DLF Township At Dankuni Fate Uncertain

The fate of the prestigious Rs 33,000-crore DLF township at Dankuni has become uncertain.

“The project will not be implemented if the Opposition party and landowners are not ready for it,” urban development minister Asok Bhattacharya said on Tuesday as Trinamool Congress chairperson Mamata Banerjee demanded that the state withdraw the acquisition notice.

The proposed township is one of the largest real estate projects in the country and the company has already shelled out Rs 270 crore to the government. Both residential and industrial, the township covering 4,840 acres is proposed to come up over 10 years.

“People are ready to sell land to those willing to purchase it directly, but not to the government. But we won’t take over or purchase land forcibly. If they are not ready, then the project will not happen. We will tell people this is how we tried, and this is why it did not work out,” the minister said.

Following the setback in the panchayat polls, the Left Front government has gone on record saying land acquisition for industry will not happen in areas where “people are not ready” for it. This has put the future of several township and industrial projects in the state in jeopardy. In fact, the deadline for completing land acquisition in Dankuni has been missed by six months.

Consent has come for only 200 acres and the government was forced to form a “procurement committee” with public representatives including those from the panchayat. It was decided the committee would talk to the people and take their consent before land is taken for the project.

The panchayat polls worsened the situation. CPM suffered heavy losses in the Dankuni area, losing eight gram panchayats to Trina-mool. As a result, the procurement panel will now have no panchayat pradhan from CPM.

“The base prices of land had been fixed. But now a new procurement committee will be formed in July. It is up to the committee to take a call,” the minister said, adding that it is yet to be decided if DLF will eventually try to directly purchase the land. The 200 acres for which consent has come “is in too remote an area and won’t do us any good”.

On her part, Mamata said: “Today, the government may say it is shelving the DLF project, but if the land acquisition notice is not formally withdrawn, it may later acquire land for some other project.”

Sudhir Sehgal, head of DLF Eastern Region said “It is a public-private partnership project, and we have signed an agreement. It is for the government to decide how the land will be taken over. As far as DLF is concerned, we are still committed to the project”.

 

Realty MFs Appears As New Opportunity For Retail Players

The Sebi’s recent decision to allow mutual fund firms to play in realty space has opened up a fresh avenue for individual investors. One month ago, Sebi had approved the inclusion of real estate and issued a set of guidelines. Prior to that, only high net-worth individuals were allowed to invest in realty directly.

Mr. Jai Mavani, executive director (head real estate), KPMG, said, “Now with realty brought under the MF guidelines, it will be much more transparent and regulated. It will encourage middle category investors to participate in the realty growth story with minimum investment”.

According to KPMG report, the timing is quite opportune as the real estate sector is currently experiencing strong winds from sub-prime bruised western markets, general fund crunch and a pause in the Indian IPO market. Allowing retail participation in real estate mutual funds will enhance liquidity and create a healthy secondary market for realty assets, observe industry analysts.

However, the Sebi guidelines come with certain restrictions. Shailesh Kanani, analyst (infrastructure & real estate), Angel Broking, said, “Since REMFs are allowed to invest only in fully constructed and ready-to-use realty assets, the investors’ ability to participate in significant price appreciation of these assets appears low”.

Slowdown And Falling Market Demolish Real Estate Stocks

The uncertainty in the capital market has hit realty stocks the hardest.

The BSE realty index is the worst performer this year, having shed 51% of its 52-week peak reached in January.

With increasing evidence of a slowdown in the realty sector, rising input costs and little chances of interest rate softening, experts feel realty stocks may see further dip in valuations.

The BSE benchmark index Sensex has shed 24% since January while power stocks, which had a fantastic rally before the January crash, have lost 42% of their 52-week peak. Other major losers include bank (41%), consumer durables (41%), capital goods (39%), PSU (39%) and oil and gas index (28%).

Centrum Capital research head Harendra Kumar says, “Realty and power stocks had run quite high in 2007, and that’s why when they started coming down, the fall was more pronounced”.

Further he said that investors were factoring in higher profits, but now with the sector in the throes of a slowdown, they are scaling down their expectations leading to fall in prices.

The country’s largest property firm DLF’s scrip lost 54% while Unitech shed 64% from its peak. The scrips of Delhi-based Parsvnath and Omaxe have lost 68% each since January.

Real estate sector is seeing a major slowdown in the sales volume in most markets of the country. The speculators have exited the market and Mumbai and NCR, the biggest real estate markets in the country, are seeing subdued sales.

In Gurgaon and Noida, which had seen prices almost treble in four years, sales are down 70%, leading to a price correction of 10-20%. Centrum’s Harendra Kumar says if the negative news-flow continues for the realty sector, the scrips may see a further dip.

Angel Broking research head Hitesh Agrawal said, “The scenario has changed since end-2007 when the consumers expected interest rates to soften. We are faced with such a high inflation rate that interest rates are unlikely to come down for 6-9 months”.

Mr. Agrawal said, “Rising steel and cement prices have increased the input cost for developers while credit has been tightening with banks becoming selective in lending”.

 

Realty Deals Get Buried In Pan-India Landslide

Over the last two years, land prices have shown a northward trend. Now, it’s time now for a realty check.

Record land auction at Mumbai’s Bandra-Kurla Complex– like the Rs 46,000 per square feet buy by Wadhwa Builders in November 2007 are passe. The last auction at BKC, by Jet Airways, has seen rates tumbling to Rs 32000, a drop of a whopping 30% in just about four months.

Year 2008 has already seen some setbacks in land prices across Mumbai, Pune, Bangalore, Chennai and Gurgaon. Most agree that land rates across cities are coming down and deal volumes have decreased. “There has been a visible downward trend in land auctions that started beginning of this year,” says Anuj Puri, chairman and country head, Jones Lang Lasalle(JLL).

Consultants like JLL claim that land prices at Thane’s Waghale Estate has come down from Rs 20 crore an acre about 6-9 months back for an industrial plot to Rs 15 crore, the asking price today.

Even at Turbhe and Nerul in Navi Mumbai, rates are down from Rs 18-20 crore an acre to Rs 15 crore. A deal for a housing society at BKC’s neighbouring Kalina was called off a while back as the Rs 30,000 per square feet price being quoted was too high.

In Pune, where landowners weren’t willing to negotiate on prices, there has been a 10-20% fall in prices in some areas. Like in most other locations, in Pune too, the number of deals has dropped considerably.

In many cases, landowners are sticking to their rates but negotiating in a different way. Mr. Praveen Kumar, associate director, land and consulting, JLL, said, “Land prices might not be down on the ground but the development structure has changed in the last few months. There are many more joint development agreements being signed between landowners and developers in Bangalore”.

Though there has been some upward movement in land rates near the new Bangalore airport, places like Whitefield, Bannerghatta Road and Hosur Road have seen a considerable drop in land prices.

According to a prominent real estate consultancy, which has tracked land rates in these areas, Bannerghatta Road has seen a drop of 25%, Whitefield has seen a drop of around 50% and Hosur Road has seen a dip of 10-12% over the last 6-8 months.

In Chennai, prices had gone beyond realistic levels, says a Chennai-based real estate consultant. He says that at Kelambakkam on OMR, land value is down from Rs 10 crore to Rs 7-8 crore an acre. Similarly, at Ambattur, land value is down from Rs 10 crore to Rs 6.5 crore an acre.

Further he added, “A lot of deals are on hold as a number of landlords are not willing to negotiate at the moment”. Over the next 6-8 months, the consultant expects a further drop of 10% in Chennai.

Even in Gurgaon, things have slowed. According to a consultant, deal volumes have come down considerably and like some other locations, more and more joint development agreements are taking places. The way things are going, the consultant expects a further 10-15% drop in land values in the next six months.

Overall, there is a feeling that prices are going to drop further. Mr. Puri stated, “If the market remains soft for another six months or so, there should be a further drop in land prices”.

 

India Loses Top Retail Position To Vietnam

After being three years on the top, India has finally lost its position as the most preferred destination among upcoming markets for retail investment, according to the 7th annual global retail development index (GRDI) by management consulting firm A.T. Kearney.

The GRDI ranks countries among the thirty emerging markets on the basis of their retail investment attractiveness.

Vietnam occupies pole position in 2008. The country’s leap from the fourth place in 2007 to the top spot this year was driven by strong GDP growth, changes in its regulatory structure favoring foreign investors and increase in consumer demand for modern retail concepts.

India, Russia and China —the top three countries in last year’s GRDI fell to 2nd, 3rd and 4tf places, respectively, in the 2008 GRDI.

While India, Russia and China remain important destinations, high real estate prices in big cities and growing competition have decreased the attractiveness compared with the last years and forced retailers to look for opportunities in Tier II and III cities.

“India continues to be a dominant force in AT Kearney’s annual GRDI report. While India has slipped to No. 2 this year, it continues to be a favored destination for global retailers. However, challenges such as skyrocketing real estate costs, a lack of good commercial property and complex regulations for foreign entry have caused the slide in ranking,” said Hemant Kalbag, principal (consumer industries and retail practice), AT Kearney India.

Vietnam’s twenty billion dollar retail market place is very small compared with India or China, but the absence of competition and an 8 %GDP growth make it an attractive opportunity for global retailers, says the report.

Moreover, the Vietnamese consumer is among the youngest in Asia, with seventy nine million below the age of 65. Moreover, the country’s consumer spending increased by more than 75 % between 2000 and 2007.

But all is not lost for India. The retail market opportunity here is larger than ever at $510 billion and spending patterns and consumer maturity are growing faster than what most retailers had forecast.

However, there are a few stumbling blocks that have emerged. Foreign players entering India today face stringent regulations, a clouded political atmosphere, soaring real estate costs and a fiercely competitive domestic retailer group, said the report.

 

Stars Are Selling Dream House

Bollywood celebrities don’t just peddle dreams but also dream homes. Real estate developers are now banking on the star power of the likes of Shah Rukh Khan, Amitabh Bachchan and Aishwarya Rai to endorse their projects.

Deepika Padukone is the latest to join these marquee names. Aspire Real Estate, a Dubai-based developer, has signed up the actress as its brand ambassador. “We are targeting India, and Deepika will add to our brand equity,” said an Aspire spokesperson.

The trend of celebrities – from tinsel town and outside – endorsing real estate projects started around two years ago.

So while big banner draws such as Shah Rukh, Aishwarya, Bachchan or even sarod maestro Amjad Ali Khan and his sons represent the likes of DLF, Sahara and Omaxe, a host of smaller developers too have started signing up celebrities to cut across the clutter.

Thus, Pune-based Brahma Developers uses actress Katrina Kaif to promote its SunCity project, Chandigarh-based LVL City has signed up cricketer Yuvraj Singh, Chadha Group has former cricketer Kapil Dev, AEZ group has actress Perizaad Zorabian while small screen star Shweta Tiwari of Kasauti Zindagi Ki fame was the brand ambassador for Gaursons Developers.

Omaxe executive director Vipin Agarwal says star endorsement was imperative in the highly competitive realty sector.

“The celebrity not only gives the product greater recognition among the target audience but also helps the brand to connect with the customer, thus increasing the brand acceptability,” said Agarwal.

“All real estate campaigns focus on similar amenities. The tag ‘world class amenities’ is now clichéd,” he said. “Stars help a project stand out in an overcrowded market.”

Also, developers feel that hiring a star can give a boost to the sale of residential projects, with the sector witnessing a slowdown of up to 25 % since January this year.

The trend is not restricted merely to big developers or the metros.

Kochi’s Jairaj Projects has roped in Malayalam film star Jayaram; SRK Constructions has singer Yesudas, cricketer Rahul Dravid endorses Skyline Housing, while another cricketer, S. Sreesanth, promotes the Kochi-based Mather Builders.

 

SMR Ltd Plans To Invest In Malaysia Cybercity

Mumbai-based Sunil Mantri Realty Ltd plans to invest about hundred million U.S. dollars to participate in the development of Bandar MSC Cyberport in Kulai, the first Multimedia Super Corridor (MSC) cybercity in Malaysian southern Johor state. This is for the first time that an Indian company is investing in malaysia cybercity. The company signed the MoU to jointly develop this more that one billion’s ringgit development.

MSC Cyberport chief executive officer Mr. Ganesh Kumar Bangah said, “The hundred million U.S. dollars investment from Sunil Mantri will be injected to develop Phase one of Bandar MSC Cyberport, covering a size of 13.2 ha. Work on the project is expected to start at the end of the year”.

Mr. Bangah said, “It will be a mixed development with residential, commercial and ICT spaces targeting the IT operations of MNCs, while developing local technology companies and technopreneurs.

State-Run Takes Realty Pills To Survive

State-run pharmaceutical corporations, struggling to survive competition with private sector companies, are now emerging in a new avatar as developers of commercial complexes and IT parks because of their massive land holdings.

The recently-revived Bengal Chemicals and Pharmaceuticals Ltd (BCPL) is building a 38-floor sky scraper at Worli in Mumbai overlooking the Arabian Sea. The new office complex at this two acre land in the heart of Mumbai will be ready in about 18 to 24 months.

The company intends to offer the space on a 99-year lease. Potential tenants have already pooled in money for the Rs 300-crore construction, it is understood. Public sector developer National Building and Construction Corporation (NBCC) is assisting BCPL in this venture.

Another state-run company, the Indian Drugs and Pharmaceuticals (IDPL), which is awaiting a revival package from the government is planning to leverage its vast real estate assets in Hyderabad, Rishikesh, Gurgaon and Chennai for developing large commercial facilities like software and biotech parks as well as educational institutions.

The ministry of chemicals and fertilizers is now seeking the approval of a group of ministers headed by defence minister A K Antony for this diversification.

IDPL has about 900 acres of land in Hyderabd, about 1,200 acres in Rishikesh, 80 acres in Gurgaon adjacent to Microsoft’s office and about 650 acres in Chennai, all at prime locations. These assets are considered worth about Rs 50,000 crore, which comes to about twice the turnover of the domestic retail pharmaceutical market.

The government does not want to sell these assets or divest its stake in the company. Instead, it wants to leverage these assets to create commercial complexes so that it would generate revenue without losing ownership.

These government-run pharma companies were making losses because they could not match the professionally-managed private sector companies’ swift decision-making and efficiency in marketing. Secondly, their focus is to provide medicines that are needed for the masses and not to produce high-end drugs that are outside price controls.

The real estate development ventures are likely to give them the much needed resources to meet their social objectives without seeking government assistance

Dubai-Based Real Estate Major Looks To India

Dubai-based real estate major Majid Al Futtaim (MAF) is likely to enter India for which it is in the process of identifying a local partner.

The country’s estimated 16 billion dollar realty sector, which has already attracted UAE-based players like Emmar, Limitless, Nakheel and SmartCity, has been identified by MAF as a ‘market to be in’.

The company is looking to tie up with a local player to build shopping malls, residential properties and other commercial spaces.

Majid Al Futtaim VP Business Development Younis Al Mulla told, “We are studying the Indian market and soon we are going to have a place in the country. India is the company’s target and we need to set up operations in the next one or two years,”

He said a team of senior company officials visited India in the month of March to evaluate various options and held talks with companies here.

“We are visiting India again in June to organise roadshows in major cities, including Bangalore, Delhi, Mumbai and also Goa,” he added.

Asked about the investments planned for India, Al Mulla said, “We do not know it yet as nothing has been finalised. We have not decided on that.” MAF also operates hypermarkets, in joint venture with the world’s second largest retailer Carrefour, in the Middle East, North Africa, Iran, Pakistan and other markets.

The company’s announcement comes at a time when, even Carrefour is likely to finalise its plan for India and announce its partnership with an Indian company. Indian real estate industry is currently pegged at about 16 billion US dollar and is estimated to post annual growth rate of 30 per cent to reach 60 billion dollar by 2010. The sector witnessed increased interest from several international developers, primarily from the Middle-East, South-East Asia and Europe.

MAF operates in spaces like real estate, retail, management of proprietary funds and has joint venture with some international companies to complement the existing businesses of the Group.

The primary focus for the MAF Properties is the development of shopping malls, hotels and mixed-use communities projects. The company operates seven shopping malls with a total retail area of 500,000 sqm in UAE, Egypt and Oman.

While, MAF Retail manages Majid Al Futtaim Hypermarkets, a joint venture company with the world’s second largest retailer Carrefour.

There are currently 26 hypermarkets in the Middle East. The Carrefour brand has expanded across the UAE and into Oman, Qatar, Saudi Arabia, Egypt, Jordan and Kuwait.

 

India Real Estate Infra Fund Looking For $100 mn Mop-up End June

MUMBAI: Mauritius-based India Real Estate Infrastructure Fund’s first round of fund raising exercise will come to an end by June by which it plans to mop up one hundred million dollar.

Launched in January, the fund targets a mop-up of two hundred fifty million dollar from across the world for private placements in Indian real estate companies. Balance one hundred million dollar will be raised in the following closures.

“We plan to invest the money in unlisted Indian real estate companies under the FDI guidelines. We prefer to have weightage of up to 50 % in every company so that we can have a ‘say’ in the management. It will help us to drive the policies in the right direction,” said Arun Goel, CEO of DHFL Venture Capital India Pvt. Ltd, which has been mandated to create an investment portfolio on behalf of the fund.

The fund will invest in real estate companies pursuing projects in residential, commercial and hospitality domains which also encompass SEZ, IT parks, hotel.

DHFL Venture has appointed Mumbai based Yen Management Consultants Pvt. Ltd as financial advisor.

The fund will consider factors like the number of development projects in hand, FDI compliance, local presence and growth plans and execution in choosing the company.

Explaining the investment rationale, Goel said, “an increasing population and flourishing services sector have resulted in a number of green field projects to build residential and office buildings. Further, rising cost of hotel accommodations across major cities in India has led to high demand for ones with reasonable rates.”

Besides EU based countries, the fund is getting good response from Japan, the UK, UAE, said Goel, who expects the fund to give 25 % internal rate of return.

“We are getting tremendous response from investors across the board but some of them are currently buying time. They are taking stock of the situation in India. However, they will soon get involved in a 2-3 months time,” revealed Sunil Shirole, managing director and CEO, Yen Management Consultants.

“We strongly believe in the fundamentals of the Indian economy and its prospects. So we have no doubt about the success of the fund,” added Goel, who did not rule out the possibility of a mutual fund by DHFL in two years.

Berggruen Will Invest 500 Million Dollar In India

Berggruen Hotels is scaling up its plans for India and proposes to set up 8-10 four-star hotels, adding to the investments it has already announced to develop budget hotels, service apartments and resorts under the Keys brand name.

The upscale hotels will be established over 4-5 years, taking the company’s total investment in India to Rs 2,100 crore. “We launched operations in India in 2007 with budget hotels as this was the ideal segment to enter. We are now finalizing the upscale concept to be launched here, and the model will be replicated in the international markets,” chief marketing officer Partha Chatterjee said.

Berggruen Hotels is backed by New York-based Berggruen Holdings, which manages the personal investments of billionaire hedge fund guru Nicholas Berggruen. The investment will comprise $200 million in equity while the rest will come from borrowings, Mr Chatterjee said.

Construction of seven budget hotels is under way and work at eight more locations will begin this year. Berggruen had announced in 2007 that it was setting up 38 budget hotels in the country at an investment of $100 million.

The first budget hotel will open in January, 2009, in Kerala’s capital Thiruvananthapuram, while the first four-star property is expected to be operational a year later at Valsao beach in Goa.

Berggruen has roped in leading Japanese architect Shigeru Ban for the four-star hotels. “We expect to have around 4,500 rooms under operation by 2011,” Mr Chatterjee said, forecasting a turnover of Rs 350 crore by then.

Berggruen Holdings’ other investments in India include an equipment rental company, a vocational education provider, a car rental company, real estate development deals and investments in the stock markets.

 

 

Pacific Star To Lure Additional Foreign Funds To Thailand

Pacific Star International (Thailand) plans to bring more foreign funds to invest in the Thai property market as assets here can generate high returns at double-digit rates.
“They are global financial institutions, banks and insurance companies, who aim high and are happy to invest here. Investing in Thai properties could produce an internal rate of return of 15%,” Daniel Ross vice-president for business development and direct investment said.
The parent company Pacific Star Group from Singapore now manages five property funds including the US$250-million Asian Real Estate Prime Development Fund, which was set up offshore to invest in property markets across Asia. The fund initially had a policy to allocate ten percent of total assets to Thailand.
Among the money poured in the Thai real estate market, some went to two joint ventures with SET-listed Asian Property Development (AP).
“We’re looking to raise more funds and expand the fund size to four hundred million dollar in a few months,” Mr Ross said.
Pacific Star International is now studying two or three possible deals, which would be settled within this year. It also plans more ventures with AP in the future if any interesting projects arise.
Mr Ross noted that the company was interested in developing new hospitality projects in prime destinations such as Samui and Phuket. Wealthy investors, particularly from the Middle East, are very interested in owning beachfront resort villas in the kingdom.
Pacific Star International is currently involved in four projects. Two are joint ventures with AP while the other two, Sathorn Gardens and Eight Thong Lor, are being developed on its own.
Urasate Navanugraha, the company’s assistant vice-president for asset development, said the four projects were progressing well. Sathorn Gardens has just finalized sales of hundred units in the first phase and 20% of ninety five units in the second phase have been reserved.
“We expect to sell out all units in the second phase by September. After that, we will decide what to do with the remaining one hundred fifty five units based on market situations,” he said.
The property company plans to stage road shows in Hong Kong, Singapore, Dubai and India over the next five months to promote Sathorn Gardens, two 41- storey condominium buildings. The average selling price is 100,000 baht per square metre.
The Eight Thong Lor mixed-used project launched presales of condominiums early this year with a 40% booking. The project would have 5,000 sq m of retail space, a serviced-apartment zone and residential condominiums. Construction is expected to be completed by the middle of next year.

Godrej Properties Files DHRP With SEBI

Godrej Properties Ltd, Real estate arm of the Godrej Group, declared that it has filed the Draft Red Herring Prospectus (DHRP) with SEBI for an IPO of approx seven million shares.

According to a company statement, the firm proposes an IPO of 9,429,750 equity shares of ten rupees each through 100% book building process to part finance this plan. ICICI Securities Ltd and Kotak Mahindra Capital Company Limited are the BRLMs for the Issue.

The company currently has real estate development projects in eleven cities in the country at various stages of development.

It has completed a total of 19 projects consisting 13 residential and 6 commercial project on 15th of this month.

Godrej Properties’ land reserves currently stands at 404 acres, which includes its ongoing projects and forthcoming projects.

Its promoter and parent company Godrej Industries Limited, currently holds 81.41% of the equity share capital of Godrej Properties.

Boulder Hills Golf And Country Club By Emaar MGF In Hyderabad

Emaar MGF Land Ltd, one of the leading real estate developers in the country has launched ‘Boulder Hills Golf & Country Club’- an integrated world class leisure and residential community in Hyderabad. The Rs 5,610-crore project will have residential, commercial and retail space, IT parks and special economic zones, luxury and boutique hotels. It will be constructed by Multiplex Construction India Pvt Ltd, a 50:50 joint venture company floated by Emaar MGF and Multiplex Ltd.
Talking at a press conference during the launch of the project here, W. R. Rattazi, chief executive officer of the company, said, “It is a landmark project for the company in south India.” This project, which is spread across five hundred thirty one acres of land, is south India’s first integrated world class leisure and residential community with an eighteen hole golf course. The one hundred ninety two acre golf course has been designed by Peter Harradine – a third generation golf course architect. It is a championship golf course.
“Plans are on to host the European PGA Men’s and Ladies events at the world class golf course,” he said.
In the first phase of the project, the company would be developing seven hundred three residential units with a mix of single and multi family units. It is likely to be ready within the next three years.
The project has already been well received in the market, so much so that the premium apartments and luxury villas that are being planned within the project have already been sold out, he added.
The company is presently doing eight different projects in the South. “Over the next few years, we plan to develop 31 million sq ft across ten locations in south India with a planned investment of three billion dollar. Already the company has a land bank of 1,500 acres in the south in places like Hyderabad, Tirupathi, Chennai, Coimbatore, Kochi, Mysore and Mangalore”, he said adding all over India, the company has a land holding of 13,000 acres.
In the next 4-5 years, Emaar MGF will spread its wings to 40 cities from 26 cities right now.

Rs 100 crores will be invested by Inox in east India

After putting up 24 multiplex screens across cities like Vadodara, Kolkata, Mumbai and Goa in the last 6 yrs, the company has been silently signing up properties in Burdwan Rajarhat, Panditya Road, Haldia, Howrah, Jessore Road Asansol and even Siliguri to throw open multiplexes.

The total investment is estimated to be over one hundred crores rupees. The move, which is part of the company’s overall plans to scale up its presence across the country, is expected to shore up the group’s overall business from the eastern sector.

Alok Tandon, COO, Inox Leisure, said, “Kolkata and eastern India as a whole is an integral part of the company’s strategy. Going forward, we will have at least 18 multiplexes with 67 screens from just five multiplexes in this part of the country.”

“The future appears to have more in store. Following the hub and spoke model, Inox is planning more multiplexes in multiple locations. These will include cities like Bangalore, Hyderabad, Nagpur, Goa, Mangalore and newer hubs across Navi Mumbai.” Tandon added.

Outlining the corporate strategy, Tandon said the company would be spreading out across three-four fresh locations every year for the next two-three years. By 2010, the company intends to have at least 68-70 multiplexes with some 260 screens. Each screen, on an average, will find an investment of Rs 2-2.5 crores being ploughed in. The investments cover aspects like projection and concessionaire equipment, interiors flooring and false ceiling.

The company is looking at all options to give shape to its expansion programme. “If we get land at attractive price and the financial are viable, we may purchase the property and develop it ourselves or go for lease. We are also open to more acquisitions in the near future if the opportunity comes,” he added.

Sometime ago, the company had acquired Calcutta Cine Pvt Ltd (CCPL), a joint venture between Bengal Ambuja Group & its associates and Consolidated Entertainment Pvt Ltd.

Meanwhile, Inox Leisure board will meet on June 09, to consider recommendation of dividend, for the financial year ended on March 31, 2008.

Mapletree Starts Third Property Project In China

Mapletree, a property investment unit of Singapore state-owned Temasek Holdings, announced on Monday that its private real estate fund, Mapletree India-China Fund (MIC Fund), is developing a property worth US$320 million in China’s Guangdong Province.
This is MIC Fund’s third investment in China after its investments in a residential and retail development in Xi’an and acquisition of an office building in Beijing.
The Guangdong project will be jointly funded by Mapletree India-China Fund and Guangzhou Southern-Donald Scientific Technology Co, which holds 80% and 20% stake in the project respectively.
The project, located in the Nanhai district of Foshan city, is expected to be completed in 5-8 years.

UK property investors look to India

As property prices continue their downward spiral in Britain, investors here are looking to India, which is increasingly seen as a hotspot due to rising real estate prices across the country.

Every week, leading mortgage lenders and estate agents publish figures of declining prices, higher number of houses on the market, fewer buyers and smaller numbers of new mortgages being advanced.

Except in several areas of London, property prices all over Britain have recorded at least a 2% drop in the last year due to the credit crunch.

The slowing of Britain’s property market has led to several individual and institutional investors looking to India and other international hotspots.

India is also seen as an attractive destination due to the Indian government’s recent decision to relax rules for foreign investment in the housing sector.

Several India-specific investment funds have been set up, while British citizens of Indian-origin are increasingly investing in places such as Gujarat, Gurgaon, Bangalore, Chandigarh, Pune and Jaipur.

The investors here are also courted by Indian builders and property agents who organize exhibitions in London, Manchester, Birmingham and Leicester.

In Birmingham, a seminar was organized yesterday by Navyroof.com, a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It offers potential investors advice on how they could benefit from investing in India’s thriving housing sector.

At the seminar, information was provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted were the areas likely to give the greatest capital appreciation on investment.

Realty Scrips Have A Long Way Ahead To Recovery

For all the talk about a slowdown in the economy, real estate prices in most parts of the country have not corrected as much as most prospective buyers would have liked them to. But, shares of most real estate companies are not finding any takers even after falling nearly 50% from their record highs in January this year.

This would suggest that the ongoing sell-off in real estate stocks is a good opportunity for bargain hunting. Yet, most brokerage houses are advising their clients against doing so, as they foresee testing times for the sector in the near term. In fact, many of them are recommending that existing investors cut their losses right away as they could be in for a long wait for share prices to come anywhere near their lofty highs.

The sharp rise in real estate prices, coupled with high borrowing costs has let to softening of demand. The slump in the stock market, too, has contributed to the trend as many investors were earlier routing their gains in share trading into real estate.
Industry experts feel that companies that have managed to buy land in Mumbai at reasonable rates could be good bets even in these turbulent times.

The flagbearers of the industry like DLF and Unitech have fallen around 50% from their peaks, while other names like Ansal Housing and Construction, Ajmera Realty & Infra India, Omaxe, Lok Housing and Construction, Parsvnath Developers have fallen nearly 60%. With outlook on the market as a whole being bearish, brokers expect realty stocks to slip further.
Most property developers in India were riding the wave of an unprecedented demand due to a combination of rising affluence, tax benefits for home owners and low interest rates. But, this fuelled speculative buying in the sector, causing property prices to soar to exorbitant levels.

Bandra Replacing South Mumbai As Property Hotspot

South Mumbai has always been the preferred home to Mumbai’s upper crust for years. But now with virtually no land to be had in the Island City, the elite are moving into the suburbs and Bandra seems to be the hot new destination.
Malabar Hill, home to the city’s elite and till now the most famous of addresses in South Mumbai, is facing serious competition from bandra, popularly known as the Queen of the suburbs.
And with many famous people moving in, it’s certainly living up to that name. The latest celebrity to move to Bandra is Sachin Tendulkar, who has bought an old Parsi Villa on Perry Cross Road for Rs 39 crore and he has many other famous people as his neighbours.
Shah Rukh Khan’s Mannat on Bandra Bandstand has virtually become a tourist spot just like Salman Khan’s Galaxy Apartments.
Also by the sea, is Abhishek Bachchan’s brand new home Naivedya on Carter Road while Aamir Khan’s has already been living for quite sometime now.  Even Saif Ali Khan has bought his new home in Bandra.
And with the hot shots living in Bandra, can the rest of the Bollywood brood be far behind?
Actor Aftab Shivdasani, a true blue townie in fact, has also recently succumbed to the Bandra bug.
Not just the entertainment industry, but business offices and consulates too are now moving to Bandra with great speed.
This, even as the current rate there continues to hover around Rs 22000 per square foot.
But top real estate agents say new buildings in Bandra are often fully booked even before construction is complete.
Real estate agent Prakash Jain says, “Bandra is a very, very popular destination and the kind of buildings that are coming up, the receptions with swimming polls, gymnasium and gardens etc., you don’t find in South Bombay now.”
So move over South Bombay, or Sobo as it’s fashionably called, Bandra is where the galaxy of stars has landed.

Airport Upgrade To Open Up Mega Retail Space

The Mumbai airport’s upgradation will open up a humungous 5.7 crore square feet or about 132 acres of real estate, exclusively for non-aeronautical purposes like retail, commercial and hospitality. The area is mainly around Sahar village, Kurla and Kalina.

According to a Cushman & Wakefield report on Airport Realty, the modernisation and upgradation of 47 airport projects across the country is expected to generate 78 million square feet (1,790 acres) for commercial purposes by 2015.

In Mumbai, about 28% (1.6 million square feet) of the 132 acres will be for retail, 50% or about 2.87 million square feet will be for hospitality and 22% (1.26 million square feet) will be reserved for office space. About 3,200 hotel rooms will come up in mainly five and four star hotels.

The Cushman & Wakefield report said nearly 50% of the estimated 78 million square feet of airport realty in India will be concentrated in just three cities of Mumbai, Bangalore and New Delhi. These three cities alone will receive about 14 million square feet of office space and about 10,200 hotel rooms. All over the country, roughly 27,525 hotel rooms will be generated from development of airports.

At a time when the global growth rate of the airport sector has been about 9% per annum, India has seen an average annual growth of 35% over a period of six years. Non-aeronautical revenues are expected to increase from 35% to 54% by 2015.

As airports have the advantage of 24-hour activity with very high people traffic, they are crucial locations for next generation retail and entertainment centers as well as business and hospitality zones.

Last year, a Mumbai developer was awarded the project to clear 276 acres of land under slums from around the Santa Cruz airport. A large chunk of this land will be freed for commercial and retail development.

Property Investors Look To India

As house prices in the West Midlands fall at double the UK average during the credit crunch, local property investors are looking to new markets for opportunities.

One of these markets is India, which is being tipped by many as an emerging property hot spot. Merrill Lynch has predicted a 700 % increase in the Indian property market by 2015.

A seminar at the Hotel Ibis in Birmingham city centre on Wednesday will provide a glimpse into the opportunities which could become available. The seminar, which begins at 7pm, is being hosted by Navyroof.com – a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It will offer potential investors advice on how they could benefit from investing in India’s thriving housing sector.
Information will be provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted will be the areas likely to give the greatest capital appreciation on investment.

India’s strong economic growth reflects the profound changes occurring in society. Over half of India’s current population is under 25, giving it the world’s largest population of workers and consumers by 2020.

Increased urbanization and modern young Indians preferring to live on their own means demand for housing has never been higher. Mortgage lending increased tenfold between 2000 and 2005 yet the ratio of mortgages to GDP remains low, a significant factor in the massive potential which could be available.

Navyroof.com managing director Andrew Fassnidge said: “The seminar will show both UK investors and Birmingham’s 55,000 non-resident Indians how easy, effective and profitable investing in India can be.

“All the economic indicators project a bright, sustainable future for India. In the last 2yrs alone, property prices in India increased by 70 %.”

Market analysts have said that investors looking to escape the slowdown of the US and Europe then the sub-continent could be their best option.

Around 300 million middle class people are expected to be living in India by 2010 – higher than the US – while economic growth is expected to grow by eight per cent until 2020.

Kult Infotech Launches Online Real Estate Bank

Realizing the huge potential of internet usage in India, Kult Infotech today launched its new online real estate bank– www.valuePROPS.com– which provides comprehensive resource for all real estate topics related to buying, selling and renting with expertise knowledge.

The website offered service of advanced search for preferred area, mapping via GoogleMaps for exactly identifying the selected destination, financial calculations, blogging space and other interesting features that help the user to walk through the entire process from buying and selling to the completion of transactions.

ValuePROPS.com would be the pioneers in launching, for the first time in India, ‘a multi lingual interface’ dedicated to its users with the best online experience. It would be available in Tamil, Telugu, Kannada and Hindi.

ValuePROPS.com provided easy access to about 5000 registered agents, facilitating the customers to buy and sell their property.

This interactive website ensured transparent dealings, revenue sharing model and above all scope for users to validate th data to help other prospective customers.

Currently, the service was dedicated to properties across the southern cities of Chennai, Bengaluru and Hyderabad and it had a vision to encompass the whole country in the future.

DoE Issues Show cause Notice In Foreigner’s Property Issue

Panaji, May 28: Directorate of Enforcement has initiated show-cause notices against the foreigners who have brought properties allegedly in the state violating of Foreign Exchange Management Act.

The notices issued directly to the parties and also through the state government has asked why their properties involved in the contravension of the FEMA should not be confiscated to the central government account in terms of Section 13 (2) of FEMA 1999.

All the respondents (foreigners) have to appear in person or through legal practitioner at DoEs Mumbai office at different dates as mentioned in the notice.

Goa, the erstwhile Portuguese colony, woke up to the grim reality of losing its large chunk of lands to the foreigners allegedly in violation of FEMA. The state government in their report presented on the floor of the house sighted 392 such cases and formed a high level Anupam Kishore committee to probe into the violations.

The committee, prima facie, had found violations in 298 cases, which were referred to Directorate of Enforcement and Reserve Bank of India.

UK and Russians topped the list of foreigners who had invested in properties in Goa, mostly by forming companies.

Mr. Anil Kumar Singh,DoE’s assistant director, said,”Those cases where investment is above Rs 1 crore will be heard by special director while below Rs 1 crore will be referred to deputy director”.

He said that after the show-cause notice, the parties will be given an opportunity to present the case with their documentations.

Mr. Singh further said that most of the cases, the properties are below Rs 1 crore as they were purchased during 2000-2001 when real estate was not booming.

The DoE which is investigating the case through the show-cause notices issued has asked the parties to reply within 30 days as to why adjudication proceedings as contemplated under FEMA.

While the authorities, for past two years have been probing this huge chunk of cases, the DoE had to route some of the show-cause notices through Goa government as some addresses were not traceable.

Additional collector Swapnil Naik said, “We served the notices taking help of panchayat-level officers like talathis” .

The legal experts, however, feel that the property these property purchases are not in violation of FEMA.

Mr. Vikram Varma, a lawyer, who will be defending almost six cases of Britons, Russians and Italians before DoE, said, “Section 7 of FEMA mentions that nationals from Pakistan, Bangladesh, Sri Lanka, Afganisthan, China, Iran, Nepal or Bhutan cannot buy properties in India without prior permission of RBI”.

He said that union government has cleared 100% foreign direct investment (FDI) in tourism sector and Goa investments have come in that sector.

Mr. Varma said that as far as Goan properties are concerned, they are not agricultural properties. He further added, “They are either old Portuguese houses, apartments or small bunglows, which already have no objection certificate from panchayats”.

The legal expert also said that the companies which are registered in Goa are Indian entities and cannot be termed as foreign.

 

 

Carrefour May Choose Parsvnath For India Foray

Carrefour, the world’s second largest retailer, is considering the franchise model to initially expand its presence in the country and may announce a local partner in four weeks.
The French retailer, which has held talks with as many as 50 domestic business houses including Mumbai-based Wadia group and Mukesh Ambani-led Reliance Industries and real estate companies, such as DLF, in the past five years, may choose Parsvnath, a New Delhi-based real estate company, as its partner.
Parsvnath has emerged as the strongest option for the franchise partnership. A person familiar with the development at Carrefour gave the same timeline for the announcements. Parsvnath has almost five million square feet of retail space under its belt and plans to increase it to six times in the next five years.
The retail giant’s negotiation with other domestic houses and companies failed as they wanted greater control over the business.
Carrefour is exploring the wholesale cash-and-carry format and front-end retailing options in the country. It has already formed Carrefour WC & C India and Carrefour India Master Franchise Company for the respective business formats.
Mr. Pradeep Jain, Carrefour’s chairman in India said, “We are likely to announce our retail partner in three to four weeks”.
Under current government guidelines, foreign direct investment is allowed in the wholesale cash and carry model but it is not allowed in the multi-brand retail stores. In single brand retail stores, it is limited up to 51%. However, multi-brand international retailers can operate through the franchise route where an Indian partner would own the operations.
Carrefour SA Chief Executive Officer Jose Luis Duran had said last month that it was worth investing in India before the limits on overseas companies’ ownership of local stores were lifted. The company was talking to potential Indian partners to start a wholesale business and may announce the winner in the coming “weeks or months”.
Mr. Somesh Dayal, marketing head for Carrefour India said, “We still haven’t zeroed in on a partner as it is all in the early stage”.
It is Carrefour India Master Franchise Company that would give its Indian partner the licence to do front-end retailing with using the French retailer’s brand name. Carrefour would also manage the whole-supply chain and provide the logistic support to the retail firm.

PE Money Coming In Full Flow Into Indian Realty

The private equity (PE) graph in India’s real estate sector is growing as high as its skyscrapers. The first five months of 2008 have PE commitments in Indian real estate companies surpassing the total PE investments committed in the whole of 2007, which is $3 billion.
Experts say PE funding in the second half of the year will be even more. This is a good time for PEs to invest as there is a liquidity crunch and valuations of many real estate players are down. PEs also expects a further lowering of valuations, somewhere in the tune of another 20%. Even as private equity money comes into the market, there are concerns among investors about the execution capabilities of many of developers.
The months since January haven’t been too conducive for the real estate market in India. Real estate stocks plummeted as the stock market crashed January onward. Many real estate players have been feeling the liquidity crunch and this is where private equity funds have an opportunity to cash in. This is a good time to close deals and scout for more at lower valuations.
Mr. Jagdeep Pahwa, India Investmetn Management director said that a lot of the deals that were closed this year may have started negotiations sometime last year. They closed a $150 million deal with Maytas Properties in February 2008 but the negotiations were on since the third quarter of last year. He further explains, “Earlier, people could tap debt as well as the public market, both of which have dried up today. PE is today more available versus the other two. Deals that are happening today have a higher component of preferred returns which offer a form of downside protection to the investor”.