Plans to conserve Gole Market as a heritage building means 27
establishments located there will now have to shut shop.
On Wednesday, shopkeepers of Gole Market protested the move to evict them. They claimed they had not been provided with alternative space to shift. The shop owners have demanded that alternative space be provided to them which were similar in size and of same rent as the ones leased out to them in Gole Market. Some of the well known establishments in the area are Galina Restaurant, Gujarat Fishery and Sagar Restaurant.
"Gole market is a heritage building and we want to restore it. Hence no commercial activity can be allowed there. Even the traffic department has said a market there disturbs traffic circulation besides adding to nuisance value for local residents. We might build a small museum there in the future but giving the market back to the traders is out of question. The traders want a new site at the same rate which is not possible. We have already taken possession of eight shops,'' said a senior NDMC official.
Said Narayan Shamnani, president of Gole Market Merchant Association: "NDMC had promised to rehabilitate us elsewhere. But now they are asking us to vacate without providing us with alternative space. We will not accept this. We have been functioning from Gole Market for over 60 years now. If need be we will organise a protest march at Jantar Mantar on Thursday.''
He added: "In reply to an RTI filed by us, NDMC in 2006 had said it was not dislocating us but proposing to shift each shopkeeper to a vacant plot available in the complex for a period of 54 weeks. Afterwards, we were given alternative spaces to shift out in. But the sizes of shops were so small and these shops were allocated in areas like a subway in Palika Bazaar or Sarojini Nagar, where it is impossible to open up restaurants or meat shops. When we did not accept their alternative, they sealed four shops.''
Traders in Gole Market pay anything between Rs 200 and Rs 2000 as rent for prime rental property. Said Raj Kishore Bansal, who owns Royal Store: "My family has been functioning from here since 1937. We can't just be expected to vacate and leave."
Due to the dilapidated state of Gole Market, the building had been declared dangerous. One of Delhi's oldest surviving colonial markets, it was constructed in 1912 and unauthorised construction along with lack of proper maintenance had led to part of the heritage beauty of the building being destroyed, said NDMC officials.
Apart from facade restoration, NDMC is also planning interior restoration and upgradation of the surrounding structure. The project cost which was initially estimated at about Rs. 6.31 crore has now escalated to about Rs 8.53 crore
Thursday, May 28, 2009
Good NEWS Real estate recovery in next three months: Assocham
ndia's realtors believe the sector will see signs of recovery in the next three months, according to the Associated Chambers of Commerce and Industry of India (Assocham).
A survey report by the industry lobby said 88 percent of chief executives of real estate firms see a quick revival within the next three months as developers shift towards affordable housing and property prices undergo significant correction.
The Assocham Business Barometer report is based on a survey of 25 real estate firms conducted between May 15 and May 25.
The survey report said a whopping 92 percent of chief executives considered affordable housing to kindle demand in the real estate sector, with about 84 percent saying this segment had been least impacted by falling demand.
It said while the luxury housing segment witnessed a demand contraction of over 50 percent, special economic zones (SEZs) by about 40-50 percent, retail space between 30-40 percent and commercial space by 20-30 percent, affordable housing was the most resilient segment seeing a contraction of 10 percent or less.
The chief executives called for sought single-window clearances for all schemes under affordable housing, as is done with SEZ proposals, to bridge the shortfall of about 2.6 crore dwelling units at the earliest.
About 76 percent of the respondents said the stimulus given to the sector through fiscal and monetary measures was inadequate.
Of all policy measures, 64 percent of respondents were of the view that the central bank's move to allow banks to restructure loans to developers has been the most successful in improving liquidity for the real estate sector.
Additionally, 60 percent said a resurgent stock market would be the most prominent source of finance for the sector, while 28 percent thought bank credit was the most viable option.
Hefty funds raised through the qualified institutional placement route in the stock market (exceeding Rs.8,000 crore) along with debt restructuring would allow the developers to address their liquidity concerns.
Mumbai has been ranked as the most saturated in terms of real estate assets followed by Delhi, Bangalore, Chennai, Kolkata and Hyderabad.
A survey report by the industry lobby said 88 percent of chief executives of real estate firms see a quick revival within the next three months as developers shift towards affordable housing and property prices undergo significant correction.
The Assocham Business Barometer report is based on a survey of 25 real estate firms conducted between May 15 and May 25.
The survey report said a whopping 92 percent of chief executives considered affordable housing to kindle demand in the real estate sector, with about 84 percent saying this segment had been least impacted by falling demand.
It said while the luxury housing segment witnessed a demand contraction of over 50 percent, special economic zones (SEZs) by about 40-50 percent, retail space between 30-40 percent and commercial space by 20-30 percent, affordable housing was the most resilient segment seeing a contraction of 10 percent or less.
The chief executives called for sought single-window clearances for all schemes under affordable housing, as is done with SEZ proposals, to bridge the shortfall of about 2.6 crore dwelling units at the earliest.
About 76 percent of the respondents said the stimulus given to the sector through fiscal and monetary measures was inadequate.
Of all policy measures, 64 percent of respondents were of the view that the central bank's move to allow banks to restructure loans to developers has been the most successful in improving liquidity for the real estate sector.
Additionally, 60 percent said a resurgent stock market would be the most prominent source of finance for the sector, while 28 percent thought bank credit was the most viable option.
Hefty funds raised through the qualified institutional placement route in the stock market (exceeding Rs.8,000 crore) along with debt restructuring would allow the developers to address their liquidity concerns.
Mumbai has been ranked as the most saturated in terms of real estate assets followed by Delhi, Bangalore, Chennai, Kolkata and Hyderabad.
The Nevert Tiring Tata co plans infrastructure, real estate project worth Rs 20k cr
Tata Realty and Infrastructure Ltd (TRIL) on Wednesday announced plans to
develop real estate and infrastructure projects, worth Rs
20,000 crore, over the next
three years.
In Mumbai, it is set to bid for the second phase of the 36-km Metro rail - Charkop to Mankhurd via Bandra - in partnership with Mitsubishi, the monorail project as well as the proposed Navi Mumbai airport, said TRIL managing director and CEO Sanjay Ubale.
Ubale said at a news meet that TRIL would also submit bids for the Navi Mumbai railway redevelopment project, the trans-harbour link between Sewri and Nhava and invest Rs 11,000 crore in real estate, including SEZs and mixed development plans across the country. Other investments will include Rs 5,000-crore on roads and Rs 4,000 crore on other infrastructure projects.
The infrastructure company also plans to redevelop bus terminals in tier-2 cities and set up warehousing facilities across the country. On the real estate front, TRIL is currently developing a state-of-the-art 25-acre IT/ITES SEZ in Chennai. The project, costing about Rs 3,800 crore, will also house an international convention centre, the first of its kind in that city.
Two other IT SEZs are coming up in Ahmedabad and Hinjewadi in Pune. In Amritsar, the firm has started developing a 7 lakh sq-ft retail complex. In Gurgaon, it is evaluating a residential and mixed used development on a 35- acre plot for the middle income group.
Ubale said land parcels of Tata group companies in and around Mumbai would be unlocked for development purposes.
develop real estate and infrastructure projects, worth Rs
20,000 crore, over the next
three years.
In Mumbai, it is set to bid for the second phase of the 36-km Metro rail - Charkop to Mankhurd via Bandra - in partnership with Mitsubishi, the monorail project as well as the proposed Navi Mumbai airport, said TRIL managing director and CEO Sanjay Ubale.
Ubale said at a news meet that TRIL would also submit bids for the Navi Mumbai railway redevelopment project, the trans-harbour link between Sewri and Nhava and invest Rs 11,000 crore in real estate, including SEZs and mixed development plans across the country. Other investments will include Rs 5,000-crore on roads and Rs 4,000 crore on other infrastructure projects.
The infrastructure company also plans to redevelop bus terminals in tier-2 cities and set up warehousing facilities across the country. On the real estate front, TRIL is currently developing a state-of-the-art 25-acre IT/ITES SEZ in Chennai. The project, costing about Rs 3,800 crore, will also house an international convention centre, the first of its kind in that city.
Two other IT SEZs are coming up in Ahmedabad and Hinjewadi in Pune. In Amritsar, the firm has started developing a 7 lakh sq-ft retail complex. In Gurgaon, it is evaluating a residential and mixed used development on a 35- acre plot for the middle income group.
Ubale said land parcels of Tata group companies in and around Mumbai would be unlocked for development purposes.
Friday, May 22, 2009
To Overcome slow down Realtors eye state's affordable housing plans
Hit hard by the slowdown, real estate players are now going innovative and trying to partner with the government to beat the low demand. Markets cheer election results
Sectors and stocks to look out for
Pick stocks on fundamentals
Five facts on stock falls
Short-term plans are safe bets
Real estate players are looking to tap the 4.33 lakh people, who were not allotted houses in the MHADA scheme and have approached the government with a proposal where they can cater to these potential buyers.
The Builders’ Association of India (BAI), which includes 10,000 real estate players throughout India, has written to the chief minister of Maharashtra requesting him to appoint MHADA and CIDCO as the nodal agencies for carrying out projects under the controversial Slum Rehabilitation Authority (SRA) scheme. Only 3,683 of the 4.33 lakh applicants were allotted houses in the random selection on Tuesday.
In a letter, a copy of which is with ET, BAI asked for MHADA and CIDCO to be appointed as the “official agency for development” for executing SRA projects. “These agencies could offer free rehabilitation component houses to slum dwellers by constructing multi-storied building as already provided in the SRA,” the letter added.
“While, on one hand, there is a low demand due to the slowdown, there are over four lakh buyers, who are willing to shell money to buy houses,” said Anand J Gupta, general secretary, BAI.
Under the BAI proposal, the government and the real estate players can come together and form a JV and accommodate these potential buyers. If the proposal is accepted, it is believed that the real estate players, who are going through quite a rough patch for a while now, would tend to benefit.
Sectors and stocks to look out for
Pick stocks on fundamentals
Five facts on stock falls
Short-term plans are safe bets
Real estate players are looking to tap the 4.33 lakh people, who were not allotted houses in the MHADA scheme and have approached the government with a proposal where they can cater to these potential buyers.
The Builders’ Association of India (BAI), which includes 10,000 real estate players throughout India, has written to the chief minister of Maharashtra requesting him to appoint MHADA and CIDCO as the nodal agencies for carrying out projects under the controversial Slum Rehabilitation Authority (SRA) scheme. Only 3,683 of the 4.33 lakh applicants were allotted houses in the random selection on Tuesday.
In a letter, a copy of which is with ET, BAI asked for MHADA and CIDCO to be appointed as the “official agency for development” for executing SRA projects. “These agencies could offer free rehabilitation component houses to slum dwellers by constructing multi-storied building as already provided in the SRA,” the letter added.
“While, on one hand, there is a low demand due to the slowdown, there are over four lakh buyers, who are willing to shell money to buy houses,” said Anand J Gupta, general secretary, BAI.
Under the BAI proposal, the government and the real estate players can come together and form a JV and accommodate these potential buyers. If the proposal is accepted, it is believed that the real estate players, who are going through quite a rough patch for a while now, would tend to benefit.
Good News Real estate market could recover by Diwali
After a long time we are witnessing real estate developers taking pride in reducing or slashing rates in Mumbai, Thane and Navi Mumbai to encash on
the existing demand in the real estate market.
The good deals may be offered for a few weeks or for the first ten properties or for a killer deal for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the willingness to connect with the "real" pricing has dawned on the developers to sell at reduced prices to encourage more and more sales.
With the new UPA government there are a lot of hopes and it will be interesting to see how the next few months unfold for the property market. We still need a great deal of transparency to be infused in the way we deal in the property market.
The sales teams in the builder/ developer offices are at their all-time creative best with sales tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of sorts of the kind witnessed earlier this year, when sales plummeted big time.
They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is an even greater need to price competitively, maybe with a lower profit margin, than holding on to the price and project as the interest meter runs. The mantra for developers in the present times, I guess, is to be aware of the markets (realistic demand and supply) and the competition, which the buyers know today.
For a buyer to understand the market more clearly before making a decision, he/she must understand at which juncture the market is hovering; also, with fresh developments in the political arena, what the impact will be in coming months. An important point to note would be that, yes, there has been a correction up to 15 to 30% already in the market post December 2008 and prices have come to September 2008 levels, which were already high in any case and up on account of the festival demand which happens nearly post monsoons by default.
After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop again, but the next couple of years at least will be stable, as after a correction you cannot go up again quickly. With a stable government we can expect more rational policies but a stock market kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Let us be sensible for once; just when things have just started moving a little, let us not think of killing the golden hen and taking out all eggs at one time.
A good 2BHK in the suburbs is not less than Rs 6 to 8 million, which is not cheap by any standards. Our city still does not have the appropriate
infrastructure to support high pricing in the suburbs, especially with connectivity issues , and with a lot of developers under a liquidity crunch it is essential to send out the right signals. The buyer today is under tremendous pressure even when it comes to documentation and with many banks tightening the belts on approvals , it is essential to invest in a project which offers 100% complete paperwork.
All of us know that with the archaic legal systems we live in, there are always loose ends somewhere and this is one area all developers should focus on. Nearly 78% of buyers in today's market would opt for a loan to procure the new property and most would prefer a loanto-value ratio (LTV) of around 80-85%, which typically means that if the title is not clear and transparency of the paperwork is missing, the deal will not happen.
The uncertainty and fear factor still weighing heavily on a buyer's mind gets manifested in the fact that 59% of respondents on a survey would like to buy only a ready possession property or a property nearing completion as past trends have shown delays in construction.
With the current economic slowdown, they are more concerned today about possession timelines. Only about 20% home buyers are keen to invest in properties at their launch stage at attractive prices, and even that, only of selective developers who have a track record. This is as per a survey that a leading bank conducted after the recent Thane exhibition. The developers need to work very hard to win this confidence.
In order to capture the client who is looking to buy a home in today's market conditions, one should look at microanalysis on both demand and supply first. The maximum demand is in the price range of Rs 40 lakh, going up to the Rs 1 crore bracket, and that too, for ready-to-move into homes.
Looking at the buyer's mind, if he is looking at Malad, he wants to try to find a house in Andheri, or similarly, if he is looking at Navi Mumbai, he wants to experience Chembur or Ghatkopar or any other location where he can compromise and get it within a particular price range.
Of course, when he is out on the field he wants to know if rates have bottomed out in the location, project or surrounding location. This typically means a delayed decision of the informed buyer; from the time he puts together his first potential shortlist, it can easily be a period of a month or two. If builders start telling them they will increase prices, they will go to the nearest competitor. In a buyer's market, they know they can pit one against the other.
The coming weeks will be interesting, with stock markets climbing, recession clouds disappearing and the hopes that the new UPA government will bring in fresh policies for the housing industry. With all this, there is a strong chance that there may be a great deal of movement during the Diwali period.
The cycle had slowed down in Diwali 2008 and can come back with a bang September 2009 onwards, but this depends on prices being stable. It may be an opportune moment through the end of the year to sell as much and increase liquidity and focus on new projects. So, let us hope with this competition, the buyer encashes.
The Views Expressed are Personal and not guaranteed
the existing demand in the real estate market.
The good deals may be offered for a few weeks or for the first ten properties or for a killer deal for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the willingness to connect with the "real" pricing has dawned on the developers to sell at reduced prices to encourage more and more sales.
With the new UPA government there are a lot of hopes and it will be interesting to see how the next few months unfold for the property market. We still need a great deal of transparency to be infused in the way we deal in the property market.
The sales teams in the builder/ developer offices are at their all-time creative best with sales tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of sorts of the kind witnessed earlier this year, when sales plummeted big time.
They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is an even greater need to price competitively, maybe with a lower profit margin, than holding on to the price and project as the interest meter runs. The mantra for developers in the present times, I guess, is to be aware of the markets (realistic demand and supply) and the competition, which the buyers know today.
For a buyer to understand the market more clearly before making a decision, he/she must understand at which juncture the market is hovering; also, with fresh developments in the political arena, what the impact will be in coming months. An important point to note would be that, yes, there has been a correction up to 15 to 30% already in the market post December 2008 and prices have come to September 2008 levels, which were already high in any case and up on account of the festival demand which happens nearly post monsoons by default.
After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop again, but the next couple of years at least will be stable, as after a correction you cannot go up again quickly. With a stable government we can expect more rational policies but a stock market kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Let us be sensible for once; just when things have just started moving a little, let us not think of killing the golden hen and taking out all eggs at one time.
A good 2BHK in the suburbs is not less than Rs 6 to 8 million, which is not cheap by any standards. Our city still does not have the appropriate
infrastructure to support high pricing in the suburbs, especially with connectivity issues , and with a lot of developers under a liquidity crunch it is essential to send out the right signals. The buyer today is under tremendous pressure even when it comes to documentation and with many banks tightening the belts on approvals , it is essential to invest in a project which offers 100% complete paperwork.
All of us know that with the archaic legal systems we live in, there are always loose ends somewhere and this is one area all developers should focus on. Nearly 78% of buyers in today's market would opt for a loan to procure the new property and most would prefer a loanto-value ratio (LTV) of around 80-85%, which typically means that if the title is not clear and transparency of the paperwork is missing, the deal will not happen.
The uncertainty and fear factor still weighing heavily on a buyer's mind gets manifested in the fact that 59% of respondents on a survey would like to buy only a ready possession property or a property nearing completion as past trends have shown delays in construction.
With the current economic slowdown, they are more concerned today about possession timelines. Only about 20% home buyers are keen to invest in properties at their launch stage at attractive prices, and even that, only of selective developers who have a track record. This is as per a survey that a leading bank conducted after the recent Thane exhibition. The developers need to work very hard to win this confidence.
In order to capture the client who is looking to buy a home in today's market conditions, one should look at microanalysis on both demand and supply first. The maximum demand is in the price range of Rs 40 lakh, going up to the Rs 1 crore bracket, and that too, for ready-to-move into homes.
Looking at the buyer's mind, if he is looking at Malad, he wants to try to find a house in Andheri, or similarly, if he is looking at Navi Mumbai, he wants to experience Chembur or Ghatkopar or any other location where he can compromise and get it within a particular price range.
Of course, when he is out on the field he wants to know if rates have bottomed out in the location, project or surrounding location. This typically means a delayed decision of the informed buyer; from the time he puts together his first potential shortlist, it can easily be a period of a month or two. If builders start telling them they will increase prices, they will go to the nearest competitor. In a buyer's market, they know they can pit one against the other.
The coming weeks will be interesting, with stock markets climbing, recession clouds disappearing and the hopes that the new UPA government will bring in fresh policies for the housing industry. With all this, there is a strong chance that there may be a great deal of movement during the Diwali period.
The cycle had slowed down in Diwali 2008 and can come back with a bang September 2009 onwards, but this depends on prices being stable. It may be an opportune moment through the end of the year to sell as much and increase liquidity and focus on new projects. So, let us hope with this competition, the buyer encashes.
The Views Expressed are Personal and not guaranteed
Thursday, May 21, 2009
US firm REMAX forays into India as india is seen as best option for real estate investment
US-based realty brokerage firm REMAX has forayed into India aiming to tap potential offered by middle-class families in the country, with
its business in America hit by the ongoing slump in the property market.
"Our business in the US is down by about 20 per cent in last 18 months...India is strong market and the strength of middle-class families are increasing day-by-day. These families are expected to be actively involved in property transactions," REMAX Senior Vice-President (International Development) William E Soteroff said.
Apart from newly developed properties, the company would also deal with secondary sales, he said, adding, "We will also try to organise the disorganised property brokerage business here".
"We have already appointed the master franchisee of India and he will now appoint 30-35 regional owners representing all the states. These regional owners will finally appoint the broker associates for the ground level operations," Soteroff said.
He noted that the company would mainly offer brokerage service in residential segments.
Soteroff said the country has a potential to have about 20,000 broker associates under REMAX in the next 5-10 years.
its business in America hit by the ongoing slump in the property market.
"Our business in the US is down by about 20 per cent in last 18 months...India is strong market and the strength of middle-class families are increasing day-by-day. These families are expected to be actively involved in property transactions," REMAX Senior Vice-President (International Development) William E Soteroff said.
Apart from newly developed properties, the company would also deal with secondary sales, he said, adding, "We will also try to organise the disorganised property brokerage business here".
"We have already appointed the master franchisee of India and he will now appoint 30-35 regional owners representing all the states. These regional owners will finally appoint the broker associates for the ground level operations," Soteroff said.
He noted that the company would mainly offer brokerage service in residential segments.
Soteroff said the country has a potential to have about 20,000 broker associates under REMAX in the next 5-10 years.
One of The Major Real Estate Co Unitech sells Saket office for Rs 450 cr
India's second-largest real estate firm Unitech has sold its office building in Saket, New Delhi, for around Rs 425-450 crore to an
unnamed property investor, following over six months of negotiations with several prospective buyers.
Unitech MD Sanjay Chandra said the deal amount is over Rs 500 crore, but didn't disclose the buyer's name. People familiar with the negotiations said the buyer is a Delhi-based industrialist, who plans to lease out spaces in the 2-lakh sq ft building to other companies. They said the deal amount is between Rs 425-450 crore. The building is ready and was earlier supposed to house Unitech's corporate office, which is currently in Gurgaon.
Unitech had been expecting more than Rs 500 crore for the office building and was earlier in talks with HDFC to sell it. The financial institution has in the past denied holding talks with Unitech on this but had said the Saket property was mortgaged with it as collateral for a loan worth Rs 30 crore given to Unitech. The downturn in the real estate sector and extraordinary level of debt that Unitech had piled on its balance sheet forced the company to put several of its assets, including the Saket office building and the Gurgaon hotel, on the block late last year. The downturn made it difficult for Unitech to sell its properties.
After several months of negotiations with several buyers, the company had sold its hotel in Gurgaon for Rs 231 crore to a car dealer Roop Madan early this year.
Unitech had a total debt of Rs 10,000 crore, as of December quarter and found it difficult to keep pace with its repayment schedule. Loans due to several banks and mutual funds were restructured, after Reserve Bank of India allowed restructuring of commercial real estate loans.
As part of its deleveraging process, Unitech also went in for a qualified institutional placement (QIP) to raise around Rs 1,600 crore last month. The company has now announced that it aims to raise further equity in the company to improve its debt to equity ratio which helps in bringing down the cost of funds for the company.
Unitech will also issue warrants to the promoters who plan to pump in Rs 1,000 crore in Unitech to raise their stake, said a company executive on conditions of anonymity. The holding of Chandra family has dropped from 64% to 51% post-QIP.
unnamed property investor, following over six months of negotiations with several prospective buyers.
Unitech MD Sanjay Chandra said the deal amount is over Rs 500 crore, but didn't disclose the buyer's name. People familiar with the negotiations said the buyer is a Delhi-based industrialist, who plans to lease out spaces in the 2-lakh sq ft building to other companies. They said the deal amount is between Rs 425-450 crore. The building is ready and was earlier supposed to house Unitech's corporate office, which is currently in Gurgaon.
Unitech had been expecting more than Rs 500 crore for the office building and was earlier in talks with HDFC to sell it. The financial institution has in the past denied holding talks with Unitech on this but had said the Saket property was mortgaged with it as collateral for a loan worth Rs 30 crore given to Unitech. The downturn in the real estate sector and extraordinary level of debt that Unitech had piled on its balance sheet forced the company to put several of its assets, including the Saket office building and the Gurgaon hotel, on the block late last year. The downturn made it difficult for Unitech to sell its properties.
After several months of negotiations with several buyers, the company had sold its hotel in Gurgaon for Rs 231 crore to a car dealer Roop Madan early this year.
Unitech had a total debt of Rs 10,000 crore, as of December quarter and found it difficult to keep pace with its repayment schedule. Loans due to several banks and mutual funds were restructured, after Reserve Bank of India allowed restructuring of commercial real estate loans.
As part of its deleveraging process, Unitech also went in for a qualified institutional placement (QIP) to raise around Rs 1,600 crore last month. The company has now announced that it aims to raise further equity in the company to improve its debt to equity ratio which helps in bringing down the cost of funds for the company.
Unitech will also issue warrants to the promoters who plan to pump in Rs 1,000 crore in Unitech to raise their stake, said a company executive on conditions of anonymity. The holding of Chandra family has dropped from 64% to 51% post-QIP.
Tuesday, May 19, 2009
Dubai Major Real Estate Co Plans Offices in Metros
Sherwoods Independent Property Consultants is to open an office in New Delhi this summer as investor appetite grows amid a shortfall of four million residential units in the Indian capital. The Dubai-based real estate adviser, which has three offices in UAE as well as a strong presence in Europe, predicted on Tuesday New Delhi will have a buoyant housing market with rising demand among the burgeoning middle class as India’s economy booms. Sherwoods estimated that there is a supply shortage of around four million homes in the capital. Puniet Singh, CEO of Sherwoods Independent Property Consultants (India) Private Limited said: “Sherwoods is targeting all metropolitan cities in India, including New Delhi, Mumbai, Kolkata, Chennai and Bangalore as well as tier-2, urbanised cities such as Hyderabad, Pune, Chandigarh, Gurgaon and Noida.”
As well as showing signs of recovery from the global crisis, interest rates in India have from fallen from 11.5 percent to 9.25 percent, making mortgages cheaper. The Indian economy is likely to grow at 6.6 percent in the current fiscal year on the back of new investment proposals, economic think-tank Centre for Monitoring Indian Economy (CMIE) said in a report on Tuesday. “We believe this is a highly favourable time for real estate investments as India is now showing strong signs of recovery and opening excellent opportunities in the mid to long-term horizon,” Singh continued. “India’s resiliency is of particularly strategic importance because growth has levelled out in other major global markets, putting India in the spotlight as a new prime destination for real estate investors.”
As well as showing signs of recovery from the global crisis, interest rates in India have from fallen from 11.5 percent to 9.25 percent, making mortgages cheaper. The Indian economy is likely to grow at 6.6 percent in the current fiscal year on the back of new investment proposals, economic think-tank Centre for Monitoring Indian Economy (CMIE) said in a report on Tuesday. “We believe this is a highly favourable time for real estate investments as India is now showing strong signs of recovery and opening excellent opportunities in the mid to long-term horizon,” Singh continued. “India’s resiliency is of particularly strategic importance because growth has levelled out in other major global markets, putting India in the spotlight as a new prime destination for real estate investors.”
Right Time to Buy house, don't rent - message from the housing sector
The economic slowdown has hit home sales and sent prices plummeting. The flip side: home rents have shot up.
Rents went up by around 30 per cent in major cities, including Delhi and the national capital region (NCR) last year, as more and more consumers, hit by the slowdown, preferred living in rented houses to investing huge sums to buy properties, industry officials said. "The slowdown has fuelled the rental market. On an average, the residential rental has gone up 30 per cent in the last one year in Delhi and NCR. In many areas, it went up even 50 per cent," Rajesh Goenka, chairman of Axiom Estates, the London-headquartered provider of property services in India, told reporters. Added Pradeep Khanna, chairman of Khanna Properties, a west Delhi-based brokerage firm: "The rental for a normal two-bedroom set in Delhi and NCR was about Rs.7,000 per month one year back. However, today it is very difficult to get a decent two-room set on the same rent even in remote localities." According to industry officials, the high cost of properties and slackening supply of houses have fuelled rentals in Delhi. "People need a house to live in, and not everyone can buy one. With prices still beyond the reach of a large section of the middle class, staying in rented accommodation is the only option left," Goenka said. "Even the potential buyers are on a wait-and-watch mode now." Priyanka Prasad, a jewellery designer, echoed similar views, saying she had to shift home from north Delhi to west Delhi because of high rents. "I was paying Rs.7,500 for a two-room set in the Kamla Nagar area in north Delhi. However, this year the landlord asked for Rs.12,500. This was out of my budget, so I shifted to Dwarka, where I got a similar house for Rs.8,500," Prasad said. The trend in the housing rental sector is just opposite to the commercial and official rental markets, where prices fell 30 per cent last year, according to reports by global real estate consultant Cushman and Wakefield. Sameer Nayar, managing director and Asia Pacific head of the real estate unit of Credit Suisse, said supply was more than the actual demand in the office rental sector. "Office rentals are going down because the supply is more than the actual demand. However, in the residential property sector, the demand is much higher. Naturally, the rent will go up," Nayar said.
Rents went up by around 30 per cent in major cities, including Delhi and the national capital region (NCR) last year, as more and more consumers, hit by the slowdown, preferred living in rented houses to investing huge sums to buy properties, industry officials said. "The slowdown has fuelled the rental market. On an average, the residential rental has gone up 30 per cent in the last one year in Delhi and NCR. In many areas, it went up even 50 per cent," Rajesh Goenka, chairman of Axiom Estates, the London-headquartered provider of property services in India, told reporters. Added Pradeep Khanna, chairman of Khanna Properties, a west Delhi-based brokerage firm: "The rental for a normal two-bedroom set in Delhi and NCR was about Rs.7,000 per month one year back. However, today it is very difficult to get a decent two-room set on the same rent even in remote localities." According to industry officials, the high cost of properties and slackening supply of houses have fuelled rentals in Delhi. "People need a house to live in, and not everyone can buy one. With prices still beyond the reach of a large section of the middle class, staying in rented accommodation is the only option left," Goenka said. "Even the potential buyers are on a wait-and-watch mode now." Priyanka Prasad, a jewellery designer, echoed similar views, saying she had to shift home from north Delhi to west Delhi because of high rents. "I was paying Rs.7,500 for a two-room set in the Kamla Nagar area in north Delhi. However, this year the landlord asked for Rs.12,500. This was out of my budget, so I shifted to Dwarka, where I got a similar house for Rs.8,500," Prasad said. The trend in the housing rental sector is just opposite to the commercial and official rental markets, where prices fell 30 per cent last year, according to reports by global real estate consultant Cushman and Wakefield. Sameer Nayar, managing director and Asia Pacific head of the real estate unit of Credit Suisse, said supply was more than the actual demand in the office rental sector. "Office rentals are going down because the supply is more than the actual demand. However, in the residential property sector, the demand is much higher. Naturally, the rent will go up," Nayar said.
Great News Demand OIf Real Estate on Rise Demand begins showing up in India again, say real estate firms
There is a surge in buying interest in all-inclusive ‘affordable’ flats being built for mid-income budgets
The BSE Realty Index surged the most on Monday as the Bombay Stock Exchange Sensex hit the upper circuit for the first time. The 14-stock index closed 23 per cent higher at 2,968.75, rising around 37 per cent over the last month.However, it is still around 63 per cent lower from last year (April 16, 2008). On Monday, the broader market index, Sensex, closed 17.34 per cent higher at 14,284.24 points. Analysts and firm officials are upbeat about the revival of the realty sector. They say if fundamentals such as credit market situation, interest rates and housing demand improve further, there can be a faster revival.“The real estate sector will see a revival faster than what was envisaged earlier. But the rise in stock prices, too, has been swift. The sector always lags behind the stock market in terms of time lines,” said Ambareesh Baliga, vice-president and research head at Karvy Stock Broking.“We can expect a revival in the real estate sector now because a lot of policy directives, including approval of external commercial borrowings, special economic zone status, FDI (foreign direct investment) in real estate, lower interest rates and overall availability of credit to the real estate sector, may happen,” said Amitabh Chakraborty, research head, Religare Securities.Real estate officials that Financial Chronicle spoke to are confident that the worst is behind them and that they are hoping to see better days ahead. “The market is likely to see fresh liquidity infused in the system after a prolonged downward swirl. The real estate index performance on Monday also suggests that the suitable time to make real estate purchase has arrived,” said Rajesh Vardhan, managing director, Vardhman Group.Rajeev Talwar, executive director, DLF, said a stable government is good for the revival of the real estate sector. “There is urgent requirement for urban housing reforms. There is humungous requirement for housing for people. Rules and regulations should not put more constraints on fresh supply hitting the market,” said Talwar. However, some analysts say Monday’s performance may not be sustainable in the long-term because the fundamentals of the real estate firms and the economy have not changed much.“Lot of shorts have built up in these companies and they are still not covered. Even their futures are trading at a discount. Hence, I think the companies are not going to have any immediate benefit (out of this market rally),” said Priyadarshi Srivastava, head of sales, IDBI Capital.
The BSE Realty Index surged the most on Monday as the Bombay Stock Exchange Sensex hit the upper circuit for the first time. The 14-stock index closed 23 per cent higher at 2,968.75, rising around 37 per cent over the last month.However, it is still around 63 per cent lower from last year (April 16, 2008). On Monday, the broader market index, Sensex, closed 17.34 per cent higher at 14,284.24 points. Analysts and firm officials are upbeat about the revival of the realty sector. They say if fundamentals such as credit market situation, interest rates and housing demand improve further, there can be a faster revival.“The real estate sector will see a revival faster than what was envisaged earlier. But the rise in stock prices, too, has been swift. The sector always lags behind the stock market in terms of time lines,” said Ambareesh Baliga, vice-president and research head at Karvy Stock Broking.“We can expect a revival in the real estate sector now because a lot of policy directives, including approval of external commercial borrowings, special economic zone status, FDI (foreign direct investment) in real estate, lower interest rates and overall availability of credit to the real estate sector, may happen,” said Amitabh Chakraborty, research head, Religare Securities.Real estate officials that Financial Chronicle spoke to are confident that the worst is behind them and that they are hoping to see better days ahead. “The market is likely to see fresh liquidity infused in the system after a prolonged downward swirl. The real estate index performance on Monday also suggests that the suitable time to make real estate purchase has arrived,” said Rajesh Vardhan, managing director, Vardhman Group.Rajeev Talwar, executive director, DLF, said a stable government is good for the revival of the real estate sector. “There is urgent requirement for urban housing reforms. There is humungous requirement for housing for people. Rules and regulations should not put more constraints on fresh supply hitting the market,” said Talwar. However, some analysts say Monday’s performance may not be sustainable in the long-term because the fundamentals of the real estate firms and the economy have not changed much.“Lot of shorts have built up in these companies and they are still not covered. Even their futures are trading at a discount. Hence, I think the companies are not going to have any immediate benefit (out of this market rally),” said Priyadarshi Srivastava, head of sales, IDBI Capital.
Jai Ho Congress Return OF UPA ALso Boosts Real Estate Sector
UPA’s return to power, that too with near total majority, has brought smiles on the faces of people associated with real estate and industry sectors in the Tricity. They feel that the Congress-led government would now be in a position to take some radical decisions for revival of the economy, which would affect both real estate and industry sectors. As slowdown has affected industry and real estate business in Chandigarh, Panchkula and Mohali, now people associated with these two sectors are expecting revival of economy in the next few months. As UPA allies like Rashtriya Janta Dal, Lok Janshakti Party and Samajwadi Party have been marginalized this time, industrialists and real estate developers feel this would give a free hand to Congress-led UPA to take some radical decisions including foreign investment for the revival of economy. MPS Chawla, president, Chandigarh Industries Association, said that stable government in the Centre would improve the economy. He said that as government would not have any undue pressure, economy would witness upward trend in the next few months. To revive the economy, government should announce special package for the small scale industries and trade sector, he said, adding that currently industries and real estate sectors are worst affected, which needs immediate relief. He demanded that government should slash interest rates. Vishnu Goyal, general secretary, Haryana Chamber of Commerce and Industries, said that a majority government is a good sign for the economy as political stability would ensure faster revival of the economy. He said there are around 400 small scale industries in Panchkula which needs immediate relief package as slowdown has affected them. Real estate sector in Mohali is already witnessing slump due to slowdown as construction of houses is more than their demand. To attract buyers, developers have already announced various sops including discount between 40 to 50% in a hope to revive the ailing real estate market. Vijay Arora, president, Peermuchhalla Builders Association, said that they expect UPA government to announce real estate policy which would revive the market. He said that the market is in a bad shape due to recession and higher rate of loans. Stable government in the Centre would bring stability to the economy, he added
Indiabulls Real Estate latest developer to tap QIP route
The real estate arm of the Indiabulls group of companies has announced plans to raise money through a share sale, becoming the third real estate developer to raise money through this route in recent weeks.
Equity issue: An Indiabulls office in Mumbai. The company has informed BSE that its shareholders have approved the stock sale. Prashanth Vishwanathan / BloombergWhile the company didn’t specify what the funds would be used for, an analyst said it could be for its power business.
Indiabulls Real Estate Ltd, India’s fourth largest real estate developer by market value, plans to raise up to $600 million (around Rs2,900 crore) through a qualified institutional placement (QIP), the company said in a statement to the Bombay Stock Exchange (BSE) on Monday. The QIP, or sale of shares to investors such as banks and financial institutions, opened on Monday.
Indiabulls told BSE that the company’s shareholders have approved the QIP issue. The company didn’t disclose details of the number of shares it plans to sell or the price at which it would do so.
Morgan Stanley is lead manager to the issue. The allotment of the shares will be made around Friday, according to the draft prospectus submitted by the company, and which can be seen on the National Stock Exchange’s website.
This is the third instance of a real estate company raising funds through an equity issue in recent times.
On 16 April, Unitech Ltd, India’s second largest developer by market value, managed to raise as much as $325 million in a QIP to repay debt and fund projects.
Last week, DLF Ltd, India’s largest developer by market value, said its promoters had sold a 9.9% stake in the company for Rs3,860 crore, to raise money to buy out hedge fund DE Shaw and Co. LP’s investment in DLF Assets Ltd, also promoted by them, and to infuse fresh capital into this company.
“I think more such issues are likely,” Vedika Bhandarkar, managing director and head of investment banking, JPMorgan, had said at the time of DLF’s share sale. “When the volatility was very high, investors were unwilling to put their money to work. Now, that has changed. They are willing to put money if they understand it is good for the company. Investors are focused on large stocks.”
An analyst said Indiabulls would use the proceeds of the QIP to fund its power projects in Maharashtra and Chhattisgarh.
Indiabulls Real Estate has a 71% stake in the group’s power business.
“The company, according to is draft prospectus, has only around Rs1,000 crore of debt. So it does not look likely that it is raising funds to repay debt like most real estate developers are doing,” an analyst with a domestic brokerage firm who did not want to be identified said. “I think even this debt was taken for their power business and not their real estate business.”
Indiabulls’ officials were not available for comment on Monday.
Indiabulls plans to develop power plants in Amravati and Nashik in Maharashtra and Bhaiyathan in Chhattisgarh.
In February 2008, Indiabulls Power Services raised Rs1,600 crore from steel czar L.N. Mittal and hedge fund Farallon Capital Management, through the sale of a 37.5% stake.
Shares of Indiabulls Real Estate soared 38.51% to close at Rs205 per share on the Bombay Stock Exchange, in the few seconds for which trading was allowed on Monday before being suspended for the day because the exchange’s benchmark index breached the upper circuit level.
The Sensex ended the day 17.34% up and the BSE Realty Index, up 23.45%.
Equity issue: An Indiabulls office in Mumbai. The company has informed BSE that its shareholders have approved the stock sale. Prashanth Vishwanathan / BloombergWhile the company didn’t specify what the funds would be used for, an analyst said it could be for its power business.
Indiabulls Real Estate Ltd, India’s fourth largest real estate developer by market value, plans to raise up to $600 million (around Rs2,900 crore) through a qualified institutional placement (QIP), the company said in a statement to the Bombay Stock Exchange (BSE) on Monday. The QIP, or sale of shares to investors such as banks and financial institutions, opened on Monday.
Indiabulls told BSE that the company’s shareholders have approved the QIP issue. The company didn’t disclose details of the number of shares it plans to sell or the price at which it would do so.
Morgan Stanley is lead manager to the issue. The allotment of the shares will be made around Friday, according to the draft prospectus submitted by the company, and which can be seen on the National Stock Exchange’s website.
This is the third instance of a real estate company raising funds through an equity issue in recent times.
On 16 April, Unitech Ltd, India’s second largest developer by market value, managed to raise as much as $325 million in a QIP to repay debt and fund projects.
Last week, DLF Ltd, India’s largest developer by market value, said its promoters had sold a 9.9% stake in the company for Rs3,860 crore, to raise money to buy out hedge fund DE Shaw and Co. LP’s investment in DLF Assets Ltd, also promoted by them, and to infuse fresh capital into this company.
“I think more such issues are likely,” Vedika Bhandarkar, managing director and head of investment banking, JPMorgan, had said at the time of DLF’s share sale. “When the volatility was very high, investors were unwilling to put their money to work. Now, that has changed. They are willing to put money if they understand it is good for the company. Investors are focused on large stocks.”
An analyst said Indiabulls would use the proceeds of the QIP to fund its power projects in Maharashtra and Chhattisgarh.
Indiabulls Real Estate has a 71% stake in the group’s power business.
“The company, according to is draft prospectus, has only around Rs1,000 crore of debt. So it does not look likely that it is raising funds to repay debt like most real estate developers are doing,” an analyst with a domestic brokerage firm who did not want to be identified said. “I think even this debt was taken for their power business and not their real estate business.”
Indiabulls’ officials were not available for comment on Monday.
Indiabulls plans to develop power plants in Amravati and Nashik in Maharashtra and Bhaiyathan in Chhattisgarh.
In February 2008, Indiabulls Power Services raised Rs1,600 crore from steel czar L.N. Mittal and hedge fund Farallon Capital Management, through the sale of a 37.5% stake.
Shares of Indiabulls Real Estate soared 38.51% to close at Rs205 per share on the Bombay Stock Exchange, in the few seconds for which trading was allowed on Monday before being suspended for the day because the exchange’s benchmark index breached the upper circuit level.
The Sensex ended the day 17.34% up and the BSE Realty Index, up 23.45%.
Tuesday, May 12, 2009
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Real estate prices declined further due to slowdown
The failure of retailers to exploit the fall in real estate prices triggered by the
economic slowdown, has led to a further
correction in property prices across major
metros of India, real estate consultant, Cushman & Wakefield (C&W), has said in a report.
"Most retail micro-markets, both malls as well as main streets saw a further correction in rental values. Mumbai saw the sharpest decline in rental values for both malls (Goregaon -42 per cent) and main streets (Colaba Causeway38 per cent)," C&W said.
Mumbai witnessed the second-highest mall supply with an addition of 3,05,000 sq ft in Q1 09. However, it also recorded the highest mall rental correction, the report said.
Receding user-demand has severely curtailed uptake of space across most micro-markets, the report said.
"The trend of further correction is likely to continue in short-to-medium-time frame leading to further correction in both mall rentals as well as high-street rentals," C&W India Retail Services, Executive Director, Rajneesh Mahajan, said.
Delhi's National Capital Region (NCR) witnessed an up to 25 per cent decline in rental values, the report said.
"Increase in malls has impacted main street rental values, which have seen a downward trend especially in areas around South Delhi like Greater Kailash I M-Block market recording a correction of 25 per cent," C&W said.
While the main streets of Bangalore saw much wider corrections in the range of 6-28 per cent, Hyderabad recorded one of the highest mall rental corrections between 25 per cent to 29 per cent.
Kolkata saw mall rental values shrink by 12-25 per cent due to delays in mall projects, while those in central Chennai were pulled down by 8 per cent, C&W said.
It noted that only 1.4-million sq ft of fresh mall supply was added in the first quarter of 2009, mainly in Mumbai and NCR and five other major cities.
The fresh supply was much below initial expectation largely due to the slowdown in uptake of space by retailers, which led developers to reduce the speed of construction in already-underway projects, it said.
"Estimated mall supply by end-2009 is calculated to be 17.66-million sq ft, approximately 11-million sq ft of the same has been carried forward from 2008," C&W said.
Other developers, who are yet to begin construction of previously announced projects, may be reconsidering their retail mall plans, the report said.
"Most retailers are now renegotiating their rental commitments as per the actual business potential in the mall, thereby exerting downward pressure on the rental values," Mahajan said.
"Many developers have now begun to support retailers by reducing the fixed occupancy cost, as well as offering revenue-sharing opportunity with retailers to promote increase in occupancy," he added.
economic slowdown, has led to a further
correction in property prices across major
metros of India, real estate consultant, Cushman & Wakefield (C&W), has said in a report.
"Most retail micro-markets, both malls as well as main streets saw a further correction in rental values. Mumbai saw the sharpest decline in rental values for both malls (Goregaon -42 per cent) and main streets (Colaba Causeway38 per cent)," C&W said.
Mumbai witnessed the second-highest mall supply with an addition of 3,05,000 sq ft in Q1 09. However, it also recorded the highest mall rental correction, the report said.
Receding user-demand has severely curtailed uptake of space across most micro-markets, the report said.
"The trend of further correction is likely to continue in short-to-medium-time frame leading to further correction in both mall rentals as well as high-street rentals," C&W India Retail Services, Executive Director, Rajneesh Mahajan, said.
Delhi's National Capital Region (NCR) witnessed an up to 25 per cent decline in rental values, the report said.
"Increase in malls has impacted main street rental values, which have seen a downward trend especially in areas around South Delhi like Greater Kailash I M-Block market recording a correction of 25 per cent," C&W said.
While the main streets of Bangalore saw much wider corrections in the range of 6-28 per cent, Hyderabad recorded one of the highest mall rental corrections between 25 per cent to 29 per cent.
Kolkata saw mall rental values shrink by 12-25 per cent due to delays in mall projects, while those in central Chennai were pulled down by 8 per cent, C&W said.
It noted that only 1.4-million sq ft of fresh mall supply was added in the first quarter of 2009, mainly in Mumbai and NCR and five other major cities.
The fresh supply was much below initial expectation largely due to the slowdown in uptake of space by retailers, which led developers to reduce the speed of construction in already-underway projects, it said.
"Estimated mall supply by end-2009 is calculated to be 17.66-million sq ft, approximately 11-million sq ft of the same has been carried forward from 2008," C&W said.
Other developers, who are yet to begin construction of previously announced projects, may be reconsidering their retail mall plans, the report said.
"Most retailers are now renegotiating their rental commitments as per the actual business potential in the mall, thereby exerting downward pressure on the rental values," Mahajan said.
"Many developers have now begun to support retailers by reducing the fixed occupancy cost, as well as offering revenue-sharing opportunity with retailers to promote increase in occupancy," he added.
Visit and Search Property In India Now
Builders now rely on banks for completion of projects
Real estate developers are making a beeline for bank funds, with traditional sources
of funding like private equity and the stock market
drying up in the current slowdown.
Realty, which has also taken a huge hit in the slump, accounted for the largest chunk of non-food bank credit disbursed in the previous fiscal (FY09). Developers have used most of these funds to meet working capital requirements.
“Fresh credit offtake is on account of project financing,” said an official with a large foreign multinational bank on condition of anonymity. He added that builders were facing a cash crunch, with receivables from residential projects under construction getting blocked. Demand has been slowing down and buyers are deferring payments till possession. Thus, banks are helping real estate companies complete their projects, sell them and pay back loans. Completion of projects will, in turn, help developers liquidate their inventory of unsold properties and generate cash flows to meet operating costs.
Reserve Bank of India (RBI) data shows that banks’ fresh loans to real estate companies registered a 61.4% growth to Rs 34,500 crore in the 11 months of the fiscal, compared to 26.7% growth in the corresponding period last year. Almost half of these new loans were raised between December 2008 and February 2009. Further, RBI has reduced the risk weightage on real estate loans to 100% from 150% in the latest monetary policy, supporting the banks’ initiative.
of funding like private equity and the stock market
drying up in the current slowdown.
Realty, which has also taken a huge hit in the slump, accounted for the largest chunk of non-food bank credit disbursed in the previous fiscal (FY09). Developers have used most of these funds to meet working capital requirements.
“Fresh credit offtake is on account of project financing,” said an official with a large foreign multinational bank on condition of anonymity. He added that builders were facing a cash crunch, with receivables from residential projects under construction getting blocked. Demand has been slowing down and buyers are deferring payments till possession. Thus, banks are helping real estate companies complete their projects, sell them and pay back loans. Completion of projects will, in turn, help developers liquidate their inventory of unsold properties and generate cash flows to meet operating costs.
Reserve Bank of India (RBI) data shows that banks’ fresh loans to real estate companies registered a 61.4% growth to Rs 34,500 crore in the 11 months of the fiscal, compared to 26.7% growth in the corresponding period last year. Almost half of these new loans were raised between December 2008 and February 2009. Further, RBI has reduced the risk weightage on real estate loans to 100% from 150% in the latest monetary policy, supporting the banks’ initiative.
Saturday, May 9, 2009
Real estate venture capital fund launched
The first Securities and Exchange Board of India (SEBI) recognised real estate venture capital fund (VCF) in Kerala was launched in Kozhikode on Wednesday.
Named Secura, the first private VCF of the state was jointly started by Hi-lite group, a major real estate player, and a group of professionals.
The company was launched by Principal Secretary to Industries T. Balakrishnan at Hotel Hyson Heritage here. Secura Managing Director M. A. Mehaboob said the fund would be operated in accordance with the ‘Shariah’ laws and regulations.
Minimum investment
According to him, the company plans to mobilise Rs. 50 crore initially with the closing date on July 31. Minimum investment limit is Rs. 5 lakh and investments can be made in different instalments. An investor need to give only 20 per cent of the investment as the first instalment.
The balance can be paid in 18 months in instalments. There is no higher limit for investment.
Named Secura, the first private VCF of the state was jointly started by Hi-lite group, a major real estate player, and a group of professionals.
The company was launched by Principal Secretary to Industries T. Balakrishnan at Hotel Hyson Heritage here. Secura Managing Director M. A. Mehaboob said the fund would be operated in accordance with the ‘Shariah’ laws and regulations.
Minimum investment
According to him, the company plans to mobilise Rs. 50 crore initially with the closing date on July 31. Minimum investment limit is Rs. 5 lakh and investments can be made in different instalments. An investor need to give only 20 per cent of the investment as the first instalment.
The balance can be paid in 18 months in instalments. There is no higher limit for investment.
What to DO to boost the realty sector and Take it Out From Current Phase
The past two years have been eventful for the real estate industry, which saw
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
What to DO to boost the realty sector and Take it Out From Current Phase
The past two years have been eventful for the real estate industry, which saw
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
Kerala Based Builders Launch Real Estate Venture Capital Fund
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31.
At a time when the real estate sector is going thorugh liquidity problems,the promoters of the Hi-lite Group, Kerela Based builders have launched a real estate focused venture capital fund.
Secura India Real Estate Fund, Kerela’s first SEBI recognised real estate venture capital fund, has been launched in Kozhikode. It will be a Shariah compliant fund. Besides the Hi-lite group, the fund is also promoted by a group of real estate professionals.
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31. The minimum investment limit, is reportedly Rs 5 lakhs and the investments can be made in various installments. An investor would need to pay only 20% of the total investment as the first installment and the rest of the installments can be paid over a period of 18 months.
The VC investment in any project would be typically at land Cost stage, under which the fund would invest and collaborate with developers/land owners from inception to completion. It would also provide capital for land acquisition in the high potential locations for development.
The fund would be involved in the shaping the direction of the project and may do so through active involvement in the special purpose vehicles (SPVs). The fund’s managing director,M.A. Mehaboob is the promoter and Director of hi-lite Builders Private Limited.
At a time when the real estate sector is going thorugh liquidity problems,the promoters of the Hi-lite Group, Kerela Based builders have launched a real estate focused venture capital fund.
Secura India Real Estate Fund, Kerela’s first SEBI recognised real estate venture capital fund, has been launched in Kozhikode. It will be a Shariah compliant fund. Besides the Hi-lite group, the fund is also promoted by a group of real estate professionals.
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31. The minimum investment limit, is reportedly Rs 5 lakhs and the investments can be made in various installments. An investor would need to pay only 20% of the total investment as the first installment and the rest of the installments can be paid over a period of 18 months.
The VC investment in any project would be typically at land Cost stage, under which the fund would invest and collaborate with developers/land owners from inception to completion. It would also provide capital for land acquisition in the high potential locations for development.
The fund would be involved in the shaping the direction of the project and may do so through active involvement in the special purpose vehicles (SPVs). The fund’s managing director,M.A. Mehaboob is the promoter and Director of hi-lite Builders Private Limited.
DLF may face Rs 400-crore tax blow as per Economic Times
India's largest real estate company DLF will have to pay additional tax of
Rs 300-400 crore to the government for the financial
year 2005-06, after the income-
Tax (I-T) department in a special investigation found that the realty company’s books showed an income lower by Rs 1,200 crore for the given year. DLF was issued a directive in this regard on Wednesday.
The real estate developer plans to challenge the government’s order. “We have 90 days to file the appeal,” said DLF CFO Ramesh Sanka. In a filing to the National Stock Exchange (NSE) on Thursday, DLF said: “The company has got an expert opinion on the enhanced taxable income and is confident that this addition will not be sustained by the appellate authorities.” It is estimated that the I-T department order may result in a contingent liability of Rs 300-400 crore.
DLF shares fell 0.43% to 244.9 on the Bombay Stock Exchange, as the benchmark Sensex rose 1.37% on Thursday. The government order has come at a time, when the company is dealing with a deep slump in the realty sector and a sharp decline in its income. The additional tax outgo will put further pressure on the company’s cashflow.
The I-T department in December had ordered a special audit to evaluate the tax filings of the company for FY06. The special audit report recommended that the tax department reassess approximately Rs 1,200 crore as additional income, as per DLF’s filing to NSE on Thursday.
Following the report and assessment proceedings, the assessment office has “issued an assessment order adding substantially most of the amount suggested by the special audit report”, said the company.
In FY06, accounting norms for construction and real estate development companies changed. This was the first year when all real estate development companies, including DLF, compulsorily started using percentage of completion method (PoCM) for recognising revenues, and consequently, profits. PoCM means recognition of revenue as the construction progresses.
Under this method, most companies, including DLF, start recognising revenues on their books after 30% of the project cost (land plus construction cost) is incurred. Besides, the revenues are recognised only for the equivalent portion of the project, which has been sold to the customers. For example, if the project is half complete, but has been sold only 20%, then the revenue will be recognised only to the extent of 20% and rest will be inventory.
Before PoCM became compulsory, real estate companies used to follow completed contract method, whereby revenue was recognised only after the entire project was completed.
Rs 300-400 crore to the government for the financial
year 2005-06, after the income-
Tax (I-T) department in a special investigation found that the realty company’s books showed an income lower by Rs 1,200 crore for the given year. DLF was issued a directive in this regard on Wednesday.
The real estate developer plans to challenge the government’s order. “We have 90 days to file the appeal,” said DLF CFO Ramesh Sanka. In a filing to the National Stock Exchange (NSE) on Thursday, DLF said: “The company has got an expert opinion on the enhanced taxable income and is confident that this addition will not be sustained by the appellate authorities.” It is estimated that the I-T department order may result in a contingent liability of Rs 300-400 crore.
DLF shares fell 0.43% to 244.9 on the Bombay Stock Exchange, as the benchmark Sensex rose 1.37% on Thursday. The government order has come at a time, when the company is dealing with a deep slump in the realty sector and a sharp decline in its income. The additional tax outgo will put further pressure on the company’s cashflow.
The I-T department in December had ordered a special audit to evaluate the tax filings of the company for FY06. The special audit report recommended that the tax department reassess approximately Rs 1,200 crore as additional income, as per DLF’s filing to NSE on Thursday.
Following the report and assessment proceedings, the assessment office has “issued an assessment order adding substantially most of the amount suggested by the special audit report”, said the company.
In FY06, accounting norms for construction and real estate development companies changed. This was the first year when all real estate development companies, including DLF, compulsorily started using percentage of completion method (PoCM) for recognising revenues, and consequently, profits. PoCM means recognition of revenue as the construction progresses.
Under this method, most companies, including DLF, start recognising revenues on their books after 30% of the project cost (land plus construction cost) is incurred. Besides, the revenues are recognised only for the equivalent portion of the project, which has been sold to the customers. For example, if the project is half complete, but has been sold only 20%, then the revenue will be recognised only to the extent of 20% and rest will be inventory.
Before PoCM became compulsory, real estate companies used to follow completed contract method, whereby revenue was recognised only after the entire project was completed.
Real estate stocks boom
Real estate companies are on a roll on the bourses. In less than two months
since the BSE sensex saw its 2009 bottom on March 9,
price of six realty stocks on the
BSE have more than doubled while price of 26 stocks have gained over 50% during the same period. Compared to this, the BSE sensex has gained about 46%.
On an aggregate basis however, investors in these stocks have made just about Rs 31,000 crore during this period with combined market capitalisation of 54 listed realty stocks at Rs 77,400 crore.
While analysts said a combination of factors have led to this sudden surge in stock prices, market players are advising caution to investors.
At least three reasons have led to the spurt in real estate stocks: the recent spate of debt restructuring by the highly-leveraged real estate companies, some pick up in sales volumes, at least by the sector leaders, and sale of assets or reduction in land banks, sector analysts said.
The third reason for the rally is lately some of the large firms sold part of their assets or backed out of ambitious projects. Meanwhile, Heavy selling after midsession gains, weighed on the local bourses as sensex dropped by 178 points.
since the BSE sensex saw its 2009 bottom on March 9,
price of six realty stocks on the
BSE have more than doubled while price of 26 stocks have gained over 50% during the same period. Compared to this, the BSE sensex has gained about 46%.
On an aggregate basis however, investors in these stocks have made just about Rs 31,000 crore during this period with combined market capitalisation of 54 listed realty stocks at Rs 77,400 crore.
While analysts said a combination of factors have led to this sudden surge in stock prices, market players are advising caution to investors.
At least three reasons have led to the spurt in real estate stocks: the recent spate of debt restructuring by the highly-leveraged real estate companies, some pick up in sales volumes, at least by the sector leaders, and sale of assets or reduction in land banks, sector analysts said.
The third reason for the rally is lately some of the large firms sold part of their assets or backed out of ambitious projects. Meanwhile, Heavy selling after midsession gains, weighed on the local bourses as sensex dropped by 178 points.
Indiabulls Real Estate to raise $150 million from QIP issue
Property developer Indiabulls Real Estate (IBREL) is talking to investors to raise at least $150 million (Rs 750 crore) from sale of shares to select investors as part of its qualified institutional placement (QIP) plan.
The Mumbai-based real estate developer has begun its road show and has hired Morgan Stanley as adviser. A spokesperson confirmed the hiring of the investment banker.
Indiabulls Real Estate had announced last month that it planned to raise $600 million (Rs 3,000 crore) from sale of shares from a QIP issue.
The money from the QIP is expected to be used to fund its power projects, mainly the 1,320 megawatt project planned to be built in Amaravati, Maharashtra.
The company plans to seek shareholders’ approval at a meeting on May 18.
The QIP was expected to be a precursor to the initial public issue being planned by the company, sources said.
Sources involved with the development say the company plans to complete the issue soon after a clear picture emerges on who will form the next government at the Centre.
Indiabulls Real Estate shares have risen 11 per cent this month and 8.9 per cent this year, compared with 23.11 per cent gain that the benchmark sensitive index has recorded this year.
Indiabulls Real Estate had, earlier this week, said it failed to raise Rs 2,322 crore from promoters and key officials as they did not convert the warrants issued to them into equity. The promoters did not convert as the company’s shares were trading about 74 per cent below the conversion price of Rs 540 per warrant.
IBREL had issued 43 million warrants in November 2007 to promoters and joint managing directors on a preferential basis. The last date for conversion was May 4 2009.
The Mumbai-based real estate developer has begun its road show and has hired Morgan Stanley as adviser. A spokesperson confirmed the hiring of the investment banker.
Indiabulls Real Estate had announced last month that it planned to raise $600 million (Rs 3,000 crore) from sale of shares from a QIP issue.
The money from the QIP is expected to be used to fund its power projects, mainly the 1,320 megawatt project planned to be built in Amaravati, Maharashtra.
The company plans to seek shareholders’ approval at a meeting on May 18.
The QIP was expected to be a precursor to the initial public issue being planned by the company, sources said.
Sources involved with the development say the company plans to complete the issue soon after a clear picture emerges on who will form the next government at the Centre.
Indiabulls Real Estate shares have risen 11 per cent this month and 8.9 per cent this year, compared with 23.11 per cent gain that the benchmark sensitive index has recorded this year.
Indiabulls Real Estate had, earlier this week, said it failed to raise Rs 2,322 crore from promoters and key officials as they did not convert the warrants issued to them into equity. The promoters did not convert as the company’s shares were trading about 74 per cent below the conversion price of Rs 540 per warrant.
IBREL had issued 43 million warrants in November 2007 to promoters and joint managing directors on a preferential basis. The last date for conversion was May 4 2009.
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