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Kundli
Kundli-Sonepat integrated township plan of Haryana Government for 2020 is a mixture of industrial, Commercial, Residential and Educational Hub. In this city approximately 3000 small and middle scale industries are already working. TDI plays Major role in residential park.
About TDI Group
TDI is an organization which let your dreams come true. TDI is the name of trust and faith .An ISO 9001 company, TDI is known to have represented the finest elements of urban living through its magnificent journey of over two decades. With a consistent track-record of timely execution and high-quality construction, the company has developed world-class townships and commercial complexes in various prime locations of the country.
TDI's ability to meet the special requirements of the real estate market and clients stems from its strong foundations of professionalism. Every project that bears the TDI signature stands out from the rest, in terms of design aesthetics and global standards of construction. The company's vision for exceeding industry benchmarks is evident in its ability to redefine value engineering, project after project - reinforcing the best of conceptual innovation and cutting-edge construction technologies.
From the desk of Chairman Shri D.N.Taneja India has turned out to be amongst "dominant host countries" for FDI.
The excellent economic performance and introduction of SEZs are acting as major propellants for the real estate sector. With its experienced and professional team, TDI has steadily carved a niche in the real estate industry by changing the skyline of the developing cities in India such as Mohali, Panipat, Kundli, Jalandhar, Agra, Moradabad, Jasola and Meerut.
TDI thus aims at becoming an international standard player offering holistic real estate solutions.
I, on behalf of the whole TDI team, welcome you to explore new vistas of opportunity in the realty sector.
Social Responsibilities
Ø TDI endeavors at working for the benefit of underprivileged sections of the society through its Corporate Social Responsibility (CSR) activities.
Ø To help the victims of recent flood in Bihar, TDI not only contributed Rupees 21 Lac to the Chief Minister Relief Fund but also mobilized and appealed to other individuals, corporate and associates to contribute for the cause. A 'Thank-you' note from the Hon'ble Chief Minister of Bihar – Mr. Nitish Kumar to TDI was highly encouraging in this regard.
Ø TDI has also demarcated around 6 acres of land in TDI City, Kundli for setting up a Trust named 'TDI Navgraha Trust' which will run a school to provide education, curricular and extracurricular activities, medical checkups and blood donation camps for economically weaker sections free of cost.
Vision and Mission
Creating world class townships is our vision and Passion, TDI townships are fully integrated mini cities with complete infrastructure and amenities required for high standard of living
.Conforming to international level of construction quality and architecture, our township offer a lifestyle full of panache , elegance and comfort.
Operational: - TDI City Moradabad, TDI Phase 5, I Block, ABC Kundli.
Under construction:- TDI City Agra , TDI City Indore , TDI City Meerut ,TDI City Kundali , TDI Greens Sonepat , TDI City Panipat , Ourania Gurgaon , TDI City 1 Mohali , TDI City 2 Mohali , TDI Villas Mohali .
Future project –TDI City , Indore
TDI Commercial:-TDI present State-Of-the-art office cum retail complexes developed to fulfill all the requirements of modern and dynamic business. Strategically located in most prominent city areas
Operational: - TDI Centre Jasola | TDI Palam Court Gurgaon | TDI Southern Park, Saket.
Multistory Apartment, Kingsbury Kundli, Ourania Gurgaon.
Under Construction: - TDI Business Centre Mohali | TDI Business Centre Kundli | Oxford Street Kundli |
TDI Arcade – Moradabad.
Retail:-
The Indian retail industry has finally come of age with consumers having access to the best of merchandise and shopping experience. TDI has facilitated this positive trend by giving shape to world-class malls cum shopping complexes that bring together the most exciting retail outlets under one roof.
Operational: - TDI Mall, Rajouri Garden | TDI Mall, Agra | TDI Paragon, Rajouri Garden
TDI Fun Republic Moti Nagar | TDI Westside Mall, Lajpat Nagar
Under construction: - TDI Mall, Chandigarh | TDI Mall, Jalandhar | TDI Mall, Kundli
TDI Mall, Moradabad Rodeo Drive, Kundli | TDI Park Street,
Sonepat | TDI Centre Jalandhar.
Education:-
As an essential element of its fully-integrated townships, TDI is setting-up premium schools that offer students an ideal combination of global best practices in education and the unique ethos of India's rich tradition.
Leisure:-
While leisure time may actually be reducing, the demand for quality entertainment avenues is on a rapid rise among the Indian consumers. Sensing this change in trend, TDI is in the process of setting up international level clubs and amusement centers across major cities of the country.
Hospitality:-
TDI hotels offer high levels of comfort and luxury with facilities comparable to the best in the world. Developed in consultation with industry experts in the field of hospitality, TDI
hotels bring forth a tasteful world of indulgence to meet the demanding requirements of the international traveller.
Fortune Select TDI Hotel, Kundli
Project TDI City Kundli
An elite project of TDI is located On NH 1, near to Delhi Border and within 3rd ring road of Delhi close to Rajeev Gandhi education city in 4000 Acre, i.e. Dream project of Congress Leader Mrs. Sonia Gandhi and Haryana Chief Minister Bhupinder Singh Hooda. In upcoming future all high profile personalities from Punjab, Haryana, Himachal Pradesh, Chandigarh and J&K are going to shift in TDI City because the rate difference between in North Delhi and Facilities are at very big level.
For this Grand project Distance from high rich locality i.e. – Pitampura, Ashok Vihar Shalimar Bagh, Punjabi bagh, Model town, Civil lines and there is only 15 min. drive from bye pass chowk Delhi.
Delhi Bye Pass is located on KM 16/300 and TDI Gate located on KM 33/000, the distance is Km 17/ 700 and Delhi border on Km. 29/300. So the Distance from Narela and Delhi border is only 3.700 Km. These distances are from Raj Ghat.
In Near future TDI Kundli would be a good residential address and area is 2000 acre, township and is a mixture of residential, commercial and entertainment city. The area between TDI and Delhi border consist 15000 small and mid scale Industries.
At a distance of mere 2.5 km from Delhi, the city of Kundli offers full advantage of its proximity to the capital in the form of increased opportunities for economic and infrastructural developments.
Developmental Highlights:
Every time it gives TDI immense pleasure to present to you the latest development highlights at our mega integrated township of over 1500 acres – TDI City, Kundli
• Construction work on furnished residential villas of 250, 350 and 500 sq yds is on at full swing. The sample 500 sq yd villa will be ready within a month for public view.
• 40 out of 75 Expandable villas of 250 and 350 sq yds are being constructed at a fast pace. Connecting road for these villas is under construction.
• Foundation work on the newly launched 204 sq yds 'King street S.C.O' has already started. Sample will be ready within 8-9 months. King street has been especially designed to offer the convenience of departmental shopping and fulfil the daily needs of the future residents of Kingsbury and Kingsbury Prime. King street is located at a prime location within the city, near the entrance main gate.
• Landscape for the premium 204 sq yds S.C.O – Connaught Place is ready. It will serve the daily needs of residents of Block H, F, I and L. Work on the same will be starting soon.
• Possession of plots in Blocks A, B, C, E & F has already been handed over and for the remaining plots, and possession will be given very soon. Some of the plot owners have already started construction and few are at the finishing stage. The M Block plots were launched recently receiving extremely good response from the customers.
• Construction of Kingsbury 1st phase has almost reached its final stage. Possession will begin by early next year.
• Oxford Street is all ready with glass work, floorings and paint work.
KMP Expressway –
A fast paced project of 135.6 km that will ease inter- and intra-state traffic to a great extent and will reduce travel time from Kundli to the international airport at New Delhi to mere 30 minutes.
Extended Metro Connectivity –
The Haryana government's decision to extend the metro network to Kundli has contributed to an upswing of activities by domestic as well as foreign investors.
Education Hub –
Kundli and Sonepat will soon become education hubs with foreign universities setting up campuses here and an IIM being set up in the near future.
Proposed Cyber City –
Kundli will soon house a cyber city containing offices of major IT companies.
Amenities at TDI City Kundli
Ø Ample Green area
Ø Club Houses, Swimming pool, School in Vicinity.
Ø Hospitals Near-by
Ø Well lit metal roads
Ø Earthquake resistant structure.
Ø Vastu friendly layout
Ø 100% Power Backup.
Ø Gymnasium and fitness centre.
Accessibility
 IGI International Airport and Domestic as well.
National Highways 1 and 8.
Metro Connectivity for whole Delhi NCR.
Smooth Drive from New Delhi Railway Station.
Delhi Border and elite residential colonies of Delhi e.g. Pitampura, Shalimar Bagh, Rohini etc.
Luxuries you can expect
Ø Wooden flooring in Master Bedroom
Ø Vitrified Tiles Modular Kitchen.
Ø Club, Schools and Hospitals in vicinity
Ø Pleasing Greenery and Fascinating Parks.
Ø Plenty of Parking spaces.
Ø Swimming Pools.
Unique Selling Points
ü This is not a merely transaction, we value your emotions.
ü This is a well planned new modernize integrated city.
ü Township consist all the facilities e.g. Commercial complex, Community Centre, Medical facilities and Schools.
ü Close to International Airport Delhi, National Capital Border and elite colonies of Delhi with National Highways 1 and 8.
ü Fascinating location and healthy environment to enjoy the every moment of life.
ü Township of 1500 acre area.
Post Sale Services
In this we assure you for your on time Registry, Possession and Maintenance. We are helping hard in design Approval and Construction.
Size and Prices
This Elegant integrated township is divided into different sizes plots e.g.
250 SqYds
350 SqYds
500 SqYds
700SqYds
1000SqYds
Finance Option
To make all the deals and transaction possible, Finance facilities are also available from different banks at very low level of interest rate from PNB Housing, LIC Housing finance and other major financial institutions are open to finance the project.
Possession Time
Possession is in process and booking for starting phases has been started.
Any further more information log on to www.zameen-zaidad.com
www.propertycafeteria.com
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Home loan schemes come with a host of options to choose from. Ashish Gupta outlines a few of these options to help you fit in the EMIs comfortably with your other regular monthly expenses
It is vital to ensure you are comfortable with your home loan repayment. If you are not, it may lead to defaults in the schedule. This can lead to a poor credit history. Therefore, you need to check out the various options and select the one best-suited to your needs.
Here are some options to make your repayment comfortable:
Flexible loan instalment plan
In this case, the loan comes with a customised solution to suit the needs of customers whose repayment capacity is likely to alter during the term of the loan. The loan is structured in such a way that the EMI is higher during the initial years, and subsequently decreases in the latter part, proportionate to the reduced income of the customer. For example, assume a husband and wife take a loan jointly of Rs 30 lakhs for 15 years. Assume the husband has eight years of service left and the wife has 15 years of service left. In this case, the 15-year loan can be structured such that higher EMIs are paid during the first eight years and lower EMIs are paid for the balance seven years.
Acceleration of EMIs
Here, a borrower has the option to increase the EMIs every year in proportion to the increase in his income. In case a customer avails of a loan with a repayment period of 15 years and increases his EMIs every year by say 10 percent, he can shorten the effective tenure of his loan period to less than 15 years. The borrower repays the loan faster and saves on interest. He also retains liquidity, as he need not make lump-sum payments, thus releasing funds for other investments.
Balloon Payment
This helps in increasing the loan eligibility of the customer without increasing the EMIs. The borrower needs to assign securities like LIC policies, government bonds, National Savings Certificate (NSC) etc in favour of the bank. The present value of the maturity amount of the assigned securities is combined with the loan amount to arrive at the enhanced loan eligibility. The EMI is calculated on the net loan amount - total loan minus the present value of the securities offered by the borrower.
Step-up repayment facility
Under this mode, the payment of principal amount is deferred to the later years. The objective of this scheme is to provide the borrower with a repayment schedule that is linked to his expected growth in income. Under this option, the borrower can avail of a higher amount of loan and pay lower EMIs in the initial years. Subsequently, the EMI is increased proportionately with the assumed increase in his income. It also helps a borrower get a larger amount as compared to the amount under the regular options.
The EMIs will be increased in stages. For example, for a 15-year loan, the repayment schedule divided into three stages would give a step-up in the EMI at the end of every fifth year. The EMIs for the first five years will constitute a large part of the interest and a nominal sum of the principal portion. For the balance 10 years, the EMIs are stepped up to recover the outstanding principal and interest for the remaining term of the loan.
Considering the tax benefits on the interest paid on a housing loan, this option can be used to maximise the tax benefit. This mode proves costly if you intend to repay the loan in the middle of the term, because you would have repaid only the interest element and not the principal element in the initial years.
Courtesy:- FT dt:- 24-05-2009
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The private sector real estate players must reset their priorities so as to provide low-cost housing to the middle class and the poor. S Jaipal Reddy made the point clear while taking charge of the urban development ministry for the second consecutive term here on Friday.
“The private sector, which is a major player in the housing sector, must reset its priorities. So far, they had been building apartments for the rich. They must now concentrate on providing accommodation for the middle class and the poor,” Mr Reddy told newspersons after taking over the reins of the ministry.
It’s a measure of the recognition of the good work done by him during his first stint in the Nirman Bhawan that the Congress leadership was constrained to ask him to continue shepherding the urban development ministry. The senior Congress leader, who romped home comfortably from the Chelvella Lok Sabha seat in Andhra Pradesh, spelt out his priorities for the next five years. Admitting that the Centre found itself hamstrung in the housing sector as land was a state subject, Mr Reddy said he would speak to state governments to consider providing land for housing the poor and the middle class. Among other things, his priority is to complete the task of drafting the bill seeking to create an urban regulatory authority for Delhi. “Once we have legislated, it’ll be a model legislation for other states,” he said, adding the ministry had tread cautiously on this matter as “any regulator can also be an obstructor”.
“We must, therefore, evolve a proper shape so that the interests of the consumers are protected,” the minister remarked. The ministry, Mr Reddy told newspersons, was also in the process of negotiating a $3-billion World Bank loan to supplement the efforts of JNURM for creating a better urban inclusive environment. The amount, he said, would be utilised to improve drinking water, sewerage, sanitation and public transportation.
The minister said: “There are still certain issues pertaining to ceiling which need to be addressed. We had taken a few initiatives in the past couple of years. The people appreciated our efforts. That’s why they voted for us twice in past few months.”. The ministry, he added, would also strive to improve infrastructure services. “Our endeavour will be to add to the initiatives taken in this direction by the Delhi government,” he said. The ministry, Mr Reddy added, was also keen on taking the metro to other major cities and expanding its network in Delhi.
Courtesy:- ET dt:- 30-05-2009
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It is something that you would not expect from a big-ticket real estate brand. In a sign of the times where demand lies in affordable homes, Delhi-based Unitech Ltd is planning to launch projects with homes priced around Rs10 lakh, echoing the downmarket strategy pursued by the Tatas.
The company outlined its intention in a said in a presentation made to investors recently.
Details on the specifications and locations were not immediately available. A company spokesperson said the products are still at a conceptual stage.
Earlier this month, Tata Housing, a subsidiary of Tata Sons announced a residential project priced in the range of Rs 3.9 lakh to Rs 6.7 lakh at Mumbai’s distant suburbs.
Unitech has already launched homes priced below Rs 20 lakh in locations like Chennai. “Through a combination of reduction in costs, decrease in unit sizes and reduction in margins, Unitech has been able to offer housing at prices affordable to a wider cross section of customers,” the presentation said.
“Launching a project around a Rs 10-lakh flat in the metros would require immense incentivisation from the government but it is possible to launch such a project in smaller towns,” Sanjay Dutt, chief executive at property consultant Jones Lang LaSalle Meghraj told Hindustan Times.
Courtesy:- HT dt:- 25-05-2009
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Elections are over and the verdict is out. With this, the real estate sector seems to have a whole lot of expectations from the new government.
The UPA government is on the fast track and India is looking forward to a stable government, making the world of a difference today. This will definitely impact the current status of the real estate sector.
Pradeep Jain, president CREDAI NCR and chairman, Parsvnath Developers Limited exclaims, "With this mandate, I personally feel the country will now have a stable government for next five years, which was much needed. While UPA was in power for the last five years, their policies across the country and globe have been widely appreciated." Samir Jasuja, founder and CEO, Prop Equity says, "Developers are looking forward to the government reducing housing finance rates, irrespective of the loan amount, to encourage buyers to invest in realty. They would also like to see the new government encouraging banks to lend to developers more readily and to permit Foreign Direct Investment (FDI) in projects less than five lakh sq ft in size being the current minimum limit." Kamal Taneja, MD, TDI, adds, "The mandate is clearly in favour of stability and growth, something that is going to have a direct impact on the realty sector." Developers say that they expect the government to grant industry status to the sector, along with an infrastructure status for integrated townships. They believe that the service tax from lease rentals from commercial property should be removed and exemption limit for rental income be increased along with raising income tax rebate on interest of home loans. Harmeet Singh, director, Credence Relocity, a realty consultancy firm, avers, "The expectations are higher as the sector has been the worst hit in the recent past and thus, radical changes are e x p e c t e d . With RBI controlling the prime lending rate, the interest rates are expected to drop, leading to higher availability of cash flow benefiting the buyer community, which in turn will improve the cash flow of developers."
Rajeev Rai, vice president (corporate), Assotech Ltd says, "The buyer is expecting a conducive fiscal policy for low mortgage rates along with the expectation of raising the limit on homes loans, classified as priority sector lending for banks, to Rs 30 lakh from Rs 20 lakh." Manu Garg, director, Landcraft Developers states, "PM Manmohan Singh is an economist himself and enjoys the confidence of the party where he will be in a position to take much stronger decisions. All these factors should be true for the realty sector and the buyers waiting to buy their dream homes." Prashant Solomon, Joint MD, Chintels India, says that they are hopeful that a stable government will stabilise the prices as well. However, without a regulatory body, not much can be expected to be in order. Vijay Jindal, CMD, SVP Group explains, "The time has come when the real estate sector should have a regulatory body. With this, developers will not get affected by the misdeeds of some scrupulous elements amongst them. Banks can be designated to check the proper utilisation of funds. This will increase the competition in the sector and make it transparent." At the end, everyone is hoping for a positive change in the sector.
Courtesy:- ET dt:- 22-05-2009
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Delhi-based Parsvnath Developers has decided to raise up to Rs 2,500 crore through issuance of securities , including Qualified Institutional Placements. The company has the approval of its board of directors. It will now seek permission from shareholders. “We want to raise money to reduce our debt and expedite our ongoing projects in the hospitality and the SEZ segment,” said Pradeep Jain, chairman.
Courtesy:- BS dt:- 24-05-2009
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Housing Development & Infrastructure Ltd (HDIL), a Mumbai-based property developer, will sell shares worth $600 million (Rs 2,880 crore) to institutional buyers to reduce debt on its books, a top company official has said.
The move comes in the wake of nearly 33 per cent rise in the company’s debt, from Rs 31,12.74 crore 2007-08 to Rs 4143.31 crore in 2008-09. Analysts expect the promoters to dilute 10-11 per cent of their holdings in the share sale. Promoters now hold 61.50 per cent stake in the company.
The company’s plans follow successful Qualified Institutional Placement (QIPs) issues by the country’s second -largest developer Unitech, which raised Rs 1,625 crore and Indiabulls Real Estate, which raised Rs 2,656 crore this week and stake sale by the country’s largest developer, DLF, to raise Rs 3,860 crore earlier this month.
“Developments since last Saturday gave us a lot of confidence. We have to take shareholder’s approval for the issue,’’ said Hariprakash Pande, deputy general manager, finance, HDIL, in a conference call with analysts today.
The HDIL board, which met today, has also decided to make preferential allotment of warrants to the promoters. The company did not specify the number of warrants it would issue and the conversion rate. The board has called a extra-ordinary meeting of shareholders on June 17 to take the shareholder nod for the QIP and preferential allotment of warrants.
The company has reported posted 91 per cent drop in its net profit for the fourth quarter as home and office property sales dropped.
HDIL posted a net profit of Rs 61.92 crore for the quarter ended March 31, 2009 as compared with Rs 708.24 crore it posted in the corresponding quarter last year. The company’s total income fell 61 per cent to Rs 388.77 crore for the fourth quarter for FY 2009 as compared to Rs 989.49 crore it posted in the fourth quarter of FY 2008.
Courtesy:- BS dt:- 24-05-2009
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Liquidity-starved sectors such as infrastructure and realty could be the biggest beneficiaries of the vote of confidence for the UPA.
A clear mandate for the United Progressive Alliance and the continuity of the current government's policies are likely to keep the markets buoyant. Marketmen believe that foreign institutional investors and domestic institutions, which were not participating aggressively in the markets thus far, are likely to invest for the long term, given the stable government at the Centre.
Opening up of the economy, allowing foreign direct investment and easier interest rates should improve liquidity and are expected to help sectors such as infrastructure, banking, real estate, telecom, power, education and retail. With the Left crutch that crippled decision-making now out of the way, the new government is likely to speed up the divestment of its stake in various PSUs. While experts believe that the markets could touch the 16,000 mark, stiff valuations and the burgeoning fiscal deficit could cap the upsides.
Analysts said sectors such as telecom could also see action if the government speeds up the 3G auction process, merges MTNL with BSNL and lists the new entity, and divests its 26 per cent stake in Tata Communications.
FMCG and pharma sectors, which are considered defensive, are likely to underperforms as the market chases growth. IT services, which is another defensive sector, is unlikely to participate in the rally given that the rupee is expected to gain in the short term.
Banking
Analysts are not ruling out a possibility of an increase in the non-performing assets of the public sector banks, going ahead. Further, the Congress manifesto adds that it will strive to provide interest subsidy for agriculture, small and medium industries and education sectors. Thus, the government's dependence on the banking sector may be sustained in the future as well.
With the government borrowing programme at around Rs 3.6 lakh crore in the first half of the year, bond yields are likely to stiffen and curtail treasury profits (mainly for PSU banks).
On the positive side, with the Left out of the picture, the government may open up the banking sector to foreign players and consolidate PSU banks. For example, SBI has already merged one of its associate with itself and the government might consolidate other SBI associates with the parent. Any moves to increase FDI limit in insurance from 26 per cent to 49 per cent will help financial institutions like ICICI Bank and HDFC to raise additional capital. Increased voting rights of foreign banks, which have more than 10 per cent stake in Indian banks, will bring the stocks of private banks into play.
Infrastructure
Most analysts believe that the market will give a thumbs up to infrastructure stocks as the Congress manifesto lists economic revival and restoring high growth as its immediate priority. It also mentions that public expenditure on agriculture and infrastructure will be stepped up. The continuation of policies in the infrastructure space and expected increase in the liquidity should augur well for the sector. Considering the Congress party's focus on the rural sector, investors need to look at companies in the rural infrastructure space such as IVRCL, Nagarjuna Construction and HCC. Analysts believe that companies will now find it relatively easy to raise funds given the increasing confidence of the investors and flow of money from the FIIs and through the FDI route. The decision-making process on projects related to infrastructure is likely to be expedited helping companies in this sector. Renewed buying is likely in infra stocks as valuations were beaten down due to growth concerns and credit crunch.
Realty
Improvement in the liquidity situation could be the biggest positive for this sector Analysts are expecting stability at the Centre and continuation of policies will attract more money from foreign investors. Realty majors will now be able to raise funds through Qualified Institutional Placements or debt or through further equity issues. India's largest realty companies--DLF and Unitech--have already raised over a billion dollars in the recent past and chances are that others might follow. Nirmal Jain, chairman, India Infoline, said "indications are that formation of a stable government will trigger flow of foreign capital in equity as well as debt. This would mean appreciation of the rupee and revival of liquidity-starved sectors such as real estate."
Analysts now believe that since the UPA can form the government without the support of the Left parties who were opposed to the idea of foreign direct investment, special economic zone projects, which were stalled, could get a fresh lease of life
Courtesy:- BS dt:- 18-05-2009
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Owners Sell 9.9% In DAL For Rs 3,860 Crore In Open Mkt Transactions
DLF, India’s largest real estate company, is looking to raise Rs 10,000 crore in the next 2-3 years through sale of its treasury investments, land parcels and real estate projects, said its vice-chairman Rajiv Singh.
Mr Singh’s family, promoters of the cash strapped DLF, had sold 9.9% stake in the company on Wednesday for Rs 3,860 crore in open market transactions.
ET Now had first reported on Thursday that DLF promoters were selling stake. Capital group picked up close to 5% stake in DLF, while HSBC, GIC and Fidelity bought smaller stakes. The transactions were done at Rs 230 per share. DLF shares closed marginally down at Rs 234 at NSE on Wednesday.
On the timing of the stake sale, Mr Singh said, “If it was the best or the worst, one would know only in hindsight, but it was surely the right solution in the current circumstances.” DLF had mopped up Rs 9,000 crore in an IPO less than two years ago. The company’s shares had peaked in January 2008, crossing Rs 1,200 but declined to a low of Rs 124 earlier this year.
Mr Singh said he started thinking of the stake sale only a few weeks back, adding a successful qualified institutional placement (QIP) by rival realty firm Unitech too played a part in promoter’s decision to sell stake. “Unitech’s QIP did give a positive signal that investors were interested in buying stocks. It really helped,” he said.
The funds raised through the stake sale will be advanced to privately held promoter group company DLF Assets (DAL), which purchases properties from DLF. Mr Singh said he was still working on the form of fund infusion in DAL, as to whether it will be in the form of equity or some other instrument. The fund infusion in DAL will be used to buy hedge fund DE Shaw’s $400 million (Rs 2,000 crore) investment in DAL and also to pay back to DLF around Rs 1,600 crore.
Besides this, DAL is expecting to raise Rs 2,000 crore in debt through securitising its rental income this year. Together, these fund raising initiatives at DAL will bring down DLF’s receivables from DAL from Rs 4,900 crore to around Rs 1,300 crore.
A panel of independent directors is working on ways to integrate DLF and DAL. DAL will continue to exist as an independent entity, but its ownership may change, Mr Singh said. Therefore, DAL will not be merged with DLF, but may become a subsidiary of DLF.
While elaborating on DLF’s plans to raise Rs 10,000 crore through sale of assets and its portfolio of investments, Mr Singh did not give details of its portfolio of investments, but said negotiations with buyers are currently under way. The company will also sell some of its hotel projects and certain businesses such as wind power to raise the amount.
The sale proceeds will be used to repay part of DLF’s Rs 14,000 crore debt. “Our target is to halve our debt this year,” he said. The assets that will be disposed off are “not contributing revenue in the short-term and are not strategic in the long-term”, he said.
DLF had earlier this month said it would raise Rs 5,500 crore through asset sale in FY10. The company expects to raise Rs 3,500 crore by the beginning of the third quarter this fiscal. The sale of promoter’s stake has come just days after the closure of DLF’s buyback programme, which had attracted criticism from some analysts for not making the best use of cash. Mr Singh defended his decision saying, “The company decided on buyback at a time when the economy was still not falling off the cliff.”
On housing market, Mr Singh said the demand has started picking up. “The worst is over. But I will still be cautious and say that recovery is at least four to five months away,” he said, adding that he didn’t see scope for further price correction.
Courtesy:- ET dt:- 14-05-09
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After suffering a severe slump for almost six months, leading real estate firms are showing strong signs of revival on the back of affordably priced middle-income homes and flexible payment terms that are fuelling demand.
Bookings for new flats are surging as the price tags are well below the heady highs two years ago, say builders like national leader DLF and the Vatika Group.
DLF `s Capital Greens project in West Delhi launched last month at Rs 4,500-Rs 5,500 per squre foot sold close to 1,400 units within a day. In Bangalore, DLF launched a project with 1,800 flats priced at Rs 1,850 per sq foot. It sold 600 flats on the first day itself.
"As the largest real estate company, DLF took a conscious decision to reduce prices. The correction in prices have ensured that speculators stay out from the market as returns are not galloping," said Rajeev Talwar, group executive director, DLF Ltd.
Earlier this month, the Vatika Group introduced new projects in four Gurgaon sectors, pitching an 850-sq-foot flat at Rs 21 lakh and a 1,450-sq-foot apartment at Rs 43 lakh.
"Till last year, all developers were focused on upper middle class as margins are higher but the markets taught everyone a lesson. Now, players have changed gear to compact units to make up for reduced margins through volumes," Pankaj Pal, president, sales and marketing, at Vatika Group told Hindustan Times.
Unitech has already sold 2.5 million square feet of apartments in new affordable housing projects spanning 9 million square feet in NCR, Mumbai, Chennai and Kolkata. The company plans to launch 40 projects involving 27 million sq. feet by next March.
"There has been a turnaround for well located projects from reputed builders although buyers are still cautious and showing a preference for projects that are ready to move in or nearing completion. Flexible payment terms of developers have also led to some activity in the market," said Sanjay Dutt, chief executive officer at property consultancy Jones Lang LaSalle Meghraj.
Delhi-based BPTP Ltd is selling independent floors in Faridabad, offering1,296 sq feet starting at Rs 16 lakh.
"Within a week, we sold out close to 480 units of the total 600," said Amit Raj Jain, BPTP's vice-president, marketing.
Parsvnath Ltd says it has sold 480 units of its 510-apartment `Royal Floors' project in Lucknow, where a 1,135 square foot floor is priced as low as Rs 12.85 lakh
Courtesy:- HT dt:- 20-05-2009
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Real estate developers are making a beeline for bank funds, with traditional sources of funding like private equity and the stock market drying up in the current slowdown.
Realty, which has also taken a huge hit in the slump, accounted for the largest chunk of nonfood bank credit disbursed in the previous fiscal (FY09). Developers have used most of these funds to meet working capital requirements.
“Fresh credit off take is on account of project financing,” said an official with a large foreign multinational bank on condition of anonymity. He added that builders were facing a cash crunch, with receivables from residential projects under construction getting blocked. Demand has been slowing down and buyers are deferring payments till possession.
Thus, not only are banks helping real estate companies complete their projects and sell them, but also pay back loans. Completion of projects will in turn help developers liquidate their inventory of unsold properties and generate cash flows to meet operating costs.
Reserve Bank of India (RBI) data shows that banks’ fresh loans to real estate companies registered a 61.4% growth to Rs 34,500 cr in the 11 moths of the fiscal, compared to 26.7% growth in the corresponding period last year. Almost half of these new loans were raised between December 2008 and February 2009.
Further, RBI has reduced the risk weight age on real estate loans to 100% from 150% in the latest monetary policy, supporting the banks’ initiative.
While banks have in the past been wary of lending to real estate companies, this time round they are taking the leap, while making sure the safety net is in place. “Banks are in no hurry to lend to meet their credit off take targets,” says M Narendra, executive director, Bank of India. “Thorough due diligence is done before sanctioning such loan applications. The cash flow statement, sales potential, and the location of the project are some of the factors that are studied to determine the viability of the project,” he adds.
Banks are also restructuring some of these loans in order to avoid their classification as non-performing assets (NPAs).
NPAs act as a drain on a bank’s balance sheet, forcing lenders to make provisions or set aside capital which could have been lent for productive purposes and earned interest for them.
“Debt restructuring just means that cash flows receivables for the bank from a particular project would be postponed. This does not form part of the new loans given by the bank,” said Mr Narendra.
Courtesy:- ET dt:- 08-05-2009
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In a recent landmark judgment, in Home Solution Retail India Ltd. & Others vs. UOI & Others, the Delhi High Court has pronounced its judgment with regard to several writ petitions which had challenged the applicability of the levy of service tax on renting of immovable property. The High Court has held that the taxable service in respect of renting of immovable property, as defined under the relevant Section 65(105)(zzzz) of the Finance Act 1994 thereof, was with regard to any service in relation to renting of property and was not on the renting of immovable property as such. Consequently, the High Court has held that the levy of service tax on the renting of immovable property itself, in terms of the relevant notification issued consequent to the introduction of the taxable service, was ultra vires the provisions of the Act.
In arriving at its decision, the court has relied on the wordings of the particular taxable service in order to hold that since the activity of renting of immovable property was itself not a service, the expression ‘service in relation to renting of immovable property’, occurring in the definition of the taxable service, can only extend to services which are provided in relation to the renting of immovable property. Accordingly, the Court distinguished the particular definition of service in relation to renting of immovable property from several other definitions in service tax law which were similarly worded and held that in those other definitions, the expression ‘in relation to’ itself referred to a service and consequently not only was the core service taxable but also the allied and ancillary services in relation thereto were also taxable. The court illustrated this distinction by referring to the taxable service of dry cleaning where the expression was a service in relation to dry cleaning and held the activity of dry cleaning was itself also a service which was taxable therein. As opposed to this situation, the taxable service provided by a real estate agent, for instance, was a service in relation to real estate and since real estate was not a service, the definition could only extend to services in relation thereto. On a similar analogy, the court came to the conclusion that in the present case, the renting of immovable property could not be construed as a service by itself and hence the taxable service in question could only extend to services in relation to renting of immovable property and not to the activity of renting itself.
In arriving at the aforesaid finding, the court has relied on the decision of the Supreme Court in T N Kalyana Mandapam Association Vs. UOI (2004) 5 SCC 632) which, interestingly enough, was relied upon both by the appellants, who had challenged the legality of the levy, as well as by the respondents i.e. Government of India. Based on a detailed consideration of the aforesaid judgment, the Delhi High Court has come to a determination that the decision of the Supreme Court supported the argument of the appellants and not that of the respondents.
With regard to the nature of the service tax itself, the High Court has held that it is a value added tax and the tax is a tax on value addition done by the service provider and it must have a connection with the service. Consequently, since the mere renting of immovable property does not entail any value addition, it could not be regarded as a service for that reason as well. Here again, the High Court has relied upon another decision of the Supreme Court, in All India Federation of Chartered Accountants Vs. UOI (2007) 7 SCC 527), which had held that just as excise duty was a tax on value addition in regard to goods, the service tax was a tax on value addition by rendition of services. Accordingly, the Supreme Court, in that case, had distinguished property-based services and performance-based services and had arrived at a conclusion that the expression ‘in relation’, occurring in the various relevant definitions, needed to be construed in accordance with this principle of value addition. The High Court h as, relying on the above decision, consequently come to the conclusion that the levy of service tax on the activity of renting of immovable property was ultra vires the relevant definition of the taxable service, as contained in the Finance Act, 1994.
While upholding the arguments contained in the writ petitions in regard to the above points, the High Court has held that it has therefore not been required to examine the alternate argument as contained in the petitions that the relevant definition, should it be construed as applicable to the activity of renting of immovable property as well, would be volatile of the Constitution of India in that the Central Government could not, in terms thereof, impose a tax on land, as it was a State subject. Hence, the decision is limited to the point that the taxable service as understood and interpreted through the relevant impugned notification and hence the tax so collected, was not in accordance with the statute and hence without basis in law and the decision is not with regard to whether or not the definition of taxable service itself is unconstitutional.
This judgment is applicable on an all India basis, as it is on a point of legality, and would have far reaching consequences for all and in particular for those who carry on business in rented premises and who do not have an output excise or a service tax liability so as to be able to offset this tax on rentals. The Retail Sector is thus a very major beneficiary, as the service tax on rentals is a very significant un recovered tax cost for the sector. Further, the judgement has ramifications with regard to other taxable services as well since these are also similarly worded.
The Central Government is almost certain to file an appeal against the aforesaid judgement with the Supreme Court. It remains to be seen whether it will request a stay of the judgment in the interim and whether such a request would be granted. It is also possible that the Government may consider amending the provisions of the Finance Act, 1994, possibly with retrospective effect, in order to overcome the above judgement of the Delhi High Court. The picture will become clear in this regard in the near future.
However, until such time as these eventualities do not occur, taxpayers can take effective steps to avail the benefit of non payment of service tax on renting of immovable property. Several issues such as discontinuance of payment of tax for future period, filing of refund claims for past taxes paid on such rentals, for the period of one year and beyond, a ailment of CENVAT credits on such taxes, payment of such taxes to the Government, if already collected as such, the person entitled to file such claims will need to be addressed in detail, in order for the benefits to flow to tax payers.
Courtesy:- BS dt:- 27/04/2009
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Lenders May Have to Spell out Floating Rate Calculations; Move to Increase Transparency in Pricing of Loans
Pressure on banks to pass on benefits of lower rates to existing borrowers who have opted for floating home loan rates may come from a new quarter. An arm of the Reserve Bank of India (RBI), which gets banks to set minimum standards of service, will now ask banks to spell out how interest rates are calculated on floating rate loans.
The Banking Codes and Standards Board of India (BCSBI) chalks out a list of banking services and asks banks to spell out the minimum level of service their customers should expect. Although the BCSBI does not have regulatory powers, it does monitor services offered by banks and point out irregularities to the RBI. Speaking to ET, KJ Udeshi, chairperson of the BCSBI, said: “We plan to review the code to bring about transparency in pricing of loans, especially the retail products.”
In principle, borrowers who have availed of floating rate loans should see their interest liability reflecting the rates prevailing in the market. In practice, a new borrower who avails of a floating rate loan invariably gets a cheaper rate than an existing borrower. Banks have been able to get away with this by varying the spread between their loan rates and benchmark prime lending rate (PLR). For instance, if a bank with a PLR of 12% extended home loans at 11% (PLR minus 100 bps) a few months ago, it can now entice new borrowers with better rates of 10.5% by offering rates at PLR minus 150 basis points. In this case, since the PLR is unchanged, the old borrower who took the loan at 11% will continue to pay 11% even though rates have fallen to 10.5% for new borrowers.
“It is often noticed that when interest rates go up in the system, banks are very quick in hiking lending rate. But when interest rates fall, they do not react in the same speed,” added Ms Udeshi. Home loan providers have argued that lenders have to discriminate between new and old because reduction in marginal cost of funds happens immediately while reduction in portfolio costs takes time. But RBI feels that the benefits of a reduction should be shared evenly. Earlier speaking to ET, Udeshi had said, “When interest rates fall, the benefit has to be passed on to all customers. They have every right to claim compensation in the event their rights are violated.”
Several home loan borrowers have approached the BCSBI with complaints that even as their bank is offering lower rates to new customers, their interest rates on loans have not been lowered. Senior officials from the SBI said they are unable to offer lower rate for old customers because cost of funds for an old borrower -from which the SBI had lent them -is still very high. Customers, however, argue that they had taken a floating rate loan betting that if interest rate falls they will get the benefit of lower interest rates. Similarly, in the case of ICICI Bank, borrowers with floating rate loan complain that the bank has refrained from cutting interest rate on home loans despite the sharp fall in overall interest rate over the past six months. The RBI, too, has decided to review the pricing mechanism of prime lending rate on the ground that policy transmission does not seem to be effective. The State Bank of India, for instance, is offering a fix rate of 8% for new home loan borrowers while old customers continue to pay high rate since their rates are linked to the bank's PLR which has not been revised since January 2009.
Courtesy:- ET dt:- 11-05-09
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Forced to offer price discounts at a time when customer demand remains weak, realty major DLF has posted a weak set of numbers for the March 2009 quarter with revenues down by 18 per cent sequentially to Rs 1122 cr.
The sharp drop in volumes - 34 per cent sequentially and 93 per cent y-o-y indicates that prospective home buyers are still biding their time; moreover some sales were cancelled.
Analysts point out that the poor demand together with the absence of profits from DLF Assets Ltd (DAL) -a firm floated by the promoters - has resulted in the operating profit margin falling to 13.8 per cent from 56.5 per cent in the December 2008 quarter. That drove down the earnings which fell 75 per cent sequentially to Rs 170 cr.
While the net debt increased by about Rs 300 cr to just over Rs 15000 cr, the management has indicated that the company’s debt position will be reduced by half by the year end which is good news.
The company proposes to sell some of its assets to free up cash. Nevertheless analysts believe cash flow pressures will continue - DLF’s annual interest burden is high and receivables from DAL, although lower tan in the previous quarter, are around Rs 4900 cr.
While earlier inflows from DAL had helped boost DLF’s profits, the company is no longer seeing any profits from this stream.
However, analysts believe that with some project launches being successful, and the company conserving cash by putting on hold some projects, the company should be in better shape.
CLSA estimates revenues in the current year in the region of Rs 3400 cr and net profits at around Rs 1140 cr. The stock is trading at Rs 245 but brokerages have a target price of between Rs 178 and Rs 200
Courtesy:- BS dt:- 07-05-09
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The company opens second gurgaon project; Chennai launch a success
Unitech Ltd, the country’s second-biggest property developer, says its strategy to focus on affordable residential housing for mid-income consumers is getting an encouraging response.
It launched its second mid-income housing project in Gurgaon early this week after closing sales of an earlier one on the nearby Sohna Road. It said it sold over 500 apartments at its planned township, called North Town, in Chennai two weeks earlier.
“We have launched the project after getting a good response for the recently launched projects in Gurgaon and Chennai. The launch of new mid-income residential housing projects has improved the operating cash flow of the company,” said an official who did not wish to be identified.
Due to cash crunch and almost no demand for some of its luxury projects, Unitech had stopped the launch of new projects for about five months. It has now changed its strategy.
The company says it is also planning to launch projects in the range of Rs 5-10 lakh an apartment in Gurgaon, Chennai and Kolkata, among other places.
Earlier this month, Unitech raised $325 million (Rs 1,625 crore) from selling new shares to institutions. It plans to use a part of the money to develop its affordable housing segment. The developer plans to launch 40 such projects during the fiscal year ending 2010, aggregating 30 million sq ft.
The company is trying to keep prices in the range of Rs 30-50 lakh, which calls for a price of close to Rs 3,000 per sq. ft. The new project, ‘The Residencies’, is located in Sector 33 of Gurgaon and offers two and three-bedroom apartments at a basic price of Rs 3,295 a sq ft.
The cost of a two-bedroom apartment with a “super area” of 1,100 sq ft would be a little over Rs 36 lakh, while a three-bedroom apartment of 1,535 sq ft would cost a bit over Rs 50 lakh.
Without disclosing the number of apartments to be launched, the official said, “We are testing the market with a soft launch and will decide the apartments to be developed in a few days”.
The company closed the sales of the first phase of its recently launched uniworld garden-2 project at sohna road after selling 750 apartments.
Uniworld garden-2 was offered at rs 29-42 lakh a flat, almost half the secondary market price of similar properties in the vicinity
The current market has demand from end-users who are capable of buying apartments in the range of Rs 30-50 lakh. Recently, a lot of projects have been launched in this range and that is why we are seeing a gradual revival of the residential market.” Said Shveta Jain, associate director, residential transaction services.
Courtery:- BS dt:- 26-04-09
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Growth Based On Sanctions before Oct, Say Bank Executives
Banks may be claiming that they are pruning their real estate exposure but data from the Reserve Bank of India (RBI) paints a completely different picture.
According to RBI data, loans to the real estate sector grew 61 per cent on a year-on-year basis, with Rs 90,765 cr outstanding as on February 27, 2009. During the corresponding period in the previous year, the growth was 26.7 per cent.
During the year up to February 2009, the growth for public sector banks was a 79.1 per cent. Credit deployment by foreign banks to real estate companies registered a 41 per cent growth for the 12 months up to February 27, 2009, compared with a 36 per cent decline last year.
While the balance sheets of foreign banks are much smaller compared to their public sector counterparts, the 40 per cent growth in exposure to real estate firms is significant when seen against the annual growth in total credit by foreign banks, which was 4 per cent as on March 27, 2009.
At the same time, growth in loans from the banking system fell from 12 per cent to 7.5 per cent. But bank executives said the growth in real estate loan flows was based on sanctions before October and growth had slowed down in the second half.
A State Bank of India executive said a majority of lending to the real estate sector took place before October 2008, the time when global financial crisis assumed menacing proportions and sapped liquidity from the system, making banks risk averse.
Similarly, a senior executive of a foreign bank said the high growth in exposure to real estate sector companies was on account of disbursement of loans which had been sanctioned before the sector ran into trouble. “However, I don’t think we will see the same growth in the current year because builders have also cut back on projects,” he added.
Questionnaires sent to Citibank, HSBC, ABN Amro and Deutsche Bank went unanswered.
“During the last two years (2006-07 and 2007-08), real estate developers had launched a large number of projects which were initially funded by customers’ pre-sale contribution, with bank credit utilised over the last six months of construction,” said Amit Jain, managing director, strategic clients coverage group at Standard Chartered Bank. Without giving specific figures, Jain said his bank’s exposure to the real estate sector had increased in the fourth quarter of financial year 2009 and he expected the trend to continue as the bank met the requirements of a few of its core clients.
Axis Bank and ICICI Bank executives said there was no increase in their real estate exposure during the year. But an executive at a Mumbai-based public sector bank said: “Being a crucial sector of the economy, in terms of high employment generation potential and links with various sectors, banks were rushing to fund real estate projects. The returns were good with adequate securities (collaterals). The growth was seen across residential, office, commercial premises.”
On why the pace of public sector banks lending had increased, a Bank of India (BOI) executive pointed out that this was a reflection of the market share and the higher pace of lending in 2008-09 when private and foreign banks had slowed down lending. BOI’s outstanding exposure to the real estate sector rose to about Rs 18,400 cr at end of March 2009 from Rs 15,600 cr a year ago. It has restructured real estate portfolio worth Rs 250 cr, while total restructured loans stood at Rs 4,800 cr.
Asked about the approach towards lending to this sector, BOI chief financial officer VKR Agarwal said: “There is expectation that this sector will show normal growth in the later part of the year (2009-10). It is an important segment which cannot be ignored. Banks would be far more diligent and monitor the real estate account closely.”
Courtesy:- BS dt:- 07-05-09
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The global slowdown has affected the real estate sector heavily; however, it seems that the commercial market is slowly gaining back its momentum. With the serviced offices’ market gaining popularity in Delhi and NCR, the future for this segment of real estate looks bright and sunny. ET Realty explores
Serviced apartments are surely heard of, but what about serviced offices? This is the latest trend in the commercial market. Serviced office space is primarily meant to provide end-to-end facilities for companies or professionals, to carry out their regular business operations. The space is inclusive of all the necessities and amenities that are required for an organisation to function smoothly, like furnishing, air conditioning, power back-up, housekeeping, security, valet parking, reception, pantry services, etc.
Serviced offices are usually fully equipped offices, with no start-up costs, flexible terms and an already available high-tech telecom and IT infrastructure. Hitesh Sahni of HSN Realty Services, a real estate consulting firm based out of Delhi explains, "Serviced offices, also known as managed offices, business centres, office business centres, executive suites or executive centres, are mostly established in the business districts of large cities the world over."
There are reasons galore for a company to rent a serviced office, starting with the fact, that commercial spaces in large cities like Delhi and NCR are quite expensive and sometimes out of the reach of many. And, if it's a posh locality, it is pretty much out of question. However, a serviced office makes it possible for a new company also to have its office in a prestigious locality, without having to pay the exorbitant price. Another reason is the fact that, these offices are fully furnished and are ready-to-move-in. This relieves the occupants from the headache of furnishing the entire place, thinking about the interiors and the numerable issues involved with furnishing a work space. Apart from these, the cost of electricity consumption, air-conditioning and power back-up is normally included in the deal for normal working office hours. Serviced offices also provide Internet, included or extra, depending upon the speed package and negotiations along with dedicated telephone lines priced as per the lease conditions. Some of them even offer housekeeping and valet parking facilities along with dedicated parking slots.
One big advantage of a serviced office is the flexibility in the leasing and rental format. Harmeet Singh, Director, Credence Relocity informs, "There are various commercial arrangements available that are determined by various variables including the area required as dedicated space. While the cost of some shared amenities would definitely be factored in, there is a possibility of offering some optional amenities or value added services. The rent also depends n the duration of lease or occupancy, where generally, the hourly and daily rentals would be higher than the longer duration commitments. There is also an option of advance blocking or reservations. As these office spaces have a more dynamic occupancy pattern, the facility providers encourage advance booking and one might even get a discount on booking in advance." Rentals vary fro Rs 15,000-20,000 per workstation, but can be as high as Rs 45,000-50,000, depending upon the size, extent of instrumentation, general enablement and the office location.
But, who really takes up these spaces? "Most of the time, newer companies and those in a 'start-up' situation are particularly interested in serviced offices for many reasons, including the possibility of shorter range lease periods (starting from one month, but can also be for long periods of up to several years)," states Prashant Solomon, JMD Chintels India.
Solomon explains that those businesses who are in a start-up situation are rarely in a position to afford the more conventional lease of 5 to 10 years and can now use serviced offices to get their businesses off the ground. But, it is not just for start-up and new companies. It seems that the slowdown has probably been a blessing in disguise for the serviced offices market as Solomon informs that larger firms who find themselves in a position where they need to downsize their overheads could also benefit from serviced offices. The clientele includes not only starts-ups, but, even established MNCs and industrial houses in India.
The break-up of the sectors which hire serviced offices is 28 percent share is of the IT and telecom businesses, 16 percent is finance / insurance and banking, 27 percent is tertiary services like consulting, logistics, design, HR and the rest two percent is occupied by miscellaneous sectors.
Though, it is the slowdown which has brought it into the limelight, the trend of serviced offices has been picking up in India for a while now. Madhusudan Thakur, Country General Manager of Regus, provider of workplace solutions says, "While the prices are constantly under considerable downward pressure, we are noticing an increase in enquiries from start-ups and new Indian businesses, along with rationalised approach towards various corporates. Our network of 22 centres in nine cities allows us to tap into this renewed demand and spells big cost savings with a solution for flexible working for corporates. Regus has recorded a 25 percent increase in revenue with a similar growth in profits in 2008 as compared to 2007."
This clearly outlines the need of serviced offices in the current global scenario, MNCs and even other industries are looking for furnished and compact offices, which are not only convenient, but also cost effective.
As far as the future of serviced offices is concerned, Ashish Malhotra, Manager, Markets, Jones Lang LaSalle Meghraj, points out, "Assuring that foreign firms continue to occupy Indian office spaces at the present scale, we see the concept of serviced offices continuing to proliferate and emerge as a market segment in its own right."
Courtesy:- ET dt:- 10-04-2009
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SALES of newly built US single-family homes unexpectedly rose at their fastest pace in 10 months in February, while prices fell by a record margin from a year ago, a government report showed on Wednesday. The commerce department said sales rose 4.7% to a 337,000 annual pace, the fastest increase since April last year, from an upwardly revised 322,000 in January. Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said.
The median sales price in February fell a record 18.1% to $200,900 from a year earlier, the department said. The median marks the halfway point, with half of all houses sold above that level and half below. The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth.
DURABLE GOODS ORDERS RISE IN FEB
Orders to US factories for big-ticket manufactured goods unexpectedly rose in February after a record six straight declines. The Commerce Department said on Wednesday that orders for durable goods - manufactured products expected to last at least three years - increased 3.4% last month. It was the first advance since July and the strongest one-month gain in 14 months. Last month's strength was led by a surge in orders for military aircraft and parts, which shot up 32.4%. Demand for machinery, computers and fabricated metal products also roe. Still, the rebound may be temporary given all the problems facing the economy.
Courtesy:- ET dtd:- 26-03-09
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The sooner you plan to buy your dream home in your earning years, the better it is. ET Realty lists out some points to consider when you decide to do so...
The high economic growth in the past five years has brought about a big change in the life of the average person. Many youngsters are joining work early and earning high salaries. Many are either single or newly-married with lower financial commitments. The disposable income in their hands is higher. Home loans are relatively easy to get and mortgage rates are getting cheaper. So, the journey of wealth creation now starts in early 20s.
Arriving at the budget
Starting early provides you with the ability to finish off the first housing loan while you are still in your early 40s. This gives you the added luxury of buying a second house for investment purposes. However, to get all this right, requires proper planning. It requires long-term financial planning. Some questions you must address before buying a house:
What type of house do you need?
The kind of house you need will be based on a host of factors like proximity to schools, offices, shopping centres and medical facilities. Making a list of all the items you need in your house in the order of priority.
How will you fund the down payment?
Even though banks are funding a substantial pat of your housing costs, you will have to arrange for your contribution upfront from your personal savings.
This will be no less than 15%- 20% of the value of the house. You also need to cover at least a part of the closing costs. So, the first step towards owing your own house is saving up for down payment.
How big a loan should you avail?
If you are buying a house with borrowed funds, your home specifications will depend upon how much you can borrow and how much you can raise as down payment.
The mortgage lender will work out your loan eligibility in both scenarios. It pays to be prudent and limit your EMIs to no more than 35-40% of your net take-home pay if you do not have other loans.
What should be the loan tenure?
Another major decision you will have to make will be the length of loan tenure. Generally, the longer the loan, the costlier it becomes. A five year difference in the loan tenure could set you back by a couple of lakhs.
So, the general philosophy should be to pay back the loan as early as possible. If you have an early start, you will be in a position to settle your first loan and be eligible for another housing loan for your second house.
Courtesy:- ET dt:- 10-04-09
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Factor in expenses and related costs while drawing up a budget to buy your dream home. This way the repayment will be comfortable
Despite the gloom of job cuts and possibility of more recession, some people are busy realising their dream home. The mix of lower home loan rates and fall in property prices is infusing life into the real estate market.
Why are home loan rates falling?
The Reserve Bank of India (RBI) toggles key rates to infuse liquidity into the system, drain out excessive liquidity, control forces of inflation, increase economic activity and so on. A few months ago the inflation rate was at its peak. To rein in the soaring inflation umbers, the central bank hiked the cash reserve ratio (CRR) and repo rate. The CRR is the portion of deposits banks must keep aside with the RBI and the repo rate is the rate at which the RBI lends money to banks. Banks in turn hiked the rates and made loans for housing, cars and personal purposes dearer.
However, with the inflation numbers rubbing shoulders with the possibility of deflation, the RBI recently reversed its policy. It has pulled down the key rates to infse liquidity into the system and make borrowing cheaper.
How should you make a budget for a home?
A home is one of the most expensive purchases. And a home loan is a huge debt that the borrower is burdened with for 15 to 20 yeas. Hence, it is critical that you budget for it. Do not indulge in extravagant purchases that you may find hard to repay for. Borrow as little as you possibly can. It is not necessary to take 90 percent of the money from the lender when you can afford to raise some money from other sources. Make arrangements for the required margin money.
After paying your monthly EMIs, you must have sufficient funds to meet your regular monthly expenses, make small savings, set aside emergency funds and plan for long-term expenses. Unless imperative, avoid acquiring new debts.
Floating rate borrowers must keep rate fluctuations in mind before they borrow funds. Borrowing to the brink of your repayment capacity will put you in financial trouble, if rates go up. Keep a cushion that doesn't make your life miserable in case rates go upwards.
How does EMI work?
Equated monthly installments are used to pay both interest and principal each month. At the end of a specified number of years, the loan is repaid in fll. EMI comprises of two components - principal or the actual money borrowed and the interest towards it.
During the initial years of the loan repayment, a bigger chunk goes towards the interest component while the principal amount repaid is much less. Towards the end of the repayment tenure, mostly the principal component gets repaid.
In case of a pure fixed loan, the EMI due to the lender remains constant. In case of a floating rate loan, the EMI moves up or down depending on the bank's benchmark lending rate. When a lender increases the interest rate, either the tenure of the loan is increased (and EMI kpt constant) or EMI is increased (and tenure kept constant).
Planning for other expenses
Apart from making arrangements for down payment of 10 to 15 percent, home buyers incur additional expenses. This includes registration expenses, association funds, maintenance deposits, taxes due to the government, furnishing and woodwork etc.
Planning well ahead keeps you out of financial trouble.
Courtesy:- FT dt:- 05-04-09
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