Golf Estate will add to the luxury quotient in the developing real estate market, especially in Delhi and the NCR region

Posted on Friday, October 29, 2010 at 21:19 in Buy Property in India - 0 Comments - Post Comment - Link

M3M Group has launched its flagship project M3M Golf Estate and the sale is by ‘invitation’ only, according to the group’s spokesman. Spread over 75 acres, the project is located on Golf Course Extension Road, in Sector 65, Gurgaon, and is close to the Indira Gandhi International Airport. M3M Golf Estate boasts of luxury apartments built around a 9-hole reversible ‘in-city’ golf course designed by world famous architect, Graham Cooke. The architecture is a perfect synthesis of green eco-friendly green landscapes and cutting edge design. 
    The project is designed by Ramesh Khosla, principle architect of the renowned architects and design group, Arcop Group, Canada. The work develops around the concept of five elements and is imbued with deep spirituality. “The architecture bridges the gap between the painting on a canvas and the sculpture to recreate a lifestyle that treats nature with respect. M3M Golf Estate will be a show stopper in the millennium city, Gurgaon, with state-of-the-art ultraluxury apartments, modern amenities and an aesthetically designed golf course. The project will feature phenomenal outdoor and indoor living spaces, state-ofthe-art kitchens replete with fittings and high-end fixtures, Wi-Fi in all buildings, roof-top jogging tracks and a world-class club house,” Pankaj Bansal, director of M3M Group, says. 
    “Every flat overlooks the ‘pitch & putt’ golf course. When one invests in a luxury apartment at Golf Estate, one is actually investing in a wonderful, healthy, environment-friendly life for the entire family. Young children can be coached in golf to get a taste of this high-end lifestyle game, which is as rewarding as an education in English medium and is sure to accord a big advantage to young adults who can connect with the movers and shakers in their respective professional sectors. These are among the few advantages in investing in a home at Golf Estate,” Pankaj adds. 
    Basant Bansal, chairman and managing director of M3M Group, says: “We are proud to announce the launch of M3M Golf Estate, India’s first 7-star residences, in Gurgaon today. We have received appreciation from across the world for our project. It will redefine luxury, art and architecture. The project has been designed keeping in mind the taste, the class and the requirements of our target audience. The launch of M3M Golf Estate will add to the luxury quotient in the developing real estate market, especially in Delhi and the NCR region. We plan to add further projects across India in the coming months.” 
    M3M Golf Estate is first of its kind project in Gurgaon and provides a luxury option for a growing rank of expats, corporate honchos and HNIs. The project has received awards internationally as the “Best Upcoming Golfing Lifestyle Residences in India” in the US, Dubai and the UK.

Courtesy Times Property dtd:-23/10/2010

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Emaar bets big on a high-return India

Posted on Saturday, April 10, 2010 at 12:48 in Buy Property in India - 0 Comments - Post Comment - Link

Co To Raise Rs 3,500 Cr, Shift Focus To Residential Units

AN OFFICIAL of Dubaibased Emaar Properties says it will continue to focus on India as it offers the best investment opportunities across the 16 countries in which the real estate developer is present.
    “Given the robust domestic market and high economic growth rate, India will continue to give superior returns compared to other countries in the developing and developed nations, including the US and the UK,” the official Mohammad Alabbar, chairman of Dubai-based real estate firm Emaar Properties, told ET.
    Its Indian arm, known as Emaar-MGF plans to raise Rs 3,500 crore from the Indian capital market by way of a public issue. The company has received permission from the market regulator, Securities and Exchange Board of India (Sebi). The company has invested $4 billion abroad, of which $1 billion is in Indian joint venture, which is with Delhibased MGF Group.
    Mr Alabbar is here to evaluate the timing of the proposed IPO. “We have got Sebi’s approval and plan to launch the issue in an appropriate time,” he said. The company had made an attempt to enter the capital market in February 2008, but the issue had to be aborted in the wake of a market crash.
    On the impact of the financial crisis, which engulfed the Emirate in late 2009, Mr Alabbar said as demand for real estate had already dropped sharply following the crash of 2008, it hasn’t had much of impact. “It did result in a jolt as lenders hardened interest rates by about 1-1.5%, which has started softening now,” he said.
    Part of the proceeds from the proposed issue will be used to repay debt and facilitate other expansion plans, Sharvan Gupta, managing director of Emaar–MGF, said. The company currently has debt of Rs 5,000 crore, of which it plans to pay Rs 2,500 crore this year.
    Emaar-MGF, which is primarily known for its commercial projects, is looking to shift its focus on residential units this year.
    “Demand in the real estate sector in India has picked up and property developers will be able to attract buyers if they keep the price of residential units at a moderate level,” Mr Gupta said.
    Emaar-MGF currently has 30 million sq ft land under construction and plans to add another 15 million sq ft in the next one year. The firm plans to deliver at least 8 million sq feet by this year. Housing prices are still lower than the booming period of 2007, Mr Alabbar said.

Courtesy:- ET  dt:- 09-April-2010

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INVESTORS SPARED OF SPECIFIC NORMS

Posted on Saturday, March 6, 2010 at 18:50 in Buy Property in India - 0 Comments - Post Comment - Link

In the past few years, FDI worth billions of dollars came in as overseas investors subscribed to equity and quasi-equity products — often with put options — sold by real estate firms which were starved of bank finance. But a chunk of this inflow was based on an interpretation that the three-year lock-in on the FDI applied only to the ‘original’ amount brought in and not the full quantum of FDI in a project. Many investors took advantage of this: an offs**** fund which decided to put in, say, $25 million split the inflow, by first bringing in $5 million, the minimum amount, and then bringing in the balance $20 million subsequently. The understanding was that the lock-in applied only to $5 million and not $25 million. This flexibility in interpretation disappeared after the government clarified last year that the full amount, irrespective of whether the money comes in tranches, would be locked in for three years. The move, which came as a jolt to several foreign investors, paved the way for the more recent NCD route that’s catching on among local developers.

“There are advantages. First, there is no lock-in because the FII can sell the NCD as and when it wants. Second, the debt is secured against mortgage of assets, pledge of shares, etc. Third, unlike FDI, here the foreign investor can fund even those projects which are not FDI-compliant,” said a lawyer familiar with such debt-raising. For a project to receive foreign equity or FDI, it should not have less than 50,000 square meters of built-up area, among other things. “These conditions don’t come in the way when a foreign fund buys NCDs,” he said. Interestingly, such NCDs have also been issued by a leading NBFC which, like property firms, are restricted from tapping the ECB market.

According to a real estate fund manager, some foreign investors reluctant to increase their equity exposure post the downturn, prefer secured debts with a decent interest return. Sebi’s listing regulations extend to debentures that have been privately-placed; and, the NCDs can be listed even if the real estate company or a project specific special purpose vehicle floated by it is a private firm or an unlisted public entity.

Courtesy:- ET dt:- 04-Mar-2010

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Right of redemption

Posted on Tuesday, February 23, 2010 at 12:59 in Buy Property in India - 0 Comments - Post Comment - Link

Ashish Gupta explains what this right means and how it operates

    The Right of Redemption is an essential attribute of a mortgage. It is an inherent issue in itself. The mortgagor’s right to redemption is not merely a contractual right. It is a right given to him by the statute itself. The provisions concerned are contained under Section 60 of the Transfer of Property Act 1882. The property mortgaged is only a security for the payment of the money lent. The mortgagor is entitled to get his property back on payment of the principal and interest, after the expiry of the due date for the repayment of the mortgagee’s money. This right of the mortgagor is called the Right of Redemption.

    Section 60 the Transfer of Property Act reserves this right. The right cannot be fettered by any condition which prevents redemption. The right cannot be controlled by any contract to the contrary. According to the provisions of Section 60, at any time after the principal money has become due, and upon payment, a mortgagor has these rights.

Obligations of a mortgagee

The mortgagee has to return the mortgage deed and all documents relating to the mortgaged property which are in his possession.

    If the mortgagee is in possession of the mortgaged property, he has to hand over the possession He has to transfer the mortgaged property back to the mortgagor, at the cost of the mortgagor

    He has to execute and register an acknowledgement that any rights in derogation of the interest transferred to him have been extinguished

    The mortgagor can exercise the right before it is extinguished by the act of the parties or by the operation of law. The right can also be extinguished by a decree from a court. A mortgagor is not entitled to redemption before the mortgage money is due - before the time fixed for payment of the mortgage money. The rights are subject to the condition that the rights conferred have not been extinguished by acts of the parties or by a decree from a court.

    A mortgage deed may provide that the time fixed for payment of the principal money should be allowed to pass or in case no such time has been fixed, the mortgagee should be entitled to reasonable notice before payment of the money.

    It is to be noted that these statutory provisions will not apply to redemption of a portion of the mortgaged property. The provisions will not entitle a person interested in a part of the mortgaged property only to redeem just his own share, on payment of a proportionate part of the amount remaining due on the mortgage. The rights as conferred belong to and may be enforced by the mortgagor or by any encumbrancer.

    Where a mortgagor is entitled to redemption, on completion of the requisite conditions which enable a retransfer, he may ask the mortgagee to either retransfer the property to him, or assign the mortgage debt and transfer the mortgaged property to a third person. In such a case, the mortgagee will be bound to assign and transfer accordingly.

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SEOUL SEARCHING IN SOUTH DELHI

Posted on Tuesday, February 16, 2010 at 13:35 in Buy Property in India - 0 Comments - Post Comment - Link

Recently, in the wake of a very fruitful trip to India, South Korean President Lee Myung-bak explored the possibility of more investments by Korean companies into India. But, during his very hectic schedule here, he would have hardly been informed by anybody that the swelling expatriate community from his country is doing yeoman service in pushing rental scene in Delhi and NCR.

The list of South Korean companies with heavy investments in India include POSCOIndia (subsidiary of South Korean steel producer POSCO), real estate giant Maire Assets Global Investment, Parry Confectionary, MOBIS, Poss Delhi Steel Processing Centre, along with various manufacturing subsidiaries of LG, Hyundai and Samsung. As the number of South Korean firms heads northwards, the number of South Korean expatriates too is swelling commensurately.

If realty experts are to be believed, South Koreans have outnumbered all other nationalities, for the sheer numbers concerned. There would not be any good South Delhi colony where you will not find some South Korean families, they say. They are in large concentrations in places like Green Park, Shanti Niketan, Vasant Vihar, Uday Park, Defence Colony and other such areas.

According to Korean Association of India (KAI), there are close to 8,000 South Koreans in Delhi, and 2,000 more if you add the numbers in NCR. Importantly, the total number of KAI looks very impressive as apart from employees from South Korean firms and diplomatic staff, a large number of students have also come here for studies. “We get more requests from South Koreans for suitable rented accommodation than any other expatriate community,” says Devinder Gupta, chairman of realty advisory Century 21 India, adding, “They are extremely hard bargainers and fight for every penny. I can tell you from my long experience that they are the most demanding tenants.”

The entry of large Korean firms has also flooded other Indian cities with Koreans. Chennai has been home to many Koreans since the Hyundai plant opened there in 1995; but Delhi and Bangalore have become the new hubs, with Korean restaurants, shops and clubs opening up.

According to Anil Makhijani of South Delhi based Mak Associates, “They (South Koreans) prefer to stay in brand-new homes in South Delhi, Gurgaon, Noida and Greater Noida. They do not live in houses that were earlier occupied. They consider living in previously occupied house as ominous. Apart from brand-new homes, they ensure that the house they live in should have a bathtub. These are two most important requirements of Koreans.” Alimuddin Rafi Ahmed, MD of ILD Developers, says that they are trying to convince office bearers of KAI to use their good offices to tell their compatriots to live in ILD’s readyto-enter flats in Gurgaon and Sohna. “As Korean firms have many offices in these two NCR cities, they would find our flats very suitable. They are spacious and brand-new. We can provide them any other facility which they ask for,” he says. Some realty firms may also follow suit. KAI was formed around 50 years ago, when three Koreans moved to New Delhi after being released from prison in their war-torn country. Today, the association has nearly 8,000 in Delhi alone. KAI president, Kim Myung-Bo, recently took over from the original founding president, Hyuan, whose home is still Delhi. Unlike Hyuan, most Koreans in India are here only because of their jobs and leave after three or five years.

Chennai was the earliest hub of the Korean community in India, thanks to Hyundai’s decision to open factories there in 1995. Koreans concentrated largely in the Kilpauk township, which has acquired the nickname of “Little Korea” as a result. However, the centre of gravity shifted away from Chennai as later communities in Delhi and Bangalore experienced rapid growth after 2000. More than half of all expatriate Koreans in India live in New Delhi. Another fifth live in Mumbai, according to 2005 consular statistics. The community in Chennai has also continued to grow; by 2009, media estimates suggest that as many as 3,000 Koreans may be located in the Chennai area alone, up from about 700 in 2006.

Devinder Gupta says that as many South Korean restaurants have opened in the national capital and NCR, they prefer to live close to them. You would find many Korean restaurants in Green Park, Diplomatic Enclave, Gurgaon, Khel Gaon Marg and Kingsway Camp. In all these areas, South Korean restaurants like Gung, The Palace, Kumgang Gonie, K2 MGF Plaza, Aim Cafe are doing brisk business. South Korean families throng them. All these restaurants offer authentic Korean cuisine. Rakesh Tiwari, a tutor attached with Tutor Guru (a coaching institute), says that Koreans based in this part of the country are unique compared to other expatriates in the sense that many of them take the service of some Hindi tutor to teach them good Hindi. So, when they leave India, they have a fairly good knowledge of Hindi.

Another realty expert says that though expatriates from other countries are not coming to Delhi in the same numbers they used to until a couple of years ago, they (Koreans) are still arriving here without any pause or break. Of course, due to them, the rental scene is still very good.

Courtesy:- TOI dt:- 13-02-2010

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3 bedroom Multistory Apartments for sale Rs. 31,00,000 in Sec- 109, Gurgaon

Posted on Tuesday, February 2, 2010 at 16:42 in Buy Property in India - 0 Comments - Post Comment - Link

Type- Multistory Apartments

Sector 81, 82, 82A, 83, 84, 85, Gurgaon       

Price – Rs. 31,00,000*

Description – Life Style Homes, 3 bedroom Multistory Apartments for sale @ Rs. 31,00,000

 in Sec- 109, Gurgaon , new proposed one connecting to North West Delhi Walking distanc from proposed metro hub at the intersection of South Delhi- Gurgaon metro line and the Dwarka metro line Proposed ISBT project coming up in close vicinity.

Vatika India Next will be life beyond your imagination, where living will be more comfortable and approachable due to its strategic location and world class infrastructure.

A mega " Future Ready" integrated township project. Strategically located on the intersection of two 8 lane expressway's - the NH8, and the new proposed one connecting to North West Delhi Walking distance from proposed metro hub at the intersection of South Delhi- Gurgaon metro line and the Dwarka metro line Proposed ISBT project coming up in close vicinity. Spread through the prime sectors 82, 82A, 83, 84, 85.

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Real Estate Status In HYDERABAD

Posted on Monday, January 25, 2010 at 12:12 in Buy Property in India - 0 Comments - Post Comment - Link

An apartment, admeasuring 1,198 sq ft, was sold in Gachibowli for around Rs 36,00,000. The apartment is located in a gated community being constructed by a reputed developer. It commanded a per sq ft rate of approximately Rs 3,000. Gachibowli is located close to the IT Hub in and around Madhapur and has, in the last few years, seen some residential activities in support of the growing commercial office space in the location. While capital values for midsegment apartments had remained stagnant over most of last year as a result of the economic slowdown, values have seen a moderate increase of 4% in the last quarter of 2009. This is largely due to the strengthening of demand in the region as economic stability returns to the Indian market.

A NEW DAWN IN MEERUT

Posted on Tuesday, December 29, 2009 at 16:39 in Buy Property in India - 0 Comments - Post Comment - Link

Deepa Gupta

The Delhi-Meerut Expressway has been conceptually finalized and its alignment is underway the project is slated to be completed by 2014. While the Upper Ganga Canal Expressway will link Delhi to Dehradun all along the canal from Purkazi to Mussoorie, some of the other highlights in the project are a new inter-state bus terminal, a multi-speciality hospital, project to widen roads, an international airport in the city, and a gas pipeline project to supply cooking gas to houses. The district magistrate (DM) of Meerut, Bhuvnesh Kumar, announced this while he was speaking at Times Development Conclave-09, the first of its kind in Meerut, which was organized by The Times of India in association with Shobhit University.

Kumar, who was answering every question thrown at him by the residents of the city, said, Meerut has great potential in housing, roads, infrastructure, urban transport, drinking water, solid-waste management and the like. He tried to assure the audience that the city would be one of the most sought-after regions in the NCR.

Since power has been a major hurdle to the progress of the city in the last three decades, it was an area of great concern. The next four years will see an additional 15,000 megawatt increase in the power generation capacity for UP, and once the Anapara C and D units also start production, the situation will improve majorly, he assured the audience.

Bsides Kumar, who inaugurated the conclave, others present on the occasion were the pro-chancellor of Shobhit University, Kunwar Vijendra Shekhar, assistant commissioner of UP Awas Vikas Parishad, Vimal Kumar Sharma, vice-chairman of Meerut Development Authority, Ram Naval Singh, and chief development officer of Meerut, Pranjal Yadav.

The coclave was aimed at bringing together the policy makers and service providers from private sectors on a common platform along with the citizens.

Kunwar Vijendra Shekhar talked about the role of private players in quality education. Speaking on the role of education in the economy, he stressed upon the need to educate the youth in a way that they could fit into the economic structure.

Ram Naval Singh brought to light many projects undertaken by MDA some of them are already underway while others will soon start. The middle-income group wants to reside here for the simple reason that the cost of developed land in Meerut is much less than that in Gurgaon or elsewhere. As a result, nearly 100 developers are ready to projects launch their in the city, he said.

He further stated that MDA had developed a comprehensive mobility plan for faster connectivity of a national character for Meerut.

Courtesy:- Times Property dt:- 26/12/2009

DIRECT TAX CODE MAY SPARE HOME LOANS

Posted on Sunday, December 27, 2009 at 15:01 in Buy Property in India - 0 Comments - Post Comment - Link

Tax Benefits Likely To Continue To Make Code Amenable To ‘Aam Aadmi’

Deepshikha Sikarwar NEW DELHI

The government may modify the draft direct tax code to retain tax shelters on interest and principal repayments for home loans to make the proposed new code more attractive for the average Indian, a finance ministry official told ET.

The proposed direct taxes code, which has been unveiled for public debate and is due to become operational from April 2011, does not provide tax incentives to loan-funded house purchases that are for personal use.

At present, taxpayers are allowed to deduct from their income the interest paid on home loans to a maximum of Rs 1.5 lakh every year. In addition, the repayment of the principal amount is also allowed to be included within the rebate available under section 80C, which has a maximum limit of Rs 1 lakh.

The draft code, billed as a comprehensive reform of the direct taxes regime, has suggested increasing the exemption limit under section 80C to Rs 3 lakh, but the list of eligible expenditure/savings does not include the principal payment. The code also restricts the interest deduction only to in respect houses rented out and where such income is included in the income of the assessee.

At present, if a home buyer in the highest 30% tax slab were to avail the maximum tax exemption available on home loans then government loses over Rs 77,000 in tax.

The planned move to discontinue tax benefits for housing has faced widespread criticism and the finance ministry official said “we are looking at provisions (in the direct taxes code) that concern common man directly, including tax incentives to housing.”

Finance minister Pranab Mukherjee has already indicated his willingness to review the contentious provisions in the code, observing, “I have laid a certain proposal in the form of a direct tax code. But it is not the Bhagwad Gita and it cannot be said that it cannot be changed.” Mr Mukherjee has held discussions with senior officials of the apex direct tax body, the Central Board of Direct Taxes, on the changes to be carried out in the code to make it widely accepted.

The UPA government has lined up reform of both the indirect and direct tax structures that are laden with a plethora of exemptions. It plans to implement a comprehensive Goods and Services tax on the indirect taxes side and replace the decades-old income tax law with the new direct taxes code. India has a tax-to-GDP ratio of 11% at the central government level and about 16% including state and municipal taxes. This is well below the average 35.8% for OECD countries in 2007.

Tax reforms are aimed at increasing compliance and widening the tax base by lowering rates and removing exemptions. The government is hoping to redraft the new code quickly so that it can be placed in Parliament in the Budget session itself.

HEADING BACK HOME

At present, taxpayers are allowed to deduct from their income the interest paid on home loans to a maximum of Rs 1.5 lakh

Repayment of principal amount is also allowed to be included within the rebate available under section 80C, which has a maximum limit of Rs 1 lakh

The proposed direct taxes code has not provided tax incentives to loan-funded houses that are for personal use

The draft direct taxes code has suggested increasing the exemption limit under section 80C to Rs 3 lakh but the list of eligible expenditure/ savings does not include the principal amount

Finance minister Pranab Mukherjee has indicated that his ministry is open to reviewing the contentious provisions in new direct taxes code

Courtesy:- ET dt:- 26/12/2009

Why buy property now?

Posted on Saturday, December 19, 2009 at 16:12 in Buy Property in India - 0 Comments - Post Comment - Link

Recession, stock market crash, and job uncertainty the economic climate almost turned ‘consumer sentiment’ into a household term. Be it a stock broker, car dealer or real estate agent, consumer sentiment is a yardstick. So, what makes consumer sentiment relevant in the realty sector? Would a just-married couple analyze consumer sentiment in the market before going in for a flat they now need? Most significantly, how relevant is this factor in the case of a property investment?

First-time buyer perspective   

As a city grows and the population increases, owning a home becomes a basic necessity. Rents keep increasing in the central areas. As the rent one pays to stay in a locality with given attributes keeps increasing, there will come a time when the amount being paid as rent will add up to a home loan EMI. In other words, it would make more economic sense to buy a home and pay EMIs than pay a considerable amount as monthly rent.

Over the years, a home turns into more than an asset. It grows into a legacy. It is to most an inheritance they gift their children. ‘Creation of asset’ in this context is different from building an equity investment portfolio. For a first-time buyer, the priorities need to be budget and location. The flat or villa has no meaning as an asset class in the near term as any value assigned is only of academic interest. It is bought to live in and assumes significance as an investment only many years later. In the near term, it is an asset that cannot be cashed. Therefore, it makes more sense to buy in a correction phase than when the ‘consumer sentiment’ pushes the market, and prices, up.

Investor perspective   

For high net worth individuals, property is an asset class that adds stability to a portfolio. It is also a safe avenue to park surplus funds in. Property investments pay handsome capital returns over a long term. Also, capital gains from residential property investments can be reinvested in property to avoid the tax in the hands of the investor. This apart, property yields definite rental returns that can be used to invest in other avenues. The rental income can, in cases of a potential commercial property, be discounted for finance.

Range of options   

For many years, especially through the last decade, the concept of ‘affordable housing’ had been dismissed as unfeasible. In the recent times, the realty sector has discovered this market to be huge and is tapping its potential. Thanks to road connectivity being augmented and the infrastructure development in the suburbs, affordable housing is here to stay as a significant part of the realty market. This segment has broadened the range of options available to endusers.

For investors, gated communities and upper end apartments are attractively poised at the moment. As multi-national organisations begin expansions, these segments will find many takers.

As in the case of any investment option, buying when the prices have been through a correction yields the best returns.

Courtesy:- Times property dt:- 12/12/2009

Unitech And Residential And Commercial Property

Posted on Tuesday, November 17, 2009 at 15:26 in Buy Property in India - 0 Comments - Post Comment - Link

Unitech has had positive newsflow recently with the government approving Telenor’s (a partner in telecom venture) proposal to hike the stake in Unitech  Wireless to 74 per cent. The company has had a good first seven months (March to September) going by the response to its launches aggregating to 21.30 mnsqft of residential and commercial property. The company has managed to book sales Rs 4,000 crore from the sale of 10.11 mnsqft. It plans to launch about 30 mnsqft and achieve about 20 mnsqft  of pre-sales in this fiscal, says an analysts. Of the past projects which total an area of 22.31 mnsqft, the company has delivered about a fifth and expects to complete delivery of the rest by March 2011. Improved cash flow from the sale of hotels and plots (Rs 940 crore), two QIPs (Rs 4,400 crore) and  Rs 386 crore from Unitech Wireless have helped bring down debt levels to about 0.6 times from 1.7 times last year.

Like DLF, the company is eyeing the affordable housing segment and has launched projects under the Unihomes brand catering to budgets between Rs 10-30 lakh range. After the sale of about 900 units at its Unihomes project in Noida, the company is planning to launch more apartments under this brand. Analysts estimate that the company is likely  to have a strong second quarter on the back of higher project and asset sales. Considering the recent spurt in sales at its new launches and balance sheet deleveraging is already factored into the current price and it is trading at a premium to its NAV, expect little upside to flow through in the current fiscal.

REALTY BACK IN RECKONING AS FIIS CUT BLUE-CHIP STAKE

Posted on Friday, October 30, 2009 at 12:43 in Buy Property in India - 0 Comments - Post Comment - Link

Attractive Valuations A Big Pull Factor; Agrochem, Breweries & Mining Also Shine

DLF, Unitech and HDIL are the latest darlings of foreign funds expecting a quick buck, even as they slash holdings in companies such as Infosys Technologies and infrastructure builders due to concerns about order flows and high valuations, a study of latest filings shows.

The sudden fancy for real estate among those overseas funds were probably due to the surge in fund raisings by those debt-ridden companies in the recent bull run when most of them sold shares at less than a third of their peak 2007-08 valuations which overseas investors found attractive. “With interest rates expected to remain benign and stable, some dedicated funds might have bought on hopes of a significant upswing in high-beta sectors like realty,” said Tata Asset Management CEO Ved Prakash Chaturvedi. High beta stocks are those which rise or fall more than the benchmark indexes.

As of September 30, 2009, FIIs owned 25% of the aggregate equity capital of 36 realty companies, including industry leaders like DLF, Unitech, Indiabulls Real Estate and HDIL. That is higher than the previous year’s 9.6% and the year before’s 10.3%. Indian companies, including Unitech and DLF, have so far raised $12.3 billion through share sale this year and another $17.4 billion may be raised by fiscal year-end exploiting a record stock market rally which saw the benchmark indices more than double from their troughs earlier this year.

It was not just one sector that foreign funds who have invested $14.4 billion in the current calendar year so far have favored, but also raised stakes in sectors such as agrochemical, a key beneficiary in an agrarian economy like India, breweries which benefit from rising incomes in urban centres, and mining. Last year they pulled out $12 billion.

Overseas funds own 25.6%, 18.6% and 17.9%, respectively, in agrochemical, breweries and mining sectors. Companies such as United Phosphorus, United Spirits, Gujarat NRE Coke and Sesa Goa have large foreign holdings.

But the once that were favoured in the last bull rally — technology, capital goods, cement and retail — aren’t lucky this time. Combined FII holdings in all the listed IT companies fell to 12.1% as on September 30, 2009, compared to 15.6% as on September 30, 2008. Their exposure in capital good sector fell to 9.9% from 12.1% and to 15.1% from 18.5% in retail space. “FIIs have been underweight on IT companies due to outsourcing concerns,” said Centrum Broking MD Devesh Kumar. “Cement companies are adding new capacities and investors would wait for demand to pick up, which would also depend on the pace of infrastructure development in the country.”

International companies stung by the economic slowdown have been cutting their spend on technology which the Indian companies depend upon. SAP, Europe’s biggest business software producer, on Wednesday cut revenue forecast for the year as companies held on to purse strings.

Indian infrastructure companies are also showing delays in executing orders and their valuations at more than 25 times in some cases such as Larsen & Toubro seem to have run ahead of themselves.

Courtesy:- ET dt:- 29-10-2009

SECOND HOMES

Posted on Wednesday, October 21, 2009 at 17:08 in Buy Property in India - 0 Comments - Post Comment - Link

Second homes, or vacation homes and flats, are emerging as lucrative investment options in real estate. These homes and flats , which generally come in villa formats, provide the essence of “a home away from home”, and can provide options for weekend getaway for the family. While scouting for real estate projects offering second home housing, the primary criterion is always the location. Its always beneficial if the house that you buy is located in a destination which has an aesthetic quotient, and hence has the potential to attract visitors. Secondly, it is imperative to understand the real estate or property development plan of the township in which you intend to buy the house and flats. The villa should be associated with adequate plot areas, and individual villas should be adequately spaced out within the township, to ensure privacy and serenity for all residents. Basic amenities like water, power and medical facilities should be provided. It is also essential to have cognizance whether the property developer has all clearances in place so that he can adhere to specified timelines. Some real estate developers do offer a rent back scheme, wherein you shall be guaranteed a minimum period of stay, and for the balance period, the house shall be rented out, generating additional rental income. In such cases, it is advisable to read the fine prints of the agreement, do a check on the prevailing rental rates and the premium you envisage for the township development, and also the tenants who shall be considered.

ORGANIC DECOR

Posted on Monday, October 5, 2009 at 11:57 in Buy Property in India - 0 Comments - Post Comment - Link

There are many ways to make every room in your home a little greener without spending much or detracting from your style. One of the biggest contributors to the pollution is paint. Choose paints that no or low volatile organic compounds, or VOCs. Go less toxic by choosing furniture with natural finishes and organic materials. The best option is to recycle furniture and give it a makeover. You could also use reclaimed wood, but it could prove to be a little expensive. Fabrics are also going green. One hundred percent cotton is a good choice, as is hemp, silk, linen and wool. Bamboo fabric is the latest addition to the list. Patterns inspired by nature are in demand. Bold floral, leaf designs, and bright colors are all available in natural fabrics. Opt for organic rugs and carpets. For eco friendly flooring options cork and bamboo flooring are excellent choices. They not only look terrific but are also sustainable in the long run.

Courtesy:- ET Realty dt:- 02-10-09

CHEAPER HOMES DO THE TRICK

Posted on Friday, August 28, 2009 at 05:10 in Buy Property in India - 0 Comments - Post Comment - Link

Locals demand affordable apartments, NRIs focus on premium segment

The Realty sector is alive and kicking in the temple town of Thrissur, considered the cultural capital of Kerala. Despite the economic downturn, sales of flats and villas have not been hit as much as in several other places in the country.

After tiding over the recessionary phase, the builders are now drawing up plans for new projects in and around Thrissur, including Guruvayur, which is around 25 km from the city. Guruvayur is famous for the Sri Krishna Temple and has devotees from all over the country flocking to it.

Thrissur is home to three banks — Catholic Syrian Bank, Dhanalakshmi Bank and South Indian Bank and several private chit fund companies. It is also the hub of gold jewellery manufacturing in the state. Many prominent jewellers have their roots in Thrissur.

The suburban areas of Thrissur are also fast developing. A new IT park, a branch of Kochi Infopark, is coming up at Koratty, half an hour drive from the city. It also has the advantage of proximity to Cochin International Airport, which is 20 km away from Koratty.

The demand for premium apartments (above Rs 60 lakh) is mostly from NRIs who want to settle in Thrissur. The local demand is for cheaper apartments — ranging from Rs 20-25 lakh. As compared to 2008, the square foot rates have shown a rise.

The builders argue that the rate increase is more due to rise in the cost of raw materials. According to Mr Varghese, vice-president (marketing) of Skyline Builders, the cost of cement, steel and the wages of labourers have increased over the last one year. “Last year, before the slowdown, our average rates in Thrissur were Rs 1,450 per sq ft. Now it is around Rs 1,000 higher,” he said. Skyline completed two projects during 2008. In the last 20 years it has completed 14 projects. Mr Varghese said land cost has more or less stabilised after the boom period in 2008. “Instead of buying land at fancy prices, we market our projects in such a way that it becomes a destination for the buyers. Our apartment project at Gosayikunnu on the outskirts of Thrissur was sold that way,” he said.

Last year, during the recessionary phase, several builders adopted measures such as downsizing the apartment size to create demand. Shobha Developers was one prominent builder to adopt the strategy for its 600-apartment complex at Puzhakkal on the way to Guruvayur.

Without raising the sq ft rates, Shobha Builders reduced the size of the apartments, which naturally reduced the prices for the apartments. The size of the proposed flats was reduced from 4,000 and 3,000 sq ft to 2,000 and 2,500 sqft. However, the square ft rate remained at Rs 3,000. The company sources said this resulted in higher sales during the time of recession. The company has sold around 25 flats by adopting this strategy. It has so far sold 40% of its project. The prime location in Thrissur remains the Swaraj Round, its main road. Any project within 1-2 km of the round commands a premium price. Other locations have sprung up in the fast developing city, which are getting good prices. Thrissur Builders, which have around 20 projects in Thrissur, has four ongoing projects at several locations. The projects in the area near North bus stand and Viyyur are getting higher prices now. According to Joshey, marketing officer of Thrissur Builders, the demand now is for cheaper apartments. ``Our apartment projects at West Fort and Kanimangalam have prices in the range of Rs 20 to 25 lakh. The rates hover around Rs 2000 per sq ft,’’ he said. The company’s villas coming up at Olari are priced higher at Rs 3000 per sq ft.

Many builders are setting up projects in Guruvayur. Earlier, the customers used to book the flat without even looking at the project. That has changed now and most of the people now come and see the construction before booking. Shantimadom Builders has several villas in Guruvayur.

Courtesy:- ET dt:- 23-08-09

Lodha Developers on fund-raising spree

Posted on Friday, August 21, 2009 at 05:42 in Buy Property in India - 0 Comments - Post Comment - Link

Former Old Lane Fund Partners Buy 26% Stake in Dombivli Project For $25 Million

Mumbai-based Lodha Developers is tying up funds from private equities (PE) at the project level ahead of its Rs 2,500-Rs 3,000 crore planned initial public offer (IPO).

Few former Old Lane Fund partners have made a $25-million investment for 26% stake in the group’s 115-acre housing and office complex in suburban Dombivli in Mumbai.

The investment values the project, which falls under its CASA brand for mid-income housing, at Rs 460 crore (Rs 4 crore per acre).

“In terms of this , the residential rates for our Dombivalli project will range between Rs 2500-Rs 3000 per sq foot. We are also in continuous talks with various funds who are interested in investments at the project level,” said Abhisheck Lodha, director, Lodha Group.

None of the PE investors from Old Lane, who have formed a new $400 million for realty and infrastructure, were available for comment.

With the latest private equity deal, Lodha Developers now has private equity investments to the tune of $600 million in various special purpose vehicles from the likes of Duetsche Bank, HDFC Realty’s international fund and ICICI Ventures. “The IPO may improve the valuations of the Lodha’s Hyderabad project in which the fund has invested resulting in higher prices for the sale of residential units in the complex,” says senior fund manager at HDFC Realty.

An official in the Lodha group, who did not wish to be named, said the company is expecting a valuation of up to Rs 20,000 crore at the time of tapping the capital markets.

But analysts say a lot will depend on whether the appetite for real estate returns among investors. Now the IPO which is expected to hit the market by late October-November, could provide an exit route particularly for Duetsche Bank since the deal was structured around convertible debentures. Servicing these investments was looking difficult, as a slump in the property market had receded the hopes of meeting the pre-decided returns on them. The company has appointed Enam Securities and JP Morgan as its merchant bankers.

Courtesy:- ET dt:- 20-08-09

DLF TO SELL HALF ITS HOTEL PLOTS, WIND POWER BIZ

Posted on Friday, July 17, 2009 at 05:59 in Buy Property in India - 0 Comments - Post Comment - Link

DLF, the country’s largest property developer, today said it would raise Rs 1,900 crore through the sale of hotel plots and its wind power business by the fiscal-end.

“The sale of our land parcels has already fetched us Rs 1,000 crore and we expect another Rs 1,000 crore in the coming months. Talks for selling our wind power business are also on track and we should be able to get Rs 900 crore through its sale,” Rajeev Talwar, group executive director said .

DLF has 40 hotel plots, of which 21 have been put on the block for sale to raise money. The company plans to raise Rs 5,500 crore by the end of this fiscal through the sale of non-core businesses, including land parcels.

The company had accumulated debt of over Rs 14,000 crore by March 31. It is repaying Rs 600-1,000 crore every month, to reduce the debt by half by the fiscal-end.

Talwar, while speaking at a CII conference, told reporters DLF had sold over 2,500 housing units in the first quarter of the current fiscal and demand had picked up in the past few months. “The measures taken by the government, such as reduction in the home loan rates, has helped developers sell their projects,” he added.

DLF has reduced the selling prices of their projects by 25 per cent in recent months and will not hike prices in the near future. “We will stick to our current prices, as we want to support the government’s attempt to provide homes to more and more people,” Talwar said.

Courtesy:- BS dt:- 15-07-09

MAKING RENTALS AFFORDABLE

Posted on Thursday, July 2, 2009 at 05:58 in Buy Property in India - 0 Comments - Post Comment - Link

After affordable property comes rental housing, which seeks to serve two categories — the migrants and the not-so-creditworthy populace, says VANDANA RAMNANI

After combating the economic slowdown for months, the developers finally zeroed on a fast moving realty product - affordable housing. Eureka! The volume of sales shot up by25 per cent. The success with the right product mix at the correct price point prompted them to continue the good work at the bottom of the realty pyramid to revive the much-needed cash flows. The task this time round is enormous — to work in tandem with the government to decongest the main cities and halt the proliferation of slums through the mechanism of rental housing.

Taking the lead is Housing A Development and Infrastructure Limited (HDIL) and Mumbai Metropolitan Region Development Authority (MMRDA).The two have come together combating the economic slowdown for months, the developers finally zeroed together to build Mumbai’s biggest rental housing project, perhaps the first in the country. Both entities will develop 525 acres of land in Virar and build rental houses for about 43,000 low-income families. HDIL will also be free to build another 90,000 houses that it can sell at market price to recover costs. The first 10,000 units will be ready by March 2011.Each house will be of 160 sq ft carpet area and will be built in self-contained units in 14 storied quake-resistant buildings. The rental houses will be allotted to interested candidates through a lottery system. The monthly rent will range from Rs 800-Rs 1,500, depending on the location.

Realty experts point out that rental housing schemes can be replicated in other cities too, especially in areas where migration takes place in large numbers both in the case of students and labourers. The scheme can also go a long way in serving two categories — the migratory and the not-so-creditworthy populace. Besides, it can only be successful through the private-public partnership model as the resources to sustain the huge volumes are available only in the public domain.

Incentives can ensure its success

According to Sanjay Dutt, CEO (Business) JLLM, it all started with new launches in the affordable segment followed by low-cost housing projects launched by some developers. This created vibrancy in the realty market.

The rental housing scheme could be launched in Mumbai because there are benefits unique to Maharashtra. There is a significant population that migrates to the state and can not afford Mumbai rentals. This scheme will benefit the lower income and the lower mid-income group.

Major metro cities such as Bangalore, Pune, Chennai and Kolkata are hubs for progressive states and absorb about 2030 per cent of the migrant populace. The government facilitates land and creates a pull through incentive structures. One will find more private developers taking advantage of such opportunities if the government takes the lead in terms of incentives and facilitation. The rental housing scheme is a pilot project and if regulated the right way, it can be a huge success, adds Dutt.

PPP the right engine to sustain high volumes

Adds Paresh Chawla, Associate Director, Real Estate Practise, E & Y, the intention of the Maharashtra Government through this scheme is to provide land and housing structures to be put in place by the private developers where migrant labour can stay. If any other state government decides to plan something of this magnitude, it can be successful only through public-private partnerships, necessary to sustain the volumes.

This initiative is particularly useful for providing temporary accommodation to the people who get displaced during redevelopment or slum rehabilitation projects.

Arrests proliferation of slums

The concept can work only in cities where the migrant population is large and in townships or cities where a huge amount of labour is expected. It can be set up in states where there are general manufacturing industries such as Gujarat, the outskirts of Delhi and Kolkata. Rental housing townships help in absorbing labour better and arrest the volume of slums by providing alternate accommodation.

Concurs Amit Bhatt, Town Planner, “The concept is good. It is likely to be successful in magnet towns where people come to reside on a temporary basis, primarily because of a job or to acquire good quality education. This is a new trend and a fantastic opportunity to be tapped. This can be successful only through a public private partnership model as resources for a large scale project are available only in the public domain.”

Serves the not-so credit worthy

In the current market scenario, developers need a mechanism to generate revenue and hence the emphasis on affordable housing. Rental housing goes a step further. It not only offers immense opportunities but also brings in the much needed revenue, he adds.

Dr P S Rana, former chairman, HUDCO, is of the view that rental housing is a must for two sections of society the migratory and the not-so credit worthy populace who cannot get a loan from financial institutions. The large community of migrants, those with transferable jobs, migrant workers and students need affordable renting accommodation.

If fiscal incentives on rental income are provided, fresh rental stock can emerge for this segment as well.

The government can con tribute by providing fiscal incentives, increase the supply of service land through proper rules and decontrol, he adds.

Engagement a must

However, it is essential that realty players do not go on a rental housing overdrive. Proper planning, consent and engagement of the populace their product will serve is important.

Points out Rumjum Chatterjee, Managing Director, Capacity Building Division, Feedback Ventures, “When we relocate people, they need not be bundled 40 kms away as their livelihood is impacted.

Planning, consent and engagement is necessary to ensure that they are not worse off than before. It is important to ensure that rental housing seeks to improve their lives and not the other way round.”

Courtesy:- HT dt:- 27-06-09

ROAD TO RECOVERY

Posted on Monday, June 29, 2009 at 05:49 in Buy Property in India - 0 Comments - Post Comment - Link

ROAD TO RECOVERY

After a long lull, housing sector is back in business, writes Sanjeev Sinha

Spurred by price corrections, new launches, lowering of interest rates, increase in sales inquiries and, more importantly, the newfound mantra of ‘affordable housing’, the real estate industry has started showing signs of recovery. Industry body Assocham has gone to the extent of saying that the real estate recovery is possible in the coming three months.

A recent Assocham Business Barometer (ABB) survey has found that anticipating strong policy measures for the real estate in the forthcoming Budget, embattled realty majors see positive signs of recovery taking place within the next three months as affordable housing projects rev up demand and improved cash flows address their liquidity concerns.

As per the survey, a whopping 92% of the respondent  developers considered affordable housing  as the most dominating segment to s**** up the demand in real estate sector. And the policy actions supplementing the robust demand in the housing sector are likely to hold the key for a speedy recovery phase in the sector.

Although the findings of this survey may seem to be too optimistic, particularly in view of the prolonged slowdown in the industry, but taking the current positive signs in the property market into account, both industry majors as well as experts feel the real estate recovery is not a distant dream. And they have ample reasons to believe this.

Firstly, after a gap of more than a year, some real ‘actions’ are being witnessed in the realty market, including the high-profile launches of some major projects coupled with increased sales inquiries. Along with that, some realty majors are also said to have recorded an overwhelming response for their upcoming projects. For instance, the Jaypee group claims to have booked all the 3300 apartments of Jaypee Greens Aman, its new residential project in Noida, within 24 hours of their launch, while Capital Greens, DLF’s first residential project in Delhi, is claimed to have showed bookings of 1,400 flats on the first day itself. Such instances only prove that buyers and strategic investors are once again warming up to the sector, though in a restricted manner. Secondly, the Indian economy recorded a better-than-expected growth rate of 6.7% in 2008-09. “The GDP growth rate, clocked in tumultuous times of global financial crisis, lends credibility to the presence of real domestic demand and consumption continuing to fuel the economy, though albeit at a reduced growth rate,” says Neeraj Bansal, associate director - advisory services, KPMG.

Thirdly, sensing a near-term economic recovery and, resultantly, expecting the realty sector to outperform other sectors in the months to come, fund managers are reposing their faith in real estate. This explains why in the month of April, mutual fund houses increased their exposure in the realty sector to Rs 308.16 crore as against Rs 98.76 crore in March, translating into a whopping 212.03% rise in the exposure.

Fourthly, there is a renewed faith of overseas investors also, stemming from the series of steps taken by developers to improve their financial position.” Unitech has, for instance, cut debt by Rs 2,000 crore while DLF has repaid Rs 1,700 crore of loans in the past year. And similar is the case with lots of other large and mediumsized developers,” says Bansal.

Fifthly, home loan disbursements by the country’s top lenders, which signal the actual demand for homes, is also improving. HDFC saw its fourth quarter disbursals going up by 17.5% at Rs 12,400 crore, while LIC Housing saw an increase of 42% and 22% in March and in Q4, respectively. Moreover, a general softening of interest rates has also helped developers cut their borrowing costs by as much as 300 basis points.

However, more than anything else, affordable housing  is believed to have currently taken the industry by storm. “Affordable housing will play a significant role in the real estate recovery over the next few months as developers are now connecting with ‘real buyers’ for the ‘real prices’ and are pricing projects more competitively,” says Bansal.

Brotin Banerjee, MD & CEO, Tata Housing, agrees. “The demand for new homes has picked up in the second quarter of 2009 from the previous one. Increasing interest in affordable and low-cost housing is widely expected to help India’s real estate market make a recovery in 2009 to 2010,” he says.

Another important thing is that the government intends to focus on the construction of affordable housing for the poor and middle class people across the country by involving the private sector, and has assured that emphasis will be placed to facilitate the flow of institutional funds for affordable housing.

However, apart from a combination of all these factors, the industry needs further stimulus to move ahead on the road to recovery. “The pace of introduction and implementation of favourable government measures, ‘better pricing’ and ‘innovative product & schemes’ by developers supported by ‘lowered interest rates’ by banks will chart the course towards recovery in its true sense. An overall improvement in investment climate is essential for recovery,” says Bansal.

Courtesy:- TOI dt:- 13^th June 2009