Tag Archives: United States

In March,India Inc. invested $2.7 bn overseas.

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Overseas investments by Indian companies stood at USD 2.77 billion in March, up 37.6 percent over the previous month, with Binani Industries, Mercator Lines, HCL Technologies, Varun Shipping, Hexaware Technologies, and Tata Steel emerging as major investors.

As many as 489 overseas investment transactions were carried out by various companies in March, as per the Reserve Bank data released Wednesday. Binani Industries invested a total of USD 323.34 million in its two wholly-owned subsidiaries based in Luxembourg and the US that are involved in financial, real estate and manufacturing services.

Mercator Lines, which is into agriculture and mining, through its joint venture-Mercator Offshore PTE- invested USD 150.15 million in Singapore during the month, it said. ABG Shipyard, through its wholly-owned subsidiary invested USD 80 million in Singapore.

HCL Technologies, India’s fourth largest software exporter, invested USD 60 million in Bermuda through its wholly owned subsidiary for providing financial, insurance and real estate solutions.
Likewise, Varun Shipping which is into transport, storage and communication business invested USD 60 million via its JV in Cyprus.

Hexaware Technologies invested USD 38.7 million through its wholly-owned subsidiary in Germany to provide financial, insurance, real estate solutions, it said. Tata Steel invested USD 35.5 million in Singapore through its wholly-owned unit, it said.

Lemon Tree: To open 100 hotels in India by 2020.

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“By 2020 we plan to open 100 hotels in India with an inventory of around 10,000 rooms,” Lemon Tree Hotels Chairman and Managing Director Patu Keswani told reporters on the sidelines of the Hero Mind mine Summit 2012.

Lemon Tree Hotels is planing to open 100 hotels in India by 2020, with a total room capacity of 10,000.

The company also said it has put on hold plans to foray into real estate in partnership with US-based investment firm Warburg Pincus.

This year the company is opening two more hotels, he said without sharing details on the investment that would be required for the expansion.

Keswani, however, said the company plans to raise money from financial institutions or may even go public in the next two-three years. “In the next 2-3 years, we might look at public listing,” Keswani said.

At present, the company’s total room capacity is around 2,000. On the company’s proposed real estate foray, he said: “We have put that housing project in cold storage. It is not the good time to start a project like that.”

In April last year, the company had announced that it will foray into real estate with plans to invest over Rs 1,400 crore to launch housing projects in India in partnership with US-based investment firm Warburg Pincus. “We will wait for the Indian economy to become better and interest rates to come down…I do not see the situation improving in another 2 years,” he added.


Study says that MNCs surpass Indian firms in office space uptake.

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With bearish sentiment affecting corporate expansion plans in the country’s financial capital, there has been a steep decline in the commercial real estate taken up by Indian companies. In contrast, multinational companies (MNCs) have picked up considerable office space here.

The latest report by property advisor DTZ comparing the trends in the first quarter of 2012 to the same period last year shows a noticeable change in the profile of the commercial real estate occupier in Mumbai. Between January and March 2012, Indian corporate firms account for 29 per cent of occupiers of new commercial realty space in the city. This is a sharp fall from the 71 per cent market share of new space that these corporates picked up in the corresponding period in 2011.

In comparison, US- and Europe-based corporates were responsible for taking up 5 and 18 per cent of the space in the first quarter of 2011 respectively. In the same period this year, their market share has gone up by 32 and 23 per cent respectively.

According to Rohit Kumar, DTZ research head, an analysis of quarter-on-quarter and year-on-year office space take-up highlights the fact that relative market share of MNCs based out of USA and Europe has increased significantly while that of their Indian counterparts has dropped. “Be it IT, ITES or Banking, Financial Services and Insurance (BSFI), the MNCs find India relatively cheaper in terms of labour and real estate. On the other hand, despite the positive growth signals from the US and Europe, Indian corporates are more conservative, fearing the return of recession,” said Kumar.

“India is a top focus for Realty Moghul” says Trump Scion.

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Trump’s eponymous real estate group expects to sign multiple deals for Indian residential projects and hotel contracts over the next five years, despite a market riddled by regulatory uncertainty and bureaucratic red tape.

“India, among other emerging markets, is the biggest push for our organisation,” Donald Trump Jr, an executive vice president of The Trump Organization, said on Wednesday.

Trump, whose portfolio includes projects in South Korea and Turkey, in addition to hotels and skyscrapers in the United States, is close to signing a couple of deals with Indian developers, the younger Trump said without providing details.

“Equity investment will depend on individual projects and partnerships but first we would like to form relationships which allow us to understand the processes and spectrum better,” the 34-year-old said on the side-lines of a hotel conference.

The developer entered India last year with a joint venture partnership with Rohan Lifescapes to build a 45-storey luxury residential tower in Mumbai.

However, work on the tower, which will bear the Trump name but involves no equity from the U.S. developer, has been halted for about nine months since authorities said it lacked the necessary permits, a common problem in an industry wrapped in red tape.

Indian developers are often hit by changing regulations. In Mumbai, for example, the scrapping of a rule granting extra floor space in exchange for providing public parking facilities has meant many projects must reapply for clearances.

But Trump, whose father is worth an estimated $2.9 billion, according to Forbes, says the lure of an emerging India outweighs the regulatory headaches.

“The Indian market is starved for a good luxury product and it needs a brand like ours,” he said.

“I like the regulatory changes I am seeing. It may slow things down a bit but will create a level playing field and will help in eliminating the unknown for an outside investor coming in,” he said.

The company plans to focus expansion in the country on luxury residences and hotels, and would look at cities including Mumbai, Delhi, Bangalore and the state of Goa.

Some local players such as privately held Lodha Developers and Godrej Properties are emerging as strong brands in India’s luxury housing space, but the market remains fragmented.

And despite a slew of interest rate hikes that have cooled India’s overall property market and hit luxury developers particularly hard, Trump is bullish.

 

Banks prefer Private Developers for lending.

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As per the latest data available from the Reserve Bank of India, the outstanding for commercial real estate is Rs 1187.1 billion as of January 2012, a growth of 12.2 per cent over the year-ago period. Although this rate is lower than the growth figure of 19.9 per cent in the same period the previous year, the double-digit growth stands in sharp contrast to the claims from public-listed realty firms who say bank lending has shrunk considerably.

Central to the theme of continued lending to real estate development are the low-lying, unlisted property developers of the country – a crop of realtors who have always been on the side-lines of the big Indian realty story but who are slowly yet surely climbing up the ladder for a larger share of bank loans.

According to a research report by IDFC’s Institutional Securities team last December, bank and NBFC loans to developers have increased 15 per cent to Rs 1.8 trillion for the 12 months ended September 11 in spite of higher interest rates and the RBI’s efforts to curb lending to the sector. Of this, loans to unlisted developers accounted for more than 72 per cent of the total.

One reason for such a shift could be the hard targets that listed realty firms chase due to the pressure of being listed, with compulsory quarterly disclosures. Add to it the size of the firm and pressure points will become clearer. A listed firm usually places bigger bets with larger projects and when the market faces turbulence, project execution becomes a problem. This reverberates with pending projects and drying up of bank credit.

Even as most unlisted private developers are small realtors, there are some large private groups in different regions of the country. Given the huge set of private developers, even private equity developers have been betting on projects sponsored by such realtors.

India loses $210 billion in Coal Scandal.

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The Indian Parliament erupted in hoots and jeers Thursday after a draft report by government auditors estimated that the national treasury lost $210 billion by selling coal fields to private excavation companies in sweetheart deals.

According to the report, leaked to the Times of India newspaper, the primary beneficiaries were about 100 private and state companies that were handed contracts for 155 coal fields between 2004 and 2009 without going through a competitive bidding process. The report said that $210 billion — five times India’s annual defence budget — was a conservative estimate given that it relied on prices for low-grade rather than medium-grade coal.

The report represents the latest in a string of corruption scandals to hit the ruling Congress Party — others have involved the telecommunications, real estate and sports industries — that has left India’s leadership weak and bereft of policy initiatives. Opposition leaders called the latest revelation the “mother of all scams,” accusing the government of looting the country.

But auditors with the comptroller/auditor general’s office countered that the leaked draft is misleading, adding in a letter to the prime minister’s office that the figures publicized were the product of discussions held at a “very preliminary stage.

“We are examining the news report and I have called for records,” Coal Minister Sriprakash Jaiswal told journalists, adding that he wasn’t in office at the time of the suspect deals. “After that I will reply.”

The government said it has not received the report yet from comptroller/auditor general’s office.

India, the world’s third-largest coal producer after China and the United States, has seen a series of mining scandals. In August, the top elected official in south western Karnataka state resigned after being implicated in a mining scandal that a watchdog said involved $400 million. Three months later, a report claimed that almost 50% of the iron ore exported from western Goa state was illegally mined.

India is hungry for energy to fuel its fast-growing economy, and coal accounts for 70% of the mix, a percentage expected to grow, given limitations on the further development of power from nuclear reactors and renewable sources. Environmentalists, however, say increased production is ecologically unsustainable.

US Ratings Downgrade, Will Interest Rates Come Down.

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How will the US rating downgrading from AAA to AA+ impact the real estate sector? Will it have a long-term or an immediate impact? What’s going to be hit, residential or commercial real estate sector?

The good news is that the interest rates might come down in residential segment whereas commercial real estate sector will be hit and the reduction will take place in office space. This is the first time something like this had happened and it is difficult to predict the consequences. It has created uncertainty in the global market and extreme instability across asset classes.

There could be some positives for emerging markets such as India, with the cut of prices of oil and other commodities, inflation too can be controlled adding to it interest rate should come down. Overall, impact on real estate in India could be positive.

The money that pours in will be further used to further for residential development as we already have reasonable capacity for commercial development that still needs to be absorbed. However, in the long run, the commercial property sector take-up maybe an issue, from the demand side from IT/ITeS sector which are closely linked with the USA.

‘M3M Golf Estate’ in Gurgaon – 7 Star Luxury Apartments

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M3M India Ltd. chains up with Larsen & Toubro, one of the leading construction firms to build their finest luxury residence in Gurgaon which is 7 star to be named as “M3M Golf Estate”..  This project will be constructed by L&T in collaboration with LERA International, the world’s leading consulting firms. The estimated worth of this deal of phase – 1 is about Rupees 400 cr, out of a total investment of over Rupees 2,000 cr. Lera International will be providing it’s most modern and pioneering structural engineering designs. In a press release it is declared that the project will be completed in 33 months much prior to the scheduled time of completion of 42 months.

The project is tactically located on the Golf Course Road (Extn.) in Sec 65, Gurgaon, which is 30 mts drive from Indira Gandhi International Airport spread over an expansive 75 acrs. Graham Cooke, the world famous architect has designed the magnificent apartments around a 9 hole reversible ‘In City’ golf course. The architecture is a perfect fusion of eco friendly, green sceneries and cutting edge designs. The project is designed by world’s finest architects ARCOP headed by Ramesh Khosla. The project has already received awards internationally in USA, UK and Dubai, as “Best Upcoming Golfing Lifestyle Residence in India” .

“In line with our commitment to give the best of quality and timely delivery, we are happy to appoint L&T which is one of the world’s best construction groups. “M3M Golf Estate” is our much honoured project, internationally acclaimed, and we have designed this, keeping in mind the taste, class and the requirements of our target clients. We ensure the use of latest technology and safety of structures” said Basant Bansal, Chairman and Managing Director, M3M Group.

M3M Golf Estate offers high – tech ultra modern luxury apartments with all modern amenities like wi-fi in all buildings, roof- top jogging path, and superior class club houses. These apartments will trait world class amenities, unique outdoor and indoor living spaces, modern kitchen, sated with fittings and high quality end fixtures. It also offers aesthetically designed golf course.