Monthly Archives: June 2010

Siva Group bought 13.9% Stake in Arihant Housing

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Chennai Properties - Real Estate India - Villa Viviana
The Siva Group owned by NRI C Sivasankaran has acquired a stake of 13.88% in Arihant Foundations and Housing which is a Chennai based firm.
On Monday, Arihant informed the Bombay Stock Exchange (BSE) that Saravna Enterprises, Siva Projects Engineering and Enterprises and S Jayalakshmi have picked up the stake. Before this deal, Siva Group held 0.32% stake.
Arihant is a leading player in the realty market. This is also evident by its net sales of Rs 158.9 cr. and net profit of Rs 2.8 cr. in the time period of September 2008 to September 2009. It also has a surplus of Rs. 138.2 cr.

A top official of Arihant said that Siva Group has bought the stake as part of their treasury operations. Although promoters have a stake of 65% in Arihant, but dilution is still not needed. The Siva Group has entered the stake market a few months ago. Recently, it bought 12% stake in Ruchi Soya Industries.

Yatra Capital to Increase Investment In India

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Panama Property = Money
Photo by thinkpanamaEuronext-listed company, Yatra Capital managed by Saffron Capital Advisors, an Indian Real Estate Private Equity fund has announced to invest around 20 million Euros in India in FY10. The company plans to invest the Rs 115 cr in two deals in the domestic sector of real estate. The company has as of now invested about Rs 916 cr in 13 projects which include 2 entity-level details.

The weighted average Yatra Equity Fund covers 27 million square feet spread over nine cities. They have sold or pre let over 3 million square feet across various projects.

The chairman and Co-Founder, Yatra Capital, Mr. Christopher Wright said, “In India, one needs to be very careful on Real Estate investments as the market is volatile. After a drop in 2008-09, the realty sector is now moving up. The Indian economy is growing well making people more confident on future investments. We have invested 44% in residential projects, which would be our focus area in future. We always look at investing in affordable residential projects in tier I and II cities.”

Yatra has invested in 90 cr Residential Project and 97 cr Market City Retail Project at Pune, 115 cr in Riverbank Holdings, 91 cr in forum IT parks and 23 cr in Taj gateway at Kolkata, 160 cr in market city at Bangalore and 57 cr at Nashik.

It has entered partnership with Phoenix Mills for 5 various projects across Bangalore, Pune and Mumbai.

A presentation by Yatra to investors in March this year said, “Most markets have seen positive traction due to price cuts. However, developers have now started raising prices especially in Mumbai and the National Capital Region which has led to a slowdown in sales. Projects where pricing is realistic continue to enjoy healthy absorptions. The monetary environment tightening may impact the fund raising environment for many real estate companies still out to raise money. Investor enthusiasm for participation in realty IPOs remains muted.”

Improve Floor Plans by using 3D Floor Plans

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Down To Earth
If you plan to develop a project now then 3D floor plans can be of great help in both saving time and money.

With the 3D floor plans, you can easily visualize and understand better which in turn will bring better and focused results. It is even useful for the buyers who then will have a proper view of your project.
Some of the benefits of 3D floor plans are:

  1. It provides the exact view of floors to both developer and buyer.
  2. It brings ease in improving the plan as per need instead of changing the whole plan and start from scratch again which is obviously both expensive and hectic.
  3. It also attracts lenders due to its proper design and colors which may lead to better sale.

IL&FS Plan To Invest In Real Estate

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IL&FS private equity is planning to increase its investment in infrastructure and Real Estate sector by the end of FY10.

They announced to increase their investment from 660 million US dollars to 1 billion US dollars in the infrastructure sector. In the realty sector they already have investments of 1.6 billion US dollars. They are planning to take deals in both the sectors as well.

Mr Shahzad Dalal, Vice Chairman of IL&FS Investment Managers Ltd said, “We will invest close to a billion dollars in infrastructure as well by about the end of this financial year.”

Bangalore Properties - Real Estate India - Vaswani Bella Vista 1
Photo by nancyarora2020In the realty sector the firm has spent 1.2 billion US dollars from the total investment on over 30 deals. It is said that they are now looking at 10 more. The left over amount is expected to be deployed by the end of this year mainly in residential space along with commercial.

The company recently bagged a deal in the real-estate segment through IL&FS Milestone Fund in HCC’s Real-Estate project ‘247 Park’ for Rs 575 cr for a 74 per cent stake.

Mr Dalal further added, “The outlook is fairly bullish on both Real Estate and infrastructure. We believe there are a lot of opportunities. There may not be many good projects, but because of our reach and reputation, we do see some really good projects.”

Indian Commercial Realty Market Achieving Stability

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Pinecrest Real Estate Market Report 2009
Real Estate Intelligence Services (REIS) which is a division of Jones Lang LaSalle Meghraj released a report which said that stability in the commercial real estate market of India is observed with the economic recovery of India.

According to the report, although in 2010, the landscape will be beneficial for tenents, but in 2011, influence of landlords will be higher. It implies that since the office rents are beginning to hit the ground, in the coming term, they should be proactively looking to lock in attractive leases.

Abhishek Kiran Gupta, the Associate Director JLLM said in the report that the Indian commercial realty market is about to attain stability with the well going economic recovery of India.

Provogue India Announces Aurangabad Project

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Textiles de Otavalo. Ecuador
Photo by AdalbertopOne 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.

DTC Revision Beneficial for Realty

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income tax
On June 15, the revised draft for the Direct Tax Code was released. This code is a try by the Indian government to simplify the laws of income tax. The government is waiting for the Parliament to pass the code and plans to adopt it from April 1, 2011.

Below is the list of some must know changes proposed in the draft code with respect to realty sector.

Short-term capital gains: As per the proposals, tax will be imposed on any gain or loss made on the sale of an asset within a year.

Long-term capital gains: The proposed laws say that after an year of purchase, the taxation policy on any gain or loss made on the sale of an asset will be implemented as per the long-term capital gains tax policy.

As per the draft code, from April 1, 2011, April 1, 1981 will not be considered for calculating the discount rate; rather April 1, 2000 will be considered for the same.

Rental Income Taxation Policy: The draft code has proposed that the gross rent should be calculated on the actual rent receivable or received for the financial year.

Home loan Interest Rates: The draft DTC intends to keep on deducing tax on the interest paid on home loans up to Rs 1.5 lakh for construction or purchase of residential property.

Self Occupied House Property: Any self occupied house property (property not been let out) will be allowed for deduction on account of interest to the tune of Rs 1.5 lakh.

This revised draft code of the DTC has come up as a boom for the home buyers and home owners. The revision seems to be beneficial for all, be it is investors or developers.

Rivali Park in Mumbai by CCP

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On Wednesday, the Cable Corporation of India made announcement that it has planned to enter into the real estate and will spend an amount of Rs. 1000 cr. in its first project. CCI Projects Private Ltd (CCP) is an associate company of CCI in which CCI holds 15% stake. CCI will be developing the project through CCP.

The project is entitled as Rivali Park. It is a project spread over an area of 22 acres located at Borivali, Mumbai. The project can be considered as a mixed-use development with various commercial, retail, entertainment, hospitality, and cultural elements.

The project will be completed in phases and would take around five to seven years to complete. The first phase is expected to complete within next 24 to 30 months and is part of the residential development.

Inno Real Estate launched ‘Inno GeoCity’

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colours to live in
‘Inno GeoCity’; a residential project, is launched by Inno Real Estate in Oragadam near Chennai. This firm is a division of Inno while Inno is a , a global investment group focussed on Indian real estate with operations in India, Middle East and Europe.

On Monday, Rajamannar Ramaswamy, the Group Managing Director said that GeoCity is the first own development project of Inno. Till now, they just used to fund other projects and they have already six Indian projects with a total gross development value (GDV) of Rs. 2,600 cr.

Sajid Sathak, the Managing Director said that Geocity, which is spread over an area of 131 acres would be a self-contained township and that it would have a GDV of Rs. 750 cr. 4,000 residential units would be available for buyers plus amenities such as shopping mall, school and medical facilities would be there.

The first phase of GeoCity will consist of 1,000 units and would complete within 1.5 years.

The houses would fall in any of the three categories; Row House I, Row House II and twin house. The cost of houses would fall in the range of Rs. 17 lakhs to Rs. 22 lakh.

Sheth Developers concentrating again on Vivacity Mall

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250 Bishopsgate, London, E1
Since the demand of commercial real estate is increasing due to the increase in retail activity, Sheth Developers, a property firm tied up approximately half the space at its upcoming 1 million sq ft mall in India’s financial capital.

Sheth developers are Mumbai based developers. They have lined up retailers Hypercity and Shopper’s Stop. Also Cinepolis, which is a Mexico-based multiplex chain, is lined up as tenants for the ‘Vivacity’ mall at Thane which is currently under-construction. All this information was gathered by some reporters on Monday from the vice-president for marketing & leasing of Sheth developers.

He also admitted that although the firm had slowed down construction work due to the market slump, they are now back into operation since their leasing team is getting tremendous response now.

This mall has a total of 670,000 sq ft area as the saleable area and it scheduled to start operations by August 2011.

Space City; Project by Abu Dhabi Firm

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IMG_9454
On last Sunday, Marib Holdings LLC, an Abu Dhabi-based company announced that they plan to build a “space city” in Chikkaballapur district. This district is approximately 90 km from Bangalore. The company would invest an amount of Rs.18,400 cr. ($4 billion) in the project.

On Saturday, this project got its approval from the state government. The project would include both business as well as residential options. The project is to be built over an area of 1,600 acres. Also, an entertainment theme park would be set which would be inspired from Disneyland.

Exhibition centers, a science and technology park, malls and media-linked events are also included in the project.

In all, the project will include 7,200 residential units, a city center consisting of fashion hub, media city, exhibition halls, media design centre and techno city. Also there will be star hotels, a convention centre, offices and an exhibition hall in the free zone office tower.

Commercial Realty unable to seek Buyers

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Commercial National Bank
Due to the continuous oversupply of the commercial projects, the signs of pickup in demand in the sector seems becoming dull and thus banks are also backing out from lending to real estate firms.

As compared to the residential sector, the demand growth of the commercial sector in past few months is much behind that of the residential one. Not only the office spaces are yet to be occupied, but also the ready projects are unable to seek buyers. This lack of buyer’s interest in the office spaces, multiplexes and retail has forced banks to back off lending to commercial sector.

Other than the uncertain demand scenario for commercial space, banks also have to look and take care of the rising realty sector debt on their ledgers. Ranjan Dhawan, the chief general manager of Punjab National Bank (PNB) said that since some of the banks have reached their sectoral exposure limit, they cannot now get into more lending. He also added that although PNB is still in is exposure limit, still it would get into some other lending only after thorough due-diligence.

CREDAI to liaise in builder- buyer disputes

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Do's and Dont's
In the Visakhapatnam chapter, regarding the disputes between buyers and builders, on Thursday, the Confederation of Real Estate Developers’ Association of India (CREDAI) took responsibility of being a mediator so as to arbitrate the disputes.

A code of conduct was formally released by code of conduct, national president, CREDAI. This code was originally brought by the Visakhapatnam chapter as a measure of self-regulation. The formal release of this code of conduct announced many dos and don’ts for member developers/builders of CREDAI.

In the welcome address, K. Subba Raju, the chairman of CREDAI said that they would surely keep a watch on all members so that they adhere to the 27 guidelines of the code completely which in turn would develop a sense of confidence upon the fraternity.

Real Estate; the Best Investment Option

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Ground Floor - Going Up? 2

The realty prices in cities like Delhi, Mumbai or even some of the smaller tier II cities, like Jaipur or Coimbatore, have shown a remarkable increase over the past few years. This growth has proved the advice of Mark Twain, an American author, that ‘Buy land, they are not making it any more’.
There is no paucity of multibaggers in Real estate. Many cases have been observed in which the property brought in 1986 for just Rs. 1 Lakh is now valued at Rs. 1 cr. or even more.
Thus, it can be inferred that prices are multiplying a whopping 100 times in approximately 25 years at an annual return of 20 percent per annum. For example, in 1977, Mr. N Mehta, a retired professional had bought a 1 BHK house in Andheri, Mumbai, for Rs. 70,000 and the price of this BHK now is Rs. 70 Lakh.
According to the head (real estate investment advisory) of Birla Sun Life AMC, Mr. Sashi Kumar, In today’s scenario, each one should hold realty in the portfolio, although the ratio of how much he/ she should hold could depend on the individual.

BOP launches Real Estate Boutiques

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The new Metro City for the price of an ordinary car, £3,250.
PA 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?

Andhra’s Realty Sector Grows

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Delhi Properties - Real Estate India - Unitech Location
PThe state of Southern India has shown a demand in Real Estate properties over the last few months which is a good news for the people of the trade.

The Realty Sector in Hyderabad, Andhra Pradesh has shown sudden upsurge after the recent political turmoil it went through. The demand for both, commercial and residential properties have registered an increase.

The trend is more evident in Tier I and tier II areas specifically; making them high demand markets.

Prabhakar, a Real Estate Sales Officer had this to say on the topic, “Market is improving as of now because of these developments happening in the Hyderabad areas like outer ring road area, Infosys campus and many other areas, so this is the right time to invest and to buy a customer.”

Even the prices of the realty sector have improved as the customers feel Hyderabad is the right place for investment thus increasing the sales.

Raj Kumar, Marketing Manager in a Real Estate firm puts forth, “NRIs, Doctors and Information Technology (IT) people are coming forward for the investment and even some of the central government employees are also coming forward. As you know, now a days comparing with the facilities what we are giving on what rates we are giving, people are seeing benefits and on these bases they are coming forward for investments and showing interest.”

The sector is one of the biggest in terms of number of employees working in the country. It is anticipated that in the next decade the realty sector will grow at a rate of 30% every year. This is bound to attract foreign investors with as many as 30 billion US dollars along with a number of IT parks as well as residential townships being constructed across our country.

Revision of Property Taxes in Delhi

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Downtown Tucson, Arizona (6)
The decision made by Delhi government in concern with increasing the circle rates has encouraged the Municipal Corporation of Delhi which thus, now plans to revise its property tax rates upward.

According to some experts, the impact of the increase in circle rates would be in the ratio 2:1, i.e. , with the increase of 200% in the circle rates, there will be a hike of 100% in the property taxes.

However, where the circle rate increase is not very steep, the revision in property tax could be lower.

The property taxes in Delhi are based on the unit area. The circle rates are fixed at a higher rate because of the cost of property in the posh areas which is quite high.

India’s Silicon Valley- Bangalore

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Photo by dno1967Bangaluru has over the years gained immense popularity as the hub for IT industries in India. With great opportunities like world class education, working environment, living standards it is not wrong to mention it as the “The Silicon Valley of India”.

Many non-Bangaloreans now call the city their home. It is interesting to note that over 10,000 dollar millionaires and about 60,000 super rich people are currently living in the city with huge investments to make. All these have made Bangalore a hot spot for Real Estate Market, both Residential and Commercial.

Residential market has seen some significant action with many developers like Prestige and Sunil Mantri, Sobha, rolling out new projects in micro market segment. Some of the key areas in Bangalore, where the residential demand has picked up, are Sarjapur Road and Whitefield, Doddakanenahalli and, Jayanagar.

The supply is growing in line with the revived commercial real estate demand. Latest report from Cushman & Wakefield implores that the total projected supply for the current year is 12.42 million square feet of office space, more than twice the supply delivered in the year 2009.

Indian Market Research Bureau (IMRB) conducted a survey among 5 cities, amongst individuals aged between 25-39 yrs, stated that Mumbai and Bangalore are the most preferred places to live as the cities provide the best quality of life as well as the most courteous people. Bangalore is also identified as a city which is in the process of development on multiple counters – numerous projects have been initiated in areas of Infrastructure, Power, Water, and Sanitation.

All this indicates that this will be a good investment destination, hence attracting FDIs and NRIs fund flows as time goes.

Wake Up Call against Illegal Construction

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Pimpri Chinchwad New Township Development Authority (PCNTDA) proposes to regularise several hundred unauthorised constructions in its area by imposing fines and development charges on the house-owners

In order to check the illegal constructions across the capital, especially on the land for agriculture, the concerned departments are ordered by the Delhi Government to come up with strict actions against such activities.

As per the instructions of Mr.Raj Kumar Chouhan, the Revenue Minister, any illegal construction will not be tolerated and along with the guilty, the government officials will also be punished if they fail to control such activities.

He added that if anyone is found who is carrying out any construction activities in 1,639 unauthorized colonies, which are being considered for regularization by the government will also be considered guilty and will be punished as well.

Finally, he also said that government would not stand aside but will take action against developers and land mafia if they are found guilty.

13th India Realty Expo’10 A Success

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The India Realty Expo 2010 organized by the Maharashtra Chamber of Housing Industry (MCHI) in Dubai was a great success. It was the 13th year of the realty expo and 9th consecutive year of the expo in Dubai. The exhibition held from June 3, 2010 to June 5, 2010 saw a presence of total 2847 NRI’s. The event’s success can be contributed to the fact that the exhibitors were offering ready properties or possessions between 3-6 months.

The Exhibition was inaugurated by his Excellency Mr. Naresh Mehta, Consul Commerce of India, Consulate General of India, Dubai-U.A.E on June 3, 2010.

Eighteen leading developers and builders from India including Acme Housing (India) Pvt Ltd., Akar Creations Pvt ltd., Ashiana, Delta Group, Everest Developers, Godrej Properties Ltd, Hiranandani Constructions Pvt Ltd, Kolte-Patil Developers Ltd, Marvel Realtors, Nahar Group, Nyati Group, Our Town, Pathy Housing, Runwal Group, Rustomjee, Uma Constructions- represented by United 4 realtors participated in the exhibition.

Indian_Consulate_03_07_2010-36
Photo by vasofoto.comMr. Sunit Mantra, President MCHI said on the occasion, “Looking at the factors such as attractive prices of Indian Real Estate as compared to Dubai coupled with a lackluster trend in local markets there, turned out a bonanza for the Indian realtors exhibiting their properties in the Dubai exhibition with investors and genuine buyers visiting in large number this year.”
The Hon. Secretary, MCHI, Mr. Deepak Goradia said, “We have seen tremendous response and turnout for the exhibition this time. Projects in Andheri, Powai, Navi Mumbai, Kandivali, Borivali, Bandra, Ghatkopar, Thane from Mumbai and other cities such as Bangalore, Goa and Pune received a lot of enquires for residential flats. Quality of visitors was good and mostly they were affluent, focused and high end consumers. Moreover visitors showed interest in 2/3 BHK flats ranging from 60 lacs to 1 cr.”

The Indian Real Estate Industry has only reasons to cheer in the time to come.

HCC’s Priority is the Project ‘247Park’

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Hindustan Construction Company (HCC) which is country’s leading construction firm has declared that it will soon strip its stake. The firm revealed the fact that it will divest its major proportion of investment, i.e. 74% of its stake in various other projects.
At present, the firm’s focus is the project called 247Park. This project lies in Mumbai and this project is expected to work as a milestone for the company’s business destination. IL&FS Milestone Fund are the ones from which firm has striped stake.
The ‘247Park’ will be the hugest standalone LEED Gold certified green building in India. The total estimated value of this Park is Rs. 775 cr. The project is spread over an area of 1.8 million square feet. While Vikhroli seems to acquire a good position in the ranking of business corridors in Mumbai, this ‘247Park’ is located at the heart of Vikhroli. This project was completed in March, 2010 and in just a couple of months, its more than 85% of space has already been leased.
According to Mr. Rajgopal Nogja who is the President of HCC Real Estate Ltd., HCC has finished the project in time without compromising on the high standards of the project.

DLF got NOC for SEZ Kolkata

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Nightscene, Shenzhen 2005
One of the leading real estate developers in India, DLF, has been granted the NOC from the government today, thus the firm will now resume its plan for SEZ, a special economic zone in Kolkata.

After a meeting of the Board of Approval which is the nodal body for SEZ-related matters, Mr. D K Mittal, the Commerce Ministry Additional Secretary told the media that the DLF’s SEZ in Kolkata has been granted re-notification by the Board of Approval.

In June, 2008, DLF had come up with four SEZ projects out of which one was SEZ Kolkata.

DLF have gained this notification after a long struggle since it had to approach the Commerce Ministry for reviving this IT/ITeS tax-free zone. Finally, once the demand for IT/ITES leasing space came up, the company allowed for resuming the project.

RE/MAX Partners With Visual Advisory Services

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One of the world’s largest Real Estate franchising networks RE/MAX has formed an alliance with a Bhopal based firm, Vision Advisory Services. Re/max proudly boasts off more than seven thousand open offices in 74 countries. This is the first time a company as big as RE/MAX has taken a step towards building a network of Real Estate community on a national level.

Procter and Gamble World Headquarters

The director of Vision Advisory Service, Pradeep Karambelkar said, “We look forward to being a vibrant part of the RE/MAX community and playing an important role in the real estate transactions in Bhopal.”

Vision Advisory Services focuses on ethical and transparent business practices, customer-first-attitude, research-based value investing, implementation of cutting-edge technology and respect for professionalism which has enabled them to create an impact in over 40 cities till date.

Vision Advisory Bhopal has been awarded with many felicitations by almost all major bigwigs of the Investment Industry. Vision advisory well supported by top notch professionals having expertise in well diversified financial services in the areas of  Life and General Insurance, Financial Education, Training Manpower, Stock Broking, Real Estate, Mutual Funds and Resource Management.

It’s a first of a kind initiative taken by RE/MAX India which aims to bring organizing and professionalism in the unorganized real estate market of the country. RE/MAX India is also planning to open Franchisees in major towns and regions of the country.

Real Estate Exhibition organized by TOI

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Messe Turm
A real estate exhibition has been organized in India which starts from tomorrow in Doha and is a two day showcase. This exhibition is organized by the Times of India newspaper. The venue of the exhibition is Regency Halls near Mall Roundabout.

The exhibition guarantees showcase of the best real estate options available across India which thus assures the visitors with the exhibition worth a watch.

According to a study carried out by PricewaterCoopers and Urban Land Institute, Mumbai stands at second and New Delhi at the fourth position.

The release also added that the key advantages of Mumbai are its lack of dependence on foreign demand and strong fundamentals. The exhibition would be an ultimate opportunity for potential homeowners to choose from among the best available in India.