Monthly Archives: February 2008
Singapore Realty Developer plans to tap Indian Market.
Jewel Of India Taking Shape.
Suncity Projects, a New Delhi-based real estate company, is branding its upcoming mega malls (typically a million sq ft plus area) as Jewel of India. The company, promoted by media baron Subhash Chandra’s younger sibling Lakshmi Goel, has identified Jaipur, Mohali, Chandigarh, Greater Noida, Indore and Bareilly as focus cities for its new mall brand. The company disclosed that more than Rs 15,000-crore will be invested over the next two-five years to develop these properties.
Mr. Ankit Goel, Projects director, Suncity, told, “Through this initiative, we plan to create a niche brand identity for Suncity malls.” With over 400 new malls slated to open in the next two-three years, differentiation is becoming the key, not just to attract shoppers but tenants too.
Apart from size, another unique feature of Jewel of India would be exclusive space for ethnic products, much on the lines of government-run Delhi Haat. Mr Goel added “It will provide a traditional flavor to the malls. We strongly believe that these products symbolize the true essence and culture of our society”. However, Mr Goel denied that they have similar plans for their existing, smaller Suncity malls.
Currently, the company has three shopping malls — Cross River, North Square & Vasant Sqaure — in Delhi, which are all spread over less than a million sq ft. Suncity Projects, a consortium of the Essel Group, Action Group and Odeon Builders, intends to tap the capital markets though an initial public offering in the second half of 2009.
DE Shaw to invest $250 million in HDIL Group Company.
Dubai Properties displayed at Mumbai Extravaganza aiming Indian Investor
Mohamed Binbrek, CEO, Dubai Properties, said, “Mumbai Extravaganza gave us an opportunity to present investors with instant information on the latest developments from Dubai Properties, as well as introduce our latest project launches to a new market. Indian nationals are amongst the top investors within the booming real estate market in Dubai”.
In 2007, Indian Nationals spent Dh4 billion on real estate in Dubai and over the past 10 years, they have spent a total of Dh6.5 Billion on the Dubai property sector. While the greater part of these buyers were Indians living within the UAE, 10% of them were living in India or otherwise, proving the existence of a substantial demand for Dubai real estate from outside the UAE.
Indiabulls Real Estate buys entire stakes in UK unit.
Dev, which listed on London’s junior stock exchange in 2007, is promoted by the Indian property developer and holds stakes in several of Indiabulls projects in India.
Indiabulls Real Estate will issue their own shares to Dev’s investors, which include Farallon Capital, Fidelity, Govt of Singapore and Citigroup.Dev shares closed on Wednesday at 75.50 pence, valuing the firm at around 120 million pounds sterling.Several Indian developers, keen to expand in a booming urban real estate market, have raised funds from London’s AIM exchange in the past two years. These include Mumbai-based developers such as the Rahejas and Hiranandani group.
Budget wishlist permits REIT companies to list on stock exchange.
New Delhi: Real estate companies are feeling the need to pitch in as competing investment avenues. As a result, the tax structure for Real Estate Investment Trusts (REITs) could be similar to that of equity-based mutual funds which are registered under the Indian Trust Act, 1882.
REIT has to operate as a trust that owns and operates income-generating real estate assets such as shopping centres, hotels and offices.
This will allow small investors to participate in real estate and generate income for shareholders through lease rentals and property appreciation, which is a global practice.
Further, these trusts would be permitted to deduct dividends paid to shareholders from their corporate taxable income.
REITs are expected to be exempt from tax keeping the stockholders paying dividend distribution tax.
REITs would be a huge success in India with the market comprising listed Indian real estate companies estimated to touch the Five billion dollar mark in the next 4 to 5 years, REITs offer a tremendous opportunity.
Property Boom Continues In India.
Market experts are visualising a high growth in Indian real estate value. It is expected to rise from US $12 billion to $90 billion by the year 2015.
Martin Bowen, Sales Director, Profile Europe (UK) Ltd, expressed his views, “The residential property market is experiencing exponential growth right across India, but especially in urban areas and those close to the government’s new specialized industrial zones”. Further he added, “Recent figures cited by the Bank of Baroda’s Chief Economist show properties have appreciated by as much as 60% to 100% over the last 12 months in most towns.” Bowen further expressed his views and said that there is a loss of some 20 million units. The main reason behind this is, about 55% of Indian population being under the age of 25 and the fact that the economy is booming. Other reason behind it is growing middle class who is looking for quality accommodation due to growing disposable incomes. Further he added that the growth in mortgage market and declining interest rates which have made property more affordable despite actual property price increases.
Realty CO Eldeco Eyes $250 mn PE Investment.
Delhi-based tier II realty player Eldeco Group is in discussions with AIG and Merrill Lynch for raising $200-250 million from a clutch of private equity (PE) investors. As part of the plan, Eldeco has already raised some funds from Xander PE. Sources said group company Eldeco Infrastructure & Properties (EIPL) was in the market for raising funds at the entity and special purpose vehicle (SPV) level for upcoming projects in Ludhiana and Jalandhar, in Punjab, and in two cities in Maharashtra. The company is also looking at raising funds through four SPVs and may be at the holding entity level as well. Mr. NK Ahuja, CFO, Eldeco, said,“We look at raising funds from time to time, but there is no need for us to comment on it”. The company denied it was holding talks with the PE firms, and that it has raised funds from Xander. The move comes after the group’s earlier plans to merge the listed entity Eldeco Housing & Industries (EHIL) with EIPL and raise funds from the capital market was abandoned, sources said. Lucknow-based EHIL is a smaller group company compared to the privately-held EIPL, which has notched up 80%, annualized growth since being incorporated in 2000. EIPL claims that it has developments worth over Rs 3,500 crore across segments. The development comes even as some analysts predicted that PE cash flow into the realty sector in some key markets could be tightening on account of oversupply concerns as well as a slowdown in off take. This includes markets like NCR, Bangalore, Chennai and Hyderabad where there is a growing concern, especially on the commercial space off take, industry observers said. However, there’s a contrary view that more PE funds are being committed to Asian markets, with the outlay for the first time bigger than what is in the pipeline for Europe in 2008. This could see fund action remaining robust in markets like India. Further, developers, which are seeking funds for developments in smaller cities, could be relatively better placed as tier II markets are expected to open up in a significant way for the realty boom.
India to have first green hotel in Hyderabad.
NEW DELHI: For the new-age green consumer and those who believe in sustainable tourism here is a good news. After eco-friendly hotels, India will have it’s first green hotel — The Park Hotel in Hyderabad. The investment in this 280-room hotel, scheduled to start operations by mid-2009, will be around Rs 350 crore, 15% higher than a regular hotel. And it might not be a good idea for smokers to book a room in the hotel as 90% of it’s area will be non-smoking.
Another Park Hotel property lined up in Pune, for which the group recently acquired 90,000 sq ft, will also be built on the lines of green buildings. “For the Hyderabad property, we will be seeking US Green Building Council’s (USGBC) certification. We will be targeting at least LEED (Leadership in Energy and Environment Design) gold rating for this hotel.
However, for the Pune project we will be only going for a LEED certificate and not gold or a platinum rating,” says Deepak Bali, V-P, projects, The Park. There will be designated smoking lounges in the property and more than 90% of the property space will be non-smoking.
There are around nine eco-friendly hotels in the country with ECOTEL certification such as Lotus Suites in Mumbai and Uppal’s Orchid in New Delhi. An eco-friendly hotel is constructed using recycled materials, whereas a green building aims at saving energy. “Though the initial cost of construction is almost 15% higher for a green hotel, we will be able to recover that through efficiency in operations. A green hotel saves 34.7% of the energy costs,” added Bali.
India has 17 green buildings and around 170 are registered with Indian Green Building Council (IGBC), awaiting LEED certification Though an exact fix is not available, globally there are very few certified green hotels such as San Francisco-based Orchard Garden Hotel. But according to IGBC’s estimates, there will be at least 100 green hotels worldwide in the next two years.
ING Unit Launches Asian Real Estate Fund In Hong Kong
HONG KONG ING Group NV’s asset management unit Monday launched a fresh Asia real estate fund in Hong Kong that invests in listed real estate securities across the region.
Most of the portfolio will be invested in real estate companies and real estate investment trusts, ING said. The fund is at first being offered only to retail investors in Hong Kong, but ING is looking into offering it in other regional markets.
Portfolio manager Justin Pica said the sector is poised to gain from continued solid economic growth in Asia. He said Asian real estate markets are less mature and therefore have greater possibility to grow.
The market capitalizations of Singapore- and Hong Kong-listed real estate companies are expected to increase by 61 percent and 46 percent, correspondingly, through 2013. Furthermore, real estate has a low correlation to equities and bonds, Pica said.
ING Investment Management currently manages more than US$2 billion in real estate portfolios in Asia.
Realty seeks tax, input price relief.
Vipin Agarwal executive director of Omaxe Ltd states that they want tax breaks on infrastructure, which were there till last year. Infrastructure improvement is important for the improvement of the country. So they should get some encouragement in the form of tax breaks to invest in it.
Realty firms are also bothered about the towering prices of construction materials in India. Abhinandan Chatterjee, president and chief financial officer of BPTP Ltd told that the rocketing prices of steel and cement are affecting construction cost, the government should try to rationalize prices of construction materials so that the costs of developed properties remain under control and the benefit is passed on to the buyer.
Real estate firms want all incomes from rent to be exempted from income and service taxes.
“Service tax should be abolished as it is an unnecessary burden for us,” said Ashish Gupta of Aerens Goldsouk International Ltd. Developers also want a cut in lending rates in construction and housing finance. “I think interest rates on loans should be lowered substantially to make purchasing properties easier,” said Chatterjee. “The demand is low at the moment because of high interest rates,” he added.
However, interest rates are an outside-the-budget decision to be taken by banks.
Noida’s Got A New Hot Spot “Sector 119?
Sector 119 is now becoming center of attraction. Builders as well as People are also getting attracted toward this because all the major facilities are available near by sector 119. Oil Industry Development Board Office Complex is coming close by it. Various Builder groups are coming here with their projects.
A new high-rise residential project Aamantran is launched by Eldeco Infrastructure and properties limited. It is expected to be completed by 2011. Its location is strategic. It is on the vantage point of Greater Noida Road and Faridabad-Noida-Ghaziabad (150m wide) Corridor and it is easily approachable from NH 24. Golf course is only about 10-15 minutes away. The nearest Metro station is at Sector 32, just a 10 minute ride. It is likely to be completed before the scheduled time i.e. April 2008. Sector 18 market is just at 20 minute drive.
A Hugely successful and renowned infrastructure giant, IVRCL Infrastructures & Projects Ltd, has an urban development arm, that is, IVR Prime Urban Developers Ltd. They have launched their project, Scarlet, with a host of facilities.
Gaur Grandeur has also entered into Sector 119 with its home plans and with a long list of facilities. It is hardly 7 km away from proposed Metro Station at Sector 32.
Amrapali Group has presented the biggest residential project, Amrapali Platinum. It also has good connectivity. Metro-station and Fortis Hospital are about 5-7 minutes drive. Faridabad-Noida-Ghaziabad express highway is about 2-3 minutes drive. It takes 10-15 minutes to drive from Atta Market, sector 18.
So, now people have lots of choice and they can choose home of their preference according to their budget. They can compare the facilities provided by different projects and then can finalize the home of their dreams.
BJP will Advise The Government For Real Estate Regulatory Authority
NEW DELHI: The BJP will represent to Prime Minister Manmohan Singh, now the need for setting up the Real Estate Regulatory Authority, in order to prevent fly-by-night builders from cheating innocent people, who put in their lifetime earnings into their dream house project.
The Real Estate Regulatory Authority should be on lines of TRAI, SEBI and IRDA. Senior BJP leader Murli Manohar Joshi will lead the delegation of BJP investors cell that has collected 10 lakh signatures on the memorandum to be submitted to Prime Minister Manmohan Singh on Monday, on issues affecting small investors.
The BJP wants its demands to be reflected in the Union Budget to be presented on February 29. Murli Manohar Joshi said, “We appeal to the Government to protect the small investor, who is the backbone of the Indian economy.” Joshi said that the money of the small investors is not secure and they are not immune to the ups and downs of the market.
Among the other demands of the BJP restoring 80 (L) in the Income-Tax Act, in order to make savings more attractive to the people. Joshi said farmers, students, housewives and senior citizens, who are not income-tax assessees, should be exempted from the requirement of producing PAN Card for starting the Demat account.
National Security Adviser M K Narayanan had said at the 43rd Conference on Security Policy at Munich, “Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported.
Besides, he wanted housing projects to spread to small towns and cities, in order to reduce pressure on land in metros. With metros spreading, there is mounting pressure on the agricultural land, which could hot food security. The bank loans for housing, also was on the higher side, which is hidden even by the banks.
Finding Manhattan on india’s real estate map.
The miraculous journey unfolds in a new housing development in Bangalore’s Electronic City named “Concorde Manhattans”, which sits on prime real estate across from a Wipro Technologies campus. While location is the major draw, developer Concorde Group is also betting that its American naming scheme will help attract Wipro’s globe trotting employees.
Mr. Alok Mishra, The marketing manager of company, said,“Manhattans is a brand associated with grandeur”.
Turns out naming each street and section of the gated community also was an exercise in workplace bonding. Mr. Gangadhar Gowda, company’s human resource executive, said, “We searched the Net, and everybody gave one name”.
Buyers are booking new suburban luxury flats before ground-breaking, so developers must build up several projects and have to generate names by the dozen.
Gurgaon is filled with such aspirational places. In DLF City, Phase V, residential developments such as Wellington Estate, Princeton Estate and Carleton Estate overlook a landscape that is still defined mostly by construction and open dirt fields. A handful of security guards sit at the entrance to Princeton Estate, keeping track of everyone that comes in and out. Manicured shrubs and short, pruned trees line the paved roads that lead to each of the 20-storey peach-coloured towers that, again, have their own security guards.
NH-24 Emerges As Cradle Of Housing Investment.
The National Highway-24 has emerged as the cradle of investment for housing properties due to the surge in prices of residential real estate across key UP cities – Noida, Greater Noida and Ghaziabad. In recent years, NH-24 has risen as a prime alternative for those seeking affordable homes. NH-24 has seen the establishment of settlements like Crossings Republik, Indirapuram, Ansals API Aquapolis, and Hi-Tech city.
Mr. Sanjeev Srivastava, chief executing officer (CEO), Crossings Infrastructure, says: “NH-24 absorbs the influence of Delhi and the neighbouring ‘hot township’ of Indirapuram. We landed here after realizing a logical growth potential in the area. The highway has a number of colleges. If the highway is being widened, it offers a lot of scope for inhabitants and residents of these future townships”. These townships promoted by single firms or consortium of builders say that they are offering premium facilities within reasonable range.
New Real Estate Opportunities include Hospitals, Logistics Warehousing and Airport.
The traditional real estate areas are residential, commercial, retail and integrated townships. But the future trend will not be the same. Future real estate area will include medicities, hospitals, logistics and warehousing, airport or port based business districts, mass housing and slum rehabilitation, and education infrastructure.
The healthcare sector is growing at an yearly growth rate of 16% and is projected to touch a turnover of $50.2 billion by 2011. It is expected that an investment of $77.9 billion will have to be made in order to achieve the best possible target of 1.85 beds per thousand population. Out of this $77.9, $69.7 billion is expected to come from the private sector.
Medical tourism is projected to grow into a $1.5 billion industry by 2010. Over the last five years, the number of patients visiting India for treatment has risen from 10,000 to about 1,50,000
The concept of health cities has already started in the country. The Apollo group has developed the Apollo Held City in Hyderabad, which has a 300 bed much the specialty hospital and the total built-up area of 2 lakh sq ft. Other corporate as Aditya Birla group and Reliance (ADAG) have shown interest in developing cities. Several foreign groups such as Harvard Medical International and Cleveland Clinic have also entered the country for the same.
Landlords Build Riches On EMIs.
Loans to get cheaper as SBI cuts rate again.
SBI has decided to cut the home loan repayment rate. After going up for months, EMIs are set to come down. This follows a decision by four public sector banks, led by SBI, to cut their prime lending rates further by 0.25% to 0.50%. SBI’s new PLR will be 12.25%, effective from February 27. Canara Bank, Bank of India and Union Bank have all cut their PLRs to 12.75%.
India’s Prime Real Estate Plans $500 Million Fund.
Predicted Features Of The Budget.
The key feature of this budget is that this is the last budget to be presented by the present government before it faces the general elections next year. For that reason, it will be targeted at getting votes. This means that it could well be a populist budget with pay-off for voters in terms of lesser taxes. Another possibility is that tax rates are left unchanged for corporate, but there are a host of announcements on increased outlays to social sectors like education and health.
The major challenges that this budget also needs to address certain areas:-
(b) The reduced speed in the GDP, mainly in the manufacturing sector.
(c) A much tougher global environment and its impact on growth through the external sector in the months ahead
(d) A rising subsidy burden, which does not fully reflect in the fiscal deficit.
As a result, on balance, the entire broking house’s expects that the key features of this budget will be as given below:
1. Reduction in direct tax rates for individuals but not for corporate Some reduction or elimination of dividend distribution tax.
2. Rationalization of excise duties, including the auto sector.
3. Rationalization of exemptions for corporate.
4. Lower customs duties for commodities to contain inflation and rationalization of inconsistencies.
5. Enhanced credit availability for the agriculture sector.
6. A sharp increase in the outlays for social sectors like health and education
So it can be expected that the sectors to be positively impacted by the budget are auto, capital goods, cement, construction, FMCG, logistics, oil and gas, metals, fertilizers and pharmaceuticals. However, it expect largely neutral for the sectors like media, telecom, information technology and the real estate.
Ahmedabad New Center of Real Estate Boom.
A. Mukhopadhyay, an NRI is looking to purchase a house in Ahmedabad. Mukhopadhyay has his roots in Kolkata but he is not paying attention on investing in property there.
According to him buying a property in Kolkata will not give return like investing in a property in Ahmedabad.
Gujrat capital Ahmedabad is moving much faster and so the cash. The land prices have more than doubled in the last couple of years, which gives details about the rush at the first ever summit of housing and real estate developers.
In the previous two years a lot of companies have opened up in the city. As a result, the demand for houses has gone up so has the price. Last year, a two-bedroom flat at a well-known location used to cost Rs 12 lakh but today it is of almost Rs 25 lakh.
Rushabh Patel, Secretary, GIHED told that the way property prices got doubled in last one year in Ahmedabad, thanks the town planning, people are buying more and more properties as these houses are bringing in not only faster return on investment but steadily,” said
A city that was earlier believed suitable for industries is now considering a real estate boom for residential purposes as well. Over the past year the property prices have shot up faster than even Delhi or Mumbai.
According to the director of Kunj Properties “they are looking for lands in remote places as customers are ready to buy there also, mostly NRIs and people coming from outside”.