Omaxe to invest Rs 15 billion on new projects; decides on price rise

New Delhi:Real estate developer Omaxe Ltd. is set to launch its four new projects over the next two months and may also raise the prices this fiscal year.

The demand of the real estate is on rise but omaxe is hell bent on price hike. The company will invest Rs 15 billion on the new projects. The revenues expected from the project hovers somewhere around Rs 23 billion over 30 months. India’s real estate market has registered a sharp from earlier this year.

Much of the demand is hoped to come from middle-income and affordable housing.

Source:http://www.samaylive.com/news/omaxe-to-invest-rs-15-billion-on-new-projects-decides-on-price-rise/659463.html

Genuine demand still hasnt returned to realty market

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

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

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

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

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

Omaxe to launch four housing projects

NEW DELHI – With the housing market slowly picking up, realty major Omaxe Ltd is planning to launch four projects shortly, a top official said here Tuesday.

“We are planning to launch four projects in the next two to three months with an investment of about Rs.1,500 crore,” Rohtash Goel, chairman and managing director of Omaxe, told reporters on the sidelines an event here.

“The company is planning to raise about Rs.2,500 crore from these projects,” he said.

The projects will be launched in Faridabad, Indore, Allahabad and Chandigarh. The company has already acquired land for construction.

All these projects will be completed in 30-36 months, depending on clearances.

“Last year was really painful, but this year the demand is improving. Buyers are returning to the market and we are expecting good sales this Diwali,” Goel said.

http://blog.taragana.com/n/omaxe-to-launch-four-housing-projects-180596/

Oh max! Omaxe goes max and launches new projects

Omaxe Ltd, which claims to be one of the leading real estate players of the country, has launched about four to five projects in just two months in  different cities of the country. The recent news to share about the developer is the announcement of the launch of two projects in just a week’s time, one in Lucknow and the other in Bulandshahar. Both the projects would be executed in phases over a period of five to seven years.

Spread over approximately 2700 acres, the Lucknow township is expected to yield an estimated revenue of over Rs 2,800 crores and would cater to the growing demand of quality living space in the city. Garv Buildtech Private Ltd, a subsidiary of Omaxe, has entered into a Memorandum of Understanding to develop the said hi-tech township in Lucknow.

Whereas the other project will develop a hi-tech township in NCR adjoining Greater Noida in Bulandshahar, Uttar Pradesh. For this, Omaxe’s subsidiary M/s Rivaj Infratech Pvt Ltd has signed an MoU with Bulandshahar Development Authority. To be developed over an approx area of 3601.19 acres, this township would have estimated revenues of over Rs 7,5O0 Crores.

The Lucknow township will be located on the proposed Lucknow Ring Road in close proximity to Lucknow Airport and only half an hour drive from Hazratganj, center of Lucknow city. The township will provide residential options comprising of plotted and built up development with various options including affordable housing to suit everyone’s style and budget and meet the social commitments to the society.

Speaking on the announcement, Rohtas Goel, CMD, Omaxe Ltd said, “The hi-tech township is an attempt to recreate an entirely new living experience in the city of Nawabs. There is already substantial pressure on the existing infrastructure and this township will attempt to ease the demand by providing state of the art facilities in close quarters.”

The Bulandshahar project will be located in Delhi NCR Region adjoining Greater Noida approx 20 min drive from its proposed international airport and adjacent to proposed Eastern Peripheral Expressway and North-East Railway Freight Corridor.

Talking about the project Goel said: “The township at Bulandshahar will be a good alternative to the crowded Delhi Region and will create an attractive environment for high quality living, work and recreation. Apart from this, the township will be home to technology and knowledge based industries which will be attracting private investment and create employment.”

Earlier, Omaxe through its subsidiaries had signed MOU with Allahabad Development Authority in July 2009 for the development of Hi-Tech Township at Allahabad on approx 1535 acres. With the Allahabad, Lucknow and Bulandshahar projects, the developer intends to generate revenue of over Rs 12,500 crores over a period of five to seven years.

The top team at Omaxe has begun to stand larger than life in the real estate industry and has also begun to influence the trend of transactions too.

For one thing, this company has stuck to its core competence all the time and this strategy has begun to pay lately.

Hence the recession could not take these guys out.

When the going gets tough, the tough get going.

Source : http://economictimes.indiatimes.com/features/financial-times/Oh-max-Omaxe-goes-max-and-launches-new-projects/articleshow/5032537.cms

Indian Landscape goes greener

Globalization and free market economy being the order of the day, the landscape activities are no more confined to a few professionals. Landscaping has got the industry status with a lot of activities taking place over the last few years.

“The rapid urbanization and industrialization leading to the ongoing construction boom, malls culture, green belts, amusement parks and residential townships, all these have given a new dimension to the art of landscaping, points out S Jafar Naqvi, President, Indian Flowers and Ornamental Plants Welfare Association (IFLORA)

In fact, Naqvi notes, India is availing itself of the services of landscape professionals from Europe, Malaysia, Singapore and importing all kinds of high value products from all over the world”,

Today, green architecture and energy-efficient landscape designs propose an alternative idea of how the appearance of landscape can integrate more fully with the life processes of plants, rather than remain dependent only on their shape and form, says Professor M Shaheer, Shaheer Associates, a prominent landscape architect, based in Delhi.

Indian real estate developers like Ansal API, DLF Universal Ltd, Omaxe Ltd., Hiranandani Developers, MGF Emaar Properties (Dubai), Prestige Group, Supertech, Unitech Builders, Rizvi Builders, Hafeez Contractors, K Raheja Group, Raheja Developers, Meriton Group, Parsvnath Developers, International Land Developers Ltd., Aashiyana Group, Sahara Group, JMD Ltd., Amrapali Group, Panchsheel Buildtech, M2K, Kalpataru Constructions, Merlin Group, Prestige Builders, Rungta Group and many more have joined the new urbanization revolution in India by creating new “Green Living” concepts.

It is undeniable that plants and trees play a key role in the development of our society and culture. Healthy environment is a boon especially for the growing children. Professor Dario Gamboni puts it even more pithily: “Plants make the shape of life itself visible”,

Naqvi adds, “The concept of using Indoor plants in offices and work places is growing in India rapidly because it enhances the employees’ working capability and creativity, while making the environment more peaceful and friendly.” Alongside, some of these plants are useful in curing many common diseases. Therefore offices of MNCs and many corporate bodies in India are growing them often in their office premises

Secondly Pune is a major production hub of quality plants, trees, shrubs and playing an important role to protect environment by supplying nursery plants to almost all top landscape designers, real estate developers, Urban development departments, and also exporting to other countries.

The following from Pune based companies participated in the expo. Display of Maharashtrian produces in this expo is a major attraction among landscape designers, officers of Urban development departments and nurserymen from all over India coming to source their requirements through this mega platform.

K F Bioplants, a leading tissue cultue lab in the country and a most successful Indo-Dutch joint venture project, supplying and exporting tissue culture plants from India.

Tukai Exotics -one of the prominent nursery project involved in developing of all kinds of trees and plants and placing Pune as a sustainable long term suppliers to green projects.

Tropica Nursery- the collection of different imported and indigenous accessories and inputs is the specialisation of this company supplying all kinds of pots, plants, trees, and other inputs all over India.

Vardhaman Fertilizer -a leading soluble fertilizer company focusing on high quality growing of plants, flowers and other horticulture crops.

Gajra Nursery -Ornamental plants and the variety of big size trees is the specialization of this company and became a reliable supplier to sports complexes and new urban projects coming in different metros.

Jagtap Horticulture-Pune’s one of the oldest nurserymen diversified into gardening centre, landscaping and importers of inputs for landscape and golf course sector.

It is also proven through various surveys that in the developed world the productivity of working staff has increased by 10 to 15 per cent by providing green surroundings or a good green plant nearby.

The country’s landscape industry has devised its own architectural creativity in the last five decades.

In view of the growing consciousness on Redesigning India thorough promotion of environment-friendly concepts, the 4th International Landscape & Gardening Expo 2009, to be held on 2-3-4 October 2009 in Hyderabad, India, will be an ideal destination for the entire landscape industry. It will be a single platform and a meeting place for all stakeholders under one roof. This mega event will be a world class experience for all professionals in this sector to increase their business through interaction and business dealings.

Adding value to the event will be a two-day conference devoted to “Plants, Places and People”. The discussions will focus on improving the quality of life of people by preserving the environment through proper planning of public places, parks and recreation centres. It will open a new chapter in the history of India’s greening movement.

Key speakers, who have been invited, are: the President of Indian Society of Landscape Architects (ISOLA) Ms. Savita Punde and the presidents of IFPRA, GCSMAI, HMDA, IBA, ITC Group, Raheja Group, Tourism Industry, Nursery Industry, Sports Authority, Amusement Park Industry, Lighting Industry and individuals working for Green sector.

Source  : http://www.indiaprwire.com/pressrelease/agriculture/2009091834008.htm

Omaxe`s arm to develop hi-tech township in UP

Omaxe`s  subsidiary – Rivaj Infratech has entered into memorandum of understanding (MoU) with Bulandshahar Development Authority for the development of hi-tech township in Bulandshahar, Uttar Pradesh on a proposed area of 3601.19 acres.

The proposed hi-tech township is well connected to Delhi, located in NCR Region adjoining Greater Noida adjacent to proposed Eastern Peripheral Expressway and North-East Railway Freight Corridor and will have estimated revenues of over Rs 75 billion and is to be executed in Phases over a period of 5 to 7 years.

Omaxe is a leading real estate development companies in India. Omaxe`s ventures in the real estate business include developing integrated townships, group housing, shopping malls, multiplexes, hotels, resorts, IT parks, biotech parks and SEZs.

Shares of the company gained Rs 5.1, or 4.34%, to trade at Rs 122.65. The total volume of shares traded was 415,172 at the BSE (2.25 p.m., Thursday).

Omaxe Launches Integrated Township Project in Allahabad

Omaxe Ltd has launched Omaxe Sangam City, an integrated township in Allahabad, according to a press release. The 96-acre Omaxe Sangam City offers plots ranging from 86 sq. yards to 671 sq. yd available at competitive price of Rs 5,200 per sq.yd. Set in a green environment and recreational and entertainment facilities, the project value of Omaxe Sangam City is about Rs 100 crores. Omaxe, through its subsidiary, had earlier entered into an agreement with Allahabad Development Authority for the development of Omaxe Waterfront, a hi-tech township, to be built over 1,535 acres with a total investment of around Rs 1,800 crore.

Located on the bank of the holy Ganga, Sangam City offers a view of Sangam Triveni of three holy rivers — the Ganga, the Yamuna and the Saraswati. The release quoting Mr Rohtas Goel, CMD, Omaxe Ltd, said, “Omaxe Sangam City will be Allahabad’s first self-contained township on the banks of the holy Ganges, a very first initiative catering to the multifarious needs of the residents.” With limited edition villas, Sangam City will be a self-sufficient township with healthcare support, a prominent educational institute, office spaces and retail opportunities. With technical approvals received, the possession of the Omaxe Sangam city plots will be offered in 30 months.

Source : http://www.indianrealtynews.com/real-estate-trends/omaxe-launches-integrated-township-project-in-allahabad.html

Realty firms may get Rs12,000 crore push

New Delhi: Real estate firms and construction companies will see an increase in business with the country’s home ministry looking to build—at a cost of Rs12,000 crore—100,000 houses for people who serve in paramilitary forces such as the Central Reserve Police Force (CRPF) and Border Security Force.

These houses will be built over the next four years.

The home ministry wants to involve private real estate and construction firms in the project in an attempt to speed things up. This will be the first time the private sector builds such residential complexes for the paramilitary. It is usually the Central Public Works Department, the government’s construction arm, that builds residential apartments for the paramilitary forces.

“As of now only around 15% of the paramilitary forces have accommodation. We plan to raise that to around 25% in the next four years and for that we need to build 100,000 housing units,” said a home ministry official dealing with the matter, who did not want to be identified.

The selected firm could be paid an annuity over a specific number of years to make the project attractive, added this person.

This will reduce the risk involved in the project and guarantee the builder a fixed payment every year. It is also likely to expedite the construction process.

DLF Ltd’s group executive director Rajiv Talwar said the government could consider several other options to make the project viable. “The government could offer a part of the floor area ratio (FAR) to the developer to help recover cost or it will have to look at some other option which makes the project viable.”

Talwar also said that it would be better if the ministry were to call representatives of the real estate sector for discussions before announcing these projects.

FAR, also called floor space index, is a metric that defines the size of buildings that can be developed on a plot of a certain size.

Omaxe Ltd’s chairman and managing director Rohtas Goel said his company would be interested in these projects if it was meant for developers—who would develop the entire project and take care of all issues, including financing—and not contractors, who typically implement a building contract for a fee.

The government wants to move swiftly to address the severe shortage in housing for paramilitary personnel.

According to the home ministry, currently only one in seven personnel posted with the Central paramilitary forces has official family accommodation.

And less than one-third of the policemen in the police forces of the various states stay in accommodation provided by the government.

At a time when the state police forces and the paramilitary are countering threats from insurgents in many parts of the country, a shortage of accommodation could cause unrest among the personnel, say analysts, as it already has in some cases.

Of the 770,000 personnel in the paramilitary, only 110,000 have government-provided accommodation. And of the 1.5 million personnel in the police departments of states, only 400,000 have government-provided accommodation.

Top officials in the home ministry and the paramilitary say that there is a constant demand from the men for official accommodation, which they are unable to meet. “The army gets the best of facilities. But today the war against insurgency is being fought by the paramilitary, who are getting stepmotherly treatment,” said an officer with the paramilitary, who spoke on condition of anonymity.

In the past two years, CRPF has lost 200 personnel in various skirmishes with insurgents and nearly 2,000 have been injured.

Former CRPF chief J.K. Sinha said the morale of the men had taken a beating as they were forced to live in huts and camps in areas where they were often under attack from extremists.

“It is very difficult to keep up the motivation among the men when they feel insecure about where they live. This insecurity also leads to depression, suicide and other problems,” Sinha added.

Source : http://www.livemint.com/2009/08/07003923/Realty-firms-may-get-Rs12000.html

Props for affordable housing

After an “uneventful” Interim Budget and the Union Budget 2009-10 for real estate, the Finance Minister surprised home buyers and builders while replying to the debate on the Finance Bill, 2009, in the Lok Sabha earlier this week.

Relief came in the form of interest subvention of 1 per cent for home loan borrowers in the affordable housing segment, and a one year extension of tax holiday to housing projects approved in FY’08.

Mr Rajiv Talwar, Group Executive Director of DLF, says the Government has sent out a clear message to builders — “give us smaller affordable houses and you can have benefits”.

These incentives will certainly lift the market mood, he says.

The Finance Minister has talked about an interest subvention of 1 per cent for a year on all housing loans up to Rs 10 lakh to individuals, on houses not exceeding Rs 20 lakh. The sunset clause for the Industrial Park scheme was extended up to March 2011.

Prior to this, Section 80-IA (4) (iii) of Income-Tax Act provided for tax holiday on profits from development, operation and maintenance of an Industrial Park completed before March 31, 2009.

On tax holiday for profits

Moreover, the Centre has also decided to amend Section 80IB(10) of I-T Act to allow the tax holiday for profits derived from projects approved between April 1, 2007 and March 31, 2008, and completed before March 31, 2012. The tax deduction to developers under this section was initially available for projects approved before March 31, 2007. The Finance Minister has now extended these benefits by another year.

Spur for demand

Builders are all considering affordable housing projects and the latest measures are expected to fuel the demand for houses priced in the Rs 12-14 lakh range.

Dewan Housing Finance Corporation Ltd (DHFL) — where loans up to Rs 10 lakh account for nearly 65-70 per cent of the loan portfolio — sees the scheme coinciding well with the current thrust on low-cost housing projects at the periphery location of cities. “We are awaiting the detailed guidelines to be issued by National Housing Bank, the nodal agency. But back of the envelope calculations peg the savings for a borrower at about Rs 8,000, for a one-year period,” says Mr Kapil Wadhawan, Managing Director of DHFL.

A senior Unitech official says, the interest subvention will drive demand for affordable housing. A 1 per cent interest subsidy may not seem much, but it can spur those waiting for the home loan rates to come down, he says. Unitech recently launched a new home brand, ‘Uni Homes’ for affordable housing projects where the units will be priced Rs 10-30 lakh. The company feels the bulk of its projects under this category would get a leg-up from the scheme.

However, reactions are somewhat mixed when it comes to the incentive pertaining to tax holiday under Section 80 IB (10). Some feel that its impact may fall short of expectations, as the benefits are restricted to projects approved within a specific timeframe. “The provision comes with a retrospective effect, and so the industry cannot initiate any action. Only those projects that were approved in the given timeline could be speeded-up,” says an industry watcher, adding that it will not significantly increase the fresh supply in the market.

Omaxe’s Chairman and Managing Director, Mr Rohtas Goel, points out that the conditions under this section (built-up area, as well as the plot sizes) were meant to encourage the construction of houses for low and middle-income households.

“Just how many projects approved during that period will actually fall within the definition of affordable housing? Remember, the thrust then was not so much on affordable projects.”

CREDAI Disappointed

Our Chennai Bureau adds: The Confederation of Real Estate Developers Association of India (CREDAI) has welcomed the subsidy on home loan interest rates and extension on tax holidays but feels these are inadequate. The incentives should at least be doubled, it says.

A release quoting Mr Santosh Rungta, President, CREDAI, says that extending the tax holiday under Section 80IB (10) for just one year to projects approved by March 2008 will will create an imbalance. Most developers would be affected since projects approved after March 2008 will not be entitled to draw any benefits.

The Government should extend the dateline to March 2012 irrespective of the date of approval. This will encourage developers to take up new projects and expedite ongoing projects.

CREDAI feels even the proposed interest subsidy of 1 per cent to home loan borrowers up to Rs 20 lakh is small.

The government should take into account the escalation of construction cost subsidise at least 2 per cent for houses up to Rs 30 lakh.

http://www.thehindubusinessline.com/iw/2009/08/02/stories/2009080250701500.htm

Omaxe scales New Heights

Omaxe Ltd has launched Omaxe New Heights, a residential project in Sec 78 Faridabad. Prices start from Rs 16.18 lakh and go up to Rs 25.23 lakh a unit to cater to the growing demand in the affordable housing segment, according to a press release.

Omaxe New Heights is a multi-storeyed Group Housing complex to be completed within 30 months from the commencement of construction.

Omaxe New Heights comprises of 2BHK (bedroom-hall-kitchen), 2BHK + study and 3BHK + study ranging from 850 sq.ft to 1,100 sq.ft and 1,350 sq.ft. Omaxe will offer free club membership, power back-up, and an inaugural discount to first few buyers.

Faridabad is central to Gurgaon, Noida and Delhi with the proposed metro rail connecting residents to the capital city and satellite towns, the release said.

The Royal Institution of Chartered Surveyors (RICS) has welcomed the Real Estate Regulation Bill (Promoters and Builders – Regulation and Control of Activities Act) but finds it falls short on accountability of State Government agencies involved in clearing projects.

According to a press release from the RICS, it has represented to the Ministry of Housing and Urban Poverty Alleviation that the draft real-estate regulation Bill, which is to be a ‘model’ for States to follow, is a step in the right direction. It clearly spells out the liabilities of the promoter, builders and agents and provides for suitable action for not fulfilling these liabilities and for violating clauses under the proposed legislation. It takes into account appropriate checkpoints and stages of a property transaction where regulation is most required.

The Bill will provide customers with a recourse in case of delayed deliveries, non-execution of conveyance deed, substandard quality of construction or any other deviances from the specifications agreed upon in the purchase and sale agreement.

The Bill makes the purchase and sale agreement mandatory and specifies the contents — this would remove ambiguities and make the transaction transparent and developers accountable, the release said.

While the Bill provides for stringent action against developers for any violation or delays in delivery, the State government agencies or local development authorities are, however, kept out of the purview of the proposed Act.

This could result in the developers being penalised for delays in clearances from approving authorities. The Bill ignores the accountability of local development authorities by not acknowledging the delays in project clearances; by keeping them out of the purview or regulation under this Bill and by not making appropriate provisions to make these authorities also accountable for delays.

An apex statutory or autonomous body preferably with quasi-judicial powers should oversee the functioning of the State-level bodies. The role of the regulatory body should be comprehensive to ensure that policy reforms are undertaken at the State level; the body should promote best practices, e-governance and skill development initiatives and monitor the ‘affordable housing for all’ agenda.

The regulatory body should be responsible for a wide range of activities such as improvement in regulatory framework with respect to modifications in antiquated land laws, duty rationalisation, single window clearance and computerisation of land records, setting up of minimum quality standards of registration of builders, setting up of reliable industry wide database, adoption of uniform valuation practices and improvement in accounting quality, setting standards and sharing best practices to meet housing policy objectives.

According to RICS, pending an enactment of the law by the State governments, an ombudsmen be appointed in the interim period.

RICS is a professional body in land, property and construction with over 150,000 members in more than 146 countries practicing in a wide range of specialisations. RICS is governed by a Royal Charter approved by the UK Parliament which requires it to act in public interest rather than simply advancing the interests of its members.

JLLM expands services

International real-estate consultant, Jones Lang LaSalle Meghraj, has ramped up its presence in Ahmedabad. The office was provisionally established in 2008 and is fully functional to meet business demands, according to a press release.

The office will also service the business requirements of clients in other areas of Gujarat, such as Rajkot, Bhavnagar, Vadodara and Surat. “Most retail and finance business is based in Mumbai, while Ahmedabad has the developer and investor bases,” the release said, quoting Mr Ashutosh Limaye, Associate Director – Strategic Consulting, Jones Lang LaSalle Meghraj.

This office links the two and allows JLLM to service Gujarat’s strong NRI community, the release said.

It has put strategic consulting staff in place at the Ahmedabad office as this is the first step in any real estate or infrastructure development project. There is a lot of thrust on infrastructure development in Gujarat, which is among the States that puts in infrastructure and then effects planned development.

Source : http://www.thehindubusinessline.com/iw/2009/07/26/stories/2009072650651500.htm

Omaxe launches Omaxe New Heights in Sector 78, Faridabad

Omaxe Ltd, the leading real estate developer today announced the launch of comfortable, secure, friendly & affordable homes Omaxe New Heights in Sec 78, Faridabad. Start5ing from Rs 16.18 lac, Omaxe New Heights is aimed at catering to the burgeoning demand in the affordable housing segment. Omaxe New Heights, a multi storied state-of-the-art Group Hosing Complex with a project value of Rs 70 crore (approx.) is proposed to be completed within 30 days from the commencement of construction.

Omaxe New Heights comprises of 2BHK, 2BHK + Study & 3BHK + Study in an area ranging from 850 sq.ft. to 1100 sq.ft. & 1350 sq.ft. respectively. These apartments are priced strategically and are starting from Rs 16.18 lac to Rs 25.23 Lac. Omaxe will be offering Free Club membership, Power Back-up and an inaugural discount to first few buyers.

Omaxe New Heights will have the facilities like Club with Gymnasium & Swimming Pool etc. 24X7 Gated security, power backup, optional car parking space, landscaped greens offering comfortable and secure ambience at an affordable prices. All the apartments will come fitted with vitrified tiles in all the bedrooms, electrical and other fittings.

Ideally located in the fast developing Sector 78 of Faridabad, Omaxe New Heights is at an extra advantageous position as Faridabad is central to the cities of Gurgaon, Noida and Delhi. This proposed Metro rail will provide faster & smoother connection to the capital city & other satellite towns around Delhi.

The elevated expressway on Badarpur border and proposed FNG expressway connecting Faridabad to Noida & Ghaziabad will surely be a boon to the Faridabad’s connectivity and will have and edge about the other NCR towns. Thus along with the better connectivity and infrastructure Faridabad will be a more decongested city with less dependence on private transport and easy approachability to neighboring cities & towns.

Source  : http://www.equitybulls.com/admin/news2006/news_det.asp?id=57194

Housing sector sees a silver lining, sales up 25%

A cross section of banks, property developers and real estate consultancies that SundayET spoke to confirmed that the rise in activity levels since the start of the year had picked up momentum in the last three months, with some in the sector saying that sales were up by as much as 25-30% since April, after witnessing a growth of 10-15%  during the first quarter of 2009.

India’s property market started showing signs of serious trouble nearly a year ago with first the American sub-prime crisis and later the Lehman bankruptcy playing havoc. The overpriced projects by builders found few takers which was worsened with the IT industry facing a major setback. Builders were stuck with high-end apartments which had no takers. There was a severe drop in sales with people wanting to conserve resources. As a result, property prices too fell 30-45% since peak of 2007, according to industry estimates. But today the scenario is different, with builders getting a mix of mid end and affordable housing into their portfolio. Raminder Grover, CEO – Homebay Residential, Jones Lang LaSalle Meghraj, says the revival in sales has been, conservatively speaking, to the tune of around 25% across the mid-to-high income segments, according to his company’s sales records.

Rohtas Goel, CMD of Delhi-based Omaxe too says there has been a 30% increase in sales thanks to factors such as a reversal in general economic sentiment after the elections and more options available in affordable housing. Statistics too would appear to bear this out. India’s largest real estate developer DLF says it has sold almost 1,500 flats in various cities since April, notably some 400 flats in its mainstay market Gurgaon, 700 in Bangalore, 100 plots in Indore, 200 flats in Hyderabad and 50 in Cochin. Rival Unitech has managed to sell more than 4,000 units in the last two and a half months in the National Capital Region, Chennai and Mumbai. Omaxe has also sold almost 500 apartments in its Omaxe Eternity project in Vrindavan. Niranjan Hiranandani, MD of Hiranandani Developers says there had been a sale of 7,000 apartments across the industry, mainly in Mumbai suburbs, over the last 60 days..http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=Articles

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http://www.pr-inside.com/housing-sector-sees-a-silver-lining-r1360901.htm

25% Upswing in India’s Housing Market

Activity levels are gaining traction in the near moribund housing market as a flurry of interest rate cuts, price drops and the building industry’s focus on affordable housing start to lure buyers back into the market. A cross section of banks, property developers and real estate consultancies that SundayET spoke to confirmed that the rise in activity levels since the start of the year had picked up momentum in the last three months, with some in the sector saying that sales were up by as much as 25-30% since April, after witnessing a growth of 10-15% during the first quarter of 2009. India’s property market started showing signs of serious trouble nearly a year ago with first the American sub-prime crisis and later the Lehman bankruptcy playing havoc. The overpriced projects by builders found few takers which was worsened with the IT industry facing a major setback.

Builders were stuck with high-end apartments which had no takers. There was a severe drop in sales with people wanting to conserve resources. As a result, property prices too fell 30-45% since peak of 2007, according to industry estimates. But today the scenario is different, with builders getting a mix of mid end and affordable housing into their portfolio. Raminder Grover, CEO—Homebay Residential, Jones Lang LaSalle Meghraj, says the revival in sales has been, conservatively speaking, to the tune of around 25% across the mid-to-high income segments, according to his company’s sales records. Rohtas Goel, CMD of Delhi-based Omaxe too says there has been a 30% increase in sales thanks to factors such as a reversal in general economic sentiment after the elections and more options available in affordable housing.

Statistics too would appear to bear this out. India’s largest real estate developer DLF says it has sold almost 1,500 flats in various cities since April, notably some 400 flats in its mainstay market Gurgaon, 700 in Bangalore, 100 plots in Indore, 200 flats in Hyderabad and 50 in Cochin. Rival Unitech has managed to sell more than 4,000 units in the last two and a half months in the National Capital Region, Chennai and Mumbai. Omaxe has also sold almost 500 apartments in its Omaxe Eternity project in Vrindavan. Niranjan Hiranandani, MD of Hiranandani Developers says there had been a sale of 7,000 apartments across the industry, mainly in Mumbai suburbs, over the last 60 days. Despite indications of improving demand, builders don’t seem to be in a hurry to raise prices. They are conscious that demand was up due to price cuts and the affordable housing strategy. Builders are loathe to do anything that could incipient recovery.

“We will not be looking at a price increase,” says DLF’s group executive director Rajeev Talwar. The company says it has cut prices by up to 30% from peak levels of 2007. Others point out that the demand is coming from the low-end housing segment comprising houses prices under Rs 25 lakh. “Buyers have come out of the waiting mode…By December, the situation is expected to become much better,” said Mr. Goel of Omaxe. Mr. Hiranandani of Hiranandani Developers also agreed that affordable housing was selling the most right now, saying that while the overall market had improved, this particular segment was doing really well as buyers realised that the market has bottomed out. Bank officials SundayET spoke to also confirmed the trend of rising demand, and noted an increasing demand for home loans.

“Largely the demand is coming from the sub Rs 30-40 lakh category. Resale market is also showing high growth. However, there is lesser demand for new projects as well as in yet to be completed ones,” said Kamlesh Rao, senior vice president at Kotak Mahindra Bank. “While during January-March, there was a growth of 10-15%, now it is around 15-20%.” He is not alone. Officials at UCO Bank, Axis Bank and the country’s top mortgage lender HDFC too agree that an improving sentiment had helped drive housing sales. “We are witnessing an increased interest from our clients. The condition has definitely improved over the last 3-4 months,” says Sujan Sinha, senior VP and head of retail assets at Axis Bank. An HDFC spokesperson felt the growth is up month on month mainly due to decline in interest rate and the growth of affordable housing. “We are confident that we will achieve the 20% annual target growth,” he said.

Source : http://feedproxy.google.com/~r/Indian-Realty-News/~3/r71BjpVplMg/25-upswing-in-indias-housing-market.html

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

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

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

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

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

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

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

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

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

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

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

Pay later, it’s okay, say developers

Cash-starved real estate developers are leaving no stone unturned to improve cash flow. For example, Unitech, Omaxe and Raheja Developers are waiving penalty on late payments so that customers do not quit.

“These are tough times for customers as well as developers in terms of cash generation. We are focusing on increasing cash flow from all directions and are making sure that no customer defaults or feels disheartened on not being able to pay his instalment due to unavoidable problems,” said an official from Unitech.

Most developers charge 18 per cent annual penalty from defaulting customers.

A recent report by IDFC said Unitech had seen delayed payments by customers for already booked properties. The receivables of the company increased to Rs 1,000 crore in fiscal year 2009, compared with Rs 750 crore in FY08.

Over the past year, a lot of people have lost jobs and taken salary cuts. Many of them had booked their first homes on instalments. The past six to nine months have seen a number of them defaulting on payments.

“The move to waive penalty on late payment is a smart move. This will provide customers the much-needed cushion at a time when a lot of them may want to back out due to their financial condition,” said a Mumbai-based real estate consultant.

Omaxe Ltd, which charged 18 per cent penalty for the first two months of default and 24 per cent after that, is offering a waiver to customers with a good record. “We are not offering the scheme to all our customers and are giving the waiver to only those who have made all their payments before their first default,” said an Omaxe spokesperson.

The debt of all real estate firms has risen over the past year and they do not want to lose an opportunity to gain cash from potential customers by insisting on penalty.

“We keep in mind the financial position of our customer. If someone has lost his job or faced some other financial problem, we allow him/her to start paying his EMI without caring about the penalty,” said Naveen Raheja, managing director, Raheja Developers.

Source : http://www.business-standard.com/india/news/pay-later-it/s-okay-say-developers/358033/

Slowdown Leads to Price Cut in Existing and New Residential Projects

Hit by slowdown blues and a massive credit crunch, real estate players are biting the bullet and lowering prices on new and existing residential projects. Recently, DLF Ltd reduced rates by 20 per cent on two ongoing projects — Chennai and New Town Heights, Gurgaon. Market watchers believe that the move could prompt others to follow suit. For instance, Omaxe says it has dropped prices by nearly 15 per cent, but only for new projects (Vrindavan, in Allahabad and Indore, is a case in point). While the company insists it has not “reduced” rates on existing projects, it admits to offering a 5-10 per cent discount to customers who pay instalments on time.

Overall, the real estate prices have corrected by 25-40 per cent over the last six months. With funds drying-up from investors, speculators, PE and banks, realtors realise that the funds are only available with end-users, who, in turn, are looking at value for money, says Anuj Puri, Managing Director, Jones Lang LaSalle Meghraj. DLF came under media glare recently when it slashed prices for its Chennai and Gurgaon projects. Besides this, the company has also launched two more projects at “lower prices” in Bangalore and Hyderabad — against the initially intended price of nearly Rs 3,000 per sq.ft, it has now announced a rate of Rs 2,200-2,300 per sq.ft, says a DLF official.

“In the case of existing projects, there was consumer demand for bringing the rates down. However, in the case of the upcoming projects, there had been an apprehension that the sales could get hit on account of two factors — consumer worry over future cash flows, and their expectation that prices will fall in future. By reducing the rates, we have been able to infuse demand and address these two concerns,” the official adds. According to DTZ, the last 3-6 month period has seen a 10-15 per cent price correction across the Delhi NCR micro-markets. “The correction has been more pronounced in the peripheral locations of Delhi NCR. There is a correction of 10-15 per cent on the quoted values,” a DTZ representative said.

Analysts feel that the price reduction is likely to be more pronounced in the case of new projects than those under construction and nearing completion. This is because on existing projects the end-user is sure on delivery timelines. For new projects, customers are discounting the risk of delivery, analysts opine. So have the residential prices finally bottomed out? No one really can tell for sure. Naturally, most players claim that the prices are unlikely to tank further. According to Rohtas Goel, CMD, Omaxe, “So far the lack of demand in the market has forced the real estate companies to announce price drops, but I do not think that there is any further scope. Builders cannot afford to cut rates, going forward.”

Agrees Puri of Jones Lang LaSalle Meghraj. “In many cases, I feel that the prices have touched the bottom. For instance, in Gurgaon where rates were initially pegged at Rs 6,500-7,000 per sq.ft, they have now come down to Rs 3,250 per sq.ft. I believe that where the prices have hit the year 2005-range, there is no scope for any more reduction now,” he points out. In fact, there are cases where builders are going all out to win customer confidence by offering ‘price guarantee’ of sorts. This essentially means that if a builder decides to cut rates on a particular project for the unsold inventory, he would cough-up the differential to its old customers who may have shelled-out more for the same project initially. This guarantee is being offered only in cases where the builder is reasonable sure that the prices won’t come down in a hurry.

Source  : http://www.indianrealtynews.com/real-estate-developers/slowdown-blues-leads-to-price-cut-in-existing-and-new-residential-projects.html

Lower rates in realty

Hit by slowdown blues and a massive credit crunch, real estate players are biting the bullet and lowering prices on new and existing residential projects.

Recently, DLF Ltd reduced rates by 20 per cent on two ongoing projects — OMR Chennai and New Town Heights, Gurgaon. Market watchers believe that the move could prompt others to follow suit.

For instance, Omaxe says it has dropped prices by nearly 15 per cent, but only for new projects (Vrindavan, in Allahabad and Indore, is a case in point).

While the company insists it has not “reduced” rates on existing projects, it admits to offering a 5-10 per cent discount to customers who pay instalments on time.

Price correction

Overall, the real estate prices have corrected by 25-40 per cent over the last six months. With funds drying-up from investors, speculators, PE and banks, realtors realise that the funds are only available with end-users, who, in turn, are looking at value for money, says Mr Anuj Puri, Managing Director, Jones Lang LaSalle Meghraj.

DLF came under media glare recently when it slashed prices for its Chennai and Gurgaon projects. Besides this, the company has also launched two more projects at “lower prices” in Bangalore and Hyderabad — against the initially intended price of nearly Rs 3,000 per sq.ft, it has now announced a rate of Rs 2,200-2,300 per sq.ft, says a DLF official.

“In the case of existing projects, there was consumer demand for bringing the rates down. However, in the case of the upcoming projects, there had been an apprehension that the sales could get hit on account of two factors — consumer worry over future cash flows, and their expectation that prices will fall in future. By reducing the rates, we have been able to infuse demand and address these two concerns,” the official adds.

According to DTZ, the last 3-6 month period has seen a 10-15 per cent price correction across the Delhi NCR micro-markets. “The correction has been more pronounced in the peripheral locations of Delhi NCR. There is a correction of 10-15 per cent on the quoted values,” a DTZ representative said.

New projects cheaper

Analysts feel that the price reduction is likely to be more pronounced in the case of new projects than those under construction and nearing completion. This is because on existing projects the end-user is sure on delivery timelines. For new projects, customers are discounting the risk of delivery, analysts opine.

So have the residential prices finally bottomed out? No one really can tell for sure. Naturally, most players claim that the prices are unlikely to tank further. According to Mr Rohtas Goel, CMD, Omaxe, “So far the lack of demand in the market has forced the real estate companies to announce price drops, but I do not think that there is any further scope. Builders cannot afford to cut rates, going forward.”

Agrees Mr Puri of Jones Lang LaSalle Meghraj. “In many cases, I feel that the prices have touched the bottom. For instance, in Gurgaon where rates were initially pegged at Rs 6,500-7,000 per sq.ft, they have now come down to Rs 3,250 per sq.ft. I believe that where the prices have hit the year 2005-range, there is no scope for any more reduction now,” he points out.

In fact, there are cases where builders are going all out to win customer confidence by offering ‘price guarantee’ of sorts. This essentially means that if a builder decides to cut rates on a particular project for the unsold inventory, he would cough-up the differential to its old customers who may have shelled-out more for the same project initially.

This guarantee is being offered only in cases where the builder is reasonable sure that the prices won’t come down in a hurry.

Assured value

Lodha Group, for instance, is offering “best value guarantee” scheme to its luxury housing project customers in South and Central Mumbai. “This is aimed at building customer confidence in the project,” says Mr Abhishek Lodha, the company’s director.

Mr Lodha admits that the new pricing in overall real estate sector is reflecting the market reality. “In our eight new projects, the prices have been pegged 15-20 per cent lower than what they would have been, say, a year ago,” he adds.

Source : http://www.thehindubusinessline.com/iw/2009/04/05/stories/2009040550811500.htm

Realtors Try Real Ways to Woo Buyers

After offering customers free cars and apartments to tide over the slump in the property sector, developers are now getting real: From price cuts, paying equated monthly instalments (EMIs) in case the buyer loses his job, and treating the rent paid as down payment for new purchases, realtors are trying every possible trick to woo buyers. Recently, DLF, the country’s largest real estate developer, wrote to buyers of its new housing project in Gurgaon about a cut in apartment prices by 20 per cent.

According to the new plan, buyers will get 5 per cent discount over the basic sale price, another 10 per cent as timely-payment rebate and an increase in the compensation rate for delay from Rs 5 per sq ft per month to Rs 10 per sq ft per month. DLF is expected to provide a similar package for customers of its ‘Express Greens’ project in Gurgaon and in other cities too. Another real estate developer, Omaxe, is said to be working out a similar offer for its Greater Noida customers.

In Pune, the Promoters and Builders Association of Pune, a 300-member strong body of developers, has come out with a scheme wherein members pay three EMIs if the buyer loses his job due to slowdown. The scheme is expected to help more than 700 buyers who lost jobs in the past few months. “We want our clients to find a good job and not get tensed over the EMIs they have to pay,” said Atul Goel, MD, Goel Ganga group. Another developer, Mont Vert, has come out with a scheme under which the tenant will be able to buy the apartment after his/her agreement ends. The rent paid will be considered as down payment and deducted from the final sale price. Though Mumbai has not seen any eye-popping scheme after the Cosmos group’s “get one house free on every house” offer and assured buyback from Sunil Mantri Realty, developers like HDIL, Nirmal Lifestyle and others have launched apartments at prices 15-30 per cent less than the market rates.

Source : http://www.indianrealtynews.com/real-estate-india/realtors-try-real-ways-to-woo-buyers.html

Real estate market down, apt time for your dream home

Real estate prices have fallen remarkably in the last few months. The reasons for it are not unknown. The prices were being affected even before Top Ten Global Financial Centers Bandra-Worli Bridge

Lehman brothers collapsed or Citibank had to be bailed out. When inflation reached the peak in India, so did the cost of buying a home. Property prices were at an all time high, interest rates had been much higher than the rates that many could afford, and buying a house in the city was a mammoth task to achieve.

But all this has changed now. Due to the global financial crisis, property prices have fallen to approximately 10% to 30% in different areas in Delhi and NCR as compared to last year. In Delhi, certain areas like Golf links, Westend, New Friends Colony have seen marginal decline of approximately 5% in their prices as compared to last year, prices have reduced by 10% in Gurgaon and approximately 20% in Indirapuram, Vaishali and Greater Noida. But it isn’t over yet it seems.

Kamal Taneja, MD, TDI Infrastructure Ltd. points out, “The economic slump will last till another two quarters at least. But, there is hope for the market to pick up after the elections.”

A report from JLLM had suggested that two scenarios might present themselves in front of the residential real estate market in 2009. The residential market was lying low in 2008, while the developers were enjoying the profits out of selling luxury properties, but 2009 is a different story. Even the top developers like DLF and Unitech which were only looking at profitability from luxury properties, have now come up with announcements of their plans to bring up affordable housing over the next few years.

While DLF plans to invest Rs 15,000 crore to build up 40,000 affordable housing units, Unitech made an announcement of 10,000 apartments with an investment of Rs 2,500 crore over the next couple of years. Even Omaxe has announced an astronomical investment of Rs 80,000 crore in the next five years to come up with 10 lakh housing units, for sale at Rs 3 lakh to Rs 15 lakh. In its report, JLLM had suggested that the buyers, who have been waiting to purchase their dream home because the rates were high, would be able to buy their own home in the year 2009 as the prices will drop.

If the volume of buying is high enough, then, with the money that the developers will draw in, they can move on to finish other projects on hold. However, if the buyer continues to wait for the prices to fall to a desirable level in order to get the best rates, there is a possibility that the ‘best rates’ might even come and go, without the buyer being aware of it, said the report.

In the NCR region, especially in Gurgaon and Noida, the prices that were touching the sky, have also come down substantially by 25-30 %. And it is estimated that the market will further dive to another 10-15 %. Navin M Raheja, MD, Raheja Developers states, “According to me, it is the best time for homebuyers to buy property now, since prices are extremely low.

The banks rates on home loans too have come down to single digit. One must not delay the buying decision since the market is already showing signs of revival and will bounce back certainly September onwards.” Raheja’s advice can only second the report from JLLM that points out that buyers might miss out on the opportunity to buy their dream home at an affordable price if they keep waiting for the prices to come down further more.

But there is good news, prices might not have touched the lowest yet as developers have another advice, “We shall advice that people should wait till the results of elections now and see whether our electorate would be able to give us a stable government,” says Raheja. However, elections are not far away and the residential real estate prices have already started showing sings of revival and it is only over the next two quarters that the buyers should wait to buy their own home.

Focal Point
Due to the global financial crisis, property prices have fallen to about 10 percent to 30 percent in different areas in Delhi and NCR as compared to last year. In Gurgaon and Noida, the prices have come down substantially by 25-30 percent The economic slump will last till another two quarters at least. But, there is hope after the elections.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Real-estate-market-down-apt-time-for-your-dream-home/articleshow/4352911.cms?curpg=2

Property in hill stations on a uphill

At a time when sales in most real estate markets are seeing a downward trend, there is one segment that could start moving uphill, literally.

In a bid to escape the stress and hectic schedules, many feel that homes in hill stations and foothills such as Rishikesh, Mussoorie, Almora, Shimla, Ooty, Kodaikanal, Haridwar and Dehradun will be an ideal buy in the present scenario. Desiring a break from slowdown blues is, in fact, making many of these locations a better proposition.

The only thing, however, that a buyer needs to keep in mind is to check if buying property is legal in these locations or not. In some Indian states, non-locals are not permitted to buy land.

In Jammu & Kashmir, for instance, there are laws prohibiting affluent outsiders from buying land so that the interests of local farmers are protected.

This law is applicable to all those who have not been residing in the state for at least 10 years before May 14, 1954. In Sikkim, non-locals cannot purchase land except to establish industrial units.

In Arunachal Pradesh, sale of land or property to non-locals, more specifically non-tribals, is not allowed. There were also restrictions on purchase by outsiders in Himachal Pradesh under the Himachal Tenancy Land Reform Act (1972).

Many of these laws, however, are being bypassed by outside investors entering into partnership deals with locals. Today, Himachal Pradesh Urban Development Authority (HIMUDA) has granted permission to builders to develop land and licenses are now being issued.

There are a lot of reasons why buying in hill stations is gaining momentum these days. Modern day stress, hectic schedules and a desire to lead a peaceful life makes these hill locations a preferred choice for many.

Buyers also love the spaciousness, greenery and natural beauty which homes in these locations offer.

Says Raminder Grover, CEO of Homebay Residential, Jones Lang LaSalle Meghraj (JLLM), “Despite the negative economic dynamics prevalent today, the market for residences in hill towns is still emerging in India. This buyer segment is usually in the age bracket of 35-45 years. These buyers purchase such homes either for investment purposes or as weekend getaways.”

However, as compared to the West, the trend of buying in hill towns is yet to catch on in India.

“Buyers of holiday homes at locations in the West tend to spend their entire summers at their vacation homes and buy them accordingly in terms of scale and numbers. The concept is an emerging one this side of the globe, but the driving motives and scale are very different,” adds Grover.

Many feel the trend of buying a home away from the city or a weekend home is increasingly becoming predominant in the country, much on the lines of the West.

Says Shravan Gupta, vice-chairman of Emaar MGF, “Having widespread appeal in the West, the idea is quickly catching on here, with various individuals opting for the alternate house on the outskirts of their cities, in order to get away from the hustle and bustle as often as possible, in the relaxed atmosphere of one’s own home in these areas. These homes are created either in the form of cottages or built-up apartments, with the view being an important criterion.”

Experts say those who buy homes in hill stations do so in locations close to accessible areas with convivial surroundings.

For instance, in the case of Mumbai and Pune, the locations of choice are Lonavala, Khandala, Baneshwar and Alibagh. Towards the north, it is mainly non-restricted areas around Dehradun, Mussoorie and Nainital which are popular.

In the east, areas around Darjeeling are popular while in the south, destinations such as Ooty and Kodaikanal are quite a hit with buyers.

Developers are very positive about the opportunities in these markets and agree that properties here could become attractive. Omaxe, for instance, is constructing Park Wood township which will have more than 2,000 flats in Baddi.

Says Rohtas Goel, CMD, Omaxe Group, “The real estate sector in Punjab and Himachal has great demand and Shimla’s industrial areas such as Baddi are close to Chandigarh and that is the reason for the growth in Himachal Pradesh. We are making one of the biggest townships in the state and are confident of its success.”

Needless to say these hill stations are more popular as vacation homes. And in that sense they are still seeing a steady clientele.

Says Rajeev Rai, vice-president (corporate) of Assotech, “Homes perched atop a hill always buck the slowdown trend as they offer luxury of a different kind. Single family homes are preferred where the developer enters into an agreement with the buyer to maintain his property throughout the year. Some of the developers are also offering a model in which the buyer can use his property for a part of the year and during rest of the year, his property will be rented out to users thereby guaranteeing a return on buyer’s investment.”

This developer has a project located in the industrial hub of Rudrapur amidst natural beauty, which is witnessing a good response from buyers.

What also acts as an incentive is the prices in these locations which are more lucrative than that in new residential property. “The added attraction is the pricing of such new built residential property, which is being offered at quite attractive prices compared to new residential property available in suburbs in the bigger cities. Such developments are conspicuous in towns which have witnessed a fair amount of interest from buyers in bigger cities, looking at a holiday home for religious or weekend getaways,” says Kamal Taneja, MD of TDI Developers.

Well, here then is an opportunity to buy your own home in the hills. You could feel the serenity of nature all around you — and beat the slowdown blues.

Source : http://economictimes.indiatimes.com/Features/The-Sunday-ET/Property-in-hill-stations-on-a-uphill/articleshow/4265741.cms

Listed realtors start to slash prices

Mumbai: The much-awaited correction in residential realty prices in Mumbai may not have been obvious to start with, but now even the bigger developers that are listed at the stock exchanges have started slashing rates.

For instance, Unitech, the second-largest realty player in the country, has launched a residential project in Dadar West, one of the prime locations in the central suburbs. The project is divided into two categories — one with a price range of Rs 9,900 per square feet and the premium range priced at Rs 14,000 per square foot. Interestingly, the market rate in that area of the city is Rs 18,000 per sq ft! Thus, there’s a 45% reduction in prices.

Similarly, the country’s third-largest realtor, Housing Development and Infrastructure Ltd (HDIL), on March 4, launched its residential project in Kurla, adjacent to the redevelopment site of its Mumbai airport rehabilitation project. The project was initially priced at Rs 5,251 per square feet, but the price was raised to Rs 5,351 per square feet by Monday. However, the going price of the area is approximately Rs 7,500-8,000 per square feet — 33% more than HDIL’s offer.

Hari Prakash Pandey, deputy general manager (finance), HDIL, said, “We had launched 756 flats and, at the end of Monday, we have already booked more than 400 apartments.”

“Fund managers are pretty gung-ho owing to the price reduction by one of the largest realty players in the country,” said an analyst with a domestic brokerage. “Most developers in Mumbai are not yet out in the open and have not slashed prices,” the analyst added. This is despite the fact that residential prices in the city have fallen by 10-15% in December and by a further 15% in January.

The situation is similar in Gurgaon (near Delhi), a market that has rarely seen a price correction even after the downturn.

Indiabulls Real Estate, the Mumbai-based player, last week launched its residential project there. It was priced at Rs 1,950 per sq ft, which is much lower than its peer’s rates of Rs 3,100-3,200 per sq ft.

Traditionally, DLF, Parsvnath, the Jaypee Group and other north-based developers have ruled the Gurgaon market. But Indiabulls’ 40% lower pricing has brought them tough competition.

An analyst from a foreign brokerage based out of Mumbai told DNA Money, “Realty players are tapping new markets and bringing in new price cards, which is hitting developers in that market. But today, developers need to sell each and every project to get money in their kitty as debt repayments dates are coming closer.”

Some major players such as Omaxe, Parsvnath and Unitech have had negligible sales in several of their projects in the last quarter. Any money, even through reduced pricing of projects, could help shore up their balance sheets.

Analysts add that after the reduction in prices by the listed players, even the unlisted players would have to follow suit.

Despite the reductions effected, consultants say, developers are still making margins and no one is selling below the replacement price of the property. Thus, there is always scope for further reduction in prices.

Source : http://www.dnaindia.com/report.asp?newsid=1238250

Slowdown signs – Real estate investment plunges by 82%

According to an ASSOCHAM Investment Meter study, the real estate sector investment plans slumped drastically from INR 1,15,326 crore in Q1 FY 208-09 to meek INR 22,482 crore in the Q3 of the fiscal. Owing to tighter credit and a steep decline in demand, CAPEX announcements of the sector plummeted 82% between the first and the Q3 of the fiscal.

The real estate sector investments declined from INR 115,326 crore in Q1 FY 2009 to INR 36,400 crore in the Q2 owing to the aftermaths of monetary policy stance which kept interest rates higher to cool off then soaring inflation. The spike in interest rates led to a fall in housing and commercial demand for the sector. During the period the central bank raised its repo rate by 75 basis points to 8.5%.

During the Q3, a sequential decline of 38% in the CAPEX announcements of the sector, to INR 22, 482 crore from the previous quarter could well be attributed to the buoyant call rates in the money market. With the banking sector’s increased reluctance to lend, the freezing credit situation had its share in drying up the sector’s investment plan.

Despite a huge shortage in the housing sector requirements, the demand has declined due to higher interest rates and economic slowdown. According to an Assocham study “Reality check on Real Estate”, India has a housing shortage of about 19.4 million units. It is also estimated that an additional 45 million units would be required during the 11th plan. The slowdown in the housing sector demand is adding to the pains of the sector as it constitutes almost 80% of the Indian real estate development.

Mr Sajjan Jindal President of ASSOCHAM in Real estate sector investments: Assessment & Outlook said that “Even as the economy face major shortage of housing and commercial space, the subdued demand due to high interest rates, credit tightening and global financial crisis have dampened the real estate investment plans. The capital expenditure announcements in the sector have witnessed a sequential decline of 68% and 38% in second and Q3 of the fiscal so far.”

Mr Jindal said that “Even though the real estate sector investment plans have dried up considerably, the swift policy actions announced by the government and the RBI are likely to act positively in reviving the demand and address the funding problems of real estate players.”

The sector witnessing a plunge in demand by up to 50% leading to a drop in prices by 15% to 20% has dampened the investment announcement in the sector during the first three quarters of the fiscal.

The number of projects announced by the domestic real estate companies also declined from 16 in Q1 to 10 in Q2 and 11 in Q3 FY 2008-09. Among the top 5 investment announcements for the sector, In May 2008, Omaxe had announced the biggest CAPEX plan worth INR 80,000 crore to develop 10 lakh affordable homes in Haryana & Rajasthan during next 5 years.

On the outlook for the sector the study stated, with the concentrated efforts of the government and the central bank to heal the Indian real estate sector which is crippled by credit freeze and falling demand, the stimulus packages for the sector along with the lowered interest rates are expected to revive the sector; provided the lending to the sector is made smooth and consistent. Meanwhile, the main challenge as to remain on demand side, with demand of commercial property in doldrums because of the sinking business confidence, the residential demand could improve due to lower interest rates. The swift policy actions like cheaper home loans up to INR 20 million may push up the demand

Source : http://steelguru.com/news/index/2009/01/19/NzkwNjg%3D/Slowdown_signs_-_Real_estate_investment_plunges_by_82%2525.html

Omaxe to launch 10,000 homes in Indore at Rs4-10 lakh

New Delhi: Realty firm Omaxe on Wednesday said it will launch 10,000 low-cost homes in Indore in February, which would be developed at about Rs1,000 crore.

The company will launch the flats in the range of Rs4-10 lakh.
“We will launch 10,000 affordable houses in February at a 200-acre township in Indore,” Omaxe chairman and managing director Rohtas Goel told reporters on the sidelines of an Assocham function on real estate.

Asked about the investment, he said the project cost would be about Rs1,000 crore and the size of the flats would be 350 square feet upwards. Construction would be complete in 18 months.
Goel noted that the company would sell these units at a margin of 10-15%.

In May 2007, Omaxe had announced that it would develop 10 lakh affordable homes for low-income consumers in five years at Rs80,000 crore. To take its plan forward, it would launch similar projects in Raipur, Rohtak, Sonepat, Chandigarh, Bhiwadi and Ludhiana.

While Omaxe would develop affordable housing in North India, in the south, Mumbai and Ahmedabad, such projects would be launched by a group company ‘National Affordable Housing and Infrastructure Ltd´, Goel said.

Omaxe would soon launch housing projects at Rs12-19 lakh at Faridabad, Greater Noida and Ludhiana, he added.
On correction in property prices, Goel said the rates have declined by 10-40% across the country and there is no further scope for reduction.

Stating that sentiment in the market has improved after the stimulus package, he said states should also pitch in to boost housing by reducing stamp duty to 2-3% for the next two years, raising the density norm and offering interest subsidy to buyers.

Source : http://www.livemint.com/2009/01/14162729/Omaxe-to-launch-10000-homes-i.html

Property firms see buyers back in market

Property developers expect to boost sales of homes and borrow funds at lower rates after the Reserve Bank of India (RBI) today reduced its key benchmark rate and cut the cash-reserve ratio (CRR) requirement in a bid to help banks lower interest rates and lend more to cash-starved sectors, including the real estate. They are hopeful of attracting more overseas investment in projects as demand revives.

Real estate companies were facing a tough liquidity situation as home buyers deferred new purchases due to high interest rates and banks stopped lending to real estate firms due to fear of mounting defaults.

“I expect more people to buy homes now. It will reduce cost of funds for developers and ease the liquidity pressure,” said Ravi Ramu, director of Bangalore-based Puravankara Projects.

A reduction in lending rates may lure home-buyers back into the market. Rohtas Goel, chairman and managing director of Delhi-based Omaxe, said: “We are confident that banks will reduce interest rates for the housing sector, which will help bring back the end-user to the market. This move will further boost the confidence of investors.”

Experts are still sceptical of banks passing on the entire benefit of the reduced rates to their customers. “The RBI has cut rates in the past but we have not seen much from financial institutions. Only when home loan rates come down to 8-8.5 per cent, can we see some difference,” said Anuj Puri, chairman, Jones Lang LaSalle Meghraj.

Developers said the government’s move to allow external commercial borrowings (ECBs) in development of integrated townships was a big step. Hitherto, realty developers were prohibited from raising funds through ECBs as foreign funds were considered the main trigger for the rapid increase in property prices.

“When we have land and demand for houses increase, we need liquidity. Interest rates are cheaper abroad and we can tap that now. Today’s measure is great and akin to allowing FDI in real estate. If we can raise money abroad, it will supplement bank funds and customers’ money,” said JC Sharma, managing director of Sobha Developers.

Pradeep Jain, chairman of Parsvnath Developers, said, “When home loan rates are cut, liquidity is made available to developers and their cost of funds comes down. All these developments will help the common man,” Jain said.

However, Hiranandani Constructions Managing Director Niranjan Hiranandani said the relaxation in ECB norms would not immediately help property companies as the liquidity situation abroad was tight. “Not much money is available in the international market. The benefits will come after a couple of months when liquidity improves,” said Hiranandani.

Sanjay Verma, executive MD South Asia, Cushman & Wakefield, said the government could have relaxed ECB norms for the whole real estate sector instead of only integrated townships.

However, the country’s biggest real estate company said the government had avoided taking some key steps to help revive demand in the real estate sector. “The government could have taken more steps like increasing the I-T exemption limit for home-loan borrowers, making bank loans of Rs 20-50 lakh available at lower interest rates and increasing the age limit for eligibility of home loans. Each step matters as the government’s intention is to fight the slowdown, ”said DLF Group Executive Director Rajeev Talwar.

Source : http://www.business-standard.com/india/news/property-firms-see-buyers-back-in-market/15/26/345103/

RBI’s measures can boost demand for property

The slew of measures announced by the Reserve Bank of India (RBI) last week have brought some relief for the cash-strapped real estate sector. A cut More Pictures of 100 basis points (bps) in both repo and reverse repo rates and restructuring of commercial loans have come as steps which can boost demand.

In fact, it is felt that government giving priority to housing loans up to Rs 20 lakh will bring affordable housing into focus once again. But in what way will these benefits be passed on to consumers? And how much will these measures help in reviving the realty growth?

Sachin Sandhir, MD & country head, Royal Institution of Chartered Surveyors (RICS) India, feels that the RBI’s move will help reposition the sector as a priority one and bring it on par with other sectors.

“The across-the-board rate cuts by the RBI is expected to bring in more liquidity into the system by reducing the cost of borrowing for both corporates and retail consumers. Overall, this is a positive move as it signals the easing of interest rates, thereby increasing demand. This will infuse more liquidity into the system and lead to reduction in interest rates, eventually helping the market to expand and diversify.”

What also comes as a positive measure is that housing loans below Rs 20 lakh will be categorised as a priority sector. This means that consumers can now get double benefit in terms of a reduced interest rate as well as more affordable pricing. Hence, properties in the range of Rs 25-30 lakh will become more accessible for the end-user.

“Buyers now have the advantage of getting better prices for their dream homes. Locations in Delhi NCR such as Ghaziabad, Faridabad, Manesar, Sonepat and others will be conducive. Also, developments surrounding tier II & III cities such as Mohali and Zirakpur and all outlying areas of Hyderabad, Bangalore, Kolkata and Pune will be viable locations,” says Rohit Malhotra, CEO, Realtech Group.

Targeting tier II and III towns as well as NCR are locations where you could look to avail of the loan advantage, feels Vijay Jindal, CMD, SVP Builders India. “End users were waiting for a reprieve in home loan interest rates. The measures announced by the RBI will be a big help. The benefits will clearly be passed on to the consumer as developers have already started targeting the affordable bracket for the end-user and will further step up their efforts now,” says Jindal.

Clearly, the consumer stands to gain in the wake of the recent RBI measures. So what should be the buyers’ outlook now? Experts say the disadvantage of waiting too long is that one could lose out on best properties as well as on lower rates which will not hold once the market regains equilibrium.

“The reality is that a reduction in interest rates along with a 20-25% correction in property rates is an ideal situation and the prospective home buyer should take advantage of this situation as the resulting EMI will be a lot more affordable,” adds Sandhir.

In fact, people familiar with the trends feel that the present situation is ideal for a buyer looking at a value buy. “The situation today is More Pictures buyer-friendly, especially for the end-user group. Developers are keen to sell their projects and hence are offering the best value deals.

Banks are also supportive in lending and extending various long-term schemes. The market is good for projects which are ready-for-possession. One can get attractive deals at best locations as the developers want to sell their unsold stock,” asserts Punit Beriwala, MD, Vipul.

However, even though end-users have incentives right now to buy, real estate players still have challenges to face. For most realty firms facing an acute credit crunch, the recent initiatives mean a limited impact. Rohtas Goel, CMD, Omaxe, feels that the current move will solve some of the current liquidity crisis for many real estate companies.

“Restructuring of loans will alleviate the liquidity problem for the moment. That I think is a positive development for many of the struggling real estate companies today. It is a small point but it is a significant point.”

Beriwala, too, is cautious and feels the benefit to the real estate sector is yet to be seen. “Much depends on the banks to announce a policy change to ensure that this extra money is pumped into the realty sector by making funds easily available to developers. We also look forward to banks reducing the home loan rates which will bring the customers back to the market.”

The housing sector is one of the most significant sectors in the economy. These steps, no doubt, will offer some relief to those looking at value-for-money buys. With the latest RBI initiatives, the market is in all likelihood expected to see a revival of demand in the near future.

Source : http://economictimes.indiatimes.com/Features/The_Sunday_ET/Property/RBIs_measures_can_boost_demand_for_property/articleshow/3834335.cms

Indian Property Firms Set Their Sights on NRI Investors

With domestic sales suffering as the rupee loses value against the dollar, property developers in India are looking outside the country for an alternative market. They are hoping to tap into a growing niche within overseas property investment Non-Resident Indian investors.

NRI or Non-Resident Indian refers to a person of Indian origin either born outside India or living in another country, or an Indian citizen who has emigrated. NRIs are an obvious target for investment, as they may well wish to retain links with their homeland, or return there in the future as permanent residents. Many are taking advantage of current incentives by employers to return to India; Motorola is one such company offering a special programme.

“Many NRI residents in Hong Kong, the US, UK and the Gulf have substantial assets and are keen to invest in rental properties in India,” said Nubricks.com international property analyst Chintan Mahida.

Recent reports suggest that the value of NRI investment has already increased by up to one quarter in six months. This is likely to increase as, with the falling value of the rupee, these buyers can currently obtain around 20% more for their money and are thus being offered a great incentive to invest now.

Omaxe is one of the major developers planning to exploit the NRI market, offering investment in both residential and commercial property in cities such as Bangalore, Chennai, Hyderabad and Delhi. They say ‘NRIs have played a very important role in transforming the Indian real estate market’, commenting that such buyers have been able to take advantage of the opportunities offered by the opening-up of the Indian economy. Other companies, such as Maa Properties in Hyderabad, are also targeting this market. On its website, Maa offers information for NRIs and PIOs (Persons of Indian Origin, foreign citizens with Indian ancestors at least four generations removed).

A further change being made to enable more PIOs to buy in India is the alteration of the rule which previously only allowed them to purchase property if either their grandfather or father were Indian citizens. This is being amended to give those PIOs with a mother or grandmother with Indian citizenship the right to buy.

These changes from the Ministry of Overseas Indian Affairs are intended to revitalize the market. Although India´s location means that it is unlikely to suffer the ´foreign invasion´ seen in some European countries, the new rules should ensure that only people with genuine connections to India will be able to purchase property, while still bringing in new investment.

Source  : http://www.nubricks.com/archives/1485/indian-property-firms-set-their-sights-on-nri-investors/

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

Omaxe, the Indian Real Estate Developer Giant Targets NRI Buyers

The recent depreciation of the rupees against the dollar has been diverted Indian real estate property developers towards the NRIs living in various places of globe. This may also be the ideal time to invest in property in India because the recent slowdown may become 20 percent benefit for the NRIs.

Delhi, India, November 29, 2008 –(PR.com)– With the rupee depreciation with the dollar, Omaxe and other property developers in India plan to target the NRI buyers. NRIs can get a good deal now because of the recent depreciation of the rupees against the dollar. This would benefit NRI purchase around 20 percent. Property investment in India at this time could be a good deal. Prices have declined by 15 to 20 percent in last few weeks.

The Omaxe Real Estate Developer, one of the leading companies in this field is offering NRI property investment like multiplex, shopping complex to 2BHK apartments in Bangalore, Pune, Calcutta, Chennai, Hyderabad and already sky high Mumbai and Delhi. It is one of the top real estate developers which has a lot of experience and is committed to achieving excellence. They also have a separate interface for Non resident Indians (NRIs). Other features the company offers are: email-based subscription for newly launched projects. This keeps the readers up-to-date with the latest news regarding the real estate infrastructure and current sales in their specified city based on their budget-based selection and choice of accommodation/housing.

Omaxe India Ltd claims to be the first ISO 9001 certified company in northern India, which develops real estate in Northern, Central and Southern India. As their line says, ‘Turning dreams to reality’, the company does the same with their state of art designs which are similar to the international standards. The company hosts experts in the field who give their best to all their projects. Over a period of time Omaxe have executed a number of high profile projects for multinational clients. NRIs have played a very important role in transforming the Indian real estate market. Opening-up of the Indian economy provided them with new opportunities and they have shown a great deal of confidence in the changed set up.

This is the time when people recognize the importance of selecting the right place to invest. According to Mr. Girish Garg, Head of Marketing, “our site has always been at the forefront for the way our projects have been dealt with. Each one of them has a unique feature about it, which best describes its utility. We use the best materials in construction, which ensures safety and longevity to the buildings. And a lot of research and planning goes into each of our projects, so as to guarantee client satisfaction.

Most of our clients have given us repeat projects, impressed by our work”. With their numerous projects running simultaneously they have proved that they have carved a niche for themselves in the real estate sector. For more information on their ongoing and forthcoming projects one can log on to www.omaxe.com

Source : http://www.pr.com/press-release/119228

Omaxe cuts some prices, other realty cos hold firm

NEW DELHI, Nov 21 (Reuters) – Real-estate firm Omaxe Ltd (OMAX.BO: Quote, Profile, Research) has cut prices of some of its properties for some customers by up to 5 percent, its chairman said on Friday.

Rohtas Goel, who is also the president of the National Real Estate Development Council, said the council had recommended similar cuts to its members.

But member firms said they were not considering any cuts for now.

Demand for real estate in India has slumped on high costs of home loans and on weakening economic activity. Analysts say prices have to come down before demand revives.

“There is a 1-5 percent discount on the basic sale price … from today, depending on the project and location,” Goel said. “It is not in all projects.”

The cuts will be for customers who pay on the basis of the progress of construction at the project, he said. Goel declined to say what percentage of their projects would be sold at the lower rates.

NAREDCO counts among its members India’s top listed realty DLF (DLF.BO: Quote, Profile, Research), Unitech (UNTE.BO: Quote, Profile, Research), Omaxe, Parsvnath Developers (PARV.BO: Quote, Profile, Research) and Ansal Properties and Infrastructure Ltd (ANSP.BO: Quote, Profile, Research).

A DLF spokesman said prices could come down further only if input costs fell.

Parsvnath Chairman Pradeep Jain said he had not received any letter from the council and was not mulling price cuts. “It is a little difficult to say as a forum to any developer to cut prices,” he said over the telephone.

Ansal’s Chief Executive Anil Kumar said the firm had not taken a decision yet. “We may consider it for new projects,” he said over the telephone.

Source : in.reuters.com

Realty lobbies toe FM line, to drop prices

New Delhi: Claiming they are responding to Union finance minister P. Chidambaram’s request that builders lower prices to generate demand for real estate, two industry lobbies formally called on their members to reduce prices.

The National Real Estate Development Council, or Naredco, asked its members to give price “discounts” of up to 15% to revive sales, two days after the Confederation of Real Estate Developers Association of India, or Credai, told its constituents “to make every effort in lowering prices” across the country.

The industrywide move potentially gives some leverage to builders who were facing what were inevitable price cuts in a stalled industry sitting on large inventory and finding no buyers, and in danger of running out of cash.
“In the overall scheme of things, developers are also probably giving a signal to the finance minister that we are doing something and the government also needs to do something,” said Sanjay Verma, executive managing director of the Indian unit of real estate consultant Cushman and Wakefield Inc. “The only way cash flows will come into the real estate industry is by enabling transactions to happen.”

Indeed, “Some developers across the country have already reduced prices. Credai now requests all its members to do the same,” the association had said in a statement.

The group claims membership of around 3,500 developers.
Naredco has asked its 500 members to cut prices by reducing costs, cutting profit margins, reducing advertising and brokerage costs.
Developers such as Ansal API Ltd, Omaxe Ltd, Assotech Ltd and DLF Ltd have already agreed to reduce prices, while Bangalore-based Sobha Developers Pvt. Ltd has promised to consider it, Naredco’s president Rohtas Goel, also chairman and managing director of Omaxe, told reporters. “On (many) existing projects the prices have already fallen by 20-40% across the country,” he said.

The council has asked its members to give a discount of 1-5% on existing projects to customers paying on time, 5-10% discount on new projects and 10-15% price reduction in affordable housing projects with prices that start from Rs3 lakh and run to Rs20 lakh an apartment.

On Tuesday, Chidambaram had asked companies, including real estate firms, to cut prices and revive sales. “We respect the concerns of the finance minister and are ready for price cuts,” said Goel.

Meanwhile, Naredco has asked for a reduction in the interest rate on home loans by at least 3-4 percentage points to 7%. The council has also asked for rescheduling of bank debt to developers with a moratorium of one-two years. The industry body also asked for an easing of external commercial borrowings and foreign direct investment rules.

Source : www.livemint.com

Prices of new houses to fall by 5-10%

NEW DELHI: That house you’ve been longing for may be within your budget soon. Real estate developers have decided to cut prices on the houses they
sell by 5 to 10%. Faced with a situation in which buyers had become scarce, two major bodies of builders announced the proposed cuts on Thursday.

Developers feel that the announcement of cutting the price will help satisfy the general perception in the market place that real estate prices should fall and hence bring buyers who were adopting a wait and watch attitude into the market.

“At present, end users are waiting for the prices of real estate to fall to enter in the market. The decision to cut prices should meet their demand and make them purchase houses,” said Rohtas Goel, president of the National Real Estate Development Council (NAREDCO) and CMD of Omaxe.

Kumar Geram chairman of the Confederation of Real Estate Developers’ Association (CREDAI) and CMD of Pune-based Gera Properties, said the association has urged and advised its 3,500 member developers to make every effort to lower prices to the levels possible. He said this would have a desirable effect on demand.

Interestingly, the rate cut announcement came just two days after the industry had dismissed finance minister P Chidambaram’s plea for lower prices as unrealistic. It suggests that developers realise they must appear to be bowing to the popular expectation if they are to see a revival in the housing market.

Developers say that the prices of premium products, which cost over Rs 3,000 per sq feet, will be lowered by a minimum of 10%. That means, prices of a typical three-bedroom apartment of over 1,500 sq feet will come down from about Rs 50 lakh to Rs 45 lakh. . Prices of apartments that cost over Rs 1 crore currently would come down by at least Rs 10 lakh.

The cost of affordable houses, in the range of Rs 20 lakh to Rs 40 lakh, will see a more modest cut in the range of 5%. Sunil Jindal, CMD of Delhi-based developer SVP, said these houses are already priced so low that there is not much scope to cut prices further. He pointed out that in the suburbs of the NCR and some other metros like Bangalore and Chennai, apartments are launched at around Rs 2,000 per sq feet. In such apartments, he said, builders are working on very thin margins. Yet, to lure customers, the builders are willing to give a discount of 5% on the printed price.

The willingness to suffer a cut in what they claim is already a thin margin can be explained by economic rationale. A senior builder said that because of the high interest rate, the holding cost for a builder is in the range of 20% per annum. Besides, they need funds to repay banks, so that they are not declared defaulters. To avoid such a situation, builders are under pressure to sell to generate cash. This is forcing many developers to cut prices to close a transaction.

Another factor, though a minor one, is that the cost of steel and other inputs has declined by 20 to 25% in the last three months. This, developers estimate, translates into a reduction of about Rs 50 per square feet in the cost of construction.

In fact, most developers have already been giving 5% to 10% discounts in the last one month. Thursday’s announcement merely makes what was happening in individual negotiations official, said a builder.

The country’s largest builders, DLF and Unitech, said they had already cut prices in new projects by up to 10% to counter the market slump. “We are in favour of reducing prices. Because of the demand and supply situation, prices are automatically going down,” said DLF chairman KP Singh. “Demand is much less than supply, which is driving prices down,” he said.

However, builders feel that with the cost of land not coming down, they will not be in the position to cut prices any more. A senior builder said current prices are bordering on a distress sale situation. Any further cut will developers go into the red, he claimed.

Source : Timesofindia

Realtors still stuck in house of correction

NEW DELHI: The RBI’s rate cuts alone may not stimulate the sluggish residential market. Experts feel that developers may have to further cut prices to bring buyers back into the market. Meanwhile, as a result of drastic fall in home sales and higher capital and construction cost, most developers have reported decline in revenue in September quarter.

“We are not very sure, but hope that RBI rate cuts will encourage banks to lower interest rates for home loans. A lower home loan rate will increase home buyers’ interest in the market,” says Omaxe CMD Rohtas Goel.

“The lower rates may enhance enquiries from potential home buyers, but may not necessarily result in higher number of transactions,” says international property advisor DTZ director Abhilash Lal. Adds Centrum Broking real estate analyst Rupesh Sankhe, “Affordability is the major issue for any home buyer. Today, the affordability is much lower compared to 2003, when both interest rates and property prices were lower. The property prices too need to come down along with interest rates if people are to be lured to realty market.”

According to an analysis, a buyer’s decision depends 60% on interest rates, 30% on property prices and the rest on sentiment or other unexplained factors. Now, home loan rates are expected to come down, bringing down EMI for buyers, but would still remain high compared to 2003-04 level. Therefore, property prices, which have gone up almost thrice in most markets in the past five years, also need to rationalise. “We earlier expected property prices to correct by 30-35%. Now with expected lower mortgage rates, a correction of even 20-25% may have the desired impact on home buyers,” says Mr Sankhe.

Residential market has seen price correction in the past few months to the tune of 20-25% in several pockets, but sales haven’t picked up. Besides higher interest rates and property prices, global financial turmoil, stock market crash and fears of job cuts too are worrying home buyers.
The squeeze in the real estate market is now getting reflected in realtors’s earnings figure. India’s largest real estate developer DLF reported a 4% decline in net profit at Rs 1935 crore. The second largest realty firm, Unitech, reported 3% decline in sales at Rs 983 crore and 12.6% lower profit at Rs 358 crore. Parsvnath’s sales fell 45% to Rs 217 crore, and profit dropped 78% to Rs 22 crore. Omaxe’s revenue declined 70% to Rs 204 crore and profit fell 87% to Rs 20 crore.

The biggest issue for realty firms today is liquidity crunch, as sales have dried up and banks are refusing to lend while private equity funds have slipped into wait-and-watch mode. “Rate cuts may not actually help ease liquidity situation for the real estate firms. Unless RBI relaxes lending norms to real estate, nothing is going to change,” says Mr Lal of DTZ.

Source : Economictimes

Realtors seek relief from PM

MUMBAI/BANGALORE: After financial institutions and aviation companies, it’s now the real estate sector’s turn to approach the government for a relief package. Realty industry bodies such as the National Real Estate Development Council (Naredco) and Confederation of Real Estate Developers Association of India (Credai) are ready to approach Prime Minister Manmohan Singh with their wish-list next week.

Rohtas Goel, vice president of Naredco, and chairman and managing director of Delhi-based Omaxe Ltd, said, “Our main demand is that affordable housing should be withdrawn from section 80 IB (10) and moved to section 80 IA. The government has to make houses less than 1,500 sq ft in area tax-free. Even the stamp duty should be waived for affordable housing projects,” Goel said. Naredco has been set up under the housing and urban poverty alleviation ministry.

Liquidity crunch is a big problem plaguing developers. “Our second demand is that banks restructure the debt they give to builders and lower the rate of interest,” Goel added.

Credai, a real estate body that has 10 member associations from various states, has already dashed off a letter to the PM seeking a meeting.

Lalit Kumar Jain, VP, Credai, said, “We want the government to instruct banks to take proactive measures to create liquidity in the market. We also want the government to do away with taxes it has imposed on developers for building residential properties.” Jain said a developer pays 35% tax for the development of any residential project. Realtors want these taxes cut to zero.

Banks are lending to developers at an interest rate of 18-20%, making loans for construction expensive. Jain said, “Exactly four years ago, interest rate was at 9.5%. Now, banks are shying away from giving us loans. Where will developers take loans from? We want the government to cut interest rates to below 12% so we can get funds.”

Naredco has prepared a 16-page report that will be sent to the government in December. Realtors are hoping that the report is taken into consideration during the next budget.

Thanks to the global financial turmoil, realty stocks have taken a pounding and developers are unable to sell the projects in the premium segment.

Developers say they need government intervention to make housing affordable.
An official with a major north-based developer that has expanded its footprints to different states said, “We have been seeking support to build affordable housing projects but neither the government of Maharashtra nor Uttar Pradesh and Jharkhand has come forward to help.”

Omaxe’s Goel, however, has received positive response from the government of Punjab for the company’s affordable housing project. “The Punjab government is ready to relax the stamp duty for our affordable housing project. We are expecting a positive response from other governments too,” he said.

Omaxe has launched a 100% subsidiary, National Affordable Housing and Infrastructure Ltd (Nafhil), for 10 lakh such homes in tier II and III cities. According to government data, the country has a shortage of 25 million homes in the affordable housing segment.

Among other demands are interest-free loans up to Rs 5 lakh for members of the economically weaker section (EWS) so such people can buy homes. This section is already on the Congress-led United Progressive Alliance’s radar as it approaches general elections and seeks EWS votes. A senior official from the housing ministry said the government would soon announce a plan to give EWS home loan seekers a cut of 5% in prevailing interest rates.

Source – DNA India

Real estate developers confident of fund flow

Real estate developers are carrying on with their projects, unfazed by the global financial turmoil that is expected to hit the Indian real estate sector. They remain confident about flow of funds, despite the prevalent crunch.

“Funding (for our projects) will not be an issue. We are accepting funding from a lot foreign agencies, some of them being HSBC, HDFC and ILFS,” said Rakesh Jain, executive director, Ansal API. He however expects funds to shrink if the RBI hikes interest rates further.

Vipin Agarwal, executive director, Omaxe Ltd, however, is a tad more optimistic. “Different countries are taking measures to bail out their banks. As a result, banks are going to be refurbished with liquidity. There is no reason why this liquidity will not flow into Asian countries,” he said.

Sharing the optimism, Shobhit Agarwal, joint managing director, capital markets, Jones Lang LaSalle Meghraj said that many new funding agencies will now decide to operate in the market. He said, “Some PE funds exercised caution at a time when others went overboard with doling out mortgage loans. Once these conservative funds come into the field, market dynamics will change once again.”

Incidentally, Indian realty stocks tumbled by almost one thousand points after the buyout of Merrill Lynch and collapse of Lehman Brothers, the world’s third and fourth largest investment banks respectively. While Jain thinks that all realty operators are trying to figure out ways to cushion their stocks from impact of the global meltdown, Agarwal believes in the philosophy of what goes down also comes up.

“Realty stocks will go up,” he said. Jain added that stocks are going down mainly because of negative sentiments and that the fundamentals of the sector are strong.

Both Jain and Agarwal claim that their order book is “very healthy”.

“We have a pending order of 1.5 billion houses in the mid-income segment,” said Agarwal. He expects mortgage rates to go down, taking a cue from inflation, which is currently on a downward mode.

Both Ansal API and Omaxe Ltd are focusing on MIG housing. The ongoing projects of Ansal API include Sushant City-Jodhpur and Jaipur, Sushant Golf City-Lucknow, among others.

 

Mahindra Lifespaces mulls entering affordable housing segment

MUMBAI: Mahindra Group’s real estate arm Mahindra Lifespaces is likely to join the ‘affordable’ housing bandwagon in a year, aiming the middle-income group.

“We are looking at opportunities to enter into the affordable housing sector, but it is still at the discussion stage. It may take one year to concertise the plan,” Mahindra Lifespaces Managing Director and Chief Executive Officer Pawan Malhotra told PTI here.

Affordable housing is making waves in the realty sector due to high cost of property, dearer home loan and its availability, high inflation and the huge gap between demand and supply.

A mapping of the supply trend of housing from private developers done by Ernst & Young shows that 70-80 per cent of it caters only to the higher-income groups.

In contrast, the Planning Commission expects that the housing shortage in the country to go up to 26.53 million units over the next four years. Of the total housing shortage, economically weaker sections and low-income groups account for about 99 per cent of the shortfall in India.

Thus, anticipating volumes to make up for lower margins, a number of recognised real estate players, like Puravankara and Omaxe Ltd, have already plunged into the new asset class of the real estate sector.

In addition, Matheran Realty, Indu Projects, Shriram Properties, Jain Heights and Structures, Ansal Properties and Shapoorji Pallonji among others are either entered or are in the wings to enter into the creation of affordable housing.

Omaxe to build one million affordable homes

Real estate firm Omaxe Ltd is looking for business partners to build one million ‘affordable’ homes in different locations in the country over the next eight years. The company intends investing Rs 500 crore in the venture. The proposed units would be of 300 to 1,000 sq ft, in the price band of Rs 2.99 lakh to Rs 9.99 lakh. The township projects of 100-plus acre, primarily in two and three-tier cities will consist of multiple buildings of ground-plus-two floors.

Speaking on the sidelines of a FICCI conference on real estate here on Thursday, Mr Rohtas Goel, Chairman, Omaxe Ltd, said the company would work in association with local ‘business partners’ in each of the locations, whose primary responsibility would be to buy land on behalf of the company, liaison, and market the units, in addition to bringing in investment for the land. “We have received over 1,000 applications from prospective partners in the last few days,” he said. The partners would be compensated in terms of commission for each of the responsibilities. Investors in land would get an assured return of 20 per cent on the property value (not project value).

Detailing a self-sustaining model, wherein land investment is taken care of, Mr Goel said the construction would be executed by Omaxe Construction and Infrastructure Ltd. The initial funding of Rs 500 crore would come from the parent company, which could be from either internal accruals or through debt, he said. Construction cost has been pegged at Rs 600 a sq ft, and the company would not exceed the floor area ratio of one, as any excess construction would call for additional expenditure, with the company keen in ensuring floor space index cost per sq ft at Rs 100.

RBI move adds to real estate sector’s woes

New Delhi : The Reserve Bank of India’s decision to raise repo rate and cash reserve ratio is expected to add to woes of the real estate sector.

The realty industry — which is already smarting under a sluggish demand and price correction feels that RBI’s move would tighten the liquidity crunch for developers, and dampen end user demand by putting pressure on home loan rates.

“The hike in repo rate and CRR will negatively impact real estate sector. The hike would mean flow of money to the sector would be tighter than before.

The developers will now have to look towards other sources of funds, which could be on higher rates thus impacting the cost-benefit ratio of each company.

However at Omaxe we may not feel slowdown in the company’s investment plans and they stay as announced earlier,” Mr Sunil Malhotra, Vice-President (Finance), Omaxe Ltd, said.

Delay projects

According to Mr Sanjay Verma, Executive Managing Director (South Asia) of Cushman & Wakefield, the credit policy has set the stage for hardening of interest rates.

“This is bad news for developers. Already, the credit crunch is hurting project financing, which is leading to delays in residential and commercial projects. Projects could now get delayed further,” he said.

Real estate players are currently grappling with dwindling sales, correction in land prices, tepid demand, and rising input costs, even as they face a liquidity squeeze. In such a scenario, if banks hike the interest rates on home loans further, the residential demand is likely to get hit, said industry observers.

Mr Pradeep Jain, Chairman, Parsvnath Developers Ltd, agreed that increase in cost of borrowing (for developers) would escalate the cost of the real estate project — the burden would ultimately be passed on to consumers. “The cost of borrowing goes up not only for builders but for all ancillary and input industries as well, leading to a higher price tag for the real estate product.

Moreover, it has an impact on home loans,” he said, but pointed out that foreign direct investment still remained a viable option for the players to raise capital.

Mr Jain also opined that end users or first time home buyers are unlikely to get deterred by a marginal hike in the home loan rates.

The board consensus in the industry is that increase in home loan rates would certainly have a detrimental effect on the mid and upper-end segment of home buyers. Mr Kunal Banerji, President, Marketing, Ansal Infrastructure and Properties Ltd, said “Although, we do not predict any drastic change in the overall robust demand for quality housing at this stage, there could be a long-term effect on the speed of the overall growth, particularly in the residential real estate category.”

Echoing the sentiments, Mr Ajay Mangal, Director (Finance), Uppal Group, felt that demand will surely be hit once the home loans become costlier.

Omaxe to sell pie to PEs in mass-housing project

Omaxe Ltd, the New Delhi-based realtor, is in “advanced talks” to raise funds for its ambitious affordable housing project from private equity investors, a source close to the development said.

However, the financial stake sale plan could not be ascertained immediately Omaxe did not immediately comment on the issue. “Omaxe is in talks with some PE players to raise money to partly fund its affordable housing project,” a source on condition of anonymity told DNA Money.

“You can expect something new to happen by end of August,” the source said. Citi Group, Lehman and two smaller private equity funds are in talks with the realtor for the investment, according to the source.

In May, Omaxe said that it would build 10 lakh affordable homes for low-income consumers in tier-II and -III cities. Industry estimates put the total investment of Rs 80,000 crore for the complete project.

“They need to dilute significant proportion of their; stake in the project… at least much more than Rs 1,500-Rs 2,000 crore according to my estimates,” an analyst with an international brokerage said on condition of anonymity. The analyst has a “sell” rating on the BSE-listed stock.

Another source close to the development said the firm is in “serious talks” with the state governments of Punjab, Uttar Pradesh, Madhya Pradesh and Rajasthan for the project. “I am expecting affordable housing policy by at least one state government in one-two months… and then some equity investment would follow,” the source said. The realtor may also look at raising funds from agencies like National Housing Board in the project.

Now, Real Estate Developers jumping into Hospitality

A Swedish massage, a vigorous Kerala head rub or a good old steam bath — developers are offering all this and more at picture perfect destinations that are a good trek away from cities.

After making luxury villas and apartments in the heart of town, property firms are now wooing people to exotic spas and resorts.

Redefining business: A 3D rendition of the spa being built by Brigade group in Chikamagalur. Real estate developers are looking at several luxury verticals to expand their presence across the country.

From luxury to leisure, real estate companies such as Brigade group, Omaxe Ltd, Prestige group, Sobha Developers Ltd and Value Designbuild Pvt. Ltd, are entering into the leisure segment to build health resorts and spas in the backwaters of Kerala or amid the plantations of Chikmagalur in Karnataka.

“The huge demand and scope of business in the leisure and hospitality segment are the major drivers for builders like us to get into this vertical,” says Vineet Varma, chief executive officer, Brigade Hospitality Services Pvt. Ltd, a fully owned subsidiary of Bangalore-based Brigade group. “Also, there’s only so much you can do in the residential and commercial sectors and new verticals like these complete our portfolio.”

Brigade group is coming up with a Rs100 crore premium health spa resort in the quiet coffee plantations of Chikmagalur, about a four-hour drive from Bangalore.

While the group will develop the property, it has teamed up with Singapore-based hospitality brands Banyan Tree and Angsana to operate it.

The leisure segment has attracted not just top-of-the-line developers but also new entrants.

Value Designbuild, a five-year-old real estate company based in Bangalore, is also set to develop a spa along with leisure homes.

The company has earmarked a plot of land in Srirangapatnam (Karnataka) for a spa and plans to build high-end, leisure homes in Coorg in Karnataka.

“Spa and health resorts are a south India phenomenon particularly in the Kerala belt where Ayurvedic health treatments are a rage with domestic and international travellers. For us, a spa project is to attract weekend travellers raring to get away from the city,” said Koshy Varghese, managing director of Value Design.

Another Bangalore company, Sobha Developers Ltd, has a full-fledged Ayurvedic spa offering the traditional Kerala Ayurvedic massages, herbal baths in its first integrated township Sobha City in Thrissur in Kerala.

“Tier II or smaller cities offer a lot of variety for real estate development and we want to capitalize on the growing demands for our consumers. With the middle class getting richer, it is imperative to give them choices with projects like these,” says J.C. Sharma, executive director of Sobha Developers.

A lot of developers are looking at spas and resorts because it is a revenue generating business line, says Akshay Kulkarni, Cushman and Wakefield Inc.’s, a property consulting firm, director (hospitality) for South Asia. “Residential developers normally develop, construct and exit a project. A residential asset does not generate consistent revenues whereas spas and resorts do.”

It’s not just south-based builders who are diving into resorts.

Companies such as Delhi-based property developer Omaxe Ltd are also taking active interest in such ventures. Omaxe has tied up with Thai Privilege Spa, often rated by some among the world’s best spa chains, to build spas in the company’s luxury residential projects.

Initially, the agreement is to establish and operate 10 spa outlets of Thai Privilege Spa in Delhi and north India.

Omaxe has also partnered with tennis player Leander Paes-promoted Leander Sports, a wellness concept design company, to design and manage fitness facilities in five of the company’s townships in north India.

Leander Sports will provide the concept and design of health clubs, spas, meditation centres, yoga cells, gym and sports complexes in the company’s townships.

“People living in high-end apartments aspire for a better living,” says Arvind Parekh, director, Omaxe. “There are people who even go on a holiday to Bangkok just to get a spa treatment. There is a demand for spas. Therefore, we thought of providing spas within the townhsips itself.”

Analysts say that though there is a substantial demand for such developments, spas and resorts would be commercially viable only in larger developments when combined with a hotel, retail space or when it is located in a large township development.

Naresh Dandapat, regional director (south) of Knight Frank India Pvt. Ltd, says he believes the resort business in India has not proved to be a success story over the years.

“It is a relatively new phenomenon here and it is too early to say whether it turns out to be a profitable venture for developers in the long run,” Dandapat said.

“The best way for developers to do it now is to tie up with an international name which gives the project great brand value.”

Parekh agrees, “Running a spa is a very specialized business. There are different types of treatments available at spas these days and to provide an international experience you need to have special facilities and trained personnel. This is where an international company can add value.”

Brigade, for instance, is developing a spa at the upcoming Sheraton Bangalore and has signed a management contract with the Angsana Spa brand.

Prestige group, together with hotel chain Marriott group, is developing a Rs1,000 crore spa and golf resort in Nandi Hills, just ouside of Bangalore.

Resort and spa projects in smaller cities towns such as Periyar in Kerala or Manesar in Haryana are location-specific ventures, said Sudeep Jain, executive vice-president of Jones Lang LaSalle Hotels, the hospitality division of property consultant, Jones Lang LaSalle Meghraj.

Dedicated real estate funds are eager to support such venspa and resort ventures, notes Pranay Vakil, chairman of Knight Frank India.

Real estate cos diversify into spas and resorts

Analysts say that despite existing demand, spas and resorts would be viable only in larger developments. A Swedish massage, a vigorous Kerala head rub or good old steam bath developers are offering all this and more at picture perfect destinations that are a good trek away from cities.After making luxury villas and apartments in the heart of town, property firms are now wooing people to exotic spas and resorts.From luxury to leisure, real estate companies such as Brigade group, Omaxe Ltd, Prestige group, Sobha Developers Ltd and Value Designbuild Pvt. Ltd, are entering into the leisure segment to build health resorts and spas in the backwaters of Kerala or amid the plantations of Chikmagalur in Karnataka. A lot of developers are looking at spas and resorts because it is revenue generating business line, says Akshay Kulkarni, Cushman and Wakefield Inc.’s, a property consulting firm. Residential developers normally develop, construct and exit a project. A residential asset does not generate consistent revenues whereas spas and resorts do. Dedicated real estate funds are eager to support such venspa and resort ventures. Developers agree there is a demand for such high-end products, and are looking at different locales in India.

Ace Tennis Player joins hands with a Realty Player

Ace tennis player Leander Paes today joined hands with real estate developer Omaxe Ltd to design and manage fitness centers in latter’s five townships in North India. ‘Leander Sports’, the company promoted by Paes, today signed a memorandum of understanding to provide the concept and design of health clubs, spas, meditation centers, yoga cells, gyms, sports complexes in the upcoming five townships of the developer. According to the MoU, ‘Leander Sports’ would design and manage the health and sport centers in Omaxe’s integrated townships coming up at Ludhiana, Indore, Yamuna Nagar, Noida and Faridabad. It is not a revenue sharing tie-up, but ‘Leander Sports’ would only charge a consolidated fee for all the five projects, the ace tennis player added.“This partnership would help us in providing healthy living designs to our residents. Though we have tied up only for five projects, but we are looking forward to other projects also,” Omaxe Chairman and Managing Director Rohtas Goel said. Besides, ‘Leander Sports’ is also constructing two sports centers- one at Bangalore in 20 acres of land and the other at a 20-acre area in Pune, Paes said.

‘Leander Sports’ ties up with Omaxe

Ace tennis player Leander Paes today joined hands with real estate developer Omaxe Ltd to design and manage fitness centers in latter’s five townships in North India.

‘Leander Sports’, the company promoted by Paes, today signed a memorandum of understanding to provide the concept and design of health clubs, spas, meditation centers, yoga cells, gyms, sports complexes in the upcoming five townships of the developer.

“This is an extension of my new career, where I will provide my expertise to design this health centers and sports fields for hockey, golf and tennis courts. It will help in providing the next generation an opportunity to keep fit and healthy,” Paes told reporters here.

According to the MoU, ‘Leander Sports’ would design and manage the health and sport centers in Omaxe’s integrated townships coming up at Ludhiana, Indore, Yamuna Nagar, Noida and Faridabad.

It is not a revenue sharing tie-up, but ‘Leander Sports’ would only charge a consolidated fee for all the five projects, the ace tennis player added.

“This partnership would help us in providing healthy living designs to our residents. Though we have tied up only for five projects, but we are looking forward to other projects also,” Omaxe Chairman and Managing Director Rohtas Goel said.

When asked if both the companies would have an exclusive tie ups for Omaxe’s all townships, Goel said: “We definitely want to extend this association with Leander to all our 50 township projects.”

Besides, ‘Leander Sports’ is also constructing two sports centers- one at Bangalore in 20 acres of land and the other at a 20-acre area in Pune, Paes said.