Monthly Archives: May 2010

Textile Firms Trying to Enter Realty

Since the land rate are rising and realty seems to be the most profitable market, many of the top textile firms are also attracted to this business and are thus generating additional revenue streams by developing or selling precious real estate.

Some of such firms are Provogue India, Century Textiles & Industries, Bombay Dyeing & Manufacturing and Alok Industries. These all aim at boosting the cash flow and reducing debts.

In the last year, the cities like Mumbai and Delhi have gone through a big hike in property prices. Across the whole world, Mumbai is rated as the most expensive office location.

The chairman of brokerage CNI Research, Kishor P Ostwal said that a lot of companies own huge land banks but the valuations in the market are given only to those who aim to develop these land banks and not just own them.

Thus, Century and Bombay Dyeing are both rated as a ‘buy’ by Ostwal since they have premium large tracts in central Mumbai.

Growth of JAL (Jaiprakash Associates Limited)

The Jaiprakash Associates, one of the leading infrastructure companies in India has covered a turn over or more than Rs. 10,000 cr.

The Jaiprakash Associates Limited (JAL), the leading infrastructure pudding stone having business interest in the area of cement, construction, engineering, expressways, power and associated real estate and hospitality, in order to continue the growth drift, has announced a net profit for FY10 on higher revenue. For 2009-10, a final dividend of Re.0.54 per equity share of Rs 2/- each has been advocated by the company’s board.

In the financial year 2009-10, Jaypee has shown a remarkable growth. Its total revenue exceeded by 72%; from Rs 5979.52 cr. to Rs 10316.04 cr. Although the EBIDTA went through a hike of 40.36%; from Rs 2059.91 cr. to 2891.44 cr., for the financial year 2010, the net profit registered a growth of 90.45%; from Rs 897.01 cr. in FY09 to Rs 1708.36 cr. in FY10. The revenue for this year on the basis of shares was up by 87.47%; from Rs 4.31 to Rs. 8.08.

BOP brings Real Estate Boutiques

Umbrellas at the Shoppes at the Palazzo
Better Options Property (BOP) which is a Delhi based realty management and advisory firm. These realty boutiques seem to be interesting enough since they will be developed for the first time in India. A realty boutique is a real estate Shoppe based on the model of a walk-in store for property consultancy and purchase. These will be called ‘BOP Studio”.

Some of the key features of these studios are:

  • An amount of Rs. 60 lakh would be spent by each studio on the infrastructure alone.
  • These studios would be located at the prime location in each city covering an area of 2000 sq ft.
  • Currently, the cities Noida, Kanpur, Chandigarh, Meerut, Jaipur, Agra, Lucknow, Amritsar, and Ludhiana etc will be credited with the BOP Studios.
  • It is expected that there would be thousands of professionals that would be recruited in these studios.

The target for the BOP studio is quite high. It might have to take around 10 projects hand in hand in every city where it plans to operate. According to Gaurav Mavi, director, BOP, although their plan of expansion in India through the shoppe concept may not flourish at once, but will surely be able to fetch profits later.

Most Prominent Land Deals in India

Green connection
Since now days, land is the most promising resource, the developers are ready to pay any price just to get into the realty business.

Here are some of the major deals in the field of land:

  • The Lodha developers had a deal of Rs 4,053cr for a plot of 25,000 sq mts. The sq per mtr cost is about  Rs 81,818.
  • Next closest deal was by Sunteck India. It was a deal of Rs 3,465 crore. Following Sunteck was Indiabulls Real Estate at Rs 3,327 cr which was backed by Gaurhari Estate at Rs 2,251 cr.
  • In 2008, BPTP, a Delhi based builder had a deal of Rs. 5000 cr for a 95 acre plot in Noida. Unfortunately the deal could not get through.

Lodha Developers plan to launch a 650 million dollar IPO in the end of this year. Also, they plan to build a residential building worth Rs. 10,500 cr in the center of Mumbai.

Realty Expo 2010 Scheduled in Dubai

Photo by on Vacation Mode
One of the most prominent bodies of realty developers and builders, Maharashtra Chamber of Housing Industry (MCHI) has planned to showcase the phenomenal work of Indian builders in the field of property in the 13th India Realty Expo 2010. This expo is scheduled from 3rd to 5th June, 2010 in Dubai, at the Renaissance Hotel, Deira. This step is taken by MCHI to bring some of the NRIs in the Indian realty market.

MCHI is a member of CREDAI, Confederation of Real Estate Developers’ Association of India. This expo will last as an opportunity to NRI investors to fully explore the offers and opportunities in front of them as far as Indian realty sector is concerned. This expo would throw light on all the fields, be it be housing, retail or commercial sector.

This ‘India Realty Expo’ will prove as a golden opportunity for the NRIs, especially in the Gulf region, to come back close to their motherland. Apart from CREDAI and MCHI, there will be 21 more builders who will participate in this expo. The expo will be held at from 5 pm to 9 pm on 3rd June whereas the timings for 4th and 5th June are 10 am to 1 pm and 4 pm to 9 pm. The main focus of this expo will be on the real estate sector of cities like Bangalore, Goa, Pune and Mumbai.

Buyers Burdened with Service Tax

Delhi Properties - Real Estate India - Unitech Grande
The apartment buyers were already burdened by the day by day increasing property rates, and now come another burden to their door. Since last month, many developers have been demanding the buyers to start paying up the service tax announced in Union Budget, 2010, i.e. a 2.5% tax.

However, this service tax will be imposed only on the under construction residential project or where the building has not yet received its occupation certificate. Some sources revealed that some developers admitted that they asked purchasers to pay this tax.

On the other hand, buyers say that they were not told about this additional taxation at the time of booking of flats. A market source told that although the buyers are raising voice against this game played by builders, but they do not have much choice. As they are forced to pay the development charges, society fees, hefty parking charges and other various charges, they will have to pay this tax too.

India is in Favorites’ list of Retailers

Photo by HelveticaFanatic
Although countries like China and Britain are ahead in the race but India has still managed to acquire 39th position in the favorites list of retailers in the world.

In 2008, the CB Richard Ellis (CBRE), a real estate consultancy conducted a survey in which India was ranked as the 44th preference of retailers. It is an appreciable growth of 5 ranks in just 2 year s. This survey was called ‘How Global is the Business of Retail?’

This survey conducted by CBRE is an annual survey which involves around 294 top retailers of the world across 69 countries. Britain acquired 1st position in the list, followed by the UAE, the US, France and China.

The chairman and managing director of CBRE, Anshuman Magazine said that since the last year’s survey, the growth of Indian retail market is commendable. However, the recent global economic crisis has slowed down the activities since it led to delay in completion of retail projects.

NRIs Entering Indian Realty

Pune Properties - Real Estate India - Vilas Palash Floorplan1
For the Diasporas, who plan to invest in the commercial and residential properties, the Indian real estate market is able to hold its position in front of them.
For instance, a person Ganesh is an NRI (Non Resident Indian) who currently is in London, UK. He wishes to buy property in India and thus needs advice and information on the regulatory framework for investing in Indian real estate.
The NRIs and foreign citizens belonging to Indian Origin (PIO) are permitted to buy Immovable property in India. The people who held an Indian passport (at any time) or who had/have their parents or grand-parents in India come under PIO.
It is to be noted that even if the citizens of Bhutan, Afghanistan, Sri Lanka, Pakistan, Nepal, China, Bangladesh and Iran fulfill above conditions, they are not allowed.

New Project by Jaypee

End of the line for the east side of Elway Court, March, 1967
Photo by Lone Primate
A new project, Yamuna Expressway is introduced by Jaypee in the northern state of Uttar Pradesh which is a 165-kilometer, six-lane expressway. This project has a total cost of 2 billion dollars. It connects Noida, near Delhi with city of  The Tajmahal, Agra. Realty of about 25 million sq ft. along the expressway is being planned by the company. Mr Manoj, Chairman of Jaypee Group told the media that although the expressway will be started in phases from November onwards, it will generate toll revenues in FY12 only.

Revenue of 100 billion is planned to be generated by 2015/16 by the firm. This fiscal, they saw a revenue of Rs. 25 billion, all from real estate sales. The managers to the Jaypee Issue were Bank of America-Merrill Lynch, SBI Capital Markets, Kotak Mahindra Capital, IDFC Capital, ICICI Securities, Morgan Stanley India, Axis Bank, JM Financial, Enam Securities.

In March, on the last day of the offer at the bottom of the price range, a share sale of $2.2 billion in state-run miner NMDC was covered. ($1=47 Indian rupees)

Tata Housing Awarded as Best Developer

One of the leading real estate companies of India, Tata Housing was honored by the Best developer award in the category of CSR in the recognized award ceremony called Cityscape Awards – Real Estate Asia, 2010.

According to experts, when they analyzed the commitment and positive contribution of the company in the society welfare, it would be fully justified to call it one of the best developers in the Indian real estate market.

The award ceremony was originally organized to honor the real estate companies and industry professionals who have put their heart and soul into the realty and have done significant contributions in the growth of Indian realty. A panel of experts was the judge.

The Managing Director and Chief Executive Officer of Tata Housing, Brotin Banerjee, said that the company has the motive of delivering to the consumer what he wants. They firmly believe in ‘what you see is what you get’. And the Cityscape award is the evident of the contributions the company has made over the years to the society.

Real Estate Growth Analysis

Delhi Properties - Real Estate India - Unitech Verve 1

Analysis of the growth in real estate sector in last few years was performed. It revealed some very interesting statistics of the growth. The facts go like this:

In 2007, the office sector experienced highest demand. Grade A office space of about 32 million sq ft leased out in that year. But after that, it has been a decline throughout. In 2008, it reduced to 28 million and a further decrease to 21 million in 2009. However, now a growth back to 28-29 million is seen. Although it is less than what was in 2007, but still is complementary. This demand majorly comes from infrastructure companies, from Indian corporate who wish to merge, from pharmaceutical etc and it is at pace in Bangalore, Delhi and Mumbai.

After the office space, we move on to the residential sector, where once again these three cities are putting their landmarks. Even on the account of increasing prices, these cities have managed to go through a rise in demand. In cities like Mumbai where the pricing went through a downfall of around 25-30%, it has once again come back with the demand as well as pricing. However, the situation is not the same in the other regions of India as far as residential sector is concerned.

Next comes the retail sector. This sector has not seen much growth. Although the demand from some new Indian corporate, the existing retailers and many foreign retailers, this sector still seems to be gloomy for now.

Increase in Registration fee of Property

After a long gap of 45 years, finally this Monday, Delhi cabinet approved the proposal of increasing the registration fee of property in the city. It is expected that through this revision, the revenue collection will be increased from Rs 1.5 cr. per year to Rs 100 cr.

This revised fee is as follows-

  • 1% of the stated value or the circle rate whichever is higher up to a fee of Rs 50,000 will be charged for registering sale deed, conveyance deed, gift deed etc in case of immovable property.
  • Rs. 1000 will be charged if the value of property is not mentioned.
  • In case of immovable property, Rs 1,000 is the fee for registration of lease.
  • Registration of wills will be done at Rs. 500.
  • Rs. 1000 per document will be the cost of miscellaneous registration of documents.
  • Rs. 10 per page will be the cost of copies of registered documents.
  • Rs. 50 will be charged for filling the translation.

Sale of non-core assets is DLF’s Plan

central business district
, India’s leading real estate developers, plan to raise an amount of Rs. 2700 cr. this financial year by selling non-core assets in order to reduce its debt of over Rs 16,421 cr. by about 33%.

The realty giant plans Rs. 5000 cr. to be cut from its debt. Out of these, Rs. 2700 cr. will be raised from sale of non-core assets and the left over from internal accruals. Last year, DLF could raise only Rs. 1800 cr. from sale of non-core assets while it planned for Rs. 5500 cr.

This fiscal, DLF has to compensate Rs 2,500-2,700 cr. in debt and also an interest of Rs. 1800 cr. Also, officials believe that this divestment of non-core assets is not just a means to reduce debt but is a strategy to focus more on the core business operations.

Rs. 7,855 cr. was the overall revenue during financial year 2009-10 which is reduced by 25% as compared to Rs. 7,855 cr. in financial year 2008-09. The firm sold an area of 12.55 million sq ft across the world in the last fiscal.

Impact of Regional Laws on Realty Sector

In past few years, the realty sector has shown tremendous growth but according to experts, it may still remain a regional play in the country. The underlying reason is that different regions have different laws.

JLLM, Jones Lang LaSalle Meghraj, a property consultant firm’s  Country Head and Managing Director Anuj Puri said that developers experience difficulties in having a pan-Indian presence due to the different procedure and different laws in every state for acquiring land, property taxation and approvals for projects.

Since there is a need of understanding local dynamics for developing realty projects, many developers take property sector as a regional business.

The problem for developers of having a pan-India presence cannot be helped until there is in land acquisition process and regulatory approvals are the belief of many consultants and developers.

Jaypee Greens “Kasa Isles”

19b The Balian Masion (E)
Mediterraneon Style Architecture
Jaypee Greens
recently launched “Kasa Isles”. This is an anomalous project which has taken inspiration from the Mediterranean style architecture. This project will introduce high rise flats and is located at Sector 129, Jaypee Greens, Wish Town, Noida.

There will be somewhere 2000 apartments in “Kasa Isles”. These flats fill you with delight and make your living worth. These luxurious flats are in the reach of common man and thus have the potential of attracting individuals. Studio apartment, Duplex Penthouses and 2/3/4 BHK apartments in sizes ranging from 550-3100 sqft will be offered in this project.

This project is highly influenced by the Mediterranean style architecture, especially its ambiance and landscaping. The green parks guarantee hi-quality lifestyle for its residents with its large range of recreational facilities like central club and with low-height stone fountains. Some more facilities are Italian style swimming pool, sports facilities for Tennis, badminton court, jogging tracks, Card room, Mediterranean cuisine restaurant and many more.

The price list has a BSP of Rs 3390/- per sqft.

The most attractive feature of Kasa Isles is the club it is offering to the residents. In order to give its members a warm welcome, it has soothing interiors created with terra cotta walls blended with stacked stones in the club. A complete home is offered with wide & low windows, arched entrance opening to wide sitting areas, a stone fireplace, and beautiful hardwood floors.

Jaypee Greens “Kensington Boulevard” A New Paradise in Noida

Jaypee Greens is independent of any introduction since it is a well known Indian infrastructural industrial conglomerate. Jaypee GreensKensington Boulevard” is a new project launched by Jaypee Greens in Jaypee Greens,Wishtown, Noida which is itself spread over 1162 acres of land and is a paradise to live in.
The name itself implies that uniqueness of the community is the beautifully landscaped boulevards, as inspired from its namesake in UK. Inimitable landscaped boulevards/ streets nestled in Wishtown Noida are the essence of Kensington Boulevard. Use of exclusive types of street furniture, flora, street art, lighting etc. will be seen in it.
Approximately 2500 flats will be offered under this project with many options such as 2/3/4 BHK Apartments, Studio flats and 3/4 BHK Duplex Penthouses. Concepts like ‘Patios’ will be reflected in the gardens. The vision behind these residential towers is to offer exceptional apartment layouts with un-ending views for the residents. These flats available at a price tag of Rs 3330/- per sqft seem like a good way to go.

Necessary Documents for Selling Property

Housing Society Office: Cambridge UK
Essential Documents

The sale/purchase deed and the housing society share certificate are the major documents required while selling a property. Sale deed serve as confirmation for the land belonging to the seller only and he has full rights to sell the land. Some more documents such as NOC from the housing society, registered house documents and original copies of stamp duty are necessary. Also, the owner/owners have to submit documented consent if it is a joint ownership land.

Necessary clearances

The NOC from the society and title clearance are necessary, but they are not sufficient. The exact details of how old the building is, the carpet and built-up area, car parking status, the floor plan, land title (free hold/lease hold/collectors land), the conveyance of the society and transfer charges of the building and the apartment also have importance.

Slowdown in Retail Rental

Space Shopping

The real estate consultants Knight Frank India said that apart from some localities of Delhi and Mumbai, the retail rentals in other locations will be sluggish for next two years. Although the number of malls and shop space has tremendously increased, the retail still lags behind commercial and residential property.

“Although the outlook looks interesting, builders should take the supply indicators as a word of caution. The reason behind it is that over supply is expected in locations like Pune and NCR”, says National Head at Knight Frank India, Samantak Das.

Retail advisory, Sushil Dunarwala, chief executive of Beyond Square sheet Advisory Pvt Ltd said that the benevolent thing is that builders are still reconsidering their growth strategies in order to avoid further mistakes. Mantri Square, Bangalore which is India’s largest mall and opened in March have a 90% occupancy rate.

Infra Fund of $500 by ICICI Venture

Icici Bank, Festival of South Asia, Toronto
May 12, 2010

The chief executive of India’s ICICI Venture which is the ICICI Bank’s private equity arm announced that they plan an amount of 500 million dollars to be invested in infrastructure projects. This will be launched by July.

In an interview, Vishakha Mulye told Reuters that majorly education (and) hospital will be put as part of infrastructure, but also there is a big scope of infrastructure like ports, power, and roads.

Construction of bridges, roads, power plants and airports has taken priority in India and govt. expects a fund of half of total expense as funds from private firms.Update on Burnside-Couch project-3
Photo by

Women Left Men Behind in Realty Market

“Trust me with your next home purchase!”
As per a report of National Association of Realtors, in 2009, single accounted for 21% of home purchases while single men contributed just 10% to the sales. It is an unexpected report as compared to the 1980’s when they both used to contribute equally to the home sales.
The president of the market research firm American Lives, Brooke Warrick said “I’ve given some of my [home-building] clients, lessons on how to be gender friendly”. He also revived sellers to look up at women as viable buyers and not to treat them as bystanders by just handing them a brochure on the entrance of home.
He also advised the realty developers to take these women seriously since they actually need them.
After analyzing the market, Warrick concluded that young women, especially those settled in secure industries like health care earn more money than their male peers.

Realty Regulator in Delhi

Bamboo scaffolding in Hong Kong
May 08, 2010

On Thursday Mr. S. Jaipal Reddy, the Urban Development Minister told that by the end of this year, Delhi realty will go under regulation.

Govt. is discussing with other states too for the similar regulators, he added.

Reddy said that “The state governments have sounded positive. It would take time to happen. But Delhi will get a regulatory authority for the real estate by this year”.

He said that since the draft bill has been circulated to the stakeholders, the legislative procedure for the real estate regulator for Delhi would soon come to an end.

The motive behind this regulation is that it would hold back realtors from indulging in unnecessary profiteering, according to him.

Commercial Project by Omaxe in Punjab

trade tower

A new commercial project was today announced by Omaxe Limited, a real estate developer, in Punjab.

The project has a value of Rs. 120 cr. and is expected to complete within two-and-half years from the commencement of construction.  The project is likely to be the tallest commercial building of Punjab and is called ‘India Trade Tower’.

It would be a contemporary building with nineteen floors with a total area of 2,45,000 sq ft. This tower would boast offices and retail spaces.

Ritesh Sehgal, the Additional Vice President (Sales and Marketing) said that the underlying motive of this tower is to fulfill the needs and aspirations of companies and also the business community of Chandigarh. The launch price is Rs 4,430 per sq ft for the space in the project.

Omaxe Limited

Rs. 1000 cr. fund to Realty by ICICI Venture

Delhi Properties - Real Estate India - Unitech Grande
May 06, 2010

It has been known through some sources that by the end of this month, the venture capital firm promoted by ICICI Bank, the ICICI Venture is expected to launch a fund of Rs 1,000-crore for the domestic realty to invest in country’s residential projects.

The plans are to end the fund in six to twelve months and then invest in top 5-7 cities. Also, some sources revealed that it was looking forward to launch by the end of this year, an offshore fund.

The president, real estate, ICICI Venture, Sanjeev Dasgupta, confirmed the development. However, he said that the exact amount which is to be raised is not yet fixed. The current fund of ICICI Venture in offshore and domestic real estate funds is 550 million dollars.

However, small projects are the choice of Dasgupta since exit from them can be faster.

Luxury Chains by Hilton in India

The Hilton International Co, a US based hospitality giant, is looking forward towards bringing to India more of its global brands, especially the luxury chains Waldorf Astoria and Conrad.

Besides the joint venture with DLF, a leading real estate firm, the company also has a keen interest in expanding its existence in India. Also, it is believed that they have sought permission to either acquire stake or invest in other Indian hospitality firms.

A company insider told that the company has sought an assent in order to operate in India. It is now looking forward for some partners for the completion of the task of bringing its different brands into the country.

It has successfully acquired the permission from government of India to bring four of its brands into the country.

Currently, there are two hotels by Hilton in Delhi. One of them is under the JV and the other is in partnership with a local partner.

Buyers Returning to Residential Properties

Goa Real Estate Properties - Sapana Palmeiras

May 04, 2010

Investors have made a return to realty. Long term capitalization and an expected rise in this sector are the two major reasons for this come back.

However, the present investments are not as good as they used to be before recession period.

The Chief Financial officer of Mantri Developers, Anil Kumar said that currently there is a considerable amount of investment and it is expected to increase in future.

He also added that the realty cost which went through a sharp correction during the recession now has a large scope for capital appreciation in future.

In India, the usual investors in the residential properties are the Non-Resident Indians (NRIs), High Net worth individuals (HNIs), domestic investors and professionals with large disposable incomes.

However, the view of analysts is different.

According to them, although the investments are higher than they used to be at the time of recession, but the uptake is not encouraging due to the recent increase in price by developers.