“With the Rupee depreciating via-a-vis the dollar, NRI buyers stand to gain by around 20%. Prices too have begin to decline. NRIs can get a good deal now and we intend to highlight this,” Maharashtra Chamber of Housing Industry’s CEO Zubin Mehta said.

The Rupee had depreciated from the Rs 40 mark a few months ago to the Rs 50 mark against the dollar last week, a fall of over 20% in the span of a few months.

The Rupee depreciation against the dollar would benefit NRI purchasers by around 20%. Besides, prices have declined by 10-15% in the last few days. If discounts by builders are also factored in, buyers could be advantaged to the tune of nearly 40%, Mehta said.

“If a 2 BHK flat in a decent Mumbai suburb costs around Rs 50 lakh, it could be available to NRIs for around Rs 40 lakh. Factor in the price decline and if the builder offers a further discount or says the stamp-duty is for free, then the flat could be available for as low as Rs 35 lakh,” he said.

The MCHI intends to use the Rupee depreciation against the US dollar as a major selling point to NRI buyers. It would be a holding an exhibition in Dubai end-this month where major developers affiliated to the MCHI would be showcasing their properties.

“NRIs in the Gulf primarily look at ready property and these could now be easily available to them,” Mehta said. Mehta said that the main reason for targeting UAE NRIs was that they were mainly working-class people who have gone to Dubai and other places in the UAE with the aim of earning a living and buying a home in India.

“They are not permanent residents like in the US or the UK. They primarily earn their living in the UAE and buy a home in India,” Mehta said.

These NRIs have the money and are the actual buyers but are holding back on purchases hoping that prices would fall.

“In Asia Pacific, the financial market turmoil is starting to significantly affect the occupancy market for major financial office centres. Net leasing activity has been negative and vacancy rates have been on the rise for several quarters in Sydney, Tokyo, Singapore and Hong Kong,” JLL said in a latest report.

The consultant pointed out that rentals in Tokyo, Sydney and Hong Kong have already moved in downward phase of the cycle, with Singapore expected to follow suit in this quarter.

It has forecast that largest rental declines over the next one or two years are expected to be seen in the mature Asian markets following the demand contraction and the very strong rental increases observed in recent years.

JLL also noted that in the tier I cities in China and in some Indian suburban micro markets, the next two year will see abundant new supply hitting the market as demand begins to fall which would result in increased vacancy levels that could lead to major correction in rentals in short and medium term.

“In leasing markets where financial services companies contribute significantly to office occupancy and have driven rents to record levels, the increases now are beginning to reverse as the landlord-tenant power play shifts,” JLL said.

The report further pointed out that economic impact on real estate fundamentals are hitting more gradually in Europe than in the middle east and North Africa or Asia Pacific.

An association of developers, Confederation of Real Estate Developers Association of India (Credai), has asked member developers to reduce prices, but no one seems willing to announce any cuts.

“The government has imposed a number of taxes on the real estate sector. It needs to roll them back,” said DLF chairman KP Singh. He, however, didn’t make any commitment on price cut. “Prices are a function of demand and supply. Today, supply is far ahead of demand,” he said, adding that housing demand will pick up only after interest rates are brought down to 6-7%.

Most developers are banking on the possibility that the Reserve Bank will slash rates that will in turn bring home buyers back into the market. Many developers don’t think it is possible to slash prices.

Delhi-based Emaar MGF feels lower interest rates and an improvement in general economic sentiment are the answer to revive residential market, not price cuts. Emaar MGF managing director Shravan Gupta says several micro-markets across the country have already seen a correction of 20-25%.

“We have already cut prices, which have brought our margin down to 15% from 30% last year. If we cut prices further, our margin will get wiped out,” said Mr Gupta.

Parsvnath Developers chairman Pradeep Jain, too, feels prices are unlikely to come down, even though builders may focus on small-size homes to bring down overall cost. “The ticket size will get smaller for making homes more affordable. But per square feet rate will not come down,” said Mr Jain. He is the president of the Delhi chapter of Credai, which gave a call to its 3,500 members on Wednesday to reduce prices.

There is a wide spectrum of views among developers on price correction in the residential market. Even as Emaar MGF’s Mr Gupta says a price correction of around 25% has been seen in several micro-markets across the country, Mr Jain of Parsvnath says prices have remained stable. Another Delhi-based realty firm Omaxe CMD Rohtas Goel says prices have reached ‘rock-bottom’ by having corrected up to 40-50%.

The correction, developers say, is not with respect to the rates at which transactions were made in the past. “There is no benchmark to compare rates of new launches. We can only compare it with our estimates of prices, which similar projects could have fetched in good market,” says Mr Gupta.

Therefore, price correction, as mentioned by developers, remains debatable. Developers say price correction can be seen only in new launches, as old buyers will not allow builders to reduce prices in an ongoing project.

The company, which is planing to invest the amount in the first phase of the plan that will see development of 102 townships, is looking at both debt and private equity investments to raise the fund. The move by the firm follows consolidation of real estate business of the Sahara Group under it as the holding company.

“We plan to develop 102 townships in the first phase. The average project cost for developing townships would be 150 million dollar,” Sahara Prime City Head (Strategic Finance) Sandeep Wadhwa said. Asked about source of funding for the project that will spread over 100-300 acre, he said it was being done through sales, debt and promoters contribution but there is a gap of Rs 100 crore in each project.

“We will raise Rs 2,000 crore by 2009-10 fiscal as debt and private equity,” Wadhwa said, adding the company was in talks with banks, financial institutions and private equity firms. The company is open to selling stakes at both company and project level, he added. It is also in talks with global developers to form joint venture for townships development.

On initial public offer, he said the company would unlock value when market condition improves. Sahara Group had announced its plan to develop townships in 217 cities in 2004-05. It has launched nine townships where construction is in full swing and is planning to launch 22 more townships by middle of 2009.

Sahara Prime City has 20,000 acre of land, including 10,600 acre in Aamby Valley City near Mumbai.

Such an exercise enables banks to keep their non-performing assets (NPA) ratios under check and their books clean of the stigma of dud loans. But in a little-known directive issued earlier this year, the central bank has ordered that the moment a loan to a builder is restructured, banks must classify the account as an NPA.

However, for restructured loans in all other sectors, the account can continue to be treated as a so-called ‘standard asset’, thus sparing banks from having to make large provisions in their profit and loss accounts. The inability to restructure loans easily is forcing banks to put pressure on builders to cut prices, sell properties and service loans. Builders are usually left with little choice as an NPA tag will make it difficult for them to approach other banks for funds.

“We are putting pressure on the real estate sector to reduce property prices. In such times, even if they are able to keep their head above water, it would be fine. They have all had a good innings so far. Now, they have to learn to live with thin margins,” said TS Narayanasami, chairman & managing director of state-run Bank of India, and the chief of industry body — Indian Banks’ Association.

“Just banks reducing interest rates will not help in reviving sentiments; builders will have to bring down prices for buyers,” Mr Narayanasami added.

Bankers say demand for home loans has fallen because buyers are waiting for property prices to fall. “Banks have taken the initiative by cutting home loan rates. Prices of cement and steel too have fallen, but builders have not reduced property prices,” said MV Nair, CMD of Union Bank of India.

Although the RBI relaxed some bank lending norms for the building sector last weekend, it has remained quiet on the issue of restructured loans of builders.

Analysts have expressed concerns over the financial health of the real estate sector. City-based retail broking firm, India Infoline, fears the liquidity situation of developers could worsen further if banks refuse to refinance maturing debts of real estate companies and maintain the credit freeze on their accounts.

“We reckon that debt maturing over the next 12 months for developers like Unitech, Sobha and Puravankara is higher than our estimate of these companies’ revenues over the corresponding period. The situation with Omaxe, Parsvnath and Ansals also remains precarious, owing to large land advances and high receivables”, it said in a research note.

The building sector has seen a raft of credit downgrades amid refinancing concerns and bankers say the sector has little choice but to cut prices. “If a builder does not pay, banks would either initiate a recovery proceeding or restructure the loan. A recovery proceeding often results in lower realization. This, hopefully, should indirectly put pressure on builders to bring down price and go for negotiated sales,” said SA Bhat, CMD of Indian Overseas Bank.

Skyline Group also signed another contract for Frasers Hospitality to manage its other Bangalore property. Slated for opening in 2011, Fraser Place Hosur Road, Bangalore will have 153 serviced residences and is located at Bangalore’s “Electronic City” near the IT Park.
“Bangalore is India’s IT Hub,” said Skyline’s Group Managing Director Avinash Prabhu. “We are confident that the Fraser brand of luxury serviced apartments which has a loyal following in Europe, Australia and Asia, will appeal to the expatriate community here, as well as the well-heeled India businessmen and professionals in Bangalore on medium-term travel.”
A contract for Frasers Hospitality to manage a third Bangalore property has been signed with the Minerva Group. Fraser Place Whitefield, Bangalore will have 99 serviced residences located in the heart of the city’s IT hub of Whitefield, a well connected and self contained suburb, home to many multinational companies. The property will also open in June 2009.
India forecasts US$35 billion in foreign direct investment for its 2008-09 financial year, an increase of 42% compared to US$24.57 billion in 2007-08.
“Though these numbers will be impacted by the financial crisis, India will still see positive growth,” said Mr Choe. “This is impressive by global standards and India will still see demand for high-quality secure branded hospitality like Fraser especially among business travelers, our target market.”
All Fraser-branded properties provide five-star-type luxury combined with the space of an apartment, with separate living room, dining room and fully-equipped kitchen complete with clothes washer and dryer. In addition, residents can enjoy a full range of facilities, including all-day dining, business centre, swimming pools, fitness club, children’s playground and indoor playroom.

Responding to the request and interest shown by all section of buyers, TDI has brought in this scheme as a part of its customer friendly approach. Though the actual price of the apartments start from Rs. 68 Lacs, the scheme enables the buyer to own any one of these exquisite high rise apartments for as less as Rs 9 Lacs.

Launching the scheme, Mr. Kamal Taneja, Managing Director, TDIL said, “Launching this scheme for “Kingsbury Terraces” is just one way of bringing in more customer friendly and innovative approaches to serve our customers better. We will soon introduce many more innovative schemes for our other projects which will be of benefit to our valued customers.”

Owing to the location of the project in Kundli, the potential emerging hub of NCR, Kingsbury Terraces offer the best of world-class facilities and features. Residents of each of these Kingsbury apartments will have their select king size living space and style.

This is ensured by exclusive gated access, with the block sporting modern amenities like gymnasium, swimming pool, billiards room and community club to name the basic ones. Inter-flowing beautiful greenery and landscaping, State-of-the-art international standard elevations, terrace garden, four spacious bed rooms with hall, a separate servant room and balconies all around are a part of the world-class designs given to these apartments.

Sources at Unitech revealed that money from the escrow has been handed over to IBFSL on Monday. After this, collaterals that Unitech had pledged with Indiabulls to secure the debt will be released to the company. With this payment, the company does not have any outstanding debt towards IBFSL. Indiabulls founder Gagan Banga confirmed that Unitech has cleared its loan, which was taken 45 days back (early October) within the stipulated time.

“Unitech had pledged some flats and hotels against the loan,” informed Mr Banga. He, however, did not confirm the amount of loan that was raised. Unitech’s total net debt as of June 30, 2008, was around Rs 7,700 crore. Earlier this month, the company had put its 2,00,000 square feet commercial office building in Saket, New Delhi, on the block, which is expected to fetch upwards of Rs 600 crore.

Sources said that Unitech is also looking for buyers for its underconstruction hotel in Gurgaon, which is valued close to Rs 300 crore. Unitech’s stock has dropped from a 52-week high of Rs 546.80 on January 2 to a low of Rs 26.60 on October 24. Its shares closed at Rs 42.75 on the Bombay Stock Exchange, down 6.56% from its previous closing of Rs 45.75.

The overall slowdown along with the increased home loan rates has translated into gradual slowing down of sales in the real estate sector. Most real estate developers today are cash-strapped and are looking at avenues of raising capital.

With bank lending becoming tight over the months and private equity players getting overcautious, the only way out for real estate companies has been to monetise their assets. Market sources indicate that a number of such deals are in the market, but investor interest is very low at the moment.

“We are looking at divesting up to 100% stake in all six properties, comprising 1,000 rooms. We are also talking to a few private equity funds for this, but a deal hasn’t been clinched yet,” a top executive at Unitech’s hospitality arm told ET. He said the company had also scaled down its target for hotel business. Instead of 15 hotels with 2,500 rooms as planned earlier, Unitech has decided not to go beyond the 1,000-room capacity.

“We are proceeding with our hotel business as planned earlier. Six of our hotels are under construction. The first will open in January 2009. Unitech is in the business of developing properties and looking at monetizing its real estate assets. We are evaluating a divestment of equity at both individual assets as well as a group of assets. Depending on the price, we will be looking at minority or majority or outright sale in these assets,” Unitech MD Sanjay Chandra said.

Unitech’s first hotel project will be the 199-room mid-market property, which will be managed by Marriott and sport the ‘Courtyard’ brand. A person briefed on the matter said that Unitech was seeking a valuation of Rs 250 crore-Rs 300 crore for the property, but had been offered a lower Rs 200 crore by a private equity investor. He said the two parties may close the deal soon at the lower end of the band.

Other two hotels of Unitech, for which the company has management tie-ups with Marriott and Carlson hospital chains, will be ready in one-and-a-half years.

Mr Chandra had said that Unitech planned to build 35 hotels, including 15 in the first phase. The company expected to raise $350 million through private equity in the current fiscal for its hotel business. The global financial turmoil, however, has made fund-raising difficult for real estate firms.

With equity as well as debt becoming increasingly difficult to raise, a capital-intensive business like hospitality has taken a backseat for developers. Even DLF has shifted its focus from hotel and mall business to other segments where revenue realization is quicker and easier.

Considering the slump in the real estate sector with higher dips in demand for property and developers finding it hard to secure more land bank, which earlier was fulfilled with revenues generated from their projects itself, and increasing risk of rising NPAs of banks, the banking sector has come into focus once again.

The BSE Bankex was down 4.5% Monday at 10:38 am. The country’s largest private sector bank, ICICI Bank, fell 6.92% to Rs 368.55. It was followed HDFC Bank, which was down 6.09% to Rs 950, Axis Bank down 5.24%, Kotak Bank down 4.88%, Union Bank down 3.92%.

BSE Realty Index fell by 5.10%. Unitech was down 8.5%, Peninsula Lan falling by 6.11%, Indiabulls Realestate has fallen close 5.67%. Ansal Infrastructure was down 5.76%.

The benchmark Sensex was down by 2.6% to 9142.60.

Said Rahul Amritlal, an analyst with a CFP, “There is still concern left in the market with regard to trading considering the obscurity over global markets movement. We would see some respite after March-April period as the Assembly election proceeds. Till then, it would be range-bound activity as regards the Sensex movement.”

The government kick-started a series of “investment meets” last week in Muscat that had major Indian firms hard selling India’s economic stability to the diaspora.
The Muscat meeting, held under the aegis of the overseas Indian affairs ministry on November 12, is the first in over 16 such meetings to be held in the Middle East, UK and US.
These countries account for the bulk of the Indian diaspora. According to Col Harmeet Singh Sethi, head of the Overseas Indian Facilitation Centre (OIFC), the Indian government and business groups will target areas in the Middle East that remain largely ignored but represent big money including Sharjah, Dubai, Abu Dhabi and Bahrain.
According to Sethi, real estate, education and wealth management are key areas where India is looking for investment and support from the diaspora. One of the major obstacles in this area is the bureaucracy and red tapism. “We were told that India is rated the 83rd most difficult place to do business in. There were reservations expressed by business people there who are interested in investing in India but we were able to allay their fears to a large extent,” Sethi said.
The meeting included biggies like DLF, Career Launcher and Kotak Mahindra.
The investor tete-a-tete comes close on the heels of PM Manmohan Singh’s trip to Oman where he asked Gulf nations to invest in Indian infrastructure and help the country register 9% growth.
India is now looking at big-ticket investments in areas like infrastructure, healthcare, education, assisted living, wealth management and real estate.
Indians send the highest amount of remittances back home, beating even China. India has now captured one-tenth of global remittance flows with total remittances from overseas Indians growing steadily from $2.1 billion in 1990-1991 to $27.1 billion in 2006-2007.
But investment from the diaspora lags behind. Sources said the ministry of overseas Indian affairs was keen to convert this emotional bond into a financially productive one.

“We are not slowing down on any of our projects. Jaipur is rocking, Chennai is doing well, city-based projects such as Faridabad are also doing well,” Mahindra and Mahindra Ltd Executive Mr Arun Nanda said.

Fundamentals of real estate have not changed. Mr Nanda said, there were no funding issues for its projects and the company’s affordable housing projects are not going to disappear.

“We have actually got cash in the bank,” he said, adding there is a huge demand in Rs 30 to 40 lakh apartments segment. He, however, said the housing loan segment is facing problems and investors are not coming forward. “Demand has been put on back-burner and interest rates are hurting people,” he said.

Expectedly, several public sector lenders were first to follow the advise. SBI have lowered their prime lending rates to 13%. Bank of Baroda, Allahabad Bank, Syndicate Bank, Central Bank of India, Oriental Bank of Commerce and Corporation Bank have reduced lending rates by 75 bps to 13.25% with effect from November 10. Dena Bank cut its PLR to 13.5% from 14.25% and, among foreign banks, Citibank lowered its benchmark lending rates by 50 bps to 15% with immediate effect.

A source, who was present in the meeting, said the government accepted that real estate is an engine of growth. At a time when the economy is facing a threat of slowdown, the sector could be used to revive it. Chidambaram, it is learnt, told the delegation that the government will not only help infusing liquidity in the system, but will also work to bring down the interest rates.

In the last couple of years, realty has been affected adversely because of rise in interest rates, which went up from 8% to around 12%. The interest rate was increased because of the sharp rise in prices of real estate assets, which RBI thought could create a bubble. To discourage the price rise, RBI tightened the provisioning norms, making loans to the sector costlier. At the same time, in the last nine months, when the inflation shot up to cross 6%, level RBI started tightening liquidity to keep price rise under check.

Such a steep rise in the interest rates increased the equated monthly instalment (EMI) of a loan for the same period by almost 40%. This has affected affordability factor of buyers adversely and in turn brought down buying of houses. According to the source,FM said the situation has now changed and the policy would also be tweaked accordingly, so that the interest rate on home loan comes down, making it more affordable.

It is learnt that RBI is considering to remove the high risk weightage on the home loan to enable banks to lend at lower rates. At present, banks have to make provisioning of higher capital against the home loan of more than Rs 30 lakh. Because of this, the interest rate of home loan above that slab is around one percentage point higher than that of less than Rs 30 lakh.

Director of the company quoted that though the concept is still at a nascent stage, it is dynamic and fast catching up. The benefit of green concept is reduced environmental impact through energy efficiency.

Freebies in the shape of luxury sedans, offers of foreign trips, 15%-20% discount or deferred payments have failed to attract buyers.

Fears of recession and an overall depressing sentiment have forced the real estate players to re-draw their strategies and curtail their expansion plans in the high-end and premium segment.

The focus has suddenly now shifted to providing budget housing in order to cash in on volumes and target Tier-II and Tier-III cities.

Parsvnath Developers Chairman Pradeep Jain said the Government should help the developers to launch a special scheme to promote affordable housing as costly land was a big hurdle.

Favouring Government’s intervention to give a fillip to affordable housing, Omaxe Chairman and Managing Director Rohtas Goel said: “There is an artificial scarcity of land. No cushion is left in the hands of developers to reduce the prices.” Omaxe has already put in place National Affordable Housing and Infrastructure Limited for developing affordable housing to a bigger section of the society.

to be excessive. But, outside this golden circle, in cities such as Mohali in the foothills of the Himalayas and in the boom town of Rudrapur, in neighbouring Uttar Pradesh, where 465 factories are being built, construction is booming. In the south, Goa and Chennai are still steadily attracting investment.

In recent times, demand for housing has risen rapidly as income levels have soared, new jobs have been created and people’s aspirations have changed – although this is slowing down due to the credit crunch. A new report on commercial property by the Royal Institution of Chartered Surveyors lists India as one of the countries most vulnerable to the crunch.

Jane Jorgenson of Hamptons says: “The Indian property market is being affected by the credit crunch, as with all countries. Buying has certainly slowed. However, the growth of middle and high income earners continues to supply a steady market of buyers.” The property market has grown from £6.5 billion in 2005 to an estimated £30 billion. Hamptons has opened an office in Delhi, and has an India desk in London for UK-based investors.

Land prices have quadrupled over the past three years as developers rushed to build luxury residential developments, with starting prices at a minimum £125,000 for two bedrooms. But the big boom will be in low-cost affordable housing. The number of people earning more than £2,500 a year is forecast to double to 20 million in the next two years – not least because of the 2.5 million students teeming out of Indian universities each year.

The UK-based agency David Stanley Redfern is selling off-plan apartments in Rudrapur, northern India, costing £28,000 for two bedrooms. Called Mountain View, the scheme quickly sold out, but another is being built nearby which will also offer affordable housing, ready to capitalise on the anticipated demand. Rudrapur, designated a Special Economic Zone, offers tax incentives to companies moving into the area. The city’s new factories are expected to employ 300,000 people, at least 50,000 from outside the area, who will be looking for homes to rent. With only 20,000 new units being built, buy-to-let flat owners are hoping to cash in.

Emaar Properties and MGF are planning to build townships in Delhi, Hyderabad, Punjab, Uttar Pradesh and Chennai, an investment of more than £2 billion.

The potential for growth remains vast. Sebastian Siddiqui, who heads up Hampton’s Delhi office, claims: “With a rising middle class, 400 million people – more than the entire population of the USA – are set to buy their own homes.”

However, in the recent years, there has been a paradigm shift, and professional real estate management companies are slowly emerging as the preferred destination for investments of Indians from around the world. A survey states that the organized real estate sector in the country was a mere 2%, and will be counting for 20% by the end of this decade. That is serious growth!
If you look at the size of the country we are talking about, 20% of the market being developed by the organized sector would ensure that the overall quality of property in India would go up big time. And as always, property always reflects on all the other industries around it. So, when the quality of real estate becomes better, all the other indicators in all other associated industries would also become of a better quality.
A lot of people looking to buy residential property in India now prefer to go through established realty companies like Omaxe. Most of those investors are NRIs who’ve settled abroad many years ago. The reason is simple – going through a professional company adds value to your property in India, and is any day a better buy, as there are a lot of risks that are mitigated. The surprising trend is that people are now buy sell property in India in places that they have no direct interest in! All these years, investments were in our own cities. Now, investment happens wherever there is growth, and that is a very positive shift in the thought process of the investor. And many sellers also now prefer to go through organized channels. There are good times ahead – and we’re very happy!!

The request has also to be seen in the context of the recent announcement by China that it would invest about $586 billion on boosting infrastructure and consumption including low-cost housing.

In a letter to the Prime Minister recently, Credai said that the high credit squeeze was forcing ongoing projects to a virtual halt, amid an “extremely negative sentiment in the market”.

“Capital of both developers and funds have significantly eroded with crashing valuations. Developers and funds are unable to raise loans from external sources to finance completion of ongoing projects due to ECB and other restrictions on real estate development,” Credai said.

Stressing on the need to define ‘affordable housing’, Credai said that the FDI and ECB rules need to be modified to encourage investment in affordable housing. The norms currently allow 100% FDI in construction development projects including housing, commercial premises and resorts subject to conditions minimum capitalization, and area for development. “The limits of 50,000 square metres or 25 acres could be relaxed for this sector,” it said.

It further said that ECBs should be permitted for the real estate particularly for completion of all ongoing projects where there is already equity in form of FDI. Currently, the ECB is prohibited for real estate development.

“The monetary policies of the RBI for real estate projects and home loans by Indian banks, closure of ECBs and rise in interest rates together with stock market crash have lead to a situation where credit has dried up and buyers are hesitant to invest despite a strong demand,” said the Naredco Director-General, Brig. (Retd.) R.R. Singh.

Naredco has said that in cases where the land is purchased from Government agencies, banks should be allowed to finance the land cost in addition to construction costs.

The RBI, since October, has reduced several benchmark rates including mandatory deposit that banks keep with the central bank (cash reserve ratio), the amount which banks have to park in government securities (statutory liquidity ratio) and repo rate to unlock bank funds and trigger a low interest rate regime. However, the spate of negative news from the real estate sector shows no signs of waning. A report released by Cushman & Wakefield yesterday had pointed out that retail rentals fell by up to 20% in the third quarter ended September 2008, as retailers moved cautiously on expansion plans.

The Barwa Real Estate and Sun Group, a leading investor and private equity fund manager in India have entered into a joint venture agreement to explore the Indian real estate market.

Sun Group and Barwa have proposed to form a 50:50 joint venture company to be named as Sun-Barwa Land. The new company will seek approval from the Foreign Investment Promotion Board (FIPB) in India to aggregate, acquire, hold and develop land banks in high growth areas in the country. Sun Group and Barwa together will raise capital from Qatari and Middle Eastern investors.

Ghanim Bin Saad Al Saad, Barwa’s chairman and managing director said: “It was part of our strategy to enter the Indian market that has strong fundamentals and solid growth parameters. Barwa looks forward to its partnership with Sun Group due to its extensive experience in the Indian market.”

Nand Khemka, chairman of Sun Group said: “ We are proud to be partnering with Barwa which brings significant expertise from Qatar and the region to India with potential for major growth for years to come.”

“We look forward to a successful launch once we receive the remaining regulatory approvals, which should take place sometime in 2009,” Rajeev Talwar, group executive director of DLF, said in a joint statement with Christopher Cooper, chairman of PFI’s international investments unit on Tuesday.

The fund venture, DLF Pramerica Asset Managers Pvt Ltd, is headed by Vijay Mantri, who joined in April from the Indian fund unit of Deutsche Bank.

DLF Pramerica joins more than 20 firms looking to break into the Indian fund industry, which saw its assets grow more than four-fold to Rs 5.5 trillion in five year ending 2007.

Assets have shrunk 28% to Rs 3.9 trillion this year due to a stunning 51.5% slump in India’s benchmark index and outflows from fixed income fund

The Indian Parliament’s raising of direct foreign investment limits in insurance ventures from 26% to 49%, if enacted in December, will mark a milestone in India’s insurance industry since the opening of the sector for private and foreign investors in 1999. Since then, insurance sector has been expanding by an average of 25% per year, according to PricewaterhouseCoopers in a recent report.

Underlying factors for liberalization are being driven by fundamental developments in the country’s insurance market, in which foreign capital injection and knowledge are important to fuel the growth of distribution and product promotion.

Prior to the partial opening of the market, the insurance sector was controlled by a handful of state-owned enterprises. In the absence of competition, product choice was largely limited to endowment and money-back life policies and fire and property policies, according to PricewaterhouseCoopers.

The commute would may be a drag but there’s plenty of space on the moon and the view is to die for. A whole acre costs a measly Rs 1,000. No wonder, even Indians have put down a deposit. Scientists know it is rich in minerals and believe it might have frozen water. This is why NASA’s planning a lunar post by 2020.
“International treaties forbid private or sovereign ownership of extraterrestrial real estate,” says space lawyer Ranjana Kaul.
Plots have already started been named – The Sea of Tranquility, Mount Agnes, the Alpes Valley.

“We will be prepared to look at opportunities, but won’t pick up something just because it’s cheap. However, there are some gaps in our portfolio, which we would like to fill. If there are some significant assets, which are hard to replace in a market like NCR or Mumbai, we will certainly look at it,” said Mr Singh.

He said a challenging external environment had forced his company not to move “at a pace we would have liked to” and asked the government to bring down interest rate for home buyer as well as developers.

“We pay 3% more interest on loan compared to any firm similar to us in another industry,” Mr Singh said. DLF recently borrowed at 16% interest rate. The company reported a 4% decline in net profit at Rs 1,935 crore for the September quarter, compared to the corresponding quarter last year. In comparison to the first quarter of the current fiscal, DLF’s revenue remained flat at Rs 3,840 crore, even as customer advances fell 8.6% to Rs 1,585 crore.

As global economic turmoil unfolds, several MNCs have been taking a relook at their space requirements. Mr Singh says no client so far has backed out, but most of them have been “reluctant to commit space in the past 2 months.” Office space contributes major chunk of DLF’s revenue.

Sales to promoter group company DLF Assets (DAL) contributed 37% to DLF’s sales and 47% to the company’s profits in September quarter. The receivables from DAL though have been piling up, raising analysts’s apprehension on its ability to pay back. DAL currently owes Rs 4,800 crore to DLF. Mr Singh agrees raising equity would be difficult in current situation, but says DAL will be able to raise enough debt on the strength of its rentals and pay back entire amount due to DLF by the end of this fiscal. Properties held by DAL are expected to generate a rental of over Rs 600 crore by March ‘09.

On company’s retail foray, Mr Singh said, “Our intention is to bring high-quality retailer to our malls and that’s why we keep engaging with them. But we have no intention to compete with our other tenants.”