Kolkata real estate take a hike after Price protect scheme

With Kolkata residential market still trying to rise from the after effects of demonetisation, developers have started applying their tricks to attract more and more customers by offering them innovative schemes.
The price protect schemes that were launched recently with the budget, in which the interested consumers would enjoy the benefit in case there will be any decrease in property rates, have helped in increasing the demands by 15% after the two months that followed the demonetisation.
Jitendra Khaitan, CMD of pioneer Property Management Ltd. Have stated that the Market is facing a positive growth and that approximately 50% hike in queries is expected along with a hike of 10-15% in actual sales. However, the price protect scheme is temporary, it will still effect the market majorly and increase the real estate market to a great extent in profit.
Khaitan also put out the word that these schemes are highly helping the market recover from the downfall after demonetisation. After the demonetization struck the nation there was almost up to 40% drop in queries and sales of homes in and around Kolkata as buyers waited for a fall in real estate prices.

Surabhi Chemicals Buys Land In Nagpur To Enter Realty

Acquiring land in Nagpur, Surabhi Chemicals has shown their plans to step into the realty sector. The group plans to develop a commercial or residential project in this land.

Surabhi Chemicals has acquired some residential plot in Nagpur, where they will develop either a residential or commercial project. This will mark their entry into the real estate sector. The textile chemicals firm also has plans to expand their realty business to other cities like Surat and Vadodara. Continue reading

Hines Realty To Set Foot In India, Seeks Partners

US based Hines realty is planning to set its foot in India. The American real estate firm is seeking Indian partners for developing joint ventures.

Residential market in India is one of the most charming residential markets in the world. It has been attracting investors from across the globe. Private equity investments in the Indian residential market are fine examples. Adding to it is the plan of Hines Realty to enter India. Continue reading

Yamuna Expressway Awaits Approval Of Master Plan 2031

Seeking approval from the state government, Yamuna Expressway Authority has dispatched a revised draft of Master Plan 2031 for the development of the first phase.
More residential development is likely to come on the Yamuna Expressway corridor.

More residential development is likely to come on the Yamuna Expressway corridor.

Yamuna Expressway Authority has dispatched a revised draft of Master Plan 2031 to the state government with some alterations. The altered draft omits plans to build Jewar Airport and the Yamuna Expressway Authority will reserve the set- aside- land for the airport.

Earlier 10,000 hectares of agricultural land was kept apart for the airport construction. Once the plan gets approval, the revisions will be implemented in the sub-regional plan of Uttar Pradesh.

During its last month’s board meeting, Yamuna Expressway Authority had declared that it would send revised master plan to the state government for approval.  However the move is believed to follow the State’s CM Akhilesh Yadav’s decision to construct the proposed airport somewhere nearby Agra or its neighborhood. Continue reading

Disney India Launch ‘Theme Home’, Walt Disney Plans To Globalize

USA’s Walt Disney Company plans to follow ‘theme home’ business initiated by Disney India, its Indian Subsidiary. Disney India plans to bring in ‘theme home’ concept to Indian market while Walt Disney Company aims make ‘theme home’ popular in the global market.
Disney India comes up with theme home business.

Disney India comes up with theme home business.

Disney India will lend its popular characters like Mickey Mouse and Goofy to the builders under their new ‘theme home’ concept. Under this new scheme of Disney India, the Indian Builders will be able to use the prime characters to promote their real estate projects.

This ‘theme home’ business is believed to be taken up worldwide level as Disney India’s mother firm Walt Disney plans to follow its Indian Subsidiary firm. The reports predict that the designers and builders across the world will be utilizing the prime Disney – characters to promote their projects. Continue reading

Increased Residential Real Estate Causes Power Shortage

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Real estate space construction acquired an unprecedented rate of growth. Urbanization in the developing India accelerated the growth. Government’s reform agenda assures that it will continue to grow in the near future too. Besides the real estate growth, the infrastructure development too takes place. This is going to be alarming in the coming days. Continue reading

Festive Season Fills New Hope in Residential Real Estate

Enlightening Festive Season

Enlightening Festive Season

Confederation of Real Estate Developers Association of India – CREDAI expressed their hope of 20 percent improvement in the housing sales. This improvement will be mainly in the major cities of India. Smaller cities always remained unaffected by the interest rates. Continue reading

Real Estate Fails to Tackle Surging Housing Units Demand

Surging Housing Shortage of India.

Surging Housing Shortage of India.

Continued population boom in India leads to a situation where residential units or space remains insufficient for the people. According to Cushman and Wakefield all major cities of India are in high need of around 2.1 million new housing units to meet the increased demand. Real estate sector has to come up with new residential projects to solve out this great menace. Real estate has to play a vital role. Continue reading

Affordable Housing Policy to be implemented by the State Government from 15th April.

From April 15, the state government’s affordable housing policy is set to be implemented. With a preliminary notification already out, the policy will be implemented after the final notification in a month’s time.

This decision took place at a recent meeting between Additional Chief Secretary (Urban Development Department) TC Benjamin and representatives of Confederation of Real Estate Developers’ Associations of India (CREDAI) from Pune, Nagpur, Kolhapur, Nashik and Aurangabad.

The government in the notification has made it mandatory for all projects on more than 2,000 sq m land to reserve 20 per cent of the land or constructed space for small-sized housing.

Benjamin said that, “The state has a dearth of such housing and this initiative will help bring about more such houses in residential projects. It will have to be implemented by the builders after April.”

Builders expressed reservations about whether the 20 per cent of the land should be reserved in the same area. However, it was decided that they could have a little farther but in the same zone. To this Benjamin added that, “They have to provide the housing with almost the same kind of infrastructure.”

However, most of the builders had reservations about having the economical housing on the same campus but agreed to have it a little farther away from their projects.

Pune CREDAI representative Satish Magar, who attended the meeting, said, “We are open to the policy but had some issues, which we discussed.”

Best Features of Noida Extension

CORNER LOT FOR SALE:  SAGAMI-OTSUKA
After the locations called Raj Nagar Extension, Mayur Vihar Extension, now its Noida’s turn to stretch itself and the name given to this stretch is Noida Extension.

There are large numbers of upcoming projects here located adjacent to Noida’s Sector 121. These face the Noida-Greater Noida Link Road. It is expected that within next three months, this stretch will become operational.

Some of the major features of Noida Extension are:

Prime Location: Noida Extension actually belongs to Greater Noida sector 1. It is a part of NCR and is close to Noida sec. 121 and sec. 119.

Connectivity: One of the best features of Noida Extension is its connectivity across the complete NCR. And the upcoming metro line is acting as cherry on the cake.

Infrastructure: The Noida-Greater Noida Link Road which is 130m wide passes through the area. Also, NH 24 is just 60m away.

Long Term Investment: The area will pick its pace in around a year or two. But once it is full fledged, it won’t lack returns. Thus, it’s a long term investment opportunity.

Options for all: The developers are coming up with all kind of residential projects, office spaces and commercial projects. Thus, Noida Extension will have goodies for everyone.

Affordable Housing: The projects brought up by the developers provide a large range of residential opportunities whose prices will fall in the range of Rs. 9 lakh to Rs. 40 lakhs.

Provogue India Announces Aurangabad Project

Textiles de Otavalo. Ecuador
Photo by Adalbertop
One of the leading apparels brand in India Provogue India announced to enter Real Estate on Friday. Provogue India with it’s joint venture Prozone enterprises has planned to build 300,000 sq. feet of Real estate property in Aurangabad. The project is stated to go on floor in October 2010.

The Managing Director Mr. Nikhil Chaturvedi said that the mega project will be a mix of residential projects and malls.

Also they are planning to launch three residential projects in Coimbatore, Nagpur and Indore by the end of this year.

Provogue also plans to construct 75 stores across the country in financial year 2011 with an investment of 35 cr.

Similarily Century textiles, Alok Industries and Bombay Dying are some other firms planning to develop or sell Real Estate as land rates rise in the buoyant economy.

BOP launches Real Estate Boutiques

The new Metro City for the price of an ordinary car, £3,250.
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A very ambitious and unique project has been announced by a Better Option Propmart(BOP) a Delhi based Real Estate Management and Advisory firm. They are set to launch 15 Real Estate ‘boutique’ across the Northern India.

These will be first of its kind boutiques and will be known as ‘BOP Studio’. The idea is based on the model of any walk-in-store for property consultancy and purchase. It will have sit –in-consultants who will provide detailed and free counseling to every customer. The ambience will be of any high class store and will have the database of various projects in North India.

The Managing Director of the company, Mr. Amit Mavi said on the occasion, “You could walk-in, avail yourself of our free real estate consultancy and still not buy any property being showcased. Our aim is to bring the ‘consumer durable shopping experience’ to real estate buyers. We expect people to perceive BOP as a real estate advisory service provider rather than a mere property seller.”

The initial investment in the project is said to be huge that of at least 60 lacs per studio on the infrastructure alone. The firm plans to open 2,000 square feet street outlets at most of the hot spot destinations for Real Estate like Agra, Amritsar, Chandigarh, Jaipur, Lucknow, Kanpur, Noida,  Meerut and others.

The studios will yield profit if they handle at least 10 projects every year and achieve sales of Rs. 150 cr per city. The financial engagement looks tough more so for Tier II cities as the average realization from residential projects there is lower than that in metro cities.

Will this idea become successful, only time will tell?

Amrapali Group announces “Amrapali Leisure Valley” Independent Villas in Noida Extension

Till now Noida extension was only having war between budget home providers. Adding to the current construction war in Noida Extension Amrapali group recently added new Category “Independent villas“. Today In leading newspapers through Full page ad Amarapali Group announced a Project Having Luxurious Independent Villas in Noida Extension. Name of the project is yet not announced but According to the sources it’ll be called “Amrapali Leisure Valley“.It will have around 71 Acres of open area. At its name suggests It will have many Leisure facilities like golf,cricket academy, Club, Pool facility.

For More details and Booking Visit http://amrapalileisurevalley.propertywala.com/

Joint Venture Among Tata Housing & Tata Realty

Joint venture
April 26, 2010

The two companies Tata Realty and Tata Housing belonging to Tata Sons Ltd. are competing with each other which are doing nothing but hindering Tata Sons on a whole.  Therefore, Tata Sons is asking them to avoid this competition.

Tata Housing Development Co. Ltd was established so as to develop and sell primarily residential projects whereas Tata Realty and Infrastructure Ltd was set up to function as a fund and develop infrastructure projects. They both are 100 percent subsidiaries of the group.

Some officials stated that the problem arose two years ago when Tata Realty started looking for real estate projects which directly overlap Tata Housing’s business interests.

This competition is on its peak since both of them now plan residential projects in cities such as Pune and New Delhi.

Now, Tata Realty is been told that it has two options; either develop its ongoing and future residential projects as joint ventures with Tata Housing or not pursue housing projects at all.

Mr. Brotin Banerjee, managing director and chief executive officer of Tata Housing maintained a silence when asked if the two groups had competition amongst them and said that just some overlaps were there and added that the companies shared the same chairman, R.K. Krishnakumar.

IFCI expands in real estate business

Financial institution IFCI will amplify its existence in the real estate business. After serviced apartment project in Delhi, IFCI Infrastructure Development Ltd (IIDL) will launch three similar projects in Lucknow, Guwahati and Chennai.
To woo foreign traveller, IIDL signed a contract with Singapore’s Frasers Hospitality to manage its serviced apartment property named Fraser Suites in the capital city. IIDL is planning to develop a total of two million square feet area in the three cities.
CEO and MD of IFCI Atul kumar Rai said that IIDL would shortly start developing serviced apartments at other locations. He said that the company would also like to buy lands in the auctions of governments land development authority.
IIDL has plans in hand to develop two million square feet commercial space. CEO of IIDL said that if they get other striking proposal to develop residential projects, they would undoubtedly think about them.

Consider all the factors before purchasing

There are various factors that must be discussed before purchasing property. One needs to consider factors such as economic growth outlook, interest rates, job security, demand, credit supply etc, understand the overall dynamics of the real estate sector.

Rough estimates show that out of the total 100 percent real estate market the residential segment weightage is approximately 75 percent whereas 20 percent is commercial office spaces and balance 5% comprises retail, hospitality.

The mid market residential segment (residential properties between Rs 15 – 50 lakh) represents nearly 85% of total mortgage disbursements in India. Therefore, the mid market residential segment represents nearly 64% of the market. Almost 55% of mortgage finance disbursement for residential properties happens within the top seven cities and the balance 45% is shared by the whole country.

There was a dearth of two to three bedroom properties within this range of Rs 15 – 50 lakh within the greater metropolitan areas of major cities. Easy supply of money from equity capital sources created an artificial demand of land for the development of large township projects and SEZs. Everybody started announcing huge and multiple projects but ignored the calculation, execution and delivery capability perspective involved.

Most developers started projects 10 – 20 times the total square footage of what they had delivered in the last 20 – 30 years. The various sources of institutional capital lapped up the story. However critical considerations like the nature and kind of organisation structure, management bandwidth, labour, capital equipment, machinery, project time were ignored.

The pricing of residential projects went up by 400 – 500 percent in most cities between 2006 – 2008. Interest rates also went up from an all time low of 7.00 percent, 20-year fixed mortgage to as high as 13.75 percent floating rate in 2008. This put a lot of strain on affordability.

The stock market crash and job insecurity that followed the Lehman Brothers fiasco, drove away investors and actual buyers. The credit tightening from domestic banks and marked to market losses started reflecting on credit supply to the sector and the market went dead.

Developers came stress with no cash flows from the sale of projects and rentals of commercial office spaces and retail spaces also dipped by as much as 50% and everybody started playing the waiting game and bottom fishing to get back into the market.

The most credible development companies, in the absence of retail buyers, could not find capital to complete under-construction projects. This led to delays and temporary abandoning of projects. Developers were forced to rethink strategies to get back cash flows and improve sales. This led to developers having a “Eureka” moment about affordable housing.

Luckily for the markets better sense has now prevailed and several developers are re-pricing projects downwards and repositioning them as affordable housing. The banks have also selectively started lending to developers, albeit in small amounts and with strict performance criteria. The banks have also brought down interest rates and also restructured debts. This has slowly brought buyers to the market.

The worst seems to be over for the mid-market residential real estate asset class, although the same is not yet true for commercial office spaces and retail malls. This segment essentially drives cash flows as well as the major chunk of demand. This segment is also one which gets maximum bookings from actual user market rather than the investor bookings in percentage terms. Therefore, it is the lead segment in driving real estate markets. Unfortunately, it was the most neglected segment during the bull run of 2006 – 2008.

Now that most developers have realised that this segment is bringing back buyers who were left out to due to affordability issues during the bull run, cash flows are likely to improve. There have been a few launches of affordably priced projects, which have seen a positive response from actual users.

This has led to other developers following suit and taking advantage of the positive sentiment that has emerged towards affordable/mid market residential segment. The market will see a slew of such launches in the next three months to one year, giving ample choice to actual buyers. Prices will stabilize for a while.

Affordable housing is not more affordable for builders

The  sector appears to have found its feet with focus on affordable housing and this may reflect in the June quarter results of the companies. The move has led to higher sales for many companies, but on the other hand, it has also impacted the margins negatively. The reason being that the mid-segment housing is a high volume with low margin business.

It may also be understood that only the residential market has seen a recovery, while the commercial and retail segments are still under stress.

Among all the listed companies, Orbit and Indiabulls Real Estate (IBREL) are expected to show a marginal improvement in sales. With a huge fall in property prices in the luxury segment, Orbit has shown 5% increase in sales. With a 70% YoY decline in revenue, Parsvnath is expected to see the highest fall. DLF and Unitech may follow with 60% and 54% decline, respectively. As a move to generate cash for business activities, both these companies have exited from unviable projects and also sold noncore assets. This would help in completing under-construction projects. Even some large SEZ projects have been shelved.

Many companies have launched new residential projects in affordable housing segment. Though construction costs would be low, EBIDTA margins would decline by 5-10 % average due to sharper decrease in prices. However, companies like Unitech, DLF, HDIL, and Sobha that have raised funds have improved their balance sheet positions and thus lowered their overall finance cost. Average EBIDTA margin for June’ 09 would be 39% as against 43% for March’ 09. Peninsula Land is expected to show positive margin, as the number of projects was very limited, hence leverage was also low.

Despite all the gloom, realty sector is seen to show some improvement in margins. The overall PAT margins for the June quarter will be at 26%. Though real estate sector is one of the major contributors to the over all profit growth for India Inc, yet it is low as compared to the past PAT margins of 35-40 %. However as alternate sources of funds have become available, builders have managed to improve their cash position. Loans have been restructured and thus interest liability has been reduced. Developers like Mahindra Lifespaces, IBREL and Peninsula Land are expected to report PAT margins upward of 30%.

Mumbai is the next target for DLF and Unitech

Mumbai seems to be the next destination for realty giants DLF and Unitech. Both companies are trying to restart some of their projects in Mumbai which were on hold.
Unitech, said, “We have a number of slum redevelopment projects in Mumbai. We also have a focus on affordable housing and some projects will be announced by the end of 2009.” A company official said that the focus would now be on residential projects and prices would be lower than the current market rates.