BANGALORE CLASSIFIEDS

DLF TO SELL STAKE IN JV TO RAISE FUND
July 4, 2009 – 12:36 pm
DLF is looking to raise Rs 300-500 crore by selling its stake in a JV with Mumbai-based realtor Akruti City for a commercial project in Andheri.
DLF has already scrapped a 5 star hotel project in Prabhadevi in Mumbai with Akruti. DLF was the majority stakeholder in the project. DLF has been looking to monetise its non-core assets to raise funds over the next one year to pay off its debt.
The company had net debt of Rs 13,958 crore, of which Rs 3,591 crore is due for repayment this fiscal. The developer has also put its wind power business on the block and is expecting to collect about Rs 900 crore from it. DLF said it would reduce its outstanding debt by half in this financial year by raising about Rs 5,500 crore through assets sales, plot sales and cash flow from the business.
By rajani | Posted in Property News | Tagged Akruti, Andheri, Commercial project, DLF, JV, Mumbai | Comments (0)
“AFFORDABLE HOUSE” OR A COMPROMISE?
July 2, 2009 – 1:49 pm
Finding a home in metro cities is not cup of tea for a middle class family. If we talk about affordable house projects, either such houses are in far fringe areas or a result of poor design, cheap production material and lack of space. This simply means that buyers have to do some compromise with their expectations. Many real estate companies are launching houses at 10-20 lakhs. But most of them are not up to mark. If we talk about tier II and tier III cities, those who are working in metro cities cannot move towards small towns for a house.
As per my opinion, there should be some design standards for builders and if they offer affordable house, cost cutting must not affect the design and production material issues.
By rajani | Posted in Property Advice | Tagged affordable house, Metro Cities, projects, Real Estate | Comments (0)
PVP SELLS PROPERTY TO SRM
June 30, 2009 – 2:56 pm
PVP Ventures has sold its 90- ground prime property at Vadapalani in Chennai to education group SRM for Rs 140 crore. The property developed over 90 grounds with a built-up space of 3 lakh square feet. SRM University has chalked out big plans for making use of the office space. It is in the process of setting up its admissions office.
PVP Ventures has been on a property selling spree and the deal with SRM comes on the back of the sale of its theatre complex in the city’s suburbs and a hotel property in Ooty. The company is learnt to be selling its properties in an effort to focus on its core businesses of urban infrastructure and power generation.
By rajani | Posted in Property News | Tagged Chennai, Company, Hotel, ooty, Property, PVP, SRM, Urban Infrastructure, Vadapalani | Comments (0)
WHAT DOES AN AFFORDABLE HOUSE MEAN?
June 24, 2009 – 1:06 pm
We often hear that real estate has a new concept for middle class family, which is so called “Affordable house”. Almost everyone showed a positive attitude for such concept because when it comes about a middle class family, everyone thinks about the cost. But is this concept feasible? Almost all developers are offering 1BHK flat in far-flung are with a name “Affordable house”. According to Mr. Deepak Parekh, chairman of HDFC, “Affordable housing is not about box-sized, budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure”.
Affordable house should be such a housing solution which has economic sense in terms of proximity of work place. This concept also requires public and private sector collaboration.
By rajani | Posted in Property News | Tagged affordable house, Deepak Parekh, Hdfc, Private sector, public sector, Real Estate | Comments (0)
DLF GETS APPROVAL FROM GOVERNMENT
June 23, 2009 – 1:09 pm
The government has provided in-principle approval to DLF to denotify four of its IT, ITES Special Economic Zones (SEZ), which the company did not want to build because of the slowdown in the real estate business.
However, the denotification will be subject to the condition that DLF returns all the tax benefits that it had taken from the centre to build those SEZs. A senior official said that the denotification will be issued only after the development commissioners of respective states give the certificate that all the tax benefits that the company had taken, has been refunded.
By rajani | Posted in Property News | Tagged Company, Development, DLF, Government, IT, ITES, Property, Real Estate, SEZ, Tax, Tax Benefits | Comments (0)
INDIABULLS READY TO MEET DEMANDS
June 22, 2009 – 4:24 pm
Indiabulls Real estate has planned to use more than five hundred million dollars to launch projects at a time. This money is raised from a recent share sale. Mr. Gagan Banga, CEO, said that their aim is to launch 6-7 residential projects in this FY. He showed interest towards pursuing some large projects.
Indiabulls is expecting a strong demand at projects in tier-II cities such as Baroda, Ahmedabad and Indore as these have been appropriately priced, between 2,000-5,000 rupees per square feet. Indiabulls is assured that they can meet the increasing demands for residential real estate.
By rajani | Posted in Property News | Tagged Ahmedabad, baroda, Indiabulls, Indore, Real Estate, Residential Projects, Tier II | Comments (0)
DEVELOPERS MAY GET TO BUY BACK BUILT-UP SPACE IN STPI
March 19, 2009 – 7:13 am
The department of industrial policy and promotion is considering a proposal to allow real estate developers to buyback built-up area sold in software technology parks of India (STPI) units and lease out it to other businesses.
The issue came up in the last meeting of foreign exchange promotion board (FIPB), when the board took up real estate company Information Technology Park’s request for a clarification whether it could buyback built-up space constructed by ITP itself and lease out the same to other businesses. The company has set up an information technology park under the industrial park policy.
The STPI policy entails exemption from income-tax for IT companies for a decade for setting up IT units. The tax benefits are expiring next year. There are around 6,000 IT units across the country registered under the STPI scheme.
The company has informed the board that as the STPI benefits would expire in a year, most of these units are not expanding and consolidating in SEZs and hence, these units have offered to the company to buyback the built up space sold by the company to them. The company has now sought clearance from the board whether it could buy back the built-up space and lease out to other business units.
By rajani | Posted in Property News | Tagged builders, FIPB, Information Technology Park, IT, Real Estate, Real Estate Company, Real Estate Developers, SEZ, Sezs, Software Technology Park, Software Technology Parks, STPI | Comments (1)
HG TO INVESTS IN HOTEL INDUSTRY
March 18, 2009 – 7:18 am
Hiranandani Construction part of the Mumbai-based real estate developers, Hiranandani Group, is looking to invest more than six hundred forty crore rupee for developing five new hotels in Mumbai, Bangalore, Chennai and Hyderabad.
The company is in conversation with 8 international hotel brands for contracts. The company plans to fund the expansion programmed through debt and reserves, in an equal manner. MD Mr. Surendra Hiranandani said, “We azure confident of raising the debt required”.
One of the 5 properties, the one for Chennai, will be a boutique hotel with with about sixty rooms and buy it for thirty crore rupees. The other hotel, also in Chennai, a 5-star property, will have more than three hundred rooms and be built with an outlay of three hundred seventy-five crore rupees.
The company’s Mumbai hotel, a 5-star one to be built for one hundred forty crore rupees, will come up in Powai.
By rajani | Posted in Property News | Comments (2)
REALTY COSTS LESS
March 17, 2009 – 3:04 am
Real estate developers have got a new way of perking up the market. Unitech, DLF, HDIL, BPTP and other big realty giants are offering a 30-40% discount on ongoing projects.
According to analysts such projects will help stimulate demand and bring in the much-needed liquidity in the industry, which is already dealing with unsold stock in projects that were launched in last one year.
In last quarter, DLF has launched a project each in Hyderabad and Bangalore. DLF executive director Mr. Rajeev Talwar said that about 500 units have already been sold in the price range of Rs 1,850-1,890 per square feet.
Transactions are still slow and people are taking a lot longer to decide. Buyers are still uncertain about the delivery capabilities of developers, as the market has seen a number of projects going beyond deadline in recent times.
By rajani | Posted in Property News | Tagged Bangalore, BPTP, Delivery Capabilities, Hyderabad, Liquidity, Ongoing Projects, Real Estate Developers, Talwar | Comments (0)
BUILDERS UNDER PRESSURE AS BUYERS FORCE FOR REFUND
January 13, 2009 – 1:21 am
Some of India’s largest real estate firms such as DLF, Unitech, Omaxe and Parsvnath that launched multiple projects at the peak of the real estate boom are now under pressure from buyers and investors who look to exit these projects.
Already in a difficulty due to unavailability of bank loans and a fall in sales, the developers are less inclined to oblige the buyers who are coming together to mount pressure for refunds in projects that are yet to take off.
Several buyers and investors, angered by the developers’ inability to start work on projects, have stopped payment of installments on their purchases, adding to the companies’ cash problems.
Investors in DLF’s commercial projects in Delhi and Kolkata have come together with the help of brokers to put pressure on DLF to start construction or refund initial deposits.
The broker says DLF has not even paid the government to convert the industrial plots at Shivaji Marg and Okhla in Delhi into commercial plots. However, a DLF spokesman denied this saying, “We go by the agreement with the buyers signed at the time of booking. The allegations over the status of our projects are not true. We will deliver as per schedule.”
Several projects of Omaxe, Unitech and Parsvnath are also facing similar problems. Akash Verma, a Noida-based garment exporter, had booked an apartment each in projects of Omaxe and Unitech in Noida. He booked an apartment at the ‘soft launch’ of Omaxe’s Noida project in May 2007. Omaxe had promised to launch the project formally a few months later at a higher rate. The formal launch never happened and investors like Mr Verma are stuck. Omaxe has turned down requests for a refund. An Omaxe spokesman, however, said the company has ‘considered and taken care’ of all such requests.
Mr Verma has also been unsuccessfully seeking a refund of his investment in Unitech’s Grande project. “I am paying Rs 4.5 lakh as EMI. Unitech executives say the project will be delivered on schedule, but there is no worker at the site,” he says. A Unitech spokesman said, “We generally discourage cancellations. But if the buyers insist, we refund the money after deducting 10-15% of the total value of the apartment.”
Most realty firms do not encourage refund requests. Till the end of 2007, investors could easily sell their property in open market as the prices were going up. But with buyers disappearing from the market, investors are forced to approach developers for refunds.
Some property buyers are seeking refunds due to their weakened financial positions, while several others do so as they are not sure of the developers’ ability to complete the project. There are a few others who seek refunds as they feel that they can strike a better deal now with prices undergoing a major correction.
By rajani | Posted in Property News | Tagged Allegations, Apartment, Bank Loans, Commercial Plots, Commercial Projects, Developers, Industrial Plots, Initial Deposits, Installments, Kolkata, Launch, Marg, Omaxe, Parsvnath, Real Estate Boom, Unitech | Comments (1)
SPANISH INVESTMENT IN INDIA INCREASES
January 12, 2009 – 6:14 am
The Spanish investments in India rose five times to $158 million in last year. Over ten leading companies entered the country during the period, according to senior Spain government officials. “Many Spanish companies are present in sectors like infrastructure, insurance, auto components and ports and more are keen to enter the market as India’s economy is quite promising,” Javier Sanz, chief executive officer of ‘Invest in Spain’ said. ‘Invest in Spain’ is a government agency for promotion and attraction of foreign investments in Spain.
Spanish firms such as Navantia (naval construction) Dragados (container terminal), Grupo Roca (parryware), Gropo Antolin (auto components) Mapfre (insurance) Televent (urban infrastructure), Isolux (infrastructure) Cobra (infrastructure) and Indolink (consultancy) set shop in the country in the past one year. “Spanish investment in India was $158 million during the first three quarters of calendar year 2008. This had increased by 500% from the previous year,” Mr Sanz said. ‘Invest in Spain’ recently met fourteen well-known Indian entrepreneurs to explore business opportunities.
“Our companies have been investing in the automotive and infrastructure segments in India. One of our firms, Caf (Constructions y Auxiliar de Ferrocarriles), is working with Reliance on the stretch of the Delhi metro project connecting the railway station to the airport,” Embassy of Spain, Economic and Commercial Counsellor, Teresa Solbes said. Spanish fashion retail giant Zara is also keen on investing in India. Last week, Indian corporates like Infosys, Tata Consultancy Services, ICICI Bank, Essar Group, Navneet Publications, X L Telecom & Energy, Tata Motors and Kingfisher Airlines met Spanish delegates. Spain is seeking Indian investments in the ICT, renewable energy, biotechnology, aerospace and logistics sectors. India’s investments in Spain have been fairly insignificant.
By rajani | Posted in Property News | Tagged Commercial Counsellor, Delhi Metro, Embassy Of Spain, Foreign Investments, Indian Corporates, Indian Entrepreneurs, Indian Investments, Investing In India, Kingfisher Airlines, Metro Project, Navneet Publications, Parryware, Retail Giant, Spain Government, Spanish Companies, Spanish Fashion, Spanish Firms, Tata Consultancy Services, Tata Motors, Urban Infrastructure | Comments (0)
BANK LOANS FOR HOSPITALS AND HOTELS ARE NOT COMMERCIAL
January 9, 2009 – 1:46 am
Loans extended by banks to hotels and hospitals may no longer be treated as commercial real estate category. The Reserve Bank of India revised norms on real estate exposure where it included loans extended against security of future rent receivables from commercial real estate exposure.
The revised norms will not immediately impact banks’ balance sheet. This is because standard provisioning for real estate companies were brought on a par with all other industries on November 15, 2008.
As a part of the stimulus package, the general provisioning requirement on standard advances for commercial real estate sector has come down from 2% to 0.04%.
However, under reducing the standard provisioning for commercial real estate, RBI had said that they were counter cyclical prudential measures. This means that as and when the economic cycle changes, RBI may increase provisioning norms on commercial real estate sector.
Meanwhile, on Thursday, RBI has continued to maintain that SEZs will be treated as commercial real estate. In case of hotels, the cash flows would be mainly sensitive to the flow of tourism, not directly to the fluctuations in the real estate prices.
In the case of a hospital, the cash flows in normal course would be sensitive to the quality of doctors and other diagnostic services provided by the hospital. In these cases, the source of repayment might also depend upon the real estate prices to the extent that the fluctuation in prices influences the room rents, but it will be a minor factor in determining the overall cash flows.
In these two cases, the recovery in case of default may partly depend upon the sale price of the hotel or hospital. Considering that repayment is not dependent on real estate prices, recovery is only partly dependent on the real estate prices, RBI decided not to treat them as real estate exposures.
Justifying its stand on treating loan against future rent receivable as real estate, RBI pointed out that a few banks have formulated schemes where the owners of existing real estate such as shopping malls, office premises agree to repay loans from the income that is generated from the rentals by these properties.
Such finance may or may not be secured by the mortgage of the underlying properties. In case it is unsecured, the repayment will be sensitive to fall in real estate rentals and there would be no source of recovery in case of default. In case the loan is secured by mortgage of the underlying property, both the repayment and recovery would depend upon property prices.

By rajani | Posted in Property News | Tagged Bank Loans, Bank Of India, Cash Flows, Commercial Loans, Commercial Real Estate, Economic Cycle, Fluctuations, Hospitals, Norms, Real Estate Sector, Reserve Bank Of India, Room Rents, Stimulus Package | Comments (0)
REALTORS RENEGOTIATE DEALS, PUT PROJECTS ON HOLD
January 9, 2009 – 12:38 am
With the information technology and business process outsourcing companies facing an uncertain future following a recession in the US, some real estate players developing space for these companies are being forced to shelve their projects, while others are slashing their rentals and renegotiating lease agreements to stay afloat.
For these real estate developers, already reeling under the impact of a crash in property prices and a severe credit crunch, the demand from IT-BPO sector is shrinking fast. The rentals for IT ready-office spaces have already crashed by up to 40%.
India’s IT-BPO sector, which was growing at a breakneck pace of about 30% in the past five years, is expected to be affected by the economic crisis in the US market. Work outsourced by the US firms accounts for about 65% of the revenues of the sector.
Mumbai-based realty firm Housing Development and Infrastructure (HDIL), which is developing two IT SEZs in Kochi and Mumbai, has decided to go slow till the real estate and IT industries make a recovery. “Since rentals have crashed by 25-40%, there is no point developing these projects immediately,” said Ashok Kumar Gupta, a director of the company.
Some developers are offering lower prices to push their projects. Ganesh Housing, which is developing a 6 million square feet SEZ in Gujarat, is negotiating with potential clients. “Gujarat can offer cheaper space compared with IT hubs like Pune and Bangalore,” said Bhavin Mehta, in charge of business development at the company.
Several real estate players in India’s IT capital, Bangalore, are facing the harsh reality. Srinivas Reddy, who has developed some 18,500 square feet space in Bangalore’s Electronic City, has been quoting a rent of Rs 40 per square feet.
Finding no takers, Mr Reddy is now open to negotiations. Bangalore-based Ranka Group, which has developed 1 lakh square feet at KR Puram, finds itself in a similar situation. “We are demanding a rent of Rs 45 per square feet but potential clients are not willing to offer more than Rs 35 per square feet,” said AK Shetdy, the group COO.
Several real estate brokers are now doing the rounds of IT firms to renegotiate lease agreements. “Renegotiations on lease rentals are bound to happen now since the real estate prices have crashed considerably. The biggest problem for the realtors will be the projects that are under construction and those that have not yet been occupied,” said Raman Roy, CMD of Quatrro BPO Solutions.
Consultants say IT companies will increase pressure to reduce rentals when the date of renewal of the lease agreements comes near. “Typically, these lease agreements are signed for a period of three years and have an automatic rental escalation clause. Since rentals have crashed below the levels prevailed 2-3 years back, renegotiations will happen for sure,” said Anshuman Magazine who heads the South Asian operations of global real estate consultancy CB Richard Ellis.
By rajani | Posted in Property News | Tagged Breakneck Pace, Business Process Outsourcing, Credit Crunch, Economic Crisis, Electronic City, Harsh Reality, Housing Development, Kochi, Lease Agreements, Office Spaces, Real Estate Developers, Realty Firm, Work Outsourced | Comments (0)
COMMERCIAL PROPERTIES ARE WAITING FOR TAKERS
January 8, 2009 – 5:21 am
The slow down in the global economy has led to huge vacant office spaces. According to reports, empty offices in New York City, Chicago and Los Angeles have already exceeded 10%. And Mumbai, too, is following a similar path. “It’s the same story here, and it has to do with the global meltdown,’’ said a CEO of a leading city-based real estate company, who did not wish to be identified. Real estate observers say that the city’s premier commercial business district of Nariman Point has been witnessing a growing number of empty offices. It is learnt that for the first time in several years, there is space available in grade one buildings in Nariman Point. In fact, the business hub has seen vacancy levels in grade one buildings rise to 11%, said sources tracking the rental market. Till recently, the vacancy level was barely 2% in this area.
According to a report by the US-based Urban Land Institute and PricewaterhouseCoopers, commercial real estate in America faces its worst year since the “wrenching 1991-1992 industry depression’’. The report predicted 15-20% losses in real estate values, from the mid-2007 peak, and quoted real estate industry experts expecting financial and real estate markets in the US to bottom in 2009, and then flounder for much of 2010. Since the last quarter of 2008, all the prime commercial business districts such as Nariman Point, Bandra-Kurla Complex and Parel have been affected. Corporates and MNCs are not renewing their lease agreements and are shifting out. But even as the demand slackens, at least 5 million square feet of office space is expected to hit the market this year in the mill land enclave of Lower Parel. Sources say that the vacancy levels, which are in the region of 5%, could increase in the coming months. In Parel, several corporates have renegotiated their lease agreements by hammering the price down by as much as 40% to 50%.
Kaustuv Roy, director Transaction Services of global property consultancy firm, Cushman & Wakefield, said vacancy levels have been inching upwards largely due to a change in corporates’ business strategies as visible in the last six to nine months. The firm’s research shows a 6.4% overall vacancy in Mumbai. “Many corporates are relocating from high cost to lower cost locations, thus ensuring locations such as Worli seeing a marginal increase in the vacancy levels. The demand side has been very slow and cautious. This has slowed down the rate of absorption of office space over the last year,’’ he said.
Mumbai received almost 9.5 million square feet of office space, leading into an excess supply situation in certain locations. Kaustav said this trend will continue in the first few months of 2009 as a large supply of 16 million sq ft is expected, most of which is due in the first six months. Knight Frank India chairman Pranay Vakil said that up to 80% of the office market is driven by the IT-ITES industry, which has now considerably slowed down. “It is no surprise that vacancy levels will go up in this segment as most of the stock was created in anticipation of the demand. In Parel, for instance, offices are getting created but the demand is not there,’’ he said.
In the US, the New York Times reported that in Chicago, demand has dried up just as office towers are nearing completion. Vacancies are also rising in Houston and Dallas, which had been “shielded from the economic downturn until recently by skyrocketing oil prices and expanding energy businesses,’’ said the NYT report. Anuj Puri, chairman and country head of Jones Lang Laselle Megraj, said the only connection between these cities is the meltdown of financial markets. “It is not just about New York and Mumbai. This is a worldwide phenomena. Some of the office space in all major cities will be freed by big investment banks, which have disappeared. Nothing will dramatically change in 09, from what we have seen in the last quarter of 08,’’ he said.
Commercial lease rental market has seen rents dropping on an average of 20% to 25% and going up to 50% in certain locations like the erstwhile mill land enclave in central Mumbai Lease rentals in Nariman Point are currently hovering around Rs 375-Rs 400 per square feet a month in premium buildings compared to Rs 475-Rs 500 per square feet a month nine months ago. Rentals in grade C buildings hardly command Rs 250 per square feet. In Parel, office space which was being leased out at the rate of Rs 300 to Rs 350 per square feet a month four months ago, is now down to Rs 150-Rs 200 per square feet a month. In the BKC, too, there has been a drop from an average of Rs 400 per square feet six to nine months ago to the current Rs 275-Rs 300 per square feet.
By rajani | Posted in Property News | Tagged Business Districts, Business Hub, City Chicago, Commercial Business District, Commercial Real Estate, Corporates, Enclave, Global Economy, Global Meltdown, Global Property, Industry Experts, Last Quarter, Lease Agreements, Office Space, Parel, Real Estate Values, Transaction Services, Urban Land Institute | Comments (0)
MALLS LOSING BRANDS TO HIGH STREET
January 8, 2009 – 12:33 am
Malls are loosing brands to high street. Retailers grappling with issues of viability, visibility and branding are now quitting malls. Recent months have seen a gradual, but noticeable exodus of brands from malls to single-format stores on high street.
This trend has added to the stagnant spaces in new malls, which have already been finding it difficult to get initial bookings from retailers. According to a report by global real-estate solutions firm Cushman & Wakefield (C&W), the mall vacancy rate in urban India touched a high of 16% by the end of 2008.
The survey was carried out across eight major cities—NCR, Mumbai, Kolkata, Ahmedabad, Bangalore, Chennai, Hyderabad and Pune. The report attributes the vacancy levels to inconsistent mall supply and revival of the high street as the most sort after retail destination. The highest level of vacancy in malls was witnessed in Delhi and Pune, with vacancy levels of 24% and 15%, respectively.
“There is a gradual but noticeable exodus from malls to single-format stores on high street. Today, retailers seek viability in stores and give lesser importance to stores for branding purposes,” says JLLM (Jones Lang LaSalle Meghraj) MD (retail) Shubhranshu Pani.
“The retailers are preferring the high street because of higher visibility, independent access and the greater comfort level as compared to the malls,” Cushman & Wakefield retail services director Rajneesh Mahajan adds.
By rajani | Posted in Property News | Tagged Ahmedabad, Chennai Hyderabad, Cushman & Wakefield, Global Real Estate, Initial Bookings, Jones Lang Lasalle, Jones Lang Lasalle Meghraj, Kolkata, Ncr, Rajneesh, Real Estate Solutions, Retail Destination, Retail Services, Services Director, Urban India | Comments (0)
JHARKHAND’S CAPITAL IS ATTRACTING INVESTORS
January 7, 2009 – 2:17 am
Jharkhand’s capital Ranchi emerges as the single city in eastern India that has an incredible mixture of metropolitan culture along with traditional touch. The city is on the way to meet all the criteria of a metropolitan city. Ranchi is a marvelous place with great strength to put itself on the way of growth. It has already made its entry into the era of real estate, since it became the capital of Jharkhand. Mr. S.N. Singh, president of Jharkhand unit of Confederation of Real Estate Developers Association of India (CREDAI) said that with many industry giants have set up their office, there is development in both residential and commercial real estate sector. But, land prices are high but plots are less”. Various industry leaders have already opened their channels in the city. Ranchi also has multiplex and few five-star hotels and motels. Clearly, the average Ranchiites lifestyle has mentioned that it is not far to be enlisted as modern city.
By rajani | Posted in Property News | Tagged Capital Investors, Commercial Real Estate, Confederation, Credai, Eastern India, Five Star Hotels, Hotels And Motels, Industry Giants, Industry Leaders, Investors Capital, Jharkhand, Marvelous Place, Metropolitan City, Metropolitan Culture, Ranchi, Real Estate Developers, Real Estate Developers Association, Real Estate Sector | Comments (1)
IBFSL RELEASES 3% EQUITY OF AKRUTI CITY
January 6, 2009 – 11:50 pm
Indiabulls Financial Services (IBFSL) on Tuesday said that it has released over 3% equity of Mumbai-based developer Akruti City as the real estate firm paid back a major part of its loan amount taken from IBFCL.
Akruti had taken Rs 200 crore from IBFSL by pledging 6% of its equity for working capital requirement.
IBFSL informed the BSE that Akruti City had pledged 5.97% of its equity against the loan and the NBFC has released 3.65% of it. It means, IBFSL is still holding 2.32% of the Akruti City’s equity.
On Tuesday, Akrutiy City’s shares were down by 1.41% to close at Rs 652.05 at the BSE.
By rajani | Posted in Property News | Tagged Bse, Capital Requirement, Crore, Developer, Equity Capital, Equity Loan, Financial Services, NBFC, Real Estate Firm, Shares, Working Capital | Comments (0)
DELHI REGISTERS HIGHEST VACANCY IN MALL SPACE
January 6, 2009 – 6:17 am
Delhi and its neighboring regions witnessed 24% vacancy in its mall space in 2008, the annual retail report issued by international real estate consultant Cushman & Wakefield has indicated. The mall rentals in Delhi also showed a proportionate decline in the range of 12-22%, the report said. Vacancy levels in Pune malls were also high at 15%.
However, the significance of the drop in occupancy levels in Delhi’s NCR region was partially offset by 12% increase in mall capacities during the year. Pune had no consolation as it witnessed 67% decrease in mall supply in 2008 as compared to the previous year.
The report indicates that as much as 11 million square feet of expected mall supply in the year 2008 was deferred to the future, which is a shortfall of 54% from the projections made at the beginning of the year. Of the proposed 74 malls at the beginning of Q1 2008, only about 34 were delivered through the year 2008. At 9.7 million square feet NCR witnessed the largest share of this supply, it noted.
Rajneesh Mahajan, director of retail services at Cushman & Wakefield said, “From the projected supply of 20.8 million square feet space in Q1 2008, we will see a spill over of about 10 million square feet development in 2009/ 2010. Lack of funds leading to construction delays and cautious expansion by retailers has resulted in slow absorption of retail space in malls.”
With an apparent softening of demand, Hyderabad witnessed the least mall space at only 10% of the initial projections, followed by Pune (20%), Chennai (22%), Bangalore (27%) and Kolkata (36%). NCR and Mumbai, however, received a relatively higher share of the projections with 67% and 47%, respectively.
However, owing to the shortfall in mall supply in 2008, the vacancy rates have remained at a national average of 9%.
By rajani | Posted in Property News | Tagged Bangalore, Consolation, Construction Delays, Cushman, Estate Consultant, Initial Projections, Kolkata, Mall Space, Ncr, Occupancy Levels, Retail Report, Retail Services, Retail Space, Shortfall, Slow Absorption, Vacancy Rates, Wakefield | Comments (1)
HOMES @ 20 LAKH
January 6, 2009 – 12:11 am
Real estate companies are now aggressively pitching projects highlighting 2-bedroom apartments available for around Rs 20 lakh, hoping to lure buyers and revive the moribund housing market.
“It is not as if there is a dramatic reduction in prices, but developers want to take advantage of the lower interest rates being offered for home loans up to Rs 20 lakh,” says Sanjeev Shrivastava, MD of Assotech Realty, a Delhi-based firm.
For instance, prices were always in the range of Rs 25-30 lakh at the Crossings Republic in Ghaziabad near Delhi, a case that illustrates Mr Shrivastava’s point. Even when realty prices were wallowing in irrational highs, two-bedroom houses at Crossings Republic were going for under Rs 30 lakh because of the isolated location and poor connectivity.
Gaursons, Paramount, Panchsheel, Skytech Developers and Orange Properties are some of the players which have come out with advertisements for two-bedroom houses priced at the Rs 20-lakh level.
However, for a prospective buyer, the catch lies in the end cost and the location.
The advertisements often conceal additional costs such as external development charges, parking fees, club membership and power back-up charges. So, a house priced at Rs 20.50 lakh may actually cost Rs 26 lakh while an apartment at the second or the third floor may cost Rs 2 lakh more.
Market analysts also point out that some of the projects being advertised are located far away from city limits, or are yet to obtain approval from lenders.
Recently, Bangalore-based real estate marketing firm Orange Properties launched big budget campaigns to attract buyers to its maiden project consisting of 800 apartments, 270 villas and 40 row houses at Devanahalli near Bangalore. It offered a 800-square feet two-bedroom house for Rs 13.5 lakh and a 1,500 square feet villa for Rs 70 lakh.
The offer came with added inducements — assured rental of Rs 5,000 for two-bedroom apartments for two years, and a free Mercedes car worth Rs 28 lakh for villa buyers.
“The offer was initially open for four days, but we extended it for another four days given the overwhelming response from across the country,” says Orange Group senior vice-president Pericho Prabhu, who claims to have sold at least 200 apartments in eight days flat.
However, the project doesn’t fall in areas covered under the Bangalore draft master plan 2015. That means it is at least 48 kms away from the city centre with no guarantee of a public transport system.
There are certain other cases where home buyers are not getting their loans sanctioned, as the projects are yet to be approved by mortgage lenders. Recently, a well-known builder in Gurgaon sold off several apartments in his project after a similar heavy budget advertising, but buyers are now in a fix, as banks are not sanctioning loans for the project.
Another project by Falcon Realty, which promises to give a one-room-kitchen flat for Rs 5.5 lakh and a one-bedroom apartment for Rs 9.9 lakh in Alwar, is also yet to obtain the approval from lenders.
By rajani | Posted in Property News | Tagged Bedroom Houses, Budget Campaigns, Development Charges, Dramatic Reduction, Free Mercedes, Maiden Project, Market Analysts, Marketing Firm, Mercedes Car, Orange Properties, Panchsheel, Poor Connectivity, Prospective Buyer, Real Estate Marketing, Row Houses, Skytech, Two Bedroom Apartments | Comments (0)
HOME OWNER MAY ADD EXTRA FLOORS
January 5, 2009 – 4:27 am
The ministry of housing is considering a proposal that may allow home owners to add extra floor beyond prevailing norms on their existing properties by paying a fee to the local body. The money will be used for providing affordable housing to the economically weaker section. The proposal is based on the recommendations of the high-powered task force on affordable housing chaired by HDFC chairman Deepak Parekh.
“We are actively considering to allow expansion of the floor area ratio. FAR would be different for different cities depending on the demand,” a senior official in the ministry of housing ministry, who did not wish to be identified, said. FAR is specified by local bodies such as Municipal Corporation to restrict height of buildings in the area to protect environment and avoid undue pressure on civic amenities. The report recommends FAR relaxation only after ensuring its impact on the local habitation. “Given the environmental concerns, sustainable methodologies need to be developed,” it said.
According to the findings of the report, alleviating the urban housing shortage could raise the rate of GDP growth by at least 1-1.5%. The government has estimated that the total housing shortage during the entire 11th Five Year Plan (2007-12) would be around 26.53 million units.
The government is also considering the committee’s recommendation for resettlement of squatters and slum dwellers before public land is vacated. It had suggested that resettlement colonies could be built on PPP model. “The government may accept other recommendations of the Parekh Committee after assessing their impact,” the official said. The committee’s recommendation to establish a real estate regulator is under examination of the housing ministry. The creation of a regulatory agency will require enactment of the Real Estate Management and Regulation bill.
The bill is still lying with the urban development ministry. There is a view within the ministry to set up an arbitration body or ombudsman at the state level till the time a regulatory body is established.
By rajani | Posted in Property News | Tagged Affordable Housing, Civic Amenities, Development Ministry, Enactment, Existing Properties, Gdp Growth, Habitation, Housing Ministry, Housing Shortage, Ministry Of Housing, Norms, Real Estate Management, Regulatory Agency, Resettlement, Slum Dwellers, Squatters, Undue Pressure, Urban Housing | Comments (0)
SLOW REAL ESTATE SECTOR MAY COME TO FAST-TRACK AGAIN
January 3, 2009 – 3:09 am
Reserve Bank of India’s (RBI) latest round of interest rate cuts together with the government’s fiscal stimulus package may prod some home buyers to return to the moribund housing market, but industry officials say the steps may not be enough to revive the market.
Some developers say the moves do little to specifically address the realty sector’s main source of troubles credit flow to developers.
The central bank on Friday reduced repo and reverse repo rate by one percentage point and banks’ cash reserve ratio (CRR) by 50 basis points, which is likely to enhance liquidity in the system and make lending to home buyers and developers easy and less expensive.
“Rate cuts will definitely have positive impact on demand for homes. RBI’s actions in the past have eased liquidity in the system, but credit flow to developers still remains an issue,” says Gera Developers chairman Kumar Gera, who is also the chief of real estate industry body Credai.
Developers were expecting that the government would raise the limit on homes loans classified as priority sector lending for banks to Rs 30 lakh from Rs 20 lakh now; and raise exemption limit for tax benefits on interest paid on home loans to Rs 3 lakh from Rs 1.5 lakh now.
The real estate sector has been in the grips of a sharp slowdown since the beginning of last year, with sales having fallen drastically in the last quarter. Lower sales hit developers’ cash-flows, while unavailability of bank credit and funds from private equity squeezed them further, forcing most of them to delay projects and lay off employees. The realty sector is a big employer and a key source of demand in a variety of other sectors, and the government has been keen to lift this industry to spearhead a wider economic recovery.
The RBI has repeatedly cut CRR and key rates in the past two months, but banks have not been very forthcoming in lending to developers because of the high risk perception of the sector. This is because several house-builders find difficult to service debt and pay for the land already acquired amid slowing sales.
The government’s move to allow builders to raise foreign loans or external commercial borrowings (ECB) to develop townships is also being seen as a significant move, although again having a limited impact.
“The government move will not flood Indian real estate with funds, but in today’s time, every step counts. This is a signal to the developers to locate money wherever it is sitting,” says DLF group executive director Rajeev Talwar. DLF, India’s biggest property company, is developing a handful of townships across the country and may potentially benefit from the government’s move.
Residential projects outside proposed townships are unlikely to benefit from government’s latest stimulus package, officials say.
The government also announced that it will work with state governments to make land available for low and middle-income segments, although industry officials say this move is unlikely to have any impact in the short-term.
By rajani | Posted in Property News | Comments (0)
REDDY SEEKS MORE AID FOR REAL ESTATE
January 2, 2009 – 7:37 am
With an aim of reversing the slowdown, Urban Development Minister Jaipal Reddy has sought an additional package for the real estate sector.
In a letter to the Prime Minister, Reddy has stated that “more needs to be done to reverse the slowdown facing the sector”.
Suggesting a slew of measures, Reddy has submitted a note containing suggestions of industry.
“Some of these suggestions with appropriate modifications could be favorably looked into,” he said in the letter to the PM.
The real estate sector plays a dominant role in the country’s economic growth and employment generation.
Unfortunately due to the ripple effect of the global meltdown, the sector is facing severe liquidity crunch. Transactions have come down by almost 80% and the sector which was driving the entire economy has virtually come to a halt.
As a result, most of the developers are facing liquidity crunch on account of financing their long term assets with short term loans.
Seeking rationalization of home loan interest rates, the real estate industry has suggested 6.5% interest for a loan up to Rs five lakh and 7.5% on loan above Rs five lakh and up to Rs 30 lakh.
It has also sought the income tax limit exemption on rental income from house to be increased from 30% to 50% among others to revive the sector.
By rajani | Posted in Property News | Tagged Development Minister, Economic Growth, Employment Generation, Global Meltdown, Home Loan Interest, Home Loan Interest Rates, Jaipal Reddy, Liquidity, Loan Interest Rates, Rationalization, Real Estate Sector, Short Term Loans, Slowdown, Urban Development | Comments (0)
HIRANANDANI GROUP TO RESUME HIRCO
January 2, 2009 – 12:36 am
Leading shareholders of Hirco, the AIM-listed real estate fund of the Hiranandani group, are likely to support the group’s move to restructure Hirco, by merging two real estate subsidiaries with it.
According to a person close to the Hiranandani group, “The proposal to restructure has originated from shareholders. About 90% of them are supporting the proposal,” he said, declining to be quoted. “A board meeting is scheduled sometime later this month to take the final call on the plan,” he added.
The move has however run up against stiff opposition from another section of shareholders who are reportedly planning to jointly oppose such a move as they feel, it would give the Hiranandani group, control over Hirco.
Extraordinary general meeting on January 16, in Mumbai, for shareholders to vote on the restructuring proposal. Hirco will begin roadshows for investors early next week.
Niranjan Hiranandani, chairman of the Hiranandani group, didn’t comment as it is the silent period - the period ahead of the company’s results when senior officials don’t make forward looking statements.
Reports in the British media on Wednesday had suggested that certain shareholders were opposing the restructuring plan, which they say, would dilute shareholding interests and effectively cede control to the Hiranandanis.
According to the reports, a section of investors led by Laxey Partners, an activist shareholder with over 10% shareholding in Hirco, have termed the restructuring plan as “shocking and ill-conceived.”
In a letter, Laxey wrote to other shareholders urging them to join it in voting against the plan, which involves injecting a loss-making development vehicle ownded by the Hiranandani family, into Hirco, and handing the family an equity stake of up to 50.6% in Hirco.
As part of the proposal, shareholders will lose their preferential claim on £350.8 million of shares that pay an annual dividend of 12%.
On December 18, the Hirco board had proposed the merger, through which, Hirco would acquire two special purpose vehicles owned by the Hiranandanis. These two companies are carrying out township developments at Panvel, near Mumbai and in Chennai.
There are currently many foreign funds that own large stakes in Hirco, including UK’s Standard Life (13.11%), HSBC Holdings (10.13%), Laxey Partners (10.05%), Halbis Capital (7.84%), Fortress Investment (4.57%) and Lazard AM (4.57%).
The Hiranandani group which is unlisted in India, holds less than 20% of the invested entity. The merger proposal, once implemented would take the Hiranandani group holding to over 50%.
Hirco, which listed on the AIM in 2006, had raised more than £380 million for investing in residential properties in India.
By rajani | Posted in Property News | Tagged Aim, Board Meeting, Dividend, Equity Stake, Extraordinary General Meeting, Final Call, Group Control, Hirco, Investors, Laxey Partners, Mumbai, Proposal, Restructuring, Senior Officials, Shareholder, Shareholders, Shareholding, Silent Period, Stiff Opposition, Subsidiaries | Comments (0)
ASSOCHAM SUGGESTS SEBI TO INTRODUCE IRA SCHEME FOR HOUSEHOLDS
January 1, 2009 – 6:25 am
Industry body Assocham said that market regulator SEBI should allow mutual funds to float Individual Retirement Account, which would encourage common people to invest in equities for long-term.
The scheme, which is prevalent in the US and European countries, broadly aims at creating wealth over a period of time, which could then be available after retirement, Assocham said.
In a representation submitted to SEBI, assocham said that there is a need to promote long-term inflows into equities by floating IRA schemes so that households make their investments through various mutual funds to cherish benefits of their long-term plans.
Under the scheme, each contributor could invest up to five lakh rupees in a year in a mutual fund that would further invest in equity or in a combination of equity and debt as per investors choice, it said adding that the lock-in period for such investments should be a minimum 10 years and withdrawal only after investors attain the age of 58 or 10 years after investment, whichever is earlier.
The chamber further said that the amount invested in the scheme should be tax deductible and dividend should also be exempted from taxes when investors withdraw the amount.
“This will promote long-term investments in equity and also ensure a reasonable income after retirement,” it added.
The IRA scheme would thus help individuals to build their retirement benefit schemes and at the same time channelize the savings of the community to the capital market, Assocham said.
The diversion of savings of household sector to the capital market would provide a steady flow of substantial amounts that would also act as a buffer against volatile inflows and outflows of FIIs, it added.
By rajani | Posted in Property News | Tagged Assocham, Benefit Schemes, Creating Wealth, Dividend, European Countries, FIIs, Household Sector, Households, Individual Retirement Account, Market Regulator, Mutual Fund, mutual funds, Substantial Amounts | Comments (0)
REAL ESTATE STOCKS DO WELL
December 30, 2008 – 3:49 am
Shares of real estate companies were up, but gave back a portion of early gains, as investors booked profits in choppy trades. Analysts said the spurts of strength in realty stocks in recent days can be attributed to hopes of further cuts in interest rates.
“Most of the strength in selective stocks is due to hopes of interest rates going down. Since last few days, we have witnessed a series of rate cuts by banks due to pressure from the government. At this point of time, concern about lending to real estate sector is still weighing on majority of institutional investors,” says a real estate analyst.
At 12:30 PM, BSE Realty was at 2,237.35 points, up 1.4% from the previous close, but off the day’s high of 2,291.21.HDIL, Indiabulls, Unitech and Parsvanath, which were up over 2%, were leading the pack of realty gainers.
Investors are hoping that the cut in interest rates would spur demand for property, but analysts said that is not enough. It is believed that realty players should cut prices significantly to revive demand from prospective clients, which will also ease the burden of these companies.
Expectations of a sustained strength in property prices had led to builders buying lands at exorbitant prices through borrowed money. But, with sales drying up following the sharp rise in interest rates, these highly-leveraged companies are under great deal of pressure.
Source : www.indiarealestatelink.com/

BANGALORE CLASSIFIEDS

Blog Archive

DLF TO SELL STAKE

Bangalore city