Category Archives: Property News

Demand Slow Down Strikes Office Space Market

August 7, 2008 – 7:42 am

With companies, particularly in the IT and BPO industry, holding back their expansion plans due to slowdown fears, the commercial real estate market posted a lackluster show in the 2nd quarter of 2008.
The June quarter saw office space demand lagging far behind the supply levels of 18.07 million sq. ft. across major cities, as companies turned cautious.
According to Cushman & Wakefield, the demand in the quarter was at 9.74 million sq ft, dominated by absorption (where companies move-in or begin fit-outs) of 6.36 million sq ft, and only 3.38 million sq ft in fresh pre-commitments. “There are certain micro-markets like Noida (NCR), and Rajiv Gandhi Salai (Chennai), which recorded excess supply for this quarter thus increasing the overall vacancy rates,” it said.

The 2nd quarter witnessed stable rental values across micro-markets in the major cities with some central business district (CBD) and off-CBD locations witnessing rental hikes of 3-5 % over the previous quarter. Some peripheral locations in NCR (National Capital Region) and Chennai, however, saw a correction in rentals largely because of excessive supply as well as deferred development plans of various proposed projects.

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Delhi Slums Propose Huge Business To Realtors

August 7, 2008 – 1:23 am

Delhi Development Authority (DDA) is firming up an elaborate plan for slum redevelopment projects in the capital. It has appointed consultants to prepare reports on the redevelopment of 30 slum clusters.
The developer is expected to build houses for the slum dwellers and in return gets a portion of the total space for development which it can sell at market rates. The developer gets higher floor area ratio (FAR), i.e., permission to build more floor area on a piece of land in a slum redevelopment project, and thus books higher margins in these projects.
DDA vice chairman Ashok Kumar said, “We will invite private developers to take up slum redevelopment projects once we receive the consultants’ report. A lot will depend on the viability of the projects. In cases where a cluster is not viable on its own, we may consider clubbing two or three clusters”. DDA has appointed a handful of consultants for different slum clusters and expects them to submit reports in a month or two.
Delhi has around 900 slum clusters housing almost a fifth of its population. The initiative to redevelop 30 clusters is a major task for the government and urban development agencies. This is the first time the Delhi government is going to involve private developers in these projects. Several real estate firms, including India’s largest real estate developer DLF, Omaxe and Raheja Developers, have shown interest in slum redevelopment projects and are waiting for the government’s nod.
The slum redevelopment projects in the capital will be on the lines of similar projects being undertaken in Mumbai’s Dharavi or other slum areas. Many realty firms, including HDIL, Akruti and Orbit, have made fortune through slum redevelopment projects in Mumbai. Access to cheap and strategically located land is the biggest advantage in such projects, which gives developers a margin of as high as 80%, compared to 35-40% in other realty projects.
As against Mumbai where the slum clusters are spread out in size, in Delhi the size of the slums are small and are therefore relatively less attractive. Nevertheless, Delhi’s slum redevelopment projects too are likely to offer high margins and thus attract private developers’ interest.

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JP Morgan Will Put More Than $1Billion In Asian Market

August 6, 2008 – 5:50 am

JPMorgan, internationally well-known investment bank, considers putting in over one billion dollar in Asian property sector over the next 3 years, as Indian and Chinese real estate developers crave for more funds to finish their forthcoming projects. Property prices all across the globe, especially UAE, have been on ascendancy to the amusement of many potential investors.
JP Morgan’s Asia real estate head, Bryan Southergill said: “It’s a fantastic chance for us at a time when a no. of our competitors is scaling down due to difficulties accessing their balance sheet.”
Infact, Colliers International recently stated that real estate prices in Dubai rocketed 42 % in the space of three months, between the last quarter of 2007 and the first quarter of 2008.

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JPMorgan Plans To Invest One Billion Dollar

August 5, 2008 – 3:33 am

JPMorgan plans to invest more than $1 billion in Asian real estate over the next three years, hoping to fill a gap as Indian and Chinese developers crave funds and lenders and rival investors recoil from property markets.

The investment bank, which has fared better than some Wall Street rivals because of smaller exposure to subprime mortgage investments, is using its global special opportunities group to finance Asian property firms and their projects.

Bryan Southergill, group’s Asia real estate head, told “It’s a fantastic opportunity for us at a time when a lot of our competitors are scaling down because of difficulties accessing their balance sheet”.

Southergill said, “In the next three years we aim to invest north of a billion dollars in this part of the world, if market conditions allow”.

Further he said, “We’re cautious about equity, aggressive on mezzanine financing, and we’ll take our time during this period of market consolidation to build long-term relationships with companies we’re going to invest with”.

Many Chinese and Indian developers are struggling to complete ambitious projects because local banks have clamped down on lending to the construction industry and a stock market slump has closed off equity raising through initial public offerings.
Foreign investors are also shying away from markets where risks, as well as returns, are traditionally high. But because of a shortage of funds, developers are starting to offer plum deals.

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Ahmedabad Attracting NRI

August 4, 2008 – 1:14 am

When a London-based real estate marketing firm recently held India property road shows in the US and UK, they were zapped to find Ahmedabad rubbing shoulders with Goa and Mumbai when it came to attracting the highest number of non-resident Indian (NRI) queries.
At a time when the appetite for Indian realty is growing in the US and UK with NRIs now accounting for nearly 15-30 % sales as against 5-15 % three years ago, Ahmedabad is emerging as a hot spot, says Rajeev Goenka, chairman and CEO, Axiom Estates, which focuses only on marketing Indian realty to NRIs and has been conducting such shows for the past five years.
“Of the nearly 300 property developments from 20 Indian cities being showcased, just half a dozen Ahmedabad properties were on offer. Yet, they observed the maximum response,” explains Goenka, who is all charged up about opening a full-fledged Ahmedabad office to cater to the soaring NRI demand.
That’s possibly why nearly 80 city realtors are headed to the US next month as part of Gujarat Institute of Housing and Estate Developers (GIHED)’s first international property shows in New Jersey and Chicago. “After the US sub-prime crisis NRIs have become more bullish on India, where they see better future appreciation. And with realty still going cheap in Ahmedabad, it is now catching their fancy,” says GIHED vice-president Suresh Patel, explaining that mainly high-end properties like bungalows , luxury apartments and golfing realty would be pitched to NRIs.
Meanwhile Rajni Ajmera, president, Credai feels that NRIs are also sold on Ahmedabad because of the good quality of life and superior infrastructure it provides in terms of roads, power, healthcare and retail.

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Essar Arm Wins Nagpur Hotel Project

August 4, 2008 – 1:01 am

Essar Realty Holdings—the real estate arm of the Essar Group—has won the bid for building a Rs 500-crore five-star hotel, utility centre and a multiplex at the upcoming Multimodal International Hub Airport in Nagpur.

The realty firm has also formed a joint venture with the US-based hospitality group Accor Hospitality to develop and manage the hotel project.

A few months back, the Maharashtra Airport Development Company (MADC), the nodal agency for developing the air cargo hub in Nagpur, had invited bids for the hotel cum conventional hall project. Essar Realty bid for the project through its subsidiary company Yojna Realties. G L Raheja group promoted Raheja Constructions was the immediate bidder for the project.

Essar Realty’s managing director Chirag Ramakrishna said “The MADC deal would reinforce our long-term commitment to the realty business as we continue to look at more opportunities in the realty sector.”

The five-star hotel would be developed in a 10-acre area adjacent to the National Highway VII on the Nagpur-Wardha road. The hotel would have a capacity to house 1,000 people. It would also have a service apartment to cater to the needs of executives who stay on for long tenures. MADC’s project is the second largest property deal struck by Essar Realty during the past six months. Earlier, the firm had acquired Peninsula Land’s (PLL) Kurla commercial project for close to Rs 1,200 crore.

Peninsula Land sold approximately 9 lakh square feet of commercial space to Essar Realty Holdings at its upcoming Peninsula Tech Park project. The proposed Nagpur airport project with an investment of Rs 3,000 crore is to be completed in four years, adding a new dimension to India’s capability of handling air cargo.

India’s air cargo traffic has inched up from 7.97 lakh tonnes in 1999-2000 to 8.4 lakh tonnes in 2001-02 and over 10.6 lakh tonnes now. MADC has already signed an MoU with Deccan Cargo for running the cargo hub at the international airport in Nagpur.

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Twenty-three New SEZs Cleared

August 2, 2008 – 7:17 am

New Delhi:The Center cleared twenty-three new special economic zones (SEZs), including seventeen projects for setting up information technology and IT-enabled services (ITeS) zones, besides giving in-principal approval to six proposals.
The Board of Approval of the Special Economic Zones, headed by Union Commerce Secretary G. K. Pillai, considered a total of thirty-four SEZ proposals, including three proposals for conversion of in-principle approvals into formal approvals.
It cleared four IT and ITeS Special Economic Zones in Kerala that would be set up by the Kerala State Information Technology Infrastructure Ltd., while two IT, ITeS and electronic hardware SEZs of Godrej Real Estate Private Ltd. and S2tech.com Private Ltd. were approved in Andhra Pradesh.

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Home Loans Becomes More Costlier

August 2, 2008 – 7:16 am

With RBI hiking the repo rate, home loans under the floating rate regime have witnessed a hike of .75 %. Leading housing finance providers like HDFC and ICICI Bank have again raised the interest rates. Who spares a thought for the loanee?.

HOME LOANS have again become dearer, no thanks to the hike in interest rate (repo rate) effected by the Reserve Bank of India (RBI) when it released the first quarter review of its Annual Policy Statement, 2008-09. Just over a month ago, HDFC and ICICI Bank raised the interest rate on home loans. They have done it again in respect of housing loans provided under the floating rate regime.

HDFC, the country’s largest home loan provider has hiked the interest rate applicable to the home loans provided under the floating rate regime by .75%. Fortunately, on those who have availed of home loans under the fixed rate regime, no interest rate hike has been imposed. Earlier this month, the company hiked the interest payable by those belonging to the fixed rate regime to 14 %. Fortunately, these loanees have been spared a second dose of hike. The country’s second largest bank, the ICICI Bank which is also into housing finance, also announced a similar hike in interest rates on its home loans. The hiked rates will come into force from August, 2008.

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Maharashtra Real Estates

August 2, 2008 – 7:14 am

Maharashtra, also referred to as the ‘Power House of India’, is the industrial hub of India. Commanding the industrial development of the country, Maharashtra has already established a trend in the growth of real estate in India. Economic development has resulted in the rapid development of both residential and commercial property in Mumbai, Solapur, Pune and Nagpur. The demand for Maharashtra real estates is considerably high in Aurangabad and Nashik. Maharashtra Industrial Development Corporation has already come up with several industrial townships in different parts of Nagpur, Pune and Dhule.

As per ECA International report, Mumbai ranks seventh among the most expensive cities of the world. Owing to its perpetual hike in the property prices, the demand for real estate has gone up in Mumbai. Increased demand for residential property is one of the reasons for the hike in property cost. Growth of other business centers in India is another reason for such a rise in property prices. To meet the demands of the low-income group, Matheran Realty Pvt Ltd (MRPL) has declared a mega township project in Karjat.

Pune is also witnessing a on-going development in the real estate sector. The soaring land prices is the consequence of the great demand for land. The bonanza in Pune real estate market is promoted by government of India’s decision to grant 100% Foreign Direct Investment in the real estate sector.

The value of real estate is increasing day -by-day in Nagpur, Maharashtra. The real estate property brokers help their clients to evaluate the exact price of the property and sell it at a good rate. They also assist in finding out and purchasing suitable property with uncomplicated agreement terms. All these factors have led to more and more real estate investment.

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Wadhawan Holdings Private Ltd To Invest In Australia

August 1, 2008 – 5:55 am

With one billion people in their home market, it may seem a little surprising Indians would look abroad for investment opportunities.
But Mumbai’s Kapil Wadhawan is one such person, and says Australia is an attractive place to expand his business.
Mr Wadhawan is chairman of Wadhawan Holdings Private Ltd, a diversified company with interests in real estate, food, hospitality and dining operating in India and United Arab Emirates.
Mr Wadhawan, who was in Australia this week to work on a real estate project in Melbourne’s inner city, said there was merit in doing business internationally.
He said Australia and India had been long-term trading partners, and was encouraged by the willingness of those in Australia to engage further with India.
“There is a growing sense when we talk to the people here - the policymakers within Australia - that you would like to get more aligned with India,” Mr Wadhawan said.
“Trade has been growing between our two nations over the last couple of years right across different areas.”
Mr Wadhawan’s focus is on a potential site in Melbourne’s inner city, where he plans to build between 800 and 1000 apartments, a small retail precinct and hotel.
He described Melbourne as the “fashion capital” of Australia and a city with great potential, given the diverse population and large number of foreign students.
And he was unconcerned about recent indicators of a slumping Australian property market.
“The city centre lends itself to good development irrespective whether there is a lull in the demand,” Mr Wadhawan said.
Austrade senior trade commissioner for South Asia, Peter Linford, said he expected the number of Indians coming to Australia for business to increase.
“It’s broad based and becoming more broad,” Mr Linford said from New Delhi.
Initially, the investments were mainly in the resource sector, but had diversified to include to banking, information technology, hotels, manufacturing and biotechnology.

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