India Real Estate Link

Budget Hits Hard the Realty

chandrika johri — Thu, 11 Mar 2010 07:11:40 +0000

tThe real estate sector got hit quite seriously by the budget details. Very intelligently the Budget bribed the home buyers in the form of interest rate subvention and tax savings. On the other hand service tax on lease rentals in the Finance Bill was also brought back. So, the builders decided to pass on the service tax burden to customers. The continuation of interest rate subvention and higher disposable income in favour of individuals through income tax reliefs would make up for it and appear as the silver lining.

A maximum tax savings announced by Budget of Rs 20,000 for those earning an annual income up to Rs 5 lac and up to Rs 50,000 for those earning up to Rs 8 lac is likely to find its way towards buying homes. But the biggest worry of developers is re-introduction of service taxes.

Jai Mavani, executive director and head of the real estate practice at KPMG said, “The imposition of service tax will increase the price of properties.This has hit the hardest, as even renting under-construction property will attract service tax now.” Apart from this though the budget gave some relief by extending the completion deadline to projects started before March 31, 2008 as “one-time relief to the sector” but still developers and consultants said the measure does not help much. the impact of the amendment would be marginal because the commencement date of March 31, 2008, has not been extended but the period for implementation has been extended by one year.

However, hotel industry welcomes expansion of investment-linked deduction. The finance minister’s gave investment-linked deduction to new hotels in two-star or above categories.States like Himachal Pradesh and Uttarakhand will be benefitted. Now it has been extended to all.

A Delhi-based analyst said, “It’s a good measure that will boost investment in the tourism sector, with high employment potential. Also, the fact that the benefit is made available to hotels across the board will boost investment in all categories”.

Affordable Houses Now Unaffordable

Anchal — Wed, 10 Mar 2010 10:54:51 +0000

The Only Affordable House
March 10,2010

The fact that inflation rate and overall prices of raw material are rising is becoming one of the major reasons for the property price rise.

In the last few months, developers have boosted up the property prices by 10 to 35% while offering exciting packages as a gadget to attract buyers.

The joint managing director of Royal Palms,Mr. Dilawar Nensey accepted that they have accreted prices from Rs 3,999 to Rs 4,930 per sq ft but on the contrary, also claim that it is still 25 to 30% cheaper than the other available properties of Goregaon and Mumbai.

According to experts, there were 300,000 affordable homes announced by the developers across India 15 to 18 months ago to tide over the burden in the property market and mop up resources to pay back debt.

CEO of Liases Foras, a property research form that tracks projects and prices, Mr. Pankaj Kapoor reported that in order to show high sales, an aid of launching affordable housing was used. So far, no delivery is started. Most of the projects have not yet been started even.

Although many examples of such projects remain stalled due to lack of approvals, it seems that Tata Housing’s project at Boisar, 120 km away from Mumbai will be handed over to buyers later this year.

Nensey claims that ideally, an affordable house should be a basic one but be priced about 20%to 40% less than the prevailing rates. However, with the tag of ‘affordable’, developers are selling their projects in far-flung areas at the prevailing prices.

Another problem is location. Dearth of infrastructure and hikes in transportation costs makes the cheap home unavailable, if the drive to work is 100 kms.

Kapoor concluded with his words “Only a superman can afford to stay in an affordable home… and zip to office through the air!

Realty In Glooms!!!

Anchal — Tue, 09 Mar 2010 11:19:47 +0000

March 09,2010

Since most builders have hiked prices, along with the recent budgetary proposals, it is likely that realty sector may lack in demand in the long term.

Under the Union Budget 2010 announced by Mr. Pranab Mukherjee, the realty sector has not been able to get much. Although some acts were made, a lot remained unvoiced. Schemes like extension of one-year for completion of housing projects to allege tax benefit or acceding a greater proportion of commercial space in city projects or an extension of one year for interest rate subvention may sound as a boom to few but would actually hit both developers and buyers at large through the imposition of service tax on under-construction housing projects.

IMPACT OF BUDGET ON SECTOR FINANCIALS

Decline in profit marginThe December quarter saw a growth of 27% in net sales for the industry driven by the launch of affordable housing projects by leading builders including Unitech, DLF, HDIL, Orbit, Sobha and Puravankara among others. Nonetheless, there is a downfall in profit margins due to this increase in sale. The offer of mid-income housing is not 50-60 % margins available in the premium and luxury segment resulting in industries working on operating margin of about 35-40 % while net profit is down to around 20-25 % from 50% in the December 2008 quarter. Margins were further hit for the above developers as these companies reported an increase in the cost of construction. Also, due to the service tax, apartment cost would go high resulting in discouraging the buyers.

GLEAM OF HOPE

Looking for futureAn increase in sales of residential units is expected as per the analysis made from the registration and mortgage data. A strong 30% growth in loan disbursal in the December 2009 quarter over last year has been reported by some large housing finance companies, such as HDFC, LIC Housing, SBI. Since most builders are increasing prices rapidly, along with the budgetary schemes, it is expected that the sector may see some decline in demand takeoff. However, companies that maintain a strategy of competitive pricing may be able to carry on their growth.

Better Buy A House Now, Than Regret Later

Anchal — Mon, 08 Mar 2010 13:37:28 +0000

Hike in real estateMarch 08,2010

The decision to buy a house seems like a no-brainer. After all, it is a highly in demand tangible treasure that sees constant appreciation most of the times, besides of course, fulfilling the most basic need of mankind — shelter.

If you are planning to buy a house, then it is good to grab it now since the realty prices seem to touch sky from July since Banks have decided to increase interest rates in the range of 0.25-0.5 % points on home loans, which could further be hiked in the awaited credit policy. Moreover, the service tax of 3.3%, announced in the Budget, will be effective on your home from July.The realty developers also plan to pass the burden of service tax imposed on them, onto the end customers. Along with these taxes, someone buying a house property in Delhi will have to pay a stamp duty of 8 percent as a sale of immovable property.

Realty developers are not pleaded at many budget details.Companies including realty majors like DLF, under the patronage of Delhi-based real estate body National Real Estate Development Council (Naredco), Omaxe’s group will soon approach the FM for a rollback of service tax. However, finance ministry executives have said they won’t entertain any appeal for change in the Budget proposal. Even Mr.Y.G. Parandhe from Central Board of Excise and Customs made this crystal clear through his statement , “We are not taking up the issue as it stands now”.

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Jaypee Greens Sports City announced in Greater Noida

admin — Mon, 09 Nov 2009 12:07:15 +0000

Photo by Carlos Lorenzo

Jaiprakash Associates (Jaypee Greens) have announced the launch of their new project “Jaypee Greens Sports City”, a luxury township with residential and sports facilities, near the Taj Expressway (connecting Greater Noida to Agra). “The Sports City is positioned for everyone who appreciates luxurious surroundings and spaces equipped with sports and recreational facilities,” according to a press release by Jaypee Greens.

The Sports City will have various Residential Districts which would be built by the company in phases. The first district will be the Country Homes, with sizes varying from 200 to 4000 sq mts. This will be followed by Lake District with high, mid and lower end apartments. The city will have features like uninterrupted water and electricity supply from Jaypee Group’s own power generation plants, round the clock 3 tier security, super specialty health facilities and educational facilities ranging from Kinder crib to professional levels.

For more details and booking: http://www.propertywala.com/projects/560172

Real estate key for equity markets

rajani — Thu, 08 Oct 2009 06:48:44 +0000

Real estate could be the lynchpin for the equity markets and a failure of a large IPO could start a correction in the market.

Mr Deepak Parekh, Chairman-HDFC Bank, said, “If a large real estate IPO fails, it could have a serious repercussion on the market”.

Mr Parekh stated that many of the recent IPOs have been overpriced and the markets are looking expensive.

Further he added, “Companies raising money need to leave money on the table for investors”.

Indian realtors recently made a trend to raise money through IPOs, with at least five major real estate companies like Emaar MGF Land, Lodha Developers, Sahara Prime City, Ambience Ltd and DB Realty are looking to raise over tweleve thousand five hundred crore rupees.

Indiabulls Power price band

rajani — Wed, 07 Oct 2009 12:52:26 +0000

Indiabulls Power is likely to fix a price band of Rs 42-45 per share for its proposed IPO, which is expected to start on 12th of October.
The price band of the Indiabulls Power IPO is likely to be Rs 42-45. Calculated on the upper end on the price band, the company would collect around seventeen hundred crore rupees through this IPO.
The IPO is expected to open on twelve of October and would close on mid of October.
Indiabulls Power had filed the draft prospectus with market regulator Sebi in July this year and on 1st of October; it filed the red herring prospectus with the Registrar in this regard.
The company is planning to knock the capital markets to raise funds to part finance the construction and development works at its power projects and other corporate purposes.

RBI may hike interest rates

rajani — Wed, 07 Oct 2009 12:51:46 +0000

The RBI is planning to hike interest rates marginally in the fourth quarter of this fiscal to give a signal to the market.
“To give a signal that the government is concerned about inflationary pressures, there is a chance of a marginal hike in interest rates in the January-March 2010 quarter,” HDFC Chairman Deepak Parekh said at the PE International India Forum.
The hike in interest rates could be by at least 0.5%, he said, adding, however, that any hike in rates was unlikely to happen in the current quarter.
On liquidity, Parekh said that presently it was sufficient.
With a revival in the economy and pick-up in construction activities, banks could witness a growth in their wholesale loans going forward, he said.
However, any pick-up in loans to the commercial real estate sector is unlikely, he said.
he said, “I don’t see commercial real estate loans picking-up…There are a large number of commercial real estate properties that are ready to occupied”.
Parekh said, Banks have seen an increase in their housing loans portfolio in recent months.
Parekh observed that housing prices have started inching up in the recent months.
He said, HDFC has seen a sequential growth of 30% in its loan approvals in the July-September quarter of this fiscal and expects growth to pick-up further in the coming months.
Parekh said companies have to be cautious while pricing their IPOs as failure of large IPOs could dent investors’ confidence.
he said, “We must learn to leave money on the table. Investors are there to make money. If large IPOs fail, then there is a huge repercussion in the market”.

NGO to build thousand houses in flood-hit areas

rajani — Wed, 07 Oct 2009 12:44:08 +0000

The south karnataka based NGO Shree Kshethra Dharmasthala Rural Development Project (SKDRDP) has come forward to construct one thousand houses in flood-affected districts of the State.
Dr L.H. Manjunath, Executive Director-SKDRDP, said that the thousand houses will be built at a cost of ten crore rupees. Asked about the location of the houses, he said the area will depend on the request from the Karnataka Government.
Further he said, Based on the reports from the ground-level workers of SKDRDP in the flood-affected areas, the President of SKDRDP, Dr D. Veerendra Heggade, has ordered for the release of ten crore rupees for the construction of thousand houses.
It may be mentioned here that the State Government has requested the heads of religious institutions, business and industry establishments and others to help take up relief measures in the flood-affected areas in many districts of Karnataka. The Government has sought their help to construct around two lakh houses in the flood-affected areas.
Dr Manjunath said that SKDRDP has also made arrangements for the distribution of 5 lakh rotis in flood affected areas.
The self-help group (SHG) members affiliated to the SKDRDP in Dharwad, Haveri and Gadag districts have come forward to prepare rotis for distribution in flood-affected areas. He said, “The first lot of two lakh rotis has already left for areas such as Raichur, Koppla and Navalgunda”.
Further he added, As the floods have damaged crops in many districts, the SKDRDP President is planning to disburse seeds for replanting in those areas.

Tata BlueScope and Arshiya Intl tie-up

rajani — Wed, 07 Oct 2009 08:04:26 +0000

Tata BlueScope Building Solutions, a division of Tata BlueScope Steel Ltd, has tied-up with Arshiya International Ltd to provide Butler Building Systems for Arshiya’s upcoming warehousing projects in India. TBBS has started work, and is currently executing six Butler Buildings at Panvel. Arshiya plans to erect 19 warehouses and chillers units at Panvel and, subsequently, intends to erect 40-50 warehouses at Nagpur and Noida besides the UAE in the next three y ears. Mr H.G. Chandrashekhar, VP-TBBS, said, “Despite the volatile market conditions, infrastructure sector, especially the warehouse segment holds a tremendous growth potential. We are well-poised to successfully meet the evolving demands of the emerging warehouse markets.”

Madhucon Gets $3.9 Million Nepal order

rajani — Tue, 06 Oct 2009 07:09:45 +0000

Madhucon Projects Ltd, a Hyderabad-based infrastructure company, has secured a $3.9 million order for a road project from the Government of Nepal.
According to a company statement, the mandate involves upgradation of Sanfebagar-Martadi road under the road improvement project of the Exim Bank of India, Mumbai.
It had commissioned its first BOT project on NH 11 on the Bharatpur-Mahua section in Rajasthan, for which toll collection started from May. . National Highways Authority of India has recommended starting toll collection for the company’s second BOT project between Karur and Dindigul.
Meanwhile, Madhucon, which is establishing a 540 MW thermal power project in Krishnapatnam, proposes to increase the capacity to 1920 MW.

Property cards to regulate realty

rajani — Mon, 05 Oct 2009 12:10:11 +0000

Property cards are the new concept to regulate realty sector in Karnataka. When the Karnataka Land Grabbers Act comes into force, it’ll bring in clearness by cleaning up land records. These had always been messed with, resulting in dubious property transactions and disputes. These cards, to be issued to property owners, will serve as authentic documents.

According to Revenue department registration of sale deeds would be replaced with registration of titles. This will be done by introducing the progressive system of property titles. The newly formed task force for eviction of encroachers on government land is also part of it.

During talks with stakeholders on irregularities in account transfer and building construction, it was felt there is no reliable system of land and property title records in Bangalore Urban. Records of rights are written casually, leading to endless disputes. The present system of registration of documents can be misused easily.

Indian Hotel Industry Plans to Add 55 thousand Rooms in 4 years

rajani — Sat, 03 Oct 2009 12:00:57 +0000

The Indian hotel industry will almost double the number of rooms from the current levels in 3-4 years by adding an estimated fifty-five thousand rooms, as per a study by consulting firm HVS India. The development of new rooms is going to be led by regional real estate players and hospitality firms as most large real estate developers have abandoned or scaled down their expansion plans. The study revealed that fewer new rooms were announced last year but developers started work on a higher proportion compared to 2007-08.
Of the 94,115 rooms announced by various hotels and real estate developers for the year ended March 2009, 60% of the rooms saw some active development. Compared to this, in the previous financial year companies announced plans to build over 1.14 lakh rooms of which 58% saw actual development. “Despite the economic downturn, Indian hospitality will see the maximum development of rooms in the next 3-4 years. The rate of development of rooms would be much higher, something that we have not seen in the past ten years,” said Manav Thadani managing director at HVS India.
He added that even as big real estate developers have shrunk their hotel plans, regional real estate developers as well as Indian hotel companies are continuing with their own expansion plans. Mumbai, Delhi NCR, Bangalore, Hyderabad and Pune were among the top five cities in terms of active development of new projects announced last year. With revival in corporate activity, business travel is expected to bounce back sooner compared to the leisure travel market which is one reason why hotel construction is being pursued aggressively in Mumbai, believe hotel consultants.
On the other hand the five year tax holiday granted by government for hospitality projects in Delhi and NCR region to increase supply of rooms for the forthcoming Commonwealth Games is driving hotel construction in this region. But the HVS report points out that only 5,700 rooms of the 8,776 rooms being actively built are expected to open for the games next year.
Raymond Bickson, managing director of the IHCL, who is also the chairman of World Travel and Tourism Council, India Initiative (WTTCII) said that the Indian hospitality sector will witness improvement in the future. “Thanks to the huge domestic market, the Indian hospitality sector is expected to continue to grow even as other markets like US and UK are witnessing a de-growth,” he said.
Vivek Nair vice chairman and MD of luxury hotel operator Leela Hotels and Resorts, said, “Occupancies in Gurgaon and Bangalore have already witnessed an improvement and I believe the winter season would result in better times for the industry.” Mr Nair added that the recent RBI notification which has de-linked hotels from the “high risk category” of real estate business will provide hospitality firms with easy access to funds for hotel development.

Property deals to be scanned by FIU

rajani — Sat, 03 Oct 2009 12:00:42 +0000

Financial Intelligence Unit wants to cross check every real estate deal. It has asked the states to submit monthly data on registration of properties. FIU is a central agency responsible for receiving, processing and analyzing information relating to suspect financial transactions.

Often the real estate deals in the country involve unaccounted cash transactions. This may result into illegal fund transaction.

At present, all property registrars have to send data to income tax authorities on property transactions above thirty lakh rupees as part of the Annual Information Return. The FIU demands data for all property transactions.

The complete data is required for the agency also for co-coordinating efforts of international intelligence in checking money laundering and related crimes. If timely data are available, any intelligence generated by it could be acted upon promptly.

Hind Construction ties up with AMEC

rajani — Thu, 01 Oct 2009 08:13:13 +0000

Hindustan Construction Company announced a tie-up for its nuclear business with Britain-based firm AMEC.
The two companies would provide consulting and EPC services for the establishment of nuclear power plants in India.
The tie-up will also enable HCC to execute services in the field of mechanical and electrical components of nuclear power plants by sourcing the latest global technologies through AMEC.
The Chairman and Managing Director of HCC, Mr Ajit Gulabchand, said he expects Hindustan Construction to win 30-50% of the contracts to build nuclear power plants in India.
Mr Gulabchand said he expects revenues in the range of Rs 2000 crore to Rs 6,000 crore after all nuclear agreements are finalized by India.
HCC’s announcement comes a day after competitor Larsen & Toubro announced plans for its nuclear business. It had tied up with four of the five certified nuclear technology vendors.
Mr Gulabchand said, “We are preparing to become turnkey implementers of nuclear power plant. There will be competition from L&T, but the amount of power that needs to be generated in India through nuclear energy provides enough space for more players.”

Indian real estate sector needs regularization

rajani — Tue, 29 Sep 2009 10:20:57 +0000

The stock market has SEBI to provide guidelines, define conduct and processes, provide a redressal system for both buyers and sellers and install necessary consistency and standardization. The proposed real estate regulatory body intends to do the same for the Indian property market, which currently presents a rather under-organized picture, Ashutosh Limaye, Associate Director – Strategic Consulting, Jones Lang LaSalle Meghraj said. Further he added, The Indian real estate sector needs regularization, especially in the light of the multitude of local ways of doing business.
He also said, “The body will require builders to provide actual and verifiable figures for area their projects occupy, legal status of the land involved, chargeable built-up spaces, etc. Moreover, it intends to provide a badly-needed redressal system for property buyers. If this authority performs the intended functions efficiently, it can do much to induce confidence in foreign real estate players intending to invest in India and generally eliminate elements that come on the heels of an immature system. Such a body is required to bring about a happy medium between the ways in which real estate business sis done abroad and the way it is done in India. It can give Indian real estate more international credibility and boost investor and actual end user confidence levels.”
Currently, only listed real estate companies are accountable for the ways in which they conduct their business. This is not true for smaller players, and such an agency would make unlisted companies equally accountable. It is definitely possible that a certain number of developers would perceive such regulation as a loss of freedom. In the developer world, there is a huge spectrum of types and scales. At the base of the pyramid are local developers with small scale operations who will need time to get used to the implied processes and systems, which they may not see themselves as equipped for. Such developers would expect to be given a reasonable period to fall in line, which is fair. The regulatory body would be expected to not only provide restrictions and responsibilities, but also to clearly define developers’ rights.
Limaye added, The market needed the wake-up call that the recent slowdown dynamics provided. Developers have now become more introspective and retrospective about certain errors of judgment and ways to do business. While such a body would certainly have been welcome earlier, there is probably no better time than now for it to be put in place. Developers are now in a better position to realize that in the long run, far from being given the short end of the stick, they will benefit equally by increased transparency. One must remember that this regulatory body would ensure the welfare of the industry, which comprises of both developers and buyers.

Indian developers set sights on Sri Lanka

rajani — Tue, 29 Sep 2009 07:42:01 +0000

Sri Lanka is taking small steps to revitalize its shabby forty billion dollar economy. Delegates from the Sri Lanka board of investment met officers from real estate giants for investments and have liberal rules governing businesses.

It aims to spend twenty million dollar in encouraging the nation for global tourists.

Ravi Puravankara, MD-Puravankara group, said, “With the civil war over, we are seeing a huge demand for housing”. The group is planning to launch a villa project in Colombo. Further he added, “We have already initiated the land acquisition process”.

The Sri Lankan government is aiming an FDI of two billion dollars by next year. According to government statistics, Sri Lanka received $889 million in FDI during last year and four hundred million dollars, so far, this year. The Board of Investment refused to comment on how much it expects the Indian real estate developers to invest.

Demand for 2-3BHK flats on the rise in Ajmer

rajani — Mon, 28 Sep 2009 11:04:49 +0000

The real estate market is slowly picking up in Ajmer. Investors as well as end users have started exploring options. Being a prominent centre of religious tourism, there is no dearth of investors from abroad.
Property consultants have started getting queries from NRIs visiting ajmer. Blue Earth Consultant MD Surendra Rajpurohit said, “Most of them want a 2-3 bedroom flat in the city so that whenever they come to pay homage at the dargah they can live comfortably. In the past few weeks, there has been some positive movement in realty space”.
With time, there has been a paradigm shift in preferences. Earlier there was a demand for independent houses. Now people are asking for apartments and society flats. Mr Rajpurohit says, “People now prefer community living as it offers convenience, safety and common facilities. People, specially retired and nuclear families, are looking for flats”.
But the apartment culture is yet to take off. Not many real estate players are in the ring. Ansal Properties and Infrastructure is among the frontrunner, and is coming up with a hundred acre township Sushant City on NH-8. It will house a commercial mall — Ansal Plaza, a three-screen multiplex, 4 different sizes of 790 residential plots, 1200 independent houses and 225 flats.
Amit Bhardwaj of SM Real Estate said, “Flats are available in the range of Rs 7-15 lakh while an independent house can cost you Rs 7 lakh to Rs 60 lakh, depending on the size and construction”.

Loans set to get costlier

rajani — Mon, 28 Sep 2009 08:32:58 +0000

The Reserve Bank of India may step up its efforts to pre-empt another bubble in the local property market by increasing the cost of funds for the commercial real estate sector by up to 200 basis points.
According to an RBI official, “We are looking at a hike in the risk weight to the commercial real estate segment to 125% as a measure to ward off another bubble in the real estate segment and to ensure high credit quality”.
These days interest rates on most of the loans are between 7.5% and 12.5%, depending on the credit rating of the borrowing company. The current move will make loans to this segment costlier by 75-200 basis points.
Bank finance for land development is classified as CRE if the source of repayment would be lease rentals. The segment has started showing signs of revival after an earlier-than-expected recovery of the country’s economy from a demand slump.
The measure could affect the financial health of some of the largest real estate firms of the country, which were forced to sell land banks and projects to meet their cash requirements. A similar move by the RBI in 2007 had resulted in a crash in property prices. Though the central bank was criticised for the measure, the global financial crisis in 2008 proved that it was a step in the right direction.
Till mid-November last year, the risk weight to loans secured by commercial real estate was 150%, which was brought down to 100% by the banking regulator to facilitate credit flow to the sector that was reeling under a demand slump.
High exposure of some banks in the segment may have prompted RBI to consider such a measure, said the chairman of a government-run bank. “A major chunk of the non-food credit off-take in the recent months went to the real estate segment,” he said, requesting anonymity. However, an increase in risk weight by 25% points will have only limited impact, he added.

Awarded for house design

rajani — Sat, 26 Sep 2009 09:43:26 +0000

The award instituted by the Kerala State Nirmithi Kendra for designing a house costing under one lakh rupees has gone to Mr Jonu John Thomas, an architecture student at the National Institute of Technology, Calicut. About 20 designs had come up for consideration at the competition that required participants to prepare innovative blueprints keeping in mind the cost, area, the time needed for construction and energy consumption. Announcing the award, the Minister for Housing, Mr Benoy Viswom, said the winner would take home Rs 50,000.

Mumbai expects highest residential space demand

rajani — Sat, 26 Sep 2009 08:24:36 +0000

Mumbai is expected to see the highest demand for residential space of approximately 16.40 lakh units due to the large scale urbanization. The mid-scale and affordable housing in suburban and peripheral areas will be the focus of this demand. However, the demand for office space would be approximately 23.7 million square feet, which is lower than that in Bangalore, Chennai and NCR.

The demand for hospitality in Mumbai is expected to be strong at over 98,500 room-nights, by virtue of the fact that the city is regarded as the financial capital of India and therefore the volume of both domestic and foreign business travelers is expected to grow steadily. Demand for retail is expected to be 6.19 million square feet.
On the other hand, Pune is expected to see the highest compounded annual growth in retail demand at 51% due to the current favorable demographics. The total expected demand for retail in Pune is approximately 1.76 million square feet. Office demand in Pune is expected to be 21.7 million square feet.

Bangalore emerges as a clear preference for sectors like office and retail, while it comes a close third in the residential and hospitality segments . Bangalore is expected to see the highest demand for office space in 2009-2013 of approximately 34 million square feet.

Real estate sector to witness a prolonged & robust demand

rajani — Sat, 26 Sep 2009 07:11:40 +0000

Real estate sector in the country will witness a prolonged and robust demand. According to a report by global realty consultation firm Cushman & Wakefield, the pan-India residential demand for 2009-2013 could be around 7.5 million units and that for office space at 196 million square feet.

The Cushman & Wakefield India Real Estate Investment report 2009 Survival to Revival Indian realty sector on the path to recovery estimates demand for retail space at around 43 million sq ft while the hospitality sector is expected to see a demand of approximately 6,90,000 room-nights in the same period.

According to Anurag Mathur, MD of C&W, India, “Though the highgrowth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector gradually return to the path of recovery and witness robust demand for real estate across sectors”.

2BHK is in trend

rajani — Fri, 25 Sep 2009 07:31:22 +0000

The maximum demand currently is for 2BHK residential apartments and finally supply is following demand. Such has been the response that there are developers who claim as much as 55% of their inventories comprise two bedroom units.

According to Atma Sharan, GM-Marketing, Ashiana Housing Ltd, “About 55-60% inventory would be 2BHK. This definitely is the fastest moving segment, particularly among first home buyers.

The 2BHK end user is attracted by the price tag, affordability factor, and lower EMIs. Developers who were primarily focusing on plush housing earlier are including smaller units in a big way in their projects. They are coming up with new initiatives in this line which is expected to attract the young service class people in a big way. So, be it DLF, Unitech or Jaypee, they all have at least 30% inventories as two bedroom units in their projects and plan to increase the percentage with time.

Retail investors turn careful on IPOs

rajani — Fri, 25 Sep 2009 07:30:29 +0000

Though the 10 IPOs in the fiscal have mopped up close to Rs 10,000 crore, the attitude of retail investors to the offerings has been one of extreme caution.

While participation by institutional and high net worth investors has been positive, retail interest has waned, said merchant bankers.

The 10 IPOs that hit the market this fiscal have seen their retail portion getting subscribed less than four times on an average.

The IPOs may be getting subscribed multiple times. But the fact that several investment recommendations stated that the IPOs were overvalued put retail investors off.

Mr Adeel, a retail investor, said: “A small-time retail investor will look at investment recommendations and most of the IPOs are said to be overvalued. This will keep us away from those IPOs.”

PDL looking torward tier-II cities

rajani — Thu, 24 Sep 2009 11:58:05 +0000

Parsvnath Developers Limited is looking toward tier-II cities and following the strategy, PDL announced Parsvnath City at Saharanpur. It will offer plotted development, independent Floors and expandable villas at affordable prices. Spread over more than hundred acres, Parsvnath City, Saharanpur is strategically located on Delhi road. First of its kind project will offer independent floors in affordable range starting from Rs 9.50 lakh. The project will comprise of plots in various sizes of 201, 300, 402 and 502 square yards. The independent floors will have the options of 2 bedroom, 3 bedroom and 3 bedroom with study room units and option of expandable villas are also available.
Parsvnath City will have fully fledged infrastructure wide well lit metaled roads and solid waste management. The township will also have Group Housing, School, Community Center and Mall. The realization from the project will be about three hundred fifty crore rupees spread over 2 years. The development of the township is planned to be completed in 2 years.