Monthly Archives: April 2012

The Orris Curio City.

April 9, 2012 – 1:06 pm

Orris Group presents a new project on Noida Expressway the project name is Orris Curio City which means Anokhi Kalatmak Vastuyain, Orris Curio City offers plots in this project this is housing projects of Orris Group. Orris Curio City is good for unique lifestyle, lavish greens and leisure, comfort and luxury artful living.

Orris Curio City Distance Overview

Drive From                    Min (Approx.)

Kalandi Kunj                    25 Mins.

South Delhi                      35 Mins.

Sector-18,Noida            20 Mins.

Night Safari                     10 Mins.

Akshardham                   20 Mins.

Proposed Airport         15 Mins.

Metro Station                 20 Mins.

Formula                          1 5 Mins.


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JLL says Residential Realty Sector is set to appreciate in 6 months.

April 7, 2012 – 4:27 pm

Jones Lang LaSalle India, a global research firm in the real estate sector, says that prices of residential units in India in the next six months should witness marginal appreciation. JLL says: “Over 60% of residential launches in the Top 7 cities (mostly in cities other than the NCR and Mumbai) are priced in the range of Rs 2,000-4, 000 per sq. ft., which meets the demand of middle-income buyers.”

At the same time, the RBI has given sufficient indications of probable cuts in key rates during second half of 2012, which will improve affordability for homebuyers and provide lower interest costs for developers. This will help in increasing the demand for residential units in the country. JLL also argues that even in the present bad condition, prevailing absorption rates are at nearly 10-12 %, which translate into an average absorption period of 8-10 quarters for a residential project. “This implies that at average prices, any average residential project should be sold out before construction is completed in around three years from the launch.”

JLL says that new project launches, which were slow in Mumbai and the NCR in the first half of 2011 due to approval and land acquisition issues, have now started to pick up. This should improve cash flows for developers having large land banks during 2012. A number of builders have acquired huge land banks on borrowed fund. As the builders pay huge interest rates, nearly 15-18 % on the borrowed fund, the servicing of debts has put huge strain on their finances. Any improvement in off-take is likely to release them from the financing pressure.

In the present slowdown condition, despite bad financial conditions, builders are not cutting the prices as in most parts of the country; they have priced their projects at nearly cost prices. “With rising input costs, developers do not want to sell below a threshold, which does not justify their minimum replacement returns,” JLL says. “This leaves home buyers with a small window of opportunity – the next six months – when home prices should witness marginal appreciation. After six months, a second wave of high appreciation is predicted.

However, in some of the micro markets in Mumbai and the NCR, the appreciation in prices was even sharper. In the last two years, in some of the markets like Gurgaon’s Dwarka Expressway, prices have almost doubled.

Overall, the Indian real estate market went through a slowdown in the last one year. But, all the predictions of a hard landing for the residential property market in 2011 and 2012 have failed to come true, so far.

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Realtors upset with policies of Bhubaneswar Development Authority(BDA).

April 7, 2012 – 1:53 pm

The real estate developers on Thursday reacted sharply to the Bhubaneswar Development Authority’s (BDA) move to change the definition of “apartment” and “group housing.”

Talking to reporters here, Confederation of Real Estate Developers Association of India (CREDAI) state president D S Tripathy said the new definitions are vague and will result in the harassment of people while constructing houses.

The draft BDA (planning and building standards) amendment regulations-2012 proposes to amend the definition of apartment as building constructed in one block having more than four dwelling units where land is owned jointly and construction is undertaken by one agency. Under the existing BDA regulations 2008, an apartment is defined as a building having six or more dwelling units.

Tripathy said under the new definition houses of joint families may become apartments. As a result, such families would have to meet the required road width of minimum nine metres, he said. Tripathy said certain apartments can never form societies for which at least seven members are required. Similarly, the new definition of ‘group housing,’ building with more than one dwelling unit, where land is owned jointly and the construction is undertaken jointly by one agency, is vague and don’t convey clarity.

CREDAI, which suggested its comment on the draft regulations, open for public suggestions, is of the view that creation of the new “settlement fund” and earmarking of 10% of all housing projects for economically weaker sections is not going to help the poor. “It seems impractical that BDA will construct EWS houses using shelter fund,” the CREDAI chief said.

The CREDAI, Odisha, suggested that the state government should formulate an affordable housing policy on the lines of Rajasthan, which looks more realistic, gives incentives to builders and subsidy to weaker sections.

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Realty PE Deal Volume grows in Q1 and Big Deals are missing.

April 6, 2012 – 4:44 pm

Private equity deals are alive and kicking in Indian real estate space even though headline numbers do not reflect the same due to the absence of big ticket investments. The total number of PE deals during the first quarter of CY 2012 has hit a three-year high, according to VCCEdge, the financial research platform of VCCircle.

There were 12 deals worth $279 million in Q1, compared to 9 deals worth $432 million in Q1 CY2011 and 4 deals worth $97 million in the same period in 2010, according to VCCEdge. This is much lower than the peak of 22 deals cumulating to $1.2 billion in the first quarter of 2008, after which stock markets went into a tailspin due to global financial meltdown.

Although the overall value of PE investments has shrunk and investors remain cautious about the sector, it does not necessarily reflect a poor investment scenario in the realty space, according to analysts.

Shobhit Agarwal, joint managing director (capital markets) at property consultant Jones Lang LaSalle India, says, “Most of the funding that is happening now is for last-mile project completion where most of the money has already been spent by the developers and they don’t need large-size funding.” In fact, the projects are 60-70 per cent complete and developers are looking for some more equity to finish them off, he adds.

Last year, the average deal for PE investments was skewed up in the first quarter due to two $100 million-plus investments, including one by Ascendas. This pushed up the average deal size to around $50 million, as against the average size of $20-25 million in Q1 of the previous two years.

But there is another reason for lower quantum of investments by PE firms in the realty sector. According to V Hari Krishna, director of Kotak Realty Fund, “Most of the funds are reaching their shelf life and new fundraising is not happening in the same pace as it happened in the earlier round. Therefore, a lot of funds have either exhausted their capital or are on the verge of it and investments are slowing down.”

Even though the average ticket size of PE investments has shrunk, real estate remains one of the top sectors drawing PE firms. During Q1, real estate accounted for almost 10 per cent of the total PE deal volume and around 15 per cent of total value of PE investments, as per VCCEdge.

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Lemon Tree is planning to open 100 hotels in India by 2020.

April 6, 2012 – 1:20 pm

Hospitality chain Lemon Tree Hotels today said it plans to open 100 hotels in India by 2020, with a total room capacity of 10,000.

The company that currently owns and manages 18 hotels under Lemon Tree Premier, Lemon Tree and Red Fox brands also said it has put on hold plans to foray into real estate in partnership with US-based investment firm Warburg Pincus.

“By 2020 we plan to open 100 hotels in India with an inventory of around 10,000 rooms,” Lemon Tree Hotels Chairman and Managing Director Patu Keswani told reporters on the sidelines of the Hero Mind mine Summit 2012.

This year the company is opening two more hotels, he said without sharing details on the investment that would be required for the expansion.

Keswani, however, said the company plans to raise money from financial institutions or may even go public in the next two-three years. “In the next 2-3 years, we might look at public listing,” Keswani said.

At present, the company’s total room capacity is around 2,000. On the company’s proposed real estate foray, he said: “We have put that housing project in cold storage. It is not the good time to start a project like that.”

In April last year, the company had announced that it will foray into real estate with plans to invest over Rs 1,400 crore to launch housing projects in India in partnership with US-based investment firm Warburg Pincus. “We will wait for the Indian economy to become better and interest rates to come down…I do not see the situation improving in another 2 years,” he added.


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Hindustan Unilever Ltd sells leasehold rights for Mumbai property.

April 5, 2012 – 2:07 pm

FMCG major Hindustan Unilever Ltd (HUL) on Wednesday said the company has sold its leasehold rights of a property in Mumbai for Rs 452.5 crore to Ajay Piramal Group firm Piramal Realty.

HUL and entities of Piramal Realty have signed an agreement for assignment of HUL’s leasehold rights of the land and building named ‘Gulita’ situated at Mumbai for Rs 452.5 crore, HUL said in a filing to the BSE.

The consideration includes both fixed and variable components, it added.

According to sources, realty consultant Jones Lang LaSalle India negotiated the deal on behalf of Piramal Realty.

The property was taken on lease from Maharashtra government by HUL and used as a training centre, a source said, adding Piramal Realty will use the premises to develop a new residential complex.

In the past few years, HUL has been selling off some of properties it owns, including some in Gurgaon and Mumbai, to unlock value.

Shares of HUL today closed at Rs 399.55 on the BSE, down 1.08 per cent from its previous close.

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Indians top the first time Dubai’s property buyers list.

April 5, 2012 – 1:32 pm

While Dubai remains a hot and one of the favourite destinations of Bollywood. It has definitely fascinated other strata of India as well.

As per the Dubai real estate data, No other national has purchased property to the tune Indians have in 2011.

Indians have topped the list of first-time property buyers in Dubai in 2011, having bought properties worth 2.1 billion dirhams (Rs 292 crore), Dubai Land Department data has revealed.

The Indians topped the list of new investors in Dubai properties and conducted 927 transactions worth 2.1 billion dirhams. This represents 16 per cent of the overall value of transactions carried out by new investors,” the department said.

While it did not mention the nationality of the second largest investors, the department said the UAE nationals came third, having invested 1.575 billion dirhams (Rs 219 crore).

According to the department the new money flowing into the Dubai property market last year totalled 13.13 billion dirhams (Rs 1,825 crore).

Meanwhile, Asian investors formed 68 per cent of the overall number of investors in the sector, with the UAE nationals topping the list with 35 per cent representation of the overall number of Asian landlords, followed by Indians at 20 per cent.

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DLF and Unitech stocks up on mortgage cut.

April 4, 2012 – 11:13 pm

Real estate developers rallied after newspaper Times of India reported on Tuesday some banks were cutting home loan rates for new borrowers, sparking hope of increased property sales in the country.

DLF and Unitech rose about 1% each on the report, which said that lenders Canara Bank and IDBI Bank had slashed these rates to attract new borrowers.

The reported moves sparked hopes other rival banks would be forced to match the cuts in the loan rates.

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MNCs surpass Indian firms in office space uptake.

April 4, 2012 – 11:12 pm

With bearish sentiment affecting corporate expansion plans in the country’s financial capital, there has been a steep decline in the commercial real estate taken up by Indian companies. In contrast, multinational companies (MNCs) have picked up considerable office space here.

The latest report by property advisor DTZ comparing the trends in the first quarter of 2012 to the same period last year shows a noticeable change in the profile of the commercial real estate occupier in Mumbai. Between January and March 2012, Indian corporate firms account for 29 per cent of occupiers of new commercial realty space in the city. This is a sharp fall from the 71 per cent market share of new space that these corporates picked up in the corresponding period in 2011.

In comparison, US- and Europe-based corporates were responsible for taking up 5 and 18 per cent of the space in the first quarter of 2011 respectively. In the same period this year, their market share has gone up by 32 and 23 per cent respectively.

According to Rohit Kumar, DTZ research head, an analysis of quarter-on-quarter and year-on-year office space take-up highlights the fact that relative market share of MNCs based out of USA and Europe has increased significantly while that of their Indian counterparts has dropped. “Be it IT, ITES or Banking, Financial Services and Insurance (BSFI), the MNCs find India relatively cheaper in terms of labour and real estate. On the other hand, despite the positive growth signals from the US and Europe, Indian corporates are more conservative, fearing the return of recession,” said Kumar.

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Realty Estate Industry: A look at urban investments in Mumbai.

April 4, 2012 – 11:09 pm

India’s growth story has many facets; one of the integral parts of growth – and arguably the most important one – is urbanization. In fast-growing economies, cities are significant investment and employment generators, which in turn carry the growth momentum forward. The sustainability and liveability of any city depends largely on the quality of its infrastructure and real estate stocks. Needless to say, cities also require large sums of money to create urban asset stocks, including buildings and infrastructure.

Over last decade, India’s population grew by 18% while its urban population grew at almost double that rate (at 32%). Currently, about 31.2% of India’s population lives in urban areas. The country’s share of urban population has increased by almost 3.5% over the last decade. What is even more astounding is the increase in the built-up real estate stock in its cities and towns.

Data from the 2001 census shows that about 110 million ‘Census Houses’ exist in the urban areas, which indicates an increase of 39 million over the last 10 years. In other words, real estate stock shows a compounding growth of 4.5 % per annum as against the growth rate of 2.8% in urban population. Obviously, such massive growth needs adequate support from infrastructure.

However, the state of affairs with infrastructure in Indian cities is not very encouraging. Most of the cities still have to deal with issues in terms of roads, public transportation, sanitation, storm water drainage, solid waste management systems, etc. on a regular basis. With the volume of real estate stock increasing inexorably in the cities, there is an acute problem with the basic needs like energy and water in the store for urban India.

The private sector contributes most of the development of real estate stock; however, the responsibility of infrastructure development lies squarely with public sector entities such as ULBs and other utility companies – most of which are Government agencies. The investment pattern in our cities shows a similar trend – the private sector invests in the development of real estate stocks, while the public sector invests largely into infrastructure development.

The quantum of investments in most infrastructure projects is huge, and the agencies responsible for its development are seriously under-financed. They depend either on domestic grants like JNNURM or on intercalation financing involving bilateral and multilateral agencies. In some instances, funds are mobilized from private sources in the form of Public Private Partnership. The private sector generally tends to shy away from investments into city-level infrastructure projects, as most of these projects are considered non-remunerative. They prefer to focus on investing into the development of real estate stock.

Mumbai, India’s financial capital attracts massive investments – largely in the real estate sector. The city being the nation’s epitome of high real estate prices and land scarcity, huge sum of money keep chasing land in the city – while infrastructure augmentation lags behind. Way behind.

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Mumbai gives little hope for home buyers.

April 4, 2012 – 11:07 pm

In a recent report, Jones Lang LaSalle said that Mumbai seems to be in a tighter spot with Rs275 billion being sunk in land since FDI (foreign direct investment) was allowed in real estate in 2005; most of which has failed to yield returns. Even many investments done in South Bombay once named as one of the hottest and costliest property location in the world have met the same fate. Read Mumbai has sunk Rs275 billion in lands since 2005, the reason is known to all. Sky high prices have put off customers. In Mumbai, an average flat costs more than Rs10,000 per sq. ft. and even in Navi Mumbai, in less populated areas, there are many projects that have flats priced at over Rs1 crore.

Add to that the confusion created by the new DCR (development control rules). Many builders now have to make fresh plans to accommodate the proposed changes about FSI; and the worst affected are those whose projects are already underway. Many of the launches have been put on hold, and construction has been stalled in many places. And for people who have already invested in these projects, the longer the deadlock lasts, the more they have to pay.

Buy or not to buy? Despite a profusion of analyses and research reports on housing prices and their future direction, home buyers remain as confused as ever. So it is little wonder that 37 lakh of flats remain vacant in Maharashtra, of which 4.79 lakh are in Mumbai. The Census Directorate data says that even Thane district has more than 5 lakh vacant flats.

“Why doesn’t the government or RBI (Reserve Bank of India) understand that the more they squeeze liquidity by raising interest rates, it raises returns on black investments even higher. If our country can bring down black element out of property, rents will fall, property prices will fall,” said a commentator.

The home-buyer, however, is at a loss. The Budget came as a flop, and a recent Crisil report says that prices of steel and cement will go up, which will probably be passed down to the end-user. And then, there is the proposal to hike on leave-license, which is going to make rentals expensive. There are some who expect matters to improve.

Pankaj Kapoor, MD, Liases Foras also had echoed similar thoughts. “The high prices are not fault of only the builders. The hike in stamp duty was uncalled for and it is too revenue-centric and indicates a short term vision.” Read Maharashtra Stamp duty hike: “Neither can you afford to own a home, nor take it on rent”

However, as most experts say, one can buy a home any time. “You never know what will happen next. And honestly, there is little evidence to suggest that customers have waited for better home loan or price options when they have to buy a home—because it is a necessity. So if you want to own a home, there is no bad time,” said an analyst.

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Trump scion says India is a top focus for realty mogul.

April 4, 2012 – 11:03 pm

Trump’s eponymous real estate group expects to sign multiple deals for Indian residential projects and hotel contracts over the next five years, despite a market riddled by regulatory uncertainty and bureaucratic red tape.

“India, among other emerging markets, is the biggest push for our organisation,” Donald Trump Jr, an executive vice president of The Trump Organization, said on Wednesday.

Trump, whose portfolio includes projects in South Korea and Turkey, in addition to hotels and skyscrapers in the United States, is close to signing a couple of deals with Indian developers, the younger Trump said without providing details.

“Equity investment will depend on individual projects and partnerships but first we would like to form relationships which allow us to understand the processes and spectrum better,” the 34-year-old said on the side-lines of a hotel conference.

The developer entered India last year with a joint venture partnership with Rohan Lifescapes to build a 45-storey luxury residential tower in Mumbai.

However, work on the tower, which will bear the Trump name but involves no equity from the U.S. developer, has been halted for about nine months since authorities said it lacked the necessary permits, a common problem in an industry wrapped in red tape.

Indian developers are often hit by changing regulations. In Mumbai, for example, the scrapping of a rule granting extra floor space in exchange for providing public parking facilities has meant many projects must reapply for clearances.

But Trump, whose father is worth an estimated $2.9 billion, according to Forbes, says the lure of an emerging India outweighs the regulatory headaches.

He also added that, “The Indian market is starved for a good luxury product and it needs a brand like ours.”

“I like the regulatory changes I am seeing. It may slow things down a bit but will create a level playing field and will help in eliminating the unknown for an outside investor coming in,” he said.

The company plans to focus expansion in the country on luxury residences and hotels, and would look at cities including Mumbai, Delhi, Bangalore and the state of Goa.

Some local players such as privately held Lodha Developers and Godrej Properties are emerging as strong brands in India’s luxury housing space, but the market remains fragmented.

And despite a slew of interest rate hikes that have cooled India’s overall property market and hit luxury developers particularly hard, Trump is bullish.

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Sahara and ICICI Bank want to buy Parsvnath’s prime land in Delhi.

April 2, 2012 – 6:16 pm

Real estate major Parsvnath Developers may soon be able to reduce a significant chunk of its debt, thanks to certain corporate giants showing interest in buying a prime piece of property it owns in the national capital.

The Sahara Group is engaged in discussions with Parsvnath to buy its commercial land near Connaught Place in New Delhi, according to sources. ICICI Bank is also among the contenders for the piece of land, it is learnt.

The 1.18-acre plot at Kasturba Gandhi Marg was bought by Parsvnath in 2008 for about Rs 200 crore, with the aim of constructing a retail-cum-office complex. But the realtor is now looking to sell it to cut mounting debt, currently at Rs 1,300 crore.

Although the Parsvnath management is looking for a price of Rs 700 crore, the interested parties are ready to sign a deal at Rs 600 crore, sources said. Property consultant Jones Lang LaSalle is advising Parsvnath on the deal.

Pradeep Jain, chairman, Parsvnath Developers, did not respond to repeated calls and e-mails. Mails to Sahara spokespersons did not elicit any response.

An ICICI Bank spokesperson said, “ICICI Bank has no plans to acquire this property.”

According to sources, ICICI is exploring the possibility of constructing a corporate house in the locality in partnership with Parsvnath, without acquiring the land.

Earlier, as part of its fundraising exercise, the company had entered into various deals with private equity funds.

In January 2011, Parsvnath signed an agreement with SUN-Apollo India Real Estate Fund LLC for an investment of Rs 100 crore in its premium residential project at Ghaziabad—Parsvnath Exotica. SUN-Apollo had acquired 49.9 per cent stake in the project SPV.

Then, the company sold a minority stake in Delhi-based residential project Parsvnath La Tropicana to JP Morgan for about Rs 150 crore. Through the deal, the previous investor, Red Fort Capital, made an exit. The company had plans to construct an office complex at Connaught Place along with the PE firm.

According to realty experts, demand for land at prime localities has risen as corporate houses look to move their headquarters to such locations.

Anuj Nangpal, director-investment advisory, DTZ India, a real estate consultancy, said, “Organisations are increasingly signaling their arrival or resurgence by moving their presence into the centre of metros. The branding benefit of such ownership of prime real estate far outweighs the costs. Further, employees are also increasingly assessing their jobs and future basis of their office infrastructure and the pride in occupying prime real estate clearly impacts long-term retention.”

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Leela Kovalam, Noida, one among the top high-value sellers in Asia.

April 2, 2012 – 1:49 pm

The sale of Leela Kempinski Kovalam was among the top 10 hotel deals in Asia during the past one year, shows data from the US-based research firm Real Capital Analytics.

Real Capital, which tracks and analyses real estate deals worth over $10 million across apartments, hotels, retail, industrial, office and development projects over the world, has also named Noida as a top site for sales in the development site category for a deal with the Wave Group for a mega mixed-use project. Mumbai and Bangalore also figure among the active office markets in Asia. In apartments, Delhi and Mumbai are part of the top league in the year ended March 31, 2012.

The Leela Kovalam deal, pegged at about Rs 500 crore, was the 10th in the Asia-list of largest hotel sellers during the one-year period. The Kovalam beach property was sold to Saudi Arabia-based industrialist Ravi Pillai last August.

The other big hotel players in Asia which sold properties at high value include Japan Hotel, LaSalle, Kingdom Holding, Hines and Shui On Group.

Even as Indian entities don’t figure anywhere in the top 10 global list vis-à-vis high value real estate deals in the financial year that just gone by, many of them have made it to the Asian hall of fame.

Noida, the industrial development area next to Delhi, is fifth in the development site sellers’ list in Asia. This was for a deal with industrialist Ponty Chadha-promoted Wave Group for the mixed-use project, Wave Mega City Centre, at an estimated price of $1.4 billion (about Rs 7,140 crore at the current forex rate), according to Doug Murphy, director (analytics) at Real Capital.

In the office space, Bangalore and Mumbai have been named among the most active Asian markets. “There were a number of locations for office sales in Bangalore and Mumbai, the largest being the Embassy Manyata Business Park transaction in Bangalore for about $537 million (Rs 2,738 crore) and Citibank building in Mumbai for about $224 million (Rs 1,142 crore),” Murphy said. Both transactions took place in August 2011.

Delhi and Mumbai are part of the most active Asian apartment markets. While Delhi is ranked sixth, Mumbai is eighth. Tokyo tops the list in high value apartment deals, followed by Singapore, Hong Kong, Osaka, Beijing, Delhi, Fukuoka, Mumbai, Nagoya and Kuala Lumpur.

India is nowhere in the retail top league where deals in Asia are concerned. Among hotels, Chennai is seen as an active market in the eighth position. Singapore leads as the most active hotel market in Asia, followed by Hong Kong, Shanghai, Tokyo, Beijing, Seoul, Osaka, Chennai, Kuala Lumpur and Suzhou.

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