Monthly Archives: April 2008

India wants to conclude trade pact with EFTA in a year

New Delhi : India on Tuesday said it wants to conclude a Free Trade Agreement with a smaller four-nation European Free Trade Association (EFTA) before end of this year, even as its determined trade pact with the European Union seems to have run into differences.

“Negotiations on the FTA will be commencing soon. We believe that we will be able to finish the EFTA trade agreement within one year,” Commerce and Industry Minister Kamal Nath told reporters here after meeting Swiss Federal Counsellor Doris Leuthard.

EFTA states include Iceland, Liechtenstein, Norway and Switzerland. It is an inter-governmental organisation to support free trade and economic integration between the four nations.

India and EFTA had agreed to launch negotiations on the broad-based trade and investment agreement in January this year, following recommendations of a Joint EFTA-India Study Group set up in December 2006.
The agreement is likely to include trade in goods, services, investment, intellectual property rights and technical cooperation.

Negotiations on the India-EU Comprehensive Economic Cooperation Agreement, encompassing both trade and investment, seem to have hit a roadblock with differences over the list of items which could be thrown open for trade without barriers.

Nath added that India attaches importance to Geographical Indications and Intellectual Property, which would be incorporated into the trade agreement. EFTA-India trade stood at about 2.7 billion dollars in 2006.

Understand The Risks Involved In Real Estate MFs

Mutual fund (MF) houses are rejoicing the securities and exchange board of India’s decision to allow MFs to launch real estate schemes. In fact, they have been waiting for almost two years to get the nod from the stock market regulator. For late comers, you don’t need lakhs or crores of rupees to invest in real estate anymore. You can buy a share of the pie with few thousands, just like you do in any other MF scheme. Read More »

DLF may take up slum rehab projects in Delhi

Real estate major DLF is drawing plans to take up slum development projects in Delhi, which, though fraught with political risks, could see business worth thousands of crores.

A senior DLF official said, “We are preparing an elaborate plan to develop slum areas in Delhi. We have received a very positive response from chief minister Sheila Dixit about it. We will shortly submit the proposal to the government”. He didn’t give details as the proposal is yet to be finalised, but said the project “is going to be big”. A DLF spokesperson, however, denied that the company is working on any such project. Read More »

Rising material costs push up prices in the housing sector

NEW DELHI: The rising steel and cement prices during the past few months coupled with the global hike in the prices of metals has come as a “rude shock” for those constructing their “dream houses” and more so for those who dreamt of a house of their own.

The fallout of the rise in input costs for the housing and real estate sectors has led to massive escalation of costs badly hitting the demand among the middle class and upper middle class strata. The situation has become worse for the lower strata of society.

The real estate market is in a tizzy with demand for housing witnessing a sudden drop and the developers caught in a dilemma whether to revise the property prices or wait for things to stabilise.

Vineet Manchanda, Managing Director of Delhi-based Manchanda and Manchanda Builders, said the rising inflationary trend has resulted in prices going up for all commodities. This has adversely affected the buying power of the common man.

“In the field of real estate, the increase in the prices of the raw materials has impacted both the developers as well as the real users and the situation looks pretty disturbing,” he added.

Housing Loan Growth Rate Drops By More Than Half

With interest rates remaining high and real estate prices yet to show any decline, the growth in demand for housing loans is on the decline. The growth in housing loans, which was 25.8% (Rs 46,019 crore) during the period ended February 16, 2007, has declined to 12% (Rs 26,930 crore) during the period ended February 15, 2008, the Reserve Bank of India (RBI) has said. The outstanding housing loans as on February 15, 2008, is Rs 251,688 crore. Read More »

Realty stocks gain ground

Realty stocks, which opened on a subdued note this morning, are among the prominent gainers in afternoon trade. Mirroring investor interest for these stocks, the BSE Realty index has spurted 3.7% now. Sector heavyweight DLF has gained nearly 7% at Rs 715.

Unitech, a Nifty component, has posted a gain of 4.6%. Penland, HDIL, Sobha Developers, Ansal Infrastructure, Omaxe, Parsvnath Developers and Mahindra Lifespace have gained 2.5% – 4.5%. India Bulls Real Estate has gained 1.5% at Rs 548.90. Anant Raj Industries is up with a modest gain of 0.65% at Rs 298.

Hindalco has jumped by 5.8% to Rs 197. HDFC has come off its high of Rs 2881, but at Rs 2846, still remains high up in the positive territory with an impressive gain of 4.65%. Jaiprakash Associates is up with a gain of 4.25%.

Satyam Computer Services, which zoomed to Rs 486.90 this afternoon, is up with a handsome gain of 7.75% despite having eased a bit to Rs 477.15. Infosys Technologies has notched up 4.4%. Wipro and Tata Consultancy Services are up by around 4.25% and 3.5% respectively. A host of other stocks from the IT space have also recorded handsome gains.

Reliance Industries, State Bank of India, Tata Steel, Larsen & Toubro and Grasim Industries are up by 2% – 3%. Ranbaxy Laboratories, Reliance Energy, Hindustan Unilever, ICICI Bank, Ambuja Cements, NTPC and ACC have also moved up sharply.

Out of 2663 stocks seen in action on BSE, 1546 stocks are up in the positive territory. 1058 stocks have posted losses and 59 stocks trade flat.

Unitech To Launch A Mid-Income Project

Unitech Ltd plans to launch a mid-income project of 1,200 square feet houses in Greater Noida at Rs.2750 – sees potential demand. This will be followed by Residential launches in Chennai and Hyderabad shortly. The company is also accumulating more land parcels in Mumbai through slum rehab, will disclose once formalities completed. Read More »

Deutsche Bank Arm Views Scope In Realty

Just when it seems that the realty run is almost over, a Deutsche Bank arm has announced an investment of over $1 billion over the next three years in the Indian real estate sector.
RREEF Alternate Investments, the global alternate investment management business of Deutsche Bank, today announced that it would invest over $1 billion in different realty projects in the country.
Read More »

Tata Realty Builds IT Park

Tata Realty and Infrastructure Ltd declared about agreement with the southern state of Tamil Nadu to build a special economic zone for information technology.

The project, which will see an investment of more than 30 billion rupees, will include a convention centre and a luxury hotel and serviced apartments that will be built in a joint venture with Indian Hotels Co Ltd, another Tata group company. Read More »

Kolkata Playing Catch Up

Kolkata, which had lost out to other metros in the frenzied run for realty, is catching up big time.

This week the Apeejay group, which owns The Park Hotels, bagged a prime 3.35-acre property along Kolkata’s eastern metropolitan bypass for Rs 135.77 crore. The group, which already has a hotel on Park Street in downtown Kolkata, will build a 300-room luxury hotel on the plot. For company, it already has the ITC Sonar Bangla luxury hotel on one side and the proposed DLF-Hilton Hotel on the other. Then, Webel, the government agency to develop IT and electronics services, formed a joint venture with private property player Akash Nirman Ltd to set up a 1,200-acre IT township near Rajarhat on the north-western fringes of the city. The government will parcel out part of the land to Infosys (90 acres) and Wipro (50 acres). The IT majors, which already have a large presence here, had been waiting for fresh land allotments for quite sometime.

Most of the city’s hoardings announce a new township or a hotel or a mall every week. The pace has been dramatic. While office space, home realty, retail and hospitality are growing rapidly, real estate activity is high in the city’s northern, southern and western peripheries. Says Abhijit Das, MD, Kolkata, Jones Lang LaSalle Meghraj, India, “The office space market is currently witnessing a huge upswing in terms of demand, supply and price appreciation.” The residential sector, adds Das, is doing equally well and is witnessing steady growth in consumption and pricing. As for retail, there are eight malls in the city with 12 more slated to come up by 2010.

Effect of Economy On Real Estate Sector

India is taken as the one of the fastest rising economy in the world and in this present economic status, real estate has appeared as one of the most beneficial investment sectors for domestic as well as overseas investors. The economy and the real estate sector in particular are high on its ride to prosperity. Read More »

Indian Property Expo In Qatar

Doha: All most thirty builders from various parts of India are showcasing their projects at Homes of India, the largest Indian property expo in Qatar, at the Ramada Plaza hotel.
The two-day expo was opened yesterday by Dr Mohan Thomas, President of the Indian Community Benevolent Fund. Read More »

CB Richard Ellis Opens New Office In Kolkata

Real Estate consulting firm C B Richard Ellis (CBRE) on Friday announced the opening of a new fully operational office in Kolkata.
With the opening of this office, CBRE has increased its presence to 30 cities.

Mr. CB Richard Ellis (South Asia) Chairman and Managing Director, Anshuman Magazine, said, “The opening of Kolkata office signals the next step to expanding our presence to answer the growing business demand. Over the last year, Kolkata has grown as a city offering a number of commercial, retail and residential options for businesses. It is the right time for us to be present there”.
The Kolkata office would help CBRE reach the eastern part of India and thus cover all the regions of the country.

Indians Buy Dubai Fancy Homes For Up To Rs 95 Crore

Rich and famous Indians at home and super-rich Indian expatriates here have become the second largest ethnic group to buy into the world’s first fashion-branded Palazzo Versace lifestyle resort, which is soon to be launched from London.

Indian interest in the global rollout on April 29 of Palazzo Versace, a 169-residence complex on Dubai’s waterfront with prices starting at £1,850,000 (Rs 14.6 crore) and progressing to an eye-popping £12 million (Rs 95 crore), is seen as an emphatic illustration of the “desi dollar’s” burgeoning buying power and Indian thirst for brand-focused luxury. Read More »

Property Investment Check List

Money invested in real estate, for income and capital growth, grants stable and expected returns, parallel to bonds. Like other investment option, this too, has certain threats attached to it. Following are the elementary factors affecting the value of a particular property.

Location: The location of a building is a important factor in determining its market price. A property investment is likely to be held for some years and the attractiveness of a given location may change over the holding period. As such, part of a city may be undergoing regeneration, in this case the perception of the location is likely to improve. In contrast, a shopping center development may affect the appeal of an existing residential property.

Physical characteristics: The type and utility of the building will affect its value. Utility refers to the benefits an occupier gets from using the building. The risk factor is depreciation.

Tenant credit risk: The value of a building is a function of the rental income that you can expect to receive from owning it. If the tenant defaults, the owner loses the rental income. However, it is not just the risk of outright default that matters. Read More »

Parsvnath Launches Commercial Mall Project In Jamnagar

Realty major Parsvnath Developers said it has launched its first integrated commercial mall project at a cost of Rs 120 crore in Jamnagar, Gujarat.

Parsvnath Developers launched its first integrated group housing and commercial mall project in Jamnagar, which is being developed on total land area of 13,200 square meter with an expected realization value of Rs 120 crore spread over three financial years, the company said in a filing to the Bombay Stock Exchange.

Parsvnath has two projects in Ahmedabad where the company is developing mall cum hotel project at Vejaipur and commercial project in Vastrapur.

Leading Real Estate Firms Looking For Thatipur project in Gwalior

Almost twenty three leading real estate firms are looking the Thatipur project in Gwalior. Reliance, DLF, Parsvnath and Gammon are in the tussle to bid for the jumbo project, of which the bid submission will stop on May 7.

The MP government has not set a reserve cost for the project. The bidders have been asked to quote speculative cost.

The state government has roped in India Infrastructure Initiative Facility of IDFC and Feedback Ventures as project consultant for selecting the developer of the project.
After the bidding is over for the Central Business District project in the prime business locality of New Market in Bhopal, Thatipur will attract mega investment under the “re-densification scheme”.

Unlike the Bhopal project, which obtained three hundred thirty eight crore from Gammon India for infrastructure development on fifteen acres for a lease period of thirty years, the winning bidder will be awarded the Thatipur project on ninety five years’ lease and will be asked to develop residential and commercial complexes on fifty acres in an integrated manner.

Mehran Heritage will come up in Jodhpur

Jodhpur-based High Pointe Real Estate Pvt Ltd plans to come up with a heritage boutique hotel, Mehran Heritage, in Jodhpur by November 2008. The hotel is mainly targeted at foreign and business travellers that come to Jodhpur, due to its proximity to business centres like New Delhi and Jaipur.

Mr. Mukesh Agarwal, Director, Mehran Heritage, said, “Rajasthan has an intriguingly rich cultural heritage that draws travellers, not only within India, but also from abroad. This project will be an endeavour to showcase some of this rich heritage”. The 20 room property is situated on one acre in the south wing of the ‘Nimhera House’, which is Maharaja Thakur Shaitan Singh of Nimbhera’s old home. The company has invested over Rs one crore to refurnish the palace.

No Chance Of Slow Down In Hotel Industry

Hotel industry in India has shown strong growth in last financial year. Though hotel occupancies in Bangalore, Hyderabad and Pune dipped marginally owing to over capacity, average room rates for branded hotels across star categories continue to witness robust growth in most cities.

Read More »

Red Fort to invest Rs 3,500cr via FDI route

Red Fort Capital Advisors, a real estate equity firm, will invest three thousand five hundred crore in residential and hospitality projects all over the country, including seven hundred crore in Chennai.
The funds will be channelized through the foreign direct investment (FDI) route. The money will be invested in real estate projects such as commercial, residential, land and retail. The company manages a nationwide land bank of around one thousand acres.
The Mauritius-based equity firm has so far parked around one thousand crore in residential and commercial projects in Chennai, Bangalore, Hyderabad, Kolkata, Mumbai and Pune. The company is looking at property investments in about fifteen other cities that have high income and employment growth and cheaper land.
Kuldip Chawlla, director, Red Fort Capital Advisors, said the company plans to build reasonable flats costing Rs 15- 40 lakh. These flats will have an area ranging from 900-1,200 sq ft.
The company will target the middle income groups, earning between Rs 6-11 lakh yearly.
Red Fort will develop the low-cost houses in company with the Bangalore-based Prestige Group and Hyderabad-based Indu Project.
The investors in Red Fort Capital comprise international governments, pension plans, insurance companies, foundations and endowments.

Royal Group, GTC in Race to Buy 26% in Raheja Group’s Engineering SEZ

Royal Group of UAE and Netherlands-based GTC Real Estate are in the race to acquire 26% stake in the Delhi-based Raheja group’s engineering SEZ in Gurgaon for Rs 500 crore. It has been learnt that the Raheja group may ink the deal with either of the two groups in the next few weeks.

Raheja Developers MD Mr. Navin Raheja declined to comment on the development, but said his company was in talks with some investors to sell equity stake in its SEZ. The 257-acre SEZ project is being valued at Rs 4,500 crore with the land component accounting for almost half of it. The foreign investor will initially take 26% stake in the SEZ for around Rs 500 crore and May later bring in more funds towards construction cost. Read More »

Delhi NCR Rents may Stabilize Next Quarter

Rentals in the National Capital region are expected to stabilize in the next quarter as supply is set to increase Gurgaon and Noida. According to commercial real estate services firm CB Richard Ellis, rentals are expected to be stable in the next quarter as the supply is set to increase significantly in Gurgaon and Noida. However, no significant change in supply is expected in Delhi except in Jasola where an additional 500,000 sq ft is expected to be added in the second quarter. Read More »

Rs 1,000 cr via third fund will be raised by Indiareit

Indiareit Fund Advisors, the Ajay Piramal-promoted real estate investment fund, is planning to introduce its third domestic fund to raise Rs 1,000 crore.

Talking to DNA Money, Ramesh Jogani, the fund’s CEO and MD, confirmed the development but did not disclosed details.
Jogani said, “In the subsequent two years we will introduce our fourth domestic fund. We are also focusing on the retail sector.” The company has earmarked one-third of the funds for investment in retail sector.
Indiareit’s second offshore fund has previously raised $450 million from 3i Plc, which is a cornerstone investor in the fund.
ICICI Bank is the chief distributor of the offshore fund which would be closed in eight years.
Additional investors include high net worth individuals from Middle East, Singapore, Japan and Europe.
The second offshore fund is planning to raise $600-850 million through a green shoe option. The fund will have three closings, of which first closing will be on July 2008.

The main cities where the funds would be implemented are:- Mumbai , Pune, Bangalore, Chennai and Hyderabad.

Indiareit, at present, supervises funds worth $470 million, which it mopped up through its earlier two domestic and one global offerings.
About 85% of these funds have already been disbursed and rest would be deployed in the next few months.
According to a assessment report, the company’s investments have developed over two-and-a-half times during 2008.
In Pune, Indiareit had invested in Paranjape Schemes residential-cum-commercial project on eight million square feet land through a special purpose vehicle called Flagship Infrastructure Pvt Ltd. The project is expected to be ready by September 2012.

Naredco for cheap housing

National Real Estate Development Council (Naredco) is organising a National Conference on ‘Affordable Housing for All’. It will be held in New Delhi on 21 and 22 April 2008. The conference will be supported by Ministry of Housing and Urban Poverty Alleviation, Government of India and UN Habitat. Some of the other issues that will be discussed at the conference are: finance and taxation in the real estate industry, legal and regularity reforms needed, demand and supply of commercial space, use of new materials and technologies, and disaster management in housing.