Monthly Archives: November 2008

John works for habitat for poors

November 29, 2008 – 5:15 am

John Abraham has got more than five lac US dollars on behalf of a Georgia based non-profit organization for building homes for the poor in India, Pakistan, Bangladesh and other countries.

John Abraham, who is the goodwill ambassador of Habitat of Humanity, received the money at a glittering ceremony here yesterday. The contribution, made by leading property developer ETA Star, is for Homes for the Homeless initiative and will be used to build homes for the needy.

Mr. Rick Hathaway, area vice president of Habitat for Humanity International, Asia-Pacific, was present on the occasion.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , | Comments Off on John works for habitat for poors

Hospital Project by Fortis- With DLF or Emaar?

November 28, 2008 – 2:15 am

Fortis Healthcare Ltd has a strategy to build hospitals with real estate giant Emaar MGF Land Ltd and DLF Ltd appear to be going nowhere amid Fortis’ concerns over the sites that were proposed by both builders.
Fortis had signed a memorandum of agreement with DLF in January last year to set up fifteen hospitals in townships being developed by the builder.
Mr. Shivinder Mohan Singh, chief executive officer of Fortis, said, “We are still working on setting up projects,” . Further he added, “But the questions is where and how many, and is it appetising enough? I think it is basically an issue of site selection for DLF and I guess in the current market this is not a priority for DLF.”
The number of hospitals is also down to four after Fortis found that most of the sites presented by DLF didn’t have much consumer or commercial appeal. Mr. Singh said that they realised that most of these township hospitals were not feasible. Further he added that they are told by their developer that out of the thirty sites, only four or five will work.
On an earlier occasion, DLF spokesman Mr. Sanjey Roy had maintained that the agreement with Fortis was on track and the hospitals would be set up once DLF starts work on its townships.
Emaar MGF also has an MOU with Fortis to develop hospitals in emerging real estate cities. Emaar plans to develop twenty-five hospitals with a capacity ranging from seventy-five to one-hundread-twenty-five beds over next decade. Mr. Singh said, “The agreement with Emaar is in a JV format and I am not aware of any dialogue with them in the last few months”.
Further Mr. Singh said, “We realized it’s not doable”. “The sites were too far, I mean you have a campus coming up at Manesar, what will I do with that?” Singh says half of the sites presented had to be rejected.

By | Posted in Property News | Tagged , , , , , , , , , , , , , | Comments Off on Hospital Project by Fortis- With DLF or Emaar?

Real Estate Market Has Enomous Power

November 27, 2008 – 8:59 am

Indian real estate market could reach a value of $60 billion by 2010, and become an “enormous” economic power, a Middle East developer has said. Abdullah bin Abdulaziz Al Majed, vice chairman of Tanmiyat Group, was speaking ahead of the firm’s participation at property show Cityscape India 2008. Tanmiyat is among a group of international firms expected to make a move in the Indian market when it recovers from a current slump. Al Majed pointed to statistics showing the market will grow from $16 billion to a possible $60 billion in two years, with 21 million new units needed. Al Majed said: “Cityscape India 2008 will shed light on the development of residential units for the poor, who form 70% of the population, along with its main concern of the development of units for medium-income people.

“This draws a clear picture of the future of real estate investments and available opportunities.” He said his company’s presence at the show meant it could “take a detailed look” at everything related to the Indian market. Cityscape India 2008, to be held at the Bombay Exhibition Center from December 8 to 10, is expected to attract more than three lacs property professionals and international investors.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , | Comments Off on Real Estate Market Has Enomous Power

Housing demand falls 35% in smaller cities: Assocham

November 26, 2008 – 6:00 am

The demand in the housing sector fell by 35% in tier-II and tier-III cities in the first half of this fiscal due to the high cost of borrowings, says an assessment by an industry lobby.

According to the assessment of Assocham, over 20 million people in about 25 tier-II and tier-III cities, who want to purchase dwelling units, but had to back out on account of rising borrowing costs.

This, in turn, has compelled most real estate developers to defer projects, Assocham said, adding that the rising cost of raw materials like brick, cement and steel has worsened the situation for them.

In tier-II and tier-III cities, property purchases had registered a growth of over 25% between April and September last year.

Higher interest rates have also upset payment plans of borrowers, it said.

The chamber’s assessment is based on feedback from real estate members operating in cities such as Chandigarh, Meerut, Pune, Bhopal, Indore and a slew of smaller urban centres across the country.

Developers giving the feedback include Parsvnath, Omaxe, DLF and Unitech.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on Housing demand falls 35% in smaller cities: Assocham

Citigroup gets economical support from US government

November 25, 2008 – 1:59 am

Citigroup has got US government support of $326 billion, which is roughly equivalent to one-third of the Indian economy.

Citi has received US government guarantees of $306 billion, a cover that will help it sell the sticky assets and irrecoverable mortgages on its books, and a $20-billion cash infusion from the US Treasury, which is over and above the $25 billion it had received earlier.

Citigroup’s CEO Vikram S Pandit gets to keep his job, at least for now. However, the US government will get $27 billion of preferred stock, paying 8% dividend.

After the stock crashed last week, there were speculations that Mr Pandit will have to quit and Citigroup may be sold in parts. The biggest banking rescue deal was quickly cobbled together over the weekend before markets could further punish the scrip and paralyze the financial system. When trading resumed on Monday, the Dow was in the green. The European markets also cheered the state support for Citigroup and were up between 2% and 5%, amid expectations that president-elect Barack Obama will push for an unprecedented government role in reviving growth and stabilizing the financial system.

But many emerging markets, where Citi has a sizeable exposure, were more guarded in their response. Key Asian markets were down between 0.25% and 3%, while back home, Indian equities rebounded from their day’s lows on news of the Citi bailout package, but ended the day on a subdued note.

The distant shakeout in Citi is also creating ripples in India. Among the senior officials to quit in the past few days is Brian Brown, head of equities at Citigroup Global Markets India. Citi Financial, the group’s non-banking finance arm in India which has seen high delinquencies, will receive $200 million infusion by March.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Citigroup gets economical support from US government

Rising demand for affordable homes

November 24, 2008 – 7:05 am

Property prices within the metropolitan areas of Delhi, Bombay, Hyderabad and Bangalore have seen massive growth in recent years and prices in some areas are considered
to be excessive. But, outside this golden circle, in cities such as Mohali in the foothills of the Himalayas and in the boom town of Rudrapur, in neighbouring Uttar Pradesh, where 465 factories are being built, construction is booming. In the south, Goa and Chennai are still steadily attracting investment.

In recent times, demand for housing has risen rapidly as income levels have soared, new jobs have been created and people’s aspirations have changed – although this is slowing down due to the credit crunch. A new report on commercial property by the Royal Institution of Chartered Surveyors lists India as one of the countries most vulnerable to the crunch.

Jane Jorgenson of Hamptons says: “The Indian property market is being affected by the credit crunch, as with all countries. Buying has certainly slowed. However, the growth of middle and high income earners continues to supply a steady market of buyers.” The property market has grown from £6.5 billion in 2005 to an estimated £30 billion. Hamptons has opened an office in Delhi, and has an India desk in London for UK-based investors.

Land prices have quadrupled over the past three years as developers rushed to build luxury residential developments, with starting prices at a minimum £125,000 for two bedrooms. But the big boom will be in low-cost affordable housing. The number of people earning more than £2,500 a year is forecast to double to 20 million in the next two years – not least because of the 2.5 million students teeming out of Indian universities each year.

The UK-based agency David Stanley Redfern is selling off-plan apartments in Rudrapur, northern India, costing £28,000 for two bedrooms. Called Mountain View, the scheme quickly sold out, but another is being built nearby which will also offer affordable housing, ready to capitalise on the anticipated demand. Rudrapur, designated a Special Economic Zone, offers tax incentives to companies moving into the area. The city’s new factories are expected to employ 300,000 people, at least 50,000 from outside the area, who will be looking for homes to rent. With only 20,000 new units being built, buy-to-let flat owners are hoping to cash in.

Emaar Properties and MGF are planning to build townships in Delhi, Hyderabad, Punjab, Uttar Pradesh and Chennai, an investment of more than £2 billion.

The potential for growth remains vast. Sebastian Siddiqui, who heads up Hampton’s Delhi office, claims: “With a rising middle class, 400 million people – more than the entire population of the USA – are set to buy their own homes.”

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Rising demand for affordable homes

Developers in the metropolis plan to target NRI buyers

November 24, 2008 – 7:01 am

Real estate developers in the metropolis plan to target NRI buyers, primarily in the UAE, in a bid to push up their sales, affected in recent times by high prices and adverse sentiment, a senior industry official said.

“With the Rupee depreciating via-a-vis the dollar, NRI buyers stand to gain by around 20%. Prices too have begin to decline. NRIs can get a good deal now and we intend to highlight this,” Maharashtra Chamber of Housing Industry’s CEO Zubin Mehta said.

The Rupee had depreciated from the Rs 40 mark a few months ago to the Rs 50 mark against the dollar last week, a fall of over 20% in the span of a few months.

The Rupee depreciation against the dollar would benefit NRI purchasers by around 20%. Besides, prices have declined by 10-15% in the last few days. If discounts by builders are also factored in, buyers could be advantaged to the tune of nearly 40%, Mehta said.

“If a 2 BHK flat in a decent Mumbai suburb costs around Rs 50 lakh, it could be available to NRIs for around Rs 40 lakh. Factor in the price decline and if the builder offers a further discount or says the stamp-duty is for free, then the flat could be available for as low as Rs 35 lakh,” he said.

The MCHI intends to use the Rupee depreciation against the US dollar as a major selling point to NRI buyers. It would be a holding an exhibition in Dubai end-this month where major developers affiliated to the MCHI would be showcasing their properties.

“NRIs in the Gulf primarily look at ready property and these could now be easily available to them,” Mehta said. Mehta said that the main reason for targeting UAE NRIs was that they were mainly working-class people who have gone to Dubai and other places in the UAE with the aim of earning a living and buying a home in India.

“They are not permanent residents like in the US or the UK. They primarily earn their living in the UAE and buy a home in India,” Mehta said.

These NRIs have the money and are the actual buyers but are holding back on purchases hoping that prices would fall.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , | Comments Off on Developers in the metropolis plan to target NRI buyers

Tight credit and small bonuses hit real estate

November 24, 2008 – 6:54 am

The giant cranes that once worked long into the Mumbai night are still, the roar of concrete mixers has dulled, and hundreds of migrant Realty hit workers have gone home.

A slowing economy, high interest rates, tighter credit and a falling stock market have left developers in India’s financial hub scrambling for cash and delaying or canceling ambitious commercial and residential projects.

The Mumbai skyline has been transformed in recent years as developers rushed to build gleaming office blocks, swanky apartment towers and sprawling malls.

Land prices quadrupled in some areas in the last three years, and commercial and residential spaces in Mumbai have become among the world’s most expensive.

Rising incomes, low interest rates, a soaring stock market and foreign investment fueled the boom. Now, some fear a bust.

“Besides the liquidity crunch, there is a real crisis of confidence,” said Anshuman Magazine, managing director for south Asia at real estate consultancy CB Richard Ellis.

Land and property prices could fall by between 15 and 50%, with some distress sales expected in the months ahead, analysts say, with a sustained slump having a serious impact on the already stretched infrastructure of the city and the country.

With half India’s wealth tied to property, according to CLSA estimates, the potential impact on banks and the economy is big.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on Tight credit and small bonuses hit real estate

Asia Pacific realty market rolling under slump

November 21, 2008 – 1:14 am

The Asia Pacific property market is witnessing major impact from global economic turmoil, with vacancy rates rising and office space leasing declining, according to global realty consultant Jones Lang LaSalle.

“In Asia Pacific, the financial market turmoil is starting to significantly affect the occupancy market for major financial office centres. Net leasing activity has been negative and vacancy rates have been on the rise for several quarters in Sydney, Tokyo, Singapore and Hong Kong,” JLL said in a latest report.

The consultant pointed out that rentals in Tokyo, Sydney and Hong Kong have already moved in downward phase of the cycle, with Singapore expected to follow suit in this quarter.

It has forecast that largest rental declines over the next one or two years are expected to be seen in the mature Asian markets following the demand contraction and the very strong rental increases observed in recent years.

JLL also noted that in the tier I cities in China and in some Indian suburban micro markets, the next two year will see abundant new supply hitting the market as demand begins to fall which would result in increased vacancy levels that could lead to major correction in rentals in short and medium term.

“In leasing markets where financial services companies contribute significantly to office occupancy and have driven rents to record levels, the increases now are beginning to reverse as the landlord-tenant power play shifts,” JLL said.

The report further pointed out that economic impact on real estate fundamentals are hitting more gradually in Europe than in the middle east and North Africa or Asia Pacific.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , | Comments Off on Asia Pacific realty market rolling under slump

TDI comes up with an EMI Scheme

November 19, 2008 – 7:09 am

TDI Infrastructure Limited (TDIL), one of India’s leading real estate developers, today launched a special scheme for the customers who wish to invest in its lifestyle apartments – ‘Kingsbury Terraces’. This one of its kind scheme will enable the prospective buyers to own the lavish apartment settings for just Rs. 9 lacs whereas the rest of the payments can be disbursed in EMI for the next 24 months.

Responding to the request and interest shown by all section of buyers, TDI has brought in this scheme as a part of its customer friendly approach. Though the actual price of the apartments start from Rs. 68 Lacs, the scheme enables the buyer to own any one of these exquisite high rise apartments for as less as Rs 9 Lacs.

Launching the scheme, Mr. Kamal Taneja, Managing Director, TDIL said, “Launching this scheme for “Kingsbury Terraces” is just one way of bringing in more customer friendly and innovative approaches to serve our customers better. We will soon introduce many more innovative schemes for our other projects which will be of benefit to our valued customers.”

Owing to the location of the project in Kundli, the potential emerging hub of NCR, Kingsbury Terraces offer the best of world-class facilities and features. Residents of each of these Kingsbury apartments will have their select king size living space and style.

This is ensured by exclusive gated access, with the block sporting modern amenities like gymnasium, swimming pool, billiards room and community club to name the basic ones. Inter-flowing beautiful greenery and landscaping, State-of-the-art international standard elevations, terrace garden, four spacious bed rooms with hall, a separate servant room and balconies all around are a part of the world-class designs given to these apartments.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on TDI comes up with an EMI Scheme

Unitech sounds out PEs to sell hotel properties

November 18, 2008 – 3:44 am

Unitech, the country’s second-largest listed real estate company, has put on the block all its six hotel projects under construction to reduce its capital expenditure and raise cash to fund its other ongoing projects. The company is in talks with a few private equity investors to sell all its six properties, being constructed at Gurgaon and Kolkata.

“We are looking at divesting up to 100% stake in all six properties, comprising 1,000 rooms. We are also talking to a few private equity funds for this, but a deal hasn’t been clinched yet,” a top executive at Unitech’s hospitality arm told ET. He said the company had also scaled down its target for hotel business. Instead of 15 hotels with 2,500 rooms as planned earlier, Unitech has decided not to go beyond the 1,000-room capacity.

“We are proceeding with our hotel business as planned earlier. Six of our hotels are under construction. The first will open in January 2009. Unitech is in the business of developing properties and looking at monetizing its real estate assets. We are evaluating a divestment of equity at both individual assets as well as a group of assets. Depending on the price, we will be looking at minority or majority or outright sale in these assets,” Unitech MD Sanjay Chandra said.

Unitech’s first hotel project will be the 199-room mid-market property, which will be managed by Marriott and sport the ‘Courtyard’ brand. A person briefed on the matter said that Unitech was seeking a valuation of Rs 250 crore-Rs 300 crore for the property, but had been offered a lower Rs 200 crore by a private equity investor. He said the two parties may close the deal soon at the lower end of the band.

Other two hotels of Unitech, for which the company has management tie-ups with Marriott and Carlson hospital chains, will be ready in one-and-a-half years.

Mr Chandra had said that Unitech planned to build 35 hotels, including 15 in the first phase. The company expected to raise $350 million through private equity in the current fiscal for its hotel business. The global financial turmoil, however, has made fund-raising difficult for real estate firms.

With equity as well as debt becoming increasingly difficult to raise, a capital-intensive business like hospitality has taken a backseat for developers. Even DLF has shifted its focus from hotel and mall business to other segments where revenue realization is quicker and easier.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Unitech sounds out PEs to sell hotel properties

Why will banks lend more to realtors in times of accelerating slowdown?

November 16, 2008 – 11:54 pm

Expect the markets to take the Reserve Bank of India’s (RBI) persuasive moves on Saturday to direct lending to real estate sector with a pound of salt.

The simple point being, when current loans are under distress, why will banks lend more to realtors in times of accelerating slowdown?

Also, all the measures announced are prospective, so any benefits that will percolate will only be through incremental lending — if it happens.

Nevertheless, here’s a quick check on the likely impact of RBI’s moves: Risk weights on bank exposure to the real estate sector and non-deposit taking NBFCs reduced from 150% to 100%.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Why will banks lend more to realtors in times of accelerating slowdown?

Realtors shift focus to budget housing

November 14, 2008 – 3:43 am

Declining sales, high interest rates, paucity of funds and global economic slowdown have badly impacted the real estate sector which is witnessing not only sudden slump in demand but also is at the receiving end in the stock market.

Freebies in the shape of luxury sedans, offers of foreign trips, 15%-20% discount or deferred payments have failed to attract buyers.

Fears of recession and an overall depressing sentiment have forced the real estate players to re-draw their strategies and curtail their expansion plans in the high-end and premium segment.

The focus has suddenly now shifted to providing budget housing in order to cash in on volumes and target Tier-II and Tier-III cities.

Parsvnath Developers Chairman Pradeep Jain said the Government should help the developers to launch a special scheme to promote affordable housing as costly land was a big hurdle.

Favouring Government’s intervention to give a fillip to affordable housing, Omaxe Chairman and Managing Director Rohtas Goel said: “There is an artificial scarcity of land. No cushion is left in the hands of developers to reduce the prices.” Omaxe has already put in place National Affordable Housing and Infrastructure Limited for developing affordable housing to a bigger section of the society.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on Realtors shift focus to budget housing

People Prefer Real Estate Companies For Business

November 13, 2008 – 2:26 am

India has always been a property oriented market. Irrespective of all the industries that have been booming, money flow into real estate has been steady and consistently increasing. In fact, people make money in their respective professions and most of the profits go back into property in India. That has been the way things have been for a very long time.
However, in the recent years, there has been a paradigm shift, and professional real estate management companies are slowly emerging as the preferred destination for investments of Indians from around the world. A survey states that the organized real estate sector in the country was a mere 2%, and will be counting for 20% by the end of this decade. That is serious growth!
If you look at the size of the country we are talking about, 20% of the market being developed by the organized sector would ensure that the overall quality of property in India would go up big time. And as always, property always reflects on all the other industries around it. So, when the quality of real estate becomes better, all the other indicators in all other associated industries would also become of a better quality.
A lot of people looking to buy residential property in India now prefer to go through established realty companies like Omaxe. Most of those investors are NRIs who’ve settled abroad many years ago. The reason is simple – going through a professional company adds value to your property in India, and is any day a better buy, as there are a lot of risks that are mitigated. The surprising trend is that people are now buy sell property in India in places that they have no direct interest in! All these years, investments were in our own cities. Now, investment happens wherever there is growth, and that is a very positive shift in the thought process of the investor. And many sellers also now prefer to go through organized channels. There are good times ahead – and we’re very happy!!

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on People Prefer Real Estate Companies For Business

Real Estate giant to sell off 4.5 million square feet

November 12, 2008 – 12:26 am

In a sign of the times, the country’s third largest real estate player, Housing Development and Infrastructure Limited (HDIL), has offered to sell off three of its plots totalling about 4.5 million square feet.
Analysts say the rare move shows the extent of liquidity crunch in the realty market where no developer normally takes the extreme step of off-loading valuable land stock.
The plots along with their potential Floor Space Index amounts to 1.5 million square feet saleable land at Andheri, 2.5 million sq ft at Kurla and 63,000 square feet at Carmichael Road in the upmarket Malabar hill area. At present, the Carmichael Road plot houses a bungalow.
The Kurla plot is a portion of the 53 acre land acquired by HDIL to rehabilitate 20,000 of the 85,000 slum-dwellers’ families, in Phase I of the massive Mumbai Airport Slum Rehabilitation project.
Earlier this year, HDIL had raised money through debts to purchase the Premier Automobiles Kurla land from an IFLS affiliate at Rs 1,900 crore.
The current debt of the listed real estate company, which is also one of the largest landowners in Mumbai, stands at over Rs 3,000 crore.
Sarang Wadhwan, HDIL managing director, brushed aside any co-relation between the debt and the proposed land sale. “It’s just a business move where we are planning to offload some land as a means of revenue. We are trying to raise money for the airport land rehabilitation. At present, work is on as per schedule at 125 of the 190 buildings,” he said.
Wadhwan refused to comment on how much money he expected to raise from the land sales. On whether the land would have any takers in the present market, he said, “The market is seeing a correction and there will definitely be no problem in getting buyers.”
Realty analysts state that HDIL’s move is just the tip of the iceberg in the real estate industry which has been aggressively acquiring land over the past few years. According to Akshaye Kumar, CEO of Parklane Property Consultants, over the last few months, a significant number of developers have put up a few sites on their portfolio for sale. “Historically, developers never sell land. Even when the previous real estate crash happened, there was only an odd developer who put up his land for sale. But this time, considering the asset-rich cash-strapped scenario, such a step might be unusual but not surprising,” said Kumar.
Amol Shimpi, national director for land sales at Colliers International, added, “Developers would not have done this during normal times. But with the tight cash flow, developers have more stock than they can build. A few have recently approached us to put up their land for sale; several others are expected to follow suit.”

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on Real Estate giant to sell off 4.5 million square feet

Prudential, DLF get in-principle nod for fund unit

November 11, 2008 – 5:56 am

India’s most valuable real estate firm, DLF Ltd, and American life insurer Prudential Financial Inc (PFI) said they have an in-principle regulatory approval for a mutual fund venture formed in December.

“We look forward to a successful launch once we receive the remaining regulatory approvals, which should take place sometime in 2009,” Rajeev Talwar, group executive director of DLF, said in a joint statement with Christopher Cooper, chairman of PFI’s international investments unit on Tuesday.

The fund venture, DLF Pramerica Asset Managers Pvt Ltd, is headed by Vijay Mantri, who joined in April from the Indian fund unit of Deutsche Bank.

DLF Pramerica joins more than 20 firms looking to break into the Indian fund industry, which saw its assets grow more than four-fold to Rs 5.5 trillion in five year ending 2007.

Assets have shrunk 28% to Rs 3.9 trillion this year due to a stunning 51.5% slump in India’s benchmark index and outflows from fixed income fund

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , | Comments Off on Prudential, DLF get in-principle nod for fund unit

Meltdown may hit infrastructure projects in Mumbai

November 10, 2008 – 12:13 am

The global meltdown is likely to affect infrastructure projects in the city and in the region, sooner than expected.

Several infrastructure projects in the state undertaken by the government, its corporations and civic bodies are likely to suffer due to the economic slowdown. The ones, which may be directly affected are the Built Operate and Transfer(BOT) projects.

Minister for Public Works (Undertaking) Anil Deshmukh admitted that the water transport project connecting the western suburbs of Mumbai to the island city, has been hit as companies bidding for the project have asked for more time when the last date was November 6.

U P S Madan, project manager of MTSU said, “The ongoing projects and the ones which have an earmarked fund will not suffer, but the ones which have been planned for the future and the BOT ones could take a hit. But there is no need to pull out a red flag now.”

Phase I of the Metro has already taken off and the tenders of phase 2 have already been issued. But the ones which need funding in future could be affected. Madan said that liquidity has become a problem with the private and government sector.

MMRDA sources added that nine metro rail corridors were planned for the city, discussions haven been held on starting four of them together. This plan could probably get affected.

Madan said that the meltdown will ultimately affect both the private sector and the government. The MMRDA generates its funds for city infrastructure projects from the sale of its plots. As real estate prices have fallen, selling plots will no longer generate the same cash flow as was seen in earlier cases.

Officials of one of the largest construction firms in the country, Hindustan Construction Company(HCC) which is constructing the Bandra-Worli sealink, say that they have not been affected yet. An HCC spokesperson said, “All our large projects have finances, so there is no problem. The meltdown might affect future projects but not our ongoing ones, we are also expecting the government to invest more in infrastructure,” he said.

Deshmukh said, “Even our ongoing projects have been affected. Contractors are asking for more time as banks have made it tougher for them to avail of loans.” Even the Dharavi redevelopment project is likely to be affected. Top MHADA officials said that one of the 19 interested companies did not turn up at pre-bid meeting held a few weeks ago.

MMRDA commissioner Ratnakar Gaikwad says that the depression may not adversely affect the MMRDA’s projects. “I also look at the positive effects of the slowdown. Prices of cement and steel are coming down and this will give a boost to the projects.”

A senior railway officer said that the completion of several railway projects may get affected as the availability of funds will be a problem for the contractors.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , | Comments Off on Meltdown may hit infrastructure projects in Mumbai

Parsvnath postpones its retail forays

November 6, 2008 – 6:58 am

Parsvnath Developers Ltd, the New Delhi-based real estate developer, has postponed its retail forays due to the current economic slowdown. The company, according to a senior official, would further re-evaluate the market situation to continue the initial plan. Meanwhile, the company is close to finalize the SEZ stake sale to private equity investors.

Pradeep Jain, chairman, Parsvnath said, “Due to the present economic slowdown, the company has put a hold on retail diversification. But this is a temporary hold and our international partner has also put hold on its expansion plans in India. If the condition improves, we can review the situation again in another 3-6 months.” However, Jain did not divulge the name of the retail partner.

Jain further added, “At present, we are talking to number of private equity investors, and talks are on for dilution of SEZ stake. We expect the deal to happen in another 2-4 months.”

On retail front, Parsvnath was planning to have 5-10 front-end stores by this fiscal, with an international retail partner supporting the company for logistics. The company’s retail plans included, hypermarkets, food joints, and “very large” retail stores of about 2.5-3 lakh square feet, but it will not include the cash and carry format.

In June, when the company announced its plans to foray into retail space, it expected large roll-out number to add to its balance-sheet this fiscal.

By | Posted in Property News | Tagged , , , , , , , , , , , , , , , , , , , , | Comments Off on Parsvnath postpones its retail forays

RBI may relax norms for loans

November 4, 2008 – 11:52 pm

The Reserve Bank of India (RBI) is likely to relax the provisioning norms against loans given to real estate and other sectors. In a meeting with FM P Chidambaram on Tuesday, PSU banks have asked for relaxation of the provisioning norms, without compromising on the quality of credit to utilize their capital more aggressively.
For example, at present banks must have a capital base of Rs 9 to offer a loan of Rs 100. But, in case of real estate sector, RBI has increased the requirement of capital base on certain category of loans by almost 50%. So to offer a loan of Rs 100 to realty, banks should maintain a base of Rs 13.5. On home loans of more than Rs 20 lakh, banks need to keep a capital base of almost 13.5% of the loan amount.
CMD of a public sector bank said this norm has increased the cost of funds, while lending to real estate, even if bad loan in this sector is less than 1%, which is lower than the banking sector average. If government wants to increase the credit flow to realty at competitive rate, the provisioning norms must be relaxed, the banker added.

Chidambaram on Tuesday said the real estate sector affects 50% of GDP, considering dependence of sectors like steel, cement and other small scale industries. He asked banks to enhance credit flow to realty.

The bankers also demanded change in the provisioning norms for other NPAs (non-performing assets). While RBI has tightened norms in the last couple of years, projects are getting delayed because of non-availability of funds, In some cases, corporates are asking for rescheduling of loans.

According to the existing norms, such accounts should be treated as bad loans and capital provisioning has to be made, which affects banks’ profitability. Besides, it reduces capital base of a bank and capacity to give loan.

Therefore, banks said if they are asked to reschedule loans or to give credit to vulnerable sectors, the provisioning norms should be relaxed and be made more practical. It is learnt that finance minister has given them the assurance that RBI will look into the matter soon. After the global financial crisis, central banks world over have relaxed the provisioning norms to enable banks to increase their exposures to companies.

However, keeping in mind the safety factor, Chidambaram asked banks to increase their capital bases to ensure that their total loan portfolio should not be more than 8.33 times of the capital base or in banking terms their capital adequacy ratio (CAR) should not be less than 12%.

By | Posted in Property News | Tagged , , , , , , , , , , , , , | Comments Off on RBI may relax norms for loans

Singapore realty encourages prospective Indian property buyers

November 4, 2008 – 6:55 am

Fearing a crash in local real estate prices, many well-heeled Indians are buying properties in Singapore. While such purchases could be pure investments, the lure of permanent residentship offered to certain investors under the Singapore law may have also influenced the decision. Many are drawn by the sheer ease in buying a house in Singapore.
The Far East Organization, one of Asia’s largest real estate groups, is among the real estate developers looking to pull in Indians to invest in the Southeast Asian country. The group will soon complete the development of Silversea, a premium residential seafront property, aimed at foreign buyers.
Singapore has attracted real estate investors for many years now. Thanks to a stable, business-friendly administration and a safe and multicultural environment, most buyers believe that prices would appreciate from hereon. However, Mr Kuah admits that the global financial market turmoil has caused a small price dip.
Officials from Far East Organization said the Singaporean government will provide various facilities for prospective property buyers; for instance, exempting them from the sales profit tax and providing them with permanent resident permits.
The government is expected to grant permanent resident permits to 40,000-50,000 expatriate residents every year. Around 14% of non-local property buyers in Singapore are Indians, according to government data. The Singapore government has targeted a population of 6 million, from 4.6 million at present, in the next three years.

By | Posted in Property News | Tagged , , , , , , , , , , , , | Comments (1)

New housing projects on hold in mumbai

November 3, 2008 – 1:21 am

The city is unlikely to see any new housing project coming up soon as the screws turn on the property market. Last month, Mumbai’s leading developers met and discussed the possibility of not launching new residential projects considering the slowdown, sources said.
“New projects are not viable, sales are slow and buyers are sitting on the fence. Every developer is looking at his own cash flow and many projects have slowed down. Each one is wise enough to take a call on what to do,’’ said Mufatraj Munot of Kalpataru, one of the city’s oldest builders and past president of the Maharashtra chamber of housing industry. He, however, denied that builders had taken a unanimous decision not to start new projects.
But with each passing week, stagnant sales is turning up the heat on the construction industry. “Builders are deferring launching of new projects. With banks and financial institutions turning the screws, the real estate market has dried up. There are no investors and the actual users are waiting for prices to come down,’’ said a property developer, not wishing to be identified.
With their backs to the wall, a majority of builders has also started retrenching employees. Last week, a prominent developer known for his signature buildings decided to virtually halve the 450 employees on his payroll, it is learnt.
Even the once lucrative transfer of development rights (TDR) market has lost sheen. Builders used to purchase slum TDR at Rs 4,000 a square feet till about six months ago. It is now down to Rs 1,200 a square feet. Still, there are few takers. Moreover, builders who have bought TDR have been unable to pay sellers. It is estimated that about 100 builders owe close to Rs 200 crore to TDR owners and traders.

In the market, although builders are not officially reducing the rates of properties, they are negotiating with individual flat buyers and offering discounts to bulk purchasers. In Bhandup, a developer recently sold six flats after he reduced the price from Rs 7,500 to Rs 4,200 per square feet. In Goregaon, the builder has offered a similar reduction to six buyers.

By | Posted in Property News | Tagged , , , , , , , , , | Comments Off on New housing projects on hold in mumbai

NRIs stay away from investment in realty sector

November 1, 2008 – 12:17 am

Another blow of the global meltdown has been felt by the already bleeding realty estate industry. Non-Resident Indians (NRIs) are avoiding coming home this year and not investing in property, something that brokers look forward to every year.
NRIs from across Punjab prefer investing in residential properties in and around Chandigarh, Jalandhar, Amritsar, Patiala and Ludhiana. This year, however, they have decided to stay put and not return home.

“The situation is very bad at present and is expected to grow worse in future,” says Kamaljeet Singh, president of the NRI Sabha in Jalandhar. He added that the impact of the global meltdown has been felt by all the sectors and real estate is one of the worst hit.

Property brokers across the city agree that the recession has further dealt a blow on the real estate industry, which was already going through a bad phase.

By | Posted in Property News | Tagged , , , , , , , , , , , | Comments Off on NRIs stay away from investment in realty sector