Godrej Properties Files DHRP With SEBI

Godrej Properties Ltd, Real estate arm of the Godrej Group, declared that it has filed the Draft Red Herring Prospectus (DHRP) with SEBI for an IPO of approx seven million shares.

According to a company statement, the firm proposes an IPO of 9,429,750 equity shares of ten rupees each through 100% book building process to part finance this plan. ICICI Securities Ltd and Kotak Mahindra Capital Company Limited are the BRLMs for the Issue.

The company currently has real estate development projects in eleven cities in the country at various stages of development.

It has completed a total of 19 projects consisting 13 residential and 6 commercial project on 15th of this month.

Godrej Properties’ land reserves currently stands at 404 acres, which includes its ongoing projects and forthcoming projects.

Its promoter and parent company Godrej Industries Limited, currently holds 81.41% of the equity share capital of Godrej Properties.

Boulder Hills Golf And Country Club By Emaar MGF In Hyderabad

Emaar MGF Land Ltd, one of the leading real estate developers in the country has launched ‘Boulder Hills Golf & Country Club’- an integrated world class leisure and residential community in Hyderabad. The Rs 5,610-crore project will have residential, commercial and retail space, IT parks and special economic zones, luxury and boutique hotels. It will be constructed by Multiplex Construction India Pvt Ltd, a 50:50 joint venture company floated by Emaar MGF and Multiplex Ltd.
Talking at a press conference during the launch of the project here, W. R. Rattazi, chief executive officer of the company, said, “It is a landmark project for the company in south India.” This project, which is spread across five hundred thirty one acres of land, is south India’s first integrated world class leisure and residential community with an eighteen hole golf course. The one hundred ninety two acre golf course has been designed by Peter Harradine – a third generation golf course architect. It is a championship golf course.
“Plans are on to host the European PGA Men’s and Ladies events at the world class golf course,” he said.
In the first phase of the project, the company would be developing seven hundred three residential units with a mix of single and multi family units. It is likely to be ready within the next three years.
The project has already been well received in the market, so much so that the premium apartments and luxury villas that are being planned within the project have already been sold out, he added.
The company is presently doing eight different projects in the South. “Over the next few years, we plan to develop 31 million sq ft across ten locations in south India with a planned investment of three billion dollar. Already the company has a land bank of 1,500 acres in the south in places like Hyderabad, Tirupathi, Chennai, Coimbatore, Kochi, Mysore and Mangalore”, he said adding all over India, the company has a land holding of 13,000 acres.
In the next 4-5 years, Emaar MGF will spread its wings to 40 cities from 26 cities right now.

Rs 100 crores will be invested by Inox in east India

After putting up 24 multiplex screens across cities like Vadodara, Kolkata, Mumbai and Goa in the last 6 yrs, the company has been silently signing up properties in Burdwan Rajarhat, Panditya Road, Haldia, Howrah, Jessore Road Asansol and even Siliguri to throw open multiplexes.

The total investment is estimated to be over one hundred crores rupees. The move, which is part of the company’s overall plans to scale up its presence across the country, is expected to shore up the group’s overall business from the eastern sector.

Alok Tandon, COO, Inox Leisure, said, “Kolkata and eastern India as a whole is an integral part of the company’s strategy. Going forward, we will have at least 18 multiplexes with 67 screens from just five multiplexes in this part of the country.”

“The future appears to have more in store. Following the hub and spoke model, Inox is planning more multiplexes in multiple locations. These will include cities like Bangalore, Hyderabad, Nagpur, Goa, Mangalore and newer hubs across Navi Mumbai.” Tandon added.

Outlining the corporate strategy, Tandon said the company would be spreading out across three-four fresh locations every year for the next two-three years. By 2010, the company intends to have at least 68-70 multiplexes with some 260 screens. Each screen, on an average, will find an investment of Rs 2-2.5 crores being ploughed in. The investments cover aspects like projection and concessionaire equipment, interiors flooring and false ceiling.

The company is looking at all options to give shape to its expansion programme. “If we get land at attractive price and the financial are viable, we may purchase the property and develop it ourselves or go for lease. We are also open to more acquisitions in the near future if the opportunity comes,” he added.

Sometime ago, the company had acquired Calcutta Cine Pvt Ltd (CCPL), a joint venture between Bengal Ambuja Group & its associates and Consolidated Entertainment Pvt Ltd.

Meanwhile, Inox Leisure board will meet on June 09, to consider recommendation of dividend, for the financial year ended on March 31, 2008.

Mapletree Starts Third Property Project In China

Mapletree, a property investment unit of Singapore state-owned Temasek Holdings, announced on Monday that its private real estate fund, Mapletree India-China Fund (MIC Fund), is developing a property worth US$320 million in China’s Guangdong Province.
This is MIC Fund’s third investment in China after its investments in a residential and retail development in Xi’an and acquisition of an office building in Beijing.
The Guangdong project will be jointly funded by Mapletree India-China Fund and Guangzhou Southern-Donald Scientific Technology Co, which holds 80% and 20% stake in the project respectively.
The project, located in the Nanhai district of Foshan city, is expected to be completed in 5-8 years.

UK property investors look to India

As property prices continue their downward spiral in Britain, investors here are looking to India, which is increasingly seen as a hotspot due to rising real estate prices across the country.

Every week, leading mortgage lenders and estate agents publish figures of declining prices, higher number of houses on the market, fewer buyers and smaller numbers of new mortgages being advanced.

Except in several areas of London, property prices all over Britain have recorded at least a 2% drop in the last year due to the credit crunch.

The slowing of Britain’s property market has led to several individual and institutional investors looking to India and other international hotspots.

India is also seen as an attractive destination due to the Indian government’s recent decision to relax rules for foreign investment in the housing sector.

Several India-specific investment funds have been set up, while British citizens of Indian-origin are increasingly investing in places such as Gujarat, Gurgaon, Bangalore, Chandigarh, Pune and Jaipur.

The investors here are also courted by Indian builders and property agents who organize exhibitions in London, Manchester, Birmingham and Leicester.

In Birmingham, a seminar was organized yesterday by Navyroof.com, a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It offers potential investors advice on how they could benefit from investing in India’s thriving housing sector.

At the seminar, information was provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted were the areas likely to give the greatest capital appreciation on investment.

Realty Scrips Have A Long Way Ahead To Recovery

For all the talk about a slowdown in the economy, real estate prices in most parts of the country have not corrected as much as most prospective buyers would have liked them to. But, shares of most real estate companies are not finding any takers even after falling nearly 50% from their record highs in January this year.

This would suggest that the ongoing sell-off in real estate stocks is a good opportunity for bargain hunting. Yet, most brokerage houses are advising their clients against doing so, as they foresee testing times for the sector in the near term. In fact, many of them are recommending that existing investors cut their losses right away as they could be in for a long wait for share prices to come anywhere near their lofty highs.

The sharp rise in real estate prices, coupled with high borrowing costs has let to softening of demand. The slump in the stock market, too, has contributed to the trend as many investors were earlier routing their gains in share trading into real estate.
Industry experts feel that companies that have managed to buy land in Mumbai at reasonable rates could be good bets even in these turbulent times.

The flagbearers of the industry like DLF and Unitech have fallen around 50% from their peaks, while other names like Ansal Housing and Construction, Ajmera Realty & Infra India, Omaxe, Lok Housing and Construction, Parsvnath Developers have fallen nearly 60%. With outlook on the market as a whole being bearish, brokers expect realty stocks to slip further.
Most property developers in India were riding the wave of an unprecedented demand due to a combination of rising affluence, tax benefits for home owners and low interest rates. But, this fuelled speculative buying in the sector, causing property prices to soar to exorbitant levels.

Bandra Replacing South Mumbai As Property Hotspot

South Mumbai has always been the preferred home to Mumbai’s upper crust for years. But now with virtually no land to be had in the Island City, the elite are moving into the suburbs and Bandra seems to be the hot new destination.
Malabar Hill, home to the city’s elite and till now the most famous of addresses in South Mumbai, is facing serious competition from bandra, popularly known as the Queen of the suburbs.
And with many famous people moving in, it’s certainly living up to that name. The latest celebrity to move to Bandra is Sachin Tendulkar, who has bought an old Parsi Villa on Perry Cross Road for Rs 39 crore and he has many other famous people as his neighbours.
Shah Rukh Khan’s Mannat on Bandra Bandstand has virtually become a tourist spot just like Salman Khan’s Galaxy Apartments.
Also by the sea, is Abhishek Bachchan’s brand new home Naivedya on Carter Road while Aamir Khan’s has already been living for quite sometime now.  Even Saif Ali Khan has bought his new home in Bandra.
And with the hot shots living in Bandra, can the rest of the Bollywood brood be far behind?
Actor Aftab Shivdasani, a true blue townie in fact, has also recently succumbed to the Bandra bug.
Not just the entertainment industry, but business offices and consulates too are now moving to Bandra with great speed.
This, even as the current rate there continues to hover around Rs 22000 per square foot.
But top real estate agents say new buildings in Bandra are often fully booked even before construction is complete.
Real estate agent Prakash Jain says, “Bandra is a very, very popular destination and the kind of buildings that are coming up, the receptions with swimming polls, gymnasium and gardens etc., you don’t find in South Bombay now.”
So move over South Bombay, or Sobo as it’s fashionably called, Bandra is where the galaxy of stars has landed.

Airport Upgrade To Open Up Mega Retail Space

The Mumbai airport’s upgradation will open up a humungous 5.7 crore square feet or about 132 acres of real estate, exclusively for non-aeronautical purposes like retail, commercial and hospitality. The area is mainly around Sahar village, Kurla and Kalina.

According to a Cushman & Wakefield report on Airport Realty, the modernisation and upgradation of 47 airport projects across the country is expected to generate 78 million square feet (1,790 acres) for commercial purposes by 2015.

In Mumbai, about 28% (1.6 million square feet) of the 132 acres will be for retail, 50% or about 2.87 million square feet will be for hospitality and 22% (1.26 million square feet) will be reserved for office space. About 3,200 hotel rooms will come up in mainly five and four star hotels.

The Cushman & Wakefield report said nearly 50% of the estimated 78 million square feet of airport realty in India will be concentrated in just three cities of Mumbai, Bangalore and New Delhi. These three cities alone will receive about 14 million square feet of office space and about 10,200 hotel rooms. All over the country, roughly 27,525 hotel rooms will be generated from development of airports.

At a time when the global growth rate of the airport sector has been about 9% per annum, India has seen an average annual growth of 35% over a period of six years. Non-aeronautical revenues are expected to increase from 35% to 54% by 2015.

As airports have the advantage of 24-hour activity with very high people traffic, they are crucial locations for next generation retail and entertainment centers as well as business and hospitality zones.

Last year, a Mumbai developer was awarded the project to clear 276 acres of land under slums from around the Santa Cruz airport. A large chunk of this land will be freed for commercial and retail development.

Property Investors Look To India

As house prices in the West Midlands fall at double the UK average during the credit crunch, local property investors are looking to new markets for opportunities.

One of these markets is India, which is being tipped by many as an emerging property hot spot. Merrill Lynch has predicted a 700 % increase in the Indian property market by 2015.

A seminar at the Hotel Ibis in Birmingham city centre on Wednesday will provide a glimpse into the opportunities which could become available. The seminar, which begins at 7pm, is being hosted by Navyroof.com – a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It will offer potential investors advice on how they could benefit from investing in India’s thriving housing sector.
Information will be provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted will be the areas likely to give the greatest capital appreciation on investment.

India’s strong economic growth reflects the profound changes occurring in society. Over half of India’s current population is under 25, giving it the world’s largest population of workers and consumers by 2020.

Increased urbanization and modern young Indians preferring to live on their own means demand for housing has never been higher. Mortgage lending increased tenfold between 2000 and 2005 yet the ratio of mortgages to GDP remains low, a significant factor in the massive potential which could be available.

Navyroof.com managing director Andrew Fassnidge said: “The seminar will show both UK investors and Birmingham’s 55,000 non-resident Indians how easy, effective and profitable investing in India can be.

“All the economic indicators project a bright, sustainable future for India. In the last 2yrs alone, property prices in India increased by 70 %.”

Market analysts have said that investors looking to escape the slowdown of the US and Europe then the sub-continent could be their best option.

Around 300 million middle class people are expected to be living in India by 2010 – higher than the US – while economic growth is expected to grow by eight per cent until 2020.

Kult Infotech Launches Online Real Estate Bank

Realizing the huge potential of internet usage in India, Kult Infotech today launched its new online real estate bank– www.valuePROPS.com– which provides comprehensive resource for all real estate topics related to buying, selling and renting with expertise knowledge.

The website offered service of advanced search for preferred area, mapping via GoogleMaps for exactly identifying the selected destination, financial calculations, blogging space and other interesting features that help the user to walk through the entire process from buying and selling to the completion of transactions.

ValuePROPS.com would be the pioneers in launching, for the first time in India, ‘a multi lingual interface’ dedicated to its users with the best online experience. It would be available in Tamil, Telugu, Kannada and Hindi.

ValuePROPS.com provided easy access to about 5000 registered agents, facilitating the customers to buy and sell their property.

This interactive website ensured transparent dealings, revenue sharing model and above all scope for users to validate th data to help other prospective customers.

Currently, the service was dedicated to properties across the southern cities of Chennai, Bengaluru and Hyderabad and it had a vision to encompass the whole country in the future.

DoE Issues Show cause Notice In Foreigner’s Property Issue

Panaji, May 28: Directorate of Enforcement has initiated show-cause notices against the foreigners who have brought properties allegedly in the state violating of Foreign Exchange Management Act.

The notices issued directly to the parties and also through the state government has asked why their properties involved in the contravension of the FEMA should not be confiscated to the central government account in terms of Section 13 (2) of FEMA 1999.

All the respondents (foreigners) have to appear in person or through legal practitioner at DoEs Mumbai office at different dates as mentioned in the notice.

Goa, the erstwhile Portuguese colony, woke up to the grim reality of losing its large chunk of lands to the foreigners allegedly in violation of FEMA. The state government in their report presented on the floor of the house sighted 392 such cases and formed a high level Anupam Kishore committee to probe into the violations.

The committee, prima facie, had found violations in 298 cases, which were referred to Directorate of Enforcement and Reserve Bank of India.

UK and Russians topped the list of foreigners who had invested in properties in Goa, mostly by forming companies.

Mr. Anil Kumar Singh,DoE’s assistant director, said,”Those cases where investment is above Rs 1 crore will be heard by special director while below Rs 1 crore will be referred to deputy director”.

He said that after the show-cause notice, the parties will be given an opportunity to present the case with their documentations.

Mr. Singh further said that most of the cases, the properties are below Rs 1 crore as they were purchased during 2000-2001 when real estate was not booming.

The DoE which is investigating the case through the show-cause notices issued has asked the parties to reply within 30 days as to why adjudication proceedings as contemplated under FEMA.

While the authorities, for past two years have been probing this huge chunk of cases, the DoE had to route some of the show-cause notices through Goa government as some addresses were not traceable.

Additional collector Swapnil Naik said, “We served the notices taking help of panchayat-level officers like talathis” .

The legal experts, however, feel that the property these property purchases are not in violation of FEMA.

Mr. Vikram Varma, a lawyer, who will be defending almost six cases of Britons, Russians and Italians before DoE, said, “Section 7 of FEMA mentions that nationals from Pakistan, Bangladesh, Sri Lanka, Afganisthan, China, Iran, Nepal or Bhutan cannot buy properties in India without prior permission of RBI”.

He said that union government has cleared 100% foreign direct investment (FDI) in tourism sector and Goa investments have come in that sector.

Mr. Varma said that as far as Goan properties are concerned, they are not agricultural properties. He further added, “They are either old Portuguese houses, apartments or small bunglows, which already have no objection certificate from panchayats”.

The legal expert also said that the companies which are registered in Goa are Indian entities and cannot be termed as foreign.



Carrefour May Choose Parsvnath For India Foray

Carrefour, the world’s second largest retailer, is considering the franchise model to initially expand its presence in the country and may announce a local partner in four weeks.
The French retailer, which has held talks with as many as 50 domestic business houses including Mumbai-based Wadia group and Mukesh Ambani-led Reliance Industries and real estate companies, such as DLF, in the past five years, may choose Parsvnath, a New Delhi-based real estate company, as its partner.
Parsvnath has emerged as the strongest option for the franchise partnership. A person familiar with the development at Carrefour gave the same timeline for the announcements. Parsvnath has almost five million square feet of retail space under its belt and plans to increase it to six times in the next five years.
The retail giant’s negotiation with other domestic houses and companies failed as they wanted greater control over the business.
Carrefour is exploring the wholesale cash-and-carry format and front-end retailing options in the country. It has already formed Carrefour WC & C India and Carrefour India Master Franchise Company for the respective business formats.
Mr. Pradeep Jain, Carrefour’s chairman in India said, “We are likely to announce our retail partner in three to four weeks”.
Under current government guidelines, foreign direct investment is allowed in the wholesale cash and carry model but it is not allowed in the multi-brand retail stores. In single brand retail stores, it is limited up to 51%. However, multi-brand international retailers can operate through the franchise route where an Indian partner would own the operations.
Carrefour SA Chief Executive Officer Jose Luis Duran had said last month that it was worth investing in India before the limits on overseas companies’ ownership of local stores were lifted. The company was talking to potential Indian partners to start a wholesale business and may announce the winner in the coming “weeks or months”.
Mr. Somesh Dayal, marketing head for Carrefour India said, “We still haven’t zeroed in on a partner as it is all in the early stage”.
It is Carrefour India Master Franchise Company that would give its Indian partner the licence to do front-end retailing with using the French retailer’s brand name. Carrefour would also manage the whole-supply chain and provide the logistic support to the retail firm.

PE Money Coming In Full Flow Into Indian Realty

The private equity (PE) graph in India’s real estate sector is growing as high as its skyscrapers. The first five months of 2008 have PE commitments in Indian real estate companies surpassing the total PE investments committed in the whole of 2007, which is $3 billion.
Experts say PE funding in the second half of the year will be even more. This is a good time for PEs to invest as there is a liquidity crunch and valuations of many real estate players are down. PEs also expects a further lowering of valuations, somewhere in the tune of another 20%. Even as private equity money comes into the market, there are concerns among investors about the execution capabilities of many of developers.
The months since January haven’t been too conducive for the real estate market in India. Real estate stocks plummeted as the stock market crashed January onward. Many real estate players have been feeling the liquidity crunch and this is where private equity funds have an opportunity to cash in. This is a good time to close deals and scout for more at lower valuations.
Mr. Jagdeep Pahwa, India Investmetn Management director said that a lot of the deals that were closed this year may have started negotiations sometime last year. They closed a $150 million deal with Maytas Properties in February 2008 but the negotiations were on since the third quarter of last year. He further explains, “Earlier, people could tap debt as well as the public market, both of which have dried up today. PE is today more available versus the other two. Deals that are happening today have a higher component of preferred returns which offer a form of downside protection to the investor”.

Sub-prime crisis to lower investment in Asia’s property sector

The global sub-prime crisis will this year have the greatest impact on “mature” property markets in the Asia-Pacific region, leading to an overall decline in investments, international property consultant Jones Lang LaSalle predicted Tuesday. Direct commercial real estate investment in Asia Pacific reached a new high of 121 billion dollars in 2007, up 27 per cent on 2006, but prospects for 2008 are less rosy, said Jones Lang LaSalle.
Fallout from the sub-prime crisis, which started in the US, has been most evident during the first quarter of 2008 in more mature markets in the Asia-Pacific, such as Tokyo, Singapore, Sydney and Melbourne, where office capital values appear to have peaked, while a slowing in price growth is also likely for Hong Kong.
“As these markets account for the lion’s share of investment activity, we expect a decline in overall transaction volumes in Asia Pacific this year following the record result in 2007,” said Jane Murray, Head of Research – Asia Pacific at Jones Lang LaSalle.
But the sub-prime crisis will have a varied impact on the region’s property sector this year, said the real estate consultant.
In the office sector, a sharp slowing in rental growth is under way in Tokyo, while Singapore is seeing the beginnings of a softening in pre-let rates, and Shanghai has begun to brace itself for slowing demand in Pudong amongst its vital financial services tenants, said Jones Lang LaSalle.
But on the other end of the spectrum, the Manila office market has seen strong growth in business process outsourcing due to the increased emphasis by multinational corporations (MNCs) on lowering operational costs, it noted.
Another trend noted was that of MNCs moving their offices from central business locations to “cheaper peripheral sites.”
Singapore, for example, is seeing strong enquiry levels for built-to-suit options in business park locations, driving up rental levels in these districts.

Gayatri To Buy Five Infrastructure Companies

Infrastructure firm Gayatri Projects is all set to acquire five smaller infrastructure firms in the country, paving the way for its inorganic expansion. The company plans to fund these acquisitions through divestment of 49% equity in favour of Australian multi billion-dollar wealth management firm AMP.

The latter will bring to the table Rs 200 crore through foreign direct investment (FDI) for the planned expansion of Gayatri Infra Ventures (GIVL), a subsidiary of Hyderabad-based developer Gayatri Projects.

The company plans three acquisitions in the north, giving it access to projects on the north-south corridor, and two acquisitions in the south, including that of the Cyberabad Expressway eight-laning project. Western UP Tollways (WUPTL), Gayatri Jhansi Roadways (GJRL), Gayatri Lalitpur Roadways (GLRL), Hyderabad Expressways (HEL) and Cyberabad Expressways (CEL) special purpose vehicle (SPV) are the other acquisition targets.

WUPTL is a joint venture SPV with Satyam-promoted infrastructure firm Mytas and Nagarjuna Construction Company. The plan is to acquire 40% WUPTL stake while 30% each remains with other two partners for the strengthening, improvement and maintenance of NH 58 in Uttar Pradesh. Gayatri also plans to buy out 49% stake of GJRL and GLRL in their joint ventures with IDFC.


Omaxe Annual Business Report

Realty firm Omaxe on 26th may reported consolidate net profit of around four hundred ninety five crore rupees for the year ended 31 Mar 08, a more than two-fold jump over the preceding year.
The company had recorded a consolidated net profit of around two hundred forty four crore rupees in the earlier fiscal, Omaxe said in a statement.
The consolidated revenue rose by 60.26 % at Rs 2,307.75 crore in 2007-08 following solid demand in the property market, it said.
The company also pronounced a dividend of 25 % on equity shares for the FY ended 31 Mar 08.


Overseas Investment Spurs Dubai real Estate Development

The real estate sector in Dubai is being driven mainly by overseas investment, with individuals and companies from other countries consist of 60-70 % of the buyers of freehold units.
2 out of 3 of all the new freehold properties in the emirate are bought by overseas companies or persons who live outside the country, says a study, which also divulges that property developers in Dubai have USD 100 billion worth of new development projects in hand.
MAG Group Property Development, which is looking to produce its portfolio of new property projects to more than USD 2.72 billion by 2012, says final home owners currently account for just 30 % of the market and only 5 % of them are UAE nationals.
“Motive for this phenomenon is investing in property in the UAE is seen as safe and rewarding and presently better than investing in bonds or stocks,” said MAG Group CEO Mohammed Nimer.
“Despite of many challenges, for example rising costs and shortage of contractors, the real estate sector in the UAE is still one of the most favored investment areas in the country. The return on the investment can reach as high as 40 %, an unbeatable figure,” he added.
Nimer said foreign investment by both developers and buyers, which represents 60-70 % of investment in freehold property, remains vital for the continued growth of the real estate sector.
Investors from Pakistan, India and China as well as other emerging markets such as South Korea and Brazil are increasingly showing interest in tapping lucrative opportunities in the UAE.

VCFs, FVCIs Ready For Real Estate Sector

The real estate sector has hogged the attention among favored investment avenues for a host of venture capital funds (VCFs) and foreign venture capital investors (FVCI) during the preceding fiscal. Amongst different sectors, together with IT and telecom, real estate alone attracted twenty percent of the total investments made by both VCFs and FVCIs during previous fiscal.
Of the overall investments of Rs 103,470 crore in 9 dissimilar groups, real estate alone attracted more than Rs 20,000 crore investments during the previous fiscal, followed by the service sector (Rs 9,350 crore), according to data available with the Securities & Exchange Board of India (Sebi).
According to the data available, there has been a sharp raise in investments from both the segments of investors. In the Ist quarter’s (ended 30 Jun 07) investment of Rs 2,788 crore, the sector received a whopping investment of Rs 7,285 crore in the last quarter (ended 31 Mar 08), thereby taking the cumulative investment to over twenty thousand crore rupees during the financial year.
IT, regarded as to be a preferred among the investors till one year ago, lost its shine and ended up in third place after the services sector.

Saffron Group Wants Foremost Place In Realty Funding

Real estate private equity firm Saffron Group on 25th may said it has chalked out a two-sided plan to become a leading player in the market staying put for a minimum 5 yrs in upcoming properties and buying out properties with assured rental income.
The Group, a brainchild of Ajoy Veer Kapoor and his peers from the banking society, is the promoter of Euronext listed Yatra Capital, an India-focused real estate fund. It has also launched Saffron India Real Estate Fund-1.
“Our plan is to be a foremost player in the field. We don’t have any short-term view. The industry is rising and it will yield better results for another 10-15 years,” Kapoor said.
Yatra Capital has already raised two hundred twenty million euro through two public offers and has invested almost 75 % of that in the Indian real estate market.
The Saffron India Real Estate Fund I, launched in Feb 2008, is raising a USD 350-450 million unlisted fund, with a hard cap of USD 500 million. It has done a first close on 3 Apr 08 with an anchor investment of USD 75 million from Standard Life UK. It is expected to close by the end of 2008.


Will Property Price Come Down In The Near Future?

Many expect a further correction in home prices in India. Since the volumes of property transactions are going down, hence the asking price for property will also go down. Additionally, over-supply of property is posing as a major reason for the slow down in Real Estate prices.Recent media reports have also suggested the same trend. Reports suggest that Real Estate Prices in Mumbai, Bangalore, Pune, and National Capital Region have corrected 15-20% in the first quarter of this year. Market-watchers say that this trend will be repeated across the Tier II cities and suburbs too. No wonder property developers are wooing prospective users with all sorts of offers. Some are even offering lower EMIs for flats while some are offering goodies like cars along with property. Still others are wavering off the stamp duty prices.
Are the property prices coming down in your area? Is the property slow down really impacting the end user in a major way? Should the home seekers cheer for some reasons? Is there a possibility of a market dive? Or is this a temporary phase in the housing segment?

MMRDA Plans 5 Lakh Homes

There is a severe shortage of houses in Mumbai but, there is no dearth of government agencies wanting to build houses. The Mumbai Metropolitan Region Development Authority (MMRDA), which normally plans and executes infrastructure projects, has proposed to build 5 lakh houses in the Mumbai Metropolitan Region (MMR) over the next 5 years.Maharashtra Housing and Area Development Authority (MHADA) and Slum Rehabilitation Authority (SRA) are other agencies involved in similar activities.

Metropolitan commissioner Ratnakar Gaikwad declared on Friday that MMRDA now plans to offer rental houses of 160 square feet each. MMRDA plans to take up construction of 50000 houses this year itself. The rent for these houses will range between Rs 800 and Rs l500 per month. The rental housing plan has been announced under the Slum Prevention Program (SPP). He pointed out SPP was an improvement over the slum rehabilitation program as it is aimed at providing affordable rental housing to migrants.

Mr. Gaikwad further said that SPP is a mix of several existing or old slum improvement and housing schemes like the old chawls in the island city which took care of early migrants like mill workers, dock workers etc to the city. The proposed rental houses would come with an attached toilet block unlike the chawls. MMRDA has earmarked Rs 100 crore for SPP.

In Mumbai and its suburbs, SPP offers a significant business opportunity to builders as MMRDA plans to take the public-private partnership (PPP) option to build houses. But in the larger metropolitan region which runs much beyond Panvel, Badlapur and Vasai-Virar, Mr Gaikwad said the PPP option may not be feasible.

Mr Gaikwad further said “As in the case of infrastructure projects in Mumbai where project affected persons (PAPs) are rehabilitated by the developer on his own land in lieu of transferable development rights (TDR) for both land and construction, we will be offering TDR to the builder as an incentive to make rental housing stock available”.

Mr. Gaikwad said that in the metropolitan region, MMRDA will develop housing stock on its own. In return, the agency expects the state government to compensate by granting additional floor space index on the site itself. The metropolitan commissioner said the agency would sell the additional FSI at market rate to compensate for the rental housing programme. MMRDA has identified sites at Thane, Dombivli, Ulhasnagar, and Karjat and plans to start construction work on these sites in four to five months.

Property Loans Default

The number of commercial property loans in default has soared 400% in just 1years, according to a report.
The study of bank lending to the commercial property industry illustrates that while the amount lent continued to rise in 2007, nearly four hundred loans slipped into default, up from fewer than eighty in 2006.
Although the collective value of the loans – at £250m – is somewhat small, it suggests that a increasing number of smaller property investors and developers are failing because of the present financial crisis.
Unexpectedly, the number of commercial property loans that are in breach of financial covenants, but not yet in default, improved over the year. Loan breaches reduced from 1,900 – 1,050, suggesting banks are working harder to resolve debt problems before they move to default.

RETV Has Appointed New CEO

On 21st many Real Estate TV (RETV), a round the clock channel committed to infrastructure & realty had appointed Prem Kumar Menon as a its CEO
Menon having twenty seven years of prosperous media and marketing experience and prior to joining Real Estate TV, he was working as COO of a media group in Chennai, the channel informed in a release.
In addition Menon, A. Nair has also joined the group as its News Head. Before this appointment A. Nair was working as business journalist in the Indian Express Group.
Real Estate TV is the Ist channel in the country comprehensively engaged in tracking developments in real estate & infrastructure.


Videocon Group Will Invest Rs 30-cr In Gujrat Realty

Consumer durable major Videocon Group has bought out a housing society off Ashram Road, one of Ahmedabad’s prime business areas, for over Rs 50,000 per sq yard in a Rs 30-crore deal.
The housing society, Lotus Society, is located along the Sabarmati river – where the ambitious Rs 2000-crore riverfront development project is coming up – is spread over 6,000 sq yards. The group plans to come up with a commercial complex and a five-star hotel.

Earlier, a city-based developer had tried to acquire the Lotus Society. Subsequently, a couple of other local developers had jumped into the fray and negotiated for the same property. However, Videocon signed the deal around a month ago.

The deal was struck with the help of local builders. According to industry sources, Videocon has already made part payments to the flat owners, who have signed an MoU with the company as per which they have to vacate their flats within a stipulated time frame.

Videocon Group had identified the land keeping the Sabarmati riverfront project in mind. The group is venturing into grocery and lifestyle retailing space through cash-and-carry format across the country. It has appointed KSA Technopark, Earnst & Young and Price WaterHouseCoopers as advisers for its retail plan.

The group has already appointed Subir Ghosh, former CEO of Essar retail, as head of its Planet M business. At present, the company is looking for suitable land in Ahmedabad, Kolkata, Aurangabad and Ahmednagar. The company intends to set up 40 stores across the country.

Each of these stores would be set up on an area ranging between 75,000 square feet and 1 lakh square feet. The group has plans to spend over Rs 5,000 crore on establishing its retail business in the next five years.

With Rs 1 Crore Per Month, Rental Goes Through Roof

In April end, the London headquartered Barclays bank concluded negotiations to take on lease 15000 square feet of office space in CeeJay House, Worli, at a record-breaking rent of Rs 725 a square feet per month. This is so far the highest ever lease rental for any commercial property in the country.The monthly rent comes to Rs 1.08 crore or over Rs 13 crore annually. However, property experts said this is an exceptional deal and does not reflect the commercial lease rental market in Mumbai, which has been softening because of a steady supply of good office space.

The landlord of CeeJay House, located next to Poonam Chambers, is none other than civil aviation minister Praful Patel, who incidentally occupies a residential duplex spread over 35,000 square feet with a swimming pool in this building.
Sources who monitored the transaction said that Barclays already occupies 60,000 square feet between the 5th and 8th floors of Cee-Jay House since 2006. The bank has now taken an additional 15000 square feet on the 15th floor in order to expand its operations. The over 300-yearold Barclays is a major global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services, with presence in Europe , the USA, Africa and Asia.

Among the other tenants in CeeJay House are Lehman Brothers, Societe Generale, KFW, Hypo Bank, Depfa Bank and Credit Suisse. Most of the top tenants in this building were introduced by the global property consultant firm C B Richard Ellis.

One of the biggest commercial lease transactions recorded in 2007 was when ABN Amro Bank renewed its lease for an office on the third floor of Nariman Point’s 12-storey Sakhar Bhavan at the rate of Rs 500 a square feet per month. Pranay Vakil, chairman of Knight Frank India, said about 8 million square feet of commercial premises will be added in the next six months to one year. They are mainly located on the Andheri-Kurla Road, Tulsi Pipe Road, Parel, Bandra-Kurla Complex and Kalina.