Wipro Infotech has managed to get a ten year project worth Rs. 1.3 billion from Lodha Group. Wipro will provide IT and business transformation services to Lodha group in India and Middle East. Wipro InfoTech is a leading IT company in India. Lodha group has started a new path to get a premier position in the dynamic real estate market.
Lodha Group is a leading real estate project in Mumbai. It has a land bank of 6000 acres. The group is developing multiple projects in and around Mumbai. It is focusing on the development projects of offices, campuses, SEZ’s and townships and keen to enter in southern and western markets
The deal was announced by Lodha group director, Abhisheck Lodha. He expressed happiness on becoming technology partner with India’s leading IT service provider Company, Wipro info tech. chief executive of Wipro Infotech, Anand Sankaran expressed hope of successful completion of the project. He said that company will deliver its IT related services to make the group, a leading player, in real estate business.
The shares of wipro witnessed a fall of Rs 3.55, or 0.87% as per data shown by BSE.

Meerut is only 72 kilometers from New Delhi. It is an ancient city, which belongs to Uttar Pradesh state. The great history from the city is that Mandodari, wife of Ravana, belongs to this city. Meerut is stand at 28.98 north and 77.7 east, and 219 meters above from sea level. Meerut is the major education center of Uttar Pradesh and students come from all over the country for higher education. CCS University, Meerut Institute of Engineering & Technology, Meerut Institute of Technology, L.L.R.M Medical College, Subharati Medical College and Shobhit University are the famous colleges of Meerut. The real estate market of Meerut as an industries and involves in construction of shopping complexes and apartments. There are various types of industries in Meerut, because the city is near to Delhi and Noida.

If you live overseas than Meerut property dealer may you help in find your dream projects. Meerut property dealers offer you to both types of properties like commercial and residential properties. Real estate in Meerut is riding the crest of increasing demand boosted by large availability of abundant land at throw away prices. MSX Developers, Era Group, Supertech Group, Majestic Properties, DLF are in the Meerut real estate market and increase the competition.

Four hotel chains have submitted bids for a plot to build a five-star hotel in Navi Mumbai, at a time when land prices have dipped in Mumbai and surrounding areas.
Indian Hotels Co. Ltd, which owns the Taj group of hotels, Sun-n-Sand Group of Hotels, Leela Palaces, Hotels and Resorts and Metropolis Hotel have submitted technical bids in the auction for the 11.6-acre land on the Palm Beach Road. The bidders, if their technical bids qualify, will have to submit financial proposals on Friday.
The City and Industrial Development Corp. of Maharashtra Ltd, or Cidco, which is conducting the auction, had set a minimum price of Rs37000 per square meter for the plot, nearly half the price at which two plots were auctioned in 2007 by the same organization in Navi Mumbai.
The slowdown has impacted the few land auctions this year. Last week, Cidco received only one bid in an auction for a plot reserved for an IT park. The land was sold at Rs1 lakh per sq. m, less than the Rs1.5 lakh quoted for a plot in the same area in 2006.
Pranay Vakil, chairman of real estate agency Knight Frank India Pvt. Ltd, said it is “not a good idea” to hold a property auction in a falling market. He added, “We are not encouraging auctions now, because the psychology is not to outbid people but to underbid”.
Vakil Said, “Auctions, as we can see, would inevitably not receive enough bids. Private negotiation for property and land sale is a much better option over auctions now”. Further he pointed out that land prices have dipped by 15-30% in Mumbai and Navi Mumbai this year. The signs of the real estate market heading for a correction in Mumbai started showing when two out of five plots went unsold in the central business district of Bandra-Kurla Complex in an auction in March.
Cidco managing director G.S. Gill said, “We are not private developers or landowners who are waiting for the market to go up. We continue to develop and sell land”.

A number of Lucknow-based small builders are facing crunch due to the rise in inflation and increase in the interest rate by banks.

After the real estate boom the city witnessed, a number of such builders joined the bandwagon. Moreover, they invested heavily in the projects.

However, due to the recent downturn, they are forced to sell of their projects at lower costs. Many of them have shelved their future projects also.

“The current slowdown in the realty sector, coupled with high interest rates and increased cost of construction, has affected the industry immensely. The depreciation has been to the tune of 25-30 %,” Nagendra Pandey of Landmark Constructions told.

The recent hike in the raw material cost has added to the worry of the builders.

“The average cost of construction has increased by almost 30 %. The average cost of construction for the build up area, which used to be Rs 600- 700 per square feet, has gone up to Rs 800- 1,000 per square feet,” added Pandey.

“The city has witnessed a huge property demand in the last 2-3 years, however, for the last 6 months it’s experiencing a downfall,” he said.

“The raw material cost has seen an unexpected increase. Steel prices have gone from Rs 3,000 per quintal to Rs. 5,000 per quintal. Similarly, mortar, which cost Rs 18 per square feet, is now costing Rs 35 per square feet,” Pandey said.

There are around 500 small builders in the city. These include those builders also who build small one-room flats and shops.

“The cost has gone up by approximately 30 %. We cannot cut on the selling price and hence the customers are also shunning away from us. This is a situation of crunch,” said Tirath Housing Director Rahul Agarwal.

It is to be noted that the cost of land has also doubled in the city in the last couple of years. Moreover, owing to unprecedented demand for newly-constructed residential properties, property values in Lucknow sub-urban areas have shot up by 20-30 per cent in the last one year.

The cost of land in a locality like Gomti Nagar has gone up to Rs 1,500 per square foot from Rs 600-700 per square foot.

The other favourite spots in the city include Mahanagar, Jankipuram and Aliganj. |The national players like Ansal API, Parsvnath, Omaxe etc, which have significant presence in Lucknow, are also experiencing similar adversity.

“Big players plan their projects taking into account future prices and the cost of production. They have also been affected but not as badly as smaller builders,” said a property dealer.

“The fact is that the business is not going great although the top players are not affected much because they have entirely different category to serve and also have diversified products,” An associate broker for some top real estate players said.

“All products are moving at an average level and nothing drastically has happened as far as our company is concerned. Inflation cannot be ignored and we have to cope with it no matter what,” Ansal API Executive Director (Operations) Ramesh Yadava said.

However, recent inflationary trend has dampened the spirits of both the builders and customers. So much so, that the customers have put on hold their plans for booking of the flats affecting the builders further.

Chandigarh real estate is witnessing testing times. On one hand, there are more investments pouring in the segment and on the other side property buyers and sellers are not very enthusiastic about property transactions.

The overall, economic recession has caused stagnation in the country’s real estate segment. Chandigarh’s property segment, too, is witnessing a similar trend. Property brokers in Chandigarh say that real estate values have stagnated. Property prices for plots in suburban areas like Baltana and Kharar have stooped down to as much as Rs 100 – 200 per sq yard. This is almost 20% decline in prices when compared to corresponding quarter last year.

Property sellers in Chandigarh see this as a temporary phase and are holding on to their land assets. They hope that real estate prices will increase in next six months and this is when they will make profits. Property buyers, however, say that Chandigarh Property Prices are nominal still. They have few choices as there are not many sellers in the markets as of now.

Recent developments in Chandigarh’s property segment are worth noticing. Delhi-based developer Parsvnath has bought 38% stake in Sabeer Bhatia’s Nano City Project. Nano City is a commercial and residential project in Chandigarh and will be completed by 2010. Market sources say that Bhatia is already scouting IT clients to open offices in his Nano City. This will bring more employment, and thus many more property users and home seekers to Chandigarh.

For now, one will have to wait and watch. Property market is expected to be buoyant in some months. This may be a breather for investors who have put their money in properties at Chandigarh.

Suffering from low margins, Indian developers are entering fresh businesses like retail and hotel to expand revenue stream and offset slowing demand for real estate projects due to six year high lending rates and severe financing norm. Below are a few recent investments in the hospitality sector
Yatra Capital, a Jersey-based private equity firm, will invest more than four million euros in an forthcoming Taj hotel in Calcutta. Yatra Capital will acquire a 40 % stake in Jalan Intercontinental Hotels Private Limited, the company which is building the two hundred room property. The hotel will be managed by Indian Hotels Limited under the Taj Gateway brand.
Warburg Pincus-Casino Group: The Kochi-based Casino Group of Hotels (CGH) is in the market to raise capital. According to the media report, private equity fund Warburg Pincus is in talks with the company to invest upto three hundred twenty five crore rupees. CGH is a foremost hospitality group in Kerala, and is wholly owned by the the Dominic family. The report adds that they may divest upto 20 %, which would value the enterprise at around one thousand six hundred crore rupees. The company requires funds for its domestic as well as abroad expansion.
Rakindo Developers has raised four thousand crore rupees from Lotus Investment fund to develop hotel properties across India under the brand name Millennium and Copthorne Hotels. It has initiated construction in Hyderabad and Bangalore, and plans to set up hotels in Vizag, Kochi and other south Indian cities.
Delhi’s DLF and Parsvnath have also planned 75 and 100 hotels, respectively. DLF is teaming up with Hilton Hotels and Parsvanth with Royal Orchid Hotel.
Sahil Group, Pune-based property developer has coupled up Carlson Hotels Worldwide-Asia Pacific for a project under the Radisson Resort and Spa brand at Alibaug and Pune
Nirmal Lifestyle has formed a JV with Accor Hotel for development in Mumbai and Goa.

Goa is set to become the first state in India to appoint non-resident Indians (NRIs) to various boards and corporations. Eduardo Faleiro, former minister of state for external affairs and currently Goa’s commissioner for NRI affairs, told, “Putting Goan expatriates on state boards and corporation is one of our various steps to reconnect them with their roots. When this happens, Goa will be the first Indian state to accord this honour to expatriates”.
Faleiro, who is here to attend the annual Global Goans Convention, said the state government was wooing back expatriates with a variety of schemes.
Faleiro said, “In view of their often-heard complaints about property disputes, we are amending the tenancy Act next month for a summary trial of property-related cases filed by NRIs. These people cannot stay in India for a long time to fight such cases”.
He said about 500,000 people of Goan origin live abroad. Further he said, “Almost one third of Goa’s total population of 1.4 million lives abroad. The Global Gaons Convention is our effort to reconnect with our expatriate community scattered all over the world”.

Faleiro said that Goa was also the first state to have started a scheme to issue ‘Goa Cards’ to NRIs to give them unhindered access to government departments. He said, “We will also be the first state in India to put NRI representatives from countries with a large Goan expatriate population on a high-powered committee to address their grievances. This committee, headed by me, will have high-ranking state officials, including district collectors”.
To expedite NRI investment proposals, he said that the Goan government has appointed a nodal officer in the industry department.
“To reconnect second and third generation Goans abroad with their roots, the state government has launched a programme called `Know Goa’.
“Under this programme, we will invite 15 youngsters (in the age group of 18 to 26) who have distinguished themselves academically or professionally, to visit Goa for 15 days as guests of the state. We will pay all their expenses,” the former Indian minister said.
Faleiro said that the state government has also initiated a study to monitor migration from Goa. Further he said, “As part of this study, we will visit people in their homes to know how many of their family members live abroad and how much money they send back home. We have also asked the Reserve bank of India to help us know how much remittances are coming into the state”.

Touted as a entrance to Rajasthan, Bhiwadi, falling in Alwar district and bordering Haryana is a key industrial growth centre in the NCR with over 2500 operational industries. Bhiwadi enjoys huge location advantage with IGI Airport, New Delhi, just fifty five kilo meter away and Gurgaon forty kilo meter away. Being close to Delhi and well connected by NH-8, Bhiwadi is attracting industrialists not only from the capital but also from Punjab and other parts of India.
Manesar, lying between Gurgoan and Bhiwadi, is another key industrial town with IT parks and proposed SEZ. As the prices in Gurgaon are already high, service class people are left with no choice but to go to Dharuhera, Manesar or Bhiwadi. Several private firms such as Ashiana, Parsvnath, Omaxe, Piyush group etc are developing integrated townships and group housing projects along the Alwar-Bhiwadi Road, the nearest and most reasonable destination.Today the real estate developers are quite upbeat about the brand Bhiwadi. Says Vijay Mohan, Marketing Manager of Ashiana Group, “In 1992 when we launched our group housing scheme, we had to sell Bhiwadi first and then our product but today, from the marketing point of view, it is much easier for us to sell because Bhiwadi is gaining fame and we are established as a brand in this locality. In 1992, people who had purchased flats from us for Rs 800/sq.ft. are today reselling them for Rs 2600/sq.ft. The three BHK villas that sold for fifteen lakhs rupees in 2003 today the same villas cost around sixty to seventy lakhs rupees.”
Explaining the reason for sudden real estate development in Bhiwadi,CEO of Infocus India, says, “Government’s plan to develop Mumbai-Delhi industrial corridor (Bhiwadi will fall under phase I) and the entry of several new multi-national companies in and around Bhiwadi have acted as catalysts.” He added, “In 2005, with the development of Gurgaon, Bhiwadi started gaining visibility. But the land, which used to cost twenty lakhs rupees per acre then, has jumped to one crore rupees per acre in 2007. In a year or two, it is sure to double.”

Real estate market in India is on the upswing while builders in India are rapidly investing in all the parts of the country. New constructions in this field are into an all-time growth. Indian property developers are buying plots in large number for construction of townships and residential complexes.
A study of the market trends for commercial property in India reveals a similar pattern of the rising rates and a closer look at the prevailing rates is necessary to get the best out of the property. Commercial properties in India are also on the rise with their flourishing constructions. Shopping malls, shops, big Corporate Offices, Movie Halls, Amusement and Recreational parks et al are in for investments by Real Estate Developers in India.
Huge number of properties is on sale in India, luxurious apartments, premium quality flats, independent homes, farm houses, penthouses, row houses – are some of the projects that are selling like hot cakes in residential property sector in India. Property developers in metropolitan cities are expanding their vision and investing in tier II cities like Pune, Surat, Coimbatore, Cochin, and Vadodara.
Property developers in Lucknow, such as Ansals have invested here in a township, Sushant City- Lucknow, which they name as “shaan of Awadh” or Awadh’s pride. Builders in Chandigarh like Axiom Estates are coming up with projects in residential sector. Real estate builders in Ludhiana are investing in residential as well as commercial complexes.
Builders in Hyderabad like Modi Builders are coming up with number of residential projects such as The Gardenia, The Golden Palms, Palm Springs and The Silver Springs. Builders in Cochin for instance, Abad Builders, Trinity Builders & Developers and Gokulam Engineers are establishing themselves in real estate sector and their construction and investments are showing up to be fruitful.
With the kind of growing economy buying, selling, investing and renting properties in India is considered a lucrative option by the people world over. Moreover, an increase in the property rate in the real estate market, even in tier- II or tier – III cities of India, is showing an upswing trend in building and construction. According to real estate agents in India, this is indicative, at least on one level, of a clear interest of people in buying or selling of properties.

Higher rate of returns in real estate investments in India, projects that comply with international standards, greater affordability, apart from emotional reasons like ‘owning a piece of homeland’ were driving the NRI segment growth in the real estate sector in the India.

“Ma, is Chennai like New Jersey”, asks a little toddler in a catchy overseas promotional advertisement campaign launched by a leading real estate brand in India.

The campaign reflects the current market trend among developers to come up with special overseas promotional campaign aimed at targeting the NRI segment that were keen in ensuring that they invested in homes, that were close in design and amenities to those that they lived abroad.

Today with more and more Indians looking at returning home and relocating themselves given better employment opportunities in India, NRIs are now looking at investing in the real estate in the country with a view to make India their future homes.

Those who were making the transition from overseas to India, want to ensure that the transition is smooth, especially for their children, many of whom India would be a new living experience.

A lifestyle match is what these people are looking for when investing in property here.

While some preferred contemporary designs, others were searching for homes that were nostalgic and brought back memories of childhood or times spent in courtyard of a village, where just-rolled out papads lay toasting in the sun, or those ethnic porches where the family sat together enjoying the little ones tumble and roll at play.

Yatra Capital Ltd, the Euronext listed real estate company, has invested $7 million for a 40% stake in Jalan Intercontinental Hotels Pvt Ltd, a company that is building a two hundred room business hotel in Kolkata. The hotel will be supervised by Indian Hotel Ltd under the Taj Gateway brand.
The hotel will be built on a 1.9 acre plot situated at the junction of Rashbehari Connector and EM Bypass in Kolkata. EM Bypass is the main arterial road between old and new Kolkata, connecting Kolkata Airport and eastern parts of the city. The hotel will primarily cater to the requirements of IT/ITES companies located in and around the IT parks and SEZs coming up in the area.
Presently there are close to one thousand five hundred rooms in the premium category in Kolkata.
Occupancy levels have increased at an average rate of 15-18 % over the preceding few years with average annual occupancy levels hovering around 80 %, which is estimated to remain at the same level in the medium term. Almost 60-70 % of guests in the premium category hotels are business travelers.
This will be Yatra Capital’s 14th investment in the country, which includes two other investments in the hospitality sector. Yatra had invested Rs 63.44 crore for a 30 % stake in another firm Platinum Hospitality Services which will develop a hotel in Bangalore at an estimated cost of Rs 402.62 crore. Yatra Capital had also acquired one of the first India-focused property fund Eredene Capital Mauritius for Rs 99.39 crore in 2007.
Ajoy Veer Kapoor, Managing Director, Saffron Asset Advisors Private Ltd, said: “This is Yatra’s third hospitality project and is in line with our commitment to building a strong, diversified portfolio of quality assets. Our investments for Yatra have the potential to deliver across a variety of sectors and locations and we will continue to seek opportunities that will maximize shareholder returns.”

It’s now quite evident that real estate companies are in for some difficult times. CRISIL not only foresees a delay in many planned and ongoing projects, it believes several players are over-leveraged and that the combination of sluggish demand and rising costs will lead to a shakeout. In particular, residential complexes, funded largely by customer advances, have been severely hit by the slowdown in bookings, which means it will be a while before the projects are completed. So it’s going to be a long and painful wait for buyers who have paid up. Much of this pain could perhaps have been avoided if the government kept an eye on builders and subjected them to more scrutiny. Indian laws, it would appear, are far too lenient. In China, for instance, developers can pre-sell a residential property only when one-third or two-thirds of the construction is complete, depending on which province they’re in. It’s a far easier world out here where builders are free to pre-sell property even before they’ve started digging. Those who want to own a home of their own, and who doesn’t, often have little choice but to play along. Buyers also have very little idea about how their hard-earned money is being utilized by the developer. In China, we’re told, mortgage payments have to be utilised for a specific project. Maybe that’s the way it should be done here too; builders would then not be able to divert customer advances for other purposes. Because that’s precisely what some of them appear to have been doing. Overly ambitious developers have bid for land banks and are now scrambling for the money to settle the bills. Unless things take a turn for the better, these developers will probably not have the financial wherewithal to start building even if they get possession of the land. And neither will they be penalized for this. In China, a realty firm must develop the land acquired within a certain time frame, failing which the appreciation in the value of the land is taxed. Back home that’s not the case, so there’s really no hurry to start any construction, the land can simply lie vacant. It’s a pity that this can happen in a country where there are so few houses and so many more people waiting for a home of their own.
Chinese developers hold relatively small land banks; brokerage CLSA estimates it would be sufficient for development over a 4-10 year period, depending on growth targets; in India developers are estimated to be holding on to land banks for anywhere between 8 and 15 years. To be fair, approvals in India do take much longer than they do in China because much of the land is agricultural land. But even then, companies appear to be in a hurry to pick up property. Given that there’s a downturn in the offing, they might just end up owing a lot of inventory at a time when prices are coming off. Most Indian property players are already so highly leveraged that few would be able to cash in on falling prices. The difference in the amount of debt that Indian and Chinese players have on their books is striking. The average gearing for listed Chinese developers, CLSA reckons, is 50-60% with only a couple of them at 100%. For companies back home, the average would be closer to 100% with a couple of firms indulging themselves beyond that. What’s more, some of them are not able to recover their money in time; receivables for Parsvanath rose by about 20% sequentially in the March 2008 quarter. The higher cost of money means the debt will continue to pile up.
As it is, it’s not easy to tell what kind of shape the finances of property firms are in. That’s because the percentage-of-completion method followed by companies means that sales and profits and recognized well before the entire project is completed. That just won’t do in China; revenues there flow into the books only after the project has been completed and the property handed over to the buyers. In that sense, investors in property stocks may want to note, Indian firms would seem to be less transparent than their Chinese peers.
That’s possibly because they can get away with it. As CLSA notes, in India property developers are “friends” of policy makers in India. On the contrary in China, while they may enjoy similar good relations with the provincial governments, the central government has been seen to be taking aggressive steps against the sector. Conditions in the real estate space in China today are pretty similar to those in India. Property markets there too have weakened and buyers are biding their time. A big difference, however, is that property prices in China are still considered affordable whereas back home even a modest home remains out of reach. That’s the main reason why there have been so few transactions. It’s time we changed some of the rules, home buyers deserve better.

In the midst of a general slow down in the Indian real estate market, TAIB Bank, a leading private bank based in Bahrain, has picked up a 26% stake in Anant Raj Projects for Rs 216 crore. The deal, one of the first Shari’ah-compliant transactions in the Indian real estate industry, puts the valuation of the subsidiary of New Delhi-based Anant Raj Industries (ARIL) at Rs 831 crore.

TAIB Bank has routed the investment through its real estate investment arm Acacia Real Estate. Anand Raj Projects plans to develop of 6,00,000 square feet of retail space which is expected to be operational by first half of 2009. The proceeds of the transaction will be invested in this project. DTZ India, the Indian subsidiary of DTZ Holdings, and International Property Consultant were the advisors to the transaction.

Confirming the development, ARIL executive director Amar Sarin said, “Though the real estate market is passing through a tough phase, the investors are still keen to invest in bankable projects. Our deal with Acacia reinforces the fact that in real estate and, especially, in retail sector, location still remains the fundamental value generator”.

India’s real estate market is experiencing a slow down. Developers are facing a cash crunch due to the slow down in sales as well as tight liquidity conditions. This has perhaps forced them to look at raising funds from PE investors.

Rajeev Bairathi, associate director, investment advisory, DTZ said, “This deal proves that despite prevailing market condition, investors are ready to pay a premium for participating in projects promoted by reputed developers with established track record, adequate experience and expertise in creating quality product”.

Global financial giant JP Morgan Chase is investing Rs 130 crore for 33% stake in an SPV of realty firm Alok Infrastructure, a wholly-owned subsidiary of Mumbai-based textile maker and retailer Alok Industries, according to banking sources.

Alok Infrastructure’s SPV, which is receiving the JP Morgan funding, will develop a realty project at a prime location in Mumbai. Alok Infra owns land at several prime locations in Mumbai, some of which it bought in high-profile transactions in the past one year. Alok Infrastructure had been in negotiations with some private equity players to offload equity in the main company.

A falling stock market and a sluggish realty sector of late has, however, brought down the valuation of realty firms forcing Alok Infra, as many other realty companies, to go for investment at the project or SPV level. Alok Infra may be looking at raising more funds through private equity route for its different projects.

The company’s biggest project under execution is the 180-acre textile SEZ at Silvassa in the union territory of Dadra & Nagar Haveli. The SEZ obtained the government’s formal approval last December. Parent Alok Industries plans to occupy one-fifth of the SEZ space for its textile and apparel units. The company is also in talks with other textile makers for space in the SEZ.

Earlier this year, Alok Infrastructure acquired 50% stake in Ashford Infotech, which would develop a million sq ft of space for Rs 400 crore. Ashford Infotech, now equally owned by Alok Infra and Ashford group, had earlier purchased a 6.92-acre plot from CEAT in a Mumbai suburb for Rs 130 crore.

Alok Industries reported a net sales of Rs 2159 crore and net profit of Rs 200 crore for the year 2007-08. Alok exports its range of textile products to as many as 58 countries, which contributes nearly half of the company’s sales. The company has been present across all textile segments, including spinning, weaving, knitting, fabric, garment and home textile.

Lately, the company has moved up the value chain and is increasingly strengthening its presence in retail in India as well the UK. The company retails its products under H&A brand name targeted towards the mass market. The retail division is being hived off as a separate wholly-owned subsidiary by the name Alok Homes and Apparel.

Delhi-based real estate developer and asset management company, Alpha G:Corp, key coalition associate in the pan-India conglomerate. G:Corp, has signed up a joint venture with property-owner in Punjab to conceptualize, design and develop the impressive Alpha One mega project in Amritsar. It will be spread over twenty five acres on G.T. Road. Alpha G:Corp was allotted the mega project status since it submitted the most superior development plan. The initial investment will be two hundred seventy crores rupees in the Ist phase and this is going to be a destination centre encompassing retail, entertainment, luxury hotel and stand-alone boutiques on a total space of 2 million sq. ft. The features in Phase 1 also include a two hundred room luxury boutique hotel under the brand name Ishta from the Ananda group of hotels, which alone will entail an investment of over one hundred crores rupees.

Credit crunch and economic uncertainty have taken their toll on the global property market, with transaction volumes falling by 46% in the first quarter, according to a property report.

Investment throughout Asia and other emerging markets continued to grow, as sales of major commercial properties globally totaled $154 billion (Dh565bn) in first quarter against $283bn of property that changed hands in first quarter of 2007, New York-based Real Capital Analytics said in its latest report.

Property sales figures for April and preliminary results for May show sales in Asia have started to weaken and drop in sales in the United States and Europe have become more severe.

The United Kingdom has led price declines with the United States following behind. Since September, the initial yield on acquisitions of commercial property has increased by more than 25 basis points in the Americas and by almost 40 basis points in Europe.

Cap rates in Asia have continued to fall, reflecting both the growing wave of capital and expected upside for its emerging markets.

Acquisition of land and development rights in Asia has totaled almost $29bn so far this year, making it the most popular target for investors.

Office properties in Europe are a distant second with just under $20bn of transactions, followed by offices in the Americas and Asia with each recording between $15bn and $16bn of transactions through April.

Developable land in Asia posted not only the greatest growth in transaction activity but also the largest gains in pricing in the first quarter. However, all other property types in Asia except apartments recorded gains in both volume and prices. Prices fell lower for all property types in Europe, but several did manage gains in volume. Conversely, no property types posted higher sales volume in the Americas although average prices in the industrial, retail and hotel sectors did increase modestly. Sellers in the United States in particular are opting not to sell at discounted prices, causing volume to plunge while prices for the few transactions that are successfully completed appear rather resilient. However, land prices in the US are falling quickly and have experienced the greatest decline in value so far this year.

Pune property market is one of the most active segments in Western India. Private property developers along with local property builders and civic authorities are pouring in more investments in the city.
Recently, Milestone Capital Advisors announced an investment of Rs300 crore for commercial real estate development in Pune. Milestone is a fund house and focuses on Tier I and II cities. Milestone chose to invest in Pune owing to its sporadic IT sector.
Market reports suggest that commercial property in Pune fetches about 20-25% returns on investment. This makes Pune a favorite destination of investors.
The residential property segment also does well there. These days, Pune builders are focusing on affordable houses. Prominent real estate builders like Kolte-Patil, Gera Properties have announced affordable housing project in the city. The plan is to build one-room set and two-room set accommodation that costs between Rs 10-15 lakh. These builders have outlined that the quality of construction will not be compromised, however these flats/apartments would not have elaborate lifestyle features.

Most real estate builders are now focusing on the bordering areas of Pune. The city centre commands very premium capital and rental values. Hence, most of the users look for affordable accommodation in suburban and bordering areas. And, property builders are trying to cash in on this sentiment on the property seekers. Property in localities like Kothrud, Vanwadi, Oundh are much in demand. These areas were once the extension of villages but are now the hub of property development.

Tech Mahindra announced a capex plan of Rs. 638 crore ($150 million) for next three years, 60% of which will go as investments in physical infrastructure such as buildings and real estate while 40% will be used for enhancing technology.

The company plans to open new centres in Belfast (Ireland), Milton Keynes (UK), Chandigarh and Kolkata.

Builders would face hefty fines if they do not set aside 15% space in their housing projects for the economically weaker sections (EWS). The ministry of housing has asked states to crack down on developers who violate EWS reservation. Repeated failure to implement the policy may also result in government taking back land allocated for such projects.

“It is UPA government’s policy to provide housing to the weaker sections of the society, and non-compliance will result in tough action from the government. Builders cannot go against the National Housing and Habitat Policy, which has made mandatory for them to set aside at least 10% for EWS construction,” a senior housing ministry official said.

According to the policy, at least 15% of land in housing projects or 20% floor area ratio (FAR), whichever is greater, has to be reserved for EWS/ LIG (low income group) housing. The Center has taken seriously to instances in states such as Karnataka, Delhi and UP where builders have flouted EWS norms. Therefore, it has directed states to enforce the reservation strictly.

According to officials, city municipal authorities would not permit developers to advertise their buildings or flats if the building plan does not have accommodation for poor. Apart from EWS allocation, necessary building bye-laws and lay-out clearances by registered architects have to be in place before the builders can advertise their properties.

Apart from pursuing the mandatory EWS housing, the ministry has also asked the finance ministry to direct nationalized banks to lend EWS families funds at lower rates to buy houses. The ministry has said the poor should be charged 5% below the prevalent market rate.

LIC Housing Finance, the mortgage arm of Life Insurance Corporation of India (LIC), is set to foray into the venture capital arena. It intends to start Rs 500 crore real estate funds by the end of this financial year.
LIC Housing Finance is reportedly scouting for a banking partner for raising capital and will soon approach SEBI to set up an asset management company. To invest in listed companies, companies usually register with SEBI.
Based on the response to the real estate fund, the company will decide on whether it will expand its presence in the venture capital space.
There are at least three major banks in the fray for a tie-up and a memorandum of understanding will be signed soon. While LIC Housing Finance would be the promoter of the real estate venture fund, LIC could also be one of the internal contributors of the fund.
LIC Managing Director Thomas Mathew said the insurer has no plans to directly enter the private equity or venture capital businesses.
The fund proposed by LIC Housing Finance will be used to finance real estate development and about fifty-sixty projects are likely to be funded over twelve to eighteen months.
A large number banks and finance companies have recently entered the venture capital space and the existing players are expanding their footprints.

City-based construction firm IVRCL Infrastructure and Projects has plans to sell its high-priced pieces of land, including the twenty five acre information technology special economic zone (SEZ) plot in Noida, and purchase low-cost property in the light of the downside in real estate business in the country.
“With the real estate being what it is now, our first priority is selling high-cost land and filling our land bank with low-cost lands. We will also go for low-cost housing,” Chairman and Managing Director of the four thousand two hundred crore rupees company, E Sudhir Reddy said.
IVRCL currently has one hundred twenty acres in Noida, about one thousand acres in Bangalore, four hundred acres in Pune and two hundred acres in Panvel (Navi Mumbai), besides large extent of land in Hyderabad, Nagpur and Visakhapatnam. The market value of these plots was estimated at over four thousand crore rupees.
On a pre-qualification basis, IVRCL has been allotted one hundred twenty acres in Noida a year-and-a-half- ago. This includes twenty five acres meant for setting up an IT SEZ. While the SEZ land was allotted at a rate of Rs 7.5 crore per acre, the remaining ninety five acres were allotted at about twelve crore rupees per acre. As the rules do not allow sale of SEZ land, IVRCL proposes to raise unfinished structures and dispose off the property.
“The cost of the shell construction will be two thousand rupees per square feet. I will transfer this built-up area to the purchaser at the same cost. However, I will get a premium on the land cost,” Reddy said adding that while the company purchased SEZ land for about seventeen thousand rupees per square meter, the minimum upset price fixed by the government for bidding in that area now stood at about twenty five thousand rupees per square metre.
Though the disposal of the SEZ property essentially means sale of constructed area, land cost will be added in the transaction. In view of the rising interest rates and increasing input costs, the company had also decided to go in for low-cost housing.
“We are currently building nine million square feet of low-cost houses spread over three thousand acres in different cities. The highest price we are charging is two thousand two hundred rupees per square feet,” he said.
According to Reddy, IVRCL is also planning to rope in about ten construction firms for setting up cement plants in different parts of the country for captive consumption. The idea is to put in about twenty five crore rupees each to raise about two hundred fifty crore rupees capital and seek funding from banks and private equity (PE) firms for setting up six cement plants.

It always comes to hear that time is now ripe to go to Tier2 and Tier3 cities for IT and ITES companies. Being part of a big city or Tier1 city and being an SME, we keep wondering too whether should we go or not and if yes is the time ripe and if so, can SEMs go first or it is the business of the large corporations such as a Infosys, or a Wipro or a TCS to setup the operations and the ecosystem first and then the SMEs to follow?

Shimoga is a small town around 300 k.m north of Bangalore and it is considered as Tier3 city (Mysore and Mangalore probably fits under Tier2 tag). There are many such towns and cities in different cities which are considered as potential Tier2 and tier3 destinations for IT/ITES. Infact Shimoga happens to be the home district of the current CM and there is lot of hope and aspirations of the local community for attracting many IT/ITES companies over there and infact there is already an ITES company operating for last couple of years.

There are lot of advantages – you are away from the hustle and bustle of big cities and being part of a quiet relatively unpolluted environment, lower living costs, no traffic jams for sure, better quality of family life etc but the biggest advantage will be the land/realty price and especially more attractive if government can provide (thru SEZ etc) very subsidized land. But then again lot of cons go with that – lack of availability of talent, even if local talent exists will be tougher to pull them from the lure of big cities, fewer schools to support the ecosystem, additional expenses (which is not an issue for BIG IT companies) of setting up of every infrastructure item that is required, the quality of life off-office hours, the schools, the shopping malls, the night life what most of the IT and the ITES crowd expect – all these will be missing, and more than finding talent, retaining the talent will be a bigger issue expect for those who are from that town and love to stay and work there. Then again the expenses of running a firm in big cities is becoming extremely tough and challenging with rising inflation, fuel costs, real estate costs, attrition rates, traffic chaos, ever reducing of the quality time spent with the family, and in general dissatisfaction towards the ever busy polluted city life. The issue has become a chicken-egg issue with waiting to see which one will happen first – the IT companies moving to Tier2/Tier3 or is it the ecosystem first and then IT companies more there. Still better big companies opening it up first on a big scale so that they can or have the potential to make others to create the needed ecosystem to start with them but the early advantage will be lost for SMEs and as the land/rental prices would have increased, stealing the lone big advantage one could have got.

Many companies are finding it very difficult to hire talent and still tougher to hold onto them. Today’s talent is in spite of all the deficiencies and cons, still sticking onto metro life style with shopping and entertainment in the weekend which is clearly lacking in the tier2/tier3 cities. A NASSCOM- Kearney assessment of 50 leading locations for IT-BPO sector has pointed out that a lack of recreational facilities was a handicap for the tier-II and III cities. But the study on `location road map for IT-BPO growth’, had predicted that the share of sectoral employment in the top seven locations will decline to around 60-75% over the next decade and that will subsequently result in the rise of tier II and tier III cities’. SM Doshi, partner A T Kearney India, said, “But that cannot be achieved by only installing physical infrastructure like power lines and mass-transport system in tier II and tier III cities. Efforts should also be made to create an ecosystem that comprises social infrastructure with the trappings of metropolitan life”.

The industry experts believe that the first mover advantage does no way help IT companies attract skilled employees to these locations. When an ITES employee was asked by his company to get ready for a stint in a Tier3 location he decided to hunt for a new job. There are currently over two million employment provided by India’s IT-BPO sector, and over 90 percent of which is captured by the seven leading cities of Bangalore, Mumbai, NCR, Hyderabad, Pune, Chennai and Kolkata. Less that 10% is relegated to tier2 and tier3 cities and a very low ratio indeed.
So do SMEs make the bold move and couple it with Government incentives and move also to Tier2 and Tier3 cities and to get that early mover advantage or wait until the Big ones move or there is a critical mass built and then move.

Summer is over but the temperature is still rising, particularly at the Philippine Real Estate Festival as it presents 24 gorgeous young women vying for the title of Miss Real Estate Philippines on July 25 at the SMX Mall of Asia.

The second annual beauty pageant intensely screened over 200 young women before coming up with the list of official candidates who will represent the country’s top real estate builders and developers.

In the process, these young women will immerse in all areas of the real estate industry. They have been busy with a crash course on the state of real estate, and with seminar-workshops that educate them on why real estate industry is a vital in Philippine economy.

During the press presentation of these real estate beauties at the Lancaster Suites in Mandaluyong City, the media had a closer look at each of the candidates as they strutted their stuff and flaunted their curves in skimpy yellow bikinis.

“Believe me, Miss Real Estate Philippines is more than just a beauty pageant. It’s beauty pageant for a cause. The winner will be the ambassadress of real estate industry in the Philippines. She will help and spearhead the outreach projects that will provide homes to the most disadvantage social sector,” PREF chairman Rosemarie Basa said.
Filipino-Australian Rose Cel Aguilar, last year’s winner, will relinquish her crown to the winner who will receive valuable prizes that include cash and a house and lot. She will also represent the country in the first-ever Miss Real Estate Asia pageant that will be held in November.

Miss Real Estate Philippines is just one of the components that anchors the 2008 Philippine Real Estate Festival. The rest of the activities will officially open on July 26.

This three-day spectacular event will commence with an exhibit that will bring together 150 of the country’s biggest and most trusted real estate development companies and projects, finance institutions, suppliers, contractors, and professionals.
Fiesta Pinoy, which serves as the official closing of the festival, will combine indoor games, contest, raffles, disco dancing, mini-parade, and a musical concert for the amusement and entertainment of exhibitors, patrons, and guests.

Donald Trump Jr., whose father built a multi-billion dollar fortune in real estate, plans to set up a fund of as much as $1 billion to buy property in India, betting on the nation’s economic growth.
New York-based Trump Organization Inc. also plans a residential and hotel project in Mumbai with a local partner to tap the growing wealth of middle- and higher-income Indians. The city is India’s biggest trading center for stocks, bonds, commodities, diamonds and gold, and home to some of the country’s largest companies including Reliance Industries Ltd. and State Bank of India.
Trump said, “Our entry has to be in Mumbai and that’s where everything is going on right now in terms of the high-end real estate”. Further he said, “That’s the place where one is going to achieve the highest prices per square foot. It sets the tone for all of the other future developments”.
India’s $912 billion economy grew an average 8.8% since 2004 and is forecast to expand as much as 8.5% in the year to March 31, according to the central bank.

Bullish about the Indian infrastructure sector, United Engineers Malaysia (UEM) Builders, the entirely owned subsidiary of Khazanah National Berhad, an investment division of the Malaysia government has showed keen awareness to invest in infrastructure projects for example expressways, real estate and bring in their expertise in waste management. UEM has already made investments of over three hundred crore rupees since its presence in India for the preceding eighteen years.
UEM has completed over seven hundred kilo meter of roads with an investment of over two thousand three hundred crore rupees in UP, Karnataka, Kerala, Bihar, West Bengal, Gujarat, Andhra Pradesh, Tamil Nadu and Maharashtra.
“The Indian market is very important for UEM as we see a enormous potential in this market. India is a key driver for UEM’s overall growth and we have always been devoted towards this market. The company is devoted to supporting India in building an sophisticated infrastructure, suited to its growing business and social requirements. India is one of the top three global markets for the group,” Tan See Yin, senior director, UEM International (East Asia) said.
PLUS Expressways Berhad, a subsidiary of UEM group, is aggressively participating in pre-qualification bids for NHDP-III and V. As Asia’s largest toll concessionaire, the company is keen to share its experience and expertise, and to play a significant part in India’s road infrastructure development, Yin said, who was in India to get a sense of the improvement of the company’s several initiatives said.
“The group has so far spent in more than three hundred crore rupees to build up its team and resources in India. India is a focus country for our international expansion and we are devoted to contributing in India ‘s infrastructure needs,” Yin said.
UEM presently has over ten branches and site offices in India, including presence in key cities such as Delhi, Mumbai, Bangalore, Chennai and Chandigarh.