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

Navi Mumbai real estate prices rise

Notwithstanding the concerns over the proposed international airport in Navi Mumbai, real estate prices around the satellite city have rising for the past one month.

During the past 30 days, prices of medium residential apartments rose by Rs 300-500 per square feet across various nodes in the city. The present prices range at Rs 2,500-3,000 per square foot across nodes like Kamothe, Panvel, Kharghar, Khandeshwar and CDB Belapur, said Srikanth Puduval, a real estate agent.

The prices at nodes far from the proposed airport site — like Airoli, Koparkhairane and Nerul — managed to hold steady at around Rs 3,000 per square  foot(medium residential apartments), despite the financial crisis. This also varies, as prices are different for different builders, while high-end and premium complexes are priced higher.

“The soaring of prices is based on speculation that the airport would eventually get clearance.

The price rise is across residential and not in retail or commercial structures, but as the area develops (with proposed Special Economic Zone and airport), the hike will spill over to commercial establishments also,” Cushman & Wakefield Executive Director (Occupier Solutions) Arvind Nandan told Business Standard.

Real estate prices are determined by certain benchmarks, and prices of Rs 2,500-3,000 for suburbs seem to be on the right side.

Source : http://www.business-standard.com/india/news/navi-mumbai-real-estate-prices-rise/362494/

Airport shift to affect Navi Mumbai property prices

With the crash-landing of the Navi Mumbai Airport, experts believe that the real estate bazaar will also suffer. According to experts, if the proposed second airport is shunted out from Navi Mumbai, real estate prices will drop up to 20 per cent further. G S Gill, vice chairman of the City and Industrial Development Corporation (CIDCO) even said, “The airport will make Navi Mumbai a metro city or it will be like another Dombivili or Kalyan.”

Most developers in Navi Mumbai, while advertising for their projects, had proximity to the airport as one of the major points in their brochures and advertisements. If the proposed airport doesn’t come up, real estate prices in areas like Kharghar, Kamothe, JNPT and other important areas will fall by more than 20 per cent. Rupesh Parekh of Bhagya Kootir, a real estate brokerage firm situated in Navi Mumbai, said, “The rates in Navi Mumbai have already come down by 40 per cent, but if the proposed airport is shifted, the rates will further drop by 20 per cent.”

Manohar Shroff, Secretary, Navi Mumbai Chamber of Housing, also echoed the same emotions. “If the airport in Navi Mumbai is dropped, the sentiments of the buyers will be shaken. It will result in low sales,” added Shroff.

However, builders claim that it will not have much effect on their sales. Vineet Malhotra, chairman of Arrow Manhattan Engineering that has projects near the Navi Mumbai SEZ nearly nine kilometres away from the proposed airport, said, “The airport is for the classes and not for the masses. It will affect only two to three per cent of clients. Projects at Kharghar and nearby areas will be affected.” However, Malhotra’s project caters mostly to NRIs, who, as he puts it, belong to “the classes”.

Rajesh Prajapati, founder president of the Builders Association of Navi Mumbai, says proximity to the airport was one of the plus points for purchasing real estate in this area, but not the only one. “The airport is an attraction, but people haven’t bought real estate because of it.

“Infrastructure and education are the biggest attractions. The government should decide whether to dump or clear the airport plan. It’s been more than 15 years now,” said Prajapati. Apart from builders, the farmers whose lands are being priced at Rs 1 crore per acre will suffer. “We won’t find any takers,” said Parekh.

The letter
Environment minister Jairam Ramesh wrote a letter to the chief minister, suggesting that the state should look for another site for a second international airport. The airport, if ever developed, will be through the public-private partnership and is estimated to cost Rs 3,200-4,000 crore. It will handle 50-55 million passengers annually. The letter from the environment minister points out that the chosen site includes 150 hectares of mangrove land and 340 hectares of coastal marshy lands, including 118 hectares of water body.

Source : http://www.mid-day.com/news/2009/jun/210609-Airport-shift-Navi-Mumbai-real-estate-20-percent-drop-Mumbai-news.htm

After DLF, Rahejas want to surrender SEZ

Real estate developer K Raheja Universal Private Ltd wants to scrap one of their notified special economic zones (SEZs) and also surrender a part of another zone, citing lack of demand from the information technology sector.

The Mumbai-based developer has approached the Board of Approval (BoA) regarding this, which will decide on the matter on June 17. This is the second realtor after DLF Ltd, which too sought cancellation of notified SEZs. Notification is the final clearance for a SEZ, after which it starts enjoying the direct and indirect tax benefits prescribed under the SEZ Act.

K Raheja has asked for denotification of its 13 hectares IT zone based in Navi Mumbai. In addition, the company also wants to surrender about half of the 20.65 hectares of another infotech SEZ in the same area. These are the only two notified SEZs for the Mumbai-based realtor.

When contacted, K Raheja officials declined to comment.

While asking the BoA to denotify the zones, the company has blamed the lack of demand for space for IT-related zones. It also said that prospective clients have halted their expansion plans indefinitely due to the ongoing economic slowdown. Both the zones were notified in mid-2007.

The company has told the BoA that both the plots are vacant, and no construction activity has taken place. Thus, no duty or tax benefits were availed by the company.

The BoA has taken up de-notification requests of five zones till now, all belonging to DLF. While one of the Delhi-based zones has been de-notified, the BoA has given in-principle approval to scrap four other notified zones, under the condition that DLF will have to pay back all the duty benefits it availed from the government.

All these notified SEZs, which the developers have surrendered, belong to the infotech sector.

Though there are no provisions related to de-notification in the SEZ Act, the law ministry has told the commerce ministry that since the board has power to notify zones, it also can also scrap it, if developers want to exit the zones.

DLF seeks permission for building commercial space

Even as DLF got conditional approval for scrapping four infotech zones, it has asked the BoA under the commerce ministry to build 2,28,000 sq feet of commercial space, service apartments and housing for employees in four SEZs at Gurgaon, Hyderabad and Chennai, which the company is developing. All this construction activity has been proposed in the non-processing area of the zones, where supporting infrastructure for units in the processing area is built.

Source : http://www.business-standard.com/india/news/after-dlf-rahejas-want-to-surrender-sez/360966/

Real estate market could recover by Diwali

After a long time we are witnessing real estate developers taking pride in reducing or slashing rates in Mumbai, Thane and Navi Mumbai to encash on  the existing demand in the real estate market.

The good deals may be offered for a few weeks or for the first ten properties or for a killer deal for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the willingness to connect with the “real” pricing has dawned on the developers to sell at reduced prices to encourage more and more sales.

With the new UPA government there are a lot of hopes and it will be interesting to see how the next few months unfold for the property market. We still need a great deal of transparency to be infused in the way we deal in the property market.

The sales teams in the builder/ developer offices are at their all-time creative best with sales tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of sorts of the kind witnessed earlier this year, when sales plummeted big time.

They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is an even greater need to price competitively, maybe with a lower profit margin, than holding on to the price and project as the interest meter runs. The mantra for developers in the present times, I guess, is to be aware of the markets (realistic demand and supply) and the competition, which the buyers know today.

For a buyer to understand the market more clearly before making a decision, he/she must understand at which juncture the market is hovering; also, with fresh developments in the political arena, what the impact will be in coming months. An important point to note would be that, yes, there has been a correction up to 15 to 30% already in the market post December 2008 and prices have come to September 2008 levels, which were already high in any case and up on account of the festival demand which happens nearly post monsoons by default.

After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop again, but the next couple of years at least will be stable, as after a correction you cannot go up again quickly. With a stable government we can expect more rational policies but a stock market kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Let us be sensible for once; just when things have just started moving a little, let us not think of killing the golden hen and taking out all eggs at one time.

A good 2BHK in the suburbs is not less than Rs 6 to 8 million, which is not cheap by any standards. Our city still does not have the appropriate  infrastructure to support high pricing in the suburbs, especially with connectivity issues , and with a lot of developers under a liquidity crunch it is essential to send out the right signals. The buyer today is under tremendous pressure even when it comes to documentation and with many banks tightening the belts on approvals , it is essential to invest in a project which offers 100% complete paperwork.

All of us know that with the archaic legal systems we live in, there are always loose ends somewhere and this is one area all developers should focus on. Nearly 78% of buyers in today’s market would opt for a loan to procure the new property and most would prefer a loanto-value ratio (LTV) of around 80-85%, which typically means that if the title is not clear and transparency of the paperwork is missing, the deal will not happen.

The uncertainty and fear factor still weighing heavily on a buyer’s mind gets manifested in the fact that 59% of respondents on a survey would like to buy only a ready possession property or a property nearing completion as past trends have shown delays in construction.

With the current economic slowdown, they are more concerned today about possession timelines. Only about 20% home buyers are keen to invest in properties at their launch stage at attractive prices, and even that, only of selective developers who have a track record. This is as per a survey that a leading bank conducted after the recent Thane exhibition. The developers need to work very hard to win this confidence.

In order to capture the client who is looking to buy a home in today’s market conditions, one should look at microanalysis on both demand and supply first. The maximum demand is in the price range of Rs 40 lakh, going up to the Rs 1 crore bracket, and that too, for ready-to-move into homes.

Looking at the buyer’s mind, if he is looking at Malad, he wants to try to find a house in Andheri, or similarly, if he is looking at Navi Mumbai, he wants to experience Chembur or Ghatkopar or any other location where he can compromise and get it within a particular price range.

Of course, when he is out on the field he wants to know if rates have bottomed out in the location, project or surrounding location. This typically means a delayed decision of the informed buyer; from the time he puts together his first potential shortlist, it can easily be a period of a month or two. If builders start telling them they will increase prices, they will go to the nearest competitor. In a buyer’s market, they know they can pit one against the other.

The coming weeks will be interesting, with stock markets climbing, recession clouds disappearing and the hopes that the new UPA government will bring in fresh policies for the housing industry. With all this, there is a strong chance that there may be a great deal of movement during the Diwali period.

The cycle had slowed down in Diwali 2008 and can come back with a bang September 2009 onwards, but this depends on prices being stable. It may be an opportune moment through the end of the year to sell as much and increase liquidity and focus on new projects. So, let us hope with this competition, the buyer encashes.
(Sandeep Sadh is CEO, Mumbai Property Exchange. The views expressed are personal.)

Source  : http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Real-estate-market-could-recover-by-Diwali/articleshow/4568405.cms?curpg=2

Indiabulls Plans Eight Residential Projects

Property developer Indiabulls Real Estate (IBREL) plans to build residential projects over 9.8 million square feet in the current fiscal year to generate cash flows. The Mumbai-based developer planned to launch eight projects in six cities as part of the development plan, the company told analysts and investors as part of its preparation for the proposed qualified institutional placement (QIP) issue, through which it aims to raise as much as $600 million (Rs 3,000 crore). The company is already talking to investors to raise at least $150 million (Rs 750 crore) from sale of shares to select investors as part of the plan.

All the projects, mostly in the affordable housing category, to be launched this year are expected to be completed by December 2013, according to a presentation prepared by the company. he proposed residential launches include, Riverside in Ahmedabad, Indiabulls Greens, Navi Mumbai, Lakeview Park, Chennai, Indiabulls Paramount, Indiabulls Metropolitan and Indiabulls Orion, Gurgaon, Indiabulls City, Sonepat (NCR) and Hillside View, Vishakhapatnam.

Indiabulls’ commercial leasable area in Mumbai is expected to go up to 5 million square feet from 3.4 million square feet after the Maharashtra in November 2008 raised the maximum developable area to 4 from 2.66. The company said it also has agreed to sell a part of its One Indiabulls Centre, located at Lower Parel, to a foreign government body for an implied rate of Rs 18,818 square feet. It didn’t name the foreign government body though industry sources said the property was sold to the British Council (BCI) for Rs 30 crore. Indiabulls Retail owns a 45 per cent stake in Indiabulls Property Investment Trust (IPIT), the Singapore-listed entity. IPIT owns two properties at Lower Parel — Indiabulls Centre and Elphistone Mills.

Source : http://feedproxy.google.com/~r/Indian-Realty-News/~3/VOtlRbHWpC4/indiabulls-plans-eight-residential-projects.html

City Developer’s Reluctance to Drop Prices Provides Business Opportunity to Hometown Developers

The reluctance of several real estate developers in Pune and Mumbai region to scale down property rates in keeping with the market gloom has turned into a business opportunity for players from other states. Sensing a good business opportunity, they are entering the Mumbai-Pune ring. They are wooing buyers, originally from their states, back home with the promise of an affordable home. This trend is not new, but this is perhaps the first time builders are looking at weaning away potential buyers from big cities such as Mumbai, Delhi and even Dubai. Real estate players from states like Karnataka, Andhra Pradesh and Kerala are showcasing their properties in the city at a corporate level, giving customers the option to own a house in their homeland at much lower rates.

The latest on the list is Oxoniya Builders and Developers Pvt Limited from Kerala which conducted a two-day property show in Pune and Navi Mumbai on Saturday and Sunday. Customers were urged to go for homes in luxury apartments on the riverfront at Aluva or Kakanad in Kerala, where the Dubai Internet City model Infopark is set to come up. “We are getting a tremendous response from the region. People here are looking forward to buying property in their homeland. In these times of economic slowdown, people expect property rates to come down and since it is not happening in the region, they may be opting for properties within their budget in their home states,” said Anith John of Oxoniya.

The thick Malayalee population in the Mumbai-Pune region is one of the main factors that is prompting real estate players from Kerala to target customers here. The prices of flats offered by the Oxania Group range from Rs 11 lakh to Rs 40 lakh. “We conducted a market study in the Mumbai-Pune region and found that there are about 10,000-20,000 Malayalees who wish to buy properties in Kerala. That proved true as we got 6-7 bookings, hours after starting the property show,” said John. Builders in Kerala, too, said that as compared to last year, enquires and bookings from this Pune-Mumbai region had gone up recently, which is a new trend. “There have always been potential buyers in the region. Builders here are getting enquiries about apartments in Kerala and bookings have gone up,” said M D Jayaraj, president, Kerala Builders Association.

Even in Bangalore, enquires from the region about properties have gone up. “Most of our customers were so far either from Bangalore or NRIs. Now we are actually getting serious enquires from Pune and Mumbai. When we are finding it tough to fill up our apartments in Pune, we are actually finding takers from the western region for our apartments in Bangalore. We also plan a property show soon,” said an official of a leading real estate company.

http://www.indianrealtynews.com/real-estate-india/pune/city-developers-reluctance-to-drop-prices-provides-business-opportunity-to-hometown-developers.html

Can’t afford a home in city? There’s one up for grabs in homeland

The reluctance of several real estate developers in Pune and Mumbai region to scale down property rates in keeping with the market gloom has turned into a business opportunity for players from other states.

Sensing a good business opportunity, they are entering the Mumbai-Pune ring.

They are wooing buyers, originally from their states, back home with the promise of an affordable home.

This trend is not new, but this is perhaps the first time builders are looking at weaning away potential buyers from big cities such as Mumbai, Delhi and even Dubai.

Real estate players from states like Karnataka, Andhra Pradesh and Kerala are showcasing their properties in the city at a corporate level, giving customers the option to own a house in their homeland at much lower rates.

The latest on the list is Oxoniya Builders and Developers Pvt Limited from Kerala which conducted a two-day property show in Pune and Navi Mumbai on Saturday and Sunday. Customers were urged to go for homes in luxury apartments on the riverfront at Aluva or Kakanad in Kerala, where the Dubai Internet City model Infopark is set to come up.

“We are getting a tremendous response from the region. People here are looking forward to buying property in their homeland. In these times of economic slowdown, people expect property rates to come down and since it is not happening in the region, they may be opting for properties within their budget in their home states,” said Anith John of Oxoniya.

The thick Malayalee population in the Mumbai-Pune region is one of the main factors that is prompting real estate players from Kerala to target customers here. The prices of flats offered by the Oxania Group range from Rs 11 lakh to Rs 40 lakh. “We conducted a market study in the Mumbai-Pune region and found that there are about 10,000-20,000 Malayalees who wish to buy properties in Kerala. That proved true as we got 6-7 bookings, hours after starting the property show,” said John.

Builders in Kerala, too, said that as compared to last year, enquires and bookings from this Pune-Mumbai region had gone up recently, which is a new trend. “There have always been potential buyers in the region. Builders here are getting enquiries about apartments in Kerala and bookings have gone up,” said M D Jayaraj, president, Kerala Builders Association.

Even in Bangalore, enquires from the region about properties have gone up. “Most of our customers were so far either from Bangalore or NRIs. Now we are actually getting serious enquires from Pune and Mumbai. When we are finding it tough to fill up our apartments in Pune, we are actually finding takers from the western region for our apartments in Bangalore. We also plan a property show soon,” said an official of a leading real estate company.

Source : http://www.indianexpress.com/news/cant-afford-a-home-in-city-theres-one-up-f…/443451/

Commercial realty rates set for a correction, 20% to 40%

Mumbai After the decline of residential realty rates, the commercial real estate market in the city is expected to make a 20-40 per cent correction.

A recent report by Jones Lang LaSalle Meghraj has predicted the short term rental corrections in various micro markets across the country. The report, The Slope of the Decent, states that riding on a boom and expecting tremendous demand for commercial space, developers have constructed extensively across cities from 2005 to 2008. This is evident from that the commercial space supply in the country grew more than three times in four years, from 43 million sq ft by the end of 2004 to 140.7 million sq ft by 2008-end.

However, the JLLM report states that rentals have started falling and are expected to drop further over the next two years. The steepest fall has been predicted in Central Mumbai (Worli, Parel, Prabhadevi, Lower Parel, Dadar), Western suburbs (Malad, Goregaon) and Eastern suburbs (Ghatkopar, Vikhroli, Kanjurmarg, Powai). These areas are set to witness high vacancy levels and a sharp decline of rates of 30-40 per cent from its peak levels in 2008. It attributes the high price correction to the oversupply and appreciation that these areas have seen in the recent past.

It states, “good infrastructure and proximity to the city led developers and occupiers to believe in the growth potential of these areas. Therefore, while rentals surged, a lot of projects were put under construction in these markets.”

The suburban areas of Thane and Navi Mumbai, which have seen huge projects being planned as land was available at lower rates than in Greater Mumbai, are expected to be hit next by the slump. Commercial rentals in these areas are expected to fall by 30-35 per cent.

The commercial business districts are set to be the least affected as they have a low supply. However, since rentals in these hubs have reached unaffordable levels (with a growth rate of 250 per cent), the report predicts a 20-25 per cent correction in such places. These include the CBDs of South Mumbai (Nariman Point, Cuffe Parade, Fort, Ballard Estate) and Bandra Kurla Complex.

The report also says the demand for commercial spaces from manufacturing sectors is expected to increase in future.

Source : http://www.expressindia.com/latest-news/commercial-realty-rates-set-for-a-correction-20-to-40/443616/

Properties in Mumbai Remain Unsold Despite Low Price and Discount

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

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

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

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

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

Falling property prices fail to lift sales

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Falling rentals help retailers expand

Falling rentals are proving to be a boon for a cross-section of businesses which, for a while, had to defer their expansion plans in various  cities on account of high rentals.

Cafe Coffee Day (CCD), ethnic apparel wear Biba and Samsonite, are some of the players looking to expand in Tier-I cities. High rentals were a stumbling block in most locations. That has changed now.

“On an average, we have managed to bring down rents by about 15-20%. There have been instances where the reduction has been as much as 50%,” says Samsonite director (global) Ramesh Tainwala. The correction in some locations in Delhi has been as much as 80%. Though, Samsonite opened only three new stores in 2008, it plans to add 35 stores by 2009 end.

Biba is also using the slowdown as an opportunity to expand. “We have renegotiated our rentals for 10 properties in the last one week alone,” says Biba Apparel director Sanjay Bindra. In one of the existing stores in Navi Mumbai, it managed to negotiate its rental and brought it down by 50%.

Lower rentals are now helping it expand to prime areas in New Delhi, where it has just one store. Today, Biba has 64-standalone stores across the country and plans are on to add 30 more over the next year.

A property broker, on the condition of anonymity, cites the case of a Hyderabad mall where the rent was at Rs 300 per square foot, a year ago. That is now down to just over Rs 100 per square foot. Likewise, rates in a prominent mall in south Mumbai have reduced from Rs 600 per square foot to a third at Rs 200 per square foot.

Like a host of other players, CCD, too, plans to use the fall in rentals to expand in Tier-I locations. “Rentals in malls would have fallen by 20-30%, while on high streets it would have fallen by 15-30%. Falling rentals are definitely helping our expansion plans and helping us enter locations where we were not present earlier,” says CCD director Alok Gupta.

He adds that it takes less time to negotiate with developers. The plan is to establish a stronger presence in south Mumbai and Delhi where developers were unwilling to negotiate on rents. CCD, which currently has 800 outlets, plans to ramp it up to 1,000 in the next financial year. A large part of it is scheduled to come up in the 115 cities where it already has a presence.

Source : http://economictimes.indiatimes.com/News-by-Industry/Falling-rentals-help-retailers-expand/articleshow/4242874.cms

Hirco signs MoU with Tata Power for Panvel township project

MUMBAI: Real estate developer Hirco Developments on Tuesday said it had signed a Memorandum of Understanding (MoU) with Tata Power to ensure power  supply for its Panvel Township project.

“The association with Tata Power will enhance our ability to provide reliable power solutions to our customers,” Hirco Developments Chairman and Managing Director Firdose Vandervala said in a release here.

The company is putting up a mixed-use SEZ at Panvel on the outskirts of Mumbai.

Source : http://economictimes.indiatimes.com/News/News_By_Industry/Services/Property__Cstruction/Hirco_signs_MoU_with_Tata_Power_for_Panvel_township_project/articleshow/4106704.cms

Navi Mumbai’s first luxury hotel by Abil Group

Pune:City-based Metropolis Hotels has bagged a contract to build Navi Mumbai’s first five-star hotel.

The hotel, to be built on a 47,000 sq m plot off Palm Beach drive, was auctioned by City and Industrial Development Corporation (CIDCO). The net deal is around Rs.2.83 billion, the biggest ever plot CIDCO has auctioned.

The hotel is to be built at a whopping Rs.60,085.15 per sq m.
Metropolis Hotels is a joint venture company owned by Pune-based Avinash Bhosale Group (ABIL), engaged in the business of hospitality and real estate and infrastructure and Sun-n-Sand.

We are jubilant at this success and plan to bring in a wellknown international brand to run the proposed 500-room hotel, expected to be completed in three years,? Bhosale said.

The plot is strategically located at a distance of just 6 km from the new proposed international airport and approximately the same distance from the Trans-Harbour Link connecting South Mumbai to Navi Mumbai. The site has access to CIDCO’s golf course.

Source : http://www.abilgroup.com/

Real Estate Slowly Becoming Buyer’s Market

Is real estate gradually becoming a buyer’s market from being a seller’s market? More than 50 of the 220 people who booked plush flats at the Seawoods NRI Estate in Nerul have stopped paying their monthly instalments. And, the developer of the two projects, City and Industrial Development Corporation (Cidco), is running after them and offering them all sorts of enticements to retain them; among the enticements is an offer to delay payment of the instalments by up to six months instead of three months. But not too many are ready for the bait.

Seven persons, who booked flats recently, withdrew their claims. Even the fact that by doing so they stand to lose between Rs 10 lakh and Rs 15 lakh has not made a difference. Cidco has deducted the earnest money deposit of between Rs 6 lakh and Rs 9 lakh on each flat and 10% of the installments they have already paid. That loss-and the scenic creek area, the Palm Beach-have not been able to convince buyers that the property is still worth Rs 7,500 a square foot.

Cidco marketing official R More said the development corporation had even brought down the interest on delayed installments to 10% (from the earlier 16%). Flat owners were also promised a 10% discount if they paid the balance immediately. However, nothing seems to be working. More bad news on the development front comes from the same zone; L&T Infrastructure has asked for permission to go slow on the ambitious Rs 6,000-crore Seawoods station development programme. L&T had won the bid to acquire the Seawoods station and land at a record Rs 1,884 crore.

Cidco IT and special projects general manager D L N Murthy admitted that L&T had requested the government to go slow on commercial development proposed on 60 lakh square feet. L&t will be developing a dolphin-shaped station complex, parking facility for over 12,000 cars, terminals and office space for Cidco and Central Railway, plazas, malls, theatres and recreational zones. The design of the station recently won an award from the Developers’ and Builders’ Association of America.

Source : http://www.indianrealtynews.com/nri/real-estate-slowly-becoming-buyer%e2%80%99s-market.html

9 SEZs Get Govt Approval

The government today approved nine special economic zone proposals, including the Navi Mumbai SEZ promoted by Reliance Industries Chairman Mukesh Ambani’s close aide Anand Jain. The Board of Approval in the Commerce Ministry gave seven ‘formal’ approvals, while two were given ‘in-principle’ clearances. The BoA, chaired by Commerce Secretary G K Pillai, considered 12 proposals in all. Formal approval was given to the Navi Mumbai SEZ, JSW Aluminium SEZ, agro-product SEZ by Anand Agrochem India, and Kerala Infrastructure’s IT project, since the promoters of these have land.

Larsen & Toubro’s proposal for an IT SEZ was deferred “because there was no clarity on land,” Pillai told reporters after the BoA meeting here. The Anand Jain-promoted Navi Mumbai SEZ is promoting different tax-free enclaves. There is a ceiling of 5,000 hectares on a single SEZ. In-principle approvals were granted to Lepakshi Knowledge Hub Pvt Ltd’s multi-product tax-free enclave in Andhra Pradesh and Karaikal Port SEZ. The government has so far given formal approvals (those possessing land) to 552 projects, of which 278 have been notified and 87 are operational.

Source : http://www.indianrealtynews.com/sezs-india/9-sezs-get-govt-approval.html

Oversupply in commercial real estate may continue in 2009

The over-supply scenario that 2008 had witnessed in the commercial real estate space could well continue in 2009, says the annual year-end report by Cushman & Wakefield, real estate services firm.

While some companies, which had committed to larger spaces earlier, have scaled down their absorption as a prudent step to mitigate the cost on real estate others, which had taken up space based on anticipated expansion plans, are considering sub-leasing the excess space.

“With this trend continuing in the coming year, coupled with the additional proposed supply and the already existing increasing vacancy levels, the over supply situation is likely to see no early respite. Hence, rental corrections across micro-markets seem probable over the short term,” says Mr Kaustuv Roy, Director of Tenant Strategies and Solutions at Cushman & Wake-field.

The south, central and select suburban locations of Mumbai witnessed rental correction over the year and more recently, Thane Belapur Road (IT) and Malad (non-IT) too recorded a southward movement. Vashi and the non IT-projects in Thane Belapur Road recorded a stable trend. Central and Suburban locations of Lower Parel, Bandra-Kurla, Andheri and Powai are likely to witness a further fall in rentals with all other major markets expected to stabilise.

In Bangalore, the rental market continued to strengthen recording 4-9 per cent annual appreciation in the peripheral locations and nearly 18 per cent year-on-year growth in the CBD and off-CBD regions. Outer Ring Road and the suburban areas are likely to strengthen further in the coming months, whereas ITPB, Whitefield and Electronics City are expected to stabilise, says the report.

Chennai witnessed a drop of 5-10 per cent in rentals in the CBD and off-CBD locations of T. Nagar, Alwarpet, Anna Salai and Radhakrishnan Salai, while the suburban and peripheral regions witnessed a 7-9 per cent drop. Rajiv Gandhi Salai in the peripheries is the only market in the city that has begun to show signs of stabilisation and is likely to continue with the trend as all other major micro markets are anticipated to record a further fall in rentals, adds the report.

Source : http://propertybytes.indiaproperty.com/?p=3132

SEZs get nod to prune area

New Delhi: Six major SEZs have clipped the size of their projects, foregoing potential tax gains for them. The developers have got the commerce ministry nod to de-notify parts of their tax-free enclaves for better viability. The projects include Hyderabad Gems SEZ Ltd, Reliance Industries’ Navi Mumbai IT SEZ, L&T Phoenix Info Parks, Maharashtra Industrial Development Corporation’s (MIDC) agro SEZ, Vikas Telecom SEZ and Dahej SEZ.

The government has also allowed the de-notification of DLF’s IT SEZ near Delhi. The developers have realised that instead of holding on to the plots to earn future tax breaks, it will be better to surrender them now to improve the projects’ financial viability. The realty sector has been one of the hardest hit in the economic slowdown. The SEZ projects were the crown jewels of the real estate companies.

The government has, however, deferred the Maharashtra Airport Development Corporation’s request to de-notify 361 hectares from the 1,578-acre multi-product SEZ in Maharashtra.

MADC officials said if the ministry does not permit them to use the rail and cargo operations in the non-processing area of the SEZ in Nagpur, they would like to get that portion de-notified. They said rail and cargo access for units within and outside the SEZ is vital to the SEZ’s viability. While officials of other SEZs did not immediately respond or declined to comment, L&T Phoenix Infoparks officials confirmed that they are seeking a de-notification of two hectares in their Vijayawada SEZ and use that space to build housing or commercial complex.

The companies have opted for de-notification because they still meet the minimum area requirement for SEZs. For instance, the minimum area for an IT SEZ is 10 hectares, while it is 100 hectares for a sector-specific SEZ and 1,000 hectare for a multi-product SEZ.

To obtain an order from the government for a partial de-notification, the developer has to cite reasons and provide proof of refund with interest of any tax sops availed of on the area sought to be denotified. Also, that area should be free of industrial units or residential and commercial complexes.

Source :  http://www.financialexpress.com/news/sezs-get-nod-to-prune-area/397061/

Signet Hotels to franchise six upcoming properties to Best Western India

Signet Hotels Private Limited (a affiliate company of Cabana Hotels which is the master licensee for Best Western in India) is coming up with six properties across India in the next two to three years. Signet Hotels has entered into a franchise and management agreement with Best Western India for all the upcoming properties in Ooty, Rameshwaram, Kanyakumari, Bengaluru, Navi Mumbai and Bhubaneshwar.

For the Ooty, Rameshwaram and Kanyakumari properties, Signet Hotels have entered into a lease agreement with Indian Railway Catering and Tourism Corporation Limited (IRCTC) for 30 years on BOT (Build Operate Transfer) basis. “These would be three to four-star category hotels with around 100 rooms each,” says Sudhir Sinha, President & Chief Operating Officer, Best Western India.

The hotels in Bhubaneshwar, Bengaluru and Navi Mumbai will be of four-star category with around 100 rooms each. Best Western Navi Mumbai is scheduled to be launched by the end of 2009. “Depending upon the requirement of the market and location, we will be positioning the hotels and equipping them to better meet our target guest’s requirements and needs,” adds Sinha.

Source : http://www.hospitalitybizindia.com/detailNews.aspx?aid=2798&sid=1

Limited stocks keep rates high

NAVI MUMBAI: Builders and real estate consultants say that residential rents in Navi Mumbai have remained stable in a few areas, while in a few
pockets they have actually increased by 10 to 15%.

The hike in loan interest rates and the builders’ reluctance to correct property LIMITED.TIM recession-at least to the expectation of buyers-have triggered an increased demand for rentals in Navi Mumbai. To the dismay of people searching for rentals, there is also not enough stock available as several people already renting have given up plans to buy homes till a significant correction in prices is made for new flats.

Builders and real estate consultants put the increase in demand for rental housing at almost 35%.

Despite spending a month hunting for a rental unit, Amul and Sonal Malekar, a couple in Navi Mumbai working with a media firm, is still searching for a good 2-BHK in areas like Vashi, Sanpada and Nerul. “The minimum rents in these areas are Rs 7,500 to 9,000 a month for a 1-BHK and up to Rs 12,000 to 13,000 for 2-BHKs. Only Kharghar, Koparkhairne and Airoli can give us affordable accommodation,” says Amul.

He adds that they might go ahead with a 1-BHK in Kharghar at a rent of Rs 6,500 a month. Sonal says she visited consultants and found that 2-BHKs in Kharghar and Koparkhairne were available for Rs 7,500 to Rs 9,000 a month. “Three months ago, rents in these areas were cheaper by Rs 1,000 to Rs 2,000,” she says.

Vijay Lakhani, of the Navi Mumbai Builder Association, says the demand for rentals has increased by a minimum of 30 to 40% as those who wanted to buy are remaining in rental accommodation. He says the increase in rents during the recession is about 15%.

Suresh Haware, executive member of the builder association, says that of 100 flats in a block only 20 would be available on rent, which is not enough to cater to the demand. He says a rough estimate of rent calculations in the city is Rs 5 to 15 per square foot per month depending on the quality of the apartment.

Manohar Shroff, a builder and consultant, says Kharghar, Nerul, Sanpada, Koparkhairne, and CBD-Belapur have limited stock of rentals. “Most new projects by builders are on hold due to the recession and this is the reason behind the limited stock,” he says. Real estate consulting firms, like Manohar Sharma & Co and Sunny Estates, say builders earmarked a limited chunk for rentals.

Source : Timesofindia

Realty cos queue up for Cidco’s Kharghar project

MUMBAI: Nearly 85 companies across the world have expressed interest in the City and Industrial Development Corporation’s (Cidco) Rs 5,000-crore the me city project at Kharghar in Navi Mumbai. Of those, a dozen companies, including Essel World, have already approached Cidco for the project.

The location of the theme city, a 250-acre plateau, boasts of a few other world-class projects that are already on the cards. This explains why Tishmen Speyer, a leading US real estate firm that recently bought MetLife Inc’s prime properties in Manhattan, has approached Cidco for a project. Dubai’s infrastructure giants Limitless and Emmar are also queuing up. Big Entertainment, too, wants to build a state-of-the-art studio for its joint ventures with Steven Speilberg.

It seems that the global downturn has failed to deter plans of global realty giants. D L N Murthy, general manager (special projects), Cidco, said, “The market situation is worse, no doubt. But for the wise, this is an
opportunity.”

Besides Mukesh Ambani, whose company has been in touch with Cidco authorities ever since the theme park tender was advertised last month, Manmohan Shetty’s Walkwater Media, Hindustan Construction Company, GVK International, L&T, DLF, Essar and Mahindra & Mahindra are vying for the project.

The proposed project will have a theme-cum-entertainment city rivalling Disneyland in the US or Singapore’s Sentosa Park in size and scope. The corporation has invited global bids with a reserve price of Rs 2,000 crore. The bidding process is expected to be concluded by December.

Mr Murthy said the shortlisted bidder will either pay the corporation Rs 2,000 crore upfront against the land or make Cidco an equity partner in the project by forming a special purpose vehicle (SPV). According to a top Cidco official, 60% of the total 250 acres will be reserved for the theme park, while 40% would be earmarked for real estate development.

The winning bidder will have to spend a minimum of Rs 2,500 crore on developing and preserving the scenic location.

The theme city will be well-connected as its location is right across the proposed international airport near the Kharghar railway station. It will comprise adventure parks, a wildlife reserve, a lagoon for aquatic life, galleries, museums, resorts, a health spa, multiplexes, a planetarium, studios, night clubs and parks for children.

Source : Economictimes

On Palm Beach Road, realty rates go south

NAVI MUMBAI: Officially, no one’s blinking. But distress is in the air and a call from a potential buyer may be enough for builders here to sell
swiftly and without too much fuss. A few months ago, these builders were flooded with eager calls from customers ready to put down payments for projects that didn’t even have a plinth to recommend them.

The curving 9 km Palm Beach Road, which lays claim to the title of the Marine Drive of Navi Mumbai, is the most upscale real estate stretch between Vashi and Belapur. On paper, residential sales are still sitting pretty at Rs 7,500 to Rs 9,000 per square foot, but with near-zero sales and a volatile market, panicky developers and regretful investors are selling for as low as Rs 4,500.

Navin Makhija is a director with the Wadhwa Group, which is stuck with the biggest project—six towers of 25 floors each on Palm Beach Road. He tangentially acknowledges the slump in rates. “In these days when the global market is bad, sales are down and so is sentiment. It’s natural that some will offer lower rates to sell houses,” he says.

Makhija adds that for their Palm Beach Residency project, prices have been “internally lowered to Rs 7,000 to 8,000 psf. We are not going to make any sales for the next one-and-a-half months, but hopefully things will pick up”, he says.

Timesofindia

Corporates, consulates, culture and cuisine are all marching north

MUMBAI: Residents of this city once treated with aversion all far-flung places: essentially, anything north of Worli. To the less snobby, up to    Bandra was fine. But beyond that stretched a waste land of mosquitoes, no Gothic arches, no fine dining and no NCPA. All this, of course, was a long time ago, before Mumbai began its long march from South to North, pushed farther and farther by killer real-estate prices and postage stamp-sized office space.

Banks, IT firms, diamond merchants and infrastructure companies all opened shop in the new business sprawls of Bandra-Kurla Complex, Andheri-Marol, Malad-Oshiwara and Navi Mumbai. The latest to defect from Nariman Point is the British Deputy High Commission. Next week, the Brits will move to Bandra Kurla Complex (though their visa service will continue to be in town). “We moved to Nariman Point in 1991 and the country has changed so much since then. Our work and staff has nearby doubled. Since there was no scope to expand here, we found a place in BKC which was the perfect combination of space and location for us,” said Shireen Mistry, head of press and public affairs.

In April or May next year, the Americans will leave Lincoln House on upscale Warden Road and move to Bandra-Kurla too. Corporates and consulates apart, culture and cuisine too has joined the migration. The main reason is that there are more footfalls and more money in the suburbs. South Mumbai may have charm, but restaurants and book stores need more than that to keep going.

Himanshu Chakrawarti, COO of Landmark, one of the biggest book stores in Mumbai, located in Lokhandwala, says, “Since we depend on sales from books and music, our target audience is the educated English-speaking middle class. We would have loved to open in South Mumbai but the area is so small that its not feasible to open more than one store there. Plus, there are a lot of catchment areas like Powai, Andheri, Malad-Goregaon and Bandra that we can target by opening in Lokhandwala. I am especially happy when I see the eclectic books picked up by readers of the area.”

Bollywood celebs too prefer to hang out between Bandra and Lokhandwala instead of braving the traffic into town. A senior film journalist says stars can be frequently spied at China Garden in Khar, Piano Bar, Taj Lands End and Royal China in Bandra rather than old haunts such as the Sea Lounge at the Taj. “For celebs, Khar is the new South Mumbai,” she says.

Eyebrows were raised when Indigo, that emblem of SoBo chic, opened in Lokhandwala in August. Proprietor Rahul Akerkar denies that there is any significant difference between north and south. “It was in our plans for some time, so we decided to open the Cafe,” he says. “It has already become popular with television stars who frequent it all the time.”

But Chakrawarti, who lived in the city until three years ago, says north and south Mumbai function in entirely different ways. “Colaba Causeway at 10 am on Sunday is so peaceful you feel as if you’re in the woods,” he says. “But in the suburbs that is the busiest time for people to enjoy themselves. Also, because of travelling distances, suburbs have acquired an identity of their own. Earlier, you could make plans to meet anyone from Juhu to Bandra, but now both suburbs have different hangouts for their population.”

Restaurateur Farhan Azmi, who plans to open a third Basilico at Yari Road in a couple of months (after Colaba and Bandra) says, “Customers are loyal in South Mumbai. A customer in Colaba will come to my place eight times a month compared to a person in north Mumbai who will turn up once a month. It makes sense to shift north though. Geographically, youre targeting a much bigger area which is full of youth whose spending power has increased manifold in the last three to four years. South Mumbai on the other hand, is for older customers and foreigners.”

Source : Timesofindia

Country Club to open 100 CK27

CHENNAI: Country Club India Ltd. (CCIL), an entertainment and leisure infrastructure conglomerate, is planning to open 100 Country Klub 2007 (CK27) in the next two years, as part of its expansion plans.

CK27 or Country Klub 2007 is a satellite club model with state-of-the-art infrastructure to meet complete family needs.

Y. Rajeev Reddy, Chairman and Managing Director, told The Hindu that as part of the expansion drive, CCIL had begun penetration into city neighbourhoods with a satellite club model CK27.

“We have earmarked Rs. 1,000-crore for creating a chain of nearly 100 CK 27s in two years across India. We will mobilise more funds through debt and equity. We are already talking to private equity and foreign players to raise the resources,” Mr. Reddy said, adding that recently it had raised around Rs. 486 crore through global depository receipts/qualified institutional placement issue.

The first of the CK 27 was opened recently at Koramangala in Bangalore, and a few more would shortly come up at Mumbai, Delhi, Ahmedabad and other metros.

Mr. Reddy said in the next two months seven CK27 would be opened in Noida, Ahmedabad, Vashi (Mumbai), Kolkatta, Pune and two more in Bangalore. Out of the 100 planned, 50 would be leased properties and the rest would be owned.

CCIL made a foray into luxury clubbing under its brand Country Club Kool. It would, as a brand, anchor as a premium league of niche cubs. It already has kool clubs at Ahmedabad, Bangalore, Delhi, Mumbai and Kolkata a property upgraded to kool category. The latest addition under this category is Country Club Jade Resort in Chennai.

Source : The Hindu

Wellwisher Group makes hospitality foray

Navi Mumbai-based real estate developer, Wellwisher Group, has made its foray into the hospitality industry with a concentration in Mumbai and its adjoining markets. It plans to own and manage three properties by 2011. The company will develop its own brand for the hotel projects.

Currently, the developer is constructing a four star business hotel at Palm Beach Road, Navi Mumbai and will invest about Rs 40 Crore in the project. The project is expected to be operational by end 2010. Speaking to Hospitality Biz on the development, Abhijeet Bhansali, Managing Director, Wellwisher Group states, “Demand for good quality hotels in Navi Mumbai is expected to increase as several business houses have been diverted here. We aim to cash on the same.”

Wellwisher is also developing a 70 acre township in Khopoli, inclusive of a hotel component slated for operations by 2011. The property’s target market will consist of both, tourists and business clientele.

Amid grim outlook, realtors plan raft of launches during Diwali

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Hoteliers, flat owners ride the CYG wave

If the Commonwealth Youth Games are almost here, can the big bucks be far behind?

‘Hotel boom in southern states’

While nearly 1,300 sportspersons from 71 Commonwealth nations will be descending on the city for the sporting extravaganza, hoteliers and the real estate fraternity in the city smelling huge business opportunities.

With air travel down, portals bet on hotel bookings

Hotels near Shiv Chhatrapati Sports Complex, Balewadi, the games venue, are already dusting the housefull boards to be placed outside their hotels.

Metropolis to develop Navi Mumbai’s first luxury hotel

Joining them are many apartment owners who have hiked their rents by 15-20% in the last month. The ingenious ones have converted their flats into service apartments, and are planning to charge those who wish to rent them between Rs2,000 and Rs3,000 per room, per day.

“The CYG has led to full occupancy of all the hotels on Baner Road. So the corporates are finding it difficult to get a place for their guests. Many are coming to us, as we entertain only people from corporates, and not individuals, for security reasons,” says Flavour Service Apartments executive Ankit Agrawal. The apartment situated on Baner Road have been operational for five months.

“The response we are getting is good and as of now, 80% of the rooms have already been booked. Earlier, we had 46 rooms, but with CYG in mind, followed by Diwali, we have added 32 more rooms. By October 9, we will be all packed,” said Pancard Clubs manager Bushan Bhandari. The three-star club is strategically located in Baner.

Even the small hotels in the vicinity are all packed till the end of the event.

“We are full-up till October 20, as our hotel is very close to the venue. The booking has been done from outstation customers, who will be coming for the CYG. People from sports fraternity have also booked the rooms from October 2. This is good for us and we have raised the room tariff,” said Hotel Amrita manager Dinesh Shetty. The hotel has raised the tariff by 25%.

Bhandari said that keeping the season in mind, they too have hiked the tariff of their rooms. “Earlier, we used to charge Rs3,500 for a single room, for a day, excluding tax, but now we have raised the tariff to Rs12,000,” he said.

The rising tariff has motivated the realtors too. Rents for flats in Baner and adjacent areas have gone up by 15-20% in the last month.

“Owners of service apartments will be charging around Rs2,000-Rs3,000 per room per day. Flat owners elswhere have hiked up their rates by 15 to 20 %,” said Prime Home Real Estate Consultant’s proprietor Tarun Agarwal.

Real estate firms shun leasing, prefer to sell

Reputed real estate developers in Mumbai and many parts of the country have started selling their commercial real estate which includes office, retail and hotels, rather than leasing them out. The developers are ready to sell properties at a rate which is seen attractive by the buyers today. The appetite is to purchase, build and sell off projects, with the prospect of gaining immediate returns, according to experts.

Raheja Corporation, which has huge office spaces in multiple projects spread across Pune, Hyderabad and Navi Mumbai, have started selling their office spaces. Not only that, various other subsidiaries of the Raheja Group have actually started the process of selling their office spaces across the country, including Mumbai, according to a company source.

Indiabulls Real Estate has recently started selling their office spaces based in Tulsi Pipe Road, Jupiter Mills and Elphinstone Mills. According to sources, “Indiabulls Center, which was leasing out office spaces, has now started the process of selling the office space completely.”

Ashok Piramal group’s realty company Peninsula Land Ltd (PLL), which is developing commercial buildings in Ashok Gardens – a premium residential project comprising 2-, 3-, 4- and 5-bhk (bedroom, hall, kitchen) apartments located at upper Parel in Mumbai – is selling off the commercial building instead of leasing the property. Peninsula Land, which had sold off 5 lakh sq ft of Dawn Mills, is now in the process of selling complete 19 lakh sq ft. Realty major, DLF too is in the process of selling a part of its big commercial establishments instead of leasing. Competitor, Hiranandani Constructions is understood to have not entered into a single land deal since the past few months.

Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, has cited various reasons behind developers wanting to sell properties instead of leasing them. He said, “There are owner occupiers wanting to take the benefit increasingly of the properties on lease and wanting to buy. The lease rates are still high while there has been softening of the sale price and the builders need some cash flow.”

When contacted, Sanjay Dutt, MD, Cushman & Wakefield said, “Today, real estate developers are willing to enter only those projects which can be purchased, built and sold off quickly and make money. Developers have started believing in futuristic games. Real estate market is here to continue very strongly in the long term. Real estate developers should also ensure to take steps to insulate themselves from the issues related to financial turmoil. For raising capital, they should tie up with reliable private equity players.”

State Govt To Raise FSI For Sea Link Areas

The Maharashtra government is expected to raise the floor-space index (FSI) from one to four for the areas to be connected by the Rs 7,000-crore Mumbai Trans Harbour Link (MTHL). This initiative will benefit Navi Mumbai Special Economic Zone (NMSEZ), which is being developed by Reliance Industries Ltd (RIL) in a joint venture with the state government’s infrastructure arm, City and Industrial Development Corporation of Maharashtra Ltd (CIDCO). To avail the higher FSI, one will have to pay a premium of 20 per cent on the rate mentioned for the area in the ready reckoner, said a senior official from the state government’s urban development ministry. The FSI is the ratio of total floor area of a building to the size of the plot. It indicates the maximum construction that is allowed on a plot in a particular area.

Mumbai SEZs to benefit from raise in FSI

The Maharashtra government ‘s move to raise the floor-space index (FSI) from one to four for the areas to be connected by the Rs 7,000-crore Mumbai Trans Harbour Link (MTHL) will benefit Navi Mumbai Special Economic Zone (NMSEZ), which is being developed by Reliance Industries Ltd (RIL) in a joint venture with the state government’s infrastructure arm, City and Industrial Development Corporation of Maharashtra Ltd. Those who want to avail the higher FSI will have to pay a premium of 20 per cent on the rate mentioned for the area in the ready reckoner, said a senior official from the state government’s urban development ministry. The FSI is the ratio of total floor area of a building to the size of the plot. It indicates the maximum construction allowed on a plot in a particular area.

The Mumbai sea link, connecting Sewri in the island city and Nhava Sheva across the creek, was to be developed earlier on a built-operate-transfer (BOT) basis. However, after a bitter war between Ambani brothers over bagging the contract for the MTHL, the state government decided to scrap the bidding process and take up the showcase project of its $40-billion Mumbai Makeover programme on its own. As part of the fresh proposal, the Mumbai Metropolitan Regional Development Authority (MMRDA), which has cash reserves of around Rs 10,000 crore, will part-fund the project.

The state government is considering various options for funding the rest, including levying an impact fee on property transactions in areas that are going to see escalation in prices due to the sea link, and allowing the MMRDA to commercially exploit the areas near the sea link. The state government is also considering a similar move of granting a higher FSI at the Metro railway stations to reduce viability gap funding (VGF). According to the state government’s estimates, it will have to pay a VGF of around Rs 4,500 crore to developers. This includes the VGF of around Rs 1,600 crore to be paid to Reliance Infrastructure (RInfra)-promoted Mumbai Metro One Pvt Ltd, which is developing Mumbai’s first metro line connecting Varsova, Andheri and Ghatkopar.

However, the biggest challenge for the government officials is to meet the January 26, 2009, deadline given by the political executive for the commencement of work on the sea link, the official added. The political executive wants to see the action on ground as the state is slated to go for the Assembly elections in the later part of the next year. “We are currently facing problems in finding land for the casting yard on both the sides of the sea link. On the Mumbai side, problem can be sorted out by requesting the Mumbai Port Trust (MPT) to make land available on a temporary basis. The real problem lies on the other side of the link as the land suitable for the casting yard there is owned by private people,” the official said. “We will also have to move a fresh application with the Ministry of Environment and Forest for getting environmental clearances in compliance with recent high court directives,” he added.

MAN Industries to diversify into real estate sector

MAN Industries India, a line pipe manufacturer and part of UK’s MAN Group, today announced its foray into real estate with a newly formed subsidiary MAN Infraprojects in Mumbai, where property prices have almost doubled in the last two years. It plans to invest 10 billion rupees over three years to develop seven real-estate projects in Mumbai, Navi Mumbai and Indore. The company expects realisation of 40 billion rupees from these projects which will have a total built-up space of 10 million square feet. In Phase I, MAN Infraprojects Limited plans to develop three projects two in Mumbai and one in Navi Mumbai with a total built-up area of over one million sq ft. In Mumbai, the company is planning two commercial projects in Bandra and Vile Parle. In Navi Mumbai, MAN Infraprojects Limited will develop a mixed-use township complete with a five-star hotel, a IT-cum-commercial centre besides a luxury residential block. The site is located opposite the D Y Patil stadium.