Jaypee Greens Sports City in Greater Noida

November 9, 2009 – 5:15 pm

Jaypee Greens, part of construction major Jaiprakash Associates, has started construction of “Sports City”, a township with residential and sports facilities, near the Yamuna Expressway. “The Sports City is positioned for everyone who appreciates luxurious surroundings and spaces equipped with sports and recreational facilities,” according to a Jaypee Greens press release.

For more details and booking please visit: http://jaypeegreenssportscity.propertywala.com/
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Office rentals stabilize

October 9, 2009 – 5:50 pm


Office rentals, which dropped 40% from their peak in the middle of 2008, stabilized across the country in the September quarter as fresh bookings for office spaces partly reduced inventories, says a report by international property consultant CB Richard Ellis.

There was no change in office rentals in some of the major office locations in the national capital region, Mumbai, Bangalore, Hyderabad and Kolkata, while rentals at some others in Chennai and Pune fell by 5-6% in the quarter ended June 30. In contrast, rentals in Connaught Place in Delhi and Gurgaon in Haryana registered an increase of 5-8% in the last quarter.

“The increase in demand is largely due to improving economic conditions, positive market sentiment and growing corporate confidence. However, it will take some time for the supply-demand gap to get bridged. Thus, both rentals and capital values are expected to remain stagnant or under downward pressure in the medium term,” said Anshuman Magazine, chairman and managing director for South Asia at CB Richard Ellis.

In Mumbai, commercial office space is seeing a slight pick up in demand but rentals continue to be competitive. The September quarter saw close to 95,000 square feet of cumulative lease transactions as compared to 83,000 square feet space being rented in June 2009 quarter, according to the report.

However, as Mumbai continues to be 15th largest office construction site in the world with about 3.5 million square feet of office space coming up in extended business districts (EBD), capital values will remain low. This has resulted in a few unexpected transactions of outright purchase. Recently, Motilal Oswal, a brokerage firm purchased 90,000 sq feet office building for Rs 156 crore. Constructed by K Raheja, the property was purchased at Rs 17,333 per square feet as against the ongoing rate of Rs 19,000-21,000 per square feet.

“Indian corporates firmly believe that current valuation of commercial property is attractive, so they are capitalising on it rather than leasing as is being opted by MNCs,” said Sanjay Dutt, CEO (business), JLLM, an independent property consultant.

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Residential realty prices moving up

October 9, 2009 – 12:27 pm


Residential real estate prices are going up. In the last three months, prices of affordable apartments have appreciated by around 10% across the country.

Anshuman Magazine, MD – real estate consultancy firm CB Richard Ellis – South Asia, said, “With improvement in the sentiment in the economy, transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5%-10% in the last three months”.

The developers had cut prices by around 30% in first two quarters of calendar 2009 to revive the demand of residential units, which plummeted to a low due to the global financial crisis. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery, he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

According to a IIFL report, in Mumbai, prices are up 25%-40% from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. “Constrained supply and a revival in demand drove up prices in Mumbai, and NCR,” the report said.

In Mumbai, the prices of apartment in Metropolis appreciated by 38% since March to Rs 10,500 per square feet. Similarly, the project, Planet Godrej, has become 20% costlier to Rs 25,000 per sq ft in the last six months. In NCR also, many developers like DLF, Unitech, Jaypee Greens, Mahagun and Amrapali among others, have increased prices by around 10% from the launch prices in March-June.

In the premium segment also, there is revival in demand, said Vibhor Gupta, senior official of Jaypee Greens. However, the prices have not witnessed any escalation in the premium segment. Similar trend has been noticed in cities like Bangalore, Pune and Chennai.

“The current trend of price escalation can not be sustained as it will affect the demand,” said Aditi Vijayakar, ED of Cushman and Wakefiled, adding, as the demand has revived following interest rate cuts by banks, many developers have announced projects in the affordable range. This will increase the supply and will put pressure on the price rise.

At the same time, another consultant said the financial condition of the developers has not improved to a level that they can hold a project for long. They need cash flow to service the debt, which they have taken to buy lands. The source said the money from other sources like dilution of equity is still not easily available. This has forced developers to depend on the sales proceeds to service debt.

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Godrej to develop Vikhroli property

October 8, 2009 – 11:47 am

Godrej Industries has entered into an agreement with Godrej & Boyce and Godrej Properties to form a special purpose vehicle for developing its property at Vikhroli, the company said in a communique to the BSE.
Without divulging details on the area to be developed, it said that the board of directors, through a circular resolution on Wednesday approved the proposal.
The Godrej group owns about 5,000 acres in Vikhroli. Though a part of the land has been used for residential and commercial purposes, the group still has huge vacant property left that can be developed before the Urban Land Ceiling Act is repealed.
The binding MoU provides for setting up a suitable SPV to execute joint development of the property as also the commercial terms for such development including the sharing of costs, revenues and profit. The Godrej Industries scrip was up 6% at Rs 201 on Wednesday.

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Buyers realize homes still not their cup of tea

October 7, 2009 – 11:17 am


Property prices across the country are 10-25% lower than their peak in early 2008. Bank rates are about 4 percentage points lower. Still, the vast majority of the exploding middle class, which aspires to own a home, is not taking the plunge. Homes are still not affordable. Affordable homes are hardly homes.
The rates may have come down, but even today, the prices quoted by sellers are too high. The developers have reduced the price, but have started charging more for the parking space, which one has to compulsorily buy and that too pay black money for that.

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Raheja gets 500 crores’ Delhi slum project

October 6, 2009 – 11:13 am

DDA has awarded Delhi’s first slum redevelopment project, worth Rs 500 crore, to a local builder, Raheja Developers, in a move that may see more such projects in the national capital resulting in better living conditions for urban poor and thousands of crores of businesses for builders.

DDA has awarded 5.22-hectare, or 13-acre, project at Kathputli Colony near Shadipur Depot in west Delhi to Raheja Developers for Rs 6.11 crore, a DDA spokesperson said. Under the scheme, the builder pays only Rs 6.11 crore—the bid amount—for the land, but has to build 2,800 homes, of 30 square metre size each, for existing slum dwellers of Kathputli Colony named after its majority residents of puppeteers and craftsmen.

In the bargain, the builder gets for commercial exploitation 10% of the total space slated for 2800 homes and also close to a hectare for high-end residential development. Therefore, the cost incurred in building 2800 homes for slum-dwellers will be offset by the sale of commercial space and high-end houses in the project, while land would come dirt cheap at Rs 6 crore.

DLF has recently sold 1250 apartments in its Capital Greens project, just 3-4 kilometres from Shadipur Depot at a rate of Rs 5677 a square feet. Raheja Developers will have to create temporary accommodation for the slum dwellers at a piece of land close to the project site that will be given by the DDA in a month or two.

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Sahara Prime City to use Rs 2860 crore from IPO

October 5, 2009 – 3:23 pm

Sahara Prime City, which aims to raise Rs 3,450 crore from an IPO, will utilize Rs 2,668 crore in the next 3 years to part-fund development of about nineteen thousand housing units across the country.

At present, Sahara Prime City is developing nine integrated townships and one residential complex in cities such as Lucknow, Indore, Nagpur, Ahmedabad, Jaipur, Solapur and Cochin. The group’s ambitious Ambey Valley project is not a part of Sahara Prime City.

Sahara Prime City plans to develop 16 more integrated townships and would pump in another Rs 1426.83 crore from the proceeds of the IPO.

The DRHP said it would develop 13.41 million square feet of residential space in the upcoming projects across the country, including Bangalore, Chandigarh, Jabalpur, Jodhpur, Porbandar, Haridwar and Pune.

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Happy days are back into realty

October 5, 2009 – 1:16 pm


Realty industry is all set to be lift up this Diwali. At least 12 public offerings, a slew of new projects and the return of private equity funds that had turned away proposals due to the global slowdown last year.

‘After weathering the worst funds crisis for one and half year, the realty sector has now started seeing inflow of capital and funds,’ said Anuj Puri, the country head of leading global realty brokerage firm Jones Lang LaSalle-Meghraj.

Mr. Puri further said, ‘Sales are improving and private equity funds are coming back. With market sentiments getting bullish, prospects of fund-raising are even brighter. You can now see how every company is taking the QIP route to raise funds,’.

QIP is a tool to raise capital whereby a listed company issues equity shares, fully or partly convertible debentures or securities, instead of warrants, to institutional buyers.

After losing almost 75% of its stock valuation last year, India’s realty sector has raised about $15 billion (Rs.750 billion/Rs.75,000 crore) through routes like QIP in the past six months.

Among the developers who have started mopping up funds over the past few months are the largest player in the industry, DLF Ltd, with $780 million, Unitech with $325 million and Indiabulls Real Estate with $550 million.

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BuildMat likely to become an annual event

October 3, 2009 – 5:35 pm

The biennial exhibition BuildMat, sponsored by three major associations connected with the construction sector in Coimbatore, is likely to become an annual event after 2015.
To provide exposure to the latest products, the organizers have decided to invite manufacturers to directly participate in the 2011 BuildMat show.
Speaking to newspersons, Mr Praveen Chandra Prasad, Chairman, BuildMat 2011 Construction Fair, Coimbatore, said the sponsors of the exhibition, the Coimbatore Centres of Builders’ Association of India, the Indian Institute of Architects and Association of Consulting Civil Engineers (India) have started taking in bookings for stalls nearly 18 months in advance with a view to making it “as close to international standards as possible”.
Apart from domestic companies, participants from China, Malaysia, Sri Lanka and the Far East are also expected to showcase their products at the fair that will run from February 3-6, 2011.
The sponsors are hopeful of making the fair an annual show after 2015.

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Duet India Hotels eyes expansion

October 3, 2009 – 5:31 pm

UK-based investment group Duet’s Indian hospitality arm Duet India Hotels is looking for more land to expand its portfolio and add more than thirteen hundred rooms by the end of this financial year.

The group plans to develop 20- 30 mid- scale and upper middle segment hotels with around five thousand rooms in the next 2-3 years. The company has recently signed a franchise agreement with Starwood Hotels and Resorts Worldwide to open the Four Points hotels by Sheraton.

The company, which opened its first property on 1st October in Jaipur, a 115- room four- star hotel, is developing four such properties in Ahmedabad, Hyderabad, Indore and Pune.

Dilip Puri, CEO, Duet India Hotels, said, “The five properties including Jaipur is worth around Rs 500 crore. In these, we would have around 882 rooms. We plan to reach to fifteen hundred rooms by the end of this fiscal.” “For this kind of expansion, we are looking for more land. As soon as we acquire land, we can start building. We have already acquired land in Hyderabad for developing a property similar to our Jaipur property. We are also looking at other Tier- II cities such as Lucknow, Nasik, Bangalore and Nagpur.

Bangalore would be more of a brownfield development. Among the metros, Chennai is also our target.”

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Landscape expo in Hyderabad

October 3, 2009 – 5:29 pm


Mr K Rosaiah, Andhra Pradesh Chief Minister, inaugurated the fourth International Landscape and Gardening Expo 2009. About hundred exhibitors from fifteen countries, including the US and Australia, are taking part in the event. A conference, `Plants, Places and People’, would be held at `Visvesvaraya Bhavan’ on 3rd October. It would focus on improving quality of life of the people by preserving the environment. Ms Savita Punde, President of Indian Society of Landscape Architects, would take part in the conference.

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Property gifts taxable from today

October 1, 2009 – 12:15 pm

Property received as gifts from non-relatives on or after October 1 will attract income-tax in the hands of the donee. This new regime for taxation of gifts of property (immovable property or any other property) will come into force from Thursday. Any person who receives a property as gift on or after October 1 must pay the income-tax due on the value of the gift and disclose the taxable value of such property in the return of income for assessment year 2010-11 and subsequent years, the Central Board of Direct Taxes said in a statement here today. The tax incidence will arise only when the value of the property exceeded Rs 50,000. However, gifts received from a person who is a relative, on the occasion of marriage of the individual, under a will or by way of inheritance, in contemplation of death of the donor or from any trust or institution registered with the income tax authority will not be subject to income-tax, the release added.

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Unity Infra gets 55 crores’ order

September 30, 2009 – 8:00 pm

Bombay Stock Exchange
Construction company, Unity Infra projects said that it has received a contract worth Rs 54.56 crore from Amanora Park Town for construction-related works. The scope of work includes construction of six towers among others, Unity Infra projects said in a filing to the Bombay Stock Exchange. The project is scheduled to be completed in 29 months. Shares of the company closed at Rs 408.55, up 0.91% on the Bombay Stock Exchange.

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Parsvnath overdue payments at Rs 143 crore

September 29, 2009 – 5:38 pm


Parsvnath Developers has said its ‘overdue payments’ stood at Rs 63 crore and Rs 143 crore as on July 1 and August 31, respectively, under loan agreements and other outstanding indebtedness. The company said this in its Preliminary Placement Document filing on the NSE.
The company’s Chairman, Mr Pradeep Jain, was not available for comments, despite repeated attempts.
Meanwhile listing out the risk factors, the document by Parsvnath said, “We had overdue payments of Rs 631.13 million and Rs 1,433.57 million, as of July 1, 2009, and August 31, 2009, respectively, under our loan agreements and other outstanding indebtedness with an aggregate outstanding balance of Rs 16,370.77 million and Rs 17,849.51 million as of June 30, 2009, and August 31, 2009, respectively.”
The amount of overdue indebtedness has not increased since September 1, it said.
Parsvnath said it has not yet received any notice of default from financial institutions and banks.
“Some of the unpaid amounts have been overdue for more than 60 days, and continued delays in payment will trigger additional cross-defaults under other agreements,” it said.
The company pointed out that its promoters have disclosed that as on September 21, 62.4% of the total outstanding shareholding of the company has been pledged by them to banks, financial institutions and other lenders. “Given that substantial portion of the shareholding of the promoters has been pledged to banks and financial institutions, as a result of any default under the financing documents, the banks and financial institutions may sell the equity shares pledged to them in the open market, thereby, diluting the shareholding of the promoters,” it said.
Speaking to Business Line last week, Mr Jain had said the company would raise between two hundred fifty crore to five hundred crore rupees through QIPs issue, and that 60% of the QIP proceeds will go towards reducing the company’s debt.

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VATIKA GROUP OPENING A NEW WESTIN

September 28, 2009 – 3:25 pm


Vatika Group announced that it will open the Westin Hotel in Gurgaon by March next year, seven months before the commencement of the Commonwealth Games in October next year. The opening of the Westin Hotel will help to meet the hotel room needs for the mega event next year as the city is already facing an acute shortage of over ten thousand rooms.
The new Westin Hotel is strategically located at the emerging central business district of Gurgaon and will provide travelers easy access to key convention and commercial offices which have started to shift towards Gurgaon area due to lack of sufficient land for development of sizeable projects in New Delhi. The hotel will feature 311 rooms, five dining outlets, 17500 square feet of meeting and function space, an approximately 16000 square feet health and spa center, as well as retail outlets.
Mr. Gaurav Bhalla, Deputy MD–Vatika Hospitality, said “We have kept our commitment of completing the Westin Hotel in Gurgaon before the commencement of the Commonwealth Games by announcing its opening in next year March. Vatika has been diligent and focused to achieve and respond to the city’s increased need for lodging due to the upcoming Commonwealth Games in the City.”
The decision to venture into the hospitality business was merely an extension of group’s aim to transform all aspects of human Endeavour. Therefore we launched various brands of specialty restaurants namely the Fox, Coriander Leaf, 56 and Jing apart from the Westin tie up.
The Vatika Group has a portfolio of projects that span office spaces, retail, residential, hotels, resorts, specialty restaurants, and business centers. The group has three major township projects spread over total of approximately 1800 acres namely Vatika Infotech City in Jaipur, Vatika India Next in Gurgaon and Vatika City Central in Ambala.
The Group has also completed 90% of its first residential project called Vatika City in Gurgaon and houses 500 families. The group’s commercial projects are spread across Gurgaon and Jaipur. Gurgaon has 5 operational projects with clients like SAP, Starwood, HDFC, Xerox, Etisalat, Lenovo, Glaxo Smithkline, MSD pharma etc.

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Residential property prices rise

September 28, 2009 – 2:03 pm


The upward movement has begun. Not only have the sales picked up, but the prices of residential property too have increased 5-15 % in the last couple of months. With a long festive season ahead, realty experts believe property markets could see heightened activity, provided developers desist from increasing prices of residential space any further.

Aditi Vijayakar, the executive director (Residential Services, India) of Cushman and Wakefield, said, “The festive season (September-December) has historically been a buying period, with a large chunk of overall sales being converted during this auspicious time. Some developers see as much as 30-40 % of the yearly sales taking place during the festive season”. Further she pointed out, “Residential prices have increased by 5-15 % from the bottom it made in the first half of the year. If the developers continue to raise the prices then the renewed demand and interest that is being witnessed will start to abate”.

She added, “The previous year has been a taxing one for the real estate industry and the initial signs of recovery are evident in the market, and as most of the sales happen during the festive periods, developers have to be cautious not to hike prices in projects and new launches as this will drive out the end users and prolong the revival in the residential space”.

According to the expert, almost all cities are registering a rise in sale as transactions had frozen up during the start of the year. But now as the economy has stabilized and is back on the growth trajectory, there is a revived interest in buying homes by end users and this increase in confidence, better economy, favorable borrowing conditions and rationalized capital values amongst others which is promoting rising sales across India.

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Property expo in Mumbai from Oct 1

September 26, 2009 – 4:43 pm


The Maharashtra Chamber of Housing Industry (MCHI) will organize an exhibition `Property 2009′ at MMRDA Grounds, Bandra Kurla Complex, from October 1st to 4th. Over 75 real estate developers will showcase their projects in Mumbai and suburban areas such as Thane and Navi Mumbai, besides Pune. State Bank of India is the co-organizer of the event. The other partners in the four-day programme include ICICI Home Finance, Axis Bank, LIC Housing Finance, IDBI Bank, and HDFC. Citibank NA, Dewan Housing Finance Corporation, GIC Housing Finance, IDBI Home Finance and Kotak Mahindra Bank will also participate.

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‘Real Investment’-The Book For Real Estate

September 26, 2009 – 12:00 pm


Knight Frank has introduced a real estate guidebook for India. The book provides information needed to invest in real estate market. Mr Pranay Vakil, Chairman-Knight Frank India, said, “We felt the need for a single credible source of information for which we brought together the best minds of the industry in business. This book makes real estate market simpler by offering tips”.

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Residential property prices may go down

September 25, 2009 – 1:01 pm

Knight Frank India said that prices in the residential property segment are likely to decline in a short time. Knight Frank India Chairman Pranay Vakil said, “We feel prices of residential segment may go down over a period of time”. Further he added that the residential segment may see a robust demand in certain markets and it was also a good time for property developers to invest in land.

Real estate demand at this stage is the result of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, on the other hand the end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and also in property price.

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RBI cautions banks on group exposure risk

September 25, 2009 – 1:00 pm

Reserve Bank of India
The Reserve Bank of India instructed banks to meticulously assess the inherent group risk on borrowal accounts coming under the real estate category.
This caution comes in the wake of the RBI’s findings that some of the companies operating in the sector have significant exposure in the form of advances, investments etc., to their subsidiaries and other group or related entities.
Further, while assessing the loan requirements of large builders/land developers, banks should carefully analyze the financial credentials/viability of the borrowers on a consolidated basis supported by the consolidated accounts/position of the group, the central bank said in a notification.
Banks should also examine the financial credentials/viability of the relevant unconsolidated related entities such as SPVs. The current practice in the real estate sector is that builders/developers hive off each project as a special purpose vehicle so that projects are ring-fenced from each other.
According to Mr B.K. Batra, Executive Director, IDBI Bank, when considering loan proposals from the real estate sector, banks would do well to gather comprehensive information about a builder and the associate companies and SPVs floated by him so that right credit decision can be taken and exposure ceilings to individual or group borrowers are not breached. Banks are required to frame comprehensive prudential norms relating to the ceiling on the total amount of real estate loans, single or group exposure limits for such loans, margins, security, repayment schedule and availability of supplementary finance and the policy should be approved by the boards.

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Lodha Developers among top 10 Builders

September 24, 2009 – 11:53 am


Lodha Developers Ltd. has been selected as one of the India’s top ten builders on the basis of a survey conducted by Construction World, India’s premier magazine for the construction sector.
The survey was conducted over a period of 4 months among a spectrum of handpicked audience comprising industry professionals from across India.
Mr. Abhisheck Lodha, Director, Lodha Developers Ltd. said, “Our selection as one of the top ten builders in India by the Construction World is recognition to our standards of excellence in every aspect of our services and our presence in varied segments like high-rises to mid-income luxury, in the real estate sector”.
Instituted by ASAPP Media, the award is recognition of exceptional work done by architects and builders in various aspects of infrastructure and real estate industry over the years.

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Century joins affordable housing bandwagon

September 24, 2009 – 11:14 am

Century Real Estate is the latest to join the affordable housing bandwagon. It has come up with ‘Century Indus’ project that offers apartments in the Rs 20-30 lakh category.
Mr P. Ravindra Pai, MD, Century Group said, Acquiring land at historical rates has helped the company make the project affordable.
The company has a land bank of over 3,000 acres, most of them acquired in historical rates, worth about 2 billion dollar. There are plans to make use of some of the land parcels to develop few more affordable projects in the city.
“We propose to develop 6,500 apartments targeted at the affordable segment, approximately seven million sq ft development, with a budgeted outlay of Rs 1,050 crore in the next three years,” said Dr P. Dayanand Pai, Founder and Chairman, Century Group. The projects would be located in North and West Bangalore.
Mr Pai said that the group has now formed ‘Century Real Estate Holdings.’ About 300 acres, valued at Rs 1,200 crore, from the land-bank have been transferred to this company, and about 12 projects would be developed on this land.
The company is looking at raising funds at entity and project levels. At the entity level, it plans to raise Rs 200 crore as bank debt for pre-development of these 12 projects. “We have almost tied up the debt,” said Mr Pai.

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India Cements acquires commercial space of ICICI Bank

September 23, 2009 – 4:15 pm


In yet another big ticket realty deal in Chennai, India Cements has acquired the ICICI Bank owned large commercial space in the upmarket Santhome High Road in the city reflecting the uptick in the property market. Sources close to the transaction said that ICL has struck the deal for Rs 63 crore.

ICICI Bank had put up for sale 9-ground (21,665 square feet) prime property with a built up space of 83, 772 square feet on the busy Santhome High Road. Recently, the bank moved the operations in the building to Ambattur in North Chennai.

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Sub-PLR rates set to go

September 22, 2009 – 4:59 pm


People who borrow money from banks to buy homes at floating rates of interest are set to benefit as banks are expected to change the way they price such loans.
The Reserve Bank of India is preparing to ban lending below the prime lending rate, the benchmark rate for all floating rate bank loans.
Sub-PLR lending came into existence a decade ago after banks obtained permission from the central bank to lend below the benchmark rate.

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Retail rental prices skid 15% in H1 on low demand

September 22, 2009 – 3:59 pm


Rentals of retail spaces in NCR and Mumbai have decreased by up to 15% in the first half of this year over the past six months on account of low demand and high base effect of last year.
According to global real estate consultant CBRE, rentals in the NCR have corrected by about 10% in the first six months over the second half of last year.
It said that the decline was similar to an overall drop of 20% to 40% from the levels witnessed in the beginning of last year.
According to CBRE report, Prime high-streets and mall spaces continue to be the focus for expansion for retailers as the rentals in these spaces have corrected due to the reduced demand and high rental values.
The consultant further said that in Mumbai, rentals are showing correction by 10% to 15% amid limited supply of “quality” space on some prime high-streets through the first half of current year.

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