Friday, May 30, 2008

Dream Houses

Aniruddha Deshpande is aiming to create a new kind of township. Sucheta Dalal and Debashis Basu met him in Pune and heard his interesting plans

A few kilometres from Pune, a new township called Amanora is taking shape. It is the brainchild of Aniruddha Deshpande, a man who was known for a long time as someone who brought Motocross to India in the 1980s and a regular participant and winner of the gruelling Himalayan car rally. Given this background, it should be no surprise that his plans for Amanora are Himalayan in scale. It is a Rs4,500 crore, fully wired, intelligent township that will be controlled by a central data system. All homes will be IT-enabled to monitor everything from the daily vendor system to the security. Every resident will have a portal in the Intranet that will be connected to various vendors. Explains Deshpande: “You can order anything from any shop or any hotel in the township through this portal. If you are going out of town and need less milk, then some simple clicks on a smart screen will allow you to change your requirement from, say two litres to one. The laundry, the housekeeping and any other supplier will be connected to this portal.”

Deshpande calculates that one needs 68 such functions or verticals to run a township and the cost of such a data-centre would be Rs100 crore. It is not viable to spend this amount for constructing a few thousand houses. But then Deshpande is not setting up a few thousand houses; he is creating a township of 30,000 at which the data-centre becomes very profitable. The centre will be set up by a township management company called City Development Corporation, which is controlled by Deshpande.

In fact, the Amanora concept changes the relationship between the developer and the buyer. You don’t get to buy an Amanora property; you lease it for 999 years. Will this be acceptable to buyers? Deshpande’s rationale is: “We will change the customer into a citizen. So we don’t sell you the apartment; we give it to you on lease and we provide you water, electricity, education, healthcare, a marketplace, entertainment, gardens, security – everything that you need. We will be able to offer this at a much lower cost and much higher quality because we will be able to negotiate better terms as a bulk buyer of water, electricity and everything else from the suppliers.” He proposes many novel solutions to ensure that Amanora’s infrastructure remains top-class. One such is a water bank or dam, which he admits is nowhere near being accepted by the government. But, he says, “The government is short of money for irrigation projects. We are willing to spend money to dam the water and sell it to the Pune Municipal Corporation. We want to be able to sell the surplus water at the rate that the irrigation department sets for water.”

How did Deshpande come into this business and develop these novel ideas, when he is neither an architect nor an engineer? It was – as happens with most entrepreneurs – a matter of chance. “Both my parents are doctors and nobody in my family is into business. I have been only in the real estate business so far, except for an automobile dealership that I had for a few years till 1988.” That too happened because Deshpande was connected to automobiles in an indirect way. “I was organising motor sports in India and was vice-chairman of the Federation of Motor Sports in India for a long time, and then of the Pune Automotive Racing Association. I also used to race and won the Himalayan car rally in 1980-81. I also started the Motocross here in Pune and we even hosted the world championship at the Nehru Stadium. I was the executive chairman of that body for a long time – almost eight-nine years. We had collected Rs35 lakh, which was a big amount for a sports body in 1988.” After the world championship was over, there was a lot of infighting and so Deshpande quit. As soon as he resigned in 1988, he stumbled into the real estate business quite by chance.

Deshpande had a friend who had a 5,000 sq ft plot in Bibwewadi in Pune. He asked the friend whether his father would let him develop the plot. He replied, “I don’t think he will, because he is looking for a well-established developer.” Deshpande said, “If we tie up with an architect and a developer, will he give it to me?” This architect was a member of the racing association. Deshpande also knew a developer who had done construction for 10 years. “The idea was that the we would take two flats and the developer would sell the remaining six apartments. All of us went to meet my friend’s father.” He told them, “If you three are going to do it, then I am willing to take the risk; I will give you my plot.” The hitch was that the trio had to make a down payment of Rs120,000 but did not have any money. They suggested that bookings would be announced in six to eight months and once the cash was raised, they would hand over Rs120,00 to the plot-owner. The owner agreed. They completed the project in six months and Deshpande has never looked back ever since. “We did 10 projects in that area alone. Many people saw the quality of the project and approached us with their plots. All the plots were the same 5,000-sq-ft size. That was how I got into this business. It was by default. Nothing was planned until after I resigned from the Pune Automotive Racing Association. Deshpande does not rally anymore but his passion for cars has not diminished. “Every time I go to London, I rush to the automobile showroom on Park Lane to see the gleaming models of classic cars,” he says.

Building small residential projects is one thing but taking on the task of creating a landmark township on a gigantic scale is quite another. How did Deshpande get involved with Amanora? Before Amanora, he was involved with another unique project, called Lavasa, which is a township atop a hilly area, near Pune. Lavasa is today billed as a hill-station where you can live, and travel to work in Pune. When Deshpande started work on it, it was the most unlikely destination. “It had no road, no hospitals, no hotels, no communication facilities, no educational facilities, nothing. For the first one year, we used to get off from our cars and walk for two hours to and from the site each way. No developer would walk four hours a day to buy land, especially six years ago.” Why did he take the trouble? “The only reason was that nobody had built a private hill-station after the British left India.”

Deshpande bought his quota of land and then applied to start a project under the Maharashtra government’s hill-station policy. However, having developed the project up to a point, he has just sold his interest in it to Hindustan Construction Company, of Ajit Gulabchand, who is supposed to be close to Sharad Pawar.

Deshpande claims that the Lavasa project was planned very well and has won prizes all over the world for master planning. “A very sensitive environmental planning was done with the help of the UN Environment Department, because Varasgaon, where Lavasa is located, is one of the 18 bio-diversity hot-spots but was the most degraded. In the first four years, with the help of the government officials, forest authorities and everyone involved, we planted 300,000 trees. The UN officials in Paris were sceptical that we would be able to plant even 100,000 trees – which is what we had promised.” Deshpande sold out his stake in Lavasa when the project became large and banks insisted on his personal guarantees for loans which were growing too large for comfort.

Apart from Amanora, Deshpande has planned two other townships. The next one is at a lower price point (between Rs10 lakh-20 lakh), deploys a new fabrication technology (consumes less of cement and uses a chemical that expands) to lower the cost and will come up in less than 1,200 days. The township will have all basic facilities including and a transport hub to connect Pune. The third project is a golf estate – a very high-end project with only golf villas. It will have 10-12 towers and will offer an unrestricted view of the golf course. Deshpande has already bought the land and will launch the project before the end of the year.

Can Deshpande take his model and learning across the country? No way, he says. He explains: “Real estate in India is not a national game. I have been going to Bangaluru, Gurgaon and Chennai and studying these places for expansion. I have good contacts there through my interest in motor sports. But it is not easy to buy land if you are not a local developer. If you are doing a joint venture with a local developer, then you are not in control. So, Mumbai-based developers cannot easily do projects in Pune or Delhi-based ones in Chennai. I can buy 500 acres of land in an instant in Pune because I know hundreds of people and how they are connected to whom, etc. But I will be at sea in other cities.” In any case, for now, Deshpande’s hands are full – delivering what is aimed to be a showpiece of India’s frenetic real estate development.

Tuesday, May 27, 2008

How to rent a hassle-free house

Almost two years ago, Suneel Padale, 36, a development professional, moved to Delhi from Bharuch, Gujarat, on an assignment. Initially, he stayed with his friends and he acted quickly on their suggestion to look for a house in Mayur Vihar Phase-I. He visited the area and liked it. With friends and newspapers disgorging details of property agents in the area, the house search started.

He was, however, disappointed at the results, as most of the apartments that he checked did not live up to his needs. He stuck with the location in spite of that. Finally, he moved into one that he liked. But, eventually, it turned out to be a sour deal as, Padale says, "The landlord wanted to sell his house and in the intervening period he wanted to get some rent." For Padale, the search process began again.

Happy House Hunting D-I-Y

  • Locality. Select the locality; look for proximity to markets, hospitals, schools and your office, and its connectivity
  • Rent. Look at property portals and find out the reasonable rent in that area
  • Reference. Get references of property agents from people in the locality, or refer to newspapers and property portals
  • Dealer. Check the agent's office; look at the size of his set-up; ask for references of past clients; a service tax registration means he takes his business seriously
  • Details. Shortlist the property agents; tell them about the size of property and the rent that you want to pay; check the security deposit and brokerage fees. Ask the agent to shortlist properties for you a day before you visit the area
  • Property. Check the condition of the property. Make sure it has not been vacant for long
  • Utilities. Check the water and electricity supply; ensure there is no leakage and that all electricity connections work
  • Interiors. Check for warped doors, windows, broken panes; stress on getting a whitewash and pestcontrol done
  • Lease. The terms and conditions should be clearly mentioned in the agreement; get it notified/registered; Comple-te all paper work before you move in

This time, however, he changed his strategy. During his stay he had acquired some new friends, in particular, older residents of the area. From them he took references of property agents. "These agents had a larger supply of flats as compared to the earlier ones," says Padale. Still, it took two months before he found a flat. He summed it up wryly: "The experience is quite painful and time consuming."

The demand. Painful indeed, is the process, especially if you are searching for a house in the April-June period as a lot of job openings are created then. Also, campus placements of most business schools usually ends around that period.

"This adds to the demand for rental properties; primarily, this demand is created in the Rs 5,000- 15,000 bracket," says Prashan Agarwal, business head,, India's first, online brokerage for residential real estate.

The effect. It is now established that sales volume of ready-to-move-into properties has taken a beating. The main reason behind this fall is the high cost of real estate, with credit becoming costly. The outcome of this is that many people are effectively postponing buying their dream home.

As a result, this has driven the demand for properties on rent to move upwards. "In the last 6-12 months, rentals have risen, on an average by 15-20 per cent," says Agarwal. For rents to stabilise or fall, volume of property purchase transactions needs to move up. With that not happening, at least in the short-term, rentals will continue to move up. Against this backdrop, if you are rent-bent, you need to look at a few things.

The location. The first step is to zero in on the locality. Then find out the regularity of both the water- and electricity-supply. Check the distance to your office, local markets and other amenities like schools and hospitals. Also, go through the property portals to get an idea of what is the fair rent for that locality.

The agent. Get in touch with the property agents. You could also sound out your office colleagues, in case they are planning to rent out their property, or if they know someone who is willing to do so. This makes sense as, by getting rid of the agent  you save on brokers' fee, which is typically a month's rent.

If you are not that lucky, start short-listing agents. If you know people in the area, take references from them or else check out the classifieds. Bigger property agents usually publish many advertisements for different properties. You can also visit the property portals. Zero in on the agents who have the largest supply.

Once you have identified the broker, visit the office and check if he has a permanent address or not. "A service tax registration indicates that the broker takes his business seriously," says Naresh Malkani, CEO, Also, ask the agent if he is a member of any local real estate association or a national association. "At the end of the day, you should use your own judgement," says Padale.

The landlord. Once you have identified the property, the agent arranges a meeting with the landlord. There are a few things that you should clarify. Ask him why the property was vacant. "Given that, ask him what plans he has to move into the property or to sell it," says Agarwal.

The rent. In Delhi-NCR, the landlord would generally ask for two months rent as security deposit (SD) and a month's rent in advance. While advance rent is a prevalent practice, the amount of SD varies. For example, in Mumbai and Bangalore you have to pay up to 10 months rent as SD.

The inspection. "One should always take the meter reading of all utility services during pre-possession walk-through. The readings should be attached as an addendum to the lease and signed by both the parties," says Malkani. Stress on the fact that the landlord must get the electricity connections checked before he hands over the house to you.

Ensure that the wiring is earthed properly and that everything else is where it should be. If any doors or windows are warped, get them rectified. Furthermore, check if locks in the house are in working condition and if you find a faulty one, get it changed.

Finally, ask the landlord for pestcontrol and to get the house whitewashed.

The lease. These are of two types - company and personal. Most landlords are comfortable with a company lease. "A company lease protects the landlord from any potential tenancy holdover provisions," says Malkani. But if you are unable to furnish a company lease, there is the personal lease option. "Convince the landlord that you are a person of integrity," says Agarwal.

Whichever option you choose, certain things have to be stated clearly, especially, the duration of lease and the SD. If it's a personal lease for 11 months, get it notified. On the other hand if it's a company lease for more than a year get it registered with the help of a lawyer. "The lease then becomes a legal document that secures your rights as a lessee," says Agarwal. At the end, pressure the agent to complete all the documentation before you actually move into the property.

Renting may not be an ideal solution, but if you pay attention to a few basic issues, then that can well ensure years of living on rent, trouble-free.


Monday, May 26, 2008

Enticing buyers with freebies

The Hindu Business Line : Enticing buyers with freebies

LIC to buy land worth Rs 2,000 cr

Life Insurance Corporation of India (LIC), which is among the largest property owners in India, is planning to acquire land worth Rs 2,000 crore this year to develop commercial and residential complexes.

This will be in addition to the Rs 1,100 crore it spent last year for purchasing lands across the country.

The public sector insurance giant has identified Kolkata, Jaipur, Agra, Vishakhapatnam and Bangalore as possible cities where it may acquire land and develop it.

LIC had hired consultants, which had identified the growth centres in the country and based on the report, the company intends to invest in real estate. "We will evaluate the locations, which earn higher returns when we invest," a company executive said.

The insurer is next only to Indian Railways in terms of property ownership in the country and, at present, it holds 1,708 properties in the country which are estimated to be worth around Rs 20,000 crore. In the eastern region alone, the life insurer owns 187 properties.

While a part of the real estate has been acquired by LIC in the last five decades of its existence, it also inherited a majority of the properties owned by it at the time of nationalisation in 1956. Most of the inherited real estate is in prime location, typically in central business district in most cities, including the metros.

A bulk of the commercial complex developed by LIC is being used to earn rental income, company executives said.

In Kolkata, for instance, the state-owned company is developing around 700,000 square feet of commercial area opposite the Science City, LIC zonal manager R R Dash said.

The company acquired the five acre plot from the Kolkata Municipal Corporation for over Rs 276 crore through a bidding process and is working on a 50-storied commercial building that may be the tallest building in the eastern city. It has already shortlisted around 10 design consultants for the project that is estimated to cost around Rs 400 crore.

LIC Chief Engineer BK Banerjee said that during the last five years, the PSU's rental income has increased four folds and during 2007-08, in the eastern zone it stood at Rs 22 crore.

"We expect that in the current fiscal the rental income would be close to Rs 30 crore in the Kolkata region. We would like to double this in the next two years," Banerjee said.

LIC to buy land worth Rs 2,000 cr

Online portals an advantage to NRIs

Online portals an advantage to NRIs

Approvals on slow track

The Tamil Nadu Government has to streamline building approval processes in Chennai and the rest of the State to fully realise the investment potential in the real-estate sector. The State has earned an unenviable reputation for delays in sanctioning building plan approvals and clearances — a clearance for a multi-storeyed building could take 18- 24 months, that is almost as long as it takes to construct the building.

Talk to anybody in the construction industry, the complaint is the same: Delay in approvals within the Chennai Metropolitan Development Authority (CMDA) jurisdiction in Chennai Metropolitan Area, and that of the Directorate of Town and Country Planning (DTCP) which is responsible for clearances elsewhere. Just the formalities involved in getting land use conversion — from agriculture to non-agriculture — alone could take nearly a year. Other States such as Karnataka, Andhra Pradesh or Maharashtra have a system for fast-track clearances of projects. Approvals are obtained in about 4-6 months, including land usage conversion.

Need to speed up

The Tamil Nadu Government has acknowledged the need for expediting the clearance procedures and has started taking steps to speed up approvals for IT and industrial buildings.

At a high-level meeting last February, called by the Chief Secretary, Mr L. K. Tripathy, the officials connected with various agencies involved in plan approvals, including the CMDA, DTCP, Chennai Corporation, Municipal Administration, Fire Department, Traffic and industry promotion agencies, had expressed an intention to put in place a system to accord clearances within 60 days for IT and industrial buildings. But the proposal continues to be on paper and is yet to take off.

At the meeting, the Electronics Corporation of Tamil Nadu (Elcot) was identified as the nodal agency that would act as a single window facilitation agency to accept the applications from IT building developers and SEZ developers and coordinate the process of obtaining clearances from various agencies. The Guidance Bureau, the agency under the Tamil Nadu Industrial Development Corporation, created to attract investments into the State, would play a similar role to get approvals for industrial buildings.

The plan was to institutionalise this structure with an appropriate legislation, a draft of which was to have been prepared during the Budget session of the Assembly. The legislation was to provide for a 60-day time limit for building plan approval, 30 days for issue of final building plan clearance by the local bodies and the formation of a single window facilitation authority. However, nearly three months after the proposal there does not appear to be much progress in this direction.

Shortage of space

The State Government has estimated that over 20 million sq.ft. of built-up space for the IT industry is needed within the SEZs over the next 18 months. If building approvals are not given on time, IT investments could migrate to other States where such space is available.

There is also an acute shortage of office and retail space which is driving up the costs. Industry estimates peg the demand for office space in Chennai at about 7-8 million sq.ft. and for retail space about 2 million sq.ft. this year. Developments have to be speeded up to meet the demand.

The Hindu Business Line : Approvals on slow track

CENTURY 21 Real Estate LLC Expands into India

CENTURY 21 Real Estate LLC Expands into India -

Khaleeji Commercial Bank raises US$163 million for Indian project

Business Intelligence Middle East - - Khaleeji Commercial Bank raises US$163 million for Indian project - News, analysis, reports

Wednesday, May 21, 2008

Residential rentals in Delhi up 13 pc in 2008

Rentals of residential properties in central Delhi has appreciated up to 13 per cent in the first quarter of 2008 as demand continues to be buoyant despite the capital witnessing saturation in development of new space, a report says.

Global real estate consultant Cushman & Wakefield said central Delhi locations have witnessed appreciation in rentals in the range of 7-13 per cent in the first quarter as demand in these locations was driven by expatriates who have the ability to pay higher rentals.

"Majority of the south Delhi locations registered an increase in the range of 7-11 per cent primarily due to limited scope of development and buoyant demand," the report said.

Leasing activities were active across all micro-markets as the end-users had deferred their purchase decisions due to expected corrections in the prices in near future, it added.

As per the estimates of C&W, the rental values in Noida and Gurgaon rose by 10 per cent and 12 per cent respectively.

The capital values of the south Delhi locations had also risen in the range of 10-34 per cent over the quarter mainly due to limited supply and relatively high demand.

"The suburban locations of Gurgaon and Noida witnessed marginal appreciation of 2 per cent over the quarter. End- users as well as investors have adopted a wait and watch policy in anticipation of correction in apartment prices and home loan interest rates," the consultant firm viewed.


Real estate MFs to draw in more foreign money

Some things make the Reserve Bank of India (RBI) paranoid. The invasion of foreign money in the Indian property market has always been a familiar theme that rang alarm bells on Mint Street — the central bank’s headquarters.
Whenever it sensed an alarm, the regulator moved in to clamp down on such money flows. Even foreign venture capital funds opening shops here are asked by RBI to give an undertaking that the money they raise will not go into real estate.
In the past two years, the regulator had persuaded New Delhi to tighten investment rules that would make it difficult for foreign money to chase Indian properties. Not that it has helped significantly, with smart money managers operating from offshore tax havens finding new ways to side-step the curbs.
But in its battle against “asset price bubbles”, RBI will now face a challenge from an unlikely quarter. A month ago, the Securities and Exchange Board of India (Sebi) had paved the way for foreign funds to take a new route to enter the local property market. This would be through real estate mutual funds (REMFs).
There is nothing that can now stop a foreign institutional investor (FII) registered with Sebi or NRIs to buy units of mutual fund schemes which have invested in real estate assets. Under the new rules, which are carved out of the regular mutual fund guidelines of SEBI, an REMF can invest the entire money that it mops up “directly in real estate assets”.
This could be ready commercial properties earning rental income. In a way, it would help investors as well as developers overcome the present rule that says foreign entities can put money only for construction and development and not in ready properties.
The Sebi notification issued on April 25, ‘08 says that at least 35% of the new assets of the scheme should be invested directly in real estate assets while the balance may be invested in mortgage-backed securities, securities of companies engaged in dealing with real estate assets — a slice of these securities can also be unlisted shares, bonds and hybrid instruments. In other words, an REMF is free to invest as much as 100% of its money in ready properties.
This is a curious situation, where one arm of the government has changed rules to restrict foreign direct investment (FDI), while another regulator has found ways to let fresh money flow into properties. What RBI had done was to push changes in FDI regulations, but now foreign money can come in through the portfolio route, with the government clarifying that FIIs are not subjected to the conditions under Press Note 2 that lay down the norms for foreign investment in real estate.
This, perhaps, was inevitable. Banks are almost barred from giving loans to builders who have turned to foreign investors. The latter found the India property story irresistible, with prices having multiplied in the past few years, and higher interest rates in India compared with overseas markets helped them make a killing on such investments. If REMFs lower the fund cost for builders, it would benefit the industry in the long run.
The downside is new money could further fan property prices. Already some of the fund houses are planning to float REMFs. But these players are looking for some changes that could help REMFs take off. For instance, they want REMFs to be exempted from income distribution tax like equity-oriented MFs, where more than 65% of the assets is equity.
Second, REMFs can invest in real estate assets which are free of litigation. While this is only fair as far as investors are concerned, it could limit the scope for the scheme’s investment.


Tuesday, May 20, 2008

Kotak Eeady to Pay Rs 600 Crore for Contractor House

Yet another large property deal is brewing in Mumbai. The Kotak Mahindra group is in talks with developer Orbit Corporation to buy the ‘Hafeez Contractor House’— a prime commercial property of Orbit—for over Rs 600 crore.
Sources said Kotak may use its property fund Kotak Realty Fund for the proposed transaction. When contacted, Orbit CFO Ramashrya Yadav said: “We are in talks with various interested parties. We cannot disclose names. Once the deal is signed, we will inform stock exchanges.” Kotak Realty Fund CEO S Srinivasan declined to comment.
At present, real estate and retail funds operating in India are trying to buy into commercial properties to improve valuations. Many funds and developers are exploring options to float Real Estate Mutual Funds in India and Real Estate Investment Trusts in overseas market where higher valuations would help.
The Hafeez Contractor House which is located at Lower Parel in Mumbai, measuring 2.05 lakh square feet. The 35 storey commercial building is designed to cater around 500 companies.
Lower Parel is an emerging commercial destination with players like DLF, Indiabulls, Bombay Dyeing, Peninsula Land lining up commercial properties in the Parel-Worli belt.
Earlier, Orbit Corporation had planned to sell Hafeez Contractor House to The Sajjan Jindal Group.
Later, the Jindal Group dropped the idea and acquired Orbit Corporation’s Kalina land-cum-commercial property for Rs 807 crore. Both parties have been negotiating on a valuation of Rs 25,000 per sq.ft, comparatively lower rate than the prevailing commercial property rates in the Parel-Worli belt, sources said. Currently, developers are selling commercial space for Rs 28,000 to Rs 30,000 in Worli.
Close to 7-8 m sq ft Grade A commercial property is available in Mumbai now, with little additions in last three years. “The under construction projects have the potential to increase the commercial stock many fold and this may soften prices,” said an analyst. ..........
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Blackstone to invest $18m into India construction biz

Blackstone to invest $18m into India construction biz | Articles | IndUS Business Journal

Realty needs indices similar to equity market

The Real estate industry in India has been growing by leaps and bounds in the past few years. However, the country still lacks a credible way to cross-check the price swings (real or reported) in the sector. For example, recent reports of residential prices cooling off in major cities of the country could not be verified.

There was no authentic data to indicate such a trend. Thus, property buyers remain confused, not knowing, for instance, whether Mumbai property prices fell more than that of Delhi in the last quarter?

The same does not happen with equity investors. If, at the end of the day, anyone wants to know the day’s market trend, he could visit BSE/NSE website or see next day’s newspaper to know the exact rise or fall of Sensex or Nifty. And nobody questions the authenticity of Sensex or Nifty as a barometer of market sentiment. With years of index publishing, a sort of credibility and association has been built with the equity investors by these financial institutions.

Could National Housing Bank (NHB) replicate the same with various real estate stakeholders — government and policymakers, builders, individuals and housing finance industry? Could it start making its real estate index figures (Residex) public, say every three months?

NHB made a beginning in this direction in 2005 when it launched a project for preparation of the real estate price indices for the residential housing segment, NHB Residex. To start with, the project envisaged compiling the indices for 10 cities — Greater Mumbai, Kolkata, Delhi, Chennai, Bangalore, Hyderabad, Ahmedabad, Kanpur, Jaipur and Patna. It also gave price appreciation figures for major cities at the time of the launch of the index. However, getting data from NHB has been tough for analysts.

With various mutual funds planning to soon launch real estate funds, it is imperative that a reliable index data, preferably from a government body like NHB, is made available to act as a benchmark.

Capturing real estate prices in India has its own challenges. Thanks to different types of housing that are made available by builders, there are large variations in property price in a single locality. It is difficult to put a single price to a locality which has different class of houses, say premium as well as low cost.

However, NHB with its wealth of information on loan disbursements and other crucial figures could do a lot for the industry. Since most financiers would have data on a citywise basis, it could be shared with NHB for internal index calculation purposes. If NHB cracks the same, it could be one big step towards making the industry more competitive.

Realty needs indices similar to equity market- Realty Trends-Real Estate-Markets-The Economic Times

Milestone Capital to raise fund of Rs1000 cr

Milestone Capital Advisors Private Limited will raise a fund of Rs 1,000 crore to invest in the booming real estate sector in tier-II and tier-III cities of Tamil Nadu.    

Milestone Managing Director Ved Prakash Arya said today that the fund, which would be raised under "Milestone Domestic Scheme-III", would be utilised for land development, construction of energy efficient residential buildings and warehouses.    
"We have successfully raised two real estate funds to the tune of Rs 250 crore and Rs 1000 crore respectively. Of the 14 investments we have made out of the first fund, nine are in Chennai," he said adding that Chennai itself had a high demand of residential space to the tune of 15-20 million sqft over the next two to three years.    

Arya said while 40 per cent of the third fund would go for land development, 60 per cent would be used for building low cost apartments and ware housings.

Milestone Capital to raise fund of Rs1000 cr

78mn sq ft to be added from airports

Nearly 78 million sq ft of real estate is expected to be added by 2015 due to modernisation and upgradation of 47 airport projects. The projects cover a total of 40,000 acres of airport area across 40 existing and 7 new airports in the country, according to Airport Realty Report by global property consultancy Cushman & Wakefield.

According to the report, if  the airports are modernised as per the schedule, then non-aeronautical revenues might increase from the current 35 per cent to 54 per cent by 2015. It is estimated that rent from retail, office and hospitality will constitute nearly 45 per cent of  the total non aeronautical revenue by 2015 and the rest of the income would be generated from other non-aeronautical sources like trading concessions, public admission fees and miscellaneous income from advertising, car parking etc. 

Anurag Mathur, joint managing director of Cushman & Wakefield said,"Globally airports derive a large portion of their income from non-aeronautical revenue sources; Heathrow, San Francisco, Vancouver and Brisbane, bring in as much as 50 per cent of their revenues from retail and other non-aeronautical resources. With the greenfield projects in Hyderabad and Bangalore taking their maiden steps, India is soon to replicate this potential revenue earning model."   

According to the estimates, retail space accounts for 18 per cent of the total real estate space projections made for airport projects. Most of this supply is concentrated at tier-III towns and cities as it comprises of tourist destinations. The highest supply is however expected to be in Hyderabad which accounts for 1.8 million sq ft of the total retail space projected.
The study also estimates office space to be more than 50 per cent of the total real estate space projected of the airport projects. With nearly 41 million sq ft office space planned, the three tier-I locations are expected to received 14 million sq ft of office space, where as the five tier II cities expect 13.5 million sq ft by 2015. Tier III locations which include over 35 cities would account for approximately 32 per cent  of the total office space supply amounting to 14 million sq ft.
According to the research estimates, hospitality space accounts for nearly 30 per cent of the total airport real estate space projection. This hospitality space will be spread across roughly 27,525 rooms which includes 10,050 five-star properties, 12,270 four-star properties and 5,205 three-star and other budget properties across the country.

78mn sq ft to be added from airports

Introducing 'Makaan Mobile' - India's 1st pure SMS-based Real Estate Mobile Application

Introducing 'Makaan Mobile' - India's 1st pure SMS-based Real Estate Mobile Application

Harvard examines Indian real estate

Harvard examines Indian real estate | Articles | IndUS Business Journal

RIL makes billion-dollar realty foray with Vornado

RIL makes billion-dollar realty foray with Vornado- Property / C'struction-Services-News By Industry-News-The Economic Times

Starting a diversified journey

Gulfnews: Starting a diversified journey

Real estate business in India

REAL ESTATE sector in India is witnessing a new revolution that is driven by favorable demographics, booming economy and liberalised Foreign Direct Investment (FDI) regime.

A crucial factor behind over all development of any country is considered to be mostly depending on the accelerated growth rate in real estate sector. Dynamic patterns of using land and its multi diverse practices have enabled the economic growth more vibrant than the decade went past. Both commercial and residential properties are more in functional practice to make economic growth of the country easier. Further the development of commercial properties has played a significant role in our Gross Domestic Product (GDP) growth in recent times.

Commercial property is like any type of property that is commercially used for earning profit. The central point of commercial property is targeted towards economic and business activities. Commercial property is always meant for business purposes and revenue generation. Commercial property real estate is specially designed for commercial, industrial and institutional activities.

A wide variety of real estates included into commercial properties are specially used for business and industrial activities. All types of apartments, office buildings, commercial centers, shopping malls, warehouses, institutional buildings and distribution facilities come under the category of commercial properties. Real estates used for scientific research and development activities are also considered as commercial properties.

There are several major elements responsible for such mushrooming growth in real estate commercial sector. Service sector with high growth rate and IT sector, increasing multi-level economic activities and higher public-private participation in industrial sectors are some of the basic reasons behind booming commercial properties in India.

Led by mushrooming information technology industry and organised retail, growth in commercial office space requirement is increasing day by day. For example, Information technology (IT) and Information Technology Enabled Services (ITES) alone is estimated to require 150 million square feet across urban India by 2010. In a similar way, the organised retail industry is likely to require an additional 220 million square feet of land by 2010.

Real estate business in India

Coimbatore realty looks to IT

The expectations are that once the State Government-promoted IT park and the private IT SEZs take off, providing large-scale employment to the techies, the real-estate industry will bounce back.

Awaiting demand from IT growth.

R.Y. Narayanan

Blame it on anything — recession, buyers biding their time, expectations of a price correction — but the real-estate market in Coimbatore is facing slackening demand. Coimbatore shares some of the reasons with other cities — hardening of home loan rates and increase in the cost of land and building materials that have pushed up the price of homes/apartments.

But there are other reasons that are specific to the city. The slowdown in the textile and engineering sectors, the backbone of the city’s economy, because of the increase in the price of their raw materials, has probably made the local people cautious about investment in real-estate, particularly when the prices have gone up steeply.

Though the foundation for the Coimbatore IT park was laid more than a year ago, progress on that front has been painfully slow. There is also a feeling that the infrastructure bottlenecks, such as better roads, underground drainage facilities and assured drinking water supply, are yet to be addressed.

Waiting for IT demand

It is not as if the real-estate sector has written off the potential of the second largest industrially important city in the State. The expectations are that once the State Government-promoted IT park and the private IT SEZs take off, providing large-scale employment to the techies, the industry will bounce back.

Mr V. Mohan, Managing Director, Mayflower Enterprises Private Ltd, Coimbatore, says, in Mysore a prominent IT company was able to buy land at about Rs 10 lakh per acre, but in Coimbatore the price is around Rs 50 lakh to Rs 1.5 crore per acre within a 10-km radius. . This has discouraged the entry of potential IT investors in the city. Earlier, land cost would constitute about 30 per cent of any project cost but now it accounts for nearly 50 per cent of the cost within the city and in the outskirts, it is almost 30 per cent.

He said builders were unable to offer budget flats in the Rs 20 lakh-Rs 30 lakh price range within the corporation limits and the market does not accept such flats outside the city limits. At present around 5,000 flats were under construction and another 5,000 were in the planning stage. Only if the IT industry takes roots in the city might the demand increase.

Mr Mohan said the recession started about six months ago. The builders were able to withstand it and wait for another six months for a reversal in the trend. If it continued beyond that “you may expect a correction in the market” up to 10-20 per cent. The price of apartments has gone up in the past two years by 2-2.5 times fuelled by the increase in land and construction material cost. Because of competition and oversupply, demand has come down.

He said the anticipated infrastructure development has not taken place and the IT sector’s growth has been slow. Most of the industries in the city were not doing well. While textile industry is facing recession, the increase in the cost of iron and steel has hit the foundry sector. The real-estate market does not look at the salary segment for apartments costing above Rs 40 lakh. It is the business class, NRIs and the IT seniors who can afford it.

Putting off buying

Mr Madan Lund, Director, Srivari Property Developers, Coimbatore, said there has been a “considerable degree of slowdown due to various factors.” But in the past two months, more enquiries have started coming in. He said the “slowdown is basically a postponement of buying rather than slack in demand.”

Unlike in 1997, when the economy was doing badly and there was nothing to back any increase in prices, this time “there is a lot of money and the price increase has been backed by money”.

While buyers feel the prices could come down, the sellers, who could not increase the prices, are holding on to their stocks and no transactions are taking place. Along with the slowdown, increased availability of housing stocks has created a mismatch between demand and supply.

He pins his hopes on the IT parks to come up in the city for the revival of demand, which he expects by the end of 2008 or mid-2009. But rates are not likely to go up for at least another year. The increase, if any, could be because of hike in raw material prices and not because of demand. But within the next two years, he anticipates a ‘tremendous change’ in the city when all the IT parks start functioning.

He does not expect a price war in Coimbatore because the “prices are not that high to warrant it.”

While some builders may put off new projects, especially in high-risk places such as the peripheral areas of the city, projects within the city will continue to come up because of demand.

He said the rates for apartments in some of the prime areas in the city are: Avinashi road up to Lakshmi Mills, and Race Course area — Rs 6,200-Rs 6,500/ per sq.ft — the price is still holding up and may rise because of increase in land cost; R.S.Puram — Rs 4,500-Rs 5,000/sq.ft.; Saibaba Colony — Rs 4,000-Rs 4,300/sq.ft.

Delayed approvals

Mr V.S.Venkataraman, Managing Director, Ramani Realtors Pvt Ltd, said apart from the cost of land and materials, the cost of labour has gone up by almost 100 per cent and there is acute shortage of labour.

The company wants to go slow in taking fresh commitments because of cost escalation. The cost increase was so swift that it had hit the projects under construction.

He said if the builders were to survive, the powers to grant permission to special buildings (G + 3) should be vested with the respective urban local bodies since the present rule for approval by DTCP at Chennai takes almost a year for the process to be completed.

He did not anticipate any competition from big builders since they have created land banks outside the city whereas small builders’ focus was inside the city.

The Hindu Business Line : Coimbatore realty looks to IT

Sustained real estate demand has been a result of IT & BPO boom

Speculation might be the buzzword in the realty market in major metros, but in Chennai, it is a serious buyers’ domain. Largely, it is end-users driving the residential property segment, while the commercial segment is growing in tune with demand from other sectors.

The commercial IT space is facing an excess supply due to STPI norms not meeting industry expectations, but the situation in residential market is real, says Prakash Challa, president, Confederation of Real Estate Developers’ Association of India, Tamil Nadu. In fact, if prices touched unrealistic levels recently, the reason was rising land prices and construction costs. Mr Challa says real development has taken place in two pockets — GST and OMR corridors.

In the residential segment, sub-Rs 3,000 and Rs 4,000 per sq ft categories have been doing exceedingly well. Bookings across new projects such as Opaline, Estancia and L&T’s Eden Park have been on the rise. Apartments in the range of Rs 30-60 lakh are still a large and growing market segment. Unlike in Bangalore, Delhi or Mumbai, where speculative interest is high, the city has not seen a major shift as the belief that it is a growing platform is still alive among investors. Barring OMR, where the rates were ostensibly high, there has been no radical change in the infrastructure matrix, says consultant M S Jagan, formerly head of Ascendas and Mahindra RI Developers projects.

According to HDFC (TN &Kerala) regional manager Mathew Joseph, there has been no slowdown in credit off-take. Mature first-time buyers are graduating to larger apartments, given their rising incomes.

“Very few realty markets globally have undergone such a dramatic change in a short span of time. Reflecting the diverse nature, the next few years would see tremendous growth opportunities. Sustained demand has largely been a result of growth spearheaded by a spurt in the knowledge sector, essentially the IT and BPO-led businesses,” says Jones Lang LaSalle Meghraj (Chennai) MD Ramesh Nair.

Real Estate Consultancy Services chief consultant Rajesh Babu says middle and low-end developers are facing difficult times. Unable to withstand debt pressure for ongoing projects, they are triggering a new trend. By “liquidating” space to accommodate multi-tenants, they get the twin advantage of meeting demands from SMEs and overcoming their debt burden.

In January-March 2008, 1.6 million sq ft commercial space was absorbed, marginally down from 2 million sq ft space in the year-ago period. Around 60% space utilisation has gone into setting up SEZs. But, it is still corporate office space that has is facing a supply constraint.

Though only 20,000 sq ft is needed, the supply has drastically come down, Babu adds. Demand for office space in Chennai is expected to touch 7 million sq ft in 2008. As IT and Infrastructure Developers’ Association secretary Salaikumaran says, “We must have a hybrid system wherein companies, IT and non-IT , can co-exist and increase the developers’ risk appetite.”

Sustained real estate demand has been a result of IT & BPO boom- Property-The Sunday ET-Features-The Economic Times

Saturday, May 17, 2008

Jobs in real estate in India

THERE IS always a need for working employees in private firms and government agencies, which are concerned with appraising, developing, merchandising and financing commercial, industrial and residential real estate.

Agents and brokers of real estate sector will experience huge employment growth rate in years to come and it is due to the increasing housing needs of a growing population. Moreover, investment in real estate sector is very beneficial. Sales in real estate continue to be encouraged by low interest rate, which results in the need for more Indian professionals in the national and international market.

Career Opportunities:

Real estate majors have career opportunities for employment with various organisations that include insurance companies, commercial banks, mortgage bankers, saving associations, real estate developers, and consulting and property management firms. Even industrial, residential, commercial and brokerage offices offer employment opportunities.
Types of Careers in Real Estate:

Careers in residential brokerage - These professionals of real estate help people buy and sell homes. They are required to have complete knowledge of areas, such as types of financing, local economics, mortgages, government programmes in real estate and fair housing laws.
Careers in commercial Brokerage - Commercial brokers have specialisation in income-producing properties that include shopping centres, industrial parks, retail stores, warehouses, and apartment and office buildings. Commercial brokers also do work of financial arrangement.

Careers in industrial and office brokerage - Official and industrial brokers have specialisation in the selling, developing and leasing property used for manufacturing and industrial purposes.

Careers in property management - The primary function of property managers is to maintain the property with the purpose of producing the highest possible financial return over the longest period of time.
Careers in land development - Careers in land development galore because it is one of the most important and challenging specialties in real estate these days. Developers are those professionals who turn land into profitable industrial, residential and commercial developments.

Careers in real estate research - Researchers in real-estate-industrial provide contribution to the decisions of several other real estate specialists. Appraisers, brokers, financing experts, property managers and counsellors all depend on data provided by researchers.


Future of real estate investment in India

DIVERSIFICATION OF portfolio is the first rule of investment as it is insisted by any ethical professional. Usually, not more than 30 per cent of available investment funds should be assigned to any one category, including bonds, stocks and other savings instruments form one leg of a many-pronged platform. Direct commodity investment is a very risky venture, but it is safe only for the experienced investor who has time to monitor the market closely.
So what else is left there? For many investors, investment in real estate is an essential part of a well-rounded portfolio.

Real estate offers a wide range of opportunities, if you want to include ’paper’ in your investment scheme. Real Estate Investment Trusts (REITs), options, property oriented mutual funds and other mortgage backed securities are presently in disarray.

REITs are entities, which invest in real estate related properties or assets that include office buildings, hotels, shopping centres and mortgages secured by real estate. REITs come into one of three categories: Equity REITs, which invest in real estate properties and make money for investors from the rents they receive; Mortgage REITs, which lend money to developers and owners and invest in financial instruments that are secured by mortgages on real estate; Hybrid REITs, which are a combination of Equity and Mortgage REITs, are also secured by mortgages on real estate. To qualify for it, a company has to pay 90 per cent of its taxable income every year to shareholders and invest at least 75 per cent of its properties in real estate and generate 75 per cent or more of its gross income from investments in and mortgages on real estate property.

Options are an alternative form of offer. A potential buyer provides a sum, an option consideration, with the purpose of effectively taking a property off the market for a period of time. Option offers generally run anywhere between a few hundred and a few thousand dollars, but possibilities exist for higher or lower amounts. Some options bind one party only, some are called bilateral, both of which require adhering to contractually specified conditions. Conditions involve contingencies around financing, inspections and always have a time limit.

Every deal can be a little different and if the option isn’t exercised by the time limit specified, the potential buyer will forfeit the money. It is indeed a risky affair, but a potentially rewarding one because you have eliminated alternative bidders effectively. The optioner has one advantage: The time to find a buyer for the property itself, then selling the option. This helps one get rid of the need to pay for transactions costs and at the same time it keeps debt low, et cetera.


We de-risk the real estate deals


NRIs going on house, commercial space buying spree

The realty sector as of now is lull due to the property prices going overboard. The realty firms are in the doldrums as well as their construction costs are going up.
And as if this were not enough, the pulsating middle and upper middle class are also waiting in the wings for the right moment to take the plunge for their dream house.
In this rather dull period, the large NRIs, especially the Malayali and the Punjabi, are on a rampage. If the recent study of Assocham on the real estate scene in India is any indication, the large Malayali and Punjabi NRI community is on a home-purchase spree.
Some of them are also into buying commercial space. This point of the survey looks very convincing as these two communities migrated to others parts of the world in droves, in the past. People from the land of five rivers have been migrating for almost one hundred years, and, the quiet Malayalis have also shown to the world that they are second to none when it comes to going abroad for greener pastures.
Of course, that does not mean that NRIs from other states are not purchasing houses in either their home towns or other parts of the country.

Dr Chandrasekhar Tiwari, an eminent scholar of Delhi University, who has been studying the Indian diaspora from various angles, says that perhaps only those NRIs are buying properties in India who have migrated to other countries during the last 25 years or so. They are still very much close to their roots.
I am pretty sure that those who had shifted before that are not buying properties. They prefer to migrate to countries like Britain, America, Canada, New Zealand and Australia rather than come back to India. Only the first generation NRIs are coming back to India, he opines.
It has been observed that Malayali NRIs prefer to buy some kind of property in their home state cities like Thiruvanathapuram, Trichur, Kottayam, Cochin and the like. Of course, there are many who have purchased houses in metros too.
And, talking about the macho Punabi NRIs, they do not mind buying houses even in Delhi, various NCR towns, as well as the developed cities of their own state. And, unlike the Malayali NRIs, they buy commercial properties too.
Anil Sharma, CMD of Amrapali group, says that more often than not NRIs buy flats in the price range of Rs 60 lakhs to Rs 80 lakhs. They buy properties for purely investment purpose. There is hardly any emotional factor involved in it. As and when the property appreciates to the desired level, they dispose it off.
Devender Gupta of real estate advisory Century 21 informs that the first choice of rich Indians, in terms of buying some property, is definitely Bangalore. Delhi, Noida, Gurgaon and Hydrabad are a close second. When Punjabi NRIs visit here, many of them also look for plots that they can develop themselves.

For that purpose, they find Zirakpur, near Chandigarh, and Greater Noida very attractive,' says Gupta. Josy Joy, a Malayali doctor settled in Dubai, says that he has been living in Dubai for the last 20 years. I do not think that I would ever return to India as I am very well placed there.
This is also true for a very large number of NRIs in the Gulf. However, I would love to buy houses in both Delhi and in Kottayam, even though I have an ancestral house in a village close to Thiruvanathapuram.
Tiwari says that not only the Malayali and the Punjabi, but NRIs from other states too buy houses in their own state or some other big cities. As far as Bihari NRIs are concerned, they hardly buy properties in their own state. They perhaps know the ground realities of Bihar. They also know that buying a property would not fetch them anything.


India's richest man takes 4% stake in Singapore-listed trust

Lakshmi Mittal, India's richest man, has made an investment of $US75 million ($80 million) in Indiabulls Properties Investments Trust (IPIT), a subsidiary of Indiabulls Real Estate, representing a 3.9 per cent stake in the trust.


Landmark Group to invest Rs 4,000 cr in 12 projects

Real estate developer Landmark Group on Thursday said it will invest over Rs 4,000 crore in developing 12 properties across the northern region in the next 3-4 years.


Greedy engineer kills grandpa for property

An engineering graduate near Attur murdered his grandfather and injured his father with grievous weapons following a family feud on Thursday.
Prabu (25), son of Balasubramaniam, a farmer from Naduvalur in Gengavalli taluk, had resigned job as a lecturer in a Polytechnic near Attur some 10 days ago and went to Chennai seeking a better future. Two days ago, Prabu told his family about his plan to launch a real estate business. He wanted to make use of the ancestral land owned by his grandfather Sengoda Gounder (73) for the purpose.
But, Balasubramani and Sengoda Gounder strongly opposed the plan, which led to a heated altercation. On Thursday night, when the family members were sleeping, Prabu tried to attack his grandfather with a knife. Balasubramani, who woke up, stopped Prabu from attacking his grandfather, but in the process faced the wrath of his son. Prabu also inflicted severe injuries to a relative Anandan, who tried to pacify him. Gounder and Balasubramani were admitted to a private hospital in Salem. Gounder died later.


PBEL purchases Rs180 crore plots in Chennai

PBEL PROPERTY Development (India) Pvt Ltd, a joint venture of Israel-based Property and Building Corporation (PBC), Electra Real Estate (ERE) and Indian Developer, INCOR infrastructure, has invested Rs180 crores in Chennai, to build a residential and commercial township.


Royal Palms plans star hotels in major cities

Real estate and hospitality major Royal Palms India will invest Rs 2,400 crore in the next two years for setting up four- and five-star hotels in majors cities in the country. The company is planning to build four luxury hotels in Mumbai.

The company is setting up four luxury hotels in Mumbai itself, out of which one is a three-star, one four star and two five-stars hotels. This will increase the total room capacity to 3,000 by 2010, which will be around 30 per cent of the total rooms available in the city, Royal Palms India Joint Managing Director Dilawar Nensey told Business Standard.

Royal Palms already has two hotels in Mumbai, and three each in Hyderabad and Kolkata. At present, the company has a total of about 400 rooms in Mumbai. "The investment for Mumbai will be one of the highest as it excludes the price required for land. We intend to set up hotels on our own land at Goregaon East," Nensey said. The addition of rooms will cater to the existing shortage of 2,500-3,000 rooms per day in Mumbai, however, with growth in the tourism industry, demand for rooms is expected to increase further.

The company is in the process of identifying properties in Hyderabad and Kolkata for setting up luxury hotels. Royal Palms will invest around Rs 1,400 crore to build three- and five-star hotels in these cities.

The company intends to develop one three-star, one four-star and one five-star hotel each in Hyderabad and Kolkata, with a total room capacity of around 800-1,000.

Royal Palms is looking at a gestation period of 3-4 years for all the properties, as compared with the present industry time of 9-11 years. All the projects will be completed by 2011, and on completion of these projects, the company will look at foraying into other destinations, including Chennai.


Friday, May 16, 2008

Land records now available online

Chennai, May 15: State minister for housing and revenue Periasamy on Friday launched e-governance service of land records.    The residence and the house owner can now have access to the documents of land, and download pattas. The website will have all details such as patta pertaining to lands of individuals. So far, 3.2 crores of land resources having full details of the owners across the state have been registered on this website, the minister told reporters on the sidelines of the three-day regional review conference organised by the land resources department and Union ministry of rural development.

Through global positioning system, four districts including Dindigul, Vellore, Coimbatore and Krishnagiri are under re-survey. The re-survey with the hi-tech equipment would help the authorities register the land details with more accuracy.  The re-survey would be extended to other districts shortly in a phased manner. For executing the project, the state government has sent a detailed project report to the Centre seeking funds to the tune of Rs 50 crore.  The minister also said that Tamil Nadu was spearheading in land reforms. The DMK regime over the last two years has issued five lakh free pattas for the landless poor.

The government is identifying more poramboke lands to benefit the needy, he said. Union rural development secretary Rita Sinha said e-processing would prevent tampering of documents and every individual registering on the website would have a unique identity number.  This kind of e-processing of land resources ‘Torrent system’ had already been implemented in various states and also in other countries, including New Zealand, England, Australia,Thailand and Kenya.

“Initially we had plans to launch it in 11 states across the country. As of now, it has been completed in Karnataka, Haryana, Andhra Pradesh and now Tamil Nadu.”  The ministry wants to cover the entire country by the end of the 12th five-year Plan.  The project got delayed in the last few years and currently it is gaining momentum by reviewing the land records and instructing the state government to co-operate with the Union government, she said. The objective of the system would be accuracy and time reduction. Besides tampering of land records could be prevented, Ms Rita Sinha said.

State revenue secretary Ambuj Sharma and senior officers from southern states attended the review meeting. According to Egmore tashildar Mr Ravichandran, the three-day meeting will have sessions on land records modernisation, relief and rehabilitation of public displaced due to developmental activities by the government and proper utilisation of wasteland in urban and rural areas.

Property fight imprisons family in flat

Chennai, May 15: An upper middle class family of a physically challenged man living in upmarket Asprin Garden, Kilpauk, is spending agony-filled days within the closed gates of their apartment.    Repeated complaints with the police has not helped them as goons allegedly hired by a local politician had been pelting stones at their flat for the last few days and threatening with dire consequence if they refuse to vacate their own house.  Mr A. Gunasekhara Reddy, aged 56, carried a very confused and scared look like his wife and mother. As he had difficulties in communicating, his brother Mr Jayasekhara Reddy explained the situation.

“Four members of our family purchased four flats from our distant cousin A. Krishna Reddy, an AIADMK activist, nearly 10 years ago after paying over Rs 10 lakh for each apartment. The flat, in which Gunasekhara Reddy is residing now, was registered under ‘deed of settlement’ while other three flats were registered under ‘deed of sale’.”  “The particular flat was registered under ‘deed of settlement’ so that there was no ‘capital gain’ problem for the seller. But this deed now has become a tool for the seller, Krishna Reddy, not only to reclaim the apartment, now priced around Rs. 70 lakh, but also to sell it to another person despite the dispute over ownership is being heard at a city civil court,” said Mr Jayasekhara Reddy, who had come from the US to meet his brother. According to Mr Reddy, the politician and the new buyer had been threatening the family members, while the police personnel at Secretariat Colony police station turned a blind eye towards the complaints from the family.

“We have been trying to lodge a police complaint against the men who were threatening us for the last few days. The police has not only taken our complaint till Thursday afternoon, but had been acting in favour of the other side,” alleged Mr Reddy.  However, when contacted, Mr Krishna Reddy claimed that “he was the real victim and that the other Reddy family was cheating him.”  Senior police officials noted that there would be action against persons who are trying to disturb the family.  “We are aware of the situation. Let the court decide on the ownership. Policemen at the station were also told to take action against people who are trying to threaten the family,” said a senior police official.   


Thursday, May 15, 2008

'Market meltdown has hit realty firms'

Emaar MGF, a joint venture between Dubai-based Emaar Properties and Delhi-based MGF, became a victim of the global credit crisis in February when it had to withdraw its Rs 7,000-crore IPO, country’s third-largest, due to poor investor response. The company has moved on since then. Sharavan Gupta, managing director Emmar MGF, now says the company will revisit the capital market once the current credit crisis ebbs, and possibly with a larger offer.
'Market meltdown has hit realty firms'- Interviews-Opinion-The Economic Times

Middle East business information

Trade Arabia - Middle East business information | Trade news portal

Top 50 builders taking part in Kerala Property Expo

Arab Times :: Top 50 builders taking part in Kerala Property Expo

Finding paradise

Finding paradise

‘Hot’ Bangalore cooling off

The Hindu Business Line : ‘Hot’ Bangalore cooling off

Property shopping goes global

The Hindu Business Line : Property shopping goes global

Tamil Nadu coaxing ‘industrial whales’ to come ashore

» Tamil Nadu coaxing ‘industrial whales’ to come ashore - Thaindian News

Pricey land stifles demand

Slow sales and market resistance to the high cost of residential space have seen developers slow down the pace of projects. Developers, who blame high land prices and input costs for the increasing cost of developed space, say they are going slow on land deals, cutting back on projects and even prefer to back out of joint ventures.

Irrespective of who or what is responsible, all acknowledge that high land prices in most cities have contributed to the projects being unviable. Fresh supply of developed space is bound to fall over the next year or two leading to a correction in land prices.

When the market is resisting the rising trend in developed space prices it is only logical that there will be resistance to land price increases, say developers.

Costly Chennai

Chennai is considered among the most unviable destinations for developers because of soaring land values. According to contractors, quite a few projects are on the block with developers looking for partners to share the cost.

On the Old Mahabalipuram Road, for instance, considered among the most attractive areas for investment, look at the actual development of residential space, says a developer: Of the 100 acres with Hiranandani, the company is developing only about 15 acres; DLF has over 70 acres but is only looking at about 15 acres; another Chennai-based developer, Olympia Tech Park, which holds 60-70 acres is again developing only about 15 acres.

The overall development of residential space along the Oup to a distance of about 30 km would be about 150 acres, a fraction of the available area. If projects are not happening it is not because of absence of potential demand but because high costs are stifling the demand.

Survey results

A recent survey by international property consultants Cushman & Wakefield points to a slowdown across cities.

In Bangalore, for instance, the report says “end-users and investors over the past six months have adopted a cautious approach in purchasing residential plots, apartments, villas, etc in Bangalore.”

As for the North, the report says the suburban locations of Gurgaon and Noida witnessed only a marginal appreciation of two per cent over the quarter. End-users as well as investors have adopted a wait-and-watch policy in anticipation of correction in apartment prices and home loan interest rates.

In Pune, “end-users and investors continued to keep a vigil on the market,” the report says. Instability in markets, expectations of a correction in real-estate prices, and high interest rates on home loans have contributed to a slowdown in intake of residential property in Pune, the survey points out.

In Chennai, one developer, who gave a rule of thumb calculation, said that there is a market resistance for residential units priced more than Rs 3,100-3,200. At this price range, developer’s margin accounts for 15-20 per cent, Rs 1,500-1,600 towards cost of construction, Rs 300 for other expenses, and, therefore, the land price should be around Rs 400-500 a sq.ft considering the limitation of 1.5 FSI — floor space index is the proportion of built up space to the land area. Where a viable price is about Rs 4 crore an acre, landowners often demand Rs 8-12 crore. Deals are, therefore, simply not happening.

The situation is similar in Hyderabad but developers manage because of the higher FSI — with a bit of planning it can go up to six, they say. In Bangalore too there are areas in the city’s periphery where land is available at Rs 1.5-3 crore an acre.

According to developers, the market is bound to be ‘tough’ for them and buyers over the next year during which a correction in land prices is anticipated.

Pricey land stifles demand

Find out what Ludhiana has to offer

Find out what Ludhiana has to offer- Property-The Sunday ET-Features-The Economic Times

South Indian developers moving into hospitality

South Indian developers moving into hospitality : In2perspective

Wednesday, May 14, 2008

PBEL has invested Rs500 crore in the real estate sector across south India

Press Release - PBEL has invested Rs500 crore in the real estate sector across south India

More realtors check into hospitality

More realtors check into hospitality

‘Investors should check credentials of the fund house before investing in REMFs’

‘Investors should check credentials of the fund house before investing in REMFs’

Indiabulls arm to raise $300 mn in Singapore

Indiabulls arm to raise $300 mn in Singapore - livemint

Investment worth Rs20 crore in Mysore

Investment worth Rs20 crore in Mysore

Office rents fall, slow down realty rush

Office rents fall, slow down realty rush

Indian real estate firm plans new five-star chain

» Indian real estate firm plans new five-star chain - Thaindian News

India - Top 10 research resources

Our series of articles on the best online research resources for emerging property markets around the world continues with a look at India. The world’s second-largest country by population has massive potential as an investment destination despite some tight restrictions on property ownership.

Land and property ownership in India by overseas buyers is mostly limited to two groups of people – Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), with strict definitions governing who is eligible. But with the number of Indian expats estimated at around 30 million worldwide, including over 1 million in the UK and 3 million in the USA (with many employed in senior jobs with high incomes, this international audience of buyers is huge and well worth targeting.

But even this population is dwarfed by the expansion of India’s own middle class, which management consultants McKinsey estimate will grow ten-fold by 2025, to over 580 million people. With such extraordinary growth in population and buying power anticipated, there is exceptional potential for companies selling real estate in this fast-developing country.

We’ve looked at hundreds of websites relating to property in India and selected what we consider to be the ten best. If you think we might have missed any useful sites from our list, please feel free to post your comments at the bottom of the page:

  1. The Hindu Business Line. Free-to-access news on the real estate sector from the Hindu, a respected daily based in Chennai. The wide-ranging news content includes a dedicated property and construction section as well as economic and political stories.
  2. Reserve Bank Of India ownership guide. Eligibility for ownership of land and property is a key issue in the Indian property market. This is a detailed and clearly explained summary of the rules and regulations surrounding property ownership in India. Eligibility, transfer of ownership and inheritance are just some of the topics covered.
  3. Realty Plus Magazine. Indian consumer publication operated by Exchange4Media. Anyone unfamiliar with the domestic Indian property market will gain a great deal of insight with its regional profiles, interviews and new development news. Though the print version is unavailable overseas at present, the website and a subscription newsletter are free to access.
  4. Property Bytes.  Extensive blog, operated by Indian property portal, covering a wide range of real estate-related topics, from land prices to interiors and home loans. An extensive archive is being expanded daily by a healthy number of up-to-the-minute articles.
  5. Indian Real Estate Forum. A busy forum with a number of active threads on news, developments, popular locations and general enquiries – a good place to find out what consumers and the trade are talking about.
  6. Global Property Guide India Buying Guide. The most concise summary of the buying process and typical costs involved in buying and selling property in India that we’ve found. The wealth of other data (very recently updated) that is available free-of-charge is an added bonus, for investors and professionals alike.
  7. NRI Realty News. US-based website with property and investment articles aimed at an NRI audience. The articles cover domestic and international markets, with special focus on India, and other finance-related topics affecting the Indian expat audience, like tax and banking. The city guides should also appeal to the non-NRI visitor.
  8. UK Trade & Investment “Doing Business” brochure. The India section of the UK Trade and Investment site doesn’t have much to offer specifically for the real estate professional, but this free brochure is an excellent general guide to business etiquette and culture in the country. When it comes to making faux pas, prevention is always preferable to cure, particularly in India, where “sari” often seems to be the hardest word.
  9. Cityscape India 2008. Exhibitions can be a good source of leads. The organizers boast that over 5,000 people attended last year’s show, a B2B event focused on all sectors of property development in India. The Mumbai-based show takes place in December this year. MIPIM and REIW also organize regular trade-facing events covering the Indian real estate market. Those agents who want to investigate potential partners on a smaller scale could also attend one of a number of local consumer Indian property shows such as those in London and Dubai in the mean time.
  10. India Catalog City Guides. Definitely not the prettiest website in the world, it does have a number of general guides to India’s major cities, which should provide the uninitiated with an overview of potential property hotspots. There are some useful directories on the site too.

India - Top 10 research resources

Tuesday, May 13, 2008

INDIA Real Estate Expo comes to DALLAS and SEATTLE, a chance for Non Resident Indians to buy property in INDIA - Press release - Horizon Expo - INDIA Real Estate Expo comes to DALLAS and SEATTLE, a chance for Non Resident Indians to buy property in INDIA

Hirco Reports Strong Interim Results

Hirco Reports Strong Interim Results to tie-up with land developers

RoofBird.Com, India's first exclusive residential real estate web portal, has announced its plans to tie-up with more than 100 reputed property developers in the next one year, to promote their residential projects through its end-to-end online marketing services.RoofBird's services portfolio is custom-built for developers and offers dedicated website for each developer and detailed listing of their projects in the online portal, high visibility in search engine results, effective E-mail marketing services, genuine enquiry generation and result oriented offline customer support services,a company press release said."We have already tied up with close to 40 reputed property developers and these developers have listed about 100 residential projects coming up across major cities. With the current drive, the total number of property developers at RoofBird.Com will be increasing to about 150 by the end of this year," the release said.The strategy was to tie-up with a minimum of 10-15 reputed property developers in each metro city. RoofBird is covering cities like Bangalore, Chennai, Hyderabad, Kochi, Kolkatta and New Delhi. It will soon extend its coverage to Mumbai, Pune, Ahmedabad and Coimbatore. to tie-up with land developers