On Friday, Alembic, India’s oldest pharmaceutical company announced its entry in real estate sector as it has launched a company called Alchemy Real Estate. The CEO of this company will be Mr. Udit Amin, son of chairman and managing director of Alembic Limited Chirayu Amin. The city-based pharmaceutical major Alembic had announced its planning in June this year about entering the realty sector with residential and commercial properties. Also, one of the official told that Shangri-La, company’s first residential project is located on Alembic road overlooking Alembic cricket ground and near Bhailal Amin hospital. During these announcements, officials informed that the company holds more than 100 acres of land in the city out of which around 50 acres is might be used for real estate purpose. The recently launched residential project will consist of 11 towers of nine floors. There will be in all 396 flats of two, three and four BHK. The project is spread over six acres of land.
Monthly Archives: August 2010
Raheja Universal Ltd got an Average Rating
Raheja Universal Ltd’s is rated a three star on the scale of CRISIL. This implies that the proposed issue of Rs. 864 cr. is an average proposal as compared to other listed ones.
Mumbai will soon be gifted around 70 million sq ft of developed area by Raheja Universal out of which 26 million sq ft will be the commercial segment and 44 million sq ft will be residential segment.
The three stars received by the company from CRISIL reflect its strong position in the realty business in Mumbai. Due to its good execution track record and high quality construction, it has been able to maintain its image as a good brand. This brand name has been the major reason for the company being able to command premium prices over its competitors.
Also, other than this, the company owns an area of 1,202 acres across eight Indian cities.
Homeowners pessimistic about the short-term future of home values
Homeowners doubt these days of the future home values due to which they plan to put their home up for sale if they see the same conditions prevailing in next six months too.
According to a survey, 33% people believed that home values in their housing market are still above the bottom line while 38% believe that they have already reached a bottom.
28% homeowners expect a decrease in home values in the next six months. However, 30% of them are expecting an increase in their local market.
In totality, 27% of homeowners hope for an increase in their home values in the next 1 year, 12% expect a decrease in value, 35% say the value ill be same and 26% don’t have any opinion yet.
3% rise in Indiabulls Real Estate shares
After winning the bid of NTC’s defunct Bharat Textile Mills in Worli, Mumbai, for Rs. 1505 cr, Indiabulls Real Estate shares have raised by over 3 %. Last Friday, the bid for Bharat Textile Mills closed and the winner was Indiabulls Infraestate which won by just Rs. 2 cr.
On the Bombay Stock Exchange, the shares settle at Rs 175.70 which is 3.51 % higher than the share price before this bid. Also, on the National Stock Exchange, the share price closed at Rs. 176.45; 4% higher.
Sensex, the broader market also closed higher by 143.51 points at 18,287.50.
Indiabulls had also one the auction before this one which was for NTC’s 2.3-acre Poddar Mill held last week. Indiabulls paid almost double the reserve price for the mill, i.e. it paid Rs.474 cr for the mill where the bid started from Rs.250 cr.
Tata Group went into partnership with Mizuho Securities of Japan
The Tata Group Company plans to raise $500 million for an India-focused private equity (PE) fund through its partnership with Mizuho Securities of Japan. Tata Capital announced last month that it will raise 1 billion Dollars from both the foreign and domestic investors by the end of next year.
On the other hand, Mizuho Sec plans to focus on developing a growth capital private equity business in India. Also, it wants to invest in Indian companies through private transactions. According to MD & CEO, Tata Capital, Praveen Kadle, Japan’s saving base offers a stable source of capital. If all goes well, there will be high investments from Japanese and other International investors.
Also, Kadle told that the company chose Singapore only due to its transparent regulation with economic and tax advantages.
CREST brings a new product; Real Estate Rating
On Thursday, Crisil, the leading credit ratings agency, introduced real estate ratings in order to help buyers in making informed purchases so that greater transperancy can be achieved. This concept of rating is launched for the first time by any Indian organization
Roopa Kudva, the Managing Director and Chief Executive Director of Crisil, told that there will be a scale of seven stars through which rating would be given to specific projects as compared to the other alternative available projects in the city.
Also, CREST publically declared that they are currently considering 21 projects spread across Tier-I and II cities.
The parameters of rating will be previous record of the developer, the infrastructure of the project, cost overruns, timely completion, finishing, after-sales service, project innovations and the legal issues associated with the project.
Also, this rating will be revised after the project completion.
Report on Commercial Rental Market
A report was released on Tuesday according to which Indian realty sector might face problem of plenty with office rental space. A further drop in rentals is also expected. As per the report presented by Jones Lang Lasalle Meghraj(JLLM) and Confederation of Indian Industry (CII), the vacancy level in India will increase from 17.2% in 2009 to 20% by the end of 2010.
The report stated that during the first quarter of 2010, most Indian cities have experienced an upward movement in the volume of lease transactions. There have been recorded around a million sq. ft. of leases in each of the cities; Delhi, Hyderabad and Mumbai.
For the future, the report predicts that within the next three quarters, most micro markets are expected to reach their rental lows. This implies that even after balance of power favors the occupiers, the opportunity for then is diminishing with every passing quarter.
The report “The Seven Stars of India India’s best performing micro markets for occupiers” gives the prediction about real estate rental market in cities like Mumbai, Delhi, Bangalore, Chennai, Kolkata, Pune and Hyderabad.
Banks cut down lending to commercial sector
In 2009-10, the lenders such as Jammu & Kashmir Bank, Union Bank of India, ICICI, Bank of India and Canara Bank reduced lending to the some sectors of real estate. As per the data provided by banks, the largest private sector bank, ICICI reduced its lending to realty by 17 % and to capital markets by almost 10 %.
However, the public sector banks such as Bank of Baroda, State Bank of India, Syndicate Bank and IDBI Bank rose lending to these sectors between 34% and 46%.
Among the private banks, rank 1 lender was YES bank, next was IndusInd Bank, and followed by Development Credit Bank and HDFC Bank.
Other than ICICI bank which reduced its lending by 9.6 %, the total growth in the lending to realty was around 16.7 % in the fiscal 2009-10.There was a mixed response from the banks. On one hand, around 10 banks rose lending by 30% each, while on the other hand, 14 banks witnessed a decline in lending.
After all these ups and downs, the exact scenario was that the lending to the residential sector increased from 47.5 to 53%, and commercial mortgages reduced from 27.7 to 23.3%.
New plots available in Jaypee Greens Sports City
Jaypee has launched new plots in Jaypee Greens Sports City. These plots are available at a discount of Rs. 1800 per square yards and now it would cost Rs. 16,200 per square yards.
The size of these plots is 153 square yards. Thus, the whole plot would cost approximately Rs.25 lakh. The additional charges on the plots will be the same as the old ones applied on all other plots.
These plots are available at a further discount of 10% on BSP in case of Down Payment. In case of Partial Down Payment, there is a discount of 6.25% on BSP.
One more update is that the project earlier known as JPSK (Jai Prakash Sports komplex) will now be known as JPSI (Jai Prakash Sports International).