The RBI’s Realty Indices For Ahmedabad

Ahmedabad happens to be one of the 11 countries for which the reserve bank of India would prepare one index for commercial and one for residential properties. This is done to curtail speculations and expected realty bubble burst in the coming years. The RBI report on asset price monitoring system (ASMS) advised to formulate these indices two months back.

Reserve Bank of India, Kolkata
Photo by seaview99

Many different countries such as Canada, France, us refer to these indices for realty prices.

The report says, RBI should start compiling a realty index and update it every quarter. To begin with, the report has proposed Mumbai and Delhi where property prices have skyrocketed to record levels. After these cities RBI would add 10 other cities which include Greater Chandigarh, Hyderabad, Chennai, Bhubaneswar, Pune, Jaipur, Kolkata, Lucknow, Bangalore and Bhopal.

The real estate price index once devised would become the primary index that could be perused by investors to gauge the performance of companies that are listed in the realty sector. The index can also help the investor analyze how real estate is performed in comparison to stocks and bonds. It can also provide information on the risk involved in a particular investment and returns that can be achieved from it.

The ASMS report has defined the deficiencies this indices would help overcome.

Safexpress investing in 32 logistics parks

Safexpress will invest nearly Rs 600 crore in the next two years to launch 32 logistics parks to double its warehousing space to around ten million square feet.
According to Mr Vineet Kanaujia, GM, Marketing, Safexpress, The expansion will help the company reach revenue of around Rs 1,000 crore in the next two years from Rs 650 crore.
Nearly one third of the new investment will be in the South.
The company announced its new logistics park in Chennai at the Logistics 2009, a two-day seminar on logistics, organized by the CII Institute of Logistics.
It has invested Rs 35 crore in the 3.86 lakh square facility, located at Vanagaram on the NH-5.
The park enables loading and unloading of 134 vehicles simultaneously to ensure smooth and uninterrupted movement of goods, he said at the sidelines of the event.

Mumbai expects highest residential space demand

Mumbai is expected to see the highest demand for residential space of approximately 16.40 lakh units due to the large scale urbanization. The mid-scale and affordable housing in suburban and peripheral areas will be the focus of this demand. However, the demand for office space would be approximately 23.7 million square feet, which is lower than that in Bangalore, Chennai and NCR.

The demand for hospitality in Mumbai is expected to be strong at over 98,500 room-nights, by virtue of the fact that the city is regarded as the financial capital of India and therefore the volume of both domestic and foreign business travelers is expected to grow steadily. Demand for retail is expected to be 6.19 million square feet.
On the other hand, Pune is expected to see the highest compounded annual growth in retail demand at 51% due to the current favorable demographics. The total expected demand for retail in Pune is approximately 1.76 million square feet. Office demand in Pune is expected to be 21.7 million square feet.

Bangalore emerges as a clear preference for sectors like office and retail, while it comes a close third in the residential and hospitality segments . Bangalore is expected to see the highest demand for office space in 2009-2013 of approximately 34 million square feet.

El Forge to sell Chennai property

The Chennai-based El Forge Ltd is selling its land at Thuraipakkam for ten crore rupees as part of its restructuring plan. The company, which made a loss of Rs 18 crore last year on a turnover of Rs 87 crore, will make a substantial profit on the transaction.
Company officials do not want to disclose the profit figure, pending conclusion of the transaction. The transaction is likely to be concluded in October and as such, the profits will be reflected in the accounts of the third-quarter.
The plant and machinery at Thuraipakkam have been moved to Appur, where a new facility has come up at an investment of hundred crore rupees.
Mr K. V. Ramachandran, Vice-Chairman and Managing Director, said that the company is also shifting machinery from its leased facility in Gumidipoondi to Appur. It also has plant in Hosur. Across these plants, the company has an installed capacity is 21,600 tones a year.

Two million affordable houses required

Affordable housing is the only solution for the middle income indians. Most of the people are in search of affordable homes in metros particularly in delhi/ ncr, bangalore, chennai and pune. According to the report by Knight Frank Research Households with an annual income between Rs 3 lakh and Rs 10 lakh in Mumbai, NCR, Chennai, Bangalore, Hyderabad, Kolkata and Pune will need 1.65 billion square feet of space in coming couple of year. This trend may help developers to launch affordable house projects. But to make their projects more feasible, developers should think that their projects should not be in to far fringes area. It should be properly connected to the city and easy transportation should be available to the main places of the city specially the railway stations and airport.

Mumbai is most preferred property investment destination

The financial capital Mumbai now ranks as the most preferred destination for investing in properties, while Chennai has replaced Bangalore.

The survey, “Trend in residential space across top cities in the current scenario” ranked Mumbai as the most preferred destination to invest in property while in south, Chennai is in the first place for property investments, overtaking Bangalore.

Cities like Patna, Nasik, Tiruchirapalli and Madurai have also become choive destinations for property investments, the survey said.

It said 60 percent of respondents felt interest rates for home loan would come down further in the coming months, while 40 percent evinced interests on properties with an area between 500 to 1,000 square feet.

More than three thousand people from the metros and other cities, including Pune, Ahmedabad, Thane, Coimbatore, and Vadodara participated in the survey.

“Market sentiments are reviving and people are ready to invest. Based on our survey, more than 60 percent of customers are looking at buying residential properties in the next six months. They also have a hope that interest rates on home loans will soon come down”, Consim Info Founder and CEO Murugavel Janakiraman said.

DLF drops mall proposal

DLF has dropped its plans to develop a mall on upmarket Commander-in-Chief Road in Chennai due to the ongoing economic recession.

The company has now sought permission to develop the land as a premium residential project. DLF Southern Homes director KK Raman said, “We have completed the design process. We are awaiting approval to announce the launch of our residential project during October-November 2009”.

Sometime in 2005, DLF Commercial Developers acquired the 4.41-acre property from German major Mico Bosch for about Rs 138 cr and had intended to develop it as a retail-cum-office complex. Later, it revised the plans and applied for a multi-storeyed building status, hoping to develop the property as a mall.

Now, for the second time, the company is revamping its plans. It has approached the Chennai Metropolitan Development Authority to permit its reclassification so that the land can be developed as a residential project.

Delhi is the most expensive city

The national capital has become the most expensive city in the country for expatriates. Comparing with other metro cities, New Delhi is ahead of Mumbai, Bangalore and Chennai.
However, all Indian cities have witnessed a decline in their rankings in terms of cost of living this year with New Delhi falling to the 65th position from 55th place in last year’s survey, in the global list of 143 cities.
Further, Bangalore has dropped to 133rd rank from the 118th rank in last year’s survey, while Chennai is the cheapest Indian city at 135th rank falling from 117th position last year.
Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is a comprehensive cost of living survey and is used to help multinational companies and governments determine cost of living allowances for their expatriate employees.
Overall, a significant reshuffle of cities can be observed in this year’s ranking, mainly due to considerable currency fluctuations.

Realtors use technology to boost productivity

SALES slowdown, stagnating capital values and a need to manage resources better are pushing Indian realty firms to invest in technology that will help them achieve optimum productivity, information access and regulatory compliance.

End-to-end enterprise resource planning (ERP) solutions, that manage diverse projects across different locations, are slowly finding favour. ERP vendors are seeing increased enquiries pushing them to develop tailored solutions targeted at mid-market realty firms.

When Delhi realty firm RDS Projects’ standalone ERP deployment failed, it turned to a solution that provided efficient management of projects across locations and customers: Aurigo Brix. Similar was IDEB’s case, which used Aurigo’s product across realty projects in Southeast Asia and India.

Recently, global tech giant SAP said Maharashtra-based builder City Corporation has gone live on its ERP solutions to help accelerate business plans, such as building 50,000 houses across five townships in Pune including India’s first digital township, Amanora Park Town.

SAP has signed deals with Chennai-based True Value Homes and the Kolkata-headquartered Tantia Construction and also counts GMR Infra and HCC as its major clients.

From tech biggies to mid-market IT firms, everybody is gunning for a slice of this market. While Bangalore-based Sonata Software has launched SonnetCONSTRUCT, a specialised ERP solution for this vertical, Oracle India and HP have teamed up for a bundled offering — Oracle Accelerate Solution for HP ProLiant servers — that will help mid-size businesses across verticals sustain and grow operations.

While vertical-specific ERP figures are not available, the overall market is expected to top $250 million in 2009, growing at a CAGR of over 25.2% between 2004 and 2009.

The firm recently launched its fifth generation product, BRIX 2009, an industry add-on to Microsoft’s ERP solution suite, Dynamics AX and available through select partner channels in the US, Middle East and Africa.

PVP sells property to SRM

Hotel a Isla Grande
Courtesy: Seracat
PVP Ventures has sold its 90- ground prime property at Vadapalani in Chennai to education group SRM for Rs 140 crore. The property developed over 90 grounds with a built-up space of 3 lakh square feet. SRM University has chalked out big plans for making use of the office space. It is in the process of setting up its admissions office.
PVP Ventures has been on a property selling spree and the deal with SRM comes on the back of the sale of its theatre complex in the city’s suburbs and a hotel property in Ooty. The company is learnt to be selling its properties in an effort to focus on its core businesses of urban infrastructure and power generation.