The national capital has become the most expensive city in the country for expatriates. Comparing with other metro cities, New Delhi is ahead of Mumbai, Bangalore and Chennai.
However, all Indian cities have witnessed a decline in their rankings in terms of cost of living this year with New Delhi falling to the 65th position from 55th place in last year’s survey, in the global list of 143 cities.
Further, Bangalore has dropped to 133rd rank from the 118th rank in last year’s survey, while Chennai is the cheapest Indian city at 135th rank falling from 117th position last year.
Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is a comprehensive cost of living survey and is used to help multinational companies and governments determine cost of living allowances for their expatriate employees.
Overall, a significant reshuffle of cities can be observed in this year’s ranking, mainly due to considerable currency fluctuations.
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Indiabulls ready to meet demands
Photo by Paolo Màrgari – paolomargari.itIndiabulls Real estate has planned to use more than five hundred million dollars to launch projects at a time. This money is raised from a recent share sale. Mr. Gagan Banga, CEO, said that their aim is to launch 6-7 residential projects in this FY. He showed interest towards pursuing some large projects.
Indiabulls is expecting a strong demand at projects in tier-II cities such as Baroda, Ahmedabad and Indore as these have been appropriately priced, between 2,000-5,000 rupees per square feet. Indiabulls is assured that they can meet the increasing demands for residential real estate.
Maharatna status for PSUs
Photo by camTrailsGovernment is considering giving ‘maharatna’ status to big PSUs to provide them greater freedom to take strategic decisions in key areas of investment and mergers and acquisitions.
The plan to create the ‘maharatna’ group among the so-called ‘navaratna’ companies is part of the 100-day agenda of the ministry of heavy industries and public enterprise.
Currently 18 ‘navratna’ companies have financial autonomy to invest up to one thousand crore rupees in setting up joint ventures or subsidiaries abroad and freedom to decide on merger and acquisitions without the government permission.
Residential property becomes cheaper
Photo by thisperthlifeResidential property prices are expected to fall by about 10% this year. Residential property rates declined by 18% to 20% in this March. Despite this drop, buyers are watching market scenario with ‘wait and watch’ policy. This trend is likely to continue through 2009. Mr. Sudhir Nair, Head, CRISIL Research says, “Demand in the commercial and retail segment is likely to remain under stress for the next two years owing to excess supply and weak off take.”
It is believed that lower home loan interest rates would help to revive demand in the residential segment. Hence, capital values are likely to stabilise in the first half of 2010, and increase during the second half of the year.
Hollow budget for real estate
Lots of expectations were to be met. Lots of requirements were to be fulfilled. Industries were waiting for a rescue hand from Mr. FM to fight against recession. Nobody is happy with this average kind of budget. I was watching pre-budget views and I was hoping much more than what is presented in budget.
If we talk about real estate sector, there is no major change. Government made it easy to build multi storey buildings in rural areas. The fact behind is, will any builder invest his money to make a multi storey building in rural area? My answer is simply ‘No’ and I hope most of the builders think the same. If we talk about the raw material used in this industry, there is no deduction in rate. This means, the struggle of a middle class person, to build a home, has increased.
No solid steps are taken to increase foreign investments. No attractive plans for NRIs. This simply means that Government has no concern for foreign investment.
Realtors use technology to boost productivity
SALES slowdown, stagnating capital values and a need to manage resources better are pushing Indian realty firms to invest in technology that will help them achieve optimum productivity, information access and regulatory compliance.
End-to-end enterprise resource planning (ERP) solutions, that manage diverse projects across different locations, are slowly finding favour. ERP vendors are seeing increased enquiries pushing them to develop tailored solutions targeted at mid-market realty firms.
When Delhi realty firm RDS Projects’ standalone ERP deployment failed, it turned to a solution that provided efficient management of projects across locations and customers: Aurigo Brix. Similar was IDEB’s case, which used Aurigo’s product across realty projects in Southeast Asia and India.
Recently, global tech giant SAP said Maharashtra-based builder City Corporation has gone live on its ERP solutions to help accelerate business plans, such as building 50,000 houses across five townships in Pune including India’s first digital township, Amanora Park Town.
SAP has signed deals with Chennai-based True Value Homes and the Kolkata-headquartered Tantia Construction and also counts GMR Infra and HCC as its major clients.
From tech biggies to mid-market IT firms, everybody is gunning for a slice of this market. While Bangalore-based Sonata Software has launched SonnetCONSTRUCT, a specialised ERP solution for this vertical, Oracle India and HP have teamed up for a bundled offering — Oracle Accelerate Solution for HP ProLiant servers — that will help mid-size businesses across verticals sustain and grow operations.
While vertical-specific ERP figures are not available, the overall market is expected to top $250 million in 2009, growing at a CAGR of over 25.2% between 2004 and 2009.
The firm recently launched its fifth generation product, BRIX 2009, an industry add-on to Microsoft’s ERP solution suite, Dynamics AX and available through select partner channels in the US, Middle East and Africa.
DLF to sell stake in JV to raise fund
DLF is looking to raise Rs 300-500 crore by selling its stake in a JV with Mumbai-based realtor Akruti City for a commercial project in Andheri.
DLF has already scrapped a 5 star hotel project in Prabhadevi in Mumbai with Akruti. DLF was the majority stakeholder in the project. DLF has been looking to monetise its non-core assets to raise funds over the next one year to pay off its debt.
The company had net debt of Rs 13,958 crore, of which Rs 3,591 crore is due for repayment this fiscal. The developer has also put its wind power business on the block and is expecting to collect about Rs 900 crore from it. DLF said it would reduce its outstanding debt by half in this financial year by raising about Rs 5,500 crore through assets sales, plot sales and cash flow from the business.
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.
PVP sells property to SRM
Courtesy: SeracatPVP Ventures has sold its 90- ground prime property at Vadapalani in Chennai to education group SRM for Rs 140 crore. The property developed over 90 grounds with a built-up space of 3 lakh square feet. SRM University has chalked out big plans for making use of the office space. It is in the process of setting up its admissions office.
PVP Ventures has been on a property selling spree and the deal with SRM comes on the back of the sale of its theatre complex in the city’s suburbs and a hotel property in Ooty. The company is learnt to be selling its properties in an effort to focus on its core businesses of urban infrastructure and power generation.
DLF plan could hit barrier
Plans by the promoters of top real estate company DLF to buy out hedge fund DE Shaw’s investment in family-owned DLF Assets (DAL) could hit a roadblock because of a little known rule in the country’s foreign exchange laws.
Under a ‘put’ option signed between DE Shaw and three companies controlled by DLF-promoter KP Singh’s family in May 2007, the US-based fund, which invested $400 million in convertible preference shares of DAL, could exit its investment and get a fixed return of at least 27%.
As per the ‘put’ option with DLF Investments, Kohinoor Real Estates and Buland Consultants, DE Shaw is supposed to get back around Rs 2,500 crore after forex adjustments. But FEMA classifies all equity investments that carry a fixed return as debt, which could bring DE Shaw investment under the purview of external commercial borrowing (ECB) guidelines.
With ECBs not allowed in the real estate sector, investors holding convertible stock with fixed returns could find their exit option blocked.
Indian HNIs make realty investment
Foreign developers are trying to attract Indian HNI (High Net Worth Individual). HNIs are people with net financial assets (liquid assets) of at least $1 million, excluding primary residence and consumables. India is projected to be the world’s third largest economy by 2050. A subsequent increase in the number of wealthy individuals, real estate consultants from across the world are trying and also getting the HNI segment interested enough to buy.
Strong GDP growth, robust figures in industrial and service sectors, high market capitalization and steady FII inflows are some factors contributing to the rise in HNI wealth. In 2006, India’s HNI population crossed the one lakh figure, which made it the second-fastest growing HNI segment in the world.
“Affordable house” or a compromise?
Finding a home in metro cities is not cup of tea for a middle class family. If we talk about affordable house projects, either such houses are in far fringe areas or a result of poor design, cheap production material and lack of space. This simply means that buyers have to do some compromise with their expectations. Many real estate companies are launching houses at 10-20 lakhs. But most of them are not up to mark. If we talk about tier II and tier III cities, those who are working in metro cities cannot move towards small towns for a house.
As per my opinion, there should be some design standards for builders and if they offer affordable house, cost cutting must not affect the design and production material issues.
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Shivalik Group Announces Emerging Business In Real Estate Projects
“Shivalik Group is a Real Estate and Leading Builders in Gujarat. This ISO: 9001 Group is an esteemed company that has accomplished many prominent infrastructures as well as real estate projects. The organization has a vision to go global imagined through its current expansion, in different cities of Gujarat and India, starting from Rajkot”.
Presently, the organization consists a group of 25 companies, with aggressive marketing and efficient operation…the group has forayed in the first five prominent positions among the real estate developers in the city.
The chairman, Mr. Satish N. Shah who has a vision to diversify from stock broking despite having exceptionally booming business has ventured to enter into realities and has established commanding position in the commercial capital of state of Gujarat. He is the group chairman and basically endeavors towards laying strict norms of policies and also periodically reviewing to the needs of the time.
The company severely believes in making and nuturing relationships. It solidly believes that relationship cannot be established on emptiness. It is the quality which has brought the group to such an esteemed level.
The organozation follows stringent rules for quality assurance… Never to compromise on quality irrespective of market conditions is a theme of the success…is the motto of the company. The company has been certified and has obtained ISO 2001 Certificate from Bureau Veritas.
Out of this, the group has Dynamic team of Chartered Accountants & Company Secretaries who look after all the Legal, Financial & Company matters.
Shivalik Plaza, one of the landmark projects has been nominated in the category of best commercial building for the year 2006 by G.I.H.E.D
Research & Markets: 2009 Worldwide Real Estate Property Managers — Industry Report
DUBLIN, Ireland (Research and Markets) – Research & Markets has announced the addition of the “2009 Worldwide Real Estate Property Managers Industry Report” report to their offering.
The Real Estate Property Managers Industry report, published yearly, consists timely and exact industry statistics, forecasts and demographics. The report features 2009 current and 2010 forecast calculates on the size of the industry (establishments, sales, employment) for the 47 largest world countries, like Japan, China, Mexico, Brazil, India, Russia, Canada, Argentina, France, Germany, Italy, UK and U.S…
The report also contains industry definition, five – year historical flows on industry sales, establishments and employment and calculates on up to 10 sub-industries, including rental and leasing brokers, apartment managers, and condominium managers.
$383 mn raised by Franklin Templeton for Asian real estate fund
17th March, SINGAPORE – On Tuesday, U.S fund manager Franklin Resources (BEN.N) said, Franklin Templeton had raised $383 million Asian real estate private equity fund to make an investment in cheap and distressed assets in the area.
Worldwide market turmoil and decreased access to financing have created highly unusual investment opportunities in both the developed and emerging Asian property market, the fund manager Franklin Templeton, said in a statement.
Commercial property costs in financial centers Hong Kong and Singapore are tipped to go down by 50-60% over the next couple of years as banks and fund management firms stroke jobs and rent less space, said analyst.
As banks cut their exposure to real estate, property owners in India, China, Japan, Australia and other countries could be forced into fire sales if they fail to refinance loans, putting more properties on the market and driving values down further.
“We believe that 2009 and 2010 should provide excellent opportunities for real estate investing in Asia,” Glenn Uren, the fund’s portfolio manager said. “Savvy investors are carefully exploring the region looking for undervalued and distressed assets.”
Franklin Templeton, the fund manager, which has been investing in Asian real estate for the past twelve years, also transferred two senior staff members to Hong Kong and Singapore to focus on real estate.
The vice president, Wenning Jung, relocated to Singapore office from California and Donna Ming-Yuan Lee, research analyst relocated to the Hong Kong office from New York, the statement said. (Reporting by Saeed Azhar; Editing by Lincoln Feast)
Thank you for making us the best real estate website
PropertyWala.com has been voted India’s best real estate website for 2008 among 12 nominees in the real estate category. The Website of the Year awards are the largest annual ‘people’s choice’ website awards organised by MetrixLab, in association with Neilsen. Over 1.5 million Indian Internet users participated in this year’s poll. The full press release is available here.
In less than a year we have reached a top spot among India’s real estate portals. We’re very thankful for all the support you have shown us since our launch. This is is what drives us to keep improving PropertyWala.com for you.
Real Estate Glossary
For investment or end-use purposes, either ways real estate is an asset class that has rapidly captured the imagination of families in India. Buying property is an integral part of financial planning for any family. For instance, perplexing to the lay person. Here is a glossary of most frequently used terms in the industry so that you are not at all a handicap when buying property in India. in the medical or legal professions, real estate also has its own vocabulary, much of which can be perplexing to the lay person. Here is a glossary of most frequently used terms in the industry so that you are not at all a handicap when buying property in India.
Built-up area: Built-up area denotes to the entire area of the floor including carpet area, walls, lobbies and corridors, atrium areas and basement. Always, check with your builder/agent on what concept they are using. In Mumbai, the basement, staircase, lift, and utility rooms like generator and electricity rooms are also taken as built-up area. In Delhi, the lift areas and staircase areas are included in the built-up area. In Chennai, the basement and atrium areas are excluded whereas in Bangalore, only basement is not included in the built up area.
Carpet area: The actual usable area within the walls of the floor is Carpet area.
Super area: This is as a rule regards to the entire area of the building which includes carpet area, lobbies and corridors, walls, lifts, staircases basements, and other atrium and utility areas. In Mumbai, the area under water tanks and other utility rooms are included in the super areas. In Delhi, the basement is excluded in super area unless it is being used for commercial purposes. In Chennai, the basement and atrium areas are included in the super areas and in Bangalore, the basement is not included in the super area.
Efficiency ratio: Efficiency ratio is expressed as a share of carpet to super areas of the property.
Floor Space Index (FSI): Floor Space Index is the quotient of the ratio of the combined gross floor area of all floors excepting areas specifically exempted under these regulations to the total area of the plot.
Maintenance charges: These are charges taken by the maintenance society towards the maintenance of the property which includes costs of generator sets, security, landscaping, and common areas.
Market value: Valuation process evaluates the market value of the property. Demand and supply forces in the market and factors like type of property, quality and construction, its location, infrastructure and available maintenance are taken into consideration. Market value of the property is the price that the property commands in the open market.
Stamp duty: Real Estate Stamp duty is a type of tax accumulation by the Government of India. Stamp duty is established the agreement value or on the market value whichever is greater.
Sale deed: Sale deed provides the buyer the absolute and undisputed ownership of the property. With this law, the seller transfers his right of property to the buyer. Subsequently, it is executed to the execution of the sale agreement and after compliance of various terms and conditions detailed in the agreement.
Registration charges: The fees associated with getting the legal title registered in your name. This legal process takes place in the sub-registrar’s office in your local court.
In addition to the above, the following terms are normally used in the commercial real estate market and value getting familiar with, if you are consider to buy commercial place.
Common Area Maintenance (CAM): Common areas include hallways, pathways and utilities. CAM fees are accumulation by the landlords from the tenants to cover maintenance, property taxes and insurance in the case of Triple Net Lease.
Cap rate: Cap rate denotes to the capitalization rate. Capitalization rate is the restitution on investment on the property. The Capitalization rate is measured by the formula: Purchase Price / Net Operating Income from the Property.
Cash on cash: The yearly percentage return of your down payment not including appreciation. It is the first year’s cash flow divided by your initial down payment.
CPI: The Consumer Price Index is used to account the yearly rental increase so as to pay for inflation.
Full service lease: A Lease where the tenant pays rent to cover everything including utilities.
Gross lease: A Lease where the tenant only pays the rent and the landlord pays the taxes, insurance and maintenance.
Gross Leasable Area (GLA): The Gross Leasable Area or the total rentable area is the area which can be rented out for rental income. Itn’t include space for elevators, utilities room etc. does
Letter of Intent (LOI): The Letter Of Intent is a non-binding offer letter to buy a commercial place.
Mixed use: It is commercial properties with retail on the first floor and apartments on upper floors. Mixed use is the use of commercial and residential simultaneously.
Net Operating Income (NOI): Net Operating Income is the annual income after deduction of expenses like property tax, insurance, and maintenance but mortgage payments are exceptional.
Percentage lease: Percentage Lease is a lease where the tenant has to pay base rent plus a percentage of the tenant’s revenue.
If there is any real estate term that you are confuse of always check and verify. It is always better to ensure that you and the other party are working on the same understandings.
Cushman ties up with Technopak
Leading real estate services firm Cushman and Wakefield tied up with Technopak to make an integrated platform of end-to-end retail services. Technopak is well known management consulting firm in retail in India.
The partnership serves to deepen Cushman’s capabilities for its clients in the retail industry by accessing Technopak’s retail strategy and consulting services, a release said.
For Technopak, this partnership would enable its clients to access Cushman and Wakefield’s global platform of real estate market intelligence, management expertise and a broad range of real estate services.
Cushman and Wakefield and Technopak would together have a market share to more than 50% in the retail services sector and this tie up will help both companies to gain much more control on market and provide their clients a platform of knowledge-based advice backed by execution capabilities.
Mr. Sanjay Verma, Executive MD, South Asia, Cushman and Wakefield said, “This partnership also forms a key component of our long-term strategy to further expand our retail services and strengthen our real estate portfolio in India”.
New Incentivised Schemes for Affordable Housing in Offing
In its upcoming mid-term appraisal, the Planning Commission is likely to introduce couple of new schemes for real estate sector so that it acquires a priority status at times of meltdown and provide for “affordable housing”.
Announcing this at the ASSOCHAM National Conclave on Threat Before Real Estate Sector – What are Solutions? held here today, Housing & Urban Development Adviser in Planning Commission, Mr. Harish Chandra also informed that the Cabinet Secretary has already convened a meeting of all States to seek solutions to revive stressed sectors including that of real estate, without specifying the date for the meeting. He, however, added that the mid term appraisal of Planning Commission will now take place immediately after conclusion of forthcoming Parliamentary Polls.
The new schemes will be unfolded during the forthcoming mid-term appraisal exercise of the Planning Commission even at the cost of deficit financing for which the Commission will enter into series of consultation with industry association like ASSOCHAM, said Mr. Chandra.
According to him, in its recent exercises, the Planning Commission, the RBI and the Finance Ministry have jointly announced series of measures to rebuild confidence in Indian economy and many more such initiatives could also be announced by the Commission after concluding the proposed mid-term appraisal, hinting at further lowering of interest rates for affordable housing.
In the meanwhile, Chief Executive Officers of Omaxe Ltd., Raheja Developers, Pioneer Urban Land & Infrastructure, Jones Lang LaSalle Mehgraj that participated in ASSOCHAM organized conference on Real Estate sector, collectively raised their voice, opposing foreign direct investments in real estate sector.
CMD, Omaxe Ltd., Mr. Rohtas Goel who heads the ASSOCHAM Real Estate Committee said that FDI’s in real estate would neither increase supply and demand for affordable housing. Their entry into it will enhance and shoot up the prices of land and therefore, real estate FDI’s should be discouraged as this will pose a serious challenge to affordable housing.
He demanded that the present model on which real estate sector currently stands crippled, needs to be changed and sought that in its stimulus packages of Rs.40,000 crore for infrastructure development, Rs.10,000 crore should exclusively be allocated for real estate sector as subsidy so that affordable housing becomes a reality.
Mr. Goel said that he has decided to offer affordable housing to people for which the first site identified is that of Indore and subsequently this initiative will spread in other parts of the country like Chandigarh, Ludhiana, Jaipur etc.
Speaking on the occasion, Mr. Navin Raheja, Managing Director, Raheja Developers and Sr. Member of ASSOCHAM Real Estate Committee also opposed FDI’s entry into real estate as it would lead to shooting up of land prices and hardly provide for affordable housing.
According to him, the real estate which is currently under stressed would come out of it in next 2-3 months as developers would have to build houses for all stake holders to stay and survive in the business.
Among others who spoke on the occasion demanding another Stimulus package for real estate sector include ASSOCHAM Secretary General, Mr. D S Rawat, Ex-CMD HUDCO, Dr. P S Rana, Mr. Pankaj Renjhen, Managing Director- North India, Jones Lang LaSalle Mehraj, Mr. Kuldip Chawla, Vice President, Red Fort Cappital and Mr. Shashikant Arora, President, Association of Certified Realtors of India.
Unitech looks for $560 million from PE funds
India’s second-biggest real estate developer Unitech is in talks with private equity (PE) funds for investments up to $560 million (Rs 2,750 crore).
The realtor is also in negotiations with banks to restructure an additional Rs 500 crore of loans as part of its plan to cut debt and secure funding to complete existing projects.
The Gurgaon-based realty firm, whose stock is now trading at less than a tenth of its 52-week peak on the Bombay Stock Exchange (BSE), plans to draw down $110 million (Rs 540 crore) from Unitech Real Estate International Fund to invest in its realty projects in the National Capital Region (NCR). When contacted, the company declined to comment on the development.
Last year, Unitech received commitments of $330 million (Rs 1,620 crore) for its international fund, which was launched exclusively to raise money to invest in the company’s residential projects.
The realty major is also in talks with PE funds to raise $300 million (Rs 1,480 crore) at the corporate level and as much as $150 million (Rs 740 crore) for specific residential projects being developed in Hyderabad and Kolkata. While the company expects to tie up PE funding for its Hyderabad and Kolkata projects, being developed through special purpose vehicles (SPVs), by the end of March 2009, PE funding at corporate level is expected only after the fortunes of the market turn for the better.
Unitech has admitted that it has a debt of Rs 8,000 crore on its balance sheet, of which it has to repay Rs 2,500 crore by March 2009.
Of the Rs 2,500 crore, the developer has already restructured Rs 1,000 crore of loans with banks and is in talks to restructure an additional Rs 500 crore. It expects to complete the process by the end of this month.
For the balance Rs 1,000 crore. The company is in talks to sell its Gurgaon-based hotel project and also the project in the national Capital’s Saket area to meet the remaining Rs 1,000 crore. However, a report by CLSA said Unitech needed to repay Rs 1,000 crore of debt to mutual funds this quarter, indicating trouble for the company. Unlike banks, where it has the option of restructuring loans, the debt owed to mutual funds will have to be repaid by this quarter, the CLSA report said. However, Unitech has disputed the report, saying the company did not owe debt to mutual funds.
Indian economy may grow 6.7%
According to Morgan Stanley, Indian economy may grow 6.7% in current fiscal.
According to Chetan Ahya and Tanvee Gupta, economists at Morgan Stanley, “Higher capital flows have been the anchor of a self-fulfilling virtuous cycle of an appreciating exchange rate, lower interest rates, and strong domestic demand growth”. Further they said that however, capital inflows will remain slow for some more period due to continued risk aversion, resulting from slow global environment and rising credit defaults.
Morgan Stanley looks forward to credit growth to down to ten percent over about next half year compared with 4-year average of 28.3% as rising bad loans may make banks risk-averse.
Builders under pressure as buyers force for refund
Some of India’s largest real estate firms such as DLF, Unitech, Omaxe and Parsvnath that launched multiple projects at the peak of the real estate boom are now under pressure from buyers and investors who look to exit these projects.
Already in a difficulty due to unavailability of bank loans and a fall in sales, the developers are less inclined to oblige the buyers who are coming together to mount pressure for refunds in projects that are yet to take off.
Several buyers and investors, angered by the developers’ inability to start work on projects, have stopped payment of installments on their purchases, adding to the companies’ cash problems.
Investors in DLF’s commercial projects in Delhi and Kolkata have come together with the help of brokers to put pressure on DLF to start construction or refund initial deposits.
The broker says DLF has not even paid the government to convert the industrial plots at Shivaji Marg and Okhla in Delhi into commercial plots. However, a DLF spokesman denied this saying, “We go by the agreement with the buyers signed at the time of booking. The allegations over the status of our projects are not true. We will deliver as per schedule.”
Several projects of Omaxe, Unitech and Parsvnath are also facing similar problems. Akash Verma, a Noida-based garment exporter, had booked an apartment each in projects of Omaxe and Unitech in Noida. He booked an apartment at the ‘soft launch’ of Omaxe’s Noida project in May 2007. Omaxe had promised to launch the project formally a few months later at a higher rate. The formal launch never happened and investors like Mr Verma are stuck. Omaxe has turned down requests for a refund. An Omaxe spokesman, however, said the company has ‘considered and taken care’ of all such requests.
Mr Verma has also been unsuccessfully seeking a refund of his investment in Unitech’s Grande project. “I am paying Rs 4.5 lakh as EMI. Unitech executives say the project will be delivered on schedule, but there is no worker at the site,” he says. A Unitech spokesman said, “We generally discourage cancellations. But if the buyers insist, we refund the money after deducting 10-15% of the total value of the apartment.”
Most realty firms do not encourage refund requests. Till the end of 2007, investors could easily sell their property in open market as the prices were going up. But with buyers disappearing from the market, investors are forced to approach developers for refunds.
Some property buyers are seeking refunds due to their weakened financial positions, while several others do so as they are not sure of the developers’ ability to complete the project. There are a few others who seek refunds as they feel that they can strike a better deal now with prices undergoing a major correction.
Ambuja Realty plans to spread
Ambuja Realty will move ahead with the strategy to broaden its horizons into real estate, hospitality, life care and education at the period of economic slowdown.
Mr. Harshavardhan Neotia, chairman of Ambuja Realty, said that the company had not deferred any projects. He said, “We are expanding in all business areas”. Since its inception couple of year ago after the Neotia family sold its stake in Gujarat Ambuja to Holcim, the company has invested twelve hundred crore rupees in projects, with real estate being the main aim.
In the early 90’s, the Neotias had made their foray into housing through Bengal Ambuja Housing Development Ltd in a joint venture with the Bengal Housing Board.
Currently, Ambuja is working on the projects in Chhattisgarh, Punjab and Maharashtra.
In Bengal, it is engaged with its projects in Siliguri, Calcutta and Shantiniketan. The company is engaged in various retail projects in Bengal and Chhattisgarh under the City Center brand. It is building two IT parks — Ecospace in Rajarhat and one more in Nagpur.
Ambuja Realty is also expanding in the hospitality segment. The company wants to build hotels and manage them, too. “You have to start somewhere. We have gained some experience running the fort after the Radisson agreement ended,” Neotia said.