Investment in a second home

According to a study conducted by Kapston.com, a Bangalore based e-business consulting firm, the sales of ’second homes’ in India increased by 50

per cent from 2002 to 2007, before the slump in the market brought the figures down to negligible. “Although the concept of second homes was accepted by the Indian audience, as the figures show, everything crashed during the downturn . In the last one year, there have hardly been any takers for this segment .

The market is stagnant as of now,” says Raminder Grover, CEO, Homebay Residential, Jones Lang LaSalle Meghraj.

There are two types of buyers, in the second home market, explains Grover. The first category consists of the affluent buyers who purely look at luxury and the second category is the middle and upper class, which looks at second homes as an investment option. “The first category has started showing interest, in the last coupe of months, but the second category of buyers is still playing the waiting game,” he adds.

As the demand for second homes dropped, even developers put their projects on hold and only now, are builders completing their pending projects. This trend, says Grover, is not surprising, as projects within the city are the ones that give developers immediate returns and so, most developers concentrated on completing these first. “With DLF launching their luxury home segment in Goa, other players, I believe, will soon join the fray,” he expects.

“The industry is still at a nascent stage and those who are planning for second homes, should look at it purely as an instrument of ‘value appreciation’ . Investors should look at it, in terms of growth, over the next two to five years,” says Hemant Shah, chairman , Ackruti City. Investment in the right property will always appreciate in value and with the younger generation earning well and investing intelligently , the second home market has good scope in India, says Abhishek Lodha, director, Lodha Develoers.

Second homes are sought, primarily as a means for a getaway from the city. However, for the larger Indian market, it is also an investment for post-retirement days. Real estate is always an asset and today’s generation wants the option of having a home by a hill or a riverside and this is why places like Devnahalli in Bangalore, Coimbatore, Ooty and Kasauli, are springing with second homes. “There is a lot of demand for properties between Pune and Panvel. Even the four main metros and its peripheral areas are in demand, for second homes,” reveals Tushar Khatri, GM (sales and marketing), Arihant Universal .

Apart from these, the other hotspots for second homes are hubs in Noida, Hyderabad, Jaipur, Kerala, and Gurgaon. Mumbai is also one of the preferred locations, with Royal Palms being the only second home provider within city limits. The 240-acre Royal Palms Estate is situated in the midst of Mumbai’s only green belt and surrounded by a further 20,000 acres of the Borivali Sanjay Gandhi National Park.

Source : http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Investment-in-a-second-home/articleshow/5198311.cms

Realty builds on affordable homes

NEW DELHI: Ekam and Roma Bansal’s (names changed on request) dream of owning a home came true last month when they booked a 12th-floor

two-bedroom apartment on the Greater Noida Expressway, near Delhi. They will be paying about Rs 30 lakh, of which some Rs 20 lakh will financed by a loan.

The Bansals are thanking their stars that they failed to seal a deal in the past two years they were looking to buy an apartment. Prices in the National Capital Region (NCR) are currently down a third from their peak at the end of 2007 and the slowdown has forced property developers to drop prices and build cheaper, compact homes that fit the budget of those such as the Bansals. Their builder Unitech was down in the dumps earlier this year as real estate prices crashed and buyers disappeared. The company is now patting itself on the back after deciding to launch so-called affordable homes, the relatively lower-priced apartments that are attracting buyers such as the Bansals.

Unitech says it sold 8.16 million sq ft of residential space between March and September out of a total of 10.11 million sq ft, helping it post revenues of Rs 3,913 crore that are higher than in the boom years of 2006 and 2007. And all the apartments it sold were in the affordable category, costing less than Rs 30 lakh apiece.

For Unitech and other real estate developers, building affordable homes is paying rich dividends. A survey of India’s top property firms and estimates from industry body Confederation of Real Estate Developer’s Associations of India (Credai) show that over 70 million sq ft of residential space was sold in the first six months (March-September) of the fiscal 2010). Bulk of the sales happened in the last 90 days and majority of the homes sold were in the affordable segment.

By the end of the fiscal in March 2010, builders hope they will have sold close to the 190 million sq ft they managed in 2007.

Across the expressway, where the Bansals plan to shift in about two years, Jaypee is building Wish Town, a 1,162-acre swish golf township with premium homes, malls, school, colleges and hospitals. It originally launched apartments with a view of a golf course and priced these at a minimum of around Rs 1 crore. But over the past few months, it has launched smaller flats starting Rs 25 lakh.

“In six months, we sold 10,000 affordable homes, while we also managed to sell another 2,000 luxury apartments around the golf course,” says Manu Goswami, head, sales and marketing, Jaypee Greens.

Unlike three years ago, when most developers were not offering affordable houses, now everyone is in that segment, says Hiranandani Group chairman Niranjan Hiranandani. Mumbai, where Hiranandani is based, has seen close to 8.4 million sq ft of housing sold in the past 6 months.

“Sanctions have picked up and we are already at 70% of the peak. We expect home loan disbursals to reach the peak levels of 2007 by the end of this fiscal, subject of course, to the fact that developers do not increase rates further,” says SN Nagendra, senior general manager, HDFC, one of the country’s largest housing finance companies
.
Developers say enquiries for homes began around March 2009 and conversions started to happen July onwards, with bulk of the demand in the affordable segment.

There was latent demand but it was not converted into sales due to economic uncertainty, observed Mr Hiranandani.

“The sudden spurt in demand due to perceptible change in the economic environment in the past three months, combined with lower interest rates, has bolstered the confidence of home buyers.”

Among the major developers who have ridden this new real estate wave are Unitech, the Jaypee group, DLF, BPTP and Omaxe, witnessing a sharp rise in demand, particularly for new projects.

Home loan trends bolster this claim. In the first six months, State Bank of India’s disbursements were in excess of Rs 10,000 crore, compared to Small is beutiful

Rs 3,900 crore in 2007-08 and Rs 4,900 crore in 2008-09 for the April-September period.

“We are sanctioning much higher volumes now for home loans. The growth in home loans has been even higher than in 2007,” says P Nandakumaran, head retail banking, SBI.

However, due to lower pricing, average realisations for most real estate players is down 25-30% per sq ft in comparison to 2007-08. Unitech has seen its average sales price coming down from Rs 4,000 per sq ft before September 2008 to Rs 3,234 per sq ft in the past 6 months.

The profitability of these companies will surely come down due to the decline in realisation, says Aditi Vijayakar, executive director, residential service at real estate consultancy Cushman & Wakefield.

“The profit margin of these companies depends upon when and at what price these developers bought the land,” she added.

Jaypee, which has sold close to 11.5 million sq ft of residential space in six months, has seen a decline of 25-30% in average basic sale price, primarily because it is selling more affordable homes.

Unlike during the last boom period when developers concentrated solely on luxury housing, this ongoing surge is seeing a mix of both affordable and luxury housing.

“The market was overheated and people were waiting for it to come back to a realistic level. The expectations of developers and buyers were mismatched. Everyone was working on the wrong product, including us,” says Manu Goswami.
A senior official of DLF, the largest real estate player in the country, said that the company has sold 2.5 million sq ft of space in the past three months. Of this, about 2.1 million sq ft has been sold in the past 30 days.

“The confidence of the people is back as the economy is turning around. This has led to robust demand for housing at good locations and affordable prices,” says Rohtas Goel, CMD, Omaxe. The company has sold close to 1.8 million sq ft of housing space over the past three months.

Delhi-based developer BPTP has sold about 6,800 homes across three properties in Faridabad totalling about 7.76 million sq ft. According to Prakash Challa, vice-president (south) at Credai, the southern region has seen sales of around 20 million sq ft in the past 6 months. The eastern region saw close to 3 million sq ft of sales.

Ashish Puravankara, director of Puravankara Projects, says that while demand was always there, it is sentiment that has changed.

“Now, with companies showing great results, hiring again and even giving a 8-10% hike in salaries, the sentiment is getting better.”

Source:http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Realty-builds-on-affordable-homes/articleshow/5147148.cms?

Best time to look for a value deal in real estate

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

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

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

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

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

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

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

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

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

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

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

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

3C Company’s new project

3C Company, focusing on green development in Delhi-NCR, has announced the launch of ‘Lotus Boulevard Espacia’, a part of one of the largest green residential estates, in Noida. Spread over 10 acres, ‘Espacia’ will offer 3-BHK and 4-BHK apartments ranging between 1,950 sq.ft and 2,550 sq.ft.

Lotus Boulevard Espacia is the result of the healthy market response to the 30-acre ‘Lotus Boulevard’, according to a press release.

Lotus Boulevard Espacia will provide an ergonomic environment to its residents. The project will have multi-functional full-fledged “Club Platino” for fitness, games and shopping. A spa, swimming pool and gym will provide total fitness solutions to the residents. For sports leisure, the club will have a squash court, a tennis court, opti-golf and a putting green. A shopping option in the club will be built to take care of the daily needs of the occupants.

For entertainment and enrichment activities, Planet Lotier, that sprawls over an area of 1.25 lakh sq.ft, will have a cricket academy by Madan Lal, fitness centre by Elemention, dance school by Ashley Lobo, medical facilities by Max Healthcare, pre-nursery school by Lotus Valley International School, multi-utility sports hall for badminton, volleyball, basketball and with a rock climbing wall too.

It will also have an indoor heated pool, outdoor pool, kids pool and wave pool with skating rink, open amphitheatre, exhibition centre, multi-speciality restaurant, convenient shopping, and multi-cuisine food court.

Located in Sector 100 of Noida, right off the Greater-Noida expressway, Lotus Boulevard Espacia is close to DND Toll Bridge and the upcoming DMRC station providing connectivity to key locations in Noida. The project will be ready for possession in 36 months.

Recently, the company was awarded the prestigious LEED Platinum rating in shell and core category by US Green Building Council for its eco-friendly project ‘Green Boulevard’, in Noida. With this, 3C Company is the only one in Asia to have to its credit three Platinum rated LEED certified green buildings, according to the press release.

Hiranandani Upscale’s Chennai project

Hiranandani Upscale, which is developing 110 acres of premium residential and commercial space, has announced more residential offering in the second phase of the project coming up on the IT corridor in Chennai.

The second phase, the Oceanic, has been launched with spacious 3,500 sq.ft, 5-BHK apartments. This has now been followed up with the launch of ‘Edina’, an exclusive hi-rise tower offering 3-BHK apartments of 1,790 sq.ft and 1,950 sq.ft. More developments are envisaged at a later date with different configurations. The project will be developed in phases, with each being a self-sufficient community. The first phase, planned for completion 2-3 years from date, offers six multi-storeyed towers, comprising two-level basement + stilt + 28 upper floors, with areas ranging from 1,295 sq.ft to 2,752 sq.ft for 2-BHK, 3-BHK and 4-BHK.

Festive offers from Amrapali Group

With the onset of the festive season, the Delhi-based Amrapali Group has unveiled a range of schemes for its customers. The real-estate developer hopes to use the auspicious occasion of Navratras, Eid, Dusshera, Durgapuja and Diwali, the peak time to make festive bonanza offers, according to a press release.

These include freebies with the purchase of residential flats with the customers getting assured gifts such as televisions, refrigerators and washing machines. Apart from these, on Dhanteras, with the booking of a residential flat, the customers pay 1 per cent less on the total cost of the flat.

For investors, it has designed an exclusive offer, that is, on the purchase of ten residential flats, a 50 per cent cut from the original cost on the purchase of the eleventh flat. A lucky draw will get the winner a fully furnished, luxurious house.

A press release quoting Mr Anil Sharma, Chairman, Amrapali Group, says that “festive season is the best time to introduce offers for your customers and Amrapali has set new visions to fully satisfy its customers with a bag of surprises at the purchase of every flat during this auspicious period.”

Source : http://www.thehindubusinessline.com/iw/2009/09/20/stories/2009092050711500.htm

Affordability trap

Before the great economic doom caught up with the economy in general and the real estate sector in particular, life for developers was relatively cushy. High-priced houses were being hawked as if there was no tomorrow. But when tomorrow did come, there were many lessons to be learnt. The foremost among them being this: a residential project should appeal and target the majority to be successfully sold out. Real estate developers learnt this concept of ‘affordability’ only after a large number of their premium and luxurious residential projects failed to take off and many others had to be tweaked in order to cater to a wide spectrum of end-users.

Over the last one year, developers of all hues have announced residential projects in the affordable category. These projects, which were launched in different parts of NCR (national capital region) reported quick sales within days of their official announcement.

Consider this: DLF sold its phase-I of the Capital Greens project located in the heart of Dehi within two days of the launch, Jaypee sold its residential project Aman in Noida within a day of the official launch. BPTP reported brisk sales for its Park Floors project in Faridabad. Similar has been the case with residential projects launched by Omaxe.

The developers claim that the end users have finally come out of their hibernation. Sales figures provided ballast to their claims.

Yet doubts remains about the timely completion of projects. Many affordable projects which have been launched and successfully pre-sold, do not either have the mandatory environmental clearance or have not received orders for the change in land usage required for residential development.

“Many developers miscalculated the time lag between the soft launch, and actual delivery. Some of the projects monitored by us are already delayed by a year or so,” Ajay Dabas, director of Gurgaon-based consultancy Certes Realty, told FC Estate.

The developers do not wish to delve too much on these aspects. They concede, however, that mandatory clearances are a matter of concern for them. “A project’s delay does affect our reputation. But as these clearances are given by various governmental agencies, which take their own time, there is very little a developer can do to ensure speedy clearances,” admitted an NCR-based developer on conditions of anonymity.

However Tanuja Pradhan, national head of the global real estate consultancy Cushman & Wakefield, holds a divergent view. “The affordable projects have been launched by the same developers who have various stalled projects in their kitty. They are under pressure to complete them.” She added that it would be too early to say that the projects are being delayed: “Even if delay takes place, developers are willing to compensate with a penalty amount payable on per sq ft basis.”

In fact, a closer look reveals that similar factors lie at the roots of the present-day crisis in real estate.

Circa 2004: Project after project was being launched albeit in the premium category with a price tag of Rs 1 crore plus. ‘Income levels are increasing at a fast pace’, ‘the average age of the home buyer has come down drastically’, ‘NRIs will be our target customers’, were some of the rationales doled out while launching these projects.

This was also the time when Rs 1 crore became the base value while talking about the price of a house. Ironically this was also the time when real estate deals started happening only between reckless investors (read speculators).

These projects too did not have the mandatory clearances. People were lured to invest money in realty projects to make a fast buck. Prices were appreciating within a matter of weeks. But as this appreciation was bereft of any real buyers, be it resident or non-resident Indians, the developers soon felt the pinch. The weeks after collapse of the erstwhile Lehman Brothers saw developers of all hues being gripped by a severe financial crunch.

Intense analysis and introspection into what went wrong followed. Dwelling deeper into the causes the sector soon found the mantra of all ills, affordable housing!

Akin to the phoenix rising from ashes, developer after developer began announcing projects in the affordable category. So even as a couple of years earlier ‘premium’, ‘luxury’, ‘exclusive’ and ‘Rs 1 crore’ were the catch words, they have been replaced by ‘inclusive’, ‘affordable’ and ‘Rs 1 lakh. How times change!

The transformation and change of heart has been often been touted as a learning curve for the real estate sector. The sector has found its place and would emerge stronger in a short time, has been the argument. In fact, a recent Knight Frank survey points out that it is the average tenant households staying in their current residence for the last two-and-a-half years who are driving the demand for affordable houses. These buyers perceive Noida, Ghaziabad and Gurgaon as the most favoured destinations for living.

A large number of affordable projects have indeed been launched in these cities. Interestingly, with inevitable delays, the affordability of projects are also at risk. “Projects were launched with the popular tag of “affordable” but the hidden costs and delays would amount to over-runs for the end buyer in many cases. Coupled with the fact that many developers insisted on a lock-in period and no cancellation for 12-15 months, consumers are not very happy too,” argued Ajay Dabas.

The Knight Frank survey also revealed that the developers have to pay external and internal development charges to the government which ultimately, are passed on to the consumer thus increasing the overall cost of a house. “The EDC and IDC costs coupled with the high transaction cost and stamp duty can go as high as Rs 350-400 per sq ft which are transferred on to the end user by the developer,” says the report.

Counters Dabas: “Many developers who had priced their projects at high rates were forced to re-launch with a lower price tag. That signalled the increase in demand. ”

However, most are really not affordable owing to the many hidden costs and spiralling charges of external and internal development charges, parking etc, which constitutes nearly 25 per cent of the base price.” He further adds that there is hardly any project which has been launched in the recent past in the truly affordable gross cost of Rs 20-22 lakh.

Yet another concern which warrants attention is the diversion of funds which have been garnered from the investors for a specific project to other incomplete projects of the company. The developers remain tight-lipped over the issue of fund diversion towards completion of other projects and only say that their affordable housing projects will be completed on time.

However, a couple of years earlier, funds were diverted towards purchase of land and building land banks.

So if the developers divert the funds mopped from their ‘affordable housing’ projects towards completion of earlier projects and miss on the deadlines promised in their brochures, the sector would fall into a deeper mess than at present.

Industry body Assocham had recently mooted the idea of having an escrow account, which can ensure that payments received from the buyers is utilised towards the construction and development of the said project.

“Very few projects are funded through deposits into the escrow accounts. In its absence, the buyer would remain at the mercy of the developers, till the validity of the lock-in and payment commitments,” said Dabas. He added that payments made against project “A” can legally be used by the recipient for other purposes too, since it is legitimately accessed.

However, R Nagaraju, general manager corporate planning of Delhi-based developer Unitech, said that an escrow account for all projects will make it difficult to simultaneously manage various product portfolios of the company. He further reasoned that subsidising a low-profit project with that of high profit projects is a commonly accepted business practice.

Nitty-gritty aside, the end-user who puts in his hard-earned money into buying a house would want to move in it as promised by the developer.

Whether the delay happens due to governmental apathy or the lack of business acumen on the part of developer, the sufferer ultimately remains the end-user.

Source:http://www.mydigitalfc.com/real-estate/affordability-trap-171

Demand up for NCR budget houses

NEW DELHI: Even as the economic recession is running its course, there is one area where the shadow of gloom has not fallen. The demand for affordable houses in the NCR has, in fact, gone up as more and more people are coming forward to buy their dream house.

According to reports by leading property consultant agencies, there’s good news on the residential segment more and more people are coming forward to buy their dream house, albeit with minor adjustments. Affordable housing is the buzzword as the real estate market is limping back to normal.

Pramod Thakur, a broker in Gurgaon, said, “Its not that people have stopped wanting to buy a house. Prices were too high for most projects. However, in the past couple of months, a number of low or medium budget housing projects have been launched in the NCR, and the response has been good.”

It’s a trend that consulting agencies, too, have noticed. A recent report (for the second quarter of 2009) by Colliers International notes that residential projects launched 25-30% below prevailing market rates have received good response. A market report by Cushman & Wakefield added, “In the mid segment, Gurgaon and Noida witnessed noticeable correction (of prices) over the year due to competitive prices offered by the developers.”

A senior executive of a leading developer said, “Luxury housing, with world class amenities, is restricted to high end users who constitute only 5% of the population. It was time for the developers to look at the large middle class population which requires affordable housing.”

That developers have realized it is obvious from their behaviour in the past few months. Even as new projects were launched in Gurgaon and Noida in the low to mid range Rs 30-45 lakh other big projects that had already been launched saw addition of smaller flats in high-end projects. For instance, Tulip Orange, The Residences, Vatika Bellevue and IRIS-Emilia-Primrose apartments were launched by builders like Tulip, Unitech and the Vatika Group in the affordable segment some months ago even as reports of DLF changing its housing designs in Gurgaon to squeeze in more two-bedroom units, along with four-bedroom homes, makes the rounds of the real estate circle.

That there’s a world of difference between the high end projects and the affordable housing is obvious. For instance, most of these new projects have reduced floor areas, with some even having reduced floor heights to cut costs. However, the fact that the prices are within budget and there’s support from banks most have slashed rates with SBI offering housing loans
at 8% interest in the first year has prompted many to opt for buying a house in the prevailing downturn.

Incidentally, the affordable housing market in India that is increasingly being targeted by developers is worth at least Rs 3 trillion and will see demand for 2.06 million homes by 2011, said a survey conducted by property consultant Knight Frank India.

source:http://timesofindia.indiatimes.com/news/city/delhi/Demand-up-for-NCR-budget-houses/articleshow/4996638.cms

Realtors turn malls and office plans into homes

Mumbai: Residentials hot, commercial space not.

With developers forced to return to the drawing board to make projects financially viable, the landscape is, indeed, changing.

Look what TTK Prestige, the cooker-to-condom maker, said in a notice to the Bombay Stock Exchange last week.

In 2007, the company had entered into a joint development agreement with Kolkata-based Salarpuria Group to develop a 6.3 acre site in Dooravani Nagar, Bangalore.

The initial plan was to construct a mall to ensure recurring rentals. But the financial crisis has forced a change: residential blocks will be added to the project.

“Taking into account the ground reality, Salarpuria suggested putting up a residential-cum-office space. But a decision on this is yet to be taken,” said K Shankaran, director and secretary, TTK Prestige.

The management feels the new plan makes sense from a liquidity point of view.

Also last week, another firm, Sunteck Realty, said it was revisiting its project –a commercial complex on a 1.5 acre site between Kandivali and Borivali. “The project hadn’t even reached the drawing board when we closed the deal a few months back. However, taking into account the oversupply situation in Mumbai’s commercial space, we thought it prudent to develop a high-end residential complex instead, with a small portion of retail added to it,” said Sunteck Realty managing director Kamal Khetan.

Orbit Corporation, the south Mumbai realtor, decided convert its 2.5 lakh sq ft commercial development, called the Hafeez Contractor House in Lower Parel, into a residential project.

Pujeet Agarwal, managing director, Orbit, said the company is actually converting two commercial developments — the Lower Parel one and another in Andheri — into residential ones.

Realty analysts said oversupply and declining demand is making such commercial space development unviable.

“The government’s initiatives towards reducing borrowing costs is reflected in declining interest rates on home loans. This, coupled with realty prices getting more realistic are helping maintain the excitement in the residential space,” said Sanjay Dutt, CEO, business, Jones Lang LaSalle Meghraj, the real estate consultancy.

Revival in demand for commercial space, meanwhile, will largely depend on the global economic scenario.

“The only movement that I see is offices being relocated to more reasonably priced commercial developments thereby cutting costs,” said Dutt.

Investment bank Goldman Sachs in a recent report, said primary residential volume trends (year to date till May this year) indicated recovery in markets such as Mumbai and Noida.

“Inventory days in the two cities have fallen back to early 2008 levels or better. However, the overhang in Bangalore, Chennai, Gurgaon and Hyderabad remains significant with at least 15 months of inventory in the pipeline,” Goldman analysts Vishnu Gopal and Aditya Soman wrote.

With inputs from Pooja Sarkar in Kolkata

Source : http://www.dnaindia.com/money/report_realtors-turn-malls-and-office-plans-into-homes_1282909

Unitech to pump Rs 600 cr into affordable housing

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

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

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

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

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

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

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

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

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

Raheja Developers plans to develop serviced apartments in Delhi, Noida and Faridabad

According to a report in The Financial Express, development of serviced apartments in major metros is the latest trend in the Rs 10000-Crore real estate sector. Top builders aim at supplying 100 per cent service apartments to attract tourists and business travellers.

Delhi-based Raheja Developers is planning to venture into the development of serviced apartments in India, for which the company is planning land deals in Delhi, Noida and Faridabad. The move coincides with the Commonwealth Games 2010.

Navin Raheja, Managing Director, Raheja Developers, said, “In the next one year, we will launch 150 units of serviced apartments in various sectors of Gurgaon to cover the huge shortage of hotel rooms and apartments for tourist and business travellers. The demand for serviced apartments is suddenly high in the National Capital Region (NCR) because of the upcoming Commonwealth Games. We would be offering 25 per cent lower room rents, an alternative option to steep hotel accommodation. The area would vary from 400 sq ft to 600 sq ft and would be extremely competitive in pricing.”

Serviced apartments are fully furnished, ready-to-use apartments, usually 300

Source : http://www.hospitalitybizindia.com/detailNews.aspx?aid=5849&sid=1

3C Company Come Up with India’s Largest Green Residential Estate

The 3C Company, a leader in conceptualising green buildings in the country and Noida’s largest developer of commercial and IT office space, today announced the launch of India’s Largest Green Residential Estate – “Lotus Boulevard”. The 3C Company has planned the 40 acres housing project with an outlay of Rs.1,550 crore. The first part of this landmark project, spread over 30 acres, has been funded jointly with Red Fort Capital, the leading international real estate private equity fund.

Lotus Boulevard is strategically located in Sector 100 of Noida amidst the already habitated sectors – 46 & 47 and right off the Greater Noida expressway. This Green residential estate enjoys excellent connectivity with the key locations in Noida – DND Toll Bridge, Sector-18 Market, upcoming DMRC station, schools, hospitals etc. Speaking at the launch, Mr. Vidur Bharadwaj, Director, The 3C Company said, “Lotus Boulevard will strengthen our vision to be an integrated green developer creating buildings which are truly sustainable in form, function and use. It reaffirms our commitment to provide world class facilities which are not only user friendly but also contribute in reducing carbon footprints.”

The 3C Company has created a benchmark for itself in creating green wonders. Under the 3C umbrella, this is the only team in Asia which has to its credit two platinum rated LEED certified green buildings namely, the Wipro Technologies in Gurgaon and Patni Campus in Noida. “Everyone dreams of buying a house which is spacious, airy, set amid green acres with excellent infrastructure. Lotus Boulevard will provide one such dream home. It serves twin purpose of healthy living with cost savings while at the same time showing sensitivity towards the environment. An array of amenities, are offered in the project,” expressed Mr. Bharadwaj. A perfect blend of majestic ambience humming with eco friendly environment, this aspirational group housing would be synonymous with affordable luxury.

Says Mr. Subhash Bedi, Managing Director, Red Fort Capital, “Red Fort Capital is happy to partner with an experienced developer with funding and strategic support to ensure timely delivery of a much needed product. This project reinforces Red Fort Capital’s commitment to the delivery of quality middle income housing in large metros in India. We congratulate The 3C Company for developing India’s Largest Green Residential Project and setting enviable benchmarks such as quality and 21 month delivery for others to follow. We are confident that Lotus Boulevard will create a rave among customers.” To be developed in phases, Lotus Boulevard offers the residential apartments in choice of 2 & 3 BHK units, with areas ranging from 987 Sq. Ft. to 1820 Sq. Ft. approx at a inaugural price of Rs. 2825/- per sq. ft.

These apartments redefine modern design through optimum space utilization and elegant interiors which allow 100% natural light to flow in and cross ventilation with a fresh breeze of air. With over 80% of open spaces, all balconies and windows have been specifically designed to burst into the freshness of nature. The developer offers the provision of insulated roofs and walls that substantially reduce heat ingress (up to 60%), thereby resulting in substantially lower air-conditioning loads. Each of the towers are so designed that the orientation of the building is as per the sun path. The project offers all modern amenities for a comfortable lifestyle. Lotus Boulevard comes with round the clock security and back-up for water and electricity. Adding more flavour to the impressive project is, PLANET LOTIER, sprawled over an area of 1,25,000 sq. ft, which forms a part of Lotus Boulevard. Some of the features which make it a green building are the use of energy saving lights, water saving fixtures and fittings, mechanism to recharge the water by unique water harvesting methodologies etc. Divided into five distinctive categories, Planet Lotier will play host to plethora of activities in sports, leisure and entertainment.

Features like a shuttle bus service to key locations in Noida, 24×7 security, 24×7 power back up, 24×7 water supply, professional facility management, ample parking etc. will ensure maximum comfort to the residents. “The possession for the first five towers will be handed over within 21 months from the launch. It is the flawless management and co-ordination of our in-house resources that would ensure that the project is delivered as committed. Prime Location, Green Aspects and Planet Lotier are some of the ingredients that would make sure that this Green Residential Estate elevates the realty market of Noida”, added Mr. Brijesh Bhanote, Sr. Vice President – Sales & Marketing, The 3C Company.

Source : http://www.indianrealtynews.com/real-estate-india/3c-company-come-up-with-india%e2%80%99s-largest-green-residential-estate.html

Surge in demand for office space good for economy

The real estate market has shown a clear sign of revival following the formation of Congress-led UPA government with a clear majority at the Centre.
Apart from the affordable housing sector, which has witnessed a surge in demand, office space too has registered fresh demand, which was almost dormant for last one year, ever since the global economy went into a tailspin.

Commenting on the latest biometrics of the real estate sector in the country, Anshuman Magazine of CB Richard Ellis (South Asia) said, “In the 1st quarter of 2009, confidence and sentiment was low in the real estate market. The formation of a new government has improved market sentiment, while the global economic decline appears to be bottoming out. This has resulted in an improvement in the velocity of office space offtake, especially in the small to medium segments . This is further supported by a substantial decline in rentals in the past one year.”

Surge in demand for office space is a good sign for the economy, and also for the real estate sector. The opening of new offices means investment is likely to pick up, which will help revive the economy. At the same time, it also leads to creation of new jobs, which drives the demand for residential real estate. Normally, the demand for residential space increases by a factor of ten to that of office space.

Because of tough market conditions , coupled with a global slowdown, investments in the economy got badly hit. This resulted in a slowdown in demand for office space all of a sudden, in the last one year. But, the fresh supply of office space continued as buildings launched earlier to meet the expected strong demand for office space were completed during the period, even as the global economy was facing what may be billed as the second worst recession in the last hundred years.

This put pressure on rentals and capital value of office space in the country. In fact, this led to correction in rental rates and brought them down, closer to a more realistic level. CBRE report on office space said rentals in the secondary business district (SBD) of Nehru Place came down to more realistic levels with a correction of around 11% over the last quarter, to Rs 160 per sq ft per month.

Saket, another emerging market in the NCR, received minimal interest from the prospective office space occupiers. But as a huge supply of office space deluged markets in the last three months, the vacancy level in Saket rose to 35% and rental values corrected by around 22%, to Rs 140 per sq ft per month, over that in January-March 2009 quarter.

At Jasola, another promising SBD in the NCR, rental values fell by around 20%, to Rs 110 per sq ft per month due to a huge supply, 1.3 million sq ft during the period. Jasola is likely to benefit from a proposed fivestar hotel, multi-level parking facility and Metro-connectivity.

However, rentals in Gurgaon have not declined much in the last three months as they had already fallen substantially in the second half of 2008. In fact, corrections in the rentals have also helped in reviving demand for office space.

The report says Gurgaon witnessed an increase in the transaction activity, assisted by attractive leasing packages offered by most developers. Companies, the report says, which had postponed their expansion/relocation decisions due to negative sentiment are now ready to take advantage of the softened market and the options available for a phased take-up.

The report says Noida office market suffered heavily as rentals fell by 21%, to Rs 30 per sq ft per month, due to high vacancy levels at around 25-30 %. In fact, in the last one year, rentals in Noida dipped by almost 33%.

However, the positive aspect to all this is that leasing volume has increased by 3-4% in the NCR during the second quarter of 2009. The report says the increasing levels of corporate confidence should help this region and the momentum should be maintained in the second half of the year.

However, rentals in the commercial space market will continue to face challenges due to a large supply of new space, and till the time that the global economy gets back onto the path of recovery, opines Magazine. As rental values declined, the capital value of the property also suffered.

The fall in the capital values, however, has encouraged an increasing number of companies to explore and evaluate opportunities for an outright buy-out rather than leasing the required space. Though there is an improved level of activity in the sector, the markets are expected to remain soft in the short to medium term.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Surge-in-demand-for-office-space-good-for-economy/articleshow/4791799.cms

Steady Recovery for Office Real Estate

Call it recession or an oversupplied market (in terms of office space), or the general negative sentiment prevailing in the market, office real estate hit an all time low with values nearly bottoming out as compared to its peak around 8-12 months ago, in fact, the commercial real estate values dropped by an average of 25% in all markets and touched 50% in some. The transactions were few and far between as majority of the corporates postponed their business expansion plan and were downsizing, as most were not sure if they would be able to sustain themselves, leave alone embark upon any expansion plans, while those who were earlier looking at expansion/relocation fell in a wait-and-watch mode, in anticipation of further correction.

Giving a sense of the depreciation in commercial real estate values, specifically office space, Arjun Kumar, director of AsiaPac International India says, “Commercial and IT space has witnessed almost 40-50% correction compared to rates 6-8 months ago, across NCR.” He quotes the lease rent in Gurgaon for warm shell as anything between Rs 60-75 /sq ft /month and Noida (on the expressway and Sector 62) as Rs 45-55 /sq ft /month while one can get a steal at Sectors 63, 64 (which are primarily industrial sector but IT/ITeS are allowed to operate ) at Rs 25-30 /sq ft /month for warm shell space , and here additional space is being added almost every day.

Delhi CBD (Connaught Place) also witnessed correction of 40-50%. Says Kumar, “One can have space here between Rs 100-175 /sq ft/month depending on the building (A or B Grade) and maintenance, upkeep of the respective buildings. In South Delhi, Saket and Jasola District Centre in particular, have been witnessing almost 30-45% correction in lease rent as well as capital value. The lease rent being quoted in Jasola is Rs 140-175 /sq ft/month wherein capital value is anything between Rs 11,000-13,000/sq ft for commercial office space.” Apart from the values dropping, there has been a substantial drop in transactions. If at all transactions were happening, they were restricted to the suburbs such as Gurgaon’s Udyog Vihar, as well as builder sectors and Noida — on the expressway, Sector 62, 63, 64.

Says a broker, “The companies which are sure of their business plan and think that market will improve sooner or later are moving forward with their plans, especially, the major Indian corporates, which are catering to the domestic market. These include primarily telecom and software companies.” What is the exact situation in Delhi CBD and secondary micromarkets, Samantha Jerath of Jerath Properties says office transactions have slowed down, undoubtedly. “But it will be wrong to say the values have come down by 50%. This is because even though a rate of Rs 350 /sq ft /month was quoted earlier, no actual transactions were recorded at the value. The highest was Rs 250 and I would say office space values in CP have come down from Rs 175-250 /sq ft /month to Rs 120-150 /sq ft /month. In secondary micromarkets, it has depreciated from Rs 175 /sq ft /month to around Rs 110 /sq ft /month. There has been correction at least to the tune of 20-25% in the entire Delhi NCR region.”

He attributes the fall in office values to a generic overall market dynamics. “The economy is not bullish and so the real estate is witnessing a dent in values. Corporates are downsizing, have tighter budgets and are not enthusiastic about paying high rentals.” But the good news is that revival is on its way in commercial real estate. Says Anurag Bhatnagar, associate director at DTZ, an international property consulting firm, “Commercial real estate was suffering from lack of transactions till Q4 ‘08, but Q1 and Q2 ‘09 have witnessed absorption of a million sq ft each. Rentals across Delhi NCR had already corrected by 10-20% in Q4 ‘08 from peak asking rates in Q2 ‘08. Values corrected further marginally, by 4-5% across all micromarkets from Q1 to Q2 ‘09.”

So far, companies with expansion plans stayed on the sidelines anticipating bottoming out of the market. Citing the reason for lack of transactions, Mathur says lack of absorption/transactions till Q1 ‘09 was due to the general negative sentiment in the market, the cut on global-IT spend for companies and the delayed decision making process. During this period, companies adopted various strategies like renegotiation of contracts along rationalization of their current space layout resulting in higher efficiency. Q1 2009 witnessed a revival in demand with companies closing out deals due to good rates due to broader market being close to bottom. Q2 2009 again maintained the absorption levels of Q1 2009, primarily due to companies getting corrected rates in various micromarkets.

Delhi witnessed the lowest number of transactions in office space in the last one year, while the maximum transaction in office space took place in Gurgaon in Delhi NCR. Gurgaon witnessed majority of the absorption due to availability of Grade A office space in prime areas, available at attractive rates. Early completion of upcoming Metro corridor has also added value to the whole package (against Gurgaon always seen as suffering from lack of public transport).

Source : http://www.indianrealtynews.com/real-estate-india/steady-recovery-for-office-real-estate.html

Property, Real Estate and Peace of Mind

Jaypee Greens Kosmos: Jaypee Noida coming up with a new affordable housing

Noida, India 13th July 2009, With the usage of effective and efficient space planning techniques measures Jaypee Kosmos are built to create vibrant place to live in. It has facilities and amenities which match any premium residential project. These residential will suits those buyers who have dream to buy a premium home in an affordable price. Its location is strategic. It is on the vantage point of Greater Noida Road and Faridabad-Noida-Ghaziabad (150m wide), Link Road along Yamuna River, Noida-Greater Noida Expressway, NOIDA Toll Bridge, Greater Noida – Mathura – Agra Expressway, and Rail Link.

(live-PR.com) – About Projects: Jaypee Greens new residential project Jaypee Greens Kosmos Jaypee Noida on Noida – Greater Noida expressway has received tremendous response from the market. A total of >3000 apartments that had been introduced in the market, have already been booked in few hours. This is due to the strong belief that the pubic has in Jaypee Greens, Noida and the strong value system of the company.

Common Amenities of Jaypee Greens Kosmos

Shopping Arcade, Temple, Schools, Medical facility, ATM, Banks, Transport to City Centre, Landscaped Green Area, Children play area, Ample Parking Area, Community Hall, Party Hall, Clubhouse, Solar Water Heating, Water Treatment Plant, Power Back-up for Utilities, Round the Clock Security, Fire fighting system, Gymnasium, Swimming Pool, Tennis Courts

About Builder: The Jaypee Group is a well diversified infrastructural industrial conglomerate in India. Jaypee Greens Wish Town Klassic is one of the best property provided by Jaypee Group in noida.Over the decades it has maintained its salience with leadership in its chosen line of businesses – Engineering and Construction, Cement, Private Hydropower, Hospitality, Real Estate Development, Expressways and Highways. The Jaypee Group is synonymous with creating premium lifestyle experiences through exclusive golf-centric real estate. The existing 452-acre development at Jaypee Greens, Greater Noida integrates homes with landscaped greens, resort living and commercial developments amidst an 18 hole Greg Norman golf course. It is a complete lifestyle destination offering individual homes and luxury apartments.

Source : http://www.live-pr.com/en/property-real-estate-and-peace-of-r1048298866.htm

Ireo to invest $500m in Indian realty

The global investment fund Ireo announced its plans to invest $500 million in real estate projects across the country. The project mix will include both residential and commercial developments. The $500 million fo-rms part of the $2 billion tranche of fund available with the Ireo.
“We already have invested close to $1.5 billion towards development of 13 real estate projects in the country,” said Anurag Bhargava, chairman Ireo. He added that the company is now exploring options in tier I and II cities. “Residential projects will remain our priority though we are open to developing commercial projects like the SEZs,” Bhargawa explained.
The company has already completed three million square feet of residential development and has further plans to develop around eight million square feet residential and commercial pro-jects over the next one year.
At present, the company owns 3000-acre at Pune, Gurgaon, Mohali, Ludhinana, Ghaziabad, Noida, Chennai, Coimbatore, Goa and Jalandhar wherein it is developing thirteen realty projects that include development of IT-SEZ at Pune. The construction work of the IT-SEZ at Pune is expected to be complete by next year.
“Though the SEZs do not find favour with other developers in the changed economic environment, yet we feel that with right location and scale they still can be good business propositions,” quipped Bhargawa.
The company is also exploring options in the education and hospitality sectors. “The projects in these categories will largely be in and around the areas where we already are executing projects, as we have a fair amount of understanding of the market, he said.
The investor base of Ireo consists of several financial institutions such as JP Morgan Chase, TPG-Axon, Citadel Investment Group and sovereign wealth funds.

Source : http://www.mydigitalfc.com/companies/ireo-invest-500m-indian-realty-875

Delhi, Mumbai command 50% of top residential markets

The rest of India almost doesn’t matter – at least when it comes to realty. Think property and you think capital Delhi and financial capital Mumbai. Land as investment

These two metros, along with their suburbs, comprise the largest pie of real estate in the country. No surprise that they are undoubtedly the most sought after destinations for an investor looking at attractive residential locations.

And not without reason. These markets are significant from the perspective of sheer administrative strength and as centres of business as well as growth. And numbers bear out this fact as well. According to Rajiv Sahni, partner, real estate practice, Ernst & Young, while in terms of office space absorption, NCR comes second after Bangalore, it commands nearly 35% share of the top 8-10 residential markets in India. Mumbai comes second, with a 15% share of residential market.

So which are the best places to invest in Delhi and Mumbai? Aditi Vijayakar, executive director, residential services India, Cushman & Wakefield, advises that investments should usually be targeted towards destinations that have a stronger prospect of appreciating in the future, offer leasing potential and have the inherent strength to sustain demand.

“Locations such as central Mumbai (Parel, Mahalaxmi), Bandra (West & East), Kalina and JVLR in Mumbai and NOIDA-Greater NOIDA expressway, Indirapuram, Golf Course extension road, in Delhi offer such opportunities. They are ideally located from the perspective of accessibility and have growing commercial hubs in the vicinity. These are emerging as strong changing markets.”

Aditi adds that as far as return on investment is concerned, these will vary depending on projects, acquisition cost, leasing potential, supply pressure, promoter’s brand equity and maintenance quality. “Average returns from rental may vary from 4% to 6% and capital values may appreciate at the rate of 8% to 10% per annum. Returns are dependent on the capital and rental value cycle and currently both values have dipped given the economic environment.”

What also makes these cities attractive for owning a residential space is the fact that they are buzzing with economic activity. According to Anshuman Magazine, CMD, CB Richard Ellis, a lot of improvement has taken place in these cities in terms of business opportunities and infrastructure which makes them extremely viable destinations.

Developers also agree that Gurgaon and Indirapuram are attractive markets in Delhi NCR whereas it is Navi Mumbai, Vasai, Virar, and Kandivali in Mumbai which will see increased development.

Says Harinder Dhillon, GM, Marketing, Raheja Developers, “These two markets make up at least 30% of the entire market. Gurgaon is lucrative due to the upcoming developments in accordance with the new Gurgaon masterplan. The Indirapuram area and beyond will remain in demand because of the revised floor area ratio (FAR) and population density norms. In Delhi, the areas under new master plan which will open up under the new R zone such as Chattarpur, Nangloi, Alipur, Najafgarh blocks will see heightened activity. In Mumbai, it is Navi Mumbai, Vasai, Virar, Kandivali which are likely to witness hectic transactions in the near future.”

Agrees Vijay Jindal, CMD, SVP Group who says that some of the best places to invest are in Delhi NCR and the new developments in Mumbai. Land as investment

“If one is looking at the futuristic development of the place, then places in Ghaziabad are NH24 and NH58, and if you move further then Faridabad is also coming up well. Some of these places might look deserted but think of places like Dwarka some 10 years back. It is now in demand primarily because of infrastructural developments. In the financial capital, locations such as Navi Mumbai and Thane are attractive,” he says.

Some are of the view that the genesis of Delhi and Mumbai is different altogether as one is a political centre and the other a business hub. Brijesh Bhanote, senior V-P, sales and marketing of The 3C Company, a Delhi-based real estate firm feels that as the cost of construction and land prices in Delhi are relatively lower than Mumbai, hence return on investment could be better in the capital.

A few things should, however, be kept in mind while seeing the investment potential of a given location. Various aspects such as infrastructural developments, connectivity, power, roads etc should be considered so that one can get maximum returns of the investment.

“Neighbourhoods with a strong employment base, proximity to educational, health and shopping centres, ideal external connectivity through mass transportation system, closeness to golf course and natural garden are essential features of a property having appreciation potential. If such a property is backed by a developer having reputation for high quality construction, it is destined to give handsome return on a medium to long term basis,” says Rajeev Rai, vice-president, corporate, Assotech.

With developers coming up with many projects in and around new developments in Delhi NCR and Mumbai, you can expect a lot of supply in these cities in the near future. But do study the pricing basics and micro examine the investment potential of a given location in these two real estate markets. Make a good choice and be sure of a profitable bargain.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Property/Delhi-Mumbai-command-50-of-top-residential-markets/articleshow/4739137.cms?curpg=2

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

Unitech launches Uni-Homes in Sector-117,Noida

Unitech Uni-Homes Project
Unitech Group Soon Launching New Affordable Residential Housing Project Uni-Homes Sector 117 FNG Express Highway Noida. Apartments ranging 2BHK around 23 Lacs, 3BHK around 31 Lacs Rs pre register your self not to miss life time opportunity. Unitech Uni-Homes is beautiful well planned Housing Township in Delhi NCR and is spread over 25 acres of land. Uni-Homes are luxury Affordable Residential Housing Apartments with all Modern Amenities.
Location of Unitech Uni-Homes Sector – 117 FNG Expressway Noida, Well connected to Delhi, 10 Minutes drive to nearest Metro Station in Sector 32, 2 Minutes drive from FNG Express Highway, 12-15 Minutes drive from Atta Market Sec 18 Noida, 7-10 Minutes drive to Fortis Hospital, 35 Km from Indira Gandhi International Airport, 10 Minutes drive from Shipra Mall Common Amenities of Unitech Uni-Homes Shopping Arcade, Temple, Schools, Medical facility, ATM, Banks, Transport to City Centre, Landscaped Green Area, Children play area, Ample Parking Area, Community Hall, Party Hall, Clubhouse, Solar Water Heating, Water Treatment Plant, Power Back-up for Utilities, Round the Clock Security, Fire fighting system, Gymnesium, Swimming Pool, Tennis Courts
Types———–Size————Price
1BR-1T————580————2146000
2BR-2T————776————2871200
3BR-2T————951————3518700
3BR-2T————990————3663000
Booking Amount of Unitech Uni-Homes
Rs 2 – 3 Lacs
About Developer
Unitech Group is one of the major township planning and real estate development companies in India. Unitech entered civil engineering in 1974 with its sights firmly set on the future. It has an impressive mélange of heavy construction, leisure and entertainment projects, hospitality business and development of mini cities/townships construction of residential and commercial complexes, including shopping malls and various types of dwelling units. Unitech commands strong brand equity as also a pan India presence with focus on residential development – the most profitable real estate segment.
Loans & Property Curry

116-B, Shahpur Jat,
Khelgaon Marg, Delhi-110049,

Source : http://www.pressreleasepoint.com/unitech-launches-unihomes-sector117noida-9999432002-9873333348

NRI Community Comes in Support of the Realty Sector

Notwithstanding the impact of slowdown on realty sector and even after demand for flats up to Rs 30 lakh and 40 lakh and above really hit a new low, thre are still ready buyers for independent houses. These hardy customers don’t take much time to grab an independent house in any good locality and location. These deep-pocketed guys always look for such properties.

According to realty experts, though not many such properties come up for sale, but once they do come up, there are several buyers staking claim over them. And if the house is free from all kinds of disputes and the title is also clear, a seller need not worry he has to wait very long to meet a customer for his house, says Titu Sethi, a South Delhi-based realtor , who has played a key role in sealing many deals involving bungalows and kothies.

Who buy independent houses after paying such huge sums? And another relevant question — whether the new buyer uses the property for his own use? Apparently, the profile of such buyers is mixed.

They may be NRIs, builders, or it is also possible that two or more brothers buy one house in order to live together with their families. While the concept of joint families is disintegrating and disappearing faster from the urban landscape, this fact lends hope that all is not lost for the concept of joint families and there are still many brothers who prefer to live under one roof.

Realtor Pramod Chopra of East Delhi says that he has seen, at least in some cases, where brothers buy one house and then start living on separate floors of the house. Businessman Rajat Dhawan and his elder brother did the same thing. Says Dhawan, “When we sold our family house at Nizamuddin West, we were asked by many friends and relatives if we were separating. We said, no! After selling our house, we purchased a 500 sq feet plot in DLF. Both my brother and myself built a house there and started living with our families.”

Coming back to the brood of happy buyers of big bungalows and kothies, realtors say that small-time builders also don’t miss an opportunity to buy houses in posh areas. Eventually , they convert such properties into flats and floors and then sell them off.

It has been happening in Delhi for many years now. Even in bad times, so far as realty sector is concerned, the large NRI community is also buying independent houses in Delhi and in NCR towns.

A Noida-based realtor says that after attack on Indians in both Kenya and Uganda, some Indian families purchased big kothies in Noida . It may be recalled that the family of a wellknown known Sikh businessman of Uganda, Gurdayal Singh Dhillon, too purchased a big house in Noida and a part of his family settled down there. Dhillon also remained the High Commissioner of his country in the country of his forefathers as recently as a few years ago.

But not all NRIs are buying houses because they are being persecuted in their adopted countries. Thailand-based NRI Surinder S Chawla says the reason his family purchased an independent house in Delhi, in New Rajinder Nagar , was that he and his other family members visit India very often in relation to their business interests as well as for meeting relatives here. And they thought it a better idea to have a house here than spending a bomb on hotels.

As far as NRIs are concerned, they too are buying flats and floors in Delhi and the NCR, even though builders are feeling the pinch in selling their flats. Sunil Jindal, CEO of SVP groups, says that NRIs from the UK, the US, and Canada have played a stellar role in lifting the spirits of realty sector. They are buying up flats, plots, floors and independent houses.

A random survey of New Rajinder Nagar, Jor Bagh, Multan Nagar, Greater Kaliash-II and Har Gobind Enclave reveals that around 12 independent houses were sold in these areas during the last six months. They costed between Rs 4 crore and a mind-boggling Rs 40 crore.

Experts say that for those who have ready cash, this is an ideal time to strike gold. Currently , the property prices are hovering quite low – reason enough for some smart people to grab any possible opportunity in purchasing the a property free from all kind of disputes.

Source : http://www.indianrealtynews.com/real-estate-india/nri-community-raises-the-spirits-of-realty-sector.html

Jaiprakash sees affordable housing drive realty growth

MUMBAI: The real estate arm of Indian construction and engineering firm Jaiprakash Associates, expects its recent move to affordable housing to  drive volumes and help sustain high growth this fiscal.

Jaypee Greens expects to grow revenue more than 50 percent in 2009/10, helped by a spate of residential projects offering apartments around 3 million rupees, a senior official said.

It recently saw strong response to its first offering in this segment, selling nearly 2700 apartments at Noida near New Delhi.

“We have seen the opportunity. We will come out with more such products as they appeal to more people,” Rita Dixit, director at the group’s realty business told reporters.

Jaypee joins a slew of Indian developers building lower sized, cheaper-priced apartments in a bid to revive demand amidst a market downturn that has sharply hit their cashflow.

Others jumping into this segment of the market include DLF, Unitech and Parsvnath.

The real estate division contributes only about 7 per cent to Jaiprakash’s revenue, but grew 66 per cent in 2008/09.

“We hope to do more volumes this year, mainly in this segment. Higher volumes will also take care of margins,” Dixit said, adding margins were a little less than 30 per cent in the affordable housing segment.

It also plans to come up with several commercial, retail and hotel projects along its expressway projects in northern India.

Last year, Jaiprakash won rights to build two large expressways originating from Noida — the 1,047 kms long Ganga Expressway to eastern Uttar Pradesh, and the 165 kms Yamuna Expressway across western UP.

“Our business model is dependent on the expansion along the expressway. So, we are concentrating only in north India at the moment,” Dixit said.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Jaiprakash-sees-affordable-housing-drive-realty-growth/articleshow/4590008.cms

Luxury housing – down but not out

Flip through the pages of any newspaper today and there will be umpteen advertisements of low-cost housing projects vying for your attention. What is more, there are even reports of some realty majors tweaking their high-end projects into townships or ‘budget’ homes. It goes without saying that faced with liquidity crunch, affordable housing is currently in for realty majors. But does that imply that luxury housing, which once fuelled the realty boom in this part of the world, is out — once and for all?

While this may seem to be the case at a superficial glance, industry observers think otherwise. “The days of luxury housing projects aren’t over. Both these segments of the market, in fact, have their own demand and what varies across the segments is the quantum of demand. These two categories cater to different income segments and customer profiles, and hence, are not a substitute for each other,” says Mona Chhabra, associate director, real estate practice, Ernst & Young.

Neeraj Bansal, associate director of KPMG, explains, “The luxury segment was primarily targeted for the elite, the corporate honcho, high net worth individuals (HNWIs) and non-resident Indians (NRIs). The fact is HNWIs and NRIs are still being pushed and lured with fancy freebies. Exotic location along with the minimalist and international look still continue to attract interest.”
It is only that luxury housing — for obvious reasons — is currently not as much in demand as it was earlier. No wonder, with this segment not picking up much in the past few months, developers have shifted the spotlight to ‘affordable housing’ — to push up volumes, more than anything. With the target audience being the enduser and not investors and the price bracket reducing by as much as 20-30%, ‘affordable housing’ is fast gaining acceptance amongst the large and medium-sized developers.

Bansal says, “With the changing business climate, the once ‘in-demand’ luxury apartments — centrally air conditioned, equipped with splash pools, terrace gardens, Jacuzzis, and state-ofthe-art building automation systems — are failing to attract as many buyers as they did 18 months ago.” Developers are, therefore, finding it difficult to push the highend apartments, villas and stand-alone bungalows, with enquiries dropping by over 40-50%. The past few months have, thus, seen a paradigm shift in the customers’ attitude, who now prefer the ‘basic’ rather than the ‘luxury’.

What is more, while the demand from domestic buyers has dried up, even non-resident Indians (NRIs), who constituted a significant market for luxury real estate developers, are now rethinking and re-evaluating their plans. With the US real estate market gone through a correction, NRIs expect it to be reflected in Indian real estate market as well and hence are deferring/delaying buying decisions. The sentiment has been further dented with poor investment climate, low liquidity/salability concerns, expectation of fall in property prices, liquidity crunch of developers causing delays in project delivery, uncertainty in timing and rate of return on investment, fuelling a crisis of confidence and consequently low deal flow.

The drubbing in the luxury-housing segment is also being attributed to excess supply and speculative demand. “Initially, there was pent-up demand for this segment. However, as prices began rising rapidly, speculative demand built up. This led to an increasing number of me-too products being launched. Hence, it has been in a way a classical case of super-normal profits leading to more players entering the segment leading to excess supply to be followed by a consolidation phase,” says Chhabra.
The good news, however, is that luxury and super luxury housing segments have already started showing signs of revival in some parts of the world. For instance, agency reports suggest luxury real estate sales continue to remain exceptionally strong in Punta del Este, the renowned South American getaway, despite global crisis. Similarly, Hong Kong too has witnessed a 2.1% increase in the luxury housing prices in the first quarter of 2009 as compared with that of 2008, rising from HK$8,773 per sq ft earlier to HK$8,958 per sq ft at present.
In India, too, lots of luxury projects are still on or are being planned. For example, Gurgaon-based MVL Ltd plans to develop MVL Golf Links, a luxury home-cum-spa and golf resort of international standards, which will be launched in two phases. Similarly, the Supertech group is developing ‘34 Pavilion’, comprising 3 & 4 bedroom luxury condominiums, in Noida, priced at Rs 1.15 crore onwards. Besides, Lodha Luxuria and Casa Essenza by the Lodha group are also among the various luxury projects slated to come up in the near future.
It would, thus, be wrong to say that the future of luxury housing in India looks bleak. According to the Confederation of Real Estate Developers Association of India, the premium residential segment would pick up once customer confidence returns and that could happen in the next six months. Some property experts are also of the view that most of the luxury home buyers are currently sitting on the fence, in the hope of getting the ‘best bargain’ deal, and once they are able to get that, no one can stop them from lapping up the luxury projects again!

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Luxury-housing—down-but-not-out/articleshow/4584373.cms

Rentals decline for high-end apartments, mid-segment sees upswing

Is it a good time for those living in rented apartments? Your location could well be the answer to that. While some pockets in the country are  showing an upswing in rentals, other micro-markets are witnessing a reverse downward movement. Leading real estate consultants say that the residential rental market has been moving in tandem with the demand-supply dynamics of a particular area, rather than the property prices.

Pankaj Jain, executive director of Realistic Realtors, a North-Indian real estate consulting firm says while rentals in some areas have come down, certain pockets are showing an upswing due to the limited supply. “In the national capital region for instance, lack of supply has led to an increase in rentals in some areas.

These include east Delhi, south Delhi and the university campus areas in north Delhi. However other areas in NCR such as Noida, Greater Noida and Gurgaon, have seen the opposite trend.” Agrees Subhash Kumar, a resident of east Delhi whose rent just got higher last month. “I was paying Rs 9,000 per month till last month for a 2BHK apartment. The landlord has recently increased it to Rs 14,000. I tried negotiating but he did not reduce the rent.”

While the upswing in residential rentals have impacted the mid-segment across cities such as Delhi, Mumbai and Bangalore, the high-end segment has seen a downward correction in most of these markets across locations. According to Cushman & Wakefield (C&W), in Delhi NCR all micromarkets witnessed correction up to 4% over the last quarter.

In Mumbai too rental values for high-end apartments witnessed a downward movement across most micro markets in Q1 ‘09. Chennai, on the other hand, saw no movement during the quarter as genuine demand continued to exist. However, a new trend in the city saw clients wanting to consider mid-end options in prime locations such as RA Puram and Poes Garden.

In contrast to Chennai, Hyderabad witnessed significant quarterly correction between 10-23% in the high-end segment. Reduced hiring by IT/ITeS companies, speculation regarding lay-offs and tenants becoming more selective towards rental commitment led rentals in the top-end segment to further drop in January, with these remaining stable over the last two months.

Like Hyderabad, Bangalore too saw a correction in the range of 17-20% in the high-end segment largely due to declining leasing activity. South Bangalore, in fact, has been most affected in the high-end sectors, with rental depreciation of around 19%, due to the decreasing demand.

Jones Lang LaSalle Meghraj (JLLM), too, sees the top-end residential rental market in Delhi slowing down. Transactions are happening, but there are significant time lags between them and volumes have gone down. Expatriate movement is at an all-time low.

Landlords are not getting the kind of rentals they did during the peak phase, but there is no likelihood of a further fall. In Mumbai, according to the consultancy, the residential rental markets have shown a decline in overpriced and speculative areas and in most areas that have seen more supply than demand can absorb.

However, rentals have displayed a remarkable level of inflexibility in areas where there is no supply and demand is high. Kolkata has not shown  much of a decline and continues to look good. In fact, the residential rental market of Kolkata seems to have escaped the worst of the slowdown dynamics, according to JLLM.

Rajiv Sahni, partner, real estate practice, Ernst & Young agrees that while there has been a significant rental correction in the upper end of micro-markets that witnessed unprecedented growth in the last few years, there has been a strong resistance in markets that have healthy demand-supply dynamics and strong fundamentals. But are people more inclined towards renting now or to buy/sell options? Sanjay Dutt, CEO (business), JLLM says the demand for rental homes continues to be high in prime areas with little or no new supply, and in locations that have witnessed a more rational supply rate in the past.

“In areas that have witnessed oversupply, the accent is currently more on outright purchase. This is because investors who had bought units in such areas have, to a large extent, failed to respond to the new market dynamics by coming down sufficiently on their rental expectations. There is also an increasing trend among property owners to sell rather than rent out their properties, since there is still scope for correction in many areas.”

While some developers feel that people are opting more for rent at present due to the uncertainty in the job market, others are of the view that end users will derive more benefit if they buy their own flat rather than stay on rent.

Ajay Midha, director, SEZ & commercials, Raheja Developers feels that a lot of people are opting more for rent owing to uncertain economic conditions and overall confused market sentiments. Rajeev Rai, V-P, corporate, Assotech, says rental property is currently being preferred by those who are not looking to stay in their city of residence for a longer duration.

“Those who have the means and better jobs to back their decision of buying property are going ahead with their plans of buying it. As far as rents are concerned, while the high-end apartments have been affected, the rentals of low and medium-range apartments are moving ahead.” The current situation, many feel, has led landlords to bargain hard with existing tenants to revise the rent in line with the market scenario.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Property/Rentals-decline-for-high-end-apartments-mid-segment-sees-upswing/articleshow/4504468.cms?curpg=2

Luxury Homes a Nightmare as Realty Undergoes Worst Phase

When the rich get less rich, lavish lifestyles turn into a bad dream. Wide-ranging influences, from shock at sudden economic strains to the rise of simpler living, have shrunk blue-ribbon realty consumption. Million-dollar realty transactions, which used to be routine in big cities such as Mumbai and Delhi, have all but disappeared. Property brokerage firms point out that the once-tony suburbs of the Capital have been hit the hardest. “Million dollar transactions or deals worth Rs 5 crore are seeing a dip of around 50% in Noida and Gurgaon due to very limited supply,” says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm. But according to property brokers, swish locations such as Vasant Vihar, Shanti Niketan and Anand Niketan are still holding up due to the pent-up demand for independent floors. “Over the last two quarters million dollar transactions in these locations have seen a spurt of around 20%,” adds Jain.

He also points out that cash rich cities such as Chandigarh are seeing only a few such transactions in prime areas like Panchkula and Mohali. “The dynamics of the Chandigarh market are very different. The holding capacity of these areas is quite good. However, owing to the tight supply, only a few transactions are being witnessed in this value,” he mentions. Even Mumbai, which boasts some of the most costly addresses in the country, is not faring any better. Other than a slim demand in areas such as Cuffe Parade, Lower Parel, Bandra and Worli, million-dollar real estate transactions in the City of Dreams are now far and few. “The supply is always limited, with only a few choosing to go for this segment,” says Rajeev Talwar, executive director of DLF.

Agrees Niranjan Hiranandani, MD of Hiranandani Developers, who feels that the mid and lower rung segments are in the limelight now. “There are not too many such big ticket transactions happening in Mumbai as of now,” he reiterates. “It’s a high price zone and the market for that is limited in the current scenario.” And down South, demand for $1m houses is also rather low. Says Anshuman Magazine, CMD, CB Richard Ellis, South Asia: “Jubilee Hills and Banjara Hills in Hyderabad are seeing an overall decline in such transactions. Similar is the case with Chennai in areas such as Boat Club and Poes Garden.” According to Mr Magazine, it’s also the nervous sentiment that is persuading buyers to postpone their purchase. “Since a lot of the demand in Hyderabad comes from senior IT executives, they are holding back due to uncertainty in the job market,” he adds.

Also, in Chennai, for instance, many independent houses that would roughly cost Rs 5 cr and above are owned by people who have inherited either the land or the entire property. In Bangalore, demand for such luxury apartments is also low owing to the erosion of demand from the market. However, according to Cushman & Wakefield, Bangalore is more important than Chennai and Hyderabad in the South for investment or purchase of property tagged at million dollars due to stronger economic fundamentals. The trend in Kolkata too is no different. Brokers say the million transactions in the City of Joy are to the tune of 1-2% in areas like Ballygunge and Alipore with a buyer profile mainly consisting of businessmen. “Kolkata is no Delhi or Mumbai. The fastest selling price bracket in the city is in the range of Rs 25-40 lakh. Areas such as Alipore and Ballygunge are saturated now. Fresh development in these areas is impossible,” says Venugopal Sampath, Eastern India head of allCheckDeals.com, a realty brokerage firm.

So what all can a million dollars do for you? While it will offer an independent residence for you in posh locations in Chennai, Hyderabad and Bangalore, metros such as Mumbai and Delhi will mean living in upper class suburban locations if you don’t prefer build-up floors. As per C&W, while locations like Lower Parel, Mahalaxmi, Prabha Devi and even further north in areas such as Juhu and Bandra have the potential to offer residential units costing roughly $1mn. In NCR many ‘gated community’ projects in the peripheral locations of Gurgaon and Noida are available in this bracket. However in Chennai, residential units with a price tag of $1mn will help you snap up luxury residences such as free hold bungalows and high-end condominiums in sizes varying from 4,500 sq ft to 6,500 sq ft in locations such as R A Puram, East Coast Road and Poes Garden among others. In Bangalore, some new high-end residential projects would be available at this cost in areas such as Richmond Road, Lavalle Road and Sankey Road. These apartments would range from 3,700 sqft-6,000 sq ft, with 3-4 bedroom units. So now you know where to make the most out of your million dollars.

Source : http://feedproxy.google.com/~r/Indian-Realty-News/~3/Ey_JCou5_F4/luxury-homes-a-nightmare-as-realty-undergoes-worst-phase.html

Oversupply to reduce office rents further: Knight Frank

Oversupply is expected to keep the rental market for office space in metro cities under check over the next three to four quarters.

In the next two years, 183.1 million sq ft of A-grade office space is estimated to be added in seven big cities, while the demand will be around 122.4 mn sq ft, said a report prepared by Knight Frank India.

A forecast by this international real estate consultancy suggests that “in Mumbai, rentals will fall for some more months and bottom out in the second half of next year, while in the national capital region (NCR), rents may bottom out in the second half of the current financial year in most areas.” In both metros, the correction in rents would be between 40 to 60 per cent by the first half of next year of their peaks in 2007-08.

Knight Frank has developed a model to forecast rents for office space, taking into account data of the past 15 years. These include GDP, industrial investment projections, behaviour patterns of consumers, supply-demand scenario and so on.

Knight Frank proposes to refine this model along the way and test it for its accuracy. Pranay Vakil, chairman of Knight Frank India, said he hoped the attempt works; if so, it could help clients take more informed decisions.

Knight Frank is the first agency to develop such a forecasting for rents and the model is based on past data and economic growth projections and other market variables. It also assumes that medium to long-term consumers continue to behave in the manner they did in the past.

According to the forecasts, average rentals in Gurgaon are Rs 51 a sq ft and expected to fall to Rs 44 in the second half of the current fiscal and may remain around that for a year. Rents were at their peak at Rs. 120 in 2007-08. For Noida, rents have fallen from Rs 90 in 2007-08 to Rs 44 now and will further fall to Rs 34 in the first half of the next fiscal.

In Mumbai, average peak rentals in most office areas have fallen by 40-60 per cent and are expected to come down by another 5-10 per cent in the second half of the current fiscal.

Source : http://www.business-standard.com/india/news/oversupply-to-reduce-office-rents-further-knight-frank/357017/

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

Developers to launch green residential projects

The concept of green buildings has influenced real estate developers to the extent that a number of developers are planning green residential projects.

Among first to announce the green residential projects is the 3C Group, with two green residential projects in Noida this year at a cost of Rs 2,600 crore.

According to Vidur Bharadwaj, director, 3C Group, the first project includes an affordable luxury homes spread in 40 acres in Sector 100 of Noida, with an investment of 2,000 crore, project will be launched in July and will offer 500 flats. The second green residential project will be a 57 acre luxury development with a 9-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 of 1,000 yds to 3,500 yds area.

Puravankara aims pan-India presence
Puravankara Projects, the Bangalore-based realtor, is planning to develop projects across the country. The Group is looking at acquiring lands in other parts of the country for Provident Housing and Infrastructure, its mid-income housing subsidiary.
Ravi Ramu, director, Puravankara, announced, “We are looking at new regions and evaluating projects. We have learnt that valuation of the land is 30-40 per cent cheaper than last two years’ prices. Even the payment terms are better, which is making the deals feasible.”
The developer is all set to launch a project in Bangalore under the Provident brand, for which approvals have been obtained and the price will be in range of Rs 20 lakh.

Unitech gets into sub-Rs 10 lakh segment
Unitech Ltd, the country’s second largest developer, has planned to launch over 40 new projects, mostly in the housing sector in sub-Rs 10 lakh residential segment.
These projects will be spread across all the major cities and will be launched in next 12 months
The company has a debt of over Rs 8,400 crore in its book. “Regardless of massive challenge, we are ready to raise funds for projects. Also, the presales would meet project costs,” said a company official.

Market looks sanguine now: Pune builders
The Promoters and Builders Association Pune (PBAP) has expressed that due to improved interest among home buyers and the softer approach of banks and financial institutions towards financing projects, the realty market has started looking positive now. Satish Magar, the newly-elected president of PBAP said that the organisation’s members have seen bookings in new projects rise by at least 20 to 30 per cent since February. He said that the new projects are attracting more customers, which shows that even, demand exists at the right price and buyers are willing to purchase. “Prices have rationalised and interest rates have also gone down, which has also renewed the buyers’ interest,” he said.

Source : http://www.expressestates.in/full_story.php?content_id=93765

BPTP to develop build-to-suit corporate office for MNC

NEW DELHI: Real estate developer BPTP is in serious discussions with a third party to develop a build-to-suit corporate office for a leading  multi-national company (MNC) in the first phase of its Noida project. Spread over 3 lakh square feet, the nature of the building is expected to be a green rated one.

The developer, however, refused to divulge any further information about the MNC. “The discussions are still on. We will not be able to offer any more details on it right now,” said Sudhanshu Tripathi, director, BPTP.

Apart from this complex, the developer has plans to build an office space spread over 3 lakh sq ft for sale in the market. “This complex will be built by us and sold in the domestic market. The corporate office building will be leased to various insurance and telecom companies. The cost of construction for this complex will be roughly Rs 60 cr to Rs 80 cr,” Mr Tripathi added.

The developer had earlier announced plans of building a five-star hotel on the plot in the first phase. Besides the hotel and the office spaces, a high-end mall covering 1.5 lakh sq ft will also be coming up to meet the retail requirements of the hotel as well as the commercial complex.

The mall is expected to house top brands and a revenue sharing model will be operational here.

Both the office complexes in the first phase are expected to be completed by mid 2011 with a total cost of construction around Rs 700 cr. The second phase of the project is currently in advance stages of negotiation. The developer had retained 25% of the 95-acre commercial plot in Noida that it had won in a bid in 2007. It now owns 22 acres of the said land.

Source : http://economictimes.indiatimes.com/Economy/BPTP-to-develop-build-to-suit-corporate-office-for-MNC/articleshow/4419288.cms

BPTP is planning to build five-star hotel on Noida property

The plan is to build the hotel before the Commonwealth Games (in 2010) to make use of the tax benefits

New Delhi: Real estate developer BPTP Ltd plans to build a five-star hotel on the land it retained after surrendering a commercial plot in the New Delhi suburb of Noida to the New Okhla Industrial Development Authority, or Noida.

New project: A BPTP construction site in Faridabad, Haryana. Rajkumar / MintThe company is in talks with leading hotel chains for managing the property. The hotel will have 500 rooms and will be priced at “very competitive” rates, said a company official, who didn’t want to be named.
“The plan is to build the hotel before the Commonwealth Games (in 2010) to make use of the tax benefits,” the official said. The deal is expected to be sewn up in two-three weeks.
While the official declined to name any hotel chain, an analyst at a brokerage firm said the company is believed to be in talks with chains such as Marriott International Inc., Radisson Hotels and Resorts, and Intercontinental Hotels and Resorts. The analyst didn’t want to be named.

In March 2007, BPTP won a bid for a 95-acre commercial plot in Sector 94 of Noida, beating rivals including DLF Ltd and Omaxe Ltd. In February this year, because of a financial crunch, the company surrendered the land to Noida, retaining the portion it had already paid for.

BPTP, which had paid about Rs1,300 crore, applied to Noida for retaining about 25% of the land.

BPTP now owns 21.7 acres of land. In the first phase, the company plans to develop 6 acres, which will include the hotel.
“We will invest around Rs600 crore in the first phase of the project,” the company official said. He did not say how the company planned to raise funds for the project.

Source  : http://www.livemint.com/2009/04/13211046/BPTP-is-planning-to-build-five.html

Realty rates will fall by 35% over 3 years: Report

Real estate prices are set to fall the same way they went up over the past few years.

Residential property prices have already corrected by over 25 per cent in the last eight months but have failed to enthuse buyers. This will pull prices down further.

Property prices in key Indian cities will decline by another 35 per cent in the next three years, a report by brokerage firm Edelweiss Capital noted. “Property prices increased sharply over the past six to seven years, rising 3.4 times in normal term (quoted price) and 2.5 times in real term (transaction price) over 2001 prices. We expect a price correction of 48 per cent in normal term and 58 per cent in real term,” the report said.

“Appetite for real estate has diminished significantly with foreign investors; developers are highly leveraged and their inability to serve the debt obligation raises a threat,” it said.

“Prices have fallen 25-30 per cent and have bottomed out in most places,” said Anuj Puri, chairman, Jones Lang LaSalle Meghraj. “Over the next 12 months, expect another 10-15 per cent drop in markets where there’s excess supply and where prices are too high.”

“Prices have corrected by 10-25 per cent,” said Aditi Vijayakar, executive director (residential services), Cushman & Wakefield India. “In high-end properties, it would correct by another 5 per cent and by 5-10 per cent in suburban markets over the next 12 months.”

Property brokers are feeling pessimistic. Gurgaon has seen a drop of 25 per cent in prices of ready-to-move properties and brokers say there’s no demand for under-construction properties either. It’s no better in Delhi, Noida and Faridabad.

Source : http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=Cricket&id=5319baf0-89d2-4f94-825f-b9a414552c78&Headline=Property+rates+going+south%2c+slowly

DLF says west Delhi apartment project on despite lower demand

The realty firm’s Shivaji Marg project will have around 500 flats priced between Rs78 lakh and Rs99 lakh

New Delhi: Undeterred by a slowdown in demand for homes in urban India, DLF Ltd, India’s largest developer by market value, is likely to launch a residential project by the end of March on one of the country’s most expensive patches of land in west Delhi.

The pricing of the apartments on Shivaji Marg is likely to be set between Rs6,500 and Rs7,000 a sq. ft translating into purchase prices of flats to just under Rs1 crore.

Upbeat: The DLF corporate headquarters in New Delhi. DLF plans to erect an integrated township. Ramesh Pathania / MintDLF Shivaji Marg project will be a ground plus 18-floor structure consisting of at least 500 flats of two- and three-bedroom apartments. The size of the apartments will vary between 1,200 sq. ft and 1,525 sq. ft, which means the flats will be priced between Rs78 lakh and Rs99 lakh. For the locality the project is in, the prices are considered competitive.
In August 2007, DLF had acquired 38 acres of land from DCM Shriram Consolidated Ltd, or DSCL, and the Lohia family of Indorama Group of firms for Rs1,675 crore, in what was then seen as the most expensive land deal in India surpassing second-ranked realty rival Unitech Ltd’s acquisition of 300 acres of land in Noida for Rs1,582 crore.

BPTP Ltd’s acquisition of 95 acres of commercial land in Noida, a satellite town east of capital New Delhi, for Rs5,000 crore followed in March 2008, ranking the most valuable land deal in India.
The purchase of the Shivaji Marg property was also the first major land deal at DLF after its initial public offering in June 2007. DSCL and the Lohias had a 50:50 right on the property, better known as Swatantra Bharat Mills and DCM Silk Mills.

DLF plans to erect an integrated township on the land including 3 million sq. ft. of office space, 2 million sq. ft. of retail space, and around 5 million sq. ft. of residential units. Earlier, DLF had planned to develop high-end residential units in the township but with demand for luxury homes contracting, DLF now plans to develop mid-income homes.

In February, DLF reduced prices of some of its residential projects in Bangalore, Hyderabad and Chennai due to slowing demand for apartments. The price cut was between 10% and 25% in these cities.
DLF has initiated market research to determine the price of the apartments. “We have let our brokers research the market,” Rajiv Talwar, group executive director of DLF, said. “The idea is to leave plenty on the table for buyers…brokers are in the market to find out at what price point people will invest in the heart of the city.”
The company is trying to position the Shivaji Park development as a mid-income housing project. “We want to build typical middle-class housing for people who use the Metro for conveyance,” Talwar said.
The final price will eventually depend on the response from the market, Talwar clarified. “Although, the project is equidistant from the Commonwealth Games Village, we are willing to launch it at half the price of flats in the Games Village,” he said.

Apartments in the Games Village, being developed by realty firm Emaar MGF Land Ltd, are priced at at least Rs12,000 per sq. ft.
An analyst said the new DLF apartments were competitively priced but sales may be slow in taking off. “The only drawback is that people will still have to be comfortable with the fact that it is not a ready apartment…so while the project will get people interested in it, the interest may not translate into actual sales,” said an analyst with a brokerage firm, who asked he and his employer not be identified.
The business community is more likely to be interested in such a project rather than the salaried class, he added.

Source : http://www.livemint.com/2009/03/25230715/DLF-says-west-Delhi-apartment.html

IVRCL’s four new projects seen bringing Rs 300 crore

Hyderabad: IVRCL Infrastructures and Projects expects 4 of its projects to start contributing to revenues from next fiscal.

While the exact timelines of the cash flows are yet to be set, the build-operate-transfer (BOT) projects are almost complete and revenues are certain to flow in from 2009-10, E Sudhir Reddy, chairman and managing director of the Hyderabad-based company, told DNA Money. Together, the four projects are expected to provide cash flows of about Rs 80 lakh to Rs 1 crore per day, adding over Rs 300 crore to the annual topline, he said.

The biggest of these is the Chennai Water Desalination project, designed to pump desalinated water to the metro. The project, which can pump as much as 100 million litres of water per day, is complete and going through a trials phase.

“We are expecting Rs 48 lakh from this project per day. The margins in this would be about 18-20%,” Reddy said, adding, the project would be operational commercially in the first quarter of the next financial year.

Similarly, the company is working on three BOT roads, including two stretches on Salem-Coimbatore road and one on Amritsar-Jalandhar road. The company would collect tolls on the three roads.

“We are able to give out the exact revenue-flow numbers for the water project since we know the output and the price at which it would be pumped out. For the road projects, we are purely going by the traffic numbers that are available and unless we actually see that traffic using the roads, we can’t specify the revenues,” said Reddy.

The company has so far invested Rs 1,600 crore on these four projects, including Rs 550 crore on the desalination project. The company is focused on water projects, which account for about 65% of its Rs 14,300 crore order book today.

“We will not focus much on roads anymore,” Reddy said.

Meanwhile, IVR Prime, a group entity, has taken a hit from the slowdown in the realty market. The company has a land bank of 3,200 acres in various locations including Hyderabad, Bangalore, Nagpur, Pune and Noida, which was to be used for developing low-cost housing. However, with the market not in favour of real estate play right now, it has decided to sit tight.
“We will keep the land with us. We are not in a hurry to do something though it is not viable,” Reddy said.

Source : http://www.dnaindia.com/report.asp?newsid=1236678

Builders hike rates but delivery stalled

Here’s another manifestation of the slowdown in the real estate sector – peripheral cities of Delhi- NCR are dotted with delayed projects with buyers continuing to wait for possession, in some cases by up to two years. However, that has not deterred developers from increasing the selling rates of these properties.

Most of these delayed projects were launched between 2005 and 2007. For instance, Uppal Chaddha Group launched the Hi- Tech City in Ghaziabad in 2006. Plots were sold at the pre- launch stage at Rs 7,000- 8,500 per sq yd. A senior official of the company said the project would now be officially launched in June this year at Rs 15,000 per sq yd per.

Then, there is Triveni Heights, launched by Triveni Infrastructure Development Ltd at the National Highway 24, Ghaziabad, which has been delayed by almost two years. The project was launched at Rs 1,800 per sq ft. However, apartments are now being sold at Rs 1,850 per sq ft in the resale market. Here too, the company has increased the rates to Rs 2,200. It plans to hand over possession in 2009.

Pointed out Ved Prakash of Atharvaa Properties, “Jaypuria, Niho Scottish and Crescent Park are the projects at Indirapuram that have been delayed by 12 to 18 months. The rate of these projects has been revised by 20 per cent to 30 per cent since the time of launch.” Greater Noida, where the realty market collapsed steeply, is home to some famous projects.

Unitech’s Verve, Habitat and Cascades projects located here are not yet ready for possession.

The rates too have been hiked since launch. “Luxury project Unitech Grande on the Noida- Greater Noida Express- way has multiple price points floating in the market. When the property is not ready and the company faces financial problems, investors move away from the project. The Grande could be delayed,” said Rajiv Mehrotra of Sunshine Properties.

Unitech’s spokesperson however, was not available for comment.

Gurgaon’s over- supplied Sohna Road has also been hit hard by the downturn. Orchid Petal, a project located in this area, has been delayed by more than a year. Some other luxury projects too, on this road are likely to be delayed. “Market has limited buyers of luxury housing in Gurgaon. The second phase of some big projects in Gurgaon would be delayed because of the slow construction work,” said Naresh Gaur of MNC Propmart.

In neighbouring Faridabad, over the past two to three years, developers in the Nahar Par area sold properties promising better infrastructure and amenities.

Projects such as Ferrous City by Ferrous Infrastructure and Developers, Triveni Signature by Triveni Infrastructure Development Ltd and Pal Gardens from Pal Infrastructure and Development Ltd in Sector 89 have been delayed. Sector 78 too, is home to delayed projects from Triveni and Pal Group.

Developers have now begun offering properties at Rs 1,800- 2,100 per sq ft. Two years back, these were available in the range of Rs 1,300- 1,500 per sq ft.

Commenting on the delays, a Delhi- based realtor said, “During the pre- boom period, most developers booked properties at a pre- launch stage. While big developers were invested in several projects, small ones were unable to complete the projects due to lack of funds. Small developers were also unable to sell in the initial stages of the project. This led to further delays.”

Source : http://indiatoday.digitaltoday.in/index.php?option=com_content&task=view&id=29227&sectionid=4&issueid=93&Itemid=1

Developer surrenders commercial land in Noida

Lucknow In another setback to the state’s industrial development, developer BPTP Ltd has made a request to surrender its commercial land in Noida.

Earlier, the Greater Noida Authority had invited tenders for the government’s sports city, but no one had showed interest in the scheme. Costing over Rs 5,000 crore, the BPTP deal was one of the biggest in India, in which the company had bagged 95 acres of commercial land in Noida’s Sector 94. “Following the UP government’s policy, the BPTP has made an application to the Noida Authority for surrendering the plot and is awaiting its decision,” said a statement issued by the company’s director, Sudhanshu Tripathi.

Corporate Communication officer AC Michael confirmed that the company, as per government rules, had paid 25 per cent of the total cost of the land, which came to Rs 1,300 crore.

But unable to pay the rest, it has requested the Authority to deduct 10 per cent of Rs 1,300 crore as penalty and give land worth the balance.

In view of the market slump, especially in real estate, the Confederation of Real Estate Developers Association of India (CREDAI) had given representations to the Centre and the state governments, demanding relaxation in policies.

According to sources in the industry, CREDAI gave one such representation to the UP government as well, requesting relaxation especially for real

estate developers, who had interest in Lucknow, Noida, Greater Noida and Ghaziabad. The organisation had

observed that the companies were facing difficulty in paying instalments and other dues.

Accepting the representation, the state government had framed a policy, giving a breather to developers. They were given a choice to either get their payment plan rescheduled or to purchase a smaller chunk of land for the 25 per cent money paid, after a deduction of 10 per cent as penalty.

In its board meeting held last month, the Noida Authority had adopted the policy.

Although no government official was available to comment on the development, sources confirmed that a high-level meeting of Noida and Greater Noida Authorities is scheduled for Friday, in which a decision is expected.

Source : http://www.expressindia.com/latest-news/developer-surrenders-commercial-land-in-noida/419422/

10,000 homes announced by Ansal Properties focused on afforable housing

An Indian real estate developer has announced plans to invest Rs 500 crore in building new homes in two regions.Ansal Properties said it was starting the new housing in Uttar Pradesh and Rajastan over the next 18 months.

A massive 10,000 affordable homes would result from the drive, the company said, with land and approvals already in place.According to Live Mint , executives from the company also revealed existing real estate schemes were also selling well, with 2,000 other homes in the two states changing hands since November.

Pranav Ansal, vice-chairman, of the firm, said, “We plan to develop and sell 10,000 affordable houses in one-and-half years.”

Quoted by Sify, he added: “There is a strong demand for affordable housing projects, as banks have announced attractive rates for loans up to Rs 5 lakh and up to Rs 20 lakh.”

Ansal is already building several other real estate schemes such as ‘Whispering Meadows’ in Mumbai, pictured, featuring earthquake-resistant technology and landscaped parks and playgrounds.

New real estate projects in India are increasingly focussing on affordable and mid-range homes, although Jaiprakash Associates recently reported strong attention for the upmarket ‘Wish Town Klassic’, at Jaypee Greens, Noida.

Source : http://www.offplanpropertyexchange.com/news/2009/02/10000-homes-announced-ansal-properties-focused-afforable-housing/704

Price rise options open for realtors

Hit by vanishing sales, developers may be cutting property prices – but they are leaving a window open to hike the rates later.

Despite guaranteeing ‘ escalation- free’ prices, most developers are working in a weasel clause which gives them the right to hike prices at any point till the final installment is paid and the property actually handed over.

Buyers are often forced to pay an increased amount before the receiving possession of the property. The escape clause is worded more or less similarly in all purchase agreements, and is usually tucked away in the fine print towards the end of the contract.

Mail Today has copies of the agreement forms issued by several builders like BPTP, KLJ and Jaypee. The clause states that the basic sale value is ” subject to revision/ withdrawal, without notice at the sole discretion of the company, if there is an increase in the prices of raw materials like steel, cement etc or any other cost or any other charges etc.” This effectively gives the builder to increase the price at any time, using any pretext like a rise in input costs etc.

However, the real aim is to be free to charge more in case the market recovers and prices start moving up again.

BPTP and KLJ are developing residential projects, Parklands and KLJ Greens, respectively in Faridabad while Jaypee Group is coming up with its massive integrated township Jaypee Greens in Noida.

In all agreements, this clause is loaded in favour of the developer.

The clause also says the company’s decision is “final, conclusive and binding on the intending allottee(s).” There is no mention of how input prices are calculated, and which particular price shall be used for purposes of calculating the socalled escalation.

Amit Raj Jain, vice- president marketing- BPTP Limited, tried to play down the significance, saying that it was just legalese. “This kind of clause in the application is just mentioned and is not enforceable under any circumstances. It never actually happens. But in general if a developer raises the basic sale price, it is increased by two to three per cent stating various reasons like escalation in the input costs.” But builders are using it to hike prices post- sale. One such escalation has been observed in Wembley Estate, a premium residential project located Guragon- Sohna Road in the Rosewood City being developed by Eros Group. The company has sent letters to allottees demanding more money saying that there is an increase in the input cost.

An allottee of Wembley Estate who received such a letter from Eros Group said, “The project has been delayed by eight to nine months. The company was supposed to hand over the possession by March 2008. But then, the company issued a letter asking to pay more.” Commenting on the plight of such applicants, a Noidabased realtor said, “Actual users are not in a position to fight legal case with the developer, as they fear of losing the money spent on the property till date. Developer on the other hand escalates his prices when the project is in the final phase of completion. By this time, the project’s reputation in the market improves. The project sells because the structure is ready and can be seen.”

Source : http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=9910&sectionid=4&issueid=48&Itemid=1

Secondary real estate market offers a good bargain

With most developers trying to revive the sagging realty market by offering discounts and affordable housing, its the best time to go for your dream  home. But it’s not just the primary market that can fetch you great deals. In fact, the secondary real estate market too can offer you a good bargain. A correction of 15-20% or even higher has taken place in the secondary market, according to experts. But don’t rush in. Make sure that a thorough check has been done before the property gets transferred in your name.

GET THE PAST CLEAR

While buying from this market may be profitable right now, there are certain aspects that one must be wary of. Raminder Grover, CEO (Homebay Residential) of Jones Lang LaSalle Meghraj (JLLM), highlights some significant pointers that need to be kept in mind. He says that firstly one must understand that since it is a secondary market, one is talking of older structures which usually bring with them inherent problems in terms of maintenance, overall stability etc.

Obtaining a home loan may be a problem if the building is too old as many banks do not grant home loans for units older than 15 years, while certain financial institutions grant mortgage loans of only 50% of the property value. Secondly, he warns against encumbrances on the property in the form of services or utilities dues, via a mortgage or personal loan, and other financial liabilities as not everyone will disclose such faults.

The legal status of the property may have also been compromised. The title may not be clean and adequate. It thus becomes necessary to check the legalities involved. Lastly, there is a complete lack of accountability for flaws detected at a later stage. One, undoubtedly, has to be more vigilant when buying from the secondary market.

WHERE TO BUY

So how lucrative is it to buy from the secondary market in the present context? Are there any lucrative deals that have been driving the sales in this market? JLLM offers a citywise snapshot. According to JLLM, in Mumbai the secondary market is buoyant in Bandra, Khar, Santacruz and Andheri and there are some good bargains available currently. In Bangalore, the secondary market does not presently offer much to a window-shopping buyer — investors dealing in the secondary market only deliver good offers on the negotiation table to those who actually show a firm commitment to buy.

In Delhi NCR, Gurgaon, Indirapuram and Noida are rife with secondary market opportunities, while developers in South Delhi are making some good offers on building floors. In Kolkata, there are resale homes available throughout the city. However, there is now a rather significant secondary market in Rajarhat and along the Eastern Metropolitan bypass. These previously promising areas were driven by investors, who had blocked numerable apartments over the past two to three years and are now looking to offload them.

Rajiv Sahni, partner, real estate and infrastructure, Ernst & Young India, feels the secondary market may offer a better rate in comparison to  the primary one. “Most of the real estate developers have held their rates steady, but in the secondary market a correction of 15-20% or even higher has taken place. However, the buyer should carefully conduct a due diligence of the property while buying from the secondary market.”

STEAL A DEAL

Some also feel that the distress sales currently being observed in this market can be of help to a potential buyer. So while a limited number of smaller developers, in dire need of liquidity, are selling off their properties below par, no official announcement of such activities is usually made. Such properties are sold off discreetly at lower rates and the existence of such sales mostly spreads by word of mouth. “The global economic slowdown has hit real estate prices in the last few months, forcing people to either hold on to their properties or sell it off at the earliest to cut losses! This is particularly true for markets in and around major metros. If one patiently looks around, one can definitely find a good deal as there exist a very small number of buyers compared to sellers in the market today,” says R K Mittal, CMD of CHD Developers.

Agrees Vijay Jindal, CMD of SVP Builders India. He says one can end up saving a lot of money if one bags a good deal from the secondary market. And if one can trace a person who is distress selling, than it is better to crack the deal.

Whether you buy from the primary or secondary market, doing a comprehensive check of the documents needed will hold you in good stead. Buying a home in the secondary market can be beneficial as long as it has a long shelf-life in terms of construction quality, presents no financial or legal loopholes and shows a definite cost arbitrage over primary market rates.

Be buyer smart even if it is bargain that’s on your mind. Make your ‘second’ best choice, after an exhaustive inspection of all possible aspects. Be an informed house hunter, not a negligent one.

Source : http://economictimes.indiatimes.com/Features/The_Sunday_ET/Property/Secondary_real_estate_market_offers_a_good_bargain/articleshow/4027997.cms?curpg=2

Indian real estate developer keeps faith in luxury real estate

Gated homes appear ever-popular with Indian real estate buyers, as a developer reports considerable interest in a scheme near New Delhi.

Jaiprakash Associates is seeing strong attention for Wish Town Klassic, at Jaypee Greens, Noida.

The township is one of a series of luxury homes schemes being developed by the firm, with all apparently bucking an emerging trend towards more modest homes.

According to the Economic Times, the group is pushing on with a number of upmarket real estate schemes despite a general slowdown in the market.

The paper says the group is also implementing

“a number of luxurious residential projects like Pavilion Court, Pavilion Heights”

all of which involve high-specification homes.

Many real estate firms are following a trend which developed in the UK, with owners looking to rent out homes instead of sell in the slowing market.

The Times adds Atul Khanna of brokerage firm Khanna Properties said:

“We are depending on the rental market to keep our business going.”

Many middle-class families have ended up renting instead of buying thanks to a proliferation of more luxurious homes.

A squeeze on lending and high interest rates has also hit the Indian real estate market.

Source : http://www.offplanpropertyexchange.com/news/2009/01/indian-real-estate-developer-faith-luxury-real-estate/645

Oversupply in Commercial Real Estate

The over-supply scenario that 2008 had witnessed in the commercial real estate space could well continue in 2009, says the annual year-end report by Cushman & Wakefield, real estate services firm. While some companies, which had committed to larger spaces earlier, have scaled down their absorption as a prudent step to mitigate the cost on real estate others, which had taken up space based on anticipated expansion plans, are considering sub-leasing the excess space.

“With this trend continuing in the coming year, coupled with the additional proposed supply and the already existing increasing vacancy levels, the over supply situation is likely to see no early respite. Hence, rental corrections across micro-markets seem probable over the short term,” says Kaustuv Roy, Director of Tenant Strategies and Solutions at Cushman & Wakefield. The south, central and select suburban locations of Mumbai witnessed rental correction over the year and more recently, Thane Belapur Road (IT) and Malad (non-IT) too recorded a southward movement. Vashi and the non IT-projects in Thane Belapur Road recorded a stable trend. Central and Suburban locations of Lower Parel, Bandra-Kurla, Andheri and Powai are likely to witness a further fall in rentals with all other major markets expected to stabilise.

In Bangalore, the rental market continued to strengthen recording 4-9 per cent annual appreciation in the peripheral locations and nearly 18 per cent year-on-year growth in the CBD and off-CBD regions. Outer Ring Road and the suburban areas are likely to strengthen further in the coming months, whereas ITPB, Whitefield and Electronics City are expected to stabilise, says the report. Chennai witnessed a drop of 5-10 per cent in rentals in the in the CBD and off-CBD locations of T. Nagar, Alwarpet, Anna Salai and Radhakrishnan Salai, while the suburban and peripheral regions witnessed a 7-9 per cent drop.

Rajiv Gandhi Salai in the peripheries is the only market in the city that has begun to show signs of stabilisation and is likely to continue with the trend as all other major micro markets are anticipated to record a further fall in rentals, adds the report. In Hyderabad, the CBD, off-CBD regions such as Banjara Hills, Begumpet, Raj Bhavan Road, SP Road and the peripheral regions of Pocharam and Shamshabad recorded a 6-19 per cent annual appreciation in rentals, while the suburban regions of Madhapur, Gachibowli-Nanakramguda, Manikonda and Raidurga witnessed a 5 per cent fall. Banjara Hills, Jubilee Hills, Bachupally and Uppal have also recorded a fall in rental values.

Rentals in the National Capital Region dropped between 1 and 13 per cent from last year across micro markets, with Noida (IT SEZ) recording about 32 per cent annual depreciation. Over the last quarter, rentals recorded 6-16 per cent dip with the likelihood of a further correction in the months to come. Though rentals in Pune seem to have appreciated over the last year, the last two quarters recorded a 4-10 per cent dip across locations with the exception of Sholapur Road and Hinjewadi in the peripheries that remained stable and are expected to continue remaining so. All other major micro markets in the city are likely to witness a fall in rentals over the short term.

Source : http://www.indianrealtynews.com/real-estate-trends/oversupply-in-commercial-real-estate.html

You couldn’t have ‘wish’ed for more: Wish Town Klassic

Who doesn’t want to own a house of one’s own? We all do. And not just any house. A perfect house must have a room with a view, be spacious,  well-connected with the rest of the city, must offer the best of facilities. In other words everything that comes for a price. But be ready to get surprised as now all of the above is available at a price that matches your pocket.

Wish Town Klassic, a Jaypee Greens residential community on Noida Expressway seems to be one such place where all your needs regarding buying a home are met. First and foremost being the price range. To begin with, the price range for the apartments starts with Rs 35 lakh onwards for a two-bedroom flat going up to Rs 75 lakh for a four-bedroom house.

Considering the kind of add-on facilities it comes with and compared to the rest of the apartments in this range available elsewhere, the price sounds like a real nice deal. Especially for those who always wanted to invest in property but had no affordable options in sight.

And a real nice deal it promises to be for all apartments are in a duplex format . A gated community, Wish Town Klassic is based on the western concept of room structure with common areas as kitchen, dining and living areas on the ground level and the master bedroom and other private areas on the first level of the duplex.

And yes there is a cherry on the cake, in fact lots of cherries on the cake with dedicated covered car parking, high speed elevators, all recreational and leisure amenities as clubhouse with party rooms, health spa, fitness centres, sports arena, etc. along with shopping complexes with some of the leading luxury brands.

After battling pollution and smoke all day through, the only colour that would soothe your eyes is the colour green and Wish Town Klassic promises an abundance of it. Though this time around there won’t be a golf course in sight, the landscaping of Wish Town Classic promises to be something to look out for.

The project comes from the stable of Jaypee Group, a well-diversified infrastructural industrial conglomerate that has its presence in the fields of engineering and construction, cement, private hydro power, hospitality, expressways , education and of course real estate development.

Because of this very reason, the quality of Jaypee Greens Wish Town Klassic will be something to look out for considering the fact that the name Jaypee Greens is so far associated with some of the finest and high-end residential complexes. While the housing complex will come up in the year 2011, the booking is on and is seeing a major excitement among people. Young couples wanting to buy a house or first time home buyers or even NRIs looking for an option to invest buy a house are finding this as a good option to buy property.

Current market scenario notwithstanding , while the developers are still churning out products as before, one good news is that it is the people who are still spending and real estate as a market happens to be their favourite option to invest in property.

Your wish town

To begin with, the price range for the apartments starts with Rs 35 lakh onwards for a two-bedroom flat going up to Rs 75 lakh for a four bedroom house

It is a real nice deal for many reasons, one of the promises being that all the apartments are in a duplex format

The complex is based on the western concept of room structure with common areas as kitchen, dining and living areas on the ground level and the master bedroom and other private areas on the first level

The housing complex will be up in the year 2011, but, the booking is on

Source :http://economictimes.indiatimes.com/Markets/Real_Estate/News_/You_couldnt_have_wished_for_more_Wish_Town_Klassic/articleshow/3826225.cms

Realtors may cut prices 30% next year to boost sales

DLF, Unitech and other real estate developers may lower prices by 30 per cent by mid-2009 to nudge buyers out of their “wait and watch” stance, according to experts.

The price cut, if implemented by the country’s builders will also push sales higher, especially of the affordable category, property consultants said.

”Many developers will come down on their asking rates after being saddled with unsold stock beyond their ability to hold on,” added Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM).

Property prices in the key cities have more than doubled in the past few years helped by a boom in the stock market and a spurt in salaries of home buyers. The subsequent measures of the Reserve Bank of India to cool the overheated economy and a subprime crisis coupled with a credit crunch, has tempered growth prospects in the country hurting sales of property developers.

The benchmark sensitive index, the Sensex, has dropped more than 60 per cent from the beginning of the year, eroding much of the investors’ wealth and RBI has increased repo rates by 150 basis points till September this year to curb inflation.

“If you take same time next year, there will be better volumes at lower prices than what they are today. Buyers will be tired of waiting and all the developers realise that price cuts are necessary across the board,” said Pranay Vakil, chairman of property consultancy Knight Frank India.

To boost sales, property developers have been forced to cut prices of real estate but buyers are still adopting a “wait and watch” stance as many feel that even the lower rates continue to be unaffordable.

Property prices in Gurgaon, Noida in the National Capital Region (NCR) have fallen by 25-30 per cent while Mumbai’s distant suburbs have seen 15-20 per cent drop in prices. Now property consultants foresee further price correction of 25-30 per cent in 2009.

“By the middle of 2009, developers will loose holding power and cut prices sharply. Cuts will follow big time after elections,” said Ambar Maheshwari, director of DTZ, an investment advisory.

Experts say that developers are likely to focus on sub Rs 20 lakh flats due to huge demand for such flats and the government’s stimulus package for Rs 20 lakh home loans.

“Earlier, developers thought that there is latent demand for premium homes, but in the current slowdown, that perception has changed. There is always demand for Rs 5 lakh-Rs 15 lakh homes and developers will look towards that,” Maheshwari said.

Source :  http://www.business-standard.com/india/news/property-prices-may-fall-by-30-next-year/12/31/50909/on

Reliance Retail forays into home furnishings

Reliance Retail, a subsidiary of India’s largest corporate Reliance Industries, today announced its foray into home furnishing format as it presses to expand into more areas across the country.

The company announced the opening of its first ‘Reliance Living Furnishings’ store in Noida (Uttar Pradesh) and has plans to follow it up with one more store in Delhi and two in Hyderabad.

“We have not put any target regarding the number of stores which we intend to set up. Our turnover figures would be set once we receive adequate customer response,” Reliance Retail Senior Vice-President and Business Head (Home Furnishings and Decor) Manu Kapur told reporters.

With the recent softening of retail rentals, real estate companies have opened up to the idea of revenue sharing with retailers. Asked if Reliance Retail was contemplating such a step, Kapur said: “We are open to the revenue sharing model also but nothing has been finalised as yet.”

According to real estate consultant Cushman & Wakefield, retail rentals in some high streets across major cities, including Mumbai, Pune and Chennai and the National Capital Region, had witnessed a fall between 13-20 per cent in the third quarter of this calendar.

The home furnishing format is the 14th specialised segment tapped by Reliance Retail, which operates 800 stores across 60 cities having a total retail space of 38 lakh sq ft.

He said the company has started with 120 products under three private labels, including ‘Home One’ (basic), ‘My Home’ (mid-segment) and ‘My Home Premium’ (Lifestyle). The home furnishing items, 80 per cent of which would be the company’s own labels, are priced between Rs 199 and Rs 14,000.

The company’s offerings would include bedding, bath textiles, curtains, floor coverings, table and kitchen linen and decor in both autumn-winter and spring-summer ranges.

Source : http://www.business-standard.com/india/news/reliance-retail-forays-into-home-furnishings/16/21/50694/on

What will real estate cos do now

Following an appeal by finance minister P Chidambaram to the entire real estate industry to cut prices and make houses more affordable to the
buyers, the developers’ associations — National Real Estate Development Council (Naredco) and Confederation of Developers Associations of India (Credai) — both responded with appeals to their members to come up with whatever cuts that are possible.

So have developers cut prices and what does this mean for the end user buyer who had been priced out of the market during the boom years?

Rohtas Goel, Naredco chairman and CMD of Omaxe, says his company is offering 1-5% discounts to existing clients who have not defaulted on any payments. The discount is applicable for the Noida and Greater Noida projects. This discount would be offered on the balance amount to be paid. The discount would be applicable for about a year or according to market conditions.

Future projects in Noida, Faridabad, Ludhiana, Indore and Chandigarh, which are to be launched in 25 days or so, have discounts of between 5% and 10%. Affordable housing projects, the first of which is to be launched in Indore on January 26, come with a 15% discount.

Explains Prodipto Sen of Alpha G Corp, “We have not cut prices per se. But even before the FM’s appeal, we had launched a special category in our Karnal project where defence officers and public sector undertaking employees had been offered price discounts. This worked very well and we were overwhelmed by the response to our offer. So the price discounting is often market-linked rather than because of a specific appeal. After all, the developer has to factor in the cost of land, debt servicing and construction.

The appeal by the developers’ bodies has evoked mixed response across the board. Explains Pradip Jain of Parsvanath Developers, who is also a part of Credai, “We have not specified who has to cut how much. Some may have already cut prices according to market conditions. We can’t force them to cut prices again.” Jain maintains that he feels it is difficult for developers to drop prices on existing projects. New projects with lower specifications, sizes or facilities can be launched at lower prices.

“In our Greater Noida project, for instance, we had launched premium projects with high-end specifications. To suit the clients’ affordability today, we will launch the next round at lower prices with lower specifications such as tiled or stone floors instead of Italian marble floors.”

Kumar Gera, chairman of Pune-based Gera Properties and chairman of Credai, says it is important to understand what the association had issued in its appeal. “We had talked about five agencies that need to cooperate to bring down prices — the developer, government, material suppliers, service institutions and financial institutions. Simply dropping prices does not trigger sales. The fence-sitting buyer then waits for prices to fall further. The decisions to tinker with prices are largely on a project to project and location to location basis. The only reason for cutting prices is to impact the sentiment in the market and change the mood which will trigger buying.”

Suresh Jain of Vijay Shanti Developers in Chennai says prices had come to realistic levels even earlier because of market corrections about three to four months ago. Properties on the outskirts of the city that had been launched at about Rs 2,600/sq ft and progressively raised to Rs 4,300 per sq ft have come back to the launch price. This is a realistic value. However, if the government too can match this realism with a reduction in stamp duties and service tax that would help trigger sales.

Says Jain, “We are a group that has traditionally focused on the mid-segment buyers. That consumer is still worried. Earlier, getting a loan was not a problem for him. Today, even when loans are expected to be in the range of 85% of the published prices, many banks are only lending about 60% of the value. That leaves a deficit of 40%. If the government agencies can match the developers’ efforts with some financial trigger, it would help boost the markets.”

A West India-based developer who did not want to be quoted said they were reducing rates on a case to case basis. “Where the project had already sold almost 90%, we do not reduce rates but if a project is just being launched we have offer discounts between 2% and 15% according to the merit of the project, the location and various other factors.”

Ultimately, the rate cuts are not altruistic at all. The developer needs to cut rates to trigger sales as much as the government wants them to do so. However, policy measures to boost finance to the sector too may be required before the reluctant consumer is converted into a buyer.

Source : http://economictimes.indiatimes.com/News_by_Industry/What_will_real_estate_cut_prices/articleshow/3774578.cms

Affordable Homes From NBCC

The National Building Construction Corporation will launch 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 Ajay Garg, Finance Director. The organization doesn’t strive for huge profits but the costs will be kept sustainable, he stresses.

Source:  http://www.realtyplusmag.com

Realtors don’t budge on price

Mumbai: Developers have been howling from the rooftops for a government bailout, but most of them are unwilling to take the first step and scale down rates.

In Mumbai, despite being in financial hot waters, they are plain unwilling to make housing affordable. Realty sector analysts say this is because developers have formed a cartel to the detriment of prospective customers.

Posing as home buyers, DNA enquired at 18 prime properties in Mumbai, the National Capital Region of Delhi and Bangalore.

The story that emerges is that builders in the south and the north are offering price cuts of between 10% and 20%, but those in Mumbai are not ready to budge an inch.

An analyst with a foreign brokerage, who requested anonymity since he is not authorised to speak, blamed the situation on cartelisation.

“Without reducing their card rates, they ran to the government for a bailout. Not a single developer has said he has cut prices. The fact is developers are unable to sell flats and have huge loans to repay. This needs to be cleared this year itself and banks are not ready to give any extension on repayments,” he said.

“Reducing property rates will mean their ability to repay banks gets reduced, which is why they are chary of cutting prices,” he added.

He may not be far off the mark. Of the 10 properties surveyed in Mumbai not a single developer was willing to offer a discount. Even on projects where possession would be only after November 2009, there was no room for bargaining.

Nirmal Lifestyle was offering a discount —- a mere 1% or Rs 76,000 on a flat costing Rs 76 lakh.

The sales officer at Orbit Corporation, which focuses on redevelopment of dilapidated buildings, said the going rate for Orbit Arya, a project on Napean Sea Road, is Rs 60,060 per square feet.

“We have already reduced the price from Rs 72,000 three months back,” the official said, claiming seven of 11 flats have been sold.

RBI steps not a certainty to banks increasing lending

Some time back, real estate analysts had warned buyers not to put money into under-construction projects since realtors were facing a severe financial crunch. The projects DNA contacted were all ready for possession.

“It’s almost as if developers are taking advantage of the situation —- if you don’t invest in under-construction projects, there will be no reduction in the prices of ready flats,” said an industry source.

But the north and the south are a different story.

Companies such as DLF, Unitech, Parsvanath, Omaxe and Raheja Developers are all offering a minimum 9% to a maximum 17% in places such as Gurgaon and Noida on upfront payments with room for further negotiations, DNA’s enquiries revealed.

Most of these apartments are large, between 1,600 sq ft and 3,000 sq ft.

Unitech’s ambitious project in Noida, Unitech Grande, which was expected to generate a revenue of Rs 15,000 crore, has excellent discount offers.

The sales officer said there is 15% discount on upfront payments for flats costing Rs 2-3 crore; “We can negotiate further,” the official said.

That’s twice the discount Unitech’s competitors are offering for similar projects.

A spokesperson for DLF, India’s largest realtor, said the company will not cut prices as it is offering “affordable” apartments starting at Rs45 lakh.

On Thursday, Rohtas Goel, president of Naredco, the government body for realty players, requested its members to cut prices by 1-5% on present projects, nearly 10% on future projects and 10-15% for affordable housing flats costing Rs3-20 lakh.

Bangalore-based Sobha Developers has already announced an 8% cut in rates on Friday on “immediate and upfront” payment for its Rs 1.5-2 crore luxury project that will come up in two years.

Jai Mavani, infrastructure and real estate head of audit giant KPMG, says realtors have no choice but to cut prices in one stroke. “Otherwise there is no way they can stimulate sales. It is a Catch-22 situation for them. They need to bite the bullet if they want money to come into their pockets,” Mavani said.

Source : Sify.com

Fraser to manage 1,000 service residential units

Bangalore:Fraser Hospitality, the hospitality arm of Singapore-based Frasers Centrepoint Ltd, will acquire management contract of around 1,000 service residential units spanned across major cities in India in the next two-three years.

Signing a contract with Skyline Group to manage its 210 units of service residences coming up in two locations in Bangalore, Choe Peng Sum, chief executive officer of Fraser Hospitality said that the firm has also identified projects in Delhi, Noida, Gurgaon and Hy­derabad.

It is also negotiating deals in Chennai and Mumbai to manage around 700 units in the service residence space “We will announce the details in a month or two,”he said, adding that the company has also signed an agreement with real estate developer Minerva Properties to manage its 100 service residential units in Bangalore.

Fraser Hospitality, which is already present in 13 countries, is spreading its footprints in new regions including Bahrian, Bangalore, Chendu, Dubai, Edinurgh and Guangzhou. The company will focus more on India, said Sum. “We are studying actively pursuing other properties and developers in Chennai, Kolkata and Mumbai.

In our next stage of development, we will expand into secondary cities like Ahmedabad, Nagpur, Pune and Surat,”he informed. AvinashPrabhu, managing director of Skyline Group, said that the group will pump in Rs 100 crore to develop two projects to be managed by Fraserin Bangalore.

Healso said the service residences will be constructed according to standards set by Fraser. He noted that Bangalore attracts business visitors from across the globe, but suffers from a severe shortage of 5-starquality accom modation. “We are confident that the Fraser brand of luxury serviced residences will attract business class customers,” he commented.

Source: The Financial Express

Bharat Hotels to spend Rs1,200 crore on expansion

New Delhi: The family of Lalit Suri, a home-grown Indian hotelier who died two years ago, plans to invest Rs1,200 crore in adding 10 hotels to its chain and refurbishing seven properties over three years after a franchisee deal with InterContinental Hotels Group Plc. ends for its Delhi and Srinagar properties in 18 months.
Bharat Hotels Ltd, the family-controlled firm, has re-branded its properties here The Lalit, a name that will be used for the company’s hotels in Mumbai and Goa after the contract with Intercontinental expires, Jyotsna Suri, chairperson and managing director of the firm, said here at a press conference on Wednesday. The Suri-run firm has hotels in Bangalore, Udaipur and Khajuraho, which too have The Lalit branding.
The chain has 10 hotels that are currently under development in Kerala, Kolkata, Jaipur, Chandigarh, Ahmedabad, Amritsar, Noida, Dehradun, Dubai and Thailand that are expected to be operational between 2009 and 2011.
The Delhi property is being renovated and will be ready by March-April next year.
“We are continuing with our development as scheduled and there has been no slowdown whatsoever on the development front,” Suri said, adding the Rs1,200 crore spending will be funded equally through internal accruals and borrowings. An initial public offer is not on the cards in the next two to three years, she added.
Hotels in larger cities, are experiencing lower occupancy as businesses cut back on travel. Suri said Bharat Hotels was open to acquiring properties and was “waiting for the rates to drop further”.
Well-capitalized hotel firms such as Bharat Hotels will move ahead decisively with their expansion plans, one expert said. Such firms “recognise the opportunity and are probably looking at a long term view and building right now so that when the economy turns around, which it will, they will be on their feet,” said Sudeep Jain, executive vice president and hotels country head at the Gurgaon office of real estate consultancy JonesLang LaSalle Inc.

Source : Livemint.com

Crisis forces SEZ developers to review plans

NEW DELHI: India’s SEZ story, which generated protracted controversies last year, seems to have lost its sheen fo r now, thanks to the global  economic turmoil. As funds become scarce and demand for IT and industrial space diminishes, developers are looking to roll back their SEZ plans by seeking denotification or buyers for their projects. The country’s largest real estate developer DLF is looking for a buyer for its 10-hectare IT SEZ in Noida.

Three more developers are seeking to sell their IT SEZ projects in Noida and Gurgaon. One notified IT SEZ project, looking for a buyer, is located on the Sohna Road in Gurgaon. Brokers have approached potential buyers with proposals, without much success.

And that’s not all. Mumbai-based leading apparel exporter Alok Industries has decided not to go ahead with its proposed 80-hectare textile SEZ at Silvassa in the Union Territory of Dadra & Nagar Haveli. The company is understood to have decided not to seek notification for its SEZ, which received formal approval over six months ago. A company executive said Alok Industries did not see any rationale in pursuing the project as it will not give textile exporters duty-drawback benefit, thereby putting a question mark on the viability of the SEZ.

One large developer in Kolkata is seeking denotification for its SEZ even as another developer is requesting the government to denotify part of an IT SEZ near Mumbai. Notification puts certain obligations on developers, whereby he is expected to construct a minimum built up space in three years and reserve areas for specific usage. Once denotified, a firm gets the flexibility to develop project at his own pace and without any restriction on usage.

Meanwhile, India’s largest private company, Reliance Industries, has reportedly put on hold land acquisition at its proposed multi-product SEZ in Haryana.“Developers are facing severe cash crunch. They have no choice but go slow or exit projects.

But who will pick these projects,” says property consultancy firm Cushman & Wakefield director (transaction) Kaustuv Roy. Companies are putting off expansion plans and squeezing their space requirements as slowdown grips the world. “In six months, most markets in India will see supply of IT space far outstrip demand, bringing pressure on most new IT SEZs,” Mr Roy said.

A DLF spokesperson denied the company wanted to sell its IT SEZ in Noida. But a person close to the development said the company held negotiations with at least two Noida-based developers, though potential buyers later backed out as economic environment in general worsened, giving rise to fears that it may be unsustainable to have more IT space in a market like Noida, where supply has already edged out demand.

In many other projects, including multi-product SEZs, developers have put on hold acquisition of land. “Anyone who hasn’t acquired land so far will definitely not go for acquisition,” property consultancy firm JLLM managing director Anuj Puri said, adding that funds are difficult to raise and there was no urgency to pay farmers a high rate, when rates were likely to fall further.

Source : Economictimes

Stamp duty takes a hit as recession sets in

The recession is showing its effect on the real estate market — thereby hitting the state’s revenue collection from stamps and registration.

There is sharp decline in overall registration of properties — particularly in western Uttar Pradesh, the revenue bowl of the state.

Apart from the lucrative border areas of Delhi- Ghaziabad, Noida and Greater Noida, places like Moradabad, Rampur and Bijnor have also taken a hit. So have the districts under Agra division — Glass City Ferozabad and Hatharas — now known as Mahamaya Nagar.

By the end of September 2008, the revenue collection should have been 50 per cent of the target. But against the target of Rs 5,770 crore for the current fiscal 2008-09, the actual collection in the first six months is little over Rs 2,600 crore — a shortfall of nearly Rs 280 crore.

“Even after the 37 per cent reduction in stamp duty, there is no corresponding increase in registration of properties. This is certainly due to the recession and its impact on the real estate market,” said Desh Deepak Verma, principal secretary, Stamps and Registration.

Earlier, the stamp duty in the state was Rs 8 on every Rs 1000. From April 1, it has been reduced to Rs 5 per Rs 1000.

“Besides first-time registration, there is a clear decline in the resale of the residential and commercial properties, which has affected the revenue,” said Verma.

He, however, added that owing to red tape and corruption, urban development authorities — including Ghaziabad Development Authority, Noida, and Greater Noida — have also failed to give possession of plots to allottees despite receiving payment.

In a bid to cut red tape and streamline the process of registration, the state government has mooted a proposal for the web-based registration of properties.

According to the plan, this is to implemented through a public-private-partnership model. The project is estimated to cost Rs 100 crore, which will be met by the private investor who will be selected through competitive bidding.

Source : www.expressindia.com

Retail rentals decline by 20% in Q3

India’s retail sector showed signs of sluggish activities in the third quarter ended September 2008 with most retailers recalibrating their expansion strategies in response to slower consumer demand.

The rentals dipped by 20%, the maximum decline, at Linking road and Kemps corner in Mumbai, according to real estate firm Cushman & Wakefield.

The rental values for malls and high streets in many major micro–markets across the cities witnessed a slowdown over the last quarter indicating a phase of correction, C&W said in a statement.

Traditionally strong retail high street locations reported significant slide in rental values. In Delhi – Karol Bagh saws 18% drop, Ganesh Khind Road (Pune) and Cathedral Road – R.K. Salai (Chennai) both witnessed 13%. This is, prominently due to caution in expansion plans of retailers which is leading to a slowdown in demand.

Mall rentals too witnessed a similar trend where rental values have corrected to realign to the achievable business potential of the given market. This was especially true for rentals in Mumbai markets such as Ghatkopar (-11 %) and Vashi (-10 %).

National capital Region which received the highest quantum of mall space in this quarter saw rental correction of approximately 6-9 per cent in peripheral locations like Noida and Gurgaon.

Bangalore, Hyderabad and Kolkata retail markets remained stable with certain mall locations even seeing an appreciation in rental values. Ahmedabad situated on the other side of rental spectrum experienced the highest fall in rental values of 20 % in Kankaria Lake.

The real estate services firm said the expected mall supply for 2008 has been reduced by approximately 36 per cent to 10.57 mn sq. ft. for the year of 2008 from previous quarter estimates of approximately 16.77 mn sq.ft. The drop in the estimated supply is largely due to delays in project completion.

In July-September 2008 (Q3), the total supply for retail malls was 3.25 mn sq.ft. which was dominated by NCR that received approximately 2.1 mn sq. ft. Only two other cities witnessed new addition to mall supply in 3Q 2008 which includes Mumbai (0.89 mn sq. ft.) and Pune (0.25 mn sq.ft.).

Approximately 2.4 mn sq. ft. of supply is expected in the fourth quarter ended 2008.

Source : www.business-standard.com

Firms may expand into NCR on low rentals: Study

Delhi : Companies, which had deferred expansion plans in the National Capital Region (NCR) due to high property prices, can now think of going ahead as rentals for office space in IT and SEZ segments have declined by up to 13 per cent during the second quarter of 2008.

“The rentals of IT/SEZ segment in Gurgaon and Noida witnessed correction with values declining by 3 per cent and 13 per cent over the quarter respectively,” global real estate consultant Cushman & Wakefield (C&W) said in its report on the office market for second quarter of 2008.

The anticipated supply and deferred expansion plans of the companies resulted in the decline of rents, the consultant pointed out. However, the office rentals in Delhi have risen, though the pace of growth has slowed down. In the Central Business District (Prime) and other micro markets, rentals rose by up to 4 per cent only. Limited supply and robust demand due to convenience of the location pushed the rentals in these areas.

Giving the outlook, C&W said office market is expected to remain firm with rental values rising except for the IT and SEZ segments of Gurgaon and Noida, which are likely to see an estimated supply of 3.3 million sq ft during the third quarter.

Slowdown In Demand Forces Realtors To Freeze Rates

Real estate developers have hardly hiked their rates in the last six to eight months and some of them have not hiked them at all. Property analysts say this scenario is different from that witnessed between April and October 2007, when developers hiked rates by as much as 24% to 32%. According to a pan-India survey of local brokers in the residential property market, carried out by global research analysts Edelweiss, around 80% of brokers across India have witnessed a reduction in enquiries over the past month, and about 90% have seen a drop in transactions over the past month. A hundred brokers in 20 micro-markets like Bandra-Borivili, Mulund-Thane, Gurgaon, Noida, Whitefield-Marathalli and Annanagar, in Mumbai, Delhi, Bangalore and Chennai, were polled. Godrej Properties hiked rates for its Riverside project at Kalyan by 24% in 2007, but this year, it has increased them by a mere 7%, from Rs 2,000 per sq ft to Rs 3,000 per sq ft. Rates at Rustomjee’s Elanza project in Malad (W) has remained constant, at Rs 9,000 per sq ft, after its hike of 20% at Rs 7,500 per sq ft last year. Similarly, property rates at RNA Builders’ Royale Park and HDIL’s Dreams project in Bhandup remained at Rs 6,500 per sq ft and Rs 5,750 per sq ft, after jumping 18% and 5% respectively from 2007.

Source : Source : Realty Digest