Category: Property Investing

Walmart Pauses India-Entry; Upset By States’ Veto Power

Concerned over the States’ veto power in matters related to foreign investors’ entry into their states, global retail major Walmart has remained hesitant to enter India.

Walmart and along with the US government officials have met Mr. Anand Sharma, Commerce & industry minister for India. The foreign retail major has conveyed its anxiety over the veto power of the states. Read More »

English Cricketers Plan To Invest In Indian Properties

Sources close to the England Cricket Team revealed that some of the English Cricketers plan to invest in Indian properties. According to the sources they have shortlisted the cities as well.

Some top English Cricketers have conveyed their plans to invest in Indian properties. They have shortlisted the top cities like Bangalore and Mumbai as their favorite investment destinations. However some of them have plans to develop holiday homes in Goa, especially in South Goa. Read More »

Foreign Investment Will Be More In India: JLL Predicts

Leading global real estate consultancy firm Jones Lang LaSalle predicts that India will have vast foreign investment. According to the global consultancy foreign investors are looking for a chance to enter Indian realty market.

Indian realty market will have vast foreign investment, as big as $4-5 billion, predicts global real estate consultancy firm Jones Lang LaSalle. This year many foreign investors will invest heavily in Indian realty market. They will invest specially in top cities like Bangalore, Delhi and Mumbai. Read More »

Spice Global To Try Luck In Hospital & Realty Sectors

After developing an image in the Indian mobile business, Spice Global plans to try its luck in the realty and hospital sectors as well. To begin with, Spice Global will develop a multi-specialty hospital in Saket as their first venture.

Realty and hospital sectors are the most booming sectors in India. Seeing this booming nature, Spice Global has decided to enter into these sectors and give a try on its luck in these sectors.

Spice Global, led by Mr. Bhupendra Kumar Modi, will develop a super specialty hospital at Saket in New Delhi. The 1000- bedded super specialty hospital, Saket City Hospital, is expected to be completed by 2014. Read More »

Focusing Delhi Real Estate, DLF Sells Aman Hotel Shares

India’s largest real estate firm DLF plans to develop some Delhi real estate properties. The real estate major has sold its Aman Hotel stakes with this purpose.

Delhi real estate

Delhi real estate will receive some fresh DLF launches.

DLF has sold its Aman Hotel stakes with double purpose. Firstly with the amount the firm will be able to cut off its debt and secondly the firm will be able to begin developing some Delhi real estate projects as well.

Delhi real estate is expected to have some fresh DLF launches within a span of three to four months’ time. This was further firmed when DLF’s Sr. Executive Director Sriram Khattar informed that the firm will begin its Delhi real estate projects sooner. Read More »

Chinese Real Estate Firm Wanda Ties Up With Reliance

With the tie up with the Reliance India Chinese Real Estate Firm Dalian Wanda Group enters the real estate market of India.

Anil Ambani’s Reliance Group has tied up with Dalian Wanda Group. Both the Indian and the Chinese firms will jointly work for two residential projects. One of their real estate projects will be in Mumbai and the other will be in Hyderabad.

Dalian Wanda Group is the largest real estate firm in China. This is the first time a Chinese real estate firm enters the land of India. The land parcels will be provided by Anil Ambani’s Reliance Group. The Chinese Real Estate Firm will have to build up the projects.

The Chinese real estate firm will be constructing and developing the land parcels owned by Reliance India. Their debut joint real estate venture will be in Navi Mumbai. The project will be constructed in the land parcels of Reliance India.

Reliance India has land parcels in both Navi Mumbai and Hyderabad. The groups will be delivering integrated township projects.

They will have their debut project in Dhirubhai Ambani Knowledge City (DAKC) which is located in Navi Mumbai’s Koperkhairane area. It spreads across to over 135 acres. As their primary venture they will develop nearly 10 million sq. ft. space at DAKC owned by Anil Ambani’s Reliance Group.

Property prices of DAKC have received a double fold increase since 2002, the year in which it became operational. However both of the firms did not reveal any financial details of the deal. Some sources predict that the projects will fall in a range between Rs.6000 Cr to Rs.7500 Cr.

This will be the estimated cost for their both projects at Hyderabad and Navi Mumbai. Many real estate experts are of the opinion that India should invite more real estate investment from China. China is the second-largest economy which has enormous surplus to invest.

Ambani’s Reliance MediaWorks is expected to co-operate with the Chinese real estate firm. These two will collaborate in expanding their multiplex business to USA, besides having in India. Wanda Group is the biggest movie theatre owner. The Wanda Group owns US multiplex operator AMC Entertainment. The US multiplex operator AMC Entertainment was bought at a price of $2.6 billion. Somehow this monetizing of real estate land by the reliance is on the other hand is seen as its attempt to pay off its debt.

Our Real Estate Investors Are Refunded, Sahara States

Sahara firms stated that they have already repaid their Real estate investors.

Sahara groups’ Chairman Subrata Roy stated that the group’s real estate wings have finished refunding. The advertisement was published in one of the leading newspapers.

Sahara advertisement, appeared on December- 9, stated that both Sahara India Real Estate Ltd and Sahara Housing Investment Ltd have given the prescribed amount to SEBI. The advertisement further claimed that the real estate firms have deposited an additional Rs.2500 Cr as well. This additional amount was deposited in view of avoiding all sorts of future embarrassment.

Interestingly the Supreme Court granted Sahara firms more time to refund. As per the latest SC Order the Sahara firms are to pay the amount in three installments. They are given 3 months’ time to refund. The SC order binds Sahara firms to repay the whole amount in installments. They are ordered to finish repayment by February first week.

At the same time a colorful advertisement by the Sahara India Pariwar limited the firms’ liability to Rs.2620 Cr. Some top newspapers printed the advertisement. According to the given advertisement the groups have already cashed majority of OFCDs (Optionally Fully Convertible Debentures). And the remaining debt or liability of the firm is mere Rs.2620 Cr, an amount slightly above 10 % of the tangible fine of Rs.24000 Cr.

Supreme Court had found that many of the OFCD investors were false and dubious. Sahara firms are alleged of gathering investment from nearly three crore investors. These investors are formed from PAN India presence.

Sahara India Pariwar published its provisional financial statement on December 3. This statement showed that the OFCD- repayments were begun in 2008-09. Sahara firms argued through this statement that the firms have nearly cleared off its liability amounting Rs.33,000 Cr. The statement added that a sum of Rs.5120 Cr would be well enough to clear the remaining liability caused by OFCD.

UAE NRIs Show Special Favor To Real Estate Investment

Declining Indian rupees attracts more NRIs to invest in their mother land, India. Sources prove that a majority of NRIs invest on real estate properties. As per Sumansa Exhibitions’ survey nearly 89% of the UAE NRIs maintain real estate investments in India.

Non-Resident Indians (NRIs) play a negotiable role in the growth of Indian Economy. Recent studies prove that real estate properties have overtaken the other investment options like Gold and bank deposits. Read More »

An Elusive Dream

Affordable housing continues to be an elusive dream, in terms of supply and implementation of affordable housing schemes. National Urban Housing and Habitat Policy (NUHHP) defines affordable house as, dwelling unit having super built-up area not less than 300 square feet for Economically Weaker Sections, 500 square feet for Lower Income Group and between 600 -1,200 square feet for Middle Income Group available to the end user at a price that permits home loans in monthly installments, not exceeding 30%-40% of a person’s monthly income.

The biggest impediment to construction of affordable housing projects is the non-availability of land. It is almost impossible to find land at appropriate locations at affordable prices, which accounts for more than 40% of the cost of the project. Confederation of Real Estate Developers Association of India (CREDAI) points out, that well-connected, accessible land with title and infrastructure needs to be provided on a regular basis, only then can developers provide affordable housing.

Land availability is a bigger problem, in Tier I cities. 23% of India’s urban population resides in 8 cities. If the housing shortage (of 26.53 million housing units) is to be addressed effectively, at least 3 million housing units must be added to the cities, every year. Instead, only 0.3 million housing units are being added in the existing cities. Urban land expansion is, therefore, the need of the hour. Most developers however continue to cater to the niche market that serves about 5-10% of the population.

Promoters are averse to handling more number of clients; in an affordable housing project, for instance, it’s a volume game. You need to provide a large number of housing units, as opposed to a luxury project where you deal with very few clients and big spaces.
Coupled with this is the problem of financing affordable homes. To offset this problem and deliver financial assistance to the poor so as to enable them to purchase their own homes, the central Government has instituted the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) scheme across the country.
Harsh Roongta, CEO,, an online portal specializing in price comparison of loans, insurances and investment options, believes that the affordable housing industry has led to the growth of a microfinance industry as well, that funds people who may not have the means to buy a house otherwise.
Groups like Mahindra, MAS, Micro Housing Finance Corporation Ltd offer loans at 12-14% interest rates to those who do not have proofs of salary documentations. Tax concessions and a micro level road map for affordable housing will help plan such projects. A public- private partnership (PPP) is a solution too.

To facilitate affordable housing, the government has announced a few incentives and subsidies to developers who cater to the lower income segment, announcing a Transfer of Development Rights (TDR) of 30 sq m of floor area per slum dweller to the private builder who provides housing for the slum dwellers and the Development Regulations (DR) have been amended suitably. Also, additional FSI concessions of 50% over and above the normally permissible FSI for those who construct dwelling units of size 30 sq m and below are given. For those who construct dwelling units of size 50 sq m and below, an additional FSI concession of 30 % over and above the normally permissible FSI is given.
These policies and incentives will go a long way in promoting affordable housing. However, unless the bigger issues of land availability, planning and pricing are addressed, the market will not be able to serve the needs of those who really need an affordable house.

Realty on a High

With post-recession era dawning, realty sector in India is touching new heights. The growth also depends on the policies by the government to facilitate investments in economy. In recent times the FDI policies adopted by Indian government have encouraged an increasing number of NRIs/foreigners to invest in Indian properties.

India has replaced US as the 2nd most favored destination for foreign direct investment in the world and making India amongst the “dominant host countries” for foreign direct investment in Asia and the Pacific (APAC).

The outlook of Indian government is the main factor behind the sudden rise in the realty sector; it is the 2nd largest employer after agriculture in India. The real estate sector in India is experiencing growth in all its areas, be it residential or commercial in the tier I & II cities.

Flying high on the wings of real estate, property in India is a dream for every potential investor looking for profits. India is an ever growing economy, on a continuous rise, which has created increased purchasing power and demand for realty sector.

With as many as an estimated 2 million students graduating from various Indian universities and presence of large number of Fortune 500 and other reputed companies demand of office and industrial space has also increased.

Relaxed FDI rules in India have attracted more foreign investors and allowed NRIs to own property with minimum size for housing estates built with foreign capital reduced to 25 acres. With these changes in investment policies, the overseas firms can now put up commercial buildings as long as the projects surpass 538,200 sq ft of floor space. Real estate investments in India yield huge dividends. 70% of foreign investors in India make profits and another 12% break even. These attributes of Indian economy is definitely going to attract more foreign investors in the near future.

PE funding in Real Estate on a surge

With the loan scam unveiled and access to bank lending being tough, real estate funds and private equity (PE) firms now sense a business opportunity. Hoping that the loan scam will put more transactions on the table, they are actively working for the deal bargains. Bank funding and capital markets are the primary sources of capital in the realty sector and with these slowing down; it is inevitable to use PE for funding with more deals likely to come in their way.

Red Fort Capital, a real estate PE fund says that it plans to be more aggressive and step up investment activities in India, as more developers are looking on private equity for funding their future projects. Fire Capital, another realty fund is planning to deploy nearly $100 million into the real estate market.

The scam-triggered scrutiny of loan disbursements would allow PE players to drive a harder bargain. But despite the bargaining power, it would be safe not to push for terms that are unsustainable and not to do too many deals where execution can then become a challenge. While it is anticipated that any liquidity pressure in the market will provide more opportunities for PE, it may be just too early to decide on how much of it will materialize into actual funding.

DDA housing scheme lures

After 2 long years Delhi development authority has launched its very own housing scheme from 25 November 2010 to 24 December 2010 giving out approximately 16000 flats in Delhi. DDA allotted about 5000 flats in the year 2008 with maximum price of 77 lakhs, this year the number of flats has gone up to 16000 with the highest price of 1.12 crores.

Some of the houses are furnished and ready to move in as soon as one gets the possession letter.  These flats available are with 1-3 bedrooms and expendable categories and located in Vasant Kunj, Motia Khan, Mukherjee Nagar, Jasola, Dwarka, Rohini, Narela etc. Prices of these flats range from as low as 3 lakhs to as high as 1.12 crores. The cost of these new flats includes maintenance charges of the exteriors and the common areas. About 2700 flats are located in Vasant Kunj priced between 34 lakhs to 1.12 crores.

In June this year the Noida Authority had also come up with a similar scheme of allotting 371 duplex houses ranging from 80.53 lakhs to 1.11 crores.

Although there are no income criteria and the payment has to be made from the allottee’s account with a bank statement to be submitted at the time of possession, many experts believe that this is certainly not a mass housing scheme as the prices are comparable to real estate market with nominal discounts of 20-30% to that of market prices.

According to real estate experts, DDA is trying to reduce spectacular interest; hence the investor’s interest will be less without much difference in prices. The consumers this time will be those who can afford such prices. There is surety of large end-user demand as more professionals are ready for all-white deals. This scheme offers a very good real estate option for the masses and classes because of its “ready to move” in feature and a residence in Delhi as an added attraction.

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

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.

Mumbai expects highest residential space demand

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.

Retail investors turn careful on IPOs

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.”

Weaving character into homes

Bringing character to a home is the latest mantra, at least in the luxury format.
Designer Mr Sabyasachi Mukherjee will work on six of the two hundred limited edition homes Samira Habitats is developing at Alibagh. These would cost upwards of one crore rupees each.
The designer will work closely with the project architect to ensure structural compliance of the masonry, while filling in with his craft and elements.
The purpose is to lend individuality and embed creativity that the designer exhibits in his apparel on the ground.
Further he said, “When I decided to extend my love for visual aesthetics, form and color to interiors, I chose Samira Habitats because of their offerings of finely crafted homes close to nature. Their eye for opulence and detail is a vision I passionately share”.

Real estate firm sees festival sales

Photo by paul goyette
Property firms are launching housing projects and raising pitch for ongoing ones in the hope of making decent sales going into the festive season. The mood among builders may be buoyant, but very few believe price hike is possible as demand is still hesitant and new supplies are hitting the market.

The festive season, which usually begins late September with the Hindu festival of Navratra and continues up to Christmas, often sees higher sales of property, cars and other durables.

Lodha developers is planning to launch two new projects, comprising apartments priced over Rs 1 crore, in Mumbai’s suburbs of Andheri and Thane. So far, the slow return of housing demand was scripted by lower-priced homes. But Lodha’s offerings indicate the builder is confident of getting buyers for high-priced segment as well.

Dax Properties setting up golf township

Dax Properties is setting up a 18-hole golf course-centric luxury retreat and township at Shadnagar near here which will entail investment of five hundred crore rupees.
The golf course will be spread over 130 acres on a 300-acre site earmarked for the Golf Retreat project, according to Mr Masood, MD of the Bangalore-based Dax Properties, part of Countryside Realtors.
Further he said, “We believe India has potential to serve golf lovers offering golf tourism in a majestic lush green environment where one could also buy luxury villas being developed on the property”.

Best time for a deal in real estate

It is the best time to look around for a value buy in real estate. With lower price points in locations which were not within your wallet’s reach, buyers are scouting for good ‘value’ bargains at this time.
And with developers going big on affordable home launches, the timing may just be one of the best for buyers seeking a steal deal.
Anshuman Magazine, CMD of global real estate consultancy CBRE says that value buying is happening mostly in suburban locations as that is where the current supply is.

Rush is back

Real estate
We often read that recovery in realty market is visible now. Such news has reached to general people and they have started looking at property of their choice at affordable rates. Competition between builders results into rate cuts and attractive offers for buyers. It can be easily figured out by taking a look on the increment in property registration in major cities. With the improvement in macro-economic conditions and affordability of buyers, developers witnessed a stronger response to new launches across cities over the past quarter.

Can Affordable house become your dream house

Affodable House in SLO
When we think about affordable house, a picture of congested home, situated far away from the city, comes in mind. Such images are pulling the buyers away from investing money. Builders are forced to think about cost cutting without compromising buyers expectations.
Puravankara is using cost effective construction techniques like prefabricated homes. Basically, your home would be built out of a mould and then fixed on to the mainframe structure of the building. This technology could bring construction cost down by up to 30% and speed up the delivery time by up to 24 months as compared to conventional construction techniques.
Affordable housing is all about reengineering of design and optimal usage of materials, which can bring costs down by 15% to 17%. If builders use such techniques to cut the cost then affordable house will also known as Dream house. Affordable housing is not about compromising on quality and comforts.

Gurgaon lose its position of the biggest real estate rental

Gurgaon used to be the preferred place for office rental. During the last couple of months, office rental increased tremendously. This led many companies to think about moving their offices to other cities. Even the lock-in period has failed to stop the companies to shift. Companies are also getting fully furnished offices at almost half the rates compared to what they were paying. Due to such trend, the demand for furnished office space is on the rise in Delhi as well as in all the major towns of the country. Companies prefer to start their office in furnished offices rather than starting them in bare commercial place.

Upward move in commercial realty

Real estate
The commercial real estate market is slowly reviving as higher government incomes and an improving economy are prompting customers to invest. Developers say that there are more enquiries from investors.

Many developers, instead of selling their properties, are signing rental deals. In one recent deal, global consultant KPMG signed a deal with Lodha Developers for renting out a 130,000 square feet property at Mahalaxmi in central Mumbai, for a monthly rental of Rs 160 per square feet.

The company has 5commercial projects in Mumbai, in areas such as Parel, Worli and Thane. Recently, Lodha also bid Rs 710 crore for NTC’s 10.3-acre Finlay Mill land in central Mumbai.

Similarly, in a recent transaction in the commercial property space, investor C Sivasankaran acquired a 66% stake in a commercial property SPV from DLF for Rs 310 crore. Akruti City is the other investor in the SPV.

Realty Bites Tech Hubs in Bangalore, Chennai

The stock of unoccupied properties with real estate developers in the main technology hubs of Bangalore and Chennai is mounting and indications are that their problems will only get worse as software companies head towards greener pastures.

Read More »

Parsvnath sells 30 % stake of Mumbai project

MUMBAI – Real estate firm Parsvnath Developers Ltd has sold thirty percent stake in a Mumbai project to foreign funds for 1.86 billion rupees, the company said in an announcement on Thursday.
Shares in the company hit a high of 217.65 rupees on the news, and were trading 4.57 % higher at 216.30 rupees.
Parsvnath will sell 15 % stake each in the Kurla bus station redevelopment project to Euronext-listed Yatra Capital and Saffron India Real Estate Fund-I, both sponsored by Mauritius-based fund manager Saffron Asset Advisors.
Parsvnath said that Yatra and Saffron have picked up the stake at land-value basis. They will also proportionately fund all future development and construction activities for the project.
Future investment is estimated at two billion rupees and the project is to be completed in two and half years.
The deal will help unlock value of the property and help to begin a strong relationship with well-known foreign direct investment partners, Parsvnath said.
Jones Lang LaSalle Meghraj was the consultant for the deal. Foreign investors have rushed to invest in India’s growing real estate market for the last few years, attracted by simpler investment rules and rising property prices, which have gone up for the fifth straight year.