Monthly Archives: June 2008

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. Read More »

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.

Unitech’s Annual Profit Loss Statement

Unitech Limited, India’s foremost Real Estate Company on 27 June 08 announced its audited consolidated financial results for the FY ended 31st March 2008.
Total income rose by twenty six percent to Rs. 42,801 million, as against Rs. 33,881 million during the preceding financial year. Profit after tax (PAT) also jumped by twenty seven percent to Rs. 16,618 million, as compared to Rs. 13,058 million in the year ended March 07. Board of the company in its meeting on 27th June also suggested a dividend of 12.5% for the fiscal year ended March 2008.
The Earning per Share (EPS) stands at Rs. 10.23 on an equity base of three thousand two hundred forty seven million rupees. Total paid capital is represented by 1,623 million equity shares of the face value of rupees two each.
The company has a reserve base of Rs. 33,232 million as of 31st March 08. Total Loans outstanding as of 31st March 2008 is Rs. 85,523 million. Company has Rs. fourteen thousand eighty two million rupees in cash and bank balances as of 31st March 2008.
Mr. Sanjay Chandra, Managing Director, Unitech Limited, said, “This performance is a outcome of the high growth plans that the company has been pursuing over the preceding few years. We are at this time working on an exciting repertoire of projects and are sure of outperforming the sector in the days to come.”

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. Read More »

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 advise would be worth taking.

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. Read More »

Hi-tech City Project In Kochi

Kochi will soon get international status with the upcoming of hi-tech city project worth five thousand crore rupees. The Bangalore-based Shobha Developers have signed up a MoU with the state government for setting up this hi-tech city. Sobha Hi-Tech City will be an incorporated city with focal point on research and development, knowledge dissemination, information technology and pure and applied sciences. The city is situated close to the NH 47 bypass close to Maradu in Kochi. It will have seven million square feet of knowledge park, commercial space to provide business-friendly environment, hospitality and leisure projects, entertainment and amusement facilities, a marina and residential complexes. The project will be completed in 8yre and would produce seventy five thousand straight jobs.

Rate Hike To Delay Realty Projects

Real estate developers see further slump in demand and price correction due to RBI’s move to raise interest rate. Caught between slow demand and rising cost of capital and construction, developers are deferring launch of new projects. Some even fear that ongoing projects may get delayed.

Indiabulls’ group spokesperson Gagan Banga said, “Interest rate hike has dampened the sentiment in the real estate market, which will result in further slowdown. We see 5-15% price correction in the real estate sector in the next few months depending on the project and its location”. Read More »

Malls In Small Towns

Now small towns will also have value malls. Mirroring its cinema infrastructure model, E-CITY Ventures, part of the Essel Group, is setting up forty-five value malls aggregating ten million square feet in emerging real estate cities.
Mr. Atul Goel, CEO, E-CITY Ventures, said, “For this project, we are looking at equity funding of Rs 450 crore”. Further he added, “Talks with private equity players are in advanced stages”. Read More »

SEZs May Get Easier Fund Access

SEZ developers in India will be able to get easier access to funds and at cheaper interest rates if the government goes ahead with a proposal to give infrastructure status to the sector. The commerce department has decided to make a strong case for grant of the status to SEZs with the Reserve Bank of India. Officials from the commerce department and the RBI are scheduled to meet soon to reach a decision on the issue.

Commerce secretary G K Pillai is scheduled to meet RBI deputy governor Usha Thorat shortly to discuss whether SEZs deserve to be included in the core sector. Read More »

Mittal buys 3rd property in Kensington Palace Gardens London

NRI steel tycoon Lakshmi Mittal has bought his third major property for seventy million pounds in Kensington Palace Gardens, London’s most expensive street.
Mittal, whose fortune is estimated at twenty seven billion pounds, already owns two big homes in Kensington Palace Gardens where Princess Diana spent her last years.
The most recent purchase of the former embassy of the Philippines from Hedge fund tycoon Noam Gottesman came a month after Mittal bought Britain’s most luxurious house for one hundred seventeen million pounds on the street nicknamed “Billionaire’s Row”, ostensibly for his son Aditya and his family.
The seventy million pounds price tag for Mittal’s latest property is all the more amazing as the former Philippine Embassy is in need of modernization, the source said.
The 16,250 sq feet home is also not the biggest in the road but it looks on to Kensington Palace.
58-year-old Mittal, Britain’s richest man, himself lives in a home in Kensington Palace Gardens which he bought for fifty seven million pounds 4 years ago and is three times-bigger than his latest acquisition.
The Mittals have carried out considerable improvements to their main home which is perhaps the largest private house in central London after Buckingham palace.
Mittal is believed to have offered two hundred million pounds for a property owned by Foxtons founder Jon Hunt on the street.
In March 2008, Mittal was named as the world’s fourth wealthiest person by Forbes Magazine. His family owns forty four per cent of steel giant ArcelorMittal.

Dubai-based ETA Star Real Estate Firm Plans To Enter Asian Markets

Dubai-based ETA Star real estate firm plans to utilize its funds to develop 120 million square feet of land in India.

Dubai’s ETA Star Property Developers mulls a fund of $400 million via Islamic bonds to enter Asian markets as diverse as India and Laos. The real estate firm is planning to utilize its own funds to develop 120 million square feet of land in India, and enter other markets in Asia.
ETA Star Property’s executive director Abid Junaid said: “We’re talking to institutional investors to raise $250 million in a first tranche. ETA Star also wanted to raise $100 million to $150 million in Islamic bonds, or sukuk, as Sharia-compliant products are very much in demand in the Middle East.”

ETA Star is one of several Dubai-based real estate firms, including Emaar Properties and Nakheel, that have joined a wave of foreign investment in Indian property market since the country eased rules on inward investment in the realty industry in 2005.

Britannia To Sell Bangalore HeadQuarters

Nusli Wadia-led biscuit major Britannia Industries is believed to be exploring the possibility of selling its much-storied corporate headquarters in Bangalore.

Multiple sources confirmed that internal discussions to this effect have taken place in recent months, and the company appears to have sounded off real estate consultants to quietly scout for potential suitors.

One of the options being mulled was to shift the corporate office to Mumbai, where the Wadia Group is based. While Britannia has not given any active mandate to sell the 6-7 acre freehold property, analysts said the campus located on the city’s arterial old airport road, leading to the IT corridor, may fetch as much as Rs 35 crore per acre. Read More »

Asia Property Investment Up 27 Percent In 2007

According to consultants Jones Lang LaSalle, Property investment in Asia reached a record $121 billion in 2007 up 27 % from the previous year.

And while the credit crunch took its toll in Europe and North America in the second half of the year, pushing down global transaction value by 8 % from the second half of 2007, investment in Asia surged 22% in the last six months.

Data from Jones Lang LaSalle shows transaction volumes globally in the first five months of 2008 were 40% lower than in the same period last year, dragged down by weaker activity in Europe and the United States.

DLF To Get 5000 Acres Land Less Than Market Rate

Real estate developer DLF will soon get around 5000 acres near Greater Noida at less than market rate under the Taj Expressway Industrial Development Authority’s (TEA) scheme. Jaypee group, too, has qualified for allotment of 2,500 acres, while Unitech and Punj Lloyd are in queue for 2,500 acres each.

TEA additional CEO C S Verma said that the authority will complete the process of acquisition of 7500 acres in a quarter, following which it will be allotted to DLF and Jaypee group. He said, “We are negotiating with farmers and should be able to finalize the acquisition rate in the first week of July. Once the rate is finalized, it wouldn’t take us long to acquire the land”. Read More »

The Best Time To Launch REMF

The Indian mutual fund industry should concentrate on the requirements of investors. The rules with consideration of investor’s protection and the clearness in terms of information disclosures in 3-month and year-wise reports should be taken care of. The report should include the detail of the funds corpus invested in different asset classes and it should also include market conditions. Read More »

Real Estate In Dehradun

Dehradun is the capital city of uttranchal. It is located amidst Himalayan ranges. That increases its beauty by many folds and delivers peace and tranquility to the residents. Currently real estate market in dehradun is pretty good with all top realtor firms entering the city. With top firms investing heavily in massive residential projects and IT projects.

Real estate properties of Dehradun have soared to a new high in last few months. Real estate of Dehradun is undergoing a redefining change, thanks to group housing projects and raising real estate prices. Commercial properties of Dehradun have seen a sea of change in last few years. Dehra Dun is now home to many multiplexes and many Cineplex.

Dehra Dun is also home to many prestigious institutes of India. Some of them are the Doon school, Indian military academy (IMA), St Thomas high school, Welhams Schools, Army Public School, CJM School, and many more. These premier institutions attract many students from all over the country. Because of migrant student community, local real estate is registering many searches.

In recent times commercial properties and housing properties have flourished and also increased in number. This is due entry of top builders and developers in to Dehradun real estate scene. Uttaranchal is newly formed state and as the Dehradun is it capital city; all efforts are being made by the state government to develop it in to industrial city. Major real estate players in Dehradun are GTM Builders and Promoters, Emaar-MFG Builders, Dehradun and Parsavnath Devlopers , Uttarnchal Devlopers , Mussorie Dehradun Devlopment Authority …etc. Because of rapid development, Dehra Dun is all set to become next BPO and IT/ITES hub. With many SEZ coming up in Dehradun , and with government policy of 100 % tax exemption for ten years from central exercise and also income tax exemption for next five years , housing and building companies are competing to develop undeveloped lands of Dehradun . Most of these home and housing companies are developing state of art technology parks , five star and three star hotels and entertainment resorts and theme parks . With all these construction projects set to become reality in next five years Dehradun are all set to set standards of infrastructure in the country.

British Midland Expecting Forty Investors In Next 3 Years

British Midland, a UK government-funded organisation, dedicated to attracting international businesses to the region comprising East Midlands and West Midlands, is eyeing around 40 investors from India across various sectors in the next three years.

East Midlands Development Agency’s Director David Wallace said,”We are looking at investors especially in sectors such as automotive, aero-space, transport technology and IT among others,” .

It is more advisable to invest in Midland rather than in London as property prices are lesser by 50 % and labour costs are lesser by 25 % than London, he said.

Moreover, the manufacturing base has all international operations besides availability of skill-sets, he said.

Commenting on China, he said that significant investments were not expected from the country in the region in the next three to four years, although it is considered as an important destination. “Our focus on China has been more on trade and business than on investment into our region,” he said.

Some important Indian companies that have invested in the British Midlands are Tata Consultancy Services, Tata Motors, Tata Steel, State Bank of India, Bank of Baroda, Brunton Shaw UK Limited among others, he said.

“Signs of a slight slowdown in decision-making in investments will be witnessed in the coming years due to the US recession and credit crunch,” he said.

It would be a global phenomenon as investors would be careful about investing, he added.

Mega Realty Deals Dot Delhi’s Golf Links

The real estate sector might have hit a rough patch of late, but that has not stopped India’s rich and mighty from striking housing deals in Delhi’s elite areas at fancy prices.

Three low-profile but high-value transactions worth Rs 300 crore have been closed in Central Delhi‘s posh Golf Links locality, where infrastructure major GMR, a prominent auto dealer, former prime minister IK Gujral’s son Naresh Gujral and a politician have each bought a house in the past two months. Read More »

CHD Developers Will Invest 1000 Crore In Various Projects

Real estate developer—CHD Developers have firmed up plans to pump in Rs 1,000 crore into various projects over the next 3-4 years. The developer plans to raise the money from the market as well as plough back the profits.

The company will be developing group housing projects as well as commercial complexes. “We have a proposal to set up retirement lifestyle housing project for the retired people,” said RK Mittal, chairman and managing director,

CHD Developers. He further informed that the company targets to build resorts and luxury housing for people above 55 years of age. “These projects will come up in Haryana, Rajasthan, Mathura and Rishikesh etc. We will be designing the resorts in consultation with an Australian expert and things will be finalised soon.”

CHD Developers has recently opened bookings for residential plots at its mega project, the CHD City, an integrated township spread across 200 acres on GT Road in Karnal, Haryana. “About 500 plots are already booked and now we have opened the booking for 200 more. Next stage will be to launch villas, commercial spaces and apartments. A shopping mall is also coming up in the township, which will have 2 cinemax screens. We are also developing group housing project in Vrindavan and Haridwar. Plans are in the pipeline to develop about 350 villas in Ludhiana over 50 acres and the plan will be finalised soon,” said Mittal.

The company has delivered projects covering more than 700,000 sq. feet area and proposes to develop more than 10 million sq. ft. area in the next few years. Its turnover in the year 2007-08 was Rs 70 crore and target for this year is Rs 100 crore.

Cost Of Housing Projects Increase Due To Delay In Clearance

A day after HDFC chief Mr. Deepak Parekh stated that environmental clearances were leading to time delays and hence cost overruns in housing projects, industry body Confederation of Real Estate Development Association of India (CREDAI) has put a number to it.

CREDAI Secretary Rohit Raj Modi said that these add at least 10% to 15% to costs, which ultimately has to be passed on to consumers. Read More »

Orbit Corp Plans Township In South Mumbai

Real estate firm Orbit Corp Ltd expects to add new projects worth 8-10 billion rupees in 2008/09, as it sees strong demand for redevelopment projects in South Mumbai, its main area of operation. Read More »

Goldman Sachs Picked Pinority Stake In Sterling & Wilson

Goldman Sachs, the global financial powerhouse, has picked up a minority stake in Sterling & Wilson, a Shapoorji Pallonji group company, for $50 million. No further financial details were available.

Sterling & Wilson is one of the leading mechanical, electrical and plumbing (MEP) contracting companies in the country. It is one of those few companies in India that offer this kind of services, people acquainted with the industry said.

The fund infusion by Goldman Sachs would supplement the existing support from the Shapoorji Pallonji group and enable the company to increase its growth plans both domestically and internationally, a top company official said. Avendus Capital was the financial advisor for the transaction.

While realty industry as a whole is estimated to grow at an annual rate of about 20% for the next few years, there’s a growing trend towards consolidation and organized structure.

Realtors Eye Huge Profits From Reasonably Priced Housing

Reasonably priced housing, the most neglected segment of the real estate sector, is now magnetizing significant investments from developers plus private equity funds.
While real estate majors like Ansals and Omaxe are planning low-budget housing projects in smaller towns and cities across the country, private equity players are firming up huge investments for this sector. Read More »

IHC To Spend One Billion Dollar On Buying Hotels

Indian Hospitality Corporation (IHC), a joint venture of Gordon House Hotels, Mars Restaurant and SkyGourmet Catering formed last year, plans to spend as much as $1 billion to acquire hotel groups and restaurant chains.

The company has hired Ravi Deol as chairman and chief executive of Mars Restaurants, the hotel and food services division of IHC, to initate acquisitions. Deol is the former managing director of Barista and ex-chief executive of FieldFresh Foods. Read More »