The project encompasses a judicious mix of executive homes, weekend homes and premium villas. The company is pumping in an investment of three hundred crore rupees towards the project.
Mr. Bhim Yadav, CEO, FRSPL says “Our in-depth understanding of a consumer’s requirements and what should be offered to him has helped us in visualizing the largest Secured, Gated and Master Planned Community Development on Expressway, NH-08, in Delhi-NCR which will provide Self Sustainable, Energy Efficient Green Developments, Luxurious and Affordable Housing, Dynamic Location and a great investment growth plan.”
Global Eco-City will showcase the living trends that will come in to vogue. The roof top of the houses will be designed by fitting solar heating systems into homes which is an efficient way to combat increasing energy costs.
All Walls of the houses will be formed to create insulation to keep the home cool in summers and warm in winters. Global Eco- City shall maintain low density housing as well. Each plot has been also designed to have open space in all directions. All residents of Global Eco-city will also have the benefit of getting farm fresh organic fruits and vegetables.
Mr. Yadav said, “Global awareness is the need of the hour. It has been identified that buildings alone are responsible for 25-40% of energy consumption, 30% to 40% waste production and 30% to 40% green house gas emissions globally. There are innumerable benefits of going green that one can talk about. Though in a nascent stage, the concept is very dynamic and fast catching up. The benefit of green concept is reduced environmental impact through energy efficiency and a reduced carbon footprint, without making a commercial compromise”.

The economic slowdown which has mainly affected suburban and non-metro locations has led to some developers coming up with innovative schemes like “Book Now and Pay Later on Possession” as well as home loan installment payment for the initial two years, a report by Cushman and Wakefield said.

A few high-end residential projects in Chennai have also marketed their property with unique concept of an unlimited and unconditional complete structural guarantee against leaks and cracks and a lifetime warranty for standard fixtures.

However, established developers with substantial cash reserves have up till now remained insulated from this trend.

The current short-term stagnation in commercial and residential activity in India has led to an overall reduction in the number of land transactions with developers deferring their decisions to occupy additional land reserves.

However, the economic slowdown is not expected to affect reputed developers as much as small time operators, even leading to consolidation of the industry by bigger players.

Private Equity (PE) funds have adopted a cautious approach towards the kind of projects they pick up and there is an increased emphasis on the reputation of developers, making it difficult for lesser known players to raise funds. This has led to availability of suitable investment terms for funds.

This year investments have diversified across asset classes, with the highest share going to the residential (41%) and township (21%) sectors with the quantum of investment in the range of Rs 128,600 million.

With the market conditions changing over the first half of 2008, investors have become cautions and have chosen to remain in tier one cities where market trends are more definite. PE investments in tier three cities were estimated to be about 40% of the total quarter four of 2007. However as of mid August the tier three cities recorded nil PE investments.

As a result there is marked reduction in investors interest in projects across tier two and tier three cities.

Bangalore and Hyderabad have been able to attract maximum “SPV” deals followed by Mumbai and Delhi NCR.

Region wide distibution of PE deals shows that western (37%) and southern (32%) accounted for almost 70% of the investment followed by northern region at 26%. South Zone has seen the maxiumum number of deals (24) and the avreage size of deals being 2,800 million.

The report also states that commercial supply superceded demand. During the first six months of 2008, the seven major cities in India witnesed commercial office space supply over and above the space uptake, validating a temporary slump in the economy and in the realty sector at large.

However there were also instances like Chennai and Bangalore where the first half of 2008 saw an increase in demand over the same period last year.

In order to ride over the economic slowdown, several corporates have deferred their expansion plans. Some small time and medium players in select cities have been selling their projects to big developers to tide over.

At the recently held Green Building Congress 2008, speakers from various industries tried urgently to tap into the zeitgeist of environmental concern, arguing that green construction is the only way to build without polluting. All manner of purportedly energy-efficient devices from power-saving bulbs to eco-friendly carpets were advertised. However while green construction appeals to builders and many architects, critics think it’s little more than a fashion statement.
The ICGB has been actively promoting the concept of green architecture for three years and offers builders Leadership in Energy and Environmental Design (LEED) certificates. Developed by the US Green Building Council, LEED is a rating system that lays down a set of standards for sustainable architecture. The ICGB holds its own office in Hyderabad as an exemplar of green construction. It has courtyards that allow cross-ventilation thereby reducing the building’s dependence on air-conditioning and skylights that let in enough natural light, precluding the need for artificial light. S Raghupathy, a senior director at ICGB says the building uses about 30% less energy than an ordinary building of similar proportions. Completed in 2003, it is India’s first LEED-certified building. Five years later, 320 buildings that have been registered for LEED awards. Raghupathy predicts that by 2010, there will 1000 LEED-certified buildings in the country.

According to industry sources FIRE Capital is currently in the due diligence stage with the affordable housing investment. “The deal should get concluded within 2-3 weeks,” said the source in the know of the deal.
While, the name of the real estate developer is being guarded by the realty fund, DNA Money has learnt that it is a firm operating out of the eastern region of India. “In most likelihood, the affordable housing project is being developed in West Bengal,” added the source.
The ticket size of the project will be between Rs 8 lakh and Rs 15 lakh across various permutations and combinations of apartment sizes.
Gautam Vashisht, executive director (investments), FIRE Capital Fund, said, “The intent is certainly there in the affordable housing segment in India, particularly in Tier II and Tier III cities.” However, he denied making any comment on the possible investment in affordable housing project in east India.
Fire Capital launched its first fund in 2006 with a corpus of $250 million and has already committed over $150 million across seven investments. Focusing on residential and mixed-use developments centred on residential use, its first investment was in the Indore-based M Jhaveri Group’s 137-acre township. Other investments are also in township projects in Jaipur, Bangalore, Nagpur, Chennai, Ahmedabad and Dehradun.
The venture fund typically makes investments ranging from $5 million to $30 million.
Now with close to 80% of the corpus being deployed, the venture capital fund is planning to raise another fund next year. The amount to be raised is rumoured to be in the region of $500 million. While the primary investors will be from the US and European markets the fund will also look at raising some part of it from the Middle East.
The second fund will also target real estate projects in residential and mixed-use developments (including hotels), and the focus will be on Tier II cities in the country.

The Delhi International Airport Pvt Ltd (DIAL) had planned to raise Rs 2,750 crore from this district in 2008 when the plan was first floated and then got entangled in a controversy with the government.

But by the time this plan got finally cleared and DIAL goes ahead for inviting bidders now, both the real estate and financial markets are in a crunch. These factors, combined with a deposit from successful bidders for three years and not six as earlier proposed, DIAL now expects to raise about half of the Rs 2,750 crore as security amount. The amount raised from the hospitality district will go towards financing the Rs 9,000 crore Delhi airport phase-I that has to be ready by 2010.

DIAL’s plan for the 45-acre hospitality district include having hotels of all ranges — from budget to ultra luxury. As a result, plot sizes range 1.6 acres (for budget) to a 7.7-acre plot for a huge conference hotel. “A security deposit of three times the average annual lease rental will be charged from successful bidders.

The entire infrastructure will be provided by DIAL,” a senior DIAL official said.
Though a common feature abroad, Delhi’s hospitality district will be first of its kind project in India.

The outcome: The bitter realization that the Indian developer has limited options before him to attract buyers. The builders unanimously agreed to allow customers to have a greater say in price negotiations — in other words, they decided to cut home prices.

The developers agreed to give a 10-12% reduction for all consumers, albeit couched in schemes such as ‘bearing’ 2-3% of the interest cost, flexible rates for parking and floor rise pricing. “Don’t be rigid on rates; allow the customer to have his say,” was how one participant who is involved in large housing projects in suburban Mumbai, described the conclusion of the meeting.

The developers’ move also assumes significance as a sharp correction in Mumbai home prices would have a ripple effect across the country. Though residential prices are down 20-25% across India, developers in Mumbai have been unwilling to cut prices, citing a huge demand-supply mismatch.

“This quarter was crucial for us,” said a developer who was present at the meeting. “Demand is still robust as far as residential markets are concerned. What we want is to convert the demand into actual deals. If pricing is hampering sales, we are willing to compromise on that,” he added.

Till now, developers were not ready to accept that demand at high prices would weaken. In fact, most developers were currently holding out and did not offer discounts. They could afford to do so, since they were sitting on huge profits accumulated over the past two years of bull run in realty market.

“But the same developers have realized that demand is unlikely now at the prices seen two years back,” said an analyst with Kotak Securities. “We believe demand can only come back if prices correct.”

Some of the developers who were learnt to have attended the Grand Hyatt meeting were Akruti City, Nirmal Lifestyles, Kanakia Builders, Evershine Builders, Rahejas and RNA.

In Delhi, several developers in the National Capital Region have started offering deeper cash discounts and have increased their marketing efforts. Developers are banking on more ‘genuinely-priced’ products, a good cash discount and more advertising to lure buyers. “We didn’t offer any discount during the festive season last year,” said Raheja Developers chairman Navin Raheja. “But this time, everyone is giving it, since market conditions have changed.”

Raheja Developers is offering an outright discount of Rs 200 per square feet or around 6-7% at its soon-to-be-launched high-end project in sector 109 in Gurgaon. Aiming to lure government employees — beneficiaries of the Sixth Pay Commission recommendations — the developer is offering them an additional discount of Rs 100/sq ft, which is over and above the Rs 200 discount offered to all.

This quarter, developers are caught in a pincer-grip of falling sales, dropping rentals and tight liquidity conditions. Developers said they have also asked industry associations and their officials to help bring back investors and buyers’ confidence in the real estate sector. The overall quantum of sales dropped over 60% in the past quarter due to rising interest rates and additional pressure on household budgets.

Developers across the country have now pegged hopes on the upcoming festive season, offering to pay stamp duty and gifts like a car or free home furnishing.

For instance, Mumbai-based Sunil Mantri Realty has waived stamp duty (5% of property value) for buyers at its Mantri Park project in Goregaon (East) in Mumbai and is also offering 5% discounts at its Bangalore and Gwalior projects.

The Citigroup-backed Golden Gate Properties has offered a car for every customer booking a flat at the Golden Palms project on Hennur-Banaswadi road, some 30 minutes from Bangalore’s new international airport. “We are offering a Skoda Fabia to every customer who books a flat at the Palms,” said Sanjay Raj, executive director at Golden Gate Properties. “For those who already own a car, we are providing a discount equivalent to the value of the car,” he added. Golden Palms comprises 450 apartments measuring 1,400-1,800 sq ft and is priced at Rs 2,600 per square feet.

The first half of this year also saw a marked shift in developers’ strategy towards mid-income houses, as the high-end segment witnessed increased resistance from buyers.

Project launches in the high-end category fell by two-third to just 5, while mid-income housing project launches rose by over 20% to 37.

As per a report by international property consultancy firm DTZ, the absorption of mid-income houses in July at 76% had overtaken that of high end houses (68%). This means that high end houses are selling at a slower pace than the mid income segment. The report says that the share of mid-income housing in the overall residential supply is expected to rise to 62% in three years, compared to 22% currently.

This translates into a CAGR of 131% for mid income housing units.

The order is for the development and construction of township for the new zinc smelter plant at Dariba, Udaipur of Hindustan Zinc.
The township which is spread over an area of 4,50,000 square feet in a 12.5 acre plot consists of G+2 and G+3 houses, hostels, club, shopping centre, guest house, Swimming Pool, surface transportation program (STP), wastewater treatment plant (WTP), Sub-station, Water Harvesting, Internal Services and External Services consisting of Roads, Drainage, Water Supply, Street Lighting, Lawns and Horticulture.

The project, spread over thirteen acres, is likely to be completed by 2011, the company said in a statement.

Earlier in the day, Parsvnath said it expects revenue of 400 million rupees from its just-launched housing project in Pune.

According to tax consultants, people whose income is derived from other sources, say a salaried employee, can and have in the past offset derivatives losses against short-term capital gains made in property transactions to reduce tax incidence on the property gains.

Gains from property are deemed short-term if they are held for less than three years. Once a derivatives loss is offset against the gain, the balance short-term capital gain is clubbed with the salary income and taxed at the normal rate.

Tax experts, like Ernst and Young director (financial services) Sameer Gupta, point out that in the context of shares, Central Board of Direct Taxes (CBDT) issued a circular in June 2007 laying down the tests for distinction between shares held as stock in trade vis-a-vis those held as investment.

Some of these tests include the scale and frequency of the transactions, whether owned funds or borrowed funds were utilized for the transactions, the accounting treatment, the motive behind entering into the transactions, etc. They add the tests are indicative and not decisive, and need to be examined on a case-to-case basis, including their applicability to futures transactions.

“It may be argued that a gain or loss arising from an exchange-traded futures transaction (NSE/BSE F and O) is in the nature of a short-term capital gain or loss as a person buying or selling a futures contract is creating a right or interest (in buying/selling a specific number of shares on a net settlement basis) and that when this right/interest is transferred by way of squaring off the transaction, there is a capital gain or a loss,” said E and Y’s Gupta.

Other tax experts buttress this argument by pointing out that a capital asset in the Income-Tax (IT) Act means property of any kind held by an assessee, whether or not connected with his business or profession.

“Under Sec 2 (47) of the I-T Act, a transfer in relation to a capital asset is defined as including the sale, exchange or relinquishment of the asset or extinguishment of any right therein or the compulsory acquisition thereof under any law. The word property used in Sec 2 (14) of the I-T Act is a word of the widest amplitude and the definition has re-emphasized this by the use of words “of any kind”. Thus any right which can be called property will be included in the definition of capital asset,” said senior vice-president (finance) of Tata Sons FN Subedar, drawing attention to a Bombay High Court decision in Tata Services versus Commissioner of Income-Tax case of 1979.

The implication of this is that a derivatives contract entered into by a person, and not held as stock in trade, is a capital asset and that when the futures contract is settled, the accrued gain or loss arising from the settlement of the contract is a capital gain or loss, added Mr Subedar.

Interestingly, while derivatives losses can be genuine, as is likely to be the case over the past nine months which has seen the Sensex declining by 38%, investors can also buy losses in a structured deal with brokers in order to set off the derivatives loss against the short-term capital gain arising on sale of immovable property in the same financial year.

Share brokers say this, though illegal, is not an unknown market practice. They are also quick to point out that structured deals wherein one party buys a loss while the other books a gain is restricted to the ‘unscrupulous’ variety of brokers and is not prevalent among reputed and big institutional and retail brokers.

Explaining the modus operandi of such transactions a broker said this practice was prevalent in the case of Nifty futures. Say, investor A wants to buy a loss and investor B wants to book a profit. The broker punches in a buy and sell order, respectively, on two different terminals using A’s client code for both the transactions (buy and sell).

However, if the valuation of the property changes in six months to Rs 1.2 crore, the investor could sell it and make a cool profit of Rs 20 lakh on an investment of Rs 10 lakh. “This mostly happens when realty market is on a high,” Mr Aggarwal said.

“It’s a general slowdown in the real estate sector which is showing in the advance tax figures,” says Omaxe CMD Rohtas Goel. Omaxe hasn’t paid any tax for September quarter as against Rs 37.5 crore in the year-ago period.

The trouble in the realty sector was evident in the stock market on Monday as the BSE realty index fell 5.26%. DLF scrip touched an all-time intra-day low of 329 despite its previous announcement of share buyback.

Unitech’s advance tax declined by half to Rs 50 crore, while HDIL has paid nothing as against Rs 30 crore last year. Sobha Developers’ tax payment in September fell 60% to Rs 5 crore from Rs 12.5 crore in September 2007. Ansal Properties &Infrastructure paid half the advance tax at Rs 5 crore compared to the year-ago quarter. Parsvnath paid 20% lower tax at Rs 20 crore.

A senior Unitech executive said realty firms operate through hundreds of subsidiaries and so advance tax figure of the parent company may not reflect the health of the group. However, Karvy Stock Broking vice-president Ambareesh Baliga said: “Given the current market scenario when real estate stocks are getting hammered every day, all listed firms would like to show a better profit in the parent company rather than subsidiary.”

One industry executive blames liquidity crunch as one of the reasons for lower advance tax. “Companies may have better profit but not enough cash to pay tax,” he said. Mr Baliga says companies can’t afford to not pay tax despite showing profits. “At best they can defer booking profit to next quarter if they don’t have enough cash to pay tax.”

Meanwhile, DLF’s buyback announcement doesn’t seem to have helped arrest fall in its share price. A DLF spokesman said, “The impact of buyback announcement was not visible on our share price because we have not started the action yet”.

he said at a Ficci seminar, “It will be difficult for builders to raise finances for their other developments and in subsequent phases, projects will also be postponed”.
OMR, realty analysts say, is symptomatic of the overbuilding that has happened in far too many pockets.
Two other plum areas that are likely to face the same fate, they said, are Lower Parel in Mumbai and Noida in the National Capital Region, both of which are hotspots for A-grade office space. They predict high vacancy rates.
Lower Parel has a ready office space of 4.5 million square feet and will add a minimum 5 million square feet by 2009, taking the total commercial space to 9.5 million square feet.
Of this, DLF, India’s largest realtor, alone will add 3.8 million square feet through office space and a mall.
Indiabulls Real Estate, Peninsula Land and Orbit Corporation are also busy completing their projects in the locality.
To boot, top players such as DLF, Unitech, Emaar-MGF, Akruti City, Puravankara and others have expanded to states they were not present in, and have ended up in close proximity to each other, creating oversupply pockets.
What started as a building boom in 2007 across emerging markets such as Chennai, Hyderabad, Bangalore and Indore is a year later, a very different story thanks to the Reserve Bank of India’s rate hikes, the wealth-depletion effect of falling stock markets and economic headwinds.

A DLF spokesperson said, “We are happy to receive the Golden Peacock Award for excellence in corporate governance as it validates DLF’s focus on following policies and processes which serve shareholders and stakeholders of the company in the best possible manner”.

So to lure customers they are using various techniques. To attract customers in real estate sector requires great offers from property dealers. And real estate dealers are giving those offers to buyers. Recent case of great real estate offer is in Noida. In Noida, one real estate group is giving free BMW car to customers who buy its luxurious flats in Greater Noida Golf Course Complex. Not only you will get free BMW, you will also get free membership to Golf course and social club along with 2 free car parkings there.

These luxury flats are specially built flats for Indian riches. Flats have been developed keeping in mind CEOs and MDs of big MNCs . The price for these flats ranges from Rs. 3 crore to Rs. 4.50 crore. But there are few requirements to be completed before you get free BMW when you buy flat in Greater Noida. Customer will be asked to pay 40% of the amount to free BMW offer from Noida’s real estate developer. And only those who apply under this scheme will avail this real estate offer. And if you cancel the flat booking after you get free BMW, price of BMW will be taken from your advanced payment and leftover will be given back to you.

So the thing is sure. This is a mean to attract real estate customers at the time when whole real estate sector around the world is going through a big slump.

“We are looking at opportunities to enter into the affordable housing sector, but it is still at the discussion stage. It may take one year to concertise the plan,” Mahindra Lifespaces Managing Director and Chief Executive Officer Pawan Malhotra declared.

Affordable housing is making waves in the realty sector due to high cost of property, dearer home loan and its availability, high inflation and the huge gap between demand and supply.

A mapping of the supply trend of housing from private developers done by Ernst and Young shows that 70%-80% of it caters only to the higher-income groups.

In contrast, the Planning Commission expects that the housing shortage in the country to go up to 26.53 million units over the next four years. Of the total housing shortage, economically weaker sections and low-income groups account for about 99% of the shortfall in India.

Thus, anticipating volumes to make up for lower margins, a number of recognized real estate players, like Puravankara and Omaxe Ltd, have already plunged into the new asset class of the real estate sector.

In addition, Matheran Realty, Indu Projects, Shriram Properties, Jain Heights and Structures, Ansal Properties and Shapoorji Pallonji among others are either entered or are in the wings to enter into the creation of affordable housing.

Besides, the company plans to develop 10 such e-house projects in the metro cities across the country by 2010-11.
“We have just announced our first e-home concept called Gardenia E-Homes at Greater Noida. It will be followed by another nine such project in various metros over next three years,” Design Arch Managing Director J K Jain said.
He said the company is investing Rs 150 crore for the Greater Noida project and expects a realization of Rs 250 crore once the project is completed by mid 2010.
Jain, however, declined to disclose the investment figures for the other projects planned by the company.
“A green building may cost a little more initially, but saves through lower operative cost over the life of the building. There are many benefits, such as improving occupants’ health, comforts, productivity, reducing pollution and land fill waste,” he added.
He said the company is looking at developing both commercial as well as residential properties with this new concept.
Elaborating on the concept, Jain said structures would be electronic savvy, environment friendly, earthquake resistant besides other amenities.
“The green buildings in our project area will have four components, including energy saving, water saving, better indoor air quality and hygienic conditions and reduction of construction material waste,” he said.
The project would have some other eco-friendly concepts, like integrated rain water harvesting coupled with recycling of water and automatic fire detection sensors, he added.

According to a senior official of the IL and FS backed QVC, it plans to use a portion of the funds, Rs 200 crore, for the development of its Rs 2,000 crore township project in Gurgaon. Delhi-based Uppal Group is a partner in this project.

“We will need funds to acquire land in the southern metros. We propose to acquire about 100 acres each in Bangalore and Hyderabad, close to the new airports in these cities, because we believe that both cities will grow in the direction of the airports. We will require funds to develop current projects,” said QVC’s promoter Prakash Gurbaxani.

According to Mr Gurbaxani, IL and FS is likely to invest up to Rs 400 crore in the company giving it the option to raise debt or bring on board a strategic investor into the SPV implementing the Gurgaon township. IL and FS has already invested $100 million into QVC in April, 2007.

QVC Realty, has six projects under various stages of development: integrated township projects in Gurgaon and Pune, apart from stand alone developments in Pune, Bangalore and Chikmagalur in Karnataka totaling about 20 million square feet.

The company has also partnered with Bangalore’s Sobha Developers and New Delhi’s Chintels India for its second township project in Gurgaon.

The company formally launched its Rs 150 crore Bangalore residential project – QVC Hills. It will construct 100 premium villas, priced upwards of Rs 5,500 per square feet, on a 26-acre plot located in close proximity to the Devanahalli airport.

Plans include developing an additional 50 acres in the coming years, investing additional Rs 250 crore, Mr Gurbaxani said.

Corporates such as the Aditya Birla group, GMR Infrastructure, Akruti City, Bangalore-based Nitesh group and Saffron Advisors have either floated or are in the process of floating funds with corpus ranging between Rs 500 crore and Rs 1,000 crore.
“As far as Indian realty is concerned, for the right projects, funds are still available,” said Saffron Advisors MD Ajoy Kapoor. “Conservative European investors, after conducting extensive due diligence and research, are more comfortable with investing in Indian real estate provided they are able to align with the right partners,” he added.
Munich-based retail aggregator Deutsche Capital Management AG (DCM) has underwritten $20 million for Saffron India Real Estate Fund I (SIREF I), an India-focused real estate fund floated by Saffron Advisors. DCM is raising a specific fund for investing into Indian real estate through Saffron Advisors.
SIREF I is currently raising funds in the US, the UK, Europe, the Middle East and the Asia Pacific. It is a $350- $400 million real estate fund with a maximum limit of $500 million.
Bangalore’s Nitesh group is in the process of floating a Rs 1,000-crore property fund to invest in the group’s real estate arm Nitesh Estates’ upcoming project and to buy assets. “We have initiated talks with many European institutions and HNIs to invest in the fund. The initial response is very positive,” said Nitesh group chairman Nitesh Shetty.
Mumbai-based developer Akruti City is also planning to float a Rs 400-crore fund to acquire more properties as valuations drop across India. “We have got Sebi approval to float a real estate fund,” said MD Vimal Shah. “We have initiated talks with domestic banks to raise the funds,” he added. In the next six months to one year, the property value would fall further which would open opportunities for acquiring cheaper real estate assets, he added.
Tough lending norms, an unfavourable primary market and the US financial worries have started to limit money flow to the domestic property market. The number of real estate deals has reduced and fancy valuations projected by developers witnessed a deep correction, said industry officials.

The Aditya Birla group recently said that it has plans to float a fund for real estate with the corpus likely to be over Rs 500 crore. Industry sources also said that GMR Infrastructure is also planning to float a $1billion infrastructure and real estate fund and that preliminary talk are on with institutions and banks.

While bus terminals will be converted into bus stations-cum-commercial and retail hubs, the company plans to set up 17 warehousing facilities for NCDEX across the country.

“Bus terminals are one of the ideal commercial and retail destinations,” said Akruti City MD Vimal Shah. “Compared to malls and other shopping centres, human mobility at bus terminals is comparatively high. Passengers would be offered more comfort.”

Many state governments and the Indian Railways have zeroed in on bus terminals and railway stations as ideal locations for development as the passenger traffic has been on the upswing.

Some state governments, including Maharashtra, have already started the redevelopment work for BEST terminals while the Railways has identified 22 stations to be converted into station-cum-malls and hotels through public-private participation.

In the first phase, Akruti City will redevelop 5-7 bus terminals in towns such as Baroda, Surat and Mehsana in Gujarat. Akruti, in turn, will get around 2-3 million square feet of area for commercial and retail development.

Currently, Akruti City has 107 million sq ft of developable land bank spread across Mumbai, Panvel, Pune and Baroda. Akruti, in association with TCG Realty, is developing a biotech park on 700 acres at Savli near Vadodara. Shares of Akruti City rose 3.64% to close at Rs 966.15 on the Bombay Stock Exchange.

On Akruti’s JV with NCDEX, Mr Shah said, “Warehousing is one of the new growth areas we have identified. The JV with NCDEX envisages development of 17 warehousing facilities for the commodity exchange at various locations in the country. We will develop and manage these facilities for NCDEX.”

This would promote inter and intra state real estate transaction. The company is already experiencing the pleasure of its presence in Karnataka, Kerala, Andhra Pradesh, Pune, West Bengal, Delhi and Tamilnadu. Its main business involves property transactions with a retail format and it is planning to deliver all property transaction related services under single roof. This will be the first property shop in Orissa of its type.

Moreover, the negative global news flow has set off a panic reaction, inducing investors to close deals at losses.

The 35-year-old Rahul Verma, who works with a Noida-based IT company, exemplifies the experiences of late entrants into the property market. He bought a Rs 50-lakh flat in Greater Noida early last year by arranging for a bank loan to finance 85% of the cost.

His EMIs have continuously gone up since the purchase, thanks to a series of rate hikes by the RBI. The flat purchase was a pure investment decision. Rahul had jumped onto the bandwagon after hearing stories of skyrocketing returns made on property investments.

However, the prices haven’t climbed as expected and the interest outgo has made the property expensive. Rahul is now left with the only option of selling at a loss. And given the global economic gloom, he is willing to take a hit.

“Several investors are stuck simply because there hasn’t been enough price appreciation in the past one year,” says Raheja Developers Chairman Navin Raheja.

Several young investors invested in property at the peak of the property cycle last year. Many purchased two apartments simultaneously, assuming that they would finance one by selling off the other at a premium. They are now caught in a difficult situation as they bought at a higher market rate and are compelled to service two EMIs.

Some investors have started defaulting, according to a senior Parsvnath executive. “There is a significant rise in the number of people who are approaching us to cancel their bookings and return the money,” he says.

Property consultants feel that investors will have to bear huge losses if the markets do not improve during the festive season. Home buyers in the country are staying away due to the high interest rate regime and expectations of a correction following the realty crash worldwide.

Foreign investment norms for real estate do not allow repatriation of funds within three years of investment. The RBI-DIPP meeting will discuss a mechanism to deal with cases like Lehman, when foreign investors in real estate go bust. One of the key questions is what happens to the failed investor’s assets, which are bound by certain lock-in periods.

Lehman has its real estate assets spread across the country.