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

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/

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

Chances of India Allowing FDI in Multibrand Retail Seems Bleak

India is unlikely to allow foreign investment in multibrand retail at least in the next couple of years, a top industry ministry official said. “It’s a sensitive sector. I don’t see it happening… Certainly not in one or two years,” Department of Industrial Policy and Promotion Joint Secretary Gopal Krishna said during his interaction with Swedish industry captains. India does not allow foreign investment in multi-brand retail, although it does permit 51 per cent foreign direct investment (FDI) in single brand segment. World’s biggest furniture retailer IKEA of Sweden recently dropped its $1 billion investment plan to set up single-brand retail outlets in India after New Delhi showed no inclination to allow FDI beyond 51 per cent in that segment.

“Retail is the second largest employer in India and there is a fear that opening up the sector for foreign direct investment will bring in extreme form of competition and the fears are not unfounded,” Krishna said. Commerce and Industry Minister Anand Sharma along with officials from his ministry were in the Nordic country for a two-day visit. They were accompanied by Indian industrialists led by the Confederation of Indian Industry. “We have no social security net,” he argued. However, he said 90 per cent of sectors are open including the entire manufacturing sector with the exception of defence. DIPP is the nodal point for FDI guidelines. A Parliamentary Standing Committee has recommended a blanket ban on foreign investment in retail and has opposed even big domestic corporate entering the sector saying that it will lead to unemployment.

The committee, headed by Murli Manohar Joshi, feels that “opening of FDI in retail trade by allowing single brand foreign firms in India will result in unemployment due to slide-down of indigenous retail traders”. Further, Krishna said the insurance bill which awaits the report of the Parliament Standing Committee is likely to be taken up by the government in the next six months. The bill aims to raise the FDI cap to 49 from 26 per cent. Besides, he is hopeful that the RBI will relook into the roadmap for the private foreign banks, which was put on hold, charting out their entry and revisiting many restrictions such as acquisition and opening new branches.

Source : http://www.indianrealtynews.com/retail-market/chances-of-india-allowing-fdi-in-multibrand-retail-seems-bleak.html

DLF New Projects Capital Greens Shivaji Marg New Delhi

DLF Capital Greens Shivaji Marg New Delhi Project
DLF Developer Launching New Affordable Residential Township Project in Delhi CAPITAL GREENS Shivaji Marg, Moti Nagar, New Delhi. Apartments Ranging 2, 3, 4 BHK. apartments having Area 1200 sq. ft to 2600 sq. ft, High Rise Buildings: 26 to 28 floors, is located at Heart of City New delhi on very affordable and attractive prices. Suitable for all segments & a good investment option. Booking Amount Started from 7.5 Lacs to 10.0 Lacs. Amazing price between 6,000 to 7,000 per sq. ft. pre register your self not to miss life time opportunity. DLF Capital Greens luxury Township Apartments with all Modern Amenities.

DLF Capital Greens Shivaji Marg New Delhi Location
DLF Capital Greens Located at ShivaJi Marg, Moti Nagar Near Swatantra Bharat Mill, 1.5 km from Karam Pura/Moti Nagar Metro Station (Operational), 0.75 km from Inder Lok Metro Station, 0.50 km from Zakhira/Ashok Park Extn Metro Station, 2.5 km from Outer Ring Road, Raja Garden, 2.5 km from Main Shadi Pur Bus Terminal, 2 Minutes drive from Kirti Nagar Metro Station, 15-20 Minutes drive from Cannought Place, 20 Km from Indira Gandhi International Airport

DLF Capital Greens Shivaji Marg New Delhi Common Amenities
Landscaped greens Garden, Limited Power Back-up, Clubhouse, Banquet Hall, Swimming Pool, Gymnasium, Games Room, Sewerage Treatment Plant, Water Treatment Plant, Garbage Disposal Room, security system, Door Phones.

Type Size & Price
Types——Size(sq.ft)——Price Approx INR(sq.ft)
2b+2T——–1200—————6000- 7000 #
3b+2T——–1420—————6000- 7000##
3b+2T——–1435—————6000- 7000
3b+3T——–1450—————6000- 7000
3b+3T——–1465—————6000- 7000
3b+3T——–1475—————6000- 7000
3b+3T——–1480—————6000- 7000
3b+3T——–1490—————6000- 7000
3b+3T——–1505—————6000- 7000
3b+3T——–1525—————6000- 7000
4b+4T——–2600—————6000- 7000

About DLF Developer
DLF is the largest real estate company in India. The group has over 224 million sq. ft. of existing development and 751 million sq. ft. of planned projects. DLF is committed to quality, trust and customer sensitivity, and deliver on promises with agility, financial prudence and in tune with the highest global standards. The company has also entered into several strategic alliances with global industry leaders.

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

Source : http://www.bignews.biz/?id=814022&keys=DLFinDLFCapitalGreensDelh-DLFDeveloperDelhiDLFDelhi-DLFDelhiProjects-DLFCapitalGreensApartment

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

New Delhi Retail Rentals continue to decline

Country’s capital New Delhi continued to witness a decline in retail rentals of 25 per cent and ranked 69th in rentals among the list of major cities across the world during the first quarter of 2009, according to global real estate consultancy CB Richard Ellis.

Prime retail rentals continued with their downward trajectory worldwide during the period which saw New York maintaining the top slot among cities with high rentals despite a 10 per cent annul decline. New Delhi ranks 69th globally with an average rental of $109 per sq ft each month.

“Demand for retail space has declined in most markets across the world as consumers cut back on spending and unemployment continues to rise in many countries. New Delhi in India saw a 25 per cent decline in a six month period,” CBRE said in its report ‘Global Retail Rents Market View Q1′.

The report said since the end of last year, most major economies barring India and China, have seen significant economic decline. “Rentals in Delhi NCR have corrected further when compared to the beginning of 2008. Retailers feel that rentals have corrected to sustainable levels and are using this period judiciously to take up positions on favourable terms,” CB Richard Ellis Chairman and MD Anshuman Magazine said.

Magazine said rentals are being renegotiated to make retail operations financially viable. “Another trend witnessed during this time is that of developers adopting a renewed stance towards revenue share agreements, as opposed to earlier, when the demand situation was more favourable,” he added.

Among other Asian cities to figure in the list are Hong Kong (ranked number 2 globally), Tokyo (5), Guangzhou (14), Singapore (18), Shanghai (29) and Beijing (35). Globally, New York retained its top slot among the most expensive retail destinations.

“Despite a 10 per cent year-on-year rental decline, New York remains the world’s most expensive retail destination, with rental values totaling USD 1,800 sq ft per annum,” the report said. Buenos Aires (Argentina) saw the largest annual decline in retail rents year-on-year with a drop of 37 per cent, followed by Warsaw (Poland) with a 33 per cent decline and Washington DC with a 26 per cent decline.

Source : http://www.indianrealtynews.com/real-estate-india/new-delhi-retail-rentals-continue-to-decline.html

IIREX India 2009: Opportunity for Property Investors to Invest in a Growing Economy

The First International Commercial Real Estate Exhibition in India

As an initiation towards his goal and vision of reaching out to various b2b Opportunities that exist in the sector of Real State Investment sector Pixie Consulting Solutions Ltd in association with National Research Estate Development Council, Govt. of India is organizing three day International Interiors and Real Estate Expo from 3rd to 5th October 2009 at Pragati Maidan New Delhi. This trade show is designed to restimulate Real Estate Sector, Management and Marketing. During the Expo, the delegates, exhibitors and participants can also listen to eminent experts in their respective fields as well as corporate presenters from different areas of Real Estate Sector. During these three days honorable members of NAREDCO (National Real estate development Council) would be conducting seminars on industry related issues.

The real estate investment market in the Asia-Pacific region and the rest of the world saw a contraction of market volume in the first quarter of 2009 against the backdrop of the global financial turmoil and the sustained problem of a credit crunch. However, analysts are beginning to see opportunities as the world and Asia rides out the crisis.’ Established firms, family enterprises and individuals with cash reserves, limited debt and an appetite for risk are expected to be among the first to begin searching the Asian market for bargains in the coming months.

The fact that India has not been hit by the global turmoil to an extent to which other nations have been, and keeping in mind the fact that India is among the top 10 countries with an optimistic outlook for the year 2009, IIREX India has come up with an excellent concept of providing a platform to Indian Builders to meet the Foreign Real Estate Investors (FDI/FII) and also Real Estate Brokers and Agents. The meet and match club at IIREX will give an opportunity to Indian Builders to showcase their projects to International Investors and discuss investment opportunities with them in an intimate and open forum. Thus IIREX India will assist the exhibitors and visitors to make new contacts, find new agents, partners and develop other business relations.

More than 1,000 top deal-makers from leading developers, consultant, banks, institutional investors and investment authorities, as well as senior officers from the foremost private equity funds and investment advisory firms are expected to gather in India over these three days to discuss key issues and investment opportunities.

During the Expo, the delegates, exhibitors and participants can also listen to eminent experts in their respective fields as well as corporate presenters from different areas of Real Estate Sector, management and marketing. Seminars in the exhibition will be conducted by the honorable members of NAREDCO.

IIREX INDIA 2009 is the best place to increase the business networking of all the participants and to display their products in global market. International Interiors and Real Estate Expo are expected to attract visitors as well as exhibitors from India and other countries.

Venue: Pragati Maidan, New Delhi, India from 3rd – 5th October, 2009.

For press backgrounder on IIREX click here

Media contact details

Shweta Baweja,
IIREX India 2009,
+91 9991705009,
info@iirexindia.com, iirex@pixie.co.in

Mohit Budhija,
IIREX India 2009,
+91 9991705005,
info@iirexindia.com, iirex@pixie.co.in

Ambuja Realty to execute Rs 4,000 cr housing projects

Ambuja Realty Development has planned to execute projects worth Rs 4,000 crore in the next five years. According to Harshvardan Neotia, company’s chairman, all options would be kept open for raising funds for the projects. The company has kept options open for divestment in the closely held company.

He informed, “IPO or any other means to raise funds would depend on several conditions like market response, project schedules, booking, bank credit and capital market conditions. If the situation demands, we are open to raise funds from the market, but there is no plan as of now.”

Gurgaon, Faridabad to be developed as green cities
The Haryana government has planned to develop Gurgaon and Faridabad as green cities.

Haryana chief minister Bhupinder Singh Hooda said that the project meet the energy challenges, reduce dependence on fossil fuel, expensive oil and gas for energy and also to promote increased use of renewable energy. “The state government would be assisted in preparation of a master plan for increasing energy efficiency and renewable energy supply in these cities, besides having in place institutional arrangements for implementation of the master plan,” Hooda said.

These will be the first cities in Haryana to be brought under the development of solar cities programme, launched by the new and renewable energy ministry.

Oakwood plans apartment with five-star facilities
Oakwood Worldwide, a leading player in the service-apartment segment, has announced plans to open 11 five-star temporary housing facilities across the country by 2012. The locations for its facilities would include Thiruvananthapuram, Chennai, New Delhi, Hyderabad and Ahmedabad. Vikas Kapai, country general manager, Oakwood Worldwide, said “These properties are under construction. Meanwhile, we have also signed 11 deals with real estate developers for the new constructions. It would come up with two more properties in Mumbai, and two in Chennai in the next one year.”

Realtor to develop vaastu-compliant township
Kolkata-based Shristi Infrastructure Development has planned to develop a mega integrated township with the name of Shristinagar at Asansol, West Bengal.

The vaastu-compliant project, with built up area of 6 million sq ft, will offer 2,400 apartments, in addition to plots, group housing structures, bungalows, row housing and premium residential apartments. Keeping options open for people who would prefer community living and yet want to develop a dream home. We will develop vaastu-compliant houses for 5,000 families at Shristinagar, spread over 90 acres,” said Hemant Kanoria, director, Shristi Infrastructure.

RICS to launch professional courses in realty sector
Royal Institution of Chartered Surveyors (RICS), the UK-headquartered organisation which trains professionals working in the land, property and construction sectors, has decided to start its professional courses in India.

Sachin Sandhir, MD, RICS India, said “We plans to start Centre of Excellence for Real Estate & Construction, for the development of specialised skills for professionals employed in the realty sector.” He said that the specialised courses in realty and construction management with durations of six months to two years.

Source : http://www.expressestates.in/full_story.php?content_id=93873

Budget housing offers lifeline to Indian developers

NEW DELHI, India: ‘No frills, Simple homes’ reads the banner hanging in the Delhi headquarters of Unitech, India’s leading property developer.

It’s a mantra that has been taken up by realtors across the country with a new-found passion for affordable housing that owes little to their social conscience and everything to their bottom line.

The global economic downturn ended a four-year property boom in India that had largely been driven by the luxury housing segment and saw a near three-fold increase in residential prices in major cities.

Now developers are turning their attention to middle and lower income buyers and low-cost housing that offers lower profit margins but enjoys much greater demand.

‘We made a mistake by only focusing on the top two-three percent of India’s population,’ acknowledged Unitech vice president Vikram Datta.

‘Now we have to reach the masses by entering into budget and affordable houses,’ he said.

According to a May 2009 survey by the Associated Chambers of Commerce and Industry of India, there is a nationwide housing shortage among lower and mid-income families of around 20 million units.

With luxury housing projects struggling to find buyers, that kind of demand suddenly seems more attractive.

Unitech has committed to constructing 20,000 affordable houses at a cost of 17 billion rupees (340 million dollars) by 2011 across the country, and others are following suit.

‘India desperately needs budget houses. Constructing and selling them is the only way for real estate companies to survive,’ Rajiv Dash, a senior official at Tata Housing Development Co., told AFP.

In May, Tata launched a low-cost housing project on the outskirts of India’s financial capital Mumbai, constructing 1,000 studio apartments which sell for as little as 7,800 dollars.

The targeted buyers are primarily factory workers and small shopkeepers.

By building on cheaper, suburban land and bulk-buying raw material, developers can turn a per-unit profit of around 15 percent which is half the return on luxury houses.

‘But less profit is better than no profits,’ said Sanjay Verma, managing director for real estate consultancy Cushman & Wakefield.

In the last five months more than 65 property developers across the country have announced new projects in the affordable housing segment.

For 32-year-old Amar Singh, a commodity trader living in rented accommodation in New Delhi for over a decade, the new trend has enabled him to realise his dream of buying a home.

‘I am now the proud owner of a small, two-bedroom apartment,’ said Singh, who hopes to move in to his still under-construction home by 2010.

Singh managed to procure a loan from a private bank and arranged the down payment by selling some of his wife’s gold ornaments to seal the house deal.

Situated on the outskirts of New Delhi, his affordable housing project with 120 apartments will provide parking space to all residents, a play area for children, a power back-up and a small cafeteria.

Such amenities do not feature in the low-cost sector, where the developer’s priority is to maximise the number of units.

‘The low-cost houses are just like boxes with a door and few windows, there are no value additions,’ said Verma.

But while they may be spartan in the extreme, they do provide basic amenities such as water, sewerage, drainage and street lighting which is a major step up for low income settlers living in shanty towns.

The newly-elected Indian government announced a housing scheme in its recent budget as part of a plan to promote a slum-free India in five years.

Such an ambitious target, analysts say, can only be realised with massive private sector involvement.

‘Indian property developers should consider themselves fortunate,’ argued Verma. ‘They have a new market to do business. The faster they make small houses, the more money they earn.’

Source : http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/08-budget-housing-offers-lifeline-to-indian-developers-ts-01

Oakwood Worldwide plans 15 operational properties in India by 2012

Planning a major foray into service apartments segment, international player Oakwood Worldwide would launch 11 five-star category temporary housing facilities across India over next three years.While the brand is already operational in Pune, Mumbai and Bangalore with four properties, it will have operations in prominent Indian cities such as Chennai, New Delhi, Hyderabad, Thiruananthapuram and Ahmedabad by 2012.

Oakwood Worldwide, which runs resorts and service apartments in United Kingdom, USA, Singapore and a number of Asian countries, plans to run properties in three different categories in India. The Oakwood Premier category provides for a long-term stay in five-star deluxe category rooms while the Oakwood Residence has five-star standard residential flats. The Oakwood Apartments category is meant for tier-two and tie-three cities and has compact service apartments.

The brand has so far launched four properties in the country while 11 new locations are under construction. Speaking to Business Standard , Oakwood’s country general manager Vikas Kapai said, “We have signed 11 new deals with different real estate developers. We expect to have two properties operational in each of New Delhi, Chennai and Hyderabad by 2011.”

Oakwood recently launched its largest property in India, the Oakwood Premier in Pune with 202 five-star deluxe studios and suits. It also runs an 84-unit Oakwood Residence property in Pune. The brand already has a property each operational in Mumbai and Bangalore. It plans to have have two new properties in Mumbai while a property each in Ahmedabad and Thiruananthapuram.

“We have seen more than 73 per cent occupancy during the financial year 2008-09 at our three properties. This year as well, we have seen more than 65 per cent occupancy, which is excellent considering the present economic situation,” Kapai added. the firm plans to concentrate on Pune, New Delhi, Mumbai and Bangalore, the cities that attract the maximum number of foreign working professionals in India. Kapai however did not disclose the financial details of the company in India.

Source : http://www.business-standard.com/india/news/oakwood-worldwide-plans-15-operational-properties-in-india-by-2012/67360/on

Office, retail space is hot property

Lower real estate prices have triggered some big-ticket sales in recent months in the commercial segment

Bangalore: Some six months after they fled the real estate sector, investors are gradually making their way back. This time around, high networth individuals (HNIs) and domestic funds are putting money mainly into office and retail spaces.
As the economic meltdown unfolded in late 2008, commercial realty became the worst hit segment in the sector and lease rental and property rates fell by 30-40% in the metros and the bigger cities. The lower prices, in turn, have triggered some big ticket sales in recent months.
Big catch: The DLF tower in Gurgaon. The cash-strapped realty firm sold its 66% stake in a private mill property in central Mumbai to an undisclosed Chennai-based investor for Rs310 crore in May. Ramesh Pathania / MintIn May, Unitech Ltd, India’s second biggest listed developer, sold a 200,000 sq. ft office property in Saket, New Delhi, to an investor for Rs450 crore, nearly Rs200 crore cheaper than in 2007-08. Unitech didn’t disclose the identity of the buyer.
The same month, a cash-strapped DLF Ltd, the country’s top realty firm, sold its 66% stake in a private mill property in central Mumbai to an undisclosed Chennai-based investor for Rs310 crore. DLF had bought the property for Rs350 crore in 2007, at the peak of a realty boom in India.
In April, three investors from Kolkata bought 50,000 sq. ft of an office property near Bangalore’s Outer Ring Road for Rs35 crore, about 20% lower than the asking price till mid-2008, said a property consultant who brokered the deal. He didn’t want to name anyone involved in the deal. The developer had earlier leased the property to companies.
“Many HNIs and funds are now returning, looking at only commercial properties…to take advantage of the falling rates. The returns for such properties are as high as 12-13% compared to 3-4% in residential projects,” said Farook Mahmood, chairman of Bangalore-based advisory Silverline Group Inc.
For example, a Hyderabad investor with Rs300 crore is scouting for commercial properties in Bangalore, said Mahmood, without elaborating.
There is huge demand from HNIs for buying office properties, said a Unitech spokesman. “We are in contact with a group of HNIs with a portfolio of Rs1,000 crore each, who are looking at lucrative deals,” he said.
Unitech, also cash-starved, has been selling office properties and hotels the past two quarters in and around New Delhi and Mumbai. Domestic property-focused funds, which earlier targeted residential projects, too, are looking at commercial properties now. Red Fort Capital Advisors Pvt. Ltd, for example, has invested Rs400 crore in three commercial properties in New Delhi and Mumbai and is looking for more.
“In the current scenario, most developers are looking to sell their commercial properties. There are many such distressed assets and the pressure of liquidity is still there on them. For us, it’s a good deal because property rates have dipped,” said Subhash Bedi, director of Red Fort Capital.
Research and rating firm Crisil Ltd, the Indian arm of Standard and Poor’s, said in a June report that while the overhang of commercial property was enormous, demand was still slow.
In the first three months of 2009, there was a fresh supply of 11.5 million sq. ft of space, outstripping absorption of 5.78 million sq. ft, according to property advisory Cushman and Wakefield’s report in April, based on a survey of eight major cities.
The combination of over supply, poor demand and a liquidity crunch pushed many developers to focus on selling commercial properties.
Developers such as DLF and Unitech, which adopted the build-and-lease model the past two-three years when rental costs had skyrocketed and technology firms were expanding, now prefer to sell their stock.
“We are only keen on selling office space now. The focus will also be on developing non-IT space like pharma and telecom, where demand still exists,” Unitech’s spokesman said. Unitech has about 4 million sq. ft of commercial space under development. Its spokesman didn’t disclose how much of this would be up for sale.
Investors are also keen on buying pre-leased properties from developers who are in a hurry to sell, said Kaustuv Roy, head of tenant strategies and solutions, Cushman and Wakefield. “It’s much easier to sell pre-leased properties. There are more takers for them and they fetch better rates.”
“Going forward, most developers will adopt a mixed model where 80% would be sold and 20% will be leased out,” said a senior official of Maker group, who can’t be named as he is not authorized to speak to the media.
In April, the group sold 4,300 sq. ft of space at Maker Chamber VI, an office building in Nariman Point, Mumbai, to a pharma company for Rs12.5 crore at Rs30,000 per sq. ft. The price was Rs40,000-45,000 per sq.ft. in 2008, said S.G. Maheshwari, a property consultant in Mumbai.
“The thing to look out for in the coming quarters will be if there is a revival of interest among corporates for commercial space,” said Anirudh Wahal, national director, business development, Jones Lang LaSalle Meghraj, a property consultancy.

Source : http://www.livemint.com/2009/07/01234720/Office-retail-space-is-hot-pr.html?h=B

19 Indian realty firms showcasing projects in London

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

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

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

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

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

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

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

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

Indian cities should make space for low-cost housing

In the next six years, urban India needs to build at least 10.5 million houses to meet the demand for housing that accompanies rising levels of urbanization. With the financial crisis bringing affordable housing back on the radar of promoters and builders, it is worthwhile to estimate the extent of unmet demand for low-cost houses.

As much as 65% of the demand in India’s top 112 cities is for houses measuring less than 1,000 sq. ft. This translates into approximately 6.8 million new homes. Interestingly, about 70% of the demand would be for houses with two rooms or less. This means 7.4 million new houses need to meet these specifications. This is because 90% of the urban households have incomes under Rs5 lakh per annum.

Thus, the demand for majority of the urban housing would be in this category. The rising slum and squatter settlements in cities is a clear sign that this demand is not being met through formal housing stock.

Greater housing demand originates from two sources—those who have arrived earlier and residing in makeshift tenements, shacks and slums, and those who are expected to migrate into these areas. The requirements are different. Typically recent in-migrants require smaller areas, but as they stay on, their families join them and expand, and their incomes and wealth also increase. This translates into requirements for marginally larger carpet areas.

The cities that have the largest requirement for such housing are those that attract migrants—Mumbai and New Delhi and their surrounding areas, Bangalore, Pune, Surat, Coimbatore, etc. These cities either saw large migration in the recent past but are slowly stagnating (for instance, Mumbai), or continue to have great levels of in-migration (New Delhi, Surat and Pune, for example). Either way, these cities are already bursting at their seams.

The need to expand opportunities in other cities is paramount, as is the need to get a better grip on land utilization within these cities. Typically, government bodies have almost monopolistic control over land, and this is a serious problem as land management is riddled with bureaucracy and poor governance. What is needed is a much more aggressive and forward-looking approach that looks at the requirements for each city specifically. Ensuring there is regular availability of land for low-cost housing within a city is among the first and foremost steps.

The supply side constraints for provision of low-cost housing are well known and these problems have been made worse due to the rapid increase in real estate values.

As a result, the largest action in urban housing has been in suburban areas surrounding the large cities— rural Bangalore, Ranga Reddy near Hyderabad, the Gurgaon, Noida, Faridabad and Ghaziabad quadrilateral surrounding New Delhi, and Howrah and North and South 24 Parganas near Kolkata are well-known examples. The bulk of new housing is occurring on converted agriculture land around these cities.

This need not have been the case, had local governments been more responsive to emerging requirements. Unfortunately, unplanned and unstructured development is a hallmark of urban India and is unlikely to change very soon. Demand Curve is a weekly column by research firm Indicus Analytics Pvt. Ltd on consumer trends and markets.

Source: http://www.livemint.com

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

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

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

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

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

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

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

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

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

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

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

Le Meridien plans to open 5 hotels in India

The French hospitality major, Le Meridien, plans to open five hotels in India in the next three to five years, a top company official said in Mumbai yesterday.
 
 ”We are looking at setting up five new properties of hotels and resorts in India adding around 1,000 rooms capacity over the next three to five years,” Starwood Asia Pacific Hotels regional vice president, Don Elliot, told reporters.

However, he has not revealed the names of the cities in which the company is interested in setting up its properties.
 
”We are negotiating with our partners and these properties will be set up in Tier I and Tier II cities,” Elliot said.
 
Le Meridien currently has eight hotels in India in Ahmedabad, Kochi, Jaipur, New Delhi, Pune, Mumbai, Bangalore and Chennai.
 
With close to 80 of its properties located in Europe, Africa, the Middle-East and the Asia-Pacific region, Le Meridien provides a strong international complement to Starwood’s primarily North American holdings.
 
Le Meridien recently opened new hotels in Bangkok, Chian Mai, Chiang Rai and Shimei Bay in China, and will open in Dallas and Philadelphia in the coming months.
 
It has also signed new hotel deals in Taipei, Xiamen, Chongqing Nan’an and Qingdao in China.
 
Le Meridien was started as an accommodation option for Air France customers to be used when they travelled to destinations across the world. The first Le Meridien property was setup in Paris in Etoile with 1,000 rooms.

In November 2005, the company, was acquired by Starwood Hotels & Resorts Worldwide Inc, one of the leading hotel and leisure companies in the world with more than 940 properties in approximately 97 countries and 145,000 employees.

Starwood ’s internationally renowned brands include St. Regis, The Luxury Collection, Westin, Le Méridien, Sheraton, Four Points by Sheraton, and the recently launched Aloft, and Element. Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts.

 
Source : http://www.google.com/url?sa=X&q=http://www.domain-b.com/industry/Hotels/20090523_hotels.html&ct=ga&cd=oHwoFOHo08Q&usg=AFQjCNHsb8y9_H9ryXaPz_alVqBeKu3WGQ

Signs of Revival for Real Estate India

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

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

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

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

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

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

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

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

Just Launched II Pioneer Park – Pioneer Park Gurgaon

Pioneer Park Take a town. Remove all the boundaries. Remove the distances. Enrich it with greenery. Broaden the roads. And your will find yourself in ‘Pioneer Park’. Developed all around ‘The Great Park’, you will find everything your ever desired, 0 kms from you. It?s a premium residential community, an exclusive corporate address and a year round entertainment destination and its waiting for you to be there. The Pioneer Park brings to you 2 & 3 bedroom apartments. Pioneer Park located near Heritage School ? Gurgaon. Located less than 2 kms away from the Prestigious Golf Course and 25 kms from New Delhi, it is secluded enough to be private and public enough to be a centre of all activities. Pioneer Park offer you the best ? High street retail, Great park, Hotel, Club house and Residential neighborhood.

About Developer : PIONEER URBAN, with its core business of Real Estate Development, has been in a joint venture partnership with Unitech Ltd. and has played a vital role in changing the landscape of Gurgaon. Today it has several projects of its own at various locations and continues to be a partner with Unitech in a number of current and upcoming Projects. Pioneer Urban in its 20 years of existence has conceived, implemented and handed over various real-estate developments for its Customers.
Pioneer Urban, presenting to you Pioneer Park , Gurgaon, a 76 acres, premium mixed-use community designed to offer the finest residential living, and exclusive corporate address and a complete entertainment destination. 2 & 3 bedrooms apartments ranging from 1200 sqft to 1950 sqft are on offer at an attractive inaugural price.

Features
• Price starts from 45 lacs
• Located on the premium Golf Course extension road,
• Choice of 2/3 Br apartments
• Area ranging from 1200 sqft to 1950 sqft
• Possession by end 2011
• Unique Residential neighborhood set amidst a Great Park that acts as the social heart of the community
source: FPR

• Designed by world-renowned architects SOM
• Convenient access to shopping, landscaped gardens, cultural & recreational activities
• State of the art club with multiple social facilities like health and fitness centre, spa and multi
• 100% power back up
• 24X7 Security
• High Street Retail Destination

Location
Located on the premium Golf Course extension road,Gurgaon. Pioneer Park will be a distinctive place to live, work, shop and play, today and in the future.
Source : http://www.pressreleasepoint.com/just-launched-ii-pioneer-park-gurgaon919899891723pioneer-park-gurgaon

Indian Market Sees Terrible Slump in Investment

Not long ago, Indian leaders confidently predicted this country would emerge largely unscathed from the global economic crisis. It is now becoming clear that that view was too optimistic, nowhere more so than in this city south of New Delhi that was once the symbol of India’s economic boom. A few short years ago, construction sites here buzzed 24 hours a day, crews working through the night, cramming down food from onsite trucks during breaks in the twilight. Now real estate sites lie fallow. The once-booming art market has slowed to a crawl. India’s phenomenal growth of the last five years was powered in large part by huge injections of cash and investment. Investment accounted for about 39 percent of the country’s gross domestic product in fiscal year 2008, up from 25 percent five years ago. At its peak, more than a third of investment came from abroad, according to Credit Suisse. But in the last three months of last year, foreign loans and direct investment fell by nearly a third, to their lowest level in more than two years.

In a recent report, the International Monetary Fund said Indian companies were among the world’s most vulnerable, after American firms, because they borrowed aggressively during the boom. Using data from Moody’s, the credit rating firm, the I.M.F. estimated in a recent report that defaults among nonfinancial South Asian firms could climb to 20 percent in the coming year, up from an expectation of 4.2 percent a year earlier. (American firms are expected to default on loans at a rate of 23 percent.) The decline in foreign investment has taken a big toll on sectors like real estate, manufacturing, infrastructure and even art, which was bolstered by demand from globalization’s nouveau riche here and abroad. In the last quarter of 2008, the economy’s growth rate plummeted to about 5.3 percent, the lowest in five years. While consumer demand, particularly in the countryside, has kept the economy growing, the sudden slowing in the flow of foreign funds will make it harder for the country to grow fast enough to pull hundreds of millions of people out of stifling poverty.

“If India wants to go back to the 8 to 9 percent growth rate, private investment and low cost of capital is essential,” said Jahangir Aziz, the chief economist for India at JPMorgan Chase. Indian policy makers say they believe the country will grow at 6 percent in the coming year, but the I.M.F. forecasts growth of 4.5 percent. To help fill the gap left by foreign investment, the government is spending more on infrastructure and social programs. The Reserve Bank of India, India’s central bank, has slashed its benchmark interest rates, but the cost of private loans has not fallen by as much. After a wrenching 58 percent drop in the Indian stock market last year, the market is up 42 percent since its March low and some foreign money has started to flow into equities. But economists like Mr. Aziz say the government needs to do a lot more, though few expect bigger interventions until the current elections end and a new government takes power in late May or early June.

In the meantime, activity here in Gurgaon has slowed radically. Just off the highway from New Delhi, a giant hole in the ground sits where the country’s largest developer, DLF, had planned to build the nation’s biggest mall, aptly named the Mall of India. DLF officials say that they may reduce the size of the mall and add office space to replace planned retail space. In the boom, DLF built many of the earliest projects that transformed Gurgaon from a sleepy village into an expansive city that has become home to companies like Ericsson and I.B.M.

DLF turned to foreign lenders and investors like D. E. Shaw, the New York-based investment firm, because they provided money “at lower rates of interest and in larger amounts,” said Rajeev Talwar, an executive director at New Delhi-based DLF. “Today, you have no choice but to go to the Indian banks.” But domestic lenders have become more reluctant to extend credit, and the interest rates they offer have made projects unfeasible. Last week, DLF reported that its profits fell 92 percent in the first three months of the year. A subcontractor, Sunil Kumar Verma, who lays marble floors for builders in Gurgaon, said that business was so bad that half of his 40 workers had returned to their homes in Bihar, a poor eastern state where there was also little work for them. “All they can do is sit, eat and sleep,” Mr. Verma said.

Source : http://www.indianrealtynews.com/real-estate-india/indian-market-sees-terrible-slump-in-investment.html

Green Housing Complex Gaining Popularity

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

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

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

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

Leela Open First Hotel in Northern India

One of India’s finest luxury hotel groups, The Leela Hotels, Palaces & Resorts recently marked the soft opening of its first property in northern India. Part of an upscale, mixed-use development in New Delhi’s newest satellite business and shopping district, The Leela Kempinski Gurgaon, Delhi (N.C.R.) has 322 luxuriously-appointed guest rooms and suites and will soon open 90 one-, two- and three-bedroom Residences.

A showcase of Indian contemporary art matched with all the latest advanced technology, the property has four restaurants – one boasting six open kitchens – serving Indian, Italian and international cuisine, a 20,000-square-foot spa offering Ayurvedic treatments, a state-of-the art fitness center with yoga and aerobic studios, a large heated outdoor pool, 26,900 square feet of banquet and meeting space, a Cigar Lounge and a 24-hour business center. Curator Rajeev Sethi has filled The Leela Kempinski Gurgaon with striking sculptures, modern photography and paintings by contemporary Indian and international artists under the theme “evolution.”
A 15-minute drive from the Indira Gandhi International Airport and just over the Delhi-Gurgaon border on the edge of the Rajokri green belt, the hotel adjoins a luxury shopping and entertainment center, the largest in India. Nearby are business parks with tenants such as General Electric, IBM, Oracle, Microsoft, Siemans and American Express. Leela’s first managed property is the only one in the region offering comprehensive solutions for today’s luxury living.
The Leela Kempinski Gurgaon was designed by the internationally-acclaimed Hirsch Bedner & Associates in a modern minimalist style. The expansive rooms (484 to 559 square feet) and huge suites (818 to 3,616 square feet for the Presidential Suite) have LCD televisions with Blue Ray players, Bose iPod docks, high-speed Internet with 6mbps, Wi-Fi, IP phones and advanced security systems. King and twin beds come equipped with ergonomic mattresses, the marble baths are outfitted with large soaking tubs and rain showers and some rooms have terraces. The Royal Club offers its guests a private lounge and personalized butler service on two floors.
Commenting on the management collaboration, Capt. C.P. Krishnan Nair, chairman, The Leela Palaces, Hotels and Resorts said, “It is a momentous occasion for us to have the first Leela hotel in north India. Our management alliance with Ambience Group, headed by the well-known Raj Singh Gehlot has been an important milestone in the group’s expansion plan. At The Leela Kempinski Gurgaon, Delhi (N.C.R.) our patrons and guests will experience the same distinguished hospitality as experienced in other Leela hotels.”
The Leela Palaces, Hotels & Resorts has an ambitious expansion under way. With five properties operational, three more hotels opening this year and next, and plans for three more, The Leela aims to be a major force in the Indian hospitality industry with a presence in the country’s major resort and business destinations.
At the opening, Raj Singh Gehlot, chairman, Ambience Group said, “we are delighted to join hands with The Leela and to bring the experience of the foremost Indian hotel group to the city of Gurgaon. The hotel is among several other key luxury projects at Ambience Island. The addition of The Leela Kempinski is an integral part of this mixed-use complex, qualifying the Ambience Island as a luxury destination for residents, visitors and guests.”

About The Leela Palaces, Hotels and Resorts
Hotel Leelaventure Ltd. operates The Leela Palaces, Hotels & Resorts in Mumbai, Bangalore, Goa, Kovalam (Kerala), Gurgaon and soon Udaipur. Located in key business and leisure destinations, and charting a pan India presence in the near future, The Leela Palaces, Hotels & Resorts are a blend of aesthetic sensibility, modern amenities and truly reflect the essence of India. New hotels will soon open in Chennai (2010) and New Delhi (2010); with future plans to develop hotels in Agra, Hyderabad and Pune. The group has marketing alliances with Germany based Kempinski (Hoteliers since 1897); US based Preferred Hotel Group and are members of Global Hotel Alliance based in Geneva, Switzerland.

Source : http://www.travelvideo.tv/news/uncategorized/04-15-2009/leela-opens-first-hotel-in-northern-india

Govt to buy Flats from Emaar MGF

The government will buy up to 1 billion rupees ($20 million) worth of flats from real estate firm Emaar MGF Land, the Business Standard newspaper reported on Sunday, citing a senior ministry official. Emaar MGF, a joint venture between Dubai’s Emaar Properties and India’s MGF Developments Ltd is developing the Commonwealth Games village project to be held in 2010 in New Delhi, and planned to use proceeds from selling these flats to finance the construction, the paper said.

M. Ramchandran, secretary at the Ministry of Urban Development, has asked the Delhi Development Authority to examine the possibility of allowing it to buy flats to provide liquidity support to the firm, the paper reported. The amount is a third of what the real-estate firm initially sought, and a committee set up by the ministry is analysing the actual price of the flats, the paper said, citing Ramchandran.

Source : http://www.indianrealtynews.com/real-estate-india/govt-to-buy-flats-from-emaar-mgf.html

Parsvnath, Phoenix To Build 5-Star Hotels

New Delhi-based Parsvnath Developers Ltd and Dubai-based Phoenix Group Global will develop one five-star hotel each in Ahmedabad. Parsvnath Hotels Limited, a subsidiary of PDL, will construct its hotel in the city’s Vejalpur area, while Phoenix, is targeting the outskirts of Ahmedabad.

With 152 rooms and suites, Parsvnath’s hotel will be a judicious blend of hotel and commercial segment offering 24-hour coffee shop, multi-cuisine and specialty restaurants, conference rooms, business centre and a few boutique stores. The Phoenix hotel, spread over nearly 2.5 acres, will have 160 rooms. The total investment may be something between Rs. 175 crores and Rs. 200 crores.

Source : http://propertybytes.indiaproperty.com/?p=3161

Buying a home? Good deals may come to those who wait

The limited period offer of lower home loan rates from public sector banks might help save a little over a thousand on your EMI, if  you go for a home now. But if wait, chances are, you will save much more from a widely expected fall in real estate prices in coming months.

The consensus among property experts in New Delhi and Mumbai, contacted by Hindustan Times, is that flats in the Rs 35-60 lakh category — which is the most desired segment of houses for middle class families in these cities — could fall at least 10 per cent over the next six months. In the case of high-end apartment houses, the drop could be bigger, they said.

The benefit from reduction in property prices over the next few months are likely to outweigh the benefit of the lower interest rates being offered by PSU banks for a limited period ending on June 30 (see box on right). Less EMI in 6-9 months A flat going for Rs 40 lakh now could cost Rs 4 lakh less in 6-9 months. 

If you have Rs 20 lakh cash and borrow the rest from a PSU bank now, you would pay Rs 18,320* monthly installment for 20 years.

If you wait for 6 months, you would have borrow Rs 16 lakh and pay EMI of Rs 15,705**.
 
*EMI calculated at the interest rate of 9.25%
**EMI is calculated at 10.25%, assuming interest rates six months later won’t be higher that the rate PSU banks charged a week ago.

By waiting, you could also gain from being able to pick houses in areas, where the rates are much in excess of you budget.

“We expect the rates to fall by approximately 20 percent by February-March next year and that would be the best time to buy,” Pawan Swamy at property consulting firm Jones Lang LaSalle Meghraj. 

According to property portal Makaan.com, 61 per cent of 688 respondents in Delhi participating in a survey said they are willing to wait for up to 6 months.

And 35 per cent said they expect prices to fall further in the short term.

From the peak reached in January this year, prices are expected “to come off   between 25 to 35 per cent in the high-end segment and probably 20 per cent in middle segment,” said Anshul Jain, India CEO of DTZ International Property Advisers.

However, prices are likely to hold somewhat steady is the Rs 20-25 lakh category, but at these rates there are hardly any apartment flats available in the developed neighbourhoods of any metropolis in the country.

For example, a buyer with a Rs 25-lakh budget in the National Capital Region would have to settle for a place in Crossings Republik, New Gurgaon or the poorly connected neighbourhoods of Faridabad. In Mumbai, builders are coming up with affordable house, but in faraway places like Virar and Vasai.

In Bangalore, the buyer would be pushed as far as Yelahanka, 25 kilometers off the main city, while in Kolkata it would have to be in townships in the outskirts — Rajarhat and Patuli.

(Naresh Kamath in Mumbai contributed to this story)

Source : http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=92b385a3-2c35-43ff-82b0-e1418114f437&MatchID1=4856&TeamID1=6&TeamID2=2&MatchType1=1&SeriesID1=1223&MatchID2=4873&TeamID3=1&TeamID4=3&MatchType2=1&SeriesID2=1229&PrimaryID=4856&Headline=Good+deals+may+come+to+those+who+wait

Hyatt plans to open 10 more hotels in 5 years

Global Hyatt Corporation, one of the world’s leading hospitality companies and the owner of the Hyatt brand, has said it aims to triple the number of hotels in India to 15 in the next five years.

The Chicago-headquartered company, which currently operates five hotels in India under the Hyatt Regency, Park Hyatt and Grand Hyatt brands in Mumbai, New Delhi, Goa and Kolkata, said it will also introduce two-three more brands in the country.

Its global brands such as Hyatt Place, Hyatt Summerfield Suites and Andaz will make its way to the country’s Tier-I and -II cities. “Our aim is to penetrate more cities in India while introducing more brands here. We will triple our hotel count in the next five years. Since our focus is of long term, we see our business here growing robustly,” said Harmit Singh, chief financial officer, Global Hyatt Corporation.

Most of Hyatt’s future properties will either be completely managed by the company or partnered with a hospitality player, he said. “We will preferably go in for more of a management control structure and less of a partnership module,” Singh told Business Standard.

When asked if the current economic slowdown will be impacting the company’s expansion plans in India, Singh said Hyatt was feeling the impact of the downturn in the form of liquidity squeeze but ruled out any deceleration in the ongoing projects in the country.

Currently, Hyatt, along with DB Hospitality — the hospitality arm of Mumbai-based real estate company DB Realty —, is building a 70-storyed luxury hotel in south Mumbai at a cost of more than Rs 1,000 crore. A letter of intent has already been signed between the two companies. The tower, managed by the Park Hyatt brand, is set to become India’s tallest building.

Construction of the tower, which will overlook the Arabian Sea, has already begun and the luxury hotel will commence operation in early 2012.

The Hyatt and DB Hospitality combine is also constructing a second Hyatt hotel in Goa. The 320-room 5-star hotel is expected to start operations by December next year. Hyatt already runs the Park Hyatt in Goa, situated near the Arossim beach.

Meanwhile, in the wake of the recent terror attacks in Mumbai, Hyatt has upped the security arrangement in all its hotel properties across the country. The company is currently working with local authorities to increase surveillance activity. It has also formed a contingency and response team to tackle any unforeseen events.

Source : http://www.business-standard.com/india/news/hyatt-plans-to-open-10-more-hotels-in-5-years/00/26/343592/

NBCC To Launch Its First Residential Project

The National Building Construction Corporation has announced the launch of its first residential project in New Delhi, probably at Mehrauli, and NCR by 2008-end. Land is now being acquired for the purpose in Delhi, Gurgaon and Noida. Sources say that the houses in New Delhi are expected to cost between Rs 20 lakhs and Rs. 40 lakh. The priority of NBCC is to provide quality houses at affordable prices but that will depend on factors like the cost of land, according to Mr. Ajay Garg, Finance Director, NBCC.

Source  : propertybytes.com

Builders look to defer projects on slowing demand, cash crunch

New Delhi / Bangalore: Hit by slowing housing demand and a severe liquidity crunch, real estate companies are scrambling to defer most of their projects—residential, commercial, retail and hotel developments—especially in and around metros.

In Gurgaon, near New Delhi, several projects of developers, including DLF Ltd, Unitech Ltd and Parsvnath Developers Ltd, are now delayed by at least six months.

Two of Unitech’s projects in Gurgaon—Fresco and The Close—were scheduled for completion by December, but are now expected to be ready only by the end of 2009.
Phase I of the company’s Unitech Grande project, the super-luxury residential project in Noida, outside New Delhi, is also delayed by at least six months and is now expected to be delivered by July 2010, according to analysts and consultants. Developers are also going slow on mall and hotel projects due to cash flow problems
Parsvnath’s Exotica project in Gurgaon has been delayed by three-four months and is expected to be delivered in the second quarter of 2009. According to a Parsvnath executive who didn’t want to be named, the first phase of the project will be ready by March and the entire project will be completed by the first quarter of 2011.
“Initially, the delay was because of approvals required for projects at various stages, shortage of manpower and poor project management skills,” said an analyst with a brokerage firm who didn’t want to be identified, referring to the industry as a whole. “From there on it has become a question of liquidity.”
DLF’s Pinnacle and Icon, both in Gurgaon, were to be completed in the second quarter of 2008, but will now be ready only in the first quarter of 2009, according to real estate consultants.
DLF and Unitech didn’t respond to emails seeking comments on the specific projects.

Earlier this week, at the India Economic Summit of the World Economic Forum, DLF chairman K.P. Singh said some of the company’s residential, commercial and hotel projects have been delayed because of a slump in real estate demand and the liquidity crunch.

“Demand has gone down so substantially that projects are being shut down across the country,” he had said on the sidelines of the summit.
The Prestige Shantiniketan, Bangalore, doesn’t even have an expected deadline after a 15-storey tower came crumbling down recently. The project has been running two years behind schedule. The Prestige Group didn’t respond to emails.

Godrej Properties Ltd’s maiden project in Bangalore, Godrej Woodsman Estate, has also failed to meet the November deadline.
“We are hoping to finish it by April-May next year,” said a senior Godrej official who did not want to be identified because he is not authorized to speak to the media, but declined to elaborate.

K. Ramakrishnan, executive director, investment banking, of Park Capital Advisors Pvt. Ltd, says he is sceptical of developers meeting their new deadlines for projects. “A lot of developers are going to rethink their pricing strategy and cut down on profit margins if they want to sell and finish projects on time. They will also reformat their units, which means shrinking Rs60-70 lakh flats down to smaller Rs30-40 lakh units,” said Ramakrishnan.
The delay is not limited to residential projects alone.
Developers have either put on hold or are going slow on their mall and hotel projects due to cash flow problems.

Source : Livemint.com

Correction in real estate prices largely done: DLF

MUMBAI: DLF Vice President, Rajiv Singh said Monday that correction in real estate prices and volume in realty sector is largely done and he expects
stability to return in prices and volume in next eight months.

DLF scrip gained near about 10 percent early Monday. At 11:15 am, the share was trading at Rs 244, up 10.78 per cent from Friday’s close.

Rajiv Singh said he expects cash flows to remain positive in the sector but added that the tight monetary policy and the rise in home loan rates has severely affected the sector. Real estate developers are working on very thin margins, he added.

According to Singh, mid income housing continues to grow. However, he added that government polices should support the first time home buyer.

The Delhi-headquartered developer – which sells a large portion of its commercial assets to DLF Assets Ltd, a company promoted by DLF Chairman K P Singh, said DAL will raise Rs 5,000 crore from the market in next two quarter.

DAL’s portfolio as of now includes IT parks in New Delhi, Hyderabad and Chennai and two large office complexes in Gurgaon. DLF posted a 4 per cent drop in net profit for July-September quarter at Rs 1,935.35 crore, as change in product mix towards the mid-income housing compressed margins.

Source : Economictimes

Retail industry? India does not have one really

The retail industry in the United States, Canada, Europe, Australia and Latin America is about forcing the customer to come to its outlets owing to l
ower prices, fully functional websites which allow you to buy the smallest of items on the shelf and optimum use of logistics and ERP software. On the other hand, retail in India is about no web presence, juggling real estate lease costs and sourcing cheap knick knacks.

How many times in India, have you boasted about buying from your favourite retail outlet? If you have done that even once, rest assured you can be sure that what you are shopping from is not a retail outlet at all. The qualities of a retail outlet are very simple. It has to offer you goods (and not services) at the lowest prices available in the vicinity . You cannot really compare the price of T-shirts between what you buy in Bangkok and in Bangalore, really.

But you can definitely look for a better price between New Delhi and Meerut or Moradabad. If the friendly neighbourhood grocer is charging you the maximum retail price that is printed on the product and the local retail outlet is doing the same except for accepting payments through credit cards and having the near asleep doorman in a uniform startling you with an impromptu good evening, albeit poorly pronounced? A retail outlet is not a premium shopping centre like Harrods, which you flaunt to the less priviledged. It is a supplement to your friendly neighbourhood mom and pop store and not an upgrade to it.

Why should the customer go into a retail outlet and spend his hard earned money? Have our retail czars pondered over this problem? If the customer wants an air-conditioned environment then he can buy an air-conditioner and fix it at his house. Does he want all he would like to buy at one place? Is that the value of a shopping mall or large retail outlet? Well, for one thing, the builder of a mall or a retail outlet company can never guarantee that he will stock all the brands with him or even all the relevant brands with him. After leasing the building, it is the relationships that the mall or the retail outlet develops with various brands that determine the outcome of the outlet.

For instance, CEO of JHS Svendgaard, Nikhil Nanda had commented to FINANCIAL TIMES that he was in talks with most retail chains as they all wanted to tie up with a single oral health products company. JHS Svendgaard fitted the bill amazingly and all other brands would be shown the door. If that is the equation then as a customer I would not get a particular brand of toothpaste such as Colgate, Dabur Red or Himalaya Dental cream and may not want to buy the brands that Svendgaard produces, even if they are being supplied to Wal-Mart .

A retail company needs a lot of homework and many account managers where they have to service with great care both the customer and the supplier. The Toyota adage that your stakeholder is your customer too is not any truer than it is with retail companies.

Have you ever been obliged to visit a retail outlet which incidentally also sells all its items on the net? Was any low price scheme made available, which is not with the local grocer? Do you visit your retail outlet for variety, aggregation or just for the air-conditioning or the fancy carry-bags ? If the answer is no, then it is not a retail outlet by definition. The sorry state of affairs of retail outlets in India can be attributed to their concentration on making profits from the first store that they open and first item they intend to sell. A true retail chain has to open at least 50 outlets in at least 10 cities to gain the advantage of economies of scale. Bulk buying from the manufacturer will ensure low prices to the customer who buys from the shelf. However, one or two outlets as pilot projects are an exercise in fallacy and will never qualify as retail outlets at all.

Take Nik-Nish in Calcutta, the Home Store and Femella in New Delhi and Pantaloons all over the country. You come across the few exceptions to the rule. These companies although saddled by lack of professional management in the beginning have solved that minor glitch and swiftly appointed the right people for the right jobs.

Moreover, they have gone ahead and discovered new roles and new passions among employees where they can excel and take the mandate of the corporation forward.The answer lies in marrying technology and experience.

Source : Economictimes

Indian Hotels serviced apartment plan deferred

MUMBAI: Tata Group’s serviced apartment plans have suffered a set back.

Responding to a DNA Money query while announcing the company’s second quarter results, Anil P Goel, senior vice-president of finance for the group’s hospitality vehicle, Indian Hotels (IHCL), said: “The project could not take off with the same robustness that we were expecting for reasons beyond our control.”

“Reasons, the real estate vehicle that was formed to take the initiative forward has run into its own set of problems,” he added.

Meanwhile, the company on Monday reported a 4.8% fall in Q2 profit y-o-y to Rs 50.66 crore, as operating margins contracted by 710 basis points to 21.9%. It attributed the decline in net profit primarily to foreign exchange losses worth Rs 9.4 crore on mark-to-market foreign currency loans.

IHCL, the country’s leading hospitality chain, had in 2007 entered into a contract with Sansara Hotels India Pvt Ltd (SHIPL) to set up a chain of service apartments in central business districts (CBDs) across the country.

Offering less than 100 rooms across various studio accommodation categories, these service apartments were planned in Mumbai, Bangalore, New Delhi, Chennai and Pune.
The real estate vehicle, Sansara Hotels, was set up as a joint venture amongst US architect firm John Portman & Associates, Citigroup and HDFC to set up five service apartments in Indian metros within the next five years.

Interestingly, Portman has designed the architecture of Taj Wellington Mews which marked IHCL’s luxury residences venture in Mumbai in 2004.

Source : Dnaindia.com

For home buyers, it’s a long wait as builders go slow on projects

High raw material costs, rising interest rates and spiralling inflation have pushed up construction costs, making it difficult for developers to complete projects on time

New Delhi/Bangalore: An investor who had put in Rs3 lakh in a realty project of New Delhi-based Triveni Infrastructure Development Co. Ltd is in a fix.
After launching the project in 2006 and promising to complete it in 24 months, the company has not allotted the apartment to the investor who asked not to be named as he fears the company would not give back his money.
Crunch time: Parsvnath Green Ville in Gurgaon. While low-rise apartments under the project have been handed over to buyers, possession of the high-rises have been delayed, say property brokers, as the financial crunch has forced Parsvnath and other developers to slow construction.The investor, 30, who lives in Rampur, Uttar Pradesh, paid Triveni the money as booking amount for an apartment in Triveni Galaxy, a high-rise complex coming up in Sector 78, Faridabad, a suburb of New Delhi.
“I paid the booking amount when the pre-launch of the project took place in 2005,” he said. “But since then, the allotment of the apartment hasn’t been done, and they insist that I pay up the remaining instalments for it.”
A spokesperson for Triveni said: “Work is in full swing in the sector 78 project. Around 40-45% of the total work has been completed and we are trying our best to give the possession before the start of the Commonwealth Games (to be held in Delhi) in 2010.”

After a three-year boom, developers have slowed construction on projects as they are facing a financial crunch. High raw material costs, rising interest rates and spiralling inflation have pushed up construction costs, making it difficult for developers to complete projects on time.

There are many people who have been left in the lurch by developers who have delayed completing projects they launched during the real estate boom of 2005-06.
There are examples galore especially in New Delhi’s suburb of Gurgaon. Work on the high-rise apartments in Parsvnath Green Ville, a project by Parsvnath Developers Ltd on Gurgaon-Sohna Road, has been delayed by six-eight months, property brokers said. While low-rise apartments under the project have been handed over to buyers, possession of high-rise flats has been delayed by six months, said Rajiv Sinha of Veena Estate, a real estate agency.
Parsvnath’s spokesperson, Neetal Narang, however, denied any delay. “The project is on track,” she said.
Apartments in The Close, a Gurgaon housing project launched by Unitech Ltd, India’s second largest developer, in October 2004 have still not been handed over to buyers. “There are 17 towers in the north wing, of which 10 are close to possession and six towers are over a year behind completion date,” said Sanjay Sharma of real estate agency Gurgaonscoop.com.
Unitech declined to comment on the delay.
The story repeats itself in other cities. An information technology (IT) professional booked a Rs24 lakh two-bedroom flat at Electronic City in Bangalore in early 2007 when the property market was up and about. The project is now delayed by a year. Many of the buyers shot emails to the builder, Ittina Group, seeking reasons for the delay, but there has been no response.
“We know the builder didn’t have the funds to continue with the construction and, therefore, the delay. Now we are promised a December 2008 possession, but we aren’t convinced,” the IT professional, who is 39, said on condition of anonymity.
A senior official at Ittina said buyers would shortly be given possession, but didn’t specify when. The official didn’t wish to be quoted because he is not authorised to speak with the media. Interestingly, the company’s website says possession has already been given for the project.
Property brokers in Bangalore said the Shantiniketan project in Whitefield by the Prestige Group is delayed by two years and will now be completed by mid-2009. “A number of projects in Whitefield are stuck because the area is suffering from oversupply, and builders are cautious to continue construction even after launching them,” said Suresh V., a realty consultant.
A senior Prestige official, who requested anonymity as he is not authorized to speak with the media, had told Mint earlier that most of its projects were delayed due to rising construction costs.

Liquidity problems have also caused realtors to build in phases to bail themselves out from a slow market. Builders are dividing projects into phases, selling one phase and pumping the money from sales into the next.
“It is a wise move because it enables cash flow and allows construction to go on,” said Shailesh Kanani, an analyst with Angel Broking Ltd. “But builders are sitting on huge inventories and are unable to continue building without offloading stock, which is why the delays and projects stopping mid-way.”
Project delays have also propelled many developers to offer a safety net in the form of a penalty clause in the sale agreement. Tata Housing Development Co. Ltd, for example, has introduced this clause for the first time in its 32-storeyed Aquilla Heights project in north Bangalore. “The company pays the customer a penalty amount on a monthly basis if the project is delayed. This also puts pressure on the developer to deliver on time or else they need to pay up,” said a company spokesperson.

Livemint.com

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

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

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

Source : Travelbizmonitor.com

High-end residential areas see 20-25% rise in price

NEW DELHI: Sentiments in the real estate sector across the country may be depressed, but capital values of all high-end residential localities in major metros have witnessed a 20-25% rise in the last four months.

The posh markets such as Greater Kailash I & II, Jorbagh, Golf Links, Amrita Shergil Marg, Sunder Nagar, Vasant Vihar and Shanti Niketan in Delhi, Napean Sea Road, Peddar Road, Breach Candy, Malabar Hills in Mumbai and Richmond Town, Lavelle Road, Cunningham Road in Bangalore have a witnessed a spurt in prices.

In Mumbai, the prices in posh areas such as Altamount Road, Napean Sea Road, Nariman Point and Churchgate have gone up by 20-25%. But leading the pack is south Delhi which is seeing a major spurt in land values, with the market quoted prices as high as Rs 5 lakh to Rs 10 lakh per sq yard.

Source : Economictimes

Anant Raj industries to invest heavily in North India

Real estate developer Anant Raj Industries will be investing Rs 43 billion to develop properties across North India over the next three years. The company plans to develop four SEZs, two service apartments and one IT park across various locations in northern states. The company aims at touching the daily rental of Rs 20 million by mid- 2010. The sizes of the proposed SEZ would vary between 25 acres and 108 acres. The four SEZs would entail an investment of Rs 37.50 billion, which would be developed by 2010.

The company is also planning an IT park in joint venture with US-based private equity fund Monsoon Capital over 1.6 million sq. ft. at Panchkula and is also developing two service apartments in New Delhi comprising a total of 260 units to be completed by 2009 at cost of Rs 1.70 billion. The company plans to fund all projects via internal accruals, joint ventures and little amounts of debt.