A Shopping MallMarch 11, 2010

You must be astonished by the growth of India in terms of rapidly increasing number of Shopping Malls. You must also doubt that where they will find so many shoppers and lodgers. But the experts claim that  as compared to developed and other developing countries, the mall culture in India is still in fledgling stages.

A super mall, which is at least 11.2 lakh sq. ft. in size is still in dreams of India while the US had 50 of them and even South Africa 21 way back in 2005.

Asipac, a Bangalore-based real estate development consultancy, made a study of this growth and came to the conclusion that while Australia has 75 regional malls(5-11.2 lakh square feet) besides 15 super malls, India has just 12 malls which can be considered regional.

The recently opened Mantri Square in Bangalore, country’s largest one, is even less than one fourth of the Dubai Mall – 3.77 million square feet, the  world’s largest mall.

Therefore,it can be inferred that there is a room for 100s of more mega malls as India advances its ambition to become a super power economy with a big middle class merchandise.

www.PropertyWala.com has been chosen India’s best real estate website for the year 2008. The Website of the Year awards are the largest annual ‘people’s choice’ website awards and have organized from last 4 years by MetrixLab, an independent online market research agency, in association with Neilsen Online. More than 1.5 million Internet users from India participated in the poll. A total of twelve websites were nominated in the real estate section. Results of the poll are available at www.websiteoftheyear.co.in.
Although recently launched, PropertyWala.com has risen above all the real estate websites present in the market and became the most popular real estate website.
These days, people need everything on internet. So it is very much difficult to manage the information in the way that it can reach to the people in the way they need. PropertyWala.com has understood this and developed the site accordingly. One can view pictures as well as video of property with complete details. A property is described with the help of pictures, floor plans, video, map, nearby landmarks, and a detailed description.
Due to its large number of the features, their appropriate execution and the ease of use, PropertyWala.com is a perfect online destination for everyone interested in Indian real estate. Sellers, interested in advertising their properties, can logon to PropertyWala.com.

About PropertyWala
PropertyWala.com offers the huge and user-friendly property advertising services free of cost for buyers and sellers in India and overseas. PropertyWala.com has been developed over a period of two years by its parent company Efextra eSolutions Pvt Ltd (an IT company) after an extensive exposure working with international real estate portals. The site has been developed from the ground up with ease of use and web standards in mind. Within a period of 8 months of its launch, PropertyWala.com has become top real estate websites in terms of traffic and search rankings.

About MetrixLab
MetrixLab is a global Online Market Research company that specializes in the areas of New Product Development, Brand Communication, E-Business Performance and Satisfaction Research. Over the past nine years MetrixLab has emerged to be one of Europe’s leading online market research companies with offices in Rotterdam, London, Paris, Hamburg and Madrid.

The company has raised Rs 16,750 million as private equity in eight projects in November 2007.

According to sources, DLF Home Developers, the wholly-owned arm of DLF, would develop about 40,000 housing units in the mid-income category.

Despite slump in the housing demand for the last six months, the company has witnessed marvelous response for its mid-income housing projects and sold over 7,000 flats so far in the current fiscal.

DLF has unveiled mid-income housing projects in Bangalore, Gurgaon, Hyderabad, Indore, Kochi, Kolkata and Pune.

Past experience has shown that markets have reacted only temporarily to such extraordinary events. Although some reports do not make a reference to the terrorist strikes, the event is likely to have been factored since the report includes India’s Q2 GDP numbers, which were released on Friday.

“We must have laid off some employees somewhere,” DLF Chairman K P Singh told reporters on the sidelines of India Economic Summit, but did not give the number of jobs that were cut.

The company has also deferred some of its projects due to poor demand. “In hotels, residential and commercial everywhere…deferred because of lower demand and liquidity crisis,” he said, again without sharing the specifics.

Singh also said high interest rates have taken a toll on demand. “There are no takers for housing sector… Ideally, the interest rate should be around 7%.”

Asked if the current prices of the realty projects are inflationary, Singh denied and said: “It cannot be inflationary as it has to be competitive. It also depends on supply and demand.”

Because of demand going down, many projects have been closed down by many developers across the country, he added.

“If they (US and Europe) set their house in order, surely capital will flow back to developing countries credit will flow back and things will be much better”, he said in an interview to a private television channel ahead of the G-20 Summit here.

The Minister further said, “What India wants is that the country where this crisis originated the US and some countries in Europe must do all that is necessary to reverse the impact of the crisis of the global economy, especially the economies of the developing countries”.

Asked about the ways to encourage capital flow back to developing countries, Chidambaram said, “We do not have to do anything more. What we have had in place was enough to attract capital in the last three years. What is happening now is because of what is happening in their countries.”

Sun Group and Barwa have proposed to form a 50:50 joint venture company to be named as Sun-Barwa Land. The new company will seek approval from the Foreign Investment Promotion Board (FIPB) in India to aggregate, acquire, hold and develop land banks in high growth areas in the country. Sun Group and Barwa together will raise capital from Qatari and Middle Eastern investors.

Ghanim Bin Saad Al Saad, Barwa’s chairman and managing director said: “It was part of our strategy to enter the Indian market that has strong fundamentals and solid growth parameters. Barwa looks forward to its partnership with Sun Group due to its extensive experience in the Indian market.”

Nand Khemka, chairman of Sun Group said: “ We are proud to be partnering with Barwa which brings significant expertise from Qatar and the region to India with potential for major growth for years to come.”

Real estate companies say people have less money to spend on buying a house, leading many to look at lettings instead.

More recent data from the company shows demand for property in Hyderabad declined by 11% to 12% between June and August.

The paper also reports the survey shows 62% of those looking for property in the city would buy a residence anywhere in the area provided it met their basic requirements.

However, Hyderabad also appears to be bucking the rental demand trend, with the number of people looking for lets in the city down 5% to 11%.

With this, Big Bazaar, a subsidiary of the Kishore Biyani-spearheaded Pantaloon Group, will have 112 stores pan-India by November, a top company official said.

Big Bazaar is targeting a network of 145 stores by June 2009.

“We have zeroed in on several new and existing markets for the 15 stores that we plan to open by end-November. The investment will be in the range of Rs 1,500-1,600 crore,” Big Bazaar’s CEO Rajan Malhotra said in Mumbai.

The stores would be set up in places such as Mysore, Pune, Cuttack, Kolkata, Chandigarh, Agra, Faridabad, Surat, Nashik, Mumbai, Delhi and Solapur, Malhotra said, adding that in some locations two stores would be opened.

The retail chain would be extending its footprint into new markets such as Mysore, Cuttack, Chandigarh, Faridabad and Solapur. “These are new markets for us. We have done our research and expect these stores to perform well,” Malhotra said.

Presently, there are 97 Big Bazaar stores with the 98th and 99th to be opened in Mysore and Pune. “Our 100th store will be opened in Cuttack market all the three stores are likely to be set up by mid-September,” he said.

Big Bazaar wanted to mark its century by opening its 100th store in the same location where it had launched its first Kolkata, “but there were some issues and hence, we moved ahead in search of other markets,” Malhotra said.

The New Delhi-based company said in its yearly report for a shareholders meeting on Sept. 30 it estimated to complete the share sale within 1 year of getting shareholder consent.

“This is just an enabling resolution so that we can raise the money when we require,” a DLF spokesman said.

DLF had raised $2.25 billion in its initial share sale previous year. In July, the company said it would spend up to eleven billion rupees to buy back up to 22 million shares following a stock market slide.

The stock has fallen nearly 55% this year, compared with about 29 % drop in the main BSE index.

Insecurity in world equity markets has enforced the company to shelve a planned $1.5 billion initial public offer for its property trust in Singapore.

With the launch of Milestone Ecofirst Advisory Services (MEAS), for the first time in the country, a real estate fund house will be offering its invested companies/projects specialized consultancy services for eco-friendly development.

V. P. Arya, Managing Director Milestone Capital Advisors told“We want to ensure that most of the development (approx. five million sq ft) being funded by Milestone across the country would be eco-friendly and meet global norms in sustainable development,”.

“MEAS will not just offer its services to developers in metros, but for the first time in India offer world class green building consultancy to developers in Tier II and Tier III cities”, Mr. Arya added.

Milestone has invested in over twenty five projects across Tier II and Tier III cities, including residential, commercial, mixed-use projects and townships.

Initially MEAS will provide consultancy to projects being funded by Milestone and later extend the service to third party developers as well.

India has emerged as the hottest new favorite destination for green buildings and ranks fourth after US, Australia and Canada in the amount of area under green construction. As per CII-Indian Green Building Council (IGBC), one hundred forty seven million square feet of green space has been registered in India to date across a total of two hundred thirty nine projects. IGBC is aiming one billion sq ft of green footprint by 2012.

Milestone has so far raised over Rs.2, 400 crore from the domestic market and has the highest deployment ratio in the sector having so far signed investment deals worth Rs.1,800 crore.

Milestone presently is in the process of raising Rs.500 crores for its domestic fund “Milestone Domestic Scheme II”.

The Delhi-based firm has filed the documents with market regulator SEBI seeking approval for setting up the VC fund. DLF rejected to comment beyond this because the matter is under SEBI process.

The realty boom of the past three years has rapidly changed the scale at which realty firms worked in India. Companies have seen unprecedented growth and have taken up projects several times the size they had done in the past, requiring manpower, equipment and management skill on a completely new level.

DLF, India’s largest real estate firm, has been a leader in taking up bigger projects and executing them at a rapid pace. It constructed 9 million square feet of space in the last fiscal and plans to complete 16 million square feet this year.

It has set a target of 22 million square feet for the next fiscal. With such an ambitious target on mind, DLF needs a strong support infrastructure in place. The company has already been focused on strengthening its execution capabilities and significantly improves its performance.

A venture capital fund is only going to augment DLF’s effort towards quicker execution. The fund will invest in small companies which will manage equipment, construction material and manpower. The VC-funded companies may buy advanced equipment, critical for fast execution and then lease it to DLF for construction. Similarly, these companies can independently manage construction material and manpower and become a solid source of supply to DLF, whose operations have now spread across the country.

These VC-funded firms, which are likely to have long term agreements with DLF, will have the flexibility to put to use their men and material by offering them to other developers.

According to a report by Edelweiss Research, weak fundamentals and mounting cost pressures are likely to further pull down the replacement costs, even as valuations have corrected sharply in the recent past.

High inflation and home loan rates have slowed down the growth trajectory of the real estate sector, which accounts for 60 % of the total cement demand.

This slowdown is likely to hurt the cement sector the most. The surplus of cement in the industry is predicted to be as high as 20.7 million tonne in 2008-09 and 47.4 million tonne in 2009-10.

The major expansion plans announced by the companies will further add to their woes, as low market demand will significantly reduce the capacity utilization.

Setting up of new facilities will impart additional capacities of 34 million tonne and 45 million tonne respectively in 2008-09 and 2009-10. This is likely to bring down the capacity utilization in the industry down from the current 101 % to 82 %. Even as it loses power to dictate prices, increased cost of power, fuel and freight will add pressure on input costs.

Among the cement majors, valuations for ACC and Ultratech seem to have bottomed out with discounts as high as 35 % of the replacement costs.

Ambuja Cements too is trading at a higher discount than previous down cycle, suggesting bottom valuations. However, replacement valuations for Madras Cements and India Cements indicate scope for further down slide when compared to their previous down cycle valuations.

The report has suggested that speedy implementation of sixth pay commission and lower inflation and interest rates are necessary for the up cycle to begin. It has added that aggressive consolidation in the cement sector can also help them to avoid surplus production.

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

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

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

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

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

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

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

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

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.

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.

“India has a huge market potential for McDonald’s,” Connaught Plaza Restaurants Managing Director Vikram Bakshi said while inaugurating an outlet in Kolkata.

To tap this potential the fast food major plans to open 40-60 outlets each year nationally and also intends to invest Rs 400 crore over the next three years.

McDonald’s has 160 restaurants in India.

McDonald’s restaurants in India were being operated by two 50:50 joint ventures, one between McDonald’s and Connaught Plaza and the other between McDonald’s and Hard Castle Restaurants Private.

Out of Rs 400 crore earmarked for national expansion, Rs 100 crore would be spent for the eastern region.

This was the second outlet in the metropolis. The first one which opened at Park Street was being renovated after the blast which took place there 10 months ago.

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.

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.