Monthly Archives: May 2008

TCS Reserves 1900 Crore For FY 08-09

Tata Consultancy Services (TCS), India’s leading software exporter, pronounced that it has reserved a capital expenditure plan of One thousand nine hundred crore rupees for the existing fiscal (2008-09).
In an pronouncement, the company said that the capex is 35.7% higher than the last year’s capex of Rs 14 billion.
Mr. S Mahalingam, Chief Financial Officer and Executive Director, TCS, stated that out of the total amount, around One thousand three hundred crore rupees would be invested in physical infrastructure, which includes buildings and real estate whereas Six hundred crore rupees will be used for developing technology. Read More »

Rs 100 crores will be invested by Inox in east India

After putting up 24 multiplex screens across cities like Vadodara, Kolkata, Mumbai and Goa in the last 6 yrs, the company has been silently signing up properties in Burdwan Rajarhat, Panditya Road, Haldia, Howrah, Jessore Road Asansol and even Siliguri to throw open multiplexes.

The total investment is estimated to be over one hundred crores rupees. The move, which is part of the company’s overall plans to scale up its presence across the country, is expected to shore up the group’s overall business from the eastern sector.

Alok Tandon, COO, Inox Leisure, said, “Kolkata and eastern India as a whole is an integral part of the company’s strategy. Going forward, we will have at least 18 multiplexes with 67 screens from just five multiplexes in this part of the country.”

“The future appears to have more in store. Following the hub and spoke model, Inox is planning more multiplexes in multiple locations. These will include cities like Bangalore, Hyderabad, Nagpur, Goa, Mangalore and newer hubs across Navi Mumbai.” Tandon added.

Outlining the corporate strategy, Tandon said the company would be spreading out across three-four fresh locations every year for the next two-three years. By 2010, the company intends to have at least 68-70 multiplexes with some 260 screens. Each screen, on an average, will find an investment of Rs 2-2.5 crores being ploughed in. The investments cover aspects like projection and concessionaire equipment, interiors flooring and false ceiling.

The company is looking at all options to give shape to its expansion programme. “If we get land at attractive price and the financial are viable, we may purchase the property and develop it ourselves or go for lease. We are also open to more acquisitions in the near future if the opportunity comes,” he added.

Sometime ago, the company had acquired Calcutta Cine Pvt Ltd (CCPL), a joint venture between Bengal Ambuja Group & its associates and Consolidated Entertainment Pvt Ltd.

Meanwhile, Inox Leisure board will meet on June 09, to consider recommendation of dividend, for the financial year ended on March 31, 2008.

Mapletree Starts Third Property Project In China

Mapletree, a property investment unit of Singapore state-owned Temasek Holdings, announced on Monday that its private real estate fund, Mapletree India-China Fund (MIC Fund), is developing a property worth US$320 million in China’s Guangdong Province.
This is MIC Fund’s third investment in China after its investments in a residential and retail development in Xi’an and acquisition of an office building in Beijing.
The Guangdong project will be jointly funded by Mapletree India-China Fund and Guangzhou Southern-Donald Scientific Technology Co, which holds 80% and 20% stake in the project respectively.
The project, located in the Nanhai district of Foshan city, is expected to be completed in 5-8 years.

UK property investors look to India

As property prices continue their downward spiral in Britain, investors here are looking to India, which is increasingly seen as a hotspot due to rising real estate prices across the country.

Every week, leading mortgage lenders and estate agents publish figures of declining prices, higher number of houses on the market, fewer buyers and smaller numbers of new mortgages being advanced. Read More »

Bhuwalka In Land Development Business

Bhuwalka Steel Industries Ltd and Soul Space Realty Ltd have signed a joint development agreement to unlock the value of the steel company’s land in Bangalore after it decided to relocate its TMT Mill to Bellary. Soul Space Ltd is a member of a leading real estate developer, B.L. Kashyap Group. The agreement envisages that the Bangalore property will be developed by Soul Space for commercial or retail purpose. About 1.3 million sq ft area is proposed to be built up and 40 % of the same would accrue to Bhuwalka Steel and remaining space will be retained by the developer. The value of property accruing to HTMT after the development will be about one hundred twenty five crore rupees. Bhuwalka Steel expects an annual rental income of Rs 12 crore from the space. Soul Space will bear the cost of the development and building of the structure, said a company official.

Overseas Investment Spurs Dubai real Estate Development

The real estate sector in Dubai is being driven mainly by overseas investment, with individuals and companies from other countries consist of 60-70 % of the buyers of freehold units.
2 out of 3 of all the new freehold properties in the emirate are bought by overseas companies or persons who live outside the country, says a study, which also divulges that property developers in Dubai have USD 100 billion worth of new development projects in hand.
MAG Group Property Development, which is looking to produce its portfolio of new property projects to more than USD 2.72 billion by 2012, says final home owners currently account for just 30 % of the market and only 5 % of them are UAE nationals.
“Motive for this phenomenon is investing in property in the UAE is seen as safe and rewarding and presently better than investing in bonds or stocks,” said MAG Group CEO Mohammed Nimer.
“Despite of many challenges, for example rising costs and shortage of contractors, the real estate sector in the UAE is still one of the most favored investment areas in the country. The return on the investment can reach as high as 40 %, an unbeatable figure,” he added.
Nimer said foreign investment by both developers and buyers, which represents 60-70 % of investment in freehold property, remains vital for the continued growth of the real estate sector.
Investors from Pakistan, India and China as well as other emerging markets such as South Korea and Brazil are increasingly showing interest in tapping lucrative opportunities in the UAE.

Omaxe Annual Business Report

Realty firm Omaxe on 26th may reported consolidate net profit of around four hundred ninety five crore rupees for the year ended 31 Mar 08, a more than two-fold jump over the preceding year.
The company had recorded a consolidated net profit of around two hundred forty four crore rupees in the earlier fiscal, Omaxe said in a statement.
The consolidated revenue rose by 60.26 % at Rs 2,307.75 crore in 2007-08 following solid demand in the property market, it said.
The company also pronounced a dividend of 25 % on equity shares for the FY ended 31 Mar 08.

Gayatri To Buy Five Infrastructure Companies

Infrastructure firm Gayatri Projects is all set to acquire five smaller infrastructure firms in the country, paving the way for its inorganic expansion. The company plans to fund these acquisitions through divestment of 49% equity in favour of Australian multi billion-dollar wealth management firm AMP.

The latter will bring to the table Rs 200 crore through foreign direct investment (FDI) for the planned expansion of Gayatri Infra Ventures (GIVL), a subsidiary of Hyderabad-based developer Gayatri Projects. Read More »

India In Top Three Favored Destination For Investment

India and China, the world’s two fastest growing economies, leads the list of best places for investment and development, driven by their current GDP growth rates, appropriate investment climate and substantial trade opportunities, a latest report says.

According to global consultancy Grant Thornton’s International Business Report 2008 on rising global Markets, China, India and Russia have emerged as the top three most- favored destinations for investment and development.

These are followed by Mexico at fourth and Brazil at fifth place. The study also revealed the presence of 22 other rapidly growing global economies, including Malaysia, Indonesia, Iran, Pakistan, Thailand and Poland, that offer immense avenues for future growth.

“Availability of low-cost yet highly educated labor force with strong work ethics, combined with fast industrialization, technology deployment and a strong focus on infrastructure development is enabling these countries to close the gap with the more affluent and relatively slower-growing mature economies,” Chatrath said.

According to current projections, China’s Economy would move ahead of the US by 2027, India would catch up with the US by 2050 and the BRICs (Brazil, Russia, India and China) as a group will surpass the G7 by 2032.

Emerging and developing economies’ will on an average grow by 6.3 % in 2008 and 6.4 % in 2009. In contrast, “advanced economies” are forecast to grow by 1.3 % during this period.

Omaxe Raises Rs 100 Crore Via Private Placement

Real estate firm Omaxe Ltd said on Monday that it has raised 1 billion rupees through private placement of debentures to LIC Mutual Fund.

The company also said that it is planning to acquire companies overseas, including in the United Arab Emirates.

IBull Realty Arm May Raise 286 Million US Dollar In Singapore

The trust, part of Indiabulls Real Estate Ltd., plans to sell 353 million units of Indiabulls Properties Investment Trust at between S$1 and S$1.10

Indiabulls Properties Investment Trust could raise up to $388.3 million (US$286million) selling units in a real estate investment trust (REIT) in Singapore, according to reports. The trust, part of Indiabulls Real Estate Ltd., plans to sell 353 million units of Indiabulls Properties Investment Trust at between S$1 and S$1.10. Read More »

With Rs 1 Crore Per Month, Rental Goes Through Roof

In April end, the London headquartered Barclays bank concluded negotiations to take on lease 15000 square feet of office space in CeeJay House, Worli, at a record-breaking rent of Rs 725 a square feet per month. This is so far the highest ever lease rental for any commercial property in the country. Read More »

Videocon Group Will Invest Rs 30-cr In Gujrat Realty

Consumer durable major Videocon Group has bought out a housing society off Ashram Road, one of Ahmedabad’s prime business areas, for over Rs 50,000 per sq yard in a Rs 30-crore deal.
The housing society, Lotus Society, is located along the Sabarmati river – where the ambitious Rs 2000-crore riverfront development project is coming up – is spread over 6,000 sq yards. The group plans to come up with a commercial complex and a five-star hotel.

Earlier, a city-based developer had tried to acquire the Lotus Society. Subsequently, a couple of other local developers had jumped into the fray and negotiated for the same property. However, Videocon signed the deal around a month ago.

The deal was struck with the help of local builders. According to industry sources, Videocon has already made part payments to the flat owners, who have signed an MoU with the company as per which they have to vacate their flats within a stipulated time frame.

Videocon Group had identified the land keeping the Sabarmati riverfront project in mind. The group is venturing into grocery and lifestyle retailing space through cash-and-carry format across the country. It has appointed KSA Technopark, Earnst & Young and Price WaterHouseCoopers as advisers for its retail plan.

The group has already appointed Subir Ghosh, former CEO of Essar retail, as head of its Planet M business. At present, the company is looking for suitable land in Ahmedabad, Kolkata, Aurangabad and Ahmednagar. The company intends to set up 40 stores across the country.

Each of these stores would be set up on an area ranging between 75,000 square feet and 1 lakh square feet. The group has plans to spend over Rs 5,000 crore on establishing its retail business in the next five years.

SEBI Issued Guidelines For MF Real Estate Schemes

After being on the backburner for over 7 yrs, the Securities and Exchange Board of India (SEBI) has released draft rules for mutual funds real estate schemes, bringing a lot of relief to the MF industry. SEBI has given authorization to two types of real estate funds.
While the first group is of real estate MFs (REMF), and the other group is Real estate investment trusts or REITS. REMF will spend in real estate projects and mortgage-backed securities. These will be closed-ended funds, listed on the exchanges. As their net asset values will be declared daily, investors will have the choice to exit any day.

EsVee Group To Develop Townships Across India

The Ahmedabad-based EsVee Group, promoted by Mr Vijay Kumar Gupta, Chairman and Managing Director of Gujarat Ambuja Exports Ltd (GAEL), plans to develop exclusive townships across India. The first of these chain-townships, at Mysore, is scheduled to be completed by 2010, on a 60-acre plot situated 1.5 km from the airport. The township, christened `Highlands’, would offer250 residential flats of three to five bedrooms and 150 villas – all fully furnished and air-conditioned.

Increase In Prices For Karnataka Real Estate Property

Real estate developers in Karnataka have decided to raise home prices by 3-8% from June 10, citing steep increases in the cost of construction materials and higher labour rates.

The price hike was “inevitable” because steel was dearer by 24% compared to its January level and cement prices were up 56% from the beginning of the year, Balakrishna Hegde, the president of the Karnataka unit of the Confederation of Real Estate Developers’ Associations of India said. The revision is the first of what could be a series of increases in the rates of residential properties.

CREDAI’s state chapter groups 124 real estate firms and includes the top property developers in Karnataka.

“Rising input costs have affected the cost of construction very harshly, increasing development costs by 20%-30%, depending on the stage of construction. Our members will increase prices by Rs 75 to Rs 500 per sq ft based on the location and the stage of construction,” Mr Hegde said.

The revision is the first of what could be a series of increases in the rates of residential properties as commodity prices escalate, pushed higher by soaring oil prices.

“What we are passing on is only a small portion of the increased cost of construction. We do not want to pass on the entire burden to at this stage, but will review the situation and take appropriate steps in the coming months,” he said.

Hunter Beer Maker Joins Realty Play With Madhya Pradesh Land Buy

The Bhopal-based Som Distilleries and Breweries, manufacturer of the Hunter beer, has acquired a 50-acre prime plot in Gwalior for Rs 266 crore from the Madhya Pradesh government. The company will develop a retail mall, a theme mall and two hotels — a star hotel and a budget hotel — as well as residential apartments, in the property.

The project, called Thatipur Gandhi Road Project, is a 60:40 collaboration with Patel Engineering and marks the brewing company’s foray into realty business. Sompel, the company in charge of the project, is promoted by Som Distilleries. Read More »

Realty Investors May Get Exit Route

A few real estate funds are looking for ways to offer an exit route for investors. They are in talks with some of the PE investors who can buy out the assets. This is primarily a precursor to a second fund that is being planned. REMF not comes into this category.

Sell the assets at a decent premium to PEs would help them generate a good return for investors, and thereby showcase the performance of the first fund.

The track record would help them attract new investors for the next fund. It may attract some old investors too.

Rental Prices Higher By 13% In Main Cities

After the fresh rise in real estate prices all over India, the reports are coming about rising rental prices in key industrial towns. A current report about rental prices in New Delhi has shown a 13 % rise in rental prices in year 2008.
Global real estate consulting company, Cushman & Wakefield has reported a rise of 7-13% in rental prices during the first quarter of this year. The demand is high and space for further development is limited. While in Gurgaon and Noida, the rentals have grown at 10-12 %.
Rental prices are higher in Bangalore, Mumbai, Chandigarh, Noida and Gurgaon as well. Real estate prices were lower during the first quarter of 2008. The prices had seen a good appreciation and there was a need for correction in the prices of real estate.
Small builders were having problem in selling their existing projects. According to recent reports, many small builders sold stake to real estate majors as they couldn’t bear the diminishing in prices of residential property. Real estate majors have lot of cash and can wait for the prices to stabilize. Home buyers and long term investors were waiting for reduction in prices while speculation based traders have reduced their exposure in most sectors.

Airport Upgrades Projected To Add 78 Million Square Feet Realty Space

Nearly seventy eight million square feet real estate space is expected to be added by 2015 due to forty seven airport modernization and upgrade projects.
The projects cover forty thousand acres across forty existing and seven new airports, according to the Airport Realty Report by global property consultancy Cushman & Wakefield.

The report says if the airports are modernized according to schedule, the non-aeronautical revenues may rise from the current 35- 54% by 2015. It is estimated that rent from retail, office and hospitality will constitute nearly 45 % of the airports’ non-aeronautical revenue by 2015. The rest will come from other non-aeronautical sources like trading concessions, public admission fees and miscellaneous income from advertising, car parking, etc. Read More »

Airports to emerge as business hubs

NEW DELHI: All new airports in the country will emerge as business nucleus with world class office, hospitality and retail space. The modernization and development of airports will not only provide the facelift to respective cities but also improve the real estate sector, said a report by Cushman & Wakefield. Read More »

Rs 600 Crore Revenue Generated By Delhi Metro In Ist Phase

NEW DELHI: Delhi Metro has produced six hundred crore revenue from the commercial use of its property during the first phase of the Metro project.
The real revenue generation is approximately double the target, thanks to skyrocketing commercial property prices and growing demand from retail sector and IT companies. Buoyed by the excellent response, DMRC officials expect that total revenue from property development would reach Rs 1,000 crore in a few years.
Earnings from commercial use of vacant land constitute around 30% of the total operating revenues generated by DMRC. In 2007-08, the company reported total operating revenue of Rs 327 crore, a 28% increase from Rs 256 crore in 2006-07.
“The revenue generated from the property development in the first phase of the metro project will contribute to our internal accruals, which will be used to finance the next phase of the Metro project. Still, there are some unoccupied areas that can be commercially used under the phase-I and we expect the total earnings from such commercial activity to reach Rs 1,000 crore. In the second phase, similar property development will be undertaken and we have targeted a revenue generation of Rs 405 crore from the same,” said a source.
Property development undertaken so far includes 6-12-year licence awarded for the spaces within station buildings for commercial related vendors such as ATMs, kiosks, refreshment and magazine stalls. Similarly, shopping malls have also been set up through developers on a license basis for the period of 12 years inside station buildings which have larger concourses.
Such malls have already come up at Inderlok, Netaji Subhash Place and Kashmere gate stations. DMRC has set up an IT park at Shastri park station which has been rented out to ITES operators. The company has undertaken some residential and commercial developments outside Shahdara and Inderlok stations through developers on a concession period of 30 years.

Existence Of 1BHK

A few years ago, DDA and GDA used to make one-bedroom flats in a big way. These one-bedroom flats can be seen in numerous parts of the capital, and in Ghaziabad. Thousand of people live in these flats with their families.

Nowadays, there are ample buyers for such one-bedroom flats; the prestigious real estate firms have almost stopped making one-bedroom houses. One has to really make an extra effort to figure out if any well-known builder is still constructing such flats. Read More »

Realty Is Facing A Major Cash Crunch

Land prices in the national capital region (NCR), Mumbai suburbs, Bangalore and Hyderabad have corrected by up to 25% as property developers slow down their land purchases. Poor sales and lower availability of credit at higher cost have prompted property developers to end the mad rush to acquire land. Some of the developers have even backed out of land deals which were agreed upon as the slowdown hit the sector.

Prices have come down by up to 25% in Mumbai’s distant suburbs, including Thane and Belapur, and pockets of Hyderabad and Bangalore, according to property consultancy firm Knight Frank India. Prices in the NCR, with an exception of Faridabad and Delhi, too have witnessed a correction of up to 25%. Land prices in Faridabad have risen 10-30% in the past 3-4 months. Read More »

Indian real estate Seeks Partnership With Israeli firm

The Indian real estate company Sigrun and a leading Israeli firm are in talks over a deal worth more than five hundred million dollar, as said by knowledgeable sources.
Most of Sigrun’s activities (95 %) are in residential property and the rest in office rentals, according to CEO and controlling shareholder Rajesh Nair. He said that the company’s profit in preceding FY was fifteen million dollar, and if everything goes as planned, this year it will be forty million dollar. Read More »