Hyderabad Developments

THE cash-starved realty sector is sprinting to the market regulator Sebi to raise around Rs 14,000 crore or $3 billion in initial public offers (IPOs). At least seven realty companies, including Lodha Developers, Sahara Prime city, Emaar MGF and BPTP, have either filed the draft red herring prospectus (DRHP) with Sebi since Friday or plan to do it on Wednesday. “Every company intending to do an IPO is in a hurry to file DRHP, as any delay beyond September 30 will force them to get their books audited again, which might delay the whole process,” a banker handling one large realty firm’s IPO said. The banker didn’t want him or his client to be named for regulatory reasons. The audited balance sheet is valid for six months for filing prospectus. In case the company files the DRHP after six months of the annual report, it needs to incorporate audited numbers for proceeding six month period. Indian stock markets have been rallying this year with benchmark Sensex registering a gain of 75% since January to close at 16,852 on Tuesday.

Real estate companies have led India Inc in raising cash as the stock market slowly recovered since the middle of the year. Several listed realty firms, including DLF, Unitech, Indiabulls Real Estate, Sobha Developers and HDIL, went in for successful qualified institutional placements (QIP) or promoter stake sale raising over $2 billion. The ability of listed realty players to raise funds gave privately-held firms the confidence to test the primary market. It was the fall of realty firm Emaar MGF’s IPO early 2008 that marked the beginning of the slump in the primary market. Now Emaar MGF, a joint venture between Delhi-based MGF and Dubai-based Emaar, plans to re-launch its IPO to raise 3,850 crore for 10% stake dilution. In addition, the promoter is also divesting 1.17 crore shares to mop up around Rs 400 crore. This means Emaar MGF is looking at a valuation of Rs 38,500 crore, as against a valuation of Rs 70,000 crore last time round. It filed the prospectus on Tuesday. Sahara Prime City, Lodha Developers and Kumar Developers too have filed DRHP with Sebi on Tuesday. Delhi-based Ambience filed the prospectus on Friday, while BPTP, Sriram Properties will likely file tomorrow. BPTP, however, denied it was filing DRHP on Wednesday.

Sahara group’s realty arm Sahara Prime City plans to raise up to Rs 3,450 crore through initial share sale. Mumbai-based Lodha Developers plans to raise Rs 2,700 crore, while Delhi-based BPTP and Ambience plan to raise Rs 2,000 crore and Rs 1,100 crore respectively. Kumar Developers and Sriram Properties expect to raise Rs 400 crore and Rs 600 crore respectively. “We will use the IPO funds to retire high-cost debt, pay for government licence fee for our land and in developing our projects,” says Ambience chairman Raj Singh Gehlot. All listed realty companies were quick to tap QIP route when markets improved because they were the ones who were most leveraged. Now, again they are the ones leading the IPO rush because of the same reason. Besides the need to service huge debt, developers’ internal accruals too haven’t picked up in a big way as home buyers are only slowly returning to the property market and retail and office segment remains subdued. Some of the developers are also under pressure from private equity funds, which earlier invested in those companies, to go public as it would give funds exit route.http://www.maaproperties.com

Two multi-national real estate firms—CB Richard Ellis (CBRE) India and Cushman & Wakefield Pvt Ltd—have signalled the end of realty slump. With this, Hyderabad Metropolitan Development Authority (HMDA) is preparing ground to restart auction of plots in the vicinity of the city. However, upset price of some land parcels might be pegged down and in some areas it might be increased. The HMDA is finalising dates for auction. According to HMDA sources, the auctions might take place in mid-October. The previous auction was held February last. The HMDA had appointed these two multi-national real estate firms two months ago for valuation of various land parcels and leftover plots in its jurisdiction after receiving poor response from bidders to its previous auctions.

 The HMDA had asked the two firms to do valuation of leftover plots and land parcels located at Nallagandla Residential Complex and its extension layout, Miyapur Residential Complex and its extension layout, Ramchandrapuram (Chandanagar) Mushk Mahal Residential Complex, HUDA Techno Enclave , Madhapur sector I and II, Tellapur Residential Complex, Nandagiri Hills layout phase-I, Asifnagar new layout, Asifnagar (old) Residential Complex and Vanasthalipuram Complex and also HADA land in July. A report, which was submitted by the two firms, has mentioned that the real estate has now picked up in the city. “We can cash in on rising realty sector if auctions are conducted as early as possible,” a senior HMDA official told ‘TOI.’ “The HMDA has fixed the responsibility of conducting auction on CBRE and Cushman & Wakefield. For this, the HMDA will give 0.33 per cent as success fee on each plot,” the official said. The firms would contact real estate companies in cities like Bangalore, Delhi and Mumbai and invite them to visit locations prior to the auction. The firms would explain to the real estate companies based on four parameters, including strength, weakness, opportunity and threats (SWOT). “If the companies agree for buying land/plots, then auction will be conducted, he added.for more information log on to http://www.maaproperties.com

Despite clear orders from court against putting up permanent structures on the Hussainsagar lake bed and catchment areas, the Greater Hyderabad Municipal Corpor at i o n (GHMC) has proposed to construct 600 houses in the restricted area. A housing project, proposed by the corporation, would come up near Prasads on the Hussainsagar lake area. A month ago, chief minister Y S Rajasekhara Reddy had directed the GHMC to construct houses for weaker sections under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme replacing slums abutting the lake. The slums-BJR Nagar, Mahabharat Nagar, Budagajangambasthi and other slums on about four acres-had come up on the encroached land a few years ago. Since there is no government land left in the city and residents of these areas have been demanding houses, the CM asked officials to construct houses at the same place. The officials have also proposed to accommodate some other beneficiaries along with the local residents. Under JNNURM, each house costs about Rs 2.67 lakh. While the beneficiary has to contribute Rs 5,000, the rest is being provided as bank loan, state government and the Centre's contribution under the JNNURM scheme.

Since the land belongs to the revenue department, the GHMC has asked the district collector to hand over the land. GHMC special officer and commissioner SP Singh on Monday held a meeting with the district collector. But the revenue officials informed that the proposed land was part of tank bed of Hussainsagar. The Hussainsagar was originally a sprawling 1,300-acre lake, but after encroachments and illegal constructions it has shrunk to a mere 900 acres. But, the municipal authorities want to go ahead with the project by seeking the opinion of the advocate general.

"Already, there are G+3 houses in the Hussainsagar lake area. Also, it is far from the actual lake. However, we will take the opinion of the advocate general on the issue," GHMC engineer-in-chief P Panduranga Rao told TOI. Environmentalists have been opposing encroachment and constructions on the lake bed. In 1995, a public interest litigation was filed by KL Vyas of Save the Lake Campaign demanding protection of 170 lakes in the city, including Hussainsagar. In 2000, Forum For A Better Hyderabad approached court against encroachments around the lake. The AP High Court directed the state government to stop construction of any permanent structure on or near the water body or the catchment area of the lake. The Supreme Court also appointed a three-member committee headed by former IAS officer R Rajamani on the encroachment of the lake and other related issues. Ironically, a House committee was also constituted on land allotment to Prasads near the lake area. Despite this, the GHMC wants to take up the project as it is the ‘wish' of the chief minister.

Though the Hyderabad Metropolitan Development Authority (HMDA) claims Outer Ring Road (ORR) Phase II-A will be completed by May, 2010, the ORR project officials are struggling to pay Rs 180 crore towards land compensation to farmers in villages abutting both Phase II-A and Phase II-B areas. About 100 acres of land was acquired for ORR phase II-A between Narsingi and Patancheru and Pedda Amberpet and Shamshabad in villages like Tukkuguda, Poppalguda, Koheda and Narsingi last year. But the land owners are yet to get compensation from the government. For instance, 18 acres of land was acquired from 20 farmers last year. However, they are awaiting their payout still. "Farmers of Tukkuguda village first did not give consent to HMDA for the land acquisition and general award was passed by the officials. Later, they gave consent since they got more money under government package. The balance amount has to be paid to the farmers," ORR special deputy collector K Satyanarayana said.

Similarly in Koheda, Narsingi and Poppalguda villages, the HMDA has to pay  compensation to farmers. At places like Poppalguda, some farmers and owners approached court. Even if the court gives verdict in favour of HMDA, the ORR project is not in a position to make payments. "Of 100 acres of the land acquisition, procedures were completed and award was passed for nearly 80 acres. Compensation has to be paid and possession of land has to be taken," a senior ORR official told TOI. Similarly, on the Patancheru-Pedda Amberpet stretch of Phase II-B, land acquisition has to be completed between Shamirpet and Ghatkesar.

The HMDA used to provide funds for the ORR project by way of auctioning government land. But it has stopped transferring funds to ORR since November 2008 as it has been facing problems in mobilising funds due to slowdown in the real estate sector. Of 6,500 acres of land required for ORR, nearly 6,000 acres has already been acquired. So far, about Rs 600 crore compensation has been paid since beginning of the project. Another Rs 300 crore would be required to complete the acquisition process. The state government received Rs 112 crore from the Japan International Cooperation Agency (JICA) as part of first instalment of Rs 3,000 crore loan for Phase II-B of ORR from Patancheru to Pedda Amberpet. When the officials requested the finance department to release the amount, it has not released the amount yet.

Though the Hyderabad Metropolitan Development Authority (HMDA) claims Outer Ring Road (ORR) Phase II-A will be completed by May, 2010, the ORR project officials are struggling to pay Rs 180 crore towards land compensation to farmers in villages abutting both Phase II-A and Phase II-B areas. About 100 acres of land was acquired for ORR phase II-A between Narsingi and Patancheru and Pedda Amberpet and Shamshabad in villages like Tukkuguda, Poppalguda, Koheda and Narsingi last year. But the land owners are yet to get compensation from the government. For instance, 18 acres of land was acquired from 20 farmers last year. However, they are awaiting their payout still. "Farmers of Tukkuguda village first did not give consent to HMDA for the land acquisition and general award was passed by the officials. Later, they gave consent since they got more money under government package. The balance amount has to be paid to the farmers," ORR special deputy collector K Satyanarayana said.

Similarly in Koheda, Narsingi and Poppalguda villages, the HMDA has to pay  compensation to farmers. At places like Poppalguda, some farmers and owners approached court. Even if the court gives verdict in favour of HMDA, the ORR project is not in a position to make payments. "Of 100 acres of the land acquisition, procedures were completed and award was passed for nearly 80 acres. Compensation has to be paid and possession of land has to be taken," a senior ORR official told TOI. Similarly, on the Patancheru-Pedda Amberpet stretch of Phase II-B, land acquisition has to be completed between Shamirpet and Ghatkesar.

The HMDA used to provide funds for the ORR project by way of auctioning government land. But it has stopped transferring funds to ORR since November 2008 as it has been facing problems in mobilising funds due to slowdown in the real estate sector. Of 6,500 acres of land required for ORR, nearly 6,000 acres has already been acquired. So far, about Rs 600 crore compensation has been paid since beginning of the project. Another Rs 300 crore would be required to complete the acquisition process. The state government received Rs 112 crore from the Japan International Cooperation Agency (JICA) as part of first instalment of Rs 3,000 crore loan for Phase II-B of ORR from Patancheru to Pedda Amberpet. When the officials requested the finance department to release the amount, it has not released the amount yet.

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To raise funds to complete other assignments; board to formally approve corporate debt restructuring A two-day board meeting of Maytas Infrastructure’s six-member new board, which comprises four government-nominees, is likely to divest some projects nearing completion in a bid to raise funds to complete other assignments.The projects will be selected in consultation with a six-member project management committee that the board appointed on April 17 after the company proposed a corporate debt restructuring (CDR) exercise. The board meeting, which began today, is also expected to formally approve the CDR. The project management committee comprises two government-nominated directors, Anil K Agarwal and Ved Jain, two nominees from Infrastructure Leasing & Financial Services Ltd (IL&FS) and one each from State Bank of India (SBI) and ICICI Bank, both large lenders to the company. The board meeting is taking a “360 degree evaluation approach” for each of the projects that are either in different stages of implementation or looking for financial closure, sources in the company said. The company is implementing around 40 projects. Asked about the exercise, a company spokesperson said the board "is evaluating every project". Declining to discuss details, he said the company would make appropriate disclosures after the meeting.

Maytas Infrastructure is a listed company promoted by the family of Satyam Computers founder Ramalinga Raju, who confessed to inflating profits in January this year. The company was one among two unlisted Maytas Properties being the other  that Satyam proposed to acquire for Rs 8,000 crore in December last year. The proposal was dropped after strong shareholder protest, an issue that led to Raju’s confession. Maytas Infrastructure, which won the bid for the Hyderabad Metro by suggesting it would fund the project from adjacent real estate projects, carries around Rs 4,000 crore of debt on its books. This includes around Rs 2,000 crore on its own books and another Rs 2,000 crore on the books of various special purpose vehicles created for specific projects.

SBI and ICICI have an exposure of around Rs 800 crore each and IDBI Bank Rs 350 crore. Another 16 banks have a combined exposure of around Rs 2,000 crore, sources in the banking sector said. The Maytas CDR exercise differs from other companies in that it is the government-appointed directors that recommended the move, after discussions with lead lenders. Sources said the board is likely to appoint SBI Capital Markets advisors to the CDR exercise. Referring to the CDRs became necessary when bank guarantees were invoked after Maytas could not meet various commitments. Since these guarantees were unsecured, banks are now asking for collateral. “In the given situation, all the lenders are seeking a pari pasu charge on all assets, which is a big challenge for the company and also for the banks,” sources close to the development said. Once the company is referred to the CDR, the board plans to request banks for a working capital loan. “We need around Rs 500 crore to keep the company afloat,” said a senior board member on condition of anonymity.

Real estate developers across the country are planning to challenge the government’s move to dilute portions of a scheme launched in 2002 that granted 100% tax exemption for 10 years to those who built industrial parks. Firms in Chennai, Pune, Mumbai, Hyderabad and other cities are planning to move the court in their respective cities saying that the government has changed rules midstream well after they have signed deals with prospective clients.

Even though the cases were duly processed and report from the various state governments were received, the fully processed applications have been returned to the applicants after a lapse of 33 months with a request to the applicant to file fresh applications to CBDT, Ministry of Finance. The Department of Industrial Policy and Promotion is well aware that not even a single application returned will qualify for IT exemption under newly announced Industrial Park Policy 2008, developers across the country contend. The amended scheme, the ambit of ‘industrial activity’ has been expanded to include research and development on natural sciences and engineering, development of computer software and ITeS. The CBDT had notified the original scheme on January 8, 2008. It had excluded IT from the ambit of the scheme. These sectors have been added after the intervention of the PMO at the behest of DIPP. It is same for the minimum floor area which had been enhanced earlier. Many of these builders/developers had applied under the Industrial Park Scheme (IPS) of 2002 which granted tax exemption under Section 80 IA of the Income Tax Act. The scheme had stipulated that each industrial park should have three tenants and comprise an area of 15,000 sq m.

But the new policy announced and notified in 2008, the rules have been changed to include 30 tenants and a minimum area of 50,000 sq m. “Now it is very difficult for them to create infrastructure facilities for an additional 27 units. It is also very difficult to have 27 multi-national tenants in the IT parks and also the applicant companies have already entered into MOUs with MNCs to lease the premises at lower rental values keeping in view the Income Tax Exemption U/s 80 IA,” Manoj Bang, consultant with the Hyderabad-based Aditya Group of Consultants, told ET. Some builders ET spoke to said it is impossible to arrive at these kind of tenant numbers in a single park. They also objected to the clause that a single tenant occupancy must not to exceed 25%.

Bangalore-based Silverline Industries, another developer, has already filed a petition with the Mumbai high court against the government’s move. Applications filed under the IPS 2008, would be considered favourably provided the parks had been operating in April 1, 2006 to March 31, 2009 time frame, they added. The commerce ministry has formally rejected 327 of the 433 applications for reasons that are not clear. A senior commerce ministry official declined to comment on the issue. “While developers are getting affected, we have been told by authorities that due to elections, no policy decision would be taken. However, the government has been receptive and we have received a positive sign that gives the assurance that our needs would be addressed,” Confederation of Real Estate Developers’ Associations of India (Credai), president Santosh Rungta, on an optimistic note. Despite the view that developers may wait for elections to end to “re-present” their case to the power corridors, Credai VP Prakash Challa says many of the developers in Chennai have decided to individually file their writs as the association did not have a locus standi to take up this matter. Later this week, a batch of petitioners, in their individual capacity, are planning to file cases. Some of the names of them include — Khivraj, Acropolis, ECCI Tech Park, Appaswamy and SSPDL.

Today many people are investing in real estate and it has become a popular trend. Why is this happening? Real estate is one of the fast-growing sectors since there is a great demand for it. There are large opportunities for making money if you invest in real estate. More and more sensible persons are taking an interest in making real estate investments because owning property affords a sense of security.

Pros and Cons of Real Estate Investments

You need to learn how to understand investing into real estate. For this you need to understand its pros and cons. For many years, real estate values have been increasing at a steady rate. If you buy any property then that means a low-risk investment. Learn about the advantages as well as disadvantages of making real estate investments.

Advantages

Real estate gives you the power of making long-term investments. Thus, even after you retire you will have a property and you can get funds from it as well. You can make money from it by renting it out. Thus, it would provide a good source of income.

Helpful in Getting Loans

When you plan to invest in some other things, you will be able to get a loan faster from any lender if you own a property. Suppose you want to buy another home or car, the property will act as security.

Negative Sides

Now you should also be aware of the negative sides of making investments. By chance if the real estate market goes down then you may be in trouble. However, when the prices go up again, you will be able to make up for the loss.Sometimes when you decide to sell your property and need money fast then you may not be able to get the desired price for it. Owing to certain circumstances you may have to sell it for a lower price or for a loss. Therefore you have to understand both sides of the coin.

The real-estate market in Hyderabad continues to be in a state of flux with the slowdown taking a toll on the sector, even as the Satyam scandal has cast a shadow on real-estate projects as well as land deals. With thousands of acres around the city now put under the scanner, developers have become extra cautious.Some of the major infrastructure and real-estate companies, which purchased sites paying high rates a couple of years ago, have hinted at delaying their projects, including special economic zones (SEZs).According to industry players, the recent measures by the Central Government and Reserve Bank of India to bring in more liquidity into the system and also the slashing of home loan rates to woo buyers again, have begun to yield some results. However, one area where there is demand for both apartments and independent homes is the Rs 20-30 lakh segments and this is in short supply in Hyderabad, like other major cities in the country. This is because most project developers sought to focus on luxury apartments, priced at Rs 40-50 lakh and above.

According to Mr Aditya Verma, Business head, Makaan.com, "the current supply in sub-Rs 30 lakh housing segment in Hyderabad is low. With the expected revival in demand, we can expect an end in price correction in the segment. However, the correction will continue in the higher price segment, at least for now." Though builders do not admit publicly, the rates have come down by about 20-25 per cent, opening up scope for discussions on prices.

‘Below Rs 40-lakh' budget

A survey conducted by Makaan.com finds that about 77 per cent property seekers in Hyderabad are looking at homes below the Rs 40-lakh budget. The survey sounded out 13,426 property seekers, providing interesting insights.Mr Verma feels developers in Hyderabad need to rethink their pricing strategy and focus more on the affordable segment to bridge the demand-supply gap and bring the much-needed bounce back into the real-estate market.Most property seekers are playing a wait-and-watch game. Forty-three per cent property seekers from Hyderabad expect further price correction in the coming months. Significantly, about 13 per cent are holding back due to prevailing job insecurity.Another 8 per cent have opted to defer their decisions due to high home loan rates. There is general expectation that home loan rates would come down further. And the decision by another 30 per cent of the respondents to hold back purchase is influenced by all of the factors.

The Chairman of MAK Projects, Mr Murali K. Reddy, said that several of the developers are finding it difficult to market their apartments in the Rs 50 lakh and above category due to tight market conditions. Significantly, they are also not in a position to bring down prices much because the land purchase was made when the market was at its peak."Most  Real estate developers purchased lands at high prices as if there is no tomorrow. With the real-estate sector now mirroring the harsh market conditions, it has created unmanageable burden on the entire system. The interest rate at about 11 per cent was high till recently and the recent downward trend in rates is welcome news," he said. Lower interest rates for apartments of up to 1,200 sq.ft and loans for less than Rs 20 lakh apartments and houses are expected to spur some activity. But the market is woefully short of supply of such properties.The Vice-President of IJM (I), Mr Manjit Singh Brar, said most discussions around projects and properties are failing to materialise into deals due to hard bargaining by prospective buyers. Buyers of new properties start with this line: What discount are you offering? Anything less than 20-25 per cent is not appealing to new buyers given the current market conditions. For builders who have developed project on, say, a margin of about 15-20 per cent it is not possible as they acquired the land when prices were ruling high, said Mr Brar.

Looking beyond tech staff

Significantly, developers are looking at the affordable housing segment where there is heightened interest. Any apartment priced at more than Rs 2,000 per sq.ft and above is being approached cautiously. Buyers continue to discuss but postpone, hoping prices will come down further, he said. Asked about freebies, Mr Brar countered with, "how can one offer freebies such as car or discount? A builder will have to make good this amount from somewhere to offer such a deal."However, Mr Reddy said some of the projects slated to take off now are better placed because they factored in the current slowdown and market conditions. Those getting into land deals now are able to get nearly half or one-third of the price sold about a year ago.Significantly, there is a small segment that is not deterred by prices. These are the ones that do not hesitate to invest, say, a crore or two on houses and are also not affected by the general economic slowdown. Such villa projects continue to command buyers but prices have been affected there too, as buyers look to drive a harder bargain, Mr Reddy said.

At least half a dozen developers have unveiled plans to develop apartments and houses for the affordable segment, looking beyond the IT sector staff. Due to the impact on the tech sector, builders too are looking at other segments. New projects will take about 12-18 months for implementation.for more detils http://www.maaproperties.com

The financial world may be facing uncertain times, much speculation could be going on over the rise and fall of real estate prices, but one fact cannot be ignored - land and property continue to be hot investment favourites.With banks decreasing their interest rates marginally on home loans and the real estate developers yet to oblige the appeals made by the former finance minister P Chidambaram (now home minister),NAREDCO and CREDAI to cut prices, a stalemate seems inevitable. Under the current scenario, consumers (home seekers) are in a fix.Several realty experts opine that the present reduction in the home loan interest rates is not enough to boost sales. It has to be matched with a correction in prices and rational pricing.The move by the finance ministry and the Reserve Bank of India (RBI) to beat the slowdown and boost demand in real estate sector does not seem have borne any fruit, thus far.The much-hyped cut in interest rate in home loan has not created any loan rush - for one single reason - it was inadequate. "It's too less.

Buying a house is still not affordable. Like inflation, rate of interest also should be brought down to the single digit level," says Sunit Haldar, a resident of Mayur Vihar who is looking for a flat to accommodate his growing family. The home-seeker takes a decision of buying a house, usually once in a lifetime. He thinks a hundred times before committing to a long-term liability of loan repayment, before approaching the bank, or negotiating with the developer. He knows his math better than anyone else. For him the real push to go for the flat would be if it were within his affordable bracket. But, in the case of recent rate cut, the reduction was lacklustre.For example, the EMI for the loan amount of Rs 20 lakh for a 15-year-tenure at the earlier rate of interest of say 13.5% was around Rs 26,000. If the rate of interest is reduced by only 0.75% to the level of 12.75%, then the effective EMI would be around Rs 25,000. The recent reduction in rate of interest by 0.75% would reduce the monthly burden only by Rs 1,000. Now consider the same case from a different angle. If EMI is Rs 26,000, the monthly income of this person would have to be a t least Rs 60,000 to Rs 70,000. Will reduction of Rs 1,000 matter to this person? Will he be rushing to raise a loan to save just Rs 1,000? Thus, one could not see a rush at the home loan counters as a result of banks lowering the interest rates.

"High interest rates are choking the demand" turned out to be a weak argument as lower rates did not trigger any demand from the home seekers. RBI could pump in the liquidity but the affordability couldn't be increased. Initiatives fell flat in pushing the home seekers to the site as they are still sitting on the fence, with no home, worth the value, in sight.As far as developers are concerned, they have relented to the appeals of Chidambaram. National Real Estate Development Council (NAREDCO) and Confederation of Real Estate Developers Association of India (CREDAI) have asked their member developers to cut the prices in the range of 5% to 10%.Rohtas Goel, chairman of NAREDCO, says that price cuts will help escalate real estate demand and reduce the burden on customers. According to Kumar Gera, chairman, CREDAI: " We are advising the members across the country to make every effort in lowering prices to the levels possible.This will have a desirable impact and cascading effect on employment in the industry, as well as on more than 170 other industries. It will also have a telling impact on the economy and country as a whole." 

Addressing corporate heads and business leaders at the India Economic Summit in Delhi (organized by the World Economic Forum and the Confederation of Indian Industries), PChidambaram said: " Hotels must cut tariffs, airlines must cut prices, real estate must cut rates of apartments and homes they sell, car makers and two wheeler makers must cut prices." But the real estate developers have their own view. They say this won't work until lending rates are also slashed. Whatever correction was to happen has already taken place. Today there is no cushion or margin for developers to further reduce prices."We have already cut prices, which has brought our margin down to 15% from 30% last year.If we cut prices further,our margin will get wiped out," said Emaar MGF, MD, Shravan Gupta."Prices are a function of demand and supply. Today supply is far ahead of demand," says DLF chairman K P Singh. A Unitech spokesperson said price cut was a "good idea". The group has launched a number of affordable housing projects in NCR. Parsvnath Developers' chairman Pradeep Jain says price cut is unlikely even though builders may focus on smaller size homes to bring down overall cost.

The global liquidity crunch has caught up with people who plan and design our buildings. Members with the Indian Institute of Architects (IIA) say business volumes for the industry have slumped between 50 and 80 per cent compared to the year-ago period with new construction projects coming to a full stop and on-going ones slowing down. While volumes in the industrial segment are down about 50 per cent, architecture firms with exposure to the real-estate segment are the worst hit with business volumes nose diving 80 per cent, says Mr Naresh Narasimhan, an architect.

The real estate industry, he says, is going through a “de-leveraging” process and it could take at least three quarters before things start looking up. In terms of built up spaces, the real-estate industry cashed in on a great demand cycle for the past six years. Bengaluru, Gurgaon, Pune and Hyderabad led this demand drive, vice-president of IIA, Mr Pandurang Potnis says: “The construction speed in the last six months is now down about 50 per cent. The demand for construction of new hotels and apartments are down 25 per cent sequentially.” The response of architecture firms to the crisis is not any different from what the rest of the industry has been following. They have been cutting down the expense fat, improving service levels with existing clients while rationalising systems and processes.

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With the rupee depreciation with the dollar, Omaxe and other property developers in India plan to target the NRI buyers. NRIs can get a good deal now because of the recent depreciation of the rupees against the dollar. This would benefit NRI purchase around 20 percent. Property investment in India at this time could be a good deal. Prices have declined by 15 to 20 percent in last few weeks. The Omaxe Real Estate Developer, one of the leading companies in this field is offering NRI property investment like multiplex, shopping complex to 2BHK apartments in Bangalore, Pune, Calcutta, Chennai, Hyderabad and already sky high Mumbai and Delhi.

It is one of the top real estate developers which has a lot of experience and is committed to achieving excellence. They also have a separate interface for Non resident Indians (NRIs). Other features the company offers are: email-based subscription for newly launched projects. This keeps the readers up-to-date with the latest news regarding the real estate infrastructure and current sales in their specified city based on their budget-based selection and choice of accommodation/housing. Omaxe India Ltd claims to be the first ISO 9001 certified company in northern India, which develops real estate in Northern, Central and Southern India.

As their line says, ‘Turning dreams to reality’, the company does the same with their state of art designs which are similar to the international standards. The company hosts experts in the field who give their best to all their projects. Over a period of time Omaxe have executed a number of high profile projects for multinational clients. NRIs have played a very important role in transforming the Indian real estate market. Opening-up of the Indian economy provided them with new opportunities and they have shown a great deal of confidence in the changed set up. This is the time when people recognize the importance of selecting the right place to invest. According to Mr. Girish Garg, Head of Marketing, "our site has always been at the forefront for the way our projects have been dealt with. Each one of them has a unique feature about it, which best describes its utility. We use the best materials in construction, which ensures safety and longevity to the buildings. And a lot of research and planning goes into each of our projects, so as to guarantee client satisfaction. Most of our clients have given us repeat projects, impressed by our work". With their numerous projects running simultaneously they have proved that they have carved a niche for themselves in the real estate sector.

The Hyderabad Metropolitan Development Authority had announced as many as 22 satellite townships around the Outer Ring Road three years back. However, except for one at Tellapur and the other at Srinagar, the others have remained on paper. Townships were planned at Medchal, Goudavelli, Dommata, Pochampally, Bowrampet, Aliyapur, Sultanpur, Khardanur, Paatighanpur, Edulanagulapalli, Kollur, Balapur, Nadargul, Thorrur, Munaganuru, Kuntluru, Korremul, Rampalli, Cheryala, Dharmaram, and Shamirpet. The proposed township policy, which promised to give stake to land losers in these townships, has also not been given final shape though the Phase- I of the Outer Ring Road is all set to be opened for vehicular traffic.

The township at Tellapur is being developed by New York- based firm, Tishman Speyer, and the one at Srinagar is being taken up by Ramkey Infrastructures. Both are integrated townships comprising of residential and commercial ventures and other business facilities. But even HMDA officials are not sure whether the remaining townships will come into being or not. Major reasons for the projects not taking off are the real estate slump, problems pertaining to large-scale acquisition of land and widespread agitations by farmers and political parties. Efforts by the government to rope in private parties and the HMDA’s attempt to raise money through auctions also failed. "We hope the global recession will ease and private players will once again come forward to take up such projects," says an official.

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