Monthly Archives: February 2008

Go green, Bengal Chief Minister tells Realtors

KOLKATA: Buddhadeb Bhattacharjee Chief Minister of West Bengal expects real estate developers to think green.

Inaugurating the ‘Realty Expo 2008’ organized by Confederation of Real Estate Developers Association of India (Credai-Bengal) at the Science City grounds on Wednesday; he said realty industrialists should concentrate on developing green buildings which make better use of solar energy.

“Global warming is a real threat to the society,” the chief minister said, while explaining the rationale behind the need to have eco-friendly buildings. The government is considering the merits of making rainwater conservation mandatory for developers. “I am in discussions with the municipal affairs minister (A. Bhattacharya) to have rainwater harvesting included in the municipal Act,” Bhattacharjee added.

The green building has already started taking roots in the city, particularly in the IT parks arena. A typical eco-friendly building uses alternative energy sources, such as solar or wind, ensures water efficiency through rainwater harvesting and also has effective waster management systems in place.

Property Boom In India

Market experts are visualising a high growth in Indian real estate value. It is expected to rise from US $12 billion to $90 billion by the year 2015.
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CapitaLand Ltd

CapitaLand Ltd. said fourth-quarter net profit increased 49% on higher revenue and gains on its property portfolio.

Southeast Asia’s largest property developer by market capitalization reported net of S$674.7 million (US$480 million) for the quarter, up from a restated S$453.5 million a year earlier.

The company said in a statement that Revenue rose 33% to $1.3 billion from $999 million on a buoyant Singapore market and on higher contributions from operations in Australia and China,

Nagarjuna plans to enter real estate development in Oman

According to the agency report India’s Nagarjuna Construction Company Limited is planning to enter real estate development in Oman.

A senior Nagarjuna Construction official said that “We have plans to develop a multi storied building in Sohar in partnership with an Omani company. The apartment, which will be constructed at a cost of OMR 3 million, will have a number of modern amenities, together with health club and swimming pool.” He added that the identical tower apartment, which will be ready by 2010, will have 448 flats each.

In the Oman, Nagarjuna Construction is building the dualisation and realignment of Al Amerat Quriyat Road, a water network scheme in Sohar and initial civil work for Sama Dubai’s Yitti residential cum resort project. With a cost of OMR 56.5 million, the 7.5 kilometer long Wadi Adai Al Amerat road will be completed within 18 months. The project involves construction of 6 bridges of varying lengths, 9 box culverts and 1 single lane bridge. The total contract value of all Omani projects of Nagarjuna is around OMR 180 million.

Nagarjuna to enter real estate in Oman

It is reported that India’s Nagarjuna Construction Company Limited is planning to enter real estate development in Oman.

A senior Nagarjuna Construction official said that “We have plans to develop a multi storied building in Sohar in partnership with an Omani company. The apartment, which will be constructed at a cost of OMR 3 million, will have several modern amenities, including health club and swimming pool.” He added that the twin tower apartment, which will be ready by 2010, will have 448 flats each.

In the Oman, Nagarjuna Construction is building the dualisation and realignment of Al Amerat Quriyat Road, Wadi Adai Al Amerat road project, a water network scheme in Sohar and initial civil work for Sama Dubai’s Yitti residential cum resort project. With a cost of OMR 56.5 million, the 7.5 kilometer long Wadi Adai Al Amerat road will be completed within 18 months. The project involves construction of 6 bridges of varying lengths, 9 box culverts and 1 single lane bridge. The total contract value of all Omani projects of Nagarjuna is around OMR 180 million.

Omaxe to develop theme township in Naya Raipur

MUMBAI: Omaxe Ltd has said that the company has emerged the highest bidder and has won the bid from Naya Raipur Development Authority, Chhattisgarh for development of the theme township with 18 Hole Golf Course on over 400 acres at Naya Raipur, the capital city of Chhattisgarh. The project value is Rs 1200 Crore, which shall include the development of residential and commercial buildings, the golf villas and a hotel.

New real estate opportunities include hospitals, logistics warehousing and airport

The traditional real estate areas are residential, commercial, retail and integrated townships. But the future trend will not be the same. Future real estate area will include medicities, hospitals, logistics and warehousing, airport or port based business districts, mass housing and slum rehabilitation, and education infrastructure.
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Landlords Build Riches On EMIs

Person owning flats in Mumbai are taken as privileged one. The owner-tenant divide is almost as pronounced as the rich-poor divide.
Mr. Shishir Baijal, managing director of Kshitij, the realty fund of Future Group, earns a big amount, but still he is a tenant. He has no home of his own. He stays in 3500 square feet flat for which he has to pay a staggering rent of Rs4 lakh a month.
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India’s Prime Real Estate plans $500 million fund

Indian fund manager Primary Real Estate Advisors is planning to launch a fund worth as much as $500 million, probably in the second half of this year, but said it will tread carefully as the country’s property boom stutters.

Foreign investors have taken advantage of such funds to rush into property development in India since it eased rules on inward investment in the construction industry in early 2005, sparking rampant land speculation and a near quadrupling in prices.

But despite signs of a slowdown — home sales volumes have fallen by one-fifth in Mumbai and 40 % in Bangalore in the last year — the head of Primary Real Estate, Ashwin Ramesh, is convinced that North American and European investors will invest.

“We would typically underperform in a raging bull market but overperform in a flattish market.”

Ramesh expected to launch the new fund within six months to a year, and hoped to raise between $300 million and $500 million.

“At the moment there’s interest in North America and London, but we’re in touch with people all over the place,” he said, adding that he was busy expanding a team that is now investing a $32 million fund closed in mid-2007.

Primary Real Estate would aim for internal rates of return of 15 to 20 percent, Ramesh said, below the usual 20 to 25 percent often advertised by funds in Asia’s up-and-coming property markets of India, China and Vietnam.

Red Fort Capital Increases Investment in Indian Real Estate

Red Fort Capital Advisors has planned to bring in an additional $500 million in the next two years. It is a well known international private equity firm. The firm is considering upon its portfolio into growth sectors like logistics, especially the warehousing in the near term. It has $425 million real estate investment focused fund for India and plans to bring in an additional $500 million in the next two years.

Mr. Kuldip Chawlla, one of the Directors said,“We are looking at housing projects, especially affordable one’s in the top 15 cities as well as re-development projects, especially in cities like Mumbai through this fund”. Further he said that Red Fort Capital, which has already committed $250 million last year, in projects in Chennai, Bangalore and Hyderabad, sees affordable housing (apartments of 1,000 sq.ft. between Rs 10 and 25 lakhs), as a high growth segment.

Ahmedabad New Center Of Real Estate Boom

The real estate development in Ahmedabad has seen tremendous growth over the past two years. The property prices have shot up faster than even Delhi or Mumbai and investors are making beeline to buy them.
A. Mukhopadhyay, an NRI is looking to purchase a house in Ahmedabad. Mukhopadhyay has his roots in Kolkata but he is not paying attention on investing in property there.
According to him buying a property in Kolkata will not give return like investing in a property in Ahmedabad.
Gujrat capital Ahmedabad is moving much faster and so the cash. The land prices have more than doubled in the last couple of years, which gives details about the rush at the first ever summit of housing and real estate developers.
In the previous two years a lot of companies have opened up in the city. As a result, the demand for houses has gone up so has the price. Last year, a two-bedroom flat at a well-known location used to cost Rs 12 lakh but today it is of almost Rs 25 lakh.
Rushabh Patel, Secretary, GIHED told that the way property prices got doubled in last one year in Ahmedabad, thanks the town planning, people are buying more and more properties as these houses are bringing in not only faster return on investment but steadily,” said
A city that was earlier believed suitable for industries is now considering a real estate boom for residential purposes as well. Over the past year the property prices have shot up faster than even Delhi or Mumbai.
According to the director of Kunj Properties “they are looking for lands in remote places as customers are ready to buy there also, mostly NRIs and people coming from outside”.

India at 3rd position in global realty market rising

Growing realty sector of India has attracted overseas investors and figures in the top three property markets round the world, presenting the finest prospect for capital appreciation after the US and China. In the group of the most favorite property market in between foreign investors globally, US has retained its top position, while China was ranked 2nd followed by India, a survey carried out by the Association of Foreign Investors in Real Estate (AFIRE) said. China moved to the 2nd position, garnering 21.4 % votes and displacing India in the process, which was preferred only by 16.7% of the respondents favoring the country as the most fancied place for real estate investment.

In 2006 China got 14.6 % votes while India had 18 % and was ranked in the 2nd position. One of the important findings that cannot be unnoticed is the jump in investor’s confidence in China.

AFIRE Chief Executive J A Fetgatter told that this is the 2nd time in 3 years, China has been chosen as the country offering the 2nd best chance for capital appreciation after the US. Interestingly, the United States, whose economy continues to be bogged down by the subprime crisis and faces the danger of a recession, still managed to preserve the top position in the ranking list.Among those surveyed, 26.2 % said America offered the greatest prospect for capital appreciation in the real estate sector as compared to 23 % recorded in 2006.

Chatwal to Invest 5,000 Crore In India

Chatwal is all set to spend Rupees five thousand crore in India. At this time, his company is coming up with 8 hotels in Karnataka, Andhra Pradesh, Kerala and Tamil Nadu. The first of these properties, in Hyderabad.

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Fitch Prediction-Indian real estate sector 2008 outlook stable with a little negative bias

MUMBAI – Fitch Ratings said its outlook for the Indian real estate sector in 2008 continues to remain generally stable with a minor negative bias.

It is told by ratings agency that growth over the preceding 3 years has been supported by great economic fundamentals, with better demand on the one hand and increasing supply supported by equity raising on the other.

While Fitch believes these fundamentals should remain sound in 2008, property prices are estimated to moderate though the extent will vary from area to area.

Fitch also expects geographical diversification to continue through 2008 after real estate companies have extended to cities outside their main area of business. However, real estate markets will remain reasonably regional with some superior players establishing a panIndia presence.

According to Fitch revenue growth will continue in 2008 as companies persist to launch a number of new projects and created strong top line growth in 2007. Yet, the execution risk will become more marked as the area under development would be significantly larger than in the past, Fitch said.

Earnings margins in the real estate industry may be affected by rising land prices and lower selling prices in 2008. Whereas companies with historical land reserves would continue to record strong profit margins, companies that have purchased land in the last three years (at higher prices) may encounter a decline in margins from the levels of 2006 and 2007.

Fitch expects the overall debt level of real estate companies to increase in 2008.

NRI Organization Demands Fast Track Courts for Their Real Estate Dispute

In a recent development, a famous Non Resident Indian association has demanded to the Indian Government to bring in fast-track courts to facilitate quick disposal of their real estate disputes back home.Worldwide Group of People of Indian Origin (GOPIO), US based NRI organization further clarified that NRIs have substantial properties and investments in residential and commercial real estate in India, but the laws of the land do not give enough relief to guard them from defaulting tenants or usurpers.When it comes to getting their property vacated in India or when a tenant fails to pay rent, an ‘An NRI faces huge difficulties in resolving issues like this. Their properties are often seized by others, including relatives, and they have almost no redressal. This is a main problem of the community living out of the country.Mr. Maheshwari, a GOPIO member said that since the legal process in India is disgracefully staggered we think there should be fast-track courts for clearance of cases of NRIs. We demand this simply because we cannot be present in India and fight our cases endlessly. ‘In India there are separate courts and tribunals for some segments, Consumer protection courts. Can’t we have fast-track courts for NRIs? Else we are simply concerned about the security of our property in India,’ Maheswari said.The organisation has approached Overseas Indian Affairs Minister Vayalar Ravi and Law Minister H.R. Bhardwaj with their demands and is optimistic that the government will come out with a solution.

SmartCity Aims Industry Township

SmartCity is the result of JV (joint venture) of two companies.  It is promoted by TECOM Investment and SAMA Dubai.  Main goal of this joint venture is to build up and administer the Knowledge Industry Townships in whole world.  TECOM is contributing its specialized skill in creation and management of knowledge based industry clusters, while SAMA Dubai is investing its strength in real estate development in the international market to create an infrastructure and environment catered to the requirements of knowledge based companies and knowledge workers in this joint venture.

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Parsvnath Developers

Parsvnath Developers Limited is the most diversified and widespread real estate developer in India.  It has 115 continuing projects with a developable area of over 191 mn sq.ft.  Parsvnath Developers has been in the market for more than 20 yrs. 

On Jan 02, 2008, Parsvnath Developers has declared that the Company has got LoI from Director Town and country planning Haryana to develop an IT Park project on Main Gurgaon, Sohna Road just 3 kilo meters away from Rajiv Chowk, Gurgaon.  Approx Rs 650 crore is expected as a profit from this project within two financial years.  The project is expected to start within three months and will be completed within 2 years.  Parsvnath Developers already has one IT Park in Chennai.

On Dec 28, 2007, Parsvnath Developers Ltd has announced that the Company has achieved the completion and possession certificate from NOIDA Authority for its Group Housing project at Noida, Parsvnath Prestige for the second phase.  

On Dec 27, 2007, Parsvnath Developers Ltd has declared the beginning of its premium commercial project in the city of Raipura, Punjab.  The project is named as Parsvnath Highway Mall.  The project is in particular designed to offer commercial space to house large format stores showcasing range of aspiration brands to customers and will have a total saleable area of approximately 2.30 lac sq. ft.


Tips for Planing to buy or sell House

If you are making your mind for  purchasing or selling a property, just watch. Property buying and selling needs a great sense of judgment-making and a Watchful planning at the investment stage itself could really avoid trouble and many sleepless nights.
The tips below are not comprehensive; though they will serve you as a check list to plan your deal in advance.

Before you buy a home gather adequate information about the property to make a deal smoothly:

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Unitech posts 39% rise in net profit

January 31, 2008, NEW DELHI: Unitech posted 39 percent increase in consolidated net profit. It got an increment from 377.84 crore to 525.78 crore in a quarter. Total income of Unitech group during the quarter under review was Rs 1165.11 crore, which is 19% high from last year.

Mr. Sanjay Chandra, Managing Director, Unitech Ltd, said, “Higher sales, better price realization and strong project execution have resulted in a robust financial performance during the period. With many projects in the pipeline, we expect this strong performance to continue”.

The consolidated total income of this group from April 2007 to December 2007 stood at Rs 3,129.04 crore and consolidated profit after tax was Rs 1,301.58 crore.

The company made drastic step in Mumbai market by acquiring 50% stake in a company executing a 97 acre slum rehabilitation project. Company has also got a tender to develop a 1,750 acre township in Visakhapatnam. Unitech has also obtained a tender to develop a 350-acre township in Hyderabad.

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RBI monetary stand may strike real estate industry

The real estate sector may discover the going tough with a expected go down in housing demand following the RBI kept key interest rates untouched, belying hope of rate cut.

Real estate industry, which was hoping a slash in the interest rates on housing loans, felt although property demand would continue to boost, a cutback in rates by the central bank could have given a boost to sales. In addition, it could have produced millions of jobs in the building sector.

“Low interest rates would have unquestionably encouraged requirement in the real estate, but still at the offered rates, the demand would remain on to rise as economy is on an upswing,” DLF Group Executive Director Rajeev Talwar told PTI.

The banking & real estate sector had wished that following a 0.75 % cut in interest rate by US Federal Reserve, the RBI would also bring down interest rate by 0.25 to 0.5%.

The interest rate on house loans have gone up from around 8% to over 12 % within two years, hitting the home sales in metros and tier-II cities as well.

“We would have liked a softening tendency in interest rates to come out from the credit policy, which would have assisted not only the real estate industry but also in keeping the tempo of economic growth,” Omaxe CEO Parekh said.

“Unlike the US Federal Reserve which is always ahead of the curve, Indian Central Bank is behind the curve and we take action only when we see economy slowing down,” Parekh said.

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State for urban development minister hints at Model Act for real estate sector

Mumbai, Jan 30 Lower interest rates, land availability and creation of excess supply would be the solution to low-priced and reasonable housing, feel industry professionals. While discussing key challenges and prospects faced by the real estate sector at The FE Round Table Conference on the real estate sector titled Sustainable or Bubble? at The Hilton in Mumbai, select industry stated their visions before the chief guest, minister of state for urban development Ajay Maken.

Various processes and clearances were also seen as a obstacle to developing real estate projects. When real estate Companies look for consent to develop a residential building in India, they have to pass through 52 levels of authorization and guideline. The panelists expressed the need for a regulatory body to supervise the escalation in the industry and the minister too mentioned the “creation of a Model Act” to enhance the clearness in this key sector. Maken said developing a regulatory body would bring in more surplus of land, as developers will form more joint ventures for property development.

Niranjan Hiranandani managing director of Hiranandani Constructions talked about the scarceness of action taken by the rule makers to improve the circumstances. And Rashesh Shah, chairman and CEO of Edelweiss Capital pointed out that the 11% rate charged by housing Companies was possibly the maximum in the world when it comes to the differential between inflation and rates charged.

The central bank, panelists concurred, was probably overreacting to the risk factor. Anuj Puri, country head and chairman of Jones Lang LaSalle Meghraj said, “Ïn the real estate market, the real risk factor is the land fact as 80% of the rate is the land rate and 20% cost comprise cost of construction and other business deal costs. Hence, land possession is the most risk factor in the real estate sector.”

Anurag Govind, Parsavnarth Developers’ COO (west) shrugged off the threat of a slump in the market and mentioned the need for developers to have a well spread operational base to beat any correction that takes place.

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Akruti City Limited Reports One More Strong Quarter and Announces Interim Dividend of 18%

Akruti City Limited (ACL) (formerly known as Akruti Nirman Limited), one of the leading real estate developers of India, has stated total income of Rs. 140.02 crores ensuing in a net profit (after tax) of Rs. 72.14 crores (EPS of Rs. 10.81) for the third quarter ended December 31, 2007
“Akruti City continues to register rock-hard growth in all the uprights that we are participating in. Our expansion outside of Mumbai is continuing at a good snip and we have initiated a number of new projects in Maharashtra and Gujarat. With the proposed combination of capital from Private Equity players, the company is well on its way to continue to grow up and convey value to our stakeholders,” said Mr. Vyomesh. M. Shah, managing director ACL.

Akruti has a presence across the full variety of real estate from high-end super luxury complexes, mid-end extra-large residential complexes, commercial complexes, IT parks and SEZ’s spread over hundreds of acres of land, Biotech parks, robotic car parking towers, and townships. Over the past decade, Akruti has rehoused and rejuvenated a considerable number of slum families and repurposed the lands thus released towards developing better, greener, and cleaner cities.

Change In Investment Trends

Trend setter always started from the small and made a big one. Following the same strategy, a group of real estate companies, who are not in the position to proceed through the organized financing route of initial public offering, have started approaching the public in their own ways. They are assuring for regular returns on investments.
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