal also said some developers, particularly those who bought land at astronomical rates, would be forced to launch projects because “holding on to land would only mean piling up interest costs.”

Lodha Group

Lodha Group is currently developing in excess of 25 mn sq ft over 27 projects in and around Mumbai. Masters in residential projects, the group also focuses on office spaces, IT campuses, weekend retreats, townships and SEZs. Each of the Group’s projects is characterised by the 5 L’s – Leadership, Luxury, Lifestyle, Location and Legacy.

Keeping with the Group’s vision, Lodha has entered into strategic tie-ups with the world s best names. From luxury garden residences in South Mumbai to integrated townships in the suburbs, thoughtfully designed office environments to private villa retreats, Lodha caters to diverse consumer needs.

Lodha Bellissimo, Mumbai’s first ‘By Invitation Only’ project, offers residences with sky-gardens, a covered 3-level podium parking and fully automated homes, among other things. Lodha Luxuria is Mumbai’s first automated township. Lodha Aqua is a super-premium township designed around water as a theme. Lodha Marina – Lap of Luxury – luxury residences is coming up at Sewri.

Some other premium residential projects under development include Chateau Paradis, Lodha Solitaire, Lodha Grandeur located at Prabhadevi and Lodha Goldcrest. The group is now expanding into Western and Southern India.

Competition Motivates Developers To Come Up With More Luxury Projects

Competition is growing in the Indian real estate market and to grow up in the ladder, developers are building skyscrapers and partnering with worldwide spas and engineering companies. Shree Ram Urban Infrastructure (SRUI) is planning to partner with worldwide spa companies like Thailand-based Banyan Tree and Madrid of Hong Kong in order to set up a 10, 000 sq ft luxurious spa in its Palais Royale 50-storeyed skyscraper complex in Worli (Mumbai), on the lines of One Brand Square, a super luxurious residential skyscraper. Competitor, Lodha Group’s new project, Lodha Bellisimo’s (at Mahalaxmi) A and B wing will be ready by 2009-end, and C wing by 2011, where-in the elevator (with finger print access) opens directly into once residence. Along with that, there is an exclusive private elevator that connects the two levels of one’s duplex home. The company has partnered with Kapadia Associate, Architects, Sitetectonix, Singapore for Landscape and Johnson Controls Inc (JCI), USA for facility management.

NRIs home in on India, account for 10% of sales now

Home sales in India might have turned sluggish but sales to non-resident Indians (NRIs) is booming. According to Jones Lang LaSalle Meghraj (JLLM), residential sales to NRIs have tripled over the last six months, from 3% to about 10% of the total sales.

“What would happen when one loses his job in the US? The downturn is scaring many NRIs who fear job cuts,” says JLLM’s Raminder Grover. “There is a renewed interest in selling abroad,” says Lodha Group senior VPR Kartik. Many NRIs have been thinking of coming back to India and “many of them are making safety investments,” explains Mr Kartik. Over the last few months, Lodha has seen a 25% increase in its sales to NRIs.

Sobha Developers has seen the share of NRI sales go up from 5% to 10% of its sales. “In the last six months, we have been selling about 25,000 sq.ft. a month to NRIs,” says Sobha Developers MD Jagdish C Sharma. Selling to NRIs though is a very different proposition. “You need a different strategy for NRIs. To service the requirements of NRIs, you need to have your own representation in the target market,” says Mr Kartik.

Omaxe has had roadshows in the US, UK, Canada and Dubai to promote its residential projects and have representative offices, too. Omaxe VP marketing Vineet Nanda says, “NRIs made only about 3% of their total luxury apartment sales but today constitute about 10%. A good chunk of their NRI sales comes from Middle East.”

For some like Tata Housing, it is a much larger business. “We have not done any formal marketing of our properties in the international market but already 10-15% of our sales is to NRIs. When we start our promotions, we expect this figure to go up to 25-30% of our total sales,” says Tata Housing

CEO Brotin Banerjee. They have received a tremendous response from the US, UK and Canada for their projects in Bangalore, Gurgaon, Chandigarh and Kolkata.

“Many NRIs would like to have a place in India since the country is expected to tide over this downturn and would be a better place to work in the future,” says Mr Banerjee.

But not everybody thinks so. For Jayesh Desai, head, real estate at Ernst & Young, these are purely investment sales. Well over 50% of NRI sales will be for investment. “With a downturn in the west, India is still a better market for investment. But, if they don’t see returns, this segment will start going down too,” warns Desai.

According to him, the reality is that the market in India is very tight and Indian speculative investors are out. “The share of the NRI market might be higher because of this,” he says. Omaxe ED Vipin Aggarwal, too, subscribes to the same logic. “Most NRIs are buying in India only for investing and not for end-use,” he says.

For developers though, it is a good way to catch up on lost sales in the Indian market. With a big push, a number of developers from across the country are embarking on roadshows in markets where there is a large NRI presence. The favourites really are the Middle East, UK and the US markets.

Lodha Group enters into partnership with Johnson Controls

Mumbai based leading Real Estate Development Company; Lodha Group announced its strategic partnership with Johnson Controls Inc (JCI) the New York listed global leader in creating smart environments. In an all exclusive agreement, Johnson Controls Global WorkPlace Solutions will provide end-to-end facilities management to Lodha Group projects. This is the first step towards implementing enhanced service oriented facility management of the larger portfolio, optimizing energy and creating operational efficiencies. This development comes at a time when the maturation of real estate in India has pushed the need for professional expertise in managing premium real estate. Conforming to the highest standards of international living and delivering the finest in customer delight, Johnson Controls Global WorkPlace Solutions manages more than one billion square feet worldwide, most of which is part of Fortune 500 companies. In line with their global operations, Johnson Controls Global WorkPlace Solutions will implement facility improvements, ensure safety, security and comforts for indoor and outdoor environment, optimize energy and create operational efficiencies at all Lodha projects. This exclusive agreement will enable Lodha to focus on its core business activities, whilst Johnson Controls Global WorkPlace Solutions will support its operations with world class solutions that deliver a superior service to its clients, and further our
commitment to build better and greener communities.

Developers go the Extra Mile to woo Buyers

When real estate company Unique Builders launched a condominium development near Jaipur, 3,510 Hindu priests performed traditional rituals and prayed for divine blessings. The number of priests equalled the number of condos on offer at the development, My Haveli@ Mannat1.

An adjudicator for the Guinness Book of World Records was in attendance at the bhoomi pujan (ground-breaking) ceremony in Mahapura village, about 16km from the Rajasthan capital. The ceremony took place when India’s real estate market was starting to cool after a red-hot streak. “The whole idea was to attract attention and create hype around the project,” says Vinay Shenoy, head of marketing at Bangalore-based real estate marketing firm Asipac Group, which conceptualized the event.

The gimmick helped, and the project made up 63% of total residential sales last year in a softening Jaipur real estate market, according to Shenoy. It is an example of how developers are moving away from traditional marketing techniques and adopting novel strategies to attract reluctant homebuyers.

Rising home loan rates and surging inflation have forced both speculators and genuine homebuyers to put purchases on hold, driving developers to think out of the box to drum up consumer interest. Sales in the Delhi suburbs of Gurgaon and Noida have declined by 20-25%, according to estimates by real estate brokers.

Mumbai-based Lodha Group hired an event management company to think up a different on-site experience for potential buyers to sell its luxury villas in Lonavala, a hill station near Mumbai.

The company conducts pre-visit interviews where personal details about the potential buyer are collected. Based on these, buyers are picked up in a luxury car, given their favourite magazine and offered a beverage to sip through the journey to the site, which is then followed up by a personalized trip around the site.

“It is a challenge to sell in a competitive market with consumers being exposed to more variety,” says R. Kartick, marketing head of Lodha Group. “You can’t give out a great advertisement and sit back,” he adds.

Lodha adds a personal touch by clicking a photograph of the visitor on the site. The photograph is framed and then sent to the potential buyer as a memento.

Such personalized marketing techniques lead to increased sales, said Kartick. “There may be a latent desire to purchase but such tools actualize that urge to real buying,” he said.

Unitech Ltd staged special events—a horse race in Delhi and a polo match in Mumbai —to attract buyers when it launched two new towers in its super luxury residential project Unitech Grande in Noida. The events were designed to associate the luxury apartments with pastimes of the rich.

Developers typically spend 1-2% of their revenue on marketing by giving out advertisements in newspapers and airing commercials on radio, television and the Internet.

According to Anuj Puri, country head of Jones Lang La Salle Meghraj, a property consultancy firm, innovative marketing techniques are required for luxury properties and second-home projects, where demand has to be created.

“Such developers have the added task of marketing a lifestyle product and not just a property,” Puri said. “So, you are targeting a customer exposed to international travel and developers are forced to move up the value chain and go beyond the obvious tools of marketing.”

Orange Properties, a real estate marketing agency in Bangalore, has been bailing out mid-sized developers finding it difficult to sell their properties. The agency typically takes up a project for a period of 10 days and markets it aggressively through radio, newspapers and outdoor hoardings, backed by the offer of a range of freebies.

Orange claims that it is successful most of the time. “Buyers don’t have brand recall for smaller developers. So, we have created our own brand, Orange Properties, which we lend to smaller builders and help them in marketing their products,” said a company spokesperson.

In Mumbai, a local developer plans to hand out glasses of lemonade and refreshment towels bearing its brand name to commuters on the local train to Virar to market a residential project it is building in that suburb, said Shenoy of Asipac.

For marketing companies such as Asipac, the real estate market’s slowdown has meant busy—and potentially profitable—times.

Asipac chairman and CEO Amit Bagaria says he is travelling frequently to Mumbai to meet real estate developers who aren’t able to sell their properties and who want him to devise marketing strategies similar to United Builders’ Jaipur bhoomi pujan.

Asipac has received 300-odd emails in the last three to four months from developers, landowners and first-time developers, enquiring about its services. The company used to get two to three such enquiries a fortnight, about three to four months back. According to Shenoy, it is a buyers’ market and the challenge for real estate companies is to cut through the clutter and attract customers.“The projects that are being launched are all the same,” he says. “Today, buyers are making a choice. But the question is how do you draw attention?” That’s where marketing experts are stepping in.

Real Estate Developers Bet on Eco-Friendly Buildings to Woo Buyer

Call it green revolution in the real estate business. Top developers are now betting on green buildings – that use less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building – to woo large tenants. Even though green buildings involve an incremental cost of 7-10% over traditional buildings, developers see it as an opportunity for differentiation in a growing market.

The trigger is a growing environment consciousness among topnotch tenants, particularly the multinationals. In the request for proposals (RFPs) that are coming in, many MNCs are starting to ask the question about the green quotient. “It may not be mandatory today but going forward, many MNCs will make it mandatory,” says Jones Lang Lasalle-Meghraj chairman and country head Anuj Puri. Developers such as K Raheja and RMZ have decided to go all green.

RMZ’s 1.9 million sq ft mall, RMZ Galleria, in Bangalore is currently under construction and will be a green development. So will be K Raheja’s Mindspace projects at Mumbai and Hyderabad, both of which are currently under development. According to CII-Indian Green Building Council (IGBC), 147 million sq ft of green space has been registered in India to date across a total of 239 projects. At the moment, K Raheja is planning and developing around 14.5 million sq ft of green space across the country. “We are looking at the long-term and want to be the first ones to go green in a big way,” says K Raheja associate vice-president Shabbir Kanchwala.

The company has also signed an MoU with CII to train their architects and engineers in green technology, as there is a “dearth of green staff in India,” he adds. M Selvarasu, GM-Projects at RMZ, estimates the payback to be 7-8 years for gold-rated buildings and about 12 years for platinum rating. “The certification level will differ from project to project but all of it will be green,” he says. At the moment, RMZ is developing a gold-rated building in Chennai and platinum-rated building in Kolkata, both of which have been pre-certified by the CII-IGBC, with another 4-5 buildings in the pipeline.

The Lodha Group, though, is getting into it only partially. “Only our commercial buildings will be green,” says Lodha Group senior vice-president Bharat Dhuppar. Lodha has about twelve buildings in the pipeline and most of them will be commissioned between 2009 and 2010.

In their projects, K Raheja expects the cost to be around 7-8% higher. The savings, though, will be considerable. “We are looking at 30-40% power saving and about 20% water saving,” confirms Kanchwala. “Also in construction, we try and use a lot of recycled materials — aluminum and glass — as well as mix fly ash with the concrete that is used,” he adds. The use of glass too is being reduced. “We keep the use of glass to the minimum, to about 35% in commercial and about 20% in retail,” says Selvarasu.

In a world where energy costs are going up by the day and investments in energy are peaking, a green building which saves precious energy and comes at the same rental for the occupier is a decent marketing tool for developers. “Many of our customers are Fortune 500 companies who understand and prefer green buildings,” says Kanchwala. “The future is in sustainability,” says Selvarasu.