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Real Estate India - Online Real Estate - buy sell rent commercial residential properties in India - Zameen-Zaidad.com
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REALTORS WOO MFS TO THEIR IPOS WITH GOODIES |
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While most of the large to mid-sized recent offerings have received a lukewarm response, the buzz is that quite a few real estate companies are bent on going ahead with their initial public offering (IPO) plans. Grapevine in market circles is that quite a few fund managers are being tempted with apartments at concessional rates in the projects of these companies in return for subscribing to the issues. This kind of arrangement will not be very expensive for real estate firms either, given the fat margins in the business and the fact that these projects are yet to be completed. After all, what are a few crores when hundreds of crores are at stake? Market watchers say at least two companies that came out with IPOs in the recent past had such an arrangement with some fund managers. Needless to say, both the offerings had witnessed a strong response from institutional investors despite expensive valuations. With banks cutting down their lending to the real estate sector, and the stock market, too, lukewarm to property developers, it has become a desperate situation for many cash-starved builders.
Courtesy:- ET dt:- 18-03-2010 |
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A WEEKLY SNAPSHOT OF SOME BIG-TICKET CITY DEALS |
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MUMBAI
A residential apartment spread across an area of 5,800 sq ft was sold at a total value of Rs 12,52,37,500 at Lower Parel in Central Mumbai. The apartment features a plunge pool and a terrace garden, while the complex offers a club house, along with other amenities. This under–construction high-end apartment commanded an average capital value of Rs 21,500 per sq ft and will be ready for possession in 34 months. The commanded range for ready apartments in this area is Rs 34,000 – 55,000 per sq ft. Lower Parel is likely to witness an increase in the number of new project launches for high end as well as mid-ranged projects over the next three to six months.
PUNE
An apartment covering an area of 2,800 sq ft in Kalyani Nagar was leased out to a corporate for a rental of Rs 1.6 lakh per month. This rental for this high-end apartment was well within the commanded range of Rs 1,10,000 – 2,10,000. It happens to be amongst the most sought after buildings in the expat community. While prices in this micro-market have remained stable over the past two quarters, they are expected to appreciate on account of the growing demand from expatriates and corporates, mainly due to its proximity to the airport, railway station as well as the central business district.
CHENNAI
A beach house spread across 3500 sq ft, located on the East Coast Road was leased for a monthly rental value of Rs 1.75 lakh. This apart, another apartment admeasuring 3500 sq ft at Boat Club was leased out for a rental of Rs 1.4 lakh per month. This highend apartment’s rental is well within the prevalent range of Rs 80,000–2,25,000 per month. Properties on the East Coast Road, which are closer to the city limits, have been witnessing a buoyant demand in the recent past.
BANGALORE
An apartment covering an area of 3,000 sq ft was sold at a total value of Rs 2,24,00,000 in the highly sought-after Koramangala area. This high-end apartment commanded an average capital value of close to Rs 7,466 per sq ft, which is well within the commanded range of Rs 6000– 8500 per sq ft in the locality. A villa in Whitefield, spread across 4,000 sq ft, was sold for a total cost of Rs 1,75,00,000. This high-end villa commanded an average capital value of Rs 4,375 per sq ft, which was below the prevalent range of Rs 5,600– 7,000 per sq ft. The demand in the city of Bangalore has been largely driven by affordable housing projects and smaller sized-apartments.
Cushman & Wakefield, a commercial real estate services firm with offices worldwide, delivers solutions including advising, implementing and managing on behalf of landlords, tenants, and investors.
Courtesy: - 19-03-2010 |
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BUDGET BLUES FOR THE REALTY SECTOR |
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Service tax burden imposed by the Union Budget on realty transactions will affect the sector. Read on to know what are the pluses and the minuses of the new budget
The Union Budget 2010-11 is a big disappointment to the middle-class urban housing sector. However, it has bet on the economic growth to drive demand in the sector. By tweaking the income slab, finance minister Pranab Mukherjee has put some extra money into the pocket of middle-class tax payers. A person having an income of Rs 5 lakh per annum is likely to gain Rs 20,600 per annum from the provision. But, if his income is more than Rs 8 lakh, his annual gains will be around Rs 51,500. These are a big booster to the economy as they will increase the purchasing capacity of individuals. Ultimately, tax saving is equivalent to money earned.
Service tax on apartments under construction
But at the same time, the finance minister has imposed service taxes on a number of services related to the real estate sector. Anshuman Magzine, MD of global consultancy firm CBRE Asia, says that these provisions will be a dampener and affect the revival of the real estate sector. Another realty consultancy firm,
Knight Frank also said that it would affect the sector adversely. According to a budget provision, in cases where a property under construction is bought and a consumer makes payment over a period of time, then it will attract service tax. "In the 'Construction of complex service', it is being provided that unless the entire consideration for the property is paid after the completion of construction (that is, after receipt of completion certificate from the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly," reads the provision.
A senior tax consultant of KPMG says that this clearly means that if a house or apartment is sold before the completion of the construction, a buyer will have to pay the service tax. In fact, Sunil Mitra, revenue secretary, said that even if a house is already sold but the completion certificate could be secured from the concerned authority in 2010-11 or after March 31, 2010, the service tax would be levied on such transaction. According to tax experts, this will lead to a tax outgo of 3.4% of the sale value of the house. Mitra also confirmed that the department would allow an abatement of 67% on the value of house to calculate the service tax at the rate of 10.3%.
This means, if you have bought a house for Rs 50 lakh at the time of launch of a project, your tax liability would be Rs 1.70 lakh. However, with the service tax levied from service provider, a senior builder said they would pass on the liability to the customer. He said that since they have started launching affordable apartments, the margin is so thin that they would not be able to absorb them. The budget has also included the renting of immovable property under the service tax net. Knight Frank says that this will have a negative impact on the real estate sector. The levy of service tax will impact rented commercial property with retrospective effect from June 1, 2007. Even in cases where a developer takes land on lease and pays lease rent, the lease rent will attract service tax.
Preferred location will be taxed
Interestingly, the differential charges for higher floor, or for preferential view, better spaces, etc will also attract service tax. "Certain additional services provided by a builder to prospective buyers like providing preferential location or external or internal development of complexes on extra charges. However, service of providing vehicle-parking space would not be subjected to tax," the new provision says. However, there are some positive aspects also, which will benefit the construction sector as a whole.
Hotel industry gets a boost
According to a new provision, all new hotels of 2-star and above category will be benefited because of the investment-linked deduction - 100% of the capital expenditure incurred by a hotel can be reduced from taxable income. This will enhance the returns for developers of hotel projects, says Knight Frank. "The provision will enable investments in the hospitality segment and boost supply in the organized sector. It aims to provide support to the hospitality sector in expectation of growth in tourism and both business and leisure travel," says Anurag Mathur, MD of Cushman & Wakefield India.
Relief under 80 IB
The budget has also given relief to developers under Section 80 IB (10). It has provided the extension of income tax exemption for housing projects by one year. It will give a relief to projects that were delayed during the slump. These projects should have been sanctioned on or before March 31, 2008 and be completed in five years. Similarly, the provision for commercial establishments has been increased from 5% or 2,000 sq ft of built-up area, whichever is less, to 3% or 5,000 sq ft of built-up area, whichever is higher. Therefore, at least 5,000 sq ft of shop establishments can now be developed in these projects while continuing to remain eligible for income tax exemption, says Knight Frank.
The relief to developers by allowing extension for claiming deduction of their profits within a period of five years under the section, says Mathur, would help those developers who were impacted by the global financial crisis last year. This announcement is likely to provide a breather for developers who were finding it difficult to complete projects due to liquidity crunch.
However, on the other hand, the announcement may be a cause of concern for the consumer/end user as relief extended to developers might result in further delay in project completion.
In addition, it is suggested that the norms for built-up area of shops and other commercial establishment in housing projects will be relaxed to enable basic facilities for the residents.
Courtesy:- ET Realty dt:- 19-03-2010 |
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HNI INVESTING IN COMMERCIAL PROPERTIES |
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Unlike in the past, the New Age Indians are not confined to investing in residential properties. They are now setting their sights on commercial property as well. Read on to know what attracts them to commercial properties
If you imagine that commercial properties are only purchased by companies to expand their business prospects, think again! Now high net worth individuals (HNI) too invests in commercial properties. As recently as a few years ago, commercial property was an investment option for select individuals. Apart from the issue of a large investment, it required a different mindset from the investment point of view as well. But, over the years, a large number of Indians have begun to earn huge salaries while many others are also making a lot of money through freelance jobs, which they are investing in commercial properties.
Unlike in the past, the New Age Indians are not confined to investing in residential properties. This trend is picking up fast. "If banks do not show reluctance to give loans to individuals in order to buy commercial properties, more and more HNI will come forward to buy commercial properties. It is now no secret that banks hardly show any positive attitude to sanction loans to individuals in order to buy commercial properties. This happens all over the world. That is why you cannot blame only our banks," says Samir Jasuja, CMD of PropEquity.
An official of PNB Housing Finance Ltd also admitted that while banks happily give loans for residential properties, they are not that forthcoming when it comes to loans for the purchase of commercial properties. Reason? He said that compared to residential properties, the rate of default is very high in this segment. That is precisely the reason banks avoid disbursing loans to individuals in buying commercial properties.
"As far as Ansal API is concerned, we have got bookings from a sizable number of such individuals (HNI) in our malls (Ansal Plaza in various locations), as also in small to medium office spaces in our commercial projects in Delhi NCR, Punjab, Lucknow, Kundli (near Sonipat in Haryana), among other projects," says the company's official spokesman.
Anu Gupta, director of Century 21 India, says that HNIs should make investments in commercial properties as these investments could maximize their return. The reason being, while they could go for bank loans up to 75-80% for such investments, the repayment of such loans could be set off against the rental incomes from such commercial properties. Thus, by investing a portion of the total price (say 25%), an investor can acquire a high-value asset, which will not only give maximum return (thanks to the set off provision in IT against rentals), but could see a significant appreciation over a period as the retail/commercial industry grows.
Giving his own example as to how he is earning less because he has invested in residential property while his friend is earning far more than him for investing in commercial property, a Delhi based financial professional, Narinder Gambhir, says that both he and his friend invested in residential and commercial properties in 2004 in East Delhi. Both invested close to Rs 30 lakh each. "While I am getting a rent of Rs 15,000 per month, my friend is earning Rs 25,000 from his property. This is a huge difference," Gambhir rues.
Discussing about the factors which are crucial for HNI to look before buy commercial properties, a realty expert says that they should not invest where there is a deluge of supply. In that case, the investment would not fetch good returns. HNI also invest in commercial property, as they are not restricted to a dingy market area. Today, swanky malls enable an individual to look at commercial property as a viable investment option. Moreover, the emergence of semi-commercial property in residential locations has made the investment financially viable.
RK Arora, CMD of Supertech group, says that there is nothing wrong if you invest in commercial property, but one must invest after taking all the pros and cons into consideration. "I feel that if you invest in some commercial space in NCR, then you have to wait for a long period before earning anything as there is a massive supply of such commercial property in NCR, unlike in Delhi. If you can invest in Delhi, then it is great."
However, Alimuddin Rafi Ahmed, CMD of ILD realty group, feels that as our economy is improving after tiding over a really tough time during the market slum of 2008-09, corporates are looking for commercial spaces on lease, hence it is a perfect time to invest in commercial properties. "This is just the right time to invest as the property is available at rockbottom prices. The crash in property prices led to downward revision of prices by developers. The reduction was to the tune of 30% or so. Hope things go better in the times to come and everyone benefits from the property," Ahmed concludes.
Courtesy:- ET Realty dt:- 19-03-2010 |
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News Headlines |
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Norwegian major yesterday has released last fourth installment of Rs 2000cr of Unitech wireless and increased his stake up to 67.25% and rest with Unitech but Telenor has got approach from Indian regulator to increase its stake up to 74% but it has no plans to hikes its holdings from current 67.25.
Hospital chain, Fortis Healthcare will raised Rs 1250 cr from domestic and international markets to meet its funding requirements by global depository receipts, American depository receipts and foreign currency convertible bonds, said in a filling to the Bombay Stock Exchange. |
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Recovery in realty |
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Recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010, a report says, but cautions that it would be premature to predict a bounce-back for the entire sector. Prabhakar Sinha writes
Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.
The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilize but will remain within acceptable range. The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3 % to 25% over the previous year, the report shows (see chart). Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well. NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown, which created a kind of uncertainty in the
job markets. The best outcome of the slowdown is the emergence of affordable housing in the country. At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.
Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction. The report said, there was a clear shift towards ready to-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.
In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech, which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days. The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.
Due to focus by developers in 2006 and 2007 on luxury housing, high-end properties in most cities suffered a steep correction when slowdown impacted the sector, as compared to mid-end properties. This left a large unmet demand in the mid-end market. As favourable conditions have come back, the sector has witnessed resurgence of demand.
However, for the trend to continue, the government should not put extra burden on it. The budget announcement of 10.3% service tax on the sale of apartments before completion is expected to have the highest impact in the real estate market. This may hamper the attractiveness of the projects under construction. The scope of service tax is extended to the construction of complex service, wherein the developer/builder is likely to pay service tax on construction services while the project is under construction. The levy would cover all construction of complex service or commercial or industrial construction services resulting in higher cost of properties under construction. The service tax of 10.3% will be levied and also be charged on additional services provided in residential developments such as preferential location charges, internal or external development charges, etc. It is estimated that service tax of 10.3% will be levied on approximately 33% of the value of an apartment, which is likely to escalate the price of real estate and put further pressure on the housing affordability. In the short term, the report says, real estate prices across most cities are expected to continue to strengthen. However, it also warns that a significant increase could result in demand drying up and lead to stagnation or further correction. Rental values are expected to remain stagnant, especially in the luxury/high-end segment with certain mid-end properties witnessing buoyancy.
Developers are likely to remain cautious and launch new projects at attractive price points, the report says. Due to prevalent demand for mid-income housing, most developers are expected to focus on new projects in this category, over short- to medium-term, with very few niche projects in luxury category with strong differentiation factors.
Courtesy:- TP dt:-13-Mar-2010 |
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SERVICE TAX MAY TAKE TOLL ON REALTY |
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After many months in the dumps, the housing sector was finally sniffing at a recovery as buyers returned gradually, lured by sharp price cuts and teaser loans.
But a Budget proposal to levy service tax on houses under construction is threatening to crimp the sector’s fragile recovery as the resultant price hike is certain to dissuade fresh buyers. The proposal, a bolt from the blue, purported to spur builders into completing projects faster after rampant complaints of long delays.
Though that remains to be seen, an immediate effect will be the prices of incomplete houses rising by 3% after a service tax of 10.3%, including surcharge, is imposed. The levy is based on an earlier Income Tax Department circular, held up due to resistance from developers, which set 33% of the house price as services.
Housing project comprises land, raw material, labor and services. Though services include branding and selling of a project, there is an unwritten understanding that no ‘service’ was being provided till a developer passed a property title to a buyer.
Back-of the- envelope calculations show that an Rs 30-lakh housing property will see a price hike of at least Rs 1 lakh after the service tax is affected.
“Affordable housing will be impacted the worst,” said Niranjan Hiranandani, chairman of Mumbai-based developer Hiranandani Constructions, adding that everyone in that category must now pay developers in installments.
The Budget proposal, coming after the Reserve Bank of India’s incessant frowning on teaser loans, will wane demand further, say realty watchers.
Most houses are typically sold during construction with buyers paying in phases. The Budget proposal means that even buyers who have to pay, say, the remaining 5% of the overall cost during possession, will have to cough up more.
The proposal could also pose problems in calculating remaining payments though it will ratchet up demand for ready-to-move properties, say realty watchers.
As for developers, the market’s response to the proposal will determine their long-term plans. “Affordable housing will now become unaffordable,” said Rajeev Talwar, managing director of DLF, the country’s largest developer.
“Housing is a state subject and the move is impinging.”
Real estate was among the worst hit sectors in the global downturn as buyers kept away and banks became wary of lending. But teaser loans, some even as low as 8.25% much below their prime lending rate (PLR), last year stalled the decline.
But builders fear that the introduction of a service tax and absence of teaser loans will compound the problem of oversupply of residential and commercial properties in several parts of the country.
Courtesy:- ET dt:- 04-Mar-2010 |
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NO TAXING TIME FOR REAL ESTATE: GOVT |
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Says construction attracts service tax only on 33 per cent of the value. The government today said the net impact of the service tax on real estate construction would be only 3.3 per cent, since construction attracts service tax only on 33 per cent of the value.
The government had last week clarified through the Budget that transactions such as leasing vacant land and commercial spaces, payment made to developers before the grant of completion certificate and imposing preferred location charges, among others, would come under the service tax net.
Developers said the proposal could push home prices up by 10 per cent in Tier-II and Tier-III towns and 0.5-4 per cent in big cities such as Mumbai and Delhi which have higher land prices. However, a senior finance ministry official here said the net impact of the service tax would be only 3.3 per cent, since there is an abatement of 67 per cent.
“There is a false impression being created that prices will go up by 10 per cent but the fact is that 10 per cent service tax is levied only on 33 per cent of the value,” said the official.
The budgetary clarification has been issued with retrospective effect from 2007, when real estate transactions were brought under service tax. Abatement scheme, under notification number 1/2006 dated March 1, 2006, says that the contractor is entitled to claim abatement to the extent of 67 per cent of the value of services rendered by him. In effect, the contractor would have to pay service tax only on 33 per cent of the value.
Stung by new service tax proposals on property transactions, real estate bodies such as the Confederation of Real Estate Developers Associations of India and Maharashtra Chamber of Housing and Industry plan to approach the finance ministry to seek rollback of some proposals.
Developers have already increased prices by 15-20 per cent in the last nine months as demand for homes picked up. This resulted in demand tapering in January and February.
Courtesy:- BS dt:- 04-March-2010 |
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FOREIGN DEBT STILL SEEPING INTO REALTY |
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Foreign debt, banned in real estate, is finding its way into property firms as bankers and lawyers help builders cobble together new deals to raise money.
Even though foreign loans—better known as external commercial borrowings—are not permitted in construction, property firms have spotted a mechanism where the debt can be provided by foreign institutional investors (FIIs) registered with Sebi. No rules are broken and the deals, involving a three-way transaction, come across as normal private placements in the corporate bond market.
The process begins with a real estate company placing nonconvertible debentures (NCDs) with a local entity, such as a nonbanking finance company (NBFC). The next step involves listing the debt security, soon after which an FII steps in. Once the NCD is listed on a stock exchange, the NBFC offloads the paper to a foreign fund. Since FIIs cannot invest in unlisted debt, the NBFC warehouses the NCD till the paper is listed and then recovers the money by selling the debentures to a foreign fund.
The two transactions are part of a back-to-back deal struck between the firm issuing the NCD, the local NBFC and the FII. At least four developers—three from Mumbai and one from Bangalore—have risen over Rs 1,000 cr in the past few months through this route.
“It does not directly violate the Press Note on foreign investment in property, and such FII investment is within the overall corporate bond ceiling applicable to foreign funds... but it’s against the spirit of the regulation,” admitted a senior banker who has advised one such NCD issue.
Indeed, a few foreign banks have made presentations to property firms on the convenience of such fund-raising which has become more attractive since the government plugged a loophole on the foreign direct investment (FDI) regulations in the real estate sector.
Courtesy:- ET dt:- 04-Mar-2010 |
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INVESTORS SPARED OF SPECIFIC NORMS |
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In the past few years, FDI worth billions of dollars came in as overseas investors subscribed to equity and quasi-equity products — often with put options — sold by real estate firms which were starved of bank finance. But a chunk of this inflow was based on an interpretation that the three-year lock-in on the FDI applied only to the ‘original’ amount brought in and not the full quantum of FDI in a project. Many investors took advantage of this: an offshore fund which decided to put in, say, $25 million split the inflow, by first bringing in $5 million, the minimum amount, and then bringing in the balance $20 million subsequently. The understanding was that the lock-in applied only to $5 million and not $25 million. This flexibility in interpretation disappeared after the government clarified last year that the full amount, irrespective of whether the money comes in tranches, would be locked in for three years. The move, which came as a jolt to several foreign investors, paved the way for the more recent NCD route that’s catching on among local developers.
“There are advantages. First, there is no lock-in because the FII can sell the NCD as and when it wants. Second, the debt is secured against mortgage of assets, pledge of shares, etc. Third, unlike FDI, here the foreign investor can fund even those projects which are not FDI-compliant,” said a lawyer familiar with such debt-raising. For a project to receive foreign equity or FDI, it should not have less than 50,000 square meters of built-up area, among other things. “These conditions don’t come in the way when a foreign fund buys NCDs,” he said. Interestingly, such NCDs have also been issued by a leading NBFC which, like property firms, are restricted from tapping the ECB market.
According to a real estate fund manager, some foreign investors reluctant to increase their equity exposure post the downturn, prefer secured debts with a decent interest return. Sebi’s listing regulations extend to debentures that have been privately-placed; and, the NCDs can be listed even if the real estate company or a project specific special purpose vehicle floated by it is a private firm or an unlisted public entity.
Courtesy:- ET dt:- 04-Mar-2010 |
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DLF CONVERTS MUMBAI MALL PROJECT INTO RESIDENTIAL ONE |
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DLF, the country’s largest realtor by market value, is planning to build a premium residential apartment complex at Worli in Mumbai instead of a high-end mall project, as demand for retail spaces has come down sharply, according to a company executive.
“We felt residential will do well here, and we will fix the price depending on market conditions,” he said. According to DLF website, the project is under “planning and development” under the high-end mall brand Emporio.
Rents of retail spaces are down by 25-30 per cent from their peak in 2007-08 as demand slowed. Though demand for office spaces have picked up slowly, property consultants expect lukewarm demand to continue for retail developments.
Worli, which was a former hub of textile mills, is witnessing modern office developments by realtors such as Indiabulls, Bombay Dyeing and Century Textiles, and residential apartments command a price of Rs 22,000 per sq ft and above.
DLF made news in 2005 when it bought a 17-acre Mumbai Textile Mill land from National Textile Corporation (NTC) for Rs 702 crore. The company at that time announced it would build a futuristic retail-cum-entertainment complex on the land.
The new project is expected to be launched in the next four-five months after taking all the necessary approvals, the executive said.
According to property consultants, the company changed the plan several times as real estate market went through a prolonged slowdown.
However, DLF is not alone which converted its mall project into a residential one. Host of others such as DB Realty in Dahisar area of Mumbai, West Pioneer in Kalyan near Mumbai and TTK group in Bangalore also changed their plans to build mall to apartment projects.
Apartment prices have raised 15-20 per cent since mid-2009 as home buyers returned to the market. Earlier, prices had declined by around 40 per cent as home buyers stayed away.
Buoyed by response for its apartment projects, DLF is expected to launch 8-10 new residential projects in the next one year, according to sources. DLF, which stalled some of its office projects during the slowdown, is planning to launch two-three commercial projects in Gurgaon and Hyderabad.
DLF today sold 1,200 units of independent floors in its Panchkula Valley housing project in Chandigarh within a week of its launch.
The units were priced between Rs 30 lakh to Rs 60 lakh. The company is aid to have made around Rs 500 crore from the sale of units. The company originally planned to launch 500 units, but later increased it to 1200 due to good response, a release from the company said. The project was launched on Feb 18, 2010.
The company, which had plans to book these units in 45 days till March 31, 2010, closed bookings within seven days of launch as the bookings crossed 1200 units within 15 days.
Courtesy:- BS dt:- 26-feb-2010 |
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US NEW HOME SALES FALL IN DEC FOR 2ND MONTH IN A ROW |
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Sales of newly built US single-family homes fell unexpectedly in December, data showed on Wednesday, the latest indication that the government-led housing recovery might be losing some steam. The Commerce Department said sales fell 7.6% to a 342,000 unit annual rate from an upwardly revised 370,000 units in November. It was the second straight month that new home sales declined. US stock indexes fell on the data, while government bond prices held at higher levels.
“This isn’t good news. It should put some pressure on the market, especially coming after the disappointing outlooks we saw,” said Dan Cook, senior market analyst at IG Markets in Chicago. New home sales for the whole of 2009 fell 22.9% to a record low 374,000 units, the department said.
The data came as the Federal Reserve deliberated on monetary policy. The US central bank is expected to leave overnight lending rates near zero.
At its meeting in December, the Fed announced it would end purchases of agency mortgage-backed securities in March. The program has depressed mortgage rates, contributing to the housing market’s healing in recent months.
But the housing market recovery is showing some signs of fatigue after a surge in sales as first-time buyers rushed to take advantage of a popular tax credit, which had been scheduled to expire in November.
It has since been expanded and extended until June this year and while analysts expect home sales to pick up as a result, they reckon the pace will not be as strong as witnessed with the initial tax credit.
Courtesy:- ET dt:- 28-jan-2010 |
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Unitech again approach to DIPP for fund raising |
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The Second Largest Real Estate Company Unitech again approached to Govt. (DIPP) for approval for Real Estate fund raising
via FCCBs near about $700m (Rs. 3200 cr) in a single year third time.
Already in march of this year company raised $325m at price Rs 38.50
per share and in june Rs. 82 per share through External Commercial
borrowings (ECSs) which permitted by Govt in Jan 2009.
In jan 2009 the value of the Real Estate Company Unitech is one third of total debt
10,000/- cr and toady Real Estate Company Unitech shares closed at Rs 79.95, valuding the
firm at around Rs. 19,910 cr. At its peak, the firm was valued at
around Rs 87,370 cr. |
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DLF REJIGS TOP MANAGEMENT |
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Country’s largest property firm, DLF, has shuffled it top deck with its CFO Ramesh Sanka being replaced by Ashok Tyagi and hotel division head Shakti Singh leaving the firm.
A circular signed by company’s vice-chairman, Rajiv Singh, on Wednesday said that Mr Sanka, the group CFO, has been “promoted as the managing director of the office business.” He will lead office leasing business, facility management and utilities business. He joins A S Minocha, who now will change his role from executive chairman to non-executive chairman in the office business.
The transition had begun over a month ago, when Ashok Tyagi, who was until recently managing Mr Singh’s office, was asked to prepare for the CFO’s role. The existing finance, accounts, banking, tax and business planning teams across the group will now report to Mr Tyagi, according to the circular sent to employees. Sriram Khattar will replace Mr Tyagi in vice-chairman’s office.
There has been speculation around Mr Sanka’s exit from the group ever since the property market went into a downturn leading to DLF shares touching an all time low. The speculation about his exit coupled with the sale of some of his shares of DLF once sparked a massive sell-off in the market earlier this year. Mr Sanka and the company denied any proposed exit of the CFO, but speculation didn’t die down.
In another significant move, Shakti Singh, who spearheaded DLF’s hotel business has also quit. Mr Minocha will take over the hotel business. Y K Tyagi, an executive director in the hotel vertical, will continue to oversee Amanresorts, a luxury hotel chain DLF purchased in late 2007, and will report directly to the vice chairman.
DLF has recently restructured its entire business by dividing it into sale and lease verticals. The sale vertical includes all homes, and those offices and shops that are slated for sale. Malls and offices slated for leasing are part of the other vertical. The ‘lease’ vertical will now have Mr Sanka as it head, while the other vertical is headed by DLF MD T C Goyal.
In the past six months, DLF has witnessed other exits from its top rung. The company’s residential vertical head, A D Rebello, and SEZ head Yogesh Verma too quit to join other companies earlier this year
Courtesy:- ET dt:- 01-10-09 |
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PARSVNATH SCRIP ZOOMS, ANALYSTS FOXED |
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Shares of Delhi-based Parsvnath Developers zoomed 16% on Wednesday puzzling analysts who had expected that a lower than-planned fundraising via qualified institutional placement (QIP) could affect the stock.
Parsvnath shares closed at Rs 144.85 on Wednesday. Parsvnath Developers, which now has a market cap of Rs 2,660 crore, planned to raise $150 million via QIP, but later settled for just $35 million. A senior executive at Parsvnath said the company didn’t immediately need more funds. He added that 60% of the funds raised will be used to retire debt and the balance for the execution of existing projects.
Fidelity, Morgan Stanley and American Century were among those who invested in the Parsvnath’s QIP.
“I’m puzzled at the way stock has risen on news which should have been seen as negative,” said Shailesh Kanani, a real estate analyst with Angel Broking. Another analyst with domestic brokerage said there could be some other trigger for the stock to rise so much.
A company executive said the fundraising has eased the liquidity scenario prompting the market to re-rate the firm’s scrip.
Courtesy:- ET dt:- 01-10-09 |
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Parsvnath Developers Ltd |
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Parsvnath Developers Ltd have recently performed ‘bhoomi pujan’ and announced the launch of Parsvnath City Saharanpur. The project, spread over 107 acres, will offer plotted development, independent floors and expandable villas at affordable rates starting from Rs9.5 lakh.
Parsvnath Developers Ltd, a real estate company, is doing multi-facet construction activities for over two decades. It has attained the status of one of the leading real estate companies of India. The company has transformed barren tracts of land into landscaped green belts housing world-class commercial, residential and recreational properties. With pan-India presence across 47 cities in 16 States, Parsvnath Developers Ltd has a diversified portfolio which includes Integrated Townships, Group Housing, Commercial Complexes, Hotels, IT Parks and SEZs. As on date, the company has 98 ongoing projects and a total developable area of over 193 million sq. ft. across all real estate verticles. Through the length and breadth of the country, Parsvnath group has successfully completed 37 projects. Today, Parsvnath with its high commitments has become synonym for perfection, innovation, customer satisfaction and transparency. They are an ISO 9001, 14001 and OHSAS 18001 certified company. |
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THE VIEW’ (RAMPRASTHA GROUP) |
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The View’ residential project has been launched by Ramprastha Group. ‘The View’ project is strategically located in Sector 37 D, Ramprastha City Gurgaon - a township spread over 45 acres of land. Other specifications of the ‘The View’ project are – 0-km from Dwarka Expressway & Metro Station, 15 minutes drive from IGI Airport, right opposite to Reliance SEZ, a premium residential experience of luxurious villas, group housing, penthouse, plotted row houses & town houses, complete with ultra modern amenities like school, hospital, hotel, shopping mall, multiplex, golf club, post office and a temple. ‘The View’ has a great planned infrastructure to boast of.
Ramprastha group is a renowned real estate company, operating in Delhi/NCR for almost four decades. The company has planned and developed many prestigious projects including townships, plotted housing colonies, and a large number of group housing dwelling units. This is the first construction company to foray into building of self-sufficient colonies. Ramprastha group, with its innovative construction techniques and unique craftsmanship, has set inimitable benchmark for its competitors. Ramprastha group’s vision is to create and promote developments that are forward looking, innovative and tailored for specific markets, to promote Ramprastha development - a good place to live, work and enjoy life, to optimize personal development of staff through quality training and establishing and maintaining the highest standards of professionalism and ethics. |
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Festive time makes loans less expensive |
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With festivals round the corner, analysts believe developers will offer some attractive schemes to attract home buyers |
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Activity in the residential property market has increased quite significantly during the last couple of months. As consumer confidence is increasing, the developers are launching many new projects. Many of these projects are being launched with lesser frills to target the middle income segment using the affordable housing tag. As the festival season begins, analysts believe developers will offer some attractive schemes to attract homebuyers and book as many units as possible. Analysts also feel there are many factors that indicate property rates are at the bottom and could start rising in the medium term. The overall economic conditions are improving and the demand in the housing market is slowly picking up, which is expected to drive property rates upward. Also, the interest rates on housing loans are quite low due to the soft monetary policy adopted by the Reserve Bank of India (RBI) . Currently, banks have excess liquidity and the demand in the retail loan segment has been subdued during the last few quarters. Many banks are planning attractive home loan schemes to draw homebuyers during the coming festival season. Therefore, people looking at investing in property can make a serious attempt to get a good property and home loan deal. Usually, an investment in a housing property requires a long-term financial commitment for an individual. The housing loan usually runs for a long term (10 to 15 years) and therefore, it is very important to think through various financial aspects around it. Volatility in interest rates has increased quite a bit during the last few years and the cycles of interest rates- upswings/downswings – have become short (as visible during the last few years). Financial institutions have virtually stopped offering loans with fixed interest rates for the full tenure. Therefore, it is very important for those looking at taking a home loan to plan their monthly inflows and outflows well in order to avoid any defaults.
Courtesy:- ET dt:- 25-09-2009 |
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US HOUSING CONSTRUCTION RISES |
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Housing construction rose in August and the number of newly laid-off workers seeking unemployment aid fell unexpectedly last week, adding to signs the recession has ended. Still, the reports suggested a slow and fragile economic recovery.
In part, that’s because the increased housing starts were due solely to a surge in construction of apartment buildings — while the much larger single-family homes sector fell for the first time in six months. And jobless claims remain far above the levels associated with a healthy economy.
Even as the housing industry begins to recover from its worst downturn in decades, a glut of unsold homes and record levels of home foreclosures are weighing on the industry. Construction of multifamily homes and apartments rose 1.5% to an annual rate of 598,000 units, the highest level since November, the US commerce department said on Thursday
Courtesy:- TOI dt:- 18-09-09 |
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LUXURIOUS APARTMENTS AT EAST OF DELHI |
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Max City Developers brings to you state of-the-art architectural and engineering excellence called "Park Sapphire". Strategically located, just 2 km east of Delhi (Anand Vihar) in an integrated township spread over 100 acres of Ramprastha Greens in the very heart of Vaishali, the project has three high-rise 15-storey towers with luxurious two and three bedroom apartments and penthouses. The construction is in full swing with December 2010 the project completion time.
Courtesy:- HT Estates dt:- 19-09-09 |
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HI-TECH TOWNSHIP IN LUCKNOW |
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Omaxe Ltd. will develop a hi-tech township spread over 2700 acres (approx) in the heart of Uttar Pradesh in Lucknow. Garv Buildtech Private Ltd, a subsidiary of Omaxe, has signed a Memorandum of Understanding with Lucknow Development Authority to develop the Hi-tech Township in Lucknow.
The Hi-tech Township will be executed over a period of five-seven years. It will cater to the growing demand of quality living space in the city. The township is strategically located on the proposed Lucknow Ring Road, close to Lucknow Airport and an half-an-hour's drive from Hazratganj, center of Lucknow city.
Courtesy:- HT Estates dt:- 19-09-09 |
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REAL ESTATE REVIVAL STORY BEING SCRIPTED BY INVESTORS: ANALYSTS |
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The real estate revival story is being driven by the residential segment, but contrary to the claims made by a number of developers that end-users are their main buyers, the current trend is being driven by investors.
“These are investors who are taking an opportunistic view of the situation where prices have corrected considerably in many locations,” says Sanjay Dutt, CEO business at Jones Lang LaSalle Meghraj (JLLM). He estimates that a good 40% of the stock sold in the last few months would have gone to investors. In Delhi-NCR, this figure might be higher at 50%.
“Investors are back in good numbers and before the curve goes up, they want to buy. Some who have bought are already hoping to book profits during this Diwali,” he adds. This could be a precursor to further improvement in investor sentiments, since investors would take this as a sign to look towards a sustainable run in the future.
Investors took flight from the residential real estate market when the market crashed last year and many have been shy of venturing back. The last few months though have seen a number of affordable launches at price points, which have stimulated the market. Most developers have launched mid-income housing in the Rs 20-40 lakh range, which has created a movement.
While the short-term investor is there, interestingly, a good number of the investors are medium to long-term investors. “These investors are flocking to real estate because of the lack of other investment opportunities in the market at the moment,” says Ajit Krishnan, partner, real estate practice at audit firm Ernst and Young who feels the trigger for these investors was the drop in price points in the residential segment in the last eight months.
These investors are not purely speculative and are investing in real estate as a shelter against inflation, he says. Other investment opportunities today do not yield the same results.
Developers on their part are insisting that a majority of the buyers in their projects are end-users. As there is no set way to differentiate investors from end-users, Unitech looks at consumer behaviour to judge one from the other. “Investors usually are not too bothered about specification details, do not go for site visits too often. We have not seen such behaviour at our projects. It appears that a large majority are end-users,” says R Nagaraju, general manager of corporate planning at Unitech.
Wherever prices have been brought down to attract customers, there have been investors but Aditi Vijayakar, executive director, residential services at Cushman & Wakefield says these investors are mostly long term. “These investors are using this decline in the market to buy another property which they can decide on selling after the project is delivered,” she adds.
Alongside investors are endusers who are mainly interested in completed homes. “The question is of consumption. We are definitely seeing movement in completed properties which are being picked up end-users,” explains Krishnan.
Prices in the residential market in NCR-Delhi and Mumbai have started to climb up in the last months or so and Vijayakar warns that it is a little too early to raise prices. “In the medium term, it will not be sustainable for developers,” she says. There is a concern that the few end-users who have started to show interest might be deterred from making purchases if the prices of homes keeps rising.
Courtesy:- ET dt:- 08-09-2009 |
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REAL ESTATE SECTOR - SIGNS OF RECOVERY |
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Lower home loan rates, property price cuts, apartment downsizing and a recovery in the job market have helped to increase demand for residential projects. On showing interests by buyers, developers and builders have launched many new affordable projects across the cities. During early period of this year, interest in properties were being shown by business class and professionals whereas service class was not showing any interest owing to risk of job layoffs. Now on diminishing the risk of job layoffs, service class has also started showing interest in properties. Low property price is another aspect which has attracted the service class to real estate sector leading to a strong revival in demand for residential apartments.
With the return of liquidity to the real estate sector in form of FDI (Foreign Direct Investment), QIPs and bank loans in recent months, the financial position of realty players has started improving. Motivated by this, the developers and builders have started launching new affordable apartments to boost the real estate sector.
RBI has relaxed certain norms for realty companies. Loans granted by banks to housing finance companies for further lending to individuals for purchase/construction of dwelling units, may be classified under the priority sector if the loan amount granted is less than Rs 20 lakh. Priority sector lending attracting lower rate of interest will boost real estate sector.
Price reduction by 20-40% depending on project location and reduction in apartment size have brought a greater section of buyers into the fold. The increasing demand has induced many builders and developers to launch many new projects. The new launch tally is on increase. Downsizing apartments has reduced the cost of dwelling units by 50% enabling a lower segment of society to select a house at a better location or at the same location but at a lower cost. Cheaper home loans have further attracted more and more home buyers.
All these aspects have shown signs of recovery in real estate sector. |
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REALTY TRIES TO PUT DOWNTURN TO BED WITH 10-15% HIKE IN PRICES |
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Developers Jack Up Prices In Mumbai & NCR; Move Likely To Dampen Demand
With residential property buyers gradually returning to the market, especially in key regions like New Delhi-NCR (National Capital Region) and Mumbai, realty prices in these areas have moved up 10-15%. While some developers have increased prices across projects, others are doing it on a project-specific basis.
Industry trackers say the hike in prices could result in demand moving southwards. Realty fund Kotak Investment Advisors’ director, Vikas Chimakurthy, said, “There was a substantial demand, especially in the mature markets, after prices dropped a few months ago. Today, potential customers are not willing to buy properties at these (higher) prices.”Developers, meanwhile, confirmed the decision to hike prices. “We have increased prices across all our properties by 10%. It is not much and is the result of the improved market conditions,” said Abhishek Lodha, director, Lodha Developers, a Mumbai-based company that has projects in and around the city.
Delhi, like Mumbai, is witnessing a hike in prices of realty projects. DLF, the country’s largest real estate company by market capitalisation, is one of those whose properties will be dearer. “Yes, there has been a price increase though it is still limited to some projects nearing completion,” said DLF executive director Rajeev Talwar.
How long these prices will hold out is hard to determine. “Mumbai and some parts of New Delhi have been witnessing some rise in price and it will be interesting to see if these prices are sustainable. In other markets like Bangalore, supply still exceeds demand,” said real estate consultant Saffron Asset Advisors managing director Ajoy Veer Kapoor.
As realty gets pricier, there has been concern among buyers about whether this is purely on account of the economic scene improving or due to builders reaching an understanding among themselves. Though prices have not reached the 2007 levels, the hike has been enough to make buyers think twice. “We are still a while away from the 2007 levels, which could take two more years. In our case, we have increased prices by around 5% for our projects and are hopeful of a recovery by the end of this year,” said Hiranandani Constructions managing director Niranjan Hiranandani.
Courtesy:- ET dt:- 03-09-09 |
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Now the Boom in real estate market is coming up nation wide.
Its good time to invest in Real estate.
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Planning to take Space on lease – good time has started
Planning to expand your business – the commercial space is looking up. The good news is that the commercial segment in real estate is upbeat and demand is picking up. The process of stabilization has now begun over the last few weeks . Company which were hesitant earlier and now looking up to expand to viable location. A study by global real estate consultancy Jones Lang LaSalle Mehraj (JLLM). Shows commercial rental across all major cities reaching stability after an overall downward movement in the second quarter .According to the consultancy, absorption between 4-5 million square feet of commercial space was witnessed in the first quarter of 2009, which was higher than fourth quarter of 2008. As per research rates have changed by this way…….
| ROAD TO RECOVERY |
| Location |
Average Rental Value Rs./Sq.Ft |
3 Month (% change ) |
| DELHI & NCR |
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| CBD Prime |
255 |
-16 |
| South Delhi Prime |
174 |
-11 |
| Gurgaon Prime* |
80 |
-8 |
| MUMBAI |
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| South ( CBD – Nariman Point ) |
300 |
-14 |
| Central ( Worli) |
250 |
0 |
| Suburban (Andheri ) |
120 |
0 |
| Suburban ( Powai ) IT |
90 |
-10 |
| Suburban ( Powai ) Non IT |
115 |
0 |
| KOLKATA |
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| Park Street / Camac Street |
98 |
-2 |
| Rajarhat/ Corporate* |
31 |
-14 |
| Salt Lake Corporate * |
40 |
-11 |
| CHENNAI* |
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| CBD Anna Salai, RK Salai (Corp) |
65 |
-10 |
| Off CBD ( T Nagar , Alwerpet) |
60 |
-8 |
| Suburban ( Guindy) |
45 |
0 |
BANGALORE |
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| CBD/Off CBD |
77 |
-10 |
Suburban( CV Raman Nagar, Koran gala ) |
53 |
-9 |
Peripheral ( Whitefield / Electronic city) |
28 |
0 |
Source: The Economic Times
Date: 21 June, 2009 |
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Ansal Properties and Infrastructure to raise Rs. 1500 cr. Through QIP |
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APIL, The flagship company of the Ansal API Group has announced its intention to raise upto Rs. 1500 cr. By way of qualified Institution Placement (QIP). Mr.Pranav Ansal, Vice Chairman and MD, Ansal Properties and Infrastructure said ,“The raising of fund via the QIP route is a capital raising exercise for APIL . This QIP will also be used to partly fund and support the two large hi tech integrated township consisting of hotels, buildings , malls , IT parks , Bank , Group housing etc in Lucknow namely Sushant Hi-tech city of about 1760 acres and Megapolis in Dadri which spans over 2500 acres.
Source: The Economic Times
Date: 21 June, 2009 |
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Omaxe Bags orders worth Rs 128.34 |
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Omaxe Infrastructure & construction Pvt Ltd , announced that it has received an order worth Rs, 128.34 cr. (approx) from UP Projects Corporation Ltd ( a UP Government Undertaking ) for modernization of three projects in Orissa . The scope of work includes modernization of ESI Hospitals in Bhubaneshwar and Cuttak.
Source: The Economic Times
Date: 21 June, 2009 |
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Upswing in real estate market ………………
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Real estate market is gaining momentum again.
The realty market in the city is seeing a renewed interest after a long time. After a prolonged dry spell in real estate market buyers are now back specially in Residential segment. A big industrial city Ahmedabad is witnessed with a great interest, according to conservative estimates builder in Ahmedabad and Gandhi Nagar have raked in business worth Rs. 1000 Crore in the last one month.
According to estimates, in the last one month builder having projects in Ahmedabad and Gandhinagar would have done business of about Rs. 1000 cr. Mr. Patel Said, Vice president, GIHED (Gujarat Institute of Housing and Estate Developer).
“During the same period, there has been tremendous growth @ rate 20 % rise in bookings across all residential segments including Studio apartment, 2 Bed room, 3 Bed room flats, he added.
BSE Sensex has infused a lot of liquidity in the property market of Ahmedabad. The boom in Primary and secondary markets has infused a lot of liquidity. Those who have been postponing their Home buying decisions have been started making enquiries.” This boom has come after the Lok Sabha elections.
Source: The Economic Times
Date: 21 June, 2009 |
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RIGHT TIME OR RIGHT PRICE |
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The big wait is on. Buyers are all waiting for the lowest point in the real estate cycle where prices bottom out, enabling them to get an attractive deal. Namrata Kohli reports
To buy or not to buy has been the question. There are genuine buyers in the waiting but they are playing a cautious wit-and-watch game, hoping prices will rationalize themselves.
Gagan Gulati, a housewife, says: We have wanted to buy for the last eight to nine months. First, the values were prohibitive as the flat where we are staying on rent in Dwarka was a 3+1 unit, up for sale for Rs 92 lakh. However, the same flat is now available for Rs 86 lakh. We are hopeful that the values will correct further and it should be an affordable proposition for us to buy them within Delhi. We are quite fed up of waiting but as every penny counts, sanity lies in waiting, for the time being.
There was a time when it was an investors market and the end users had got elbowed out of the market what with values reaching unrealistic levels. Now, with market dynamics changing, developers have started lowering prices but values still haven’t reached attractive levels for end users. Hence, further reductions are needed in the interest of completing projects which are in various stages of construction.
The values have dipped but the buying activity has not picked up as popular perception is that values will fall further. There has been sufficient competition in the market amongst developers, with respect to pricing, says S C Jaisimha, Managing Director of Asia Pac International India. Everyday, we have been witnessing developers dropping prices in their ongoing projects and new project launch being launched at corrected price levels. There are new sectors which have come up on account of the new master lanes (in many Tier I cities), which has increased the availability. Jaisimha adds that supply has overtaken demand by almost 200%. Today's mantra for developers is liquidity and cash flows for early and timely completion of projects with reasonable margins, rather than looking at a long horizon for better margins So, in many pockets, we have already witnessed prices generally dropping in the region of 25-30% and in some exceptional cases, close to 50%. With this, we believe the prices have dropped to reasonable levels, which has prompted some genuine buyers to scout for properties of their choice and budgets. Having said this, there is still a perception in the market that the pricing has not bottomed out. So for the time being, it is a wait-and-watch scenario for most of them.
There has been a significant drop in transaction volumes with high interest cost on loans, which has been prevailing free over a year now, also being a reason. But slowly and steadily, this is also coming down, which would generate demand in the medium to long term.
So, what has been the drop in transaction volumes? According to Vivek Dahiya, director of occupational and development markets at DTZ: There was a significant drop in transaction volume in Q4 of CY 2008. Some brokerage firms focusing on residential transactions oly saw volumes come down by 50%-70%.
Today, ready-to-move-in apartments are really selling, albeit with low premiums compared to projects under constriction. The new projects with realistic pricing have attracted genuine buyers.
Significantly, the direction in which demand is moving and the supply is following suit, suits the mid-end housing. Jaisimha says: The hot market today is the middlemen or the affordable housing in a budget range of Rs 20 to 30 lakhs for a decent 2-bedroom accommodation. Some developers visualized the importance of this and have already made inroads into this category. So, today you see various leading builders like DLF and Unitech announcing schemes for affordable housing. The recent response to allotment of flats by DDA is a classic example of genuine buyers waiting to buy at reasonable and realistic pricing nearly 8 lakh applications for just 5000 flats says everything.
The big question is when will real estate prices actually bottom out. Dahiya says: Reduction in rates will carry on through 2009 and in some micro-markets or product types even till 2010. Essentially, markets or segments that witnessed the steepest resin the 24 month during 2006-07 will continue to get rationalized over the next 4 quarters. Transaction activity is beginning to pick up, but only marginally, and in select locations and projects depending on attractiveness of rates.
However, developers would have us believe that whatever correction was possible has already happened and the properties are today available at best prices. Brijesh Bhanote, vice president sales and marketing at Vipul Limited, says: I think the real estate values have already gone through a big correction and the only way now for it is to go up. The margins at which developers are operating today are any way so low that sustenance can become an issue with many who have not regulated their finances.
Rohtaz Goel adds that the residential real estate is offering best deals to its buyers in current scenario. Most developers have already squeezed their margins to the minimum level, and hence we don't see any further price correction in the real estate. The projects are therefore available at the best price to both end users and investors.
At the same time, they recognize that the demand for affordable and mid-income housing is constant. They feel optimistic that the recent cuts in repo rates and CRR rates will further help in softening the interest rates in the coming months and bring the customers back to the market.
Courtesy:- Times Property dtd:- 21-02-09 |
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PRESIDENT OBAMA UNVEILS $275 BILLION HOUSING RESCUE PLAN |
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$758 Lifeline For Homeowners, $200b To Freddie Mac & Fannie Mae
US President Barack Obama on Wednesday targeted the housing crisis at the root of the US economic meltdown, with a program which could cost $275 billion and reach nine million homeowners.
The strategy includes $75 billion designed as an incentive for lenders to reduce interest rates to prevent at-risk mortgage debtors joining the millions who have already fallen victim to foreclosures.
The government will also put up an additional $200 billion dollars to bolster confidence in efforts by federal lenders Freddie Mac and Fannie Mae to offer affordable mortgages and bring stability to the housing market.
Obama opened the new front in the broad battle against the economic crisis a day after signing a huge, $787-billion stimulus plan into law, and as he simultaneously attempts to restructure the debilitated US auto industry.
"All of us are paying a price for this home mortgage crisis and all of us will pay an even steeper price if we allow this rises to continue to deepen," Obama said as he unveiled the plan in Arizona, one of the states worst hit by the crisis.
"When the housing market collapsed, so did the availability of credit on which our economy depends. "We will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure," Obama said.
Treasury officials said the plan could reach or make affordable one-and-a-half trillion dollars in mortgage debt and deal with a large proportion of the six million foreclosures expected over the next four years.
The plan includes incentives for lenders to help debtors who cannot make monthly payments but also cannot sell their homes due to negative equity, to lower mortgage payments to no more than 31% of their income.
The plan will see the treasury department double its financial support to troubled mortgage finance giants Fannie Mae and Freddie Mac, to $200 billion each, in an effort to stabilize the real estate sector.
A $75-billion initiative will target those who cannot afford to pay their mortgages and have seen the price of their properties plunge so cannot sell them and move into cheaper accommodation.
The initiative also aims to help families who put money down on homes and met their regular payments, yet cannot take advantage of refinancing made attractive by low mortgage rates because the value of their homes have sharply dropped.
Fed sees unusually prolonged recovery
THE United States' economy would face an "unusually gradual and prolonged" period of recovery as it struggles to climb out of a deep global downturn, the US central bank has warned. Releasing its economic outlook for 2009 on Wednesday the Federal Reserve or Fed said it expected that the economy would contract by 0.5% to 1.3% this year, unemployment would rise to 8.5% to 8.8% and inflation would remain under greater pressure. Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates "more than offset" any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook. — IANS/Washington
Courtesy:- ET dtd:- 20-02-09 |
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A HOME OFFICE IS THE EMERGING TREND TODAY. WITH TIME BEING A LUXURY, MANY ARE OPTING TO SPEND ON A FULL-FLEDGED HOME OFFICE. |
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With new houses mushrooming every day and commuting becoming the bane of our lives, coupled with high levels of noise pollution, the concept of home offices are becoming increasingly popular. Whereas America has had this concept for decades, it was earlier meant for women working part time where they could fulfill the dual demands of running a home as well as their careers. No longer is this true, Jyoti Aggarwal a financial analyst for Wall Street mostly runs her office from her Manhattan apartment, whereas Neera Raj a full time realtor has a beautifully appointed home office in her New Jersey mansion. The same is true here as well. Many executives, COOs, designers, architects run their office from home. Not only does it give them flexible work hours, but those who operate from their corporate offices can come home early enjoy a workout at a local gym and get back to work with their shoes off in the leisure of their home offices.These spaces are not meagerly done up to work as a make shift back office, in fact detailed planning and execution goes into these specifically demarcated areas.
In a lot of cases these spaces are modern and functional while others have beautifully laid out carpeting, chandeliers, mahogany desks and of course the laptop, with a seating of a comfortable sofa set, coffee tables to match for those meetings conducted at home even on a weekend.
Jagdeep Rangargh, head of Stork Group of Companies, has a lovely home office in his DLF home and he completely enjoys working from there. Complete with wooden flooring, a desk and his computer, he manages his entire group of companies even though he travels around the world for his business meetings. His wife Poonam reveals that many a Sundays, he works from here and is also able to catch up on a game of golf, while he can come home early and work late into the night whenever he wants. Lined with a complete library, this is where Poonam catches up with most of her reading while Jagdeep works.
Aashish Thakur, head of Ashwin Enterprises has a modern and functional home office in the basement of his house. Done up in light wood, the basement has been divided into portions as work stations with glass doors separating them. The other part is his wife Anjali's, who runs her design business from there. Interiors and furniture is their concern and a home office in their Phase-III home is definitely an advantage, apart from his main office.
Courtesy: - ET Realty dtd:- 29th August 2008 |
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ENERGY NORMS MAY BE MADE MUST FOR REALTORS |
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It may become mandatory for developers to design and construct buildings, which consume more than 500 kw, according to Energy Conservation Building Code. Bureau of Energy Efficiency (BEE), the statutory body under the power ministry, may make it must for developers to adhere to energy-efficiency norms. ECBC sets minimum energy performance standards only for commercial buildings or complexes with a load of 500 kw or more. "By the end of this year, we plan to make it mandatory for the developers to follow Energy Conservation Building Code (ECBC)," BEE director Ajay Mathur said. Mandatory enforcement of ECBC is expected to yield annual saving of 1.7 billion units in the first year itself based on current data. "So far, over 320 buildings in the country have been built as per the code, many more will be added to the list," he said. Earlier, BEE had announced making energy standards mandatory for the consumer durable sector.
Courtesy:- ET dtd:- August 11, 2008
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UN, MITTALS TO SET UP MILLENNIUM VILLAGE IN AMARPURA
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After successful phase 1, co to build 350 low-cost houses in kundli
Delhi-based realty firm TDI is planning to invest Rs 1,000 crore to build lowerpriced homes in the national capital region in the next three years, a senior company executive said.
“The demand for homes is coming back slowly,” said TDI managing director Kamal Taneja, adding that the company was focusing on lower priced homes to attract buyers. TDI, which has its real estate projects spread over Delhi, Kundli and Panipat in Haryana and Mohali in Punjab, recently launched 350 residential units in Kundli and claims to have sold all of it in just a month. The company is now planning to launch another 350 homes over the weekend in Kundli, around 35 kms from central Delhi. The 900-sqft independent floor homes will be priced between Rs 16.50-19.50 lakh. The company will invest around Rs 1,000 crore to build a total of 700 homes in Kundli over the next three years, Mr Taneja said.
TDI has tied up with architectural firms Drew Dickson Associates of Australia and HO Partners of Hong Kong for development of its 1600-acre Kundli township. Following a revival in the capital market, many listed real estate companies, including Unitech, HDIL and Sobha, have raised funds via QIP, while some other unlisted firms such as Lodha Developers and Emaar MGF, are lining up their initial share sale. But Mr Taneja says the market is still volatile and an IPO is not on the cards for TDI immediately.
He says his company is relatively less leveraged and doesn’t intend to go in for any private equity deals either immediately and would focus on selling homes to raise cash. “There is very little private equity money available and there are too many developers chasing it. Also, private equity investments made these days are actually debt structured as equity,” he says, explaining why he is not excited about getting PE fund infusion in his company.
Courtesy:- ET dt:- 21/08/2009 |
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SAHARA PRIME CITY PLANS TO RAISE RS 5,000 CR IN IPO
Sahara group’s realty arm Sahara Prime City is planning to raise up to Rs 5,000 crore by this year-end through an initial public offer (IPO) and will approach market regulator SEBI later this month in this regard.
The company is believed to have engaged investment bankers, including Kotak, Enam and JM Financial, for the public issue, market sources said.
The draft prospectus for the IPO is being readied and the same could be filed with the Securities and Exchange Board of India by the end of this month.
No comments could be obtained from the Sahara group spokesperson, but sources said the group would wish to launch the IPO by the end of this year, subject to Sebi approval.
Sahara Prime City will be the third Sahara group entity to enter the capital market after Sahara Housingfina Corp Ltd and Sahara One Media and Entertainment Ltd. It is present in over 200 cities with its housing and commercial projects. However, the group’s ambitious Ambey Valley project is not part of the company
Courtesy:- BS dt:- 21-08-09 |
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DLF BAGS GURGAON LAND FOR RS 1,750 CR |
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After Africa and other third world nations, the United Nations (UN) has now chosen India to set up its dream village. UN, in collaboration with Mohanlal Mittal-led Gita Mittal Foundation (GMF), aims to establish a millennium village in Amarpura-a small village in Rajgarh district of Rajasthan-which would require investments of close to $15-20 million over five years. The idea is to fulfil the basic needs of infrastructure, health, education and employment for the local population.
Mr Mittal's three sons-LN Mittal, owner of the world's largest steel firm Arcelor Mittal, and Pramod and Vinod, promoters of Ispat Industries-would be primarily involved in the funding process. The association is now awaiting final nod from the state government and is slated to begin work on the project by this year-end.
The project is structured around the millennium development goals that the UN laid out in 2000 as part of an ambitious plan to reduce global poverty. The concept of millennium villages is the brainchild of economist Jeffrey Sachs, who is also a special advisor to the UN secretary-general. So far, UN has helped corporates build over 100 such villages globally.
Besides, GMF is planning to set up 32 centres of excellence across Rajasthan with an investment of close to Rs 100 crore over a period of 3-4 years to help students become employable. The foundation has tied up with the Indian Institute of Management, Ahmedabad, (IIMA) for the same. While Mittal brothers would set up the infrastructure, faculty and curriculum would be taken care of by IIMA.
These centres would offer various short-term subsidised post-graduate courses, primarily related to accounts, finance and personality development. The first centre would come up in Churu district of Rajasthan. Under the first batch, the foundation aims to enroll at least 500 students.
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Our group company is located at:
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Kohat Enclave, Pitampura,
Delhi-110034. |
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