Parsvnath seeks stake sale in projects to control debt

Real estate firm Parsvnath Developers Ltd expects stake dilution in individual projects to help it control its debt and hold margins in a rising interest rate regime, a top official said.
The New Delhi-based developer reported a 16% drop in first quarter net profit at 712.9 million rupees. Net sales were also disappointing, up just 5% from a year ago, to 3.65 billion rupees.
“The bottomline was down because of higher interest costs and input costs,” Chairman Pradeep Jain said.
Parsvnath was mainly hit by a more than five-fold rise in its interest burden to 174 million rupees. The company is currently carrying debt of about 17 billion rupees, compared to 10 billion rupees a year ago, when interest costs were also lower by a third.
India’s central bank this week raised a key lending rate for the second time in two months, to a seven-year high, as part of efforts to cool down the economy and curb double-digit inflation. Banks have reacted by pushing up lending rates to customers to their highest in almost a decade.
Real estate developers in India have been hit by the rising rates as they struggle to cope with a large number of unfinished projects, but are faced with sharply lower demand as high rates bite property buyers dependent on home loans for funds.
“Our average cost of borrowing is 12.85% and has risen about 20 basis points in the last three months,” Jain said, adding that his firm is currently borrowing at rates in the 13.5-14% range.
“We are trying to reduce debt. We are looking at equity dilution in our SEZ (special economic zone) and hotel projects for this,” Jain said, adding the company was in talks with a few partners for due diligence.
Earlier this year, Parsvnath sold 30% in a Mumbai project to two real estate funds for 1.86 billion rupees. Several other large developers have also leaned on private equity deals in the past year, to unlock value in ongoing projects.
Parsvnath shares ended at 111.75 rupees, down 0.9% in a firm Mumbai market that ended 0.5% higher.


Red Fort Capital Will Invest Rs 40 Billion In India

Red Fort Capital, a Cayman Islands-based private equity fund focused on real estate development, is in the advanced stages of negotiations with six developers for projects worth Rs 40 billion in the metropolitan areas across India.

The fund will be developing an information technology park in Kolkata with Godrej Properties, with Red Fort holding a 49 % stake. The project, dubbed Godrej Genesis, is expected to generate sales of over Rs 7.50 billion.

“We are in the process of closing a number of transactions in the National Capital Region, Mumbai and Bangalore. We are currently talking to six different developers in these cities,” Red Fort Capital director Kuldip Chawlla said.

MP Government Initiates 12 Investment Proposals

Madhya Pradesh government initiated 12 investment proposals worth Rs 32,000 crore during a two-day Investors Meet here.

The memorandums of understanding signed on the first day of the meet included Rs 1,300 crore cement plant, Rs 1,000 crore real estate unit, Rs 10 crore sponge iron unit and Rs 450 crore bio-energy unit besides several others.

Addressing the function state Chief Minister Shivraj Singh Chouhan said concerted efforts would be made to restore the golden era of Gwalior in the industrial sector.

He announced that Gwalior region would be placed in ‘C’ catogery to accelerate the pace of industrialisation and Udyog Mitra Yojana would be extended for another six years to facilitate the entrepreneurs of the region.

Eminent industrialists V N Dhoot, Raghupati Singhania, Senapati, Sajjan Jindal, Vinod Mittal, Pankan Munjal, H Ikava among others were present on the occasion.

Chouhan said that investors’ meets are not a political move and the government and is very serious about it.

He said that investment Facilitation Bill has already been passed in the state and the SEZ Act 2003 for Indore has been extended to the entire state.

Referring to the power situation he said that the state is better placed in comparison to many other states in respect of power supply.

Power generation capacity has also been increased by 2,950 MW over last four and half years in the state.

Sunil Mantri To Develop Township

Real estate firm Sunil Mantri said that it will invest Rs 2,000 crore on developing a 2,000-acre residential project in Gwalior over the next decade.

The company signed an MoU with the Special Area Development Authority, Gwalior, to carry out the project under public-private-partnership model, the company said in a statement.

As per the MoU, the realty firm would set up a Hi Tech city over an area of 2,000 acres, comprising 25,000 housing units.

The company has already acquired 375 acres for creating housing for the low and mid-income people.

Around 5,000 houses would be provided in this project and the developments work would be commissioned by October this year.

It is currently developing three new projects in Gwalior, consisting of residential, a shopping mall cum multiplex and commercial spaces.

Integrated Logistics Park In Haldia By AILPL and Eredene Group

In a joint venture with Apeejay Infra-Logistics Pvt Ltd (AILPL), UK-based Eredene Group, which has a 50 % stake, is set to develop an integrated logistics park in Haldia.

“In this view, the Haldia Development Authority has already earmarked ninety acres of land for them in its industrial zone area and the lease acquirement is in process. This logistics park site is just about 7km from the Port of Haldia and near to its petrochemicals centre. It will be developed to provide distribution warehousing and transport services in addition to ancillary facilities like commercial offices, hotels, retail outlets and light processing workshops,” said Mr Parwez Ahmed Siddiqui, chief executive officer of HDA.

Haldia is situated 90 km downstream from Kolkata at the confluence of the Haldi and Hooghly rivers, and ranks as the 5th largest port in India. It is a major petrochemicals centre with an oil refinery, fertiliser facilities, manufacturing plants and a mixture of light industries.

According to Mr Siddiqui “The West Bengal Industrial Development Corporation (WBIDC) and Tata Steel have formed a JV to build a coking plant for the production of 800,000 tonnes of coke per annum. Such a port-based industrial zone should have a logistics park and I think that this should have been built at least 15-20 years before,” .
Eredene has invested with Apeejay Surrendra Group, the owners of Typhoo Tea and a global Indian business which employs more than forty thousand people in real estate, tea, hospitality, shipping and retail.

Red Fort Capital Joined Hands With Godrej Properties

Red Fort Capital, a private equity fund focused on real estate development, is in advance stages of negotiations with six developers for an equal number of projects worth Rs 4,000 crore in the metros across India.
The PE fund joined hands with Godrej Properties to develop an IT park in Kolkata, where Red Fort Capital has picked up 49 % stake. The project, Godrej Genesis, is expected to generate sales of over Rs 750 crore.
“We are in the process of closing a number of transactions in the NCR, Mumbai and Bangalore. We are currently talking to six different developers in these cities,” Red Fort Capital Director Kuldip Chawlla said.
Without divulging names of the possible builders, he said three of them are ‘big national developers’, while the rest are local players.
The company currently is evaluating one residential and one commercial project in each city, where the fund would pick up stake between 30 % and 80%, he added.
“The total project cost of all the six properties could be over Rs 4,000 crore. These projects will be developed in the next 2-4 years,” Chawlla said.
Elaborating on its IT park project in Kolkata, Chawlla said ‘Godrej Genesis’ would have a developable area of over one million sq ft.
“This is our first project in Kolkata. Already many domestic as well as international IT firms have shown their interests to set up offices in the complex,” he added.

Impact Of Rate Hike On Real Estate

Real estate companies observes their cost of borrowing rising by 1% age point as the central bank has increased the repo rate by 0.5 % and cash reserve ratio by 0.25 %.
The rate hike will push up the corporate lending rates. This, in turn, is anticipated to further strain the balance sheets of realty companies, already reeling under a fund crisis in the wake of slower property sales, higher lending rates, increase in input costs and the central bank’s measures to check conventional sources of funding.
“The borrowing rates will be 1% higher. The rate hikes will ultimately hurt the balance sheets of real estate companies. The cost of funds for our upcoming power projects will go up drastically,’’ said Ajith Mittal, president, corporate affairs, Indiabulls Group.
Indiabulls’ property arm Indiabulls Real Estate is into residential, commercial and retail realty development. It has ventured into power and is setting up power projects in Jharkhand and Maharashtra.
Hitesh Agrawal, head of research, Angel Broking, said, “We deduce the rate hike impact to be visible not only on the rate sensitive sectors like banking, realty and auto, but also on corporate profitability as a whole as most sectors and companies have embarked on huge capacity growth plans.
Property transactions in the major Indian cities such as Mumbai and Delhi have fallen 10 – 15 % because of higher lending rates in the previous 6 months, limiting the cash flows and execution skills of developers.
“Developers need to think in the hike in lending rates, which will lead to a dip in demand. Nevertheless, a rectification in real estate prices will make up for the dip in demand caused by increase in rates,’’ said Mittal.
The majority of real estate companies have been watchful in buying land and beginning new projects, given the tight monetary picture. Akruti City, another Mumbai-based developer, is concentrating on housing projects.

Fluctuation And Deviating Real Estate Prices

The question that bothers a lot of prospective home buyers is whether they will miss the bus if they wait any further. However, the right question should be: Can I afford to buy a house today? Even if you are one of those blessed ones, the thought should be: Is it a fair price for the house? Your house might not be an investment, but does that mean you should pay any price for it?

The prices currently being quoted are simply atrocious. From a time, not too long ago, when people talked about loans of Rs 10 lakh to Rs 50 lakh, today the average loan size is substantially higher.

A simple 2-bedroom house in Malad can cost up to Rs 1.2 crore (including stamp duty and registration charges). This is the price that sellers expect, but this does not mean they are actually getting it. The cost of a similar flat 4 years ago was close to Rs 30 lakh.

The entire real estate boom took off in 2003 on the back of very low interest rates and low prices. However, the situation has changed now with realty prices going up 3-4 times, while interest rates are 60-70% higher. Incomes have certainly not grown four-fold in the past four years. Today, even if you are earning Rs 25 lakh annually, it is extremely difficult to buy a 2-bedroom house in the suburbs.

Even if you make a down payment of Rs 20 lakh, you will still end up borrowing close to Rs 1 crore. This would mean an EMI of close to Rs 1 lakh per month. So, after tax and EMIs, a person with Rs 25 lakh gross income will be left with just Rs 5-6 lakh as disposable income for lifestyle and living expenses. Once you take EPF contributions, you will just be left with Rs 4 lakh annually.

Lifestyle inflation (driving a car, visiting malls, eating out & entertainment), which is much higher than normal living expenses, eats up a significant portion of one’s income. Hence, it is just not possible even for someone earning Rs 30 lakh to service an EMI of Rs 1 lakh every month. Even if you do manage to do it, you will be left with no savings.

Real estate prices, though location-specific, have been witnessing a slowdown in demand. One might argue that luxury accommodations might not be impacted by this. However, there is a visible slowdown in real estate and prices are down on an average by 10-15% in places like Mumbai.

Unlike the stock market, there is no index for the real estate market and no price-discovery mechanism. In fact, the price discovery is very subjective and identical properties in the same building can go for two different prices. If one had a real estate index, it would have had given details on number of transactions.

There have been several reports of builders borrowing at very high interest rates and some defaulting on their interest payouts. In fact, real estate stocks have been hammered the most and the basic assumptions on which their landbanks were valued are a matter of debate now.

Speculators have started to exit since late last year and investors trying to exit now are unable to get the price they could dictate some time back. With rising interest rates, demand should come down. However, location still rules and some premium commercial property could still fetch good money.

Not that it is any indicator, but if you look at the price-to-rent ratio (PR Ratio) similar to PE ratio, one can clearly see that the prices are in the bubble territory.

Since there are no margin calls in the realty space, the holding capacity of an investment can be substantially higher than a leveraged exposure in stock market, where margin calls have to be attended immediately. Hence, real estate prices generally do not fall drastically.

Small builders are cash-starved and are not getting into new projects. This is the case with mid-size developers. However, big builders with access to IPO funds and PE funds can wait for an extended period of time before cutting prices.

One can clearly see that the discounts offered in the form of stamp duty waivers or furnishings are nothing but a desperate attempt to get end-users.

Like in the stock market, it pays to be patient in the real estate market too. For realty market to sustain itself there should be a steady inflow of end-users. Speculators and investors can only take it to a certain level. End-users can only come when prices are affordable and for that at least 30% correction is a must.

REMF Cleared By Finance Ministry

The cloud on real estate mutual funds (REMF) has lifted. The finance ministry has brushed aside RBI’s concerns of REMFs violating foreign direct investment (FDI) norms in the realty sector. North Block has said the central bank’s concern stating that REMF scheme notified by Sebi in April contradicted FDI norms was unwarranted.

The finance ministry view could pave way for the launch of new investment avenues for small investors keen to tap the real estate sector’s growth potential. The doubts raised by RBI added to the hesitation in REMF launches.

Highlighting that the scheme allowed NRIs and FIIs to invest in real estate sector in conflict with the policy, the apex bank had asked finance ministry to intervene and take up the issue with Sebi.

The FDI policy prohibits investment in real estate but allows investment in construction and development sector with conditions like a three-year lockin , minimum capitalization of five million dollar for a wholly-owned subsidiary and ten million dollar for joint ventures, and development of at least ten hectares. The government had allowed 100% FDI in the construction and development sector on the automatic route in 2005 under the Press Note 2 issued that year.

In the reply to RBI, the ministry has stated that investment through REMFs could be allowed as there was no linkage between the investments made by a fund and its investors . REMF investors only own units in the fund and don’t drive its investments decisions on assets. Moreover, Sebi has prescribed several restrictions on investments by REMFs, government sources said.

The concerns expressed by RBI with regard to construction projects (as per Press Note 2, 2005) also did not hold much water as FII investment in pre-initial public offer are treated as FDI and face a three-year lockin , they said. There was no case for restricting NRIs investing in REMFs as they had been exempted from conditions applicable to FDI in the real estate sector.


RCTC Realty Deal With Real Estate Major Emaar MGF

Realty bucks have put a spring in the step of the sagging horse racing scene in Calcutta, with the Royal Calcutta Turf Club (RCTC) hoping the honeymoon lasts.

The deal inked by RCTC with real estate major Emaar MGF for a 300-room five-star deluxe hotel on the club’s 11 Russell Street premises with Park Hyatt as the hospitality partner, has injected fresh life into the racecourse, thanks to the initial funds flow.

“Yes, we could virtually double the stake money for the Monsoon Meeting, which started on July 16. This has in turn doubled the size of the field and we expect leading jockeys and trainers to turn their gaze back on Calcutta,” RCTC steward Kishore Bhimani said.

It is understood that Emaar MGF Land Pvt Ltd handed over a cheque for Rs 72 crore to the turf club last year as part of the joint-venture deal. The monthly profit-sharing bounty has also kicked in, and the turf club has received the first monthly cheque for Rs 61 lakh (after tax deduction at source and service tax) this month.

While the windfall has enabled RCTC to clear its dues (amounting to nearly Rs 18 crore), the turf club is worried over the delay in ground-breaking on Russell Street. Work on the campus, where the realtor is also committed to convert the heritage clubhouse building into a social club, is yet to commence, and the agreement is yet to be registered.

For the moment though, the welcome solvency has started manifesting on the racecourse, with the club completing construction of stables for 600 horses besides syces’ living quarters on the Kidderpore premises.

“The real renovation, however, can begin only after the army renews the lease for the racecourse,” says J.R. Mukherjee, the CEO of the turf club. The club management hopes to complete the entire renovation work by 2011.

“Once the lease is renewed, we plan to start work on the Monsoon Stands, followed by the Grand Stand,” says Boman Parakh, the secretary and chief financial officer of RCTC. While the condemned third enclosure will also be taken up for repair, the club is planning to set up “at least two restaurants and a well-appointed bar” at the racecourse.


Rentals in Pune Up By 300% In Last Three Year

Pune seems to be gradually losing its cost advantage among software companies. Many think that the rentals in the city are on their way up and could be a big deterrent for further investment.

Sunil Patil, president (Pune region), UBICS, a software company of the UB group, believes that the rentals may spoil the show. “Rentals in Pune for software companies have gone up 300% in three years. We are being offered space at Rs 65 per sq ft, which at $1.50 is the rate in Manhattan,” he said.

He was just echoing the prevailing sentiment among small and medium sized IT product firms that India’s cost competitiveness is slowly getting eroded. The shift in viewpoint clearly underlines the need to graduate to value arbitrage from cost, something many large companies have already achieved.

A CEO of a venture capital-backed software engineering services company tried to put it in perspective: “Outsourcing is a function of costs, in which productivity is a big factor. Overheads in the form of real estate and utilities costs in India are now 25% higher. The economic benefits of working in India are huge, otherwise why would anyone outsource work here? In the past, cost differences used to hover at 40-50%. So, despite the 25% higher overheads, it still made sense to offshore work here.”

Interestingly, he hinted at more of in-sourcing happening, that is work offers being sent back to the US, something which usually surfaces when a major political event in the US is round the corner. But Ganesh Natarajan, chairman, Nasscom, is categorical that India has still not lost her cost advantage. In Tier II cities, it’s all the more visible, he said.

Small Developers Selling Their Land Due To Cash Crunch

Due to the depressed real estate market, all projects of small developers (grade C & D) are up for sale as no development has started because of severe cash crunch. And the big developers (grade A & B) are said to be scouting for these kinds of projects as they are proving to be more viable for them.
According to sources, this phenomenon is more evident in tier II cities but, slowly moving to metros as well.
Explaining the reasons, the sources said that whatever support was available in terms of short-term financing or private equity is now focused only on large developers with stronger balance sheets because of their ability to hold out longer.
Several smaller developers are so badly hit that they are choosing to sell their land parcels to larger developers. The cities that are witnessing these kind of transactions are Amritsar, Chandigarh, Karnal, NCR, Indore, Mumbai, Pune, Bangalore and Chennai.
In fact, small developers, reeling under the impact of cash crunch, feel that holding onto their projects will bleed them more, and thus they are forced to sell them to larger developers. A number of such damage-control transactions are expected in many smaller cities and metros.“Lack of liquidity is a very serious problem for almost all developers today.
The current environment is like a perfect storm for the developer community, as almost all sources of financing have dried up, at a time when the real estate markets may also be moving southwards. Having said that, it is the smaller developers who are worst affected — so badly hit that they are choosing to sell their land parcels to larger developers,” said Sandeep Singh, director, capital markets group, Cushman & Wakefield India:
A bigger impact of the liquidity crunch is from the bank-debt side. Banks are being very choosy about whom they are lending to and for what kind of project. While large developers are still able to get bank loans, it’s the smaller ones who are having a tough time. Most of the developers expanded so fast in the last three to five years that they do not now have any ability to pump in more of their personal equity in any given project.
Explains Pawan Swamy, MD, Jones Lang Lasalle Meghraj: “In this scenario, the smaller developer has an underperforming project that was not doing well to begin with. Regardless of the state of the market, he would wish to sell it off to a larger developer, since the project is not taking off in the first place. It is a straight forward transaction based on logic rather than the liquidity issue.”

Ambala Hot Destination For Real Estate

A historical district of Haryana, may still be longing for true genesis of its nomenclature but the city is slowly opening up to real estate investments that were non-existence till a couple of years ago.

The city, divided between Ambala Cantt and Ambala City, is bringing up a few group housing schemes and commercial projects.The transit city between Chandigarh and Delhi caught the eye of realtors after the six-lane project was initiated.

The city is destined to shorten the travelling distance by around an hour after the road-widening project is completed.

The real estate scene here is expected to heat up further as companies such as Unitech, Reliance Industries and DLF are believed to be acquiring land for their SEZ in Naraingarh.

For the time being, Vatika Group is coming up with its group housing scheme that will be followed by commercial properties. The group has one of the largest land banks of over 170 acres in the city. The group is also into plotting with a rate of Rs 7,500 per square yard.

The plots are available in 240 yards, 300, 500 and 1,000 categories. The Vatika Group is likely to open its group housing project for booking by next month. The residential project, coming up on 10 acres, consists of around 500-700 apartments of three and two bedrooms. As much as 45% of land is to be kept as green space. The group is also planning to set up a multiplex.

A few other realtors are also mulling to set up malls. Colonies are also being developed in areas bordering Dera Bassi of Punjab, which have an approach road towards Ambala district, to cater to the residents in Haryana.

Projects such as Dreamland Colony, Defence City and Omaxe Greens have come up in Punjab even though they are practically an extension of Ambala and accessible from both Ambala Cantt and Ambala City. The new projects have proper wide roads, sewerage, water and street light facilities.

The Centre recently released over 11,00 acres of land falling in the Ambala cantonment to the Haryana government. Over the decades, a major part of the Cantt area remained out of bounds for not just realty players but also for residents who could not undertake new construction as the building structures belonged to residents whereas land was possessed by the Centre.

Haryana Urban Development Authority’s sectors 9, 10, 11 in Ambala city are fetching a price of Rs 8,000 to Rs 11,000 per square yard. The houses are six marla, 10 marlas and one kanal. In Ambala Cantt, private colonies such as Agrasen Nagar, Ekta Vihar and Rani Vihar are being sold at Rs 12,000 per yard. The plots range from four marlas (100 square yards) to one kanal (600 square yard).

Between the Cantt and City, HUDA has set up three new sectors — 32, 33 and 34. HUDA has plans to add 30 more sectors as part of its expansion. The going rates of government plot ranges from Rs 8,000 to Rs 10,000 per square yard.

Delhi Township And Delta Township Real Estate Are New Investments Opportunities

Delta Township just built a brand new library that recently opened. It has plenty of events being offered this year for all ages. Delta has been a thriving and dynamic community that supports education, planned growth, safety and a positive community.

Delhi Township has mastered the art of balancing development and quality of life. Delta Township describes itself as a superb growing ground for children and teens. Holt School District boasts four Michigan Exemplary Schools, and Holt’s high school was recognized as one of the top 100 schools in the nation.

The housing market has been challenging this year to say the least, however compared to other communities; both Delta and Delhi offer a great selection of homes that will provide a solid long-term investment for the home buyer. They have also held their value better than some areas of the country, considering the numerous media articles that have focused on bank foreclosure filings that make up less than 2 % of the nations homes and 75% of those will never be foreclosed upon due to workouts.

There’s a big difference in buying a home that is for sale and buying a bank foreclosure, which will make another good post at a later date. Right now is a great time to buy a home for long term investment.

Milestone To Launch MEAS With Ecofirst

Milestone, India’s largest independent Real Estate Fund house is launching Milestone Ecofirst Advisory Services (MEAS) through a 50:50 Joint Venture with Ecofirst. Ecofirst, established with a multi million pound budget, is a J. Leon Group company based in UK.

With the launch of Milestone Ecofirst Advisory Services (MEAS), for the first time in the country, a real estate fund house will be offering its invested companies/projects specialized consultancy services for eco-friendly development.

V. P. Arya, Managing Director Milestone Capital Advisors told“We want to ensure that most of the development (approx. five million sq ft) being funded by Milestone across the country would be eco-friendly and meet global norms in sustainable development,”.

“MEAS will not just offer its services to developers in metros, but for the first time in India offer world class green building consultancy to developers in Tier II and Tier III cities”, Mr. Arya added.

Milestone has invested in over twenty five projects across Tier II and Tier III cities, including residential, commercial, mixed-use projects and townships.

Initially MEAS will provide consultancy to projects being funded by Milestone and later extend the service to third party developers as well.

India has emerged as the hottest new favorite destination for green buildings and ranks fourth after US, Australia and Canada in the amount of area under green construction. As per CII-Indian Green Building Council (IGBC), one hundred forty seven million square feet of green space has been registered in India to date across a total of two hundred thirty nine projects. IGBC is aiming one billion sq ft of green footprint by 2012.

Milestone has so far raised over Rs.2, 400 crore from the domestic market and has the highest deployment ratio in the sector having so far signed investment deals worth Rs.1,800 crore.

Milestone presently is in the process of raising Rs.500 crores for its domestic fund “Milestone Domestic Scheme II”.

Real Estate Projects Become Attractive Due To Foreign Architects

In their bid to score over their rivals, many developers are now going abroad to hire noted architects who can design their new projects. Not withstanding the fact that currently the realty sector is seeing downward trend, still some of the noted design companies from other countries are opening their Indian offices to cater the real estate market.
The likes of Godrej Properties, Unitech, Omaxe, Hiranandani and many more are hiring foreign architect firms. As recently as last year, Godrej hired DP Architects of Singapore to design their 50-storey residential project in Mahalaxmi area of Mumbai. US-based Hellmuth Obata Kassabaum Inc (HOK), has already worked with Indian builders such as Unitech, Hiranandani and many other big firms. Will Roes, programme manager of HOK India says that they bring a global perspective and diverse expertise to a project.

It is true that hiring foreign designers and planners have many advantages. But, the negative side of hiring them is that in some cases they do not understand the complexities of doing business in India, including tax laws and also cultural consideration , feels Devinder Gupta of realty advisory Century 21 India.
In an interview, Niranjan Hiranandani, the managing director of the Hiranandani group says that there is a big difference in approach between Indian and foreign firms that undertake design jobs. He feels that international firms are more empathetic to developers’ needs and aspirations. “They find a solution which is required for a particular site, location and land. They are also more in tune with the land use demand,” says Hiranandani. “They are more open to new ideas. On the other hand, Indian firms have a trial and error approach to design and planning. They also try to impose their ideas on the developers.”

Singapore based firms like RSP Architects Planners and Architects 61 Ltd are also designing projects in many big cities in India and are serious of winning more projects here. RSP has reportedly opened their offices in Mumbai, Bangalore, and Hyderabad. It designed the international Tech Park in Bangalore.

It has also designed offices for IT giants like Wipro, Satyam and Microsoft. Devinder Gupta informs that legendry Unitech group has taken the services of great golfer Greg Norman to design the lush green golf course for their prestigious Unitech Grande project in Greater Noida. Clearly, the Indian realty firms are taking the services of foreign firms and experts to make their projects attractive.

Meanwhile, some Indian architects feel that global firms are definitely good when it comes to designing projects. But, they are critical of some of the mismatch. On many occasions, the initial designs done by them don’t make any sense. Finally, Indian architects have to enter the scene to undo the damage. CMD of Omaxe group, Rohtas Goyal says that with money starting to flow into Indian realty sector, it has become necessary to bring global architectural practices and expertise.

Moreover, customers fancy projects designed by overseas firms. From the developers’ point of view, it becomes a good marketing and sales proposition. It may be mentioned here that Omaxe has recently hired Indian Davis cup Star Leander Paes company to help them design the tennis courts in their residential projects. Those who follow the realty market of India feel that as competition hots up and properties get bigger, developers going to hire global architects to design their projects will become more frequent.

Moreover, builders are entrusting the design work for commercial projects and master planning of a mixed use developments to foreign firms.

It is also learnt that several developers choose foreign architects only for their large projects. Anil Sharma of Amrapali group said, “It is affordable to hire an international firm to master planning if there is a big volume of work. Time is never an issue with them. They keep their words”.
Meanwhile, there are some people in realty sector who feel that foreign firms will continue to win projects here, but they will be hired for a limited purpose. They would design the master plans of the projects, while the execution part would continue to be taken care by the Indian firms.

Suncity Projects To Invest Rs 2000 Crore

Realty player Suncity Projects today announced its plans to develop four retail cities in the country with an investment of around Rs 2,000 crore by 2011.The retail cities, under the brand name ‘Jewel of India’ would come up at Greater Noida, Indore, Jaipur and Mohali.

The first of these cities would become operational in Jaipur by 2011 and would be spread over an area of 40 lakh square feet. It would house premium retail brands like Lifestyle, Shoppers’ Stop, Pantaloon and Westside among many others.

Beside retail area, these cities would also house hotels, office places and entertainment zones.

Suncity Projects VP (Retail) Vijay Arora told, “This is one of the most ambitious projects in the retail space. ‘Jewel of India’ will house some of the most prominent brands of the country along with local handicraft of the region and will redefine the entertainment criteria for the customer”.

Further he added, The Jaipur retail city would house Johari Bazaar showcasing traditional Rajasthani jewelry, a five star hotel, business suites, food courts, six-screen multiplexes, besides other entertainment segments.

Wipro Managed Ten Year Project From Lodha Group

Wipro Infotech has managed to get a ten year project worth Rs. 1.3 billion from Lodha Group. Wipro will provide IT and business transformation services to Lodha group in India and Middle East. Wipro InfoTech is a leading IT company in India. Lodha group has started a new path to get a premier position in the dynamic real estate market.
Lodha Group is a leading real estate project in Mumbai. It has a land bank of 6000 acres. The group is developing multiple projects in and around Mumbai. It is focusing on the development projects of offices, campuses, SEZ’s and townships and keen to enter in southern and western markets
The deal was announced by Lodha group director, Abhisheck Lodha. He expressed happiness on becoming technology partner with India’s leading IT service provider Company, Wipro info tech. chief executive of Wipro Infotech, Anand Sankaran expressed hope of successful completion of the project. He said that company will deliver its IT related services to make the group, a leading player, in real estate business.
The shares of wipro witnessed a fall of Rs 3.55, or 0.87% as per data shown by BSE.

Meerut-The Rising Real Estate Destination

Meerut is only 72 kilometers from New Delhi. It is an ancient city, which belongs to Uttar Pradesh state. The great history from the city is that Mandodari, wife of Ravana, belongs to this city. Meerut is stand at 28.98 north and 77.7 east, and 219 meters above from sea level. Meerut is the major education center of Uttar Pradesh and students come from all over the country for higher education. CCS University, Meerut Institute of Engineering & Technology, Meerut Institute of Technology, L.L.R.M Medical College, Subharati Medical College and Shobhit University are the famous colleges of Meerut. The real estate market of Meerut as an industries and involves in construction of shopping complexes and apartments. There are various types of industries in Meerut, because the city is near to Delhi and Noida.

If you live overseas than Meerut property dealer may you help in find your dream projects. Meerut property dealers offer you to both types of properties like commercial and residential properties. Real estate in Meerut is riding the crest of increasing demand boosted by large availability of abundant land at throw away prices. MSX Developers, Era Group, Supertech Group, Majestic Properties, DLF are in the Meerut real estate market and increase the competition.

Four Groups Fighting For Hotel Plot In Navi Mumbai

Four hotel chains have submitted bids for a plot to build a five-star hotel in Navi Mumbai, at a time when land prices have dipped in Mumbai and surrounding areas.
Indian Hotels Co. Ltd, which owns the Taj group of hotels, Sun-n-Sand Group of Hotels, Leela Palaces, Hotels and Resorts and Metropolis Hotel have submitted technical bids in the auction for the 11.6-acre land on the Palm Beach Road. The bidders, if their technical bids qualify, will have to submit financial proposals on Friday.
The City and Industrial Development Corp. of Maharashtra Ltd, or Cidco, which is conducting the auction, had set a minimum price of Rs37000 per square meter for the plot, nearly half the price at which two plots were auctioned in 2007 by the same organization in Navi Mumbai.
The slowdown has impacted the few land auctions this year. Last week, Cidco received only one bid in an auction for a plot reserved for an IT park. The land was sold at Rs1 lakh per sq. m, less than the Rs1.5 lakh quoted for a plot in the same area in 2006.
Pranay Vakil, chairman of real estate agency Knight Frank India Pvt. Ltd, said it is “not a good idea” to hold a property auction in a falling market. He added, “We are not encouraging auctions now, because the psychology is not to outbid people but to underbid”.
Vakil Said, “Auctions, as we can see, would inevitably not receive enough bids. Private negotiation for property and land sale is a much better option over auctions now”. Further he pointed out that land prices have dipped by 15-30% in Mumbai and Navi Mumbai this year. The signs of the real estate market heading for a correction in Mumbai started showing when two out of five plots went unsold in the central business district of Bandra-Kurla Complex in an auction in March.
Cidco managing director G.S. Gill said, “We are not private developers or landowners who are waiting for the market to go up. We continue to develop and sell land”.


Slow Down In Lucknow Realty

A number of Lucknow-based small builders are facing crunch due to the rise in inflation and increase in the interest rate by banks.

After the real estate boom the city witnessed, a number of such builders joined the bandwagon. Moreover, they invested heavily in the projects.

However, due to the recent downturn, they are forced to sell of their projects at lower costs. Many of them have shelved their future projects also.

“The current slowdown in the realty sector, coupled with high interest rates and increased cost of construction, has affected the industry immensely. The depreciation has been to the tune of 25-30 %,” Nagendra Pandey of Landmark Constructions told.

The recent hike in the raw material cost has added to the worry of the builders.

“The average cost of construction has increased by almost 30 %. The average cost of construction for the build up area, which used to be Rs 600- 700 per square feet, has gone up to Rs 800- 1,000 per square feet,” added Pandey.

“The city has witnessed a huge property demand in the last 2-3 years, however, for the last 6 months it’s experiencing a downfall,” he said.

“The raw material cost has seen an unexpected increase. Steel prices have gone from Rs 3,000 per quintal to Rs. 5,000 per quintal. Similarly, mortar, which cost Rs 18 per square feet, is now costing Rs 35 per square feet,” Pandey said.

There are around 500 small builders in the city. These include those builders also who build small one-room flats and shops.

“The cost has gone up by approximately 30 %. We cannot cut on the selling price and hence the customers are also shunning away from us. This is a situation of crunch,” said Tirath Housing Director Rahul Agarwal.

It is to be noted that the cost of land has also doubled in the city in the last couple of years. Moreover, owing to unprecedented demand for newly-constructed residential properties, property values in Lucknow sub-urban areas have shot up by 20-30 per cent in the last one year.

The cost of land in a locality like Gomti Nagar has gone up to Rs 1,500 per square foot from Rs 600-700 per square foot.

The other favourite spots in the city include Mahanagar, Jankipuram and Aliganj. |The national players like Ansal API, Parsvnath, Omaxe etc, which have significant presence in Lucknow, are also experiencing similar adversity.

“Big players plan their projects taking into account future prices and the cost of production. They have also been affected but not as badly as smaller builders,” said a property dealer.

“The fact is that the business is not going great although the top players are not affected much because they have entirely different category to serve and also have diversified products,” An associate broker for some top real estate players said.

“All products are moving at an average level and nothing drastically has happened as far as our company is concerned. Inflation cannot be ignored and we have to cope with it no matter what,” Ansal API Executive Director (Operations) Ramesh Yadava said.

However, recent inflationary trend has dampened the spirits of both the builders and customers. So much so, that the customers have put on hold their plans for booking of the flats affecting the builders further.

Stagnation In Chadigarh Real Estate

Chandigarh real estate is witnessing testing times. On one hand, there are more investments pouring in the segment and on the other side property buyers and sellers are not very enthusiastic about property transactions.

The overall, economic recession has caused stagnation in the country’s real estate segment. Chandigarh’s property segment, too, is witnessing a similar trend. Property brokers in Chandigarh say that real estate values have stagnated. Property prices for plots in suburban areas like Baltana and Kharar have stooped down to as much as Rs 100 – 200 per sq yard. This is almost 20% decline in prices when compared to corresponding quarter last year.

Property sellers in Chandigarh see this as a temporary phase and are holding on to their land assets. They hope that real estate prices will increase in next six months and this is when they will make profits. Property buyers, however, say that Chandigarh Property Prices are nominal still. They have few choices as there are not many sellers in the markets as of now.

Recent developments in Chandigarh’s property segment are worth noticing. Delhi-based developer Parsvnath has bought 38% stake in Sabeer Bhatia’s Nano City Project. Nano City is a commercial and residential project in Chandigarh and will be completed by 2010. Market sources say that Bhatia is already scouting IT clients to open offices in his Nano City. This will bring more employment, and thus many more property users and home seekers to Chandigarh.

For now, one will have to wait and watch. Property market is expected to be buoyant in some months. This may be a breather for investors who have put their money in properties at Chandigarh.

Leading Real Estate Player Interested In Hospitality sector

Suffering from low margins, Indian developers are entering fresh businesses like retail and hotel to expand revenue stream and offset slowing demand for real estate projects due to six year high lending rates and severe financing norm. Below are a few recent investments in the hospitality sector
Yatra Capital, a Jersey-based private equity firm, will invest more than four million euros in an forthcoming Taj hotel in Calcutta. Yatra Capital will acquire a 40 % stake in Jalan Intercontinental Hotels Private Limited, the company which is building the two hundred room property. The hotel will be managed by Indian Hotels Limited under the Taj Gateway brand.
Warburg Pincus-Casino Group: The Kochi-based Casino Group of Hotels (CGH) is in the market to raise capital. According to the media report, private equity fund Warburg Pincus is in talks with the company to invest upto three hundred twenty five crore rupees. CGH is a foremost hospitality group in Kerala, and is wholly owned by the the Dominic family. The report adds that they may divest upto 20 %, which would value the enterprise at around one thousand six hundred crore rupees. The company requires funds for its domestic as well as abroad expansion.
Rakindo Developers has raised four thousand crore rupees from Lotus Investment fund to develop hotel properties across India under the brand name Millennium and Copthorne Hotels. It has initiated construction in Hyderabad and Bangalore, and plans to set up hotels in Vizag, Kochi and other south Indian cities.
Delhi’s DLF and Parsvnath have also planned 75 and 100 hotels, respectively. DLF is teaming up with Hilton Hotels and Parsvanth with Royal Orchid Hotel.
Sahil Group, Pune-based property developer has coupled up Carlson Hotels Worldwide-Asia Pacific for a project under the Radisson Resort and Spa brand at Alibaug and Pune
Nirmal Lifestyle has formed a JV with Accor Hotel for development in Mumbai and Goa.

Goa To Appoint NRIs

Goa is set to become the first state in India to appoint non-resident Indians (NRIs) to various boards and corporations. Eduardo Faleiro, former minister of state for external affairs and currently Goa’s commissioner for NRI affairs, told, “Putting Goan expatriates on state boards and corporation is one of our various steps to reconnect them with their roots. When this happens, Goa will be the first Indian state to accord this honour to expatriates”.
Faleiro, who is here to attend the annual Global Goans Convention, said the state government was wooing back expatriates with a variety of schemes.
Faleiro said, “In view of their often-heard complaints about property disputes, we are amending the tenancy Act next month for a summary trial of property-related cases filed by NRIs. These people cannot stay in India for a long time to fight such cases”.
He said about 500,000 people of Goan origin live abroad. Further he said, “Almost one third of Goa’s total population of 1.4 million lives abroad. The Global Gaons Convention is our effort to reconnect with our expatriate community scattered all over the world”.

Faleiro said that Goa was also the first state to have started a scheme to issue ‘Goa Cards’ to NRIs to give them unhindered access to government departments. He said, “We will also be the first state in India to put NRI representatives from countries with a large Goan expatriate population on a high-powered committee to address their grievances. This committee, headed by me, will have high-ranking state officials, including district collectors”.
To expedite NRI investment proposals, he said that the Goan government has appointed a nodal officer in the industry department.
“To reconnect second and third generation Goans abroad with their roots, the state government has launched a programme called `Know Goa’.
“Under this programme, we will invite 15 youngsters (in the age group of 18 to 26) who have distinguished themselves academically or professionally, to visit Goa for 15 days as guests of the state. We will pay all their expenses,” the former Indian minister said.
Faleiro said that the state government has also initiated a study to monitor migration from Goa. Further he said, “As part of this study, we will visit people in their homes to know how many of their family members live abroad and how much money they send back home. We have also asked the Reserve bank of India to help us know how much remittances are coming into the state”.

Real Estate Boom In Bhiwadi

Touted as a entrance to Rajasthan, Bhiwadi, falling in Alwar district and bordering Haryana is a key industrial growth centre in the NCR with over 2500 operational industries. Bhiwadi enjoys huge location advantage with IGI Airport, New Delhi, just fifty five kilo meter away and Gurgaon forty kilo meter away. Being close to Delhi and well connected by NH-8, Bhiwadi is attracting industrialists not only from the capital but also from Punjab and other parts of India.
Manesar, lying between Gurgoan and Bhiwadi, is another key industrial town with IT parks and proposed SEZ. As the prices in Gurgaon are already high, service class people are left with no choice but to go to Dharuhera, Manesar or Bhiwadi. Several private firms such as Ashiana, Parsvnath, Omaxe, Piyush group etc are developing integrated townships and group housing projects along the Alwar-Bhiwadi Road, the nearest and most reasonable destination.Today the real estate developers are quite upbeat about the brand Bhiwadi. Says Vijay Mohan, Marketing Manager of Ashiana Group, “In 1992 when we launched our group housing scheme, we had to sell Bhiwadi first and then our product but today, from the marketing point of view, it is much easier for us to sell because Bhiwadi is gaining fame and we are established as a brand in this locality. In 1992, people who had purchased flats from us for Rs 800/sq.ft. are today reselling them for Rs 2600/sq.ft. The three BHK villas that sold for fifteen lakhs rupees in 2003 today the same villas cost around sixty to seventy lakhs rupees.”
Explaining the reason for sudden real estate development in Bhiwadi,CEO of Infocus India, says, “Government’s plan to develop Mumbai-Delhi industrial corridor (Bhiwadi will fall under phase I) and the entry of several new multi-national companies in and around Bhiwadi have acted as catalysts.” He added, “In 2005, with the development of Gurgaon, Bhiwadi started gaining visibility. But the land, which used to cost twenty lakhs rupees per acre then, has jumped to one crore rupees per acre in 2007. In a year or two, it is sure to double.”