New York: India has regained its position at the top of an annual rating of countries' retail sector potential that is being released a week after Ikea, the Swedish home retailer, said it was abandoning an attempt to open stores there.
The authors of AT Kearney's 2009 Global Retail Development Index said that India's largely unmodernised retail sector remained attractive to both domestic and international retailers, in spite of government regulations that prevent 100 per cent foreign ownership of retail stores.
"Overall ... the country risk is low and the market potential is still very high, making it the most attractive option for growth," the report says.
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Wal-Mart, the largest US retailer, opened a partly-owned cash-and-carry warehouse store in Punjab last month in a joint-venture with Bharti Enterprises, while Tesco and Carrefour are also planning joint venture stores.
Hana Ben-Shabat, one of the report's authors, said foreign companies including Jean-Claude Biguine, the French hair salon, Inditex's Zara and Arcadia's Top Shop were also developing arrangements to establish their brands with Indian consumers.
"Maybe the model won't be owning the establishment, but getting the brand into market place," she said.
AT Kearney argues that the economic recession has increased the opportunities for cross-border investment by those retailers who are still generating significant cash-flow as a result of the depressed costs of assets and real estate.
India remained ahead of both Russia and China in the index, and pushed Vietnam out of the number one slot amid concerns about the impact of the global recession on Vietnam's export-based economy, and the collapse of the country's real estate bubble.
But the report notes that Vietnam will allow foreign companies 100 per cent ownership of food retailing from January.
Ben-Shabat also noted that in Russia the impact of the slump had reduced the potential cost of assets, increasing existing interest in deals and acquisitions of a number of significant players.
In China, in third place, the report notes increased foreign interest in smaller format convenience stores, rather than the supermarkets and hypermarkets.
Wednesday, June 17, 2009
Budget 2009: Govt should provide stimulus to real estate sector
Although, Indian economy as a whole has largely been insulated against the global economic slowdown, the Indian real estate sector has been severely been affected keeping in sync with the fortunes of the global real estate sector. Demand dynamics of one large industry decide the fortune of its ancillary industries. The ups and downs of the real estate market have serious implications on companies whose future is linked to the housing and infrastructure demand in India.
The risk straddle includes industries such as furniture, granites, ceramic tiles, paints, power cables, glass, electrical equipments and interior designers among others, which exemplifies the significant backward and forward linkages that the real estate sector has with the economy. There is a need for the Government to provide a stimulus for the industry so as to revive this ailing spectrum of sectors. And what better time can there be, than the forthcoming budget!
Some of the measures that should be taken by the Government are as follows:
• Given the demand for and emphasis of the Government of India on affordable housing (through lower interest rates on loans upto Rs 30 lakhs) there is a need to reintroduce tax holiday under section 80IB for housing. • Tax holiday available to hotels under section 80ID to be extended 10 years from existing time limit of 5 yrs. The gestation period in hotel industry, itself, stretches from 4 to 5 yrs. • To garner resources for providing liquidity to the Indian real estate industry, there is a need to: o Re-introduce 'tax pass through' status for domestic venture capital funds that invest in the Indian real estate sector; o Clarify that the Real Estate Mutual Funds are to be treated as equity oriented fund; o Extend the external commercial borrowing scheme to the entire Indian real estate sector including Special Economic Zones and not just 100 acre township, hotels, hospitals in view of the moderate international costs of borrowing; • Encourage states to reduce stamp duty to 5 percent and to provide a system of credit for each stage of sale i.e. levy on value addition. • Increase in deduction available under section 24(b) to Rs 300,000, against, existing limit of Rs 150,000 for self occupied houses. • Increase the basic exemption limit under provisions of Wealth tax Act to Rs 50 lakhs against existing limit of Rs 15 lakhs keeping in perspective the price of property, etc. • Service tax provisions should be amended as follows: o It has been clarified that no service tax should be levied in case pre-construction sale of residential complex where the seller and the buyer enter into an 'agreement to sell'. Similar clarification should be issued for pre-construction sale of commercial complex. o Service tax on renting immovable property should be abolished • To reduce the cost of procurement of capital equipments for construction purposes there should reduction/ rationalization of customs duty (exemption from special additional duty) and excise duty (8 percent to 4 percent)
In summary, the above measures would go a long way in providing much needed succour to the Indian real estate sector in these difficult times.
The risk straddle includes industries such as furniture, granites, ceramic tiles, paints, power cables, glass, electrical equipments and interior designers among others, which exemplifies the significant backward and forward linkages that the real estate sector has with the economy. There is a need for the Government to provide a stimulus for the industry so as to revive this ailing spectrum of sectors. And what better time can there be, than the forthcoming budget!
Some of the measures that should be taken by the Government are as follows:
• Given the demand for and emphasis of the Government of India on affordable housing (through lower interest rates on loans upto Rs 30 lakhs) there is a need to reintroduce tax holiday under section 80IB for housing. • Tax holiday available to hotels under section 80ID to be extended 10 years from existing time limit of 5 yrs. The gestation period in hotel industry, itself, stretches from 4 to 5 yrs. • To garner resources for providing liquidity to the Indian real estate industry, there is a need to: o Re-introduce 'tax pass through' status for domestic venture capital funds that invest in the Indian real estate sector; o Clarify that the Real Estate Mutual Funds are to be treated as equity oriented fund; o Extend the external commercial borrowing scheme to the entire Indian real estate sector including Special Economic Zones and not just 100 acre township, hotels, hospitals in view of the moderate international costs of borrowing; • Encourage states to reduce stamp duty to 5 percent and to provide a system of credit for each stage of sale i.e. levy on value addition. • Increase in deduction available under section 24(b) to Rs 300,000, against, existing limit of Rs 150,000 for self occupied houses. • Increase the basic exemption limit under provisions of Wealth tax Act to Rs 50 lakhs against existing limit of Rs 15 lakhs keeping in perspective the price of property, etc. • Service tax provisions should be amended as follows: o It has been clarified that no service tax should be levied in case pre-construction sale of residential complex where the seller and the buyer enter into an 'agreement to sell'. Similar clarification should be issued for pre-construction sale of commercial complex. o Service tax on renting immovable property should be abolished • To reduce the cost of procurement of capital equipments for construction purposes there should reduction/ rationalization of customs duty (exemption from special additional duty) and excise duty (8 percent to 4 percent)
In summary, the above measures would go a long way in providing much needed succour to the Indian real estate sector in these difficult times.
Lehman Property Boss Returns
Mark Walsh, the lead executive who loaded Lehman Brothers Holdings Inc. with toxic property investments, is part of a group chosen by Lehman to take over the bankrupt firm's real-estate private-equity arm.
Mr. Walsh and a team of former Lehman colleagues are setting up a new stand-alone business to manage the private-equity portfolio. They stand to profit if the portfolio of distressed assets -- for which they once paid top dollar -- recovers only some of its value.
The arrangement is a remarkable second act for 49-year-old Mr. Walsh, formerly Lehman's global head of real estate. When it filed for bankruptcy protection last September, Lehman directly held roughly $43 billion worth of real-estate loans and assets, exposure that played a key role in its collapse.
Federal prosecutors continue to investigate, among other things, whether Mr. Walsh and his team improperly valued commercial-real-estate holdings to prop up Lehman's balance sheet.
New Jersey Attorney General Anne Milgram also has filed a civil suit against Mr. Walsh and others accusing them of defrauding the state's pension funds by misrepresenting the value of Lehman's real-estate holdings.
Anton Troianovski/The Wall Street Journal The InterContinental hotel in New York's Times Square is among the property investments made by Lehman Brothers Real Estate Partners.A lawyer for Mr. Walsh declined to comment
While helping strike deals using Lehman's own balance sheet, Mr. Walsh also oversaw a separate unit called Lehman Brothers Real Estate Partners. Set up as a trio of private-equity funds, the unit eventually invested in $5.6 billion worth of deals, attracting some of the nation's largest pension funds as backers. Lehman itself also contributed about 20% of the unit's capital.
Properties in the portfolio include the 34-story InterContinental hotel in New York's Times Square, 60 hotels in the United Kingdom, and a commercial-real-estate development in Mumbai called Santa Cruz. About three-quarters of the portfolio is located outside the U.S. And it is valued at about 50% of its original purchase price, according to people familiar with the matter.
To maximize recovery for creditors, Lehman's restructuring advisers Alvarez & Marsal have been trying to find a buyer for the unit since late last year. Dozens of prospective buyers expressed interest, but it winnowed the group to five finalists, including AREA Property Partners, formerly Apollo Real Estate Advisors LP, and a group led by Raymond Mikulich, the former co-head of the group who left the firm in early 2007.
Lehman's estate eventually chose a management group that had run the business for years, which includes Mr. Walsh and executives Brett Bossung and Mark Newman. Lehman will retain its roughly 20% stake and hold seats on the new firm's oversight committees.
The group paid about $10 million for the business, according to a person familiar with the deal. The number was low, say people familiar with the matter, because continuing management fees are likely to be consumed by the costs of managing the existing properties.
The fund also will shrink the size of its most recent vehicle, a $3.2 billion fund, closed just days before Lehman's collapse. The fund will forgo about $1.6 billion in uninvested capital from investors, limiting new management fees.
The funds' new managers and Lehman creditors will thus only profit if the value of the properties increase over time. Lehman's investors agreed to "reset' some incentive fees for the managers, giving them payouts if asset values rise above their current distressed levels.
Typically managers would receive 20% of the "carry," or cut of certain profits, but that figure is expected to be lower for the new management, according to people familiar with the transaction.
"We fully support this management team and believe not only that they are best equipped to maximize the value of the assets," a Lehman spokeswoman said, "but also that they will be extremely successful in the growth of the new platform."
The transaction follows similar spinouts by the Lehman estate, including its flagship private-equity fund and its venture-capital unit.
The largest of those deals was a management buyout of Neuberger Berman, Lehman's money-management unit, which is 51% owned by its employees, with Lehman retaining the balance.
The Lehman group's sale comes at a time of crisis for the real-estate fund industry. During the boom years, funds run by Wall Street banks and boutique firms funneled billions of dollars from pension funds and other big investors into highly levered bets on office buildings, shopping malls, warehouses and other commercial property around the world.
Funds at Goldman Sachs Group Inc., Morgan Stanley and elsewhere have been marked down by more than half their equity value. Industry experts and investors, known as limited partners, expect the losses to mount.
Monday, June 15, 2009
Pay your property tax online in Bangalore Now
Starting July, you can pay your property tax online! No more standing in
queues and waiting for assistance at help
centres. Pay your tax using VISA/Mastercard
online without incurring any extra charge for the card itself. More options, more forms and easy ways -- it's going to be less taxing for those already on the taxpayers' list, says the BBMP.
The online system will be in place for the next `block period' (2009-10), which begins on July 1.
"We took the decision while discussing the action plan for 2009-10 at a meeting of revenue officers with outgoing commissioner S Subramanya on Wednesday," BBMP deputy commissioner (resources) U A Vasanth Rao said.
"We'll also hold training sessions before the system becomes operational in full capacity," he added.
By going online, the Palike hopes to redress many tax issues of the current block period. Reducing manual process, extending services to property owners outside the city and accepting only completely filled forms are some corrective measures.
The new system will also have a provision for taxpayers who want to pay by cheque. They can do so by downloading the filled-up form and submitting it at the respective help centres.
The online module is being developed by the National Informatics Centre and IDBI bank has agreed to provide the `payment gateway' free of any extra charge on the card user.
This is unlike the system currently followed in Chennai, Hyderabad and Delhi. Two new forms
The new `block period' will also have two kinds of forms available online. One is `Form IV' for properties with no changes in built-up area or property usage, and `Form V' for those with changes in these parameters.
"Taxpayers will have to use the appropriate form. But with the property database getting updated, the software should continuously update the taxpayer database," Vasanth Rao explained.
How it works
-- One can opt to pay online through a link on BBMP website (www.bmponline.org)
-- Enter your application number in the box and get access to details of previous tax paid
-- Fill up mandatory fields along with the tax calculated and submit it
-- Pay your tax online using VISA/Mastercard
-- Download the acknowledgement receipt on submission. A hard copy of the same will also be sent by BBMP
-- If you want to pay by cheque, download the filled-up form and submit it along with the cheque at your help centre
queues and waiting for assistance at help
centres. Pay your tax using VISA/Mastercard
online without incurring any extra charge for the card itself. More options, more forms and easy ways -- it's going to be less taxing for those already on the taxpayers' list, says the BBMP.
The online system will be in place for the next `block period' (2009-10), which begins on July 1.
"We took the decision while discussing the action plan for 2009-10 at a meeting of revenue officers with outgoing commissioner S Subramanya on Wednesday," BBMP deputy commissioner (resources) U A Vasanth Rao said.
"We'll also hold training sessions before the system becomes operational in full capacity," he added.
By going online, the Palike hopes to redress many tax issues of the current block period. Reducing manual process, extending services to property owners outside the city and accepting only completely filled forms are some corrective measures.
The new system will also have a provision for taxpayers who want to pay by cheque. They can do so by downloading the filled-up form and submitting it at the respective help centres.
The online module is being developed by the National Informatics Centre and IDBI bank has agreed to provide the `payment gateway' free of any extra charge on the card user.
This is unlike the system currently followed in Chennai, Hyderabad and Delhi. Two new forms
The new `block period' will also have two kinds of forms available online. One is `Form IV' for properties with no changes in built-up area or property usage, and `Form V' for those with changes in these parameters.
"Taxpayers will have to use the appropriate form. But with the property database getting updated, the software should continuously update the taxpayer database," Vasanth Rao explained.
How it works
-- One can opt to pay online through a link on BBMP website (www.bmponline.org)
-- Enter your application number in the box and get access to details of previous tax paid
-- Fill up mandatory fields along with the tax calculated and submit it
-- Pay your tax online using VISA/Mastercard
-- Download the acknowledgement receipt on submission. A hard copy of the same will also be sent by BBMP
-- If you want to pay by cheque, download the filled-up form and submit it along with the cheque at your help centre
Incentives to protect heritage properties In Mumbai
In a bid to rein in the steady metamorphosis of bungalows into highrises, art deco single-screen theatres into multiplexes and quaint two-storeyed buildings in South Mumbai into towers with glass and steel façades, the state government is planning to award incentives to owners of listed heritage properties.
The Mumbai Heritage Conservation Committee is studying ways to reward conservation of the remaining vestiges of city’s architectural history. This may range from waivers on property tax, entertainment tax rebate in case of theatres, soft loans or grants for restoration of the property, declaring special zones for heritage, liberal use of heritage TDR or giving income tax benefits on money spent on conserving such properties.
“Under the current heritage regulatory framework, there is a substantial liability on the home owner once his property is listed as a heritage structure with no benefit for him,” said Pankaj Joshi, executive director of Urban Design Research Institute (UDRI).
On instructions from the state Urban Development Department, the heritage committee is now studying reports submitted by the Bombay Environmental Action Group (BEAG) and another by a committee under former heritage committee chief DM Sukthankar so as to make heritage conservation viable in Mumbai. “We are compiling extracts from each of the regulations to prepare revised heritage regulations for the city,” said heritage committee chief DK Afzalpurkar.
The BEAG report, for instance, recommends the practice in Hyderabad where no building permission is issued if the owner deliberately allows his property to deteriorate and crumble eventually. “In order to make it viable for owners, we have also recommended that they be allowed to have commercial establishments in residential zones as long as the listed structure is maintained as it is,” said Shyam Chainani of BEAG.
City-based historian Sharada Dwivedi points out that when the heritage listing was initially done, several privately owned heritage structures were listed as grade 3 just because the owners were financially incapable of maintaining the high standards of façade and interiors meant for grade 2 structures. “Today many of these have been bought over by builders and razed down.”
The Mumbai Heritage Conservation Committee is studying ways to reward conservation of the remaining vestiges of city’s architectural history. This may range from waivers on property tax, entertainment tax rebate in case of theatres, soft loans or grants for restoration of the property, declaring special zones for heritage, liberal use of heritage TDR or giving income tax benefits on money spent on conserving such properties.
“Under the current heritage regulatory framework, there is a substantial liability on the home owner once his property is listed as a heritage structure with no benefit for him,” said Pankaj Joshi, executive director of Urban Design Research Institute (UDRI).
On instructions from the state Urban Development Department, the heritage committee is now studying reports submitted by the Bombay Environmental Action Group (BEAG) and another by a committee under former heritage committee chief DM Sukthankar so as to make heritage conservation viable in Mumbai. “We are compiling extracts from each of the regulations to prepare revised heritage regulations for the city,” said heritage committee chief DK Afzalpurkar.
The BEAG report, for instance, recommends the practice in Hyderabad where no building permission is issued if the owner deliberately allows his property to deteriorate and crumble eventually. “In order to make it viable for owners, we have also recommended that they be allowed to have commercial establishments in residential zones as long as the listed structure is maintained as it is,” said Shyam Chainani of BEAG.
City-based historian Sharada Dwivedi points out that when the heritage listing was initially done, several privately owned heritage structures were listed as grade 3 just because the owners were financially incapable of maintaining the high standards of façade and interiors meant for grade 2 structures. “Today many of these have been bought over by builders and razed down.”
Saturday, June 13, 2009
THE NR EYE: Overseas Indians may shift focus to real estate market
With the market sentiment buoyant over the prospects of a stable and investment-friendly government at the Centre and a distinct exchange rate advantage, overseas Indians may once again turn their attention to the rapidly-recovering real estate market in India.
More so, as market regulator Sebi (Securities and Exchange Board of India) has begun deliberations with experts to set up a framework for Real Estate Investment Trusts (REITs). In April last year, Sebi had prepared norms for real estate mutual fund. But the launch of real estate MF was delayed due to the market meltdown.
The realty sector, battered by the financial crisis, is looking at the real estate investment trust (REIT) market to lift the spectre of gloom.
Over the past 3-4 months, the global REIT market has witnessed a sharp pullback, recording an equity infusion of $8.7 bn. Equity infusion by investors at this point in cycle suggests that they see value and opportunity at current price levels.
According to a recent research by brokerage Motilal Oswal, the improvement in the global REIT market will positively impact commercial real estate in India, which lacks any monetisation vehicle at present. If the recovery in REIT demand continues, it might prompt leading commercial real estate players such as DLF, Unitech and IBREL to re-draw their REIT plans.
A real estate investment trust or REIT is a vehicle for a company that invests in real estate, which helps in reducing or eliminating corporate income-tax. An REIT is a trust that uses the pooled capital of many investors to purchase and manage real estate assets and/or mortgage loans.
It is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. It receives special tax considerations and generally offers investors high yields. Like other corporations, REITs can be publicly or privately held. Experts say REIT provides a similar structure for investment in real estate as mutual funds do for investment in stocks.
Real Estate Mutual Funds (REMFs) are the Indian avatar of the international REITs platform, adapted to the existing Indian mutual funds platform. The asset management company (AMC) invests in a range of real estate assets around the country and creates a fund based on those assets. Investors can buy shares in those funds, which are traded on a daily basis on stock exchanges. The value of the shares depends on the value of the underlying real estate assets.
If the sector needs quick money, these funds are liquid assets, which can be sold conveniently. The flexibility of investment will offer a great sense of confidence as they can liquidate their investment faster than the physical assets.
As for their potential in the current context - while everybody is now working on entry and creating assets, the important question of who will buy these assets to provide an exit to the developers / investors needs to be addressed. The leveraging allowed in case of Indian REITs is the lowest (at 20 per cent of the value) compared to 35 per cent in case of Malaysia, Hong Kong, Singapore, and Taiwan and 200 per cent in case of Korea. This could result in a lower yield - and because it is not really leveraged, the risk taken is also more.
According to Shobhit Agarwal, Joint MD — Capital Markets, Jones Lang Lasalle Meghraj, products like this should be more for low-risk–low-return investors, or most suited for risk-averse investors.
Speaking to Express Estates, Dr Devinder Gupta, CMD, CENTURY 21 India, opined that with the formation of a stable government at the Centre, the realty sector has a high expectation from the new government.
Fortunately, the sentiment part which has contributed significantly to make the market depressed in last FY 08-09 is now reversing and is reviving on optimistic side. These sentiments have a huge impact on the level of consumer confidence and reviving of market. This has been reflected in report coming from different cities showing revival of real estate transactions.
More so, as market regulator Sebi (Securities and Exchange Board of India) has begun deliberations with experts to set up a framework for Real Estate Investment Trusts (REITs). In April last year, Sebi had prepared norms for real estate mutual fund. But the launch of real estate MF was delayed due to the market meltdown.
The realty sector, battered by the financial crisis, is looking at the real estate investment trust (REIT) market to lift the spectre of gloom.
Over the past 3-4 months, the global REIT market has witnessed a sharp pullback, recording an equity infusion of $8.7 bn. Equity infusion by investors at this point in cycle suggests that they see value and opportunity at current price levels.
According to a recent research by brokerage Motilal Oswal, the improvement in the global REIT market will positively impact commercial real estate in India, which lacks any monetisation vehicle at present. If the recovery in REIT demand continues, it might prompt leading commercial real estate players such as DLF, Unitech and IBREL to re-draw their REIT plans.
A real estate investment trust or REIT is a vehicle for a company that invests in real estate, which helps in reducing or eliminating corporate income-tax. An REIT is a trust that uses the pooled capital of many investors to purchase and manage real estate assets and/or mortgage loans.
It is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. It receives special tax considerations and generally offers investors high yields. Like other corporations, REITs can be publicly or privately held. Experts say REIT provides a similar structure for investment in real estate as mutual funds do for investment in stocks.
Real Estate Mutual Funds (REMFs) are the Indian avatar of the international REITs platform, adapted to the existing Indian mutual funds platform. The asset management company (AMC) invests in a range of real estate assets around the country and creates a fund based on those assets. Investors can buy shares in those funds, which are traded on a daily basis on stock exchanges. The value of the shares depends on the value of the underlying real estate assets.
If the sector needs quick money, these funds are liquid assets, which can be sold conveniently. The flexibility of investment will offer a great sense of confidence as they can liquidate their investment faster than the physical assets.
As for their potential in the current context - while everybody is now working on entry and creating assets, the important question of who will buy these assets to provide an exit to the developers / investors needs to be addressed. The leveraging allowed in case of Indian REITs is the lowest (at 20 per cent of the value) compared to 35 per cent in case of Malaysia, Hong Kong, Singapore, and Taiwan and 200 per cent in case of Korea. This could result in a lower yield - and because it is not really leveraged, the risk taken is also more.
According to Shobhit Agarwal, Joint MD — Capital Markets, Jones Lang Lasalle Meghraj, products like this should be more for low-risk–low-return investors, or most suited for risk-averse investors.
Speaking to Express Estates, Dr Devinder Gupta, CMD, CENTURY 21 India, opined that with the formation of a stable government at the Centre, the realty sector has a high expectation from the new government.
Fortunately, the sentiment part which has contributed significantly to make the market depressed in last FY 08-09 is now reversing and is reviving on optimistic side. These sentiments have a huge impact on the level of consumer confidence and reviving of market. This has been reflected in report coming from different cities showing revival of real estate transactions.
Indian realty pulling a lot more money from private equity, NRIs
After foreign institutional investors (FIIs) lapped up realty stocks in the recently concluded equity placements by property majors, India-focused private equity players and non-resident Indians (NRIs) are loosening their purse strings in the real estate space.
Delhi-based realty major Parsvnath Developers said on Thursday it has signed an agreement with realty fund Red Fort Capital to invest Rs 90 crore in its premium luxury project in Delhi, making it the first PE deal in the housing segment in the June quarter.
Red Fort picked up an 18 per cent stake in Parsvnath Landmark Developers Pvt Ltd (PLDPL), which is developing the 16.84-acre project in Civil Lines in north Delhi.
SUN Apollo Ventures, an international property fund, picked up a 15 per cent stake in Mumbai-based Keystone Realtors for Rs 300 crore earlier this year, after a long lull in the PE-realty space.
“PE is getting back in real estate as valuations have become reasonable, confidence is reviving and end-user demand is coming back. Though demand for premium housing is down, investors and buyers are showing interest in good projects,” said Anuj Puri, chairman of Jones Lang LaSalle Meghraj (JLLM), an international property consultancy.
FIIs oversubscribed for stocks in the qualified institutional placements (QIPs) of Unitech and Indiabulls and bought stake sold by the promoters of DLF, the country’s largest developer, indicating a renewed interest by investors in property space.
In a separate development, Maharashtra Chamber of Housing Industry (MCHI), a realty developers’ body, said on Thursday its twelfth India Realty Expo 2009 held in Dubai saw 106 flats worth Rs 65.33 crore being booked.
“Around 86 flats worth Rs 80.18 crore are in the pipeline for NRIs when they come to India in July-August on their annual vacation,” Zubin Mehta, chief executive of MCHI, said.
The expo evoked an encouraging response, with 2,700 NRIs visiting the exhibition during June 4-6, the release said. “The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo,” Mehta added
Delhi-based realty major Parsvnath Developers said on Thursday it has signed an agreement with realty fund Red Fort Capital to invest Rs 90 crore in its premium luxury project in Delhi, making it the first PE deal in the housing segment in the June quarter.
Red Fort picked up an 18 per cent stake in Parsvnath Landmark Developers Pvt Ltd (PLDPL), which is developing the 16.84-acre project in Civil Lines in north Delhi.
SUN Apollo Ventures, an international property fund, picked up a 15 per cent stake in Mumbai-based Keystone Realtors for Rs 300 crore earlier this year, after a long lull in the PE-realty space.
“PE is getting back in real estate as valuations have become reasonable, confidence is reviving and end-user demand is coming back. Though demand for premium housing is down, investors and buyers are showing interest in good projects,” said Anuj Puri, chairman of Jones Lang LaSalle Meghraj (JLLM), an international property consultancy.
FIIs oversubscribed for stocks in the qualified institutional placements (QIPs) of Unitech and Indiabulls and bought stake sold by the promoters of DLF, the country’s largest developer, indicating a renewed interest by investors in property space.
In a separate development, Maharashtra Chamber of Housing Industry (MCHI), a realty developers’ body, said on Thursday its twelfth India Realty Expo 2009 held in Dubai saw 106 flats worth Rs 65.33 crore being booked.
“Around 86 flats worth Rs 80.18 crore are in the pipeline for NRIs when they come to India in July-August on their annual vacation,” Zubin Mehta, chief executive of MCHI, said.
The expo evoked an encouraging response, with 2,700 NRIs visiting the exhibition during June 4-6, the release said. “The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo,” Mehta added
Housing sector back in business Assetventures
Spurred by price corrections, new launches, lowering of interest rates, increase in sales inquiries and, more importantly, the newfound mantra of
‘affordable housing’, the real estate industry has started showing signs of recovery.
Industry body Assocham has gone to the extent of saying that the real estate recovery is possible in the coming three months. A recent Assocham Business Barometer (ABB) survey has found that anticipating strong policy measures for the real estate in the forthcoming Budget, embattled realty majors see positive signs of recovery taking place within the next three months as affordable housing projects rev up demand and improved cash flows address their liquidity concerns.
As per the survey, a whopping 92% of the respondent developers considered affordable housing as the most dominating segment to shore up the demand in real estate sector. And the policy actions supplementing the robust demand in the housing sector are likely to hold the key for a speedy recovery phase in the sector.
Although the findings of this survey may seem to be too optimistic, particularly in view of the prolonged slowdown in the industry, but taking the current positive signs in the property market into account, both industry majors as well as experts feel the real estate recovery is not a distant dream. And they have ample reasons to believe this.
Firstly, after a gap of more than a year, some real ‘actions’ are being witnessed in the realty market, including the high-profile launches of some major projects coupled with increased sales inquiries. Along with that, some realty majors are also said to have recorded an overwhelming response for their upcoming projects.
For instance, the Jaypee group claims to have booked all the 3300 apartments of Jaypee Greens Aman, its new residential project in Noida, within 24 hours of their launch, while Capital Greens, DLF’s first residential project in Delhi, is claimed to have showed bookings of 1,400 flats on the first day itself. Such instances only prove that buyers and strategic investors are once again warming up to the sector, though in a restricted manner.
Secondly, the Indian economy recorded a better-than-expected growth rate of 6.7% in 2008-09. “The GDP growth rate, clocked in tumultuous times of global financial crisis, lends credibility to the presence of real domestic demand and consumption continuing to fuel the economy, though albeit at a reduced growth rate,” says Neeraj Bansal, associate director - advisory services, KPMG.
Thirdly, sensing a near-term economic recovery and, resultantly, expecting the realty sector to outperform other sectors in the months to come, fund managers are reposing their faith in real estate. This explains why in the month of April, mutual fund houses increased their exposure in the realty sector to Rs 308.16 crore as against Rs 98.76 crore in March, translating into a whopping 212.03% rise in the exposure.
Fourthly, there is a renewed faith of overseas investors also, stemming from the series of steps taken by developers to improve their financial position.” Unitech has, for instance, cut debt by Rs 2,000 crore while DLF has repaid Rs 1,700 crore of loans in the past year. And similar is the case with lots of other large and mediumsized developers,” says Bansal.
Fifthly, home loan disbursements by the country’s top lenders, which signal the actual demand for homes, is also improving. HDFC saw its fourth quarter disbursals going up by 17.5% at Rs 12,400 crore, while LIC Housing saw an increase of 42% and 22% in March and in Q4, respectively. Moreover, a general softening of interest rates has also helped developers cut their borrowing costs by as much as 300 basis points.
‘affordable housing’, the real estate industry has started showing signs of recovery.
Industry body Assocham has gone to the extent of saying that the real estate recovery is possible in the coming three months. A recent Assocham Business Barometer (ABB) survey has found that anticipating strong policy measures for the real estate in the forthcoming Budget, embattled realty majors see positive signs of recovery taking place within the next three months as affordable housing projects rev up demand and improved cash flows address their liquidity concerns.
As per the survey, a whopping 92% of the respondent developers considered affordable housing as the most dominating segment to shore up the demand in real estate sector. And the policy actions supplementing the robust demand in the housing sector are likely to hold the key for a speedy recovery phase in the sector.
Although the findings of this survey may seem to be too optimistic, particularly in view of the prolonged slowdown in the industry, but taking the current positive signs in the property market into account, both industry majors as well as experts feel the real estate recovery is not a distant dream. And they have ample reasons to believe this.
Firstly, after a gap of more than a year, some real ‘actions’ are being witnessed in the realty market, including the high-profile launches of some major projects coupled with increased sales inquiries. Along with that, some realty majors are also said to have recorded an overwhelming response for their upcoming projects.
For instance, the Jaypee group claims to have booked all the 3300 apartments of Jaypee Greens Aman, its new residential project in Noida, within 24 hours of their launch, while Capital Greens, DLF’s first residential project in Delhi, is claimed to have showed bookings of 1,400 flats on the first day itself. Such instances only prove that buyers and strategic investors are once again warming up to the sector, though in a restricted manner.
Secondly, the Indian economy recorded a better-than-expected growth rate of 6.7% in 2008-09. “The GDP growth rate, clocked in tumultuous times of global financial crisis, lends credibility to the presence of real domestic demand and consumption continuing to fuel the economy, though albeit at a reduced growth rate,” says Neeraj Bansal, associate director - advisory services, KPMG.
Thirdly, sensing a near-term economic recovery and, resultantly, expecting the realty sector to outperform other sectors in the months to come, fund managers are reposing their faith in real estate. This explains why in the month of April, mutual fund houses increased their exposure in the realty sector to Rs 308.16 crore as against Rs 98.76 crore in March, translating into a whopping 212.03% rise in the exposure.
Fourthly, there is a renewed faith of overseas investors also, stemming from the series of steps taken by developers to improve their financial position.” Unitech has, for instance, cut debt by Rs 2,000 crore while DLF has repaid Rs 1,700 crore of loans in the past year. And similar is the case with lots of other large and mediumsized developers,” says Bansal.
Fifthly, home loan disbursements by the country’s top lenders, which signal the actual demand for homes, is also improving. HDFC saw its fourth quarter disbursals going up by 17.5% at Rs 12,400 crore, while LIC Housing saw an increase of 42% and 22% in March and in Q4, respectively. Moreover, a general softening of interest rates has also helped developers cut their borrowing costs by as much as 300 basis points.
Thursday, June 11, 2009
Realty firms focus on ‘affordable’ homes to boost sales, profits Assetventures
To boost slowing demand in the realty sector and tap the growing market for affordable housing, realty firm Unitech Ltd will build 20,000 homes this year, priced between Rs10 lakh and Rs30 lakh, launching its first such project in Chennai this month.
India’s second largest property developer by market value on Tuesday launched its new initiative branded Uni Homes, which will have apartment sizes starting at 660 sq. ft.
The realty firm said its second such project will be constructed in Manesar in Haryana, on the outskirts of New Delhi. The apartments in Chennai would cost around Rs10 lakh and those at Manesar around Rs15 lakh, it said.
Faced with falling sales on the back of an economic slowdown, India’s realty companies have been launching what they call affordable housing because they say there is robust demand in this segment.
Earlier this year, Unitech had launched a project in Gurgaon, south-east of New Delhi, where apartments are priced between Rs28 lakh and Rs40 lakh. All 750 homes were sold in 45 days, the firm said. Encouraged by the response, it launched another project, also in Gurgaon, with prices at Rs35-45 lakh. It has so far sold 180 of the 200 flats in that project.
In May, Mumbai-based Tata Housing Development Co. Ltd launched a low-cost housing project branded Shubh Griha in Boisar, around 50km north of Mumbai. The apartments of 283 sq. ft, 360 sq. ft and 465 sq. ft would cost between Rs3.9 lakh and Rs6.7 lakh, the company said.
In March, Mumbai-based developer Lodha Group launched Casa Bella, an integrated township project in Dombivalli, a Mumbai suburb, where apartments would cost between Rs11.7 lakh and Rs24.3 lakh.
In August, Bangalore-based realtor Puravankara Projects Ltd launched a unit called Provident Housing and Infrastructure Ltd to construct apartments priced at Rs10-20 lakh in cities such as Bangalore, Chennai, Hyderabad, Coimbatore and Mysore.
In May last year, Omaxe Ltd, another New Delhi-based developer, set up a subsidiary called National Affordable Housing and Infrastructure Ltd to build homes in the Rs3-15 lakh category in smaller cities such as Sonepat in Haryana, and Nimrana and Bhiwadi in Rajasthan.
“There is a demand in the affordable housing segment. Interest rates have come down and that helps because people can take loan at a cheaper cost,” said Anshuman Magazine, managing director of CB Richard Ellis, a real estate consultancy firm. “There is also a renewal of confidence among buyers.”
Unitech expects to start its Uni Homes projects in Hyderabad, Bangalore, Kolkata and Lucknow.
The company said these projects will all be well located. “The project in Chennai will not be very far away from the city.”
Unitech plans to invest Rs1,700 crore this year to build these homes.
“This is just the construction cost,” the spokesperson said. “Land for the projects has already been paid for,” the spokesperson said.
The real estate company says it owns around 8,000 acres of land in various cities, on which it can develop some 500 million sq. ft of residential and commercial space.
India’s second largest property developer by market value on Tuesday launched its new initiative branded Uni Homes, which will have apartment sizes starting at 660 sq. ft.
The realty firm said its second such project will be constructed in Manesar in Haryana, on the outskirts of New Delhi. The apartments in Chennai would cost around Rs10 lakh and those at Manesar around Rs15 lakh, it said.
Faced with falling sales on the back of an economic slowdown, India’s realty companies have been launching what they call affordable housing because they say there is robust demand in this segment.
Earlier this year, Unitech had launched a project in Gurgaon, south-east of New Delhi, where apartments are priced between Rs28 lakh and Rs40 lakh. All 750 homes were sold in 45 days, the firm said. Encouraged by the response, it launched another project, also in Gurgaon, with prices at Rs35-45 lakh. It has so far sold 180 of the 200 flats in that project.
In May, Mumbai-based Tata Housing Development Co. Ltd launched a low-cost housing project branded Shubh Griha in Boisar, around 50km north of Mumbai. The apartments of 283 sq. ft, 360 sq. ft and 465 sq. ft would cost between Rs3.9 lakh and Rs6.7 lakh, the company said.
In March, Mumbai-based developer Lodha Group launched Casa Bella, an integrated township project in Dombivalli, a Mumbai suburb, where apartments would cost between Rs11.7 lakh and Rs24.3 lakh.
In August, Bangalore-based realtor Puravankara Projects Ltd launched a unit called Provident Housing and Infrastructure Ltd to construct apartments priced at Rs10-20 lakh in cities such as Bangalore, Chennai, Hyderabad, Coimbatore and Mysore.
In May last year, Omaxe Ltd, another New Delhi-based developer, set up a subsidiary called National Affordable Housing and Infrastructure Ltd to build homes in the Rs3-15 lakh category in smaller cities such as Sonepat in Haryana, and Nimrana and Bhiwadi in Rajasthan.
“There is a demand in the affordable housing segment. Interest rates have come down and that helps because people can take loan at a cheaper cost,” said Anshuman Magazine, managing director of CB Richard Ellis, a real estate consultancy firm. “There is also a renewal of confidence among buyers.”
Unitech expects to start its Uni Homes projects in Hyderabad, Bangalore, Kolkata and Lucknow.
The company said these projects will all be well located. “The project in Chennai will not be very far away from the city.”
Unitech plans to invest Rs1,700 crore this year to build these homes.
“This is just the construction cost,” the spokesperson said. “Land for the projects has already been paid for,” the spokesperson said.
The real estate company says it owns around 8,000 acres of land in various cities, on which it can develop some 500 million sq. ft of residential and commercial space.
Demand for homes inching up, but recovery likely to take months
Home sales in India are trickling back in some sections of the market, but industry watchers say a rebound is months away as buyers await further price corrections.
Builders have begun new projects after a year-long hiatus, and are also swapping older premium project proposals for cheaper ones to restart sales as they try to beat a severe cash crunch.
“While the market has turned up, I don’t expect it to be back to 2007 or 2008-beginning levels for another six months or eight months,” said Rajesh Goenka, chairman, Axiom Estates, a real estate agency servicing overseas Indians, mostly in the earning bracket of $100,000-300,000 (around Rs47.5 lakh-Rs1.5 crore) a year.
Indian realtors have spent months battling a severe cash crunch as high interest rates and a slowdown kept buyers away and funding from investors dried up. But, a spate of interest rate cuts and a sentiment revival have encouraged builders to focus on middle-income buyers by launching new projects or re-marketing older ones as mid-income properties.
Unitech Ltd, Parsvnath Developers Ltd and India’s top listed real estate firm DLF Ltd redesigned projects and cut costs to appeal to a wider consumer base. Demand is swaying towards affordable housing.
In the quarter to March, half of the homes sold were in 114 new projects of the 2,000 available for sale, according to estimates by realty rating and research agency, Leases Foras Real Estate Rating and Research.
Even though builders say new projects are being lapped up, home loans are not picking up as fast, suggesting that the homes were picked up by investors, said Pankaj Kapoor, founder and chief executive, Leases Foras.
Homebuyers say that the ground reality hasn’t changed much. Prices haven’t fallen as anticipated with builders’ standing guard, hoping prices will continue to firm and investors, too, hope for a return in pricing.
Builders have begun new projects after a year-long hiatus, and are also swapping older premium project proposals for cheaper ones to restart sales as they try to beat a severe cash crunch.
“While the market has turned up, I don’t expect it to be back to 2007 or 2008-beginning levels for another six months or eight months,” said Rajesh Goenka, chairman, Axiom Estates, a real estate agency servicing overseas Indians, mostly in the earning bracket of $100,000-300,000 (around Rs47.5 lakh-Rs1.5 crore) a year.
Indian realtors have spent months battling a severe cash crunch as high interest rates and a slowdown kept buyers away and funding from investors dried up. But, a spate of interest rate cuts and a sentiment revival have encouraged builders to focus on middle-income buyers by launching new projects or re-marketing older ones as mid-income properties.
Unitech Ltd, Parsvnath Developers Ltd and India’s top listed real estate firm DLF Ltd redesigned projects and cut costs to appeal to a wider consumer base. Demand is swaying towards affordable housing.
In the quarter to March, half of the homes sold were in 114 new projects of the 2,000 available for sale, according to estimates by realty rating and research agency, Leases Foras Real Estate Rating and Research.
Even though builders say new projects are being lapped up, home loans are not picking up as fast, suggesting that the homes were picked up by investors, said Pankaj Kapoor, founder and chief executive, Leases Foras.
Homebuyers say that the ground reality hasn’t changed much. Prices haven’t fallen as anticipated with builders’ standing guard, hoping prices will continue to firm and investors, too, hope for a return in pricing.
India realty expo in Dubai sees deals worth Rs 65.33 cr sealed
The 12th India Realty Expo 2009 held in Dubai saw 106 flats worth Rs 65.33 crore being booked, a senior real estate industry official said.
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"106 flats worth Rs 65.33 crore were booked (during the expo)," Maharashtra Chamber of Housing Industry (MCHI), CEO, Zubin Mehta, said in a press release issued here.
"Around 86 flats worth Rs 80.18 crore are in the pipeline when the NRIs come down to India in July-August on their annual vacation," Mehta added.
MCHI is a leading body of real estate builders and developers.
The expo evoked an encouraging response with 2,700 NRIs visiting the exhibition in three days during June 4-6, the release said.
"The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo," Mehta said.
Fifteen leading developers and builders showcased their properties at the realty expo.
Home finance institutions which participated in the expo included HDFC, DHFL and Bank of Baroda, the release said.
"Majority of the walk-ins was Mumbai-specific and this reflected into an opportunity for the developers to close a few deals during the expo itself," MCHI's Co-ordinator and Co-Chairman, International Exhibitions, J S Augustine, said.
That the expo took place in Dubai when the first signs of an economic revival globally were being witnessed also made a positive impact, he said.
The exhibition, which was inaugurated by Consul (Commerce) to the Consulate General of India, Dubai, Partha Roy, aimed to provide a one-stop solution to all the needs of NRIs intending to purchase a property in India, the release said.
MCHI's President, Pravin Doshi, describing the response as "encouraging", said that "this encouraging response denotes the demand and popularity of housing in India by NRIs in the Middle-East."
The 15 developers who participated in the expo were Ajmera Builders, Mayfair Group, Akar Creations, Better Homes, Everest Developers, Hiranandani Constructions, Marathon Group, Nahar Group, Nirmal Lifestyle, Nyati Group, Our Town, Pathy Housing, Pranjee Group, Rustomjee and Total Environmen
Also Read
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News Now
- Govt clears Dubai's Damas, Gitanjali's JV for jewellery retail
- Indiainfoline's subsidiary part ways with Auerbach Grayson
- Dubai announces new pricing for govt services
- PNB to open five overseas offices
- Free stays and fun in Dubai for Emirates First & Business Class passengers
- Smart City stuck on land issue
"106 flats worth Rs 65.33 crore were booked (during the expo)," Maharashtra Chamber of Housing Industry (MCHI), CEO, Zubin Mehta, said in a press release issued here.
"Around 86 flats worth Rs 80.18 crore are in the pipeline when the NRIs come down to India in July-August on their annual vacation," Mehta added.
MCHI is a leading body of real estate builders and developers.
The expo evoked an encouraging response with 2,700 NRIs visiting the exhibition in three days during June 4-6, the release said.
"The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo," Mehta said.
Fifteen leading developers and builders showcased their properties at the realty expo.
Home finance institutions which participated in the expo included HDFC, DHFL and Bank of Baroda, the release said.
"Majority of the walk-ins was Mumbai-specific and this reflected into an opportunity for the developers to close a few deals during the expo itself," MCHI's Co-ordinator and Co-Chairman, International Exhibitions, J S Augustine, said.
That the expo took place in Dubai when the first signs of an economic revival globally were being witnessed also made a positive impact, he said.
The exhibition, which was inaugurated by Consul (Commerce) to the Consulate General of India, Dubai, Partha Roy, aimed to provide a one-stop solution to all the needs of NRIs intending to purchase a property in India, the release said.
MCHI's President, Pravin Doshi, describing the response as "encouraging", said that "this encouraging response denotes the demand and popularity of housing in India by NRIs in the Middle-East."
The 15 developers who participated in the expo were Ajmera Builders, Mayfair Group, Akar Creations, Better Homes, Everest Developers, Hiranandani Constructions, Marathon Group, Nahar Group, Nirmal Lifestyle, Nyati Group, Our Town, Pathy Housing, Pranjee Group, Rustomjee and Total Environmen
Allahabad City UP witnesses boom in real estate demands
With the culture of individual houses and palatial bungalows waning
fast, the city is adopting the flat culture, which is
considered to be safe, secure and
useful for social activities, especially for the older generation. It is here that the role of Allahabad Development Authority assumes great significance.
Allahabad Development Authority which originated in 1974 was formed under the provision laid by the Uttar Pradesh Urban Planning & Development Act of 1973. ADA development projects began with smaller projects & constructions but soon progressed and changed the city's look with its magnificent works. Uttar Pradesh being one of the most important states of India, politically and hence Allahabad, an important city of the state with long historical and cultural background, attracts a lot of people and tourists from all over the world thereby necessitates the establishment of development authority to overlook planned development of the city.
The development authority aims to fulfil its responsibilities for the development of the city by constructing state-of-the-art infrastructure for its residential and commercial projects in a well planned manner, by adhering to the master plan laid out by the authorities.
ADA also started many housing schemes like Avantika, Kalindipuram, Juhi, Badri, Parivartan, Shantipuram, Nirupma, Agnipath, Ekanki, Devghat, Trivenipuram, Katju, Ambedkar, Dev-Prayagam, Nav-Prayagam, Chandpur Salori, Asdullapur and IDH Compound Housing Scheme. Apart from these, Allahabad Development Authority is also working in conjunction with private builders and developers in order to give a progressive direction to the development process of real estate in Allahabad.
The latest real estate developments in city primarily focus on building hotels, guest houses, Dharmashalas, restaurants, retail shops and other tourists' activity spots. The real estate property prices in city are also mounting as more and more people are heading towards the efficient business opportunities the city offers. For the purchase, sale or renting of any property in Allahabad, you receive full assistance from the property dealers in the city.
fast, the city is adopting the flat culture, which is
considered to be safe, secure and
useful for social activities, especially for the older generation. It is here that the role of Allahabad Development Authority assumes great significance.
Allahabad Development Authority which originated in 1974 was formed under the provision laid by the Uttar Pradesh Urban Planning & Development Act of 1973. ADA development projects began with smaller projects & constructions but soon progressed and changed the city's look with its magnificent works. Uttar Pradesh being one of the most important states of India, politically and hence Allahabad, an important city of the state with long historical and cultural background, attracts a lot of people and tourists from all over the world thereby necessitates the establishment of development authority to overlook planned development of the city.
The development authority aims to fulfil its responsibilities for the development of the city by constructing state-of-the-art infrastructure for its residential and commercial projects in a well planned manner, by adhering to the master plan laid out by the authorities.
ADA also started many housing schemes like Avantika, Kalindipuram, Juhi, Badri, Parivartan, Shantipuram, Nirupma, Agnipath, Ekanki, Devghat, Trivenipuram, Katju, Ambedkar, Dev-Prayagam, Nav-Prayagam, Chandpur Salori, Asdullapur and IDH Compound Housing Scheme. Apart from these, Allahabad Development Authority is also working in conjunction with private builders and developers in order to give a progressive direction to the development process of real estate in Allahabad.
The latest real estate developments in city primarily focus on building hotels, guest houses, Dharmashalas, restaurants, retail shops and other tourists' activity spots. The real estate property prices in city are also mounting as more and more people are heading towards the efficient business opportunities the city offers. For the purchase, sale or renting of any property in Allahabad, you receive full assistance from the property dealers in the city.
Allahabad City UP witnesses boom in real estate demands
With the culture of individual houses and palatial bungalows waning
fast, the city is adopting the flat culture, which is
considered to be safe, secure and
useful for social activities, especially for the older generation. It is here that the role of Allahabad Development Authority assumes great significance.
Allahabad Development Authority which originated in 1974 was formed under the provision laid by the Uttar Pradesh Urban Planning & Development Act of 1973. ADA development projects began with smaller projects & constructions but soon progressed and changed the city's look with its magnificent works. Uttar Pradesh being one of the most important states of India, politically and hence Allahabad, an important city of the state with long historical and cultural background, attracts a lot of people and tourists from all over the world thereby necessitates the establishment of development authority to overlook planned development of the city.
The development authority aims to fulfil its responsibilities for the development of the city by constructing state-of-the-art infrastructure for its residential and commercial projects in a well planned manner, by adhering to the master plan laid out by the authorities.
ADA also started many housing schemes like Avantika, Kalindipuram, Juhi, Badri, Parivartan, Shantipuram, Nirupma, Agnipath, Ekanki, Devghat, Trivenipuram, Katju, Ambedkar, Dev-Prayagam, Nav-Prayagam, Chandpur Salori, Asdullapur and IDH Compound Housing Scheme. Apart from these, Allahabad Development Authority is also working in conjunction with private builders and developers in order to give a progressive direction to the development process of real estate in Allahabad.
The latest real estate developments in city primarily focus on building hotels, guest houses, Dharmashalas, restaurants, retail shops and other tourists' activity spots. The real estate property prices in city are also mounting as more and more people are heading towards the efficient business opportunities the city offers. For the purchase, sale or renting of any property in Allahabad, you receive full assistance from the property dealers in the city.
fast, the city is adopting the flat culture, which is
considered to be safe, secure and
useful for social activities, especially for the older generation. It is here that the role of Allahabad Development Authority assumes great significance.
Allahabad Development Authority which originated in 1974 was formed under the provision laid by the Uttar Pradesh Urban Planning & Development Act of 1973. ADA development projects began with smaller projects & constructions but soon progressed and changed the city's look with its magnificent works. Uttar Pradesh being one of the most important states of India, politically and hence Allahabad, an important city of the state with long historical and cultural background, attracts a lot of people and tourists from all over the world thereby necessitates the establishment of development authority to overlook planned development of the city.
The development authority aims to fulfil its responsibilities for the development of the city by constructing state-of-the-art infrastructure for its residential and commercial projects in a well planned manner, by adhering to the master plan laid out by the authorities.
ADA also started many housing schemes like Avantika, Kalindipuram, Juhi, Badri, Parivartan, Shantipuram, Nirupma, Agnipath, Ekanki, Devghat, Trivenipuram, Katju, Ambedkar, Dev-Prayagam, Nav-Prayagam, Chandpur Salori, Asdullapur and IDH Compound Housing Scheme. Apart from these, Allahabad Development Authority is also working in conjunction with private builders and developers in order to give a progressive direction to the development process of real estate in Allahabad.
The latest real estate developments in city primarily focus on building hotels, guest houses, Dharmashalas, restaurants, retail shops and other tourists' activity spots. The real estate property prices in city are also mounting as more and more people are heading towards the efficient business opportunities the city offers. For the purchase, sale or renting of any property in Allahabad, you receive full assistance from the property dealers in the city.
Maharashtra mulls giving equal share to wife in property
The Maharashtra government is seeking legal advice on making it mandatory for giving equal property right to wife, Revenue Minister Patangarao Kadam has said.
The present norms stipulate that the wife getting share in property is 'discretionary' and not mandatory, the minister said.
"The government is seeking advice from Law and Judiciary Department on making it mandatory to give equal right to the wife in property," Mr. Kadam informed the Legislative Council in a written answer on Tuesday.
In order to implement the proposal, the government needs to amend the Succession Act. The issue would also be discussed in the Cabinet meeting, he said.
Earlier, the government had decided to register the wife's name on 7/12 extract (land ownership record) along with the husband's. However, registering the wife's name depended on such a 'request' being made by the husband, he said.
Arun Gujarati (NCP) raised the issue and asked the Government to give details on registering the wife's name in 7/12 records.
The present norms stipulate that the wife getting share in property is 'discretionary' and not mandatory, the minister said.
"The government is seeking advice from Law and Judiciary Department on making it mandatory to give equal right to the wife in property," Mr. Kadam informed the Legislative Council in a written answer on Tuesday.
In order to implement the proposal, the government needs to amend the Succession Act. The issue would also be discussed in the Cabinet meeting, he said.
Earlier, the government had decided to register the wife's name on 7/12 extract (land ownership record) along with the husband's. However, registering the wife's name depended on such a 'request' being made by the husband, he said.
Arun Gujarati (NCP) raised the issue and asked the Government to give details on registering the wife's name in 7/12 records.
Tuesday, June 9, 2009
Rs10 lakh for a flat in Pune (Assetventures)
When was the last time you heard about a Rs10-lakh flat in the city limits?
President of the Pune chapter of Confederation of Real Estate Developers Association of India (Credai) said that a Rs10-lakh flat was probably sold in the late 1990s, while a few others said it was early 2000.
Forced by the slump in the real estate sector, many builders in the city have turned their focus into affordable housing projects in the price range of Rs10 lakh to Rs13.5 lakh.
Credai vice-president Rohit Gera said builders are just reacting to what the market demands at this moment. "Even a year back, nobody would have thought of a flat in the range of Rs10-12 lakh," he said, adding that with the client base now changing because of the slowdown, the demand for the smaller-sized homes is on the rise.
A recent analysis by property consultant Jones Lang LaSalle Meghraj revealed that the buyers have adopted a conservative approach and prefer budget-friendly homes.
Mohammed Aslam, the Pune head of Meghraj, said while the demand for luxury units is extremely curtailed, there is still a market for I BHK flats in the range of Rs12-16 lakh and 2BHKs to some extent.
Kolte-Patil Developers, known for its high-end projects, is among the constructors entering the affordable housing project.
"With the recession, we realised the need to concentrate on the lower segment as well," said Gayatri Kunte, manager (corporate communications), at Kolte-Patil Developers. The company plans to begin work on 'Umang Homes' at Wagholi, where flats are being sold Rs11.22 lakh for a 1BHK to Rs14.22 lakh for a one-and-a-half BHK.
Other builders have followed suit. Darode-Jog Properties has launched 'Greenland County', priced at Rs12 lakh and above on the Simhagad Road. "We have always been associated with premium segment and up-market areas in housing in the past," said Sudhir Darode, director of Darode-Jog Properties.
Tricon Builders is launching a 1BHK apartment project at Undric called Sunshine Hills and with 1BHK houses are priced at Rs13 lakh and onwards. "There is a good response for these flats as not many developers were catering to this segment earlier," said Rinku Shewani, partner at Tricon Developers.
Others like Bhandari Associates and Suyog Development Corporation, who have also entered into the affordable housing projects, said the current market situation has forced them to cut rates as well as size.
Magar and other builders explained that most of these projects are coming up on the land banks, located in the fringe areas.
President of the Pune chapter of Confederation of Real Estate Developers Association of India (Credai) said that a Rs10-lakh flat was probably sold in the late 1990s, while a few others said it was early 2000.
Forced by the slump in the real estate sector, many builders in the city have turned their focus into affordable housing projects in the price range of Rs10 lakh to Rs13.5 lakh.
Credai vice-president Rohit Gera said builders are just reacting to what the market demands at this moment. "Even a year back, nobody would have thought of a flat in the range of Rs10-12 lakh," he said, adding that with the client base now changing because of the slowdown, the demand for the smaller-sized homes is on the rise.
A recent analysis by property consultant Jones Lang LaSalle Meghraj revealed that the buyers have adopted a conservative approach and prefer budget-friendly homes.
Mohammed Aslam, the Pune head of Meghraj, said while the demand for luxury units is extremely curtailed, there is still a market for I BHK flats in the range of Rs12-16 lakh and 2BHKs to some extent.
Kolte-Patil Developers, known for its high-end projects, is among the constructors entering the affordable housing project.
"With the recession, we realised the need to concentrate on the lower segment as well," said Gayatri Kunte, manager (corporate communications), at Kolte-Patil Developers. The company plans to begin work on 'Umang Homes' at Wagholi, where flats are being sold Rs11.22 lakh for a 1BHK to Rs14.22 lakh for a one-and-a-half BHK.
Other builders have followed suit. Darode-Jog Properties has launched 'Greenland County', priced at Rs12 lakh and above on the Simhagad Road. "We have always been associated with premium segment and up-market areas in housing in the past," said Sudhir Darode, director of Darode-Jog Properties.
Tricon Builders is launching a 1BHK apartment project at Undric called Sunshine Hills and with 1BHK houses are priced at Rs13 lakh and onwards. "There is a good response for these flats as not many developers were catering to this segment earlier," said Rinku Shewani, partner at Tricon Developers.
Others like Bhandari Associates and Suyog Development Corporation, who have also entered into the affordable housing projects, said the current market situation has forced them to cut rates as well as size.
Magar and other builders explained that most of these projects are coming up on the land banks, located in the fringe areas.
Realty companies resorting to discounts (assetventures)
Realty companies are resorting to discounts to sell commercial properties in
order to improve cash flows and reduce mounting
debts.
DLF, the country’s biggest real estate firm by market capitalisation, has recently sold its 66% stake in a special purpose vehicle that owns eight acres at Prabhadevi in Mumbai for Rs 310 crore, which analysts feel was at a discount.
It is also eyeing to raise around Rs 2,000 crore by selling two commercial properties in the city. Unlisted firm K Raheja Universal recently sold a plot in Santa Cruz in north Mumbai for around Rs 60 crore.
Mumbai is not the only city witnessing distress deals in the commercial property space. Bangalore-based Sobha Developers is learnt to have put a plot in the country’s IT capital on the block with a ticket size of Rs 100 crore. India’s second-largest firm by market cap Unitech, too, is going all out to sell some of its commercial properties to pay down debt.
In the past few months, it has sold its Marriott Courtyard Hotel in Gurgaon for Rs 232 crore and an office property in Saket, New Delhi, for Rs 500 crore.
The combined debt of DLF, Sobha and Unitech is estimated to be at Rs 25,000 crore. Vimal Shah, managing director, Akruti City, a city based real estate firm, said: “While the residential space has started looking up, commercial properties do not have buyers. Many big builders all over India are cautious with their commercial complexes.”
In the past three months the commercial property rates in New Delhi, Mumbai and Bangalore have witnessed a 30-45% decline in price. Rates could fall further if analysts are to be believed.
Anuj Puri, country head, Jones Lang LaSalle Meghraj (JLLM), a property advisory firm, said: “It seems that the commercial property market will take at least a year to revive. Presently only the residential market looks stable and their rates may not fall for some time while commercial property could still see some correction in prices.”
“Many big builders have come up with proposals of selling commercial properties in Mumbai and New Delhi,” opined Pravin Doshi, chairman, Acme Group, a Mumbai-based real estate developer.
order to improve cash flows and reduce mounting
debts.
DLF, the country’s biggest real estate firm by market capitalisation, has recently sold its 66% stake in a special purpose vehicle that owns eight acres at Prabhadevi in Mumbai for Rs 310 crore, which analysts feel was at a discount.
It is also eyeing to raise around Rs 2,000 crore by selling two commercial properties in the city. Unlisted firm K Raheja Universal recently sold a plot in Santa Cruz in north Mumbai for around Rs 60 crore.
Mumbai is not the only city witnessing distress deals in the commercial property space. Bangalore-based Sobha Developers is learnt to have put a plot in the country’s IT capital on the block with a ticket size of Rs 100 crore. India’s second-largest firm by market cap Unitech, too, is going all out to sell some of its commercial properties to pay down debt.
In the past few months, it has sold its Marriott Courtyard Hotel in Gurgaon for Rs 232 crore and an office property in Saket, New Delhi, for Rs 500 crore.
The combined debt of DLF, Sobha and Unitech is estimated to be at Rs 25,000 crore. Vimal Shah, managing director, Akruti City, a city based real estate firm, said: “While the residential space has started looking up, commercial properties do not have buyers. Many big builders all over India are cautious with their commercial complexes.”
In the past three months the commercial property rates in New Delhi, Mumbai and Bangalore have witnessed a 30-45% decline in price. Rates could fall further if analysts are to be believed.
Anuj Puri, country head, Jones Lang LaSalle Meghraj (JLLM), a property advisory firm, said: “It seems that the commercial property market will take at least a year to revive. Presently only the residential market looks stable and their rates may not fall for some time while commercial property could still see some correction in prices.”
“Many big builders have come up with proposals of selling commercial properties in Mumbai and New Delhi,” opined Pravin Doshi, chairman, Acme Group, a Mumbai-based real estate developer.
In real estate slump, developers pin hope on service apartments (asetventures)
After being launched in cities like Delhi, Bangalore and Pune, service apartments will soon be a reality in Tier II and III cities.
Considering the growing number of corporate honchos visiting the tri-city, Ludhiana and Amritsar, real estate developers will soon introduce service apartments in these cities.
Another reason that has evoked developers’ interest in service apartments is the slump in the real estate industry.
The negligible sale of apartments in the tri-city has forced them to convert these into service apartments.
Service apartments, which are fully-furnished with all facilities, are an alternative to five-star hotels. Unlike a normal apartment, a service apartment is given only on lease or rent and is a good option for travelling professionals and nuclear families.
Considering the growing number of corporate honchos visiting the tri-city, Ludhiana and Amritsar, real estate developers will soon introduce service apartments in these cities.
Another reason that has evoked developers’ interest in service apartments is the slump in the real estate industry.
The negligible sale of apartments in the tri-city has forced them to convert these into service apartments.
Service apartments, which are fully-furnished with all facilities, are an alternative to five-star hotels. Unlike a normal apartment, a service apartment is given only on lease or rent and is a good option for travelling professionals and nuclear families.
Soon, Omaxe will launch a few limited service apartments in Omaxe Royal Residency on Pakhowal Road, Ludhiana. These apartments, with an area of 650 square feet each, will be launched in July.
“Ludhiana has marked its presence in India as a commercial city. It has many industries, which result in a number of corporate heads visiting this city. These apartments will offer them a nice and cheaper accommodation compared to hotels,” Avneet Soni, director of Omaxe Limited, said.
Manoj Kashyap, regional director of JLL Meghraj, added: “As there is no movement in the real estate market for the last many months, developers are trying various options keeping in mind the demand. The firm is working on the modalities and research on behalf of several national developers eager to launch service apartments in the region.”
DLF sees property prices firming up Assetventures
DLF Ltd India's largest listed real estate firm, sees signs of recovery in the country's beaten down residential property sector and expects prices to start firming up, a senior official said on Monday.
Still, Rajeev Talwar, group executive director at the developer, said projects needed to be priced aggressively in order to sell.
Talwar told Reuters in an interview a stable government and a view that the economy may be improving would help demand for real estate, after a property slump that analysts said has seen prices crashing by up to half.
"I think we've done a fair amount on price correction, realistic pricing or aggressive pricing as it may be called," Talwar said.
Still, Rajeev Talwar, group executive director at the developer, said projects needed to be priced aggressively in order to sell.
Talwar told Reuters in an interview a stable government and a view that the economy may be improving would help demand for real estate, after a property slump that analysts said has seen prices crashing by up to half.
"I think we've done a fair amount on price correction, realistic pricing or aggressive pricing as it may be called," Talwar said.
"I think all Indians have imposed their faith to very immediate economic revival, rather than long term," Talwar said.
"I think all Indians have imposed their faith to very immediate economic revival, rather than long term," Talwar said.
Last month's decisive victory by the ruling Congress party-led coalition has fuelled market optimism that reform measures will help drive economic growth.
The main stock index .BSESN is up about 90 percent from an October low.
"So it would stand to reason that 'yes'," he said when asked whether he expected the housing market had bottomed out.
"In fact why only bottom, if demand is rising, prices should be hardening or firming up. At least the trend would be to move upwards, rather than to go downwards," said Talwar, a former member of the country's elite Indian Administrative Service.
Real estate stocks have nearly tripled from their March low, but remain about 74 percent below their early 2008 peak at the end of a three-year bull run in property prices.
The past 18 months have seen a rough run for Indian property companies.
Heavy debt and a slowdown in fund flows to real estate projects in India forced the founders of 63-year old DLF to sell shares to institutions last month to raise funds.
DLF's founders, K.P. Singh and family, raised $783 million by selling 9.9 percent stake in the firm [ID:nDEL155233], which cut their holding to 78.6 percent.
Talwar said the founders intended to maintain their current holding.
"I think what they have announced is that no, there is no further scope of disinvestment," he said.
AFFORDABLE HOUSING
India, which is plagued by homelessness in its cities, needs an estimated 25 million homes, and Talwar said public-private partnership is key to helping bridge that gap.
He said mid-range housing to serve the country's "bustling middle class" would make up the bulk of DLF's residential business.
Recent project launches by DLF have been priced aggressively and sold quickly as a result.
For example, a new development in Delhi sold 1,400 flats within 24 hours of its April launch.
"I think the lesson that we've drawn from the last year, year and a half is that if you price your product appropriately or competitively there is a market which is waiting to lap it up," he said.
"There is a demand if pricing is appropriate, aggressive, and competitive. People need to see the value for money."
DLF sees property prices firming up Assetventures
DLF Ltd India's largest listed real estate firm, sees signs of recovery in the country's beaten down residential property sector and expects prices to start firming up, a senior official said on Monday.
Still, Rajeev Talwar, group executive director at the developer, said projects needed to be priced aggressively in order to sell.
Talwar told Reuters in an interview a stable government and a view that the economy may be improving would help demand for real estate, after a property slump that analysts said has seen prices crashing by up to half.
"I think we've done a fair amount on price correction, realistic pricing or aggressive pricing as it may be called," Talwar said.
Still, Rajeev Talwar, group executive director at the developer, said projects needed to be priced aggressively in order to sell.
Talwar told Reuters in an interview a stable government and a view that the economy may be improving would help demand for real estate, after a property slump that analysts said has seen prices crashing by up to half.
"I think we've done a fair amount on price correction, realistic pricing or aggressive pricing as it may be called," Talwar said.
"I think all Indians have imposed their faith to very immediate economic revival, rather than long term," Talwar said.
"I think all Indians have imposed their faith to very immediate economic revival, rather than long term," Talwar said.
Last month's decisive victory by the ruling Congress party-led coalition has fuelled market optimism that reform measures will help drive economic growth.
The main stock index .BSESN is up about 90 percent from an October low.
"So it would stand to reason that 'yes'," he said when asked whether he expected the housing market had bottomed out.
"In fact why only bottom, if demand is rising, prices should be hardening or firming up. At least the trend would be to move upwards, rather than to go downwards," said Talwar, a former member of the country's elite Indian Administrative Service.
Real estate stocks have nearly tripled from their March low, but remain about 74 percent below their early 2008 peak at the end of a three-year bull run in property prices.
The past 18 months have seen a rough run for Indian property companies.
Heavy debt and a slowdown in fund flows to real estate projects in India forced the founders of 63-year old DLF to sell shares to institutions last month to raise funds.
DLF's founders, K.P. Singh and family, raised $783 million by selling 9.9 percent stake in the firm [ID:nDEL155233], which cut their holding to 78.6 percent.
Talwar said the founders intended to maintain their current holding.
"I think what they have announced is that no, there is no further scope of disinvestment," he said.
AFFORDABLE HOUSING
India, which is plagued by homelessness in its cities, needs an estimated 25 million homes, and Talwar said public-private partnership is key to helping bridge that gap.
He said mid-range housing to serve the country's "bustling middle class" would make up the bulk of DLF's residential business.
Recent project launches by DLF have been priced aggressively and sold quickly as a result.
For example, a new development in Delhi sold 1,400 flats within 24 hours of its April launch.
"I think the lesson that we've drawn from the last year, year and a half is that if you price your product appropriately or competitively there is a market which is waiting to lap it up," he said.
"There is a demand if pricing is appropriate, aggressive, and competitive. People need to see the value for money."
Saturday, June 6, 2009
Real estate developers homing in on residential projects
While the sudden rise in demand for affordable residential housing in the last couple of months has given the much-needed relief to real estate developers, commercial and retail segments continue to face the heat of oversupply, combined with declining rental rates and lower demand from investors.
As a result, developers have deferred a majority of the ongoing commercial and retail projects, which were scheduled for completion in 2009-10, and are instead focusing on the residential market. In fact, according to real estate consultants Cushman & Wakefield, developers will be forced to defer 41 per cent of the projected office space supply in 2009.
“Out of 76 million sq ft of commercial (office) space projected across eight cities by many developers, only 45 million sq ft is expected to be completed in 2009. In the retail segment, out of the 14.5 million sq ft of projected space, only 3.6 million sq ft is expected to enter the market,” Cushman & Wakefield’s Executive Director Kaustav Roy said.
The supply overhang in commercial and retail segments is expected to continue for another 12-18 months, feel experts. At the same time, a sharp decline in the price of residential units — in terms of per sq ft rate as well as size — has resulted in a sharp increase in demand. As per conservative estimates, 60 million sq ft of residential space has been lined up for launch in 2009. One of the key reasons for this poor demand in commercial and retail segments is the non–availability of Real Estate Investment Trusts (REITs), which could not take off because of complex legal hurdles and the sudden crash in the stock market in 2008.
While many of the real estate companies — such as DLF Asset Ltd, Unitech, Indiabulls Real Estate and Purvankara, among others — were planning to raise resources through REITs’ listing, only Indiabulls successfully raised $286 million by listing its REITs on the Singapore Stock Exchange. The failure of REITs to take off has affected the financial position of developers and, in turn, further delayed the completion of ongoing retail and commercial projects.
“In the past one year, everything has been against the commercial real estate. Private equity vanished from the markets, while the government increased risk rating on the real estate sector. The failure of REITs to pick up added to the financial crunch of the developers,” commercial real estate services company CB Richard Ellis’ Chairman and Managing Director Anshuman magazine said. “Developers are not in a position to complete their commercial projects due to a lack of funds, a demand-supply mismatch and falling rentals,” he added. The country’s largest developer, DLF, has already received an approval to denotify four of its SEZs. In addition, it has also temporarily stopped construction work on nearly 16 million sq ft of office and retail mall space out of the 62 million sq ft of planned construction.
As a result, developers have deferred a majority of the ongoing commercial and retail projects, which were scheduled for completion in 2009-10, and are instead focusing on the residential market. In fact, according to real estate consultants Cushman & Wakefield, developers will be forced to defer 41 per cent of the projected office space supply in 2009.
“Out of 76 million sq ft of commercial (office) space projected across eight cities by many developers, only 45 million sq ft is expected to be completed in 2009. In the retail segment, out of the 14.5 million sq ft of projected space, only 3.6 million sq ft is expected to enter the market,” Cushman & Wakefield’s Executive Director Kaustav Roy said.
The supply overhang in commercial and retail segments is expected to continue for another 12-18 months, feel experts. At the same time, a sharp decline in the price of residential units — in terms of per sq ft rate as well as size — has resulted in a sharp increase in demand. As per conservative estimates, 60 million sq ft of residential space has been lined up for launch in 2009. One of the key reasons for this poor demand in commercial and retail segments is the non–availability of Real Estate Investment Trusts (REITs), which could not take off because of complex legal hurdles and the sudden crash in the stock market in 2008.
While many of the real estate companies — such as DLF Asset Ltd, Unitech, Indiabulls Real Estate and Purvankara, among others — were planning to raise resources through REITs’ listing, only Indiabulls successfully raised $286 million by listing its REITs on the Singapore Stock Exchange. The failure of REITs to take off has affected the financial position of developers and, in turn, further delayed the completion of ongoing retail and commercial projects.
“In the past one year, everything has been against the commercial real estate. Private equity vanished from the markets, while the government increased risk rating on the real estate sector. The failure of REITs to pick up added to the financial crunch of the developers,” commercial real estate services company CB Richard Ellis’ Chairman and Managing Director Anshuman magazine said. “Developers are not in a position to complete their commercial projects due to a lack of funds, a demand-supply mismatch and falling rentals,” he added. The country’s largest developer, DLF, has already received an approval to denotify four of its SEZs. In addition, it has also temporarily stopped construction work on nearly 16 million sq ft of office and retail mall space out of the 62 million sq ft of planned construction.
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