TDR prices getting too hot for realtors

Mumbai: As real estate prices increase across the city, the price of transfer of development rights (TDR), too, has started reaching for the sky.

Going by TDR brokers, the increase has been particularly noticeable in the western suburbs. TDR prices have increased to Rs 2,700 per sq ft in Bandra to Santacruz, and to Rs 2,500-2,600 per sq ft between Santacruz and Borivali.

The central suburbs aren’t far behind. TDR prices in Chembur, too, are near Rs 2,700 per sq ft and in suburban areas like Mulund to Bhandup, at around Rs 2,450-2,500 per sq ft.

“TDR is now selling at Rs 2,600 per sq ft,” Sarang Wadhawan, managing director, Housing Development and Infrastructure (HDIL), said on the sidelines of the Ficci realty summit here.

At the end of the first quarter this fiscal, HDIL had started selling TDR for Rs 2,100 per sq ft. In just four months, prices are up 29%, Wadhawan said.

“Though TDR prices have been hiked so much, there is no sale at all due to price hike. Earlier, the developers didn’t have any liquidity to buy TDRs when prices had fallen to as much as Rs 830 per sq ft. Now, as projects are selling and prices have been hiked, the TDR cartel is back,” a leading TDR broker said.

Last month, when DNA Money ran a survey, TDR prices were found to be around Rs 2,545 for Bandra to Santracruz and Rs 2,300-2,400 beyond Santacruz.

“If developers enter at such high levels, then project rates are bound to go up and buyers would not have any option but to pay. I don’t think at this time developers can shell out or will shell out this much as they have burnt their fingers badly,” an analyst tracking the sector said, preferring anonymity.

source:http://www.dnaindia.com/money/report_tdr-prices-getting-too-hot-for-realtors_1312151

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

Birlas to foray into hotel industry

KOLKATA: For the first time in their close to 100-year history, the Birlas are entering the hospitality arena. The Birla Group – a part of
corporate folklore in the country, along with the Tatas – is going to set up its first hotel on a closed mill plot in Mumbai.

Although the Birla empire – spread across the various family groupings (BK, AVB, KK, CK, SK, Yash and MP Birla groups) – pretty much covers the entire business spectrum, from textiles, metals and cement to automobiles, tea, IT and media, the Birlas had never tried their hand in the hotel arena.

Basant Kumar Birla, the oldest member of the Birla family, told TOI that his group has decided to set up a luxury hotel near Worli, in south Mumbai, on unutilised land belonging to Century Textiles & Industries. “We will not run the hotel. Five big groups from India and abroad have approached us for managing it. We will get a fee, which will be revised every three years,” Birla said.

The group may also use the land for commercial real estate, the industry doyen said. “We want to optimise the value of the land belonging to Century Textiles. The value will appreciate if we develop it. We will not sell the land. The company will return 15-20% of the land to the state government, as per rules, and the rest will be developed,” he added.

Century Textiles senior president R K Dalmiya said the mill has been shut since 2006. “All the mills in the area are closed for environmental or other reasons. The mill occupies 40 acres, of which we own 30 acres. The balance is lease-hold land for which the group has an existing 999-year lease with the Wadia Group,” he said, adding that a Singapore-based architectural firm has been appointed as adviser for the hotel project.

Century Textiles has already set up an advanced greenfield textile mill with an investment of Rs 850 crore at Bharuch in Gujarat. The mill was inaugurated by Gujarat chief minister Narendra Modi in the presence of B K Birla and his grandson Kumar Mangalam Birla (chairman of AV Birla Group) in October. “The new mill alone will take care of most of our requirements,” Dalmiya said.

Source:http://timesofindia.indiatimes.com/biz/india-business/Birlas-to-foray-into-hotel-industry/articleshow/5204777.cms

Kotak plans to sell Nariman Point, Kalina properties

Kotak Mahindra Bank plans to sell some of its offices in Mumbai’s central business district of Nariman Point and in the city’s western suburb of Kalina as it relocates staff to its new corporate headquarters at the Bandra Kurla Complex (BKC).

The properties up for sale are around 12,000 sq ft on a floor in South Mumbai’s Bakhtawar Building across the sea facing Trident hotel and another 50,000-60,000 sq ft at a building in Kalina in suburban Mumbai.

“The prevailing property price in Bakhtawar is upward of around Rs 36,000 per sq ft, while it is lower in Kalina. We have already started vacating rented space across the city and relocating staff to our offices in Kalina and Goregaon ahead of the eventual move into our new corporate headquarters,” said a top Kotak official.

The bank estimates that it could save as much as Rs 50 crore per annum in rentals and lease costs once the transition to BKC is complete.

The BSE-listed private sector bank posted a consolidated net profit of Rs 299.76 crore for the quarter that ended on September 30, 2009.

The savings on account of lease rentals are expected to be substantial without even including the Rs 43-odd crore it would realise on sale of its Nariman Point property going by the valuation quoted by the bank official.

However, Pranay Vakil, chairman, Knight Frank India, said recently the Nariman Point area had seen some bit of destabilisation with the city’s municipal corporation demanding property tax at 112 per cent, of 10 months gross rent paid by lessees every financial year.

“Earlier, the system was to pay tax at 112 per cent of standard rent. But now the BMC (Brihanmumbai Municipal Corporation) has said it will levy this based on the rent as specified in the contract or the rateable value, whichever is higher. If this tax is passed on to lessees the rentals would double overnight, which makes it unviable.”

“The vacancy rates in commercial real estate at Nariman Point have gone up from two to three per cent in early 2008 to seven to eight per cent at Nariman Point now. Capital values too have come down,” said Kaustuv Roy, executive director, Cushman & Wakefield India. “However, now mid-tier Indian companies who have long coveted a premium location such as Nariman Point, may look to take advantage of the lower prevailing prices,” he added.

According to Vakil, the Kotak property in Bakhtawar could command around Rs 30,000 per sq ft. Roy feels that developers may be keen to acquire the Kotak Kalina property and rebuild it as a modern office building. “In Kalina, around the periphery of the Bandra Kurla Complex area, the rates are generally around 25 per cent less than the BKC area. The Kotak Kalina property could therefore command around Rs 15,000 per square feet,” said Vakil.

At this valuation, Kotak could net another Rs 90 crore on sale of this property. The bank plans to retain an office space at Nariman Bhavan in South Mumbai, which is where Uday Kotak, vice chairman and managing director, started his career.

Source:http://www.mydigitalfc.com/stock-market/kotak-plans-sell-nariman-point-kalina-properties-385

Oberoi group to launch another Trident hotel

MUMBAI: India’s third-largest hospitality chain, the Oberoi group, will be opening its second hotel in the city under the Trident name on December 17, the company said.

The 436-key property, located within the Bandra-Kurla complex, will join the growing list of five-star hotels in north Mumbai. At present, there are around 18 hotels in north Mumbai as against seven hotels in south Mumbai.

The hospitality industry, hit hard by the global financial crisis and subsequent Mumbai terror attacks, is on the recovery road. Properties in north Mumbai have performed a tad better compared to its south Mumbai counterparts. This is because sections of the Taj and Oberoi hotels have been partially shut for renovation, following the terrorist attacks on them. The occupancy level in north Mumbai hotels was at 56% in October as against 53% in south Mumbai hotels.

According to industry sources, average room revenue was down 31% in north Mumbai as a result of higher room inventory. Two hotels, including the Imperial Palace and Novotel, were opened recently.

Source:http://timesofindia.indiatimes.com/city/mumbai/Oberoi-group-to-launch-another-Trident-hotel/articleshow/5217056.cms

Tatas to extend cheap housing to global market

Encouraged by the good response to its affordable housing project from Mumbai, the Tata Group has decided to extend the concept in the international market. The group will take the project to other Indian markets as well.

Tata Sons chairman Ratan Tata said the company is planning similar housing projects in other centres like Kolkata, Bangalore and Assam. Maldives has also shown interest in the project and has invited Tata to introduce the concept in the country.

Ratan Tata said he expected the consumption of steel in the developed markets like the US and Europe to reach the pre-recession levels in the next two years. But the good news is that the market has stabilized. “There is no sudden dip or cancellation of orders now” , he said.

Tata said that a team from Jaguar and Land Rover had visited the country to look at what components they can source from India. But no decision has been taken on this. Meanwhile, Tata Motors is planning to adopt Nano for the European market. But it will take at least two years for it to fulfill all regulatory requirements and be ready for launch.

He said the new high horse power truck that Tata had launched would be marketed globally. He identified South Africa, Indonesia, Malaysia, and Middle East countries as the markets where the new high-speed , high horse power truck could be introduced. Presently, it is being exported to South Korea.

Asked whether the group would cut the salaries of the top executives Mr Tata answered that Tatas has already introduced measures to cut costs and avoid wastage. The efforts in this direction had started even before the recession was felt by all economies, he added.

Source:http://mail.google.com/mail/?shva=1#inbox/124cc80eefbdd75c

Home sales went up by 97% in September

Mumbai: The sale of houses in Mumbai, which was plunging in the corresponding period last year, revived significantly in July-September. The figures are showing a drop again after realtors increased prices, data from the house registration department in the city shows.

September saw a 97% jump in house registrations — which includes new and resold homes with 6,112 properties stamped compared with 3,107 in September 2007.

The components of registration include certificate of sale, apartment deed, conveyance and agreement deed.

This led to a 68%, or Rs180.4 crore, jump in revenues for the state exchequer. Hari Prakash Pandey, vice-president, finance, Housing Development and Infrastructure Ltd (HDIL), the third-largest realtor in the country based in Mumbai, said the rebound has been quite significant.

“We have seen a V-shaped recovery since March. Though prices are still below 2007 levels, they have risen 10% from 2008. We are seeing record sales since July,” Pandey said.

HDIL recently launched its Bhandup project, where it is developing 1.3 million sq ft with approximately 1,000 apartments.It has already sold 15% of the properties, priced at Rs5,751 per sq ft, in week since launch. “We have priced it competitively and after selling more than 60% stock we would revise our prices.”

Despite the price hike, sales are very good, said Abhisheck Lodha, director, Lodha Developers. “Sales are higher by 40-45%. In our Dombivili project, we sold 900 units in the first 9 days since launch. I hope it is a long-term recovery. As for prices they can increase at a moderate pace, but if there is a sudden price rise demand will vanish,” Lodha said.

A real estate analyst with a domestic brokerage points out the sales trend is very impressive in March-July, when prices were low. “But if you see the numbers since, sales have been slipping in inverse proportion to prices,” he said.

Source : http://www.dnaindia.com/money/report_home-sales-went-up-by-97pct-in-september_1307381

Home prices up in 15 cities, shows Residex

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

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

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

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

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

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

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

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

Majority of Dharavi dwellers may be ineligible for rehousing

Even as the Dharavi redevelopment project seems likely to be pushed with renewed vigour by the new state government, fresh revelations threaten to put a big question mark over the rehabilitation of over 3 lakh slum residents, with some officials warning of a potential law-and-order problem.

A preliminary assessment carried out by the competent authority—BMC assistant commissioner (G-North ward) Narayan Pai – to verify the status of slum dwellers has found only 37% of them eligible for rehousing in one of the five sectors of Dharavi. Pai has officially noted that out of 8,478 hutments (families) in Sector 4, only 3,127 are eligible.

The slum dwellers found ineligible in the survey are the ones who have been unable to produce proof of residence or documents that show they have been living in Dharavi prior to the government’s latest cut-off date of January 1, 2000. Several thousand hutments have been sold since this cut-off date and the new occupants do not possess photo passes, which are given only to slum residents considered to be eligible for rehabilitation by the government.

The sticky situation forced the project’s officer on special duty, Gautam Chaterjee, to write to the state government last week, warning that the Rs 15,000-crore scheme could not be implemented until all issues related to rehabilitation were sorted out. Chaterjee has termed this a “serious matter”.

Dharavi has been carved into five sectors, each of which will be awarded to a private developer. The 2 sq km enclave has about 60,000 families or over 3 lakh people to be rehoused by developers as part of the project.

Pai’s survey showed that in one of the slum clusters in Sector 4, only 17% families were eligible under the scheme. Said a senior Mantralaya official, “Will those who are ineligible be dumped in the Arabian Sea? The government is looking at a law-and-order problem if thousands of families find themselves being forced out.”

Several builders in the race have reportedly been constantly questioning the government on who will be responsible for shifting out ineligible slum families who might refuse to move when the redevelopment work commences. The government’s reply is that it will undertake the task itself after following the ‘due process of law’. The more sceptical among the builders fear that this ‘due process’ could take months or even years, and say that they cannot afford to wait that long, especially if they are expected to pump in several hundred crores into the project and pay a hefty infrastructure charge to the government.

Interestingly, the Pune-based NGO, Mashal, soon after it completed an exhaustive 18-month-long survey of the 590-acre sprawl, found that more than 5,000 shanties in Dharavi had been sold over the past four to five months to individual investors who expect the project to kick off shortly. Each slum tenement, which is barely 120-200 sq ft in size, was being sold for Rs 10 lakh to Rs 15 lakh. Commercial units, around 150 sq ft, are selling for anywhere between Rs 15 lakh and Rs 30 lakh.

The Dharavi project has been mired in controversy for some time now. Early this year, the state government-appointed committee of experts described the project as a “sophisticated land grab” meant to benefit builders more than slum dwellers. The committee, headed by former chief secretary D M Sukthankar, was formed late last year by chief minister Ashok Chavan to monitor, supervise and advise the government on the humungous project involving the rehabilitation of slum residents of Dharavi.

“There is no study which shows the kind of physical infrastructure such as transport capacity, water supply, drainage, as well as the social infrastructure of schools, medical facilities etc available today and whether with the increase in the population after redevelopment, the increased infrastructure is really possible. Successive municipal commissioners and hydraulic engineers have indicated that such an enhancement in infrastructure will overburden the rest of the city and have an overall detrimental effect,” the committee has warned.

As reported by TOI in the past, there is a concerted effort by some developers to form a cartel to grab the project. According to sources both in the government and within the real estate industry, a few of the 14 shortlisted developers for the Dharavi project are backed by powerful state politicians. Only five developers will be selected to redevelop the five zones in Dharavi.

In July, the state government twice postponed the opening of the bids, giving the flimsy reason that it had not finalised the final notification for the project. However, sources said there were other reasons for the delay. Real estate industry sources claimed that there is huge money at stake. The project was expected to be cleared before the elections but there was a last-minute glitch. Now the new government will take a call soon, the sources said.

source:http://timesofindia.indiatimes.com/city/mumbai/Majority-of-Dharavi-dwellers-may-be-ineligible-for-rehousing/articleshow/5170869.cms

Mumbai’s super-rich back to house-hunting

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

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

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

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

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

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

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

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

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

Royal Palms Launches 4 More Affordable Housing Projects

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

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

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

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

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

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

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

Century Textiles to develop Worli land

Centure Textiles and Industries, part of the BK Birla Group, plans to start commercial real estate development at its Worli mill land and will float a separate division to control it.

Century Textiles is fighting a legal battle with the Wadias for control of 10 acre of land on the same Worli mill property. Century has 40 acre land in Worli, including the 10 acre leased to it by the Wadias.

RK Dalmia, senior president, Century Textiles, said: “We have almost finalised the plan, which is expected to be approved within a month. We will develop commercial complexes that will be leased to banks, financial institutions and for other commercial purposes.” Century Textiles also has interests in cement and pulp and paper manufacturing businesses. Mr Dalmia said the initial estimated cost for the first phase of the real estate project will be over Rs 600 crore. “There will be no equity dilution by the company, as our banks are ready to lend money for our projects.”

The pay back period will be two years, after which the company may start generating revenues, he added. The BK Birla Group flagship company is also expecting a robust growth from the new venture as rental prices have started looking up. “By the time the project is completed, rents may touch the level it was a year back,” said Mr Dalmia. Century had moved the Bombay High Court against Nusli Wadia, chairman of Bombay Dyeing, and member of the Wadia family, in the dispute over the use of leased land for real estate development. In 1898, the Wadias leased 10 acre of land to the BK Birla Group for textile manufacturing purposes. However, since BK Birla’s textile business didn’t function well, it closed its textile operations at Worli in 2007 and planned to unlock land value through real estate development. However, Mr Dalmia denied reports that Century would sell the land.

Source:http://mail.google.com/mail/?shva=1#inbox/12479fe4db6da1ac

Residential Prices go up in Mumbai

Mumbai’s residential property prices are on on the rise even as the buyer is not in a hurry to finish a deal. According to the city’s property registration data, there has been a 13% month-on-month drop in the number of apartments registered in August 2009 this year as compared with the previous month. This trend was holding out in September as well.

“As prices increase, customers shy away and this is evident from the registration data,” said Ram Yadav, CFO, Orbit Corporation. The slowdown in demand comes after an average month-on-month increase of 6% since March 2009. “The drop in sales is clearly visible in Mumbai as compared to other parts of the country. It is more visible in projects that cost over Rs 3,000 per sq ft,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research agency.

On the back of the global crisis, property prices were affected quite seriously and fell 15-30% starting April last year. This trend continued till the end of 2008 and prices showed a semblance of stability early this year. As the economy started to pick up, a change was being felt from March this year. “A lot of pent up demand found its way into the market beginning March this year. However, with a 10-15% price hike, projects are not so attractive now,” said Hari Krishna, director, Kotak Realty.

Real estate agents profess a similar view. “Builders have increased prices faster than expected. This has forced buyers to defer their purchase decision,” said Vipul Shah, a property consultant. Builders have merely reacted to the sentiment which revolves around the demand picking up in the residential segment. “An increase in prices has directly affected the demand for secondary homes. This shows demand is elastic enough to weather any increase in price,” said Ambar Maheswari, director, Investment Advisory for international real estate consultancy, DTZ India.

Source : http://www.indianrealtynews.com/real-estate-india/mumbai/residential-prices-go-up-in-mumbai.html

Home buyers stay off as builders hike rates

MUmbai’s residential property prices are on the rise even as the buyer is not in a hurry to finish a deal. According to the city’s property EMIs and tenure registration data, there has been a 13% month-on-month drop in the number of apartments registered in August 2009 this year as compared with the previous month. This trend was holding out in September as well.

“As prices increase, customers shy away and this is evident from the registration data,” said Ram Yadav, CFO, Orbit Corporation. The slowdown in demand comes after an average month-on-month increase of 6% since March 2009. “The drop in sales is clearly visible in Mumbai as compared to other parts of the country. It is more visible in projects that cost over Rs 3,000 per sq ft,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research agency.

On the back of the global crisis, property prices were affected quite seriously and fell 15-30% starting April last year. This trend continued till the end of 2008 and prices showed a semblance of stability early this year.

As the economy started to pick up, a change was being felt from March this year. “A lot of pent up demand found its way into the market beginning March this year. However, with a 10-15% price hike, projects are not so attractive now,” said Hari Krishna, director, Kotak Realty.

Real estate agents profess a similar view. “Builders have increased prices faster than expected. This has forced buyers to defer their purchase decision,” said Vipul Shah, a property consultant. Builders have merely reacted to the sentiment which revolves around the demand picking up in the residential segment.

“An increase in prices has directly affected the demand for secondary homes. This shows demand is elastic enough to weather any increase in price,” said Ambar Maheswari, director, Investment Advisory for international real estate consultancy, DTZ India.

Source : http://economictimes.indiatimes.com/markets/real-estate/news-/Home-buyers-stay-off-as-builders-hike-rates/articleshow/5129329.cms

Office rentals in Mumbai, Delhi slip on oversupply

MUMBAI | NEW DELHI: Excess supply has made office rentals in key commercial centres in Mumbai and Delhi come down by half over last year, and realty
analysts fear that with business houses waiting for economic activity to pick up speed and a raft of new commercial facilities nearing completion, the rates could head further southwards.

Residential prices have firmed up after the lows they hit late last year, but the recent uptick in macro economic activity is yet to trickle down to sectors such as retail. Realty consultants said in Mumbai there are vacant commercial properties in Malad, Thane, LBS Marg and Andheri MIDC despite the fall in rentals. Rentals have crashed from Rs 400 per sq ft in December last year to around Rs 250 per sq ft now in Mumbai’s commercial hub, the Bandra Kurla Complex (BKC).

ET has learnt that an FMCG company is asking for rentals at 35% lower rates than what it was a year ago for its 1.5 lakh sq ft office space in south Mumbai. Samsung recently took 90,000 square feet on rent on Gurgaon’s Golf Course Road for Rs 58 per sq feet against the asking price of Rs 80 a sq feet. In another deal, a tenant has leased out 50,000 sq ft at DLF Cybercity in Gurgaon for Rs 45-50 per sq ft while the quoted rent was Rs 60-65 per sq ft. “Since there is a downward pressure on many developers and building owners, one may witness even bigger deals at further lower rates,” said Kaustuv Roy, executive director, Cushman & Wakefield.

In Mumbai, supply of the commercial space has gone up with constructions of new buildings and shifting of offices to the cheaper complexes giving the buyers a chance to bargain. For example, JP Morgan is shifting its office from Mafatlal Centre at Nariman point in South Mumbai to Kalina near BKC. This will free up close to one lakh sq ft of space in Nariman Point, further suppressing rentals.

Vacancy — the difference between demand and supply — at Lower Parel is estimated to be around 22%. The number is as high as 35% in North Mumbai and 25% in BKC. Many developers prefer to hold on to their vacant properties rather than leasing them out on lower rentals just to keep the premium tag of the properties intact, said real estate consultant Anckur Srivasttava.

However, the capital value of commercial properties is not falling despite the fall in rentals. New Delhi, in particular, has seen a strange anomaly between rental and capital values. While rentals are still in the Rs 50-70 per sq ft range, capital values are in the Rs 11,000-13,000 per sq ft range.

Source : http://economictimes.indiatimes.com/markets/real-estate/news-/Office-rentals-in-Mumbai-Delhi-slip-on-oversupply/articleshow/5129336.cms

Shivom Group adds an extra element of appeal to affordable housing with a host of Diwali offers

Mumbai based Real Estate developer; Shivom Group today announced that it will be providing customers a range of exclusive offers to choose from for bookings made at Shiv Aum Gardens, Karjat this Diwali. Buyers will be given the opportunity to opt from either, a free Bajaj motorcyle, free stamp duty registration, free modular kitchen or free lifetime club house membership for all apartments booked at Shiv Aum Gardens, Karjat until 31st October 2009.

Announcing the offer Mr. Amardeep Gambhir, Managing Director – Shivom Group said, “There has been a good response from buyers for our affordable housing projects in and around Mumbai over the past several months. It is evident that buyers today are seeking additional tangible values to support their investments. The festive season inevitably brings in a lot of positive sentiments amongst home seekers and we intend to add value to our customers by these offerings.”

Shivom Group recently announced the launch of Shiv Aum Gardens, Karjat, Mumbai Metropolitan Region’s first ‘By Reference’ affordable housing project. Shiv Aum Gardens is an integrated residential township offering 600 apartments, ranging between 600 sq.ft & 850 sq.ft, at an affordable price as low as Rs 9 lacs for 1 BHK and Rs 12 lacs for 2 BHK complimented with best in its class amenities.

Some of the company’s key completed residential projects include Shiv Om Holiday Homes (Karjat), Shiv Om Complex (Karjat), Shiv Om Tower (Andheri), Shiv Om Apartments (Andheri), Gem Apartments (Hiranandani Gardens, Powai), Shakuntala Apartments , (Hiranandani Gardens, Powai).

For the past ten years Shivom Group has been offering real estate consultancy and has been involved in major real estate broking deals and services for leading real estate developers in Mumbai.

http://www.webnewswire.com/node/472490

Micro Housing Finance Corp Gets Rs 25 Cr PE Funding

Micro Housing Finance Corporation is the first such institution to foray into the low-cost housing finance segment.

Micro Housing Finance Corporation (MHFC), the first such institution to foray into the low-cost home segment, has attracted Rs 25 crore in private equity funding from India Financial Inclusion Fund (IFIF) and Michael and Susan Dell Foundation.

MHFC is looking at disbursing loans to urban buyers, who may constitute the unbanked population, looking at buying a sub-Rs 5 lakh home. The firm, which started operations in June, is forecasting 1,500 loan sanctions amounting to disbursal of Rs 60 crore in the first year of operations. The firm will look at another round of funding in next one year to expand its equity base. After the current round, the equity base will rise to Rs 33 crore, which could be leveraged 4-5 times, feels Rajnish Dhall, director, MHFC.

The Mumbai-based firm received its license from National Housing Bank (NHB), the housing finance sector regulator, in February. MHFC plans to give loans which will not exceed 80% the cost of the house, typically ranging from Rs 4-6 lakh. The loans carry an interest rate of 12-14%.

The firm provides loans on a project basis, and is not involved in retail loans. “We approve projects and then do lending on those projects,” said Dhall.

For instance, MHFC has tied up with Tata Housings’ Shubh Girbha project in Boisar which has 1,500 flats in the Rs 3.9-6.8 lakh range. The firm has also tied up for five other projects in Ahmedabad and Virar and Karjat in Maharashtra.

MHFC will ideally target developments of around 1,500 flats where it can finance around 20% of the flats. Besides private developers, MHFC is also looking to tie up with state housing boards.

“But that’s just scratching the surface as the demand is very strong,” said Dhall. MHFC has a target of 50,000 homes in five years, which would mean a loan book of Rs 2,000 crore.

Dhall was a senior director with American Express before leaving his job to work for an non-governmental organisation helping street kids in Mumbai. Last year, Dhall resigned from the NGO to set up MHFC, that combines his social sector and banking experience.

The demand for affordable housing in India is huge as Planning Commission has predicted a shortfall of 25 million homes. “This under-served segment is estimated to represent over 90% of the workforce, but has no financial institution catering to its needs,” said MHFC chairmen Madhusudan Menon, in a release.

“Despite the presence of many strong mortgage lenders in India, home loans have have not been easily made available to lower income segments and primary reson for this informal nature of borrowers’ occupations,” said Mona Kachhwaha, Director-Investments of Caspian Advisors, which advises IFIF, a MFI focused fund.

Source : http://www.vccircle.com/500/news/micro-housing-finance-corp-gets-rs-25-cr-pe-funding

Indian Residential property prices rise 15%

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

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

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

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

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

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

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

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

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

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

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

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

Office rentals stabilise: CBRE Report

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

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

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

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

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

Residential realty prices moving up

Residential real estate prices are going up. In the last three months, prices of affordable apartments have appreciated by around 10%
across the country.

“With improvement in the sentiment in the economy, transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5% to 10% in the last three months,” said Anshuman Magazine, MD of real estate consultancy firm CB Richard Ellis, South Asia.

The developers had cut prices by around 30% in first two quarters of calendar 2009 to revive the demand of residential units, which plummeted to a low due to the global financial crisis. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery, he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

According to an IIFL report, in Mumbai, prices are up 25%-40% from the bottom in early 2009, while in NCR, the corresponding figure is 15-20%. ‘‘Constrained supply and a revival in demand drove up prices in Mumbai, and NCR,” the report said.

In Mumbai, the prices of apartment in Metropolis, being developed by HDIL appreciated by 38% since March to Rs 10,500 per sq. ft. Similarly, the project, Planet Godrej, has become 20% costlier to Rs 25,000 per sq ft in the last six months. In NCR also, many developers like DLF, Unitech, Jaypee Greens, Mahagun and Amrapali among others, have increased prices by around 10% from the launch prices in March-June. In the premium segment also, there is revival in demand, said Vibhor Gupta, senior official of Jaypee Greens. However, the prices have not witnessed any escalation in the premium segment. Similar trend has been noticed in cities like Bangalore, Pune and Chennai.

“The current trend of price escalation can not be sustained as it will affect the demand,” said Aditi Vijayakar, ED of Cushman and Wakefiled, adding, as the demand has revived following interest rate cuts by banks, many developers have announced projects in the affordable range. This will increase the supply and will put pressure on the price rise.

At the same time, another consultant said the financial condition of the developers has not improved to a level that they can hold a project for long. They need cash flow to service the debt, which they have taken to buy lands. The source said the money from other sources like dilution of equity is still not easily available. This has forced developers to depend on the sales proceeds to service debt.

Source:http://timesofindia.indiatimes.com/business/india-business/Residential-realty-prices-moving-up/articleshow/5103968.cms

BMC hikes taxes on Nariman Point bldgs 5-10 times

Mumbai: Nariman Point, Indias premier commercial district, is in a state of turmoil. The Brihanmumbai Municipal Corporation (BMC) has slapped notices on building societies here by increasing their taxes by as much as five to 10 times.

The BMCs assessment and collection department recently hiked what is commonly known as the rateable value in buildings where offices have been given out on leave and licence. The rateable value is fixed on the basis of the rent a particular office space is expected to fetch the owner.
There are close to two dozen buildings in Nariman Point. Some months ago, several societies received notices, informing them that the new rates would be applicable with retrospective effect from April 2008. The 15-storey Mittal Court is a case in point; the BMC has hiked its rateable
value from Rs 2.86 crore a year to a phenomenal Rs 21.31 crore, an eight-fold increase.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?publabel=TOI&city=Mumbai

Godrej Industries, group firms to develop real estate

Godrej Industries today said its board has approved entering into an agreement with two group firms — Godrej & Boyce Mfg Co and Godrej Properties — for developing a property in the city suburbs.

The board of directors have approved a proposal to enter into a memorandum of understanding (MoU) with Godrej & Boyce Mfg Co and Godrej Properties for developing the property at Vikhroli (Mumbai), Godrej Industries said in a filing to the Bombay Stock exchange.

The agreement provides for setting up of special purpose vehicle to execute joint development of the property and commercial terms for such development, including sharing of costs, revenues and profit, it further added.

Shares of Godrej Industries were trading at Rs 200.45, up 6.34 per cent in afternoon trade on BSE.

Source : http://www.business-standard.com/india/news/godrej-industries-group-firms-to-develop-real-estate/75323/on

Commercial property sector boom expected in India from 2010 to 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

It’s boom time again for home sales

It took just two hours for DLF, the country’s largest property developer, to sell all the 1,250 apartments in the second phase of its Capital Greens project near the Moti Nagar area of Shivaji Marg (Najafgarh Road) in West Delhi. The project was launched on September 23 and the prices were around 25 per cent lower than the prevailing market rates.

In Mumbai, Rustomjee, a prominent private property developer, got bookings for 44 apartments in its Global City project in Virar, a distant suburb of Mumbai, in the first two days of a property exhibition organised by the Maharashtra Chamber of Housing Industry (MCHI) from October 1-4

The developer has already received bookings for 600 apartments in the Global City and another 200 apartments in Rustomjee Urbania project in Thane, on Mumbai’s outskirts, in the last three months, all in the Rs 10 lakh to Rs 50 lakh category.

Another realty firm Nahar Group says it has sold 800 apartments in its Amrit Shakti project in Powai in the last five months. Nahar expects booking for another 15 apartments after MCHI exhibition.

After witnessing a revival of sorts in home sales in the first and second quarters, developers are hoping to cash in on the demand for affordable homes in the third quarter too, due to a large pent-up demand and the general feeling that prices may not go down further.

“Buyers have realised that prices may not go down further and there is no point in waiting now,” says a senior State Bank of India executive. SBI’s stall at the property exhibition got over 500 enquiries every day during the four-day exhibition and the bank expects a good conversion.

All bankers are also expecting the good run rate on home loan disbursals to continue. ICICI Bank Managing Director Chanda Kochhar expects a surge in home loan disbursals in the third quarter. “The confidence is coming back due to increased job security and the feeling that real estate prices have corrected enough,” she says. There is also a general consensus that interest rates have bottomed out, she says.

JS Augustine, director of marketing at Everest Developers, says there was a huge pent-up demand which is coming into the market now. Buyers who were holding back are now buying. Developers who had pulled back a lot of projects earlier are also launching new projects given the improvement in the market,’’ Augustine says.

The period from October 2008-March 2009 was the toughest period for developers when property sales touched lowest levels since 2004. Property prices had fallen over 40 per cent from their peak in 2007-08 as buyers stayed away due to salary cuts and fears of job losses.

But successive interest rate cuts, stimulus packages from the government and overall improvement in economic conditions changed the scenario since April this year with the country’s biggest developers, DLF and Unitech, selling over 6,500 units in the first quarter of FY 2010.

“We expect better sales in Q3 and Q4 as well. We have got very good response in Delhi which gives a good value for developers like us,’’ says Rajeev Talwar, group executive director of DLF. Even a Unitech spokesperson said the company expects to continue its growth momentum in the coming quarters.

Home loan lenders are naturally bullish. SBI is targeting a growth of 30 per cent in the current quarter against 21 per cent in 2008-09. HDFC, the country’s largest home loan provider, saw disbursals rise 22 per cent in first quarter and expects the trend to continue.

Normally, there is a lag of three to six months from the time of purchase and disbursal of loans by a bank or a housing finance firm.

Developers, which have increased prices by 10-15 per cent in the last six months, say this is the best prices buyers can get.

“Prices have bottomed out. We do not see any reason to cut prices further. Though prices will not go up sharply, they will certainly go up slowly in the coming months,’’ says Parag Shah, general manager, sales, Nahar Group, which sells apartments in Rs 60 lakh-Rs 75 lakh in its Powai project.

Apart from launching premium housing projects in the last few months, developers have also withdrawn freebies such as free parking, waiver on stamp duty, free holidays and so on after the spurt in sales. “Last year there was a recession and sales were sluggish. That is why developers needed to doll out freebies. Now products sell without this,” says Nahar’s Shah.

But that’s precisely why some analysts are concerned. Pankaj Kapoor, chief executive of Liases Foras, a realty research firm, says “there is high demand only in the lower price bracket of Rs 10-20 lakh. August and September sales have fallen by 20 to 25 per cent as developers have increased prices again. There is still lukewarm response for premium properties,’’ he says.

Prospective buyers like Govind Chitre, a retired government employee, agrees: “The moment developers see increase in the Sensex, they jack up the prices. They charge on the super built-up area, which is really absurd. I feel there should be a strong regulatory authority to control builders.’’

Source : http://www.business-standard.com/india/news/it%5Cs-boom-time-again-for-home-sales/372338/

Unitech Launches Worli Project at A Massive 36% Discount

Unitech Ltd has launched its new residential project (a part of the slum rehabilitation scheme) in upscale Worli, at a massive 36% discount to the prevailing market price. The project would be launched at Rs 12,800-13,800 per square feet, compared with a on-going market price of around Rs 20,000 per square feet. The unit size of the project would range anywhere between 1,750-3,750 sq feet for 2-3 bedroom flats, which means that each flat would cost between Rs 2.5 crore to Rs 6 crore. The company might start the pre-launch sale of the project by next month before Diwali.

Source : DNA Money

Property prices could get costlier this Diwali

If you are a homebuyer looking for some hefty discounts to come your way this festive season, you are in for some bad news. Real estate companies across the country are all set to increase prices this season in a bid to improve investor sentiment. CNBC-TV18’s Priyanka Ghosh reports.

Traditionally, the Diwali season has great offers for homebuyers. Developers shell out free parking, price-offs and in some cases even a Mercedes Benz to kick in bumper sales. But such offers may be hard to come by this time around. Analysts rule out a further price reduction as prices have already corrected by 30-35% since last Diwali. In fact, a price increase seems imminent.

Says Anuj Puri, Country Head of Jones Lang Lasalle Meghraj, “If the schemes have done well, you’re going to see some price increase. I think where the developers are coming in, they want to provide confidence to the buyer who had bought may be three-four months ago to say: look, when you bought it, it was at x price but today it is 5-7% higher.”

In the past few months, the real estate sector has seen a sharp price increase led by mumbai and the NCR market. An IIFL report says Mumbai has seen a price recovery by 25-40% from the bottom of early 2009. Prices in the NCR market has revived by 15-20% from March-April levels. Take a look at a few projects: HDIL has revised prices upwards by 38% along with Peninsula Land. Godrej Properties too has increased prices in its Planet Godrej project by Rs 5,000 per square feet.

In the NCR region, both Unitech and Indiabulls Real Estate have revised prices by 18% and 23%.

A slew of real estate companies are set to hit the primary market in the next six months. A price revival boosts cash flow income — that’s vital for the valuation these companies are vying for. There are projects where volume has been kicking in — both DLF and Unitech have doubled transactions in the first five months of this financial year compared to FY09. However, analysts caution that growth of income could soon fail to keep pace with the indicative price increase.

Source : http://www.moneycontrol.com/news/cnbc-tv18-comments/property-prices-could-get-costlier-this-diwali_417525.html

Genuine demand still hasnt returned to realty market

SO IS the demand for homes getting real again It seems to be a mixed bag so far. While developers are aggressively talking about a spurt in demand, industry experts and buyers attribute this revival to the strong nexus between developers and intermediaries .
SundayET spoke to a cross section of developers, bankers, buyers and realty brokers to assess the ground situation. In fact, the demand in the residential segment for Q3 of this calendar year remained marginally higher than the previous quarter. However , leading developers said that the growth has been optimistic and some even claimed a 30% rise in demand in these three months.
Last month, Indias largest real estate developer DLF claimed to have sold 1,250 flats in two hours in the second phase of its Capital Greens project in Delhi. Rival Unitech too said that they had a sale of 3,500 apartments across cities between July and September . Similarly, BPTP sold nearly 2,100 apartments in the same quarter.
For Delhi-based realty firm Omaxe, Q3 got a sale of Rs 300 cr, up 50% from the previous quarter . And according to Niranjan Hiranandani , MD of Mumbai-based Hiranandani Developers, there has been an overall industry sale of 10,000 units in the Mumbai region in these three months.

These figures, no doubt, look impressive. But there is a catch. Industry experts and buyers say that this business is mainly the result of a strong developer-intermediary network. To some extent it is artificial hype but it is not completely a false story. Around 35-40 % of such stock goes to end users and 50-60 % goes to brokers or investors who want to sell it off later, says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm.
Jain is not the only one echoing this view. Other reputed brokers in the industry also have a similar take. Rajesh Arora, vice chairman of Arora and Associates Realty, puts it this way, It is not practical to sell 2,000 or 3,000 apartments within a few hours. They would have sold it to middlemen or agencies. The demand in the sector has remained the same as in the last quarter and though the prices in Mumbai have increased, in Delhi they are at the same level.
Businessman and prospective buyer, Anil Dhawan, says that such claims by developers do not hold any meaning. Financiers take up most of the stock. End users would possibly make up only 10% of the buyers in these cases. Dhawan says that although the time is conducive to buy right now, he would mainly look at a ready to move in property over an under construction one to avoid delivery hassles.

Developers, however, are upbeat about the housing demand. DLF is basking in the glory of good demand. We have launched the second phase of Capital Greens project. We are selling one flat per pan card and buyers cannot sell the property within a year. So I am sure that end users are the buyers right now, says Rajeev Talwar, group executive director, DLF.

The demand is robust, says CMD of Omaxe, Rohtas Goel. There has been a 30% increase in this quarter. We had a sale of Rs 300 cr in these months as against Rs 200 cr in the last quarter.
Many also are of the view that the fear of increased prices later is propelling more number of buyers to come forward right now. That is leading to increased enquiries as well as conversions. People think that is the best time to buy as prices may go up later. The price band of Rs 15-Rs 40 lakh is doing quite well. We will be launching more projects in the affordable segment. Our target is to launch 30 million square feet in residential space by the end of this Financial Year, reveals a Unitech spokesperson.
Home loan offtake too bears out increased demand statistics. The management of HDFC is upbeat about 20-25 % growth in the home loan disbursement. Also, according to a senior official from Indian Bank, the demand of home loan remained the same as it was in the previous quarter. The demand for loans between Rs 15-20 lakh is more than the rest, said the official.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=ETD&pubLabel=ET&pageid=3&mydateHid=04-10-2009

MCHI announces Property 2009 India’s Largest Official Property Exhibition

Maharashtra Chamber of Housing Industry (MCHI), the most prominent body of real estate builders and developers in the country, today announced ‘Property 2009’ their 15th Real Estate and Housing Finance Exhibition.

India’s Largest Official Property Exhibition At MMRDA grounds BKC during October 1-4, 2009

Mumbai, September 25 2009: Maharashtra Chamber of Housing Industry (MCHI), the most prominent body of real estate builders and developers in the country, today announced ‘Property 2009’ their 15th Real Estate and Housing Finance Exhibition to be held at MMRDA grounds, Bandra Kurla Complex, scheduled to be held during October 1-4, 2009 from 11am to 8pm.

Property 2009, India’s only official and largest real estate and housing finance exhibition organized bi-annually by the MCHI from last ten years, is a one-stop destination for the potential property buyers in Mumbai.  It offers home buyers a wide range of properties both Budget, High End and Commercial Properties along with a wide choice of Home Loan options.

As many as 75 real estate developers would be showcasing the properties located in Mumbai and the suburban areas, Thane, Navi Mumbai, Pune and other parts of India during the exhibition. The exhibition is organized by MCHI and co-organized by the State Bank of India, Platinum Partners – ICICI Home Finance Company Ltd., Axis Bank, and LIC Housing Finance Ltd. IDBI Bank is the Gold Partner and HDFC Ltd is the Silver Partner.

Prominent housing finance companies such as Citibank N A, Dewan Housing Finance Corporation Ltd., GIC Housing Finance Ltd, IDBI Home Finance Ltd and Kotak Mahindra Bank Ltd will also be participating in the exhibition, offering their best deals.

Mr. Pravin Doshi, President MCHI said, “As the festive season begins, we would like to offer an opportunity to the thousands of prospective home buyers to buy the house that suits their requirements from the properties being displayed at the exhibition.”

Mr. Harish Patel, Convenor Exhibitions adds, “Riding on the revival in the overall economy, real estate has recently seen demand is picking up in all the segments. We are very much confident that forthcoming mega real estate exhibition would serve the cause of bridging the gap between the potential buyers and the real estate developers by bringing them at the one platform”.

Mr. Deepak Goradia, Co-convenor Exhibitions, said, “MCHI’s property exhibitions have always reflected the market’s true sentiment. Be it the mega shows or the budget shows, these exhibitions have become a convergence point for property seekers. This time too, we foresee a great potential as thousands of prospective home buyers are awakening to the prospect of investing in property to get the best returns”.

About MCHI:
Maharashtra Chamber of Housing Industry (MCHI), formed in 1982 is the most prominent body of real estate builders and developers bringing together members dealing in real estate and construction industry on one common platform to address issues facing the industry. Members of MCHI account for providing 80 % – 90% of residential accommodation in Mumbai and its vicinity. MCHI helps both the Central and State governments in meeting their objectives of providing shelter. MCHI works towards raising awareness among the general public, real estate and construction industry while providing them with exhaustive information on projects and new developments in and around Mumbai. With over 400 well-recognized and reputed member builders, developers MCHI is affiliated with leading industry associations like FICCI, IMC and CREDAI.

Source : http://www.prlog.org/10356396-mchi-announces-property-2009-indias-largest-official-property-exhibition.html

Demand for retail space on the rise

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

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

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

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

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

Stabilisation period

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

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

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

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

Aggressive expansion

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

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

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

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

Builders see large room for growth in office space

Market for this predicted to grow at a compounded 19% annually for next four years.

The glittering towers in the country’s commercial capital may still be rising into empty space, but that hasn’t stopped Rashesh Kanakiya’s ambitions from soaring.

The chairman of Kanakiya Spaces has just launched a commercial project called — rather oddly, some would say — Boomerang, a 1.2 million sq ft complex at Andheri, a Mumbai suburb. Kanakiya says it’s the country’s largest single-project floor space on offer and a substantial part of that will be earmarked for offices.

The oversupply in the office space doesn’t worry him. “Though there is oversupply in the IT space, demand for office space hasn’t stopped. With international markets picking up, we expect demand to pick up from early next year. We have got an excellent response for our Boomerang project this week,’’ Kanakiya says.

Kanakiya has put his money where his mouth is. His company has also just completed 215 Atrium at Andheri that offers office space of 300,000 sq ft, apart from a 300-room four-star hotel (Courtyard Marriott). The space has been sold out.

Kanakiya is certainly not alone in expecting things to improve. According to a Cushman & Wakefield report, though the office market is expected to dip in demand this year with an expected absorption of 27 million sq ft, the period from 2010 onwards will see the markets experience a healthier demand, with a compounded annual growth of 19 per cent from 2009-2013.

The commercial office market in India is likely to head towards a more balanced demand and supply situation in the next few years. The highest demand in the next five years is expected to be in Bangalore at 34 million sq ft, followed by Chennai at 27 million sq ft. Mumbai comes just after that. The growing corporate confidence is expected to turn things around in the office space market, the report says.

According to the Global Office Real Estate review (mid-year 2009) by Colliers International, Mumbai remains the 15th largest office construction site in the world and the city is currently seeing as much as nine million sq ft of office space coming up. This is a huge jump compared to June 2008 (just before the global recession started) when barely 3.8 million sq ft was under construction.

According to real estate research firm Liases Foras, the Mumbai Metropolitan Region (MMR) has nearly 60 million sq ft of unsold office space, but developers are now planning to launch 120 million sq ft of new office space by 2016, in anticipation of a much better tomorrow.

The growing corporate confidence has prompted many developers to put the oversupply concerns behind them and either launch new projects or put the unfinished ones on the fast track, with aggressive marketing efforts.

The list is getting longer by the day and includes Indiabulls Real Estate, which is ready with its 1.5 million sq ft Indiabulls Finance Centre at Lower Parel, Ackruti City with its office complex at Bandra Kurla Complex, Phoenix Mills, which will develop 1.7 million sq ft of office space in its Phoenix Market City project in Kurla, ACME and the Ajmera group, which have launched their projects recently.

Raja Kaushal, executive director and chief operating officer of BNP Paribas Real Estate India, says there is a latent demand for office space from most sectors. “There are at least five to big companies which are looking for properties in excess of 50,000 sq ft,” Kaushal adds.

That’s a sharp turnaround from the middle of last year, when most companies and financial institutions deferred their expansion plans due to the uncertain demand scenario and in the hope that they would get properties at cheaper prices later. The result: Office rents in the city’s main business hubs, Nariman Point, Bandra Kurla Complex and Lower Parel, have gone down by 50-60 per cent in the past one year.

However, there is a large section of consultants who find the spate of new office space launches a bit difficult to digest. Some developers are marketing aggressively (two-page expensive advertisements in Mumbai dailies have become a common affair now) so that buyers come back.

“Developers have been trying to sell these properties for quite some time. It is very difficult to get buyers, so developers are advertising heavily to woo buyers. And in some cases, they do have any option other than launching office complexes as per zoning laws,’’ says Pankaj Kapoor, chief executive of Liases Foras.

According to Kapoor, a number of developers are also withdrawing their projects due to poor response. Mumbai witnessed 1 million sq ft of cancellation from buyers in the December quarter of this year and a mere 500,000 sq ft of leasing and buying in the June quarter, which is very insignificant, Kapoor says.

Kapoor, however, seems to be in a minority. A real estate developer who didn’t want to be identified says he isn’t a fool to have put his money in something without proper research. “Consultants may be wise people, but we are actually investing and know better,” he says.

Source : http://www.business-standard.com/india/news/builders-see-large-room-for-growth-in-office-space/371486/

Residential property prices rise 15%

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

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

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

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

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

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

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

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

Builders use flexi model to sell homes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Maharashtra housing agency for partnering private developers

With little available land for ready development; the Maharashtra Housing & Area Development Authority (Mhada) is scouting for partnerships with private developers. Mhada has invited expression of interest (EoI) from realtors, if they would be interested in sharing their land for development of houses for economically weaker sections (EWS) and the lower income group (LIG).

Mhada presently has only Mumbai and Nashik cities in mind. If it takes off here, the thinking is to extend this to Pune and Aurangabad, and then elsewhere, if a common formula could be arrived at.

The government agency has only 25 acres readily available for development. “Other land parcels are either encroached or the government has not completed the transfer procedure,” said a Mhada official. The dearth is forcing it to look at the public-private partnership (PPP) model.

Builders who would join the state development authority will be rewarded in two ways. They will get money for construction and would also be able to develop more houses on the land parcel. This is possible since Mhada gets a floor space index (FSI, the ratio of permissible build-up area to the size of the land lot) of 2.5. Private developers, on the other hand, are allowed an FSI of only 1 (with some exceptions, in parts of Mumbai). They need to buy transfer of development rights (TDR), if they want to develop more than the permissible limit. A developer generates a TDR by giving his land for public use such as widening of a road or slum rehabilitation. He may sell such rights in the market to another developer. Even after using TDR, developers may only construct up to an FSI of only 2 in Mumbai.

Mhada’s model will work like this. Assume a developer has a 10,000 sq mt (or 2.47 acres) plot. Legally, he may build only up to 10,000 sq mt of living space. If Mhada comes into the picture, he gets to develop housing space of 25,000 sq mt. Of this, Mhada will take between 6,250 sq mt and 10,000 sq mt, depending on the scheme. The realtor will get the rest. Mhada will also pay the developer the cost of construction. In this case, the builder gets 5,000-8,750 sq mt extra. Mhada is also looking at making use of the subsidy the government provides if 40 per cent of the project is used for housing EWS and LIG. The subsidy is between Rs 60,000 and Rs 1 lakh for each flat so built, depending on the house size.

Sources at Mhada said two developers have shown an interest on properties in Mumbai at Kandivli and Sewri. But nothing is yet finalised. “There are a lot of inhibitions that realtors have,” said a Mhada source.

Developers are worried that the rates at which Mhada will sell the flat can impact prices of their flats. Pranay Vakil, chairman, Knight Frank agrees. “The prices can dampen around 10-15 per cent. But the extra FSI should compensate it,” said Vakil.

But he also cautioned that this project can be affected if builders are allowed extra FSI. The earlier, Vilasrao Deshmukh government had raised FSI in the city’s suburbs to 1.33 from 1. Before it could be implemented a public interest suit was filed against this. If the court rules in favour of the government, builders will get FSI up to 2.66 in the suburbs if they would use TDR. Mohan Deshmukh, president of the Maharashtra Chambers of Housing Industry (MCHI), a builders’ association, feels this partnership is only feasible if the land is outside Mumbai city’s municipal limits. “Within the city limits, developers can make more money if they construct and sell the house on their own,” said Deshmukh.

He added that most developers showing interest have a land bank in the distant suburbs of Vasai-Virar or Kalyan and beyond.

“Many developers have land in these regions that have been acquired many years back at a pittance. The current property prices there are affordable for this kind of development,” Deshmukh said.

Source : http://www.business-standard.com/india/news/maharashtra-housing-agency-for-partnering-private-developers/371080/

‘Nano flats’ offer India’s poor a way out of the slums

A new building boom is set to give rise to a slew of ultra-cheap apartments and a fresh incarnation of sub-prime lending

Om Prakash, a tailor and a thirdgeneration resident of Dharavi, India’s largest slum, has a steady job and some savings, but he cannot imagine setting foot on the property ladder.

Built on a man-made island, his home city of Mumbai is desperately overcrowded. More than half its 18 million inhabitants live in shantytowns, many, like Mr Prakash, paying significant rents for the privilege. The slum landlords know that their tenants have little scope for negotiation: a 70 sq m flat near the centre of town costs upwards of £300,000.

“We ask God to help,” said Mr Prakash, who earns about 7,500 rupees (£94) a month, “but in this city I don’t think good property is within the grasp of ordinary men.”

A change in strategy by India’s property developers could answer Mr Prakash’s prayers, along with those of millions of other tailors, drivers, maids, teachers and tea stall owners who long for a place of their own. The developers’ plans hinge on two elements: a new building boom that is set to give rise to a slew of ultra-cheap apartments, and a fresh incarnation of sub-prime mortgage lending.

global credit crisis, house prices collapsed by as much as 50 per cent in some Indian cities. Worst hit was the market for luxury homes, previously the focus for most residential builders. Left with large numbers of pricey apartments unsold, property companies are moving to broaden their buyer base by building super-low-cost homes for India’s working poor.

The most prominent company in this fast-expanding budget market is Tata, the conglomerate that makes the £1,200 Nano, the world’s cheapest car. It is building 1,500 über-basic flats at Boisar, on the northern fringe of Mumbai. The cheapest are priced at 390,000 rupees (£4,900) — within the reach of Mr Prakash’s family.

Other companies are setting the price bar even lower. East of Mumbai, Matheran Realty is building 15,000 flats, starting at 210,000 rupees (£2,625). Costs are being kept low by building far from the city centre, where land prices can rival those in Central London or Manhattan.

Tata’s “nano flats” are also limited to three stories, to avoid expensive structural work, while the use of lightweight precast blocks means that the buildings go up quickly.

Indeed, no stone has been unturned in the mission to slash costs: spending on publicity, which usually accounts for 5 per cent of the top line on a residential development, was cut to 1.5 per cent. Even so, such was the hype around the new “nano flats”, the project was five-times oversubscribed in a matter of days.

Those buyers lucky enough to be chosen through a lottery will get what they pay for: measured by “carpeted area”, Tata’s smallest homes are only 218 sq ft, about a third of the size of a squash court. The most basic are one room, with a sink in the corner and a toilet behind a partition. Still, they will beat most slum dwellings: in Dharavi, India’s largest shantytown, there is a stall of six lavatories that serves 16,000 people.

According to Brotin Banerjee, the Tata Housing managing director, providing safe, cheap homes fits well with the group’s history of philanthropy. McKinsey, the consultancy, estimates that India needs 25 million new homes. “The Government is not going to be able to provide them by itself,” Mr Banerjee said.

He also believes that targeting the working poor makes commercial sense. According to Monitor Group, another consultancy, India has 180 million households earning between 90,000 and 200,000 rupees a year, precisely the income levels that Mr Banerjee is catering for. Many in this bracket — including Mr Prakash — had been barred from buying property by the impossibility of accessing credit. To tackle that problem, Tata has teamed up with a microfinance institution that will advance loans without requiring reams of documentation. Other state-backed lenders have been ordered to extend cheap credit to low-income homebuyers by India’s central bank.

With the sub-prime credit flowing, Mr Banerjee sees his little homes as a source of big profits. “There is massive pent-up demand,” he said. “These people are poor, but that doesn’t mean they don’t have aspirations.”

Source : http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article6846571.ece

Super-luxury is back in the realty lexicon

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Property Demand Resurges in India

Investors are once again interested in India’s housing market after residential prices dropped as much as 30 percent earlier this year.

The country’s largest home developer, DLF, sold close to 1,400 units in one day alone this spring; while in Mumbai, another company sold 90 percent of its premium apartments in less than four months, a surprising economic feat after the market’s sudden downturn in 2008.

While some real estate companies, including DLF, have been quick to adjust property rates due to the recent demand—increasing newer housing projects by 15 to 20 percent in the last few months—many economists believe price levels will still stay at all-time low. In the last quarter of 2008-09, developers cut middle-income home prices by 25 to 30 percent, after sales fell 50 percent from the housing market’s peak in 2007.

Despite a few recent economic dips, India has been on the radar of property investors for last eight years. It’s still one of the fastest growing economies in the world with an increasing middle class and strong technology industry that’s driving entrepreneurs to relocate to the world’s second largest country. Cities like New Delhi, Bangalore and Mumbai have been built up with residential and commercial properties to accommodate India’s BRIC (Brazil, Russia, India, China) powerhouse status— a conglomerate of countries expected to dominate the global market in the next ten years.

The increased interest in Indian real estate may also be an example of investors wanting what they can’t have: Nonresidents, tourist visa holders and business partners of the two are restricted from buying properties in most areas of the country, and are only allowed to lease properties for a period of no more than five years. However, economists encourage those looking to establish residency and take advantage of IT opportunities in India to invest in real estate now, as values will appreciate around 2011.

Source : http://www.buyassociation.co.uk/property/news/india/property-demand-resurges-in-india-13876.html

DLF may exit Amanresorts; to focus on residential, office properties

NEW DELHI: India’s largest property firm, DLF, that scaled down ambitions in the hotel business, following an economic downturn, to focus on core  areas of building homes, offices and shops, is planning various options to fully or partly exit from the international luxury hotel chain Amanresorts that the developer had purchased at the peak of the economic boom in 2007 end. The company has also held preliminary talks with at least two Indian hotel chains, but a huge gap between the buyer and seller’s expectations has played spoilsport for concrete deal discussions.

Founded by Indonesian hotelier Adrian Zecha, Amanresorts is a super luxury chain of resorts usually built with small inventory of rooms to offer exclusivity. The company is known to charge one of the highest average daily room rates that sometimes cross $600. The hotel company owns and manages 23 small luxury resorts worldwide and will open a new resort in Utah, USA, in October, as per the company’s website. It operates three resorts in India – one in New Delhi and two in Rajasthan.

In 2007, Adrian Zecha, announced that he has formed an equal partnership with DLF, which has entered into a definitive agreement to acquire a controlling interest in the Aman Resorts group. DLF, currently, holds 50% in Aman and as per the agreement, would acquire controlling stake in due time.

As per two executives in the hotel industry and one at DLF, the Indian real estate developer’s interest in carrying Aman in its portfolio has whittled given the economic downturn that has substantially pared occupancy levels as well as room rates across the hotel industry. As per industry estimates, Indian hotels together lost Rs 4,000 crore in revenues due to the economic slowdown and after the Mumbai terror attacks in the last financial year. Following this, few tourists visited India or stayed in five-star hotels and room rates dropped by at least 20-30%.

A senior DLF executive, who asked not to be named, said: “There is surely an interest among potential buyers. They have spoken to us. But it’s just been talks, little else, as their offer price is too low compared with the price we had paid for Aman in 2007.” He did not name the companies that has shown interest in Aman.

But the DLF spokesman denied the company was planning to dilute equity or sell any property of Amanresorts. In the past, while announcing the company’s falling interest in the hotel business, DLF vice-chairman Rajiv Singh had said the company would want to retain Aman as it was a boutique brand. As per two hotel industry executives, who did not wish to be named, DLF has held some preliminary talks with ITC Hotels. But the ITC spokesman said: “We have made no move” to acquire stake in Amanresorts. But hotel consultants said it makes sense for an Indian hotel company like ITC to bid for Aman since they have no presence in that segment.

Another senior hotel industry executive said DLF could consider an option to hive off Aman properties in Alwar, Rajasthan, and two loss-making properties in Sri Lanka to some investors or hotel chain without the Aman brand. It is speculated that the realty major spent $200-250 million with plans to get into full-fledged hotel business. It planned to build around 75 hotels in a joint venture with foreign hotel chain Hilton in India. But following Hilton’s takeover by private equity player Blackstone, Hilton’s interest in hotels with DLF waned. Meanwhile, DLF, too, had started facing cashflow pressures. The two partners scaled down their ambition to just four properties.

In early 2008, the stock market started seeing turbulence and the entire economy took a nosedive following the collapse of US investment bank Lehman Brothers later that year. As demand for homes, offices and shops dried up, property firms were faced with cash crunch. Realtors reprioritised their plans in order to ease cashflow pressure. DLF decided to sell assets and shift focus from capital-intensive businesses such as hotels to those like homes where revenue could easily be generated. DLF plans to raise Rs 5,500 crore through sale of assets and exit from some businesses such as windpower and township projects in Dankuni, West Bengal and Bidadi, Karnataka. DLF has already sold its small hotel project in Saket, Delhi. It has put on block over 10 hotel plots across the country, including in Gurgaon and Mumbai. The company has since been able to successfully sell some of its assets.

As per reports, Amanresorts was adversely impacted after 2002, due to the tourism downturn in south-east Asia, following the Bali bombing and other disaster since a large chunk of its resorts are in Asia. The current economic slowdown, which significantly reduced business and leisure travel, has hurt all luxury and five star hotels.

Source : http://economictimes.indiatimes.com/News-by-Industry/DLF-may-exit-Amanresorts/articleshow/5035334.cms

Best time to look for a value deal in real estate

It’s perhaps the best time to look around for a value buy in real estate. With lower price points in locations which were not earlier within your Land as investment

wallet’s reach, buyers are scouting for good ‘value’ bargains at this time. And with developers going big on affordable home launches, the timing may just be one of the best for buyers seeking a steal deal.

Anshuman Magazine, CMD of global real estate consultancy CB Richard Ellis (CBRE) says that value buying is happening mostly in suburban locations as that is where the current supply is. “Certain pockets in Gurgaon and Noida, where the price earlier used to be Rs 65 lakh-Rs 1.5 cr, today have deals to offer anywhere between Rs 35 lakh to Rs 50 lakh! Developers have reduced the total ticket sizes, adjusted area, price and given amenities. This has got people back and is making them hunt for value deals right now.”

Locations such as Gurgaon, Faridabad, Noida in Delhi NCR and Navi Mumbai and Thane in Mumbai are some of the good locations for value buying, feels Navin M Raheja, chairman and managing director of Raheja Developers. “Anything which is available between Rs 2,500 to Rs 3,500 per sq ft is the right price depending, of course, upon the location and infrastructural facilities available in the vicinity with specifications offered.” The developer is soon going to launch a housing project, ‘Raheja Shilas’ near IGI airport wherein the price would range between Rs 2,575 to Rs 2,875 per sq ft.

Raheja further adds that there are three kinds of value buying that are taking place in the real estate market right now. Ready to move in residential property in and around metros and their suburbs, ready to move in commercial property which is already leased or generating income and low income and middle-income housing ranging from Rs 15 lakh to Rs 40 lakh are the primary types of value purchases in his opinion.

Many of those who were holding out have also decided to make a purchase now as prices have bottomed out. Plus with many affordable housing launches by developers, the view is that prices are more pocket friendly at this time. “Prices have reached the bottom and in these prices you are bound to get good appreciation in future. So if you are buying a particular property now, one is definitely going to feel later that they grabbed a good deal,” says Vijay Jindal , CMD, SVP Group.

Jindal’s view is shared by many others in the market as well. Smaller investment opportunities with a starting price bracket of Rs 35 lakh-Rs 40 lakh have fuelled the demand. “Earlier the prime focus was on high-end purchases, but today, the conversions are happening mostly for smaller properties. At least 50-60% conversions are there in the market today for properties priced between Rs 30 lakh – Rs 80 lakh, 20-25% are for the expensive ones priced between Rs 90 lakh – Rs 2.5 cr and a miniscule number is for the ones above Rs 5 cr,” says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm.

But are people also looking at Tier II and Tier III cities right now, which were prime investment hubs in the good times? “People are not primarily Land as investment

seeing these locations for investment at this time. Value buys here are mostly end-user driven,” adds Magazine.

However it’s best not to overlook the pros and cons before deciding on such value buys. Though the pricing and the product may both look highly appealing, it’s best to read the fineprint carefully. This will hold in good stead for the future. Rajeev Rai, vice president, corporate, Assotech, advises about key strategies that should be followed. “One shouldn’t get carried away by sops or discounts offered and one must also not ignore the sold stock status of such a project. As far as the dos are concerned, one must set their priority of the price, location, size etc. A due diligence about the supply and demand of such projects is necessary. Lastly, one must check the developer’s profile, delivery schedule and legality of the project.” Assotech has projects such as The Nest in Crossings Republik at Rs 2,300 per sq ft and Metropolis in Rudrapur at Rs 1,850 per sq ft.

So if you have been thinking of investing your money in a home, it’s the right time to go deal hunting. Negotiate a bargain, go for value and close the deal.

http://economictimes.indiatimes.com/features/the-sunday-et/property/Best-time-to-look-for-a-value-deal-in-real-estate/articleshow/5032421.cms

Piramals Group Setting Up Second Real Estate Fund Amounting 500cr

Indiareit Fund Advisors, which is promoted by the Piramal Group, is setting up its second real estate fund with a corpus of Rs 500 crore and expects to raise the money from investors by the end of this year. The group had earlier floated Indiareit Fund, a $450-million (Rs 2,025 crore at current exchange rates) real estate fund in 2006 and the proposed new Rs 500-core fund is over and above this. The Piramal Group has a presence in sectors, such as healthcare, diagnostics, glass manufacturing and real estate.

Said Ramesh Jogani, managing director and CEO, Indiareit Fund Advisors: “The Piramal Group is setting up a new domestic real estate fund and we are in the process of raising an overall corpus of around Rs 500 crore for it. This fund will invest in projects in Mumbai, New Delhi and Alibaug, a tourist town near Mumbai, and will be restricted to the residential segment. The new fund, apart from having a real estate focus, may also invest jointly with the existing fund.” It is learnt that the Rs 500 crore will be raised from high net worth individuals (HNIs) and institutional investors, with 90% coming from HNIs and the balance from institutional investors. The funds, added company officials, will be raised only from Indian citizens.

The officials said some real estate projects, where the money could be invested, have been identified and the new fund will look at a 20% return on investment on a per annum basis. Indiareit has already invested Rs 1,500 crore in residential projects in Bangalore, Chennai and Mumbai and Alibaug. The fund is said to be keen on investing in Samira Habitats, a Mumbai-based realty firm.

Source : http://www.indianrealtynews.com/real-estate-trends/piramals-group-second-real-estate-fund-amounting-500cr.html

Raymond diversifies into real estate business

Raymond, the Singhania group’s flagship company, has forayed into real estate development. The board of the company today approved using 15-20 acres of surplus land in Thane for developing affordable residential property. The real estate development would be handled by a division of Raymond.

“Depending on the response to this project, we will decide our future strategy for the real estate business,” Chairman and Managing Director Gautam Singhania said.

Mumbai-based Raymond is the world’s third-largest maker of worsted fabric, used in making men’s suits. The company has a plant in Mumbai’s neighbouring town, Thane, which has surplus land. It declined to specify the full size of the surplus, but just said 15-20 acres had been earmarked for the first phase of development.

“The plant will remain there. We will use a part of the surplus land according to the regulatory approvals we have received,” said Singhania.

He declined to give any details regarding the investment or time frame for the projects. “We have just got the board’s approval. Now we will look into details,” he said. The company is appointing an internal team to start with. It would gradually recruit experts for the real estate business.

The realty sector has caught the fancy of quite a few textile companies, including Bombay Dyeing, Century Textiles and Alok Industries. Since most textile mills in Mumbai have shifted operations to the hinterland of Maharashtra or Gujarat, the land thus freed is being used by real estate developers for building residential and commercial complexes.

The textile industry has failed to attract foreign direct investment and, with the slump in the international markets, textile companies are venturing into different sectors.

For instance, Century Textiles had shut operations in Mumbai’s Worli area last year. The 30 acres owned by the Birla company is to be converted into commercial real estate, especially for IT and IT-enabled services.

The company had reported Rs 231 crore of loss for the financial year 2008-09, against a profit of Rs 18 crore in the previous year. The revenue of the company for 2008-09 grew to Rs 2,628 crore, against Rs 2,444 crore in the previous year.

Source : http://www.business-standard.com/india/news/raymond-diversifies-into-real-estate-business/370478/

Yesterday once more: Realty firms start raising prices

Mumbai: DLF, the country’s largest property developer, will soon conduct a poll among property brokers to decide the pricing and number of apartments to be offered in the second phase of its Capital Greens project in West Delhi.

Yesterday once more: Realty firms start raising prices

It’s a novel experiment, but property brokers in Delhi say the company is trying to test the waters in view of the vastly changed situation in the real estate market.

Though DLF’s spokesman said the company is yet to fix a final price, feedback from brokers suggests the company is exploring the option of charging around Rs 7,000 a square foot (sq ft). At this level, the price is 56 per cent more than Rs 4,500 a sq ft it charged in the first phase of Capital Greens, when DLF had sold 1,356 apartments in a single day in April this year.

Developers such as DLF, Unitech, Omaxe, Parsvnath and HDIL were among those that cut property prices or forayed into mid-income housing, which were 25 to 30 per cent lower than prevailing prices, in the last quarters of 2008-09, as the economic slowdown and fears of job losses impacted home sales. Property sales fell 50 per cent from their peak in 2007-08 (when prices had more than doubled froom 2004-05) as buyers stayed away.

Those days are rapidly becoming a distant memory, with many developers increasing prices 15 to 30 per cent the moment they became sure of demand returning.

Take Mumbai-based Lodha Developers. The developer has increased prices 30 per cent in its premium housing project, Lodha Primero in South Mumbai, since its launch about four months ago. It has already sold 90 per cent of the apartments. For its mid-income projects, Lodha has increased prices 12 to 14 per cent.

Neptune Group, another Mumbai-based property developer, has increased prices in its Neptune Flying Kite project in Bhandup 26 per cent, from Rs 4,691 a sq ft a couple of months ago to Rs 5,900 a sq ft.

The national capital region (NCR) is not far behind with housing prices in Gurgaon having moved up to Rs 3,200 a sq ft from Rs 2,800 a sq ft six months back, brokers in the locality say.
Unitech, the country’s second largest developer, which is mostly focusing on mid-income housing projects under the Unihomes brand, is also considering a minor price rise in its home prices, a company official says.

“Markets are looking up and this is prompting developers to come up with increased prices for their Navratra launches. Prices are up by 15 to 20 per cent in the secondary market,” says Anil Singhal, a property consultant based in Connaught Place, Delhi. Navratra, a Hindu festival, is considered auspicious for property buys and developers generally launch new projects in the 10-day period.

Developers say the move to increase prices is in tune with rising demand from home buyers. “We are not hoarding our property. When the market was down, we were quoting low prices. Since it has moved up, we have increased prices. We sell according to the forces of demand and supply,” says Nayan Bheda, chairman and managing director of Neptune Group.

Adds R Karthik, senior vice president of marketing at Lodha Developers: “It is a standard way of operating projects. It is a strategic as well as tactical move so as to offer value for those who have bought properties.”

However, the move to raise housing prices has had its fair share of criticism. Analysts warn that property sales may fall again if developers increase prices sharply since the economic recovery is hardly complete.
“Demand is coming back with much difficulty. It does not make sense to increase prices now. They have to hold prices steady till demand comes back fully,” says Anuj Puri, chairman of Jones Lang LaSalle Meghraj (JLLM), an international property consultant.

According to a recent CII study, the Indian real estate market is expected to recover only in 2010-11. However, the government growing fiscal deficit is expected to impact the sector negatively with increases in the cost of funding and falling return on investments through exchange rate variations.

Some have been once-bitten-twice-shy and have avoided raising prices. Parsvnath Developers Chairman Pradeep Jain says he doesn’t see any scope to increase prices for the next couple of months. “We have to concentrate on selling properties and generating internal accruals first. We are planning to sell properties with attractive discounts in the festive season,” says Jain who is also president of NCR chapter of the Confederation of Real Estate Developer’s Associations of India (Credai).

Going by the trend in property prices in recent weeks, few of his counterparts in other real estate companies agree with Jain.

Source:http://news.in.msn.com/business/article.aspx?cp-documentid=3229249

http://www.realestatechannel.com/international-markets/vacation-leisure-real-estate/leela-palaces-hotels-resorts-leela-kempinski-gurgaon-taj-palaces-oberoi-hotels-resorts-trident-krishnan-nair-onno-poortier-leela-palace-kempinski-bangalore-1384.php

Mall developers and retailers in the country appear to be slowly warming up to the revenue-sharing model. Mumbai-based Entertainment World Developers Pvt Ltd (EWDPL) has just launched a mall-in-mall concept called Treasure Showcase, which allows non-mall brands to sell their merchandise without having to pay rent or common area maintenance charges. The company will, however, take a percentage of the retailer’s turnover as its share, EWDPL chairman and MD Manish Kalani said. Hitherto, despite being touted as the best possible arrangement between a mall developer and a retailer, the adoption of the revenue-sharing model has been less than encouraging. The handful of success stories include Inorbit Mall in Mumbai, Select Citywalk in south Delhi and the soon-to-be-launched Palladium mall at High Street Phoenix, Mumbai.

The parties cite incorrect retailing format, opacity in recording sale transactions, hesitation in sharing books of accounts and lack of successful track record etc among the reasons for a slow adoption. “A lot of retailers have problems with sharing sales/revenue numbers. It’s a real task for the mall developer because retailers are hesitant in doing so,” Dharmesh Jain, chairman and managing director of Nirmal Group of Companies, said at the recently concluded CII Real Estate Conference. Revenue sharing generally involves the developer charging the retailer on the basis of a minimum guarantee or percentage of turnover, whichever is higher, or a combination of the two. The minimum guarantee figure is arrived at by taking into account the ongoing market lease rate that can be commanded for the space being occupied by the retailer. As for the percentage of sales, it ranges between 3% and 25% depending on the nature of business being conducted by the retailer.

Pranay Sinha, managing director of Star Centres, feels the key lies in being able to choose tenants who can generate enough business to cover the cost of housing their stores in the mall. “It’s a science,” he says. “Besides, once the retailer is assured that the mall developer/ management will channelise all their efforts in doing things that will eventually improve the retailers’ business, they have no issues sharing an X% of their revenues with the developer.” The demand-supply imbalance in the retail real estate space has changed in favour of retailers in recent months. Over a year ago, they were chasing mall developers for space at unreasonable rates. However, today, with new properties coming up and retailers playing safe on expansion plans, lease rentals have taken a knock of 30-35% across the country.

However, few retailers favour revenue sharing over lease rentals. Many see it as a mere marketing ploy to lure retailers in. “It always is accompanied by a host of add-ons that eventually work to the disadvantage of the retailers. There is no clarity on what exactly is my per square foot cost,” says Jay Gupta, customer care associate and managing director of The Loot India Ltd. On their part, developers feel most retailers are yet to establish themselves as professional outfits. Vishesh Rawat, senior manager — retail, Ansal Plaza, says, “Maintaining transparency in sales and accounting processes are crucial for building faith in the mall owners. Besides, most of them are new and don’t have long and successful track records of retailing profitably in Indian markets. Retailers make profits or losses primarily due to their business format and operations. Why should we have a stake in their profits or losses?” he asks.

B S Nagesh, vice-chairman, Shoppers Stop Ltd, sums up the situation. “People are still experimenting and sanity can be achieved only once both the businesses reach a certain level of maturity. Till then it will continue to be a highly debatable issue of choosing between fixed rentals and revenue sharing as a business model.” Going by industry reports, barely 25 of the 250 odd malls in the country are malls in the real sense, though around 50-75 are slowly reaching that level.

Source : http://www.indianrealtynews.com/retail-market/mall-in-mall-concept-receiving-warm-response.html

Mumbai redevelopment projects may get a boost on higher FSI

The increase in the floor space index (FSI) could just be the shot in the arm for Mumbai’s redevelopment story. A recent amendment to Section 33(7)  of the Development Control Regulations, 1991, has raised FSI, the ratio between the allowed built-up area and plot area available, for redevelopment of cessed buildings from 2.5 to 3. An FSI of 1, for instance, on a plot of 100 square metre implies that one can have a built-up area of 100 sq mt.

This comes at a time when redevelopment could revive the sector. Quality land has come at a premium in the commercial capital of India that has resulted in prices often getting to unaffordable levels. “Redevelopment of projects, which were shelved when the market fell, would now be revived,” said Maharashtra Chamber of Housing Industry (MCHI), chief executive officer, Zubin Mehta. He added that vertical growth is the only option that Mumbai is faced with.

A lot of industry trackers, while admitting to that, maintained the road ahead could be fraught with challenges. For instance, the law requires all parties to agree on how a project should be executed. What often comes in the way is a stubborn tenant or a powerful builder, who defers the project or in some cases, or both.

The other issue is that of the ownership of a building. Most structures were built in 1940s, when the conveyance deed of the land and structure was not drafted in the society’s favour. Besides, during the 80s and the ensuing decade, when FSI was low, developers did not transfer the building’s title to the society. The rationale behind this was apparently to take advantage of a higher FSI. In addition to this, an issue like the small plot size with too many occupants is hard to ignore. This is the situation in densely populated areas, such as Mahim, Mazgaon and Bhuleshwar, where there could be almost nothing left for the developer to sell.

If residents are asked to relocate to distant places, there could be a divided opinion among them. For that matter, if residents are not keen in staying in the redeveloped structure, the project could become unviable at a time when prices are falling. The limited number of redevelopment projects is on account of this.

From the law’s point of view, a building that is not in the name of the society cannot go in for redevelopment. Take the case of George Nagar, a residential complex in suburban Andheri, where three out of seven buildings do not have the conveyance title.
Effectively, the redevelopment process is in limbo. Also, the instance of projects in Mumbai going beyond the promised deadline is not entirely unheard of. This needs to be understood from a position where a builder has already cashed in on the saleable component resulting in little inclination to complete what is remaining.

In Chembur, located in central Mumbai, a builder backed out of a project in 2008 not long after the market started moving southwards. The tenants, he thought, would be better off than him. “The impact of pricing is more visible in suburbs as compared to the island city, which puts the viability of the project at a risk,” said Pujit Agarwal, spokesperson for the Property Redevelopers Association.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Mumbai-redevelopment-projects-may-get-a-boost-on-higher-FSI/articleshow/5007066.cms

Prime Indian property prices up 15%

With residential demand on rise once more, particularly in key destinations such as New Delhi and Mumbai, India property prices in these regions have appreciated by up to 15% in recent months, as developers seek to cash in, by increasing prices across their projects.

Experts monitoring the Indian property market fear that the there recent hike in property prices could adversely affect demand.

Vikas Chimakurthy of Realty fund Kotak Investment Advisors said: “There was a substantial demand, especially in the mature markets, after prices dropped a few months ago.

“Today, potential customers are not willing to buy properties at these prices.”

Abhishek Lodha, director at Lodha Developers, a Mumbai-based company which has property projects in and around Delhi, says that recent residential price hikes in Delhi and Mumbai “is not much and is the result of the improved market conditions,” he said.

India’s largest property firm, DLF, also confirmed that property prices being increased. “Yes, there has been a price increase though it is still limited to some projects nearing completion,” said DLF executive director Rajeev Talwar.

Source : http://www.google.com/url?sa=X&q=http://www.homesoverseas.co.uk/news/Prime_Indian_property_prices_up_15/12800-1002&ct=ga&cd=14fJzKZr8_o&usg=AFQjCNEugoYxA0YyQm9Z22vysghyyQ0ckA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Redevelopment of cessed bldgs: FSI hiked to 3

MUMBAI: Just before the model code of conduct came into force, the state hurriedly increased the FSI for redevelopment of cessed buildings under  Section 33(7) of Development Control Regulations, 1991, from 2.5 to 3. The government resolution for this was issued by the urban development department on September 2.

There are more than 16,000 dilapidated buildings, mostly in the island city, which pay a cess to the Mumbai Repairs and Reconstruction Board. The board repairs/reconstructs these buildings as it is not feasible for the landlord to do so, given the paltry rent he gets. These buildings are also redeveloped by private developers under Section 33(7) or by the tenants themselves.

Redevelopment of these buildings is a major poll issue in areas such as Colaba, Grant Road, Girgaum, Khetwadi and Kalbadevi. “This was really needed as even slum-dwellers get a flat of 269 sq-ft and the repairs board gives a flat of minimum 300 sq-ft. This meant that tenants of properties being developed under 33(7) were suffering,” said NCP MLA Sachin Ahir, chairperson of the repairs board. Due to the proposed modification, tenants of cessed buildings will get flats with a minimum area of 300 sq-ft. Earlier, they were entitled to 225 sq-ft. The saleable component for the builder redeveloping the property too will go up.

Tenants of cessed buildings having bigger flats will also benefit. Earlier, they got houses up to 753 sq-ft, whereas now they can get bigger houses but the tenant or occupant will be charged for area exceeding 753 sq-ft. The charges for the excess area will be the cost of construction and these rates will be decided by the government from time to time. Correspondingly, an equally high FSI has been given to builders.

A corpus fund will be created by the developer for the maintenance of the building for 10 years.

Source : http://timesofindia.indiatimes.com/news/city/mumbai/Redevelopment-of-cessed-bldgs-FSI-hiked-to-3/articleshow/4974206.cms

Housing Development Says Demand From Overseas Indians Is Rising

Sept. 5 (Bloomberg) — Housing Development Finance Corp., India’s biggest mortgage lender, said home demand from Indians living overseas is rising as the global economy recovers and interest rates remain low.

Home loans to non-resident Indians currently account for 14 percent of Housing Development’s business, Joint Managing Director Renu Sud Karnad said today at a property exhibition in Singapore. The pace of increase in loans extended to non- resident Indians in Singapore could surpass the company’s 20 percent per annum rate of loan growth in the Middle East that contributes the biggest share of business overseas, Karnad said.

Consumer demand for home loans in India is reviving after the central bank cut its key rate by 425 basis points since October to the lowest on record in a nation that has a shortage of 24.7 million housing units. Housing Development in July reported a 21 percent increase in first-quarter profit to 5.65 billion rupees ($116 million) as a drop in borrowing costs and decline in property prices lifted demand for home loans.

“It’s a good time to invest now as prices have come off quite a bit due to the global crisis but have started to inch up already in the past two months, especially in Mumbai and Delhi,” Vice Chairman and Managing Director Keki Mistry, said at a press conference today. “Interest rates won’t be rising too much due to ample liquidity.”

Property prices in central Mumbai and New Delhi have risen 30 percent since May after falling 35 percent to 40 percent during the global crisis, Mistry said.

Source : http://www.bloomberg.com/apps/news?pid=20601091&sid=a2V.zYjgUvOE