Mysore city authorities have a proposal for farmers who own land in and around the city: Part with your plot for nothing and get 18% of it back after it is developed and potentially more valuable.
The Mysore Urban Development Authority (Muda) thinks it’s offering a good deal to farmers as it competes with private developers for land to build public housing in a city where property prices have doubled in 18 months. Whether the offer will find takers is in some doubt.
A. Rudrappa, joint director (planning) at Muda said, “The objective is to give back farmers 18% of their own land, after it is developed, so that they get to retain the asset”. Further he said, “It will also prevent them from being cheated by builders who often don’t pay them the entire amount.”
Muda has 1.5 lakh applications pending for public housing in Mysore, the largest city in Karnataka after Bangalore, the state capital and India’s Information Technology hub. The agency’s inability to pay market price for farmland has driven landowners to private developers and sent property valuations soaring.

The 18% land-back offer is based on the average cost estimation of developed and undeveloped land that showed farmers would benefit even if they get back less than one-fifth of their original holding, according to officials at the urban development department in Bangalore.

Developed land would include access to amenities such as electricity, water and sewerage, enhancing its potential for commercial development.

Sudarshan Rao, a Mysore property consultant who has brokered land deals said, “For many farmers, land is a liability and they want to sell it off quickly to repay debt or start some new business. They wouldn’t wait for a period of two-three years till the land gets developed and he gets partial ownership of it”.

According to farmers, land demand is huge. Farmers are not sure what kind of development will happen and what would they earn after selling their land.
Developers have bought up large parcels of agricultural land in areas such as Nanjungud Road, T Narsipur Road, Hunsur Road and HD Kote Road in and around the city, in the belief that Mysore was the next real estate market.

In the last one year, top developers such as Unitech Ltd, Emaar MGF Land Ltd, Sobha Developers Ltd, Nitesh Estates and Total Environment System have acquired land in and around Mysore. But while developers rushed in and property prices soared, little development has taken place. Most projects are yet to break ground in the city that is still waiting for its first shopping mall.

Developers say that they are waiting for an opportune time to launch their projects. said Nitesh Mani, chief executive officer of Nitesh Estates, which plans to develop an IT park in Mysore, “Though many developers have bought land, no one is jumping into development right away”. Further he said, “It is important to choose the right kind of project in Mysore.”

Praveen Kumar, associate director at property consultancy Jones Land LaSalle Meghraj said, “Selling the land to private developers at market value would be a better option for landowners because they don’t know what kind of development and infrastructure that would come up on that land once they get it back”.

Real estate developers see further slump in demand and price correction due to RBI’s move to raise interest rate. Caught between slow demand and rising cost of capital and construction, developers are deferring launch of new projects. Some even fear that ongoing projects may get delayed.

Indiabulls’ group spokesperson Gagan Banga said, “Interest rate hike has dampened the sentiment in the real estate market, which will result in further slowdown. We see 5-15% price correction in the real estate sector in the next few months depending on the project and its location”.

Real estate market has been under pressure for the past six months with sales declining by up to 70% in several markets and prices declining by up to 20% in overheated pockets like Gurgaon, Greater Noida, Ghaziabad and Kundli in the national capital region and some Mumbai suburbs.
Cushman & Wakefield South Asia MD Sanjay Verma said, “There is no alternative to credit. Land transactions have dried up due to developers’ inability to bring funds. The fund-raising plans of developers have also changed and some have limited their expansion plans”.
Some developers, especially smaller ones, also fear that their project might get stuck due to unavailability of funds. The bank credit had already dried up for small developers and they now fear rising interest rate will further increase their borrowing cost from NBFCs or private moneylenders. With homeloan rates, likely to go up, the advance money received from customers too will dry up forcing them to slow the pace of project execution.

Unitech general manager (corporate planning & strategy) R Nagraju, however, feels that high borrowing cost will have only a marginal impact on company’s margins. He pointed out that a bigger concern is slackening demand.

Mr. Nagraju said, “We can’t do anything about high interest rates, but we need to stimulate demand by adapting our products suited to the current market needs. This could mean cutting down on frills and making houses more affordable to the end user”.

Unitech plans to launch houses at Rs 40 lakh in Gurgaon and at even lower price points in smaller cities, which it thinks will find large number of buyers. Similarly, Ansal Properties and Infrastructure (API) is tweaking its plans to suit the changing demand scenario.

API CEO Anil Kumar said, “We plan to launch plotted development projects soon, which still have a good demand. Besides, we would focus on execution of projects rather than launching more housing projects”.

Kochi will soon get international status with the upcoming of hi-tech city project worth five thousand crore rupees. The Bangalore-based Shobha Developers have signed up a MoU with the state government for setting up this hi-tech city. Sobha Hi-Tech City will be an incorporated city with focal point on research and development, knowledge dissemination, information technology and pure and applied sciences. The city is situated close to the NH 47 bypass close to Maradu in Kochi. It will have seven million square feet of knowledge park, commercial space to provide business-friendly environment, hospitality and leisure projects, entertainment and amusement facilities, a marina and residential complexes. The project will be completed in 8yre and would produce seventy five thousand straight jobs.

ICICI fell 2.4% to 686 rupees, its lowest in almost two years. DLF declined 3.8% to the lowest since it began trading in July. The Bombay Stock Exchange’s Bankex Index lost 3.3%, and the real estate index shed 4%.
The Reserve Bank of India unexpectedly lifted interest rates the second time in two weeks and told lenders to keep more cash in reserve after the surge in crude-oil prices pushed inflation to a 13-year high. The central bank also signaled it will keep raising borrowing costs.
Sampath Kumar, an analyst at Goldman Sachs Group Inc., stated, “Banks could raise lending and deposit rates by 75 to 100 basis points in response to the policy announcement. Increase in lending rates would likely adversely affect market expectations on loan growth, net interest margins and asset quality”.
The Reserve Bank increased the repurchase rate by 0.5 percentage point to 8.5%, the biggest move since 2000, and adjusted the cash-reserve ratio by a similar margin to 8.75%.
Before yesterday’s move, the central bank had raised the repurchase rate eight times in the past two and half years and increased the cash reserve ratio seven times since December 2006 to slow money supply and cool inflation.
The central bank’s monetary tightening had already led to a 43% slump in the Bombay Stock Exchange’s bank index this year, and a 60% plunge in the real estate index, outpacing the 30% drop in the nation’s equity benchmark Sensitive Index.

SEZ developers in India will be able to get easier access to funds and at cheaper interest rates if the government goes ahead with a proposal to give infrastructure status to the sector. The commerce department has decided to make a strong case for grant of the status to SEZs with the Reserve Bank of India. Officials from the commerce department and the RBI are scheduled to meet soon to reach a decision on the issue.

Commerce secretary G K Pillai is scheduled to meet RBI deputy governor Usha Thorat shortly to discuss whether SEZs deserve to be included in the core sector.

Since half the area on which SEZs are built have to mandatory be part of the processing area which constitutes industrial infrastructure and a large part of the non-processing area is social and commercial infrastructure to support the processing area, the commerce department believes that the sector qualifies for infrastructure status.

Since SEZs are classified under the real estate sector, funds earmarked for real estate by banks are often exhausted and there is not enough funding available for SEZ projects. If given infrastructure status, SEZ developers would be eligible for funds earmarked for infrastructure projects. To top that, funds would also be cheaper as banks lend to the core sector at a 2% lower interest rate.

While initially, multi-product SEZs were allowed to have 35% processing area, under the revised guidelines all SEZs mandatory have to have processing activities in 50% of the total SEZ area. In the non-processing area there is infrastructure to support the processing area like power plants, sewage treatment plants, roads, hospitals and educational institutions.

According to figures furnished by the export promotion council of EOUs and SEZs, the exports from EOUs and SEZs in the last five years have gone up from Rs 33,647 crore to Rs 1,91,638 crore, showing a 5.7 times growth. Last year, exports from SEZs have gone up from Rs 34,787 crore to Rs 66,638 crore, showing a growth of 93%.

The SRS Group declared that it will be investing over thousand crore rupees in the next three years and also come out with its public issue by the end of the current financial year. It also disclosed its three upcoming projects, which are, eight hundred crore rupees five-star hotel in Haryana, an IT park and a multi-storey residential complex.

Addressing a press conference here, SRS Group Chairman Anil Jindal said that the Faridabad-based firm would invest five hundred crore rupees in the expansion of its retail business, Rs. 350 crore in setting up multiplex cinemas and Rs. 150 crore in the expansion of the food and beverage business.

Mr. Jindal said, “This investment outlay will be sourced from a mix of debt and equity, which includes an IPO by the end of current fiscal year”. Further he added that the company was building a five-star hotel at Faridabad in Haryana that would be spread in fifteen acres and include an entertainment zone. He said, “We will also be expanding our chain of multiplexes, the brand name SRS Cinemas. We currently operate five multiplexes in and around Delhi and also in Gorakhpur (U.P.) and plan to add fifty more screens by March 2009 and about 160 screens over the next three years”. Stating that the SRS Group’s focus would be on Tier-2 cities, Mr. Jindal said, “We plan to increase the number of our retail outlets under brand name ‘SRS Value Bazaar’ from thirty-five to hundred by the end of the current fiscal. We also plan to build and operate fifteen metro-based hyper markets.”

India received a massive $20.8 billion of foreign investment in energy, services, construction and real estate sectors during the last four financial years as high economic growth lured multinational companies to set up or expand operations. The services sector witnessed the biggest spurt in foreign direct investment (FDI) flows, from $444 million in 2004-05 to $6.61 billion in 2007-08. Real estate sector, which was opened up for foreign investors in 2004-05, saw FDI leapfrogging from nil to $2.17 billion in 2007-08.FDI inflows in the power sector were $967 million in 2007-08. The sector lagged in attracting foreign investments due to lack of clarity in government policy at both central and the state level. Now, with the firming up of the policy guiding setting up of ultra mega power plants, the sector is expected to attract more FDI.

The petroleum and natural gas sector witnessed FDI inflows of $113 million in 2004-05. The sector, however, attracted a significant chunk of investment of $1.42 billion last fiscal, thus becoming one of the most favored sectors.

FDI inflows in the construction sector also witnessed a huge jump from $151 million between 2005-06 and 2006-07 to more than $1 billion in 2007-08.

Inflows in computer software and hardware sector rose from $539 million in 2004-05 to $2.61 billion in 2006-07, but declined to $1.41 billion in 2007-08.

The telecom sector witnessed a rise in FDI inflows, from $125 million in 2004-05 to $1.26 billion in 2007-08. However, investments in the telecom and chemicals sectors saw a slump between 2005-06 and 2006-07. The automobile industry, metallurgical and chemicals sectors also witnessed a steady flow of foreign investments during the last four years.
Commerce and industry minister Kamal Nath said, “FDI is a means to supplement domestic investment for achieving higher level of economic development and providing opportunities for technological upgradation as well as access to global managerial skills and practices”.
The government has eased FDI norms for a host of sectors, but has kept areas such as retail, (except single-brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in transferable development rights out of the ambit of foreign investors. In the last FDI review, the government allowed 100% FDI in titanium mining, and maintenance, repair and overhauling facilities for aircraft.

With India allowing FDI up to 100% through the automatic route in many sectors, power, petroleum and natural gas, services, construction and real estate have attracted foreign investment worth $ 20.8 billion in the last four years. The services sector has witnessed the biggest spurt in FDI, from $ 444 million in 2004-05 to $6.61 billion in 2007-08 followed by real estate which saw FDI leapfrogging from zilch to $2.17 billion in 2007-08.

FDI inflow in the power sector was $967 million in 2007-08. The sector lagged slightly behind in attracting foreign investments due to lack of clarity in government policy at both central and the state level. Now, with the firming up of the policy guiding setting up of ultra mega power plants, the sector is expected to attract more FDI.

The petroleum and natural gas sector witnessed FDI inflows of $113 million in 2004-05. The sector, however, attracted a significant chunk of investment of $1.42 billion thus becoming one of the most favored sectors last fiscal.

FDI inflows in the construction sector also witnessed a huge jump from $151 million between 2005-06 and 2006-07 to more than $1billion in 2007-08.

While inflows in the computer software and hardware sector rose from $539 million in 2004-05 to $ 2.61 billion dollars in 2006-07, the inflows declined to $ 1.41 billion in 2007-08 showing a decline in growth. The telecom sector witnessed FDI inflows from $ 125 million in 2004-05 to $ 1.26 billion in 2007-08. However, investments in the telecom and chemicals sectors saw a slump between 2005-06 and 2006-07.

India’s automobile industry, metallurgical and chemicals sectors also witnessed a steady flow of foreign investments during the last four years. Commerce and industry minister Kamal Nath said “FDI is a means to supplement domestic investment for achieving higher level of economic development and providing opportunities for technological upgradation as well as access to global managerial skills and practices”.

The government has eased FDI norms for a host of sectors, but has kept areas such as retail, (except single brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in Transferable Development Rights (TDRs) out of the ambit of foreign investors.

In the last FDI review, the government allowed 100% FDI in sectors such as titanium mining, maintenance, repair and overhauling facilities for aircraft.

Now small towns will also have value malls. Mirroring its cinema infrastructure model, E-CITY Ventures, part of the Essel Group, is setting up forty-five value malls aggregating ten million square feet in emerging real estate cities.
Mr. Atul Goel, CEO, E-CITY Ventures, said, “For this project, we are looking at equity funding of Rs 450 crore”. Further he added, “Talks with private equity players are in advanced stages”.
As part of its retail real estate, this venture will create twenty million square feet in two formats. One is lifestyle format, which is Fun Republic, and another in the value format, which is yet to be named. Mr. Goel said,“We will roll out the value format once the funding is in place”. In the lifestyle format, four million square feet of retail space is already in place with Fun Republics operational in Ahmedabad, Delhi, Chandigarh and Mumbai. But Mr. Goel pointed that there has been a slump in real estate space for a variety of reasons. He pointed, “There were projects announced and not really taking off, at least some of them”. As for its cinema infrastructure, there are fifty Fun Cinemas in place and thirty-two will be added this year. In the value Talkie Town format, there are six screens.

Dubai-based ETA Star real estate firm plans to utilize its funds to develop 120 million square feet of land in India.

Dubai’s ETA Star Property Developers mulls a fund of $400 million via Islamic bonds to enter Asian markets as diverse as India and Laos. The real estate firm is planning to utilize its own funds to develop 120 million square feet of land in India, and enter other markets in Asia.
ETA Star Property’s executive director Abid Junaid said: “We’re talking to institutional investors to raise $250 million in a first tranche. ETA Star also wanted to raise $100 million to $150 million in Islamic bonds, or sukuk, as Sharia-compliant products are very much in demand in the Middle East.”

ETA Star is one of several Dubai-based real estate firms, including Emaar Properties and Nakheel, which have joined a wave of foreign investment in Indian property market since the country eased rules on inward investment in the realty industry in 2005.

NRI steel tycoon Lakshmi Mittal has bought his third major property for seventy million pounds in Kensington Palace Gardens, London’s most expensive street.
Mittal, whose fortune is estimated at twenty seven billion pounds, already owns two big homes in Kensington Palace Gardens where Princess Diana spent her last years.
The most recent purchase of the former embassy of the Philippines from Hedge fund tycoon Noam Gottesman came a month after Mittal bought Britain’s most luxurious house for one hundred seventeen million pounds on the street nicknamed “Billionaire’s Row”, ostensibly for his son Aditya and his family.
The seventy million pounds price tag for Mittal’s latest property is all the more amazing as the former Philippine Embassy is in need of modernization, the source said.
The 16,250 sq feet home is also not the biggest in the road but it looks on to Kensington Palace.
58-year-old Mittal, Britain’s richest man, himself lives in a home in Kensington Palace Gardens which he bought for fifty seven million pounds 4 years ago and is three times-bigger than his latest acquisition.
The Mittals have carried out considerable improvements to their main home which is perhaps the largest private house in central London after Buckingham palace.
Mittal is believed to have offered two hundred million pounds for a property owned by Foxtons founder Jon Hunt on the street.
In March 2008, Mittal was named as the world’s fourth wealthiest person by Forbes Magazine. His family owns forty four per cent of steel giant ArcelorMittal.

Indonesian company Lippo Group declared that it is not discouraged by a slump in Asian property markets and increasing financing costs, and decides to invest ten billion dollar on projects and acquisitions over the next half decade.
The group is aiming various kind of projects such as retail, residential, hospital and hotel projects, and also distressed property firms. It will allocate two-thirds of the funds to emerging markets like China and Indonesia, and the one-third in developed markets such as Hong Kong and Singapore.
Lippo Group President Mr. Stephen Riady said, “We are still very bullish about the market. This downturn is just part of the economic cycle, and a huge opportunity for us to expand in the next one or two years”.He said that the group is eager on rapidly modernizing Asian countries such as China and India, with their fast-growing middle-income earners eager for new homes and shopping malls.
Mr. Riady said, “Just 10% of China and India is a population of three hundred million, and that’s going to be a new middle-income market, and its equivalent to a whole United States”.
Further he said that Lippo is preparing to fund its growth mainly from internal resources such as the sale of non-core assets and listing of REITs, and will control loans from banks.

Frasers Hospitality, Asia’s 2nd largest serviced-apartment operator, said it’s in talks to set up private equity funds to invest in China, India and Southeast Asia after delaying its planned share sale.
The company, which expanded its portfolio eight fold to 3,287 apartment units in the past decade, is raising funds for new developments together with markets such as Vietnam and Indonesia, said Chief Executive Officer Choe Peng Sum.
“A lot of people are still interested in Vietnam,” Choe said in an interview in Singapore late yesterday. “We think China and India are a very good counter to what’s happening with subprime. There’s a slowdown, but there’s still gravitation to the emerging markets.”
Frasers Hospitality, a unit of Singapore’s Fraser & Neave Ltd., is raising funds as it seeks to more than double its portfolio to more than 8,000 apartments in the next 3-4 years. The company, which plans to add nine properties in 2008, said its share sale has been delayed by at least a year as the benchmark Straits Times Index fell 14 % this year.
The Singapore Company is turning to private-equity firms after they raised $163.5 billion in the first quater of 2008, the second-biggest quarter since London-based Private Equity Intelligence Ltd. started tracking the data in 2003. The money is coming from pension funds, endowments and sovereign funds even as a shortage of credit stopped most deal-making.
Ascott Group, a unit of CapitaLand Ltd., Southeast Asia’s biggest developer, is Asia’s largest with 15,000 serviced- residence units and another 6,000 under development. Singapore- based CapitaLand took the company private last year.

Bangalore-based real estate developer Vaishnavi Infrastructures has received an investment of $25 million from private equity investor Actis for its Rs 350 crore Bangalore project, an investment bank official said.

The proceeds of the investment will fund the construction and development of approximately 925,000 square feet of high-end residential and retail space at Yeshwantpur, a Bangalore suburb.

This is the first investment by Actis India Real Estate Fund, a $300 million fund sponsored by Actis.

“Actis has taken a significant minority stake in Vaishnavi’s Bangalore project as it is situated at the perfect location. With current realty market conditions private equity players prefer to invest in projects as they can get the right valuations,” T R Srinivas, director at o3 Capital told from his Bangalore office.

Srinivas added that, for further funding, Vaishnavi would take the “debt route” rather than sell more stake in the project.

With the current turmoil in the real estate market, it is becoming increasingly difficult for realtors to raise debt from banks. Industry experts believe many developers are paying interest of around 30% for new loans.

To address the problem, developers are hunting private equity investors to sell stake in their projects.

Recently, the New Delhi-based Unitech said it would sell a 50% stake in the first phase of its Mumbai project (near Bandra-Kurla complex) to Lehman Brothers for $175 million.

However, another Delhi-based developer Parsvnath Developers said it has no liquidity issues for its current project.

“I have Rs 300 crore in fixed deposits and over Rs 500 crore is unutilised and sanctioned debts available with us. I do not see any liquidity issues and am in a comfortable position,”
Parsvnath’s chairman Pradeep Jain said. He added that the average cost of the funding is around 12% for Parsvnath.

Maharaja Shree Umaid Mills is close to selling off its 22000 square yards of property in downtown Jaipur, which housed its registered office. According to market sources, property is fetching the company around Rs 200 crore. Mr L. N. Bangur, Chairman and Managing Director of the company, told that until the company received the consideration nothing could be divulged officially.

Market grapevine suggests that the payment is likely to be received shortly. The company has already got necessary approvals for shifting of headquarters to Kolkata. Mr Bangur said, “The next board meeting is likely to formally announce the decision”.

The company also has a big surplus property in Kota, which was earlier the location for one of its spinning unit, and now closed. This land, however, may not be available now for sale or development as it is subject of a legal dispute and the case is being heard in the Supreme Court. The area would also require a little time for large-scale real estate activity.

The stock finished on Monday at Rs 122, down over 3.17 %. But in terms of past one week’s movement, it still remained gainer by around 11%.

Leading property developers are pulling out of proposed deals with hospitality majors, including Royal Orchid Hotels and Ramada Worldwide, as cash flows in the real estate sector are slowing. Realtors are reconsidering plans to go into the hospitality sector.
Real estate developers with presence in National Capital Region (NCR), Bangalore, Chennai, Pune, among others, are opting out of four and five-star hotel projects. According to sources, a five-star hotel in Pune shelved its plans recently as its developer pulled out of the commitment.
“Developers are looking at realizing their money through any alternative resources and are thus in the exit mode,” Shivaram Malakala, executive director of Habitat Ventures, Bangalore says.
However, Wyndham Hotel Group International, which is promoting Royal Orchid Hotels and Ramada Worldwide, has denied any such development.
Says Sunil Mathur, director (international development), Indian Ocean Region, Wyndham Hotel Group, “All our projects are doing fine. They could be delayed by a month or two but none of them have been shelved.”
While Bangalore is said to have around ten such properties up for sale, NCR has over five properties. Last year, over twenty four-star hotels were slated for construction in Bangalore, of which six properties have begun operations.
According to a Mumbai-based hospitality consultant, the developers are facing cash crisis and have either put the property (unfinished buildings in some cases) on sale or have asked the hotel companies to find them partners who can invest in the venture.
Properties that were worth thirty crore rupees, for instance, are being sold at a discount of over Rs 25-50 lakh.
To be sure, players in the field believe that this slowdown could benefit the big players in the market and hoteliers will look to acquire land in areas where it was otherwise difficult for them to make purchases.
In 2007, over a dozen global chains, including the Hilton, Accor, Marriott International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn and InterContinental Hotels group, announced plans to set up over three hundred fifty five-star, four-star and budget hotels and fifty villas in India.
Most of these chains joined hands with real estate developers. The plans would roughly translate into sixty five thousand additional hotel rooms a quantum leap, considering that over the past decade the total number of hotel rooms in all categories only grew by 10 % to about ninety two thousand rooms.
The decelerate in the real state sector can, however, soften the occupancy rate of hotels in the metros and leisure destinations, say analysts.
The possession rate in metros at this time is between 75-80 %, which could go down to just about 70 % in the subsequent few months as the off-season will begin. “If the off season is weaker than usual, there could be a down grading of hospitality stocks,” said an analyst.

Real estate developer DLF will soon get around 5000 acres near Greater Noida at less than market rate under the Taj Expressway Industrial Development Authority’s (TEA) scheme. Jaypee group, too, has qualified for allotment of 2,500 acres, while Unitech and Punj Lloyd are in queue for 2,500 acres each.

TEA additional CEO C S Verma said that the authority will complete the process of acquisition of 7500 acres in a quarter, following which it will be allotted to DLF and Jaypee group. He said, “We are negotiating with farmers and should be able to finalize the acquisition rate in the first week of July. Once the rate is finalized, it wouldn’t take us long to acquire the land”.

TEA will transfer the land to realty developers at acquisition cost from the farmers, which is likely to be much cheaper than the market rate developers have been paying privately. The ability to buy large tract of land at a cheaper price without spending much time and energy in the process is what is driving realty players to TEA’s Special Development Zone scheme. As realty sector boomed in the past few years, land prices too surged and farmers became more demanding while negotiating a rate with developers.

Most importantly, with government shifting the onus of land acquisition on to the developers for the special economic zones (SEZ), the hardship in land acquisition increased manifold. Developers needed to acquire contiguous piece of land from farmers at market rate, which shifted the balance in favour of farmers. Therefore, developers had to commit more men, time and money in land acquisition making the entire project more expensive. DLF hasn’t yet been able to acquire the land for its 5000 acres multi-product SEZ in Haryana, according to a company spokesperson.

Unlike SEZ, special development zone does not offer any tax benefit, but offers land at a much cheaper rate and without much loss of time. SDZ scheme requires the developer to allocate 35% of its total land to a core activity, which could range from industrial activity to sport and institutional.

IT/ITeS will form DLF’s core activity, while Jaypee’s will be sport. Jaypee plans to build Formula One race course in its SDZ. Jaypee, which is building Taj Expressway, says its proposed SDZ has a synergy with company’s other projects. Jaypee has other real estate projects in Greater Noida and around the expressway and is also a contender for building the proposed airport at Jewar, 40 kilometer from Greater Noida.

According to consultants Jones Lang LaSalle, Property investment in Asia reached a record $121 billion in 2007 up 27 % from the previous year.

And while the credit crunch took its toll in Europe and North America in the second half of the year, pushing down global transaction value by 8 % from the second half of 2007, investment in Asia surged 22% in the last six months.

Data from Jones Lang LaSalle shows transaction volumes globally in the first five months of 2008 were 40% lower than in the same period last year, dragged down by weaker activity in Europe and the United States.

The realty index slipped 4.45% on inflationary concerns as realtors feared a rise in housing loan rates last week.  As the Bombay Stock Exchange benchmark plummeted to touch nearly nine-month low, the realty sector index suffered a loss of 250.79 points at 5383.81, after touching a low of 5349.80 points.

The downward march of the index was led by realty major DLF and housing financing firm Housing Development Finance Corp. DLF Ltd stocks fell by Rs 21.82 to Rs 456.35 and HDFC by Rs 53.35 at Rs 528.15.

Marketmen said with the rate of inflation touching a 13- year high of 11.05%, bankers and other lenders would be forced to raise interest rate on housing loans which would have a negative impact on real estate sales.

Meanwhile, shares of Akruti City declined nearly 8% to Rs 790.10 and Shobha Developers by Rs 25.75 at Rs 360.95. Also Indiabulls Real estate declined 5.91% to Rs 354.05.

Mr Akshay Jain, CEO, Land Solutions (India) told on 21st June that by the end of FY 08-09, Indian citizens are expected to invest Singapore dollar (SGD) One hundred fifty million in real estate in Singapore. Land Solutions (India) is the Indian counterpart of the Singapore based real estate developer Far East Organization.

According to Mr Jain Fifty out of one thousand seven hundred premium segment apartments, developed by Far East Organization, is estimated to be sold to Indian buyers by the end of this fiscal (08-09). Each one apartment will costs approximately SGD One million (Rs 31 million).
Mr. Jain further added, “Easy availability of housing loan, even up to 70% of property cost at a rate of 2.5% per annum is an additional advantage to the buyers who want to acquire property in Singapore.”

In the meantime, the CEO pointed out his company’s wish to set up a Special Economic Zone (SEZ) on two thousand seven hundred thirty four acres of land within a couple of years in Hyderabad. The SEZ will be set up at an initial priced of ten thousand crore rupees.

The project will be a joint venture between Land Solution (India) and a Dubai based property developing company.

Buoyed by an exciting real estate market, investors in Britain increasingly prefer India for investment looking for higher profits on the back of a slowdown in Britain’s realty market.
Navyroof.Com, a company that emphasizes investment prospects in the most upcoming areas of India to the UK investors, Managing Director A. Fassnidge said: “All the economic indicators project a bright, sustainable prospect for India”.
In the previous two years alone, property prices in India increased by 70 %.” India is also seen as an eye-catching destination because of the Indian government recently relaxing rules for foreign investment in the housing sector.
Merrill Lynch consultants have forecasted a 700 % increase in the Indian property market by 2015. Meanwhile, except in quite a few areas in London, property prices all over Britain have recorded at least a 2% drop in the previous year because of the credit crunch and a further fall in prices is predicted.
British citizens of Indian-origin are increasingly investing in places, for example Gujarat, Gurgaon, Bangalore, Chandigarh, Pune and Jaipur. In order to guide NRIs for purchasing property, Indian builders and property agents often organize exhibitions here.
The latest to organize exhibitions is the Housing Development Finance Corporation (HDFC), which would organize a two-day show called “India Homes Fair” here from June 28.
About 18 leading developers, including Ansal, Unitech, from India will showcase flats and villas at the event.
Renu Sud Karnad, joint managing Director of HDFC, said: “Home buying is a tedious process. As pioneers in housing finance, we have well understood this need and have thus organized this exclusive event to guide our NRI customers so that they take an informed decision.”

Private equity real estate firm, Red Fort Capital, is planning to invest Rs 3,500 crore in various real estate projects in the country.

“We will be investing Rs 3,500 crore in various real estate projects in different parts of the country during the next two-and-a half years,” the company’s Director, Parry Singh, said.

The company is in the process of raising this second international fund of Rs 3,500 crore and would close in the second-half of 2008, he said.

Currently, the company is investing from its first international fund of Rs 1,500 crore, raised in 2006 from institutional investors.

The company would develop the projects mainly in Tier I and II cities.

“We are open to opportunities. Mainly, we would focus on Tier I and II cities. However, we are open to develop projects in Tier III destinations as well,” he said.

Red Fort invests in development projects across all its stages such as land acquisition, development, sales and marketing and maintenance. It also invests in low-cost housing projects across the country.

Dehradun is the capital city of uttranchal. It is located amidst Himalayan ranges. That increases its beauty by many folds and delivers peace and tranquility to the residents. Currently real estate market in dehradun is pretty good with all top realtor firms entering the city. With top firms investing heavily in massive residential projects and IT projects.

Real estate properties of Dehradun have soared to a new high in last few months. Real estate of Dehradun is undergoing a redefining change, thanks to group housing projects and raising real estate prices. Commercial properties of Dehradun have seen a sea of change in last few years. Dehra Dun is now home to many multiplexes and many Cineplex.

Dehra Dun is also home to many prestigious institutes of India. Some of them are the Doon school, Indian military academy (IMA), St Thomas high school, Welhams Schools, Army Public School, CJM School, and many more. These premier institutions attract many students from all over the country. Because of migrant student community, local real estate is registering many searches.

In recent times commercial properties and housing properties have flourished and also increased in number. This is due entry of top builders and developers in to Dehradun real estate scene. Uttaranchal is newly formed state and as the Dehradun is it capital city; all efforts are being made by the state government to develop it in to industrial city. Major real estate players in Dehradun are GTM Builders and Promoters, Emaar-MFG Builders, Dehradun and Parsavnath Devlopers , Uttarnchal Devlopers , Mussorie Dehradun Devlopment Authority …etc. Because of rapid development, Dehra Dun is all set to become next BPO and IT/ITES hub. With many SEZ coming up in Dehradun , and with government policy of 100 % tax exemption for ten years from central exercise and also income tax exemption for next five years , housing and building companies are competing to develop undeveloped lands of Dehradun . Most of these home and housing companies are developing state of art technology parks, five star and three star hotels and entertainment resorts and theme parks. With all these construction projects set to become reality in next five years Dehradun are all set to set standards of infrastructure in the country.

The story of real estate at the moment is under scrutiny in major markets like the US and the UK but Asian real estate seems to be little affected. There is some sentimental pessimism however, again emanating from major markets about the global outlook or economy and real estate which is dampening investment in Asia.
At a recently concluded Asia-Europe meeting, finance ministers from 43 countries (which together represent 51% of global GDP and 62% of trade) concluded that Asia and Europe have been far more resilient than expected in the wake of global economic crisis. Asia has emerged as the fastest growing region. Similar sentiments have been conveyed in the World Bank’s latest report which highlights that nearly $1 trillion private capital has flown to developing countries. It indicates that Asia is not totally immune.
Slowdowns of economies like the US, UK, Euro-zone countries, and Japan would impact Asia (excluding Japan) through slowdown in international trade. However, strength of domestic demand would be able to offset these negatives to a large extent.

Real estate company JMD said on 19th June it has roped in property consultancy firm Cushman & Wakefield for an enterprise valuation, in line with its plans for a Rs 200-300 crore public issue in coming 4-6 months. JMD also hopes to raise a similar amount through private equity, for which it has already initiated discussions with 5-7 players, Mr Sunil Bedi, Managing Director of JMD, said.
“We have engaged Cushman & Wakefield to do our valuation, based on which we will decide on the quantum of equity to be offloaded. We are also talking to some private equity players and funds from US and Korea for raising up to Rs 300 crore within four months,” Mr Bedi pointed out.
He said Cushman & Wakefield’s report on the company’s valuation is expected in a fortnight. JMD hopes that getting listed would re-align the company’s debt/equity ratio and also strengthen its branding and visibility in the market.
JMD (formerly JMD Promoters) had earlier mulled a public issue about two years back but had put the plans on hold as the company wanted to strengthen its product portfolio. The volatility in the capital markets notwithstanding, the company now feels that investors are keen to invest in companies that have a strong brand, experience and product offering. “There is still a good market for companies that are delivering projects on time, and so we are hopeful of going public in the next six months’ time,” he claimed.
JMD, which initially dealt with marketing of projects on a commission basis, made its foray as a developer in 1997 with its first project ‘JMD Regent Square’ in Gurgaon with a built up area of 1.5 lakh sq ft, and is now executing projects covering commercial, residential, IT park, SEZ and hotels in Goa, Ludhiana, Panchkula, besides Gurgaon. The total area currently under construction is about 168 acres. At present, the bulk of its projects is in commercial space, close to 20 % in residential and the balance spread between IT parks and hospitality.
The company recently announced its plans for a luxury hotel in Gurgaon (Haryana) spread over 9,086 sq m involving a capital outlay of Rs 250 crore through its subsidiary company. It will construct 200 rooms and expects the property to be operational by December 2009.
“We plan to construct three-four hotel properties by 2011. These would be four star and five star hotels. In Gurgaon we are also planning a four star with 125 rooms, while another one will come up at the Chandigarh-Panchkula Road. We are also planning one hotel in Ludhiana,” Mr Bedi added.

It is now become essential to standardize real estate. Builders and developers are not averse to the idea of a regulator in the real estate sector.Credai president Mr. Kumar Gera said that developers want a regulator to discourage the dishonest players from entering the sector. Mr. Gera further said that Credai has made a number of representations to the government in this regard.

He said that formation of a regulatory body should not end up creating another layer of controls and licensing, which would endorse fraud.

Naredco President Mr. Rohtas Goel said that government should first draft a standard norm, with the consultation of real estate body. It should be adopted by all states. Mr. Goel said that in the era of competition, developers while selling their project promises a number of things to its buyers. But some times, he might not be able to deliver those things on time because of changes in the law or delay in getting permission In that situation, there are cases when customer refuse to pay to ask for damages.