Tag Archives: Real Estate Market

N.Y.’s Plaza Hotel to Get New Owner; Sahara India

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India based real estate corporate attained 75 % shares of New York’s Plaza Hotel. The India –centered real estate corporate Sahara India Pariwar bought the shares from El Ad US Holdings.

Sahara India Pariwar bought 75% – shares in New York’s Plaza Hotel at a value of $575 million from another real estate firm El Ad US Holdings.

New York’s Plaza Hotel has a rich history of having world renowned figures like Eleanor Roosevelt, Mark Twain, the Beatles and Groucho Marx as guests. New York’s Plaza Hotel is situated on 59th Street in close proximity to Manhattan Central Park. Continue reading →

Real Estate Booms around Schools of Reputation

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The value appreciation of real estate properties goes ups and downs along with the presence of any reputed schools in the area. The higher reputation the school has the higher value real estate property gets.

High reputed schools normally admit children into kindergarten on the basis of local address. As a rule such schools accept the children within a distance of three to five kilometers away from the school. So the people opt for homes which are close to such schools of reputation. Real estate builders realize the importance and act accordingly. Continue reading →

Gammon India Resorts to Divest Real Estate Assets

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The existing cash flows force Gammon India to monetize its real estate assets. Gammon India is the company which constructed ‘The Gateway of India’ in 1919.

Gammon India fell in trouble as the company ended in a financial loss in the 3rd quarter of the current year.  The company officials pointed to the higher financing costs as a main reason for the loss. The sales of the company went down. This  is said to be another reason for the loss. Continue reading →

Tough Real Estate Market Blocks AI’s Monetization Plan

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Air India’s plan to monetize vacant building is hit by existing tough market conditions. Civil Aviation Minister Mr. Ajit Singh said that the AI’s Plan is severely affected by the tough market conditions existing in the real estate.

The plan of Air India to lease vacant floors in Nariman Point headquarters is fronting tough market conditions. However Civil Aviation Minister Mr. Ajit Singh said that he is confident of working out the plan to monetize the real estate properties of AI.

Air India’s plan to monetize the real estate properties was meant to raise Rs.5, 000-Crore. The government owned National Carrier had expected to raise the fund by leasing or selling of real estate properties in Delhi and Mumbai. Continue reading →

SEBI charges Criminal Case against Sahara Group

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Capital Market Regulator – SEBI approached a local court, filing criminal charges against the Sahara Group which said that it was SEBI regulator who  refused to accept the documents of Sahara Group.

Capital Market Regulator – SEBI appealed for criminal proceedings against Sahara Group head Mr. Subrata Roy and other managing directors of the group. SEBI alleged that the group has violated some regulatory orders.

Earlier on August 31, Supreme Court had ordered India Real Estate Corporation and Sahara India Housing Corporation to refund Rs.17400-Crore.  The SC had been convinced that the prescribed amount was collected from about 3-Crore investors through Optionally Fully Convertible Debentures (OFCDs). These OFCDs offered 15% interest to the investors. Continue reading →

Real Estate Firm to Open Up Office in the UAE

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Indian real estate firm Indiabulls Ltd. aims at opening offices in the UAE.  The real estate group has declared the launch of their first overseas office in the United Arab Emirates region.

Indian real estate firm targets Indiabulls Real Estate Ltd. is all set to start their maiden overseas office in the UAE. The real estate firm has so far developed nearly 3.3 million sq. ft. of area at an estimated cost $1.75bn. The past four years witnessed a tremendous growth of the firm.

The company officials revealed that the company aims to help the UAE NRIs purchase and invest on real estate property wisely. The local representative office will boost their real estate investment in fact. Continue reading →

Cap Removal on Loans to Lift NRI Real Estate Investments

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Non-Resident Indians’ -NRIs, desire to invest more on real estate properties, has been further boosted by the Cap Removal on Loans.

Recently it was reported that nearly 90% of NRIs living in the United Arab Emirates (UAE), prefer Real Estate Investment. Most of them prefer to buy homes in India not with the plan to return rather as a safer means to invest their additional income. The survey pointed out a six point growth in comparison to the previous year.

Rupee’s lower value, volatile nature of stock markets, etc. are said to be enhancing factors for Real Estate Investment. Moreover the sluggish real estate prices often bring in higher returns. Besides all the above factors, availability of bank loans plays a prominent role. Continue reading →

Gurgaon Real Estate Booms with Fresh Launch of Resi.Projects

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Gurgaon real estate received new launches of residential projects. Reduced interest rate and festive season together caused the boom of Gurgaon real estate.

Gurgaon real estate witnessed the launch of large numbers of residential projects. The demand in the city was paced up by festive season and lower interest rates. Yet due to the hike of prices, many could not purchase any  home on this auspicious  Dhanteras.

Festive season welcomed large number of residential projects in Gurgaon. The real estate developers had been waiting for the festive season to launch their newer projects.

Sanjay Sharma, Managing Director of real estate consultancy Qubrex, revealed that the booking for the new residential projects are really welcoming.

Higher demand has caused price hike in some of the sectors of Gurgaon. Sector 104 Gurgaon is one among them. The property prices have gone up by a huge margin here. The same is the case with most of the sectors. For example some projects have received an increase of nearly Rs.2000 per sq. ft.

Gurgaon real estate has become a high yielding land for real estate investors. The growing importance of the city has attracted more real estate investors to the area.

Real estate investors are always interested in new projects. Most of such new projects offer repayment schemes which are mainly dependable on the construction. Easy payment scheme and the required lower amount of investment make it more profitable to the real estate investors.

Some of the sectors of Gurgaon has seen low absorption rate. PropEquity’s CEO Samir Jasuja pointed a 47% drop in year to year in the absorption in south Gurgaon. Meanwhile the rate of absorption drop in New Gurgaon is 31%, he added.

Dwarka Expressway has received some newer projects. New launches are increased by 74 % while the increase in absorption rate is mere 12%. These figures describe how demand lags behind the supply.

One exception to this situation would be Dharuhera which witnessed a fall of new launches by 85 %. The area boasts of a 27% increase of absorption too. Such trends are welcomed as they are promising.

The Gurgaon real estate is not only supported by the festive season. The lower home interest rates by the banks played a vital role in the boom of Gurgaon real estate. Lower interest rate has persuaded the investors to greater extents.

Festive season which was supported by the lower interest rates caused a growth in the home purchasing. Yet the hike in prices drove the people away from purchasing homes during this festive season. The reports show that auspicious occasion of Dhanteras dragged the people to a great level and real estate stood top on all the Dhanteras purchases.

Real Estate Voted the Most Preferred India Investment

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real estate investment

real estate: Best option of investment in India.

Despite the price hike of Gold and silver, real estate claimed the top spot among the preferred choices for investment in India. Respectively both gold and silver reached the second and third spot. According to survey of PHDCCI which was conducted among the investors, Real estate was voted as the most preferred choice of investment. Continue reading →

Tie Up with Everstone Marks JLL India’s Real Estate Entry

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Jones Lang LaSalle (JLL) India forays into the retail real estate India market with the company’s tie up with Everstone, one of the leading Private Equity (PE) firms and real estate advisors of India. Both the companies will collaborate in the construction and launch of four shopping malls at four main cities of India namely Vadodara, Kochi, Pune and Ahmedabad. These shopping mall projects are to be finished by 2017 or within a span of five years. Continue reading →

Reliance PMS Launches Real Estate Oriented Fund

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Reliance Capital prepares to launch its maiden real estate focused fund of र 1,000 crore by the end of the year 2012. Reliance Capital is owned by Anil Dhirubhai Ambani (ADA) Group. This maiden launch of Reliance Capital in the realty industry will be done under the surveillance of Reliance Portfolio Management Services (PMS). The new fund will aim at constructing residential properties.  The investment will be concentrated in the cities like Pune, Chennai, Bangalore, Mumbai and Delhi primarily.  Reliance selected these cities as the real estate markets of these cities are more firm and have an increasing value appreciation.

Residential Market Demands will Remain Stagnant

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A recent report by Global Property Consultants CBRE South Asia, India Residential Market View – 2011 states that while the residential markets across NCR and Mumbai witnessed steady escalation in prices during the revival period from 2009 to first half of 2011 (as high as 40-50% in certain micro-markets), the latter half of the year brought in stagnation in overall prices.

Numerous repo-rate revisions by RBI, which led to upward revision of mortgage rates, tighter control on teaser rates earlier being offered by financial institutions to reduce EMI burden in the initial years of loan tenure, and inflationary pressures impacted end user as well as investor sentiment by the end of 2011. This coupled with supply pile-up lead to downward pressures on capital values across various micro-markets in these leading hubs. While the year 2012 started on a positive note with the central bank reducing repo rates by 50 basis points for the first time in several months (after increasing it 13 times in the last 2 years), the impact on demand rejuvenation might be limited.

“During 2011, we witnessed initial buoyancy in the real estate market as investor and developer sentiment improved, riding on the high residential demand wave. However with repeated interest rate hikes, rising prices and prevailing economic conditions, the market saw a dip in sales towards the middle of the year,” said Anshuman Magazine, Chairman & Managing Director, CBRE South Asia Pvt Ltd. This led to a supply pile-up in the key markets of NCR (National Capital Region), Mumbai and Bangalore, leading to capital values remaining flat across various micro-markets in these three leading hubs.

“While the recent rate cut by the RBI has helped generate positive sentiments in the market, stagnancy in demand will continue in the short to medium term unless there is an overall improvement in the economic scenario,” Mr Magazine added The NCR market witnessed considerable appreciation in capital values in the first half of the year, with premium markets witnessing steady demand from expatriates, high net worth individuals (HNIs) and executives from multinationals and Indian companies.

Mumbai Realty Market Looks For Some Upward Growth

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The real estate market in Mumbai looks poised for some upswing after going through a lukewarm phase for the past few months. Evidently, there has been a marked increase in sales in March 2012 when 5,776 properties were registered, which is 37% more than the 3,639 registrations in the month of February 2012.

Similarly, at least 50 projects have been launched in the last three months, which further underlines the positive sentiment in the real estate market. The developers ‘ fraternity is quite upbeat about this encouraging development in the past few months.

Says Bharat Mody, CFO, Hubtown Limited, “The recent registration data is certainly encouraging and we are hopeful of numbers getting better from here on.” Similarly, Diipesh Bhagtani, Executive Director, Jaycee Homes Ltd, says: “It’s always good news when we see higher number of registrations and project launches.” Developers, however, have their own reasoning for this positive trend witnessed in the real estate market. The festive spell in the month of March has also been instrumental in giving a boost to the sales in the residential space, observe developers.

Shailesh Sanghvi – Director of Sanghvi Group of Companies, says: “Auspicious occasions such as Gudi Padwa, Akshya Tritya and Dhanteras give an impetus to booking of flats. As Gudi Padwa fell in the month of March, this worked as a major driver for property registrations.

With several developers attracting homebuyers with significant discounts and incentives the trend will continue to prevail since it is the most favourable day to purchase the flat or to perform their Graha Pravesh puja.

On this festive occasion there is an affirmative sentiment in people and more prospects are keen to buy, a discount offer helps them to take the decision faster, releasing some monetary burden.” In addition to this, bonus and healthy job market have certainly created an optimistic sentiment in the market, he points out. However, according to Mody, this improvement has mostly come from the re-sale property rather than any fresh purchases. “Therefore, things will significantly change only if situation on pending approvals improves drastically. That will create fresh supply in the market and ease the upward pressure on prices and will prove to be win-win for government, home-buyers and developers,” he says.

Additionally, developers aver that the primary reason is that the new Development Control Rules (DCR) that came into effect in January has been instrumental in boosting the sales. The recent bunching up of project launches after the new DCR came into effect in January 2012 seems to have driven the recovery, observe realty experts. “Developers and customers are now certain of what they are buying and investing into. Also, we have made it mandatory for developers to sell flats on carpet pricing, leaving no dispute on clarity of areas.”

Moreover, with the Reserve Bank of India (RBI) cutting interest rates for the first time in three years after raising borrowing costs by record 375 basis points in 13 moves from mid-March 2010, this factor has also been responsible for the spike in purchases. The RBI lowered the repurchase rate to 8 per cent from 8.5 per cent on April 17. Incidentally, Mumbai’s residential home sales recovered from a three-year low in the quarter ended in March.

 

Bangalore is just about office… office.

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While demand for residential space was mostly sluggish in 2011, demand for office and retail space remained healthy in Bangalore.

The market for commercial space is estimated at 50 mil sq. ft. across the country. The average yearly absorption rates in Bangalore and NCR are about nine mil sq. ft. While six mil sq. ft. is absorbed in Mumbai, the rates are 4 to 5 mil sq. ft. each in Chennai and Hyderabad.

However, last year, Bangalore topped the list with the highest absorption of more than 13 mil sq. ft. of non-captive office space, about 2 mil sq. ft. more than the levels seen in 2010. About 80% of this came from the IT & ITES sector.

“Consolidation of real estate portfolios by Indian and MNC IT companies has boosted the real estate market in Bangalore,” said Karun Varma, MD (Bangalore and Kochi), and Jones Lang LaSalle India. “Demand for back offices and contact centres has resulted in continued strong growth in suburban real estate development, with IT companies lining up their investments for setting up new facilities in the city,” he added.

Experts predict demand for 16 mil sq. ft. of office space in 2012 in India’s Silicon Valley, which will be the highest ever in the country. This will be mostly due to the new SEZ norms and direct tax code (DTC) that will come into play.

About 75% of the 16 mil sq. ft. office space will be in upcoming SEZ regions. Recently, global investment banking firm Goldman Sachs took up 1 mil sq. ft. of office space developed by Kalyani Developers on the outer ring road. “Companies see an opportunity from a tax break perspective; so, many are planning to migrate their future work to SEZ parks,” said Shrinivas Rao, CEO (Asia Pacific), Vestian Global Workplace Services.

In the next three years, an additional 28.8 mil sq. ft. of office space will be available in the region, for which projects are already under way. “We are expecting to see about 6 to 7 mil sq. ft. of this to come up in 2012,” said Rao.

JLL: Residential Realty Market is set to appreciate in 6 months.

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Jones Lang LaSalle India, a global research firm in the real estate sector, says that prices of residential units in India in the next six months should witness marginal appreciation. JLL says: “Over 60% of residential launches in the Top 7 cities (mostly in cities other than the NCR and Mumbai) are priced in the range of Rs 2,000-4, 000 per sq. ft., which meets the demand of middle-income buyers.”

At the same time, the RBI has given sufficient indications of probable cuts in key rates during second half of 2012, which will improve affordability for homebuyers and provide lower interest costs for developers. This will help in increasing the demand for residential units in the country. JLL also argues that even in the present bad condition, prevailing absorption rates are at nearly 10-12 %, which translate into an average absorption period of 8-10 quarters for a residential project. “This implies that at average prices, any average residential project should be sold out before construction is completed in around three years from the launch.”

JLL says that new project launches, which were slow in Mumbai and the NCR in the first half of 2011 due to approval and land acquisition issues, have now started to pick up. This should improve cash flows for developers having large land banks during 2012. A number of builders have acquired huge land banks on borrowed fund. As the builders pay huge interest rates, nearly 15-18 % on the borrowed fund, the servicing of debts has put huge strain on their finances. Any improvement in off-take is likely to release them from the financing pressure.

In the present slowdown condition, despite bad financial conditions, builders are not cutting the prices as in most parts of the country; they have priced their projects at nearly cost prices. “With rising input costs, developers do not want to sell below a threshold, which does not justify their minimum replacement returns,” JLL says. “This leaves home buyers with a small window of opportunity – the next six months – when home prices should witness marginal appreciation. After six months, a second wave of high appreciation is predicted.

However, in some of the micro markets in Mumbai and the NCR, the appreciation in prices was even sharper. In the last two years, in some of the markets like Gurgaon’s Dwarka Expressway, prices have almost doubled.

Overall, the Indian real estate market went through a slowdown in the last one year. But, all the predictions of a hard landing for the residential property market in 2011 and 2012 have failed to come true, so far.

Realtors ask for Better home loans and tax cuts.

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Realtors from Chennai are expecting the Union government to enhance the income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year from the existing Rs 1.5 lakh which will help to boost the real estate market.

Siva Krishnan, head of residential services (Chennai), Jones Lang LaSalle India, said that  “The market, which was struggling last financial year, has picked up and we expect the government to enhance the income tax exemption limit.”

The Confederation of Real Estate Developers’ Associations of India have expressed that the realty sector and housing policy should be modified in order to address a huge demand of 26 million homes. “Inordinate delay in the sanction of approvals have hit hard. Provision of single-window clearance for real estate development projects is the need of the hour,” said CREDAI president T Chitty Babu.

In addition he also said that “Some of the measures like creation of Special Residential Zones can help. Affordable housing sector should continue to grow based on the incentive given for borrowings from banks for homes.”

Also the 36-month holding period should be reduced to 12 months.

Bengaluru has Impact Of IT, ITES on Real Estate.

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Advantages like available skilled workforce, a high quality of living and better career prospects are at Bengaluru but factors like the cost of real estate and ready access to international destinations also matters a lot.

Services such as call centers, transcription, data processing, online education, etc are included in ITES which has made a huge impact on international workflow into India, mainly because of low communication costs and the financial sense behind outsourcing non-core activities. It is an obvious advantage for any modern city to have a significant presence of this industry, which creates white-collar, high-profile jobs and has remarkable effects on its real estate market.

Commercial developments in the city have been done by the private sector and the Bangalore Development Authority (BDA), which controls the growth process of the city.

The city’s commercial market has three spatial limits – central business district (CBD), suburban and peripheral. Bengaluru has no true concept of a CBD which resulted in business growth from MG Road to other main roads such as Residency Road, Richmond Road and Brigade Road, Infantry Road and Cunningham Road.

Some of the prominent streets in prime off-CBD areas in Bengaluru are Commercial Street, Infantry Road, Cunningham Road, Richmond Road, Residency Road, Millers Road, St Mark’s Road, Vittal Mallya Road and Lavelle Road. The advantages they offer are reduced congestion, the availability of space and proximity to the City Centre.

Bengaluru suburbs are classified as areas near to Airport Road, Koramangala, Indira Nagar and Jaya Nagar. The peripheral areas consist of Bellary Road, Whitefield and Bannerghatta Road.

Residential Growth Sustains Prices, but Outlook’s Changed

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The real estate market has witnessed more or less a stable pricing scenario in the last 03 quarters after seing a sharp increase in the 02 years that followed the subprime crisis of 2008.

A Delhi based research result for real estate, the volume growth in the residential segment has improved inspite the increase in the interest rates. This keeps the property prices at higher levels. The Chennai real estate market tops the chart with increase in demand from both commercial and residential segments.

However, the Mumbai market has witnessed a correction in the last 03 quarters due to a delay in project approvals. The outlook on future price trends is mixed. Also, a drop in property prices looks distant in cities with lower inventory. On the financial front, most real estate players have reported better results on the back of higher sales volume.

Real estaters normally have execution issues which impact their debt repayment schedules. To tackle such issues and achieve greater transparency, companies are focusing more on product positioning and improving project execution certainty. On the other hand, qualitative factors such as hassle-free land bank and developer’s goodwill in getting land approval will improve company positioning with customers.

UAE Declares Visa Extension for Real Estate Investors from 06 Months to 03 Years

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The UAE federal government has approved and declared the extension of visas for real estate investors from 06 months to 03yrs. This decision was taken at Cabinet meeting chaired by vice-president and prime minister of the UAE and the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. To boost the struggling real estate market and also investor’s confidence.

“The government took a range of measures as part of its efforts to shore up economic growth within its strategic plan 2011-2013, including extension of visa for real estate investors to 3years instead of 06 months. Presently, foreign owners of property worth more than AED 1million are eligible to get a 06months visa, which should be reviewed every six months.

Tata Housing Won Cityspace Award

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tatai naplemente
One of the leading real estate companies of India, Tata Housing was honored by the Best developer award in the category of CSR in the recognized award ceremony called Cityscape Awards – Real Estate Asia, 2010.

According to experts, when they analyzed the commitment and positive contribution of the company in the society welfare, it would be fully justified to call it one of the best developers in the Indian real estate market.

The award ceremony was originally organized to honor the real estate companies and industry professionals who have put their heart and soul into the realty and have done significant contributions in the growth of Indian realty. A panel of experts was the judge.

The Managing Director and Chief Executive Officer of Tata Housing, Brotin Banerjee, said that the company has the motive of delivering to the consumer what he wants. They firmly believe in ‘what you see is what you get’. And the Cityscape award is the evident of the contributions the company has made over the years to the society.

Real Estate Looking Forward

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The reactions to real estate market are mixed. The looking up of this market in the US economy has raised some hopes in the Indian markets too. Various real estate companies have expressed that the market is looking up, and is likely to improve in the coming days, but some companies are skeptical and want to see actual results flowing in before commenting.
There has been some increased activity on the real estate market front in the recent weeks and this has raised some hopes. The media also reported that the prices of houses would not drop down further indicating that there is stability in the market.
The following weeks would be crucial and they could decide which way the market would go in the coming weeks.

Fifteen realty firms waiting to enter market

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Fifteen real estate companies are waiting in the wings to tap the capital market to raise upto 6 billion dollars with the housing sector showing signs of recovery. This list includes Lodha Developers, Oberoi Constructions, Emmar MGF and Godrej Properties and many more. These firms wanted to come out with the IPO earlier, but held them back due to bearish market. The success of a real estate IPO would depend upon corporate governance, background of the companies and the right pricing among others. Start-ups and relatively unknown firms would face difficulty to raise funds from the market. Almost USD six billion private equity fund was also likely to come in the six to eight months time to the domestic real estate bazaar.