PropertyWala.com™: News articles.

New Craze For Homes Abroad

Fri, 04 Jul 2008 13:54:00 GMT

New Craze For Homes Abroad

Indian companies picking up stake and buying out foreign businesses. Not only Indian Inc, but Indians are also showing their interest towards foreign destinations for second home. At the time when the Indian economy is struggling to get hold of the rising inflation, many of the rich Indians are actually busy fussing over and worrying about which part in the world to set up their second home. Analysts say that this trend of the swish set setting up second home abroad is only logical, going by the way the Indians are lining up to play a much bigger role, be it professionally or entrepreneurially, on the global stage. As the Indian economy is growing, so is the number of wealthy people. In developed countries, the trend of acquiring second homes is normal, and the wealthy have been buying second and third homes since ages now. And, now it is time for India to follow the same trend.

Aditi Vijayakar, Director, Transaction Services, Residential, Cushman & Wakefield said, “Indians have typically preferred markets like Dubai, Singapore, Malaysia, the US and the UK. The latter two locations have been preferred by end users or NRIs who live and buy locally in these countries. Dubai, Malaysia and Singapore have been locations which have generated interest over the last two to three years as investment destinations and prices in all three markets have soared”. Dubai, the Middle East, Malaysia, Singapore, Thailand, London, Sydney, Melbourne and Mauritius are most definitely some of the most popular destinations where Indians are buying a second home.

As far as the money is involved in the process of buying a home abroad is concerned, it depends on the country where the person plans to buy the home. But the one policy which has most certainly helped in the rise of this trend is where the Indian government has offered two lacs US dollars annual personal allowance to be spent on property abroad.

There are quite a few formalities one needs to take care of in order to buy a home abroad. Of course, one will have to comply with the rules and regulations and the legal requirements of the country one plans to buy the home in. The procedure and entire process for buying a home abroad varies from country to country, and it’s imperative that one is well versed with the local laws and requirements.

Even though it might not be an easy task to acquire a home abroad, there are certain benefits of investing in a second home in another country which might seem inviting. Most of these destinations have a stable and mature real estate market which helps in the assured and high rental returns on the investments on the property.

Frasers Hospitality Will Expand Business in China, India And Vietnam

Fri, 04 Jul 2008 13:51:00 GMT

Frasers Hospitality Will Expand Business in China, India And Vietnam

Frasers Hospitality, undaunted by the uncertain global economic outlook, is pursuing an aggressive expansion strategy in China, India, Vietnam and other markets.
The hospitality arm of Singapore-listed conglomerate Fraser & Neave is a ‘contrarian’ that aims to add about 5,000 serviced apartments over the next two years, despite fears of a global economic slowdown, said its chief executive Choe Peng Sum.

He sees ‘a lot of pent-up demand’ in cities such as Singapore, London and Sydney - where its residences have enjoyed occupancy rates of more than 90 %.

It is also the ‘right time now to get into China’ while growth opportunities are still bright in Vietnam and India, Mr Choe told a media conference yesterday to mark Frasers’ 10th anniversary, as well as to share its expansion plans.

In Singapore, where Frasers already operates two high-end serviced residences, it is planning a third property, but details will be released later, he said.

He added that Frasers has seen a robust 26 % rise in average room rates to about $400 per night for certain units in Singapore.

Farther afield, Frasers is also planning to plant its brand in places such as Edinburgh, Bahrain and Perth.

Noting that ‘growth in Asia and Europe (for extended-stay accommodation) is just starting to take off’, Mr Choe said Frasers expects to expand its portfolio to 8,478 units by 2010.

It will focus on China, India and Vietnam, which have strong long-term growth momentum.

Frasers is targeting new property launches in cities where demand for serviced apartments has been driven up by expatriates working for multinational companies that set up shop in these countries.

In China, where Frasers already has 12 properties in key cities such as Beijing and Shanghai under its brand, the company is looking to grow in other cities such as Chengdu, Nanjing and Tianjin.

As for Vietnam, while skyrocketing inflation poses challenges for the hospitality industry, land prices are now becoming ‘more reasonable’ as land owners are more realistic in pricing. This offers opportunities for Frasers to expand there, Mr Choe added.

India is another key growth market for Frasers, which has seven properties scheduled to be launched there over the next three years.

Frasers is also in talks to set up private equity funds to invest in China, India and South-east Asia.

Big Houses in Indore

Fri, 04 Jul 2008 13:49:00 GMT

Big Houses in Indore

Indore has gained a reputation of being the test ground for corporations looking to test revolutionary and innovative ideas that later go on to inundate the rest of the country. Bharti chose this city to launch its private telephone network (which was also India’s first private telephone network). Radio Mirchi came here first, before going to the metros and the rest of the country. And till the 1990s, Bollywood movies were released here on Thursday, while they were released on Friday in the rest of the country.
Not surprising then that the city is testing some of the latest trends in real estate as well. One such project is Silver-springs. It has attracted FDI from Fire Capital Fund. An interesting feature here is that a section of the project has been allocated to be sold only to defense personnel. This decision could have been prompted by its nearness (about 30 km) to Mhow (a premier military training centre).
The township is segregated into enclaves that are themed around elements of nature: earth, air, water, fire. While this is also a good idea, it remains to be seen how many people will actually want to live in an enclave named after fire, and further how many people will move into (or stay out of) an enclave based on their astrologers’ advice.
Currently only a Town House sample villa is ready, and thankfully here the builder are delivering houses that most of urban India has come to expect. The house is big and there are no surprises here. Of course, the whole concept of townships and group housing is new to the area and that is one place where this pioneering city is taking a cue from the developments in the rest of the country.

UK's Eredene Cap Picks Up 50% Stake In AILPL

Fri, 04 Jul 2008 13:45:00 GMT

UK's Eredene Cap Picks Up 50% Stake In AILPL

UK-based Eredene Capital has picked up a 50% stake in Apeejay Infra-Logistics (AILPL), the infrastructure arm of Kolkata-based Apeejay Surrendra Group.

The group is setting up a state-of-the-art logistics park in Haldia in West Bengal’s West Midnapore district. Eredene Capital has invested Sterling Pound 5.25 million or Rs 42 crore to pick up the 50% AILPL stake. This was confirmed by Abdul Wahid, the new chief executive officer of AILPL.

Eredene Capital invests in infrastructure projects and in real estate development in India. It focuses primarily, but not exclusively, on logistics, distribution of warehouses and port services. Mr Wahid, who will be responsible for all infrastructure related activities of the Apeejay Surrendra group, has over 17 years of experience as a senior supply chain management professional.

Speaking to media, Mr Wahid said: “The Eredene group has picked up a 50% stake in APILPL at an investment of Rs 42 crore. The Eredene group has a crack team with core experience in real estate, infrastructure, ports and logistics and we see them as natural partners in the development project at Haldia. We look forward to working with them in this and other future projects as well.”

In fact, Eredene and the Apeejay Surrendra group have entered into an agreement whereby the former would be Apeejay’s exclusive partner for all infrastructure and logistics projects in nine eastern states of India.

The proposed logistics park at Haldia will be located 7 kms away from Haldia port. It will provide distribution, warehousing and transport services to industrial units located there. The park will have anicllary facilities such as commercial offices, hotels, shopping malls and light processing workshop.

The 72-acre plot for the Haldia project has already been specifically marked for industrial use by the Haldia Development Authority. The process of lease acquisition is on. The total cost for development of logistics at the park is Rs 192 crore.

Talking about funding of the project, Mr Wahid said it will be done through a mix of debt and equity. “An equity investment of sterling pound 10.5 million will be shared equally between Eredene and Apeejay Surrendra group. The balance will be funded through debt.”

“We are trying to give land to the Apeejay group as quickly as possible, so that they can start work at the site,” said PA Siddiqui, chief executive officer of Haldia Development Authority.

DLF To Spend Rs 500 Crore

Thu, 03 Jul 2008 14:38:00 GMT

DLF To Spend Rs 500 Crore

After losing more than 71% of its market cap in the past six months, the country’s largest real estate developer DLF has announced a share buyback.

The company is likely to spend around Rs 500 crore on the buyback programme, which will result in around 1 crore shares (equivalent to 0.6% equity stake) getting extinguished.

The quantum and the price at which the shares will be bought will be decided in the board meeting slated for July 10. The company is likely to buy shares from the market over a period of several months, stretching to a maximum of six months, at market determined prices.

It could be inferred from the proposed investment plan that the company is looking at an average acquisition price of Rs 500 per share, which is lower than the DLF’s issue price of Rs 525.

The promoter group holds 88.17% in DLF. As per the SEBI norms, promoter holding beyond 90% could trigger delisting proceedings. Therefore, buyback option is limited to acquisition of around 3 crore shares, which will hike promoters’ stake to 90%.

DLF stock has slid 71% off its January peak of Rs 1,225 to reach an all-time low of Rs 350 on Wednesday. Following the buyback announcement, scrips rose 14.7% to close at Rs 423 on the NSE after touching an intra-day high of Rs 439. Over 1 crore shares changed hands on Wednesday.

Analysts feel the buyback plan will bring little relief to the flagging stock.
The share price will again fall as soon as the buyback offer is over. Mostly, companies use surplus cash reserves to buy back shares in order to shrink capital base and enhance earnings per share. But in the case of DLF, as also in the case of a few other Indian companies earlier, a buyback is being resorted to put up a brave front before investors, which may not necessarily work.

Global credit crisis and rising interest rates in the country has made borrowings very expensive for realty firms, and DLF, like its peers, too is facing a major cash crunch. It had to reverse the sale of its office property to the promoter group company DAL in March quarter after failing to find investors for DAL.

In such a circumstance, DLF’s Rs 500-crore investment for share buyback will only put extra burden on the company’s balance sheet. The global turmoil and domestic inflation have hit realty firms hard with several realty stocks being hammered out of shape.

Unitech has lost 75%, while Parsvnath and Omaxe have slid over 80% each. Given the changed economic scenario, most brokerage firms have been revising downwards the net asset value (NAV) as well as target price of real estate firms.

Sobha Sells 40% In Bangalore Project

Thu, 03 Jul 2008 14:36:00 GMT

Sobha Sells 40% In Bangalore Project

Sobha Developers Ltd leading real estate company said on 02nd July it has sold forty percent stake in an forthcoming Bangalore project to Dubai’s Pan Atlantic LLC for ten million dollar.
Sobha plans to develop a 1.7-million-sq ft residential township at the plot in south Bangalore. A senior company official said the present value of the land is estimated at 1.05 billion rupees.
Recent months have seen a spate of private equity deals in the Indian realty, as developers, faced with a cash crisis on one hand and a decelerate in demand caused by high interest rates on the other, try to unlock value in ongoing projects.
In April, Parsvnath sold thirty percent in a Mumbai project to Euronext-listed Yatra Capital and Saffron India Real Estate Fund for forty six million dollar, while Unitech sold 50% in a Mumbai project to Lehman Brothers in June, for one hundred seventy five million dollar.
Sobha plans to begin construction at the Bangalore project by the subsequent quarter, the official said.
Shares in the company extended gains to a high of 288.90 rupees, and were trading at 285 rupees, up 8.3 % in a strong Mumbai market.

Government Relaxing Entry Restrictions For foreign Players In Hotel Construction

Thu, 03 Jul 2008 14:34:00 GMT

Government Relaxing Entry Restrictions For foreign Players In Hotel Construction

In a move that could help curb hotel room crisis ahead of Commonwealth Games 2010, the government is considering relaxing entry restriction for foreign players in construction of hotels and resorts. It is looking at a suggestion to bring down minimum development rule of real estate from existing 50,000 sq feet to 20,000 sq feet for hotels included in ‘mixed’ real estate projects. This would set the ground for players with smaller net worth to invest in Indian hospitality sector.
With Commonwealth Games just 2 yrs away, the Capital needs thirty thousand further rooms to accommodate an expected 1.5 lakh tourists. Similarly, other states also require additional rooms to tackle the influx of tourists in India in 2010. According to sources, the department of industrial policy and promotion (Dipp), at present, is considering relaxing entry norms in case of hotels only. However, the Investment Commission had recommended to the government to relax the entry restriction in the entire sector, which includes housing and shopping arcades as well.
The Dipp has already circulated a Cabinet note proposing waiver of two conditions — the 3 yr lock-in on foreign investment and the minimum investment criteria of five million dollar for joint ventures or ten million dollar for wholly-owned ventures. This waiver has also been sought for hotel related real estate projects.
However, the country has been seeing an asset bubble since the beginning of the current fiscal. According to realty verticals head R. Ahuja“With real estate prices heading southwards, tardy stock market, high interest rates especially for the real estate sector, the sector will continue to remain low for sometime”.

Realty Players Preparing For Top Business Schools

Thu, 03 Jul 2008 14:21:00 GMT

Realty Players Preparing For Top Business Schools

Real estate developers like Lodha, DLF, Unitech and Raheja have begun ramping up their presence in Business school campuses in the past two years in a move to have a more professional image. The move coincides with the growing interest of business school graduates in the real estate sector.
The real estate firms have sold promising careers to the students by offering competitive compensation packages. They usually hire students with prior work experience so that within two years they are ready to hold fairly senior posts.
Lodha, one of the highest paying companies on campuses made offers approximately in the range of Rs 16 lakh per annum. Real estate companies have felt a need to keep pace with growth and build organizational capabilities. Unitech has roped in McKinsey to conduct a study to on the balanced ratio between professional and family work force.
Unitech general manager of corporate planning, R Nagaraju said, “Although family continues to handle board level positions, senior strategic positions were taken by professionals. There is a higher level of delegation now at the professional level.” Unitech hired around 15 students from IIMs and ISB this year. This number was similar to last years.
Having had an experience with the Indian real estate majors, B-schools are now looking at luring foreign real estate companies. Many are looking at real estate companies based in Dubai and Singapore as potential recruiters. Some are already strengthening ties with existing players.

Realty Slump Affects AIM

Thu, 03 Jul 2008 14:17:00 GMT

Realty Slump Affects AIM

A slump in the Indian real estate market has cast a shadow on the property funds listed on London’s Alternative Investment Market (AIM). All the five India-focused property funds floated by local developers have been under-performing in the past two months.

On an average, they registered an 18% negative return over the last two months. The market capitalization of all the Indian developers has eroded around 60-85% during the past few months and it has had its impact on the AIM market.
Unitech Corporate Parks, the AIM-listed entity of the Delhi-based real estate firm Unitech, has been the worst performer with 27% negative return; while the Mumbai-based Hiranandani group’s Hirco has suffered a 23% fall.

KPMG executive director Jai Mavani said, “This is largely due to the environment and has nothing to do with a particular developer. The projects offered by the AIM entities are largely construction and development rather than operating ones. Currently, they are not generating cash. This is the reason why these funds have been lagging behind since the time of their listing”.

The India-focused funds listed on the Singapore Stock Exchange tell a similar story. The recently-listed Indiabulls Properties Trust is also trading below its issue price.

According to a recent Credit Suisse report, despite developers’ assertions that prices remain at an all-time high, a deeper look shows that all is not well with the sector. Recent land auctions, discounts being offered by developers, cancellations and prices in the secondary market all point to an impending price correction.
It added that mortgage disbursals, stamp duty and registration fee collections also indicate a slowing demands. Developers are finding it increasingly difficult to raise funds and distress sales are on.

DLF Board Of Directors To Approve Buy-Back Of Equity Shares

Thu, 03 Jul 2008 14:16:00 GMT

DLF Board Of Directors To Approve Buy-Back Of Equity Shares

India’s largest real estate company, DLF Ltd, said on 02nd july that its board of directors would meet on July 10, to consider and approve a buy-back of equity shares. The buy-back proposal comes at a time when the company has seen sharp erosion in its share price over the past few weeks.

The announcement lifted the sentiment of the stock on 02nd July. It was ruling at all-time low of Rs 350.30 on the BSE, but ended the day with a gain of 15 % at Rs 423.95 against 01st July closing price of Rs 368.40.

DLF promoted by billionaire Mr K.P. Singh had debuted on the Bombay Stock Exchange (BSE) in July last year at Rs 582 per share, almost 11 % higher than the issue price of Rs 525 per share. However, the stock value has eroded since the start of 2008, after it opened the year at Rs 1,055, it reached an all-time high of Rs 1,225 (on January 15, 2008), and a low of Rs 350.30 on 02nd July.

“The shares today are at a level lower than the intrinsic value of the company. The company wants to give a signal to its shareholders and the market that it will take the necessary steps to ensure that the stock is quoting at a fair value. The company is concerned that the stock is quoting below the issue price,” a DLF official said.

However, the company has not specified the size of the proposed buyback or its price. Sources said that the company was likely to consider an open market route for the buyback.

At present, the public holding in the company is pegged at about 12 %. The company has cash of about Rs 2,000 crore on its balance sheet, sources pointed out.

The real estate sector has been at the receiving end of the bourses following the increase in interest rate and on firm inflation numbers.

According to Enam Securities, “Given the falling demand/capital values, project sales/internal accruals falling short of funding requirement, more pain is expected in the near term. It is time to tread cautiously on this sector, the report added.

“Due to rising interest rates and property prices in the last one year, there has been decline in the transaction volumes in the residential side. Prospective buyers are now waiting on the sidelines for the property prices to correct. In the wake of increasing interest rate scenario, we are increasing our discounting rate assumption for the real estate companies under our coverage,” said a recent Emkay report.

DLF To Develop Eight Malls This FY

Wed, 02 Jul 2008 14:50:00 GMT

DLF To Develop Eight Malls This FY

Country’s largest real estate developer DLF Ltd will develop eight shopping malls under leasing format in the metros this financial year.

DLF Retail only leases out space in its properties. Company would also open four shopping malls in current year, of which three would be in Delhi NCR and one in Chandigarh.

Chandigarh mall will be smaller one, while the three malls in the Capital will have three-to-four lakh square feet leasable area per mall.

Leaving the price of the land, the construction cost is around Rs 3,000-4,000 per square feet.

DLF is focusing primarily is on the metro cities like Bangalore, Chennai, Hyderabad and Delhi. DLF will also look at smaller cities in future. DLF is in discussion with many big retailers, but nothing has been finalized yet. DLF Retail currently has five operational malls.

Starwood Hotels & Resorts Worldwide Inc Plans Upscale Brand Aloft In India

Wed, 02 Jul 2008 14:48:00 GMT

Starwood Hotels & Resorts Worldwide Inc Plans Upscale Brand Aloft In India

Starwood Hotels & Resorts Worldwide Inc, a hospitality and leisure chain, plans to roll out its upscale brand ‘Aloft’ in India. “We have tied up with a few developers and Citibank subsidiary for the Aloft brand,” said Larry Malarkar, regional director, sales and marketing, India, Nepal and Bangladesh, Starwood Asia Pacific Hotels & Resorts Pte Ltd. “They will come up in Chennai, Bangalore and a couple of Tier II cities including Pune, Ahmedabad starting 2009,” he added.
The company is also in the process of finalising plans for its other brands including five star luxury brand St Regis, W Hotels and four star brand Four Points. Currently, the company has its brands including Westin, Sheraton, Le Meridien and The Luxury Collection in the country. It has no plans to get the Element brand to India. ITC Hotels has been Starwood’s partner in India for more than 30 years. It has 10 year franchise agreement with the US-based Starwood Hotels and Resorts for re-branding its seven hotels and bringing them under latter’s ‘Luxury Collection’.
“We are in talks with a real estate company for a property in Mumbai for St Regis and will probably tie up with a developer for a multi-hotel pan India deal for Four Points,” he said. He added that the company sees big potential for the Four Points brand in India while it will be very selective for its W Hotels brand. “No concrete plans for the W Hotels as of now,” he said.
Asked if Starwood plans to partner with the Anil Ambani Group for St Regis brand, the group was reported to be looking at joining hands with Starwood for the brand, Malarkar said, “The group has expressed interest to enter the hospitality sector. People have been asking us if we plan to tie up with them. Earlier, we used to say no comments but now I can say there are no such plans.” Typically, a St Regis hotel has 300 rooms. Starwood sees huge market in Tier I cities for its luxury brands. “There are no hard and fast plans to confine brands to a few destinations only, but the luxury brands will only be sustainable in the major metros to begin with. We do not see big market for luxury brands in Tier II cities,” Malarkar said.
For its Westin brand, the company has tied up with real estate companies including Mumbai-based real estate company Oberoi Construction for property in Mumbai and Vatika group’s subsidiary, Vatika Hospitality Pvt Ltd, for properties in Delhi and Gurgaon. “We have also signing one more property with Vatika for property in Bangalore ,” he said. By 2011, the company plans to add 30 hotels to the bank of 23 at present in the country.

Sabarmati Project Is Coming Next Year

Wed, 02 Jul 2008 14:46:00 GMT

Sabarmati Project Is Coming Next Year

Real estate development at the eight hundred crore rupees Sabarmati River Front project is all set to begin by the end of this fiscal year.

About 22% of the total 168 hectares of land reclaimed as part of this key landmark project will be open for developments in both commercial and residential segments.

About 22% of the land (34 hectares) will be released for sale for the development of commercial and residential properties on the riverside. These developments in the centre of the city will result in the expansion of the city’s already established business districts like Ashram Road, the walled city, Shahibaug, Kalupur and Relief Road.

According to Ahmedabad Municipal Corporation (AMC), the civic body handling the project, the reclaimed land would be available for real-estate developments as early as coming December.

SBI To Review Home Loan Rates

Tue, 01 Jul 2008 13:45:00 GMT

SBI To Review Home Loan Rates

Country’s largest lender State Bank of India on Tuesday said that it would review the interest rates on home loans in the next 10 days. SBI Chairman O P Bhatt told, “We are still examining the market condition and will take a view on home loan rates in another week or 10 days”.

SBI had increased its PLR by 50 basis points to 12.75% last week. Following the hike in lending rates, the bank also increased deposits rates for various maturities.

The bank expects net interest margin in the range of 3% as compared to 3.09% in the previous year.

Bhatt said credit growth this year would moderate by 2-3% and aims advances to grow at 20-21%.

Speaking about profitability, he said less business would mean less profitability. Impact on volume would have some impact on profitability.

Realty Dreams Of Small, Mid-Sized Cos Crumble

Tue, 01 Jul 2008 13:38:00 GMT

Realty Dreams Of Small, Mid-Sized Cos Crumble

Struggling with a slowdown across segments, the Indian property market is moving towards the next phase of consolidation. Liquidity crunch in the real estate market is beginning to drive many mid-sized and small developers to beg for cover.
Many want to liquidate their land and incomplete projects by selling them to bigger developers or private equity players even at lower valuations. This is due to the stagnant market conditions. Around fifteen deals in real estate sector have fallen through in the past two months with investors developing cold feet.
A mid-sized builder at Chembur in Mumbai has put its fourteen floor commercial property in central Mumbai on the block. The developer wants to raise around one hundred fifty crore rupees which would help him complete his upcoming project.
A Hyderabad-based real estate group has started advertising to attract high networth investors to generate fifty crore rupees against bulk purchase of its housing project in the city. A small developer in Mumbai, pushed to a corner on account of mounting payables for construction material, is now offering its project at Juhu-Versova in Mumbai at about 35% discount to the current market price. In Delhi, some developers have approached property consultant to sell their income generating commercial properties to finance some of the unfinished projects.
Real estate funds and established developers admit that they are working on various proposals. Hiraandani Developers chairman Niranjan Hiranandani said, “Even in the normal circumstances we used to get offers from mid-sized developers to buy out their projects. But now, the numbers have increased considerably”.

Townships In Amritsar

Tue, 01 Jul 2008 13:36:00 GMT

Townships In Amritsar

Ludhiana-based realtor Impact Projects Pvt Ltd on 30th June signed a joint venture (JV) agreement with equity fund company South Asian Real Estate (SARE) to set up 2 luxury townships in Amritsar. The Isle of Man-based SARE has made investments in a lot of housing projects in India through JV with Indian property developers.
The two projects will be set up at an investment of eighteen billion rupees Impact declared here.
Impact Projects is sponsored by Harpal Singh, the non-executive chairman of Ranbaxy Laboratories Ltd.

Punjab Government Urged The NRIs To Make Huge Investments

Tue, 01 Jul 2008 13:32:00 GMT

Punjab Government Urged The NRIs To Make Huge Investments

Advocate General Punjab Hardev Singh Mattewal stated that the Punjab Government was committed to safeguard the rights of the Non Resident Indians (NRIs).

This was disclosed by Mattewal while talking to media persons during his private visit to London. He said the Punjab Government was making all out efforts to resolve the issues pertaining to NRIs. He urged the NRIs to make huge investments in the states’ development programmes. He pointed out that during his visit to London he called upon the NRIs to come forward to invest in Punjab in a big way. He also met various deputations of NRIs there and assured them of state government’s fulsome support and cooperation.
Appreciating the historic decisions taken by the Badal Government for the welfare of NRIs during the NRIs Sammelan held in Punjab, Mr. Mattewal termed it as a ’step in the right direction to win over the confidence of NRIs’. A high level committee was also constituted during this Sammelan which had so far resolved many vexed issues relating to the problems of the NRIs, said Mr. Mattewal.
Mattewal said that Punjab was making rapid strides under the stewardship of Chief Minister Mr. Parkash Singh Badal. He hoped Punjab would soon emerge as the most preferred investment destination and a Commercial Center as the diverse sectors of Industry, Real Estate, Education and Health Services in Punjab had recently witnessed huge expansion in these fields..
Replying to a query raised by the media persons, Mr. Mattewal said that he was here on the private visit and not on official one. He said he had come here to participate in a religious function organized by the London based Gurdwara where he was honored by the local Gurdwara Prabandhak Committee.
To another question Mr. Mattewal said that Mr. Badal had already setup special Police Stations for the NRIs in the state to redress their complaints and grievances on the priority. He said he was given war welcome by the NRIs settled in London and would ever cherish these memorable moments throughout his life. “I have personally realized the hardships being faced by the NRIs here and would soon take up this matter with the Punjab Government for their immediate and solution on the top priority, said Mr. Mattewal.

Real Estate Transparency Of India And China

Tue, 01 Jul 2008 13:29:00 GMT

Real Estate Transparency Of India And China

India and China have significantly improved their levels of real estate transparency, an indicator of real supply and demand in the sector, over the last two years.

According to real estate transparency index complied by professional services firm specializing in real estate, Jones Lang LaSalle, the biggest improvers in Asia Pacific are India, China and Vietnam.

The index, which provides a framework for comparing the level of real estate transparency in eighty-two markets around the world, shows that nearly half of the countries surveyed in 2006 demonstrated a significant improvement in their transparency score two years later.

Indian emerging real estate cities are ranked in the semi -transparent level along with China’s Tier 1 Cities, which is the third category after highly and transparent levels in the index.

Besides, India’s Tier III cities have also improved their levels and joined the low transparent level along with Tier II and Tier III cities of China.

It added that China had exhibited maximum improvement, moving up to the semi-transparent level and is now considered more transparent than India.

Investors Searching Different Investment Options

Mon, 30 Jun 2008 14:13:00 GMT

Investors Searching Different Investment Options

The pursuit of higher returns, as the stock market tanks, has investors searching different other investment options outside the conventional bank deposits. One such avenue that has caught the interest of several investors in recent times, especially in the tier-II towns of the South, is the fixed deposits offered by big jewelry chains.

These jewelry chains, mostly in Tamil Nadu and Kerala, have been catching the attention of depositors from smaller investors at interest rates that are 3-5% over bank fixed deposits.

While dozens of cash-hungry companies, especially real estate, have also been offering competitive rates for deposits, investors are cautious of putting money in many of them, as they lack confidence about the safety of these deposits. But these big jewelers, though unregulated, have been able to draw investors to them because of the higher trust in them.

“People perceive investments in deposits of jewelers as ‘safe’ because there is gold involved. Also, this business is all about ‘trust’. While manufacturing companies have defaulted in the past, you would not hear of any defaults from a jeweler,” said a manager at a Kochi-based jewelry chain, which accepts these deposits. There has been no dearth of demand for such deposits because of the amount of unaccounted money present in the system, partly driven by the real estate boom across the country.

Income Tax Dept To Scan Realty Deals For Evasion

Mon, 30 Jun 2008 14:11:00 GMT

Income Tax Dept To Scan Realty Deals For Evasion

If you bought or sold a house or a plot for more than Rs 30 lakh, then expect a knock from tax hounds. Real estate sector is high on the radar of the income-tax department, which is going to keep a close watch on buyers or sellers of property.

Realty deal whose value is more than eight times the gross income of the buyer could come under the scanner of the I-T department, going by the latest scrutiny norms circulated to officials. So, if your gross income is ten lakh rupees per annum and you have bought a house for more than eighty lakh rupees, you could get a call from the department.

Gross income, for this purpose, shall be total income plus exempted income minus the total tax paid. This norm is being adopted to ensure that there is no evasion and people who enter into such transactions pay taxes honestly.

Cash deposit of ten lakh rupees in your savings account could also bring you on the scrutiny radar. Individual assesses now have to report transactions which get captured in Annual Information Return (AIRs). Sale or purchase of house more than thirty lakh rupees is reported, under AIR, by registrars to the department.

Scrutiny on these counts would be generated though Computer Assisted Scrutiny System (CASS) and not through manual intervention.

According to the criterion that were discussed at the recent annual conference of the chief commissioners and directors general of income-tax, capital gains of more than Rs twenty-five lakh could also attract scrutiny by the department in the current financial year.

Similarly, loss from house property of more than Rs 2.5 lakh would also invite the I-T department’s scanner. The real estate sector, which is known to attract large quantum of black money, continues to draw the attention of tax department.

Real estate agents and builders having a turnover of more than Rs 5 crore could attract scrutiny. Professionals like doctors, architects whose gross receipts exceed forty lakh rupees and those who report profit of less than 30% of the gross receipt, can also face scrutiny.

National Housing Bank To Raise 110 Billion Rupees

Mon, 30 Jun 2008 14:09:00 GMT

National Housing Bank To Raise 110 Billion Rupees

India’s National Housing Bank plans to raise one hundred ten billion rupees during the year to March 2009 to meet its loan demand. According to the chairman and managing director S. Sridhar declared that out of this one hundred and ten billion, it will raise thirty billion rupees through zero coupon bonds and another ten billion rupees via retail deposits.

The housing finance regulator also plans to set up a mortgage guarantee firm in four months, in which it will be the single largest stake holder.

Disha Direct Celebrates 5 Successful Year In Real Estate

Mon, 30 Jun 2008 14:07:00 GMT

Disha Direct Celebrates 5 Successful Year In Real Estate

Disha Direct, the pioneers of the second Home concept productively full five years in real estate industry.
Disha Direct nowadays offer services around the entire field of real estate be it residential properties in cities and towns, second homes away from the city, plots of developed land, commercial properties, expansive acres of land or some rare charismatic homes. With all mod cons with a team of over one hundred seventy professionals, seven brands, ten offices, eight finished projects, twenty eight current projects and three thousand five hundred satisfied customers; Disha Direct is an organization spreading its arms in the realty sector.
On the occasion of its anniversary celebrations, Disha Direct properties remain devoted to its five strong factors – Zero Risk Property, Realistic & Fixed Price, Disha Care – a property management group, Go Green – an attempt to provide projects set in the greenest of places and three thousand five hundred satisfied customers.
In this month-long celebratory event, Disha Direct plans to add to the customer’s convenience by making itself accessible at the distance of a phone call. Customers interested in latest projects can just make a call and be rest assured that a Relationship Manager will visit them with a complete presentation of the project of their interest. Property buyers in this celebratory period can enjoy the exclusive privilege of availing flat five percent concession on any property they choose from a wide collection of properties sponsored by Disha Direct. Apart from these, during the month long celebration property buyers can expect a bag full of surprises and other eye-catching offers.
All in all the anniversary celebrations at Disha Direct come as ‘Happy Hours’ for the property seekers.
Disha Direct is a foremost real estate marketing organization. Having made its foray into real estate marketing five years before specializing in second homes in scenic localities away from the city, the company has established itself as the preferred name in the real estate industry. Currently the company has seven different brands covering different real estate properties.

L&T Ready For Realty Drive

Mon, 30 Jun 2008 14:05:00 GMT

L&T Ready For Realty Drive

Engineering and construction, L&T, currently has real estate projects worth $2 billion in hand, said sources familiar with its plans. Most of these projects are in the form of special purpose vehicles, joint ventures and contracts. The SPVs also include a Rs 2,500 crore project in Chandigarh, sources told.

Separately, Larsen & Toubro announced that it has bagged a Rs 1,557 crore order from Andhra Pradesh Power Development Company Limited (APPDCL).

In the morning trade on 30th June (Monday), L&T was trading up by 0.5 % to Rs 2,277 in the early noon deals.

Omaxe To Enter Into Mauritius Real Estate

Mon, 30 Jun 2008 14:03:00 GMT

Omaxe To Enter Into Mauritius Real Estate

After success into Dubai, real estate player Omaxe is all set to enter the Mauritian property market with a plan to develop a fifty acre residential project.

The Delhi-based company has identified a project of fifty acres and planning to develop a residential township there. The land for the township is probably to be provided by the government and the company is expecting to receive the ownership of the land within a week. Omaxe would carry out the Mauritian project alone.

The company would develop a residential project about thirteen hundred crore rupees through SPV Golden Crescent RED and General Trading Ltd. Another project worth fifteen hundred crore rupees would be developed through SPV Marine Sands.

Omaxe said in May that it would develop ten lakh affordable housing units with an investment of eighty thousand crore rupees in India over the next half decade. For this purpose, it has set up a new subsidiary named National Affordable Housing and Infrastructure Ltd.

Landmark Ready For Pune-based SEZ Project

Mon, 30 Jun 2008 14:02:00 GMT

Landmark Ready For Pune-based SEZ Project

Landmark Land Holdings Pvt Ltd, the real estate investment arm of the Dalmia group, has acquired 10 % equity stake in an Integrated Township and Special Economic Zone (SEZ) project at Hinjewadi, Pune, being developed by Kumar Builders.

The proposed SEZ will be established in 124 acres of land, adjacent to the Rajiv Gandhi Software Technology Park at Hinjewadi, a Landmark release on 30th june said. The project is likely to generate revenues in excess of one billion dollar.

However, the company did not specify the size of the deal. Landmark will have an option to increase its stake to 49 % in the future.

Landmark has 20 ongoing projects under development, which have a sales value of five billion dollar.

Autolite India To Enter Real Estate And Retail Segment

Mon, 30 Jun 2008 14:00:00 GMT

Autolite India To Enter Real Estate And Retail Segment

Autolite India established in 1970, in the field of Designing, Manufacturing and Market ing of Automotive Lighting products globally. The Company has made surprising growth in business through its innovative products at competitive prices. It is amongst few in the world who have installed Computerized Photometry Testing Equipments, CNC, CAD, CAM design and Tool manufacturing facilities Catia and Pro-E Softwares. Its testing laboratory is recognized by Govt. of India.

The board of directors of company has decided to enter into high profitable real estate & retail segment with regard to the possibilities of diversification in real estate business.

A high level committee has been formed for this purpose to explore the possibilities of real estate business with regard to SEZ, IT Park, commercial complex, residential complex, etc.

Shares of the company gained Rs 0.75, or 1.74%, to trade at Rs 43.75. The total volume of shares traded was 710 at the BSE (11.36 a.m., Monday).

Interest Rate Hike May Hit Realty Sector

Sat, 28 Jun 2008 14:09:00 GMT

Interest Rate Hike May Hit Realty Sector

With growing inflation and interest rates leading to a slackening in property demand, 1% to 1.5% increase in interest rates could further impact the real estate sector.Jones lang LaSalle Meghraj Chairman and Country Head Anuj Puri said, “The demand is already slackening. The real estate sector can absorb another 100 to 150 basis points rise in interest rates, but anything beyond that will hit the industry hard”.

Further he said that the current trend of drop in demand would continue for about two years as there is no sign of inflation cooling down and high chance of interest rates becoming harder.

Mr. Puri, however, said that there was no shortage of demand in Mumbai and Delhi, but in other parts of the country far less number of property transactions are taking place. The slackening in demand, coupled with liquidity crunch, could lead to consolidation in the realty sector as smaller players will find it difficult to survive.

He said, “Smaller players will have to partner with bigger ones or offer stakes to financial partners to complete their projects”.

Further he added that there is no scarcity of demand for office space in the country as overseas companies are now leaning more towards India for outsourcing. As a result, even smaller cities are becoming an attractive destination.

The Loan Against Property Rates & Their Effects

Sat, 28 Jun 2008 14:06:00 GMT

The Loan Against Property Rates & Their Effects

The loan against property rates are fixed by the loan amount, credit ranking of the borrower and the equity of the pledged security. All these three reasons affect the interest rate directly.
The modification of 1991 marked the dawn of Indian financial system. Capped with professionalism, hi-tech IT applications and diversification, Indian financial and loan market has now at its highest altitude. The entry of overseas banks has supported the system to get better its services. Now, competition is at all time high in the Indian housing finance business. With the improved contest, the customer has a number of alternatives to select his housing finance company (HFC) to apply for a loan according to the need.
The loan against property is on the rise in the attractiveness chart as more and more Indians are nowadays taking these loans as the most cost effective solution for their needs. The banks have two prime concerns while providing a loan against home:-
1. Repayment capacity of the borrower credit risk involved in the loan deal.
2. Title of property(If it free from any legal hassles or not).
The borrower to whom the bank is lending should have the capacity to pay the loan amount back in the assigned time period. Repayment capacity is a major concern of the bank while lending funds to anyone. In case of salaried loan applicants, the borrower needs to have a cheque salary which can be verified by the bank. A track record of salary entries in a bank statement reflects consistency and genuineness of the income source of the borrower.

Industry Gambles On Long-term Prospects Of Real Estate

Sat, 28 Jun 2008 14:03:00 GMT

Industry Gambles On Long-term Prospects Of Real Estate

Increasing interest rates and a declining demand may dent the realty market in India. However, the long-term forecasts for the sector continue to be good, senses the industry.
At a seminar on the real estate market in India here on 27th June, most of the realty players confessed that there was a liquidity crunch due to the increase in interest rates. However, this is not going to discourage long-term investors from investing in India, they added.
Termed as “Elephant Investors,” these investors such as pension funds and endowment funds are just waiting in the groups to enter the Indian market, said A. V. Kapoor, managing director of Saffron Asset Advisors Pvt Ltd.
“There are around 21 India-dedicated real estate funds that are raising money in the international market. In the next 9 months, I believe nearly $7 billion will be entering the country through different India-dedicated funds,” Kapoor said.
“While long-term players are look at India, small-term players based in the US & Europe, for example the hedge funds and private equity players, are further interested in their local markets,” said Alex Hayim, director of REIT Property Management India.

RBI Limits Private And Public Sector Banks For NRI Matters

Sat, 28 Jun 2008 14:01:00 GMT

RBI Limits Private And Public Sector Banks For NRI Matters

NRI loan interest rate depends a lot on the reason of borrowing. When the reason is to invest in share or commercial immovable property market, the interest rate to be paid is higher than any loan borrowed by the NRI to be invested at an employment generating project.
The RBI has recently prohibited public and private sector banks from lending more than Rs 20 Lakh against the deposits of NRIs. This ban is imposed by the apex bank on doubt that a huge part of such loans is being diverted for speculation in shares and immovable property market. These cautious steps from the apex banking body are aimed at ensuring that bank credit is streamlined towards productive sectors other than the retail sector. It will definitely squeeze the extra investment flow particularly in commercial real estate and capital markets. The hike in standard assets provisioning will lead to a raise in retail lending rates.

Boom Time Over Keki Mistry, Vice Chairman Of Housing Development Finance Corp

Fri, 27 Jun 2008 13:36:00 GMT

Boom Time Over Keki Mistry, Vice Chairman Of Housing Development Finance Corp

According to Keki Mistry, vice chairman of Housing Development Finance Corp An increase in the housing supply, rising borrowing costs and a stock market rout are bringing a five-year property boom in India to a close, according to executives at two mortgage lenders. Property prices across the country could drop as much as 15% in the coming months. Gagan Banga, chief executive of Indiabulls Financial Services Ltd., predicted prices could decline as much as 20%.

Switching To Tier II And Tier III Cities A Good Option For Real Estate

Fri, 27 Jun 2008 13:34:00 GMT

Switching To Tier II And Tier III Cities A Good Option For Real Estate

Union Finance Minister P Chidambaram has said the double digit inflation will continue for some more weeks.
The Central Government as well as the Reserve Bank of India is not going to hesitate in taking more steps to control towering prices, if the need arises with the markets also reacting adversely to the two major concerns - high inflation and oil price hike.
But one asset, which seems to be inflation-proof, is real estate, which is now starting to show signs of softening, particularly with banks raising interest rates and loans getting more difficult.
With possibility of home loans becoming dearer, this is still a excellent time to buy property. Property experts even say switching to Tier II and Tier III cities is a good option.
With the RBI raising repo rates to 8.5 %, one can expect a decline in property prices. Experts predict a further slide in prices of 5-10 % over the next quarter.
“If the sentiment remains the same, the mortgage rates go up; they would impact the demand as well as prices. There will be further drop seen in both.” Anshuman Magazine, Chairman & MD, CB Richard Ellis, says.
So a drop in demand could force property developers to bring down to prices to help increase demand. Many builders, especially in Mumbai, are now offering discounts to attract buyers.
“If you have a good location, some money, and a good developer, then you must buy now and not wait,” BP Dhaka, COO, Parsvnath Developers, says.
Residential property prices have gone down by 15-20 % in the past few months across the country. For consumers, this may be a good time to buy a property but yes, bearing that loan may become tougher
So, an informed decision may help you clinch a good real estate deal that is facing a price correction in several parts of the country.
Also, the options to move to Tier II and Tier III cities can also be considered. According to experts property prices will go down in these cities even more as compared to the metros.

Contract Between Sunil Mantri And HTML

Fri, 27 Jun 2008 13:31:00 GMT

Contract Between Sunil Mantri And HTML

Hindustan Times Media Limited has purchased 0.65% stake in real estate foremost Sunil Mantri Realty for twenty crore rupees, which will be used by the latter to finance new projects.
Taking about the contract, Sunil Mantri Realty’s chief financial officer Mr. R. Arora said that this collaboration will enable the organization to achieve further planned goals of future. Sunil Mantri Realty has residential and commercial developments in Mumbai, Hyderabad, Pune, Bangalore, Solapur, Nagpur and Gwalior.

The company had recently signed a memorandum of understanding with MSC Cyberport Sdn Bhd Malaysia to work together in the development, construction, marketing and funding of Bandar MSC Cyberport, which is a 6534000 square feet project.

Thirty Billion FDI Likely In Real Estate In Next Decade

Fri, 27 Jun 2008 13:29:00 GMT

Thirty Billion FDI Likely In Real Estate In Next Decade

According to estimate made by ASSOCHAM, the FDI component in the domestic real estate market is expected to be thirty billion US dollar as against its total amount of one hundred two billion US dollars in next decade as the real estate sector escalation will raise up by more than 30%.
Additionally, ASSOCHAM report stated that, the domestic real estate market is expected to be of fifteen billion US dollars in which the FDI contribution is estimated around six billion US dollars. The bank credit to this sector in 2006-07 has been estimated around three lakhs crore rupees, which will multiple substantially in the future years considering the growth that the sector has been registering.
Mr S. Jindal president of ASSOCHAM said that presently the foreign developers can take on construction actions on a minimum space of fifty thousand square feet in consequence of which Indian real estate sector could achieve FDI’s component around six billion US dollars.
Mr. Jindal further said, “The upper limit of fifty thousand square feet would be lifted by the government as it is under continuous pressure for increased FDI’s which as per ASSOCHAM estimate will increase to two lakh square feet in subsequent decade in a gradual manner and result for much higher foreign capital absorptions”.

Impact Of Interest Rate On Real Estate And Housing Loan

Fri, 27 Jun 2008 13:23:00 GMT

Impact Of Interest Rate On Real Estate And Housing Loan

Indian real estate firms expect a hit on margins for the next few quarters as the central bank’s move to raise interest rates this week will push up costs and keep potential buyers away from the market.
Developers, already facing a demand slowdown, have refused to lower the price line as they seek to make up profits despite high land costs and curbs on funding. However, higher interest rates in the economy could push them to choose survival over pride.
The Reserve Bank of India late on 24th June raised its key lending rate and cash reserve requirement by 50 basis points each to curb price pressures. Inflation jumped to its highest in more than 13 years in mid-June to 11.42 percent.
As a result, lending rates of banks are seen close to 13 percent, levels last seen nearly a decade ago, while interest rates on home loans could go up by 50-100 basis points, putting off a large segment of middle-class buyers.
“Real estate prices had already started slackening, this move will lead to more slowdown,” said Ramesh Jogani, managing director at India REIT Fund Advisors, which has invested in several projects. “We see a 15-20 % fall in prices.”
Analysts say the slackening of demand is raising concern over future realizations, which is reflected in the performance of real estate stocks, with most close to their lowest level in a year and 40-60 % off their peaks.
“In the near term, we think affordability will be a bigger driver and a 20% correction in property prices will be needed by the year end to revive volumes,” UBS Investment said in a research note.

Developers Gamble On Eco-Friendly Buildings To Flatter Buyers

Fri, 27 Jun 2008 13:21:00 GMT

Developers Gamble On Eco-Friendly Buildings To Flatter Buyers

Top developers are now betting on green buildings. Green building ,so to say use less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building - to flatter large number of leaseholder. Even though green buildings involve an incremental cost of 7-10% over traditional buildings, developers see it as an opportunity for differentiation in a growing market.

The trigger is a growing environment consciousness among topnotch tenants, particularly the multinationals. In the request for proposals (RFPs) that are coming in, many MNCs are starting to ask the question about the green quotient. Jones Lang Lasalle-Meghraj chairman and country head Anuj Puri said, “It may not be mandatory today but going forward, many MNCs will make it mandatory”. Developers such as K Raheja and RMZ have decided to go all green.

RMZ’s 1.9 million square feet mall, RMZ Galleria, in Bangalore is currently under construction and will be a green development. So will be K Raheja’s Mindspace projects at Mumbai and Hyderabad, both of which are currently under development. According to CII-Indian Green Building Council (IGBC), 147 million square feet of green space has been registered in India to date across a total of 239 projects. At the moment, K Raheja is planning and developing around 14.5 million square feet of green space across the country. K Raheja associate vice-president Shabbir Kanchwala said, “We are looking at the long-term and want to be the first ones to go green in a big way”.

The Lodha Group, though, is getting into it only partially. Lodha Group senior vice-president Bharat Dhuppar said, “Only our commercial buildings will be green”. Lodha has about twelve buildings in the pipeline and most of them will be commissioned between 2009 and 2010.

In their projects, K Raheja expects the cost to be around 7-8% higher. The savings, though, will be considerable. Kanchwala declared, “We are looking at 30-40% power saving and about 20% water saving”. Further he added, “Also in construction, we try and use a lot of recycled materials — aluminum and glass — as well as mix fly ash with the concrete that is used”. The use of glass too is being reduced. Selvarasu said, “We keep the use of glass to the minimum, to about 35% in commercial and about 20% in retail”.

In a world where energy costs are going up by the day and investments in energy are peaking, a green building which saves precious energy and comes at the same rental for the occupier is a decent marketing tool for developers. Kanchwala said, “Many of our customers are Fortune 500 companies who understand and prefer green buildings”. Selvarasu said, “The future is in sustainability”.

Irish Life To Invest In Commercial Property In Asia and Europe

Fri, 27 Jun 2008 13:18:00 GMT

Irish Life To Invest In Commercial Property In Asia and Europe

Investors in this country are known to have an appetite for exotic investments.

Irish Life is tapping into this by giving investors an opportunity to invest in commercial property in Asia and Europe through two new funds from Irish Life — Eurasia Property Fund and Eurasia Property Plus Fund.

Irish Life is partnering with Hendersons Global Investors-one of the biggest property investors in the world — which currently manages property assets worth more than $23bn.

The Eurasia Property Fund will initially invest up to 75pc in commercial property with the rest invested in European property shares and cash. One quarter will be invested in European property in 13 different countries.

There is also the Eurasia Property Plus which gives exposure to properties in Japan and Hong Kong,other parts of China and India. The minimum investment is €20,000.

This is high-risk stuff and independent advice would be worth taking.

Hilton Hotels Corp Plans To Add 300 Hotels In Asia

Thu, 26 Jun 2008 14:02:00 GMT

Hilton Hotels Corp Plans To Add 300 Hotels In Asia

Hilton Hotels Corp plans to put in three hundred hotels to the existing forty seven in Asia over the subsequent decade, as the firm looks for to catch up with its competitors and cash in on the boom in business and leisure travel in India and China, a media report on 25th June said.
According to The Wall Street Journal Hilton, with nine brands ranging from the opulent Waldorf -Astoria Collection to the thriftier Hampton Inn, expect to administer the majority of these new hotels and leave the investment and ownership of them to others.
“The Asia region is one of our absolute top main concerns for our business and development. The plan is to put about three hundred new hotels in the region. We’d like to do better than that, but that’s our goal,” the report said quoting Hilton’s Chief Executive and President Chris Nassetta.
He also anticipated the value of these planned hotels to be in “the tens of billions of dollars.”
Hilton Hotels is a foremost worldwide hospitality company with more than three thousand hotels in seventy four countries and territories.
The newspaper quoting Nassetta said Hilton is concentrating initially on India, where it has a joint venture with local property firm DLF Ltd. that aims to open seventy five hotels within the subsequent five years.
“Starting in India’s big cities, where population density limits the availability of appropriate land for international -standard hotels, Hilton plans to set up its Hilton Hotels, Homewood Suites by Hilton and Hilton Garden Inn brands,” it noted.

Realty: Difficult To Buy And Rent

Thu, 26 Jun 2008 14:00:00 GMT

Realty: Difficult To Buy And Rent

Realty prices might be showing signs of easing, yet its tough to buy a house. Prices are still high and loans are getting expensive. Renting a property is also getting dearer.

According to analysts and developers residential rentals are hardening, registering a 10% growth. The demand for rented residential space is high as India has very low residential rental yields hovering around 3-6%

At the same time home loan interest rates are around 11% to 13%. While new property sales are slowing down, rentals are showing an upwards trend.

Many prospective home buyers are deferring purchase, expecting a dip in prices, and looking for renting accommodation in the short run.
“People are nervous about spending the capital they have in times of uncertainty. Therefore renting remains the only option. Though India is also unique as lot of people prefer to park money in residential projects and lock up apartments, which reduces the supply of apartments for rent, putting an upward pressure,” says global real estate advisory DTZ director Abhilash Lal.

Ansal Housing and Construction Director Kushagr Ansal points out, “Real estate yields in India are very low, pegged at 4-6%. This makes renting a lucrative option.”

Though new supply is being added to the pool of residential properties, it hasn’t really helped in stabilizing rents. Parsvnath Developers COO Dr B P Dhaka said, “New supply is not coming in the preferred centrally located residential areas. Also maintenance and construction costs have gone up in the last one year. All this has contributed to higher rentals.”

Omaxe executive director Vipin Agarwal points out, “Since residential rentals and lease are long term arrangements, there has not been a significant increase in rentals in last 6-8 months (for people already living in rented properties).’’

Proposal For Farmers In Mysore

Thu, 26 Jun 2008 13:57:00 GMT

Proposal For Farmers In Mysore

Mysore city authorities have a proposal for farmers who own land in and around the city: Part with your plot for nothing and get 18% of it back after it is developed and potentially more valuable.
The Mysore Urban Development Authority (Muda) thinks it’s offering a good deal to farmers as it competes with private developers for land to build public housing in a city where property prices have doubled in 18 months. Whether the offer will find takers is in some doubt.
A. Rudrappa, joint director (planning) at Muda said, “The objective is to give back farmers 18% of their own land, after it is developed, so that they get to retain the asset”. Further he said, “It will also prevent them from being cheated by builders who often don’t pay them the entire amount.”
Muda has 1.5 lakh applications pending for public housing in Mysore, the largest city in Karnataka after Bangalore, the state capital and India’s Information Technology hub. The agency’s inability to pay market price for farmland has driven landowners to private developers and sent property valuations soaring.

The 18% land-back offer is based on the average cost estimation of developed and undeveloped land that showed farmers would benefit even if they get back less than one-fifth of their original holding, according to officials at the urban development department in Bangalore.

Developed land would include access to amenities such as electricity, water and sewerage, enhancing its potential for commercial development.

Sudarshan Rao, a Mysore property consultant who has brokered land deals said, “For many farmers, land is a liability and they want to sell it off quickly to repay debt or start some new business. They wouldn’t wait for a period of two-three years till the land gets developed and he gets partial ownership of it”.

According to farmers, land demand is huge. Farmers are not sure what kind of development will happen and what would they earn after selling their land.
Developers have bought up large parcels of agricultural land in areas such as Nanjungud Road, T Narsipur Road, Hunsur Road and HD Kote Road in and around the city, in the belief that Mysore was the next real estate market.

In the last one year, top developers such as Unitech Ltd, Emaar MGF Land Ltd, Sobha Developers Ltd, Nitesh Estates and Total Environment System have acquired land in and around Mysore. But while developers rushed in and property prices soared, little development has taken place. Most projects are yet to break ground in the city that is still waiting for its first shopping mall.

Developers say that they are waiting for an opportune time to launch their projects. said Nitesh Mani, chief executive officer of Nitesh Estates, which plans to develop an IT park in Mysore, “Though many developers have bought land, no one is jumping into development right away”. Further he said, “It is important to choose the right kind of project in Mysore.”

Praveen Kumar, associate director at property consultancy Jones Land LaSalle Meghraj said, “Selling the land to private developers at market value would be a better option for landowners because they don’t know what kind of development and infrastructure that would come up on that land once they get it back”.