Hyderabad-based real estate firm SatyaVani Projects and Consultants is in talks with European REITs to raise $150 million in private equity, which will form the bulk of the $190 million it plans to spend on projects in Hyderabad, Bangalore and Vishakhapatnam.

Company’s director Mr. P Surya Prakash said that besides private equity, SatyaVani Projects is looking at raising cash through a combination of internal accruals and private placement. He declined to name the potential investors.

A 5 million square feet medical tourism project in Hyderabad will be the biggest, costing $120 million and consisting of two hospitals, a health resort and service apartments.

In Bangalore, it will establish an eco resort and a housing project at an investment of $50 million. The company will spend another $20 million on residential projects in Vizag.

The closing down of more than 20 textile mills and 15 manufacturing units in the country in the last 6-12 months has led to creation of a surplus supply of industrial real estate. With more than 20,000 workers in the textile sector now jobless, demand for space around industrial belts has slowed down, and more supply is taking prices further south.

The rentals are down by 20-25 % in the industrial belts. It is estimated that more than 15 lakh sq ft of surplus area has been added in the market which is already depressed.

According to sources, with so much supply coming in and few takers, there are very few rental deals happening in the market. For the record, rentals in the Gurgaon industrial belt have come down to Rs 20-30 per sq ft per month from Rs 45-50. Similar is the situation in industrial belts in and around Surat, Tirupur, Kundli, Panipat and Coimbatore.
Says Rakesh Vaid, chairman, Apparel Export Promotion Council (AEPC): “A lot of garment exporters are downsizing their operations and international market slowdown has dented the demand. We are not in a healthy shape and the government is contemplating withdrawing some of the sops given to us at the time of dollar depreciation. Crude prices are on a record high. To add to it cotton is very expensive. Indonesia and China have a very healthy growth rate but we will have to revise our target downward for this year. All these factors are sure to create some problem for real estate also.”

Many in the industry feel that slowdown in real estate in this sector will have major impact overall as many people park their surplus cash in these properties.

Says Pawan Swamy, MD (markets), JLLM: “The impact on the industrial real estate market is definitely there. Many industries are shifting operations to less expensive and more incentivised zones when they can no longer benefit from the economies of scale at their original locations. They leave behind considerable packets of prime land for development. Textile units, for instance, necessarily occupy considerable areas, further enabled with key utilities such as water and electricity.”

These factors have also put a dent on the fresh supply of industrial real estate. Even new plots which are being developed are not finding any takers in the market. Many small developers who are into this kind of development are find tough to sell the built up plots.

Real Estate TV, a 24×7 TV channel committed to real estate and infrastructure, on 13th July said it is in talks with foremost direct-to-home operators, including Dish TV and TataSky, to beam its signals.
“We are at initial stages of negotiations with DishTV, TataSky and Reliance. Most likely by next week we will be finalizing our partner,” Real Estate TV CEO Prem Menon said.
“There are concerns to be sorted out over pricing among others with the DTH operators after which we will come to some conclusion,” he added.
The channel, initiated by Alliance Broadcasting, the media company of the Rs 4,400-crore Alliance Group, is accessible across the country through cable television. Menon said the company also has plans to venture into the overseas countries, including the US, the Middle East, Canada, Australia among others.
By February next year, the channel will be going into the overseas countries to cater to Indian population abroad, he added. In India, Real Estate TV has joined with cable service providers for example Hathway, InCable, Seven Star and Asianet.
Menon said the channel is aiming high net worth viewers in metros through its programmes including newest updates on all aspects of real estate, including infrastructure. Real Estate TV has lately appointed MQ Networks for undertaking its marketing and advertisement proceedings. As per the agreement signed between the two firms, MQ would look after sales promotion, marketing, media sales of the channel.

In what would be the first major fund infusion into the Emaar MGF Group after a failed IPO, one of its promoters, Dubai-based Emaar is learnt to be investing $150 million to pick 20-25% stake each in three real estate projects of Emaar MGF.

This would be separate from its equity contribution in the JV firm Emaar MGF. Emaar holds 41% in Emaar MGF while the domestic JV partner MGF Group has 56%. The remaining equity stake is with private equity (PE) firms and other investors.

The Dubai-based group will pick equity in separate special purpose vehicles (SPVs) which will develop two retail and one office property in Gurgaon and Mohali. The injection of funds is particularly significant for the company, as it has come at a time when raising funds has become extremely difficult for real estate firms.

Debt has become very expensive and is largely unavailable. Emaar MGF, which withdrew its Rs 7,000-crore IPO in February after having failed to elicit investors’ response due to poor market sentiments, is looking at stitching 2-3 private equity deals in the coming months to fund its commercial projects.

Most realty firms have been looking forward to private equity players to fund their projects. However, PE firms too have turned cautious now and are driving hard bargains in the changed circumstances. Unitech too has recently obtained $175 million equity funding from Lehman Brothers’ real estate fund to develop a commercial property in Mumbai.

Slackening demand has multiplied real estate companies’ woes, restricting their cash flows. India’s central bank, battling a double-digit inflation, has hiked interest rates, prompting potential home buyers to defer their purchases. The signs of a slowing economy and expectations of a further fall in property rates have led corporate and retailers to postpone their space booking.

Emaar MGF, which is currently present in 26 cities, has a number of projects across residential, commercial, retail and hospitality sectors. It recently launched Boulder Hills residential project in Hyderabad and an integrated township in Mohali. The company is also executing the 27.7 acre commonwealth games village project in Delhi.

The company plans to develop over 200 hotels over the next 7-9 years. It has two equal joint ventures with Accor and Premier Inn for its hospitality ventures.

Ansal Properties and Infrastructure Ltd, has launched an ambitious 2500-acre township project adjoining Greater Noida, in Uttar Pradesh. The company plans to invest Rs 26,800 crore over the next five years in developing this project.
The township, branded The Megapolis, is extendable to around nine thousand acres, which means that the company has an option of increasing the size of the township to that size.
If the company decides to extend the township, for which it needs government approvals, this would make it among the largest residential projects in India, after DLF Ltd’s proposed residential project, Bidadi Knowledge City on 9,178 acres of land at Bidadi between Bangalore and Mysore.
Other large proposed Indian townships include Ansal’s own 5,000-acre township in Lucknow, DLF’s five thousand acre township in Dankuni near Kolkata and Emaar MGF’s three thousand acre township in Mohali, on the outskirts of Chandigarh.
Most large townships are coming up in smaller cities because land is relatively cheaper there and companies are looking to set up manufacturing plants and offices tocut costs, thus providing potential residents.
The Megapolis, which has been approved by the Uttar Pradesh government, is about 3km from Greater Noida. Land for the project will be acquired directly from the farmers and the government. Ansal will have to acquire 75% of the land directly from farmers, while the rest would be acquired for them by the government.
The company has already bought around 300 acres of land, paying around Rs35-40 lakh for an acre.
P.N. Mishra, executive director, business development, Ansal, said, “Once we acquire 60% of the land for the project, the government will approve the site plan of the project”. Further he added, “we plan to develop the township on 2,500 acres of land for now, but eventually we will expand up to 9,000 acres”.
Ansal plans to fund the project through internal accruals, customer advances and by partnering with financial institutions. It has already partnered with HDFC Bank Ltd, which has picked up a 8% stake in the project.
HDFC has so far invested Rs 500 crore in the project though Ansal didn’t give the total value of the bank’s stake.
Mishra said “We have an arrangement with them (HDFC) according to which HDFC will be our equity partner throughout the project”.
Mishra said, “The investment that has come in now is mostly for funding land acquisition costs”. Ansal is starting on the township at a time when property sales, according to real estate brokers, have slowed by as much as 30% in Delhi’s suburbs of Noida, Greater Noida and Gurgaon. Speculators, who would buy property and sell it within a short period of time to make quick profits, have exited the market and as a consequence, Delhi’s suburbs are seeing slower sales. Ansal says that it is not worried about the slowdown. “Our customers are actual users and not speculative investors”. The company says that it has already sold 200 individual plots in the township.
According to Mishra, the township will have five natural lakes, a canal, sports facilities and an 18-hole golf course which would be designed by international golfer Nick Faldo. The township will have individual plots, villas, bungalows, multi-storeyed condominiums and group housing complexes. The size of houses will range from 1800 square feet to 4446 square feet.
While the company has not fixed a price for the built-up houses yet, the individual plots in the township have been priced at around thirteen hundred rupees per square feet.
Around 900 acres of the project has been set aside for residential development.
The Megapolis will also be an employment-oriented township with space for hi-tech industries, information technology and bio-tech firms. The township will also have convention centers, hotels, schools and colleges.
Ansal’s other township in Lucknow, Sushant Golf City was launched a year ago and much of the infrastructure for the project, such as roads, water and power supply, is ready and construction of the houses has started.

US-based real estate management, investment and development consortium, JNB Investments LLC, has forayed into the Indian hospitality market, with plans to set up 50 hotels in the country by 2015. The company will invest about Rs 2000 Crore in the development, which will be collected through internal accruals and other sources of funding.

JNB will develop properties in the five, four and three star segments. The first few properties will come up in Kochi, Bengaluru and New Delhi. The venture capitalist company is a strategic partner in the joint venture between Interstate Hotels & Resorts and JHM Hotels, for development in the Indian market. The joint venture called JHM Interstate Hotels India, will manage the group’s Indian development initiatives.

Talkint exclusively to Hospitality Biz, T J Barring, President, JNB Investment Company states, “We are aggressively considering hotel development in the tier two cities of India”. JNB is also considering expansion of its hospitality business at potential locations in Mumbai, Goa, Chennai, Amritsar, Calicut, Visakhapatnam and Jalandhar.

The role of facility management is ensuring that everything is available and operating properly for property occupants to do their work. The facility manager generally has the influence upon the quality of life within a facility.
In India, facility management saw its inception as a serious business in the early 1990s. Mr. Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj said, “It was being carried out before that, but primarily on an in-house basis and through petty contractors. This business sector has matured considerably now from the earlier days, when facility management was little more than simple manpower supply”.
Mr. Pankaj Kapoor, CEO, Real Estate Research Agency Liases Foras said that as ‘outsourced services’ become an integral part of the Indian Corporate lexicon, Facility Management has come in and occupied an important space. Further he added, “The role of facility management is ensuring that everything is available and operating properly for building occupants to do their work. The facility manager generally has the influence upon the quality of life within a facility”.
Anuj Puri said that there has been a huge demand for professional facility management by the booming IT and BPO industry, as well as other MNC sectors. Further he added, “This demand comes from the fact that such entities are in India for a specific purpose and wish to focus on their core areas.” Further he said that in such a scenario, outsourcing facility management to expert providers makes eminent sense in terms of time and resource saving. Moreover, multinationals, setting up shop in India requires local representation in terms of manpower procurement and management, and in terms of Indian property laws.
Some of the most advanced projects now offer Computer Aided Facilities Management, in which computers are used to automate the collection and maintenance of facilities management information.

After staying the construction of a shopping mall by the DLF in Chennai, the Madras High Court has ordered the real estate foremost to take away all temporary structures from the site. The First Bench, comprising Chief Justice A K Ganguly and Justice F M Ibrahim Kallifulah, gave the order on 11th July on a petition filed by an industrialist Rajiv Ray, seeking to restrain the DLF from constructing the mall at Ethiraj Salai in the city. The petitioner had submitted before the court that if the DLF was permitted to proceed with the mall’s construction, it would cause great adversity to the residents, who had been already facing lot of problems because of obstruction in the area.

The down ward trend of real estate market price is going down, the housing finance is facing a squeezed condition. Now the Banks have increased the contribution limit of the developers from 25% to 30%.
With the correction of prices in the real estate sector, commercial banks have become choosy in lending. They have become more cautious to finance to new residential and commercial real estate projects. Apart from increasing the housing finance rates, some of the banks have asked the real estate promoters to increase their share in project. This instruction is given to mitigate the associated risks associated with lending. The ongoing economic uncertainty and mounting inflation is likely to impact the immovable property prices. The impact is now visible in some metros.. The decline in real estate indicates tough times ahead for this industry. That is the reason why banks have already turned selective in taking up funding the new proposals.
The central bank has already declared the immovable property segment as a sensitive sector under its prudential norms. The sector is associated with higher risk weightage. Hence it has cautioned banks which have to set aside higher amount of capital for real estate exposure and has advised banks to closely monitor the housing finance rate .However, the apex bank made the point clear that there should not be a 100 % ban on extending housing finance to the existing clients. If the repayment pattern of the client is satisfactory, he should be offered housing finance at competitive rate.
In the current situation, Banks are also asking for higher contribution from the promoters and developers in a move to secure their position in the housing finance segment. They have made the contribution limit 30 %. It was 25% earlier. The State Bank of India has initiated the move. As the contribution limit is extended, the promoters will now have a higher stake in project completion and housing finance repayment. Keeping with the rising cost of loans and the need for additional capital for risky assets of real estate sector in mind, the banks have increased the housing loan interest rate.
All the real estate companies are now bound to pay prime lending rates (PLR) for their new projects. The PLRs in case of most public sector banks is in the band of 12.25 to 12.75 per cent. However, lending was done at a PLR below 10 per cent rate last year. The Indian banking system as a whole gave Rs. 53,897 crore to the real estate sector as housing finance. The year-on-year growth in credit disbursement is 26.7 % (Rs. 17,361 crore) compared to 79 % (Rs. 18,770 crore) in 2007. The growth in the commercial real estate loan segment remained high.
The Indian economy is now facing slowdown across segments. The immovable property market is definitely heading towards the next phase of consolidation. Liquidity crunch in this sector is beginning to drive many mid-sized and small real estate developers to op for small housing finance. Many of the developers of small and medium size are in the process of liquidating their land and incomplete projects by selling them to bigger developers or private equity players even at lower land valuations.
In real estate market, there is no alternative to credit. Land transactions have dried up due to the higher housing finance rate and squeezed credit scenario. The fund-raising capacity of developers has also changed and some have limited their expansion plans, in the squeezed situation. The smaller developers also fear that their project might get stuck due to unavailability of adequate funds. The bank credit had already dried up for small and medium size developers and they now fear rising interest rate will hamper their growth. In short the housing finance and housing finance rate in India are on the way of consolidation.

PBEL Property Development (India) Pvt. Ltd. is new name for indian real estate. It is a joint venture of Property and Building Corporation (PBC), Electra Real Estate (ERE) and Indian developer INCOR Infrastructure. Over the last couple of months PBEL has purchased property worth thousand crore rupees plus across various cities in India.

PBEL Property Development (India) Pvt Ltd has announced the launch of ‘PBEL CITY’ an environmental coexistent project at APPA junction, on outer ring road of the city. Within days of the announcement PBEL has booked unexpected numbers of dwellings, buyers being enthused by the competitive pricing and amenities, including the high focus on environment.

PBEL City is bringing in new technology with world class amenities like adequate traffic management where all drive ways are under ground and facilitating direct access to cellar parking. The whole project is designed with earthquake resistant technology. Every home comes with a modular kitchens & bedroom wardrobes. It has a facility of sports courts, state of the art club house and baby care to conference facilities, water treatment plants and much more.

Mr. Anand Reddy, Executive Director, PBEL, said, “We are offering this project to early birds at a very affordable price. It is literally a steal – nobody at present can offer this with our range of amenities. With professionals at helm of the activity this project comes with world class technology and facilities. I have no hesitation in stating that this is a perfect opportunity for many to invest in their dream home.”

The gloom over the realty sector is reflected in the stock prices of many companies. BSE Realty Index has been the worst performer so far in 2008, having shed more than 68.5% from its January peak. Analysts expect further erosion in valuations of realty stocks with the sector facing a slowdown, input costs rising, and little hopes of interest rates softening.

The sharp correction has led industry leader DLF to announce a buy-back as the management believes the current price does not reflect the intrinsic value of the shares. The company has earmarked eleven hundred crore rupees for the buyback at six hundred rupees per share.

Prabhudas Lilladher, brokerage, said, “Over the last few months, real estate developers have been caught in a vicious circle of sluggish demand and rising cost of capital. Availability of finance has been a problem with rising cost of debt and drying up of equity funding. There have been instances of developers borrowing at interest rates ranging between 24-36 % against 500% collaterals. The lack of liquidity is likely to impact deliveries, leading to project delays as well as postponement of new launches”.

According to Religare Securities, the realty market has witnessed a slowdown in registration volumes in a few cities on account of spike in property prices over the last six to eight months. Owing to this, most companies have fallen short of their sales targets for the quarter.

On a positive note, foreign direct investment flows witnessed a CAGR growth of 615% from financial year 2006 to financial year 2008.

Inflows in financial year 2008 stood at Rs 8,750 crore with the likes of Blackstone Group, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property Investors, Lee Kim Tah Holdings, Salim Group, Morgan Stanley and GE Commercial Finance Real Estate making an entry.

In a situation where availability of finance is a key concern, brokerages remain positive on companies with large cash balances and have their funding requirements in place, thus enabling them to complete projects on schedule as well as take advantage of declining land prices. However, their view on the overall sector remains cautious.

Religare estimates a 35.3% rise in DLF’s first quarter net profit from a year ago, while HDIL is expected to post a mere 4.1% rise in the same period compared to last year.

Religare sees Peninsula Land posting 26.5 % revenue growth for the June quarter from last year with EBITDA margin of 28.1%. On the other hand, Prabhudas Lilladher expects Peninsula Land’s revenue to grow 70% YoY with EBIDTA margin of 54%. The growth in revenue will largely be backed by commencement of construction at Peninsula Business Park, where 50% has been pre-sold.

With slowdown hitting the real estate sector, land/property deals appear to be falling like ninepins. The latest deal to come unstuck is one involving the K Raheja Universal group and Lupin.
According toSources the negotiations between the two parties for part of Lupin’s land at Boisar in Tarapur and Thane district has fallen through primarily because of the existing insecurity in the real estate market.
While officials from K Raheja Universal did not respond to a media query on the deal, Lupin’s spokesperson, replying to an email questionnaire, said: “Lupin is an innovation-led transnational pharmaceutical company with no interest in real estate.”
Incidentally, Lupin had some years ago sold its Bandra Talkies property to a real estate developer. An analyst with a foreign brokerage house covering the firm said Lupin had, at one time, large tracts of land. “The real estate market then crashed. Slowly over the years, Lupin managed to sell most of its properties. It could well be considering the same now,” he said. Lupin has entered the league of the top five Indian pharmaceutical firms. The company hopes to be a $1 billion company by the end of the current financial year.
It is not just Lupin alone which have to bear brunt of the real estate downturn. Other deals which have hit the dirt in the recent past include Orbit Corporation’s deal for a six hundred crore rupees property with Kotak Realty Fund and Citra Developers and Rs 676-crore bid for the 134 crore Pal-Peugeot land at Dombivli-Kalyan.

Five major realty companies including B L Kashyap and Sons are going to bid for developing a Rs 100-crore Five Star hotel in Bathinda, Punjab.

The other three companies which have shown interest in the project are Chalet Hotels Limited, Ashiana Homes and Spirit Global, informed an official of PIDB.

Punjab State Electricity Board (PSEB) through Punjab Infrastructure Development (PIDB) had intended to develop a five star hotel project in Bathinda under Public Private Partnership format on BOT (Build Operate Transfer) basis. IL&FS Infrastructure Development Corporation (IDC) is the project development advisor to Punjab government.

Proposed to be developed on 3.10 acres of land, the scope of the developer would include planning, designing, engineering, financing, construction, marketing, operation and management of hotel facility and recover the investment by earning revenues through various revenue streams.

The technical evaluations of the companies are expected to be complete in a week’s time. Thereafter they would be asked to submit their proposals in detail.

The real estate market is increasingly behaving like the stock market these days. Just like buyers on the Street are putting off their purchases in anticipation of the market falling further, a sluggish real estate market is prompting retailers to postpone expansion plans on hopes of lower rentals. Some are even renegotiating rates for retail space booked earlier.

Reliance Retail, which has expanded rapidly in the past two years since its launch, is learnt to be “biding time”. The company is not looking at booking new space for the next few months, by when it thinks retail rentals would have fallen to a reasonable level. Other retailers, including Arvind Brands, Vishal Megamart and the Wadhawan group, which runs Sabka Bazaar, Spinach and The Home Store, Wills Lifestyle and many others are also going slowly.

This, however, has no impact on retailers’ plans to open new stores in places where they have already booked space. J Suresh, CEO, Arvind Brands said, “There is a clear trend towards decline in retail rentals. We are in no hurry to book space. We are able to book new space at a lower rate and also renegotiate rates for properties that we booked earlier”.

Adds Wadhawan Food Retail director Gaurav Modwel: “It’s only prudent that we become selective. It’s a buyer’s market now. We are booking only those spaces, where we get it really cheap.” The rentals have fallen in some markets in the past few months by 10-20%. And the correction in rentals has made retailers hold back on their real estate decision.

Wills Lifestyle CEO Chitranjan Dar said, “The mad rush to expand is now over. We are more cautious now. The rentals must come down to a level where an average retailer can make money”.

Retail rentals have doubled in the past three years, eating away on average 22-24% of retailers’ revenues. Internationally, rentals comprise 7-8% of retailers’ revenues.

The euphoria led by a booming economy and new-found opportunity in retail had prompted retailers, old and new alike, to expand rapidly even at the risk of lower earnings. Several retailers blamed higher rentals for their lower earnings last year.

But a double-digit inflation and RBI’s monetary measures to slow down demand have made retailers cautious. And this increased sense of hesitation has spread across all segments of retail and product categories. The signs of tough times are already visible in the market, where retailers are being forced to offer unseasonal discounts to push sales.

Another significant development is varying retail rentals in the same micro-market. Cushman & Wakefield India director (retail) Rajneesh Mahajan said, “Earlier, most malls in the same micro-market had similar rentals. However, as they become operational, rentals have started to get aligned with revenues and footfalls, and, therefore, we are also seeing differential pricing within the same micro-market”.

According to latest report by global realty consultant CBRE office rentals in Gurgaon have declined by up to 8 % in the second quarter of 2008 owing to increase in supply and softening of demand for office space.
“Gurgaon market has undergone a 5-8 % correction in the office and IT rentals from their peak rates in the last quarter because of increased supply and softening of demand,” CB Richard Ellis said in its report on office rentals for the April-June quarter.
The common monthly rentals for office space in Gurgaon have declined to Rs 95 per sq ft in June from Rs 105 a sq ft in March, it added.
With considerable addition projected in supply of office space in Gurgaon, CBRE said the rentals are expected to remain under pressure over the next few quarters.
The report noted that MG Road, Golf Course Road and DLF Cyber City area in Gurgaon are preferred locations for office space leasing because of factors such as proximity to National Highway-8, accessibility to the Airport and being on route to the proposed Delhi metro.
About Noida, the consultant said it continued to be a viable option for cost conscious IT/ITeS companies due to increased availability of office space options at competitive pricing as well as the locations accessibility from East and South Delhi.
“In the recent quarters, the micro-market has been witnessing robust demand and increased leasing activity. This market trend is also evident from the Noida authority auction of a commercial plot measuring 95 acres which was bought for a record price of Rs 5,006 crore by BPTP,” CBRE viewed.

The famed Nano City project of Hotmail man Sabeer Bhatia, is all set to get a partner soon and that will be realtor Parsvnath Developers. As Sabeer arrives in India on July 10, final decisions will be taken about handing over 30-38% equity stake in the project to Parsvnath Developers.
A senior official of Nanocity Developers told FE, “Since Sabeer is arriving on July 10, final discussions about the deal will be held for 2-3 days. It will be decided only by the end of this week when to announce the pact. We are mulling over handing equity stake anywhere between 30-38% and negotiations are on about giving the development rights to Parsvnath.”
Nano City, which is proposed to come up in Raipur Rani in Haryana will be spread over 11,000 acres with about 23 villages falling under its purview.
The company plans to acquire about 5,000 acres in the first phase over 1.5 years with an investment of about Rs 1,500 crore.
Officials from Parsvnath Developers confirmed that the talks are going on but the negotiations have not reached their final level. “We are discussing the commercial possibilities and then modalities will be worked out. Land acquisition will also be a part of the deal,” the official informed FE.
Nano City project had got all the approvals by September 2007 but there has been a huge delay in the land acquisition process. And now with the new partner coming in the process will have to be started again amidst high prices of real estate in the area. Nano city officials told that the master plan for the project is ready and we plan to have golf courses, educational institutions, and research development companies from across the globe, MNCs etc.

The project is expected to attract world-class companies involved in the creation of Intellectual Property. It is viewed as a future hub for the companies operating in areas such as Software Development, Nano Sciences, Next generation Drug Discovery, Bio-Technology, Energy Research and Semiconductor Research.

The plans of India’s leading private sector company by market capitalization, Reliance Industries Ltd (RIL), to create special economic zones (SEZs) at Jhajjar and Gurgaon in Haryana give the impression to have run into problem over issues related to land acquisition, with land owners in the area demanding around three times the amount the company is prepared to pay because land prices have increased since late 2006, when the company made its offer.
“We require around 25,000 acres for our SEZs. While we are in possession of around 9,500 acres, the owners of the left behind land are demanding around one crore rupees per acre, which is above the notified rates (the rates fixed by the company) of approximately thirty eight lakh rupees per acre (including annuity). This is a huge problem for us,” said an RIL executive, who didn’t wish to be named because he is not authorized to speak to the media.SEZs are industrial enclaves that come with fiscal and other benefits. Companies wishing to set them up have to take an initial approval from the government, acquire the land, and then have the SEZ “notified”, which means the units based there are eligible for the fiscal benefits.
RIL had initially planned one SEZ at Jhajjar, but after the government capped the size of such zones at 12,500 acres, the company decided to create two nearby SEZs.
The company’s other SEZ at Raigad in Maharashtra has run into trouble over the rehabilitation and resettlement package announced.
The Haryana SEZs are expected to require an investment of Rs25,000 crore and have provisions for a cargo airport and a 2,000MW power plant.
The land acquisition rates offered by Reliance Haryana SEZ Ltd, the company formed by RIL to develop the SEZs, is twenty two lakh rupees per acre and thirty thousand rupees per acre as annuity for a period of 33 years, resulting in a total payout of thirty eight lakh rupees per acre.

SunTechnics India, a brand of the Conergy Group, a leading international supplier in the field of solar system integration, has completed the design and installation of India’s first green housing project facilitated with building-integrated solar power. The 58 kilowatt project was developed in partnership with the West Bengal Renewable Energy Development Agency (WBREDA) as an initiative in solar architecture for the Rabi Rashmi Abasan eco-friendly housing complex at New Town Kolkata.

The project, valued at approximately 600K Euros, consists of 26 photovoltaic systems comprising 464 units of Conergy C125W solar modules, which were individually customized in various geometric shapes to fit the roof profiles of each building. By converting sunlight into electricity, each system maximizes energy efficiency by generating clean energy for lighting and other domestic uses. The power will be fed into the public grid and facilitate electricity needs for 25 residential buildings and a community center.

“Using building-integrated photovoltaic (BIPV) elements, buildings can maximize their energy efficiency by saving 0.5 kilograms of carbon emissions for every kilowatt hour of solar power produced,” Rajesh Bhat, CEO of SunTechnics India explained. “Green buildings are thus highly advantageous for consumers and real estate developers in large capital cities. In addition to reaping the benefits of energy cost reductions, green buildings are also interesting architectural applications as they are highly distinctive and innovative.”

S P Gon Chowdhury, former director of WBREDA and Managing Director of the West Bengal Green Energy Development Corporation said, “Conergy has demonstrated a deep commitment to the Indian community and a great willingness to combat climate change through renewable energy technologies. These are values we share. We are extremely pleased to explore the benefits of solar architecture with Conergy in the landmark Rabi Rashmi Abasan housing complex, which we hope will inspire other green initiatives and projects in India.”

S K Bhattacharyay, Director-in-Charge of WBREDA added, “This is the first BIPV project in India using the net metering system of Power Transfer to Grid, implemented under the newly-formulated policy guidelines of the West Bengal State Electricity Regulatory Commission. Its innovative architecture is based on the solar passive concept – in which buildings are oriented to receive the southern breeze, while cavities of the walls are built with polyurethane foam insulations to keep extreme temperatures at bay.”

In India, Conergy has electrified over 250 remote villages with solar home and street lighting systems and also developed the world’s highest photovoltaic and wind hybrid system in the Himalayas. Elsewhere in the region, Conergy has also constructed two 1-megawatt solar parks in South Korea and is currently planning Australia’s largest wind farm at 1,000 megawatts in New South Wales, together with strategic partner Macquarie Capital.

National Buildings Construction Corporation Ltd (NBCC), a Government of India undertaking fully owned by the ministry of urban development, is in talks to develop real estate properties in Dubai in the UAE and Saudi Arabia, the company said.
If the deals go through, this would be the first time that a Government of India undertaking would develop realty projects abroad. The negotiations are in their final stages.
The company is talking to associates in these countries for buying land to develop properties through joint ventures with financial institutions or private equity investors. It has invited prequalification bids for joint development from financial institutions that have a minimum experience of three years in construction, especially in serviced apartments.
NBCC is planning to develop four- and five-star hotels and residential and commercial projects that include retail spaces. HR Dhawan, the general manager of the real estate arm of NBCC, told, “It is an open bid that will be closed in 30 days. The bids will show us the approximate pricing that we will receive and then we will put the reserve price. They will range from a minimum of Rs 100 crore to more than Rs 1,000 crore for each project.”
NBCC will also develop greenfield projects. In India, the company owns land in Kerala, Kochi, Thiruvananthapuram, Chennai, Guwahati, Siliguri, Mohali, Ludhiana and other places. It has significant land bank in south India, which is currently seeing the maximum construction activity in the country. NBCC’s biggest land pockets are in Chennai and Kochi, spread across 54 acre and 50 acre, respectively.
The largest central public sector unit in the Indian construction space, NBCC has a turnover of Rs 2,000 crore.

India’s largest real estate developer DLF has given a new definition to housing for economically weaker sections (EWS). A senior company executive recently proposed to urban development minister Jaipal Reddy—and was promptly snubbed—that servant quarters attached to high-end apartments be counted as the developer’s contribution towards EWS, according to a source in the government.

As per the proposed guidelines, a developer must build at least 35% of dwelling units or 15% of permissible FAR (ratio of developable space to total area available for a project), whichever is higher, for EWS in all group housing projects in Delhi.

As this would mean building cheap accommodation in posh colonies and losing out on revenue, DLF tried to float the ‘servant quarter’ proposal to get around this stipulation. The company has never been comfortable with the EWS quota.

This mindset, however, runs counter to the government’s efforts to ensure more dwelling space for members of economically weaker sections, who now find it impossible to buy a house in metros and suburbs. The realty boom of the past four years has seen housing prices climb three-fold in several markets.

In just a year, DLF’s net profit rose almost four times, from Rs 1,934 crore to Rs 7,856 crore in FY08. However, there has been little initiative by developers to cater to the needs of those who can’t afford expensive houses. Private developers have mostly confined themselves to high-end apartments, which offer fat margins.

Mahindra & Mahindra (M&M) has decided to go slow on its world city project in Bengal.
The conglomerate, with interests ranging from automobile and real estate to IT, financial services and infrastructure, had planned to invest Rs 4,000 crore in Bengal over the next few years to develop the 100-acre IT special economic zone (SEZ) and township.
M&M executive director Arun Nanda had met Bengal IT minister Debesh Das, chief secretary Amit Kiran Deb and tourism minister Manab Mukherjee in December 2007.
The world cities are integrated units which are divided into business and residential zones. They require anywhere between 100 acres and over 3,000 acres.
In Bengal, M&M looked beyond Calcutta to Kalyani and Siliguri for the township project. They have seen locations at Kalyani but thereafter there has been no response from them.
M&M, also known for developing destinations such as Munnar for tourism, is scouting for similar locations in the state. The company had also expressed interest in a hospitality project at New Town, Rajarhat.
The company’s IT arm, Tech Mahindra, is building the Bantala SEZ in over 12 acres and plans to employ 2,000 people in the first phase of 18 months.
M&M has also signed a memorandum of understanding with the West Bengal Tourism Development Corporation to provide consultancy to the state government for setting up eco-friendly infrastructure in the Sunderbans.

Hyderabad-based Totem Infrastructure Limited is looking to expand its portfolio by adding real estate to its group of operations. It plans to build Rs 200-crore multi-use apartments in about 10 acre close to the outer ring road here. The company presently is executing infrastructure works relating to irrigation, power, railways and roads.

Also, the company is looking to change its business model from cash contracts to long-term revenue channels like build, operate and transfer. Totem director and chief operating officer Abhijit Roy told the media.

In February the company had, raised $10 million (about Rs 40 crore) from Singapore-based private equity fund Aquarius Investment Advisors. It plans to utilize this money for growth plans, expanding to new locations and operations.

Right now, Totem has offices in Hyderabad, Delhi and Indore and new offices are being planned in Kolkata and Nagpur shortly. “We want real estate to account for at least 25 % of our portfolio,” Roy said.

Totem’s current order book stands at Rs 1,000 crore to be executed in two-and-a-half years. Most of the existing projects are cash contracts and hence the required investments are mobilized through advances and other means. To fund these, the company has also formed a consortium of banks with Union Bank of India as the lead bank. The company expects the order book to increase to Rs 2,500 crore for this financial year and in three years it plans to go public to raise funds for various projects.

Among the various projects, it is building about roads in Maharashtra, Uttar Pradesh and Karnataka on a BOT (build, operate, transfer) basis. It established its presence in central India recently by bagging the order for the III phase of the Omkareshwar Project Canal System from Sadbhav Engineering Limited for Rs 310 crore.

Totem is also executing an NTPC power project in Nagpur and constructing minor bridges, culverts and others for an internal railway line for expansion of the Bhilai power project for RITES, a government of India enterprise.

The Rs 150-crore company is now looking to forge a public-private partnership in a state project in Rajasthan and recently submitted a request for quotation (RFQ) in this regard.

Asia’s leading business space solutions provider Ascendas has emerged a front-runner for acquiring a 6.18 acre plot in Chennai for developing commercial space.

The land at Nandambakkam, near Chennai Trade Centre, belongs to Sravanna Properties, a subsidiary of a TVS group, managed by brothers Venu Srinivasan (CMD of TVS Motors) and Gopal Srinivasan (CMD of the new VC, TVS Capital Funds). The Singapore-based Ascendas has reportedly been short-listed by TVS along with a retail biggie, an educational institution and two parties from Mumbai and North.

As the first step for clinching the deal, TVS has signed a letter of intent with Ascendas. However, top sources on both sides declined to comment.

The deal has been hanging fire for quite some time and apparently TVS also hoped to realize a better value for the land in the event of State approving the second master plan for Chennai with higher floor space index (FSI).

Realtors have been anticipating relaxation in FSI to 2.5 from the current 1.5. Keeping this in view, TVS is said to have asked Ascendas to give two quotes, one with current FSI and another with a relaxed rule under the second master plan.

Ascendas is said to be doing a due diligence of the land. Sources in the know of the development said if the FSI is increased, then the deal would fetch Sravanna Properties about Rs 220 crore.

Sravanna Properties had fixed the upset price of the property at Rs 35 crore per acre. The company has been expecting a price realization of Rs 225 crore from the land. Originally, it was acquired by TVS-E in 1999 from ICL Foundries of India Cements for around Rs 10 crore.

A fresh lease agreement has to be drawn with the Defence authorities to handle the pathway problem, which has been hampering the deal progress. Currently, the road is maintained by TVS Electronics.

All the loose ends are likely to be tied up soon and the deal expected to fructify by August.

Home sales in India might have turned slow but sales to NRIs is on boom continuously. According to Jones Lang LaSalle Meghraj (JLLM), residential sales to NRIs have tripled over the last half year, from 3% to 10% of the total business.

Lodha Group senior Vice President R. Kartik said, “What would happen when one loses his job in the US? The downturn is scaring many NRIs who fear job cuts”. JLLM’s Raminder Grover said, “There is a renewed interest in selling abroad”.

Sobha Developers has viewed the share of NRI sales go up from five percent to ten percent of its sales. Sobha Developers Managing Director J. C. Sharma said, “In the last six months, we have been selling about twenty five thousand square feet a month to NRIs”.

Many NRIs have been planning of coming back to India and many of them are making safety investments. Over the last few months, Lodha has seen twenty-five percent rise in its sales to NRIs.

Many NRIs and Persons of Indian Origin (PIO) want to invest in India, both commercial and residential properties. NRIs and PIOs also plan to buy such properties as an investment, and rent them out to earn a secure income stream.
This article talks about various rules and restrictions related to such purchases. It also clarifies the concerns about taxation (capital gains and income tax), repatriation, etc.
The rules regarding purchase, rent and sale of immovable property by Non Resident Indians (NRIs) have been thoroughly simplified and liberalized in recent years.
Let’s have a look at the current regulations for NRIs regarding purchase, renting out and sale of residential / commercial property.
Purchase of Property:-
A Non Resident Indian (NRI) can buy a residential (apartment, house, etc) or a commercial (shop, office, go down, etc) property (but not farm land or a farm house or a plantation) without seeking any permission from the Reserve Bank of India (RBI).
But the NRI can not participate in any business activity in real estate.
No. Of Properties:-
There is no restriction on the number (or value) of properties that can be bought by NRIs.
Payment for purchases:-
The payment can be made using money remitted through banking channels, or using the funds from the NRE / FCNR / NRO accounts.
Permission from the Reserve Bank of India (RBI):-
No permission is needed by NRIs to buy a property in India.
Mortgage property to a bank / financial institution:-
An NRI can mortgage the property to a bank / financial institution to take a loan for funding the purchase.
Stamp duty / registration fee exemption:-
No stamp duty / registration fee freedom is available to NRIs.
Permanent Account Number (PAN):-
A PAN number is not mandatory for NRIs buying residential or commercial property.
Inheritance of property in India:-
NRIs can inherit a property in India.
Purchase going wrong:-
If the payment is made from an NRE / FCNR account, and the deal is canceled or there is no allotment of property, the refund amount can be repatriated by NRIs.