Ashiana Housing To Mark Big Presence In South India

General | By mahendra | 2010 Trackbacks (0) Add comment   
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With the success of its Utsav brand of retirement resorts in northern parts of the country, Ashiana Housing Ltd is now taking the concept down south. The real estate company has identified around seven locations in South India for setting up retirement homes after a survey and will start operations in four places soon. “We will start with Bangalore, Chennai, Hyderabad and Kochi and move to other locations like Coimbatore, Mysore, Vizag later,’’ Mr Ankur Gupta, executive director, told ET.

At present, Ashiana Housing has Utsav retirement resorts at Bhiwadi, Jaipur and Lavasa with over 750 functional apartments. The company is targeting ten locations by 2013 and a total of 1300 units by 2013 with an outlay in the range of Rs 75 to 100 crore. Apart from South India, the company is looking at Mumbai, Pune and Kolkata as well. Mr Gupta said the company is in discussion with local land bankers and developers for joint ventures in key locations in South India. The size of the projects would range from 10 acres to 30 acres. “We will bring in our expertise in construction and post maintenance in the construction,’’ he said.

The resorts have been designed keeping in mind the requirements of the senior citizens and have facilities for social, medical, spiritual activities and recreation. To make life easier for old people there are emergency switches at different places, big sized switches in red colour, inbuilt night lamp, anti skid tiles and bathrooms equipped with arthritis friendly handles, Mr Gupta points out.Ashiana Housing, which also does regular housing projects, has completed 90 lakh sq ft in the last 30 years. Almost 55 to 60 % of its total projects, in fact, belong to the regular housing category while the rest is accounted by the retirement resorts, which was started by the company around six years ago. In the next 2 to 3 years, the company wants 50 % of its projects in the Utsav category.The company is expecting an investment in the range of Rs 350 to 400 crore in the real estate sector in the next five years as the prices have stabilized and the realty sector is looking up. It has targeted Rs 250 crore turnover in the current year with increased thrust on the housing sector.

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Ashiana Housing To Mark Big Presence In South India

General | By mahendra | 2010 Trackbacks (0) Add comment   
Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4

With the success of its Utsav brand of retirement resorts in northern parts of the country, Ashiana Housing Ltd is now taking the concept down south. The real estate company has identified around seven locations in South India for setting up retirement homes after a survey and will start operations in four places soon. “We will start with Bangalore, Chennai, Hyderabad and Kochi and move to other locations like Coimbatore, Mysore, Vizag later,’’ Mr Ankur Gupta, executive director, told ET.

At present, Ashiana Housing has Utsav retirement resorts at Bhiwadi, Jaipur and Lavasa with over 750 functional apartments. The company is targeting ten locations by 2013 and a total of 1300 units by 2013 with an outlay in the range of Rs 75 to 100 crore. Apart from South India, the company is looking at Mumbai, Pune and Kolkata as well. Mr Gupta said the company is in discussion with local land bankers and developers for joint ventures in key locations in South India. The size of the projects would range from 10 acres to 30 acres. “We will bring in our expertise in construction and post maintenance in the construction,’’ he said.

The resorts have been designed keeping in mind the requirements of the senior citizens and have facilities for social, medical, spiritual activities and recreation. To make life easier for old people there are emergency switches at different places, big sized switches in red colour, inbuilt night lamp, anti skid tiles and bathrooms equipped with arthritis friendly handles, Mr Gupta points out.Ashiana Housing, which also does regular housing projects, has completed 90 lakh sq ft in the last 30 years. Almost 55 to 60 % of its total projects, in fact, belong to the regular housing category while the rest is accounted by the retirement resorts, which was started by the company around six years ago. In the next 2 to 3 years, the company wants 50 % of its projects in the Utsav category.The company is expecting an investment in the range of Rs 350 to 400 crore in the real estate sector in the next five years as the prices have stabilized and the realty sector is looking up. It has targeted Rs 250 crore turnover in the current year with increased thrust on the housing sector.

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Positive Change In Commercial Office Space Sector

General | By mahendra | 2010 Trackbacks (0) Add comment   
The demand-starved commercial office space market is slowly seeing positive signs, with several large and mid-sized US corporates firming up their plans to outsource their work to India for the first time. Major cities like Bangalore, Mumbai and Gurgaon have seen substantial business deals in the last few months and this has led to several new India-based subsidies and back offices which may generate substantial employment opportunities as well.Experts tracking realty developments say that out of the new jobs being created, 80% will be in the IT sector alone, with the corporate sector accounting for the rest. Also, with new vistas being thrown open by US President Obama’s recent healthcare push—which may trigger an outsourcing spree in health and knowledge sectors—both job and office space markets may see major gains. Though The demand-starved commercial office space market is slowly seeing positive signs, with several large and mid-sized US corporates firming up their plans to outsource their work to India for the first time. Major cities like Bangalore, Mumbai and Gurgaon have seen substantial business deals in the last few months and this has led to several new India-based subsidies and back offices which may generate substantial employment opportunities as well.Experts tracking realty developments say that out of the new jobs being created, 80% will be in the IT sector alone, with the corporate sector accounting for the rest. Also, with new vistas being thrown open by US President Obama’s recent healthcare push—which may trigger an outsourcing spree in health and knowledge sectors—both job and office space markets may see major gains. Though the office space market has not been able to bring prevalent vacancies under control, there is scope for growth for realty, according to experts.

In an interaction with the media, Collin Dyer, president and CEO, Jones Lang LaSalle Inc, says India presents a huge opportunity in terms of attracting jobs outsourced by US firms. India has graduated from being a back office hub for Western companies to housing knowledge process outsourcing centres and research and development wings of multi-national firms. “Asia, which includes robust nations like India, has shown signs of an economic revival, and these are more evident that those seen in economies like the European Union, because of strong banking and financial systems present here”.According to Jonse Lang’s India Office Map 2010 findings, the demand for office space is gradually improving with opportunistic tenants taking up space at lower rentals. The markets in Mumbai and Bangalore are leading the property cycle and are likely to recover the earliest among office-space markets. Also, the markets of NCR-Delhi, Chennai and Pune are expected to stabilise sooner that those of Hyderabad ......http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=Articles

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Maytas Properties May Go To Strategic Investor

General | By mahendra | 2010 Trackbacks (0) Add comment   

Corporate Affairs Minister Salman Khurshid today said the government is looking at the possibilities of inducting a strategic buyer for Maytas Properties, the company promoted by the kins of disgraced Satyam founder B Ramalinga Raju "For all practical reasoning, obviously that (strategic sale) is something that would work out... but they (board members) have to decide," Khurshid said when asked whether efforts were on to find a strategic buyer for the troubled company.

"Ved Jain (Chairman of Maytas Properties) is working out all permutation and combinations, and we are trying to give him all help required... We have very limited option since we have started the process we want to bring it to a satisfactory end," the Minister said. Following the admission of accounting fraud in Satyam Computer Services by Raju last year, the government appointed its own nominees on the twin companies -- Maytas Infra and Maytas Properties -- promoted by Raju's sons.

Ved Jain, the then President of the Institute of Chartered Accountants of India, was appointed Chairman of the company in March 2009 and was give the task to rehabilitate Maytas Properties, a company with interest in real estate in and around Hyderabad. Several Non-Resident Indians who booked flats in projects promoted by Maytas Properties have been asking the government to expedite rehabilitation of the company. The company had raised Rs 650 crore from customers for the Rs 1,100-crore Hill County project near Hyderabad. Maytas Properties reportedly has a land bank of about 6,000 acres. Maytas Properties and Maytas Infra were the two companies which Satyam had tried to purchase in December 2008 but the deal was aborted following objections by shareholders.http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=News&nid=1122



Realty Prices To Increase From July

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If you are planning to buy a house, grab it before July, as realty prices are set to increase later. The service tax of 3.3%, announced in the Budget, will be effective on your home from July as the amendments to the Finance Bill will be put into effect in June. Moreover, banks have decided to increase interest rates in the range of 0.25-0.5 percentage points on home loans, which could further be hiked in the forthcoming credit policy. Companies including realty majors like DLF, under the aegis of Delhi-based real estate body National Real Estate Development Council (Naredco), will soon approach the FM for a rollback of service tax.

The property prices are expected to go up with real estate companies passing on the additional burden to buyers. Effectively, someone buying a house property in Delhi will have to pay a service tax of 3.3% on the price of the accommodation and also a stamp duty of 8% as a sale of immovable property. The 3.3% tax will not include the amount to be paid towards special charges like garden facing or community hall facility as these charges will be taxed at 10% of the total charges. However, Sanjay Chandra, MD of country’s second-largest realty firm Unitech says an increase in interest rates is unlikely to affect the demand as the increase is only in trigger rates and hence there is no change in effective interest rates.“The service tax will have some marginal impact, but the market will absorb that for two reasons. One, the change in personal tax slabs will leave more disposable income in the hands of consumer and second, the better prevailing economic conditions are likely to result in at least 10% increase in the salaries of the working class for the next financial year. These two facts will more than offset the marginal impact of service tax, which is expected to be 2% to 3%,” he said.

When contacted, Naredco president and realty company Omaxe’s group chairman Rohtas Goel said, “We will hold a meeting of the association to discuss the Budget proposals, particularly levying of the service tax on housing, which will have a negative impact on the realty sector.” However, finance ministry officials have said they won’t entertain any request for change in the Budget proposal. Central Board of Excise and Customs member YG Parandhe said, “We are not taking up the issue as it stands now” when asked if there is a possibility to relook at the proposal.

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Telangana Stir Worsens Outlook For Realty Sector In Hyderabad

General | By mahendra | 2010 Trackbacks (0) Comments (1)   
Dotted with the sprawling campuses of information technology (IT) firms such as Microsoft Corp. and Wipro Ltd, Hyderabad’s fast-moving growth corridor—the Gachibowli area—looks skeletal with half-done buildings, yellow construction cranes and giant billboards that promise delivery of homes on time.

Hyderabad was hailed some years ago as one of India’s hottest property destinations, with firms such as US-based Tishman Speyer Properties and Malaysia’s Sunway City Bhd coming in to launch their maiden projects in the country.In its present condition, Andhra Pradesh’s capital city remains the lone realty victim of the slowdown.“Other cities are already on the recovery route. But Hyderabad has been in the news for all the wrong reasons,” said George Johnson, city head (firm management), Jones Lang LaSalle Meghraj, a property advisory.The downturn perhaps shook Hyderabad more than it did other large cities due to certain disturbing events.The first was the unravelling of a multi-crore accounting fraud at Hyderabad-headquartered Satyam Computer Services Ltd last January, followed by the death of chief minister Y.S. Rajasekhara Reddy in a helicopter crash in September.And just as the sector was beginning to recover, the struggle for a separate Telangana state that includes Hyderabad, intensified.

“Whether the market bounces back depends on if they can control the Telangana agitation,” said N.R. Aluri, managing director, NCC Urban Infrastructure Ltd. “The residential segment particularly looks uncertain though we are expecting some demand in the budget category.”City-based NCC Urban, a subsidiary of Nagarjuna Construction Co. Ltd, has moved its focus to Bangalore, where it is building four projects, compared with one in Hyderabad.NCC’s signature project, a 400-acre mixed development on Hyderabad’s outskirts in Tellapur, in a joint venture with Tishman Speyer India, has been put on hold. Its only ongoing project in the city, Nagarjuna Residency in Gachibowli, has been cropped from 12 blocks to six.Following the 1990s’ IT boom in the city, Hyderabad’s realty market reached its peak between 2005 and 2007, with rising land prices triggering a wave of speculative buying.

Property consultants say the key problems with Hyderabad have always been its unplanned real estate growth, demand-supply mismatch and steep land prices.In 2007, for example, a consortium of developers bought 5.8 acres in the city’s posh Jubilee Hills area for Rs58 crore an acre. The project, which hasn’t been launched yet, would need to sell at Rs15,000 per sq. ft at least to be viable, said a property consultant, who didn’t want to be named.“Everyone was buying large land tracts and planning big projects. Most projects launched in the last two years are nowhere near completion,” said P. Premkumar, member, AP Real Estate Developers Association.Premkumar’s firm, Doyel and Co., part of Opus Developers and Builders Pvt. Ltd, is building Sunway Opus Grand with Malaysia’s Sunway City. The Rs1,700 crore township in Hitec City, a technology hub in Hyderabad, was announced in 2007 but construction hasn’t started yet though bookings have begun. It will have luxury homes and is Sunway City’s maiden project in India.Yap Chun Hua, chief operating office of Sunway Opus, refused to talk about the project citing company policy.

According to Jones Lang LaSalle Meghraj, around 5 million sq. ft of commercial space in the city is expected to come into the market in 2010, of which a little more than 3 million sq. ft is likely to be absorbed.Many buildings that were supposed to be operational in 2009 are still under construction, it added.S. Pochender, director and chief executive of Lanco Hills Technology Park Pvt. Ltd, a mixed-use project in Hyderabad, said the Telangana struggle ripped apart the local property market in December, just when the city was seeing green shoots of a revival.Around 400,000 sq. ft earmarked for office space in the Lanco Hills project is yet to find takers, after five-six nearly-finalized deals fell through in December, he said. Around 2 million sq. ft of retail space, including a 14-screen multiplex, is also going slow. “We have closed 60% of bookings for the homes, the rest is still there.”Jones Lang LaSalle Meghraj’s report says only 0.72 million sq. ft of retail space in the city will be launched in 2010, and demand will be dormant.

Bangalore, some 550km from Hyderabad, has been gaining from Hyderabad’s loss. Not surprisingly, many investors want to exit projects in Hyderabad or delay investment commitments.Nervous of getting stuck, Naresh C. Reddy, an independent investor, who also runs his own pharmaceutical business in Hyderabad, exited from three premium housing projects in the Madhapur area in the last week of November, when the Telangana movement was gathering steam.“I made a loss compared to the initial investment that I had made in mid-2008. But I am now talking to builders in Bangalore because I think the city is safer to invest in,” said Reddy.Irfan Razak, promoter of Bangalore-based Prestige Estates Projects Pvt. Ltd, said he, too, has put on hold a villa project in Hyderabad, originally planned for a 2009 launch.



Telangana Stir Worsens Outlook For Realty Sector In Hyderabad

General | By mahendra | 2010 Trackbacks (0) Add comment   
Dotted with the sprawling campuses of information technology (IT) firms such as Microsoft Corp. and Wipro Ltd, Hyderabad’s fast-moving growth corridor—the Gachibowli area—looks skeletal with half-done buildings, yellow construction cranes and giant billboards that promise delivery of homes on time.

Hyderabad was hailed some years ago as one of India’s hottest property destinations, with firms such as US-based Tishman Speyer Properties and Malaysia’s Sunway City Bhd coming in to launch their maiden projects in the country.In its present condition, Andhra Pradesh’s capital city remains the lone realty victim of the slowdown.“Other cities are already on the recovery route. But Hyderabad has been in the news for all the wrong reasons,” said George Johnson, city head (firm management), Jones Lang LaSalle Meghraj, a property advisory.The downturn perhaps shook Hyderabad more than it did other large cities due to certain disturbing events.The first was the unravelling of a multi-crore accounting fraud at Hyderabad-headquartered Satyam Computer Services Ltd last January, followed by the death of chief minister Y.S. Rajasekhara Reddy in a helicopter crash in September.And just as the sector was beginning to recover, the struggle for a separate Telangana state that includes Hyderabad, intensified.

“Whether the market bounces back depends on if they can control the Telangana agitation,” said N.R. Aluri, managing director, NCC Urban Infrastructure Ltd. “The residential segment particularly looks uncertain though we are expecting some demand in the budget category.”City-based NCC Urban, a subsidiary of Nagarjuna Construction Co. Ltd, has moved its focus to Bangalore, where it is building four projects, compared with one in Hyderabad.NCC’s signature project, a 400-acre mixed development on Hyderabad’s outskirts in Tellapur, in a joint venture with Tishman Speyer India, has been put on hold. Its only ongoing project in the city, Nagarjuna Residency in Gachibowli, has been cropped from 12 blocks to six.Following the 1990s’ IT boom in the city, Hyderabad’s realty market reached its peak between 2005 and 2007, with rising land prices triggering a wave of speculative buying.

Property consultants say the key problems with Hyderabad have always been its unplanned real estate growth, demand-supply mismatch and steep land prices.In 2007, for example, a consortium of developers bought 5.8 acres in the city’s posh Jubilee Hills area for Rs58 crore an acre. The project, which hasn’t been launched yet, would need to sell at Rs15,000 per sq. ft at least to be viable, said a property consultant, who didn’t want to be named.“Everyone was buying large land tracts and planning big projects. Most projects launched in the last two years are nowhere near completion,” said P. Premkumar, member, AP Real Estate Developers Association.Premkumar’s firm, Doyel and Co., part of Opus Developers and Builders Pvt. Ltd, is building Sunway Opus Grand with Malaysia’s Sunway City. The Rs1,700 crore township in Hitec City, a technology hub in Hyderabad, was announced in 2007 but construction hasn’t started yet though bookings have begun. It will have luxury homes and is Sunway City’s maiden project in India.Yap Chun Hua, chief operating office of Sunway Opus, refused to talk about the project citing company policy.

According to Jones Lang LaSalle Meghraj, around 5 million sq. ft of commercial space in the city is expected to come into the market in 2010, of which a little more than 3 million sq. ft is likely to be absorbed.Many buildings that were supposed to be operational in 2009 are still under construction, it added.S. Pochender, director and chief executive of Lanco Hills Technology Park Pvt. Ltd, a mixed-use project in Hyderabad, said the Telangana struggle ripped apart the local property market in December, just when the city was seeing green shoots of a revival.Around 400,000 sq. ft earmarked for office space in the Lanco Hills project is yet to find takers, after five-six nearly-finalized deals fell through in December, he said. Around 2 million sq. ft of retail space, including a 14-screen multiplex, is also going slow. “We have closed 60% of bookings for the homes, the rest is still there.”Jones Lang LaSalle Meghraj’s report says only 0.72 million sq. ft of retail space in the city will be launched in 2010, and demand will be dormant.

Bangalore, some 550km from Hyderabad, has been gaining from Hyderabad’s loss. Not surprisingly, many investors want to exit projects in Hyderabad or delay investment commitments.Nervous of getting stuck, Naresh C. Reddy, an independent investor, who also runs his own pharmaceutical business in Hyderabad, exited from three premium housing projects in the Madhapur area in the last week of November, when the Telangana movement was gathering steam.“I made a loss compared to the initial investment that I had made in mid-2008. But I am now talking to builders in Bangalore because I think the city is safer to invest in,” said Reddy.Irfan Razak, promoter of Bangalore-based Prestige Estates Projects Pvt. Ltd, said he, too, has put on hold a villa project in Hyderabad, originally planned for a 2009 launch.



DTC And Its Impact On Properties

General | By mahendra | 2010 Trackbacks (0) Add comment   

The Direct Tax Code (DTC) is a major evolutionary step in the direct tax history of the country, which is all set to change the entire financial landscape of India. As it spells major change, it will require a fairly in-depth study before all its implications can be understood and assimilated. On the face of it, DTC may have benefited Indian tax payers due to some of its moves, but it looks like a dampener for the Indian realty industry. Moreover, it is likely to undergo many changes and corrections before it is finally enacted. Hence commenting on DTC is a minefield. With these qualifications let us analyse some aspects that will apparently impact the property market. First, there is a significant change in the way income from house property is calculated under DTC, most of which is adverse from the point of view of residential property investments.

1. Tax on every property: Current tax provisions provide for paying tax with respect to every property (except a self-occupied property) whether let out or not, based on contractual rent and where that is not available then based on a reasonable rent. There is also provision for a vacancy allowance in case of property that has been previously let out at any time.Under the DTC Bill, tax is payable on all properties on the basis of a higher contractual rent or presumptive rent. The provision for vacancy allowance has also been deleted. In most cases the local authorities have now moved to a market value based rateable value. Possibly the presumptive rate has been kept at a middle value of 6 per cent considering that commercial properties can be rented out at around 8 per cent of the market value. Of course this simplicity works against residential property ownership. Since the income is higher of contractual rent or presumptive rent the end result will be taking completely non-existent income as income. Thus whether or not a tenant is available for the premises, it forces the owner to pay tax on income.Without the protection of the vacancy allowance that is available under the current tax laws this single change will drive investors out of the market. Some may argue that not having investors may not necessarily be a bad thing but it may not be an ideal situation either.

2. Unclear clause: The words for not applying this income clause to one non-let-out property (equivalent to a self-occupied property under the current provisions) are a little unclear and if left unchanged can jeopardise even this small relief.

3. Gross rent: For let out properties the standard deduction has been reduced from 30 per cent to 20 per cent of the gross rent.

4. Deduction: Deduction is available on all properties for local taxes and service tax to the extent paid.

5. No deduction for interest: There is no deduction for interest for non-let-out properties where the income is taken as nil unlike the current provision where this is available up to Rs 1, 50,000.

6. Principal payment: There is no provision for deduction on the principal payment of the loan taken to buy a home.

7. Commercial property: As far as commercial property is concerned it is now clear that renting out property in whatever guise will now be taxable as income from house property and not as business income or income from other sources. The impact is that no deduction for any other expenses will be allowed except local taxes, service tax and interest on loan.

8. Joint properties: The good thing is that calculations for jointly owned properties has been made absolutely clear as also the treatment of interest payable for loans taken to re-pay the original home loan.

All in all, the real killer here is the presumptive rent. Clearly, this is a stiff annual wealth tax on owning a residential house property in the guise of creating an objective benchmark for the rental potential of a residential house property. With changes in capital gains tax as well as the current rental laws, which discriminate against landlords, and the stiff service tax on rentals, owning residential property except one for self-occupation will be a fairly taxing thing. These provisions, if enacted, are likely to have a very large impact on the residential property market. Residential properties purchased for investment purposes or ownership of second properties are likely to go down significantly. Still these are early days so let us see what actually gets enacted into law. Till then you move on with your decisions of home buying!http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=Articles&nid=1112



Cities See Boom In Sales Of Luxurious Housing

General | By mahendra | 2010 Trackbacks (0) Comments (3)   

The country’s largest real estate developer, DLF, sold apartments worth Rs 1,000 crore in December. This is the highest monthly sale the company has recorded in its history. There are many developers like DLF who have seen a surge in the sale of apartments across the country in the quarter ended December, especially in the luxury and semi-luxury category.A large chunk of DLF’s sales are also from the luxury and semi-luxury segments. It sold 76 apartments of Rs 5 crore each in The Magnolias, Gurgaon, netting nearly Rs 400 crore. The project has apartments of 5,825 sq ft each and duplexes and penthouses of 9,000 to 10,000 sq ft each.It made another Rs 200-300 crore each in its relaunched projects, DLF Belaire and Park Place, in Gurgaon. Belaire had a price of Rs 2-3 crore each and Park Place of Rs 1.25-1.5 crore.

Indiabulls Real Estate has sold 100 apartments in its 65-storey ‘Indiabulls Sky’ in the Lower Parel area of Mumbai in the past four months. It has also recently launched Indiabulls Sky Suites with full-age advertisements, promising ‘A head in the clouds experience’’. While, apartments in Sky were priced at Rs 6.75-22.5 crore, depending on the size, Sky Suites are expected to be higher.Indiabulls is also working on a super-luxury, ‘By invitation only’, Indiabulls Sky Forest, where homes are more than 10,000 sq ft each and priced 10-20 per cent higher than Sky projects.Buoyed by response for its premium housing projects, Orbit Corporation, another Mumbai-based developer, says it will launch one luxury project in the city every quarter. Orbit has sold off its first lot of 18 flats in Orbit Terraces — a premium housing project in the Lower Parel area where apartments ranged from Rs 3.3 crore to Rs 6.6 crore — within 17 days of its launch in September. It sold another dozen flats in the same building later.Orbit earlier sold its Orbit Arya project in South Mumbai, where apartments were priced at Rs 10-15 crore, within a month.

The increasing sales are a result of many factors, besides general economic recovery. “A host of reasons have helped property sales. Interest rates are down, property prices are down 30 per cent from the peak and markets are doing well. All these are giving confidence to buyers to buy premium homes,” says Rajeev Talwar, executive director, DLF.Agrees Raminder Grover, chief executive of Homebay Residential, part of Jones Lang LaSalle Meghraj: “Post slowdown, this segment has clearly picked up and we must have marketed and sold 60-70 of homes of Rs 5 crore and above.”Developers are cashing on this demand by offering even more expensive and exclusive apartments. For instance, Pune-based Kumar Builders is planning to build ‘sky villas’ in the Worli area of Mumbai, where the first villa will start from the twelfth floor. Called Kumar Couture, it will overlook the Bandra-Worli Sea Link and will be priced at Rs 30 crore each, for about 8,000 sq ft.

Beyond Delhi and Mumbai

In Hyderabad, Dax Properties Pvt Ltd (part of Countryside Realtors Pvt Ltd) has sold 65 to 70 villas in its Golf Retreat Project since the launch last month. Costing Rs 1.2-2.5 crore each, they vary from 500 sq yards to 2,000 sq yards.“There are takers from all over the country,’’ says Hassan, managing director of Dax. Another developer, Aditya Housing and Infrastructure Development Corporation, has sold 20 villas out of 30 at Empress Park in the Jubilee Hills area of Hyderabad. Each villa costs Rs 3.5 crore.A few days earlier, Aditya Housing announced Mount Castle at Nandagiri Hills in the city, where each floor was occupied by a single flat. Of the 24 it plans to develop, it has already sold five.In Pune, Kumar Builders sold 77 flats within a short span of time in its premium project, 45 Nirvana Hills, where apartments are priced above Rs 1 crore. The company plans to launch two or three luxury housing projects — flats, bungalows and row houses — in prime localities like Kalyani Nagar and Hadapsar.Bangalore is also likely to see more luxury projects in the category of Rs 4 crore-plus by developers such as Prestige and Nitesh Estates, as developers have seen good response for the premium products in the past three months.http://www.maaproperties.com



AP Realty Sector At A Standstill

General | By mahendra | 2009 Trackbacks (0) Add comment   

With weeks of agitation continuing across Andhra Pradesh over the issue of statehood for Telangana, transactions in the real-estate sector have nearly come to a standstill in Hyderabad and other major towns, with buyers opting to wait and watch.After a gloomy recession-hit beginning to 2009 and major price correction, the sector had begun to gradually show signs of recovery in the last few months. However, the continued uncertainty over the statehood issue has set the clock back, according to representatives from the realty sector.The President of AP Builders Forum, Mr C. Shekhar Reddy, said the sector has taken twin blows in the form of economic recession and also drop in prices due to slackening demand. “The prices of residential properties have dropped by about 30 per cent in the last 12 months. The flexibility to go down any further has gone,” Mr Reddy said.The Managing Director of Koncept Ambience, Mr M.P. Agrawall, said: “While realtors are concerned about the ongoing agitation as transactions have come to a halt, genuine buyers are keen They expect some more downslide before buying.”The notion that there is more supply than demand is incorrect, he said. The economic downturn and lack of buyer interest in the first half has deterred many developers from venturing into new projects.The available supply will take care of the demand over the next six months, and “suddenly we will realise that there is need for more projects particularly in the affordable segment, which is in short supply,” Mr Reddy said.The Chairman of Confederation of Indian Industry, AP region, Mr Y. Harish Chandra Prasad, said: “The agitation is bad for the infrastructure sector and real estate players. It sends wrong signals to investors. We hope the issue settles down soon and the uncertainty is put behind, helping resume normal business. The offtake of commercial property too could be hit as companies and establishments adopt a cautious wait-and-watch approach.”

Speculative buying

The Chief Executive Officer of Lanco Hills, part of the Lanco Group, Mr S. Pochendar, said that speculative buying was missing in the market in the last six months. This augured well for the sector as the slowdown, coupled with demand-driven pricing, has helped stabilise prices.“Before the build-up to the current agitation, market was already subdued and bottomed out at every nook and corner of the twin cities. The number of takers too had come down. The speculative investment was totally out. The prices too had reached their lowest levels in the last four years. I don't see any more surprises in the sector,” Mr Agrawall said.Since the recent agitation, genuine buyers hope to see some more downslide, which is unlikely. There is also no likelihood of flight of investors, as some speculate. Investors invest wherever there is opportunity, not just in Hyderabad, but other States and in some overseas markets, Mr Agrawall said.However, some players said prices will go up in Vijayawada and Visakhapatnam as some of the speculative investors could prefer these growing cities to Hyderabad in the near term.Mr Shekhar Reddy, however, believes this is not true. From the interaction he has had with some of the project developers, they see this as a passing phase of their business cycle and are okay waiting for this phase out. “Even assuming that a separate state is formed, how will this change their existing business plans?” he asked. “Due to slowdown, with scores of real-estate developers delaying taking up new projects and concentrating on completing the ongoing ones, in the next six to 12 months we will suddenly face a situation where we will have increased demand and shortage of supply. This could potentially push up prices faster than we anticipate,” Mr Agrawall argued.Mr Prasad said the ongoing impasse could also affect the prospects of some of the major infrastructure projects such as the Hyderabad metro rail and foreign direct investment. Banks and financial institutions base their project estimation on the business prospects and valuation of real-estate. And if this comes down, they could be wary of funding new projects.

Impact on infra projects

Asked if some of the projects are in trouble due to liquidity crunch, Mr Shekhar Reddy said the situation is no different from the one about 12 months ago. In fact, several private equity players have set up their teams to look at potential buyout candidates or investment opportunities.“The agitation has had a negative impact on the sector. However, we are looking at the next year with much optimism and hope that the current stalemate is resolved. Once that happens, all those who are keen to own a property will be back hunting for properties,” Mr Pochendar said.For the real estate developers, reality has sunk in. From a stage a couple of years ago, where on the day of Bhoomi Puja most apartments would see buyer interest, realtors are now faced with the challenge of convincing potential buyers who prefer to wait and watch. This happens when it is a buyer's market, Mr Reddy said.

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India Tops Real Estate Investment Market Iist In Asia For 2010

General | By mahendra | 2009 Trackbacks (0) Add comment   

India leads the pack of top real estate investment markets in Asia for 2010, according to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, a global non-profit education and research institute. The report, which provides an outlook on Asia-Pacific real estate investment and development trends, points out that India, particularly Mumbai and Delhi, are good destinations. Residential properties are viewed as more promising than other sectors and Mumbai, Delhi and Bangalore top the pack in the hotel ‘buy’ prospects as well.The study is based on the opinions of over 270 international real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants. Since the global economic meltdown, asset markets in the Asia-Pacific region have been holding up surprisingly well compared with their peers in Europe and the US. While pricing and rentals in the region fell steeply in 2008 and early 2009 in line with those in the West, markets across the region were boosted in the second half of the year by the remarkable resilience of the Chinese economy, which was buoyed by a series of fiscal and monetary stimulus measures.

As a result, many Asian markets have begun to flash positive signals toward the end of 2009. Transaction volumes have rebounded, although from a very low base, led overwhelmingly by China, the report said. “The relatively stronger fundamentals and the lack of dependence on foreign demand are seen as key advantages as India has managed to mitigate the severe recession that has hit most other Asian countries. “The recapitalisation by players in equity markets across Asia has been successfully replicated by some Indian developers, which has helped ease the liquidity stresses,” said Mr Gautam Mehra, India Leader for Real Estate Practice, PriceWaterhouse Coopers. Unlike the US and Europe, distress sale in Asia had been relatively minimal. This was due to several factors, including a relative abundance of liquidity; low loan-to-value ratios, leaving borrowers less vulnerable to loan servicing problems when the prices declined, the report said.Further, Asian banks remain well-capitalised, having experienced few major losses from derivative investments and also because of the ability of many large investment institutions to recapitalise via the capital markets, (particularly in Australia and Singapore) allowing them to pay down debt. Despite the recent bullish atmosphere, rebounds in most Asia-Pacific markets (with the exception of China) appear tentative and fragile. Although Asia-Pacific governments will probably be able to sustain high rates of liquidity for the foreseeable future, their near term prospects are probably tied to developments in the West and in particular the US, where de-leveraging is far from over.

“The idea that the recession is likely over gives rise to the widespread notion that global economies will now revert gradually to the same trajectories as in the past, which is normally what happens when recessions end,” said the ULI Chief Executive Officer, Mr Patrick L. Phillips. He said the aftermath was likely to be different because the imbalances that led to the global downturn remain embedded in the system and could not be quickly eliminated. Moreover, with spending by the Western consumers no longer acting as the primary engine of global economic growth, a new driver was needed to boost the world’s economy, and, in turn, the global real estate industry....http://www.maaproperties.com



City Realtors In A Tizzy

General | By mahendra | 2009 Trackbacks (0) Comments (2)   
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Hyderabad's real estate sector was in a state of shock on Thursday, just hours after the Centre conceded to the demand for a separateTelangana state. Speculating that the move would further dampen the already crippled industry, realtors were seen making their own calculations about the future of their business in the city. Apart from a few optimistic voices, most realtors opined that the T decision would spell doom for real estate in Hyderabad and result in a steep fall in the property value.

 

"We will go back at least by five years in terms of growth," said Khaja Asif Ahmed of Stellar Project Management Consultant, adding, "It will take at least two to three years for the political unrest to settle and till then no investor from outside would put his money here." According to his prediction, the industry, which is still battling the recession ghost, is set to hit a new low over the next few months.City realtors say that Hyderabad, as part of Telangana, would also disrupt the flow of sentiment-driven investments. "So far people from all over the state invested in Hyderabad because of its status as the capital of Andhra Pradesh. But if it becomes part of Telangana, people would think twice before picking up property here," said a Kukatpally-based realtor Madhusudan admitting that it would indeed be a long haul before the sector gains momentum. "Until a clear separation takes place, there will be no new investments," Madhusudan said.

 

A common sentiment that seemed to be riding high among most players from the sector was that of ‘protecting Hyderabad' from the turmoil by declaring it as the joint capital of two states. "Our fear of stagnation in transactions (purchases) can be best addressed through this move. That way the value of properties in the city would remain unaffected and investors too would feel secure," said Ashwin Rao, director, Primus Developers. Though Rao is one among the few optimistic builders who feel that the industry would be back on track, only after an initial glitch of a few months, he says that the common capital stand would be ideal to arrest the slump in the realty business.http://maaproperties.com



Lanco To Move Out Of Real Estate

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Lanco Infratech has decided to move out of real estate sector to focus on the core area of power generation, besides taking up engineering, construction and procurement contracts, and orders for roads, highways and ports. Company’s managing director G Venkatesh Babu told Financial Chronicle on Sunday that the firm will, however, complete the two luxury housing projects in Hyderabad and Chennai.“We have decided not to take up new realty projects going forward, as we have realised that there are too many players in the sector,” Babu said. He said the ever rising power shortage in the country and comparatively lesser number of players makes this sector lucrative.http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=News&nid=1088

Lanco is developing a Rs 5,500 crore project — Lanco Hills — spread over 100 acres in Hyderabad. The project includes 15 residential towers, special economic zones and various commercial properties.The firm has also planned development of Lanco Horizon Properties at Chennai. The township is planned over 80 acres.Last year, the company had lost about 250 customers of its residential apartments in Hyderabad during the market meltdown. The customers, mos­tly expatriates, cancelled bookings after paying 40 per cent of the sum required for construction of the apartments.Each flat in the project costs around Rs 1.5 crore. Following the withdrawal, the company slowed down the project.

Babu said at present the company has a power generation capacity of 950 mw. This includes the 368-mw Kondapalli project in Andhra Pradesh, 120-mw Aban project and a 300-mw facility at Amarkantak in Chhattisgarh.The company expects to increase the capacity to 4,000 mw in two years. The company also plans to go alone in bidding for upcoming ultra mega power projects. It had bid for the last UMPP at Tilaiya with Malaysia’s Genting. They later withdrew the bid.

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Govt To Pass Real Estate Regulatory Bill In Winter Session

General | By mahendra | 2009 Trackbacks (0) Comments (1)   

To bring the Indian property industry on par with the global real estate sector, the Indian parliament is gearing up to pass the much talked about real estate regulatory bill in the winter session. The industry is keenly watching out for this one as the first draft was found to be faulty and rather lopsided , excluding the government bodies from its purview. So while the experts feel that it is time to have a single-point regulatory body on the lines of SEBI or TRAI, which would prove beneficial in the long run to the endusers and developers, there is also a cry for bringing total objectivity and professionalism in the workings of the body, to truly achieve its goal. Developers also point out the dangers of overregulation in an industry that already faces several stumbling blocks.The bill seeks to grant approvals to projects on certain parameters and also expedite all the approval processes mandatory for projects to take off. It is expected to help improve transparency in the sector by rating developers on their financial strength in terms of turnover, liquidity and profitability, scale of operations, intellectual expertise based on the qualification and experience of the management team, and past performance.

According to Ashutosh Limaye, associate director (Strategic Consulting), Jones Lang LaSalle Meghraj, “The stock market has SEBI to provide guidelines, define conduct and processes, provide a redressal system for both buyers and sellers and install necessary consistency and standardisation. The proposed real estate regulatory body intends to do the same for the Indian property market, which currently presents a rather under-organized picture.” Deepak Parekh, chairman of HDFC, had expressed the urgent need for a real estate regulatory body, which should play the role of a monitor for promoting and overseeing real estate reforms, ensuring transparency in sales and protecting buyers from a fraudulent case, if any. Parekh recommended that the state housing boards should also be brought within the ambit so that there is complete transparency in its working mechanism, the checks and balances are well achieved from every quarter.The developers have welcomed the move too, but not in its current draft form. Kumar Gera, chairman of CREDAI, India, says, “The intention is good but a lot of thought needs to go into formulating the role of the body, otherwise the effect can be counter-productive . Two main intentions are stated in the preamble: protection of consumers’ interest and speeding up the clearances to facilitate the smooth development of real estate. There are enough provisions to achieve the first objective, but I haven’t seen anything regarding the second. It needs inclusion of processes. In the present form it is likely to create more processes and hence obstacles.

The Urban Land Ceiling act was also formulated with a noble intention, but the outcome was disastrous.” R Vasudevan, MD of Vascon Developers has a similar view: “I think the intention is very good if followed in its spirit with modification to include the process of speeding up approvals. It will revamp a sluggish and a beleaguered system. In fact, no reputed developer would want a short cut to achieve his end, as his intention would be to become a long-term player. It is not in his interest to delay projects and offer bad products, as it will tarnish his image and his brand. Hence this is welcome but only if it fulfils its intent. A professional approach is the need of the hour now for all of us.”Sunny Bijlani, director, Supreme Universal, which has projects in Pune and Mumbai, says, “It is fine with us to have a regulatory body, which helps bring in transparency to the customers.We are more than happy. But they have to bring more changes in the rating system to actually do proper justice to the customers, by doing a complete financial analysis of the developers, and not just by collecting some data. Secondly, it should be a single point for all clearances and NOCs so that the project starts on time. Most delays are caused by non-availability of clearances from the government authorities.” Real estate is a major contributor to GDP growth and employment generation. The minister of urban development acknowledges this fact and feels that a single regulatory body at the state level is most needed, for faster approvals , besides faster delivery of projects, accountability of the project developers, professionalism and finally loan acquisition to make affordable housing a reality.

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Home Buyers Taking Interest In Hyderabad Real Estate

General | By mahendra | 2009 Trackbacks (0) Add comment   
Aggressive pricing and festival season discounts are beginning to draw home buyers in the Greater Hyderabad Municipal Corporation (GHMC) area, including surrounding municipalities and satellite townships. With the market correcting by nearly 30-40 per cent depending upon the location, be it core city area or peripheries, buyers have begun to not only evince interest but are also entering into deals, according to some real-estate companies in the city.The President of Greater Hyderabad Builders Federation, Mr C. Prabhakar Rao, said some of the large builders who have taken up integrated township and mega projects are those who are facing the heat of servicing loans. This has forced them to bring down prices by about 30-40 per cent to bring back buyer interest. Prices had shot up to unrealistic levels due to the boom in the real-estate market. That was the time when no one doubted the market potential and continued to invest, a good number of them for speculation.

However, after the correction, buyers, who were waiting for lowering of prices, realised that the market had stabilised and was not likely to go down further. They were now coming back into the market with renewed interest, he said. Significantly, due to good supply, buyers have the choice to select a property of choice, that too in a project that is at an advanced stage of construction instead of investing in just a coming up venture or one that is in a proposal stage.The Chief Executive Officer of Cybercity Builders and Developers, Mr Uttam Korupolu, told Business Line that the market now reflects a positive mood with buyers looking at projects that are attractively priced. Citing the company’s project near Hitech City, wherein apartments are priced at Rs 2,500 per sq.ft in gated community environs, Mr Uttam said that in barely months of launching the project, all the 400 apartments have been booked. This is because projects of similar nature were earlier priced anywhere between Rs 3,500 and 4,000 per sq.ft. Buyers now see value in such properties and are able to relate to them.

They also know that the market has found its bottom, he explained. “Interaction with some of the buyers shows that nearly 25 per cent of those who had booked their properties are actually speculating in the hope that the market will again find its way up,” Referring to the pattern in the core city area, Mr Prabhakar Rao said that the cost per sq.ft now at about Rs 3,000 to Rs 4,000 per sq.ft depending upon the location of the property and the stage of development.In fact, these were ruling 30-40 per cent higher about 18 months ago. Significantly, small developers who have five floors of built-up structures and relatively fewer number of apartments compared with high-rise projects in the city, are not budging on prices as they have less exposure to loans. It is the large builders who have exposure to bank loans and facing the heat of servicing them who are forced to lower their prices. It is not surprising to see some of the larger developers such as DLF, Mantri Housing, Meenakshi, to name a few, being among those who have priced their projects attractively to woo home buyers. Many other larger developers too are looking at fine-tuning their new ventures, he said...http://www.maaproperties.com/Pages/ModuleContent.aspx?Module=News

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